Weak nuclear results cause dip in OPG profit

Weak nuclear results cause dip in OPG profit; More station outages cause operating expenses to increase, prompting company's application for 35-per-cent rate hike

Toronto Star - Mar 07, 2014, John Spears Toronto Star

A weaker performance by Ontario Power Generation's nuclear sector dragged down profits for the company owned by the province.



OPG reported Thursday that net income dipped to $135 million in 2013 from $367 million a year earlier.

Revenue rose to $4.863 billion from $4.732 billion.



The company's nuclear generating sector contributed to the weaker profit showing, as the sector turned in a loss of $19 million before interest and taxes, compared with a profit of $364 million the year before.



Outages at nuclear units - some planned and some not - were a factor in the weaker results, the company said.



The Darlington station ran at 83 per cent capacity in 2013, down from 93 per cent the year before, according to the company. The Pickering station dipped to 74 per cent capacity from 78 per cent.  The company's overall nuclear output dipped 8.8 per cent in 2013.



The increase in outages hit OPG's finances in two ways, chief executive Tom Mitchell said in a release. The company earned less revenue and incurred higher operating, maintenance and administration expenses.

The prices OPG receives for the output of its nuclear stations are regulated by the Ontario Energy Board. The company has applied for a 35-per-cent increase in its nuclear rates.



OPG was also hit with higher expenses involved in shutting down two big coal-burning stations, at Nanticoke and Lambton.



Hydroelectric output increased 7.2 per cent, as water levels rose and OPG completed the 10.2-kilometre Niagara tunnel, which channels water through its generating station in Queenston.



The company says it's continuing to trim staff. It had more than 11,000 employees in 2011, and has reduced that number by 1,600, mostly through attrition.



OPG was flayed by provincial auditor Bonnie Lysyk for over-generous salaries and pensions in her latest report.

Three top executives, including the chief financial officer, were let go in the wake of her report.



Lysyk had also found that, while the company had trimmed its overall workforce 8.5 per cent since 2005, the senior management ranks had grown by 60 per cent.