Lawrence Solomon
The London Free press
June 11, 1985

It’s a familiar story: government and the nuclear industry lined up in favour of building more reactors; consumer groups and environmentalists lined up in opposition.

But now there’s an unlikely twist. The most powerful business lobbies on the continent are entering the fray, and they’re turning their big guns against the nuclear establishment they once endorsed.

Leading the charge is the Electricity Consumers Resource Council (ELCON), a high-powered United States lobby representing the likes of General Motors, Dow Chemical, Kaiser Aluminium and Bethlehem Steel.

ELCON’s members, who account for one-tenth of all the electricity consumed by U.S. industry and one-twentieth of total U.S. consumption, have served notice that they’re going to fight the “build nuclear at any cost” mentality every step of the way.

Neither residential nor industrial customers “can afford to pay the price for unnecessary utility-capacity,” says ELCON, raking the Reagan government over the coals for turning its energy secretary “loose to stump the countryside in support of any and all nuclear projects, regardless of their economic impact. This is contrary to the good business judgment the administration has championed in other areas.”

The bottom line that is infuriating these industrial giants, who say they are having difficulty competing in international markets, is an unwarranted “bailout of a few utilities for sunk costs at the expense of consumers… and at the expense of all the jobs an unburdened industry could create.”

Canada has no less need for job-producing industries, and no less need to remain competitive. According to the National Utility Service, a worldwide consulting firm based in New York, Canada has the highest average increase in commercial electricity rates among the 12 countries it surveyed.

Cold, hard facts like these are convincing Canada’s once complacent businessmen that it will no longer do to sit back while their position slips in the world’s market place. Although they are lagging behind their U.S. counterparts in ordering a frontal assault against nuclear power, the corporate establishment is preparing to do battle with Ontario Hydro, the only utility in Canada still building nuclear plants. “Nuclear power could well be a big issue for us in the next little while,” says Paul Kovacs, the chief economist and energy policy expert for the Canadian Manufacturers Association, one of Canada’s most respected lobbies. “We’re not certain that this crown corporation is doing what’s in our interest.”

The CMA’s Kovacs admits he’s “hearing more of our members grumble” about Hydro and its nuclear policies, and states they have good reason. “Nuclear plants which were at one time cost effective are no longer cost effective,” he says. As a result, industries in Ontario, where most of the nuclear plants are located, are being hit with rate increases they can’t afford. The CMA had been a strong supporter of nuclear power in the past but the changing economics of nuclear power are enough to make even its staunchest advocate wince.

The first large reactors built at Pickering in the late 1960s and early 1970s produced power at one cent a kilowatt-hour – a bargain by anyone’s reckoning. The new ones being built now at Pickering – twins of the one-cent producers – are spewing out power at a cost that is 5 1/2 times as great.

This hyper-inflation in the nuclear field – which has forced the price of nuclear to leapfrog above coal, hydro, and a host of other alternatives – means that consumers have to pay more for their power as each new nuclear reactor comes on stream. Increased power rates from government- owned Ontario Hydro have driven some, like Kidd Creek Mines president Don Lowe, to the point of exasperation. Kidd Creek, which has to compete in international markets to keep its Canadian operations afloat, even threatened to lead a protest because “our political leaders have got to be responsible.”

Representing Kidd Creek, Inco, Stelco, and some hundred other major power consumers is Elmer Lounsbury, the executive director of AMPCO, an organization specifically formed to keep Hydro’s rates in line. Some might argue that AMPCO’s history of standing up to Hydro is a sorry one, and Lounsbury acknowledges that AMPCO never opposed the utility’s economically risky nuclear ventures – ventures he admits were costly.

“I suspect Darlington will be the last nuclear plant that’s built,” Lounsbury says of the $ll-billion white elephant that is sure to make many of his members blanch when it comes on stream in the late 1980s.

Lounsbury is pinning his hopes on Tom Campbell, the new man at the helm of Hydro who “has a real open mind and will look at all the options.” But despite Lounsbury’s faith in Campbell, and his vote of confidence in the giant utility for being well managed, some Hydro practices come in for startling criticism. Lounsbury sees no merit in Hydro maintaining its strangle hold over electricity production. “Hydro’s monopoly should be partially broken up,” he said, echoing the call of environmentalists in arguing for free trade in electricity whenever buyers and sellers of electricity want to get together. “There’s no reason one industry shouldn’t be able to sell a surplus to another without Hydro’s permission.”

Not all Canadian business lobbies can be counted upon to oppose expansion of nuclear power, however. Notes Pat Reid, a former critic of Ontario Hydro as a Liberal MPP and now executive director of the Ontario Mining Association, “two of our members are Dennison and Rio Algom (uranium, mining companies)… We have no position against nuclear power.” Likewise, the CMA fears it will be opening a can of worms if it moves into high gear with an anti-nuclear campaign. “The New Brunswick branch of the CMA, which is hoping that federal subsidies can finance a second nuclear reactor in that province, is pro-nuclear,” Kovacs explains. But the sentiment in New Brunswick is increasingly becoming a minority viewpoint.

Nuclear power expansion is “one of the issues that our member companies have been coming to us with,” says Kovacs. “It’s a growing concern to the business community.”