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Nuclear Procurement Project Update

Archived Backgrounder

Nuclear Procurement Project Update

Phase 2 of the Request for Proposals (RFP) Process
Phase 2 of the RFP focused the competition on the cost of power, on-time delivery and investment in Ontario. 

The competitive process was designed to help ensure the greatest amount of cost certainty, lowest possible price and a fair approach to risk sharing. 

Working with Respondents on Pricing and Risk Sharing
During Phase 2 a number of bilateral commercially confidential meetings were held with each respondent to discuss the uncertainties and challenges in pricing and the commercially balanced way to deal with such issues as the deterioration of global credit markets, fluctuation in commodity prices, inflation, construction quantities and similar commercial uncertainties involved in a 10-year multi­billion dollar project.

Proposals Received
Infrastructure Ontario received proposal submissions from AREVA NP, Atomic Energy of Canada Limited and Westinghouse Electric Company for the Nuclear Procurement Project RFP.

Evaluating the Respondents
To achieve the best possible deal for Ontarians, respondents to the Nuclear Procurement Project RFP were evaluated in three key areas: 

  1. Lifetime cost of power
  2. Ability to meet Ontario's timetable to bring new electricity supply on line
  3. Level of investment in Ontario

Evaluation Results
Following an evaluation of the proposal submissions, it was determined that AECL had the best proposal.

  1. AECL is willing to accept the terms and conditions of the project agreement
  2. AECL has the most risk transfer -- but at an unacceptable price

Knowledge Gained
The competitive process has provided significant market intelligence on pricing and risk tolerance at an early stage in a ten-year multi-billion dollar project.

Crucial knowledge about structuring a fair deal will help the Ontario government move forward when it is prudent to proceed to next steps.

Timelines

Phase 1

  • On March 7, 2008, the Ontario Government announced a two-phase competitive procurement process to choose a preferred nuclear reactor vendor 
  • In April 2008, a series of Commercially Confidential Meetings were held with potential vendors
  • On May 9, 2008, Infrastructure Ontario announced that three vendors had submitted Phase 1 Proposal Submissions as required by the RFP 
  • On June 5, 2008, Infrastructure Ontario announced that all three vendors that had submitted Phase 1 Proposal Submissions received 'satisfactory' ratings and would be invited to proceed to Phase 2 of the RFP 

Phase 2

  • On June 16, 2008, Infrastructure Ontario released Phase 2 of the Nuclear Procurement Project RFP
  • From July to December 2008, a series of bilateral confidential meetings took place on aspects of design readiness and commercial aspects of the project 
  • On February 27, 2009, Infrastructure Ontario announced that all three respondents submitted Phase 2 Proposal submissions
  • On May 28, 2009, the Government of Canada announced that it was proceeding with a restructuring of AECL
  • On June 29, 2009, the Minister of Energy and Infrastructure announced that the Nuclear Procurement Project RFP was being suspended because of concern about pricing and uncertainty regarding AECL's future

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