TransCanada Provides Update on Bruce A Units 1 and 2 Restart Project
CALGARY, ALBERTA--(Marketwire - April 17, 2008) - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) today announced Bruce Power has completed its comprehensive review of costs to complete the Bruce A Units 1 and 2 Restart Project. The review, which was completed by Bruce Power, its owners and independent experts with significant experience in energy infrastructure mega-projects, included a thorough assessment of costs incurred to date together with a complete review of the remaining work. Based on the assessment the capital cost for the restart and refurbishment of Bruce A Units 1 and 2 is expected to be in the range of $3.1 to $3.4 billion, up from an original 2005 cost estimate of $2.75 billion. TransCanada's share is $1.55 to $1.7 billion compared to an original estimate of $1.375 billion. The project cost increases are subject to the capital cost risk and reward sharing mechanism under the agreement with the OPA.
"The Bruce Power restart and refurbishment project was carefully structured and is fully consistent with our disciplined approach to growth and value creation," said Hal Kvisle, TransCanada's president and chief executive officer. "Based on the new capital cost estimate of $3.1 to $3.4 billion for the Bruce A restart, TransCanada expects the unlevered after tax return on its investment to be in the middle of the previously announced range of 9.5 per cent to 13.5 per cent." He added, "In the event of a further 10 per cent increase in capital costs, our unlevered after tax return on the project would be approximately 10 per cent."
This outcome is a result of the risk and reward sharing mechanisms that were negotiated with the OPA.
With approximately 60 per cent of the project complete, it is expected that the two units will return to service in late 2009 and early 2010 adding 1,500 megawatts to the Ontario power grid.
Major project milestones and successes to date include:
- Babcock & Wilcox Canada and SNC Lavalin Nuclear have successfully manufactured and installed 16 new steam generators for Units 1 and 2, the first time such work has ever been done at a CANDU facility
- Stellar safety performance continues with nine million hours worked on the project without an acute lost-time injury
- Steam turbine work is progressing well with the Unit 2 steam turbine work largely completed while Unit 1 work is well underway with reassembly set to begin in May
- Significant progress has also been made on the complex reactor refurbishment work undertaken by Atomic Energy of Canada Limited (AECL)
Currently, AECL is beginning to remove the calandria tube components in Unit 2 which is the final component in the disassembly process. The next major step will be to install the new pressure and calandria tubes. AECL has faced unique challenges while developing new tools and robotic equipment to remove and replace the reactor's internal components. This work has been, by its very nature, discovery work since many of the robotic designs had to be tested during the project. As a result, Unit 2, which is the lead unit, has borne many of the first-of-a-kind risks which impacted overall costs for the project. However, as work has progressed, performance improvements have been experienced on Unit 1. Similarly the steam generator replacement program experienced improvements in efficiency by roughly 40 per cent between the first and second unit.
This comprehensive review also confirms that while the most challenging project risks have been removed, challenges still exist in the remaining work activities outside of the complex fuel channel and steam generator replacement programs. Looking forward there are more than 20,000 activities, both large and small, that have to be completed before Units 1 and 2 return to service. A range of Canadian companies are conducting these activities with expertise in the various elements of the plant systems and components. This work requires a high level of co-ordination and is being supported by more than 1,500 skilled building tradesmen and nearly 800 support staff drawn from across the country. Many of these activities will deliver safety and performance enhancements.
For further detail on the Bruce A restart and refurbishment project, please visit the Bruce Power website at www.brucepower.com.
About TransCanada
With more than 50 years experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada's network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 355 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, approximately 7,700 megawatts of power generation in Canada and the United States. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP.
Note: All financial figures are in Canadian dollars unless noted otherwise.
FORWARD-LOOKING INFORMATION
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CONTACT INFORMATION
TransCanada
Media Inquiries
Cecily Dobson/Shela Shapiro
(403) 920-7859 or (800) 608-7859
or
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(403) 920-7911 or (800) 361-6522 ext 7911
Website: www.transcanada.com