Ontario’s Liberal government yesterday committed the province to the controversial policy of relying on nuclear reactors to provide the bulk of its electricity for the foreseeable future.

Energy Minister Dwight Duncan formally announced that the government-owned Ontario Power Generation Inc. will go ahead with the $900-million refurbishment of a nuclear reactor at Pickering, east of Toronto.

“Ontario faces a looming electricity supply gap,” he said at Queen’s Park.

“The return to service of [the Unit 1 reactor] is the shortest lead-time major-supply project available in Ontario, and is crucial to ensure a clean, diverse and reliable electricity supply in coming years.”

Jake Epp, a former federal energy minister who is now chairman of OPG, said a realistic solution is needed. “The lights have to stay on,” he said.

The government will decide whether to rebuild two remaining nuclear units at the Pickering A plant after it receives a report on the status of the Unit 1 project in October, Mr. Duncan said.

But both he and Mr. Epp argued that Ontario has to rely on nuclear plants for electricity because the alternatives are too costly.

There are only a few, small opportunities to boost supplies of energy created by water, Mr. Epp said.

“If you want to put a lot of your supply into [natural] gas [generating plants], you have to compete on price, the volatility of price, and you have to compete with a lot of gas installations in North America with a supply of gas which, at best, is holding its present level,” Mr. Epp said.

Ontario is phasing out its coal-fired electricity plants as an environmental move.

“Interestingly enough,” Mr. Duncan said, “the price of coal has gone up dramatically in the last 18 months.”

Mr. Epp forecast that electricity from Unit 1 could be delivered for 5 to 5.5 cents per kilowatt-hour. Power from Unit 4 costs about 7 cents per kwh.

Ontario consumers now pay 4.7 cents per kwh for the basic supply for a home and 5.5 cents for more energy. Prices are expected to rise as new generating capacity is built and after the method for setting prices is taken out of the government’s hands next year.

The dams that supply hydro power help hold down the overall cost by producing power for about 1.5 cents per kwh. The province’s other nuclear plants have a cost of about 3.8 cents per kwh.

Each of the Pickering A units can provide 515 megawatts of power at any given time. Normal daily demand for electricity peaks at about 22,000 megawatts, rising to about 25,000 megawatts on very hot or very cold days.

Nuclear power accounts for about 40 per cent of Ontario’s electricity-generating capacity, while water provides 23 per cent, natural gas supplies 8 per cent and coal contributes 22 per cent. The Liberal government is committed to shutting down all the coal plants by the end of 2007.

New Democratic Party MPP Michael Prue attacked the decision to rebuild Unit 1 at the Pickering A station after earlier attempts produced major cost overruns. “We think that this is just another sinkhole. They will be very lucky to come in on budget, very, very lucky.”

He noted that when the previous Progressive Conservative government set out to refurbish Unit 4 at Pickering A, the cost was estimated at $457-million. The final cost was $1.255-billion.

The four units at Pickering A and four units at the nuclear installation on the Bruce Peninsula were shut down 7½ years ago because of safety and reliability risks. The plants were built more than 25 years ago.

The four nuclear reactors at Darlington were also costly. They were completed in 1992 for $14.4-billion, compared to the projected $4-billion price when work was started 12 years earlier.

The Ontario Clean Air Alliance criticized the decision yesterday. “Nuclear power is the highest cost and highest risk option to phase out Ontario’s dirty coal-fired power plants,” it said.