BREAKING NEWS: NB Power ‘recklessly’ pushed Lepreau’s refurbishment

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Lloyd’s Underwriting says NB Power ‘ignored’ expert advice during refurbishment

By Robert Jones, CBC News

Posted: Apr 26, 2012 5:47 AM AT

Last Updated: Apr 26, 2012 10:30 AM AT

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NB Power shares more responsibility in the delays at the Point Lepreau Nuclear Generating Station, according to documents filed in court. (CBC)
NB Power shares more responsibility in the delays at the Point Lepreau Nuclear Generating Station, according to documents filed in court. (CBC)

A group of insurance companies being sued by NB Power for failing to pay for problems at the refurbishment of its Point Lepreau Nuclear Generating Station say the utility is far more responsible for delays at the project than it has been admitting.

The insurance companies, all operating under the banner of Lloyd’s Underwriting, say in court documents that NB Power officials ignored expert advice to halt the installation of the reactor’s calandria tubes after several failed leak tests early in 2010.

Instead, all 380 of the ill-fitting tubes were installed and later had to be removed, a mistake that added a year and hundreds of millions of dollars to the problem plagued project.

“NB Power recklessly and willfully agreed with AECL to continue to install new calandria tubes in the face of known leak test failures,” the companies say in defence of a decision not to pay an insurance claim made by the utility.

“NB Power ignored expert engineering advice and breached its policy obligations to minimize loss or damage.”

The project is now three years late and more than $1 billion over budget.

The insurance company accusations are the first time NB Power has been directly implicated in delays at Point Lepreau. Both the utility and the New Brunswick government have long maintained AECL is solely to blame for all problems on the project.

NB Power issued a statement on Thursday responding to the statement of defence.

“NB Power was aware of the allegations filed as part of the insurers’ defence and is prepared to dispute these allegations as part of the ongoing legal action. Allegations of this nature are not uncommon for a project of this magnitude,” the statement said.

‘Totally ignoring this expert advice’

In 2011, Gaetan Thomas, the president and chief executive officer of NB Power, told reporters the company played no role at all in the decision to install leaky tubes.

“AECL is the expert,” said Thomas. “The decision was accepted as per the contractor’s recommendation.”

But in court documents filed earlier this month insurance companies say a group of both NB Power and AECL officials made the decision to forge ahead with tube installations despite advice from other AECL experts to stop.

“On Feb. 3, 2010, the (AECL) Office of the Chief Engineer recommended to the Refurbishment Project Team, comprised of both NB Power and AECL personnel that calandria tube installation be immediately suspended,” according to the document.

“Despite, and totally ignoring this expert advice the Refurbishment Project Team continued to install the new calandria tubes.”

The tubes didn’t fit properly because AECL polished the holes they rest in with wire brushes that scratched the surfaces and made air tight seal impossible in many cases.

Both AECL and NB Power had insurance policies covering damage and delays caused by damage and are attempting to collect under those provisions. NB Power is suing for a minimum of $324.5 million with AECL claiming an additional $204.6 million.

But the insurance companies maintain the damage and delays were caused by negligence, not accidents and have refused to pay

An identical refurbishment started in Korea a year after Point Lepreau finished a year earlier in part because crews stopped installing calandria tubes when they didn’t fit, the insurance companies claim.

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