Bruce Power Closes $3.2B Deal with Ontario Power Generation

On May 12, 2001, Ontario Power Generation Inc. and Bruce Power LP successfully closed the transaction relating to the lease of OPG’s Bruce nuclear power stations to Bruce Power. Bruce Power is a Canadian partnership including British Energy plc (80 per cent), the UK’s largest electricity generator, Cameco Corporation (15 per cent), Canada’s largest uranium fuel supplier and the two main unions representing employees on site, the Power Workers’ Union and the Society of Energy Professionals (who are expected to subscribe for up to 5.2 per cent by May 2003). Financial close of this transaction follows both the approval of the Ontario Energy Board and the Canadian Nuclear Safety Commission.

Bruce Power is now the licensed operator of Bruce A and Bruce B nuclear stations, which Bruce Power has leased until 2018 with an option to renew the lease until 2043. The Bruce nuclear power stations include four reactors at the Bruce B station with a capacity of 3140 MW. Bruce B alone is capable of producing enough electricity for a city the size of Toronto. Bruce Power has recently announced its intention to restart two Bruce A reactors by 2003 following a condition assessment that confirmed both the technical and economic feasibility of restarting these reactors.

This transaction is the first in Canada where a nuclear power plant is being operated by a private-sector entity. The total value of the public/private partnership is more than $3.2 billion. It represents the first significant divestiture by OPG of its generating assets and is the first step in OPG’s mandate to reduce its control over Ontario’s generating capacity to create an open competitive electricity marketplace in Ontario.

British Power’s team was led by British Energy’s in-house counsel, John Young, together with Bruce Power’s General Counsel, Brian Armstrong, and Larry Korchinski, counsel for Cameco Corporation seconded to Bruce Power to aid in the financial close. Bruce Power was represented by the Smith Lyons Energy Group led by David McFadden, Q.C. (corporate, energy and strategic planning) and Paul Harricks (corporate and energy). Others in the Smith Lyons team include Seán O’Neill (corporate and commercial), Alan Dean (real estate), Terry McNally (corporate and energy), Tom Brett (energy regulation), Jim Fisher (energy regulation), Dan Hayhurst (pensions), Evelyn Moskowitz (tax), Bill McNaughton (labour), Katherine van Rensburg (environment), Myron Dzulynsky (partnership), Don Johnston (intellectual property/information technology), Peter Murphy (intellectual property/information technology), Robert Milnes (corporate), Dulce Mitchell (corporate and energy), and Kelly Murray (corporate and energy).

OPG’s team, led by Executive Vice-President of Law and Development David Drinkwater, drew upon the services of in-house counsel Dickson Harkness, Adèle Malo, Stan Berger, Shane Freitag, Cara Clairman, Jane Smale and Dan Dagan (seconded to OPG from Torys). The Torys team included Phil Symmonds, David Nowak, Brian Flood, Ryan Barry, Aaron Emes, Krista Hill, Alison Lacy, Emil Pellicer and Cameron Koziskie (corporate), Gabe Takach, Tamara Kronis, Adam Armstrong and Terra Rebick (intellectual property), Don Roger (real estate), Bill Estey and John Cameron (research), Robert Mansell (environmental), Linda Plumpton (litigation), Chris Medland (employment and pensions) and John Unger (tax). A $150 million working capital facility was put into place with The Toronto-Dominion Bank and The Bank of Nova Scotia.

Bruce Power’s financial team was led by Smith Lyons’ lawyers Michael Anderson and Nick Kluge, and the banks’ counsel was a team from McCarthy Tétrault consisting of Barry J. Ryan, Rasha H. El Sissi and Martha R. Hundert (corporate), as well as David A.N. Lever (power), Douglas R. Thomson (environmental) and Gordon S. Sato (real estate).

Cameco Corporation was represented by in-house counsel Sean Quinn and assisted by Donald Ross and Eden Oliver of Osler, Hoskin & Harcourt LLP.
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