Bruce Power Completes Refurbishment Program

On October 31, 2005, the investors of Bruce Power LP (BPLP) completed a multi-faceted transaction enabling one of the most significant investments in electricity generation undertaken in the Province of Ontario, namely, a refurbishment program to restart Units 1 and 2 and to refurbish Units 3 and 4 of the Bruce A Nuclear Generating Station (the Refurbishment Project). The Refurbishment Project is expected to cost $4.25 billion and to increase the combined capacity of the Bruce A and B Nuclear Generating Stations to more than 6,200 MW of power, or approximately 25 per cent of Ontario's electricity on a typical day. The project will allow the facility to generate electricity until 2035 and beyond, instead of closing its final unit in 2018 as previously planned.

The first facet of the transaction involved finalizing arrangements between BPLP, the newly created Bruce Power A LP (BALP), the Ontario Ministry of Energy and the Ontario Power Authority (OPA). Pursuant to this public/private initiative, BALP will undertake the Refurbishment Project and the OPA will ensure a stable price to BALP and Ontario electricity consumers for power generated at Bruce A. Concurrently, BPLP and BALP completed the negotiation of certain arrangements between BPLP, BALP and Ontario Power Generation Inc. (OPG), including amendments to the lease of the Bruce Nuclear Generating Station that was originally entered into between BPLP and OPG in May 2001.

The second facet of the transaction required the reorganization of BPLP and BALP, and the receipt of certain advance tax rulings. As a result of the reorganization, BALP is 47.4 per cent owned by each of TransCanada Corp. and BPC Generation Infrastructure Trust (a trust established by OMERS), with trusts associated with the Power Workers' Union and the Society of Energy Professionals (PWU Trust and Society Trust) owning the remaining 5.2 per cent. TransCanada and BPC Generation are each expected to invest approximately $2.125 billion in BALP over the life of the Refurbishment Project. TransCanada, BPC Generation, PWU Trust and the Society Trust will also remain limited partners in BPLP along with Cameco Corp.

BPLP will continue to operate the four nuclear reactors at the Bruce B Nuclear Generating Station. The effective split of BPLP and BALP also required the transfer of certain assets and the entering into of a service agreement pursuant to which BPLP will provide long-term operations, management and other services to BALP. Contemporaneously with the reorganization, BPLP amended certain credit facilities provided by a syndicate led by the Bank of Nova Scotia.

The third facet of the transaction involved the completion of nine key construction contracts and related arrangements between BALP and six nuclear construction contractors (Atomic Energy of Canada Ltd., SNC-Lavalin Nuclear Inc., Siemens Canada Ltd., Babcock & Wilcox Canada Ltd., ES Fox Ltd. and NNC Canada Ltd.), as well as the negotiation of revised fuel supply and related arrangements for BPLP and BALP with Cameco.

Representing the limited partners and Bruce Power in negotiations with the Ministry of Energy were McCarthy Tétrault LLP's David Lever, Michael Weizman and Seán O'Neill (energy/corporate) and Jerald Wortsman and Jillian Welch (tax). Acting on behalf of the Ministry were Blake, Cassels & Graydon LLP's Kenneth Pearce, Robert Power, Stephen Ashbourne, Leslie Morgan, Leslie Wong, Mario Nigro and Marianne Smith, and Ministry in-house counsel Michael Boll.

Bruce Power's in-house counsel, Len Arnold, and McCarthy Tétrault's David Lever, Gordon Sato, Harold Huber, Fred Rubinoff and France Tenaille represented Bruce Power and the limited partners. OPG's general counsel, Adèle Malo, and Torys LLP's Krista Hill and Don Roger represented OPG in amending the arrangements between BPLP and OPG.

Spearheading the reorganization of BPLP and BALP on behalf of BPC Generation, OMERS and BALP was a McCarthy Tétrault team led by David Lever and comprised of Daryl McLean, Robert Stephenson, Harold Huber, Ian Palm, Seán O'Neill, Nicola Geary and Caroline Jageman (energy/corporate commercial), Gordon Sato and Fred Rubinoff (real estate), Jerald Wortsman, Andrew Silverman and James Warnock (tax), Chris Hunter (IP), Lorne Salzman (competition), Greg Winfield (pensions), Eric Gertner (research), Paul Boniferro (employment) and Doug Thompson and Doug Hamilton (environmental), and Borealis' in-house counsel, John Knowlton.

TransCanada was represented in-house by Al Bellstedt, Q.C., executive vice-president, law and general counsel, David Kohlenberg, vice-president, law – power, John Cashin, associate general counsel, and Craig Newman; and by Stikeman Elliott LLP with a team comprised of David Robottom, Darin Renton and Peter Hamilton (energy/corporate commercial), Gary Nachshen (pensions and benefits), Brenda Hebert, Jim Harbell and Eric Carmona (real estate) and David Weekes (tax).

In the reorganization, Cameco was represented by in-house counsel Sean Quinn, along with Osler, Hoskin & Harcourt LLP's Donald Ross, Donald Gilchrist and Chad Bayne (corporate commercial), Adrian Hartog and Jack Cook (real estate) and David Tetreault and Kim Wharram (tax), and Cassels Brock & Blackwell LLP's Bruce McNeely (corporate commercial).

John Ball, Mary Main and Jennifer Ferguson of Keyser Mason Ball LLP represented the Society of Energy Professionals and Society Trust.

Graham Smith of Blakes and in-house counsel Christopher Dassios represented the Power Workers' Union and the PWU Trust.

BPLP's interests in the reorganization, asset transfers and services agreement, were represented by in-house counsel Brian Armstrong, Q.C., Brian Hilbers and Len Arnold, and a Gowling Lafleur Henderson LLP team led by David McFadden and Myron Dzulynsky, and comprised of Darryl Brown, Terry McNally, Paul Harricks, Robert Milnes and Rudy Morrone (corporate commercial/energy), Peter Murphy (IP), Alan Dean (real estate), Tim Wach, Ash Gupta and Michael Bussman (tax), Christopher Alam (opinions), Katherine van Rensburg (environmental), Dan Hayhurst (pensions) and Hugh Christie (employment). Mark Contini of Mathews, Dinsdale & Clark LLP represented BPLP in labour matters. BPLP and BALP were represented in respect of fuel arrangements in-house by Brian Hilbers, and by Gowlings' Paul Harricks. Cameco was represented in-house by Wally Leis.

In matters relating to the amendment of its credit facility, BPLP was represented in-house by Brian Hilbers, and by Gowlings' Michael Anderson. The Bank of Nova Scotia was represented by McCarthy Tétrault's Gordon Baird and Martha Hundert.

In respect of the network of construction contracts, BPLP and BALP were represented in-house by Brian Hilbers; by Gowlings' Terry McNally, Darryl Brown, Henry Ellis, Peter Murphy and Peter Schneider (corporate commercial/ construction), Katherine van Rensburg (environmental), Michael Watson and Christopher Alam (opinions), and Jacques Shore and Hy Calof (Crown Agency matters); and by McCarthy Tétrault's Don McLeod, Gordon Sato, Don Gibson, Eric Gertner and David Izett.