TransCanada Corp has struck a C$4.25 billion ($3.6 billion) deal with the province of Ontario to restart mothballed units at the Bruce nuclear plant.

Ontario Power Authority (OPA), a Crown Corporation of the Province entered into a long-term agreement under which the currently idle Units 1 and 2 at Bruce will be restarted and the operating life of Unit 3 extended by replacing its steam generators and fuel channels when required. In addition, the steam generators on Unit 4 will be replaced.

TransCanada, which has been a partner in Bruce Power since February 2003, is expected to invest approximately C$2.125 billion ($1.8 billion) of the costs. Bruce Power will provide the rest of the required investment.

The project will run through to 2011, with the first mothballed unit expected to be restarted sometime in late 2009. AMEC has been awarded a contract, worth up to C$510 million ($430 million) to manage the restart while Babcock and Wilcox subsidiary B&W Canada has signed a contract with Bruce Power to manufacture 16 replacement steam generators for the plant. The generators will be engineered and manufactured at B&W Canada’s Cambridge, Ontario, facility and are scheduled for delivery to the Bruce A site between 2007 and 2008.

B&W Canada originally manufactured the Bruce A Units 1 and 2 steam generators more than 30 years ago.

Bruce Power will receive C$63/MWh ($53/MWh) for the electricity produced by all of the Bruce A units, compared with an average price of $67.65/MWh ($57/MWh) for Ontario. Bruce Power will pay all capital costs related to the refurbishment of the units, and ensure that much of the risks of cost overruns related to the refurbishment and restart of the units are transferred away from Ontario ratepayers. The output from Bruce B will continue to be sold into the Ontario spot market and to various customers under fixed price contracts.

Restarting the two idled Bruce A units will add 1,500 MW of capacity from the Bruce Power site, located on the eastern shore of Lake Huron, north of Kincardine, Ontario. The Bruce A and B stations each consist of four CANDU pressurised heavy water nuclear reactors. Unit 1 and Unit 2, each rated at 769 MW, were taken out of service in 1997 and 1995 respectively.

The transaction is expected to close in the next few weeks with work starting immediately thereafter.