Point Lepreau refurbishment risks 'not adequately addressed'

NB Power did not adequately address the financial risks posed by the refurbishment of the Point Lepreau nuclear generating station, says the province's auditor general.

The project took 37 months longer than expected and cost $2.4 billion — $1 billion more than anticipated.

Kim MacPherson says $90.2 million was spent before the the project even had final approval.

That money would have been lost if the project had not gone ahead, she said in her annual report, released on Thursday.

MacPherson also expresses "uncertainty" about the accuracy of the forecasted recovery model for the refurbishment's deferral asset, which represents 95 per cent of NB Power's total regulatory assets.

The money is expected to be recovered from ratepayers over 27 years, the estimated operating life of the refurbished plant.

“There is an assumption that there will be a stable operating environment throughout the life of the plant," she states. “We question that assumption."

In March, the Energy and Utilities Board approved Point Lepreau's 27-year operational plan, but notified the utility it would review that approval if the reactor strayed too far from its short term performance targets.

MacPherson promises a detailed look at the "reasonableness" of individual Lepreau refurbishment expenses next year.

Point Lepreau is Atlantic Canada's only nuclear reactor.

The 660-megawatt plant produces enough electricity to power more than 333,000 homes per year, officials have said.

The refurbishment is one of the largest capital projects undertaken in New Brunswick.