How OPG’s Nuclear Operations Contribute to Meeting Ontario’s

Electricity Supply Bruce Boland

Senior Vice President

Corporate Affairs

Ontario Power Generation

Ontario Power Summit

June 14, 2006

Contents

OPG’s Nuclear Operations Ontario’s Supply Outlook Ontario Govt. Response to OPA Supply Mix Advice Report Refurbishment New Nuclear OPG’s Current Nuclear Performance Pickering A, Unit 1 Continuous Improvement Strategies Community and Employees

OPG’s Nuclear Operations

10 nuclear units at three stations Pickering A

• in service: 1971-73• 2 operating units

– 2 others in safe storage • 1,030 MW

Pickering B • in service: 1983-86• 4 units• 2,064 MW

Darlington • in service: 1990-93• 4 units • 3,512 MW

Nuclear = 30% of OPG’s capacity, but 41% of our production (2005)

OPG nuclear delivered almost 30% of Ontario’s electricity (2005)

Pickering A and B

Darlington Nuclear GS

Ontario’s Supply Outlook

“…the combination of demand growth and generation retirements would create a gap of roughly 24,000 MW by 2025, equivalent to about 80% of Ontario’s current capacity.”

Ontario Power Authority, Supply Mix Advice Report, December 2005

“Ontario needs between 20- and 25,000 MW of new supply and necessary transmission enhancements over the next 20-25 years.”

Dave Goulding, IESO, January 2006

“…250 MW of generation is required within the central Toronto area by the summer of 2008 to adequately address the risk to reliability of an aging transmission infrastructure…Present forecasts indicate that 500 MW of total capacity should be planned for summer, 2010.”

IESO Ontario Reliability Outlook, February 2006

IESO, Ontario Reliability Outlook, February 2006

Ontario’s Supply Outlook (contd.)

Ontario is a summer–peaking jurisdiction

IESO’s demand and supply assumptions have been revised

Need for an additional 2,500 to 3,000 MW

IESO, Ontario Reliability Outlook, June 2006

Ontario Govt’s. Response to OPA Supply Mix Advice Report

Limiting nuclear to today’s installed capacity of 14,000 MW

OPG will be directed to undertake feasibility studies to refurbish units at Pickering & Darlington sites

OPG will begin an EA very soon on the refurbishment of Pickering B units

OPG will be directed to begin a federal approval process for new nuclear units at an existing facility

Includes an environmental assessment

OPG’s Nuclear Refurbishment/Life Extension

OPG is assessing business case for refurbishment Pickering B and eventually Darlington

OPG’s Plant Life-Extension Projects Division created in February 2006

Refurbishment process includes:

Completing of plant condition assessment for Pickering B in 2007

Beginning of an Environmental Assessment process

Undertaking safety reviews required by CNSC

Conceptual engineering for replacement of components – i.e, feeder tubes; fuel channels; steam generators

OPG mgmt. makes recommendation to OPG Board

Business case must be approved by OPG Board

Pickering B (foreground)

Darlington

New Nuclear

OPG has extensive expertise in operating nuclear facilities and in earning regulatory approvals

Darlington well suited as a potential site for new nuclear

Strong performance of Ontario’s nuclear plants remains a key driver for the industry

Darlington Planned Outage, 2006

OPG Nuclear: 2005 Performance Highlights

Darlington best performing multi-unit nuclear station in Canada -- 2nd consecutive year

Four OPG nuclear units among 10 best performing CANDUS in 2005

Returned Pickering A, Unit 1 to service

Pickering A receives Five Year licence from CNSC

Decided not to return Pickering A, Units 2 & 3 to service

Pickering A and B

Darlington

Capability Factors

03 04

8388 91

05

Darlington

03 04

69 7078

05

Pickering B

03 04

7076

70

05

Pickering A

OPG is Improving Its Nuclear Performance

TWh38

42 45

2003 2004 2005

Blackout

Nuclear Units returning

&reliability improving

OPG is Also Improving Human Performance at its is Also Improving Human Performance at its Nuclear Operations Nuclear Operations

Event free-day resets are a key HP metric

“Events” = human actions with negative consequences

Fewer is better From 223 to 33 in four

years – 84% reduction0

50

100

150

200

250

2001 2002 2003 2004 2005

223

153

111

4033

Adds 515 MW to Ontario’s electricity supply

Returned to service Nov. 2005 Project delivered on time and

essentially on budget. 2005 Performance

0.61 TWh 92.94% UCF

Q1 2006 Performance 1.07TWh 96.14% UCF

An important achievement as OPG prepares for potential future refurbishment projects

Pickering A, Unit 1 is Making an Important Contribution

OPG Nuclear Stations Have Specific Performance-Improvement Strategies

Pickering A: Path to Excellence continue to improve plant reliability through improved equipment reliability,

preventive maintenance, reduced backlogs successfully manage safe-storage of Units 2 and 3Pickering B: 85/5 achieve and sustain 85% capacity factor and 5% forced loss rate by 2007 complete inspection & maintenance of all fuel channels (SLAR) move to 40 day outages Darlington: Navigator maintain performance as Canada’s best performing multi-unit nuclear station

through improved human performance improved plant condition

move to 36-month outage cycle

Earning the Trust and Confidence of Communities is Essential to our Nuclear Operations

“OPG is much more than simply our most well-known corporate citizen…It's also one of our most generous corporate citizens. OPG gives back to our community in many ways, including the sponsoring of many city events, programs and initiatives.” Pickering Mayor Dave Ryan, May 2006

“The strong safety record and exceptional corporate citizenship demonstrated by OPG has given our community a very positive attitude toward nuclear technology, leading to high support for OPG operations in the host communities.” [Durham] Regional Chair, Roger Anderson, June 2006

“We are proud of the open and transparent relationship that we have with OPG.”Clarington Mayor, John Mutton, June 2006

Pickering Neighbourhood Walk Participants, including OPG PresidentJim Hankinson

Darlington Employees, Earth Day 2006 Local high school students who participated in charity bowling event with Darlington employees

Summary

OPG nuclear provides about 30% of Ontario’s energy needs

OPG has improved its nuclear performance and will continue to do so

Sustained, exceptional performance is key to our future success as a nuclear operator

Community support and employee commitment help ensure our “licence to operate”

Yesterday’s announcement ….more to come

Pickering Employees

Darlington Employees

How OPG’s Nuclear Operations Contribute to Meeting Ontario’s

Electricity Supply Bruce Boland

Senior Vice President

Corporate Affairs

Ontario Power Generation

Ontario Power Summit

June 14, 2006