The power to shift costs

Dalton McGuinty insists that nuclear power is the only way to add enough capacity to keep Ontario running. But at the same time, McGuinty's government is going out of its way to offload the costs and risks of any new plants:

In unveiling today its long-awaited plan to address the province's looming electricity crisis, Ontario will include measures to protect consumers from cost overruns associated with building new reactors.

As part of that plan, government officials have been in talks with the federal government about having AECL build the reactors for a fixed price and by a fixed date, government and industry sources said. The contract would include penalties for not meeting these performance guarantees.

The federal government has been involved in the talks because it would ultimately be on the hook for providing the guarantees as the sole shareholder of AECL, the government sources said.

Now, I recognize the value of government guarantees when it comes to minimizing unknown risks to create an incentive for new developments. But the nuclear industry should surely be well-enough developed by now for all parties to know the costs and risks involved. And it speaks volumes that the same premier who insists that there's no other option refuses to be stuck with the downside of nuclear development.

Ultimately, McGuinty's request begs the question of why the federal government would be willing to provide substantially more support for nuclear power than for any other type of power generation. And if the only way nuclear power can be cost-effective is for Ontario to offload a chunk of the costs, then surely it's worth seeing whether or not other forms of energy can do the job given the same level of support.