Tuesday 7 October 1997

Atomic Energy Control Board

Dr Agnes Bishop, president

Mr Jim Harvie, director general, reactor regulation

Dr Alan Kupcis


Chair / Président

Mr Derwyn Shea (High Park-Swansea PC)

Vice-Chair / Vice-Président

Mr Monte Kwinter (Wilson Heights L)

Mr Sean Conway (Renfrew North / -Nord L)

Mr Doug Galt (Northumberland PC)

Mrs Barbara Fisher (Bruce PC)

Mrs Helen Johns (Huron PC)

Mr Monte Kwinter (Wilson Heights L)

Mr Floyd Laughren (Nickel Belt ND)

Mr John R. O'Toole (Durham East / -Est PC)

Mr Derwyn Shea (High Park-Swansea PC)

Also taking part / Autres participants et participantes:

Ms Marilyn Churley (Riverdale ND)

Ms Frances Lankin (Beaches-Woodbine ND)

Clerk / Greffière

Ms Donna Bryce

Staff / Personnel

Mr Lewis Yeager, research officer, Legislative Research Service

Ms Anne Marzalik, research officer, Legislative Research Service

Mr Richard Campbell, consultant

Mr Robert Power, legal counsel

The committee met at 1532 in committee room 151.

The Chair (Mr Derwyn Shea): The committee will be in order. I'll get the gavel later and try to bang the table a little lighter than that.

We have a number of items before us. To remind you, a lot of documentation has been forwarded to the committee by the AECB. It has not all arrived, or at least is not all in the hands of members. It will be distributed as soon as we can make it available. That is not all, I understand, of the AECB's making. We understand that; sometimes a delay will happen. But it will be in the hands of members, and if there are questions arising from documentation that has been handed out, we will be able to ask witnesses back to respond to information that flows from that.

You also have documentation before you today that is presented by Mr Power, our legal counsel. It responds to a number of issues raised in yesterday's hearings.

To remind us, today there are two portions of the agenda from now until 6 o'clock, when we will rise for votes in the House: We have Dr Agnes Bishop, president of the Atomic Energy Control Board, and we have Jim Harvie and Audrey Nowak; this evening at 7 pm we have Dr Allan Kupcis. That is the agenda for today.

Mr Doug Galt (Northumberland): I have a question. It relates to some confusion I was left with from the testimony being given yesterday by Ms Clitheroe and the response by Mr Power. We had some training, Electricity 101, so to speak, at the beginning. My understanding was that the Ontario government is very much at arm's length in the operation of Ontario Hydro. I'd really like further clarification from our legal counsel. Ms Clitheroe led us to believe that on a day-to-day basis almost, through directives, the Ontario government had a lot of control over Ontario Hydro. Those two opinions are diametrically opposed. I'd like some clarification from a neutral body.

The Chair: I think that's a reasonable request, and that did come out in the testimony that was presented to committee. Mr Power, would you respond to Mr Galt's questions.

Mr Robert Power: Actually, I'd like to defer that to my learned friend Mr Campbell, who had been prepared to speak to that.

Mr Galt: I'm not really looking for it right now, Mr Chair. I'm looking for it down the road or in writing, or however it can be put into the record. I just need clarification.

The Chair: Let me ask if he is able to give that information now.

Mr Richard Campbell: Yes.

The Chair: Let's do it now so we're all very clear about what the legislative responsibilities are.

Mr Galt: If that in fact is fair to Mr Campbell.

Mr Campbell: Richard Campbell, consultant to the committee. The testimony last week from the Ministry of Environment and Energy indicated, when the question was put to them, "Is Ontario Hydro regulated in the sense that the Ontario Energy Board regulates the gas industry, for instance?" the answer there was no. The answer provided, however, did indicate that there are a number of statutory responsibilities under the act; that Ontario Hydro needs to go before order in council for approval on a number of different things which are listed in the materials and which we can highlight to you again.

The specific question with respect to the rate freeze that was left on the record yesterday afternoon was, "Was the rate freeze a subject of a directive power under the act?" The Power Corporation Act, in section 10, provides that the government can make directions to the utility under certain conditions. That is not the case with respect to the rate freeze. The rate freeze is a statement of government policy which Ontario Hydro would normally take account of. In addition, in this case, Ontario Hydro has embraced that same policy as a corporate objective, to keep rates frozen until the end of the decade. It has not been the subject of a specific directive power under section 10.

Mr Galt: And you will provide us with some other examples of where they do and do not have direct control over Ontario Hydro?

Mr Campbell: Yes, we will.

Mr Floyd Laughren (Nickel Belt): I want to be perfectly clear, because I was the one who was asking those questions yesterday of the people from Ontario Hydro. Forgive me; I'm a country boy from the north who has a linear mind, and I really need this clarified. Are you saying -- I'll use an example which you can say is hypothetical, but on the other hand it's not fanciful either. If Hydro felt, as they viewed their responsible role, that they needed a rate increase for whatever reason, for safety reasons, economic reasons, environmental reasons, whatever, and if the Ontario government, regardless of who was in office, declared that they wish to have a rate freeze by Ontario Hydro, who at the end of the day says yes or no to that? Can Hydro say, "We cannot, in all good conscience, go along with that directive or request by the provincial government"? Does Hydro have the statutory right to do that?

Mr Campbell: Again, the question of a rate freeze has not been the subject of a direction under the act. If it were, then it's my understanding that the board of directors has the authority to make a rate decision. In the specific instance of a direction under section 10, if the board of directors feels it's in the best interests of the corporation, they have the authority to make that decision.

Mr Laughren: Okay. That clarifies it. In order words, there is indeed that arm's length. This is one way of putting it.

Mr Campbell: With counsel, we will put all this in writing to members of the committee.

Mr Laughren: It does indicate that there is an arm's-length relationship there. That's one way of spinning it. The other way of spinning it is that Hydro is, as many of us have been saying for a long time, basically a government unto itself and can decide what they think is best. At the end of the day, if they decide for one, would assume, responsible reasons that they don't want to follow that directive from the government, then so be it, that's their right. I don't want to put words in anybody's mouth, but that is, as a layperson, how I would view that.

Mr Sean G. Conway (Renfrew North): On that point, if I could, Mr Chairman, I think I've raised this point in the steering committee. It's a very good issue. That was one of the reasons some days ago I recommended to the steering committee that it might be a very useful thing to summon to this committee one of the ablest people I've know in my years here, W. Darcy McKeough, who served as both energy minister and finance minister, who is quoted in the academic literature in recent times as speaking directly to this very basic issue. I don't know whether Mr McKeough would come, but I would certainly be interested to have him here to, among other things, speak to that relationship. Certainly some of the recent literature that has been published by academic presses in this province has some very interesting testimony from Mr McKeough on that subject, about his very central experience in that triangular relationship.


The Chair: Thank you. I appreciate the interventions made by all three caucuses. Mr Galt, the written documentation will be provided for all members.

Mr Galt: Obviously, there are a lot of people still confused on this particular topic, and anything we can do during testimony to clarify this for this committee, as well as the people of Ontario, would be very important.

On clarification, there is a tremendous amount of information we have for the meeting today. I know this is kind of short notice, but in the future, if we can get this even 24 hours ahead, it would be helpful.

The Chair: I've spoken with the clerk. Every effort is being made to ensure that we get documentation to members as quickly as we can in advance of events. I share that interest. She assures me that every effort will be made to accommodate the wishes of the committee.

The authority issue is one I'll take under advisement. Let me give some thought to how I might best facilitate the concerns of the committee. We may try to find appropriate time for a further discussion on this matter, sooner rather than later, because clearly it is very central to the matter before us right now.


The Chair: Thank you very much to the witnesses. I appreciate your indulgence as we go through some previous business. Now let's turn our attention to -- first of all, would each witness please, as they present, identify themselves for the purpose of Hansard? Let me begin by welcoming the president of the AECB, Dr Agnes Bishop.

Dr Agnes Bishop: Thank you, Mr Chairman, ladies and gentleman. I would like to briefly introduce my colleagues to you. Mrs Kate Maloney is the director of the waste and impact division; Mr Jim Harvie is the director-general of reactor regulation; and Mrs Nowak is the head of our legal services unit of AECB. All are here to help answer any of the questions which you may have and are acting simply as resources for me.

In these opening remarks, I would like to address five areas: the mandate and responsibilities of the AECB; general issues relating to safety margins and licensing; overall performance of Ontario Hydro Nuclear; AECB's review of the IIPA and the safety system functional inspection findings; and the Atomic Energy Control Board's review of Ontario Hydro's recovery plan. All will be done very, very generally.

First, I would like to describe the Atomic Energy Control Board's mandate. The AECB is the federal agency established as Canada's nuclear regulator in 1946 by Parliament. It is composed of five Governor in Council appointees and has a staff of about 400. Approximately one-half of the staff work in areas related to power reactors. Under the Atomic Energy Control Act, the AECB has the authority to make and enforce regulations governing nuclear power production and use in Canada. The regulations establish the licensing regime, and I will describe that shortly. AECB's purpose is to regulate in such a way as to have no undue risk to health, safety, security for both people and the environment. The AECB is not responsible for energy policy, for licensees' cost structures or other business-related areas.

I'll turn now to the AECB's licensing process. The process is briefly outlined in chapter 1 of the briefing book, and I will not repeat those contents here. However, there are certain issues which I believe need to be highlighted.

The AECB fulfils its responsibilities in the regulation of nuclear power plants by setting the standards of safety, by monitoring compliance through regular inspections, evaluations and audits and by taking appropriate enforcement action so that any non-compliance is corrected.

The AECB, in issuing a licence, is stating that based on its evaluation of relevant information, the facility can be, and AECB expects it to be, operated safely under the conditions of the licence and for the term the licence is issued. It is not within the mandate of the AECB to either manage or to tell the licensee how to manage the facility. It does, however, have the responsibility to point out to the licensee any management practice which is contributing to a decrease in operational standards and which has the potential to eventually affect safety. The final responsibility for safe operation of the reactors must and does lie with the licensee.

Conditions of licence and the term of a licence may be changed at any time. If necessary, the AECB can order the shutdown of a reactor. The regulator distinguishes between issues which are of immediate concern to safety and longer-term issues which have no immediate implication for safe operation but have the potential to eventually affect safety if not corrected. Each is handled differently.

The safety standards set by the AECB are very high and require very conservative safety margins. A plant which satisfies these standards would receive an operating licence even if parts of its operations are being performed at a minimally acceptable level as defined in the IIPA report, as long as the safety margin is still acceptably conservative.

I will now summarize for you some of AECB's regulatory activities over the last decade in relation to Ontario Hydro. The first significant criticism Atomic Energy Control Board made of the quality of operations and maintenance of an Ontario Hydro nuclear plant occurred in 1986, and that was Bruce A.

By 1989, the results of the AECB inspections, audits and evaluations of Ontario Hydro nuclear facilities had convinced the board that the operating and maintenance standards at Ontario Hydro had declined to the point where corrective action was required. While the AECB concluded the reactors were being operated safely and therefore could continue to be licensed, significant improvements were needed to maintain adequate standards of safety in the longer term. The AECB informed the president of Ontario Hydro of this conclusion.

Ontario Hydro acknowledged the deficiencies and took several initiatives in an effort to correct them. They also recognized the depth of the deficiencies, as evidenced by their estimate that it would be 1995 before good or excellent performance by industry standards could be achieved.

As outlined in chapter 2 of the briefing book, over the years, in spite of new recovery initiatives, such as the business improvement plan of 1993 and others, changes in management personnel and organizational changes, Ontario Hydro continued to fail to improve their overall standards of operation. There were improvements in some areas, but many other targets were not being met. The plants were, however, continuing to meet the safety margins for licensing.

It should also be noted that over the years the AECB informed Ontario Hydro, at the most senior levels, of its dissatisfaction. We have documented the concerns in publicly available reports and discussed the issues at public meetings of the board. On August 11, 1995, the Pickering station manager was advised that if rapid improvement was not demonstrated, the AECB staff would recommend to its board members that the licences for the stations should be revised to restrict operation.

Ontario Hydro senior management recognized the letter from the AECB, giving notice that Pickering was on the threshold of being shut down as a "wake-up call." Ontario Hydro responded with a new quality-of-work initiative to address the underlying issues. AECB staff and board followed the operations at Pickering very closely.

In July 1996, I met with Mr Farlinger, chairman of Ontario Hydro's board, and Dr Kupcis, president of Ontario Hydro, to discuss AECB's continuing dissatisfaction with their overall nuclear performance and the necessity for Ontario Hydro to produce sustained results and to do so soon. In the opinion of AECB, unless Ontario Hydro was successful at improving its performance, it would only be a matter of time before other stations reached the operating level of Pickering; that is, in danger of regulatory shutdown.


I also emphasized that the Ontario Hydro board had the final responsibility for the safe operation of the stations. In AECB's opinion, they had not taken that responsibility seriously enough. Both Mr Farlinger and Dr Kupcis acknowledged their own internal audits had shown consistently that Ontario Hydro Nuclear's standards of operations and maintenance were only just acceptable. Both indicated a strong commitment to ensure improvements in the future.

This commitment and acknowledgement of poor performance by Ontario Hydro was stated by Dr Kupcis in a presentation to the AECB public meeting of September 12, 1996. In December 1996, Pickering received only a six-month licence. Some improvements in operation occurred and the licence was renewed in June 1997 for nine months. AECB continues to keep a very close watch on that plant. The other stations are also meeting the minimal safety margins, but all have areas requiring improvement both in the short term and long term.

In summary for this section of my report, Ontario Hydro has never been short on developing acceptable plans or initiatives to improve performance. They have consistently acknowledged their poor performance to the AECB. However, they have as yet been unable to transform those initiatives and plans into overall improved performance.

On August 13, 1997, Ontario Hydro announced the findings of the IIPA. This announcement and the IIPA report itself confirmed two general aspects of Ontario Hydro Nuclear's operations of its nuclear facilities, and I use the word "confirmed" since this was recognized by AECB and thereafter acknowledged by Ontario Hydro since 1989:

(1) That the performance of Ontario Hydro Nuclear was well below the level of performance achieved by the world's best nuclear utilities;

(2) That all of the Ontario Hydro nuclear plants were being operated in a manner that meets the regulations and accepted standards related to nuclear safety. This confirmed AECB's position that in spite of deficiencies in performance, all of Ontario Hydro nuclear plants were operating within an acceptable margin of safety and therefore licensable for operation.

Ontario Hydro further announced that it had directed management to begin a major overhaul of their nuclear facilities and that part of the nuclear recovery plan would involve layup of four units at Pickering A and the three operating units at Bruce A. They clearly stated that they were not closing these units for safety reasons but that they needed first to concentrate the resources on the other 12 units.

The team of nuclear experts who performed these reviews applied performance objectives and criteria, which include essential nuclear safety and environmental aspects of operation, and their results were judged against industry standards. The AECB uses similar criteria in its reviews with the exception that in the IIPA review the Ontario Hydro team applied criteria related to cost-competitiveness in defining industry standards in addition to the safety and environmental aspects. AECB's regulatory mandate does not include a licensee's cost-competitiveness.

Since the middle of August, AECB staff has been reviewing both assessment reports. They have extracted just over 400 safety-related findings from the reports which they are reviewing in depth. The preliminary report of these findings is to be found in board member document 97-167, which has been provided to you and which will be placed before the AECB public meeting this Thursday, October 9. The final AECB report will be before the Atomic Energy Control Board meeting on November 13 this year.

The findings are being reviewed by AECB staff. Conclusions to date are:

(1) No issues require immediate regulatory action.

(2) Previous AECB staff inspections, audits, appraisals and reports have identified the same issues and reached similar conclusions.

(3) While the utility's defence in depth at nuclear power stations has been reduced, it has not been reduced to the point that safety limits are compromised. Based on safety considerations, continued operation of the reactors is acceptable in the short term. Significant improvement is necessary in Ontario Hydro Nuclear's operation to improve safety margins and prevent further deterioration in performance.

Ontario Hydro has submitted a plan to the AECB with schedules whose implementation is intended to achieve the needed improvements to Ontario Hydro's nuclear operations. They have also submitted a proposed set of performance indicators which can be measured to determine whether adequate performance is being achieved. These documents are now under review. The intention is to develop a document with specified schedules, milestones and performance criteria in a form that could be referenced as a condition of all Ontario Hydro operating licences. Ontario Hydro must also receive approval from AECB for its layup plans for the Pickering and Bruce units and for restart of those units.

In 1993, when Ontario Hydro was introducing their business improvement process, they stated it was intended to assist it to face the "formidable challenge of improving unsatisfactory performance of our nuclear generating stations and supporting divisions." Those same, if not greater, challenges are facing Ontario Hydro in 1997. The AECB continues to hold the board of Ontario Hydro responsible for the quality of operation at its stations. The AECB expects results and expects results soon.

If Ontario Hydro cannot achieve improvements in its performance in safety issues, it will only be a matter of time before safety margins will be compromised and forced closures will occur.

The Chair: Are there any other members of the team from AECB who are making other comments or are they here to answer questions?

Dr Bishop: They are here to help answer your questions.

The Chair: We'll begin the questioning in rotation by caucus. I'll being today with the third party.

Mr Laughren: Thank you, Mr Chair. I'm glad you're there.

The Chair: I always look after your interests as best I can.

Mr Laughren: I appreciated very much your comments and the directness with which you presented them without any inflammatory rhetoric surrounding them. Nevertheless they were pretty direct and very blunt.

One of the most chilling comments you made, I thought, was when you indicated that Hydro had always been able to put forward plans for if not recovery, improvement, but had trouble translating that into performance. I'm wondering, since they've already told you what they intend to do with the seven reactors that are being laid up -- which I find a strange term, but maybe that's the industry's term -- are you comfortable that now they will be able to translate plan into performance?

Dr Bishop: Our position is that time will tell. We are in the middle of reviewing that total recovery plan. It has not yet been completely reviewed. I believe Jim only received it a couple of weeks ago. First of all, we will look and see whether it looks feasible to us, but we can only wait and see whether they are going to, this time, be able to translate it through. I would not make any predictions on what will or will not be occurring.


Mr Laughren: The work that's required, I assume you approve of the laying up of the seven reactors. I'm assuming that, and if I'm wrong I'm sure you'll correct me. I'm wondering, is there an easy way of describing the problems there, to what extent they're physical and equipment-related versus management- and employee-related, if that's the right term?

Dr Bishop: At the two stations they are laying up?

Mr Laughren: The seven reactors, yes.

Dr Bishop: For Pickering and Bruce?

Mr Laughren: Correct.

Dr Bishop: Okay. I think one could say that (1) management problems are present at both stations, and (2) that there are indeed equipment problems at those stations and that there is a fair amount of improvement that has to occur in both those areas.

But I would like to re-emphasize that Ontario Hydro is not laying up those two plants because of safety or because of any particular problems there as much as they are saying to us, at least, that they do not have the resources to keep all units going and still be able to put into effect the processes of improvement they feel are required. It is not the board's responsibility to say, "Yes, you may lay up this station," or "No, you may not." What is our responsibility is to see that their plans for layup are appropriate and will be safe. But the decision to lay up a plant is strictly that of a licensee. The safety of how they do it is the board's responsibility.

Mr Laughren: I appreciate that. I know you have to be careful in how much information you've already got and how far down the road you are to examining their proposals -- I'm cognisant of that -- but do you have any preliminary thoughts about Hydro's ability to fix up those seven reactors, if that's the right language, in terms of management and equipment, and at the same time, with all the resources that's going to take, continue to run the other remaining 12 reactors? Do you have any initial concerns?

Dr Bishop: The only comment I would make is that it would be highly unlikely that Ontario Hydro could do the improvements it needs at all of its stations without significant increase in resources, but I would not go further than that because it's not within our mandate.

Mr Laughren: By "resources" you mean people?

Dr Bishop: Resources are certainly people, but there are also other forms of resources.

Mr Laughren: I see. Could I ask you very specifically about this year: When IIPA did their interim report, did that report go to the AECB?

Dr Bishop: The interim report?

Mr Laughren: Yes. The date that I recall seeing is April 17.

Dr Bishop: I think we have the actual timing that we received the report. I would say to you that we were informed of the overall possibility of what it was going to be in the month of April. Jim, you might have some specific dates.

Mr Jim Harvie: We did not formally receive the interim report. We met with Ontario Hydro on April 4 at Pickering. I attended that meeting and we were informed of the findings to that date and we received the minutes of that meeting on April 15. So although we did not receive the interim report, we were informed of its contents at that time.

Mr Laughren: Okay. Can I ask you then -- it's my next question -- when the final report, known affectionately as the Andognini report, came down in August and was made public, were you surprised at the change in performance ratings of the nuclear division? If you recall, it went to minimally acceptable.

Dr Bishop: Right. I would say at this point in time that there were no changes in performance rating over the discussions that were held with us in April. Are you now talking about the end of April?

Mr Laughren: I'm talking about that interim --

Dr Bishop: Oh, in August.

Mr Laughren: Yes, in August, the change in performance rating.

Dr Bishop: I think we were not surprised at the overall tone of the report for two reasons: One, we already knew there were difficulties in the operations of Ontario Hydro. We would have been very surprised if they had come back with things being rosy. Two, they had been doing discussions with us, as Jim indicated, in April about the overall tone that we expected to come forward. Is that fair, Jim, on that?

Mr Harvie: Yes. I think the information we received in April was not inconsistent with the information that we released in August. We were aware of that kind of problem.

Mr Laughren: Yes. The ratings were worse in August. Could I ask you -- let's see how direct you're willing to be here.

Dr Bishop: I know you're willing to be very direct.

Mr Laughren: When Mr Andognini made a presentation to the AECB in the form of a letter which indicated that he was applying for a five-year licence and hinted that in other jurisdictions they have 10-year licence approvals, and then after that announced that there was -- I don't think I'm using exaggerated language -- a crisis in the nuclear division, were you taken by surprise by that strange turn of events?

Dr Bishop: No, from the point of view that we knew there were difficulties in the operation of Ontario Hydro. When you are looking at licence requests, any licensee has the right to ask whatever they may wish. It doesn't mean they shall receive, but they have the ability to ask.

Mr Laughren: But to be fair, you said several times in your presentations that the responsibility for safety is in the hands of the licensee --

Dr Bishop: Yes.

Mr Laughren: -- in this case Ontario Hydro, and the responsibility at that point should have been Mr Andognini's, it seems to me, not throwing the entire responsibility to you. If you had gone ahead and approved a five-year licence, which theoretically you could have done, then it would seem to me that Mr Andognini would have been, and I use the word thoughtfully, irresponsible to have asked for a five-year licence, knowing full well that the nuclear division was not in a position and should not have been asking for a five-year licence.

Dr Bishop: Why he specifically asked for a five-year licence, I'm assuming that should be addressed to Mr Andognini.

Mr Laughren: It may occur to us to ask him that.

Dr Bishop: We were not surprised that he would look at a five-year licence, coming from the US, where the licensing stage is longer.

Mr Laughren: Missouri, specifically.

Dr Bishop: Missouri? No comment.

The Chair: Thank you, Mr Laughren. We're going to go over now to the government caucus.

Mrs Barbara Fisher (Bruce): Good afternoon. I received this just now, so I've done a quick review of the preliminary findings of the recommendations of the IIPA by the AECB staffing. Before I get on to that, I'd like to ask just a few questions that are pretty direct.

One, it is my understanding that the licensing requirements are such that if AECB have some concern with regard to the number of trained, qualified staff as far as detail within the different trades, if those are at risk because not enough numbers are there, or if there is not sufficient staffing, that could put a licence at risk.

Dr Bishop: We have areas where we look at the numbers of staffing and the qualification of staffing, yes.

Mrs Fisher: Okay. My concern --

Dr Bishop: In certain areas.

Mrs Fisher: Right. My first question is, at what time or at what stage in the game or how long back historically did the AECB start raising a flag that the number of qualified staff requirements weren't going to be met if something wasn't improved?

Dr Bishop: There are two issues here. One is qualified staff who run a station, and two, the number of staff who are going to be required to make the improvements. Those are two different questions, I think. For instance, when we look at the recovery plan, we will be looking at the numbers of staff these are going to be requiring.


Mrs Fisher: I recall being present at an AECB licensing hearing on a Bruce project, and I'm sure it's happened at others as well, where there was some ringing of a bell, if you will, that indicated that if they weren't more serious about looking at qualified staffing numbers, not the second part of what you just explained but numbers, qualified staffing numbers, serious consideration would have to be given to the license. Am I right?

Dr Bishop: That's absolutely correct.

Mrs Fisher: Could you tell me when that first happened?

Dr Bishop: I believe, and I can check the dates in this book, that was in 1993, Jim, and you can look it up in here, that we were concerned when the downsizing was occurring in Ontario Hydro that commitments to the increase of personnel they had made to us were not going to be fulfilled. So at least since 1993, and I can look and see whether it went before there. I'll just add one other thing. We have required Ontario Hydro now for several years, whatever that date was, whether it was 1992 or 1993, to report to us every six months on the numbers of staff they have at their stations.

Mrs Fisher: In reviewing that on those reports, did you continue to find that in fact the situation was worsening, not getting better, given your guidance that they ought to be paying attention to this?

Mrs Bishop: There were problems. It varied from station to station. There were difficulties in some of the training programs, as an example, when you're looking at qualified people. They were not present in other stations. Our concerns about training were relayed to them. Any time we were concerned about certain areas of numbers of staffing we would also let them know about the specific areas that might be a problem to us. Jim may have more detailed answers, and I can look up when that first was.

Mr Harvie: We have a training program evaluation section which evaluates the training programs of Ontario Hydro staff, and as you know, we set examinations for the operators and shift supervisors in the control room. As Dr Bishop said, Ontario Hydro has been required to report to the board itself every six months for the last several years on its staffing levels.

Mrs Fisher: I can remember and I think you verified that there were some flags going up starting in 1992 forward saying, "You're going to be in trouble here with regard to qualified staffing if you don't do something about them." Am I right?

Dr Bishop: Yes, you're right.

Mrs Fisher: Did Hydro react in its management decision-making capacity to change that by increasing and by training up to the levels of qualified nuclear trained workers upon your recommendations?

Dr Bishop: There was an increased number of staff, and we can doublecheck those dates, of 1,100 since 1989, I believe, up to that time of 1992-93.

Mrs Fisher: And then it went backwards?

Dr Bishop: It did not go backwards because the AECB would not allow it to go backwards, and in fact we put in a condition that they could not decrease staff without the AECB approval.

Mrs Fisher: If that's the case and they were meeting the requirements at that time, why then does this IIPA proposal suggest that the reason the nuclear systems that are being talked about right now must be laid up or shut down -- take your pick; right now I don't know the real definition or difference there. But they're saying, I'm reading from it, that staffing and human resource issues are the biggest problem. Do you agree with this?

Dr Bishop: I think that if they are to put in programs that are going to bring about recovery within a reasonable period of time, and we know it will take some years, there is little doubt that they are probably going to have to require increased resources. I'm not prepared to say how many or how much.

Mrs Fisher: That's fair. On that note, I have a question with regard to where those resources might come from. There are comments flying around with regard to where these workers come from. My first question would be, is a nuclear worker in an American or a British or a French non-Candu system transferable with the skills required to work in a Candu system?

Dr Bishop: A worker?

Mrs Fisher: Yes.

Dr Bishop: With appropriate training, yes.

Mrs Fisher: Do you have any idea how much training, in time, that would --

Dr Bishop: You'd have to ask the question a little more specifically because there are operating room personnel, maintenance personnel, many different types of expertise.

Mrs Fisher: You are saying, however, that there are some transferable skills there that might benefit Ontario Hydro to have as, opposed to starting somebody brand-new?

Dr Bishop: Yes, absolutely.

Mrs Fisher: How long should the plants be expected to operate?

Dr Bishop: The plants were of course built to last approximately 35 or 40 years, and how long a plant will last will frequently depend on well it's been maintained. How much longer these plants will last will depend on two things: how well they are maintained and operated, and preventive maintenance occurring, and that against their original lifetime.

Mrs Fisher: There's significant discussion about the differences between, number one, laying up Pickering A or Bruce A and which one comes up first or last. Specifically to your considerations with Bruce A, if it's put into a dry layup as opposed to a wet layup, could you give us some idea of what that would do in terms of the potential for its restart?

Dr Bishop: By the board's definition, and we believe it's the same definition Ontario Hydro is using, a layup of a plant is anything where it does not prevent the plant from restarting. Whether you take the fuel out or leave the fuel in, it can be restarted again. The important difference is the degree of monitoring that has to occur. Much more monitoring has to occur in the plants that have the fuel left in than if the plant is defueled. That's the major difference, but they can both be restarted.

Mrs Fisher: Then there's no further deterioration because it's put in a dry layup state. Really what you're doing is freeing up human resources.

Dr Bishop: You have to make sure it is laid up in such a way that there is no further deterioration as well, or when you're restarting, that the plant is in a condition where it is safe to restart it. When I say we have to approve the layup plans, we will be looking at those details depending upon whether fuel is in or fuel is out within their plans.

Mr Monte Kwinter (Wilson Heights): Dr Bishop, thank you very much for your very frank presentation. To me it was incredible listening to the history of the regulatory sort of difficulties you've had with Ontario Hydro Nuclear over the years. Just to put things in context, can you tell me, what is the longest license you grant?

Dr Bishop: Two years.

Mr Kwinter: And what is the shortest?

Dr Bishop: The shortest we have ever given is six months.

Mr Kwinter: So we have a situation where Ontario Hydro, certainly at Pickering, has been at the very bottom level before it gets shut down. Would that be a fair analysis?

Dr Bishop: Yes, and Bruce A was also given a six-month licence, I believe in 1992.

Mr Kwinter: The concern I have, and it was sort of evident from your presentation -- Mr Andognini's report in the executive summary in the very first paragraph says, "The sense of urgency to move quickly towards substantial and sustained improvement and performance is not evident throughout the organization."

I was stunned to hear a commitment by Ontario Hydro Nuclear that by 1995 they would be in the good to excellent category. We now have a situation where not only are they not in the good or excellent category, they are verging on being shut down. Yesterday when the chairman, Mr Farlinger, was here, he had the same laissez-faire attitude. We talked to him about the interim report of April 17, and he said: "You know, I don't know what the big deal is about this report. We get these reports all the time, we look at these all the time and they say we're doing a terrible job, but you know, so what's new?" kind of thing.


Mrs Helen Johns (Huron): I don't think he said that.

Mr Kwinter: That's exactly what he said. He sat here and he said, "I don't know why you're making such a big deal about this interim report."

The Chair: We can pass by the crossfire here.

Mr Kwinter: He said, "We get these reports all the time, and there's nothing unusual about that." Everybody knows the problem. We know the problem. But what we have is nobody doing anything about it, and in fact what is happening is that the situation is deteriorating.

My concern is that you, as the regulator -- and I appreciate that your responsibilities are for safety and environmental concerns, and that you can identify the problem but it's up to the licensee to correct the problem. I have some very serious concerns about -- I don't want to be alarmist -- the fact that these things are allowed to continue on from year to year.

I'll give you an example. In the material you just sent to me -- and I have to apologize because I just saw it as I sat down -- I noticed a letter to Bob Franklin, the president of Ontario Hydro, on November 14, 1989, which is eight years ago. It talks about the renewal of the operating licence for the Bruce A station for one year rather than the usual two-year term: "This action was taken because we considered that the overall standard of operation and maintenance was only marginally satisfactory."

That was seven years ago when they were told, "You're not going to get your usual two-year licence; you're going to get a one-year licence," and I assume they gave you commitments that by 1995 all these things would be done, and they haven't been done. Not only that, in your presentation you say that even when they do present plans to correct the situation, they have been unable to transfer those plans into results. Is that a fair summary of what you said?

Dr Bishop: That's correct.

Mr Kwinter: The reason why I have concern, and I have two distinct areas, is that one of the mandates of this select committee is that later on we're going to evaluate the recovery plan that is being put forward by Ontario Hydro. Here is an agency, if you want to call it that, a corporation, that has consistently shown that regardless of what they say they're going to do, they don't do it. Not only do they not do it, but they seem to be unable to do it. They probably have the best of intentions.

So there's the whole issue of credibility. How can you take anything they say with any semblance of acceptability when their record has been so abysmal? When I say abysmal, I listened to what happened and I saw your response. I guess it was Mr Harvie who responded, and the date of this is the 23rd of the ninth month, August. When you take a look at it and you see all the shortcomings, and by their own evaluation they are in the minimally acceptable -- and as I said yesterday, it says that nuclear safety margins may be compromised when you're at that level.

My concern is, do you, as a regulator, have a greater responsibility than to just say, "Well, you're not meeting your requirements, but keep at it and we're going to give you a six-month licence and we're going to look at it again"?

Dr Bishop: There are two issues here. We look and demand that the operations are at the level where the margin of safety is still acceptable. When the margins of safety are still acceptable, the facility can be licensed under various conditions. We do not like to have licensees continue at a minimally acceptable level, still under the safety margins, year after year after year, not because safety is compromised for the six months we give the licence, or for the one year or for the two years we give the licence, but it's also indicative of, if you would like, safety culture attitudes at the facility. We have very high safety margins -- very broad, very conservative. We would never allow a plant to operate when those safety margins are being threatened. Long before you are at that level, we would shut the reactor down.

AECB can keep saying, "You need to do better," because we get concerned about issues that today are long-term issues but we know they're going to become short-term issues down the road, but it is not our job to protect Ontario Hydro's assets. But we will never allow the safety margin to reach the point where we cannot say that they can be operated safely.

Mr Kwinter: A report was done by legislative research in 1991 and revised in 1997 looking at the Chernobyl and Three Mile Island nuclear disasters, if you want to call them that, and one of the interesting observations that was made was that there was an "It can't happen here" attitude where: "Everything is okay. Don't worry about it. Everything is under control."

There was a chain of events that created these problems. I understand that the technology is different -- it's not CANDU technology and it's got a different system -- but in both cases the findings were that the problems were a result of poor maintenance, poor training and a general attitude that, "It can't happen here because we've got the situation under control."

My concern is that we have a facility, and I think if you did a public poll -- and this has nothing to do with whether you're a nuclear physicist or an engineer at a nuclear plant -- I would think that top of mind, if you asked somebody what would be the greatest disaster, they would say an atomic bomb, a nuclear meltdown, something of that kind. There's got to be a lot of public trust, and one of the things that has been shadowing nuclear energy is the concern people have about the potential of a problem.

To give you an example, in one of the comments in Mr Harvie's report, it talked about this foreign material exclusion. They found that some piping had rags or paper stuffed into it to prevent foreign material entering during maintenance while other pipes were left open. When you read the Chernobyl report and the Three Mile Island report, these were the kinds of things that led to the escalation of the problem and the whole sequence of events that finally had the problem.

It would seem to me that if you lived in Ontario -- if you take a look at what happened in Chernobyl, the effect was certainly beyond the Ukraine; it went into Germany, it went into Sweden, it went everywhere -- it would seem to me that the people of northeastern North America would expect that not only would it be absolutely safe but it would be absolutely foolproof, that every single thing would be done. To find that not only is it not done but that this facility is operating at virtually the minimally acceptable level, and the difference between minimally acceptable and unacceptable has got to be fairly short -- I know you may say you've got safety --

The Chair: Can we get a question? We're short of time.

Mr Kwinter: -- factors built into it, whatever, but could you comment on that.

Dr Bishop: First of all, there is not a very thin line between the margin of safety between acceptable and unacceptable. We never allow the margin of safety to get down to, as you were saying, a very thin line. Always the margin of safety under which we allow stations to operate is still very conservative.

You still can be operating in parts of the station at minimally acceptable levels, and because our standards from a regulatory point of view are so high, you still have an acceptable safety, but the operations in certain areas may be minimally acceptable.


Remember, you also have to recognize the definitions of "minimally acceptable" that were used in the IIPA report. When you look at their minimally acceptable, they're saying they are substantially below industry standards but produce minimally acceptable results. In other words, the results are still being met, but for safety margins we have a very conservative margin. At the level that we would cut off, it's still wide. It's still very conservative.

The Chair: Thank you very much.

Mr Kwinter: May I just have one second?

The Chair: Mr Kwinter, you're way over, and I've indulged you already by almost four minutes, so I have to give that balance to other members now. I'll pick it up as we go around. I'll indulge myself for just a moment before Mr Laughren takes off.

Dr Bishop, just some clarification, please, of your evidence so far. In response to a question that was raised a little earlier, did you agree that about 1,100 new staff were added to Ontario Hydro prior to 1992, and that those numbers have not declined since that point?

Dr Bishop: That's correct.

The Chair: In terms of the safety standards that AECB employs, could you give some indication to the committee of where those standards would fit in terms of a world context? I think specifically of France and Great Britain and the USA. Could you please very quickly give us that?

Dr Bishop: I think that they meet or exceed those same standards. Most of us in the western world do meet international standards. That's the minimum --

The Chair: So your response is that the AECB standards are at least as high or higher than standards anywhere else in the world?

Dr Bishop: Yes.

The Chair: By any measurement.

Dr Bishop: Well, I think that when you look at standards, there are international standards that are developed, and any good regulator is meeting or exceeding the international standards.

The Chair: In term of the length of licensing, is there any instance where the AECB has given any period of renewal less than six months?

Dr Bishop: No. I don't believe there has ever been one less than six months, but we can extend for a short period of time.

Mr Harvie: The only thing we've done less than six months is on occasion we have ordered reactors shut down. That's essentially --

The Chair: That would certainly be shorter than six months. All right. I have some other questions but I'll come back to them a little later on. Let me start the rotation again: Mr Laughren, and I will pick up in each caucus the time I allowed to go to Mr Kwinter.

Mr Laughren: Could I just pick up on the question the Chair asked, because there were some looks of puzzlement around the table about the numbers of employees. Could you reinforce that?

Dr Bishop: If I can, in 1989 there was an increase of about 1,100 staff, between then and 1992. In 1994 -- this was when a cost reduction was occurring throughout Ontario Hydro, and the board at that time was very concerned that the number of staff would be decreased at the stations because of their overall cost recovery. We did not get a full assurance at that time that the commitments in terms of staffing and other things that had been made to the board would continue to be met, and particularly in staffing we then said that any reductions in staff would have to require our approval.

Now, there were changes in staffing that have occurred in between and have varied in station, and there may even have been over the last -- I'd have to go back and look at the total numbers of staff increased. I can tell you there has been no decrease since that time. Staff have changed in terms of their numbers from station to station, but I would have to look at the staffing figures to see how much of an increase there has been since 1994.

Mr Laughren: The reason I'm pursuing it a bit is because there were these buyout packages and a sense that because of the nuclear --

Dr Bishop: What we did at that time because we were so concerned about its effect on staffing was we also obtained assurances from Ontario Hydro, and they went on to fulfil those commitments, that some of the layoff packages would not apply to some of the very specific nuclear employees. That was of great importance to us.

Secondly, our other concern at that time was to make sure that people would not be transferred from other parts of Ontario Hydro into the nuclear area unless they were qualified for the job they came in to fulfil, so that we were satisfied that if there was an employee who was taking a retirement, they were being replaced by qualified workers.

Mr Laughren: Okay, but when you talk about the numbers, maybe I missed something here. You were talking about Hydro overall, or the nuclear division?

Dr Bishop: We did both. We looked at -- no, we didn't at Ontario Hydro overall; we looked at Ontario Hydro Nuclear --

Mr Laughren: Okay. I think that explains my puzzlement anyway.

Dr Bishop: -- and then at each station.

Mr Laughren: Okay. And it was in the nuclear division that there was not a decline in the number of employees?

Dr Bishop: That's correct.

Mr Laughren: Okay. I feel better about that.

Dr Bishop: No, we're not concerned with the rest of Ontario Hydro.

Mr Laughren: No, I appreciate that. Do you know if, when the IIPA, affectionately known as the Andognini report, was being done, they had access to any information that AECB would not have had?

Dr Bishop: I hope not, from the point of view of anything that is important to safety.

Mr Laughren: The reason I ask that question is that the IIPA -- they decided that problems were severe enough to warrant the layup of seven reactors. Right?

Dr Bishop: The recovery required resources such that they would have to, the costs of recovery.

Mr Laughren: All right. That's a better way of putting it. Yes, you're quite right. So there was nothing you're aware of that they would have had that would have led them to any different kinds of conclusions than you would have come to?

Dr Bishop: From a safety point of view, no. That is correct.

Mr Laughren: From a safety point of view, right, and I appreciate that the financial thing isn't in your bailiwick.

To what extent is the AECB dependent on Hydro for its information, for disclosure? Because I know you have people in all the plants, or at least I think you do --

Dr Bishop: Yes.

Mr Laughren: -- but I don't know what kind of access they have and how that feeds back to you versus you simply going to Hydro and saying, "This is what we need."

Dr Bishop: Well, the system works in several ways. First of all, we do have people on site and there are ongoing inspections occurring all the time. In addition, we frequently do special inspections where staff from head office in Ottawa also go to the stations. But finally, it also has to be recognized that we also require the licensee to report certain issues to us when they are issues that affect safety. It is a requirement that they do so. If they did not report something to us, for example, that was obviously of importance in safety, this would be a non-compliance in some of the areas. They must report certain things to us.

Mr Laughren: Does that include leaks into Lake Ontario, for example?

Dr Bishop: The which in Lake Ontario?

Mr Laughren: The leak of -- what was it? Tritium and --

Dr Bishop: We are informed of most tritium leaks that occur. Jim, is there a cutoff level at which we are not informed, where the level's so small that we're not informed?

Mr Harvie: There is a level at which they are legally obliged to inform us, and in practice they inform us of releases quite a bit below that level.


Mr Laughren: If there is something wrong in terms of safety either in the plant or in the community, whose obligation is it to make that public?

Dr Bishop: If there is something that is not safe?

Mr Laughren: Correct. Whether it's a tritium leak above certain levels or --

Dr Bishop: Oh, now that's different. Who is responsible? A tritium leak may still be safe. There are two questions that I think I'm hearing you ask.

Mr Laughren: Say that again. A tritium leak --

Dr Bishop: A tritium leak may still be within a safe limit.

Mr Laughren: Right. I'm assuming it's, as you said, above an acceptable level.

Dr Bishop: Yes, okay. Whose responsibility is it to inform the community? The licensee, when they know, should inform usually the liaison committees that are within the community. The community officials are usually informed by the licensee first. AECB will certainly give its news releases just as soon as it's aware. I think it rests with both.

Mr Laughren: So you would do that anyway?

Dr Bishop: When the information is known.

Mr Laughren: Are there any problems internally, the way Ontario Hydro is structured, that cause anguish at AECB when it comes to seeking information?

Dr Bishop: In the way in which it is structured? No, I don't think its structure gives us anguish.

Mr Laughren: What does?

Dr Bishop: Pardon me?

Mr Laughren: You're not going to get away with that answer. What does?

Dr Bishop: I think "no" is the answer to your question; I don't think there's any structural problem. Jim, would you agree with that?

Mr Laughren: Are there any other problems?

Dr Bishop: I think we have discussed some of them in my report in terms of it is a problem, it is a frustrating thing to see a utility, regardless of how many plans are put in, regardless of what efforts are there, if they are not able to show sustained improvement. So I think there are those issues.

Mr Laughren: Maybe this is an unfair question, but do you have any authority or is there anything in your mandate that allows you to say to Hydro, "Look, for heaven's sake, we're tired" -- and these are my words, not yours -- "of you having great plans but being unable to implement them, and we're going to insist that there be a new system of accountability here. It's to us that you're accountable, and this is how we want you to do it"?

Dr Bishop: As a matter of fact, that has been stated to Ontario Hydro, that it's not promises that we regulate on, it is results, and it is results that we need to see.

Mr Laughren: Are you able to share with us what you think needs to be done at Hydro in order to make sure that plans are implemented?

Dr Bishop: It is not AECB's mandate to say how it should be managed, so I would not want to get into a discussion of that. But I will repeat that the AECB does require results from whatever organization they go into.

Mrs Johns: Thank you, Dr Bishop. I spent part of the day today going through the annual reports of the Atomic Energy Control Board. I went back as far as 1983 for a report and was quite surprised to see that every year in each of your reports you have a discussion about the nuclear reactor segment, the nuclear facilities, and it starts pretty early that the reports start to talk about labour problems and continual problems and safety issues that come about. I just want to say that in the 1989 report, one of the things you say is that problems continue to persist in the training of operations staff and that the AECB is expanding the scope of its activities related to training of operating staff. So for a long period of time there have been training issues that the AECB has recognized.

There are a couple of questions I want to explore with respect to that. The AECB has inspectors at the facility, and Mr Laughren had started to talk about this. They have a responsibility to let Hydro, I guess, know that they're not up to a standard that's acceptable. I'm interested if you have a responsibility to the residents or the taxpayers or the people who live around these areas to let them know that they're not meeting specific objectives also. Is your role such that you have an ability to let us know, for example, when my family with two little boys lives close to a plant, that there's a tritium leak? How do I find that out as a resident of Ontario if the Atomic Energy Control Board doesn't tell me?

Dr Bishop: I think Ontario Hydro should certainly be informing the community, it's my understanding -- and, Jim, correct me -- through the appropriate bodies within the community that there has been, say, a tritium leak. Not all leaks are anything of major concern. When leaks are of a major concern, there are two things that happen: Ontario Hydro also should be informing the department of health immediately, and we would be informed as well. The community absolutely should be informed, but through the appropriate community officials.

Mrs Johns: Just so I don't run out of time, I want to ask you this question first and then I'll come back to that line. Mr Kwinter started to talk about a credibility issue. He talked, and you talked, about Hydro being unable in the past -- they'd say they'd correct something, and then they were unable to meet that. I see that through all the reports. They say they'll do something, and you come back a few years later and say: "Hey, you haven't done that. What's the problem?"

Dr Bishop: Yes.

Mrs Johns: Does the Atomic Energy Control Board have a comfort level with Carl Andognini and his team that they will do what they say they're going to do?

Dr Bishop: Once again, we are not going to make any prejudgements on whether they're going to succeed this time. We are going to be looking for results. Whether Mr Andognini and his team are going to be able to make the results to improve the overall issue, I don't know yet, nor will I make any comments about whether I think they can or whether I think they have a problem.

What I have said is that this is a horrendous challenge; this is a major job. If I said to you that Mr Andognini and his team have never undertaken any job as large as this, that would be so. But there would be very few people who had ever undertaken a job this large within a nuclear facility. These are huge facilities we're talking about. There is no reason for me to think that Mr Andognini in the past has not shown in any way a professional capability. That is not what I'm saying. But we're waiting and seeing. We are certainly not going to be making any statements as to whether we think they're going to be successful or not.

Mrs Johns: Would there be any other nuclear expert who would give you more comfort than Mr Andognini?

Dr Bishop: It is not a case of Mr Andognini. I want to make this quite clear. I'm not making judgements on Mr Andognini at all. I'm absolutely not doing that. What I am saying is that we have seen plans many times before; we've seen failure many times before. We are not at all into the job of making predictions as to whether they are going to succeed. We are saying we are going to need that success. You will also notice that we are saying we hope we will be able to develop a document that has time lines and other aspects within it that we can indeed put into a licensing condition, to have some of those milestones met.


Mrs Johns: I know you've said that the standards you judge nuclear plants on are as good or better than anybody else's in the world. Are they the same standards as were used in the IIPA report?

Dr Bishop: There are differences, and I think this is very important. We do not take into consideration cost competitiveness. On the issues involving safety and environment we would certainly use very similar ones, but cost competitiveness is not one of them. They are different from that point of view.

Mrs Johns: I'm not sure exactly how this is happening, but I know the federal government is doing a review of the Atomic Energy Board and may be increasing their powers or looking at the powers. Maybe you can enlighten me on exactly what's happening there. Is that to give you a more far-reaching role, to be able to be more active in letting communities know what's going on, to allow you to have more of an ability to inform the public?

Dr Bishop: I'm sorry, I'd missed the first part of your --

Mrs Johns: I understand that the federal legislators may be changing the rules by which you are governed. Can you tell me why that's happening?

Dr Bishop: The act we are now under, the Atomic Energy Control Act, is a 50-year-old act. Although it was broad and allows us the authority to regulate to the extent that we need to for safe operation, it needed very much to be updated. The new act we hope will be in effect by the fall of 1998. It gives us better legislation backup for some of the things we are doing. It also improves some other things that we could not do right now. For instance, if we were to prosecute, today we can't have a fine of more than $5,000. Well, that's a pretty meaningless situation to Ontario Hydro. It will be going up to about $1 million.

We are going to have better-defined powers and authority -- better defined. It doesn't mean we don't have the authority to do what we need to do today.

Mrs Johns: Can you give me any reason why you believe the previous boards of directors, from 1983 on, haven't been able to satisfy your queries? Is there some specific issue that has stopped them from being able to meet the changes you've recommended or the training or any of those issues? Do you think there's one or a number of issues?

Dr Bishop: A number of issues has led to this, and it's not simply the Canadian plants either. One of the things you have to remember is that when this industry was young, when there were new plants being built, these were pioneers, and the work was mainly directed towards design and safety analysis from the equipment and design point of view. Then, as a plant begins to age, it switches over into the operational and the maintenance phase. That requires a whole other type of approach. I don't think there's any one factor at all. Exactly like many other industries that were new, with new technology, this is basically what happened in the nuclear industry in many areas.

Mr Conway: Well, Dr Bishop -- you are Dr Bishop. You're a medical doctor, as I understand it?

Dr Bishop: Yes, I am.

Mr Conway: I have been very impressed by your testimony. I say that because about 18 years ago I sat in this room and rooms around here through several months, actually several years, of legislative inquiry into Ontario's nuclear commitment. I still remember the colour and quality, which was very good, of AECB presentations: John Jenkins, but most especially Ziggy Domaratzki. But Domaratzki at his best was never as direct, as blunt and as forthright as you have been here today, and I really thank you for that. Like other committee members, I've been going through this absolute gold mine of paper that you have placed before the committee, and I regret that we just didn't have much time to go through it before we met today.

Let me begin my questions with some very specific points. I want to go back to the sequence of events from, let's say, 1993 through to 1997, but it could just as easily be, thanks to the material you've provided us today, from 1986 through to 1997. It's very clear from reading AEC documentation, particularly from 1993 onwards to 1997, to the publication of the so-called Andognini report that the federal regulator is getting increasingly frustrated with the failure of Ontario Hydro Nuclear to do what it has promised to do around safety, the management changes, operational standards etc.

With that as background, now I focus in very sharply on the period between, let us say, December 1996 and August 1997. As you've indicated, there was really nothing qualitatively new in the Andognini report, relative to what AECB had been saying, save and except some of the economic issues that would concern the utility.

I want to know two things. In 1996, when the federal regulator, under your leadership, took the almost unprecedented measure to restrict the license renewal for Pickering GS to six months, which is what you did for the reasons you've given, my first question is, how close did you come, as a federal regulator, to shutting Pickering down because of the long-standing problems to which you've made much reference this afternoon?

Dr Bishop: You have a choice between six months or shutdown. I'm not going to go through how close that is, but I will say to you --

Mr Conway: My question is specific: How close did the AECB come in the fall of 1996 to simply shutting Pickering down because of the problems that had been long-standing and substantially unresolved?

Dr Bishop: Let me answer that by saying that if there had been no improvements seen between August 1995 and December 31, 1996, we wouldn't have hesitated to shut them down.

Mr Conway: Did you come close to doing that?

Dr Bishop: Yes. When you give a six-month license, you're coming very close to shutting a reactor down.

Mr Conway: All right. That's December 1996. You've impressed me as a no-nonsense regulator. You just create the impression of being a fairly businesslike person who means business. Having said that, you've just given some testimony around your mood in December 1996. Let's move forward three or four months. It's now April 1997.

These people -- Mr Laughren and I were just going through this. There's so much incredible material in this binder. One of the several that I like is the one from November 1991 where Elgin Horton, top dog in the nuclear division, together with Marc Eliesen and the AEC -- there's a meeting. Horton is quoted in your documentation as admitting to being humiliated at their ongoing problems in 1991. Now we're at April 1997. You have come very close to shutting Pickering down in December 1996. It's April 1997, and on April 16, the now top dog at Ontario Nuclear, the three-hatted Carl Andognini -- he is at this point the vice-president and head of nuclear operations, he's the outside consultant brought in, and he's also in the process of the recovery plan.


But Carl Andognini as the executive vice-president and chief nuclear operator, on April 16, 1997, writes you, Mr Harvie, the director-general, right?

Mr Harvie: That's correct.

Mr Conway: Four months after the events of December 1996, this letter is written in response to your letter of April 11 relative to the renewal of the operating licence for the Pickering nuclear generating station. Quoting directly from the letter: "Ontario Hydro's corporate position is that the Pickering station units are safe for continued operation for the following reasons...." and he goes on at length to explain why they're safe.

Then he makes the point, quoting from the second-last paragraph of the letter: "Therefore, in keeping with Ontario Hydro Corporate management's mandate, involvement, action, and the continuing progress being observed at the Pickering stations, Ontario Hydro respectfully requests a five-year operating licence for the Pickering station."

My question to you is, how loud did you laugh? How loud was the laughter at the AECB for the chutzpah of this letter and this request, coming but weeks after the event that Dr Bishop so clearly described a few moments ago?

Mr Harvie: I'm not going to discuss laughter. I think we try to do our job in a professional fashion. I would acknowledge we did not spend very much time considering whether to recommend the five-year licence.

Mr Conway: Dr Bishop, as the chair of the Atomic Energy Control Board, did you then and do you now consider, in the light of the events that had been ongoing since 1986 through to 1997 what a lot of regular folks would consider, that this was at the very least, a remarkably brazen request for these people at Ontario Hydro Nuclear to make to you?

Dr Bishop: We do not look at things as brazen or non-brazen in our decision-making. We look objectively in terms of what is placed before us.

Mr Conway: Now you're being very diplomatic, and I appreciate that. But I'll tell you, given what you've just told us about the circumstances in December, boy -- well, you've answered the question.

Let me now come back to a more general question. You look at this material. Any reasonable person going through this material -- 1987, 1989, 1991, 1993, 1995, 1996, 1997 -- says to themselves, what is the problem? A certain William Farlinger CA had a press conference when he released the IIPA report a few weeks ago, and he said: "The real problem was that there's this cult running this place. That's a big part of the problem."

You're the watchdog, the people Ms Johns's constituents and mine have as our protector. It is not a very comforting thing to have the person running this operation tell the community that a big part of the problem is this cult.

What I want you to address in the next question is, looking at the period of 1986 to 1996, like the heavy drinker who is always going to take the pledge and does take the pledge and then falls off the wagon, these people at Ontario Hydro Nuclear kept falling off the wagon. They could never keep their promises. Why couldn't they? The chairman says it's a cult that's really one of the root causes. What would you tell the people of Ontario, from your considered opinion, is the problem at root cause here? Why couldn't these people over this period of time not keep their commitment to improve their operational performance and their safety standards?

Dr Bishop: First of all, I wouldn't use the word "cult" in terms of looking at this. I began to refer a little bit before, without making judgements and details about management, about moving from the design adjustment stages in terms of new plants, moving from the excitement of a new industry and a new plant into an operation and maintenance phase. That requires a different way of management, and I'm not quite sure that this occurred, that the movement into a maintenance and operation area occurred. I don't think it's unique to the nuclear industry; I think it happens in many industries.

We know there were many difficulties through several areas, whether it was from human errors, poor management, poor maintenance. I'm not going to be able to come up with any one or two or three major reasons they were unable to meet their commitments. I would say one thing: It appeared to us that they did not sometimes look at the plans they had in effect -- and their plans were acceptable -- and whether they were beginning to fail to look at the root causes of why they were failing before they went to a new plan. That was another thing that had occurred. But the majority of this is based on management difficulties and poor maintenance, as well as human factors.

The Chair: Just to pick up on one question, Mr Conway's question to you indicated that Mr Andognini, asking for the five-year renewal, referred specifically to "in light of continuing improvements." The question to you and/or to Mr Harvie is, was there in fact any evidence of continuing improvements for the months preceding that letter?

Dr Bishop: Yes, and that is why the board increased it to nine months in June. That's not a very big increase, but there were enough to be able to do that. That's important, because if there were not, we would not be looking at six months twice in a row.

The Chair: While there was perhaps some bemusement by the length of the request, there was indeed some evidence that seems to suggest there was some merit in action taking place at that point.

Dr Bishop: To increase it by three months, yes.

Mr Laughren: Dr Bishop, I made the mistake of starting to read this briefing book. Like they say, you can't put it down. I was noticing that back in October 1992 -- maybe this is not the first letter; I may have just picked it out, and maybe there are ones earlier than this. I don't know. Mr Lévesque was your predecessor, was he?

Dr Bishop: Yes.

Mr Laughren: In this letter he talks about the reduction in staff in the nuclear division. This letter is written to Mr Eliesen, who was the chair of Ontario Hydro at the time. He says he recognizes that "fiscal measures are necessary" but he wants a response back so that Mr Lévesque can report it in November. This was in October 1992. Then Mr McManus, who was secretary-general of the AECB -- does that person report to you?

Dr Bishop: Yes.

Mr Laughren: -- asked again for specific comments on quality improvement and adequate resources and wants yet further commitments to comply with that.

Then in December 1993, Mr Domaratzki asks for more specific comments -- I'm in section 15 of the briefing book at this point -- for even more, and says, "Senior management of Ontario Hydro made a commitment to our board to increase staff levels by 1,100 persons to deal with maintenance backlogs etc." That's back in 1993. That's by 1,100. Then in October 1994, Dr Bishop, you said, "You should be aware that the board staff is concerned that additional cuts in Hydro's staff could have a significant and undesirable impact on nuclear safety." So we've gone from 1992 to 1994 with the same issue of the number of staff in the nuclear division. Then it goes on and on right up until 1995 at least and perhaps beyond.


I couldn't help but wonder during all this time -- there are three years right there and maybe it's longer. I don't know that for sure from a quick look at this briefing book. At what point does the AECB say, "Look, this is intolerable; we're getting overall these bland assurances from Hydro"? But as you said in your opening comments, they're not delivering on those overall bland assurances, if I can put it that way. At what point can you get tough in your mandate?

Dr Bishop: As you will read in there, in 1994, because we were not getting commitments -- that will be on page 7, chapter 2.

At any rate, when we were not happy that we could count on the commitments being filled in terms of staffing, we then required Ontario Hydro to receive approval from AECB for any reductions in staff at the nuclear plants. In other words, we weren't getting the commitments we wanted to get and we therefore made it a requirement.

Mr Laughren: Did they ever hire the 1,100 extra staff that I think you had suggested or they had agreed to?

Dr Bishop: Yes, they did.

Mr Laughren: It was actually done?

Dr Bishop: Yes, they did.

Mr Laughren: Okay. Then those numbers were not impacted by their restructuring, if you will, in the early 1990s?

Dr Bishop: They were not impacted in the positions that we felt were absolutely essential to run. There were clerical issues and so on that employees may have been changed. We wanted to make sure that workers from other parts of Ontario Hydro who would have seniority and would normally be able to bump -- that the same ability to do that was not going to take place and that we were not going to be getting inappropriately trained and inexperienced people working in the nuclear plants, where it mattered. There are lots of jobs at the nuclear plants that can be transferred from fossil fuel plants to the nuclear plants.

Mr Laughren: The people who are employed by AECB and work in the nuclear plants -- how many of them are there, by the way, in each --

Dr Bishop: At each plant? Jim, I'll have to pass that over to you.

Mr Harvie: I believe there are nine professionals at Pickering, eight or nine at Bruce, between Bruce A and Bruce B, and five positions at Darlington as professionals, plus secretarial help.

Dr Bishop: And about 200 at Ottawa who back up their activity as well.

Mr Laughren: Right. On a regular basis they simply report directly to you. They don't have any --

Dr Bishop: No. They report to their directors and their directors to Jim.

Mr Laughren: Sorry. I meant that they report to AECB.

Dr Bishop: Yes.

Mr Laughren: Do they liaise at all with Ontario Hydro?

Dr Bishop: They must liaise with them in terms of many of their inspections and activity and working out issues, technical or otherwise. You must work with the licensee in terms of that.

Mr Laughren: As far as you know, is there a good relationship between AECB folks and Hydro Nuclear Division folks?

Dr Bishop: A good relationship?

Mr Laughren: Yes. Cooperative.

Dr Bishop: Jim, I'll let you answer that.

Mr Harvie: I think there is a good, professional respect between the Ontario Hydro people at the sites and our staff at sites. We do of course try to keep a certain arm's-length relationship with them, but I think there is perhaps a grudging respect.

Mr Laughren: Do you move them around so they don't get too friendly?

Dr Bishop: We have not. We are looking at the possibility of moving our employees who are at site around. We do not have any evidence of encapturement of those who are at site. The other thing you have to remember is that they are continually also being aided and increased by the head office staff, and decision-making in things like licensing and so on is not made by those inspectors.

Mr Laughren: Do you know or would you venture a guess to what extent the problems of the staffing levels in the nuclear division have been responsible for the low level of performance at those stations?

Dr Bishop: I wouldn't want to say that numbers were the major cause for performance.

Mr John O'Toole (Durham East): Thank you, Dr Bishop. Mr Conway complimented you earlier on the deftness of your answers, and I'm pleased to say you're a scientist, not a politician. That was very well demonstrated in your response.

On a lighter note, in your role at the AECB you obviously, I gather, monitor the plants in Quebec and New Brunswick as well. A simple starting question would be, is there a similar kind of concern or are there the same kinds of, if you will, cultural implications? Are there any comparisons? How do we rate with them?

Dr Bishop: We don't necessarily like to look at comparisons, because they're different.

Mr O'Toole: Right.

Dr Bishop: Have we seen some difficulties that are similar to those we have seen in Ontario Hydro? The same in-depth difficulties are not there yet, but yes, we have seen some evidence of similar problems having occurred. But it's very difficult to compare one plant to another or to compare a 21-unit with a one-unit --

Mr O'Toole: You use common standards, I gather, that both international and domestic are applied in those places and that's appropriate.

Dr Bishop: Yes.

Mr O'Toole: I want to dwell on the remarks you made in your introduction that suggested -- Ms Johns mentioned it as well -- that starting in the early 1980s there was some deterioration, and you mentioned that Bruce A in 1986 is where you first really documented it. The responses I've read, like some of the documentation included, suggested there was a decade, approximately, for Hydro to responsibly respond. I guess they set for themselves a time line of 1995-96 to actually address the structural, mechanical or human situation. Did they do that? I guess this has been asked several times. I have an ulterior motive, obviously.

Dr Bishop: If I understood your question, did they begin to try to address these problems in a short time after AECB pointed this out?

Mr O'Toole: Yes.

Dr Bishop: They acknowledged it. They put in a plan in 1989 called the quality improvement plan; that failed. By 1991 it was obvious that had failed. Again we pointed out our unhappiness with that. They would respond by acknowledging that and would create a new plan.

Mr O'Toole: Mr Conway made the analogy of the drinker who has trouble quitting. I guess this is really my question: There was a decade there of pretty well chronologically arrived-at commitment. Was there any action taken by AECB to finally stop making excuses or allowing this process to continually fragment?


Dr Bishop: Our mandate and our licence are through our licensing process. As long as we are meeting that safety margin, we can license. Yes, we can do a requirement, but we can't suddenly say, "You stop threatening your assets for four years down the road," except for those issues that are related to immediate safety. Does that explain --

Mr O'Toole: It does. You said there's a margin there and it's a pretty conservative margin. Objectively, scientifically you go in and quantify this thing and say, "Yes, it meets," or "It doesn't meet or exceed these standards." But in the overall context, everyone addressed it.

The citizens both in Durham, where I live, and elsewhere in Ontario need someone who is objectively removed, at arm's length -- you used that phrase -- to comment. I suspect that the new federal legislation may empower you to -- I'm somewhat disappointed that you can't. You've been very forthright today, perhaps more than your normal mandate, to err on the side of safety, I suppose. I'm not saying you don't, but I suspect that even if I look at Pickering -- the town council there is going to put on the referendum this year the whole issue of the nuclear problem. It's a very serious community concern.

All that is happening in a context of this forced reduction plan. I have your assurance that, at least it sounds like, none of the nuclear people were displaced or they were replaced by a competent person. When I read the IIPA report, I think some of it is the power of the union itself, the power workers saying, "These are the bumping rights." Is it the proper place to resolve those management issues? Is Hydro able to make the changes in the culture, if not in what Mr Farlinger called the cult -- I think it's more of a cultural issue. Is that the difficulty?

Dr Bishop: Changing the culture of any organization is difficult to do and it takes time, but that's only one of many things.

I would point out again, that, when we do licensing and information to the public all our meetings are public, all our documents are public, so these issues have been before the public and known to the public.

We can't force excellence on to a utility. That we cannot do.

Mr O'Toole: Just a final question, if I may: Moving that culture from a design-build kind of approach to an operate-maintain, has that happened? Have the particular processes and procedures changed to that significantly, in your opinion? I know those are operational. It's been mentioned a couple times here, moving from that mentality; has that happened?

Dr Bishop: There has been some switch in some areas with some groups, but there is still a need to go further.

Mr O'Toole: Would you characterize that as culture or cult or any of those kinds of words or are they just words, perhaps poorly chosen words? Is that really some of this human resource issue problem? Is that the switch in role, in duty?

Dr Bishop: If you're talking about safety culture within a plant, that's an attitude, in addition to other issues. We are very interested in licensees having the appropriate safety culture, because only if you have the important safety culture can you really drive some of the issues that need to have improvement.

Management can buy into things, but if that can't be transferred down to the main-line activity, then there are difficulties.

Mr O'Toole: Just as a last question, you mentioned in your remarks that there were some 400 safety-related items in the IIPA report. In a bulletin from your board, none of those 400 was anything you didn't know about. That's what I heard you say, no surprises.

Dr Bishop: There were none of the issues in a general sense that we did not know about. We might not have known a certain bolt was not on a certain thing, but we knew about the issue in terms of poor maintenance in that area.

Mr O'Toole: Did they have recovery plans? If you had as an ongoing audit function by AECB in the plant noticing bolts missing or maintenance routines not being performed, had there been corrective action plans taken and filed with Hydro on a regular operational basis? That's how it happens long before you do the big, sweeping licensing process. Is there a corrective action plan for an incident report? For all 400 of those, if you knew about them, there would be corrective action plans, I guess.

Dr Bishop: Some of them are issues that don't require action now; some of them do in the short term. In part of the review that is going on over all 400 are things like: "Has this been corrected? Has it not been corrected? Does it need immediate action? Does it not? Is it important for safety in the short term or is it important for safety in the long term?" That, again, will be completed by November 13 for the final issue. I think in BMD 97-167 you will see how we are approaching this particular review.

Mr O'Toole: I prefer to look at those incident reports again. I look at the overall IIPA report, and that's the big mother ship, if you will, but on an ongoing basis there must be a strategic plan. How thoroughly did they actually address the corrective action strategy that your inspectors onsite note daily? I suppose they must do random checks of various processes. Are they responsive in fixing them or is there a lethargy in training or travel or maintenance?

Dr Bishop: Jim, would you like to make some comments on the day-to-day process?

Mr Harvie: The sort of problem we've recognized is backlogs of maintenance. I wouldn't like to give the impression that we had a list of all these 400-odd shortcomings. We knew there was a large backlog of maintenance. The IIPA would then say, "This particular valve has not been maintained for such-and-such a time and it should have been." The finding is the same but we did not necessarily know about that specific valve.

We have told them to reduce the backlog of maintenance, and sometimes it would reduce for a bit. Then something would happen and it would go back up again.

Mr O'Toole: Since about 1984 that's the way it's been, a large cash hog.

Mr Kwinter: Dr Bishop, thank you for providing us with the briefing material. I want to just quote from a report that was made to the board by your predecessor, Mr Lévesque. Just by coincidence, it deals with a meeting that was held six years ago to the day from today, October 7, 1991, where the chairman of Hydro, Marc Eliesen, was meeting with the president. He says in his report to the board:

"...the president of AECB expressed the frustration of the board with respect to the performance of all stations, performances which in some cases seem to be deteriorating instead of improving as continuously promised by Ontario Hydro, with no apparent results." Then he goes on to say: "The situation of Darlington was used as an example of that situation. In the context of the QIP" -- quality improvement program -- "one would expect that a new station" -- and this was a station that just opened; it cost $13 billion -- "like Darlington would be exemplary and be an indication of what one should expect in the future. In fact, the contrary is happening. After a very short running time, Darlington is already joining the ranks of the other stations with maintenance backlog increasing, operating procedures not being strictly adhered to etc.... The president indicated to the chairman that the board was not ready to continue for very long to accept excuses and promises of improvement and continue to issue licences, unless more rapid changes occur."

My question to you is, how long is the board prepared to wait? This was exactly six years ago today. I would appreciate your response.


Dr Bishop: If there are not improvements and they are affecting safety, there's no question that we will not continue to issue licences, if the stations reach a point in their deterioration where the safety margin is not as conservative as we require it to be.

Now, it's one thing to begin accepting a plan at the beginning of 1989 and saying, "They've got a good commitment," and so on. I have attempted to keep saying to you that it is not promises we're looking at; it is results we're looking at. We are not making judgements on Ontario Hydro's promises; we're making judgements on the results that come out from their plants. The board is not saying, "Ontario Hydro promises, therefore we accept that they're going to fulfil that promise." That is not what we're doing.

Mr Kwinter: It would seem to me that there's something drastically wrong at Ontario Hydro when a brand-new facility that has just come on line, has just been commissioned -- well, this was in October 1991; I don't know the exact date that the commissioning took place but it certainly was in months -- already is showing examples of this sickness, if you want to call it that, that permeates the whole operation of the nuclear facility.

It can't be as in the case of maybe Pickering where you say, "We've got limited resources and we have to allocate them and we will get to it." This is a brand-new facility and it had already fallen into that pattern, which indicates to me that there's a very serious problem with management.

Dr Bishop: Absolutely.

Mr Kwinter: And if management can't control this thing, my question is, why hasn't somebody done something about it, to turf them all out and get people who can run that facility?

Dr Bishop: It's not AECB's mandate to manage the plant. It is within our mandate to point out if there are problems, but we do not manage.

Mr Conway: I want to pick up on that, Dr Bishop, because before coming today I spent some time reading your reports on the Ontario Hydro nuclear reactors from about 1993 onwards. There's a very interesting pattern here. You document overall a steady decline in performance, with some blips here and there, but it's trending downwards. These reports are as nothing compared to the material that you've provided today. The papers in those binders of yours are devastating, because, as Laughren and Kwinter and others have said, if the average person reads that, follows that paper trail from 1986 through to 1997 -- and you testified earlier this afternoon, this is a key point, correct me if I'm wrong -- that Ontario Hydro is telling you, as the regulator, that they're laying up seven of their 19 reactors, not because they can't continue to operate safely but because they don't have the resources to manage them, or words to that effect.

Dr Bishop: No.

Mr Conway: Be clear on that.

Dr Bishop: Yes. My understanding of what they are saying for the reasons they are closing is that they are not closing them for safety reasons but to be able to initiate a recovery plan which is going to be very costly. They must take the resources they have and put them into the other 12 plants. Again, it is not AECB's responsibility to tell them whether they lay up or they don't lay up.

Mr Conway: I understand that. But one of the key points for me as I go through your documents today is that it's hard not to come to the conclusion that from about 1992 onwards, even before, there is a high level of concern at the AECB about the impact of cuts at Ontario Hydro Nuclear; and I suspect as well delayed or deferred maintenance. There's all kinds of documentary evidence in here that there's an ongoing, deepening concern. A layperson would look at that and say, "Those cuts must have had some effect on the ongoing problems at these plants." That would be a reasonable conclusion.

Dr Bishop: Yes. It would be reasonable to say the decrease in resources could have had an effect on those plants.

Mr Conway: But I come back to my fundamental question, because you're our regulator. As Mr O'Toole said, if you're living out in Port Darlington or up in Tyrone out there in Durham region, you've got to believe that there's somebody like you saying, "Surely to God they're keeping an eye on these people." I'll tell you, if I live in Durham region and I get this book, I'm not going to be a very happy camper. I'm going to think that a lot of politicians -- I certainly wouldn't believe what Bill Farlinger said. Farlinger went running around on August 13 saying there was a cult. Well, it's baloney. You people were telling Franklin, you were telling Eliesen, you were telling the whole senior crew, including Kupcis, who's going to be here tonight, that there were real problems.

In 1991 we had no less a person than Elgin Horton, according to your document, admitting to being humiliated at their problems of not being able to do what they said. So my question remains, from your point of view, what do we need to recommend to make good intentions become better results?

Dr Bishop: Okay, let me say, number one, we were also telling the public at our meetings what was going on. It wasn't that there weren't documents and that these issues weren't being discussed at our public meetings. I want to make it quite clear that we were not hiding anything in terms of the public. That information was available if people wanted to really take a look at it.

Number two, you still have to distinguish between safety margins -- less than optimal performance. I'm now speaking from the mandate of the board. The mandate of the board is to make sure that safety margin is there. We like to see licensees operating in as excellent a manner as possible and not just meeting the safety margins that we require. But it is the management of that utility which has to have the responsibility for managing and for the corrections that are required. AECB cannot manage Ontario Hydro.

Mr Conway: But what do we need? Your documents make plain that they've got all kinds of good plans and good intentions. It's just that it doesn't produce the results. I am a citizen of Ontario and I'm expecting that -- you've told us today you got close in December 1996 to closing down Pickering GS. People are going to hear that. Six weeks ago they saw Ontario Hydro getting up in a fashion of self-criticism that would have impressed or embarrassed Mao Tse-tung. I mean, they said, "Every criticism the anti-nukes ever made about us is basically true."

Dr Bishop: What I'm trying to do, Mr Conway, is keep within my mandate.

Mr Conway: And your mandate is --

Dr Bishop: It is not my mandate to manage Ontario Hydro.

Mr Conway: Agreed.

Dr Bishop: It is not in my mandate to tell them how to manage. It is within my mandate to make sure that they're keeping that safety margin. But it's not up to AECB to tell them how to run their utility appropriately.

The Chair: Thank you very much, Mr Conway. We have done the round. There won't be sufficient time to do the protracted questioning as we go around. There will be time for perhaps one question per caucus. I think we may want to move in that direction to start with so we at least keep close to the time to move up.

I would like to ask a question, Dr Bishop, before we proceed any further, to pick up on some testimony you have given. Going back to the plants that Ontario Hydro has given up for the recovery plan, to your knowledge, is each and every one of them in a safe condition?

Dr Bishop: Yes.

The Chair: I want to be very clear: There seems to have been some response by Ontario Hydro to your stick, at least in 1996, where you took them from a six-month to a nine-month license.

Dr Bishop: Yes.


The Chair: But I pick up a concern about what seems to be a litany of inability to respond to directions by AECB over at least a decade, if not more, and some frustration that comes through in your reports. Does that reflect itself, in your sense, in terms of competency?

Dr Bishop: Of Ontario Hydro?

The Chair: Yes.

Dr Bishop: It's not the competence of Ontario Hydro to be able to improve its level of operations. We have not seen evidence that they have been able to do that on a sustained basis. I will also tell you that if you look, say, at Bruce A, a one-year licence in 1988 and a one-year licence in 1989, and then it gets a two-year licence, and then suddenly in 1992 it's back to a six-month -- I'm just using this to illustrate that there is an ability to sometimes make improvements but then an inability to sustain them.

The Chair: Final question: Is this a pattern that is reflected anywhere else in the nuclear world?

Dr Bishop: Yes. It is not an uncommon pattern.

The Chair: So it's not unique to Ontario Hydro?

Dr Bishop: No, it is not.

The Chair: Thank you.

Dr Bishop: I would just like to make one correction over the answer on Bruce A, on the generation tubes.

Mr Harvie: On the statement that all the reactors are currently safe to operate: At present all the Bruce A reactors are shut down because of problems with their steam generator tubes. It is not clear that the state of the steam generator tubes currently is such that they could be started up.

Dr Bishop: We can tell you that we believe all of those that are operating to be safe. But these may not be restarted; they are all down now.

The Chair: Thank you. Let's do a very quick walkaround, about three minutes per caucus.

Mr Laughren: Dr Bishop, I appreciate the fact that in your mandate you don't tell Ontario Hydro how to do something, you just tell them to shape up or shut down, basically. If they don't meet the standards, then you have the authority and the power to order them shut down. It seems to me that part of the process must be a learning exercise in dealing with Hydro, or any other. This committee is preoccupied at the beginning of our hearings -- and this is just the beginning -- with how we got here. We're jumpy about saying to Hydro, "You got us here; now we trust you to get us back to appropriate operating standards." I'm wondering if you could share with us what your thoughts are on how Hydro got to the situation they are now at where they are going to shut down seven reactors, how standards are minimally acceptable and how you almost shut down Pickering and gave them only a six-month licence, all of that. What have you learned from this exercise with Hydro? It seems to me that would help Hydro and you in the future as we struggle through this.

Dr Bishop: I think that I could probably answer that question in several different ways. Certainly if a utility or a facility is not looking at preventive maintenance from the very beginning of the time it starts operating, that eventually leads to a problem of being able to have the facility last the length of time it should; in other words, aging, which we're into now. I think all regulators everywhere now would say that looking after aging, or preventive maintenance, has to begin at the beginning. Everybody is saying that at the moment. But we would still go back and say that the shift in what was required of management from the beginning and once you go into a maintenance and operation phase, for whatever reason, did not occur.

Mr Galt: Dr Bishop, I very much enjoyed your presentation and the responses I've been hearing. Reading the IIPA report and following here this afternoon, a very significant portion sounds like it relates to human resources. We're not hearing too much about the mechanics of it, and it sounds like we have some pretty good hardware, especially at the Darlington plant. We've heard all kinds of comments made in relation to the human resources there, some not very complimentary.

In your opinion, are we seeing a numbers problem here? We read things from people being laid off through to unions demanding that tremendous numbers of people be off on union time. As you read through the IIPA report, we see a cultural problem, everything from contraband and not being able to inspect for that kind of thing coming in, as well as training. If those kinds of things were overcome, would we end up with good operating units? Or is it more than just those kinds of things in the human resources?

Dr Bishop: If you ended up with bad management in spite of all of that, you'd still have a problem.

Mr Galt: So it's at all levels -- numbers and bad management, the whole works, at management level?

Dr Bishop: Multiple problems are there. You can throw whatever money you want at it, but without appropriate management, you won't --

The Chair: I have to break in. I'm sorry, but we're down to about three and a half minutes now and we're being called. At this point, Dr Bishop, the members have to go upstairs to vote, they have to be there within three minutes. Is there something you feel so --

Dr Bishop: Yes. I just want to say that briefing book was not made specifically for this committee, but we felt it would be helpful to you. That's all.

Mr Conway: It's helpful.

The Chair: It's very helpful. Dr Bishop, I want to say thank you. I know that some members of the committee have expressed interest in asking you to return when they've had a chance to digest what's in the book and the testimony you've given today. So I hope you would be gracious enough to consider a return invitation where required.

Dr Bishop: Yes.

The Chair: I would like to thank you and your colleagues for being with the committee today. We will now stand adjourned until 7 pm. I'll remind the members that we will meet at 6 o'clock in the dining room and then back here at 7 o'clock. Thank you.

The committee recessed from 1748 to 1901.


The Chair: The committee will come to order, please. Representatives from all of the caucuses are here, so we will continue. I welcome as a witness this evening Dr Allan Kupcis. We appreciate your attending upon the committee. I've been advised that there is no opening statement, Dr Kupcis.

Dr Allan Kupcis: That's correct.

The Chair: We will begin immediately with questioning. We'll start the questioning with the government members. I do want to say thank you for being with us.

Dr Kupcis: Thank you. Clearly I'm here to be helpful and not argumentative, and I hope I can be.

The Chair: In that spirit, we'll proceed with the questioning.

Mr Galt: We did get into this meeting quickly, didn't we? Good evening.

Dr Kupcis: Good evening.

Mr Galt: Thank you very much for coming. I don't know whether to compliment you on being a hero, some might say a coward, to resign and walk away, but let's recognize you as a hero in recognizing a problem and resigning and leaving the organization.

Many things happened there, and as you read the IIPA report, we see that an awful lot of it relates to the human resources at the plants collectively versus the hardware that's in those plants. It hardly mentions any problems with the hardware. We identified this afternoon that in Darlington immediately after it opened, a brand-new plant, it was rated rather low according to the AECB.

I'd like for quite a while, anyway, at least as long as I have, to probe around the human resources, whether we're talking training problems, whether we're talking a culture. I read in there where they can't search people coming in. They can bring in almost anything they want to bring in. I also read in the report that when it comes to having people on the job, granted some were laid off, but a tremendous number, I get the feeling, are away on union duty. I'd just like to try to get some feeling. The chair referred to it as a cult problem in the organization. Maybe that's a nasty four-letter word, but that was used, one that we remember from last August. Could you open and discuss some of these human resources problems?

Dr Kupcis: Certainly. Yes, I'd like to do that because, as you mention, in reading at least the executive summary of the IIPA report, clearly in the listing of grievances and issues that were found there I would qualitatively guess you're talking about 75% of the issues that were raised in the report relating to human performance and behaviour.

In a sense, perhaps it's opportune for me right now to state that in launching into the investigation to start with and bringing in people to do a very disciplined look under almost a formula basis of understanding the depth of problems we have in Ontario Hydro, one of the issues of concern for me in doing that was to see if we in fact had lessened the safety margins from the design basis point of view. What I mean by that is whether we really knew any more, with all the changes in the plant with the hardware and the design changes that had taken place during just the normal course of operation, whether we had the safety margins on the design basis.

Why that's critical is because it's the design basis safety margins which establish the regulatory licensing of those plants. If those safety margins are impaired to any degree, then clearly a shutdown is required of those plants to fix those issues. That relates to hardware issues. So that was the core of the kind of process that we brought in through the IIPA to try to understand if in fact the design basis had been impaired.

The investigation over the course of time established that while there were indeed a few examples -- they went through some of the plants in that vertical slice through their safety systems and they uncovered some issues that needed immediate attention and were attended to -- overall the plants from a regulatory licensing point of view were safe to continue operation, even though they were rated minimally acceptable. Thus the whole issue around, why is there this continued frustration and aggravation in the company, in the board of directors, in the senior management about the performance of those plants? What is it that's driving that?

We -- clearly I did and the board, the nuclear review safety committee of the board -- had a qualitative sense for at least two years before we brought in the team that there were some issues around safety culture in the plant relating to an entitlement culture, a culture that would work around problems, would do fixes that would be not permanent fixes to issues that were brought up but they would be workarounds, they would be logged, they would be the so-called backlogs that would accumulate at a plant, and that there was a general sense of complacency in how we managed those plants.

That was a qualitative kind of feel that was coming out more and more as the discovery phase and understanding of what it is that's really frustrating us about the overall performance of the plants was getting to. The IIPA quite clearly and quite dramatically documented these in a quantitative way, documented the human performance failings, the complacency environment, the overall lack of a safety culture and focus in all of our operations, from management right through the plant.

You kind of then try to put some sense around what that means for you and what are the kind of generic causes that bring that forth. One of the root causes, one of the starting points in all of this -- and it's not unique to Ontario Hydro; it's been replicated in organizations like the Tennessee Valley Authority -- is that the overall initial success of the organization is one of the root causes that ultimately leads to its kind of fall from grace. You start believing your own headlines. You start becoming insular in thinking that you in your own management can solve the problems that arise -- that you don't have to look outside to other people in the world because of course they operate different kinds of plants, so how could they know what the Candu system needs? So the insularity issue, the complacency that sets in over time, the lack of accountability and a general loss of focus in operations are all issues that come to bear on this human performance dimension and safety culture dimension.

I think in the IIPA report, if I'm not mistaken, at the beginning there's a statement made that Ontario Hydro never successfully made the transition from a design and construction organization to a nuclear operations organization. I think that's a root of one of the issues we're dealing with.

Mr Galt: Okay. There are some suggestions in that report that there were so many concessions given to the union that the managers were unable to manage. Would you like to comment on that?

Dr Kupcis: I'll comment on that to this regard. There's no doubt in my mind, having tried to manage through the collective agreement that we have with our unions, that it is a very difficult job that we ask our managers to do. But that is not the fault of the unions. Clearly a union agreement is a two-way issue, it's signed by management and it's signed by the unions. It is another one of these examples of a monopoly structure, of 90 years of monopoly culture that doesn't recognize it's in a competitive world that has customers, that builds in over time and through contracts things that you won't find in the private sector in companies where they have to compete, because of course all of these things can go to the bottom line in a cost passed down to customers. That's by definition in the Power Corporation Act.

So it's not a blame attached to a union or a union contract; it's a joint issue that the company, over time, has also built into its structures which really did and do continue to frustrate the achievability of some of the goals and targets that the corporation is now faced with in the turnaround, and that is the lack of flexibility, basically, in terms of the rules and regulations of action.


The Chair: The opposition caucus.

Mr Conway: Thank you, Mr Chairman. Dr Kupcis, could you tell the committee just a little bit of your background and how long you have been at Ontario Hydro and in what capacities.

Dr Kupcis: Certainly. I got all of my three degrees from the University of Toronto, went on and did a little bit of work at the university of Oxford and then after my post-doc, I guess within a year, I joined Ontario Hydro in 1973 as a research engineer in the research division out on Kipling Avenue. In 1973, it was the middle of 1973, Ontario Hydro was launching and on the bloom of the biggest nuclear construction program on this continent. It recognized that some of the knowledge that it had to gain from all the disciplines in the sciences with respect to operating those plants would also have to be augmented. There was a growth in the research areas of Ontario Hydro, primarily aimed at increasing the kind of problem-solving capability that that kind of organization could offer operations.

Through 1973 until 1988 I was in the research division. My work was almost all directed at nuclear in-service inspection, nuclear safety, failure analysis of nuclear components. In 1988, I moved to head office in the capacity as director of corporate programming, which is a fancy title for the director kind of responsible for managing the business planning process in the corporation on behalf of the senior executive. In 1991, I was appointed vice-president of power system planning and procurement, which included NUGs contracts and real estate and supply and services issues.

At the end of 1992, when my immediate predecessor, Alan Holt, left the corporation and Maurice Strong was appointed chairman, I was appointed acting president.

Mr Conway: Thank you for that background. One of the issues the committee is struggling with is this culture of management, particularly at Ontario Hydro Nuclear, that seemed to have such problems as have been indicated by, among others, the Atomic Energy Control Board, who were in here this afternoon saying that senior management at Ontario Hydro Nuclear had good intentions, stated repeatedly, but they just couldn't seem to turn good intentions into practical results.

Mr Farlinger, on August 13, stunned a lot of us by observing, and I'll just quote some of what Mr Farlinger said, that: "The nuclear unit was operating over all those early years as some kind of special nuclear cult. Senior management didn't dig into what was going on in that special unit to the extent we might now say they should have. Nuclear was something different; it shouldn't be probed as deeply as other business units."

Boy, if I'm a layperson, I read that and I say, "Wow." So if there's a cult, I guess I've got to believe you're part of it. What do you have to say about it? Do you think it's fair to say that a big part of the problem was that there was some kind of cult that just stood in the way of getting the kind of progress that Ontarians would have wanted, particularly on nuclear safety?

Dr Kupcis: I guess I would answer that in this way. I myself have been publicly quoted as calling our nuclear operations and the management of nuclear a priesthood. This was very publicly at the Atomic Energy Control Board in 1996. I guess you might relate the priesthood to a cult, but I think what that is trying to get at --

The Chair: I'd like rise on a point of personal privilege, but I don't know who I'd rise to on that.

Mr Conway: You might want to talk to Michael Enright before you go any further.

Dr Kupcis: Yes. What that very dramatic statement is trying to capture I think is, in retrospect and with hindsight, this issue of insularity that developed in the nuclear operations of Ontario Hydro over a long period of time, stemming from initially a belief in their own headlines. It was I believe in 1981 that Ontario Hydro had eight operating reactors. Seven of those were in the world's top 10. That kind of headline, that kind of performance over a period of the first 12 to 13 years of the company, of nuclear operations, just led to an insularity built into that organization from an operations point of view that in the end forced them to get into situations where they didn't seek outside help because they didn't believe anyone else could.

Mr Conway: But Dr Kupcis, if there was a priesthood, you were clearly a high priest --

Dr Kupcis: Of course.

Mr Conway: -- and we have here today now from the AECB very clear documentary evidence that makes plain that people like the federal regulator were telling people like yourself, Mr Farlinger, Mr Franklin, Mr Eliesen, Mr Horton, Mr Anderson repeatedly, in depth, over a long period of time. Taxpaying citizens of Ontario, ratepayers, would have expected that the high priests, who are paid handsomely for their priesthood, unlike the Chairman of this committee in his previous life, would have accepted their leadership responsibilities and, to the extent that a federal regulator, the cop, was saying there is a serious ongoing deterioration, in particular on nuclear safety operations, would have done something.

Dr Kupcis: Yes, and we did. I think you heard, if I'm not mistaken -- and I think you opened with that. Dr Bishop I think told this committee that Ontario Hydro responded to every one of those warnings, every one of those letters with a plan, an analysis, a plan of action and performance indicators that would measure whether you've got there. In every one of those cases we showed over and over and over again that within the organization we had a total incapability to address those problems, because we failed repeatedly in making the progress that was expected in the time frame that was expected. So it's not as much the issue of a concern about the safety performance and nuclear performance of the plants. The concern is about the inability of the organization to respond to those concerns in a timely fashion.

Mr Conway: But two or three hours ago the federal regulator said rather clearly that in the fall of 1996, they, the AECB, came close to ordering the closure of the Pickering nuclear generation station.

Dr Kupcis: Yes. In 1996, the issue of nuclear performance and what we're going to do about it and how we're going to tackle it differently was high and constant on the agenda of the board and senior management.

Mr Conway: How would it be possible for a situation like the following to develop, for that situation in the fall of 1996 to get to a point where the AECB, very seriously concerned about Pickering, finally decides, I think in December, that they're only going to allow a six-month extension, which is a very real slap on the wrist?

Dr Kupcis: Yes, it's putting you on a watch list, no question.

Mr Conway: While you're still president, four months later, the chief nuclear operator, Carl Andognini, prepares a letter, and he sends it to Mr Harvie, who was here this afternoon, the director general of reactor regulation, dated April 16, 1997, saying that Ontario Hydro corporate now feels quite comfortable that all is well and that they should be relicensed at Pickering for five years.

Dr Kupcis: That's not what the letter says, Mr Conway. The issue of relicensing a plant is a particularity, a peculiarity of the Canadian regulatory scene. In the United States they give an operating license for ever, okay? But a regulator can at any time, no matter what an operating license is, step in and put a plant on a watch list and get its concerns addressed.


Mr Conway: Dr Kupcis, I've got the letter in front of me. Four months after Pickering gets a six-month extension, somebody named Carl Andognini writes to Mr J. Harvie. He concludes his two-page letter by quoting from that letter on April 16, 1997, "Therefore, in keeping with corporate management's mandate, involvement, action and the continuing progress being observed at the Pickering nuclear power station, Ontario Hydro respectfully requests a five-year operating license for Pickering."

Laypeople would look at this and say -- you just talked about the priesthood and about things not sinking in. Well, Kupcis and Farlinger and Andognini are running this operation. They have been told in recent weeks that they are on the verge of perhaps not being relicensed at Pickering. Andognini has presented your board with a report that says there are all kinds of ongoing problems at Pickering and none the less your chief nuclear operator is writing a letter to the federal regulator respectfully requesting a five-year license for Pickering GS. To a lot of regular folks, that would speak to a very serious problem.

Dr Kupcis: Well, I just don't interpret it that way. The distinction between regulatory compliance and safety culture issues in the plant is very real. The Atomic Energy Control Board is the agency that deals with compliance issues. No plant can operate without meeting the basic compliance issues of a regulator. That regulator is charged with looking after public health and safety with respect to those operations. The IIPA had by that time looked at this issue of safety margins, whether there's anything in the hardware or the technology of the plants that has degraded the safety margins to the point that we would not be meeting compliance issues of the regulator.

The issue if, is the culture of the people, the mindset of the people and how they operate the plants, acceptable, is it going to lead to problems for the long term, that's a separate issue that the corporation has to address, very clearly a large issue that has resulted in a very large economic and environmental issue for this province.

Mr Laughren: Mr Kupcis, welcome to the committee. I think that generally speaking you have a reputation as being one of the not too many straight arrows at Ontario Hydro, and I hope you enhance your reputation in that regard here this evening.

I think that at Hydro there was a board committee on the nuclear division. Am I right?

Dr Kupcis: Yes, we established it at the end of 1993 and it was called the nuclear safety review committee at the board.

Mr Laughren: Who chaired that?

Dr Kupcis: It was originally co-chaired by Dr Reynolds and Adele Hurley.

Mr Laughren: Is that Keith Reynolds?

Dr Kupcis: No, John Reynolds, University of Toronto.

Mr Laughren: They were board members who chaired this committee?

Dr Kupcis: Yes.

Mr Laughren: Was that created as a committee of the board because of the ongoing problems in the nuclear division?

Dr Kupcis: The committee was created as a direct output of a review that I had asked to be done in 1993. I'd asked the Institute of Nuclear Power Operators in the United States to help us in doing a review of the corporate support to the nuclear division, that is, how the corporation is either supporting or creating barriers or hindrance with respect to the safety mandate of the nuclear operations division. That kind of analysis is called a corporate peer review in the jargon of INPO. It was at the end of 1993, I believe. It said something to the effect that the corporation had not established clear enough expectations of the performance of the nuclear operations and that in fact a board committee to exercise due diligence on nuclear operations should be established, as in almost all of the jurisdictions of the United States. It was established and I think it met at the beginning of 1994.

Mr Laughren: Wouldn't you agree that AECB had laid out pretty clear directives for the nuclear division?

Dr Kupcis: No question, and that relates to this compliance issue again. In every instance, in all of those letters where Ontario Hydro was asked to respond to a regulatory compliance issue or else, there was a response -- not always timely enough.

Mr Laughren: And pretty bland too.

Dr Kupcis: And in some cases bland, as acknowledged subsequently in looking at the material.

Mr Laughren: The reason I ask that is it seemed to me that that committee of the board should have got Hydro out of trouble. Were they not able to get the information they needed from within the system? Was that the problem?

Dr Kupcis: I think there's some of that. But let me put a perspective on the time line here. We're starting with a committee starting up in 1994. It's a committee of the board, it's a governance kind of committee. It got immediately active in trying to understand some of the AECB reports, and in fact invited the AECB, for the first time ever I think, to talk to the board. They had discussions with board members and were advised that those board members should all take, I think it was, a one-day or two-day workshop on what safety culture means, what their responsibilities are in a nuclear setting. Through the period of 1994 that was what was going on: a learning curve, a discovery phase for the board members of what our nuclear operations were.

Through 1995, the board started to concentrate for the first time ever on peer reviews that were being done within the nuclear organization. They were being presented to the board, starting to be discussed, the response plans that would be put in place for all of those. They became extremely active and I think acted as a catalyst. The board and the board committee, and ultimately the whole board in 1996 when the increased frustration and urgency around the issues that didn't seem to be getting addressed got raised through the whole board, were a catalyst in this process in getting us to the point of bringing in the expertise where it was.

Mr Laughren: In the form of Mr Andognini.

Dr Kupcis: That's correct.

Mr Laughren: What puzzled me -- and you're an engineer, I believe. Is that the right designation you have?

Dr Kupcis: Yes.

Mr Laughren: You're an engineer of some considerable background and education. When Dr Bishop of the AECB was here this afternoon, I asked her about looking back, because this committee in its initial phase is looking at how we got here, what the problems were that go us here -- not the recovery plan at this point, but how we got to the position we're at now. She said, and I don't want to be overly simplistic about it, that if she could put her finger on one major issue, it was the failure to engage in preventive maintenance at the nuclear generating stations. I'm not an engineer. It seems to me that would be just sort of a given from day one, that given the nature of the nuclear beast, nothing would be more important than preventive maintenance. As an engineer, how do you explain that that didn't happen?

Dr Kupcis: I think her comment is quite valid. How do I explain that? By shaking my head and wondering myself. It gets back to this issue of the organization being totally consumed, overwhelmed by design and construction project management. It had totally lost its focus on operations. It's a different organizational structure and a different support that are required to engage in nuclear operations. That means that all the way through, maintenance and engineering support have to be aligned and tuned to the operations aspects of that plant, not to their own kind of particular interest areas.

The issue of not being able to move successfully enough and fast enough from a design and construction orientation in the mindset speaks to the design engineering aspects and the modifications, those being the things that were getting attention, as opposed to what operations needed in the support from engineering. Preventive maintenance: Absolutely. I mean, it's hard to understand. In every operation, from fossil to transmission systems to everything else, the issue of looking after your assets, trying to establish remaining life and looking at the capital reinvestment that you need in terms of maintaining those assets is a slam dunk. It's a given that that's where the concentration is. In retrospect, the evidence is clearly showing that the organization had not been structured and focused from a management point of view to give a focus on that area.


Mr Laughren: Was the nuclear division -- and these are obviously a layperson's words -- too highfalutin to use a common General Motors phrase like "preventive maintenance"? Is that part of the problem with the nuclear cult that existed, if it did?

Dr Kupcis: It's another way of trying to grasp, in layman's terms, the issue of complacency and how it develops around work practices and the insularity issue. But you're right, I think it is this lack of stopping to search for solutions, almost forgetting that the world moves ahead, the standards keep getting raised. Even if you're operating at your own past standards, the world has moved past you, and what used to be excellent no longer is, because expectations have increased. It's that kind of a mindset that we clearly had established in that operation.

Mr Laughren: Many of us feel very sad about what's happened at Hydro, because for those of us who believed in public power and so forth, it's a sad story that's unravelling here. I really wonder, at what stage in the whole process did it sink in to senior management, including you, that you had a real problem here and that it really went back to something as simple as preventive maintenance and you had to do something about it?

Dr Kupcis: For me, it's a question I've been trying to attend to for the last year and a half, trying to look back and understand myself what was it that I could have seen earlier, or what were the signs that I missed, and why wouldn't I have been able to take earlier action and maybe mitigate the impact of the overall issue as it stands before us today. Clearly where the light went on for me, if you want to put it that way, was when we got into the second round of peer reviews at all of our stations. As I'd indicated earlier, we'd gone through self-assessment peer reviews at most of our plants through the 1994 period.

Mr Laughren: Sorry, this was after the --

Dr Kupcis: It was the second round, when the plants were looked at again. In all cases we got numbers like 86% repeat findings, 55% repeat findings, 62% repeat findings in peer reviews. What that was getting to was the response plan that we had full confidence -- maybe misplaced confidence -- in the nuclear management in developing and saying, "This is how we're going to fix all these findings." Carrying it through, you find out 18 months to two years later that they'd been miserably unsuccessful in carrying them through. That's where it became clear to me that we don't have the training, we don't have the outward look within our own nuclear business area of finding our own solutions. It speaks to an inability to deal with root cause issues. That is sad; it's been a tough time.

Mrs Johns: When I was getting ready to prepare for you coming, I talked to a couple of people about you. Someone called you a critic of the nuclear division within Ontario Hydro. They told me a story about a report you authored on pressure tubes. As the story went, you wrote this article on pressure tubes and your report was basically not listened to. Can you just explain that to the committee?

Dr Kupcis: I think it's a little more complex than that. It is going back a bit into maybe revisionist history. That was in the early or mid-1970s where Ontario Hydro, early on with Pickering, ran into these hydride problems around the pressure tube rolled joints. It's kind of a phenomenon of the zirconium technology and the way we were operating the plant. It certainly wasn't just me, it was a number of scientists at the research division who were really concerned about our understanding of that issue and the continued operation of some of our units while we didn't have a full understanding.

Through the internal processes, we approached the appropriate committee in the design and construction organization, the internal nuclear review integrity committee, to present our case, present our findings and have a hearing. We got a full, open hearing. Their deliberations indicated that they weren't as concerned but thanked us for our input.

Mrs Johns: They told you that they weren't concerned about what you had made your recommendations on. Then what happened? Within a short period of time, were your findings found to be correct?

Dr Kupcis: Subsequently it was proved -- through all the retubings -- that it's an issue that did produce a cost and needed to be addressed in the company.

Mrs Johns: I found that story interesting. What I wanted to know from that is: In your evaluation of what happened in that specific instance -- that's the first time in the 1970s, I hear, that someone had drawn attention to a nuclear problem and went through the process and nobody at Ontario Hydro listened, even though you were from Ontario Hydro. Was there some kind of a tradeoff being made? Why wasn't the nuclear division listening to the research division with respect to potential issues or problems that they had there?

Dr Kupcis: I don't think you can characterize it as not listening, because they did. There was a very extensive technical investigation and review of our finding. The debate -- if there was one -- was on the implications and the severity of the implications of those. That's where, rightly, here's some room for debate on trying to understand what action should be taken. Having raised the issue, it wasn't dismissed and ignored. There was further work asked for and further investigations done to see if any of that could be substantiated. I felt that we had an internal process and that it worked. It wasn't a dismissal of some concern. But in some areas, where there was valid room for how you interpret what the implications might be, there were different opinions.

Mrs Johns: We heard today from the Atomic Energy Control Board, and yesterday too, I suppose, that Ontario Hydro entered into a very quick expansion of nuclear power in a very short time and were the biggest builders of nuclear power in the late 1980s. That would be the time frame. At that same period -- let's say between the mid-1980s and the late 1980s -- there started to be a downturn in performance in Bruce, for example. Can you comment on whether there is some correlation between the start of building and this great surge of nuclear activity at Hydro and the slide in maintenance?

Dr Kupcis: I think there is. I would personally suggest that there is. Maybe it's tenuous, but I really believe that. Of course, the building phase and the size of the design and construction organization was, through the 1970s and the 1980s, up till we were completing Darlington -- some of the performance changes for the overall nuclear program in the mid-1980s were due to taking units at Pickering A out of service to retube them. They were affecting the overall corporate performance because they were out of service.

But there's no doubt in my mind -- and I wasn't there at the time -- that a senior management and a board that is consumed with -- and this was in 1988, 1989, 1991, 1992 -- the building and the finishing of Darlington, the monthly increased overrunning of costs of that plant, the technical problems that plant faced in getting on line -- that is, getting into service, because at the start of trying to start it up, they ran into some serious technical difficulties -- and the overall management-board attention to the billions of dollars that were consumed in the Darlington exercise, while the board also consumed itself at that time with the immensity of this 25-year plan, if you'll recall, that came out of Ontario Hydro in 1989, I mean, that's what consumed time -- management capital, if you like -- and board time.

I've got to believe that all of that attention left nuclear operations, left the retail system, left the transmission system, left the guts of the utility operations -- what Ontario Hydro's there for -- to fend for themselves. That's part of the evolution of the difficulties of the corporation. It was consumed by Darlington and it was consumed by the demand-supply plan and the building of 10 more nuclear stations. In the late 1980s and the beginning of the 1990s, clearly there was decline in overall performance also within our nuclear division.

Mrs Johns: Can you explain to me -- you're obviously very qualified; you have a résumé that some of us would love to have -- why you chose to hire Carl Andognini and not to move on your own report about nuclear?


Dr Kupcis: That was really an outcome of that heightened anxiety I was developing through 1996 as all these second peer reviews were coming in, being reported to me, and about the organization's own inability to deal with the issues. I initially took some maybe moderate baby steps. I contracted with a person by the name of Gregory Kane from the United States, an ex-nuclear navy guy who was now in the consulting business, to look at turnaround plans. I attached him to Pickering first of all to do a walkaround, to every two weeks go and spend a week there and walk around with the management and give me some independent, third-hand sense of, are we making progress? We had improvement plans coming out of our ears of what we needed to do. Were any of those making any progress?

We changed some of the senior management. I looked for what I thought were some of the better directors of plants and moved one into Pickering because I thought it needed that attention. Those were things that were starting to be done through the middle of 1996, but from all the evidence I was getting back from the third party looking at what was going on -- are our plans working? -- I would characterize it as that I got the sense that within the nuclear plants themselves, we have not established a sense of urgency on the issue, on the turnaround required in the culture of the place. We haven't done it with our own people. If we can't do it, if we don't have the talent after I've shuffled it around and looked for what I thought was the best internally, I started the process in the fall of talking to some of my peers in the United States, looking for: What is available? Who has a demonstrated track record? Who has Nuclear Regulatory Commission experience, in bringing in the processes and procedures that the NRC in the United States uses to assess plants on their watch list?

I also had a very long conversation with an ex-Nuclear Regulatory Commission individual who had spent some time at the Bruce, who told me in I guess late October: "You've got all kinds of programs. Some of it's going there, but you're not going to arrive there in time. You've got to quantify the issues facing Ontario Hydro, find out how deep the well is before you're going to dig yourself out of it. You've got to do it in a quantified way that shows the people within the operations that this is real, that this isn't just something we're concerned about that is qualitative, kind of culture and mindset stuff, but that there are real issues that had better be addressed because these plants aren't going to operate for long unless they turn that around."

That led me to, among other people, spend a whole day with Carl in December 1996. What I was looking for was not an individual who was a consultant; I was looking for an individual who could recommend to me a team of five to six people that covered the areas of maintenance and operations and engineering at a plant, that had experience in turnaround situations, that would come in as a team to, first off, do the investigation, that NRC-based investigation, but second, to stay around and do the fix. The last thing I wanted was a consultant that says, "Here's your problem," and then goes away. We needed a group that was also capable of committing to do the fix.

I knew very well, and I told the board in January 1997, "What this group coming in is going to do as an investigation here could easily result in an early shutdown of some of our units." I was concerned about the compliance safety margins. In effect, it turned out, just from a resourcing point of view, with the complexity of issues we're facing, the recommendation of shutting some units and putting them in dry dock while we prove a track record that we can fix what we've got is what I guess is currently in front of Ontario Hydro.

Mr Kwinter: Dr Kupcis, you've spent close to 25 years at Ontario Hydro and you rose through the ranks.

Dr Kupcis: Yes, I did.

Mr Kwinter: In 1992, when you were appointed acting president, was that an open competition? Did you just get promoted from within?

Dr Kupcis: I was promoted from within. I happened to be in the wrong place at the wrong time. I mean that. I had the signing authority for the president's office because the president was in Spain when he was fired, so I was made acting president.

Mr Kwinter: What I'm trying to get at is that under your terms of engagement as the acting president, was it Maurice Strong, was it the board, was it a committee of the board?

Dr Kupcis: The acting presidency was clearly identified as interim. Maurice Strong, as the new chairman coming in, was trying to do his own assessment of the corporation in crisis, as he called it, I think in December, in front of a hearing of the Legislature.

He talked to me and said: "Look, I don't know you and you don't know me. We don't know what we have to establish here, what we're going to have to do at Hydro. I'd like you stay on because you're kind of sitting here in the office and you've got the signing authority, and let's see how it goes." But he did want to talk to me about the kind of things we should be looking at and doing. That was clearly an interim, week-by-week, ongoing situation.

Mr Kwinter: And when was it ratified?

Dr Kupcis: It was ratified by the board, as a recommendation from the chairman, I think in April 1994, after the task force in change had been completed, after the recommendations for the cost constraint of the corporation were done and put in place, and after some of the organizational changes, restructuring, the corporation needed.

Mr Kwinter: The reason I wanted to know that is, at any time were you made aware of the problems with Ontario Nuclear? Were you given direction and told, "Go out and fix it"?

Dr Kupcis: My own awareness of continuing issues and frustration around the operation of the nuclear business really came through my previous job, as I said, as director of corporate programming, where I was doing the business planning integration for the corporation. In that job itself, the five-year and 10-year planning of the nuclear business or the hydro-electric or all the capital requirements of those businesses would come under scrutiny.

There was clearly a sense -- as I said, I started in 1988 and I was there through the period of 1989, 1990, 1991 -- that we were being drawn away in nuclear operations, as a corporation, with ever-increasing requests for resources and money and decreasing performance of the operation. At that level, we knew there was an issue around how the nuclear was being organized and structured, and of course it was the task force in change that particularly looked at, "What do we have to do differently here to put a focus on nuclear that gives it a chance to look at it differently as a business?" That's where the business unit structure organization of Ontario Hydro -- it was around through that organization and change.

Our feeling was that if you put a business around nuclear, take out all the supports and do away with design and construction -- that was the big downsizing, the design and construction disappearing -- draw the engineering resources into nuclear that it needs to support operations, draw the head office staff and finance and human resources into nuclear that it needs to support its operations, in fact if you set up a balance sheet where the cost and revenue from that business is clearly shown, you will move a long way to structurally and in a management behaviour sense move that business into a mindset that at least knows what all its total resources are, what all its costs are, and can deal with managing it forward.

In fact, 1994, on the dimension of performance of nuclear, was the best year Hydro had ever seen. This is after we did that structure, after we set up nuclear as a business. In 1994, if I'm not mistaken -- this can be checked -- nuclear operations had a 76% overall capability and all 20 units that it had built operated for the first time ever. It went well over 90 terawatt hours of energy, well over 65% of the total requirements of the province. We had this situation that we'd gone through a restructuring, done a major reshift in how we managed the nuclear business, and 1994 turns out, on that dimension, on that measure, to be excellent.

But underneath that measure, underneath that, we started doing peer reviews and we started getting concerns about workarounds, people not paying attention to how they really need to do the business. We looked, and on the dimension of industrial safety, health and safety statistics of individual employees, nuclear was doing very, very poorly. It turns out -- again, this is a learning curve for me -- in retrospect that one of the precursor identifiers for problems down the road in a nuclear culture is the industrial health and safety measures of the organization. They're the first indication that you're going to have problems if you don't pay attention.


Mr Kwinter: I hear what you're saying. You take over permanently in 1994 and you realize there is a problem. You bring in the Andognini team. They report to you in interim reports. You get this final report that you present to the board in August, and it says all the things that everybody says everybody knew about. For years --

Dr Kupcis: But this time quantified.

Mr Kwinter: It quantified it, but it wasn't a great surprise. All you have to do is take a look at the -- Mr Lévesque at the Atomic Energy Control Board had problems. We had the doctor in today.

My question is that after all this is done -- you lead the initiative, you get this thing going, it looks like at least you've quantified the problem, you've got a team that's going to come in and implement their recommendations, and then you resign.

Dr Kupcis: Yes, absolutely.

Mr Kwinter: Why does that happen?

Dr Kupcis: It happens for two reasons. First of all, there is an ultimate accountability through the chief executive officer for the asset impairment of the corporation. I may not be hands-on directly responsible for 10 years of deterioration in the safety culture, but I'm ultimately accountable. One of the lines in Andognini's report, the IIPA report, was that the major issue facing Ontario Hydro is the lack of an authoritative and accountable management leadership. There is no way I can, as a chief executive officer, preach to the organization, "Accountability is the thing we've got to establish," and sit there and say, "but I don't have to exercise it." That's one thing.

A second thing is that the continuing anxiety by the board and the committees of the board around nuclear, through this discovery phase, through the understanding of the complexity of the issues and the final understanding of the cost implications of doing a fix, clearly led to an anxiety on the part of the some of the board, as communicated to me through the chairman, that perhaps it's time the board had a clean slate, something to work with that was a green field in moving forward. It didn't take me more than 10 seconds to agree that I have the accountability and that that opportunity should be given to the corporation to see if it can find a fix.

Mr Conway: Can I just have you repeat the second part again very clearly? The first part I understood. I think you said that you felt there was sufficient criticism in the Andognini report about accountability etc and you were prepared to take the walk.

Dr Kupcis: Absolutely.

Mr Conway: What was the second --

Dr Kupcis: The second part --

Mr Conway: Be very clear here.

The Chair: Very quickly, Mr Conway.

Dr Kupcis: The second part relates to the need that, with this large an impact on the organization, the board really should have the opportunity to find a new individual to implement the turnaround plan. It needs a green field.

Ms Marilyn Churley (Riverdale): Mr Kupcis, I was at the press conference in August, and I don't believe you were there.

Dr Kupcis: No.

Ms Churley: I can tell you that it was a very strange press conference to many of us. I must tell you that there was a feeling by some, including myself, that you were a bit of a fall guy. You were seen to be taking some proactive leadership in this area, but you were the one who ended up resigning. I'm wondering if you have any comment on that. Why you? Out of all of the other people who should be accountable, why were you the person to resign?

Dr Kupcis: There is only one individual, and that's the chief executive officer, where the board's accountability can be exercised. That's in that chair.

I think you've heard statements that what the IIPA contained in terms of its findings were not really that big a surprise, because we had been hearing it in various pieces through the piece. What really came to the fore was the response plan that was put in place and the cost of that. The impact on this province of taking some units out of service while you're trying to fix the others, not just in the cost of doing that but the replacement energy costs and the environmental costs, are just too big to put down and say, "That's an executive vice-president level," or "That's the head of Nuclear that should be leaving."

In the whole process through the years, through 1995, we lost directors of nuclear plants. We lost the general manager of the nuclear business. We lost the executive vice-president of generation. Ultimately, and not surprising to me, it had to be the chief executive officer.

I had been there for four and a half years: two years as chief operating officer, but two and a half years as chief executive officer. Yes, I was trying to find out the depth of the issue, trying to understand how bad it was going to be, and I think I did. But ultimately, am I the right individual to carry it forward? I feel very depressed about not being that and I certainly don't like to be seen as walking away from it, but that's a reality.

Ms Churley: I appreciate your answer. I'm sorry to interrupt, but I have to run in a minute to take my duties in the Chair, and my colleague Ms Lankin has some questions as well. I would love to ask you what you think of the recovery plan, but that's for later.

I want to get back to the issue of what you think went wrong. I was very interested, and also accept, your comments about some of the preoccupations and some of the particulars around the cult, but I think you'd agree with me that it also goes much deeper that that.

We have examples of very severe internal communication problems. For instance, just over the past few months, we had the issue of the copper and zinc. There were internal memos flying around all over the place about that from staff to different managers, and for 20 years nothing happened. There was the water containing radioactive tritium issue as well.

I would like to ask you to elaborate a little on that problem, from what you know about it in the short time you were there. For heaven's sake, I can't understand why people couldn't communicate. On the zinc and copper leakages -- I've said it in the House and I'll say it again -- it appeared even to be covered up, from the internal memos I saw. That kind of stuff is very worrisome. One wonders now, with some honest and open discussion, how much more do we and the public not know about what's really going on there?

Dr Kupcis: I don't disagree with that concern at all. One of the things I've said in several forums publicly is that Ontario Hydro in all its operations, but particularly in its nuclear operations, has to have the full confidence, first off, of the community in which it operates and the general population of this province. It can't operate a nuclear technology or plant without that.

The nuclear industry per se, around the world, has gotten itself into -- certainly through the 1960s, 1970s and 1980s -- a perception of an industry that always is going to talk to itself because it has its own jargon, that: "Those people out there don't understand. They never will. Radiation is a very complex issue. This is a really tough technology, and we just can't communicate with the so-called general population."

I think the industry fell into the trap of discounting the ability of individuals and citizens in any community to think for themselves. I think that's a trap that Ontario Hydro also fell into, along with the industry.

First off, in the early years, the lack of honest communication with the public built to the insularity, built to this feeling that "We don't even have to tell senior management about this problem because we'll have it solved before they know about it." It kind of builds to that environment and that expectation of how you work in the nuclear industry.

It's a statement that is really of concern. It should be of concern to everybody where there are nuclear plants around. How much more is there, and how much further do you have to go to expose the issues around nuclear for full transparency so you can start to regain some of that confidence? Some jurisdictions have done it; some companies have done it exceedingly well in regaining that confidence of the public.


Ms Frances Lankin (Beaches-Woodbine): Mr Chair, I have three questions I wanted to put. How much time do I have?

The Chair: You have about a minute for each.

Ms Lankin: Okay. The first one is very quick. I understand your honourable response with respect to your feeling of accountability. I want to follow up on Mr Conway's question with respect to the second reason and the board needing a clear slate. Did I understand that suggestion or comment or opinion was put to you directly by Mr Farlinger?

Dr Kupcis: Oh yes, but it wasn't the first time. For months I've had continuing discussions with the chairman about -- let's put a perspective on this. All of this is happening in an environment where Ontario Hydro is expecting a government policy announcement of one of the biggest changes in its history -- a competitive environment for itself. Ontario Hydro has a board-approved strategy to prepare itself for that competitive environment. Part of it clearly is getting our nuclear plants so that they operate and can be competitive.

In that context, I've had ongoing discussions with some members of the board and the chairman about when it's going to be the right time for the board to start engaging in a CEO/new leadership process because clearly, at least in my mind, the expected change to a competitive environment for parts of the organization would dictate to me that the leadership of the organization will have a very different skill set that will be needed in moving forward, and that skill set, not surprisingly, is one that is much more attuned to marketing skills, customer skills and trying to win customers. That's part of a board and human resources committee discussion about succession of the CEO. It's a governance issue for the committee.

We've discussed about when would be the right timing, when it would be appropriate, but the need was always clearly an expectation on my part that that would be part of it. I think the nuclear issue and the size of it, the final quantification of it, kind of gelled also with those previous discussions and said that maybe now's the time.

Mrs Fisher: Good evening, Mr Kupcis. I have 10 minutes here to pack about 20 years of thinking into and I don't know how I'm going to do that. But anyway, my first question revolves around something that we were talking about this afternoon and yesterday as well. It relates to human resources and it relates to the ability for Ontario Hydro to recover nuclear excellence and proceed with the full recovery of all units. There are three facets to the human resource planning that we have to look at: (1) Are there adequate numbers to make this recovery happen? (2) Is there adequate or inadequate training of those who are there and those who might come on? (3) The culture within.

I understand that in 1993 there was a very significant layoff. It was forecast to be in the range of 10,000. I know that 10,000 didn't really happen. I think it was somewhat less, or else it happened so fast and then contracts happened that it kind of got --

Dr Kupcis: In fact, it was 10,000 but included all of the kind of construction support, part-time, non-regular staff.

Mrs Fisher: So of the 10,000, how many were nuclear-trained workers?

Dr Kupcis: I've no idea. The majority of the regular staff -- well, let's talk a little bit about the process. There wasn't just one downsizing package through the process. Preceding the task force on change recommendations in 1994, the design and construction division had already instituted a program of downsizing because Darlington was finishing. There was a package aimed at just design and construction because it was going to get smaller. The task force on change was looking at a potential decrease in the organization of some 4,000 regular employees, hopefully most of them from the head office functions, the kind of functional service support of the organization. The package was totally voluntary and open to any employee and had a time-limited period in which to be taken. I've forgotten the numbers of how it broke down in that process.

There were subsequent echoes, if you like, of that initial program in 1994 which were much more focused and targeted and not that open, but in terms of overall -- and I'm sure you can get these numbers from Ontario Hydro -- there were some 9,500 nuclear operations personnel before the downsizing and today there are some 9,500, if not more, nuclear operations people. The people are different. The design and construction engineers and functions are not in the organization.

In the past, nuclear operations had the luxury of calling on the design and construction expertise to problem-solve technical issues. That is no longer there, and the skill mix is different. So the numbers are the same; the qualifications, skill mix and support in the background are not the same. The downsizing has clearly had an effect. You can't say it hasn't.

Mrs Fisher: I know that at our site, and I don't want to be site-specific here but I'm sure it's relative and I think it probably happens throughout the rest. I stand to be corrected if I'm guessing wrong here, but I know that in 1993 alone we were looking at 708, and I'm pretty positive that all happened. The problem is that the ones who came to replace weren't as highly trained and in different fields.

We're looking at cause and effect here tonight. Mr Andognini's report refers to understaffing and a lack of human resources to do a full recovery.

Dr Kupcis: Yes.

Mrs Fisher: Never mind after you lay up the eight units, but even with what we have now, do we have (1) the adequately trained staff, (2) in the right positions with the right classification, (3) to meet the licensing requirements by AECB? Mr Andognini is on the scene. The question was asked yesterday and I don't think we got a very clear answer. Who was responsible for hiring Mr Andognini? Was it a board decision?

Dr Kupcis: No, I hired Mr Andognini and his team.

Mrs Fisher: Are the skills of a specialist from the States in a non-Candu nuclear reactor system transferable to the Candu system, as I would say to Britain, France or anywhere else?

Dr Kupcis: No question.

Mrs Fisher: So are the skills of the labour force from those sites also transferable?

Dr Kupcis: Yes. If they're authorized nuclear operators, they need to be qualified in our regulatory setting.

Mrs Fisher: I understand that. But if we're looking at a recovery mode, one of the major causes identified in Mr Andognini's report is lack of qualified staff.

Dr Kupcis: Yes, they need to be retrained.

Mrs Fisher: Trained, skilled staff to meet the needs as required. I understand that at the CNA conference a week ago it was brought to the attention of the conference that there are 200 qualified unemployed British nuclear workers. I understand also that there's a pool in other places. If we don't have them, not to mention the ones of our own who have been laid off probably not strategically smartly in the past who wouldn't mind being employed again, could we not instead look at addressing the human resource problem that seems to be the reason why the whole other part of the plan comes forward, of investing in our people for the long-term future and protecting the asset that we already have?

Dr Kupcis: There's no question that should be looked at, if in fact those opportunities are there, and I suspect they would be. Again, my sense of the industry in the United States: I mentioned another organization, the Tennessee Valley Authority, that also has fallen from grace and is trying to recover. Commonwealth Edison currently has got most of its plants -- a huge nuclear utility on the watchlist with the NRC -- in danger of being shut down. The Millstone reactors in the northeast United States have been shut down and are trying to recover.

There are a number of reactors in the United States that are trying to go through a recovery reinvestment in resources and training. The skill base, if it's there, is just going to be priced out of reality in terms of trying to attract it from all of these competing interests in the United States. It doesn't mean that there aren't people around, that there aren't places we should be going, and if there are 200 out of the British experience, we should see if they can be relocated.

Mrs Fisher: Well --

Dr Kupcis: But one of the issues, Barb, if I could finish, is that it's the skill mix. A lot of people are available with the engineering skills. What we're lacking are the technical trade skills. We've got the numbers, but we've got a mismatch of skills.

Mrs Fisher: That's where I would like to start at home, quite frankly. That would have been my preference in the beginning. I appreciate your explanation as to why you went outside for a third-party, other view. I understand that, but I'd like to start at home. I think I could mirror this to each of the communities that have experienced this impact already.

I can talk about my own street that I live on where people are now dealing cards up at Casino Rama because they were afraid that they only had four years training invested in them at the time when, to me, the non-strategically planned buyout happened. They were afraid they'd get nothing, as opposed to just a layoff, so they took it. My feeling is that there are many out there who have that training in them. Quite frankly, if we have to admit that that mistake was made, let's reinvest in ourselves, because the money is already invested in them. Those are the same people Mr Andognini is talking about: "We need qualified staff. We need people to come here." I'd like to start at home, and then if we have to go abroad to shore it up, let's do that.


I want to ask two more questions before I lose you here. One is with regard to the peer evaluations. Dr Bishop talked about them this afternoon and you've referred to them as well. Are the restrictions on peer evaluations or the standards of those more stringent than those of the AECB licensing requirements?

Dr Kupcis: No question. I don't know if it's restricted. They're looking very differently at finding evidence of how the plant is being managed in operations, in maintenance, in engineering, in radiation protection and chemistry, in security -- all those areas that should be focused around the operation of the plant. They look in a very prescribed way at evidence that says that it's all integrated, focused on the right issue, managed appropriately; that the supervision of those functions is integrated with the policies, processes and procedures that the regulator expects to be carried through. It really is trying to get to the precursors on safety culture.

Mrs Fisher: On that word "culture" -- I just want to interrupt because I want this last question asked -- could you please talk a little bit about the difference of the nuclear technology itself and your support or non-support for that versus the cultural problems that we experienced?

Dr Kupcis: The CANDU technology in the plants is, in my mind, still a star among the early, first-generation nuclear plants around the world. It is a robust technology. It has a defence in depth that's designed into it that I feel very confident stands up to any design that's out there today. I think it has demonstrated through the things that Ontario Hydro has had to do that it's capable of being revitalized, reinvested in. The pressure tubes right from the core of the reactor have been rebuilt, and they can still get the operating performance that's required out of them.

The hardware technology issue I'm absolutely not concerned about at all. The concern to me is the sustainability. Let me put it this way: I talk about safety culture, and people say, "Okay, that means safety of the plant." Safety culture is not a destination, it's a journey. It's an extremely fragile issue. A plant can be rated excellent, number one in the world, as they are in the United States, some of them. It can't then say: "We've achieved it. We've done it. We sit here." The unwavering attention that's required of management to address safety culture and constantly be on top of it, to say that it is part of the behaviour pattern and mindset of every employee here -- the fact that they've gone through a radiation monitor 100,000 times and nothing has ever been found, but the next time they say, "I don't need to do it any more because I've done it so often," those kinds of things are at the root of the start of the decline in safety culture. It's just a technology that demands that kind of unwavering attention. It absolutely demands it.

It is different, I would suggest to you, than the operation of a fossil plant. That dimension of individual safety is the same kind of unwavering attention, but not on the procedures, processes and policies that operate and integrate that plant. It is a very demanding environment.

Mr Conway: Dr Kupcis, I want to come back to an exchange that you had with Ms Lankin. You've been very helpful all evening. Certainly I, and I think the committee as well, appreciate your candour. You've been more helpful than perhaps you might even understand.


Mr Conway: Actually, you should look up, because I'll tell you, there's one guy, wherever he is, Bill Farlinger, who's watching and listening. That's something I want to talk about.

There was a broader context here. About the time you became chief operating officer, in response to an invitation from Maurice Strong, Bill Farlinger produced a very compelling argument in June 1995 for privatization top to bottom, a new enterprise. In May 1996, Donald S. Macdonald, PC -- Privy Counsellor.

Interjection: A Liberal.

Mr Conway: -- produces this paper about electricity reform and major changes, effectively the dismemberment of Ontario Hydro. Hydro watchers, anybody who's been watching the debate through 1995, 1996, 1997, are more aware of the fight for the future of Ontario Hydro. It's a well-known story. I'm not going to embarrass you, but you know exactly of what I speak. That's going on. The government is talking about privatization, but not in a first-term mandate. Then we get the talk of a government white paper, but there's a lot going on, on a very fundamental question of policy. I'm told that Al Kupcis, like most smart people, is not without a view on this subject.

That takes me to your letter of resignation, which I want to make some reference to. It's dated August 12.

Dr Kupcis: Is that publicly available?

Mr Conway: I certainly was asking the committee --

Dr Kupcis: It should be.

Mr Conway: Yes, and I'm happy --

The Chair: Do you have any objections to having it read into the record?

Dr Kupcis: No, not at all.

Mr Conway: You see, the thing is that it's very noble of you to say what you've done about accepting your responsibility. I thought I heard you say the first time -- that's why I asked you to repeat it, and I'll check the Hansard -- something that conveyed a more active sense about Bill Farlinger's suggestion that it now might be the right time for new leadership at Ontario Hydro.

Be that as it may, you, Allan Kupcis, who in December, for all your faults and for all your being part of the priesthood, go and bring in somebody from the outside. A reasonable person would think you've got to know what you're going to get from Andognini or anybody like Andognini. You do that, you get a report and you leave. Like an honourable Roman, you fall on your sword. John Fox certainly doesn't feel so inclined. Bill Farlinger, who's been there for 18 months as chairman, doesn't have any compunction about staying on. You're the only one to take the walk.

Then I look at this letter of resignation. I want to read two paragraphs of this letter of resignation. After you talk about a few things, you say:

"As disturbing as I find the consequences," of the IIPA and the recovery plan, "I am very proud of the fact that I commissioned the Andognini report. I commend its results to you," meaning Bill Farlinger, because this is a "Dear Bill" letter. "I am also very proud of the role I have had in helping prepare Hydro for the competitive future ahead, part of which is recognizing and correcting the problems in our nuclear plants. Together, we have done tremendous work in strategically repositioning Ontario Hydro for a whole new market environment." That I understand.

It's this paragraph where I really need some translation:

"If I" -- Al Kupcis -- "could leave you" -- Bill Farlinger -- "with a word of advice, it is to continue the preparations for competition. There are those who say this approach only deflects us from an operating focus and is better left to policymakers outside Ontario Hydro. I could not disagree more. As the chairman of Ontario Hydro, your overriding obligation is to ensure that the company is strategically ready to compete. Of course, this means having our plants in world-class shape, but the cultural revolution required to turn a monopoly entitlement mindset among our people into one that is ready to embrace and succeed in the marketplace is the central task at hand. Without your encouragement and leadership on that, I suggest it is highly unlikely that Ontario Hydro will survive to take its rightful place as a leading North American energy company, a place that Ontario Hydro is uniquely positioned to assume if it prepares itself now."

Would you care to elaborate?

Dr Kupcis: Great letter. I had forgotten --

The Chair: Unfortunately, the response will have to take less time than the question.

Dr Kupcis: To elaborate particularly around that last part --

Mr Conway: Aren't you saying there that there's more going on here? Doesn't this letter tell us that Al Kupcis is preparing for a competitive marketplace, but he wants a substantial public enterprise that is Ontario Hydro to be in that, but that Bill Farlinger, like Don Macdonald, imagines a very different kind of future?

Dr Kupcis: That's debatable. You can interpret the recommendation of the Macdonald committee very differently, and how you slice the current organization into its different businesses and what kind of governance you put on them is a public policy issue, a government policy issue, but in talking to nuclear issues in that letter and in talking to the role of an Ontario Hydro that is in that competitive market and, more broadly, in North America, I'm talking about Ontario Hydro's generation being there, being able to compete and needing to be fixed, being in that position.

Mr Conway: Did you and Bill Farlinger have the same view as to the future for Ontario Hydro?

Dr Kupcis: I don't know.

Mr Conway: You really expect me to believe that?

Dr Kupcis: Yes.

Mr Conway: That you worked alongside, with this chairman for X number of months --

Dr Kupcis: The chairman was present at the board of directors in July 1996 when the board fully, unanimously endorsed the corporate strategy. That was a strategy to position Hydro for competition, to structurally enable the pieces of it to actually separate into holding company structure.


Mr Conway: You see, the concern some of us have is that we recognize that clearly there are problems, and today's evidence both on your behalf and certainly the federal regulator's underscore that. In and of itself those problems existed, but there is another debate going on here.

Dr Kupcis: No question.

Mr Conway: A reasonable person could easily conclude that if it were your agenda to dismember and totally privatize Ontario Hydro, there are two things -- Farlinger in his paper in 1995 makes this point -- that you need to do. You certainly need to reduce public confidence in the way the state-owned enterprize is operating. That performance on August 13 certainly was not intended, as Ms Churley indicated, to raise public confidence. That clearly was a calculated effort to tell the people of Ontario that it was a mess over there, particularly at the nuclear power division.

Secondly, if you're going to privatize this provincial utility that has nuclear as two thirds in terms of its generation, as Farlinger points out, you've got to deal with the stranded assets issue. This recovery plan can be read in such a way as to say, "We've laid up one third of our capacity and that's a very useful step in the direction of dealing with the stranded assets."

Dr Kupcis: It's an interesting conspiracy theory. Let me put it to you this way: I commissioned the IIPA in December, okay? That process occurred. We had been expecting a public policy statement on the restructuring of Ontario Hydro in the previous September, the previous November, December, January, February. It was imminent -- the response to Macdonald.

Mr Conway: That's right.

Dr Kupcis: I fully expected, and that is another debate that was going on and occupying mine and the board's time at the same time, a declaration of policy intent that at some point down the road generation will be in a competitive market in this province, and that Ontario Hydro will have to position itself for that through the transition. I expected that announcement to have come out. The IIPA and the results of that, if it resulted in investments in plant and so on, would clearly be positioning those investments as a business decision, not made for a monopoly, capital in a monopoly sense that will be recovered from rates, but a business decision made on the competitiveness of that unit with X amount of capital dollars invested in it.

You can then treat every one of your assets, the 65 hydro-electric stations and 20 nuclear units and six fossil stations, on the basis of its ability to compete as a unit on a unit cost basis in a North American marketplace. Whether that plant can afford that investment and still compete could be an absolutely different kind of utility decision. That was my expectation, that that would have happened.

Ms Lankin: I'm going to come back now to the second and third questions I had before. Mr Kupcis, the first question I want to put to you deals primarily with the period before you took on your leadership role as acting president, and then president. I heard you say earlier on that one of the problems in terms of how the culture developed came and arose from the success of the organization, the rating of the plants as the best in the world.

Dr Kupcis: That's the sense I have.

Ms Lankin: Then you come in. You're aware of problems. You start a process. The board sets up a committee. There are peer reviews. The second peer review comes. The light goes on for you. There are continued problems at a rate of 86% and 50% in these peer reports. In between that time of those moments, there is at least a decade of atomic energy board reports in which I would have thought that for the leadership of Hydro the light would have come on, where there are problems repeated and repeated.

We heard that described this afternoon as a problem of sustaining the safety measures in place. Because you've offered an observation about the success of the organization leading to the deterioration in the culture, could you offer an observation about that period of time, of why it took two peer reports for the light to come on, as opposed to all of those AECB reports?

Dr Kupcis: It's a great question and it's one I have wondered about. All the letters that I guess are on file, and all the discussions about a growing concern of the AECB around the operations of the entity, are on one dimension also asking for action around the compliance issues. I can only assume, because every plant was getting relicensed on a regular basis and some with no issues around them, that every one of the kind of compliance issues -- which revolve normally around technical issues.

A compliance issue would be around the computer code that is used to analyse a massive loss-of-coolant accident and if there's a problem with that. Those were all successfully addressed by the organization, because the AECB continued to relicense and every year gave a report on every one of those reactors that would always say, "There are some concerns here, but continued public safety is not at risk and continued operation is okay."

On the one hand, you're getting a relicensing of the reactors by the regulator, and not until 1996 did they come down and say: "Here's a hammer on your head. We're only talking six months now. We're really serious this time." So that fits in with the kind of peer review time frame. Even though there are probably letters and documents that continue to talk around issues of concern, I've got to believe -- I sat there. I tried to recall my first peer review that I saw from an organization. It's quite a document. They're available and you should read them. Every incident you read, you can understand. You say, "Boy, that sounds lousy. Why would they do this kind of thing? I don't understand that."

But you go through a peer review, and you read enough of them, and you have no -- or at least I don't; I don't say you don't. I had a real difficulty, reading the words, in trying to understand the seriousness of this. "Is what I'm seeing normal? Does every utility see this? Is it out of normal? Is it worse or is it better?" Until we started assessing, that is, putting a grade on the plant, you can't expect the board of directors or a layperson or even a CEO, for myself, and this is international standards -- until you put a rating on those plants, you really don't get an assessment, "Is this good, bad or indifferent?"

Ms Lankin: In that respect I give you credit for starting a process of actually putting the ratings on. I think my question is still valid as to why, for all of those years and all of those reports, the AECB didn't move management before that.

Dr Kupcis: I thought we had.

Ms Lankin: Let me now come to the point where you come into leadership. There is the change in the board chair. We have a new committee struck at the board. They're starting in on 1993 through 1994. They're starting to need the learning curve. They're meeting with the atomic energy board, starting to look at the safety issues. They also have a reorganization going on. I was struck when you said that 1994 was the best performance year in terms of the nuclear division. What I was struck by was that this was on the basis of output, production and cost --

Dr Kupcis: Right.

Ms Lankin: -- and that safety wasn't an integral part of that --

Dr Kupcis: No.

Ms Lankin: -- even though the concerns had been there. You were taking the steps, you were putting the peer reviews in; it still wasn't there. My question is, during that period of time as I reflect on it in our interactions during that period of time, was Hydro senior management, like the years before when they were concentrating and preoccupied with building and mega-plans and cost overruns of Darlington etc, at that point in time preoccupied with both the debt issue and the fiscal health of the organization and the development and promotion of Hydro International? Those are the two things that strike me most.


Dr Kupcis: Sure, there's no doubt we were. That leads to my usual 16-hour days. I had a lot of things going on, and senior management, not the least of which was trying to renegotiate labour contracts, Hydro International, re-establishing the kind of new structure, new management team, all of that, but on the nuclear safety issue, I said yes, 1994 outwardly in any measure for the corporation would have been regarded as a huge -- it met its targets on performance and cost, capability performance.

Ms Lankin: On the basis of moving to a competitive organization and a business unit but not the underlying issues.

Dr Kupcis: Yes, but we had the peer review starting, the first round of them, at that time and it wasn't that these were kind of dismissed and not acted on, because the board committee was very intrusive in establishing their expectation of concern that something be done about this. What we got, or I did anyway, through the board concerns was it pushed those expectations and responses on to the nuclear organization, the nuclear management. My expectation was that they had the capability, the skills, the knowledge, to provide the right kind of response plans that would address these issues.

So they were being identified, they were being passed for solution and carrying out. I'd have to give them the benefit of the doubt. We had some of the best technically trained individuals around running these plants. It turns out, and that's why I say the kind of light comes on, you get these repeat peers later on.

The Chair: We have time for one more round, but slightly truncated, so I'll cut you down to about six minutes a caucus and we'll go from there.

Mr O'Toole: My riding is Durham, and Darlington and Pickering, kind of in there, and safety obviously is a primary concern, and a concern of this committee. I've been somewhat removed, and involved in the emergency plan when I was on regional council. The openness with the community is somewhat at question. The very simple question: Are our plants safe, in your opinion?

Dr Kupcis: Yes.

Mr O'Toole: That's clear, and just a nice segue into -- you mentioned in your last comment to Ms Lankin your involvement in your 16-hour days with the labour contracts. The HRM or cultural problem we've talked about was well known throughout the organization, it's my understanding. You've characterized it as kind of the deterioration of the safety culture. That was your own characterization. Was it well known by the union as well, by Mr Murphy and other players within the organization?

Dr Kupcis: Certainly. I forget what year it was he became a board member and has been involved with and all along --

Mr O'Toole: Certainly a full partner.

Dr Kupcis: Absolutely.

Mr O'Toole: Has the HRM problem, as it was well known by the union, more or less co-opted top management from their kind of arms-length operational principles ahead of all other protocols within the contract situation? Do you understand? They have an important, serious supervisory responsibility, irrespective of contract language, safety being the overriding principle.

Dr Kupcis: Correct.

Mr O'Toole: Was that in any way compromised in the operational function?

Dr Kupcis: I think it turns out that it must have been, but it's through the interpretation of managers and supervisors of their limitations of action, or that they feel that there are barriers to it.

Mr O'Toole: I'm going to share my six minutes or six seconds with Mrs Fisher because she has a much more informed view, more specifically along those lines. I just have another general kind of question. What advice do you have for this committee for the future of Ontario Hydro Nuclear? Is it the primary supply side as it is today or should there be a fundamental change?

Dr Kupcis: Oh, no, I think this province would do its citizens a disservice if it didn't concentrate on the recovery of these facilities. There's no question. We had a report yesterday about the growing concern of acid rain, and this is after a 50% reduction around --

Mr O'Toole: Exactly, that's right.

Dr Kupcis: Wait until the population, globally, really gets excited about global warming. This is a technology that --

Mr O'Toole: Mrs Fisher has some questions on that line.

Mrs Fisher: I guess you answered the quickest one, do you believe all the units are fixable and should be? I think you just said yes to that.

Dr Kupcis: I think the issues in Ontario Hydro's culture are fixable. I think the training and the people and skills are all fixable. I think Pickering A units, personal opinion, because they've had the capital investment, once that's been proved, can be returned to service. I am not at all sure about the Bruce A units. Pickering A yes; Bruce A still faces a large capital investment. If we really have this competitive environment, then those capital investments will have to be judged on the basis of that plant being able to compete in the market. That will be a business decision.

Mrs Fisher: When Hydro moves into a community that is predominantly occupied by Ontario Hydro -- that doesn't seem to be the way, as such, with other nuclear sites in the province of Ontario; it certainly is that way with regard to the Bruce project -- I don't see that it is unlike anywhere else where if you come in -- and I know that Hydro has been an excellent partner in terms of financial support, in terms of absolute understanding with the community and disclosure of information and those types of things. My question now is this: Should Hydro not be responsible for considering the negative economic impact on that community as it makes it decision with regard to the order in which other units are brought up?

Dr Kupcis: I think that should always be part of the consideration. There are a lot of issues that have to be balanced, but on the community issue, you're absolutely right. We have an overriding presence in the Bruce community. Like it or not, we've displaced a lot of other presences that used to be there. So, particularly Ontario Hydro, as a crown corporation, as a public utility, has a corporate responsibility to look at those issues.

Mr Kwinter: Dr Kupcis, I really want to get back to your letter of resignation. I have a problem, and let me just explain it and I'd like to get your reaction to it. You are a chief executive officer. You've been there for two and a half years. You identify, first of all, as the chief executive officer of the largest utility in North America, Hydro Nuclear, which is a major component of Ontario Hydro, but still you have all these other things that you have to look after. You understand there's a problem, you want to quantify the extent of the problem, and you get Andognini to come in and do the report. Is that --

Dr Kupcis: His team.

Mr Kwinter: His team, yes. He comes in with the report that is very critical; nothing new other than he's quantified it. You decide, in your letter to Bill Farlinger, "I am resigning in light of the report of the nuclear performance advisory group." It would seem to me that the guy that should resign is the chief nuclear officer, not the president of the utility.

The other thing is, when we were talking earlier, you said you had talked to Bill Farlinger and you said: "There's going to be a new setup. It's going to be three different divisions, or three different entities that are going to be doing their things. We now need a different set of skills."

It would seem to me that if that was your feeling and if you were going to resign, you would wait until the white paper came out and you would have said "You know what? The government is taking this in this direction. My strength is in engineering and doing all of these things. We are working in a monopoly where I've been for 25 years. We're now into a whole new environment that is going to require marketing, it's going to require all of these things, and I don't think I'm the guy for it."

I just can't help but feel there's more to it than this, that as my colleague said, you've been asked to fall on your sword, or as in the Japanese culture where the president gets this terrible report and walks away and commits hara-kiri because he's lost face. I don't think you have any reason to have lost face. You're the guy that got the Andognini team in to quantify the problem, and somehow or other it just doesn't ring true that you would resign as a result of that.

Dr Kupcis: It's not one thing or the other thing, it is a combination and it's the environment we were in, but ultimately the biggest issue really is the impact the report would have on the corporation and the impairment of the asset base. Every CEO has an absolute obligation to not only maintain the assets, but enhance the assets of the corporation.


Mr Conway: I'd like to pick up, because we have got just the last few minutes. You've been a very helpful and in many ways a compelling witness. Like Mrs Johns, I've heard those same stories and there are a lot of people around the beltway who are saying, "Boy, the wrong guy's taken the walk on this one."

Dr Kupcis: There is no other guy. Who's the chief executive officer?

Mr Conway: Listen, there's John Fox, there's Bill Farlinger. But let me finish. I feel like I'm being had. I feel like there is more to this story than I'm being told. Listen, at one level I admire the fact that you said, "It's on my watch and I'll take the walk." But I'd be a lot more impressed if a few others were walking down that plank with you. I'll be perfectly frank, because my sources tell me that the fight that's been going on is the fight between the full-blown privatizers, led ably by Bill Farlinger, and the Al Kupcises of the world who want to get into a competitive market all right, but want a substantial public enterprise called Ontario Hydro to be an altered but still significant enterprise in that new competitive order.

Dr Kupcis: Different issue.

Mr Conway: Oh, I don't think for this committee it is a different issue. I think it is a very collateral and very important and related issue. Are you denying that tension of choices I've just painted exists?

Dr Kupcis: Tension within the organization or anywhere within the electricity --

Mr Conway: No, within Ontario Hydro.

Dr Kupcis: It exists all over.

Mr Conway: Within the Ontario Hydro you have been a senior part of in the last three to four years, particularly.

Dr Kupcis: No, I had a clear mandate as CEO to --

Mr Conway: That's not my question.

Dr Kupcis: -- develop the corporate strategy as it was approved by --

Mr Conway: Wasn't it your view --

The Chair: Mr Conway, please let him respond to your question.

Dr Kupcis: That was my mandate as CEO, to enhance, to work on that strategy.

Mr Conway: Is it not your view, and was it not your view while inside the senior levels of Ontario Hydro over the last three years that you were there, that yes, there would be a competitive market, and yes, there had to be a different kind of Ontario Hydro, but that there ought to be, in your view, a substantial public enterprise that was Ontario Hydro doing business in that new electricity section?

Dr Kupcis: And that was our corporate strategy.

Mr Conway: That was your corporate strategy.

Dr Kupcis: The board approved the corporate strategy.

Mr Conway: That's clearly not the corporate strategy of Mr Farlinger.

Dr Kupcis: I don't know that.

Mr Laughren: Dr Kupcis, did you brief, on a regular basis, the last two Ministers of Environment and Energy?

Dr Kupcis: I briefed, on a very regular basis, all the energy ministers other than the current one.

Mr Laughren: The reason I ask that is I was somewhat taken aback when the current minister said in the Legislature that he was not aware of the interim report, the IIPA interim report in April. It occurred to me that would be the kind of thing, I would think, correct me if I'm wrong, that a minister would be briefed on, because it was such a warning, such a shot across the bow, about what was going on in the system.

Dr Kupcis: I'm having some difficulty here because the April IIPA briefing to the board was all about process, all about what they're going to do, how they're going to do it, the kind of success or progress they're making and the timelines and the expectations to finish. That was the IIPA internal interim report to the board. So that was a process-based one which I wouldn't see being something that would be regularly reported, other than, "Hey, we're going to finish this. It's under way. We're going to finish it by such and such a date." The date at that time was in July some time.

Mr Laughren: When that same report came down in August you were still there of course as the CEO. Were you part of a briefing, at that point, to the minister?

Dr Kupcis: No, I wasn't.

Mr Laughren: Were you surprised at the standard rating, whatever the right words are, having dropped since April? Did that surprise you?

Dr Kupcis: The standard --

Mr Laughren: Yes, the minimally acceptable ratings and the --

Dr Kupcis: The minimally acceptable was the rating that is the only one I'm familiar with, and that's the one that was applied in the final report. I don't know of any other in --

Mr Laughren: The ones in April were not as harsh as the final.

Dr Kupcis: You must be talking about a document that was a team document, an internal, a partial; I don't know which one we're discussing here.

Mr Laughren: It was called the IIPA interim report, and it was dated April 17, as I recall. It's in my file papers here somewhere.

Dr Kupcis: Did it talk to findings in that report at that time? I wasn't aware of any.

Mr Laughren: Yes, the nuclear performance advisory group, Ontario Hydro Nuclear: Independent, Integrated Performance Assessment (IIPA), Phase 1, Preliminary Report, and it gives the standard ratings. It explains what A, B, C, D, E mean.

Dr Kupcis: I know the ratings. I don't know that report, though.

Mr Laughren: I thought the board was given this report. You're saying they were just updated as to the process.

Dr Kupcis: The board was given a report on the process and progress and timelines and expectations. That's my recollection at the board meeting.

Mr Laughren: Were you as surprised as Mr Farlinger was at the recommendation in Mr Andognini's final report in August?

Dr Kupcis: He didn't have recommendations, he had findings. The final report had recommendations only around what Hydro should be doing to address some of these concerns. The kind of asset optimization program wasn't part of it.

Mr Laughren: All I'm saying is that Mr Farlinger indicated to us that the remedies advocated by Andognini came as a surprise to him because he considered them radical.

Dr Kupcis: Yes, and I've got to assume he means that in order to fix this thing, let's take some seven units out and drydock them.

Mr Laughren: Correct.

Dr Kupcis: That was not part of the IIPA report. That's a subsequent discussion on how now do we deal with --

Mr Laughren: The recovery plan, sorry.

Dr Kupcis: The recovery plan issue, and so on. Yes, I think that was a surprise, the extent to which that needs to be done. Because the logical questions, as they were asked by some of the members of the committee, are: "Can't you find other people? Why do you have to do that? Why do you shut down anything at all? Concentrate on fixing these things, but keep these others kind of -- they're minimally acceptable, they're safe to operate, and keep them operating, that way because it won't give you...."

Ultimately, in my discussions with the team and the senior management, I absolutely am not a believer that in the same organization you can ask for excellence in operation and safety culture in one part of it, and ask the management in the other culture, and not give them the resources to achieve it. It's the same way. I don't believe anyone should be operating a nuclear plant at a minimally acceptable level. I don't think any community should accept that. The issue should be making the progress to excellent.

Mr Laughren: But you do agree with the recovery plan recommendations.

Dr Kupcis: The first, for planning purposes, yes. It seemed like it's about our only option. I don't know the analyses that have been done subsequently, the other options that may have been tabled or other ways of doing it, but certainly for a first look for planning purposes I thought that was the only option that was around.

The Chair: Dr Kupcis, I'd like to thank you for attending the committee this evening. We have completed the rounds to begin with and I hope we might, if necessary, invite you back if there are further questions.

Dr Kupcis: If you find it's appropriate some time and I'm in the country, certainly.

The Chair: I'd be pleased, Dr Kupcis, to seek you out. I appreciate your forthrightness tonight; I know it's appreciated.

I'm going to ask members of the committee to stay where you are. The committee will go in camera. We have some business matters to discuss, so if members would keep their place. Dr Kupcis, again, much appreciation from this committee.

Dr Kupcis: Thank you.

The Chair: Perhaps members of the public could clear the room for us so the committee can attend to its business, please. While I'm waiting for the room to clear, I can mention to members of the committee that you have received documentation about topics to be addressed by Carl Andognini tomorrow.

The committee continued in closed session at 2050.