Oil Sands Truth: Shut Down the Tar Sands

Energy Alberta Corporation backtracks on firm nuclear power purchase agreements

Henuset pursues nuclear power for Alberta
Jon Harding, Financial Post
Published: Wednesday, September 26, 2007

CALGARY -- A fuel bundle from a nuclear reactor seems wildly out of place inside the rustic lobby of Calgary's Willow Park Wines & Spirits. Courtesy of Atomic Energy Canada Ltd. (AECL), the cylinder sits beside a display case containing some of the world's finest wine and scotch.

It is a serious juxtaposition in the chalet-like business office of Canada's largest private liquor store, which now doubles as the home of Energy Alberta Corp.

Wayne Henuset disputes the interpretation that the foyer's two centerpieces are an odd pair. Agreeing would perhaps be akin to acknowledging how far his latest endeavour veers from his business roots.

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The entrepreneur, who successfully built small businesses in liquor retail, oilfield services, land development, real estate, and automotive sales, has a new challenge: he and 50% partner Hank Swartout, the founder and executive chairman of Precision Drilling Trust, want to bring atomic power to Alberta. Energy Alberta's plan is to build a $6.2-billion nuclear power plant in the province's rural northwest.

Mr. Henuset says he wants to pull Alberta into the global "nuclear renaissance" and while there are hurdles -- financial, political and more recently competition from Areva, the French nuclear conglomerate -- business associates say it would be a mistake to underestimate Mr. Henuset, who will spend $50-million himself over the next two years funding his private company's regulatory work in anticipation of the twin CANDU reactors, bought from AECL, churning out power by 2017.

"I would never bet against him on this," said Tom Wood, Mr. Henuset's business partner for a half-dozen years at Roundup Well Servicing Inc., which they sold in 1997.

"We're all kind of from that can-do generation, and while it's a big task and he's going to need a lot of help, he's already come a long way with this. Wayne isn't someone to let many roadblocks stop him."

Mr. Henuset's eureka moment came after hurricanes Charley and Ivan threatened to plough through a home he built on Florida's Gulf Coast to host his son's wedding in 2004.

A chance chat with a nuclear physicist at a Florida airport in the wake of his own determination that fossil fuels were the cause of global warming -- and more hurricanes -- made for a serious about-face for the Albertan, whose father was a major player in the oil and gas pipeline business.

"[The nuclear physicist] said [nuclear] is cleaner, safer, more reliable, dependable and stable, and he pointed out that 'you guys in Alberta' have these crazy power prices that go up and down because one day your gas is costing this much and the next, it's way up here," Mr. Henuset said in an interview.

"How can anyone run a business with that instability? He made a strong case."

Mr. Henuset would toss the idea around in his own mind before approaching AECL in early 2005 to sign an exclusivity agreement to deal only with Energy Alberta within the province.

Late last month, the company finally announced it had selected a site for the plant near the town of Peace River and had filed its initial application to prepare the land for development. The news made front-page headlines, but since then public confidence has been put to a test in Energy Alberta, which lists 'total transparency' on literature that spells out the firm's guiding principles.

At the Aug. 28 press conference to announce the site for the plant, Mr. Henuset claimed a single buyer was lined up to purchase 70% of the facility's 2,200 megawatts of electricity.

As a crop of nuclear opponents readied to pounce on the buyer, Mr. Henuset said a confidentiality agreement prevented him from naming the company, but added the company would likely reveal itself within the next year.

Later in the news conference, he raised more doubts with an awkward response to a question from an activist in which he denied Energy Alberta was in talks with oilsands giant Royal Dutch Shell PLC.

Mr. Henuset has since backtracked, saying there are as many as eight potential large off-takers lined up to buy his firm's power, and that it is more likely the plant's electricity will feed the provincial grid than go to a single player, or consortium, in the booming oilsands.

Mr. Henuset now says the 70% figure came from a requirement to have that percentage of output sourced through power purchase agreements (PPA) in order for the project's debt financing to come through.

"We're dealing with eight confidentiality agreements, from electrical contractors to oil companies to pulp and paper guys and we're not going to tell you, or anyone else, who those people are until we have signed power purchase agreements," Mr. Henuset said. "There are customers out there that would take it all, but I'm not going to tell the world who my potential customers are before they've signed PPAs."

Alberta's Conservative government, meanwhile, which was cold on nuclear in the past - likely in an attempt to protect the province's natural gas sector -- seems to be warming to the idea; it recently invited Mr. Henuset to address the Tory caucus, following which Premier Ed Stelmach said the government will form a policy on nuclear energy after consulting Albertans.

The Opposition Liberals have also asked to hear a presentation from Energy Alberta.

"This government, I think, understands nuclear better than previous provincial governments did," Mr. Henuset said. "I think they have people in their caucus that have been around nuclear and understand it. It's positive."


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