OPG REPORTS 2023 SECOND QUARTER FINANCIAL RESULTS

Darlington's Unit 3 returns to service ahead of schedule; Planning underway for three additional small modular reactors; Advancing hydroelectric opportunities

TORONTO, Aug. 11, 2023 /CNW/ - Ontario Power Generation Inc. (OPG or Company) today reported its financial and operating results for the second quarter of 2023, with net income attributable to the Shareholder of $418 million, compared to $446 million for the same period last year.

Darlington Refurbishment Unit 3 return-to-service ahead of schedule

On July 17, 2023, Darlington Nuclear Generating Station's (Darlington GS) Unit 3 reconnected to the electricity grid after its overhaul, 169 days ahead of schedule. The OPG and partner project team developed innovative techniques and applied lessons learned during the refurbishment of Darlington's Unit 2 to drive schedule savings. This included an industry-first combined pressure tube and calandria tube removal process that is expected to create additional efficiencies during the subsequent unit refurbishments.

"This world-class project performance demonstrates OPG's expertise and commitment to completing the station's four-unit refurbishment safely and with quality by the end of 2026," said OPG President and CEO Ken Hartwick. "It's a testament to OPG's detailed planning, and the performance, expertise and commitment from our refurbishment project team, partners, and skilled tradespeople."

Darlington's Unit 1 refurbishment is well underway and proceeding on schedule. With Unit 3 returned to service, OPG has taken the final unit to be refurbished, Unit 4, offline to begin work. The Darlington Refurbishment project will secure approximately 3,512 megawatts (MW) of clean, reliable nuclear power for Ontario for an additional 30-plus years.

New Nuclear

In July 2023, the Ontario Energy Minister announced that OPG and its new nuclear integrated project delivery partners could proceed with three additional small modular reactors at the Darlington New Nuclear site, where preparation for the first unit is currently underway.

"Small modular reactors are key to meeting Ontario's growing electricity demand, and this fleet-style approach to their deployment makes economic sense," said Hartwick. "Building multiple BWRX-300 units at the Darlington site will drive down regulatory, construction and operating costs. We will also be able to leverage common infrastructure, some of which we are now building, to support four units rather than just one, which will further reduce our costs."

Along with the Province's announcement, the Ontario Government released the 'Powering Ontario's Growth' plan outlining the next steps toward meeting the province's increasing demand for electricity. As part of the Province's growth plan, OPG will work with Bruce Power, with support from the Independent Electricity System Operator (IESO), to develop a feasibility study by the end of 2024, for future nuclear generation facilities in Ontario.

Hydroelectric Opportunities

The Province's growth plan includes a request for OPG to optimize current hydroelectric generation and conduct further due diligence on high potential hydroelectric sites in northern Ontario, while engaging with Indigenous communities. The plan also calls on the IESO to assess the proposed Marmora hydroelectric pumped storage facility. This proposed project, a joint venture between OPG and Northland Power Inc., is a first-of-a-kind for Canada and would convert a long inactive, open-pit iron ore mine in eastern Ontario into a hydroelectric battery to generate electricity.

"As we work to generate more power from existing hydroelectric facilities, we continue to have discussions with First Nations and communities to further understand the potential for new hydroelectric development in the north and support the IESO's review of pumped hydro," said Hartwick. "With Ontario's largest, most diverse clean power portfolio and our talented team of employees, OPG will help power a growing economy while enabling net zero goals and ensuring the participation of Indigenous communities."

Net Income attributable to the Shareholder

Net income attributable to the Shareholder decreased by $28 million for the three months ended June 30, 2023, compared to the same period in 2022. The decrease was primarily attributable to lower nuclear electricity generation due to a higher number of planned outages at the Pickering Nuclear Generating Station, and increased compensation expenses. The decrease was partially offset by a higher regulated price for OPG's nuclear electricity generation previously approved by the Ontario Energy Board (OEB), a lower income tax expense and a gain related to the sale of certain non-core real estate assets.

The increased compensation expenses resulted from the impact on OPG's collective agreements from the November 29, 2022 Ontario Superior Court's decision, which found unconstitutional the Protecting a Sustainable Public Sector for Future Generations Act, 2019 that set limits on compensation increases for employees in the Ontario public sector, and the OEB decision on June 27, 2023 denying OPG's requested regulatory variance account to record the related costs for the OEB's future review and disposition. On July 17, 2023, OPG filed a motion asking the OEB to review the decision denying the variance account. In response to this request, the OEB has agreed to hear the merits of OPG's motion, with submissions to be filed during the third quarter of 2023.

About OPG

As a global climate change leader and the largest, most diverse electricity generator in the province of Ontario, OPG and its family of companies are helping lead the charge to a post-carbon economy.

Ontario Power Generation Inc.'s unaudited interim consolidated financial statements and Management's Discussion and Analysis as at and for the three and six month periods ended June 30, 2023, can be accessed on OPG's web site (www.opg.com), the Canadian Securities Administrators' web site (www.sedarplus.com), or can be requested from the Company.

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SOURCE Ontario Power Generation Inc.