Bruce

---------------------- Forwarded by John J Lavorato/Corp/Enron on 07/11/2000
09:59 AM ---------------------------

From: Kevin M Presto @ ECT 07/11/2000 09:54 AM

To: John J Lavorato/Corp/Enron@Enron
cc:

Subject: Bruce

---------------------- Forwarded by Kevin M Presto/HOU/ECT on 07/11/2000
09:47 AM ---------------------------

George Hopley
07/11/2000 09:47 AM
To: Kevin M Presto/HOU/ECT@ECT, Tom May/Corp/Enron@Enron
cc:
Subject: Bruce

Ontario Power Generation and Bruce Power announce leasing agreement at Bruce
Nuclear

KINCARDINE, ON, July 11 /CNW-PRN/ - Ontario Power Generation (OPG) today
announced it has entered into a major agreement with Bruce Power Partnership
relating to the facilities at the Bruce nuclear site. Bruce Power is 95% owned
by British Energy plc. The transaction provides an opportunity for the two
main unions, the Power Workers' Union and The Society of Energy Professionals
on the Bruce site, to subscribe to 5% of the equity.
This public/private partnership involves a long-term lease agreement for
the Bruce A (3076 MW-currently in lay-up), and Bruce B (3140 MW) facilities.
The lease runs until 2018, with an option to extend for up to another 25
years. OPG will receive an initial payment of $625 M to be made in three
installments. A first payment of $400 M will be made on closing subject to
normal closing adjustments. The remaining $225 M will be paid in two
installments of $112.5 M each.
Bruce Power's annual payments include base and variable elements. The
variable elements include a share of the net revenue, and supplementary
payments for the management of used fuel. In total these payments are
estimated to be about $150 M in calendar year 2002.
Bruce Power will offer employment to all employees at the Bruce site,
other than those being retained by OPG. Employees remaining with OPG include
those that provide waste management and centralized nuclear operations support
services. The agreement is expected to close, subject to Bruce Power obtaining
the necessary licences, in the summer of 2001.
"Today's announcement is good news for employees, the community, the
electricity consumer and the shareholder" stated Ron Osborne, OPG President
and CEO. "This agreement injects private equity into the Bruce facilities
which in turn will provide new opportunities for employees and the community.
It is also a major step towards opening the Ontario electricity marketplace to
competition and providing electricity consumers with choice." Osborne noted
that an additional benefit of the agreement allows OPG to concentrate on
accelerating the performance improvements underway at its Darlington and
Pickering nuclear facilities while the new company focuses on the Bruce.
Nuclear safety continues to be of paramount importance for Ontario Power
Generation, and safety has been a key tenet for British Energy. Both companies
are committed to ensuring high safety performance standards.
"We are delighted to be announcing the creation of a new company. Bruce
Power will demonstrate that safety and commercial success go hand in hand,"
said Robin Jeffrey, Chairman and Chief Executive Officer of British Energy
Canada Ltd. "We have a high regard for CANDU technology and for the skill of
the staff at Bruce. We are confident that by working with the staff and the
unions, Bruce Power can achieve world class safety and commercial
performance."
To reduce its market dominance, OPG is required by conditions in its
operating licence granted by the Ontario Energy Board (OEB), to reduce its
share of generating capacity to no more than 35 per cent of that available to
the province 10 years after the market opens.
British Energy was selected following an extensive worldwide competitive
process over the last two years. They have significant operating experience
and a proven safety track record with a range of nuclear reactor types.
To close the transaction, Bruce Power will be required to secure licences
from the Canadian Nuclear Safety Commission (CNSC) and the Ontario Energy
Board. Bruce Power will be required to follow the stringent licensing and
operating requirements established by CNSC, formerly the Atomic Energy Control
Board.
Ontario Power Generation is a major North American electricity generating
company. OPG's principal business is the generation and sale of electricity to
consumers in Ontario and into the interconnected markets. OPG's goal is to be
a premier North American energy company, focused on low-cost power generation
and wholesale energy sales, while operating in a safe, open and
environmentally responsible manner.
British Energy PLC is the UK's largest electricity generator. British
Energy owns and operates 15 reactors in the UK and a further two in the United
States through its joint venture, AmerGen. British Energy's goal is to be a
worldwide electricity leader building on its "Safety First" culture and track
record of commercial success.

BACKGROUNDER INDEX
------------------

Safety:

1. OPG'S COMMITMENT TO NUCLEAR SAFETY
2. BRUCE NUCLEAR - SAFETY IS NUMBER ONE
3. INFORMATION ON CANDU REACTORS
4. EMERGENCY PLANNING IN ONTARIO

Financial:

5. OPG/BRUCE POWER LEASE AGREEMENT
6. NUCLEAR USED FUEL, WASTE MANAGEMENT AND
DECOMMISSIONING
7. CHRONOLOGY OF THE PUBLIC/PRIVATE PARTNERSHIP PROCESS

Employees:

8. WHAT HAPPENS TO EMPLOYEES

Transition:
9. REDUCING MARKET DOMINANCE
10. TRANSITION ARRANGEMENTS
11. NEXT STEPS

General.
12. ONTARIO POWER GENERATION
13. QUICK FACTS ON BRUCE NUCLEAR POWER DEVELOPMENT

SOURCE Ontario Power Generation Inc.