Cameco's Bruce Power income up for quarter;

Cameco Corporation received $193 million from  Bruce Power in 2009, which is its share of the $610 million the nuclear power company paid to its owners, the company says.

The publicly traded company, one of the world's largest uranium producers, released the figure as part of its fourth quarter and annual results made public Wednesday night.
Cameco owns Bruce Power in partnership with TransCanada Corporation and BPC Generation
Infrastructure Trust, a trust established by the Ontario Municipal Employees Retirement System, the Power Workers' Union and The Society of Energy Professionals.
The company said its fourth-quarter earnings before taxes from Bruce Power were $62 million, up from $55 million in 2008 and that "the increase was mainly due to higher realized prices."
The realized price reflects spot sales, revenue from Bruce Power's agreement with the Ontario Power Authority and contract revenue. About 54% of Bruce Power's output was sold under contracts in the fourth quarter of 2009, down from 76% in the fourth quarter of 2008, Cameco said. "A lot of those contracts came to their natural end, which is why less was seen under contract at the end of the year," John Peevers, a Bruce Power spokesman, said Thursday. "They were signed for a certain term and that term came up."

Cameco said that Bruce Power is putting fewer contracts in place because of weak prices, but
Peevers said that "contracting strategy is one of those things we don't talk about much because that's part of our commercial advantage. It's a commercially confidential thing that we don't talk too much about going forward."

Cameco made a number of predictions about Bruce Power for 2010, estimates Peevers said came from Bruce Power guidance. "We expect the average capacity factor of the four
Bruce B reactors to be approximately 90% in 2010 and actual output to be about 4% higher than it was in 2009. The 2010 realized price for electricity is projected to be about 5% to 10% lower than 2009," Cameco said. It also predicted the company would only have contracts for only about 25% of Bruce B generation at its planned capacity factor and that revenue "will be lower by 5% to 10% as a result."
Cameco also said it expected "total operating costs to rise by about 10% to 15%, mainly due to higher costs for planned outages and maintaining the workforce." Ontario has lost lots of manuf acturing that may not come back. Combine that with an increased supply and a decreased demand for electricity and "it shouldn't come as a surprise to anyone that prices are going to dip," Peevers said.
"The way we're responding to that is looking at how we do our business internally, looking at ways to eliminate waste, improve our processes to try and stream-l ine our costs. We're looking hard at outages. Every time a unit is down, obviously they're not producing revenue . . . Equipment reliability is another big thing . . . We're looking at a lot of ways to keep our costs in line" including suggestions from workers at Bruce's nuclear power complex, he said.
"We're not talking layoffs. We're actively hiring as we have been since Bruce Power came into  existence. We've hired 1,800 people since 2001 and we're continuing to hire this year as people retire."
© 2010 Osprey Media Group Inc. All rights reserved