The province of Ontario is shutting down seven of its 19 operating nuclear reactors - all within 100 miles of the U.S. border - after an internal report concluded that the province’s utility company was so badly managed that it had compromised the safety of its entire nuclear power system.

By the time the report was released Wednesday, the president of Ontario Hydro - one of the largest utilities in North America, owned and operated by the province - had already resigned, and company officials said they expected more departures.

To replace the lost nuclear energy, Ontario will shift to existing generating stations that use coal and oil and will have to spend about $2.2 billion over the next four years to cover the increased costs. William Farlinger, chairman of Ontario Hydro, said rates would not have to be increased, although he was unable to say exactly where the money would come from.

Ontario Hydro will also spend $1.5 billion between now and 2001 to overhaul the dozen reactors on the shores of Lake Ontario and Lake Huron that will continue to operate. The shuttered reactors will be brought back on line only if doing so is cost effective, Farlinger said in Toronto on Wednesday.

The reactors being closed, a workhorse model called Candu, are built from a Canadian design that is at the center of Canada’s nuclear energy program as well as a multibillion dollar export strategy by the government.

On Wednesday, Farlinger and other Ontario Hydro officials stressed that the report did not question the safety of the Candu design, but rather how the plants were run and maintained.

“Our problems are people,” Farlinger said, “not machines.”

But according to the report, inadequate maintenance and replacement of parts “incrementally erode the margin of safety” that is supposed to be built into the reactor.

The problems at Ontario Hydro could have an impact far beyond the province of Ontario. Candu reactors have been sold to Argentina, Romania and South Korea.

During a trade mission last November, Canada also signed a $3 billion contract to sell two of the reactors to China. Sales in recent years have been sparse, and officials said Wednesday that the problems in Ontario will definitely make future contracts even harder to come by.

Ontario Hydro, which relies on its nuclear plants to supply 60 percent of its electricity, also sold about $128 million worth of electricity to utilities in Michigan last year.

It also supplies electricity, through power grids and a daily spot market, to other states, including New York.