ML13294A400
| ML13294A400 | |
| Person / Time | |
|---|---|
| Site: | Pilgrim, Vermont Yankee, FitzPatrick File:NorthStar Vermont Yankee icon.png (DPR-028, DPR-035, DPR-059) |
| Issue date: | 10/16/2013 |
| From: | Azulay J, Gunter P, Judson T, Katz D, Lampert M, Williams C Alliance for a Green Economy, Beyond Nuclear, Citizens Awareness Network, Nuclear Information & Resource Service (NIRS), Pilgrim Watch, Vermont Citizens Action Network |
| To: | Borchardt R NRC/EDO |
| Guzman R | |
| References | |
| 2.206, G20130211 | |
| Download: ML13294A400 (19) | |
Text
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Alliance for a Green Economy; Citizens Awareness Network, Pilgrim Watch, Vermont Citizens Action Network October 16, 2013 Mr. Bill Borchardt Executive Director for Operations U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 By USPS and Email: bill.borchardtl@nrc.gov Mr. Borchardt:
Alliance for a Green Economy, Beyond Nuclear, Citizens Awareness Network, Nuclear Information &
Resource Service, Pilgrim Watch, and Vermont Citizens Action Network, hereafter referred to as "the petitioners," submits the enclosed and attached information as a supplement to our March 18 emergency enforcement petition.
Timothy Judson Assoc. Director, Nuclear Information &
Resource Service President. Citizens Awareness Network 6930 Carroll Ave., Ste. 340 Takoma Park, MD 20912 (30 1) 270-6477 x l4 timjfa'nirs.org
/s/---------------
Deb Katz Executive Director, Citizens Awareness Network P.O. Box 83, Shelburne Falls, MA 01370 (413) 339-5781 deb@nukebusters.org
/sf---------------
Chris Williams President, Vermont Citizens Action Network P.O. Box 16 Hancock, VT 05748 (802) 767-913 1 cevan@sover.net
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Jessica Azulay Organizer. Alliance for a Green Economy 20 13 E. Genesee Street (3 15) 480-1515 Jessica@allianceforagreeneconomy.org
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Paul Gunter Director, Reactor Oversight Project Beyond Nuclear 6930 Carroll Ave., Suite 400 Takoma Park, MD 20912 (30 I) 270-2209
lsi---------------
Mary Lampert Director, Pilgrim Watch 148 Washington Street Duxbury, MA 02332 (781) 934-0389 mary.lampert@comcast.net
PETITION TO THE U.S. NUCLEAR REGULATORY COMMISSION REQUESTING ENFORCEMENT ACTION AGAINST ENTERGY NUCLEAR OPERATIONS, INC.; ENTERGY NUCLEAR FITZPATRICK, LLC; ENTERGY NUCLEAR VERMONT YANKEE, LLC; AND ENTERGY GENERATION CO.
October 16, 20 13 Alliance for a Green Economy, Beyond Nuclear, Citizens Awareness Network, Nuclear Information & Resource Service, Pilgrim Watch, and Vermont Citizens Action Network (hereafter, "the petitioners") hereby submit this supplement to our March I 8, 2013 Petition for Emergency Enforcement Action (hereafter, "the petition") to the US Nuclear Regulatory Commission (NRC), as supplemented on April23, 2013 (hereafter, "Supplement # I or "the first supplement"); June 28, 2013 ("Supplement #2): and July 22, 2013 ("Supplement #3"). In the petition, the Petitioners requested that the NRC suspend licenses Nos. DPR-59 and DPR-28 (hereafter, "the licenses"). the operating licenses for the James A. FitzPatrick Nuclear Power Plant (hereafter, "FitzPatrick") and the Vermont Yankee Nuclear Power Station (hereafter, "Vermont Yankee or "VY). The petitioners also requested NRC begin an investigation to determine whether the operating license for the Pilgrim Nuclear Power Station (hereafter, "Pilgrim), license No. DPR-35, must also be suspended.
On August 27, 2013 Entergy announced that it intends to retire Vermont Yankee, 1 citing essentially the same economic problems we detailed in our petition, as supplemented on April 23, 2013: sustained low electricity market prices and an operating cost structure that make the reactor impossible to operate profitably. Entergy said it plans to continue operating VY for up to 14 months, until its next planned shutdown for refueling in late 2014.2 Entergy's decision and information it has provided in its public statements confirm it is operating VY and FitzPatrick in violation of financial qualifications regulations. This development also reinforces the need to investigate Entergy's financial qualifications to operate Pilgrim.
Entergy... cntergy to Close, Dccommisston Vermont Yankee:* Media Release. August27, 2013.
http:/ I www.entergy.com/ news room/ newsrelease.aspx?NR ID 2769
' Ibid.
Petition for Enforcement Action on Financial Qualifications: Supplement #4 2
Prior to the VY closure announcement, on July 30, Entergy also announced company-wide layoffs of 800 employees, including 30-40 employees at each of FitzPatrick, Pilgrim, and VY.3 These developments reveal new concerns that NRC must include in its investigations and possible enforcement actions to protect the public and worker health and safety.
Summary Petitioners request that NRC adjust the scope of its review to incorporate new and emerging information arising from Entergy's VY closure announcement and the developing financial conditions confronting the licensees:
- 1. NRC must undertake an investigation into the safety-conscious work environment and the quality assurance and quality control programs (hereafter, "QAQC") at Vermont Yankee, FitzPatrick, and Pilgrim.
- 2. NRC's investigation ofEntergy's financial qualifications must include a detailed audit of planned and anticipated capital expenditures at each of the reactors, as well as a cost and amortization schedule for each capital project.
These emergency enforcement actions to be taken by NRC are necessary for the following reasons detailed herein:
- 1. Entergy's VY closure announcement and subsequent statements confirm that Entergy is not financially qualified to operate VY and FitzPatrick, and possibly Pilgrim, and indicates that the financial conditions under which the corporation is operating the reactors are worse than projected by UBS.
- 2. Entergy's intention to continue operating VY for more than a year is unprecedented and poses new and unreviewed risks to the public health and safety.
- 3. The succession of company-wide layoffs and the closure ofVY may have a chilling effect on the workforce at all three reactors, presenting an increased risk of cross-cutting human performance and QAQC issues.
' Smallheer, Susan. "Entergy Announces Vermont Yankee Layoffs." Barre Montpelier Times Argus. July 31, 2013. http:/ I WW\\\\,ttmesargus.com/ article/ 20130731/ NEWS03/ 707319895/ 0/ SPORTS
Petition for Enforcement Action on Financial Qualifications: Supplement #4
- 4. Entergy's announcement that it intends to continue operating VY for more than a year. and its uncertainty as to whether it will continue operating FitzPatrick and Pilgrim, raise questions regarding the implementation of capital upgrades and maintenance required to comply with NRC regulations and to protect the public health and safety.
- 1. Entergy's Recent Statements Confirm It Is Operating FitzPatrick, Vermont Yankee, and Potentially Pilgrim in Violation of Financial Qualifications Regulations, and Suggest the Plants' Financial Conditions Are Possibly Worse than UBS's Projections 3
In explaining the decision to close Vermont Yankee. Entergy confirmed that the economic conditions under which it is operating the plant violate NRC's financial qualifications regulations. Entergy's media statements highlight sustained wholesale market trends, the generating capacity of the plant, and the insufficiency of capacity market subsidies.4 While Entergy's statements affirm the validity of UBS Investment Research's analyses, they abo inJicate that the financial condition!> of Vermont Yankt:t: ma) be t:ven \\\\Or$e than projected by UBS. Entergy states:
As a result of this decision and based on continuing operations into fourth quarter 2014, the estimated operational earnings change, excluding these special items, is expected to be modestly accretive within two years after shutdown, and cash flow is expected to increase approximately $150 to $200 million in total through 2017, compared to Vermont Yankee's continued operation.
As referenced in the April 23 supplement to our petition, UBS has projected approximately $109 million in negative cash flow for VY in the 2013-16 time frame.
Compared to Entergy's estimate, UBS's projections equate to approximately -$100 million in cash flow from 3Q2013 through 2016.5 Ifcarried forward through 2017, then, UBS's projections would lead to an estimate of$140-$150 million in cash flow losses-up to $60 million less than Entergy itself estimates.
' Entergy Corp. **Entergy to Close. Decommission Vermont Yankee:* August 27. 2013.
http:/ I www.entergy.com/ News Room/ newsrelease.aspx?NR ID 2769
' Supplment #I, p. 3. http:/ I allianceforagreeneconomy.org/ sites/ default/ files/ 2206 FitzPatrick-Pilgrim-VY sup! O.pdf
Petition for Enforcement Action 011 Financial Qualifications: Supplement #4 4
At the very least, Entergy has confirmed the basic accuracy ofUBS's analyses of Vermont Yankee. This lends further credence to UBS 's analyses of FitzPatrick, and its concern about Pilgrim *s economic viability. If, however, Entergy's internal projections of cash flow losses for VY are up to 40% greater than UBS's, then the finances of FitzPatrick and Pilgrim may also be substantially worse than UBS anticipates. That means FitzPatrick's negative cash flow could exceed $190 million 2013-16, or well over
$200 million for the 2017 period Entergy estimates for Vermont Yankee.
Entergy initially attempted to allay concerns about the closure of FitzPatrick and Pilgrim in the wake of the VY announcement, though those statements did not have much substance in light of the economic realities. Furthermore, Entergy made similar statements in the months prior to the VY announcement, assuring the public that it had no intentions to cease operations. Entergy also initiated company-wide layoffs at VY along with the rest of the of the company's business units, though now it must begin efforts to retain staff until the plant closes in late 2014.
More recently, the tone of Entergy's statements regarding the position of FitzPatrick and Pilgrim have become increasingly non-committal and uncertain. Entergy has admitted FitzPatrick and Pilgrim are in financial distress, and it is continuing to cut costs.
including this statement on September 12:
"Our single-unit plants are challenged in New York and New England." in part because of low market prices. Mohl said.
He said the company was "working through the trou~h in the market" by implementing efficiency improvements at all plants.
Entergy followed this with similar statements affirming the fundamental economic problems confronting the reactors. Finally, at a New York State Hearing on September 30/ under direct questioning by Sen. Patty Ritchie, Entergy was asked about the reasons 6 DiSavino, Scott. "Interview: Entergy to keep other U.S. reactors running after Vermont closure:* Reuters.
September 12,2013. http:/
in.reuters.com article. 2013. 09 12 utilities-entergy-vermontyankee-
- d IN L2r-. OH 728U20 130912
' http:// www.nysenate.gov/ event/ 2013/ sep/ 30/ examine-and-analyze-pI an s-con tent ions-and-arguments-p ut-forw ard -relation-ind ian-po
Petition for Enforcement Action on Financial Qualifications: Supplernent #4 5
for retiring Vermont Yankee and its implications for FitzPatrick.8 Entergy not only repeated its view that FitzPatrick faces fundamentally the same challenges as VY, but further indicated that it is actively reviewing whether to continue operating FitzPatrick after the 2014 refueling outage:
We have announced and we did announce the day we made the Vermont Yankee announcement that we intend, we currently intend, to refuel FitzPatrick next October. But that is an item, quite frankly, we have to review on a regular basis.9 This latest statement indicates that the economic performance challenges of FitzPatrick have already crossed a level at which NRC should be concerned about the impact of Entergy's financial qualifications for nuclear safety. The fact that the licensee is in the process of reconsidering whether to close the reactor only twelve months out from refueling implies that ongoing maintenance and operation costs are under intense scrutiny. In addition, capital expenses related to the outage and safety-significant repairs need to be made imminently, including planning and capital expenditures for replacement of the main condenser, which is causing an increasing number of unplanned shutdowns and power changt:s.
In an April 2012 inspection report on FitzPatrick 10, NRC noted that Entergy planned a replacement of all condenser tubes during the 2014 refueling outage. However, in an interview with the Syracuse Post-Standard on September 29, 11 Entergy executive Bill Mohl backed off from that commitment:
The facility also is under pressure to replace its condenser tubes, which have leaked 16 times in the past three years, forcing the reactor to reduce power to make repairs. FitzPatrick had so many unplanned power changes during 20 12,
- Testimony ofT. Michael Twomey, Vice President of External A ITa irs, En tergy Wholesale Commodities.
Video record ofNew York State Senate hearing (at 1:18:50}: "Senate Standing Committee on Energy &
Telecommunications- 09/ 30/ 13."'
http:// www.youtube.com/ watch?v=D3n0J8c6130&desktop un %2Fwatch%3Fv%3DD3n0J8c6130&app-d esktop
- Ibid., at I :21 :24.
" Nuclear Regulator) Commission... James 1\\ FitzPatrick Nuclear Power Plant-NRC Problem Identification and Resolution Inspection Report 05000333/ 2012008." April23, 2012 http:// pbadupws.nrc.gov/ docs/ MLI2111 MLI2114A279.pdf
" Tim Knauss. "Central New York nuclear plants struggle to avoid financial meltdown." Syracuse Post-Standard. September 29.
http:/ / www.syracuse.com/ news/ index.ssf/ 2013/ 09/ oswego county nuclear plants struggle to avoid fi nancial meltdown.html
Petition for Enforcement Action on Financial Qualifications: Supplement #4 some because of condenser leaks, that it was placed under heightened oversight earlier this year by the Nuclear Regulatory Commission.
Mohl said Entergy is considering replacing the condenser tubes during the next refueling outage, which is scheduled for roughly a year from now. No final decision has been made, he said.
Entergy is clearly weighing whether to continue operations at FitzPatrick and whether to invest in the plant. This limbo is a public safety issue as key equipment goes unrepaired and unplanned power changes mount at the plant. The possibility that Entergy may decide to operate FitzPatrick for another refueling cycle by deferring capital expenses is precisely the sort of condition the financial qualifications regulations are intended to prevent. The possibility that Entergy may decide to operate FitzPatrick for one more refueling cycle by deferring capital expenses is precisely the sort of condition the financial qualifications regulations are intended to prevent.
6 These pronouncements make it imperative that NRC enforce the financial qualifications regulations to prevent the growing conflict between Entergy's obligations to its shareholders and the requirements under its Atomic Energy Act licenses to ensure the safe operation of these nuclear power plants. Entergy is clearly placing investor confidence and short-term economic concerns ahead of public health and safety, necessitating NRC emergency enforcement action under I 0 CFR 50.33(t) and 50. 11 O(a)(3).
l.a.
Applying UBS's Model to Pilgrim Suggests Substantial Free Cash Flow Deficits. Further, 2013 Performance Shortfalls Reinforce the Need for NRC to Investigate Entergy's Financial Qualifications at Pilgrim.
These developments reinforce concerns that Entergy is operating Pilgrim in violation of financial qualifications regulations. As UBS 's projections indicate, its Vermont Yankee analysis is based on a projected operating cost of approximately $50 per megawatt-hour (MWh), and its FitzPatrick analysis on an estimate of $48/MWh in operating cost for the slightly larger and younger reactor (838 MW and 38 years of operation compared to VY's 605 MW and 41 years). Pilgrim is closer in size and vintage to VY. at 688 MW and 41 years, but using an estimate of$49/MWh would provide a conservative estimate offree
Petition for Enforcement Action on Financial Qualifications: Supplement #4 7
cash flow. As detailed in the petition, market power prices for Vermont Yankee and Pilgrim are essentially equal if not slightly lower in the NEISO zones closest to Pilgrim, and the reactors operate on similar refueling schedules. 12 Utilizing uss*s calculations for Vermont Yankee and applying Pilgrim's generation capacity and the above cost rate estimate. the petitioners have constructed rough free cash flow projections for Pilgrim, which show potential losses on the same order as VY and FitzPatrick.
Pilgrim Nuclear Station Free Cash Flow Projections, based on UBS Model Year MWh CF Revenue Cost (SM) Free Cash (SM)
Flow (SM) 2013 5,311 88.1%
233 251
-18 2014 5,686 94.3%
249 270
-21 2015 5,443 90.3%
239 258
-19 2016 5,549 92.1%
244 263
-19 TOTAL 91.2%
965 1,078
-77 These projections do not include detailed estimates of tax-related costs for Pilgrim, but we do not expect that to introduce large inaccuracies. A substantial amount of the net tax liability for VY is the increase in the Vermont generation tax. which UBS estimates at $8 million/year, we adjusted for that by applying an estimated credit of$9 million/year, adjusting for Pilgrim's greater generation capacity. However, because we recognize the potential for inaccuracies, our intention in providing these estimates is to illustrate the basis for UBS's concerns about Pilgrim and to demonstrate the need for NRC to conduct a full investigation ofEntergy's financial qualifications the reactor.
What is more. Pilgrim is significantly underperforming relative to UBS's projections, due to both market price declines and significant shortfalls in production goals. Power prices in the New England markets appear to have declined further in 2013. Bloomberg reports average spot market prices in July 2013 in the $35/MWh, lower than the average annual price in 2012 but for a month when prices are generally highest:
" See petitions at pa11es 8-9.
PeJition for Enforcement Action on Financial Qualifications: Supplement #4 8
More retirements of single-unit reactors may be coming for Entergy and the industry, Julien Dumoulin-Smith and Andrew Gay, analysts for UBS AG, wrote in a research note today. Vermont Yankee's cost of producing power was probably about $50 a megawatt-hour, they wrote. Spot prices for on-peak rower averaged
$35.27 a megawatt-hour during the past month in New England. 3 Pilgrim 's 13% greater generating capacity compared to VY does not offset the 30-40%
difference between market prices and operating costs that have led to major cash flow deficits at Vermont Yankee. The decline in market prices is compounded by unplanned outages and power reductions, as a result of which Pilgrim has fallen far short ofUBS 's projected performance levels this year. 14 Pilgrim Operational Performance (January !-September 27, 2013)
Power Generation Number Equivalent Days Level of Days at Full Operation 0% (shut down) 65 0
1-50%
15 3.75 51-80%
15 9.75 81-90%
2 1 17.85 91-99%
42 39.9 100% (full power) 112 112 TOTAL 270 183.25 Using this information, petitioners estimate that Pilgrim operated at approximately 68%
capacity through September 27; even if the plant operates at 100% through the end ofthc year, Entergy would achieve a capacity factor of at best 76% for the year, or more than a 13% shortfall relative to the 88.1% capacity factor projection. Without access to precise outage dates and market price data, we are unable to provide a precise projection of revenue shortfalls, but it would be on the order of $30 million - increasing the projected
" Olson, Bradley. and Mark Chcdiak. "Entcrgy to C lose Vermont's Only Nuclear Plant." 8/oomberg.com.
August 27, 2013. http:/ I www.bloomberg.com/ ne'v s/ 2013-08-27/ entergy-to-close-Jts-vermont-yankee-nuclear-power-p ian t.htm I Burrell, Chris. "Shutdo ns could place Pilgrim nuclear plant" Hh undcrperformers:* Pam01-Lcdger.
September 28, 2013. http:/ I www.patriotled ger.com/ news/ x 1343100275/ Shutdowns-could-place-Pilgrim-nu clear-p Jan t-w ith -u nd erp erformers
f Petition for Enforcement Action on Financial Qualifications: Supplement #4 free cash flow deficit to nearly $50 million for the year, and raising total projected losses through 201 6 to over $ 100 million.
9 As at FitzPatrick. there is sufficient evidence to warrant concern that violations of financial qualifications requirements at Pilgrim are resulting or compounding safety problems. The performance shortfalls detailed above are related to an extensive record of safety-significant incidents and equipment-related outages and power reductions thus far in 20 13. Appendix I, "20 13 Event Reports and Equipment Problems at Pilgrim Nuclear Power Station." provides a record of such publicly documented incidents. We request that NRC incorporate data such as this into its investigation of Pi I grim's and FitzPatrick's financial qualifications to determine whether there is a causal or compounding relationship between Entergy's economic considerations and recent operational problems.
- 2. Entergy's Decision to Continue Operating Vermont Yankee Until 4Q2014 Is Unprecedented and Endangers the Public Health and Safety As detailed above, Entergy has all but stated that it would not be able to generate sufficient revenues at Vermont Yankee to cover the reactor's operating costs, which indicates that it is no longer financially qualified to hold the operating license.
Nevertheless, the corporation plans to continue operating the reactor until the fourth quarter of2014 (4Q2014). In September, Entergy modified its application to the Vermont Public Service Board to extend the plant's Certificate of Public Good until December 31, 20 14, suggesting it plans to continue operating VY more than sixteen months from the closure announcement.
Entergy avers that this decision was made to allow time to plan for cessation of operations and to prepare the necessary fi lings for decommissioning. Such an extended period of time is not necessary for those purposes, as evidenced by several other reactors which have ceased power operations in far less time following the closure announcement.
Most recently and significantly. Dominion closed the Kewaunee reactor six months 15
Wald. Matthe\\\\. **As Price of Nuclear l::nerg) Drops, a W1sconsin Plant Is Shut."" 1\\f!l, York Tunes. May 7, 2013. htto:/ I www.nytimes.com / 2013/ 05/ 08/ busmess/ energy-environment/ h.ewaunee-nuclear-power-plant-shu!s-down.html? r=O
Petition for Enforcement A ction on Financial Qualifications: Supplement #4 10 after announcing its intention to close the plant16 for the same reasons Entergy is closing Vermont Yankee. The Sacramento Municipal Utility District shut down the Rancho Seco reactor immediately, just one day after voters approved a ballot measure to permanently cease operations. 17 Public Service Company of Colorado initially intended to continue operating the Fort St. Vrain reactor another eighteen ( 18) months 18 after announcing closure plans, but was forced to retire it after only nine months due to continuing safety problems. 19 The eventuality of a licensee continuing to operate a fmancially distressed reactor for such an extended period of time after a closure announcement poses unprecedented threats to the public health and safety and must not be permitted. Entergy's decision is most likely based on its short-term financial interests rather than operational logistics.
Operating the plant through (and potentially beyond) the original fueling cycle allows the company to maximize the depreciation of its capital investment in nuclear fuel, and thereby reduce the cash flow deficit on its financial statements. This decision plainly puts profits and investor confidence ahead of the public and worker health and safety. despite the inherent danger in operating a reactor the licensee now has no long-term interest in maintaining..
Not only does the decision put plant managers and staff in the untenable situation of continuing to operate a reactor for an extended period of time in which the parent company will not invest in maintenance; Entergy will face increasing difficulties in retaining experienced and qualified personnel to ensure safe operation of the plant as Vermont Yankee employees seek out long-term employment opportunities.
" Dominion Corp. '"Dominion To Close. Decommission Ke\\\\ au nee Power Station:* Media Release. October 22, 2012. http.f I d om.med iaroom.com 2012-1 0-22-Dom in *on-To-Ciose-Decom miss ion -Kewaunee-Power-Station
" Wald, Matthew. '"Voters. in a First. Shut DO\\\\ n Nuclear Reactor... V£'1r YorJ. Times. June 8, 1989.
http ;,. www.nytimes.com/ 1989 06. 08 us1 voters-m-a-first-shut-<10\\\\ n-nuclear-reactor.html
Searles, Denis M. **Utility to l:.nd Nuclear Operations at Fort St. Vrain Power Plant." Associated Press.
Decem ber 5, 1988. http:/ I www.apnew sarchive.coml 1988/ Utility-to-End-N uclear-Operations-at-Fort-St-Vram-PO\\\\ er-Plant id-2a5996d 731bf983aeffibfb7200b5ebb5
" Kindelspirc, Tony. '"Colorado nuke plant at Fort St. Vrain had short, troubled ride." Longmont Weekly.
March 28.2011. http:/ I www.longmontweekly.com/ ci 17701792
Petition for Enforcement Action on Financial Qualifications: Supplement #4
- 3. NRC Must Investigate the Impact of Entergy's Financial Qualifications Problems and Actions on the Workforce and the Safety-Conscious Work Environment 11 NRC must also take enforcement action to prevent cross-cutting safety impacts on workforce morale and the safety-conscious work environment, including but not limited to the development of a chilled work atmosphere that would discourage employees from reporting and pursuing safety concerns. Prior to the VY closure announcement, the financial conditions of the three reactors were well-known enough to create public uncertainty regarding the future operations of the plants, regardless of Entergy's reassuring public statements. Entergy's assurances that it planned to continue operating the reactor might have buoyed morale, just as it boosted confidence among the general public about the reactor's financial condition. The succession of company-wide layoffs announced in late July and Entergy's abrupt change of position in closing VY creates a qualitatively different environment in which workers and the public may no longer be able to trust Entergy's statements.
Recent developments have amplified the uncertainty facing employees at FitzPatrick and Pilgrim and compromised Entergy's credibility even further. Given public knowledge of the plants' uncertain circumstances and Entergy's inconsistent and increasingly non-committal statements regarding the future of FitzPatrick and Pilgrim, workers may rightly feel that reporting problems that would induce or extend outages or power reductions and/or incur capital costs could directly influence Entergy's decision to continue operating the reactors. The real or perceived threat to employees' job security and that of their coworkers does not necessarily require explicit management actions or directives to have this effect; the fact that Entergy has just decided to close a reactor that is insufficiently productive, and that FitzPatrick and Pilgrim are known to be in similar situations. is enough to lead any reasonable person to suspect that further productivity declines or cost increases could lead Entergy to retire one or both of the other reactors.
Under these circumstances, the kind of communications routinely issued by management
Petition for Enforcement Action on Financial Qualifications: Supplement #4 12 encouraging workers to report problems may not be sufficient to convince employees that it is safe for them to do so.
Entergy's decision to continue operating Vermont Yankee for potentially another fourteen months poses similar, and in some ways more complicated, threats to workforce-related areas of nuclear safety. The certainty of plant closure and Entergy's statement that it intends to mothball the plant for up to 60 years under NRC's SAFSTOR decommissioning regulations guarantees VY employees virtually no long-term job security. thereby placing them in a position to begin looking for new employment. The safety-conscious work environment may be compromised due to Energy's decision not to invest in future operation of the plant and an implicit desire to minimize costs and outage time for the next 14 months. Furthermore, plant staff may be further disinclined to build a reputation as whistleblowers, whether because they would like to avoid being laid off or they are seeking employment elsewhere.
This condition is compounded by the potential for Entergy to lose a significant portion of the skilled workforce prior to final shutdown. This latter condition would most likely be felt among the most qualified ofVY employees and those in critical divisions and skill certifications, as they are the most likely to find quality longer-term employment opportunities. Had Entergy decided to operate VY for a much shorter amount of time following the closure announcement, as Dominion did at Kewaunee. these problems would not be as much of a concern. Thus, Entergy's violation of financial qualifications requirements are no less relevant at VY. and must be counted as a root-cause contributor to the kind of violations of plant staffing and safety-conscious work environment requirements that may reasonably be anticipated.
For these reasons, we request that NRC initiate an investigation into the safety-conscious work environments. employment patterns, and staffing levels at FitzPatrick. Pilgrim, and VY. Among the indicator data NRC should include in its reviews are the number of employees at each reactor, employee retention, skill and experience levels of the workforce, and changes in management at FitzPatrick and Pilgrim. Plant employees may
Petition for Enforcement Action on Financial Qualifications: Supplernent #4 13 perceive management changes as a precursor to a plant closure announcement, because it could appear that either Entergy is shifting into a decommissioning mode or that managers have inside knowledge and are leaving proactively. Because of the circumstances at these reactors, NRC must conduct an active investigation, including appropriately targeted and confidential interviews with Entergy employees and worker representatives, rather than rely on Entergy management to report to NRC on what it is doing to address these concerns.
- 4. NRC's Investigations Must Include a Detailed Audit of Anticipated Capital Expenses and Safety Upgrades As part of its investigation, NRC must include an audit of planned capital expenses at each of the reactors, including both site-specific items (e.g., condenser replacement at FitzPatrick) and those responding to regulatory requirements (e.g., compliance with NRC Order EA-12-050, Order Modifying Licenses with Regard to Reliable Hardened Containment Vents")20 and industry programs (e.g.. and implementation ofNEI-12-06,
- 'Diverse and Flexible Coping Strategies (FLEX)21. This is necessary to produce an accurate fiscal analysis of each plant in order to determine financial qualifications.
Additionally, it is necessary in order to ensure that the operators of each plant are complying with quality assurance regulations. NRC orders and other legal obligations to maintain the equipment in working order and perform required safety upgrades.
The audit must also include financing expenses and amortization schedules for each capital expense, as well as projected outages. power reductions, and revenue impacts associated with each capital project. That data will enable NRC to generate accurate free cash flow projections and analyze their sensitivity to market conditions and changing operational performance in evaluating Entergy's financial qualifications. Furthermore, this information will enable NRC to evaluate Entergy's capital investment decisions-
"' U.S. Nuclear Regulator) Commission. "JLD-ISG-2012-02: Compliance with Order EA-12-050, Reliable llardened Containment Vents... Ma) 29.201 2.
http:// pbadupws.nrc.gov/ docs/ MLI214 MLI2146A371.pdf
" Nuclear Energy Institute. "N El 12-06: Diverse And Flexible Coping Strategies (FLEX) Implementation Guid e." Au !!ust. 201 2. http:// pbadupws.nrc.go\\/ docs/ MLI222/ MLI2221A205.pdf
Petition for Enforcement Action on Financial QualificaJions: Supplement #4 14 and emerging equipment reliability needs and fiscal obligations-with respect to the I icensees
- financial qualifications.
The evolving situation at Pilgrim in 2013 is an important case in point: using UBS's model for generating free cash flow projections, Pilgrim's estimated losses would have been substantial (-$18 million). The unanticipated outage time and power reductions this year would increase that number by more than 150%, based on revenue losses alone.
However, Entergy may also be incurring additional capital expenditures in order to replace and repair equipment. The financing costs and amortization schedules for these investments would be born in subsequent years and may affect Pilgrim 's financial projections on a going forward basis, raising annual costs above and beyond what is included in estimates based on UBS 's model.
Conclusion For the above-stated reasons, and in light of the information provided herein, petitioners request that NRC expand investigations into Entergy's financial qualifications at FitzParick, Pilgrim, and Vermont Yankee to include within the evolving conditions affecting the operations of the reactors via the following:
I. Undertaking an investigation into the safety-conscious work environment and the quality assurance and quality control programs (hereafter, "QAQC) at each of the subject plants, namely Vermont Yankee. FitzPatrick, and Pilgrim.
- 2. Including a detailed audit of planned and anticipated capital expenditures at each of the reactors, as well as a cost and amortization schedule for each capital project.
We further reiterate our request that the financial qualifications regulations be meaningfully enforced at these reactors. In light of the financial stress at these reactors and Entergy's hesitancy to take immediate action to shut its plants that are not profitable, we urge the NRC to take enforcement action as necessary to protect public health and safety.
Petition for Enforcement Action on Financial Qualifications: Supplement #4 15 Jointly signed on behalf of the petitioners:
Timothy Judson Assoc. Director, Nuclear Information &
Resource Service President, Citizens Awareness Network 6930 Carroll Ave., Ste. 340 Takoma Park, MD 20912 (301) 270-6477 x14 timj@nirs.org
lsi---------------
Deb Katz Executive Director, Citizens Awareness Network P.O. Box 83 Shelburne Falls, MA 01370 (413) 339-5781 deb(a;nukebusters.org
/sf---------------
Jessica Azulay Organizer. Alliance for a Green Economy 20 13 E. Genesee Street
{315) 480-1515 Jessica@allianceforagreeneconomy.org
/s/---------------
Mary Lampert Director, Pilgrim Watch 148 Washington Street Duxbury, MA 02332 (781) 934-0389 mary.lampert@comcast.net
/sf---------------
Chris Williams President, Vermont Citizens Action Network P.O. Box 16 Hancock. VT 05748 (802) 767-9131 cevan@sover.net
4 I
Appendix 1: 2013 Event Reports and Equipment Problems at Pilgrim Nuclear Power Station I) 01110113 Event 4866422 SCRAM. Both recirculation pumps tripped.
- 2) 01112113 Event 4866923 Potential Security Threat reported.
- 3) 0111411 324 Bottom head drain valve leak
- 4) 01 /21/ 13 Event 4868525 Safety Relief Valve Leak.
- 6) 03/03/13 Event 48801 27 Scram Discharge Volume Valve declared inoperable.
- 7) 04/ 15113 Event 4892328 SCRAM. A manual reactor scram was inserted due to reactor pressure lowering beyond established control bands, \\\\hilc conducting a planned reactor shutdo\\\\ n.
- 8) 04/15/13 Event 4892429 Primary Containment Air Lock Failed Integrated Leak Rate Test.
- 9) 05/19113 Event 4905330 Fire in Turbine Building Lubricating Oil Room.
- 10.
05/23113 Event 49061 31 Primary containment declared inoperable during HPCI testing.
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" Mand, Frank. "PILGRIM STATION: Chronology of20131eaks, events." WickedLoca/Piymol.lth.com. April 20,2013. http:/ / www.wickedlocal.com/ plymouth/ news/ xl641167559/ PILGRIM-STATION-Chronology-of-20 13-leaks-events
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Petition for Enforcement Action on Financial Qualifications: Supplement #4 2
II.
05/23/ 13 Event 4906432 HPCI declared inoperable during post-maintenance testing.
- 12.
07/ ll/ 13 Event 4918733 Fitness for duty. Supervisor tested positive for banned substance.
- 13.
07/15/ l3 Event 4918934 Unusual Event declared. Loss control room annunciators.
- 14.
07116/13 Event 4919635 Salt Service Water system declared inoperable and due to high water temperatures.
- 15.
08/22/ 13 Event 4929636 SCRAM. Breakers tripped to all three feedwater pumps.
- 16.
09/03/ 13 Feedwater Pump Motor inoperable. Spare pump requires maintenance. Operated at reduced power from 08/3 1-09/08/ 13.3
- 17.
09/08/ 1338 Shutdown. Steam leak in feedwater system.
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" http:/ I www.nrc.gov/ reading-rm/ doc-collections/ event-status/ event/2013/ 20130712en.htmllien49187
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" http:// www.nrc.gov/ reading-rm/ doc-collections/ event-status/ reactor-status/ 2013/ 2013083los.html http:/ I \\\\ \\\\ \\v.nrc.gov/ read ing-rm/ doc-collections/ event-status reactor-status 2013 20130908ps.htm I Lambert, Lane. "~team leak forces Pilgrtm nuclear plant ofllane again." Patrt01-Ledgcr. September 9, 2013.
http:// www.patnotled ger.com/ top stones/ x 1281954414/ Steak-leak-forces-Pilgrim-nuclear-p lant-offiine-l!.W!l
Guzman, Richard From:
Sent:
To:
Cc:
Subject:
Attachments:
Dear Mr. Guzman,
Tim Judson <timj@nirs.org>
Thursday, October 17, 2013 3:59 PM Guzman, Richard jessica@allianceforagreeneconomy.org; deb@nukebusters.org; mary.lampert@comcast.net; paul@beyondnuclear.org; cevan@sover.net G20130211 - Supplement #4 to 2.206 Petition re: Immediate Action - Vermont Yankee/Fitzpatrick/Pilgrim 2206_FitzPatrick-Pilgrim-VY _sup4.pdf Welcome back to work. I hope this finds you well and that the shutdown was not too much of a burden for you and your colleagues. It's good to have you all back on the job.
The petitioners hereby submit the fourth supplement to our March 18 petition for enforcement action. I'm sure you have a backlog of communications and other work to get through, so I will follow up to direct your attention to it. In the meantime, please let me know that you've received it.
Also, the petitioners would like to know whether the shutdown is likely to affect the schedule for the review of our petition.
On behalf of the petitioners, Timothy Judson Tim Judson Associate Director Nuclear Information & Resource Service 6930 Carroll Avenue, Suite 340 Takoma Park, MD 20912 www.nirs.org 0: 301-270-6477 x14 F: 301-270-4291 E: timj@nirs.org 1