ML20206R272
| ML20206R272 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 09/13/1984 |
| From: | Woodfield T AFFILIATION NOT ASSIGNED |
| To: | |
| Shared Package | |
| ML17300A225 | List: |
| References | |
| NUDOCS 8607070104 | |
| Download: ML20206R272 (26) | |
Text
-. - .. - _ _ - - . _ .
1 l EXHIBIT , PPAW-1 Statistical Analysis of Capacity Factor Data Base I
i i
A Study of Nuclear Power Plant Performance Through 1983 i
j l
Power Plant Analysts Principal Investigator: Terry J. Woodfield, Ph.D.
l I -
i September 13, 1984
- 8607070104 860701 ,
PDR ADOCK 05000520
, p PDR
o ,
t
~
{ Power Plant Analysts Capacity Factors Analysis i
j Statistical Analysis of Capacity Factor Data Base 1~
- 1. Introduction The Nuclear Power Plant Capacity Factor Data Base supplied by Komanoff Energy Associates consists of 592 observations on 69 nuclear i
Power plants. The variables, measured for each plant are:
PNUMB - Plant Number MFRNUM - Manufacturer Indicator (Choices:.Sabcock & Wilcox,
- Combustion Engineering, General Electric, ,
i Westinghouse)
MW - Plant Capacity in Megawatts
- PROT - Prototype Indicator (This variable equals one if the j unit is the first of a set of multiple units and i equals zero otherwise)
) DUPE - Duplicate Indicator (This variable equals one if the
- unit is a duplicate of a prototype unit and equals zero otherwise)
J AGE - Age of Plant in Years I YEAR - Year of Operation
) SALT - Salt Water Cooling Indicator -
i POSTSG - Indicator for Westinghouse plants that operated for i a full year with new steam generators l , NEWSG - Indicator for Westinghouse plants during a year in
. which steam generdtors were being replaced
- TWOLOOP - Westinghouse plants of approximately 500MW
- TRILCOP - Westinghouse plants of'approximately SCOMW FOURLOOP - Westinghouse plants approximately 1000MW
- plus i both Indian Point plants l WQUAKE - Indicator for Westinghouse plants for years l shutdowns occured related to checking earthquake
! design factors l GILARG - General Electric plants approximately 1000MW GESMAL - General Electric plants approximately 600MW i
BFFIRE - Indicator for years of Ger.eral Electric operation that were disrupted because of the 1975-1976 i
Browns Ferry fire POSTTMI - Post Three Mila Island Indicator CAPFAC - Capacity Factor for the given plant operation year l From the above variables, the following variables may be formed:
AGE 2 - The value of AGE squared -
CODA - Commercial Operation Date (YEAR-AGE *1, or YEAR when
{ 'GE=1)
A
! BW,CE,GE,WH - Reactor Vendor Indicator for the four
- Reactor Manufacturers *
. OVER800 - plants over 800MW j OLDER 12 - Plants older than twelve years old
- . . . . - . . - - - . . _ . ~ . - . - . - - _ . - . . - . - . . . _ - - . . - - . .
t F
Power Plant Analysts Capacity Factors Analysis 1
l Using the Nuclear Power Plant Capacity Factor Data Base, two I statistical analyses were performed: a descriptive analysis indicating l the past and present relationships existing between capacity factor i
- and the variables MW, MFRNUM, AGE, and CODA
- and an inferential analysis attempting to model the relationship between capacity factor and the measured explanatory variables listed above.
- 2. Descriptive Analysis i
Table i summarizes various descriptive statistics for the entire Nuclear Power Plant Capacity Factor Data Base and for selected subsets of the data base. Table 2 summar1=es various descriptive statistics for capacity factors in the data base through 1977 to indicate changes i that hava occured since the 1979 PPA study. ;
l
~
- 1. Descriptive Statistics for. Capacity Factor Data l
l Plant Description No. of Obs. Mean Standard Deviation j i All Plants 592 58.77 17.62 i Plant sizes in Megewetta:
! 450-599 137 69.26 16.40 I 600-799 116 59.78 14.55 800-999 245 53.33 . 19.79 ,
- 1000*. 94 56.41 17.01 ,
! Reactor Manufacturer: !
)
, Sabcock & Wilcox 71 49.27 23.42 l
Coahustion Eng. 64 61.93 18.56
- l General Electric 213 58.15 16.10 {
) Westinghouse 244 61.24 18.45 l l l l l l 2. Descriptive Statistics for Capacity Factor Data through 1977 1 l
Plant Description No. of Obs. Mean Standard Deviation r
) All Plants 210 59.84 13.99 Plant Sizes in Megawatts:
450-599 65 68.89 13.03
- 600-799 52 60.60 11.84 800-999 71 54.50 15.34
! 1000+ 22 48.50 17.46 i Reactor Manufacturer: .
Babcock & Wilcox 18 60.17 12.14
- q. Combustion ~Eng. 19 55.58 21.77
! General Electric- 83 55.81 14.72
- Westinghouse 90 64.38 14.51 .
A descriptive analysis was also carried out to help det, ermine typical peak performance years for existing nuclear power planta.
Table i
i _. . _ _ ' _ . . _ _ _ _ _ _ _ _ . _____.l._.__._.____.... . . . . _ . _ _ _ _ _ _ _ _ . _ _ _ _ , , . . - . .
Power Plant Analysts capacity Factors Analysis 3 contains summary statistics from this analysis.
- 3. Descriptive Statistics Related to Peak Plant Performance i
Statistics for Age of Peak Performance Reactor Manufacturer No. of Obs. Median Mean St. Dev.
All Plants 69 5 5.38 3.20
- Babcock & Wilcox 9 5 5.11 2.93 Combustion Eng. 8 4.5 4.25 1.83 General Electric 22 7 6.45 3.36 l Westinghouse 30 4.5 4.97 3.36 i Plants >7 years old
! All Plants 48 6 6.46 3.07 Babcock & Wilcox 6 4.5 5.67 3.14 Combustion Eng. 5 5 4.4 2.07 General Electric 19 8 7.16 3.04
- Westinghouse 18 6 6.56 3.20 2 Plants >7 years old Peaks in last year deleted:
All Plants 43 6 6 2.89 Babcock & Wilcox 4, 4 3.75 1.26 Combustion Eng. 5 5 4.4 2.07 General Electric +- 17 7 6.65 2.78 Westinghouse -
17 6 6.35 . 3.18 1
l We have also included some graphical displays of the data in the l oppendix. The inferences obtained in the next section do not appear to contradict the observations made above related to the statistica cbtained.
i
- 3. Inferential Analysis -
i We performed a comprehensive multiple regression analysis on the Nuclear Power Plant Capacity Factor Data Base. We began by using a Ctepwise regression algorithm on the Statistical Analysis System (SAS) 4 4
based upon the MAXR procedure. This analysis allowed us to narrow the field of potential statistical models to be considered for predicting
- capacity factors for nuclear power plants. Table 4 below summarizes two of the better models found.
I i
- 4
' Power Plant Analysta ,
Capacity Factors Analyala
- 3. Regression Models for Capacity Factor 13 Variable Model 15 Variable Model Reg Reg Variable Coef p-value Tol Coef p-value Tol Intercept 40.743 0.0001 . 48.761 0.0001 .
AGE 3.938 0.0001 0.074 2.429 0.0047 0.054 AGE 2 -0.258 0.0001 0.080 -0.119 0.0843 0.047
. CE 14.508 0.0001 0.684 13.137 0.0001 0.670 1
WH 5.606 0.0031 0.508 4.526 0.0165 0.496 PROT 6.991 0.0001 0.693 7.314 0.0001 0.684 DUPE 11.311 0.0001 0.689 11.531 0.0001 0.680 i
POSTTMI -6.312 0.0003 0.579 -5.646 0.0012 0.569 SALT -4.021 0.0124 0.805 -3.911 0.0137 0.803
! NEWSG -29.219 0.0001 0.937 -28.594 0.0001 0.932 TWOLOOP 12.856 0.0001 0.559 9.050 0.0013 0.398 i 8FFIRE -39.325 0.0001 0.970 -39.719 0.0001 0.969 i WQUAXE -30.095 0.0001 0.961 -28.569 0.0001 0.957 GESMAL 13.864 0.0001 0.589 8.567 0.0042 0.401 OLDER 12 -18.357 0.0027 0.463 l
OVER800 -6.178 0.0039 0.383
)
l Summary 13 Variable Model 15 Variable Model F Value 16.827 16.212
- p-value 0.0001 0.0001 R-square 0.2746 0.2969 Adjusted R-square 0.2582 0.2785 Using the thirteen variable model, we obtain a prediction I equation for Palo Verde as CAPFAC = 58.784 + 3.938 CAGE) - 0.258(AGE 2), .
and using the fifteen variable model, we'chtain
~
CAPFAC = 61.6063 + 2.429(AGE) - 0.119(AGE 2) - 18.357(OLDER 12).
These models are formed by applying the appropriate values for the three Palo Verde units and averaging over the three equations produced. Because of the rather drastic drop after age twelve for the second model, we use the first model in our capacity factor pr'cyections for Palo Verde for the anticipated 28 years of plant life.
Using available knowledge in the area, we pro 3ect a linear decline cfter year 16. Unfortunately, there are not enough observations in the data base to substantiate this theory. Table 5 pro" ides the catimates for Palo Verde. These estimates are also illustrated in a
- 1gure in the appendix.
1 il
_4 _
j Power plant Analysts Capacity Factors Analysis I
- 5. Capacity Factor Pro]ections for Palo Verde Age Quadratic Model Quadratic Model with Linear Decline 1 62.46 62.46 2 65.63 65.63 3 68.28 64.28 4 70.41 70.41 5 72.03 72.03 6 73.13 73.13 7 73.72 73.72 8 73.79 73.79 9 73.35 73.35 10 72.39 72.39 11 70.91 70.91 12 68.93 68.93 13 66.42 66.42 14 63.40 ,
63.40 15 59.86 59.46 16 55.41 55.41 17 51.25 53.25 18 46.16 50.64 19 40.57 44.11 20 34.45 45.54 21 27.83 42.97.
22 20.68 40.41
. 23 13.02
- 37.84 -
24 ,
4.85 35.27'
- 25 0.00 32.70 26 0.00 30.14 27 0.00 27.57 28 0.00 25.00 I
- 4. Conclusion While capacity factors have improved somewhat for larger reactors in the last five years, there is still strong empirical evidence that large reactors cannot maintain the high capacity factors obtained by come smaller reactors. Furthermore, mean capacity factors in the 70's projected by some utility companies have yet to materialize.
The eatimates by the NRC and others that plants will have years of peak performance around year fifteen of commercial operation have also not been substantiated by empirical evidence. On the contrary, available data indicates that peak plant performance will occur on the ove.? age between years six and eight of commercial operation. We chould note in the exploratory phase of our study, over fifty regression models were fit to the data in an attempt to detect (1) linear growth or decline patterns, (2) quadratic growth or decline patterns, (3) logarithmic or exponential growth or decline patterns, cnd (4) combinations of the first three patterns with respect to l
increasing l
-D-
Power Plant Analysts Capacity Factors Analysis plant age. As we indicated, a quadratic model provided the only successful fit, however the tendency was for models forecasting a peak to forecast the peak performance age in the vicinity of year seven.
Hence, there is a substantial amount of statistical evidence to supprt the hypothesis of peak plant performance averaging about age seven.
Using the data base to help make projection about the Palo Verde Nuclear Project being funded in part by Arizona Public Service, wa
! have provided a reasonable set of forecasts for the first sixteen years of operation of Unita 1-3 and have permitted two competing sets of forecasts for the remaining expected years of operation.
, The purpose of this study has been to provide a realistic picture of nuclear power plant performance using available data through 1983.
- The authors are indebted to Charles Komanoff and John Plunkett of Komanoff Energy Associates for providing the data and for making useful suggestions pertaining to the statistical analysis of the data.
However, any mistakes that may have been made in this study are solely the responsibility of Power Plant Analysts.
k 1
a 9
i 1 e J
l I
i 1
i
- l I
_.__...._._.-___<._..__~._..m.. ..-. ._. s . . _ _ .- . _ _ - . .____-._.._..u . . . .
Power Plant Analysts capacity Factors Analysis APPENDIX List of Figures
- 1. Reactor Vendor Mean Capacity Factors
- 2. Reactor Vendor Mean Capacity Factors Prior to 1980
- 3. Reactor Vendor Mean Capacity Factors Prior to 1976
- 4. Capacity Fuctor Means by Size Classification
- 5. Capacity Factor Means by Size Prior to 1980
- 6. Capacity Factor Means by Size Prior to 1976
- 7. Capacity Factor Means by Age S. Capacity Factor Means by Age Prior to 1980 ,
- 9. Capacity Factor Means by Age Prior to 1976
- 10. Capacity Factor Mean by Age of Plant
- 11. Mean Capacity Factors by Year of Commercial Operation
- 12. Palo Verde Projected Capacity Factors e
e S
e b
e
~
c e c,1v , cree e .s ev ce .
- cie cirv , cree .. s ev ice e ,e,se ,eeo ..
!!!!!l g! l l mew nurm uns
~
A 1 . .
l
! CAPACITY FACTOR MEANS BY AGE PRIOR TO 1976 '
c.,,.c i
to 2 - ~
I 10 -
(
i l l l l i i j so !
l ,
l
) !
40 a l
l I so a
- ..= ,
, M .
, 2 s i 4 s 1 a l
l not er nawi in venas i
- i
i , ,
i -
i i
{ .
CAPACITY FACTOR MEAN BY AGE OF PLANT
! ne" -
i 90 -
I 2
i 6C 10 i
'j so j
.j 60 i
l
[ 40 m
! 20
) 20 -
i io i
i
- a l e i 3 4 s s 2 -e e is n is n i4 is is j act or rinar in vraas
) .
l
_, -_Aa.-- a ,s.- g 2 a 4_.- A,.- ., . ;--er=a. . -m-.m. s,so.m..g am, -
.a -y,m.-
. mA a ,m a wa -,.4+we,.wwm..r-mw.,aygew-agg,p,. g- mMymm.g,.g-jJg g y .g. 4-J 4 , b
- m
- I &
l e
D v
I e a
I 1
e A
4 J
G
===,=== =JWWWWWWWVWWL= =#." " === ."# - --- ------- g i
g 4
-m.
"_"_ "_"_"_"_"_"_"_"_"?_-*-m--m---
m m---------- #WWWWW-i I
f f
1 i
s 4.I NEJ 6 E -- -E m EE[m -m-[m -E EE - - - - - - - - - - 2 p e
aM K-MM --- -
,l EM-Mm M-MMM-M-M-M-dM__-
MMM MMM MM
M--MM--M-S-M-M-Y-M-M-M-M-M-M-MMMM MMMM MM M
M MM M M
M9-_-MMMM
_M-MM-MM-9-MM-M-M-M-M ]
M -
mM-MMMMMYM__MMMMM_m_- MM_=__M__M__M____M_
O
, g, ___
t M" " -_='M"_ JWWW.=_M=. M
,M_M _--- -
- -. . , .u 1 - - - -
- - - M p M-
..___ ____ - _ - _ - _ __ -_-m-j m__-_____-- _ ____ _ _-_r"WN-.L-__-__- _-__
Cz.
1 3
N b
mi-EE--i-EEE--W
- - M W E[E---E W iii-i-i[EEid U
M mMM M M-M MM-M-M,-MMM-M----------,
-Mm-m- p g E
-_-M- __-9-MMM
- M MM MM-MM- -M-M-MM M
M 9MMM 9 MM y
1 0
- 4, a
. . -.--- --. o-M-------n.= ..- . m .....W. m. m. m .m. m.m.. - - --
M---g--
9 i ,
- B.-9-M-M-M-
- -- - M2 4 -
___M_=_= = _ - _ - _ _ _ - _ _ -- _ - _ _ =-_= __
K--- M 9M--
m==__-=_____-==_-=_=_==_=_-_=
M 9- M---M M M 1.
i 4 2 .
K-M9MM M-M--- Y MM MMMM
M-MMM--2
--M--------M-M---
E MMM MM MM
- p 6 MM
_ - _ _ -M- _ - _ _ _
--- _--- _ _ , _ _ -_ - _ _ _ - - _ - _ _ _ _ - _ -- _ - _ _ _ -MM-_ - _ _
-J 2 - -- M.- -M - - - m- -
E M-Mm MM-MmM-M- 0M hm mm- g e
- MMMM-
- ".'
- :::::: " ":: "::: " " " "M"::,":,"JWM%" " "M:::M":J': ":::: ":: ": '::,
-M- M-M-MMMM MMM kM---W M-- -9MM---1 i
e e
E -- -- --
g y =- -- --m
- M-- --M , , *M,m , - ,
N
-Mm---m-2-1 p-M- - --M 0
-___,-_____,___-___m__--- __________-W, - _ _ ____ _ _ _
3 l
1 t
1 m 4
1 i l
I U
- 4, ,. ... . , . ... . , . , . , .
8 O O O O O e S I
w e to wt w e ee e.
E I
. - . -. - ~- .. - - - . - .--_. - . - - . - . - - _ -_
i it j i< l I!l ,,I i, l l l' l
. - , 1
_2
.' . 5 2
, 3 2
S ,
, 4 R -
. _ 2 O
T -
C _
A -
, 9 1
F _
Y T
I
- a
, l C '
_ i A - _
P _
A C , E
_ l D _
t E _
o n
T _
C , 3
_ 1 E _
J _
O R _
P , l l
E _
D _
R
, S E ,
V _
O ,
L ,
1 A .
P _
6
, 3
,l
- 2 2 - 2 2 i i 0 0 i i -
0 0 0 0 0 0 o 0 0 9 6 1 6 5 4 3 0
1 t 1 CAPAClI1 FnCT0R
O O EXHIBTT M l
l The Phoenix Gazette CD Fri.. Oct. 3.1980 0-5 Palo Verde Safe -
If ARS Pledges '
Kept, Report Says "The Palo Verde Nuclear Generating Sthtion can be operated safely and reliably if the project is completed as planned and commitments made by APS are fulfilled."
This is the main conclusion contained in the final report of a 14. member task force formed by Keith L Turley, president and~ chief executiye of Arizona Public Service Co.
The utility is project manager for the thr'ee. unit power plant under construction 50 miles west of Phoenix.
Highlights of the task force's findings include:
MANAGEMENT' - APS and the other project participants have an effective organiza.
tional structure for the management of design, engineering, construction, quality assurance and operation of Palo Verde.
DESIGN - Review of plant design reveals no
-major deficiencies. While some modifications of the Palo Verde design were recommended as a result of the Three Mile Island investigation, it was concluded Palo Verde is less susceptible to the events that initiated and escalated the. TMI accident.
OPERATIONS - No significant changes 'are required in APS staffing policies. . .
The task force recommended among other things, that top APS managem,ent prepare a comprehensive policy statement on the safety and i
reliability of the Palo Verde plant for further . .
dissemination. ; :.
Turley said "we intend to follow up on the' task )
force's recomm, endations for actions to be taken and further investigations to be made. I ani s'ure that the result of (its) efforts will be an even safer power plant when the first Palo Verde unitrgoes mto operation in 1983."
- - - - . _ .- - . - - _ . - - - . ~ - ~ . - =.-- = -- - -
. _ . ~~
EXHIBIr N_
l APS NUCLEAR VS APS CORPORATE Policies and Procedures I. History of Nuclear Procedure Development and Use I
j APS Corporate Policies and Procedures have been developing for a good
' number of years and dealt with subjects generally of broad company concern on an as needed basis. As activities became a problem of -
j general concern they were written up in Policies and Procedures and distributed throughout the compcny to be used by those who felt it covered their needs. As time has passed the number of procedures has grown. These .early policies and procedures dealt with activities such as accounting procedures, customer billing and information, stockholder records, transmission and distribution activities that were the bulk of APS business activity in earlier years.
i As . power plant construction, operation and maintenance became more significant, a need to cover those activities developed. The advent of J
participation projects lead to Engineering and Operating Committees.
Practices and procedures were developed within those committees. E&O
' Committee Practices and Procedures were again developed to . deal with problems as they arose, on an as needed basis. These E&O Committee Practices and Procedures did not attempt to pre plan and do4ument all manner of possible activities that might arise from plant operation.
Power plant related policies and procedures dealing with administrative .
control of many activities including interfaces on technical activities were never heavily incorporated into the APS Corporate Policies and Procedures. *
'In 1972, APS began to develop the Palo Verde Project under one organizational unit called Nuclear Services. In 1973, Bechtel was hired to do most of the detailed nuclear project work under the direction of Ed Van Brunt and the Nuclear Services Organization. Bechtel had their policies and procedures and the Nuclear Services Department began developing their procedures for overseeing the Bechtel work. Little additional procedure development was necessary for the APS Corporate Policies and Procedures Manual except for a few related primarily to handling and accounting for money.
As the nuclear project develope'd toward further the start of construction phase activities, the APS nuclear related organization grew. Nuclear Construction Department and Quality Assurance (QA)
Department came into existence.
Nuclear Services became Construction Projects and then Nuclear Projects Management covering engineering, construction, QA, and eventually Records Management Departments. Each of these departments began to develop their own set of department procedures which were never reflected or fully recognized in the APS Corporate Policies and Procedures Manual. '
l
[
l f .
i . - _ - . .
._ ..__.___._~__.-_.m...._--.._.______.-__.m..z_ --
- l .
- I APS NUCLEAR VS APS CORPORATE Policies and Procedures I. History of Nuclear Procedure Development and Use (cont'd)
As the Nuclear Project went further toward completion of constructio.4, the APS Nuclear Operations organization began to staff and develop with
- several internal departments within the Operations Group. Ac this nov Operations Organization began to develop, almost independently of the existing Nuclear Projects Group, they began to see the need for a set of policies and procedures to document how the operation of the nuclear plant (now known as the Palo Verde Nuclear Generating Station) would be accomplished in compliance with NRC Regulations governing operating plants. This sort of documentation is required by federal regulation for nuclear plants in order to obtain an NRC Operating License (s) for
, the station.
Briefly the APS Operational Procedure development-histo.y y. m eded as follows:
i A. Little understanding was initially available at the corporate office of Administrative Controls, necessary to operate a nuclear station.
e B. " Decision" was made on perception allowed to exist that the station
, would have all needed support on site (including amplifying administrative controls). ,
C. Palo Verde operating management developed controls and management philosophy over several years, that were to develop the ability to operate without support from the rest of Arizona Public Service.
D. Operating organizations were developed and- staffed with the
" understanding" that they should be able to fulfill all the
- necessary actions to achieve their organizational E ction
- independent of other APS organizations.
E. Administrative controls were developed (Station Manual) that communicated in an offical manner that Palo Verde would be operated independent of other APS organizaitons.
, F. Concurrent with D. and E. the project organization grew and '
developed organization and " Administrative Controls" which supported project activities. Many of these project activities had a similiar-activity which will be needed during the operational phase.
G. Organizational awareness and sense of urgency grew with regard to the fact that operations was making long term plans to take over control of functions which had besn historically controlled by management within the project team.
I h
4
, - - , . , , , - - - . . _ . , .* . - - - - - _ . . - - _ . _ . . . _ _ _ _ _ . . . _ _ , . _ _ , , . . ,,,,,,-,,,,----,n,--g,..,m-,m - - , ---m e
.. =- w -- a - : . : . . = . -
-..:_-__=
I l
APS NUCLEAR VS APS CORPORATE Policies and Procedures 1
H. Corporate Nuclear operations " philosophy" changed with the hiring of C.C. Andognini. Basically, before the site people had felt they would be independent of offsite interfaces and after, they felt their role would require more accountability to offsite management.
I. Offsite nuclear operations management did not feel it could control activities . and administrative controls outside of nuclear operations. Administrative controls continued to be developed which were redundant to controls in the projects areas. Nuclear Operations Management developed controls which amplified APS Policies and Procedures and defined the mechanism for satisfying the needs to have accountable methods to meet Regulatory' Requirements.
J. Because of growing awareness af cost, political and regulatory
-- climate, APS management began to more closely scrutinize the .
administrative and organizational redundancies and inefficiencies. ,
l K. To this point, individual third level division heads (Department Managers) have continued to develop and implement " Administrative Controls" which employees perceive as APS direction on how they should do their job. Since no guidance was issued clarifying organizational relationships between the third level division head level departments and the Corporate Policy and Procedure level the v61ume of guidance issued now would indicate to the employee that
, most guidance (with the exception of the Station Manual) is issued from the management level, two or three levels below the Executive Vice President, (that is at the Department Manager level).
! II. Existing Manuals Related to APS Nuclear Activities As the situation now exists on the nuclear side of APS, numerous Policy and Procedure Manuals of various types exist. Currently identified examples are (this list is not all inclusive):
- 1. Nuclear Projects Project Procedures Manual (Engineering).
- 2. Nuclear Construction Proceduces Manual. -
- 3. Records Management Procedures Manual.
4 APS Quality Assurance Manual for the Design, Procurement and Construction of the PVNGS.
l 5. Corporate QA Department Procedures Manual.
I
- 6. Construction QC/QA Department Procedures Manual. l
- 7. Startup QC/QA Department Procedures Manual. !
- 8. Quality Systems and Programs Department Procedures Manual.
- 9. Operations Quality Assurance Criteria Manual.
. . _ _ - . _.,v. , - , ,. ~ ,m, . __ . _ , , - - - , - _
~_n-~~- ,- -_c .~...- ~ .~ ~ . _ -. - ~ , .. _ -
l i
I APS NUCLEAR VS APS CORPORATE Policies and Procedures II. Existing Manuals Related to APS Nuclear Activities (cont'd)
- 10. PVNGS Station Manual.
- 11. PVNGS Plant Policies and Plant Rules Manual.
- 12. Nuclear Operations Support Department Procedures Manual.
- 13. Nuclear Operations Licensing Department Procedures Manual.
- 14. PVNGS Emergency Plan and Implementing Procedures.
- 16. APS Corporate Policies and Procedures Manual.
- 17. A list of some 14 manuals maintained with APS Accounting Department.
- 18. A set of procedures is in development for the Administrative and Technical Services (A&TS) departments.
This list could go on further.
III. Concerns that Now Exist Regarding Policies and Procedures A. Since there is no guidance (other than verbal) given regarding the relationships between administrative controls within the Station Manual and outside the Station Manual, room for error or controversy exists regarding what guidance takes precedence or represents APS Policy. Where the ~ guidance is issued from two different groups oul: side the staion this room for error is even greater. Error in consistency'of execution in these administrative areas would result in fines or delays in receiving the operating licenses.
B. Redundancy in administrative controls is indicative of the lack of management understanding of who has lead responsibility for activities. This lack of understanding has led to redundant staffing and unnecessarily exaggerated operating budget projections. l C. As APS Corporate Personnel have gained understanding of the scope of the activities needed to support Palo Verde, there is less
{
organizational willingness to decentralize these activities and l therefore erode the existing relationships with regard to !l organizational responsibility.
D. The Nuclear Operations organization does not have confidence that existing APS management systems outside the. Station Manual will support the activities necessary to operate PVNGS.
E. American National Standards Institute (ANSI) Standard N18.7-Revision of 1976, titled " Administrative Controls and Quality Assurance for the Operational Phase of Nuclear Power Plants", paragraph 2.2 '
Glossary of Terms defines:
instruction's',
Administrative Controls -
Rules, orders, procedures, policies, practices and designations of authority i and responsibility. -
- t
- l 1
i
-. - . _ , _ _ _ _ . , . _ _ . . - _ , . _ _ _ _ _ . _ _ _ _ . _ _ . - , _ _ . _ _ _ _ _ - _ _ _ _ _ . . . . , _ , _ _m.,-.--.__
. ~ - _- =_- ~ ..=.-.-. w ..=.- . -----.=-----------.=x- .
/
i APS NUCLEAR VS APS CORFORATE Policies and Procedures III. Concerns that Now Exist Regarding Policies and Procedures (cont'd)
E. (cont'd)
That Standard in paragraph 3.2 states in part:
" Lines of authority, responsibility and communication shall be.
established from the highest management level through intermediate levels to and including the onsite cperating organization (including those 'offsite organizational units assigned responsibility for procurement, design and construciton, quality assurance, and technical support activities). These relationships shsll be documented and updated as appropriate...."
This paragraph further states:
"In structuring the organization and assigning responsibility, quality assurance should be recognized as an interdisciplinary function involving many organizational components and, therefore, should not be regarded as the sole domain of a single quality assurance group."
There is concern that APS documented Policies and Procedures do not
~
separately or collectively meet the intended requirements of ANSI-N18.7. This relates further to other regulatory guidance and technical specifications.
F. The NRC, Inspection and Enforcenent Division has its own set of Procedures (called Inspection Modules) that identify concerns that their personnel should explore during their review for preparedness
, (offsite) for Operations. These identify a concern for clear cut definition of authority and responsibilities between support functions (departments). This includes reference to ANSI-N18.7 and other Standards and Regulations. There is concern about whether APS is ready to sucessfully pass such an inspection.
G. Various issues have been identified concerning personnel policies and cost reporting policies at PVNGS that are not consistent with APS Corporate Policies. This is of great concern to other Palo Verde participants thru the Audit Committee.
I IV. -Benefits / Risks of a Separate APS Nuclear Policies and Procedures Manual vs APS Corporate Policies and Procedures Manual.
There would appear to be several options available to APS regarding Policies and Procedures (P&P) Manuals: .
- 1. Continue as we are now with an APS Corporate P&P Manual .ind a collection of various other Department Manuals.
i
-_, . -_. .- . -, , - . ~ -
s ..
e APS NUCLEAR VS APS CORPORATE Policies and Procedures IV. Benefits / Risks of a Separate APS Nuclear Policies and Procedures Manual vs APS Corporate Policies and Procedures Manual. (cont'd)
- 3. Develop a separate APS Nuclear P&P Manual that incorporates applicable APS Corporate P&P (project currently in early stages under the guidance of the A & TS Department).
! 4. Develop APS Nuclear Administrative Controls manual that is in
- addition to the APS Corporate P&P Manual.
Af ter considering options 3 and 4, for a while it is concluded' that within a moderate span of time and effort these two would become in
- effect, the same end result.
~~ '
Considering the three options remaining:
'l. Continue as we are now: .
Benefits: -
- a. Allows maximum organizational and functional flexibility for future growth since many issues and assigned roles are not defined.
- b. Probably promotes a perception of greatest possible future upward mobility and thus promotes a more subtle work force (less turnover).
l Risks:
- s. Lack of overall control may cause inability to license PVNGS for operation or possibility of regulatory fines subsequent to licensing for inadvertent failure to meet specific detailed requirements.
- b. Redundant controls could result in higher operating costs, organizational inefficiency and possible fines and perhaps even shutdown of plant operations due to inconsistent management control.
- c. NRC might force APS in some dramatic way to change its administrative controls and thus APS would lose control of its own sanagement process. (Recent regulatory actions are an ,
example-such as Commonwealth Edison at its Byron Stations.) '
f f
l l
_ ,, r. * .,
APS NUCLEAR VS APS CORPORATE Policies and Procedures IV.
Benefits / Risks of a Separate APS Nuclear Policies and Procedures knual rs APS Corporate Policies and Procedures k nual. (cont'd) l Considering the three options remaining: (cont'd)
Comment:
There is no black and white definition of what precisely is needed to satisfy NRC Regulations and current concerns. They will not give a utility directions of how to do something but if they are dissatisfied occur. they will just wait to react to problems as they The past TMI concept appears to be. that utility management
- must realise that operating a nuclear plant is not just business as
. usual (as it used to be in fossil).
- 2. Upgrade existing APS P&P k nual to cover all nuclear needs:
Benefits:
a.
The existing manual status is established and rather well accepted.
b.
The requirements established would be uniform for all APS including nuclear.
l ,
Risks: .
)
a.
To revise existing P&P at a rate necessary to support PVNGS I Operation could force dramatic upheaval in APS non-nuclear organization by forcing nuclear related changes across the board.
3.
Develop separate applicable: APS Nuclear P&P incorporating Corporate APS P&P as
- Benefits:
a.
~
We can proceed with a P&P hnul project that has a fairly definable scope and develop a clear, concise optimized product for APS . Nuclear. This would appe,al to nuclear regulators and i probably present a better organized business laage to Arizona's Corporation Commission.
- b. Changes to the APS Corporate P&P Manual are not needed immediately and could be done in an optimized and more !-
and less dissruptive manner. logical s !.
P*
- n.
! IV l e'
. - . . . . _ . _ - _ ~ . _ . _ . . _ . - . - , _ _ - - - -
7_
s ,.
- y. .. .
APS NUCLEAR VS APS CORPORATE Policies and Procedures IV. Benefits / Risks of a Separate APS Nuclear Policies and Procedures Manual vs APS Corporate Policies and Procedures Manual. (cont'd) ,
- c. Unnecessary details regarding the controls that are needed to embrace the Nuclear Operation supporting activities are not communicated to non-nuclear APS organizational units and so will cause less disruption of normal existing activities.
- d. Having all of the APS Nuclear Departments closely involved with the creation of the new APS Nuclear P&P Manual will make them s more familiar with its content and. intent, resulting pride of authorship will help them relate to and identify with its concepts better and thus adherence to the new manual Policies and Procedures should be better than past performance.
The existing APS Corporate P&P has suffered from the reverse of o the above because it is poorly controlled, poorly distributed and somewhat perceived as non-applicable trivia that someone is trying to shove down the Nuclear Or'ganization's throat.
~
- e. A complete concise business and' regulatory position for nuclear
- activities is developed.
Risks:
- a. Corporate APS (non-nuclear APS) people perceive that the nuclear organization and nuclear personnel are receiving special (better) treatment.
- b. It will take longer for Corporate (non-nuclear) APS to get any i beneficial feedback from nuclear activities (up to seven years l longer) because these groups will feel nuclear P&P are too complicated and they will not wish to identify with or learn the details of nuclear activities.
V. Conclusion .
Due to legalistic regulatory laws, requirement and guidelines as well as regulatory agency undocumented concerns of an administrative, technical ;
and even political nature; auch more of a utilities nuclear activities must be controlled in a formal and documented fashion than. has ever been .
the case for transmission, distribution or even fossil generation related activities.
-_ _ - _ . ~_mm.,._.%._..- .m m_.,_._.-.__==_______.__.._ . . . . . . . _ _ _ ,
, .c-4 APS NUCLEAR VS APS CORPORATE Policies and Procedures i
V. Conclusion (cont'd)
Most of APS Nuclears staff's previous experience base is of a " pre-THI mind set" orientation and perhaps does not readily identify with the degree of " Upper Management involvement in. detailed decision process" concepts that have resulted from the Kemeny Consission and the " lessons ,
i learned" attitude that resulted from that accident. Beacuse of these factors as well as the need to fully and clearly comply with the letter and intent of regulatory requirements and because Palo Verde will be under much closer review form a proper business practice and cost ;
effective management point of view by the Arizona Corporation Commission as it approaches operation, we recommend that APS develop a separate APS-Nuclear . Administrative Policies and Procedures Manual to function in harmony with the PVNGS Station Manual ,
If we attempted to stay as we are with APS Corporate Policies and Procedures plus the Station Manual and a large array of separate Department Procedures Manuals representing collectively the APS Policies and Procedures for Palo Verde it is doubtful we can get an operating license or avoid with reasonable probability future regulatory fines.
- I l
.no .
O p
l l
~9-4 l
J 1
'We M/* the r/% 'UJp.Af Babbitt testifies on nuclear'-plant licensirig Careless reactor management, achieved a culture of technical excellence," he said, the personnel operating the reactor know what they
. "Too many nuclear utilities still operate in an are domg.
nOt d8 sign, ,ch. f sourceie of risk, environment or technical indirference and careless Babbitt was called herore the nuclear regulation management. It is the careless management, not subcommittee because of his experience with a H AnneQ.llo udmhiiewas.hingt nBureau reactor (ksign, t at is the chief source of risk in the commission that examined the nuclear accident
"#*"""" #* incident at Three Mile Island, near liarrisburg, Pa.,
I WASillNGTON - The federal government .
should verify that management of proposed miclear. The gomnor sa,di one. step h.eensmg would be and because he served as the former chairman of the power plants and the teams chosen to operate them reasonable for the des,ign phase of a nuclear reactor. Nuclear Safety Oversight Committee, a presiden. .
are competent before permitting the plants to But, he added, the failure of the bill to address t,he tially oppomted panel.
operate, Arizona Gov. Bruce Habbitt told a Senate level of management competence and the expertise Sen. Alan Simpson, H-Wyo., subcommittee panelThursday. "I .the , personnel who run the reactor makes the chairman, told Babbitt that he would consider his Ilis testimony came before a subcommittee of the legislati n unacceptable. recommendations when the panel reworked the Environment and Public Works Committee, which Habbitt proposed that the legislation he altered legislatmn to reform the nuclear. licensing proce-
. is considering legislation that would authorize one. to require the Nuclear Regulatory Commission at dure.
i.tep licensing of nuclear. power plants. the beginning of the licensing process to determine After the hearing Habbitt said the Palo Verde Habbitt said legislation pending before the panel whether tha utility "has the management strength Nuclear Generating Station, which is under con.
fails to distinguish the major differences between and techmcal compete,nce to even enter mto the struction 50 miles west of downtown Phoenix, has licensing the reactor and licensing the utility that nuclear. licensing arena. received the " highest marks" from the Nuclear will operate the reactor. In addition, llabbitt said, before the plant is Regulatory Commission for the way it is being built ;
"The plain fact is that nuclear utilities have not allowed to operate, regulators should be certein that and managed.
i l
o i E-*
s Cf3 H
Z
\
_ _ _ W
3 -
, EXHIBIT P
$ r ftCEIVED
, tj.D.
5
\/
\] ,/
Arizona Nuclear Power Project P.o sox sh e PHOENIX. ARIZONA 85072. I 35 Un 34 P!!12 r August 29, 1985 ,.
Gif Mr. John B. Martin, Regional Administrator ANPP-3327{- '
Office of Inspection & Enforcement U. S. Nuclear Regulatory Commission, Region V ,
1450 Maria Lane, Suite 210 m q Walnut Creek, CA 94596-5368 h () ~ _ ,.2 Attn: Mr. Dennis Kirsch 5'ubject: Improvement of Palo Verde Unit 1 Operations File: 85-008-419 l
Mr. Kirsch's letter to me dated August 14, 1985 identified the need to carefully review the results of the operational readiness review conducted between May 25 and June 5. Mr. Kirsch's letter also identified the need to devote greater attention and, if necessary, greater resources to improve the Technical Specifi- f cation compliance record. The purpose of this letter is to describe to you action taken since the August 8 Enforcement Conference to improve Palo Verde Unit 1 operations, including the areas mentioned above. . I Immediately following the Enforcement Conference, Mr. Haynes and I met with the ANPP managers to discuss in some detail the reason for the Enforcement Con-
, ference and the lessons learned and the need tu improve the Technical Specifi-catiori compliance record.
In addition, action plans addressing, but not limited to, items discuss'ed in the Enforcement Conference were prepared and included assignment of responsi-bility.and schedules for completion of each item. This includes action plans developed within the Quality Assurance organization to improve their involvement in verifying the accuracy of NRC submittals.
As to the need to devote greater attention and, if necessary, greater resources to im'provement of compliance, we have temporarily assigned Mr. Karner, Assistant Vice President, to the site with his only responsibility being improvement of compliance with NRC requirements. The objective is t'o implement these improve-ments through both programatic changes and managing resolution of specific issues. In this capacity Mr. Karner will continue to report to and receive direction from Mr. Haynes.
In summary, we have taken aggr,essive action to improve Palo Verde Unit 1 com- I pliance and are committed to continuing improvement. We are confident you will see the results of our actions.
Sincerely, 850 % . . CLL( A u,,
f PDR E. E. Van Brunt, Jr.
Executive Vice President
! Project Director kid or R. P. Zimmerman %g(
I
f r
~
COALITION F'R O RESPONSIBLE ENERGY
, EDUCATION 315 West Riviera Drive
. Tempe, AZ 85282 January 20, 1986 Mr. Harold R. Denton, 1 Director Office of Nuclear Reactor Regulation 2 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ,
4 RE: ADDENDUM TO Show Cause Petition (January 17, 1986) Pursuant to 10 CFR 2.206(a) In the Matter of Arizona Public Service, et al.
5 (Arizona Nuclear Power Project - Palo Verde Nuclear Generating Station, Unit Nos. 1 and 2), Requesting Suspension of PVNGS No. 2 6 . Operating License Pending Completion of Specified Regulatory and ,
Corrective Actions; Institution of Proceeding on Management l 7 Competence and Financial Qualification of ANPP; and Institution of Special Regulatory Actions Re: PVNGS Nos. 1 and 2. Docket Nos.
8 50-528, 50-529 (License No. NPF-34 and NPF-41) 9 1. This Addendum updates certain issues addressed in previously 10 filed Show Cause Petition by CREE, dated January 17, 1986, based 11 on material coming to the petitioner's attention after or coinci-12 dent with the filing of said original Petition.
13 2. Said Petition addresses possib,le evidence of schedule 14 pressure affecting quality and management performance at Palo 15 Verde Nuclear Generating Station (PVNGS)(pp. 30; 47-52).
16 Additional evidence of schedule pressure and financial pressures 17 on Arizona Public Service Company (APS)/ Arizona Nuclear Power 18 Project (ANPP) has come to light since filing.
19 3. On January 15, ANPP. announced an estimated three-month 20 schedule delay in the projected commercial operation dates for 21 PVNGS-2 and -3. The estimated cost (primarily due to financing 22 costs) added to the project was put at $60 million. ANPP 23 attributed the delays to failure to complete power ascension 24 testing of Un.it 1 and receive the Unit 2 license. ANPP missed two 25 self-imposed target dates of November 1 and December 31 for 26 completion of Unit 1 power ascension and 100% power testing.
96012901hebO121 PDR ADOCK 03000528 k'
G PDR sfg5 r;
- t. t 4 l
l 2.
( -
1 (Exhibit A.)
l 2 4. Immediately following the announced schedule revisions, the 3 state Residential Utility Consumer Office (RUCO) filed a Botion 4 with the Arizona Corporation Commission (ACC) to dismiss " Phase 5 3" of a pending three-phase rate increase hearing for APS. The 6
third phase of the hearings is to address initial accounting 7 treatment and planned phase-in of rate increases necessary to i
8
, allow APS recovery of PVNGS-2 and -3 construction and financing 9 costs. RUCO's Motion was explicitly tied to the announced delay 10 in commercial operation of PVNGS-2 and -3, which in turn was 11 caused by ANPP's difficulty in meeting its established target 12 dates for Unit 1 testing and Unit 2 licensing. (Exhibit B) 13 5. liUCO's Motion follows closely upon its successful opposition 14 to an APS Motion to expedite the rate case hearing schedule 15 (Exhibit C.), and its also successful Motion to require 16 additional filings of' the utility . prior to establishment of a 1
hearings schedule for a new rate increase request to begin recovery of Unit 2 costs (Exhibit D).
19
- 6. CREE contends that the net effect of these ACC' decisions and 20 RUC0 motions is to undercut any assumption that the utility and 21 Palo Verde plant manager, APS, is " guaranteed" recovery - either 22 timely or complete - of a substantial portion of its sunk costs'.
- 7. Other factors can also be cited. RUCO, CREE and other rate case intervenors have urged the ACC to subject PVNGS costs to 25 intensive prudency reviews before additional recovery is l 26 authorized. Of course, such reviews have resulted in substantial
o
. J I 3. j l
l 1 disallowances involving other plants, such as Wolf Creek, Shorehan
.2 and Callaway. The utility regulatory commissions of Arizona, New
- 3 Mexico, Texas and California have initiated an extensive audit of 4 construction costs for PVNGS/ANPP, aimed, similarly, at identify-5 ing potential areas for disallowance of construction cost recovery .
t 6 Estimates have indicated that the resulting disallowance may )
7 exceed 10% of the entire plant cost. (" Investment prudency,"
8 " excess capacity" and other reviews requested by intervenors in '
9 the current APS rate case could result in additional and still 10 larger disallowances.) (Exhibit E.) Other forms of economic 11 pressure currently being brought to bear upon APS include munici-12 pal condemnation proceedings and one inter-utility law suit, 13 (Exhibit F) as well as outstanding legal actions involving the j 14 supply of effluent used at PVNGS for auxiliary cooling purposes.
15 Indeed, late last year, RUC0 went so far as to urge the ACC to' t
16 consider, in the pending APS rate. case, the economic feasibility
! 17 of Unit 3 abandonment (Exhibits-2) . Clearly, the customary 18
" assurances" of financial stability are lacking for APS/ANPP.
18 8. The seriousness of APS' situation is attested to by the 20 recent announcement by the utility that the utility may seek 21 interim rate relief related to PVNGS-1 costs, absent which it
- 22 may face a lowering of its bond ratings. (Exhibit G.) Despite 23 i
1 recent rate increases, due to as yet unrecovered Palo Verde 24 investment co,sts, 67% of APS net earnings (for the 12 months 25 ending September, 1985) remain tied up in Allowance for Funds
) 26 Used During Construction, earning the utility no return. (Exhibit 4
)
__ - , . , - , - .-,,--v,-yy, , , , , , , ._y#ym_,_-, - - - , _ . . - - .;,,-,._,,,,,
_m,,,,,-,.------,.-,.cy.,y., -,-.a --,
t , ..
4 4.
t 1 H; source: AZP Shareholders Association.) Other financial indica-2 tors demonstrate similar Palo Verde cost strains. The utility 3 needs substantial and early cost recovery, or its financial 4 situation will deteriorate significantly. In fact, were no 5 additional permanent recovery of Palo Verde costs allowed, the 6 utility, on these figures, would be faced with insolvency. More-7 7 over, as the on-going construction cost audit suggests, temporary f 8 recovery may not prove permanent. Therefore, the future financial i
9 stability of APS (and hence ANPP) is by no means assured. Moreover ,
10 as the foregoing discussion of RUCO's recent response to new PVNGS
{ 11 shedule delays demonstrates, the ability of APS/ANPP to meet its 12 Palo Verde timelines is a serious factor in the utility's future 13 financial outlook. Clearly, the stage is set for considerable j 14 pressure to speed-up schedule performance.
- 15 9. As noted in CREE's original Petition (see above), some P
16 suggestions of possible schedule p.ressure affecting ANPP performanc i e 17 have arisen. In addition, the NRC has recently investigated an 18 allegation of sched'ule pressure in the HVAC subcontractor's d
19 (Waldinger Corporation) Quality Assurance program, along with other 20 allegations ~from the same source.- NRC Inspection Report No. 50-528 21 January 7, 1986, pp. 14-17 ,(Allegation No. RV-85-A-034) . The NRC l 22 Report states, in part:
23 Allegation: Welders do not return unused weld rod at'the end i '
of their shift, as required.... 1he reason the weld rod is 24 not being returned is because engineering is. pressuring
- 25 craft'to meet schedule. l 4
26 ...[T]he concern that welders were not returning their. weld ;
rod because of schedular pressure does not' appear to be valid based on the Quality Control' Inspector s aforemen-l
',~r
- , -,.,n- -
-e-- ,, -
,,--,n.,n,--, xr --nw, m , , - - - . . ~ - ,v- - -, .,m. v, --,nv,.,nn-- ,-n-
5.
l l
i i i tioned statements that welders were returning their weld j rod.
2 However, it should be noted thet a related item within the same 3 al' legation - that Waldinger had not adequately limited thd number 4 of people authorized to issue weld rod - was substantiated. There-i 5
fore, it appears questionable that' NRC was prudent to limit its investigatid 6
of the general allegation of schedule pressure being brought to 7 bear on craft to a
, broad statement by Waldinger Q.C. that one l 8 specific incident of such pressure was not known to have occurred ,
I 9 or was not pervasive. In light of the other suggestions of 10 schedule pressure affecting ANPP'as general Project Manager, as weLl 11 as Waldinger's prior history of unrelated problems, this item of 12 4
the allegation merited considerably more intensive investigation.
13 10.
i The thrust of CREE's original Petition was to set out the 14 prima facie case for questions regarding APS/ANPP's management j 15 competence and character sufficient to justify the relief reque'sted .;
II i
The issue of financial pressure is raised as'o'ne factor'which may 17 I be acting to undermine ANPP performance. Other recent incidents j 18 have come to light which raise direct questions about ANPP manage-18 j ment competence and character.
1 20 '
- 11. On January 10, 1986, in what appears to be the first radiation:
21 j accident at PVNGS, two workers received doses as high as 50 milli-22 rems while opening a pressurizer-isol'ation valve. (Exhibit I.) -l
. 12. On January 7, 1986, ANPP discovered evidence of possible j tampering with PVNGS-3 wiring. The' incident was reported.to NRC on r I 25
- January 9. (Exhbit J.) 4 26
__.___._..____.._._,.-__-._._.i.
l l
i E. I 1 13. In both instances', information on the occurrences was with-2 held from the media in excess of four days. In the case of the 3 worker contamination incident, the media first learned of'the 4 occurrence through the NRC. In fact, ANPP spokesman Dan Canady 5
indicated on January 13, when the story was made public by the 6
Phoe$ixGazette: "This is the first I've heard about it." (Exhibit 7
I-1.) Subsequently, Canady justified the failure to inform the 8
media as follows: "It just wasn't a big thing to them [ANNP site 9 management]." (Exhibit I-2.) (However, such incidents are 10 Reportable Eventa.) In a particularly memorable quote, Canady went 11 on to state: "We consider it a very minor contamination. If you 12 are working in an auto repair garage you're going to get greasy 13 from time to time." (Exhibit I-3. Emphasis added.)
14 14. As discussed in CREE's original Petition, the petitioner 15 regards such incidents of failure to inform the media and publi~c 16 of negative news (whether or not. required to do so by NRC regula-17 tions) as evidence of lack of management integrity indicative of 18 poor management character. (CREE Petition pp. 36-40 for prior 19 instances and discussion.) In addition, the attitude toward worker 20 contamination evinced by Canady's statements (above), and attributed 21 by Canady to ANPP upper echelon management, reflects upon management' 22 character - and, arguably, competence - negatively.
23
- 14. In the case of the most recent incident of possible tampering 24 at PVNGS, ANPP waited over a week to inform the media. In light 25 of considerable media attention accorded other possible tampering 26 incidents at PVNGS during 1985 and 1984, ANPP cannot plausibly
7.
1 claim that media interest was not anticipated. Common sense 2 suggests that quite the opposite was, in fact, the case. Again, 3
failure to inform the media and, hence, the general public of 4
incidents of public interest reflects poorly on management 5 character.
6 15. CREE maintains that the incident also provides further 7
illustration of questionable management competence in the two 8
critical areas of communication, internally and to the NRC, and 9
prompt action on matters affecting plant security. (CREE Petition 10 pp. 42-45.)
11 16.
In this instance, instrument problems which were found to 12 have been caused by the possible tampering were first identified 13 on January 4, 1986. The evidence of possible sabotage was 14 discoveral by ANPP on January 7. Yet, the NRC was not notified l
15 of the possible tampering until January 9.
16
- 17. The gap between the January 4, 1986,. identification of a 17 systems problem and the January 7 identification of the cause 18 thereof is explained as the result of delayed attention due to 18 competing issues. (Exhibits J-1 and J-2.) The gap between the i 0
January 7 discovery of possible sabotage and the January 9 21 notification to the NRC cannot be similarly justified, however, 22 particularly in light of concerns expressed by the NRC last yea'r 23 over similar delays in reporting, and in initiating of ANPP 24 investigative activity. (CREE Petition, p. 43.) Such repetitive 25 patterns of poor management lies at the heart of CREE's contentica 26 of management incompetence.
l 8.
1 18. Moreover, it should be noted that claims of pressure from 2 competing issues begs the question of the likelihood, which lies 3 at the core of CREE's request for relief, that simultane6us 4 operation of PVNGS-2 and -3 will necessarily overtax ANPP 5 management resources at their present competence levels.
6 19. Initial NRC response was from Resident Inspector Roy Zimmer-7 man, as follows, according to the Arizona Republic:
8 "It went up the management chain. Once it was identified at a certain level of management, they flagged it.
9 "We would like to see the notification as quickly as 10 Possible. I don't want to say its not a concern of our's but you need to differentiate between an operating unit 11 and one that's under construction."
12 Zimmerman said that becuase there is no nuclear fuel on site for Unit 3, "they don't come.under our security requirements."
3 He said any concern he*might have is over the delay
< 14 at lower levels of recognizing and classifying problems.
15 Arizona Republic,. January 19, 1986, p. B-3 (Exhibit J-3).
16 20. Mr. Zimmerman's response is considered inadequate for 17 several reasons, and appears to indicate a lack of full apprecia-18 tion of previous NRC concerns expressed to ANPP regarding their i 19 responses to incidents of apparent sabotage at all three Units.
20 (CREE Petition, supra.)
21 21. It needs here to be pointed out that CREE spokespeople have 22 previously publicly expressed admiration for the manner in which 23 Mr. Zimmerman has conducted his responsibilities since being 24 assigned as Chief Resident Inspector at PVNGS. Accordingly, the 25 following criticisms are not intended to reflect generally upon 1
26 him, although they may be indicative of concerns addressed at '
l
9.
1 numerous points in CREE's original Petition questioning the 2 capability of routine NRC procedures and enforcement actions 3 (particularly their single-issue', often narrowly technical and/or 4
legalistic nature) to adequately identify and address system-wide 5l patterns of recurring deficient behavior by plant management, suci 6
as are raised by CREE regarding ANPP's management competence.
7 22. First of all, to the extent that those remarks are premised 8
upon NRC regulations regarding security necessary for facilities 9
possessing special nuclear materials, they are merely narrowly 10 bureaucratic and legalistic. They fail to address the probabilit /
11 that such recurring, similar and - indeed - threatened acts of 12 tampering as have apparently occurred at.PVNGS pose a problem 13 of criminal investigation which requires that all evidence be 14 treated as of equal importance to the apprehension of the person 15 or persons responsible for such actions - at whatever PVNGS Unit 16 they may occur.
17
- 23. The same reasonable inference of a deliberate, continuing 18 sabotage effort reemphasizes the need, previously stressed by the 19 NRC, for prompt investigative activity by ANPP. Ittis not merely 20 a question of whether lower levels of plant operation know 21 probable sabotage when they see it and inform upper management; 22 1.e., a question of identification. It is, at least as cruciaily ,
23 a question of the speed with which the information travels up the 24 management chain, management responds with investigative activity ,
25 and the NRC is notified by management; i.e., a question of 26
1 .
4
~
1 investigation (and notification). Additional concerns are raised i
2 by ANPP's failure to notify local law enforcement and seek their 3 professional investigative assistance, even in the face of two 4- subsequent and apparently related incidents. (Exhibit J-5.) To 5 put the matter in its simplest form, bloodhounds do less well if
~
6 asked to follow a cold trail. This appears to be the concern of i
7 the original NRC cautions to ANPP (CREE Petition, supra), which 8
ANPP management appears not to have heeded.
9 24. As such, this recent incident provides yet another example 10 i
of ANPP's repetitive pattern of failure to take adequate manage-
- 11 ment action to prevent recurring deficiencies.in crucial areas.
12
- As such, it clearly raises the question o.f management competence 13 and supports the petitioner in its request for relief in the i 14 form of an Order to Show Cause.
15 1986, BY:
RESPECTFULLY SUBMITTED, THIS ggf2fDAY OF JANUARY 16 '
I
/a-o .
. iG-d' 18 MVNON L. SCOTT 19 -Intervention Coordinator Coalition for Respon'sible Energy 20 Education 315 West Riviera Drive 21 Tempe, AZ 85282
. (602)968-2179 l 22 j 23 24 25 26 mem[
. , EXHIBIT A-1 l 1
Paio T erce t i
setbacks boost. cost f / % N By Victor DricksThePhoemxGazette /-/[-8h Testing Tst5acks R'PaloTerde have caused a threa. month scheduling delay for Units 2 and 3, and could add $60 -
mi!! ion to the cost of the nuclear ._
' generating station west of Phoenix.
. Arizona Nuclear-Power Project execu- O eOdMS tive vice president Ed . Van Brunt Jr.,-
'aiinounced, Tuesday th.at Units 2 and 3 prom A-1 will' not begin. operating commercially , .
until the third qdarters of 1986, and 1987, : said Susan Williams, director o'f the state respectively. . .. , Residential Utility Consumers Office.
.-It was the fis n '
for the project sm,t majoMedule revisio' ee officials encountered . is ju!t the be fm'ing of pr ble s major cifisculties.with reactor coolant and as a community we have to hope this' pumps more than two years ago during . plant works, works efficently and soon.
'prejoperational testing for Unit ir -
According to Van Brunt, one of the The new schedule will not incre'ase the key reasons for the rescheduling is that construction cost of the project, but will Unit 2's operating ,li, cense was not add ' financing charges to individual received as soon as anticipated.
participant's costs. .The plant is owned by a, consortium of seven Southwest Earlier this summer, U.S. Nuclear utilities. . . 4: Regulator Commission officials ex-
-}roject' officials had. estimated the pressed reftetance to allow Pab Verde plants could be built for .$9.3 billion. technicians to begin a testing program About (5.9 billion of this is allocated for for Unit 2 until Unit I testmg was completed, direct,constrinction and $3.4 billion. In '
financmg charges. . - Federal re ulators said they did not
. Arizona Public Service Co. spokesman want Palo Verde technicians to split their expertise.
Brad Parker said today the, scheduling-setback is foremg the,19th revision of the In addition, Unit 1, scheduled to enter utility s share of participation in the Palo commercial service in late December Verde,p,roject smce 1972. .. 1985, has encountered a spate of prob- t A new APS cost estimate will be.
- lems since it began splitting atoms May I 25.
i released He added, ho' in wever, earlythat February, even wi Parker said:th Project officials have said the have I increased financing charges caused by encountered mere than the usual share of the delay, APS should be able to keep its glitchas because Palo Verde uses reactors share of the project costs under the $2.86 of a first-of.a. kind design. I billion cap imposed by the Arizona ,
Corporation. Commission. Any costs above that figure will have :o be absorbed by the. utility.
.. Scheduling setbacks have traditionally -
added $1 million a day in financing charges to the cost of the triple. reactor '
project, Parker said. But since only two of the three Palo Verde units will be 1 affected, he said the scheduling delay
- may add about $60 million to the Palo Verde price tag.
"You could figure since APS owns 29.1 '
percent of the project, its share of the merease could be about $26 million,"
. Parker said. ,,
"I'm afraid this doesn't surprise me," +
5 o Reactors, A-4
~~ I
1
- EXHIBIT A-2 92AEP D .- 1 8 '
C(ommercial opdra/1.'on(o ti put off for Palo Verde Units 2 and 3 Scheduled commercial operation The new schedule "may Mfect I of Units 2 and 3 of Palo Verde the individual participant's cost,'.'
Nuclear Generating Station has Van Brunt added.
been delayed about three rnonths, a plant officialsaid late Tuesday.
Palo Verde ~ is owned by a consortium of seven Southwestern .
Ed Van Brunt, executive vice utilities. Arizona Public Service Co.-
' president for the plant, said Units 2 end the Salt River Project are the and 3 now are expected to go on line in the third quarters of 1986 onlyparticipantsin Arizona. . .
and 1987, respectively. Kevin Mosley, an APS spokes;
. man, said, "We don't expect th6 Original schedules called for the cost to go above the ($2.36 billion) commercial taperation of Unit 2 in the middle of this year and in cap" agreed to by the stateCorpo-ration Commission.
mid 1987 for Unit 3. Glitch-plagued Unit 1 is sched.
Van Brunt said one reason for uled to be in commercial operation the schedde change is that the within the next three months, operating license for Unit 2 was not Operators of the plant missed received as soon as anticipated.
-Palo Verde lD3 I
Palo Verde Continuedfrom Di
~
p'revious self. imposed deadlines of Nov. I and Dec. 31 for commercial
- o eration.
~
- Unit I has been out of operation s nce Thursday, when it shut itself down after a failure during a test.
j . Plant spokesman Dan Canady said da'ta taken when the shutdown '
oteurrud are being analyzed and resulta should be available today.
- He said he did not know when .
tfie unit's reactor will be restarted.-r The unit has until March 1 to be classified as commercial. Ifit misses that ' date,' APS. will face the' possibility of. pen.a lties under a s} ate Cor
. Iquia.; poration Commission for._
w M
x H
H a
to PI4 Ca Mb% P3 W WMP rO-eb Utility group challenges need RUCO wants to delay ,
for Phase 3 of APS rate hearing r Unit 2 rate hearing . Jai:g"":'e== e den,mme Following an announced three- At that time, Unit 2 was sched. " "
ic Ser ce Co sh u$d month delay in com'pletion of the uled to become operational in Palo Verde Nuclear Generatmg mid-1986 and the company said if missed, the state's utility watchdog s osts bnt$No*#)*the Ii d, Station Units 1 and 2,11UC0 has the rates were not in effect at that agency has suggested. rate increases quested iater. that would 13 asked the Corporation Commission time customers would face a hefty. Susan Williams, director of the to drop consideration of Unit 2 increase after the completion of at Residential Utility Coneumer Of. .The watchdog agency has been costs from the upcoming Arizona second rate heating some time ini fice, said in a filing with the state critical of the plan, saying it would Public Service Co. rate hear,mg. 1987.
Corporation Commission that the assure the firm ofincluding the cost In a motion filed late Wednes- third phase no longer is necessary f Unit 2 in its rate base and 1 In its motion,110C0 argued that :
day, the Residential Utility Con with the new Unit 2 completion . be'cause of announced delays in the require APS customers to pay sumer Office said the issue is moot date now set for late 1986, the lag. start-up of the Palo Verde Nuclear milhons of additional dollars in Generating Station. carrymg charges.
because of the completion ~ delay. . between Unit 2 becoming opera-The request will be considered by tional and the commission deciding - : APS, a part owner in the facility.
\Villiams said in her motion that Tom hiumaw, the commission's on rates in a future case will be cut being built 50 miles west of down. a hearing on the accounting system chief hearing officer. considerably. The consumer agency town Phoenix, said en Tuesday that now should be held later, when the APS had asked the commission said there is no need to consider ope ation of Unit 2 and Unit 3 of commission takes up the actual rate to set rates for Unit 2 as part of the Unit 2 costs now.
the triple-reactor facility has been increases for Unit 2.
case that is to go to a hearing before The Feb.11 hearm, g will consider . y{ushed backinatfederal eause of delays leastlicens-three months The commission is scheduled to hiumaw Feb.11. rate increases that would mercase The utility said it would not Al 's annual revenues by $78.6 beginmg., Unit 2 had e t or by mid-1986 and been scheduled to.' proceedingsbegin Feb. 11, with th the fi collect the money but would keep 5 ""- second phas,e set for Afarch 27 and track of how much customers owed The addition of Unit 2 to the Tiie third phase is scheduled to the third immediately after the tr.d charge them retroactively once Al'S rate base would increase that conclusion of the second.
Unit 2 became operational. figure by $194 milhon annually.
i m E
G
~
d o
... < , n y p ; . utility office wants ,
.!!P tiiile to study data , ,
(
$$ tats is" asked'to deny 'early; hearing for APS.
. . fb' " JOHN STAGGs b .
' APS is seckin ' to have the .sents $78.2 million annually. . pay back $167.3 million in costs !
I f-:
oas neoubac seen .
-d JIhearing date movef from Feb.10 to An APS spokesman called the . associated with Unit 2 of the Palo I* TAe. state Residen l- U lity- Oct. 31. -
. filing "unfo'rtunate." Verde Nuclear Generating Station. *
{::f ' So umers Office late Friday re- The utility office said that the .. Susan Williams, director of the- Under' the deferral plan, APS
!:'i ted that the Arizona Corpora- commission could not make an utility office, said her office needs would, in effect, be guaranteed the L
Commission not move up the. Informed decision .regarding the " sufficient time" to review the APS highest authorized rate of returr.,
hi 13a ing date for Arizona Public rate request.because all necessary financial data for the period at least 16.15 percent. RUC0 says the plan 5 !)rvice Co.'s propoecd 8.6 percent- financial. data would not be avail- through the end of the third 4 really would cost consumers a total
- j. rgincrease. , able. An 8.6 percent increase repre- quarter,which ends Sept.30. of about $470 million.
She said APS has made it clear'.- Kevin hiosley, an APS spokes-h.that the data will not be available man, said, "We think it's unfortu ,
to anyone at least until 60 days , nate that they couldn't support us.
cafter the end of the third quarter,' .The sooner we work on rate shock,
" making an Oct. 30' hearing date the sooner ~we'll find a solution." ' '
impossible" to determine APS'
~
An official of the utility office
~
needs., . claimed the $167.3 million would,in h", The watchdog agency, i4 the effect, be a loan from APS to its F same filing, also objected to an APS customers to pay for costs associ-i ' deferral plan by which, over a ated with all three units of Palo l ,10-year period, ratepayers would . Verde.
Q .. _. . . . _ . _ . . _ _ . _ . _ . . . . .
EXHIBIT D State consumer ofdce opposes APS rate bid By FRANK TURCO /3-bO~hN.
commission. That request is sched-ArunnLRooubuc Start /-/'7 uled to be heard by the panel A $194 million rate increase beginning in February.
sought by the Arizona Public Ser.
Williams said APS filed its latest vice Co. should be turned down by request without enough data be.
state utility regulators because it cause it was rushing in an effort to does tien notallcontain from of 1985,financial the headinforma-of force the commission into starting the state Residential Utility Con- hearings on the proposal before a sumer Office said Thursday. final decision is reached on the earlier request.
Susan Williams said the rate "This kind of jockeying of the application the company filed with the Arizona Corporation Commis- schedule is totally unfair,"she said.
sion on Wednesday contains data Williams maintained that a fair that end in June, which will review of the latest request cannot handicap her office and others that be held without a full year of test may want to file objections to the data and without knowing how prooosal. much of the earlier proposal will be approved.
The hearing on the request won't be held until sometime in 1936, so She also claimed the amount of all of 1985's data should be in- new reverues sought under the ciuded in the application, she latest filing appears to be out ofline contended. with earlier cost estimates made by APS.
Williams said RUCO, the state Williams said a 1984 request by agency that represents consurcers the ecmpany that later was with-in utility rate. hike cases, will file a drawn asked the commission for request with the commission asking - $124 millicn for its ihare of Unit 2.
that the application be sent back to "This !atest request is $70 mil-APS with instructions thatit not be lion more than their earlier one, refiled until all 1985 financial and they Aaven't even explained information is available. why they r cw need more," she said.
The application seeks either a "I think we finally are beginning to 19.36 percent rate increase in a see the trt:e costs of Palo Verde."
single year or three annual in. Meanwhde, ,another consumer creases of 6.15 percent each. Elec- organizaticn said it supports the tricity rates would increase $15.94 a attempt by APS to phase m its rate month under the single. year plan ses.
and $16.17 over three years under incgr ,p p f the phase-in plan.
ec n mic impact on, customers The added revenues are needed especially low and fixed.mcome, by the utility to help it pay for its customers," said the Arizona Asso-share of Unit 2 of the Palo Verde ciation of Communit Nuclear Generating Station, which ,tjons forReform Now. y Organiza-The group, however, said it is bemg built west of Phoenix by a consortium of utilities. would not take a position on the APS also has a request for an 8.6
- amount of money being sought by the utility, leavin percent increase pending before the the rate hearings.,g that instead to .
O 'The Phoenix Cazette wed . Od.16,1935 G 7 meeeng e RUCO seeks Pa o Vekde probe By_he Phoemx CaretteAnthonymillionSom"mer in new annual revenues is e flow the company should be T
An;mvestigation mto the , hidden scheduled to begin Jan. 6. penalized for extended power plant costs of the Palo Verde Nuclear It promises to be the longest in outages.
c mm ss n histor e Costs of decommissioning the Generating Station should be a part intothesummer. y and last well of the next Arizona Public Service Palo \erde plant and how they Co. rate case, the Residential Utii. A
' mong the issues RUC'O asked to should be pa,id.
ity Consumer Office has told the have meluded in the hearing are:
e Whether APS should be able to state Corporation Commission.
- Whether ratepayers should be include the cost of buying, shipping RUC0 Director Susan Williams' charged for Palo Verde capacity and disposing of nuclear fuels when request was made at a prehearing that is capable of generating more those services are provided by APS conference conducted by the com- electricity than APd needs. Part of subsidianes.
mission Tuesday, the question is aimed at the need
- Whether APS should be al.
"This is the only occasion to ask for Unit 3. , lowed to charge its customers for how much Palo Verde ultimately e An analysis of the corporate. extra costs found at Palo \,'erde but will cost Arizona," Williams said. restructuring of APS last year, n t at coal fired plants, meluding
'"It is an opportunity to evplore which has removed several of the extra secunty, extra operating per-what has been, up until now, the. company's subsidiaries from the s nnel and low-level radioactive hidden costs of a massive plant." commission's jurisdiction. waste disposal. _.
~1 similar, although less detailed' request was submitted by the e An analysis of federal income Committee on Responsible Energy tax credits received by APS but not Education, deducted froin the company's rate base when the commission. deter.
'. APS attorneys expressed no ob- mines the value of the company.
je'Clion to the requests to expand the scope of the hearmg.
- A determination of how much of the Cholla 4 coal-fired generating "This is not going to be an eas plant should be in the APS rate g case to get one's arms around," AP hase. Power from the plant is being e ' counsel Jaron Norberg said. sohl to a utility . in Southern The hearing into APS's request California at rates lower than APS 8 for an 8.6 percent rate increase that customers will pay for Palo Verde
$ would give the company $78.2 electricity.
x W
EXHIBIT E-2 Wednesday, October 16,1985 f) 7 g p g g3 ,g,g Consurner agency urges regulators to extend scope of APS rate hearing The scope of the Arizona Public Unit 2 is due to be operating by the ~ chases for other utilities; and possi-Service Co. rate hearing now pend- middle of next year and Unit 3 by ble " lifeline," or reduced, rates for ing before the state Corporation mid 1937. the needy.
Commission needs to be expanded The commission, which will be. She also urged the commission to so that the full costs of the Palo gin the APS hearings on Jan. 6, use cauuon when deciding the Verde Nuclear Generating Station called the pre-hearing conference to accountmg proposal advanced by can be learned, it was suggested allow intervenors to suggest issues APS for Unit 2 because it will have Tuesday.
that they would like to see dis. a far reachmg affect.
"This is the time, this is the plac,e -cussed during the proceedings. "All future rate proceedm, gs wil I to truly assess what Palo Verde is accept the pattern set in this case,,1 ,
l gomg to cost, said Susan Williams, Currently, the agenda involves she maintained.
director of the state Residential discussions on proposals by APS to Under the plan, APS would delay Utility Consumer 0ffice. . increase its electricity revenues by placing in its rate base the mainte-She told the utility $78.2 million a year to pay for its panel durmg a pre-hearm, g confer-regulatory share of Unit 1 of Palo Verde and to nance and' operating co ence that al! facets of the nuclear begin using a new accounting ap- after addi-until 1987 and then'e costs tional rate hearings, th plant, meludmg the prudence of proach for Unit 2-when the reactor be phased in over a five-year building a third reactor, need to be begins operating, period-i ,
I explored at the proceedings. Additionally, the commission
, The company said the plan t
~ "We must be able to ask if it is plans to review its fuel-adjustment would avoid rate shock ,or a large, l
' prudent to continue building Unit 3 procedures, which a!!ow APS tb smgle rate mcrease, for customers. ,
or will it be more cost effective for adjust its rates when the prices jt Williams, however, s the community to abandon Unit 3," " pays for fuel and.powerincrease. I ;
wants to add carrym, aid APS g charges, also she added.
Williams, whose agency has which would boost the total amount
' APS owns 29.1 percent of the taken part in the past several APS raterpayers eventually would have
$9.3 billion three reactor plant that ' rate hearings. said the proceedingsto pay to $471 million from is being built 50 miles west of should include reviews of the AZP $167 milh,on.
D downtown of Phoenix seven utilities from four states.by a formed consortium Group, the holding last year by APS; decisions company an rates,',e are she said. i Unit 1, which is in the testing by APS to sell power from one ofits
-Jaron Norberg, APS vi,ce presi-phase, is scheduled to be in full coal-fired plants to a California dent and chief counsel, said that if
, operation by the end of the year.: utility; planning for power pur- f, ,8,,8en 8
nd oIherinter e-
.i nors were accepted by the panel,
- the rate case could be expanded so
........e . ...
i much thatit could get out of hand.
.o /
- "This is not going to be an easy rate case for any of us to put our Full costs of Palo Verde sought. arms around,"he said. .
Commission Chairman Renz Jen.
., The scope of the Arizona Public Service Co. rate hearing nings cautioned too, that he hopes pending before the state Corporation Commission needs to be expanded so that the fullcosts of the Palo Verae Nuclear J the case does n,ot_ get too ompli .
cated.
. Generating Station can be teamed, according to Susan Wdliams.
director of the state ResidentialUtility Consumer Office. C3. -, However, he urged APS to coop.
etate with the intervenors in their
_' effort to obtain information from the utility as 'they prepare their
,,, . . j .., ._m3 ->n p a w , - + ,
__a_
cases.
a, .. -FRANK TURCO, g -
EX LBIT E-3 -
n u Audoit i
o l
ol suppliers, including General Electric and Southern Boiler.
The problem became so severe that a
" design freeze" was implemented in COS Overruns February 1977 because project engineers were unable to keep up with changes.
The report also was critical of quality P IO
/[-A-) d By AnthongSomme,r Verde and Victor Dricks N I,'recommended control throughout the project and it be given high priority in the second phase of the study, which was scheduled to be completed by July. '
i I
= %ms Guette The. report cited a series of violations A four. state audit oTthe co Etruction costs of the Palo Verde f r which the proj,ect was fined by the ,
Nuclear Generating Station has blamed massive cost overruns on federal Nuclear Regulatory Commissan, factors ranging from poor quality centrol to unexpected labor [;"t d ut not fined.
costs.
l The first phase of the $2.5 million audit was released today by .
. "It ...seni r nianagement co'ntrol was the lit re tory commissions in Arizona, Texas, California sppropria t ese lemj Qay e , , ,
The study details the reasons Palo Verde costs more than violation possibly avciced, the report said.
doubled ,to $5.9 bil, lion from initial estimates of $2.8 billion -
since planning began in the early 1970s. Construction boosts made up more
.than 48 percent of. the entire cost Some of the increased costs were blamed on delays in the ' overrun, the study said. The actual cost project. Completion of Unit 1 is 43 months behind schedule, while Unit 2 is expected to come on line 24 months late and Unit to build Palo Verde originally was pegged 1 3 is forecast to be 14 months late. at $2.2 billion and now is estimated at '
$3.7 billion. This does not take into Problems began to arise virtually from the time work began in consideration management or other 1976, according to the study. At that time, there were delays in costs.
the awarding of purchase orders and in processing bid The largest single component of the evaluations-construction cost overrun was attributed By early the next year, the study said, significant delays in to labor, which made up 32 percent of the engineering for the plant began to appear. They were attributed increase. Labor costs initially were esti.
to holdups caused by the contractor, Bechtel Corp., and major mated at $462 million and are now see e Audit, A-4 expected to reach $938 million.
O _~ .
That figure is more than the cost of the average nuclear power plant now operating in the United States.
The construction delays added $410 million in interest costs alone, the report said.
Management costs for the Arizona :g
,- m _ . .__.
~
o ##
1i!I r
- r.., a*E!"g
- g s*. r,,Ta, s:
- ~. E.' s r::. lim
".a =o.e %,
- m.d a a g. s aam s.. s E n",!F
-. E..sli'g}.?s:sK s- =- e m, $. r:.E. g .e. E..
s r. r 3 *'Y*IEF a =r== E m "e g2i R, =* ay fa ig *s s s.m e-is iE*E"Eig! AFT @itE!aao._.s.ls bil if 4 E.E.! .agsa g 3 a @ :sga.pe:sa IEeg "
mss; . E li~?!=EE.!r*igiEg.g~5=aa5m.n !.M i s-?N 3rEsif 52r m5Sr=F a . * *-sl! ".., agy gaRe;15:e a75 >i[a E '.M4 54a ~
- a - si =s !. r ' a.S 2:
=
- .y s s e,c2,2. a rg 'sr= .. I pg a=.
w.g e .a s ,lg L_y a. g cc e,a.a, H.x.= 2 - a "=. < 3 se-r- E :r n: - ,- . - . w. - . w.e, nn 3s.gy ag wx=sBas .g g 2:c. . E.1 -
EE P
$ h . =-cp7[*=
S ,
s m k-h c
e p = r.p - - 3 o
2-E!
a %-
G!5A z=
cEE3$(-=d.FR!gEg..gN" E
a r e. a.s ., g..g ..
l 3 *:= *] -o g."EE
- s. -reas . r a. !" s a
.E 'ai a s 3 ]!
. F E- E$a,">:@a ee s
" di s '! 2B E,, jo.g 4 a-3 a >
! a.9- ? !~ E .
- B3 4 " 5. 3-F- a-a # rCifra,E 'g{ Eid _
@.$ fi? a@.4;:l.gi 32, .'
,em
EXHIBIT E-4 F2' f)l- L k f' f l-)}.9 /
- 12. consultants bidding to do ,prudency, auc...E of Palo Verde cornplex A -do' zen consulting firms have ules, and management decisions bid to work on a construction-and. that were made to build the mar)agement "prudeacy" audit of the Palo Verde Nuclear Generating and to continue it as clear the nu, plant mdustry changed.
Sation, utility regulators in Ari-zona reported Thursday. Bids for work in the sixth area,
__. which involves how well the consor-The contract offers were filed tium managers oversaw the work of with regulators from Arizona, the general contractor, Bechtel Texas, Califc,nua and New Mexico, Power Corp., are not due until next who are plannmg the review of th,e Wednehday.
power plant, whose construction is The bids being completed by a consortium of special will be reviewed staff committee Y
later this b .a seven utilities fr.om thefourstates. . month, and recommendations to the regulatory commissions from A preliminary audit of the the four states will be made in
$9.3 billion plant already has iden- mid-February, according to Chris tified about $3 billion in expenses that it suggested be scrutinized to Kempley, a lawyer with the Arizona determine whether they are reason- Corporation Commission.
able and prudent. He said the study, estimated to cost $1.82 million to $3.25 million, Regulators from the four states is expected to take 10 to 12 months )
have said that if any expenses are to finish. , ;
found to be imprudent, they will (
not allow the utility owners of the "We're hoping to have it com-pleted b plant to include those costs in their. added. y the end of the year," he
> electricity rates.
The bids submitted by the The preliminary audit, com.
consultants cover five of the six pleted in November, was done by.
.the accounting firm of areas that will be examined in the dudit, inC}uding construction costs, Ernst & Whinney, ,which has been engineering costs, start-up costs, hired to manage the audit and construction and start-up sched ' consultants. oversee the work of the~ other
l EXHIBIT F-1 page suing to take over '
)Qp systern
' By JOHN SgHROEDE ,,
Northern Arizona Bureau C,
- FLAGSTAFF- Page ha filed al c'ondemnation suit to force Arizona Public Service Co. to turn over to
', the city its electrical-distribution system in Page.
The condemnation suit was filed
- Wednesday in Coconino County
- Superior Court and seeks a hearing for APS to show why Page should not be permitted to take immediate
- possession of the system.
, The suit asks that the title to the
, system be vested in Page and that the Arizona Corporation Commis-I sion's certificate of convenience for
- APS to operate the systens be
'. voided.
Page residents, by a 10-1 ratio in a special election Jan. 29, approved
! spending up to $10 million to
- acquire the system.
.: The City Council on Feb. 5 adopted a resolution authorizing the acquisition by eminent domain.
- APS, in an attempt to block the
- takeover, was unsuccessful in a court suit in February that chal.
I lenged the legality of the election.
- Although the election authorized
- the city to spend up to $10 million
+ to acquire the system, approxi-
}
imately half of that amount would
- go toward acquiring additional elec-
- ,tr,c i power.
= T Promoters of the~ acquisition
!iontend that the city can operate
- the system -at a lower cost to
- customers than can APS.
A key element in the rates
- , depends on how much the city must
' pay APS for the system. APS has stated that the system is worth
- between $8 million and $10 million; I he t city contends it is worth I,between $3 million and $5 millioni.
EXHIBIT F-2 Page ~ decision ~to acquire electric system is upheld By BRENT WHITING Artzona Republic Staff -/7-(( was not occupying the role of.
j middleman.
' A lineman for Arizona Public Page receives an allocation of Service Co. failed Thursday to have federal power at a preferred.cus-a court overturn an overwhelming tomer rate and then sells it to APS,i decision a year ago by Page resi. which in turns sells the power to dents to take over the utility's Pagecustomers.
electric-distribution system there. Moore, who filed his lawsuit with The state Court of Appeals ruled the ~ backing of APS, appealed after unanimously that the $10 millio'n Judge William F. Garbarino of, b'ond election be validated. ~ - Coconino County Superior Court However there the court were,"certain admitted validated the election hiarch 18.
irregularities" APS could not be a plaintiff in that kept 254 people who were, the court action because a plaintiff ineligible to vote on the list of those must be a registered elector who allowed to cast ballots.
cast a ballot in the contested "We are convinced there was no election, according to state election fraud or chicanery practiced against laws. -
the voters of Page, and we feel certam that ' the result of the Meanwhile Th6rsday, attorneys election was unaffected by the. for Page and APS agreed that the JJ c t irregularities,'.:'. Judge., Thomas C. f so.y will put up a $5.9 million bond Klemschmidt wrote for the court. .that it can take immediate
- The decision stems from a law- ., possession of the, , , distribution sys.
suit filed by Page resident Ronald.;, tem
- That agreement came during' thel-Gene Afoore,ajourneymanlineman ;ifiird ' day of a Coconino' County'
~
or APS,m,challengmg an.,29, which the votethe forelection .:. Superior Court trial. It resolvss the
~
. acquisition was 1,570 to 149. amount of the bond. to be posted Stephen K.' Smith, a Flagstaff until a court determmes the actual law he could yer who represents not >comlnent -on ;theAfoore, n A,_ said ,-, ,_.am
,dystent, unt_
h city,
,__z must pay for the. !
1 jty7, decision.because g ,2 he hadn'.t.yeiseenn - A trial on that isstie is scheduled
.g.t - p y,f to begin June.4 in'Coconino County' Afoore filed his lawsuit Feb. 8 / uperior,S Court. ._
after APS fought a losing battle to .
3, keep the electric system that has' 'Page hada contended e ond th t th bin tha trial set served Page for nearly 30 years. should be $3.6 million, while APS
) Page officials pushed for the attorneys had contended it should election because they believed the be $9.1 million, plus severance city could make more money if it damages.
. 4 --
._,x
.. a._ .y . , . . . . , . ..
~**w****.e ,
1 s
-l .
, 2,.;
.f f %--
I 6 Sections,60 Pages, EXHIBIT F-3 Phoenix, Arizona October 28,1985 AlSJ$ Gnt l
APS muscles! ~
developers,9 :
su t charges
- o c.,I, l
)
By James S. Jasper /ABG Correspondent . '. ) ,~ .
Arizona Publ!c. . .,Se:vice, Co. is " coercing" developers - l into building all-electric, subdivisions, according to a .
complaint : filed ~ before the Arizona Corporation '
Commission bySouthwestGas Corp. I
.g,- . ,-- . . ,_ m .. _ . _ . . . . . . . . _
5 The complaint charges that when developers inform
.sg g'E $3 2 a "3 4 d,T t~j j* APS they intend to build dual-energy dweihngs in Al"J -
$E
.c -
'".cfd a 'S x. gd '8 2
j85ga1 8cg service areas, the electrical supplier threatens to assess the developer advance fees for the extensfor. of electric
- gd $ #'g.g1 58 s#,jjj
$ = ~6 e g . <
gu 2 ,g .sg$ E. g.g facilities at rates 200 percent to 300 percent higher fga 2 E' % EdE" D a3E'g y than those assessed on all electric service.
"Because of the mijustifiably high advance fees APS eb j=S2 *P g 5.= 3 threatened to assess them, possible delays by APS in
.!:$ it e 8$**g E ax 23a = " 3 a3 a ,- installing such services and the unlikelihood of a t substantial refund, many of these developers were I
~
c'*2 1 d
".S*F'E E $2 3. 5 ".t 2 g f. E 3 5 = 8'e *'
2 $3d f. E5 coerced into installing all-electric facilities in their developments,','according to the complaint. j
=M'.$_$8.h$"j h
- j.
E'
.5 <i.'E ESEl i$ g E h. a g y* y * = J p 3 8 *
- 3 9, , WI .E = d a.j x c_3.,
Southwest Gas marketing officials say they have -
contacted approximately 90 developers in the Phoenir .'
, e
' metropolitan area,many of whom expressed interest in ~
building homes with natural gas service were it not for -
85 h$ $ h E880 $ j.3$j $ " Cf .E"Aag 8 'j g, --
' APS'line extension charges.
2 "All-electric homes cost ratepayers more in the long F j,o e f #88.g $ "Ia* = i5
- run, because they must support the greater investment
$Egg -
in the wer planti required to su ply the increased W.E 2 fg j'E E E d.jj i. *$,$ o og deman for electricity,"says Dante istone, director of 5 @
- $ .g
@j,gg.oay,ggd 8 g# 335 a.S $ O ,,,
3* 3.5 communications for Southwest Gas' Papago division. ,
i j U E y).]>gEg$
4 E.sso :y3 5 e- e . = 8.a C5. 8 $ . APS
" .-__... intends
. .: s,n to meet this self-created de
/.
e e e APS wants 'nterim hike; may ask courss !,
To seek 8.6% rise. ' company's revealed Monday, chief financial officer increase last May. Ilearings on the operating Unit 1 of the Palo Verde make it difficult for the company t Lv y
Claims regulators- proposal wi'l begm March 27, about Nuclear Generating Station, which regain the "A" hond rating it lost in Executive vice president Henry 10 mon hs after the filing. is expected to be operating com. 193't and could even lead to O Sargent said the action stems from "We don' anticipate a decision mercially in the spring.
dec,ide too slowly concerns that the commission is on that reqkt for at least six to possible downgrading of the currem APS is among seven utilities "IllW" rating.
%y FRANK TURCO g-h taking tco long to act on APS' eight month fSargent said. involved in the $9.3 billion, triple.
adzona Repduc $taff request for a permanent rate in. 7 I.ower ratings make it more bS[*8[e crease, He said that the $78.2 million the reactor plant being built west of difficult to attract investors' increase would produce annually is Phoenix.
Arizona Public Service Co. plans "We certainly hope the commis- needed much sooner, and that if "We may have to consider court If APS' costs are not in the if we don't get an interim rate to csk the state Corporation Com- sion will listen to us," Sargent said APS doesn't get it, the company's company's rate base when Unit 1 increase,"Sarg mission in the next two weeks for during a meeting with the editorial credit ratings and its ability to begins operating, the company will an interim electric-rate increase of board of The Arizona Republic /The horrow couM be harmed, lie maintained that the time it ct lecst 8.6 percen', and it may go Phoenix Cazette. lose about The increase, he said, is needed Sargent said. $6 million a month, takes for the regulatory panel to to court if it doesn't get it, the ,APS filed for an 8.6 percent to help pay for building and Such a loss, he claimed, would
. . . - Aps, n7 APS Utility Consumer Office, which has int-d in me in, aes rate hearing.
Continued / rom BJ She said APS is to blame for reacit decisions in rate cases has most of the delays, first by not been lengthening the past several filing the case earlier, as it indicated yeart it would do in 1984,and then by not The last five cases filed by APS responding in a timely fashion to took an average of 10 months to requests for financial information decide, he said, and the most recent from other participants in the ca.,e.
- took 16 months. "There's a certain arrogance in The interim rate increase sought their demands for an interirn rate i by APS brought an immediate increase when they hav I rector reaction from Susan Williams, di" Willicms of the state ltesidential
' said. "The commission and publicprudently as m will not tolerate such demands."
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . . . _ _ _ m_ - _ _
EXHIBIT H-1 THE ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION (AFUDC)
AS PERCENT OF NET EARNINGS APS Electric Industry 1980 82% 52%
1981 66 49 1982 72 50 1983 85 47 1984 82 43 9/30/85 67 39 (12 mos.)
5-Year Avg. 77 48 (1980-84),.
APS Ranking in 80-Utility Sample:
12 Months ended 9/30/85: 64th from top 5 Years -- 1980-84: 67th from top Source: Regulatory Research Associates - UTILITY FOCUS l
l a
S
_ m 1
EXHIBIT H-2
)
l g f g 2.73 e -
/ ,
l APS lide;tfy-YfL/ i i
will ~ request i 6 rate hikes i
~ Arizona Public Service Co.
is' expected to file a formal request with the state Corpo-ration Commission on Friday ,
for an 8.6 percent rate increase ,
'in' January and .five annual i increases of.5.9 percent, the
~
first beginning in 1987.
The complicated rate pro-
. posal and supporting docu- ,
ments are being reviewed and i will be filed as soon as possi .
i ble, APS spokesman Kevin Mosley confirmedTuesday.
'f Mosley said the amount of revenue that the incr' ease would produce ~ annually and i a
- what effect it would liave on customers' monthly electric :
bills.had not yet been ,calcu-f lated. . . ,
. Word that the utility would .
seek a six-step increase first was made public at the com- '
pany's annual meeting last month by Keith Turley, APS .
. chairman and. chief executive' i officer. ,. , ' l' ' , .
"g. 4, , .
, 'He said the additional reve '
> nues Os deeded to' pay for the.
7com'pany's~ share' of. the Palo ,
"Vefde' ' Nuclear ' Generating Station,.which is being built
) 55 miles west of downtown Phoenix. -
. [
4."The 49.3 billion plant is
.,scheduled to begin producing its first electricity before the' ' .
end of this week.- . e. c -
- 4 ... . .. .vtn. .
r ,
4 . - -
.,e .
y
.*.o eo .- e e
\
s
- EXHIBIT I-1 Radioactive water douses 2 ff - y By Victor Dricks W Phoenir Gazette /./3-gf did not exceed fede'ral regulatory stan-da. ds set to protect the safety of nuclear Two worGre contaminated with plant employees.
mildly radioactive water when a valve )
broke on a water pipeline at the Palo "One of the workers received skin Verde Nuclear Generating Station. contamination, but it was not considered ,
Greg Cook, a spokesman for the U.S. hazardous," Cook said today. ;
Nuclear Regulatory Commission, said the accident occurred late Friday night.
He said details about the accident ,
were sketchy. But he said it occurred -
But Dan Canady, a spokesman for the when the workers were trying to identify Arizona Nuclear Power Project, said the source of a leak from the reactor today he did not know about the coolant system, which contains mildly incident, radioactive water. ,,
"This is the first I've heard about it," Normal procedure would be to imme-he told a reporter. -
' diately douse the workers with water in !
Cock said the workers-whose names an attempt to wash radioactive particles '
were not immediately available - re- off their bodies, Cook said. But he added, ceived very low doses of radiation that he did not knowif that had been done.
. 2 0. ___......__ ._ ... _._ .
l
e e 6 M
H H
F3 s
I N
g .....
' Hot' water splashes 2 steAtplant ?
Greg Cook, a spokesman for the y.S. Nu.qleat a...I But,he addesl,"We don't require * the utility
/ _) g - g (y Cy JOHN STAGGS * '
apoca n punisc sist Regulatory Commission in Walnut Creek, Calif., said,4 the media." f t t) 4'"b.- He ex Two employees of Palo Verde Nuclear Generating "They had lines were isolating a leak wheninthe the boltreactor.
on a valvecooling brol(o andsystem'.
p They.I,.; 'ublic require a a media report.
. . - ; The reactor in Unit I has been out of commission ~
l Station Friday when were exposed a valve's packingto "slightly failed, a plantradioactive" water the packing blew out." .
spokesman said Monday. . .
They were openmg a pressurizer-isolation valve, millirems inside their bodies and 50 millirems on their, Ca poorly synchronized progratri during the test.
~
and the valve-stem packing gave way, said Dan skin " i "It wasn't correctly tuned for'the 100 percent" le' vel,"
Canady, who declined to identify the workers. "The ,,
. The exposures were way under the dose limit,',, he he said. .
i M . . Ti.W %d u ,eii '
amount of exposure was less than I percent of what is said. ', The test, called a. loss-of-load procedure, is ainoYd
allowed per quarter (of a year)." The avprage chest X-ray exposes the patient to from the last before the reactoribeginstits final test to enter The allowahle non-penetrating radiation per quarter 20 to 30 milhrems of penetrating radiation, about 1., commercial service.Jhe.finalites6 sis 3to run at' full ~
is 7,500 millirems, Canady said.
percent ,of the annual allowable limit under2 the ' power for100 continuou lie identified one worker as a radiation-protection commission,a standards. .
n technician and the other as an auxiliary operator. An Cook said the leak and the valve have been repaired! before March 1, or be penalized by the Arizon auxiliary operator, Canady explained, acts under the Canady said plant managers did not consider the Corporation Commission. Reactor op direction of the control-room operator, manually event serious enough Friday to report to the media.previous self-imposed deadlines of Nov. a I and Dec. 31 '
performing tasks that cannot be done from the c The plant spokesman said operators now don't ha control-room eonsole.
"It just wasn't a big thing to them," he said< after any' idea" of when they will restart the reactor l,bb The two, who were uninjured, were given showers, " It ishe being contacted by The Arizona Republic."may have a better idea on Tuesday." 'p-a reportable event to us," Cook said. -
said.
_ _ _ ~
- . 1
.. . 1 EXHIBIT I-3 l
l l
l l
P
, Con dlInath f i reactor workers
'not identified Arizona Nuclear Power Project
" officials have declined to identify the two workers who were contami- {
'nated with mildly radioactive water
- when a valve broke on a water bipeline at the Palo Verde Nuclear
, Generating Station.
- "We have to protect their p'ri-yacy," Palo Verde project spokes- ;
man "
Dan Canadysaid Monday. !
'c- We consider it a very minor ontamination "he said.'"Ifyou are Working in an, auto repair gar, age jou're going to ge reasy from time to time. The wor era are in areas
'where there is radiation."
i . .: Late Friday, an auxiliary opera-
.' tor whose job it is to manually
$perate plant equipment and a tadiation protection officer were involved in a radiation accident at the plant sa') Greg Cook a spokesman,,for the U.S. Nuc, l ear
, Regulatory Commission. '
{ '*
, Cook said federal privacy laws '
evented the NRC from releasing voteinjured names'of duringthe theworkers who~ were.
inc,ident that p,perating.
occurred . while the plant was not s .\
=
l l
EXHIBIT J-1 Palo Verde wires cui:;. :
sabotage suspected .. .
l By SAM STANTON
&[tygona Republic Staff getting around to that particular j 6-/ . system, We began trouble-shooting,"
~ For the fifth time since July, and then we found the clipped officials at the Palo Verde Nuclear wires. !'
Generating Station are investigat. "It's too early to tell whether the i ing the possibility of sabotage, snipped wires,were de Plant operators notified the U.S. or ifit was accidental,,liberately he said. -
i cu,t Nuclear Regulatory Commission Although Unit 3 is 99 percent i late Thursday that they are study- e mplete, that area of the triple-re- ;
ing an incident in which two wires a,ctor plant still is open to construe,- I were cutinside an instrument panel tion workers, Canady said. 1 in the control room of Unit 3, which Nuclear fuel is scheduled toe b: j is still under construction. loaded at the umt durmg the first j The cut wires, which were con sthree mo,nths of 1987, he said, a,nd nected to an instrument that moni- the umt is expected to be operatmg tors the amount of water flowing to by the third quarter of that year.
a spray pond beside the unit, were The cpray pond is used to help-found Tuesday, plant spokesman cool the plant afterit has been shut ,
Dan Canady said. down, Canady said, and damage to The wires were found after plant the measurement device would not
' operators noticed Saturday that be serious, because of backup ,
there was a problem with the systems. {
a instrument. But the NRC was not Plant peraonnel are conducting j notified then because "at that the investigation, he said, and noi j point,'ve didn't know exactly what law enforcement agencies have $
we had," Canady said, been notified. .
~
"On Tuesday, whenfwe weg - '
--Sabotage, B6
~
a Ota @ fourth, in Unit 3, involved rags being stuffed into an erectric i breaker and paper being placedinto '
Continuedfrom B1 tracks that connect to a breaker
-box.
~
Since last summer, investigations
), have
. . been conducted into fodr The plant's most serious problem similar m.eidents at Palo Verde. But came m February 1984, when' plant operators said they could not' $150,000 worth of electrical cables find enough evidence to determme were cut, whether the problems were acci.
dents or sabotage. Arizona Public Service Co. is the manager of the project for a' Three incidenta in Unit 2 in. consortium of Southwestern utili.
volved switches being flipped. The ties that own the plant.
4 b
- r. o EXHIBIT J-2 E.8 Fri. Jon. 17.1986 ' The Phoenix'Ca:ette !
Sabotage again suspected at A-plant the triple. reactor plant still is open to construction ;
By The Associated Press workers, Canady said.
Officials at the Palo Verde Nuclear Generating Plans call for nuclear fuel to be loaded into Unit 3 Station are investigating another case of possible during the first quarter of next year, Canady said sabotage, the fifth such investigation at the nuclear plant since July, officials said. The spray pond is used to help cool the plant after it The U.S. Nuclear Regulatory Commission was has been shut down, he said, and damage to the notified by plant operators late Thursday that they are measurement device would not be serious, studying an incident in which two wires were cut inside backup systems.
an instrument panel in the control room of Unit 3, He said plant personnel are conducting the which ts under construction. investigation and no law. enforcement agencies have Dan Canady, a plant spokesman, said the cut wires been notified.
Investigations have been conducted into four similar were connected to an instrument that monitors the amount of water flowing to a spray pond beside the incidents at the plant since last July. But plant unit.The damage was discovered Tuesday, he said. operators said they could not find enough evidence to determine whether the problems were caused by The wires were found after plant operators noticed ,.
Saturday that there was a problem with the accidents or by sabotage.
Three incidents in Unit 2 involved switches being instrument, but the NRC was not notified then because "at that point, we didn't know exactly what we had," flipped. The fourth, in Unit 3, involved rags being stuffed into an electrical breaker and paper being Canady said.
placed into tracks that connect to a breaker box.
"On Tuesday, when we were getting around to that The plant's most serious problem came in February particular system, we began trouble. shooting, and then 1984, when $150,000 worth of electrical cables w we found the clipped wires," he said. "It's too early to tell whether the snipped wires were deliberately cut or The plant, located 50 miles west of downtown Phoenix, is owned by a consortium of electric utilities ifit was accidental" Although Unit 3 is 99 percent complete, that area of in Arizona, New Mexico, Texas and Californ.-
k
exa 8 r a-3 mmey ,mm.yte.to.
l PaTo Verde 'saboi:ac.e' baff;es APS; 5 cases ciscoverec since July By JOHN STAGGS Arizona Repuh!!C Man.
hO Plant ' satisfactory,' F1.
~
0fficials at the Palo Verde Nu-clear Generating Station say they He said any concern he might are baffled by the latest incidents of have is over the delay at lower apparent sabotage at the triple.re- levels of recognizing and classifying actor plant. problems.
Two electrical wires were discov- Unit 3 is 99 percent complete, ered cut in the unfinished Unit 3 of 'and is scheduled to be loaded with the plant Tuesday, but the meident nuc! car fuel during the first quarter was not reported to the U.S. of ig37*
Nuclear Regulatory Commission untilThursday. Myron Scott of the Tempe. based Responsible Energy "We're checking all the work Coalition Educatio,n sai for,d, The worst thmg orders now," spokesman Dan Can-about this is the fact that Arizona ady said. "We're going back to Public Service was late m reportmg make sur.e som,, ebody wasn't told to this incident to the NRC and cut the wires. apparently late in responding them-Canady said officials probably selves. They have been criticized in will know later this week whether the past by the NRC for responding the cut wires were the result of an late to apparent sabotage. The official work request or foul play. NRC, assumes that the longer you "There are literally thousands of wait, the harder it will be to find work orders that we have to go out who was responsible.
through yet," he said. "APS should assume it has a The wires are connected to an sabotage problem and should get instrument that monitors the police help."
amount o,f water flo, wing to a spray The incident was the fifth case of pond beside,the umt. Water m the apparent sabotage since July.Three spray pond is used to help cool the cases nvolved switches being plant after it has been shut down. flipped in Unit 2; rags were found The operatora noticed a problem stuffed into an electrical circuit with the instrument Jan.11 but breaker; and paper was placed on didn't discover the cut wires until tracks that connect to a breaker Tuesday. The NRC was not noti- box.
fied until Thursday "because we Meanwhile, Canady said, Palo didn't know what we had," Canady Verde officials are still looking at said. Monday or Tuesday for restart of Roy Zimmerman, head NRC Unit 1.The reactor has been out of inspector at Palo Verde, said, "It service since Jan. 9, when it failed a went up the management chain. major test at the 100 percent power Once it was identified at a certain level.
level of management, they flagged ' On Friday, a review of data it . revealed that the reactor's coolant
." We would like to see the pumps lost power too quickly, he notification as quickly as possible. I said, and technicians were review-don't want to say it's not a concern ing the safety significance of the of ours, but you need to differenti. power loss before reactivating the ate between an operating unit and plant.
one that's under construction." After the plant is reactivated and Zimmerman said that' because the test.is completed, Unit I will-there is no nuclear fuel on site for undergo one more major test in-Unit 3,"they don't come under our volving the coolant pumps before j security requirements." going into commercialservice. .
EXHIBIT J-4 e Sabotage .
. . ..From A-T the third quarter of 1987, is 99 p'ercent * ~
1
==p1*
Last wee:k's findings were the latest -tm in SUSNON"f6Cl
'JE . F. - .;
i Tni'e's !T"*!"L.d a"'ecN *d I Cit:Palo.Ver~d< ei 1
- tage at the 89.3 billion project. ' ' '
e' v- . - t Earlier this summe'r, someone used a / 4 p f d h pD ni, D ft h Y :
remote control panel in an* apparent .
.a,ttempt to wrest control of plant func* 'Another incident of suspected sabod
' tage was uncovered over the' weekend at
- tions from control room operators while the , Unit 2 reactor was undergoing the Palo Verde. Nuclear Generating .I hot functional testmgj,. -StationwestofPhoenix!< ~ ,
Other switches on. plant components -
. Late Saturday' technicians found two j were discovered fhpped in Unit 2, and wires cut on an instrument that records rags and computer papers were found - condensor tubes [of the Unit 3 reactor.the flowTrate o stuffed into an electrical breaker panel j -- - -* -
and onto tracks that connect to a breaker . %o other wires were found cut at the ,
box in Unit 3. !; .< /plantTuesday. 4 . f . ..3 .j In February 1985 ' more~ than J80 c.The incider.ta were the fifth and sixth 5 electrical cables were, cut at the plant,l ' times.
-causing dama ge.that cost $150,000 to' ^ discove.s!,nce red in'dications ' July,2thatof po plant officials j
._repaire 2, ! ., '7 g , tage at the,Palo Verde0,,aplant.g,tential sabo-WMaricopa ' County l' sheriff's depdW tThe'condensor uses'ltreatedisewage a '.
and Palo Verde security guards have- . effluent to cool steam into water after it investigated several of the incidents but f -hat'been used to turn the? blades of,a have not reported any success in identi." turbine g' enerator. '.The. water..then is fying the person or persons responsible. P . recirculated through:the nuclear, reactor.
Officials at the UKNuclearjteg'ufa rehested and reusedy y,gg
.. tory Commission.have beeninotified f . o%, Nu'c' lear 0Powe Arizona"
.the incidents. . - #~~ ~ ' +
'~ >mk
. spokesman Dan Canady t&lav said.r that ~ Project ,
While federal 5$ cia)have expres it was too~early to tell whethef,the act concern about them, Palo Verde waspro,sh deliberate !, or whethetthe wires hiid *j officials have, tended to discount i ear i et i been snipped as part of a air'thatwas .
~N possible significance, attributing them tol .never compl.e.te. d 2 9 , jA' .
7 M,y'"u c '
.. disgruntled workers'and employee
- care- j 9 Records indicate.that e, work on the .
J.loseness. . .. - . .
~ p i. "; n .,i 4 h; electrical panel'where the wires were cut ;
3 'Ca'nady sa'id today'that It M... ~o. ;
be inappropriate to *, draw as g rmg'n g p g t,dcui, g ,\ ,
,, among the separate nts. incide;a M ,7peonitectirn 3,:. -"QTh(;tio('wir'es thitlwife'
.'Meanwhile, technicians have restarted
' ' Tuesday.were; conn'ected to an instiu.'
the ment that tells plant operators the flow j
6hich had been shut dow. Unit i reactor, d maintenenace.jThe n for repairs'an : rate of wateFin 1 the'spraygnd besidei J reactor, was , operating.'at (68, percent 9 the Unit 3 reactor.?m.upqyj)@'g y !
,'Thelprafpdnd liaii auxiliary coolin g7 f,.f .
wpoweffar,1y,today.3 {gj'iave.the,.,rencIr.$
yOperators hope ' Tsystem.that could be 'used to cool the i v;back up to full pow, to l reactor after it had been shdt'down. . <,. ; i er later this,wiek fo
.J.they.can begm .a:fina);,se_ ries ofWUnit "*t.
3,"siheduled to be i>perating in .
tests"-}-
. . ..4 1 7dess~ned 'to' pave"tlie iray (di'the ..
.unt.'y.!ata .amm5cial.=rvice.h . &yla'n t's {' kS*e e sobetoge 4-
- L re c.wmJ..&.ca^<n.1 1
x -- . -_. _ . . _ . . - - -
i
' EXHIBIT J-5
~
Babotage
. Sabotage yearec et x
c n"-"- -
a as radioactive material is con '
cerncd.
Aam gg[* -
He said that even though there '
I
" appears to be a pattern of apparent.
sabotage, the situadon does not Palo Verde wires cut; .
require his agency's intervention-None of the previous cases has been Seventh such incident: solved.
Arizonang[/i g p[g By JOHN STAGGS
. "Usually, the utility will step up i mspection program, ho said.
,ts In the seventh case of apparent ,
Pre-operational mspections should sabotage since July, technicians pick up any roblems.
found more cut wires Saturday in "It woul be awfully hard to the nearly complete Unit 3 of the damage any of these circuits and Palo Verde Nuclear Generating ,
not have it be caught. ,We're Station. ;
concerned, but we,te not worried."
" Late Saturday morning, two Canady said the cut wires were more wires were found cut"in the discovered while workers were lower cable spreading room, just checkmg systems m, the umt. The below the control room, plant spokesman Dan Canady said Mon. w res were mstalled in 1983. ,
. He said the news media ang, day;he
'I cut wires, which did n'ot government agencies were not noti.
fled earlier because "until you start involve nuclear equipment, were checkmg, you don't know whether" t
connected to a monitor that records. somebody was told to cut the wires, the flow of water in the condenser - Myron Scott of the Tempe-based The condenser is a chambar in Coalition for Responsible Energy which steam changes to water. .
Education said, " Arizona Public The cable.spreadingrocm is used Service Company (which is in for routing cables to various electri- charge of Palo Verde's construc-cal systems in the nuclear. power plant. tion) should assume it has a sabotage problem and should get Last Tuesday technicians ~ dis. police help."
covered apparen, t sabotage to two . Three o of apparent electrical wires conr4cted to' an sabotage m,fswi yolved the cases,tches bemg instrument that monitors the ilipped in Unit 2. In the two other amount of water flowing to a spray incidents, rags were stuffed into an pond next to Unit 3. Water in the electrical circuit breaker, and paper spray pond is used to help cool the was placed en tracks that connect reactor after it has been shut down. to a breaker box, potentially break-Unit 3is 99 percent complete and ,
ing an eiectrical circuit.
is scheduled to be loaded with *
- 8. Meanwhile, Unit I was restarted nuclear fuel during the first quarter -unday mght. It had been out of of1987. : service smce Jan. 9, when it failed a Canady said the Maricopa major test at the 100 perce Count Sheriff's Office has level. Normally, the um,nt power notifi of bo'h cases of appa;been t would rerit have been restarted quickly, but sabotage, but that no assistance has been requested. engmeets , wanted to assess the safety significance of the failed test "We're in the process ofnotifying # "" '
the Nuclear Re latory Commis. j, ,' aid sion now, hesai . l The unit will undergo two more The, federal agency's sec;urity ma}or tests before going into com-regulations will not take effect until rnercial service, which is expected th' the plant's fuel arrives later thisI M '"9h billiob plant,50 miles RC spokesman Greg Cook'said *est f downtown , Phoenix, ' is
'his agency "issafety" resfonsible foi the wned by a consortium lpublic's health an insofar t h"g,hwestern utilities, eludingm,of seven
-saouge:ss-
g,
/ D Febru:ry 1, 1986 Coalition for Responsible k 'I Energy Education Commissioners 8
h*..g -
J 315 W. Riviera Drive Tempe, AZ 85282 1 U.S. Nuclear Regula y ,}
Commission <
2 Washington, D.C. 205 g.
I
[.
3 In the Matter of: -) DOCKET NOS. 50-528;
) 50-529 Arizona Public Service, et al.
4 (ArizonaNuclearPowerProject-f Palo Verde Nuclear Generating
[2 '
Emergency Relief Petition 5
Station Unit Nos. 1 and 2) ~~
6 7 RE: Show Cause Petition Pursuant to 10 CFR 2.206(a) re: PVNGs-2 License Suspension Request, Management Competence and Character 8
Proceedings Initiation Filed with NRR January 17, 1986 9 I.
10 1. The Coalition for Responsible Energy Education (hereinafter 11 referred to as " CREE" or "the Coalition"), hereby petitions 'the 12 Commissioners for emergency relief pursuant to 10 CFR 2.206(a),
13 as regards Palo Verde Nuclear Generating Station (PVNGS) Unit No.
14 2. The Coalition seeks an Order from the Commissioners suspending 15 nuclear operation of PVNGS No. 2 and the PVNGS No. 2 operating 16 license issued December 9, 1985, until such time as the Director, 17 Office of Nuclear Reactor Regulation (NRR), shall issue an initial 18 response to CREE's Petition to Show Cause, dated January 17, 1986, 19 and the Addendum thereto, dated January 21, 1986.
20 II. FACTS 21 2. On or about January 17, 1986, the Coalition filed with NRR 22 a Petition requesting relief in the form of temporary suspension.
23 of the PVNGS-2 operating license, pending completion of hearings ;
24 and requested regulatory actions related to the issue of Arizona 25 Public Service-Company / Arizona Nuclear Power Project (APS/ANPP) 26 management competence and character at PVNGS-1. The Petition was
-e602050a9a e60201 h '
DR ADDCK 0500 8 g3
~
2.
1 amended by an Addendum of added facts filed on or about January 21, 2 1986.
3 3. Said Petitions urged regulatory actions regarding~NRC-4 identified deficiencies which, in the opinion of the Petitioner, 5 demonstrated a pattern of repeated failures in areas directly under 6 the control of plant management, thereby raising the issue of 7 management competence and character. , Petitioners urged actions 8
beyond the scope of routine regulatory and enforcement actions, as 9
discussed in said petitions, including commencement of hearings.
10 In addition, CREE requested suspension of the PVNGS-2 operating 11 license, pending completion of the requested relief actions.
12 4. As set forth in the Petitions, CREE's reasoning for 13 tequesting an Order to Show Cause affecting PVNGS-2, as well as 14 PVNGS-1, was the belief and concern that pending Unit 2 startup anc.
15 Power ascension testing, conducted simultaneously with Unit 1 16 operation, would overtax management resources unacceptably and 17 thereby compromise safety at both reactors.
18 5. Although it is not possible for CREE to establish a certair 19 date f or PVNGS-2 initial criticality, low-power physics testing anc 20 power ascension testing, startup of Unit 2 appears to be immanent.
21 However, NRR has not yet issued an initial assessment of CREE's 22 Petitions, such as would be expected to include a preliminary
- 23 determination affecting immediate activities at PVNGS-2.
24 6. While the concerns regarding Unit 1 management competence 25 and character raised by CREE remain relevant after Unit 2 startup, 26 the effect of simultaneous operations was one of the central
3.
1 concerns raised by CREE.
2 7. While CREE is content to await a final Director's ,
3 Determination through normal. channels frem NRR and, furthar, to ;
4 rely for that determination on the facts set forth in its two 5 previous petitions, additional facts have come to light which 6 . CREE regards as demonstrating the urgency of this emergency 7 relief request to the Commissioners.
8 8. Specifically, CREE calls the Commissioners' attention to 9 the Nuclear Regulatory Commission (NRC) Inspection Report dated 10 January 30, 1986, dealing with the NRC-inspection of PVNGS-1 and 11 -2 conducted on November.13 through December 27, 1985 (Inspection 12 Report Nos. 50-528/85-43 and 50-529/85-44). Said period post-13 dates both the period covered by the, latest Systematic Assessment 14 of Licensee Performance and CREE's Show Cause Petition and the 15 Addendum thereto. Therefore, the Inspection Report updates the .
16 previous information regarding man.agement competence and 17 character relied upon by CREE.
18 9. In CREE's opinion, that Inspection Report clearly 19 supports its concerns that there exists a pattern of repeated 20 failures affecting diverse areas for which management is
- 21. responible and which reflect negatively on management competence 22 and character. E.g.:
23 10. In the cover letter, Region V Administrator John B. Martir i 24 comments: "...We are concerned with the level of thoroughness 25 applied to your post trip review process... increased effort is 26 warranted in ensuring that all off-normal conditions. identified unro
4 l
1 evaluated with regard to safety significance, and appropriate, i 1
2 thorough corrective action is implemented." NRC Inspection Report ,)
~
3 supra, cover letter p. 1.
4 11. The Inspection Report identified two late-submitted LERs, 5 constituting a repetitive violation (528/85-43-01).
6 12. In this context, inspector review of management correctiv e 7 action report (CAR) MA-85-0002 initiated on August 13, 1985, 8 resulted in the following comment: "The inspector stated that 9 the lack of timeliness in implementing corrcctive action for CAR ,
10 MA-85-0002 was disturbing, considering it addressed a violation of 11 Technical Specifications; although minor in safety significance."
12 13. Regarding an identified instance of poor procedural 13 adherence, the Report noted: "The inspector expressed concern that 14 basic procedure adherence must be understood and appreciated at 15 all levels of the organization for company policy to be effective-16 ly carried out. The area of procedure adherence will continue to 17 be evaluated...." (NRC Inspection Report, supra, p. 13).
18 14. Also, Mr. Martin commented: "Our concern regarding the 19 post trip review process should be viewed broadly with respect to 20 to ensuring self critical appraisals are performed in areas 21 necessitating improvements.The early phase of plant operation is 22 a critical period which requires management's attention to 23 ensure that the proper attitude toward carrying out plant 24 activities is developed and implemented." (NRC Inspection Report, 25 cover letter, p. 2; emphasis added.)
26 . . . . . . .
5.
. l 1 15. The concerns identified above are not exhaustive of those 2 expressed in the Report, but are selected as illustrating 3 instances in which management-related deficiencies identified in 4 the SALP Report and/or complained of in CREE's previous petitions 5 have continued to reoccur.
6 16. Because the emphasis of CREE's concerns is the pattern 7 of repetitive errors, we wish to emphasize that individual 8 incidents should not be judged in isolation from one another in 9 arriving at a decision on the urgency of this emergency relief 10 request.
11 17. The Commissioners' attention is also directed to three 12 apparent subsequent late-field LERs identified in the LPDR by CREE '
13 LER Nos.85-077 (2 days late);85-091 (1 day); and 85-092 (1 day).
14 18. Taken together, CREE regards these incidents as strongly-15 supporting its concerns with PVNGS management competence and 16 character and suggesting that management continues to fail to 17 learn from previous errors and appears overburdened. These 18 conclusions emphasize the urgency of this emergency relief request .
19 III. AUTHORITY 20 19. Title 10 of the Code of Federal Regulations 2.206(a) 21 establishes the right of the public to petition the Commission or 22 appropriate directors to institute proceedings pursuant to 23 10 CFR 2.202. The Commission may, pursuant to 10 CFR 2.206(a),
24 institute a proceeding by serving upon the licensee an Order to 25 Show Cause.
26 . . . . ...
6..
4 i.
1 20. The Atomic Energy Act of 1954 gives discretion to revoke, l
2 suspend or modify the license or permit of an NRC licensee.
3 (42 U.S.C. 2236.) .
l 4 21. Notwithstanding the discretionary aspect of 42 U.S.C. 2236 ,
the NRC has a manadatory duty to exercise its authority when 5
j 6 necessary, and is required to determine that there will be 4
j 7 adequate protection of the public health and safety. See 8
Natural Resources Defense Council vs. U.S. Nuclear Regulatory 9 Commission, 528 F. 2d 166 (2d Cir., 1978).
10 22. The NRC has recognized the significance of the issue of i
- l 11 management competence and character, when there exists a pattern 1
! 12 of repetitive failures for which management is responsible, as 13 raising significant safety concerns. See Houston Lighting and 14 Power Co. (South Texas Project Units 1 and 2), CLI-80-32, 15 12 NRC 281 (1980).
16 23. 10 CFR 2.206(b) establishes that the appropriate- ,
17 director shall respond to show cause petitions and institute 18 appropriate proceedings, or advise the person requesting said
{ 19 proceeding in writing of the the reasons for denying the ,
J 20 request, "within a reasonable time."
! 21 IV. CONCLUSIONS OF LAW i
l 22 24. 42 U.S.C. G2236(a) and 10 CFR 50.100 provide that a 4
< 23 license or permit may be revoked, modified or suspended because 24 of " conditions which would warrant the Commission to refuse to 1
25 grant a license on an original application..." or "for failure to 26 construct or operate a facility in accordance with the terms of i
i
- i
. ~ . - - - , - . .- . . - . . . - , , , - - - - , - - - - - , , . , ..-. -,--,.- , - - . - , . - . - . , - . . . , - - - - - - - .
7, 1 the construction permit or license...."
2 25. The evidence in this and prior petitions, particularly 3 repetitive violations of the Technical Specifications for PVNGS-1 4 and failure to effectively implement timely corrective actions on 5 repeated occasssions, meets the criteria of the Atomic Energy Act 6 and Chapter 10 of the Code of Federal Regulations as set forth in 7 paragraphs 38 and 39 for suspension of~a license or permit.
8 V. RELIEF REQUESTED 9 26. WHEREFORE, Petitioners pray that the Commissioners, 10 pursuant to 10 CFR 2.202(a) temporarily suspend the PVNGS No. 2 11 operating license, pending the intial assessment of the Director, 12 NRR, on CREE's aforementioned Show Cause Petitions.
13 27. Should the Director, NRR, act, in at least preliminary 14 fashion, on CREE's Petitions prior to expeditious Commission 15 action in the instant case and-prior to PVNGS-2 initial critical'i-16 ty, this Emergency Relief Petition to the Commissioners would, of 17 course, become moot.
18 RESPECTFULLY SUBMITTED this /# day of February, 1986.
19 20 w f i 21 M fON L. SCOTT
' Intervention Coordinator 22 Coalition for Responsible ,
- Energy Education
- J 23 315 W. Riviera Drive i Tempe AZ 85282 1 24 (602)h68-2179 j *See CREE's January 17, 1986, 25 Petition for Description of'
! Petitioner i
26 l
i i
___ _ ____ _ _ _ _ - _ _ _ _ - _ _ _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - -