Wackenhut loses Exelon contract over sleeping guards

No power naps allowed at nuclear energy plants
[Updates 01/04/08, 01/10/08, 01/23/08, 02/10/08]

The New York Times and wire services report the Exelon Corporation (NYSE:EXC) said it would replace the nuclear services arm of the Wackenhut Corporation with an in-house security force at its 10 nuclear power plants after the discovery about two months ago that guards at a Pennsylvania plant were sleeping on the job. The nuclear company was under pressure to take the action following an uproar over the sleeping incidents. Exelon put as much of a positive spin on the change as possible.

Exelon, based in Chicago, said it was acting even though a review of security at its other plants found “no significant deficiencies.” The change is to be made by July 2008. Exelon has 17 reactors at 10 plants. Officials at Wackenhut have characterized the apparent lapses as “an anomaly.”

As a practical matter Exelon will likely hire many of the very Wackenhut staff who lose their jobs as a result of the contract change, as well they should, since they are blameless relative to the incident that caught everyone's attention.

The union representing the guards put the blame on the security firm's management as a failure to perform and said the cause of sleeping on the job was overwork. The Service Employees International Union congratulated Exelon for "doing the right thing."

"The blame here lies squarely with Wackenhut management," said Tom Balanoff, international vice president of SEIU, the nation's largest union of security officers. "Wackenhut's pattern of overworking and underpaying their security guards will no longer be the norm."

"However, Wackenhut's record of poor performance continues to be of concern with 19 nuclear facilities in 13 states still under Wackenhut's watch. Other companies that have Wackenhut under contract, including Florida Power and Light (NYSE:FPL) where guards have been reported sleeping on duty, could learn from Exelon," Balanoff said.

The guards at Peach Bottom were caught on tape sleeping on duty, secretly taped by a fellow officer. The area where the guards were taped sleeping on different shifts and days, is called "the ready room." The sleeping guards are supposed to be poised to spring into action immediately if there is an emergency. The guard notified the NRC.

The images are disturbing because their job is protecting the Peach Bottom Nuclear Plant, which is one of America's largest. The video was obtained by a New York television station, WCBS, which aired it in September after bringing it to the attention of the NRC and Exelon. The video and CBS report are available online.

This week the regulators noticed. NRC directed operators of commercial nuclear power plants to provide it new information about their security practices after reports of recent lapses including this one. Specifically, the NRC said,

". . . licensees must provide such information as their actions and management controls to detect and correct behavioral problems; details on how the licensees are ensuring their employees report potential safety and security concerns; information on physical conditions at security posts; and results of any recent self assessments associated with these issues."

In a statement, the NRC said “Several of our licensees have had instances of inattentive security officers. ” Roy Zimmerman, director of the Office of Nuclear Security and Incident Response is quoted as saying, “While multiple layers of defense at each site maintained its security, the NRC is concerned that, collectively, these incidents are a sign that some licensees are not giving appropriate attention to the effectiveness of this portion of their security programs.”

In short, NRC is making it an industry problem and does not agree with Wackenhut's characterization of the incident as an "anomoly."

* * *

Peach Bottom Atomic Power Station, located on the west bank of the Conowingo Pond (Susquehanna River) in York County, PA. Peach Bottom Units 2 and 3 are BWRs capable of generating 1,093 megawatts each. Both units began commercial operation in 1974. Peach Bottom is co-owned by Exelon Generation and Public Service Electric and Gas of New Jersey. Exelon Nuclear operates Peach Bottom.

Update 01/04/08

The Washington Post has a long piece on the Wackenhut story which includes several quotes from the Union of Concerned Scientists (UCS), an anti-nuclear group. For its part Exelon offered less spin and more of a "we'll fix this" type of response. Still left with questions unanswered is why the NRC dropped the ball after receiving complaints about sleeping guards at plants in Illinois and Florida.

The Post offers readers this quote from Exelon.

"In the past, the standards were not our standards," said Craig Nesbit, vice president of communications at Exelon. "They were Wackenhut standards, and that's not what we want, and we're going to fix that." Exelon chief executive John W. Rowe added: "We had had some difficulties with them from time to time. We felt the incident with the guards was the last straw."

And from the NRC this reponse.

"More than anything else, we have to change the way the NRC responds to these allegations," said commission member Gregory B. Jaczko.

There's plenty of dirt, and blame to go around, for just about everyone who is responsible for security at Exelon's plants. The nuclear industry doesn't seem to understand that the public is spun up like a top about terrorist attacks at nuclear plants. Of course that fear is also being exploited by anti-nuclear groups like the UCS. Still, confirmed reports, with video no less, about sleeping guards at nuclear plants is should create a strong corrective response. Firing Wackenhut is a good first step because it sends a message to every other security contractor. The next steps should be to insure the utilities and the regulators never again brush off complaints about lax security.

Update 01/10/08

The Washington Post reports that Wackenhut said that its chief executive has resigned due to controversy about guards caught napping at a Pennsylvania reactor last year. Gary Sanders had been Wackenhut's chairman and CEO since 2003. Over the past year, Sanders has been faced with allegations of lapses in security at nuclear plants and a bitter dispute with the Service Employees International Union.

Last month, Exelon terminated Wackenhut's contract to protect the utility's 10 nuclear plants. An Exelon spokesman said Wackenhut standards were not Exelon's standards. The action came after a TV station aired video of sleeping guards, but Exelon also ignored complaints about the lapses, and brushed off an inquiry from the NRC.

The House Energy and Commerce Committee it would hold a hearing to look into the Pennsylvania incident and why the NRC failed to respond to a Wackenhut whistleblower who tried to draw regulators' attention to the problem of sleeping security guards. On Dec. 14, Sen. Robert P. Casey Jr. (D-Pa.) wrote a letter to Sanders calling Wackenhut's response to the guard's early alerts "unacceptable."

The whole mess is unacceptable. The nuclear industry is shooting itself in the foot with this incident because it plays into the hands of anti-nuclear groups who take these facts as justification that the terrorist threats against nuclear plants will succeed because the plant guards are asleep on the job.

Update 01/23/08

The Miami Herald reports there's more grief for Wackenhut over the way it manages security at the nation's nuclear power plants. According to the newspaper, Florida Power & Light is facing $208,000 in federal fines because firing pins were removed from the weapons of Wackenhut guards at its Turkey Point nuclear power plant.

The NRC's announcement listed four violations: two for ''willfully failing to properly equip'' armed guards, one for failing to promptly report the incident and the fourth for providing incomplete and inaccurate information about the incident.

This isn't the first time.

In April 2004, the agency reported, FPL failed to ensure that two armed guards had weapons that worked. A security officer employed by Wackenhut intentionally removed the firing pins from two weapons, the NRC said. Agency policy requires that nuclear facilities be patrolled by armed guards.

In August 2005, FPL again failed to ensure that guards had functioning weapons. In that case, a Wackenhut lieutenant removed and broke a firing pin from a weapon.

It seems from these reports the first line managers thought the guards were more likely to shoot each other or some unsuspecting plant worker than foil a terrorist attack. These kinds of reports raise the question of why it took so long for the agency and the utility to take action.

Update 02/10/08

The top man at the Nuclear Regulatory Commission stopped by the Peach Bottom Nuclear power plant Friday to check on security and deliver a message. He said "we'll be watching."

The visit comes a few months after a video surfaced showing guards sleeping on the job at the plant. NRC Chairman Dale Klein and his party toured the plant for more than four hours, checking out some of the most secure locations.

A personal visit is always a good way to reinforce an important message. No sleeping on the job.

Areva files EPR for NRC design certification

Constellation's Calvert Cliffs site
will be first in line for the 1,600 MWe reactor

Saying it had reached a major nuclear-industry milestone through work done mostly in Lynchburg, VA, AREVA asked the NRC this week to approve its design for a new reactor.

It’s the first step in what AREVA hopes will be an eight-year process. It expects a reactor will be built and operating by 2015. The application, filed electronically, would have used 12,000 pages if it were on paper according to a compnay spokesman. AREVA’s design for an EPR, or European pressurized water reactor, will be among the world’s largest with a 1,600 MWe capacity.

AREVA said its filing with the NRC, a few weeks ahead of the announced schedule, would allow any utility company that builds the reactor to qualify for federal loan guarantees during the industry’s predicted wave of advanced-reactor construction. AREVA expects that one or more EPRs will be in the first wave.

AREVA’s North American operation noted that it has paid all the $200 million cost of the EPR design, while other companies’ designs have received funding from the U.S. Energy Department.

AREVA believes its experience in starting construction of two EPRs in France and Finland will speed up the NRC’s review. The filing this week “supports the certainty of 2015 completion for the first EPR to be deployed in the United States,” AREVA said in a news release.

Constellation Energy (NYSE:CEG) and AREVA formed UniStar in 2005 to deploy and operate a standardized global fleet of EPRs. AREVA is the first reactor supplier to work with a U.S. customer on design certification. Constellation Energy and AREVA are working on a license application to add an EPR to the Calvert Cliffs nuclear generating plant on the Chesapeake Bay in Maryland.

The next step in the process is expected to occur in late February when the NRC gives a thumbs-up or down after its initial review of the designs.

Mitsubishi & Areva plan mid-range reactor

While Areva was filing its giant EPR design with the NRC, it was also working to target the mid-range of the nuclear reactor market. Reuters reported on 12/7/07 Areva said its joint venture with Mitsubishi Heavy Industries Ltd was now "fully operational," and said it expected the design of their 1,100 megawatt nuclear reactor, said to be a PWR, to be ready for licensing application at the end of 2009.

The French state-controlled nuclear reactor maker announced the joint venture, named Atmea, with Japan's Mitsubishi Heavy Industries last September.

Duke files for two units with NRC

The two William States Lee III reactors
will have a capacity of 2,234 MWe

Reuters reports that Duke Energy Corp. (NYSE:DUK) has filed with the NRC to build a two-unit nuclear power plant in Cherokee County, SC.

The request is the fourth combined construction and operating license application submission by a U.S. company for new nuclear units, Duke said, but the first to request permits for an entirely new plant. Duke's application requests permission to build two units with a combined power generating capacity of 2,234 megawatts. The units will be two Westinghouse AP1000 reactors.

The NRC expects to reach a decision on Duke Energy's application by mid-2011, which will set the company on course to bring one reactor online by mid-2016 and the other by January 2017. The NRC has certified the Westinghouse units' design, which will be used for the first time in the U.S. at the Lee Nuclear Plant. Westinghouse sold four AP1000s to China earlier this year.

According to the Spartenburg Herald Journal, Duke Energy recently submitted concurrent applications to the North and South Carolina utility commissions requesting support for its plan to spend $230 million by the end of 2009 on pre-construction phases of the project. The COL application process will cost "millions," said Rita Sipe, a Duke Energy spokeswoman. At least part of that money could eventually be recovered through ratepayers. The initial filing with the NRC amounts to more than 8,000 pages of paper.

According to the NEI blog, Duke Energy is the fourth company to submit a COL application to the NRC under the revised licensing process, and the first to submit an application for a greenfield site. The Duke Energy application uses TVA’s Bellefonte COL application as the Westinghouse AP1000 reference application.

Ruth Sponsler, a writer and blogger on nuclear energy, notes the following information about the plant. William States Lee III was the grandson of one of the founders of Duke Energy and was the first Chief Engineer at Duke as well as a former CEO at the utility.

The NRC has said it expects to receive 30 applications for new nuclear units in the next two years.

NGNP costs said to be higher than expected

The plant won't be built for another eight-to-ten years
[Updates: 01/19/08, 02/12/08]

Platts reports that demonstrating the commercial viability of a high-temperature gas-cooled nuclear reactor (HTGR) capable of producing both electricity and hydrogen could cost between $3.8 billion and $4.3 billion, according to estimates from three contract teams competing in the US Department of Energy's Next Generation Nuclear Plant (NGNP) project.

That's a $500 million 'swag.' Of course if you are projecting costs for a first-of-a-kind nuclear reactor that won't even start construction for another decade, you'd probably want some slack in your numbers too.

The project is aimed at developing an HTGR by 2021. A prototype reactor is to be built at the Idaho National Laboratory (INL). The teams chosen to complete initial designs were led by Areva NP, General Atomics and Westinghouse.

At press time the latest cost report from funding awarded in 2006 was not available on either the DOE nor INL websites. The $8 million paid to the three companies to produce the study was awarded by DOE in October 2006. At the time DOE officials were confident about the project and its likely outcome.

"These three commercial teams, broadly representing nuclear and other energy sectors, bring an important commercial perspective to the NGNP research and development initiative," DOE Assistant Secretary for Nuclear Energy Dennis Spurgeon said. "Their involvement will help us focus our research and development activities as well as establish the functional requirements for the program."

Request for Expression of Interest

INL released a new request for expressions of interest on NGNP last July. According to World Nuclear News three companies could be expected to contact DOE in response. Westinghouse is part of a coalition of companies supporting the Pebble Bed Modular Reactor (PBMR) for the NGNP project. It is joined by South Africa's PBMR Pty and Institute of Nuclear and New Energy Technology (INET), China's Tsinghua University, the Shaw Group, and, Sargent and Lundy.

NGNP is a very high temperature reactor concept capable of producing high temperature process heat suitable for the economical production of hydrogen, electricity and other energy sources. The NGNP research and development program is part of DOE's Generation IV nuclear energy systems initiative aimed at developing next generation reactor technologies and is authorized by Congress in the Energy Policy Act of 2005. More on this below.

A little more background music

In May 2004 DOE released an RFP for a ten-year contract for the INL. It invited firms to submit “competitive proposals” to establish four nuclear energy functions (1) research, (2) development, (3) demonstration, and (4) education. ubsequently, the government awarded the contract to the Battelle Energy Alliance.

Separately, in 2004 the government released a request for information and expressions of interest for the next generation nuclear plant (NGNP) which is to be designed to be smaller, safer, more flexible, and more cost-effective than any plant operating today. When the current INL contract was released for bid in 2004, DOE said the NGNP plant could cost $2 billion.

At the time, that is in 2004, the real “prize” associated with the INL contract was seen by some industry observers as a licensed NGNP design and a completed first-of-a-kind operating NGNP plant which will emerge from ten years, or less, of government-subsidized nuclear R&D activities or by 2015. This plant would be a 300-600 MWe reactor built in Idaho. At the time DOE said in a formal announcement its expectations for the NGNP were;

• Generate power at a cost of less than 1.5 cents/KwHr
• Produce hydrogen at the equivalent of gasoline worth $1.50/gal
• Be capable of being constructed at a cost of less than $1000/kw.

Three years later it is apparent that none of these numbers are likely to be attained.

In September 2006 the U.S. General Accounting Office concluded that DOE had an ambitious set of objectives for NGNP and that progress with the program was slower than expected. GAO also said in June 2006 that DOE was distracted from NGNP by its emphasis on the massive nuclear fuel facilities planned under the GNEP program.

However, in June 2007 Idaho Congressman Mike Simpson announced INL's research efforts will receive substantial increases for 2008, including $70 million for NGNP and $20 million for upgrades to the Advanced Test Reactor and the construction of new buildings. Congress is now rushing towards an omnibus funding bill. It is too soon to know whether that money will be included in it.

What is an NGNP?

According to the Idaho National Laboratory the Very-High-Temperature Reactor is a graphite-moderated, helium-cooled reactor with a once-through uranium fuel cycle. It supplies heat with high core outlet temperatures which enables applications such as hydrogen production or process heat for the petrochemical industry or others. It is also known as the Pebble Bed reactor and is cooled by helium. China and South Africa are much further along in the development of the technology.

Go to the INL web page for a plain English description of a VHTR and a graphic diagram of components. Some industry analysts say the small size and modular design of the plant make it ideal as an alternative to very large reactors which come in at 1,000 MWe. China's pebble bed design is coming in at 200 MWe.

Update 01/19/08

Platt's Nucleonics Week, subscription only, reported on 01/03/08 that all four contractor teams put the cost of building a 2,000-2,400 MWe plant at approximately $4 billion in current dollars. Platts also reported that DOE had released the document number of the report INL/EXT-07-12967.

Platts also gave some additional information about the timetable for the NGNP. According to the Nucleonics Week report, the project is divided into two phases. The first phase ending in 2011 will focus on selection of a hydrogen technology and initial reactor design. The second phase includes transition from R&D to final design, construction, and operations start-up in 2018.

Update 02/12/08

The INL report on NGNP design and costs is now on the INL external website. The path to the document is as follows. Go to the INL external home page. Then click on publications, then technical publications, and then search on the document number: INL/EXT-07-12967 or you can try this shortcut http://www.inl.gov/technicalpublications/Documents/3867694.pdf Be advised the report is 637 pages and 10 Mb. Have a fast connection, a lunch break, or a lot of patience.

General Electric seeks market solutions for spent nuclear fuel

Computer simulation and full scale testing of components are part of the plan

Defying conventional wisdom that the only destiny for spent nuclear fuel from commercial nuclear reactors is long-term storage, General Electric says there are big dollars at the tail end of the nuclear energy value chain. GE thinks they can bring profitable solutions to market.

Speaking to the Idaho Section of the American Nuclear Society this week (12/06/07), Eric Loewen, a senior nuclear engineer with GE's Wilmington, NC, operation, described several initiatives the company is taking in this area and its currents scope of business.

Loewen is something of a folk hero to the nuclear scientists and engineers at the Idaho National Laboratory, as he used to work there, and the hotel banquet room was packed for the dinner meeting.

From a business perspective Loewen said, GE has a 60/40 stake in the GE-Hitachi partnership in the U.S. to build and market GE's ABWR reactor design. Loewen pointed out six plants have been built so far, four in Japan and two in Taiwan. Loewen called the ABWR a "road tested" reactor. Further, Loewen said, two more have been specified in the COL license application NRG submitted for its South Texas Project to the NRC in September. This past week NRC formally accepted the application which starts the 42-month clock on the license review.

The situation with the new GE/Hitachi ESBWR is less mature. The design has been submitted to the NRC for review, but the agency is clearly unhappy with the document having reportedly submitted over 2,000 questions about it. GE will respond to NRC's questions, Loewen said, because the firm believes that demand for nuclear energy will increase significantly as demand for electricity grows globally.

Advanced Recycling Center

GE is developing an advanced recycling center for spent nuclear fuel, and has also proposed one for its Morris, IL, spent fuel storage site. The purpose of the effort is to prove the business case that spent nuclear fuel can economically support a fast reactor. To do that Loewen said, the price of electricity must drive demand for nuclear fuel. GE believes that as fossil fuel electricity prices rise that this will create more market space for commercial nuclear energy.

The GE facility is among 13 sites in eleven states under DOE consideration for three different facilities. The Global Nuclear Energy Partnership GNEP program anticipates to be a year-long selection process with a decision in June 2008. At these facilities, the GNEP will recycle spent nuclear fuel and destroy its long-lived radioactive components, separating spent nuclear fuel into reusable and waste components. New nuclear fast-reactor fuel would be derived from the components.

In terms of processes, GE will not use an aqueous system. Loewen says there are too many environmental legacy issues. Instead, GE plans to investigate electro-refining as a "prudent GNEP starting point." He said the nuclear fuel recycling business plan has three elements.

• Licensing & design issues
  
• Simulation of a full scale facility
  
• Component testing at full scale
  

GE needs a test facility, Loewen said, and thinks that the Idaho lab might be a good candidate for one. The reason is GE's other nuclear facility, located in California, is now surrounded by suburban development. The Idaho site includes a remote space, which is the size of Rhode Island, located 45 miles west of Idaho Falls, ID, and has secure access and a trained workforce. Also, unlike Idaho Falls, which strongly supports the GNEP program, people in Morris, IL, are irate about it and came out in force at hearings to oppose it last Spring.

Loewen also mentioned that advanced computational simulation is needed to design the facility and test assumptions about the electro-refining process. He pointed out that Boeing used simulation to design its advanced jetliners and that nuclear power plants can be developed using the same kinds of high powered computer tools. He noted that INL is developing its capabilities in this area. The engineering goal is to build a full scale reactor to burn recycle spent nuclear fuel from the electro-refining process. The business goal is to prove the economic case for the advanced recycling center, and show the payback in terms of capital cost per Kw/Hr.

GE is not the only GNEP applicant who wants to use the INL site for advanced nuclear fuel and reactor projects. There are two other proposals. One is by EnergySolutions for a site near Arco, ID. It would involve fuel reprocessing and fabrication. The other is consortium including Areva, Japan Nuclear Fuels, and BWXT that would cover the complete range of GNEP facilities at the Idaho site.

Near terms prospects for building these facilities are not good. The National Academy of Sciences recently submitted a report to Congress criticizing the program as lacking scientific peer review. A group of eight Democratic Senators sent a letter to the White House asking the President to stop the program. The pending 2008 Energy appropriation halves the budget request to less than $200 million. If anyone is going to prove the business case for re-using spent nuclear fuel, it will have to be done entirely by the private sector. The government has tied itself up in knots, as usual, and is unlikely to be a major funding sponsor of the work.

Laser enrichment of uranium

In other remarks Loewen mentioned that GE is working hard to bring its laser enrichment with isotope separation technology to market. The technology was acquired from Silex Systems in Australia in 2006. GE has the exclusive global rights to launch the uranium enrichment technology. The firm plans to build a full-scale U.S. facility. Construction is underway to build a test loop at the Wilmington, NC, location. The implementation process is;

(1) Test loop
(2) Lead cascade
(3) Initial production module
(4) Full commercial plant

In terms of a time frame, Loewen said, "we have quarterly targets to meet. This is not an R&D effort." In response to a reporter's question, Loewen declined to name a date for the full scale facility, but did say it would be prior to 2013 which is when the current U.S./Russian nuclear fuel agreement runs out. In a document on GE's corporate web site the firm said it anticipates test runs will start in 2008.

Utility support for laser enrichment

Last October Exelon and Entergy signed non-binding letters of intent to contract for uranium enrichment services from GE-Hitachi Nuclear Energy (GEH). The utilities may also provide GEH with facility licensing and public acceptance support if needed for development of a commercial-scale Global Laser Enrichment (GLE) plant according to a report by World Nuclear News.

Site selection and commercial licensing activities are currently underway to support a projected start-up date of 2012. The commercial laser enrichment facility would have a target capacity of between 3.5 and 6 million separative work units (SWU).

Exelon and Entergy, the two largest US nuclear utilities with some 28 nuclear power reactors between them, are the first utilities to sign letters of intent for the product and are longtime customers of GE and Hitachi.

Update 01/11/08

The Department of Energy took most of the GNEP sites off the table in December by opting to only consider sites that were within the boundaries of federal national laboratories at Argonne, Savannah River, and Idaho. The action to stop consideration of other sites, including Morris, IL, as GNEP sites, in the programmatic environmental impact statement for GNEP, is a reflection of a lack of congressional support, and severely diminished funding, for the program. GNEP is now mostly a long-term R&D effort and is unlikely to build the multi-billion dollar facilities it once envisioned.

The market opportunity to recover the vast amount of useful energy in spent nuclear fuel remains available if a firm, such as General Electric, can develop the technologies to safety recover it without the environmental issues associated with aqueous recycling methods.