Friday, April 20, 2012

Jaczko denies everything

When a politician gets in trouble in Washington, it is almost always about one of two things - money or women

The classic instances of a politician getting in trouble in Washington usually include being found out to have spent time, like overnight or longer, with someone who was not their spouse.

Examples include President Clinton and Monica Lewinsky, Senator Gary Hart and Donna Rice, and Wilbur Mills with a stripper called the "Argentine Fire Cracker."

Less often people get in trouble for being difficult to get along with especially if they are male managers with female subordinates.  Accusations of harassment, erratic behavior, and hair on fire temper tantrums rarely rise to the same level as sexual escapades. This is not the case with NRC Chairman Gregory Jaczko who has been in hot water over the harassment issue and the women he works with since last Fall.

Why does Jaczko matter?

So it is with some puzzlement that the dysfunctional interactions of the members of the U.S. Nuclear Regulatory Commission (NRC) have garnered so much press attention.  it just does not rise to the occasion of a full blown Washington scandal.   There is no sex, or money, involved in his sky high media profile.  This ought to be boring, but apparently in the cerebral Obama Administration it's not.

That said this week was particularly a bad one for the NRC's chairman Gregory Jaczko. He got blamed, again, for mistreating the women who work with or for him including NRC Commissioner Kristine Svinicki.

What happened is the his mentor and political patron Sen. Harry Reid (D-NV) took off on a revenge riff against Svinicki claiming she "lied" to the Senate in her initial confirmation hearing.  Last December during a House Oversight Committee hearing, Svinicki was forthright in her criticism of Jaczko and so was NRC Commissioner Bill Magwood.  The difference is Sviniki has a long history of tangling with Jaczko over Yucca mountain when both were Senate aides.

Reid was joined with a "me too" chorus by Democratic Senator Barbara Boxer (D-CA) who suffered from a case of selective amnesia failing to recall she asked Svinicki the very questions Reid now says she lied about.

The White House, which had been sitting on the senate nominatation for a second term for Svinicki, who holds a nominally "republican" seat on the NRC, took the air out of protests from Senate Minority leader Mitch McConnell (R-KY), by saying it would now send the paperwork for action.

Barn burning talk

A "barn burner" speech
is so-called due to its
power of spontaneous
combustion of anything
near it
In the middle of this, Kimberly Strassel, a fire breathing member of the Wall Street Journal editorial board, burned down a couple of barns Friday morning (April 20) with a column that accused the White House of being (a) anti-nuclear, and (b) starting a "war on women."

This broadside is supposedly designed to counter charges by the Democrats the various republican primary candidates for president are holding their own war on women over reproductive rights, among other issues. They are, but that's not what Strassel has on her mind.

"Ask Kristine Svinicki, a commissioner on the Nuclear Regulatory Commission. Ms. Svinicki is a respected nuclear engineer who was unanimously confirmed to the NRC in 2008, and whose term is up in June. Senate Majority Leader Harry Reid is now actively waging war to keep Ms. Svinicki from being renominated, as punishment for her role in exposing the behavior of Mr. Reid's pet appointee to the NRC, Gregory Jaczko. For Ms. Svinicki's efforts to protect female staffers, she has been attacked and slandered by Democrats."

Calling the fire brigade

NRC Chairman Gregory Jaczko
Apparently, this was too much for the White House which most likely was responsible for having dispatched NRC Chairman Jaczko to an unprecedented and previously unscheduled press event at the National Press Club Friday afternoon.

Update Eliot Brenner, Chief of Public Affairs at the NRC, denies that the White House dispatched Jaczko to the press club. 

In his opening statement, which he repeated three more times in response to questions, Jaczko said "categorically," accusations that he "mistreats women are untrue."

He declined to comment on Svinicki's nomination, said he hasn't talked to Reid in quite a while, and said he has not been called to the White House to discuss the political fuss that has been made about his tenure at the NRC.  

Asked about a pending NRC Inspector General report which is rumored to document instances of his alleged bad behavior, he declined to say anything at all.  Readers should know that when an agency IG writes such a report, the subject of it gets a chance to read the draft and submit formal comments.  So while Jaczko won't say anything about it, he surely must have read it.

Asked why he even had a hastily called press conference on a Friday afternoon, the dead end of the weekly news cycle, Jaczko said, improbably, that he does not play golf and thought it would be a good time to clear the air about a few things.

What else you got?

In other items discussed in the press conference, Jaczko defended his votes against licensing the Vogtle and V C Summer construction and operating licenses.  The votes were 4-1 in favor and now the first four new reactors in 30 years are under construction in the U.S.  He said he would respond in writing to questions from the Senate about his "no" votes.

With regard to San Onofre, he said there is no date, e.g., August 31, for re-start and he emphasized that the utility must demonstrate technically that it knows what is causing the excessive wear on the steam generators. what to do about it, and have a plan to do it.

12 challenges no waiting

Jaczko did say he's met with senior staff at the agency to identify 12 key issues, or challenges, that face the agency.  One of them is managing relationships with 36 states that are delegated the authority to issue and regulate radioactive materials licenses for ISR uranium mines, uranium mills, and similar facilities.

Recently, the NRC has come under fire for sending a letter last February to the State of Colorado which appeared to intervene in a decision by that state to issue a permit for a new uranium mill in Montrose county on the western slope. This month the agency sent another one, after being ripped by state officials, saying they didn't mean it.  Jaczko says the real concern is whether states have the funds to hold up their end.  He didn't mention the Colorado incident.

Asked about licensing SMRs, Jaczko stated the obvious which is the NRC should be able to move ahead with LWR designs, but that HTGR and other advanced technologies will need more work.

The return of non-denial denials

In summary, Jaczko denied talking to the people who care the most about what he does and says, e.g., Sen. Reid and the White House, denied that he mistreats women, denied that he cares about Svinicki's reappointment, and defended his votes to deny licenses to four new nuclear reactors.  In short, he denied everything.

In the bad old days of the Nixon presidency, then Vice President Spiro Agnew would have been called out as making a stream of statements like this as being "non denial denials."

The phase was made famous in the movie "All the Presidents' Men" about the Watergate scandal.  Agnew resigned as Vice President after admitting he took bribes while serving in elective office in Baltimore, MD.

The lesson, from a media perspective, is that the more you protest about media coverage of alleged wrongdoing, the higher the profile that coverage gets in the press. So while no one has accused Jackzo of taking bribes, or hanging out with inappropriate women, he keeps getting body slammed in the media.

The best thing that could happen to Jaczko right now is for the DC press corps to discover a true blue juicy sex and money scandal somewhere else.  The junkets by a GSA official to Hawaii don't count.  He went with his wife.

I don't know about you, but if Jaczko was intent on keeping the noise level down, especially after the Svinicki dust up this week, today's press event was the absolute last thing that it would make sense to do.

# # #

Bad moon rising over NRC post

Sen. Harry Reid (D-Nev.) goes full throttle with opposition to reappointment of NRC Commissioner Kristine Svinicki

The way to derail policy in Washington
is to pull the spikes holding the rails to the ties
Breaking news Reuters reported at 10:30 AM today (4/19/12) that the White House will send Svinicki's nomination to the Senate. This now appears to be a case of Reid's revenge thwarted. Full details, and link to Reuters story, in original blog post below.

A famous axiom of life inside the Washington, DC, beltway is that "no good deed goes unpunished." It means that while some people, acting on motivations related to the public good, get caught up in political disputes that run counter to it.

A case in point is the revenge tinted tilt of U.S. Senator Harry Reid (D-NV), and Senate Majority Leader, who this week said he will oppose the reappointment of NRC Commissioner Kristine Svinicki to a second term.  The details of this political drama are revealed in a column by Ryan Grim at the Huffington Post.

According to Grim's column, Reid spokesman Adam Jentleson said that the senator opposes reappointing Svinicki because "she lied to Congress about her work on Yucca Mountain."

What Reid wants to do is get Svinicki off the NRC and derail any efforts by the agency to bring up the license application for Yucca Mountain.  In effect, to use a railroad analogy, Reid is pulling the spikes holding the rails to the ties one-by-one. In Svinicki's case he's yanking out a whole section of track.

Not so fast says Sen. Minority Leader Mitch McConnell (R-KY). He claims Reid's opposition is nothing more than cheap political payback for a letter Svinicki and three other NRC commissioners sent to the White House last year complaining about the dysfunctional management style of NRC Chairman Gregory Jaczko.

Readers will recall that Jaczko is a former aide to Reid and he tangled frequently with Svinicki over Yucca Mountain policy issues when she was a Senate aide to then U.S. Senator Larry Craig (R-ID).

The reasons for the differences are obvious.  Svinicki is a trained nuclear engineer. Her work in the nuclear industry earned a Presidential Citation from the American Nuclear Society, one of its most prestigious awards.

Jaczko has a PhD in theoretical physics and spent his entire career in politics first as an aide for Rep. Ed Markey (R-MA), a harsh critic of nuclear energy, and then for Reid. Jaczko's appointment to the NRC had but one purpose and that was to fulfill Reid's pledge to Nevada's casino owners that Yucca Mountain would never open.

Republicans weigh in


F-B Svinicki, Magwood, Jaczko,
 Ostrendorff, Apostolakis at House
Oversight Committee hearing 12/13/11
Sen. McConnell, speaking for himself, and not through an aide, responded that Reid's opposition to a second term for Svinicki is nothing more than payback for her complaint about Jaczko which resulted in a tumultuous House Oversight Committee hearing last December. That session proved nothing except that the four who signed the letter have serious doubts about Jaczko's management skills to lead the agency.

At the hearing Commissioners Svinicki and Ostendorff said Jackzo should resign.  Magwood and Apostolakis gave fence sitting statements. Svinicki's testimony, along with Magwood's, documented Jaczko's verbal abuse of NRC staff and erratic dealings with his colleagues on the commission itself. Ostendorff issued the ultimate criticism in nuclear navy language. He said he had "no confidence" in Jaczko's management. It was a disturbing portrait of personality conflicts, insecurities,and mis-steps in high places.

McConnell said in response to Reid's criticism of Svinicki's reappointment, “Commissioner Svinicki stood up to this guy, who somehow managed to avoid being fired in the wake of all these revelations, in an effort to preserve the integrity of the agency, and to protect the career staffers who were the subject of the chairman’s tactics," said McConnell on the Senate floor April 18.

Reid's assertion that Svinicki "lied" comes from an exchange between her and U.S. Sen Barbara Boxer (D-CA) at Svinicki's confirmation hearing in 2008. That exchange is reported in detail at the Huffington post article so I won't repeat it here. The upshot is that Boxer now appears to have joined Reid in opposing Svinicki on the grounds she is not committed to safety. This is political talk for saying she's not joining Reid in a vendetta, but rather taking the rhetorical high road. Nonsense.

Which House ducks

Ducks on the White House lawn
This whole dust up is warmed over political hash that attempts to hid the fact Svinicki gave Jaczko a slap upside the head at the House Oversight Hearing and now his supporters in the Senate are delivering a return volley.

The White House, which does not want to offend Senate Democrats in an election year, has so far been silent on when or if it will send Svinicki's reappointment papers to the Senate for action.

Update 11 AM 04/19/12 - Politico reported to its subscribers the White House will nominate Svinicki for a second term. Reuters confirmed it a few minutes later. A formal notification will come in a few days the White House said. 

If she is not reappointed by June 30, the most likely outcome is that the seat will remain vacant through the remainder of 2012 and well into 2013. The Senate Republicans will not let someone else be nominated which ends the possibility of an alternative candidate being offered for the role even though it is a republican "seat" on the commission.

So Reid gets to bully the White House, and make disparaging and unvarnished critical remarks about an effective NRC Commissioner because his protege Gregory Jaczko brought trouble to his own house.  Senate Republicans have taken a stand and a stand-off is where the matter is likely to wind up.

# # #

Competition heats up for DOE SMR funding

Westinghouse gets support from Missouri for 225 MW reactor

slice of pieThe race to win $452 million in cost shared funding from the U.S. Department of Energy (DOE) for licensing and technical support to bring a small modular reactor (SMR) to market by 2022 got a new entry April 19. Westinghouse has partnered with Ameren to submit a proposal based on the reactor vendor’s design of a 225 MW SMR.

The proposal won enthusiastic support from elected officials, including Governor Jay Nixon, with the promise of high paying manufacturing jobs to build the components for the reactors in Missouri. Governor Nixon called it a “transformational economic development opportunity.”

A consortium composed of Westinghouse, Ameren, and regional electrical utilities will prepare the proposal to DOE. The cost share agreement covers a five year period and would involve equal spending by the winning team and the government up to $904 million. The government may make two awards splitting the funds among developers.

The Westinghouse SMR is a 225 MW light water reactor design based on the firm’s 1100 MW AP1000 which achieved design certification from the U.S. Nuclear Regulatory Commission (NRC) last December. Westinghouse is building four units in China and in 2012 began construction of four units in the U.S. – two in Georgia and two more in South Carolina.

WWestinghouse SMR conceptual design diagram

If Westinghouse wins the DOE funding, it could submit combined license applications to build and operate over time up to five of its SMRs eventually providing the equivalent of a single AP1000 reactor.

Kate Jackson, Chief Technology Officer for Westinghouse, said in a statement the first unit would be built and ready to enter revenue service within 24 months of receiving an NRC license.

Read the full details exclusively at ANS Nuclear Café online now.

# # #

Wednesday, April 18, 2012

Merger will reshape Colorado uranium mill issues

Energy Fuels acquires Denison's White Mesa uranium mill in Utah

On April 16 Energy Fuels (TSE:EFR) and Denison Mines Corp (TSE:DML) announced a letter agreement that would have Energy Fuels acquire all of Denison Mines assets in the U.S. including the White Mesa uranium mill in Utah.

The significance of this merger is that Energy Fuels has been struggling to raise funds, and fend off environmental lawsuits, for a proposed uranium mill in Montrose County, Colo. With this merger Energy Fuels acquires the only operating uranium mill in the country and can put the Colorado site on a back burner.

Anti-nuclear groups like the Sheep Mountain Alliance may see this as a victory of sorts, but people living on Colorado's western slope who were hoping for the high paying jobs the hard rock mining mill would have brought to the area may have other ideas about how to characterize the outcome.

Even more ironic is that it will bring a surprise end to the ongoing spit ball exchanges between the Colorado Department of Public Health & Environment (CDPHE), which issued the permit for the mill, and the U.S. Nuclear Regulatory Commission.

In February the NRC was gamed by the Sheep Mountain Alliance into using a regulatory mechanism designed to protect whistle blowers on safety issues at operating nuclear power plants. Two senior staff at the NRC wrote a now ill-fated letter to CDPHE which was seen as a effort to intervene in the state agency's permit decision.

CDPHE's director wrote a fiery five-page response that could have easily melted the paper clips on whatever desk it hit in Rockville. Since then the NRC has sent another letter clarifying that it did not intend to intervene in decision processes it had legally delegated to the State of Colorado.

Colorado is an "agreement state" and like 36 other states, has the authority to make permit decisions about uranium mills, ISR mines, and similar radioactive materials projects. The NRC's role is one of oversight. It is not supposed to intervene in specific actions.

While a lawsuit over the the state's permit brought by the Sheep Mountain Alliance may play out in court, the results may be moot. Once Energy Fuels closes on the intended transaction with Denison, it can take its own sweet time lining up investors for the Montrose County mill. That project can be mobilized whenever demand for uranium makes a business case for it. In the meantime, uranium ore from Energy Fuels' mines in the UraVan belt can be hauled to the White Mesa mill.

Basics element of the deal

Denison will receive stock from Energy Fuels worth approximately $106 million, according to the Toronto Globe & Mail, in return for the transfer of the assets and wind up owning 66.5% of the common shares.

The resulting firm will represent 25% of production of uranium in the U.S. Energy Fuels operations in the U.S. will include Denison's Arizona strip operating mine which has some of the highest yields in the lower 48 states and the operating Daneros Mine in the Henry Mountains of Utah.

Also, Energy Fuels will become a major producer of vanadium which is used in making high quality steel products. A new uranium mine in advanced permitting stages in Wyoming is slated to begin operations in 2015.

Denison a takeover target?

Denison will now concentrate on its mining operations in Saskatchewan where it has extensive high quality holdings and operations.The Globe & Mail said Denison may now be a take over target having shed its U.S. assets. According to the newspaper, RBC Capital Markets analyst Adam Schatzker said that Denison's U.S. “assets acted as a poison pill for potential acquirers."

“The U.S. assets suffered from unpredictable grades, fluctuating production, and high cash costs,” Mr. Schatzker wrote in a note to clients.

“While they offered investors financial leverage through high operating costs, they were likely not attractive to more senior mining companies. On the other hand, the Canadian assets, located in the heart of one of the top uranium camps in the world, offer the potential for world-class discoveries.”

The Globe & Mail did not speculate on who might be interested in buying Denison. Industry interest centers on Rio Tinto and Cameco though neither firm is mentioned in the report.

According to wire service reports, major shareholders at both firms are in favor of the deal. According to Reuters, Energy Fuels said its three largest shareholders -- Dundee Resources Ltd, Pinetree Capital Ltd and Mega Uranium Ltd -- who together own about 22.7 percent of its shares, have indicated their willingness to support the deal. A closing date of June 2012 is listed in the press release.

# # #


Tuesday, April 17, 2012

Argh! Debunking some nuclear nonsense

Once again it is time to spit on your hands, rub them together, and raise the black flag of contention to respond to deliberate attempts at creating fear, uncertainty, and doubt

Critics of nuclear energy can and do raise useful issues that need attention. The lessons learned for the global industry coming out of Fukushima include the importance of having a strong, independent regulatory safety agency not compromised by role ambiguity or too close for comfort relationships, organizationally and personally, with the nuclear industry.

However, there are times when people who make a profession out of being self-appointed "watchdogs" of all things nuclear need correction. In answer to the question of "who watches the watchdogs?" this blog post addresses two such instances.

Spent Fuel Pools at Fukushima #4

Robert Alverez, an energy analyst at the Institute for Policy Studies, is now circulating comments on the Internet that all of the contents of all the spent fuel pools at Fukushima represent a risk to the entire planet. His writings. with this exaggerated description of risk, have been picked up in Japan by Akio Matsumura, who has a wide international following.

Alverez has written extensively about spent fuel pools and is widely quoted in the news media about it. Most have accepted uncritically his claim that the entire contents of the spent fuel pool at Fukushima reactor #4 are at risk of spontaneously converting themselves into a radioactive cloud of contamination. This simply is not true.

Mr. Alverez is not a nuclear engineer. He was an Assistant Secretary for Renewable Energy at the Department of Energy during the Clinton Administration. Since then he has been an "analyst" at the Institute for Policy Studies in Washington, DC, where he writes regularly on energy topics.

One of his favorite rhetorical strategies is to total up the mass of material at a nuclear site and then make the assumption that all of it will blow up through some mysterious and unspecified mechanism spewing its contents far and wide. This is a great stuff for a B- movie on the SciFi channel, like an imaginative idea for a script of Mega-Shark meets Atomic Octopus, but it doesn't match reality.

What we know about what happened at Fukushima

Mark I nuclear reactor at Fukushima
With regard to Spent Fuel Pool #4, it was relatively undamaged by the hydrogen explosion that heavily damaged the non-safety related secondary containment building in March 2011. That is not the primary containment structure which holds the reactor pressure vessel. The concrete and steel structure that holds spent fuel pool #4 rode out the explosion and is not at risk of collapse.

There was no significant damage to the spent fuel pool at unit #4, the fuel, nor was the water level adversely affected by the earthquake, the tsunami, or the hydrogen explosion. Videos of the spent fuel pool show the racked fuel bundles were not affected. They remain in place covered with water. Here is the official TEPCO video

Reactor No. 4 was not in operation at the time of the earthquake and tsunami. There was no melt down in that reactor because there was no fuel in the core.

The American Nuclear Society issued a report on Fukushima on March 8, 2012. It covers the issue of spent fuel at Fukushima in technical detail.  In particular, it points out the spent fuel pools never "caught fire" as stated by anti-nuclear groups who have injected this misinformation into reports by the major wire services quoting them.

NB: I am a contributor to the risk communication chapter. See also my blog post and interviews with the co-chairmen of the report the same day it was released to the news media. 

On March 16, 2011 NRC Chairman Gregory Jaczko told Congress that based on information he had at the time he believed a key risk was the condition of Spent Fuel Pool #4.  In my Blog post I write . . .

"That information was a report that the water in the spent fuel pool at Fukushima reactor #4 has boiled off and that the entire contents of the pool had vaporized spewing radioactive materials into the atmosphere. This report turned out to be completely untrue. The spent fuel was never uncovered by water and suffered no damage from the hydrogen explosion that wrecked the outer containment building.  The hydrogen did not come from the spent fuel pool, but rather leaked into unit #4 from the adjacent reactor #3 which is believed to have suffered a partial meltdown inside the reactor pressure vessel."

A huge pile of pennies doesn't make you a millionaire

The fear that Unit #4 might collapse has been widely distributed on the Internet. That doesn't make it true. Counting up the number of curies of radioactivity in the spent fuel stored at Fukushima doesn't mean that that mass will be released. The fuel is covered by 20 feet of water as a shield against radiation. It can remain in wet storage for15-20 years, or longer, but as a practical matter, can be safety transferred using remote handling cranes to dry storage casks as early as year five. U.S. nuclear utilities are increasingly moving their spent fuel to dry casks.

On April 18, TEPCO released the general description, timetable, and line diagrams of the future fuel removal grane and building enclosure for F. Daiichi unit #4 SPF de-fueling. Work has started and is expected to be finished in the fal  of 2013. The fuel should be out within five years according to TEPCO.

It will take upwards of three decades to decommission Fukushima. There are many engineering challenges ahead.  However, feat mongering is not useful as part of the dialog about nuclear energy.

Japan PM Noda is paying close attention to nuclear energy issues. He's not cut from the same cloth as his predecessor who has been publicly criticized for micro managing in the early days of the crisis.

Steam System at San Onofre

The troubles at the San Onofre Nuclear Generatoring Station (SONGS) are by now well known to readers. The utility, the NRC, and Mitsubishi Heavy Industries (MHI) are all working on diagnosis of the problem of excessive wear on the steam tubes, how to stop it, and how to fix it. In the meantime, the twin reactors are safely shut down.   

Finding the answers to complex engineering issues is never easy, and requires not only careful analysis, but also careful checking. This means none of the three parties involved are going to say very much about their work until the numbers match up with physical reality.

That hasn't stopped the anti-nuclear group Friends of the Earth from publishing its own analysis of the issues by relying on Arnie Gundersen. Friends of the Earth is digging into for a siege of San Onofre and this report is their second volley.


Note The original steam systems at SONGS were built and installed by Combustion Engineering. The new units were supplied by Mitsubishi.  See below a conceptual drawing of one designed by Westinghouse.

Typical Westinghouse Steam Generator
Image: Nuclear Street
In his second report on San Onofre, Gundersen makes some claims which on review don't appear to stand up to scrutiny. This time he says the addition of 400 tubes and the removal of a support bracket to make room for them is the cause of the excessive wear in the steam generators.

This report is a bit different than some of his others in that he includes a few media citations and the tone of the language is not as inflammatory as in previous publications. It is a bid to be taken seriously by the news media and perhaps others in the anti nuclear world. That strategy appears to be working as a number of mainstream media reports have published the key points of his report.

After reading it, I'm skeptical he has a point because the scale of modifications seems to be a lot less than he claims. If you have 9,300 tubes, and add 400 or 4.3% more, how does that change compromise the entire system?

Mort importantly, where do his numbers come from? Clearly, he hasn't been to the plant and there are no references to design documents either in his possession or cited in the NRC's ADAMS database. He discusses a series of "decisions" and "design changes," but none of his claims are back up by citations to technical drawings, engineering reports, or similar sources. He displays one generic drawing of a steam generator. The one shown above is not from his report, but rather from an open source on the Internet.

Nuclear engineers document decisions to make modifications to reactors. There are extensive paper trails for each step in the process. Gundersen's citations don't include any from the plant or the manufacturer or the NRC. So where do the conclusions in the report come from?

It leaves him open to the question of whether he's just speculating based on generic information generally available in nuclear industry literature. Gundersen cites an article published in Nuclear Engineering International as a source for his analysis. Readers will find it interesting, but not for the reasons cited in Gundersen's report. This is a descriptive article and not an engineering analysis of the current issues with the steam generator. It includes some of the requirements that went into the design and the performance results expected from the units.

"Improving Like-For-Like Replacement Steam Generators," by Boguslaw Olech of Southern California Edison and Tomouki Inoue of Mitsubishi Heavy Industries, Nuclear Engineering International, January 2012, page 36-38.
A convenience copy for readers is available for readers at this link.  [
Full text here in PDF formatDownload the report and rotate the scanned pages to portrait viewing in a PDF file reader. For an online citation,  click on the link to this article to get to the original in the NEI archive.  http://www.copswiki.org/Common/M1252

Evaluation of Gundersen's report by a nuclear engineer

This is a summary of a private email I received from a nuclear engineer with operating plant experience. It evaluates Gundersen's report from that person's perspective. I've removed any personal references from it. Also, I've added a couple of clarifying notes to the email summary.

The points discussed on Pg 5 of the Gundersen's report are very specific and focused on the stay tube design change. However Gundersen's focus on the stay cylinder issue may be moot. His diagram is of a "typical steam generator" and is not of the units installed in SONGS.

The sketch he is using as his baseline document shows the new steam generators with a divider plate between the hot and cold water legs as one would expect to see. The divider plate appears it will perform the same design functions as the stay cylinder. And if that is the case then Gundersen's whole argument ( Points #2 & #3 on Pg. 5) about MHI and SCE impacting the safety functions of the tubesheet no long stands on its own.

The real weakness of the Gundersen report is that it does not rely on MHI design drawings or documentation used in review with the utility (SCE) or the NRC. Without these design documents in hand, it is impossible to answer the analysis question even though Gundersen is treating the issue of the additional tubes as the so-called smoking gun.

The issue of "cramming" more tubes into the tube sheet may come down to an issue of better analytical tools which have been employed over the years in many industries to maximize design parameters.

What type of analysis did MHI perform on the tubesheet to determine that the tubesheet could handle the additional 377 tubes without distortion or impairing the structural integrity?  Gundersen makes it appear as if MHI did not do any analysis even though the NEI article discusses the use of a 1:1 scale mockup and analysis. Did Gundersen see it or review the company's documentation about it?

The photo on Pg 4. would have come from from the MHI facility. However without an annotation to the photo it, is impossible to determine its relevancy to the discussion of SCE's steam generators.

But lets say it is similar to the SCE tubesheet. Then the new tubesheet in the photo appears to be thicker then the 2ft dimension Gundersen uses from the original SCE steam generators despite not providing the references to those design documents.

* * *

The view of this blog is that the steam generator issue may still end up being more of a commercial loss for SCE and not as the nuclear safety issue Gundersen is trying to make of it.

Friends of the Earth is using Gundersen's report to create fear of the SONGS plant by questioning the design basis of the steam generators. That's propaganda. It isn't engineering fact.

# # #

Sunday, April 15, 2012

Two tales of the prudent investor

Fence sitting is a practical strategy while you count your chickens if conditions aren't right to make up your mind

Counting fence sitting chickens
In the world of regulated utilities, the issue of what constitutes a "prudent investor" has long been a concern of rate commissions. These appointed bodies evaluate everything from equipment purchases and maintenance to how many employees are hired relative to revenue.

No utility wants to be on the receiving end of a finding by a rate commission that it acted in an "imprudent manner" because the denial of a rate case could cost tens of millions with the stroke of a pen.

This brings us to the issue of how a nuclear utility makes a decision to commit to build a new reactor. At today's prices, the U.S. "overnight cost," an industry pricing benchmark, is in the range of $5,000/Kw. This means an 1,000 MW plant, equal in power to the VVER design being aggressively marketed by the Russians to other countries, is about $5 billion. For all but the largest utilities, this is a "bet the company" price. It is an issue that perpetually sits in the top three items of things that keep utility executives awake at night.

What is instructive is that it is not uniquely an American issue. Any country where market forces are used to set electricity rates will have it. What is leads to a very long path with a lot of fence sitting between mileposts before a utility pulls the pin and commits to build a reactor. Rate commissions and the utility, whether in Pennsylvania or Prague, will consider issues like;

  • The price of electricity and general economic conditions
  • The price of competitive fuels, like natural gas
  • The price of wholesale power in market auctions
  • Current and future safety requirements 
  • Design changes that could become necessary after construction starts
  • The variable nature of government price supports and loan guarantees
What a lot of utilities do is that they hedge their bets by applying for the necessary permits without placing any orders for long lead time procurement items like reactor pressure vessels, steam systems, turbines, etc.  Even so the NRC permit process is expensive costing a utility on average $25-50 million.

Pennsylvania 

In the keystone state, PPL (NYSE:PL) is trying to decide whether to build a new 1,600 MW Areva EPR, a reactor design which does not yet have its safety certification from the NRC. In 2008, PPL submitted an application to build and operate a new reactor. It expects a decision by 2014.  By then it expects the Areva design to have completed its review at the NRC. The utility will still have to look at a long list of factors to decide whether to build a new plant.  

A new plant at PPL's Susquehanna site would feed electricity into Pennsylvania, New Jersey, and Maryland. Strategically, it would be positioned to replace older coal fired power plants that can't meet new emission standards for pollutants like mercury and to meet new demand for electricity. 

If built this would be the third reactor giving the utility a total of 4Gwe of power generation capacity. The company does not expect a one-for-one replacement of kilowatts lost from closed coal plants by a single new reactor.  

In terms of financing, one of the factors working against a decision to build is that the Bell Bend plant is not on the short list of projects eligible to get a federal loan guarantee. Also, the company would need outside investors, such as other utilities that would be customers for electricity from the new reactors, and these arrangements are still in the future. The company estimates the new Areva EPR would cost between $13-15 billion including balance of plant and new transmission lines.

A radical alternative for the utility is to go the other direction and walk away from nuclear energy. PPL CEO William Spence aired this idea March 1 at a Bloomberg energy conference in New York. He said that if the NRC pushed Fukushima safety requirements that are too expensive an option the firm has is to sell off its nuclear power station and not own generating units.

In addition, the firm said March 1 if air pollution rules are too tough it might close a substantial number of coal plants which would not be replaced, in terms of electricity generation, by a single new reactor. The low price of gas, and the shorter lead time to new plants, makes it the more likely replacement fuel for the coal units than a new nuclear reactor. Finally, like other utilities, PPL may believe that the economic recession has produced a long-term drop in electricity demand.  Some of it may never be coming back.

While PPL's choice's as a "prudent investor" don't necessarily include a commitment to nuclear energy, it is still keeping its options open. Check back in 2014 when it gets its license from the NRC. It could be a whole new ball game.

Prague

The twists and turns of building new reactors at CEZ's Temelin site, and elsewhere, have kept most of Europe guessing about what's next for what was until recently it's largest nuclear new build. Just a few months ago the utility downsized the project from five new reactors to two.  The main reason is that while CEZ is a state-owned utility, actually 70% is state-owned, but it is still regulated as a market driven  entity and operates like one too.  

Cash on the beer barrel head is
one sign of a prudent investor
It needs investors to build new reactors and has to manage cash flow while these huge expenditures are taking place. The financial feasibility of five new reactors, costing an estimated $28 billion, was simply beyond its grasp.  

Even as CEZ now focuses on a smaller scale project, it too is grappling with the issues of being a "prudent investor." It faces several issues that are important to potential investors. 

The first is whether the state will agree to guarantee rates for CEZ to insure a payoff of costs in a reasonable period of time. Second, current and future stockholders who have come to rely on dependable dividend payments will want to know that cash flow is sufficient to keep them coming. Finally, there is a debate within the government and between the government and CEZ whether loan guarantees can be used to reduce risk to attract more investors and at a lower interest rate.

Lower electricity rates and reduced demand in 2012 may not be the conditions when the plants are complete. A plausible scenario is that by 2022, Germany will have closed all 17 of its nuclear reactors and could be a major customer for baseload electricity from the new reactors.  

There are three qualified bidders for the project  Areva, Rosatom, and Westinghouse. Bids are due in July. An award will be made for the two reactors, expected to cost $10 billion, by the end of 2013.  

Like the situation in Pennsylvania, current conditions are not predictors of the future, but with the long lead time for nuclear reactors, finding the confidence to carry on as a prudent investor remains a daunting task.

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