Twiddling Turbine

They said it was a small fire. The reactor automatically shut down as a precaution. Minor damage would be repaired in just a few weeks.

The reality, however, is quite different, with enormous consequences.

A turbine at Southern California Edison‘s San Onofre nuclear power plant, situated right on the coast north of San Diego, just a few miles from picturesque San Clemente, suffered major damage on February 3, just hours after the plant had been brought back on line after 32 days of maintenance and refueling in the midst of California’s unprecedented electric-power crisis. The U.S. Nuclear Regulatory Commission (NRC) won‘t release its report on the accident, a report originally promised for last month, until April 21. But whatever the specifics of what happened there, which has been essentially ignored by the media, the effects are huge.

The reactor in question, San Onofre Nuclear Generating Station’s Unit 3, produces 1,120 megawatts of electricity, enough to power 1.1 million households. The NRC says the reactor will remain offline until at least mid-June; an informed source speculates that repairs could take up to a year. Since the reactor had been offline for service before the accident, this means that California will have been deprived of at least five months, and perhaps more, of electricity generation from this linchpin facility during our electric-power crisis.

The cost to replace this power on the skyrocketing electricity spot market is enormous, close to $100 million a month.

Three days after the accident, the NRC‘s little-noticed press release announced that, as a matter of routine, a team of four inspectors had been sent to San Onofre to examine what it called ”an unusual equipment failure.“ The inspection would take several days, and a public report would be issued in several weeks. ”Saturday’s electrical fire caused power to be lost to equipment not vital to the safety of the reactor,“ the NRC declared.

The situation turns out to be much worse. ”Our report,“ says NRC spokesman Breck Henderson, ”should have been issued last month, but has been delayed by the complexity of the investigation.“

San Onofre‘s Unit 3 suffered major damage. (Unit 2 remains online. Unit 1 was decommissioned in 1992, and its demolition will produce 66,450 tons of radioactive debris, including 250 tons of spent nuclear fuel, which will be radioactive for thousands of years and remains on-site.) According to an informed source, what was described as a small fire actually lasted for some 30 minutes. The fire is said to have taken place in an electrical-switch gear room, away from nuclear materials. The fire caused an electrical failure, which in turn, according to NRC spokesman Henderson, caused a lubricating oil pump and various backup systems to fail. The loss of these systems caused major damage to the bearings and shaft of a massive turbine.

Far from being repaired quickly on-site, as a brief news report assured a few days later, the turbine has actually been disassembled. One 200-ton generator rotor was shipped two weeks after the accident by Edison, in a specially chartered railroad car, to the Virginia facilities of its manufacturer, Alstom Corporation, a British firm.

What caused the fire? That information won’t be released by the NRC for more than a month. One knowledgeable source, who would not comment for attribution, says that Edison maintenance practices contributed to the accident. While noting Unit 3‘s sound operating record over the past 16 years, Edison spokesman Ray Golden acknowledges that the reactor’s usual 45-day period of refueling and maintenance had been telescoped down to 32 days this time. He says the accident was caused by a malfunctioning electrical-circuit breaker. This short caused a fire, which led to a power interruption and sudden system shutdown. Three backup power systems -- two alternating-current power supplies and a direct-current battery -- failed in the process.

Who will pay for the plant‘s repair? The good news for taxpayers and ratepayers is that, under the terms of California’s electric-power deregulation, Edison, other power companies and their insurers are liable.

What will it cost to repair the plant? Edison spokesman Golden says the company doesn‘t know yet, but Edison has a $2 million deductible, and its insurers will pick up the rest.

Bigger questions for the public are who will pay for the cost of replacement power, and how large will the price tag be? The news is not good. According to Robert Kinosian of the California Public Utilities Commission’s Office of Ratepayer Advocacy, the state must find the power and pay for it on the spot market. ”Under the terms of AB 1x,“ states Kinosian, ”the state Department of Water Resources [California‘s current agent in the power market] must provide the net short position. When one of the utilities’ units is out, the state is responsible for making up the difference.“

The accident at the San Onofre plant comes at a very bad time. With the Edison utility -- though not its holding company, which is extremely profitable -- reeling from billions in unpaid debts run up for power purchased on the spot market, the state has taken over the task of buying power for the big private utilities that they don‘t generate themselves, or getting it from alternative energy sources such as wind, geothermal, cogeneration and solar. California has already committed more than $3 billion from its general fund of taxpayer dollars to buy power for Edison, San Diego Gas & Electric, and Pacific Gas & Electric, but several billion dollars more will be needed before the state issues $10 billion in revenue bonds in late May. The proceeds from the bond sale, the largest municipal-bond offering in U.S. history, will go to fund long-term power contracts negotiated for the state by Los Angeles Department of Water & Power chief S. David Freeman, a volunteer appointee of Governor Gray Davis who was working as the state’s chief negotiator.

But the long-term contracts leave a big shortfall this year. Much as many environmentalists may dislike nuclear power and San Onofre, the failure of Unit 3 is a serious blow to California‘s power-generation portfolio. Former Sacramento Municipal Utility District director Ed Smeloff -- who led the fight to close the Rancho Seco nuclear plant a decade ago, in the only successful nuclear-shutdown ballot initiative in U.S. history -- and now heads New York’s Pace Law School energy project, notes that San Onofre has not been viewed around the nation as an especially troubled plant. How valid that perception has been may be clearer when the NRC finally releases its report on the February 3 accident.

Getting the power to keep the lights on for 1.1 million California households costs a great deal of money. In the meantime, since the out-of-state power generators that bought the California plants sold by Edison and the other private utilities after deregulation refuse now to sell power to Edison, the state has to find another 1,120 megawatts of electricity. Peak prices are around $250 per megawatt hour. Do the math, and you see that is a whopping $280,000 for every hour during peak periods of electrical use. Fortunately, power costs significantly less during off-peak hours. A good ”conservative“ rule-of-thumb price over a 24-hour period, according to Kinosian of the PUC and other experts, is $100 per megawatt hour. At that average price, the failure of Unit 3 costs $2.7 million per day. Over the five-month period that the NRC confirms the reactor will have been offline, that adds up to a whopping $400-plus million. If it remains offline longer than that -- as some suspect it will -- the cost goes even higher.

While the Edison utility company is close to bankrupt, its holding company and merchant power-generating arms are more than flush. As part of the 1996 deregulation deal, of which Edison CEO John Bryson was a major architect, Edison and the other big private utilities received more than $10 billion as a bailout for ”stranded costs,“ a term of art for big, uneconomic investments in the San Onofre and Diablo Canyon nuclear power plants. Edison turned around and invested in power plants around the world. Yet Edison‘s holding company is not liable for the cost, to taxpayers and ratepayers, of the failure of Unit 3.

San Onofre’s state of operational health is important for yet another reason. Right now, the only major transmission connection between San Diego and power plants in the rest of California is at San Onofre. Another transmission-line project has been proposed for the Temecula area in Riverside County, which experts say is necessary because San Diego County is on the verge of exceeding its reliable delivery capability.

For some reason, state officials have been very quiet about the problems at San Onofre, despite the huge burden on the state‘s deepening power crisis.

It is interesting to note that one of Governor Gray Davis’ behind-the-scenes advisers is Van Ness, Feldman, a Washington, D.C., law firm with a big energy regulatory practice. A key figure in the firm is Bob Nordhaus, former general counsel of the Department of Energy under Clinton, and former general counsel of the Federal Energy Regulatory Commission. In between, he was Edison‘s lawyer. His wife is general counsel of the NRC.

In addition, the governor has three formal power-crisis advisors with strong Edison ties: former Edison president Michael Peevey, Davis’ chief negotiator with the utilities; Edison consultant Vikram Budhraja, a member of the governor‘s negotiation team; and the governor’s energy-construction czar, Larry Hamlin, an Edison executive on leave of absence. As they say at Disneyland, it‘s a small world after all.


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