More Problems Than Power From Arizona’s Palo Verde Nuclear Plant

Once hailed as a showcase of nuclear power, the $9.3-billion Palo Verde plant in the desert 50 miles west of here has generated more headaches than electricity in its four years of operation.

The triple-reactor plant, owned by a consortium of utilities in Arizona, New Mexico, Texas and California, is one of the largest in the world. Designed to supply power to 4 million customers in the four states, it was under construction almost 11 years.

Problems have caused the reactors to be shut down for almost as much time as they have been up and running. Two of the three units have been out of operation since early March.

The shutdown came during an Arizona heat wave of record duration. Utilities that otherwise would have been receiving power from Palo Verde found themselves buying it from other sources at higher rates. Arizona Public Service Co., which owns the largest share of Palo Verde, bought an extra $47 million worth of electricity. The No. 2 owner, Salt River Project, paid an extra $20 million.

APS owns about 29% of Palo Verde; SRP owns 17 1/2%. El Paso Electric and Southern California Edison own nearly 16% each; Public Service Co. of New Mexico has about 10% and Southern California Public Power Authority and the Los Angeles Department of Water & Power own nearly 6% each.

When an operating license was issued in 1985 for Palo Verde’s first unit, Frederick Bernthal, then a member of the Nuclear Regulatory Commission, spoke of his high confidence in what he called the plant of the future.

The 1,270-megawatt, pressurized-water reactor from Combustion Engineering Corp. was the prototype of what the NRC hoped would become a standard model that other companies would be able to order.

All other 92 reactors built before Palo Verde was licensed had been custom built. By using a standardized design, the NRC hoped to hold down construction costs and simplify the time-consuming inspections required of regulators.

Now an industry-watchdog group has called Palo Verde Unit 1 the 19th worst nuclear plant in the nation and the worst in terms of management.

The NRC repeatedly has expressed concern about the operation of the whole plant. This month, the commission sent in a special team for a thorough evaluation of the facility.

The NRC has fined the Arizona Nuclear Power Project, the plant’s operators, more than $800,000 for a variety of violations and deficiencies. In June, an industry accrediting board placed nine of Palo Verde’s 10 employee-training programs on probation.

“Prior to the shutdowns in March, the plant had somewhat of a schizophrenic personality,” said Gregory N. Cook of the NRC’s regional office in Walnut Grove, Calif.

“Unit 1 had a rather poor operational record when compared to other comparable plants. Unit 2 was about average and Unit 3 was above average,” he said.

According to Arizona Corporation Commission records, Unit 1, for which ground was broken in 1976, was in operation only 62% of the time in 1986, 49% in 1987, 62% in 1988 and 22% in 1989. The reactor has produced no power since early in March.

Unit 2, which came on line in late 1986, was in operation 77% of the time in 1987 but only 63% the year after. It has been up and running for less than half of 1989.

Unit 3, the newest reactor, was up for 95% of 1988, when it produced more power than any unit in the world. It has been on line only 16% of this year and not at all since early March.

The three units have been down for a total of 639 days this year. Scheduled refueling and a variety of mechanical problems have kept units 1 and 3 down since early March. Unit 2 has been up and down since February.

“There is no denying that we have had performance problems this year,” said Don Andrews, a Palo Verde spokesman.

A trouble shooter was brought in to revamp operations from the top down. Cook said the new, more conservative approach to running the plant is partly responsible for extending the down time “but has been in the best interests of future operations and safety.”

The NRC has fined Palo Verde $810,000 since 1983, including a $250,000 penalty assessed by the agency in September for 13 alleged violations discovered after Unit 3 shut itself down in March.

So many things went wrong during the automatic shutdown that the NRC decided to send a special inspection team to the plant. It was only the third time since 1985 that the NRC’s regional office, which supervises plants in Arizona, California, Washington and Oregon, has dispatched such a team, Cook said.

Palo Verde also was fined $250,000 in December, 1988, for deficiencies relating to operations and radiation, $100,000 in April 1988 for deficiencies in engineering and operations, $100,000 in May 1986 for security-system deficiencies, $50,000 in October, 1985, for deficiencies in the post-accident sampling system, $20,000 in December, 1983, for deficiencies in its quality assurance program, $40,000 in December, 1983, for keeping inadequate electrical-construction records.

Cook said that is “a fairly poor enforcement record” and Palo Verde operators have incurred “a very high figure” in fines.

The National Academy for Nuclear Training placed Palo Verde’s training programs on probation in June, and the training manager, William F. Fernow, was demoted.

Of Palo Verde’s 10 training programs, only the one dealing with radiation protection was deemed adequate by the academy.

The academy’s accrediting board took Palo Verde off probation in October.

In May, Public Citizen, an anti-nuclear group headed by consumer advocate Ralph Nader, named Palo Verde the 19th worst nuclear plant in the nation and the worst in terms of management.

“Palo Verde (Unit) 1 has fallen to the bottom of the industry,” said Joan Claybrook, president of Public Citizen’s Critical Mass Energy Project. “It’s time they closed that nuclear lemon down.”

The group said it based its ratings of nuclear plants on figures obtained from government regulators and the nuclear industry.

Just a year before Palo Verde received the low rating, John B. Martin, NRC regional director, told Palo Verde officials that several problems turned up in a May, 1988, inspection “have reinforced our concerns” about the plant’s performance.

Those problems included an employee’s exposure to a dose of radiation stronger than rules permit and difficulties with a water system that cools rooms containing emergency electronic equipment.

Martin also cited an incident in which Palo Verde’s Unit 1 reactor, after a temporary shutdown, reached chain-reaction sooner than operators had calculated.

In an April report, the NRC said that equipment failures that led to the March shutdown of Unit 3 could have been avoided if problems been corrected as they were discovered, some as long as four years before.

“This event is symptomatic of management’s failure to set a standard which demands that plant problems be recognized and fixed,” the report said.

The NRC also has complained that the plant’s top managers don’t visit critical areas often enough, so it is difficult for them to know whether needed improvements are being made.

Cook said that problem has been addressed, but not eliminated.

“They have developed a formal program of getting management on site and into the plant,” Cook said, “but as of a couple of months ago, the plan hadn’t been fully implemented. We were a little disappointed that it hadn’t gotten farther along.”

In the last two years, seven other plants have been subjected to full NRC evaluations such as the one being conducted at Palo Verde, Cook said. He said that such inspections are conducted at “plants where NRC senior management has substantial questions about the overall management of the operation.”

“We’re not really looking at compliance as we are in inspection reports,” Cook said. “We are looking toward performance--what works and what doesn’t.”

The team’s report is due about March, he said.

William F. Conway, who was lured away from Florida Power and Light Co. in May to oversee Palo Verde, suggested in a June interview that the plant’s problems stemmed from management’s failure to make a smooth transition from building the facility to operating it.

“The mentality of building and the mentality of operating are two totally distinctive things,” he said. “It is almost like reading two different prayer books. Operations is another type of religion.”

Cook said the NRC was in full agreement with that assessment.

“The plant was built by people who did a superb job,” Cook said. He called it a “state of the art facility.”

“But management did not convert the organization to the kind of staff, the kind of organization you need to operate a nuclear plant in today’s environment,” he said.

Conway, who was out of town and unavailable for an interview, has set in motion a five-point plan to make immediate improvements at Palo Verde, Andrews said.

Already, eight people--including Conway and plant director Walter Marsh--have been brought in to raise the level of experience among the Palo Verde management, he said.

Steps also have been taken to improve investigation of incidents, such as shutdowns, including establishment of an “incident investigation program,” Andrews said.

He said a team will investigate and evaluate each incident “to get at the root cause” and to keep the problem from recurring.

Conway also sent the employees a set of “standards and expectations” shortly after he took over. This was done to “maximize accountability” Andrews said.

And he said that steps are being taken to “increase the sense of urgency” in responding to problems turned up by the NRC.

“We have been criticized by the NRC in the past for not quickly implementing the actions we told the NRC we would implement,” Andrews said. The new system will involved tracking those actions to make sure they are taken, he said.

Cook said the NRC has been encouraged by what has happened at Palo Verde since Conway took over, but he said the plant’s problems cannot be solved overnight.

“You have to expect, in dealing with an organization of that size where there have been institutional problems, which certainly there have been, it is going to take time to turn it around,” Cook said.