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Is West Texas’ water supply at risk of radioactive contamination?

June 12, 2009

Forrest Wilder
The Texas Observer

In 2007, geologists for the Texas Commission on Environmental Quality told their bosses that a proposal for a radioactive waste dump in West Texas was fatally flawed because of the landfill’s proximity to the Ogallala and Dockum aquifers. Then-agency head Glenn Shankle (now a lobbyist for the dump’s owner, Waste Control Specialists) overruled his employees, issuing licenses for the two adjacent landfills in Andrews County. But as a compromise of sorts, he required Waste Control to conduct a number of tests and studies to prove that the site was dry enough.

Critics, including three whistleblowers who quit the agency in protest, were hardly mollified-in a sane world, they said, the company would have to prove that the dump wouldn’t leak radioactive waste into the groundwater before getting a permit, not after. But that’s all the TCEQ bosses were offering.

Now, some of the results from those studies are in. They are hardly reassuring. Waste Control, owned by Dallas billionaire Harold Simmons, has identified nine areas inside and near the proposed landfills where groundwater is present. The company has argued to the TCEQ in recent filings that these so-called "pockets of groundwater" are isolated from the aquifers and not a cause for concern. Some of them, the company says, are probably linked to playas-surface depressions, common to West Texas, that fill with water. Others, Waste Control contends, result from small depressions in the top of the red bed clay. The playas will be filled in with soil, the company promises, and the depressions in the clay are too small to matter.

Even so, the presence of any water is troubling. "If you have water in the ground you shouldn’t put a landfill there," says Patricia Bobeck, a hydrogeologist who left the TCEQ in September 2007 and went public with her complaints that upper management had ignored the environmental and safety risks. Water can provide a pathway for radioactive particles to move quickly through the earth and permanently contaminate drinking or agricultural water.

Bobeck says the latest findings only underscore what she and other experts have been saying for years. "The people who rejected this site were not acting on a hunch," she says. "WCS has corroborated that with their own data."

In the past year, Waste Control, at the TCEQ’s request, has drilled dozens of new wells. Many of them, including some within the footprint of the radioactive waste dump, have inches or feet of water at the bottom.

"These wells indicate that the area around the byproduct excavation and southeastern portion of the low level site are much wetter than previously thought," wrote Conrad Kuharic, a TCEQ geologist, in a February memo.

In its license application, Waste Control had argued that the landfills would be well away from a "dry line," a shifting boundary on a map dividing wet wells from dry. But in April, confronted with the evidence from its own wells, the company conceded that that critical line had moved 200 feet closer, almost inside the landfills. Increased rainfall in the future may put the "dry line" inside the dump, TCEQ experts have contended.

That, Bobeck says, is "bad news. This landfill by law cannot be placed in proximity with water."

For years, Waste Control has touted its 1,300-acre dump site as nearly geologically perfect for containing radioactive waste for tens of thousands of years. The company’s primary selling point has been what it calls the "almost impenetrable red bed clay" in which the waste will be buried.

But the red bed is leaking. After giant earthmovers dug deep into it, water began seeping out of the walls. On the southern wall, enough seeped out to form a pool of standing water. In December, the company claimed that the water would soon dissipate. But when a trio of TCEQ geologists visited Waste Control’s dump in January, a month and a half later, they noted that the puddle had actually grown (see photo above).

Bobeck is skeptical that the discovery of groundwater in the radioactive waste dump will prompt the TCEQ to crack down. The additional studies, she says, were never intended to change Waste Control’s course.

Not surprisingly, the company agrees. "Groundwater occurrences in the vicinity of the Byproduct landfill have no impact on current planning for the operation of the landfill," the company told the TCEQ in May.

Investigative reporting for this article was supported, in part, by a grant from the Open Society Institute.

December 6, 2009

By Tracy Idell Hamilton and Anton Caputo
San Antonio Express-News

CPS Energy’s partner in the nuclear deal quietly tipped off Mayor Julián Castro in late October that the project could be significantly more expensive than the utility’s public pronouncements.

NRG Energy said last week it did so to try to limit the damage it feared could occur to the nuclear project when a higher estimate came out at an analysts’ meeting in November.

By then, the City Council already would have voted to spend $400 million on a deal that could cost billions more than it was told.

The leak, the source of which has remained secret until now, touched off a cascade of events that damaged the credibility of the utility, led to high-level executive resignations at CPS Energy and heavy pressure on two trustees to resign and put the nuclear deal on life support.

Details of the debacle are said to be spelled out in the report of an internal investigation into why the higher cost estimate was kept from the CPS Energy board and the City Council. The final version of that report will be turned over to the board Monday, but it’s unclear when the public will see it.

In the report’s absence, rumors have cropped up – and even were alluded to in the CPS Energy board room – that NRG was trying to scare San Antonio out of the deal by making the higher cost estimate public and that Castro, who sits on the five-member CPS board, aided in the effort by meeting with NRG privately.

How the report will portray the mayor’s actions is unknown, but Castro said the persistent whispers prompted him to address the matter Friday by divulging the source of his information and his contacts with NRG.

"Rumors that … my office has done something untoward are completely inaccurate," Castro said, adding that if the report isn’t released publicly Monday, he will release the section that addressed his role himself.

At issue is why NRG tipped off the mayor’s office while CPS executives were keeping knowledge of contractor Toshiba Inc.’s higher cost estimates from their own board.

"We wanted to make sure the mayor’s office knew what was happening before the analysts," NRG spokesman David Knox said Friday.

Not telling the board

NRG did that through Frank Burney, a longtime City Hall lobbyist and attorney who represents NRG in San Antonio. Burney, who supported Castro in his mayoral bid this year, alerted Castro’s office in late October that CPS Energy’s cost estimate was significantly lower than Toshiba’s.

Knox said NRG officials already had told the CPS nuclear team that Toshiba’s number would be shared at the upcoming analysts’ meeting Nov. 19, which would be reported by the media.

At that meeting, NRG officials said Toshiba’s latest estimated price was $12.3 billion, which put it $4 billion above what CPS had figured in its estimate.

Castro confirmed Knox’s account, saying the internal investigation report includes e-mail from NRG that suggests CPS Energy should share the higher figure with its board since it likely would be made public.

Burney urged Castro’s chief of staff, Robbie Greenblum, to ask CPS interim General Manager Steve Bartley about the higher cost estimate. Later that evening, at the Oct. 26 board meeting, Greenblum did so.

Bartley acknowledged a significant gap between Toshiba and CPS’ estimates, but still he didn’t share it with the board.

The next day, the San Antonio Express-News received a tip from a different source that Toshiba’s cost estimate was as much as $4 billion more than the number CPS had been using publicly. Within hours, the mayor announced the City Council would delay its vote, scheduled just two days later, on borrowing $400 million.

Bartley never publicly acknowledged a specific estimate amount.

Since the summer, CPS had been telling the public that the nuclear project would cost $13 billion, making it the most cost-effective way to meet San Antonio’s future energy needs.

Bartley, who resigned Nov. 25, contended the higher estimate just was a negotiating ploy by Toshiba and didn’t need to be shared with the board, a view the mayor’s office disputes.

"It was material information," Greenblum said Friday. "Whether they thought they could get the number down or not, this was material."

Board member Stephen Hennigan, one of two trustees Castro wants off the board, has said he’s suspicious of NRG’s motives, noting that the for-profit energy giant’s interests may not align with CPS’.

Last month, Hennigan grilled CPS executives at a board meeting over how they could trust their partners in the nuclear deal.

The complicated web of corporate interests, he said, puts CPS in the position of cooperating with NRG to persuade Toshiba to bring its price down, while, at the same time, NRG and Toshiba are partners in a company called Nuclear Innovation North America, which technically owns NRG’s stake in the nuclear project.

"As a board member, is it my job to be skeptical of the actions of a so-called partner," Hennigan said Saturday. "And I am skeptical of their intentions."

Hennigan, who has declined to step down, wants the report made public as soon as possible. His comments, coupled with Castro’s attempts to push him and board Chairwoman Aurora Geis out, have fueled speculation that the mayor had inappropriate meetings with NRG — and the report apparently says as much.

Castro, who says CPS needs fresh board leadership to foster a new era of transparency at the utility, dismissed the notion.

He said that as mayor, it was his job to meet CPS’ partner, which he did twice. Castro, who took office in June, described them as meet-and-greet-type meetings, not negotiations. Cost estimates weren’t discussed, he said.

He also acknowledged a phone call to NRG CEO David Crane after the higher figure had been made public.

Too big to ignore

When he finally did learn of Toshiba’s cost estimate, Castro said the $4 billion gap was too much for a public official to ignore.

"However you come around to it, this was information we needed to know to make a policy decision," he said.

Hennigan said he agrees with the mayor’s reaction to NRG’s tip, but wouldn’t comment on the meetings between the mayor and NRG.

"It makes complete sense," he said, "how the mayor had to deal with the situation because of a failure of CPS management team to communicate with the board."

Castro said that had the board gotten the information in the summer, when Toshiba first gave it to CPS, or even in mid-October, when an e-mail with the higher figure was sent to executives, "we could have perhaps managed it in a way to continue going forward."

Knox, too, dismissed the idea that NRG leaked the figure to Castro to get CPS Energy out of the deal.

"If this was going to have a bad impact on the deal, (having San Antonio learn about the higher costs from the analysts’ meeting) was going to be worse," he said.

Knox did acknowledge NRG made an effort to cultivate a relationship with the mayor’s office. It was clear, he said, that Castro’s support would be pivotal to the success of the nuclear deal.

NRG long has said it can build the two nuclear reactors at the South Texas Project in Bay City with or without CPS, though it prefers to remain partners.

More than CPS Energy’s participation, though, Knox said, what NRG really needs is stability, "and this is not something that is helping the stability of the project."

Whether NRG will have to pursue its nuclear ambitions without CPS’ help won’t be known until January. That’s when CPS is supposed to take the latest estimate from Toshiba, add its own costs and come out with a new public cost estimate for San Antonio’s participation.

At that time, the utility’s board and the City Council will decide whether San Antonio stays in the deal. If not, it will likely have to find buyers for its half of the ownership.

December 6, 2009

San Antonio Express-News

CPS Energy’s longest-serving board trustee, Steve Hennigan, hasn’t actually given me a copy of his nine-page "not so far-fetched theory document," but we spoke at length Friday night and Saturday afternoon about what’s in it as he fights to keep his board seat and remain a major player at the municipal utility.

"I’m not a conspiracy theorist," said Hennigan, a credit union executive by day and an unmistakably nice man.

Conspiracy theory, nevertheless, is making the rounds these days in one of those "truth stranger than fiction" scenarios as business and civic leaders ask what went wrong with a multibillion-dollar plan to expand the South Texas Project nuclear facility, the source of 30 percent of the city’s current energy usage.

The finger-pointing has now turned outward. Hennigan and others say CPS’ merchant power partner, NRG Energy, engineered a complex sequence of events that undermined years of CPS work to convince the City Council and ratepayers of San Antonio that nuclear expansion was the best path to energy security.

Others think the plotline is simpler: CPS executives were caught in their own web of deceit after withholding information from elected officials, the media and the public that showed nuclear expansion could cost $4 billion more than advertised by the utility.

Hennigan has watched this deal unfold from the very beginning, so give him his due: Maybe his "theory document" will prove convincing in time and even become a big-screen thriller.

Someone call Oliver Stone. George Clooney, too. We’ll need a paranoid Hollywood director and a great actor: a shrewd, well-connected lawyer who convinces us that NRG undermined its own partner, the one with the coveted bond rating and the guaranteed ratepayer base and cash flow.

I might wait for Netflix. If you think of the weekend as a bathroom break, the next big scenes unfold Monday, when the CPS board meets. CPS board meetings, of course, are top secret, and you and I lack proper clearance. But this one could include the forced resignation of board Chairwoman Aurora Geis (Julia Roberts?), and the board will receive the much-anticipated investigative report into CPS executives who covered up the troubling $4 billion differential.

The real-life character in this drama is Frank Burney, a familiar and well-regarded San Antonio lawyer and lobbyist, a strong supporter of Mayor Julián Castro hired by NRG to represent it before the city. Burney, acting on authority from NRG, tipped Castro’s staff to Toshiba’s real price tag for nuclear expansion after his client grew perplexed with CPS’ continued failure to come clean.

Far from conspiring to undermine CPS, the NRG team worried that a "keep going" $400 million bond vote by the City Council, followed by tardy disclosure of the real cost, would send the project into a political tailspin.

That’s happened anyway. And that’s where the conspiracy theorists come in.

Whodunits are always entertaining. You can choose to watch the movie, or you can opt for reality, which is simple: Burney acted in the interest of the mayor he supports and ratepayers who simply can’t afford nuclear expansion a la Toshiba.

It’s a reality that’s far less intriguing than the fictionalized treatment, but that’s life, isn’t it? And that’s why we have the movies, to distract us from our real-world burdens.

Robert Rivard is the editor of the Express-News. E-mail him at rrivard(at)express-news.net. Or follow him on Twitter at @editorrivard.

December 8, 2009

San Antonio Express-News Editorial Board

E-mails between Toshiba Inc. and CPS Energy and also among CPS executives make clear that the utility knowingly understated the costs of nuclear expansion to the public. Over a period of months during which CPS officials were telling the public the price for expansion at the South Texas Project was $13 billion, executives knew Toshiba was projecting the cost to be at least $4 billion higher.

The same e-mails demonstrate anxiety among CPS officials that NRG Energy – a publicly held corporation that is CPS’s partner in the project – intended to reveal the inflated cost estimates. "I think your discussion of incomplete cost estimates in public in November is a major problem," the CPS vice president of power plant construction wrote to an NRG official.

That e-mail was sent on Oct. 22. City Council was set to vote on $400 million in additional financing for the project on Oct. 29. Yet according to an investigation led by the CPS internal auditor, a longtime employee, no one at CPS – not even the vice president of nuclear development who also served as secretary for the board of trustees – acted with malicious intent.

Incomprehensibly, the CPS board last week passed a resolution that endorsed this finding.

The determination by an insider investigation that there was no malicious intent may strain some legal definition designed to avert criminal prosecution. But it is completely unacceptable for a municipally owned utility that is struggling to retain – let alone regain – credibility.

CPS Energy is in crisis. That crisis is not going unnoticed by the investment services that rate CPS bond issues.

Unclipped, its impact will be felt by ratepayers.

The only way to resolve this crisis and put CPS back on a path to credibility is for an independent external arbiter to conduct a complete investigation of CPS organization and practices. That includes the size and composition of the board of trustees, a review of the technical procedures used to produce cost estimates for nuclear and non-nuclear sources of energy, and an audit of the annual payment of 14 percent of revenues that CPS is supposed to make to the City of San Antonio.

The time for hedging and secrecy has passed. A thorough accounting at CPS is urgently required. Mayor Julián Castro, the only member of the CPS board of trustees who is accountable to the public, and Jelynne LeBlanc-Burley, who was elevated by the board to lead the troubled utility, should accept no less.

December 8, 2009

News 4 WOAI

SAN ANTONIO — The public will soon know what was uncovered during a special investigation into the CPS Energy nuclear expansion project.

Board members decided Monday night to make those results public on Wednesday. They said it is important to rebuild the energy provider’s credibility in ratepayers’ eyes, and the report will help do that.

The investigation looked into why city council and the CPS Energy board did not know the cost estimate of two new nuclear reactors had gone up by $4 billion until right before a council vote on it.

After Monday night’s meeting, News 4 WOAI asked chairwoman Aurora Geis if she plans to step down, a move Mayor Julian Casto called for.

“I personally want to be able to stand for what is in the best interest of CPS Energy and for this community.” Geis went on to say, “That would be handling the situation in a very orderly manner.”

The board also set Jelynne Leblanc Burley’s salary at $300,000 while she is serving as interim General Manager of CPS Energy. As chief administrative officer, she was making $225,000.

CPS Energy is still searching for a permanent General Manager.

Watch video of the news story at WOAI’s news site: