Archive for the ‘News’ Category

April 6, 2010

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

Editor’s note: This story originally appeared Sunday, April 4, exclusively in the print edition of the San Antonio Express-News.

Mayor Phil Hardberger always was privately skeptical of the rosy outlook CPS Energy executives painted as they pushed for the expansion of the South Texas Project nuclear plant.

He said he wasn’t outright opposed to the construction of two new reactors, but he was wary of cost estimates that always were lower than those for similar projects across the country.

Back in 2007, the CPS Board of Trustees was getting the hard sell from executives who warned that San Antonio could run short of power as early as 2016.

"We felt a lot of pressure to keep moving forward at all times," he said recently.

But Hardberger, an ex-officio CPS board member, saw potential trouble on the horizon, financially and politically – and he had an idea about how to limit dam? age on both fronts.

Sitting in a board meeting that fall, Hardberger wrote his idea on a yellow legal pad. He tore off the sheet and slid it over to CPS CEO Milton Lee.

The message was simple: As it pursued the nuclear expansion, the utility must promise San Antonio that it would limit electricity rate increases to 5 percent a year every other year.

Doing so, Hardberger reasoned, could give future City Council members political cover if they judged the expansion worth pursuing, while setting a limit that most San Antonians could afford.

That language was incorporated into a board resolution that, as much as anything, set the community’s expectation about the cost of the nuclear project.

So, last year, when CPS pushed for a 9.5 percent increase, not 5 percent, just two weeks before the council was set to vote for $400 million more for the project, the switch angered council members and the public.

CPS officials tried to explain. While the rate boost would be 9.5 percent, once savings from the Spruce 2 coal plant came online sometime in 2010, the overall bill impact would be just 5 percent, they said.

That explanation did little to mollify the council or ratepayers, and CPS executives’ apparent inability to understand their outrage typified the utility’s tin ear when it came to navigating the politics surrounding the hotly debated project.

The revelation in October that a $12 billion construction cost estimate had been kept from the CPS board – and the ensuing uproar – may have been the precipitating event that blew up the deal with NRG Energy a few months later. But CPS’ failure to get the politics right was one of several factors that undermined the utility’s efforts to stay in the project.

Others included a leadership vacuum at CPS that allowed a cadre of true believers – the utility’s nuclear development executives – to continue pushing the deal, even as the economic ground shifted beneath their feet.

By 2009, the country was wallowing in a recession that had altered the energy landscape: San Antonio’s power needs had diminished, natural gas prices were dropping and the imminent threat of carbon-emissions legislation was receding.

But it wasn’t until San Antonio elected a new mayor in May that the CPS board gained a skeptical voice questioning the assumptions of the deal. Before then, there seemed to be few checks by the board as the project moved forward, even during the bouts of heartburn brought on by CPS’ partner in the deal, NRG.

The merchant power company based in New Jersey had long nursed concerns over CPS’ ability to get public approval and pay for the equal ownership share of the project the utility insisted on, resulting in periodic friction between the partners.

CPS executives’ decision not to reveal the high cost estimate to the board amped up that friction, since NRG planned to share it with analysts at a quarterly meeting. But during that meeting, Steve Winn, CEO of Nuclear Innovation North America, a partnership between NRG and contractor Toshiba, went further.

He told Wall Street analysts that San Antonio might not be able to afford the project, a move that infuriated CPS.

Rumblings that NRG was working against the utility’s interests intensified.

Working to be first

NRG CEO David Crane defended his company’s actions.

NRG didn’t want CPS out of the deal, he said. Whatever level of investment San Antonio could support was fine with NRG, but the utility needed to decide. The uncertainty was damaging the project’s reputation, he contended.

Crane, a former Lehman Brothers investment banker, had international business contacts that helped NRG forge agreements with Japanese firms like Tokyo Electric Power Co., which signed on as a consultant in 2007, and Toshiba, which ordered from Japanese Steel the massive reactor parts no American company could make. NRG also looked to the Japanese government for loan guarantees.

With the STP expansion, NRG was reaching for a goal no less ambitious than reigniting the U.S. nuclear industry, which had stalled in the 1970s.

But with passage of the 2005 Energy Act, incentives became available for companies willing to take the risk.

In 2007, NRG became the first company in decades to file an application with the Nuclear Regulatory Commission. STP’s already-available land, water and transmission lines made it one of the most favorable sites in the country.

Still, NRG sought to reduce its risk further – an effort that led to one of the most controversial developments of the project, from CPS’ perspective.

In March 2008, without telling CPS in advance, NRG signed a deal with Toshiba to create NINA, to market and build nuclear projects throughout the U.S.

Toshiba paid NRG for the right to act as contractor on future NINA nuclear projects and for a 6 percent share of the STP expansion.

Crane said the partnership had an added benefit: As a co-owner, the contractor would have an interest in trying to keep the project’s costs in check.

The view of the deal from Navarro Street, though, was one of suspicion.

CPS Trustee Steven Hennigan, who survived Castro’s call to step down last fall, was uncomfortable with NRG, so the partnership deal with Toshiba put him on high alert.

And when, more than a year after NINA was formed, Winn and Mike Kotara, a senior member of CPS’ nuclear development team, came up with a plan to change the partners’ ownership terms from 50-50 to 60 percent for NINA and 40 percent for CPS, Hennigan’s alarm bells really went off.

But the genesis of that proposal stemmed not from NINA, but from CPS’ own financial woes, Kotara said.

In May 2008, after spending about $200 million on the project, CPS asked the City Council for a 5 percent rate increase, about a third of which would go for the expansion. But even after intense lobbying by Hardberger, the City Council approved just 3.5 percent, specifically asking that none of the increase go to the nuclear project.

"So we had another six months of drift," Winn said. "That’s when Kotara and I started talking about a 60-40 split."

That would have put some money in CPS’ pocket, but the CPS board rejected the offer, wanting to maintain its equal footing with NRG, even though the utility was dealing with almost unprecedented financial difficulties.

The world changes

For years, CPS’ finances had been strong. It didn’t need to raise rates and it had the highest credit rating of any municipally owned utility in the nation. It operated for decades with little oversight, dutifully shipping hundreds of millions of dollars every year to City Hall – enough to make up almost a third of the city’s general fund – while offering some of the lowest power rates in the country.

CPS was accustomed to the public praise of elected officials.

And while Hardberger largely had kept his reservations about the proposed nuclear expansion to himself, Castro began questioning the deal almost immediately after taking office in June.

His concerns were bolstered by the work of Councilman Reed Williams, a retired refinery executive who ran the numbers on the nuclear deal and didn’t like what he saw. Compared with the cost of natural gas, nuclear power had just a slight edge, Williams concluded, but carried more risk than he thought a city utility ought to take.

Castro’s apprehensions about CPS created an opening for NRG to court the new mayor. It saw Castro as the key decision-maker in San Antonio on the nuclear issue.

But while the mayor’s private meetings with NRG were viewed with suspicion by CPS, they weren’t always doing what NRG hoped. Indeed, Robbie Greenblum, Castro’s chief of staff, ultimately soured on the company during a late-August meeting with Winn and Crane.

But his suspicions about NRG took a back seat to the news that then-interim General Manager Steve Bartley hadn’t shared the higher cost estimate with the board. With a construction estimate from Toshiba $4 billion higher than expected, the total project cost could top $18 billion – $5 billion more than CPS had told the public.

That estimate was a negotiating tactic on Toshiba’s part, Bartley insisted at the time, and the utility never would have agreed to move forward at that price.

In hindsight, some people close to the deal believe that if the board had been properly briefed about the estimate, it might not have become the crisis that led to CPS ending its partnership with NRG.

But so much had changed from 2007 to 2009, it seems unlikely that CPS would have been able to remain a full partner in the project, even if Bartley had handled the estimate better.

The utility’s revenues were dropping from reduced power use, lower natural gas prices and shrinking off-system sales, even as it was burning through $1 million a day on the nuclear project.

CPS executives conceded they couldn’t keep rate increases to 9.5 percent every other year and still pay for the nuclear expansion and upcoming capital expenses.

At the same time, developments in the natural gas industry were making the price of that fuel less volatile and more cost-effective.

Selling more of CPS’ stake in the project – one way to reduce the utility’s costs and risks – was dependent on finding a buyer, not a sure bet, according to people familiar with the market.

"The world changed on them," Williams said recently. "And they weren’t continuing to check their assumptions."

By early December, CPS’ role in the nuclear deal was no longer tenable. The utility had lost credibility, Bartley and another executive had been forced out, Castro wanted new people on the board and relations with NRG had grown cold.

The crisis ended, for the most part, by CPS’ success in the courtroom, where it prevailed at a critical stage of its lawsuit against NRG and NINA to exit the deal. In the end the parties negotiated a settlement that, assuming the plant is built, gives CPS 200 megawatts from it, enough to power about 40,000 homes.

For its almost $400 million investment, CPS says the agreement is worth $1 billion.

Some of the credit for the settlement goes to Charles Foster, the retired AT&T executive who replaced Aurora Geis as board chair after Castro sought her resignation.

Foster inserted himself in the stalled negotiations with NRG, and along with acting General Manager Jelynne LeBlanc-Burley, helped hammer out the deal.

LeBlanc-Burley, the human-resources vice president promoted after Bartley’s departure, then helped persuade a still-skeptical City Council to pass the rate increase it needed, a move that shored up credit rating agencies’ confidence. Moody’s, which had downgraded CPS’ outlook to negative, bumped it back up to stable after the vote.

CPS is on the mend, Foster said. Its financials are strong, he said, and the utility is headed in the right direction. The search for a new CEO should be complete by June.

He acknowledged the utility still has work to do, chiefly to repair lingering perceptions that it’s not an open, trustworthy organization.

And challenges remain as the utility embarks on a period of high capital investment in aging coal and gas plants, which means convincing the public that regular rate increases will be necessary.

Williams worked unsuccessfully to get CPS to change its rate structure in a way that would reward efficiency and hopes to tackle the subject again.

He thinks the utility needs to stay focused on its core mission.

"As long as they recognize that they’re a public service company,” he said, “I think they’ll be fine."

URGENT – Stop Texas from Becoming the Nation’s Radioactive Waste Dump!

Hello Friends,

Your help is urgently needed.

A crucial vote could occur on July 6th on a proposed rule that would make Texas into the radioactive waste dump for the nation, and perhaps the world. WE MUST STOP THIS VOTE FROM GOING FORWARD.

Originally only Texas and two other states could send radioactive waste to West Texas. Now a rule proposed by the Texas Low-Level Radioactive Waste Disposal Compact Commission would let Waste Control Specialists dump radioactive waste from 36 or more states, and potentially from around the world, in Andrews County. This is not what anyone bargained for – even the legislators who approved the original Compact Agreement.

The proposed rule literally has no volume limits on radioactive waste or on radioactivity levels of imported materials. Exposure to radiation can lead to cancer, genetic defects and deaths. Care must be taken in developing radioactive waste rules in order to protect future generations.

Call your State Representative and Senator today!
(You can find out who represents you at: http://www.fyi.legis.state.tx.us)

Urge your legislators to tell the Compact Commission to halt their rushed vote on the risky radioactive waste import rule, until the legislature has analyzed the risks and liabilities to Texans from expanding the radioactive waste dump.

The Waste Control Specialists site is seeking waste from 36 or more states, and potentially from around the world, instead of just Texas and Vermont. They have the legal authority to limit the site to just the two states. We must protect Texas from becoming the nation’s radioactive waste dumping ground.

Email Compact Commissioners at Margaret.Henderson@tllrwdcc.org. Or call Margaret Henderson at (512) 820 – 2930.

What’s Wrong with the Import Rule?

• No limits on the volume or radioactivity of waste, or the states from which it can come.
  36 (or more) states and international sources could end up dumping radioactive waste in Texas. The Compact Commission has the authority to limit the site to only the Compact states, Texas and Vermont, and they should do so. The two states would have enough waste to fill up the site three times over. Other Compacts have limits in place. Why aren’t there any here?
• Public health and safety concerns are not addressed. All six existing radioactive waste dumps have leaked, and there is no technological fix that would prevent leaking in Texas. The Compact Commission has not considered health and environmental risks to Texans.
• Transportation routes for radioactive waste have not been identified. Would it go through your town?
  No emergency response plans have been considered. Some communities have only a volunteer fire department. Would they have the protective equipment and the right training to handle an accident involving radioactive materials?
• Ignores Texas’ financial liability and environmental risks. Texas has liability from the moment that radioactive waste comes into our state.

The Compact Commission is NOT ready… but is rushing a vote on a risky, half-baked rule.

• The Compact Commission is not prepared to oversee radioactive waste import.
  They still have no bylaws. They have no staff and very little funding. In fact, they can barely afford to travel to meetings. They cannot afford the research they should be seeking in order to protect public health and safety and ensure monitoring.
• License for the radioactive waste dump site is on appeal.

The site is inadequate.
USGS maps show the region to be seismically active. Groundwater would be as little as 14 feet below the bottom of the trenches, which is way too close. Nine TCEQ staff members unanimously recommended denial of the license, and three employees quit in protest of licensing the WCS site. What happens if underground aquifers become contaminated? The Ogallala Aquifer underlies eight states, below the wheat and soy-growing heart of our nation.

Who stands to benefit?
Only privately held WCS, which is headed up by Dallas billionaire Harold Simmons, who may get richer yet by dumping radioactive waste on West Texas. The rest of us could end up paying to clean radioactively contamination.

Halt the VOTE!
With no safeguards in place and not a single limit on the radioactive waste that could end up in Texas, the vote on the rule must be halted immediately. The Compact Commission should go back to square one and do things right. We can’t afford mistakes that could last for centuries.
More information will be posted at: www.TexasNuclearSafety.org.

The Import rule vote could occur at an all-day July 6th meeting will be held in Andrews, Texas. The location and agenda will be posted at the Compact Commission web site: www.tllrwdcc.org. Citizens can speak, but there is no guarantee that we will be allowed to speak BEFORE a vote occurs. Please attend this meeting if you can, and insist on being able to speak before Commissioners take up their agenda.

Prior to that their rules committee will meet in Arlington, Texas – on April 29th:
Thursday, April 29th, 8:30 AM at 1301 S. Bowen Rd., Suite 200, Arlington, TX 76013
If you can attend this Arlington meeting, please do so. Citizens can’t speak at this meeting, but you may be able to catch Commissioners during a break to tell them your thoughts, and you can show your support for protecting the health and lives of Texans by your presence.

Thanks for all that you do,

Karen Hadden
Executive Director
Sustainable Energy & Economic Development (SEED) Coalition

A new report released today by Beyond Nuclear – Leak First, Fix Later: Uncontrolled and Unmonitored Radioactive Releases from Nuclear Power Plants – looks at the epidemic of reactors leaking tritium into groundwater. The report finds that the federal regulator – the U.S. Nuclear Regulatory Commission – is ignoring its oversight and enforcement responsibilities at the nation’s increasingly leaky, uninspected and unmaintained nuclear power plants. The report shows that despite agency efforts initiated in 1979 to prevent uncontrolled radioactive releases to groundwater, the NRC is capitulating to an industry decision to take almost three more years before announcing an action plan.

Instead of mandating compliance with established license requirements for the control and monitoring of buried pipe systems carrying radioactive effluent, the NRC cedes responsibility to industry voluntary initiatives that will add years onto the resolution of a decades-old environmental and public health issue.

Of further concern, the agency and the industry continue to downplay and trivialize the health risks of prolonged exposure to tritium, a known carcinogen which is shown to cause cancer, genetic mutations and birth defects.

The highly-publicized leaks of radioactive hydrogen – or tritium – from buried pipes at the Braidwood, Oyster Creek and Vermont Yankee nuclear power plants have drawn attention to a more widespread and longstanding problem analyzed by the report. Leaking U.S. reactors are now ubiquitous. There is evidence of 15 radioactive leaks from March 2009 through April 16, 2010 from buried pipe systems at 13 different reactor sites. At least 102 reactor units are now documented to have had recurring radioactive leaks into groundwater from 1963 through February 2009.

The full report, the executive summary and the press release can all be downloaded. We encourage you to reproduce and distribute all three and to forward these documents to others in your community and to send the press release to your media contacts.

April 15, 2010
For Immediate Release

Contact:
Karen Hadden, SEED Coalition, 512-797-8481

Opponents of the two new nuclear reactors proposed for Comanche Peak in Glen Rose, Texas presented oral arguments today before the three Atomic Safety and Licensing Panel judges. Attorney Robert V. Eye represented SEED Coalition, Public Citizen, True Cost of Nukes and Representative Lon Burnam in the case. The groups have many concerns with nuclear reactors, including safety and security risks, vast water consumption and the unsolved problem of radioactive waste.

The issues discussed today include:

• Impacts from a severe radiological accident at any one unit or other units at the Comanche Peak site have not been considered in the Environmental Report of the license application, but should be.

• Luminant’s Environmental Report fails to consider alternatives to more nuclear reactors, such as combinations of renewable energy sources such as wind and solar power, with energy storage and natural gas to create baseload power.

"Despite limitations on what was allowed to be presented about clean and safe energy alternatives to more reactors, we were able to make a strong case. Hopefully the panel of judges will listen," said State Representative Lon Burnam, District 90 – Ft. Worth. "Nuclear power is an outdated and dangerous way to generate electricity. Safer and more affordable options exist and are in use today." Burnam is an intervenor in the case.

"Luminant refuses to look at the impacts of severe accidents. Their probability argument is dishonest. They paint the risk from accidents as low, since they don’t happen every day. However, all it takes is one serious accident such as a meltdown or terrorist attack on a spent fuel pool to result in catastrophe, "said Eliza Brown, Clean Energy Advocate for the Sustainable Energy and Economic Development (SEED) Coalition. "Accident impacts would be huge. Deaths and cancers would result from radiation releases, as well as birth defects from genetic damage. Luminant refuses to acknowledge these catastrophic risks."

The NRC and Luminant attorneys have tried to get the contentions raised by intervenors dismissed. The panel of judges have yet to decide whether these important safety issues are given a full hearing.

Luminant’s attorneys made the argument that no project exists that combines solar, wind and energy storage together. At the same time, the utility is partnering with Shell in developing energy storage. There is no technological barrier that prevents the combination of wind, solar, energy storage and natural gas. Experts report that these resources can be combined to provide baseload power.

"At the same time that Luminant attorneys say that wind, solar and energy storage can’t be used for baseload power because it hasn’t been done yet, they want to build two nuclear reactors using a design that has never been built anywhere in the world. How’s that for hypocrisy?" said Karen Hadden, Executive Director of SEED Coalition.

April 15, 2010

Greg Harman
San Antonio Current QueBlog

A pair of Vermont consultants blasted an unfunded Texas commission this week for preparing legal language to govern the expansion of a two-state low-level radioactive waste dump in West Texas out of fear it may impact Vermont’s ability to dispose of its only nuclear reactor.

"We are gravely concerned that this rulemaking is occurring in a rushed and ill-advised manner," wrote Margaret Gunderson, a consultant to the Joint Fiscal Committee of the Vermont State Legislature, and Arnie Gunderson, an appointed member of the public oversight committee advising on operations at the troubled Vermont Yankee nuclear power plant. The Entergy-owned plant, recently found to be leaking radioactive tritium into area groundwater and ordered closed by the Vermont Legislature, is to be disposed of at the West Texas dump.

In a letter to the Texas Low-Level Radioactive Waste Disposal Compact Commissioners, the Gunderson’s expressed concern that if the Texas-Vermont compact is expanded to other states Vermont may end up losing the space needed for the Vermont Yankee and its growing waste stream. Texas has approved 2.31 million cubic feet for compact wastes from Texas and Vermont, though Vermont expects its one reactor to require at least 1 million cubic feet.

"The 2006 assessment does not include the recently uncovered leaking buried pipes and subsequent soil contamination by tritium, cesium, manganese, zinc, and cobalt," the pair wrote. "In light of these recent findings, it is critical that 1 million cubic feet of space contractually reserved for Vermont’s low-level radioactive waste must be reserved in the import rule for use beginning in 2012 not at some abstract time in the distant future."

Arnie Gunderson told the Current today that he is preparing a report for the Vermont Legislature now that will advocate pushing for a delay of the proposed import rule. Vermont members represent two seats on the eight-member TLLRWDC Commission.

As currently worded, the proposed rule states that room for Texas and Vermont will not be "reduced," but sets no specific volume level. Texas has four operating reactors that will require at least 2.7 million cubic feet of space at WCS. Applications are pending with the U.S. Nuclear Regulatory Commission for four more reactors.

A representative of the TLLRWDCC was not immediately available for comment, but Commissioner John Ford told theCurrent six months ago that they were "not going to get ahead of where our decision-makers, legislators, and Governor want to go on" the potential import of additional waste streams.

Another reason Vermont was be getting heartburn over the move is that it also would potentially penalize the state if it chose to export Vermont Yankee waste to a state other than Texas.

A three-state compact to dispose of low-level radioactive wastes from Texas, Maine, and Vermont in Texas was approved by Congress in 1998, though Maine later dropped out over frustrations with delays getting a site open in Texas. Though WCS convinced Andrews County taxpayers last year to float the $75-million bond to pay for the compact dump’s construction, a legal challenge pending in El Paso has held up construction ever since.

Further complicating matters, the TLLRWDC Commission has not been funded by the Texas Legislature. Wrote the Gunderson’s: "Since the Texas Compact Commission has no staff and no counsel of its own, there has not been a thorough legal review of this process. We urge the Commission to not pass this language without adequate review by the State of Vermont, its Legislative Legal Counsel, and its Attorney General."

Meanwhile, railroad cars of DOE depleted-uranium waste that Utah Governor Gary Herbert refused entry to his state may be rerouted to WCS, according to a DOE Inspector General report.

Currently, Waste Control Specialists in Andrews County have licenses to dispose of federal Department of Energy waste and "compact" wastes from Vermont and Texas. But WCS has begun to threaten it may go bankrupt if it can’t get the compact site expanded to accept radioactive trash from other states, as well. A call to the company’s press officer in Andrews was forwarded to McDonald Public Relations in Austin, where Chuck McDonald was not immediately available.

WCS is owned by Harold Simmons, a Dallas-based billionaire and prominent Republican Party donor.