Congress was out and Washington was empty, but that didn’t stop news from breaking during our annual August publication break. As chronicled in the Weapons Complex Morning Briefing, here are a few stories that we’ve been following.
Exelon Buys FitzPatrick From Entergy in $110M Deal
Exelon has sealed a deal to buy Entergy’s James A. FitzPatrick Nuclear Power Plant for $110 million, the utility announced Tuesday, about a week after the New York Public Service Commission approved Gov. Andrew Cuomo’s (D) Clean Energy Standard.
Cuomo’s plan is projected to pay upstate nuclear operators up to $1 billion in zero-emission energy credits through 2019, staving off closure of FitzPatrick and Exelon’s two current nuclear plants, the R.E. Ginna Nuclear Power Plant and the Nine Mile Point Nuclear Station, which is adjacent to FitzPatrick in Oswego County.
After months of discussions, talks between the two utilities and government officials escalated in mid-July as the Public Service Commission weighed the Clean Energy Standard. Cuomo and executives from each company lauded the deal Tuesday during a press conference outside FitzPatrick.
“I believe this country and this state needs a clean-energy policy that is realistic and can be implemented before we destroy this planet, and I believe that nuclear plays an important role in that clean-energy policy,” Cuomo told the crowd. “I believe if FitzPatrick closed, 615 families would be devastated. It would be 615 lost jobs, average wage $120,000 that would be basically irreplaceable in Oswego.”
Citing low natural gas prices, increased operational costs, and a poor market design, Entergy in November announced plans to close FitzPatrick by early 2017. New York officials, including state Sen. Patty Ritchie (R), state Sen. Joseph A. Griffo (R), and state Assemblyman Will Barclay (R), were involved in a number of legislative efforts to save the plant.
The transaction is expected to close in the second quarter of 2017, when Exelon says it will pour $400 million to $500 million into operations, integration, and refueling expenditures at upstate plants. The agreement dictates that Entergy transfer FitzPatrick’s NRC operating license to Exelon. The New York Power Authority will transfer the plant’s decommissioning trust fund and liability to Entergy, which will then transfer them to Exelon, pending federal approvals. The plant’s decommissioning trust fund is estimated at about $700 million.
The plan to transfer ownership of the trust from public to private control drew objections Tuesday from the Alliance for a Green Economy (AGREE) and other watchdogs railing against Cuomo’s Clean Energy Standard as a nuclear bailout.
“Governor Cuomo has truly given away the store,” AGREE Program Director Jessica Azulay said in a statement. “As if the billions of dollars of consumer money gifted in subsidies to the nuclear industry weren’t enough, now we find out that another $700 million in public assets will be handed to Exelon in order to sweeten the deal for their purchase of FitzPatrick. Is there no limit to the expense or risk that the Governor is willing to hoist on us in order to ensure Exelon buys FitzPatrick?”
Nuclear Information and Resource Service Executive Director Tim Judson said public ownership of the fund ensures responsible cleanup of the site when the plant retires.
“This transaction is monumental,” Exelon President and CEO Chris Crane said Tuesday. “It not only is good for the environment, it’s good for the community, it’s good for the economic benefits, but it sets a precedence for the rest of the country.”
Entergy Chairman and CEO Leo Denault called it “a fantastic day for Entergy,” and thanked Cuomo and Crane for “staying at the table” during negotiations. He noted Cuomo’s “forward thinking” in recognizing nuclear as a tool in combating climate change, and establishing New York as a model for the rest of the United States.
“We don’t like to admit it quite often, but quite often we’re looking to New York to see what’s new, what’s next, the latest trends,” Denault said. “Wouldn’t it be great if the latest trend became: ‘We really want to meet a very aggressive carbon goal, and we’re going to do it using the most effective tool that has ever been developed to do that, to date, in nuclear power.”
Under the Clean Energy Standard, Cuomo’s goal is to source half the state’s power through renewable sources by 2030.
DOE Should Separate Itself From WCS and Holtec Efforts: NEI
The Nuclear Energy Institute is urging the Energy Department to separate itself from private interim nuclear waste storage efforts in Texas and New Mexico, while also demanding that the department request congressional funding to complete the Yucca Mountain, Nev., licensing review.
Ellen C. Ginsberg, vice president and general counsel at the industry trade group, offered these two suggestions, and a number of others, in a letter submitted to DOE on July 29. The department closed the public comment period for its consent-based nuclear waste storage siting effort on July 31.
NEI suggested that any new DOE siting process be used only in instances where the department is establishing “a new facility,” meaning sites proposed in West Texas, and southeastern New Mexico, where private companies have already gained public consent, should be separate from any DOE efforts. Waste Control Specialists has submitted its license application to the NRC for a 40,000-metric-ton capacity spent fuel storage facility near the Texas border with New Mexico border, while another application submission is expected this fall from Holtec International for a 70,000-ton-capacity facility near Carlsbad, N.M. Roughly 74,000 metric tons of spent fuel is now stored at about 100 American nuclear sites as a result of DOE’s failure to take title to the waste, as dictated by the Nuclear Waste Policy Act.
NEI cautioned DOE against applying whatever consent-based siting process it develops to the ongoing WCS and Holtec efforts, stating that it might create unnecessary delay and/or burden for the project sponsors and stakeholders.
Both Rep. Mick Mulvaney (R-S.C.) and Rep. Mike Conaway (R-Texas) have introduced legislation that would allow DOE to contract with private companies for storage of nuclear waste, but the House Energy and Commerce Committee has said it will not consider bills that do not address the need for a national nuclear waste repository at Yucca Mountain.
“We respectfully suggest that the Department must follow current law, under which the proposed Yucca Mountain project remains the only (spent nuclear fuel) and (high-level waste) repository authorized to date,” the letter reads. “DOE should therefore request money from Congress to support the efforts of the U.S. Nuclear Regulatory Commission to complete the Yucca Mountain licensing review. If DOE does proceed with a consent-based siting approach, we emphasize that this would not, and legally cannot, substitute for compliance with the” 1982 Nuclear Waste Policy Act.
The consent-based siting effort, which is the Obama administration’s alternative to the canceled Yucca Mountain repository, envisions operation of a pilot storage facility by 2021; one or more larger, interim spent fuel facilities by 2025; and at least one permanent geologic repository by 2048.
Furthering its support for plans at Yucca Mountain, NEI said DOE has an obligation to nuclear utilities and their customers not to divert money from the Nuclear Waste Fund for efforts not authorized by the Nuclear Waste Policy Act.
“Because Congress has not approved a new nuclear waste disposal program, NWF money should not be used to explore the siting of a new radioactive waste disposal facility,” Ginsberg wrote. “In this regard, we distinguish siting a new nuclear waste disposal facility from funding benefits for the Yucca Mountain project, as the latter is authorized under the NWPA.”
WCS’ Kirk Takes Job With BWXT
Scott Kirk has exited his position as vice president of licensing and regulatory affairs for Dallas-based Waste Control Specialists for an executive role with Lynchburg, Va.-based BWX Technologies.
Kirk, who was leading regulatory efforts for WCS’ license application with the Nuclear Regulatory Commission to build and operate a consolidated interim nuclear waste storage facility in West Texas, joins BWXT as director of regulatory affairs, BWXT spokesman Jud Simmons said by email last week.
“Scott brings extensive nuclear industry experience to BWXT, and we look forward to the contributions he will make to our team,” Simmons wrote.
Waste Control Specialists spokesman Chuck McDonald confirmed that Kirk had left the company, but declined to comment further on “employee matters.” Simmons also declined to discuss what spurred Kirk’s move.
Kirk has more than 25 years of experience in the nuclear industry, joining WCS in 2007, according to the company’s website. A certified health physicist, He holds a bachelor’s degree in geology from Appalachian State University and a master’s degree in environmental health from East Tennessee State University.
BWXT is a major player in contracting with the Department of Energy and its semiautonomous National Nuclear Security Administration. It is partnering with Fluor for decontamination and decommissioning of DOE’s shuttered Portsmouth Gaseous Diffusion Plant in Ohio; is one of the parent companies of Savannah River Remediation, liquid waste management contractor at the Savannah River Site in South Carolina, and Los Alamos National Security, management and operations contractor for the Los Alamos National Laboratory in New Mexico; and provides nuclear reactors and parts to the U.S. Navy and other entities.
International Isotopes Sees 4 Percent Drop in Revenue for First Half 2016
Nuclear medicine producer International Isotopes said Monday it recorded a 4 percent decrease in year-over-year revenue for the first six months of 2016, dropping from $3.52 million in 2015 to $3.39 million. However revenue for the second quarter, ending June 30, rose by 5 percent year over year, from $1.58 million in 2015 to $1.7 million in 2016.
The company reported a net income loss for the first half 2016 of $819,945, compared to $619,040 for the same period in 2015. Second-quarter results showed a $445,427 loss for 2016, compared to $447,492 in 2015.
Based in Idaho Falls, Idaho, International Isotopes produces nuclear medicine calibration and reference standards, in addition to providing cobalt-60 products and radioisotopes and radiochemicals for medical, industrial, and other uses.
President and CEO Steve T. Laflin said in a statement Monday that the company believes future cobalt sales and the launch of new generic drug products provide opportunity for significant revenue increases beginning in 2018. In the short term, International Isotopes expects major increases in both domestic and international contract opportunities for sealed source recovery operations. In turn, the company should see a boost in its radiological services segment in the remainder of 2016 and into 2017, he said.
“We still expect to submit our generic abbreviated New Drug Application for our Iodine/MAXTM to the FDA later this year and we expect that the Iodine/MAXTM product should be just the first of several generic drug products we plan to submit to the FDA for approval in the coming years,” Laflin stated. “We believe this new business line of generic drug products will significantly increase sales in our radiochemical business segment. … In our cobalt products segment we continue to irradiate new cobalt targets and accept progress payments from multiple customers.”
In radiochemical products sales, International Isotopes’ 2016 second-quarter and first-half revenue decreased by about 8 percent year over year. The company attributed the decline to pharmacy and hospital customers switching to an FDA-approved sodium idodide product versus International Isotopes’ iodine-131 radiochemical product. Revenue from cobalt product sales decreased 18 percent in the second quarter of 2016 compared to the prior year, while first-half cobalt product sales increased about 4 percent year over year. The company blamed the second-quarter drop on a lack of availability of cobalt for source manufacturing. Revenue from nuclear medicine products increased about 7 percent for the second quarter of this year compared to 2015, while increasing about 1 percent for the first six months.
Group Criticizes SCE Over SONGS Shutdown
Southern California Edison (SCE) failed to consider whether shutting down the San Onofre Nuclear Generating Station (SONGS) was cost-effective for consumers, a pro-nuclear group argued in its latest filing with the California Public Utilities Commission (CPUC).
Californians for Green Nuclear Power (CGNP) filed comments Monday for CPUC’s reopening of the record on the 2014 SONGS settlement, which resulted in state ratepayers shouldering $3.3 billion of the $4.7 billion cost to shutter the plant following its permanent closure in 2013.
The group argued in its Monday filing that the company’s decision to shutter the plant, brought on by troubles with replacement steam generators, was “prudent and cost-effective for the company from a self-serving business perspective.” But the plant’s retirement did not support California’s environmental goals, it negatively impacted California’s power grid, and it raised electricity rates for most state residents, the group argued. CGNP also said that the replacement steam generator issues did not pose a safety threat to plant workers or nearby residents, among other claims. The filing was made in response to SCE’s motion to strike comments from CGNP, both of which were submitted in CPUC’s reopening of the record. SCE claims CGNP’s comments are beyond the scope of CPUC’s ruling.
SCE blamed the steam generator issues on Japanese manufacturer Mitsubishi, which the utility is suing for $7.6 billion.
SCE reached the CPUC-approved settlement following ex parte conversations between then-CPUC President Michael Peevey and SCE executive Stephen Pickett in Warsaw, Poland, where the two discussed the deal. CPUC has reopened the settlement record to determine whether the agreement is still reasonable, in light of the illegal communications. The company maintains that the secret talks had no bearing on the deal, which it believes to be fair.
Environmentalists Urge Delay on Diablo Canyon Shutdown
Environmentalists are urging California Gov. Jerry Brown and the California Public Utilities Commission (CPUC) to hold off from considering the joint proposal to close the Diablo Canyon Nuclear Power Plant by 2025, allowing for public debate on the environmental and economic impacts of the closure.
The Aug. 11 letter, delivered by Environmental Progress and signed by more than 60 scientists, scholars, and environmentalists, argues that the nuclear plant’s power production will be replaced by natural gas, raising the state’s carbon dioxide emissions.
Plant owner Pacific Gas & Electric Co. (PG&E) has joined a number of interest groups in the proposal, which calls for Diablo Canyon Units 1 and 2 to close in 2024-25, when their Nuclear Regulatory Commission licenses expire. The company cited the state’s shifting energy policies, including the goal of increasing its renewable portfolio standard to 50 percent by 2030, in shuttering the plant.
The plant provides 17,600 gigawatt hours of power output annually, according to the letter, representing 9 percent of the state’s internal energy production and 21 percent of its low-carbon generation.
“The Joint Proposal’s doesn’t come close to replacing this lost low-carbon power,” the letter to Brown reads. “It only mandates 4,000 gigawatt-hours per year of energy efficiency and, optionally, new renewable generation, to replace four times as much lost nuclear output. And much of the demand reduction PG&E forecasts to replace Diablo will come about simply from customers switching from PG&E to alternate electricity providers, with no guarantee that their new electricity supply will come from low-carbon sources.”
The group also cited economic losses of $27 million per year in local taxes for San Luis Obispo and Santa Barbara counties, as well as the loss of 1,500 jobs at the plant that equate to a yearly payroll of more than $200 million.
No decision should be made prior to legislative and public consideration of “how California can most quickly and cost-effectively stop the damage to the climate from our electrical system emissions,” the letter says.
California Energy Commission Chair Robert B. Weisenmiller defended the plant’s closure in an email Wednesday: “Replacing this nuclear plant with fossil-free energy is consistent with our effort to provide more clean, safe and reliable energy for Californians – and meet our ambitious renewable energy, efficiency and emission reduction goals.”
NRC Names New CIO
The Nuclear Regulatory Commission on Monday said it had selected David J. Nelson, a technology veteran who helped fix the federal health insurance marketplace website Healthcare.gov, as its chief information officer.
“David’s lengthy experience with the government’s use of information technology will help the NRC keep pace with today’s interconnected world,” NRC Executive Director for Operations Victor McCree said in a statement. “We’re glad to have him on board.”
Nelson, whose start date has not been set, previously served as chief information officer and director for the Office of Enterprise Information at the Centers for Medicare and Medicaid Services (CMS), a branch of the Department of Health and Human Services. According to Monday’s NRC announcement, Nelson helped lead recovery of the troubled Healthcare.gov rollout, whil overseeing services such as Medicare claims processing. Nelson also managed CMS’ $2.6 billion portfolio of applications, data exchanges, and various information technology services, according to the NRC.
CMS hired Nelson in 2004, and his career there included various senior roles, including: director of the Office of Information Services; director for the Office of Enterprise Management; and director of Data Analytics and Control Group for the Center for Program Integrity. Nelson’s resume also includes co-founding two broadband development companies working in underserved U.S. markets, according to the release. Nelson, who holds a bachelor’s degree in business management from the University of Phoenix, is also a U.S. Air Force veteran.