NIRS CHALLENGES OYSTER CREEK LICENSE TRANSFER

The Nuclear Information and Resource Service (NIRS) January 5 formally challenged the proposed license transfer of New Jersey’s Oyster Creek reactor from GPUN to the international conglomerate AmerGen.

In legal papers filed with the Nuclear Regulatory Commission (NRC), NIRS charged that AmerGen is financially unqualified to operate the Oyster Creek reactor, that Oyster Creek has numerous unresolved safety issues, that AmerGen partner British Energy is not fit to own or operate a U.S. reactor, and that AmerGen’s documents filed with the NRC were improperly censored—and may indicate that AmerGen intends to ultimately profit from the reactor’s decommissioning fund rather than return any excess funds to ratepayers.

Amergen is a Limited Liability Corporation (LLC) composed of PECO Energy and British Energy. The corporate structure of the LLC is intended to shield its parent companies from any liability that might be associated with the operations of the LLC—in this case, liabilities that might accrue if the nuclear reactors AmerGen operates do not operate at high capacity. As an LLC, AmerGen has few resources of its own, instead it must rely almost exclusively on revenues brought about by the operation of its reactors. PECO Energy and British Energy have put up only $110 million between them to cover costs if AmerGen’s reactors are closed and/or need major safety modifications.

AmerGen has in recent months obtained licenses to operate the Three Mile Island-1 reactor and the troubled Clinton reactor in southern Illinois.

In attempting to purchase the Oyster Creek reactor, for a mere $10 million, AmerGen is relying upon the same $110 million in reserve funds that it relied upon for its first two purchases.

But Oyster Creek has been on a fast track toward permanent shutdown, and its current owner, GPUN, has deferred numerous safety and maintenance issues in anticipation of the closing of the reactor. With the plant now set for new operations, these issues require resolution before continued operation, and any license transfer, take place, according to NIRS’ filing.

Moreover, NIRS pointed out that new information obtained from the United Kingdom’s Nuclear Installations Inspectorate—the equivalent of the NRC—indicates that AmerGen partner British Energy has engaged in a systematic, and destructive, downsizing of its workforce. According to the NII, and as reported in the last Nuclear Monitor, this downsizing has left British Energy in a perilous situation, where it simply does not have enough qualified nuclear safety experts to effectively operate its reactors. According to new information obtained by NIRS, British Energy’s own documents indicate not only the utility’s contempt for NII—as demonstrated by its opposition to NII’s findings--but that the lack of qualified staff at the utility has caused a dozen serious safety incidents at British Energy-operated reactors just since August 1999.

Predictably, AmerGen, in a filing dated January 13, 2000, opposed NIRS’ filing on narrow legal grounds. AmerGen also argued that the NRC does not need to consider whether AmerGen’s financial reserves are adequate, nor whether the numerous deferred safety and maintenance issues need be done, since Oyster Creek is currently licensed to operate. In other words, AmerGen is attempting to argue that since GPUN is licensed to run the plant—even though the NRC staff in charge of overseeing the reactor acknowledge that Oyster Creek has been preparing to shutdown—AmerGen should automatically receive a license as well.

But NIRS emphasized that whatever the outcome of this case, this is but the first rock thrown at AmerGen’s glass house. "We are committed to challenging AmerGen at every step of the way," said NIRS’ executive director Michael Mariotte. "AmerGen is trying to buy just about every failed reactor in the U.S, at pennies on the dollar, in the hopes that it can lay off workers, cut costs, skirt safety requirements, and ultimately loot decommissioning funds—all at the expense of ratepayers, workers and the public’s health and safety. AmerGen, by virtue of its partnership with British Energy, is uniquely unqualified to operate U.S. reactors."

At least one U.S. utility apparently agrees with NIRS. Rochester Gas & Electric, a partial owner of New York’s Nine Mile Point nuclear complex, recently asserted its rights of first refusal and is attempting to deny a purchase offer by AmerGen for Nine Mile Point. Instead, RG&E is attempting to buy the reactors itself—despite a state order to divest itself of electrical generating facilities—and turn over operations of the reactors to the Louisiana-based Entergy Corporation. Entergy has its own problems, and may well be overextended in its attempt to bring its influence to New York. Moreover, Entergy has pledged to honor all union contracts for the remainder of the reactors’ lifetimes. AmerGen has also agreed to honor union contracts, but one of its first acts at the Clinton reactor—even before it had assumed an operating license there—was to lay off about 20% of the workforce. AmerGen also just announced it is planning major layoffs at Oyster Creek.

"Amergen’s assurances—about labor, about safety, about finances, about decommissioning—are worthless," said Mariotte. "This is a company that cares about one thing, and one thing only, wringing the last bit of profit out of decrepit reactors, and the public be damned."

NIRS also noted that AmerGen’s filing to obtain Oyster Creek’s license, and the NRC’s accommodation of that filing, meant that NIRS had only 20 days to prepare an entire case against the transfer, all during the Christmas and year 2000 celebrations. According to NIRS work calendar, there were only 6 working days available for NIRS—or any other organization or individual—to challenge the filing. Nonetheless, NIRS prepared a 40-page intervention, backed up by hundreds of pages of documentation.

"This isn’t coincidental," said Paul Gunter, director of NIRS’ Reactor Watchdog Project, "the NRC and AmerGen deliberately chose a date that would make it most difficult for anyone to intervene in this license transfer. When it comes to public participation, the NRC talks a good game, with its "stakeholder" meetings and opportunities for public comment. But when it matters, anytime the public’s position might actually prevail, the NRC does everything possible to thwart public participation."

Meanwhile, yet another PECO Energy/British Energy subsidiary, CanaGen, is preparing—according to the British press—offer $1 Billion to buy Canada’s Bruce reactors. It is unclear whether CanaGen is offering to buy all eight of the Bruce reactors, or only the four that are actually operational. In either event, the price CanaGen reportedly is offering is far higher than that it is paying for U.S. reactors, which may give an idea of how little the decrepit U.S. reactors AmerGen is buying actually are worth.

WHAT YOU CAN DO

Write NRC Chairman Richard Meserve in support of NIRS’ petition to intervene in the Oyster Creek license transfer, and against any operation by AmerGen of U.S. reactors. Address: Hon. Richard Meserve, Chairman, U.S. NRC, Washington, DC 20555.