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Published: Friday, 4/22/2005

FirstEnergy is slapped with $5.45M fine

BY TOM HENRY
BLADE STAFF WRITER

WASHINGTON - The Nuclear Regulatory Commission yesterday proposed a record $5.45 million fine against FirstEnergy Corp. for allowing Davis-Besse's old nuclear reactor head to get so corroded that it nearly burst in 2002.

The regulatory agency has described the neglect as one of the biggest safety letdowns in the nuclear industry's performance history.

The NRC said that $450,000 of the proposed $5.45 million fine is specifically attributed to an attempt to mislead regulators about the plant's status after Davis-Besse's reactor was refueled in 2000.

Luis Reyes, the agency's executive director for operations, termed it a "willful failure to provide the NRC with complete and accurate information."

Rust coating the nuclear reactor in this 2000 photo
had developed from a leak that went unnoticed
during inspections. The extent of the leak was discovered two years later. A section of the reactor lid
was nearly eaten through by acid. Rust coating the nuclear reactor in this 2000 photo had developed from a leak that went unnoticed during inspections. The extent of the leak was discovered two years later. A section of the reactor lid was nearly eaten through by acid.
HO Enlarge

FirstEnergy and Andrew Siemaszko, a former Davis-Besse system engineer accused of withholding information from the NRC about the status of the reactor head, have 90 days to appeal. The NRC did not rule out penalties against others.

FirstEnergy hasn't decided whether it will appeal, Richard Wilkins, a company spokesman, said.

Mr. Siemaszko, who lives in Louisiana, called the NRC's accusations against him an "outrage."

He told The Blade that the NRC is diverting attention away from high-level managers at FirstEnergy and the government agency.

Mr. Siemaszko's attorney in Washington, Billie Pirner Garde, said the NRC "stooped to a new low" by trying to make her client into a scapegoat.

She said his efforts to clean Davis-Besse's reactor head were thwarted by FirstEnergy management who refused to spend the time - and money - to do the job right.

FirstEnergy's proposed fine is 2 1/2 times bigger than the record $2.1 million fine against Northeast Nuclear Energy Co. on Dec. 10, 1997.

Northeast was cited for violations at the company's Millstone nuclear plant complex in Waterford, Conn.

Gov. Bob Taft said he fully supports the NRC's proposed sanction. He said it "should send a clear message to FirstEnergy that the safety of Ohioans should never be compromised."

U.S. Sen. George Voinovich (R., Ohio) agreed.

U.S. Rep. Dennis Kucinich (D., Cleveland) renewed his call to have FirstEnergy's license revoked.

He said the utility's "reckless neglect of safety procedures" endangered millions of Ohio and Michigan residents as well as millions of gallons of fresh water in the Great Lakes.

U.S. Sen. Mike DeWine (R., Ohio) and U.S. Rep. Marcy Kaptur (D., Toledo) could not be reached for comment.

The NRC wanted to delay issuing a civil penalty until a federal grand jury investigation into possible criminal wrongdoing was completed. But the agency was up against a five-year statute of limitations due to expire May 18, Scott Burnell, a NRC spokesman, said.

The grand jury, seated in Cleveland, has been reviewing evidence for more than a year. While its proceedings are secret, U.S. Attorney Gregory A. White told The Blade yesterday that the investigation is winding down and that a decision is imminent.

In a Dec. 10 filing with the U.S. Securities and Exchange Commission, FirstEnergy acknowledged being put on notice by Mr. White's office that prosecutors believe "it is likely that federal charges will be returned" against the utility's nuclear subsidiary.

NRC records show that FirstEnergy and at least one NRC inspector had a photograph from the 2000 refueling that showed Davis-Besse's reactor head ready to go back into service with streaks of rust. The picture later came to be known among NRC officials as the "red photo."

Davis-Besse's reactor operated without incident from May 18, 2000, until its next refueling outage that began on Feb. 16, 2002. However, in the fall of 2001, NRC officials sensed that reactor tubes were leaking. FirstEnergy's legal team successfully fought off what would have been the government's first safety-related shutdown order since 1987.

Then, in March, 2002, three weeks after the 2002 refueling outage began, massive degradation of Davis-Besse's reactor head was made public during an inspection.

Officials tore off the reactor head's insulation and discovered leaking acid had burned the thick steel lid down to two-tenths of an inch in one spot.

Laboratory tests showed the lid had a high probability of rupturing, a situation which could have allowed radioactive steam to form inside the containment building. The only instance of that happening occurred in 1979 near Harrisburg, Pa., at Three Mile Island's Unit 2, which experienced a partial meltdown.

Other inspections indicated that Davis-Besse's emergency safety systems could have failed to cool the reactor if a meltdown occurred at the Ottawa County power plant.

FirstEnergy spent millions to replace Davis-Besse's reactor head and improve the plant's safety systems over two years.

The NRC gave the utility authorization to restart the plant in the spring of 2004.

Activists who followed the saga said they were pleased to see a hefty fine, but disappointed that Mr. Siemaszko was singled out.

Mr. Siemaszko, who began working at Davis-Besse in 1999, claimed in a U.S. Department of Labor whistle-blower complaint in 2003 that he was fired illegally from his job on Sept. 18, 2002, for the amount of maintenance he insisted was needed on the plant's four reactor coolant pumps.

In his complaint, he alleged that he would have lost his job if he did not approve a document that stated the reactor head was fit to be put back into service in 2000. He claimed that he had insisted that the company to do more maintenance on the head and that scaffolding was taken down without his approval while he was gone.

FirstEnergy, which has denied Mr. Siemaszko's allegations, won a decision from a labor judge in the summer of 2003. That case is being appealed.

David Lochbaum, a nuclear enginer with the Union of Concerned Scientists, a group that monitors the industry, said the government should use the $5.45 million fine to investigate what's wrong with the NRC.

"It just baffles me they've singled [Mr. Siemaszko] out as the sole reason for the problems," he said, noting a report from the NRC's inspector general which blamed the agency for failing to act on the "red photo."

The NRC also came under criticism from its inspector general because the agency's former nuclear reactor regulation director, Sam Collins, allowed FirstEnergy executives to talk him out of issuing the 2001 shutdown order. NRC staff had prepared and its attorneys had approved the blocked order, Mr. Lochbaum noted.

Ottawa County Administrator Jere Witt was among several local officials who conceded after the 2002 shutdown that FirstEnergy had lost their trust.

"They have regained our trust," Mr. Witt told The Blade yesterday. "At the same time, we will continue to watch them much more closely than we have in the past - not just Davis-Besse or FirstEnergy, but also the NRC."

The NRC proposed a $900,000 fine against Toledo Edison Co., a FirstEnergy subsidiary, following an incident at Davis-Besse on June 9, 1985, in which a series of pumps and valves failed, causing a loss of coolant water to the reactor core of the plant.

That incident resulted in a 564-day outage, Davis-Besse's longest until the reactor head problem. Toledo Edison ultimately persuaded the NRC to cut the fine in half, to $450,000.

The NRC said at the time it was impressed by Toledo Edison's aggressiveness toward establishing "a long-range, in-depth corrective action program to address the problems that existed at Davis-Besse."

Contact Tom Henry at:

thenry@theblade.com

or 419-724-6079.



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