Report: Entergy's corporate culture led to recent problems at Vermont Yankee

Sen. Ginny Lyons speaks at a Vermont Yankee press conference on July 20, 2010

Editor’s note: Youtube video of the press conference on Tuesday is at the end of the story.

Download the Public Oversight Panel, Vermont Yankee Supplemental Report 072010

The Public Oversight Panel, a group of nuclear experts that reports to the Legislature, has determined that Entergy Corp.’s misstatements about underground pipes carrying radioactive waste at the Vermont Yankee nuclear power plant in Vernon came out of a corporate culture that perpetuated inaccuracies.

Panel member Arnie Gundersen says at one point, incorrect statements from Entergy may have been used to mislead the public.

The panel issued a supplemental report on the reliability of the plant Tuesday, and listed three main “concerns,” including “misleading information,” Entergy officials’ unquestioning attitude about the maintenance and conditions at the plant and the Louisiana-based corporation’s lack of investment in “non-safety” systems before problems surface.

In January, Entergy officials discovered tritiated water leaking from underground pipes at the plant. Soon after, the Legislature asked the panel to re-evaluate its March 2009 report on the reliability of the 38-year-old nuclear power plant located on the banks of the Connecticut River in light of new revelations that the pipes did in fact exist – and that they were also leaking water contaminated with radioactive isotopes of cesium, cobalt and strontium.

Until the leak was discovered, Entergy maintained that no underground pipes at the plant carried radioactive waste.

The panel declined in its latest report to state “conclusively” that Vermont Yankee can be operated reliably for an additional 20 years. The nuclear experts wrote more cautiously instead that the “misunderstandings and misstatements” that occurred during the original assessment of the plant in 2008-2009 “have no significant implications for Vermont Yankee reliability.” It also acknowledged that the plant operated for 531 days without interruption “which is in itself a significant achievement.”

The three nuclear experts on the panel said Tuesday that Entergy cannot operate the plant beyond its current license deadline unless it invests more money in the plant and “re-establishes a corporate culture” in which employees and the organization as a whole embrace “a questioning attitude.”

Legislative leaders held a press conference at the Statehouse to trumpet the panel’s findings.

Vermont Senate President Pro Tem Peter Shumlin, a Democratic candidate for governor, delivered a blunt analysis of the panel’s assessment of Entergy’s misstatements.

“There is a systemic history within the organization (Entergy) of not telling the truth when the truth must be told,” Shumlin said.

Guy Page, executive director of the Vermont Energy Partnership, a pro-Yankee trade group, countered that the report “reaffirms the central finding of the original 2009 report: that Vermont Yankee can be operated reliably beyond 2012.”

Vermont Yankee is slated to shut down in March 2012. Entergy has been pushing for a 20-year extension of its license to operate the plant, which requires legislative approval. In February, the Vermont Senate voted against relicensure of the plant.

House Speaker Shap Smith said it isn’t likely that lawmakers will take up the matter again.

“From my viewpoint, the issue largely has been decided,” the speaker said. “You need a positive vote from both sides of the Legislature to have the continued operation. The Senate vote was quite clear… and it doesn’t seem to me that there needs to be legislative action at this time. I think this report reinforces what many people believed when that vote was taken last year, which is that the culture within that organization was such that people did not believe there was any justification for continued operation.”

Larry Smith, spokesman for the plant, pointed to recent “breaker-to-breaker runs” as evidence that the plant is fit to continue operation another 20 years. “We just completed 531 days,” he said in an interview. “That couldn’t happen if this plant wasn’t reliable.”

The report’s findings ignited other sharp disagreements Tuesday about their meaning and intent. A quarter of the 21-page supplemental report focuses on what Arnie Gundersen, a member of the panel, calls a “cover up.”

Larry Smith, the communications manager for Vermont Yankee, countered that the report exonerates Entergy. “The misstatements and misunderstandings regarding the testimony on underground piping have not resulted in any deliberate” attempt to mislead, he said.

Gundersen insisted this is a misinterpretation of the panel’s intent.

“Entergy is trying to spin the report, and saying there was no deliberate attempt to deceive,” Gundersen said. “That’s an inaccurate reading of the report.”

Gundersen said initially Entergy and Nuclear Safety Associates, the firm hired to evaluate the plant for the panel, had a fundamental misunderstanding about whether there were any underground pipes carrying radioactive wastes from the plant. In the end, NSA stated there were no such pipes at the plant in its report to the panel.

“We can’t figure out a motive about why Entergy would want to deceive (at that point),” Gundersen said. “That seems to be a mistake, not deliberate.”

But Gundersen alleges that the mistake turned into an attempt to mislead over the course of a 17-month period. Entergy had ample opportunity to address inaccurate information in the NSA report about the pipes in technical comments, Gundersen said, but the company didn’t ask for a correction – it allowed the report to state there were no underground pipes carrying radioactive waste.

Then in January 2009, an engineer, under questioning from the Vermont Public Interest Research Group, stated in testimony to the Public Service Board that there were no such pipes. In March 2009, the panel produced a report based on NSA’s comprehensive reliability assessment that included the inaccuracies about the nonexistent pipes. Two months later, Jay Thayer, the then plant manager, also said no to the pipe question and said he’d get back to the board. A week later, another official said no again under sworn testimony to the board. In August, Entergy sent a letter to Gundersen that stated there were no underground pipes carrying radioactive waste and that the issue was closed.

The panel report points to an investigation conducted by Entergy’s lawyers that concluded that the corporation gave Gundersen an inaccurate response because he would “seek to reopen issues from the audit.” A correction to the comprehensive reliability assessment, however, would have been the proper remedy, according to the panel.

“Had this been done in August 2009,” the panel wrote, “Vermont Yankee’s reputation would hardly have suffered. Most, if not all, of the Entergy employees who have been removed from Vermont Yankee would still be employed there. Several million dollars spent responding to the inaccurate statement issue would have been available for other uses.”

The attorney general’s office is conducting a civil and criminal investigation into Entergy’s alleged misstatements over that time period.

“What started out as a misunderstanding in 2008 became a criminal investigation in January of 2010, all because they didn’t want to reopen the report,” Gundersen said.

The panel wrote that the significance of the inaccurate statements in terms of the reliability of Entergy Nuclear Vermont Yankee “can only be determined after completion of the attorney general’s investigation, when it will be possible to assess the adequacy of Entergy’s response to the misstatements.”

In its report, the panel characterized the misleading public remarks made by Entergy officials as part of an “organization-wide breakdown” that appears to indicate that “the cultural norms that allowed personnel to perpetuate misstatements for 12 months are endemic throughout the Vermont Yankee organization.”

The idea that a few people in the same department might be caught not telling the truth might be understandable, Shumlin said. But that wasn’t the case, according to the panel.

“What they identified in this particular instance is 11 different individuals scattered throughout the organization, scattered in different departments, who could not and would not tell the truth,” Shumlin said.

According to the report, 11 Vermont Yankee employees have been disciplined as a result of misleading statements that were made to Vermont public officials, most notably, Jay Thayer, the former plant manager. Thayer was removed from his position after he told the Vermont Public Service Board last year that underground pipes carrying radionucleides didn’t exist on the plant compound. Larry Smith said he could not comment on the discipline meted out to Entergy employees.

“The systemic nature of the failures to communicate accurately in important forums and the sheer number of persons involved amplifies the panel’s earlier concern that there is a lack of a questioning attitude within ENVY’s organization and corporate structure,” the nuclear experts wrote.

That “lack of questioning attitude” has led to five pipe-leak events on Advanced Off-Gas system drain lines at the plant, according to the panel’s report. Nuclear Safety Associates, the expert firm contracted to assess Vermont Yankee’s reliability on behalf of the panel, concluded that employees at the plant did not have an “effective program or practices in place for early leak detection and monitoring of underground” piping. The panel said this situation created “missed opportunities” for fixing problems before they occurred, a “significant management weakness.”

Gundersen said employees didn’t question, for example, why the ground sank on five separate occasions, starting in 2008. The leak was discovered in the vicinity of the subsiding soil this spring.

Shumlin cited the tritium leak as an example. “When underground pipes are found leaking tritium, cesium and other substances, they go in, they fix the pipe, they fix the hole and they go,” Shumlin said. “They don’t ask the question, are other pipes around that pipe leaking. Result? You have another leak in nearby pipe within weeks of correcting the original problem.”

The panel also cited Entergy’s inadequate investment of resources in “non-safety” related systems as contributing factors in the cooling tower collapse in 2007 and leakage in 2008. The nuclear experts quoted Entergy officials at Indian Point nuclear plant in New York, which is of the same vintage as Vermont Yankee, as saying “the physical condition of the plant in non-safety areas is visibly deficient.”

The panel concluded: “Limited resource allocation for non-safety systems might, therefore, be systemic within Entergy.”

Shumlin put it this way: “The panel identifies a culture where Entergy of Louisiana only spends money in areas that the Nuclear Regulatory Commission has high safety expectations. They do not spend money, but protect their stockholders instead of Vermonters, in all areas of maintenance. What does that mean? That means things like underground pipes, cooling towers, when there’s clear evidence there is a maintenance issue that needs to be addressed, they won’t address it.”

Guy Page, of Vermont Energy Partnership, said in a statement that the plant has been “exhaustively scrutinized from a safety and reliability standpoint by the independent U.S. Nuclear Regulatory Commission and consistently attained high safety ratings.”

Smith chalks up the problems pointed out in the report to “lessons learned.” He said the corporation has already started to pay more attention to management weaknesses and maintenance of “non-safety” equipment such as the Advanced Off-Gas system as a result of the “root cause analysis,” the company’s assessment of the tritium leak.

“Safety is our first priority, both nuclear safety and radiological safety; there is no such thing as being overly focused on safety,” Larry Smith said. “Non-safety related equipment in the plant is also important, and we’re using the recent root cause analysis of the tritium leak as a basis to focus our attention and resources on non-safety related equipment going forward.”

Since Entergy purchased the plant in 2002, Larry Smith said, the corporation has spent $190 million on capital improvements on safety and non-safety equipment. To date, the company has spent $10 million on the tritium cleanup, which has involved extensive excavation, the repair of leaky pipes and the removal of contaminated soil from the site. “We continue to spend what is necessary so the plant is safe and reliable,” Smith said.