Peer pressure is a key weapon in the nuclear power industry’s arsenal for keeping U.S. nuclear plants running safely. But do nuclear operators have the courage to really use it?
Peer pressure is wielded – or supposed to be – by the Institute of Nuclear Power Operations. Once a year, INPO gathers the top executives of all nuclear operating companies behind closed doors for an industry reality check. INPO officials reveal how U.S. plants compare to each other on safety.
Peer pressure, runs the theory, makes CEOs compete to have their plants at the top of that list – or at the very least, not at the bottom. And if a CEO has to sit there and see his plants branded as losers in front of his fellow CEOs, he’ll go shake things up and demand changes for next year.
None of this is ever discussed in public. CEOs with iffy operations are not named or shamed outside INPO’s cloister. Is this system working?
The ratings come from individual plant visits, by INPO teams, which cover more territory than government regulators can. Regulators check whether rules are being met, and in nuclear power, the on-site Nuclear Regulatory Commission inspectors have often been knowledgeable and able to flag what they see as incipient problems. But INPO evaluations cover how plants are managed, their budgets, their corporate safety culture, and whether management has the systems in place to reach for excellence in safety, from the top down, or is only talking about it.
According to people who have sat through the end-of-inspection visits, the INPO evaluations are candid, far-reaching, and unsparing. INPO is typically headed by a retired Navy admiral, who presents final results to top executives and the board of directors, and demands pledges for needed changes. And at the next inspection, INPO evaluates plant operators on how well they responded to previous recommendations.
INPO doesn’t put out many press releases. Since its creation after the Three Mile Island-2 accident in 1979, its officials have insisted they need total confidentiality in order to get the information needed to really evaluate safety culture at each plant, and to give solid recommendations for improvements or even just better practices. And that means a lot of data isn’t shared even among INPO members.
So most of the time, the public has no idea whether the neighborhood nuclear plant got an A or an F grade. Individual utilities will sometimes put out press releases boasting about getting INPO’s top grade, but INPO doesn’t. U.S. nuclear plants have been averaging 90% capacity factors in the last decade, which means they’re running most of the time. With few incidents or failures, they get little news coverage.
One case that did come out in public was FirstEnergy’s Davis-Besse. Back in 2001-2, FirstEnergy was supposed to inspect the reactor head for a type of corrosion that had been found in other plants. The company complained that the inspection schedule would cost it needless millions to shut down the plant. It lobbied the NRC to delay inspections till the next planned outage, and it wangled permission out of the five-member commission. When the inspection finally was done, a football-sized hole was found in the reactor lid. Corrosion had eaten all the way through six inches of carbon steel down to a stainless steel liner. About half an inch of steel was all that stood between FirstEnergy and disaster. Those months of delay were nearly fatal.
The case is relevant because, the year before, INPO gave FirstEnergy its top rating for safe operations at Davis-Besse.
The case raised questions still key: about NRC’s toughness as a regulator, about INPO’s ability to get bad operators to turn their plants around, or turn them over to someone who will run them safely.
As the slow-motion disaster at Japan’s Fukushima Daiichi unfolds, we’re hearing once again about inspections delayed, backfits deferred, and safety measures postponed, all by a Japan’s largest nuclear operator who said all the right things about safety. The threat of a double whammy of earthquake and tsunami is arguably low for U.S. plants, but the threat posed by corner-cutting management that believes it can slide another one by is not.
Worse, when utilities – like any other U.S. corporation – make money, they’re declared a success, and critics get ignored or worse. Look at all the “experts” who couldn’t get enough of Enron until it collapsed, and the analysts whose careers suffered because they wouldn’t believe the miracle of Bernie Madoff. As Davis-Besse showed, when operators cut corners, it isn’t out of a desire for a meltdown but a short-term focus on profit that blinds them to risks.
And indeed, for a while, operators can pare away at safety without the bottom falling out, and their bottom line may look great.
INPO is unique in that it’s supposed to be able to stop the nuclear equivalent of an Enron or a Madoff. That’s how it was sold in the 1980s – an industry organization that would root out or turn around the bad actors before they threatened everyone.
So after Fukushima, we need a new and hard look, by both regulators and the industry itself. Do we have a highly profitable company – or two –making enough money from nuclear plants to pressure regulators and silence safety warnings from peers? Can they be stopped by anything less than accident?
If INPO is ever going to stop a bad operator before disaster strikes, if the nuclear industry’s leaders are ever going to confront a peer over the risks his operation poses to them all, this would be a terrific time to do it.