Energy Northwest missed signs of possible trouble during condenser replacement

By Annette Cary, Tri-City HeraldOctober 29, 2012 

Energy Northwest missed advance signs that there could be trouble with the replacement of the nuclear plant's condenser, said Brent Ridge, Energy Northwest chief financial and risk officer.

He reviewed lessons learned from the record-long Columbia Generating Station outage last year to allow the condenser replacement after the Energy Northwest Board requested a briefing at its meeting last week.

The public discussion about the outage issues came after a lawsuit filed by Babcock & Wilcox Nuclear Energy was dismissed and the case closed Oct. 18 in Eastern Washington U.S. District Court.

In a settlement agreement this spring, Energy Northwest agreed to pay more than $18 million to B&W. However, the payment was only recently made after Washington legal requirements were met.

Energy Northwest awarded B&W a $33 million contract to replace the condenser in spring 2011 in what was expected to be a period of about 80 days without the nuclear plant producing power for that work and unrelated maintenance. But problems with the condenser replacement project stretched the outage to about 175 days, with the delay costing ratepayers an estimated $60 million.

That the only other bid for the condenser replacement work was more than twice as high, at about $80 million, should have been an important warning sign to Energy Northwest, Ridge said.

B&W said in court documents that Energy Northwest failed to reveal important information about the work, costing B&W about $50 million. It found more radiological contamination, inadequate design documents and lack of adequate maintenance, it said in the lawsuit.

The lessons learned analysis conducted by Energy Northwest found that B&W was not sufficiently prepared to conduct the work and there were signs of that prior to the outage, Ridge said. B&W initially acted like it was working on a project such as a coal plant rather than a nuclear plant, he said.

The schedule B&W provided for the work had a low level of detail and did not adequately support planning and performing the work within the 53 days its contract covered for the condenser replacement, Ridge said.

Energy Northwest also was at fault for failing to follow its existing processes for schedules and risk management, instead adopting other processes for the construction project that were flawed, he said.

The analysis of the condenser replacement, which was led by an outside attorney and included two retired nuclear executives and 10 Energy Northwest staff, found that in the future Energy Northwest should strengthen its bid evaluation process. It also should include the right to reject all proposals.

It also called for improving terms and conditions and following existing project risk management procedures.

Some of the actions Energy Northwest has taken to correct issues have included revising and enhancing training for project managers and contract administrators. Individual personnel performance has been evaluated for culpability and appropriate actions taken, according to Ridge's presentation.

In addition, the project risk assessment and contingency planning process has been strengthened and improved through new processes.

The condenser, which was 26 years old when it was replaced, turns steam generated by boiling water in the nuclear reactor back into water for re-use.

Energy Northwest said little about the project after it became apparent that the matter likely would be headed to court. But about four months into the outage, Energy Northwest said it had mandated repeated work stoppages totaling a combined 20 days because of concerns about industrial safety and risk to the contractor's workers.

At one point it hired an alternate contractor to do some welding and the new contractor was able to produce quality work much faster, said Energy Northwest officials. There were management problems in areas of quality and safety, they said during the outage.

-- Annette Cary: 582-1533; acary@tricityherald.com

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