Is Entergy Telling Investors the Truth About Its Troubled Pilgrim Nuclear Reactor?

Statements by Entergy Wholesale Commodities President Bill Mohl during a conference call with investors raise questions about whether he was covering up material facts. Specifically, during a February 5, 2012 quarterly earnings report conference call, company officials failed to disclose material information about Entergy’s troubled Pilgrim nuclear reactor in Plymouth, Massachusetts. The same day as the call, U.S. Nuclear Regulatory Commission inspectors were onsite investigating the Jan. 27, 2015 emergency scram and mechanical failures at Pilgrim and Entergy was filing another “event report” with the NRC. Yet when asked what was going on, Mohl replied that Pilgrim shut down “orderly, safely and without incident.” Facts surrounding the events of January 27, 2105 tell a different story.

Entergy’s 42-year old Pilgrim reactor sits on Cape Cod Bay, vulnerable to coastal storms. Two years ago, on February 8, 2013, storm Nemo knocked out Pilgrim causing an emergency shutdown (scram) resulting from switchyard transformers affected by storm conditions. That scram, along with three others put Pilgrim in the NRC’s “degraded cornerstone” category, triggering increased NRC scrutiny. On January 26, 2015, a day before Juno hit and knocked out Pilgrim, the NRC slapped Entergy with two more “white paper” findings, identifying “deficiencies regarding Entergy’s execution of corrective actions as documented in corrective action plans as well as Entergy’s understanding of some of the causes of the issues.” The NRC’s January 26, 2015 inspection report says that Entergy did not have in place adequate guidance and procedures for dealing with storms like the one that caused the complicated reactor scram on February 8, 2103-and this proved true in 2015.

On January 27, 2015, the day after the NRC’s report, Pilgrim had another scram and the plant remained shut down for 11 days. The scram resulted from loss of offsite power and mechanical failures ensued, triggering an immediate on site inspection by six NRC inspectors. Their inspection report is due mid-March, 2015.

While the NRC was on-site inspecting Pilgrim in connection with the January 27 scram, Entergy gave investors its earnings report for the fourth quarter of 2014. At the beginning of the call, Chairman CEO Leo Denault described Entergy’s challenges with two of its other nuclear reactors – Indian Point in New York, and the shutdown of Vermont Yankee. Interestingly, Denault skipped over the facts that Pilgrim, still in a “degraded cornerstone” as a result of the NRC’s January 26, 2015 inspection report, had experienced yet another scram, and the NRC inspectors were on site. Pilgrim remained off line for 11 days, from January 27 to February 6, 2015.

It wasn’t until a stock analyst asked EWC President Mohl a question about Pilgrim that the subject of the crippled reactor came up in the quarterly earnings report call. Here’s the exchange:

Andy Levi (Analyst-Avon Capital):

“….The follow-up I have–this is on Pilgrim–I guess since the big snowstorm, the plant has been out. If you can kind of give us an update there. And if I’m not mistaken, you were supposed to have an outage in 2015 on Pilgrim. And so whether this unforced outage will help on the scheduled outage that you had, or is this just an unfortunate outage event in the spring you will go into your regular outage and also the cost of having the plant down this during this time of year?”

Bill Mohl (President, Entergy Wholesale Commodities):

“So to answer the question regarding Pilgrim, the plant did shut down due to Storm Juno. It shut down orderly, safely without incident on the 27th. We did lose off-site power to the facility. However, all safety systems and backup power systems worked as planned.

So we have been working through that, dealing with a number of issues. We expect that plant to start up in the near term in the next couple of days and be back to full load probably sometime this weekend.

As it relates to the planned outage, we do have a refueling outage that is scheduled in the spring. That remains unchanged. So we still need to refuel the facility and perform normal maintenance on that facility as we originally planned. So nothing really changes there.”

The transcript of the Earnings Report Conference call is available as a PDF →

The Avon Capital analyst appears to be questioning Pilgrim’s ability to generate operating income for Entergy and whether in addition to being knocked out by Juno and consequently losing revenue, Pilgrim will also have a “refueling outage” in the spring of 2015. The answer is yes. The refueling outage usually lasts about a month and is required in order to resupply the reactor core with new fuel rods. Any outage, or days off line, means Pilgrim is not generating operating income for Entergy.

As described, in response to the analyst’s question about Pilgrim’s January 27 scram, Mohl says Pilgrim “shut down orderly, safely without incident on the 27th” of January during coastal storm Juno….” and we are “dealing with a number of issues.” “Orderly” and “without incident” does not accurately describe the unplanned emergency scram and the ensuing unforeseen mechanical failures.

The scram was documented by the Union of Concerned Scientists (USC) which summarized it this way.

“…there was an “initial loss of the offsite power lines” and “ensuing problems…including the failure of the HPCI [high pressure coolant injection] system, the inability to open one safety relief valve from the control room, and the failure of the standby diesel powered compressor to start.”

Here is USC Backgrounder Pilgrim →

The NRC “event reports” also provide detail. The first event report, # #50769 describes how Pilgrim lost offsite power at 4 a.m. on January 27 at high tide as Juno hit Pilgrim head on, and went into a scram. Then, at 9:48 a.m. on January 27, Pilgrim had two mechanical failures, loss of the high-pressure coolant injection system (NRC event 50771 ) and the loss of sea water intake bay level instrumentation due to loss of instrument air (NRC event #50790). Entergy describes the latter as one that “results in a major loss of emergency assessment capability.” This mechanical failure was not reported to the NRC until February 5, almost a week after it occurred – which happened to be the same day Mohl was telling investors Pilgrim shut down was “without incident.

Things got worse for Entergy after Juno. At noon on February 14, 2015 Entergy announced that it was taking Pilgrim off line “in preparation for Storm Neptune.” Pilgrim remained off line for three days, February 15, 16, and 17. The fact that Entergy shut down Pilgrim in advance of Storm Neptune seems to imply that management realizes the station is not equipped to handle storms, as the NRC’s report indicates. One wonders what investors would think.

1 Comment

  1. Lillia Frantin

    Pilgrim is one of the worst performing nuke plants in US, has been found requiring inspectors to visit the plant to ensure it can operate safely…and all this BEFORE THE SCRAM and follow-up SHUT DOWN during the recent snow storms here in MA. The costs to operate it safely will continue to escalate (see what degraded cornerstone status means!), the problems with this 42 yr old antique will multiplyvs solar & green renewables now provide more jobs & cheaper installation costs, impacts of climate change are becoming more of a known-quantity (raised & warming oceans, etc) the public is FED UP WITH NRC inability to reign in this accident=waiting-to-happen. Investors will start bailing from Entergy, that’s why the CEO has to cover Pilgrim’s (and other failing nuke-plants) tracks. This is an OLD & DANGEROUS energy source, to paraphrase what Einstein said 50 years ago: a crazy way to boil water. SHUT PILGRIM….FOR GOOD!

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