Operators urged to prioritize labor plans to control decommissioning costs

Nuclear operators planning to close reactors must set out detailed plans for labor reductions and other regulation-driven decisions to ensure decommissioning funds cover rising cost estimates, Tom Magette, PWC's Managing Director, Nuclear Capital projects & infrastructure, told the 2016 Nuclear Decommissioning & Used Fuel Strategy Summit on October 4.

There are currently 18 U.S. nuclear power plants being decommissioned and this will soon increase following a recent spate of plant closure announcements due to sustained low power prices.

The majority of current decommissioning projects are being carried out under the SAFSTOR method of deferred decontamination as operators expect Decommissioning Trust Funds (DTFs) to rise to cover future decommissioning spending. However, Rates of Return for DTFs have been lower than some expectations and current dollar estimates for decommissioning costs have risen while actual costs have varied widely.

Decommissioning funds should, in general, be sufficient to cover future expenses provided detailed planning is carried out on key cost components such as labor, Magette told the decommissioning summit. Magette reviewed expected growth of several DTFs against spending on current decommissioning projects.

"The only case where I would say where that is a problem is where you have something like a great recession... Or if you are spending money which obviously diminishes the fund that you are trying to earn money on," Magette said.

Operators must structure decommissioning strategies around regulatory milestones which drive staff placement, such as reduced security requirements, Magette said.

"You can't and don't want to be too slow on your decision-making process...If you are able to reduce staff and you are not ready to reduce staff you are carrying a cost which is ultimately going to hurt you," he said.

Swift action

Labor costs represent on average 44% of total nuclear decommissioning costs, according to a study by the Electric Power research published in 2011.

Speaking earlier at the summit, Paul Paradis, Decommissioning Director, Entergy, highlighted the speed at which the operator has cut the headcount at its 620 MW Vermont Yankee plant since it was shut down in 2015.

"Within 18 months you drop your staff from over 600 down to about 150," he said.

Operators must allocate sufficient resources to labor planning as it often involves multiple stakeholders, Magette noted.

"It's not just a matter of regulatory compliance..those headcount reductions take a lot of work behind the scenes-- they involve corporate offices, they involve HR, they may involve unions, they involve a lot of planning and work," he said.

Entergy has been planning for the SAFSTOR of Vermont Yankee since 2013, when it announced the plant would close. Following the utility's decision to also close its 685 MW Pilgrim and 852 MW FitzPatrick plants, Entergy created a new Nuclear Decommissioning Organisation to synergize skills across multiple reactors.

The new organisation would "provide the interface to the site decommissioning organisations and all the corporate workstreams,” Paradis said.

Exelon Generation agreed in August to take ownership of the FitzPatrick Nuclear Plant and Entergy will continue to plan for the decommissioning of the plant until the deal is completed, he said.

Proper treatment

Plant staff must be provided with as much information as possible regarding their job security going forward as uncertainty in employees' minds can impact the progress of the decommissioning project, John Sauger, Executive Vice President and CNO at decommissioning contractor EnergySolutions, told attendees.

EnergySolutions currently operates 50% of active U.S. commercial decommissioning sites and the company has seen productivity rise "by about 60% once people knew what their outcome was," Sauger said.

Operators can also implement contractual arrangements to retain key staff in line with project goals.

When EnergySolutions took over the decommissioning of the 900 MW Maine Yankee plant from Exelon, the contractor negotiated an employee leasing agreement to continue to employ staff close to retirement age who didn’t want to retire immediately, Sauger said.

“Having a motivated workforce starts with treating people fairly when you go into decommissioning,” he said.

Nuclear Energy Insider

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