Utility Board Moves to Let Voters Decide Fate of Rancho Seco Plant

Rejecting its general manager’s advice to abandon the troubled Rancho Seco nuclear power plant, directors of the Sacramento Municipal Utility District moved Friday toward asking voters to give the ailing plant one last chance.

The board, eager to beat next Friday’s deadline for adding to the June ballot, hurriedly wrote a referendum that would allow Rancho Seco to be restarted for the first time in two years and give the district time to find a buyer for the plant.

The district’s measure, if approved by the five-member board on Wednesday, would give voters an alternative to a popular, grass-roots initiative seeking to force the district to mothball the plant and seek other, cheaper forms of energy.

The board’s alternative measure was developed after two board members and a local businessman conducted negotiations with Duke Power Co. of North Carolina, a veteran nuclear operator that spurned an earlier plea for help.

Assume Liability

The talks sought to find someone willing to assume the financial liability of running Rancho Seco, which is among the nation’s most troubled nuclear power plants. More than $400 million has been spent on repairs since an emergency forced the plant to close more than two years ago.

Duke Power said early Thursday that it is interested in running the plant, but without risking its own money or assuming any liability. The district’s proposed ballot measure to permit this to occur was made public several hours later. Board member Ann Taylor, a vocal supporter of Rancho Seco, insisted that this was coincidental.

“This has all the appearance of a railroad job,” complained Ed Smeloff, a board member openly opposed to Rancho Seco.

“I’m not unfriendly to the idea of an alternative measure,” snapped board member John Kehoe, a swing vote, “but I am unfriendly to the manner this was brought to us at 10:07 (p.m.) on the last day of the hearings.”

Howls of Protest

The Duke deal also raised howls of protest from groups opposed to the power plant, but they apparently are powerless to prevent the alternative measure if the board votes to put it on the ballot.

As sketched by board President Cliff Wilcox and others, the Duke plan calls for Rancho Seco to be transferred to a new, independent nonprofit corporation that would hire Duke to operate it and sell power to SMUD, as the utility district is known, at a fixed rate.

However, such a plan raises a number of legal questions. Board Vice President Cort Koehler, for example, said federal regulators will not permit the transfer of the plant’s operating license. State officials said it is unclear who may set the rates; SMUD sets it own rates. It also is uncertain who would be liable for plant accidents and who would assume plant debts.

District officials said these issues will be addressed in coming days.

Deal Called ‘Fraud’

Karl Ory, Sacramento director of an anti-nuclear group, Campaign California, stood before the board Thursday and denounced the Duke deal as a “fraud.”

“It is meant to undermine the June ballot and protect the nuclear industry from an embarrassing defeat,” he said.

Ory was in the minority among the dozens of people who addressed the board. SMUD headquarters was packed Thursday night with Rancho Seco employees and their families, who said the revamped plant and new staff are reliable.

The district estimates that abandoning Rancho Seco would cost $65 million in 1988, then $13 million every year in maintenance until a federal disposal site for highly radioactive waste opens early in the next century.

If Rancho Seco can meet the industry average for reliability, it would be the most economical source of power for SMUD. But it had not met the average, which industrywide means generating at 62.6% of capacity--in eight years. It has not run at all since the end of 1985, when a rapid cool-down threatened to crack the reactor core.

Risk of Bankruptcy

Rancho Seco actually has averaged about 41% of its capacity since opening in 1974, forcing SMUD to pay both for Rancho Seco and buy bulk power elsewhere. General Manager Richard K. Byrne, along with a blue-ribbon committee of economists and independent engineers, warned that continuing the burden risks bankruptcy.

“It is unlikely that Rancho Seco can be operated at a capacity factor that exceeds industry averages, especially over the next five years,” he said last week. Without that reliability, he added, “the continued operation of SMUD as a public power entity will be threatened.”

The pessimistic outlook was surprising because at Byrne’s previous job in New England, he firmly backed the Seabrook nuclear power plant in New Hampshire. Cost overruns at Seabrook forced one utility there into bankruptcy.

A second blue-ribbon committee of former judges and politicians, as well as SMUD’s engineers, has discounted the possibility of failure, saying the plant’s most troublesome systems have been essentially rebuilt.

Passionate Controversy

“Shutting down Rancho Seco,” the second advisory panel concluded, “would be (the equivalent of saying), ‘If it’s broken, fix it--but after you fix it, throw it away.’ ”

The Rancho Seco controversy has been passionate. Phony bombs were found inside the plant Monday night when the first steps toward restart were made. SMUD executives were assigned bodyguards after their lives were threatened.

Construction of Rancho Seco, about 25 miles southeast of Sacramento, began in 1968 and ended in 1974 at a cost of $342 million. It was designed by Babcock & Wilcox, which also designed Pennsylvania’s troubled Three Mile Island plant.

A financial statement last October said that since Rancho Seco opened, SMUD had spent $466 million on repairs and improvements and had budgeted another $383 million through 1991.

After early trouble, the plant ran at 74.5% of capacity in 1979--ironically making it one of the most reliable nuclear plants at the same time that public fear about its similarity to Three Mile Island led SMUD to debate closing it.

The plant stayed open, but federal inspectors say SMUD deferred maintenance to keep operating costs low. Poor maintenance led to malfunctions that reduced reliability. In 1985, Rancho Seco’s power production was only 25% of capacity.

RANCHO SECO PERFORMANCE IN THE 1980s Since it was opened in 1974, Rancho Seco has produced only 41% of the power it was designed to deliver. The output has been particularly low since 1981. The industry average is 62.6%. 1981 35% 1982 44% 1983 39% 1984 51% 1985 25% 1986 0% 1987 0% Lifetime 41%