5 Companies Present Bids to Buy Rancho Seco Nuclear Plant

Three weeks after voters closed the Rancho Seco nuclear power plant, five bidders stepped up Friday with offers to buy the plant and run it independently.

Only one bidder--Quadrex Inc., a Campbell, Calif., nuclear engineering consulting firm--offered to reopen the facility as a nuclear plant. The others would repower it with fossil fuels--either natural gas or “clean-burning, coal-derived alternative fuels.”

Quadrex also appeared to be the high bidder--at $232 million, including the assumption of $182 million in shutdown, or decommissioning, costs--and was one of three firms to place a $500,000 cash deposit to secure its bid.

Besides Quadrex, bidders were:

- Methacoal Corp. of Bonham, Tex., which bid an undisclosed amount to convert the plant to burn fossil fuel derived from coal. Methacoal did not include the required deposit.

- Consolidated Power Co. of Norwalk, Conn., which bid an undisclosed amount to convert the plant to natural gas. It also did not include a deposit, saying it showed good faith by spending a like amount to develop its proposal.

- Sacramento Delta Power Co., a joint venture proposed by a subsidiary of Portland General Corp., which owns the utility that runs the Trojan nuclear power plant in northwest Oregon. It offered $100 million over 25 years to convert the plant to natural gas.

- CMS-Rancho Seco Co., a new company to be formed by CMS Energy Corp. of Dearborn, Mich., which is now converting a Michigan nuclear power plant to run on natural gas. It offered to do the same in Sacramento, offering $1 in cash “plus certain future costs to be determined.”

Request to Prepare Bid

In addition, General Atomics of San Diego sent a letter asking for another 30 days to prepare its bid. It said the 10 days allowed by Rancho Seco’s owner, the Sacramento Municipal Utility District, was insufficient to develop a reliable offer.

That request will be considered at the next SMUD board meeting July 6, as will the issue of whether to honor the bids submitted without deposits.

In the meantime, the bids will be evaluated by the utility’s staff, with the recommended choice brought back to the district’s five-member board of directors on July 27. Any decision to accept a bid would be put before local voters for ratification in November.

Michael Remy, the Sacramento lawyer who led the election effort to close Rancho Seco, said the preference among bidders to convert the plant “confirms what we have been saying, and that is that Rancho Seco is not economical as a nuclear facility.”

Proposal Criticized

For that reason, Remy dismissed the Quadrex proposal to reopen Rancho Seco as a nuclear-fired power plant. Remy added that Quadrex is too inexperienced and under-funded to be taken seriously.

The suggestion that SMUD would be soliciting bids to reopen Rancho Seco seemed absurd less than a month ago, when Sacramento-area residents voted by a decisive 54%-46% margin to close the plant and apparently end a long, acrimonious debate over nuclear power.

At the time, a majority of the SMUD board said publicly that although they did not agree with the decision, they would abide by the advisory vote and close the plant.

But within days, the board reversed itself, declared that the ballot measure only prevented SMUD itself from running the plant and voted to seek a buyer for the shuttered generating station.

In theory, that operator would buy and run the plant and promise to sell the power it generates directly to the Sacramento utility.

Rancho Seco supporters argued before the election that the plant had not had an adequate opportunity to demonstrate that extensive recent reconstruction would make the plant once again one of the most efficient in the nation.

After a balky start-up in 1974, the 913-megawatt plant became a stellar performer by the late 1970s, cranking out more than 70% of its capacity for three years in a row. Then it fell on hard times--in part because routine maintenance was deferred to save money, federal inspectors later concluded.

The nadir was reached late in 1985, when an over-cooling problem prompted a 27-month shutdown, during which much of the plant was rebuilt.

As the facility was wrapping up that $400-million job in 1988, Sacramento voters narrowly rejected an earlier shutdown initiative, voting instead to give the plant a chance to show if SMUD could make Rancho Seco perform. The second vote June 6 found most customers were not satisfied.