Consortium Will Design N-Reactor : Energy: Federal contract is worth $1.5 billion to four-company group that includes La Jolla-based General Atomics.

A four-company consortium that includes La Jolla-based General Atomics has won a $1.5-billion federal Department of Energy contract to design a gas-cooled nuclear reactor that would produce tritium, a radioactive gas used in nuclear weapons.

The contract was one of two awarded this week by the Energy Department, which hopes to open a pair of “new production reactors” by 2000. The two proposed reactors would replace a trio of 35-year-old tritium-producing reactors in South Carolina that have been hampered by safety problems. The federal government is in the midst of a refurbishing that will keep the reactors operating for another decade.

Officials at General Atomics hope the contract will provide a dramatic boost to the company’s commercial gas-cooled nuclear energy reactor program, which has been dormant since interest in nuclear power began to wane in the 1970s. The company sees the Department of Energy contract as a means of demonstrating that its gas-cooled technology is much safer and more efficient than the water-cooled.

Final terms of the contract have not been negotiated, but General Atomics officials Wednesday said about $500 million of the $1.5-billion, 10-year contract evidently will go to General Atomics, or to CEGA, the newly formed consortium that includes General Atomics; Combustion Engineering of Windsor Locks, Conn.; Stone Webster Engineering of Boston and Burns & Roe Co. of Oradell, N.J.

CEGA, which was formed last year, is at General Atomics’ campus-like corporate headquarters in La Jolla. Employment at General Atomics has remained constant in recent years at about 1,400, General Atomics spokesman Doug Fouqet said Wednesday. However, some General Atomics employees now work for CEGA, which has about 100 employees.

CEGA expects to add about 200 employees during the coming year to work on the contract, according to Tom Johnston, a General Atomics consultant who is coordinating much of his company’s involvement with CEGA. Some of those new employees will transfer to CEGA from General Atomics and other members of the consortium.

Although some of the design work will be handled by CEGA, General Atomics will handle much of the front-end engineering design work. Its partners will handle most of the subsequent design work for the proposed plant to be built at the Department of Energy’s Idaho National Engineering Laboratory near Idaho Falls. Preliminary construction costs for the plant have been set at $3.5 billion, Johnston said.

The contract that was awarded Monday followed a lengthy review process that “ensured that the gas reactor was consistent” with the Department of Energy’s plans to build the production reactors by 1999, department spokesman Jeff Judson said Wednesday.

A second, $1.5-billion contract was awarded Monday to a consortium led by Dallas-based Enserch Corp., which is developing a heavy-water reactor to produce weapons-grade waste byproducts. The federal government hopes to develop both the heavy-water and gas-cooled technologies to ensure that the U.S. has an adequate stockpile of tritium.

The federal contract is expected to cut the time needed to develop a new-generation commercial gas-cooled nuclear energy reactor because a significant part of the Department of Energy’s proposed production reactors is identical to the reactor design the utility industry could use for electrical generation, Johnston said.

“The modular design being used by the production reactor really had its start as a plant for our commercial nuclear power plant,” Johnston said. “In most cases, the components would be identical. We think this would be a valid demonstration that (gas-cooled reactors) can do the civilian job also.”

The military version of General Atomics’ proposed reactor would use highly enriched uranium as a fuel source in order to generate tritium, which is an essential component of nuclear weapons. The civilian reactors that General Atomics hopes to someday sell to the electric utility industry would use low-enriched uranium, which generates heat but is not capable of generating military-grade waste byproducts, Johnston said.

General Atomics has long had high hopes for its gas-cooled reactor technology. The privately held company, which developed that technology in 1957, designed a now-closed demonstration plant near Philadelphia that opened in 1967.

General Atomics subsequently designed the Ft. St. Vrain gas-cooled reactor in Colorado. General Atomics viewed Ft. St. Vrain, which went on line in 1979, as the first of many gas-cooled reactors that would be safer than water-cooled reactors.

However, Public Service Co. of Colorado closed the problem-plagued reactor in 1989 because of design flaws that forced the plant to remain off line for months at a time. Johnston said Wednesday that General Atomics had learned important design lessons from the Colorado plant that would prevent similar design flaws from occurring in the new generation of gas-cooled reactors.

General Atomics officials believe that the proposed production reactor will be used as a demonstration plant for the utility industry and the Nuclear Regulatory Commission. That dual role will occur, Johnston said, because of synergies between military and commercial applications.

Using the production reactor as a demonstration plant would allow General Atomics to “replicate (the design) for a commercial plant in within two to five years,” Johnston said.

But, although General Atomics hopes to develop commercial applications for the technology used in its production reactor design, the heavy-water reactor being designed by the second consortium “doesn’t represent a commercial challenge to us,” Johnston said. “It operates at extremely low temperatures and it’s (not capable of) producing steam or electricity.”

And, Johnston said, although General Atomics has secured the Department of Energy contract to help design the gas-cooled reactor, proponents of the competing light-water reactor technology “are still looking for their equivalent of a second- or third-generation technology . . . and have low levels of funding.”

The contract announced Monday followed a $10-million contract award that CEGA used to complete “conceptual work” on the proposed gas-cooled reactor. About $4 million of that money flowed through to engineers at General Atomics’ La Jolla facility, Johnston said.