By Rich Heidorn Jr.
NextEra Energy, which quit the Nuclear Energy Institute last month over the trade association’s push for subsidies, last week accused the group of “extortion,” saying it was spitefully denying the company access to a database used to screen workers.
The company initially declined to say publicly why it was leaving NEI when it informed the organization of its decision on Jan. 4.
But NextEra ended its silence after NEI notified it on Jan. 30 that it was terminating its access to the Personnel Access Data System (PADS). NextEra said NEI informed it that it would be cut off Feb. 4 unless it paid $860,000, “the vast majority of which is NEI membership fees unrelated to PADS.”
“NEI’s actions were taken for no purpose other than to retaliate against the NextEra companies because of their withdrawal as NEI members,” said the suit, filed Feb. 2 in U.S. District Court for the Southern District of Florida.
NEI CEO Maria Korsnick issued a statement Monday saying she “vehemently denies” NextEra’s allegations and “will vigorously defend our position in court.”
NextEra said losing access to PADS could threaten seven scheduled refueling outages at its nuclear plants in 2018, including one set to begin Feb. 7 at the St. Lucie nuclear plant owned by its Florida Power & Light subsidiary. The company said St. Lucie’s workforce would jump from 700 to 1,700 during the monthlong outage.
The nuclear industry developed PADs in the mid-1990s as a shared database for employee security information such as criminal history reports, fitness-for-duty test results and psychological screenings.
NextEra said it would be “exceedingly difficult” to meet Nuclear Regulatory Commission requirements without PADS, noting that staff can more than double during plant outages. “Many of the additional maintenance workers employed during these refueling outages are highly transient — moving from plant to plant across the country to work during outages,” the company said. “Without access to PADS, nuclear operators would be forced to start from scratch in screening individual applicants for unescorted access, and they would do so without the benefit of consulting information already collected by other nuclear operators in an easily accessible electronic format. Similarly, without universal industry participation in PADS, the database would become incomplete. This would result in additional manual screening efforts even for continuing PADS participants.”
The company contends the PADS participation agreement, which it signed in 1995, does not require participants to be NEI members. “NEI took this retaliatory action notwithstanding that the NextEra companies have been at all times in compliance with the agreement and have paid millions of dollars to develop and upgrade PADS,” it said.
Korsnick disagreed with NextEra’s interpretation of the participation agreement. “When NextEra voluntarily chose to discontinue its NEI membership, it was no longer entitled to continue participating in PADS,” she said. “Even then, NEI conveyed to NextEra that it would supply the information in PADS necessary to maintain strict compliance with the NRC regulations. That exchange has been accomplished and will continue throughout each work week.
“To call NEI’s approach retaliatory, or even suggest the notion of extortion, is both counterfactual and offensive to the good faith effort the offer represents,” she continued. “NEI’s good faith outreach was intended to open a dialogue that would advance the industry’s interest in remaining unified, or as unified as possible, on regulatory and other policy positions. Unfortunately, rather than even opening a dialogue, NextEra immediately followed its rejection of NEI’s offer with a baseless lawsuit.”
Break over Policy
NextEra owns all or part of the Duane Arnold Energy Center in Palo, Iowa; the Point Beach Nuclear Plant in Two Rivers, Wisc.; and the Seabrook Station in Seabrook, N.H., equivalent to 6% of total U.S. nuclear generating capacity. In addition to the St. Lucie plant near Fort Pierce, Fla., FPL owns the Turkey Point plant near Miami. As of the end of 2016, NextEra also owned about 16% of U.S. wind capacity and 11% of the country’s solar capacity.
NextEra — which had been paying about $3 million in NEI dues annually — quit last month over what it called the trade group’s “irrational and unreasonable policies that would distort electric energy markets.”
Its suit cited NEI-funded studies “that call into question the reliability and costs of the electric system, attempting to create a false sense of panic and unfairly and incorrectly maligning the operations of its members, including the NextEra companies.”
“NEI claims that the ‘grid-based electricity supply portfolio in the United States is becoming less cost-effective, less reliable and less resilient,’” the complaint continues. “Such a thesis is unfounded. In fact, the policies that NEI is advocating would produce those very results by introducing artificial constraints on the way in which an electric system is planned and operated. … As large nuclear generators, the NextEra companies obviously support nuclear energy. But the NextEra companies cannot financially, or otherwise, support an organization that fundamentally mispresents the state of grid reliability in this country.”
Korsnick said NEI’s lobbying in support of Energy Secretary Rick Perry’s call for price supports for coal and nuclear plants followed “a rigorous process for gathering input from member companies to inform our policy positions.”
“On most issues [NEI] does not advocate a position until it has been approved by members of the Executive Committee. NextEra may not have agreed with NEI’s effort to support the continued operation of existing plants, but our work was guided by the interests of our member companies,” she said.
“NEI remains committed to achieving its foundational mission: to preserve, sustain, innovate and grow the nuclear energy industry. All of NEI’s actions should be and are consistent with that purpose. NEI also ensures all decisions and actions taken maintain a safe, effective and well operated nuclear energy fleet. NEI’s commitment to each of those core principles will always be absolute without compromise.”
NEI did not respond to a question about NextEra’s contention that the group is “suffering from financial difficulties.” NextEra cited NEI’s Form 990 for 2015, which it said “shows negative six-figure net assets for the 2015 and 2014 tax years.”
Entergy also Left NEI
Entergy, which operates seven nuclear plants in the U.S., also quit NEI last month, but it has not commented publicly on its reason for doing so.
“NEI has been one of several vehicles through which to advocate our positions on important policy and regulatory issues impacting the nuclear power industry,” Entergy spokeswoman Emily Bealke Parenteau said in response to a question about the company’s departure. “Entergy has made the decision to leverage its other internal and external resources for advocacy efforts.
“While Entergy will no longer be a member of NEI, we have a system in place that replaces PADS. We will continue to engage actively and cooperatively with the industry in both the operations and public policy arenas,” she added.
One industry official with knowledge of the situation said Exelon and some other NEI members view Entergy as a “traitor” for closing its uneconomic merchant nuclear plants rather than fighting for subsidies.
Exelon purchased Entergy’s James A. FitzPatrick nuclear plant in New York after the latter said it would close the plant regardless of whether the state approved zero-emission credits. Entergy also has agreed to close its Indian Point plant under pressure from Gov. Andrew Cuomo.
“Exelon told other NEI members that Entergy effectively forced them to buy [FitzPatrick] — they believed that … to get ZECs passed, they needed solidarity, and Entergy wasn’t playing ball,” the official said. “The fact that Entergy is closing Pilgrim [in Plymouth, Mass.] without a whimper and Palisades [in Michigan] when their contract ends in a few years has some NEI members upset. … Every time that a nuclear plant closes, it hurts their specialty vendors and, as a result, vendors shrink, and remaining ones have some market power. And that raises costs for every remaining plant.”
Exelon did not respond to a request for comment.