How safe are nuclear operations at Entergy's Indian Point facility following a weekend fire that led to the shutdown of the plant's Unit 3? During today's OnPoint, William Mohl, president of Entergy Wholesale Commodities, discusses the incident and ongoing investigation. He also talks about the impact regulatory uncertainty is having on utility planning and weighs in on the potential for nuclear waste management legislation to move through Congress this year.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Bill Mohl, president of Entergy Wholesale Commodities. Bill, it's nice to have you back on the show.
William Mohl: It's great to be here, Monica.
Monica Trauzzi: So, Bill, we'll start with some news that's moving now, the shutdown of Indian Point's Unit 3 after a transformer failure this weekend. This is not the first issue with Unit 3 this year. Why have there been repeated issues with Unit 3?
William Mohl: Well, you know, we had a refueling outage for Unit 3, which is something that we normally deal with, and it's well planned in advance. This event, obviously, was unexpected where we had the main step-up transformer, which really takes the output of the generator at 25 KV and transforms it up to 345 KV to deliver it to the power system, actually failed, and there was an explosion and a resulting fire. So that's the issue that we're dealing with right now. The unit is currently safely offline, out of service while we are investigating the cause and dealing with the aftereffects of the transformer failure.
Monica Trauzzi: So this raises some serious questions about the safety of -- of the unit. Can you ensure the safety moving forward?
William Mohl: Absolutely. So, you know, one thing that's really critical that you keep in mind is that this had no impact on nuclear safety, OK. This is a transformer that's similar to any generating unit, and we had a failure, and that failure is something that we're investigating. We will have to replace that transformer. We're also dealing with, as I said, some of the cleanup associated with the response by the -- our folks and the local fire departments as well.
Monica Trauzzi: Is there a question here -- of concern here of aging infrastructure?
William Mohl: Absolutely not aging infrastructure because that transformer was replaced back in 2007, and those transformers are expected to run, you know, in excess of 20 years, so it's not a case of something that failed because it was old. We really need to do the investigation to determine what actually caused that failure.
Monica Trauzzi: Like you said, there's a cleanup happening. What are the environmental impacts of the oil spill that resulted?
William Mohl: Well, right now, we don't know the exact environmental impacts. I've heard a number of conflicting reports of what may have been discharged into the river. A couple things I will tell you is, first of all, we take our responsibility as it relates to environmental impacts very seriously. We've taken precautionary measures, we've put protective booms out in the Hudson River. We've got our personnel on-site that are remediating the discharge, and also working through a very tedious process. So we want to be -- we feel like we've got an obligation to be very transparent and precise. We actually will report what has been discharged, so we're dealing with water, we're dealing with foam that's used by the fire department to suppress the fire which was put out on Saturday, and then also we will be investigating the potential loss of any transformer oil itself. But we really can't report on that until we complete that analysis.
Monica Trauzzi: You're not confirming that there's oil in the water.
William Mohl: We are not confirming that at this point in time.
Monica Trauzzi: OK, let's switch gears to the Clean Power Plan. As EPA weighs how to address nuclear in its final plan, how much time could the agency buy facilities that are on their way to retirement if it gave nuclear more weight as part of a compliance strategy?
William Mohl: Well, it really probably varies by what the situation is with the unit, but we believe that right now, the proposed Clean Power Plan does not adequately consider existing nuclear facilities. And in fact, only accounts -- you know, gives credit for about 6 percent. We know that nuclear generation provides about two-thirds of zero-carbon generation in the U.S. We believe that it needs to be appropriately considered, and those units need to be properly compensated through some type of mechanism, either through the Clean Power Plan or through some changes in the regional markets, which for the Northeast could include the, you know, current RGGI system, Regional Greenhouse Gas Initiative. But in general, we think that small single-unit nuclear plants, especially in the merchant sector, continue to be at risk from an economic viability perspective as you look at the long run.
Monica Trauzzi: So how are -- the uncertainty that's surrounding the language or the final rule, the potential for legal challenges once that final rule comes out. How is that affecting utility planning?
William Mohl: Well, I mean, from a resource planning perspective, it creates a lot of uncertainty, because right now, you know, for example, you know that coal plants, you know, a lot of coal plants will be put at risk. You start to put at risk large baseload units such as nuclear units. It's hard to replace that type of baseload generation, especially being carbon-free. So it makes it difficult to plan from a long-term perspective to have that -- really that baseload foundation for a system, and you simply can't replace that with some intermittent resources, which would, you know, like wind, solar, et cetera. We certainly think they need to be part of the portfolio, but what we don't think is happening right now is people aren't looking at the big picture from a policy perspective to make sure that you've got a sustainable plan as you look into the future, especially in competitive markets. That plan needs to consider economics, reliability and environmental, and we believe that baseload nuclear is a key contributor to all those.
Monica Trauzzi: And natural gas as well.
William Mohl: Absolutely. You know, we don't -- we view that diversity as important and that, you know, every technology has its place. What you have to be careful of is you don't become over-reliant on one technology or fuel in the future because that creates what we would think about as tail risk. You know, we could see fuel costs go up substantially, we could see liability put in jeopardy if there's not a robust long-term plan for the various regions.
Monica Trauzzi: Entergy is in the process of decommissioning its Vermont Yankee facility. You've pulled some data from the New England ISO and EPA on emissions levels from 2013 to 2015. What are the impacts that you believe decommissioning Vermont Yankee has had on emissions?
William Mohl: Well, in general, we've seen, you know, a fairly significant rise in emissions. So I believe Vermont Yankee provided about 5 percent of the total energy supply to the New England area. That's been replaced largely by natural gas and oil, so we've seen a significant increase as it relates to carbon, SO2 emissions, et cetera. And again, kind of goes to the point of why these baseload nuclear facilities are important from an environmental perspective.
Monica Trauzzi: What does a company like yours -- where do you look to place investments following the decommissioning of a plant?
William Mohl: Not sure I understand your question. As it relates to the decommissioning itself or alternative investments?
Monica Trauzzi: Alternative investments.
William Mohl: At Entergy, you know, currently, while we're -- we've got a plan in place on what it will take to fund the Vermont Yankee decommissioning, in terms of our company right now, we're focused on investing in our regulated utility down south. We see the industrial renaissance there. We see huge growth from an industrial perspective because of low natural gas prices. So as a company, that's where we're deploying the majority of our capital.
Monica Trauzzi: All right. Let's talk about what's happening in Congress. There's renewed interest there in moving nuclear waste management legislation. Are all the right elements and players in place to move something significant this year?
William Mohl: You know, we're cautiously optimistic that we see some improvement. I mean, obviously the industry's invested over $30 billion. Right now, we have the ability to safely store that spent fuel at our sites, but clearly believe that a long-term storage facility is key. So with the changes that we've seen in Congress, we hope that we will see some progress there, whether it's related to interim storage or a long-term storage solution.
Monica Trauzzi: Right, and there's still that big question mark on Yucca Mountain. I mean, is this the end of Yucca?
William Mohl: I certainly hope not. You know, I think there's some renewed support for Yucca, and we are certainly advocating that -- you know, that plan move forward, but we're realistic enough to know that we have to consider other alternatives as well.
Monica Trauzzi: How do you expect Harry Reid's exit from the Senate to shape the congressional conversation on nuclear waste?
William Mohl: Well, hopefully it'll allow -- I think it'll allow for a little more robust conversation. I know there's a number of individuals that are, you know, looking to really kind of get that back on track. Obviously, you know, we're expecting Mr. Reid's points of view on that. We're hopeful that we see some more advocates for that facility to be completed in the future.
Monica Trauzzi: All right. We're going to end it there. Thank you for coming on the show.
William Mohl: Absolutely. Thank you very much
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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