SECRETS OF THE PALO VERDE INN

WHEN IT SOLD A WORKERS' DORMITORY LAST YEAR, APS LEFT THOUSANDS OF ITS OWN DOCUMENTS BEHIND. THOSE FILES SHOW DANGEROUS MISMANAGEMENT OF THE NATION'S LARGEST NUCLEAR PLANT.

Early last Wednesday morning, a determined caravan of workers from Arizona Public Service Company trundled into the dusty, decrepit desert town of Tonopah on a special mission.

The crew, led by the utility's cellular-phone-toting public relations chief, had been urgently dispatched to retrieve thousands of internal APS documents that the company had dumped in a deserted building two years ago and forgotten.

But when the APS workers arrived, armed with power tools to drill locked file cabinets, they found that most of the documents were gone.

Two weeks earlier, the man who purchased the abandoned building and its contents from APS last November allowed New Times to retrieve the thousands of pages of reports, internal company memos and other APS files scattered throughout his building.

The files provide a rare, uncensored look into the chaotic and increasingly dangerous operation of the nation's largest nuclear power plant--the Palo Verde Nuclear Generating Station.

The documents, which date from the early 1970s to 1991, include a scathing 1989 performance audit conducted by a nuclear industry association, a variety of consultant recommendations, letters to and from federal regulators, internal APS memorandums, computer tapes, blueprints and radiological testing data.

They paint a picture of a facility in deep trouble.
The records reveal that, at least until several years ago, the state's largest industrial plant was habitually mismanaged, its equipment deteriorating and its employees poorly trained.

The result has been a steady series of accidents and unsolved problems at the plant--which has been fined nearly $2 million by federal regulators since it went on line in 1986.

How many of those problems continue to plague the plant is not known, because APS would not allow New Times to see more recent reports that might--or might not--show improvements the company has made in the past few years.

But other, publicly available documents make it clear that APS may be paying the price for its neglect and mismanagement at Palo Verde. The plant, designed to last 40 years, is running into critical and costly problems, most notably with premature cracking in more than 1,500 radioactive pipes.

APS may soon have to ask for rate increases to make hundreds of millions of dollars in repairs to cracked or corroded steam generator tubes which--if they burst--can cause radiation releases ranging from minor to disastrous.

Whatever problems APS faces now could probably have been avoided, or at least mitigated, if APS had listened almost ten years ago when outside inspectors and consultants began pointing out serious and deep-rooted problems at the plant.

@rule:
@body:There is a shadow watchdog that keeps an eye on the nation's nuclear power industry. It is called the Institute of Nuclear Power Operations.

The private, Atlanta-based institute is funded by all of the utilities that run nuclear plants. It is supposed to serve as a collective pool of knowledge that plant operators can tap, learning from the experiences--and mistakes--of other plants.

Every 18 months or so, INPO sends inspectors to each of the nation's nuclear plants to evaluate safety, management and operations.

Unlike the Nuclear Regulatory Commission, which reports to the public and discloses its findings about plants, the institute works in virtual secrecy, just for the industry.

After it inspects a plant, the institute reports findings solely to the top manager of that facility. In Palo Verde's case, the reports are sent to Mark De Michele, APS' president and chief executive officer, and remain closely guarded within the company's upper-management ranks.

The NRC is not given copies of the INPO reports, although the federal inspector assigned to each plant is allowed to read the report.

State agencies such as the Arizona Corporation Commission, which sets rates for the power generated at Palo Verde, and the Arizona Radiation Regulatory Agency, which monitors radiation near the plant, do not get to see the INPO inspection reports.

The public, certainly, is not allowed to see them.
"We provide the report only to the utility," says Angie Howard, INPO's vice president of industry relations. "We do not comment publicly on those."
Judging by the INPO reports obtained by New Times, it is obvious why APS would not want the public to know the institute's low opinion of Palo Verde.

Although INPO has been accused, at times, of being too cozy with the industry that pays its salaries, the institute has been highly critical of Palo Verde's safety and operations. More critical, in fact, than NRC inspectors have been.

INPO's 1989 report on Palo Verde and other internal company documents from that time period paint a picture of a plant with serious safety and management problems.

The Palo Verde plant's top managers and supervisors, INPO found, did not have enough on-the-job experience to know how to run a nuclear plant properly. Key management positions turned over often, and many of the managers who ran the plant's three reactors did not have reactor operator licenses.

"This absence of nuclear operating experience impedes the ability of [Palo Verde] personnel to recognize and correct plant problems," INPO concluded.

Because of their relative inexperience at running a nuclear plant, INPO found, Palo Verde's managers had a tendency to seek easy answers when problems arose, rather than address underlying causes.

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