Palo Verde nuclear power plant, the largest plant of its kind in the country, sits 50 miles west of downtown Phoenix.
Palo Verde nuclear power plant, the largest plant of its kind in the country, sits 50 miles west of downtown Phoenix.

Safety Meltdown

Dave Misbeek and Silvario Garcia are, by their own admission, anal-retentive guys. They thrive on detailed perfection. They know every letter of the law and follow those letters religiously.

They are the kind of guys you would hate to have running your homeowners' association.

But they are precisely the kind of guys you want overseeing safety at your local nuclear power plant, which just happens to be the largest of its kind in the United States.

Basically, it is Misbeek and Garcia's job to make sure the three nuclear reactors at Palo Verde Nuclear Generation Station, about 50 miles west of downtown Phoenix, don't blow up and spew radiation on the three million residents of the Valley.

Palo Verde, they assure, is far from blowing up.

But something is clearly amiss.

In 2003, Palo Verde led the nation in the number of allegations made by its employees to the Nuclear Regulatory Commission, the federal oversight agency for the nation's nuclear power plants. Of those 28 allegations to the NRC, six have been substantiated, giving the plant more substantiated allegations in 2003 than all but one of the 64 plants operating in the country.

Another 15 allegations remain under investigation by the NRC.

The 28 allegations center on two major topics:

• That certain critical departments within Palo Verde have such a dismal work environment, and that technicians are so overworked, that they don't report problems or find problems that might exist.

• That some repairs have been allowed to slide in recent years and that employees in critical safety departments at Palo Verde often fix problems without properly documenting those fixes, a crucial paperwork process that has been proven to prevent the kinds of small mistakes that historically have led to serious problems.

New Times reviewed hundreds of pages of allegations and supporting documentation along with detailed company and NRC documents. And while the material doesn't suggest Palo Verde is in imminent danger of disaster, it does portray a company that is slipping when it comes to maintaining critical levels of safety.

Critics say Palo Verde's slide is the result of the company's putting profits before safety and long-term reliability.

Moreover, Palo Verde supplies about 30 million megawatt-hours each year to the Western power grid, and critics are concerned that increasing problems with sloppy safety practices will compromise the plant's ability to stay online and provide a steady stream of affordable and reliable electricity.

In fact, New Times' review of safety allegations comes as Palo Verde is experiencing a series of leaks that have shut down parts of the generating system. On March 1, the NRC announced it had begun a special investigation to evaluate problems related to the station's recently replaced steam generators.

"The NRC staff has decided to conduct a special investigation to evaluate the adequacy of the licensee's response to the situation, the root cause, and corrective actions," the NRC said in a press release.

That report is expected to be completed sometime in April.

Federal officials are concerned about the number of allegations, although they dismiss most of the employees' concerns as minor.

"While the number of allegations brought by Palo Verde workers in 2003 to the NRC is high," Victor Dricks, the NRC's Region IV spokesperson, told New Times in a written response to questions about plant safety, "a thorough review of each of the allegations did not substantiate any significant safety issue at the site. However, the NRC is concerned about the number of allegations being brought by the Palo Verde workers."

The NRC has begun a widespread investigation to determine if Palo Verde still maintains, in industry parlance, "a safety-conscious work environment."

The wave of allegations, reported problems and leaks stands in troubling contrast to Palo Verde's exemplary safety and performance record over the last decade. Indeed, Palo Verde has been widely considered in the industry to be one of the safest, best run and most productive nuclear plants in the country.

However, some employees say the plant's high production has come on the backs of front-line employees. Over the last decade, the staff of Palo Verde has been cut from 2,800 to 2,000. During that same period, production costs dropped by one-third.

This has made Palo Verde a massive and reliable cash cow for Arizona Public Service Company and its parent company, Pinnacle West, who, along with other companies, own the plant. APS is the operator.

As Pinnacle West's other businesses have been buffeted by the floundering economy and other economic factors, the three nuclear generators at Palo Verde pump an estimated $3 million a day into company coffers.

More simply, Palo Verde is worth nearly $1 billion a year to the plant's owners when technicians and engineers can keep the thing running at full tilt.

As profits have increased for APS and the plant's other owners, some employees say, front-line technicians have been made to do much more with much less. They say they are now unable to do their jobs properly.

"The company succeeds on the back of the front-line employees of Palo Verde," Garcia says.

The plant's manager, Gregg Overbeck, denies that Palo Verde has turned into a sweat shop. He blames the difficulties of 2003 primarily on the installation of the plant's new steam generators, a time-consuming, difficult and massive project that has stressed plant workers and perhaps temporarily affected plant management's ability to respond to worker concerns.

"There is nothing that supports the idea that we're more profit-motivated and less safety-motivated," Overbeck tells New Times. "There are always issues that arise operating a plant this size, especially when you're putting in new equipment. The issue is how you deal with it. And we continue to be a leader in how aggressive we are in maintaining the highest level of safety."

Misbeek, Garcia and several other plant engineers and technicians who talked to New Times but wished to remain anonymous for fear of retaliation see things differently.

"What we see is a dangerous shift in philosophy," Garcia says. "We are starting down the wrong path, the path of profits before safety. This is wrong. We have a failed climate. Leaders create climates. We have failed leadership at Palo Verde. It's just an environment you can't have when the stakes are so high."

Misbeek, Garcia and others also question the viability of the NRC's oversight. Misbeek and Garcia say they were shocked by the NRC Region IV's lack of investigation into five of the Palo Verde employees' allegations.

In response, they sent a complaint to the federal inspector general accusing the NRC of lax oversight in those five cases.

Last week, officials in the Inspector General's Office notified Garcia that their complaint would be turned over to the NRC's Office of Enforcement for investigation.

"This has been an eye-opening experience for all of us," Garcia says. "It's frightening the lack of genuine oversight at all levels. At some point, this becomes a serious violation of the public trust."

To understand the seriousness of problems at Palo Verde, you must first understand the unique, ultra-sophisticated, ultra-anal world of Misbeek, Garcia and the rest of the Palo Verde engineers and technicians whose job it is to keep the power pumping while ensuring the public is safe.

When analyzed one by one, most of the 28 allegations made by employees don't seem too earth-shattering. Many are personnel issues that seem almost quaint in the real world of a right-to-work state. Others are about seemingly minor repairs that were improperly documented. Or cryptic bits of nuclear calculus that were not quadruple checked.

A light bulb was replaced without proper documentation. A technician used electrical tape when he should have used special electrical tape. A few technicians may have worked more hours in one week than they should have by one interpretation of the true length of a "work week."

Big deal.

But it is a big deal, Misbeek and Garcia counter, because in the history of nuclear power, all big problems have started with the little things.

The complaints, they argue, suggest that Palo Verde's staff may be too overworked and spread too thin to be capable of still seeing all the tiny cracks that can one day lead to a major disaster.

Misbeek, Garcia and their co-workers are in charge of writing and reviewing the safety protocols for the reactor's instruments and safety controls. Any piece of equipment that needs to be changed, any process that needs tweaking, must, according to federal law, be documented. All this documentation assures that the plant's employees are taking every possible step to ensure that all the equipment and engineering used at the plant meets any imaginable safety requirement.

If somebody changes a light bulb, for example, Misbeek and Garcia must make sure it's the exact light bulb specified for that socket.

That said, some of the problems Misbeek, Garcia and others have identified go far beyond light bulbs.

One, for example, goes to the very core of the plant's nuclear reactors.

Misbeek's complaint involved how Palo Verde officials fired up the plant's nuclear reactors after spent fuel had been replaced with fresh uranium.

Uranium, like gasoline or alcohol, comes in varying degrees of octane and purity. When firing up a nuclear reactor, engineers must follow strict guidelines based on very conservative nuclear calculus that takes into consideration the possibility that Palo Verde may have bought some unusually good, or bad, material.

Strict calculations are used to monitor the amount of power being generated during the reactor startup and to set the level at which alarms and circuit breakers will trigger, dropping the fission-dampening control rods back into the nuclear stew and shutting down the fission process.

Misbeek found that the calculations engineers were using for those readings and the safety equipment were wrong. And he discovered those calculations were based more on a sort of plant tribal knowledge than on heavily researched industry guidelines.

It took Palo Verde's managers five years to figure out -- let alone finally admit -- that Misbeek was right. And federal regulators, Misbeek says, did nothing to expedite the process.

As Misbeek looked deeper into company documents and standard practices, he discovered that the faulty calculus was in fact part of a wider pattern of sloppiness.

"What I was seeing seemed to be a product of that idea of doing more with less -- being leaner, meaner, faster, smarter," Misbeek says. "That works to a point. But what I believed I saw was stuff that pushed over that threshold of safety. Getting the reactor up fast and keeping it up seemed to be the only concern."

What is most frustrating to Dave Misbeek is that neither management at Palo Verde nor the inspectors at the Nuclear Regulatory Commission seemed to understand the seriousness of the issue.

Or, actually, to understand the issue at all.

He first reported the problem to his superiors at Palo Verde in 1998. They said it wasn't a problem. In 2000, he reported the problem again. No problem, they said. So he reported the problem to the NRC in 2003.

He began his complaint by saying: "I allege that Palo Verde exhibits a lackadaisical approach to issues that affect Nuclear Safety."

The NRC told Misbeek his problem wasn't a problem.

The letter sent by federal regulators to Misbeek was nearly verbatim to the letter Palo Verde officials sent to the NRC dismissing Misbeek's concerns. Clearly, the NRC adopted Palo Verde's position, even down to the choice of words.

For Misbeek, having a federal regulatory body parrot a company document in a response to an extremely qualified technical employee making an allegation is both ludicrous and frightening.

"That is not oversight," Misbeek says. "What that says is that the NRC isn't doing its homework. It says they're just relying on companies to tell them everything is hunky-dory."

In the year since Misbeek reported the problem to the NRC, Palo Verde officials have changed their position on the validity of Misbeek's concern.

"It was valid, he was right," says Gregg Overbeck, the plant manager. "We have made the necessary changes."

Several other concerns raised by Misbeek and other technical experts at Palo Verde also point to a lax safety environment.

In another instance, Misbeek discovered engineers did not properly research or document a fix they made on a leaking pipe.

In essence, to stop a leaking seal on a plant coolant pipe -- a leak that was keeping one of the reactors off-line -- plant workers simply cranked on a pipe nut until the leak stopped.

Palo Verde, like all nuclear plants, is supposed to follow rigid guidelines regarding how much torque particular pipes can take. And any time a pipe nut is tightened as part of a repair, the safety technicians like Misbeek and Garcia need to be able to ensure that the job will be done right, before the job is done.

At Palo Verde, Misbeek found that in one case in 2002, engineers came up with a torque value before researching the proper measurement, performed the fix, then did the proper torque research and created the proper documentation -- five weeks later.

The NRC agreed with Misbeek that engineers didn't follow regulations but that no harm was done because later research showed the pipe could have held strong even with considerably more torquing.

Misbeek argues, however, that engineers violated the procedures that are necessary to ensure public safety.

"There's a reason those guidelines are there," Misbeek says. "But it appeared that getting the generators up and running was much more important than following safety guidelines."

More troubling to Misbeek was the NRC response, which, he says, "holds an ends-justifies-the-means attitude about safety."

"We were safe in this case -- no doubt," Misbeek says. "But we realized we were safe after the fact. This shouldn't be acceptable. But it apparently is."

In another allegation, an employee says certain temperature-sensitive monitors are at risk from debilitating cold or heat. The complaint alleges that critical equipment, which is known to be unreliable at temperatures below 60 degrees, is located in a pit outside the plant where ground temperatures could get that cold. That equipment needs its own monitoring system or temperature-regulating system, critics say, but Palo Verde management has been too cheap to put such protections in place.

Workers also are worried that if they raise concerns they'll be targeted. (The NRC reporting process protects the anonymity of whistle-blowers. New Times interviewed five people who have filed complaints, but only Misbeek and Garcia agreed to allow their names to be used.)

One engineer says he was given a substandard job review after years of exemplary job evaluations after reporting a safety concern.

"I have been unfairly dealt with because of the fact 'I raise concerns,'" one of the engineers wrote to his superiors before going to the NRC. "If I can't speak out . . . without being labeled a 'whiner' or perceived as 'politically incorrect,' then how can I have confidence in supervision dealing with issues I may raise concerning the safety of the plant and the public?"

Other employees in his section, the engineer complained, were also targeted for being "troublemakers" when they expressed safety concerns.

Another allegation claimed Palo Verde managers were violating federal guidelines for the amount of hours plant employees can work in one week. Critics say that during plant outages, employees will often work 70 to 80 hours a week, which they say violates federal guidelines.

That allegation was not substantiated by the NRC, which agreed with Palo Verde's management that the problem was more a misunderstanding by employees of the plant's federally approved workload policy than any intentional violation.

"Personnel working at [Palo Verde] are not routinely exceeding the overtime limits," NRC officials concluded. "The intent of the [limit] on work hours and overtime is to implement the NRC guidance to assure, to the extent practicable, personnel are not assigned to shift duties while in a fatigued condition. . . . The methodology used by [Palo Verde] to limit the number of hours worked, including in a 7-day period, is consistent with NRC guidance and is effective in meeting this goal."

That response also frustrated the plant's critics.

"Again," Misbeek says, "it was a case where everything was okay because nothing bad came of it. We're supposed to be proactive on everything, not reactive. And the sense we get is that the NRC only gets interested in fixing things after something goes badly wrong."

Gregg Overbeck concedes there are sometimes communications problems between management and workers. But that's the same in any workplace.

"We can do a better job of communicating and listening," he says. "And that's what we're working very hard to do.

"The bottom line is this: We don't want to do anything that would make someone here feel they can't report a problem. Open communication and lively debate is critical to safety. We are absolutely aware of that. And we will do our best to make sure that open environment exists for everyone here."

In the last year, APS management has conducted studies of plant employee morale. The vast majority of workers, Overbeck says, say they have no problems reporting safety concerns.

All that said, it is clear that Overbeck and his management team have some credibility issues with the front-line tech gurus.

It's also clear that Overbeck may be a victim of the near cult of personality created by his predecessor.

"Look, Gregg ain't no Bill Stewart, that's for sure," says one Palo Verde nuclear engineer who wished not to be identified. "Stewart was amazing. He was always around and just always seemed to be fixing stuff. You felt like we were a team working toward this noble goal under Stewart.

"Overbeck and his people are bureaucrats. What they say just tends to ring hollow."

Bill Stewart took over operations at Palo Verde amid the plant's crisis days of 1994 and 1995. At the time, the plant always seemed to be down with some seemingly unfixable problem. When Stewart came in, the company was near bankruptcy and employees were being laid off nearly every week.

Stewart, his fans say, calmed the ship, found ways to fix the unfixable and stopped the layoffs. Stewart trimmed staff through attrition, not firings. Morale rose, generators stayed online, profits rose, production costs dropped and Palo Verde has been a cash cow for its owners ever since.

Stewart was bumped up to the corporate office in Phoenix in the late 1990s. He has since retired.

But the Stewart mythology still casts a long shadow over Gregg Overbeck and his team.

Under Overbeck, the policy of trimming staff through attrition continued.

In 1993, Palo Verde employed 2,837 people.

By 2002, that number was down to 2,034.

Palo Verde's staffing decrease is not part of some mad rush for profits, Overbeck contends, arguing that it's an issue of efficiency, not profit-mongering.

Overbeck insists that Palo Verde's staffing numbers are in line with nuclear industry standards. "Across the board, the industry has become more efficient," he says.

In 1993, 1994 and 1995, years in which staffing levels remained above 2,500, "Palo Verde was a very different place," he says.

The new plant was still working out its bugs. Extra staff was needed to deal with the problems of shifting from the construction phase to the operations phase, he says.

With nearly 1,900 nuclear plant employees (another hundred or so work at the power station's water reclamation plant), Palo Verde is in fact slightly above the industry average of about 600 employees per nuclear reactor.

Overbeck points out, too, that staffing at Palo Verde increased in 2003 for the first time in a decade. However, most of that staff increase is attributed to a post-September 11 boost in security positions.

And he notes that Pinnacle West and the plant's other owners have recently begun pouring hundreds of millions of dollars into plant upgrades.

Those new steam generators, for example, cost $230 million apiece.

"We are investing in the future of this plant, we are investing in the safety of this plant," Overbeck says. "And to be honest, even from a pure business standpoint, it would be crazy not to. Palo Verde is only profitable when it is running safely and reliably."

Silvario Garcia contends, however, that the staffing cuts have been done willy-nilly, in some cases damaging key nuclear safety-related departments far more than less critical plant operations.

He cites himself as a prime example.

Garcia started out as an instrumentation and control technician in 1986.

In 1994, Garcia was promoted to management as one of the instrumentation and control team leaders, overseeing about 120 employees. Now there are about 60 employees in his department.

"Like everything else, we've just been dwindling down," he says.

In 1995, frustrated with life as a manager at Palo Verde, Garcia asked to return to the position of a regular instrumentation and control team member.

Still, that job entailed doing the work of what had once been three employees.

He was a planner, an adviser to procedures and a front-line technician.

Now, his supervisors are suggesting employees in his position should also pick up the task of doing "minor engineering modifications," a job that used to be done by the engineering department.

"The people making these decisions have no idea the stress level inside the fence," he says. "It has gotten totally crazy."

And the fact that the whole nuclear industry has dramatically cut staff brings critics little solace.

"All that says is that it's an industry-wide problem," Garcia says. "It simply says that the whole industry may be profit-crazy. And that means we're all heading in the wrong direction."

Garcia has been complaining to management about the "failed work environment" and building stress levels in front-line Palo Verde departments since the early 1990s.

His concerns, he says, have also been met with words, not any substantial actions to make things better.

Through the late 1990s and early 2000s, Garcia was a relatively lonely voice of dissent at the plant.

But particularly in 2002, others started coming to him stating their frustrations, complaining that management was brushing off safety and other concerns, that the work environment had grown hostile. He became a sort of point man for an increasingly large group of plant employees.

By late 2002, that group had finally had enough of being ignored by plant management. They went to the NRC in January 2003 and since then have continued to file complaints.

"It seemed like the only way to alert the public of what was happening here and to get a serious discussion of how we can make things better and safer," Garcia says.

Garcia's complaints appear to have generated the most concern from NRC officials. While Palo Verde has been directed to fix some of the technical concerns raised by Misbeek and others, it was Garcia's evidence regarding Palo Verde's work environment, particularly in the I&C department, that prompted an NRC investigation in December of 2003.

"We concluded there is a problem within the department that requires additional management attention and NRC review," the NRC's Dricks says.

Two months ago, NRC Region IV called Palo Verde officials to their offices in Arlington, Texas, to explain the plant's programs for promoting a safety-conscious work environment. Although NRC officials say they were satisfied that Palo Verde management is working diligently to promote safety, they will pay a visit in May to inspect the plant's ability to identify and resolve problems. NRC officials say that, as part of that inspection, they plan to interview a cross section of plant employees to "determine whether there is a problem with the safety-conscious work environment."

Overbeck, the Palo Verde manager, says he plans another thorough review of plant operations next year to see if the additional measures put in place by APS have been effective.

The push by Overbeck to get his managers talking to front-line employees has already created some laughable situations.

Last Thursday, for example, APS's head of employee concerns visited the I&C department's regular weekly planning meeting.

The manager told the group he had been overseeing the employee concerns department for 20 years.

Garcia, who has worked at Palo Verde for 18 years, says he had never met the guy before.

"The meeting got really contentious," he says. "We were like: ÔYou've been here how long and you've never once come and talked to us? Do you realize how pathetic this is?'"

But the fact that the guy finally showed up after that long tells Misbeek and Garcia that APS finally may be taking the concerns of front-line employees seriously.

Still, he and other engineers and technicians have doubts that the people who own and run Palo Verde will address the core issue behind the allegations.

"What really concerns us is this idea of priorities," Garcia says. "All the communication in the world doesn't answer the question the public should be asking: What is our top priority? Safety or profits?

"Our fear is that we're just beginning to see the early problems that you see when safety and people are no longer the absolute top priorities. It's a dangerous path for a nuclear power plant to take. And if we're indeed following that path as it appears, the public needs to be vigilant to make sure we don't follow that path very far."

E-mail, or call 602-744-6549. Safety Meltdown


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