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June 2016 Vol. 160 No.


Vol. 160 No. 6 June 2016

Training the Next Generation

CCR Compliance Approaches
Mitigating Bulk Electric System Risk
Small Modular Reactor Takes Big

A dynamic transformation is underway across

Bolick said that the sector that powers not just

the entire energy value chain to maximize

industry, but modern life, is facing multipronged

opportunities across businesses and operations. In

challenges, grappling with increasing volatility

the electric power industry, that revolution is being

of electricity and fuel prices, policy changes

propelled by opportunities to leverage terabytes

stemming from climate change mitigation

of existing data that are not yet digital, allowing

measures, and the critical need for new capacity to

power plant operators to predict anomalies and

bring 1.3 billion more people onto the grid by 2030.

pinpoint maintenance, and redefine operations

using advanced software, analytics, and low-cost
Thats the promise of the digital power plant
and GE is leading that charge, Scott Bolick, head
of software strategy and product management
for GE Power Digital told attendees in a keynote
speech at the 2016 ELECTRIC POWER Conference &
Exhibition in New Orleans, Louisiana, this April.

When we look at that, and look at the challenge

ahead of us, what we realize is that we have
to squeeze more out of our assets. We have to
become more efficient, he said.

The only way that we can do that is by

working together and really drive the digital
transformation of our industry.
The power industry, especially, should take note of
the crucial forces that are driving the convergence

of information technology and operations

a design, as built. Its a model that has deep


understanding of the material science of the

Computing power, whether in the power

plant or in the cloud, is greater than ever.
Machines, already adaptive, can now
connect back into the cloud, giving operators
more visibility and insight into an entire
power plant fleet.
And finally, big data is also poised to

part, deep understanding of the physics, and its

a model that gets updated second by second,
Bolick said.
That allows for the real-time understanding
of the lifetime and thermal performance of a
combined cycle gas turbine (CCGT) or a wind
turbine. It also enables a deeper understanding
of a plants capacity, allowing operators to

transform the industry, yet only 2% of that

virtually push the plant forward and gauge

data and analytics is used.

necessary trade-offs to get more out of the

Thats where PredixGEs cloud-based

operating system for the Industrial
Internetshines, Bolick noted.

plant, based on actual plant degradation, actual

Once an entire power plant is digitized, it can

If we look at the benefits that we believe are

deploy applications powered by the Predix

out there from digitization of the CCGT plant, we

platform to continuously improve assets and

think its $50 million for every existing plant, and

operations. It aggregates the data into the

$230 million for net new plants, he added.

cloud from each and every one of your assets

At the same time, GE is working to apply the

regardless of the fuel source, he told the

same digital technologies to coal and steam. GE,

audience of power sector professionals. It then

which recently acquired Alstom, this April also

has incredible analytical capabilities that really

bought analytical and optimization software

drive you toward predictive maintenance, he

company NeuCo, a software and data analytics


startup. Plans now entail applying NeuCos

With Predix, which has cybersecurity baked

software to GEs existing Industrial Internet

in, the possibilities are extensive: Knowing

platform, Predix.

that [an unplanned event] may occur, you can

I think that were all on a journey together,

either prevent it, or if its something that cant be

Bolick said.

prevented, we then can change the trajectory of

the outage by modifying the operating profile of
that plant, he said.
Backing all that is GEs revolutionary concept of
the digital twin. Leveraging advanced analytics
and the advanced computing power and big
data, were able to create a digital twin of every
single asset. That digital twin that were creating
is not just a generic model; its not based on

ambient conditions, and other factors.

And its already paying off for some generators:

I think were all trying to create a new type

of profession, which is the digital industrial
I dont think its a question of when its going to
occur for our industry. It is occurring; its only a
question of how fast its going, and how fast each
and every one of us is going to drive down that
road together.


High voltage, meet Predix, the highly sophisticated, cloud-based

development platform thats industrial-strength strength. Predix works
to create connectivity across all plant assets, even your whole fleet ,
continually utilizing data to test , learn and accelerate innovation. Its open
and scalable and turns your exabytes of data into actionable knowledge
to help increase power production by 20%. Oh, and Predix wasnt created
by a bunch of tech buffs who took a crash course in industry. It was built
for power generation by the people who know power generation.
Welcome to the industrial-strength strength world of Predix.

Predix from GE.

The industrial strength, cloud-based
development platform built for your industry.

Established 1882 Vol. 160 No. 6

June 2016

Preparing the next generation of plant workers involves using some new techniques, including video. The Electric Power Research Institute recently launched
a series of training videos called What Does [Blank] Look Like? to demonstrate
good operating practices to new power plant workers. Here, filming
crew members (left to right) Russell DeShields, Ted Villa, Chris DeShields, Hudson
Hower, David Tolentino, and Lance Duguay show their enthusiasm in front of Duke
Energys H. F. Lee Combined Cycle Plant, with actor Nathan Rouse in the background. Courtesy:

Power Work Shifts

Venezuela Faces Existential Power Troubles
A Power Famine for Colombia But a Feast for Brazil, Paraguay
THE BIG PICTURE: A String of Retirements
Chinas New Five-Year Plan Bolsters Climate, Environmental Measures
Proposal for Offshore Wind Battery Storage Launched
GE-Hitachi Exits Nuclear Laser-Based Enrichment Venture
POWER Digest


Use Near-Miss Incidents as a Preventive Tool
Ultrasonic Diagnostic Tool Detects Leaks, Bearing Wear, and Corona



The Perils of Second-Guessing FERC


By Thomas W. Overton, JD



Managing Multiple Generations Across a Smooth-Running Fleet


Forward-thinking power industry firms have found that understanding the similarities and differences between younger and older workers is helping to inform
new approaches to recruitment, training, promotion, and career planning.

New Thinking on Old Safety Issues


Familiar ways of promoting workplace safety have limited effectiveness. Some

proven new approaches include tracking behavior rather than injuries, merging safety and quality assurance efforts, and recognizing workers autonomy.

Training the Next Generation of Electric Utility Workers


The Electric Power Research Institute is developing a professional show and

tell video series that uses an instructional mode that is familiar to younger
generations of new plant workers and that effectively captures and transfers
knowledge from experienced staff.

Supporting Coal Power Plant Workers Through Plant Closures

Though nobody likes to lose a job, industry ups and downs are a reality of
modern economies. Fortunately, most employees of retired coal plants have
options, thanks to generating company, government, and economic development agency efforts.

June 2016 POWER




Coal Combustion Residuals Rule Compliance Strategies


Determining the best approach for the disposition of coal ash, in light of new
regulatory requirements and increased public oversight, requires ensuring
that the best practices shared here are coupled with detailed understanding
of site-specific considerations.

Risk-Based NERC Compliance: Assessing Risk to Bulk Power System



The Midwest Reliability Organization explains how it ensures grid reliability

while regulating individual entities according to their inherent risk.

Is There a Market for Small Modular Reactors?


After years of hype and anticipation, two generators are taking meaningful
steps toward constructing the first small modular reactors. Can you guess
what they have in common?

Disruptive Digital Technologies Are Key to Power Industrys Future


Headliners for this years ELECTRIC POWER Conference & Exhibition keynote
session, Entergy Corp.s Leo Denault and GE Power Digitals Scott Bolick, gave
attendees examples of what it takes to create a utility of the futurefrom new
technologies to new ways of developing tomorrows workforce.

Executive Roundtable Addresses the New Face of the Power Industry



The conversation among industry executives this year underscored the ways
in which all generators face multiple challenges but are addressing them in
different ways. New this year: a discussion of approaches to hedging natural
gas prices.

How the Power Industry Is Making Sense of an Environmental Quandary 56

The Environmental Mega Session provided attendees with an update on the
legal status of key environmental regulations as well as indications of how
generators and grid operators are moving forward in spite of uncertainty.

Learning from the Clean Air Acts Tragic Flaw


By Richard L. Revesz and Jack Lienke, New York University School of Law

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For Sale: Partially Constructed Bellefonte Nuclear Power Plant

Exelon, FPL Face Decisions on Nukes as TVA Prepares to Start Up Watts Bar 2
Renewable Energy Development Breaks Records and Leaps Ahead of Fossil
Fuels Worldwide
GAO Chides DHS for Not Doing Enough to Prepare for EMP, Solar Storm
Threats to Grid
Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny
Historic and Trend-Setting Siemens Turbine Manufacturing Plant Hits

Join the LinkedIn POWER magazine

Group and the Women in Power
Generation Group

POWER June 2016

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commercial operation:
the H-class from Siemens.

Siemens, 2016. All Rights Reserved.

Outstanding flexibility meets groundbreaking


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Editor: Dr. Gail Reitenbach
Consulting Editor: Dr. Robert Peltier, PE
Associate Editor: Thomas Overton, JD
Associate Editor: Sonal Patel
Associate Editor: Aaron Larson
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Production Manager: Tony Campana,
Contributors: Brandon Bell, Lee Buchsbaum, Richard Burt, Dwayne Coffey,
Jack Lienke, Richard L. Revesz


T. Preston Gillespie, Jr., Senior Vice President-Nuclear Operations, Duke Energy
Pat McCarty, Generation Manager, Tacoma Power
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POWER June 2016

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Power Work Shifts

or most of the history of the power
industry, utility jobs were secure and
long-tenured. Though they continue
to offer greater stability than many other
comparably paid jobs, forces on both sides
of the employment contract are changing
that paradigm. Im not talking just about
job losses resulting from coal power plant
retirements; employment shifts are affecting every sector of the industry. To help
put recent changes in perspective, lets
look at the larger context in which this
industry operates.

Employment Numbers in Context

In late March, the Department of Energy
(DOE) released its first annual National
Energy Employment Analysis, which
found that, of the 3.64 million Americans
who work in traditional energy industries,
including production, transmission, distribution, and storage, 600,000 contribute
to the production of low-carbon electricity, including renewable energy, nuclear
energy and low emission natural gas.
The report says that data collected
through the Energy Employment Index
reveals that employers in generation
and fuels anticipate the sector will grow
by about 4% over the coming 12 months,
creating an additional 57,395 jobs.
However, because the fuels and generation sectors are very different, these
numbers dont tell us much, as the DOE
acknowledged in a comment to POWER; it
plans to handle categories differently in
future surveys.
One thing most folks in the power industry probably will agree with is the reports finding that over 70 percent of all
employers surveyed found it difficult or
very difficult to hire new employees with
needed skills. When they do find workers
with appropriate skills, it can be difficult
to hold on to them. Thats a function both
of industry-specific factors and the fact
that the U.S. is near what the Federal Reserve considers full employment.
To put the power industrys experience
with retention in perspective, consider
that in 2012 the average American worker
stayed in a job 4.6 years, according to
the Bureau of Labor Statistics (BLS). That
might seem short, but its longer than the

Update on the Origins of Community Solar

Last month, my editorial, Doublespeak
Is No Cure for Utility Ills, addressed the
history of the concept of community solar projects. In the spirit of success has
many fathers, but failure is an orphan,
this month I offer another contender for
the father of community solarnone
other than POWERs previous editor-inchief, Dr. Robert Peltier, PE!
In an email exchange with my former
colleague about that editorial, Bob wrote,
its yours truly who coined the term in
1992. As evidence, he sent an ASME paper published that year. Bob had gotten
involved in a project in Phoenix with developer John F. Long, who built a 20-home
neighborhood with a centralized photovoltaic (PV) system from which the electricity

average 10, 20, and even 30 years ago.

The BLS in March 2015 released a report that studied jobs held by the younger
cohort of Baby Boomers (those born from
1957 to 1964) over the first three-fifths of
their working years, from ages 18 to 48. It
found that they held an average of 11.7 jobs
over those 30 years (on average, 11.8 jobs
for men and 11.5 jobs for women). Thats
an average of 2.5 years in a positionfor
Baby Boomers, not Millennials.
As for the Boomers kids, a post from May
last year at, the site
for data analysis enthusiasts, notes that,
Younger workers do tend to change jobs
more often than older workers, but thats
always been true. Numbers on job tenure
for Americans in their 20s were almost exactly the same in the 1980s as they are
today (in contrast to the overall average
noted above). The impression that Millennials job-shift more than older workers may
be created because there are a lot of them
in the workforceeven more than there
are Baby Boomers, by some accounts.

New Realities of Power

Current power industry staffing challenges
arent going away, so this issue offers a set

was shared. At the time, this 175-kW-rated

system was considered the largest privately
owned, grid-connected residential PV system in the world, as well as the worlds
largest ground-mounted, fixed, flat-plate
array of any kind.
Bob was a professor at Arizona State
University in those days and was asked
by Long and the homeowners to write a
program to proportion out the electricity
savings among the owners, deal with Salt
River Project, as well as publish the results of the operation of their community-owned PV system.
Bob added, And, even better, your
definition of community PV is exactly the
same definition that we used in 1990,
(when work on the project began).

of four cover stories that provide valuable

information about how individual companies
and industry groups are employing new strategies to recruit, train, and retain employees
from younger generations. The approaches
presented may not be the complete answer
to the industrys employment concerns, but
theyre certainly fresher and more-viable
ones than Ive seen in a decade.
In particular, I was excited to learn
that some employers are facing the reality that younger people often want to
work in wind and solar facilities rather
than dirty old thermal plants. (For an
interesting update on last months editorial coverage of community solar, see the
sidebar.) Some managers are recognizing that the fastest way to reinforce an
anti-fossil bias is to dismiss renewables
as expensive or trendy or not interesting
enough. Instead, theyre showing young
engineers how the knowledge and skills
theyll acquire at a fossil plant can translate to any sort of power system, whether
its large or small, using fossil or renewable energy, or owned by a utility or a
self-generating large customer. Thats a
powerful message.
Gail Reitenbach, PhD is POWERs

POWER June 2016

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Contact CB&I at +1 704 343 7500 to learn how our complete solutions can
benefit your next gas-fired power generation project.

A World of Solutions

Venezuela Faces
Existential Power Troubles
Oil-rich Venezuela is gripped by a power
crisis so debilitating that the government
has instituted four-hour daily blackouts
across most of the country, forced hotels
and malls to generate their own power,
and required heavy industries to slash
power usage by 20%. In desperation, the
government also closed the entire country
for five days during the Easter holidays in
March, reduced the public sector workweek
to two days, declared that every Friday
will be a national holiday, and lately, even
ordered citizens to set clocks half-an-hour
ahead to save power. But these measures
have come with consequences: Power cuts
have incited riots and looting in the countrys second-largest city, Maracaibo, and
the crisis has emboldened an opposition
movement that is seeking a referendum
to oust President Nicols Maduro, whose
term ends in 2019.
The government blames the crippling
power shortages on a severe drought
the worst in 40 yearsa result of the El
Nio weather phenomenon. Particularly
affected is the 10.2-GW Simon Bolivar
hydroelectric facility, the worlds fourth
largest, which reaps energy from the
now-withered Caroni River via the massive concrete gravity Guri Dam and on its
own generates about 73% of the countrys power. The Ministry of Electrical

Energy said in March that the Guri Reservoirs water levels had fallen to 244.9
meters (m) above sea level and warned
that the dam could reach a collapse
zone if water levels fall below 240 m
(Figure 1). Such low levels could jeopardize the operational safety of the Simon
Bolivar plants turbines, it said. Two of
the plants 20 turbines have already been
shut down owing to equipment trouble,
and at least six more will need to idle if
reservoir levels drop. Desperation in high
gear, state power corporation Corpoelec
this April began dredging workusing
heavy machinery and laborers with picks
and shovelsto funnel vital liquid to
the turbines.
Corpoelecan entity created in
2007 through the merger of 10 stateowned and six privately owned power
companieshas also pegged the crisis
on shortages of natural gas and diesel
supply to its newer plants, owing to financial delays, as well as to deficiencies
of materials like steel pipe, pumps, compressors, and other imported equipment,
the electricity ministry told Argus Media
in early April.
But these official explanations have
not satisfied the regimes critics. Maduros political opponents deny that the
crisis is caused solely by the drought,
pointing instead to the administrations
mismanagement and imposition of price

1. Of oil and water. With more than a third of its total power supply in jeopardy from low
water levels and equipment troubles, Venezuela is grappling with a power crisis that has put
its strategic oil operations at risk. A particular worry is that water levels at the Guri Reservoir
will drop below the critical level of 240 meters above sea level, forcing the state-owned power
company to shut down critically needed turbines at its 10.2-GW Simon Bolivar complex on the
lower Caroni River. Courtesy: Wikimedia Commons/Enrique Rodriguez Bencomo

and currency controls, which they say

pushed the country with the worlds largest oil reserves over an economic brink
in 2013. Other experts point to nearly 15
years of blatant neglect of Venezuelas
power system. The socialist government
hasnt added enough capacity since 2000
to slake soaring power demand, and the
country has endured periodic blackouts
since at least 2009, they note.
In 2010, a sudden demand spike during
another drought brought the countrys
power system to the brink of collapse. As
POWER then reported, the situation was
exacerbated by neglect and corruption
at many of the states power facilities,
including at the 2-GW oil- and gas-fired
Planta Centro on the Carabobo state coast
(which was barely operating at 273 MW).
In 2011, the government again declared
an emergency in the power sector, citing
a lack of investments. And in 2013, just
months after the death of its former, fiery
president, Hugo Chavez, a failure in one
of the national grids transmission lines
cut power to nearly half of the country,
including much of the capital, Caracas.
While Maduro, then newly elected, suggested the failure had been caused by
sabotage and blamed opposition groups,
an energy ministry official admitted to a
television station that the failures were
The current crisis is deeper than earlier
episodes because it is accompanied by the
brutal economic wallop of plunging prices
for oil, the countrys main export. But the
neglect is reportedly still rampant. As Venezuelan daily El Nacional reported this February, Corpoelec workers from seven states
protested outside the companys headquarters because, among other reasons, about
8.1 GW of the companys 17.6 GW capacity
was out of commission as a result of equipment breakdowns. Significantly, Planta
Centro hasnt generated power since December 2015, the workers said. Corpoelec
said it is doing everything it can to repair
the plants with help from Cuban power experts and the Venezuelan army and navy. It
has also redoubled efforts to complete repairs at the gas-fired 1.43-GW Termozulia
complex near Maracaibo, and at least one
new plant, a Chinese-built turnkey 600MW gas- and diesel-fired complex adjacent
to Planta Centro, should start operations
by mid-2016, Corpoelec chief Luis Motta
Dominguez said in early April.

POWER June 2016

A Power Famine for

Colombia But a Feast for
Brazil, Paraguay
Droughts attributed to the El Nio phenomenon have gripped Venezuelas neighbor Colombia. Bogot in April prepared
to ration power and instituted mandatory
reductions in consumption, warning that
households and businesses that use more
than the average amount would be charged
double. The measures reportedly paid off,
and President Juan Manuel Santos lauded
the countrys efforts to thwart the threat
of blackouts. Still, the Ministry of Energy
warned that almost 70% of the countrys
power is generated by hydropower and is
vulnerable to climate change.
Yet in Brazil, which emerged from a
crippling two-year-long drought only this
February, the El Nio phenomenon has
been a boon for the worlds second-largest
power plant, the 14-GW Itaipu hydroelectric facility (Figure 2). Itaipu Binacional,
the entity created to build and operate
the plant, reported that at the end of
March, the plant had the best trimester
in its history (the last of its 20 turbines
was installed in 2007, about 23 years after the first two were installed). The plant

2. When it rains, it pours. The 14-GW Itaipu hydroelectric facility on the Paran River,
straddling the border between Brazil and Paraguay (and owned by both countries), provides
15% of all power consumed in Brazil and serves over 75% of the Paraguayan power market.
The El Nio weather phenomenon that has been blamed for devastating droughts in Venezuela
and Colombia has enabled the massive project to produce record amounts of electricity over the
first three months of the year. Courtesy: Cesar I. Martins/Flickr

Renk Test System, Augsburg, Germany: Wind Turbine Test Rig


June 2016 POWER

THE BIG PICTURE: A String of Retirements

3,159 MW
3,991 MW


Power plant retirements have varied wildly over the past decade, both by fuel
and capacity, owing to a number of factors. Source: EIA, Preliminary Monthly
Electric Generator Inventory (based on Form EIA-860M as a supplement to Form
EIA-860) Copy and artwork by Sonal Patel, a POWER associate editor
4,770 MW



4,920 MW

1,973 MW





5,697 MW

14,600 MW



17,467 MW



17,850 MW


10,142 MW

All other



Onshore wind turbine

Conventional hydroelectric

Natural gas combined cycle

Other gases

Conventional steam coal

Natural gas combustion turbine

Other waste biomass


Natural gas internal combustion engine

Petroleum coke

Landfill gas

Natural gas steam turbine

Petroleum liquids

Municipal solid waste


Wood/wood waste biomass

Mercury and
Air Toxics

Henry Hub
natural gas
avg. spot

POWER June 2016

generated more than 25 million MWh, exceeding a previous record set in 2013. At
the end of March, the plant was producing
at full load owing to above-average rains
in Southern Brazil, and the power generated was more than the total generated by
plants in Rio Madeira, Santo Antnio, and
Jirau. It would be enough to serve the
entire Southern Region for 3.5 months and
the whole Brazil for about 20 days, Itaipu
Binacional gloated.
Still, the entity noted that it takes
careful operation to take advantage of
this volume of water. During the first
three months of the year, the flow through
the water inlet into the reservoir averaged
18,000 cubic meters per secondalmost
double the historical average, it said.
When there is a lot of overflow, the water
level below the reservoir rises, decreasing
the volume of falling water, and hence the
production capacity.
Its a game between higher flow rates
and possibly lower waterfalls, explained
Superintendent of Operations Celso Torino, noting that throughout the period
of abundance, Itaipus operators followed
guidelines dubbed Dancing with the Waters. It meant that workers had to op-

timize the production of energy within

methodological limitations, according to
the hydrological signal and the opportunity for better utilization, he said.

Chinas New Five-Year

Plan Bolsters Climate,
Environmental Measures
China unveiled its 13th Five-Year Plan this
March. The official proposal that will guide
the countrys economic and social development from 2016 through 2020 lays out

targets and other measures to address a

number of climate change, air pollution,
and water policies that will build on progress to transform its power sector.
The plan sets out new targets to reduce Chinas carbon and energy intensity
by 18% from 2015 levels while also seeking to grow the countrys economy by
more than 6.5% per year over the next
five years. This will be a first step toward
achieving its Paris Agreement pledge to
reduce carbon intensity 60% to 65% from
2005 levels by 2030.

3. First of its kind. Chinas State Power Investment Corp. projects that the worlds first
Westinghouse Electric AP1000 reactor under construction at the Sanmen site in Zhejiang province could be operational by the end of this year. Unit 2 may come online in 2017. Courtesy:

For more than a century, Fluor has executed some of the most
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June 2016 POWER


And it may well exceed its targets: The

World Resources Institute projected that
China will actually reduce its carbon intensity 48% from 2005 levels by 2020,
surpassing its original target of a 40% to
45% reduction. One of the major initiatives to achieve its climate targets is an
emissions trading program, which will go
beyond its seven regional pilots to nationwide coverage by 2017. The plan also
sets goals of slashing energy intensity
by 15%, quantifyingfor the first time
everguidance on energy consumption
control. It states, specifically, that China
should limit its energy use to five billion
tons of standard coal equivalent.
The country has already moved forward
on these efforts. On April 25, the National
Development and Reform Commission and
National Energy Administration suspended or slowed plans for more than 100 GW
of coal-fired capacitynearly 200 plants
that are in development but not yet under constructionto curb overcapacity in
the generation sector. The agencies noted
that with the economic slowdown, power
demand has fallen dramatically. The order
also calls on coal-fired power plants to
achieve ultra-low emissions and energy
efficiency, and it requires plants that fail
to meet national standards to shut down.
Meanwhile, the 13th plan calls for the reduced use of untreated coalas well as a
diminished demand for coal with the use
of more renewables and natural gas. The
country will continue, under the plan,
to invest in major new hydropower and
nuclear projects, and it also plans more
ultra-high-voltage power transmission
and smart grids.
Nuclear will double over the next five
years: Compared to the current capacity
of about 27 GW, the plan calls for 58
GW of operating capacity by 2020 with
another 30 GW under construction by
that date. Along with completion of the
four AP1000 units under construction at
Sanmen in Zhejiang province (Figure 3)
and at Haiyang in Shandong province by
2017, the plan envisions the construction and demonstration of a CAP1400
plantthe Chinese-built enlarged version of the AP1000at Huaneng Groups
Shidaowan site. It also calls for the construction and demonstration of four Hualong One projects at the Fuqing plant in
Fujian province and the Fangchenggang
plant in Guangxi province by 2020, as
well as for the construction of inland
nuclear plants.
These measures are to kick-start the
domestic components sector while curbing air and water pollution. The plan, for

example, sets forth specific goals for the

reduction of water consumption by 23%
from 2015 levels by 2020. Among several other environmental targets set out
in the 13th plan is the mandatory 15%
reduction of sulfur dioxide and nitrogen
oxides by 2020. The plan also requires
that the air quality of all cities at the
prefecture level and above must meet
good or excellent standards 80% of
the time.
If these cities fail to meet Chinas
annual particulate matter (2.5) concentration standard, they must reduce their
concentrations of this pollutant by 18%
over five years, said Barbara Finamore, an
expert at the Natural Resources Defense
Councils China Program. The targets bolster game-changing amendments to Chinas Environmental Protection Law, which
went into effect in January 2015, she
noted, especially because the law steps up
enforcement efforts and even allows nongovernmental organizations to take legal
action against polluters on behalf of the
public interest.

Proposal for Offshore Wind

Battery Storage Launched
Plans are under way to install a pilot
1-MWh lithium batterybased storage system in 2018 at the worlds first floating
wind farm in Aberdeenshire, Scotland.
The Batwind system, to be installed
at the Hywind pilot park offshore of
Peterhead, is being developed in coop-

eration with Scottish universities and

suppliers under a new memorandum of
understanding signed on March 18. According to its developers, the storage
system could help mitigate intermittency
and optimize outputand this could in
turn improve efficiency and lower costs
for offshore wind.
The pilot in Scotland will provide a
technological and commercial foundation
for the implementation of Batwind in fullscale offshore wind farms, opening new
commercial opportunities in a growing
market, said Norwegian energy firm Statoil, which is developing the Hywind Scotland project and spearheading the Batwind
project. The 30-MW Hywind project, which
will comprise five floating wind turbines
25 kilometers offshore Peterhead, is currently under construction and should come
online by 2017. Statoil has said the $248
million offshore wind project will be built
at a 60% to 70% cost reduction from the
Hywind demonstration project in Norway
owing to technological innovations (for
more, see Statoil to Build Worlds First
Floating Offshore Wind Farm in POWERs
January 2016 issue).
The Batwind battery and converter integrated storage system (Figure 4) is expected to capture wind over-generation,
storing excess power for sale when capacity is needed, thus reducing balancing
costs. Statoil expects that increases in
power market value will come with opportunities to capture price peaks through

4. Right off the bat. Norwegian multinational energy company Statoil has signed a
memorandum of understanding with the Scottish government, the Offshore Renewable Energy
Catapult, and Scottish EnterpriseScotlands economic development agencyto pilot a new
battery storage system for offshore wind energy at its Hywind Scotland wind farm. The floating
wind farm is under construction off the coast of Peterhead, in Aberdeenshire, Scotland. Courtesy: Statoil

POWER June 2016

GE-Hitachi Exits Nuclear

Laser-Based Enrichment
GE-Hitachi Nuclear Energy is pulling out of
Global Laser Enrichment (GLE), a company
that in 2012 got the Nuclear Regulatory
Commissions (NRCs) unprecedented approval to build and operate a full-scale laser
uranium enrichment facility. The move was
precipitated by a change in business priorities, but it doesnt necessarily mean the
GLEs proprietary SILEX technology is dead.
GLE was born under GEs banner in early
2006 as it won exclusive rights to commercially develop the SILEX laser isotope
separation process technology under an
agreement reached with Australias Silex
Systems Ltd. The technologys most hailed
advantage was efficiency. All enrichment
around the world is performed by gas
centrifuge technology that was originally
developed in the 1940s, and enrichment
happens to be the most difficult and costly step in making nuclear fuel for power
reactors, because about 35% to 40% of
total fuel costs are based on current market prices, Silex explained. SILEX is the
most cost-efficient method, the company said, noting that it is anticipated to

have the lowest capital costs of all enrichment technologies.

Several entities have taken note of
these benefits. In October 2006, GE got
the U.S. governments backing to proceed
with the technology exchange, prompting Hitachi and Canadas Cameco to join
the venture between 2007 and 2008. GE
currently has a 51% share in the venture,
Hitachi, 25%, and Cameco, 24%.
The companys SILEX technology got
another boost in September 2012, when
the NRC granted GLE a construction and
operation licensethe first of its kind
for a proposed facility that could be sited
on a 1,600-acre tract of land at the companys global headquarters in Wilmington,
N.C., where GLE operated a fuel fabrication
plant. The company then embarked on a
three-phase program to commercialize the
technology, completing the first phase (a
test-loop demonstration) in 2013, and beginning the second phase (economic and
engineering validation) that same year.
The third phase entails building a fullscale commercial production facility.
In 2013, GLE submitted a proposal to
establish an additional uranium enrichment facility at the Department of Ener-

5. Consumed by market forces?

GE-Hitachis withdrawal from Global Laser Enrichment, a company that has exclusive rights
to commercially develop the SILEX laser isotope separation process technology under an
agreement reached with Australias Silex Systems Ltd., may have a big impact on the thirdgeneration uranium enrichment technologys
future. Courtesy: Silex Systems

gys Paducah enrichment site in Kentucky

(the agencys first-generation gaseous diffusion plant at that site was closed in May
2013). Negotiations for the GLE facility
are reportedly continuing: Silex Systems
in February 2016 reported that outcomes
were expected in the next few months.
Silex has also reported that GE-Hitachis

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Wilmington-based team has made significant progress with process and engineering improvements, potentially improving
process efficiency and economics. However, the drive to commercialize the technology has seen other hurdles. In 2014,
both GLE and Silex Systems underwent
restructuring. Silex reduced its workforce
by 50%. Meanwhile, GLE hasnt yet made
a decision to build a commercial plant,
saying that will be dependent on market
conditions (Figure 5).
And finally, this April, Silex abruptly
announced that GE-Hitachi wanted out of
the venture, citing business priorities, the
slowed pace of SILEXs commercialization,
and market conditions. Silex said it has
started reviewing funding alternatives,
and believes that despite difficult market
conditions persisting, nuclear industry interest in the SILEX Technology continues.
One outcome is that Silex could increase
its direct participation in development
of GLEs program. Another could involve
minority partner Cameco, which has said
that it believes laser enrichment has potential and will support Silexs efforts.
As for medium-term prospects concerning
the Paducah commercial plant, Silex said
it remains positive. However, it added,
dismally, that there is no guarantee of
obtaining new investors for GLE given current market conditions.

POWER Digest
Ghana Starts Up Key Gas-Fired Power
Unit. Ghana has inaugurated the first of
two 180-MW units of a natural gasfired
power plant that it is banking on to boost
the West African countrys electric reliability. President John Dramani Mahama inaugurated the first unit of the Sonon-Asogli
project at Kpone, near the capital Accra,
on April 19, saying the project feeds into a
vision to provide the country with at least
5,000 MW of power capacity and make Ghana a power hub in West Africa. The eastern
part of the country has suffered debilitating power shortages of more than 750 MW
that have been blamed on shortfalls from
the West African Gas Pipeline project.
Mahama said on April 19 that Accra was
working to facilitate gas supplies from the
western region to the eastern region. The
360-MW Sonon-Asogli Power Plant is a private sectorled power plant operated by
Shenzhen Energy of China.
Ghana, which is committed to electrifying the entire country by 2020, generates about 64% of its installed 3,000 MW
from hydro, though sources suggest that
only about 2,700 MW of that total is de14

pendable. Meanwhile, the country is seeing year-on-year demand growth of about

10% to 15%, lacking enough capacity
to meet its power needs. Ghanas Energy
Commission in 2014 attributed potential
drivers of electricity consumption to industrial growth, petroleum upstream and
midstream activities, mining, and the governments electrification ambitions.

billion has been estimated to achieve the

100-GW target. To date, banks and other
financial institutions have green commitments to finance up to 78,850 MW. The organizations are setting up projects to raise
equity and loans from domestic as well as
international sources, the minister said.
Financial institutions in India are also providing loans to this sector, he added.

Firms to Jointly Develop 150-MW

Tidal Stream Project in Indonesia.

Norway to Do Away with Renewable Subsidies. A white paper on Nor-

Tidal power giant Atlantis Resources

and SBS, a privately owned marine, subsea, and renewable energy developer, are
teaming to develop a 150-MW tidal stream
project in Indonesia. A vast Southeast
Asian archipelago of more than 17,500 islands that straddles the equator, Indonesia has become an established and crucial
player in the worlds energy markets, but
though it enjoys sizeable coal and natural
gas reserves, it struggles to provide power
to its growing economy, geography being
its most obvious challenge.
Atlantis and SBS, which signed a memorandum of understanding on April 4, said
the $750 million project may be constructed
over a number of stages. SBS has completed a feasibility study, and the project will
be supported by a 25-year power purchase
agreement with state-owned power company, Perusahaan Listrik Negara. The project
will allow Atlantis, which owns tidal power
projects in the UK comprising 700 MW, to
demonstrate its tidal energy technology in
a range of tidal conditions and export some
of the intellectual property we have created
through the development of the MeyGen
project from Scotland to other parts of the
world, said CEO Tim Cornelius.

ways energy policy toward 2030 released

on April 16the first such white paper
since 1999calls for security of supply
and highlights the joint consideration
of climate change and economic growth.
Among its significant findings are that the
country should engage in the long-term
development of profitable wind power. The
measure includes ending its green-energy
subsidy program by 2021.
The program, launched in 2012 by Norway and Sweden, uses el-certificates to
increase electricity output from sources
such as wind, hydropower, and biomass by
28.4 TWh per year by 2020. But over the
years, subsidized renewables have been
blamed for pushing power prices to 15year lows, and Norway is now producing
a 15-TWh surplus. Minister of Petroleum
and Energy Tord Lien, a member of the
countrys center-right government, noted
that since the 1999 white paper, energy
markets and the policies of the countries
around us have changed considerably.

Sasan UMPP Achieves Plant Load

Factor of 100%. Reliance Power said on
May 2 that its Sasan Ultra Mega Power Project (UMPP) in Singrauli District of Indias
Madhya Pradesh state achieved a plant load
factor of about 100% over the month of
April. The plant, which is the largest integrated power plant and coal-mining project at a single location in the world, only
began operating last year. Reliance said in
a statement that during its first year of operations, the project achieved a plant load
factor of about 90% and used about 17 million metric tons of coal.

India Raises Solar Target to 100

GW. India has ambitiously increased its
2022 target for grid-connected solar power
projects from 20 GW to 100 GW. Minister
of Power, Coal, and New and Renewable
Energy Piyush Goyal told the Rajya Sabha,
Indias upper house of parliament, that the
nation has about 5,775 MW currently installed. A total investment of around $90

TVO Seeks Operating License for

Long-Overdue EPR Reactor. Finnish utility Teollisuuden Voima Oyj (TVO) on April
14 submitted an operating license application for its first-of-a-kind Olkiluoto 3 unit,
a 1.6-GW EPR that is under construction
by AREVA. The projectnow nine years
behind schedule and almost three times
over budgetwill start producing power
at the end of 2018, TVO said in a statement. The utility expects to obtain the
operating license from Finlands Radiation
and Nuclear Safety Authority, STUK, by the
end of 2017. Difficulty in getting STUK approval for the instrumentation and control
systems design is one key reason for the
projects delay, TVO has said.
Meanwhile, onsite work continues. The
current workforce at the site comprises
about 2,400 people, the utility said. In
January, instrumentation and control system testing was launched and last week
testing of the first process system, the
seawater system, was initiated. The main
electromechanical installations, including
piping works, will be completed during the
first half of 2016.
Sonal Patel is a POWER associate editor.

POWER June 2016

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Use Near-Miss Incidents

as a Preventive Tool
Broadly put, todays power plant operations are a mix of automated operations
and manual or procedural steps. A plant
may have hundreds of control loops, interlocks, permissives, and safety systems.
In addition, there are procedural steps,
which rely on operator interaction, such
as opening or closing a valve, slow rolling a turbine, or taking grab samples. In
view of the large number of operations,
it appears reasonable to anticipate that
something will go wrong someday.
In those instances when something does
go wrong, the result is not always a major
incident; sometimes the outcome is just
a close call. Management tends to have
mixed feelings about these near misses. On
the one hand, they breathe a sigh of relief
that the result of the incident was not more
serious. On the other hand, they worry that
their current system may be ill prepared to
deal with a similar incident in the future.
Evaluating Near Misses
The causes of unwanted events could be
many. Some examples include:

Take no action, if the incident was

deemed only minor.
Install additional safeguards to prevent
similar incidents in the future, if the
incident had the potential to have a
major impact.

In many cases, shift leaders, project

managers, or groups of in-plant subject
matter experts determine subjectively
whether an incident is minor or major.

Often, shift leaders and project managers are under intense pressure to accomplish myriad projects in relatively
short timeframes. Time scarcity can
result in hasty near-miss classification
The approach is often based solely on
the severity or potential severity of an
incident. This method frequently fails
to evaluate the likelihood of a future
incident. For that reason, it is possible
that this approach might overlook incidents with a medium level of severity
but a high likelihood of occurrence.

The Risk Matrix Approach

A risk matrix technique may offer a more
reliable solution. The process uses a
semi-quantitative technique to identify
near-miss incidents that could become
sufficiently severe with unpleasant consequence under a slightly different set of
circumstances. The following steps outline
how the system works:
1. Evaluate each near-miss incident without haste while remembering that the
ultimate goal is to reduce risk to workers, neighbors, and the environment.
2. For a given near-miss incident, estimate
and index its likelihood and potential
severity (consequence) on the matrix
shown in Figure 1, using the criteria
described in Table 1.
3. Once risk has been estimated, take appropriate corrective actions to prevent
or minimize the recurrence of such an

1. Risk matrix for near-miss incident management. This matrix can be used to
index incidents by severity and likelihood rank (see Table 1). Source: GC Shah

Aging plants and control systems

Outdated or inadequate procedures
Inadequate training
Workforce turnover
Impact of business climatedivestitures and acquisitions
Plant systems inadequately designed
for severe weather conditions

Many experts suggest that near-miss incidents are opportunities in disguise. They
believe that close calls can be used to prevent future incidents. Most power plants
conduct some sort of root-cause investigation after near-miss incidents. Depending on the findings, managers may pursue
one of the following courses:


They typically rely on their personal experience to make that decision. This can be a
reasonably effective approach for categorization of near-miss incidents; however,
in some cases it can lead to inaccurate
assessments. The following points may be
worth considering relative to the consistent effectiveness of that approach:


POWER June 2016

Table 1. Decisions, decisions. This table offers guidance to help categorize the likelihood and consequences of an incident. Source: GC Shah

Relatively low likelihood of occurrence (once every 10 years)

Relatively moderate likelihood of occurrence (once every year)

Relatively high likelihood of occurrence (several times a year)

Relatively low or potentially low level of impactthese events are not likely to develop into Occupational Safety and Health Administration (OSHA) recordable incidents or exceed reportable quantities (RQs)
as defined by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

Medium level or potential for medium level of impact, such as OSHA recordable incidents or higher, or
CERCLA RQ events

High or potential for high impact, such as large-scale environmental or safety incidents and events with
the potential to damage a company's reputation


Document the eventfurther resources for corrective action may not be warranted


Investigate and implement corrective action in reasonable time


Investigate and place top priority and urgency on implementing corrective action


Suggested response

The risk matrix approach is analogous to

the risk-rank approach often used by power
plant personnel or utility workers for process hazard analyses. As a starting point,
the approach still relies on the experience
and judgment of knowledgeable plant personnel. To achieve excellent long-term re-

sults however, focus should be placed on

collecting relevant data so that the likelihood and severity of near-miss incidents
may be assigned with the help of historical
records. In short, the approach is most effective when based on reliable data.
Classifying near-miss incidents into a


number of useful categories can also help.

For example, consider categories such as
flammable/toxic gas leaks, spills, slips
and falls, and others. Past frequencies of
incidents can be used in the risk matrix
approach to identify where limited resources should be directed to provide the
most beneficial results.
Ultimately, safety should be part of an
organizations culture, and not simply a
collection of procedures to follow. Trust
must be developed among workers and between workers and management. However,
even in safety-conscious working environments, near misses are likely to occur.
From a safety and productivity viewpoint,
the goal should be to minimize their frequency and develop systems that help
reduce adverse effects if future events occur. Utilizing the risk matrix method can
be a useful step in the process.
G.C. Shah, PE (ghanshyam.shah@ is a senior advisor
for safety, environmental, and industrial
hygiene at Wood Group Mustang in Houston, Texas. He holds several professional
certifications, including in the fields of
safety, fire protection, industrial hygiene,
and cybersecurity.

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Ultrasonic Diagnostic Tool

Detects Leaks, Bearing
Wear, and Corona

2. Ultrasonic diagnostic tool. The Marksman II is one example of a tool for finding
leaks and more. The kit contains an ultrasonic receiver, ultrasonic emitter, hollow air probe,
contact probe, and noise-canceling headphones. Courtesy: Spectroline

Air leaks cost money. According to the

U.S. Department of Energy (DOE), over
$5 billion per year is spent on energy to
power compressed air systems. The DOE
estimates that optimizing these systems
could improve energy efficiency 20% to
50%, and part of optimization includes
finding and fixing leaks. In addition to
costing money, natural gas and propane
leaks can be dangerous, so finding and
fixing those are even more important.
Noise is always generated when pressurized
systems leak. The problem is that when the
leaks are small, the noise may not be audible
to humans. However, ultrasonic diagnostic
tools, such as the Spectroline MDE-2000NC
Marksman II (Figure 2), can detect low-level
noise from even the smallest leaks. Thus, with
a receiver and a little training, technicians
can find and fix nearly any leak.
Finding Leaks
Finding leaks with the Marksman II is fairly easy. You simply turn the receiver on,
adjust the volume on the touch control
pad, and scan all suspected leak areas. An
audible alarm intensifies and a series of
LED indicators illuminate on the receiver
as you get closer to the leak.
Noisy environments can make finding
leaks more difficult, but the Marksman II includes a hollow air probe and noise-canceling headphones to solve that problem. The
air probe reduces the sensing angle, limiting the amount of ambient noise that gets
into the receiver. The headphones muffle
the ambient noise and also cut off the audible alarm, initiating the units advanced
heterodyne and sound signature technologies. When leaks are detected in this state,
a natural sound similar to what you would
expect to hear from a leak is produced.
The tool can also be used to find nonpressurized leaks, such as leaks that pass around
faulty seals, gaskets, weather stripping,
doors, windows, ductwork, and other enclosures. To check these types of components,
a technician would place the ultrasonic
emitter that comes with the kit inside the
enclosure. The emitter produces ultrasonic
beeps that are tuned to the frequency of the
receiver. By scanning component seal areas,
the beeping signal will lead to the exact
spot where the leakage is occurring.
Bearing Wear and Electrical Problems
Ultrasonic tools can do more than just
find leaks. The Marksman II can quickly
pinpoint premature component wear using

3. Hearing is believing. The contact probe allows faulty bearings or gears to be identified. Courtesy: Spectroline

the contact probe that comes with the kit.

With the tip of the installed contact probe
touching a motor casing (Figure 3), for example, technicians can listen for abnormal
or nonrhythmic clicks or grinding sounds.
An irregular noise indicates early-stage
bearing wear or potential gear trouble
long before actual equipment failure.
Ultrasonic tools are especially adept at
picking up the noise associated with poor
electrical connections that produce corona

discharge. To identify electrical problems

in breaker boxes, fuse panels, or other
electrical enclosures, a technician would
hold the probe several inches away, scan
around the entire panel, and listen for a
snapping or frying bacon sound. The
noise indicates that corona discharge is
an issue in the panel and should be more
thoroughly investigated and fixed.
Aaron Larson is a POWER associate

POWER June 2016

The Answers
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The Perils of SecondGuessing FERC

Thomas W. Overton, JD

ts axiomatic that state governments believe they can manage

their own affairs better than the federal government. But our
system reserves certain bailiwicks for federal oversight, and
one of those is the interstate power markets. While the lack of
state influence over those marketswhich unquestionably affect
state economies and the local quality of lifemay chafe, the
federal government has made clear that there are lines it will not
allow the states to cross. Two cases that reached the Supreme
Court this term threw one of those lines into sharp relief.
As I wrote about in the March 2014 issue (see When States Try
to Manipulate Wholesale Power Markets), these cases stemmed
from efforts by Maryland and New Jersey to incentivize new generation outside of PJM capacity auctions. In Maryland, the Public
Service Commission in April 2012 ordered several regional utilities to execute power purchase agreements (PPAs) with a company, CPV, that wanted to build a new combined cycle plant in
the state but was unable to clear the capacity auctions. In New
Jersey, the Board of Public Utilities, acting under the states 2011
Long-Term Capacity Pilot Project, conducted a separate selection
process for new generation and likewise ordered the states utilities to sign PPAs with the winning companies.

Stay in Your Own Lane

In both cases, the utilities sued to block the plans, arguing that
the states were invading Federal Energy Regulatory Commission
(FERC) authority over interstate power markets, and in both cases, the lower federal courts agreed. The crux of the dispute was
that the PPAs guaranteed a return for the plant owner even if the
plant bid into PJM auctions at prices too low to make a profit.
Essentially, they were guaranteeing the plants a wholesale price
different from that produced by participation in the market. That,
the utilities and FERC argued, distorted the auctions by changing
the plants incentives to participate, and the effect was to artificially suppress power prices in PJM. In doing so, the programs
invaded exclusive FERC authority granted by the Federal Power
Act (FPA).
The states appealed to the Supreme Court, and the court
agreed to hear Marylands appeal, putting the New Jersey case
on hold until it reached a decision, because the cases turned on
the same issue. At oral argument, the justices seemed to struggle
with understanding how the wholesale power markets worked and
how the Maryland PPA would affect themin large part because
there was substantial disagreement between the parties on the
provisions in the PPA and what they did.
Yet whatever confusion might have existed did not stop the
court from issuing an emphatic endorsement of FERCs prerogatives. In a unanimous ruling authored by Justice Ginsberg, the
court upheld both lower court decisions that barred the Maryland

We agree with the Fourth Circuits judgment that Marylands

program sets an interstate wholesale rate, contravening the FPAs
division of authority between state and federal regulators, the
court said. Doubting FERCs judgment, Maryland . . . requires
CPV to participate in the PJM capacity auction, but guarantees
CPV a rate distinct from the clearing price for its interstate sales
of capacity to PJM. By adjusting an interstate wholesale rate,
Marylands program invades FERCs regulatory turf. . . . That Maryland was attempting to encourage construction of new in-state
generation does not save its program.
A week later, the court declined to hear New Jerseys appeal,
leaving that decision intact.

No Sweeping Mandate
Together, these cases make clear that whatever states may think
about the operation of the interstate power markets, they lack
any authority to change things to their liking. What was notable
about the Maryland opinion, however, was what the court did not
do. Justice Ginsberg took pains to stress that the holding was
limited and that the court did not intend to foreclose per se all
state programs to incentivize generation.
Nothing in this opinion should be read to foreclose Maryland and other States from encouraging production of new or
clean generation through measures untethered to a generators
wholesale market participation, the court said. So long as a
State does not condition payment of funds on capacity clearing
the auction, the States program would not suffer from the fatal
defect that renders Marylands program unacceptable.
Why does this matter? Some court observers were nervously
watching this case because of its potential to affect state renewable portfolio standards (RPSs). RPS opponents have argued unsuccessfully for years that these programs are unconstitutional in
that they constitute state programs that interfere with interstate
power markets and economies in other states (see The Lurking
Threat to State RPSs in the August 2013 issue). For example,
an RPS bias against coal in one state can render a coal plant in
another state uneconomic, leading to its shutdown even if the
other state would prefer it to remain operating (something that,
indeed, has happened).
That question was not before the court, and thus it would not
have decided it here. But when a decision implicates other issues
that the Supreme Court knows are percolating through the lower
courts, it will sometimes take the opportunity to telegraph its
thinking. While the constitutional questions remain for another
day (the 10th Circuit last year turned aside the challenge I wrote
about in 2013, and the Supreme Court declined to hear the case),
Justice Ginsbergs disclaimer strongly suggests the court is not
waiting for an opportunity to strike down all RPSs.
Thomas W. Overton, JD is a POWER associate editor.

POWER June 2016

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Managing Multiple Generations

Across a Smooth-Running Fleet
Courtesy: XPlore Technologies

Power generators have always had to make some changes as each new generation
enters the sector, but todays new workers are bringing with them attitudes and
skills that challenge traditional plant management, for good and ill. Heres what
some companies and plants are doing to make the best use of younger workers
while getting them to work efficiently alongside older generations.
Thomas W. Overton


power sector after sometimes-lengthy careers

in the military (see Veterans Bring Needed
Skills to the Utility Industry in the June
2014 issue).
Tom McDonnell, power generation in-

dustry leader at Rockwell Automation, who

spoke to POWER by email, laid out what this
Generators, he said, face the loss of
critical knowledge and the inability to find

1. An aging workforce. The age distribution of workers in the electric power sector
skews older than for comparable industries such as mining and construction. In this chart, the
electric power and mining sectors, and U.S. total, are plotted on the left axis, while construction
and manufacturing are plotted on the right axis. Numbers are in thousands, except for U.S.
total, which is in hundreds of thousands. Source: U.S. Bureau of Labor Statistics
Electric Power Mining, quarrying, and oil and gas extraction U.S. total Construction Manufacturing




Number of workers

ccording to the U.S. Bureau of Labor

Statistics (BLS), the median age of
workers in the electric power generation, transmission, and distribution sector in
2015 was 45.7. This figure is higher than the
U.S. average (42.3) as well as median figures for mining (40.8), manufacturing (44.4),
and construction (42.7). Of the total 661,000
workers in the electric power sector, 502,000
are 35 or older, 343,000 are 45 and older, and
166,000 are 55 and older.
Those numbers are likely no surprise to
those in the field, where the challenges of an
aging workforce have been an oft-remarkedupon issue (see sidebar). While some industrial sectors such as mining and construction
have been able to attract younger workers,
the power sector has traditionally skewed
older (Figure 1). There are many reasons for
this, among them, the facts that more extensive training is often required than for other
professions and that many workers enter the


16 to 19

20 to 24

25 to 34

35 to 44
45 to 54
Age of workers

55 to 64


POWER June 2016

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Young Power Professionals: Adding Bench Strength

Youve probably heard people lamenting
the fact that the power industry workforce
is aging. Perhaps youve even initiated
such conversations. Duncan Nims, regional
learning officer based in Boise, Idaho, for
the U.S. Bureau of Reclamation (USBR), is
no stranger to that type of water-cooler
If you look at our demographics, I think
its 45% of our employees will retire in the
next five years, Nims said, during a presentation at the ELECTRIC POWER Conference & Exhibition in New Orleans on April
18 (Figure 2). We cannot allow those folks
to leave without having that knowledge
Youve likely heard this one before too:
Location, location, location. According
to Nims, one thing that makes attracting
young people to jobs with the USBR difficult is the location of its facilities. Although a number of workers find remote
rural settings appealing, many do not.
Some prospective employees consider being 80 miles from a Walmart or McDonalds
a hardship.
Our hope is that we can recruit and retain folks, maybe not to be in Grand Coulee
for their entire career, but we believe that
if you spent four or five years in Coulee,
or Hoover, or Grand Canyon, or Shasta, or
many of our other facilities, that can be a
real foundational driver for the rest of your
career, said Nims.
While many companies have probably
had tuition reimbursement programs for
years, it is a new tool for the USBR and is
seen as a positive development. Nims said
that many young workers want to improve
themselves. He suggested that some workers may not be completely satisfied with
their current positions, but they can see
other opportunities within the organization that they are interested in. The tuition
reimbursement program can help them get
the training and skills they need to comskilled workers with power generationspecific skills. An aging workforcecoupled
with increasing customer demand, decreasing generation rates, rapid technology innovation, and renewable integrationmeans
that the power generation business and utility
business landscape will evolve significantly
over the next fifteen years, he said. While
younger generations of workers will bring

pete for those jobs and can benefit both

the worker and the employer.
Advancing technology is requiring that
we become a much more nimble industry,
which we havent had to be before, said
Kathy Perry, transmission and distribution
training manager for Arizona Public Service
(APS). The great thing is that the new
workforce coming in is really positioned
uniquely to be able to handle that, because
theyve been nimble in technology pretty
much their whole lives.
Perry noted that APS relies on partnerships to supplement its own training.
Specifically, she pointed to the Energy Providers Coalition for Education (EPCE) as an
important APS partner. EPCE has more than
2,500 member companies and organizations across the country. Since 2000, it has
served as a national education resource by
developing, sponsoring, and promoting industry-driven, standardized, and accredited
online learning programs designed to meet
energy industry workforce needs.
In addition to education, APS also aims
to develop its young workers through onthe-job learning opportunities. Perry suggested classroom learning is only a portion
of the process; there is so much more than
classes, she said.
Mentoring offers another development
toolnot only for job-specific knowledge,
but also to impart a better understanding
of the big picture. APS believes in networking groups too. By interacting with
people from other departments or business
segments, the company feels employees
get a better appreciation for how their work
affects others.
Both Perry and Nims mentioned project
management as a developmental tool. Perry
specifically mentioned a young female engineer who volunteered to take on a big, important project for APS. Although the company
accepted some additional risk by assigning
the job to a relatively new, less-experienced
new skills to the industryparticularly in
modern technologyit is crucial for generators to tap into the knowledge and expertise
of seasoned workers.
Further, he noted, Generators must
contend with both aging technology and
the retirement of the coal fleet. The personnel in aging power plants are being
asked to do more with less resources to

2. Wanted: Top-notch


From left to right: Kathy Perry of Arizona

Public Service, Christine Carpenter of the
Energy Providers Coalition for Education,
and Duncan Nims of the Bureau of Reclamation, offered solutions for workforce
challenges during the ELECTRIC POWER
Conference in New Orleans. Source: POWER/Aaron Larson

employee, the outcome was successful.

We look for those challenging opportunities so that we can challenge people,
we can reward them, and show them that
we value their contribution and want to
invest in their growth and their opportunities, said Perry. Through those efforts,
our young workers that are coming in are
really highly engaged, and they feel like
theyre learning a lot. They want to learn
a lot, and were giving them opportunities
to do that.
The ultimate takeaway from the session
was that there are great opportunities for
workers entering the job market. Positions
are available now; young engineers and craft
workers are in high demand. The need is only
going to grow as older employees retire, so
workforce development initiatives are very
important for the future of the industry.
Were working very hard to develop leadership programs at every level of our organization, Nims said. We know at this point,
there is no other time in our history where
opportunities for advancement are any higher and greater than they are now.

Aaron Larson, POWER associate

maintain productivity. Owners of these
plants feel the squeeze and are strategically implementing automation to augment
the reduction in personnel.
But those younger workers are coming
one way or another, and the power sector
needs to be ready. One less-noticed trend is
that, between the need to keep experienced
older workers around longer and more-fre-

POWER June 2016

3. Cross-functional. While younger
workers may be attracted to power sector positions in renewable energy because they are
perceived as more environmentally friendly,
they should be aware that many skills are
transferrable across the industry regardless
of the generation source, making transitions
from one field to another fairly straightforward. Courtesy: Duke Energy

quent delays in retirement, the U.S. will for

the first time have five different generations
working alongside each other. The BLS first
anticipated this trend a few years ago, and
the 2010s are when it was first seen as the
youngest workers enter the workforce while
the last few preBaby Boom workers remain
on the job.
What will a five-generation power plant
look like, and how do plant managers make
it work? POWER talked to a variety of individuals in the sector to see whats ahead.

Attract the Right New Workers

Successfully integrating younger workers
begins with attracting people who have honest interest in the field and realistic expectations about what it involves. Several people
POWER talked to lamented the impression
many young people have of power generation
as stodgy and old-fashioned, which they say
isnt accurate.
Its hard to attract people to fields that are
characterized by repetitive work, especially
if it is seen as not transferrable experience,
noted Bob Ashenbrenner, vertical solutions
architect at mobile technology firm Xplore
Technologies. Fortunately, much of power
generation work is transferrable. There are
multiple fuel sources, plus wind and solar, all
of which use part or most of the same skills.
Many large industrial sites also generate their
own power. So it is accurate to say that a job
in any power plant can lead to a career in
power, whether its at a large-scale site for a
utility or in a smaller setting where the same
skill set is relevant.
Whats more, the technology in most

June 2016 POWER

power plants is advancing rapidly, and workers looking for high-tech careers should be
made aware both of the many opportunities
and that their interests and skills are badly
needed (Figure 3).
Utilities recruitment and retention are
going to be driven by the extent to which
work responsibilities can transition from
technician to information worker to better
align with expectations of todays workers
across many generations, Ashenbrenner
said. Younger workers especially have come
to expect always-connected devices that are
touch and voice accessible.
Ashenbrenner recommended downplaying
traditional job marketing and playing up the
importance of power generation to modern
Rethink how you describe and market
the job: The job isnt power plant. It is
maintaining conditioned power networks.
Virtually every machine and device in every
industry uses energythats powerful to a
younger worker who wants to make a difference. But dont just make the description
moralizing. Connect it to a career. Present the
impact of their job on a larger scale.
Fran Sullivan, senior vice president of operations for NRG, explained how the giant
generator makes an effort to cultivate an image distinct from how younger workers may
view traditional utilities.
We constantly look for ways to improve
how we generate electricity, he said. Customers see NRG as innovative, offering technologies for the home and for businesses
that are being adapted to improve efficiency
and reduce environmental impact. The lesser-known fact is that we employ that same
methodology to our fleet generation. When
you see that the company is tackling that impact issue on both ends of the spectrum, it
says a lot about the commitment to making
With more and more private companies
particularly high-profile tech firms like
Google and Amazongetting into self-generation, generators can make clear to younger
workers that generating electricity doesnt
mean a lifetime of being tethered to a turbine
or boiler.
Workers dont want to be locked into
one job or one field, Ashenbrenner said.
A programmer working at Twitter knows
that her skills translate to thousands of other
employers and that having Twitter on her
resume adds to her value. Power plants can
offer the same appeal: Transferrable experience. A resume at a power plant, especially
if it includes some information worker tasks,
prepares for a career with fossil fuels and renewables, with large-scale utilities and local
power subsystems.

Get Past the Stereotypes

If you listen only to media stereotypes, you
may be concerned that your youngest workers will arrive with smartphones surgically
attached to their arms, expecting to be promoted to CEO their second week on the job.
The reality, according to recent research in
Harvard Business Review (HBR), is that
a 25-year-old worker nowadays has more
similarities than differences with 25-yearold workers 30 years ago. Desires to make
a positive impact on their organization, do
work that has beneficial effects on social and
environmental challenges, and be passionate
about their job have not changed substantially across generations.
Nevertheless, todays younger workers do
approach their jobs differently than todays
older workers in some respects. Younger
workers tend to seek work that supports
their chosen lifestyles, while older workers
choose lifestyles that their work supports,
Steve Ludwig, Rockwell Automations safety programs manager said. Younger workers are no longer attracted to low-tech, dirty,
manual jobs in remote locations simply for
the money. They want to live and work in
more urban environments, in a clean, creative setting.
But as an article in HBR suggests, managers are usually better off focusing on
similarities rather than differences in order
to help build collaborative relationships between older and younger workers. Todays
younger workers are especially receptive to
discussion, engagement, and group activities that can help with knowledge transfer
and mentoring.
Tammy Ridout with American Electric
Power (AEP) says the big generator makes a
deliberate effort to build these kinds of crossgenerational teams.
Through the introduction of lean processes and meetings in our plants, employees
have found themselves in problem-solving
groups with people from a wide variety of
backgrounds, she said. During those events,
the value of both the younger and more experienced worker is usually revealed. They both
bring important perspectives to the table and,
although they dont always realize it, they
build on the talents of each other to generate
a better final product than if either had taken
on the task independently.
McDonnell noted this is an ideal way to
engage younger workers.
Younger workers have high expectations of the workplace and want to be part
of decision making processes, he said. This
requires utilities to reassess business processes, the utilization of new technology and
the ability of real-time information to enable
faster, better decisions.

4. Mobile tech. Both older and younger workers can benefit from a transition to mobile
technology for plant functions. Dont assume older workers will resist the change or will be
more challenged by it than younger ones. Courtesy: XPlore Technologies

Making Technology Transitions

Ridout noted that, not surprisingly, younger
workers tend to be more adaptable to technological evolutions.
Younger employees seem to be more flexible to changes, especially where technology
is concerned. Controls automation, upgrading
software programs, or migrating to performing tasks like registering for benefits online
seem less of a burden on Millennials.
But while older workers may need different approaches to adapt to new technologies,
the stereotypes of Baby Boomers befuddled
by their smartphones and computers dont really translate well to the power sector.
Todays older employee has migrated
and moved with the technology throughout
the last 30 years, from pneumatic and relaybased controls to the early microprocessor
controls such as the PLC2 and PLC3 to a
modern DCS like PlantPAx, McDonnell
said. These workers understand electronic
processes and the advantages of digital controls and shouldnt be patronized (by managers or vendors) when new tech is introduced
(Figure 4). The biggest difference between
generations in the use of power industry technology is the fact that new workers prefer
mobile platforms and handheld technologies
to transfer information.
Still, new tools may need to be introduced
differently for older workers, without assumptions about worker familiarity or desire
to change platforms.
An initial introduction with a more hands26

on instructional follow-up, by a live instructor, is often helpful to adapt older workers to

the new processes, Ridout said. We share
information through electronic versions as
well as bulletin boards and tailgate talks to
satisfy those who crave instant information
as well as those who need a more personal
delivery method.
Sullivan noted that many changes can actually make things easier for older staff.
We find that the knowledge and experience of more-tenured employees is a benefit to making improvements in our plants,
he said. Over time, power generators have
implemented innovative approaches that
minimize labor-intensive tasks and reduce
workload. This continuous improvement
process has been primarily in the interest of
improving employee safety and efficiency,
but also has the effect of improving processes
such that all workers have lesslabor intensive tasks.
One key difference, Ashenbrenner noted, is that older workers are less enamored
of making changes just to get the latest
gearthey want clear justification for the
new approach.
Older workers tend to question the benefits of too many new technologies, he said.
Theyve relied on the same paper-driven
processes for decades and, in their experience, the way theyve done things has always
worked. They believe that they can continue
to work as before without issue.
There are differences of opinion on how

much this attitude should be accommodated,

Ashenbrunner said the key is making the
transition as seamless as possible. Make the
on-screen forms and tools as similar to existing processes as possible. Even let the older
technician type in the number under the barcode on the equipment if he chooses. After
a while, hell try the scanner, see how much
easier it is, and then switch on his own.
But John Roffel, product line director
simulation and competency for Honeywell
Process Solutions, thinks this is the wrong
approach. Its amazing how often we duplicate the old analogue view and interaction in
the new digital world, only to accommodate
a significant resistance to change. Compromise equals risk, so this resistance is indeed
important to overcome for the benefit of all.
Roffel suggested that generators should
adapt for the benefit of all generations as
most things that would benefit an older worker are also beneficial for the rest. What is
more problematic is the resistance to change
from the older generation, which has left an
industry that some consider as obsolete. This
resistance has resulted in compromise as new
technologies (such as human-machine interfaces) are deployed.
Managers who have done a good job
building intergenerational bridges can leverage them when theres a technology transition, Sullivan noted.
We focus a great deal of energy around
teamwork, he said. By taking advantage of
everyone on the team, we see more-experienced workers sharing knowledge with newer workers, while newer workers share ideas
and their own experience with technology
with workers who may not be as tech savvy.
This knowledge sharing is especially important since our fleet is very large. Regardless
of background, our view is that when one of
us needs help, we all are accountable to jump
in and assist.
McDonnell agreed. Generations can complement each other, he said, with younger
workers providing insight to newer technologies, and older workers providing insight into
the effect of technology on physical equipment. Generators, he said, can manage the
challenges effectively by providing technology with traditional and remote capabilities,
as well as training opportunities. This broad,
cross-selection of resources allows workers
to learn in a matter that is most effective to
each individual.
Remote technologies are particularly well
suited to bridging generational divides, McDonnell noted.
Remote access allows a plants most seasoned employees to offer their expertise to
sites around the world from a central loca-

POWER June 2016

5. The digital future. Younger workers
are most familiar with online and interactive
education, but all workers can benefit from
advanced training technology with the right
approach. Courtesy: Honeywell

operators. So, too, are problem-solving

skills, and the thought processes involved
in analysis, comparison, interpretation, and
evaluation. All are central to the role of process operators.
But this is not to say that generators should
set up entirely different training tracks for
different generations.
This is the crux of the issue that has
made the transition to the next generation so difficult. It is enough to accept that
there are differences, but it is necessary to
evolve, he noted. The older worker needs
to adapt and learn new and better ways to
get the job done, safer and better. A culture
of continuous improvement must be aligned
with an evolution and adaption of appropriate emerging technologies.

Safety Matters
tion, he said. In addition, enabling workers
to remotely monitor the operations of an isolated location, for example, can help attract
and retain younger workers who want to live
in a metropolitan area versus near the plant.
All that being said, there are older workers
who may have trouble with new technologies, and managers should avoid making assumptions about their experiences.
There are workers who do not have PCs
at home, or if they do, someone else maintains it for them, usually one of their children, Ashenbrenner said. So introducing
mobile technology into fields like power
plants means that some of the employees are
first-time computer users.

Training Options
Roffel stressed that different generations may
need different training approaches because
their educational experiences before arriving
on the job can be very different (Figure 5).
Todays generation of young people entering the industry have been conditioned by
their experiences with gaming, the Internet
and mobile devices, such as smartphones and
tablets, to expect a different type of learning
experience, he noted. They expect interactive and engaging activities, to capture their
attention. They need immediate feedback as
a means to motivate, and they are well versed
in accepting training on demand.
This isnt necessarily true with older generations, however.
We know from research studies that an
effective training program for both older
and next generation workers uses a variety
of techniques to improve the effectiveness
of training and in particular the higher order
skills needed by such workers. For example,
the ability to evaluate adequacy of information and procedures upon which conclusions
and decisions are based, is key for process

June 2016 POWER

One issue that came up repeatedly was safety.

Younger, less-experienced workers need time
to adopt good mindsets and fully understand
an organizations safety culture, and they
may not immediately appreciate that the
way weve always done it is the rule for a
reason. Safety procedures, culture, and processes do not change regardless of the employees generation, McDonnell said.
And yet, the understanding of what
makes a safe workplace continues to evolve
(see New Thinking on Old Safety Issues
in this issue and Best Practices for Aligning Safety Metrics, Incentives, and Performance in the February 2015 issue). Safety
professionals recognize that a willingness to
challenge established procedures can lead
to improvements in safety, and new eyes
can sometimes see risks that older ones have
overlooked. In training new workers to the
plant safety culture, care needs to be taken
not to usurp workers responsibility to keep
themselves safe.
In addition, safety risks for older and
younger worker are often not the same.
Younger workers tend to have more injuries due to inexperience, underestimation
of risks, and unwillingness to ask questions,
Ludwig said. By contrast, older workers
tend to have more musculoskeletal and repetitive stress injuries due to years of wear
and tear on their bodies.
A recent Rockwell Automation white paper stresses that generational issues need to
be taken into account in safety planning and
plant design.
Older workers require physically lessstrenuous interaction with machinery, including reduced lifting, bending, twisting,
and repetitive actions. Younger and inexperienced workers require more passive safety
systems to help mitigate risks in the event
of an inappropriate action, such as placing a

hand or another body part in a hazardous position, it notes. Hazard assessments should
take into account not only the traditional
hazards, but also ergonomic and usability issues for a broad range of workers. Engineers
performing assessments, building functional
specifications and designing machinery need
to assess all potential operator and maintenance technician movements as part of the

Changing Career Arcs

One challenge of managing the Millennial
generation is its reputation for wanting to
move up faster and move around more.
While this is a stereotype, it has some basis
in reality.
This is true, and we do see it, Ridout
said of AEP. We try to have a variety of different assignments for employees where they
can stay challenged with meaningful work.
We are fortunate that we are a large corporation, and we always have internal job postings to fill vacancies. Employees looking for
a change arent held back, and if they are the
successful candidate for a job opening, they
can transfer to a new group to keep learning
something new.
Sullivan reported much the same thing for
The main difference that we see is that
younger workers today are much more focused on professional development. Once
they are assigned to a plant, it may be
some time before their talents are recognized outside that setting, he noted. To
address this, weve established special
programs that team up young employees
with senior management. One example
is our Women in Power initiative. Since
women have historically been under-represented in our business, we want to make
sure that they get good development opportunities outside of their current roles.
Our program gives mentees direct access
to senior leadership from across the country. This gives them exposure across our
fleet, increases their experience, and accelerates their growth opportunities.
While this requires a shift from traditional
practices of having the same workers staffing a plant for decades to retain institutional
skills, it can still be a benefit to a company
that stays flexible.
We dont look at this as turnover, even
though a certain department may lose a worker, Ridout noted. That worker who transfers
is a valuable asset to AEP and is becoming
more valuable by learning a new job in a new
department and becoming well-rounded in
many facets of our organization.

Thomas W. Overton, JD is a POWER

associate editor.


New Thinking on Old Safety Issues

Courtesy: POWER/Tom Overton

Human workers are imperfect, which is why theres no magic bullet that will give
you a safe workplace. But new research on human behavior and how that translates
into safety attitudes is helping some in the power industry get beyond the traditional platitudes.
Thomas W. Overton

afety first. Safety is no accident. Be

awareTake care.
Those and others are slogans most of
us have heard hundreds, if not thousands, of
times. Safety training and safety culture has
always been an integral part of working in the
power sector, and certainly no one wants to
be hurt or killed on the job. But wanting to be
safe and being safe are two different things.
Given the inherently dangerous nature
of what it does, the power sector has made
admirable progress in reducing on-the-job
injuries. According to the U.S. Occupational
Safety and Health Administration (OSHA), in
2014, only three workers in the entire electric
power generation sector were killed on the
job. Those are numbers that compare quite
favorably to other industries: The OSHA fatal work injury rate (injuries per 100,000 fulltime equivalent workers) for utilities in 2014
was 1.7, which is lower than for other industrial sectors and far lower than injury rates for
the mining (14.1), construction (9.5), and agricultural (24.9) sectors. Its even lower than

the retail sector (1.8). Much the same holds

for OSHA non-fatal injury rates.
Yet even three deaths are three too many,
especially if they were preventable, as most
on-the-job injuries are. What makes the difference between going home safe and going
to the hospitalor worse?
Most safety professionals have recognized
that traditional lagging indicators like OSHA
statistics, while important, are of limited dayto-day use.
Your core injury statistics are a good way
to keep score, Guy Starr, president of DZ
Atlantic, told POWER in an interview, but
the problem is that they only indicate when
an injury has already occurred.

Track Behaviors, Not Injuries

Thats why the focus in recent years has
been on identifying leading indicators of
potential injuries that can be tracked and
used for prevention purposes. Its an easy
idea to state, but putting it into practice can
be challenging.

Day & Zimmermann (D&Z)a firm that

serves the power industry with engineering,
construction, maintenance, and staffinghas
spent several years developing a program
known as Behavior Observation Learning
Tool, or BOLT. The BOLT system is designed
to give site managers the tools to identify and
track leading indicators like at-risk and unsafe behaviors, and these behaviors are corrected over time through positive coaching
and discussion. Thats a common approach
these days, but BOLT goes beyond this to
create a framework for identifying the motivating forces behind unsafe behaviors. That
allows plant staff to have deeper discussions
about how to change behavior in the future.
While D&Z takes pride in a healthy safety
culture, for BOLT, Starr said, We have put a
really good focus on our front-line supervisors. That has helped because it creates a dialogue between management and the workers.
You are actually out there talking to people
who really know where the safety hazards are
in the field, and the people in the field are

POWER June 2016

1. Leading indicators. Day & Zimmermans BOLT program has helped the firm substantially drive down injuries by giving managers a clear picture of the company safety culture before
accidents happen. Supervisors are trained to recognize and record safe, at-risk, and unsafe
behaviors through direct interaction with workers in the field. Courtesy: Day & Zimmerman

closest to the work.

Mark Alderfer, director of projects for
D&Z, explained the BOLT program in more
detail in an April interview.
It is a culture change, so we need to have
the supervisor engaged in changing the craft
labors beliefs, and we do that by changing
their experiences, so they get positive experiences with the extra time to do the job safely
and correctly. When you continue to affirm
the actions that come out of that belief, you
get good results.
Supervisors and workers are trained in understanding and identifying safe, at-risk, and
unsafe actions and behaviors, and stopping
dangerous situations in positive, no-risk actions, Alderfer said.
All workers are empowered to intervene
and stop at-risk and unsafe behavior, he said.
But the tracking and accountability in BOLT
are separate from these interactionsno
names are recorded except for those of the
supervisor. We do go back and track the supervisors and the quality of the observations
theyre making and compare them. Supervisors who are not as skilled at spotting atrisk and unsafe behavior may be paired up
with others who are further along the learning curve. The point is to prevent the system
from becoming a punitive interaction focused
on recordkeeping, and instead to change individual beliefs and attitudes in the field.
When you can get to that grassroots level, Starr said, these guys understand that
this is not punitive, were doing this to make
sure everybody goes home safely.
There are three levels of observations reflecting increasing behavioral sophistication.
Supervisor observations are recorded in a da-

June 2016 POWER

tabase and tracked with weekly reports at the

director level so behavioral trends are more
apparent. The data can be crunched a variety
of ways to identify the exact problems.
You know that you are having issues with
a certain type of unsafe behavior, so you can
focus on that issue, Alderfer said. What this
does as well is identify supervisors who may
need more help spotting safety issues, or who
may be letting things slide. Alderfer said the
system is efficient at spotting supervisors who
may be inclined to under-report behavioral
observations to make their area look good,
because when that happens, the data tracking will start showing a mismatch between
observations and ultimate safety results.
How has BOLT worked? On one site where
D&Z works, the program has helped drive
down injuries by 60% in a year and a half.
There has also been a noticeable decrease in
the number of at-risk and unsafe behaviors
on site (Figure 1).
Furthermore, D&Z has been able to correlate trends in the BOLT system with the
sorts of injuries that do occur. On the job
sites where risky behaviors were seen in
the observations, those are the areas where
were having problems with incidents being
reported. In contrast, those areas showing
steady improvement in safe behaviors have
seen commensurate reductions in injuries.
So it does correlate extremely well, Alderfer said.
Another approach has been taking a more
holistic view of safety and understanding
how it relates to other issues such as quality
of work. Some companies have taken steps to
merge safety and quality assurance programs
(see sidebar).

Workers Take the Lead

But beyond attention to behaviors is a better understanding of what makes human beings focus on safety from a psychological
standpoint. Theres a growing belief that
top-down safety management has inherent
limits because, in certain ways, it takes away
a workers autonomy and responsibility to
keep him- or herself safe.
Jake J. Mazulewicz, director of JMA Human Error Solutions, told POWER he has
seen this phenomenon many times in the
field. Many work teams and their leaders
tell me, So heres another rule that we have
to follow because its required. When I ask
them why they think its required, they often
shrug their shoulders and sometimes parrot
back a well-worn sound bite or two. This
compliance-based approach rarely seems to
generate the kind of commitment that most
effective safety programs need to thrive.
While the top-down approach can work, it
appears to have limits, and data suggest safety
professionals are starting to realize this. A survey
of safety managers across multiple industries
conducted by BLR and eCompliance found that
though safety is a responsibility of middle management at roughly two-thirds of the responding
companies, 23% of those same safety managers
felt workers should be leading their safety programs (though only 5% actually were).
Many organizations with very mature and
very successful safety programs are seeing
low but stubbornly consistent accident and
injury rates, safety consultant Mark Pergrem
of SAFEmap International told POWER in an
email interview. Even worse, some are seeing an increase in the severity of incidents
that do occur.
Whats the cause of this inability to further improve safety? Two of the most common reasons why top-down safety programs
fail are the (false) beliefs that humans are
the problem in safety and that compliance
equals safe work, Pergrem said.
A flawed belief that humans are the problem in safetythat it is their fallibility and
erroneous behaviors that cause accidentsresults in actions and systems that blame workers, Pergrem said. Secondly, and closely
linked to the above, is another false belief that
compliance equals safe work. This approach
fails to grasp the complexity of risky work,
and in a harsh compliance regime there is little
space left for the employee to contribute.
The fact that management attitudes have
a critical influence on safety culture is well
known, but Wes Havard, site manager for operational excellence and human performance
for Luminant, stressed that organizational
structures matter as much as outward attitudes. All behaviors are heavily influenced
by organizational factors, he said. Every


Merging Safety and Quality Assurance

Valdes Engineering Co. provides engineering services to the power, chemical, and oil
& gas markets. Over the past several years,
Valdes has been able to improve its safety
record to reach the lowest possible total
recordable injury rate for a company of its
size. Building off this success, the company has experienced strong growth over the
past year and wanted to maintain this toptier status while still being able to deliver
the quality its customers desire. With this
in mind, Valdes has developed a program
for intertwining safety and quality.
The first step was to remove the silos around
safety and quality departments and merge
them into a single entity. The key theory was
that attention to detail and a general awareness of ones working environment will result
in a better-quality product while maintaining
a safe working environment.
With the substantial number of new employees being on-boarded to Valdes, this
meant driving this principle in at the start
of employment. Typically, a new employee
would be required to attend an all-day
safety orientation covering topics from industry safety practices to specifics regarding
working environments. This orientation has
been expanded to include a four-hour training session covering best practices and key
metrics for work product quality.
Commitment to these values does not
end after initial employee training. Valdes
conducts a weekly safety and quality stand
down with both its locations. The purpose
is to make all employees aware of changing
best practices and lessons learned from other companies and to provide a forum where

all employees can share their experiences

relating to both safety and quality.
Valdes has taken safety and quality one
step further by removing any budget limitations for the department. There shouldnt
be a cost-benefit analysis applied to a persons well-being. If additional equipment is
needed to protect workers while delivering
a higher-quality product, then Valdes has
committed to making that investment (Figure 2).
An example of this is the investment the
company made in laser scanning equipment.
Many of the projects and plants Valdes
works with have drawings that are out of
date or incorrect. A significant amount of
time would typically be spent upfront documenting current field conditions before engineering design would commence. Many
times, the required current field information is in inaccessible locations requiring
scaffolding to be erected or employees to
wear safety harnesses and work at heights
to access those areas. The additional safety
gear at times made it challenging to obtain
accurate dimensional data.
The investment in laser scanning resulted in a much safer work environment
while providing a higher-quality product
for customers. No longer did employees
have to rely on harnesses to obtain field
informationrather, laser scanning was
able to remotely detail the physical layout of equipment and obstructions in a
3-D environment. Laser scanning also
can greatly increase the level of accuracy,
with dimensional information accurate to
1/8 inch.

organization is precisely tuned to get exactly

the behaviors it is getting, and management
represents the main source of organizational
tuning. Processes are not inherently safe
workers create safety.
Disciplining workers for unsafe behaviors,
by contrast, creates competing emotions that
interfere with a focus on safetyworkers become as much, or more, interested in avoiding discipline than in avoiding accidents.
In fact, studies have shown that human beings behave most safely when they believe
they are primarily responsible for their own
safety, because relying on safety nets can
create a false sense of security in the brain.
Every power plant in this country regularly puts workers in complex contexts with

instructions that are under-specified, underresourced, under-trained, under-modeled, under-coached, and under-reinforced, combined
with inherently flawed defenses, Havard
noted, and the workers get it right 99% of the
time. They are masters of dynamic adaptation,
and that is exactly what we desperately need
to be successful in the future, but we destroy
that potential when we embrace [top-down]
views of safety and engagement. Those who
do the work know the problems and have the
best solutions.
That can be a hard pill to swallow for
managers who believe safety needs to be
tightly managed.
How to get beyond that attitude? Mazulewicz suggests paying attention to areas where


2. Quality and safety go hand in

hand. A Valdes employee taking field measurements. Courtesy: Valdes Engineering

This improved field documentation trickles down to safety for fabricators and installers of equipment and piping. Piping
can be shop-fabricated, thus reducing the
amount of field time and the hazards of
cutting and preparing pipe in the field. The
use of laser scanning has decreased field
time required by engineers and designers
in the range of 50% to 90%, and saved on
upfront documentation costs. This has resulted in a safer working environment for
installers and also provided a greater level
of accuracy for shop fabrication and field

Brandon Bell, PE,

power sectorlead projects manager,
Valdes Engineering Co.

workers have taken direct responsibility for

safety. Once you find a good exemplar, then
learn as much as you reasonably can about
when, how, and why they took responsibility
for it. Seek the ground truth. Take steps to
make sure that people dont just tell you what
they think you want to hear. Be prepared to
learn some insights that will challenge your
assumptions and existing mental models. Inquire gently so you dont disrupt the healthy,
sustainable process that youre studying. As
you learn more, youll likely discover a handful of essential, non-obvious, company-specific insights that will be useful, perhaps even
critical, to the success of your mission.

Thomas W. Overton, JD is a POWER

associate editor.

POWER June 2016

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Training the Next Generation of

Electric Utility Workers

Courtesy: EPRI

New worker training has traditionally meant classroom instruction and wading
through a big pile of printed materials. But videos can offer deeper and more rapid understanding of critical issues, especially for younger generations. The Electric
Power Research Institute has developed a series of videos to help power plants train
new workers more effectively.
Dwayne Coffey

nexperienced new hires at an electric

utility station face steep challenges in
learning correct practices and procedures for the several hundred systems in the
facility. A single work routine may have numerous steps, different switches and valves
look the same, and errors can have significant consequences.
Whats the best way to train these new
employees? Most plants document procedures in technical manuals and binders, but
just reading these procedures is not always an
effective learning method. Experienced employees can demonstrate a practice, but these
personnel may not always be available, and
training takes them away from other duties.
For these reasons, power plants need a way
to distill the information from thick binders
and the memories of veteran workers and de32

liver it quickly, consistently, and effectively

to new employees.
In 2014, the Electric Power Research Institute (EPRI) sought to meet this need by
launching a series of training videos called
What Does ______ Look Like? to demonstrate good operating practices to power plant
workers. Each 3-to-5-minute video demonstrates a specific practice, with simple narration to point out key messages. The series
includes common utility practices and human
performance toolsfrom a pre-job briefing
to peer checking.

Capturing Experience and

According to the U.S. Department of Labor,
as much as 50% of the countrys electric utility workforce is expected to retire in the next

five to 10 years. These workers acquired their

skills over many years of observation and
practice, but when they leave, that critical
experience and know-how will walk out the
door and not be easy to replace.
In addition, the makeup of the workforce
is changing. Todays power plants are no longer likely to have staffs that largely consist of
employees with 30-plus years of experience,
workers who grew up at that plant and know
procedures inside and out. Increasingly, plants
are more likely to have a large percentage of
new employees with little hands-on experience. For the first time in history, five generations will soon be working side by side.
One of the key challenges for the electric
utility industry, therefore, is the transitioning
workforce. Putting good procedures in place
and using human performance tools and skills

POWER June 2016

1. Hands on. Lance Duguay of works with EPRI actor Nathan Rouse on the
teleprompter script for one of the Stop, Think, Act, and Review (STAR) videos. Courtesy: EPRI

2. Visual aids. EPRIs Director for Power

Plant Components and Process Neva Espinoza (visible on the monitor screen) prepares for
the filming of a training video. Courtesy: EPRI

3. On site. Shooting for the Self Check

video took place at the Duke Energy W.S. Lee
Steam Plant outside Goldsboro, N.C. Courtesy: EPRI

that are consistent across the board is a good

way to help less-experienced staff get up to
speed quickly in order to match the experience that was available in the past (Figure 1).
Over the years, EPRI has published documents with a focus on Conduct of Operations
and documenting good operating principles.
The reports were compiled by reviewing
plant operating histories, incident reports,
accident reviews, equipment damage, plant
down-time, and personnel interactions.
These good operating practices have covered topics such as procedures, communications, human performance, shift turnover, log
keeping, rounds, and so on. However, these
guidelines did not provide a visual example
of how these operating principles should be
implemented or practiced.

The Value of Video

Neva Espinoza, EPRIs director for power
plant components and process, conceived of
the video series when she was visiting a plant
to discuss best practices with personnel and
realized that many of the newer employees
did not know what certain practices were
supposed to look like (Figure 2). They rarely
had the opportunity to travel to sites where
they could observe best practices in use. Just
describing a task in a few sentences did not
adequately convey it to someone who had
never witnessed it. What was needed was a
simple visual enactment of the procedures.
Videos offer a number of advantages. They
provide an actual demonstration of what the
process looks like. Watching them usually
takes just a few minutes, thereby reducing

June 2016 POWER

training time. Within the videos, a subject

matter expert can point out the important
features of the process (Figure 3). When the
video is over, an on-site technical expert can
discuss site-specific issues. The videos can
be watched at any time, on a variety of devices, and they can be archived so that when the
veteran employees are gone, their expertise is
still available. After new employees watch a
video, the practices become second nature.
Videos are also a better match for the
new generation of utility workers, who are
used to accessing information electronically and watching YouTube videos to gain
new skills. (See
watch?v=VwL50ppkFEc for an overview of
the project.)
Importantly, the EPRI videos are accurate
and authentic. The videos adhere to the best
practices described in EPRIs written guidelines and draw on the knowledge and insights
from thousands of pages of reports. The
scripts are written by power plant operations
and maintenance personnel to ensure that the
scenes and dialog are technically accurate and
understandable. Finally, the scenes are filmed
on site at power plant locations, and the actors are actual plant employees (Figure 4).
I think the opportunity for new people
coming in to see these videos is going to
put what they actually have to do, and how
important it is, in perspective, said Leslie
Blevins, budget analyst at South Carolina
Electric & Gass Cope Station in Cope, S.C.
Of course, some of the equipment out there
is going to be new to them. Processes are going to be new. The procedures are going to be

overwhelming. So, to see a physical video of

actual people doing what we expect you to do
is going to make the transition a lot easier.

Video Series
The topics for the video series were chosen
based on the interests of EPRI member utilities. The series currently includes six videos
portraying human performance tools and
four videos on proper execution of lockout/
tagout (LOTO). Utilities are using the videos
in different ways. Some are incorporating the
videos into their plant training courses, while
others are posting the videos online to be
viewed at their employees convenience. Following are brief discussions of the 10 videos
in the series.
Questioning Attitude. This video defines questioning attitude as being attentive to all conditions. It notes how employees
involved in a familiar work routine may relax
mentally and ignore or rationalize abnormalities. To have a questioning attitude means to
review a situation to see if things are in the
right place or as they should be, every time.
In one scene, an operator notices a trend in
data and recognizes that a differential pressure is higher than expected. Rather than
simply recording the data, he brings it to the
attention of the shift supervisor so that further investigation can be conducted. In an33

4. In focus. A multi-camera setup was used
to capture an employee checking settings on
equipment. Ted Villa of is shown
shooting camera B for the STAR series at the
W.S. Lee Steam plant. Courtesy: EPRI

other scene, two workers walk from one site

to another. The first worker is focused on his
destination and walks past a water puddle under a piece of equipment. The second worker
sees the water and reports it.
Self-Check. This is a simple human performance tool for helping workers focus on a
task. It is used in performance of any activity where mistakes could result in significant
consequences. The tool is symbolized by
the acronym STAR, which stands for Stop,
Think, Act, and Review. The scene shows an
employee who has been assigned a work order to turn a switch. Before taking the action,
he pauses to review the step. He considers:
What are the hazards in this work area? Am
I at the right component? Do I understand
the procedure? The worker reads aloud the
component ID number and compares it to the
work order. Once he verifies it, he turns the
switch. Then he checks to see that the switch
did its intended action.
Peer Check. A peer check is a verification
by one employee that the actions of another
employee are correct. It takes place before or
during the action to provide a second check
and to minimize the potential for a mistake.
Both workers follow the STAR tool. In the
video scene, a technician needs to open a
valve. He requests that a second technician
do a peer check. The first employee reads the
valve ID number out loud. The second employee checks the number against the work
order and repeats the number out loud.
Independent Verification. Verification
is an attention management tool that helps
people focus their attention, foreseeing the
correct action steps before beginning a task
or reviewing a task after its completion to ensure it was done successfully. Its a process
of self-checking by two employees, working
independently, to confirm the condition of a
Independent verification is used for regulatory or procedural requirements, and it may
be essential in instances of protective or cau34

tion tagging or LOTO situations. Each employee uses the STAR tool. In the video scene,
two workers are given a work order to hang a
tag on an isolation valve. The first worker locates the valve, confirms the ID number, and
turns the valve. At a later time, and alone, the
second worker confirms the ID number and
verifies that the valve was turned.
Communication Techniques. Two tools
to aid in clear communication are three-way
communication and the phonetic alphabet.
Three-way communication, which is commonly used for giving and receiving verbal
instructions, involves:
1. The sender stating an instruction to a second worker.
2. Second worker repeating the instruction
back in his or her own words to the sender.
3. The sender verbally acknowledging that
the second worker correctly understands
the instruction, typically by responding,
Thats correct.
The phonetic alphabet assigns code words
to the alphabet; the NATO phonetic alphabet
is the most widely used version in the fossil
power industry. A is alpha, B is bravo, etc.
These tools are used when verbally communicating all alpha or alpha-numeric designations and is especially important when a
single letter is the only difference in the identities of two pieces of equipment. In the video
scene, a supervisor in a control room uses a
walkie-talkie to instruct a technician in the
field to swap over the alpha pump. In a very
noisy plant location, the technician mishears
the pump name as the bravo pump. When
he repeats this, the supervisor corrects him,
thus avoiding a mistaken action. The scene
demonstrates how what might appear to be
a trivial and unnecessary routine is actually
Pre-Job Brief. A pre-job brief is a meeting of workers and a supervisor before a job
to discuss the tasks involved, hazards, and
related safety precautions. It ensures everyone understands the scope of the work, the
procedural steps, his or her responsibilities, and the hazards and controls. A pre-job
brief is used prior to a task that is not part
of a normal routine or prior to a task that, if
performed incorrectly, would have significant consequences. In the video, a supervisor
greets five co-workers. He tells them about
a new work order thats been received. After
giving each member of the group a copy of a
checklist, the supervisor reviews the tasks to
be performed and describes the preparation
thats needed.
Clearance and Tagging ProcessExecution (Overview). Clearance and tagging

programs at electric generating stations are

designed to protect personnel from injury

and to protect plant equipment from damage.
The clearance and tagging process changes
the baseline configuration of an electric
power plant (the normal operating condition)
to a different configuration (a condition that
supports hands-on work on equipment in a
situation where personnel could otherwise be
exposed to hazards).
A robust and clearly documented clearance and tagging process, LOTO, is critical
for the protection of workers and equipment
and for the performance of effective operations and maintenance. This video is an introduction, explaining the overall function of
LOTO and an overview of the steps needed
to properly establish a LOTO on a piece of
Clearance Writer and Approver. This
video provides a description of the clearance writer and the clearance approver in
the LOTO process. The clearance writer develops a clearance that safely establishes an
energy-free boundary for workers based on
the defined scope of work to be performed.
The clearance approver verifies that all previous clearance steps have been performed
correctly and provides a validation that the
boundary established by the clearance writer
safely protects the workers from any energy
Clearance Hanger and Verifier. This
video provides a description of the clearance hanger and the clearance verifier in
the LOTO process. The clearance hanger
physically aligns the plant equipment in accordance with the approved clearance paperwork and hangs the clearance tags, or tags
and locks, as appropriate. The clearance verifier provides an independent check that the
plant equipment is in the required position
and correctly tagged, or tagged and locked,
as appropriate.
Clearance Holder and Zero-Energy
Checks. This video provides a description

of the clearance holder and the importance

of zero-energy checks in the LOTO process.
The clearance holder performs a physical
walkdown, verifying effective isolation of
the equipment to be worked. The clearance
holder also confirms all zero-energy checks.
Various zero-energy checks and examples are

Future Videos
EPRI plans to continue expanding the video
library. In 2016, a new video series on What
Does Good Shift Turnover Look Like? will
be added to the video library.

Dwayne Coffey (

is principal program manager in EPRIs
Operations Management and Technology

POWER June 2016

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Supporting Coal Power Plant

Workers Through Plant Closures

Courtesy: Lee Buchsbaum

With dozens of U.S. coal-fired units closing, workers who arent ready for retirement
will be seeking new employment. Heres a rundown of programs and resources designed to assist them.
Lee Buchsbaum


dards (MATS) rule went into effect. Some

coal plants applied for and received oneyear extensions, and they are now in the
process of ceasing operation. In fact, Platts
reported that 2,000 MW of older Midwest
coal-fired capacity, mostly in Indiana and
Michigan, retired on a single day, Friday,
April 15. Several plants have received additional one-year extensions beyond April
2016 based on their role in ensuring regional system reliability.
The GAO projected that the year with the
most closures would be 2015 (Figure 1), and,

as the EIA number cited above confirms, it

was. In other words, the worst is over.
But even though many reports identify
the number of megawatts going off-line, few
data exist for how many coal plant workers
are losing their jobs or being affected as the
industry begins to pivot away from coal. Just
like the miners who are hurting as the U.S.
coal industry crashes around them, many coal
plant employees fear they are facing a similar
tsunami. What examples exist for successful
transitions, and what help is there for those
caught in the storm?

1. 20-year view. A 2014 Government Accountability Office report included projected coalfired unit retirements through 2025. Energy Information Administration data show that 2015 did
indeed account for the highest number: Around 14.3 GW of coal capacity retired. (Axis labeling error, in original, is unresolvable without access to data source.) Source: GAO analysis of SNL data
Actual Planned







oal-fired power plants around the U.S.

are closingrapidly. Its a trend that
will continue for the foreseeable future
as dozens more units are slated for closure
in the next few years. According to a recent
study by the Energy Information Administration (EIA), nearly 18 GW of electric generating capacity was retired in 2015. More than
80% of that amount was conventional steam
coal generation, typically older and smaller
In an August 2014 report, the U.S. Government Accountability Office (GAO) stated
that 13% of coal-fueled generating capacity
42,192 MWhad either been shuttered since
2012 or was planned for closure by 2025.
The amount of coal capacity retired in
2015 was about 4.6% of the nations coal
capacity at the beginning of that year.
Nearly half of the 2015 affected capacity
was located in three statesOhio, Georgia,
and Kentuckyand those states each retired at least 10% of their coal capacity last
year. Other states that traditionally have
had high levels of coal-fired electricity
generation, such as Indiana, West Virginia,
and Virginia, each shuttered at least 1 GW
of capacity in 2015.
About 30% of the coal capacity that retired in 2015 did so in April, which is when
the U.S. Environmental Protection Agencys (EPAs) Mercury and Air Toxics Stan-

POWER June 2016

How Generating Companies Are
Assisting Affected Workers
Much of the existing coal generation capacity in the U.S. was built from the 1950s to
the 1990s during a time when electricity sales
were growing much faster than population
and gross domestic product. The coal units
that were retired in 2015 were mainly built
between 1950 and 1970, and the average age
of those units was 54 years. According to the
EIAs research, the rest of the coal fleet that
continues to operate is somewhat younger,
with an average age of 38 years.
The units closed in 2015 also tended to be
smaller than the rest of the coal fleet. The net
summer capacity of the average retired coal
unit was 133 MW, compared with 278 MW
for the units still operating. Often because
they were older, some of these plants required
larger workforces to operate and maintain per
megawatt of capacity.
Just like the facilities they work in, the
average age of workers at many coal-fired
power plants nationwide has steadily
crept upward as many anticipated eventual
retirement. There are several important
contextual factors to remember when considering job losses in the coal-fired generation sector:

2. James De Young Power Plant retires. While there will be some workforce
shrinking related to coal and ash pond handling, most employees from this Michigan plant will
transition to the gas-fired Holland Energy Park. Courtesy: Holland Board of Public Works

3. Gone but not forgotten. American Electric Powers (AEPs) Kanawha River Plant,
located on the Kanawha River at Glasgow, W.Va., was retired in mid-2015. Courtesy: AEP

The average worker at a coal plant is over

50 years old.
The average coal plant has multiple units.
Retirements always happen with multiple
years of forewarning.
Some generating companies have been
able to move workers from coal-fired to
newer gas-fired plants.

All things considered, with careful planning, in many instances staff numbers have
painlessly dropped at a given location
through natural attrition, without layoffs.
An example of a successful transition occurred in Holland, Michigan, recently. Just
before tax day this year, the 76-year-old
James De Young Power Plant on the shore
of Lake Macatawa (Figure 2) fired up two
natural gaspowered units as the plant finally converted away from coal. Owned by
the Holland Board of Public Works (BPW),
a mid-April date to stop burning coal had
long been in the BPWs plan, said Dave
Koster, general manager of the BPW. The
Holland Sentinel newspaper reported that
there were about 35 workers at the plant
who will be moving in shifts to the new
Holland Energy Park as they gain training
for their careers in natural gas and other
energy systems.
Koster told the paper that no layoffs are
needed. Its been a key power resource that
helped make our electric system reliable and

June 2016 POWER

cost effective for the development of businesses in our area and Im glad well be
able to transition our staff over to the new
Likewise, for generation behemoths
such as the heavily coal-dependent American Electric Power (AEP), careful planning
helped save many jobs (Figure 3). By early 2016, AEP will retire more than 6,000
MW of coal-fired generating capacity at
11 power plants in seven states. Typical of
these older plants slated for retirement is
AEPs Philip Sporn Plant near New Haven,
West Virginia, though the adjacent Mountaineer 9 plant is not.

In total, AEP had approximately 570 positions that were affected by upcoming generating unit retirements. As early as 2012,
when the company identified the 23 coal-fueled generating units at nine sites that would
close due to MATS and other environmental
regulations, We specifically held positions
that came open (due to retirements or people leaving) at other power plants not being
closed to help reduce the job impacts from
the generating unit closures, said Melissa
McHenry, director of external communications at AEP in an email to POWER. That
meant new positions at other power plants
or other AEP departments for nearly half of

the employees affected by the retirements.
Many of the affected employees also were
retirement-eligible, so they decided to retire
instead of taking another position that might
have required relocation or longer travel
Most of the job changes within AEP were
for similar types of jobs at another power
plant. There were a few employees who decided to train for line mechanic jobs in our
transmission and distribution organizations
or for other jobs at AEP in order to stay with
the company, said McHenry. Since most of
the affected employees were able to transfer within AEP or were retirement eligible,
the company did not use any government
retraining programs to help with the transition. Many of the new positions were at
other remaining coal plants, but several employees did go to some of AEPs natural gas
generating units. Though certainly there are
still jobs at the coal units that we refueled
with natural gas, it takes a much smaller
number of employees to operate a natural
gas plant25 or so for a good-size natural
gas plant versus well over 100, sometimes
nearly 200, for a good-size coal unit, said
Though AEP prepared employees for transitions in anticipation of MATS going into
effect, the Obama administrations Clean
Power Plan (CPP), under judicial review,
would have even larger effects and displace
more workers.


In response to the fierce debate arising out
of the controversial CPP, late last year the
Obama administration attempted to soften
some of its potential blows by announcing
a series of economic revitalization grants.
Those resources, which benefited towns
and nonprofit organizations throughout coal
country (particularly Appalachia) are only
the tip of the federal funding iceberg.
Last year, as part of President Obamas effort to assist communities negatively affected by changes in the coal industry and coal
power sector, the administration announced
36 awards totaling $14,546,457 for partnerships in 12 states and tribal nations that are
seeking to build a more diversified and better
economic future for their communities, businesses, and workers.
The Partnerships for Opportunity and
Workforce and Economic Revitalization (POWER) Initiative (http://1.usa.
gov/19q0s37) is an administration effort,
involving multiple federal agencies, with the
goal of effectively aligning, leveraging, and
targeting a range of federal economic and
workforce development programs and resources to assist affected workers.

The POWER Implementation Grants

Federal Funding Opportunity (FFO) was released in May 2015 with available funding
from the Economic Development Administration (EDA), the Department of Labors
Employment and Training Administration
(ETA), the Small Business Administration
(SBA), and the Appalachian Regional Commission (ARC). The FFO made funding
available to partnerships in affected communities to help them:

Diversify their economies.

Create jobs in new or existing industries.
Attract new sources of job-creating investment.
Provide a range of workforce services and
skills training for high-quality, in-demand

As part of fiscal year 2016s budget, the

POWER Plus Plan (POWER+) promises to
invest roughly $10 billion more into a set of
coal country goals, including economic diversification, environmental cleanup, health,
and retirement security for workers. It also
provides new tax incentives to support clean
coal technologies because coal will continue
to be a critical part of the energy mix in this
country and around the world.
The 2016 federal budget provides $20
million specifically to support workers dislocated from coal mines and coal-fired power
plants. Along with funding already provided
through the Department of Labors Dislocated Workers National Reserve (, this
will allow states and local areas to provide
reemployment, training, and supportive services to transitioning coal economy workers
to help them get back to work in good jobs
and careers.
A separate resource is the DOLs National
Reserve, which provides grants to states that
have recently experienced a significant dislocation event, such as a mass layoff or plant
closing. These funds supplement job training formula grants to temporarily expand the
capacity of states and local communities to
provide reemployment services, job training,
subsidized employment, and supportive services to help unemployed workers get back
on the job.
Another potential resource is the EPAs
Brownfields Program (
The EPA provides grants to communities
to assess and clean up brownfield sites
properties whose reuse may be complicated
by the presence or potential presence of a
hazardous substance, pollutant, or contaminant. The budget includes increased funding
for the Brownfields Program, of which $5
million is designated exclusively for grants

targeted to communities affected by the retirement of coal-fired power plants.

Assistance for Appalachia

The Appalachian Regional Commission
is a regional development agency created
to assist economic growth in Appalachian
communities. Funds are awarded through a
cooperative process with the governors of the
13 states that make up Appalachia. The 2016
federal budget provides $25 million for ARC,
which will be directed specifically to those
Appalachian communities most affected by
coal economy transition and will support a
range of economic development planning
and implementation activities, including developing entrepreneurial ecosystems, facilitating access to capital investments and new
markets, and addressing barriers related to
adequate water, sewer, and telecommunication infrastructure.
These grants can and should be accessed
by retiring power plant workers and affected
personnel, said Wendy Wasserman, the ARCs
director of public affairs in Washington, D.C.
We take a holistic view of the economic impact of the changing economy on communities. Anything and anyone that is part of the
entire coal transition, from the miners to the
power supply chain and logistics, is eligible
for some of these grants or funds. Through
the POWER initiative, a congressionally appropriated activity thats part of the Obama
administrations Power+ Plan, we are now
distributing funds and helping communities
along that supply chain begin to revitalize
and diversify their economies, said Wasserman in a phone interview with POWER.
Were inviting communities along those
supply chains to develop comprehensive
projects for their labor-shed and to think
about ways to create more economic opportunities, she said.
In March, along with ARC partners at
the EDA, we announced the availability of
over $65 million to apply for both technical
assistance as well as project funding. Currently, were conducting a series of regional
public workshops to help see what is possible and get people and projects up, running, and off the ground, said an excited
Wasserman. We also have a large resource
base to fund existing projects and new initiatives that have been in development up
until now. But top line for us is to help with
the impacts of our nations transition away
from coal, she said.
When asked about specifics, about what
employees or plant managers who know their
jobs or facilities are going to be phased out
could do, Wasserman suggested reaching
out and talking to the appropriate state personnel. If I were an HR manager at a plant

POWER June 2016

that I knew was scheduled to close, I would
get in touch with the appropriate ARC state
people and see if there were any on-going
projects that could be helpful. Thats where
the knowledge base is for the ARC. Their
job is to make sure that our funds are used
to improve the economic health of the communities we serve from the ground up. They
might also be able to link you up with another
partner. There are dozens of smaller-sized
projects that could be exactly what is needed
to help some workers transition to another
career path. Bottom line, if youre a power
plant worker and youre being laid off, if we
can help you, we will, said Wasserman.
To reach ARC state program managers,
visit The group also produced a detailed March 2016 report on the state of the
Appalachian coal industry that can be found

Recent Grants
Below are some examples of recently awarded grants from ARC, the DOLs ETA, the
Department of Commerces EDA, and other
$75,000 ARC grant to Appalshop Inc.,
in Whitesburg, Ky. This grant is for Mines

to Minds: Southeast Kentucky High-Tech

Workforce Training. The ETA is also awarding $200,000 to this project. ARC funds will
be used to purchase digital multimedia supplies and equipment and to fund the creation
of a technology and digital workforce development training curriculum in collaboration
with area educators and regional employers.
$2,000,000 ETA grant to the Ohio Department of Job and Family Services in
Columbus, Ohio. This project will provide

training, work-based learning, and supportive

services to dislocated coal miners and other
dislocated workers affected by mass layoffs
in the coal industry, for re-employment in the
growing oil and gas industry in Ohio.
$2,000,000 ETA grant to the Kentucky
Education and Workforce Development
Cabinet in Frankfort, Ky. EDA is also

awarding $1,000,000 to this project, and

ARC is awarding $75,000. The project will
provide training, work-based learning, and
supportive services to dislocated coal miners and other dislocated workers affected by
mass layoffs in the coal industry to retrain
them for high-demand, high-wage positions
in broadband service, fiber installation, and
information technology (IT).
$147,900 to the Navajo Tribal Nation

Government. This grant is for development

of an economic recovery strategy to address
negative effects associated with job losses
from closures of coal mines and future closure of a coal-fired power plant.
$1,400,000 EDA grant to San Juan
College in Farmington, N.M. The Four

Corners POWER Initiative will provide reemployment services to workers affected by

the changing regional energy economy and
implement innovative partnering strategies
with employers in expanding IT, healthcare,
and renewable energy sectors.
$124,000 to Lewis County Economic
Development in Chehalis, Wash. This

grant is for an economic diversification and

revitalization plan to mitigate job losses from
the closure of a local coal-fired power plant.
$600,000 EDA grant to the Coalfield
Development Corporation in Wayne,
W.Va. This grant will support the Coalfield

Development Corporations Regional Economic Diversification Project.

Lee Buchsbaum (www.lmbphotography.

com), a former editor and contributor to
Coal Age, Mining, and EnergyBiz, has
covered coal and other industrial subjects
for nearly 20 years and is a seasoned
industrial photographer.


April 10-13, 2017

McCormick Center West
Attend the event that brings together more power
generating companies than any other.

Chicago, IL

Where Generating
Companies Meet!

June 2016 POWER



Coal Combustion Residuals Rule

Compliance Strategies
The Environmental Protection Agencys rule to regulate the disposal of coal
combustion residuals as solid waste went into effect last fall. After evaluating the available solutions and technologies, heres what some experts
consider the safest and most effective approaches for complying with the
rule and protecting the environment.
Aaron Larson

little over a year ago, the Environmental Protection Agency (EPA) published a final rule to regulate the disposal of coal combustion residuals (CCR) as
solid waste under subtitle D of the Resource
Conservation and Recovery Act (RCRA).
The rule, which establishes technical requirements for CCR landfills and surface impoundments, went into effect on October 19,
2015. Even before the final rule was signed,
power generators spent a great deal of time
trying to understand their options and make
decisions about how best to comply with the
rules requirements.
But how do companies know if they have
the right plans in place? POWER interviewed
a couple of experts and reviewed the actions
taken by several large utilities to see if any
environmental best practices have emerged.
The insights we gathered might help you
determine if your facility is taking the most
effective actions to prevent unnecessary and
costly CCR releases from occurring. They
could also keep you out of the courtroom.

What Are the Requirements?

The EPAs final rule establishes minimum
national criteria for CCR landfills, CCR
surface impoundments, and all lateral expansions of CCR units. The requirements
include location restrictions, liner design
criteria, structural integrity requirements,
operating criteria, groundwater monitoring
and corrective action requirements, closure
and postclosure care requirements, and recordkeeping, notification, and Internet posting requirements. Some of the requisite steps
are aimed at reducing the risk of catastrophic
structural failures, while others are focused
on protecting groundwater.
Concerning the structural integrity design criteria, the rule requires owners and
operators to periodically conduct a number
of assessments, such as periodic structural
stability assessments by a qualified professional engineer and periodic safety factor assessments designed to determine if minimum

engineering factors of safety are achieved. A

periodic hazard potential classification assessment must also be conducted to evaluate
the damage that could occur if there were a
failure of a CCR surface impoundment.
Weekly inspections of CCR units must be
completed, and monthly monitoring of instrumentation is required. In addition, some surface
impoundments must have emergency action
plans developed to detail actions to be taken to
protect communities in the event that there is an
issue with the structural safety of the unit.
To protect groundwater, the EPA established provisions requiring owners and operators to install a system of monitoring wells and
specified procedures for sampling the wells
and analyzing the data to detect the presence
of hazardous constituents. If hazardous constituents exceed groundwater protection standards, immediate corrective actions must be
implemented to clean up the contamination
caused by the unit. If the unit is an unlined
surface impoundment, owners and operators
must begin the closure process.
Five location restrictions are established
by the rule to ensure appropriate siting of
landfills and surface impoundments. Specifically, the location criteria include restrictions
relating to placement of CCR above the uppermost aquifer, in wetlands, in fault areas, in
seismic impact zones, and in unstable areas.
All new landfills, new surface impoundments, and lateral expansions must have a
composite liner, which is a liner system consisting of two componentsa geomembrane
and a two-foot layer of compacted soil
installed in direct and uniform contact with
one another. In addition, new landfills are
required to operate with a leachate collection
and removal system designed to remove excess leachate that may accumulate on top of
the composite liner.
Although existing CCR landfills are not
required to close or retrofit with a composite liner and a leachate collection and removal system, they must meet all applicable
groundwater monitoring and corrective

tion criteria to promptly address any groundwater releases.

The requirements mentioned here are not
all-inclusive. The rule should be studied in its
entirety to fully understand all of its provisions, including additional operating criteria, closure and postclosure requirements,
and recordkeeping, notification, and Internet
posting requirements, which have not been
detailed in this article.

One Solution Does Not Fit All

Although it would be nice to take a cookie-cutter approach and simply do what others have
been doing successfully, it is unlikely that you
can merely copy your neighbor. Kent Nilsson,
PE, a consulting engineer for TRC Companies
Inc.a national engineering, consulting, and
construction management firmtold POWER
that every facility is different. But that doesnt
mean you cant learn from and utilize the best
practices developed by others.
Nilsson offered three Habits of Highly
Effective CCR Managers. He said effective
managers do the following:

They understand that CCR materials have

some unique physical properties that can have
significant effects on constructability and on
project schedules. For example, the properties
can include low hydraulic conductivity and
low strength in an unconsolidated condition,
which must be factored into plans.
They secure critical resources well in advance of the proposed construction activity.
For example, some utilities are having difficulty procuring construction materials
such as geosynthetic liners, crushed stone,
and topsoiland finding qualified drilling
contractors for the installation of wellmonitoring systems. Locking up scarce
items before they are needed can prevent
headaches and avoid project delays.
They recognize the tremendous value offered
by pilot studies or field trials of proposed
construction methods. For example, evaluating material management and dewatering op-

POWER June 2016

1. In-place closure/consolidation. There are definite cost advantages to closing coal
ash impoundments in place, but there may also be some added long-term risk. This diagram
shows the sequence of actions needed when choosing the in-place closure option. Source: TRC
Companies Inc.

2. Liquefaction. Unconsolidated coal

combustion residuals can turn quickly from solids into liquids. Courtesy: TRC Companies Inc.

Dispositional delta at
discharge location

Standing water



Current conditions
Perimeter ditch for

(to be removed


Affected soil to
be removed
Erosion layer (topsoil)

Berm fill used

for cover

in. gr

Infiltration layer (geomembrane or clay)

3% m


In-place closure/consolidation

tions (such as testing traditional dewatering

and mechanical excavation versus hydraulic
dredging), placement of bridge fills over soft
CCR materials, handling of effluent discharge waters, and construction of treatment
wetlands can all provide valuable information
in advance of full implementation.
Site-specific considerations, such as geographic setting, geologic conditions, CCR
characteristics, site layout, plant operations,
and community involvement, can all come
into play when deciding on a game plan. While
the most effective method will be unique to
each site, the ideal solution will usually result
in the following conditions being met:

It is fully compliant with the CCR rule.

It is protective of human health and the environment.
It is cost effective.
It allows beneficial use.
It requires minimal disruption to existing

Beneficial Use and Onsite Disposal

The final rule provides a definition of beneficial use to distinguish between beneficial
use and disposal. The definition essentially
states that the CCR must provide a functional
benefit; must substitute for the use of a virgin material; and must meet relevant product
specifications, regulatory standards, or design
standards. There are additional requirements
for unencapsulated use of CCR, but we wont
get into those here.
The reason that understanding beneficial
use is so important is that the rule does not
regulate CCR that are beneficially used.
However, Nilsson said beneficial reuse of
CCR materials removed from surface im-

poundments appears to be limited to a smaller percentage of facilities now.

Haul distances, end-user markets, processing facility capacities, and public sentiment
most often govern the feasibility of reuse.
Even though CCR material makes a competent structural fill and has been used in mass
earthwork projects, such as airport runway

expansions and mine reclamations, the public

seems to be increasingly wary of such uses,
even when protective liners and leachate collection systems are put into place.
Absent any mining of CCR materials from
existing disposal units for beneficial reuse,
Nilsson said generators preferred solution
seems to be storage/disposal of CCR materials on plant properties. For in-place closures,
some CCR material can be removed from existing impoundments and used as a structural
fill for a portion of the units closure or to
close adjacent impoundments (Figure 1).

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June 2016 POWER



The Cost of Failure

On February 2, 2014, a break in a stormwater pipe beneath an ash basin at Duke
Energys retired Dan River Steam Station
caused a release of ash and ash basin water
into the Dan River. Duke Energy estimated
that up to 39,000 tons of ash and as much
as 27 million gallons of basin water were
released into the river from the Dan River
station. A permanent plug was installed in
the stormwater pipe six days later, stopping
the release of materials into the river, but it
didnt stop the bleeding that Duke Energy
has experienced as a result.
The Dan River release caused a spotlight
to shine on ash-handling practices at all of
the companys coal-fired facilities, bringing problems to light that appear to be
indicative of a more widespread systemic
failure. Duke Energy has incurred many coal
ashrelated charges since the Dan River incident, including fines and penalties, litigation expenses, and remediation costs. The
data that follows were gleaned from Duke
Energys 2015 Annual Report, various press
releases, and other publicly available court
documents. The company did not respond
to a request for comment.
Fines and Penalties. Following the Dan
River incident, not only has the North Carolina Department of Environmental Quality
(NCDEQ) taken a much closer look at environmental practices at Duke Energys coalfired facilities, but the U.S. Department of
Justice Environmental Crimes section and
the U.S. Attorneys for the Eastern, Middle,
and Western Districts of North Carolina also
have initiated investigations.
In February 2015, the NCDEQ issued a
notice to Duke Energy for alleged groundwater violations at its Asheville plant. The
following month, the NCDEQ issued a civil
penalty of approximately $25 million for
environmental damages related to groundwater contamination at the L.V. Sutton
Plant. Duke Energy ended up settling both
cases as part of a $7 million agreement
with the NCDEQ that also forced accelerated remediation actions at four North Carolina plants. In February 2016, the NCDEQ
assessed a penalty of about $6.8 million
related to Dan River stations stormwater
pipes and associated discharges, but Duke
Energy, while accepting responsibility, has
appealed the fairness of that charge.


The biggest penalty to date came in the

form of a plea agreement between Duke Energy and the Justice Department and U.S.
Attorneys. In February 2015, Duke Energy
pleaded guilty to a total of nine misdemeanor Clean Water Act violations related
to violations at its Asheville Steam Electric
Generating Plant, Cape Fear Steam Electric
Plant, Dan River Steam Station, H.F. Lee
Steam Electric Plant, and Riverbend Steam
Station. The company paid approximately
$68 million in fines and restitution and $34
million for community service and mitigation, in addition to other less-costly provisions specified in the deal.
The plea agreements do not cover pending civil claims, however. In Duke Energys
financial statement notes, it says, Other
costs related to the Dan River release, including pending or future state or federal
civil enforcement proceedings, future regulatory directives, natural resources damages, additional pending litigation, future
claims or litigation and long-term environmental impact costs, cannot be reasonably
estimated at this time.
Shareholder Claims. Litigation is not
limited to government entities; shareholders are also in on the action. Five shareholder derivative lawsuits were filed in
Delaware Chancery Court related not only
to the release at Dan River, but also to the
general management of Duke Energys ash
basins. A shareholder filed a similar complaint in North Carolina state court.
The five Delaware suits have been consolidated into a single proceeding, alleging Duke Energy defendants breached their
fiduciary duties by failing to adequately
oversee the companys ash basins and that
the breaches may have contributed to the
Dan River incident. The lawsuit seeks both
injunctive relief against Duke Energy and
restitution from the defendants. Rulings
remain pending in both the Delaware and
North Carolina cases.
Coal Ash Remediation. The biggest expense for Duke Energy has been the cost of
managing its coal ash. The company incurred
about $24 million in expenses related to the
Dan River release during 2014, including some
money spent on remediation work identified
by the Environmental Protection Agency.
Duke Energy is responsible for 21 ponds at

3. Fully lined coal ash landfill. In

April 2015, Duke Energy announced plans to
construct fully lined onsite landfills, similar
to the design shown here, at its Dan River
Steam Station and its L.V. Sutton Plant. Courtesy: Duke Energy

seven retired sites, as well as 12 additional

ponds at seven active sites. Of course, work
would have been required with or without
the Dan River spill, but the companys proposed actions have been scrutinized and
questioned to a much greater extent as a
result of that incident.
Paul Newton, Duke Energys North Carolina state president, spoke before the North
Carolina Joint Environmental Review Commission in April 2014. He explained some of
the companys plans and the costs associated with its various options.
At the time, Duke Energy had proposed
excavating and relocating ash at some
plants, implementing hybrid cap-in-place
closure approaches at others, and converting to dry bottom ash handling and dry fly
ash systems at operating sites. Newton said
the costs for those plans were estimated to
be about $2 billion to $2.5 billion.
Newton noted that costs would increase
another $4 billion to $5.5 billion if an excavate and remove approach were adopted
across the companys entire North Carolina coal fleet. He suggested that doing so
would also take between 20 and 30 years,
because it would require siting, permitting, and constructing new lined landfills
or structural fills (Figure 3).
Costs could escalate another $1 billion
to $2 billion, Newton said, if the company were required to convert to all dry ash
handling systems rather than transporting
bottom ash wet and then storing it dry. In
a worst case cost scenario, implementing
all of these actions would cost Duke Energy
roughly $10 billion, which does not include
costs associated with financing, inflation,
and increases in operating and maintenance expenses.

POWER June 2016

4. Ash excavation. Removing coal ash from unlined storage sites and disposing of it in

6. Multiple cells form the whole.

fully lined landfills is costly, but less risky in the long term, for generators. Courtesy: TRC Companies Inc.

Wetlands can be designed in a variety of system types and configurations to meet specific
wastewater needs. Every site is unique, and the
design of a constructed wetland system is generally site-specific. Courtesy: Matt Huddleston

5. A natural filter. Constructed wetlands are treatment systems that use natural processes involving wetland vegetation, soils, and their associated microbial assemblages to improve
water quality. Courtesy: Matt Huddleston

Storing or disposing of material onsite

reduces the volume of haul trucks on public
highways, which is an advantage because it
eliminates the potential for truck accidents
or spills after a truck leaves the site. It also
avoids owners exposure to risk of comingling CCR with waste from other entities,
which can happen at a commercial solid
waste disposal facility.
Nilsson said some owners of existing CCR
impoundments dont fully appreciate drainage limitations of the materials. As a result,
they dont allow sufficient time or commit
sufficient resources to the implementation of
dewatering practices.
Ash commonly has a hydraulic conductivity ranging between 104 cm/sec and 105 cm/
sec (0.03 ft/day to 0.3 ft/day). Dewatering
ash by gravity flow can only be accelerated
by increasing the hydraulic gradient or by
shortening the length of the drainage path.
Ash that is not drained will typically be weak
and unstable.
One unique property of unconsolidated
CCR is its susceptibility to liquefaction when
subjected to vibration. Under these conditions,
the CCR can turn instantly from a solid into a
liquid, making it impossible to grade or support the load of construction equipment (Figure 2). A project can immediately fall behind

June 2016 POWER

schedule if sufficient time and dewatering infrastructure arent included in the plan.
While future disposal in a lined onsite
landfill can be a cost-effective solution (see
sidebar), permitting a new facility can be
problematic if a plant is in close proximity
to large bodies of surface water or has insufficient depth to groundwater.

An Environmental Lawyers
According to Frank Holleman, senior attorney for the Southern Environmental Law
Center (SELC)a nonprofit that uses the
law to, in its words, stop environmental
abusesthe EPAs rule is not the final
word, but an essential floor of protection.
Holleman told POWER that a utility can potentially comply with the CCR rule, while
still violating the federal Clean Water Act,
the federal RCRA statute, state antipollution laws, and other legal protections.
The only way for a utility to protect itself,
its executives, board members, employees,
and shareholders from civil and criminal liability, financial risk, and serious reputational
harm is to move its coal ash from wet unlined
waterfront storage to dry, lined storage away
from waterways and separated from groundwater, Holleman said.

Holleman pointed to a couple of South Carolina companies that he said are doing things
right. First he noted that Santee Cooper is
removing all coal ash from its unlined waterfront coal ash storage sites (Figure 4). He said
the company has permitted and constructed a
Class 3 (lined) industrial landfill at its Cross
facility and is permitting another Class 3 landfill at its Winyah Generating Station. Santee
Cooper has partnered with The SEFA Group
Inc. for the construction of a $40 million plant
in Georgetown County to reprocess ponded
ash into concrete, and it has contracts with
others for concrete recycling.
South Carolina Electric and Gas Co. is
taking similar steps. It has a lined Class 3
industrial landfill at its Wateree Station near
Columbia and is removing all the ash from
an unlined pit near the Wateree River. Since
it began removal about four years ago, arsenic groundwater contamination has declined
by about 90%. According to Holleman, the
removal is also eliminating a threat to the
Congaree National Park, which is three miles
downstream from the site.
At the other end of the spectrum, Holleman suggested that the Tennessee Valley
Authority (TVA) has not learned from the
2008 coal ash spill at its Kingston facility
arguably the worst coal ash disaster in U.S.
history. SELC filed litigation on behalf of
conservation groups in 2015 alleging that
the TVA is violating antipollution laws in
the way it stores coal ash at its Gallatin facility near Nashville. The TVA recently responded with a proposal, but Holleman said
the plan leaves the ash where it is, which
SELC claims includes areas of karst geology inundated with sinkholes.
Scott Brooks, TVA public relations specialist, told POWER that the TVA has committed to spending $1 billion to $2 billion to

convert all of its CCR storage from wet to dry
systems. It has also spent another $1 billion
to restore the area around the Kingston spill
to conditions that it claims are as good or
better than before the spill.
We appreciate that SELC has its own
agenda that it is seeking to advance here,
but TVA has a public mission that guides its
activities. Its responsibilities have been set
by Congress and are much broader than the
limited focus that SELC applies to itself,
Brooks said.

The TVA is in the process of preparing an

Environmental Impact Statement to help it
decide how to close coal ash impoundments
and how to comply with the EPAs CCR rule.
It has yet to decide what methods to use.
In its CCR Rule, EPA encouraged utilities to close impoundments quickly because
it found that dewatering ponds significantly
reduced the risk of structural failures as well
as groundwater contamination. That is exactly what TVA is proposing to do at 10 of its
impoundments, Brooks said.




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future of solar and distributed
energy integration.



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Constructed Wetlands
Much of the focus in CCR management
has centered on the handling of the solids.
However, Nilsson said long-term management must also include handling and treating
leachate from disposal cells and discharges
from low-volume waste ponds.
The quality of the effluent is expected to be
increasingly scrutinized even while current discharge limits are being met, Nilsson said.
The EPAs Effluent Limitations Guidelines, which became effective on January 4,
2016, tighten current discharge limits and
force more rigorous treatment for some waste
streams. Long-term treatment can be energyintensive and costly over the life of a facility.
Nilsson suggested that passive treatment, using a constructed wetlands system (Figures 5
and 6), could provide a highly effective alternative in certain situations.
Although a constructed wetlands treatment
system is a relatively new technology, its effectiveness in treating CCR contact water has
been demonstrated for at least 15 years. It offers the following benefits:





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With effluent-specific design of substrate,

retention time, and vegetation, constructed
wetlands have been effective in removing
metals and constituents common to CCR
Constructed wetlands do not require periodic harvesting and disposal of the vegetation because of the oxidation/reduction
reactions at the root zone. The vegetation
continues to accrue over the life of the
system, providing a secondary benefit of
carbon sequestration.
With the appropriate topography and hydraulic gradient, constructed wetlands can
be designed as passive treatment systems.
Frequently, such systems can be constructed
within the footprint of a former impoundment
that has been clean-closed and vacated.
In some cases, constructed wetlands can serve
to provide credits for wetlands banking.

Even More Restrictions Ahead?

It is worth noting that on April 18, 2016, the EPA
asked the U.S. Court of Appeals for the D.C.
Circuit to remand certain provisions of the final
CCR rule to the EPA for further proceedings.
A couple of the more prominent changes that
could result include adding boron to the list of
constituents that trigger assessment monitoring
and corrective action, and removal of an exemption from certain post-closure requirements for
inactive surface impoundments closed before
April 17, 2018. Visit for
updates on court decisions and news of changes
to the final rule.

Aaron Larson is a POWER associate


POWER June 2016


Risk-Based NERC Compliance:

Assessing Risk to Bulk Power
System Generation
Ensuring the reliability of the power system is the responsibility of many industry participants. In this POWER exclusive, one regional reliability entity, the Midwest Reliability Organization, explains its role.
Richard Burt

n response to the 2003 Blackoutwhich

affected parts of the U.S. Northeast and
Midwest, plus portions of the Canadian
province of Ontariothe U.S. Congress mandated adoption of reliability standards for the
bulk power system (BPS). The North American Electric Reliability Corp. (NERC) is responsible for coordinating the development of
those mandatory reliability standards (written
by industry experts), which become effective
with approval from the Federal Energy Regulatory Commission (FERC) in the U.S. and
authorization in Canada under arrangements
with each province. NERC has contracted with
Midwest Reliability Organization (MRO) and
seven other regional entities to be responsible
for compliance, monitoring, and enforcement
of the reliability standards.

Development of a Risk-Based
When MRO began enforcing mandatory reliability standards in 2007, every instance of
noncompliance, no matter what the risk was
to reliable operations of the BPS, required a
formal enforcement proceeding with a filing
to FERC in the U.S. We literally made a federal case out of everything.
In addition, each year a subset of the more
than 500 requirements in the reliability standards was identified to be actively monitored
during the year across North America. This
meant that all entities performing similar
functions, regardless of size or uniqueness,
would be monitored on the same set of requirements each year. A 5,000-MW generator operator (GOP) control center would be
monitored for the same requirements as one
controlling 100 MW with regard to control
system infrastructure and security. A large
generator owner (GO) with a fleet of baseload generation facilities and ownership of
generator lead lines out to the transmission
network would be monitored for the same
requirements as a wind farm with no power
delivery assets.

June 2016 POWER

Today our work is informed by risk. We

have a way to process minimal-risk issues
without the formality of an enforcement proceeding. Entities are now eligible, based on
past performance, to self-log minimal-risk
items. Of course, the entities have to share a
technically valid view of risk with MROa
cornerstone of self-logging.
The greatest challenge through this transition, from a technical standpoint, is MRO
developing compliance oversight based on
riskthe ability to individually tailor compliance oversight for each entity, based on
a technical analysis of its unique inherent
risks, as well as regional and continent-wide
risks (Figure 1).
Effective risk-based oversight starts with
the identification of risks. We have both
emerging risks, like the changing generation
resource mix (Figure 2) and the asymmetrical threats of cyberattacks, in addition to understood risks, such as correct facility ratings
and proper coordination between those responsible for transmission and those responsible for generation. Now NERC, through
its stakeholder structure, annually produces
a list of key continent-wide risks to be addressed. A few of this years continent-wide
risks are:

Due to regional differences, as well as the

fact that the North American grid is composed of four distinct interconnections, MRO
performs a similar exercise to identify risks
that are unique to the region or the Eastern
Interconnection. This analysis is done using
region-specific data such as root causes of
power system events or major regional system infrastructure changes, and it is informed
by trends identified through compliance
monitoring. Examples of regional risks that
were identified by MRO for 2016 include:

Cybersecurity protection of critical infrastructure, such as generation control

Maintenance and management of assets,

such as facility ratings and protection system maintenance.

Planning and system analysis, with a focus
on capacity emergencies and the changing
generation resource mix that is occurring
on the grid.

Implementation of facility ratings

ensuring that the maximum power flow
through a facility does not violate applicable equipment ratings. For example, a
generator should not be sized larger than
its associated generator step-up (GSU)
transformer, because at maximum generation output, the GSU would become
Telecommunications infrastructure between primary and backup control centers.
Changes in planning coordinator and regional transmission organization (RTO)
footprints within MRO.

1. Layers of risks. Regional reliability organizations assess risk for individual entitles based
on a combination of continental, regional, and entity-specific factors. Courtesy: Midwest Reliability Organization (MRO)

Continent-wide risks

Regional risks
Entity risks


2. Changing resources = changing risks. The types of power system resources on
the grid, where they are located, their size, and other factors all affect individual risk profiles and
how those entities are handled by reliability organizations. Courtesy: MRO

Finally, in order to develop a customized

oversight plan for an individual entity, MRO
must analyze an entitys unique risks, informed by the knowledge of continent-wide
and regional risks.
Entity-specific risks are granular and
require detailed analysis of entity-specific
facilities, configurations, and the entitys
location on the grid. This work must be
performed by technical power system and
control system experts, using data such
as system one-lines, generation interconnection agreements, restoration plans, and
control system network diagrams. While
the continent-wide and regional risk assessments are typically annual exercises and
applicable to all entities, the entity-specific
risk assessment is unique and must be conducted for each individual entity.
If this process is done correctly, the 5,000MW GOP and the 100-MW GOP referenced
as examples earlier would not receive the
same oversight plan. Besides size, the GOPs
location on the grid is also likely different,
as are the neighbors it interacts with and the
depth of that interaction. One may be vertically integrated with transmission, while the
other may operate but not own its own facilities. Each entitys inherent risk is different,
and a risk-based regulator should regulate
them differently.

A Theoretical Example
Lets look at an example, starting with risks
and developing a customized oversight
plan for a fictitious entity, Techie Generation Co. (TGC).
TGC is a 2,000-MW GO and GOP (it

both owns and operates 2,000 MW of BPS

generation assets). With regard to generation, the continent-wide risk examples
listed earlier are all applicable. TGC operates generation, so it likely has a generation control system (a NERC-identified
cybersecurity risk). TGC owns generation,
so it is responsible for developing facility ratings and protecting those generation facilities from faults (NERCs focus
on maintenance and management of as-

Is any of TGCs generation blackstart?

TGCs fleet is 2,000 MW, but how big is
each unit, and where is each located on the
Who owns and operates the transmission
system that TGC interconnects to, and
what is the nature of that relationship? Is
TGC also a transmission owner or a transmission operator?
Are there any remedial action schemes
(RAS), such as automatic generation runback, in place? If so, how does the entire
RAS work, and what is TGCs role in
What does the network architecture of
TGCs generation control system look
like? How does it receive setpoints for its
generation facilities? Is the control system
segregated from other internal and external networks?

The answers to these questions allow a

Regional Entity like MRO to make determinations, based on entity-specific risk, as to
which standards and requirements are most
impactful to this entity and should be the
focus of risk-based regulatory oversight. Additionally, a decision can be made as to the
extent of applicability of continent-wide and
regional risks to this entity.
The end result of answering these technical questions would likely culminate in an
oversight plan partially represented as:

CIP-002-5 (Identification of BES Cyber

Assets): Based upon the continent-wide

Entity-specific risks are granular and require detailed analysis of entity-specific

facilities, configurations, and the entitys
location on the grid.
sets). And, because TGC owns and operates generation, it likely would have some
role in responding to capacity emergencies
(falling under NERCs focus on planning
and system analysis).
If TGC is located in the MRO Region, a few
additional risks would be highlighted based on
MROs identified regional risks, such as facility ratings and telecommunications infrastructure for backup control centers.
Taking the continent-wide and regional
risks into consideration, TGC would then be
analyzed based upon its specific facilities and
configurations, a few of which would be:

risk of cybersecurity, the fact that the

new Critical Infrastructure Protection Version 5 (CIP V5) standards are becoming
enforceable in 2016 with new criteria for
identifying cyber assets, as well as the size
of this entity (2,000 MW) being such that
it may have a generation control system
classified as Medium Impact, a review
of TGCs process for identification of BES
[bulk electric system] Cyber Assets is appropriate and warranted.
FAC-008-3 (Facility Ratings): Based upon
the continent-wide risk of maintenance
and management of assets, as well as the

POWER June 2016

MRO regional risk of facility ratings, a
review of TGCs facility ratings would be
part of its oversight plan.

Risk Assessments vs. Compliance

Oversight Tools
Its important to differentiate between the
output of risk assessments and the use of
compliance oversight tools. While the above
standards have been identified as important
for TGC based upon the continent-wide, regional, and entity-specific risks, a Regional
Entity may perform oversight utilizing different compliance toolsself-certifications,
spot checks, and audits.
CIP-002-5 is a good example of this. Because 2016 marks the implementation of the
CIP V5 standards, the identification of cyber
assets subject to the technical CIP requirements was identified as a continent-wide
risk, which prompted the decision to have
all Regional Entities gather and analyze this
data (through data requests and, in some cases, guided self-certifications) in 2016. From
a risk management standpoint, it wouldnt
make sense to wait until the next time an entity is audited to find out if it had issues with
this foundational standard.
Similarly, facility ratings were identi-

fied as an issue in MROs region in recent

years. MRO responded to this regional
risk by issuing a guided self-certification
of FAC-008-3 for entities within the MRO
region, based upon this regional trend.
MRO is not using the audit tool to evaluate either of these risks, but both CIP-002
and FAC-008 are being evaluated using a
risk-based approach to compliance that is
both timely and appropriately focused on
specific risks.
Characteristics such as performance history or internal controls can also factor into
the Regional Entitys selection of compliance
oversight tools to use for specific entities, or
even subsets of compliance standards for
a single entity. Just because a standard has
been identified as material to an entity does
not mean that it will be in an entitys audit
scope, or that it will receive any oversight; it
depends on the strength of the entitys internal controls or management practices, and on
whether a region can rely upon the entitys
internal controls to the point of not having to
perform oversight (or performing less oversight), even in an area that presents risk to
the BPS.
The inherent risk doesnt necessarily
change, but the risk-based oversight plan

adjusts to individual facts and circumstances so that oversight is appropriate and


Customized Oversight
The development of customized oversight
plans is performed using analysis of continent-wide risks, regional risks, and entityspecific risks, with a relationship between
those risks and the standards selected for
oversight. The next step in the evolution of
risk-based compliance monitoring and enforcement is consideration of the timing and
frequency of oversight and selection of oversight tools based on risk.
That 5,000-MW GOP might need a visit
every year (for a smaller audit focused in a
certain area), while the 100-MW GOP might
be able to have its oversight completely handled through self-certifications. It all depends
on risk and performance.

Richard Burt is vice president of risk

assessment, mitigation, and standards for
the Midwest Reliability Organization. Relying on his practical engineering experience at a generation and transmission
cooperative, he has been instrumental in
helping develop the risk-based approach
at NERC and the Regional Entities.

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June 2016 POWER



Is There a Market for Small

Modular Reactors?
The nuclear industry has been expecting big things from small modular reactors (SMRs) for a long time, but to date, no SMRs have reached commercial construction phase.That may change soon. Utah Associated Municipal
Power Systems has a plan to deploy NuScale Powers Integral Pressurized
Water Reactor at a site in Idaho. Will others follow suit?
Aaron Larson

here are currently 64 nuclear reactors

under construction around the world,
according to the International Atomic
Energy Agency. Most are large units with
capacities greater than 1,000 MW, such as
Westinghouses AP1000 (1,110 MW), KEPCOs APR1400 (1,400 MW), and AREVAs
EPR (1,600 MW) designs.
Conventional wisdom suggests that bigger is better; any economist can tell you
about the benefits of economies of scale.
Its not particularly surprising that factories
realize cost advantages with increased size,
output, or scale of operation. As fixed costs
are averaged out over greater units of output, the cost per unit decreases. Operational
efficiencies can also be achieved in many
cases, which lead to lower variable costs per
unit as well.

The Nuclear Scaling Effect

But does conventional wisdom apply to
nuclear power? Tony Roulstone, a nuclear
energy consultant and director of UK-based
Bracchium Ltd., doesnt think so. Roulstone,
speaking at the International SMR and Advanced Reactor Summit in Atlanta, Ga., in
mid-April (POWER was a media partner for
the Nuclear Energy Insiderhosted event),
said that when you actually look at the data
from large reactors, the scaling factors just
dont work out.
If you have a scaling factor of 0.6, if you
have a 1% increase in scale, you would expect 0.65% fall in the unit costs. But in fact,
what you find is the 1% increase in size also
has an increase in build schedule and costs
associated with that of 0.78%, and you net
the two off and you find, instead of getting
falling costs as the size goes up, you get an
increase in costs of 0.13%, Roulstone said,
citing a study conducted by R. Cantor and
J. Hewlett.
In other words, the scaling method that is
the norm in the nuclear industrythe driver

behind the trend toward larger and larger reactor designsis flawed. The truth is, as you
get bigger reactors, theyre more complex,
they take longer to build, and the benefits of
scaling are defeated.
When you have a complex sitemost
of the cost for nuclear reactors is site
workit doesnt work, said Roulstone.
The scaling does apply for factory-designed products, but theres no scaling effect for site space work.

Smaller = Faster

mechanical completion in 51 months. Completion of discrete module systems is said

to allow earlier electricity generation, as the
first modules to be constructed can begin
operating while later modules are still being
installed. Factory manufacturing and modu-

1. NuScale module. The standard

design for a NuScale small modular reactor
(SMR) facility includes twelve 50-MW modules, like the one shown here, for a total station capacity of 600 MW. Courtesy: NuScale

Time is not on your side when youre building a nuclear power plant. The longer a plant
takes to build, the more it costs, and the longer owners have to pay interest on the money
before the facility starts producing power. In
the case of large nuclear construction projects, a history of drawn-out schedules and
incessant delays are two of the biggest factors that keep ground from being broken on
new plants.
Clients really like short schedules,
Roulstone said. They like a short construction period because they get to revenue
more quickly. If you can get to revenue in
three years, thats great. You dont want 10
and 12 years.
And thats where the small modular reactor (SMR) comes into play. There are several
designs in various states of development (see
Small Modular Reactors Speaking in Foreign Tongues in the January 2015 issue and
online at, but the one
that seems to be making the most progress
in the U.S. is NuScale Powers Integral Pressurized Water Reactor (IPWR, see NuScale
Puts Single-Minded Focus on Small Modular
Reactor in the October 2013 issue and at
NuScale, majority-owned by Fluor Corp.,
estimates that a plant designed with 12 of its
modules (Figure 1)a 600-MW facility
could be constructed from mobilization to

POWER June 2016


TVA Takes Step Toward SMR Future

By the time this story is published, it is
expected that the Tennessee Valley Authority (TVA) will have submitted an Early Site
Permit (ESP) application for two or more
small modular reactor (SMR) modules with
capacity of up to 800 MW to be sited on
its Clinch River location in eastern Tennessee. That step would bring the promise of
a Clinch River nuclear plantwhich has
been contemplated since the 1970s, when
a breeder reactor was proposedone step
closer to fruition.
Were considering small modular reactors driven by a need for a cleaner, diversified electricity generation portfolio, said
Dan Stout, TVAs senior manager for SMRs,
speaking at a mid-April SMR event in Atlanta. We see them as more flexible in terms
of size, location, and operations.
For example, Stout said theres value in
having the ability to construct five 400-MW
units at different locations rather than one
large 2,000-MW unit at a single location.
Youre talking about the ability to deploy
them in a more diversified manner, he said.
SMR designs also enable smaller emergency planning zones (EPZs), which allows
construction closer to population centers.
Stout said that could allow an SMR to repower a coal plant that has had a town
grow up around it.
Operationally speaking, not only do SMRs
offer enhanced nuclear safety and security,
but also, they can be designed to load follow and work compatibly with renewables.
Although load following isnt necessarily something that most power generators

would plan to do with an SMRthe economics are more favorable when you can
operate at full powerit offers flexibility.
Who can predict what the grid is going to look like 60 years from today, Stout
asked. If you have that capability to load
follow, that may be very valuable.
The Clinch River location includes 1,200
acres on a peninsula (Figure 2) a few miles
from the Oak Ridge National Laboratory.
The site is owned and controlled by the
TVA. The Department of Energy (DOE) is its
immediate neighbor and has expressed interest in being a power customer.
The location offers several benefits, including the existence of basic infrastructure, such as easy access to 500 kV and 161
kV transmission lines, good roads, storm
water retention ponds, and a community in
Oak Ridge that has been very supportive of
nuclear energy and offers an abundant and
skilled workforce to draw from.
The TVA is using a Plant Parameter Envelope approach to complete its ESP application. What that means is that it has
selected four SMR design options and set
bounding parameters that encompass the
most restrictive aspects of all of the designs. The designs included in its evaluation are the BWXT mPower SMR (developed
by BWX Technologies Inc. and Bechtel Power Corp.), Holtec Internationals SMR-160,
NuScale Powers Integral Pressurized Water
Reactor, and Westinghouses SMR.
Stout said the TVA is working with the
DOE directly through an interagency agreement, and the DOE is reimbursing up to

larization reduces onsite construction time,

financial risk, and financing costs, according
to the company.
Theres much greater certainty about the
schedule if its short, Roulstone said, speaking about SMRs in general. Its much more
controllable. . . . Short schedules are important, he said.

mountain West. Its membership includes 45

community-owned power systems in Arizona, California, Idaho, Nevada, New Mexico,
Oregon, Utah, and Wyoming.
As it stands now, UAMPSs generation
portfolio is largely fossil-based. It includes
portions of Hunter Station Unit 2, San Juan
Station Unit 4, and Intermountain Power
Projectall coal-fired plantsas well as
the natural gasfired Nebo Power Station,
a combined cycle plant. UAMPS has other
projects, such as a 57.6-MW wind farm
near Idaho Falls that it developed, constructed, and later sold to a private investor
after entering into a power purchase agreement for the entire output, but its pursuit of
an SMR facilityits Carbon Free Power
Projectis the boldest undertaking in its

Taking a Seat at the Nuclear Table

Teaming with NuScale, on what could become the first deployment of its SMR technology, are Utah Associated Municipal
Power Systems (UAMPS) and Energy Northwest. UAMPS is a political subdivision of the
state of Utah that provides comprehensive
wholesale electricity, on a nonprofit basis,
to its members located throughout the Inter-

June 2016 POWER

2. Clinch River site. The Tennessee

Valley Authority has had plans for a nuclear
plant on the peninsula created by the meandering Clinch River since the 1970s. Courtesy: Google Maps

Imagery 2016 Google, Map data 2016 Google

1000 ft

50% of TVAs costs. The cost share covers

the ESP and future Nuclear Regulatory Commission (NRC) combined license application
work. It is good through 2020.
The TVAs EPZ approach is fairly unique
too. It is pursuing a dose-based zone rather
than the 10-mile one-size-fits-all method.
At the EPZ boundary, were going to protect public health and safety by ensuring
that their dose from a design basis accident is one rem or less, and that protects
the public at the EPZ boundary as good
or better than it does 10 miles from a big
plant, Stout said.
When this story went to press, the TVA
was expected to submit its ESP application
by May 12. The NRC acceptance review was
expected to take between two and three
months. Stout said the TVA would support
the NRC review in any way possible. If the
NRC accepts the application, it would then
be docketed and the full review would commence. That process is expected to take up
to 30 months.

36-year history.
So what led a relatively small, wholesale
power provider that supplies a group of municipalities to toss its hat into the nuclear ring
while other supposedly savvy companies
have been content to sit on the sidelines? Is
this the result of naivet or inspired vision?
Should other companies (see sidebar) be considering the SMR option?
Eric Larsen, UAMPS board member from
Fillmore City, Utah, provided an overview
of the project review process in a UAMPSproduced video. He said, New projects are
brought to the UAMPS board. Presentations
are made. The staff does investigations that
help us to understand what the project is all
about. A complete rundown of every aspect
of the project is brought out. If it looks like

3. NuScale control room simulator. With a 12-module facility, the NuScale

5. A petite footprint. The 600-MW NuScale design only requires 34.5 acres to accommodate the fenced-in protected area. Courtesy: NuScale Power

design includes 12 identical operating and

monitoring stations in a single power plant
control room, like the simulator shown here
in Corvallis, Ore., which has been operational
since May 2012. Courtesy: NuScale Power

4. An integral package. Each NuScale

power module is installed below-grade in a
seismically robust, steel-lined, concrete pool.
Courtesy: NuScale Power

its going to be a good project, we will invest more energy, more time, get more staff
involvement. Sometimes the board gets involved in helping us to make decisions about
new projects, whether or not they will work
well for some or even all the members. As
new projects are looked at, not all members
will become involved because of the diversity of the board.
According to UAMPSs 2015 Annual Report, 32 of its 45 members had signed onto
the Carbon Free Power Project. However, its
two largest membersLower Valley Energy
(with roughly 27,500 customers and about
210 MW of peak demand) and City of St.
George (with roughly 28,700 customers and
about 188 MW of peak demand)had not
elected to participate. Regardless of that
fact, UAMPS believes its coal plants may
have to be replaced with carbon-free generation within the next 10 years, and it sees
SMR technology as the safe, stable, longterm solution.
For its part in the venture, Energy Northwest holds first right of offer to operate the
project (Figure 3). The company operates the
1,190-MW Columbia nuclear plant located
north of Richland, Wash., and welcomes the
opportunity to operate the first SMR plant in
the U.S.

Passive Safety Systems and

NuScale claims that its IPWR safely shuts

down and self-cools indefinitely with no operator action, no electrical power, and no additional water. The plants containment vessel
is submerged in an ultimate heat sink for core
cooling in a below-grade reactor pool structure, housed in a Seismic Category 1 reactor
building (Figure 4).
Safety was a huge selling point for us,
Doug Hunter, CEO of UAMPS, said during
the Atlanta event.
With no reactor coolant pumps (the nuclear
steam supply system is designed to operate
at full power using natural circulation due to
density differences for core coolant flow), a
small nuclear fuel inventory (roughly 5% of
the fuel contained in a 1,000-MW reactor),
and integrated reactor, steam generators, and
pressurizer (eliminating large primary piping), there is less to go wrong than in a large
conventional PWR. NuScales design only requires a handful of safety valves to be opened
in the event of an accident to actuate the emergency core cooling system. The safety valves
are designed to fail in their safe condition, that
is, following a loss power, they mechanically
realign to their required emergency position.
The other thing is theyre scalable, said
Hunter. Were a municipality. UAMPS as a
whole, were about 1,500 MW of load, but
I have some members that are a megawatt
of load.
Hunter said that having a dozen 50-MW
reactors, deployable as needed, would allow UAMPS to dice up the output into small
pieces and sell it to a variety of very small
utilities. He sees that as a big advantage.
He also said that funding an SMR project
is not as difficult as one might think. In
fact, according to Hunter, it is much easier
than building a new coal-fired power plant.
UAMPS has signed an agreement with Bank
of America Merrill Lynch and is also

ing with two other large national banks to

line up financing.

Looking Forward
In February, UAMPS and the Department of
Energy (DOE) entered into a use agreement
that allows UAMPS to explore certain locations for plant development on the Idaho National Laboratory (INL) site near Idaho Falls.
UAMPSs compliance strategy for meeting
National Environmental Policy Act requirements is to have the DOE conditionally agree
to future actions pending the Nuclear Regulatory Commission (NRC) completing its
permitting process.
There are essentially three areas being
considered on the INL site, but the ultimate
spot (Figure 5) wont be designated until after
the NRC completes the combined license application (COLA) approval process. UAMPS
has a cost-sharing cooperative agreement
with the DOE through NuScale to help pay
for the COLA development.
A look at UAMPSs preliminary schedule
shows a lot of work needs to be done before
the first SMR begins commercial operation.
Among the 2016 milestones are selecting
the site, finalizing the plant design, and submitting a design certification application to
the NRC.
UAMPS expects to submit its COLA in
2018. The following year, site mobilization
and preparation are scheduled to begin, and
UAMPS expects to place an order for the
modules. Assuming the NRC issues the COL
on schedule in 2021, the first safety concrete
pour is slated to take place that year. Ultimately, if all goes as planned, the first module could enter commercial operation by the
middle of 2024.

Aaron Larson is a POWER associate


POWER June 2016


Disruptive Digital Technologies

Are Key to Power Industrys Future
An industry rooted in tradition is facing unprecedented changes and challenges, and meeting them requires thinking big and embracing disruptive
technologies that will change how we think about electricity generation
and delivery. That was the message from the keynote session at ELECTRIC
POWER 2016.
Thomas W. Overton, JD

wo senior power sector executives

opened the 2016 ELECTRIC POWER
Conference & Exhibition in New Orleans April 19 with a message that generators
need to think big and embrace possibilities
of disruptive technologiesor risk being run
over on the road to the future.
Leo Denault, chairman and CEO of Entergy Corp. (Figure 1), delivered the opening keynote welcoming attendees to New
Orleans by recounting how his company
bounced back from the twin 2005 hurricanes Katrina and Rita, which collectively
wiped out 90,000 square miles of Entergy
service territory. Facing that challenge,
Denault said, taught us the true meaning
of resilience.

Not Just Repairs

But Denault stressed that Entergy did not
just seek to restore the status quo. Rather, the
utility took the disaster as an opportunity to
make a wide range of necessary upgrades to
its infrastructuremore than $1 billion to its
generation assets aloneand take a leap forward into becoming a utility of the future.
This goes beyond technology, he noted.
Denault recounted the many ways Entergy
has worked to help rebuild and support the
citys public education system, turning it
from one of the nations poorest performing
into a model.
That wasnt purely done out of altruism,
either. Denault pointed out that the power
sector as a whole is facing major challenges
in staffing as workers age and younger potential employees lack the skills, interest, or
both, in filling those slots. For that reason,
Entergy has taken a key role in supporting
technical education.
We believe the workforce of the future is
right here in our service territory, and thats
why we need to make the changes to help
them succeed.
Denault then pivoted toward other chal-

June 2016 POWER

lenges facing the power sector, noting the

enormous changes looming on the horizon,
such as potential demand from a growing
fleet of electric vehicles.
Meeting those challenges means embracing disruptive technologies. By doing that, he
said, Entergy will be able to give our customers the choices they need.
Think big, he said. Push the envelope.
Challenge the status quo.

firm Tesla, whose vehicles are digitized to a

degree that had never been attempted before.
This was a car that was designed very differently from what was being done in Detroit
at the time, Bolick said. He noted that while
GM is setting aside hundreds of millions of
dollars against potential recalls, Tesla was
able to avoid one simply by using an overthe-air software update.

Disrupting the Power Sector

The Digital Challenge
Scott Bolick, head of software strategy and
product management for GE Power Digital
(Figure 2), followed that exhortation with
an in-depth discussion of GEs digital power
initiative, which seeks to harness the power
of new digital technologies to create a smart,
flexible, multidirectional grid from generation to consumption.
GEs power sector customers, Bolick said,
are seeing increasing volatility at the same
time as they are trying to ensure safe, secure,
reliable, and sustainable generation. But this
is both a challenge and huge opportunity.
The Industrial Internet of Things, Bolick
said, represents a $1.3 trillion opportunity.
(For a primer on the Industrial Internet, see
Big Data and the Industrial Internet Meet
the Power Plant in the January 2016 issue or
online at
Bolick pointed to the examples of Amazon, Uber, and Airbnb, which all seriously
disrupted existing markets by leveraging data
that their competitors were not collecting.
Uber, Bolick noted, seized 28% of the Seattle
taxi market in its first two years of operation,
using only a smartphone app.
Bolick, who previously worked for software and data analytics firm SAP, explained
that SAP was so challenged by upstart competitors leveraging cloud computing that it
had no choice but to buy them outat a total
of $15 billion.
One more example was electric vehicle

Like it or not, changes like this are coming to

the power sector, Bolick said.
Its important to start planning your path
today, because the Industrial Internet will
bring changes we cant even imagine.
What will that look like? A mix of new
analytics, smart machines, big data, and a

1. Thinking big. Entergy Chairman and

CEO Leo Denault delivered the opening keynote to the ELECTRIC POWER 2016 Conference and Exhibition. Source: POWER


2. Digitizing power. Scott Bolick, head of software strategy and product management
for GE Power Digital, discusses the companys vision for the future at ELECTRIC POWER 2016.
Source: POWER

3. GEs digital web. Digitizing power generation assets allows a careful balance of plant
operational characteristics, enabling plant managers to get much closer to design potential.
Source: POWER/Tom Overton

ror what they experience as a consumer.

Lower Costs, Higher Generation

GE has already seen dividends in helping clients harness digital technology, Bolick said.
One customer in Europe reduced generation
costs by 50% and was consequently able to
run its plants 60% more than in the previous
two years.
He offered another example of a wind
farm built using modular designs and digital infrastructure. That combination resulted
in 20% higher generation. (See GE Announces Digital Power Plant as Component
of the Industrial Internet at
for more.)
Bolick described GEs vision for the digital power plant, which creates a digital twin
of the planta real-time model based on rich
data acquisition.
Its a model that has deep understanding
of the operational mechanics, deep understanding of the physics, and a model thats
updated second-by-second.
Though initially designed for GEs wind
turbines and gas turbines, it can also be
applied to steam plants. Using the digital
model can get the real one much closer to
its design potential.
GEs Predix platform can offer a mix of
asset performance management, operations
optimization, and business optimization, giving a plant more output, more flexibility,
driving down production costs (Figure 3),
Bolick said.

Better Positioning

new, more digitally aware workforce. Digital

technologies in the power sector will bring
greater visibility and insight and increasingly automated actions, he said.
Plenty of data is being collected, but right
now only 2% of all industrial plant data is
being used. That has to change, because
the data we have is just going to continue
to grow.

The power sector needs the next generation of workers, who have grown up
surrounded by digital technology, but attracting them means changing the way
things are done. This incoming workforce
is a different audience from previous generations, he said.
That audience is going to want the experience of their IT systems in the plant to

Outside the plant, digital communications

can help plants perform better in the marketplace. Bolick said that can mean getting 2%
to 3% more power into peak periods of the
market day-to-day. Digital models can also
help optimize maintenance protocols and
give plant managers insight into unplanned
outagesbefore they occur.
It should be able to help you across the
balance of plant, not just looking at a single
asset, he said. You can ensure that your assets are being optimized and being operated
in the most efficient and profitable manner.
In response to a question from the audience, Bolick stressed that cybersecurity is an
integral piece of the puzzle. Cybersecurity
is built into everything we do, he said. We
can do the anomaly detection as it occurs.
Bolick closed by warning that digital
technologies are coming whether generators
are ready for them or not. Its not a question
of whether digital is coming, he said. Its
a question of how fast were going to drive
down that road together.

Thomas W. Overton, JD is a POWER

associate editor.

POWER June 2016


Executive Roundtable Addresses

the New Face of the Power
The U.S. power sector is in a state of flux, grappling with cheap natural gas,
pressures to achieve fuel diversity, the integration of distributed energy
resources, and nearly nonexistent demand growth. Executives from power companies operating in different markets shared how they are tackling
these challenges.
Sonal Patel

he annual panel discussion by high-level leaders from diverse power companies is a cornerstone of the ELECTRIC
POWER Conference & Exhibition, and it has
been consistently emblematic of the state of
the U.S. power sector. It was no different this
year, at the 18th annual event in New Orleans, La.
Titled Industry MakeoverThe New Face
of the Power Industry, the Executive Roundtable discussion on April 19 was moderated by
Richard McMahon, vice president of energy
supply and finance for the Edison Electric Institute (EEI). Panelists were Phillip May, president and CEO of Entergy Louisiana; John
Trawick, senior vice president of commercial
operations and planning for Southern Co.; and
Clarence Hopf Jr., senior vice president and
chief commercial officer for the newly formed
Talen Energy (Figure 1).

subsidiary that serves about 1.06 million

customers in the state, the story is a little
different, said May. While Louisiana is generally seeing high industrial growth on the
Gulf Coastdriven by low natural gas and
feedstock pricesthe utility, like the rest of
the nation, is seeing flattened residential and
commercial customer usage that can be attributed to the effect of energy efficiency
and sufficiency, he said.
Even so, Entergy Louisiana is building
new generation to replace its aging fleet,
roughly half of which was built before 1995.
Those plants can now be replaced with
more efficient plants, May added, noting
a proclivity for natural gas combined cycle
gas turbines (CCGTs). So we are now embracing plants that may have heat rate close
to double in terms of efficiency of operation.
Theres a smaller number of people required
to manage that plant, and in terms of operat-

ing costs, more predictable operating costs.

The new plants can also be added with relatively little impact on a customer, he said.
Entergy Louisiana, along with Entergys
other utility operating companies, only
completed its integration with the Midcontinent Independent System Operator (MISO)
in December 2013. That move has saved billions of dollars, the company says, largely
attributable to MISOs organized power
markets that allow for more efficient commitment and dispatch of generating plants.
Savings also derive from the economies of
scale offered by a regional transmission
organization of MISOs size and MISOs
transmission cost allocation methodology, which equitably allocates the costs of
transmission projects to those receiving the
benefits from those projects.
Southern Co., a largely regulated business,
is supportive of customer energy efficiency

Flat Demand Growth

Change was the overarching theme of the discussion. The industry is in a state of flux, the
three panelists agreed, most of which could
be pegged on market shifts. Affecting all
markets uniformly is the nations slack electricity consumption: Total electricity sales
in 2015 fell 1.1% from the previous year,
marking the fifth time in the past eight years
that sales have fallen, the Energy Information Administration said in March. Declining
rates of electricity demand growthdespite
growth in the number of households and
growth in commercial building space
reflect a combination of factors, including
market saturation, increasing efficiency of
electricity-using equipment, a slowing rate of
economic growth, and the changing composition of the economy, which has reduced the
role of electricity-intensive manufacturing.
For Entergy Louisiana, Entergy Corp.s

June 2016 POWER

1. Executive Roundtable panelists at ELECTRIC POWER 2016. From left

to right: Richard McMahon, vice president of energy supply and finance for the Edison Electric
Institute; Phillip May, president and CEO of Entergy Louisiana; John Trawick, senior vice president of commercial operations and planning for Southern Co.; and Clarence Hopf Jr., senior vice
president and chief commercial officer for Talen Energy. Source: POWER


efforts, said Trawick, pointing out that the
company also has the added benefit of having a good diverse fleet of assets and the
ability to switch fuels in the real term based
on what gas and coal prices tell us.
But for Talen Energy, the dismal demand
outlook is more insidious, Hopf suggested.
The firm, one of the largest independent
power producers in the U.S., was established
only a year ago, in June 2015, as Pennsylvania-headquartered PPL Corp.s competitive
power generation business spun off and com-

bined with the competitive generation business owned by private equity firm Riverstone
Holdings LLC.
Talens president and CEO, Paul Farr, has
described the firm as a pure-play competitive energy company, noting that most of
its highly diverse merchant fleet of about
16.8 GW is primarily located in two of the
largest, most transparent, and most liquid
competitive markets in the U.S.PJM and
the Electric Reliability Council of Texas
(ERCOT). In Texas, a market that ERCOT

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chiefly serves, growth is soaring, but in the

Northeast, growth is being offset by subsidized resources such as energy efficiency and
combined heat and power plants, Hopf said.
Its not that we dont support those, but we
think they need to be evaluated on the same
level as other resources, he added.

Distributed Energy Resources

Help or Hindrance?
Also affecting all markets is the emergence
of distributed energy resources (DERs),
smaller sources such as energy storage, renewable technologies, and demand response
that sometimes can be aggregated to address
changes in demand. (For more on DERs,
see the May 2016 issue of POWER.) For all
three panelists, a key contention concerned
subsidies that are driving mass rooftop solar
May lauded Louisianas measures to slash
subsidies to residential solar in an attempt to
close its more than $1 billion budget chasm
that has recently widened due to sinking oil
revenues. While he acknowledged that the
cost and economics of solar have improved
drastically, he proposed solar was better deployed at utility scale. As we go through
this, the subsidies need to be reexamined at
a state level, particularly when they get so
large as to threaten a states budget, he said.
We need to make sure we get the rules right
on the rates that are being paid for the generation of solar. For instance, why would it
be appropriate to pay a retail rate for electricity generated on a rooftop solar installation at
a residential level when [rates for] a similarly
large-scale [installation] would be half, or
less than half of that?
Trawick agreed that rate structures are crucial. He summarized the dilemma this way:
If you dont get the rate structures right, you
do end up with the same subsidy-type issue,
as youll have one set of customers paying
for a separate set of customers who decide
to go a separate route. That said, however,
he underscored that Southern Co. looks at
distributed generation as an opportunity for
revenue growth associated with loads. We
want to be the one to provide that service to
[those customers], he said, adding that his
company had in February moved to acquire
PowerSecure, a developer of interactive distributed generation power systems that have
the ability to forecast demand and electronically deploy systems at peak power times.
Panelists also agreed that energy storage
hasnt yet reached its zenith. May declared
that unless Entergy sees significant breakthroughs on storage, its simply not economic and likely wont be economic for some
time to come. Likewise, Hopf predicted that
storage may thrive in regional pockets, but

POWER June 2016

not necessarily for Talen. I think that to get
that on the big scale, to do it economically, to
do that competitively, were still many years
down the road, he said.

Fuel Diversity Is Not So Easy

Considering that their companies serve distinct markets in regions with varying energy
needs and fuel resources, it was no surprise
that the panelists were divided over whether
fuel diversity should be prioritized over capitalizing on currently cheap natural gas.

Co. for leading on building nuclear plants .

. . but from an Entergy perspective, we just
cant go for it with a nuclear plant with where
gas prices are right now, May said, noting
that Entergy had started down the path to new
nuclear, but as gas prices fell, the company
decided to push forward with new CCGTs
The costs of building a new CCGT, not
only are they low, but they are quite sure, so
the risk of building a plantyou have to get
this through a regulatory processit is just

Pricing is a big hurdle to achieving true fuel

Hopf accepted that a dependence on gas
means setting ourselves up as an industry
for disaster during events like the 2014 polar vortex. But the options are distorted, he
said. In the merchant competitive markets,
you will see coal fleets and nuclear plants
challengedtheres just no way around it,
unless someone can see in the foreseeable future [that] gas is going to make a significant
upward trend.
During the 2014 polar vortex incident,
fuel diversity was indispensable, Trawick
countered, revealing that Southern Co. saved
customers more than $100 million that January by switching from gas back to coal when
gas prices surged. Yet he cautioned that
maintaining fuel diversity in current circumstances isnt as easy as it sounds. The world
were entering into is very different, and to
maintain that diversity, were going to ask
the plants to do things differently than they
may have done years ago, he said. We have
to have a coal fleet thats going to be more
responsive than it was built to be, even if
they werent built for all this cycling wear
and tear.
Entergy is a vertically integrated utility
that operates in both organized markets and
merchant markets, and May agreed that fuel
diversity is important. But pricing is a big
hurdle to achieving true fuel diversity, he said,
because organized markets arent adequately
paying plants for being emissions-free or for
their flexibility. I know that in MISO, were
looking at new pricing initiatives, including
looking multiple days out, so you can gain
some of that ability for less-flexible plants,
and you can get past that startup cost.

The Case for Gas

Markets are also determining what kind of
plants are being built. I applaud Southern

June 2016 POWER

well-defined. Generally, when we are building a CCGT, were setting out how long it
will take and how much it will cost, and
generally were building it in a shorter timeframe and under budget.
To offset price volatility, like several other
U.S. utilities (Trawick noted that Southern is
in the process of merging with AGL Resources), Entergy is looking at acquiring gas in the
ground, and Louisiana regulators have opened
a docket to investigate that, May revealed. He
joked: Ive heard it said, and I believe it, that
the world is round because its full of gas.

Hedging to Ease Price Surprises

To guard against unexpected natural gas
price spikes, many utilities also do some
sort of hedging of fuel as a means of price
protection to essentially lock in a price
for natural gas (or coal) using a financial
instrumenttypically with a commodity
futures contract, noted McMahon, whose
organization represents the bulk of the nations investor-owned utilities. Regulators
are taking an increasingly serious look at
hedging in the face of a series of severe
natural gas spikes.
Asked where their companies foresee regulation going with respect to hedging, May
predicted that unless interference causes markets to morph, gas prices would remain low.
He also explained that Entergy Louisiana is
limited to short-term hedgingsuggesting
long-term contracts arent as reliablebut
that has proved cumbersome because the
company is a large buyer of natural gas.
Again, thats why we think gas in the ground
is a real opportunity.
Trawick observed that, despite current low
gas prices, he has heard more talk of getting out of fuel hedging versus getting into
fuel hedgingwhich is completely upside

down. He suggested that could be because

of the way it is accounted for: When gas
prices fall, they show up as financial losses.
And when those financial losses show up
from a hedging standpoint, its very easy to
react and say, That was a bad decision, he
noted. The utility business is moving toward
acquiring gas assets, which have myriad benefits, among them that it firms up supply for
customers, he said.

In the Shadow of the Clean Power

A deeper shade of uncertainty is being projected on the industry by the Environmental Protection Agencys Clean Power Plan,
which has been stayed by the Supreme Court,
panelists all suggested. During a discussion
of how the companies are making long-term
capital decisions in the face of the rule, most
panelists agreed that even if the rule doesnt
pass legal muster, future carbon constraints
are almost certain.
Obviously, wed prefer to see something
that is more in the posture of a national energy policy of sorts, Trawick said. That way
everything is accounted for, not just whats
clean, but also whats affordable and reliable
for customers. One glaring issue for Southern, which operates in several states, is that
it creates challenges for us in wholesale
markets, he said. How do you implement
this sort of program when states can go different routes for compliance, and how will that
impact the wholesale market? he asked.
From the perspective of a company
operating in an organized competitive
market, Hopf decried state interference
with markets, warning that when carbon
comes into play, it is unknown whether
states may or may not consider deals with
power companies to bolster nuclear plants.
He pointed to FirstEnergy and American
Electric Powers eight-year contracts with
the state of Ohio that subsidize power
plant operation even though, economically, they cant survive. (Since this roundtable discussion, on April 27, the Federal
Energy Regulatory Commission blocked
those subsidy agreements.)
Entergy Louisianas total carbon emission
output technically already complies with
the rule, May said. But even that is uncertain because the state has yet to draw up its
compliance plan. Depending on the price of
carbon, banking on natural gas may still be
the companys best bet, he said. The issue
that needs to be worked out is from a regional
basishow do we collaborate on a regional
basis so that all the compliance costs can be
in the middle? he asked.

Sonal Patel is a POWER associate



How the Power Industry Is Making

Sense of an Environmental
Decision-making isnt paralyzed, even in the face of many unknowns concerning U.S. environmental rules, said a diverse set of industry experts at
Sonal Patel

his years much-awaited Environmental

Mega Session at the 18th annual ELECTRIC POWER Conference & Exhibition
in New Orleans, La., on April 19 was titled
Navigating Clean Power Plan Compliance
(Figure 1). But as moderator Tony Licata of
Licata Energy & Environmental Consultants
noted, the industry is faced with a quandary
concerning the future of the Environmental
Protection Agencys (EPAs) October 2015finalized Clean Power Plan (CPP).
Much of the incertitude stems from the
U.S. Supreme Courts February 9issued
stay of the rule, blocking EPA action on it
until the U.S. Court of Appeals for the District of Columbia decides on the rule and
requests for appeal or writ are decided. But
questions also abound concerning how the
electoral cycle will affect the rule. Additionally, nobody knows how the Supreme Court
will change after the recent death of Justice
Antonin Scaliathe most animated of the
high courts nine judges and the one who, in
his last major environmental opinion for the
court, compared the EPAs rulemaking of the
Mercury and Air Toxics Standards (MATS)
to buying a Ferrari without looking at the
price tag. Congressional Republicans have,
to date, denied President Obamas Supreme
Court nominee, D.C. Circuit Chief Judge
Merrick Garland, the courtesy of a confirmation hearing, leaving the court split with four
liberal-leaning justices and four conservative-leaning ones.
Meanwhile, many states havent started
developing state implementation plans
(SIPs), which are needed to comply with
the EPAs rule. Others havent definitively
decided to do nothingwhich would leave
them relying on a federal implementation
plan if the plan is not overturned. Another
deferred decision for many is that between
using a mass-based and a rate-based approach. At the same time, Licata said, the
future prices of gas and coal are uncertain
as the U.S. power sector makes a fuel-based

transition away from the latter and toward

the former, and as economics ravage merchant nuclear fleets.

Sooner or Later, Well Have an

But nothing resolves a quandary like a legal
decision from the Supreme Court or the D.C.
Circuit, and sooner or later well have an answer, John King, a partner with Louisianabased law firm Breazeale, Sachse & Wilson,
said optimistically.
King, who gave attendees a high level
overview of legal arguments for and against
the rule, explained that the rules key objective is to reduce carbon dioxide (CO2) emissions by 30% from 2005 levels by 2030.
The EPA, in its opponent brief, indicated
that therell be only a 16% reduction in CO2
emissions as a result of the CPP from 2020 to
2030, and it equated that from the rate of decrease that had occurred from 2002 to 2013
without any federal guidelines, he said.

Essentially, King explained, the plan requires

three building blocks: The first requires creating more efficiency onsite at power plants, and
the other two require generation shifting, or
what people call beyond the fence measures.
These arent required onsite; theyre achieved
by substituting [coal plants] with lower-emitting, cleaner-burning gas plants or no-emitting
renewables such as wind or solar, he added,
noting that those Building Blocks 2 and 3 are
at the center of the controversy of what has
gone up to the Supreme Court.
The rule requires initial SIPs by September
2016 and final plans by September 2018. Implementation must begin no later than 2020 to
achieve the required reductions by 2030. Legal challenges have been fast and furious, he
noted. Even before the rule was finalized and
published in the Federal Register, a request for
an emergency stay was filed but denied by the
D.C. Circuit; and after the rules publication,
another request for stay was filed in January in
the D.C. Circuit, leading the Supreme Court

1. Panelists for the 2016 ELECTRIC POWER Environmental Mega Session. At the podium: Chuck Barlow, vice president of environmental strategy and policy for
Entergy Corp. Seated, from left to right: John King, a partner at law firm Breazeale, Sachse &
Wilson; moderator Tony Licata of Licata Energy & Environmental Consultants; Block Andrews,
associate environmental engineer for Burns & McDonnell; J.T. Smith, director of policy studies,
Midcontinent Independent System Operator; and Maria Race, director of NRG Energys federal
environmental programs. Source: POWER

POWER June 2016

tion of standards of performance (Section
302 [a]) specifies a particular clause of the
CAA (Section 112[b]), which the House version does not. Industry argues that the EPA
is prohibited by this so-called Section 112
exclusion, because the exclusionwhich is
not ambiguous, as the EPA has claimedis
to avoid duplicative regulation under Section
111 and Section 112. The EPA says it interpreted the House and Senate amendments the
same way, he said.

A Legal Chokehold
All the arguments are centered around a few
sentences, in Section 111 of the Clean Air
Act (CAA), King said. (For more on the use
of the CAA, see this issues Commentary:
Learning from the Clean Air Acts Tragic
Flaw.) The EPA has taken a definition
tucked away in the CAAs Section 111(a)(1)
and applied it to Section 111(d)(1) to bolster
its authority to promulgate standards of performance. It has generated more paper and
felled more trees than anything that Ive seen
to datesomething like 3.4 million comments on the rule, numerous applications to
the courts, he said.
Industrys basic arguments assert that
Congress, in passing Section 111, did not
authorize the EPA to restructure the power
sector, and neither does it permit the EPAs
generation-shifting (or beyond the fence)
approach. Industry also argues that standards
of performance must be set for or apply to individual sources, not owners or operators,
as the EPA asserts, citing 45 years of prior
EPA interpretations of Section 111. Essentially what the opponents argue is that EPA
is asking or mandating those sourceswhich
EPA equates to owners and operators for the
first time. Instead of making changes at their
source, or facility, they have to go outside of
that and find ways to reduce carbon via cap
and trade and other methodologies to reduce
carbon emissions even if they cant achieve it
at their site, said King.
The EPA, however, contends that generation shifting clearly falls within the definition of standard of performance, because
its the best system of emission reduction.
System is extremely expansive and can
include a broad scope of pollution-curbing
measures, he said. The EPA is also essentially saying that the power sector is already
trying to find carbon reductions. Theyre
saying: Were not doing anything that the
power sector isnt already doing now.
The legal challenges also pinpoint a seemingly tiny difference concerning the definition of standard of performance between
the so-called House versionwhich was
passed and put into U.S. Code and a Senate version, which is floating around,
King explained. The Senate versions defini-

Other Factors
Aside from the legal battle over the CPP, a
number of other factors are affecting the
power sector, and that has big implications
for coal generators, specifically, who are trying to decide how much money to spend to
maintain optionality, noted Block Andrews,
an associate environmental engineer with
Burns & McDonnell.
Topping his list of considerations that
are prompting shifts in power markets was
low natural gas prices, followed by plenty
of renewable subsidies, renewable portfolio standards, too many obstacles for new
coal, and multiple environmental rules
for existing fossil fuel sources impacting
competitiveness. Building a new coal plant
under MATS, for example, would require
reducing mercury levels for a non-lignite
plant by 98.5%, he said. Clearly, these limits are crazy low, and trying to get a guarantee for anybody for beating those limits is
basically impossible.
Power generators that are evaluating what
to do with existing coal plants in the face of
these considerations should assess whether
or not they can handle additional capital and
operational and maintenance costs. The first
thing to consider is the marketplace. Locational marginal pricing reflects the value of
the energy at the specific location and time it
is delivered, Andrews said. Clearly, where
you are in the continuum makes a difference
in what your future looks like.
Decisions may also be driven by several
other environmental rules, including the
EPAs ozone and cooling water rules, and especially by the effluent limitation guidelines
(ELG) and the coal combustion residuals
(CCR) rule. For the ELG and CCR rules, for
example, generators may have two options.
The first would be to close the facility in
2022, which would avoid ELG compliance
and dry ash conversion required by the CCR
rule; however, costs would still be required
for pond/landfill closures. Overall, this option
could cost about $1.5 million in 2020 (and
about $50,000 after 2024). Option 2 would
entail keeping the plant operational beyond
2022, Andrews said, but that would require
converting the bottom ash system to a dry

system, closing the ash pond, and expanding

the existing landfill. This option would cost
about $450,000 in 2016, $20 million in 2020,
and about $300,000 after 2024. Ultimately,
each facility has unique characteristics that
require evaluation of compliance-specific
costs and resource planning, he said. (For
more on CCR compliance, see Coal Combustion Residuals Rule Compliance Strategies in this issue.)

A Regional Transmission Organizations Perspective

J.T. Smith, director of policy studies at the
Midcontinent Independent System Operator
(MISO), echoed concerns about the timeline
uncertainty prompted by the Supreme Courts
stay, primarily because his organization has a
role in maintaining electric reliability. To do
so, we need anywhere from a five- to 15-year
lead time, he said.
MISO, which manages a regional grid
spanning 15 U.S. states and the Canadian
province of Manitoba, has considered six
capacity expansion scenarios that take into
account generation, transmission, and environmental constraints. The grid operator is
already seeing decarbonization owing to low
natural gas prices and state renewables incentives, Smith said.

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to take the unprecedented action of granting

a stay, even before the D.C. Circuit has heard
the merits. The D.C. Circuit is now considering the merits of the rule.
The EPAs response was filed on March
28, 2016, and oral arguments are set for June
2, 2016. Its anyones best guess when the
decision will be made by the D.C. Circuit,
and whether that is when the Supreme Court
will hear it, King said.

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June 2016 POWER


And that trend will likely continue. Its
business-as-usual scenario, for example,
takes into account that about 12.6 GW of
coal capacity will retire as a result of MATS.
Among MISOs findings is that more coal retirements are certain depending on the level
of carbon reductions required under the CPP
or some other plan. Under a 17% emission
reduction by 2030 from 2005 levels, MISO
could see about 8 GW of retirements, but
under a 34% emissions reductionwhat the
regional transmission organization calls the
final CPP modelthe industry could see
24 GW of retirements.
Meanwhile, when exploring whether

ergy, owner of several coal-fired facilities

across the nation, is looking to reduce its carbon emissions by 50% by 2030 and by 90%
by 2050 below a 2014 baseline. That will
mean driving competitive solutions, deploying innovative, low-carbon energy technologies, she said. I believe this will largely be
market-driven, as costs for coal plant management increase inevitably, as they have
been, and costs for renewable installations
decrease while more transmission is built for
wind and solar.
Federal environmental rules other than the
CPP are also putting pressure on coal generation. Compliance with the Cross-State Air

NRG is urging states in which it operates

to adopt a state-measures approach with a
mass-based trading backstop.
states in its region are likely to pick a ratebased or mass-based compliance approach
to the CPP, MISO found a preference for the
mass-based approach. Depending on what
the fleet looked like, most of the time mass
was the preference of most of our states, even
where we saw high energy efficiency, renewable penetration, he said. But whats important to know . . . is that even for those states
that were showing a propensity to rate at the
beginning, when they found they didnt have
anybody to sell their emission rate credits to,
they started to shift their preference back to
the mass component.
Under a rate-based compliance approach,
continued investment in non-CO2-emitting
resources will be necessary to mitigate CO2
price increases, while system dispatch faces
relatively less change under a mass-based
approach, MISO predicts. What that boils
down to, according to Smith, is [t]hat the
mass-trading regime allows more flexibility
for your existing fleet to exist going forward.

Banking on a Low-Carbon Future

Beyond the CPP
The panel also included two representatives
from power companies: Maria Race, who
leads NRG Energys federal environmental
programs, and Chuck Barlow, a vice president of environmental policy and strategy at
Entergy Corp. Both pointed to efforts that
their companies are taking in preparation for
carbon reductions, regardless of how CPP legal challenges are resolved.
Predicting that state commitments to clean
energy will endure, Race said that NRG En58

Pollution update rule starting in 2017 will

require companies to retrofit units in ways
that they never conceived before. And some
states, like Illinois, are also developing their
own CCR rules, she noted.
Meanwhile, the EPA has said it will continue assisting states that are pushing for a
low-carbon future modeled by the CPP and
that the EPA does not consider it inconsistent with the stay by the Supreme Court,
said Race. Now, the next step in the EPAs
rulemaking is to finalize the federal plan and
model trading rules, which there is every indication that EPA will promulgate soon in
spite of the stay.
Any companys position on the CPP will
depend on its vision, she said, and NRG is a
proponent of state measures that offer compelling means to achieve low-cost CO2 reductions. That said, NRG is urging states in
which it operates to adopt a state-measures
approach with a mass-based trading backstop. We believe it will allow lower costs
and an abundance of CO2 reductions earlier
than the other options. It also gives a better
chance to adapt to the particular situations of
the statethe ability to incorporate energy
efficiency and renewables in state plans, and
secure certain commitments from less-efficient power plants. It also offers compliance
without the risk of high compliance prices
and trading-ready regimes and the premature shutdown of efficient coal plants, which
would become stranded assets, Race said.

More Obvious and LessAcknowledged Uncertainties

Entergys Barlow, a lawyer who formerly

acted as general counsel for the Mississippi

Department of Environmental Quality, pointed out that CAA compliance plans are usually the responsibility of the governor or state
environmental quality agencies. However,
owing to the rules large impact on electricity markets, utility regulators are expected
to play an important role in CPP planning. It
will force many of these different state representatives, some appointed and some elected,
to meet each other for the first timewith
unpredictable consequences.
Barlow was more optimistic about the
short term. While the rules ultimate compliance deadlines arent clear, the D.C. Circuit
can be expected to issue a decision on the
CPP in the third or fourth quarter of 2016,
and the Supreme Court will almost surely
agree to review the decision, whatever happens in the D.C. Circuit, he said. The stay
will be in place until the Supreme Court rules
on the case, likely in late 2017 or 2018so
no filings with EPA are required in September 2016 or likely in 2017.
The Supreme Court may vacate the
rule or remand it to the EPA, or a combination of the two. Even if the rule is upheld in whole or in part, the EPA may not
change some compliance deadlines, Barlow warned. That could mean state plans
will be due in 2018. States must decide
whether and how to continue compliance
planning in the interim.
Several regional transmission organizations, like MISO, are continuing planning efforts, but the states are in different places,
which can be cumbersome for a company
like Louisiana-based Entergy that also has
subsidiaries in Arkansas, Mississippi, and
Texas. Arkansas is among a number of states
that oppose the rule but have done a tremendous amount of study, Barlow said. They
have staff members who are very well-versed
in the rule, [who] probably can pick up a pencil again and start writing the state plan pretty
quickly, he said, adding that the states environmental agency and utility regulators
are actively coordinating on the rule. Entergy thinks thats a great approach, Barlow
said. But other states have done very little,
quite frankly, and perhaps have not provided
time or funding for staff members, he said.
Some states may think that they need to do
more, and were happy to cooperate with
those states, he said.
That includes Louisiana, which had conducted a CPP listening session at the end
of March. Mississippi has suspended stakeholder meetings on the rule, and Texas isnt
planning to conduct any further analysis or
meetings, he noted.

Sonal Patel is a POWER associate


POWER June 2016


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Richard L. Revesz

Jack Lienke

Learning from the Clean

Air Acts Tragic Flaw

hy are you picking on the Clean Air Act? Thats a

question weve heard more than once while traveling the country to talk about our new book, Struggling for Air: Power Plants and the War on Coal.
The book focuses on what we see as the tragic flaw of
the Clean Air Act of 1970 (CAA): its exemption of existing
industrial facilitiesmost notably, coal-fired power plants
from the Environmental Protection Agencys (EPAs) nationwide
performance standards for soot- and smog-forming pollutants.
Starting in 1971, new plants had to reduce their sulfur dioxide emissions by either installing multimillion-dollar pollution
scrubbers or burning pricey low-sulfur coal. In 1978, scrubbers became mandatory regardless of the type of fuel burned,
as did additional technology for controlling nitrogen oxides
emissions. But existing plants could continue polluting in unlimited amounts. This grandfathering gave utilities a perverse incentive to keep old, dirty facilities running decades
longer than they otherwise would have, stymieing state efforts
to meet the CAAs air quality goals.
Even so, the CAA has managed to do an enormous amount of
good over the years. Between 1970 and 2013, emissions of six
of the most common pollutants fell by more than two-thirds,
even as GDP tripled and the U.S. population grew by 50%. So
why, some wonder, are we harping on a shortcoming rather than
celebrating the acts substantial achievements?

Origins of Recent Regulations

One reason is that understanding the CAAboth its tremendous
ambition and the flaw that undermined that ambitionis key to
understanding todays environmental policy disputes.
Even if youre not a watcher of Fox News or a reader of conservative blogs, youve probably heard accusations that President Obama is waging a war on coal. The basic narrative
is that Obama took office in 2009 and, motivated by little
more than ideological fervor, immediately set about imposing
all sorts of onerous and unprecedented restrictions on the use
of coal.
Undoubtedly, recent EPA initiatives like the Cross-State Air
Pollution Rule, the Mercury and Air Toxics Standards (MATS), and
the Clean Power Plan make life harder for coal-fired power plants.
But these rules arent the malicious invention of White House officials who just dont like coal, as Senate Majority Leader Mitch
McConnell has suggested. Instead, they are the culmination of
a multi-decade struggle to reduce pollution from grandfathered
facilities. Indeed, each was, to some extent, set in motion long
before the current administration took office.
To be clear, grandfathering is still built into the CAA for
certain pollutants. The EPA remains unable to set nationwide
performance standards for old plants emissions of soot- and

smog-forming sulfur dioxide and nitrogen oxides. But the agency

can do other things.
For one, it can regulate old plants soot- and smog-forming
emissions if they contribute to air quality problems in another
state. A Good Neighbor Provision allowing the EPA to regulate
this sort of interstate pollution was added to the CAA in 1977.
But, for a variety of reasons, the agency didnt make use of it
until 1996, when the Clinton administration issued a rule known
as the NOx SIP Call. In 2005, the George W. Bush administration
followed up with the more stringent Clean Air Interstate Rule.
And after the D.C. Circuit Court of Appeals struck down that
regulation in 2008, it was left to the Obama administration to
craft a suitable replacement, the Cross-State Air Pollution Rule,
which was upheld by the Supreme Court in 2014.
The EPA can also regulate old plants emissions of what the
CAA calls hazardous pollutants. This category includes heavy
metals like mercury, which, among other things, contributes to
neurological damage in fetuses and small children. The EPA has
had a version of this power since 1970, but, as with the Good
Neighbor Provision, it took the agency a very long time to make
use of its authority. In 1990, under the George H.W. Bush administration, Congress added new deadlines to prod the agency into
action. And thats what ledtwo decades and several lawsuits
laterto the Obama administrations MATS.
Finally, the EPA can regulate power plants emissions of greenhouse gases directly. Indeed, it was all but forced to do so by
the Supreme Courts 2007 ruling in Massachusetts v. EPA. Eight
years later, that responsibility gave rise to the agencys Clean
Power Plan.

How to Deal with Your Grandfather

In addition to providing useful historical context for some of
todays most controversial regulations, our book also serves as
a cautionary tale for future policymakers. While most of the nations pre-1970 coal plants are expected to retire, at long last,
within the next several years, the issue of grandfathering will
continue to arise in other regulatory contexts. We dont suggest that older sources should never get any form of transition
relief when new rules are imposed. It is, after all, generally
more burdensome to retrofit an existing facility to accommodate
pollution-control technology than to incorporate such technology into a newly built facility. But legislators and regulators
must think very carefully about the appropriate scope and duration of that relief.
As the old saying goes, those who dont learn from history are
doomed to repeat it.
Richard L. Revesz is the Lawrence King Professor of Law and
Dean Emeritus at New York University School of Law, where Jack
Lienke is a Senior Attorney at the Institute for Policy Integrity.

POWER June 2016

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