"Rookie Error" Severely Accelerated Degradation for 22 Months after Holtec Applied for Billions of Dollars in Public Bailouts to Restart Permanently Closed Nuclear Power Plant

COVERT TOWNSHIP, MI and ROCKVILLE, MD, JANUARY 15, 2025--At a hybrid (virtual, and in-person) public meeting yesterday between the U.S. Nuclear Regulatory Commission (NRC) and Holtec International, regarding "steam generator sleeving" at the Palisades atomic reactor in Van Buren County on the Lake Michigan shoreline near South Haven, an NRC staffer revealed for the first time just how very long the company's neglect of critical safety maintenance of steam generator tubes persisted.

Kraig Schultz of Michigan Safe Energy Future in Grand Haven audio recorded the meeting. From the 1 hour 26 minute 18 second mark of the recording, to the 1 hour 26 minute 50 second mark, NRC staffer Andrew Johnson -- in response to a question from Sierra Club Michigan Chapter member Ed McCardle, about exactly when chemically-preservative wet layup was implemented in the steam generators (SGs) to prevent accelerated corrosion of exceedingly thin-walled (merely 0.042 inches thick) heat-transfer tubes -- stated:

"This is Andrew Johnson of the staff. So, in the -- I believe it was in the previous inspection outage call that we had back in September, in the notes, we documented that they had placed the generators in wet layup in May of '24. There was about a two year period where they were not in a wet layup, with controlled water chemistry. That was the latest information that we had." (Emphasis added)

(Also see Page 34 of 51 on the PDF counter in the full transcript of the audio recording.)

But reviewing NRC's October 1, 2024 PALISADES NUCLEAR PLANT - SUMMARY OF [SEPTEMBER 3, 2024] CONFERENCE CALL REGARDING STEAM GENERATOR TUBE INSPECTIONS (EPID L-2024-NFO-0008), it merely states: "...The site placed the SGs in wet layup once it was determined they would be attempting to recommence normal operations." (See point #12, Page 7 of 8 on the PDF counter, final paragraph.) However, no date was provided there regarding when wet layup was implemented on the steam generators.

It has now been revealed that Holtec's neglect of the safety-critical steam generators lasted from June 28, 2022 -- the day Holtec took ownership of Palisades from Entergy -- to May 2024, "about a two year period," according to the revelation from NRC staffer Andrew Johnson.

In fact, as Entergy closed Palisades for good on May 20, 2022, the lack of "wet layup, with controlled water chemistry," lasted almost exactly two years.

But NRC's October 1, 2024 SUMMARY statement that "[t]he site placed the SGs in wet layup once it was determined they would be attempting to recommence normal operations" is itself dubious and misleading. Holtec did not decide to restart Palisades in May 2024. Just a week after taking ownership of Palisades, on July 5, 2022, Holtec had actually already secretly applied to the U.S. Department of Energy (DOE) for billions of dollars in federal taxpayer subsidies for the unprecedented restart of the closed reactor, laying out a detailed 42-page strategic plan. Beyond Nuclear obtained Holtec's July 5, 2022 document via a Freedom of Information Act request to the State of Michigan in 2023. See Beyond Nuclear's October 16, 2023 press release about the many significant revelations in Holtec's July 5, 2022 document.

Holtec then joined Michigan Governor Gretchen Whitmer on September 9, 2022 to publicly announce it would restart Palisades, rather than decommission it as previously promised.

Holtec waited a year and ten months after it had already decided to restart Palisades, at huge public expense, to bother getting around to implementing basic, vital safety maintenance on the steam generators. This, despite repeated warnings by Arnie Gundersen, chief engineer at Fairewinds, that lack of wet layup would cause accelerated degradation of already badly degraded steam generators. Gundersen has served as an expert witness for an environmental coalition opposing Palisades' operation, and now its proposed restart, for over a decade. Gundersen has more than 50 years of relevant expertise, including serving as an expert witness for Friends of the Earth on steam generator tube degradation at San Onofre, California, leading to the permanent shutdown of two reactors in June, 2013.

"We were right. Holtec turned Palisades into a rust bucket for two years. It's a complete dereliction of duty, and is proof they have no nuclear operation experience," said Arnie Gundersen, chief engineer at Fairewinds. "Snowbirds take precautions to winterize their car before leaving Michigan and wintering in Florida," Gundersen added.

On January 7, 2025, in the lead up to yesterday's NRC-Holtec public meeting, Gundersen published a backgrounder, "The History of Steam Generator Damage at the Holtec Palisades Nuclear Reactor,"

In the backgrounder, on Page 2 of 13, Gundersen stated:

"Even though it had acquired Palisades and was aware of the possibility of restarting it, Holtec made no effort to protect its vital systems from attack by corrosive chemicals in 2022 and into 2023. Now, in early 2025, Holtec comes before the NRC seeking approval and forgiveness for the damage its safety lapses have inflicted on the Palisades Steam Generators. Make no mistake: these safety flaws, and many others in additional equipment, were caused by Holtec’s gaffs and management blunders in 2022 and 2023."

"Shockingly, we now know Holtec's neglect of active safety maintenance on the steam generators went on even much longer than we had feared, until May 2024," said Kevin Kamps of Beyond Nuclear.

Gundersen's Jan. 7, 2025 backgrounder went on, on Page 3 of 13, to state:

"Fairewinds notes that Holtec has never operated a nuclear power plant. Consequently, the lax conditions that Holtec created have damaged the Palisades Steam Generators (SGs). Holtec’s lack of nuclear or atomic operating experience created damage that could be considered a rookie error. Disastrously, any rookie errors at a nuclear power plant could have serious public health consequences, including a nuclear meltdown."

Gundersen has warned about the lack of wet layup, and other risks associated with Palisades' steam generators not for months, but for years.

In a November 14, 2022 press statement, Gundersen asked "does Holtec International plan to address the Palisades atomic reactor’s need for a replacement vessel head, as well as for replacement steam generators, before commencing full power reactor operations?"

The need for complete replacement of Palisades' steam generators, and reactor vessel closure head, was known by May 10, 2006, when the atomic reactor's original owner, Consumers Energy, admitted so to the Michigan Public Service Commission (see Page 2 in particular). In fact, such "[r]equired significant future capital expenditures" as replacing the steam generators was cited as the main reason Consumers Energy decided to sell Palisades to Entergy. But NRC never required Entergy to replace the steam generators, so it has not happened.

Gundersen addressed Palisades' steam generators in a September 11, 2023 educational video presented and recorded before a live audience at Western Michigan University in Kalamazoo, Michigan, just 35 miles east, and downwind, of the atomic reactor. Gundersen stated "The steam generators -- they're a huge component. They cost about a half a billion dollars. They were on their last legs when Entergy closed the plant. And they haven't been properly maintained since then. So, likely, if the plant were to [start] up, they would fail, and that would cause a radiation release along the banks of Lake Michigan." (Video recording, 5 minute 40 second mark, to 6 minute 3 second mark.)

In its July 5, 2022 secret communication to DOE, Holtec considered replacing Palisades' steam generators, at a cost of $510 million, the single largest line item in the projected restart budget. (See Table 3: Capital Projects, Item #3, Page 7 of 42, or pg. 9/42 on the PDF counter.)

But by April 2024, Holtec had decided it would not replace the steam generators:

"…In the application, Holtec also estimates a cost of $510 million for steam generator ‘design, fabrication, replacement (includes reactor coolant system redesign, cold-hot-fuel testing),’ but Culp said this week that recent ‘expert testing and analysis has validated the integrity of our steam generators to support continued safe and reliable operation,’ and the machines will not be replaced,” reported Jessica Sondgeroth in Nuclear Intelligence Weekly, on April 5, 2024, in an article entitled “Palisades Restart Still Faces Significant Hurdles.”)

Then in May 2024, we now know, Holtec at long last very belatedly installed wet layup in Palisades' steam generators.

What "expert testing and analysis" was Holtec/Palisades spokesman Nick Culp talking about last April? How did they reach such different conclusions, when inspections begun on August 24, 2024 revealed extensive, severe steam generator tube degradation at Palisades?

On September 18, 2024, NRC issued a rare Preliminary Notification of Occurrence (PNO) regarding the steam generator tube degradation. NRC’s PNO stated: “…During Holtec’s analysis of the inspection data, preliminary results identified a large number of [Steam Generator] tubes with indications that require further analysis and/or repair. Further data analysis is in progress with additional tube inspections, testing, and repairs to be completed over the next few months…“. (Emphasis added) Again, see NRC’s October 1, 2024 PALISADES NUCLEAR PLANT – SUMMARY OF CONFERENCE CALL REGARDING STEAM GENERATOR TUBE INSPECTIONS (EPID L-2024-NFO-0008), for more detailed information from a September 3, 2024 conference call between Holtec and NRC, about the severity, extent, and nature of the steam generator tube degradation at Palisades.

"Gundersen says the steam generators must be replaced before any serious thought should be given to restarting Palisades. Replacement is a half-billion dollar undertaking, and is something that Holtec supposedly budgeted into its federal corporate welfare request. Holtec is once again cutting corners on public safety for the sake of sheer profit. We can't rely on leak-before-break; Holtec must replace-before-restart," said Terry Lodge, co-counsel for the environmental coalition.

In his September 11, 2023 presentation, Gundersen went on: "When they shut it down, they should have added chemicals to the water if they were going to start it back up again, to prevent all the internal components from rusting. But they didn't do that. Why? Because they were going to shut it down and sell it for scrap." (Video recording, 7 minute 33 second mark, to 7 minute 49 second mark.)

Gundersen concluded: "When that plant starts back up, it's going to be less safe. The people don't know what they're doing, and the plant has aged and degraded. So it rises to the top of my list of the plants most likely to have radiation releases." (Video recording, 13 minute 15 second mark, to 13 minute 33 second mark.)

Gundersen also warned about the need for wet layup on the steam generators in his December 5, 2023 expert witness testimony, submitted to NRC as part of the environmental coalition's intervention against Holtec's restart scheme. For example, in paragraph 34, on pages 11-12 of 25 (pgs. 12-13 of 48 on the PDF counter), Gundersen stated:

"If one of the seasoned owners/operators had planned to ultimately restart Palisades after its shutdown in 2022, the owner would have spent funds to place the secondary system in a wet layup status to prevent further degradation of the steam generators...Since Palisades was sold as scrap, no such precautions would have been taken. When a plant is decommissioned, no such wet layup and preventive maintenance would be required as the reactor has become non-functioning scrap. Holtec knew it bought a non-functioning scrap reactor from Entergy that was meant to be entirely dismantled."

Gundersen and the environmental coalition's legal counsel again warned about the lack of proper wet layup on Palisades' steam generators in an October 7, 2024 intervention petition and hearing request against Holtec's restart scheme (see pages 61 to 63, 74, 115 to 123, and 131 to 132, of 303, on the PDF counter).

Gundersen has warned in his January 7, 2025 backgrounder:

"No nuclear power plant operator has proposed the magnitude of repairs proposed by Holtec to its deteriorated SGs as it identified in September 2024. Moreover, no U.S. nuclear power plant has implemented the sheer number of repairs Holtec proposes to alleviate the extensive new damage. Therefore, the NRC should reject Holtec’s repair requests and require the installation of new steam generators at Palisades. The enormous increase in the number of damaged tubes uncovered in 2024 implies Palisades’ unsafe and unreliable operation under any circumstances. Regulations created by the NRC elucidate that it should never allow Holtec Palisades and Holtec International to implement its poorly proposed Band-Aid fix." (Pages 2 to 3 of 13 on PDF counter)

Gundersen has also warned that Holtec's proposed repairs on the steam generators, including unplugging more than 600 tubes plugged 35 years ago as a safety precaution, and sleeving very large numbers of damaged tubes, could exacerbate, rather than solve, the problems.

On Page 11 of 13 in the backgrounder, Gundersen wrote:

"Since the Holtec Palisades tubes are also experiencing Stress Corrosion Cracking (SCC), unplugging extra tubes will create more unforeseen engineering and safety predicaments."

Gundersen added, on Pages 11 to 12 of the backgrounder:

"Holtec’s sleeving solution for the Palisades Steam Generator Stress Corrosion Cracking (SCC) damage will increase the stress on the tubes and tube sheet. Increasing the stress on the tubes and tube sheet by sleeving is counterintuitive and counterproductive in eliminating a problem created by SCC. As the Electric Power Research Institute’s Steam Generator Sleeving Review Committee noted...Holtec’s proposed sleeving solution will increase the stress on the tubes and sheet, not lessen the already accelerated rate of Stress Corrosion Cracking (SCC). Further complications arise from the chemical-induced corrosion on both the primary side of the reactor itself as well as in the secondary system of the steam generators that also has been contaminated by chemically corrosive water permeating the reactor water (primary system) and the steam generator (secondary system)."

"All the king's horses, and all the king's men, will court disaster if they try to run Palisades again," said Alice Hirt of Holland, MI, an intervenor on behalf of Don't Waste Michigan, a statewide, grassroots nuclear watch-dog group for the past four decades.