A jilted Diablo Canyon contractor accuses PG&E of ‘reprehensible act.’ Is it sour grapes?

Holtec International, the company that has been providing Diablo Canyon with dry casks for storing spent radioactive fuel, is lashing out after it lost a contract to provide additional canisters for PG&E’s nuclear power plant in Avila Beach.

“Bluntly stated, PG&E’s decision reveals a blatant disregard for the interests and welfare of the host community of the San Luis Obispo area,” a Holtec executive wrote in a letter to PG&E.

He goes on to threaten to “employ all appropriate avenues available to us to reverse your ill-conceived decision and protect the well-being of the people of California and PG&E.”

PG&E announced this month that it had chosen Bethesda-based Orano USA to handle the storage of the final loads of spent fuel from Diablo Canyon, which is due close in 2025.

In addition to manufacturing its horizontal, above-ground storage modules for PG&E, Orano will be in charge of transferring spent fuel out of the storage pools at Diablo and into dry casks.

PG&E was circumspect in its response to Holtec’s outburst: “While we understand Holtec is not pleased with the results of the bid process, PG&E followed its established competitive bid process and remains confident in its evaluation of all aspects of bidder proposals as well as its choice of vendor for the dry cask storage project at Diablo Canyon. Beyond that, we cannot address this potential legal matter,” a company spokesperson wrote in an email.

The Holtec letter, marked “confidential and privileged information,” is posted on the website of the Diablo Canyon Decommissioning Engagement Panel, a citizens advisory group that has been reviewing issues connected to the upcoming closure of the nuclear power plant. The panel was CC’ed on the Holtec letter, as were several of PG&E’s top executives.

‘A preposterous and reprehensible act’

In its letter, Holtec savagely criticizes Orano’s product and blasts PG&E’s decision-making process:

“PG&E’s technically knowledgeable personnel appear to have been sidelined or muzzled and the body of PG&E’s literature on evaluation of the available technologies summarily buried. Plainly stated, the decision to award the dry storage contract to Orano whose freestanding modules are apt to slide and fall in the Pacific Ocean under California Coastal Commission’s postulated earthquake is a preposterous and reprehensible act.”

The letter was signed by Pierre P. Oneid, Holtec’s senior vice president and chief nuclear officer.

Orano’s response

“While we welcome authentic questions and discussion about our contracted work and technology at (Diablo Canyon), we cannot let stand content intentionally misinforming the community and misrepresenting our proven technology and our skilled teams’ experience and quality performance,” Orano spokesman Curtis Roberts wrote.

“In addition to other inflammatory comments, Holtec states in its letter that Orano’s ‘freestanding modules are apt to slide and fall in the Pacific Ocean ….’ Holtec offers no factual authority for this statement. In addition to being false, this statement is directly at odds with rigorous scientific analyses published by the U.S. Department of Energy’s Sandia National Laboratories.

“Sandia’s 2012 study, “Seismic Considerations for Spent Nuclear Fuel Storage in Dry Casks,” investigated the seismic response of typical vertical and horizontal spent fuel cask systems under a total of 1,165 evaluations... Sandia concluded that horizontal systems ... will not tip over during severe seismic events or walk more than a few centimeters on the pad.”

Roberts added that Orano’s system — the NUHOMS, or Nuclear Horizontal Modular System — is fully licensed by the Nuclear Regulatory Commission. (Holtec claimed it was not licensed by the NRC and “never tested.”)

Orano has worked on decommissioning at several nuclear power plants; more than 1,200 Orano dry cask storage systems have been successfully installed at over 30 sites, according to PG&E.

In a news release, Orano says it anticipates being able to complete the transfer of spent fuel into casks within two years of Diablo Canyon’s shutdown.

That will more than meet a requirement to expedite the final transfer of used fuel within four years of the plant’s shutdown — a condition worked out in decommissioning negotiations.

The Nuclear Regulatory Commission will oversee the work.

For the most part, environmental organizations have not weighed in on PG&E’s choice of contractor.

When asked to comment, the Alliance for Nuclear Responsibility (A4NR) raised no concerns with PG&E’s decision to go with Orano.

The organization “has confidence in the integrity of the vendor procurement process put in place, including review of any protests filed by unsuccessful bidders,” spokesman David Weisman said.

That’s encouraging, since A4NR has been among the most vigilant watchdogs of decommissioning — a critical role, because few of us have the wherewithal to judge whether one dry cask system or another is best for storing the radioactive fuel generated at a nuclear power plant in our own backyard.

Holtec ‘isn’t used to public scrutiny’

For the record, this isn’t the first time Holtec has reacted in such an aggressive and aggrieved manner.

It also rebuked a community engagement panel reviewing decommissioning at the San Onofre nuclear power plant in San Diego. When the panel raised concerns about Holtec’s performance, a company executive issued this blistering response, as quoted in the Orange County Register:

“Your memo is very much in the tradition of irresponsible claptrap that dominates your ... meetings,” it said. “An inflammatory memo unsupported by facts is little more than a hatchet job.”

The company also accused the engagement panel of attempting to “sow doubt in the minds of the local people about the competence of the only company that can carry out such work!”

A member of the San Onofre engagement panel describes Holtec’s response as “an emotional letter from someone who feels under attack and isn’t used to public scrutiny.”

That raises the question: Is Holtec’s letter to PG&E more of the same — just another over-the-top outburst from a hubristic company that believed it would be awarded a multi-million dollar contract?

Or is there more to it than that?

Kara Woodruff, a member of the Diablo Canyon Decommissioning Engagement Panel, sums it up like this: “I can’t tell if the letter is just sour grapes by a company that lost a lucrative contract or whether it raises substantial issues.”

Engagement panel members hope their questions will be answered at their next meeting scheduled from 6 to 9 p.m. April 20 at the County Government Center in San Luis Obispo. A discussion of the contract is on the agenda.

“Hopefully we will be able to address some of the issues raised in the Holtec letter,” Woodruff said.

We hope so as well, because if Holtec has some legitimate concerns, of course they should be addressed.

But if it turns out the company is merely blowing smoke because it’s upset about losing a lucrative contract, that’s not just unprofessional. It’s reprehensible, and further demonstrates that PG&E made the right choice in rejecting Holtec’s bid.

This has been edited to include a response from Orano.

This story was originally published April 15, 2022 at 5:30 AM.