FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: January 30, 1997
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-1401 23-0970240
(State or other (SEC (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
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Item 5. Other Events
On January 29, 1997, Public Service Electric and Gas Company (PSE&G) and its
parent, Public Service Enterprise Group Incorporated filed the following Current
Report on Form 8-K concerning Salem Nuclear Generating Station (Salem), operated
by PSE&G:
"PSE&G - Nuclear Operations
- ---------------
On January 29, 1997, the Nuclear Regulatory Commission (NRC) held a public
meeting and identified plants placed on the "NRC Watch List", including Salem
Units 1 and 2, which were identified as Category 2 plants. In its press release
issued following the meeting, the NRC stated:
"The staff informed the Commission that the decision to place the Salem units on
the Watch List was not based on any recent performance problems or decline; the
staff believes that Salem's efforts to achieve needed improvements are correctly
targeted and the NRC is satisfied with the licensee's overall approach. However,
the staff noted that Salem should have been placed on the Watch List previously
because of Salem's past safety performance. The staff also indicated that the
agency increased its attention and resources at Salem commensurate with a Watch
List plant. Finally, the staff concluded that, notwithstanding the improvements
at Salem, it would not have been removed from the Watch List at this time had it
been previously identified because it has yet to demonstrate a period of safe
performance at power".
The NRC has three classifications of facility monitoring. A Category 3 facility
is one which is having or has had significant weaknesses that warrant
maintaining the plant in a shutdown condition until the licensee can demonstrate
to the NRC that adequate programs have both been established and implemented to
ensure substantial improvement; full NRC approval is required for restart and
the NRC will monitor closely. A Category 2 facility is a plant that is
authorized to operate but that the NRC will monitor closely; although being
operated in a manner that adequately protects public health and safety, plants
in this category are having or have had weaknesses that warrant increased NRC
attention; a plant will remain in this category until the licensee either
demonstrates a period of improved performance, or until a further deterioration
of performance results in the plant being placed in Category 3. A Category 1
facility is a plant that that has been removed from the Watch List.
More fully describing this NRC action, on January 27, 1997, the NRC sent the
following letter to PSE&G:
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United States
Nuclear Regulatory Commission
Washington, D. C.
January 27, 1997
Mr. E. James Ferland
Chief Executive Officer
Public Service Electric and Gas Company
80 Park Plaza
Newark, NJ 07101
Dear Mr. Ferland:
On January 14, 15, and 17, 1997, NRC senior managers met to evaluate the nuclear
safety performance of operating reactors, fuel facilities, and other materials
licensees. The NRC conducts this meeting semiannually to determine if the safety
performance of various licensees exhibits sufficient weaknesses to warrant
increased NRC attention. At the January 1997 Senior Management Meeting (SMM),
the Salem and Hope Creek Generating Stations were discussed.
In our letter of January 29, 1996, James M. Taylor, the former NRC Executive
Director for Operations, advised you that at the January 17-18, 1996 SMM, NRC
senior managers concluded that recent trends in performance at Hope Creek raised
sufficient concerns that we believed it would be appropriate to meet with you to
discuss these concerns. In that letter we also stated that resolution of our
performance concerns at Salem remained to be demonstrated through sustained and
reliable operations.
At the January 1997, SMM the discussion regarding Hope Creek considered the
additional insights gained from our monitoring of plant performance since the
January 1996 SMM. Based on these discussions it was concluded that the
corrective actions you are taking have been effective in addressing our concerns
regarding adverse trends in performance at Hope Creek. A summary of NRC
discussions related to Hope Creek follows:
Steps taken by management to address both human performance and equipment issues
over the past year have resulted in an overall improvement in plant operations.
Management has consistently exhibited a conservative approach to decision
making. Progress has been made in communicating higher standards and lowering
significantly the threshold for identification of problems. Numerous staffing
changes and an extensive training and requalification initiative have led to
improved control of plant activities by operators. This is significant since the
negative trend discussed in the January 1996 SMM was most notably evidenced by
several significant events where operators failed to properly control plant
evolutions. Overall personnel error rates have declined significantly.
The station is well along in addressing previously identified problems with
technical specification and surveillance procedure discrepancies. Overall
material condition of the plant is good as illustrated by improved plant
operating performance. This improvement stemmed, to a large degree, from work
accomplished during an extended outage completed in early 1996. Maintenance and
engineering backlogs are well understood and prioritized but they constitute a
continuing challenge to the station. Continuing attention is also needed to
improve operator staffing levels which were reduced somewhat during the
station's operator requalification initiative.
The senior managers also discussed the Salem facility. As described in more
detail in the following paragraphs, Salem was designated as a Category 2 plant,
not due to any performance problems or decline during this evaluation period,
but due to a change in senior management judgment as described in the fourth
paragraph below, A summary of NRC discussions related to Salem follows:
Both Units I and 2 were shut down to address significant equipment and human
performance problems in mid-1995. An NRC Confirmatory Action Letter issued at
the time established actions required before restart of the Units.
A strong management team has been assembled by PSE&G; it has been in place for
most of the outage. A much lower problem reporting threshold has been
established and management has been aggressive in addressing root causes.
Significant staffing changes have been made. Operations and maintenance staffs
have completed extensive training and requalification programs to both reinforce
fundamental skills and establish higher safety standards. Steps have been taken
to strengthen station self assessment, corrective action and work control
processes. As a result, the number and significance of personnel errors have
declined. Operators have demonstrated improved ownership of the plant and
conservative decision making.
The outage scope has been extensive. Numerous plant components have been
refurbished or replaced with the more reliable equipment in both safety-related
and balance-of-plant systems. Operator work-arounds are being addressed. A
comprehensive, pre-startup test program is underway to assure repair work has
been effective. Engineering organizations are providing stronger support on
equipment and design issues as evidenced by completion of a recent licensing
basis conformance review.
The senior managers thoroughly discussed current activities at Salem and the
basis for past SMM decisions. The conclusion was that the scope and depth of the
problems that existed at Salem prior to the dual unit shutdown warranted
categorizing it as a Category 2 facility indicating need for increased NRC
attention. Past decisions regarding Salem's status were influenced by current
licensee management's recognition of problems and efforts being made to address
them. As a practical matter, given the extent of these problems and the scope of
activities, the agency increased its attention to Salem and applied resources
commensurate with a plant in a Category 2, status. As a consequence, senior
managers reviewed Salem performance using the Category 2 plant removal matrix.
The managers concluded, notwithstanding the significant steps being taken and
results achieved to date, Salem would not be removed from Category 2 status if
it had previously been categorized as such. A key consideration in the removal
matrix is assessment of plant and integrated station performance at power which
has yet to occur.
In summary, the decision was made to recognize that Salem should have been
placed on the watch list previously and that it would not have been removed at
this point. As such, Salem is being classified as a Category 2 facility at this
time. This classification is not intended to suggest that licensee actions
underway at Salem to achieve needed improvements are incorrectly targeted. NRC
is satisfied with the overall approach and will be monitoring closely the
progress to achieve the planned improvements.
An NRC Commission meeting, open to the public, has been scheduled to be held in
the Commissioners' Conference Room in Rockville, Maryland, on January 29, 1997,
at 10,00 a.m. to review the results of the latest meeting of NRC senior
managers. Mr. Hubert Miller, the Region I Regional Administrator, has discussed
the bases for our conclusions with regard to Hope Creek and Salem with members
of your staff.
If you have any questions regarding this matter, do not hesitate to call me.
Sincerely,
HUGH L. THOMPSON, JR.
Hugh L. Thompson, Jr.
Acting Executive Director for Operations
Dock Nos:
50-272
50-311
50-354"
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PECO ENERGY COMPANY
\s\ J. B. Mitchell
Vice President - Finance
and Treasurer
January 30, 1997
