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The Little Breeder that Could

By Kennedy Maize

Washington, D.C., December 21, 2011 – Call it “The Little Breeder that Could.” Sixty years ago – December 21, 1951 – on the remote, high Idaho desert near Arco, legendary atomic scientist Walter Zinn from the Atomic Energy Commission’s Argonne lab outside Chicago, overseeing the Idaho project, wrote in his log book, “Electricity flows from atomic energy. Rough estimate indicates 45 KW.”

At that moment – 1:23 p.m. — Zinn, colleagues from Argonne, and scientists from the National Reactor Testing Station in Idaho witnessed four small light bulbs glowing in the dim building housing the Experimental Breeder Reactor – 1. The machine, also known as “Chicago Pile 4,” or more colloquially as “Zinn’s infernal machine,” became the first in the world to turn the power of the atom into light for the world.

Zinn, a close colleague of Enrico Fermi, was the scientist who actually pulled the control rod out of Fermi’s pile in the squash court under the football stadium at the University of Chicago on December 2, 1942, starting the world’s first sustained chain reaction.

In 1946, Zinn proposed a reactor design that would produce more plutonium from U-238 than it would consume in highly-enriched U-235 fuel. It would, in fact, be a “breeder” reactor. The AEC approved a project to build a breeder in 1947 and, at Zinn’s insistence because of his fears of what might happen if the reactor failed in the densely-populated Chicago region, it was sent to Idaho for construction. The site was originally known as “Argonne West.”

Construction began in Idaho in 1949. A Chicago crew arrived in early 1951, as the reactor building was being completed, to install the core. In May, Zinn tried to operate the reactor, but it proved a dud. There wasn’t enough fuel in the football-sized core to sustain a reaction. It took another three months to get more highly-enriched uranium from the AEC stockpile and manufacture beefed-up fuel rods.

The tests culminated in the reactor reaching full power. Steam raised by the hot reactor coolant ran to a small steam turbine generator. The most enduring image of EBR-I resulted: four light bulbs glowing brightly from the first electricity produced from atomic power. The next day, the reactor was generating enough electricity for the entire building.

But the real mission of EBR-I wasn’t to generate electricity. It was to prove that the machine could make new fuel. In June 1953, the AEC announced that the machine, with a power output of 1.2 MW in heat (0.2 MW of electrical output, about the same generating capacity of a small, home backup, gasoline-powered generator) was making one new atom of Pu-239 for each atom of U-235 it was burning.

While it could breed new fuel, EBR-I had inherent problems. One was what the physicists call a “prompt positive power coefficient of reactivity.” In ordinary language, this means that as the power increases, the nuclear reaction speeds up. It is a positive feedback that can lead to an out-of-control reactor. The core could melt and collapse.

The scientists at Argonne understood this problem and used EBR-I to examine the instability of the technology. In late November 1955, during an experiment on the positive reactor feedback, some 40-50 percent of the EBR-I core melted. The Argonne West team removed the damaged core – very carefully – and repaired and operated tiny EBR-I until the end of 1963. A second reactor – EBR-II – operated as a breeder until 1969.

EBR-1's achievement

In 1965, President Lyndon Johnson stood on the EBR-1 site and designated it as a national historic landmark. Johnson said, “We have moved far to tame for peaceful uses the mighty forces unloosed when the atom was split. And we have only just begun. What happened here merely raised the curtain on a very promising drama on our long journey for a better life.”

Unfortunately, Johnson’s optimism was somewhat misplaced. Breeder reactors at a commercial scale have proven to be an unnecessary dead end around the world. While the breeders are expensive to build and difficult to operate – the sodium coolant tends to catch fire – they respond to a problem that never materialized. Uranium is not in short supply, so there is no need for machines that create fuel more expensive than what they use.

But that should not detract from the achievement of EBR-1. It did what Walter Zinn designed it to do…and more.

FERC Puts Duke-Progress Merger in Doubt

By Kennedy Maize

Washington, D.C., December 15, 2011 – The Federal Energy Regulatory Commission yesterday gave a big lump of holiday coal to Duke Energy and Progress Energy, putting the colossal Carolina utility merger on hold pending an improved plan to mitigate market power. It isn’t clear whether FERC’s latest skepticism about the merger will scuttle the deal, but it is clear that the merger won’t happen before the end of the year, as the two companies had hoped.

FERC had been expected to take up the Duke-Progress mitigation plan at its regular meeting today, but decided late yesterday, at the suggestion of outgoing commissioner Marc Spitzer, to make the announcement while the stock market was closed. Today, a Duke spokesman understandably refused to comment on how the FERC action would affect the marriage of Duke, based in Charlotte, and Progress, headquartered in Raleigh.

Last September, FERC gave the merger conditional approval, contingent on the companies coming back to the federal regulatory agency with a plan to mitigate what would be new market power in the Carolinas, where both companies have extensive operations and captive customers. FERC suggested actions such as spinning off generation and turning control of its transmission network over to an independent regional operator, or construction of new transmission by an independent, third party.

Duke and Progress responded with a proposal on October 17. They proposed a “virtual” divestiture, which has become a popular “now you see it, now you don’t” ploy among merging utilities in attempts to demonstrate they don’t have the ability to manipulate their monopoly markets. They offered to sell “available economic capacity” from time-to-time into the Carolinas market. FERC has approved such arrangements in the past in other mergers.

The utilities’ mitigation plan drew fire from non-utility merchant generators and from municipal utilities in the Carolinas and Florida, challenging the plan as vague and purposefully imprecise. They argued that the plan would allow the new company to game the market so that it continued to possess, and employ, monopoly power by restricting sales and imposing market conditions that tilted markets toward the integrated utility incumbents.

FERC sided with the opponents of the merger, concluding that Duke and Progress had not adequately remedied the competitive problems identified in the agency’s September order. FERC’s order yesterday evening found that the utility plan “does not remedy the proposed transaction’s adverse effects on competition.” FERC said the mitigation proposal “does not eliminate the opportunity for the merged company to act anti-competitively. Although Duke and Progress describe the proposal as a virtual divestiture, it would not transfer control of the energy the applicants propose to sell from the merged company.”

FERC’s order does not reject the merger, but requires Duke and Progress to come back with a new plan to deal with the monopoly power of the new company. Whether they can accomplish that is far from clear and it would not be a surprise if the deal were to fall apart.

An article in today’s Charlotte Observer notes, “The ruling throws into disarray a series of plans and schedules that were contingent on the merger being approved quickly. The companies had hoped to close the deal this year.” The newspaper added that if the utilities submit a new plan to the feds, the state utility regulatory commission “might have to hold another round of public hearings on the merger.”

It’s not turning out to be a very merry holiday season for Duke Energy CEO Jim Rogers. The cost estimate for the company’s troubled Edwardsport, Ind., coal-to-gas project recently passed $3 billion, or some $1 billion over the original estimate, and state regulators are balking at sticking customers with the costs of the project.

This week, former Indiana utility regulator David Hardy was indicted on charges that he was negotiating with Duke for a job for one of his key employees at the same time he was presiding over a case where Duke was seeking to recover Edwardsport cost overruns. The Indianapolis Star commented that the indictment raises “questions about whether Hardy had compromised the agency’s mission of balancing the needs of utilities and ratepayers.”

Guest Blog: Rush Limbaugh, Unlikely Solar Hero

By Dan Auld

San Diego, December 4, 2011 — Will Rush Limbaugh save the solar industry? It looks that way for Toni Lynch in Allentown, Pennsylvania and Spiro Basho in Hicksville, New York.

That’s a hoot, given Limbaugh’s well-known antipathy toward anything remotely resembling renewable energy. Limbaugh has repeatedly taken to the airwaves to slam solar. But Lynch and Basho are both listeners, and Ox Bonding, a Florida financial firm, advertises on local stations that run the Limbaugh show, although not direct Limbaugh advertisers.

Like lots of other solar installers, the financial tsunami of 2008 wiped out many customers of both Lynch and Basho. And like a lot of other electrical contractors, through no fault of their own, they not only lost business, they lost their access to credit.

“When you see people on TV talking about green jobs or any kind of jobs, here’s what they usually do not know: Small contractors need a bond,” said Lynch. “And a bond is really a line of credit. And a lot of contractors just don’t have the cash or the credit score to do that anymore because of the crash of 2008. So they lose work, especially government work where bonds are required. And most people do not know that,” Lynch said.

He continues: “I was bidding on a solar installation job, part of the stimulus program, and I knew I needed a bond. Seven companies turned me down. I had just about given up when I was driving around listening to Rush Limbaugh. The commercial talked about how contractors could not get bonds anymore, but this company could do it. I told my wife, ‘wouldn’t that be good if they were telling the truth.’ They were.”

Sprio Basho had a similar experience in New York. This electrical contractor lost a lot of work in 2008, but he did what he had to do to hold on. “I might have been listening to the same commercial because I had the same problem,” Basho said. “I had been in business a long time. Did good work. But all of a sudden the bonding disappeared. I thought my business was going to disappear too because we were counting on installing solar to stay alive.”

And both Lynch and Basho were able to stay alive, because they were able to get bonds from the company advertising on the stations running Limbaugh, Ox Bonding. As a result, Basho’s company won a contract installing solar panels in a school district. Lynch’s firm was awarded a $1.8 million contract for several solar installations in Pennsylvania and New Jersey.

All because of Rush, and because of what happened at Robert Berman’s kitchen table when he was a teenager. “I listened to an insurance broker tell my dad he could not accept a bigger job because he did not qualify for a bond,” said Berman, co-founder of Ox Bonding. “My dad was a building contractor who did great work and had great references, but that was not enough for that insurance company. That’s why I started a bonding company for small contractors: There are a lot of good companies out there that do good work, with good records, and their customers love them. So we write their bonds and make sure they get working capital, too.”

Berman is not running a non-profit agency. He knows his company takes a risk every time it provides working capital; every time it writes a bond for a contractor. A bond guarantees that the contractor will finish the job and pay the subcontractors. If not, the job owner gets relief from the bonding company, which in turn can try to get its money back from the contractor.

“That’s why we look under the hood, check the books, call the customers, and really take a hard look if the company can do the job,” Berman said. “Our underwriters are experienced contractors, not just accountants. So they have a good idea of who is able to do what, and what the risk really is.”

To reduce its risk even further, Ox Bonding controls the distribution of funds for the job.
And if the contractor chooses, Ox Bonding can also issue working capital, pay the taxes, take care of payroll, negotiate with suppliers, and free up the contractors for what they really want to do: Build solar.

Dan Auld is a San Diego freelancer who often writes about the solar energy business

MIT Report: Both Irrelevant and Smart on Grid Issues

By Kennedy Maize

Washington DC, December 6, 2011—The Massachusetts Institute of Technology has rolled out the latest, and fifth, of its Future Of series of studies of U.S. energy policy, this one focused on the interstate electric transmission grid. The massive transmission tome contains little that’s new to anyone who has followed this subject.

Included in the MIT report is the predictable recommendation that the Federal Energy Regulatory Commission have the same ability to override state governments in siting interstate electric lines as it has for interstate natural gas pipeline. As anyone who has followed this issue is likely to believe, this isn’t going to happen. Congress stepped up to the policy plate in 2005 and hit a foul ball: the transmission provisions in the now irrelevant 2005 Energy Policy Act.

Congress was unwilling – politically unable – to assert national interest in the face of local objections; it has not become more courageous or nationally-focused since then. So forget about making it easier to site large, interstate electric transmission lines, regardless of whether that serves the nation’s interest in an interconnected, reliable grid, including a grid that is able to integrate large amounts of new renewable energy generated in areas remote from where it will be used.

The MIT report also calls for a “single agency” to act as a cybersecurity czar. This is also a predictable recommendation, one that strikes me as dangerous and also unlikely. My anxieties about single, overreaching agencies come from the experiences we have had in the past. It strikes me – a point I make in my soon-to-be-published book “Too Dumb to Meter, Follies, Fiascoes, Dead Ends and Duds on the U.S. Road to Atomic Energy” – that recreating the Atomic Energy Commission is a prescription for boondoggles, bureaucratic posturing, feckless research and development, and wasted taxpayer dollars. There’s a lot of evidence for this fear, the latest being the Department of Homeland Security.

While there is much that is worth having on the record in the latest MIT tome – which is also the case for MIT’s earlier work – not much in it will have a tangible, traceable impact. At least it kept some academics employed and some graybeards and has-beens connected.

But there is one area where I think the MIT transmission report is salutary (although it doubt if it will have a lasting impact). That is the section of the report that deals with the misleading term “smart grid.” This nomenclature has always bothered me, and I have argued repeatedly that my preference is for a strong grid rather than a smart grid. I’ve argued that, when it comes to the national high-voltage, long-distance grid, muscles are more important than brains. The “smart grid” moniker apparently was created at EPRI and has always smacked more of salesmanship than conveying clear ideas. In short, “smart grid” in my mind has always been a propaganda term, along with similar exercises in energy propaganda such as “green energy” and “green jobs.”

MIT seems to agree. Noting that much of the so-called smart grid is outside of its purview, as it deals with the localized distribution grid more than the interconnected interstate network, MIT nonetheless has words of wisdom regarding terminology (at page 20 of the report): “Because the term ‘smart grid’ means different things to different people and because its meanings are evolving, we have avoided reliance on the term in this report. We have focused instead on the broad goal of making the grid of the future more resilient, secure, efficient and reliable amid a variety of emerging challenges and, perhaps, to enable the provision of desirable new services. Seizing the opportunities related to recent or anticipated technical innovations can further these goals.” Amen.

I’ll be dealing more with the MIT study in the March-April edition of MANAGING POWER (managingpowermag.com).

Where Lights and Lungs Meet

By Kennedy Maize

Washington, D.C., December 2, 2011 — Think the tension between electric reliability and environmental protection is just theoretical hand-waving? Debra Raggio, assistant general counsel at GenOn Energy, the non-utility generator formerly known as Mirant, will tell you you’re wrong, and she can back it up. Raggio told her tale of regulatory Catch-22 at the late November Federal Energy Regulatory Commission technical conference on reliability.

The theoretical issue is whether Sect. 202 (c) of the Federal Power Act is superior to environmental regulations imposed under the federal Clean Air Act. The FPA section gives the U.S. Department of Energy to authority to direct operation of power plants to maintain bulk system reliability and stability, with potential criminal penalties. But, as Raggio told FERC, “Unfortunately, neither DOE nor any of the relevant environmental authorities has taken the position that authority under Section 202 (c) of the FPA trumps environmental law.” The language in the statute offers no guidance, nor is there any case law to clarify issues.

So consider the year 2001 travails of Mirant’s Potrero plant, an elderly (built between 1965 and 1976) and dirty 200 MW+ oil-and-gas fired plant located inside the San Francisco city limits, acquired from PG&E during California’s legendary restructuring. Under agreement with air regulators, Raggio explained, the plant was limited to operating only 877 hours a year. But the California Independent System Operator said it needed to dispatch the plant more often in order to maintain system reliability. DOE ordered the plant to operate during the state’s 2000-2001 electricity crisis, using the authority of Sect. 202 (c).

In order to keep Potrero running, Raggio explained, Mirant got “written approvals from local and federal regulators – the Bay Area Air Quality Management District and EPA” — so the plant could run longer than 877 hours. “Nonetheless,” said Raggio, “Mirant was subject to a citizen lawsuit by the City of San Francisco and environmental groups for exceedance of the 877-hour operating limit and was forced to settle the lawsuit at significant expense.”

This wasn’t just a case of those loopy lords of NoCal. Consider Mirant’s experience in Alexandria, Va., where state air regulators wanted to shut down an ancient (opened in 1949) 480-MW coal-fired plant that provides power to the District of Columbia across the river from the plant. On the day Mirant shut the plant under the Virginia air quality rules (Aug. 24, 2005), DC’s Public Service Commission filed a 202(c) petition with DOE to compel Mirant to operate the plant. After legal and bureaucratic toing-and-froing, the plant continued operating and Virginia found Mirant in violation of its air permit and fined the company.

Raggio noted at the FERC meeting that had Mirant shut the plant under Virginia’s orders, a major DC sewage treatment plant would have tripped off, spilling untreated wastewater into the river.

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The Little Breeder that Could

FERC Puts Duke-Progress Merger in Doubt

Guest Blog: Rush Limbaugh, Unlikely Solar Hero

MIT Report: Both Irrelevant and Smart on Grid Issues

Where Lights and Lungs Meet

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