COLUMBIA, S.C. - March 16 - The troubled plan by the Department of Energy (DOE) to use nuclear fuel made from surplus plutonium was recently dealt a grave blow with the loss of all reactors that had been expected to use the fuel.

Duke Energy Corporation has allowed its contract to use the controversial mixed oxide fuel (MOX) in four Duke reactors in North and South Carolina to lapse, throwing into question the survivability of a program that has stumbled from one problem to another over the last decade.

In its annual filing with the Securities and Exchange Commission (SEC) on February 27, 2009, Duke revealed that the contract to use MOX had "automatically terminated on December 1, 2008" after a failed attempt to renegotiate the contract with Shaw AREVA MOX Services (MOX Services), contracted by DOE to carry out the MOX program. Duke has said it "is interested in receiving a future proposal from MOX Services for the use of MOX fuel," but right now the planned use in the Catawba and McGuire reactors has been terminated.

Due to this negative turn of events for the misguided and costly MOX program, the public interest organization Friends of the Earth is again calling for the program to be terminated once and for all.

"Given the lack of reactors to use the plutonium fuel and ongoing problems over the last decade with this program, it's past time for Congress to pull the plug and halt construction of the MOX plant at the Savannah River Site," said Tom Clements, Southeastern Nuclear Campaign Coordinator with Friends of the Earth in Columbia, South Carolina.

A DOE official has informed Friends of the Earth that DOE is speaking with three utilities about possible MOX use and that Duke may reenter into negotiations. It is believed that the Tennessee Valley Authority could be interested, though, like other utilities, it would have to conduct a lengthy MOX test to validate use of the fuel.

"The events around the loss of the Duke reactors should serve as a red flag to other utilities that their participation in the troubled plutonium program will be fraught with risks and obstacles," Clements said.

Friends of the Earth and the Union of Concerned Scientists revealed in August 2008 that a test of MOX fuel in Duke's Catawba-1 reactor had failed due to abnormal fuel assembly performance and the that the "lead test assemblies" (LTAs) were pulled from the reactor after only two of the necessary three 18-month irradiation cycles. The failure of this test, the groups claimed, left DOE without the required information necessary to certify with the Nuclear Regulatory Commission the performance of the fuel, being tested for the first time with weapons plutonium.

It is unknown what impact the failed LTA test has had on Duke's decision to withdraw from the MOX program but DOE's lack of guaranteeing a reliable schedule for MOX delivery, due to the failed MOX test and continuous delays in the project, have likely caused Duke to reconsider use of the fuel. Such fuel made from high-quality weapons plutonium has never been used before.

The test MOX fuel had been manufactured with U.S. weapons plutonium shipped from the Los Alamos National Laboratory via Charleston, S.C. to a now-closed French MOX plant (Cadarche), making a repeat of the 54-month irradiation test difficult. Irradiated fuel pins were evidently removed from failed MOX test assembles stored in the Catawba spent fuel pool and shipped to the Oak Ridge National Laboratory for testing. Information on analysis of the test fuel is not available. No matter which reactors use MOX, the test will have to be repeated for three 18-month cycles, causing further uncertainty, delays, and cost escalation.

Despite the lack of reactors to use the plutonium fuel, MOX Services is continuing to use taxpayer dollars to construct a $5-billion factory at the Savannah River Site (SRS) in South Carolina to make the fuel from 34 metric tons of "surplus" weapons-grade plutonium.

On March 4, 2009, the Government Accountability Office (GAO) release a report entitled Department of Energy: Contract and Project Management Concerns at the National Nuclear Security Administration and Office of Environmental Management (http://www.gao.gov/products/GAO-09-406T), which underscores potential problems in reliably delivering MOX fuel to a utility. Concerning the MOX plant at SRS, GAO stated that "the project's schedule, in addition to other problems, does not adhere to a key practice that is fundamental to having a sufficiently reliable schedule-specifically, MFFF project staff have not conducted a risk analysis on their current schedule using statistical techniques. ... Consequently, NNSA cannot adequately state its level of confidence in meeting the MFFF project's completion date, and NNSA's schedule for the project therefore may not be reliable." Thus, utilities are nervous if their need for a reliable schedule for fuel delivery can be met.

Friends of the Earth has also been informed by a DOE official that DOE offered Duke conventional enriched uranium (LEU) fuel if it could not meet a MOX delivery schedule but negotiations for that LEU fuel did not produce positive results before the Duke MOX contract expired on December 1.

Notes:

Duke Energy Corporation "Form 10-K" annual report filed with the SEC, Feb. 27, 2009

http://idea.sec.gov/Archives/edgar/data/1326160/000119312509041096/d10k.htm

"In 1999, Duke Energy Carolinas entered into a contract with Shaw AREVA MOX Services (MOX Services; formerly Duke COGEMA Stone & Webster, LLC) to purchase mixed-oxide fuel for use in the McGuire and Catawba nuclear reactors. Under this contract, beginning in 2007, MOX Services would fabricate batches of mixed-oxide fuel from stockpiles of plutonium derived from surplus weapons at a facility under construction at the U.S. Department of Energy (DOE) Savannah River site in Aiken, South Carolina. Mixed oxide fuel is similar to conventional uranium fuel. Following review and approval by the NRC, four MOX fuel lead assemblies, fabricated in France, were irradiated for two fuel cycles (approximately three years) in Unit 1 of the Catawba Nuclear Station. In 2008, Duke Energy Carolinas and MOX Services engaged in discussions to renegotiate the terms of the contract prior to its expiration on December 1, 2008. The parties were unable to reach agreement and the contract automatically terminated on December 1, 2008. Duke Energy Carolinas has communicated to MOX Services that it continues to support the objectives of the surplus weapons disposition program and is interested in receiving a future proposal from MOX Services for the use of MOX fuel." (page 14)

FOE-UCS news release on Failed MOX test in Dukes Catawba Reactor, August 4, 2008:

http://www.foe.org/nuclear-fuel-test-failure-raises-concerns and http://www.ucsusa.org/news/press_release/nuclear-fuel-test-failure-0140....

UCS-FOE 4-page Backgrounder of August 4, 2008 on Failed MOX Test in Duke's Catawba Reactor - "AREVA Fuel Assembly Problems Doom DOE Plutonium Fuel Test" - available on request

For Duke's June 10, 2008 report to the NRC, with first public mention of failed MOX test, go to the NRC's ADAMS digital library and search for "ML081650181" at www.nrc.gov/reading-rm/adams/web-based.html.

For an April 2008 AREVA presentation that discusses the abnormal fuel assembly growth problem, go to NRC's ADAMS digital library and search for "ML081300390."

Shaw Areva MOX Services October 18, 2008 solicitation "To All Nuclear Utilities in the USA" for more reactors to use MOX available on request.