The US nuclear industry has decided that it’s time to take aggressive action to improve its operational efficiency. Leaders have looked hard at the competitive landscape. They’ve clearly recognized that while they produce a valuable, desirable commodity, their production costs are not competitive.
Many of them aren’t willing to give up their markets and valuable assets without a fight. In the fall of 2015, they decided to focus on eliminating wasteful efforts and begin prioritizing efficiency alongside their traditionally strong core competencies of safety and reliability.
Note: The CO2 emission-free nature of atomic fission is an inherent attribute that comes with the technology choice. So is the elimination of other noxious air and water pollutants. End Note.
On April 22, I spoke with two senior executives from the Nuclear Energy Institute about their efficiency program. My guests were Maria Korsnick, the Chief Operating Officer, and Tony Pietrangelo, senior Vice-President and Chief Nuclear Officer.
No one is more knowledgable about the high priority initiative, which has been named, “Delivering the Nuclear Promise.” It’s an industry-wide effort that is scheduled to last for three years with expected effects that will live for many productive years.
Here is how Ms. Korsnick began our discussion.
I’ll start with the name, Delivering the Nuclear Promise. Why did we name it that and what does it mean? We stepped back and looked at the value proposition for nuclear. We said nuclear was always intended to be very safe, it was always intended to be very reliable and, if you can remember way back when, it was going to be “too cheap to meter.”
So our challenge is that we’ve delivered on the promise of being very safe, we have a very strong safety record. We delivered on the reliability. Last year, as a US fleet we were at about 92% from a reliability perspective. We took a hard look at the cost side and said, not so much.
The idea of delivering the nuclear promise was essentially that we would continue our focus on safety and continue our focus on reliability but really sharpen our pencils from an efficiency perspective and better understand how we can do a better job on the efficiency side.
It’s a cost as well as revenue piece. We want to be as efficient as we can at running the plants and also make sure that the product we’re producing, that carbon free product, is valued in the market place.
It would be difficult for anyone who has ever worked in the commercial nuclear industry, looked at a typical plant organizational chart, or observed the way that the plant is administered and guarded to fail to notice that there are many inefficiencies that can be addressed.
The industry has a long tradition of complying with requirements; which may be part of its Nuclear Navy roots. Unfortunately, the commercial users of the technology and operating modes invented and refined by ADM Rickover haven’t always applied the “questioning attitude” that his program also demanded of all participants.
Now that they’ve realized that cost is an object and that excessive costs can destroy valuable plants almost as easily as improperly operating them, leaders have decided it’s a good time to ask “Why are we doing things this way? Is there a more efficient and effective way to accomplish the task. Is the task in question useful at all, or should it be planned for elimination?”
Ms. Korsnick described the early steps of the program, which took place in the fall of 2015, as a group of Chief Nuclear Officers “shined the flashlight” into all areas of plant operations, focusing specifically on cost information. Member companies were asked to provide their last ten years worth of financial information with expenditures broken down into major categories like work management, training, and the corrective action program.
After reviewing the information for several days, the group established focus areas where spending had increased significantly or where the area represented a large portion of the total expenses. A Chief Nuclear Officer was assigned to be in charge of each focus area. The CNO’s gathered a team of cross-company and cross-functional subject matter experts from the industry to engage in detailed investigation.
The number of assigned team members is approaching 1,000 if all of the working teams are included. Industry employees don’t have to be formal members of a team to submit ideas for evaluation and possible implementation.
Early screening produced an initial list of approximately 180 areas that could be targeted. Since that is too many to address at one time, the list was narrowed to the 35 or so items that seemed to have the largest potential gain or could be implemented quickly for early wins.
Mr. Pietrangelo provided a more information on the types of efficiencies that are being addressed.
What we’re looking for is a lot of administrative gains because as an industry we’ve layered a lot of processes on top of processes over the years. So when we look at efficiency, it’s really trying to get the work done in the most efficient way. Free up the worker and provide some more accountability such that we can do this work smarter, safer and more efficiently.
Based on comments provided here on Atomic Insights, I asked Mr. Pietrangelo about the non-value added aspects of preparing for inspections and responding to corrective action program requirements. He acknowledged that those were among the areas being investigated but also provided a list of the other dozen or so focus areas.
Training is such a big part of the industry’s expenditures that it has been broken up into at least three separate topic areas, each with its own focused team.
It might strike some people as a bit incongruous to spend so much time and effort [aka cost] on trying to find efficiencies and reduce work efforts. However, that is the way that the industry often addresses difficult issues and achieves its admirable results.
It’s important to know that the Efficiency Bulletins receive a wide ranging review that includes EPRI, INPO, NEI, and a team of experienced chief nuclear officers before thy are released.
Ms. Korsnick explained that this review process is designed to avoid the probability that changes related to doing things better would be nullified by inspection team suggestions or comments if they observe that the implementation is different from the standard way of doing things.
Getting buy-in in advance should allow the changes to be implemented and accepted without having to invest costly effort to explain the improvement decisions to outside inspectors.
It’s encouraging to see the nuclear industry engage in this kind of “all hands on deck” effort improve efficiency and cost competitiveness. Our chosen technology efficiently produces vast amounts of high quality electricity with small material inputs and few environmental impacts.
Unfortunately people have proven they can bloat almost any task or facility if they’re not encouraged to ask “how much” and “is this worth doing?” It’s never easy to go on an organizational diet and effectively slim processes while maintaining performance, but the nuclear industry has a habit of overcoming challenges when it prioritizes solutions to those obstacles.
For more information about Delivering the Nuclear Promise see Mareia Korsnick’s post on LinkedIn https://www.linkedin.com/pulse/delivering-nuclear-promise-maria-korsnick