My name is Suzanne Leta and I am the energy associate for New Jersey Public Interest Research Group, NJPIRG. I'd like to thank Dr. Kymn Harvin, a former PSEG employee and whistleblower at the Salem reactors, and Rev. Chris Miller from the Council of Churches and the Greater New Jersey United Methodist Church for speaking today. I would also like to thank Eric Epstein of Three Mile Island Alert and Oscar Shirani, a former Exelon employee and whistleblower in Illinois for contributing their experience and knowledge.

We are here today to set record straight about Exelon's safety record. Exelon wants to be New Jersey's new utility provider, serving two million additional New Jersey customers and taking over the operation of three additional reactors in the state. The safety of millions who live around the plants is in their hands. From what we know about Exelon's safety record, there is a lot of room for improvement.

Exelon has put profits over safety time and time again. Whether it is staffing reductions, poor maintenance oversight or the silencing of employees with safety concerns, Exelon has enough skeletons in the closet to give pause to state regulators who will decide whether or not to approve the merger. We believe that unless Exelon fixes its safety problems, state regulators should do everything they can to oppose this merger.
Here in New Jersey, Exelon and PSEG have consistently put profits over public safety at Salem and Oyster Creek.
Just last week, the PSEG chose to restart the Hope Creek reactor without fixing a faulty recirculation pump until their next refueling outage. The outage is not until the spring of 2006, even though a new pump will be ready to install this March.

But that's just the most immediate example. Looking at its operations around the country over the past five years, Exelon has had a host of problems with safety at their plants.

At Salem, safety culture at Salem is substandard. Three independent assessments of PSEG's management at the Salem and Hope Creek reactors concluded that PSEG didn't want to pay the necessary costs to keep the site in good condition.

Oyster Creek, the oldest operating nuclear power plant in the country, also has its share of staffing and maintenance problems since Exelon bought the plant in 1999 for a mere $10 million. They have cut staffing levels in half, from about 800 employees to 450 now.

The safety culture had deteriorated so badly that workers could no longer accept the status quo. In the summer of 2003, the 217 IBEW employees at the plant went on strike in part because of safety concerns. Ed Stroup, the local IBEW President, said the company proposed sweeping changes in workplace rules that would allow it to transfer employees to positions for which they were inadequately trained or skilled.

Exelon has also been cited by the NRC for several maintenance violations at Oyster Creek. In January 2004, the NRC found that Exelon failed to prevent a 2003 cable failure providing power to two back-up generators. The same cable failures had already occurred twice before--in 1996 and again in 2001. If Exelon management had taken the time to review the original design documents to understand the full scope of the problem, they would have likely prevented the failures from occurring a third time.

In Pennsylvania, Exelon's management at Three Mile Island and Peach Bottom is marred with failure to correct serious problems. Eric Epstein, Director of Three Mile Island Alert, has provided detailed overview of Exelon's track record, and will be available to speak with the press via phone. A few of the highlights include:

Between 1999 and 2002, 143 workers and short-term contractors at Three Mile Island and Peach Bottom tested positive for drugs or alcohol, according to bi-annual fitness for duty reports. In August 2001, the NRC's Office of Investigation documented criminal behavior by two of Exelon's Emergency Preparedness personnel.

In April 2002, the NRC cited Exelon for 18 violations that posed safety risks at Three Mile Island and Peach Bottom, and in November 2003, the NRC increased its inspections after four unplanned shutdowns at Peach Bottom. Most recently, in April 2004, the NRC cited Peach Botttom for deficient performance and announced that at Three Mile Island, personnel didn't consistently recognize degraded conditions and did not identify them in a timely manner.

In Illinois, Exelon's home state, problems with plant management take the cake. At Quad Cities and Dresden reactors, Exelon repeatedly attempted to increase power production by a full twenty percent-with dangerous consequences. Exelon's safety culture or lack thereof has also been a major problem in Illinois. Oscar Shirani, a former Exelon quality assurance manager who blew the whistle about the safety of Holtec-produced dry casks, was ultimately fired for raising safety concerns.

First, I'll discuss the power uprate debate at Quad Cities and Dresden.

In March 2002, Exelon increased power production at Quad Cities Unit 1 by twenty percent. Leaks were soon found in the control system for the main turbine, but Exelon restarted Unit 1 anyway. By April, the plant was vibrating so much that a drain line broke off one of the pipes, and the insulation and vibration monitors were shaken off from four steam pipes.

Exelon fixed the drain line, but in June, staff discovered that the water droplets being carried away by the steam were four to five times higher than they had measured in the past thirty years. When they finally reduced the output to below the plant's original level, they found a gaping hole in the steam dryer. Instead of replacing the dryer, they simply replaced the plate and added braces.

In July, they restarted the plant again, with the power uprate. The following May of 2003, they noticed another unusual increase in water droplet levels. They dropped the output down again to below the original level and noticed more steam dryer damage—a ¾-inch wide, 9-inch long crack. Despite the serious damage, Exelon does not plan to replace the steam dryer until a scheduled refueling outage in the spring of 2006.

Despite the obvious fact that the power uprates were causing numerous and repeated problems at Quad Cities Unit 2, Exelon also increased the power output at Quad Cities Unit 1 and at Dresden Unit 2. In October 2003, Quad Cities Unit 1 water droplets were measured at unusually high numbers. Exelon reduced the output to lower than original levels and in November, they shut down the plant for steam dryer repairs. The same month, Exelon discovered cracks in the steam dryer at Dresden Unit 2.

During the repairs at Quad Cities Unit 1, they found that vibrations broke the vent line, which prevented the relief valve from opening in the case of an accident. They also found that the steam dryer had a piece of the outer hood bank missing-the piece measured 6 ½ by 9 inches. Nevertheless, they restarted the plant after repairing the steam dryer and never finding the missing pieces. Exelon does not plant to replace the steam dryer until a scheduled refueling outage in March 2005. Making matters worse, Exelon recently extended their refueling outage from every eighteen months to every twenty-four months, another erosion of the company's safety margin.

Finally, I would like to tell the story of Oscar Shirani, who could not be here to speak today. For a more detailed version, please see the attachment I have included in the press packet. Mr. Shirani is a nuclear engineer who was employed in the nuclear industry for 23 years. He started with Commonwealth Edison, which was later taken over by Exelon as a structural engineer.

For most of the 1990s, Shirani served as a senior lead quality assurance inspector for ComEd and Exelon. Mr. Shirani and his team found so many design, manufacturing, and regulatory code violations with Holtec-produced dry casks that in May 2000, he convinced Exelon to issue a Stop Work Order to force the company to correct its faulty practices.

Holtec International, based in Marlton, New Jersey makes dry casks are to be used for storing high-level waste at thirty-three of the nation's nuclear power plants, including Indian Point in New York, Quad Cities and Dresden in Illinois. According to the company's website, they plan to begin loading spent fuel into Holtec dry casks at PSEG's Hope Creek reactor at the Salem site starting in 2006.

Soon after Exelon issued the Stop Work Order, Shirani was asked to conduct a utility-wide audit, especially because ComEd's Dresden reactors were going to be the first to use the casks. Shirani submitted his final audit in August 2000, reporting nine significant findings with the Holtec dry casks.

On December 13, Exelon sent a censored audit to Dr. Ross Landsman, in charge of dry casks for the NRC in the Midwest. Although Shirani didn't know it at the time, Exelon altered the conclusion of his August 4 report, stating that Shirani's findings had been resolved.

The following January, Dr. Landsman sent a memo to Bruce Jorgensen, NRC Chief of the Decommissioning Branch, citing serious concerns with Holtec dry casks. Landsman noted, "the audit was done in June-July 2000, and still the issues are not resolved. Worse yet, I just discovered that the Audit Team Leader [Shirani] is being moved sideways on site, out of the audit group. These findings will be dropped." Landsman concluded, "This audit indicates that in no way do they [Exelon] meet our Region III requirements in implementation of the program. Cost and scheduling are controlling the work."

Shirani was eventually transferred out of Exelon's nuclear division to the financial division-common practice for potential whistleblowers. Shirani stayed within the financial division until he was laid off the following October—too late to file a formal whistleblower complaint with the NRC.

If Exelon is allowed to acquire PSEG, it will create the largest consolidated utility in the country. A utility of this size will be far less accountable to the state of New Jersey to provide the cleanest, safest, most reliable electricity.

Today, we have highlighted only one of many concerns with a potential Exelon/PSEG merger-public safety. Considering both companies' safety records, a merger is a dangerous combination. Governor Codey and the Board of Public Utilities should be diligent about protecting public safety when considering a potential merger between Exelon and PSEG. First, they should require independent reviews of the safety culture at all Exelon-owned plants. Second, they should review the legality of Exelon's potentially criminal censorship of Shirani's dry cask audit and conduct an independent audit of the casks currently in use at Exelon and PSEG-owned plants.

If these investigations reveal that Exelon is not a company that puts public safety first and acts on the safety concerns of its employees and contractors, Governor Codey and the BPU should do everything they can to oppose this merger. Codey and the BPU have a responsibility to protect the public, and in the case of a potential Exelon/PSEG merger, the lives of New Jerseyans may depend on it.