Repair & maintenance | Management

A turnaround story

20 September 2011



When Exelon was planning to buy the Salem and Hope Creek nuclear power plants in 2005, the utility began to transfer the stations to its own management model. This article describes that model and how its implementation led to improved performance at the New Jersey plants. By Kenneth Ainger


On a single site in southern New Jersey stand two nuclear plants operated by Public Service Enterprise Group Nuclear: Salem, a dual PWR, and Hope Creek, a single BWR. For the past five years, these plants have consistently ranked among the industry’s best performers, with five consecutive annual capacity (load) factors exceeding 90%.

This level of excellent performance was not always the case. Salem-Hope Creek (SHC) had a mixed record of performance in its more than two decades of operations, occasionally, but never consistently, registering good performance.

In the mid-1990s, Salem was voluntarily closed for two years to address operational issues. By late 2004, the plant was again in a period of declining performance. Capacity factor dipped to 75%, and critical training programmes had drawn industry scrutiny. The stations were under US Nuclear Regulatory Commission special oversight including a substantive cross-cutting safety-conscious work environment (SCWE) issue.

Hope Creek was in the midst of what would become a 94-day refuelling outage, more than double the length of industry norms and one that would require NRC approval for restart. Plant performance had caught the attention of the media, increasing public scrutiny on the plant and its staff. Attempts to lead the plant out of its performance slump faltered and Salem-Hope Creek found itself with its third chief nuclear officer in three years and uncertainty about the future.

A short 12 months later, it was a strikingly different story:

  • Salem 1 had successfully completed a world record reactor head replacement outage in 25 days
  • Capacity factor exceeded 85% and would reach nearly 95% in 2006
  • Salem 2 had executed a 36-day refuelling outage.

These results were achieved while at the same time reducing 200 positions through a voluntary severance programme. (The staffing level was higher at SHC than that of comparable sites in Exelon’s fleet.) Most importantly, 2005 represented the beginning of a six-year run of sustained excellence, ending SHC’s long history of cyclic performance. NRC?issues were closed in 2006. The Salem units received regulatory approval for a 20-year plant life extension in June 2011; a similar life extension at Hope Creek is also expected.

What had been the cause of such a drastic change? In January 2005, in conjunction with a planned merger with PSEG, Exelon Corp, a part owner of Salem and the United States’ largest nuclear operator, signed an agreement with PSEG to begin providing operating services to SHC. Exelon brought its nuclear management model, an experienced management team and the resources of its fleet.

Origins

Exelon Corporation was formed in 2000 from a merger between the Philadelphia-based PECO Energy Company and the Chicago-based Unicom Corporation. In the process, 17 nuclear units were merged into a single fleet under the ownership of Exelon Generation Company, LLC, a wholly owned subsidiary of Exelon Corporation. (The former PECO plants are Limerick 1&2 and Peach Bottom 2&3. The former Unicom plants were Braidwood 1&2, Byron 1&2, Dresden 2&3, LaSalle 1&2 and Quad Cities 1&2. Plants run by AmerGen, a PECO-British Energy joint venture, were Clinton, Oyster Creek and Three Mile Island 1). The challenge for the Exelon nuclear management team was to transform numerous and diverse practices into a single fleet-based operational framework.

The Exelon nuclear management model had its origins in Unicom’s experience in the late 1990s turning around its own fleet. In the late 1990s, Unicom’s five nuclear stations in northern Illinois were experiencing their own performance problems. With a new management team and a commitment to operational excellence, the Unicom fleet, five plants and ten units, achieved record levels of performance within a relatively short time.

By the time of the Exelon merger in 2000, a model for successfully managing a nuclear fleet had emerged based on the lessons of the Unicom turnaround. The merger created the need to formalize and document this model so that it could be applied to the new larger Exelon fleet. The Exelon nuclear management model was created as a repository of the proven methods for operating a nuclear fleet at consistently high levels [Figures 2&3].

About the model

The nuclear management model is a systematic, formal, detailed guide to every aspect of safe nuclear plant operations. The underlying tenets of the management model are captured in a 173-page copyrighted handbook that has been developed over 11 years. The handbook is supported by nearly 2000 specific policies, programmes, processes, and procedures that guide all aspects of the management and operation of a nuclear fleet.

The model is premised on strong centralized governance with clear objectives and performance standards. It defines how to conduct business at the corporate and nuclear facility level. In addition, it establishes a safety-conscious and results-driven organizational structure that dictates how to set priorities, develop and execute plans, define and implement programmes, and monitor and assess performance. The model also covers the standards for such things as behavioural fundamentals. These standards are defined and enforced by a set of common policies, programmes, and processes implemented across the fleet.

The model is governed through Exelon’s corporate functional area managers (CFAMs). The CFAM holds a unique role in governing and overseeing each of Exelon’s 26 functional areas (for example maintenance, chemistry, and training) [Table 1]. CFAMs provide programmatic leadership, expertise and support to the fleet. The goal of a CFAM is to achieve top industry performance in their functional area. The CFAM accomplishes this by the identification of all issues and application of industry best practices and progressive elevation or escalation of issues or performance gaps.

Salem-Hope Creek

In January 2005, Exelon assumed operational oversight of SHC with the goal of applying the proven Exelon nuclear management model to SHC to accelerate change and achieve the same levels of performance as within the existing Exelon Fleet. The improvement strategy had five key elements.

The model

From the beginning, the commitment was to use the Exelon nuclear management model as the driving force for long-term sustainable improvement. This accelerated change in two ways. First, it eliminated the need to spend time and management attention on assessing and developing the new model for Salem-Hope Creek. That successful model had eluded SHC for years. Second, it brought credibility to the changes that needed to be made. Often in a turnaround situation, much time and attention is given to ‘selling’ the changes to the plant staff. In this case as one worker stated, “If we knew how to operate as well as you do then we would not need you here; let’s get on with it.”

Management team

Exelon provided upwards of 30 personnel in key management and line positions to work with the SHC team. This team, including the chief nuclear officer and the two site vice presidents, was well-versed in how to run a plant within the Exelon model. Through coaching and leading by example, this team was able to quickly inculcate the model in the SHC organisation.

Fleet resources

SHC is a stand-alone nuclear site; Exelon has ten sites with a combined 8700 employees, including 600 corporate employees whose role is to support stations with expertise and guidance. Immediately, SHC gained access to the Exelon fleet resources and experience. As SHC transitioned to the standard management model, these fleet resources were able to provide direct and timely guidance – no different than any other plant in the fleet. Over the course of the year-long transition, SHC received more than 100 targeted support visits for elements such as outage readiness reviews, temporary loaned work planners, and modification project management. In addition, there were rotational opportunities for SHC staff to visit an Exelon station to observe first-hand how the model worked. This support was in addition to the 15,000 hours of assessment and support SHC would receive as part of the management model gap assessment that would occur over the summer.

Transition team

In many other major change efforts, the very people who are needed in the plant focusing on improving operations are instead consumed with the demands of the change effort. The transition team was designed to ensure that did not happen at SHC. Recognizing that they faced a major change effort, Exelon formed a full-time team of approximately 15 people to help guide the transition. This transition team acted as project manager for the change effort, buffering site line management from the demands and distractions of the project. Another role was to be a point of contact between SHC and the rest of the fleet, expediting requests for support from the fleet and protecting SHC from being overwhelmed by the same help from the fleet. The transition team brought structure, order and support resources that allowed line management to focus on improving site operations with limited distractions.

Three-phase implementation approach

Early on it was recognized that the application of the management model to Salem-Hope Creek had potential to place stress on an organisation that was already weary of change. The solution was a three-phase approach.

Phase I focused on building the foundation for future improvements. During this phase, the site implemented 73 immediate priorities (for example, outage readiness programme, station duty officer role, and material condition improvement programme) and completed a reorganization to align better with the Exelon accountability model. This set the stage for the full implementation of the Exelon management model.

Once the foundation was established, attention turned to completing comprehensive assessments, gap analyses, and action plans to implement long-term management controls, implementing tools and organizational structure for lasting performance improvement. During phase II (gap closure planning), 26 functional area teams (for example, maintenance) led by a corporate functional area manager conducted detailed assessments of gaps between SHC and the Exelon standard. These assessments covered organization, programmes and processes, staffing, budgets, and performance indicators. Rigorous change management plans were developed to guide the transition of each functional area to the new model.

The final phase involved full implementation of the model. A formal integrated site implementation schedule was approved and used as the basis for monthly tracking and monitoring of progress. Formal status meetings were held monthly with site senior management to ensure successful follow through on actions.

In a short time, aided by a team that fully embraced the Exelon model as the ‘playbook’, SHC was able to achieve a pace of change that would have been impossible before.

Within two years, the planned merger between Exelon and PSEG ended. Plans were put in place to transition SHC back to PSEG control. But, by then the management model had taken hold at SHC. It fundamentally changed the way that SHC was managed and performance gains did not evaporate when the plant transitioned out of Exelon operations [Figure 1]. This sustained performance is the greatest testament to the lasting impact of the management model.

The experience at Salem-Hope Creek reinforced the lesson that excellent performance is not automatic nor is it self-sustaining. If excellence is dependent upon a particular leader it is always at risk. If it is achieved through a comprehensive management model, true sustainable excellence is achievable.

Exelon Nuclear Partners (a division of Exelon Generation) is now marketing the nuclear management model to other nuclear power plants worldwide.


Author Info:

Kenneth Ainger, business development director, Exelon Nuclear Partners, 4300 Winfield Road, Warrenville, Illinois, USA 60555

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Interest from China

Recently, one of China’s nuclear operators has expressed interest in Exelon’s management model.
In January 2011, Exelon Nuclear Partners signed a memorandum of understanding with China’s largest nuclear power plant owner and operator China National Nuclear Corporation (CNNC).
CNNC had expressed interest in the techniques and principles adopted by Exelon in areas including business planning, performance management processes and benchmarking of key parameters including nuclear safety, outage management and cost control.
Based on the MoU, future service support agreements were expected to be complete by the summer of 2011. Discussions as contemplated under the memorandum of understanding continue.



Tables

Table 1: Summary breakdown of the nuclear management programme by functional area and type

Salem & Hope Creek plants Salem & Hope Creek plants
Figure 2: Net capacity factor Figure 2: Net capacity factor
Figure 3: Fleet production cost Figure 3: Fleet production cost
Figure 4: Salem-Hope Creek net capacity factor Figure 4: Salem-Hope Creek net capacity factor


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