TVA's nuclear program hampered by management problems

After stumbling badly, the Tennessee Valley Authority's effort to save its $15 billion nuclear program is struggling to get back on its feet. Some still believe, however, that it is headed in the wrong direction. Because of myriad safety problems, the nation's most ambitious nuclear power program has not produced a kilowatt of energy since the summer of 1985.

``The board, the local politicians, the Nuclear Regulatory Commission have always been of one mind - that the root problem is management,'' says Jerry Smith, a former quality-control engineer for TVA nuclear plants.

The man hired by the TVA last January to set the program right, retired Adm. Steven White, a veteran of the nuclear navy, was acclaimed as TVA's last, best hope of salvaging its massive nuclear investment.

Many still see Mr. White and his team of associates - dubbed the ``saltwater network'' for their ties to the US Navy - that way, including TVA's two directors.

But White and company have been so swamped with conflict-of-interest questions - from the federal Office of Government Ethics, from United States congressmen, from Congress's General Accounting Office - that White went on leave last month and is negotiating a return.

Now, TVA managers say they believe they have found a way around most of the conflicts of interest. The problem begins with White's contract. Although he is the TVA's top nuclear manager, a job with a federal pay cap of $72,500, he is actually paid via Stone & Webster, an engineering consulting firm, with which TVA has contracted for his services. Under this arrangement, White earns $355,000 a year, more than any federal employee, and can still collect his $53,000 annual Navy pension.

White has brought on hundreds of managers and engineers under similar, if less lucrative, contracts. Many of the contract managers have then hired and supervised employees from the same consulting firms. Under White, $10 million in TVA contracts has gone to Stone & Webster.

To the TVA directors, the only way to attract the top nuclear talent TVA badly needs is to pay competitive wages. To the Office of Government Ethics, the arrangement is illegal.

TVA's solution is to move some 14 borrowed managers out of line positions where they could steer contracts toward their own firms, and put them in advisory posts to permanent TVA employees. Other borrowed managers were kept in place, but employees from the same company were moved out from under them, even if four or five levels of command were between them, a TVA spokesman says.

TVA claims the informal approval of government ethics office director David Martin for the new plan.

But it has skeptics as well. Rep. Ron Wyden (D) of Oregon, who sits on the House Energy and Commerce Committee's Oversight and Investigations panel, is one. ``The impression I have is that this is a kind of musical chairs to avoid the conflict issue. We will continue to look into it,'' he says.

Jerry Smith sees a problem deeper than the conflict-of-interest issue. With White at least temporarily out of the picture and many of the outside managers moved aside, he says, ``the good ol' boy network is back in. ... We're back to square one, or maybe worse.''

Mr. Smith is one of several safety review engineers who were harassed and intimidated, according to a Department of Labor judgment, after finding safety lapses in TVA nuclear plants.

According to Smith, the root problem at TVA is a proud and insular culture that grew out of TVA's success at building dams and power plants. It did not adapt well to the highly regulated, safety-centered nuclear age, he says.

Evidence has mounted of flawed welds, stretched and crimped wiring, untested pipes, and allegedly lax or corrupt inspections at TVA's nuclear plants. All five completed units are shut down. Construction has stalled on four more units. Plans for eight more have been scrapped altogether.

Some members of Congress, like Tennessee Democrat Jim Cooper, see White as the management repairman who can set the program on its feet and train the permanent TVA staff to run it. Others see White more concerned with bringing nuclear plants on line as soon as possible than with solving their very expensive problems.

``You sure get a feeling that a lot of this is cosmetic, to put the best face on things,'' says Mr. Wyden of White's management moves, which included dissolving the independent safety review board Smith worked on.

``That's what scares me,'' Smith says. ``I don't see anything being fixed. I see a lot of paper being shuffled and reports being filed. ... The overriding problem is that we had no quality assurance. But now the plants are built. Is it a quality product?

``Who ... knows?'' he says.