Contractors risked worker lives and 'catastrophic failure' at Anchorage power plant, state charges

Alaska workplace safety officials have issued two dozen citations and proposed $882,000 in fines to three contractors that they say put workers' lives at risk during the commissioning of the new city-owned power plant in East Anchorage in September.

The Alaska Occupational Safety and Health section of the state Labor Department said on Thursday the contractors created a hazardous environment at Power Plant 2A, when a pressure relief valve was removed from a steam piping system on Sept. 17. The system was then operated without any other safeguards in place, the agency said.

Two days later, a dangerous spike in pressure occurred, with "violent shaking" of the piping system, when the open line allowed condensed water to enter a superheated pipe. The condensate rapidly expanded into steam, causing the jolting and pressure spikes.

The event led Municipal Light and Power to ask operators with Universal Energy to shut down the system to avoid a "catastrophic failure." The operators delayed a shutdown for so long that ML&P evacuated its own employees, the Labor Department said in a written statement.

Other employees at the site were not evacuated, said Greg Cashen, deputy commissioner of labor.

"There were no fatalities or injuries, but there could have been," Cashen said.

In an email, he added: "Employees could have experienced death or serious injury due to thermal burns from high pressure steam, or by being struck by equipment during a violent failure."

The risk created a need for strong fines to deter similar safety violations that might occur in the future, he said. A temporary relief valve was installed on Sept. 20, and the original relief valve was reinstalled Sept. 21, he said.

The fines and citations are subject to challenge by the contractors. Plant owner ML&P was not cited because of the quick evacuation once the unsafe conditions were discovered, the agency said.

Penalties were brought against:

* Universal Energy, with 13 citations and $182,000 in fines.

* Price Gregory International, with five citations and $280,000 in fines.

* Quanta Power Generation, with six citations and $420,000 in fines.

The penalties are considered "willful citations" because the contractors showed "indifference" toward workplace safety and because of the "suppression" of employee concerns, the state said.

Officials with two of the companies did not return phone calls seeking comment.

In a prepared statement, Quanta Power Generation said it "takes seriously the assertions made by the Alaska Department of Labor and Workforce Development on March 23, 2017. While we disagree with their assessment, we are cooperating fully with the investigation. Quanta Power Generation makes worker and community safety our utmost priority."

Universal Energy was responsible for getting the plant running. Price Gregory International was responsible for site safety and construction management, Cashen said.

The companies are based in Houston, Texas.

Quanta Power Generation, a subsidiary of Quanta Services of Houston, Texas, was in charge of project management during construction that began in 2014. The $306 million plant expanded the city's 1970s-era George M. Sullivan Power Plant 2.

With the plant in the commissioning phase when the incident occurred, city-owned ML&P did not "have control of the site," Cashen said. Instead, the contractors were in charge, he said.

High-pressure steam is used in the electric generation process at the plant. Steam was also used to clean debris out of pipes in mid-August 2016. Quanta Services had begun the steam blowing then, during the commissioning of the power plant. The process was scheduled to take two weeks, according to an ML&P media statement at the time.

State regulators on Thursday did not say what activity was underway when the event occurred.

Julie Harris of ML&P public relations said the utility would not comment "on legal matters" involving other organizations.

"I can say that the safety of our employees is paramount and so we take adherence to occupational safety and health standards very seriously," Harris said.

Cashen said he could not provide copies of the department's inspection reports because the case is ongoing.

He said the department's Occupational Safety and Health section initiated an inspection at the plant Sept. 26 after receiving a report about the incident.

They found that pressure spiked in excess of 175 pounds per square inch during the "flashing event" on Sept. 19.

A release of steam at those pressures could have seriously burned people or worse, said Jim Posey, the general manager of ML&P until 2014. He said he signed the contract with Quanta in 2013, stressing that safety was critical.

"It doesn't take 50 pounds of pressure in steam around someone to do pretty serious damage to skin or life, so that's what makes this fairly serious," said Posey, now a consultant on power generation and other issues.

He said $882,000 in fines is large, clearly meant to discourage similar behavior. He said the companies will likely challenge it.

Cashen said Quanta, doing business as Phoenix Power Group, was assessed a $70,000 fine for each citation, the maximum amount allowed under law.

He said Price Gregory's and Universal Energy's individual fines were reduced from $70,000 because of the company's relatively small sizes.

He said numerous citations were issued to each company because of the many standards that must be met during the complicated work involved in commissioning a power plant.