Memories of a Movement – PG&E INVESTS IN A DREAM

Memories of a Movement by Mark Evanoff



“Norman Sutherland was intrigued by the atom
and did everything he could to stimulate it
in industry. Sutherland didn’t have to be
pulled into atomic power, he was a natural
enthusiast. He got us into the geysers. He
was willing to try anything new and he wasn’t
afraid to make a mistake.”

Emery B. Dowell
PG&E’s first Atomic Information Specialist

No electric utility grew faster than the Pacific Gas and Electric Company during the 1950s. Industry and families moved to California and PG6cE built new power plants to meet the energy demand. Electricity generating capacity increased more than 250 percent between 1945 and 1960. The company sold gas and electricity to almost every community in northern and central California. Utility engineers constantly evaluated new methods to generate electricity.

Williard H. Nutting, a retired PG&E engineer contends the federal government applied pressure on the utility to develop nuclear power. “Plants were solicited and encouraged by the federal government,” he said. “It wasn’t financial, it was political. Eisenhower wanted nuclear power developed. Other countries were developing it. The company was encouraged as a matter of national interest to develop nuclear power. This was going to be an important source of energy.”

Former Atomic Energy Commission staff members deny that any development pressures came from their office. “PG&E was a greedy bunch of bastards, I think they were trying to get in on the ground floor. Power was getting expensive. Forecasts were tremendous,” one former public relations officer said.

John Kiley, of Bechtel Corporation and an author of the 1951 study with PG&E on the feasibility of dual purpose reactors, said his company wanted to study nuclear power. When asked if the federal government pressured them to develop the technology, he said, “Hell no. We wanted to develop nuclear. We thought it was economical and we still think it is economical.”

Nutting further explained that the fear of public power was another motivation for developing the technology! “The Federal government had been a competitor in the power supply business. We wanted to be in on the development of atomic energy and show that private industry could build such plants without government financing.” However former PG&E atomic information specialist Emery B. Dowell said that PG&E wanted to develop nuclear power as an alternative to ‘hydro’ and that it was k not developed to avoid federal power in the PG&E service area.

The prospect of federal nuclear power was never a real threat to any utility in the United States. Although some members of Congress pushed for it, they never gathered the support necessary to pass the legislation, and the AEC never had an interest in selling nuclear electricity to private utilities or directly to the public. Whatever the motivations for PG&E to develop nuclear power, credit for designing the program belongs to Norman Sutherland, an ambitious young employee who began working for the company as a lamp lighter, and became the company’s president and general manager.

Emery B. Dowell said of Sutherland, “He was a hell of a guy. I guess he was the last utility executive to rise through the ranks. He wasn’t a lawyer and he wasn’t an engineer. He was an extraordinarily able man who learned through experience every aspect of the company’s operation.

“Norman Sutherland was committed to atomic energy. He was a good executive. r Hydroelectric power supplied fifty percent of the electricity in the PG6cE service system. All of us could see the end of it. Sutherland knew the fossil fuels would go up in price. He was committed to a third fuel.

“He was intrigued by the atom and did everything he could to stimulate it in industry. Sutherland didn’t have to be pulled into atomic power; he was a natural enthusiast. He got us into geysers. He was willing to try anything new and he wasn’t afraid to make a ‘mistake.”

Willard Nutting continued the story. “Norman Sutherland was the leader for nuclear power development. By 1951, he was the man in charge. Sutherland worked on everything very hard. We saw him at meetings throughout the country where companies gathered to share notes on the technology.

“Our contribution to the development was our knowledge of power generation equipment. Utilities assemble units that make up a power plant. A reactor was a steam generator like any other boiler. It will produce steam, and we install a turbine to use the steam. We put together a power plant. The training is not unique. The controls and instruments are like a conventional plant.”

Nutting said no scientific debate about the technology’s viability went on within the company. Under the leadership of Sutherland, PG&E competed with other utilities for AEC nuclear power plant development contracts . Originally the AEC restricted the number and type of nuclear power plants that could be built, and encouraged utilities to pool their resources and build joint projects. In 1953, PG&E formed the Nuclear Power Group, whose members included the American Gas and Electric Company f Commonwealth Edison, and the Union Electric Company. Utilities that later joined f included Central Illinois Power Company, Illinois Power Company, and Kansas Power Company.

The consortium submitted a bid to the Atomic Energy Commission in 1954 to build and operate a 60,000 kilowatt pressurized water reactor, but lost the bid to the Duquesne Light Company who built the Shippingport Reactor, the nation’s first full scale commercial reactor.

By 1955, seventy-one companies researched nuclear power in the United States. That year the AEC offered incentives to develop certain kinds of reactors including: waver of licensing fees, free use of AEC labs and test facilities, and financial assistance for some types of research. The Nuclear Power Group proposed to the AEC in March 1955 that it construct a 180,000 kilowatt boiling water reactor near Chicago, Illinois. Commonwealth Edison would retain ownership of the $45 million facility, and members of the consortium contributed $15 million toward construction. Nuclear power plants cost more to build that fossil fuel plants, and the utilities thought it appropriate to share the extra expense among themselves in exchange for learning about the technology .Construction began on November 28, 1956. PG&E invested $3 million. General Electric provided the reactor.

Dresden I developed several problems during its operating life. The stainless steel cladding surrounding the fuel rods cracked and began leaking radioactive gases. Radioactive ‘crud’ built up in the primary cooling system and the plant had to be shut N down after only 19 years of operation.

Back in California Norman Sutherland actively promoted nuclear power and stressed the importance of private enterprise’s involvement in perfecting the technology. At the 1956 dedication ceremony for the conventional units at Humboldt Bay, he devoted his speech to nuclear power.1

“. . . the appetite for electricity one day will exceed the supply available from conventional plants,” he warned the audience. “Nuclear power is the answer. There is already available more than 25 times as much energy [from uranium] as in all the known deposits of fossil fuels.”

However, Sutherland urged caution against developing nuclear power too quickly. “Until it is economic, it can only be used to an extent justifiable for development purposes. It is not acceptable for a commercial role today, because customers would have to pay more for their electricity, and there is no need for them to do so.”

Sutherland explained that PG&E considered making the conventional units at Humboldt nuclear, but the cost made it prohibitive. However when the economic y breakthrough came, the company would be ready with the experience and expertise needed to add nuclear plant to their other resources. “Nuclear power plants, when they become economic, will supplement but not replace conventional plants,” Sutherland stressed.

“Perhaps you have heard the question raised: ‘Is America behind in the development of atomic-electric power?’ The answer, definitely, is ‘No’. A brief look at the record will demonstrate the American supremacy is unchallenged. The facts show that our government, the Atomic Energy Commission and American Private enterprise have no intention of allowing our supremacy to diminish.”

At the time 153 reactors were under construction or planned in the United States compared to 41 in Great Britain, 27 in the Soviet Union and 37 in all other countries combined. Sutherland boasted the United States produced more electricity than the Soviet Union, Great Britain, Canada, West Germany, Japan, France, Italy and Sweden. “Almost everybody in this country can get electricity and everybody can afford to use it.” He told the audience not to worry if commercially competitive nuclear plants appeared in some corners of the world before the technology was economically competitive in the United States. Other countries didn’t have conventional fuels.

“There is much progress to be made before nuclear plants can be given a full-time job in American electric industry . . . We’re not in a race to see who gets there first,” Sutherland cautioned. “Our need is not for kilowatts. The need is for scientific and technical progress which will make nuclear electricity economic and therefore useful.”

Sutherland proceeded to attack the proponents of public power and the advocates of a stepped up nuclear power program financed by the federal government. “Among those questioning whether American industry is doing an adequate job in this field, are s some recognizable voices singing some recognizable tunes. They are the voices which have chanted incessantly for nearly three decades for government ownership of the electric utility industry. Their chant plays on emotion. . . Looking at the nuclear electric field they have discovered there is a strong emotional appeal in a fanciful race with the Communists for atomic kilowatts. They mask out the economic facts of life, and spread alarm as though there were a new heat wave in the cold war. They conveniently forget that industry was permitted in the field just two years ago. They ignore the progress made in that short time. They ignore the fact that our nation’s most qualified minds are dedicated to the work, and they take no cognizance of the fact that the millions of investors in American industry have put a tremendous investment to work to develop the non—military potentials of the atom.

“These political-power partisans would have the public believe that if another country builds an atom power plant, under any circumstances, and regardless of its operating efficiency, or whether it operates at all, American industry has fallen behind in the job. To solve their bogus riddle, they advocate that the Federal Government should handle America’s nuclear electric research and development. If the real objective of these advocates of statism were to be realized, there would be government monopoly of the electric industry in the atomic age.

“Of course these advocates are not the ones who ask questions about the progress we are making. Other people, of good intention, and the public at large want to know what is going on and how we are doing, and they have a right to know. As these projects proceed in construction there will be more and more tangible evidence of progress and less opportunity for the conspirators of collectivism to capitalize on phony fears. There is every reason to have faith that the American people will not be misguided. American industry‘s full scale participation assures our continued lead in nuclear research and development.

“You can be sure that the Pacific Gas and Electric Company will continue to do everything that can be done to bring you all the power you want with the best possible service at the lowest possible cost.”


Before building Dresden, General Electric wanted to gain experience building and operating nuclear power plants. Pleasanton, California offered an ideal location to build a test reactor. Its close proximity to the General Electric nuclear power division headquarters and the PG&E corporate headquarters in San Francisco made it a convenient training center for both companies. PG&E provided an old generator to make it a complete nuclear power plant that could supply electricity to the utility’s customers.

Ironically, the generator was salvaged from the S.S. Donbass, a tanker once owned by the Soviet Union that broke up in the North Atlantic.

“When the company got into Vallecitos, the manager of the Public Relations Division pointed to me and said, ‘you are our nuclear power expert, become as expert as an advertising man can be,”’ Dowell remembered. “I was excited about the assignment. It was a plumb and I was young and ambitious. There were not many people in the electric utilities that had been asked to do what I did.” Dowell worked with PG6cE management to make Vallecitos a showcase for nuclear power. Business executives and students training to become nuclear engineers came to Vallecitos to learn about atomic energy.

While Dowell educated himself about atomic energy, he designed a public relations program to excite the public about the technology. “The economic studies that General Electric was doing and the literature I found all indicated that it was economical,” Dowell remembered. Lewis Strauss, the Chairman of the Atomic Energy Commission said it was going to be ‘too cheap to meter’. It was my job to reinforce that concept.  I’d quarrel with anyone who would say PG&E tried to be deceitful. I don’t think anyone I believed they were taking risks. They were our customers, we didn’t want to blow them up.”

Vallecitos received the first AEC commercial operating license for a nuclear power plant. The 1957 opening provided a needed public relations boost for the fledgling nuclear power industry. Lewis Strauss himself attended the dedication ceremony to congratulate PG&E and proclaim that the United States led the world “with the most comprehensive program for the development of atomic power. Vallecitos is an irrefutable answer to those who contend that American industry cannot be entrusted with major responsibility in the development of nuclear power, that industry cannot be relied upon to shoulder the financial risk associated with the present state of the nuclear art.”2

Unfortunately for PG&E, most of the news media in the San Francisco Bay area didn’t cover the event. Bing Crosby announced his engagement to Cathy Grant that day and the happy couple stole the newspaper headlines. The business community on the other hand, noticed the event. Business Week reported the opening of the plant as a $10 million gamble. According to the story, the investment showed that General Electric believed nuclear power was a fuel of the future. “No one can predict just exactly when competitive atomic power will be achieved, but industrial researchers are certain to have a hand in it.”3

PG&E made use of the plant for their own educational efforts and offered tours to anyone worried about the dangers of nuclear power. School children and political leaders toured the facility. However PG&E never told the public about accidents that occurred at Vallecitos. On March 10, 1960, workers removed a defective fuel rod from the cooling pond before the radioactivity had time to decay. The pressure changes caused the rod to “burp” emitting high level radioactive material. Forty-eight people went to the hospital. The utility never reported to the public the exact dosages received by the workers.4

PG&E retired Vallecitos in 1963 after it completed its useful life. [But General Electric continued to operate a second experimental reactor at the Pleasanton site until it was ordered closed by the Nuclear Regulatory Commission due to the presence of earthquake faults. In 1982, the NRC ruled that it was possible for General Electric to retrofit the plant to make it earthquake safe.]

With the retirement of Vallecitos, PG&E launched its own nuclear power program. The first full scale nuclear power plant opened at Humboldt Bay. Excavation continued for what was to be the largest nuclear power plant in the world, located at Bodega Bay. Nuclear power played a major role in the utility’s expansion plans and the company announced plans to build several new atomic power plants in 1963 throughout the state. Atomic energy became the preferred technology, before its viability had been proved.

Nuclear power wasn’t doing well in the rest of the country. Some individuals A and the business magazines declared nuclear power was dead. Former Atomic Energy Commission Chairman, David Lilienthal became particularly vocal about problems in the field. At a lecture series delivered a Princeton University in 1963 he said, “The Atomic Energy Commission clings to the belief which events long ago should have shattered, namely the peacetime atom represents revolutionary sources of energy which might change a nation’s way of life. Today we know better. Nevertheless, the Atomic Energy Commission persists in seeking to justify a prodigious scale of effort, unheard of expenditures of public money, and a fantastic absorption of the nation’s scientific, technical and industrial resources. . . More deplorable and costly are programs which the AEC has launched less in the interest of scientific progress than of propaganda.”5

A Congressional study found further problems with the atoms-for-peace program. Exporting nuclear power, just as scientists predicted, enabled other countries to acquire the ability to build nuclear weapons. “In the absence of lessened tensions and “safeguards,” the study found, “any achievement of widespread atomic power could in fact make the arms limitation program more difficult.”6

The business community shared doubts about the program. Barrons Magazine wrote, “Without a clear and present need, technological progress cannot be sustained for long, no matter what subsidies the government lavishes on it. . . The atoms-for-peace projects are floundering because they have ignored almost completely the hard facts of the market place.”7

“The whole program has proved a giant fizzle,” the front page story read. “Domestically nuclear technology has advance too slowly because of lack of hard driving competition. Under the lure of easy subsidies, contractors have paid little heed to comparative costs. . . even in high cost areas of the United States there will be no market for such power for years to come.”8

David E. Pesonen, one of the early opponents of PG&E’s nuclear power program reflected, “The direction of the nuclear power program has been determined less by logic, guts and foresight and reason, than by a colossal mistake in planning.”

Footnotes for Chapter 2

1. Norman Sutherland, speech at the dedication of the Humboldt Bay conventional units, October 12, 1956, reprinted from “A Progress Report on Nuclear Electric Power,” Pacific Gas and Electric Company, 62-8676 10 M 657.

2. Lewis Strauss, quoted in “GE Bets Atomic Future is Near,” Business Week, November 9, 1957, pp. 194-199.

3. ibid.

4. Notes of David E. Pesonen of a conversation with Amas Cornish-, February 5, 1963

5. David Lilienthal, “Sane Nuclear Po1icy,” Bulletin of the Atomic Scientists, May 20, 1963

6.”Review of the International Atomic Policies and Problems of the United States,”

Report of the Joint Committee on Atomic Energy, October 1960.

7. “Nuclear Fizzle, Excess Costs Have Short-Circuited Atoms for Peace,” Barrons, May 20, 1963.

8. ibid.

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