Washington (Platts)--29May2008

Arizona Public Service has launched an investigation of an "unusual
incident" that occurred Wednesday during the ramp-up of its 1,245-MW Palo
Verde-2 nuclear power reactor, which has been offline for refueling since
April 1, the utility said Thursday.

"This was not an emergency situation or a significant event, but what
happened was unusual," said APS spokesman Jim McDonald. "We will do a very
thorough root cause analysis so we understand what took place, and then finish
up the outage," McDonald said. Palo Verde-2 was originally expected to be
offline about 45 days.

According to a event report filed by APS with the US Nuclear Regulatory
Commission, the unit "operators manually tripped the reactor, as directed by
procedures, when four" control rods, "slipped to the fully inserted position
while conducting low power physics testing following Unit 2's fourteenth
refueling outage."

"Unit 2 was critical and at normal operating temperature and pressure
prior to the trip. Following the manual reactor trip all remaining [control
rods] inserted fully into the reactor core. This was an uncomplicated reactor
trip. No emergency classification was required," the report said.

"Unit 2 is stable at normal operating temperature and pressure...and
there were no adverse safety consequences as a result of this event. The event
did not adversely affect the safe operation of the plant or the health and
safety of the public," it added.

The same-sized units one and three at the Wintersburg, Arizona, station
are currently operating at full capacity, Fallon said. Palo Verde-3 in 2007
was in Column 4 of NRC's action matrix, requiring the highest level of agency
oversight short of a plant shutdown.

--Daniel Guido, daniel_guido@platts.com