New York State’s $1.2 million penalty against the owners of the Indian Point nuclear plant points a finger once more at failed oversight by the Nuclear Regulatory Commission.

The penalty against the Louisiana-based Entergy Corporation for violations of the Clean Water Act results from the 2010 transformer explosion and fire that caused an emergency shutdown of the plant’s Unit 2 reactor and an oil spill of more than 10,000 gallons into the Hudson River.

The fine was set in a consent decree from the state’s Department of Environmental Conservation that is contesting relicensing of the Indian Point plant. DEC has denied Indian Point a state-required water quality permit to operate the plant — the decision was based on a history of radioactive leaks from the plant into the Hudson River that include strontium-90 and tritium.

The 2010 transformer fire is a replay of events that occurred in 2007 when a fire followed an explosion of Unit 3’s transformer.  Both fires are linked to failed bushings—ceramic insulators on top of the transformer.

Environmental groups, who have joined with New York State in fighting relicensing of the 40-year-old plant, spoke out in response to the $1.2 million fine against Entergy and said the 2010 transformer fire and oil spill could have been prevented if the NRC had taken proper regulatory action following the 2007 fire.

“When the first transformer fire occurred years back, it should have signaled the need to change out all the transformers in this aging system,” said Manna Jo Green, Environmental Director for Hudson River Sloop Clearwater. “Failure to insist on this mechanical upgrade demonstrates Entergy’s wait-and-see attitude, and faulty oversight by the Nuclear Regulatory Commission.”

Philip Musegaas, Hudson River Program Director at Riverkeeper, agreed. “The facts show that the fire and oil spill could have been prevented, had the NRC done its job of safely regulating Entergy.”

Riverkeeper conducted its own investigation into the cause of the 2010 transformer explosion and found that Entergy had failed to properly notify the state about the spill within the required time limit and downplayed the significance of oil spill in a misleading status report that said contractors “were on-site within hours after the [transformer] failure-to ensure there would be no environmental impact.”

Musegaas said, “The facts show that Entergy was aware of problems with the transformer part that failed, but did nothing to address it.”

Indian Point’s transformer problems continue. In late February, Unit 3 was shut following a buildup of hydrogen and other gases in transformer oil and the transformer was taken offline.

Clearwater said: “Entergy’s reluctance to replace aging, malfunctioning equipment is intolerable in the post-Fukushima world.  While an oil leak is not comparable to the disastrous meltdown in Japan a year ago, transformer explosions are very dangerous events, and Entergy’s track record of longstanding, repeated violations and preventable mishaps at Indian Point indicates a cavalier attitude towards legal and regulatory compliance that ignores and denies the lesson of Fukushima, that ‘it could happen here.’”

Together Riverkeeper and Clearwater have filed 20 legal contentions raising issues over legal and regulatory violations in the relicensing battle. Indian Point’s current licenses for its two operating reactors expire in 2013 and 2015. Relicensing hearings will be scheduled later this year.

In February, the NRC dismissed contentions brought by both groups that called for the NRC to suspend the relicensing process until “lessons learned” from Fukushima are reviewed and integrated into new safety regulations for nuclear plants. The NRC has claimed that such lessons would be “generically addressed” and are not within the scope of the license renewal process.

In response, Musegaas said, “The limited steps the NRC is taking on a national basis are too generic to be effective – so this ruling leaves us without an adequate evaluation of severe accident mitigation at either the national level or on a case-specific basis.”

The NRC’s Atomic Safety and Licensing Board, which reviews and rules on contentions, announced Thursday (April 5) that board members will tour the plant on May 8.

Musegaas said the visit would be “a key step in the process leading up to historic relicensing hearings for Indian Point” when New York State and groups fighting to shut down the plant “present what we are confident is a winning case that will lead to the judges’ denial of Entergy’s relicensing application.”