AKRON -- FirstEnergy Corp. said the damaged Davis-Besse nuclear
power plant cost the company $235 million last year.
The company reported a fourth-quarter loss last week of $30.8
million, or 10 cents per share, on revenues of $3 billion.
In the same period in 2001, FirstEnergy earned $168.6 million, or
64 cents per share, on revenues of $2.3 billion.
For the full year, FirstEnergy's earnings were down 2.7 percent.
The Davis-Besse costs were $97 million for the quarter, including
operating, maintenance and replacement energy expenses. The per
share charges for the costs were 19 cents for the fourth quarter and
47 cents for the year. The company has said it expects to spend
around $400 million in repairs and replacement energy to get the
plant back online.
Davis-Besse has been shut down since last February when it was
closed for maintenance. A month later a leak was discovered that had
allowed boric acid to eat nearly through the 6-inch-thick steel cap
covering the plant's reactor vessel.
FirstEnergy said it expects the plant to be ready for restart in
April. The reopening date will be determined by the Nuclear
Regulatory Commission.
The company's earnings statement did not break out specific costs
for fixing the plant. FirstEnergy spokeswoman Kristen Baird said the
cost just for replacing the plant's reactor head has been estimated
at between $50 million and $75 million, but such costs are not all
charged against current earnings.
"There is a tremendous amount of (NRC) inspection activity that's
got to be done, but they've indicated to us that those inspections
dovetail into our schedule," Gary R. Leidich, executive vice
president of FirstEnergy Nuclear Operating Co., said in a conference
call with securities analysts.
Paul Ridzon, an analyst covering FirstEnergy for Cleveland-based
McDonald Investments Inc., said the earnings statement "was pretty
much in line with my expectations."
He said the company's stock dropped slightly recently in part
because of concern about a U.S. Senate subcommittee hearing Thursday
on nuclear safety. NRC officials answered questions about how the
agency handled the problems at Davis-Besse.
For all of 2002, net income was $629.3 million, or $2.14 per
share, including the effect of accounting changes, Davis-Besse costs
and other unusual charges. The Davis-Besse charge against earnings,
after taxes, was $139.2 million.
Without the charges, earnings totaled $1 billion, or $3.40.
Revenues totaled $12.15 billion.
FirstEnergy in December projected earnings from operations in the
range of $3.30 to $3.45 per share.
Originally published Saturday, February 22, 2003
