FirstEnergy
Faced String Of Difficulties
By Jonathan Finer
Washington Post Staff Writer
Tuesday, August 19, 2003; Page
E01
AKRON, Ohio, Aug. 18 -- As investigators work to figure out
where and how the nation's biggest blackout began, they are closely
scrutinizing the operations of a midwestern energy company that had
been struggling with a series of setbacks long before the massive
power failure.
In the past two years, FirstEnergy Corp. of Akron has
discovered a gaping hole in the nuclear reactor at its Davis-Besse
power plant, lost a lawsuit brought by the Environmental Protection
Agency and announced plans to restate its earnings to correct
mistakes in its accounting.
Then, over the weekend, investigators identified several
power lines owned by FirstEnergy as the likely trigger point for the
power failure Thursday that pulled the plug on a large swath of the
Midwest, the Northeast and Canada. Today, the company's stock
plunged and at least one law firm filed suit against the company,
seeking to represent everybody who lost electrical power that
day.
The North American Energy Reliability Council, which is
investigating the blackout, has since stressed that it has reached
no conclusions on the cause, and FirstEnergy said today was too
early to lay blame.
"What happened on Thursday afternoon is a very complex
situation, far broader than the power line outages we experienced in
our system," the company said in a statement.
Still, company officials concede the dispute comes at a bad
time.
"We're the first to admit, we've been through a rough
patch," Ralph DiNicola, FirstEnergy's director of communications,
said in the lobby of his company's red-brick Akron headquarters.
"And we've taken responsibility where it is due."
DiNicola disputed the theory that the company's lines could
have left so many millions without power, saying, "It would be the
equivalent of you plugging in a hair dryer and shutting down the
entire city of Cleveland."
The company has admitted that its alarm system, which might
have notified operators of mounting problems in its system Thursday,
was not functioning. But the company has said its grid monitoring
system was working. DiNicola also said that on the day of the
blackout, FirstEnergy noted "irregularities" throughout the
Northeastern Interconnection, the power grid that was affected by
the outages. Frequencies were fluctuating, as were voltages, he
said. "Our lines went down, but our customers didn't lose power
until everyone else did. It is too soon to say that we were at
fault. We don't think it is possible."
FirstEnergy is a holding company that operates 16 power
plants in Ohio, Pennsylvania and New Jersey, serving 4.4 million
customers. It was formed in 1997 from the merger of several other
power companies in the region.
Today regulators and some consumer advocates say that,
while not necessarily a model utility, FirstEnergy has served its
customers reliably. "Their service quality has been good, their
distribution system is solid, and they have a good reputation,
overall," said Alan R. Schriber, chairman of the Public Utilities
Commission of Ohio, which regulates electricity distribution in the
state.
"As far as we are concerned, before this incident, their
household customers have been served well," said Carah Brody of the
Ohio Consumers' Council.
But the nation's fifth-largest power company has also been
a lightning rod for criticism. "Historically, their rates are 30 to
60 percent higher than in the rest of the state, and they have
admitted to prioritizing profit above maintenance and safety," said
Shari Weir, head of Ohio Citizen Action, an environmental group with
100,000 members that has wrestled with the state's private utilities
for some 25 years.
But Glenn S. Krassen, general counsel for a consortium of
Northern Ohio municipalities that was formed to save citizens money
by buying power in bulk, calls FirstEnergy a "rogue utility, shoddy,
and irresponsible." Like many of the company's detractors he cites
the litany of recent problems.
© 2003 The Washington Post
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