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FirstEnergy Hedging Power As Ohio Reactor's Restart Slips
Thursday April 17, 4:28 pm ET

NEW YORK (Dow Jones--FirstEnergy Corp. said Thursday that it has hedged replacement power into the summer months in order to cover the expected June restart of its shuttered Davis-Besse plant near Toledo, Ohio.

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"We were fully hedged through the spring and made some power purchases to cover our position in the summer months as a matter of prudence," said company spokeswoman Kristen Baird.

FirstEnergy Corp. (NYSE:FE - News), which owns Davis-Besse, hasn't yet announced an exact date of the restart - nor can it do so until it receives clearance from the Nuclear Regulatory Commission. However, FirstEnergy Nuclear Operating Company, the unit that operates the plant, told federal regulators Tuesday that the plant might not produce electricity until mid- to late June.

For competitive reasons, Baird declined to say how far into the summer the company has purchased power, but as temperatures warm, power prices will rise.

The Akron-based utility has estimated replacement power at about $15 million a month in spring and expects to pay about $20 million a month in the summer, although estimates for this summer's power prices aren't yet available, Baird said.

So far the outage has cost FirstEnergy more than $400 million for repairs and replacement power.

The plant has been closed since February 2002 when, during a routine refueling outage, 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.

Since then, the reactor cap has been replaced, but several key tests remain that could determine whether more repairs are needed before FirstEnergy can bring the reactor back online.

A reactor pressure test, which is key to the unit's restart, will help operators establish the cause of acid stains on the bottom of the reactor vessel.

FirstEnergy wants to make sure that boric acid stains seen around 52 small nozzles on the reactor bottom weren't caused by leaking.

The nickel alloy in those tubes has proven vulnerable to cracking, a problem that contributed to the corrosion on Davis-Besse's reactor lid.

FirstEnergy believes the stains were caused by acid leaking from the reactor lid that dripped over the side. However, if inspections determine that the stains came from the lower nozzles, the company has said it is prepared to try a repair technique that the industry uses to patch upper nozzles.

If the tests, now scheduled for May, prove there are no leaks the plant could start up about a month later, in mid to late June, said Todd Schneider, spokesman for FirstEnergy's nuclear operations.

On April 4, the company said the pressure test would be conducted in late April or early May.

Separately, concerns over the condition of two emergency pumps called "high pressure injection pumps," could also delay the reactor's restart.

Company engineers are debating whether to replace the pumps or simply repair them, said Schneider.

Depending on whether FirstEnergy modifies the system or replaces the pumps, that work could take a week to several weeks, the company has said.

A decision on the pumps had been expected at the end of March.

While the company works towards restart, an NRC panel overseeing repairs and management changes at the plant will have the final say.

"There are a number things they need to do and that the NRC needs to inspect before the plant starts up," said NRC spokeswoman Viktoria Mitlyng.

Regulators are to decide within the next month whether Davis-Besse has improved procedures to protect workers from radiation.

-By Jennifer Morrow, Dow Jones Newswires; 201-938-4377; jennifer.morrow@dowjones.com


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