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Posted on Sat, Sep. 06, 2003 story:PUB_DESC
CEO sheds light on blackout issues
FirstEnergy's Burg talks about hearing, investigation, local reaction

Beacon Journal business writer

The following is an edited transcript of a 35-minute telephone interview Friday between Akron Beacon Journal business reporter Betty Lin-Fisher and FirstEnergy Chief Executive and Chairman H. Peter Burg. Also on the phone was FirstEnergy spokesman Ralph DiNicola.

The interview came the day after Burg testified before the House Energy and Commerce Committee concerning FirstEnergy's role in the Aug. 14 power outage that affected an area serving 50 million people from Detroit to New York.

During that hearing, Rep. Edward Markey, D-Mass., grilled Burg, saying the Akron-based utility ``should not have a license to drive a car, let alone operate a nuclear power plant.''

Markey's comments alluded to other problems that have recently plagued FirstEnergy, including the shutdown of its Davis-Besse nuclear power plant after a corrosion hole was detected during an inspection.

FirstEnergy also recently shocked investors by restating several quarters of earnings, and a court recently ruled the company had illegally rebuilt its Sammis coal-fired power plant without installing proper pollution control equipment.

After the blackout, transmission line failures in FirstEnergy's territory became the focus of investigators, and at least one other utility operator said FirstEnergy failed to notify it of problems in Northeast Ohio. An investigation into the cause of the massive outage is under way.

A: It's been unbelievable, really, in terms of the kind of support that the community has given not only me, but our entire organization in terms of encouraging us to continue to tell the facts as we know them.

Q: Has this been affecting you personally?

Please see CEO, D8


`We know we're striving

to do the right things'

Continued from Page D1

A: It does hurt. It's hurtful to me. But it's even more hurtful in the sense that I know it's hurtful to our employees. When people make statements that maybe are a little premature and point the finger, it's got to be hurtful to our employees.

Q: Let's move on to yesterday and your testimony. How do you think it went?

A: I thought that the committee really was trying to focus on ultimately finding out what happened and what were the interrelationships and how can we prevent something like this from happening again.

Q: There were points where some of the congressmen were pretty pointed in their questions to you. Were you expecting that?

A: Well, that's their job. They were asking serious questions. We still have questions that we're trying to find the answers to. This is what we've been saying for three weeks, let's find the answers -- and the reasons why -- to a very complex situation; and I think, for the most part, that's what they were trying to do.

Q: OK.

Q: Well, you know my next question is about Markey. (Lin-Fisher laughs.)

A: Well, OK, ask the question.

Q: I didn't get to see it, but did he have the last word or did you get to respond? And if you didn't get to respond, what would you have said?

A: I found it interesting that the committee hearing lasted for five hours on the clock.... Congressman Markey was the last person to participate, and he chose to make a statement, not a question, at the very conclusion of the hearings, and that's his prerogative. We have a very dedicated group of some 14,000-plus employees who strive every day to provide safe and reliable service to our customers.... We know what kind of people we are and what we try to do every day. And I think if you can live with yourself and you know you're doing the right thing, that's the good way to go on about life, I'd say.

Q: How do comments like Markey's and portrayals in the national media that FirstEnergy is a tarnished company with multiple challenges square with what you know? What are you doing to try to challenge or change that image for people?

A: We're trying to stick to and focus on what we have to do in life. That is to go on, if you will, each and every day. We have acknowledged issues with Davis-Besse (nuclear power plant) from day one. We have said that in hindsight there were some signs there that pointed to some issues and we didn't see them. We've addressed those, we're making tremendous progress, I think, on the Davis-Besse return to service, and hopefully that will be done here this fall. And that will be a positive.

Q: I understand you have to do all of your homework before you figure out what's wrong. At this point, are there any things that you do know went wrong versus what there still is to be figured out?

A: Well, we know some things that happened. You question why a line might have tripped out when it was only at 40 percent loading, for example. You've got to go in and dig in and find out why that happened. Why did an additional line maybe trip out later that again was not overloaded. Those are the kinds of things you have to investigate. You have to find out how was system control center systems working that day? Was it functioning according to the way it should have been functioning? And finding out why those things were happening.... What was going on elsewhere? Let's find out those facts and then were there some kinds of interrelationships going on. Finally,... the transmission system, if you will, that has been built in this country was really built to take the generation from a so-called local utility, I'll say, to really its customer centers. It wasn't built to act as a superhighway.... One of our recommendations that we had in our testimony that we think is maybe most important is not only do we have to pass... mandatory standards with respect to the transmission grid -- but we have to re-evaluate what are the appropriate standards themselves given this new relationship.

Q: What kinds of investments do you think need to be made in the power grid? Should they be private or public funds?

A: I think that may depend upon the kinds of things we find out. It also may depend upon (the fact that) different areas of the country may need different upgrades. I know we're spending or have spent over $400 million over the last four years on our transmission system. I know we're spending most of $60 million, I believe, just in Ohio just this year on our transmission system. And in addition some $100 million in (the) vegetation management, tree trimming, aspect of our operation, because that's important, too.

Q: Do you think the isolated event that we lost power in Northeast Ohio -- do you think that will happen again? Because this wasn't a storm, this wasn't because of flooding. But you also don't know what caused it.

A: Was this the perfect storm or what? We don't know the answer to that question. We do know, I will tell you this, we do know that the three or four transmission lines that we've been talking about have excellent reliability records, and in particular we've looked at those over the last two and a half years. And I think three of those were lines that haven't even been out of service over the last two years. So, again, we think something was going on in the world that day that we have yet to find out about.

Q: There have been significant challenges the company has gone through in the last 18 months, and I'm not going to go through them all, but how do you answer critics who say FirstEnergy is a poorly managed utility?

A: Well, I try to look back at accomplishments. I think we do have outstanding customer service, and we can show you our surveys on that. And we strive to do that. I think we provide a service not only in a safe and reliable way, but we try to do it in an ethical way and act in an ethical way at all times. If we do something that should be improved upon, we take steps to change our operations; and we've done that in the past and continue to do that. We know we're striving to do the right things. I mean, that's the best way you can handle it. You know you're doing the right thing. People can talk. People can make accusations. In many cases they may not have all the facts or the circumstances.

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com
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