Home     News     Communities     Classifieds     Coupons     Cars     Jobs     Customer Service
 
Home
News
  Local News
  Local Sports
  Nation/World
  Ohio News
  Obituaries
  Opinion
  Technology
  Space & Science
  Weather
 
Communities
Classifieds
Coupons
Cars
Jobs
Customer Service
Network Newspapers
  The Advocate,
  Newark
  Chillicothe Gazette
  Coshocton Tribune
  The Fishwrapper
  The Granville
  Sentinel
  Lancaster
  Eagle-Gazette
  The Marion Star
  News Journal,
  Mansfield
  News-Messenger,
  Fremont
  The Pataskala
  Standard
  Telegraph-Forum,
  Bucyrus
  Times Recorder,
  Zanesville

  Thursday, March 6, 2003

 Local News


FirstEnergy still confident D-B plant can be productive
Chief financial officer thinks problems have been fixed


Staff writer


AKRON -- FirstEnergy officials are confident the Davis-Besse Nuclear Power Station will continue producing electricity.

But they are not so quick to commit to the long-range future of the 25-year-old Carroll Township facility.

In an interview Tuesday in his spacious 18th-floor office at FirstEnergy headquarters in Akron, Chief Financial Officer Richard H. Marsh stopped short of saying the company is committed to a 20-year renewal of the beleaguered plant's license. The current license expires in 2017.

"FirstEnergy is certainly looking for license renewal as an option," Marsh said. "We continue to believe it will be a long-term benefit for the (company's) portfolio."

He added, however, that the final decision will lie in the dollars and cents of the issues when it comes times to finalize plans, calling it a "business decision."

Company officials notified the federal agency that monitors nuclear power -- the Nuclear Regulatory Commission -- in May 2001 that they plan to start the paperwork for the extension.

The application process to renew the 25-year-old plant's license takes about three years to complete.

One year ago this week the Davis-Besse power plant shocked the nuclear industry with the discovery of massive amounts of corrosion on its reactor head -- a discovery that Marsh called "hurtful."

"For (Chief Executive Officer) Peter Burg, it was enormously painful," he said. "We had much to be humble about last year."

The $12 billion-a-year company has been embroiled in turmoil since the spotting the unprecedented amount of corrosion, from Congressional inquiries to being the subject of internal fighting within the NRC.

Since last March, the plant has been a bevy of activity, not only replacing the reactor head with an unused one from Midland, Mich., but devising plans to counteract a suffering safety climate and restructuring the entire nuclear operation to form an organization to oversee all three of the company's nuclear plants.

Some of those plans have been questioned throughout the process with lingering doubt and surveys that show workers still aren't trusting of middle management to fix problems correctly and without retribution.

The future of the plant also was uncertain last November with the vague words of Burg at an analyst meeting, during which he told analysts Davis-Besse would not become the company's "black hole."

The comment set off a whirlwind of speculation about the point at which FirstEnergy might decide the plant isn't worth the effort -- or the money. The energy conglomerate has now invested more than $300 million in bringing the plant back on-line, and expects to pay another $50 million this year in repairs and $10 million to $12 million to buy replacement power per month.

All told, the bill could top $400 million.

"What he was trying to say was we're not going to let this event define the fate of our company," Marsh explained. "We're not going to let this unit drag the rest of the company down."

He qualified that, however, by saying Burg was referring to such plants as D.C. Cook in Benton Harbor, Mich., which experienced an outage that lasted two-and-a-half years.

FirstEnergy spokesman Ralph DiNicola further clarified that at the time, Burg and the rest of the company had no idea how extensive the damage was and how many more problems could be found.

"What Pete always said is we'll know it when we see it," Marsh said of how far the company would go before cutting the plant loose.

And while Marsh said he couldn't define the point, the company is now seeing the "light at the end of the tunnel" with much of the work at the plant expected to be finished by April.

Marsh said, too, that FirstEnergy has bought energy for distribution and upped the amount purchased to compensate for the lakefront facility. But management wants Davis-Besse back on-line to produce that electricity more cheaply than what it costs to purchase it.

He credits the company's commitment to sticking with the plant partially to the support seen from community members and local officials.

Ottawa County commissioners and local economic development leaders have responded to Congress members Marcy Kaptur and Dennis Kucinich's calls for investigations and a potential shut down with scathing letters and rebuffs.

In recent months, more officials from township, village, city and county governments have stood up in support of the plant at monthly meetings between the NRC and FirstEnergy.

"Without that local support, it would be very difficult for a plant to get a foothold," he said.

He credits that support, too, for stable stock prices despite shareholders taking a hit to the tune of about 47 cents per share.

"A look at the stock price shows it's performing very well considering all that's gone on," Marsh said. The stock fluctuated from a company high near $40 pre-Davis-Besse to between $28 and $35 in the past year. "We understand this is a one-time thing and I think that's why they've been supportive."

Also, he said, analysts have deemed the problems at Davis-Besse short term, which saved the stocks from diving like the parent companies of other troubled plants.

Marsh added, though, that company officials realize neither investors nor cheerleaders won't stick around for long if the facility-wide issues of safety culture and management problems persist in Davis-Besse or show up in other FirstEnergy-owned plants.

But he's convinced that efforts at the plant will change the way Davis-Besse operates, for the better.

"It looks, tastes and feels like a different plant, and will continue to be so in the next couple of months," Marsh noted.

Originally published Thursday, March 6, 2003

Home | News | Communities | Classifieds | Coupons | Cars | Jobs | Customer Service


    Contact Us | Subscribe | Place an ad
Copyright 2003 News Herald. All rights reserved.
Use of this site indicates your agreement to the Terms of Service
(Terms updated 12/20/02)