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Business Business

Posted on Sat, Jun. 28, 2003 story:PUB_DESC
Group urges FirstEnergy probe
Utility misled shareholders, regulators about Davis-Besse, SEC told

Beacon Journal business writer

A Cleveland-based advocacy group trying to keep FirstEnergy Corp.'s Davis-Besse nuclear plant from restarting has told the Securities and Exchange Commission it believes the Akron utility misled its shareholders as well as regulators for years about the Oak Harbor plant's condition.

Ohio Citizen Action has asked the SEC to investigate its allegations and pursue a civil and criminal prosecution of First-Energy.

But FirstEnergy called the group's letter to the SEC a publicity stunt. A spokesman said the company never misled shareholders or anyone else about Davis-Besse, where a football-sized rust hole was found last year nearly all the way through the top of the reactor vessel head that covers the radioactive fuel.

Since the damage was found in March 2002, FirstEnergy has issued 21 news releases, filed 20 related reports with the SEC, and participated in 31 public meetings, spokesman Ralph DiNicola said. FirstEnergy also has fully complied with seven separate investigations involving the plant, he said. Davis-Besse has remained closed since the damage was discovered.

Ohio Citizen Action said that FirstEnergy omitted material information from shareholders and financial analysts about the rusting vessel head in 2000 and 2001, and that management repeatedly misled stockholders about the plant's readiness to be restarted. FirstEnergy has repeatedly pushed back restart dates, and says it now hopes to have the plant ready for restart in August, pending Nuclear Regulatory Commission approval.

Amy Ryder, Ohio Citizen Action's Cleveland director, said the letter to the SEC is not a publicity stunt.

``The reason we filed the petition is because FirstEnergy has to abide by fair disclosure rules,'' she said. ``They failed to disclose information to regulators and to shareholders.''

Earlier this week, the Union for Concerned Scientists asked the NRC to postpone approving a restart of Davis-Besse until the NRC's criminal investigation of the plant is completed.

Jim Mackinnon can be reached at 330-996-3544 or
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