The next phase of the FirstEnergy Davis-Besse campaign

Shari Weir, Cleveland Program Director
Ohio Citizen Action
March 9, 2004

Yesterday's U.S. Nuclear Regulatory Commission decision to allow FirstEnergy to restart the Davis-Besse nuclear plant marks the end of one phase of our campaign, and allows us to concentrate fully on another already begun: fighting FirstEnergy's $3 billion rate hike proposal now before the Public Utilities Commission.

The NRC's decision was both reckless and wholly in conflict with the facts before it, which showed that the climate of intimidation and retaliation against employees raising safety problems was getting even worse. Davis-Besse is now the first U.S. nuclear plant ever given permission to restart during a grand jury investigation of safety-related crimes at the plant.

The NRC decision was no surprise, however, since the federal agency has never revoked the license of a nuclear power plant operator.

Knowing this, our campaign never relied on the NRC to protect the safety of Davis-Besse employees and neighbors.

Our pressure on the Commission, month after month, had two limited objectives. We achieved both.
  1. To increase the NRC scrutiny of specific dangers at the plant, leading to a more thorough overhaul of all the hardware problems.

    Rather than simply patch the hole, which was FirstEnergy's original plan, the company ended up having to invest $300 million in repair, rebuilding and modernization of the plant. One of the improvements fixed an original design flaw in which any loss-of-coolant accident would have led to a meltdown.

  2. To lengthen the time, and thus increase the weight of financial pressure on FirstEnergy management to make the hard decision that they are not competent to run the plant.

    When we began to press the NRC for time, we had no idea the kind of financial pressure that would come to bear on FirstEnergy. By now, the sale of Davis-Besse is the most modest of proposals. The disposition of the entire company is a matter of open speculation in the press.
In the interest of everyone's safety, FirstEnergy cannot continue to operate this plant. There are a number of ways this can happen.
  • FirstEnergy could sell the plant
  • FirstEnergy could sell its Toledo Edison subsidiary and Davis-Besse as well
  • FirstEnergy could sell all three of its nuclear plants
  • FirstEnergy could enter into a joint venture with a competent nuclear utility, in which FirstEnergy would retain legal ownership of Davis-Besse, but the other company would run it
  • FirstEnergy could merge with, or be acquired by, a competent nuclear utility
Each of these options became more likely as a consequence of yesterday's NRC decision.

And, by now, there are many reasons why FirstEnergy would want to pick one of those options (and many clues that they are in the midst of doing precisely that).

Paramount is FirstEnergy's crushing debt load. This is the most important factor in the repeated securities downgradings. Management needs to unload debt in a big hurry. The company tried to sell off four coal plants last year, but failed. What else does it have to sell? Three nuclear plants.

This also explains their whopping rate case. FirstEnergy executives know their strength is not in electricity generation, transmission, or customer service. What they are good at -- besides bill collecting -- is buying political influence. That's why they are down in Columbus now, demanding that the Ohio Public Utilities Commission approve -- in advance -- $3 billion in overcharges to their customers through 2008.

The less rate hike FirstEnergy gets, the more likely they'll have to unload assets.