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Posted on Tue, Oct. 08, 2002 story:PUB_DESC
Davis-Besse costs skyrocket
FirstEnergy says profits to take hit as repairs may be as much as $115 million more

Beacon Journal business writer

FirstEnergy Corp. said repairs to its Davis-Besse nuclear power plant, idle since its reactor was found corroded earlier this year, will cost as much as $115 million more than expected, reducing 2002 profit by anywhere from 46 to 53 cents a share.

The higher repair costs are the result of additional work recommended by the Nuclear Regulatory Commission and accelerated maintenance, FirstEnergy spokesman Ralph DiNicola said.

The company expects the additional work, first estimated at $27 million, will cost an additional $65 million this year and $50 million in 2003.

``As we've gone through this process, certain issues have been identified that need to be addressed,'' said DiNicola.

FirstEnergy also pushed back its estimate of when the plant could be ready to resume operation to early next year, from year's end.

Full-year profit will be ``at the high end'' of its estimate of $3.30 to $3.45 a share, excluding the plant repair and other items, DiNicola said. Including the repair, the company is expected to earn $2.96, the average estimate of 10 analysts surveyed by Thomson Financial/First Call.

FirstEnergy is spending about $15 million a month buying power to replace what the plant would have produced.

The cost of replacing the plant's reactor head will remain the same as earlier estimated, about $55 million to $75 million.

Inspectors found two acid-created cavities on top of the reactor's former vessel head after the plant shut for refueling in February. A stainless steel liner was all that kept the reactor from leaking under operating pressure of more than a ton per square inch, the Nuclear Regulatory Commission said.

Meanwhile, FirstEnergy has been under pressure from Ohio Citizen Action, a public interest group, to shut down the Davis-Besse plant and switch it to an alternative fuel source -- or at least explore the option carefully, according to Amy Ryder, director of the group's Cleveland office.

Shares of FirstEnergy, based in Akron, fell 40 cents to close at $29.21 on the New York Stock Exchange at the end of trading Monday.


Mary Ethridge can be reached at 330-996-3545 or methridge@thebeaconjournal.com
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