Dow Jones Business News
CHICAGO -(Dow Jones)- Some of the costs associated with the extended outage at FirstEnergy Corp.'s Davis-Besse nuclear plant are likely to increase, H. Peter Burg, the company's chairman and chief executive, said Thursday.
Burg reiterated that FirstEnergy believes the corrosion-damaged power plant, which is near Toledo, Ohio, can return to operations this year, pending U.S. Nuclear Regulatory Commission approval.
He said that repair costs and replacement power costs for the outage should still fall within earlier-stated estimated ranges, but costs for additional operating and maintenance work will likely exceed the earlier $50 million to $70 million estimate..
"We are expecting an increase in the anticipated O&M costs associated with the work at Davis-Besse," Burg said, addressing an industry conference in New York. "The scope of the maintenance projects has expanded."
Davis-Besse was shut for a refueling outage in February, and the outage became extended in March when severe corrosion damage was found on the plant's vessel head, or the heavy carbon steel lid covering the reactor.
Akron, Ohio-based FirstEnergy outlined the restart costs at Davis-Besse in May, when it announced that it would replace the reactor head rather than trying to repair it, as originally planned.
Costs outlined in May included $55 million to $75 million to replace the vessel head, most of which would be capitalized, or spread over an undefined period of time. Burg said that estimate is still on target.
He also maintained an earlier estimate for replacement power costs of $20 million for July and August and $10 million to $15 million for other months.
But the estimates for the additional work at Davis-Besse, some of which is maintenance work that would have been performed later, but has been bumped up, is likely to increase, Burg said. Estimates for these costs, which will be expensed, will likely be disclosed in coming weeks, he said.
Davis-Besse costs are excluded from FirstEnergy's 2002 earnings guidance, which still stands at $3.30-$3.45 a share, Burg said.
The utility told the NRC earlier this week that it wants to bring Davis-Besse back to full power by Dec. 7.
-By Jon Kamp, Dow Jones Newswires; 312-750-4129; firstname.lastname@example.org