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S&P comments on FirstEnergy Corp
Tuesday October 8, 12:26 pm ET

(The following statement was released by the ratings agency)

NEW YORK, Oct 8 - Standard & Poor's Ratings Services noted that FirstEnergy Corp. (NYSE:FE - News; BBB/Negative/--) announced a $115 million increase in operating and maintenance (O&M) costs associated with the extended outage at the Davis Besse nuclear facility, of which $50 million will be incurred in 2003 after the plant restarts. Capital costs associated with replacing the reactor head are unchanged and are expected to be between $55 million and $70 million.

The company also announced that the restart will likely be delayed to early 2003. Standard & Poor's will monitor developments and wait for the NRC to conclude its investigation to determine if the time frame of the shutdown will be substantially longer. Standard & Poor's believes that restarting the facility is important to FirstEnergy's credit profile. Although FirstEnergy's credit is negatively affected due to the revised O&M costs, funds from operations interest coverage is expected to be only marginally lower at 2.65 times at year-end 2002. Standard & Poor's is also monitoring the renewal of FirstEnergy's 364-day $1 billion revolver in November 2002.

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