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Regional News
| Article published Wednesday, May 22, 2002
FirstEnergy says plant could restart by year’s
end
BY JON CHAVEZ
BLADE BUSINESS
WRITER
AKRON - Even if FirstEnergy Corp. replaces
rather than just repairs its damaged reactor vessel head at the
Davis-Besse nuclear power plant near Oak Harbor, Ohio, the plant
could be operating by year’s end, the company’s chief executive said
yesterday.
While that time frame would be later than the
utility’s earlier promised start-up in October, it is considered
optimistic by others.
A Merrill Lynch analyst report
indicates the regulatory process and other factors likely will delay
allowing the plant to generate electricity until April. And a
Nuclear Regulatory Commission spokesman said that FirstEnergy’s time
frame may be possible, but is uncertain because such a feat hasn’t
been done before in this country.
The problems and restart of
Davis-Besse, which has been shut down for refueling since February,
after which a corroded reactor head was discovered, were among the
key topics of interest at the company’s annual shareholders meeting
here yesterday.
Stockholders were told what analysts heard
last month: that FirstEnergy, the parent of Toledo Edison, has
contracted to buy power from others if needed during the next few
months that Davis-Besse is shut down. It will cost the utility $10
million to $15 million this month and next and $20 million a month
in July and August.
The utility conceded last month that its
hope of restarting the nuclear reactor by July 1 wouldn’t become
reality, and that it expected to have the damage repaired and the
plant operating by Oct. 1. The plant cannot reopen without NRC
approval.
After yesterday’s meeting, H. Peter Burg, company
chairman and chief executive officer, said no decision has been made
on whether the utility will seek to replace the reactor head with an
unused, but older one from an idle Consumers Energy plant in
Midland, Mich., or wait for a new reactor head that the company has
ordered from Paris but which won’t be ready until
2004.
‘‘We’ll face that when we come to it,’’ Mr. Burg
said.
But if the Midland one is purchased, it could be moved
and installed late this year, enabling the plant to be operating by
year’s end, "if everything falls into place for us,’’ he
said.
The company has repeatedly said its first choice is to
repair the damaged reactor head, but one key NRC official said there
would be "a clearer path to success" by replacing the
head.
FirstEnergy hasn’t submitted a plan to regulators for
replacing the reactor head, and the company canceled a meeting
scheduled for this week to discuss the plan.
Whether the
company’s time frame could be met, NRC spokesman Jan Strasma said
yesterday: "There’s no precedent to look at. This has never been
done before, so who can say?"
A May 13 report by Merrill
Lynch, however, states that the company might be able to have a
replacement from Michigan engineered by fall, but the regulatory
process makes it more likely that the earliest the plant could be
restarted would be April. Installing a new 150-ton steel reactor
head would involve slicing open two buildings at
Davis-Besse.
The brokerage has lowered its profit estimates
for this year from a previous $3.15 a share to $3 a share, and for
next year to $3.50 a share from $3.65. The company’s stock, which
recently took the place of Enron Corp. on the Dow Jones utility
average, closed up 75 cents at $33.82 a share yesterday on the New
York Stock Exchange.
Mr. Burg said he had not seen the
Merrill Lynch report and declined to address such speculation. ‘‘We
still have a reasonable amount of time to get this done,’’ he
said.
Discussions are continuing with the NRC, which will
determine whether the company is permitted to repair or must replace
the corroded reactor head.
During the shareholder meeting,
just two audience questions hit on the topic.
One investor
wanted to know why the spare reactor head at FirstEnergy’s Perry
Nuclear Plant east of Cleveland wasn’t considered for Davis-Besse.
He was told the design of the two plants were too different and the
parts weren’t compatible.
Amy Ryder, a representative of Ohio
Citizen Action, the state’s largest environmental group, asked
whether FirstEnergy would consider hiring an independent outside
agency to assess the Davis-Besse situation and determine what is
needed to fix it.
Mr. Burg said many experts have been hired.
‘‘We’re paying every person under the sun to help us get out of this
mess we’re in,’’ he said.
Ms. Ryder said after the meeting
that her group wants an independent study of Davis-Besse, perhaps
done by a group like the Union of Concerned Scientist, a nonprofit
alliance of 50,000 citizens and scientists based in Cambridge,
Mass., because both the company and regulators failed to detect the
plant problems earlier.
She conceded her group wishes to have
the plant closed permanently.
During the meeting,
shareholders increased the number of company shares available for
executive compensation. Two shareholder-proposed issues were
defeated, one to limit board terms to one year and the other to
require a simple majority vote to elect board
members.
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