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May 22, 2002

 



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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.


More articles on this subject »
Plant’s operator, NRC face scrutiny 05/17/2002
Plan seeks to keep N-plant security 05/11/2002
Officials admit host of new ills at Davis-Besse 05/10/2002
FirstEnergy adds staff to oversee nukes 05/10/2002
Davis-Besse neighbors to get anti-radiation pills 05/09/2002

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