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September 12, 2002

Oyster Creek plant soon may be for sale again

By DEREK HARPER Staff Writer, (609) 978-2015

LACEY TOWNSHIP - Financial troubles across the Atlantic may lead to the sale of the local nuclear power plant, just two years after it was bought.

The Oyster Creek Generating Station is up for sale, as one of the part-owners faces severe financial problems, said township officials. Committeemen Rod Sterling and John Parker said plant Vice-President Ron DeGregorio told them and other members of the Citizens Task Force that because of British Energy's problems, the plant would be sold.

DeGregorio could not be reached Wednesday afternoon. British Energy PLC and the Exelon Corporation both hold 50 percent stakes in AmerGen, the company that owns the Forked River station, as well as two other plants.

An Exelon spokeswoman denied that they were looking for buyers because of British Energy's difficulties. "We didn't have any insider knowledge of their difficulties," said Linda Marsicano, Exelon's Chicago-based manager of external communications.

Instead, she said her company's announcement that it was "in the preliminary stages of exploring the possibility of a sale" of its half of AmerGen, which came out the day before British Energy's announcements, was unrelated. Exelon wants to raise money to possibly purchase something closer to one-third its size, she said, instead of AmerGen's equal partnership.

At its highest in 1998, British Energy was valued at 1.5 billion, reported the Manchester Guardian (UK) Monday, but is now worth around 200 million, or $310 million. On Monday, the British government approved an emergency 401 million, or $640 million, short-term loan. The company's stock declined further when it could not guarantee that it would remain solvent after the Sept. 27 deadline.

The company's financial strength has declined in recent months, reported British newspapers. In late August, two Scottish power stations went off line, one for maintenance and the other because of a technical fault. On Monday, the Guardian reported that the company has an additional 349 million, or $542 million, liability stemming from a failed partnership it undertook with Enron when a Welsh energy group was bought out.

The company was privatized in 1996 and provides about a quarter of Britain's energy needs.

Its partner, Chicago-based Exelon,

is this nation's largest operator

of nuclear plants.

The AmerGen partnership, formed in 1999, bought Three Mile Island for $100 million in 1999 and Oyster Creek for $10 million the year following. At the time, Oyster Creek was headed to decommissioning.

Three Mile Island could now be worth $340 to $600 million, said utility analyst Daniele Seitz of Salomon Smith Barney Inc. in New York to the Harrisburg (Pa.) Patriot-Ledger. She did not tell them an estimated value for Oyster Creek. When reached, she declined to speak to The Press.

She also told the Patriot-Ledger that Exelon may wish to dissolve the partnership and buy some of its assets outright. Both would be desirable properties, since there is a strong demand for electricity in the communities they serve.

Analysts speculated that if Oyster Creek is offered for sale, bidders may include Dominion Energy of Richmond, Va., New Orleans-based Entergy Nuclear of New Orleans and the Jacksonville, Fla. Florida Power & Light Co.

Dominion and Florida Power & Light spokespeople declined to comment on business planning.

"We have said for three years that we are interested if there is a nuclear plant for sale, we want to talk to the owners. We have been pursuing a major nuclear growth strategy for the last four years, and we continue to be interested in any nuclear plants in the United States," said Entergy spokesman Carl Crawford.

The sale talk comes at a time when Oyster Creek has never been more productive.

The station, in the middle of its 18th cycle of operation, produced more than 9.53-megawatt hours, topping the previous record set in 1998, said plant officials in a release.

Township officials said because of the plants productivity, they don't think the plant will be shut down.

John Parker, who was on the Township Committee when the plant opened in 1969, said he was confident that whoever bought the plant would keep it running. It has remained productive.

The township depends on the plant. Lacey Township this year received $11.2 million from the state in sales tax from the plant, as well as $1.4 million in real estate taxes. This year the town's budget is $18 million, Parker said.

"Everything Lacey Township has, since 1969, can be attributed to the nuclear plant," he said.

To e-mail Derek Harper at The Press: