Davis-Besse Update 12/06/02
- Please scroll down for today's update.Best Regards,Bill CorcoranW. R. Corcoran, Ph.D., P.E.
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Oak Harbor, Ohio, Nuclear Plant Will Reopen in April, Executive Says
By Jim Mackinnon Akron, Akron Beacon Journal, Ohio -- Dec. 5
FirstEnergy's damaged Davis-Besse nuclear power plant should be ready to restart no later than April, top executives of the Akron utility told financial analysts Wednesday.
If so, the Nuclear Regulatory Commission should be able to make its own decision then on the plant's readiness, a spokesman for the regulatory agency said. The NRC has final say on when Davis-Besse will be allowed to restart.
"If they (FirstEnergy) come to us and say the plant is ready, we expect to be able to make a decision promptly," NRC spokesman Jan Strasma said. "Our inspection processes and reviews are going on at the same time they are doing the work."
The NRC will know if criminal charges will be filed, which might aid regulators with their decision, Strasma said. Other investigations into such things as the NRC's responsibility for oversight of Davis-Besse do not have a direct bearing on the restart decision, he said.
Also, any so-called enforcement actions, such as fines, will have no bearing on whether the NRC allows Davis-Besse to restart, Strasma said. "A decision on enforcement actions is not imminent," he said.
The cost to repair Davis- Besse will approach $375 million -- $300 million this year and about $75 million next year, company officials said in a three-hour-long meeting in New York. That figure includes the cost of buying replacement power for the Oak Harbor plant, which has been kept shut down since March, when two unprecedented acid-created cavities were discovered on top of the reactor's 6-inch-thick steel vessel head.
The cost to buy and install a replacement head was $52 million, at the lower end of initial estimates, the company said.
FirstEnergy Corp. Chairman and CEO H. Peter Burg vowed that Davis-Besse will not be allowed to become a financial "black hole" for the utility. If Davis-Besse cannot be safely, reliably and profitably restarted, Burg said, the company has alternatives.
But Burg said he believes the plant will be able to safely restart. "We're confident in terms of progress at that facility," he said.
In the unlikely event that FirstEnergy's management decides it cannot safely and profitably restart and run the plant, the options could include selling the plant, leasing it out and buying back electricity, shutting it
down, or converting it into a non-nuclear plant, a process called "repowering," spokesman Ralph DiNicola said. The company is not pursuing any of those options because it believes it will be able to restart the 883-megawatt plant, DiNicola said.
Burg, in his talk with the analysts, was repeating a message he has delivered before, that "this is not a situation FirstEnergy will allow to go on indefinitely."
On another issue, FirstEnergy has received two nonbinding bids on its four Lake Erie coal-burning plants, said utility President and Chief Operating Officer Tony Alexander. He did not identify the bidders.
A planned sale of the four plants last summer for $1.5 billion fell through when the acquiring company, NRG, ran into deep financial problems. First- Energy intends to announce a decision on the new bids, which were received Tuesday, this year, Alexander said.
On Tuesday, FirstEnergy lowered its earnings forecast for 2003 to $3.35 to $3.55 per share from $3.70 to $3.90 because of rising pension and other costs. The figures do not include costs associated with Davis-Besse.
The company has said previously that Davis-Besse costs will reduce 2002 earnings by as much as 53 cents per share to between $3.30 and $3.35.
To see more of the Akron Beacon Journal, or to subscribe to the newspaper, go to http://www.ohio.com/bj
(c) 2002, Akron Beacon Journal, Ohio. Distributed by Knight Ridder/Tribune Business News. FE,