FirstEnergy prepares for summer surge

4/19/2003

FirstEnergy Corp. said yesterday it has arranged for replacement power this summer in case its planned June restart of its Davis-Besse nuclear plant near Port Clinton is stalled again.

``Certainly with respect to Davis-Besse, we were fully hedged through the spring, but we made some arrangement through the summer months with regard to Davis-Besse,'' said company spokesman Kristen Baird.

The Akron utility and parent company of Toledo Edison told federal regulators this week that the plant, which has been out of service since February, 2002, could be ready for a restart in mid-June if the Nuclear Regulatory Commission gives it permission.

However, a senior NRC official last month said design flaws had been discovered in two pumps that would be used to cool the plant's reactor core in the event of a nuclear accident. Fixing the flaws could further delay a restart.

The plant was shut down for routine maintenance but soon was found to have an acid leak that damaged the metal dome that covers the plant's nuclear reactor. It was replaced.

Through April, the company estimated it will have spent $310 million on repairs, additional maintenance, and replacement power to cover the Davis-Besse outage, which puts out 925 megawatts, or about 7 percent of FirstEnergy's total generating capacity.

But the continued stoppage will add to that bill. The utility has estimated replacement power in May and June will cost about $15 million a month, and last year it projected $20 million to $25 million in each of the hotter summer months when air-conditioning use boosts electricity demand.

The company has not said what those costs might be this year, and Ms. Baird declined to say how many months FirstEnergy had contracted for replacement power this summer.

The added expenses are factored into the company's financial outlook and should not affect its goal of reaching $700 million in cash flow by the end of the year, which will be used to help reduce its $14.5 billion in debts, said FirstEnergy spokesman Ralph DiNicola.

``Davis-Besse is really just a small part of our generation portfolio,'' he said.

At a utilities conference in Chicago last month, company treasurer Tom Navin told stock analysts that FirstEnergy has virtually completed all necessary energy purchases for 2003 and 2004 through a variety of long-term and short-term purchases made possible by soft prices and an increase in available capacity elsewhere, he said.