Bloomberg News

FirstEnergy Falls After Report of Nuclear Reactor Cracks

October 13, 2011

(Updates with company comment in the third paragraph.)

Oct. 13 (Bloomberg) -- FirstEnergy Corp. fell after a report that engineers discovered cracks in the concrete shell of its Davis-Besse nuclear plant.

FirstEnergy fell 2.8 percent to $43.76 at the close in New York. The Akron, Ohio-based power company had earlier dropped 5 percent, its biggest intraday decline since Aug. 8, according to data compiled by Bloomberg.

Contractors on Oct. 10 discovered a hairline crack measuring about 30 feet (9.1 meters) long as they sliced a hole into the plant’s outer shell in order to install a new reactor vessel head, said Jennifer Young, a FirstEnergy spokeswoman.

The damaged structure poses no safety hazard to Davis- Besse, located 21 miles (34 kilometers) southeast of Toledo, Young said. The cracked shell is the outermost of several layers of steel and concrete that protect the reactor, which has been shut down since Oct. 1 in preparation for the repair work.

“We’ll take any actions necessary to confirm the integrity of the structure prior to restart,” Young said in a telephone interview.

The U.S. Nuclear Regulatory Commission is investigating the structural damage to the concrete building that protects the reactor from tornadoes and other hazards, said Viktoria Mitlyng, spokeswoman for the nuclear agency, in a telephone interview.

Previous Problems

Davis-Besse was shuttered for more than three months in 2010 after workers discovered cooling water leaking through cracks in some reactor-head nozzles, steel casings that hold fuel and control rods.

Leaks and reactor corrosion prompted FirstEnergy to close the plant for two years, from 2002 to 2004, while the company retrained or replaced workers who ignored signs of damage, and eventually replaced the reactor head.

The leaks found last year at the 900-megawatt plant prompted the Union of Concerned Scientists in April 2010 to demand that the plant remain closed until its owners established better controls to maintain health and safety standards.

Repairing Davis-Besse should be less complicated than fixing Progress Energy’s Crystal River plant, whose unit #3 has been shut since 2009 because of concrete delamination, said Michael Worms, an analyst at BMO Capital Markets in New York, in a research note today.

“We believe the crack issues could be resolved relatively quickly and should not affect the long-term outlook for the company,” Worms said.

The Ohio plant’s outer shell lies 4.5 feet away from the pressure containment building, made of 1.5-inch-thick steel, which houses the reactor. Crystal River’s pressure containment structure is connected to the damaged shell, Worms said.

Repairing Crystal River is expected to cost between $900 million and $1.3 billion, Progress said in a June 27 statement.

--With assistance from Jim Polson in New York. Editors: Susan Warren, Charles Siler

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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