Hope Creek to stay offline ; Refueling to boost expenses by $12M

Oct 19, 2004 - Record, Northern New Jersey
Author(s): Kevin G. Demarrais, Staff Writer

Public Service Enterprise Group will begin refueling its troubled Hope Creek nuclear plant earlier than planned, a move that will probably reduce company earnings for the year.

 

The Newark-based parent of New Jersey's largest electric utility announced Monday that the Hope Creek plant in Salem County, which was shut down Oct. 10 due to a steam pipe failure, will remain offline so the company can begin a planned refueling. A periodic refueling was to have begun Oct. 28 and conclude in mid-December.

 

The extension of the refueling outage is expected to increase replacement power costs and other expenses by about $12 million, or 5 cents per share, in the fourth quarter, said Thomas O'Flynn, PSEG's chief financial officer.

 

"These added costs will pressure the low end of PSEG's 2004 guidance of $3.15 to $3.35 per share," O'Flynn said. The average estimate of analysts surveyed by Thomson Financial was $3.26.

 

The company's third quarter earnings are due out Friday.

 

Chris Bakken, PSEG's chief nuclear officer, said in a message to employees that the "best course of action is to keep the unit offline and transition to the refueling outage now."

 

An earlier start of the refueling may lead to an earlier return- to-service date, but the unit will stay offline until the company has addressed problems at the plant, PSEG said in a letter to the Nuclear Regulatory Commission.

 

Hope Creek was taken out of service last week as a result of a failed eight-inch discharge line from a moisture separator to the main condenser in Hope Creek's turbine building, the company said.

 

"Our preliminary investigation of the event has revealed equipment and personnel performance issues, which we will address prior to the restart of the unit," Bakken said in a letter to the federal regulators.

 

The NRC is investigating charges that the nuclear plant is deficient in dozens of critical aspects. Problems cited in reports by private consultants include the reliability of equipment and availability of spare parts. Reports specifically noted a leaky generator and unreliable controls on a reactor.

 

In addition, the NRC is reportedly investigating claims by at least two employees that their superiors retaliated against them after they expressed concerns about safety.

 

The investigations were first reported last week by The New York Times.

 

The commission has warned PSEG repeatedly in the past two years about its system of detecting maintenance problems. In its most recent report about poor maintenance that led to the failure of a pump valve, the NRC warned of inadequate insulation on piping and rusted metal supports on water pipes leading to a reactor.

 

PSEG Nuclear operates the Hope Creek and Salem I and II reactors at a complex in Lower Alloways Creek Township in Salem County, along the Delaware River.

 

More than half of New Jersey's electricity comes from nuclear power. Before the state's electric industry was deregulated five years ago, PSEG generated power primarily for its own customers at Public Service Electric and Gas Co.

 

Now PSEG's unregulated power division is free to sell electricity on the open market to PSE&G and other regulated utilities.

 

 


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