Platts - Friday, January 20, 2006 http://www.platts.com ------------ FirstEnergy Nuclear to pay $28-mil fine in deal with government Washington (Platts)--20Jan2006 FirstEnergy Nuclear Operating Co Friday said it had entered into a deferred prosecution agreement with the US Attorney's Office for the Northern District of Ohio and the Environmental Crimes Section of the Environment and Natural Resources Division of the Dept of Justice related to communications the company had with the US Nuclear Regulatory Commission during the fall of 2001 in connection with the reactor head issue at the Davis-Besse Nuclear Power Station. Under the agreement, Fenoc, which will pay a $28-mil penalty, said Justice would refrain from seeking an indictment or otherwise initiating criminal prosecution of Fenoc for all conduct related to the reactor head issue, as long as the company remains in compliance with the agreement. "Fenoc regrets the significant performance deficiencies that led to the reactor head issue and accepts full responsibility for the failure to accurately communicate with the NRC. We have learned much from this experience, and Fenoc is a better and stronger company today than in 2001 when this occurred," company President and Chief Nuclear Officer Gary Leidich, said. "The agreement closes an important chapter on the Davis-Besse reactor head issue for the company." The company said that under the agreement, $4.35-mil of the $28-mil fine would be directed to community service projects with the agreement of Fenoc and Justice. In entering into this agreement, Fenoc said the government acknowledged the company's "extensive corrective actions at Davis-Besse," its cooperation during investigations by Justice and the NRC, its pledge of continued cooperation, its acknowledgement of responsibility for the behavior of its employees and its agreement to pay a monetary penalty. Word of the agreement comes after a US grand jury in Cleveland late Thursday indicted three former workers at the Davis-Besse plant for allegedly withholding information from the NRC about damage to the vessel head. The 916-MW Davis-Besse plant, located at Oak Harbor, Ohio was shut down in March 2002 after inspectors found that boric acid had eaten a hole almost all the way through the steel reactor lid. Andrew Siemaszko and David Geisen, former employees of FirstEnergy, and Rodney Cook, a contractor hired by the utility, were accused in the indictment of misleading regulators about the severity of the problem with Davis-Besse's reactor vessel head. For more information, take a trial to Platts Electricity Alert at http://electricityalert.platts.com. ------------ Entergy expects nuclear profits to offset hurricane damages Washington (Platts)--19Jan2006 Entergy says it expects profits from its nuclear business to offset the hit the company has taken in recovering from Hurricanes Katrina and Rita. "Fewer planned outages in fourth quarter 2005, higher pricing, lower operation and maintenance expense, and accretion in the current period resulting from the share repurchase program were the primary drivers for the higher results at Entergy Nuclear," the company announced today in preliminary earnings guidance. Entergy said it expects fourth quarter 2005 net income to be about 42 cents per share, lower than the 68 cents/share it reported in the same three-month period in 2004. It expects to disclose its fourth quarter 2005 earnings Jan. 31. ------------ Iowa regulators won't rehear Duane Arnold case Washington (Platts)--18Jan2006 A request to rehear the case of the Duane Arnold sale was denied today by the Iowa Utilities Board. In a Nov. 30 order, the board had approved the sale of Interstate Power & Light Co.'s 70% share in Duane Arnold to FPL Energy. The Iowa Office of Consumer Advocate (OCA), which is part of the state's Justice Department, and the Iowa Consumers Coalition (ICC) had opposed the sale and sought a rehearing. But the board said in today's order that the rehearing requests generally "raise no new issues or arguments that were not considered at hearing." OCA and ICC have 30 days to file an appeal in Iowa district court. ------------ White House eyeing options for referring Iran to Security Council Washington (Platts)--18Jan2006 The Bush administration is in discussion with its European allies, with Russia and with China on how to move forward with referring Tehran to the UN Security Council over the Islamic republic's nuclear program, a White House spokesman said Wednesday. Iran has "shown that they cannot be trusted," spokesman Scott McClellan told reporters, according to a transcript of his remarks. "Iran can't have it both ways. They can't say they want to engage in negotiations and then continue to thumb their nose at the international community, and that's what they are doing by pursuing their nuclear activities. And so the Europeans, who were negotiating in good faith with the regime and Iran, are now looking to refer the matter to the Security Council, and we support those efforts very strongly." The International Atomic Energy Agency, the UN's nuclear watchdog, earlier Wednesday confirmed it would hold an emergency meeting Feb 2 on Iran's nuclear program following a request by the UK, France and Germany (story 1728 GMT). The European trio asked the IAEA in a letter Wednesday for a meeting "to discuss implementation of IAEA safeguards in Iran" and previous resolutions on Tehran, the agency said in a statement. These resolutions call on Iran to halt nuclear fuel work which has raised fears in the US and the European Union that the Islamic Republic is secretly trying to develop nuclear weapons. However, the brief letter does not call for Iran to be referred to the UN Security Council for possible sanctions, only for the meeting of the agency's 35-nation board of governors, a European diplomat said, according to AFP. "I think we're long passed the point of talk," McClellan said. Iran has "failed to comply with their international obligations, and the international community is fed up with it. The patience of the international community has worn thin." --Cathy Landry, cathy_landry@platts.com For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ New generation of nuclear build "hugely expensive": Lib Dems London (Platts)--18Jan2006 The UK's third largest political party, the Liberal Democrats, are opposing the construction of a new generation of nuclear power plants, arguing that it would be too expensive, would not address climate change and that the nuclear industry "cannot be trusted to deal with its own waste." Speaking at a debate on nuclear power in the Commons Tuesday, party environment spokesman Norman Baker said that "a new generation of nuclear power stations would be hugely expensive to build and would draw heavily on the public purse." "We have seen over the past 20 years that when money is put into nuclear, there is none left for renewables and energy efficiency. They will wither on the vine and the message that will go out to the renewables industry is, 'Nuclear is back big time--you can forget about your wind farms, your tidal power and your solar power.' We cannot have them all together," he said. Baker dismissed talk that nuclear is a carbon free technology, saying that nuclear power generation and the construction of nuclear power facilities created a "considerable carbon footprint." "Work done by a university in the Netherlands has suggested that the carbon footprint of a nuclear facility is equivalent to between 20% and 40% of that of a gas-fired power station over the lifetime of its existence, when one takes account of the mining of uranium, transport and decommissioning," he said. Concluding his speech Baker said that the energy mix that works is one that minimizes energy consumption. Decentralized energy and encouragement of householders to be part of the generation mix should be achieved, while the UK should have a basket of renewable sources, not only wind. He also added that the government should give consideration to carbon capture and storage and acknowledge that there may be a role in future for fossil fuels if they can be cleaned up. "I shall conclude by saying that nuclear is a dodo that does not fly. If I wanted to extend the metaphor, I could say that it is a white elephant and a red herring as well," he said. Energy minister Malcolm Wicks will lead a 2006 energy review which will enable the government to give a yes or no answer to whether to build new nuclear power plants in the UK. The review, expected to be completed by mid 2006, will also cover wider issues too, such as the UK's increasing reliance on gas imports, the government has said. For more information, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------