ML20136C112
| ML20136C112 | |
| Person / Time | |
|---|---|
| Site: | Millstone  |
| Issue date: | 01/02/1997 |
| From: | Blanch P AFFILIATION NOT ASSIGNED |
| To: | Hannon J, Mulley G, Zwolinski J NRC (Affiliation Not Assigned), NRC OFFICE OF THE INSPECTOR GENERAL (OIG) |
| Shared Package | |
| ML20136C110 | List:
|
| References | |
| NUDOCS 9703110266 | |
| Download: ML20136C112 (3) | |
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PAUL BLANCH.<PMBLANCHeix.netcom.com>
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Dates 1/2/97 4:25am Subjects NU NEWS l
Audit adds to crit'icism'of NU By SUSAN E. KINSMAN This story ran in the Courant January 1,.1996 i
i The latest; independent audit of Northeast Utilities has reached 4
the
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same bottom line as federal regulators and the company itself:
NU's' troubled nuclear operations have'been mismanaged for the last 10 f
. years. -
R.C. Brown & Associates Inc.-of' Mystic was sweeping'in its criticism of' NU's management - from its board of trustees to its executive and
'l senior managers - for a 10-year period that ended Aug. 30.
In a 100-plusLpage report to state regulators Tuesday, the auditors said '
the company's management
'$ lost focus on the safe operation of NU's nuclear power plants,.and instead'placed primary importance on financial issues, geographical expansion and the pending threat of-wholesale and retail competition.
They concluded that, as a group, NU's trustees were and continue to be unqualified to oversee the management of a regulated utility so heavily dependent on nuclear power.
.The auditors also noted that the utility has lost the trust and confidence of federal regulators and a significant portion of its nuclear workers.
Although the report did not raise significant new issues-about company mismanagement, it further reinforced critical findings already made public by the federal Nuclear Regulatory Commission, NU, and another independent auditor hired by state regulators.
The information will be used by the state Department of Public Utility Control in deciding whether NU's Connecticut Light & Power Co.
customers can be asked to reimburse the utility for any or all of the 9703110266 970306 PDR ORG NRRA PDR
cost of the long-term shutdown of its four nuclear power plants in Connecticut.
No date has been set for a decision, and the investigation is expected to take months, a spokeswoman for the department said Tuesday.
The company's latest estimate of those costs is $600 million and growing. But the Barrington-Wellesley Group, a New London, N.H.,
management consultant, estimated in its report to state regulators last month that the company could spend as much as $812 million.
It recommended that NU consider cutting its annual dividend, something the utility said it has no plans to do at this time.
CL&P holds the largest ownership interest in each of the Connecticut nuclear plants, and potentially its customers could bear the largest share of the shutdown costs.
The three Millstone plants in Waterford have been closed since March l
l by safety concerns. They remain on the NRC's watch list of the nation's most troubled nuclear reactors and need special NRC permission to restart.
Connecticut Yankee in Haddam, closed in July because of safety
)
concerns and refueling, will be shut down permanently.
NU has said it will not ask state regulators for permission to pass on charges stemming from its mismanagement. But the utility believes l
l that customers should pay for some portion of the shutdown I
Costs.
As far as management problems, we've acknowledged we've had management problems, NU spokesman Richard J. Gallagher said.
But l
based on an initial review, the utility does not agree with all of the auditor's conclusions, he said.
Gallagher said the report did not' reflect sweeping changes made by Bruce D. Kenyon since he began work in September as NU's chief executive officer and president of NU's nuclear operation.
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Nor did the report. recognize that the board and Bernard M. Fox, j
NU's1 i
chairman-and chief executive officer, recruited Kenyon, added two trustees with strong nuclear credentials, and set up a nuclear committee advisory team, Gallagher said.
Although the auditors did not name Fox, they did recommend that the executive and senior management who contributed to the decline in nuclear operations resign or be replaced. They also recommended that
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the makeup, role and activities of NU's board of. trustees be substantially strengthened.
Paul M.
Blanch Energy Consultant 135 Hyde Rd.
West Hartford CT 06117 Tel: 860-236-0326-Fax: 860-232-9350