ML20090C373

Forwards 840630 Newspaper Article Entitled CEI Seeks $1 Billion Cushion for Perry. Article Relevant to Motion to Readmit Financial Qualifications Issue Currently Before Aslb.Related Correspondence

ML20090C373
Person / Time
Site:	Perry
Issue date:	07/07/1984
From:	Hiatt S OHIO CITIZENS FOR RESPONSIBLE ENERGY
To:	Bloch P, Bright G, Kline J Atomic Safety and Licensing Board Panel
References
OL, NUDOCS 8407130276
Download: ML20090C373 (3)

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'~ r nq' 7,Es?oHDW July 7, 1984 Peter B. Bloch, Chhirman C(C.r fif atomic Safety and Licensing Scard """

U.S. Nuclear negulatory Commission Washington, D.C. 20555 84 JllL 10 P2:32 Dr. Jerry M. Kline Atomic Safety and Licensing Board g __ _ . . .

U.S. Nuclear negulatory Commission - W :.-'" " ,m.

Washington, D.C. 20555 Mr. Glenn O. Bright Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20556 Re: Cleveland Llectric Alluninating i Oo (Perry Nuclear Power Plant,  !

Units 1 and 2) Docket Nos.

Gentlemen: 50-440/441 0 (

I hkve enclosed for your information a news article relevant to tne motion to readmit the financial qualifications issue, currently oefore the Board.

Sincerely, fa 5' Susan L. Hiatt OCHE Representative 8275 Munson Rd.

Mentor, OH 44060 (216) 255-3158 co: Service List l,

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8407130276 840707

PDR ADOCK 05000440 C PDR

N FROM FIRST PAGE CEI's increasingly blurry finind*1 picture

- parallela a drawn-out construction scheduls '

THE Pt.AW DEAL.ER. SATURDAY JUNE.30,1984 and skyrocketing costs at the Perry plant.

The problems for CEI and its four utility partners appear to have started when Robert  !

M. Ginn, CEI chairman, went to New York and gave an optimistic speech in late 1982 to security analysts about. construction progress '

of the Perry plant.

Ginn's projections turned sour within

, months when CEI annocaced. Perry's costs

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CEI'See S l

would rise from $4 bilIlon to 35.2 billion, and completion of Unit 1 would extend from 8 8 spring of 1984 to spring of 1985.

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$1b110n- '.

A number of utilities face the prospect of bankruptcy, includirg Public Service of New Hampshire, Public Service of fadiana I Consumers Power Co. of Jackson, Mich., and (CUSn_lo' n Long Island Lighting Co., of New York.

Anof - nu~ ,iamihat-caused them major financial problems. For f0r PerYy example, Consumers has said it will run out of money to operate by July 15 unless it gets relief from Michigan's utility comm'=8 _

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By James Lawless CEI has conceded the possibility of cao.

In a deteriorating financial celing Unit 2 and again has delayed the com-market. Cleveland Electrie II pletion date of Unit 1 now the end of 1985.

luminating Co. is seeking a Costs of the total project are now expected to financial safety net of $750 mil ' be over $6 billion.

lion to $1 billion to complete the CEI is building Perry with Tcledo Edison (

< $6 billion Perry nuclear power Co., Ohio Edison Co., Pennsylvania Power plant.  !

Co., a subsidiary of Ohio Edison, and Du.

CEI efforts to prov de a finan- riuesne Power & Light Co. i l  !

cial cushion against the so-called { "When they (CLI) came in here and lied nuclear paranoia on Wall Street g to us in late 1982, that' soured me on the i I were confirmed yesterday by w whole project," said a New York analyst who Edgar H. Maugans, CEI vice k asked not to be ident1Ded. " Frankly they president, who said be had dis-.. .can't be trusted, and I have other things to do."

cussed ers in thethe lastissue with three bank W 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br />.

Particularly damaging was an analysis  !

Mangans said CEI was con.e . . .

by Argus Research Corp. that said the cancel. '

cerned about the threat that other! lation of Unit 2 could sink the Perry project.

utilities, with ouclear construction f The argument is that cancellation would-  ;

projects gone awry, might 30.[. cause Ohio Edison to be particularly dam-I l bankrupt. .

aged by having to wrMe off..as4220.million .

"The possibility of bankrupteY investment in Unit 2.

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could cause a shutdown of finas- The report argued.that such a writeoff clat markets, Maugans said. would prevent Edison from meeting its obil- {

"Should such a shutdown occur. gations in finishing Unit,1. "(1%at) woeld we are talking to banks about a leave the other participants (utilities) bokling ,

backup line of credit."

l unit," the report said. .the bag for all the remainii Maugans said the safety net would be an option. "If the banks "That is the general perception on the cant too much money, we may street," said another New York analyst, who l' not do it," he said. "It's a man- also requestedsanonymity.yWhether Unit 2 is egement call." canceled or not, you have foer companibs '

c sie ,d es Page 6.A -

building two other plants with a way to go. I We feel they are already kind of extended.

i 1 hey can't make any mistahes."

A third analyst agreed that the Argus

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i Men'of the Perry project is ===aaly it included $26 million in constraction inter-  !

bald among analysts. "The cancellation of est costs for Perry. l Unit 3 won't camme any dividend cuts but will fkee uuude need a lot d messy, pad l

cause fundisq problems for Oldo Edison and there isn't much conhdesce in them right  :

Toledo Edison Co " he said. "That could well now," the &ird analyst saW. He saW this  !

lead to another delay because the partes decision would compound the atllities  !

cannit raise castL" prob h I

' Itis analyst was partientarly critical of He said the anxiety could be resolved if a decision by the Pubile Utilities Commission m were able to estabush the credit lies of l j

cf Oldo, la late May PUCO rejected a $40 $750 million to $1 billion. '"l' hat would maka million agreement to settle Ohio Edison's as feel a lot more, secure," he said. ' As it is, proposed $130 million rate hike, we now . - against buying CEL,j "That was a very stupid daelah because Of the analysts contacted, only (

the very-likely higher cost of capital will A. Fox, with Mcdonald & Co. In Clew is  :

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. wipe out any savings to the consener," he recommending CEI, Oldo and Toledo Edissa, isaid. PUCO threw out the agreement because '

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