ML20129C626

Forwards News Article Re Merger of Cleveland Electric Illuminating Co & Toledo Edison Co.Urges Board to Direct Applicants to File Complete Rept on Merger & Effect on Mgt of Facility.Merger May Affect SER

ML20129C626
Person / Time
Site:	Perry
Issue date:	07/10/1985
From:	Hiatt S OHIO CITIZENS FOR RESPONSIBLE ENERGY
To:	Bright G, Gleason J, Kline J Atomic Safety and Licensing Board Panel
References
CON-#385-801 OL, NUDOCS 8507160274
Download: ML20129C626 (3)

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July 10, 1985 00CggrED USh %,

James P. Gleason, Chairman Atomic Sorety and Licensing Board $3 g 513 Gilmoure Drive 3 44 :22 Silver Spring, 11D 20901 F

bC T ECR IAM Dr. Jerry R. K1sne g & SERVlu Atomic sorety and Licensing board CH U.S. Nuclear Regulatory Commsssion Wasnzngton, DC 20555 Mr. Glenn O. Bright Atomic sorety and Licensing Board U.S. Nuclear Regulatory Commissson Washington,~DC 20555 Re Cleveland Electric Illuminating Co. (Perry Nucleor Power Plant, Units 1 and 2), Docket Nos. 50-440 and 50-441 O L Gentlemen: ,

For your 2nformorzon, Intervenor Ohio Citizens for Responsible Energy ('OCRE') is enclosing a news article concerning the merger of the Cleveland Electric Illuminating Co, and the Toledo Edison Co. As indscored in the article, the new company plans to form o nuclear unit to manage the 2 Perry reactors and the Davis-Besse nuclear station.

This is a matter or concern, os it renders the $ torr # 5 conclusions in sections 13 (Conduct or OPerottons) and 17 (Operational Quality Assurance) of the SER invalid. The possibility that persons responsible for the notoriously poor monogement of Dovis-Besse (chorocterized by Regional Administrotor James keppler before Congress recently as the weakest in Region III) may manose che Perry racility is especially disturbing.

OCRE therefore urges ene Licensing Board to direct AFplicants to rile o complete report on the merger old its errect on the management or Perry.

Szncerely,

/V W ***- 0 Susan L. Hiott CCRE Representative 5275 Hunson Rd.

nentor, OH +4060 8507160274 050710 (21c) 255-3158 PDR ADOCK 05000440 6 PDR

Enclosure:

os stated cc: Service List Mr. Jonn Sterono. Project ti o n o g e r SO R

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,u M* F M stur warTtn New firm to be ba' sed here, m..e.0 imi c iomers. ineding .

The Cleveland Electric Illuminat.

S ing Co. agreed yesterday to merge COUld duck PUCO oversight *888.316 residential,44.425 commer-J i- natina

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l bilhon company with nearly 1 mil- federal regulators, rather than to the Tom Edison now Wes eb h e .* -

,tig tion customers - the largest Ohio Itbhc Utahties Commission of Ohio, annamed new company, said the' . tricity to 271.000 customers in all crJ i

- - merged company would be the hrst 4, electric company and one of the top 20 the state official said. utihty created in 20 years. He said the g part g in tle nahon. . . The merger, which creates a hold . company.would be basedin the Cleve- Harber. CEI serves 714.000 customers' ri;. , . Reactions from industry analysts- ing company - a company that man- land area, but be separate from CEI tin Cuyahoga. Ashtabula, Lake andi

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and regulators were generally favor- ages the assets of ottier companies - - headquarters. The two original com-able, with Ohio's top regulator sug- was announced' jointly in Toledo and Pames will rmam intact as separate,;.g,,_ , , , . . . , . ; 3p f, ,

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d. i gestmg the merger might be the start . Cleveland by the chairmen of the two ^. subsidiaries. aa t*- Cias said the major benefits to the! -

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of a mega-utihty, wtuch might even- companies. It followed votes of ' Cinn said it was too'early to' spy ' tweesmpanies werelong-range:coorG

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-taally include Ohio Edison Co.  ; approval for the new company by what the change would mean to cus. ' dinataan of transmission and generati 6 e - - ~1 'Thelarge utihty might be organized . each_ ntihty's board of directors... tomers. "Electrr rates will be lower Ing facihties. lower botrowing cost 4- 2

! CEICEdrman~M M.Ginn ". .'.under federal regulations and there . -llobert M. Cinn, CErs chairman,, than would otherwise be the case" be., comhaned computer strengths and; ,

"The time seemed ripM." fore be accountable to more lenient and chief executive ofheer of the said.1 - m -:g; .

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THE PLAIN DEALER. WEDNESDAY, JUNE 26. Isas

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sohdation of Toledo Edison a'nd CEI lated by FERC. About problems at Davis Besse,

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savings in nuclear and coal costs from comM as n SurPrim We han made CEI spokesmen said they were not Gmn said,"It has been difhcult for as our own exhaustin analysis of such a

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pe, increasedPurchasmg Power . . consohdation with Toledo Edison and . sure which way the new company to assume management of Davis- we.cca= u.a. . ,smerm Tole'do Edison Chairman John P. have concluded that there would be ' would be structured' Besse without takmg control of the  ; '- y _ ] W.

Mity analysts hue and in Rw company trunmngit)." o ?I O = aa8 Wilhamson said the merger would httle to be gained for efther our cus- i .

• result in a streamlined, efficient, tomers or our investors at tius time. York said they were surprised by the He said he thought there would be f , u, '

s financially strong organnation" .

merger. They said it should benefit better long-range control of all of the i It is understandable that CErs cri-

• Ginn said,"We have had these dis- teria or needs may well be different both compames and sharebolders in plants under the new company's lead-I' cussions for two to three years, but from out own, and we wish both run- t.he long run. l erslup. He denied Davis-Besse's Prob ,

Toledo Edison, the weak link in lems had anything to do with the , 'j CLEVELAND ELECTRIC they never really got anywhere. The panies nothing but the best results TOLEDO EDISON CO.  ! ILLUsMNATING CO-discussens became utensive in the from their decisions." many of CErs partamlups, will no , merget ,,,,, , ,, , y,,,, , ,,,,, , ,, , , , , , , ,

last two to three months. The time "# * * * ** " * ****' ~

wts right, and it seemed to make Asked if Ohio Edison mightI ha" join the meet any imancial obligations, said new vice president for nuclear opera- I5*"* a= $

company cola said, . we u se n sense." Timothy O'Brien of Provident tions, last week to run Davis-Besse. -

Ginn said the new company.had ' . ng .

National Bank. Ginn said Wilhams had a reputation a,

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y ;g only three employees: Ginn..as presi , Chema said the new holding com-

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Ginn said be did not know how as a tough manager and said be dent and the chief executive ofheer; .pany could be federally organized so many employees the cornpany would expected him to get "that plant run-L ,.

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, , , , _ _ _ ,,g Yalhamson, as chairman, and Richard that it would not be accountable to eventually have, but he said it was not ning well" <  ;

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Miller, CEI's president, as executive the.PUCO but to the Federal Energy the intention to create a layer of *****""'" ,,~ ,],

nee president. Regulatory Commission. bureaucracy. He said be expected it Richard Miller, CErs president. *'

Ginn said Ohio Edison would not be ~ . He said the new company would would develpp a nuclear unit, which said,"We are marking the end of the 1' ',5*****- *JU8 '*"** *'*** L .s involved mitially in the new company, find a more favorable atmosphere would provide leadership for both the nuclear construction period and have n,-.-__

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but he said the new firm's incorpora- with the FERC under control of the Davis-Besse nuclear plant in Oak Har- developed backup hoes of credit."" _ . . .

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tion papers had been written so other Reagan admimstration than with the b r and the $6 bilhon Perry nuclear , --,,,~

companies could join it easily. "

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Common stock will be exchanged on Power Pl ant, which is under construc- a one-forene basis for Toledo Edison

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' Thomas Chema, PUCO chairman The PUCO, under the administra- . tion.  ; shareholders, while CE! stock owners

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said, *1 would be very surprised i tion of Gov. Richard F. Celeste, has He said be expected there would be will ye 1.11 shares for each share r,, f -

s-W ri (Ohio Edison) had not been involved in , severely restricted rate bikes for utili- a nuclear management ud engi.. D0" 0 . ,

. the negotiations. I have heard it is ties around the state. neering team, which would assume CEI stock sold at $22 50 per share '

q very possible taere could be subse- *'I think they'(the new company responsibihtyforthethreeunits. yesterday, and Toledo Edison's cost .,

qnnt moves downstream and that would find it more to their hking fat Ginn said,

• Perry Unit 2 refrains in $19125 per share. Trading of each ' .

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' Ci.lo Edison 3 one of the major playf FERC)than at the PUCO," he said. He ' limbo." CE! has not decided wbetber utihty's stock was suspended yester , React 1en Io Iha mergier of clon, Page 4-8.y 31 ers." < . said 'the company ridght rpin off ele- ~ it will be completed and has stoppr: day afternoon. Executives of both Cleveland Electric I!!umleating . ' Analysts call a united Toledo

. Ralph DiNicola, a spokesman for ments of one or totlyf the subsi- construction on that unit white it fin- comPames were to meet this morning and Toledq Edipon com nles Edison and CEI e good move.

Ohio Edison, said,"The ishes the first umt. ranges,from approval to uopl- .Pge5-8.... :u

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