Grand jury investigates FirstEnergy
Originally published in the Toledo Blade
Grand jury investigates FirstEnergy Criminal probe focuses on reactor-lid corrosion
By TOM HENRY
BLADE STAFF WRITER
Two days after a government panel blamed FirstEnergy Corp. for North America’s worst blackout, the utility acknowledged it is being investigated by a federal grand jury for possible criminal activity related to the near-rupture of Davis-Besse’s former reactor head.
In a disclosure form filed yesterday with the Securities and Exchange Commission, FirstEnergy said it received a subpoena demanding documents and records pertaining to that device at the nuclear power plant near Oak Harbor, Ohio.
The reactor head in question has been replaced. But FirstEnergy let the plant’s original reactor head surpass anything ever seen in U.S. nuclear history by allowing uncontrolled acid from the reactor to burn one spot of the steel head down to the thinness of a pencil eraser.
Nuclear Regulatory Commission officials have said that put northern Ohio on the brink of the nation’s worst nuclear accident since Three Mile Island in 1979.
The grand jury is seated in Cleveland, but officials familiar with its probe declined to say when it was convened or speculate when its investigation would be completed.
"We are not permitted, as a matter of policy, of commenting about anything in progress," Matt Cain, executive assistant U.S. attorney, said.
Officials from the Department of Justice and the Nuclear Regulatory Commission’s Office of Investigations also declined comment.
The grand jury probe stems from a referral made in September by the NRC’s Office of Investigations to the U.S. Attorney’s Office in Cleveland and the Justice Department, Jan Strasma, a NRC spokesman, said.
The NRC’s Office of Investigations started gathering evidence shortly after the gap in Davis-Besse’s old reactor head was revealed on March 6, 2002, three weeks after the plant was shut down on Feb. 16, 2002, for what was supposed to be a month of refueling and routine maintenance.
The outage is now in its 22nd month, the longest in Davis-Besse’s history.
Despite the grand jury probe, FirstEnergy has not wavered from its previously announced plans for filing paperwork Monday to begin seeking NRC authorization for restarting Davis-Besse, Richard Wilkins, a FirstEnergy spokesman, said.
"My understanding is the 24th [of November] or [sometime] next week, certainly," he said.
Even under a best-case scenario, the review can take up to a month.
The restart application will no doubt be opposed by U.S. Rep. Dennis Kucinich, a Cleveland Democrat and announced presidential candidate who has been among FirstEnergy’s most vocal critics. Among other things, he has asked the NRC to revoke the utility’s operating license.
"Now, more than ever, it is clear that the Davis-Besse nuclear power plant must not reopen until this investigation is complete," the congressman said.
The SEC document that yesterday revealed the existence of a grand jury was FirstEnergy’s submittal of an 8-K disclosure form, a filing required from companies that encounter developments known in the financial community as unscheduled material events. Those are events that have the potential of affecting a company’s value.
The filing was made public late in the afternoon. FirstEnergy’s stock closed on Wall Street at $33.50 a share, down 21 cents a share. Its bond prices also fell.
On the three-page form, FirstEnergy said its nuclear subsidiary that operates Davis-Besse, called FirstEnergy Nuclear Operating Co., intends to "comply fully with the grand jury subpoena and fully cooperate with the investigation.’’
"The company is unable to predict whether legal actions related to the subpoena may be instituted or otherwise what might be the outcome of this investigation. FENOC also remains subject to civil enforcement action by the U.S. Nuclear Regulatory Commission related to Davis-Besse," the form said.
Numerous other issues at Davis-Besse have been cited by the NRC throughout the shutdown. They include management efforts to improve the plant’s workplace atmosphere and proposed remedies for safety-related equipment with design flaws, some dating back as far as when the plant went online in 1977.
Mr. Wilkins said he was not sure if the grand jury’s focus goes beyond the reactor head.
On Wednesday, FirstEnergy was cited in a report sanctioned by the governments of the United States and Canada as being chiefly responsible for the Aug. 14 blackout that spread throughout eight states and Canada. The blackout caused billions of dollars in losses and cut power for about 50 million people.
The report said the blackout could have been contained if FirstEnergy’s computers had been working and its control-room workers had been adequately trained. It blamed FirstEnergy and a regional agency, the Midwest Independent Transmission System Operator, for failing to alert neighboring power companies of the problem in time.
FirstEnergy disputes those findings. Based in Akron, the company is the nation’s fourth-largest investor-owned utility.
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