SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 23, 2002
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
----------- ----------------------------------------- -----------------
333-21011 FIRSTENERGY CORP. 34-1843785
(An Ohio Corporation)
76 South Main Street
Akron, Ohio 44308
Telephone (800)736-3402
1-2323 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 34-0150020
(An Ohio Corporation)
c/o FirstEnergy Corp.
76 South Main Street
Akron, OH 44308
Telephone (800)736-3402
1-3583 THE TOLEDO EDISON COMPANY 34-4375005
(An Ohio Corporation)
c/o FirstEnergy Corp.
76 South Main Street
Akron, OH 44308
Telephone (800)736-3402
Item 5. Other Events
On May 23, 2002, FirstEnergy Corp. announced that it purchased an unused
replacement reactor vessel head for the Davis-Besse Nuclear Power Station and
identified this as the preferred option of returning the unit to service. The
Davis-Besse Nuclear Power Station is owned 51.38% by The Cleveland Electric
Illuminating Company and 48.62% by The Toledo Edison Company (both wholly owned
subsidiaries of FirstEnergy). During the past two months FirstEnergy
investigated the viability of installing a replacement reactor vessel head from
the Midland Nuclear Plant in Michigan, an incomplete nuclear unit owned by
Consumers Energy. The Midland reactor head was engineered and built to
specifications similar to those for the Davis-Besse plant by the same
manufacturer, Babcock & Wilcox. Because the Midland plant was never completed as
a nuclear facility, the head is not radioactive. The head is constructed of 6
inch thick carbon steel with a stainless steel liner and is 17 feet in diameter,
7 feet high, and weighs more than 100 tons.
FirstEnergy completed its comprehensive visual, engineering and document
reviews of the Midland head to ensure that its original manufacture meets all
applicable codes and regulations. Also, FirstEnergy assembled the necessary
records to verify that the original certification for the unit is still valid.
Following these reviews, the unit was purchased from Consumers Energy.
The major work elements at the Midland site will include:
- creating an opening in the Midland containment building;
- removing the head and preparing it for transporting;
- transporting the head to Davis-Besse; and
- closing the opening in the containment building.
In parallel with the work at Midland, work at Davis-Besse will include:
- removing the service structure and all the control rod drive mechanisms
from the head;
- creating an opening in the Davis-Besse containment building;
- installing a head removal and installation transport system;
- removing the current head from the containment building;
- moving the Midland head into the containment building; - placing the
Midland head on the head stand in the containment building;
- installing the control rod drives and service structure on the Midland
head;
- closing the opening in the containment building; and
- temporarily storing or disposing of the existing head.
The contracting firms, Bechtel and Framatome ANP, are scheduled to assist
FirstEnergy in these activities. Bechtel's role is to open and restore the
Midland and Davis-Besse containment buildings and transport the Midland head to
Davis-Besse. Framatome is expected to continue assisting FirstEnergy in
demonstrating that the Midland head meets all design and code requirements and
in preparing the replacement
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head for service. Both Bechtel and Framatome have extensive experience in
conducting work of this type.
The containment buildings at Davis-Besse and Midland are thick concrete
and steel structures designed to strict specifications. The containment building
at Midland will be restored only to a weather-tight status. The Davis-Besse
containment building will be restored to meet all original design
specifications. Bechtel has performed this type of containment building repair
many times for other utilities.
FirstEnergy needs concurrence from the State of Ohio (pressure vessel
certification) and ANI (nuclear insurance carrier) for the use of the Midland
head at Davis-Besse. In addition, the Nuclear Regulatory Commission (NRC) will
require that:
- the replacement head meets all code and design requirements;
- all safety measures and requirements are met while the containment
building is opened; and
- the containment building is restored to its original design
specifications.
FirstEnergy estimates that the incremental costs to replace the
Davis-Besse reactor vessel head are about $55 million to $75 million, most of
which will be capitalized. In addition, FirstEnergy also expects to undertake
additional projects, such as maintenance or mandated activities scheduled in the
future, that can be completed during the extended outage, as well as other work
associated with restarting the plant. These projects could include replacing
components in the feedwater heater and other plant system equipment, installing
leak prevention systems in high- and low-pressure condensor equipment, and
revising various maintenance and inspection programs. This work is expected to
cost an additional $50 million to $70 million, some of which may be capitalized.
These costs are higher than the previous estimate of $25 million to perform a
permanent welded repair of the corroded area, most of which would have been
expensed.
FirstEnergy stated that the head replacement and the additional projects
to support the restart of Davis-Besse are expected to be completed in the fourth
quarter of 2002. However, the NRC must approve resumption of operations at the
unit.
FirstEnergy estimates that for months other than July and August, net
replacement energy costs could increase between $10 million to $15 million per
month and reduce after-tax earnings by $0.02 to $0.03 per share per month. For
the months of July and August, net replacement energy costs could increase by
approximately $20 million per month and reduce after-tax earnings by $0.04 per
share per month. FirstEnergy is fully hedged for the on-peak replacement energy
for Davis-Besse through August and largely hedged for the remaining months of
2002.
FirstEnergy identified replacement of the reactor vessel head at
Davis-Besse as the preferred option to return the plant to service in a safe and
timely manner and remains committed to working closely with the NRC to achieve
this goal.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 24, 2002
FIRSTENERGY CORP.
-----------------
Registrant
THE CLEVELAND ELECTRIC
----------------------
ILLUMINATING COMPANY
--------------------
Registrant
THE TOLEDO EDISON COMPANY
-------------------------
Registrant
/s/Harvey L. Wagner
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Harvey L. Wagner
Vice President and Controller
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