- NEW YORK (Reuters) -- FirstEnergy
Corp. Friday admitted that some of its employees made false statements
to US regulators about safety violations at one of its nuclear plants and
said it had reached a deal with the US Department of Justice to avoid indictment
of the utility.
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- The company's nuclear operating
unit, FirstEnergy Nuclear Operating Co. (FENOC), agreed to pay a $28 million
penalty to the Justice Department and cooperate with criminal and administrative
investigations and proceedings. The penalty is the largest ever imposed
for nuclear safety violations in the United States, according to the Justice
Department.
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- If the company held to its side
of the deal, the DOJ would refrain from initiating criminal prosecution
or indicting the company for its conduct related to the problems at its
Davis-Besse nuclear plant in Ohio.
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- Davis-Besse, which can produce
electricity for about 900,000 homes, was forced to close in early 2002
when it was discovered that leaking boric acid had chewed a pineapple-sized
hole in the reactor vessel's carbon steel lid, a serious safety violation.
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- Two former plant employees and
a contractor who worked on the plant were indicted in Ohio Thursday over
the alleged cover-up.
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- The indictment alleges that David
Geisen, Andrew Siemaszko, and Rodney Cook worked to conceal the condition
of Davis-Besse's reactor vessel head and lied about the extent of inspections
done at the plant.
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- Geisen and Siemaszko could face
up to 25 years in prison if convicted on all counts. Cook could face up
to 20 years in prison.
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- FENOC said it entered into the
deferred prosecution agreement with the Environmental Crimes Section of
the Environment and Natural Resources Division of the US Department of
Justice, as well as the US Attorney's office for the Northern District
of Ohio.
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- In the agreement, FirstEnergy
acknowledged that FENOC employees had submitted false statements to the
US Nuclear Regulatory Commission in letters arguing that Davis-Besse could
continue to operate safely and in compliance with NRC regulations.
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- It also accepted responsibility
for the violation of law.
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- "FENOC substituted its judgment
for what was necessary from a safety point of view for that of the NRC,"
David Uhlmann, chief of the Environmental Crimes Section. "There's
no place for that kind of brazen arrogance."
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- Uhlmann said he does not expect
further charges related to the violations at Davis-Besse at this time,
but wouldn't rule them out.
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- The plant went back into operation
in March 2004 after FirstEnergy replaced the reactor lid, made numerous
staff changes at Davis-Besse and revamped plant safety programs.
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- FirstEnergy said the $28 million
penalty would reduce its fourth-quarter earnings by about 9 cents per share.
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- The agreement runs through the
end of 2006. FENOC said it intends to remain in compliance with the deal.
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- In September FENOC agreed to
pay a $5.45 million fine proposed by the Nuclear Regulatory Commission
for the corrosion problem.
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- FirstEnergy shares fell 59 cents,
or 1.2 percent, to $50.92 in late trading on the New York Stock Exchange
Friday.
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