AmerGen to acquire TMI 1

30 July 1998

AmerGen, the joint venture company owned by British Energy and PECO Energy, has announced its plan to carry out pre-acquisition due diligence work on Three Mile Island 1, the sister to the notorious TMI 2. The 790 MWe PWR outside Harrisburg, Pennsylvania, is owned by GPU Inc, which is seeking to divest itself of its generating assets, both nuclear and non-nuclear. Last spring, its subsidiary, GPU Nuclear, put the unit up for sale.

The deal will involve the purchase of the plant plus instalment payments on existing fuel stocks. The cost would be $50 million, split equally between the two partners. AmerGen would be responsible for decommissioning, but it would be funded by GPU.

The due diligence process is likely to take several months and it is not likely that the operating licence will be transferred until mid-1999. TMI is the first of a number of acquisitions AmerGen is likely to make.

Oyster Creek unsold GPU has been unable to find a buyer for the Oyster Creek nuclear station in New Jersey and would like to retire the unit in the autumn of 2000.

On 8 July, the company said it believes early retirement is in the best economic interests of its customers, and would begin deferring maintenance work that isn’t required to support operation of the nuclear plant after autumn 2000, including planning for a refuelling outage that would otherwise take place at that time. A final decision on Oyster Creek, however, won’t be made until after the New Jersey Board of Public Utilities decides on a plan for restructuring the state’s utilities.

“We made a serious and extensive effort to sell the plant,” said Fred D Hafer, president and chief executive officer of GPU. “However, in the end, we were unable to finalise a deal with the one potential buyer who expressed an interest.” If the plant is decommissioned, GPU will use the “prompt removal/dismantlement method,” which means that the process would begin immediately after the plant is retired. Decommissioning is expected to last several years, at a projected cost of approximately $400 million.

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