Three Mile Island finds buyer as times change Deal excludes reactor in '79 nuclear accident

July 18, 1998|By John Murphy | John Murphy,SUN STAFF

LONDONDERRY TOWNSHIP, Pa. -- Three Mile Island, where the nation's worst nuclear accident caused 50,000 residents to flee their homes nearly 20 years ago, made history again yesterday, becoming the first used nuclear reactor to be sold in the United States.

GPU Inc. agreed to sell the plant, which is on an island in the Susquehanna River, to AmerGen Energy Co. for $100 million

The sale involves only the Unit 1 reactor, which was not damaged in the accident in March 1979. It is subject to the approval of a number of regulatory agencies. If approved, it may be the first of many nuclear power plant sales as the electricity industry experiences the shifting fortunes of deregulation, analysts say.

More importantly for Three Mile Island, the sale means that a power industry giant has confidence in a plant that was once the laughingstock of the nuclear power industry.

"It's always going to get a bad rap because of the name," said Fred D. Hafer, president and CEO of Morristown, N.J.-based GPU Inc. "However, all the technically minded people from around the world are familiar with the performance of Three Mile Island."

The plant has won many performance and safety awards in recent years. In 1997, Three Mile Island set a world record for continuous operation -- 616 days and 23 hours.

"It's my feeling that our image is improving," said Michael J. Ross, director of operations and maintenance. "Morale is high now. People look at it as a good place to work."

That was not the case in March 1979, when mechanical and human failures allowed the plant's Unit 2 reactor to lose cooling water, melting the nuclear core and releasing radioactive gases into the air.

The accident shook the foundations of the country's nuclear power industry, calling into question safety systems that the industry relied on. It took almost $1 billion and more than a decade to remove the damaged nuclear fuel.

The Unit 1 reactor, though not involved in the accident, was ordered shut down by the Nuclear Regulatory Commission in 1979. It was restarted in 1985 and operates at full power, producing enough electricity for 860,000 homes.

Under the sales agreement, AmerGen, a joint venture of Philadelphia-based PECO Energy Co. and British Energy of Edinburgh, Scotland, will pay $23 million for Unit 1's reactor and $77 million for its nuclear fuel. The property had a book value of close to $600 million.

Unit 2 is shut down permanently. It was not for sale and will continue to be owned by GPU until it is decommissioned in 2014.

The sale of Unit 1 is part of GPU's strategy to survive in the new world of unregulated electricity suppliers. When deregulation laws come into effect during the next several years, power production will become a highly competitive market where only the biggest companies will survive, Hafer said.

'A new era'

Rather than do battle with the giants, GPU has decided to get out of the power generation business and focus on the transmission of electricity, gas, water and telecommunications.

To that end, the company has begun selling off all its power production facilities, including coal, natural gas and nuclear power plants.

Maryland state officials are negotiating with GPU to buy Deep Creek Lake property, 5,000 acres of land and 3,900 acres of water where GPU runs the 18-megawatt Deep Creek Hydroelectric Station in Garrett County.

Michael Worms, a nuclear energy analyst at Gerard Klauer Mattison & Co. of New York, said he expects many nuclear power plants to change hands as companies adjust to the new, highly competitive environment.

"This is a new era," he said.

"I think we will see a handful of companies running the nuclear power plants," said Neil Sheehan, a spokesman for the Nuclear Regulatory Commission. "This is new territory. This is the first sale of a nuclear power plant where one company has handed the keys over to another one."

Group wants to block deal

Selling a nuclear power plant is not easy. GPU announced this month that its efforts to sell its Oyster Creek nuclear plant in New Jersey were unsuccessful. Maine's Yankee nuclear power plant has not found a buyer, either.

Even with yesterday's agreement, GPU may still have trouble completing the sale.

Eric Epstein, of Three Mile Island Alert, a Harrisburg, Pa.-based anti-nuclear group, said his organization will try to block the deal.

Neither PECO or GPU should be involved in nuclear plant operations, he said. Last year, the Nuclear Regulatory Commission fined Three Mile Island $210,000 for violations, including inadequate engineering design controls and inadequate implementation of the plant's emergency preparedness program.

In 1987, PECO's Peach Bottom nuclear power plant not far from the Maryland border was shut after employees were found sleeping in the reactor's control room.

"We are categorically against the transfer of Three Mile Island from the Three Stooges to the four Marx Brothers. Neither one of them should be in the business of acquiring nuclear reactors," Epstein said.

Carol Hartwell, a resident of nearby Etters, Pa., said she is wary of any change of ownership.

Hartwell had just moved into a new home when warning sirens sounded across the Susquehanna River Valley on March 28, 1979. One month pregnant at the time, Hartwell was asked to leave her home for five days.

Since then, she has not trusted the plant or its owners, no matter who they are, said Hartwell, who still lives in that house.

"What confidence can we have in the new owners?" she asked.

Pub Date: 7/18/98

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