1. Subject: FirstEnergy Big Contributor to Bush Administration
By Brian Ross/abcnews, Greg Palast & reported on NPR
(Posted 24 Aug 03) FirstEnergy has been under investigation as the possible cause of the Aug 2003 blackout. Financial information reported by The Center for Responsive Politics show that FirstEnergy spent millions of dollars on lobbyists and campaign contributions.
In 2002, FirstEnergy gave $1,044,807 to political parties -- 70 percent to Republicans and 29 percent to Democrats -- the 10th-largest amount contributed by an energy and natural resources company and the sixth-largest amount contributed by an electric utility, according to the Center for Responsive Politics. FirstEnergy spent another $2,259,975 on lobbying in 2002.
In June, the CEO of FirstEnergy, Peter Burg, hosted a fund-raiser for Vice President Dick Cheney that raised $600,000 for President Bush's re-election campaign. And when he first prepared to move into the White House, Bush appointed the president of FirstEnergy, Anthony Alexander, to serve on the administration's energy transition team.
It has been pointed out that deregulation motivated by campaign contributions is behind the recent blackout as well the California blackout of Dec 2000. After the 2003 blackout even President Bush admitted that more regulation of the power companies was needed. *********************
2. Subject: FirstEnergy officials examine extent of company's role in power outage
By Dafna Linzer and John Seewer
The Associated Press
Date:18 Aug03
CLEVELAND - It's been a bad month for FirstEnergy. The Ohio-based owner of power lines that may have triggered the largest blackout in U.S. history was found guilty of polluting early this month, warned about its staggering $12.5 billion debt and forced to slash earnings estimates.
All this comes as the company is under close scrutiny for safety at its nuclear plant, which has been the subject of congressional hearings and an investigation by the Nuclear Regulatory Commission.
The drain on the company's financing - stemming mostly from cleanup of the shuttered nuclear plant - could make it harder for FirstEnergy to tackle any financial fallout from the outage.
Company officials said Sunday that they would concentrate on the blackout investigation and not other problems.
According to a preliminary analysis, FirstEnergy - which owns four of the first five lines that failed - was experiencing unusual electric conditions as much as four hours before the blackout hit Thursday, sweeping across eight states and parts of Canada.
"What happened on Thursday afternoon is much more complex than a few tripped power lines in our system," said Todd Schneider, a FirstEnergy spokesman.
Still, he said the company didn't consider shutting down lines before the blackout. "At the time, there was no reason to isolate it," he said.
Efforts to nail down the source of Thursday's massive blackout have shifted to Ohio and FirstEnergy Corp., the nation's fourth-largest investor-owned utility and No. 159 on the Fortune 500 list.
FirstEnergy said a system that is supposed to flash a red warning on computer monitors at the company's control center was not operational when the lines began failing Thursday afternoon.
The Akron-based company has 16 power plants and an annual revenue of more than $12 billion, with customers along an area that stretches from Ohio to New Jersey.
Although considered a utility, FirstEnergy operates as more of a conglomerate, handling many facets of the energy business from power plant operations to customer services. The company benefited enormously from deregulation of the industry - which is being blamed, in part, for failed efforts to overhaul the power grid and modernize the lines.
Its Davis-Besse nuclear plant east of Toledo, Ohio, was shut in February 2002 for maintenance. A month later, it was discovered that boric acid ate through much of a 6-inch-thick steel cap on the plant's reactor vessel.
The company is awaiting a decision by the Nuclear Regulatory Commission before the plant can reopen and has been forced to buy power elsewhere to make up for the halt in productivity at Davis-Besse. It has cost the company $450 million since last month for repairs and replacement power.
Troubles at the plant also caught the attention of Congress and the Environmental Protection Agency.
More problems began to pile up this summer.
On Aug. 7, a federal judge ruled that FirstEnergy violated pollution control laws when it rebuilt a power plant without installing state-of-the-art smog controls required under the Clean Air Act. A second trial will determine penalties.
The government argued that the pollution from FirstEnergy and others winds up in the Northeast, where it causes acid rain and health problems.
Similar cases are pending against American Electric Power of Columbus, Ohio, Illinois Power Co., Duke Energy Corp. and Southern Co.
On the day of the court decision, Standard & Poor's held FirstEnergy's credit rating one notch above junk status but said the company's outlook remained negative and that long-term debt should be reduced to $10 billion by year's end.
Early Aug 2003, FirstEnergy reported a second-quarter loss of $57.9 million, or 20 cents per share, because of special charges. FirstEnergy also said it would restate 2002 financial statements.
FirstEnergy executives spent the weekend in their offices to determine the extent of the utility's role in the outage. Lunches were brought in and entry into FirstEnergy's downtown brick headquarters was strictly controlled.
"We want to get to the bottom of this," said Schneider, the FirstEnergy spokesman.
He said the company was still investigating whether its warning system is working.
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