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BRIDGMAN, Mich., Dec. 1 /PRNewswire-FirstCall/ -- American Electric Power
(NYSE: AEP) continues work to repair Cook Nuclear Plant's damaged Unit 1
turbine generator. A repair option may allow operation at reduced power, but
the rotors will ultimately be replaced to ensure the long-term viability of
the unit. The expected return-to-service timeline ranges from the second half
of 2009, if repair is successful, to 2010 if the rotors must be replaced
before operation.
AEP anticipates that all costs incurred to return Cook Unit 1 to service
will be recovered through insurance, vendor warranty or the regulatory
process. Repair and replacement of the turbine rotors is estimated to cost up
to $332 million.
The unit has been out of service since Sept. 20 after severe turbine
vibrations, caused by broken low-pressure turbine blades, damaged the main
turbine and generator. In 2006, three new low-pressure turbines, manufactured
by Siemens, were installed in Cook Unit 1. Blades broke on two of these three
turbines. The high-pressure turbine and main generator are original plant
equipment manufactured by General Electric.
"We want to return Cook Unit 1 to service as soon as it is feasible and we
can ensure reliable long-term operation," said Michael G. Morris, AEP's
chairman, president and chief executive officer. "Our expectations are that
the low-pressure turbine rotors can be repaired and the unit will return to
service in the second half of 2009."
The best-case scenario, with successful repairs and expedited parts
deliveries, estimates a return to service in September 2009. This repair
option includes straightening the rotor shafts and modifying each rotor by
removing one or two of the largest rows of blades until new rotors can be
manufactured. Returning to service without one or two rows of blades would
result in an approximate power reduction of 100 to 250 megawatts (MW) from
Unit 1's rated net capacity of 1,030 MW. Work to straighten the first rotor
shaft has started. Work on the third rotor will finish in mid-January.
If the repair is not successful, the unit will not restart until new
rotors are available. AEP and Siemens are pursuing turbine rotor replacement
in parallel with repair. The manufacturing schedule of long lead-time items
will result in a low-pressure turbine rotor delivery date and return to
service in 2010.
The General Electric high-pressure turbine and main generator rotors are
undergoing repairs at a GE facility in Chicago. Both are expected to be
returned to Cook prior to the return of the repaired low-pressure turbine
rotors.
At the Cook site, additional inspection and repair work continues on the
turbine support and auxiliary systems. This work is also scheduled for
completion in first-quarter 2009 prior to the return of the low-pressure
rotors to the site. More than 400 additional contractors are currently
performing that work.
The refueling outage for Cook Unit 2, which continues to operate at full
power, will take place as scheduled in the spring of 2009. Unit 2 is rated at
1,070 MW net. The refueling outage scheduled in the fall of 2009 for Cook Unit
1 will be moved into 2010, with the date dependent on the return to service.
AEP anticipates sufficient reserve generating capacity so the loss of the
capacity from the Cook unit does not affect AEP's ability to serve customers.
"The safe and reliable operation of the Cook units is our primary focus,"
said Michael Rencheck, AEP senior vice president and chief nuclear officer.
"We have the top experts from Siemens and GE working on Unit 1 turbine
repairs, and we'll manage all the work in the manner that best supports our
commitment to the long-term safe and reliable operation of the entire station
and to the benefit of our customers."
Indiana Michigan Power, the AEP utility that operates Cook Nuclear Plant,
maintains property insurance with a $1 million deductible that covers repair
costs. Indiana Michigan Power also maintains a separate accidental outage
policy whereby, after a 12-week deductible period, the company is entitled to
weekly payments of $3.5 million for the first 52 weeks following the
deductible period. The weekly indemnity lowers to $2.8 million after the
initial 52 weeks of indemnity.
American Electric Power is one of the largest electric utilities in the
United States, delivering electricity to more than 5 million customers in 11
states. AEP ranks among the nation's largest generators of electricity, owning
nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the
nation's largest electricity transmission system, a nearly 39,000-mile network
that includes more 765-kilovolt extra-high voltage transmission lines than all
other U.S. transmission systems combined. AEP's transmission system directly
or indirectly serves about 10 percent of the electricity demand in the Eastern
Interconnection, the interconnected transmission system that covers 38 eastern
and central U.S. states and eastern Canada, and approximately 11 percent of
the electricity demand in ERCOT, the transmission system that covers much of
Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power
(in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana
Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and
Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas).
AEP's headquarters are in Columbus, Ohio.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934. Although AEP and each of its
Registrant Subsidiaries believe that their expectations are based on
reasonable assumptions, any such statements may be influenced by factors that
could cause actual outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to differ
materially from those in the forward-looking statements are: electric load and
customer growth; weather conditions, including storms; available sources and
costs of, and transportation for, fuels and the creditworthiness and
performance of fuel suppliers and transporters; availability of generating
capacity and the performance of AEP's generating plants; AEP's ability to
recover regulatory assets and stranded costs in connection with deregulation;
AEP's ability to recover increases in fuel and other energy costs through
regulated or competitive electric rates; AEP's ability to build or acquire
generating capacity (including the ability to obtain any necessary regulatory
approvals and permits) when needed at acceptable prices and terms and to
recover those costs (including the costs of projects that are canceled)
through applicable rate cases or competitive rates; new legislation,
litigation and government regulation, including requirements for reduced
emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and
other substances; timing and resolution of pending and future rate cases,
negotiations and other regulatory decisions (including rate or other recovery
of new investments in generation, distribution and transmission service and
environmental compliance); resolution of litigation (including disputes
arising from the bankruptcy of Enron Corp. and related matters); AEP's ability
to constrain operation and maintenance costs; the economic climate and growth
or contraction in AEP's service territory and changes in market demand and
demographic patterns; inflationary and interest rate trends; volatility in the
financial markets, particularly developments affecting the availability of
capital on reasonable terms and developments impacting AEP's ability to
refinance existing debt at attractive rates; AEP's ability to develop and
execute a strategy based on a view regarding prices of electricity, natural
gas and other energy-related commodities; changes in the creditworthiness of
the counterparties with whom AEP has contractual arrangements, including
participants in the energy trading markets; actions of rating agencies,
including changes in the ratings of debt; volatility and changes in markets
for electricity, natural gas, coal, nuclear fuel and other energy-related
commodities; changes in utility regulation, including the implementation of
the recently passed utility law in Ohio and the allocation of costs within
regional transmission organizations; accounting pronouncements periodically
issued by accounting standard-setting bodies; the impact of volatility in the
capital markets on the value of the investments held by AEP's pension, other
postretirement benefit plans and nuclear decommissioning trust and the impact
on future funding requirements; prices for power that AEP generates and sells
at wholesale; changes in technology, particularly with respect to new,
developing or alternative sources of generation; and other risks and
unforeseen events, including wars, the effects of terrorism (including
increased security costs), embargoes and other catastrophic events.
SOURCE American Electric Power
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