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FOLLOWING MONTHS OF SPECULATION BY INDUSTRY players, Corbin A. McNeill Jr., chairman and CEO of PECO Energy Co., has formally announced that the company will focus on nuclear generation.
The mid-April revelation didn't take many speculators by surprise.
PECO has decided to focus on generation, nuclear generation in particular. While many other companies have chosen to abandon this risky part of the business, PECO is entering it with both feet. The company believes that nuclear is where its strength and expertise lie. The same can be said about McNeill (em nearly every position he's held in his 30-plus-year career has had the word "nuclear" in the title. PECO plans to sniff out bargain-priced generating plants and turn them into moneymaking opportunities. As more companies divest, PECO will have its pick of the plants.
"We're going to maintain our pipes and wires business here in Philadelphia. But we are not actively pursuing right now any other opportunities in that area," McNeill says.
What has sparked some discussion, however, is whether the company is the "unnamed potential bidder" on GPU Inc.'s Oyster Creek and Three Mile Island plants. PECO expressed interest in Oyster Creek as early as last year, according to information from PaineWebber.
McNeill declined to comment, saying "we don't discuss potential merger and acquisition." He did indicate, however, that there are plans to make more purchases in the U.S. in the near-term.
Another issue that has turned heads is PECO's joint venture with nuclear heavyweight British Energy of Edinburgh, Scotland. Under the mantle AmerGen Energy Co., the companies will jointly pursue nuclear opportunities in the U.S. Some wonder how the Nuclear Regulatory Commission and the Securities and Exchange Commission will react to future nuclear acquisitions involving a foreign company.
Public Utilities Fortnightly recently spoke with McNeill to learn more about PECO's plans for competition and his take on nuclear issues.
What is PECO's new corporate strategy?
Our strategy is a generation-based strategy. And in the near term, it is the nuclear-focus, generation strategy. And the reason for that is that we believe that we have the people and systems to operate those systems well. And we have demonstrated that over the long-term in the Peach Bottom recovery from 1987 and '88 and in the completion of the construction and the subsequent operation of the Limerick generating station. We have maintained high NRC SALP ratings [Systematic Assessment of Licensee Performance], very good INPO periodic reviews [Institute of Nuclear Power Operations] and at the same time that¼ they've set safety grades for us, we have reduced our outage time, have increased our availability factors and have generally have been among the leaders in the industry in the operation of plants.
Some say that NRC rules could make it difficult for a "nuclear utility" to compete against other power producers? How is PECO going to deal with regulatory issues as a nuclear specialist?
Most of the issues, these "regulatory issues," I view as long-term issues that will get resolved, whether it's spent-fuel disposal or other¼ issues.
What about your venture with British Energy?