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PECO?s Corbin McNeil: A Nuclear Gambit

Fortnightly Magazine - June 1 1998

Isn't that going to prove complicated under current regulations?

The Atomic Energy Act basically states that¼ a foreign entity cannot have control, and I'm not phrasing that exactly right. But we believe that we have developed a governance structure that will demonstrate that the U.S. entity, PECO, will have control of operational and safety matters¼ Now until we test that with the first license applications, we won't know with certainty but we think that we've got very good arguments. Now, I have not participated, I don't even know where the initiative comes from, but I understand that there are some moves in Washington to try to introduce legislation that would even lift that restriction. Right now, no, we are not currently [involved in that process] and maybe if we were asked to get involved by a foreign entity¼ we might. But we have no current intent.

[British Energy] has a team of people over here that has¼ been with us on business development. We have joint business development teams. We have had a number of their people in our training programs. And we are trying to bring a few of their people in for actual work experience in our stations so that when we make an acquisition, we can both send people into the acquired facilities to begin the transfer to our systems of operation over to those newly acquired plants and bring about the efficiencies and the performance we enjoy ourselves.

Is your nuclear strategy limited to your involvement with British Energy?

That's not been decided yet. We have committed to plant acquisitions to be done jointly, if both of us agree.

PECO is one of the lowest emitters of pollutants, such as nitrogen-oxide and carbon-dioxide. This situation could put the company ahead of the competition if greater environmental constraints are placed on utilities. Is this tactic part of a long-term plan?

We believe that as environmental constraints continue to be imposed that nuclear will have an even better advantage. Our overall strategy is to use what we refer to as environmentally friendly generation. We have bid on some of the hydro assets that are for sale and we would be interested in those going forward. I don't know how many more of them will come up, but we will bid on them at the right price that we think offers an appropriate opportunity for shareholders.

Buying Opportunities

Last year, PECO was involved in negotiations to purchase the Maine Yankee plant in Wiscasset, Maine, and Entergy Corp.'s River Bend plant in Louisiana. Both fell through. Why?

We had offered to buy a part of River Bend. In the Maine Yankee case, one of the problems was the time frame for solving regulatory issues. (There were some technical issues with the plant which escape me right now.) That was only one of a number of factors. Our strategy would be to¼ procure only operating facilities, good plants at great prices, because¼ we believe that these assets will in fact be cheaper than fossil assets¼ in the long run.

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