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Exelon to Buy PSEG for $13.2 Bln in Stock
Index:
Exelon to Buy PSEG for $13.2 Bln in Stock
Correction: Yankee Safety
Civic group protests over planned uranium test at JNFL facility
Fire on submarine brought under control
Rokkasho plant to use depleted uranium for tests
Acid leaks from Temelin nuclear power plant
Italian government plans to send nuclear waste abroad for treatment
Bulgaria picks Parsons to design Belene nuke plant
================================
Exelon to Buy PSEG for $13.2 Bln in Stock
NEW YORK (Reuters) - Exelon Corp. (EXC.N), the nation's largest
nuclear power company, has agreed to buy New Jersey utility Public
Service Enterprise Group Inc. (PEG.N) for $13.2 billion in stock,
creating the nation's largest utility, the companies said on Monday.
Exelon said the purchase of PSEG, with which it already owns some
nuclear plants, would boost earnings immediately. The companies said
the deal could close by the end of 2005, but some analysts said
regulatory challenges may arise.
The deal values PSEG at $52.84 per share, a nearly 12 percent premium
over the company's closing stock price on Friday and a nearly 16
percent premium over its closing price on Thursday, before word of
the deal leaked out.
The acquisition will increase Exelon's generating capacity by about
50 percent, to 52,000 megawatts. A megawatt powers about 1,000 homes.
The new company will be called Exelon Electric & Gas and will serve 7
million electricity customers and 2 million gas customers in
Illinois, New Jersey and Pennsylvania.
The value of the deal rose from $12.8 billion to $13.2 billion as
Exelon shares gained $1.37, or 3 percent, to $43.23 on the New York
Stock Exchange. PSEG shares rose $3.18, or 6.7 percent, to $50.45.
COST SAVINGS
The companies said they expect to save $400 million before taxes in
the first year after the deal closes through efficiencies in areas
including generation, transmission, distribution and power marketing,
and through increased production.
The combined work force of 28,000 is expected to be cut by 5 percent,
they said. About 38 percent of the post-merger work force will be in
New Jersey.
"It's a great fit for both companies," said Doug Wilson, an analyst
for the Utility Fund (CSUAX.O) at Cohen & Steers Capital Management
Inc., which owned more than 2 million shares in both companies as of
Sept. 30.
But Wilson also said the companies might have problems getting
regulatory approval. Regulators watch closely for too much dominance
in one market.
Exelon said it expects to raise it annual dividend to $1.83 from
$1.60 in 2005 before the close of the deal, assuming the acquisition
closes by the end of 2005.
The company will have its headquarters in Chicago, where Exelon is
now located. Its energy trading operations and nuclear headquarters
will be in Pennsylvania, and the generation company's combined
headquarters will be in Newark.
It expects to have regulatory approvals within 12 to 15 months and
said it would seek shareholder approval in the second quarter of
2005. Agencies including the Federal Energy Regulatory Commission,
the Nuclear Regulatory Commission and state utility commissions must
approve the deal.
Sanford C. Bernstein analyst Hugh Wynne said in a research note that
the companies' similar regulatory structures will ease the approval
process. In particular, he noted that nuclear regulators may be
pleased that PSEG, which has had issues with operating its plants,
will be operated by highly rated Exelon.
J.P. Morgan Securities and Lehman Brothers are serving as financial
advisers to Exelon, while Morgan Stanley is advising PSEG.
------------------
Correction: Yankee Safety
BRATTLEBORO, Vt. (AP) - In a Dec. 19 story about the Vermont Yankee
nuclear power plant, The Associated Press reported erroneously that
the Nuclear Regulatory Commission would review whether the plant is
in compliance with its design specifications. The commission has
agreed only to review a petition by two engineers seeking such a
study.
------------------
Civic group protests over planned uranium test at JNFL facility
TOKYO, Dec. 20 (Kyodo) - A civic group protested Monday over the
planned start of uranium testing at a nuclear fuel reprocessing plant
operated by Japan Nuclear Fuel Ltd. in Rokkasho, Aomori Prefecture.
"Japanese electric power companies have obtained a large amount of
plutonium stored (at storage facilities), which total about 40 tons.
Why must the reprocessing facility at Rokkasho go into operation
despite the large amount of excess plutonium?" the Citizens' Nuclear
Information Center said in a statement.
The group said the JNFL, the government and other concerned parties
"are seeking to go ahead with the project without addressing" the
concerns of many citizens, and called on them to abandon the project.
On Monday, the JNFL began moving depleted uranium into its nuclear
fuel reprocessing plant in preparation for the test operation
starting Tuesday.
The test run is aimed at checking various operations and equipment
performance prior to an "active test" using spent nuclear fuel.
-----------------
Fire on submarine brought under control
KITTERY, Maine (AP) - A small fire broke out Monday aboard the
nuclear submarine USS Jacksonville while it was undergoing a
refueling overhaul in a dry dock at the Portsmouth Naval Shipyard.
The fire was immediately extinguished and the reactor was never in
danger, said Danna Eddy of the public affairs office at the base. A
shipyard firefighter and a sailor aboard the Jacksonville were
treated at the scene for smoke inhalation.
Officials were investigating the cause of the fire.
----------------
Rokkasho plant to use depleted uranium for tests
AOMORI, Japan, Dec. 20 (Kyodo) - Japan Nuclear Fuel Ltd. began moving
depleted uranium into its nuclear fuel reprocessing plant in
Rokkasho, Aomori Prefecture, on Monday in preparation for a test
operation starting Tuesday, company officials said.
The test run -- expected to last for about a year -- is aimed at
checking various operations and equipment performance prior to an
"active test" using spent nuclear fuel, the officials said.
JNFL expects it to take several days to transport some 53 tons of
depleted uranium to the plant by truck, including the 31 tons
unloaded from a freighter Monday at Mutsu-Ogawara port, also in the
village of Rokkasho.
The Rokkasho-based JNFL has compiled a list of 190 possible cases of
problems that could arise in the course of the test run, including
leakage of small amounts of radioactive substances, to prepare to
deal with them if they occur.
But an official said, "This is not to say that problems other than
those on the list would not occur."
The nuclear fuel-reprocessing plant for recovering uranium and
plutonium from nuclear fuel burned at nuclear power plants is a key
element in Japan's nuclear fuel-cycle policy.
The test run using depleted uranium had been postponed a number of
times for reasons such as leakage of water from the nuclear fuel
storage pool, faulty construction, and the fatal accident in August
at the Mihama nuclear power plant in Fukui Prefecture.
The Rokkasho plant has been under construction since April 1993 and
will become Japan's first commercial plant for reprocessing spent
nuclear fuel. About 95 percent of the construction work was completed
by the end of September.
------------------
Acid leaks from Temelin nuclear power plant; no environmental damage
reported
PRAGUE, Czech Republic (AP) - Some 20,000 liters of boric acid leaked
from a unit at the Temelin nuclear power plant but was contained and
caused no environmental damage, an official said Monday.
The acid, used to slow fission in the reactor, leaked from the
primary circuit of the plant's second unit, which has been recently
shutdown for minor cooling system adjustments, said plant spokesman
Milan Nebesar. The reactor was restarted on Sunday.
The acid "leaked in a closed area and all went to a special tank
through a special sewage system," Nebesar said. The accident did not
force the plant's shutdown.
The first unit of the plant was working at full capacity on Monday,
but will be shut down for minor adjustments on Dec. 24.
Construction of the plant's two 1,000-megawatt units, which were
based on Russian designs, started in the 1980s. The reactors later
were upgraded with U.S. technology, but they have remained
controversial because of frequent malfunctions.
The station, 60 kilometers (35 miles) north of the Austrian border,
has been a source of friction between the two countries.
Environmentalists in Austria demand its closure, while Czech
authorities insist it is safe.
----------------
Italian government plans to send nuclear waste abroad for treatment
ROME (AP) - The Italian government plans to send most of the
country's nuclear waste abroad for treatment and storage, an official
was quoted as saying.
Giancarlo Bolognini, an executive with Sogin, the state-run company
that handles Italy's nuclear waste, was quoted Saturday by the ANSA
news agency as saying that officials have signed a decree to send the
waste abroad.
News reports said it could be sent either to France or to Britain.
Bolognini was quoted as saying the waste would be returned to Italy
in about 20 years, once Italy prepares a site for it.
Italy banned nuclear reactors for energy in the 1980s, but the issue
of what to do with nuclear waste has remained controversial.
Last year, the government backed off on a plan to put a nuclear dump
in a small southern town in the Basilicata region, giving in to weeks
of protest marches and highway blockades by citizens.
-----------------
Bulgaria picks Parsons to design Belene nuke plant
SOFIA, Dec 20 (Reuters) - Bulgarian state power utility NETC has
chosen consultants Parsons Europe Ltd. to design and supervise the
construction of a 2 billion euro ($2.7 billion) nuclear power plant
in the Danube city of Belene, it said on Monday.
"We have every reason to believe that the choosing of a construction
contractor for Belene will be finalised by the end of June," NETC
chairman and Deputy Energy Minister Angel Minev told a news
conference.
Parsons beat out Spain's Impresarios Agrupados Internacional, which
had also been vying for the contract.
Earlier this month, NETC tapped Deloitte Central Europe Limited and
Norton Rose to act as financial advisers for the 1,600-2,000 megawatt
plant, which should come on line in 2010 and compensate for older
reactors Bulgaria is shutting down ahead of joining the EU.
Bulgaria aims for the state to keep a majority in the Belene plant,
but it expects foreign investors to also take stakes and provide
financing.
Three groups have shown interest in building Belene, including one
comprising Czech engineering firm Skoda Praha , Citibank , Italy's
Unicredito and Czech Komercni Banka
Another competitor includes France's Framatome and Russia's
Atomstroiexport.
These have proposed using an existing site at Belene, where Bulgaria
has already invested $1 billion in a 1,000 megawatt reactor and other
works in a project that was halted last decade due to inconsistent
funding and environmental protests.
The third consortium, made up of Canada's Atomic Energy Canada Ltd,
Italian Ansaldo Nuclear , U.S. Bechtel and Japan's Hitachi <1970.T>
has offered to build an entirely new plant, but is now considering
pulling out of the contest.
-------------------------------------
Sandy Perle
Senior Vice President, Technical Operations
Global Dosimetry Solutions, Inc.
2652 McGaw Avenue
Irvine, CA 92614
Tel: (949) 296-2306 / (888) 437-1714 Extension 2306
Fax:(949) 296-1902
E-Mail: sperle@dosimetry.com
E-Mail: sandyfl@earthlink.net
Global Dosimetry Website: http://www.dosimetry.com/
Personal Website: http://sandy-travels.com/
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