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Northeast Utilities (NYSE: NU)
Headquarters: 174 Brush Hill Avenue, West Springfield, Mass. 01090. (413-785-5871)
1996 annual results
Revenues: $3,792 million
Net income: $1.831 million
Earnings per share: $.01
Earnings per share, quarter ending June 1997: -$.50
Employees: 9,400
Market capitalization: $1.23 billion
CEO: Michael G. Morris
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Business New Haven
10/6/1997
By: BNH
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Northeast Utilities new chairman, president and CEO Michael G. Morris barely had time to get settled in his new office before a new storm of controversy over NU's troubled nuclear program began to test his skill and experience in the business of generating electricity.
NU announced Morris' appointment on August 19, and less than three weeks later, Connecticut officials accused Connecticut Yankee Atomic Power Co., 49 percent owned by Northeast Utilities, of inflating the costs of decommissioning its Haddam reactor.
Governor John G. Rowland released a statement on September 16 that the $427-million bill for the decommissioning of the Connecticut Yankee reactor was double the actual cost, most of which had already been paid through Connecticut consumers' utility bills. U.S. Sen. Christopher J. Dodd followed with a call on September 18 for a Congressional investigation into negligence at both Northeast Utilities and the Nuclear Regulatory Commission.
To make matters worse, Connecticut Attorney General Richard Blumenthal and the Department of Public Utility Control claim to have found evidence of mismanagement and even concealment of safety violations at Connecticut Yankee leading to possible radioactive contamination of the surrounding area. Even if no health threat is involved, Rowland and Blumenthal insist on careful testing and cleanup of the reactor, closed permanently in December 1996, without additional expense to the
public.
Richard Feigenbaum, Connecticut Yankee's executive vice president, has denied misdeeds at the nuclear facility. Some low-level contamination is inevitable, he argues: A nuclear plant “that has operated as long and produced as many kilowatts as Connecticut Yankee, is going to have contamination.” The answer, Feigenbaum believes, is for Connecticut consumers to pay to do the clean-up right. Northeast Nuclear President Bruce Kenyon has promised to hire an outside panel of experts to test the plant's environment to ensure public credibility.
As if problems at Connecticut Yankee in Haddam were not enough, it appears the Millstone 3 reactor in Waterford, shut down since March 1996, may not open on NU's target date of December 19. Morris has stressed that the precise date is not as important as getting the Millstone reactors back online without mishaps, something he terms “priority number one” and “essential for the near-term and long-term health of NU.”
Morris is therefore faced with solving NU's vexing nuclear problems at the same time that electric utilities across the country are preparing to deal with a new and difficult environment of competition, consumer choice and radical deregulation. Morris, despite NU's problems, remains optimistic that the company can persevere. On both “critical issues,” Morris says, “we're prepared to attack both of those fronts.”
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