EXHIBIT 99.1
[PSEG INVESTOR NEWS LETTERHEAD]
October 18, 2004
HOPE CREEK NUCLEAR UNIT TO BEGIN REFUELING OUTAGE EARLY
Decision Follows October 10 Shutdown Due to Steam Pipe Failure
Unexpected Replacement Power Costs and O&M Will Pressure
PSEG's 2004 Earnings Guidance of $3.15 to $3.35 Per Share
PSEG Power, the wholesale energy subsidiary of Public Service
Enterprise Group (PSEG), has informed the Nuclear Regulatory Commission (NRC)
that its Hope Creek nuclear station will transition to a planned refueling
outage following the unit's shutdown on October 10 due to a steam pipe failure.
Refueling was to have begun on October 28 and conclude in mid-December.
However, an earlier start of the refueling may provide an opportunity for an
earlier return-to-service date.
Chris Bakken, PSEG's chief nuclear officer and president of PSEG
Nuclear, said in a message to employees that the "best course of action is to
keep the unit off line and transition to the refueling outage now." Bakken
added: "After this outage, I expect Hope Creek will be a much stronger plant,
prepared for a safe and reliable cycle."
Thomas O'Flynn, PSEG's chief financial officer, said the extension of
the refueling outage is expected to increase replacement power costs and O&M by
about $12 million (after taxes) or 5 cents per share of PSEG common stock in the
fourth quarter. "These added costs will pressure the low end of PSEG's 2004
guidance of $3.15 to $3.35 per share," O'Flynn said.
Hope Creek was manually taken out of service as a result of a failed
eight-inch discharge line from the "A" moisture separator to the main condenser
in Hope Creek's turbine building. "Our preliminary investigation of the event
has revealed equipment and personnel performance issues, which we will address
prior to the restart of the unit," Bakken said.
In a letter over the weekend to the NRC, Bakken outlined the key
actions that will be completed prior to resumption of service. A copy of the NRC
letter is attached and is available at www.pseg.com/nrcletter.
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FORWARD-LOOKING STATEMENT
Readers are cautioned that statements contained in this press release about our
and our subsidiaries' future performance, including future revenues, earnings,
strategies, prospects and all other statements that are not purely historical,
are forward-looking statements for purposes of the safe harbor provisions under
The Private Securities Litigation Reform Act of 1995. Although we believe that
our expectations are based on reasonable assumptions, we can give no assurance
they will be achieved. The results or events predicted in these statements may
differ materially from actual results or events. Factors which could cause
results or events to differ from current expectations include, among other
things: the effects of weather; the performance of generating units and
transmission systems; the availability and prices for oil, gas, coal, nuclear
fuel, capacity and electricity; changes in the markets for electricity and other
energy-related commodities; changes in the number of participants and the risk
profile of such participants in the energy marketing and trading business; the
effectiveness of our risk management and internal controls systems; the effects
of regulatory decisions and changes in law; changes in competition in the
markets we serve; the ability to recover regulatory assets and other potential
stranded costs; the outcomes of litigation and regulatory proceedings or
inquiries; the timing and success of efforts to develop domestic and
international power projects; conditions of the capital markets and equity
markets; advances in technology; changes in accounting standards; changes in
interest rates and in financial and foreign currency markets generally; the
economic and political climate and growth in the areas in which we conduct our
activities; and changes in corporate strategies. For further information, please
refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and
Form 8-K filed with the Securities and Exchange Commission. These documents
address in further detail our business, industry issues and other factors that
could cause actual results to differ materially from those indicated in this
release. In addition, any forward-looking statements included herein represent
our estimates only as of today and should not be relied upon as representing our
estimates as of any subsequent date. While we may elect to update
forward-looking statements from time to time, we specifically disclaim any
obligation to do so, even if our estimates change, unless otherwise required by
applicable securities laws.
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(Letter to NRC attached.)
October 17, 2004
LR-N04-0472
Mr. Samuel J. Collins, Regional Administrator
United States Nuclear Regulatory Commission
Region I
475 Allendale Road
King of Prussia, PA 19406-1415
PSEG ACTIONS IN RESPONSE TO OCTOBER 10, 2004 SCRAM
HOPE CREEK GENERATING STATION
DOCKET NO. 50-354
Dear Mr. Collins,
The purpose of this letter is to provide the Nuclear Regulatory Commission (NRC)
with an overview of our plans to respond to the Hope Creek steam leak of October
10, 2004. As the NRC staff is aware, on October 10, 2004, Public Service
Enterprise Group (PSEG) Nuclear personnel manually shutdown the Hope Creek
Generating Station reactor in response to a steam leak in the turbine building.
The steam leak was due to a failed eight (8) inch discharge line from the "A"
Moisture Separator to the Main Condenser. Our preliminary investigation of the
event has revealed equipment and personnel performance issues. PSEG is
appropriately focused on maintaining the plant in a safe condition and continues
to aggressively investigate this event. In light of the significance of this
event, PSEG Nuclear is providing a summary of the actions planned and underway.
Hope Creek Generating Station is currently in cold shutdown. PSEG Nuclear does
not plan to recommence power operation until completion of the Hope Creek
refueling outage in December 2004. Prior to startup, we will complete the
following actions:
1. Complete a root cause analysis of the event.
2. Address the adequacy of operator response and Technical Specification usage
during the event.
3. Address the significant equipment issues surrounding this transient and the
associated impact on plant operations.
2
Mr. Samuel J. Collins
LR-N04-0472
4. Complete the extent of condition review and inspections pertaining to the
failed line and components.
5. Repair the failed moisture separator discharge line.
6. Complete necessary operations procedure changes and associated training due
to issues identified in post trip review. These changes will include
augmenting the procedural guidance for reactor level and pressure control.
7. Review our Operational Challenge Response (OCR) process for improvements.
PSEG Nuclear will keep the NRC staff informed about progress on these actions.
Should questions arise regarding this plan of action, please contact Ms.
Christina Perino, Director, Licensing and Nuclear Safety, at (856) 339-1989.
Sincerely,
A. Christopher Bakken, III
President & Chief Nuclear Officer
Attachment
3
Mr. S. J. Collins
LR-N04-0472
C United States Nuclear Regulatory Commission
Document Control Desk
Washington, DC 20555
Mr. Daniel Collins, Salem & Hope Creek Project Manager
U. S. Nuclear Regulatory Commission
One White Flint North
Mail Stop 08C2
Washington, DC 20555-001
USNRC Senior Resident Inspector - Salem (X24)
USNRC Senior Resident Inspector - Hope Creek (X24)
Mr. K. Tosch, Manager IV
Bureau of Nuclear Engineering
P. O. Box 415
Trenton, NJ 08625