AKRON Credit firm lowers FirstEnergy's rating

Improving financial measures will be difficult, a Wall Street credit report says.
AKRON (AP) -- FirstEnergy Corp.'s credit rating was lowered Tuesday by a Wall Street credit firm that said it was concerned about more delays in restarting the Davis-Besse nuclear plant and fallout from the nation's worst blackout.
Standard & amp; Poors lowered FirstEnergy's rating from BBB to BBB-, the lowest investment grade rating the New York firm gives.
The move came a week after the Nuclear Regulatory Commission said it still had concerns about the company's Davis-Besse nuclear plant in Oak Harbor, near Toledo. Akron-based FirstEnergy hopes to restart the plant early next year. Davis-Besse has been shut down for almost two years because of extensive corrosion found on the reactor vessel.
Leaking boric acid nearly ate through a 6-inch-thick steel cap covering the plant's reactor vessel. It was the most extensive corrosion ever at a U.S. nuclear reactor.
Analyst's comments
S & amp;P analyst Aneesh Prabhu said the lingering problems at the plant has made FirstEnergy more unstable. He also said uncertainty about a yet-to-be-released final government report about the Aug. 14 blackout contributed to the rating.
FirstEnergy has already taken heat from the U.S.-Canadian task force investigating the outage. The task force said in November in an interim report that FirstEnergy failed to contain failing power lines, allowing the blackout to cascade, eventually cutting off electricity to 50 million people in eight states and Canada.
"Standard & amp; Poor's is concerned that the existing operational and management challenges facing the company, as well as any additional hurdles that could occur will make it difficult for the company to reach the rapid improvement in financial measures that was supporting the BBB rating," Prabhu wrote in his report.
FirstEnergy said in a statement that it disagreed with S & amp;P's move.
The company said it has made strides in improving its financial health, including a third-quarter common stock offering that raised $935 million. FirstEnergy used the money to pay down some of its $12.5 billion in debt.
FirstEnergy also reaffirmed its 2004 earnings guidance of $2.70 a share to $2.85 a share.