FIRSTENERGY CORP. Utility pays for blackout

Settlements will reduce second-quarter earnings by 3 cents a share.
AKRON (AP) -- FirstEnergy Corp. has agreed to pay $89.9 million to settle shareholder lawsuits stemming from last summer's blackout, an extended outage at its Davis-Besse nuclear power plant and its earnings restatement.
FirstEnergy said Tuesday that its insurers would pay $71.9 million of the settlement, and the company's $17.9 million share would result in a charge against second-quarter earnings of 3 cents per share.
"With this behind us, we can continue focusing our efforts on providing our customers with reliable and affordable electric service and building value for our shareholders," said Anthony J. Alexander, president and chief executive.
The utility said the agreement didn't amount to an admission of wrongdoing.
The various federal court securities lawsuits had been consolidated, according to FirstEnergy, which said two lawsuits also were pending in state courts.
The settlement is subject to court approval.
Placing blame
In April, a joint U.S.-Canadian task force report on the Aug. 14 blackout leveled much of the blame on FirstEnergy lines and procedures. The blackout affected 50 million customers across the upper Midwest, New England, New York and Ontario.
Last August, the Philadelphia law firm of Berger & amp; Montague sued FirstEnergy on behalf of anyone who may have purchased stock in the company between April 24, 2002, and last Aug. 5, when it announced plans to restate its earnings. The restatement reduced FirstEnergy's income by $99 million.
The lawsuit contended the company had misrepresented its earnings and accounting issues.
At the time, FirstEnergy attributed the restatement to an accounting adjustment and called it "a matter of changing the way certain items were accounted for."
The Davis-Besse plant, located along Lake Erie about 30 miles east of Toledo, started producing electricity again in March after it was shut down for more than two years.
A month after it was closed for routine maintenance in February 2002, inspectors found corrosion on the reactor vessel, where leaking boric acid had eaten almost through a 6-inch-thick steel cap.