New owner taking over Ginna plant

Thomas Adams//June 11, 2004//

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The sale of the R.E. Ginna Nuclear Generating Station was scheduled to close Thursday, with the new boss taking the reigns today.
Energy East Corp., parent company of Rochester Gas and Electric Corp., is selling the facility in Ontario, Wayne County to R.E. Ginna Nuclear Power Plant LLC, part of Constellation Energy Group LLC of Baltimore, Md.
The transfer is to be announced today at Ginna, including the introduction of new Vice President Maria Korsnick.
Korsnick, an employee of the Baltimore-based energy firm for 18 years, was appointed to the position effective at the closing.
The sale has received all necessary regulatory approvals, Constellation Energy spokesman Robert Gould said Wednesday. The price is listed at $401 million-subject to change late in the week-plus $21.6 million for the plant’s nuclear fuel. The deal also calls for RG&E to transfer a $202 million decommissioning fund to Constellation.
The deal also calls for Constellation Energy to sell 90 percent of Ginna’s output to Rochester-based RG&E for the next 10 years.
Ginna is slated to be decommissioned in 2009 when it reaches 40 years old. RG&E last month obtain a 20-year extension from the Nuclear Regulatory Commission, Constellation Energy officials said.
“From an operational perspective, our top priority is to maintain (Ginna’s) safety standards,” Korsnick said Wednesday. “We’ll be looking into a lot of the business fundamentals after the deal is closed.”
There are no plans for any significant changes in Ginna’s employee base and management structure, other than Kor-snick replacing Ginna’s retiring plant manager Robert Mecredy, she said. Mecredy has been with RG&E for 33 years.
“(Constellation has) extended employment offers to all employees, and essentially all have accepted,” Korsnick said.
Roughly a half-dozen have taken retirement packages, and one other has decided to remain with RG&E. Ginna employs 444. As part of the sale agreement, Constellation Energy must maintain wages and benefits at current levels for 18 months and maintain current levels of pension benefits for 54 months.
Korsnick has held a variety of engineering, operations and quality assurance positions over the last 17 years at Constellation’s Calvert Cliffs Nuclear Power Plant in southern Maryland. A graduate of the University of Maryland with a bachelor of science degree in nuclear engineering, Korsnick has been vice president of asset optimization for company subsidiary Constellation Generation Group.
At Ginna, Korsnick will be responsible for all aspects of operations and maintenance at the 34-year-old, 495-megawatt facility in the town of Ontario. She will report to Michael Heffley, the chief nuclear officer for Constellation Generation Group.
“Maria’s depth of talent and experience in nuclear operations makes her a natural choice to lead the talented professionals that make up Ginna,” Constellation Generation Group president Michael Wallace said.
Constellation “started the due diligence process about a year ago,” Korsnick said. The process includes understanding all of the obligations of the company, such as debts, pending and potential lawsuits, leases, warranties, long-term customer agreements, employment contracts, distribution agreements and compensation arrangements.
The company plans to upgrade the plant’s power capacity as soon as this summer, she said, but declined to provide specifics.
“Maria has been instrumental in our efforts to ensure the seamless integration of Ginna into Constellation Energy,” Wallace said. “Her strong operational and engineering background, coupled with an equally strong leadership and business expertise, will no doubt prove key as we continue to optimize our nuclear operations and national fleet of generating facilities.”
Energy East, in papers filed with the state Public Service Commission in May 2003, states it planned to sell RG&E’s generating plants-Ginna and the coal-fired Russell Station in Monroe County-transforming RG&E into a delivery company by mid-2004.
Constellation Generation Group owns generating plants and fuel-processing facilities in 12 states. The fleet has 12,000 megawatts of capacity, generating 53 million megawatt hours annually, company officials said. The company owns 24 fossil-fuel plants, co-owns a hydroelectric plant in Pennsylvania and co-owns 16 alternative-fuel facilities.
Ginna will be the second nuclear plant in New York owned by Constellation Energy, and the third nationally, including Calvert Cliffs. Ginna is the smallest of the three. Ginna has one plutonium disposal reactor, compared with Calvert Cliffs’ two, Korsnick said.
Constellation owns a 609-megawatt boiling-water reactor at Nine Mile Point 1, in Scriba, Oswego County, that entered service in 1969, and owns 82 percent of the 1,148-megawatt Nine Mile Point 2 reactor that entered service in 1988, the company said. The Long Island Power Authority owns the remaining 18 percent of the second unit.
Korsnick’s husband has accepted a job at the Nine Mile Point complex, she said.
Formed as a holding company by Baltimore Gas and Electric Co. in 1999 as a vehicle to start or own other businesses in a deregulated environment, Constellation Energy has increased its revenues to $10 billion in 2003 from $3.8 billion in 2001, company spokesman Robert Gould said.
The company reported $10.4 billion in revenues for the 12 months ending March 31, 2004. Its cash flow from operations for the same 12 months was $1.17 billion and its free cash flow was $484.8 million. Its total debt, as of March 31, was $5.38 billion.
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