Coal, Nuclear

GE Power Systems contract establishes optimization business model for nuclear industry


ATLANTA, GA, March 27, 2003 — GE Power Systems’ latest Contractual Service Agreement (CSA) with Detroit Edison is the first agreement to implement GE’s collaborative approach to services in the nuclear power plant industry.

GE’s 10-year CSA with Detroit Edison is focused on optimizing the operational reliability of the Neutron Monitoring System at Detroit Edison’s Fermi 2 Power Plant, located outside of Detroit, Michigan. The contract will be managed by GE’s Reuter-Stokes team located in Twinsburg, Ohio.

The contract, modeled after GE’s gas turbine CSAs, transcends traditional transaction-based agreements that exchange products or services for negotiated prices to create an arrangement where both supplier and vendor share responsibility for maximizing process operations.

The strong advantage for this type of agreement is creating a more familiar and collaborative environment, providing GE with detailed process knowledge that can help discover and implement optimum operating conditions.

Detroit Edison will make fixed quarterly payments to GE Power Systems in exchange for Reuter-Stokes’ readiness-to-serve capability, a broad range of ongoing nuclear instrumentation products, services and technical expertise needed to efficiently and reliably operate the Neutron Monitoring System. This contract represents the first non-transactional nuclear instrumentation parts and services agreement of its kind that GE Power Systems and a nuclear operating company have jointly established.

“This CSA signifies a new way of doing business. It represents a shift from vendor to partnership, wherein both parties are motivated to improve the overall value of the service offering,” said Ric Artigas, CEO of GE Energy Services.

“We appreciate the value and confidence that Detroit Edison has placed in the GE Power Systems team as a full-scope service supplier and we hope to gain many things from this agreement, including greater technical collaboration and new product development. The added value and expertise GE can bring to the table through this type of agreement is evident in the CSAs GE has in place with other businesses. Given the mutual benefit this type of agreement can bring to both parties, we hope to establish this business model as the standard for the nuclear industry; we’re actively marketing the approach to our existing customer base.”

William T. O’Connor, Detroit Edison vice president, nuclear generation, adds “As the only nuclear plant in Detroit Edison’s generating fleet, Fermi 2 must establish strong partnerships with our critical service providers. The partnership with GE Power Systems is just one example of how the entire GE team works to support Fermi 2.” Detroit Edison is an investor-owned electric utility serving 2.1 million customers in Southeastern Michigan and a subsidiary of DTE Energy (NYSE:DTE), a Detroit-based diversified energy company.

The Fermi Nuclear 2 Power Plant was designed and built by GE and began operation in January 1988. This new agreement replaces a five-year transaction-based agreement for the Neutron Monitoring System, which expired in 2001 and is the third long-term contract currently in place between GE Power Systems and Fermi. Already in existence are contracts for nuclear electronics and outage services, which also resemble the transaction-based business model.

Reuter-Stokes is a provider of instrumentation and sensors for harsh environments. Its sensors operate in high-temperature, vibration, humid, corrosive and nuclear applications. In business since 1956, Reuter-Stokes provides products for power generation (nuclear and fossil fuel utilities), oil well logging, safeguard and environmental monitoring industries.

About GE Power Systems

GE Power Systems (www.gepower.com) is a supplier of power generation technology, energy services and management systems with estimated 2003 revenues of nearly $23 billion. Based in Atlanta, Georgia, GE Power Systems provides equipment, services and management solutions across the power generation, oil and gas, distributed power and energy rental industries.