Allegheny Power 2010 Annual Report Download - page 148

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133
Mad River
On November 10, 2010, a planned demolition of a 275-foot stack at FGCO’s Mad River Plant resulted in the demolished
stack falling in the wrong direction and destroying two generating units at the Mad River plant. The accident resulted in a
$5 million write-off of the total carrying value of the assets associated with the destroyed units and a charge of $1 million
for fuel oil inventory deemed to be excessive or obsolete as a result of the accident. FirstEnergy recorded an impairment
of $6 million to continuing operations of its competitive energy services segment for the year ended December 31, 2010.
R.E. Burger Biomass Units
In 2010 FirstEnergy announced that it was canceling its plan to repower Units 4 and 5 at its R. E. Burger Plant to
generate electricity principally with biomass, and instead permanently shut down the units as of December 31, 2010.
Since the Burger biomass repowering project was announced, market prices for electricity have fallen significantly and no
longer supported a repowered Burger Plant. FirstEnergy’s announcement indicated a need to evaluate the future
recoverability of the carrying value of the assets associated with the affected Burger units. As a result of the
recoverability evaluation, FirstEnergy recorded an impairment of $72 million to continuing operations of its competitive
energy services segment for the year ended December 31, 2010. This impairment represents a $69 million write down of
the carrying value of the assets associated with the affected Burger units to their estimated fair value and a charge of $3
million for excessive or obsolete inventory identified as a result of the permanent shut down of the Burger units.
20. INTANGIBLE ASSETS
FES has acquired certain customer contract rights, which were capitalized as intangible assets. These rights allow FES
to supply electric generation to customers, and the recorded value is being amortized ratably over the term of the related
contracts. Net intangible assets of $134 million are included in other assets on FirstEnergy’s Consolidated Balance Sheet
as of December 31, 2010.
The weighted-average amortization period of these certain customer contract rights as of December 31, 2010, is 9 years.
For the year ended December 31, 2010, amortization expense was approximately $9 million. The expected estimated
aggregate amortization expense for each of the next five years and for all years thereafter is as follows:
Future Amortization
(In millions)
2011 $ 12
2012 14
2013 16
2014 17
2015 17
Years thereafter 58
Total amortization $ 134