Allegheny Power 2010 Annual Report Download - page 26

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For our regulated operations, capital expenditures are forecasted at $730 million in 2011. Approximately $100 million has
been allocated to the transmission expansion initiative, which includes projects to satisfy transmission capacity and
reliability requirements, transitioning to the PJM market, and connecting new load delivery and new wholesale generation
points. Expenditures for Ohio and Pennsylvania energy efficiency and advanced metering initiatives are expected to be
primarily reimbursed from distribution customers and federal stimulus funding. Other investments for transmission and
distribution infrastructure are designed to achieve cost-effective improvements in the reliability of our service.
For 2012 and 2013 we anticipate average annual baseline capital expenditures of approximately $1.2 billion, exclusive of
any additional opportunities or future mandated spending. Planned capital initiatives promote reliability, improve
operations, and support current environmental and energy efficiency directives.
Actual capital spending for 2010 and projected capital spending for 2011 are as follows:
Capital Spending by Business Unit 2010 2011
(In millions)
Energy Delivery $ 729 $630
Nuclear 324 320
Fossil 174 160
FES Other 21 10
Corporate 59 50
A
QC 249 4
Baseline Capital Expenditures $ 1,556 $1,174
Fremont Facility 148 56
Burger Biomass 7 -
Transmission Expansion 79 100
Davis-Besse Reactor Vessel Head
Replacement 23 90
$ 1,813 $1,420
Environmental Outlook
At FirstEnergy, we continually strive to enhance environmental protection and remain good stewards of our natural
resources. We devote significant resources to environmental compliance efforts, and our employees share a commitment
to, and accountability for, environmental performance. Our corporate focus on continuous improvement is integral to our
environmental programs.
We have spent more than $7 billion on environmental protection efforts since the initial passage of the Clean Air and
Water Acts in the 1970s, and these investments are making a difference. Over the past five years, we have invested
approximately $1.8 billion at our W.H. Sammis Plant in Stratton, Ohio, to further reduce emissions of SO2 by over 95%
and NOx by at least 64%. This is one of the largest environmental retrofit projects in the nation and was recognized by
Platts as the 2010 construction project of the year. Since 1990, we have reduced emissions of NOx by more than 83%,
SO2 by more than 82%, and mercury by about 60%. Also, our CO2 emission rate, in pounds of CO2 per kWh, has
dropped by 19% during this period. Emission rates for our power plants are lower than the regional average.
By the end of 2011, we expect approximately 70% of our generation fleet to be non-emitting or low emitting generation.
Over 52% of our coal-fired generating fleet will have full NOx and SO2 equipment controls thus significantly decreasing
our exposure to future environmental requirements.
One of the key issues facing our company and industry is global-climate–change-related mandates. Lawmakers at the
state and federal levels are exploring and implementing a wide range of responses. We believe our generation fleet is
very well positioned to compete in a carbon-constrained economy. In addition, we believe that upon consummation of the
proposed merger with Allegheny, our competitive position will be enhanced with an even more diverse mix of fully-
scrubbed fossil generation, non-emitting nuclear and renewable generation, including large-scale storage.
We have taken aggressive steps over the past two decades that have increased our generating capacity without adding
to overall CO2 emissions. For example, since 1990, we have reconfigured our fleet by retiring nearly 1,000 MWs of older,
coal-based generation and adding more than 1,800 MWs of non-emitting nuclear capacity. Through these and other
actions, we have increased our generating capacity by nearly 15% over the same period while avoiding some 350 million
metric tons of CO2 emissions. Today, nearly 40% of our electricity is generated without emitting CO2 – a key advantage
that will help us meet the challenge of future governmental climate change mandates. And with recent announcements in
2009, including the expanded use of renewable energy, energy storage and natural gas, our CO2 emission rate will
decline even further in the future.