Allegheny Power 2011 Annual Report Download - page 18

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FIRSTENERGY CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements: This Annual Report includes forward-looking statements based on information currently available to
management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding
management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms
“anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates,
assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by such forward-looking
statements.
Actual results may differ materially due to:
• The speed and nature of increased competition in the electric utility industry.
• The impact of the regulatory process on the pending matters before FERC in the various states in which we do business
including, but not limited to, matters related to rates.
• The status of the PATH project in light of PJM's direction to suspend work on the project pending review of its planning
process, its re-evaluation of the need for the project and the uncertainty of the timing and amounts of any related capital
expenditures.
• Business and regulatory impacts from ATSI's realignment into PJM.
• Economic or weather conditions affecting future sales and margins.
• Changes in markets for energy services.
• Changing energy and commodity market prices and availability.
• Financial derivative reforms that could increase our liquidity needs and collateral costs.
• The continued ability of FirstEnergy's regulated utilities to collect transition and other costs.
• Operation and maintenance costs being higher than anticipated.
• Other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission,
water intake and coal combustion residual regulations, the potential impacts of any laws, rules or regulations that ultimately
replace CAIR, including CSAPR which was stayed by the courts on December 30, 2011, and the effects of the EPA's
MATS rules.
• The uncertainty of the timing and amounts of the capital expenditures that may arise in connection with litigation, including
NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision
to shut down or idle certain generating units).
• The uncertainty associated with the company's plan to retire its older unscrubbed regulated and competitive fossil units,
including the impact on vendor commitments and PJM's review of the company's plans.
• Adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to
the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC including as a result of
the incident at Japan's Fukushima Daiichi Nuclear Plant).
• Issues that could result from our continuing investigation and analysis of the indications of cracking in the plant shield
building at Davis-Besse.
• Adverse legal decisions and outcomes related to Met-Ed's and Penelec's ability to recover certain transmission costs
through their transmission service charge riders.
• The continuing availability of generating units and changes in their ability to operate at or near full capacity.
• Replacement power costs being higher than anticipated or inadequately hedged.
• The ability to comply with applicable state and federal reliability standards and energy efficiency mandates.
• Changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state
and federal energy efficiency mandates.
• The ability to accomplish or realize anticipated benefits from strategic goals.
• FirstEnergy's ability to improve electric commodity margins and the impact of, among other factors, the increased cost of
coal and coal transportation on such margins.
• The ability to experience growth in the distribution business.
• The changing market conditions that could affect the value of assets held in FirstEnergy's NDTs, pension trusts and other
trust funds, and cause FirstEnergy and its subsidiaries to make additional contributions sooner, or in amounts that are
larger than currently anticipated.
• The impact of changes to material accounting policies.
• The ability to access the public securities and other capital and credit markets in accordance with FirstEnergy's financing
plan, the cost of such capital and overall condition of the capital and credit markets affecting FirstEnergy and its subsidiaries.
• Changes in general economic conditions affecting FirstEnergy and its subsidiaries.
• Interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy's and its subsidiaries'
access to financing or their costs of financings and increase requirements to post additional collateral to support outstanding
commodity positions, LOCs and other financial guarantees.
• The continuing uncertainty of the national and regional economy and its impact on major industrial and commercial