Allegheny Power 2011 Annual Report Download - page 69

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At the international level, the Kyoto Protocol, signed by the U.S. in 1998 but never submitted for ratification by the U.S. Senate,
was intended to address global warming by reducing the amount of man-made GHG, including CO2, emitted by developed countries
by 2012. A December 2009 U.N. Climate Change Conference in Copenhagen did not reach a consensus on a successor treaty to
the Kyoto Protocol, but did take note of the Copenhagen Accord, a non-binding political agreement that recognized the scientific
view that the increase in global temperature should be below two degrees Celsius; includes a commitment by developed countries
to provide funds, approaching $30 billion over three years with a goal of increasing to $100 billion by 2020; and establishes the
“Green Climate Fund” to support mitigation, adaptation, and other climate-related activities in developing countries. To the extent
that they have become a party to the Copenhagen Accord, developed economies, such as the European Union, Japan, Russia and
the United States, would commit to quantified economy-wide emissions targets from 2020, while developing countries, including
Brazil, China and India, would agree to take mitigation actions, subject to their domestic measurement, reporting and verification.A
December 2011 U.N. Climate Change Conference in Durban, Africa, established a negotiating process to develop a new post-2020
climate change protocol, called the “Durban Platform for Enhanced Action”. This negotiating process contemplates developed
countries, as well as developing countries such as China, India, Brazil, and South Africa, to undertake legally binding commitments
post-2020. In addition, certain countries agreed to extend the Kyoto Protocol for a second commitment period, commencing in 2013
and expiring in 2018 or 2020.
In 2009, the U.S. Court of Appeals for the Second Circuit and the U.S. Court of Appeals for the Fifth Circuit reversed and remanded
lower court decisions that had dismissed complaints alleging damage from GHG emissions on jurisdictional grounds. However, a
subsequent ruling from the U.S. Court of Appeals for the Fifth Circuit reinstated the lower court dismissal of a complaint alleging
damage from GHG emissions. These cases involve common law tort claims, including public and private nuisance, alleging that
GHG emissions contribute to global warming and result in property damages. The U.S. Supreme Court granted a writ of certiorari
to review the decision of the Second Circuit. On June 20, 2011, the U.S. Supreme Court reversed the Second Circuit but failed to
answer the question of the extent to which actions for damages based on GHG emissions may remain viable. The Court remanded
to the Second Circuit the issue of whether the CAA preempted state common law nuisance actions.
FirstEnergy cannot currently estimate the financial impact of climate change policies, although potential legislative or regulatory
programs restricting CO2 emissions, or litigation alleging damages from GHG emissions, could require significant capital and other
expenditures or result in changes to its operations. The CO2 emissions per KWH of electricity generated by FirstEnergy is lower
than many of its regional competitors due to its diversified generation sources, which include low or non-CO2 emitting gas-fired and
nuclear generators.
Clean Water Act
Various water quality regulations, the majority of which are the result of the federal CWA and its amendments, apply to FirstEnergy's
plants. In addition, the states in which FirstEnergy operates have water quality standards applicable to FirstEnergy's operations.
In 2004, the EPA established new performance standards under Section 316(b) of the CWA for reducing impacts on fish and shellfish
from cooling water intake structures at certain existing electric generating plants. The regulations call for reductions in impingement
mortality (when aquatic organisms are pinned against screens or other parts of a cooling water intake system) and entrainment
(which occurs when aquatic life is drawn into a facility's cooling water system). In 2007, the Court of Appeals for the Second Circuit
invalidated portions of the Section 316(b) performance standards and the EPA has taken the position that until further rulemaking
occurs, permitting authorities should continue the existing practice of applying their best professional judgment to minimize impacts
on fish and shellfish from cooling water intake structures. In April 2009, the U.S. Supreme Court reversed one significant aspect of
the Second Circuit's opinion and decided that Section 316(b) of the CWA authorizes the EPA to compare costs with benefits in
determining the best technology available for minimizing adverse environmental impact at cooling water intake structures. On March
28, 2011, the EPA released a new proposed regulation under Section 316(b) of the CWA generally requiring fish impingement to
be reduced to a 12% annual average and studies to be conducted at the majority of our existing generating facilities to assist
permitting authorities to determine whether and what site-specific controls, if any, would be required to reduce entrainment of aquatic
life. On July 19, 2011, the EPA extended the public comment period for the new proposed Section 316(b) regulation by 30 days but
stated its schedule for issuing a final rule remains July 27, 2012. FirstEnergy is studying various control options and their costs and
effectiveness, including pilot testing of reverse louvers in a portion of the Bay Shore power plant's water intake channel to divert
fish away from the plant's water intake system. Depending on the results of such studies and the EPA's further rulemaking and any
final action taken by the states exercising best professional judgment, the future costs of compliance with these standards may
require material capital expenditures.
In April 2011, the U.S. Attorney's Office in Cleveland, Ohio advised FGCO that it is no longer considering prosecution under the
CWA and the Migratory Bird Treaty Act for three petroleum spills at the Edgewater, Lakeshore and Bay Shore plants which occurred
on November 1, 2005, January 26, 2007 and February 27, 2007. On August 5, 2011, EPA issued an information request pursuant
to Sections 308 and 311 of the CWA for certain information pertaining to the oil spills and spill prevention measures at FirstEnergy
facilities. FirstEnergy responded on October 10, 2011. On February 1, 2012, FirstEnergy executed a tolling agreement with the
EPA extending the statute of limitations to July 31, 2012. FGCO does not anticipate any losses resulting from this matter to be
material.
In May 2011, the West Virginia Highlands Conservancy, the West Virginia Rivers Coalition, and the Sierra Club filed a CWA citizen
suit alleging violations of arsenic limits in the NPDES water discharge permit for the fly ash impoundments at the Albright Station
seeking unspecified civil penalties and injunctive relief. The MP filed an answer on July 11, 2011, and a motion to stay the proceedings