Allegheny Power 2013 Annual Report Download - page 155

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proposed by FG; (2) seeking to extend bond closure and post closure activities beyond the 45 years proposed by FG; (3) seeking
active dewatering of the CCBs in areas where there are seeps impacted by the Impoundment; and (4) seeking an abatement plan
for groundwater impacted by arsenic. FG responded to the PA DEP on December 3, 2013, and as a result of the Closure Plan, FG
increased its asset retirement obligation for LBR by $163 million in 2013. The Bruce Mansfield Plant is pursuing several options for
its CCBs following December 31, 2016, and on January 23, 2013, announced a plan for beneficial use of its CCBs for mine
reclamation in LaBelle, Pennsylvania. In June 2013, a complaint filed in the U.S. District Court for the Western District of Pennsylvania,
alleges the LaBelle site is in violation of RCRA and state laws. In addition, on December 20, 2012, the Environmental Integrity
Project and others served FG with a citizen suit notice alleging CWA and PA Clean Streams Law Violations at LBR.
On October 10, 2013 and December 5, 2013, complaints were filed on behalf of approximately 50 individuals against FE, FG and
FES in the U.S. District Court for the Northern District of West Virginia and approximately 15 individuals against FG in the U.S.
District Court for the Western District of Pennsylvania seeking damages for alleged property damage, bodily injury and emotional
distress related to the LBR CCB Impoundment. The complaints state claims for private nuisance, negligence, negligence per se,
reckless conduct and trespass related to alleged groundwater contamination and odors emanating from the Impoundment. FE, FG
and FES believe the claims are without merit and intend to vigorously defend themselves against the allegations made in the
complaints, but, at this time, are unable to predict the outcome of the above matter or estimate the possible loss or range of loss.
FirstEnergy's future cost of compliance with any coal combustion residuals regulations that may be promulgated could be substantial
and would depend, in part, on the regulatory action taken by the EPA and implementation by the EPA or the states. Compliance
with those regulations could have an adverse impact on FirstEnergy's results of operations and financial condition.
Certain of FirstEnergy's utilities have been named as potentially responsible parties at waste disposal sites, which may require
cleanup under the CERCLA. Allegations of disposal of hazardous substances at historical sites and the liability involved are often
unsubstantiated and subject to dispute; however, federal law provides that all potentially responsible parties for a particular site
may be liable on a joint and several basis. Environmental liabilities that are considered probable have been recognized on the
Consolidated Balance Sheet as of December 31, 2013 based on estimates of the total costs of cleanup, FE's and its subsidiaries'
proportionate responsibility for such costs and the financial ability of other unaffiliated entities to pay. Total liabilities of approximately
$128 million have been accrued through December 31, 2013. Included in the total are accrued liabilities of approximately $82 million
for environmental remediation of former manufactured gas plants and gas holder facilities in New Jersey, which are being recovered
by JCP&L through a non-bypassable SBC. FirstEnergy or its subsidiaries could be found potentially responsible for additional
amounts or additional sites, but the possible losses or range of losses cannot be determined or reasonably estimated at this time.
OTHER LEGAL PROCEEDINGS
Nuclear Plant Matters
Under NRC regulations, FirstEnergy must ensure that adequate funds will be available to decommission its nuclear facilities. As of
December 31, 2013, FirstEnergy had approximately $2.2 billion invested in external trusts to be used for the decommissioning and
environmental remediation of Davis-Besse, Beaver Valley, Perry and TMI-2. The values of FirstEnergy's NDT fluctuate based on
market conditions. If the value of the trusts decline by a material amount, FirstEnergy's obligation to fund the trusts may increase.
Disruptions in the capital markets and their effects on particular businesses and the economy could also affect the values of the
NDT. FE maintains a $125 million parental guaranty relating to a potential shortfall in nuclear decommissioning funding for Beaver
Valley Unit 1 and Perry. FE also maintains an $11 million parental guaranty in support of the decommissioning of the spent fuel
storage facilities located at its Davis-Besse and Perry nuclear facilities. As required by the NRC, FirstEnergy annually recalculates
and adjusts the amount of its parental guaranty, as appropriate.
On October 4, 2013, during a refueling outage for Beaver Valley Unit 1, FENOC conducted a planned visual examination of the
interior containment liner and coatings. The containment design for Beaver Valley includes an interior steel liner that is surrounded
by reinforced concrete. A penetration through the containment steel liner plate of approximately 0.4 inches by 0.28 inches was
discovered. A detailed investigation was initiated, including laboratory analysis that has indicated that the degraded area was initiated
by foreign material inadvertently left in the concrete during construction. An assessment has been performed which concluded that
any postulated leakage through the affected area was within overall allowable limits for the containment building. The structural
integrity of the containment building is not affected. Repair of the containment liner was completed and Unit 1 was returned to
service on November 4, 2013.
In August 2010, FENOC submitted an application to the NRC for renewal of the Davis-Besse operating license for an additional
twenty years, until 2037. An NRC ASLB granted a hearing on the Davis-Besse license renewal application to a group of petitioners.
On July 9, 2012, the petitioners' proposed a contention on the environmental impacts of spent fuel storage in the Davis-Besse
license renewal proceeding. In an order dated August 7, 2012, the NRC stated that it will not issue final licensing decisions until it
has appropriately addressed the challenges to the NRC Waste Confidence Decision and Temporary Storage Rule and all pending
contentions on this topic should be held in abeyance. The ASLB has suspended further consideration of the petitioners' proposed
contention on the environmental impacts of spent fuel storage at Davis-Besse. The NRC Staff issued Waste Confidence Draft
Generic Environmental Impact Statement and published a proposed rule on this subject in September of 2013. Other contentions
proposed by the petitioners in this proceeding have been rejected by the ASLB. On February 18, 2014, Beyond Nuclear and Don't
Waste Michigan, two of the petitioners in the Davis-Besse license renewal proceeding, requested that the NRC institute a rulemaking