Allegheny Power 2013 Annual Report Download - page 74

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Brazil, China and India, would agree to take mitigation actions, subject to their domestic measurement, reporting and verification.
In December 2010, the U.N. Climate Change Conference in Cancun, Mexico resulted in an acknowledgment to reduce emissions
from industrialized countries by 25 to 40 percent from 1990 emissions by 2020 and support enhanced action on climate change in
the developing world. In December 2011 the U.N. Climate Change Conference in Durban, South 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 December 2012, the U.N. Climate Change Conference
in Doha, Qatar, resulted in countries agreeing to a new commitment period under the Kyoto Protocol beginning in 2020. The new
Doha Amendment to establish a second commitment period requires the ratification of three-quarters of the parties to the Kyoto
Protocol before it becomes effective.
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 U.S. 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 to reduce fish
impingement to a 12% annual average and determine site-specific controls, if any, to reduce entrainment of aquatic life following
studies to be provided to permitting authorities. The period for finalizing the Section 316(b) regulation was extended to April 17,
2014 under a Settlement Agreement between EPA and certain NGOs. 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.
On April 19, 2013, the EPA proposed regulatory changes to the waste water effluent limitations guidelines and standards for the
Steam Electric Power Generating category (40 CFR Part 423). The EPA proposed eight treatment options for waste water discharges
from electric power plants, of which four are "preferred" by the Agency. The preferred options range from more stringent chemical
and biological treatment requirements to zero discharge requirements. The EPA is required to finalize this rulemaking by May 22,
2014, under a consent decree entered by a U.S. District Court and the treatment obligations are proposed to phase-in as waste
water discharge permits are renewed on a 5-year cycle from 2017 to 2022. Depending on the content of the EPA's final rule, the
future costs of compliance with these standards may require material capital expenditures.
In October 2009, the WVDEP issued an NPDES water discharge permit for the Fort Martin Plant, which imposes TDS, sulfate
concentrations and other effluent limitations for heavy metals, as well as temperature limitations. Concurrent with the issuance of
the Fort Martin NPDES permit, WVDEP also issued an administrative order setting deadlines for MP to meet certain of the effluent
limits that were effective immediately under the terms of the NPDES permit. MP appealed, and a stay of certain conditions of the
NPDES permit and order have been granted pending a final decision on the appeal and subject to WVDEP moving to dissolve the
stay. The Fort Martin NPDES permit could require an initial capital investment ranging from $150 million to $300 million in order to
install technology to meet the TDS and sulfate limits, which technology may also meet certain of the other effluent limits. Additional
technology may be needed to meet certain other limits in the Fort Martin NPDES permit. MP intends to vigorously pursue these
issues but cannot predict the outcome of these appeals or estimate the possible loss or range of loss.
In December 2010, PA DEP submitted its CWA 303(d) list to the EPA with a recommended sulfate impairment designation for an
approximately 68 mile stretch of the Monongahela River north of the West Virginia border. In May 2011, the EPA agreed with PA
DEP's recommended sulfate impairment designation which requires the development of a TMDL limit for the river, a process that
will take PA DEP approximately five years. Based on the stringency of the TMDL, MP may incur significant costs to reduce sulfate
discharges into the Monongahela River if the NPDES permit for the coal-fired Fort Martin plant in West Virginia is required to be