Allegheny Power 2013 Annual Report Download - page 75

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modified or renewed to include more stringent effluent limitations for sulfate. However, the Hatfield's Ferry and Mitchell Plants in
Pennsylvania that discharge into the Monongahela River were deactivated on October 9, 2013.
FirstEnergy intends to vigorously defend against the CWA matters described above but, except as indicated above, cannot predict
their outcomes or estimate the possible loss or range of loss.
Regulation of Waste Disposal
Federal and state hazardous waste regulations have been promulgated as a result of the RCRA of 1976, as amended, and the
Toxic Substances Control Act of 1976. Certain fossil-fuel combustion residuals, such as coal ash, were exempted from hazardous
waste disposal requirements pending the EPA's evaluation of the need for future regulation.
In December 2009, in an advance notice of public rulemaking, the EPA asserted that the large volumes of coal combustion residuals
produced by electric utilities pose significant financial risk to the industry. In May 2010, the EPA proposed two options for additional
regulation of coal combustion residuals, including the option of regulation as a special waste under the EPA's hazardous waste
management program which could have a significant impact on the management, beneficial use and disposal of coal combustion
residuals. On April 19, 2013, the EPA stated it would "align" its proposed coal combustion residuals regulations with revised waste
water discharge effluent limitations guidelines and standards for the Steam Electric Power Generating category (40 CFR Part 423)
that were proposed on that date. On July 25, 2013, the House of Representatives passed H.R. 221 that would require CCRs to be
regulated under Subtitle D of RCRA, as non-hazardous. On January 29, 2014, EPA agreed to take final action by December 19,
2014 on whether or not to pursue the proposed non-hazardous waste option for regulating CCRs in a Consent Decree to be filed
in pending litigation. Depending on the content of the EPA's final effluent limitations rule, the specifics of any "alignment", whether
EPA chooses to pursue the non-hazardous or hazardous waste option and the enactment of legislation, the future costs of compliance
with such standards may require material capital expenditures.
On July 27, 2012, the PA DEP filed a complaint against FG in the U.S. District Court for the Western District of Pennsylvania with
claims under the RCRA and Pennsylvania's Solid Waste Management Act regarding the LBR CCB Impoundment and simultaneously
proposed a Consent Decree between PA DEP and FG to resolve those claims. On December 14, 2012, a modified Consent Decree
that addresses public comments received by PA DEP was entered by the court, requiring FG to conduct monitoring studies and
submit a closure plan to the PA DEP, no later than March 31, 2013, and discontinue disposal to LBR as currently permitted by
December 31, 2016. The modified Consent Decree also requires payment of civil penalties of $800,000 to resolve claims under
the Solid Waste Management Act. On February 1, 2013, FG submitted a Feasibility Study analyzing various technical issues relevant
to the closure of LBR. On March 28, 2013, FG submitted to the PA DEP a Closure Plan Major Permit Modification Application which
provides for placing a final cap over LBR that would require 15 years to fully implement following the closure of LBR. The estimated
cost for the proposed closure plan is $234 million, including environmental and other post closure costs. On October 3, 2013, the
PA DEP issued a technical deficiency letter citing four main deficiencies with the Closure Plan: (1) seeking to accelerate the 15
year period proposed by FG for closure activities to complete closure in 9 years by commencing closure activities prior to 2017 as
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