Allegheny Power 2013 Annual Report Download - page 76

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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
on the environmental impacts of high density spent fuel storage and mitigation alternatives. On February 27, 2014, these petitioners
requested a suspension of the licensing decision in the Davis-Besse license renewal proceeding to allow the NRC to complete this
rulemaking.
As part of routine inspections of the concrete shield building at Davis-Besse Nuclear Power Station in 2013, FENOC identified
changes to the subsurface laminar cracking condition originally discovered in 2011. The shield building is a 2 1/2-foot thick reinforced
concrete structure that provides biological shielding, protection from natural phenomena including wind and tornadoes and additional
shielding in the event of an accident. FENOC then expanded its sample size to include all of the existing core bores in the shield
building. These inspections, which are now complete, identified additional subsurface cracking that was determined to be pre-
existing, but only now identified with the aid of improved inspection technology. These inspections also revealed that the cracking
condition has propagated a small amount in select areas. Preliminary analysis of the inspections results confirm that the building
continues to maintain its structural integrity, and its ability to safely perform all of its functions.
On February 1, 2014, the Davis-Besse Nuclear Power Station entered into an outage to install two new steam generators, replace
about a third of the unit’s 177 fuel assemblies and perform numerous safety inspections and preventative maintenance activities.
During the preliminary stages of the outage an area of concrete that was not filled to the expected thickness within the shield building
wall was discovered at the top of the temporary construction opening that was created as part of the 2011 outage. The 2011
temporary construction opening was created to install the new reactor head. FENOC has assessed the as-found condition of the
concrete and has determined the shield building would have performed its design functions. This condition within the shield building
wall will be repaired during this outage to conform to its original design configuration. This condition is not expected to extend the
outage.
On March 12, 2012, the NRC issued orders requiring safety enhancements at U.S. reactors based on recommendations from the
lessons learned Task Force review of the accident at Japan's Fukushima Daiichi nuclear power plant. These orders require additional
mitigation strategies for beyond-design-basis external events, and enhanced equipment for monitoring water levels in spent fuel
pools. The NRC also requested that licensees including FENOC: re-analyze earthquake and flooding risks using the latest information
available; conduct earthquake and flooding hazard walkdowns at their nuclear plants; assess the ability of current communications
systems and equipment to perform under a prolonged loss of onsite and offsite electrical power; and assess plant staffing levels