Allegheny Power 2014 Annual Report Download - page 68

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In December 2010, PA DEP recommended a sulfate impairment designation for an approximately 68 mile stretch of the Monongahela
River north of the West Virginia border which EPA approved in May of 2011. PA DEP subsequently recommended that the sulfate
impairment designation for the Monongahela River be removed in its bi-annual water report. The EPA approved the removal of the
sulfate impairment designation for the Monongahela River on December 19, 2014.
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, as amended, and the Toxic
Substances Control Act. Certain coal 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 2014, the EPA finalized regulations for the disposal of CCRs (non-hazardous), establishing national standards regarding
landfill design, structural integrity design and assessment criteria for surface impoundments, groundwater monitoring and protection
procedures and other operational and reporting procedures to assure the safe disposal of CCRs from electric generating plants.
Depending on how the final rules are ultimately implemented, the future costs of compliance with such CCR regulations may require
material capital expenditures.
The PA DEP filed a 2012 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 CCR Impoundment and simultaneously proposed
a consent decree between PA DEP and FG to resolve those claims. On December 14, 2012, a modified consent decree 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 required payment
of civil penalties of $800,000 to resolve claims under the Solid Waste Management Act. PA DEP issued a 2014 permit requiring FE
to provide bonding for 45 years of closure and post-closure activities and to complete closure within a 12-year period, but authorizing
FE to seek a permit modification based on "unexpected site conditions that have or will slow closure progress." The permit does
not require active dewatering of the CCRs, but does require a groundwater assessment for arsenic and abatement if certain
conditions in the permit are met. The Bruce Mansfield Plant is pursuing several options for its CCRs following December 31, 2016.
A 2013 complaint filed by Citizens Coal Counsel and other NGOs in the U.S. District Court for the Western District of Pennsylvania,
against the owner and operator of a reclamation mine in LaBelle, Pennsylvania that is one possible alternative, alleged the LaBelle
site is in violation of RCRA and state laws. On July 14, 2014, Citizens Coal Council served FE, FG and NRG with a citizen suit
notice alleging violations of RCRA due to beneficial reuse of "coal ash" at the LaBelle Site.
On October 10, 2013 approximately 61 individuals filed a complaint against FG in the U.S. District Court for the Northern District
of West Virginia seeking damages for alleged property damage, bodily injury and emotional distress related to the LBR CCR
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. FG believes the claims are without
merit and intends to vigorously defend itself against the allegations made in the complaints, but, at this time, is unable to predict
the outcome of the above matter or estimate the possible loss or range of loss. A similar complaint involving approximately 26
individuals filed in the U.S. District Court for the Western District of Pennsylvania has been resolved and was closed on February
9, 2015, pending the filing of a stipulation for dismissal.
FirstEnergy and certain of its subsidiaries 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, 2014 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
$125 million have been accrued through December 31, 2014. Included in the total are accrued liabilities of approximately $85 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, 2014, FirstEnergy had approximately $2.3 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 NDTs 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
NDTs. By a letter dated July 2, 2014, FENOC submitted a $155 million FES parental guaranty relating to a shortfall in nuclear