OG&E 2011 Annual Report Download - page 44

Endangered Species
Certain Federal laws, including the Bald and Golden Eagle Protection
Act, the Migratory Bird Treaty Act and the Endangered Species Act, pro-
vide special protection to certain designated species. These laws and
any state equivalents provide for significant civil and criminal penalties
for unpermitted activities that result in harm to or harassment of certain
protected animals and plants, including damage to their habitats. If such
species are located in an area in which the Company conducts opera-
tions, or if additional species in those areas, such as the lesser prairie
chicken, become subject to protection, the Company’s operations and
development projects, particularly transmission projects, wind projects
or pipeline operations, could be restricted or delayed, or the Company
could be required to implement expensive mitigation measures.
Waste
OG&E’s and Enogex’s operations generate hazardous wastes that are
subject to the Federal Resource Conservation and Recovery Act of 1976
as well as comparable state laws which impose detailed requirements
for the handling, storage, treatment and disposal of hazardous waste.
For OG&E, these laws impose strict “cradle to grave” requirements
on generators regarding their treatment, storage and disposal of hazardous
waste. OG&E routinely generates small quantities of hazardous waste
throughout its system and occasional larger quantities from periodic
power generation related activities. These wastes are treated, stored
and disposed at facilities that are permitted to manage them.
In June 2010, the EPA proposed new rules under Federal Resource
Conservation and Recovery Act of 1976 that could alter the classification
of OG&E’s coal-fired power plants as conditionally exempt hazardous
waste generators and make the management of coal ash more costly.
The extent to which the EPA intends to regulate coal ash is uncertain
due to the fact that the new rules propose to regulate coal ash as a
hazardous waste or as a nonhazardous solid waste. In November 2010,
OG&E submitted written comments opposing the regulation of coal ash
as a hazardous waste while supporting its regulation as a nonhazardous
waste. The EPA continues to consider numerous comments received on
the proposal and has stated that it plans to issue a final rule regarding
the regulation of coal ash in late 2012.
OG&E has sought and will continue to seek pollution prevention
opportunities and to evaluate the effectiveness of its waste reduction,
reuse and recycling efforts. In 2011, OG&E obtained refunds of $5.2 mil-
lion from the recycling of scrap metal, salvaged transformers and used
transformer oil. This figure does not include the additional savings gained
through the reduction and/or avoidance of disposal costs and the reduc-
tion in material purchases due to the reuse of existing materials. Similar
savings are anticipated in future years.
For Enogex, the Federal Resource Conservation and Recovery
Act of 1976 currently exempts many natural gas gathering and field pro-
cessing wastes from classification as hazardous waste. However, these
oil and gas exploration and production wastes may still be regulated
under state law or the less stringent solid waste requirements of the
Federal Resource Conservation and Recovery Act of 1976. The trans-
portation of natural gas in pipelines may also generate some hazardous
wastes that are subject to the Federal Resource Conservation and
Recovery Act of 1976 or comparable state law requirements.
Water
OG&E’s and Enogex’s operations are subject to the Federal Water
Pollution Control Act of 1972, as amended (“Federal Clean Water Act”),
and analogous state laws and regulations. These laws and regulations
impose detailed requirements and strict controls regarding the discharge
of pollutants into state and Federal waters. The discharge of pollutants,
including discharges resulting from a spill or leak, is prohibited unless
authorized by a permit or other agency approval. The Federal Clean Water
Act and regulations implemented thereunder also prohibit discharges
of dredged and fill material in wetlands and other waters of the United
States unless authorized by an appropriately issued permit. Existing
cooling water intake structures are regulated under the Federal Clean
Water Act to minimize their impact on the environment.
With respect to cooling water intake structures, Section 316(b) of the
Federal Clean Water Act requires that their location, design, construction
and capacity reflect the “best available technology” for minimizing their
adverse environmental impact via the impingement and entrainment of
aquatic organisms. In March 2011, the EPA proposed rules to implement
Section 316(b). On August 18, 2011, OG&E filed comments with the EPA
on the proposed rules. OG&E anticipates that the proposed rules will be
finalized in mid-2012. In the interim, the state of Oklahoma requires OG&E
to implement best management practices related to the operation and
maintenance of its existing cooling water intake structures as a condi-
tion of renewing its discharge permits. Once the EPA promulgates the
final rules, OG&E may incur additional capital and/or operating costs to
comply with them. The costs of complying with the final water intake
standards are not currently determinable, but could be significant.
Site Remediation
The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and comparable state laws impose liability, with-
out regard to the legality of the original conduct, on certain classes of
persons responsible for the release of hazardous substances into the
environment. Because OG&E and Enogex utilize various products and
generate wastes that are considered hazardous substances for purposes
of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, OG&E and Enogex could be subject to liability for
the costs of cleaning up and restoring sites where those substances have
been released to the environment. At this time, it is not anticipated that
any associated liability will cause a significant impact to OG&E or Enogex.
For a further discussion regarding contingencies relating to environ-
mental laws and regulations, see Note 16 of Notes to Consolidated
Financial Statements.
42 OGE Energy Corp.