Vectren 2012 Annual Report Download - page 48

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however costs for compliance with these regulations should qualify as federally mandated regulatory requirements and be
recovered under Senate Bill 251 referenced above.
Coal Ash Waste Disposal & Ash Ponds
In June 2010, the EPA issued proposed regulations affecting the management and disposal of coal combustion products, such
as ash generated by the Company’s coal-fired power plants. The proposed rules more stringently regulate these byproducts
and would likely increase the cost of operating or expanding existing ash ponds and the development of new ash ponds. The
alternatives include regulating coal combustion by-products that are not being beneficially reused as hazardous waste. The EPA
did not offer a preferred alternative, but took public comment on multiple alternative regulations. Rules have not been finalized
given oversight hearings, congressional interest, and other factors.
At this time, the majority of the Company’s ash is being beneficially reused. However, the alternatives proposed would require
modification to, or closure of, existing ash ponds. The Company estimates capital expenditures to comply could be as much as
$30 million, and such expenditures could exceed $100 million if the most stringent of the alternatives is selected. Annual
compliance costs could increase slightly or be impacted by as much as $5 million. Costs for compliance with these regulations
should qualify as federally mandated regulatory requirements and be recovered under Senate Bill 251 referenced above.
Climate Change
Vectren is committed to responsible environmental stewardship and conservation efforts and if a national climate change policy
is implemented believes it should have the following elements:
• An inclusive scope that involves all sectors of the economy and sources of greenhouse gases, and recognizes early
actions and investments made to mitigate greenhouse gas emissions;
• Provisions for enhanced use of renewable energy sources as a supplement to base load coal generation including
effective energy conservation, demand side management, and generation efficiency measures;
• Inclusion of incentives for investment in advanced clean coal technology and support for research and development;
and
• A strategy supporting alternative energy technologies and biofuels and continued increase in the domestic supply of
natural gas to reduce dependence on foreign oil.
The Company emits greenhouse gases (GHG) primarily from its fossil fuel electric generation plants. The Company uses the
methodology described in the Acid Rain Program (under Title IV of the Clean Air Act) to calculate its level of direct CO2
emissions from its fossil fuel electric generating plants. The Company’s direct CO2 emissions from its plants over the past 5
years are represented below:
(In thousands) 2012 2011 2010 2009 2008
Direct CO2 Emissions (tons) 6,083 5,645 6,120 5,500 8,029
Based on data made available through the Electronic Greenhouse Gas Reporting Tool (e-GRRT) maintained by the EPA, the
Company’s direct CO2 emissions from its fossil fuel electric generation that report under the Acid Rain Program were less than
one half of one percent of all emissions in the United States from similar sources. Emissions from other Company operations,
including those from its natural gas distribution operations and the greenhouse gas emissions the Company is required to report
on behalf of its end use customers, are similarly available through the EPA’s e-GRRT database and reporting tool.
Current Initiatives to Increase Conservation & Reduce Emissions
The Company is committed to a policy that reduces greenhouse gas emissions and conserves energy usage. Evidence of this
commitment includes:
• Focusing the Company’s mission statement and purpose on corporate sustainability and the need to help customers
conserve and manage energy costs;
• Building a renewable energy portfolio to complement base load coal-fired generation in advance of mandated renewable
energy portfolio standards;
• Implementing conservation initiatives in the Company’s Indiana and Ohio gas utility service territories;