Allegheny Power 2015 Annual Report Download - page 19

3
MANAGEMENT’SDISCUSSIONANDANALYSISOFREGISTRANTANDSUBSIDIARIES
ForwardLooking Statements: This reportincludes forwardlooking statements based on information currently available to
management.Suchstatementsaresubjecttocertainrisksanduncertainties.Thesestatementsincludedeclarationsregarding
management's intents, beliefs and current expectations.These statements typically contain, but are not limited to, the terms
“anticipate,”“potential,”“expect,”"forecast,""target,""will,""intend,"“believe,”"project,"“estimate,""plan"andsimilarwords.Forward
lookingstatementsinvolveestimates,assumptions,knownandunknownrisks,uncertaintiesandotherfactorsthatmaycauseactual
results,performanceorachievementstobemateriallydifferentfromanyfutureresults,performanceorachievementsexpressedor
impliedbysuchforwardlookingstatements,whichmayincludethefollowing:
•Thespeedandnatureofincreasedcompetitionintheelectricutilityindustry,ingeneral,andtheretailsalesmarketin
particular.
•TheabilitytoexperiencegrowthintheRegulatedDistributionandRegulatedTransmissionsegmentsandtosuccessfully
implementoursalesstrategyfortheCESsegment.
• Theaccomplishmentofourregulatoryandoperationalgoalsinconnectionwithourtransmissioninvestmentplan,including
butnotlimitedto,theproposedtransmissionassettransfertoMAIT,andtheeffectivenessofourstrategytoreflectamore
regulatedbusinessprofile.
•Changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our
transmission system, or the availability of capital or other resources supporting identified transmission investment
opportunities.
•Theimpactoftheregulatoryprocessonthependingmattersatthefederallevelandinthevariousstatesinwhichwedo
businessincluding,butnotlimitedto,mattersrelatedtoratesandtheESPIVinOhio.
•TheimpactofthefederalregulatoryprocessonFERCregulatedentitiesandtransactions,inparticularFERCregulationof
wholesaleenergyandcapacitymarkets,includingPJMmarketsandFERCjurisdictionalwholesaletransactionsFERC
regulationofcostofservicerates,includingFERCOpinionNo.531’srevisedROEmethodologyforFERCjurisdictional
wholesale generation and transmission utility service and FERC’s compliance and enforcement activity, including
complianceandenforcementactivityrelatedtoNERC’smandatoryreliabilitystandards.
•TheuncertaintiesofvariouscostrecoveryandcostallocationissuesresultingfromATSI'srealignmentintoPJM.
•Economicorweatherconditionsaffectingfuturesalesandmarginssuchasapolarvortexorothersignificantweather
events,andallassociatedregulatoryeventsoractions.
•Changingenergy,capacityandcommoditymarketpricesincluding,butnotlimitedto,coal,naturalgasandoilprices,and
theiravailabilityandimpactonmarginsandassetvaluations.
•Thecontinuedabilityofourregulatedutilitiestorecovertheircosts.
• Costsbeinghigherthananticipatedandthesuccessofourpoliciestocontrolcostsandtomitigatelowenergy,capacityand
marketprices.
•Otherlegislativeandregulatorychanges,andrevisedenvironmentalrequirements,including,butnotlimitedto,theeffects
oftheEPA'sCPP,CCR,CSAPRandMATSprograms,includingourestimatedcostsofcompliance,CWAwastewater
effluentlimitationsforpowerplants,andCWA316(b)waterintakeregulation.
•Theuncertaintyofthetimingandamountsofthecapitalexpendituresthatmayariseinconnectionwithanylitigation,
includingNSRlitigation,orpotentialregulatoryinitiativesorrulemakings(includingthatsuchinitiativesorrulemakingscould
resultinourdecisiontodeactivateoridlecertaingeneratingunits).
•Theuncertaintiesassociatedwiththedeactivationofcertainolderregulatedandcompetitivefossilunits,includingthe
impactonvendorcommitmentsandasitrelatestothereliabilityofthetransmissiongrid,thetimingthereof.
•The impact of other future changes to the operational status or availability of our generating units and any capacity
performancechargesassociatedwithunitunavailability.
•Adverseregulatoryorlegaldecisionsandoutcomeswithrespecttoournuclearoperations(including,butnotlimitedtothe
revocationornonrenewalofnecessarylicenses,approvalsoroperatingpermitsbytheNRCorasaresultoftheincidentat
Japan'sFukushimaDaiichiNuclearPlant).
•IssuesarisingfromtheindicationsofcrackingintheshieldbuildingatDavisBesse.
•Therisksanduncertaintiesassociatedwithlitigation,arbitration,mediationandlikeproceedings,including,butnotlimited
to,anysuchproceedingsrelatedtovendorcommitments.
•Theimpactoflabordisruptionsbyourunionizedworkforce.
•Replacementpowercostsbeinghigherthananticipatedornotfullyhedged.
•Theabilitytocomplywithapplicablestateandfederalreliabilitystandardsandenergyefficiencyandpeakdemandreduction
mandates.
•Changesincustomers'demandforpower,including,butnotlimitedto,changesresultingfromtheimplementationofstate
andfederalenergyefficiencyandpeakdemandreductionmandates.
•Theabilitytoaccomplishorrealizeanticipatedbenefitsfromstrategicandfinancialgoals,including,butnotlimitedto,the
abilitytocontinuetoreducecostsandtosuccessfullyexecuteourfinancialplansdesignedtoimproveourcreditmetricsand
strengthenourbalancesheetthrough,amongotheractions,ourcashflowimprovementplanandotherproposedcapital
raisinginitiatives.
•Ourabilitytoimproveelectriccommoditymarginsandtheimpactof,amongotherfactors,theincreasedcostoffuelandfuel
transportationonsuchmargins.