CenterPoint Energy 2008 Annual Report Download - page 40

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limit emissions. Our failure to comply with these requirements could subject us to monetary penalties, injunctions,
conditions or restrictions on operations, and potentially criminal enforcement actions. We may be required to incur
certain capital expenditures in the future for air pollution control equipment in connection with obtaining and
maintaining operating permits and approvals for air emissions. We believe, however, that our operations will not be
materially adversely affected by such requirements, and the requirements are not expected to be any more
burdensome to us than to other similarly situated companies.
Water Discharges
Our operations are subject to the Federal Water Pollution Control Act of 1972, as amended, also known as the
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 waters of the United States. The
unpermitted discharge of pollutants, including discharges resulting from a spill or leak incident, is prohibited. The
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. Any unpermitted
release of petroleum or other pollutants from our pipelines or facilities could result in fines or penalties as well as
significant remedial obligations.
Hazardous Waste
Our operations generate wastes, including some hazardous wastes, that are subject to the federal Resource
Conservation and Recovery Act (RCRA), and comparable state laws, which impose detailed requirements for the
handling, storage, treatment and disposal of hazardous and solid waste. RCRA currently exempts many natural gas
gathering and field processing wastes from classification as hazardous waste. Specifically, RCRA excludes from the
definition of hazardous waste waters produced and other wastes associated with the exploration, development, or
production of crude oil and natural gas. However, these oil and gas exploration and production wastes are still
regulated under state law and the less stringent non-hazardous waste requirements of RCRA. Moreover, ordinary
industrial wastes such as paint wastes, waste solvents, laboratory wastes, and waste compressor oils may be
regulated as hazardous waste. The transportation of natural gas in pipelines may also generate some hazardous
wastes that would be subject to RCRA or comparable state law requirements.
Liability for Remediation
The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA),
also known as ―Superfund,‖ and comparable state laws impose liability, without regard to fault or the legality of the
original conduct, on certain classes of persons responsible for the release of hazardous substances into the
environment. Such classes of persons include the current and past owners or operators of sites where a hazardous
substance was released and companies that disposed or arranged for the disposal of hazardous substances at offsite
locations such as landfills. Although petroleum, as well as natural gas, is excluded from CERCLA’s definition of a
―hazardous substance,‖ in the course of our ordinary operations we generate wastes that may fall within the
definition of a ―hazardous substance.‖ CERCLA authorizes the United States Environmental Protection Agency
(EPA) and, in some cases, third parties to take action in response to threats to the public health or the environment
and to seek to recover from the responsible classes of persons the costs they incur. Under CERCLA, we could be
subject to joint and several liability for the costs of cleaning up and restoring sites where hazardous substances have
been released, for damages to natural resources, and for the costs of certain health studies.
Liability for Preexisting Conditions
Manufactured Gas Plant Sites. CERC and its predecessors operated manufactured gas plants (MGPs) in the past.
In Minnesota, CERC has completed remediation on two sites, other than ongoing monitoring and water treatment.
There are five remaining sites in CERC’s Minnesota service territory. CERC believes that it has no liability with
respect to two of these sites.
At December 31, 2008, CERC had accrued $14 million for remediation of these Minnesota sites and the
estimated range of possible remediation costs for these sites was $4 million to $35 million based on remediation
continuing for 30 to 50 years. The cost estimates are based on studies of a site or industry average costs for