ComEd 2006 Annual Report Download - page 292

Exelon Corporation and Subsidiary Companies
Exelon Generation Company, LLC and Subsidiary Companies
Commonwealth Edison Company and Subsidiary Companies
PECO Energy Company and Subsidiary Companies
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
In a pre-draft permit dated May 13, 2005 and a draft permit issued on July 19, 2005, as part of the
pending NPDES permit renewal process for Oyster Creek, the New Jersey Department of
Environmental Protection (NJDEP) preliminarily determined that closed-cycle cooling and
environmental restoration are the only viable compliance options for Section 316(b) compliance at
Oyster Creek. AmerGen has not made a determination regarding how it will demonstrate compliance
with the Section 316(b) regulations and must evaluate the final regulations issued by the EPA as a
result of the decision of the U.S. Second Circuit Court of Appeals, discussed above. In addition, the
amount of the costs required to retrofit Oyster Creek may negatively impact Generation’s decision to
renew the operating license.
In June 2001, the NJDEP issued a renewed NDPES permit for Salem, which expired in July 2006,
allowing for the continued operation of Salem with its existing cooling water system. NJDEP advised
PSEG in a letter dated July 12, 2004 that it strongly recommended reducing cooling water intake flow
commensurate with closed-cycle cooling as a compliance option for Salem. PSEG submitted an
application for a renewal of the permit on February 1, 2006. In the permit renewal application, PSEG
analyzed closed-cycle cooling and other options and demonstrated that the continuation of the Estuary
Enhancement Program, an extensive environmental restoration program at Salem, is the best
technology to meet the Section 316(b) requirements. PSEG continues to operate Salem under the
approved June 2001, NDPES permit while the NDPES permit renewal application is being reviewed. If
application of the final Section 316(b) regulations ultimately requires the retrofitting of Salem’s cooling
water intake structure to reduce cooling water intake flow commensurate with closed-cycle cooling,
Exelon’s and Generation’s share of the total cost of the retrofit and any resulting interim replacement
power would likely be in excess of $500 million and could result in increased depreciation expense
related to the retrofit investment.
Nuclear Generating Station Groundwater. On December 16, 2005 and February 27, 2006, the
Illinois EPA issued violation notices to Generation alleging violations of state groundwater standards as
a result of historical discharges of liquid tritium from a line at the Braidwood Nuclear Generating Station
(Braidwood). In November 2005, Generation discovered that spills from the line in 1996, 1998 and
2000 have resulted in a tritium plume in groundwater that is both on and off the plant site. Levels in
portions of the plume exceed Federal limits for drinking water. However, samples from drinking water
wells on property adjacent to the plant showed that, with one exception, tritium levels in these wells
were at levels that naturally occur. The tritium level in one drinking water well was elevated above
levels that occur naturally, but was significantly below the state and Federal drinking water standards,
and Generation believes that this level posed no threat to human health. Generation has investigated
the causes of the releases and has taken the necessary corrective actions to prevent another
occurrence. Generation notified the owners of 14 potentially affected adjacent properties that, upon
sale of their property, Generation will reimburse the owners for any diminution in property value caused
by the tritium release. As of December 31, 2006, Generation has purchased four of the 14 adjacent
properties.
On March 13, 2006, a class action lawsuit was filed against Exelon, Generation and ComEd (as
the prior owner of Braidwood) in Federal District Court for the Northern District of Illinois on behalf of all
persons who live or own property within 10 miles of Braidwood. The plaintiffs primarily are seeking
compensation for diminished property values. On March 14 and 23, 2006, 37 area residents filed two
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