ComEd 2015 Annual Report Download - page 54

Table of Contents
ComEd, PECO, or BGE, with Generation, irrespective of any previous regulatory processes or approvals underlying those transactions. The
prospect of such challenges may increase the time, complexity and cost of the associated regulatory proceedings, and the occurrence of such
challenges may subject Generation to a level of scrutiny not faced by other unaffiliated competitors in those markets. In addition, government
officials and legislators could seek ways to force Generation to contribute to efforts to mitigate potential or actual rate increases, through
measures such as generation-based taxes and contributions to rate-relief packages.
The Registrants could incur substantial costs to fulfill their obligations related to environmental and other matters. (Exelon, Generation,
ComEd, PECO and BGE)
The businesses which the Registrants operate are subject to extensive environmental regulation and legislation by local, state and Federal
authorities. These laws and regulations affect the manner in which the Registrants conduct their operations and make capital expenditures
including how they handle air and water emissions and solid waste disposal. Violations of these emission and disposal requirements could subject
the Registrants to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs for remediation
and clean-up costs, civil penalties and exposure to third parties’ claims for alleged health or property damages or operating restrictions to achieve
compliance. In addition, the Registrants are subject to liability under these laws for the remediation costs for environmental contamination of
property now or formerly owned by the Registrants and of property contaminated by hazardous substances they generate. The Registrants have
incurred and expect to incur significant costs related to environmental compliance, site remediation and clean-up. Remediation activities
associated with MGP operations conducted by predecessor companies are one component of such costs. Also, the Registrants are currently
involved in a number of proceedings relating to sites where hazardous substances have been deposited and may be subject to additional
proceedings in the future.
If application of Section 316(b) of the Clean Water Act, which establishes a national requirement for reducing the adverse impacts to aquatic
organisms at existing generating stations, requires the retrofitting of cooling water intake structures at Salem or other Exelon power plants, this
development could result in material costs of compliance. Pursuant to discussions with the NJDEP regarding the application of Section 316(b) to
Oyster Creek, Generation agreed to permanently cease generation operations at Oyster Creek by December 31, 2019, ten years before the
expiration of its operating license in 2029. On June 30, 2015, NJDEP issued a draft NPDES permit for Salem. The draft permit does not require
installation of cooling towers and allows Salem to continue to operate utilizing the existing once-through cooling water system. The draft permit is
subject to a public notice and comment period after which the NJDEP may make revisions before issuing the final permit expected during the first
half of 2016.
Additionally, Generation is subject to exposure for asbestos-related personal injury liability alleged at certain current and formerly owned
generation facilities. Future legislative action could require Generation to make a material contribution to a fund to settle lawsuits for alleged
asbestos-related disease and exposure.
In some cases, a third-party who has acquired assets from a Registrant has assumed the liability the Registrant could otherwise have for
environmental matters related to the transferred property. If the transferee is unable, or fails, to discharge the assumed liability, a regulatory
authority or injured person could attempt to hold the Registrant responsible, and the Registrant’s remedies against the transferee may be limited by
the financial resources of the transferee. See Note 23—Commitments and Contingencies of the Combined Notes to Consolidated Financial
Statements for additional information.
47
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.