Exelon 2014 Annual Report Download - page 272

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
U.S. government’s Manhattan Project. Cotter purchased the residues in 1969 for initial processing at the Latty Avenue facility for the
subsequent extraction of uranium and metals. In 1976, the NRC found that the Latty Avenue site had radiation levels exceeding
NRC criteria for decontamination of land areas. Latty Avenue was investigated and remediated by the United States Army Corps of
Engineers pursuant to funding under the Formerly Utilized Sites Remedial Action Program. The DOJ has not yet formally advised the
PRPs of the amount that it is seeking, but it is believed to be approximately $90 million. The DOJ and the PRPs agreed to toll the
statute of limitations until August 2015 so that settlement discussions could proceed. Based on Generation’s preliminary review, it
appears probable that Generation has liability to Cotter under the indemnification agreement and has established an appropriate
accrual for this liability.
On February 28, 2012, and April 12, 2012, two lawsuits were filed in the U.S. District Court for the Eastern District of Missouri
against 15 and 14 defendants, respectively, including Exelon, Generation and ComEd (the Exelon defendants) and Cotter. The suits
allege that individuals living in the North St. Louis area developed some form of cancer due to the Exelon defendants’ negligent or
reckless conduct in processing, transporting, storing, handling and/or disposing of radioactive materials. Plaintiffs have asserted
claims for negligence, strict liability, emotional distress, medical monitoring, and violations of the Price-Anderson Act. The complaints
do not contain specific damage claims. On May 30, 2012, the plaintiffs filed voluntary motions to dismiss the Exelon defendants from
both lawsuits which were subsequently granted. Since May 30, 2012, several related lawsuits have been filed in the same court on
behalf of various plaintiffs against Cotter and other defendants, but not Exelon. The allegations in these related lawsuits mirror the
initially filed lawsuits. In the event of a finding of liability, it is reasonably possible that Exelon would be considered liable due to its
indemnification responsibilities of Cotter described above. On March 27, 2013, the U.S. District Court dismissed all state common
law actions brought under the initial two lawsuits; and also found that the plaintiffs had not properly brought the actions under the
Price-Anderson Act. On July 8, 2013, the plaintiffs filed amended complaints under the Price-Anderson Act. Cotter moved to dismiss
the amended complaints and has motions currently pending before the court. At this stage of the litigation, Exelon, Generation, and
ComEd cannot estimate a range of loss, if any.
68th Street Dump. In 1999, the U.S. EPA proposed to add the 68th Street Dump in Baltimore, Maryland to the Superfund National
Priorities List, and notified BGE and 19 others that they are PRPs at the site. In March 2004, BGE and other PRPs formed the 68th
Street Coalition and entered into consent order negotiations with the U.S. EPA to investigate clean-up options for the site under the
Superfund Alternative Sites Program. In May 2006, a settlement among the U.S. EPA and 19 of the PRPs, including BGE, with
respect to investigation of the site became effective. The settlement requires the PRPs, over the course of several years, to identify
contamination at the site and recommend clean-up options. The PRPs submitted their investigation of the range of clean-up options
in the first quarter of 2011. Although the investigation and options provided to the U.S. EPA are still subject to U.S. EPA review and
selection of a remedy, the range of estimated clean-up costs to be allocated among all of the PRPs is in the range of $50 million to
$64 million. On September 30, 2013, U.S. EPA issued the Record of Decision identifying its preferred remedial alternative for the
site. The estimated cost for the alternative chosen by U.S. EPA is consistent with the PRPs estimated range of costs noted above.
Based on Generation’s preliminary review, it appears probable that Generation has liability and has established an appropriate
accrual for its share of the estimated clean-up costs. A wholly owned subsidiary of Generation has agreed to indemnify BGE for most
of the costs related to this settlement and clean-up of the site.
Rossville Ash Site. The Rossville Ash Site is a 32-acre property located in Rosedale, Baltimore County, Maryland, which was used
for the placement of fly ash from 1983-2007. The property is owned by Constellation Power Source Generation, LLC (CPSG). In
2008, CPSG investigated and remediated the property by entering it into the Maryland Voluntary Cleanup Program (VCP) to address
any historic environmental concerns and ready the site for appropriate future redevelopment. The site was accepted into the
program in 2010 and is currently going through the process to remediate the site and receive closure from MDE. Exelon currently
estimates the cost to close the site to be approximately $10 million, which has been fully reserved as of December 31, 2014.
Sauer Dump. On May 30, 2012, BGE was notified by the U.S. EPA that it is considered a PRP at the Sauer Dump Superfund site in
Dundalk, Maryland. The U.S. EPA offered BGE and three other PRPs the opportunity to conduct an environmental investigation and
present cleanup recommendations at the site. In addition, the U.S. EPA is seeking recovery from the PRPs of $1.7 million for past
cleanup and investigation costs at the site. On March 11, 2013, BGE and three other PRP’s signed an Administrative Settlement
Agreement and Order on Consent with the U.S. EPA which requires the PRP’s to conduct a Remedial Investigation and Feasibility
Study at the site to determine what, if any, are the appropriate and recommended cleanup activities for the site. The ultimate
outcome of this proceeding is uncertain. Since the U.S. EPA has not selected a cleanup remedy and the allocation of the cleanup
costs among the PRPs has not been determined, an estimate of the range of BGE’s reasonably possible loss, if any, cannot be
determined.
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