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Asset Retirement Obligations
 3 Months Ended
Mar. 31, 2013
Asset Retirement Obligation [Abstract]  
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATION

FirstEnergy has recognized applicable legal obligations for AROs and their associated cost primarily for nuclear power plant decommissioning, reclamation of sludge disposal ponds, closure of coal ash disposal sites, underground and above-ground storage tanks, wastewater treatment lagoons and transformers containing PCBs. In addition, FirstEnergy has recognized conditional retirement obligations, primarily for asbestos remediation.

The ARO liabilities for FES primarily relate to the decommissioning of the Beaver Valley, Davis-Besse and Perry nuclear generating facilities. FES uses an expected cash flow approach to measure the fair value of their nuclear decommissioning AROs.

Conditional retirement obligations associated with tangible long-lived assets are recognized at fair value in the period in which they are incurred if a reasonable estimate can be made, even though there may be uncertainty about timing or method of settlement. When settlement is conditional on a future event occurring, it is reflected in the measurement of the liability, not in the recognition of the liability.






The following table summarizes the changes to the ARO balances during 2013 and 2012:
ARO Reconciliation
 
FirstEnergy
 
FES
 
 
(In millions)
Balance, January 1, 2012
 
$
1,497

 
$
904

Liabilities settled
 
(2
)
 
(1
)
Accretion
 
104

 
62

Balance, December 31, 2012
 
1,599

 
965

Liabilities settled
 
(8
)
 
(9
)
Accretion
 
27

 
16

Revisions in estimated cash flows
 
149

 
149

Balance, March 31, 2013
 
$
1,767

 
$
1,121



The revision in estimates for the ARO balance relates primarily to increased cost estimates for the closure of LBR. The revised cost estimates were the result of a Closure Plan submitted to the PA DEP by FG on March 28, 2013, which provides for placing a final cap over LBR. See Note 11, Commitments, Guarantees, and Contingencies for additional information related to the closure of LBR.