1.0.0.3 false Contingencies false 1 $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Contingencies 0 rri_Contingencies rri false na duration string Contingencies false false false false false true false false false 1 false false 0 0 false false Contingencies false 3 Contingencies 1 rri_Contingency rri false na duration string Excluding warranties and unconditional purchase obligations, describes any existing condition, situation, or set of... false false false false false false false false false 1 false false 0 0 <div><div><p class="Heading2A" style="margin-top: 0in; margin-right: 0in; margin-bottom: 10.0pt; margin-left: .3in; text-indent: -.3in; font-size: 10.0pt; font-family: 'Times New Roman Bold'; layout-grid-mode: line; font-weight: bold;"><a name="_AUC103c72f7a9924ee7b82dd6382c8676cd">(16)  Contingencies</a> We are party to many legal and governmental proceedings, some of which may involve substantial amounts.  Unless otherwise noted, we cannot predict the outcome of the matters described below. <h3 style="margin-top: 0in; margin-right: 0in; margin-bottom: 8.0pt; margin-left: .3in; text-indent: -.3in; font-size: 10.0pt; font-family: 'Times New Roman Bold'; layout-grid-mode: line; font-weight: normal; font-style: italic;">(a)     Pending Natural Gas Litigation.</h3> We are party to eight lawsuits, several of which are class action lawsuits, in state and federal courts in Kansas, Missouri, Nevada, Tennessee and Wisconsin.  These lawsuits relate to alleged conduct to increase natural gas prices in violation of antitrust and similar laws.  The lawsuits seek treble or punitive damages, restitution and/or expenses.  The lawsuits also name a number of unaffiliated energy companies as parties.  In January 2009, the Circuit Court of Jackson County, Missouri dismissed the case filed by the Missouri Public Service Commission for lack of standing to bring the action and the Missouri Court of Appeals has affirmed the dismissal.  An appeal to the Missouri Supreme Court was filed in December 2009. <h3 style="margin-top: 0in; margin-right: 0in; margin-bottom: 8.0pt; margin-left: .3in; text-indent: -.3in; font-size: 10.0pt; font-family: 'Times New Roman Bold'; layout-grid-mode: line; font-weight: normal; font-style: italic;">(b)     Environmental Matters.</h3> New Source Review Matters.  The United States Environmental Protection Agency (EPA) and various states are investigating compliance of coal-fueled electric generating plants with the pre-construction permitting requirements of the Clean Air Act known as “New Source Review.”  In 2000 and 2001, we responded to the EPA’s information requests related to five of our plants, and in December 2007, we received supplemental requests for two of those plants.  In September 2008, we received an EPA request for information related to two additional plants and in October 2009, we received supplemental requests for those two plants.  The EPA agreed to share information relating to its investigations with state environmental agencies.  In January 2009, we received a Notice of Violation (NOV) from the EPA alleging that past work at our Shawville, Portland and Keystone generation facilities violated the agency’s regulations regarding New Source Review. In December 2007, the New Jersey Department of Environmental Protection (NJDEP) filed suit against us in the United States District Court in Pennsylvania, alleging that New Source Review violations occurred at one of our power plants located in Pennsylvania.  The suit seeks installation of “best available” control technologies for each pollutant, to enjoin us from operating the plant if it is not in compliance with the Clean Air Act and civil penalties.  The suit also names three past owners of the plant as defendants.  In March 2009, the Connecticut Department of Environmental Protection became an intervening party to the suit. We believe that the projects listed by the EPA and the projects subject to the NJDEP suit were conducted in compliance with applicable regulations.  However, any final finding that we violated the New Source Review requirements could result in significant capital expenditures associated with the implementation of emissions reductions on an accelerated basis and possible penalties.  Most of these work projects were undertaken before our ownership of those facilities.  We believe we are indemnified by or have the right to seek indemnification from the prior owners for certain losses and expenses that we may incur from activities occurring prior to our ownership. Ash Disposal Landfill Closures.  We are responsible for environmental costs related to the future closures of seven ash disposal landfills.  We recorded the estimated discounted costs ($18 million and $12 million as of December 31, 2009 and 2008, respectively) associated with these environmental liabilities as part of our asset retirement obligations.  See note 2(m). Remediation Obligations.  We are responsible for environmental costs related to site contamination investigations and remediation requirements at four power plants in New Jersey.  We recorded the estimated long-term liability for the remediation costs of $8 million as of December 31, 2009 and 2008. Conemaugh Actions.  In April 2007, PennEnvironment and the Sierra Club filed a citizens’ suit against us in the United States District Court, Western District of Pennsylvania to enforce provisions of the water discharge permit for the Conemaugh plant, of which we are the operator and have a 16.45% interest.  PennEnvironment and the Sierra Club seek civil penalties, remediation and an injunction against further violations.  We are confident that the Conemaugh plant has operated and will continue to operate in material compliance with its water discharge permit, its consent order agreement with the Pennsylvania Department of Environmental Protection, and related state and federal laws.  In December 2009, the District Court ordered that the case be dismissed.  PennEnvironment and the Sierra Club have requested that the court reconsider its ruling.  If PennEnvironment and the Sierra Club are ultimately successful, we could incur additional capital expenditures associated with the implementation of discharge reductions and penalties, which we do not believe would be material. Global Warming.  In February 2008, the Native Village of Kivalina and the City of Kivalina, Alaska filed a suit in the United States District Court for the Northern District of California against us and 23 other electric generating and oil and gas companies.  The lawsuit seeks damages of up to $400 million for the cost of relocating the village allegedly because of global warming caused by the greenhouse gas emissions of the defendants.  In late 2009, the District Court ordered that the case be dismissed and the plaintiffs appealed.  We are also a party to Comer v. Murphy Oil, where a group of Mississippi residents and landowners allege the defendants’ greenhouse gas emissions contributed to the force of Hurricane Katrina.  The plaintiffs have not specified the amount of damages they are seeking.  In October 2009, the United States Court of Appeals for the Fifth Circuit ruled that the plaintiffs’ claims satisfied the threshold test for standing and did not present a non-justiciable political question and remanded the case to the United States District Court for the Southern District of Mississippi for further proceedings.  While we believe claims such as these lack legal merit, it is possible that this trend of climate change litigation may continue. <h3 style="margin-top: 0in; margin-right: 0in; margin-bottom: 8.0pt; margin-left: .3in; text-indent: -.3in; font-size: 10.0pt; font-family: 'Times New Roman Bold'; layout-grid-mode: line; font-weight: normal; font-style: italic;">(c)     Other.</h3> Excess Mitigation Credits.  From January 2002 to April 2005, CenterPoint applied excess mitigation credits (EMCs) to its monthly charges to retail energy providers.  The PUCT imposed these credits to facilitate the transition to competition in Texas, which had the effect of lowering the retail energy providers’ monthly charges payable to CenterPoint.  CenterPoint represents that the portion of those EMCs credited to our former Texas retail business totaled $385 million. In its stranded cost case, CenterPoint sought recovery of all EMCs credited to all retail electric providers, including our former Texas retail business, and the PUCT ordered that relief.  On appeal, the Texas Third Court of Appeals ruled that CenterPoint’s stranded cost recovery should exclude EMCs credited to our former Texas retail business for price-to-beat customers.  The case is now before the Texas Supreme Court.  In November 2008, CenterPoint asked us to agree to suspend any limitations periods that might exist for possible claims against us or our former Texas retail business if it is ultimately not allowed to include in its stranded cost calculation EMCs credited to our former Texas retail business.  We agreed to suspend only unexpired deadlines, if any, that may apply to a CenterPoint claim relating to EMCs credited to our former Texas retail business.  Regardless of the outcome of the Texas Supreme Court proceeding, we believe that any claim by CenterPoint that we are liable to it for any EMCs credited to our Texas retail business lacks legal merit and is unsupported by our Master Separation Agreement with CenterPoint.  In addition, CenterPoint has publicly stated that it has no legal recourse against us or our former Texas retail business for any reduction in the amount of its recoverable stranded costs should EMCs credited to our former Texas retail business be excluded. CenterPoint Indemnity.  We have agreed to indemnify CenterPoint against certain losses relating to the lawsuits described in note 16(a) under “Pending Natural Gas Litigation.” TexasFranchise Audit.  The state of Texas has issued assessment orders indicating an estimated tax liability of approximately $58 million (including interest and penalties of $20 million) relating primarily to the sourcing of receipts for 2000 through 2006.  We are contesting the audit assessments related to this issue. Sales Tax Contingencies.  Some of our sales tax computations are subject to challenge under audit.  As of December 31, 2009 and 2008, we have $4 million and $13 million, respectively, accrued in current and longterm liabilities for both continuing and discontinued operations relating to these contingencies. Refund Contingency Related to Transportation Rates.  In September 2008, Kern River Gas Transmission Company (Kern), a natural gas pipeline, and certain of its shippers entered into a settlement agreement regarding Kern’s transportation rates to which we were a party.  The agreement resulted in a refund to us of $30 million during the fourth quarter of 2008 (recorded as a current liability).  In 2009, the Federal Energy Regulatory Commission (FERC) rejected the settlement agreement and directed Kern to recalculate the refunds.  We do not expect any adjustments to be material.  When the final FERC order is received in 2010, we will recognize this liability in income from continuing operations as a reduction of cost of sales. </div></div> (16)  Contingencies We are party to many legal and governmental proceedings, some of which may involve substantial amounts.  Unless otherwise noted, false false Excluding warranties and unconditional purchase obligations, describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made. Includes environmental contingencies. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true