Environmental Matters

6 Months Ended

Jun. 30, 2011

Environmental Matters

Environmental Matters

(G)

Environmental Matters.    There are a number of environmental matters that could have an effect on our financial condition or results of operations. At this time, the resolution of these matters is uncertain, and we have made no accruals for such contingencies and cannot reasonably estimate the possible loss or range of loss with respect to these matters.

• As is typical for electric utilities, we are subject to various federal, state and local air and water quality requirements which, among other things, regulate emissions of pollutants, such as particulate matter, sulfur dioxide, nitrogen oxides and mercury into the air and discharges of other pollutants, including heat, into waters of the United States. Beginning in 2011, we have become subject to climate change regulations that impose restrictions on emissions of greenhouse gases (including carbon dioxide), through the Prevention of Significant Deterioration preconstruction permitting program. As a result, we will have to evaluate any major modifications that we plan to undertake at our plants to determine whether they will need to undergo new source review permitting for greenhouse gases, and, if they do, whether any control technology will need to be added. We are also subject to federal, state and local waste disposal requirements that regulate the manner of transportation, storage and disposal of various types of waste.
  

  In general, environmental requirements are becoming increasingly stringent. New requirements may substantially increase the cost of electric service by requiring changes in the design or operation of existing facilities or changes or delays in the location, design, construction or operation of new facilities. See "Item 1—BUSINESS—ENVIRONMENTAL AND OTHER REGULATION" in our 2010 Form 10-K for a more detailed discussion of current and potential future regulation. Failure to comply with these requirements could result in the imposition of civil and criminal penalties as well as the complete shutdown of individual generating units not in compliance. Certain of our debt instruments and credit agreements require us to comply in all material respects with laws, rules, regulations and orders imposed by applicable governmental authorities, which include current or future environmental laws and regulations. Should we fail to be in compliance with these requirements, it would constitute a default under such debt instruments and credit agreements. Although it is our intent to comply with applicable current and future regulations, we cannot provide assurance that we will always be in compliance with such requirements.