Uncertainty around future environmental regulations creates difficulty planning long-term
capital projects in our generation fleet and for our gas distribution business. These laws and regulations require us to seek a variety of environmental licenses, permits, inspections, and other regulatory approvals. We could be required to install
expensive pollution control measures or limit or cease activities, including the retirement of certain generating plants, based on these regulations. Additionally, we may become a responsible party for environmental cleanup at sites identified by a
regulatory body. We cannot predict with certainty the amount and timing of future expenditures related to environmental matters because of the difficulty of estimating cleanup costs. There is also uncertainty in quantifying liabilities under
environmental laws that impose joint and several liability on potentially responsible parties.
We may also incur liabilities as a result
of potential future requirements to address climate change issues. Proposals for voluntary initiatives and mandatory controls are being discussed both in the United States and worldwide to reduce greenhouse gasses (GHGs) such as carbon
dioxide, a
by-product
of burning fossil fuels. If increased regulations of GHG emissions are implemented, the operations of our fossil-fueled generation assets may be significantly impacted. Since there can be
no assurances that environmental costs may be recovered through the regulatory process, our financial performance may be negatively impacted as a result of environmental matters.
Future environmental regulation of natural gas extraction techniques, including hydraulic fracturing, being discussed both at the United
States federal level and by some states may affect the profitability of natural gas extraction businesses which could affect demand for, and profitability of, our gas transportation businesses.
Threats of cyber incidents, physical security, and terrorism could affect our business.
Issues may threaten us such as
cyber incidents, physical security, or terrorism that may disrupt our operations, and could harm our operating results.
Information
security risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication and frequency of cyberattacks, and data security breaches. Our industry requires the continued operation of
sophisticated information and control technology systems and network infrastructure. Despite implementation of security measures, all of our technology systems are vulnerable to disability or failures due to cyber incidents, physical security
threats, acts of war or terrorism, and other causes, as well as loss of operational control of our electric generation and distribution assets and our gas distribution assets. If our information technology systems were to fail and they were unable
to recover in a timely way, we may be unable to fulfill critical business functions, which could have a material adverse effect on our business, operating results, and financial condition.
Suppliers, vendors, contractors, and information technology providers have access to systems that support our operations and maintain customer
and employee data. A breach of these third-party systems could adversely affect the business as if it was a breach of our own system. Also, because our generation and distribution systems are part of an interconnected system, a disruption caused by
a cyber incident at another utility, electric generator, system operator, or commodity supplier could also adversely affect our business, operating results, and financial condition.
In addition, our generation plants, our electrical distribution facilities, and our gas pipeline and storage facilities, in particular, may be
targets of physical security threats or terrorist activities that could disrupt our ability to produce or distribute some portion of their products. We have increased security as a result of past events and may be required by regulators or by the
future threat environment to make investments in security that we cannot currently predict.
Failure to maintain the security of
personally identifiable information could adversely affect us.
In connection with our business, we collect and retain personally identifiable information of our customers, shareholders, and employees. Customers, shareholders, and
employees expect that we will adequately protect their personal information. The regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder,
employee, or Company data by cybercrime or otherwise, could adversely impact our reputation, and could result in significant costs, fines, and litigation.
Construction and capital improvements to our power facilities, distribution systems and Gas Storage and Pipelines business subject us to
risk.
We are managing ongoing, and planning future, significant construction and capital improvement projects at our multiple power generation and distribution facilities, at our gas distribution system, and at our Gas Storage and Pipelines
business. Many factors that could cause delays or increased prices for these complex projects are beyond our control, including the cost of materials and labor, subcontractor performance, timing and issuance of necessary permits or approvals
(including required certificates from regulatory agencies), construction disputes, impediments to acquiring
rights-of-way
or land rights on a timely basis and on
acceptable terms, cost overruns, and weather conditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect our financial performance, operations, or expected investment returns at the affected
facilities, businesses and development projects.
Operation of a nuclear facility subjects us to risk.
Ownership of an
operating nuclear generating plant subjects us to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclear regulation, increased capital expenditures to
meet industry requirements, and operational factors that can significantly impact the performance and cost of operating a nuclear facility compared to other generation options. Insurance maintained by us for various
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