ComEd 2013 Annual Report Download - page 107

Rating as of December 31, 2013
Total
Exposure
Before Credit
Collateral
Credit
Collateral (a)
Net
Exposure
Number of
Counterparties
Greater than 10%
of Net Exposure
Net Exposure of
Counterparties
Greater than 10%
of Net Exposure
Investment grade............................... $1,621 $172$1,449 1$491
Non-investment grade........................... 27918— —
Noexternal ratings
Internallyrated—investment grade............. 41614151226
Internallyrated—non-investment grade......... 30 2 28— —
Total ......................................... $2,094 $184 $1,910 2 $717
Maturity of Credit Risk Exposure
Rating as of December 31, 2013
Less than
2 Years
2-5
Years
Exposure
Greater than
5 Years
Total Exposure
Before Credit
Collateral
Investment grade..................................................... $1,146 $340$135$1,621
Non-investment grade................................................. 23 4— 27
Noexternal ratings
Internallyrated—investment grade................................... 2721386 416
Internallyrated—non-investment grade............................... 30 —— 30
Total ............................................................... $1,471$482$141$2,094
Net Credit Exposure by Type of Counterparty
As of
December 31,
2013
Financial Institutions ................................................................................ $ 256
Investor-ownedutilities, marketersandpower producers................................................... 684
Energy cooperativesandmunicipalities ................................................................. 907
Other ............................................................................................. 63
Total ............................................................................................. $1,910
(a)AsofDecember 31,2013,creditcollateral heldfromcounterpartieswhere Generation hadcreditexposure included$155 million ofcash and$29million oflettersof
credit.
ComEd
Creditrisk for ComEd is managedbycreditandcollection policies, which are consistent withstate regulatoryrequirements. ComEd
is currentlyobligatedto provideservice to all electric customerswithinitsfranchisedterritory. ComEd records a provision for
uncollectible accounts, basedupon historical experience,to providefor the potential loss fromnonpayment by thesecustomers. See
Note 1 oftheCombinedNotesto ConsolidatedFinancial Statementsfor the allowancefor uncollectible accountspolicy. ComEd is
permittedto recover itscostsofprocuringenergy through theIllinois Settlement Legislation aswell astheICC-approved
procurement tariffs. ComEd will monitor nonpayment fromcustomersandwill makeanynecessaryadjustmentsto the provision for
uncollectible accounts. TheIllinois Settlement Legislation prohibitsutilities, includingComEd, fromterminatingelectric servicetoa
residential electric spaceheat customer due to nonpayment between December 1 ofanyyear through March 1ofthefollowingyear.
ComEd’s abilityto disconnect non space-heatingresidential customersisalsoimpactedbycertainweather restrictions, at anytime
ofyear,under theIllinois Public UtilitiesAct.ComEd will monitor theimpactofits disconnection practicesandwill makeany
necessaryadjustmentsto the provision for uncollectible accounts. ComEd did not haveanycustomersrepresentingover 10%ofits
revenuesasofDecember 31,2013.See Note 3 oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional
information regardingComEd’s recentlyapprovedtariffs to adjust ratesannuallythrough arider mechanism to reflectincreasesor
decreasesin annual uncollectible accountsexpense.
ComEd’s power procurement contractsprovidesupplierswithacertainamount ofunsecuredcredit.Thecreditposition is basedon
forwardmarket pricescomparedto thebenchmarkprices. Thebenchmarkpricesare theforwardpricesofenergy projectedthrough
thecontract termandare set at thepoint ofsupplier bid submittals. If theforwardmarket priceofenergy exceeds thebenchmark
price,thesuppliersare requiredto postcollateral for thesecuredcredit portion after adjustingfor anyunpaid deliveriesand
unsecuredcredit allowedunder thecontract.TheunsecuredcreditusedbythesuppliersrepresentsComEd’s net creditexposure.
101