ComEd 2013 Annual Report Download - page 132

agreements. Thechangeinthenumber ofunconsolidatedvariable interestsisdriven by thecompletion ofcertainobligations which
causethe entitiesto no longer beunconsolidatedvariable interestsoffset by theaddition ofan equityinvestment inaresidential
solar provider.Thefollowingtablespresent summaryinformation about thesignificant unconsolidated VIE entities:
December 31, 2013
Commercial
Agreement
VIEs
Equity
Investment
VIEs Total
Total assets(a)..................................................................... $128$332 $460
Total liabilities(a).................................................................... 17123 140
Registrants’ ownershipinterest(a)...................................................... — 86 86
Other ownershipinterests(a).......................................................... 111 123 234
Registrants’ maximumexposure to loss:
Carryingamount ofequityinvestments.............................................. 7 67 74
Contractintangible asset ......................................................... 9 — 9
Debtandpayment guarantees .................................................... — 5 5
Net assetspledgedfor Zion Station decommissioning(b) ............................... 44 — 44
December 31, 2012
Commercial
Agreement
VIEs
Equity
Investment
VIEs Total
Total assets(a)..................................................................... $386 $354 $740
Total liabilities(a).................................................................... 219114333
Registrants’ ownershipinterest(a)...................................................... — 97 97
Other ownershipinterests(a).......................................................... 167 143 310
Registrants’ maximumexposure to loss:
Lettersofcredit................................................................. 5 — 5
Carryingamount ofequityinvestments.............................................. — 77 77
Contractintangible asset ......................................................... 8 — 8
Debtandpayment guarantees .................................................... — 5 5
Net assetspledgedfor Zion Station decommissioning(b) ............................... 50—50
(a)Theseitems represent amountson theunconsolidated VIE balancesheets, not on Exelon’s or Generation’s ConsolidatedBalanceSheets. Theseitems are included
to provideinformation regardingthe relativesizeoftheunconsolidated VIEs.
(b) Theseitems represent amountson Exelon’s andGeneration’s ConsolidatedBalanceSheetsrelatedto theasset sale agreement withZionSolutions, LLC. The net
assetspledgedfor Zion Station decommissioningincludesgross pledgedassetsof $458 million and$614million asofDecember 31,2013 andDecember 31,2012,
respectively; offset by payablesto ZionSolutions LLC of$414million and $564 million asofDecember 31,2013 andDecember 31,2012,respectively. Theseitems
are includedto provideinformation regardingthe relativesizeoftheZionSolutions LLC unconsolidated VIE. See Note 15—Asset Retirement Obligationsfor further
discussion.
For each unconsolidated VIE, Exelon andGeneration assess therisk ofaloss equal to theirmaximumexposure to beremote and,
accordinglyExelon andGeneration have not recognizedaliabilityassociatedwithanyportion ofthemaximumexposure to loss. In
addition,there are no agreementswith, or commitments by, thirdpartiesthat wouldmateriallyaffectthefairvalue or risk oftheir
variable interestsinthesevariable interest entities.
Energy Purchase and Sale Agreements. InMarch 2005, Constellation,to which Generation is nowasuccessor,closeda
transaction inwhich Generation assumedfromacounterpartytwopower salescontractswithpreviouslyexisting VIEs. TheVIEs
previouslywere createdbythecounterpartyto issue debtinorder to monetizethevalue oftheoriginal contractsto purchaseandsell
power.Under thepower salescontracts, Generation soldpower to theVIEs which, in turn,soldthat power to an electric distribution
utilitythrough 2013.Inconnection withthis transaction,athird-partyacquiredtheequityoftheVIEs andGeneration loanedthat party
a portion ofthe purchaseprice.Ifthe electric distribution utilitywere to default under itsobligation to buypower fromtheVIEs, the
equityholder couldtransfer itsequityintereststo Generation inlieu ofrepayingthe loan.Inthis event,Generation wouldhavethe
righttoseekrecoveryofitslossesfromthe electric distribution utility. Asaresult,Generation hasconcludedthat consolidation was
not required. During2013,thethird-partyrepaid theirobligationsofthe loan withGeneration which causedthe entitiesto no longer
beunconsolidated VIEs.
ZionSolutions. Generation hasan asset sale agreement withEnergySolutions, Inc. andcertainofitssubsidiaries, including
ZionSolutions, LLC (ZionSolutions), which is further discussedinNote 15—Asset Retirement Obligations. Under this agreement,
ZionSolutionscan put theassetsandliabilitiesback to Generation when decommissioningiscomplete.Generation hasevaluated
this agreement anddeterminedthat,through the put option,ithasavariable interestinZionSolutionsbut is not theprimary
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