ComEd 2013 Annual Report Download - page 136

certainmodifications. ComEd outlinedthenewdeployment schedule withintestimonyprovidedintheAMI Plan Rehearingandfileda
revisedAMI deployment plan.Thedeployment plan providesfor theinstallation of4million electric smart meters, of which more than
60,000 meterswere installedbytheendof2013.
Appeal of 2007 Illinois Electric Distribution Rate Case.TheICC issuedan order inComEd’s 2007electric distribution rate case
(2007Rate Case)approvinga$274 million increaseinComEd’s annual deliveryservicesrevenue requirement, which became
effectiveinSeptember 2008. Intheorder,theICC authorizeda10.3%rate ofreturn on common equity. ComEd andseveral other
partiesfiledappealsofthe rate order withtheIllinois Appellate Court (Court). TheCourt issuedadecision on September 30,2010,
rulingagainstComEd on the treatment ofpost-testyear accumulateddepreciation andtherecoveryof systemmodernization costs
viaarider (Rider SMP).
Thecourt heldtheICC abusedits discretion in not reducingComEd’s rate basetoaccount for an additional 18months of
accumulateddepreciation while includingpost-testyear pro forma plant additionsthrough that period. ComEd continuedto bill rates
asestablishedunder theICC’s order inthe 2007Rate Case untilJune 1,2011 when the ratesset inthe 2010 electric distribution
rate case(2010 Rate Case)becameeffective.Insubsequent ICC proceedings, theICC issuedan order requiringComEd to provide
arefundofapproximately$37million to customersrelatedto the treatment ofpost-testyear accumulateddepreciation issue.On
March 26, 2012,ComEd fileda noticeofappeal withtheCourt.
However,on September 27, 2013 theCourt ruledagainstComEd on theaccumulateddepreciation issue andaffirmedthat ComEd
owesarefundto customersof$37million.AsofDecember 31,2013,andDecember 31,2012,ComEd wasfullyreservedfor this
liability. ComEd will not seekrehearingor appeal on this matter andisworkingwiththeICC on the process andtimingfor a refundto
customers.
Advanced Metering Program Proceeding ComEd’s 2007Rate Casefilingincludedasystemmodernization rider, which permitted
investmentsinAMI to study thecostsandbenefitsandto develop thecostestimate offull system-wideimplementation.InOctober
2009, theICC approvedamodifiedversion ofComEd’s systemmodernization rider proposedinthe 2007Rate Case,Rider AMP
(AdvancedMeteringProgram). ComEd collectedapproximately$24million under Rider AMP through December 31,2013.Several
other parties, includingtheIllinois AttorneyGeneral,appealedtheICC’s order on Rider AMP. InComEd’s 2010 electric distribution
rate case,theICC approvedComEd’s transfer ofother costsfromrecoveryunder Rider AMP to recoverythrough electric distribution
rates. OnMarch 19, 2012,theCourt reversedtheICC’s approval ofRider AMP, concludingthat theICC’s October 2009approval of
therider constitutedsingle-issue ratemaking. ComEd filedaPetition for Leave to Appeal to theIllinois SupremeCourt on April23,
2012, which wasdeniedinSeptember 2012,andthematter wasreturnedto theICC to calculate a refundamount.ComEd believes
anyrefundobligation associatedwithRider AMP shouldbe prospectivefromno earlier than thedate ofthe Appellate Court’s order
on March 19, 2012.Asaresult,ComEd recordedaregulatoryliabilityofapproximately$0.4 million at December 31,2013, which
representstheamountscollectedfromcustomerssinceMarch 19, 2012.ComEd cannot predictthe ultimate outcomeoftheICC
proceedingandtherefore,actual refunds may differ fromtheestimatedaccrual recordedat December 31,2013.
2010 Illinois Electric Distribution Rate Case OnMay24, 2011,theICC issuedan order inComEd’s 2010 Rate Case, which
becameeffectiveonJune 1,2011.Theorder approveda$143million increasetoComEd’s annual deliveryservicesrevenue
requirement anda10.5% rate ofreturn on common equity. ComEd originallyrequesteda$396 million increase,although itwas
subsequentlyreducedto $343million to account for variousadjustments. Asexpected, theICC followedtheCourt’s rulingon
ComEd’s 2007Rate Caseonthepost-testyear accumulateddepreciation issue.Theorder allowedComEd to establish or
reestablish a net amount ofapproximately$40million ofpreviouslyexpensedplant balancesor newregulatoryassets, which is
reflectedasareduction in operatingandmaintenanceexpenseandincometaxexpensein 2011.Theorder alsoaffirmedthecurrent
regulatoryasset for severancecosts, which waschallengedbyan intervener inthe 2010 Rate Case.Theorder wasappealedto the
Court by several partieson a number of issues. OnMay16, 2013,theCourt dismissedasmoot the appealsoftheICC’s order inthe
2010 Rate CaseasComEd nowrecovers distribution costsunder EIMAthrough a pre-establishedformula rate tariff.
Utility Consolidated Billing and Purchase of Receivables.Sincethefirstquarter of2011,ComEd hasbeen requiredto buy
certainRES receivables, primarilyresidential andsmall commercial andindustrial customers, at the option oftheRES, for electric
supplyserviceandthen includethoseamountson ComEd’s bill to customers. Receivablesare purchasedat a discount to
compensate ComEd for uncollectible accounts. ComEd producesconsolidatedbillsfor theaforementionedretailcustomers
reflectingchargesfor electric deliveryserviceandpurchasedreceivables. AsofDecember 31,2013,thebalanceofpurchased
accountsreceivable was$105million.Under the applicable tariff, ComEd recoversfromRES andcustomersthecostsfor
implementingandoperatingthe program. Anumber ofmunicipalities, includingtheCityof Chicagohaveswitchedto RES electric
supply. Asaresult,ComEd experiencedasignificant increaseintheamount ofRES receivablesit purchasedin 2013.
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