ComEd 2013 Annual Report Download - page 14

•ERCOT representsoperationswithinElectric ReliabilityCouncilofTexas, coveringmostofthestate ofTexas(approximately
12%ofcapacity).
•Other Regionsisan aggregate ofregionsnot consideredindividually significant (approximately6%ofcapacity).
Nuclear Facilities
Generation hasownershipinterestsin eleven nuclear generatingstationscurrentlyinservice,consistingof19unitswithan
aggregate of17,263MW ofcapacity. Generation whollyownsall ofitsnuclear generatingstations, except for QuadCities
GeneratingStation (75% ownership), Peach BottomGeneratingStation (50%ownership)andSalemGeneratingStation (Salem)
(42.59% ownership), which are consolidatedon Exelon’s financial statementsrelativetoitsproportionate ownershipinterestineach
unit.Generation’s nuclear generatingstationsare all operatedbyGeneration,withtheexception ofthetwounitsat Salem, which are
operated by PSEG Nuclear, LLC (PSEG Nuclear), an indirect,whollyownedsubsidiaryof PSEG. In 2013 and2012,electric supply
(inGWh) generatedfromthenuclear generatingfacilitieswas 57% and53%, respectively, ofGeneration’s total electric supply,
which alsoincludesfossil, hydroelectric andrenewable generation andelectric supplypurchasedfor resale.Themajorityofthis
output was dispatchedto support Generation’s wholesale andretailpower marketingactivities. See ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for further discussion of
Generation’s electric supplysources.
Constellation Energy Nuclear Group, Inc.
Generation alsoownsa50.01%interestinCENG, ajoint venture with EDF. CENG is governedbyaboardoften directors, fiveof
which are appointedbyGeneration and fiveby EDF. CENG ownsandoperatesa total of fivenuclear generatingfacilitieson three
sites, Calvert Cliffs, Ginna andNi
ne Mile Point. CENG’s ownershipshare inthe total capacityoftheseunitsis3,998 MW. See
ITEM 2.PROPERTIES ofExelon’s 2013 Form10-K for additional information on thesesites.
OnJuly29, 2013,Exelon,Generation andsubsidiariesofGeneration enteredinto a Master Agreement with EDF, EDF Inc. (EDFI) (a
subsidiaryof EDF) and CENG. TheMaster Agreement contemplatesthat the partieswill execute a seriesofadditional agreements
at a closingthat will occur followingthereceipt ofregulatoryapprovalsandthesatisfaction ofother customaryclosingconditions.
Exelon currentlyexpectsthat theclosingwill occur earlyinthesecondquarter of2014.
At theclosing, Generation, CENG andsubsidiariesof CENG will execute a Nuclear OperatingServicesAgreement pursuant to
which Generation will operate theCENG nuclear generation fleet owned by CENG subsidiariesandprovidecorporate and
administrativeservicesfor theremaininglifeoftheCENG nuclear plantsasiftheywere a part oftheGeneration nuclear fleet,
subjecttoEDFI’s rightsasamember of CENG. CENG will reimburseGeneration for itsdirectandallocatedcostsfor such services.
TheNuclear OperatingServicesAgreement will replacetheSSA.At theclosing, Nine Mile Point Nuclear Station,asubsidiaryof
CENG, will alsoassigntoGeneration itsobligationsasOperator ofNine Mile Point Unit2under an operatingagreement withthe
co-owner.Inaddition,at theclosingthePSAA will beamendedandextendeduntilthecomplete andpermanent cessation of
operation oftheCENG generation plants.
At closing, Generation will makea$400 million loan to CENG bearinginterestat5.25% per annum, payable out ofspecified
available cash flows of CENG and, inanyevent,payable upon settlement ofthePut Option Agreement discussedbelow, if the put
option is exercised, or payable upon thematuritydate ofthe note (which will be20yearsfromtheclosing), whichever occursfirst.
Immediatelyfollowingreceipt ofthe proceeds ofsuch loan, CENG will makea$400 million special distribution to EDFI. The parties
will alsoexecute a FourthAmendedandRestatedOperatingAgreement for CENG, pursuant to which, amongother things, CENG
will committomake preferred distributionsto Generation (after repayment ofthe$400 million loan)quarterlyout ofspecified
available cash flows, untilGeneration hasreceivedaggregate distributionsof$400 million plusa return of 8.5% per annumfromthe
date ofthespecial distribution to EDFI.
Generation and EDFI will also enter into a Put Option Agreement at closingpursuant to which EDFI will havethe option,exercisable
beginningin 2016andthereafter untilJune 30,2022,to sell its 49.99% interestinCENG to Generation for a fairmarket value price
determinedbyagreement ofthe parties, or absent agreement,athirdpartyarbitration process. The appraisersdeterminingfair
market value of EDF’s 49.99% interestinCENG under thePut Option Agreement are instructedto takeinto account all rightsand
obligationsunder theCENG OperatingAgreement,includingGeneration’s rightswithrespecttoanyunpaid aggregate preferred
distributionsandthe relatedreturn,andthevalue ofGeneration’s rightsto other distributions. Thebeginningoftheexercise period
will beacceleratedifExelon’s affiliatesceasetoownamajorityof CENG andexercise a relatedright to terminate theNuclear
OperatingServicesAgreement.Inaddition,under limitedcircumstances, the periodfor exerciseofthe put option maybeextended
for 18months.
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