ComEd 2013 Annual Report Download - page 152

Rate stabilization deferral. InJune 2006, Senate Bill 1 wasenactedinMarylandandimposeda rate stabilization measure that
cappedrate increases by BGE for residential electric customersat 15% fromJuly1,2006, to May31,2007. Asaresult, BGE
recordedaregulatoryasset on itsConsolidatedBalanceSheetsequal to thedifferencebetween thecoststo purchasepower and
therevenuescollectedfromcustomers, aswell asrelatedcarryingchargesbasedon short-terminterest ratesfromJuly1,2006, to
May31,2007. Inaddition,asrequiredbySenate Bill 1,theMDPSC approveda plan that allowedresidential electric customersthe
option to further defer the transition to market ratesfromJune 1,2007, to January1,2008. During2007, BGE deferred$306million
ofelectricitypurchasedfor resale expensesandcertain applicable carryingcharges, which are calculatedusingtheimpliedinterest
ratesofthe rate stabilization bonds, asaregulatoryasset relatedto the rate stabilization plans. During2013 and2012, BGE
recovered $66 million and $67 million,respectively, ofelectricitypurchasedfor resale expensesandcarryingchargesrelatedto the
rate stabilization plan regulatoryasset. BGE began amortizingtheregulatoryasset associatedwiththedeferral which endedinMay
2007to earnings over a periodnot to exceedten yearswhen collection fromcustomersbegan inJune 2007.
Energy efficiency and demand response programs. Theseamountsrepresent costsrecoverable (refundable)under ComEd’s
ICC approvedEnergy Efficiency andDemandResponsePlan, PECO’s PAPUC-approved EE&C Plan,andtheBGE Smart Energy
SaversProgram®.ComEd began recoveringthesecostsor refundingover-collectionsofthesecostson June 1,2008through a
rider.ComEd earnsa return on thecapital investment incurredunder the programbut doesnot earn (pay) interestonunder (over)
collections. For PECO, this amount representsan over-collection ofprogramcostsrelatedto bothPhaseIandPhaseII ofits EE&C
Plan. PECO doesnot earn (pay) interestonunder (over)collections. PECO began recoveringthecostsofitsPhaseIandPhaseII
EE&C Plansthrough asurchargeinJanuary2010 andJune 2013,respectively, basedon projectedspendingunder the programs.
PhaseIrecoverycontinuedover thelifeofthe program, which expiredon May31,2013 andexcess funds collectedbegan being
refundedinJune 2013.PhaseII ofthe programbegan on June 1,2013,andwill continue over thelifeofthe program, which will
expire on May31,2016. Excess funds collectedare requiredto berefundedbeginninginJune 2016. PECO earneda return on the
capital investment incurredunder PhaseIofthe program. BGE’s Smart Energy SaversProgram®includesboth MDPSC approved
demandresponseandenergy efficiency programs. For theBGE PeakRewardsSM demandresponse program which began in
January2008, actual marketingandcustomer bonuscostsincurredinthedemandresponse programare beingrecoveredover a 5-
year amortization periodfromthedate incurredpursuant to an order by theMDPSC. Fixedassetsrelatedto thedemandresponse
programare recoveredover thelifeoftheequipment.Alsoincludedinthedemandresponse programare customer bill credits
relatedto BGE’s Smart Energy Rewards program which began inJuly2013.Actual costsincurredintheconservation programare
beingamortizedover a 5-year periodwithrecoverybeginningin 2010 pursuant to an order by theMDPSC. BGE earnsa rate of
return on thecapital investmentsanddeferredcostsincurredunder the programandearns(pays) interestonunder (over)
collections.
Merger integration costs. Theseamountsrepresent integration coststo achievedistribution synergiesrelatedto themerger
transaction.Asaresult oftheMDPSC’s February2013 rate order, BGE deferred$8million relatedto non-severancemerger
integration costsincurredduring2012 andthefirstquarter of2013.Ofthesecosts, $4 million wasauthorizedto beamortizedover a
5-year periodthat began inMarch 2013.Therecoveryoftheremaining$4million wasdeferred. IntheMDPSC’s December 2013
rate order, BGE wasauthorizedto recover theremaining$4million andan additional $4 million ofnon-severancemerger integration
costsincurredduring2013.Thesecostsare beingamortizedover a 5-year periodthat began inDecember 2013. BGE is earninga
return on this regulatoryasset includedinbase rates.
Under (Over)-recovered electric and gas revenue decoupling. Theseamountsrepresent the electric andgas distribution costs
recoverable fromor refundable to customersunder BGE’s decouplingmechanism, which doesnot earn a rate ofreturn.Asof
December 31,2013, BGE hadaregulatoryliabilityof$7million relatedto over-recoveredelectric revenue decouplingand$9million
relatedto over-recoverednatural gasrevenue decoupling. AsofDecember 31,2012, BGE hadaregulatoryasset of$5million
relatedto under-recoveredelectric revenue decouplingandaregulatoryliabilityof$7million relatedto over-recoverednatural gas
revenue decoupling.
Nuclear decommissioning. Theseamountsrepresent estimatedfuture nuclear decommissioningcostsfor former ComEd and
PECO plantsthat exceed(regulatoryasset)or are less than (regulatoryliability) theassociateddecommissioningtrustfundassets.
Exelon believesthe trustfundassets, includingprospective earnings thereon andanyfuture collectionsfromcustomers, will be
sufficient to fundtheassociatedfuture decommissioningcostsat thetimeofdecommissioning. See Note 15—Asset Retirement
Obligationsfor additional information.
Removal costs. Theseamountsrepresent funds ComEd and BGE havereceivedfromcustomersthrough depreciation ratesto
cover thefuture non-legallyrequiredcostofremoval ofproperty, plant andequipment which reducesrate basefor ratemaking
purposes. This liabilityisreducedascostsare incurred.
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