ComEd 2013 Annual Report Download - page 154

(a) PECO’s gasPOR programbecameeffectiveonJanuary1,2012 andincludesa1% discount on purchasedreceivablesinorder to recover theimplementation costs
ofthe program. If thecostsare not fullyrecoveredwhen PECO filesitsnextgas distribution rate case, PECO will proposeamechanism to recover theremaining
implementation costsasadistribution chargetolowvolume transportation customersor applyfuture discountson purchasedreceivablesfromnatural gassuppliers
servingthosecustomers.
(b) For ComEd and BGE, reflectstheincremental allowancefor uncollectible accountsrecorded, which is inaddition to the purchasediscount.For ComEd, the
incremental uncollectible accountsexpenseis recoveredthrough itsPurchaseofReceivableswithConsolidatedBilling (PORCB) tariff.
4. Merger and Acquisitions
Merger with Constellation
Description of Transaction
OnMarch 12,2012,Exelon completedthemerger contemplatedbytheMerger Agreement amongExelon,Bolt Acquisition
Corporation,awhollyownedsubsidiaryofExelon (Merger Sub), andConstellation.Asaresult ofthat merger,Merger Subwas
mergedinto Constellation (theInitial Merger)andConstellation becameawhollyownedsubsidiaryofExelon.Followingthe
completion oftheInitial Merger,Exelon andConstellation completedaseriesofinternal corporate organizational restructuring
transactions. Constellation mergedwithandinto Exelon,withExelon continuingasthesurvivingcorporation (theUpstreamMerger).
SimultaneouslywiththeUpstreamMerger,Constellation’s interestinRFHoldCoLLC, which holds Constellation’s interestinBGE,
wastransferredto Exelon Energy DeliveryCompany, LLC, awhollyownedsubsidiaryofExelon that alsoownsExelon’s interestsin
ComEd and PECO. FollowingtheUpstreamMerger andthe transfer ofRFHoldCoLLC, Exelon contributedto Generation certain
subsidiaries, includingthosewithgeneration andcustomer supplyoperationsthat were acquiredfromConstellation asaresult ofthe
Initial Merger andtheUpstreamMerger.
Regulatory Matters
InFebruary2012,theMDPSC issuedan Order approvingtheExelon andConstellation merger.Aspart oftheMDPSC Order,
Exelon agreedto provideapackageofbenefitsto BGE customers, theCityofB
altimore andtheState ofMaryland, resultinginan
estimateddirectinvestment intheState ofMarylandofapproximately$1billion.
Thefollowingcostswere recognizedafter theclosingofthemerger andare includedinExelon’s ConsolidatedStatementsof
OperationsandComprehensiveIncomefor theyear endedDecember 31,2012.
Description
Payment
Period Exelon
Statement of Operations
Location
BGE rate creditof$100 per residential customer (a)...................... Q2 2012 $113 Revenues
Customer investment fundto investin energy efficiency andlow-income
energy assistancetoBGE customers ................................ 2012 to 2014113.5 O&M Expense
Contribution for renewable energy, energy efficiency or relatedprojectsin
Baltimore ....................................................... 2012 to 20142O&M Expense
Charitable contributionsat $7 million per year for 10 years ................ 2012 to 2021 70O&M Expense
State fundingfor offshore winddevelopment projects..................... Q2 2012 32 O&M Expense
Miscellaneoustaxbenefits........................................... Q2 2012 (2)TaxesOther Than Income
Total $328.5
(a)Exelon madea$66 million equitycontribution to BGE inthesecondquarter of2012 to fundtheafter-taxamount ofthe rate creditasdirectedintheMDPSC order
approvingthemerger transaction.
Thedirectinvestment estimate includes $95 million to $120 million relatingto theconstruction ofaheadquartersbuildingin
Baltimore for Generation’s competitive energy businesses. OnMarch 20,2013,Generation signeda20year leaseagreement that is
contingent upon thedeveloper obtainingall requiredapprovals, permitsandfinancingfor theconstruction ofthebuilding. Once
requiredapprovalsare receivedandfinancingconditionsare met,construction will commenceandthebuildingisexpectedto be
ready for occupancy in approximately2yearsafter buildingconstruction commences.
Thedirectinvestment estimate alsoincludes$600 million to $650million for Exelon’s andGeneration’s commitment to develop or
assistindevelopment of285—300 MWs ofnewgeneration inMaryland, expectedto becompletedover a periodof10 years. The
MDPSC Order contemplatesvariousoptionsfor complyingwiththenewgeneration development commitments, includingbuildingor
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