ComEd 2013 Annual Report Download - page 203

Thefollowingtable providesa rollforwardofthenuclear decommissioningAROreflectedon Exelon’s ConsolidatedBalanceSheets,
fromJanuary1,2012 to December 31,2013:
Nuclear decommissioningAROat January1,2012 ............................................................ $3,680
Accretion expense....................................................................................... 231
Net increasedue to changesin,andtimingof, estimatedfuture cash flows ......................................... 833
Costsincurredto decommission retiredplants ................................................................ (3)
Nuclear decommissioningAROat December 31,2012 (a)....................................................... 4,741
Accretion expense....................................................................................... 259
Net decreasedue to changesin,andtimingof, estimatedfuture cash flows ........................................ (140)
Costsincurredto decommission retiredplants ................................................................ (5)
Nuclear decommissioningAROat December 31,2013 (a)....................................................... $4,855
(a)Includes$9million and$10 million asthecurrent portion oftheAROat December 31,2013 and2012,respectively, which is includedinOther current liabilitieson
Exelon’s ConsolidatedBalanceSheets.
During2013,Generation’s AROincreasedbyapproximately$114million.Theincreaseis largelydriven by an increaseinthe
estimatedcoststo decommission theLimerick andThree Mile Islandnuclear unitsresultingfromthecompletion ofupdated
decommissioningcostsstudiesreceivedduring2013 andan increasefor accretion oftheobligation.TheseincreasesintheARO
were offset by decreasesto theAROdue to changesin long-termescalation rates, primarilyfor labor andenergy costs, aswell as
changesinthetimingofthefuture nominal cash flows coupledwiththefactthat cash flows affectedbythis changeintimingare
re-measuredand discountedat current creditadjustedrisk free rates(CARFRs), which haveincreasedfromtheprior year.The
decreaseintheAROdue to thechangesin,andtimingof, estimatedcash flows were entirelyoffset by decreasesinProperty, plant
andequipment withinExelon’s andGeneration’s ConsolidatedBalanceSheets.
During2012,Generation’s AROincreasedby$1,061million.TheincreaseintheAROwaslargelydriven by four factors: i) changes
inthetimingofthefuture nominal cash flows resultingfroman assumed fiveyear deferral to 2025oftheacceptancedate ofspent
nuclear fuel by theDOE coupledwiththefactthat; ii) cash flows affectedbythis changeintimingare re-measuredand discountedat
current CARFRs, which haddramaticallydecreased given thelower interest rate environment; iii) an increaseintheestimatedcosts
to decommission theQuadCities, Dresden andClinton nuclear unitsresultingfromthecompletion ofupdateddecommissioning
costsstudiesreceivedduring2012;and iv) accretion oftheobligation.TheincreaseintheAROdue to thechangesin,andtimingof,
estimatedcash flows resultedin$10 million ofexpense, which is includedinExelon’s andGeneration’s ConsolidatedStatementsof
OperationsandComprehensiveIncome.
Nuclear Decommissioning Trust Fund Investments
NDT funds havebeen establishedfor each generatingstation unittosatisfy Generation’s nuclear decommissioningobligations.
Generally, NDT funds establishedfor a particular unitmaynot beusedto fundthedecommissioningobligationsofanyother unit.
TheNDT funds associatedwiththeformer ComEd, former PECO andformer AmerGen unitshavebeen fundedwithamounts
collectedfromComEd customers, PECO customersandthe previousownersoftheformer AmerGen plants, respectively. Basedon
an ICC order,ComEd ceasedcollectingamountsfromitscustomersto payfor decommissioningcosts. PECO is authorizedto
collectfunds, inrevenues, for decommissioningtheformer PECO nuclear plantsthrough regulatedrates, andthesecollectionsare
scheduledthrough the operatinglivesofthe plants. Theamountscollectedfrom PECO customersare remittedto Generation and
depositedinto theNDT funds for theunitfor which funds are collected. Every fiveyears, PECO filesa rate adjustment withthe
PAPUC that reflects PECO’s calculationsoftheestimatedamount neededto decommission each oftheformer PECO unitsbased
on updatedfundbalancesandestimateddecommissioningcosts. The rate adjustment is usedto determine theamount collectible
from PECO customers. Themostrecent rate adjustment occurredon January1,2013,andtheeffective ratescurrentlyyieldannual
collectionsofapproximately$24million.Thenextfive-year adjustment is expectedto bereflectedin rateschargedto PECO
customerseffectiveJanuary1,2018. Withrespecttotheformer AmerGen units, Generation doesnot collectanyamounts, nor is
there anymechanism by which Generation can seekto collectadditional amounts, fromcustomers. Apart fromthecontributions
madetotheNDT funds fromamountscollectedfromComEd and PECO customers, Generation hasnot madecontributionsto the
NDT funds.
Anyshortfall offunds necessaryfor decommissioning, determinedfor each generatingstation unit,isultimatelyrequiredto be
fundedbyGeneration,withtheexception ofashortfall for thecurrent decommissioningactivitiesat Zion Station,where certain
197