ComEd 2013 Annual Report Download - page 206

requiredto befundedbyGeneration.AnyZion Station NDT funds remainingafter thecompletion ofall decommissioningactivities
will be returnedto ComEd customersinaccordancewiththe applicable orders. Thefollowingtable providesthe pledgedassetsand
payable to ZionSolutions, andwithdrawalsbyZionSolutionsat December 31,2013 and2012:
2013 2012
Carryingvalue ofZion Station pledgedassets.................................................. $458 $614
Payable to Zion Solutions(a)................................................................ 414 564
Current portion ofpayable to Zion Solutions(b) ................................................. 109132
WithdrawalsbyZion Solutionsto paydecommissioningcosts(c) ................................... 498 335
(a) ExcludesaliabilityrecordedwithinExelon’s ConsolidatedBalanceSheetsrelatedto thetaxobligation on the unrealizedactivityassociatedwiththeZion Station NDT
Funds. TheNDT Funds will beutilizedto satisfy thetaxobligationsasgainsandlossesare realized.
(b) IncludedinOther current liabilitieswithinExelon’s ConsolidatedBalanceSheets.
(c) CumulativewithdrawalssinceSeptember 1,2010.
ZionSolutionsleasedthe landassociatedwithZion Station fromGeneration pursuant to a LeaseAgreement.Under theLease
Agreement,ZionSolutionshascommittedto complete therequireddecommissioningworkaccordingto an established schedule and
will constructadrycask storagefacilityon the landfor theSNF currentlyheldinSNF poolsat Zion Station.Rent payable under the
LeaseAgreement is $1.00 per year,although theLeaseAgreement requiresZionSolutionsto paypropertytaxesassociatedwith
Zion Station andpenaltyrentsmayaccrue if there are unexcuseddelays inthe progress ofdecommissioningworkat Zion Station or
theconstruction ofthedrycask SNF storagefacility. Toreducetherisk ofdefault by EnergySolutionsor ZionSolutions,
EnergySolutionsprovideda$200 million letter ofcredittobeusedto funddecommissioningcostsintheevent theNDT assetsare
insufficient.EnergySolutionshasalso provideda performanceguarantee andenteredinto other agreementsthat will providerights
andremediesfor Generation andtheNRCinthecaseofother specifiedeventsofdefault,includingaspecial purposeeasement for
disposal capacityat theEnergySolutionssite inClive,Utah, for all LLRWvolumeofZion Station.
NRC Minimum Funding Requirements.NRCregulationsrequire that licenseesofnuclear generatingfacilitiesdemonstrate
reasonable assurancethat funds will beavailable inspecifiedminimumamountsto decommission thefacilityat theendofitslife.
TheestimateddecommissioningobligationsascalculatedusingtheNRCmethodology differ fromtheAROrecordedon
Generation’s andExelon’s ConsolidatedBalanceSheetsprimarilydue to differencesinthetype ofcostsincludedintheestimates,
thebasis for estimatingsuch costs, andassumptionsregardingthedecommissioningalternativesto beused, potential license
renewals, decommissioningcostescalation,andthegrowthrate intheNDT funds. Under NRCregulations, if theminimumfunding
requirementscalculatedunder theNRCmethodology are less than thefuture value oftheNDT funds, alsocalculatedunder theNRC
methodology, then theNRCrequireseither further fundingor other financial guarantees.
Keyassumptionsusedintheminimumfundingcalculation usingtheNRCmethodology at December 31,2013 include:
(1)consideration ofcostsonlyfor theremoval ofradiological contamination at each unit;(2)the option on a unit-by-unitbasis to use
generic, non-site specific costestimates; (3)consideration ofonlyone decommissioningscenariofor each unit; (4) the plantscease
operation at theendoftheircurrent licenselives (withno assumedlicense renewalsfor thoseunitsthat have not already received
renewalsandwithan assumedend-of-operationsdate of2019for Oyster Creek); (5) theassumption ofcurrent nominal dollar cost
estimatesthat are neither escalatedthrough the anticipatedperiodofdecommissioning, nor discountedusingtheCARFR;and
(6) assumedannual after-taxreturnson theNDT funds of2%(3%for theformer PECO units, asspecifiedbythePAPUC).
Incontrast,thekeycriteriaandassumptionsusedbyGeneration to determine theAROandto forecastthe target growthintheNDT
funds at December 31,2013 include:(1)theuseofsite specific costestimatesthat are updatedat leastonceevery fiveyears;
(2)theinclusion intheAROestimate ofall legallyunavoidable costsrequiredto decommission theunit(e.g., radiological
decommissioningandfull site restoration for certainunits, on-site spent fuel maintenanceandstoragesubsequent to ceasing
operationsanduntilDOE acceptance,and disposal ofcertainlow-level radioactivewaste); (3)theconsideration ofmultiple scenarios
where decommissioningactivitiesare completedunder three possible scenariosrangingfrom10 to 70yearsafter thecessation of
plant operations; (4) theassumption plantscease operatingat theendofan extendedlicenselife(assuming20-year license renewal
extensions, except Oyster Creekwithan assumedend-of-operationsdate of2019); (5) themeasurement oftheobligation at the
present value ofthefuture estimatedcostsandan annual averageaccretion oftheAROofapproximately5%through a periodof
approximately30 yearsafter theendoftheextendedlivesoftheunits; and (6) an estimatedtargetedannual pre-taxreturn on the
NDT funds of 5.9% to 6.7% (ascomparedto a historical 5-year annual average pre-taxreturn ofapproximately11.7%).
Generation is requiredto providetotheNRCabiennial report by unit(annuallyfor unitsthat havebeen retiredor are withinfive
yearsofthecurrent approvedlicenselife), basedon valuesasofDecember 31,addressingGeneration’s abilityto meet theNRC
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