ComEd 2013 Annual Report Download - page 21

proprietarytradingpurposes, but this activityaccountsfor onlyasmall portion ofGeneration’s efforts. The tradingportfoliois subject
to a risk management policy that includesstringent risk management limits, includingvolume,stop-loss andvalue-at-risk limits, to
manageexposure to market risk. Additionally, thecorporate risk management group andExelon’s RMC monitor thefinancial risks of
thewholesale andretailpower marketingactivities. See ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK for additional information.
At December 31,2013,Generation’s short andlong-termcommitmentsrelatingto the purchaseofenergy andcapacityfromandto
unaffiliatedutilitiesandotherswere asfollows:
(in millions)
Net Capacity
Purchases (a)
REC
Purchases (b)
Transmission Rights
Purchases (c)
Purchased Energy
from CENG Total
2014 ...................................... $ 412 $117$25$824$1,378
2015 ...................................... 367 110 13 —490
2016 ...................................... 284 76 2—362
2017 ...................................... 223 252—250
2018 ...................................... 112 3 2 —117
Thereafter ................................. 414332 — 449
Total ...................................... $1,812 $334 $76 $824$3,046
(a)Net capacitypurchasesincludePPAsandother capacitycontractsincludingthosethat are accountedfor asoperatingleases. Amountspresentedinthe
commitmentsrepresent Generation’s expectedpaymentsunder these arrangementsat December 31,2013,net of fixedcapacitypaymentsexpectedto bereceived
by Generation under contractsto resell such acquiredcapacityto thirdpartiesunder long-termcapacitysale contracts. Expectedpaymentsincludecertainfixed
capacitycharges which maybereducedon plant availability.
(b) Thetable excludesrenewable energy purchasesthat are contingent in nature.
(c) Transmission rightspurchasesincludeestimatedcommitmentsfor additional transmission rightsthat will berequiredto fulfill firmsalescontracts.
Aspart ofreachingacomprehensiveagreement with EDF inOctober 2010,theexistingpower purchaseagreementswith CENG
were modifiedto beunit-contingent through theendoftheiroriginal termin 2014. Under theseagreementsGeneration purchases
85% ofthenuclear plant output owned by CENG that is not soldto thirdparties. CENG hastheabilityto fix the energy priceona
forwardbasis by enteringinto monthlyenergy hedge transactionsfor a portion ofthefuture sale, while anyunhedgedportionswill be
providedat market pricesbydefault.Additionally, beginningin 2015andcontinuingto theendofthelifeoftherespective plants,
Generation agreedto purchase50.01%ofthenuclear plant output owned by CENG at market prices. This purchaseagreement will
continue to beeffectiveunder theMaster Agreement discussedabove,except that if the put option under theMaster Agreement is
exercised, then theEDF PPAwill be transferredto Generation upon thecompletion ofthePut Option Agreement transaction.
Generation disclosesinthetable abovecommitmentsto purchasefrom CENG at fixedprices. All commitmentsto purchasefrom
CENG at market prices, which include all purchasessubsequent to December 31,2014, are excludedfromthetable.Generation
continuesto owna50.01%membershipinterestinCENG that is accountedfor asan equitymethodinvestment.See Note 25ofthe
CombinedNotesto ConsolidatedFinancial Statementsfor more detailson this arrangement.
Capital Expenditures
Generation’s business is capital intensiveandrequires significant investmentsinnuclear fuel andenergy generation assetsandin
other internal infrastructure projects. Generation’s estimatedcapital expendituresfor 2014are asfollows:
(in millions)
Nuclear fuel (a)......................................................................... $ 900
Production plant ....................................................................... 900
Renewable energy projects .............................................................. 300
Uprates .............................................................................. 150
Marylandcommitments ................................................................. 100
Other ................................................................................ 50
Total ................................................................................. $2,400
(a)IncludesGeneration’s share oftheinvestment innuclear fuel for theco-ownedSalemplant.
15