ComEd 2013 Annual Report Download - page 23

Electric Distribution Rate Cases.TheICC issuedan order inComEd’s 2007electric distribution rate case(2007Rate Case)
approvinga$274 million increaseinComEd’s annual deliveryservicesrevenue requirement, which becameeffectiveinSeptember
2008. Intheorder,theICC authorizeda10.3%rate ofreturn on common equity. OnFebruary23,2012,theICC issuedan order in
theremandproceedingrequiringComEd to providearefundofapproximately$37million to customersrelatedto the treatment of
post-testyear accumulateddepreciation.ComEd andseveral other partiesfiledappealsofthe rate order withtheIllinois Appellate
Court (Court). OnSeptember 27, 2013,theCourt ruledagainstComEd on theaccumulateddepreciation issue andaffirmedthat
ComEd owesarefundto customersof$37million.AsofDecember 31,2013,andDecember 31,2012,ComEd wasfullyreserved
for this liability. ComEd will not seekrehearingor appeal on this matter andisworkingwiththeICC on the process andtimingfor a
refundto customers.
OnMay24, 2011,theICC issuedan order inComEd’s 2010 electric distribution rate case(2010 Rate Case), which became
effectiveonJune 1,2011.Theorder approveda$143million increasetoComEd’s annual deliveryservicerevenue requirement and
a10.5% rate ofreturn on common equity. Theorder hasbeen appealedto theCourt by several parties. OnMay16, 2013,theCourt
dismissedasmoot the appealsoftheICC’s order inthe 2010 Rate CaseasComEd nowrecovers distribution costsunder EIMA
through a pre-establishedformula rate tariff. See Note 3 oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional
information on ComEd’s electric distribution rate cases.
Procurement-Related Proceedings. SinceJune 2009, theIPAdesigns, andtheICC approves, an electricitysupplyportfoliofor
ComEd andtheIPAadministersacompetitive process under which ComEd procuresitselectricitysupplyfromvarioussuppliers,
includingGeneration.Asrequired by EIMA,inFebruary2012 theIPAcompletedprocurement eventsfor energy andREC
requirementsfor theJune 2013 through December 2017period. See Note 3 oftheCombinedNotesto ConsolidatedFinancial
Statementsfor additional information on ComEd’s procurement plans. See Note 22 oftheCombinedNotesto ConsolidatedFinancial
Statementsfor additional information on ComEd’s energy commitments.
Continuous Power Interruption. TheIllinois Public UtilitiesAct providesthat intheevent an electric utility, such asComEd,
experiencesacontinuouspower interruption offour hoursor more that affects(inComEd’s case)more than 30,000 customers, the
utilitymaybeliable for actual damagessufferedbycustomersasaresult oftheinterruption andmayberesponsible for
reimbursement oflocal governmental emergency andcontingency expensesincurredinconnection withtheinterruption.Recovery
ofconsequential damagesisbarred. TheaffectedutilitymayseekfromtheICC awaiver oftheseliabilitieswhen theutilitycan show
that thecauseoftheinterruption wasunpreventable damagedue to weather eventsor conditions, customer tampering, or certain
other causesenumeratedinthelaw. See Note 22—CommitmentsandContingenciesoftheCombinedNotesto Consolidated
Financial Statementsfor additional information.
Smart Meter, Smart Grid and Energy Efficiency Programs
Smart Meter and Smart Grid Programs. OnJanuary6,2012,ComEd fileditsInfrastructure Investment Plan withtheICC. Under that
plan,ComEd will invest approximately$2.6 billion over ten yearsto modernizeandstorm-harden its distribution systemandto
implement smart grid technology. On April23,2012,ComEd fileditsinitial AMI Deployment Plan withtheICC, which wasapproved
by theICC on June 22,2012,withcertainmodifications. ComEd outlinedthenewdeployment schedule withintestimonyprovidedin
theAMI Plan RehearingandfiledarevisedAMI deployment plan withtheICC. OnDecember 5, 2012,theICC approvedComEd’s
revisedAMI deployment plan.OnJune 5, 2013,theICC issuedan interim Order approvingComEd’s acceleratedAMI deployment
plan consistent withthe provisionsofSenate Bill 9. Thedeployment plan providesfor theinstallation of4million electric smart
meters, of which more than 60,000 meterswere installedbytheendof2013.
Energy Efficiency Programs. Asaresult oftheIllinois Settlement Legislation,electric utilitiesinIllinois are requiredto includecost-
effective energy efficiency resourcesintheir plansto meet an incremental annual programenergy savings requirement of0.2%of
energy deliveredto retailcustomersfor theyear endedJune 1,2009, which increasesannuallyto 2.0%ofenergy deliveredinthe
year commencingJune 1,2015andeach year thereafter.Additionally, duringthe ten-year periodthat began June 1,2008, electric
utilitiesmustimplement cost-effectivedemandresponsemeasuresto reduce peakdemandby0.1%over theprior year for eligible
retailcustomers. The energy efficiency anddemandresponsegoalsare subject to rate impactcapseach year.Utilitiesare allowed
recoveryofcostsfor energy efficiency anddemandresponse programs, subject to approval by theICC. InDecember 2010,theICC
approvedComEd’s secondthree-year Energy Efficiency andDemandResponsePlan coveringthe periodJune 2011 through May
2014. The plansare designedto meet theIllinois Settlement Legislation’s energy efficiency anddemandresponsegoalsthrough
May2014, includingreductionsindeliveredenergy to all retailcustomersandinthe peakdemandofeligible retailcustomers.
17