ComEd 2013 Annual Report Download - page 232

maximumrecoveryfor all lossesbyall insureds will beanaggregate of$3.2billion plussuch additional amountsastheinsurer may
recover for all such lossesfromreinsurance,indemnityandanyother source,applicable to such losses. The$3.2billion maximum
recoverylimitis not applicable,however,intheevent ofa“certifiedactofterrorism” asdefinedintheTerrorism Risk InsuranceActof
2002,asamendedbytheTerrorism Risk InsuranceProgramReauthorization Actof2007. TheTerrorism Risk InsuranceActexpires
on December 31,2014.
Additionally, NEIL providesreplacement power costinsuranceintheevent ofamajor accidental outageataninsurednuclear
station.The premiumfor this coverageis subjecttoassessment for adverseloss experience.Generation’s maximumshare ofany
assessment is $58 million per year (the retrospective premiumobligation). Recoveryunder this insurancefor terroristactsissubject
to the$3.2billion aggregate limitandsecondaryto the propertyinsurancedescribedabove. This limitwouldnot applyincasesof
certifiedactsofterrorism under theTerrorism Risk InsuranceActof2002,asamendedbytheTerrorism Risk InsuranceProgram
Reauthorization Actof2007, asdescribedabove.
NEIL requiresitsmembersto maintainaninvestment gradecredit ratingor to ensure collectabilityoftheir annual retrospective
premiumobligation by providingafinancial guarantee,letter ofcredit,deposit premium, or someother meansofassurance.
For itsinsuredlosses, Generation is self-insuredto theextent that lossesare withinthe policy deductible or exceedtheamount of
insurancemaintained. Uninsuredlossesandother expenses, to theextent not recoverable frominsurersor thenuclear industry,
couldalsobeborne by Generation.Anysuch lossescouldhaveamaterial adverseeffectonExelon’s andGeneration’s financial
condition,resultsofoperationsandliquidity.
Spent Nuclear Fuel Obligation
Under theNWPA,theDOE is responsible for thedevelopment ofageologic repositoryfor andthedisposal of SNF and high-level
radioactivewaste.AsrequiredbytheNWPA,Generation is a partyto contractswiththeDOE (StandardContracts) to providefor
disposal of SNF fromGeneration’s nuclear generatingstations. InaccordancewiththeNWPAandtheStandardContracts,
Generation pays theDOE one mill ($0.001)per kWh ofnet nuclear generation for thecostof SNF disposal. This fee maybe
adjustedprospectivelyinorder to ensure full costrecovery. TheNWPAandtheStandardContractsrequiredtheDOE to begintaking
possession of SNF generatedbynuclear generatingunitsbyno later than January31,1998. TheDOE, however,failedto meet that
deadline anditsperformancewill bedelayed significantly. OnNovember 19, 2013,theUnitedStatesCourt ofAppealsfor theDistrict
ofColumbiaCircuitorderedtheDOE to submittoCongress a proposal to reducethecurrent SNF disposal fee to zero,unless and
untilthere is aviable disposal program. OnJanuary3,2014, theDOE fileda petition for rehearing. Onthesamedate,asorderedby
thecourt,theDOE submitteda proposal to Congress to reducethecurrent SNF disposal fee to zero,subjecttoanyfurther judicial
decision.TheDOE’s submittedproposal becomeseffectiveafter the90-days ofcontinuoussession oftheCongress unless there is
Congressional action contraryto theDOE proposal.However,ifthecourt grantsthe petition for rehearing, the proposal to eliminate
thefee (andthereviewperiod) will beheldinsuspense untilafter thecourt rules. Untilsuch timeasanewfee structure is ineffect,
Generation mustcontinue to paythecurrent SNF disposal fees.
The 2010 Federal budget (which becameeffectiveOctober 1,2009) eliminatedalmost all fundingfor thecreation oftheYucca
Mountain repository while theObamaadministration devisedanewstrategy for long-term SNF management.ABlue Ribbon
Commission (BRC) on America’s Nuclear Future,appointedbytheU.S. Energy Secretary, releaseda report on January26, 2012,
detailingcomprehensiverecommendationsfor creatingasafe,long-termsolution for managingand disposingofthe nation’s spent
nuclear fuel and high-level radioactivewaste.
In early2013,theDOE issuedan updated“Strategy for theManagement and Disposal ofUsedNuclear Fuel and High-Level
RadioactiveWaste”inresponsetotheBRCrecommendations. This strategy includedaconsolidatedinterim storagefacilitythat is
plannedto be operational in 2025.
Generation usesthe 2025date astheassumeddate for when theDOE will beginaccepting SNF for purposesofdetermining
nuclear decommissioningasset retirement obligations. TheextendeddelayinSNF acceptanceby theDOE hasledto Generation’s
adoption ofdrycask storageatitsDresden,Clinton, Limerick, Oyster Creek, Peach Bottom, Byron,Braidwood, LaSalle andQuad
Citiesstations.
InAugust 2004, Generation andtheDOJ, incloseconsultation withtheDOE, reachedasettlement under which thegovernment
agreedto reimburseGeneration,subjecttocertaindamagelimitationsbasedon theextent ofthegovernment’s breach, for costs
associatedwithstorageof SNF at Generation’s nuclear stationspendingtheDOE’s fulfillment ofitsobligations. Generation submits
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