ComEd 2013 Annual Report Download - page 27

BGE servesan estimatedpopulation of2.8 million inits2,300 square mile combinedelectric andgasretailservice territory. BGE
provideselectric distribution servicein an area ofapproximately2,300 square milesandgas distribution servicein an area of
approximately800 square miles, bothwitha population ofapproximately2.8 million,includingapproximately621,000 intheCityof
Baltimore. BGE deliverselectricityto approximately1.2million customersandnatural gasto approximately 655,000 customers.
BGE hasthenecessaryauthorizationsto provideregulatedelectric andnatural gas distribution servicesinthevariousmunicipalities
andterritoriesinwhich itnowsuppliessuch services. Withrespect to electric distribution service, BGE’s authorizationsconsistof
charter rights, astate-widefranchisegrant andafranchisegrant fromtheCityofBaltimore.Thefranchiserightsare not exclusive
andare perpetual.Withrespect to natural gas distribution service, BGE’s authorizationsconsistofcharter rights, a perpetual state-
widefranchisegrant,andfranchisesgrantedbyall themunicipalitiesand/or governmental bodiesinwhich BGE nowsupplies
services. Thefranchisegrantsare not exclusive;some are perpetual andsome are for a limitedduration, which BGE anticipates
beingable to extendor replaceprior to expiration.
BGE’s kWh salesandpeakelectricityloadare generally higher duringthesummer andwinter months, when temperature extremes
create demandfor either summer coolingor winter heating. BGE’s highest peakloadoccurredon July21,2011 andwas7,236 MW;
its highest peakloadduringwinter months occurredon January7,2014andwas 6,526 MW.
BGE’s natural gassalesare generally higher duringthewinter months when coldtemperaturescreate demandfor winter heating.
BGE’s highestdailynatural gassendout occurredon February5,2007andwas840mmcf.
Thedemandfor electricityandgasisaffectedbyweather andusageconditions. TheMDPSC hasallowed BGE to recordamonthly
adjustment to itselectric andgas distribution revenuesfromall residential customers, commercial electric customers, themajorityof
largeindustrial electric customers, andall firmservicegascustomersto eliminate theeffectofabnormal weather andusage patterns
per customer on BGE’s electric andgas distribution volumes, thereby recoveringaspecifieddollar amount of distribution revenues
per customer,bycustomer class, regardless ofchangesinconsumption levels. This adjustment allows BGE to recognizerevenues
at MDPSC-approvedlevelsper customer,regardless ofwhat actual distribution volumeswere for a billingperiod(referredto as
“revenue decoupling”). Therefore, while theserevenuesare affectedbycustomer growth, theywill not beaffectedbyactual weather
or usageconditions. BGE billsor creditsaffectedcustomersinsubsequent months for thedifferencebetween approvedrevenue
levelsunder revenue decouplingandactual customer billings.
Retail Electric Services
BGE’s retail electric salesand distribution servicerevenuesare derivedfromelectricitydeliveriesat ratesregulatedbytheMDPSC.
Asaresult ofthederegulation ofelectric generation inMarylandeffectiveJuly1,2000,all customerscan chooseacompetitive
electric generation supplier. While BGE doesnot sell electric supplyto all customersinitsservice territory, BGE continuesto deliver
electricityto all customersandprovidesmeter reading, billing, emergency response,andregular maintenanceservices. Customer
choice programactivityaffectsrevenue collectedfromcustomersrelatedto suppliedenergy; however,that activityhasminimal
impact on electric revenue net ofpurchasedpower expenseorBGE’s financial position.At December 31,2013,there were 73
competitive electric generation suppliersserving BGE customers. At December 31,2013,thenumber ofretailcustomerspurchasing
energy fromacompetitive electric generation supplier wasapproximately399,000,representing32%oftotal retailcustomers. Retail
deliveriespurchasedfromcompetitive electric generation suppliersrepresentedapproximately61%of BGE’s retailkWh salesfor the
year endedDecember 31,2013.
BGE is obligatedto providemarket-based SOS to all ofitselectric customers. TheSOS rateschargedrecover BGE’s wholesale
power supplycostsandincludeanadministrativefee.Theadministrativefee includesacommercial andindustrial shareholder return
component andan incremental costcomponent. Biddingto supply BGE’s market-based SOS occursthrough acompetitivebidding
process approvedbytheMDPSC. Successful bidders, which mayincludeGeneration,will execute contractswith BGE for terms of
three months or twoyears.
BGE is obligatedbytheMDPSC to provideseveral variationsof SOS to commercial andindustrial customersdependingon
customer load.
Electric Distribution Rate Cases. InDecember 2010,theMDPSC issuedan abbreviatedelectric rate order authorizing BGE to
increase electric distribution ratesfor service renderedon or after December 4, 2010 by no more than $31 million.InMarch 2011,
theMDPSC issuedacomprehensive rate order settingforththedetailsofthedecision containedinitsabbreviatedcombinedelectric
andgas distribution rate order issuedinDecember 2010.Aspart oftheMarch 2011 comprehensive rate order, BGE wasauthorized
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