ComEd 2013 Annual Report Download - page 48

Nuclear Uprate Program. Generation is engagedinindividual projectsaspart ofa plannedpower uprate programacross its
nuclear fleet.When economicallyviable,the projectstakeadvantageofnewproduction andmeasurement technologies, new
materialsandapplication ofexpertisegainedfromahalf-centuryofnuclear power operations. Basedon ongoingreviews, the
nuclear uprate implementation plan wasadjustedduring2013 to cancel certain projects. TheMeasurement UncertaintyRecapture
uprate projectsat theDresden andQuadCitiesnuclear stationswere cancelledasaresult ofthecostofadditional plant
modificationsidentifiedduringfinal designwork which, when combinedwiththen current market conditions, madethe projectsnot
economicallyviable.Additionally, themarket conditionspromptedGeneration to cancel the previouslydeferredextendedpower
uprate projectsat theLaSalle and Limerick nuclear stations. During2013,Generation recordeda pre-taxcharge to operatingand
maintenanceexpenseandinterestexpenseofapproximately$111 million and$8million,respectively, to accrue remainingcosts
andreversethe previouslycapitalizedcosts.
Under thenuclear uprate program, Generation hasplacedinto service projectsrepresenting316 MWs ofnewnuclear generation at
acostof $952million, which hasbeen capitalizedto property, plant andequipment on Exelon’s andGeneration’s consolidated
balancesheets. At December 31,2013,Generation hascapitalized$203 million to construction workin progress within property,
plant andequipment for nuclear uprate projectsexpectedto be placedinserviceby theendof2016, consistingof200 MWs ofnew
nuclear generation,that are intheinstallation phaseacross four nuclear stations; Peach BottominPennsylvaniaandByron,
BraidwoodandDresden inIllinois. Theremainingspendassociatedwiththese projectsisexpectedto be approximately$300 million
through theendof2016. Generation believesthat itis probable that these projectswill becompleted. If a projectis expectednot to
becompletedasplanned, previouslycapitalizedcostswill bereversedthrough earnings asacharge to operatingandmaintenance
expenseandinterest.
Liquidity
Each oftheRegistrantsannuallyevaluatesitsfinancingplan, dividendpracticesandcreditline sizing, focusingon maintainingits
investment grade ratings while meetingitscash needs to fundcapital requirements, retire debt,pay dividends, fundpension and
other postretirement benefitobligationsandinvestinnewandexistingventures. TheRegistrantsexpectcash flows to besufficient to
meet operatingexpenses, financingcostsandcapital expenditure requirements.
Exelon,Generation,ComEd, PECO and BGE haveunsecuredsyndicatedrevolvingcreditfacilitieswithaggregate bank
commitmentsof$0.5 billion, $5.3billion,$1.0billion,$0.6 billion and$0.6 billion,respectively. Generation alsohasbilateral credit
facilitieswithaggregate maximumavailabilityof$0.4 billion.
Exposure to Worldwide Financial Markets. Exelon hasexposure to worldwidefinancial markets. TheongoingEuropean debt
crisis hascontributedto theinstabilityinglobal creditmarkets. Further disruptionsintheEuropean marketscouldreduceorrestrict
theRegistrants’ abilityto secure sufficient liquidityor secure liquidityat reasonable terms. AsofDecember 31,2013,approximately
30%, or $2.5 billion,oftheRegistrants’ aggregate total commitmentswere withEuropean banks. Thecreditfacilitiesinclude$8.4
billion inaggregate total commitmentsof which $6.6 billion wasavailable asofDecember 31,2013.There were no borrowings under
theRegistrants’ creditfacilitiesasofDecember 31,2013.See Note 13—DebtandCreditAgreementsoftheCombinedNotesto the
ConsolidatedFinancial Statementsfor additional information on thecreditfacilities.
February 5, 2014 Winter Ice Storm. OnFebruary5,2014, awinter storm which broughtamix ofsnow, iceandfreezingraintothe
region interruptedelectric servicedeliveryto nearly715,000 customersinPECO’s service territory. Restoration effortsare continuing
andwill includesignificant costsassociatedwithemployee overtime,support fromother utilitiesandincremental equipment,
contractedtree trimmingcrews andsupplies. PECO estimatesthat restoration effortswill result in$60million to $80million of
incremental operatingandmaintenanceexpenseand$30 million to $40million ofincremental capital expendituresfor thefirst
quarter of2014.
Tax Matters
See Note 14—IncomeTaxesoftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information.
Environmental Legislative and Regulatory Developments.
Exelon supportsthe promulgation ofcertainenvironmental regulationsbytheU.S. EPA,includingair,water andwaste controlsfor
electric generatingunits. See discussion belowfor further details. Theairandwaste regulationswill haveadisproportionate adverse
impactonfossil-fuel power plants, requiring significant expendituresofcapital andvariable operatingandmaintenanceexpense,and
will likelyresult inthe retirement ofolder,marginal facilities. Due to theirlowemission generation portfolios, Generation and CENG
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