Exelon 2014 Annual Report Download - page 119

Generation
The following tables provide information on Generation’s credit exposure for all derivative instruments, normal purchase normal
sales agreements, and applicable payables and receivables, net of collateral and instruments that are subject to master netting
agreements, as of December 31, 2014. The tables further delineate that exposure by credit rating of the counterparties and provide
guidance on the concentration of credit risk to individual counterparties and an indication of the duration of a company’s credit risk by
credit rating of the counterparties. The figures in the tables below exclude credit risk exposure from individual retail customers,
uranium procurement contracts and exposure through RTOs, ISOs, NYMEX, ICE, and Nodal commodity exchanges, which are
discussed below. Additionally, the figures in the tables below exclude exposures with affiliates, including net receivables with
ComEd, PECO and BGE of $43 million, $29 million and $40 million, respectively. See Note 25—Related Party Transactions of the
Combined Notes to Consolidated Financial Statements for additional information.
Rating as of December 31, 2014
Total
Exposure
Before Credit
Collateral
Credit
Collateral (a)
Net
Exposure
Number of
Counterparties
Greater than 10%
of Net Exposure
Net Exposure of
Counterparties
Greater than 10%
of Net Exposure
Investment grade ................................ $1,629 $ 62 $1,567 1 $452
Non-investment grade ............................ 49 19 30 — —
No external ratings
Internally rated—investment grade .............. 479 — 479 — —
Internally rated—non-investment grade .......... 60 4 56 — —
Total .......................................... $2,217 $ 85 $2,132 1 $452
Maturity of Credit Risk Exposure
Rating as of December 31, 2014
Less than
2 Years
2-5
Years
Exposure
Greater than
5 Years
Total Exposure
Before Credit
Collateral
Investment grade ..................................................... $1,196 $379 $ 54 $1,629
Non-investment grade ................................................. 35 11 3 49
No external ratings
Internally rated—investment grade ................................... 388 90 1 479
Internally rated—non-investment grade ............................... 60 — — 60
Total ............................................................... $1,679 $480 $ 58 $2,217
Net Credit Exposure by Type of Counterparty
As of
December 31,
2014
Financial institutions ................................................................................. $ 295
Investor-owned utilities, marketers, power producers ...................................................... 958
Energy cooperatives and municipalities ................................................................. 862
Other ............................................................................................. 17
Total ............................................................................................. $2,132
(a) As of December 31, 2014, credit collateral held from counterparties where Generation had credit exposure included $69 million of cash and $16 million of letters of
credit.
ComEd
Credit risk for ComEd is managed by credit and collection policies, which are consistent with state regulatory requirements. ComEd
is currently obligated to provide service to all electric customers within its franchised territory. ComEd records a provision for
uncollectible accounts, based upon historical experience, to provide for the potential loss from nonpayment by these customers. See
Note 1—Significant Accounting Policies of the Combined Notes to Consolidated Financial Statements for the allowance for
uncollectible accounts policy. ComEd is permitted to recover its costs of procuring energy through the Illinois Settlement Legislation
as well as the ICC-approved procurement tariffs. ComEd will monitor nonpayment from customers and will make any necessary
adjustments to the provision for uncollectible accounts. The Illinois Settlement Legislation prohibits utilities, including ComEd, from
terminating electric service to a residential electric space heat customer due to nonpayment between December 1 of any year
through March 1 of the following year. ComEd’s ability to disconnect non space-heating residential customers is also impacted by
115