Exelon 2014 Annual Report Download - page 23

PECO
PECO is engaged principally in the purchase and regulated retail sale of electricity and the provision of electricity transmission and
distribution services to retail customers in southeastern Pennsylvania, including the City of Philadelphia, as well as the purchase and
regulated retail sale of natural gas and the provision of gas distribution services to retail customers in the Pennsylvania counties
surrounding the City of Philadelphia. PECO is a public utility under the Pennsylvania Public Utility Code subject to regulation by the
PAPUC as to electric and gas distribution rates and service, the issuances of certain securities and certain other aspects of PECO’s
operations. PECO is a public utility under the Federal Power Act subject to regulation by FERC as to transmission rates and certain
other aspects of PECO’s business and by the U.S. Department of Transportation as to pipeline safety and other areas of gas
operations. Specific operations of PECO are subject to the jurisdiction of various other Federal, state, regional and local agencies.
Additionally, PECO is also subject to NERC mandatory reliability standards.
PECO’s combined electric and natural gas retail service territory has an area of approximately 2,100 square miles and an estimated
population of 4.0 million. PECO provides electric distribution service in an area of approximately 1,900 square miles, with a
population of approximately 4.0 million, including approximately 1.6 million in the City of Philadelphia. PECO provides natural gas
distribution service in an area of approximately 1,900 square miles in southeastern Pennsylvania adjacent to the City of Philadelphia,
with a population of approximately 2.4 million. PECO delivers electricity to approximately 1.6 million customers and natural gas to
approximately 506,000 customers.
PECO has the necessary authorizations to provide regulated electric and natural gas distribution service in the various municipalities
or territories in which it now supplies such services. PECO’s authorizations consist of charter rights and certificates of public
convenience issued by the PAPUC and/or “grandfathered rights,” with all of such rights generally unlimited as to time and generally
exclusive from competition from other electric and natural gas utilities. In a few defined municipalities, PECO’s natural gas service
territory authorizations overlap with that of another natural gas utility; however, PECO does not consider those situations as posing a
material competitive or financial threat.
PECO’s kWh sales and peak electricity load are generally higher during the summer and winter months, when temperature extremes
create demand for either summer cooling or winter heating. PECO’s highest peak load occurred on July 22, 2011 and was 8,983
MW; its highest peak load during winter months occurred on January 7, 2014 and was 7,166 MW.
PECO’s natural gas sales are generally higher during the winter months when cold temperatures create demand for winter heating.
PECO’s highest daily natural gas send out occurred on January 7, 2014 and was 760 mmcf.
Retail Electric Services
PECO’s retail electric sales and distribution service revenues are derived pursuant to rates regulated by the PAPUC. Pennsylvania
permits competition by competitive electric generation suppliers for the supply of retail electricity while retail transmission and
distribution service remains regulated under the Competition Act. At December 31, 2014, there were 101 competitive electric
generation suppliers serving PECO customers. At December 31, 2014, the number of retail customers purchasing energy from a
competitive electric generation supplier was 546,900 representing approximately 34% of total retail customers. Retail deliveries
purchased from competitive electric generation suppliers represented approximately 70% of PECO’s retail kWh sales for the year
ended December 31, 2014. Customers that choose a competitive electric generation supplier are not subject to rates for PECO’s
electric supply procurement costs and retail transmission service charges. PECO presents on customer bills its electric supply Price
to Compare, which is updated quarterly, to assist customers with the evaluation of offers from competitive electric generation
suppliers.
Customer choice program activity affects revenue collected from customers related to supplied energy; however, that activity has no
impact on PECO’s electric revenue net of purchased power expense or financial position. PECO’s cost of electric supply is passed
directly through to default service customers without markup and those rates are subject to adjustment at least quarterly to recover
or refund the difference between PECO’s actual cost of electricity delivered and the amount included in rates through the GSA. For
those customers that choose a competitive electric generation supplier, PECO acts as the billing agent but does not record revenue
or purchased power expense related to this electric supply. PECO remains the distribution service provider for all customers in its
service territory and charges a regulated rate for distribution service.
See Note 24—Segment Information of the Combined Notes to Consolidated Financial Statements for additional information on
revenues from external customers, net income and total assets.
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