Exelon 2014 Annual Report Download - page 235

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
calculation performed by the NRC, it was found that the parent company guarantee was no longer required and thus the parent
guarantee for Limerick Unit 1 will be cancelled effective March 13, 2015. See Note 3—Regulatory Matters for additional information
regarding the operating license extension for Limerick Unit 1.
Generation will file its next biennial decommissioning funding status report with the NRC on or before March 31, 2015. That report
will reflect the status of decommissioning funding assurance as of December 31, 2014. Due to increased cost estimates received in
the second half of 2014, Braidwood Unit 1, Braidwood Unit 2, and Byron Unit 2 do not have adequate funding assurance based on
the most recent calculations as of December 31, 2014. NRC guidance provides licensees with two years or by the time of submitting
the next biennial report (on or before March 31, 2017) to resolve funding assurance shortfalls. During this period, Generation will
monitor funding assurance and new developments, including the impact of a 20-year license renewal for Braidwood and Byron, to
assess the status of funding assurance and to take steps, if necessary, to address any funding shortfall on these funds on or before
March 31, 2017.
On January 31, 2013, Generation received a letter from the NRC indicating that the NRC has identified potential “apparent
violations” of its regulations because of alleged inaccuracies in the Decommissioning Funding Status reports for 2005, 2006, 2007,
and 2009. The NRC asserted that Generation’s status reports deliberately reflected cost estimates for decommissioning its nuclear
plants that were less than what the NRC says are the minimum amounts required by NRC regulations. The January 31, 2013 letter
from the NRC does not take issue with Generation’s current funding status, and as reflected in Generation’s April 1, 2013
decommissioning funding status report referenced above, Generation continues to provide adequate funding assurance for each of
its units. Generation met with the NRC on April 30, 2013 for a pre-decisional enforcement conference to provide additional
information to explain why Generation believes that it complied with the regulatory requirements and did not deliberately or otherwise
provide incomplete or inaccurate information in its decommissioning funding status reports. On May 1, 2014, the NRC issued its final
determination. Although the NRC determined that these historical status reports did not provide complete and accurate information,
the violation of the regulatory requirements was not a deliberate violation. The NRC noted the low safety significance and
Generation’s corrective actions to satisfy the NRC Staff’s expectations and issued a Severity Level IV violation, with no monetary
penalty. A Severity Level IV violation is the lowest level of violation.
In addition, on June 24, 2013, Exelon received a subpoena from the SEC requesting that Exelon provide the SEC with certain
documents generally relating to Exelon and Generation’s reporting and funding of the future decommissioning of Generation’s
nuclear power plants. Exelon and Generation have cooperated with the SEC and provided the requested documents. On
February 13, 2014, Exelon received a letter from the SEC confirming that it had concluded its investigation and that no further action
was anticipated based on information provided by Exelon.
As the future values of trust funds change due to market conditions, the NRC minimum funding status of Generation’s units will
change. In addition, if changes occur to the regulatory agreement with the PAPUC that currently allows amounts to be collected from
PECO customers for decommissioning the former PECO units, the NRC minimum funding status of those plants could change at
subsequent NRC filing dates.
Non-Nuclear Asset Retirement Obligations
Generation has AROs for plant closure costs associated with its fossil and renewable generating facilities, including asbestos
abatement, removal of certain storage tanks, restoring leased land to the condition it was in prior to construction of renewable
generating stations and other decommissioning-related activities. ComEd, PECO and BGE have AROs primarily associated with the
abatement and disposal of equipment and buildings contaminated with asbestos and PCBs. See Note 1—Significant Accounting
Policies for additional information on the Registrants’ accounting policy for AROs.
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