Exelon 2014 Annual Report Download - page 89

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012. The increase in Net income was driven primarily by
lower Operating and maintenance expense partially offset by an increase in income taxes.
Operating Revenue Net of Purchased Power and Fuel Expense
Electric and gas revenue and purchased power and fuel expense are affected by fluctuations in commodity procurement costs.
PECO’s electric supply and natural gas cost rates charged to customers are subject to adjustments at least quarterly that are
designed to recover or refund the difference between the actual cost of electric supply and natural gas and the amount included in
rates in accordance with the PAPUC’s GSA and PGC, respectively. Therefore, fluctuations in electric supply and natural gas
procurement costs have no impact on electric and gas revenue net of purchased power and fuel expense.
Electric and gas revenue and purchased power and fuel expense are also affected by fluctuations in participation in the Customer
Choice Program. All PECO customers have the choice to purchase electricity and gas from competitive electric generation and
natural gas suppliers, respectively. The customer’s choice of suppliers does not impact the volume of deliveries, but affects revenue
collected from customers related to supplied energy and natural gas service. Customer Choice Program activity has no impact on
electric and gas revenue net of purchase power and fuel expense. The number of retail customers purchasing energy from a
competitive electric generation supplier was 546,900, 531,500, and 496,500 at December 31, 2014, 2013 and 2012, respectively.
Retail deliveries purchased from competitive electric generation suppliers represented 70%, 68%, and 66% of PECO’s retail kWh
sales for the years ended December 31, 2014, 2013 and 2012, respectively. The number of retail customers purchasing natural gas
from a competitive natural gas supplier was 78,400, 66,400, and 52,700 at December 31, 2014, 2013 and 2012, respectively. Retail
deliveries purchased from competitive natural gas suppliers represented 22%, 19%, and 16% of PECO’s mmcf sales for the years
ended December 31, 2014, 2013 and 2012, respectively.
The changes in PECO’s Operating revenue net of purchased power and fuel expense for the year ended December 31, 2014
compared to the same period in 2013 consisted of the following:
Increase
Electric Gas Total
Weather ................................................................................... $(15) $ 13 $ (2)
Volume .................................................................................... 2 5 7
Pricing ..................................................................................... (1) (3) (4)
Regulatory required programs ................................................................. 33 — 33
Other ...................................................................................... (1) — (1)
Total increase .............................................................................. $18 $ 15 $33
Weather
The demand for electricity and gas is affected by weather conditions. With respect to the electric business, very warm weather in
summer months and, with respect to the electric and gas businesses, very cold weather in winter months are referred to as
“favorable weather conditions” because these weather conditions result in increased deliveries of electricity and gas. Conversely,
mild weather reduces demand. Operating revenue net of purchased power and fuel expense was lower due to the impact of
unfavorable 2014 summer and fourth quarter weather conditions, partially offset by the impact of favorable first quarter 2014 winter
weather conditions in PECO’s service territory.
Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or
business. Normal weather is determined based on historical average heating and cooling degree days for a 30-year period in
PECO’s service territory. The changes in heating and cooling degree days in PECO’s service territory for the year ended
December 31, 2014 compared to the same period in 2013 and normal weather consisted of the following:
Twelve Months Ended December 31, % Change
Heating and Cooling Degree-Days 2014 2013 Normal From 2013 From Normal
Heating Degree-Days .......................... 4,749 4,474 4,603 6.1% 3.2%
Cooling Degree-Days ........................... 1,311 1,411 1,301 (7.1)% 0.8%
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