Exelon 2015 Annual Report Download - page 267

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
incremental annual program energy savings requirement of 2% of energy delivered in the year commencing June 1, 2015 and each year thereafter.
Additionally, during the ten-year period that began June 1, 2008, electric utilities must implement cost-effective demand response measures to
reduce peak demand by 0.1% over the prior year for eligible retail customers. The energy efficiency and demand response goals are subject to
rate impact caps each year. Utilities are allowed recovery of costs for energy efficiency and demand response programs, subject to approval by
the ICC. In January 2014, the ICC approved ComEd’s third three-year Energy Efficiency and Demand Response Plan covering the period June
2014 through May 2017. The plans are designed to meet Illinois’ energy efficiency and demand response goals through May 2017, including
reductions in delivered energy to all retail customers and in the peak demand of eligible retail customers.
EIMA provides for additional energy efficiency in Illinois. Starting in the June 2013 through May 2014 period and occurring annually
thereafter, as part of the IPA procurement plan, ComEd is to include cost-effective expansion of current energy efficiency programs, and additional
new cost-effective and/or third-party energy efficiency programs that are identified through a request for proposal process. All cost-effective energy
efficiency programs are included in the IPA procurement plan for consideration of implementation. While these programs are monitored separately
from the Energy Efficiency Portfolio Standard (EEPS), funds for both the EEPS portfolio and IPA energy efficiency programs are collected under
the same rider.
Illinois utilities are required to procure cost-effective renewable energy resources in amounts that equal or exceed 2% of the total electricity
that each electric utility supplies to its eligible retail customers. ComEd is also required to acquire amounts of renewable energy resources that will
cumulatively increase this percentage to at least 10% by June 1, 2015, with an ultimate target of at least 25% by June 1, 2025. All goals are
subject to rate impact criteria set forth by Illinois legislation. As of December 31, 2015, ComEd had purchased sufficient renewable energy
resources or equivalents, such as RECs, to comply with the Illinois legislation. ComEd currently retires all RECs upon transfer and acceptance.
ComEd is permitted to recover procurement costs of RECs from retail customers without mark-up through rates.
Pennsylvania Regulatory Matters
2015 Pennsylvania Electric Distribution Rate Case (Exelon and PECO). On March 27, 2015, PECO filed a petition with the PAPUC
requesting an increase of $190 million to its annual service revenues for electric delivery, which requested an ROE of 10.95%. On September 10,
2015, PECO and interested parties filed with the PAPUC a petition for joint settlement for an increase of $127 million in annual distribution service
revenue. No overall ROE was specified in the settlement. On December 17, 2015, the PAPUC approved the settlement of PECO’s electric
distribution rate case. The approved electric delivery rates became effective on January 1, 2016.
The settlement includes approval of the In-Program Arrearage Forgiveness (“IPAF”) Program, which provides for forgiveness of a portion of
the eligible arrearage balance of its low-income Customer Assistance Program (CAP) accounts receivable that will be determined as of program
inception in October 2016. The forgiveness will be granted to the extent CAP customers remain current with payments. The Settlement guarantees
PECO’s recovery of two-thirds of the arrearage balance through a combination of customer payments and rate recovery, including through future
rates cases if necessary. The remaining one-third of the arrearage balance will be absorbed by PECO, of which a portion has already been
expensed as bad debt for CAP customer’s accounts receivable balances.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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