Exelon 2015 Annual Report Download - page 34

Table of Contents
Global Climate Change
Exelon believes the evidence of global climate change is compelling and that the energy industry, though not alone, is a significant
contributor to the human-caused emissions of GHGs that many in the scientific community believe contribute to global climate change, and as
reported by the Intergovernmental Panel on Climate Change in their Fifth Assessment Report Summary for Policy Makers issued in September
2013. Exelon, as a producer of electricity from predominantly low-carbon generating facilities (such as nuclear, hydroelectric, wind and solar
photovoltaic), has a relatively small GHG emission profile, or carbon footprint, compared to other domestic generators of electricity. By virtue of its
significant investment in low-carbon intensity assets, Generation’s emission intensity, or rate of carbon dioxide equivalent (CO2e) emitted per unit
of electricity generated, is among the lowest in the industry. Exelon does produce GHG emissions, primarily at its natural gas-fired generating
plants; CO2, methane and nitrous oxide are all emitted in this process, with CO2 representing the largest portion of these GHG emissions. GHG
emissions from combustion of fossil fuels represent the majority of Exelon’s direct GHG emissions in 2015, although only a small portion of
Exelon’s electric supply is from fossil generating plants. Other GHG emission sources at Exelon include natural gas (methane) leakage on the
natural gas systems, sulfur hexafluoride (SF6) leakage in its electric transmission and distribution operations and refrigerant leakage from its
chilling and cooling equipment as well as fossil fuel combustion in its motor vehicles and fossil fuel generation of electricity used to power its
facilities. Despite its focus on low-carbon generation, Exelon believes its operations could be significantly affected by the possible physical risks
of climate change and by mandatory programs to reduce GHG emissions. See ITEM 1A. RISK FACTORS for information regarding the market and
financial, regulatory and legislative, and operational risks associated with climate change.
Climate Change Regulation. Exelon is, or may become, subject to climate change regulation or legislation at the Federal, regional and
state levels.
 At the international level, the United States is a Party to the United Nations Framework Convention
on Climate Change (UNFCCC). The Parties to the UNFCCC adopted the Paris Agreement at the 21 session of the UNFCCC Conference of the
Parties (COP 21) on December 12, 2015. The Paris Agreement defines the UNFCCC’s objective of limiting the global temperature increase to
1.5°C above pre-industrial levels. All Parties are required to develop their own national emission reductions and to update those reductions at least
every five years. The Developed Country Parties, including the United States, are required to take the lead by undertaking economy-wide absolute
emission reduction targets. The United States had previously submitted its national emission reductions to achieve a 2020 target of reducing net
emissions in the range of 17% below the 2005 level and to achieve net greenhouse gas emission reductions of 26%—28% below the 2005 level by
2025. The United States has indicated that it intends to achieve these reductions through a variety of mechanisms, including regulations to cut
carbon pollution from new and existing power plants. The Paris Agreement will enter into force on the thirtieth day after the date on which at least
55 Parties accounting for at least an estimated 55% of total global greenhouse gas emissions have ratified the Agreement.
 It is highly uncertain that Federal legislation to reduce GHG emissions will be enacted. If
such legislation is adopted, Exelon may incur costs either to further limit or offset the GHG emissions from its operations or to procure emission
allowances or credits. In June 2013, the White House released the President’s Climate Action Plan which consists of a wide variety of executive
actions targeting GHG reductions, preparing for the impacts of climate change and showing leadership internationally; but the plan did not directly
trigger any new requirements or legislative action.
The EPA is addressing the issue of carbon dioxide (CO ) emissions regulation for new and existing electric generating units through the New
Source Performance Standards (NSPS) under
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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