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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ÈANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the Fiscal Year Ended December 31, 2006

‘TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File

Number

Name of Registrant; State of Incorporation; Address of

Principal Executive Offices; and Telephone Number

IRS Employer

Identification Number

1-16169 EXELON CORPORATION

(a Pennsylvania corporation)

10 South Dearborn Street

P.O. Box 805379

Chicago, Illinois 60680-5379

(312) 394-7398

23-2990190

333-85496 EXELON GENERATION COMPANY, LLC

(a Pennsylvania limited liability company)

300 Exelon Way

Kennett Square, Pennsylvania 19348

(610) 765-5959

23-3064219

1-1839 COMMONWEALTH EDISON COMPANY

(an Illinois corporation)

440 South LaSalle Street

Chicago, Illinois 60605-1028

(312) 394-4321

36-0938600

000-16844 PECO ENERGY COMPANY

(a Pennsylvania corporation)

P.O. Box 8699

2301 Market Street

Philadelphia, Pennsylvania 19101-8699

(215) 841-4000

23-0970240

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on

Which Registered

EXELON CORPORATION:

Common Stock, without par value New York, Chicago and

Philadelphia

PECO ENERGY COMPANY:

Cumulative Preferred Stock, without par value: $4.68 Series, $4.40 Series, $4.30

Series and $3.80 Series

New York

Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38%

Cumulative Preferred Security, Series D, $25 stated value, issued by PECO

Energy Capital, L.P. and unconditionally guaranteed by PECO Energy Company

New York

Securities registered pursuant to Section 12(g) of the Act:

COMMONWEALTH EDISON COMPANY:

Common Stock Purchase Warrants, 1971 Warrants and Series B Warrants

Page 1
... of Registrant; State of Incorporation; Address of Principal Executive Offices; and Telephone Number IRS Employer Identification Number Commission File Number 1-16169 EXELON CORPORATION (a Pennsylvania corporation) 23-2990190 10 South Dearborn Street P.O. Box 805379 Chicago, Illinois 60680-5379...

Page 2
... 30, 2006, was as follows: Exelon Corporation Common Stock, without par value Exelon Generation Company, LLC Commonwealth Edison Company Common Stock, $12.50 par value PECO Energy Company Common Stock, without par value $38,019,493,399 Not applicable No established market None The number of shares...

Page 3
... ...Commonwealth Edison Company ...PECO Energy Company ...Employees ...Environmental Regulation ...Managing the Risks in the Business ...Executive Officers of the Registrants ...RISK FACTORS ...Exelon Corporation ...Exelon Generation Company, LLC ...Commonwealth Edison Company ...PECO Energy Company...

Page 4
... Events ...CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ...CONTROLS AND PROCEDURES ...Exelon Corporation ...Exelon Generation Company, LLC ...Commonwealth Edison Company ...PECO Energy Company ...OTHER INFORMATION ...DIRECTORS, EXECUTIVE OFFICERS OF THE...

Page 5
Page No. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES ... 379 397 397 398 399 400 401 SIGNATURES ...Exelon Corporation ...Exelon Generation Company, LLC ...Commonwealth Edison Company ...PECO Energy Company ...CERTIFICATION EXHIBITS ... iii

Page 6
...combined Form 10-K is being filed separately by Exelon Corporation (Exelon), Exelon Generation Company, LLC (Generation), Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO) (collectively, the Registrants). Information contained herein relating to any individual registrant is filed by...

Page 7
... corporation named Commonwealth Edison Company, which was incorporated in 1907. ComEd's principal executive offices are located at 440 South LaSalle Street, Chicago, Illinois 60605, and its telephone number is 312-394-4321. PECO PECO's energy delivery business consists of the purchase and regulated...

Page 8
..., ICC-approved standardized supplier forward contracts with ComEd and Ameren Corporation (Ameren). In addition, Power Team markets energy in the wholesale bilateral and spot markets. Generation's retail business provides retail electric and gas services as an unregulated retail energy supplier in...

Page 9
... of the United States. The generating capacity that Generation controls through long-term contracts is in the Midwest, Southeast and South Central regions. Nuclear Facilities Generation has ownership interests in eleven nuclear generating stations currently in service, consisting of 19 units with 16...

Page 10
... total electric supply which also includes MWs purchased for resale and fossil and hydroelectric generation. During 2006 and 2005, the nuclear generating facilities operated by Generation achieved a 93.9% and 93.5% capacity factor, respectively. Regulation of Nuclear Power Generation. Generation is...

Page 11
... Island (c) ...(a) (b) (c) (d) (e) Stations previously owned by ComEd. Stations previously owned by PECO. Stations owned by AmerGen. NRC license renewals have been received for these units. Denotes year in which nuclear unit began commercial operations. 1 2 1 2 1 2 3 1 2 1 2 1 2 3 1 2 1 2 1 1988...

Page 12
... fuel storage claims and issues. The Standard Contracts with the DOE also required the payment to the DOE of a one-time fee applicable to nuclear generation through April 6, 1983. The fee related to the former PECO units has been paid. Pursuant to the Standard Contracts, ComEd previously elected to...

Page 13
... current ICC order, ComEd is not permitted to collect amounts for decommissioning subsequent to 2006. Nuclear decommissioning costs associated with the nuclear generating stations formerly or partly owned by PECO continue to be recovered currently through rates charged by PECO to customers. Amounts...

Page 14
...'s power marketing activities. For additional information regarding Generation's electric generating facilities, see ITEM 2. Properties-Generation. Licenses. Fossil generation plants are generally not licensed and, therefore, the decision on when to retire plants is, fundamentally, a commercial one...

Page 15
...and transmission of electricity. Open-Access Transmission tariffs established under FERC regulation give Generation access to transmission lines that enable it to participate in competitive wholesale markets. Because Generation sells power in the wholesale markets, Generation is a public utility for...

Page 16
...-Based Rates Matters Currently, Exelon's entities have been approved by FERC to sell power at market-based rates. On May 19, 2006, FERC issued a Notice of Proposed Rule Making (NOPR) on Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities...

Page 17
... Market-Based Rates Matters and its impact on the Registrants. PJM Reliability Pricing Model (RPM) On August 31, 2005, PJM filed its RPM with FERC to replace its current capacity market rules. The RPM proposal provided for a forward capacity auction using a demand curve and locational deliverability...

Page 18
...capacity not used to meet customer demand, in the wholesale electricity markets. Generation has also purchased transmission service to ensure that it has reliable transmission capacity to physically move its power supplies to meet customer delivery needs. Power Team also manages the price and supply...

Page 19
... marketing activities. Power Team also uses financial and commodity contracts for proprietary trading purposes but this activity accounts for only a small portion of Power Team's efforts. At December 31, 2006, Generation's long-term commitments relating to the purchase and sale of energy, capacity...

Page 20
ComEd and PECO Exelon's regulated energy delivery operations consist of ComEd and PECO. ComEd is engaged principally in the purchase and regulated retail and wholesale sale of electricity and the provision of distribution and transmission services to a diverse base of residential, commercial, ...

Page 21
...purchase option (PPO) that is based on market-based rates. As of December 31, 2006, one competitive electric generation supplier had been granted approval by the ICC to serve residential customers in Illinois; however, it is not currently supplying electricity to any of ComEd's residential customers...

Page 22
.... PECO. Under the Pennsylvania Electricity Generation Customer Choice and Competition Act (Competition Act), all of PECO's retail electric customers have the right to choose their generation suppliers. At December 31, 2006, less than 1% of each of PECO's residential and large commercial 17

Page 23
... commercial and industrial load were purchasing generation service from competitive electric generation suppliers. Customers who purchase electricity from a competitive electric generation supplier continue to pay a delivery charge to PECO. In addition to retail competition for generation services...

Page 24
... transmission facilities, are required to provide open access to their transmission facilities under filed tariffs at cost-based rates. Under FERC's Order No. 889, ComEd and PECO are required to comply with FERC's Standards of Conduct regulation, as amended, governing the communication of non-public...

Page 25
... rate regulation. PECO also provides billing, metering, installation, maintenance and emergency response services. PECO's natural gas supply is provided by purchases from a number of suppliers for terms of up to three years. These purchases are delivered under long-term firm transportation contracts...

Page 26
...Board ruled that a new election must be conducted. This election took place on November 16, 2006. The employees again voted against union representation. Environmental Regulation General Exelon, Generation, ComEd and PECO are subject to regulation regarding environmental matters by the United States...

Page 27
...line at the Braidwood Nuclear Generating Station. On March 16, 2006, the Attorney General of the State of Illinois, and the State's Attorney for Will County, Illinois filed...NPL). These potentially responsible parties (PRPs) can be ordered to perform a cleanup, can be sued for costs associated with an...

Page 28
... or third party. MGP Sites MGPs manufactured gas in Illinois and Pennsylvania from approximately 1850 to the 1950s. ComEd and PECO generally did not operate MGPs as corporate entities but did, however, acquire MGP sites as part of the absorption of smaller utilities. ComEd and PECO have identified...

Page 29
... power plants, as it had considered in its proposed rulemaking. Generation is currently evaluating its compliance options with regard to the final CAIR and CAMR regulations. Final compliance decisions will be affected by a number of factors, including, but not limited to, the final form of state...

Page 30
... addressing climate change. Exelon believes that its planned greenhouse gas management efforts, including increased use of renewable energy, its current energy efficiency initiatives and its efforts in the areas of carbon sequestration, will allow it to achieve this goal. The anticipated cost...

Page 31
... of generation supply. During 2006, the PAPUC issued additional implementation orders and proposed regulations related to compliance schedules, banking of alternative energy credits, compliance, cost recovery, force majeure, alternative compliance payments and voluntary alternative energy purchases...

Page 32
... to aggressively manage its scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable generation base for Generation's short and long-term supply commitments and Power Team trading activities. Operating services arrangement...

Page 33
...trust funds maintained by Generation. The collections by PECO are based on estimates of decommissioning costs for each of the nuclear facilities in which Generation has an ownership interest, other than AmerGen facilities. The ICC permitted ComEd to recover $73 million per year from retail customers...

Page 34
... the delivery service rates that will be charged to customers. Appeals are pending related to each order. A third order allows ComEd's residential customers to have the choice to elect to defer any electric rate increases over 10% in each of the years 2007 to 2009. Any deferred balances will...

Page 35
... costs from customers. To effectively manage its obligation to provide power to meet its customers' demand, PECO has a full-requirements PPA with Generation which reduces PECO's exposure to the volatility of customer demand and market prices through 2010. Transmission congestion. ComEd and PECO...

Page 36
... and Public Policy Executive Vice President, Exelon, President, Exelon Energy Delivery and President, Exelon Generation Executive Vice President and Chief Human Resources Officer Executive Vice President, Finance and Markets and Chief Financial Officer Senior Vice President and Corporate Controller...

Page 37
... was Executive Vice President and Chief Financial Officer of Credit Acceptance Corporation; and Vice President, Controller of Kmart Corporation. Mr. Hilzinger was elected as an officer of Exelon effective April 15, 2002. Mr. Hilzinger was Principal Accounting Officer for ComEd and PECO through...

Page 38
...officer of PECO effective January 1, 2001. Prior to his election to his listed positions, Mr. Galvanoni was Director of Financial Reporting and Analysis, Exelon. Mr. Galvanoni has also served as Director of Accounting and Reporting, Generation; Director of Reporting, Exelon; and was a senior manager...

Page 39
... over time Exelon will shift from a company with relatively stable cash flows from its regulated affiliates to a company with cash flows that could vary significantly with changes in market prices for electricity and natural gas. Prior to 2007, Generation supplied electricity to ComEd at prices that...

Page 40
... 31, 2008. Generation's share of this supply is 35%. Because retail customers in both Pennsylvania and Illinois can switch from PECO or ComEd to a competitive electric generation supplier for their energy needs, planning to meet PECO's obligation to supply PECO with all of the energy PECO needs to...

Page 41
...lower energy sales. Each 24-day outage, depending on the capacity of the station, will decrease the total nuclear annual capacity factor between 0.3% and 0.5%. The number of refueling outages, including the AmerGen plants and the co-owned plants, was 11 in 2006 with 9 planned for 2007. The projected...

Page 42
... the Atomic Energy Act, related regulations or the terms of the licenses for nuclear facilities. A change in the Atomic Energy Act or the applicable regulations or licenses may require a substantial increase in capital expenditures or may result in increased operating or decommissioning costs and...

Page 43
...report by unit (annually for Generation's four retired units) addressing Generation's ability to meet the NRC-estimated funding levels (NRC Funding Levels) including scheduled contributions to and earnings on the decommissioning trust funds. As of December 31, 2006, Generation identified trust funds...

Page 44
... used to meet its long-term supply commitments, including its commitments to ComEd and PECO, are largely dependent on wholesale prices of electricity and Generation's ability to successfully market energy, capacity and ancillary services. The wholesale spot market price of electricity for each hour...

Page 45
... capacity at a time when those markets are weak. Generation's risk management policies cannot fully eliminate the risk associated with its energy trading activities. Power Team's power trading (including fuel procurement and power marketing) activities expose Generation to risks of commodity price...

Page 46
... plants through annual, short-term and spot-market purchases. Natural gas is procured through annual, monthly and spot-market purchases. Nuclear fuel assemblies are obtained through long-term uranium concentrate inventory and supply contracts, contracted conversion services, contracted enrichment...

Page 47
... customer rates for delivery service and procurement of electricity increased. Additionally, ComEd's residential customers have the choice to elect to defer certain increases to future periods. See Note 4 of the Combined Notes to the Consolidated Financial Statements for more information. PECO's gas...

Page 48
... costs, purchased power and potentially renewable energy credit costs and capital expenditures. ComEd and PECO continue to monitor developments related to RPSs at the Federal and state levels. For additional information, see ITEM 1. Business "Environmental Regulation-Renewable and Alternative Energy...

Page 49
... against claims by customers relating to failure of service. Under Illinois law, however, ComEd can be required to pay damages to its customers in the event of extended outages affecting large numbers of its customers. The effect of higher purchased gas cost charges to customers may decrease PECO...

Page 50
...for PECO. In addition, increased purchased gas cost charges to customers also may result in increased bad debt expense from an increase in the number of uncollectible customer balances. The effects of weather and the related impact on electricity and gas usage may decrease ComEd's and PECO's results...

Page 51
... of restructured electricity markets in public forums escalated during 2006 as retail rate freezes expired in a number of states as fuel prices increased, thereby driving up retail prices for electricity. ComEd's customers are experiencing increases in their costs for electric service beginning in...

Page 52
...of Exelon's ownership interest in ComEd; possible reductions in credit ratings which could increase borrowing costs; uncertainty in collection of receivables from ComEd for services provided by BSC; uncertainty in the enforcement of Generation's rights under its supplier forward contracts with ComEd...

Page 53
...Federal and/or state legislation to regulate carbon emissions could occur in the future. If these plans become effective, Exelon and Generation may incur costs to either further limit the emissions from certain of their fossilfuel fired facilities or in procuring emission allowance credits issued by...

Page 54
... Service (IRS), such as Exelon's decision to defer the tax gain on ComEd's 1999 sale of its fossil generating assets. The Registrants also estimate their ability to utilize tax benefits, including those in the form of carryforwards for which the benefits have already been reflected, and tax credits...

Page 55
...for state income taxes reported by Exelon on an annual basis. However, management's estimates of future income tax rates are affected by various factors and actual income tax obligations may differ from management's estimates. See Note 4 of the Combined Notes to Consolidated Financial Statements for...

Page 56
... company's business, financial condition, operating results and prospects. ITEM 1B. UNRESOLVED STAFF COMMENTS Exelon, Generation, ComEd and PECO None. ITEM 2. PROPERTIES Generation The following table sets forth Generation's owned net electric generating capacity by station at December 31, 2006...

Page 57
... Salem, capacity reflects the annual mean rating. All other stations, including Salem, reflect a summer rating. (c) All nuclear stations are boiling water reactors except Braidwood, Byron, Salem and Three Mile Island, which are pressurized water reactors. (d) Net generation capacity is stated at...

Page 58
... Generation's consolidated financial condition or results of operations. ComEd and PECO The electric substations and a portion of the transmission rights of way are located on property owned by ComEd and PECO. A significant portion of the electric transmission and distribution facilities is located...

Page 59
... storage capacity of 1,980,000 gallons and a peaking capability of 25 mmcf/day. In addition, PECO owns 29 natural gas city gate stations at various locations throughout its gas service territory. Mortgages The principal plants and properties of ComEd are subject to the lien of ComEd's Mortgage dated...

Page 60
... on a monthly basis regarding purchases made by Exelon of its common stock during the fourth quarter of 2006. Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (b) Period Total Number of Shares Purchased (a) Average Price Paid per...

Page 61
... Under applicable Federal law, Generation, ComEd and PECO can pay dividends only from retained, undistributed or current earnings. A significant loss recorded at Generation, ComEd or PECO may limit the dividends that these companies can distribute to Exelon. Under Illinois law, ComEd may not pay any...

Page 62
... the use of share repurchases from time to time, when authorized by the Board of Directors, to return cash or balance sheet capacity to Exelon shareholders after funding maintenance capital and other commitments and in the absence of higher value-added growth opportunities. Previously, Exelon had...

Page 63
...goodwill impairment charge of $776 million and $1.2 billion in 2006 and 2005, respectively. (b) Change between 2006 and 2005 was primarily due to the impact of adopting SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No...

Page 64
... Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operation included in ITEM 7 of this Report on Form 10-K. The results of operations for Generation's retail business are not included in periods prior to 2004. (in millions) 2006 For the Years...

Page 65
... to and should be read in conjunction with ComEd's Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operation included in ITEM 7 of this Report on Form 10-K. (in millions) 2006 For the Years Ended December 31, 2005 2004 2003 2002...

Page 66
... of Financial Condition and Results of Operation included in ITEM 7 of this Report on Form 10-K. (in millions) 2006 For the Years Ended December 31, 2005 2004 2003 2002 Statement of Operations data: Operating revenues ...Operating income ...Income before cumulative effect of a change in accounting...

Page 67
... contracted electric generating facilities, its wholesale energy marketing operations and competitive retail sales operations. ComEd, whose business consists of the purchase and regulated retail and wholesale sale of electricity and the provision of distribution and transmission services to retail...

Page 68
... ICC's July 2006 rate order; a charge of approximately $55 million for the write-off of capitalized costs associated with the now terminated proposed merger with PSEG; increased severance and severance-related charges; unfavorable weather conditions in the ComEd and PECO service territories; reduced...

Page 69
... assistance programs. ComEd is currently evaluating this request. This order is subject to rehearing and appeal. ComEd Rate Case-On July 26, 2006, the ICC issued its order in the Rate Case approving a revenue increase of approximately $8 million and the recovery of several items that previously...

Page 70
.... Current market prices for electricity have increased significantly over the past few years due to the rise in natural gas and fuel prices. As a result, PECO customers' generation rates are below current wholesale energy market prices and Generation's margins on sales in excess of ComEd's and PECO...

Page 71
... benefits and rising payroll costs due to inflation. Also, Exelon will continue to incur significant capital costs associated with its commitment to produce and deliver energy reliably to its customers. Increasing capital costs may include the price of uranium which fuels the nuclear facilities...

Page 72
... activities which are validated by comparison to current decommissioning projects and other third-party estimates. Decommissioning cost studies are updated, on a rotational basis, for each of Generation's nuclear units at a minimum of every five years. Cost Escalation Studies. Generation uses cost...

Page 73
... Statements for further information regarding the Rate Case. In the assessments, Exelon and ComEd estimated the fair value of the ComEd reporting unit using a probability-weighted, discounted cash flow model with multiple scenarios. The fair value incorporates management's assessment of current...

Page 74
... (Exelon, Generation, ComEd and PECO) The Registrants have a significant investment in electric generation assets and electric and natural gas transmission and distribution assets. Depreciation of these assets is generally provided over their estimated service lives on a straight-line basis using...

Page 75
...its electric and gas assets, which resulted in the implementation of new depreciation rates effective March 2006. The impact of the new rates was not material. Defined Benefit Pension and Other Postretirement Benefits (Exelon, Generation, ComEd and PECO) Exelon sponsors defined benefit pension plans...

Page 76
...8.75%, respectively, for estimating its 2007 pension costs. Additionally, Exelon will use a discount rate and expected return on plan assets of 5.85% and 7.87%, respectively, for estimating its 2007 other postretirement benefit costs. The following tables illustrate the effects of changing the major...

Page 77
...under applicable accounting standards. As these assumptions change from period to period, recorded pension and postretirement benefit amounts and funding requirements could also change. Regulatory Accounting (Exelon, ComEd and PECO) Exelon, ComEd and PECO account for their regulated electric and gas...

Page 78
also utilizes energy option contracts and energy financial swap arrangements to limit the market price risk exposure associated with forward energy commodity prices. Additionally, Generation enters into energy-related derivatives for trading purposes. ComEd has derivatives related to one wholesale ...

Page 79
... value of interest-rate swap agreements, the Registrants use external dealer prices and/or internal valuation models that utilize assumptions of available market pricing curves. Accounting for Contingencies (Exelon, Generation, ComEd and PECO) In the preparation of their financial statements, the...

Page 80
...for both open claims asserted and an estimate of claims incurred but not reported (IBNR). The IBNR reserve is estimated based on actuarial assumptions and analysis and is updated annually. Projecting future events, such as the number of new claims to be filed each year, the average cost of disposing...

Page 81
...on daily customer usage measured by generation or gas throughput volume, estimated customer usage by class, estimated losses of energy during delivery to customers and applicable customer rates. Increases in volumes delivered to the utilities' customers and favorable rate mix due to changes in usage...

Page 82
...Income. Exelon's net income for 2006 reflects higher realized prices on market sales and increased nuclear output at Generation; a one-time benefit of approximately $158 million to recover previously incurred severance costs approved by the December 2006 amended ICC rate order; a one-time benefit of...

Page 83
... a one-time benefit of $201 million to recover certain costs approved by the ICC's July 2006 rate order and the ICC's December 2006 amended rate order; the impact of the reduction in Generation's estimated nuclear asset retirement obligation; mark-to-market gains associated with Exelon's investment...

Page 84
... service entities, including BSC, Enterprises, investments in synthetic fuelproducing facilities and intersegment eliminations. Net Income (Loss) Before Cumulative Effect of Changes in Accounting Principles by Business Segment 2006 2005 Favorable (unfavorable) variance Generation ...ComEd ...PECO...

Page 85
... expense and lower other income. The increase in Generation's revenue, net of purchased power and fuel expense was due to realized revenues associated with forward sales contracts entered into in prior periods which were recognized at higher prices, combined with lower purchased power and fuel...

Page 86
... scheduled rate increase through 2010 under PECO's 1998 restructuring settlement. This rate increase will have a favorable effect on Generation's operating income in future years. Wholesale and retail electric sales. The changes in Generation's wholesale and retail electric sales for 2006 compared...

Page 87
... including capacity, energy and fuel costs associated with tolling agreements. Generation experienced a decrease of $319 million due to lower volumes of purchased power in the market as a result of a lower demand from affiliates. Additionally, overall lower prices paid for purchased power in 2006...

Page 88
...fuel costs associated with electric sales. Average electric supply cost does not include fuel costs associated with retail gas sales. n.m. Not meaningful Nuclear fleet operating data and purchased power cost data for 2006 and 2005 were as follows: 2006 2005 Nuclear fleet capacity factor ...Nuclear...

Page 89
... related to staff augmentation and recurring maintenance work at Nuclear and Power, a $19 million increase in nuclear refueling outage costs associated with the additional planned refueling outage days during 2006 as compared to 2005, and higher costs for inspection and maintenance activities...

Page 90
...) Net Loss. ComEd's decreased net loss in 2006 compared to 2005 was driven by a smaller impairment of goodwill in 2006, lower purchased power expense and one-time benefits associated with reversing previously incurred expenses as a result of the July 2006 and December 2006 ICC rate orders as more...

Page 91
... the volume of deliveries, but affects revenue collected from customers related to supplied energy and generation service. As of December 31, 2006, one competitive electric generation supplier had been granted approval to serve residential customers in the ComEd service territory. However, they are...

Page 92
... conditions in the ComEd service territory relative to the prior year. Customer choice. The decrease in purchased power expense from customer choice was primarily due to more ComEd non-residential customers electing to purchase energy from a competitive electric generation supplier. PJM transmission...

Page 93
... 2006 ICC rate order and the December 2006 ICC order on rehearing, ComEd recorded one-time benefits associated with reversing previously incurred expenses, including MGP costs, severance costs and procurement case costs. See Notes 4 and 18 of the Combined Notes to Consolidated Financial Statements...

Page 94
... of receivable in 2005 ...Loss on disposition of assets and investments, net ...Other ...Increase in other, net ... $87 15 (3) (3) (4) $92 (a) As a result of the July 2006 ICC rate order, ComEd recorded a one-time benefit associated with reversing previously incurred expenses to retire debt early...

Page 95
... tariffed rates. (b) Delivery only service reflects customers electing to receive generation service from a competitive electric generation supplier. Electric Revenue 2006 2005 Variance % Change Full service (a) Residential ...Small commercial & industrial ...Large commercial & industrial ...Public...

Page 96
...an energy charge at market rates, transmission and distribution charges, and a CTC through December 2006. (c) Delivery only revenues reflect revenue under tariff rates from customers electing to receive electricity from a competitive electric generation supplier, which includes a distribution charge...

Page 97
...first quarter 2006 rates. Customer choice. All PECO customers have the choice to purchase energy from a competitive electric generation supplier. This choice does not impact the volume of deliveries, but affects revenue collected from customers related to supplied energy and generation service. PECO...

Page 98
... with customer choice reflected customers from all customer classes returning to PECO as their electric supplier as a result of rising wholesale energy prices and a number of competitive electric generation suppliers exiting the market during 2005 and 2006. Unbilled revenue-change in estimate. In...

Page 99
... as a result of rising wholesale energy prices and a number of competitive electric generation suppliers exiting the market during 2005 and 2006. PJM transmission. The increase in PJM transmission expense reflects increased peak demand and consumption by PECO-supplied customers due to load growth as...

Page 100
...higher average accounts receivable balances in 2006 compared to 2005 resulting from increased revenues; (ii) changes in PAPUC-approved regulations related to customer payment terms; and (iii) an increase in the number of low-income customers participating in customer assistance programs, which allow...

Page 101
... rates. (b) Delivery only service reflects customers receiving electric generation service from a competitive electric generation supplier. Electric Revenue 2006 2005 Variance % Change Full service Residential ...Small commercial & industrial ...Large commercial & industrial ...Public authorities...

Page 102
... Delivery only revenue reflects revenue from customers receiving generation service from a competitive electric generation supplier, which includes a distribution charge and a CTC. (c) Wholesale and miscellaneous revenues include transmission revenue from PJM and other wholesale energy sales. PECO...

Page 103
... increase in the number of customers choosing ComEd or PECO as their electric supplier and higher transmission revenues, partially offset by decreased CTC collections at ComEd. The increase in revenues from non-affiliates at Generation was primarily due to higher prices on energy sold in the market...

Page 104
...for 2004. The goodwill impairment charge increased the effective income tax rate from continuing operations by 22.3% for 2005. See Note 12 of the Combined Notes to the Consolidated Financial Statements for further discussion of the change in the effective income tax rate. Discontinued Operations. On...

Page 105
... includes corporate operations, shared service entities, including BSC, Enterprises, investments in synthetic fuelproducing facilities and intersegment eliminations. Results of Operations-Generation 2005 2004 Favorable (unfavorable) variance Operating revenues ...Operating expenses Purchased power...

Page 106
... periods in the ComEd and PECO service territories and an increase in the number of customers returning from competitive electric generation suppliers in 2005 compared to the prior year. Wholesale and retail electric sales. The changes in Generation's wholesale and retail electric sales for 2005...

Page 107
... capacity, energy and fuel costs). Generation experienced overall higher realized prices for purchased power in 2005 compared to 2004, resulting in a $654 million increase. This was offset by a decrease of $327 million due to lower volumes of purchased power in the market as a result of more demand...

Page 108
... to overall energy market conditions resulting in higher prices for raw materials (e.g., oil, natural gas and coal) used in the production of electricity. Additionally, there was an increase of $16 million related to higher nuclear and fossil generation need to meet affiliates' demand. Fuel Resale...

Page 109
... 2004 ...Tamuin International ...Accrual for estimated future asbestos-related bodily injury claims ...Nuclear operating services agreement ...Pension, payroll and benefit costs ...Boston Generating ...Decommissioning-related activity ...Other ...Increase in operating and maintenance expense ...This...

Page 110
... million realized in the second quarter of 2005 related to the decommissioning trust fund investments for the AmerGen plants, primarily associated with changes in Generation's investment strategy. Effective Income Tax Rate. The effective income tax rate from continuing operations was 39.0% for 2005...

Page 111
... demand for electricity is affected by weather conditions. In ComEd's service territory, cooling and heating degree days were 90% and 1% higher, respectively, than the prior year. Customer choice. All ComEd customers have the choice to purchase energy from a competitive electric generation supplier...

Page 112
... conditions in the ComEd service territory, which increased the amount of electricity sold. Customer choice. The increase in purchased power expense from customer choice was primarily due to fewer ComEd non-residential customers electing to purchase energy from a competitive electric generation...

Page 113
...: Increase (decrease) Severance-related expenses (a) ...Employee fringe benefits (b) ...Pension expense and deferred compensation (c) ...Allowance for uncollectible accounts ...Injuries and damages ...Corporate allocations (b) ...Storm costs ...Contractors ...PSEG merger integration costs ...Other...

Page 114
...was received for Illinois electricity distribution taxes. Interest Expense, Net. The reduction in interest expense, net for 2005 compared to 2004 was primarily due to long-term debt retirements and prepayments in 2004 pursuant to Exelon's accelerated liability management plan and scheduled payments...

Page 115
... tariffed rates. (b) Delivery only service reflects customers electing to receive generation service from a competitive electric generation supplier. Electric Revenue 2005 2004 Variance % Change Full service Residential ...Small commercial & industrial ...Large commercial & industrial ...Public...

Page 116
... Delivery only revenues reflect revenue under tariff rates from customers electing to receive electricity from a competitive electric generation supplier, which includes a distribution charge and a CTC. Prior to ComEd's full integration into PJM on May 1, 2004, ComEd's transmission charges received...

Page 117
... average rate for 2004. Customer choice. All PECO customers have the choice to purchase energy from a competitive electric generation supplier. This choice does not impact the volume of deliveries, but affects revenue collected from customers related to supplied energy and generation service. PECO...

Page 118
...PPA with Generation. Fuel expense for gas increased due to higher gas prices. See "Operating Revenues" above. Customer choice. The increase in purchased power expense from customer choice was primarily due to a significant number of residential customers returning to PECO as their energy provider in...

Page 119
... due to increases in vegetation management services compared to the prior year at PECO. (b) Consists of salary continuance severance costs, curtailment charges for pension and other post retirement benefits, and special termination benefit charges related to other postretirement benefits. The...

Page 120
... Financial Statements for further discussion of the adoption of FIN 47. PECO Electric Operating Statistics and Revenue Detail PECO's electric sales statistics and revenue detail are as follows: Retail Deliveries-(in GWhs) 2005 2004 Variance % Change Full service (a) Residential ...Small commercial...

Page 121
... tariffed rates, which includes the cost of energy, the cost of the transmission and the distribution of the energy and a CTC. (b) Delivery only revenue reflects revenue from customers receiving generation service from a competitive electric generation supplier, which includes a distribution charge...

Page 122
... from the sale of electric energy to wholesale customers, including ComEd and PECO. Generation's future cash flows from operating activities will be affected by future demand for and market prices of energy and its ability to continue to produce and supply power at competitive costs as well as to...

Page 123
...the changes in commercial paper, income taxes and the current portion of long-term debt. The increase in cash flows from operations during 2006 was primarily the result of $2 billion of discretionary contributions to Exelon's pension plans during 2005, which was initially funded through a term loan...

Page 124
...changes in market prices relative to positions with counterparties. During 2006 and 2005, Generation had net payments of approximately $220 million and $165 million, respectively, primarily due to increased use of financial instruments to economically hedge future sales of power and future purchases...

Page 125
... and upgrades to existing facilities (including material condition improvements during nuclear refueling outages) and nuclear fuel. Generation anticipates that its capital expenditures will be funded by internally generated funds, borrowings or capital contributions from Exelon. ComEd and PECO...

Page 126
..., Exelon settled interest rate swaps for a net payment of $38 million and paid approximately $12 million of fees in connection with the debt offering. In 2005, ComEd used funding received from $324 million of commercial paper to retire long-term debt. From time to time and as market conditions...

Page 127
... Calumet), a subsidiary of Peoples Energy Corporation, were joint owners of Southeast Chicago Energy Project, LLC (SCEP), a 350-megawatt natural gas-fired, peaking electric power plant located in Chicago, Illinois, which began operation in 2002. In 2002, Generation and Peoples Calumet owned 70...

Page 128
... in other financing activities during 2006 and 2005, respectively. Credit Issues Exelon Credit Facilities Exelon meets its short-term liquidity requirements primarily through the issuance of commercial paper by the Registrants. At December 31, 2006, Exelon, Generation, ComEd and PECO have access to...

Page 129
... the agreement at the time of borrowing. In the cases of Exelon, Generation and PECO, the maximum LIBOR adder is 65 basis points; and in the case of ComEd, it is 200 basis points. The average interest rates on commercial paper in 2006 for Exelon, Generation, ComEd and PECO were approximately 5.02...

Page 130
...' securities ratings at December 31, 2006: Securities Moody's Investors Service Standard & Poor's Corporation Fitch Ratings. Exelon Generation ComEd PECO Senior unsecured debt Commercial paper Senior unsecured debt Commercial paper Senior unsecured debt Senior secured debt Commercial paper...

Page 131
... the short-term and long-term security ratings of ComEd due to perceived political risk related to the rate freeze extension proposal. S&P downgraded ComEd's senior unsecured debt to BB+, which is below investment grade. The ratings on Exelon, PECO and Generation were affirmed. The ratings for all...

Page 132
.... Under applicable law, Generation, ComEd and PECO can pay dividends only from retained, undistributed or current earnings. A significant loss recorded at Generation, ComEd or PECO may limit the dividends that these companies can distribute to Exelon. At December 31, 2006, Exelon had retained...

Page 133
... commitments represent Generation's expected payments under these arrangements at December 31, 2006. Expected payments include certain capacity charges which are contingent on plant availability. Does not include ComEd's supplier forward contracts as these contracts do not require purchases of fixed...

Page 134
... Statements for further detail on ComEd's supplier forward contracts. (c) On February 20, 2003, ComEd entered into separate agreements with Chicago and with Midwest Generation (Midwest Agreement). Under the terms of the agreement with Chicago, ComEd will pay Chicago $60 million over ten years...

Page 135
... Corporation (Distrigas) for gas supply, primarily for the Boston Generating units. Under the agreement, gas purchase prices from Distrigas are indexed to the New England gas markets. Exelon New England has guaranteed Mystic's financial obligations to Distrigas under the long-term supply...

Page 136
... to Consolidated Financial Statements for discussion of Exelon's commercial commitments as of December 31, 2006. Refund Claims ComEd and PECO have several pending tax refund claims seeking acceleration of certain tax deductions and additional tax credits. ComEd and PECO are unable to estimate the...

Page 137
...as long-term debt to financing trusts within the Consolidated Balance Sheets. Effective December 31, 2003, ComEd Financing II, ComEd Financing III, ComEd Funding, LLC, ComEd Transitional Funding Trust, PECO Trust III and PETT were deconsolidated from the financial statements of Exelon in conjunction...

Page 138
... maintained. Such losses could have a material adverse effect on Exelon and Generation's financial condition and their results of operations and cash flows. PECO Accounts Receivable Agreement PECO is party to an agreement with a financial institution under which it can sell or finance with limited...

Page 139
..., vice president of corporate planning, vice president of strategy, vice president of audit services and officers representing Exelon's business units. The RMC reports to the Exelon Board of Directors on the scope of the risk management activities. Commodity Price Risk (Exelon, Generation and ComEd...

Page 140
... Hedging Activities. Electricity available from Generation's owned or contracted generation supply in excess of Generation's obligations to customers, including ComEd's and PECO's retail load, is sold into the wholesale markets. To reduce price risk caused by market fluctuations, Generation enters...

Page 141
...the level of forward prices and volatility factors as of December 31, 2006 and may change as a result of changes in these factors. Management uses its best estimates to determine the fair value of commodity and derivative contracts Generation holds and sells. These estimates consider various factors...

Page 142
...-flow hedges for the years ended December 31, 2006 and December 31, 2005, providing insight into the drivers of the changes (new hedges entered into during the period and changes in the value of existing hedges). Information related to energy merchant activities is presented separately from interest...

Page 143
... 31, 2006, the fair value of this contract of $6 million was recorded on ComEd's Consolidated Balance Sheet as a current liability. ComEd has exposure to commodity price risk in relation to ancillary services that are purchased from PJM. Credit Risk (Exelon, Generation, ComEd and PECO) Generation...

Page 144
... not include accounts receivable exposure. $944 40 10 3 $997 $ 61 13 - 1 $ 75 $- - - - $- $1,005 53 10 4 $1,072 Collateral. As part of the normal course of business, Generation routinely enters into physical or financially settled contracts for the purchase and sale of capacity, energy, fuels...

Page 145
... is managed by credit and collection policies which are consistent with state regulatory requirements. ComEd and PECO are each currently obligated to provide service to all electric customers within their respective franchised territories. ComEd and PECO record a provision for uncollectible accounts...

Page 146
...generation suppliers, may act as agents to provide a single bill and provide associated billing and collection services to retail customers located in PECO's retail electric service territory. Currently, there are no third parties providing billing of PECO's charges to customers or advanced metering...

Page 147
... Balance Sheets. The mix of securities in the trust funds is designed to provide returns to be used to fund decommissioning and to compensate Generation for inflationary increases in decommissioning costs; however, the equity securities in the trust funds are exposed to price fluctuations...

Page 148
... its credit ratings and general business conditions, as well as that of the utility industry in general. If these conditions deteriorate to where Generation no longer has access to the capital markets at reasonable terms, Generation has access to a revolving credit facility that Generation currently...

Page 149
..., commercial commitments and off-balance sheet obligations is set forth under "Contractual Obligations and Off-Balance Sheet Obligations" in "EXELON CORPORATION-Liquidity and Capital Resources" of this Report. Critical Accounting Policies and Estimates See Exelon, Generation, ComEd and PECO-Critical...

Page 150
.... Capital resources are used primarily to fund ComEd's capital requirements, including construction, retirement of debt, the payment of dividends and contributions to Exelon's pension plans. ComEd did not pay a dividend during 2006. Cash Flows from Operating Activities A discussion of items...

Page 151
..., commercial commitments and off-balance sheet obligations is set forth under "Contractual Obligations and Off-Balance Sheet Obligations" in "EXELON CORPORATION-Liquidity and Capital Resources" of this Report. Critical Accounting Policies and Estimates See Exelon, Generation, ComEd and PECO-Critical...

Page 152
...paper program. See the "Credit Issues" section of "Liquidity and Capital Resources" for further discussion. Capital resources are used primarily to fund PECO's capital requirements, including construction, retirement of debt, the payment of dividends and contributions to Exelon's pension plans. Cash...

Page 153
... under "Contractual Obligations, Commercial Commitments and Off-Balance Sheet Obligations" in "EXELON CORPORATION-Liquidity and Capital Resources" of this Report. Critical Accounting Policies and Estimates See Exelon, Generation, ComEd and PECO-Critical Accounting Policies and Estimates above for...

Page 154
... the effectiveness of Exelon's internal control over financial reporting as of December 31, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears on the next page of this Annual Report on Form 10-K. February 13...

Page 155
...: We have completed integrated audits of Exelon Corporation's consolidated financial statements and of its internal control over financial reporting as of December 31, 2006, in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our...

Page 156
... as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable...

Page 157
...of Generation's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States...

Page 158
... of ComEd's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States...

Page 159
... of PECO's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States...

Page 160
Exelon Corporation and Subsidiary Companies Consolidated Statements of Operations For the Years Ended December 31, 2006 2005 2004 (in millions, except per share data) Operating revenues ...Operating expenses Purchased power ...Fuel ...Operating and maintenance ...Impairment of goodwill ......

Page 161
...Issuance of short-term debt ...Retirement of short-term debt ...Change in short-term debt ...Dividends paid on common stock ...Proceeds from employee stock plans ...Purchase of treasury stock ...Other financing activities ...Net cash flows used in financing activities ...Increase (decrease) in cash...

Page 162
... and Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Assets Current assets Cash and cash equivalents ...Restricted cash and investments ...Accounts receivable, net Customer ...Other ...Mark-to-market derivative assets ...Inventories, net, at average cost Fossil...

Page 163
... Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Liabilities and shareholders' equity Current liabilities Commercial paper and notes payable ...Long-term debt due within one year ...Long-term debt to ComEd Transitional Funding Trust and PECO Energy Transition...

Page 164
... 31, 2004 ...666,688 Net income ...- Long-term incentive plan activity ...8,862 Employee stock purchase plan issuances ...259 Common stock purchases ...- Common stock dividends declared ...- Other comprehensive loss, net of income taxes of $(127) ...- Balance, December 31, 2005 ...675,809 Net income...

Page 165
Exelon Corporation and Subsidiary Companies Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2006 2005 2004 (in millions) Net income ...Other comprehensive income (loss) Minimum pension liability, net of income taxes of $674, $3, and $(228), respectively ...Net ...

Page 166
Exelon Generation Company, LLC and Subsidiary Companies Consolidated Statements of Operations For the Years Ended December 31, 2006 2005 2004 (in millions) Operating revenues Operating revenues ...Operating revenues from affiliates ...Total operating revenues ...Operating expenses Purchased power ...

Page 167
...activities ...Changes in assets and liabilities: Accounts receivable ...Receivables from and payables to affiliates, net ...Inventories ...Accounts payable, accrued expenses and other current liabilities ...Counterparty collateral asset ...Counterparty collateral liability ...Income taxes ...Pension...

Page 168
Exelon Generation Company, LLC and Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Assets Current assets Cash and cash equivalents ...Restricted cash and investments ...Accounts receivable, net Customer ...Other ...Mark-to-market derivative assets ......

Page 169
Exelon Generation Company, LLC and Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Liabilities and member's equity Current liabilities Commercial paper ...Long-term debt due within one year ...Accounts payable ...Mark-to-market derivative liabilities ......

Page 170
Exelon Generation Company, LLC and Subsidiary Companies Consolidated Statements of Changes in Member's Equity Accumulated Other Comprehensive Income (Loss) Total Member's Equity (in millions) Membership Interest Undistributed Earnings Balance, December 31, 2003 ...Net income ...Non-cash ...

Page 171
Exelon Generation Company, LLC and Subsidiary Companies Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2006 2005 2004 (in millions) Net income ...Other comprehensive income (loss) Net unrealized gain (loss) on cash-flow hedges, net of income taxes of $371, $(116) ...

Page 172
Commonwealth Edison Company and Subsidiary Companies Consolidated Statements of Operations For the Years Ended December 31, 2006 2005 2004 (in millions) Operating revenues Operating revenues ...Operating revenues from affiliates ...Total operating revenues ...Operating expenses Purchased power ......

Page 173
... operating activities ...Changes in assets and liabilities: ...Accounts receivable ...Inventories ...Accounts payable, accrued expenses and other current liabilities ...Receivables from and payables to affiliates, net ...Income taxes ...Pension and non-pension postretirement benefit contributions...

Page 174
Commonwealth Edison Company and Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Assets Current assets Cash and cash equivalents ...Accounts receivable, net Customer ...Other ...Inventories, net, at average cost ...Deferred income taxes ...Receivables from ...

Page 175
Commonwealth Edison Company and Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Liabilities and shareholders' equity Current liabilities Commercial paper ...Long-term debt due within one year ...Long-term debt to ComEd Transitional Funding Trust due within one ...

Page 176
Commonwealth Edison Company and Subsidiary Companies Consolidated Statements of Changes in Shareholders' Equity Preferred Retained Accumulated and Other Receivable Earnings Retained Other Total Common Preference Paid In from (Deficits) Earnings Comprehensive Shareholders' Stock Stock Capital Parent ...

Page 177
Commonwealth Edison Company and Subsidiary Companies Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, (in millions) 2006 2005 2004 Net income (loss) ...Other comprehensive income (loss) Foreign currency translation adjustment, net of income taxes of $0, $(1) ...

Page 178
PECO Energy Company and Subsidiary Companies Consolidated Statements of Operations For the Years Ended December 31, 2006 2005 2004 (in millions) Operating revenues Operating revenues ...Operating revenues from affiliates ...Total operating revenues ...Operating expenses Purchased power ......

Page 179
...-cash operating activities ...Changes in assets and liabilities: Accounts receivable ...Inventories ...Accounts payable, accrued expenses and other current liabilities ...Receivables from and payables to affiliates, net ...Income taxes ...Pension and non-pension postretirement benefit contributions...

Page 180
... Companies Consolidated Balance Sheets December 31, 2006 2005 (in millions) Assets Current assets Cash and cash equivalents ...Restricted cash ...Accounts receivable, net Customer ...Other ...Affiliate ...Inventories, net, at average cost Gas ...Materials and supplies ...Contributions to Exelon...

Page 181
...Subsidiary Companies Consolidated Balance Sheets (in millions) December 31, 2006 2005 Liabilities and shareholders' equity Current liabilities Commercial paper ...Borrowings from Exelon intercompany money pool ...Long-term debt to PECO Energy Transition Trust due within one year ...Accounts payable...

Page 182
PECO Energy Company and Subsidiary Companies Consolidated Statements of Changes in Shareholders' Equity Accumulated Receivable Other Total Common Preferred from Retained Comprehensive Shareholders' Stock Stock Parent Earnings Income (Loss) Equity (in millions) Balance, December 31, 2003 ...$1,999 ...

Page 183
PECO Energy Company and Subsidiary Companies Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2006 2005 2004 (in millions) Net income ...Other comprehensive income (loss) Change in net unrealized gain (loss) on cash-flow hedges, net of income taxes of $(2), $(3) and...

Page 184
... retail sales operations of Exelon Generation Company, LLC (Generation). The energy delivery businesses include the purchase and regulated retail and wholesale sale of electricity and the provision of distribution and transmission services by Commonwealth Edison Company (ComEd) in northern Illinois...

Page 185
... net income. Use of Estimates (Exelon, Generation, ComEd and PECO) The preparation of financial statements of each of Exelon, Generation, ComEd and PECO (collectively, the Registrants) in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make...

Page 186
... and Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935 (PUHCA) prior to its repeal effective February 8, 2006, and ComEd and PECO apply Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation," (SFAS No...

Page 187
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 188
... to the capital of the party receiving the benefit. Losses on Reacquired and Retired Debt (Exelon, Generation, ComEd and PECO) Consistent with rate recovery for rate-making purposes, ComEd's and PECO's recoverable losses on reacquired debt related to regulated operations are deferred and amortized...

Page 189
... and charged to fuel expense when used. PECO has several long-term storage contracts for natural gas as well as a liquefied natural gas storage facility. Materials and Supplies. Materials and supplies inventory generally includes the average costs of transmission, distribution and generating plant...

Page 190
... energy costs of $39 million were recorded as current assets on Exelon's and PECO's Consolidated Balance Sheets. Leases (Exelon, Generation, ComEd and PECO) The Registrants account for leases in accordance with SFAS No. 13, "Accounting for Leases" and determine whether their long-term purchase power...

Page 191
... Electric Utility Plant and Note 19-Supplemental Financial Information for additional information regarding property, plant and equipment. Nuclear Fuel (Exelon and Generation) The cost of nuclear fuel is capitalized and charged to fuel expense using the unit-of-production method. The estimated cost...

Page 192
... (Exelon, Generation, ComEd and PECO) Depreciation is generally provided over the estimated service lives of property, plant and equipment on a straight-line basis using the composite method. ComEd's depreciation includes a provision for estimated removal costs as authorized by the ICC. Annual...

Page 193
... Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Average Service Life Percentage by Asset Category Exelon Generation ComEd PECO 2006 Electric-transmission and distribution (a) ...Electric-generation ...Gas (a) ...Common-electric and gas...

Page 194
... funds. The rates used for capitalizing AFUDC are computed under a method prescribed by regulatory authorities (see Note 19- Supplemental Financial Information). The following table summarizes total cost incurred, capitalized interest and credits of AFUDC by year: Exelon Generation ComEd PECO 2006...

Page 195
... impairment charges Exelon and ComEd recorded in 2006 and 2005, respectively. Derivative Financial Instruments (Exelon, Generation, ComEd and PECO) The Registrants may enter into derivatives to manage their exposure to fluctuations in interest rates, changes in interest rates related to planned...

Page 196
... of Generation's energy marketing business, Generation enters into contracts to buy and sell energy to meet the requirements of its customers. These contracts include short-term and long-term commitments to purchase and sell energy and energy-related products in the retail and wholesale markets with...

Page 197
... Management Policy. These contracts are recognized on the balance sheet at fair value and changes in the fair value of these derivative financial instruments are recognized in earnings. Severance Benefits (Exelon, Generation, ComEd and PECO) The Registrants account for their ongoing severance plans...

Page 198
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 199
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 200
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 201
..., Exelon uses historical data to estimate employee forfeitures. Exelon reviews the actual and estimated forfeitures on an annual basis and records an adjustment if necessary. Utilizing the Black-Scholes-Merton option-pricing model and the assumptions discussed above, the weighted average grant-date...

Page 202
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 203
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 204
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 205
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 206
... have on their financial statements. SFAS No. 158 In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)", which was effective for the Exelon and Generation as of...

Page 207
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 208
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 209
... and Generation) Termination of Proposed Merger with PSEG (Exelon) On December 20, 2004, Exelon entered into an Agreement and Plan of Merger (Merger Agreement) with Public Service Enterprise Group Incorporated (PSEG), a public utility holding company primarily located and serving customers in New...

Page 210
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 211
... of Southeast Chicago Energy Project, LLC (SCEP) (Exelon and Generation) Generation and Peoples Calumet, LLC (Peoples Calumet), a subsidiary of Peoples Energy Corporation, were joint owners of SCEP, a 350-megawatt natural gas-fired, peaking electric power plant located in Chicago, Illinois, which...

Page 212
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 213
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 214
...25, 2004. Responsibility for plant operations and power marketing activities were transferred to the lenders' special purpose entity on September 1, 2004. Boston Generating was reported in the Generation segment of Exelon's consolidated financial statements prior to its sale. At the date of the sale...

Page 215
... establish rates for the post-2006 period, which are more fully described below. Illinois Procurement Case (Exelon and ComEd). On February 25, 2005, ComEd made a filing with the ICC to seek regulatory approval of tariffs that would authorize ComEd to bill its customers for electricity costs incurred...

Page 216
.... In order to mitigate the effects of changes in future prices, electricity to serve residential and commercial customers with loads less than 400kW will be procured through staggered contracts. The ICC will subsequently review on an annual basis the prudence of ComEd's electricity purchases, but...

Page 217
... contract Suppliers American Electric Power Service Corporation ...Conectiv Energy Supply, Inc...Constellation Energy Commodities Group, Inc...DTE Energy Trading, Inc ...Edison Mission Marketing & Trading, Inc ...Energy America, LLC ...Exelon Generation Company, LLC ...FPL Energy Power Marketing...

Page 218
... assistance programs-see "Renewable Energy Filings" below. This order is subject to rehearing and appeal. Illinois Rate Case (Exelon and ComEd). On August 31, 2005, ComEd filed a rate case with the ICC to comprehensively review its tariff and to adjust ComEd's rates for delivering electricity...

Page 219
...(Exelon and ComEd). In 2006, the ICC approved a real-time pricing program which will offer residential customers an alternative to standard flat-rate utility billing. Starting in 2007, residential customers registered in the program will be able to control their electricity bills by using less power...

Page 220
... Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) In the ICC's December 20, 2006 order approving ComEd's residential...

Page 221
... through 2006. Beginning in 2007, this provision is no longer applicable to ComEd. Delivery Service Rates (Exelon and ComEd). On March 3, 2003, ComEd entered into, and the ICC subsequently entered orders that implemented, an agreement (Agreement) with various Illinois retail market participants...

Page 222
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 223
... has the right to file with the PAPUC for a change in retail rates to reflect the impact of any change in wholesale transmission rates. Customer Choice (Exelon, ComEd and PECO). All of ComEd's retail customers are eligible to choose a competitive electric generation supplier and most non-residential...

Page 224
... of affiliate abuse or reciprocal dealing. On May 19, 2006, FERC issued a Notice of Proposed Rule Making (NOPR) on Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities. The NOPR proposes a set of regulations that would modify the tests that...

Page 225
... efficiency in electric generation, delivery and use. The Energy Policy Act, through amendment of the Federal Power Act, also transferred to FERC certain additional authority. FERC was granted new authority to review the acquisition or merger of generating facilities, along with the responsibility...

Page 226
... on the estimated useful lives of the stations, which assumes the renewal of the licenses for all nuclear generating stations. As a result, these license renewals had no impact on the Consolidated Statements of Operations. 5. Accounts Receivable (Exelon, Generation, ComEd and PECO) Customer accounts...

Page 227
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 228
... Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) December 31, 2005 Exelon Generation ComEd PECO Asset Category Electric-transmission and distribution ...Electric-generation ...Gas-transmission and distribution ...Common ...Nuclear fuel ...Construction work...

Page 229
... Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) 7. Jointly Owned Electric Utility Plant (Exelon, Generation...

Page 230
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 231
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 232
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 233
..., Generation and ComEd) Generation utilizes derivatives to manage the utilization of its available generating capacity and the provision of wholesale energy to its affiliates. Exelon and Generation also utilize energy option contracts and energy financial swap arrangements to limit the market price...

Page 234
... Balance Sheets for the fair value of energy derivatives. The following table provides a summary of the fair value balances recorded by Exelon, Generation and ComEd as of December 31, 2006: December 31, 2006 Derivatives Current assets ...Noncurrent assets ...Total mark-to-market energy contract...

Page 235
... fuelproducing facilities. (b) Excludes Exelon's interest-rate swaps. Normal Operations and Hedging Activities (Generation). Electricity available from Generation's owned or contracted generation supply in excess of Generation's obligations to customers, including ComEd's and PECO's retail load...

Page 236
... income taxes) relating to mark-to-market activity of certain non-trading purchase power and sale contracts pursuant to SFAS No. 133. Generation's, ComEd's and Exelon's other mark-to-market activity on non-trading purchase power and sale contracts are reported in fuel and purchased power, revenue...

Page 237
... Activities (Generation). Proprietary trading includes all contracts entered into purely to profit from market price changes as opposed to hedging an exposure and is subject to limits established by Exelon's Risk Management Committee. These contracts are recognized on the Consolidated Balance Sheets...

Page 238
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 239
... of the Federal Deposit Insurance Corporation limits. Concentrations of credit risk with respect to customer accounts receivable are limited due to the Registrants' large number of customers and, in the case of ComEd's and PECO's energy delivery businesses, their dispersion across many industries...

Page 240
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 241
...on the impacts to the Statements of Operations and the Balance Sheets for the former ComEd and former PECO units. Prior to 2006, Exelon and Generation evaluated, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, as well as their intent...

Page 242
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 243
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 244
... facilities. (b) Excludes severance charges of $5 million related to Salem, of which Generation owns 42.59% and which is operated by PSEG Nuclear. 11. Debt and Credit Agreements (Exelon, Generation, ComEd and PECO) Short-Term Debt The following tables present the short-term debt activity for Exelon...

Page 245
... Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) ComEd 2006...

Page 246
... Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) removed as a party to the July 16, 2004 credit facilities. During 2006, ComEd borrowed and fully repaid $240 million under its credit agreement. On October 26, 2006, Exelon, Generation and PECO...

Page 247
..., Generation, ComEd and PECO as of December 31, 2006 and 2005: Exelon Rates Maturity Date December 31, 2006 2005 Long-term debt First Mortgage Bonds (a) (b): Fixed rates ...Floating rates ...Notes payable and other (c) ...Pollution control notes: Floating rates ...Notes payable-accounts receivable...

Page 248
... from the financial statements in conjunction with the adoption of FIN 46-R. Amounts owed to these financing trusts are recorded as debt to financing trusts within Exelon's Consolidated Balance Sheets. Generation Rates Maturity Date December 31, 2006 2005 Long-term debt Senior unsecured notes...

Page 249
... Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) ComEd December 31, Rates Maturity Date 2006 2005 Long-term...

Page 250
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 251
...tender, open market purchases, optional redemption or payment at maturity, during 2006: Company Type Interest Rate Maturity Amount Exelon ...Notes payable for investments in synthetic fuel-producing facilities 6.00% to 8.00% January 2008 $ 50 Generation ...Note payable 6.33% August 8, 2009 10 ComEd...

Page 252
... Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) 12. Income Taxes (Exelon, Generation, ComEd and PECO) Income tax expense (benefit...

Page 253
...31, 2006 Exelon (b)(c) Generation ComEd (c) PECO U.S. Federal statutory rate ...Increase (decrease) due to: State income taxes, net of Federal income tax benefit ...Nondeductible goodwill impairment charge ...Synthetic fuel-producing facilities credit ...Qualified nuclear decommissioning trust fund...

Page 254
... 31, 2004 Exelon (b)(c) Generation ComEd (c) PECO U.S. Federal statutory rate ...Increase (decrease) due to: State income taxes, net of Federal income tax benefit ...Synthetic fuel-producing facilities credit ...Qualified nuclear decommissioning trust fund income ...Tax exempt income ...Nontaxable...

Page 255
... Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) For the Year Ended December 31, 2005 Exelon Generation ComEd PECO Plant basis differences ...Stranded cost recovery ...Unrealized losses (gains) on derivative financial instruments ...Deferred pension...

Page 256
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 257
...facilities regardless of whether or not a phase-out of the tax credits is anticipated. However, Exelon has the legal right to recover a portion of the payments made to its counterparties related to phased-out tax credits. At December 31, 2006, Exelon had receivables on its Consolidated Balance Sheet...

Page 258
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 259
... rates collected by PECO from PECO customers. Through 2006, Generation recovered costs for decommissioning nuclear generating stations, previously owned by ComEd, through regulated rates collected from ComEd customers. Under a December 2000 ICC order issued to ComEd, amended February 2001 (ICC order...

Page 260
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 261
...plants through regulated rates. The amounts recovered from customers are remitted to Generation and deposited into the trust accounts to fund the future decommissioning costs. In both 2006 and 2005, PECO collected and remitted to Generation $33 million. Every five years, the PAPUC reviews the annual...

Page 262
...accounting discussed above. Unrealized gains (after applicable taxes) related to the former ComEd units are also offset within Generation's statement of other comprehensive income. The gross unrealized gains in the trust funds of the former ComEd and PECO units are tax-effected at the applicable tax...

Page 263
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 264
...Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Balance Sheets...

Page 265
... storage at other stations. The Standard Contracts with the DOE also required the payment to the DOE of a one-time fee applicable to nuclear generation through April 6, 1983. The fee related to the former PECO units has been paid. Pursuant to the Standard Contracts, ComEd previously elected to defer...

Page 266
... its conditional AROs at their estimated fair values if those fair values can be reasonably estimated. The following table presents the activity of the non-nuclear AROs reflected on the Registrants' Consolidated Balance Sheets from January 1, 2006 to December 31, 2006: Exelon Generation ComEd PECO...

Page 267
... of FIN 47: Exelon Generation ComEd PECO Consolidated statements of operations line item: Cumulative effect of a change in accounting principle (net of income taxes of $(27), $(19), $(6), $(2) ) (a) ...Consolidated balance sheets line items-increase (decrease): Property, plant and equipment, net...

Page 268
... charge is recorded as an increase to their regulatory assets due to the application of SFAS No. 71. 14. Retirement Benefits (Exelon, Generation, ComEd and PECO) Defined Benefit Pension and Other Postretirement Benefits-Consolidated Plans Exelon Exelon sponsors defined benefit pension plans...

Page 269
... Exelon and Generation, administer their pension plans. This legislation will require companies to, among other things, increase the amount by which they fund their pension plans, pay higher premiums to the Pension Benefit Guaranty Corporation if they sponsor defined benefit plans, amend plan...

Page 270
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 271
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 272
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 273
...-line basis over the average remaining service period of employees expected to receive benefits under the plans. In 2004, the additional minimum pension liability was increased by $606 million and Exelon's shareholders' equity decreased by $392 million (net of income taxes) as a result of an annual...

Page 274
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 275
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 276
...-sponsored pension and postretirement benefit plans: Generation (a) ComEd (a) PECO (a) Exelon Corporate (a)(b) 2006 ...2005 ...2004 ... $114 97 126 $72 63 86 $30 30 32 $33 32 26 (a) The 2006, 2005 and 2004 amounts reflect an annualized reduction in net periodic postretirement benefit cost of...

Page 277
... Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) The following table provides net contributions made by Generation, ComEd and PECO to the Exelon-sponsored and AmerGen-sponsored pension and other postretirement benefit plans: 2006 2005...

Page 278
... SFAS No. 158 as well as the change to the AML as a result of an annual actuarial valuation associated with the AmerGen defined benefit pension plans and postretirement benefit plans on Generation's Consolidated Balance Sheet as of December 31, 2006: Before Application of SFAS No. 158 Without AML...

Page 279
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 280
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 281
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 282
... Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Share Repurchase Program. In April 2004, Exelon's Board of Directors...

Page 283
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 284
... effect on Exelon's financial condition, results of operations and liquidity. Energy Commitments Generation's wholesale operations include the physical delivery and marketing of power obtained through its generation capacity, and long-, intermediate- and short-term contracts. Generation maintains...

Page 285
.... Generation also uses financial contracts to manage the risk surrounding trading for profit activities. Generation has entered into bilateral long-term contractual obligations for sales of energy to loadserving entities, including electric utilities, municipalities, electric cooperatives and retail...

Page 286
... in long-term debt in Exelon's Consolidated Balance Sheet. (c) Surety bonds-Guarantees issued related to contract and commercial agreements, excluding bid bonds. (d) Performance guarantees-Guarantees issued to ensure execution under specific contracts. (e) Energy marketing contract guarantees...

Page 287
... Corporation (Distrigas) for gas supply, primarily for the Boston Generating units. Under the agreement, gas purchase prices from Distrigas are indexed to the New England gas markets. Exelon New England has guaranteed Mystic's financial obligations to Distrigas under the long-term supply...

Page 288
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 289
... Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Leases Minimum future operating lease payments, including lease payments for vehicles, real estate, computers, rail cars and office equipment, as of December 31, 2006 were: Exelon Generation ComEd...

Page 290
.... Pursuant to a PAPUC order, PECO is currently recovering a provision for environmental costs annually for the remediation of former MGP facility sites, for which PECO has recorded a regulatory asset. Based on the final order received in ComEd's Rate Case, beginning in 2007, ComEd will also recover...

Page 291
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 292
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 293
...to vigorously defend them. On March 16, 2006, the Attorney General of the State of Illinois and the State's Attorney for Will County, Illinois filed a civil enforcement action against Exelon, Generation and ComEd in the Circuit Court of Will County relating to the releases of tritium discussed above...

Page 294
... Exelon's, Generation's or ComEd's financial position, results of operations or cash flows. On December 22, 2006, as a gesture of goodwill and corporate citizenship, Generation contributed $11.5 million into an escrow account to assist the Godley Public Water District with the installation of a new...

Page 295
... the United States EPA's Climate Leaders program, a voluntary industry-government partnership addressing climate change. Exelon believes that its planned GHG management efforts, including increased use of renewable energy, its current energy efficiency initiatives and its efforts in the areas of...

Page 296
...The order found that PPL should pay for energy received that was billed to other parties, but allows PPL and the market participants to question what portion of the settlement PJM might bear and what offsetting deductions might be made in reducing the payment. On March 30, 2006, Exelon and PPL filed...

Page 297
... by Generation or were previously owned by ComEd and PECO. Based on the actuaries' analyses, management's review of current and expected losses, and the view of counsel regarding the assumptions used in estimating the future losses, Generation recorded an undiscounted $43 million pre-tax charge for...

Page 298
.... In its December 20, 2006 order on rehearing, the ICC confirmed ComEd's ability to recover the previously incurred severance costs, and ComEd recorded a regulatory asset of $158 million at that time. Exelon Pension Claim. On July 11, 2006, a former employee of ComEd filed a purported class action...

Page 299
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 300
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 301
... Taxes in a Purchase Business Combination" (EITF 93-7). Exelon cannot predict the timing of the final resolution of these refund claims. In 2006, the Joint Committee on Taxation (Joint Committee) completed its review and granted approval for PECO's income tax refund claims for investment tax credits...

Page 302
... Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Other Refund Claims. In 2001, ComEd and PECO filed requests with the IRS to change their tax method of accounting for certain capitalized overhead costs. To date, the IRS has...

Page 303
...Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) For the Year Ended December 31, 2005 Exelon Generation ComEd PECO Operating Wholesale ...Retail electric and gas...

Page 304
...' Consolidated Statements of Operations. (b) PECO reflects a reduction in tax accruals of $12 million related to sales and use tax and state franchise tax adjustments. For the Year Ended December 31, 2005 Exelon Generation ComEd PECO Taxes other than income Utility (a) ...Real estate ...Payroll...

Page 305
...Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) For the Year Ended December 31, 2006 Exelon Generation ComEd...

Page 306
...Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) For the Year Ended December 31, 2006 Exelon Generation ComEd...

Page 307
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 308
... ...Other decommissioning-related activities ...Amortization of energy related options ...Amortization of deferred revenue ...Spent nuclear fuel interest expense ...Non-cash accounts receivable activity ...Write-off Merger-related capitalized costs (a) ...2006 ICC rate orders (b) ...Other ...Total...

Page 309
... - 25 - 27 Generation $- - - 5 - ComEd $- - - - - PECO Cash paid during the year Interest (net of amount capitalized) ...Income taxes (net of refunds) ...Other non-cash operating activities Pension and non-pension postretirement benefits costs ...Provision for uncollectible accounts ...Equity in...

Page 310
... noted) Non-cash investing and financing activities Change in asset retirement cost ...Consolidation of the voluntary employee beneficiary association trust . Resolution of certain tax matters and PECO/Unicom merger severance adjustment ...Purchase accounting adjustments ...Sale of asset ...Non-cash...

Page 311
... unless otherwise noted) Non-cash investing and financing activities Change in asset retirement cost ...Resolution of certain tax matters and PECO/Unicom merger severance adjustment ...Purchase accounting adjustments ...Disposition of Boston Generating (a) ...Note cancelled in conjunction with the...

Page 312
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 313
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 314
... 31, 2006 Exelon ComEd PECO Regulatory assets Competitive transition charge ...Pension and other postretirement benefits ...Deferred income taxes ...Debt costs ...Severance ...Conditional asset retirement obligations ...MGP remediation costs ...Non-pension postretirement benefits ...Rate case costs...

Page 315
... $ Exelon ComEd 151 - - 151 6 157 PECO Regulatory assets Competitive transition charge ...Deferred income taxes ...Debt costs ...Conditional asset retirement obligations ...Non-pension postretirement benefits ...Recoverable transition costs ...MGP remediation costs ...DOE facility decommissioning...

Page 316
.... Non-pension postretirement benefits. These costs at PECO are the result of transitioning to SFAS No. 106 in 1993, which are recoverable in rates through 2012. Rate case costs. Recovery of these items was granted to ComEd in the July 26, 2006 ICC rate order. Recovery is over three years. See...

Page 317
... plans, deferred income taxes, non-pension postretirement benefits, MGP remediation, severance, Procurement Case and Rate Case are not earning a rate of return. Recovery of the regulatory assets for conditional asset retirement obligations, debt costs, recoverable transition costs, DOE facility...

Page 318
... and expenses for 2006, 2005 and 2004, respectively, for PECO. 21. Related Party Transactions (Exelon, Generation, ComEd and PECO) Effective December 31, 2003, ComEd Financing II, ComEd Financing III, ComEd Funding, ComEd Funding Trust, PETT, PECO Energy Capital Corporation and PECO Trust III were...

Page 319
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 320
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 321
...) Generation The financial statements of Generation include related-party transactions as presented in the tables below: For the Years Ended December 31, 2006 2005 2004 Operating revenues from affiliates ComEd (a) ...PECO (a) ...BSC (b) ...Total operating revenues from affiliates ...Purchased power...

Page 322
... into a one-year gas supply agreement with PECO. (b) Generation receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology and supply management services. All services are provided at cost, including applicable overhead. A portion...

Page 323
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 324
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 325
... costs from its customers to Generation. This was fully paid in 2006. (h) The December 31, 2005 receivable from Exelon for the allocation of tax benefits was settled in 2006. See Note 12 - Income Taxes for additional information. PECO The financial statements of PECO include related-party...

Page 326
..., PECO entered into a one-year gas procurement agreement with Generation. (e) PECO receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology, supply management services, planning and engineering of delivery systems, management of...

Page 327
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 328
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 329
Exelon Corporation and Subsidiary Companies Exelon Generation Company, LLC and Subsidiary Companies Commonwealth Edison Company and Subsidiary Companies PECO Energy Company and Subsidiary Companies Combined Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share...

Page 330
... in ITEM 8. Financial Statements and Supplementary Data. On October 13, 2006, PECO completed the Common Customer System project, which moved the PECO customer accounts into the existing ComEd customer information management system (CIMS) to provide a common customer billing system for Exelon. This...

Page 331
...amendment or waiver on Exelon's website, www.exeloncorp.com, or in a report on Form 8-K. Section 16(a) Beneficial Ownership Reporting Compliance Based upon signed affirmations received from directors and officers, as well as administrative review of company plans and accounts administered by private...

Page 332
... 2006. Directors Frank M. Clark. Age 61. Chairman and Chief Executive Officer since November 28, 2005. Previously Vice President and Chief of Staff of Exelon and President of ComEd; Senior Vice President, distribution, customer and market services and external affairs of ComEd; Senior Vice President...

Page 333
... L. Skolds. Age 56. Director since March 15, 2004. Executive Vice President of Exelon Corporation since February 1, 2004. President and CEO of Exelon Energy Delivery and Exelon Generation. Senior Vice President of Exelon and Exelon Generation Company, LLC and Chief Nuclear Officer from October 2000...

Page 334
... and retain outstanding executives. The compensation programs are designed to motivate and reward senior management for achieving financial, operational and strategic success consistent with Exelon's goal of being the best group of electric generation and electric and gas delivery companies in the...

Page 335
...met. The balance of their equity-based compensation is in the form of options to purchase Exelon common stock, which gain value only to the extent that the market price of Exelon's stock increases following the grant date and the executive remains with the company for a sufficient period of time for...

Page 336
... for officers who are not executive vice presidents or higher. Annual Incentives Annual incentive compensation is made available to all salaried employees, including NEOs, all non-represented hourly employees and represented employees to the extent provided in their applicable collective...

Page 337
...30% for senior leadership, 25% for vice presidents and 20% for non-executive employees to impose some accountability for impairment of investments in Sithe and Boston Generating that adversely affected GAAP earnings. No such reduction was imposed in 2006. The goals under the annual incentive program...

Page 338
...in the form of time-vested stock options. The use of both forms of long-term incentives is consistent with the practices in our peer group, as reported by Towers Perrin. The stock options provide value only if, and to the extent that, the market price of Exelon's common stock increases following the...

Page 339
... date with the balance vesting in January of the next two years. The vesting schedule is designed to add a retention factor to the program. The form of payment provides for payment in Exelon common stock to executives with lower levels of stock ownership, with increasing portions of the payments...

Page 340
... Deferred Compensation Plan is a non-qualified plan that permits executives and key managers to defer base salary, annual incentive, and contributions that would be made to the Exelon Corporation Employee Savings Plan (the company's tax-qualified 401(k) plan) but for the applicable limits under the...

Page 341
... 31, 2006, is found in the "Potential Payments upon Termination or Change-in-Control" section below. Retirement Benefit Plans Exelon sponsors the Exelon Corporation Retirement Program, a traditional defined benefit pension plan that covers certain management employees who commenced employment prior...

Page 342
... benefit of Exelon; however, it is understood that some may be used for personal reasons as well. When perquisites are utilized for personal reasons, the cost or value is imputed to the officer as income and the officer is responsible for all applicable taxes; however, in certain cases, the personal...

Page 343
... downtown Chicago, supplemental long term disability insurance and executive life insurance for those with existing policies. Exelon will continue to provide Mr. Rowe with 50 hours of personal travel per year on the corporate aircraft and executive chauffeur services because of the time commitments...

Page 344
...not receive base salary increases in 2006. How 2006 annual incentives were determined For 2006, the annual incentive payments to Mr. Rowe and each of nine other senior executives were funded by a notional incentive pool established by the Exelon compensation committee under the Annual Incentive Plan...

Page 345
... corporate performance) and business unit financial and/or operating measures, depending on the nature of their responsibilities. The following table summarizes the goals and weights applicable to the NEOs. Exelon, Generation and PECO Adjusted Operating Earnings Per Share*1 Exelon Energy Delivery...

Page 346
... Incentive Program (AIP), all annual incentive payments were increased by 5%. Mr. Rowe's 2006 Annual Incentive. Taking into account the performance review discussed above, the compensation committee and the corporate governance committee recommended, and the independent directors of the Exelon board...

Page 347
... other form of compensation. Exelon performance share unit awards The 2006 Long-Term Performance Share Unit Award Program was based on two measures, Exelon's three-year Total Shareholder Return (TSR), compounded monthly, as compared to the TSR for the companies listed in the Dow Jones Utility Index...

Page 348
...target opportunity. Based on the formula, 2006 Performance Share Unit Awards for NEOs were as follows: Exelon, Generation and PECO Name Shares Value* Form of Payment** Rowe ...Skolds ...Young ...Mehrberg ...Clark ...McLean ...Crane ...O'Brien ...Hilzinger ...ComEd Name 127,581 $7,649,757 100% Cash...

Page 349
... by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the 2006 Annual Report on Form 10-K and the 2007 Proxy Statement. The Compensation Committee...

Page 350
... officers of Exelon, Generation, PECO (shown in one table because of the overlap in their named executive officers) and ComEd for the year ended December 31, 2006. Salary amounts may not match the amounts discussed in Compensation Discussion and Analysis because that discussion concerns salary rates...

Page 351
... on the date of grant. Fair market value is defined under the plans as the closing price on the grant date as reported on the New York Stock Exchange. Options vest in equal annual installments over a four-year period and have a term of ten years. Employees who are retirement eligible are eligible...

Page 352
... Officer, Exelon Nuclear. Mr. Crane is an executive officer of Generation. Denis P. O'Brien, President, PECO. Matthew F. Hilzinger, Senior Vice President and Controller, Exelon, Chief Accounting Officer, PECO. ComEd Change in Pension Value and Non-Equity Nonqualified Incentive Deferred All Plan...

Page 353
... expenses because the personal benefit is closely related to the business purpose. 21. Represents company matching contributions to the NEO's qualified and non-qualified savings plans. The 401(k) plan is available to all employees and the annual contribution for 2006 was generally limited to $15...

Page 354
... to limited personal use of the company's chauffer services, including use for commuting which allows them to work while commuting. The cost included in the table represents the estimated incremental cost to Exelon to provide limited personal service. This cost is based upon the number of hours that...

Page 355
... other amenities are the responsibility of each named officer. When any variable costs are business-related, Exelon will reimburse the officer directly for such costs. Membership in country clubs is not provided or reimbursed. 29. Executive officers may use company-provided vendors for comprehensive...

Page 356
... the officer's position. The 2006 Long-Term Performance Share Unit Award Program was based on two measures, Exelon's Total Shareholder Return (TSR), compounded monthly, for the three-year period ended December 31, 2006, as compared to the TSR for the companies listed in the Dow Jones Utility Index...

Page 357
... Awards at Fiscal Year-End Exelon, Generation and PECO Stock Awards (See Note 2) Equity Incentive Plan Number Market Value Awards: of as of Number of Number of Number of Shares or 12/31/2006 of Unearned Securities Securities Units of Shares or Shares, Units Underlying Underlying Stock Units of or...

Page 358
... 2) Equity Incentive Plan Awards: Equity Market Market Value Incentive Value of Number of as of Plan Awards: Unearned Shares or 12/31/2006 Number of Shares, Units of of Shares or Unearned Units or Stock Units of Shares, Units Other That Have Stock That or Other Rights Not Have Not Rights That That...

Page 359
... plan that covers certain management employees who commenced employment prior to January 1, 2001 and certain collective bargaining unit employees. Effective January 1, 2001, Exelon also established two cash balance defined benefit pension plans in order to both reduce future retirement benefit costs...

Page 360
... Exelon Corporation Retirement Program. Messrs. Young, McLean, O'Brien, and Hilzinger participate in Exelon's cash balance pension plans. Under the cash balance pension plan, an account is established for each participant and the account balance grows as a result of annual benefit credits and annual...

Page 361
... value of each NEO's accumulated pension benefit is shown in the following tables. Exelon, Generation and PECO Number of Years Credited Service (#) (C) Present Value of Accumulated Benefit ($) (D) Payments During 2006 ($) (E) Name (A) Plan Name (B) Rowe ...Skolds ...Young ...Mehrberg ...Clark...

Page 362
...in the plan. Balances in the plan are distributed in shares of Exelon stock in a lump sum distribution upon termination of employment. Exelon, Generation and PECO Executive Contributions in 2006 ($) (B) Registrant Contributions in 2006 ($) (C) Aggregate Earnings in 2006 ($) (D) Aggregate Withdrawals...

Page 363
... Retirement Distribution elections for NEOs are summarized in the following table: Exelon, Generation and PECO Elected to Defer into the Deferred Compensation Plan Amounts Contributed to the Exelon Corporation Employee Savings Plan in 2007 that Exceed Applicable IRS Limits Name Elected to Receive...

Page 364
... Payments upon Termination or Change in Control Employment agreement with Mr. Rowe Under the amended and restated employment agreement between Exelon and Mr. Rowe, Mr. Rowe will continue to serve as Chief Executive Officer of Exelon, Chairman of Exelon's board of directors and a member of the board...

Page 365
... such terms are described under "Change in Control Employment Agreements and Severance Plan Covering Other Named Executives"; or Mr. Rowe resigns before March 16, 2010 because of the failure to be appointed or elected as Exelon's Chief Executive Officer, Chairman of Exelon's board of directors, and...

Page 366
... services, attend a reasonable number of civic, charitable and corporate events, and serve on mutually agreed civic and charitable boards as Exelon's representative; Exelon is required to provide office space, a personal secretary and reasonably requested tax, financial and estate planning services...

Page 367
... agreements and severance plan covering other named executives Exelon has entered into change in control employment agreements with the named executive officers other than Mr. Rowe, which generally protect such executives' position and compensation levels for two years after a change in control of...

Page 368
...or disability, in each case under circumstances not covered by an individual change in control employment agreement, the named executive officer may be eligible for the following non-change in control benefits under the Exelon Corporation Senior Management Severance Plan: â€¢ prorated payment of the...

Page 369
... under the Senior Management Severance Plan has the same meaning as the definition of such term under the individual change in control employment agreements. Estimated Value of Benefits to be Received Upon Retirement The following tables show the estimated value of payments and other benefits to be...

Page 370
... share units, the value is based on the December 29, 2006 closing price of Exelon stock. Pursuant to his employment agreement, Mr. Rowe would be entitled to three years of office and secretarial services and three years of tax, financial and estate planning services. Estimated Value of Benefits to...

Page 371
... Related to a Change in Control The following tables show the estimated value of payments and other benefits to be conferred upon the NEOs assuming they were terminated as of December 29, 2006 under the terms of the Amended and Restated Senior Management Severance Plan. These payments and benefits...

Page 372
... pension plan. For non-grandfathered executives who are not a part of senior executive management, the severance period is 15 months. In addition, a cash payment will be made in an amount equal to the actuarial present value of any non-vested accrued benefit under Exelon's qualified pension plan...

Page 373
... pension plan. For non-grandfathered executives who are not a part of senior executive management, the severance period is 24 months. In addition, a cash payment will be made in an amount equal to the actuarial present value of any non-vested accrued benefit under Exelon's qualified pension plan...

Page 374
... for 12 months to all NEOs. Mr. Rowe would also be entitled to three years of office and secretarial services and three years of tax, financial and estate planning services. 17. Represents the estimated value of the required excise tax gross-up payment or scaleback. All of the executives, with the...

Page 375
...from Exelon's predecessor companies, PECO Energy Company and Unicom Corporation. For three directors who served on the PECO Energy board of directors, a portion of the legacy deferred stock units was granted as a conversion of the accrued benefits under the PECO Energy Directors Retirement Plan when...

Page 376
... Exelon Employee Savings Plan. Directors and executive officers do have one additional fund not available to employees that, through its composition, does provide returns that for 2006 were found to be in excess of 120% of the federal long-term rate that is used by the IRS to determine above market...

Page 377
... per year. The same program is available to members of the board of directors. Generation Exelon Generation Co. LLC does not have a board of directors. ComEd For their service as directors of the company, ComEd's non-employee directors, who are also members of the Exelon board of directors, receive...

Page 378
...STOCKHOLDER MATTERS Exelon, Generation and PECO The following table shows the ownership of Exelon common stock as of December 31, 2006 by any person or entity that has publicly disclosed ownership of more than five percent of Exelon's outstanding stock, each director, each named executive officer in...

Page 379
... of ComEd's voting securities is Exelon, and none of the directors or executive officers of ComEd hold any ComEd voting securities. The following table shows the ownership of Exelon common stock as of December 31, 2006 by (1) any director of ComEd, (2) each named executive officer of ComEd named in...

Page 380
... number of shares was determined by taking the following multiples of the officer's base salary as of the latest of October 24, 2006 or the date of hire or promotion: (1) Chairman and CEO, five times base salary; (2) executive vice presidents, three times base salary; (3) Presidents and senior vice...

Page 381
...relationship. With respect to Mr. Mooney, the ComEd board considered the fact that several companies with which Mr. Mooney is affiliated may receive electricity or gas delivery services from ComEd and/or PECO under tariffed rates and Exelon's support of charitable organizations with which Mr. Mooney...

Page 382
..., tax advice related to proposed acquisitions or sales, employee benefit plans and requests for rulings or technical advice from taxing authorities. (c) All other fees reflect work performed primarily in connection with corporate executive programs. Generation, ComEd and PECO Generation, ComEd and...

Page 383
... fees for purchase accounting reviews, audits of employee benefit plans and internal control projects. (b) Tax fees consist of the aggregate fees billed for professional services rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice, and tax planning. ComEd Year Ended December...

Page 384
... Statement Schedules (1) Exelon (i) Financial Statements Consolidated Statements of Operations for the years 2006, 2005 and 2004 Consolidated Statements of Cash Flows for the years 2006, 2005 and 2004 Consolidated Balance Sheets as of December 31, 2006 and 2005 Consolidated Statements of Changes...

Page 385
...Additions and adjustments Charged to Cost Charged and to Other Expenses Accounts Column D Column E Description Balance at Beginning of Year Deductions Balance at End of Year For The Year Ended December 31, 2006 Allowance for uncollectible accounts ...Deferred tax valuation allowance ...Reserve...

Page 386
(2) (i) Generation Financial Statements Consolidated Statements of Operations for the years 2006, 2005 and 2004 Consolidated Statements of Cash Flows for the years 2006, 2005 and 2004 Consolidated Balance Sheets as of December 31, 2006 and 2005 Consolidated Statements of Changes in Member's Equity ...

Page 387
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES Schedule II - Valuation and Qualifying Accounts (in millions) Column A Column C Column D Column E Additions and adjustments Charged Balance at to Cost Charged Beginning and to Other Balance at of Year Expenses Accounts Deductions End of Year ...

Page 388
(3) (i) ComEd Financial Statements Consolidated Statements of Operations for the years 2006, 2005 and 2004 Consolidated Statements of Cash Flows for the years 2006, 2005 and 2004 Consolidated Balance Sheets as of December 31, 2006 and 2005 Consolidated Statements of Changes in Shareholders' Equity ...

Page 389
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES Schedule II - Valuation and Qualifying Accounts (in millions) Column A Column B Column C Additions and adjustments Charged to Cost Charged and to Other Expenses Accounts Column D Column E Description Balance at Beginning of Year Deductions ...

Page 390
... Balance Sheets as of December 31, 2006 and 2005 Consolidated Statements of Changes in Shareholders' Equity for the years 2006, 2005 and 2004 Consolidated Statements of Comprehensive Income for the years 2006, 2005 and 2004 Notes to Consolidated Financial Statements (ii) Financial Statement Schedule...

Page 391
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES Schedule II - Valuation and Qualifying Accounts (in millions) Column A Column C Column D Column E Additions and adjustments Balance at Charged to Charged to Beginning Cost and Other Balance at of Year Expenses Accounts Deductions End of Year Column B ...

Page 392
...2006 (File No. 1-1839, Form 8-K dated January 23, 2006, Exhibit 99.1). Amended and Restated Bylaws of Exelon Corporation (File No. 1-16169, Form 8-K dated December 5, 2006, Exhibit 3.1). First and Refunding Mortgage dated May 1, 1923 between The Counties Gas and Electric Company (predecessor to PECO...

Page 393
...4-1-1 4.1 Exelon Corporation Dividend Reinvestment and Stock Purchase Plan (Registration Statement No. 333-84446, Form S-3, Prospectus). Mortgage of Commonwealth Edison Company to Illinois Merchants Trust Company, Trustee (BNY Midwest Trust Company, as current successor Trustee), dated July 1, 1923...

Page 394
...1-1839, Form 8-K dated April 7, 2003 1-1839, Form 8-K dated August 25, 2003 1-16169, Form 10-Q for the quarter ended March 31, 2005 1-1839, Form 8-K dated February 22, 2006 1-1839, Form 8-K dated March 6, 2006 1-1839, Form 8-K dated August 28, 2006 1-1839, Form 8-K dated October 2, 2006 1-1839, Form...

Page 395
... Form 8-K dated June 9, 2005, Exhibit 99.2). Form of $500,000,000 5.625% senior notes due 2035 dated June 9, 2005 issued by Exelon Corporation (File No. 1-16169, Form 8-K dated June 9, 2005, Exhibit 99.3). Power Purchase Agreement among Generation and PECO (Registration Statement No. 333-85496, Form...

Page 396
... and Restated Power Purchase Agreement between Exelon Generation Company, LLC and Commonwealth Edison Company as of April 30, 2004 (File Nos. 1-01839 and 333-85496, Form 10-Q for quarter ended June 30, 2004, Exhibit 10-1). Exelon Corporation Deferred Compensation Plan (File No. 1-16169, 2001 Form 10...

Page 397
...2001). Exelon Corporation Cash Balance Pension Plan (File No. 1-16169, 2001 Form 10-K, Exhibit 10-14). Joint Petition for Full Settlement of PECO Energy Company's Restructuring Plan and Related Appeals and Application for a Qualified Rate Order and Application for Transfer of Generation Assets dated...

Page 398
... dated as of March 10, 2003 to the Agreement Regarding Various Matters Involving or Affecting Rates for Electric Service Offered by Commonwealth Edison Company (File No. 1-16169, Commonwealth Edison Company 2002 Form 10-K, Exhibit 10-41-1). Exelon Corporation Annual Incentive Plan for Senior...

Page 399
...Exhibit 10-62). Form of Separation Agreement under Exelon Corporation Senior Management Severance Plan (As Amended and Restated) (File No. 1-16169, 2005 Form 10-K, Exhibit 10-63). Credit Agreement dated as of February 22, 2006 among Commonwealth Edison Company, the Lenders party thereto and JPMorgan...

Page 400
... 21-2 21-3 21-4 Exelon Corporation Exelon Generation Company, LLC Commonwealth Edison Company PECO Energy Company Consent of Independent Registered Public Accountants 23-1 23-2 23-3 Exelon Corporation Commonwealth Edison Company PECO Energy Company Power of Attorney (Exelon Corporation) 24-1 24...

Page 401
... for Commonwealth Edison Company Filed by John L. Skolds for PECO Energy Company Filed by John F. Young for PECO Energy Company Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code as to the Annual Report on Form 10-K for the year ended December 31, 2006 filed by...

Page 402
... Officer) Senior Vice President and Corporate Controller (Principal Accounting Officer) /s/ JOHN F. YOUNG John F. Young /s/ MATTHEW F. HILZINGER Matthew F. Hilzinger This annual report has also been signed below by John W. Rowe, Attorney-in-Fact, on behalf of the following Directors on the date...

Page 403
...of Chicago and State of Illinois on the 13th day of February, 2007. EXELON GENERATION COMPANY, LLC By: /s/ JOHN W. ROWE Name: John W. Rowe Title: Chairman, Chief Executive Officer and President, Exelon Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed...

Page 404
...the City of Chicago and State of Illinois on the 13th day of February, 2007. COMMONWEALTH EDISON COMPANY By: Name: Title: /s/ FRANK M. CLARK Frank M. Clark Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the...

Page 405
...Chicago and State of Illinois on the 13th day of February, 2007. PECO ENERGY COMPANY By: /s/ JOHN W. ROWE Name: John W. Rowe Title: Chairman, Chief Executive Officer and President, Exelon, and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed...

Page 406
Exhibit 10.52 EXELON CORPORATION EXECUTIVE DEATH BENEFITS PLAN

Page 407
...Section 4.6. Supplemental Death Benefits for Participant who Dies While Employed or While Receiving Salary Continuation Payments Benefits for Participant who Dies After Retirement Timing of Payment of Benefit Distribution of Policy Beneficiary Designation No Benefits if Employment Terminates for any...

Page 408
...and not in any way dependent upon, connected to or related to any retirement benefits provided by the Employers and shall not be deemed to be benefits under an "employee pension benefit plan" as that term is defined in ERISA. ARTICLE 2 DEFINITIONS As used herein the following words and phrases shall...

Page 409
... and which may be used to provide funds to the Company in order to provide the benefits under the Plan. (L) Retirement. Termination of employment under circumstances that entitle a Participant to retiree medical benefits under the Exelon Corporation Employee's Medical Expense Plan or termination or...

Page 410
... as a condition of participation to execute such forms and documents as the Company or its duly authorized designee may require from time to time. ARTICLE 4 AMOUNT AND PAYMENT OF BENEFITS Section 4.1. Supplemental Death Benefits for Participant who Dies While Employed or While Receiving Salary...

Page 411
... by an Employer or by the Participant for any reason other than death or Retirement, no benefits shall be paid under this Plan to the Participant or his or her Beneficiary. ARTICLE 5 ADMINISTRATION Section 5.1. In General. (A) The Company shall be the named fiduciary of the Plan. The Vice President...

Page 412
... description of the claim review procedure under the Plan and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under Section 502 of ERISA following an adverse benefit determination on review. The Plan Administrator shall also advise...

Page 413
... submit to the Senior Vice President and Chief Administrative Officer of the Company written comments, documents, records and other information relating to claim for benefits. If a request is so filed, review of the adverse benefit determination shall be made by the Senior Vice President and Chief...

Page 414
...shall have the right only as a general creditor of his Employer to receive benefits from his Employer on the terms and conditions herein provided. Notwithstanding the foregoing, the Company may, in order to provide funds to the Company to satisfy its obligations hereunder, purchase a policy insuring...

Page 415
... the rights under the Plan of any person to receive or be entitled to receive benefits such person has accrued under the Plan as of the date the amendment is adopted. Section 7.2. Termination of the Plan. The Company may at any time terminate the Plan by resolution adopted by its Board of Directors...

Page 416
IN WITNESS WHEREOF, Exelon Corporation has caused this Plan to be executed by its duly authorized officers on this 18 th day of December, 2003. EXELON CORPORATION By: /s/ S. Gary Snodgrass Title: Senior Vice President Chief Human Resources Officer Attest: _____ 9

Page 417
...TO EXELON CORPORATION EXECUTIVE DEATH BENEFITS PLAN WHEREAS, Exelon Corporation, a Pennsylvania corporation (the "Company"), has adopted and maintains a supplemental death benefits plan for the benefit of selected executives titled "Exelon Corporation Executive Death Benefits Plan" (the "Plan"); and...

Page 418
...amount of the Gross-Up Payment equal to all incomes taxes imposed upon the income attributable to the distribution of the Policy. IN WITNESS WHEREOF, Exelon Corporation has caused this Amendment to be executed by its duly authorized officer on this day of , 2006. EXELON CORPORATION By: Title: Attest...

Page 419
...subject to awards granted during any year by the Chief Executive Officer, the number and class of securities subject to each outstanding option and the purchase price per security, and the terms of each outstanding SAR, Restricted Stock Award, Restricted Stock Unit Award, Performance Share Award and...

Page 420
IN WITNESS WHEREOF, the Company has caused this amendment to be executed this 2006. Exelon Corporation By: day of , S. Gary Snodgrass Executive Vice President & Chief Human Resources Officer

Page 421
...in order to avoid any adjustment in outstanding options made to reflect a change in the Company's capitalization being treated as a new grant for purposes of applicable accounting standards. NOW, THEREFORE, the Plan is amended for all outstanding awards under the Plan, effective December 4, 2006, as...

Page 422
IN WITNESS WHEREOF, the Company has caused this amendment to be executed this Exelon Corporation By: S. Gary Snodgrass Executive Vice President & Chief Human Resources Officer day of , 2006. 2

Page 423
Exhibit 10.56 EXELON CORPORATION DEFERRED COMPENSATION PLAN (As Amended and Restated Effective January 1, 2005)

Page 424
...2005) ARTICLE I Plan Merger; Purpose Commonwealth Edison Company, a wholly-owned subsidiary of Exelon Corporation (the "Company"), sponsored the Commonwealth Edison Company Excess Benefit Savings Plan, as established, effective August 1, 1994, as subsequently amended from time to time and as amended...

Page 425
... such a plan for the benefit of its employees but for the application of any of the Limitations, to provide for payment of deferred compensation to such employees, and to provide uniform rules and regulations of plan administration. ARTICLE II Definitions All capitalized terms used herein shall...

Page 426
... after the effective date of the election and the date on which the employee's before-tax contributions to the 401(k) Plan relating to such Compensation would exceed one or more of the Limitations. Any changes to a Participant's election under the 401(k) Plan during a Plan Year shall not affect...

Page 427
...separates from service during such Plan Year may elect to receive payment of his or her non-qualified supplemental pension benefit (if any) pursuant to the distribution terms of this Plan by filing an election in the time and manner specified by the Plan Administrator, which for the Plan Year ending...

Page 428
...'s Matching Contribution Account shall be credited as units of Exelon Corporation common stock valued as of the date on which such amounts are credited. 5.3 Vesting. Amounts credited to a Participant's Retirement Account and Matching Contribution Account pursuant to the terms of the Plan shall be...

Page 429
... on or after January 1, 2006 and upon or after attaining Retirement Age may elect to receive payment of his or her account balances hereunder (together with his or her account balance under the Exelon Corporation Stock Deferral Plan) in one of the following forms by filing an election in the manner...

Page 430
... begin at least five years later than the date on which such distribution was previously scheduled to be made or begin pursuant to Section 6.2(a). In the event such a deferred payment election does not become effective, the time and manner of payment of such Participant's accounts shall be governed...

Page 431
... and IRS Notice 2006-79 (the "Transition Rule"), Participants may make the special distribution elections described in Sections 6.7(a) and (b). (a) Each Participant may elect or change the form of payment of such Participant's benefit payable upon separation from service by submitting an election...

Page 432
... of the Board of Directors of the Company on December 5, 2006, each Participant who elected pursuant to Section 4.3 to defer receipt of a 2006 annual incentive award payable to such Participant by an Employer shall be deemed to have elected, pursuant to the Transition Rule, to change the date on...

Page 433
... the obligation of the Employers under the Plan shall be deemed satisfied to the extent paid from the trust. ARTICLE VIII Administration 8.1 Plan Administrator. The Plan shall be administered by the Director, Employee Benefit Plans & Programs of the Company (the "Plan Administrator"), or such other...

Page 434
...taxes imposed under section 3121 of the Code in respect of amounts credited to the Participant's accounts hereunder for such year. 10.2 Nonassignment of Benefits. Notwithstanding anything contained in any 401(k) Plan to the contrary, it shall be a condition of the payment of benefits under this Plan...

Page 435
... The provisions of the Plan shall bind and inure to the benefit of the Company and each Subsidiary and ...Exelon Corporation has caused this instrument to be executed effective as of January 1, 2005. EXELON CORPORATION By: S. Gary Snodgrass Executive Vice President and Chief Human Resources Officer...

Page 436
Exhibit 10.57 EXELON CORPORATION STOCK DEFERRAL PLAN (As Amended and Restated Effective January 1, 2005)

Page 437
... be determined under the terms of the Plan as in effect on the date of such termination of employment. Exelon Corporation (the "Company") maintains the Plan in order to provide to certain key employees of the Company and participating affiliates (collectively, the "Employers") the opportunity to...

Page 438
.... Each Participant shall remain a Participant until such individual receives a distribution of the entire balance of his or her Deferred Stock Account hereunder; provided, however, that a Participant who is, as of any applicable election date, no longer described in paragraphs (a) or (b) of Section...

Page 439
... shall be credited to each Participant's Deferred Stock Account as a number of additional shares of Exelon Stock determined by dividing the aggregate amount of such dividend equivalents by the purchase price used under the Exelon Corporation Dividend Reinvestment and Stock Purchase Plan related to...

Page 440
... his or her account balances under the Exelon Corporation Deferred Compensation Plan) in one of the following forms by filing an election in the manner specified by the Plan Administrator: (i) a lump sum; or (ii) a series of annual installments over a period of up to 15 years. Each such Participant...

Page 441
... begin at least five years later than the date on which such distribution was previously scheduled to be made or begin pursuant to Section 6.2(a). In the event such a deferred payment election does not become effective, the time and manner of payment of such Participant's accounts shall be governed...

Page 442
... in accordance with any applicable law or regulation. In addition, the Company may adjust the timing of any payment under this Plan consistent with the tax treatment of such payment including, without limitation, to comply with Section 409A of the Code. 5.7 Facility of Payment. Whenever and as often...

Page 443
...be administered by the Vice President, Corporate Compensation, of the Company (the "Plan Administrator"). The Plan Administrator shall determine the rights of any employee or former employee of an Employer to benefits hereunder. The Plan Administrator has the sole and absolute power and authority to...

Page 444
... senior officer to whom the Company has delegated amendment authority may elect, in his or her sole discretion, to pay out all accounts to Participants and beneficiaries within 12 months after the occurrence of such Change in Control Event.. ARTICLE IX Miscellaneous 9.1 FICA Taxes. Notwithstanding...

Page 445
... of section 409A of the Code, and shall be interpreted and construed accordingly. IN WITNESS WHEREOF, Exelon Corporation has caused this Plan to be executed effective as of January 1, 2005. EXELON CORPORATION By: S. Gary Snodgrass Executive Vice President & Chief Human Resources Officer 10

Page 446
EXHIBIT 14 Approved by Exelon Board of Directors 06-27-06 EXELON CORPORATION CODE OF BUSINESS CONDUCT

Page 447
Approved by Exelon Board of Directors 06-27-06 MESSAGE FROM THE CEO Our Vision is to become the very best electric and gas company in the United States. To realize our Vision, we must commit ourselves not only to safety, accountability, and continuous improvement, but to the highest ethical ...

Page 448
... Community Relations, Employee and Corporate Contributions WORKING WITH CUSTOMERS AND SUPPLIERS Customer Relations Procurement Standards CONFLICTS OF INTEREST Conflict of Interest Generally Gifts and Gratuities Entertainment Corporate Opportunities Outside Activity PROTECTING COMPANY ASSETS Company...

Page 449
Approved by Exelon Board of Directors 06-27-06 Corporate Contributions and Lobbying LEGAL AND REGULATORY COMPLIANCE Senior Officers Insider Trading and Stock Tipping SEC Code of Professional Conduct Affiliate Non-discrimination Energy Trading Rules Antitrust and Unfair Competition Foreign Corrupt ...

Page 450
... by Exelon Board of Directors 06-27-06 INTRODUCTION Using This Guide The success of Exelon Corporation, including its subsidiaries ("Exelon" or the "Company"), is dependent on all of us conducting our activities in accordance with the highest ethical standards and applicable law. This Exelon Code...

Page 451
... contractors ("Suppliers") - agree to follow applicable Exelon ethical and legal standards. Supervisors and employees must Identify those persons and companies outside Exelon whose activities on behalf of Exelon may involve issues covered by the Exelon Code. Require those persons and companies to...

Page 452
... by Exelon Board of Directors 06-27-06 â€¢ Take necessary action, up to and including terminating a contract with anyone representing Exelon, if the person fails to honor his or her agreement to abide by the Exelon Code. Other Codes of Conduct Since we operate in a heavily regulated industry...

Page 453
... Board of Directors 06-27-06 CORPORATE CITIZENSHIP AND THE EXELON COMMUNITY Fair Treatment and Diversity It is Exelon's policy to provide equal employment opportunity and fair treatment for everyone. Whenever and wherever individuals engage in activities on behalf of the Company, they have a right...

Page 454
... the Company's assets. If you have problems related to alcohol or drugs, you are encouraged to seek confidential assistance from the Employee Assistance Program or other qualified professionals. Employees may contact a program representative at 1-866-872-1666. Main Obligations Do not use, possess...

Page 455
... frustrations Comments about plans to hurt another person or persons Environment Exelon will conduct its operations in a way that preserves and protects the environment, and complies with applicable environmental laws and regulations and other relevant standards to which the Company may voluntarily...

Page 456
... every employee's right and obligation to question, stop and correct any unsafe condition or behavior - and maintain an open and honest dialogue with our employees on health and safety issues and performance Continually improve safety performance to become the safest electric and gas utility 11...

Page 457
... by Exelon Board of Directors 06-27-06 Community Relations, Employee and Corporate Contributions We are committed to being a good corporate citizen and we support and encourage employee involvement in community activities and professional organizations. We are also proud to provide financial support...

Page 458
Approved by Exelon Board of Directors 06-27-06 WORKING WITH CUSTOMERS AND SUPPLIERS Customer Relations Customers purchase from companies that understand - and sometimes even anticipate - their needs. We must satisfy fundamental customer needs like quality, reliability, and service, and in a way that...

Page 459
Approved by Exelon Board of Directors 06-27-06 Main Obligations Make procurement decisions with integrity and based on criteria that will deliver the best total value to Exelon, such as quality, price, service, reliability, availability, technical excellence and delivery Deal with all suppliers ...

Page 460
... the supplier An employee approves the selection of a family member's or close friend's firm for work, even if the selection results in lower cost to Exelon An employee having a material financial interest in an existing or proposed transaction to which the Company is or is likely to become a party...

Page 461
... it with an explanation regarding Exelon's policy and notify your manager or the Ethics and Compliance Office Where it is customary and lawful in some foreign countries for business executives doing business with each other to give or exchange Gifts, respect these customs when appropriate, but only...

Page 462
...any third party Do not use a Company Asset, Confidential Information or your position for personal gain or advantage or for the gain of advantage of any third party Do not compete with the Company Outside Activities Exelon employees actively offer their time and talents to serve in public office and...

Page 463
... by Exelon Board of Directors 06-27-06 Main Obligations â€¢ Employees should report to their manager any public office or position they hold, disclose the potential for any conflict or appearance of any conflict to interested parties (including the Company), and disqualify themselves from Company...

Page 464
... by Exelon Board of Directors 06-27-06 PROTECTING COMPANY ASSETS Company Assets Generally We are entrusted with valuable Company assets. They consist of all property that the Company owns or uses to achieve business objectives ("Company Assets"). They include: physical assets like land, facilities...

Page 465
Approved by Exelon Board of Directors 06-27-06 Main Obligations Be vigilant to protect our Confidential Information Safeguard Confidential Information by marking information accordingly, keeping it secure, and limiting access to those who need to know it in order to do their job Do not divulge ...

Page 466
Approved by Exelon Board of Directors 06-27-06 Main Obligations Maintain, retain and destroy business records in accordance with the Company's Records Management Policy and do not retain applicable records longer than necessary Act with an understanding that almost all business records may become ...

Page 467
... complete, fair and accurate reporting of financial and non-financial information pertaining to business transactions. Management is charged with this accountability on behalf of the organization's stakeholders and is held accountable for this accountability by the Exelon Board of Directors. 22 â€¢

Page 468
...Exelon Board of Directors 06-27-06 Main Obligations â€¢ â€¢ Prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and Exelon accounting procedures Maintain a sound system of internal controls that provides reasonable assurance that operations and activities...

Page 469
... by Exelon Board of Directors 06-27-06 â€¢ taking any action, either alone or with another employee or a supplier, to improperly influence, coerce, manipulate or mislead any auditor or investigator engaged in the performance of an audit or other review of the Company's transactions, activities or...

Page 470
Approved by Exelon Board of Directors 06-27-06 GOVERNMENT RELATIONS Government Business Exelon is committed to conducting its business with governmental agencies and officials consistent with the highest ethical standards and in compliance with applicable laws, regulations and rules. Exelon is also ...

Page 471
... purposes on Company time and may not require other employees, including secretarial or other support staff, to perform tasks in support of an employee's personal political activities Employees may use an insignificant amount of Company resources, such as phones, fax machines or office supplies for...

Page 472
...making corporate contributions and conducting activities to support state or local candidates or campaigns should be reviewed in advance with Government Affairs, the Legal Department or the Ethics and Compliance Office Certain management level employees at Exelon and its subsidiaries can use Company...

Page 473
...In order for these executives to be effective in meeting these principles, all employees must act with the same high regard for fairness, honesty, accuracy and good faith. Insider Trading or Dealing and Stock Tipping Exelon is committed to fair and open markets for buying and selling its public...

Page 474
... to know Members of the Board of Directors, officers and certain designated employees are required to obtain approval from the Office of the Corporate Secretary prior to any purchase or sale of Exelon stock Refer to the Buying and Selling Exelon Securities Corporate Procedure Things to watch out...

Page 475
... Exelon Board of Directors 06-27-06 Affiliate Non-discrimination The Federal Energy Regulatory Commission and the state utility commissions in New Jersey, Pennsylvania and Illinois have adopted regulations governing the business dealings between utility subsidiaries of Exelon Energy Delivery Company...

Page 476
... market prices, market rules or market conditions Operate and schedule generating facilities, undertake maintenance, declare outages and commit or otherwise bid supply in a manner that complies with applicable power market rules Comply with the rules and reliability requirements of transmission...

Page 477
...and records fairly and accurately reflect business activities and transactions. It is Exelon policy to present financial statements fairly and accurately and in accordance with generally accepted accounting principles. Sales and Marketing Competitive Practices While information about our competitors...

Page 478
... be submitted to the Corporate General Counsel, or his or her designee, for review and resolution. Any request for a waiver by any Director or Executive Officer must be submitted to the Board of Directors or a Board Committee. All waivers will be reported to the Exelon Ethics and Compliance Council...

Page 479
... Office will be handled promptly, thoroughly, fairly, and discreetly. Other avenues for guidance and reporting concerns in their respective areas are: Human Resources, Legal, Corporate Security, Internal Audit and Environment, Health and Safety. Exelon employees may also contact the Exelon Help Line...

Page 480
... by Exelon Board of Directors 06-27-06 Ethics and Compliance Help Line/Compliance Reporting Website If employees are uncomfortable talking to someone at their location or at the Company regarding Code guidance or a concern, they may call the Exelon Help Line at 1-800-23-ETHIC. The Help Line is...

Page 481
Approved by Exelon Board of Directors 06-27-06 RETALIATION Any individual may in good faith report a concern regarding the conduct of another person or cooperate in any investigation regarding a suspected violation of the law or the Code without fear of reprisal, harassment, discrimination or ...

Page 482
... way against anyone who in good faith reports a suspected violation of the law or the Code by another person Retaliates or discriminates in any way ... improvement plans, temporary suspension, demotion, financial sanctions, reimbursement for Exelon's losses or damages, and termination. The Company may ...

Page 483
... or manager are encouraged to contact the Ethics and Compliance Office or call the Help Line at 1-800-23-ETHIC. Accountability Each employee is accountable for understanding and complying with the Code and compliance is a condition of employment. Managers have the additional accountability to...

Page 484
... by Exelon Board of Directors 06-27-06 â€¢ Supporting a system for reporting concerns about ethics and unsafe conduct that protects employee confidentiality and anonymity to the fullest extent possible and ensures there is no retaliation against any employee for reporting a concern in good faith...

Page 485
EXHIBIT 21.1 Exelon Corporation Subsidiary Listing Affiliate Jurisdiction of Formation Adwin (Schuylkill) Cogeneration, Inc. Adwin Realty Company AllEnergy Gas & Electric Marketing Company, LLC AmerGen Clinton NQF, LLC AmerGen Consolidation, LLC AmerGen Energy Company, LLC AmerGen Oyster Creek NQF,...

Page 486
... Company, LLC Exelon Generation International, Inc. Exelon Hamilton, LLC Exelon Investment Holdings, LLC Exelon New Boston, LLC Exelon New England Development, LLC Exelon New England Holdings, LLC Exelon New England Power Marketing, Limited Partnership Exelon Peaker Development General, LLC Exelon...

Page 487
... Chicago Energy Project, LLC Spruce Equity Holdings, L.P. Spruce Holdings G.P. 2000, LLC Spruce Holdings L.P. 2000, LLC Spruce Holdings Trust Susquehanna Electric Company Susquehanna Power Company T.H. Green Electric Co., Inc. Tamuin Development Services, S. de R.L. de C.V. Tamuin Energy Management...

Page 488
... II TEG Holdings, LLC Termoelectrica del Golfo, S. de RL. de C.V. Termoelectrica Penoles, S. de R.L. de C.V. Texas Ohio Gas, Inc. The Proprietors of the Susquehanna Canal UII, LLC Unicom Assurance Company, Ltd. URI, LLC Wansley Holdings 1, LLC Wansley Holdings 2, LLC Zion 1 NQF, LLC Zion 2 NQF, LLC...

Page 489
... Exelon Generation Finance Company, LLC Exelon Generation International, Inc. Exelon Hamilton, LLC Exelon New Boston, LLC Exelon New England Development, LLC Exelon New England Holdings, LLC Exelon New England Power Marketing, Limited Partnership Exelon Peaker Development General, LLC Exelon Peaker...

Page 490
... Sithe Tamuin Investments, S. de R.L. de C.V. Southeast Chicago Energy Project, LLC Susquehanna Electric Company Susquehanna Power Company Tamuin Development Services, S. de R.L. de C.V. Tamuin Energy Management Services II, Inc. Tamuin Energy Management Services, Inc. Tamuin Holdings A, LLC Tamuin...

Page 491
Exhibit 21.3 Commonwealth Edison Company Subsidiary Listing Affiliate ComEd Financing II ComEd Financing III ComEd Funding, LLC ComEd Transitional Funding Trust Commonwealth Edison Company of Indiana, Inc. Edison Development Canada Inc. Edison Finance Partnership Delaware Delaware Delaware Delaware ...

Page 492
... Finance Company ExTel Corporation, LLC Horizon Energy Company PEC Financial Services, LLC PECO Energy Capital Corp. PECO Energy Capital Trust III PECO Energy Capital Trust IV PECO Energy Capital Trust V PECO Energy Capital Trust VI PECO Energy Capital, LP PECO Energy Transition Trust PECO Wireless...

Page 493
...PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (333-84446 and 333-108546) and on Form S-8 (No. 333-37082, 333-49780, 333-61390 and 333-127377) of Exelon Corporation of our report dated February 13, 2007, relating to the financial...

Page 494
... Statements on Form S-3 (No. 333-133966) and on Form S-8 (No. 333-33847) of Commonwealth Edison Company of our report dated February 13, 2007, relating to the financial statements and financial statement schedule, which appears in this Form 10-K. PricewaterhouseCoopers LLP Chicago, Illinois...

Page 495
... reference in the Registration Statements on Form S-3 (No. 333-105207) of PECO Energy Company of our report dated February 13, 2007, relating to the financial statements and financial statement schedule, which appears in this Form 10-K. PricewaterhouseCoopers LLP Chicago, Illinois February 13, 2007

Page 496
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 497
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 498
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 499
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 500
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 501
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 502
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 503
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 504
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 505
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 506
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 507
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 508
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 509
...of them, attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 510
...attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 511
...attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 512
...attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 513
...attorney for me and in my name and on my behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2006 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all things...

Page 514
... 15d-14(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934 I, John W. Rowe, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Exelon Corporation; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to...

Page 515
... material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 13, 2007 /s/ JOHN F. YOUNG 3. 4. Executive Vice President, Finance and Markets and Chief Financial Officer (Principal Financial Officer)

Page 516
... 15d-14(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934 I, John L. Skolds, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Exelon Generation Company, LLC; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact...

Page 517
... 15d-14(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934 I, John F. Young, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Exelon Generation Company, LLC; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact...

Page 518
Exhibit 31-5 CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934 I, Frank M. Clark, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Commonwealth Edison Company; Based on my knowledge, this report does not contain any untrue ...

Page 519
... involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 13, 2007 /s/ ROBERT K. MCDONALD 3. 4. Senior Vice President, Chief Financial Officer, Treasurer and Chief Risk Officer (Principal Financial Officer)

Page 520
...; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 13, 2007 /s/ JOHN L. SKOLDS 3. 4. President, Exelon Energy Delivery (Principal Executive Officer)

Page 521
...fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 13, 2007 /s/ JOHN F. YOUNG 3. 4. Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Page 522
...Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Exelon Corporation. Date: February 13, 2007 /s/ JOHN W. ROWE John W. Rowe Chairman, Chief Executive Officer and President...

Page 523
...and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Exelon Corporation. Date: February 13, 2007 /s/ JOHN F. YOUNG John F. Young Executive Vice President, Finance and Markets and Chief Financial Officer 410

Page 524
... 63 of Title 18 United States Code The undersigned officer hereby certifies, as to the Report on Form 10-K of Exelon Generation Company, LLC for the year ended December 31, 2006, that (i) the report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934...

Page 525
...of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Exelon Generation Company, LLC. Date: February 13, 2007 /s/ JOHN F. YOUNG John F. Young Executive Vice President and Chief Financial Officer 412

Page 526
... 63 of Title 18 United States Code The undersigned officer hereby certifies, as to the Report on Form 10-K of Commonwealth Edison Company for the year ended December 31, 2006, that (i) the report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934...

Page 527
...information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Commonwealth Edison Company. Date: February 13, 2007 /s/ ROBERT K. MCDONALD Robert K. McDonald Senior Vice President, Chief Financial Officer, Treasurer and Chief Risk...

Page 528
...Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code The undersigned officer hereby certifies, as to the Report on Form 10-K of PECO Energy Company for the year ended December 31, 2006, that (i) the report fully complies with the requirements of section 13(a) or 15(d) of...

Page 529
... Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of PECO Energy Company. Date: February 13, 2007 /s/ JOHN F. YOUNG John F. Young Executive Vice President and Chief Financial Officer 416

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