ComEd 2006 Annual Report Download - page 112

PJM transmission. ComEd’s transmission revenues increased in 2005 due to ComEd’s May 1,
2004 entry into PJM.
T&O / SECA rates. Revenues decreased as a result of the elimination of T&O rates in accordance
with FERC orders that became effective December 1, 2004. Effective December 1, 2004, PJM became
obligated to pay SECA collections to ComEd, and ComEd became obligated to pay SECA charges—
see “Purchased Power Expense” below. See Note 4 of the Combined Notes to Consolidated Financial
Statements for more information on T&O / SECA rates.
Purchased Power Expense.The changes in purchased power expense for 2005 compared to
2004 consisted of the following:
Increase
(decrease)
Prices ....................................................................... $606
Weather ..................................................................... 200
Customer choice .............................................................. 65
PJM ........................................................................ 63
Volume ...................................................................... 7
T&O collections / SECA rates ................................................... (15)
Other ....................................................................... 6
Increase in purchased power expense ............................................ $932
Prices. Purchased power increased due to higher prices associated with ComEd’s PPA with
Generation of $497 million, and ancillary services of $109 million from PJM. In 2000, ComEd and
Generation entered into a PPA that fixed the pricing for purchased power through December 31, 2004
based upon the then current market prices. As a result of the Amended and Restated Purchase Power
Agreement with Generation, starting in January 1, 2005, ComEd began paying higher prices for its
purchased power from Generation and ceased to procure its ancillary services from Generation. This
agreement fixed the pricing for purchased power through December 31, 2006 based upon the current
market prices as of April 30, 2004.
Weather. The increase in purchased power expense attributable to weather was due to favorable
weather 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 supplier.
PJM. The increase reflects higher transmission and purchased power expense of $57 million due
to ComEd’s May 1, 2004 entry into PJM and PJM administrative fees that increased by $6 million over
2004 fees.
T&O Collections / SECA rates. Prior to FERC orders issued in November 2004, ComEd collected
T&O rates for transmission service scheduled out of or across ComEd’s transmission system. Rates
collected as the transmission owner were recorded in operating revenues. After joining PJM on May 1,
2004, PJM allocated T&O collections to ComEd as a load-serving entity. The collections received by
ComEd as a load-serving entity were recorded as a decrease to purchased power expense. ComEd’s
purchased power expense increased $14 million due to ComEd no longer collecting T&O revenues in
2005.
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