ComEd 2006 Annual Report Download - page 14

Generation believes that the decommissioning trust funds for the nuclear generating stations
formerly owned by ComEd and PECO, the expected earnings thereon and, in the case of PECO, the
amounts currently being collected from PECO’s customers will be sufficient to fully fund Generation’s
decommissioning obligations for the nuclear generating stations formerly owned by ComEd and PECO.
Generation further believes the AmerGen nuclear decommissioning trust funds together with expected
investment earnings thereon will be sufficient to fully fund AmerGen’s decommissioning obligations.
See Critical Accounting Policies and Estimates within ITEM 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operation—Generation and Note 13 of the Combined
Notes to Consolidated Financial Statements for a further discussion of nuclear decommissioning.
Zion, a two-unit nuclear generation station, Peach Bottom Unit 1 and Dresden Unit 1 have ceased
power generation. SNF at Zion and Dresden Unit 1 is currently being stored in on-site storage pools
and dry cask storage, respectively, until a permanent repository under the NWPA is completed. All of
Peach Bottom Unit 1’s SNF has been moved off site. The present value of Generation’s liability to
decommission Zion, Peach Bottom Unit 1 and Dresden Unit 1 was $795 million at December 31, 2006.
As of December 31, 2006, nuclear decommissioning trust funds set aside to pay for this obligation
were $1.2 billion.
Fossil and Hydroelectric Facilities
Generation operates various fossil and hydroelectric facilities and maintains ownership interests in
several other facilities such as LaPorte, Keystone, Conemaugh and Wyman, which are operated by
third parties. In 2006 and 2005, approximately 8% of Generation’s electric supply was generated from
Generation’s owned fossil and hydroelectric generating facilities. The majority of this output was
dispatched to support Generation’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. Hydroelectric plants are licensed by FERC. The
Muddy Run and Conowingo facilities have licenses that expire in September 2014. Generation is in the
process of performing pre-application analyses and anticipates filing a Notice of Intent to renew the
licenses in 2009 pursuant to FERC regulations. For those plants located within PJM Interconnection,
LLC (PJM) or the New England control area administered by ISO New England Inc. (ISO-NE), notice is
required before a plant can be retired.
Insurance. Generation does not purchase business interruption insurance for its wholly owned
fossil and hydroelectric operations. Generation maintains both property damage and liability insurance.
For property damage and liability claims, Generation is self-insured to the extent that losses are within
the policy deductible or exceed the amount of insurance maintained. Such losses could have a
material adverse effect on Exelon and Generation's financial condition and their results of operations
and cash flows. For information regarding property insurance, see ITEM 2. Properties—Generation.
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