ComEd 2006 Annual Report Download - page 17

FERC. Exelon’s filing, supported by an updated market-power analysis, demonstrated that Exelon
continues to be entitled to market-based rates. The time period for interventions expired on January 5,
2007, no party intervened, and on February 9, 2007, FERC accepted Exelon’s CIS filing. See Note 4 of
the Combined Notes to Consolidated Financial Statements for further information on 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 zones for capacity phased in over a several year period beginning on June 1, 2006. On
November 5, 2005, PJM proposed to delay the effective date of the RPM until June 1, 2007. On
April 20, 2006, FERC issued an order generally finding aspects of PJM’s RPM filing to be just and
reasonable, but FERC also established further procedures to resolve the remaining issues and
encouraged the parties to seek a negotiated resolution. A final settlement was filed with FERC on
September 29, 2006 and FERC issued its order approving the settlement, subject to conditions, on
December 22, 2006. FERC’s adoption of the settlement proposal of September 2006 is expected to
have a favorable impact for owners of generation facilities, and particularly for such facilities located in
constrained zones. The final revenue impact of the settlement on Generation, particularly over an
extended time period, however cannot be estimated at this time.
FERC has also denied requests for rehearing of its April 20, 2006 order. The time for filing a
petition for review of FERC’s April 2006 order will expire on February 20, 2007. In addition, FERC’s
order approving the settlement subject to conditions is subject to requests for rehearing and judicial
review. PJM will almost certainly implement RPM in 2007 notwithstanding, as FERC’s orders are rarely
stayed, and therefore almost always remain in effect, pending appellate review. The first auction, which
is scheduled to occur in April 2007, will allow Generation to better estimate the revenue impact for the
period June 1, 2007 through May 31, 2008.
Fuel
The following table shows sources of electric supply in gigawatthours (GWhs) for 2006 and
estimated for 2007:
Source of Electric Supply
2006 2007 (Est.)
Nuclear units (a) ........................................... 139,610 139,752
Purchases—non-trading portfolio ............................ 38,297 29,766
Fossil and hydroelectric units ................................ 12,773 15,285
Total supply .............................................. 190,680 184,803
(a) Represents Generation's proportionate share of the output of its nuclear generating plants, including Salem, which is
operated by PSEG Nuclear.
The fuel costs for nuclear generation are substantially less than for fossil-fuel generation.
Consequently, nuclear generation is generally the most cost-effective way for Generation to meet its
obligations to ComEd and PECO, some of Generation’s retail business requirements, and for sales to
other utilities.
The cycle of production and utilization of nuclear fuel includes the mining and milling of uranium
ore into uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride, the
enrichment of the uranium hexafluoride and the fabrication of fuel assemblies. Generation has uranium
concentrate inventory and supply contracts sufficient to meet all of its uranium concentrate
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