ComEd 2006 Annual Report Download - page 193

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 data unless otherwise noted)
Average Service Life Percentage by Asset Category Exelon Generation ComEd PECO
2006
Electric—transmission and distribution (a) ...................... 2.95% N/A 3.34% 2.01%
Electric—generation ....................................... 3.18% 3.18% N/A N/A
Gas (a) .................................................. 1.73% N/A N/A 1.73%
Common—electric and gas (a) ............................... 6.04% N/A N/A 6.04%
Average Service Life Percentage by Asset Category Exelon Generation ComEd PECO
2005
Electric—transmission and distribution ........................ 3.05% N/A 3.44% 2.11%
Electric—generation ....................................... 3.50% 3.50% N/A N/A
Gas .................................................... 2.32% N/A N/A 2.32%
Common—electric and gas ................................. 8.06% N/A N/A 8.06%
Average Service Life Percentage by Asset Category Exelon Generation ComEd PECO
2004
Electric—transmission and distribution ........................ 3.08% N/A 3.49% 2.14%
Electric—generation ....................................... 3.26% 3.26% N/A N/A
Gas .................................................... 2.52% N/A N/A 2.52%
Common—electric and gas ................................. 4.60% N/A N/A 4.60%
(a) With respect to PECO, the decrease in depreciation percentages from 2005 to 2006 reflects extensions of service lives for
significant property, plant and equipment resulting from the latest depreciation study for which results were implemented
during 2006.
Amortization of regulatory assets is provided over the recovery period specified in the related
legislation or regulatory agreement. See Note 19—Supplemental Financial Information for further
information regarding Generation’s nuclear fuel, Generation’s asset retirement obligation, Generation’s
intangible assets and the amortization of ComEd’s and PECO’s regulatory assets.
Nuclear Generating Station Decommissioning (Exelon and Generation)
Exelon and Generation account for the costs of decommissioning Generation’s nuclear generating
stations in accordance with FASB Statement No. 143, “Accounting for Asset Retirement Obligations”
(SFAS No. 143). To estimate the fair value of its obligation, Generation uses a probability-weighted,
discounted cash flow model which considers multiple outcome scenarios based upon significant
estimates and assumptions, including decommissioning cost studies, cost escalation studies,
probabilistic cash flow models and discount rates. See Note 13—Asset Retirement Obligations for
information regarding the application of SFAS No. 143.
Capitalized Interest and Allowance for Funds Used During Construction (Exelon, Generation,
ComEd and PECO)
Exelon and Generation apply SFAS No. 34, “Capitalization of Interest Cost,” to calculate the costs
during construction of debt funds used to finance non-regulated construction projects.
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