ComEd 2006 Annual Report Download - 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 data unless otherwise noted)
separated its generation and other competitive businesses from its regulated energy delivery business
at ComEd and PECO.
AmerGen assumed responsibility for decommissioning the Clinton, Oyster Creek and Three Mile
Island (TMI) units upon the original purchase of each unit in 1999, 1999 and 2000, respectively.
Generation will begin decommissioning activities for each plant once that plant ceases operations.
Generation currently makes decommissioning payments for its retired units; however, those amounts
are not considered significant when compared to the total obligation.
As of December 31, 2006 and 2005, Exelon and Generation recorded nuclear decommissioning
obligations totaling $3.5 billion and $3.9 billion, respectively, which were determined in accordance with
SFAS No. 143. See Note 1—Significant Accounting Policies for information regarding the application of
SFAS No. 143.
Nuclear Decommissioning Trust Funds and Customer Collections
The trust funds that have been established to satisfy Exelon’s and Generation’s nuclear
decommissioning obligations were originally funded with amounts collected by customers. In certain
circumstances, these trust funds will continue to be funded by future collections from customers.
The trusts associated with the former ComEd units and the former PECO units have been funded
with amounts collected from the ComEd and PECO customers, respectively. Any funds remaining in
these trusts after decommissioning has been completed are required to be refunded to ComEd’s or
PECO’s customers as appropriate. However, if there are insufficient funds in the trusts associated with
the former ComEd units to pay for decommissioning costs, Generation is required to fund that shortfall.
Any potential shortfall is determined on a plant-by-plant basis, since the trust funds established for any
particular plant may not be used to fund the decommissioning obligations of any other plant.
If there are insufficient funds in the trusts associated with the former PECO units, PECO is allowed
to collect additional amounts from the PECO customers, subject to certain limitations, as prescribed by
an order from the PAPUC. Generally, PECO will not be allowed to collect amounts associated with the
first $50 million of any shortfall of trust funds compared to decommissioning obligations, as well as 5%
of any additional shortfalls. This initial $50 million and up to 5% of any additional shortfalls will be borne
by Generation as required by the corporate restructuring in 2001. Exelon and Generation expect total
decommissioning costs to exceed this threshold and expects to be held responsible for the entire $50
million, which is being recognized over the remaining life of the assets.
AmerGen is financially responsible for the decommissioning of the AmerGen plants and retains
any funds remaining in the trusts after decommissioning of those plants has been completed. Any
shortfall of funds necessary for decommissioning is required to be funded by AmerGen. AmerGen does
not currently collect any amounts from customers, nor is there any mechanism by which Generation
can seek to collect additional amounts from customers in order to pay the decommissioning costs of
the AmerGen units.
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