ComEd 2006 Annual Report Download - page 316

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)
Deferred income taxes. These costs represent the difference between the method by which the
regulator allows for the recovery of income taxes and how income taxes would be recorded by
unregulated entities. Regulatory assets and liabilities associated with deferred income taxes, recorded
in compliance with SFAS No. 71 and SFAS No. 109, include the deferred tax effects associated
principally with liberalized depreciation accounted for in accordance with the rate-making policies of the
ICC and PAPUC, as well as the revenue impacts thereon, and assume continued recovery of these
costs in future rates. See Note 12—Income Taxes for further information.
Debt Costs. The reacquired debt costs represent premiums paid for the early extinguishment and
refinancing of long-term debt, which is amortized over the life of the new debt issued to finance the
debt redemption. Interest-rate swap settlements are deferred and amortized over the period that the
related debt is outstanding. Recovery of early debt retirement costs, which will be amortized over the
life of the related retired debt, was granted to ComEd in the July 26, 2006 ICC rate order. See Note 4—
Regulatory Issues.
Severance costs. These costs represent previously incurred severance costs that ComEd was
granted recovery of in the December 20, 2006 ICC rehearing order. Recovery is over 7.5 years. See
Note 4—Regulatory Issues.
Conditional asset retirement obligations. These costs represent future removal costs
associated with retirement obligations which will be collected over the remaining lives of the underlying
assets. See Note 13—Asset Retirement Obligations for further information.
MGP remediation costs. Recovery of these items was granted to ComEd in the July 26, 2006
ICC rate order. See Note 4—Regulatory Issues. For PECO, these costs represent estimated
MGP-related environmental remediation costs at PECO which are recoverable through regulated gas
rates. The period of recovery will depend on the timing of the actual expenditures.
Non-pension postretirement benefits. These costs at PECO are the result of transitioning to
SFAS No. 106 in 1993, which are recoverable in rates through 2012.
Rate case costs. Recovery of these items was granted to ComEd in the July 26, 2006 ICC rate
order. Recovery is over three years. See Note 4—Regulatory Issues.
DOE facility decommissioning. These costs represent PECO’s share of recoverable
decommissioning and decontamination costs of the DOE nuclear fuel enrichment facilities established
by the National Energy Policy Act of 1992.
Procurement case costs. Recovery of these items was granted to ComEd in the July 26, 2006
ICC rate order. Recovery is over three years. See Note 4—Regulatory Issues.
Nuclear decommissioning. These amounts represent future nuclear decommissioning costs that
exceed (regulatory asset) or are less than (regulatory liability) the associated decommissioning trust
fund assets. Exelon believes the trust fund assets, including prospective earnings thereon and any
future collections from customers, will equal the associated future decommissioning costs at the time of
decommissioning. See Note 13—Asset Retirement Obligations for further information.
311