ComEd 2006 Annual Report Download - page 42

in 2007 compared to 2006 by approximately $37 million as Generation continues to invest in
equipment upgrades to ensure safe reliable operations. Total operating and maintenance expenditures
are expected to increase by approximately $52 million in 2007 compared to 2006 as a result of
inflationary cost increases.
Nuclear fuel quality.The quality of nuclear fuel utilized by Generation can affect the efficiency
and costs of Generation’s operations. Certain of Generation’s nuclear units have been identified as
having a limited number of fuel performance issues. Remediation actions, including those required to
address performance issues, could result in increased costs due to accelerated fuel amortization and/
or increased outage costs. It is difficult to predict the total cost of these remediation procedures.
Spent nuclear fuel storage. The approval of a national repository for the storage of spent nuclear
fuel, such as the one proposed for Yucca Mountain, Nevada, and the timing of such facility opening,
will significantly affect the costs associated with storage of spent nuclear fuel, and the ultimate
amounts received from the DOE to reimburse Generation for these costs. Also, any regulatory action
relating to the availability of a repository for spent nuclear fuel may adversely affect Generation’s ability
to fully decommission the nuclear units. In addition, through the NRC’s “waste confidence” rule, the
NRC has determined that, if necessary, spent fuel generated in any reactor can be stored safely and
without significant environmental impacts for at least 30 years beyond the licensed life for operation,
which may include the term of a revised or renewed license of that reactor, at its spent fuel storage
basin or at either onsite or offsite independent spent fuel storage installations.
License renewals. Generation cannot assure that economics will support the continued operation
of the facilities for all or any portion of any renewed license. If the NRC does not renew the operating
licenses for Generation’s nuclear stations or a station cannot be operated through the end of its
operating license, Generation’s results of operations could be adversely affected by increased
depreciation rates and accelerated future decommissioning costs.
Should a national policy for the disposal of spent nuclear fuel not be developed, the unavailability
of a repository for spent nuclear fuel could become a consideration by the NRC during future nuclear
license renewal proceedings, including applications for new licenses, and may affect Generation’s
ability to fully decommission its nuclear units.
Environmental risk. If application of the Section 316(b) regulations establishing a national
requirement for reducing the adverse impacts from the entrainment and impingement of aquatic
organisms at existing generating stations requires the retrofitting of cooling water intake structures at
Oyster Creek, Salem or other Exelon power plants, this could result in material costs of compliance. In
addition, the amount of the costs required to retrofit Oyster Creek may negatively impact Generation’s
decision to renew the operating license.
Regulatory risk.The NRC may modify, suspend or revoke licenses, shut down a nuclear facility
and impose civil penalties for failure to comply with the Atomic Energy Act, related regulations or the
terms of the licenses for nuclear facilities. A change in the Atomic Energy Act or the applicable
regulations or licenses may require a substantial increase in capital expenditures or may result in
increased operating or decommissioning costs and significantly affect Generation’s results of
operations or financial position. Events at nuclear plants owned by others, as well as those owned by
Generation, may cause the NRC to initiate such actions.
Operational risk.Operations at any of Generation’s nuclear generation plants could degrade to
the point where Generation has to shut down the plant or operate at less than full capacity. If this were
to happen, identifying and correcting the causes may require significant time and expense. Generation
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