ComEd 2013 Annual Report Download - page 151

themark-to-market derivativeasset or liabilityposition wasbasedon thedifferencebetween ComEd’s costtopurchase energy on
thespot market andthecontractedprice.InExelon’s consolidatedfinancial statements, thefairvalue oftheintercompanyswap
recordedbyGeneration andComEd waseliminated.
Renewable Energy. OnDecember 17, 2010,ComEd enteredinto several 20-year floating-to-fixedenergy swap contractswith
unaffiliatedsuppliersfor the procurement oflong-termrenewable energy. Deliveryunder thecontractsbegan inJune 2012.Since
theswap contractswere deemedprudent by theIllinois Settlement Legislation,ensuringComEd offull recoveryin rates, the
changesinfairvalue each periodaswell asan offsettingregulatoryasset or liabilityare recordedbyComEd. ComEd doesnot earn
(pay) a return on theregulatoryasset (liability). Thebasis for themark-to-market derivativeasset or liabilityposition is basedon the
differencebetween ComEd’s costtopurchase energy on thespot market andthecontractedprice.
Energy and transmission programs. Startingin 2007, ComEd’s energy andtransmission costsare recoverable (refundable)under
ComEd’s ICC and/or FERC-approvedrates. ComEd earnsinterestonunder-recoveredcostsandpays interestonover-recovered
coststo customers. ThePECO energy costsrepresent the electric andgassupplyrelatedcostsrecoverable (refundable)under
PECO’s GSAand PGC, respectively. PECO earnsinterestontheunder-recoveredenergy andnatural gascostsandpays interest
on over-recoveredenergy andnatural gascoststo customers. Inaddition,beginningin 2013,thedeferred DSP I andIIProgram
costsare presentedon a net basis with PECO’s GSAunder (over)-recoveredenergy costs. ThePECO transmission costsrepresent
the electric transmission costsrecoverable (refundable)under theTSC under which PECO earnsinterestonunder-recoveredcosts
andpays interestonover-recoveredcoststo customers. AsofDecember 31,2013, PECO hadaregulatoryliabilitythat includedthe
over-recoveredelectric transmission costsof$8million,$34million relatedto theDSP programand$16million relatedto over-
recoverednatural gassupplycostsunder thePGC. AsofDecember 31,2012, PECO hadaregulatoryasset relatedto under-
recoveredtransmission costsof$1million andaregulatoryliabilitythat included $47 million relatedto over-recoveredelectric supply
costsunder theGSAand$1million relatedto over-recoverednatural gassupplycostsunder thePGC. TheBGE energy costs
represent the electric andgassupplyrelatedcostsrecoverable (refundable)from(to)customersunder BGE’s market-based SOS
andMBR programs, respectively. BGE doesnot earn or payinterestonunder-or over-recoveredcoststo customers. Asof
December 31,2013, BGE hadaregulatoryasset of$1million relatedto under-recoveredelectric supplycostsandaregulatory
liabilityof$11 million relatedto over-recoverednatural gassupplycosts. AsofDecember 31,2012, BGE hadaregulatoryasset of
$9 million relatedto under-recoveredelectric supplycostsandaregulatoryasset of$19million relatedto under-recoverednatural
gassupplycosts.
DSP Program costs.Theseamountsrepresent recoverable administrativecostsincurredrelatingto filing, procurement,and
information technology improvementsassociatedwith PECO’s PAPUC-approved DSP Programfor the procurement ofelectric
supplyfollowingtheexpiration of PECO’s generation rate capson December 31,2010.Thefilingandimplementation costsofthis
DSP Programare recoverable through theGSAover its29-monthterm, that began January1,2011.Theindependent evaluator
costsassociatedwithconductingprocurementsisrecoverable over a 12-monthperiodafter thePAPUC approvestheresultsofthe
procurements. Costsrelatingto information technology improvementsare recoverable over a 5-year periodthat began January1,
2011. PECO earnsa return on therecoveryofinformation technology costs. Beginningin 2013,thesecostsare includedwithinthe
energy andtransmission programs line item.
DSP II Program Costs. Theseamountsrepresent recoverable administrativecostsincurredrelatingto thefilingandprocurement
associatedwith PECO’s secondPAPUC-approved DSP programfor the procurement ofelectric supply. Thefilingandprocurement
ofthis DSP Programare recoverable through theGSAover its24-monthterm, that began June 1,2013.Theindependent evaluator
costsassociatedwithconductingprocurementsare recoverable over a 12-monthperiodafter thePAPUC approvestheresultsofthe
procurements. PECO is not earninga return on thesecosts. Beginningin 2013,thesecostsare includedwithinthe energy and
transmission programs line item.
Deferred storm costs. IntheMDPSC’s March 2011 rate order, BGE wasauthorizedto defer $16million instormcostsincurredin
February2010.Thesecostsare beingamortizedover a 5-year periodthat began inDecember 2010. BGE is earninga return on this
regulatoryasset.
Electric generation-related regulatory asset. Asaresult ofthederegulation ofelectric generation, BGE ceasedto meet the
requirementsfor accountingfor a regulatedbusiness for the previouselectric generation portion ofitsbusiness. Asaresult, BGE
wrote-off itsentire individual,generation-relatedregulatoryassetsandliabilitiesandestablishedasingle,generation-related
regulatoryasset to becollectedthrough itsregulatedrates, which is beingamortizedon a basis that approximatesthe pre-existing
individual regulatoryasset amortization schedules. The portion ofthis regulatoryasset that doesnot earn a regulatedrate ofreturn
were $37million asofDecember 31,2013,and $47 million asofDecember 31,2012. BGE will continue to amortizethis amount
through 2017.
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