ComEd 2013 Annual Report Download - page 161

Generation and EDFI will also enter into a Put Option Agreement at closingpursuant to which EDFI will havethe option,exercisable
beginningon January1,2016andthereafter untilJune 30,2022,to sell its 49.99% interestinCENG to Generation for a fairmarket
value pricedeterminedbyagreement ofthe parties, or absent agreement,athird-partyarbitration process. The appraisers
determiningfairmarket value of EDF’s 49.99% interestinCENG under thePut Option Agreement are instructedto takeinto account
all rightsandobligationsunder theCENG OperatingAgreement,includingGeneration’s rightswithrespecttoanyunpaid aggregate
preferred distributionsandthe relatedreturn,andthevalue ofGeneration’s rightsto other distributions. Thebeginningofthe
exercise periodwill beacceleratedifExelon’s affiliatesceasetoownamajorityof CENG andexercise a relatedright to terminate the
Nuclear OperatingServicesAgreement.Inaddition,under limitedcircumstances, the periodfor exerciseofthe put option maybe
extendedfor 18months.
Alsoatclosing, Generation will execute an IndemnityAgreement pursuant to which Generation will indemnify EDF anditsaffiliates
againstthird-partyclaims that mayarisefromanyfuture nuclear incident (asdefinedinthePriceAnderson Act)inconnection with
theCENG nuclear plantsor their operations. Exelon will guarantee Generation’s obligationsunder this indemnity.
Currently, Exelon andGeneration account for theirinvestment inCENG under theequitymethodofaccounting. The transfer ofthe
operatinglicensesandcorrespondingoperational control to Exelon andGeneration will result inExelon andGeneration being
requiredto consolidate thefinancial position andresultsofoperationsof CENG. When that accountingchangeoccurs, Exelon and
Generation will derecognizetheirequitymethodinvestment inCENG andwill recordall assets, liabilitiesandthe non-controlling
interestinCENG at fairvalue on Exelon andGeneration’s balancesheets. Any differencebetween theformer carryingvalue and
newlyrecordedfairvalue at that date will berecognizedasagainorloss upon consolidation, which couldbematerial to Exelon’s
andGeneration’s resultsofoperations.
6. Accounts Receivable
Accountsreceivable at December 31,2013 and2012 includedestimatedunbilledrevenues, representingan estimate for theunbilled
amount ofenergy or servicesprovidedto customers, andisnet ofan allowancefor uncollectible accountsasfollows:
2013
Unbilledcustomer revenues ............................................................................... $1,151
Allowancefor uncollectible accounts(a)(b) .................................................................... (272)
2012
Unbilledcustomer revenues ............................................................................... $1,094
Allowancefor uncollectible accounts(a)(b) .................................................................... (293)
(a)Includesthe allowancefor uncollectible accountson customer andother accountsreceivable.
(b) Includesan allowancefor uncollectible accountsof$8million and$7million at December 31,2013 and2012,respectively, relatedto PECO’s current installment plan
receivablesdescribedbelow.
PECO Installment Plan Receivables PECO entersinto payment agreementswithcertaindelinquent customers, primarily
residential,seekingto restore theirservice,asrequiredbythePAPUC. Customerswithpastdue balancesthat meet certainincome
criteria are providedthe option to enter into an installment payment plan,someof which have terms greater than one year,to repay
pastdue balancesinaddition to payingfor theirongoingserviceonacurrent basis. Thereceivable balancefor thesepayment
agreement receivablesisrecordedinaccountsreceivable for thecurrent portion andother deferreddebitsandother assetsfor the
noncurrent portion.The net receivable balancefor installment planswithterms greater than one year was$19million and$18million
asofDecember 31,2013 and2012,respectively. The allowancefor uncollectible accountsreservemethodology andassessment of
thecreditqualityoftheinstallment plan receivablesare consistent withthecustomer accountsreceivable methodology discussedin
Note 1—Significant AccountingPolicies. The allowancefor uncollectible accountsbalanceassociatedwiththesereceivablesat
December 31,2013 of$18million consistsof$1million,$4million and$13 million for lowrisk, mediumrisk and high risk segments,
respectively. The allowancefor uncollectible accountsbalanceatDecember 31,2012 of$15million consistsof$1million,$3million
and$11 million for lowrisk, mediumrisk and high risk segments, respectively. Thebalanceofthepayment agreement is billedto the
customer inequal monthlyinstallmentsover the termoftheagreement.Installment receivablesoutstandingasofDecember 31,
2013 and2012 includebalancesnot yet presentedon thecustomer bill,accountscurrentlybilledandan immaterial amount ofpast
due receivables. When a customer defaultson itspayment agreement,the terms of which are definedbyplan type,the entire
balanceoftheagreement becomesdue andthebalanceis reclassifiedto current customer accountsreceivable andreservedfor in
accordancewiththemethodology discussedinNote 1—Significant AccountingPolicies.
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