ComEd 2013 Annual Report Download - page 202

other stateswhere theyhavestate incometaxobligations, resultinginrecordingadeferredstate taxexpenseduringthefirstquarter
of2011 of$22 million and$11 million (net ofFederal taxes) for Exelon andGeneration,respectively. The long-termstate tax
apportionment alsowasrevisedinthefourthquarter of2011 pursuant to long-termstate taxapportionment policy, resultingin
recordingan additional deferredstate taxexpenseof$1million andadeferredstate taxbenefitof$8million (net ofFederal taxes)
for Exelon andGeneration,respectively.
Asaresult ofthemerger withConstellation,Exelon andGeneration re-evaluatedtheir long-termstate taxapportionment inthefirst
quarter of2012.The total effectofrevisingthe long-termstate taxapportionment resultedintherecordingofadeferredstate tax
asset of$72million (net ofFederal taxes) for Exelon.Ofthis, abenefitintheamount of$116million and$14million (net ofFederal
taxes) wasrecordedfor Exelon andGeneration,respectively, for thethree months endedMarch 31,2012.Further,Exelon and
Generation recordeddeferredstate taxliabilitiesof $44 million and$14million (net ofFederal taxes), respectively, aspart of
purchaseaccountingduringthethree months endedMarch 31,2012.The long-termstate taxapportionment alsowasupdatedinthe
fourthquarter of2012,resultingintherecordingofadeferredstate taxbenefitof$3million (net ofFederal taxes) for Exelon,anda
deferredstate taxexpenseof$7million (net ofFederal taxes) for Generation.There wasno changetothe long-termstate tax
apportionment for BGE, ComEd and PECO.
The long-termstate taxapportionment wasrevisedinthefourthquarter of2013 pursuant to itslong-termstate taxapportionment
policy, resultingintherecordingofamountsthat are immaterial for Exelon andGeneration,respectively.
Allocation of Tax Benefits
Generation,ComEd, PECO andBGEare all partyto an agreement withExelon andother subsidiariesofExelon that providesfor the
allocation ofconsolidatedtaxliabilitiesandbenefits(TaxSharingAgreement). TheTaxSharingAgreement providesthat each party
is allocatedan amount oftax similar to that which wouldbeowedhadthe partybeen separatelysubjecttotax. Inaddition,anynet
benefit attributable to Exelon is reallocatedto theother Registrants. That allocation is treatedasacontribution to thecapital ofthe
partyreceivingthebenefit.During2013,Generation and PECO recordedan allocation ofFederal taxbenefitsfromExelon under the
TaxSharingAgreement of$26million and$27million,respectively. During2013,ComEd and BGE did not recordan allocation of
Federal taxbenefitsfromExelon under theTaxSharingAgreement asaresult ofComEd’s and BGE’s 2013 taxnet operatingloss
generatedprimarilybythebonusdepreciation deduction allowedunder theTaxReliefActof2010.During2012,Generation and
PECO recordedan allocation ofFederal taxbenefitsfromExelon under theTaxSharingAgreement of $48 million and$9million,
respectively. During2012,ComEd and BGE did not recordan allocation ofFederal taxbenefitsfromExelon under theTaxSharing
Agreement asaresult ofComEd’s and BGE’s 2012 taxnet operatingloss generatedprimarilybythebonusdepreciation deduction
allowedunder theTaxReliefActof2010.
ComEd receiveda non-cash contribution to equityfromExelon in 2012 of$11,relatedto taxbenefitsassociatedwithcapital projects
constructedbyComEd on behalfofExelon andGeneration.
15. Asset Retirement Obligations
Nuclear Decommissioning Asset Retirement Obligations
Generation hasalegal obligation to decommission itsnuclear power plantsfollowingtheexpiration oftheir operatinglicenses. To
estimate itsdecommissioningobligation relatedto itsnuclear generatingstationsfor financial accountingandreportingpurposes,
Generation usesa probability-weighted, discountedcash flowmodel which, on a unit-by-unitbasis, considersmultiple outcome
scenariosthat includesignificant estimatesandassumptions, andare basedon decommissioningcoststudies, costescalation rates,
probabilistic cash flowmodelsand discount rates. Generation generallyupdatesitsAROannuallyduringthethirdquarter,unless
circumstanceswarrant more frequent updates, basedon itsreviewofupdatedcoststudiesanditsannual evaluation ofcost
escalation factorsandprobabilitiesassignedto variousscenarios.
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