ComEd 2013 Annual Report Download - page 204

decommissioningactivitieshavebeen transferredto a third-party(see Zion Station Decommissioningbelow). Generation has
recoursetocollectadditional amountsfrom PECO customersrelatedto a shortfall of NDT funds for theformer PECO units, subject
to certainlimitationsandthresholds, asprescribedbyan order fromthePAPUC. Generally, PECO, andlikewiseGeneration will not
be allowedto collectamountsassociatedwiththefirst$50million ofanyshortfall oftrustfunds, on an aggregate basis for all former
PECO units, comparedto decommissioningobligations, aswell as5%ofanyadditional shortfalls. Theinitial $50million andup to
5% ofanyadditional shortfallswouldbeborne by Generation.Norecourseexiststo collectadditional amountsfromComEd
customersfor theformer ComEd unitsor fromthe previousownersoftheformer AmerGen units. Withrespecttotheformer ComEd
and PECO units, anyfunds remainingintheNDTs after all decommissioninghasbeen completedare requiredto berefundedto
ComEd’s or PECO’s customers, subjecttocertainlimitationsthat allowsharingofexcess funds withGeneration relatedto theformer
PECO units. Withrespecttotheformer AmerGen units, Generation retainsanyfunds remaininginthefunds after decommissioning.
During2012,theNDT fixedincome portfoliocompleteditstransition fromsolelycore fixedincomeinvestmentsto a blendof
TreasuryInflation ProtectedSecurities (TIPS), investment-gradecorporate creditand middle market lending. There wasno change
intheequityinvestment strategy. At December 31,2013,approximately 48% ofthefunds were investedinequitysecuritiesand52%
were investedinfixedincomesecurities. At December 31,2012,approximately 47% ofthefunds were investedinequitysecurities
and53%were investedinfixedincomesecurities.
At December 31,2013,and2012,Exelon andGeneration had NDT fundinvestmentstotaling $8,071million and $7,248 million,
respectively.
Thefollowingtable providesExelon’s unrealizedgains(losses) on NDT funds for 2013,2012 and2011:
For the Years Ended December 31,
2013 2012 2011
Net unrealizedgains(losses) on decommissioningtrust
funds—RegulatoryAgreement Units(a)............................................... $406$386 $(74)
Net unrealizedgains(losses) on decommissioningtrust
funds—Non-RegulatoryAgreement Units(b)(c) ......................................... 146 105 (4)
(a)Net unrealizedgains(losses) relatedto Generation’s NDT funds associatedwithRegulatoryAgreement Unitsare includedinRegulatoryliabilitieson Exelon’s
ConsolidatedBalanceSheets.
(b) Excludes$7million,$73million and $48 million ofnet unrealizedgainsrelatedto theZion Station pledgedassetsin 2013,2012 and2011,respectively. Net
unrealizedgainsrelatedto Zion Station pledgedassetsare includedinthePayable for Zion Station decommissioningon Exelon’s ConsolidatedBalanceSheets.
(c) Net unrealizedgains(losses) relatedto Generation’s NDT funds withNon-RegulatoryAgreement Unitsare includedwithinOther,net inExelon’s Consolidated
StatementsofOperationsandComprehensiveIncome.
Interestand dividends on NDT fundinvestmentsare recognizedwhen earnedandare includedinOther,net inExelon’s and
Generation’s ConsolidatedStatementsofOperationsandComprehensiveIncome.Interestand dividends earnedon theNDT fund
investmentsfor theRegulatoryAgreement Unitsare eliminatedwithinOther,net inExelon’s andGeneration’s Consolidated
Statement ofOperationsandComprehensiveIncome.
Accounting Implications of the Regulatory Agreements with ComEd and PECO.Basedon theregulatoryagreement withtheICC that
dictatesGeneration’s obligationsrelatedto theshortfall or excess of NDT funds necessaryfor decommissioningtheformer ComEd
unitson a unit-by-unitbasis, aslongasfunds heldintheNDT funds are expectedto exceedthe total estimateddecommissioning
obligation,decommissioning-relatedactivities, includingrealizedandunrealizedgainsandlosseson theNDT funds andaccretion of
thedecommissioningobligation,are generallyoffset withinExelon’s andGeneration’s ConsolidatedStatementsofOperationsand
ComprehensiveIncome.Theoffset ofdecommissioning-relatedactivitieswithintheConsolidatedStatement ofOperationsand
ComprehensiveIncomeresultsinanequal adjustment to the noncurrent payablesto affiliatesat Generation andan adjustment to
theregulatoryliabilitiesat Exelon. Likewise,ComEd hasrecordedan equal noncurrent affiliate receivable fromGeneration and
correspondingregulatoryliability. Shouldtheexpectedvalue oftheNDT fundfor anyformer ComEd unitfall belowtheamount ofthe
expecteddecommissioningobligation for that unit,theaccountingto offset decommissioning-relatedactivitiesintheConsolidated
Statement ofOperationsandComprehensiveIncomefor that unitwouldbediscontinued, thedecommissioning-relatedactivities
wouldberecognizedintheConsolidatedStatementsofOperationsandComprehensiveIncomeandtheadverseimpacttoExelon’s
andGeneration’s resultsofoperationsandfinancial position couldbematerial.AsofDecember 31,2013,theNDT funds ofeach of
theformer ComEd unitsare expectedto exceedthe relateddecommissioningobligation for each oftheunits. For the purposesof
makingthis determination,thedecommissioningobligation referredto is different,asdescribedbelow, fromthecalculation usedin
theNRCminimumfundingobligation filings basedon NRCguidelines.
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