ComEd 2013 Annual Report Download - page 231

(a)Amountsin parenthesis represent a decreasein net income.
(b) This accumulatedother comprehensiveincomecomponent is includedinthecomputation ofnet periodic pension and OPEB cost(see note 16for additional details).
(c) Amortization ofthedeferredcompensation unit plan is allocatedto capital andoperatingandmaintenanceexpense.
22. Commitments and Contingencies
Nuclear Insurance
Generation is subjecttoliability, propertydamageandother risks associatedwithmajor incidentsat anyofitsnuclear stations,
includingtheCENG nuclear stations. Generation hasreduceditsfinancial exposure to theserisks through insuranceandother
industryrisk-sharingprovisions.
ThePrice-Anderson Actwasenactedto ensure theavailabilityoffunds for public liabilityclaims arisingfroman incident at anyofthe
U.S. licensednuclear facilitiesandalsotolimittheliabilityofnuclear reactor ownersfor such claims fromanysingle incident.Asof
December 31,2013,thecurrent liabilitylimit per incident was$13.6 billion andissubjecttochangetoaccount for theeffectsof
inflation andchangesinthenumber oflicensedreactors. An inflation adjustment mustbemade at leastonceevery5yearsandthe
lastinflation adjustment wasmadeeffectiveSeptember 10,2013.InaccordancewiththePrice-Anderson Act,Generation maintains
financial protection at levelsequal to theamount ofliabilityinsuranceavailable fromprivate sourcesthrough the purchaseofprivate
nuclear energy liabilityinsurancefor public liabilityclaims that couldariseintheevent ofan incident.AsofJanuary1,2013,the
amount ofnuclear energy liabilityinsurance purchasedis$375 million for each operatingsite.Additionally, thePrice-Anderson Act
requiresasecondlayer ofprotection through themandatoryparticipation in a retrospective ratingplan for power reactors(currently
104reactors) resultinginanadditional $13.2billion infunds available for public liabilityclaims. Participation inthis secondary
financial protection pool requiresthe operator ofeach reactor to funditsproportionate share ofcostsfor anysingle incident that
exceeds theprimarylayer offinancial protection.Under thePrice-Anderson Act,themaximumassessment intheevent ofan
incident for each nuclear operator,per reactor,per incident (includinga5% surcharge), is $127.3million,payable at no more than
$19million per reactor per incident per year.Exelon’s maximumliabilityper incident is approximately$2.4 billion.
Inaddition,theU.S. Congress couldimposerevenue-raisingmeasureson thenuclear industryto paypublic liabilityclaims
exceedingthe$13.6 billion limitfor a single incident.
Generation is requiredeach year to report to theNRCthecurrent levelsandsourcesofpropertyinsurancethat demonstrates
Generation possessessufficient financial resourcesto stabilizeanddecontaminate a reactor andreactor station site intheevent of
an accident.The propertyinsurancemaintainedfor each facilityiscurrentlyprovidedthrough insurance policiespurchasedfrom
NEIL, an industrymutual insurancecompanyof which Generation is amember.
NEIL maydeclare distributionsto itsmembersasaresult offavorable operatingexperience.Inrecent years NEIL hasmade
distributionsto itsmembers, but Generation cannot predictthelevel offuture distributionsor if theywill continue at all. NEIL declared
adistribution for 2013,of which Generation’s portion was$18.5 million.Thedistribution wasrecordedasareduction to Operating
andmaintenanceexpensewithinExelon andGeneration’s ConsolidatedStatementsofOperationsandComprehensiveIncome.No
distributionswere declaredin 2011 or 2012.Premiums paid to NEIL by itsmembersare subjecttoassessment for adverseloss
experience(the retrospective premiumobligation). NEIL hasnever exercisedthis assessment sinceitsformation in1973,and while
Generation cannot predictthelevel offuture assessments, or if theywill beimposedat all,asofDecember 31,2013,thecurrent
maximumaggregate annual retrospective premiumobligation for Generation is approximately$287 million.
NEIL provides“all risk” propertydamage,decontamination andpremature decommissioninginsurancefor each station for losses
resultingfromdamagetoitsnuclear plants, either due to accidentsor actsofterrorism. AsofDecember 31,2013,Generation’s
current limitfor this coverageis $2.1billion.For propertylimitsinexcess ofthefirst$1.25billion ofthat limit,Generation participates
inan$850million single limitblanket policy sharedbyall theGeneration operatingnuclear sitesandtheSalemandHope Creek
nuclear sites. This blanket limitis not subject to automatic reinstatement intheevent ofaloss. Intheevent ofan accident,insurance
proceeds mustfirstbeusedfor reactor stabilization andsite decontamination.Ifthedecision is madetodecommission thefacility, a
portion oftheinsurance proceeds will be allocatedto a fund, which Generation is requiredbytheNRCto maintain,to providefor
decommissioningthefacility. Intheevent ofan insuredloss, Generation is unable to predictthetimingoftheavailabilityofinsurance
proceeds to Generation andtheamount ofsuch proceeds that wouldbeavailable.Under the terms ofthevariousinsurance
agreements, Generation couldbeassessedup to $229million per year for lossesincurredat anyplant insuredbytheinsurance
company(the retrospective premiumobligation). Intheevent that one or more actsofterrorism causeaccidental propertydamage
withinatwelve-monthperiodfromthefirstaccidental propertydamageunder one or more policiesfor all insuredplants, the
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