ComEd 2013 Annual Report Download - page 233

annual reimbursement requeststo theDOE for costsassociatedwiththestorageof SNF. In all cases, reimbursement requestsare
made onlyafter costsare incurredandonlyfor costsresultingfrom DOE delays inacceptingtheSNF.
Under thesettlement agreement,Generation hasreceivedcash reimbursementsfor costsincurredthrough April30,2013,totaling
approximately$712 million ($601 million after consideringamountsdue to co-ownersofcertainnuclear stationsandto theformer
owner of Oyster Creek). AsofDecember 31,2013,theamount of SNF storagecostsfor which reimbursement will berequestedfrom
theDOE under thesettlement agreement is $71million, which is recordedwithinAccountsreceivable,other.Ofthis amount,$18
million representsamountsowedto theco-ownersofthePeach BottomandQuadCitiesgeneratingfacilities.
CENG enteredinto settlement agreementswiththeDOE during2011 and2012 to recover damagescausedbytheDOE’s failure to
complywithlegal andcontractual obligationsto disposeofspent nuclear fuel relatedto theGinna,Calvert Cliffs andNine Mile Point
nuclear power plants. At December 31,2012,Generation hadapproximately$22 million recordedasareceivable from CENG with
respecttocostsincurredbyConstellation prior to theformation oftheCENG joint venture for theNine Mile Point andCalvert Cliffs
nuclear power plants. CENG receivedthefunds for theNine Mile Point andCalvert Cliffs settlement fromtheDOE inJanuary2013
andFebruary2013,respectively, andremittedthe$22 million to Generation.
TheStandardContractswiththeDOE alsorequiredthepayment to theDOE ofa one-timefee applicable to nuclear generation
through April6, 1983.Thefee relatedto theformer PECO unitshasbeen paid. Pursuant to theStandardContracts, ComEd
previouslyelectedto defer payment ofthe one-timefee of$277 million for itsunits (which are nowpart ofGeneration), withinterest
to thedate ofpayment,untiljustprior to thefirstdeliveryof SNF to theDOE. AsofDecember 31,2013,theunfunded SNF liability
for the one-timefee withinterestwas$1,021 million.Interestaccruesat the13-weekTreasuryRate.The13-weekTreasuryRate in
effect,for calculation oftheinterestaccrual at December 31,2013,was0.051%. Theliabilitiesfor SNF disposal costs, includingthe
one-timefee,were transferredto Generation aspart ofExelon’s 2001 corporate restructuring. The outstandingone-timefee
obligationsfor theOyster Creekand TMI unitsremainwiththeformer owners. Clinton hasno outstandingobligation.See Note 11—
FairValue ofAssetsandLiabilitiesfor additional information.
Energy Commitments
Generation’s customer facingactivitiesincludethephysical deliveryandmarketingofpower obtainedthrough itsgeneration
capacity, andlong-, intermediate-andshort-termcontracts. Generation maintainsan effectivesupplystrategy through ownershipof
generation assetsandpower purchaseandleaseagreements. Generation hasalsocontractedfor access to additional generation
through bilateral long-termPPAs. Theseagreementsare firmcommitmentsrelatedto power generation ofspecific generation plants
and/or are dispatchable in nature.Several ofGeneration’s long-termPPAs, which havebeen determinedto be operatingleases,
havesignificant contingent rental paymentsthat are dependent on thefuture operatingcharacteristics oftheassociatedplants, such
asplant availability. Generation recognizescontingent rental expensewhen itbecomesprobable ofpayment.Generation entersinto
PPAswiththeobjectiveofobtaininglow-cost energy supplysourcesto meet itsphysical deliveryobligationsto itscustomers.
Generation hasalso purchasedfirmtransmission rightsto ensure that ithasreliable transmission capacityto physicallymoveits
power suppliesto meet customer deliveryneeds. Theprimaryintent andbusiness objectivefor theuseofitscapital assetsand
contractsisto provideGeneration withphysical power supplyto enable ittodeliver energy to meet customer needs. Inaddition to
physical contracts, Generation usesfinancial contractsfor economic hedgingpurposesand, to a lesser extent,aspart ofproprietary
tradingactivities.
Generation hasenteredinto bilateral long-termcontractual obligationsfor salesofenergy to load-servingentities, includingelectric
utilities, municipalities, electric cooperativesandretail loadaggregators. Generation also entersinto contractual obligationsto deliver
energy to market participantswhoprimarilyfocuson theresale ofenergy productsfor delivery. Generation providesfor deliveryofits
energy to thesecustomersthrough firmtransmission.
Aspart ofreachingacomprehensiveagreement with EDF inOctober 2010,theexistingpower purchaseagreementswith CENG
were modifiedto beunit-contingent through theendoftheiroriginal termin 2014. Under theseagreements, CENG hastheabilityto
fix the energy priceonaforwardbasis by enteringinto monthlyenergy hedge transactionsfor a portion ofthefuture sale, while any
unhedgedportionswill be providedat market pricesbydefault.Additionally, beginningin 2015andcontinuingto theendofthelifeof
therespective plants, Generation agreedto purchase50.01%ofthenuclear plant output owned by CENG at market prices.
Generation disclosesinthetable belowcommitmentsto purchasefrom CENG at fixedprices. All commitmentsto purchaseat
market prices, which include all purchasessubsequent to December 31,2014, are excludedfromthetable.Generation continuesto
owna50.01%membershipinterestinCENG that is accountedfor asan equitymethodinvestment.See Note 5—Investment in
Constellation Energy Nuclear Group, LLC andNote 25—RelatedPartyTransactionsfor more detailson this arrangement.
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