ComEd 2013 Annual Report Download - page 246

Continuous Power Interruption
Section 16-125oftheIllinois Public UtilitiesAct providesthat intheevent an electric utility, such asComEd, experiencesa
continuouspower interruption offour hoursor more that affects(inComEd’s case)more than 30,000 customers, theutilitymaybe
liable for actual damagessufferedbycustomersasaresult oftheinterruption andmayberesponsible for reimbursement oflocal
governmental emergency andcontingency expensesincurredinconnection withtheinterruption.Recoveryofconsequential
damagesisbarred. TheaffectedutilitymayseekfromtheICC awaiver oftheseliabilitieswhen theutilitycan showthat thecauseof
theinterruption wasunpreventable damagedue to weather eventsor conditions, customer tampering, or certainother causes
enumeratedinthelaw.
OnAugust18, 2011,ComEd soughtfromtheICC adetermination that ComEd is not liable for damagecompensation to customers
inconnection withtheJuly11,2011 storm systemthat producedmultiple power interruptionsthat intheaggregate affectedmore
than 900,000 customersinComEd’s service territory, aswell asfor fiveother storm systems that affectedComEd’s customers
duringJune andJuly2011 (Summer 2011 StormDocket). Inaddition,on September 29, 2011,ComEd soughtfromtheICC a
determination that itwasnot liable for damagecompensation relatedto theFebruary1,2011 blizzard(February2011 Blizzard
Docket).
OnJune 5, 2013,theICC approvedacomplete waiver ofliabilityfor fiveofthesix summer storms andtheFebruary2011 blizzard.
However,theICC heldthat for theJuly11,2011 storm, 34,559 interruptionswere preventable andtherefore no waiver shouldapply.
AsrequiredbytheICC’s Order,ComEd notifiedrelevant customersthat theymaybe entitledto seekreimbursement ofincurred
costsinaccordancewithaclaims procedure establishedunder ICC rulesandregulations. Inaddition,theICC foundthat ComEd did
not systematicallyfailinitsdutyto provideadequate,reliable andsafeservice.Asaresult,theICC rejectedtheIllinois Attorney
General’s requestfor theICC to open an investigation into ComEd’s infrastructure andstormhardeninginvestments.
FollowingtheICC’s June 26, 2013 denial ofComEd’s requestfor rehearing, on June 27, 2013 ComEd filedan appeal ofboththe
summer andwinter stormdocketswiththeIllinois Appellate Court regardingtheICC’s interpretation ofSection 16-125oftheIllinois
Public UtilitiesAct.ComEd cannot predictthe outcomeofappeals.
Asaresult oftheICC’s June 5, 2013 ruling, ComEd establishedaliability, which wasnot material,for potential reimbursementsfor
actual damagesincurredbythe34,559 customerscoveredbytheICC’s June 5, 2013 Order.Theliabilityrecordedrepresentsthe
lowendofa rangeofpotential losses given that no amount withinthe range representsabetter estimate.ComEd’s ultimate liability
will bebasedon actual claims eligible for reimbursement aswell asthe outcomeofthe appeal.Although reimbursementsfor actual
damageswill differ fromtheestimatedaccrual recorded, at this timeComEd doesnot expectthedifferencetobematerial to
ComEd’s resultsofoperationsor cash flows.
ComEd hasnot recordedan accrual for reimbursement oflocal governmental emergency andcontingency expensesasa rangeof
loss, if any, cannot be reasonablyestimatedat this time,but maybematerial to ComEd’s resultsofoperationsandcash flows.
Telephone Consumer Protection Act Lawsuit
OnNovember 19, 2013,aclass action complaint wasfiledinCookCountyon behalfofasingle individual anda presumptiveclass
that wouldinclude all customersinComEd’s service territorywhowere enrolledbytheCompanyinComEd’s Outage Alert text
message program. Thecomplaint allegesthat ComEd violatedtheTelephone Consumer Protection Act(“TCPA”) by sending
approximately1.2million textmessagesto customerswithout firstobtainingtheirconsent to receivesuch messages. Thecomplaint
seeks certification ofaclass alongwithstatutorydamages, attorneys’ fees, andan order prohibitingComEd fromsendingadditional
textmessages. Such statutorydamagescouldrangefrom$500 to $1,500 per text.However,ComEd is preparingamotion to
dismiss this class action complaint andwill vigorouslycontestthe allegationsofthis suit.The ultimate outcomeofthis proceedingis
uncertain,andan amount,ifany, which mightbeasserted, cannot be reasonablyestimatedat this time,but maybematerial to
ComEd’s resultsofoperationsandcash flows. Asaresult,ComEd hasnot establishedareservefor this complaint asof
December 31,2013.
Securities Class Action
Three federal securitiesclass action lawsuitswere filedintheUnitedStates DistrictCourtsfor theSouthern DistrictofNewYorkand
theDistrictofMarylandbetween September 2008andNovember 2008againstConstellation.Thecaseswere filedon behalfofa
proposedclass ofpersonswhoacquiredpubliclytradedsecurities, includingtheSeriesAJunior SubordinatedDebentures
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