ComEd 2013 Annual Report Download - page 28

to defer $19million ofcostsasregulatoryassets. Thesecostsare beingrecoveredover a 5-year periodbeginninginDecember
2010 andincludethedeferral of$16million ofstormcostsincurredinFebruary2010.Theregulatoryasset for thestormcostsearns
the authorizedrate ofreturn.
OnJuly27, 2012, BGE filedan application for an increasetoitselectric base rateswiththeMDPSC. OnFebruary22,2013,the
MDPSC issuedan order inBGE’s 2012 electric rate casefor increasesin annual distribution servicerevenue of$81million.The
electric distribution rate increasewasset usingan allowedreturn on equityof 9.75%.
OnMay17, 2013, BGE filedan application for an increasetoitselectric base rateswiththeMDPSC. OnDecember 13,2013,the
MDPSC issuedan order inBGE’s 2013 electric distribution rate case authorizingan increasein annual distribution servicerevenue
of$34million.The electric distribution rate increasewasset usingan allowedreturn on equityof 9.75%. The approvedelectric
distribution rate becameeffectivefor servicesrenderedon or after December 13,2013.
Smart Meter and Energy Efficiency Programs
Smart Meter Programs. InAugust 2010,theMDPSC approved BGE’s $480million SGIP, which includesdeployment ofatwo-way
communicationsnetwork, 2million smart electric andgasmetersandmodules, newcustomer pricingprograms, anewcustomer
webportal andnumerousenhancementsto BGE operations. Also,in April 2010, BGE enteredinto a Financial Assistance
Agreement withtheDOE for SGIG funds under the ARRA of2009. Under theSGIG, BGE hasbeen awarded$200 million,the
maximumgrant allowable under the program, to support itsSmart Grid, PeakRewards and CC&B initiatives. TheSGIG fundingis
beingusedto reducesignificantlythe rate impactofthoseinvestmentson BGE customers. AsofDecember 31,2013, BGE has
billedthe entire $200 million grant to theDOE.
Energy Efficiency Programs. BGE’s energy efficiency programs includeaCFL program, retrofit programs, an energy efficient
appliancerebate andtrade-in program, rebatesandenergy efficiency programs for non-profit,educational,governmental and
business customers, customer incentivesfor energy management programs andincentivesto help customersreduce energy
demandduringpeakperiods. TheMDPSC initiallyapprovedafull portfolioofconservation programs aswell asacustomer
surchargetorecover theassociatedcosts. This customer surchargeis updatedannually. InDecember 2011,theMDPSC approved
BGE’s conservation programs for implementation in 2012 through 2014.
Natural Gas
BGE’s natural gassalesare derivedpursuant to a MBRmechanism that appliesto customerswhobuytheirgasfrom BGE. Under
this mechanism, BGE’s actual costofgasiscomparedto a market index(ameasure ofthemarket priceofgasinagiven period).
Thedifferencebetween BGE’s actual costandthemarket indexissharedequallybetween shareholdersandcustomers. Customer
choice programactivityaffectsrevenue collectedfromcustomersrelatedto suppliednatural gas; however,that activityhasminimum
impactongasrevenue net ofpurchasedpower expenseorBGE’s financial position.At December 31,2013,there were 41
competitive natural gassuppliersserving BGE customers. At December 31,2013,thenumber ofretailcustomerspurchasingfuel
fromacompetitive natural gassupplier wasapproximately172,000 representing26% oftotal retailcustomers. Retaildeliveries
purchasedfromcompetitive natural gassuppliersrepresentedapproximately 54% of BGE’s retailmmcf salesfor theyear ended
December 31,2013.
BGE mustsecure fixedpricecontractsfor at least10%, but not more than 20%, offorecasted systemsupplyrequirementsfor
flowing (i.e., non-storage)gasfor theNovember through March period. Thesefixedpricecontractsare recoveredunder theMBR
mechanism andare not subjecttosharing. BGE meetsitsnatural gasloadrequirementsthrough firmpipeline transportation and
storage entitlements. BGE’s current pipeline firmtransportation entitlementsto serveitsfirmloads are 362mmcf per day.
BGE’s current maximumstorage entitlementsare 284 mmcf per day. Tosupplement itsgassupplyat timesofheavy winter
demands andto beavailable intemporaryemergenciesaffectinggassupply, BGE has:
•aliquefiednatural gasfacilityfor theliquefaction andstorageofnatural gaswitha total storagecapacityof1,055 mmcf anda
dailycapacityof332 mmcf,
•aliquefiednatural gasfacilityfor natural gas systempressure support witha total storagecapacityof 6 mmcf andadaily
capacityof 6 mmcf, and
•a propane airfacilityandaminedcavern witha total storagecapacityequivalent to 546 mmcf andadailycapacityof 85 mmcf.
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