ComEd 2013 Annual Report Download - page 47

Indiana, LLC (RITELine Indiana)havebeen formedasprojectcompaniesto develop andownthe project.RITELine Illinois will own
the transmission assetslocatedinIllinois andisowned 75% by ComEd and25% by RITELine Transmission Development Company,
LLC (RTD). RITELine Indiana will ownthe transmission assetslocatedinIndiana andisownedbyAEP (75%) andRTD (25%).
Exelon Transmission Company, LLC andAEP each own50%ofRTD. The total costoftheRITE Line projectis expectedto be
approximately$1.6 billion,withtheIllinois portion oftheline expectedto cost approximately$1.2billion.The ultimate costandscope
ofthe project are dependent on a number offactors, includingRTO requirements, interregional transmission planningprocess
requirements, state sitingrequirements, routingoftheline,andequipment andcommoditycosts. Exelon andAEP are currently
pursuingthe projectandother segmentsthat are electricallyequivalent in nature for inclusion ininterregional planningprocess
between PJM and MISO; if approvedthrough that process, the projectwouldthen needto be approvedthrough therespective
planningprocessesof PJM and MISO.
OnJuly18, 2011,RITELine Illinois andRITELine Indiana filedat FERCfor incentive ratesandaformula rate for theRITE Line
project.OnOctober 14, 2011,FERC issuedan order on theincentiveandformula rate filing. Theorder grantsabase rate ofreturn
on common equityof 9.9%, plusa50basis point adder for the projectbeinginaRTO anda 100 basis point adder for therisks and
challengesofthe project,resultingin a total rate ofreturn on common equityof11.4%. Theorder grantsahypothetical capital
structure of 45% debtand 55% equityuntilanypart ofthe project enterscommercial operations. Theorder alsogrants100%
recoveryfor construction workin progress, 100%recoveryfor abandonment,iftheline is abandonedthrough no fault ofthe
RITELine developers, andtheabilityto treat pre-construction costsasaregulatoryasset.All incentives, includingtheabandonment
incentive,are contingent on inclusion ofthe projectinthePJM RTEP. TheRITELine companiesfiledfor rehearingon several rate of
return on common equity issuesandarguedthat therighttocollectabandonedcostsshouldnot besubjecttothe projectbeing
includedintheRTEP. TheRITELine companiesalsomadeacompliancefilingascalledfor intheOctober 14, 2011 Order.FERC
acceptedthis filingon March 16, 2012.
Smart Meter and Smart Grid Initiatives.
ComEd’s Smart Meter and Smart Grid Investments. ComEd plansto invest approximately$1.3billion on smart metersandsmart
grid under EIMA,including$1.0billion through theAMI Deployment Plan.OnJune 5, 2013,theICC issuedan interim order
approvingComEd’s acceleratedAMI deployment plan consistent withthe provisionsofSenate Bill 9. Thedeployment plan provides
for theinstallation of4million electric smart meters, of which more than 60,000 meterswere installedbytheendof2013.
PECO’s Smart Meter and Smart Grid Investments. In 2010,thePAPUC approved PECO’s Smart Meter Procurement andInstallation
Plan,under which PECO will install more than 1.6 million smart meters. PECO plansto spendup to a total of $595 million and$120
million on itssmart meter andsmart grid infrastructure,respectively, of which $200 million will befunded by SGIG.
BGE Smart Grid Initiative. InAugust 2010,theMDPSC approvedacomprehensivesmart grid initiativefor BGE which includesthe
plannedinstallation of2million electric andgassmart metersat an expectedtotal costofapproximately $480million,before
consideringthe$200 million SGIG for smart grid andother relatedinitiatives.
See Note 3—RegulatoryMattersoftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information on the
Smart Meter andSmart Grid Initiatives.
Generation Renewable Development.OnSeptember 30,2011,Exelon announcedthecompletion ofitsacquisition ofall ofthe
interestsin Antelope Valley, a 230-MW solar photovoltaic (PV) projectunder development in northern LosAngelesCounty,
California,fromFirstSolar,Inc., which is developing, building, operating, andmaintainingthe project.Thefirst portion ofthe project
began operationsinDecember 2012,with six additional blocks comingonline in 2013.Exelon hasbeen informedbyFirstSolar of
issuesrelatingto delays inthecertification ofcertaincomponentsrelatingto thefinal twoblocks ofthe project, which will delay
commercial operation ofthesetwoblocks untilthefirsthalfof2014. Thedelaywill not haveamaterial financial effectonExelon.
Exelon expectsthe projecttobeinfull commercial operation inthefirsthalfof2014. Theacquisition supportstheExelon
commitment to renewable energy aspart ofExelon 2020.The projecthasa25-year PPAwithPacific Gas&Electric Companyfor
thefull output ofthe plant, which hasbeen approvedbytheCPUC. Upon completion,thefacilitywill add 230 MWs to Generation’s
renewable generation fleet.Total capitalizedcostsfor thefacilityare expectedto be approximately$1.1billion.Total capitalized
costsincurredthrough December 31,2013 were approximately $968 million.Inaddition,Generation constructedandplacedinto
service400 MWs ofadditional windgeneration in 2012 at a costof$710 million andanother 50MW will beaddedto Generation’s
windportfolioin 2014withtheexpansion ofitsBeebe projectinMichigan,the output of which will befullycontractedunder a 20-year
PPA.
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