ComEd 2015 Annual Report Download - page 184

Table of Contents
recover realized energy costs through customer rates. As of December 31, 2015, ComEd’s credit exposure to energy suppliers was immaterial.
PECO
Credit risk for PECO is managed by credit and collection policies, which are consistent with state regulatory requirements. PECO is currently
obligated to provide service to all retail electric customers within its franchised territory. PECO records a provision for uncollectible accounts to
provide for the potential loss from nonpayment by these customers. See Note 1—Significant Accounting Policies of the Combined Notes to
Consolidated Financial Statements for the allowance for uncollectible accounts policy. In accordance with PAPUC regulations, after November 30
and before April 1, an electric distribution utility or natural gas distribution utility shall not terminate service to customers with household incomes
at or below 250% of the Federal poverty level. PECO’s provision for uncollectible accounts will continue to be affected by changes in prices as
well as changes in PAPUC regulations. PECO did not have any customers representing over 10% of its revenues as of December 31, 2015.
PECO’s supplier master agreements that govern the terms of its DSP Program contracts, which define a supplier’s performance assurance
requirements, allow a supplier to meet its credit requirements with a certain amount of unsecured credit. The amount of unsecured credit is
determined based on the supplier’s lowest credit rating from the major credit rating agencies and the supplier’s tangible net worth. The credit
position is based on the initial market price, which is the forward price of energy on the day a transaction is executed, compared to the current
forward price curve for energy. To the extent that the forward price curve for energy exceeds the initial market price, the supplier is required to post
collateral to the extent the credit exposure is greater than the supplier’s unsecured credit limit. As of December 31, 2015, PECO had no net credit
exposure with suppliers.
PECO does not obtain cash collateral from suppliers under its natural gas supply and asset management agreements. As of December 31,
2015, PECO’s credit exposure under its natural gas supply and asset management agreements with investment grade suppliers was immaterial.
BGE
Credit risk for BGE is managed by credit and collection policies, which are consistent with state regulatory requirements. BGE is currently
obligated to provide service to all electric customers within its franchised territory. BGE records a provision for uncollectible accounts to provide
for the potential loss from nonpayment by these customers. BGE will monitor nonpayment from customers and will make any necessary
adjustments to the provision for uncollectible accounts. See Note 1—Significant Accounting Policies of the Combined Notes to Consolidated
Financial Statements for uncollectible accounts policy. MDPSC regulations prohibit BGE from terminating service to residential customers due to
nonpayment from November 1 through March 31 if the forecasted temperature is 32 degrees or below for the subsequent 72 hour period. BGE is
also prohibited by the Public Utilities Article of the Annotated Code of Maryland and MDPSC regulations from terminating service to residential
customers due to nonpayment if the forecasted temperature is 95 degrees or above for the subsequent 72 hour period. BGE did not have any
customers representing over 10% of its revenues as of December 31, 2015.
BGE’s full requirement wholesale electric power agreements that govern the terms of its electric supply procurement contracts, which define
a supplier’s performance assurance requirements, allow a supplier, or its guarantor, to meet its credit requirements with a certain amount of
unsecured credit. The amount of unsecured credit is determined based on the supplier’s lowest credit rating from the major credit rating agencies
and the supplier’s tangible net worth, subject to an unsecured credit cap. The credit position is based on the initial market price, which is the
forward price of energy on the day
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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