ComEd 2015 Annual Report Download - page 188

Table of Contents
Equity Price Risk (Exelon and Generation)
Exelon and Generation maintain trust funds, as required by the NRC, to fund certain costs of decommissioning Generation’s nuclear plants.
As of December 31, 2015, Generation’s decommissioning trust funds are reflected at fair value on its Consolidated Balance Sheets. The mix of
securities in the trust funds is designed to provide returns to be used to fund decommissioning and to compensate Generation for inflationary
increases in decommissioning costs; however, the equity securities in the trust funds are exposed to price fluctuations in equity markets, and the
value of fixed-rate, fixed-income securities are exposed to changes in interest rates. Generation actively monitors the investment performance of
the trust funds and periodically reviews asset allocation in accordance with Generation’s NDT fund investment policy. A hypothetical 10% increase
in interest rates and decrease in equity prices would result in a $454 million reduction in the fair value of the trust assets. This calculation holds all
other variables constant and assumes only the discussed changes in interest rates and equity prices. See ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for further discussion of equity price risk as a
result of the current capital and credit market conditions.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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