ComEd 2015 Annual Report Download - page 25

Table of Contents
Expected generation is the volume of energy that best represents our commodity position in energy markets from owned or contracted for capacity
based upon a simulated dispatch model that makes assumptions regarding future market conditions, which are calibrated to market quotes for
power, fuel, load following products, and options. Equivalent sales represent all hedging products, which include economic hedges and certain non-
derivative contracts, including sales to ComEd, PECO and BGE to serve their retail load. A portion of Generation’s hedging strategy may be
implemented through the use of fuel products based on assumed correlations between power and fuel prices, which routinely change in the market.
The corporate risk management group and Exelon’s RMC monitor the financial risks of the wholesale and retail power marketing activities.
Generation also uses financial and commodity contracts for proprietary trading purposes, but this activity accounts for only a small portion of
Generation’s efforts. The proprietary trading portfolio is subject to a risk management policy that includes stringent risk management limits,
including volume, stop-loss and value-at-risk limits, to manage exposure to market risk. See ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK for additional information.
At December 31, 2015, Generation’s short and long-term commitments relating to the purchase of energy and capacity from and to
unaffiliated utilities and others were as follows:
(in millions)
Net Capacity
Purchases
REC
Purchases
Transmission Rights
Purchases Total
2016 $ 262 $ 229 $ 15 $ 506
2017 197 269 21 487
2018 92 115 23 230
2019 97 34 24 155
2020 40 1 16 57
Thereafter 221 1 35 257
Total $ 909 $ 649 $ 134 $1,692
(a) Net capacity purchases include PPAs and other capacity contracts including those that are accounted for as operating leases. Amounts presented in the commitments represent
Generation’s expected payments under these arrangements at December 31, 2015, net of fixed capacity payments expected to be received (“Capacity offsets”) by Generation
under contracts to resell such acquired capacity to third parties under long-term capacity sale contracts. As of December 31, 2015, capacity offsets were $146 million, $149 million,
$150 million, $151 million, $142 million, and $462 million for years 2016, 2017, 2018, 2019, 2020, and thereafter, respectively. Expected payments include certain fixed capacity
charges which may be reduced based on plant availability.
(b) The table excludes renewable energy purchases that are contingent in nature.
(c) Transmission rights purchases include estimated commitments for additional transmission rights that will be required to fulfill firm sales contracts.
Capital Expenditures
Generation’s business is capital intensive and requires significant investments in nuclear fuel and energy generation assets and in other
internal infrastructure projects. Generation’s estimated capital expenditures for 2016 are as follows:
(in millions)
Nuclear fuel $1,150
Growth 1,350
Production plant 950
Renewable energy projects 25
Other 125
Total $3,600
(a) Includes Generation’s share of the investment in nuclear fuel for the co-owned Salem plant.
(b) Includes the CENG units on a fully consolidated basis.
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(a) (b) (c)
(a)(b)
(b)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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