ComEd 2015 Annual Report Download - page 265

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
taxes against the annual reconciliation balance in calculating interest, and the use of average rather than year-end rate base for determining any
ROE collar adjustment. On November 26, 2013, the ICC issued its final order in the Investigation, rejecting two of the proposed changes but
accepting the proposed change to eliminate the income tax gross-up on the weighted average cost of capital used to calculate interest on the
annual reconciliation balance. The accepted change became effective in January 2014, and reduced ComEd’s 2014 revenue by approximately $8
million. This change had no financial statement impact on ComEd in 2013. ComEd and intervenors requested rehearing, however all rehearing
requests were denied by the ICC. ComEd and intervenors filed appeals with the Illinois Appellate Court. ComEd subsequently withdrew its appeal,
but the Illinois Attorney General and the Citizens Utility Board continued to argue that the ICC had wrongly approved ComEd’s treatment of
accumulated deferred income taxes (ADIT) relating to the annual reconciliation. On July 29, 2015, the Illinois Appellate Court rejected that appeal
and affirmed the ICC’s decision and its acceptance of ComEd’s treatment of ADIT. The period in which to file requests for further review has
expired and that decision is final.
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On March 26, 2014, the Illinois Appellate Court issued an opinion with respect to ComEd’s appeal of the ICC’s order relating to ComEd’s
initial formula rate tariff. The most significant financial issues under appeal related to ICC findings that were counter to the formula rate legislation
and were clarified by subsequent legislation (Senate Bill 9). Therefore, only a subset of the issues originally appealed remained. The Court found
against ComEd on each of the remaining issues: compensation related adjustments, billing determinants and the use of certain allocators. The
Court’s opinion has no accounting impact as ComEd recorded the distribution formula regulatory asset consistent with the ICC’s final Order. On
September 14, 2014, the Illinois Supreme Court declined to hear that appeal. ComEd elected not to seek review by the United States Supreme
Court on the Federal law issues. Accordingly, the decision of the Illinois Appellate Court is considered final.
Grand Prairie Gateway Transmission Line (ComEd). On December 2, 2013, ComEd filed a request to obtain the ICC’s approval to
construct a 60-mile overhead 345kV transmission line that traverses Ogle, DeKalb, Kane and DuPage Counties in Northern Illinois. On May 28,
2014, in a separate proceeding, FERC issued an order granting ComEd’s request to include 100% of the capital costs recorded to construction
work in progress during construction of the line in ComEd’s transmission rate base. If the project is cancelled or abandoned for reasons beyond
ComEd’s control, FERC approved the ability for ComEd to recover 100% of its prudent costs incurred after May 21, 2014 and 50% of its costs
incurred prior to May 21, 2014 in ComEd’s transmission rate base. The costs incurred for the project prior to May 21, 2014 were immaterial.
ComEd has acquired numerous easements across the project route through voluntary transactions. ComEd will seek to acquire the property rights
on the remaining 28 parcels through condemnation proceedings in the circuit courts. ComEd began construction of the line during the second
quarter of 2015 with an in-service date expected in the second quarter of 2017.
Illinois Procurement Proceedings (Exelon, Generation and ComEd). ComEd is permitted to recover its electricity procurement costs
from retail customers without mark-up. Since June 2009, the IPA designs, and the ICC approves, an electricity supply portfolio for ComEd and the
IPA administers a competitive process under which ComEd procures its electricity supply from various suppliers, including Generation. As of
December 31, 2015, ComEd has completed the ICC-approved procurement process for a portion of its energy requirements through 2021.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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