ComEd 2015 Annual Report Download - page 266

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
ComEd is required to purchase an increasing percentage of the electricity for customer deliveries from renewable energy resources.
Purchases by customers of electricity from competitive electric generation suppliers, whether as a result of the customers’ own actions or as a
result of municipal aggregation, are not included in this calculation and have the effect of reducing ComEd’s purchase obligation. ComEd entered
into several 20-year contracts with unaffiliated suppliers in December 2010 regarding the procurement of long-term renewable energy and
associated RECs in order to meet its obligations under the Illinois’ RPS. All associated costs are recoverable from customers.
FutureGen Industrial Alliance, Inc (Exelon and ComEd). During 2013, the ICC approved, and directed ComEd and Ameren (the Utilities)
to enter into 20-year sourcing agreements with FutureGen Industrial Alliance, Inc (FutureGen), under which FutureGen will retrofit and repower an
existing plant in Morgan County, Illinois to a 166 MW near zero emissions coal-fueled generation plant, with an assumed commercial operation
date in 2017. The sourcing agreement provides that ComEd and Ameren will pay FutureGen’s contract prices, which are set annually pursuant to a
formula rate. The contract prices are based on the difference between the costs of the facility and the revenues FutureGen receives from selling
capacity and energy from the unit into the MISO or other markets, as well as any other revenue FutureGen receives from the operation of the
facility. The order also directs ComEd and Ameren to recover these costs from their electric distribution customers through the use of a tariff,
regardless of whether they purchase electricity from ComEd or Ameren, or from competitive electric generation suppliers.
In February 2013, ComEd filed an appeal with the Illinois Appellate Court questioning the legality of requiring ComEd to procure power for
retail customers purchasing electricity from competitive electric generation suppliers. On July 22, 2014, the Illinois Appellate Court issued its ruling
re-affirming the ICC’s order requiring ComEd to enter into the sourcing agreement with FutureGen and allowing the use of a tariff to recover its
costs. ComEd decided not to appeal the Illinois Appellate Court’s decision to the Illinois Supreme Court. However, the competitive electric
generation suppliers and several large consumers petitioned for leave to appeal the Illinois Appellate Court’s decision. On November 26, 2014, the
Illinois Supreme Court granted the petition. ComEd executed the sourcing agreement with FutureGen in accordance with the ICC’s order. In
addition, ComEd filed a petition with the ICC seeking approval of the tariff allowing for the recovery of its costs associated with the FutureGen
contract from all of its electric distribution customers, which was approved by the ICC on September 30, 2014.
A significant portion of the cost of the development of FutureGen was being funded by the DOE under the American Recovery and
Reinvestment Act of 2009. In early February 2015, the DOE suspended funding for the project until further clarity could be obtained on certain
significant hurdles facing the project, including the outcome of the litigation described above. Whether or not the DOE funding will be reinstated at
some later date is unknown at this time.
On January 13, 2016, FutureGen informed the Illinois Supreme Court that it had ceased all development efforts on the FutureGen project and
would soon be seeking to terminate the FutureGen supply agreements. Accordingly, FutureGen requested that the court dismiss the proceeding as
moot. A decision from the Illinois Supreme Court dismissing the matter is expected in early 2016. In February 2016, FutureGen terminated its
sourcing agreement with ComEd. As a result, ComEd is under no further obligation under this agreement.
Energy Efficiency and Renewable Energy Resources (Exelon and ComEd). Electric utilities in Illinois are required to include cost-
effective energy efficiency resources in their plans to meet an
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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