ComEd 2015 Annual Report Download - page 275

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
On September 3, 2013, BGE filed a comprehensive long term assessment examining potential alternatives for improving the resiliency of the
electric grid and a staffing analysis reviewing historical staffing levels as well as forecasting staffing levels necessary under various storm
scenarios. During the summer of 2014, an evaluation of the reports filed by BGE and other Maryland utilities was undertaken by consultants on
behalf of the MDPSC and MDPSC Staff. The MDPSC Staff also proposed standards for reliability during major events and estimated times of
restoration as well as undertaking an evaluation of performance-based ratemaking principles and methodologies that would more directly and
transparently align reliable service with the utilities’ distribution rates and that reduce returns or otherwise penalize sub-standard performance. The
MDPSC held hearings in September 2014. BGE currently cannot predict the outcome of these proceedings, which may result in increased capital
expenditures and operating costs.
The Maryland Strategic Infrastructure Development and Enhancement Program (Exelon and BGE). In 2013, legislation intended to
accelerate gas infrastructure replacements in Maryland was signed into law. The law established a mechanism, separate from base rate
proceedings, for gas companies to promptly recover reasonable and prudent costs of eligible infrastructure replacement projects incurred after
June 1, 2013. The monthly surcharge and infrastructure replacement costs must be approved by the MDPSC and are subject to a cap and require
an annual true-up of the surcharge revenues against actual expenditures. Investment levels in excess of the cap would be recoverable in a
subsequent gas base rate proceeding at which time all costs for the infrastructure replacement projects would be rolled into gas distribution rates.
Irrespective of the cap, BGE is required to file a gas rate case every five years under this legislation.
On August 2, 2013, BGE filed its infrastructure replacement plan and associated surcharge. On January 29, 2014, the MDPSC issued a
decision conditionally approving the first five years of BGE’s plan and surcharge. On November 16, 2015, BGE filed a surcharge update to be
effective January 1, 2016, including a true-up of cost estimates included in the 2015 surcharge, along with its 2016 project list and projected
capital estimates of $113 million to be included in the 2016 surcharge calculation. The MDPSC subsequently approved BGE’s 2016 project list and
the proposed surcharge for 2016, which included the 2015 surcharge true-up. As of December 31, 2015, BGE recorded a regulatory asset of less
than $1 million, representing the difference between the surcharge revenues and program costs.
In 2014, the residential consumer advocate in Maryland appealed MDPSC’s decision on BGE’s infrastructure replacement plan and
associated surcharge with the Baltimore City Circuit Court, who affirmed the MDPSC’s decision. On October 10, 2014, the residential consumer
advocate noticed its appeal to the Maryland Court of Special Appeals from the judgment entered by the Baltimore City Circuit Court. During the
third quarter of 2015, the residential consumer advocate, MDPSC and BGE filed briefs. Oral argument in this matter was held before the Court of
Special Appeals on November 3, 2015. On January 28, 2016, the Maryland Court of Special Appeals issued a decision affirming the MDPSC’s
decision.
New York Regulatory Matters
Ginna Nuclear Power Plant Reliability Support Services Agreement (Exelon and Generation). Ginna Nuclear Power Plant’s (Ginna)
prior period fixed-price PPA contract with Rochester Gas & Electric Company (RG&E) expired in June 2014. In light of the expiration of the PPA
and prevailing market conditions, in January 2014, Ginna advised the New York Public Service Commission (NYPSC) and the ISO-NY that, in the
absence of a reliability need, Ginna management
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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