ComEd 2015 Annual Report Download - page 277

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The August 2015 settlement was filed at the NYPSC and at the FERC in October 2015 and remains subject to review and approval by both
agencies; such reviews are not expected to be completed until the first quarter of 2016.
Until final regulatory approvals are received, Generation is recognizing revenue based on market prices for energy and capacity delivered by
Ginna into the ISO-NY. Upon receiving regulatory approvals, under the RSSA contract terms, Generation would then recognize revenue based on
the final approved pricing contained in the contract retroactively from the April 1, 2015 effective date. While the RSSA is expected to receive
regulatory approvals and, therefore, permit Ginna to continue operating through the RSSA term, there is still a risk that, for economic reasons,
including the possibility that the FERC or the NYPSC may condition the approval of the RSSA on a modification of the rates set forth in the RSSA,
Ginna could be retired before 2029, which is the end of its operating license period. In the event the plant were to be retired before the current
license term ends in 2029, Exelon’s and Generation’s results of operations could be adversely affected by accelerated future decommissioning
costs, severance costs, increased depreciation rates, and impairment charges, among other items. However, it is not expected that such impacts
would be material to Exelon’s or Generation’s results of operations.
Federal Regulatory Matters
Transmission Formula Rate (Exelon, ComEd and BGE). ComEd’s and BGE’s transmission rates are each established based on a FERC-
approved formula. ComEd and BGE are required to file an annual update to the FERC-approved formula on or before May 15, with the resulting
rates effective on June 1 of the same year. The annual formula rate update is based on prior year actual costs and current year projected capital
additions. The update also reconciles any differences between the revenue requirement in effect beginning June 1 of the prior year and actual
costs incurred for that year. ComEd and BGE record regulatory assets or regulatory liabilities and corresponding increases or decreases to
operating revenues for any differences between the revenue requirement in effect and ComEd’s and BGE’s best estimate of the revenue
requirement expected to be filed with the FERC for that year’s reconciliation. As of December 31, 2015, and 2014, ComEd had a regulatory asset
associated with the transmission formula rate of $31 million and $21 million, respectively. As of December 31, 2015, and 2014, BGE had a net
regulatory asset associated with the transmission formula rate of $12 million and $1 million, respectively. The regulatory asset associated with
transmission true-up is amortized to Operating revenues within their Consolidated Statements of Operations of Comprehensive Income as the
associated amounts are recovered through rates.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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