ComEd 2015 Annual Report Download - page 286

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Asset retirement obligations. These costs represent future legally required removal costs associated with existing asset retirement
obligations. PECO will begin to earn a return on, and a recovery of, these costs once the removal activities have been performed. ComEd and
BGE will recover these costs through future depreciation rates and will earn a return on these costs once the removal activities have been
performed. See Note 16—Asset Retirement Obligations for additional information.
MGP remediation costs. ComEd is allowed recovery of these costs under ICC approved rates. For PECO, these costs are recoverable
through rates as affirmed in the 2010 approved natural gas distribution rate case settlement. The period of recovery for both ComEd and PECO will
depend on the timing of the actual expenditures. ComEd and PECO are not earning a return on the recovery of these costs. While BGE does not
have a rider for MGP clean-up costs, BGE has historically received recovery of actual clean-up costs on a site-specific basis in distribution rates.
For BGE, $5 million of clean-up costs incurred during the period from July 2000 through November 2005 and an additional $1 million from
December 2005 through November 2010 are recoverable through rates in accordance with MDPSC orders. BGE is earning a return on this
regulatory asset and these costs are being amortized over 10-year periods that began in January 2006 and December 2010, respectively. The
recovery period for the 10-year period that began January 2006 was extended for an additional 24 months, in accordance with the MDPSC
approved 2014 electric and natural gas distribution rate case order. See Note 23—Commitments and Contingencies for additional information.
Under recovered uncollectible accounts. These amounts represent the difference between ComEd’s annual uncollectible accounts
expense and revenues collected in rates through an ICC-approved rider. The difference between net uncollectible account charge-offs and
revenues collected through the rider each calendar year is recovered or refunded over a twelve-month period beginning in June of the following
calendar year. ComEd does not earn a return on these under recoveries.
Renewable energy. In December 2010, ComEd entered into several 20-year floating-to-fixed energy swap contracts with unaffiliated
suppliers for the procurement of long-term renewable energy. Delivery under the contracts began in June 2012. Since the swap contracts were
deemed prudent by the Illinois Settlement Legislation, ensuring ComEd of full recovery in rates, the changes in fair value each period as well as an
offsetting regulatory asset or liability are recorded by ComEd. ComEd does not earn (pay) a return on the regulatory asset (liability). The basis for
the mark-to-market derivative asset or liability position is based on the difference between ComEd’s cost to purchase energy at the market price
and the contracted price.
Energy and transmission programs. These amounts represent under (over) recoveries related to energy and transmission costs
recoverable (refundable) under ComEd’s ICC and/or FERC-approved rates. Under (over) recoveries are recoverable (refundable) over a one-year
period or less. ComEd earns a return or interest on under-recovered costs and pays interest on over-recovered costs to customers. As of
December 31, 2015, ComEd’s regulatory asset of $43 million included $5 million related to under-recovered energy costs, $31 million associated
with transmission costs recoverable through its FERC-approved formula rate tariff, and $7 million of Constellation merger and integration costs to
be recovered upon FERC approval. As of December 31, 2015, ComEd’s regulatory liability of $53 million included $29 million related to over-
recovered energy costs and $24 million associated with revenues received for renewable energy requirements. As of December 31, 2014,
ComEd’s regulatory asset of $33 million included $4 million related to under-recovered energy costs, $22 million associated with transmission
costs recoverable through its FERC-approved formula rate tariff, and $7 million of
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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