ComEd 2015 Annual Report Download - page 36

Table of Contents
on progress towards the 25% mandate; its costs and benefits; the need for target adjustments; and the status of federal programs. In 2016, the
Legislature will review the progress report, its economic impacts on manufacturing sector and other information and determine whether to continue,
adjust or eliminate the requirement to achieve a 25% reduction by 2020.
. In a world increasingly concerned about global climate change and regulatory action to reduce
GHG, Exelon’s low-carbon generating fleet is seen by management as a competitive advantage. Exelon remains one of the largest, lowest carbon
electric generators in the United States: nuclear for base load, natural gas for marginal and peak demand, hydro and pumped storage, and
supplemental wind and solar renewables. As further legislation and regulation imposing requirements on emissions of GHG and air pollutants are
promulgated, Exelon’s low-carbon, low-emission generation fleet will position the company to benefit from its comparative advantage over other
generation fleets.
Renewable and Alternative Energy Portfolio Standards
Thirty-nine states and the District of Columbia have adopted some form of RPS requirement. Illinois, Pennsylvania and Maryland have laws
specifically addressing energy efficiency and renewable energy initiatives. In addition to state level activity, RPS legislation has been considered
and may be considered again in the future by the United States Congress. Also, states that currently do not have RPS requirements may adopt
such legislation in the future.
Illinois utilities are required to procure cost-effective renewable energy resources in amounts that equal or exceed 2% of the total electricity
that each electric utility supplies to its eligible retail customers. ComEd is also required to acquire amounts of renewable energy resources to
cumulatively increase this percentage to at least 10% by June 1, 2015 and an ultimate target of at least 25% by June 1, 2025. All goals are
subject to rate impact criteria set forth by Illinois legislation. As of December 31, 2015, ComEd had purchased sufficient renewable energy
resources or equivalents, such as RECs, to comply with the Illinois legislation. ComEd currently retires all RECs upon transfer and acceptance.
ComEd is permitted to recover procurement costs of RECs from retail customers without mark-up through rates.
The AEPS Act became effective for PECO on January 1, 2011. During 2015, PECO was required to supply approximately 5.0% of electric
energy generated from Tier I alternative energy resources (including solar, wind power, low-impact hydropower, geothermal energy, biologically
derived methane gas, fuel cells, biomass energy, coal mine methane and black liquor generated within Pennsylvania), as measured in AECs,
through May 31, 2015 and subsequently 5.5% beginning June 1, 2015 and continuing through May 31, 2016. PECO was also required to supply
6.2% of electric energy generated from Tier II alternative energy resources (including waste coal, demand-side management, large-scale
hydropower, municipal solid waste, generation of electricity utilizing wood and by-products of the pulping process and wood, distributed generation
systems and integrated combined coal gasification technology), as measured in AECs, through May 31, 2015 and subsequently 8.2% beginning
June 1, 2015 and continuing through May 31, 2016. The compliance requirements will incrementally escalate to 8.0% for Tier I and 10.0% for Tier
II by 2021. In order to comply with these requirements, PECO entered into agreements with varying terms with accepted bidders, including
Generation, to purchase non-solar Tier I, solar Tier 1 and Tier II AECs. PECO also purchases AECs through its DSP Program full requirement
contracts.
Section 7-703 of the Public Utilities Article in Maryland sets forth the RPS requirement, which applies to all retail electricity sales in Maryland
by electricity suppliers. The RPS requirement requires that suppliers obtain a specified percentage of the electricity it sells from Tier 1 sources
(solar, wind, biomass, methane, geothermal, ocean, fuel cell, small hydroelectric, and poultry litter) and Tier 2
29
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.