ComEd 2015 Annual Report Download - page 363

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
expense for Exelon and Generation of $41 million (net of Federal taxes) and $11 million (net of Federal taxes), respectively. In 2014, in accordance
with the policy, Exelon and Generation recorded a deferred state tax benefit of $28 million (net of Federal taxes) and $40 million (net of Federal
taxes), respectively. The amounts recorded for 2013 in accordance with the policy were immaterial.
Allocation of Tax Benefits (Exelon, Generation, ComEd, PECO and BGE)
Generation, ComEd, PECO and BGE are all party to an agreement with Exelon and other subsidiaries of Exelon that provides for the
allocation of consolidated tax liabilities and benefits (Tax Sharing Agreement). The Tax Sharing Agreement provides that each party is allocated an
amount of tax similar to that which would be owed had the party been separately subject to tax. In addition, any net benefit attributable to Exelon
is reallocated to the other Registrants. That allocation is treated as a contribution to the capital of the party receiving the benefit. During 2015,
Generation, PECO, and BGE recorded an allocation of Federal tax benefits from Exelon under the Tax Sharing Agreement of $57 million, $16
million, and $7 million respectively. ComEd did not record an allocation of Federal tax benefits from Exelon under the Tax Sharing Agreement as a
result of a tax net operating loss.
During 2014, Generation and PECO recorded an allocation of Federal tax benefits from Exelon under the Tax Sharing Agreement of $55
million and $25 million, respectively. ComEd and BGE did not record an allocation of Federal tax benefits from Exelon under the Tax Sharing
Agreement as a result of tax net operating losses.
During 2013, Generation and PECO recorded an allocation of Federal tax benefits from Exelon under the Tax Sharing Agreement of $26
million and $27 million, respectively. During 2013, ComEd and BGE did not record an allocation of Federal tax benefits from Exelon under the Tax
Sharing Agreement as a result of ComEd’s and BGE’s tax net operating loss generated primarily by the bonus depreciation deduction allowed
under the Tax Relief Act of 2010.
16. Asset Retirement Obligations (Exelon, Generation, ComEd, PECO and BGE)
Nuclear Decommissioning Asset Retirement Obligations
Generation has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. To estimate
its decommissioning obligation related to its nuclear generating stations for financial accounting and reporting purposes, Generation uses a
probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant
estimates and assumptions, and are based on decommissioning cost studies, cost escalation rates, probabilistic cash flow models and discount
rates. Generation generally updates its ARO annually during the third quarter, unless circumstances warrant more frequent updates, based on its
review of updated cost studies and its annual evaluation of cost escalation factors and probabilities assigned to various scenarios.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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