ComEd 2015 Annual Report Download - page 415

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
On November 22, 2013, the Supreme Court of Pennsylvania held that the Pennsylvania Workers Compensation Act does not apply to an
employee’s disability or death resulting from occupational disease, such as diseases related to asbestos exposure, which manifests more than
300 weeks after the employee’s last employment-based exposure, and that therefore the exclusivity provision of the Act does not preclude such
employee from suing his or her employer in court. The Supreme Court’s ruling reverses previous rulings by the Pennsylvania Superior Court
precluding current and former employees from suing their employers in court, despite the fact that the same employee was not eligible for workers
compensation benefits for diseases that manifest more than 300 weeks after the employee’s last employment-based exposure to asbestos. Since
the Pennsylvania Supreme Court’s ruling in November 2013, Exelon, Generation, and PECO have experienced an increase in asbestos-related
personal injury claims brought by former PECO employees, all of which have been reserved against on a claim by claim basis. Those additional
claims are taken into account in projecting estimated future asbestos-related bodily injury claims.
On November 4, 2015, the Illinois Supreme Court found that the provisions of the Illinois’ Workers’ Compensation Act and the Workers’
Occupational Diseases Act barred an employee from bringing a direct civil action against an employer for latent diseases, including asbestos-
related diseases that fall outside the 25-year limit of the statute of repose. The Illinois Supreme Court’s ruling reversed previous rulings by the
Illinois Court of Appeals, which initially ruled that the Illinois Worker’s Compensation law should not apply in cases where the diagnosis of an
asbestos related disease occurred after the 25-year maximum time period for filing a Worker’s Compensation claim. As a result of this ruling,
Exelon, Generation, and ComEd have not recorded an increase to the asbestos-related bodily injury liability as of December 31, 2015.
There is a reasonable possibility that Exelon may have additional exposure to estimated future asbestos-related bodily injury claims in
excess of the amount accrued and the increases could have a material adverse effect on Exelon’s, Generation’s and PECO’s future results of
operations and cash flows.
BGE. Since 1993, BGE and certain Constellation (now Generation) subsidiaries have been involved in several actions concerning asbestos.
The actions are based upon the theory of “premises liability,” alleging that BGE and Generation knew of and exposed individuals to an asbestos
hazard. In addition to BGE and Generation, numerous other parties are defendants in these cases.
Approximately 454 individuals who were never employees of BGE or certain Constellation subsidiaries have pending claims each seeking
several million dollars in compensatory and punitive damages. Cross-claims and third-party claims brought by other defendants may also be filed
against BGE and certain Constellation subsidiaries in these actions. To date, most asbestos claims which have been resolved have been
dismissed or resolved without any payment by BGE or certain Constellation subsidiaries and a small minority of these cases has been resolved
for amounts that were not material to BGE or Generation’s financial results.
Discovery begins in these cases after they are placed on the trial docket. At present, only two of the pending cases are set for trial. Given
the limited discovery in these cases, BGE and Generation do not know the specific facts that are necessary to provide an estimate of the
reasonably possible loss relating to these claims; as such, no accrual has been made and a range of loss is not estimable. The specific facts not
known include:
• the identity of the facilities at which the plaintiffs allegedly worked as contractors;
• the names of the plaintiffs’ employers;
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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