ComEd 2015 Annual Report Download - page 416

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
• the dates on which and the places where the exposure allegedly occurred; and
• the facts and circumstances relating to the alleged exposure.
Insurance and hold harmless agreements from contractors who employed the plaintiffs may cover a portion of any awards in the actions.
Continuous Power Interruption (ComEd)
Section 16-125 of the Illinois Public Utilities Act provides that in the event an electric utility, such as ComEd, experiences a continuous
power interruption of four hours or more that affects (in ComEd’s case) more than 30,000 customers, the utility may be liable for actual damages
suffered by customers as a result of the interruption and may be responsible for reimbursement of local governmental emergency and contingency
expenses incurred in connection with the interruption. Recovery of consequential damages is barred. The affected utility may seek from the ICC a
waiver of these liabilities when the utility can show that the cause of the interruption was unpreventable damage due to weather events or
conditions, customer tampering, or certain other causes enumerated in the law. As of December 31, 2015 and 2014, ComEd did not have any
material liabilities recorded for these storm events.
Telephone Consumer Protection Act Lawsuit (ComEd)
On November 19, 2013, a class action complaint was filed in the Northern District of Illinois on behalf of a single individual and a
presumptive class that would include all customers that ComEd enrolled in its Outage Alert text message program. The complaint alleged that
ComEd violated the Telephone Consumer Protection Act (TCPA) by sending text messages to customers without first obtaining their consent to
receive such messages. The complaint sought certification of a class along with statutory damages, attorneys’ fees, and an order prohibiting
ComEd from sending additional text messages. ComEd and the plaintiff agreed in principle to settle the suit for $5 million, with payments to the
class commencing in the fourth quarter 2015.
Fund Transfer Restrictions (Exelon, Generation, ComEd, PECO and BGE)
Under applicable law, Exelon may borrow or receive an extension of credit from its subsidiaries. Under the terms of Exelon’s intercompany
money pool agreement, Exelon can lend to, but not borrow from the money pool.
The Federal Power Act declares it to be unlawful for any officer or director of any public utility “to participate in the making or paying of any
dividends of such public utility from any funds properly included in capital account.” What constitutes “funds properly included in capital account” is
undefined in the Federal Power Act or the related regulations; however, FERC has consistently interpreted the provision to allow dividends to be
paid as long as: (1) the source of the dividends is clearly disclosed; (2) the dividend is not excessive; and (3) there is no self-dealing on the part of
corporate officials. While these restrictions may limit the absolute amount of dividends that a particular subsidiary may pay, Exelon does not
believe these limitations are materially limiting because, under these limitations, the subsidiaries are allowed to pay dividends sufficient to meet
Exelon’s actual cash needs.
Under Illinois law, ComEd may not pay any dividend on its stock unless, among other things, “[its] earnings and earned surplus are sufficient
to declare and pay same after provision is made for
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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