Exelon 2001 Annual Report Download - page 69

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PECO
In 2001, the phased process to implement competition in the electric industry continued as mandated by the requirements
of the PUC’s Final Restructuring Order.
Customer Choice The PUC’s Final Restructuring Order provided for the phase-in of customer choice of electric generation supplier
(EGS) for all customers and as of January 1, 2000 all customers were eligible for customer choice. The Final Restructuring Order
also established market share thresholds to ensure that a minimum number of residential and commercial customers choose
an EGS or a PECO affiliate. If less than 35% and 50% of residential and commercial customers have chosen an EGS, including
residential customers assigned to an EGS as a provider of last resort default supplier, by January 1, 2001 and January 1, 2003,
respectively, the number of customers sufficient to meet the necessary threshold levels shall be randomly selected and assigned
to an EGS through a PUC-determined process. On January 1, 2001, the 35% threshold was met for all three customer classes as a
result of agreements assigning customers to New Power Company and Green Mountain as providers of last resort default
service. During 2001, PECO experienced an increase in the number of customers selecting or returning to PECO as their EGS
and at December 31, 2001, approximately 28% of PECO’s residential load, 6% of its small commercial and industrial load and
5% of its large commercial and industrial load were purchasing generation from an alternative generation supplier.
Customers who purchase energy from an EGS continue to pay a delivery charge.
Rate Reductions and Caps Under the Final Restructuring Order, retail electric rates were capped at year-end 1996 levels
(system-wide average of 9.96 cents/kilowatt hour (kWh)) through June 2005. The Final Restructuring Order required PECO
to reduce its retail electric rates by 8% from the 1996 system-wide average rate on January 1, 1999. This rate reduction
decreased to 6% on January 1, 2000 until January 1, 2001. The transmission and distribution rate component was capped at
a system-wide average rate of 2.98 cents/kWh through June 30, 2005. Additionally, generation rate caps, defined as the sum
of the applicable transition charge and energy and capacity charge, will remain in effect through 2010.
On March 16, 2000, the PUC issued an order authorizing PECO to securitize up to an additional $1 billion of its authorized
stranded costs recovery. In accordance with the terms of that order, PECO provided its retail customers with rate reductions
of $60 million for calendar year 2001 only.
Under a comprehensive settlement agreement in connection with achieving regulatory approval of the Merger, PECO
agreed to $200 million in aggregate rate reductions for all customers in Pennsylvania over the period January 1, 2002
through 2005 and extended the rate caps on PECO’s retail electric distribution charges through December 31, 2006.
(07) Supplemental Financial Information
Supplemental Income Statement Information
For the Years Ended December 31,
2001 2000 1999
Taxes Other Than Income
Utility $342 $ 196 $ 155
Real estate 140 68 72
Payroll 81 41 28
Other 60 17 7
Total $623 $ 322 $ 262
Other, Net
Investment income $ 47 $ 64 $ 52
Gain (loss) on disposition of assets, net 4 (19) (1)
Settlement of power purchase agreement – 6 –
AFUDC, equity and borrowed 18 3 4
Other 10 (1) 4
Total $79 $ 53 $59