Exelon 2002 Annual Report Download - page 46

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Generation’s average margin and other operating data for 2002
and 2001 were as follows:
($/MWh)(1) 2002 2001 % Change
Average Revenue
Energy Delivery $ 33.48 $ 32.55 2.9%
Exelon Energy 44.87 41.53 8.0%
Market Sales 30.75 37.00 (16.9%)
Total—excluding
the trading portfolio 32.68 34.51 (5.3%)
Average Supply Cost(2)—
excluding trading portfolio $ 20.14 $ 20.26 (0.6%)
Average Margin—
excluding the trading portfolio $12.54 $ 14.25 (12.0%)
(1) One megawatthour (MWh) is the equivalent of one thousand kWhs.
(2) Average supply cost includes purchased power and fuel costs.
2002 2001
Nuclear fleet capacity factor(1) 92.7% 94.4%
Nuclear fleet production cost per MWh(1) $ 13.00 $ 12.78
Average purchased power cost
for wholesale operations per MWh $ 41.83 $ 45.94
(1) Including AmerGen and excluding Salem.
The factors below contributed to the overall reduction in
Generation’s average margin for 2002.
Generation’s GWh deliveries increased 5.8% in 2002 primar-
ily due to favorable weather conditions,which increased demand
for Energy Delivery and increased market sales attributable
to the increased supply from acquired generation and power
uprates at existing facilities,slightly offset by a decrease in sales
to Exelon Energy, Enterprises’ retail energy unit, due to lower
demand in the eastern energy markets.
Generation’s supply mix changed due to:
– increased purchases resulting from the supply agreement
with AmerGen’s Unit No.1 atThree Mile Island Nuclear Station
facility which was new in 2002,
– decreased nuclear generation due to an increase in the number
of refueling outages during 2002,slightly offset by power uprates,
– increased Fossil and Hydro net generation due to the effect of
the acquisition of two generating plants in April, a peaking
facility placed in service in July and the Sithe New England
plants acquired in November, which in total account for an
increase of 2,500 GWhs, and strong waterflows which increased
the hydro output by 400 GWhs, and
– lower production in our Mid-Atlantic coal and oil units due
to cooler summer weather conditions and lower power prices
in 2002.
Generation’s average revenue was affected by:
– increased weighted average on and off peak prices per MWh
for supply agreements with ComEd,
– higher contracted prices from Exelon Energy,impacted by lower
actual volumes to those customers,and
– lower market prices.
The lower nuclear capacity factor and increased nuclear pro-
duction costs are primarily due to 260 days of planned outage
time in 2002 versus 153 days in 2001. Nuclear production cost
increased from $12.78 to $13.00 primarily due to an $80 million
increase in outage costs and the number of refueling outages
in 2002 as compared to 2001.These decreases are slightly offset
by a $25 million decrease in payroll costs due to headcount
reductions and $4 million in lower project expenditures. The
decrease in purchased power costs was primarily due to
depressed wholesale power market prices.
Results of Operations–Enterprises
Enterprises consists primarily of the infrastructure services
business of InfraSource, Inc. (InfraSource), the energy services
business of Exelon Services, Inc. (Exelon Services), the competi-
tive retail energy sales business of Exelon Energy, the district
cooling business of Exelon Thermal Technologies, Inc., commu-
nications joint ventures and other investments weighted
towards the communications,energy services and retail services
industries.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
exelon corporation and subsidiary companies
Enterprises 2002 2001 Variance % Change
Operating Revenues $ 2,033 $ 2,292 $ (259) (11.3%)
Operating Income (Loss) (14) (77) 63 81.8%
Income (Loss) Before Income Taxes and Cumulative
Effect of Changes in Accounting Principles 134 (128) 262 n.m.
Income (Loss) Before Cumulative Effect of
Changes in Accounting Principles 65 (85) 150 176.5%
Net Income (Loss) (178) (85) (93) (109.4%)
n.m.–not meaningful