Exelon 2003 Annual Report Download - page 124

122 Notes to Consolidated Financial Statements
EXELON CORPORATION AND SUBSIDIARY COMPANIES
Other Purchase Obligations
In addition to Exelon’s energy commitments as described
above, Exelon has commitments to purchase fuel supplies
for nuclear generation and various other purchase
commitments related to the normal day-to-day operations
of Exelon’s business. As of December 31, 2003, these
commitments were as follows:
Expiration within
Total 2004 2005-2006 2007-2008
2009
and beyond
Fuel purchase agreements (a) $3,034 $476 $825 $582 $1,151
Other purchase commitments (b) 145 31 71 38 5
(a) Fuel purchase agreements—Commitments to purchase fuel supplies for nuclear and fossil generation.
(b) Other purchase commitments—Commitments for spent fuel storage casks and other disposal services at nuclear generating facilities, minimum spend requirements related
to the sale of InfraSource (see Note 2—Acquisitions and Dispositions) and amounts committed for information technology services.
Two affiliates of Exelon New England have long-term supply
agreements through December 2022 with Distrigas of Mas-
sachusetts, LLC (Distrigas) for gas supply, primarily for the
Boston Generating units. Under the agreements, prices
are indexed to New England gas markets. Exelon New Eng-
land has guaranteed these entities’ financial obligations to
Distrigas under the Distrigas agreements. It is currently an-
ticipated that Exelon New England’s guaranty to Distrigas
will continue following the eventual transfer of the owner-
ship interests in Boston Generating. This guaranty is non-
recourse to Generation. At December 31, 2003, Exelon New
England had net assets of approximately $70 million, ex-
clusive of the Boston Generating net assets.
Commercial Commitments
Exelon’s commercial commitments as of December 31, 2003,
representing commitments not recorded on the balance sheet
but potentially triggered by future events, including obliga-
tions to make payment on behalf of other parties and financ-
ing arrangements to secure obligations, were as follows:
Expiration within
Total 2004 2005-2006 2007-2008
2009
and beyond
Letters of credit (non-debt) (a) $ 185 $ 185 $ – $ – $ –
Letters of credit (long-term debt) – interest coverage (b) 13 13 – – –
Surety bonds (c) 555 330 92 4 129
Performance guarantees (d) 201 – – – 201
Energy marketing contract guarantees (e) 216 205 11 – –
Nuclear insurance guarantees (f) 1,710 – – – 1,710
Lease guarantees (g) 22 – 2 – 20
Midwest Generation Capacity Reservation Agreement guarantee (h) 32 3 7 8 14
Total commercial commitments $2,934 $736 $112 $12 $2,074
(a) Letters of credit (non-debt)—Exelon and certain of its subsidiaries maintain non-debt letters of credit to provide credit support for certain transactions as requested by third
parties. As of December 31, 2003, Exelon had $146 million of outstanding letters of credit (non-debt) issued under its $1.5 billion credit agreements. Guarantees of $102 million
have been issued to provide support for certain letters of credit as required by third parties.
(b) Letters of credit (long-term debt) interest coverage—Reflects the interest coverage portion of letters of credit supporting floating-rate pollution control bonds. The principal
amount of the floating-rate pollution control bonds of $363 million is reflected in long-term debt in Exelon’s Consolidated Balance Sheet.
(c) Surety bonds—Guarantees issued related to contract and commercial surety bonds, excluding bid bonds.
(d) Performance guarantees—Guarantees issued to ensure execution under specific contracts.
(e) Energy marketing contract guarantees—Guarantees issued to ensure performance under energy commodity contracts.
(f) Nuclear insurance guarantees—Guarantees of nuclear insurance required under the Price-Anderson Act. $1.0 billion of this total exposure is exempt from the $4.5 billion PUHCA
guarantee limit by SEC rule.
(g) Lease guarantees—Guarantees issued to ensure payments on building leases.
(h) Midwest Generation Capacity Reservation Agreement guarantee—In connection with ComEd’s agreement with the City of Chicago entered into on February 20, 2003, Midwest
Generation assumed from Chicago a Capacity Reservation Agreement that Chicago had entered into with Calumet Energy Team, LLC. ComEd will reimburse Chicago for any
nonperformance by Midwest Generation under the Capacity Reservation Agreement. Under FIN No. 45, $3 million is included as a liability on Exelon’s Consolidated Balance
Sheets at December 31, 2003.
Additionally, Exelon could be required to guarantee up to an additional $42 million related to various construction and tax obli-
gations associated with the Boston Generating facilities.