Exelon 2003 Annual Report Download - page 131

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129Notes to Consolidated Financial Statements
EXELON CORPORATION AND SUBSIDIARY COMPANIES
based on the expected return on equity of ComEd in any
given year. ComEd expects to fully recover and amortize
these charges by the end of 2006, but may increase or de-
crease its annual amortization to maintain its earnings
within the earnings cap provisions established by Illinois leg-
islation. See Note 4—Regulatory Issues for discussion of re-
coverable transition cost amortization.
Deferred Income Taxes. These costs represent the difference
between the method in which the regulator allows for the
recovery of income taxes and how income taxes would be
recorded by unregulated entities. These regulatory assets
and liabilities associated with deferred income taxes, re-
corded in compliance with SFAS No. 71 and SFAS No. 109, in-
clude the deferred tax effects associated principally with
liberalized depreciation accounted for in accordance with
the ratemaking policies of the ICC and PUC, as well as the
revenue impacts thereon, and assume continued recovery of
these costs in future rates.
Competitive Transition Charges. These charges represent PE-
CO’s stranded costs that the PUC determined would be
recoverable through regulated rates. These costs are related to
the deregulation of the generation portion of the electric
utility business in Pennsylvania. The CTC includes intangible
transition property sold to the PETT, a subsidiary of PECO, in
connection with the securitization of PECO’s stranded cost re-
covery. These charges are being amortized through December
31, 2010 with a return on the unamortized balance of 10.75%.
Non-Pension Postretirement Benefits. These costs are the re-
sult of transitioning to SFAS No. 106 in 1993, which are
recoverable in rates.
MGP Regulatory Asset. These costs represent estimated envi-
ronmental remediation costs which are recoverable through
regulated rates. PECO has identified 27 sites where former
MGP activities have or may have resulted in site con-
tamination.
DOE Facility Decommissioning. These costs represent PECO’s
share of recoverable decommissioning and decontamination
costs of the DOE nuclear fuel enrichment facilities estab-
lished by the National Energy Policy Act of 1992.
Recovery/Settlement of Regulatory Assets and Liabilities. The
regulatory assets related to the nuclear decommissioning
costs and deferred income taxes did not require a cash out-
lay of investor supplied funds; consequently, these costs are
not earning a rate of return. Recovery of the regulatory as-
sets for loss on reacquired debt and recoverable transition
costs is provided for through regulated revenue sources.
Therefore, they are earning a rate of return.
Deferred Energy Costs (Current Asset). These costs represent
fuel costs recoverable under the purchase gas adjustment
clause.
December 31,
2003 2002
Accrued expenses
Taxes accrued $ 304 $ 420
Interest accrued 247 307
Other accrued expenses 677 627
Total $1,228 $1,354
NOTE 21 • SEGMENT INFORMATION
Exelon operates in three business segments: Energy Delivery
(ComEd and PECO), Generation and Enterprises. Exelon eval-
uates the performance of its business segments based on
net income.
Energy Delivery consists of the retail electricity dis-
tribution and transmission businesses of ComEd in northern
Illinois and PECO in southeastern Pennsylvania and the
natural gas distribution business of PECO located in the
Pennsylvania counties surrounding the City of Philadelphia.
Generation consists of electric generating facilities, energy
marketing operations and Exelon’s interest in Sithe. Enter-
prises consists of competitive retail energy sales, energy and
infrastructure services, a communications joint venture and
other investments weighted towards the communications,
energy services and retail services industries. In September
2003, Enterprises sold the electric construction and services,
underground and telecom businesses of InfraSource, Inc. In
December 2003, Enterprises signed agreements to sell the
Chicago operations and the Aladdin thermal facility of
Thermal and certain direct investments held by Enterprises.
In 2004, Exelon Energy Company will become part of Gen-
eration, and Enterprises will continue to pursue oppor-
tunities to sell other Enterprises businesses.