Exelon 2014 Annual Report Download - page 151

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The court held the ICC abused its discretion in not reducing ComEd’s rate base to account for an additional 18 months of
accumulated depreciation while including post-test year pro forma plant additions through that period. ComEd continued to bill rates
as established under the ICC’s order in the 2007 Rate Case until June 1, 2011 when the rates set in the 2010 electric distribution
rate case became effective. In subsequent ICC proceedings, the ICC issued an order requiring ComEd to provide a refund of
approximately $37 million to customers related to the treatment of post-test year accumulated depreciation issue. On March 26,
2012, ComEd filed a notice of appeal with the Court. However, on September 27, 2013 the Court ruled against ComEd on the
accumulated depreciation issue and affirmed that ComEd owes a refund to customers of approximately $37 million, including
interest. On September 18, 2014, the ICC issued an order requiring the refund to occur in November 2014, rather than the eight
month period previously approved. The refund was included with the Rider AMP refund discussed below. Former ComEd customers
were eligible for a refund. ComEd was fully reserved for this liability at December 31, 2013. As of December 31, 2014 ComEd had
refunded substantially all amounts to customers.
Advanced Metering Program Proceeding. As part of ComEd’s 2007 Rate Case, the ICC approved recovery of costs associated
with ComEd’s Rider SMP for the limited purpose of implementing a pilot program for AMI. In October 2009, the ICC approved
ComEd’s AMI pilot program and associated rider (Rider AMP). ComEd collected approximately $24 million under Rider AMP and
had no collections under Rider SMP through December 31, 2014. In ComEd’s 2010 electric distribution rate case, the ICC approved
ComEd’s transfer of certain other costs from recovery under Rider AMP to recovery through electric distribution rates.
Several parties, including the Illinois Attorney General, appealed the ICC’s orders on Rider SMP and Rider AMP. The Illinois
Appellate Court reversed the ICC’s approval of the cost recovery provisions of Rider SMP and Rider AMP on September 30, 2010
and March 19, 2012, respectively. In both cases, the Court ruled that the ICC’s approval of the rider constituted single-issue
ratemaking. ComEd filed Petitions for Leave to Appeal to the Illinois Supreme Court, which were denied.
In October 2013, the ICC opened an investigation on Rider AMP to determine if a refund is required and if so, to determine the
appropriate refund amount. The ALJ presiding over the investigation requested each party provide a pre-trial memorandum
describing their positions, which were submitted on April 10, 2014. The ICC Staff and the Illinois Attorney General proposed a refund
of $14.6 million, representing the amount they claim was collected under Rider AMP since September 30, 2010, the date the Illinois
Appellate Court reversed the ICC’s approval of the cost recovery provisions of Rider SMP. During the second quarter of 2014,
ComEd reached a tentative agreement to jointly resolve the disputed refund claim. On September 18, 2014, the ICC approved a
refund of $9.5 million plus interest to be issued to current customers in November 2014. Former ComEd customers also were eligible
for a refund. As of December 31, 2014 ComEd had refunded substantially all amounts to customers.
Grand Prairie Gateway Transmission Line. On December 2, 2013, ComEd filed a request to obtain the ICC’s approval to
construct a 60-mile overhead 345kV transmission line that traverses Ogle, DeKalb, Kane and DuPage Counties in Northern
Illinois. On May 28, 2014, in a separate proceeding, FERC issued an order granting ComEd’s request to include 100% of the capital
costs recorded to construction work in progress during construction of the line in ComEd’s transmission rate base. If the project is
cancelled or abandoned for reasons beyond ComEd’s control, FERC approved the ability for ComEd to recover 100% of its prudent
costs incurred after May 21, 2014 and 50% of its costs incurred prior to May 21, 2014 in ComEd’s transmission rate base. On
October 22, 2014, the ICC issued an order approving ComEd’s Grand Prairie Gateway Project over the objection of numerous
landowners and the City of Elgin. Four parties filed timely applications for rehearing before the ICC. On November 25, 2014, the ICC
denied the rehearing application filed by the Forest Preserve District of Kane County, but granted rehearing on the application of
certain landowners who requested that the ICC consider an alternate route for a three-mile segment of the line in Kane County. The
rehearing proceeding is currently pending and the ICC must enter a final order on rehearing by April 24, 2015. On December 10,
2014, the ICC denied the remaining two applications for rehearing. On January 15, 2015, those two parties, the City of Elgin and the
SKP landowner group and Utility Risk Management Corporation (collectively, the SKP/URMC party), each filed a Notice of Appeal
with the Second District Appellate Court. On February 3, 2015, the ICC filed motions with the Second District Appellate Court
seeking to extend the time for the ICC to file the record on appeal until after the ICC issues its Order on rehearing. The ICC also filed
a motion to consolidate those appeals. ComEd expects to begin construction of the line in the second quarter of 2015 with an in-
service date expected in the second quarter of 2017.
Utility Consolidated Billing and Purchase of Receivables. ComEd is required to buy certain RES receivables, primarily
residential and small commercial and industrial customers, at the option of the RES, for electric supply service and then include
those amounts on ComEd’s bill to customers. Receivables are purchased at a discount to compensate ComEd for uncollectible
accounts. ComEd produces consolidated bills for the aforementioned retail customers reflecting charges for electric delivery service
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