Exelon 2014 Annual Report Download - page 17

Nuclear Insurance. Generation is subject to liability, property damage and other risks associated with major incidents at any of its
nuclear stations, including the CENG nuclear stations. Generation has reduced its financial exposure to these risks through
insurance and other industry risk-sharing provisions. See “Nuclear Insurance” within Note 22—Commitments and Contingencies of
the Combined Notes to Consolidated Financial Statements for details.
Generation is self-insured to the extent that any losses may exceed the amount of insurance maintained or are within the policy
deductible for its insured losses. Such losses could have a material adverse effect on Exelon’s and Generation’s financial condition
and results of operations.
Decommissioning. NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that
funds will be available in specified minimum amounts at the end of the life of the facility to decommission the facility. See
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Exelon
Corporation, Executive Overview; MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, Critical Accounting Policies and Estimates, Nuclear Decommissioning, Asset Retirement Obligations and
Nuclear Decommissioning Trust Fund Investments; and Note 3—Regulatory Matters, Note 11—Fair Value of Financial Assets and
Liabilities and Note 15—Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional
information regarding Generation’s NDT funds and its decommissioning obligations.
Dresden Unit 1 and Peach Bottom Unit 1 have ceased power generation. SNF at Dresden Unit 1 is currently being stored in dry cask
storage until a permanent repository under the NWPA is completed. All SNF for Peach Bottom Unit 1, which ceased operation in
1974, has been removed from the site and the SNF pool is drained and decontaminated. Generation’s estimated ARO liabilities to
decommission Dresden Unit 1 and Peach Bottom Unit 1 as of December 31, 2014 were $188 million and $111 million, respectively.
As of December 31, 2014, NDT funds set aside to pay for these obligations were $459 million.
Zion Station Decommissioning. On December 11, 2007, Generation entered into an Asset Sale Agreement (ASA) with
EnergySolutions, Inc. and its wholly owned subsidiaries, EnergySolutions, LLC (EnergySolutions) and ZionSolutions, LLC
(ZionSolutions) under which ZionSolutions assumed responsibility for decommissioning Zion Station, which is located in Zion, Illinois
and ceased operation in 1998.
On September 1, 2010, Generation and EnergySolutions completed the transactions contemplated by the ASA. Specifically,
Generation transferred to ZionSolutions substantially all of the assets (other than land) associated with Zion Station, including assets
held in related NDT funds. In consideration for Generation’s transfer of those assets, ZionSolutions assumed decommissioning and
other liabilities, excluding the obligation to dispose of SNF, associated with Zion Station. Pursuant to the ASA, ZionSolutions will
periodically request reimbursement from the Zion Station-related NDT funds for costs incurred related to the decommissioning efforts
at Zion Station. However, ZionSolutions is subject to certain restrictions on its ability to request reimbursement; specifically, if certain
milestones as defined in the ASA are not met, all or a portion of requested reimbursements shall be deferred until such milestones
are met. See Note 15—Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional
information regarding Zion Station Decommissioning and see Note 2—Variable Interest Entities of the Combined Notes to
Consolidated Financial Statements for a discussion of variable interest entity considerations related to ZionSolutions.
Fossil and Renewable Facilities (including Hydroelectric)
Generation has ownership interests in 12,949 MW of capacity in fossil and renewable generating facilities currently in service
(excluding Quail Run, which was sold on January 21, 2015). Generation wholly owns all of its fossil and renewable generating
stations, with the exception of: (1) jointly owned facilities that include Wyman; (2) an ownership interest through an equity method
investment in Sunnyside; and (3) certain wind project entities with minority interest owners, see Note 2—Variable Interest Entities of
the Combined Notes to Consolidated Financial Statements for additional information on these wind project entities. Generation’s
fossil and renewable generating stations are all operated by Generation, with the exception of LaPorte, Sunnyside and Wyman,
which are operated by third parties. See Note 4—Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated
Financial Statements for additional information relating to the sale of the Quail Run generating facility. In 2014 and 2013, electric
supply (in GWh) generated from owned fossil and renewable generating facilities was 13% and 15%, respectively, of Generation’s
total electric supply. The majority of this output was dispatched to support Generation’s wholesale and retail power marketing
activities. For additional information regarding Generation’s electric generating facilities, see MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Exelon Corporation, Executive Overview for additional
information on Generation Renewable Development.
13