Exelon 2014 Annual Report Download - page 264

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Under the settlement agreement, Generation has received cumulative cash reimbursements for costs incurred as follows:
Total
Net
(a)
Cumulative cash reimbursements (b) .................................................................... $836 $702
(a) Total after considering amounts due to co-owners of certain nuclear stations and to the former owner of Oyster Creek.
(b) Includes $33 million and $30 million, respectively, for amounts received since April 1, 2014, for costs incurred under the CENG DOE Settlement Agreements prior to
the consolidation of CENG.
As of December 31, 2014, and 2013, the amount of SNF storage costs for which reimbursement has been or will be requested from
the DOE under the DOE settlement agreements is as follows:
December 31, 2014 December 31, 2013
DOE receivable—current (a) ..................................................... $82 $ 71
DOE receivable—noncurrent (b) .................................................. 7 —
Amounts owed to co-owners (a)(c) ................................................. (5) (18)
(a) Recorded in Accounts receivable, other.
(b) Recorded in Deferred debits and other assets, other
(c) Non-CENG amounts owed to co-owners are recorded in Accounts receivable, other. CENG amounts owed to co-owners are recorded in Accounts payable.
Represents amounts owed to the co-owners of Peach Bottom, Quad Cities, and Nine Mile Point Unit 2 generating facilities.
The Standard Contracts with the DOE also required the payment to the DOE of a one-time fee applicable to nuclear generation
through April 6, 1983. The fee related to the former PECO units has been paid. Pursuant to the Standard Contracts, ComEd
previously elected to defer payment of the one-time fee of $277 million for its units (which are now part of Generation), with interest
to the date of payment, until just prior to the first delivery of SNF to the DOE. As of December 31, 2014, the unfunded SNF liability
for the one-time fee with interest was $1,021 million. Interest accrues at the 13-week Treasury Rate. The 13-week Treasury Rate in
effect, for calculation of the interest accrual at December 31, 2014, was 0.020%. The liabilities for SNF disposal costs, including the
one-time fee, were transferred to Generation as part of Exelon’s 2001 corporate restructuring. The outstanding one-time fee
obligations for the Nine Mile Point, Ginna, Oyster Creek and TMI units remain with the former owners. The Clinton and Calvert Cliffs
units have no outstanding obligation. See Note 11—Fair Value of Financial Assets and Liabilities for additional information.
Energy Commitments
Generation’s customer facing activities include the physical delivery and marketing of power obtained through its generation
capacity, and long-, intermediate- and short-term contracts. Generation maintains an effective supply strategy through ownership of
generation assets and power purchase and lease agreements. Generation has also contracted for access to additional generation
through bilateral long-term PPAs. These agreements are firm commitments related to power generation of specific generation plants
and/or are dispatchable in nature. Several of Generation’s long-term PPAs, which have been determined to be operating leases,
have significant contingent rental payments that are dependent on the future operating characteristics of the associated plants, such
as plant availability. Generation recognizes contingent rental expense when it becomes probable of payment. Generation enters into
PPAs with the objective of obtaining low-cost energy supply sources to meet its physical delivery obligations to its customers.
Generation has also purchased firm transmission rights to ensure that it has reliable transmission capacity to physically move its
power supplies to meet customer delivery needs. The primary intent and business objective for the use of its capital assets and
contracts is to provide Generation with physical power supply to enable it to deliver energy to meet customer needs. In addition to
physical contracts, Generation uses financial contracts for economic hedging purposes and, to a lesser extent, as part of proprietary
trading activities.
Generation has entered into bilateral long-term contractual obligations for sales of energy to load-serving entities, including electric
utilities, municipalities, electric cooperatives and retail load aggregators. Generation also enters into contractual obligations to deliver
energy to market participants who primarily focus on the resale of energy products for delivery. Generation provides for delivery of its
energy to these customers through firm transmission.
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