Exelon 2014 Annual Report Download - page 267

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
(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.
(b) Surety bonds—Guarantees issued related to contract and commercial agreements, excluding bid bonds.
(c) Performance guarantees—Guarantees issued to ensure performance under specific contracts. Additionally includes $200 million of Trust Preferred Securities of
ComEd Financing III, $178 million of Trust Preferred Securities of PECO Trust III and IV and $250 million of Trust Preferred Securities of BGE Capital Trust II.
(d) Energy marketing contract guarantees—Guarantees issued to ensure performance under energy commodity contracts. Amount includes approximately $3.2 billion of
guarantees previously issued by Constellation on behalf of its Generation and NewEnergy business to allow it the flexibility needed to conduct business with
counterparties without having to post other forms of collateral. The majority of these guarantees contain evergreen provisions that require the guarantee to remain in
effect until cancelled. Exelon’s estimated net exposure for obligations under commercial transactions covered by these guarantees is approximately $0.6 billion at
December 31, 2014, which represents the total amount Exelon could be required to fund based on December 31, 2014 market prices.
(e) Lease guarantees—Guarantees issued to ensure payments on building leases.
(f) Nuclear insurance premiums—Represents the maximum amount that Generation would be required to pay for retrospective premiums in the event of nuclear disaster
at any domestic site under the Secondary Financial Protection pool as required under the Price-Anderson Act as well as the current aggregate annual retrospective
premium obligation that could be imposed by NEIL. See the Nuclear Insurance section within this note for additional details on Generation’s nuclear insurance
premiums.
(g) Represents the underwriters discount for Exelon’s forward equity transaction. See Note 19—Common Stock for further details of the equity securities offering.
Construction Commitments
Generation’s ongoing investments in renewables development and new natural gas construction illustrates Generation’s growth
strategy to provide for diversification opportunities while leveraging its expertise and strengths.
Generation completed the construction of the Antelope Valley solar PV facility in Los Angeles County, California, which became fully
operational in the first half of 2014. Generation has no further remaining construction commitments for the project.
On July 3, 2013, Generation executed a turbine supply agreement to expand its Beebe wind project in Michigan. The remaining
commitment is approximately $2 million under the contract and achievement of commercial operations was attained 2014.
On July 26, 2013, Generation executed an engineering procurement and construction contract to expand its Perryman, Maryland
generation site with at least 120MW of new natural gas-fired generation. The remaining commitment is approximately $39 million
under the contract and achievement of commercial operation is expected in 2015. This project will satisfy a portion of Exelon’s
commitment to Maryland. See Note 4—Mergers, Acquisitions, and Dispositions for additional information on commitments to develop
or assist in development of new generation in Maryland resulting from the Constellation merger.
On December 27, 2013, Generated executed a turbine supply agreement for construction of the 40MW Fourmile Wind project in
western Maryland. The remaining commitment is approximately $2 million under the contract and achievement of commercial
operations was attained in 2014. This project will satisfy a portion of Exelon’s 125 MW Tier I land-based renewables commitment
made to Maryland. See Note 4—Mergers, Acquisitions, and Dispositions for additional information on commitments to develop or
assist in development of new generation in Maryland resulting from the Constellation merger.
During the third and fourth quarter of 2014, Generation executed contracts associated with the construction of new combined-cycle
gas turbine units in Texas. The remaining commitment is approximately $1.0 billion under these contracts and achievement of
commercial operations is expected in 2017.
During the fourth quarter of 2014 Generation executed contracts associated with the construction of the 30 MW Fair Wind project in
western Maryland. The remaining commitment is approximately $19 million under these contracts and achievement of commercial
operations is expected in 2015. This project will satisfy a portion of Exelon’s 125 MW Tier I land-based renewables commitment
made to Maryland. See Note 4—Mergers, Acquisitions, and Dispositions for additional information on commitments to develop or
assist in development of new generation in Maryland resulting from the Constellation merger.
During the fourth quarter of 2014 Generation executed contracts associated with the construction of the 78 MW Sendero Wind
project in southern Texas. The remaining commitment is approximately $56 million under these contracts and achievement of
commercial operations is expected in 2015.
Refer to Note 3—Regulatory Matters for information on investment programs associated with regulatory mandates, such as
ComEd’s Infrastructure Investment Plan under EIMA, PECO’s Smart Meter Procurement and Installation Plan, and BGE’s
comprehensive smart grid initiative.
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