Exelon 2015 Annual Report Download - page 104

Table of Contents
programs to reduce energy waste and increase customer savings, (3) further integrate clean renewable energy onto the power system, and
(4) introduce a new demand-based rate design for residential customers that would allow for a more equitable sharing of smart grid costs among
customers. The legislation also provides for additional funding for customer assistance programs for low-income customers. The proposed
legislation is pending and ComEd continues to work with stakeholders.
Distribution Formula Rate Update Filing (Exelon and ComEd). On April 15, 2015, ComEd filed its annual distribution formula rate to
request a total decrease to the revenue requirement of $50 million. On December 9, 2015, the ICC issued its final order which decreased the
revenue requirement by $67 million, reflecting an increase of $85 million for the initial revenue requirement for 2015 and a decrease of $152 million
related to the annual reconciliation for 2014. The rates took effect in January 2016. Intervenors requested a rehearing on specific issues. See Note
3—Regulatory Matters of the Combined Notes to Consolidated Financial Statements for further information related to distribution formula updates.
2015 Pennsylvania Electric Distribution Rate Case (Exelon and PECO). On March 27, 2015, PECO filed a petition with the PAPUC
requesting an increase of $190 million to its annual service revenues for electric delivery, which requested an ROE of 10.95%. On September 10,
2015, PECO and interested parties filed with the PAPUC a petition for joint settlement for an increase of $127 million in annual distribution service
revenue. No overall ROE was specified in the settlement. On December 17, 2015, the PAPUC approved the settlement of PECO’s electric
distribution rate case. The approved electric delivery rates became effective on January 1, 2016.
The settlement includes approval of the In-Program Arrearage Forgiveness (“IPAF”) Program, which provides for forgiveness of a portion of
the eligible arrearage balance of its low-income Customer Assistance Program (CAP) accounts receivable that will be determined as of program
inception in October 2016. The forgiveness will be granted to the extent CAP customers remain current with payments. The Settlement guarantees
PECO’s recovery of two-thirds of the arrearage balance through a combination of customer payments and rate recovery, including through future
rates cases if necessary. The remaining one-third of the arrearage balance will be absorbed by PECO, of which a portion has already been
expensed as bad debt for CAP customer’s accounts receivable balances.
Although the actual arrearage balance is not defined until program inception, PECO believes that it can reasonably estimate certain CAP
customer accounts receivable balances as of December 31, 2015 that will remain outstanding at program inception. Management determined its
best estimate based on historical collectability information. As a result, a regulatory asset of $7 million, representing the previously incurred bad
debt expense associated with the estimated eligible accounts receivable balances, was recorded on Exelon’s and PECO’s Consolidated Balance
Sheets as of December 31, 2015. This estimate will be revisited on a quarterly basis through program inception.
PECO Gas Main Extension Program (Exelon and PECO). On November 6, 2014, PECO filed a plan with the PAPUC requesting approval
of three initiatives to provide more incentives to customers interested in switching to natural gas service. On October 1, 2015, the PAPUC
approved the PECO Gas Main Extension Program, without modification. This approval allows local customers to pay significantly less initially to
have natural gas installed at their homes and businesses.
2015 Maryland Electric and Gas Distribution Rate Case (Exelon and BGE). On November 6, 2015, and as amended on January 5, 2016,
BGE filed for electric and gas base rate increases with the MDPSC, ultimately requesting an increase of $121 million and $79 million, respectively,
of which $103 million and $37 million, respectively, is related to recovery of smart grid initiative costs. BGE requested a ROE for the electric and
gas distribution rate case of 10.6% and 10.5%, respectively. The new
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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