Exelon 2015 Annual Report Download - page 149

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Revenue net of purchased power and fuel expense as a result of the December 2013 and 2014 electric and gas distribution rate orders issued by
the MDPSC offset by increases in Operating and maintenance expense and Depreciation expense.
Operating Revenue Net of Purchased Power and Fuel Expense
There are certain drivers to Operating revenue that are offset by their impact on Purchased power and fuel expense, such as commodity
procurement costs and programs allowing customers to select a competitive electric or natural gas supplier. Electric and gas revenue and
Purchased power and fuel expense are affected by fluctuations in commodity procurement costs. BGE’s electric and natural gas rates charged to
customers are subject to periodic adjustments that are designed to recover or refund the difference between the actual cost of purchased electric
power and purchased natural gas and the amount included in rates in accordance with the MDPSC’s market-based SOS and gas commodity
programs, respectively.
BGE is obligated to provide market-based SOS to all of its electric customers. The SOS rates charged recover BGE’s wholesale power
supply costs and include an administrative fee. The administrative fee includes a shareholder return component, which for residential SOS
customers is being returned to residential distribution customers through December 31, 2016, and an incremental cost component. Bidding to
supply BGE’s market-based SOS occurs through a competitive bidding process approved by the MDPSC. Successful bidders, which may include
Generation, will execute contracts with BGE for terms of three months or two years. BGE is obligated by the MDPSC to provide several variations
of SOS to commercial and industrial customers depending on customer load. Charges incurred for electric supply procured through contracts with
Generation are included in Purchased power from affiliates on BGE’s Statement of Operations and Comprehensive Income.
The number of customers electing to select a competitive electric generation supplier affects electric SOS revenue and purchased power
expense. The number of customers electing to select a competitive natural gas supplier affects gas cost adjustment revenue and purchased
natural gas expense. All BGE customers have the choice to purchase energy from a competitive electric generation supplier and/or natural gas
from a competitive natural gas supplier. This customer choice of electric generation suppliers does not impact the volume of deliveries, but affects
revenue collected from customers related to SOS.
Retail deliveries purchased from competitive electric generation and natural gas suppliers (as a percentage of kWh and mmcf sales,
respectively) at December 31, 2015, 2014 and 2013 consisted of the following:
For the Years Ended December 31,
2015 2014 2013
Electric 61% 60% 61%
Natural Gas 56% 53% 54%
Retail customers purchasing electric generation and natural gas from competitive electric generation and natural gas suppliers at
December 31, 2015, 2014 and 2013 consisted of the following:
December 31, 2015 December 31, 2014 December 31, 2013
Number of
Customers
% of total retail
customers
Number of
Customers
% of total retail
customers
Number of
Customers
% of total retail
customers
Electric 343,000 27% 364,000 29% 399,000 32%
Natural Gas 154,000 23% 161,000 25% 172,000 26%
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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