Exelon 2015 Annual Report Download - page 151

Table of Contents
effective in December 2013 and 2014, in accordance with the MDPSC approved electric and natural gas distribution rate case orders. See Note 3
—Regulatory Matters of the Combined Notes to the Consolidated Financial Statements for further information.
This represents the change in revenue collected under approved riders to recover costs incurred for the
energy efficiency and demand response programs as well as administrative and commercial and industrial customer bad debt costs for SOS. The
riders are designed to provide full recovery, as well as a return in certain instances. The costs of these programs are included in Operating and
maintenance expense, Depreciation and amortization expense and Taxes other than income in BGE’s Consolidated Statements of Operations and
Comprehensive Income.
Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the
underlying costs, investments being recovered and other billing determinants. During the years ended December 31, 2015 and 2014, the increase
in transmission revenue was primarily due to higher Operating and maintenance expense and increased capital investment. See Operating and
Maintenance Expense below and Note 3—Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional
information.
. Other revenue, which can vary from period to period, includes miscellaneous revenue such as service application and late payment
fees.
Operating and Maintenance Expense
The changes in operating and maintenance expense for 2015 compared to 2014 and 2014 compared to 2013 consisted of the following:
Increase
(Decrease)
2015 vs. 2014
Increase
(Decrease)
2014 vs. 2013
Baseline
Labor, other benefits, contracting and materials $ 12 $ 22
Pension and non-pension postretirement benefits expense (1) 8
Storm-related costs (21) 21
Uncollectible accounts expense (49) 17
Merger integration costs 3 5
Other 22 10
(Decrease) increase in operating and maintenance expense $ (34) $ 83
(a) Storm-related costs decreased due to lack of major storms for the year ended December 31, 2015 compared to the same period in 2014.
(b) Uncollectible accounts expense decreased primarily due to improved customer behavior and favorable weather for the year ended December 31, 2015 compared to the same
period in 2014.
Conduit Lease with City of Baltimore
On September 23, 2015, the Baltimore City Board of Estimates approved an increase in rental fees for access to the Baltimore City conduit
system effective November 1, 2015, which is expected to result in an increase to operating and maintenance expense of approximately $24 million
in 2016 subject to an annual increase based on the Consumer Price Index. On October 16, 2015, BGE filed a lawsuit against the City in the Circuit
Court for Baltimore City to protect its customers from any improper use by the City of the conduit fee revenues and to place constraints on the
City’s ability to set the conduit fee in the future.
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(a)
(b)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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