Exelon 2015 Annual Report Download - page 270

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The PAPUC issued its Phase II EE&C implementation order on August 2, 2012, that provided energy consumption reduction requirements
for the second phase of Act 129’s EE&C program, which went into effect on June 1, 2013. Pursuant to the Phase II implementation order, PECO
filed its three-year EE&C Phase II Plan with the PAPUC on November 1, 2012. The plan set forth how PECO would reduce electric consumption
by at least 1,125,852 MWh in its service territory for the period June 1, 2013 through May 31, 2016, adjusted for weather and extraordinary loads.
The implementation order permitted PECO to apply any excess savings achieved during Phase I against its Phase II consumption reduction
targets, with no reduction to its Phase II budget. In accordance with the Act 129 Phase II implementation order, at least 10% and 4.5% of the total
consumption reductions had to be through programs directed toward PECO’s public and low income sectors, respectively. If PECO failed to
achieve the required reductions in consumption, it would have been subject to civil penalties of up to $20 million, which would not be recoverable
from ratepayers. Act 129 mandates that the total cost of the plan may not exceed 2% of the electric company’s total annual revenue as of
December 31, 2006.
On March 15, 2013 and February 28, 2014, PECO filed Petitions for Approval to amend its EE&C Phase II Plan to continue its DLC demand
reduction program for mass market customers through May 31, 2014 and May 31, 2016, respectively. PECO proposed to fund the estimated $10
million annual costs of the plan by modifying incentive levels for other Phase II programs. The costs of the DLC program will be recovered through
PECO’s Energy Efficiency Plan surcharge along with other Phase II Plan costs. The PAPUC granted PECO’s Petitions on May 5, 2013 and
April 23, 2014, respectively.
The PAPUC issued its Phase III EE&C implementation order on June 19, 2015, that provides energy consumption reduction requirements for
the third phase of Act 129’s EE&C program with a five-year term from June 1, 2016 through May 31, 2021. The order tentatively established
PECO’s five-year cumulative consumption reduction target at 2,080,553 MWh.
Pursuant to the Phase III implementation order, PECO filed its five-year EE&C Phase III Plan with the PAPUC on November 30, 2015. The
Plan sets forth how PECO will reduce electric consumption by at least 1,962,659 MWh, with a goal of 2,100,875 MWh in its service territory for the
period June 1, 2016 through May 31, 2021. PECO expects a final decision from the PAPUC on PECO’s EE&C Phase III Plan during the first
quarter of 2016.
Alternative Energy Portfolio Standards (Exelon and PECO). In November 2004, Pennsylvania adopted the AEPS Act. The AEPS Act
mandated that beginning in 2011, following the expiration of PECO’s rate cap transition period, certain percentages of electric energy sold to
Pennsylvania retail electric customers shall be generated from certain alternative energy resources as measured in AECs. The requirement for
electric energy that must come from Tier I alternative energy resources ranges from approximately 3.5% to 8%, and the requirement for Tier II
alternative energy resources ranges from 6.2% to 10%. The required compliance percentages incrementally increase each annual compliance
period, which is from June 1 through May 31, until May 31, 2021. These Tier I and Tier II alternative energy resources include acceptable energy
sources as set forth in Act 129 and the AEPS Act.
PECO continues to procure alternative energy credits through full requirements contracts and its existing long-term solar contracts to meet
the annual AEPS compliance requirements. All AEPS compliance costs are being recovered on a full and current basis from default service
customers through the GSA.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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