Exelon 2015 Annual Report Download - page 272

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
weather resistant and less vulnerable to damage. The DSIC will allow PECO the opportunity to recover the costs, subject to certain criteria,
incurred to repair, improve or replace its electric distribution property between rate cases. On October 22, 2015, the PAPUC entered its Opinion
and Order approving PECO’s proposed petition for its electric LTIIP and DSIC.
Maryland Regulatory Matters
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 electric and gas base rates are expected to take effect in June 2016. BGE
is also proposing to recover an annual increase of approximately $30 million for Baltimore City conduit lease fees through a surcharge. BGE
cannot predict how much of the requested increase the MDPSC will approve or if it will approve BGE’s request for a conduit fee surcharge.
2014 Maryland Electric and Gas Distribution Rate Case (Exelon and BGE). On July 2, 2014, and as amended on September 15, 2014,
BGE filed for electric and gas base increases with the MDPSC, ultimately requesting increases of $99 million and $68 million, respectively.
On October 17, 2014, BGE filed with the MDPSC a unanimous settlement agreement (the Settlement Agreement) reached with all parties to
the case under which it would receive an increase of $22 million in electric base rates and an increase of $38 million in gas base rates. The
Settlement Agreement establishes new depreciation rates which have the effect of decreasing annual depreciation expense by approximately $20
million, primarily for electric. On December 4, 2014, the Public Utility Law Judge issued a proposed order approving the Settlement Agreement
without modification, which became a final order on December 12, 2014. The approved distribution rate order authorizing BGE to increase electric
and gas distribution rates became effective for services rendered on or after December 15, 2014.
2013 Maryland Electric and Gas Distribution Rate Case (Exelon and BGE). On May 17, 2013, and as amended on August 23, 2013, BGE
filed for electric and gas base increases with the MDPSC, ultimately requesting increases of $83 million and $24 million, respectively. In addition
to these requested rate increases, BGE’s application includes a request for recovery of incremental capital expenditures and operating costs
associated with BGE’s proposed short-term reliability improvement plan (the “ERI initiative”) in response to a MDPSC order through a surcharge
separate from base rates.
On December 13, 2013, the MDPSC issued an order in BGE’s 2013 electric and natural gas distribution rate case for increases in annual
distribution service revenue of $34 million and $12 million, respectively, and an allowed return on equity of 9.75% and 9.60%, respectively. Rates
became effective for services rendered on or after December 13, 2013. The MDPSC also authorized BGE to recover through a surcharge
mechanism costs associated with five ERI initiative programs designed to accelerate electric reliability improvements premised upon the condition
that the MDPSC approve specific projects in advance of cost recovery. On March 31, 2014, after reviewing comments filed by the parties and
conducting a hearing on the matter, the MDPSC approved all but one project proposed for completion in 2014 as part of the ERI initiative. The ERI
initiative surcharge became effective June 1, 2014. On November 2, 2015, BGE filed a surcharge update including a true-up of cost estimates
included in the 2015 surcharge, along with its work plan and cost estimates for 2016, to be included in the 2016 surcharge. The MDPSC
subsequently approved BGE’s 2016 work plan and the 2016 surcharge.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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