Exelon 2015 Annual Report Download - page 364

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The following table provides a rollforward of the nuclear decommissioning ARO reflected on Exelon’s and Generation’s Consolidated Balance
Sheets, from January 1, 2014 to December 31, 2015:
Exelon and
Generation
Nuclear decommissioning ARO at January 1, 2014 $ 4,855
Consolidation of CENG 1,760
Accretion expense 334
Net increase due to changes in, and timing of, estimated future cash flows 19
Costs incurred to decommission retired plants (7)
Nuclear decommissioning ARO at December 31, 2014 6,961
Accretion expense 387
Net increase due to changes in, and timing of, estimated future cash flows 901
Costs incurred to decommission retired plants (3)
Nuclear decommissioning ARO at December 31, 2015 $ 8,246
(a) Represents the fair value of the CENG ARO liability as of April 1, 2014, the date of consolidation. See Note 5—Investment in Constellation Energy Nuclear Group, LLC for
additional information.
(b) Includes $7 million and $8 million as the current portion of the ARO at December 31, 2015 and 2014, respectively, which is included in Other current liabilities on Exelon’s and
Generation’s Consolidated Balance Sheets.
During 2015, Generation’s total nuclear ARO increased by approximately $1.3 billion, reflecting impacts of ARO updates completed during
2015 to reflect changes in amounts and timing of estimated decommissioning cash flows and impacts of year-to-date accretion of the ARO liability
due to the passage of time.
The increase in the ARO during 2015 was primarily driven by an increase of approximately $630 million for costs expected to be incurred for
required site security during the decommissioning periods in which SNF remains on-site and until major reactor components and buildings have
been dismantled and removed. This projected increase is based on emerging industry experience at nuclear sites in the planning or early stage of
decommissioning indicating greater than originally expected numbers of security personnel required to be on site during these decommissioning
periods. Generation will continue to monitor emerging security cost trends, including potential strategies to limit such costs by, for example,
optimizing the transfer of SNF when DOE starts taking possession of SNF or increasing the use of dry SNF storage, and will adjust the ARO
liability accordingly. The 2015 increase in the ARO includes an increase of approximately $285 million for the impacts of a change implemented in
the 2015 annual assessment of Generation’s SNF storage and disposal cost estimation methodology to better align the projected timing of SNF
transfers to the DOE with assumed plant shutdown dates as well as higher assumed probabilities of early retirements of certain economically
challenged nuclear plants (See Note 9—Implications of Potential Early Plant Retirements for additional information) and further accretion of the
obligation. These increases were partially offset by reductions in estimated cost escalation rates, primarily for labor and energy costs.
The financial statement impact related to the increase in the ARO due to the changes in, and timing of, estimated cash flows primarily
resulted in a corresponding increase in Property, plant and equipment on Exelon’s and Generation’s Consolidated Balance Sheets. Approximately
$8 million of the 2015 adjustment resulted in a credit to income, which is included in Operating and maintenance expense within Exelon’s and
Generation’s Consolidated Statements of Operations and Comprehensive Income.
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(a)
(b)
(b)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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