0001628280-19-001107.txt : 20190208 0001628280-19-001107.hdr.sgml : 20190208 20190208151150 ACCESSION NUMBER: 0001628280-19-001107 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 334 CONFORMED PERIOD OF REPORT: 20181231 FILED AS OF DATE: 20190208 DATE AS OF CHANGE: 20190208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXELON Corp CENTRAL INDEX KEY: 0001109357 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 232990190 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16169 FILM NUMBER: 19579499 BUSINESS ADDRESS: STREET 1: PO BOX 805398 CITY: CHICAGO STATE: IL ZIP: 60680-5398 BUSINESS PHONE: 3123947399 MAIL ADDRESS: STREET 1: PO BOX 805398 CITY: CHICAGO STATE: IL ZIP: 60680-5398 FORMER COMPANY: FORMER CONFORMED NAME: EXELON CORP DATE OF NAME CHANGE: 20000315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CO CENTRAL INDEX KEY: 0000078100 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 230970240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16844 FILM NUMBER: 19579505 BUSINESS ADDRESS: STREET 1: 2301 MARKET ST STREET 2: P O BOX 8699 CITY: PHILADELPHIA STATE: PA ZIP: 19101 BUSINESS PHONE: 2158414000 FORMER COMPANY: FORMER CONFORMED NAME: PHILADELPHIA ELECTRIC CO DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POTOMAC ELECTRIC POWER CO CENTRAL INDEX KEY: 0000079732 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 530127880 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01072 FILM NUMBER: 19579502 BUSINESS ADDRESS: STREET 1: 701 NINTH STREET, NW STREET 2: OFFICE OF CORPORATE SECY., ROOM 1300 CITY: WASHINGTON STATE: DC ZIP: 20068 BUSINESS PHONE: 2028722000 MAIL ADDRESS: STREET 1: 701 NINTH STREET, NW STREET 2: OFFICE OF CORPORATE SECY., ROOM 1300 CITY: WASHINGTON STATE: DC ZIP: 20068 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELMARVA POWER & LIGHT CO /DE/ CENTRAL INDEX KEY: 0000027879 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 510084283 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01405 FILM NUMBER: 19579501 BUSINESS ADDRESS: STREET 1: 800 KING ST STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 3024293114 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMONWEALTH EDISON CO CENTRAL INDEX KEY: 0000022606 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 360938600 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01839 FILM NUMBER: 19579506 BUSINESS ADDRESS: STREET 1: ONE FIRST NATIONAL PLZ 37TH FL STREET 2: P O BOX 767 CITY: CHICAGO STATE: IL ZIP: 60690 BUSINESS PHONE: 3123944321 MAIL ADDRESS: STREET 1: 10 SOUTH DEARBORN STREET STREET 2: 37TH FLOOR CITY: CHICAGO STATE: IL ZIP: 606900767 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALTIMORE GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000009466 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 520280210 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01910 FILM NUMBER: 19579504 BUSINESS ADDRESS: STREET 1: 2 CENTER PLAZA STREET 2: 110 W. FAYETTE STREET CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4104702800 MAIL ADDRESS: STREET 1: 2 CENTER PLAZA STREET 2: 110 W. FAYETTE STREET CITY: BALTIMORE STATE: MD ZIP: 21201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC CITY ELECTRIC CO CENTRAL INDEX KEY: 0000008192 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 210398280 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03559 FILM NUMBER: 19579500 BUSINESS ADDRESS: STREET 1: 800 KING STREET STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 6096454100 MAIL ADDRESS: STREET 1: 800 KING STREET STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEPCO HOLDINGS LLC CENTRAL INDEX KEY: 0001135971 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 522297449 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31403 FILM NUMBER: 19579503 BUSINESS ADDRESS: STREET 1: SUITE 1300 STREET 2: 701 NINTH STREET, NW CITY: WASHINGTON STATE: DC ZIP: 20068 BUSINESS PHONE: 202-872-2000 MAIL ADDRESS: STREET 1: SUITE 1300 STREET 2: 701 NINTH STREET, NW CITY: WASHINGTON STATE: DC ZIP: 20068 FORMER COMPANY: FORMER CONFORMED NAME: PEPCO HOLDINGS INC DATE OF NAME CHANGE: 20020212 FORMER COMPANY: FORMER CONFORMED NAME: NEW RC INC DATE OF NAME CHANGE: 20010302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXELON GENERATION CO LLC CENTRAL INDEX KEY: 0001168165 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 233064219 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-85496 FILM NUMBER: 19579507 MAIL ADDRESS: STREET 1: 10 S DEARBORN STREET STREET 2: 37TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60690 10-K 1 exc-20181231x10k.htm FORM 10-K Document
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
  FORM 10-K
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2018
 or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number
 
Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number
 
IRS Employer Identification Number
 
 
 
 
 
1-16169
 
EXELON CORPORATION
 
23-2990190
 
 
(a Pennsylvania corporation)
10 South Dearborn Street
P.O. Box 805379
Chicago, Illinois 60680-5379
(800) 483-3220
 
 
 
 
 
 
 
333-85496
 
EXELON GENERATION COMPANY, LLC
 
23-3064219
 
 
(a Pennsylvania limited liability company)
300 Exelon Way
Kennett Square, Pennsylvania 19348-2473
(610) 765-5959
 
 
 
 
 
 
 
1-1839
 
COMMONWEALTH EDISON COMPANY
 
36-0938600
 
 
(an Illinois corporation)
440 South LaSalle Street
Chicago, Illinois 60605-1028
(312) 394-4321
 
 
 
 
 
 
 
000-16844
 
PECO ENERGY COMPANY
 
23-0970240
 
 
(a Pennsylvania corporation)
P.O. Box 8699
2301 Market Street
Philadelphia, Pennsylvania 19101-8699
(215) 841-4000
 
 
 
 
 
 
 
1-1910
 
BALTIMORE GAS AND ELECTRIC COMPANY
 
52-0280210
 
 
(a Maryland corporation)
2 Center Plaza
110 West Fayette Street
Baltimore, Maryland 21201-3708
(410) 234-5000
 
 
 
 
 
 
 
001-31403
 
PEPCO HOLDINGS LLC
 
52-2297449
 
 
(a Delaware limited liability company)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
 
 
 
 
 
 
 
001-01072
 
POTOMAC ELECTRIC POWER COMPANY
 
53-0127880
 
 
(a District of Columbia and Virginia corporation)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
 
 
 
 
 
 
 
001-01405
 
DELMARVA POWER & LIGHT COMPANY
 
51-0084283
 
 
(a Delaware and Virginia corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000
 
 
 
 
 
 
 
001-03559
 
ATLANTIC CITY ELECTRIC COMPANY
 
21-0398280
 
 
(a New Jersey corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000
 
 



Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
  
Name of Each Exchange on Which Registered
EXELON CORPORATION:
  
 
Common Stock, without par value
  
New York and Chicago
Series A Junior Subordinated Debentures
  
New York
Corporate Units
 
New York
PECO ENERGY COMPANY:
  
 
Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and unconditionally guaranteed by PECO Energy Company
  
New York
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
COMMONWEALTH EDISON COMPANY:
Common Stock Purchase Warrants, 1971 Warrants and Series B Warrants
POTOMAC ELECTRIC POWER COMPANY:
Common Stock, $0.01 par value
DELMARVA POWER & LIGHT COMPANY:
Common Stock, $2.25 par value
ATLANTIC CITY ELECTRIC COMPANY:
Common Stock, $3.00 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Exelon Corporation
Yes   x
  
No   o
Exelon Generation Company, LLC
Yes   x
  
No   o
Commonwealth Edison Company
Yes   x
  
No   o
PECO Energy Company
Yes   x
  
No   o
Baltimore Gas and Electric Company
Yes   x
  
No   o
Pepco Holdings LLC
Yes   x
 
No   o
Potomac Electric Power Company
Yes   o
 
No   x
Delmarva Power & Light Company
Yes   o
 
No   x
Atlantic City Electric Company
Yes   o
 
No   x
     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Exelon Corporation
Yes   o
  
No   x
Exelon Generation Company, LLC
Yes   o
  
No   x
Commonwealth Edison Company
Yes   o
  
No   x
PECO Energy Company
Yes   o
  
No   x
Baltimore Gas and Electric Company
Yes   o
  
No   x
Pepco Holdings LLC
Yes   o
  
No   x
Potomac Electric Power Company
Yes   o
  
No   x
Delmarva Power & Light Company
Yes   o
  
No   x
Atlantic City Electric Company
Yes   o
  
No   x
     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨



     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý
     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer
 
Accelerated Filer
 
Non-accelerated Filer
 
Smaller Reporting Company
 
Emerging Growth Company
Exelon Corporation
x
 
 
 
 
 
 
 
 
Exelon Generation Company, LLC
 
 
 
 
x
 
 
 
 
Commonwealth Edison Company
 
 
 
 
x
 
 
 
 
PECO Energy Company
 
 
 
 
x
 
 
 
 
Baltimore Gas and Electric Company
 
 
 
 
x
 
 
 
 
Pepco Holdings LLC
 
 
 
 
x
 
 
 
 
Potomac Electric Power Company
 
 
 
 
x
 
 
 
 
Delmarva Power & Light Company
 
 
 
 
x
 
 
 
 
Atlantic City Electric Company
 
 
 
 
x
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o  No  x
The estimated aggregate market value of the voting and non-voting common equity held by nonaffiliates of each registrant as of June 30, 2018 was as follows:
Exelon Corporation Common Stock, without par value
  
$41,118,095,431
Exelon Generation Company, LLC
  
Not applicable
Commonwealth Edison Company Common Stock, $12.50 par value
  
No established market
PECO Energy Company Common Stock, without par value
  
None
Baltimore Gas and Electric Company, without par value
  
None
Pepco Holdings LLC
 
Not applicable
Potomac Electric Power Company
 
None
Delmarva Power & Light Company
 
None
Atlantic City Electric Company
 
None
     The number of shares outstanding of each registrant’s common stock as of January 31, 2019 was as follows:
Exelon Corporation Common Stock, without par value
  
969,745,933
Exelon Generation Company, LLC
  
Not applicable
Commonwealth Edison Company Common Stock, $12.50 par value
  
127,021,331
PECO Energy Company Common Stock, without par value
  
170,478,507
Baltimore Gas and Electric Company Common Stock, without par value
  
1,000
Pepco Holdings LLC
 
Not applicable
Potomac Electric Power Company Common Stock, $0.01 par value
 
100
Delmarva Power & Light Company Common Stock, $2.25 par value
 
1,000
Atlantic City Electric Company Common Stock, $3.00 par value
 
8,546,017
Documents Incorporated by Reference
Portions of the Exelon Proxy Statement for the 2019 Annual Meeting of
Shareholders and the Commonwealth Edison Company 2019 Information Statement are
incorporated by reference in Part III.

     Exelon Generation Company, LLC, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company and Atlantic City Electric Company meet the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and are therefore filing this Form in the reduced disclosure format.



TABLE OF CONTENTS
 
Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS
FILING FORMAT
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
WHERE TO FIND MORE INFORMATION
 
 
 
PART I
 
 
ITEM 1.
BUSINESS
 
General
 
Exelon Generation Company, LLC
 
Utility Operations
 
Employees
 
Environmental Regulation
 
Executive Officers of the Registrants
ITEM 1A.
RISK FACTORS
ITEM 1B.
UNRESOLVED STAFF COMMENTS
ITEM 2.
PROPERTIES
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company
ITEM 3.
LEGAL PROCEEDINGS
ITEM 4.
MINE SAFETY DISCLOSURES
PART II
 
 
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6.
SELECTED FINANCIAL DATA
 
Exelon Corporation
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Pepco Holdings LLC
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company



 
Page No.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Exelon Corporation
 
Executive Overview
 
Financial Results of Operations
 
Significant 2018 Transactions and Recent Developments
 
Exelon's Strategy and Outlook for 2019 and Beyond
 
Liquidity Considerations
 
Other Key Business Drivers and Management Strategies
 
Critical Accounting Policies and Estimates
 
Results of Operations
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Pepco Holdings LLC
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company
 
Liquidity and Capital Resources
 
Contractual Obligations and Off-Balance Sheet Arrangements
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Exelon Corporation
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Pepco Holdings LLC
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company



 
Page No.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Exelon Corporation
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Pepco Holdings LLC
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company
 
Combined Notes to Consolidated Financial Statements
 
1. Significant Accounting Policies
 
2. Variable Interest Entities
 
3. Revenue from Contracts with Customers
 
4. Regulatory Matters
 
5. Mergers, Acquisitions and Dispositions
 
6. Property, Plant and Equipment
 
7. Impairment of Long-Lived Assets and Intangibles
 
8. Early Plant Retirements
 
9. Jointly Owned Electric Utility Plant
 
10. Intangible Assets
 
11. Fair Value of Financial Assets and Liabilities
 
12. Derivative Financial Instruments
 
13. Debt and Credit Agreements
 
14. Income Taxes
 
15. Asset Retirement Obligations
 
16. Retirement Benefits
 
17. Severance
 
18. Shareholders' Equity
 
19. Stock-Based Compensation Plans
 
20. Earnings Per Share
 
21. Changes in Accumulated Other Comprehensive Income
 
22. Commitments and Contingencies
 
23. Supplemental Financial Information
 
24. Segment Information
 
25. Related Party Transactions
 
26. Quarterly Data
 
27. Subsequent Events
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES
ITEM 9B.
OTHER INFORMATION



 
Page No.
PART III
 
 
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE COMPENSATION
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
 
 
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 16.
FORM 10-K SUMMARY
 
Exelon Corporation
 
Exelon Generation Company, LLC
 
Commonwealth Edison Company
 
PECO Energy Company
 
Baltimore Gas and Electric Company
 
Pepco Holdings LLC
 
Potomac Electric Power Company
 
Delmarva Power & Light Company
 
Atlantic City Electric Company




GLOSSARY OF TERMS AND ABBREVIATIONS
Exelon Corporation and Related Entities
Exelon
 
Exelon Corporation
Generation
 
Exelon Generation Company, LLC
ComEd
 
Commonwealth Edison Company
PECO
 
PECO Energy Company
BGE
 
Baltimore Gas and Electric Company
Pepco Holdings or PHI
  
Pepco Holdings LLC (formerly Pepco Holdings, Inc.)
Pepco
  
Potomac Electric Power Company
DPL
  
Delmarva Power & Light Company
ACE
  
Atlantic City Electric Company
Registrants
 
Exelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, collectively
Utility Registrants
 
ComEd, PECO, BGE, Pepco, DPL and ACE, collectively
Legacy PHI
 
PHI, Pepco, DPL, ACE, PES and PCI collectively
ACE Funding or ATF
  
Atlantic City Electric Transition Funding LLC
Antelope Valley
 
Antelope Valley Solar Ranch One
BondCo
 
RSB BondCo LLC
BSC
 
Exelon Business Services Company, LLC
CENG
 
Constellation Energy Nuclear Group, LLC
Constellation
 
Constellation Energy Group, Inc.
EEDC
 
Exelon Energy Delivery Company, LLC
EGR IV
 
ExGen Renewables IV, LLC
EGRP
 
ExGen Renewables Partners, LLC
EGTP
 
ExGen Texas Power, LLC
Entergy
 
Entergy Nuclear FitzPatrick, LLC
Exelon Corporate
 
Exelon in its corporate capacity as a holding company
Exelon Transmission Company
 
Exelon Transmission Company, LLC
Exelon Wind
 
Exelon Wind, LLC and Exelon Generation Acquisition Company, LLC
FitzPatrick
 
James A. FitzPatrick nuclear generating station
PCI
  
Potomac Capital Investment Corporation and its subsidiaries
PEC L.P.
 
PECO Energy Capital, L.P.
PECO Trust III
 
PECO Capital Trust III
PECO Trust IV
 
PECO Energy Capital Trust IV
Pepco Energy Services or PES
  
Pepco Energy Services, Inc. and its subsidiaries
PHI Corporate
 
PHI in its corporate capacity as a holding company
PHISCO
 
PHI Service Company
RPG
 
Renewable Power Generation
SolGen
 
SolGen, LLC
TMI
 
Three Mile Island nuclear facility
UII
 
Unicom Investments, Inc.


 

1


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
AEC
 
Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AESO
 
Alberta Electric Systems Operator
AFUDC
 
Allowance for Funds Used During Construction
AGE
 
Albany Green Energy Project
AMI
 
Advanced Metering Infrastructure
AMP
 
Advanced Metering Program
AOCI
 
Accumulated Other Comprehensive Income
ARC
 
Asset Retirement Cost
ARO
 
Asset Retirement Obligation
ARP
 
Alternative Revenue Program
ASA
 
Asset Sale Agreement
BGS
  
Basic Generation Service
CAISO
 
California ISO
CAP
 
Customer Assistance Program
CCGTs
 
Combined-Cycle gas turbines
CERCLA
 
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
CES
 
Clean Energy Standard
Clean Air Act
 
Clean Air Act of 1963, as amended
Clean Water Act
 
Federal Water Pollution Control Amendments of 1972, as amended
Conectiv
  
Conectiv, LLC, a wholly owned subsidiary of PHI and the parent of DPL and ACE during the Predecessor periods
Conectiv Energy
  
Conectiv Energy Holdings, Inc. and substantially all of its subsidiaries, which were sold to Calpine in July 2010
ConEdison Solutions
 
The competitive retail electricity and natural gas business of Consolidated Edison Solutions, Inc., a subsidiary of Consolidated Edison, Inc
CSAPR
 
Cross-State Air Pollution Rule
CTA
  
Consolidated tax adjustment
D.C. Circuit Court
 
United States Court of Appeals for the District of Columbia Circuit
DC PLUG
 
District of Columbia Power Line Undergrounding Initiative
DCPSC
  
District of Columbia Public Service Commission
DDOT
 
District Department of Transportation
DOE
 
United States Department of Energy
DOEE
 
Department of Energy & Environment
DOJ
 
United States Department of Justice
DPSC
  
Delaware Public Service Commission
DSP
 
Default Service Provider
DSP Program
 
Default Service Provider Program
EDF
 
Electricite de France SA and its subsidiaries
EIMA
 
Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EmPower
  
A Maryland demand-side management program for Pepco and DPL
EPA
 
United States Environmental Protection Agency

2


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
EPSA
 
Electric Power Supply Association
ERCOT
 
Electric Reliability Council of Texas
ERISA
 
Employee Retirement Income Security Act of 1974, as amended
EROA
 
Expected Rate of Return on Assets
FASB
 
Financial Accounting Standards Board
FEJA
 
Illinois Public Act 99-0906 or Future Energy Jobs Act
FERC
 
Federal Energy Regulatory Commission
FRCC
 
Florida Reliability Coordinating Council
GAAP
 
Generally Accepted Accounting Principles in the United States
GCR
  
Gas Cost Rate
GHG
 
Greenhouse Gas
GSA
 
Generation Supply Adjustment
GWh
 
Gigawatt hour
IBEW
 
International Brotherhood of Electrical Workers
ICC
 
Illinois Commerce Commission
ICE
 
Intercontinental Exchange
IIP
 
Infrastructure Investment Program
Illinois EPA
 
Illinois Environmental Protection Agency
Illinois Settlement Legislation
 
Legislation enacted in 2007 affecting electric utilities in Illinois
Integrys
 
Integrys Energy Services, Inc.
IPA
 
Illinois Power Agency
IRC
 
Internal Revenue Code
IRS
 
Internal Revenue Service
ISO
 
Independent System Operator
ISO-NE
 
ISO New England Inc.
ISO-NY
 
ISO New York
kV
 
Kilovolt
kW
 
Kilowatt
kWh
 
Kilowatt-hour
LIBOR
 
London Interbank Offered Rate
LLRW
 
Low-Level Radioactive Waste
LNG
 
Liquefied Natural Gas
LTIP
 
Long-Term Incentive Plan
MAPP
  
Mid-Atlantic Power Pathway
MATS
 
U.S. EPA Mercury and Air Toxics Rule
MBR
 
Market Based Rates Incentive
MDE
 
Maryland Department of the Environment
MDPSC
 
Maryland Public Service Commission
MGP
 
Manufactured Gas Plant
MISO
 
Midcontinent Independent System Operator, Inc.
mmcf
 
Million Cubic Feet
Moody’s
 
Moody’s Investor Service

3


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
MOPR
 
Minimum Offer Price Rule
MRV
 
Market-Related Value
MW
 
Megawatt
MWh
 
Megawatt hour
n.m.
 
not meaningful
NAAQS
 
National Ambient Air Quality Standards
NAV
 
Net Asset Value
NDT
 
Nuclear Decommissioning Trust
NEIL
 
Nuclear Electric Insurance Limited
NERC
 
North American Electric Reliability Corporation
NGS
 
Natural Gas Supplier
NJBPU
  
New Jersey Board of Public Utilities
NJDEP
 
New Jersey Department of Environmental Protection
NLRB
 
National Labor Relations Board
Non-Regulatory Agreements Units
 
Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NOSA
 
Nuclear Operating Services Agreement
NPDES
 
National Pollutant Discharge Elimination System
NRC
 
Nuclear Regulatory Commission
NSPS
 
New Source Performance Standards
NWPA
 
Nuclear Waste Policy Act of 1982
NYMEX
 
New York Mercantile Exchange
NYPSC
 
New York Public Service Commission
OCI
 
Other Comprehensive Income
OIESO
 
Ontario Independent Electricity System Operator
OPC
  
Office of People’s Counsel
OPEB
 
Other Postretirement Employee Benefits
PA DEP
 
Pennsylvania Department of Environmental Protection
PAPUC
 
Pennsylvania Public Utility Commission
PCB
 
Polychlorinated Biphenyl
PGC
 
Purchased Gas Cost Clause
PJM
 
PJM Interconnection, LLC
POLR
 
Provider of Last Resort
POR
 
Purchase of Receivables
PPA
 
Power Purchase Agreement
Price-Anderson Act
 
Price-Anderson Nuclear Industries Indemnity Act of 1957
Preferred Stock
  
Originally issued shares of non-voting, non-convertible and non-transferable Series A preferred stock, par value $0.01 per share
PRP
 
Potentially Responsible Parties
PSEG
 
Public Service Enterprise Group Incorporated
PV
 
Photovoltaic
RCRA
 
Resource Conservation and Recovery Act of 1976, as amended

4


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
REC
 
Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
Regulatory Agreement Units
 
Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
RES
 
Retail Electric Suppliers
RFP
 
Request for Proposal
Rider
 
Reconcilable Surcharge Recovery Mechanism
RGGI
 
Regional Greenhouse Gas Initiative
RMC
 
Risk Management Committee
RNF
 
Revenue Net of Purchased Power and Fuel Expense
ROE
  
Return on equity
RPM
 
PJM Reliability Pricing Model
RPS
 
Renewable Energy Portfolio Standards
RSSA
 
Reliability Support Services Agreement
RTEP
 
Regional Transmission Expansion Plan
RTO
 
Regional Transmission Organization
S&P
 
Standard & Poor’s Ratings Services
SEC
 
United States Securities and Exchange Commission
SERC
 
SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SGIG
 
Smart Grid Investment Grant from DOE
SILO
 
Sale-In, Lease-Out
SNF
 
Spent Nuclear Fuel
SOS
 
Standard Offer Service
SPFPA
 
Security, Police and Fire Professionals of America
SPP
 
Southwest Power Pool
TCJA
 
Tax Cuts and Jobs Act

Transition Bond Charge
  
Revenue ACE receives, and pays to ACE Funding, to fund the principal and interest payments on Transition Bonds and related taxes, expenses and fees
Transition Bonds
  
Transition Bonds issued by ACE Funding
Upstream
 
Natural gas and oil exploration and production activities
VIE
 
Variable Interest Entity
WECC
 
Western Electric Coordinating Council
ZEC
 
Zero Emission Credit
ZES
 
Zero Emission Standard

5


FILING FORMAT
This combined Annual Report on Form 10-K is being filed separately by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, including those factors discussed with respect to the Registrants discussed in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 22, Commitments and Contingencies; and (d) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.
WHERE TO FIND MORE INFORMATION
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and the Registrants’ website at www.exeloncorp.com. Information contained on the Registrants’ website shall not be deemed incorporated into, or to be a part of, this Report.


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PART I
ITEM 1.
BUSINESS
General
Corporate Structure and Business and Other Information
Exelon, incorporated in Pennsylvania in February 1999, is a utility services holding company engaged, through Generation, in the energy generation business, and through ComEd, PECO, BGE, PHI, Pepco, DPL and ACE in the energy delivery businesses discussed below. Exelon’s principal executive offices are located at 10 South Dearborn Street, Chicago, Illinois 60603.
Name of Registrant
  
State/Jurisdiction and
  
Business
  
Service
  
Address of Principal
Year of Incorporation
Territories
Executive Offices
Exelon Generation
Company, LLC
 
Pennsylvania (2000)
 
Generation, physical delivery and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy and other energy-related products and services.

 
Six reportable segments: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions
 
300 Exelon Way,
Kennett Square, Pennsylvania 19348
 
 
 
 
 
 
 
 
 
Commonwealth Edison Company
 
Illinois (1913)
 
Purchase and regulated retail sale of electricity
 
Northern Illinois, including the City of Chicago
 
440 South LaSalle Street,
Chicago, Illinois 60605
 
 
 
 
Transmission and distribution of electricity to retail customers
 
 
 
 
PECO Energy Company
 
Pennsylvania (1929)
 
Purchase and regulated retail sale of electricity and natural gas
 
Southeastern Pennsylvania, including the City of Philadelphia (electricity)
 
2301 Market Street,
Philadelphia, Pennsylvania 19103
 
 
 
 
Transmission and distribution of electricity and distribution of natural gas to retail customers
 
Pennsylvania counties surrounding the City of Philadelphia (natural gas)
 
 
Baltimore Gas and Electric Company
 
Maryland (1906)
 
Purchase and regulated retail sale of electricity and natural gas
 
Central Maryland, including the City of Baltimore (electricity and natural gas)
 
110 West Fayette Street,
Baltimore, Maryland 21201
 
 
 
 
Transmission and distribution of electricity and distribution of natural gas to retail customers
 
 
 
 
Pepco Holdings LLC
 
Delaware (2016)
 
Utility services holding company engaged, through its reportable segments Pepco, DPL and ACE
 
Service Territories of Pepco, DPL and ACE
 
701 Ninth Street, N.W.,
Washington, D.C. 20068
 
 
 
 
 
 
 
 
 
Potomac Electric 
Power Company
  
District of Columbia
(1896)
Virginia (1949)
  
Purchase and regulated retail sale of electricity
  
District of Columbia and Major portions of Montgomery and Prince George’s Counties, Maryland
  
701 Ninth Street, N.W.,
Washington, D.C. 20068
 
 
 
 
Transmission and distribution of electricity to retail customers
 
 
 
 
Delmarva Power & Light Company
 
Delaware (1909)
Virginia (1979)
 
Purchase and regulated retail sale of electricity and natural gas
 
Portions of Delaware and Maryland (electricity)
 
500 North Wakefield Drive,
Newark, Delaware 19702
 
 
 
 
Transmission and distribution of electricity and distribution of natural gas to retail customers
 
Portions of New Castle County, Delaware (natural gas)
 
 
Atlantic City Electric Company
 
New Jersey (1924)
 
Purchase and regulated retail sale of electricity
 
Portions of Southern New Jersey
 
500 North Wakefield Drive,
Newark, Delaware 19702
 
 
 
 
Transmission and distribution of electricity to retail customers
 
 
 
 

7


Business Services
Through its business services subsidiary BSC, Exelon provides its operating subsidiaries with a variety of corporate governance support services including corporate strategy and development, legal, human resources, information technology, finance, real estate, security, corporate communications and supply at cost. The costs of these services are directly charged or allocated to the applicable operating segments. The services are provided pursuant to service agreements. Additionally, the results of Exelon’s corporate operations include interest costs and income from various investment and financing activities.
PHISCO, a wholly owned subsidiary of PHI, provides a variety of support services at cost, including legal, finance, engineering, distribution and transmission planning, asset management, system operations, and power procurement, to PHI and its operating subsidiaries. These services are directly charged or allocated pursuant to service agreements among PHISCO and the participating operating subsidiaries.
Merger with Pepco Holdings, Inc. (Exelon)
On March 23, 2016, Exelon completed the merger contemplated by the Merger Agreement among Exelon, Purple Acquisition Corp., a wholly owned subsidiary of Exelon (Merger Sub) and PHI. As a result of that merger, Merger Sub was merged into PHI (the PHI Merger) with PHI surviving as a wholly owned subsidiary of Exelon and EEDC, a wholly owned subsidiary of Exelon which also owns Exelon's interests in ComEd, PECO and BGE (through a special purpose subsidiary in the case of BGE). Following the completion of the PHI Merger, Exelon and PHI completed a series of internal corporate organization restructuring transactions resulting in the transfer of PHI’s unregulated business interests to Exelon and Generation and the transfer of PHI, Pepco, DPL and ACE to a special purpose subsidiary of EEDC. See Note 5Mergers, Acquisitions and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
Generation
Generation, one of the largest competitive electric generation companies in the United States as measured by owned and contracted MW, physically delivers and markets power across multiple geographic regions through its customer-facing business, Constellation. Constellation sells electricity and natural gas, including renewable energy, in competitive energy markets to both wholesale and retail customers. Generation leverages its energy generation portfolio to ensure delivery of energy to both wholesale and retail customers under long-term and short-term contracts, and in wholesale power markets. Generation operates in well-developed energy markets and employs an integrated hedging strategy to manage commodity price volatility. Generation's fleet also provides geographic and supply source diversity. Generation’s customers include distribution utilities, municipalities, cooperatives, financial institutions, and commercial, industrial, governmental, and residential customers in competitive markets. Generation’s customer-facing activities foster development and delivery of other innovative energy-related products and services for its customers.
Generation is a public utility under the Federal Power Act and is subject to FERC’s exclusive ratemaking jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce. Under the Federal Power Act, FERC has the authority to grant or deny market-based rates for sales of energy, capacity and ancillary services to ensure that such sales are just and reasonable. FERC’s jurisdiction over ratemaking includes the authority to suspend the market-based rates of utilities and set cost-based rates should FERC find that its previous grant of market-based rates authority is no longer just and reasonable. Other matters subject to FERC jurisdiction include, but are not limited to, third-party financings; review of mergers; dispositions of jurisdictional facilities and acquisitions of securities of another public utility or an existing operational generating facility; affiliate transactions; intercompany financings and cash management arrangements; certain internal corporate reorganizations; and certain holding company acquisitions of public utility and holding company securities.
RTOs and ISOs exist in a number of regions to provide transmission service across multiple transmission systems. FERC has approved PJM, MISO, ISO-NE and SPP as RTOs and CAISO and ISO-NY as ISOs. These entities are responsible for regional planning, managing transmission congestion, developing wholesale markets for energy and capacity, maintaining reliability, market monitoring, the scheduling of physical power sales brokered through ICE and NYMEX and the elimination or reduction of redundant transmission charges imposed by multiple transmission providers when wholesale customers take transmission service across several transmission systems.

8


ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs in markets regulated by FERC.
Specific operations of Generation are also subject to the jurisdiction of various other Federal, state, regional and local agencies, including the NRC and Federal and state environmental protection agencies. Additionally, Generation is subject to NERC mandatory reliability standards, which protect the nation’s bulk power system against potential disruptions from cyber and physical security breaches.
CENG
Generation owns a 50.01% interest in CENG, a joint venture with EDF. CENG is governed by a board of ten directors, five of which are appointed by Generation and five by EDF. CENG owns a total of five nuclear generating facilities on three sites, Calvert Cliffs, R.E. Ginna (Ginna) and Nine Mile Point. CENG’s ownership share in the total capacity of these units is 4,041 MW. See ITEM 2. PROPERTIES for additional information on these sites.
Generation and EDF entered into a Put Option Agreement on April 1, 2014, pursuant to which EDF has the option, exercisable beginning on January 1, 2016 and thereafter until June 30, 2022, to sell its 49.99% interest in CENG to Generation for a fair market value price determined by agreement of the parties, or absent agreement, a third-party arbitration process. The appraisers determining fair market value of EDF’s 49.99% interest in CENG under the Put Option Agreement are instructed to take into account all rights and obligations under the CENG Operating Agreement, including Generation’s rights with respect to any unpaid aggregate preferred distributions and the related return, and the value of Generation’s rights to other distributions. In addition, under limited circumstances, the period for exercise of the put option may be extended for 18 months. In order to exercise its option, EDF must give 60-days advance written notice to Generation stating that it is exercising its option. To date, EDF has not given notice to Generation that it is exercising its option.
Exelon and Generation record all assets, liabilities and EDF’s noncontrolling interests in CENG on a fully consolidated basis in Exelon’s and Generation’s Consolidated Balance Sheets. See Note 2Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding the CENG consolidation.
Acquisitions
Handley Generating Station
On April 4, 2018, Generation acquired the Handley Generating Station in conjunction with the EGTP Chapter 11 proceedings for a total purchase price of $62 million. See EGTP in the Dispositions section below for additional information on EGTP's November 7, 2017 bankruptcy filing.
FitzPatrick
On March 31, 2017, Generation acquired the 838 MW single-unit FitzPatrick plant located in Scriba, New York from Entergy for a total purchase price consideration of $289 million, resulting in an after-tax bargain purchase gain of $233 million in 2017.
ConEdison Solutions
On September 1, 2016, Generation acquired ConEdison Solutions for a purchase price of $257 million, including net working capital of $204 million. The renewable energy, sustainable services and energy efficiency businesses of ConEdison were excluded from the transaction.
Integrys Energy Services, Inc.
On November 1, 2014, Generation acquired the competitive retail electric and natural gas business activities of Integrys Energy Group, Inc. through the purchase of all of the stock of its wholly owned subsidiary, Integrys Energy Services, Inc. (Integrys) for a purchase price of $332 million, including net working capital. The generation and solar asset businesses of Integrys were excluded from the transaction.

9


Dispositions
EGTP
On November 7, 2017, EGTP and all of its wholly owned subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. As a result of the bankruptcy filing, EGTP’s assets and liabilities were deconsolidated from Exelon and Generation's consolidated financial statements. The Chapter 11 bankruptcy proceedings were finalized on April 17, 2018, resulting in the ownership of EGTP assets (other than the Handley Generating Station) being transferred to EGTP's lenders.
Asset Dispositions
During 2015 and 2014, Generation sold certain generating assets with total pre-tax proceeds of $1.8 billion (after-tax proceeds of approximately $1.4 billion). Proceeds were used primarily to finance a portion of the acquisition of PHI.
See Note 5Mergers, Acquisitions and Dispositions and Note 7Impairment of Long-Lived Assets and Intangibles of the Combined Notes to Consolidated Financial Statements for additional information on acquisitions and dispositions.
Generating Resources
At December 31, 2018, the generating resources of Generation consisted of the following:
Type of Capacity
MW
Owned generation assets(a)(b)
 
Nuclear
19,713

Fossil (primarily natural gas and oil)
9,547

       Renewable(c)
3,203

Owned generation assets
32,463

Long-term power purchase contracts(d)
5,184

Total generating resources
37,647

 
__________
(a)
See “Fuel” for sources of fuels used in electric generation.
(b)
Net generation capacity is stated at proportionate ownership share. See ITEM 2. PROPERTIES—Generation for additional information.
(c)
Includes wind, hydroelectric, solar and biomass generating assets.
(d)
Electric supply procured under site specific agreements.
Generation has six reportable segments, Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions, representing the different geographical areas in which Generation’s generating resources are located and Generation's customer-facing activities are conducted.
Mid-Atlantic represents operations in the eastern half of PJM, which includes Pennsylvania, New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia and parts of North Carolina (approximately 34% of capacity).
Midwest represents operations in the western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region (approximately 37% of capacity).
New England represents operations within ISO-NE (approximately 7% of capacity).
New York represents operations within ISO-NY (approximately 6% of capacity).
ERCOT represents operations within Electric Reliability Council of Texas (approximately 11% of capacity).
Other Power Regions represents Canada, South and West (approximately 5% of capacity).

10


During the first quarter of 2019, due to a change in economics in our New England region, Generation is changing the way that information is reviewed by the CODM. The New England region will no longer be regularly reviewed as a separate region by the CODM nor will it be presented separately in any external information presented to third parties. Information for the New England region will be reviewed by the CODM as part of Other Power Regions. As a result, beginning in the first quarter of 2019, Generation will disclose five reportable segments consisting of Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. See Note 24 - Segment Information of the Combined Notes to Consolidated Financial Statements for additional information.
Nuclear Facilities
Generation has ownership interests in fourteen nuclear generating stations currently in service, consisting of 24 units with an aggregate of 19,713 MW of capacity. Generation wholly owns all of its nuclear generating stations, except for undivided ownership interests in three jointly-owned nuclear stations: Quad Cities (75% ownership), Peach Bottom (50% ownership), and Salem (42.59% ownership), which are consolidated in Exelon’s and Generation's financial statements relative to its proportionate ownership interest in each unit, and a 50.01% membership interest in CENG, which owns Calvert Cliffs, Nine Mile Point [excluding Long Island Power Authority's 18% undivided ownership interest in Nine Mile Point Unit 2] and Ginna nuclear stations. CENG is 100% consolidated in Exelon's and Generation’s financial statements.
Generation’s nuclear generating stations are all operated by Generation, with the exception of the two units at Salem, which are operated by PSEG Nuclear, LLC (PSEG Nuclear), an indirect, wholly owned subsidiary of PSEG. In 2018, 2017 and 2016 electric supply (in GWh) generated from the nuclear generating facilities was 68%, 69% and 67%, respectively, of Generation’s total electric supply, which also includes fossil, hydroelectric and renewable generation and electric supply purchased for resale. Generation’s wholesale and retail power marketing activities are, in part, supplied by the output from the nuclear generating stations. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information of Generation’s electric supply sources.
Nuclear Operations
Capacity factors, which are significantly affected by the number and duration of refueling and non-refueling outages, can have a significant impact on Generation’s results of operations. Generation’s operations from its nuclear plants have historically had minimal environmental impact and the plants have a safe operating history.
During 2018, 2017 and 2016, the nuclear generating facilities operated by Generation achieved capacity factors of 94.6%, 94.1% and 94.6%, respectively. The capacity factors reflect ownership percentage of stations operated by Generation and include CENG. Generation manages its scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable generation base for Generation’s wholesale and retail power marketing activities. During scheduled refueling outages, Generation performs maintenance and equipment upgrades in order to minimize the occurrence of unplanned outages and to maintain safe, reliable operations.
In addition to the maintenance and equipment upgrades performed by Generation during scheduled refueling outages, Generation has extensive operating and security procedures in place to ensure the safe operation of the nuclear units. Generation also has extensive safety systems in place to protect the plant, personnel and surrounding area in the unlikely event of an accident or other incident.
Regulation of Nuclear Power Generation
Generation is subject to the jurisdiction of the NRC with respect to the operation of its nuclear generating stations, including the licensing for operation of each unit. The NRC subjects nuclear generating stations to continuing review and regulation covering, among other things, operations, maintenance, emergency planning, security and environmental and radiological aspects of those stations. As part of its reactor oversight process, the NRC continuously assesses unit performance indicators and inspection results and communicates its assessment on a semi-annual basis. All nuclear generating stations operated by Generation, except for Peach Bottom Units 2 and 3, are categorized by the NRC in the Licensee Response Column, which is the highest of five performance bands. As of January 29, 2019, the NRC categorized Peach Bottom Units 2 and 3 in the Regulatory Response Column, which is the second highest of five performance bands. The NRC may modify, suspend or revoke operating licenses and impose civil penalties for failure to comply with the Atomic Energy Act, the regulations under such Act or the

11


terms of the operating licenses. Changes in regulations by the NRC may require a substantial increase in capital expenditures and/or operating costs for nuclear generating facilities.
Licenses
Generation has original 40-year operating licenses from the NRC for each of its nuclear units and has received 20-year operating license renewals from the NRC for all its nuclear units except Clinton. Additionally, PSEG has received 20-year operating license renewals for Salem Units 1 and 2.
The following table summarizes the current license expiration dates for Generation’s operating nuclear facilities in service:
Station
Unit
 
In-Service
Date(a)
 
Current License
Expiration
Braidwood
1

 
1988
 
2046
 
2

 
1988
 
2047
Byron
1

 
1985
 
2044
 
2

 
1987
 
2046
Calvert Cliffs
1

 
1975
 
2034
 
2

 
1977
 
2036
Clinton(b)
1

 
1987
 
2026
Dresden
2

 
1970
 
2029
 
3

 
1971
 
2031
FitzPatrick
1

 
1974
 
2034
LaSalle
1

 
1984
 
2042
 
2

 
1984
 
2043
Limerick
1

 
1986
 
2044
 
2

 
1990
 
2049
Nine Mile Point
1

 
1969
 
2029
 
2

 
1988
 
2046
Peach Bottom(c)
2

 
1974
 
2033
 
3

 
1974
 
2034
Quad Cities
1

 
1973
 
2032
 
2

 
1973
 
2032
Ginna
1

 
1970
 
2029
Salem
1

 
1977
 
2036
 
2

 
1981
 
2040
Three Mile Island(d)
1

 
1974
 
2034
__________
(a)
Denotes year in which nuclear unit began commercial operations.
(b)
Although timing has been delayed, Generation currently plans to seek license renewal for Clinton and has advised the NRC that any license renewal application would not be filed until the first quarter of 2021.
(c)
On July 10, 2018, Generation submitted a second 20-year license renewal application to NRC for Peach Bottom Units 2 and 3.
(d)
On May 30, 2017, Exelon announced that Generation will permanently cease generation operations at TMI on or about September 30, 2019 and has notified the NRC. See Note 8Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information.
The operating license renewal process takes approximately four to five years from the commencement of the renewal process, which includes approximately two years for Generation to develop the application and approximately two years for the NRC to review the application. To date, each granted license renewal has been for 20 years beyond the original operating license expiration. Depreciation provisions are based on the estimated useful lives of the

12


stations, which reflect the actual renewal of operating licenses for all of Generation’s operating nuclear generating stations except for TMI and Clinton. Beginning in 2017, TMI depreciation provisions are based on its 2019 expected shutdown date. Beginning in 2016, Clinton depreciation provisions are based on an estimated useful life of 2027 which is the last year of the Illinois Zero Emissions Standard. See Note 4 - Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on FEJA and Note 8Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information on early retirements.
Nuclear Waste Storage and Disposal
There are no facilities for the reprocessing or permanent disposal of SNF currently in operation in the United States, nor has the NRC licensed any such facilities. Generation currently stores all SNF generated by its nuclear generating facilities on-site in storage pools or in dry cask storage facilities. Since Generation’s SNF storage pools generally do not have sufficient storage capacity for the life of the respective plant, Generation has developed dry cask storage facilities to support operations.
As of December 31, 2018, Generation had approximately 87,100 SNF assemblies (21,400 tons) stored on site in SNF pools or dry cask storage which includes SNF assemblies at Zion Station, for which Generation retains ownership even though the responsibility for decommissioning Zion Station has been assumed by another party, and Oyster Creek, which is no longer operational. See the Decommissioning section below for additional information regarding Zion Station and Oyster Creek. All currently operating Generation-owned nuclear sites have on-site dry cask storage, except for TMI, where such storage is projected to be in operation in 2021. On-site dry cask storage in concert with on-site storage pools will be capable of meeting all current and future SNF storage requirements at Generation’s sites through the end of the license renewal periods and through decommissioning.
For a discussion of matters associated with Generation’s contracts with the DOE for the disposal of SNF, see Note 22Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.
As a by-product of their operations, nuclear generating units produce LLRW. LLRW is accumulated at each generating station and permanently disposed of at licensed disposal facilities. The Federal Low-Level Radioactive Waste Policy Act of 1980 provides that states may enter into agreements to provide regional disposal facilities for LLRW and restrict use of those facilities to waste generated within the region. Illinois and Kentucky have entered into such an agreement, although neither state currently has an operational site and none is anticipated to be operational until after 2020.
Generation ships its Class A LLRW, which represents 93% of LLRW generated at its stations, to disposal facilities in Utah and South Carolina, which have enough storage capacity to store all Class A LLRW for the life of all stations in Generation's nuclear fleet. The disposal facility in South Carolina at present is only receiving LLRW from LLRW generators in South Carolina, New Jersey (which includes Oyster Creek and Salem) and Connecticut.
Generation utilizes on-site storage capacity at all its stations to store and stage for shipping Class B and Class C LLRW. Generation has a contract through 2032 to ship Class B and Class C LLRW to a disposal facility in Texas. The agreement provides for disposal of all current Class B and Class C LLRW currently stored at each station as well as the Class B and Class C LLRW generated during the term of the agreement. However, because the production of LLRW from Generation’s nuclear fleet will exceed the capacity at the Texas site (3.9 million curies for 15 years beginning in 2012), Generation will still be required to utilize on-site storage at its stations for Class B and Class C LLRW. Generation currently has enough storage capacity to store all Class B and Class C LLRW for the life of all stations in Generation’s nuclear fleet. Generation continues to pursue alternative disposal strategies for LLRW, including an LLRW reduction program to minimize on-site storage and cost impacts.
Nuclear Insurance
Generation is subject to liability, property damage and other risks associated with major incidents at any of its nuclear stations, including the CENG nuclear stations. Generation has reduced its financial exposure to these risks through insurance and other industry risk-sharing provisions. See “Nuclear Insurance” within Note 22Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.
For information regarding property insurance, see ITEM 2. PROPERTIES — Generation. Generation is self-insured to the extent that any losses may exceed the amount of insurance maintained or are within the policy deductible for its insured losses. Such losses could have a material adverse effect on Exelon’s and Generation’s future financial statements.

13


Decommissioning
NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available in specified minimum amounts at the end of the life of the facility to decommission the facility. The ultimate decommissioning obligation will be funded by the NDTs. The NDTs are recorded in Exelon’s and Generation’s Consolidated Balance Sheets at December 31, 2018 at fair value of approximately $12.7 billion and have an estimated targeted annual pre-tax return of 5% to 6.2%, while the Nuclear AROs are recorded in Exelon’s and Generation’s Consolidated Balance Sheets at December 31, 2018 at approximately $10.0 billion and have an estimated annual average accretion of the ARO of approximately 5% through a period of approximately 30 years after the end of the extended lives of the units. The NDTs and AROs include Oyster Creek balances classified as Assets held for sale and Liabilities held for sale, respectively, in Exelon's and Generation's Consolidated Balance Sheets at December 31, 2018. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSExelon Corporation, Executive Overview; ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Critical Accounting Policies and Estimates, Nuclear Decommissioning, Asset Retirement Obligations and Nuclear Decommissioning Trust Fund Investments; and Note 4Regulatory Matters, Note 5 - Mergers, Acquisitions and Dispositions, Note 11Fair Value of Financial Assets and Liabilities and Note 15Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding Generation’s NDT funds and its decommissioning obligations.
Oyster Creek Generating Station. On July 31, 2018, Generation entered into an agreement with Holtec International (Holtec) and its indirect wholly owned subsidiary, Oyster Creek Environmental Protection, LLC (OCEP), for the sale and decommissioning of Oyster Creek located in Forked River, New Jersey. On September 17, 2018, Oyster Creek permanently ceased generation operations. See Note 5 - Mergers, Acquisitions and Dispositions and Note 15Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding the sale of Oyster Creek.
Zion Station Decommissioning. On September 1, 2010, Generation completed an Asset Sale Agreement (ASA) with EnergySolutions, Inc. and its wholly owned subsidiaries, EnergySolutions, LLC and ZionSolutions under which ZionSolutions has assumed responsibility for decommissioning Zion Station.
Generation transferred to ZionSolutions substantially all of the assets (other than land) associated with Zion Station, including assets held in related NDT funds. In consideration for Generation’s transfer of those assets, ZionSolutions assumed decommissioning and other liabilities, excluding the obligation to dispose of SNF, associated with Zion Station. Pursuant to the ASA, ZionSolutions will periodically request reimbursement from the Zion Station-related NDT funds for costs incurred related to the decommissioning efforts at Zion Station. However, ZionSolutions is subject to certain restrictions on its ability to request reimbursement; specifically, if certain milestones as defined in the ASA are not met, all or a portion of requested reimbursements will be deferred until such milestones are met. See Note 15Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding Zion Station decommissioning and Note 2Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for a discussion of variable interest entity considerations related to ZionSolutions.
Fossil and Renewable Facilities (including Hydroelectric)
At December 31, 2018, Generation had ownership interests in 12,750 MW of capacity in generating facilities currently in service, consisting of 9,547 MW of natural gas and oil, and 3,203 MW of renewables (wind, hydroelectric, solar and biomass). Generation wholly owns all of its fossil and renewable generating stations, with the exception of: (1) Wyman; (2) certain wind project entities and a biomass project entity with minority interest owners; and (3) EGRP which is owned 49% by another owner. See Note 2Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding certain of these entities which are VIEs. Generation’s fossil and renewable generating stations are all operated by Generation, with the exception of Wyman, which is operated by a third party. In 2018, 2017 and 2016, electric supply (in GWh) generated from owned fossil and renewable generating facilities was 11%, 12% and 10%, respectively, of Generation’s total electric supply. The majority of this output was dispatched to support Generation’s wholesale and retail power marketing activities. For additional information regarding Generation’s electric generating facilities, see ITEM 2. PROPERTIESExelon Generation Company, LLC and ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSExelon Corporation, Executive Overview for additional information on Generation Renewable Development.

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Licenses
Fossil and renewable generation plants are generally not licensed, and, therefore, the decision on when to retire plants is, fundamentally, a commercial one. FERC has the exclusive authority to license most non-Federal hydropower projects located on navigable waterways or Federal lands, or connected to the interstate electric grid, which include Generation's Conowingo Hydroelectric Project (Conowingo) and Muddy Run Pumped Storage Facility Project (Muddy Run). Muddy Run's license expires on December 1, 2055. On August 29, 2012, Generation submitted a hydroelectric license application to the FERC for a 46-year license for Conowingo. Based on the FERC procedural schedule, the FERC licensing process for Conowingo was not completed prior to the expiration of the plant’s license on September 1, 2014. As a result, on September 10, 2014, FERC issued an annual license for Conowingo, effective as of the expiration of the previous license. The annual license renews automatically absent any further FERC action. The stations are currently being depreciated over their estimated useful lives, which includes actual and anticipated license renewal periods. See Note 4Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Insurance
Generation maintains business interruption insurance for its renewable projects, but not for its fossil and hydroelectric operations unless required by contract or financing agreements. See Note 13Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on financing agreements. Generation maintains both property damage and liability insurance. For property damage and liability claims for these operations, Generation is self-insured to the extent that losses are within the policy deductible or exceed the amount of insurance maintained. Such losses could have a material adverse effect on Exelon’s and Generation’s future financial conditions and their results of operations and cash flows. For information regarding property insurance, see ITEM 2. PROPERTIESExelon Generation Company, LLC.
Long-Term Power Purchase Contracts
In addition to energy produced by owned generation assets, Generation sources electricity from plants it does not own under long-term contracts. The following tables summarize Generation’s long-term contracts to purchase unit-specific physical power with an original term in excess of one year in duration, by region, in effect as of December 31, 2018:
Region
 
Number of
Agreements
 
Expiration 
Dates
 
Capacity (MW)
Mid-Atlantic 
 
14

 
2019 - 2032
 
237

Midwest
 
4

 
2019 - 2026
 
834

New England
 
7

 
2019 - 2021
 
40

ERCOT
 
5

 
2020 - 2031
 
1,524

Other Power Regions
 
11

 
2019 - 2030
 
2,549

Total
 
41

 
 
 
5,184

 
 
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Capacity Expiring (MW)
 
673

 
1,020

 
826

 
298

 
167

 
2,200

 
5,184


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Fuel
The following table shows sources of electric supply in GWh for 2018 and 2017
 
Source of Electric Supply
 
2018
 
2017
Nuclear(a)
185,020

 
182,843

Purchases — non-trading portfolio
59,154

 
51,595

Fossil (primarily natural gas and oil)
21,015

 
22,546

Renewable(b)
8,469

 
7,848

Total supply
273,658


264,832

 
__________
(a)
Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and includes the total output of plants that are fully consolidated (e.g., CENG).  Nuclear generation for 2018 and 2017 includes physical volumes of 35,100 GWh and 34,761 GWh, respectively, for CENG.
(b)
Includes wind, hydroelectric, solar and biomass generating assets.
The fuel costs per MWh for nuclear generation are less than those for fossil-fuel generation. Consequently, nuclear generation is generally the most cost-effective way for Generation to meet its wholesale and retail load servicing requirements.
The cycle of production and utilization of nuclear fuel includes the mining and milling of uranium ore into uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride, the enrichment of the uranium hexafluoride and the fabrication of fuel assemblies. Generation has inventory in various forms and does not anticipate difficulty in obtaining the necessary uranium concentrates or conversion, enrichment or fabrication services to meet the nuclear fuel requirements of its nuclear units.
Natural gas is procured through long-term and short-term contracts, as well as spot-market purchases. Fuel oil inventories are managed so that in the winter months sufficient volumes of fuel are available in the event of extreme weather conditions and during the remaining months to take advantage of favorable market pricing.
Generation uses financial instruments to mitigate price risk associated with certain commodity price exposures, using both over-the-counter and exchange-traded instruments. See ITEM 1A. RISK FACTORS, ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Critical Accounting Policies and Estimates and Note 12Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative financial instruments.
Power Marketing
Generation’s integrated business operations include physical delivery and marketing of power.  Generation largely obtains physical power supply from its generating assets and power purchase agreements in multiple geographic regions. Power purchase agreements, including tolling arrangements, are commitments related to power generation of specific generation plants and/or dispatch similar to an owned asset depending on the type of underlying asset. The commodity risks associated with the output from generating assets and PPAs are managed using various commodity transactions including sales to customers. The main objective is to obtain low-cost energy supply to meet physical delivery obligations to both wholesale and retail customers. Generation sells electricity, natural gas and other energy related products and solutions to various customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental and residential customers in competitive markets. Where necessary, Generation may also purchase transmission service to ensure that it has reliable transmission capacity to physically move its power supplies to meet customer delivery needs.
Price and Supply Risk Management
Generation also manages the price and supply risks for energy and fuel associated with generation assets and the risks of power marketing activities. Generation implements a three-year ratable sales plan to align its hedging strategy with its financial objectives. Generation may also enter into transactions that are outside of this ratable sales plan. Generation is exposed to commodity price risk in 2019 and beyond for portions of its electricity portfolio

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that are unhedged. As of December 31, 2018, the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York and ERCOT reportable segments is 89%-92%, 56%-59% and 32%-35% for 2019, 2020, and 2021, respectively. The percentage of expected generation hedged is the amount of equivalent sales divided by the expected generation. Expected generation is the volume of energy that best represents our commodity position in energy markets from owned or contracted generating facilities based upon a simulated dispatch model that makes assumptions regarding future market conditions, which are calibrated to market quotes for power, fuel, load following products and options. Equivalent sales represent all hedging products, which include economic hedges and certain non-derivative contracts, including sales to ComEd, PECO, BGE, Pepco, DPL and ACE to serve their retail load. A portion of Generation’s hedging strategy may be implemented through the use of fuel products based on assumed correlations between power and fuel prices. The risk management group and Exelon’s RMC monitor the financial risks of the wholesale and retail power marketing activities. Generation also uses financial and commodity contracts for proprietary trading purposes, but this activity accounts for only a small portion of Generation’s efforts. The proprietary trading portfolio is subject to a risk management policy that includes stringent risk management limits. See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information.
Capital Expenditures
Generation’s business is capital intensive and requires significant investments primarily in nuclear fuel and energy generation assets. Generation’s estimated capital expenditures for 2019 are approximately $2.0 billion, which includes Generation's share of the investment in the co-owned Salem plant and the total capital expenditures for the fully consolidated CENG nuclear plants.
Utility Registrants
Utility Operations
Service Territories and Franchise Agreements
The following table presents the size of service territories, populations of each service territory and the number of customers within each service territory for the Utility Registrants as of December 31, 2018:
 
Service Territories
 
Service Territory Population
 
Number of Customers
 
(in square miles)
 
(in millions)
 
(in millions)
 
Total
 
Electric
 
Natural gas
 
Total
 
Electric
 
Natural gas
 
Total
 
Electric
 
Natural gas
ComEd
11,400

 
11,400

 
n/a

 
9.5

 (a) 
9.5

 
n/a

 
4.0

 
4.0

 
n/a

PECO
2,100

 
1,900

 
1,900

 
4.0

 (b) 
4.0

 
2.5

 
1.7

 
1.6

 
0.5

BGE
3,250

 
2,300

 
3,050

 
3.1

 (c) 
3.0

 
2.9

 
1.3

 
1.3

 
0.7

Pepco
640

 
640

 
n/a

 
2.4

 (d) 
2.4

 
n/a

 
0.9

 
0.9

 
n/a

DPL
5,400

 
5,400

 
275

 
1.4

 (e) 
1.4

 
0.6

 
0.5

 
0.5

 
0.1

ACE
2,800

 
2,800

 
n/a

 
1.1

 (f) 
1.1

 
n/a

 
0.6

 
0.6

 
n/a

__________
(a)
Includes approximately 2.7 million in the city of Chicago.
(b)
Includes approximately 1.6 million in the city of Philadelphia.
(c)
Includes approximately 0.6 million in the city of Baltimore.
(d)
Includes approximately 0.7 million in the District of Columbia.
(e)
Includes approximately 0.1 million in the city of Wilmington.
(f)
Includes approximately 0.1 million in the city of Atlantic City.
The Utility Registrants have the necessary authorizations to perform their current business of providing regulated electric and natural gas distribution services in the various municipalities and territories in which they now supply such services. These authorizations include charters, franchises, permits, and certificates of public convenience issued by local and state governments and state utility commissions. ComEd's, BGE's (gas) and ACE's rights are generally non-exclusive; while PECO's, BGE's (electric) Pepco's and DPL's rights are generally exclusive. Certain authorizations are perpetual while others have varying expiration dates. The Utility Registrants anticipate working with the appropriate governmental bodies to extend or replace the authorizations prior to their expirations.

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Utility Regulations
State utility commissions regulate the Utility Registrants' electric and gas distribution rates and service, issuances of certain securities, and certain other aspects of the business. The following table outlines the state commissions responsible for utility oversight.
Registrant
 
Commission
ComEd
 
ICC
PECO
 
PAPUC
BGE
 
MDPSC
Pepco
 
DCPSC/MDPSC
DPL
 
DPSC/MDPSC
ACE
 
NJBPU
The Utility Registrants are public utilities under the Federal Power Act subject to regulation by FERC related to transmission rates and certain other aspects of the utilities' business. The U.S. Department of Transportation also regulates pipeline safety and other areas of gas operations for PECO, BGE and DPL. Additionally, the Utility Registrants are subject to NERC mandatory reliability standards, which protect the nation's bulk power system against potential disruptions from cyber and physical security breaches.
Seasonality Impacts on Delivery Volumes
The Utility Registrants' electric distribution volumes are generally higher during the summer and winter months when temperature extremes create demand for either summer cooling or winter heating. For PECO, BGE and DPL, natural gas distribution volumes are generally higher during the winter months when cold temperatures create demand for winter heating.
ComEd, BGE, Pepco and DPL Maryland have electric distribution decoupling mechanisms and BGE has a natural gas decoupling mechanism that eliminate the favorable and unfavorable impacts of weather and customer usage patterns on electric distribution and natural gas delivery volumes. As a result, ComEd’s, BGE’s, Pepco’s and DPL’s Maryland electric distribution revenues and BGE's natural gas distribution revenues are not materially impacted by delivery volumes. PECO’s electric distribution revenues and natural gas distribution revenues and ACE’s electric distribution revenues and DPL’s Delaware electric distribution and natural gas revenues are impacted by delivery volumes.
Electric and Natural Gas Distribution Services
The Utility Registrants are allowed to recover reasonable costs and fair and prudent capital expenditures associated with electric and natural gas distribution services and earn a return on those capital expenditures, subject to commission approval. ComEd recovers costs through a performance-based rate formula. ComEd is required to file an update to the performance-based rate formula on an annual basis. PECO's, BGE’s and DPL's electric and gas distribution costs and Pepco's and ACE's electric distribution costs are recovered through traditional rate case proceedings. In certain instances, the Utility Registrants use specific recovery mechanisms as approved by their respective regulatory agencies.
ComEd, Pepco and ACE customers have the choice to purchase electricity, and PECO, BGE and DPL customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. The Utility Registrants remain the distribution service providers for all customers and are obligated to deliver electricity and natural gas to customers in their respective service territories while charging a regulated rate for distribution service. In addition, the Utility Registrants also retain significant default service obligations to provide electricity to certain groups of customers in their respective service areas who do not choose a competitive electric generation supplier. PECO and BGE also retain significant default service obligations to provide natural gas to certain groups of customers in their respective service areas who do not choose a competitive natural gas supplier. For natural gas, DPL does not retain default service obligations.
For customers that choose to purchase electric generation or natural gas from competitive suppliers, the Utility Registrants act as the billing agent and therefore do not record Operating revenues or Purchased power and fuel

18


expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from a Utility Registrant, the Utility Registrants are permitted to recover the electricity and natural gas procurement costs without mark-up and therefore record equal and offsetting amounts of Operating revenues and Purchased power and fuel expense related to the electricity and/or natural gas. As a result, fluctuations in electricity or natural gas sales and procurement costs have no impact on the Utility Registrants’ Revenues net of purchased power and fuel expense, which is a non-GAAP measure used to evaluate operational performance, or Net Income.
See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Results of Operations and Note 4Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding electric and natural gas distribution services.
Procurement-Related Proceedings
The Utility Registrants' electric supply for its customers is primarily procured through contracts as required by the ICC, PAPUC, MDPSC, DCPSC, DPSC and NJBPU. The Utility Registrants procure electricity supply from various approved bidders, including Generation. RTO spot market purchases and sales are utilized to balance the utility electric load and supply as required. Charges incurred for electric supply procured through contracts with Generation are included in Purchased power from affiliates on the Utility Registrants' Statements of Operations and Comprehensive Income.
PECO's, BGE’s and DPL's natural gas supplies are purchased from a number of suppliers for terms of up to three years. PECO, BGE and DPL have annual firm supply and transportation contracts of 132,000 mmcf, 128,000 mmcf and 58,000 mmcf, respectively. In addition, to supplement gas supply at times of heavy winter demands and in the event of temporary emergencies, PECO, BGE and DPL have available storage capacity from the following sources:
 
Peak Natural Gas Sources (in mmcf)
 
Liquefied Natural
Gas Facility
 
Propane-Air Plant
 
Underground Storage Service Agreements (a)
PECO
1,200

 
150

 
18,000

BGE
1,056

 
550

 
22,000

DPL
257

 
n/a

 
3,800

___________
(a)
Natural gas from underground storage represents approximately 28%, 54% and 34% of PECO's, BGE’s and DPL's 2018-2019 heating season planned supplies, respectively.
PECO, BGE and DPL have long-term interstate pipeline contracts and also participate in the interstate markets by releasing pipeline capacity or bundling pipeline capacity with gas for off-system sales. Off-system gas sales are low-margin direct sales of gas to wholesale suppliers of natural gas. Earnings from these activities are shared between the utilities and customers. PECO, BGE and DPL make these sales as part of a program to balance its supply and cost of natural gas. The off-system gas sales are not material to PECO, BGE and DPL.
See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, Commodity Price, for additional information regarding Utility Registrants' contracts to procure electric supply and natural gas.
Energy Efficiency Programs
The Utility Registrants are allowed to recover costs associated with energy efficiency and demand response programs. Each commission approved program seeks to meet mandated electric consumption reduction targets and implement demand response measures to reduce peak demand. The programs are designed to meet standards required by each respective regulatory agency.
The Utility Registrants are allowed to earn a return on their energy efficiency costs. See Note 4Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

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Capital Investment
The Utility Registrants' businesses are capital intensive and require significant investments, primarily in electric transmission and distribution and natural gas transportation and distribution facilities, to ensure the adequate capacity, reliability and efficiency of their systems. ComEd's, PECO's, BGE's, Pepco's, DPL's and ACE's most recent estimates of capital expenditures for plant additions and improvements for 2019 are as follows:
 
Projected 2019 Capital Expenditure Spending
(in millions)
Transmission
 
Distribution
 
Gas
 
Total
ComEd
325

 
1,550

 
N/A

 
1,875

PECO
125

 
600

 
250

 
975

BGE
225

 
475

 
400

 
1,100

Pepco
75

 
650

 
N/A

 
725

DPL
100

 
200

 
50

 
350

ACE
150

 
150

 
N/A

 
300

Transmission Services
Under FERC’s open access transmission policy, the Utility Registrants, as owners of transmission facilities, are required to provide open access to their transmission facilities under filed tariffs at cost-based rates approved by FERC. The Utility Registrants and their affiliates are required to comply with FERC’s Standards of Conduct regulation governing the communication of non-public transmission information between the transmission owner’s employees and wholesale merchant employees.
PJM is the regional grid operator and operates pursuant to FERC-approved tariffs. PJM is the transmission provider under, and the administrator of, the PJM Open Access Transmission Tariff (PJM Tariff). PJM operates the PJM energy, capacity and other markets, and, through central dispatch, controls the day-to-day operations of the bulk power system for the region. The Utility Registrants are members of PJM and provide regional transmission service pursuant to the PJM Tariff. The Utility Registrants and the other transmission owners in PJM have turned over control of their transmission facilities to PJM, and their transmission systems are under the dispatch control of PJM. Under the PJM Tariff, transmission service is provided on a region-wide, open-access basis using the transmission facilities of the PJM transmission owners at rates based on the costs of transmission service.
ComEd's transmission rates are established based on a formula that was approved by FERC in January 2008. BGE's, Pepco's, DPL's and ACE's transmission rates are established based on a formula that was approved by FERC in April 2006. FERC’s orders establish the agreed-upon treatment of costs and revenues in the determination of transmission rates and the process for updating the formula rate calculation on an annual basis.
On May 1, 2017, PECO filed a request with FERC seeking approval to update its transmission rate and change the manner in which PECO’s transmission rate is determined from a fixed rate to a formula rate. The new formula was accepted by FERC effective as of December 1, 2017, subject to refund and set the matter for hearing and settlement judge procedures. On May 4, 2018, the Chief Administrative Law Judge terminated settlement judge procedures and designated a new presiding judge.
See Note 4Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding the PECO transmission formula rate and transmission services.


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Employees
As of December 31, 2018, Exelon and its subsidiaries had 33,383 employees in the following companies, of which 11,372 or 34% were covered by collective bargaining agreements (CBAs):
 
IBEW 
Local 15(a)
 
IBEW 
Local 614(b)
 
Other CBAs
 
Total 
Employees
Covered by 
CBAs
 
Total
Employees
Generation(c)
1,568

 
84

 
2,485

 
4,137

 
14,110

ComEd
3,378

 

 

 
3,378

 
6,152

PECO

 
1,381

 

 
1,381

 
2,708

BGE(d)

 

 

 

 
3,025

PHI(e)

 

 
277

 
277

 
1,258

Pepco(e)

 

 
1,023

 
1,023

 
1,423

DPL(e)

 

 
684

 
684

 
940

ACE(e)

 

 
386

 
386

 
612

Other(g)
62

 

 
44

 
106

 
3,155

Total
5,008


1,465


4,899


11,372


33,383

 
__________
(a)
A separate CBA between ComEd and IBEW Local 15 covers approximately 73 employees in ComEd’s System Services Group and will expire in 2020. Generation’s and ComEd’s separate CBAs with IBEW Local 15 will expire in 2022.
(b)
PECO craft and call center employees in the Philadelphia service territory are covered by CBAs with IBEW Local 614, both expiring in 2021. Additionally, Exelon Power, an operating unit of Generation, has an agreement covering 84 employees, which expires in 2019.
(c)
During 2018, Generation acquired and finalized its CBA with Distrigas Local 369, which will expire in 2020, and additionally, finalized a first collective bargaining agreement, expiring in 2021, with a small unit of employees represented by IUOE Local 501 at Exelon's Hyperion Solutions facility. Also in 2018, Generation finalized a three-year agreement with the Security Officer union at Braidwood and that CBA will expire in 2021. During 2017, Generation finalized CBAs with the Security Officer unions at LaSalle, Limerick and Quad Cities, which all will expire in 2020 and Dresden expiring in 2021. Additionally, during 2017, Generation acquired and combined two CBAs at FitzPatrick into one CBA covering both craft and security employees, which will expire in 2023. During 2016, Generation finalized its CBA with the Security Officer union at Oyster Creek, expiring in 2022 and New Energy IUOE Local 95-95A, which will expire in 2021. Also, during 2016, Generation finalized a 5-year agreement with the New England ENEH, UWUA Local 369, which will expire in 2022. During 2015, Generation finalized its CBA with Clinton Local 51 which will expire in 2020; its two CBAs with Local 369 at Mystic 7 and Mystic 8/9, both expiring in 2020; and three Security Officer unions at Byron, Clinton and TMI, all expiring between 2019 and 2021, respectively. During 2014, Generation finalized CBAs with TMI Local 777 and Oyster Creek Local 1289, expiring in 2019 and 2021, respectively. Also in 2014, CENG finalized its CBA with Nine Mile Point which will expire in 2020.
(d)
In January 2017, an election was held at BGE which resulted in union representation for certain employees, who numbered 1,284 at the end of 2018. BGE and IBEW Local 410 are negotiating an initial agreement which could result in some modifications to wages, hours and other terms and conditions of employment. No agreement has been finalized to date and management cannot predict the outcome of such negotiations.
(e)
PHI’s utility subsidiaries are parties to five CBAs with four local unions. CBAs are generally renegotiated every three to five years. All these CBAs were renegotiated in 2014 and were extended through various dates ranging from October 2018 through June 2020. During 2018, ACE finalized a five-year agreement with Local 210, expiring in 2023.
(f)
Other includes shared services employees at BSC.
Environmental Regulation
General
The Registrants are subject to comprehensive and complex legislation regarding environmental matters by the federal government and various state and local jurisdictions in which they operate their facilities. The Registrants are also subject to environmental regulations administered by the EPA and various state and local environmental protection agencies. Federal, state and local regulation includes the authority to regulate air, water, and solid and hazardous waste disposal.
The Exelon Board of Directors is responsible for overseeing the management of environmental matters. Exelon has a management team to address environmental compliance and strategy, including the CEO; the Senior Vice

21


President, Corporate Strategy & Chief Innovation and Sustainability Officer; the Senior Vice President, Competitive Market Policy; and the Director, Safety & Sustainability, as well as senior management of Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE. Performance of those individuals directly involved in environmental compliance and strategy is reviewed and affects compensation as part of the annual individual performance review process. The Exelon Board of Directors has delegated to its Generation Oversight Committee and the Corporate Governance Committee the authority to oversee Exelon’s compliance with health, environmental and safety laws and regulations and its strategies and efforts to protect and improve the quality of the environment, including Exelon’s internal climate change and sustainability policies and programs, as discussed in further detail below. The respective Boards of ComEd, PECO, BGE, Pepco, DPL and ACE oversee environmental, health and safety issues related to these companies.
Air Quality
Air quality regulations promulgated by the EPA and the various state and local environmental agencies impose restrictions on emission of particulates, sulfur dioxide (SO2), nitrogen oxides (NOx), mercury and other air pollutants and require permits for operation of emitting sources. Such permits have been obtained as needed by Exelon’s subsidiaries. However, due to its low emitting generation fleet comprised of nuclear, natural gas, hydroelectric, wind and solar, compliance with the Federal Clean Air Act does not have a material impact on Generation’s operations.
See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information regarding clean air regulation in the forms of the CSAPR, the regulation of hazardous air pollutants from coal- and oil-fired electric generating facilities under MATS, and regulation of GHG emissions.
Water Quality
Under the federal Clean Water Act, NPDES permits for discharges into waterways are required to be obtained from the EPA or from the state environmental agency to which the permit program has been delegated and must be renewed periodically. Certain of Exelon's facilities discharge stormwater and industrial wastewater into waterways and are therefore subject to these regulations and operate under NPDES permits or pending applications for renewals of such permits after being granted an administrative extension. Generation is also subject to the jurisdiction of the Delaware River Basin Commission and the Susquehanna River Basin Commission, regional agencies that primarily regulate water usage.
Section 316(b) of the Clean Water Act
Section 316(b) requires that the cooling water intake structures at electric power plants reflect the best technology available to minimize adverse environmental impacts and is implemented through state-level NPDES permit programs. All of Generation’s power generation facilities with cooling water systems are subject to the regulations. Facilities without closed-cycle recirculating systems (e.g., cooling towers) are potentially most affected by recent changes to the regulations. For Generation, those facilities are Calvert Cliffs, Clinton, Dresden, Eddystone, Fairless Hills, FitzPatrick, Ginna, Gould Street, Handley, Mystic 7, Nine Mile Point Unit 1, Peach Bottom, Quad Cities and Salem.
On October 14, 2014, the EPA's Section 316(b) rule became effective. The rule requires that a series of studies and analyses be performed to determine the best technology available to minimize adverse impacts on aquatic life, followed by an implementation period for the selected technology. The timing of the various requirements for each facility is related to the status of its current NPDES permit and the subsequent renewal period. There is no fixed compliance schedule, as this is left to the discretion of the state permitting director.
Until the compliance requirements are determined by the applicable state permitting director on a site-specific basis for each plant, Generation cannot estimate the effect that compliance with the rule will have on the operation of its generating facilities and its future results of operations, cash flows, and financial position. Should a state permitting director determine that a facility must install cooling towers to comply with the rule, that facility’s economic viability could be called into question. However, the potential impact of the rule has been significantly reduced since the final rule does not mandate cooling towers as a national standard and sets forth technologies that are presumptively compliant, and the state permitting director is required to apply a cost-benefit test and can take into consideration site-specific factors, such as those that would make cooling towers infeasible.

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Pursuant to discussions with the NJDEP in 2010 regarding the application of Section 316(b) to Oyster Creek, Generation agreed to permanently cease generation operations at Oyster Creek before the expiration of its operating license in 2029. On September 17, 2018, Oyster Creek permanently ceased generation operations, and its cooling water intake system is no longer subject to Section 316(b). See Note 8 - Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information about the sale and decommissioning of Oyster Creek.
New York Facilities
In July 2011, the New York Department of Environmental Conservation (DEC) issued a policy regarding the best available technology for cooling water intake structures. Through its policy, the DEC established closed-cycle cooling or its equivalent as the performance goal for all existing facilities, but also provided that the DEC will select a feasible technology whose costs are not wholly disproportionate to the environmental benefits to be gained and allows for a site-specific determination where the entrainment performance goal cannot be achieved (i.e., the requirement most likely to support cooling towers). The Ginna, Nine Mile Point Unit 1, and Fitzpatrick power generation facilities have received renewals of their state water discharge permits and cooling towers were not required. These facilities are now engaged in the required analyses to enable the environmental agency to determine the best technology available in the next permit renewal cycles.
Salem
On July 28, 2016, the NJDEP issued a final permit for Salem that did not require the installation of cooling towers and allows Salem to continue to operate utilizing the existing cooling water system with certain required system modifications. However, the permit is being challenged by an environmental organization, and if successful, could result in additional costs for Clean Water Act compliance. Potential cooling water system modification costs could be material and could adversely impact the economic competitiveness of this facility.
Solid and Hazardous Waste
CERCLA provides for immediate response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances and authorizes the EPA either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under CERCLA, generators and transporters of hazardous substances, as well as past and present owners and operators of hazardous waste sites, are strictly, jointly and severally liable for the cleanup costs of waste at sites, most of which are listed by the EPA on the National Priorities List (NPL). These PRPs can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed cleanup, may voluntarily settle with the EPA concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight prior to listing on the NPL. Various states, including Delaware, Illinois, Maryland, New Jersey and Pennsylvania and the District of Columbia have also enacted statutes that contain provisions substantially similar to CERCLA. In addition, RCRA governs treatment, storage and disposal of solid and hazardous wastes and cleanup of sites where such activities were conducted.
Generation, ComEd, PECO, BGE, Pepco, DPL and ACE and their subsidiaries are, or could become in the future, parties to proceedings initiated by the EPA, state agencies and/or other responsible parties under CERCLA and RCRA with respect to a number of sites, including MGP sites, or may undertake to investigate and remediate sites for which they may be subject to enforcement actions by an agency or third-party.
See Note 22Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding solid and hazardous waste regulation and legislation.
Environmental Remediation
ComEd’s and PECO’s environmental liabilities primarily arise from contamination at former MGP sites. ComEd, pursuant to an ICC order, and PECO, pursuant to settlements of natural gas distribution rate cases with the PAPUC, have an on-going process to recover environmental remediation costs of the MGP sites through a provision within customer rates. BGE, ACE, Pepco and DPL do not have material contingent liabilities relating to MGP sites. The amount to be expended in 2019 for compliance with environmental remediation related to contamination at former MGP sites and other gas purification sites is expected to total $46 million, consisting of $36 million, $6 million and $4 million at ComEd, PECO and BGE respectively. The Utility Registrants also have contingent liabilities for

23


environmental remediation of non-MGP contaminants (e.g., PCBs). As of December 31, 2018, the Utility Registrants have established appropriate contingent liabilities for environmental remediation requirements.
The Registrants’ operations have in the past, and may in the future, require substantial expenditures in order to comply with environmental laws. Additionally, under Federal and state environmental laws, the Registrants are generally liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous substances generated by them. The Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by substances that are considered hazardous under environmental laws.
In addition, Generation, ComEd, PECO, BGE, Pepco, DPL and ACE may be required to make significant additional expenditures not presently determinable for other environmental remediation costs.
See Note 4Regulatory Matters and Note 22Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding the Registrants’ environmental remediation efforts and related impacts to the Registrants’ Consolidated Financial Statements.
Global Climate Change
Exelon has utility and generation assets, and customers, that are and will be further subject to the impacts of climate change. Accordingly, Exelon is engaged in a variety of initiatives to understand and mitigate these impacts, including investments in resiliency, partnering with federal, state and local governments to minimize impacts, and, importantly, advocating for public policy that reduces emissions that cause climate change. Exelon, as a producer of electricity from predominantly low- and zero-carbon generating facilities (such as nuclear, hydroelectric, natural gas, wind and solar photovoltaic), has a relatively small greenhouse gas (GHG) emission profile, or carbon footprint, compared to other domestic generators of electricity (Exelon neither owns nor operates any coal-fueled generating assets). Exelon's natural gas and biomass fired generating plants produce GHG emissions, most notably, CO2. However, Generation’s owned-asset emission intensity, or rate of carbon dioxide equivalent (CO2e) emitted per unit of electricity generated, is among the lowest in the industry. As of December 31, 2018, fossil fuel generation represented approximately 29% of Exelon's owned generating capacity, while fossil fuel-fired generation during 2018 represented less than 11% of Exelon's overall generation on a MWh basis. Other GHG emission sources at Exelon include natural gas (methane) leakage on the natural gas systems, sulfur hexafluoride (SF6) leakage from electric transmission and distribution operations, refrigerant leakage from chilling and cooling equipment, and fossil fuel combustion in motor vehicles. Exelon facilities and operations are subject to the global impacts of climate change and Exelon believes its operations could be significantly affected by the physical risks of climate change. See ITEM 1A. RISK FACTORS for information regarding the market and financial, regulatory and legislative, and operational risks associated with climate change.
Climate Change Regulation
Exelon is or may become subject to additional climate change regulation or legislation at the federal, regional and state levels.
International Climate Change Agreements. At the international level, the United States is a Party to the United Nations Framework Convention on Climate Change (UNFCCC). The Parties to the UNFCCC adopted the Paris Agreement at the 21st session of the UNFCCC Conference of the Parties (COP 21) on December 12, 2015, and it became effective on November 4, 2016. Under the Paris Agreement, the Parties agreed to try to limit the global average temperature increase to 2°C (3.6°F) above pre-industrial levels. In doing so, Parties developed their own national reduction commitments. The United States submitted a non-binding target of 17% below 2005 emission levels by 2020 and 26% to 28% below 2005 levels by 2025. President Trump has stated his intention to withdraw the U.S. from the Paris Agreement, but no formal action has been initiated.
Federal Climate Change Legislation and Regulation. It is highly unlikely that federal legislation to reduce GHG emissions will be enacted in the near-term. If such legislation is adopted, it would likely increase the value of Exelon's low-carbon fleet even though Exelon may incur costs either to further limit or offset the GHG emissions from its operations or to procure emission allowances or credits. Continued inaction could negatively impact the value of Exelon’s low-carbon fleet.
Under the Obama Administration, the EPA proposed and finalized regulations for fossil fuel-fired power plants, referred to as the Clean Power Plan, which are currently being litigated. Under the Trump Administration, on October

24


16, 2017 the EPA proposed to repeal the CPP on the basis that the new Administration believed that the CPP rule went beyond the EPA's authority to establish a best system of emissions reduction (BSER) for existing power plants. Subsequently, on August 31, 2018, EPA proposed its Affordable Clean Energy Rule (ACE), which would replace the CPP with revised emission guidelines based on heat rate improvement measures that could be achieved within the fence line of existing power plants.
Given litigation uncertainty and the absence of a final ACE rule, Exelon and Generation cannot at this time predict the impacts of regulation of existing power plants, or individual state responses to developments related to final resolution of the CPP and ACE regulations, or how developments will impact their future financial statements.
Regional and State Climate Change Legislation and Regulation. A number of states in which Exelon operates have state and regional programs to reduce GHG emissions, including from the power sector. As the nation’s largest generator of carbon-free electricity, our fleet supports these efforts to produce safe, reliable electricity with minimal GHGs. Notably, nine northeast and mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) currently participate in the Regional Greenhouse Gas Initiative (RGGI), which is in the process of strengthening its requirements. The program requires most fossil fuel-fired power plants in the region to hold allowances, purchased at auction, for each ton of CO2 emissions. Non-emitting resources do not have to purchase or hold these allowances.
Many states in which Exelon subsidiaries operate also have state-specific programs to address GHGs, including from power plants. Most notable of these, besides RGGI, are through renewable and other portfolio standards. Additionally, in response to a court decision clarifying the obligations under the Global Warming Solutions Act, the Massachusetts Department of Environmental Protection in 2017 finalized regulations establishing a statewide cap on CO2 emissions from fossil fuel power plants (Massachusetts remains in RGGI as well). The effect of this new obligation and potential for market illiquidity in the early years represent a risk to Generation’s Massachusetts fossil facilities, including Medway and Mystic. At the same time, the District of Columbia is considering a plan to incorporate the cost of carbon into electricity, via consumption, as well as directly into the cost of transportation and home heating fuels. Details remain to be developed, but the specifics could have implications for Pepco’s operations.
Regardless of whether GHG regulation occurs at the local, state, or federal level, Exelon remains one of the largest, lowest-carbon electric generators in the United States, relying mainly on nuclear, natural gas, hydropower, wind, and solar. The extent that the low-carbon generating fleet will continue to be a competitive advantage for Exelon depends on resolution of the CPP and ACE regulations and associated current or future litigation at the federal level, new or expanded state action on greenhouse gas emissions or direct support of clean energy technologies, including nuclear, as well as potential market reforms that value our fleet’s emission-free attributes.
Renewable and Alternative Energy Portfolio Standards
Thirty-nine states and the District of Columbia, incorporating the vast majority of Exelon operations as well as all utility operations, have adopted some form of RPS requirement. These standards impose varying levels of mandates for procurement of renewable or clean electricity (the definition of which varies by state) and/or energy efficiency. These are generally expressed as a percentage of annual electric load, often increasing by year. Exelon's utilities comply with these various requirements through purchasing qualifying renewables, implementing efficiency programs, acquiring sufficient credits (e.g., RECs), paying an alternative compliance payment, and/or a combination of these compliance alternatives. The Utility Registrants are permitted to recover from retail customers the costs of complying with their state RPS requirements, including the procurement of RECs or other alternative energy resources. New York, Illinois and New Jersey adopted standards targeted at preserving the zero-carbon attributes of certain nuclear-powered generating facilities. Generation owns multiple facilities participating in these programs within these states. Other states in which Generation and our utilities operate are considering similar programs.
See Note 4Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on renewable portfolio standards.

25


Executive Officers of the Registrants as of February 8, 2019
Exelon
Name
 
Age

 
Position
 
Period
Crane, Christopher M.
 
60

 
Chief Executive Officer, Exelon;
 
2012 - Present
 
 
 
 
Chairman, ComEd, PECO & BGE
 
2012 - Present
 
 
 
 
Chairman, PHI
 
2016 - Present
 
 
 
 
President, Exelon
 
2008 - Present
 
 
 
 
President, Generation
 
2008 - 2013
 
 
 
 
 
 
 
Cornew, Kenneth W.
 
53

 
Senior Executive Vice President and Chief Commercial Officer, Exelon;
 
2013 - Present
 
 
 
 
President and CEO, Generation
 
2013 - Present
 
 
 
 
Executive Vice President and Chief Commercial Officer, Exelon
 
2012 - 2013
 
 
 
 
President and Chief Executive Officer, Constellation
 
2012 - 2013
 
 
 
 
 
 
 
Pramaggiore, Anne R.
 
60

 
Senior Executive Vice President, Exelon; Chief Executive Officer, Exelon Utilities
 
2018 - Present
 
 
 
 
Chief Executive Officer, ComEd
 
2012 - 2018
 
 
 
 
President, ComEd
 
2009 - 2018
 
 
 
 
 
 
 
Dominguez, Joseph
 
56

 
Chief Executive Officer, ComEd
 
2018 - Present
 
 
 
 
Executive Vice President, Governmental & Regulatory Affairs and Public Policy, Exelon
 
2015 - 2018
 
 
 
 
Senior Vice President, Governmental & Regulatory Affairs and Public Policy, Exelon
 
2012 - 2015
 
 
 
 
 
 
 
Innocenzo, Michael A.
 
53

 
President and Chief Executive Officer, PECO
 
2018 - Present
 
 
 
 
Senior Vice President and Chief Operations Officer, PECO
 
2012 - 2018
 
 
 
 
 
 
 
Butler, Calvin G.
 
49

 
Chief Executive Officer, BGE
 
2014 - Present
 
 
 
 
Senior Vice President, Regulatory and External Affairs, BGE
 
2013 - 2014
 
 
 
 
Senior Vice President, Corporate Affairs, Exelon
 
2011 - 2013
 
 
 
 
 
 
 
Velazquez, David M.
 
59

 
President and Chief Executive Officer, PHI
 
2016 - Present
 
 
 
 
President and Chief Executive Officer, Pepco, DPL and ACE
 
2009 - Present
 
 
 
 
Executive Vice President, Pepco Holdings, Inc.
 
2009 - 2016
 
 
 
 
 
 
 
Von Hoene Jr., William A.
 
65

 
Senior Executive Vice President and Chief Strategy Officer, Exelon
 
2012 - Present
 
 
 
 
 
 
 
Nigro, Joseph
 
54

 
Senior Executive Vice President and Chief Financial Officer, Exelon
 
2018 - Present
 
 
 
 
Executive Vice President, Exelon; Chief Executive Officer, Constellation
 
2013 - 2018
 
 
 
 
 
 
 
Aliabadi, Paymon
 
56

 
Executive Vice President and Chief Risk Officer, Exelon
 
2013 - Present
 
 
 
 
Managing Director, Gleam Capital Management
 
2012 - 2013
 
 
 
 
 
 
 

26


Name
 
Age

 
Position
 
Period
Souza, Fabian E.
 
48

 
Senior Vice President and Corporate Controller, Exelon
 
2018 - Present
 
 
 
 
Senior Vice President and Deputy Controller, Exelon
 
2017 - 2018
 
 
 
 
Vice President, Controller and Chief Accounting Officer, The AES Corporation
 
2015 - 2017
 
 
 
 
Vice President, Internal Audit and Advisory Services, The AES Corporation
 
2014 - 2015
 
 
 
 
Deputy Corporate Controller, The AES Corporation
 
2014 - 2014
 
 
 
 
Assistant Corporate Controller, Global Controllership, The AES Corporation
 
2013 - 2014
 
 
 
 
Controller, Global Utilities, The AES Corporation
 
2011 - 2013
Generation
Name
 
Age

 
Position
 
Period
Cornew, Kenneth W.
 
53

 
Senior Executive Vice President and Chief Commercial Officer, Exelon;
 
2013 - Present
 
 
 
 
President and CEO, Generation
 
2013 - Present
 
 
 
 
Executive Vice President and Chief Commercial Officer, Exelon
 
2012 - 2013
 
 
 
 
President and Chief Executive Officer, Constellation
 
2012 - 2013
 
 
 
 
 
 
 
Pacilio, Michael J.
 
58

 
Executive Vice President and Chief Operating Officer, Exelon Generation
 
2015 - Present
 
 
 
 
President, Exelon Nuclear; Senior Vice President
 
2010 - 2015
 
 
 
 
and Chief Nuclear Officer, Generation
 
 
 
 
 
 
 
 
 
Hanson, Bryan C
 
53

 
President and Chief Nuclear Officer, Exelon Nuclear; Senior Vice President, Exelon Generation
 
2015 - Present
 
 
 
 
 
 
 
McHugh, James
 
47

 
Executive Vice President, Exelon; Chief Executive Officer, Constellation
 
2018 - Present
 
 
 
 
Senior Vice President, Portfolio Management & Strategy, Constellation
 
2016 - 2018
 
 
 
 
Vice President, Portfolio Management, Constellation
 
2012 - 2016
 
 
 
 
 
 
 
Barnes, John
 
55

 
Senior Vice President, Generation; President, Exelon Power
 
2018 - Present
 
 
 
 
Senior Vice President, Generation, Senior Vice President and Chief Operating Officer, Exelon Power
 
2012 - 2018
 
 
 
 
 
 
 
Wright, Bryan P.
 
52

 
Senior Vice President and Chief Financial Officer, Generation
 
2013 - Present
 
 
 
 
Senior Vice President, Corporate Finance, Exelon
 
2012 - 2013
 
 
 
 
 
 
 
Bauer, Matthew N.
 
42

 
Vice President and Controller, Generation
 
2016 - Present
 
 
 
 
Vice President and Controller, BGE
 
2014 - 2016
 
 
 
 
Vice President of Power Finance, Exelon Power
 
2012 - 2014

27


ComEd
Name
 
Age

 
Position
 
Period
Dominguez, Joseph
 
56

 
Chief Executive Officer, ComEd
 
2018 - Present
 
 
 
 
Executive Vice President, Governmental & Regulatory Affairs and Public Policy, Exelon
 
2015 - 2018
 
 
 
 
Senior Vice President, Governmental & Regulatory Affairs and Public Policy, Exelon
 
2012 - 2015
 
 
 
 
 
 
 
Donnelly, Terence R.
 
58

 
President and Chief Operating Officer, ComEd
 
2018 - Present
 
 
 
 
Executive Vice President and Chief Operating Officer, ComEd
 
2012 - 2018
 
 
 
 
 
 
 
Jones, Jeanne M.
 
39

 
Senior Vice President, Chief Financial Officer and Treasurer, ComEd
 
2018 - Present
 
 
 
 
Vice President, Finance, Exelon Nuclear
 
2014 - 2018
 
 
 
 
Director, Finance, Exelon Nuclear
 
2013 - 2014
 
 
 
 
 
 
 
Park, Jane
 
46

 
Senior Vice President, Customer Operations, ComEd
 
2018 - Present
 
 
 
 
Vice President, Regulatory Policy & Strategy, ComEd
 
2016 - 2018
 
 
 
 
Director, Business Strategy & Technology, ComEd
 
2014 - 2016
 
 
 
 
Chief of Staff to President and Chief Executive Officer, ComEd
 
2012 - 2014
 
 
 
 
 
 
 
Gomez, Veronica
 
49

 
Senior Vice President, Regulatory and Energy Policy and General Counsel, ComEd
 
2017 - Present
 
 
 
 
Vice President and Deputy General Counsel, Litigation, Exelon
 
2012 - 2017
 
 
 
 
 
 
 
Marquez Jr., Fidel
 
57

 
Senior Vice President, Governmental and External Affairs, ComEd
 
2012 - Present
 
 
 
 
 
 
 
McGuire, Timothy M.
 
60

 
Senior Vice President, Distribution Operations, ComEd
 
2016 - Present
 
 
 
 
Vice President, Transmission and Substations, ComEd
 
2010 - 2016
 
 
 
 
 
 
 
Kozel, Gerald J.
 
46

 
Vice President, Controller, ComEd
 
2013 - Present
 
 
 
 
Assistant Corporate Controller, Exelon
 
2012 - 2013

28


PECO
Name
 
Age
 
Position
 
Period
Innocenzo, Michael A.
 
53

 
President and Chief Executive Officer, PECO
 
2018 - Present
 
 
 
 
Senior Vice President and Chief Operations Officer, PECO
 
2012 - 2018
 
 
 
 
 
 
 
McDonald, John
 
61

 
Senior Vice President and Chief Operations Officer, PECO
 
2018 - Present
 
 
 
 
Vice President, Integration, Pepco Holdings
 
2016 - 2018
 
 
 
 
Vice President, Technical Services
 
2006 - 2016
Stefani, Robert J.
 
44

 
Senior Vice President, Chief Financial Officer and Treasurer, PECO
 
2018 - Present
 
 
 
 
Vice President, Corporate Development, Exelon
 
2015 - 2018
 
 
 
 
Director, Corporate Development, Exelon
 
2012 - 2015
 
 
 
 
 
 
 
Murphy, Elizabeth A.
 
59

 
Senior Vice President, Governmental and External Affairs, PECO
 
2016 - Present
 
 
 
 
Vice President, Governmental and External Affairs, PECO
 
2012 - 2016
 
 
 
 
 
 
 
Webster Jr., Richard G.
 
57

 
Vice President, Regulatory Policy and Strategy, PECO
 
2012 - Present
 
 
 
 
 
 
 
Feldhake, Lauren
 
53

 
Vice President, Customer Operations, PECO
 
2017 - Present
 
 
 
 
Director, Customer Care, PECO
 
2014 - 2017
 
 
 
 
Director, Customer Financial Operations, PECO
 
2009 - 2014
 
 
 
 
 
 
 
Diaz Jr., Romulo L.
 
72

 
Vice President and General Counsel, PECO
 
2012 - Present
 
 
 
 
 
 
 
Bailey, Scott A.
 
42

 
Vice President and Controller, PECO
 
2012 - Present

29


BGE
Name
 
Age
 
Position
 
Period
Butler, Calvin G.
 
49

 
Chief Executive Officer, BGE
 
2014 - Present
 
 
 
 
Senior Vice President, Regulatory and External Affairs, BGE
 
2013 - 2014
 
 
 
 
Senior Vice President, Corporate Affairs, Exelon
 
2011 - 2013
 
 
 
 
 
 
 
Woerner, Stephen J.
 
51

 
President, BGE
 
2014 - Present
 
 
 
 
Chief Operating Officer, BGE
 
2012 - Present
 
 
 
 
Senior Vice President, BGE
 
2009 - 2014
 
 
 
 
 
 
 
Vahos, David M.
 
46

 
Senior Vice President, Chief Financial Officer and Treasurer, BGE
 
2016 - Present
 
 
 
 
Vice President, Chief Financial Officer and Treasurer, BGE
 
2014 - 2016
 
 
 
 
Vice President and Controller, BGE
 
2012 - 2014
 
 
 
 
 
 
 
Núñez, Alexander G. 
 
47

 
Senior Vice President, Regulatory and External Affairs, BGE
 
2016 - Present
 
 
 
 
Vice President, Governmental and External Affairs, BGE
 
2013 - 2016
 
 
 
 
Director, State Affairs, BGE
 
2012 - 2013
 
 
 
 
 
 
 
Case, Mark D.
 
57

 
Vice President, Strategy and Regulatory Affairs, BGE
 
2012 - Present
 
 
 
 
 
 
 
Oddoye, Rodney
 
42

 
Vice President, Customer Operations, BGE
 
2018 - Present
 
 
 
 
Director, Northeast Regional Electric Operations, BGE
 
2016 - 2018
 
 
 
 
Director, Financial Operations, BGE
 
2015 - 2016
 
 
 
 
Manager, Distribution Operations, BGE
 
2013 - 2015
 
 
 
 
 
 
 
Corse, John
 
58

 
Vice President and General Counsel, BGE
 
2018 - Present
 
 
 
 
Associate General Counsel, Exelon
 
2012 - 2018
 
 
 
 
 
 
 
Holmes, Andrew W.
 
50

 
Vice President and Controller, BGE
 
2016 - Present
 
 
 
 
Director, Generation Accounting, Exelon
 
2013 - 2016
 
 
 
 
Director, Derivatives and Technical Accounting, Exelon
 
2008 - 2013

30


PHI, Pepco, DPL and ACE
Name
 
Age
 
Position
 
Period
Velazquez, David M.
 
59

 
President and Chief Executive Officer, PHI
 
2016 - Present
 
 
 
 
Executive Vice President, Pepco Holdings, Inc.
 
2009 - 2016
 
 
 
 
President and Chief Executive Officer, Pepco, DPL and ACE
 
2009 - Present
 
 
 
 
 
 
 
Anthony, J. Tyler
 
54

 
Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL and ACE
 
2016 - Present
 
 
 
 
Senior Vice President, Distribution Operations, ComEd
 
2010 - 2016
 
 
 
 
 
 
 
Barnett, Phillip S.
 
55

 
Senior Vice President, Chief Financial Officer and Treasurer PHI, Pepco, DPL and ACE
 
2018 - Present
 
 
 
 
Senior Vice President and Chief Financial Officer, PECO
 
2007 - 2018
 
 
 
 
Treasurer, PECO
 
2012 - 2018
 
 
 
 
 
 
 
Lavinson, Melissa
 
49

 
Senior Vice President, Governmental & External Affairs, PHI, Pepco, DPL and ACE
 
2018 - Present
 
 
 
 
Vice President, Federal Affairs and Policy and Chief Sustainability Officer, PG&E Corporation
 
2015 - 2018
 
 
 
 
Vice President, Federal Affairs, PG&E Corporation
 
2012 - 2015
 
 
 
 
 
 
 
Stark, Wendy E.
 
46

 
Senior Vice President, Legal and Regulatory Strategy and General Counsel, PHI, Pepco, DPL and ACE
 
2019 - Present
 
 
 
 
Vice President and General Counsel, PHI, Pepco DPL and ACE
 
2016 - 2018