(Release No. 35-27656; 70-9645)
Supplemental Order Authorizing an Extension of Time.
Exelon Corporation ("Exelon") Chicago, Illinois, a registered public-utility holding company; PECO Energy Company ("PECO") Philadelphia, PA, an electric and gas utility company; Exelon Generation Company LLC ("Genco") Kennett Square, PA, an electric utility generating subsidiary company; InfraSource, Inc. ("ISI") Morton, PA, an indirect nonutility subsidiary1 that provides infrastructure services; and Exelon Services, Inc. ("ES") Westchester, IL, an indirect nonutility subsidiary ("Applicants") have filed a post-effective amendment with the Securities and Exchange Commission ("Commission"), to an application previously filed under section 13(b) of the Public Utility Holding Company Act of 1935, as amended ("Act"), and rules 87, 90, and 91 under the Act ("Application"). The Commission issued a notice of the Application on August 21, 2000 (HCAR No. 27214).
By order dated October 19, 2000 (HCAR No. 27256) ("Order") and later extended by supplemental orders dated December 20, 2001 (HCAR No. 27480) ("December Order") and June 28, 2002 (HCAR No. 27547) ("June Order") (collectively, "Supplemental Orders"), the Commission granted Applicants2 an interim exemption under section 13(b) of the Act from the at-cost standards of rules 90 and 91 with respect to certain types of services rendered to and by Commonwealth Edison Company ("ComEd"), PECO and Genco, including the infrastructure services provided by ISI and the mechanical contracting services provided by ES. The Order specified that as of January 1, 2002, all of these transactions would be performed at-cost in accordance with rules 90 and 91. The June Order extended the time until February 28, 2003.
Since the time of issuance of the June Order, ISI began considering a possible sale of certain of its businesses. Applicants now request that the Commission issue a third supplemental order extending the interim exemption permitting ISI to continue to provide services to ComEd, PECO, Genco and any other Utility Subsidiary of Exelon at market prices, from February 28, 2003 until December 31, 2003. This extension is requested to allow ISI to complete a possible sale to a nonassociate company. Applicants also request that they be permitted to complete any ISI contracts that have been entered into under authority of the interim exemption, but that remain only partially performed at February 28, 2003. With respect to new contracts entered into by ISI under authority of the interim exemption between March 1, 2003 and December 31, 2003, Applicants state that such contracts will either expire no later than December 31, 2003 or be continued after that date in accordance with rules 90 and 91. If ISI is not sold by December 31, 2003,
Applicants further state that ISI will not enter into new contracts with the Utility Subsidiaries after December 31, 2003 unless the contracts comply with rules 90 and 91.
ES authority to provides services to ComEd, PECO, Genco and any other Utility Subsidiary of Exelon at market prices will expire on February 28, 2003. Applicants request that ES be permitted to complete any ES contracts that have been entered into under the authority of the interim exemption at February 28, 2003. These contracts will either expire no later than December 31, 2003, or be continued after that date in accordance with applicable Commission "at cost" rules. ES will not enter into new contracts with the Utility Subsidiaries after February 28, 2003, unless the contracts comply with applicable Commission "at cost" rules, including rules 90 and 91.
For the purposes of compliance with rule 54, Exelon states that it does not currently meet the conditions of rule 53(a). Exelon's "aggregate investment" (as defined in rule 53(a)(1)(i)) in all exempt wholesale generators ("EWGs") and foreign utility companies ("FUCOs") as of September 30, 2002, was approximately $2.106 billion, which is in excess of 50% of Exelon's consolidated retained earnings, as defined in rule 53(a)(1)(ii). However, by orders dated November 2, 2000 and December 8, 2000 (HCAR Nos. 27266 and 27296) ("Prior Orders"), the Commission has authorized Exelon to increase its "aggregate investment" in EWGs and FUCOs to an amount of up to $4 billion. Therefore, although Exelon's "aggregate investment" in EWGs and FUCOs currently exceeds the 50% "safe harbor" limitation, this investment level is permitted under the Prior Orders.
In addition, Exelon has complied and will comply with the record-keeping requirements of rule 53(a)(2), the limitation under rule 53(a)(3) on the use of its domestic public-utility subsidiaries' personnel to render services to EWGs and FUCOs, and the requirements of rule 53(a)(4) concerning the submission of copies of certain filings under the Act to retail regulatory commissions. Finally, none of the circumstances described in rule 53(b) has occurred or is continuing.
Fees and expenses are estimated not to exceed $30,000. Except as stated above, Applicants asserts that no other state or federal regulatory approval, other than the approval of the Commission is required to consummate the proposed transactions.
Due notice of the filing of the Application has been given in the manner prescribed in rule 23 under the Act, and no hearing has been requested of or ordered by the Commission. On the basis of the facts in the record, it is found that the applicable standards of the Act and rules under the Act are satisfied, and that no adverse findings are necessary.
IT IS ORDERED under the applicable provisions of the Act and the rules under the Act, that the post-effective amendment to the Application is permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
1 ISI is a subsidiary of Enterprises Company, LLC, ("Enterprises"). Enterprises is an intermediate nonutility holding company and subsidiary of Exelon Ventures Company LLC, a registered holding company directly owned by Exelon. Enterprises holds, among other nonutility subsidiaries, ISI and ES. ISI has non-Exelon shareholders.
2 Since the date of the Merger and the December Order, Exelon Infrastructure Services, Inc. has changed its name to "InfraSource, Inc." ES was formerly Unicom Mechanical Services, Inc.