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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK
ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 19951997
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION REGISTRANT; STATE OF INCORPORATION; IRS EMPLOYER
FILE NUMBER ADDRESS; AND TELEPHONE NUMBER IDENTIFICATION NO.
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1-11375 UNICOM CORPORATION 36-3961038
(an Illinois corporation)
37th Floor, 10 South Dearborn Street
Post Office Box A-3005
Chicago, Illinois 60690-3005
312/394-7399
1-1839 COMMONWEALTH EDISON COMPANY 36-0938600
(an Illinois corporation)
37th Floor, 10 South Dearborn Street
Post Office Box 767
Chicago, Illinois 60690-0767
312/394-4321
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
- --------------------------- ON WHICH REGISTERED
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UNICOM CORPORATION
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Common Stock, without par value New York, Chicago and Pacific
COMMONWEALTH EDISON COMPANY
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(Listed on inside cover)
INDICATE BY CHECK MARK WHETHER THE REGISTRANTS (1) HAVE 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, AND (2) HAVE BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X . No .
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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. [ ]
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COMMONWEALTH EDISON COMPANY Securities Registered Pursuant to Section 12(b) of
the Act:
TITLE OF NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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First Mortgage Bonds:
7 5/8% Series 25, due June 1, 2003 )
8% Series 26, due October 15, 2003 }) New York
8 1/8% Series 35, due January 15, 2007 )
Sinking Fund Debentures:
3%, due April 1, 1999 )
2 7/8%, due April 1, 2001 }) New York
7 5/8% Series 1, due February 15, 2003 )
2 3/4%, due April 1, 1999 New York and Chicago
Cumulative Preference Stock, without par
value:
$1.90; $2.00; $7.24; $8.40; $8.38; and
$8.40 )Series B New York, Chicago and Series B ) Pacific
$2.425 New York
8.48% ComEd-ObligatedCompany-Obligated Mandatorily
Redeemable Preferred Securities of
Subsidiary Trust Holding Solely the
Company's 8.48% Subordinated Debt
Securities New York Chicago and
Pacific
THE ESTIMATED AGGREGATE MARKET VALUE OF UNICOM CORPORATION'S 215,206,007216,683,743
shares of outstanding Common Stock, without par value, was approximately
$6,900,000,000$6,948 million as of February 29, 1996.28, 1998. In excess of 99.91%99.9% of Unicom
Corporation's voting stock was owned by non-affiliates as of that date.
THE ESTIMATED AGGREGATE MARKET VALUE OF COMMONWEALTH EDISON COMPANY'S
outstanding $1.425 Convertible Preferred Stock, Cumulative Preference Stock
and Company-Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary TrustTrusts Holding Solely the Company's Subordinated Debt Securities
was approximately $1,000,000,000$1,107 million as of February 29, 1996.28, 1998. Unicom Corporation
held in excess of 99.99% of the 214,195,157214,231,528 shares of outstanding Common
Stock, $12.50 par value, of Commonwealth Edison Company as of that date.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Unicom Corporation's Current Report on Form 8-K dated January
26,
199630, 1998 are incorporated by reference into Parts I, II and IV of the Unicom
Corporation Annual Report on Form 10-K and portions of its definitive Proxy
Statement to be filed prior to April 29, 199630, 1998, relating to its Annual Meeting
of shareholders to be held on May 22, 199628, 1998, are incorporated by reference into
Part III of the Unicom Corporation Annual Report on Form 10-K.
Portions of Commonwealth Edison Company's Current Report on Form 8-K dated
January 26, 199630, 1998 are incorporated by reference into Parts I, II and IV of the
Commonwealth Edison Company Annual Report on Form 10-K and portions of its
definitive Information Statement to be filed prior to April 29, 199630, 1998, relating
to its Annual Meeting of shareholders to be held on May 22, 199628, 1998, are
incorporated by reference into Part III of the Commonwealth Edison Company
Annual Report on Form 10-K.
Unicom Corporation's Current Report on Form 8-K/A-1 dated March 14, 1996, is
incorporated by reference into Parts I and II of the Unicom Corporation Annual
Report on Form 10-K.
Commonwealth Edison Company's Current Report on Form 8-K/A-1 dated March 14,
1996, is incorporated by reference into Parts I and II of the Commonwealth Edison Company
Annual Report on Form 10-K.
UNICOM CORPORATION
AND
COMMONWEALTH EDISON COMPANY
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 19951997
This document contains the Annual Reports on Form 10-K for the fiscal year
ended December 31, 19951997 for each of Unicom Corporation and Commonwealth Edison
Company. Information contained herein relating to an individual registrant is
filed by such registrant on its own behalf. Accordingly, except for its
subsidiaries, Commonwealth Edison Company makes no representation as to
information relating to Unicom Corporation or to any other companies affiliated
with Unicom Corporation.
TABLE OF CONTENTS
PAGE
----
Definitions............................................................... 1
ANNUAL REPORT ON FORM 10-K FOR UNICOM CORPORATION:
Part I
Item 1. Business........................................................ 2
General...............................................................General......................................................... 2
Changes in the Electric Utility Industry........................ 3
Net Electric Generating Capability.................................... 3Capability.............................. 6
Construction Program.................................................. 4Program............................................ 6
Rate Proceedings...................................................... 6Matters.................................................... 8
Fuel Supply........................................................... 7
Regulation............................................................Supply..................................................... 8
Employees............................................................. 15
Interconnections...................................................... 15
Franchises............................................................Regulation...................................................... 10
Employees....................................................... 16
Business and Competition..............................................Interconnections................................................ 16
Franchises...................................................... 16
Executive Officers of the Registrant..................................Registrant............................ 18
Operating Statistics............................................ 19
Operating Statistics..................................................Year 2000 Conversion............................................ 20
Market Risks.................................................... 20
Forward-Looking Information..................................... 20
Item 2. Properties...................................................... 2120
Item 3. Legal Proceedings............................................... 22
Item 4. Submission of Matters to a Vote of Security Holders............. 2223
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters................................................................Matters......................................................... 23
Item 6. Selected Financial Data......................................... 2425
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................... 24Operations........................................... 25
Item 8. Financial Statements and Supplementary Data..................... 2425
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................ 2425
Part III
Item 10. Directors and Executive Officers of the Registrant............. 25
Item 11. Executive Compensation......................................... 25
Item 12. Security Ownership of Certain Beneficial Owners and
Manage-
ment...................................................................Management..................................................... 25
Item 13. Certain Relationships and Related Transactions................. 25
i
UNICOM CORPORATION
AND
COMMONWEALTH EDISON COMPANY
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 19951997
TABLE OF CONTENTS (CONCLUDED)
PAGE
----
ANNUAL REPORT ON FORM 10-K FOR COMMONWEALTH EDISON COMPANY:
Part I
Item 1. Business........................................................ 26
Executive Officers of the Registrant............................... 26
Item 2. Properties...................................................... 2728
Item 3. Legal Proceedings............................................... 2728
Item 4. Submission of Matters to a Vote of Security Holders............. 2728
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters................................................................ 2728
Item 6. Selected Financial Data......................................... 28
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of
Operations...........................................Operations...................................................... 28
Item 8. Financial Statements and Supplementary Data..................... 28
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................ 28
Part III
Item 10. Directors and Executive Officers of the Registrant............. 28
Item 11. Executive Compensation......................................... 2829
Item 12. Security Ownership of Certain Beneficial Owners and Management. 2829
Item 13. Certain Relationships and Related Transactions................. 2829
ANNUAL REPORTS ON FORM 10-K FOR UNICOM CORPORATION AND COMMONWEALTH EDISON
COMPANY:
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............................................................... 298-
K...................................................................... 30
(a) Financial Statements, Financial Statement Schedules and Exhib-
its............................................................... 30
(b) Reports on Form 8-K............................................ 37
Report of Independent Public Accountants on Supplemental Schedule to
Unicom
Corporation..................................................... 37Corporation............................................................ 38
Report of Independent Public Accountants on Supplemental Schedule to
Commonwealth Edison Company............................................ 3839
Schedule II--Valuation and Qualifying Accounts.......................... 3940
Signature Page to Unicom Corporation Annual Report on Form 10-K......... 4041
Signature Page to Commonwealth Edison Company Annual Report on Form 10-K.............................................................. 4110-
K...................................................................... 42
ii
DEFINITIONS
The following terms are used in this document with the following meanings:
TERM MEANING
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AFUDC Allowance for funds used during construction1997 Act The Illinois Electric Service Customer Choice and Rate
Relief Law of 1997
BWR Boiling water reactor
CERCLA Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended
CFC Chlorofluorocarbon
Circuit Court Circuit Court of Cook County, IllinoisCHA Chicago Housing Authority
Clean Air Amendments Clean Air Act Amendments of 1990
ComEd Commonwealth Edison Company
Congress U.S. Congress
Cotter Cotter Corporation, which is a wholly-ownedComEd subsidiary
of ComEd.CTC Non-bypassable "competitive transition charge"
DOE U.S. Department of Energy
EEOC Equal Employment Opportunity Commission
EMFs Electric and magnetic fields
FAC Fuel adjustment clause
FERC Federal Energy Regulatory Commission
Fuel Matters Settlement A settlement relating to the ICC fuel reconciliation
proceedings involving ComEd for the period from 1985
through 1988 and to future challenges by the settling
parties to the prudence of ComEd's western coal costs
for the period from 1989 through 1992.FERC Order FERC Open Access Order No. 888 issued in April 1996
IBEW International Brotherhood of Electrical Workers (AFL-
CIO)
ICC Illinois Commerce Commission
IDNS Illinois Department of Nuclear Safety
IDR Illinois Department of Revenue
Illinois EPA Illinois Environmental Protection Agency
Indiana Company Commonwealth Edison Company of Indiana, Inc., which is
a wholly-ownedComEd
subsidiary
INPO Institute of ComEd.Nuclear Power Operations
IPCB Illinois Pollution Control Board
ISO Independent System Operator
January 30, 1998 Unicom's Current Report on Form 8-K including auditor's
Form 8-K Reports opinion dated January 30, 1998 and ComEd's Current
Report on Form 8-K including auditor's opinion dated
January 30, 1998
MAIN Mid-America Interconnected Network
MGP Manufactured gas plant
NOPR Notice of Proposed Rulemaking issued by the FERCNERC North American Electric Reliability Council
NPDES National Pollutant Discharge Elimination System
NPL National Priorities List
NRC Nuclear Regulatory Commission
PCBs Polychlorinated biphenyls
PRPs Potentially responsible parties under CERCLAO&M Operation and maintenance
Rate Matters Settlement A settlement concerning the proceedings relating to
ComEd's 1985 and 1991 ICC rate orders (which orders
related to, among other things, the recovery of costs
associated with ComEd's four most recently completed
nuclear generating units), the proceedings related to
the reduction in the difference between ComEd's
summer and non-summer residential rates that was
effected in the summer of 1988, outstanding issues
related to the appropriate interest rate and rate
design to be applied to a refund made by ComEd during
1990 related to a 1988 ICC rate order, and matters
related to a rider to ComEd's rates that it was
required to file as a result of the change in the
federal corporate income tax rate made by the Tax
Reform Act of 1986.
Rate Order ICC rate order issued on January 9, 1995, as
subsequently modified
Remand Order ICC rate order issued in January 1993,1995, as subsequently
modified
SEC Securities and Exchange Commission
S&P Standard & Poor's
Trust ComEd Financing I, which is a wholly-ownedSecurities ComEd-obligated mandatorily redeemable preferred
securities of subsidiary trust of ComEd.trusts holding solely ComEd's
subordinated debt securities
Unicom Unicom Corporation
Unicom Energy Services Unicom Energy Services Inc., a Unicom subsidiary
Unicom Enterprises Unicom Enterprises Inc., which is a wholly-ownedUnicom subsidiary
of Unicom.
Unicom Thermal Unicom Thermal TechnologiesUT Holdings UT Holdings Inc., which is a wholly-
ownedUnicom subsidiary of Unicom Enterprises.
Units ComEd's nuclear generating units known as Byron Unit 2
and Braidwood Units 1 and 2
U.S. EPA U.S. Environmental Protection Agency
Westinghouse Westinghouse Electric Corporation
1
ANNUAL REPORT ON FORM 10-K FOR UNICOM CORPORATION
PART I
ITEM 1. BUSINESS.
GENERAL
Unicom was organizedincorporated in January 1994. ComEd, a regulated electric
utility, is the stateprincipal subsidiary of Illinois on January 28, 1994. On
September 1, 1994, a corporate restructuring took place in which Unicom became
the parent holding company of ComEd andUnicom. Unicom Enterprises is an
unregulated subsidiary of Unicom and is engaged, through a subsidiary,its subsidiaries, in
energy service activities. The
purpose of the restructuring was, in part, to permit Unicom Enterprises to
engage in energy service activities without the prior approval of, or being
regulated by, the ICC, in part to permit timely responses to competitive
activities which could adversely affect ComEd's utility business and in part to
permit Unicom to take advantage of unregulated business opportunities. Unicom's principal executive offices are located at
10 South Dearborn Street, Post Office Box A-3005, Chicago, Illinois 60690-3005,60690-
3005, and its telephone number is 312/394-7399.
ComEd continues to representrepresents substantially all of the assets, revenues and net income
(loss) of Unicom; and Unicom's resources and results of operations are largely
dependent on, and reflect, those of ComEd. Unicom's unregulated
subsidiaries are not expected to make material contributions to Unicom's
revenues or results of operations in the near future. Consequently, the following
discussion focuses on ComEd's utility operations although information is also
provided about Unicom's unregulated operations.
Utility Operations
ComEd is engaged principally in the production, purchase, transmission,
distribution and sale of electricity to a diverse base of residential,
commercial, industrial and industrialwholesale customers. ComEd was organized in the
state of Illinois on October 17, 1913 as a result of the merger of
Cosmopolitan Electric Company into the original corporation named Commonwealth
Edison Company. The latter had been incorporated on September 17, 1907.
ComEd's electric service territory has an area of approximately 11,54011,300 square
miles and an estimated population of approximately eight8 million as of December
31, 1994 and 1995.1997. It includes the city of Chicago, an area of about 225 square miles
with an estimated population of approximately three3 million from which ComEd
derived approximately one-third of its ultimate consumer revenues in 1995.1997.
ComEd had
approximately 3.4 million electric customers at December 31, 1995.1997. ComEd's
principal executive offices are located at 10 South Dearborn Street, Post
Office Box 767, Chicago, Illinois 60690-0767, and its telephone number is
312/394-4321.
ComEd's financial condition will continue to depend on its ability to
generate revenues to cover its costs and to maintain adequate debt and
preferred and preference stock coverages and common stock equity earnings.
ComEd has no significant revenues other than from the sale of electricity. In
December 1995, ComEd announced a cap on base electric rates at current levels.
Consequently, ComEd's financial condition will be affected by, and ComEd's
management is addressing, actions to maintain and increase sales, to control
operating and capital expenditures, and to anticipate competitive activities.
See "Rate Proceedings" and "Business and Competition" below.
During the past several years, ComEd has instituted cost reduction plans
including various workforce reductions. Such efforts included an offer of
voluntary early retirement which was made to ComEd and the Indiana Company
management, non-union and union employees eligible to retire or who became
eligible to retire after December 31, 1993 and before April 1, 1995. Such
program resulted in a charge to income of approximately $20.5 million (after
reflecting income tax effects), substantially all of which was recorded during
1994. ComEd is continuing to examine methods of
2
reducing the size of its workforce, including special severance offers. On
October 30, 1995, ComEd declared an impasse in the collective bargaining
agreement negotiations with its principal union and implemented virtually all
of the terms of its last offered proposal prior to the impasse. Those terms
include, among other things, a wage increase retroactive to April 1, 1995 and a
voluntary separation offer for employees who accepted and left ComEd's employ
by year-end 1995. The voluntary separation offer, combined with separation
plans offered to selected groups of non-union employees, resulted in a charge
to income of approximately $59 million (after reflecting income tax effects) or
$0.27 per common share for the year 1995. This charge to income occurred
primarily in the fourth quarter of 1995 when most of the acceptances of the
offers occurred. ComEd expects to recover the costs of these plans within two
years as a result of reduced personnel. On February 20, 1996, ComEd announced
that it had reached agreement with Local 15 of the IBEW with respect to the
terms of a new collective bargaining agreement. See "Employees" below and Notes
13, 14 and 15 of Notes to Financial Statements in Unicom's Current Report on
Form 8-K dated January 26, 1996 and ComEd's Current Report on Form 8-K dated
January 26, 1996 (the "January 26, 1996 Form 8-K Reports").
ComEd has also examined, and is continuing to examine, the possibility of
disposing of one or more of its fossil generating stations to a third party or
parties and entering into a long-term power purchase arrangement. In connection
with such examination, ComEd has solicited and received binding proposals with
respect to such a transaction involving its State Line and Kincaid generating
stations; and it is negotiating with possible purchasers with respect to such
transactions. As presently structured, such transactions would involve a sale
of the generating station assets at a price approximating their book value and
a fifteen-year power purchase arrangement. Any such transactions would be
subject to the negotiation of definitive agreements and regulatory approvals
and are not expected to have a material impact on ComEd's consolidated
financial position or results of operations.
See "Fuel Supply," "Regulation" and "Item 3. Legal Proceedings" herein for
information concerning administrative and legal proceedings and certain other
matters involving ComEd, the Indiana Company and Cotter. The outcome of certain
of the proceedings or matters described or referred to therein, if not
favorable to ComEd and the Indiana Company, could have a material adverse
effect on the future business and operating results of Unicom, ComEd and the
Indiana Company.
Unregulated Operations
Unicom Enterprises is engaged, through its subsidiaries, in energy service
activities which are not subject to utility regulation by state or federal
agencies. Its principal subsidiary, Unicom Thermal, currentlyOne of these subsidiaries, UT Holdings, provides district cooling,
heating and related services to officeoffices and other buildings from ain the central
location inbusiness district of the city of Chicago.Chicago under a non-exclusive use agreement
with the city of Chicago for an initial term expiring in 2014. District
cooling involves, in essence, the production of chilled water at aone or more
central location(s)locations and its circulation to customers' buildings through a closed
circuit of supply and return piping. Such water is circulated through
customers' premises primarily for air conditioning. This process is used by
customers in lieu of self-generated cooling. As a result of the Clean Air
Amendments, the manufacture of CFCs has been curtailed commencing insince January 1996,
thereby creating an excellenta marketing opportunity for non-CFC based systems, such as Unicom Thermal'sUT
Holdings' district cooling. UT Holdings is involved in energy projects in
other cities, generally working with the local utilities in those cities.
Unicom ThermalEnergy Services, another subsidiary of Unicom Enterprises, is engaged
in providing energy services including gas services, performance contracting,
distributed energy and the city
of Chicago haveactive energy management systems. In 1997, Unicom
Energy Services entered into a non-exclusive franchise agreement.joint venture with Sonat Marketing Company L.P.
to market natural gas and related services to large gas purchasers within
ComEd's service area in Northern Illinois and other Midwestern areas. As an
entry into the
2
distributed energy market, Unicom Thermal's first plant began service in May 1995, and sufficient contracts have
been secured to utilize the full capacity of the plant. In January 1996, Unicom
Thermal Technologies Boston,Energy Services also entered into an
alliance with AlliedSignal Power Systems, Inc., a subsidiary of Unicom Thermal, becameAlliedSignal
Inc., to market, install and service an electric energy generator developed by
AlliedSignal, known as a minority participant with Boston Edison Technologies Group, Inc.TurboGenerator, in a venture12-state region and the province
of Ontario, Canada. Unicom Energy Services entered into an exclusive national
distributorship agreement with Engage Networks, Inc. to market active energy
management software and related hardware and services.
CHANGES IN THE ELECTRIC UTILITY INDUSTRY
Unicom and its predominant business, electric energy generation,
transmission and distribution, are in a period of fundamental change in the
manner in which customers obtain, and energy suppliers provide, energy
services. These changes are attributable to changes in technology, the
relaxation of regulatory barriers to utilities' respective service territories
as well as to efforts to change the manner in which electric utilities are
regulated. Federal law and regulations have been amended to provide district coolingfor open
transmission system access, and various states, including Illinois, are
considering, or have adopted, new regulatory structures to allow access by
some or all customers to energy suppliers in addition to the local utility.
Electric Utility Industry. The electric utility industry has historically
consisted of vertically integrated companies which combine generation,
transmission and distribution assets; serve customers within relatively
defined service territories; and operate under extensive regulation with
respect to rates, operations and other matters. Utilities have operated under
a regulatory compact with the state, with a statutory obligation to serve all
of the electricity needs within their service territory in a nondiscriminatory
manner. Historically, investment and operating decisions have been made based
upon the utilities' respective assessment of the current and projected needs
of their customers. In view of this obligation, regulation has focused on
investment and operating costs, and rates have been based on a recovery of
some or all of such prudently incurred costs plus a return on invested
capital. Such rate regulation, and the ability of utilities to recover
investment and other costs through rates, have provided the basis for
recording certain costs as regulatory assets. These assets represent costs
which are allocated over future periods reflecting related regulatory
treatment, rather than expensed in the current period.
The 1997 Act. On December 16, 1997, the Governor of Illinois signed into law
the 1997 Act, which established a phased-process to introduce competition into
the electric industry in Illinois under a less regulated structure. The 1997
Act, as it applies to ComEd, provides for, among other things, a 15%
residential base rate reduction commencing on August 1, 1998, an additional 5%
residential base rate reduction commencing on May 1, 2002, and customer access
to other electric suppliers in a phased-in process. Access for commercial and
industrial customers will occur over a period from October 1999 to December
2000, and access for residential customers will occur after May 1, 2002. The
15% residential base rate reduction, commencing on August 1, 1998, is expected
to reduce ComEd's operating revenues by approximately $160 million and $375
million in 1998 and 1999, respectively, compared to 1997 rate levels. ComEd is
engaged in certain pricing experiments contemplated by the 1997 Act, which are
expected to reduce ComEd's operating revenues by approximately $30 million and
$60 million in 1998 and 1999, respectively, compared to 1997 rate levels,
notwithstanding the effects of customer growth.
The 1997 Act also provides for the collection of a CTC from customers who
choose another electric service provider during a transition period that
extends through 2006, and can be extended through 2008 with ICC approval if
certain factors are met. The CTC will be established in accordance with a
formula defined in the 1997 Act. The CTC, which will be applied on a cents per
kilowatthour basis, considers the revenue which would have been collected from
a customer under tariffed rates, reduced by the revenue the utility will
receive for providing delivery services to officethe customer, the market price for
electricity and a defined mitigation factor which represents the utility's
opportunity to develop new revenue sources and achieve cost savings.
3
Notwithstanding these rate reductions, and subject to certain earnings
tests, a rate freeze will generally be in effect until at least January 1,
2005. During this period, utilities may reorganize, sell or assign assets,
retire or remove plants from service, and accelerate depreciation or
amortization of assets with limited ICC regulatory review. Under the earnings
provision of the 1997 Act, if the earned return on common equity of a utility
during this period exceeds an established threshold, a portion of the excess
earnings must be refunded to customers. A utility may request a rate increase
during the rate freeze period when necessary to ensure the utility's financial
viability, but not before January 1, 2000.
Under the 1997 Act, utilities are required to continue to offer delivery
services, including the transmission and distribution of electric energy, such
that customers who select an alternative energy supplier can receive electric
energy from that supplier using existing transmission and distribution
facilities. Such services will continue to be offered under cost-based
regulated rates. The 1997 Act also requires utilities to establish or join an
ISO that will independently manage and control utility transmission systems.
Additionally, the 1997 Act includes the option to eliminate the FAC, the
leveling of certain regulatory requirements to permit operational flexibility,
the leveling of certain regulatory and tax provisions as applied to various
electric suppliers and a new more stringent liability standard applicable to
ComEd in the event of a major outage.
The 1997 Act also allows ComEd to unbundle a portion of its future revenues,
including tariffed rates and CTC revenues, and issue securities backed by
these revenues. The proceeds from such security issuances must generally be
used to refinance outstanding debt or equity or for certain other limited
purposes. The total amount of such securities that ComEd may issue is
approximately $6.8 billion; approximately one-half of that amount can be
issued in the twelve-month period commencing on August 1, 1998.
As a result of the 1997 Act, prices for the supply of electric generation
are expected to transition from cost-based, regulated rates to rates
determined by competitive market forces. The CTC allows ComEd to recover a
portion of any of its costs which might otherwise be unrecoverable under
market-based rates. Nonetheless, ComEd will need to take steps to address the
portion of such costs which are not recoverable through the CTC. Such steps
include cost control efforts and developing new sources of revenue.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations," subcaption "Changes in the Electric Utility Industry--
Accounting Effects Related to the 1997 Act" and Note 2 of Notes to Financial
Statements in the January 30, 1998 Form 8-K Reports, which are incorporated
herein by reference, for the accounting effects related to the 1997 Act.
Federal Regulation. The Federal Energy Policy Act of 1992, among other
things, empowered the FERC to introduce a greater level of competition into
the wholesale marketplace for electric energy. In April 1996, the FERC Order
was issued requiring utilities to file open access tariffs with regard to
their transmission systems. These tariffs set forth the terms, including
prices, under which other parties and the utility's wholesale marketing
function may use the utility's transmission system. ComEd has an approved open
access tariff with the FERC. The FERC Order requires the separation of the
transmission operations and wholesale marketing functions so as to ensure that
unaffiliated third parties have access to the same information as to system
availability and other buildingsrequirements. The FERC Order further requires utilities
to operate an electronic bulletin board to make transmission price and access
data available to all potential users. A key feature of the FERC Order is that
it contemplates full recovery of a utility's costs "stranded" by competition.
These costs are "stranded" or "strandable" to the extent market-based rates
would be insufficient to allow for their full recovery. To recover stranded
costs, the utility must show that it had a reasonable expectation that it
would continue to serve the customer in question under its regulatory compact.
In addition, some governmental entities, such as cities, may elect to
"municipalize" a utility's distribution facilities
4
through condemnation proceedings. Such municipalities would then be able to
purchase electric power on a wholesale basis and resell it to customers over
the newly acquired facilities. The FERC Order provides for the recovery of a
utility's investment stranded by municipalization.
ComEd's Response to Regulatory Changes. ComEd is responding, and is
undertaking significant strategic planning efforts to respond further, to the
developments within the utility industry and the 1997 Act and its potential
for strandable investment. During the past several years, such efforts have
focused on cost reductions, including personnel reductions, efficiencies in
purchasing and inventory management, and an incentive compensation system
keyed to cost control and improvement in shareholder value. Notwithstanding
these efforts, ComEd's costs remain high in comparison to its neighboring
utilities. Although ComEd's operating results and financial condition have
historically been affected by various rate proceedings, ComEd expects that the
changes in the citynational and Illinois electric energy marketplace, and ComEd's
activities anticipating or responding to them, will directly impact its
operating results and financial condition over the next several years.
ComEd anticipates that the 1997 Act, and the resultant increasing
competition to supply energy in Illinois and elsewhere, will have significant
effects upon its revenues and assets as it takes steps to adjust its
operations and services to meet the changing market for electric energy. Both
Unicom and ComEd have been examining methods of Boston.positioning themselves and
their affiliates to deal with those effects and to address the developing
opportunities and challenges. ComEd has been engaged in a broad-based
examination of its assets and operations, particularly nuclear and fossil
generation and generation-related (i.e., fuel and inventory) assets, with a
view toward rationalizing their investment and operating costs against their
ability to contribute to the revenues of ComEd under various market scenarios.
Such an assessment involves the consideration of numerous factors, including
revenue contribution, operating costs, impacts on ComEd's service obligations,
purchase commitments and the impact of various options. Such options include
continued operation with accelerated depreciation, indefinite suspension from
operation, sale to a third party and retirement or closure. As discussed
below, ComEd recently ceased nuclear generation operations and retired
facilities at its Zion Station. If ComEd retired or closed one or more
additional generating plants, particularly a nuclear plant, such retirement
would have a material impact on Unicom and ComEd's financial position and
results of operations. See "General--Unregulated Operations" above regarding
Unicom Energy Services' energy services activities.
On January 14, 1998, the Boards of Directors of Unicom and ComEd authorized
the permanent cessation of nuclear generation operations and retirement of
facilities at ComEd's 2,080 megawatt Zion nuclear generating station. Such
retirement resulted in a charge for 1997 of $523 million (after-tax) or $2.42
per common share. The decision to close Zion Station was a result of an
ongoing analysis, which ComEd performed regarding the economic value of its
generating assets in light of the expected changes in the manner in which
electric energy is marketed and sold. The passage of the 1997 Act provided a
clearer basis for evaluating the costs and benefits of alternative courses of
action. In reaching the decision to cease nuclear generation operations at
Zion Station, the Boards also considered the significant uncertainty
associated with continued operation of the station due to the degradation of
the steam generators, and the expected operating costs associated with
continued station operation.
Notwithstanding the closure of Zion Station as a nuclear generating
facility, a portion of the station will continue to be used to provide voltage
support in the transmission system that serves ComEd's northern region. Such
support will require capital expenditures at the station as well as upgrades
to the transmission system at various points, in order to improve the ability
to import and transport power through the system. See Note 5 of Notes to
Financial Statements in the January 30, 1998 Form 8-K Reports, which are
incorporated herein by reference, for additional information.
5
In April 1996, ComEd announced that it had finalized agreements to sell two
of its coal-fired generating stations, representing 1,598 megawatts of
generating capacity, and to enter into exclusive 15-year purchased power
agreements for the output of the stations. The sale of State Line Station was
completed in December 1997 and the sale of Kincaid Station was completed in
February 1998. The net proceeds of the sales, after income tax effects and
closing costs, were approximately $190 million. The proceeds will be used to
retire or redeem existing debt.
ComEd joined with eight Midwestern utilities to form a regional Midwest ISO
in January 1998. The Midwest ISO is a key element in accommodating the
restructuring of the electric industry and will promote enhanced reliability
of the transmission system, equal access to the transmission system and
increased competition. The Midwest ISO will establish an independent body that
will ultimately direct the management of the transmission system for the
utilities involved. ComEd will retain ownership of its transmission lines. The
formation of the Midwest ISO is subject to FERC approval.
NET ELECTRIC GENERATING CAPABILITY
As described under "Item 2. Properties," ComEd and the Indiana Company consider their owned (non-summer)considers its non-summer net
generating capability to be 22,522,000 kilowatts.20,736,000 kilowatts (including the recently sold
Kincaid and State Line generating stations, whose capability is committed to
ComEd pursuant to exclusive 15-year purchase power agreements, and after
giving effect to the closure of Zion Station and certain plant re-ratings).
After deducting summer limitations of 557,000538,000 kilowatts, ComEd and the
3
Indiana Company consider theirconsiders its
net summer generating capability to be 21,965,00020,198,000 kilowatts. The net
generating capability available for operation at any time may be less due to
regulatory restrictions, fuel restrictions, efficiency of cooling facilities
and generating units being temporarily out of service for inspection,
maintenance, refueling, repairs or modifications required by regulatory
authorities. See "Item 2. Properties.""Regulation--Nuclear" below for information concerning
outages at certain of ComEd's nuclear generating stations.
ComEd's highest peak load experienced to date occurred on August 14, 1995
and was 19,212,000 kilowatts; and the highest peak load experienced to date
during a winter season occurred on January 18, 1994 and was 14,179,000
kilowatts. ComEd's kilowatthour sales and generation are generally higher,
(primarilyprimarily during the summer periods but also during the winter periods)periods, when
temperature extremes create demand for either summer cooling or winter
heating.
CONSTRUCTION PROGRAM
Utility Operations
ComEd and its electric utility subsidiary, the Indiana Company, havehas a construction program for the three-year period 1996-98year 1998, which consists
principally of improvements to ComEd's and the Indiana Company'sits existing nuclear and other electric
production, transmission and distribution facilities. It does not include
funds (other than for planning) to add new generating capacity to ComEd's system. The program, as
currently approved by ComEd, calls for electric plant and equipmentincludes the following estimated expenditures of approximately
$2,784 million
(excluding nuclear fuel expenditures of approximately $885$160 million).
It is estimated that such construction expenditures, with cost
escalation computed at 3.5% annually, will be as follows:
1996 1997 1998
TOTAL
---- ---- ---- ------
(MILLIONS
OF DOLLARS)
Production............................................ $451 $385 $426 $1,262Production................................................ $425
Transmission and Distribution......................... 392 405 410 1,207
General............................................... 110 110 95 315Distribution............................. 415
General................................................... 90
----
$930
----
---- ------
Total................................................ $953 $900 $931 $2,784
---- ---- ---- ------
---- ---- ---- ------
Such construction program includesestimated expenditures include $130 million toward the replacement of
the steam generators at ComEd's Braidwood Unit 1 and Byron Unit 1 nuclear
generating units for service
priorby year-end 1998. The total replacement cost is estimated to
year-end 1999 at a total estimated cost of approximately $470 million.
Approximately $355be $455 million, of this estimated cost is includedwhich approximately $295 million has been incurred through
December 31, 1997 and $30 million will be incurred in the
construction expenditures shown above. See "Regulation," subcaption "Nuclear"
for additional information relating to the replacement of the steam generators.1999.
ComEd and the Indiana Company's construction expenditures during 19951997 were
approximately $899$970 million.
6
ComEd's gross investment in nuclear generating capacity (excluding nuclear
fuel) is approximately $14.2$13.4 billion at December 31, 1995,1997 (after reflecting the closure of
Zion Station), and ComEd expects that investment to be approximately $14.7$13.9
billion by the end of 1998 as a result of improvements. Gross additions to and
retirements from utility property, excluding nuclear fuel, of ComEd and the
Indiana Company for the five years ended December 31, 19951997 were $4,419$4,352 million
and $458$1,686 million, respectively.respectively (after reflecting the closure of Zion Station
and the sale of State Line Station).
ComEd periodically reviews its projection of probable future demand for
electricity in its service territory. It currently projects an average annual
growth of 2% in annual peak load and 1.75% in annual output through 1999;
thereafter, due in part to implementation of national energy efficiency
standards, ComEd projects long-term average annual
growth of 1.75% in annual peak load and 1.5% in total annual output.electricity
requirements, excluding sales to other utilities. ComEd's forecasts of peak
load indicate a need for additional resources to meet demand, either through
generating capacity, or through equivalent purchased power or the development of
additional demand-side
4
management resources, in 1998 and each year thereafter through the year 2000.
The projected resource needs reflect the current planning reserve margin
recommendations of MAIN, the reliability council of which ComEd is a member.
ComEd's forecasts indicate that the need for additional resources during this
period would exist only during the summer months. ComEd does not expect to make
expenditures for additional capacity to the extent the need for capacity can be
met through cost-effective demand-side management resources, non-utility
generation or other power purchases. Based on current market information,thereafter.
However, ComEd believes that adequate resources, including cost-effective
demand-side management resources, non-utility generation resources and other-utilityother-
utility power purchases, could be obtained in sufficient quantities to meet
such forecasted requirements through
the year 2000. If ComEd were to build additional capacity to meet its needs, it
would need to make additional expenditures during the 1996-98 period.
ComEd's construction program will be reviewed and modified as necessary to
adapt to changing economic conditions, rate levels and other relevant factors
including changing business and legal needs and requirements. ComEd cannot
anticipate all such possible needs and requirements. While regulatory needs in
particular are more likely, on balance, to require increases in construction
expenditures than decreases, financial constraints may require compensating or
greater reductions in other construction expenditures. See "Regulation" below
for additional information.needs.
The 1996-981998 construction program includes approximately $24$2 million for
environmental control facilities, of which approximately $9 million, $6 million
and $9 million is budgeted for 1996, 1997 and 1998, respectively.facilities. Expenditures on such facilities were $28$18
million $24 millionin 1997 and $16 million during 1993,
1994for each of the years 1996 and 1995, respectively.1995.
Purchase commitments for ComEd, and the Indiana Company, principally related to construction and
nuclear fuel, approximated $1,137$286 million at December 31, 1995.1997. In addition,
ComEd has substantialComEd's estimated commitments for the purchase of coal are as indicated in the following table.follows:
CONTRACT PERIOD COMMITMENT(1)
-------- --------- -------------
Black Butte Coal Co..................................... 1996-2007 $1,011Co............................... 1998-2000 $ 679
Decker Coal Co. ........................................ 1996-2015 $ 713
Big Horn Coal Co. ........................................................................ 1998-2014 427
Other commitments ................................ 1998 $ 22
Other commitments....................................... 1996 $ 325
------
$1,131
======
- --------
(1)Estimated costs in In millions of dollars, FOB mine.excluding transportation costs. No
estimate of future cost
escalationcostescalation has been made.
For additional information concerning these coal contracts and ComEd's fuel
supply, see "Fuel Supply" below and Notes 1 and 2123 of Notes to Financial
Statements in the January 26, 199630, 1998 Form 8-K Reports.
ComEd has forecast that internal sources will provide more than three-fourths
of the funds required for ComEd's construction program and other capital
requirements, including nuclear fuel expenditures, contributions to nuclear
decommissioning funds, sinking fund obligations and refinancing of scheduled
debt maturities (the annual sinking fund requirements and scheduled maturities
for ComEd preference stock and long-term debtReports, which are summarized in Notes 7 and 9,
respectively, of Notes to Financial Statements in the January 26, 1996 Form 8-K
Reports). The forecast assumes the rate levels reflected in the Rate Order
(described below) remain in effect.incorporated
herein by reference.
See "Rate Proceedings" herein for
additional information.
See Note 1 of Notes to Financial Statements and "Results of Operations,"
subcaption "Other Items" in "Management's Discussion and Analysis of Financial Condition and Results
of Operations" subcaption "Liquidity and Capital Resources--Utility
Operations--Capital Resources" in the January 26, 199630, 1998 Form 8-K Reports, which
are incorporated herein by reference, for information concerning AFUDC.
5
regarding the capital
resources of ComEd.
Unregulated Operations
Unicom has approved capital expenditures for the years 1996-981998 of approximately $100$92
million for Unicom Thermal,UT Holdings, primarily representing the
construction costsrelated to an expansion of two of its four
Chicago district cooling facilities, the related distribution piping and
plants in the city of Chicago.
Construction of its first district cooling facility was completed in May 1995
and cost approximately $30 million. Unicom Thermal began construction on two
additional cooling facilities in 1995.other cities. As of December 31, 1995, Unicom
Thermal's1997, UT Holdings' purchase
commitments, principally related to construction, were approximately $35 million.$11
million and Unicom Thermal's construction expenditures during
1995Energy Services' purchase commitments were approximately $31$8
million.
Unicom expects to obtain funds to invest in its unregulated subsidiaries
principally from dividends received on its ComEd common stock and from bank
borrowings. While the amount of dividends on ComEd common stock is expected to
be greater than the amount of dividends on Unicom common stock, theThe availability of suchComEd's dividends to Unicom is dependent on
ComEd's financial performance and cash position. Other forms of financing by
ComEd ofto Unicom or the unregulated subsidiaries of Unicom, such as loans or
additional equity investments, (nonenone of which is expected),expected, would be subject to
the prior approval ofby the ICC.
7
Unicom Enterprises has a $200 million credit facility which will expire in
1998,November 1999, of which $158$40 million was unused as of February 29, 1996.December 31, 1997. The
credit facility can be used by Unicom Enterprises to finance investments in
unregulated energy-related businesses and projects, including UT Holdings and Unicom Thermal,Energy
Services, and for general corporate purposes. The credit facility is
guaranteed by Unicom and includes certain covenants with respect to Unicom'sUnicom and
Unicom Enterprises' operations. Interest rates for borrowings under the credit
facility are set at the time of a borrowing and are based on either a prime
interest rate or a floating rate bank index plus a spread which varies with
the credit rating of ComEd's outstanding first mortgage bonds. See Note 1013 of
Notes to Financial Statements in Unicom's January 26, 199630, 1998 Form 8-K Report,
which is incorporated herein by reference, for additional information
regarding certain covenants with respect to Unicom'sUnicom and Unicom Enterprises'
operations.
The foregoing paragraphs in this "Construction Program" section include
forward-looking statements with respect to the future levels of capital and
operation and maintenance expenditures which are necessarily based upon
assumptions regarding estimated costs and availability of materials and
services as well as contingencies. Unforeseen events or conditions may require
changes in the scope of work with consequent changes in the timing and level of
the projected expenditures.RATE MATTERS
In addition, changes in laws and regulations, or
their interpretation and enforcement, can affect the scope of certain projects,
the manner in which they are undertaken and the costs associated therewith.
While ComEd gives consideration to such factors in developing its budgets, such
consideration cannot predict the course of future events or anticipate the
interaction of multiple factors beyond management's control upon project timing
and cost. Consequently, actual results could differ materially from those
described.
RATE PROCEEDINGS
ComEd's revenues, net income, cash flows and plant carrying costs have been
affected directly by various rate-related proceedings. During 1993, ComEd was
involved in a number of proceedings concerning its rates. The uncertainties
associated with such proceedings and related issues, among other things, led to
the Rate Matters Settlement and the Fuel Matters Settlement in late 1993 (which
are discussed below).
Settlements Relating to Certain Rate Matters
Under the Rate Matters Settlement, effective as of November 4, 1993, ComEd
reduced its rates by approximately $339 million annually and refunded
approximately $1.26 billion (including revenue
6
taxes), plus interest at five percent on the unpaid balance, through
temporarily reduced rates over a refund period which ended in November 1994
(followed by a reconciliation period of five months). ComEd had previously
deferred the recognition of revenues during 1993 as a result of developments in
the proceedings related to a 1991 ICC rate order, which resulted in a reduction
to 1993 net income of approximately $160 million or $0.75 per common share. The
recording of the effects of the Rate Matters Settlement in October 1993 reduced
1993 net income by approximately $292 million or $1.37 per common share, in
addition to the approximately $160 million effect of the deferred recognition
of revenues and after the partially offsetting effect of recording
approximately $269 million or $1.26 per common share in deferred carrying
charges, net of income taxes, authorized in the Remand Order.
Under the Fuel Matters Settlement, effective as of December 2, 1993, ComEd
paid approximately $108 million (including revenue taxes) to its customers
through temporarily reduced collections under its fuel adjustment clause over a
twelve-month period which ended in November 1994. The recording of the effects
of the Fuel Matters Settlement in October 1993 reduced 1993 net income by
approximately $62 million or $0.29 per common share.
Other Rate Matters
On January 9, 1995, the ICC issued its Rate Order in the proceedings relating
to ComEd's February 1994 rate increase request. The Rate Order provides,provided, among
other things, for (i) an increase in ComEd's total revenues of approximately $301.8$302
million (excluding add-on revenue taxes) or 5.2%, on an annual basis,
including a $303.2 million increase in base rates, (ii) the collection of
municipal franchise costs as an adder to base rates until May 1, 1995, when
ComEd began collecting such costs prospectively on an individual municipality
basis through a rider, and (iii) the use of a rider, with annual review
proceedings, to pass on to ratepayers increases or decreases in estimated costs
associated with the decommissioning of ComEd's nuclear generating units. See
"Depreciation and Decommissioning" in Note 1 of Notes to Financial Statements
in the January 26, 1996 Form 8-K Reports for information related to the level
of decommissioning cost collections allowed in the Rate Order and subsequent
rider proceedings. The ICC also determined that the Units were 100% "used and
useful" and that the previously determined reasonable costs of such Units, as
depreciated, should be included in full in ComEd's rate base.basis. The rates
provided in the Rate Order became effective on January 14, 1995; however, they
are being collected subject to refund as a result of subsequent judicial
action. As a result of December 31, 1995, electric operating revenuesa May 30, 1997 decision of approximately
$319 million (excluding revenue taxes) are subject to refund. Intervenors and
ComEd have filed appeals ofthe Illinois Appellate
Court, the Rate Order withhas been remanded to the IllinoisICC for the purpose of
providing further analysis on two issues: (i) the manner in which certain
costs are recovered and which customers should pay those costs, and (ii) the
proper rate of return on common equity for ComEd. ComEd believes that the ICC
can satisfy the Appellate Court.Court's remand directions on the basis of the
existing record from the ICC proceedings which led to the Rate Order. An ICC
Hearing Examiner issued a proposed order in January 1998 which, if adopted by
the ICC, would uphold the Rate Order and the associated $302 million revenue
increase on an annual basis. A decision is expected early in the second
quarter of 1998. See "Business and Competition" belowNote 4 of Notes to Financial Statements in the January
30, 1998 Form 8-K Reports, which are incorporated herein by reference, for
additional information.
See "Changes in the Electric Utility Industry--The 1997 Act" above for
information regarding ComEd's announcement of certain customer initiatives in December 1995.the 1997 Act.
FUEL SUPPLY
The kilowatthour generation of ComEd and the Indiana Company for 19951997 was
provided from the following fuel sources: nuclear 73%57%, coal 24%39% and natural
gas 3%4%. The lower nuclear generation as a percentage of total generation for
1997, as compared to recent prior years, is primarily due to outages at
certain of ComEd's nuclear generating stations. See "Regulation--Nuclear"
below for information regarding outages at certain of ComEd's nuclear
generating stations.
Nuclear Fuel
ComEd has uranium concentrate inventory and supply contracts and subsidiary
resources sufficient to
meet all of its uranium concentrate requirements through 19971999 and portions of
its uranium concentrate requirements for periods beyond 1997.1999. ComEd's
contracted conversion services are sufficient to meet all of its uranium
conversion requirements through 1998.1998 and portions of 1999. All of ComEd's
enrichment requirements have been contracted through 2003 and portions of its
enrichment requirements for through September 1999.periods beyond 2003. Commitments for fuel
fabrication have been obtained for ComEd's nuclear units at least through
1999.2005. ComEd does not anticipate that it will have any difficulty in
negotiating contracts for uranium concentrates, conversion, enrichment and
fuel fabrication services for its remaining requirements.
7Under the Energy Policy Act of 1992, investor-owned electric utilities that
have purchased enrichment services from the DOE are being assessed amounts to
fund a portion of the cost for the decontamination and decommissioning of
uranium enrichment facilities owned and previously operated by the DOE.
ComEd's portion of such assessments is estimated to be approximately $16
million per
8
year (to be adjusted annually for inflation) to 2007. The Act provides that
such assessments are to be treated as a cost of fuel. See "Regulation," subcaption "Nuclear"Note 1 of Notes to
Financial Statements under "Nuclear Fuel" in the January 30, 1998 Form 8-K
Reports, which are incorporated herein by reference, for information related
to the accounting for such costs.
See "Regulation--Nuclear" below for information concerning the disposal of
radioactive waste.
Coal
ComEd burns low sulfur western coal at all of its coal-fired stations.
ComEd's present policy is to maintain a coal inventory of at least 30 to 45 days of
high utilization. As of February 29, 1996,28, 1998, coal inventories approximated 3745
days. The average cost per ton of coal consumed by ComEd and the Indiana
Company for the years 1993, 19941997, 1996 and 1995, including transportation charges,
was $49.42,
$39.50$38.47, $41.16 and $41.72, respectively.
Compared to other utilities, ComEd has relatively low average fuel costs as
a result of its reliance predominantly on lower cost nuclear generation.
ComEd's coal costs, however, are high compared to those of other utilities.
ComEd's western coal contracts and its rail contracts for delivery of the
western coal provide for the purchase of certain coal at prices substantially
above currently prevailing market prices, and ComEd has significant purchase
commitments under its contracts. In addition, as of December 31, 1995,1997, ComEd
had unrecovered fuel costs in the form of coal reserves of approximately $448$282 million. In prior years, ComEd's commitments for the
purchase of coal exceeded its requirements. Rather than take all the coal it
was required to take, ComEd agreed to purchase the coal in place in the form
of coal reserves. For additional information concerning ComEd's coal purchase
commitments, see "Construction Program," subcaption "UtilityProgram--Utility Operations" above. For
additional information regarding ComEd's fuel reconciliation proceedings and coal reserves, see "Fuel Adjustment Clause" below and NotesNote 1 2 and 21 of Notes to
Financial Statements in the January 26, 199630, 1998 Form 8-K Reports.Reports, which are
incorporated herein by reference.
Oil and Gas
ComEd's fast-start peaking units use middle distillate oils. Approximately
half of this capacity can also be fueled with natural gas. ComEd's 2,698,000
kilowatt Collins stationStation is fueled with natural gas and residual oil. ComEd
purchases oil and gas in the spot market as needed. The conversion of threefour of
the five units at Collins stationStation to dual fuel capability (residual oil and
natural gas) was completed during 1994 and a fourth1996 and conversion of the fifth
unit is currently being
converted.was completed in 1997. ComEd has a contract for the delivery and storage
of natural gas from gas pipelines to Collins stationStation, which expires in 2003.
Fuel Adjustment Clause
Through itsThe FAC provided for the recovery of changes in fossil and nuclear fuel
adjustment clause, ComEd recovers from its customerscosts and the cost of the fuel used to generate electricity andenergy portion of purchased power costs as compared to the fuel
and purchased energy costs included in ComEd's base rates. The amounts collected under the
fuel adjustment clause are subject to reviewAs authorized by
the ICC, ComEd had recorded under or overrecoveries of allowable fuel and
energy costs which, under the Illinois Public UtilitiesFAC, were recoverable or refundable in
subsequent months. Pursuant to an option contained in the 1997 Act, is requiredComEd
filed a tariff on December 16, 1997 to hold annual public hearingseliminate its FAC as of January 1,
1997. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations," subcaption "Changes in the Electric Utility Industry--
Accounting Effects Related to reconcile the collected amounts with the actual cost of fuel and power
prudently purchased. In the event that the collected amounts exceed such actual
cost, then the ICC can order that the excess be refunded.
For additional information concerning ComEd's fuel reconciliation proceedings
and coal reserves, see Notes 1 and 2 of Notes to Financial Statements1997 Act" in the January 26, 199630, 1998 Form 8-K
Reports.Reports, which are incorporated herein by reference, for additional
information regarding the effects of eliminating the FAC. Also see
"Regulation--Nuclear" below concerning FAC reconcililation proceedings for the
years 1994 and 1996.
9
REGULATION
ComEd and the Indiana Company are subject to state and federal regulation in
the conduct of their respective businesses, including the operations of
Cotter. Such regulation includes rates, securities issuance, nuclear
operations, environmental and other matters. Particularly in the cases of
nuclear operations and environmental matters, such regulation can and does
affect operational and 8
capital expenditures. ComEd is subject to regulation by
the ICC as to rates and charges, issuance of most of its securities, (other than debt securities maturing within
twelve months), service
and facilities, classification of accounts, transactions with affiliated
interests, as defined in the Illinois Public Utilities Act, and other matters.
In addition, the ICC in certain of its rate orders has exercised jurisdiction
over ComEd's environmental control program. See "Changes in the Electric
Utility Industry--The 1997 Act" above for information regarding the 1997 Act.
ComEd is subject to the jurisdiction of the FERC with respect to the
issuance of debt securities maturing within twelve months.certain of its securities. ComEd is also subject to the
jurisdiction of the FERC and the DOE under the Federal Power Act with respect
to certain other matters, including the sale for resale of electric energy and
the transmission of electric energy in interstate commerce, and to the
jurisdiction of the DOE with respect to the disposal of spent nuclear fuel and
other radioactive wastes. See "Changes in the Electric Utility Industry--
Federal Regulation" above for information regarding the FERC Order and the
Federal Energy Policy Act of 1992.
Unicom is a public utility holding company, as defined by the Public Utility
Holding Company Act of 1935, because of its majority ownership of ComEd's
common stock,
of ComEd, and ComEd is a public utility holding company as defined in such
Act because of its ownership of the Indiana Company. However, both Unicom and
ComEd are exempt from most provisions of such Act.
The Indiana Company, an "affiliated interest" of ComEd within the meaning of
the Illinois Public Utilities Act, is subject to regulation by the Indiana
Utility Regulatory Commission and to the jurisdiction of the FERC, the DOE and
federal and state of Indiana pollution control and other agencies.
Nuclear
The IDNS has jurisdiction over certain activities in Illinois relating to
nuclear power and safety, and radioactive materials. Effective June 1, 1987,
the IDNS replaced the NRC as the regulator and licensor of certain source, by-
product and special nuclear material in quantities not sufficient to form a
critical mass, including such material contained in various measuring devices
used at fossil-fuel power plants. The IDNS has promulgated regulations which
are substantially similar to the corresponding federal regulations. The IDNS
also has authority to license a low-level radioactive waste disposal facility
and to regulate alternative methods for disposing of materials which contain
only trace amounts of radioactivity.
Under the Nuclear Waste Policy Act of 1982, the DOE is responsible for the
selection and development of repositories for, and the disposal of, spent
nuclear fuel and high-level radioactive waste. ComEd, as required by that Act,
has signed a contract with the DOE to provide for the disposal of spent
nuclear fuel and high-level radioactive waste from ComEd's nuclear generating
stations
beginning not later thanstations. That contract provided for acceptance by the DOE of such materials
to begin in January 1998; however, this delivery schedulethat date was not met by the DOE and is
expected to be delayed significantly. ItThe DOE's current estimate for opening a
facility to accept such waste is not certain when the DOE will
accept high-level radioactive waste from ComEd and other operators of nuclear
power plants. Significant legislation, in both the House of Representatives and
the Senate, would fundamentally change the nation's spent fuel management
program by creating a federal interim storage facility which could begin
accepting spent nuclear fuel as early as 1998. Delivery to the interim facility
could be accomplished using existing technology.2010. Extended delays in spent nuclear fuel
acceptance by the DOE would lead to ComEd's consideration of costly storage
alternatives. The contract with the DOE requires ComEd to pay the DOE a one-timeone-
time fee applicable to nuclear generation through April 6, 1983 of
approximately $277 million, with interest to date of payment, and a fee
payable quarterly equal to one mill per kilowatthour of nuclear-generated and
sold electricity after April 6, 1983. As provided for under the contract,
ComEd has elected to pay the one-time fee, with interest, just prior to the
first delivery of spent nuclear fuel to the DOE. The costs incurred by the DOE
for disposal activities will be paid out of fees charged to owners and
generators of spent nuclear fuel and high-level radioactive waste. ComEd has
primary responsibility for the interim storage of its spent nuclear fuel.
ComEd's
capability to store spent fuel is more than adequate for some years to come.
Dresden stationStation has spent fuel capacity through the 9
year 2001, Zion stationStation
has capacity for all its spent fuel, Quad Cities Station has spent fuel
capacity through 20052006 and all of the other stations have spent fuel capacity
through at least 2009. In addition,2008. ComEd is developing on site dry cask spent fuel storage
for Dresden Unit 1, at a budgeted costwhich is expected to be funded by the external
decommissioning trusts. See "Depreciation and Decommissioning" under Note 1 of
$21
million.Notes to Financial
10
Statements in the January 30, 1998 Form 8-K Reports, which are incorporated
herein by reference, for information regarding the external decommissioning
trusts. The Dresden Unit 1 facilitydry storage canisters will use existing technology procured to meet the federal
requirements for both storage and transportation of spent nuclear fuel. The
storage canisters could be used by 1999. Meeting other spent fuel storage
requirements beyond the years stated above could require new and separate
storage facilities. The costs for
ComEd's other nuclear units have not been determined.
The federal Low-Level Radioactive Waste Policy Act of 1980 provides that
states may enter into compacts to provide for regional disposal facilities for
low-level radioactive waste and restrict use of such facilities to waste
generated within the region. Between July 1, 1994 and July 1, 1995, there were
no commercial operating sites in the United States for the disposal of low-
level radioactive waste available to ComEd. However, the Barnwell, South
Carolina low-level radioactive waste site was reopened on July 1, 1995 and is
available to ComEd. ComEd has entered into an agreement with the Barnwell site
operator and began shipping waste to Barnwell on August 17, 1995. Illinois has entered into a compact with the
state of Kentucky, which has been approved by Congress as required by the
Waste Policy Act. Neither Illinois nor Kentucky currently has an operational
site, and onenone is currently not expected to be operational until after the year
2000.2011. ComEd has temporary on-site storage capacity at its nuclear generating
stations for a limited amount of low-level radioactive waste.waste and has been
shipping such waste to a low-level radioactive waste site in Barnwell, South
Carolina. ComEd anticipates the possibility of continuing difficulties in
disposing of low-level radioactive waste. Since the reopening and
availability of the Barnwell site, ComEd continues to reevaluateevaluate its
options.options relating to the disposal of low-level radioactive waste.
ComEd is subject to the jurisdiction of the NRC with respect to its nuclear
generating stations. The NRC regulations control the granting of permits and
licenses for the construction and operation of nuclear generating stations and
subject such stations to continuing review and regulation. The NRC review and
regulatory process covers, among other things, operations, maintenance, and
environmental and radiological aspects of such stations. The NRC may modify,
suspend or revoke licenses and impose civil penalties for failure to comply
with the Atomic Energy Act, the regulations under such Act or the terms of
such licenses.
During 1991Nuclear operations have been, and 1992,remain, an important focus of ComEd--given
the NRC placedimpact of such operations on overall O&M expenditures and the ability of
nuclear power plants to produce electric energy at a relatively low marginal
cost. ComEd operates a large number of nuclear plants, ranging from the older
Dresden and Quad Cities Stations to the more recently completed LaSalle, Byron
and Braidwood Stations, and is intent upon safe, reliable and efficient
operation. These plants were constructed over a period of time in which
technology, construction procedures and regulatory initiatives and oversight
have evolved, with the result that older plants generally require greater
attention and resources to meet regulatory requirements and expectations, as
well as to maintain operational reliability. As discussed in "Changes in the
Electric Utility Industry--ComEd's Response to Regulatory Changes" above,
ComEd has ceased nuclear generation operations at its Zion Station.
ComEd's Dresden, Zion and DresdenLaSalle nuclear generating stations respectively,are currently
on itsthe NRC's list of plants to be monitored closely. Although Zion
station was removed from that list in February 1993,require increased regulatory scrutiny by the
NRC. Dresden station remainsStation has been on the list. In June 1995,list since 1992 and LaSalle and Zion
Stations were added in January 1997. On January 21, 1998, the NRC reportedstated in a
public meeting that overalthough Dresden Station has demonstrated sustained
improved performance that would warrant removal from the past yearlist, continued
evidence of cyclical and inconsistent performance at ComEd's other nuclear
generating stations indicated removal of Dresden was cyclical,Station from the list would
not be appropriate at that plant material condition needed to be improvedtime. The NRC also acknowledged improvements at
Dresden andLaSalle Station but concluded that a more effectivesubstantial amount of work management system was needed to deal
withremains and
the corrective maintenance backlog. In January 1996,plant should remain on the NRC noted
improvement but indicated that certain of the same concerns continue to exist.list. The NRC also stated that, based on a
determination made prior to the effectivenessannouncement of the recent improvement efforts
mustcessation of power
operations at the station, Zion should remain on the list. The listing of the
plants does not prevent ComEd from operating the generating units; however, it
does mean that the NRC will devote additional resources to monitoring ComEd's
operating performance and that ComEd will need to work to demonstrate to the
NRC the sustainability of improvements which it believes it has undertaken and
is continuing to implement. Also at the meeting, the NRC noted a declining
performance trend at Quad Cities Station. In a meeting on March 3, 1998, the
NRC stated that weaknesses were observed with respect to certain operations,
maintenance and engineering activities
11
at Quad Cities Station. The NRC has indicated that it is monitoring ComEd's
ability to manage its nuclear operations in their entirety and that the
performance at any one facility will be sustained. In January 1994, ComEd was notifiedviewed by the NRC in context with the
performance of ComEd's nuclear generating group as a whole.
In January 1997, the NRC took the unusual step of requiring ComEd to submit
information to allow the NRC to determine what actions, if any, should be
taken to assure that ComEd can safely operate its six nuclear generating
stations (prior to the permanent cessation of nuclear generation operations at
Zion Station) while sustaining performance improvement at each site. The
request also required ComEd to submit information regarding the criteria that
it has established, or planned to establish, to measure performance and to
explain ComEd's LaSalle County and Quad-Citiesproposed actions if the criteria were not met. The request
stated the NRC staff's concerns with the "cyclical safety performance of ComEd
nuclear stations, were placed" noting the presence on the list of plants with
adverse performance trends. ComEd was informed that require
increased regulatory scrutiny by the NRC of Dresden, LaSalle and Zion Stations
at various times during the past 10 years. It also noted concerns about
LaSalle Countyregarding
"ComEd's ability to establish lasting and effective programs that result in
sustained performance improvement." The problems identified by the NRC are
consistent with weaknesses that had been identified in station included, among other matters, deficient radiation
worker practices,self-
assessments initiated by ComEd, and management had already undertaken to
develop and implement programs designed to address these issues. ComEd
submitted a response to the NRC on March 28, 1997 and the NRC indicated in an
April 25, 1997 public meeting with representatives of ComEd management that
ComEd's response was generally adequate to demonstrate ComEd's ability to
operate its nuclear generating stations while sustaining performance
improvements. In a November 4, 1997 meeting with the NRC staff, the NRC
indicated that it believes ComEd's nuclear performance has shown improvement,
but that it is too early to conclude that lasting improvement has been
achieved. The NRC noted, as an exception to ComEd's general improving and
sustained performance in its nuclear operations, concerns regarding ComEd's
engineering efforts to resolve longstanding fire protection issues at the Quad
Cities Station. The NRC and representatives of ComEd's management have met and
will continue to meet periodically in the future, to follow-up on these
matters.
INPO, a nuclear power industry funded organization, also has been critical
of ComEd's nuclear operations and the progress made by ComEd at correcting
problems INPO previously identified. In the past, INPO has raised concerns
with Quad-Cities station included, among
other matters, deficiencies in the conditionrespect to management and performance of certain station equipmentComEd's nuclear operations,
including accountability and the effectiveness of efforts aimed at engaging
the operators ofworkforce in the units in identifyingimprovement process. ComEd continues to address INPO's
concerns.
ComEd has devoted, and respondingintends to certain operational problems. In Februarycontinue to devote, significant resources
to the management and June 1995, the NRC concluded
that LaSalle County and Quad-Cities, respectively, had arrested the adverse
trends in most areas and "normal" designation has been reestablished.
Because of the age of Zion, Dresden and Quad-Cities stations, ComEd
anticipates continued expenditures in order to improve reliability and to meet
NRC regulatory expectations. Beginning in late 1992, ComEd restructured its
managementoperations of its nuclear operations divisiongenerating stations. Over the
past several years, it has increased and sincereinforced management with managers
drawn from other utilities which have resolved similar operational and
performance issues, including the appointment of a new Chief Nuclear Officer
in late 1997. It also has sought to identify, anticipate and address operating
and performance issues in a safe, cost-effective manner, while seeking to
improve the availability and capacity factors of its nuclear generating units.
ComEd's activities, with respect to its nuclear generating stations, have
included improvements in operating and personnel procedures and repair and
replacement of equipment and can result in longer unit outages. LaSalle Units
1 and 2 and Quad Cities Units 1 and 2 are currently not operating. It
currently is expected that time has committed
additional resourcesLaSalle Unit 1 will restart by the end of the third
quarter of 1998 and LaSalle Unit 2 is expected to restart by the end of the
first quarter of 1999. Both units at Quad Cities Station are expected to
return to service by approximately the end of the second quarter of 1998. In
each case the restart of these units requires the resolution of issues with
the NRC.
The LaSalle Station outage and an outage at Zion Station were part of
several outages of nuclear and fossil generating stations that several
utilities operating in the Midwestern power grid (including ComEd) were
expecting and experienced during 1997. Although ComEd met its customers'
electricity
12
demands, the expectation of the NERC, prior to the stations' operations.beginning of the summer,
had been that there could have been electric energy shortages during summer
peak demand periods due to generating station outages in the Midwestern power
grid and transmission limitations on delivering power from neighboring
systems. In addition,response to these regional circumstances and expectations, ComEd
increased the availability of its remaining nuclear and fossil generating
capacity, reinforced transmission capacity, negotiated the purchase of power
and related transmission service from third parties, and worked with a number
of customers to manage the use and demand for power. ComEd is evaluating and
the NERC will be analyzing electric reliability and the potential for electric
energy shortages for the summer of 1998 in light of the potential for
continued outages of nuclear plants operated by ComEd and other utilities in
the Midwestern power grid.
Generating station availability and performance during a year may be issues
in fuel reconciliation proceedings in 10
assessing the prudence of fuel and
purchased power purchasescosts during such year. Final ICC orders have been issued in
fuel reconciliation proceedings for years prior to 1994; however, certain intervenors have appealed1994 and for the ICC order in the 1989 fuel
reconciliation proceedings on issues relating to nuclear station performance.year 1995.
In 1996, an intervenor filed testimony in the fuel reconciliation proceeding
for 1994 seeking a refund of approximately $90 million relating to nuclear
station performance. In accordance with a commitment toMarch 1998, the NRC, ComEd examined its operating
boiling water nuclear generating units in 1983 to determine the existence or
extent of inter-granular stress corrosion in certain of the large diameter
piping in those units. Inter-granular stress corrosion was discoveredICC Staff also filed testimony in the
Dresdenfuel reconciliation proceeding for 1994 proposing a refund of $36 million. The
1997 Act provides that the fuel reconciliation proceedings for 1994 and Quad-Cities units.1996
must be concluded by the end of 1998. If refunds are required in these
proceedings, the refunds could have a material adverse effect on results of
operations. The 1997 Act also provides that, because ComEd replacedeliminated its FAC
effective January 1, 1997, the stainless steel piping
susceptible to stress corrosion at Dresden Unit 3. ComEd believesICC shall not conduct a fuel reconciliation
proceeding for the remedial
actions taken to minimizeyear 1997 or any subsequent years. See "Changes in the
impact of stress corrosion cracking on BWR
stainless steel reactor coolant piping have been successfully completed on
Dresden Units 2Electric Utility Industry" and 3, Quad-Cities Units 1 and 2 and LaSalle County Units 1 and
2. Future work on this piping will consist of routine inspections and repairs.
As a result"Fuel Supply--Fuel Adjustment Clause" above for
information regarding the elimination of ComEd's experience with the effects of inter-granular stress
corrosion of stainless steel materials in BWRs, an inspection, repair and
mitigation program of reactor vessel internals has been implemented. This
effort is intended to prevent non-budgeted costs and refueling outage
extensions resulting from unanticipated repairs occurring during a refueling
outage. For 1996, current estimated expenditures for mitigation systems at
Dresden, LaSalle County and Quad-Cities stations are $11.8 million, $6.5
million and $7.1 million, respectively. For 1997, estimated expenditures for
installation of mitigation systems for LaSalle County and Quad-Cities stations
are $1.6 million and $0.6 million, respectively.FAC.
ComEd has studied the possibility of having to replace the steam generators
at its Zion station. The initial studies were completed in 1991 and additional
follow-up studies are continuing. Based on the most recent findings, it will
not be necessary on a technical basis to replace the Zion steam generators
until at least the year 2005; however, ComEd is continuing to monitor the
extent of steam generator degradation and is continuing to study the timing and
economics of replacement. ComEd has also studied the replacement of the steam generators at Byron Unit 1 and
is replacing the steam generators at Braidwood Unit 1. The studies indicate that,
from a technical standpoint,See "Construction
Program--Utility Operations" above for additional information.
Based on ComEd's most recent study approved by the steam generators should be replaced and, from
an economic standpoint, the replacements should be performed at the earliest
possible time. The steam generator replacements are currently planned to be
completed prior to year-end 1999. The estimated replacementICC, decommissioning
costs, including the costscost of removal of the existing steam generators,decontamination and dismantling, are approximately $235
million for each unit. Approximately $355 million of expenditures is includedestimated to
aggregate $4.4 billion in the current 1996-98 construction program,current-year (1998) dollars, including an increase of
approximately $65 million approved by ComEd's Board of Directors in March 1996
in order to accelerate the planned replacements. The Board also authorized an
increase in certain nuclear operation and maintenance expenditures. See Unicom
and ComEd's Current Report on Form 8-K/A-1 dated March 14, 1996 for additional
information.a contingency
allowance. ComEd estimates that it will expend approximately $15$11.6 billion,
excluding anyincluding a contingency allowance, for decommissioning costs primarily during
the period from 2007 through 2032. Such costs which are estimated to aggregate $3.7
billion in current-year (1996) dollars, are expected to be funded by
external decommissioning trusts which ComEd established in compliance with
Illinois law and into which ComEd has been making annual contributions. Future
decommissioning cost estimates may be significantly affected by the adoption
of or changes to NRC regulations, as well as changes in the assumptions used
in making such estimates.estimates, including changes in technology, available
alternatives for the disposal of nuclear waste, and inflation. See Note 1 of
Notes to Financial Statements under "Depreciation and Decommissioning" in the
January 26, 199630, 1998 Form 8-K Reports, which are incorporated herein by reference,
for additional information regarding decommissioning costs.
During the year 1995,1997, civil penalties were imposed on ComEd by the NRC on fourten occasions
for violations of NRC regulations in amounts aggregating $300,000.$1,390,000. Since
January 1, 1996,1998, civil penalties were imposed on ComEd on twothree occasions for
violations of NRC regulations in amounts aggregating $100,000.$495,000. To ComEd's
knowledge, there are notwo current enforcement issues outstanding and under
review by the NRC.
11The IDNS has jurisdiction over certain activities in Illinois relating to
nuclear power and safety, and radioactive materials. Effective June 1, 1987,
the IDNS replaced the NRC as the regulator and licensor of certain source, by-
product and special nuclear material in quantities not sufficient to form a
critical mass, including such material contained in various measuring devices
used at fossil-fuel power plants. The IDNS does not regulate ComEd's nuclear
generating stations. The IDNS has promulgated
13
regulations which are substantially similar to the corresponding federal
regulations. The IDNS also has authority to license a low-level radioactive
waste disposal facility and to regulate alternative methods for disposing of
materials which contain only trace amounts of radioactivity.
The uranium mining and milling operations of Cotter are subject to
regulation by the state of Colorado and the NRC.
Environmental
ComEd and the Indiana Company areis subject to regulation regarding environmental matters by the United
States and by the states of Illinois, Indiana, Iowa and, in the case of Cotter,
Colorado, and by local jurisdictions where ComEd and the Indiana Company operate theiroperates its facilities. The
IPCB has jurisdiction over environmental control in the state of Illinois,
which includes authority to regulate air, water and noise emissions and solid
waste disposal, together with the Illinois EPA, which enforces regulations of
the IPCB and issues permits in connection with environmental control. The
U.S. EPA administers certain federal statutes relating to such matters. The
IPCB has published a proposed rule under which it would have the power to
regulate radioactive air pollutants under the Illinois Environmental
Protection Act and the Federal Clean Air Act Amendments of 1977.
Air quality regulations, promulgated by the IPCB as well as the Indiana and
Hammond Departments of Environmental Management in accordance with federal
standards, impose restrictions on the emission of particulates, sulfur
dioxide, nitrogen oxides and other air pollutants and require permits from the
respective state and local environmental protection agencies for the operation
of emission sources. Permits authorizing operation of ComEd's fossil-fueledfossil fuel
generating facilities subject to this requirement have been obtained and,
where such permits are due to expire, ComEd has, in a timely manner, filed
applications for renewal or requested extensions of the existing permits.
Under the Federal Clean Water Act, NPDES permits for discharges into
waterways are required to be obtained from the U.S. EPA or from the state
environmental agency to which the permit program has been delegated. Those
permits must be renewed periodically. ComEd and the Indiana Company either havehas NPDES permits for all
of theirits generating stations or havehas pending applications for such permits under
the current delegation of the program to the Illinois EPA or the Indiana Department of Environmental Management.EPA. ComEd is also
subject to the jurisdiction of certain pollution control agencies of the state
of Iowa with respect to the discharge into the Mississippi River from the Quad-Quad
Cities station.
In 1990, the Sierra Club filed suit in the U.S. District Court under Section
505 of the Federal Clean Water Act alleging violations of state of Illinois
water quality standards with respect to thermal effluents at ComEd's Fisk,
Crawford, Will County and Joliet generating stations. In 1991, the Sierra Club
and ComEd reached a settlement of this suit which was also approved by the
Court. Under the settlement, ComEd has agreed to perform an ecological study of
the thermal effluents discharged from the generating stations. Ultimately, this
study, which is scheduled to be completed in April 1996, may determine whether
the installation of closed cycle cooling facilities or operational restrictions
are necessary at one or more of these stations.
The Great Lakes Critical Programs Act of 1990 requires that, following the
issuance of guidance by the U.S. EPA, the states of Illinois and Indiana, among
others, adopt water quality standards, policies and procedures to assure
protection of the water quality of the Great Lakes. Water quality standards and
procedures that the states would be required to adopt are to be based on the
U.S. EPA's final guidance issued on March 13, 1995. ComEd is presently
following state activities to promulgate rules implementing the final guidance,
and assessing the extent to which such may impact certain ComEd facilities.
Ultimately, the new rules may require that ComEd install additional pollution
control equipment or restrict operations at its facilities that discharge,
either directly or indirectly, into Lake Michigan.Station.
The Clean Air Amendments require reductions in sulfur dioxide emissions from
ComEd's Kincaid station. The Clean Air Amendments also bar future utility
sulfur dioxide emissions except to the
12
extent utilities hold allowances for their emissions. Allowances which
authorize their holder to emit sulfur dioxide have been issued by the U.S. EPA
based largely on historical levels of sulfur dioxide emissions. These
allowances are transferable and marketable. ComEd's ability to increase
generation in the future to meet expected increased demand for electricity will
depend in part on the ability of ComEd and the Indiana Company to acquire
additional allowances or to reduce emissions below otherwise allowable levels
from their existing generating plants. In addition, the Clean Air Amendments
require studies to determine what controls, if any, should be imposed on
utilities to control air toxic emissions, including mercury. ComEd is currently
burning low sulfur coal at Kincaid station to meet Clean Air Act Phase I
requirements. ComEd will determine future compliance plans for Kincaid station
as necessary.
The Clean Air Amendments also require reductions in nitrogen oxide emissions from
ComEd's and the Indiana Company's fossil fuel generating units. OnIn January
26, 1996, the U.S. EPA issued a
final rule exempting existing sources inside the Chicago ozone non-attainment
area from further nitrogen oxide emission reductions; however, this exemption
is limited pending further studythe finalization of the U.S. EPA Clean Air Act, Section
110. The U.S. EPA issued a proposed rule in late 1997 which would mandate
reductions in nitrogen oxide emissions to address ozone transport. The Illinois EPA is also consideringtransport problems in
much of the eastern United States. In its current form, the proposed rule
would require electric utility sources in a 22-state region to meet a nitrogen
oxide emission reductions at ComEd generating stations outside the Chicago ozone non-
attainment area also due to ozone transport.limitation of 0.15 lbs/MBtu. Under the Acid Rain program, the
U.S. EPA will prepareprepared nitrogen oxide emission regulations that would apply to all of
ComEd's boilers with a compliance date of January 1, 2000. These regulations
were proposed on January 19, 1996 and include limits for cyclone and tangentially fired boilers.boilers of 0.86 and 0.40
lbs/mm Btu, respectively.
CERCLA provides for immediate response and removal actions coordinated by
the U.S. EPA to releases of hazardous substances into the environment and
authorizes the U.S. Government either to clean up sites at which hazardous
substances have created actual or potential environmental hazards
14
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 made strictly,
jointly and severally liable for the cleanup costs of waste at sites, most of
which are listed by the U.S. EPA on the NPL. These responsible parties can be
ordered to perform a cleanup, can be sued for costs associated with a U.S. EPA
directed cleanup, may voluntarily settle with the U.S. Government concerning
their liability for cleanup costs, or may voluntarily begin a site
investigation and site remediation prior to listing on the NPL under state
oversight. Various states, including Illinois, have enacted statutes which
contain provisions substantially similar to CERCLA. ComEd and its subsidiaries
are or are likely to become parties to proceedings initiated by the U.S. EPA,
state agencies and/or other responsible parties under CERCLA with respect to a
number of sites, including MGP sites, or may voluntarily undertake to
investigate and remediate sites for which they may be liable under CERCLA.
MGPs manufactured gas in Illinois from approximately 1850 to 1950. ComEd
generally did not operate MGPs as a corporate entity but did, however, acquire
MGP sites as part of the absorption of smaller utilities. Approximately half
of these sites were transferred to Northern Illinois Gas Company as part of a
general conveyance in 1954. ComEd also acquired former MGP sites as vacant
real estate on which ComEd facilities have been constructed. To date, ComEd
has identified 44 former MGP sites for which it may be liable for remediation.
ComEd presently estimates that its costs of former MGP site investigation and
remediation will aggregate from $25 million to $150 million in current-year
(1996)(1998) dollars. It is expected that the costs associated with investigation
and remediation of former MGP sites will be incurred over a period of approximately
20not to
exceed 30 years. Because ComEd is not able to determine the most probable
liability for such MGP costs, in accordance with accounting standards, a
reserve of approximately $25 million was recordedhas been included in other noncurrent liabilities on
the Consolidated Balance Sheets in the January 30, 1998 Form 8-K Reports,
which are incorporated herein by reference, as of December 31, 1995,1997 and 1996,
which reflects the low end of the range of ComEd's estimate of the liability
associated with former MGP sites. In addition, as of December 31, 1995,1997 and
1996, a reserve of $8 million was recordedhas been included in other noncurrent
liabilities on the Consolidated Balance Sheets in the January 30, 1998 Form 8-
K Reports, which are incorporated herein by reference, representing ComEd's
estimate of the liability associated with cleanup costs of remediation sites
other than former MGP sites. Approximately half of this reserve relates to
anticipated cleanup costs associated with a property formerly used as a
tannery which was purchased by ComEd in 1973. Unicom and ComEd presently
estimate that ComEd's costs of investigating and remediating
13
the former MGP
and other remediation sites, pursuant to CERCLA and state environmental laws,
will not have a material impact on the financial position or results of
operations of Unicom or ComEd. These cost estimates are based on currently
available information regarding the responsible parties likely to share in the
costs of responding to site contamination, the extent of contamination at
sites for which the investigation has not yet been completed and the cleanup
levels to which sites are expected to have to be remediated.
In 1991, the U.S. Government filed a complaint in U.S. District Court
alleging that ComEd and four other defendants are PRPs for remediation costs
associated with surface, soil and groundwater contamination alleged to have
occurred from the disposal by other persons of hazardous wastes at a site
located near ComEd's Byron station near Byron, Illinois. The U.S. Government
alleges that a portion of the site is owned by ComEd. The U.S. Government is
presently seeking reimbursement from the PRPs for past study and response costs
associated with the site of approximately $7 million. ComEd is currently
pursuing a negotiated settlement and is not actively pursuing cost recovery
from other PRPs at this time.
In 1992, the U.S. EPA notified ComEd and four other companies, including the
site operator, that they were PRPs for the costs associated with the
investigation and removal of contaminated soil at the Elgin Salvage and Supply
site in Elgin, Illinois. In 1993, the U.S. EPA issued an order under Section
106 of CERCLA to ComEd and the other parties to investigate and remove the
contamination from the site. ComEd sent substantial amounts of scrap cable and
other scrap metal to the site. The site investigation and remediation was
completed in March 1995 at a cost of approximately $9 million. The site
operator claims to be unable to fund more than a small share of the removal
costs. Consequently, the other parties have agreed to an interim allocation of
the removal costs. The interim agreement allocates 55% of the removal costs to
ComEd. ComEd and the other PRPs have filed a cost recovery action against the
site operator and the site owners to require that they provide their share of
the remediation costs. ComEd and the site owner are in litigation with several
insurance companies for claims. Also, additional PRPs have responded to
informational requests concerning their potential liability at the site. Their
participation should reduce ComEd's percent allocation of such costs. Some of
ComEd's electrical equipment containing PCBs was sent to scrap and salvage
facilities and, as a result, ComEd may be liable for penalties and for the
costs of cleanup of those facilities.
In 1990, the IPCB replaced existing landfill regulations with new, more
stringent design and performance standards. These regulations are expected to
increase the cost to ComEd for disposal of coal combustion by-products at its
Joliet station. At Joliet, an existing landfill utilized for disposal of coal
ash may require the installation by 1997 of engineered retrofits designed to
protect groundwater. ComEd has requested exemptions from certain of the new
regulations from the IPCB. If its request is denied, then alternative landfill
siting, commercial disposal, or retrofitting of the existing facility could
result in significant increases in disposal expenditures.
The outcome of many of the regulatory proceedings referred to above, if not
favorable, could have a material adverse effect on Unicom and ComEd's future
business and operating results.
An unresolved issue is whether exposure to EMFs may result in adverse health
effects or damage to the environment. EMFs are produced by virtually all
devices carrying or utilizing electricity, including transmission and
distribution lines, as well as home appliances. If regulations are adopted
related to EMFs, they could affect the construction and operation of
electrical equipment, including transmission and distribution lines and the
cost of such equipment. ComEd cannot predict the effect on the cost of such
equipment or operations if new regulations related to EMFs are adopted. In the
absence of such regulations, EMFs have nonetheless become an issue in siting
facilities and in other land use contexts. Litigation has been filed in a
variety of locations against a variety of defendants, (including ComEd)including ComEd,
alleging that the presence or use of electrical equipment 14
has had an adverse
effect on the health of persons.persons or has caused a diminution in property values
of land adjacent to these facilities. If plaintiffs are successful in
litigation of this type and it becomes widespread, the impact on ComEd and on
the electric utility industry is not predictable, but could be severe.
15
From time to time, Unicom and its subsidiaries are, or are claimed to be, in
violation of or in default under orders, statutes, rules or regulations
relating to environmental controls and other matters, compliance plans imposed
upon or agreed to by them or permits issued by various state and federal
agencies for the construction or operation of their facilities. Unicom and
ComEd do not believe, so far as they now foresee, that such violations or
defaults will have a material adverse effect on their future business and
operating results, except for events otherwise described in thisthese Annual
ReportReports on Form 10-K, which could have such an effect.
See "Item 3. Legal Proceedings" regarding Cotter.
EMPLOYEES
The total number of employees of
Unicom and its subsidiary companies washad approximately 17,045 (of16,704 employees as of
December 31, 1997. ComEd had approximately 16,663 employees as of December 31,
1997 of which approximately 17,0259,140 ComEd employees were employed by
ComEd and the Indiana Company) at December 31, 1995. Of that amount,
approximately 9,323 employees of ComEd are represented by the IBEW
Local 15,
and approximately 162 employees of the Indiana Company are represented by the
United Steelworkers of America, Local 12502.15.
A new Collective bargaining agreements
with the unions expired on March 31, 1995. On October 30, 1995, ComEd declared
an impasse in the collective bargaining agreement negotiationsBargaining Agreement with Local 15 of
the IBEWbecame effective August
25, 1997, and implemented virtually all of the terms of its last offered
proposal prior to the impasse. On February 20, 1996, ComEd announced that it
had reached agreement with Local 15 of the IBEW with respect to the terms of a
new collective bargaining agreement. Union members are scheduled to vote on
ratification of the new agreement and ComEd will be notified of the results by
April 10, 1996. Subject to ratification by the union membership, the new
agreement provides, among other things, for a term expiring on September 30,
1997, a retroactive wage increase to April 1, 1995 (substantially all of which
had been accrued on ComEd's books as of DecemberMarch 31,
1995), a further2001. A previously negotiated general wage increase of approximately 2.7%1.5% was effective on
April 1, 1996 and1997, for all employees covered by the Collective Bargaining
Agreement. Additionally, a 1.5%general wage increase of 1.5% was effective October
13, 1997, and was applied on April 1,a retroactive basis to March 31, 1997. In addition, the agreement provides that
union employees are eligible to receive 1995 and 1996 incentive payments
dependent upon the achievement of certain corporate and individual goals and
reflects the previously implemented voluntary separation offer that was made
for employees who accepted and left ComEd's employ by year-end 1995. For the
termeach
of the agreement,remaining three years, a revision3% general wage increase will be granted to
employees covered by the provision relative to contracting work
was negotiated which will give ComEdCollective Bargaining Agreement, effective the
flexibility needed to maintain
operations following the employee reduction resulting from the voluntary
separation offer, as well as to smooth out the peaks and valleys in the labor
requirementsbeginning of the business. This flexibility will provide a stable work
environment for ComEd's employees. For additional information regarding the
effectspay period that includes April 1st of the previously implemented voluntary separation offer, see
"General," subcaption "Utility Operations" above.each such year.
The supplemental agreements covering life insurance, savings and investment
plan, healthcare coverage for medical, dental and visionhealth care plans are effective through September 30, 1997. In March 1995, the31, 2001. The
supplemental agreement covering pension benefits was ratified with an expiration date ofis effective through
September 30, 1999.
INTERCONNECTIONS
ComEd has interconnections for the transmission of electricity with Central
Illinois Light Company, Central Illinois Public Service Company, Illinois
Power Company, Indiana Michigan Power Company (a subsidiary of American
Electric Power Company), Interstate Power Company, MidAmerican Energy Company,
Northern Indiana Public Service Company, Wisconsin Electric Power Company and
Wisconsin Power and Light Company for the purpose of exchanging energy and for
other forms of mutual assistance.
15
ComEd and 1314 other Midwest power systems are regular members of MAIN, (whichwhich
also includes ten23 associate members and three5 affiliate members).members. The members have
entered into an agreement to work together to ensure the reliability of
electric power production and transmission throughout the area they serve.
ComEd joined with eight Midwestern utilities to form a regional Midwest ISO
in January 1998. See "Changes in the Electric Utility Industry--ComEd's
Response to Regulatory Changes" for additional information.
FRANCHISES
ComEd's franchises are, in general, deemed adequate to permit it to engage
in the business it now conducts.
In the city of Chicago, ComEd operates under a nonexclusive electric
franchise ordinance, effective January 1, 1992, and continuing in force until
December 31, 2020. ComEd derives
16
approximately one-third of its ultimate consumer revenues from customers
located within the city of Chicago. See "Item 3. Legal Proceedings" regarding
an arbitration proceeding initiated by the City of Chicago under its franchise
agreement with ComEd.
The electric business outside of the city of Chicago is conducted in
municipalities under nonexclusive franchises and, where required, under
certificates of convenience and necessity granted by the ICC. The following
tabulation summarizes, as of December 31, 19951997, the expiration dates of the
electric franchises held in 395 of the 396 municipalities outside of the city of
Chicago capable of granting franchises and in which ComEd currently provides
electric service.
ESTIMATED
NUMBER OF AGGREGATE
FRANCHISE EXPIRATION PERIODS MUNICIPALITIES POPULATION
- ---------------------------- -------------- ----------
1996-2006............................................. 4 108,0001998-2006............................................. 3 89,000
2007-2017............................................. 11 97,00010 95,000
2018-2028............................................. 3 4,000
2029-2039............................................. 1 *
2040 and subsequent years............................. 373 4,013,000376 4,127,000
No stated time limit.................................. 3 61,000
- --------
*Less than 1,000 people.
BUSINESS AND COMPETITION
The electric utility business has historically been characterized by retail
service monopolies in state or locally franchised service territories.
Investor-owned electric utilities have tended to be vertically integrated with
all aspects of their business subject to pervasive regulation. Although
customers have normally been free to supply their electric power needs through
self-generation, they have not had a choice of electric suppliers and self-
generation has not generally been economical.
The market place in which electric utilities like ComEd operate has become
more competitive as a result of technological and regulatory changes, and
competition is expected to intensify. Self-generation can be economical for
certain customers, depending on how and when they use electricity and other
customer-specific considerations. A number of competitors are currently seeking
to identify and do business with those customers. In addition, suppliers of
other forms of energy are increasingly competing to supply energy needs which
historically were supplied primarily or exclusively by electricity. Also, a
number of electric utilities (including utilities bordering ComEd's service
area) have announced plans to combine, or have combined, to achieve certain
size and operating efficiencies in response to expected changes in the market
place. Finally, both the state and federal regulatory framework under which
ComEd and other electric utilities have operated are under review. In recent
years, there has been increasing debate at the state and federal levels
regarding the structure and regulation of the electric utility industry. In
particular, these discussions have focused on whether certain aspects of the
industry, such as generation, could be more efficiently provided under a more
competitive scheme.
16
A central feature of the current debate over deregulation and changed
regulation in the electric utility industry is the extent to which electric
utilities will be permitted to recover so-called "stranded" or "strandable"
costs incurred to fulfill their duty to serve all of the electricity needs
within their service territories. These costs would be stranded to the extent
that market-based rates would be insufficient to allow for full recovery of the
investments.
ComEd cannot estimate its strandable investment with any degree of accuracy
at this time because of the number of variables involved. ComEd, however, is
taking steps, such as aggressive cost-cutting measures and additional
depreciation, to minimize its potential exposure. The regulatory and
legislative initiatives that ComEd has proposed, described below, contemplate a
full recovery of ComEd's costs to meet its duty to serve.
The Energy Policy Act of 1992 has had a significant effect on companies
engaged in the generation, transmission, distribution, purchase and sale of
electricity. This Act, among other things, expands the authority of the FERC to
order electric utilities to transmit or "wheel" wholesale power for others, and
facilitates the creation of non-utility electric generating companies. In March
1995, the FERC issued a NOPR seeking comments on proposals intended to
encourage a more competitive wholesale electric power market. The NOPR
addresses both open access transmission and stranded cost issues. ComEd is
unable to predict the structure and effect of any rule that the FERC may
ultimately adopt based upon the NOPR.
ComEd is facing increased competition from several non-utility businesses
which seek to provide energy services to users of electricity, especially
larger customers such as industrial, commercial and wholesale customers. Such
suppliers include independent power producers and unregulated energy services
companies. In this regard, natural gas utilities operating in ComEd's service
area have established subsidiary ventures to provide heating, ventilating and
air conditioning services, attempting to attract ComEd's customers. Also,
several utilities in the United States have established unregulated energy
services subsidiaries which pursue business opportunities outside of the
utilities' regular service areas. In addition, cogeneration and energy services
companies have begun soliciting ComEd's customers to provide alternatives to
using ComEd's electricity. ComEd has pursued a number of strategies to retain
its customers. In October 1993, ComEd obtained authority to negotiate special
discount contract rates with new or existing industrial customers for up to a
total of 400 megawatts of added load, where the customers would not have chosen
service from ComEd for the increased load in the absence of discount rates. In
June 1994, ComEd obtained authority, subsequently overturned by the courts, to
negotiate special discount contract rates with up to 25 of its largest
customers, where such contracts would be necessary to retain the customers'
existing load on ComEd's system. In the wake of the Illinois Appellate Court
decision holding that the confidential nature of such contracts violated
applicable state law, ComEd sought and obtained ICC approval for the eleven
contracts that had been negotiated. The Illinois Supreme Court recently denied
ComEd's petition for leave to appeal the Appellate Court's decision. ComEd
continues to use ICC-approved special contracts, where necessary, to prevent
uneconomic by-pass of its system.
Legislation has been passed in Illinois to review the need for changes in the
regulatory framework under which Illinois electric utilities operate. The Joint
Committee on Electric Utility Regulatory Reform was created pursuant to
House/Senate Joint Resolution 21 to develop any legislative reform proposals it
finds necessary. A final legislative proposal is to be delivered by November 8,
1996. ComEd is participating as a member of the Technical Assistance Group. A
bill allowing utilities to submit plans for experimental alternative
regulation, such as price caps or incentive regulation, has been signed by the
Governor of Illinois. On December 11, 1995, ComEd announced a series of
customer initiatives as part of its larger ongoing effort to address the need
to give all customer classes the opportunity to benefit from increased
competition in the electric utility business, while retaining the benefits
(such as reliability) of current regulation and ensuring utilities' cost
recovery for commitments made under the obligation to serve customers. The
initiatives include
17
(i) a five-year cap on base electric rates at current levels, (ii) certain
energy monitoring and management programs designed to monitor and control
energy usage, particularly during certain peak periods, (iii) single statement,
or unified, billing for certain multi-site customers, (iv) certain incentives
for manufacturing customers looking to expand operations or to locate in
northern Illinois and (v) market pricing options for up to ten percent of
certain large industrial customers' existing electric energy requirements and
all of their incremental requirements. ComEd anticipates the initiatives will
be fully implemented in 1997 and will reduce its revenues by approximately $42
million annually (including the effects of previously implemented initiatives
and before income tax effects) primarily through changes in energy utilization
and increase its costs by at least $30 million annually (before income tax
effects) through the increase of depreciation charges on its nuclear generating
units. In March 1996, ComEd filed a request for ICC approval of the additional
depreciation initiative. ComEd also continues to consider the possibility of
additional depreciation options. Management expects the financial impact of
these initiatives will be substantially offset by ComEd's cost reduction
efforts and expected growth in its business.
Under ComEd's initiatives, the five-year base rate cap at current levels
became effective in December 1995 and will extend until January 1, 2001. The
rate cap does not affect ComEd's fuel cost or nuclear decommissioning cost
recovery provisions. ComEd's fuel cost variances will continue to be collected
through its fuel adjustment clause, and such collections will continue to be
subject to annual reconciliation proceedings before the ICC. Nuclear
decommissioning cost variances will continue to be collected under a rider that
was approved in the Rate Order, and such rider is intended to allow annual
adjustments in decommissioning cost recoveries from ratepayers as changes in
cost estimates occur. See "Depreciation and Decommissioning" in Note 1 of Notes
to Financial Statements in the January 26, 1996 Form 8-K Reports for additional
information regarding the decommissioning costs rider.
On December 13, 1995, ComEd announced a proposal to amend certain provisions
of the Illinois Public Utilities Act. The proposal would, among other things,
allow Illinois utilities to launch five-year experimental "direct access"
programs, whereby certain customers would have the opportunity to obtain some
of their electric energy requirements from their chosen supplier. If the
proposal is adopted as legislation, such "direct access" programs could begin
as early as 1998; and under the legislation, ComEd announced it would offer
such a program for new or expanded load of three megawatts or greater in its
northern Illinois service territory. Under ComEd's proposal, if such "direct
access" proves workable, and if the ICC finds it to be in the public interest,
the ICC could order it as an option for all electricity consumers in Illinois
starting in 2003. Other Illinois utilities have also initiated both legislative
and regulatory proposals. Both Illinois Power Company and Central Illinois
Light Company have filed proposed retail wheeling experiments with the ICC.
These experiments were approved on March 13, 1996. As structured, they are
limited in scope, size and duration. See "Regulation" and "Regulatory Assets
and Liabilities" in Note 1 of Notes to Financial Statements in the January 26,
1996 Form 8-K Reports.
18
EXECUTIVE OFFICERS OF THE REGISTRANT
The effective year of election of the officers to their present positions
and the prior positions they have held with Unicom or other companies, since
January 1, 1993, are described below.
EFFECTIVE DATE OF ELECTION
NAME AND AGE POSITION
TO PRESENT POSITION
-------- --- --------------------- --------------------------------------- -------------------------------------------------------------
James J. O'Connor 59*John W. Chairman, President and Chief Executive Officer of Unicom and
Rowe, 52 ComEd since March 1998; previously President and Chief Exec-
utive Officer of New England Electric System.
*Oliver D. Executive Vice President and President and Chief Nuclear Of-
Kingsley, ficer--Nuclear Generation Group of ComEd since October 1997;
Jr., 55 previously Chief Nuclear Officer at the Tennessee Valley Au-
thority.
*Robert J. Executive Vice President of ComEd since January 28, 1994
Leo F. Mullin 53 Vice Chairman December 1, 1995
Samuel K. Skinner 57 President January 28, 1994
Donald A. Petkus 541997 and
Manning, 55 President--Fossil Generation Group of ComEd since October
1997; previously Senior Vice President July 11, 1995
Johnof ComEd.
*John C. Bukovski 53Senior Vice President January 28, 1994
John T. Costelloand Chief Financial Officer of Unicom
Bukovski, 55 and ComEd since October 1997; previously Vice President and
Chief Financial Officer of Unicom and ComEd.
*Paul D. Senior Vice President of ComEd since October 1997; previously
McCoy, 47 Vice President January 24,of ComEd.
Donald A. Senior Vice President of Unicom since 1995; President and
Petkus, 56 Chief Executive Officer of UT Holdings since 1997 and Unicom
Thermal Technologies Inc. since 1995, and Senior Vice Presi-
dent of ComEd.
*S. Gary Senior Vice President of Unicom and ComEd since October 1997;
Snodgrass, Vice President of Unicom and ComEd, September 1997 to Octo-
46 ber 1997; previously Vice President of USG Corporation.
*Pamela B. Senior Vice President and General Counsel of Unicom and ComEd
Strobel, 45 since October 1997; previously Vice President and General
Counsel of ComEd.
*Michael J. Senior Vice President of ComEd since 1993; previously Vice
Wallace, 50 President of ComEd.
John T. Vice President of Unicom and ComEd since 1996; previously
Costello, 49 Manager of Corporate Relations of ComEd, 1995 to 1996 Roger F. Kovack 47and
Manager of Public Affairs of ComEd.
*William H. Vice President of ComEd.
Downey, 53
Ruth Ann M. Vice President and Treasurer of Unicom and ComEd since Sep-
Gillis, 43 tember 1997; previously Vice President, Chief Financial Of-
ficer and Treasurer of the University of Chicago Hospitals
and Health System from 1996 to 1997 and Senior Vice Presi-
dent and Chief Financial Officer of American National Bank
and Trust Company.
Thomas J. Vice President of Unicom and ComEd since 1996; previously
McCaffrey, Vice President of Mercer Management Consulting, 1995 to 1996
53 and Corporate Senior Vice President of First Chicago Corpo-
ration.
*Robert E. Comptroller January 28, 1994
Dennis F. O'Brien 50 Treasurer January 28, 1994of Unicom and ComEd since July 1997; previously
Berdelle, 42 held various financial reporting and analysis positions
within ComEd.
David A. Secretary of Unicom and ComEd since 1994 and 1989, respec-
Scholz, 54 Secretary January 28, 199456 tively.
--------
* Executive Officers for Section 16 reporting purposes.
The present term of office of each of the above executive officers extends
to the first meeting of Unicom's Board of Directors after the next annual
election of Directors scheduled to be held on May 22, 1996.
Except for Mr. Mullin and Mr. Skinner, each of the above executive officers
has been employed by ComEd for more than five years and, except for Mr. Mullin,
Mr. Petkus and Mr. Costello, by Unicom since January 28, 1994, in executive or
management positions. The business experience of the officers and the prior
positions they have held with ComEd or other companies since January 1, 1991
until their election to the offices indicated above are described below. Mr.
Mullin served as President and Chief Operating Officer of First Chicago
Corporation from November 1993 to July 1995, as Chairman, President and Chief
Executive Officer of American National Bank and Trust Company of Chicago from
April 1991 to November 1993, and as Executive Vice President of First Chicago
Corporation prior to April 1991. Mr. Skinner was General Chairman of the
Republican National Committee from August 1992 to January 1993, Chief of Staff
to the President of the United States from December 1991 to August 1992, and
Secretary of the United States Department of Transportation prior to December
1991. Mr. Petkus was (and continues to be) a Senior Vice President of ComEd
since June 1992, and previously served as Vice President of ComEd. Mr. Petkus
was also elected President of Unicom Thermal effective July 17, 1995. Mr.
Costello was ComEd's Manager of Corporate Relations from July 1995 to January
24, 1996, and prior to that was its Manager of Public Affairs. The following
Unicom officers have held and continue to hold the following positions at ComEd
for at least five years: Mr. O'Connor is Chairman and Chief Executive Officer;
Mr. Bukovski is Vice President; Mr. Kovack is Comptroller; Mr. O'Brien is
Treasurer; and Mr. Scholz is Secretary.1998.
There are no family relationships among the executive officers, directors
and nominees for director of Unicom.
1918
OPERATING STATISTICS
YEAR ENDED DECEMBER 31
----------------------------------
1997 1996 1995 1994 1993
---------- ---------- ----------
Operating Revenues (thousands of dol-
lars)(1):
Residential...............................Residential.............................. $2,552,742 $2,541,873 $2,621,038 $2,273,763 $2,341,155
Small commercial and industrial...........industrial.......... 2,153,113 2,113,716 2,073,998 1,917,084 1,962,662
Large commercial and industrial...........industrial.......... 1,467,574 1,445,708 1,425,784
1,381,251 1,437,680
Public authorities........................authorities....................... 505,907 503,004 487,142
452,512 474,034
Electric railroads........................railroads....................... 29,785 29,651 26,894 26,179 27,593
Provisions for revenue refunds--ultimate
consumers................................consumers............................... (45,470) -- (15,909) (1,281,788)--
Sales for resale (net of provisions for
revenue refunds).........................resale......................... 336,480 235,041 207,256
187,147 237,573
Other revenues............................revenues........................... 82,891 68,031 67,933 55,494 61,531
---------- ---------- ----------
Total..................................Total................................. $7,083,022 $6,937,024 $6,910,045
$6,277,521 $5,260,440
---------- ---------- ----------
---------- ---------- ----------========== ========== ==========
Sales (millions of kilowatthours):
Residential...............................Residential.............................. 22,151 22,310 23,303 21,376 20,818
Small commercial and industrial...........industrial.......... 25,860 25,131 25,313 24,320 23,463
Large commercial and industrial...........industrial.......... 24,074 23,896 23,777
23,450 22,917
Public authorities........................authorities....................... 7,322 7,336 7,158
6,885 6,741
Electric railroads........................railroads....................... 418 424 390 397 405
Sales for resale..........................resale......................... 15,679 12,178 11,412 8,743 13,417
---------- ---------- ----------
Total..................................Total................................. 95,504 91,275 91,353
85,171 87,761
---------- ---------- ----------
---------- ---------- ----------========== ========== ==========
Sources of Electric Energy (millions of
kilowatthours):
Generation--
Nuclear..................................Nuclear................................. 49,136 62,610 70,261
63,795 70,403
Fossil...................................Fossil.................................. 36,604 30,315 26,231 26,361 23,839
Fast-start peaking units.................units................ 121 123 116 87 24
---------- ---------- ----------
Net generation.........................generation........................ 85,861 93,048 96,608
90,243 94,266
Purchased power...........................power.......................... 16,672 6,129 2,475 2,071 644
Company use and losses....................losses................... (7,029) (7,902) (7,730) (7,143) (7,149)
---------- ---------- ----------
Total..................................Total................................. 95,504 91,275 91,353
85,171 87,761
---------- ---------- ----------
---------- ---------- ----------========== ========== ==========
Cost of Fuel Consumed (per million Btu):
Nuclear................................... $0.52Nuclear.................................. $0.57 $0.53 $0.52
Coal......................................Coal..................................... $2.28 $2.41 $2.43
$2.31 $2.89
Oil.......................................Oil...................................... $3.90 $3.41 $3.06
$2.89 $3.03
Natural gas...............................gas.............................. $2.69 $2.75 $1.85 $2.27 $2.70
Average all fuels.........................fuels........................ $1.33 $1.17 $1.05 $1.08 $1.15
Peak Load (kilowatts)........................................... 18,497,000 18,916,000 19,212,000 17,928,000 17,771,000
Number of Customers (at end of year):
Residential...............................Residential.............................. 3,123,364 3,102,101 3,079,381 3,047,354 3,009,508
Small commercial and industrial...........industrial.......... 291,143 289,803 288,848 286,793 283,764
Large commercial and industrial...........industrial.......... 1,566 1,550 1,539
1,528 1,503
Public authorities........................authorities....................... 12,180 12,142 12,039 12,059 12,023
Electric railroads and resale.............resale............ 53 46 26 20 19
---------- ---------- ----------
Total..................................Total................................. 3,428,306 3,405,642 3,381,833
3,347,754 3,306,817
---------- ---------- ----------
---------- ---------- ----------========== ========== ==========
Average Annual Revenue Per Residential
Cus-
tomerCustomer
(excluding light bulb service)................. $816.91 $819.52 $852.18 $748.10 $779.54
Average Use Per Residential Customer
(kilowatthours)..................................................... 7,108 7,213 7,598 7,056 6,954
Average Revenue Per Kilowatthour(2):Kilowatthour:
Residential (excluding light bulb serv-
ice)......................................................................... 11.49c 11.36c 11.22c 10.60c 11.21c
Small commercial and industrial...........industrial.......... 8.33c 8.41c 8.19c 7.88c 8.36c
Large commercial and industrial...........industrial.......... 6.10c 6.05c 6.00c 5.89c 6.27c
- --------
(1) See "Rate Proceedings"Matters" above.
19
YEAR 2000 CONVERSION
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations," subcaption "Liquidity and Capital Resources--Year 2000
Conversion" in the January 30, 1998 Form 8-K Reports, which are incorporated
herein by reference, for information regarding Unicom and ComEd's Year 2000
conversion.
MARKET RISKS
ComEd is exposed to market risk due to changes in interest rates and changes
in the market price for electricity. Exposure for interest rate changes
relates to its long-term debt and preferred equity obligations. Exposure to
electricity market price risk relates to forward activities taken to
effectively manage the supply of, and demand for, the electric generation
capability of ComEd's generating plants. ComEd does not currently utilize
derivative commodity or financial instruments for trading or speculative
purposes. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations," subcaption "Liquidity and Capital Resources--Interest
Rate Exposure and Market Price Exposure" in the January 30, 1998 Form 8-K
Reports, which are incorporated herein by reference, for additional
information.
FORWARD-LOOKING INFORMATION
Except for historical data, the information contained in these Annual
Reports constitutes forward-looking statements. Forward-looking statements are
inherently uncertain and subject to risks. Such statements should be viewed
with caution. Actual results or experience could differ materially from the
forward-looking statements as a result of many factors. Forward-looking
statements in this report include, but are not limited to: (1) statements
regarding expectations of revenue reductions as a result of the 1997 Act in
"Item 1. Business," subcaption "Changes in the Electric Utility Industry--The
1997 Act" (2) Averagestatements regarding estimated capital expenditures in "Item 1.
Business," subcaption "Construction Program," (3) statements regarding the
estimated return to service of certain nuclear generating units and the costs
of purchased power in "Item 1. Business," subcaption "Regulation--Nuclear,"
(4) statements regarding the costs of decommissioning nuclear generating
stations in "Item 1. Business," subcaption "Regulation--Nuclear," (5)
statements regarding cleanup costs associated with MGPs and other remediation
sites in "Item 1. Business," subcaption "Regulation--Environmental" and (6)
"Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Item 8. Financial Statements and Supplementary
Data" which, in the case of Unicom, incorporate portions of Unicom's January
30, 1998 Form 8-K Report, which is incorporated herein by reference, which
contain forward-looking information as described therein, and in the case of
ComEd, incorporate portions of ComEd's January 30, 1998 Form 8-K Report, which
is incorporated herein by reference, which contain forward-looking information
as described therein. Management cannot predict the course of future events or
anticipate the interaction of multiple factors beyond management's control and
their effect on revenues, project timing and costs. The statements regarding
revenue per kilowatthourreductions are subject to unforeseen developments in the market for
electricity in Illinois resulting from regulatory changes. The statements
regarding estimated capital expenditures, estimated return to service of
nuclear generation units, decommissioning costs and cleanup costs are subject
to changes in the scope of work and manner in which the work is performed and
consequent changes in the timing and level of the projected expenditure, and
are also subject to changes in laws and regulations or their interpretation or
enforcement. The statements regarding the estimated return to service of
nuclear generating units are subject to the concurrence of the NRC with
proceeding to power operations. Unicom and ComEd make no commitment to
disclose any revisions to the forward-looking statements, or any facts, events
or circumstances after reflecting provisions for revenue
refunds and after reflecting revenue refunds and related interest credited
to customers in 1994 and 1993, respectively, were as follows:
1994 1993
-------------------------------- --------------------------------
AFTER DEDUCTIONS FOR AFTER DEDUCTIONS FOR
-------------------------------- --------------------------------
PROVISIONS FOR REVENUE PROVISIONS FOR REVENUE
REVENUE REFUNDS REFUNDS CREDITED REVENUE REFUNDS REFUNDS CREDITED
--------------- ---------------- --------------- ----------------
Residential 10.57c 8.22c 8.61c 10.78c
Small commercial and
industrial 7.86c 6.43c 6.80c 8.16c
Large commercial and
industrial 5.88c 4.76c 5.07c 6.10c
20
the date hereof that may bear upon forward-looking
statements.
ITEM 2. PROPERTIES.
ComEd's electric properties are located in Illinois and the Indiana
Company's electric facilities are located in Indiana. In management's
opinion, ComEd and the Indiana Company's operating properties
20
are adequately maintained and are substantially in good operating condition.
The electric generating, transmission, distribution and general facilities of
ComEd and the Indiana Company represent approximately 68%64%, 9%10%, 20%22% and 3%4%,
respectively, of their gross investment in electric plant and equipment in
service.service (after reflecting the closure of Zion Station and the sale of State
Line Station).
The electric generating stations, substations and a portion of the
transmission rights of way of ComEd and the Indiana Company are owned in fee.
A significant portion of the electric transmission and distribution facilities
is located over or under highways, streets, other public places or property
owned by others, for which permits, grants, easements or licenses, (deemeddeemed
satisfactory by ComEd, but without examination of underlying land titles)titles, have
been obtained. The principal plants and properties of ComEd are subject to
the lien of ComEd's Mortgage dated July 1, 1923, as amended and supplemented,
under which ComEd's first mortgage bonds are issued.
The net generating capability of ComEd, and the Indiana Companyas of March 1, 1998, is derived from
the following electric generating facilities:
NET GENERATING CAPABILITY
STATION LOCATION (KILOWATTS)(1)
------- ---------------- -------------- -------------------------
Nuclear--
Zion Zion 2,080,000--(2)
Dresden Near Morris 1,588,000
Quad-CitiesQuad Cities Near Cordova 1,183,000(1)1,183,000(3)
LaSalle County Near Seneca 2,156,000
Byron Near Byron 2,240,000
Braidwood Near Braidwood 2,240,000
Fossil--
Collins Near Morris 2,698,000
Powerton Near Pekin 1,400,0001,538,000
Joliet 6 Near Joliet 302,000314,000
Joliet 7 & 8 Near Joliet 1,025,000
Kincaid Near Taylorville 1,108,000
Will County Near Lockport 1,092,000
Waukegan Waukegan 725,000789,000
Crawford Chicago 542,000
State Line Hammond, Indiana 490,000
Fisk Chicago 321,000326,000
Fast-Start Peaking Units(2)Units Various 1,332,0001,407,000(4)
----------
NetCompany owned net non-summer
generating capability 22,522,00019,138,000
Deduct--Summer limitations 557,000538,000
----------
Company owned net summer
generating capability 18,600,000
Add--Capability under long-term
purchase power agreements 1,598,000(5)
----------
Net summer generating capability 21,965,000
----------
----------20,198,000
==========
- --------
(1) Reflects a re-rating of certain generating stations as of February 1,
1998.
(2) On January 14, 1998, the Boards of Directors of Unicom and ComEd
authorized the permanent cessation of nuclear generation operations at
Zion Station.
(3) Excludes the 25% undivided interest of MidAmerican Energy Company (formerly
Iowa-Illinois Gas and Electric Company) in the
Quad-Cities station.
(2) GeneratingQuad Cities Station.
(4) Such generating units are normally designed for use onlyprimarily during the
maximum load periodperiods of a designated time interval.the year or during system operating emergencies.
Such units are capable of starting and coming on-line quickly.
(5) ComEd sold its Kincaid and State Line generating stations in February 1998
and December 1997, respectively. Under the terms of the sales, ComEd
entered into exclusive 15-year purchase power agreements for the output of
the plants.
Major electric transmission lines owned and in service are as follows:
VOLTAGE CIRCUIT
(VOLTS) MILES
------- -------
765,000........................................................... 90
345,000........................................................... 2,5132,545
138,000........................................................... 2,7092,737
21
ComEd's electric distribution system includes 37,79038,630 pole line miles of
overhead lines and 31,75034,579 cable miles of underground lines. A total of
approximately 1,318,0201,334,930 poles are included in ComEd's distribution system, of
which about 589,530593,390 poles are owned jointly with telephone companies.
21
ITEM 3. LEGAL PROCEEDINGS.
During 1989 and 1991, actions were brought in federal and state courts in
Colorado against ComEd and Cotter seeking unspecified damages and injunctive
relief based on allegations that Cotter has permitted radioactive and other
hazardous material to be released from its mill into areas owned or occupied
by the plaintiffs resulting in property damage and potential adverse health
effects. In February 1994, a federal jury returned nominal dollar verdicts on eight
bellwether plaintiffs' claims in thesethe 1989 cases, which verdicts were upheld on
appeal. The remaining claims in the 1989 actions are the subject of a
settlement agreement entered into by counsel for the plaintiffshave been settled and Cotter. If
the settlement agreement is implemented, the 1989 actions will be
dismissed. Although the remaining1991 cases will necessarily involve the resolution of
numerous contested issues of fact and law, Unicom and ComEd's determination is
that these actions will not have a material impact on their financial position
or results of operations. In 1990, ComEd filed a complaintA case relating to 14 of the plaintiffs in the Circuit Court against Westinghouse
and certain of its employees. The complaint alleges that the defendants
knowingly concealed information regarding the durability of the metal used1991
cases has been set for trial in the steam generators (a major component of the nuclear steam supply systems) at
ComEd's Zion, Byron and Braidwood stations. The complaint further alleges that
the defects in the steam generators will prevent the plants from maintaining
their full power output through their forty-year design life without costly
remanufacture or replacement of the steam generators. Damages, including
punitive damages, in an unspecified amount are claimed. Westinghouse has filed
a counterclaim against ComEd which seeks recovery of Westinghouse's costs of
defense and damages of approximately $13 million.
Shareholder derivative lawsuits were filed in 1992 and 1993 in the Circuit
Court against current and former directors of ComEd alleging that they breached
their fiduciary duty and duty of care to ComEd in connection with the
management of the activities associated with the construction of ComEd's four
most recently completed nuclear generating units. The lawsuits sought
restitution to ComEd by the defendants for unquantified and undefined losses
and costs alleged to have been incurred by ComEd. Both lawsuits were dismissed
by the Circuit Court and that dismissal was affirmed by the Illinois Appellate
Court. The Illinois Supreme Court declined to review that decision.
A number of complaints have been filed by former employees with the EEOC, and
several lawsuits have been filed by former employees in the U.S. District
Court, alleging that the employees' terminations (which occurred as part of
ComEd's management workforce reductions that were implemented in 1992) involved
discrimination on the basis of age, race, sex, national origin and/or
disabilities, in violation of applicable law. The complainants in these various
cases are seeking, among other things, awards of back pay and lost benefits,
reinstatement, pecuniary damages, and costs and attorneys' fees. Most of these
claims were resolved by settlement in 1995. ComEd does not view the remaining
cases as having a material impact on its financial position or results of
operations.June 1998.
In July 1995, the Chicago area experienced several consecutive days of
unusually high temperatures coupled with high humidity. Between July 12 and
14, 1995, ComEd experienced record demand for electricity. On July 14, 1995, a
fire in a substation caused a power outage to approximately 40,000 customers.
Other equipment failures in the same general area caused certain of these
customers to be without power for up to 48 hours. In the wake of these power
outages, three class action lawsuits were filed against ComEd seeking recovery
of damages for property losses allegedly suffered. One suit seeks at least $10
million in damages; the others seek unspecified damages. One individual suit
was also filed seeking damages of less than $100,000 for property losses.
On March 11, 1998 the Illinois Supreme Court approved a settlement of
ComEd's dispute regarding property tax assessments for its Byron nuclear
generating station. Under the terms of the settlement agreement, the taxing
bodies in Ogle County have agreed that taxes in future years will not exceed
certain specified amounts. ComEd will receive $8.5 million in refunds and set
aside additional credits which will be available to enforce the provisions
regarding future levies. The settlement agreement continues in effect until
2004. Appeals are still pending for cases involving ComEd's Braidwood and
LaSalle Stations, as well as other properties. These proceedings seek refunds
and reduced valuations, resulting in lower property taxes for the challenged
and subsequent years.
On November 1, 1996, the city of Chicago, Illinois filed a demand for the
appointment of an Adjustment Board before the American Arbitration Association
under the provisions of its franchise agreement with ComEd. In its demand, the
city alleges, among other items, that ComEd has failed to carry out certain
commitments related to system reliability under the franchise agreement, which
requires ComEd to budget $1 billion in expenditures for transmission and
distribution enhancements within or for the benefit of Chicago over a ten-year
period that commenced in January 1992. ComEd is disputing the city's
allegations. During the six years since January 1992, ComEd has expended
approximately $499 million to enhance electric service reliability and energy
supply for the city, and it continues to review, and budget appropriately, for
needed projects.
On June 13, 1997, the IDR issued a Notice of Tax Liability to ComEd alleging
deficiencies in Illinois invested capital tax for the years 1988 through 1994
of $22 million, plus interest of $11 million and a penalty of $2 million. On
January 2, 1998, the IDR issued a second Notice of Tax Liability also alleging
deficiencies in Illinois invested capital tax for the years 1995 through 1996
of $7 million, plus interest of $1 million. ComEd has protested the notices,
and the matter is currently pending before the IDR's Office of Administrative
Hearings. Interest will continue to accrue on the alleged tax deficiencies at
9% per annum.
22
In November and December of 1997, Unicom and its directors were served with
several shareholder derivative lawsuits in state and federal court. All of the
suits assert identical claims that the directors breached fiduciary duties to
the shareholders by allegedly failing to properly supervise ComEd's nuclear
program. Each plaintiff alleges that this caused ComEd to violate NRC rules,
which has cost ComEd millions of dollars. Plaintiffs seek to have the
directors reimburse ComEd for these costs, and they seek attorneys' fees.
Unicom and ComEd's preliminary assessment of these claims is that they are
without merit.
In October 1997, six ComEd employees who were formerly located at ComEd's
nuclear station in Zion, Illinois brought state and federal claims against
ComEd, alleging that they were relocated and demoted as the result of raising
nuclear safety concerns. They claimed retaliatory demotion, retaliatory
constructive discharge and intentional infliction of emotional distress. They
requested reinstatement in their former positions, back pay, compensatory
damages, attorneys' fees and punitive damages. The aggregate amount of
punitive damages requested equals $18 million. They also filed a claim with
the U.S. Department of Labor under the Energy Reorganization Act. Unicom and
ComEd do not believe that their exposure with respect to these claims is
material.
On April 28, 1997, Tower Leasing, Inc. ("Tower") and QST Energy, Inc.
("QST") filed a complaint with the ICC alleging that ComEd violated Illinois
law and its own tariffs by preventing Tower and QST from installing a
cogeneration facility at Sears Tower in Chicago, Illinois and interconnecting
such facility with ComEd's system in that building. Tower and QST have asked
the ICC to enter an order that would essentially require ComEd to assist in
the implementation of the proposed facility. If Tower and QST are allowed to
pursue the installation and interconnection of their proposed facility, ComEd
could lose customer revenue. ComEd does not believe that it is obligated to
allow Tower and QST to implement their proposed facility. ComEd also believes
that the proposed facility would be inconsistent with Illinois law.
On November 14, 1997, the CHA filed an application with the FERC, seeking to
require ComEd to provide transmission service to some of CHA's buildings so
that those buildings may take electric service from an alternate electric
supplier. ComEd maintains that the CHA is a retail customer ineligible for
transmission service. Should this proceeding be resolved adversely to ComEd,
ComEd could lose customer revenue. This revenue loss may be offset, however,
by a stranded cost obligation the CHA would owe ComEd under FERC Order.
See "Item 1. Business," subcaptions "Rate Proceedings," "Fuel Supply--Fuel
Adjustment Clause"Matters" and "Regulation" above
for information concerning other legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
22
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
ComEd's securities and other securities guaranteed by ComEd are currently
rated by three principal securities rating agencies as follows:
STANDARD DUFF &
MOODY'S & POOR'S PHELPS
------- -------- ------
First mortgage and secured pollution control bonds.. Baa2 BBB BBB
Publicly-held debentures and unsecured pollution
control
obligations................................obligations........................................ Baa3 BBB- BBB-
Convertible preferred stock......................... baa3 BBB- BBB-
Preference stock.................................... baa3 BBB- BBB-
ComEd-obligated mandatorily redeemable preferred se-
curities of the Trust..............................Trust Securities.................................... baa3 BBB- BBB-
Commercial paper.................................... P-2 A-2 D-2
23
As of March 1996, Standard & Poor's rating outlook on ComEd remained stable.
As of October 1995,January 1998, Moody's rating outlook on ComEd also remained stable. In
August 1995,ComEd's securities is
"negative" and Duff & Phelps upgraded its rating ofhas classified ComEd's preferred and
preference stock from BB+ to BBB- and reaffirmed thatsecurities as "Rating
Watch-Down." S&P changed its rating outlook on ComEd remained stable.from "stable" to
"positive" in November 1997.
The above ratings reflect only the views of such rating agencies and each
rating should be evaluated independently of any other rating. Generally,
rating agencies base their ratings on information furnished to them by the
issuing company and on investigations, studies and assumptions by the rating
agencies. There is no assurance that any particular rating will continue for
any given period of time or that it will not be changed or withdrawn entirely
if, in the judgment of the rating agency, circumstances so warrant. Such
ratings are not a recommendation to buy, sell or hold securities.
The following is a brief summary of the meanings of the above ratings and
the relative rank of the above ratings within each rating agency's
classification system.
Moody's top four long-term debt ratings (Aaa, Aa, A and Baa) are generally
considered "investment grade." Obligations rated Baa are considered as medium
grade obligations, neither highly protected nor poorly secured. Such
obligations lack outstanding investment characteristics and in fact have
speculative characteristics. (AA numerical modifier in Moody's system shows
relative standing within the principal rating category, with 1 indicating the
high end of that category, 2 the mid-range and 3 the low end.) Standard &
Poor's S&P's top four
bond ratings (AAA, AA, A and BBB) are generally considered to describe
obligations in which investment characteristics predominate. Obligations rated
BBB are regarded as having an adequate capacity to pay interest and repay
principal. Such obligations normally exhibit adequate protection parameters,
but adverse economic conditions or changing circumstances are more likely to
lead to weakened capacity to pay. (AA plus or minus sign in Standard & Poor'sS&P's system shows
relative standing within the majorits rating categories.)
Both Moody's and Standard & Poor'sS&P's preferred stock ratings represent relative security
of dividends. Moody's top four preferred stock ratings (aaa, aa, a and baa)
are generally considered "investment grade." Moody's baa rating describes a
medium grade preferred stock, neither highly protected nor poorly secured.
Standard & Poor'sS&P's top four preferred stock ratings (AAA, AA, A and BBB) are generally
considered "investment grade." Standard & Poor'sS&P's BBB rating applies to medium grade
preferred stock which is below A ("sound") and above BB ("lower grade").
Duff & Phelps' credit rating scale has 17 alphabetical categories, of which
ratings AAA through BBB (with AAA being the highest rating) represent
investment grade securities. Ratings of BBB+, 23
BBB and BBB- represent the
lowest category of "investment grade" rating. This category describes
securities with below average protection factors but which are considered
sufficient for institutional investment. Considerable variability in risk
occurs during economic cycles.
Ratings of BB+, BB and BB-
describe below investment grade securities which are deemed likely to meet
obligations when due. Present or prospective financial protection factors of
these securities fluctuate according to industry conditions or company
fortunes.
Moody's P-2 rating of commercial paper is the second highest of three
possible ratings;ratings. P-2 describes a strong capacity for repayment of short-term
promissory obligations. Standard & Poor'sS&P rates commercial paper in four basic categories
with A-2 being the second highest category. Duff & Phelps rates commercial
paper in three basic categories, with D-2 indicating the middle category.
Further explanations of the significance of ratings may be obtained from the
rating agencies.
Additional information required by Item 5 is incorporated herein by
reference to the "Price Range and Cash Dividends Paid Per Share of Common
Stock" on page 3 of Unicom's January 26, 199630, 1998 Form 8-K Report.
24
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by Items 6, 7 and 8 is incorporated herein by
reference to the "Summary of Selected Consolidated Financial Data" on page 3,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 4 through 15,20, and the audited consolidated financial
statements and notes thereto on pages 1622 through 4454 of Unicom's January 26,
199630,
1998 Form 8-K Report and to Unicom's Form 8-K/A-1 Current Report dated March
14, 1996.Report. Reference is also made to "Item 1. Business,"
subcaptions "Changes in the Electric Utility Industry," "Construction Program,"Program"
and "Regulation" and "Business and Competition" for additional information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
24
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by Item 10 relating to directors and nominees for
election as directors at Unicom's Annual Meeting of shareholders to be held on
May 22, 199628, 1998 is incorporated herein by reference to the information under the
heading "Security Ownership of Certain Beneficial Owners and Management" in
Unicom's definitive Proxy Statement (1996("1998 Proxy Statement)Statement") to be filed with
the SEC prior to April 29, 199630, 1998, pursuant to Regulation 14A under the
Securities Exchange Act of 1934. The information required by Item 10 relating
to executive officers is set forth in Part I of Unicom's Annual Report on Form
10-
K10-K under "Item 1. Business," subcaption "Executive Officers of the
Registrant" and under the heading "Security Ownership of Certain Beneficial
Owners and Management" ofin Unicom's 19961998 Proxy Statement, which are
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated herein by reference to
the information labelled "Compensation of Directors" and the paragraphs under
the heading "Executive Compensation" (other than the paragraphs under the
heading "Corporate Governance and Compensation Committee Report on Executive
Compensation") ofin Unicom's 19961998 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated herein by reference to
the stock ownership information under the heading "Security Ownership of
Certain Beneficial Owners and Management" in Unicom's 19961998 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
25
ANNUAL REPORT ON FORM 10-K FOR COMMONWEALTH EDISON COMPANY
PART I
ITEM 1. BUSINESS.
See Unicom's "Item 1. Business" (other than the paragraphs under the
headings "General--Unregulated Operations," "Construction Program--Unregulated
Operations" and "Executive Officers of the Registrant"), which is incorporated
herein by this reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
The effective year of election of the officers to their present positions
and the prior positions they have held with ComEd or other companies, since
January 1, 1993, are described below.
EFFECTIVE DATE OF ELECTION
NAME AND AGE POSITION
TO PRESENT POSITION
------------------ --- ------------------------ ------------------------------------------------------ -----------------------------------------------
James J. O'Connor 59*John W. Rowe, 52 Chairman, President and Chief Executive Officer
of ComEd and Unicom since March 1, 1980
Leo F. Mullin 531998; previ-
ously President and Chief Executive Officer of
New England Electric System.
*Oliver D. Kingsley, Jr., 55 Executive Vice Chairman December 1, 1995
Samuel K. Skinner 57 President February 1, 1993
Thomasand President and
Chief Nuclear Officer--Nuclear Generation
Group of ComEd since October 1997; previously
Chief Nuclear Officer at the Tennessee Valley
Authority.
*Robert J. Maiman 57Manning, 55 Executive Vice President of ComEd since January
1997 and President--Fossil Generation Group of
ComEd since October 1997; previously Senior
Vice President June 10, 1992
Robert J. Manning 53of ComEd.
*John C. Bukovski, 55 Senior Vice President June 10, 1992and Chief Financial Offi-
cer of ComEd and Unicom since October 1997;
previously Vice President and Chief Financial
Officer of ComEd and Unicom.
*Paul D. McCoy, 47 Senior Vice President of ComEd since October
1997; previously Vice President of ComEd.
Donald A. Petkus, 5456 Senior Vice President June 10,of ComEd since 1992 Cordell Reed 58and
of Unicom since 1995; President and Chief Ex-
ecutive Officer of UT Holdings since 1997 and
Unicom Thermal Technologies Inc. since 1995.
*S. Gary Snodgrass, 46 Senior Vice President June 5, 1987
Michael J. Wallace 48 Seniorof ComEd and Unicom since
October 1997; Vice President December 9, 1993
John C. Bukovski 53of ComEd and
Unicom, September 1997 to October 1997; previ-
ously Vice President February 1, 1989
John T. Costello 47 Vice President January 24, 1996
Louis O. DelGeorge 48 Vice President April 22, 1992
William H. Downey 51 Vice President June 10, 1992
William H. Dunbar, 55 May 10, 1994
Jr. Vice President
J. Stanley Graves 59 Vice President June 5, 1987
Harold W. Keiser 52 Vice President December 18, 1995
Emerson W. Lacey 54 Vice President November 17, 1992
Paul D. McCoy 45 Vice President June 10, 1992
Robert A. Paul 52 Vice President January 24, 1994
J. Stephen Perry 57 Vice President April 28, 1994
James A. Small 52 Vice President July 6, 1993
Pamelaof USG Corporation.
*Pamela B. Strobel, 4345 Senior Vice President and General Counsel June 1, 1993
Roger F. Kovackof
ComEd and Unicom since October 1997; previ-
ously Vice President and General Counsel of
ComEd.
*Michael J. Wallace, 50 Senior Vice President of ComEd since 1993; pre-
viously Vice President of ComEd.
T. Oliver Butler, 46 Vice President of ComEd since July 1997; previ-
ously Purchasing Vice President of ComEd, 1994
to 1997 and European Acquisition Manager--Ge-
neva of Digital Corporation.
26
NAME AND AGE POSITION
----------------------- ----------------------------------------------------
Frank M. Clark, 52 Vice President of ComEd since January 1997; previ-
ously Governmental Affairs Vice President 1996 to
January 1997 and Governmental Affairs Manager.
John T. Costello, 49 Vice President of ComEd and Unicom since 1996; pre-
viously Manager of Corporate Relations of ComEd,
1995 to 1996 and Manager of Public Affairs of
ComEd.
Louis O. DelGeorge, 50 Vice President of ComEd.
*William H. Downey, 53 Vice President of ComEd.
Ruth Ann M. Gillis, 43 Vice President and Treasurer of ComEd and Unicom
since September 1997; previously Vice President,
Chief Financial Officer and Treasurer of the Uni-
versity of Chicago Hospitals and Health System from
1996 to 1997 and Senior Vice President and Chief
Financial Officer of American National Bank and
Trust Company.
David R. Helwig, 47 Vice President of ComEd since January 1998; previ-
ously General Manager of General Electric Company's
Nuclear Services Company, 1997 to January 1998 and
Vice President at PECO Energy.
Emerson W. Lacey, 56 Vice President of ComEd.
Andrew J. Lynch, 51 Vice President of ComEd since April 1997; previously
President of First Chicago Trust Company of New
York.
Thomas J. McCaffrey, 53 Vice President of ComEd and Unicom since 1996; pre-
viously Vice President of Mercer Management Con-
sulting, 1995 to 1996 and Corporate Senior Vice
President of First Chicago Corporation.
J. Stephen Perry, 59 Vice President of ComEd since 1994; previously Se-
nior Vice President of Illinois Power Company.
James A. Small, 54 Vice President of ComEd since 1993; previously Gen-
eral Manager of Fuel Services of Georgia Power Com-
pany.
Harold Gene Stanley, 57 Vice President of ComEd since September 1997; Site
Vice President at Braidwood Station, 1996 to 1997;
previously Vice President at Pennsylvania Power and
Light Company.
*Robert E. Berdelle, 42 Comptroller February 1, 1989
Dennis F. O'Brien 50 Treasurer February 1, 1989of ComEd and Unicom since July 1997;
previously held various financial reporting and
analysis positions within ComEd.
David A. Scholz, 5456 Secretary February 1,of ComEd and Unicom since 1989 and 1994,
respectively.
--------
* Executive Officers for Section 16 reporting purposes.
The present term of office of each of the above executive officers extends to
the first meeting of ComEd's Board of Directors after the next annual election
of Directors scheduled to be held on May 22, 1996.
Each of the above executive officers (except for Messrs. Mullin, Skinner,
Keiser, Paul, Perry and Small and Ms. Strobel) has been employed by ComEd for
more than five years in executive or
2628, 1998.
27
management positions. Messrs. Mullin, Skinner, Keiser, Paul, Perry and Small
and Ms. Strobel have been employed by ComEd for less than five years. Their
business experience from January 1, 1991 until their election to the offices
indicated is as follows: Mr. Mullin served as President and Chief Operating
Officer of First Chicago Corporation from November 1993 to July 1995, as
Chairman, President and Chief Executive Officer of American National Bank and
Trust Company of Chicago from April 1991 to November 1993, and prior to that as
Executive Vice President of First Chicago Corporation; Mr. Skinner was General
Chairman of the Republican National Committee from August 1992 to January 1993,
Chief of Staff to the President of the United States from December 1991 to
August 1992, and Secretary of the United States Department of Transportation
prior to December 1991; Mr. Keiser was employed at Entergy Operations, Inc., as
Executive Vice President and Chief Operating Officer from 1993 to 1995 and,
prior to that, as Senior Vice President of Pennsylvania Power & Light Company;
Mr. Paul was employed by Digital Equipment Corporation in the following
capacities: from 1992 to January 1994 as Corporate Purchasing Manager and,
prior to that, as Corporate Technology and Business Acquisition Manager; Mr.
Perry was employed at Illinois Power Company in the following capacities: from
1992 to April 1994 as Senior Vice President and, prior to that, as Vice
President of Nuclear Operations; Mr. Small was General Manager of Fuel Services
at Georgia Power Company; Ms. Strobel was a partner in the law firm of Sidley &
Austin. Prior to election to the positions shown above, the following officers
held other positions at ComEd: Messrs. Maiman, Manning, Petkus and Wallace were
Vice Presidents; Mr. Costello was Manager of Public Affairs prior to July 1995
and Manager of Corporate Relations thereafter; Mr. DelGeorge was Assistant Vice
President; Mr. Downey was Manager of Marketing and Customer Services; Mr.
Dunbar was Division Vice President--Chicago North prior to December 1992 and
Manager of Quality thereafter; Mr. Lacey was Fossil Engineering and
Construction Manager; and Mr. McCoy was Operating Manager prior to September
1991 and Manager of Transmission and Distribution Operations thereafter.
There are no family relationships among the executive officers, directors
and nominees for director of ComEd.
ITEM 2. PROPERTIES.
See Unicom's "Item 2. Properties," which is incorporated herein by this
reference.
ITEM 3. LEGAL PROCEEDINGS.
See Unicom's "Item 3. Legal Proceedings," which is incorporated herein by
this reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE BY SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
See Unicom's "Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters" (other than the last paragraph thereof), which is
incorporated herein by reference.
Additional information required by Item 5 is incorporated herein by
reference to the "Price Range and Cash"Cash Dividends Paid Per Share of Common Stock" on page 3 of
ComEd's January 26, 199630, 1998 Form 8-K Report.
27
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by Items 6, 7 and 8 is incorporated herein by
reference to the "Summary of Selected Consolidated Financial Data" on page 3,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 4 through 14,19, and the audited consolidated financial
statements and notes thereto on pages 1521 through 4151 of ComEd's January 26, 199630,
1998 Form 8-K Report and to ComEd's Form 8-K/A-1 Current Report dated March 14,
1996.Report. Reference is also made to "Item 1. Business,"
subcaptions "Changes in the Electric Utility Industry," "Construction Program,"Program"
and "Regulation" and "Business and Competition" for additional information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by Item 10 relating to directors and nominees for
election as directors at ComEd's Annual Meeting of shareholders to be held on
May 22, 199628, 1998 is incorporated herein by reference to information under the
heading "Security Ownership of Certain Beneficial Owners and Management" in
ComEd's definitive Information Statement (1996("1998 Information Statement)Statement") to be
filed with the SEC prior to April 29, 199630, 1998, pursuant to Regulation 14C under
the Securities Exchange Act of 1934. The information required by Item 10
relating to executive officers is set forth in Part I of ComEd's Annual Report
on Form 10-K under "Item 1. Business," subcaption "Executive Officers of the
Registrant" and under the heading "Security Ownership of Certain Beneficial
Owners and Management" in ComEd's 19961998 Information Statement, which are
incorporated herein by reference.
28
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated herein by reference to
the paragraph labelled "Compensation of Directors" and the paragraphs under
the heading "Executive Compensation" (other than the paragraphs under the
heading "Corporate Governance and Compensation Committee Report on Executive
Compensation") ofin ComEd's 19961998 Information Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated herein by reference to
the stock ownership information under the heading "Security Ownership of
Certain Beneficial Owners and Management" ofin ComEd's 19961998 Information
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
2829
ANNUAL REPORTS ON FORM 10-K FOR UNICOM CORPORATION AND COMMONWEALTH EDISON
COMPANY
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A)FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS:
PAGE OF
JANUARY 26,
199630,
1998 FORM 8-
K REPORT
------------
UNICOM COMED
------ -----
The following financial statements are incorporated into the
Unicom Annual Report on Form 10-K by reference to the indi-
cated page or pages of Unicom's January 26, 199630, 1998 Form 8-K
Report, and into the ComEd Annual Report on Form 10-K by
reference to the indicated page or pages of ComEd's January
26, 199630, 1998 Form 8-K Report:
Report of Independent Public Accountants.................... 16 1521 20
Statements of Consolidated IncomeOperations for the years 1995, 19941997,
1996 and 1993................................................... 17 161995.............................................. 22 21
Consolidated Balance Sheets--December 31, 19951997 and 1994..... 18-19 17-181996..... 23-24 22-23
Statements of Consolidated Capitalization--December 31, 19951997
and 1994................................................... 20 191996................................................... 25 24
Statements of Consolidated Retained Earnings (Deficit) for
the years 1995, 19941997, 1996 and 1993........................................ 21 20
Statements of Consolidated Premium on Common Stock and Other
Paid-In Capital for the years 1995, 1994 and 1993 ......... NA 201995.............................. 26 25
Statements of Consolidated Cash Flows for the years 1995,
19941997,
1996 and 1993.............................................. 22 211995.............................................. 27 26
Notes to Financial Statements............................... 23-44 22-4128-54 27-51
ANNUAL
REPORT ON
PAGE OF FORM 10-K
THIS ------------
DOCUMENT UNICOM COMED
-------- ------ -----
The following supplemental schedules are included in
the indicated Annual Report on Form 10-K:
Report of Independent Public Accountants on
Supplemental Schedule.............................. 3738 x
Report of Independent Public Accountants on
Supplemental Schedule.............................. 3839 x
Schedule II--Valuation and Qualifying Accounts for
each of the three years in the period
ended
December 31, 1995........................ 391997........................ 40 x x
The following schedules are omitted as not applicable or not required
under rules of Regulation S-X: I, III, IV and V.
2930
The individual financial statements and schedules of ComEd's
nonconsolidated wholly-ownedwholly owned subsidiaries have been omitted from Unicom'sUnicom and
ComEd's Annual ReportReports on Form 10-K because the investments are not
material in relation to ComEd's financial position or results of
operations. As of December 31, 1995,1997, the assets of the nonconsolidated
subsidiaries, in the aggregate, approximatedwere less than 1% of ComEd's consolidated
assets and for the year 1995 annualassets. The 1997 revenues of the nonconsolidated subsidiaries, in the
aggregate, were less than 1% of ComEd's consolidated annual revenues.
The following exhibits are filed with the indicated Annual Report on Form
10-K or incorporated therein by reference. Documents indicated by an
asterisk (*) are incorporated by reference to the File No. indicated.
Documents indicated by a plus sign (+) identify management contracts or
compensatory plans or arrangements.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
*(3)-1 Articles of Incorporation of Unicom effective
January 28,
1994. (File No. 1-11375, Form 10-K for the
year ended
December 31, 1994, Exhibit (3)-1). x
*(3)-2 Restated Articles of Incorporation of ComEd
effective February 20, 1985, including
Statements of Resolution Establishing Se-
ries, relating to the establishment of three
new series of ComEd preference stock known
as the "$9.00 Cumulative Preference Stock,"
the "$6.875 Cumulative Preference Stock" and
the "$2.425 Cumulative Preference Stock."
(File No.
1-1839, Form 10-K for the year ended Decem-
ber 31, 1994, Exhibit (3)-2). x
(3)-3 By-Laws of Unicom Corporation, effective Jan-
uary 28, 1994 as amended through March 11,
1998. x
(3)-4 By-Laws of Commonwealth Edison Company, ef-
fective September 2, 1988 as amended through
March 11, 1998. x
*(4)-1 Mortgage of ComEd to Illinois Merchants Trust
Company, Trustee (Harris Trust and Savings
Bank, as current successor Trustee), dated
July 1, 1923, Supplemental Indenture thereto
dated August 1, 1944, and amendments and
supplements thereto dated, respectively, Au-
gust 1, 1946, April 1, 1953, March 31, 1967,
April 1, 1967, July 1, 1968, October 1,
1968, February 28, 1969, May 29, 1970, Janu-
ary 1, 1971, June 1, 1971, May 31, 1972,
June 1, 1973, June 15, 1973, October 15,
1973, May 31, 1974, June 13, 1975, May 28,
1976, January 15, 1977 and June 3, 1977
(File No. 2-60201, Form S-7, Exhibit
2-1). x
*(4)-2 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, May 17,
1978, August 31, 1978, June 18, 1979, June
20, 1980, April 16, 1981, April 30, 1982,
April 15, 1983, April 13, 1984 and April 15,
1985 (File No. 2-99665, Form S-3, Exhibit
(4)-3). x
*(4)-3 Supplemental Indenture to Mortgage dated July
1, 1923 dated April 15, 1986 (File No. 33-
6879, Form S-3, Exhibit (4)-9). x
31
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
*(4)-4 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, February
15, 1990 and June 15, 1990 (File No. 33-
38232, Form S-3, Exhibits (4)-11 and (4)-
12). x
*(4)-5 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, June 1,
1991, October 1, 1991 and October 15, 1991
(File No. 33-44018, Form S-3, Exhibits (4)-
12, (4)-13 and (4)-14). x
*(4)-6 Supplemental Indenture to Mortgage dated July
1, 1923 dated February 1, 1992 (File No. 1-
1839, Form 10-K for the year ended December
31, 1991, Exhibit (4)-18). x
*(4)-7 Supplemental Indenture to Mortgage dated July
1, 1923 dated May 15, 1992 (File No. 33-
48542, Form S-3, Exhibit (4)-14). x
*(4)-8 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, July 15,
1992 and September 15, 1992 (File No. 33-
53766, Form S-3, Exhibits (4)-13 and (4)-
14). x
*(4)-9 Supplemental Indenture to Mortgage dated July
1, 1923 dated February 1, 1993 (File No. 1-
1839, Form 10-K for the year ended December
31, 1992, Exhibit (4)-14). x
*(4)-10 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, April 1,
1993 and April 15, 1993 (File No. 33-64028,
Form S-3, Exhibits (4)-12 and (4)-13). x
*(4)-11 Supplemental Indentures to Mortgage dated
July 1, 1923 dated, respectively, June 15,
1993 and July 1, 1993 (File No. 1-1839, Form
8-K dated May 21, 1993, Exhibits (4)-1 and
(4)-2). x
*(4)-12 Supplemental Indenture to Mortgage dated July
1, 1923 dated July 15, 1993 (File No. 1-
1839, Form 10-Q for the quarter ended June
30, 1993, Exhibit (4)-1). x
*(4)-13 Supplemental Indenture to Mortgage dated July
1, 1923 dated January 15, 1994 (File No. 1-
1839, Form 10-K for the year ended December
31, 1993, Exhibit (4)-15). x
*(4)-14 Supplemental Indenture to Mortgage dated July
1, 1923 dated December 1, 1994 (File No. 1-
1839, Form 10-K for the year ended December
31, 1994, Exhibit (4)-16). x
*(4)-15 Supplemental Indenture to Mortgage dated July
1, 1923 dated June 1, 1996. (File No. 1-
1839, Form 10-K for the year ended December
31, 1996, Exhibit (4)-16). x
*(4)-16 Instrument of Resignation, Appointment and
Acceptance dated January 31, 1996, under the
provisions of the Mortgage dated July 1,
1923, and Indentures Supplemental thereto
(File No. 1-1839, Form 10-K for the year
ended December 31, 1995, Exhibit (4)-28). x
32
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
*(4)-17 Instrument dated as of January 31, 1996, for
trustee under the Mortgage dated July 1,
1923 and Indentures Supplemental thereto
(File No. 1-1839, Form 10-K for the year
ended December 31, 1995, Exhibit (4)-29). x
*(4)-18 Indentures of ComEd to The First National
Bank of Chicago, Trustee (Amalgamated Bank
of Chicago, as current successor Trustee),
dated April 1, 1949, October 1, 1949, Octo-
ber 1, 1950, October 1, 1954, January 1,
1958, January 1, 1959 and December 1, 1961
(File No. 1-1839, Form 10-K for the year
ended December 31, 1982, Exhibit (4)-20). x
*(4)-19 Indenture of ComEd dated February 15, 1973 to
The First National Bank of Chicago, Trustee
(LaSalle National Bank, successor Trustee),
and Supplemental Indenture thereto dated
July 13, 1973 (File No. 2-66100, Form S-16,
Exhibit (b)-2). x
*(4)-20 Indenture dated as of September 1, 1987 be-
tween ComEd and Citibank, N.A., Trustee re-
lating to Notes (File No. 33-20619, Form S-
3, Exhibit (4)-13). x
*(4)-21 Supplemental Indenture to Indenture dated
September 1, 1987 dated July 14, 1989 (File
No. 33-32929, Form S-3, Exhibit (4)-16). x
(4)-22 Supplemental Indenture to Indenture dated
September 1, 1987 dated January 1, 1997. x
*(4)-23 Credit Agreement dated as of October 1, 1991,
among ComEd, as borrower, the Banks named
therein and the other Lenders from time to
time parties thereto, and Citibank, N.A.
(File No. 1-1839, Form 10-K for the year
ended December 31, 1991, Exhibit (4)-27). x
*(4)-24 Credit Agreement dated as of October 1, 1991,
among ComEd, as borrower, the Banks named
therein and the other Lenders from time to
time parties thereto, and Citibank, N.A.
(File No. 1-1839, Form 10-K for the year
ended December 31, 1991, Exhibit (4)-28). x
(4)-25 Letter Agreement dated as of September 29,
1997, among ComEd and certain of the Banks
party to the Credit Agreement dated as of
October 1, 1991. x
*(4)-26 Amended and Restated Credit Agreement dated
as of November 15, 1996, among Unicom
Enterprises, the Banks Named Therein and
Citibank, N.A. (File No. 1-11375, Form 10-K
for the year ended December 31, 1996,
Exhibit (4)-31). x
*(4)-27 Amended and Restated Guaranty dated as of No-
vember 15, 1996, by Unicom in favor of the
Lenders and LC Banks parties to the afore-
mentioned Credit Agreement with Unicom En-
terprises (File No. 1-11375, Form 10-K for
the year ended December 31, 1996, Exhibit
(4)-32). x
33
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
*(4)-28 Indenture dated September 1, 1995 between
ComEd and Wilmington Trust Company. (File
No. 1-1839, Form 10-K for the year ended De-
cember 31, 1996, Exhibit (4)-34). x
*(4)-29 First Supplemental Indenture dated September
19, 1995 to Indenture dated September 1,
1995. (File No. 1-1839, Form 10-K for the
year ended December 31, 1996, Exhibit (4)-
35). x
*(4)-30 Second Supplemental Indenture dated January
24, 1997 to Indenture dated September 1,
1995. (File No. 1-1839, Form 10-K for the
year ended December 31, 1996, Exhibit (4)-
36). x
*(4)-31 Rights Agreement dated as of February 2, 1998
between Unicom Corporation and First Chicago
Trust Company of New York, as Rights Agent,
which includes as Exhibit A the form of
Rights Certificate and as Exhibit B, the
Summary of Rights to Purchase Common Stock
(File No. 1-11375, Current Report on Form 8-
K dated February 2, 1998, Exhibit 4). x
*(10)-1 Nuclear Fuel Lease Agreement dated as of No-
vember 23, 1993, between CommEd Fuel Compa-
ny, Inc., as Lessor, and ComEd, as Lessee
(File No. 1-1839, Form 10-K for the year
ended December 31, 1993, Exhibit (10)-1). x
+*(10)- Unicom Corporation Amended and Restated Long-
2 Term Incentive Plan (File No. 1-11375,
Unicom Proxy Statement dated April 9, 1997,
Exhibit A). x
+*(10)- 1995 Long-Term Performance Unit Award for
3 Executive and Group Level Employees Payable
in 1998 under the Unicom Corporation Long-
Term Incentive Plan, as amended (File Nos.
1-11375 and 1-1839, Form 10-K for the year
ended December 31, 1995, Exhibit (10)-6). x x
+*(10)- 1996 Long-Term Performance Unit Award for Ex-
4 ecutive and Group Level Employees Payable in
1999 under the Unicom Corporation Long-Term
Incentive Plan (File Nos. 1-11375 and
1-1839, Form 10-K for the year ended Decem-
ber 31, 1995, Exhibit (10)-9). x x
+*(10)-5 1997 Long-Term Performance Unit Award for Ex-
ecutive and Group Level Employees Payable in
2000 under the Unicom Corporation Long-Term
Incentive Plan. (File Nos. 1-11375 and 1-
1839, Form 10-K for the year ended December
31, 1996, Exhibit (10)-12). x x
+(10)-6 1998 Long-Term Performance Unit Award for
Executive and Group Level Employees Payable
in 2001 under the Unicom Corporation Long-
Term Incentive Plan. x x
+*(10)-7 Unicom Corporation General Provisions Regard-
ing 1996 Stock Option Awards Granted under
the Unicom Corporation Long-Term Incentive
Plan. (File Nos. 1-11375 and 1-1839, Form
10-K for the year ended December 31, 1996,
Exhibit (10)-9). x x
34
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
+*(10)-8 Unicom Corporation General Provisions Regard-
ing 1996B Stock Option Awards Granted under
the Unicom Corporation Long-Term Incentive
Plan. (File Nos. 1-11375 and 1-1839, Form
10-K for the year ended December 31, 1996,
Exhibit (10)-11). x x
+(10)-9 Unicom Corporation General Provisions Regard-
ing Stock Option Awards Granted under the
Unicom Corporation Long-Term Incentive Plan
(Effective July 10, 1997). x x
+*(10)- 1997 Annual Incentive Award for Management
10 Employees under the Unicom Corporation Long-
Term Incentive Plan. (File Nos. 1-11375 and
1-1839, Form 10-K for the year ended
December 31, 1996, Exhibit (10)-13). x x
+*(10)- 1997 Award to Mr. O'Connor, Mr. Mullin and
11 Mr. Skinner under the Unicom Corporation
Long-Term Incentive Plan. x x
+(10)- 1998 Annual Incentive Award for Management
12 Employees under the Unicom Corporation Long-
Term Incentive Plan. x x
+*(10)- Unicom Corporation Deferred Compensation Unit
13 Plan, as amended (File Nos. 1-11375 and 1-
1839, Form 10-K for the year ended Decem-
ber 31, 1995, Exhibit (10)-12). x x
+*(10)- Deferred Compensation Plan (included in Arti-
14 cle Five of Exhibit (3)-2 above). x
+*(10)- Management Incentive Compensation Plan, ef-
15 fective January 1, 1989 (File No. 1-1839,
Form 10-K for the year ended December 31,
1988, Exhibit (10)-4). x
+*(10)- Amendments to Management Incentive Compensa-
16 tion Plan, dated December 14, 1989 and March
21, 1990 (File No. 1-1839, Form 10-K for the
year ended December 31, 1989, Exhibit (10)-
5). x
+*(10)- Amendment to Management Incentive Compensa-
17 tion Plan, dated March 21, 1991 (File No. 1-
1839, Form 10-K for the year ended December
31, 1991, Exhibit (10)-6). x
+*(10)- Retirement Plan for Directors, effective Sep-
18 tember 1, 1994, as amended through March 12,
1997. (File No. 1-11375, Form 10-K for the
year ended December 31, 1996, Exhibit (10)-
19). x
+*(10)- Retirement Plan for Directors, effective Jan-
19 uary 1, 1987, as amended through March 12,
1997. (File No. 1-1839 Form 10-K for the
year ended December 31, 1996, Exhibit (10)-
20) x
+*(10)- Unicom Corporation 1996 Directors' Fee Plan
20 (File No. 1-11375, Unicom Proxy Statement
dated April 8, 1996, Appendix A). x x
+*(10)- Executive Group Life Insurance Plan (File No.
21 1-1839, Form 10-K for the year ended Decem-
ber 31, 1980, Exhibit (10)-3). x
+*(10)- Amendment to the Executive Group Life Insur-
22 ance Plan (File No. 1-1839, Form 10-K for
the year ended December 31, 1981, Exhibit
(10)-4). x
+*(10)- Amendment to the Executive Group Life Insur-
23 ance Plan dated December 12, 1986 (File No.
1-1839, Form 10-K for the year ended Decem-
ber 31, 1986, Exhibit (10)-6). x
35
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
+*(10)- Amendment of Executive Group Life Insurance
24 Plan to implement program of "split dollar
life insurance" dated December 13, 1990
(File No. 1-1839, Form 10-K for the year
ended December 31, 1990, Exhibit (10)-10). x
+*(10)- Commonwealth Edison Company Supplemental Man-
25 agement Retirement Plan (File No. 1-1839,
Form 10-K for the year ended December 31,
1985, Exhibit (10)-6). x
+*(10)- Amendment of Executive Group Life Insurance
26 Plan to stabilize the death benefit applica-
ble to participants dated July 22, 1992
(File No. 1-1839, Form 10-K for the year
ended December 31, 1992, Exhibit (10)-13). x
+*(10)- Letter Agreement dated December 16, 1992 be-
27 tween ComEd and Samuel K. Skinner (File No.
1-1839, Form 10-K for the year ended Decem-
ber 31, 1992, Exhibit (10)-14). x
+*(10)- Amendment dated May 31, 1995 to Letter Agree-
28 ment dated December 16, 1992 between ComEd
and Samuel K. Skinner (File No. 1-1839, Form
10-K for the year ended December 31, 1995,
Exhibit (10)-27). x
+*(10)- Amendments dated December 11, 1996 and March
29 24, 1997 to Letter Agreement dated December
16, 1992 between ComEd and Samuel K. Skin-
ner. (File No. 1-1839, Form 10-K for the
year ended December 31, 1996, Exhibit (10)-
30). x
+*(10)- Letter Agreement dated November 14, 1995 be-
30 tween ComEd and Leo F. Mullin (File No.
1-1839, Form 10-K for the year ended
December 31, 1995, Exhibit (10)-28). x
+*(10)- Amendment dated March 24, 1997 to Letter
31 Agreement dated November 14, 1995 between
ComEd and Leo F. Mullin. (File No. 1-1839,
Form 10-K for the year ended December 31,
1996, Exhibit (10)-32). x
+*(10)- Commonwealth Edison Company Excess Benefit
32 Savings Plan (File No. 1-1839, Form 10-Q for
the quarter ended June 30, 1994, Exhibit
(10)-2). x
+*(10)- Amendment No. 1 to Commonwealth Edison Com-
33 pany Excess Benefit Savings Plan dated May
24, 1995 (File No. 1-1839, Form 10-K for the
year ended December 31, 1995, Exhibit
(10)-30). x
+(10)-34 Amendment No. 2 to Commonwealth Edison Com-
pany Excess Benefit Savings Plan effective
as of September 1, 1997. x
+*(10)- Unicom Corporation Stock Bonus Deferral Plan
35 (File Nos. 1-11375 and 1-1839, Form 10-K for
the year ended December 31, 1995, Exhibit
(10)-31). x x
+(10)-36 Amendment No. 1 to Unicom Corporation Stock
Bonus Deferral Plan dated January 3, 1997. x x
+(10)-37 Form of Stock Award Agreement under the
Unicom Corporation Long-Term Incentive Plan. x x
36
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- --------------------------------------------- ------ -----
(12) Statement re computation of ratios of earn-
ings to fixed charges and ratios of earnings
to fixed charges and preferred and prefer-
ence stock dividend requirements for ComEd. x
(18) Letter from independent public accountants
regarding change in accounting principle. x x
(21)-1 Subsidiaries of Unicom. x
(21)-2 Subsidiaries of ComEd. x
(23)-1 Consent of experts for Unicom. x
(23)-2 Consent of experts for ComEd. x
(24)-1 Powers of attorney of Directors whose names
are signed to the Unicom Annual Report on
Form 10-K pursuant to such powers. x
(24)-2 Powers of attorney of Directors whose names
are signed to the ComEd Annual Report on
Form 10-K pursuant to such powers. x
(99)-1 Unicom's Current Report on Form 8-K dated
January 30, 1998. x
(99)-2 ComEd's Current Report on Form 8-K dated Jan-
uary 30, 1998. x
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Unicom and ComEd
hereby agree to furnish to the SEC, upon request, any instrument
defining the rights of holders of long-term debt of ComEd not filed as
an exhibit herein. No such instrument authorizes securities in excess
of 10% of the total assets of ComEd.
(B) REPORTS ON FORM 8-K:
A Current Report on Form 8-K dated October 9, 1997, was filed by
Unicom and ComEd to announce that James J. O'Connor, Chairman and Chief
Executive Officer of Unicom and ComEd intended to retire from the
companies.
A Current Report on Form 8-K dated December 16, 1997, was filed by
Unicom and ComEd to describe the 1997 Act and the related accounting
effects.
37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULE
To Unicom Corporation:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Unicom Corporation and subsidiary
companies incorporated by reference in this Annual Report on Form 10-K, and
have issued our report thereon dated January 30, 1998.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14.(a), is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
January 30, 1998
38
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULE
To Commonwealth Edison Company:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Commonwealth Edison Company and
subsidiary companies incorporated by reference in this Annual Report on Form
10-K, and have issued our report thereon dated January 30, 1998.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14.(a), is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
January 30, 1998
39
SCHEDULE II
UNICOM CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ---------------------------- --------- ----------------- ---------- --------
ADDITIONS
-----------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
- ---------------------------- --------- -------- -------- ---------- --------
FOR THE YEAR ENDED DECEMBER
31, 1995
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $10,720 $ 1,108 $ -- $ -- $11,828
======= ======= ====== ======== =======
Estimated Obsolete Materi-
als....................... $13,690 $15,350 $ -- $(12,865)(b) $16,175
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $32,522 $ 2,271 $ -- $ (2,271)(c) $32,522
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $55,312 $21,135 $4,671 $(23,142)(d) $57,976
======= ======= ====== ======== =======
FOR THE YEAR ENDED DECEMBER
31, 1996
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $11,828 $ 1,065 $ -- $ -- $12,893
======= ======= ====== ======== =======
Estimated Obsolete Materi-
als....................... $16,175 $12,000 $ -- $(15,873)(b) $12,302
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $32,522 $ 1,728 $ -- $ (1,728)(c) $32,522
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $57,976 $10,892 $5,713 $(20,609)(d) $53,972
======= ======= ====== ======== =======
FOR THE YEAR ENDED DECEMBER
31, 1997
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $12,893 $ 4,651 $ -- $ -- $17,544
======= ======= ====== ======== =======
Estimated Obsolete Materi-
als....................... $12,302 $62,000 $ -- $(32,559)(b) $41,743
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $32,522 $ 2,410 $ -- $ (2,910)(c) $32,022
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $53,972 $ 8,565 $4,939 $(18,213)(d) $49,263
======= ======= ====== ======== =======
Notes:
(a) Bad debt losses, net of recoveries, and provisions for uncollectible
accounts were charged to operating expense and amounted to $50,574,000,
$41,846,000 and $26,278,000 in 1997, 1996 and 1995, respectively.
(b) Write-off of obsolete materials.
(c) Expenditures for site investigation and cleanup costs.
(d) Payments of claims and related costs.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
40
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO AND STATE OF ILLINOIS ON THE 27TH
DAY OF MARCH, 1998.
UNICOM CORPORATION
John W. Rowe
By
--------------------------------
John W. Rowe, Chairman,
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF
OF THE REGISTRANT AND IN THE CAPACITIES INDICATED ON THE 27TH DAY OF
MARCH, 1998.
SIGNATURE
- ----------------------------
TITLE
---------------------
John W. Rowe Chairman, President and
- ---------------------------- Chief Executive Officer
John W. Rowe and Director (principal
executive officer)
John C. Bukovski
- ---------------------------- Senior Vice
John C. Bukovski President(principal
financial officer)
Robert E. Berdelle Comptroller (principal
- ---------------------------- accounting officer)
Robert E. Berdelle
Edward A. Brennan* Director
James W. Compton* Director
Bruce DeMars* Director
Sue L. Gin* Director
Donald P. Jacobs* Director
Edgar D. Jannotta* Director
David A. Scholz
*By
--------------------------------
David A. Scholz, Attorney-in-
fact
[Signature page to Unicom Corporation Annual Report on Form 10-K]
41
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO AND STATE OF ILLINOIS ON THE 27TH
DAY OF MARCH, 1998.
COMMONWEALTH EDISON COMPANY
John W. Rowe
By
--------------------------------
John W. Rowe, Chairman,
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF
OF THE REGISTRANT AND IN THE CAPACITIES INDICATED ON THE 27TH DAY OF
MARCH, 1998.
SIGNATURE
- ----------------------------
TITLE
---------------------
John W. Rowe Chairman, President and
- ---------------------------- Chief Executive Officer
John W. Rowe and Director (principal
executive officer)
John C. Bukovski
- ---------------------------- Senior Vice
John C. Bukovski President(principal
financial officer)
Robert E. Berdelle Comptroller (principal
- ---------------------------- accounting officer)
Robert E. Berdelle
Edward A. Brennan* Director
James W. Compton* Director
Bruce DeMars* Director
Sue L. Gin* Director
Donald P. Jacobs* Director
Edgar D. Jannotta* Director
David A. Scholz
*By
--------------------------------
David A. Scholz, Attorney-in-
fact
[Signature page to Commonwealth Edison Company Annual Report on Form 10-K]
42
Unicom Corporation and
Commonwealth Edison Company
Form 10-K
File Nos. 1-11375 and 1-1839
EXHIBIT INDEX
The following exhibits are filed with the indicated Annual Report on Form
10-K or incorporated therein by reference. Documents indicated by an asterisk
(*) are incorporated by reference to the File No. indicated. Documents indicated
by a plus sign (+) identify management contracts or compensatory plans or
arrangements.
Exhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
*(3)-1 Articles of Incorporation of Unicom effective
January 28, 1994. (File No. 1-11375, Form 10-K
for the year ended December 31, 1994, Exhibit
(3)-1). x
*(3)-2 Restated Articles of Incorporation of ComEd ef-
fective February 20, 1985, including Statements
of Resolution Establishing Series, relating to
the establishment of three new series of ComEd
preference stock known as the "$9.00 Cumulative
Preference Stock," the "$6.875 Cumulative Pref-
erence Stock" and the "$2.425 Cumulative Prefer-
ence Stock." (File No. 1-1839, Form 10-K for the
year ended December 31, 1994, Exhibit (3)-2). x
(3)-3 By-Laws of Unicom Corporation, effective January
28, 1994 as amended through December 13, 1995.March 11, 1998. x
(3)-4 By-Laws of Commonwealth Edison Company, effective
September 2, 1988 as amended through December
13, 1995.March 11,
1998. x
*(4)-1 Mortgage of ComEd to Illinois Merchants Trust
Company, Trustee (Continental Illinois National(Harris Trust and Savings Bank,
and Trust Company of Chicago,as current successor Trustee), dated July 1,
1923, Supplemental In-
dentureIndenture thereto dated AugustAu-
gust 1, 1944, and amend-
mentsamendments and supplements
thereto dated, respective-
ly,respectively, August 1, 1946,
April 1, 1953, April 1,
1966, November 1, 1966, December 1, 1966, March 31, 1967, April 1, 1967, February 1, 1968,
July 1, 1968, October 1, 1968, February 28, 1969,
May 29, 1970, January 1, 1971, June 1, 1971,
May 31, 1972, June 1, 1973, June 15, 1973,
October 15, 1973, May 31, 1974, July 1, 1974, June 13, 1975,
May 28, 1976, January 15, 1977, June 1, 1977 and June 3, 1977
(File No. 2-60201, Form S-7, Ex-
hibitExhibit 2-1). x
*(4)-2 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, December 1, 1977, May 17, 1978, August
31, 1978, June 18, 1979, June 20, 1980, April
16, 1981, April 30, 1982, April 15, 1983, April
13, 1984 March 1, 1985 and April 15, 1985 (File No. 2-99665,
Form S-3, Ex-
hibitExhibit (4)-3). x
*(4)-3 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, April 15, 1986 and May
1, 1986 (File No. 33-6879, Form S-3, Exhibit
(4)-9). x
301
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMEDExhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
*(4)-4-3 Supplemental Indenture to Mortgage dated July 1,
1923 dated January 12, 1987April 15, 1986 (File No. 33-13193,33-6879,
Form S-3, Exhibit (4)-6)-9). x
*(4)-5 Supplemental Indenture to Mortgage dated July 1,
1923 dated June 30, 1989 (File No. 33-32929,
Form S-3, Exhibit (4)-11). x
*(4)-6-4 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, February 15, 1990 and
June 15, 1990 (File No. 33-38232, Form S-3, Ex-
hibits (4)-11 and (4)-12). x
*(4)-7-5 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, June 1, 1991, October
1, 1991 and October 15, 1991 (File No. 33-44018,
Form S-3, Exhibits (4)-12, (4)-13 and (4)-14). x
*(4)-8-6 Supplemental Indenture to Mortgage dated July 1,
1923 dated February 1, 1992 (File No. 1-1839,
Form 10-K for the year ended December 31, 1991,
Exhibit (4)-18). x
*(4)-9-7 Supplemental Indenture to Mortgage dated July 1,
1923 dated May 15, 1992 (File No. 33-48542, Form
S-3, Exhibit (4)-14). x
*(4)-10-8 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, July 15, 1992 Septem-
berand
September 15, 1992 and October 1, 1992 (File No. 33-
53766,33-53766, Form S-3,
Exhibits (4)-13 (4)-14 and (4)-15)-14). x
*(4)-11-9 Supplemental IndenturesIndenture to Mortgage dated July 1,
1923 dated respectively, February 1, 1993 and
March 1, 1993 (File No. 1-1839,
Form 10-K for the year ended December 31, 1992,
Exhibits (4)-
14 and (4)-15)-14). x
*(4)-12-10 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, April 1, 1993 and
April 15, 1993 (File No. 33-64028, Form S-3, Ex-
hibits (4)-12 and (4)-13). x
*(4)-13-11 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, June 15, 1993 and July
1, 1993 (File No. 1-1839, Form 8-K dated May 21,
1993, Exhibits (4)-1 and (4)-2). x
*(4)-14-12 Supplemental Indenture to Mortgage dated July 1,
1923 dated July 15, 1993 (File No. 1-1839, Form
10-Q for the quarter ended June 30, 1993, Ex-
hibit (4)-1). x
*(4)-15-13 Supplemental Indenture to Mortgage dated July 1,
1923 dated January 15, 1994 (File No. 1-1839,
Form 10-K for the year ended December 31, 1993,
Exhibit (4)-15). x
*(4)-16-14 Supplemental Indenture to Mortgage dated July 1,
1923 dated December 1, 1994 (File No. 1-1839,
Form 10-K for the year ended December 31, 1994,
Exhibit (4)-16). x
*(4)-15 Supplemental Indenture to Mortgage dated July 1,
1923 dated June 1, 1996. (File No. 1-1839, Form
10-K for the year ended December 31, 1996, Ex-
hibit (4)-16). x
2
Exhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
*(4)-16 Instrument of Resignation, Appointment and Ac-
ceptance dated January 31, 1996, under the pro-
visions of the Mortgage dated July 1, 1923, and
Indentures Supplemental thereto (File No. 1-
1839, Form 10-K for the year ended December 31,
1995, Exhibit (4)-28). x
*(4)-17 Instrument dated as of January 31, 1996, for
trustee under the Mortgage dated July 1, 1923
and Indentures Supplemental thereto (File No. 1-
1839, Form 10-K for the year ended December 31,
1995, Exhibit (4)-29). x
*(4)-18 Indentures of ComEd to The First National Bank of
Chicago, Trustee (Harris Trust and Savings(Amalgamated Bank of Chicago,
as current successor Trustee), dated April 1,
1949, October 1, 1949, October 1, 1950, October
1, 1954, Janu-
aryJanuary 1, 1958, January 1, 1959 and
December 1, 1961 (File No. 1-1839, Form 10-K for
the year ended December 31, 1982, Exhibit (4)-20)-
20). x
31
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ------------------------------------------------- ------ -----
*(4)-18-19 Indenture of ComEd dated February 15, 1973 to The
First National Bank of Chicago, Trustee (LaSalle
National Bank, successor Trustee), and Supple-
mental Indenture thereto dated July 13, 1973
(File No. 2-66100, Form S-16, Exhibit (b)-2). x
*(4)-19-20 Indenture dated as of September 1, 1987 between
ComEd and Citibank, N.A., Trustee relating to
Notes (File No. 33-20619, Form S-3, Exhibit (4)-
13). x
*(4)-20 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated September 15, 1987 (File No.
33-20619, Form S-3, Exhibit (4)-14). x
*(4)-21 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated May 18, 1988 (File No. 33-
23036, Form S-3, Exhibit (4)-14). x
*(4)-22 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated July 14, 1989 (File No. 33-
32929, Form S-3, Exhibit (4)-16). x
*(4)-23(4)-22 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated AprilJanuary 1, 1991 (File No. 33-
44018, Form S-3, Exhibit (4)-21).1997. x
*(4)-24 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated April 15, 1992 (File No. 33-
48542, Form S-3, Exhibit
(4)-22). x
*(4)-25 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated July 15, 1992 (File No. 33-
53766, Form S-3, Exhibit (4)-24). x
*(4)-26 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated October 15, 1993 (File No. 1-
1839, Form 10-Q for the quarter ended September
30, 1993, Exhibit (4)-1). x
*(4)-27 Supplemental Indenture to Indenture dated Septem-
ber 1, 1987 dated April 1, 1994 (File No. 1-
1839, Form 10-Q for the quarter ended March 31,
1994, Exhibit (4)-1). x
(4)-28 Instrument of Resignation, Appointment and Ac-
ceptance dated January 31, 1996, under the pro-
visions of the Mortgage dated July 1, 1923, and
Indentures Supplemental thereto. x
(4)-29 Instrument dated as of January 31, 1996, for
trustee under the Mortgage dated July 1, 1923
and Indentures Supplemental thereto. x
*(4)-30-23 Credit Agreement dated as of October 1, 1991,
among Commonwealth Edison Company,ComEd, as borrower, the Banks named
therein and the other Lenders from time to time
parties thereto, and Citibank, N.A. (File No. 1-1839,1-
1839, Form 10-K for the year ended December 31,
1991, Exhibit (4)-27). x
323
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMEDExhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
*(4)-31-24 Credit Agreement dated as of October 1, 1991,
among Commonwealth Edison Company,ComEd, as borrower, the Banks named
therein and the other Lenders from time to time
parties thereto, and Citibank, N.A. (File No. 1-1839,1-
1839, Form 10-K for the year ended December 31,
1991, Exhibit (4)-28). x
*(4)-32(4)-25 Letter Agreement dated as of October 4, 1993,September 29, 1997,
among Commonwealth Edison CompanyComEd and certain of the Banks party to
the Credit Agreement dated as of October 1,
1991 (File No. 1-1839, Form 10-K
for the year ended December 31, 1993, Exhibit
(4)-28).1991. x
*(4)-33 Term Loan Agreement dated as of January 7, 1992,
between Commonwealth Edison Company, as borrow-
er,-26 Amended and The First National Bank of Chicago, in-
dividually and as agent (File No. 1-1839, Form
10-K for the year ended December 31, 1992, Ex-
hibit (4)-28). x
*(4)-34 First Amendment to Term Loan Agreement dated as
of January 9, 1995, by and among Commonwealth
Edison Company, The First National Bank of Chi-
cago, individually and as agent, and the banks
party thereto (File No. 1-1839, Form 10-K for
the year ended December 31, 1994, Exhibit (4)-
32). x
*(4)-35 Term Loan Agreement dated as of January 15, 1992,
between Commonwealth Edison Company, as borrow-
er, and Westpac Banking Corporation, Chicago
Branch, individually and as agent (File No. 1-
1839, Form 10-K for the year ended December 31,
1992, Exhibit (4)-29). x
*(4)-36 Term Loan Agreement dated as of January 16, 1992,
between Commonwealth Edison Company, as borrow-
er, and The Bank of New York, individually and
as agent (File No. 1-1839, Form 10-K for the
year ended December 31, 1992, Exhibit (4)-29). x
*(4)-37Restated Credit Agreement dated as of
November 22, 1994,15, 1996, among Unicom Enterprises, Inc., the
Banks Named Therein and Citibank, N.A. (File No.
1-11375, Form 10-K for the year ended December
31, 1994,1996, Exhibit (4)-35)-31). x
*(4)-38-27 Amended and Restated Guaranty dated November 22, 1994,as of Novem-
ber 15, 1996, by Unicom Cor-
poration in favor of the Lenders
and LC Banks parties to the aforementioned
Credit Agreement with Unicom Enterprises Inc. (File
No. 1-11375, Form 10-K for the year ended DecemberDecem-
ber 31, 1994,1996, Exhibit (4)-36)-32). x
*(4)-39 Guaranty-28 Indenture dated November 22, 1994, by Unicom Cor-
poration in favor of Citibank, N.A.September 1, 1995 between ComEd
and Wilmington Trust Company. (File No. 1-
11375,1-1839,
Form 10-K for the year ended December 31, 1994,1996,
Exhibit (4)-37)-34). x
*(4)-29 First Supplemental Indenture dated September 19,
1995 to Indenture dated September 1, 1995. (File
No. 1-1839, Form 10-K for the year ended Decem-
ber 31, 1996, Exhibit (4)-35). x
*(4)-30 Second Supplemental Indenture dated January 24,
1997 to Indenture dated September 1, 1995. (File
No. 1-1839, Form 10-K for the year ended Decem-
ber 31, 1996, Exhibit (4)-36). x
*(4)-31 Rights Agreement dated as of February 2, 1998
between Unicom Corporation and First Chicago
Trust Company of New York, as Rights Agent, which
includes as Exhibit A the Form of Rights
Certificate and as Exhibit B, the Summary of
Rights to Purchase Common Stock (File No.
1-11375, Current Report on Form 8-K dated
February 2, 1998, Exhibit 4). x
*(10)-1 Nuclear Fuel Lease Agreement dated as of November
23, 1993, between CommEd Fuel Company, Inc., as
Lessor, and Commonwealth Edison Company,ComEd, as Les-
seeLessee (File No. 1-1839,
Form 10-K for the year ended December 31, 1993,
Exhibit (10)-1). x
33
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ------------------------------------------------- ------ -----
+*(10)-2 Unicom Corporation Amended and Restated Long-Term
Incentive Plan (File No. 1-1839, ComEd1-11375, Unicom Proxy
Statement dated March
26, 1993,April 9, 1997, Exhibit A). x
+*(10)-3 Amendment to Unicom Corporation Long-Term Incen-
tive Plan, effective September 1, 1994 (File No.
33-56991, Form S-8, Exhibit (4)-4). x
+*(10)-4 1994 Long-Term Performance Unit Award for Execu-
tive and Group Level Employes Payable in 1996
under the 1993 Long-Term Incentive Plan (File
No. 1-1839, Form 10-K/A-1 for the year ended De-
cember 31, 1993, Exhibit (10)-4). x x
+*(10)-5 1994 Long-Term Performance Unit Award for Execu-
tive and Group Level Employes Payable in 1997
under the 1993 Long-Term Incentive Plan (File
No. 1-1839, Form 10-K/A-1 for the year ended De-
cember 31, 1993, Exhibit (10)-5). x x
+ (10)-6 1995 Long-Term Performance Unit Award for
Execu-
tiveExecutive and Group Level Employees Payable in
1998 under the Unicom Corporation Long-Term
Incentive Plan, as amended. x x
+*(10)-7 1995 Variable Compensation Award for Management
Employees under the Unicom Corporation Long-Term
Incentive Planamended (File Nos. 1-11375 and
1-1839, Form 10-K for the year ended December
31, 1994,1995, Exhibit (10)-7)-6). x x x
4
Exhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
+*(10)-8 1995 Award to Mr. O'Connor and Mr. Skinner under
the Unicom Corporation Long-Term Incentive Plan
(File Nos. 1-11375 and 1-1839, Form 10-K for the
year ended December 31, 1994, Exhibit (10)-8). x x
+ (10)-9-4 1996 Long-Term Performance Unit Award for Execu-
tive and Group Level Employees Payable in 1999
under the Unicom Corporation Long-Term Incentive
Plan.Plan (File Nos. 1-11375 and 1-1839, Form 10-K
for the year ended December 31, 1995, Exhibit
(10)-9). x x
+ +*(10)-10 1996 Variable Compensation-5 1997 Long-Term Performance Unit Award for ManagementExecu-
tive and Group Level Employees Payable in 2000
under the Unicom Corporation Long-Term Incentive
Plan. (File Nos. 1-11375 and 1-1839, Form 10-K
for the year ended December 31, 1996, Exhibit
(10)-12). x x
+(10)-6 1998 Long-Term Performance Unit Award for
Executive and Group Level Employees Payable in
2001 under the Unicom Corporation Long-Term
Incentive Plan. x x
+ +*(10)-7 Unicom Corporation General Provisions Regarding
1996 Stock Option Awards Granted under the
Unicom Corporation Long-Term Incentive Plan.
(File Nos. 1-11375 and 1-1839, Form 10-K for the
year ended December 31, 1996, Exhibit (10)-9). x x
+*(10)-8 Unicom Corporation General Provisions Regarding
1996B Stock Option Awards Granted under the
Unicom Corporation Long-Term Incentive Plan.
(File Nos. 1-11375 and 1-1839, Form 10-K for the
year ended December 31, 1996, Exhibit (10)-11). x x
+(10)-9 Unicom Corporation General Provisions Regarding
Stock Option Awards Granted under the
Unicom Corporation Long-Term Incentive Plan
(Effective July 10, 1997). x x
+*(10)-10 1997 Annual Incentive Award for Managment
Employees under the Unicom Corporation Long-Term
Incentive Plan. (File Nos. 1-11375 and 1-1839,
Form 10-K for the year ended December 31, 1996,
Exhibit (10)-13). x x
+*(10)-11 19961997 Award to Mr. O'Connor, Mr. Mullin and Mr.
Skinner under the Unicom Corporation Long-Term
Incentive Plan. x x
+ +(10)-12 1998 Annual Incentive Award for Management
Employees under the Unicom Corporation Long-Term
Incentive Plan. x x
+*(10)-12-13 Unicom Corporation Deferred Compensation Unit
Plan, as amended.amended (File Nos. 1-11375 and 1-1839,
Form 10-K for the year ended December 31, 1995,
Exhibit (10)-12). x x
+*(10)-13-14 Deferred Compensation Plan (included in Article
Five of Exhibit (3)-2 above). x
+*(10)-14-15 Management Incentive Compensation Plan, effective
January 1, 1989 (File No. 1-1839, Form 10-K for
the year ended December 31, 1988, Exhibit (10)-
4). x
+*(10)-15-16 Amendments to Management Incentive Compensation
Plan, dated December 14, 1989 and March 21, 1990
(File No. 1-1839, Form 10-K for the year ended
December 31, 1989, Exhibit (10)-5). x
345
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMEDExhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
+*(10)-16-17 Amendment to Management Incentive Compensation
Plan, dated March 21, 1991 (File No. 1-1839,
Form 10-K for the year ended December 31, 1991,
Exhibit (10)-6). x
+ +*(10)-17-18 Retirement Plan for Directors, effective Septem-
ber 1, 1994, as amended through May 24, 1995.March 12, 1997.
(File No. 1-11375, Form 10-K for the year ended
December 31, 1996, Exhibit (10)-19). x
+ +*(10)-18-19 Retirement Plan for Directors, effective January
1, 1987, as amended through May 24, 1995.March 12, 1997.
(File No. 1-1839, Form 10-K for the year ended
December 31, 1996, Exhibit (10)-20) x
+ +*(10)-19-20 Unicom Corporation Outside Director Stock Award1996 Directors' Fee Plan as amended.(File
No. 1-11375, Unicom Proxy Statement dated April
8, 1996, Appendix A). x x
+*(10)-20-21 Executive Group Life Insurance Plan (File No. 1-
1839, Form 10-K for the year ended December 31,
1980, Exhibit (10)-3). x
+*(10)-21-22 Amendment to the Executive Group Life Insurance
Plan (File No. 1-1839, Form 10-K for the year
ended December 31, 1981, Exhibit (10)-4). x
+*(10)-22-23 Amendment to the Executive Group Life Insurance
Plan dated December 12, 1986 (File No. 1-1839,
Form 10-K for the year ended December 31, 1986,
Exhibit (10)-6). x
+*(10)-23-24 Amendment of Executive Group Life Insurance Plan
to implement program of "split dollar life in-
surance" dated December 13, 1990 (File No. 1-
1839, Form 10-K for the year ended December 31,
1990, Exhibit (10)-10). x
+*(10)-24-25 Commonwealth Edison Company Supplemental Manage-
ment Retirement Plan (File No. 1-1839, Form 10-K
for the year ended December 31, 1985, Exhibit
(10)-6). x
+*(10)-25-26 Amendment of Executive Group Life Insurance Plan
to stabilize the death benefit applicable to
participants dated July 22, 1992 (File No. 1-
1839, Form 10-K for the year ended December 31,
1992, Exhibit (10)-13). x
+*(10)-26-27 Letter Agreement dated December 16, 1992 between
Commonwealth Edison CompanyComEd and Samuel K. Skinner (File No. 1-1839,
Form 10-K for the year ended December 31, 1992,
Exhibit (10)-14). x
+ +*(10)-27-28 Amendment dated May 31, 1995 to Letter Agreement
dated December 16, 1992 between Commonwealth Ed-
ison CompanyComEd and Samuel
K. Skinner (File No. 1-1839, Form 10-K for the
year ended December 31, 1995, Exhibit (10)-27). x
+*(10)-29 Amendments dated December 11, 1996 and March 24,
1997 to Letter Agreement dated December 16, 1992
between ComEd and Samuel K. Skinner. (File No.
1-1839, Form 10-K for the year ended December
31, 1996, Exhibit (10)-30). x
+ +*(10)-28-30 Letter Agreement dated November 14, 1995 between
Commonwealth Edison CompanyComEd and Leo F. Mullin (File No. 1-1839, Form
10-K for the year ended December 31, 1995, Ex-
hibit (10)-28). x
6
Exhibit
Number Description of Document Unicom ComEd
------- ------------------------------------------------- ------ -----
+*(10)-31 Amendment dated March 24, 1997 to Letter Agree-
ment dated November 14, 1995 between ComEd and
Leo F. Mullin. (File No. 1-1839, Form 10-K for
the year ended December 31, 1996, Exhibit (10)-
32). x
+*(10)-29-32 Commonwealth Edison Company Excess Benefit Sav-
ings Plan (File No. 1-1839, Form 10-Q for the
quarter ended June 30, 1994, Exhibit (10)-2). x
+ +*(10)-30-33 Amendment No. 1 to Commonwealth Edison Company
Excess Benefit Savings Plan dated May 24, 1995.1995
(File No. 1-1839, Form 10-K for the year ended
December 31, 1995, Exhibit (10)-30). x
+ +(10)-34 Amendment No. 2 to Commonwealth Edison Company
Excess Benefit Savings Plan effective as of
September 1, 1997. x
+*(10)-31-35 Unicom Corporation Stock Bonus Deferral Plan
(File Nos. 1-11375 and 1-1839, Form 10-K for the
year ended December 31, 1995, Exhibit (10)-31). x x
+(10)-36 Amendment No. 1 to Unicom Corporation Stock
Bonus Deferral Plan dated January 3, 1997. x x
+(10)-37 Form of Stock Award Agreement under the Unicom
Corporation Long-Term Incentive Plan. x x
35
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ------------------------------------------------- ------ -----
(12) Statement re computation of ratios of earnings to
fixed charges and ratios of earnings to fixed
charges and preferred and preference stock divi-
dend requirements for ComEd. x
(18) Letter from independent public accountants
regarding change in accounting principle.
x x
(21)-1 Subsidiaries of Unicom Corporation.Unicom. x
(21)-2 Subsidiaries of Commonwealth Edison Company.ComEd. x
(23)-1 Consent of experts for Unicom Corporation.Unicom. x
(23)-2 Consent of experts for Commonwealth Edison Compa-
ny.ComEd. x
(24)-1 Powers of attorney of Directors whose names are
signed to the Unicom Corporation Annual Report on Form 10-K
pursuant to such powers. x
(24)-2 Powers of attorney of Directors whose names are
signed to the Commonwealth Edison CompanyComEd Annual Report on Form 10-K
pursuant to such powers. x
(99)-1 Unicom Corporation'sUnicom's Current Report on Form 8-K dated January
26, 1996.30, 1998. x
(99)-2 Commonwealth Edison Company'sComEd's Current Report on Form 8-K dated January
26, 1996.30, 1998. x
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Unicom and ComEd
hereby agree to furnish to the SEC, upon request, any instrument
defining the rights of holders of long-term debt of ComEd not filed as
an exhibit herein. No such instrument authorizes securities in excess
of 10% of the total assets of ComEd.
(B) REPORTS ON FORM 8-K:
A Current Report on Form 8-K dated December 11, 1995 was filed by Unicom
and ComEd to describe ComEd's announcement of a series of customer
initiatives.
A Current Report on Form 8-K dated December 13, 1995 was filed by Unicom
and ComEd to describe ComEd's announcement of a proposal to amend certain
provisions of the Illinois Public Utilities Act.
36
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULE
To Unicom Corporation:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Unicom Corporation and subsidiary
companies incorporated by reference in this Annual Report on Form 10-K, and
have issued our report thereon dated January 26, 1996.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed on page 29, Item
14.(a), is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
January 26, 1996
37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULE
To Commonwealth Edison Company:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Commonwealth Edison Company and
subsidiary companies incorporated by reference in this Annual Report on Form
10-K, and have issued our report thereon dated January 26, 1996.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed on page 29, Item
14.(a), is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
January 26, 1996
38
SCHEDULE II
UNICOM CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ---------------------------- --------- ------------------ ---------- --------
ADDITIONS
------------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
- ---------------------------- --------- -------- -------- ---------- --------
FOR THE YEAR ENDED DECEMBER
31, 1993
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $12,976 $(2,066) $ -- $ -- $10,910
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $24,522 $ 6,020 $ -- $ (1,020)(b) $29,522
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $64,512 $13,963 $7,795 $(29,536)(c) $56,734
======= ======= ====== ======== =======
FOR THE YEAR ENDED DECEMBER
31, 1994
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $10,910 $ (190) $ -- $ -- $10,720
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $29,522 $ 5,039 $ -- $ (2,039)(b) $32,522
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $56,734 $20,270 $7,802 $(29,494)(c) $55,312
======= ======= ====== ======== =======
FOR THE YEAR ENDED DECEMBER
31, 1995
- ----------------------------
Reserve Deducted From Assets
in Consolidated Balance
Sheet:
Provision for uncollectible
accounts (a).............. $10,720 $ 1,108 $ -- $ -- $11,828
======= ======= ====== ======== =======
Other Reserves:
Estimated liabilities asso-
ciated with remediation
costs and former manufac-
tured gas plant sites..... $32,522 $ 2,271 $ -- $ (2,271)(b) $32,522
======= ======= ====== ======== =======
Accumulated provision for
injuries and damages...... $55,312 $21,135 $4,671 $(23,142)(c) $57,976
======= ======= ====== ======== =======
Notes:
(a) Bad debt losses, net of recoveries, and provisions for uncollectible
accounts were charged to operating expense and amounted to $28,867,000,
$25,287,000 and $26,278,000 in 1993, 1994 and 1995, respectively.
(b) Expenditures for site investigation and cleanup costs.
(c) Payments of claims and related costs.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
39
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO AND STATE OF ILLINOIS ON THE 28TH
DAY OF MARCH 1996.
UNICOM CORPORATION
By James J. O'Connor
-----------------------------
James J. O'Connor, Chairman
and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF
OF THE REGISTRANT AND IN THE CAPACITIES INDICATED ON THE 28TH DAY OF
MARCH 1996.
SIGNATURE TITLE
- ---------------------------- ---------------------
James J. O'Connor Chairman and Chief
- ---------------------------- Executive Officer and
James J. O'Connor Director (principal
executive officer)
John C. Bukovski
- ---------------------------- Vice President (principal
John C. Bukovski financial officer)
Roger F. Kovack Comptroller (principal
- ---------------------------- accounting officer)
Roger F. Kovack
Jean Allard Director
Edward A. Brennan* Director
James W. Compton* Director
Sue L. Gin* Director
Donald P. Jacobs Director
Edgar D. Jannotta* Director
George E. Johnson* Director
Edward A. Mason* Director
Leo F. Mullin* Vice Chairman and Director
Frank A. Olson Director
Samuel K. Skinner* President and Director
David A. Scholz
*By
----------------------------
David A. Scholz, Attorney-in-
fact
[Signature page to Unicom Corporation Annual Report on Form 10-K]
40
UNICOM CORPORATION
COMMONWEALTH EDISON COMPANY
FILE NO.'S 1-11375
AND 1-1839
EXHIBIT INDEX
The following exhibits are filed with the indicated Annual Report on Form 10-
K or incorporated therein by reference. Documents indicated by an asterisk (*)
are incorporated by reference to the File No. indicated. Documents indicated by
a plus sign (+) identify management contracts or compensatory plans or
arrangements.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
*(3)-1 Articles of Incorporation of Unicom effective January
28,
1994. (File No. 1-11375, Form 10-K for the year
ended
December 31, 1994, Exhibit (3)-1). x
*(3)-2 Restated Articles of Incorporation of ComEd effective
February 20, 1985, including Statements of Resolu-
tion Establishing Series, relating to the establish-
ment of three new series of ComEd preference stock
known as the "$9.00 Cumulative Preference Stock,"
the "$6.875 Cumulative Preference Stock" and the
"$2.425 Cumulative Preference Stock." (File No. 1-
1839, Form 10-K for the year ended December 31,
1994, Exhibit (3)-2). x
(3)-3 By-Laws of Unicom Corporation, effective January 28,
1994 as amended through December 13, 1995. x
(3)-4 By-Laws of Commonwealth Edison Company, effective
September 2, 1988 as amended through December 13,
1995. x
*(4)-1 Mortgage of ComEd to Illinois Merchants Trust Compa-
ny, Trustee (Continental Illinois National Bank and
Trust Company of Chicago, successor Trustee), dated
July 1, 1923, Supplemental Indenture thereto dated
August 1, 1944, and amendments and supplements
thereto dated, respectively, August 1, 1946, April
1, 1953, April 1, 1966, November 1, 1966, December
1, 1966, March 31, 1967, April 1, 1967, February 1,
1968, July 1, 1968, October 1, 1968, February 28,
1969, May 29, 1970, January 1, 1971, June 1, 1971,
May 31, 1972, June 1, 1973, June 15, 1973, October
15, 1973, May 31, 1974, July 1, 1974, June 13, 1975,
May 28, 1976, January 15, 1977, June 1, 1977 and
June 3, 1977 (File No. 2-60201, Form S-7, Exhibit 2-
1). x
*(4)-2 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, December 1, 1977, May 17,
1978, August 31, 1978, June 18, 1979, June 20, 1980,
April 16, 1981, April 30, 1982, April 15, 1983,
April 13, 1984, March 1, 1985 and April 15, 1985
(File No. 2-99665, Form S-3, Exhibit (4)-3). x
*(4)-3 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, April 15, 1986 and May 1,
1986 (File No. 33-6879, Form S-3, Exhibit (4)-9). x
*(4)-4 Supplemental Indenture to Mortgage dated July 1, 1923
dated January 12, 1987 (File No. 33-13193, Form S-3,
Exhibit (4)-6). x
1
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
*(4)-5 Supplemental Indenture to Mortgage dated July 1, 1923
dated June 30, 1989 (File No. 33-32929, Form S-3,
Exhibit (4)-11). x
*(4)-6 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, February 15, 1990 and June
15, 1990 (File No. 33-38232, Form S-3, Exhibits (4)-
11 and (4)-12). x
*(4)-7 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, June 1, 1991, October 1,
1991 and October 15, 1991 (File No. 33-44018, Form
S-3, Exhibits (4)-12, (4)-13 and (4)-14). x
*(4)-8 Supplemental Indenture to Mortgage dated July 1, 1923
dated February 1, 1992 (File No. 1-1839, Form 10-K
for the year ended December 31, 1991, Exhibit (4)-
18). x
*(4)-9 Supplemental Indenture to Mortgage dated July 1, 1923
dated May 15, 1992 (File No. 33-48542, Form S-3, Ex-
hibit (4)-14). x
*(4)-10 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, July 15, 1992, September
15, 1992 and October 1, 1992 (File No. 33-53766,
Form S-3, Exhibits (4)-13, (4)-14 and (4)-15). x
*(4)-11 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, February 1, 1993 and March
1, 1993 (File No. 1-1839, Form 10-K for the year
ended December 31, 1992, Exhibits (4)-14 and (4)-
15). x
*(4)-12 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, April 1, 1993 and April
15, 1993 (File No. 33-64028, Form S-3, Exhibits (4)-
12 and (4)-13). x
*(4)-13 Supplemental Indentures to Mortgage dated July 1,
1923 dated, respectively, June 15, 1993 and July 1,
1993 (File No. 1-1839, Form 8-K dated May 21, 1993,
Exhibits (4)-1 and (4)-2). x
*(4)-14 Supplemental Indenture to Mortgage dated July 1, 1923
dated July 15, 1993 (File No. 1-1839, Form 10-Q for
the quarter ended June 30, 1993, Exhibit (4)-1). x
*(4)-15 Supplemental Indenture to Mortgage dated July 1, 1923
dated January 15, 1994 (File No. 1-1839, Form 10-K
for the year ended December 31, 1993, Exhibit (4)-
15). x
*(4)-16 Supplemental Indenture to Mortgage dated July 1, 1923
dated December 1, 1994 (File No. 1-1839, Form 10-K
for the year ended December 31, 1994, Exhibit (4)-
16). x
*(4)-17 Indentures of ComEd to The First National Bank of
Chicago, Trustee (Harris Trust and Savings Bank,
successor Trustee), dated April 1, 1949, October 1,
1949, October 1, 1950, October 1, 1954, January 1,
1958, January 1, 1959 and December 1, 1961 (File No.
1-1839, Form 10-K for the year ended December 31,
1982, Exhibit (4)-20). x
*(4)-18 Indenture of ComEd dated February 15, 1973 to The
First National Bank of Chicago, Trustee (LaSalle Na-
tional Bank, successor Trustee), and Supplemental
Indenture thereto dated July 13, 1973 (File No. 2-
66100, Form S-16, Exhibit (b)-2). x
2
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
*(4)-19 Indenture dated as of September 1, 1987 between ComEd
and Citibank, N.A., Trustee relating to Notes (File
No. 33-20619, Form S-3, Exhibit (4)-13). x
*(4)-20 Supplemental Indenture to Indenture dated September
1, 1987 dated September 15, 1987 (File No. 33-20619,
Form S-3, Exhibit (4)-14). x
*(4)-21 Supplemental Indenture to Indenture dated September
1, 1987 dated May 18, 1988 (File No. 33-23036, Form
S-3, Exhibit (4)-14). x
*(4)-22 Supplemental Indenture to Indenture dated September
1, 1987 dated July 14, 1989 (File No. 33-32929, Form
S-3, Exhibit (4)-16). x
*(4)-23 Supplemental Indenture to Indenture dated September
1, 1987 dated April 1, 1991 (File No. 33-44018, Form
S-3, Exhibit (4)-21). x
*(4)-24 Supplemental Indenture to Indenture dated September
1, 1987 dated April 15, 1992 (File No. 33-48542,
Form S-3, Exhibit
(4)-22). x
*(4)-25 Supplemental Indenture to Indenture dated September
1, 1987 dated July 15, 1992 (File No. 33-53766, Form
S-3, Exhibit (4)-24). x
*(4)-26 Supplemental Indenture to Indenture dated September
1, 1987 dated October 15, 1993 (File No. 1-1839,
Form 10-Q for the quarter ended September 30, 1993,
Exhibit (4)-1). x
*(4)-27 Supplemental Indenture to Indenture dated September
1, 1987 dated April 1, 1994 (File No. 1-1839, Form
10-Q for the quarter ended March 31, 1994, Exhibit
(4)-1). x
(4)-28 Instrument of Resignation, Appointment and Acceptance
dated January 31, 1996, under the provisions of the
Mortgage dated July 1, 1923, and Indentures Supple-
mental thereto. x
(4)-29 Instrument dated as of January 31, 1996, for trustee
under the Mortgage dated July 1, 1923 and Indentures
Supplemental thereto. x
*(4)-30 Credit Agreement dated as of October 1, 1991, among
Commonwealth Edison Company, as borrower, the Banks
named therein and the other Lenders from time to
time parties thereto, and Citibank, N.A. (File No.
1-1839, Form 10-K for the year ended December 31,
1991, Exhibit (4)-27). x
*(4)-31 Credit Agreement dated as of October 1, 1991, among
Commonwealth Edison Company, as borrower, the Banks
named therein and the other Lenders from time to
time parties thereto, and Citibank, N.A. (File No.
1-1839, Form 10-K for the year ended December 31,
1991, Exhibit (4)-28). x
*(4)-32 Letter Agreement dated as of October 4, 1993, among
Commonwealth Edison Company and certain of the Banks
party to the Credit Agreement dated as of October 1,
1991 (File No. 1-1839, Form 10-K for the year ended
December 31, 1993, Exhibit (4)-28). x
3
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
*(4)-33 Term Loan Agreement dated as of January 7 1992, be-
tween Commonwealth Edison Company, as borrower, and
The First National Bank of Chicago, individually and
as agent (File No. 1-1839, Form 10-K for the year
ended December 31, 1992, Exhibit (4)-28). x
*(4)-34 First Amendment to Term Loan Agreement dated as of
January 9, 1995, by and among Commonwealth Edison
Company, The First National Bank of Chicago, indi-
vidually and as agent, and the banks party thereto
(File No. 1-1839, Form 10-K for the year ended De-
cember 31, 1994, Exhibit (4)-32). x
*(4)-35 Term Loan Agreement dated as of January 15, 1992, be-
tween Commonwealth Edison Company, as borrower, and
Westpac Banking Corporation, Chicago Branch, indi-
vidually and as agent (File No. 1-1839, Form 10-K
for the year ended December 31, 1992, Exhibit (4)-
29). x
*(4)-36 Term Loan Agreement dated as of January 16, 1992, be-
tween Commonwealth Edison Company, as borrower, and
The Bank of New York, individually and as agent
(File No. 1-1839, Form 10-K for the year ended De-
cember 31, 1992, Exhibit (4)-29). x
*(4)-37 Credit Agreement dated as of November 22, 1994, among
Unicom Enterprises Inc., the Banks Named Therein and
Citibank, N.A. (File No. 1-11375, Form 10-K for the
year ended December 31, 1994, Exhibit (4)-35). x
*(4)-38 Guaranty dated November 22, 1994, by Unicom Corpora-
tion in favor of the Lenders and LC Banks parties to
the aforementioned Credit Agreement with Unicom En-
terprises Inc. (File No. 1-11375, Form 10-K for the
year ended December 31, 1994, Exhibit (4)-36). x
*(4)-39 Guaranty dated November 22, 1994, by Unicom Corpora-
tion in favor of Citibank, N.A. (File No. 1-11375,
Form 10-K for the year ended December 31, 1994, Ex-
hibit (4)-37). x
*(10)-1 Nuclear Fuel Lease Agreement dated as of November 23,
1993, between CommEd Fuel Company, Inc., as Lessor,
and Commonwealth Edison Company, as Lessee (File No.
1-1839, Form 10-K for the year ended December 31,
1993, Exhibit (10)-1). x
+*(10)-2 Unicom Corporation Long-Term Incentive Plan (File No.
1-1839, ComEd Proxy Statement dated March 26, 1993,
Exhibit A). x
+*(10)-3 Amendment to Unicom Corporation Long-Term Incentive
Plan, effective September 1, 1994 (File No. 33-
56991, Form S-8, Exhibit (4)-4). x
+*(10)-4 1994 Long-Term Performance Unit Award for Executive
and Group Level Employes Payable in 1996 under the
1993 Long-Term Incentive Plan (File No. 1-1839, Form
10-K/A-1 for the year ended December 31, 1993, Ex-
hibit (10)-4). x x
+*(10)-5 1994 Long-Term Performance Unit Award for Executive
and Group Level Employes Payable in 1997 under the
1993 Long-Term Incentive Plan (File No. 1-1839, Form
10-K/A-1 for the year ended December 31, 1993, Ex-
hibit (10)-5). x x
4
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
+ (10)-6 1995 Long-Term Performance Unit Award for Executive
and Group Level Employees Payable in 1998 under the
Unicom Corporation Long-Term Incentive Plan, as
amended. x x
+*(10)-7 1995 Variable Compensation Award for Management Em-
ployees under the Unicom Corporation Long-Term In-
centive Plan (File Nos. 1-11375 and 1-1839, Form 10-
K for the year ended December 31, 1994, Exhibit
(10)-7). x x
+*(10)-8 1995 Award to Mr. O'Connor and Mr. Skinner under the
Unicom Corporation Long-Term Incentive Plan (File
Nos. 1-11375 and 1-1839, Form 10-K for the year
ended December 31, 1994, Exhibit (10)-8). x x
+ (10)-9 1996 Long-Term Performance Unit Award for Executive
and Group Level Employees Payable in 1999 under the
Unicom Corporation Long-Term Incentive Plan. x x
+ (10)-10 1996 Variable Compensation Award for Management Em-
ployees under the Unicom Corporation Long-Term In-
centive Plan. x x
+ (10)-11 1996 Award to Mr. O'Connor, Mr. Mullin and Mr. Skin-
ner under the Unicom Corporation Long-Term Incentive
Plan. x x
+ (10)-12 Unicom Corporation Deferred Compensation Unit Plan,
as amended. x x
+*(10)-13 Deferred Compensation Plan (included in Article Five
of Exhibit (3)-2 above). x
+*(10)-14 Management Incentive Compensation Plan, effective
January 1, 1989 (File No. 1-1839, Form 10-K for the
year ended December 31, 1988, Exhibit (10)-4). x
+*(10)-15 Amendments to Management Incentive Compensation Plan,
dated December 14, 1989 and March 21, 1990 (File No.
1-1839, Form 10-K for the year ended December 31,
1989, Exhibit (10)-5). x
+*(10)-16 Amendment to Management Incentive Compensation Plan,
dated March 21, 1991 (File No. 1-1839, Form 10-K for
the year ended December 31, 1991, Exhibit (10)-6). x
+ (10)-17 Retirement Plan for Directors, effective September 1,
1994, as amended through May 24, 1995. x
+ (10)-18 Retirement Plan for Directors, effective January 1,
1987, as amended through May 24, 1995. x
+ (10)-19 Unicom Corporation Outside Director Stock Award Plan
as amended. x
+*(10)-20 Executive Group Life Insurance Plan (File No. 1-1839,
Form 10-K for the year ended December 31, 1980, Ex-
hibit (10)-3). x
+*(10)-21 Amendment to the Executive Group Life Insurance Plan
(File No. 1-1839, Form 10-K for the year ended De-
cember 31, 1981, Exhibit (10)-4). x
+*(10)-22 Amendment to the Executive Group Life Insurance Plan
dated December 12, 1986 (File No. 1-1839, Form 10-K
for the year ended December 31, 1986, Exhibit (10)-
6). x
5
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT UNICOM COMED
------- ----------------------------------------------------- ------ -----
+*(10)-23 Amendment of Executive Group Life Insurance Plan to
implement program of "split dollar life insurance"
dated December 13, 1990 (File No. 1-1839, Form 10-K
for the year ended December 31, 1990, Exhibit (10)-
10). x
+*(10)-24 Commonwealth Edison Company Supplemental Management
Retirement Plan (File No. 1-1839, Form 10-K for the
year ended December 31, 1985, Exhibit (10)-6). x
+*(10)-25 Amendment of Executive Group Life Insurance Plan to
stabilize the death benefit applicable to partici-
pants dated July 22, 1992 (File No. 1-1839, Form 10-
K for the year ended December 31, 1992, Exhibit
(10)-13). x
+*(10)-26 Letter Agreement dated December 16, 1992 between Com-
monwealth Edison Company and Samuel K. Skinner (File
No. 1-1839, Form 10-K for the year ended December
31, 1992, Exhibit (10)-14). x
+ (10)-27 Amendment dated May 31, 1995 to Letter Agreement
dated December 16, 1992 between Commonwealth Edison
Company and Samuel K. Skinner. x
+ (10)-28 Letter Agreement dated November 14, 1995 between Com-
monwealth Edison Company and Leo F. Mullin. x
+*(10)-29 Commonwealth Edison Company Excess Benefit Savings
Plan (File No. 1-1839, Form 10-Q for the quarter
ended June 30, 1994, Exhibit (10)-2). x
+ (10)-30 Amendment No. 1 to Commonwealth Edison Company Excess
Benefit Savings Plan dated May 24, 1995. x
+ (10)-31 Unicom Corporation Stock Bonus Deferral Plan. x x
(12) Statement re computation of ratios of earnings to
fixed charges and ratios of earnings to fixed
charges and preferred and preference stock dividend
requirements for ComEd. x
(21)-1 Subsidiaries of Unicom Corporation. x
(21)-2 Subsidiaries of Commonwealth Edison Company. x
(23)-1 Consent of experts for Unicom Corporation. x
(23)-2 Consent of experts for Commonwealth Edison Company. x
(24)-1 Powers of attorney of Directors whose names are
signed to the Unicom Corporation Annual Report on
Form 10-K pursuant to such powers. x
(24)-2 Powers of attorney of Directors whose names are
signed to the Commonwealth Edison Company Annual Re-
port on Form 10-K pursuant to such powers. x
(99)-1 Unicom Corporation's Current Report on Form 8-K dated
January 26, 1996. x
(99)-2 Commonwealth Edison Company's Current Report on Form
8-K dated January 26, 1996. x
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Unicom and ComEd hereby
agree to furnish to the SEC, upon request, any instrument defining the rights
of holders of long-term debt of ComEd not filed as an exhibit herein. No such
instrument authorizes securities in excess of 10% of the total assets of ComEd.
6