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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | |
| ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2022March 31, 2024
or
| | |
| ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | | | | | | | | | | | | | |
| Commission File Number | | Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number | | IRS Employer Identification Number |
| | | | |
| 001-16169 | | EXELON CORPORATION | | 23-2990190 |
| | (a Pennsylvania corporation) 10 South Dearborn Street P.O. Box 805379 Chicago, Illinois 60680-5379 (800) 483-3220 | | |
| | | | |
| 001-01839 | | COMMONWEALTH EDISON COMPANY | | 36-0938600 |
| | (an Illinois corporation) 10 South Dearborn Street Chicago, Illinois 60603-2300 (312) 394-4321 | | |
| | | | |
| 000-16844 | | PECO ENERGY COMPANY | | 23-0970240 |
| | (a Pennsylvania corporation) 2301 Market Street P.O. Box 8699 2301 Market Street
Philadelphia, Pennsylvania 19101-8699 (215) 841-4000 | | |
| | | | |
| 001-01910 | | BALTIMORE GAS AND ELECTRIC COMPANY | | 52-0280210 |
| | (a Maryland corporation) 2 Center Plaza 110 West Fayette Street Baltimore, Maryland 21201-3708 (410) 234-5000 | | |
| | | | |
| 001-31403 | | PEPCO HOLDINGS LLC | | 52-2297449 |
| | (a Delaware limited liability company) 701 Ninth Street, N.W. Washington, District of Columbia 20068-0001 (202) 872-2000 | | |
| | | | |
| 001-01072 | | POTOMAC ELECTRIC POWER COMPANY | | 53-0127880 |
| | (a District of Columbia and Virginia corporation) 701 Ninth Street, N.W. Washington, District of Columbia 20068-00120068-0001 (202) 872-2000 | | |
| | | | |
| 001-01405 | | DELMARVA POWER & LIGHT COMPANY | | 51-0084283 |
| | (a Delaware and Virginia corporation) 500 North Wakefield Drive Newark, Delaware 19702-5440 (202) 872-2000 | | |
| | | | |
| 001-03559 | | ATLANTIC CITY ELECTRIC COMPANY | | 21-0398280 |
| | (a New Jersey corporation) 500 North Wakefield Drive Newark, Delaware 19702-5440 (202) 872-2000 | | |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| EXELON CORPORATION: | | | | |
| Common stock, without par value | | EXC | | The Nasdaq Stock Market LLC |
| | | | |
| PECO ENERGY COMPANY: | | | | |
| Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and unconditionally guaranteed by PECO Energy Company | | EXC/28N/A | | New York Stock ExchangeN/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exelon Corporation | Large Accelerated Filer | x | Accelerated Filer | ☐ | Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Commonwealth Edison Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| PECO Energy Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Baltimore Gas and Electric Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Pepco Holdings LLC | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Potomac Electric Power Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Delmarva Power & Light Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
| Atlantic City Electric Company | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x
The number of shares outstanding of each registrant’s common stock as of September 30, 2022March 31, 2024 was:
| | | | | |
| Exelon Corporation Common Stock, without par value | 993,742,0301,000,025,124 |
| Commonwealth Edison Company Common Stock, $12.50 par value | 127,021,394127,021,409 |
| PECO Energy Company Common Stock, without par value | 170,478,507 |
| Baltimore Gas and Electric Company Common Stock, without par value | 1,000 |
| Pepco Holdings LLC | not applicable |
| Potomac Electric Power Company Common Stock, $0.01 par value | 100 |
| Delmarva Power & Light Company Common Stock, $2.25 par value | 1,000 |
| Atlantic City Electric Company Common Stock, $3.00 par value | 8,546,017 |
TABLE OF CONTENTS
| | | | | | | | |
| GLOSSARY OF TERMS AND ABBREVIATIONS |
| Exelon Corporation and Related Entities |
| Exelon | | Exelon Corporation |
| ComEd | | Commonwealth Edison Company |
| PECO | | PECO Energy Company |
| BGE | | Baltimore Gas and Electric Company |
| Pepco Holdings or PHI | | Pepco Holdings LLC |
| Pepco | | Potomac Electric Power Company |
| DPL | | Delmarva Power & Light Company |
| ACE | | Atlantic City Electric Company |
| Registrants | | Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, collectively |
| Utility Registrants | | ComEd, PECO, BGE, Pepco, DPL, and ACE, collectively |
| | |
| | |
| BSC | | Exelon Business Services Company, LLC |
| Exelon Corporate | | Exelon in its corporate capacity as a holding company |
| PCI | | Potomac Capital Investment Corporation and its subsidiaries |
| PECO Trust III | | PECO Energy Capital Trust III |
| PECO Trust IV | | PECO Energy Capital Trust IV |
| | |
| PHI Corporate | | PHI in its corporate capacity as a holding company |
| PHISCO | | PHI Service Company |
| Former Related Entities |
| Constellation | | Constellation Energy Corporation |
| Generation | | Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC, a subsidiary of Exelon prior to separation on February 1, 2022) |
| | |
| | | | | | | | |
| GLOSSARY OF TERMS AND ABBREVIATIONS |
| Other Terms and Abbreviations | | |
2021 Form 10-K | | The Registrants' Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022 |
2021 Recast Form 10-K | | The Registrants' Current Report on Form 8-K filed with the SEC on June 30, 2022 to recast Exelon's consolidated financial statements and certain other financial information originally included in the 2021 Form 10-K |
Note - of the 2021 Recast2023 Form 10-K | | Reference to specific Combined Note to Consolidated Financial Statements in the 2021 Recastwithin Exelon's 2023 Annual Report on Form 10-K |
AECABO | | Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy sourceAccumulated Benefit Obligation |
| AFUDC | | Allowance for Funds Used During Construction |
| AMI | | Advanced Metering Infrastructure |
| AOCI | | Accumulated Other Comprehensive Income (Loss) |
| ARO | | Asset Retirement Obligation |
| ATM | | At the market |
| BGS | | Basic Generation Service |
CEJA (formerly Clean Energy Law in the Exelon 2021 Form 10-K)BSA | | Bill Stabilization Adjustment |
| CEJA | | Climate and Equitable Jobs Act; Illinois Public Act 102-0662 signed into law on September 15, 2021 |
| CERCLA | | Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended |
| CIP | | Conservation Incentive Program |
| CMC | | Carbon Mitigation Credit |
CODMCODMs | | Chief Operating Decision Maker(s)Makers |
| DC PLUG | | District of Columbia Power Line Undergrounding Initiative |
| DCPSC | | Public Service Commission of the District of Columbia |
| DEPSC | | Delaware Public Service Commission |
| DOEE | | District of Columbia Department of Energy & Environment |
DPPDPA | | Deferred Purchase PriceProsecution Agreement |
| DSIC | | Distribution System Improvement Charge |
| EIMA | | Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036) |
| EPA | | United States Environmental Protection Agency |
ERCOT | | Electric Reliability Council of Texas |
| ERISA | | Employee Retirement Income Security Act of 1974, as amended |
| ETAC | | Energy Transition Assistance Charge |
FEJA | | Illinois Public Act 99-0906 or Future Energy Jobs Act |
| FERC | | Federal Energy Regulatory Commission |
| GAAP | | Generally Accepted Accounting Principles in the United States |
| GCR | | Gas Cost Rate |
| GSA | | Generation Supply Adjustment |
GWhGWhs | | Gigawatt hourhours |
| ICC | | Illinois Commerce Commission |
| IIJA | | Infrastructure Investment and Jobs Act |
| Illinois Settlement Legislation | | Legislation enacted in 2007 affecting electric utilities in Illinois |
| IPA | | Illinois Power Agency |
| IRA | | Inflation Reduction Act |
| IRC | | Internal Revenue Code |
| IRS | | Internal Revenue Service |
| LIBOR | | London Interbank Offered Rate
| MDPSC | | Maryland Public Service Commission |
| MGP | | Manufactured Gas Plant |
| mmcf | | Million Cubic Feet |
| MRP | | Multi-Year Rate Plan |
| MWh | | Megawatt hour |
| N/A | | Not applicable |
| NAV | | Net Asset Value |
| | | | | | | | |
| GLOSSARY OF TERMS AND ABBREVIATIONS |
| Other Terms and Abbreviations | | |
mmcf | | Million Cubic Feet |
MW | | Megawatt |
MWh | | Megawatt hour |
N/A | | Not applicable |
NDT | | Nuclear Decommissioning Trust |
| NJBPU | | New Jersey Board of Public Utilities |
| NPNS | | Normal Purchase Normal Sale scope exception |
| NPS | | National Park Service |
| NRD | | Natural Resources Damages |
| OCI | | Other Comprehensive Income |
| OPEB | | Other Postretirement Employee Benefits |
| PAPUC | | Pennsylvania Public Utility Commission |
| PGC | | Purchased Gas Cost Clause |
| PJM | | PJM Interconnection, LLC |
| POLR | | Provider of Last Resort |
| PPA | | Power Purchase Agreement |
PP&EPRPs | | Property, plant, and equipment |
PRP | | Potentially Responsible Parties |
| REC | | Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source |
| Regulatory Agreement Units | | Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting |
RFP | | Request for Proposal |
| Rider | | Reconcilable Surcharge Recovery Mechanism |
| ROE | | Return on equity |
| ROU | | Right-of-use |
RPS | | Renewable Energy Portfolio Standards |
| RTO | | Regional Transmission Organization |
| SEC | | United States Securities and Exchange Commission |
| SOFR | | Secured Overnight Financing Rate |
| SOS | | Standard Offer Service |
STRIDE | | Maryland Strategic Infrastructure Development and Enhancement Program |
| TCJA | | Tax Cuts and Jobs Act |
Transition Bonds | | Transition Bonds issued by Atlantic City Electric Transition Funding LLC |
| ZEC | | Zero Emission Credit or Zero Emission Certificate |
FILING FORMAT
This combined Form 10-Q is being filed separately by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995federal securities laws that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,��” “estimates,” “predicts,” "should," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, as well as the items discussed in (1) the 20212023 Form 10-K in (a) Part I, ITEM 1A. Risk Factors; (2) the 2021 Recast Form 10-K in (a)Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (b)(c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 17, 18,Commitments and Contingencies; (3)(2) this Quarterly Report on Form 10-Q in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 13,11, Commitments and Contingencies; and (4)(3) other factors discussed in filings with the SEC by the Registrants.
Investors are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.
WHERE TO FIND MORE INFORMATION
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and free of charge at the Registrants' website at www.exeloncorp.com. Information contained on the Registrants' website shall not be deemed incorporated into, or to be a part of, this Report.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited) | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31, |
| (In millions, except per share data) | | | | | 2024 | | 2023 |
| Operating revenues | | | | | | | |
| Electric operating revenues | | | | | $ | 5,198 | | | $ | 4,462 | |
| Natural gas operating revenues | | | | | 739 | | | 822 | |
| Revenues from alternative revenue programs | | | | | 106 | | | 279 | |
| Total operating revenues | | | | | 6,043 | | | 5,563 | |
| Operating expenses | | | | | | | |
| Purchased power | | | | | 2,197 | | | 1,733 | |
| Purchased fuel | | | | | 213 | | | 358 | |
| | | | | | | |
| Operating and maintenance | | | | | 1,271 | | | 1,151 | |
| Depreciation and amortization | | | | | 879 | | | 860 | |
| Taxes other than income taxes | | | | | 371 | | | 355 | |
| Total operating expenses | | | | | 4,931 | | | 4,457 | |
| | | | | | | |
| Gain on sale of assets and businesses | | | | | 2 | | | — | |
| | | | | | | |
| | | | | | | |
| Operating income | | | | | 1,114 | | | 1,106 | |
| Other income and (deductions) | | | | | | | |
| Interest expense, net | | | | | (462) | | | (406) | |
| Interest expense to affiliates | | | | | (6) | | | (6) | |
| Other, net | | | | | 75 | | | 109 | |
| Total other income and (deductions) | | | | | (393) | | | (303) | |
| Income before income taxes | | | | | 721 | | | 803 | |
| Income taxes | | | | | 63 | | | 134 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net income attributable to common shareholders | | | | | $ | 658 | | | $ | 669 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Comprehensive income, net of income taxes | | | | | | | |
| Net income | | | | | $ | 658 | | | $ | 669 | |
| Other comprehensive income (loss), net of income taxes | | | | | | | |
| Pension and non-pension postretirement benefit plans: | | | | | | | |
| | | | | | | |
| Actuarial losses reclassified to periodic benefit cost | | | | | 5 | | | 3 | |
| Pension and non-pension postretirement benefit plans valuation adjustments | | | | | (24) | | | (10) | |
| Unrealized gains on cash flow hedges | | | | | 33 | | | 6 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Other comprehensive income (loss) | | | | | 14 | | | (1) | |
| | | | | | | |
| | | | | | | |
| Comprehensive income attributable to common shareholders | | | | | $ | 672 | | | $ | 668 | |
| | | | | | | |
| Average shares of common stock outstanding: | | | | | | | |
| Basic | | | | | 1,000 | | | 995 | |
Assumed exercise and/or distributions of stock-based awards(a) | | | | | 1 | | | 1 | |
| Diluted | | | | | 1,001 | | | 996 | |
| | | | | | | |
| Earnings per average common share | | | | | | | |
| Basic | | | | | $ | 0.66 | | | $ | 0.67 | |
| Diluted | | | | | $ | 0.66 | | | $ | 0.67 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| (In millions, except per share data) | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues | | | | | | | |
| Electric operating revenues | $ | 4,557 | | | $ | 4,736 | | | $ | 12,972 | | | $ | 12,344 | |
| Natural gas operating revenues | 224 | | | 174 | | | 1,348 | | | 1,041 | |
| Revenues from alternative revenue programs | 64 | | | (47) | | | 92 | | | 129 | |
| Total operating revenues | 4,845 | | | 4,863 | | | 14,412 | | | 13,514 | |
| Operating expenses | | | | | | | |
| Purchased power | 1,404 | | | 1,452 | | | 4,152 | | | 3,598 | |
| Purchased fuel | 80 | | | 40 | | | 524 | | | 316 | |
| Purchased power and fuel from affiliates | — | | | 317 | | | 159 | | | 867 | |
| Operating and maintenance | 1,148 | | | 1,187 | | | 3,436 | | | 3,340 | |
| Depreciation and amortization | 825 | | | 758 | | | 2,472 | | | 2,253 | |
| Taxes other than income taxes | 377 | | | 353 | | | 1,061 | | | 983 | |
| Total operating expenses | 3,834 | | | 4,107 | | | 11,804 | | | 11,357 | |
| | | | | | | |
| (Loss) gain on sales of assets and businesses | — | | | — | | | (2) | | | 3 | |
| | | | | | | |
| | | | | | | |
| Operating income | 1,011 | | | 756 | | | 2,606 | | | 2,160 | |
| Other income and (deductions) | | | | | | | |
| Interest expense, net | (359) | | | (318) | | | (1,044) | | | (947) | |
| Interest expense to affiliates | (6) | | | (6) | | | (19) | | | (20) | |
| Other, net | 122 | | | 60 | | | 435 | | | 190 | |
| Total other income and (deductions) | (243) | | | (264) | | | (628) | | | (777) | |
| Income from continuing operations before income taxes | 768 | | | 492 | | | 1,978 | | | 1,383 | |
| Income taxes | 92 | | | 35 | | | 356 | | | 76 | |
| | | | | | | |
| Net income from continuing operations after income taxes | 676 | | | 457 | | | 1,622 | | | 1,307 | |
| Net income from discontinued operations after income taxes (Note 2) | — | | | 772 | | | 117 | | | 134 | |
| Net income | 676 | | | 1,229 | | | 1,739 | | | 1,441 | |
| Net income attributable to noncontrolling interests | — | | | 26 | | | 1 | | | 126 | |
| Net income attributable to common shareholders | $ | 676 | | | $ | 1,203 | | | $ | 1,738 | | | $ | 1,315 | |
| | | | | | | |
| Amounts attributable to common shareholders: | | | | | | | |
| Net income from continuing operations | 676 | | | 457 | | | 1,622 | | | 1,307 | |
| Net income from discontinued operations | — | | | 746 | | | 116 | | | 8 | |
| Net income attributable to common shareholders | $ | 676 | | | $ | 1,203 | | | $ | 1,738 | | | $ | 1,315 | |
| | | | | | | |
| Comprehensive income, net of income taxes | | | | | | | |
| Net income | $ | 676 | | | $ | 1,229 | | | $ | 1,739 | | | $ | 1,441 | |
| Other comprehensive income (loss), net of income taxes | | | | | | | |
| Pension and non-pension postretirement benefit plans: | | | | | | | |
| Prior service benefit reclassified to periodic benefit cost | — | | | (1) | | | — | | | (4) | |
| Actuarial loss reclassified to periodic benefit cost | 9 | | | 56 | | | 33 | | | 167 | |
| Pension and non-pension postretirement benefit plan valuation adjustment | — | | | 14 | | | 2 | | | 15 | |
| | | | | | | |
| | | | | | | |
| Unrealized gain on foreign currency translation | — | | | (3) | | | — | | | (1) | |
| | | | | | | |
| Other comprehensive income | 9 | | | 66 | | | 35 | | | 177 | |
| Comprehensive income | 685 | | | 1,295 | | | 1,774 | | | 1,618 | |
| Comprehensive income attributable to noncontrolling interests | — | | | 26 | | | 1 | | | 126 | |
| Comprehensive income attributable to common shareholders | $ | 685 | | | $ | 1,269 | | | $ | 1,773 | | | $ | 1,492 | |
| | | | | | | |
| Average shares of common stock outstanding: | | | | | | | |
| Basic | 988 | | | 979 | | | 983 | | | 978 | |
| Assumed exercise and/or distributions of stock-based awards | 1 | | | 1 | | | 1 | | | 1 | |
Diluted(a) | 989 | | | 980 | | | 984 | | | 979 | |
| | | | | | | |
| Earnings per average common share from continuing operations | | | | | | | |
| Basic | $ | 0.68 | | | $ | 0.47 | | | $ | 1.65 | | | $ | 1.33 | |
| Diluted | $ | 0.68 | | | $ | 0.47 | | | $ | 1.65 | | | $ | 1.33 | |
| | | | | | | |
| Earnings per average common share from discontinued operations | | | | | | | |
| Basic | $ | — | | | $ | 0.76 | | | $ | 0.12 | | | $ | 0.01 | |
| Diluted | $ | — | | | $ | 0.76 | | | $ | 0.12 | | | $ | 0.01 | |
(a)The numberdilutive effects of stock-based compensation awards are calculated using the treasury stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect were nonemethod for the three and nine months ended September 30, 2022 and 2021, respectively.all periods presented.
See the Combined Notes to Consolidated Financial Statements
9
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 1,739 | | | $ | 1,441 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization | 2,679 | | | 6,204 | |
| Asset impairments | 46 | | | 541 | |
| | | |
| Gain on sales of assets and businesses | (8) | | | (147) | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 256 | | | (45) | |
| Net fair value changes related to derivatives | (59) | | | (1,244) | |
| Net realized and unrealized losses (gains) on NDT funds | 205 | | | (383) | |
| Net unrealized losses on equity investments | 16 | | | 83 | |
| Other non-cash operating activities | 265 | | | (293) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (1,049) | | | (254) | |
| Inventories | (121) | | | (101) | |
| Accounts payable and accrued expenses | 823 | | | 354 | |
| Option premiums paid, net | (39) | | | (186) | |
| Collateral received, net | 1,456 | | | 2,111 | |
| Income taxes | 3 | | | 250 | |
| Regulatory assets and liabilities, net | (689) | | | (367) | |
| Pension and non-pension postretirement benefit contributions | (596) | | | (602) | |
| Other assets and liabilities | (786) | | | (3,221) | |
| Net cash flows provided by operating activities | 4,141 | | | 4,141 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (5,179) | | | (5,970) | |
| Proceeds from NDT fund sales | 488 | | | 5,766 | |
| Investment in NDT funds | (516) | | | (5,900) | |
| Collection of DPP | 169 | | | 3,052 | |
| | | |
| | | |
| Proceeds from sales of assets and businesses | 16 | | | 801 | |
| | | |
| | | |
| Other investing activities | 36 | | | 40 | |
| Net cash flows used in investing activities | (4,986) | | | (2,211) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (335) | | | (744) | |
| Proceeds from short-term borrowings with maturities greater than 90 days | 1,150 | | | 1,380 | |
| Repayments on short-term borrowings with maturities greater than 90 days | (925) | | | — | |
| Issuance of long-term debt | 5,801 | | | 3,406 | |
| Retirement of long-term debt | (2,067) | | | (1,618) | |
| | | |
| Issuance of common stock | 563 | | | — | |
| | | |
| | | |
| | | |
| Dividends paid on common stock | (999) | | | (1,121) | |
| Acquisition of CENG noncontrolling interest | — | | | (885) | |
| Proceeds from employee stock plans | 26 | | | 63 | |
| Transfer of cash, restricted cash, and cash equivalents to Constellation | (2,594) | | | — | |
| Other financing activities | (121) | | | (93) | |
| Net cash flows provided by financing activities | 499 | | | 388 | |
| (Decrease) increase in cash, restricted cash, and cash equivalents | (346) | | | 2,318 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 1,619 | | | 1,166 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 1,273 | | | $ | 3,484 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (147) | | | $ | (334) | |
| Increase in DPP | 348 | | | 2,933 | |
| Increase in PP&E related to ARO update | 331 | | | 574 | |
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 658 | | | $ | 669 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation, amortization, and accretion | 880 | | | 860 | |
| | | |
| | | |
| Gain on sales of assets and businesses | (2) | | | — | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 46 | | | 113 | |
| Net fair value changes related to derivatives | 1 | | | — | |
| | | |
| | | |
| Other non-cash operating activities | 39 | | | (138) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (309) | | | 106 | |
| Inventories | 12 | | | 102 | |
| Accounts payable and accrued expenses | (238) | | | (482) | |
| | | |
| Collateral received (paid), net | 7 | | | (214) | |
| Income taxes | 21 | | | 23 | |
| Regulatory assets and liabilities, net | 252 | | | (324) | |
| Pension and non-pension postretirement benefit contributions | (111) | | | (44) | |
| Other assets and liabilities | (264) | | | (187) | |
| Net cash flows provided by operating activities | 992 | | | 484 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (1,767) | | | (1,881) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Proceeds from sales of assets and businesses | 2 | | | — | |
| | | |
| | | |
| Other investing activities | (2) | | | 10 | |
| Net cash flows used in investing activities | (1,767) | | | (1,871) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (317) | | | (1,130) | |
| Proceeds from short-term borrowings with maturities greater than 90 days | 150 | | | — | |
| Repayments on short-term borrowings with maturities greater than 90 days | (150) | | | (150) | |
| Issuance of long-term debt | 2,625 | | | 3,925 | |
| Retirement of long-term debt | (901) | | | (857) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Dividends paid on common stock | (381) | | | (358) | |
| Proceeds from employee stock plans | 11 | | | 10 | |
| | | |
| Other financing activities | (55) | | | (60) | |
| Net cash flows provided by financing activities | 982 | | | 1,380 | |
| Increase (decrease) in cash, restricted cash, and cash equivalents | 207 | | | (7) | |
| Cash, restricted cash, and cash equivalents at beginning of period | 1,101 | | | 1,090 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 1,308 | | | $ | 1,083 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (117) | | | $ | (201) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
10
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | ASSETS | | | |
| Current assets | Current assets | |
| Current assets | |
| Current assets | |
| Cash and cash equivalents | |
| Cash and cash equivalents | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 446 | | | $ | 672 | |
| Restricted cash and cash equivalents | Restricted cash and cash equivalents | 744 | | | 321 | |
| | Accounts receivable | Accounts receivable | |
| Accounts receivable | |
| Accounts receivable | |
| Customer accounts receivable | |
| Customer accounts receivable | |
| Customer accounts receivable | Customer accounts receivable | 2,129 | | 2,189 | 2,896 | | 2,659 |
| Customer allowance for credit losses | Customer allowance for credit losses | (341) | | (320) | Customer allowance for credit losses | (346) | | (317) |
| Customer accounts receivable, net | Customer accounts receivable, net | 1,788 | | | 1,869 | |
| Other accounts receivable | Other accounts receivable | 1,726 | | 1,068 | Other accounts receivable | 1,131 | | 1,101 |
| Other allowance for credit losses | Other allowance for credit losses | (84) | | (72) | Other allowance for credit losses | (96) | | (82) |
| Other accounts receivable, net | Other accounts receivable, net | 1,642 | | | 996 | |
| Inventories, net | Inventories, net | |
| Fossil fuel | Fossil fuel | 235 | | | 105 | |
| Fossil fuel | |
| Fossil fuel | |
| Materials and supplies | Materials and supplies | 522 | | | 476 | |
| Regulatory assets | Regulatory assets | 1,300 | | | 1,296 | |
| Other | Other | 378 | | | 387 | |
| Current assets of discontinued operations | — | | | 7,835 | |
| Total current assets | Total current assets | 7,055 | | | 13,957 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $15,517 and $14,430 as of September 30, 2022 and December 31, 2021, respectively) | 67,572 | | | 64,558 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $17,711 and $17,251 as of March 31, 2024 and December 31, 2023, respectively) | |
| Deferred debits and other assets | Deferred debits and other assets | |
| Regulatory assets | |
| Regulatory assets | |
| Regulatory assets | Regulatory assets | 8,224 | | | 8,224 | |
| Goodwill | Goodwill | 6,630 | | | 6,630 | |
| Receivable related to Regulatory Agreement Units | Receivable related to Regulatory Agreement Units | 2,658 | | | — | |
| Investments | Investments | 230 | | | 250 | |
| Other | Other | 1,086 | | | 885 | |
| Property, plant, and equipment, deferred debits, and other assets of discontinued operations | — | | | 38,509 | |
| Total deferred debits and other assets | Total deferred debits and other assets | 18,828 | | | 54,498 | |
| Total assets | Total assets | $ | 93,455 | | | $ | 133,013 | |
See the Combined Notes to Consolidated Financial Statements
11
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | Short-term borrowings | $ | 1,690 | | | $ | 1,248 | |
| Long-term debt due within one year | Long-term debt due within one year | 1,300 | | | 2,153 | |
| Accounts payable | Accounts payable | 2,693 | | | 2,379 | |
| Accrued expenses | Accrued expenses | 1,213 | | | 1,137 | |
| Payables to affiliates | Payables to affiliates | 5 | | | 5 | |
| Customer deposits | |
| Regulatory liabilities | Regulatory liabilities | 493 | | | 376 | |
| Mark-to-market derivative liabilities | Mark-to-market derivative liabilities | — | | | 18 | |
| Unamortized energy contract liabilities | Unamortized energy contract liabilities | 10 | | | 89 | |
| Other | Other | 1,313 | | | 766 | |
| Current liabilities of discontinued operations | — | | | 7,940 | |
| Total current liabilities | Total current liabilities | 8,717 | | | 16,111 | |
| Long-term debt | Long-term debt | 35,283 | | | 30,749 | |
| Long-term debt to financing trusts | Long-term debt to financing trusts | 390 | | | 390 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 11,113 | | | 10,611 | |
| Regulatory liabilities | Regulatory liabilities | 8,844 | | | 9,628 | |
| Pension obligations | Pension obligations | 1,366 | | | 2,051 | |
| Non-pension postretirement benefit obligations | Non-pension postretirement benefit obligations | 796 | | | 811 | |
| Asset retirement obligations | Asset retirement obligations | 266 | | | 271 | |
| Mark-to-market derivative liabilities | Mark-to-market derivative liabilities | 67 | | | 201 | |
| Unamortized energy contract liabilities | Unamortized energy contract liabilities | 37 | | | 146 | |
| | Other | Other | 1,994 | | | 1,573 | |
| Long-term debt, deferred credits, and other liabilities of discontinued operations | — | | | 25,676 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 24,483 | | | 50,968 | |
| Total liabilities | Total liabilities | 68,873 | | | 98,218 | |
| Commitments and contingencies | Commitments and contingencies | | Commitments and contingencies | | | |
| | Shareholders’ equity | Shareholders’ equity | |
| Common stock (No par value, 2,000 shares authorized, 994 shares and 979 shares outstanding at September 30, 2022 and December 31, 2021, respectively) | 20,895 | | | 20,324 | |
| Treasury stock, at cost (2 shares at September 30, 2022 and December 31, 2021) | (123) | | | (123) | |
| Shareholders’ equity | |
| Shareholders’ equity | |
| Common stock (No par value, 2,000 shares authorized, 1,000 shares and 999 shares outstanding as of March 31, 2024 and December 31, 2023, respectively) | |
| Common stock (No par value, 2,000 shares authorized, 1,000 shares and 999 shares outstanding as of March 31, 2024 and December 31, 2023, respectively) | |
| Common stock (No par value, 2,000 shares authorized, 1,000 shares and 999 shares outstanding as of March 31, 2024 and December 31, 2023, respectively) | |
| Treasury stock, at cost (2 shares as of March 31, 2024 and December 31, 2023) | |
| Retained earnings | Retained earnings | 4,502 | | | 16,942 | |
| Accumulated other comprehensive loss, net | Accumulated other comprehensive loss, net | (692) | | | (2,750) | |
| Total shareholders’ equity | Total shareholders’ equity | 24,582 | | | 34,393 | |
| Noncontrolling interests | — | | | 402 | |
| Total equity | 24,582 | | | 34,795 | |
| | Total liabilities and shareholders’ equity | Total liabilities and shareholders’ equity | $ | 93,455 | | | $ | 133,013 | |
| | Total liabilities and shareholders’ equity | |
| | Total liabilities and shareholders’ equity | |
See the Combined Notes to Consolidated Financial Statements
12
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 |
(In millions, shares
in thousands) | Issued
Shares | | Common
Stock | | Treasury
Stock | | Retained
Earnings | | Accumulated
Other
Comprehensive
Loss, net | | Noncontrolling
Interests | | Total Shareholders'
Equity |
| Balance, December 31, 2021 | 981,291 | | | $ | 20,324 | | | $ | (123) | | | $ | 16,942 | | | $ | (2,750) | | | $ | 402 | | | $ | 34,795 | |
| Net income | — | | | — | | | — | | | 597 | | | — | | | 1 | | | 598 | |
| Long-term incentive plan activity | 540 | | | (13) | | | — | | | — | | | — | | | — | | | (13) | |
| Employee stock purchase plan issuances | 211 | | | 9 | | | — | | | — | | | — | | | — | | | 9 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (7) | | | (7) | |
| | | | | | | | | | | | | |
| Distribution of Constellation (Note 2) | — | | | (21) | | | — | | | (13,179) | | | 2,023 | | | (396) | | | (11,573) | |
Common stock dividends ($0.34/common share) | — | | | — | | | — | | | (332) | | | — | | | — | | | (332) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 14 | | | — | | | 14 | |
| | | | | | | | | | | | | |
| Balance, March 31, 2022 | 982,042 | | | $ | 20,299 | | | $ | (123) | | | $ | 4,028 | | | $ | (713) | | | $ | — | | | $ | 23,491 | |
| Net income | — | | | — | | | — | | | 465 | | | — | | | — | | | 465 | |
| Long-term incentive plan activity | 21 | | | 10 | | | — | | | — | | | — | | | — | | | 10 | |
| Employee stock purchase plan issuances | 242 | | | 10 | | | — | | | — | | | — | | | — | | | 10 | |
| | | | | | | | | | | | | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Common stock dividends ($0.34/common share) | — | | | — | | | — | | | (332) | | | — | | | — | | | (332) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 12 | | | — | | | 12 | |
| | | | | | | | | | | | | |
| Balance, June 30, 2022 | 982,305 | | | $ | 20,319 | | | $ | (123) | | | $ | 4,161 | | | $ | (701) | | | $ | — | | | $ | 23,656 | |
| Net income | — | | | — | | | — | | | 676 | | | — | | | — | | | 676 | |
| Long-term incentive plan activity | — | | | 3 | | | — | | | — | | | — | | | — | | | 3 | |
| Employee stock purchase plan issuances | 275 | | | 10 | | | — | | | — | | | — | | | — | | | 10 | |
| Issuance of common stock | 12,995 | | | 563 | | | — | | | — | | | — | | | — | | | 563 | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
Common stock dividends ($0.34/common share) | — | | | — | | | — | | | (335) | | | — | | | — | | | (335) | |
| Other comprehensive income net of income taxes | — | | | — | | | — | | | — | | | 9 | | | — | | | 9 | |
| Balance, September 30, 2022 | 995,575 | | | $ | 20,895 | | | $ | (123) | | | $ | 4,502 | | | $ | (692) | | | $ | — | | | $ | 24,582 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2024 |
(In millions, shares
in thousands) | Issued
Shares | | Common
Stock | | Treasury
Stock | | Retained
Earnings | | Accumulated
Other
Comprehensive
Loss, net | | | | Total Shareholders'
Equity |
| Balance at December 31, 2023 | 1,001,249 | | | $ | 21,114 | | | $ | (123) | | | $ | 5,490 | | | $ | (726) | | | | | $ | 25,755 | |
| Net income | — | | | — | | | — | | | 658 | | | — | | | | | 658 | |
| Long-term incentive plan activity | 333 | | | 2 | | | — | | | — | | | — | | | | | 2 | |
| Employee stock purchase plan issuances | 276 | | | 13 | | | — | | | — | | | — | | | | | 13 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Common stock dividends ($0.38/common share) | — | | | — | | | — | | | (381) | | | | | | | (381) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 14 | | | | | 14 | |
| | | | | | | | | | | | | |
| Balance at March 31, 2024 | 1,001,858 | | | $ | 21,129 | | | $ | (123) | | | $ | 5,767 | | | $ | (712) | | | | | $ | 26,061 | |
| | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 |
(In millions, shares
in thousands) | Issued
Shares | | Common
Stock | | Treasury
Stock | | Retained
Earnings | | Accumulated
Other
Comprehensive
Loss, net | | | | Total Shareholders'
Equity |
| Balance at December 31, 2022 | 995,830 | | | $ | 20,908 | | | $ | (123) | | | $ | 4,597 | | | $ | (638) | | | | | $ | 24,744 | |
| Net income | — | | | — | | | — | | | 669 | | | — | | | | | 669 | |
| Long-term incentive plan activity | 306 | | | 1 | | | — | | | — | | | — | | | | | 1 | |
| Employee stock purchase plan issuances | 266 | | | 12 | | | — | | | — | | | — | | | | | 12 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Common stock dividends ($0.36/common share) | — | | | — | | | — | | | (359) | | | — | | | | | (359) | |
| Other comprehensive loss, net of income taxes | — | | | — | | | — | | | — | | | (1) | | | | | (1) | |
| | | | | | | | | | | | | |
| Balance at March 31, 2023 | 996,402 | | | $ | 20,921 | | | $ | (123) | | | $ | 4,907 | | | $ | (639) | | | | | $ | 25,066 | |
| | | | | | | | | | | | | |
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See the Combined Notes to Consolidated Financial Statements
13
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 |
(In millions, shares
in thousands) | Issued
Shares | | Common
Stock | | Treasury
Stock | | Retained
Earnings | | Accumulated
Other
Comprehensive
Loss, net | | Noncontrolling
Interests | | Total Shareholders'
Equity |
| Balance, December 31, 2020 | 977,466 | | | $ | 19,373 | | | $ | (123) | | | $ | 16,735 | | | $ | (3,400) | | | $ | 2,283 | | | $ | 34,868 | |
| Net (loss) income | — | | | — | | | — | | | (289) | | | — | | | 25 | | | (264) | |
| Long-term incentive plan activity | 640 | | | 5 | | | — | | | — | | | — | | | — | | | 5 | |
| Employee stock purchase plan issuances | 902 | | | 34 | | | — | | | — | | | — | | | — | | | 34 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (10) | | | (10) | |
| | | | | | | | | | | | | |
Common stock dividends ($0.38/common share) | — | | | — | | | — | | | (374) | | | — | | | — | | | (374) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 54 | | | — | | | 54 | |
| | | | | | | | | | | | | |
| Balance, March 31, 2021 | 979,008 | | | $ | 19,412 | | | $ | (123) | | | $ | 16,072 | | | $ | (3,346) | | | $ | 2,298 | | | $ | 34,313 | |
| Net income | — | | | — | | | — | | | 401 | | | — | | | 75 | | | 476 | |
| Long-term incentive plan activity | 237 | | | 24 | | | — | | | — | | | — | | | — | | | 24 | |
| Employee stock purchase plan issuances | 420 | | | 18 | | | — | | | — | | | — | | | — | | | 18 | |
| | | | | | | | | | | | | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | — | | | (13) | | | (13) | |
| | | | | | | | | | | | | |
Common stock dividends ($0.38/common share) | — | | | — | | | — | | | (375) | | | — | | | — | | | (375) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 57 | | | — | | | 57 | |
| Balance, June 30, 2021 | 979,665 | | | $ | 19,454 | | | $ | (123) | | | $ | 16,098 | | | $ | (3,289) | | | $ | 2,360 | | | $ | 34,500 | |
| Net Income | — | | | — | | | — | | | 1,203 | | | — | | | 26 | | | 1,229 | |
| Long-term incentive plan activity | 94 | | | 9 | | | — | | | — | | | — | | | — | | | 9 | |
| Employee stock purchase plan issuances | 391 | | | 18 | | | — | | | — | | | — | | | — | | | 18 | |
| Changes in equity of noncontrolling interests | — | | | — | | | — | | | — | | | —�� | | | (13) | | | (13) | |
| Acquisition of CENG noncontrolling interest | — | | | 1,080 | | | — | | | — | | | — | | | (1,965) | | | (885) | |
| Deferred tax adjustment related to acquisition of CENG noncontrolling interest | — | | | (290) | | | — | | | — | | | — | | | — | | | (290) | |
Common stock dividends ($0.38/common share) | — | | | — | | | — | | | (375) | | | — | | | — | | | (375) | |
| Other comprehensive income, net of income taxes | — | | | — | | | — | | | — | | | 66 | | | — | | | 66 | |
| Balance, September 30, 2021 | 980,150 | | | $ | 20,271 | | | $ | (123) | | | $ | 16,926 | | | $ | (3,223) | | | $ | 408 | | | $ | 34,259 | |
See the Combined Notes to Consolidated Financial Statements
14
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues | | | | | | | |
| Electric operating revenues | $ | 1,284 | | | $ | 1,812 | | | $ | 4,359 | | | $ | 4,789 | |
| Revenues from alternative revenue programs | 88 | | | (32) | | | 163 | | | 32 | |
| Operating revenues from affiliates | 6 | | | 9 | | | 14 | | | 19 | |
| Total operating revenues | 1,378 | | | 1,789 | | | 4,536 | | | 4,840 | |
| Operating expenses | | | | | | | |
| Purchased power | 121 | | | 610 | | | 982 | | | 1,472 | |
| Purchased power from affiliate | — | | | 93 | | | 59 | | | 256 | |
| Operating and maintenance | 286 | | | 257 | | | 809 | | | 752 | |
| Operating and maintenance from affiliates | 69 | | | 73 | | | 236 | | | 217 | |
| Depreciation and amortization | 333 | | | 304 | | | 982 | | | 893 | |
| Taxes other than income taxes | 104 | | | 91 | | | 289 | | | 243 | |
| Total operating expenses | 913 | | | 1,428 | | | 3,357 | | | 3,833 | |
| Loss on sales of assets | — | | | — | | | (2) | | | — | |
| Operating income | 465 | | | 361 | | | 1,177 | | | 1,007 | |
| Other income and (deductions) | | | | | | | |
| Interest expense, net | (101) | | | (95) | | | (298) | | | (282) | |
| Interest expense to affiliates | (3) | | | (3) | | | (10) | | | (10) | |
| Other, net | 14 | | | 13 | | | 40 | | | 35 | |
| Total other income and (deductions) | (90) | | | (85) | | | (268) | | | (257) | |
| Income before income taxes | 375 | | | 276 | | | 909 | | | 750 | |
| Income taxes | 84 | | | 56 | | | 203 | | | 141 | |
| Net income | $ | 291 | | | $ | 220 | | | $ | 706 | | | $ | 609 | |
| Comprehensive income | $ | 291 | | | $ | 220 | | | $ | 706 | | | $ | 609 | |
See the Combined Notes to Consolidated Financial Statements
15
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 706 | | | $ | 609 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 982 | | | 893 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 192 | | | 211 | |
| | | |
| Other non-cash operating activities | (89) | | | 95 | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (351) | | | (72) | |
| Receivables from and payables to affiliates, net | (54) | | | (16) | |
| Inventories | (9) | | | (6) | |
| Accounts payable and accrued expenses | 226 | | | (36) | |
| Collateral received, net | 69 | | | 68 | |
| Income taxes | — | | | (9) | |
| Regulatory assets and liabilities, net | (499) | | | (250) | |
| Pension and non-pension postretirement benefit contributions | (179) | | | (176) | |
| Other assets and liabilities | (152) | | | (126) | |
| Net cash flows provided by operating activities | 842 | | | 1,185 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (1,801) | | | (1,723) | |
| | | |
| | | |
| | | |
| | | |
| Other investing activities | 21 | | | 20 | |
| Net cash flows used in investing activities | (1,780) | | | (1,703) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | 233 | | | (323) | |
| Issuance of long-term debt | 750 | | | 1,150 | |
| Retirement of long-term debt | — | | | (350) | |
| | | |
| Dividends paid on common stock | (434) | | | (380) | |
| Contributions from parent | 503 | | | 593 | |
| | | |
| | | |
| Other financing activities | (10) | | | (16) | |
| Net cash flows provided by financing activities | 1,042 | | | 674 | |
| Increase in cash, restricted cash, and cash equivalents | 104 | | | 156 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 384 | | | 405 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 488 | | | $ | 561 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (30) | | | $ | (118) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
16
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31, |
| (In millions) | | | | | 2024 | | 2023 |
| Operating revenues | | | | | | | |
| Electric operating revenues | | | | | $ | 2,074 | | | $ | 1,511 | |
| Revenues from alternative revenue programs | | | | | 19 | | | 153 | |
| Operating revenues from affiliates | | | | | 2 | | | 3 | |
| Total operating revenues | | | | | 2,095 | | | 1,667 | |
| Operating expenses | | | | | | | |
| Purchased power | | | | | 907 | | | 488 | |
| | | | | | | |
| Operating and maintenance | | | | | 318 | | | 254 | |
| Operating and maintenance from affiliates | | | | | 100 | | | 83 | |
| Depreciation and amortization | | | | | 362 | | | 338 | |
| Taxes other than income taxes | | | | | 94 | | | 93 | |
| Total operating expenses | | | | | 1,781 | | | 1,256 | |
| | | | | | | |
| Operating income | | | | | 314 | | | 411 | |
| Other income and (deductions) | | | | | | | |
| Interest expense, net | | | | | (119) | | | (114) | |
| Interest expense to affiliates | | | | | (3) | | | (3) | |
| Other, net | | | | | 20 | | | 18 | |
| Total other income and (deductions) | | | | | (102) | | | (99) | |
| Income before income taxes | | | | | 212 | | | 312 | |
| Income taxes | | | | | 19 | | | 71 | |
| Net income | | | | | $ | 193 | | | $ | 241 | |
| Comprehensive income | | | | | $ | 193 | | | $ | 241 | |
See the Combined Notes to Consolidated Financial Statements
14
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 193 | | | $ | 241 | |
| Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | | | |
| Depreciation and amortization | 362 | | | 338 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | (1) | | | 55 | |
| | | |
| Other non-cash operating activities | (6) | | | (153) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (133) | | | 96 | |
| Receivables from and payables to affiliates, net | — | | | 10 | |
| Inventories | (11) | | | (21) | |
| Accounts payable and accrued expenses | (116) | | | (306) | |
| Collateral received (paid), net | 8 | | | (4) | |
| Income taxes | 21 | | | 15 | |
| Regulatory assets and liabilities, net | 315 | | | (338) | |
| Pension and non-pension postretirement benefit contributions | (5) | | | (23) | |
| Other assets and liabilities | (67) | | | (22) | |
| Net cash flows provided by (used in) operating activities | 560 | | | (112) | |
| Cash flows from investing activities | | | |
| Capital expenditures | (594) | | | (617) | |
| | | |
| | | |
| | | |
| | | |
| Other investing activities | 1 | | | 1 | |
| Net cash flows used in investing activities | (593) | | | (616) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | 128 | | | (18) | |
| | | |
| Repayments on short-term borrowings with maturities greater than 90 days | — | | | (150) | |
| Issuance of long-term debt | — | | | 975 | |
| | | |
| Dividends paid on common stock | (194) | | | (187) | |
| Contributions from parent | 39 | | | 186 | |
| Other financing activities | 1 | | | (11) | |
| Net cash flows (used in) provided by financing activities | (26) | | | 795 | |
| (Decrease) increase in cash, restricted cash, and cash equivalents | (59) | | | 67 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 686 | | | 511 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 627 | | | $ | 578 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (74) | | | $ | (35) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
15
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | ASSETS | | | |
| Current assets | Current assets | |
| Current assets | |
| Current assets | |
| Cash and cash equivalents | |
| Cash and cash equivalents | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 63 | | | $ | 131 | |
| Restricted cash and cash equivalents | Restricted cash and cash equivalents | 342 | | | 210 | |
| Accounts receivable | Accounts receivable | |
| Customer accounts receivable | |
| Customer accounts receivable | |
| Customer accounts receivable | Customer accounts receivable | 511 | | 647 | 1,003 | | 860 |
| Customer allowance for credit losses | Customer allowance for credit losses | (74) | | (73) | Customer allowance for credit losses | (82) | | (69) |
| Customer accounts receivable, net | Customer accounts receivable, net | 437 | | | 574 | |
| Other accounts receivable | Other accounts receivable | 690 | | 227 | Other accounts receivable | 230 | | 242 |
| Other allowance for credit losses | Other allowance for credit losses | (18) | | (17) | Other allowance for credit losses | (19) | | (17) |
| Other accounts receivable, net | Other accounts receivable, net | 672 | | | 210 | |
| | Receivables from affiliates | Receivables from affiliates | 3 | | | 16 | |
| Receivables from affiliates | |
| Receivables from affiliates | |
| | Inventories, net | |
| Inventories, net | |
| Inventories, net | Inventories, net | 178 | | | 170 | |
| | Regulatory assets | Regulatory assets | 384 | | | 335 | |
| Regulatory assets | |
| Regulatory assets | |
| | Other | Other | 110 | | | 76 | |
| Other | |
| Other | |
| Total current assets | Total current assets | 2,189 | | | 1,722 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $6,521 and $6,099 as of September 30, 2022 and December 31, 2021, respectively) | 27,040 | | | 25,995 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $7,409 and $7,222 as of March 31, 2024 and December 31, 2023, respectively) | |
| Deferred debits and other assets | Deferred debits and other assets | |
| Regulatory assets | |
| Regulatory assets | |
| Regulatory assets | Regulatory assets | 2,489 | | | 1,870 | |
| | Goodwill | Goodwill | 2,625 | | | 2,625 | |
| Receivables from affiliates | — | | | 2,761 | |
| Goodwill | |
| Goodwill | |
| | Receivable related to Regulatory Agreement Units | |
| Receivable related to Regulatory Agreement Units | |
| Receivable related to Regulatory Agreement Units | Receivable related to Regulatory Agreement Units | 2,469 | | | — | |
| Investments | Investments | 6 | | | 6 | |
| Prepaid pension asset | Prepaid pension asset | 1,219 | | | 1,086 | |
| | Other | |
| Other | |
| Other | Other | 545 | | | 405 | |
| Total deferred debits and other assets | Total deferred debits and other assets | 9,353 | | | 8,753 | |
| Total assets | Total assets | $ | 38,582 | | | $ | 36,470 | |
See the Combined Notes to Consolidated Financial Statements
1716
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | Short-term borrowings | $ | 233 | | | $ | — | |
| | Short-term borrowings | |
| Short-term borrowings | |
| Long-term debt due within one year | |
| Accounts payable | Accounts payable | 876 | | | 647 | |
| Accrued expenses | Accrued expenses | 351 | | | 384 | |
| Payables to affiliates | Payables to affiliates | 54 | | | 121 | |
| | Customer deposits | Customer deposits | 104 | | | 99 | |
| Regulatory liabilities | Regulatory liabilities | 297 | | | 185 | |
| Mark-to-market derivative liabilities | Mark-to-market derivative liabilities | — | | | 18 | |
| | Other | |
| Other | |
| Other | Other | 191 | | | 133 | |
| Total current liabilities | Total current liabilities | 2,106 | | | 1,587 | |
| Long-term debt | Long-term debt | 10,517 | | | 9,773 | |
| Long-term debt to financing trust | Long-term debt to financing trust | 205 | | | 205 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 4,951 | | | 4,685 | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Regulatory liabilities | Regulatory liabilities | 6,668 | | | 6,759 | |
| Asset retirement obligations | Asset retirement obligations | 146 | | | 144 | |
| | Non-pension postretirement benefits obligations | Non-pension postretirement benefits obligations | 168 | | | 169 | |
| Non-pension postretirement benefits obligations | |
| Non-pension postretirement benefits obligations | |
| | Mark-to-market derivative liabilities | Mark-to-market derivative liabilities | 67 | | | 201 | |
| Mark-to-market derivative liabilities | |
| Mark-to-market derivative liabilities | |
| | Other | |
| Other | |
| Other | Other | 624 | | | 592 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 12,624 | | | 12,550 | |
| Total liabilities | Total liabilities | 25,452 | | | 24,115 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholders’ equity | Shareholders’ equity | |
| Common stock | Common stock | 1,588 | | | 1,588 | |
| Common stock | |
| Common stock | |
| | | Other paid-in capital | |
| | Other paid-in capital | |
| | Other paid-in capital | Other paid-in capital | 9,579 | | | 9,076 | |
| Retained earnings | Retained earnings | 1,963 | | | 1,691 | |
| | Total shareholders’ equity | Total shareholders’ equity | 13,130 | | | 12,355 | |
| Total shareholders’ equity | |
| Total shareholders’ equity | |
| Total liabilities and shareholders’ equity | Total liabilities and shareholders’ equity | $ | 38,582 | | | $ | 36,470 | |
See the Combined Notes to Consolidated Financial Statements
1817
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | | | Three Months Ended March 31, 2024 |
| (In millions) | (In millions) | Common
Stock | | Other
Paid-In
Capital | | Retained
Earnings | | Total
Shareholders’
Equity | (In millions) | Common
Stock | | Other
Paid-In
Capital | | Retained
Earnings | | Total
Shareholders’
Equity |
| Balance, December 31, 2021 | $ | 1,588 | | | $ | 9,076 | | | $ | 1,691 | | | $ | 12,355 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | — | | | 188 | | | 188 | |
| Common stock dividends | Common stock dividends | — | | | — | | | (144) | | | (144) | |
| Contributions from parent | Contributions from parent | — | | | 167 | | | — | | | 167 | |
| Balance, March 31, 2022 | $ | 1,588 | | | $ | 9,243 | | | $ | 1,735 | | | $ | 12,566 | |
| Balance at March 31, 2024 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| (In millions) | | (In millions) | Common
Stock | | Other
Paid-In
Capital | | Retained
Earnings | | Total
Shareholders’
Equity |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | — | | | 227 | | | 227 | |
| Common stock dividends | Common stock dividends | — | | | — | | | (145) | | | (145) | |
| Contributions from parent | Contributions from parent | — | | | 168 | | | — | | | 168 | |
| Balance, June 30, 2022 | $ | 1,588 | | | $ | 9,411 | | | $ | 1,817 | | | $ | 12,816 | |
| Net income | — | | | — | | | 291 | | | 291 | |
| Common stock dividends | — | | | — | | | (145) | | | (145) | |
| Contributions from parent | — | | | 168 | | | — | | | 168 | |
| Balance, September 30, 2022 | $ | 1,588 | | | $ | 9,579 | | | $ | 1,963 | | | $ | 13,130 | |
| Balance at March 31, 2023 | |
| | | Nine Months Ended September 30, 2021 |
| (In millions) | Common
Stock | | Other
Paid-In
Capital | | Retained
Earnings | | Total
Shareholders’
Equity |
| Balance, December 31, 2020 | $ | 1,588 | | | $ | 8,285 | | | $ | 1,456 | | | $ | 11,329 | |
| Net income | — | | | — | | | 197 | | | 197 | |
| Common stock dividends | — | | | — | | | (127) | | | (127) | |
| Contributions from parent | — | | | 198 | | | — | | | 198 | |
| Balance, March 31, 2021 | $ | 1,588 | | | $ | 8,483 | | | $ | 1,526 | | | $ | 11,597 | |
| Net income | — | | | — | | | 192 | | | 192 | |
| Common stock dividends | — | | | — | | | (126) | | | (126) | |
| Contributions from parent | — | | | 197 | | | — | | | 197 | |
| Balance, June 30, 2021 | $ | 1,588 | | | $ | 8,680 | | | $ | 1,592 | | | $ | 11,860 | |
| Net income | — | | | — | | | 220 | | | 220 | |
| Common stock dividends | — | | | — | | | (127) | | | (127) | |
| Contributions from parent | — | | | 198 | | | — | | | 198 | |
| Balance, September 30, 2021 | $ | 1,588 | | | $ | 8,878 | | | $ | 1,685 | | | $ | 12,151 | |
|
See the Combined Notes to Consolidated Financial Statements
1918
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | | |
| | | | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 |
| (In millions) | |
| (In millions) | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | | | | | | | |
| Electric operating revenues | Electric operating revenues | $ | 943 | | | $ | 757 | | | $ | 2,384 | | | $ | 2,008 | |
| Electric operating revenues | |
| Electric operating revenues | |
| Natural gas operating revenues | |
| Natural gas operating revenues | |
| Natural gas operating revenues | Natural gas operating revenues | 73 | | | 56 | | | 487 | | | 365 | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | (5) | | | 3 | | | 1 | | | 20 | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | Operating revenues from affiliates | 3 | | | 2 | | | 5 | | | 6 | |
| Total operating revenues | Total operating revenues | 1,014 | | | 818 | | | 2,877 | | | 2,399 | |
| Total operating revenues | |
| Total operating revenues | |
| Operating expenses | |
| Operating expenses | |
| Operating expenses | Operating expenses | | | | | | | |
| Purchased power | Purchased power | 377 | | | 206 | | | 850 | | | 540 | |
| Purchased power | |
| Purchased power | |
| Purchased fuel | Purchased fuel | 26 | | | 11 | | | 210 | | | 119 | |
| Purchased power from affiliate | — | | | 60 | | | 33 | | | 141 | |
| Purchased fuel | |
| Purchased fuel | |
| | Operating and maintenance | |
| | Operating and maintenance | |
| | Operating and maintenance | Operating and maintenance | 197 | | | 220 | | | 561 | | | 580 | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 46 | | | 43 | | | 144 | | | 126 | |
| Operating and maintenance from affiliates | |
| Operating and maintenance from affiliates | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 92 | | | 86 | | | 277 | | | 259 | |
| Taxes other than income taxes | Taxes other than income taxes | 60 | | | 51 | | | 155 | | | 143 | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | Total operating expenses | 798 | | | 677 | | | 2,230 | | | 1,908 | |
| | Total operating expenses | |
| Total operating expenses | |
| Gain on sales of assets | |
| Gain on sales of assets | |
| Gain on sales of assets | |
| Operating income | |
| Operating income | |
| Operating income | Operating income | 216 | | | 141 | | | 647 | | | 491 | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (42) | | | (37) | | | (120) | | | (110) | |
| Interest expense to affiliates | Interest expense to affiliates | (3) | | | (3) | | | (9) | | | (9) | |
| Interest expense to affiliates | |
| Interest expense to affiliates | |
| Other, net | |
| Other, net | |
| Other, net | Other, net | 8 | | | 7 | | | 23 | | | 20 | |
| Total other income and (deductions) | Total other income and (deductions) | (37) | | | (33) | | | (106) | | | (99) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Income before income taxes | Income before income taxes | 179 | | | 108 | | | 541 | | | 392 | |
| Income before income taxes | |
| Income before income taxes | |
| Income taxes | |
| Income taxes | |
| Income taxes | Income taxes | 44 | | | (3) | | | 67 | | | 9 | |
| | Net income | Net income | $ | 135 | | | $ | 111 | | | $ | 474 | | | $ | 383 | |
| | Net income | |
| | Net income | |
| Comprehensive income | Comprehensive income | $ | 135 | | | $ | 111 | | | $ | 474 | | | $ | 383 | |
| Comprehensive income | |
| Comprehensive income | |
See the Combined Notes to Consolidated Financial Statements
19
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 149 | | | $ | 166 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 104 | | | 98 | |
| | | |
| Gain on sales of assets | (2) | | | — | |
| Deferred income taxes and amortization of investment tax credits | (8) | | | (16) | |
| Other non-cash operating activities | 20 | | | 32 | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (75) | | | 36 | |
| Receivables from and payables to affiliates, net | 4 | | | 8 | |
| Inventories | 19 | | | 60 | |
| Accounts payable and accrued expenses | (63) | | | (176) | |
| | | |
| Income taxes | 19 | | | 20 | |
| Regulatory assets and liabilities, net | (20) | | | 15 | |
| Pension and non-pension postretirement benefit contributions | (2) | | | — | |
| Other assets and liabilities | (104) | | | (75) | |
| Net cash flows provided by operating activities | 41 | | | 168 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (361) | | | (335) | |
| | | |
| | | |
| Other investing activities | 2 | | | — | |
| Net cash flows used in investing activities | (359) | | | (335) | |
| Cash flows from financing activities | | | |
| | | |
| Changes in short-term borrowings | (165) | | | (94) | |
| | | |
| | | |
| | | |
| | | |
| Dividends paid on common stock | (100) | | | (101) | |
| Contributions from parent | 580 | | | 330 | |
| | | |
| | | |
| | | |
| Net cash flows provided by financing activities | 315 | | | 135 | |
| Decrease in cash, restricted cash, and cash equivalents | (3) | | | (32) | |
| Cash, restricted cash, and cash equivalents at beginning of period | 51 | | | 68 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 48 | | | $ | 36 | |
| | | |
| Supplemental cash flow information | | | |
| Increase (decrease) in capital expenditures not paid | $ | 5 | | | $ | (9) | |
| | | |
See the Combined Notes to Consolidated Financial Statements
20
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 474 | | | $ | 383 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 277 | | | 259 | |
| | | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 49 | | | 19 | |
| Other non-cash operating activities | 14 | | | 4 | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (49) | | | 47 | |
| Receivables from and payables to affiliates, net | (34) | | | 16 | |
| Inventories | (59) | | | (21) | |
| Accounts payable and accrued expenses | 25 | | | (23) | |
| | | |
| Income taxes | 30 | | | 55 | |
| Regulatory assets and liabilities, net | (27) | | | (16) | |
| Pension and non-pension postretirement benefit contributions | (13) | | | (15) | |
| Other assets and liabilities | (31) | | | (71) | |
| Net cash flows provided by operating activities | 656 | | | 637 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (991) | | | (878) | |
| | | |
| | | |
| Other investing activities | 8 | | | 5 | |
| Net cash flows used in investing activities | (983) | | | (873) | |
| Cash flows from financing activities | | | |
| | | |
| | | |
| Issuance of long-term debt | 775 | | | 750 | |
| Retirement of long-term debt | (350) | | | (300) | |
| | | |
| Changes in Exelon intercompany money pool | — | | | (40) | |
| Dividends paid on common stock | (299) | | | (254) | |
| Contributions from parent | 274 | | | 414 | |
| | | |
| | | |
| Other financing activities | (14) | | | (8) | |
| Net cash flows provided by financing activities | 386 | | | 562 | |
| Increase in cash, restricted cash, and cash equivalents | 59 | | | 326 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 44 | | | 26 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 103 | | | $ | 352 | |
| | | |
| Supplemental cash flow information | | | |
| Increase in capital expenditures not paid | $ | 7 | | | $ | 25 | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 39 | | | $ | 42 | |
| Restricted cash and cash equivalents | 9 | | | 9 | |
| Accounts receivable | | | |
| Customer accounts receivable | 562 | | 527 |
| Customer allowance for credit losses | (107) | | (95) |
| Customer accounts receivable, net | 455 | | | 432 | |
| Other accounts receivable | 160 | | 117 |
| Other allowance for credit losses | (13) | | (8) |
| Other accounts receivable, net | 147 | | | 109 | |
| | | |
| Receivables from affiliates | — | | | 2 | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 22 | | | 50 | |
| Materials and supplies | 76 | | | 67 | |
| Prepaid utility taxes | 128 | | | 2 | |
| Regulatory assets | 128 | | | 127 | |
| | | |
| Other | 78 | | | 63 | |
| Total current assets | 1,082 | | | 903 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,149 and $4,097 as of March 31, 2024 and December 31, 2023, respectively) | 13,399 | | | 13,128 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 834 | | | 793 | |
| | | |
| | | |
| | | |
| | | |
| Receivable related to Regulatory Agreement Units | 304 | | | 278 | |
| Investments | 37 | | | 35 | |
| Prepaid pension asset | 432 | | | 429 | |
| | | |
| Other | 28 | | | 29 | |
| Total deferred debits and other assets | 1,635 | | | 1,564 | |
| Total assets | $ | 16,116 | | | $ | 15,595 | |
See the Combined Notes to Consolidated Financial Statements
21
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 94 | | | $ | 36 | |
| Restricted cash and cash equivalents | 9 | | | 8 | |
| Accounts receivable | | | |
| Customer accounts receivable | 490 | | 489 |
| Customer allowance for credit losses | (103) | | (105) |
| Customer accounts receivable, net | 387 | | | 384 | |
| Other accounts receivable | 147 | | 116 |
| Other allowance for credit losses | (11) | | (7) |
| Other accounts receivable, net | 136 | | | 109 | |
| | | |
| Receivables from affiliates | 1 | | | 1 | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 106 | | | 51 | |
| Materials and supplies | 48 | | | 45 | |
| Prepaid utility taxes | 34 | | | 1 | |
| Regulatory assets | 59 | | | 48 | |
| | | |
| Other | 30 | | | 28 | |
| Total current assets | 904 | | | 711 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,031 and $3,964 as of September 30, 2022 and December 31, 2021, respectively) | 11,853 | | | 11,117 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 631 | | | 943 | |
| | | |
| | | |
| | | |
| Receivables from affiliates | — | | | 597 | |
| Receivable related to Regulatory Agreement Units | 188 | | | — | |
| Investments | 31 | | | 34 | |
| Prepaid pension asset | 408 | | | 386 | |
| | | |
| | | |
| Other | 33 | | | 36 | |
| Total deferred debits and other assets | 1,291 | | | 1,996 | |
| Total assets | $ | 14,048 | | | $ | 13,824 | |
See the Combined Notes to Consolidated Financial Statements
22
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | |
| | Long-term debt due within one year | $ | 50 | | | $ | 350 | |
| Accounts payable | |
| Accounts payable | |
| Accounts payable | Accounts payable | 555 | | | 494 | |
| Accrued expenses | Accrued expenses | 150 | | | 136 | |
| Payables to affiliates | Payables to affiliates | 36 | | | 70 | |
| | Customer deposits | Customer deposits | 59 | | | 48 | |
| Customer deposits | |
| Customer deposits | |
| Renewable energy credit obligation | |
| Regulatory liabilities | Regulatory liabilities | 69 | | | 94 | |
| | | Other | |
| | Other | |
| | Other | Other | 27 | | | 35 | |
| Total current liabilities | Total current liabilities | 946 | | | 1,227 | |
| Long-term debt | Long-term debt | 4,562 | | | 3,847 | |
| Long-term debt to financing trusts | Long-term debt to financing trusts | 184 | | | 184 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 2,170 | | | 2,421 | |
| Regulatory liabilities | Regulatory liabilities | 224 | | | 635 | |
| Asset retirement obligations | Asset retirement obligations | 28 | | | 29 | |
| Non-pension postretirement benefits obligations | Non-pension postretirement benefits obligations | 289 | | | 286 | |
| | Other | Other | 84 | | | 83 | |
| | Other | |
| | Other | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 2,795 | | | 3,454 | |
| Total liabilities | Total liabilities | 8,487 | | | 8,712 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholder’s equity | Shareholder’s equity | |
| Common stock | Common stock | 3,702 | | | 3,428 | |
| Common stock | |
| Common stock | |
| | | Retained earnings | |
| | Retained earnings | |
| | Retained earnings | Retained earnings | 1,859 | | | 1,684 | |
| | Total shareholder’s equity | Total shareholder’s equity | 5,561 | | | 5,112 | |
| | Total shareholder’s equity | |
| | Total shareholder’s equity | |
| Total liabilities and shareholder's equity | Total liabilities and shareholder's equity | $ | 14,048 | | | $ | 13,824 | |
See the Combined Notes to Consolidated Financial Statements
2322
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | (In millions) | Common
Stock | | Retained
Earnings | | | Total
Shareholder's
Equity | (In millions) | Common
Stock | | Retained
Earnings | | | | Total
Shareholder's
Equity |
| Balance, December 31, 2021 | $ | 3,428 | | | $ | 1,684 | | | | $ | 5,112 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | 206 | | | | 206 | |
| Common stock dividends | Common stock dividends | — | | | (100) | | | | (100) | |
| Contributions from parent | Contributions from parent | 227 | | | — | | | | 227 | |
| Balance, March 31, 2022 | $ | 3,655 | | | $ | 1,790 | | | | $ | 5,445 | |
| Net income | — | | | 133 | | | | 133 | |
| Common stock dividends | — | | | (100) | | | | (100) | |
| Balance at March 31, 2024 | |
| | Balance, June 30, 2022 | $ | 3,655 | | | $ | 1,823 | | | | $ | 5,478 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| (In millions) | | (In millions) | Common
Stock | | Retained
Earnings | | | | Total
Shareholder's
Equity |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | 135 | | | | 135 | |
| Common stock dividends | Common stock dividends | — | | | (99) | | | | (99) | |
| Contributions from parent | Contributions from parent | 47 | | | — | | | | 47 | |
| Balance, September 30, 2022 | $ | 3,702 | | | $ | 1,859 | | | | $ | 5,561 | |
| Balance at March 31, 2023 | |
| | | Nine Months Ended September 30, 2021 |
| (In millions) | Common
Stock | | Retained
Earnings | | | Total
Shareholder's
Equity |
| Balance, December 31, 2020 | $ | 3,014 | | | $ | 1,519 | | | | $ | 4,533 | |
| Net income | — | | | 167 | | | | 167 | |
| Common stock dividends | — | | | (85) | | | | (85) | |
| | Balance, March 31, 2021 | $ | 3,014 | | | $ | 1,601 | | | | $ | 4,615 | |
| Net income | — | | | 104 | | | | 104 | |
| Common stock dividends | — | | | (84) | | | | (84) | |
| Contributions from parent | 395 | | | — | | | | 395 | |
| Balance, June 30, 2021 | $ | 3,409 | | | $ | 1,621 | | | | $ | 5,030 | |
| Net income | — | | | 111 | | | | 111 | |
| Common stock dividends | — | | | (85) | | | | (85) | |
| Contributions from parent | 19 | | | — | | | | 19 | |
| Balance, September 30, 2021 | $ | 3,428 | | | $ | 1,647 | | | | $ | 5,075 | |
|
See the Combined Notes to Consolidated Financial Statements
2423
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | Three Months Ended
March 31, | |
| | | Three Months Ended
March 31, | |
| | | Three Months Ended
March 31, | |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 | (In millions) | | | | | 2024 | | 2023 |
| Operating revenues | Operating revenues | | | | | | | |
| Electric operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | Electric operating revenues | $ | 761 | | | $ | 694 | | | $ | 2,138 | | | $ | 1,874 | |
| Natural gas operating revenues | Natural gas operating revenues | 114 | | | 93 | | | 699 | | | 549 | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | (8) | | | (24) | | | (40) | | | (17) | |
| Operating revenues from affiliates | Operating revenues from affiliates | 3 | | | 7 | | | 13 | | | 20 | |
| Total operating revenues | Total operating revenues | 870 | | | 770 | | | 2,810 | | | 2,426 | |
| Operating expenses | Operating expenses | | | | | | | |
| Purchased power | Purchased power | 320 | | | 206 | | | 846 | | | 501 | |
| Purchased power | |
| Purchased power | |
| Purchased fuel | Purchased fuel | 30 | | | 20 | | | 229 | | | 146 | |
| Purchased power and fuel from affiliate | — | | | 64 | | | 18 | | | 193 | |
| | Operating and maintenance | |
| Operating and maintenance | |
| Operating and maintenance | Operating and maintenance | 185 | | | 159 | | | 506 | | | 458 | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 50 | | | 46 | | | 152 | | | 137 | |
| Depreciation and amortization | Depreciation and amortization | 148 | | | 142 | | | 470 | | | 434 | |
| Taxes other than income taxes | Taxes other than income taxes | 77 | | | 72 | | | 225 | | | 211 | |
| Total operating expenses | Total operating expenses | 810 | | | 709 | | | 2,446 | | | 2,080 | |
| | Operating income | Operating income | 60 | | | 61 | | | 364 | | | 346 | |
| Operating income | |
| Operating income | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | |
| Interest expense, net | Interest expense, net | (39) | | | (36) | | | (110) | | | (103) | |
| | Interest expense, net | |
| Interest expense, net | |
| Other, net | Other, net | 5 | | | 7 | | | 16 | | | 23 | |
| Total other income and (deductions) | Total other income and (deductions) | (34) | | | (29) | | | (94) | | | (80) | |
| Income before income taxes | Income before income taxes | 26 | | | 32 | | | 270 | | | 266 | |
| Income taxes | Income taxes | (7) | | | (4) | | | 3 | | | (24) | |
| | Net income | Net income | $ | 33 | | | $ | 36 | | | $ | 267 | | | $ | 290 | |
| | Comprehensive income | Comprehensive income | $ | 33 | | | $ | 36 | | | $ | 267 | | | $ | 290 | |
|
See the Combined Notes to Consolidated Financial Statements
24
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 264 | | | $ | 200 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 150 | | | 167 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | (4) | | | 24 | |
| | | |
| Other non-cash operating activities | (21) | | | (32) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (95) | | | 43 | |
| Receivables from and payables to affiliates, net | 2 | | | (3) | |
| Inventories | 14 | | | 62 | |
| Accounts payable and accrued expenses | 21 | | | (96) | |
| Collateral paid, net | — | | | (22) | |
| Income taxes | 29 | | | 29 | |
| Regulatory assets and liabilities, net | — | | | (31) | |
| Pension and non-pension postretirement benefit contributions | (25) | | | (8) | |
| Other assets and liabilities | (18) | | | (24) | |
| Net cash flows provided by operating activities | 317 | | | 309 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (324) | | | (350) | |
| | | |
| Other investing activities | 8 | | | 3 | |
| Net cash flows used in investing activities | (316) | | | (347) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | 70 | | | (165) | |
| | | |
| | | |
| | | |
| | | |
| Dividends paid on common stock | (92) | | | (80) | |
| Contributions from parent | — | | | 237 | |
| | | |
| Net cash flows used in financing activities | (22) | | | (8) | |
| Decrease in cash, restricted cash, and cash equivalents | (21) | | | (46) | |
| Cash, restricted cash, and cash equivalents at beginning of period | 48 | | | 67 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 27 | | | $ | 21 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (8) | | | $ | (70) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
25
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 267 | | | $ | 290 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 470 | | | 434 | |
| Asset impairments | 46 | | | — | |
| Deferred income taxes and amortization of investment tax credits | 1 | | | 7 | |
| | | |
| Other non-cash operating activities | 101 | | | 77 | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | 18 | | | 92 | |
| Receivables from and payables to affiliates, net | (9) | | | (13) | |
| Inventories | (74) | | | (30) | |
| Accounts payable and accrued expenses | 15 | | | 14 | |
| Collateral received, net | 125 | | | 20 | |
| Income taxes | (20) | | | 3 | |
| Regulatory assets and liabilities, net | (113) | | | (106) | |
| Pension and non-pension postretirement benefit contributions | (64) | | | (76) | |
| Other assets and liabilities | 14 | | | (43) | |
| Net cash flows provided by operating activities | 777 | | | 669 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (918) | | | (907) | |
| | | |
| Other investing activities | 7 | | | 13 | |
| Net cash flows used in investing activities | (911) | | | (894) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | 26 | | | — | |
| Issuance of long-term debt | 500 | | | 600 | |
| Retirement of long-term debt | (250) | | | (300) | |
| | | |
| | | |
| Dividends paid on common stock | (225) | | | (219) | |
| Contributions from parent | 186 | | | 257 | |
| Other financing activities | (8) | | | (6) | |
| Net cash flows provided by financing activities | 229 | | | 332 | |
| Increase in cash, restricted cash, and cash equivalents | 95 | | | 107 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 55 | | | 145 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 150 | | | $ | 252 | |
| | | |
| Supplemental cash flow information | | | |
| Increase (decrease) in capital expenditures not paid | $ | 12 | | | $ | (70) | |
| | | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 27 | | | $ | 47 | |
| Restricted cash and cash equivalents | — | | | 1 | |
| Accounts receivable | | | |
| Customer accounts receivable | 618 | | 527 |
| Customer allowance for credit losses | (52) | | (46) |
| Customer accounts receivable, net | 566 | | | 481 | |
| Other accounts receivable | 104 | | 106 |
| Other allowance for credit losses | (7) | | (7) |
| Other accounts receivable, net | 97 | | | 99 | |
| | | |
| | | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 13 | | | 35 | |
| Materials and supplies | 82 | | | 74 | |
| Prepaid utility taxes | 54 | | | 56 | |
| Regulatory assets | 237 | | | 229 | |
| | | |
| Other | 18 | | | 25 | |
| Total current assets | 1,094 | | | 1,047 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,817 and $4,744 as of March 31, 2024 and December 31, 2023, respectively) | 12,291 | | | 12,102 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 742 | | | 727 | |
| Investments | 10 | | | 9 | |
| | | |
| | | |
| Prepaid pension asset | 253 | | | 248 | |
| | | |
| Other | 54 | | | 51 | |
| Total deferred debits and other assets | 1,059 | | | 1,035 | |
| Total assets | $ | 14,444 | | | $ | 14,184 | |
See the Combined Notes to Consolidated Financial Statements
26
BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 20 | | | $ | 51 | |
| Restricted cash and cash equivalents | 130 | | | 4 | |
| Accounts receivable | | | |
| Customer accounts receivable | 423 | | 436 |
| Customer allowance for credit losses | (54) | | (38) |
| Customer accounts receivable, net | 369 | | | 398 | |
| Other accounts receivable | 120 | | 124 |
| Other allowance for credit losses | (12) | | (9) |
| Other accounts receivable, net | 108 | | | 115 | |
| | | |
| Receivables from affiliates | — | | | 1 | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 109 | | | 42 | |
| Materials and supplies | 60 | | | 53 | |
| Prepaid utility taxes | — | | | 49 | |
| Regulatory assets | 185 | | | 215 | |
| | | |
| Other | 9 | | | 8 | |
| Total current assets | 990 | | | 936 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,509 and $4,299 as of September 30, 2022 and December 31, 2021, respectively) | 11,103 | | | 10,577 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 503 | | | 477 | |
| Investments | 7 | | | 14 | |
| | | |
| | | |
| Prepaid pension asset | 299 | | | 276 | |
| | | |
| Other | 30 | | | 44 | |
| Total deferred debits and other assets | 839 | | | 811 | |
| Total assets | $ | 12,932 | | | $ | 12,324 | |
See the Combined Notes to Consolidated Financial Statements
27
BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | Short-term borrowings | $ | 156 | | | $ | 130 | |
| Long-term debt due within one year | 300 | | | 250 | |
| Short-term borrowings | |
| Short-term borrowings | |
| | Accounts payable | |
| Accounts payable | |
| Accounts payable | Accounts payable | 344 | | | 349 | |
| Accrued expenses | Accrued expenses | 188 | | | 176 | |
| Payables to affiliates | Payables to affiliates | 32 | | | 48 | |
| Customer deposits | Customer deposits | 102 | | | 97 | |
| Regulatory liabilities | Regulatory liabilities | 37 | | | 26 | |
| | Other | Other | 158 | | | 48 | |
| | Other | |
| | Other | |
| Total current liabilities | Total current liabilities | 1,317 | | | 1,124 | |
| Long-term debt | Long-term debt | 3,907 | | | 3,711 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 1,787 | | | 1,686 | |
| Regulatory liabilities | Regulatory liabilities | 853 | | | 934 | |
| Asset retirement obligations | Asset retirement obligations | 29 | | | 26 | |
| Non-pension postretirement benefits obligations | Non-pension postretirement benefits obligations | 168 | | | 175 | |
| | Other | Other | 73 | | | 98 | |
| | Other | |
| | Other | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 2,910 | | | 2,919 | |
| Total liabilities | Total liabilities | 8,134 | | | 7,754 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholder's equity | Shareholder's equity | |
| Common stock | Common stock | 2,761 | | | 2,575 | |
| Common stock | |
| Common stock | |
| | Retained earnings | |
| Retained earnings | |
| Retained earnings | Retained earnings | 2,037 | | | 1,995 | |
| | Total shareholder's equity | Total shareholder's equity | 4,798 | | | 4,570 | |
| | Total shareholder's equity | |
| | Total shareholder's equity | |
| | | Total liabilities and shareholder's equity | Total liabilities and shareholder's equity | $ | 12,932 | | | $ | 12,324 | |
| | Total liabilities and shareholder's equity | |
| | Total liabilities and shareholder's equity | |
See the Combined Notes to Consolidated Financial Statements
2827
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
| | Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | |
| (In millions) | |
| (In millions) | |
| Balance at December 31, 2023 | |
| Balance at December 31, 2023 | |
| Balance at December 31, 2023 | |
| Net income | |
| Net income | |
| Net income | |
| Common stock dividends | |
| Common stock dividends | |
| Common stock dividends | |
| | Balance at March 31, 2024 | |
| | Balance at March 31, 2024 | |
| | Balance at March 31, 2024 | |
| | | Nine Months Ended September 30, 2022 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| | Three Months Ended March 31, 2023 | |
| (In millions) | (In millions) | Common
Stock | | Retained
Earnings | | Total
Shareholder's
Equity | |
| Balance, December 31, 2021 | $ | 2,575 | | | $ | 1,995 | | | $ | 4,570 | | |
| (In millions) | |
| (In millions) | |
| Balance at December 31, 2022 | |
| Balance at December 31, 2022 | |
| Balance at December 31, 2022 | |
| Net income | |
| Net income | |
| Net income | Net income | — | | | 198 | | | 198 | | |
| Common stock dividends | Common stock dividends | — | | | (76) | | | (76) | | |
| | Balance, March 31, 2022 | $ | 2,575 | | | $ | 2,117 | | | $ | 4,692 | | |
| Net income | — | | | 37 | | | 37 | | |
| Common stock dividends | |
| Common stock dividends | Common stock dividends | — | | | (75) | | | (75) | | |
| Contributions from parent | Contributions from parent | 186 | | | — | | | 186 | | |
| Balance, June 30, 2022 | $ | 2,761 | | | $ | 2,079 | | | $ | 4,840 | | |
| Net income | — | | | 33 | | | 33 | | |
| Common stock dividends | — | | | (75) | | | (75) | | |
| | Balance, September 30, 2022 | $ | 2,761 | | | $ | 2,037 | | | $ | 4,798 | | |
| Contributions from parent | |
| Contributions from parent | |
| Balance at March 31, 2023 | |
| Balance at March 31, 2023 | |
| Balance at March 31, 2023 | |
| | | Nine Months Ended September 30, 2021 | |
| (In millions) | Common
Stock | | Retained
Earnings | | Total
Shareholder's
Equity | |
| Balance, December 31, 2020 | $ | 2,318 | | | $ | 1,879 | | | $ | 4,197 | | |
| Net income | — | | | 209 | | | 209 | | |
| Common stock dividends | — | | | (74) | | | (74) | | |
| Balance, March 31, 2021 | $ | 2,318 | | | $ | 2,014 | | | $ | 4,332 | | |
| Net income | — | | | 45 | | | 45 | | |
| Common stock dividends | — | | | (72) | | | (72) | | |
| | Balance, June 30, 2021 | $ | 2,318 | | | $ | 1,987 | | | $ | 4,305 | | |
| Net income | — | | | 36 | | | 36 | | |
| Common stock dividends | — | | | (73) | | | (73) | | |
| Contributions from parent | 257 | | | — | | | 257 | | |
| Balance, September 30, 2021 | $ | 2,575 | | | $ | 1,950 | | | $ | 4,525 | | |
|
See the Combined Notes to Consolidated Financial Statements
2928
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| (In millions) | |
| (In millions) | |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues | Operating revenues | | | | | | | |
| Operating revenues | |
| Operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | Electric operating revenues | $ | 1,568 | | | $ | 1,438 | | | $ | 4,090 | | | $ | 3,632 | |
| Natural gas operating revenues | Natural gas operating revenues | 38 | | | 23 | | | 157 | | | 118 | |
| Natural gas operating revenues | |
| Natural gas operating revenues | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | (11) | | | 6 | | | (33) | | | 94 | |
| Operating revenues from affiliates | Operating revenues from affiliates | 3 | | | 3 | | | 9 | | | 10 | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | |
| Total operating revenues | |
| Total operating revenues | |
| Total operating revenues | Total operating revenues | 1,598 | | | 1,470 | | | 4,223 | | | 3,854 | |
| Operating expenses | Operating expenses | | | | | | | |
| Operating expenses | |
| Operating expenses | |
| Purchased power | |
| Purchased power | |
| Purchased power | Purchased power | 586 | | | 431 | | | 1,474 | | | 1,087 | |
| Purchased fuel | Purchased fuel | 24 | | | 9 | | | 85 | | | 50 | |
| Purchased power from affiliates | — | | | 100 | | | 50 | | | 277 | |
| Purchased fuel | |
| Purchased fuel | |
| | Operating and maintenance | |
| | Operating and maintenance | |
| | Operating and maintenance | Operating and maintenance | 237 | | | 235 | | | 729 | | | 668 | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 40 | | | 43 | | | 138 | | | 122 | |
| Operating and maintenance from affiliates | |
| Operating and maintenance from affiliates | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 238 | | | 210 | | | 697 | | | 614 | |
| Taxes other than income taxes | Taxes other than income taxes | 129 | | | 127 | | | 362 | | | 349 | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 1,254 | | | 1,155 | | | 3,535 | | | 3,167 | |
| | Operating income | Operating income | 344 | | | 315 | | | 688 | | | 687 | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (72) | | | (67) | | | (216) | | | (201) | |
| | Other, net | Other, net | 19 | | | 16 | | | 56 | | | 52 | |
| | Other, net | |
| | Other, net | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | Total other income and (deductions) | (53) | | | (51) | | | (160) | | | (149) | |
| Income before income taxes | Income before income taxes | 291 | | | 264 | | | 528 | | | 538 | |
| Income before income taxes | |
| Income before income taxes | |
| Income taxes | Income taxes | 2 | | | (2) | | | 10 | | | 3 | |
| Income taxes | |
| Income taxes | |
| | Net income | |
| | Net income | |
| | Net income | Net income | $ | 289 | | | $ | 266 | | | $ | 518 | | | $ | 535 | |
| | Comprehensive income | Comprehensive income | $ | 289 | | | $ | 266 | | | $ | 518 | | | $ | 535 | |
| | Comprehensive income | |
| | Comprehensive income | |
See the Combined Notes to Consolidated Financial Statements
29
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 168 | | | $ | 155 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 246 | | | 241 | |
| | | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 16 | | | 13 | |
| | | |
| Other non-cash operating activities | 9 | | | (7) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | 1 | | | 98 | |
| | | |
| Inventories | (11) | | | 4 | |
| Accounts payable and accrued expenses | (23) | | | (88) | |
| | | |
| Collateral paid, net | — | | | (189) | |
| Income taxes | 24 | | | 20 | |
| Regulatory assets and liabilities, net | (42) | | | 27 | |
| Pension and non-pension postretirement benefit contributions | (72) | | | (7) | |
| Other assets and liabilities | (27) | | | (11) | |
| Net cash flows provided by operating activities | 289 | | | 256 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (453) | | | (561) | |
| | | |
| | | |
| | | |
| | | |
| Other investing activities | — | | | 8 | |
| Net cash flows used in investing activities | (453) | | | (553) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (394) | | | (414) | |
| | | |
| | | |
| Issuance of long-term debt | 925 | | | 450 | |
| Retirement of long-term debt | (400) | | | — | |
| Changes in Exelon intercompany money pool | 8 | | | 8 | |
| | | |
| | | |
| | | |
| Distributions to member | (118) | | | (112) | |
| Contributions from member | 487 | | | 405 | |
| | | |
| | | |
| Other financing activities | (21) | | | (17) | |
| Net cash flows provided by financing activities | 487 | | | 320 | |
| Increase in cash, restricted cash, and cash equivalents | 323 | | | 23 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 204 | | | 373 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 527 | | | $ | 396 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (11) | | | $ | (76) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
30
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 518 | | | $ | 535 | |
| | | |
| Adjustments to reconcile net income to net cash flows from operating activities: | | | |
| Depreciation and amortization | 697 | | | 614 | |
| | | |
| | | |
| Deferred income taxes and amortization of investment tax credits | (2) | | | — | |
| | | |
| Other non-cash operating activities | 112 | | | (35) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (143) | | | (112) | |
| Receivables from and payables to affiliates, net | (49) | | | (19) | |
| Inventories | (35) | | | (13) | |
| Accounts payable and accrued expenses | (15) | | | 19 | |
| | | |
| Collateral received, net | 230 | | | 25 | |
| Income taxes | (3) | | | 17 | |
| Regulatory assets and liabilities, net | (82) | | | (45) | |
| Pension and non-pension postretirement benefit contributions | (75) | | | (43) | |
| Other assets and liabilities | (71) | | | (100) | |
| Net cash flows provided by operating activities | 1,082 | | | 843 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (1,174) | | | (1,299) | |
| | | |
| | | |
| | | |
| | | |
| Other investing activities | 5 | | | (1) | |
| Net cash flows used in investing activities | (1,169) | | | (1,300) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (468) | | | (81) | |
| | | |
| | | |
| Issuance of long-term debt | 925 | | | 750 | |
| Retirement of long-term debt | (310) | | | (255) | |
| Changes in Exelon intercompany money pool | 36 | | | (5) | |
| | | |
| | | |
| | | |
| Distributions to member | (625) | | | (605) | |
| Contributions from member | 787 | | | 667 | |
| | | |
| | | |
| Other financing activities | (18) | | | (12) | |
| Net cash flows provided by financing activities | 327 | | | 459 | |
| Increase in cash, restricted cash, and cash equivalents | 240 | | | 2 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 213 | | | 160 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 453 | | | $ | 162 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (8) | | | $ | (74) | |
| | | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 504 | | | $ | 180 | |
| Restricted cash and cash equivalents | 23 | | | 24 | |
| Accounts receivable | | | |
| Customer accounts receivable | 714 | | 745 |
| Customer allowance for credit losses | (105) | | (107) |
| Customer accounts receivable, net | 609 | | | 638 | |
| Other accounts receivable | 321 | | 310 |
| Other allowance for credit losses | (57) | | (50) |
| Other accounts receivable, net | 264 | | | 260 | |
| | | |
| Receivables from affiliates | 4 | | | 3 | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 3 | | | 9 | |
| Materials and supplies | 304 | | | 287 | |
| | | |
| | | |
| Regulatory assets | 342 | | | 337 | |
| | | |
| Other | 82 | | | 100 | |
| Total current assets | 2,135 | | | 1,838 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $3,302 and $3,175 as of March 31, 2024 and December 31, 2023, respectively) | 19,121 | | | 18,851 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 1,606 | | | 1,587 | |
| Goodwill | 4,005 | | | 4,005 | |
| Investments | 145 | | | 143 | |
| | | |
| | | |
| Prepaid pension asset | 314 | | | 268 | |
| | | |
| | | |
| Other | 209 | | | 211 | |
| Total deferred debits and other assets | 6,279 | | | 6,214 | |
| Total assets | $ | 27,535 | | | $ | 26,903 | |
See the Combined Notes to Consolidated Financial Statements
31
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 219 | | | $ | 136 | |
| Restricted cash and cash equivalents | 234 | | | 77 | |
| Accounts receivable | | | |
| Customer accounts receivable | 707 | | 616 |
| Customer allowance for credit losses | (111) | | (104) |
| Customer accounts receivable, net | 596 | | | 512 | |
| Other accounts receivable | 301 | | 283 |
| Other allowance for credit losses | (43) | | (39) |
| Other accounts receivable, net | 258 | | | 244 | |
| | | |
| Receivables from affiliates | 1 | | | 2 | |
| | | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 20 | | | 11 | |
| Materials and supplies | 235 | | | 209 | |
| | | |
| | | |
| Regulatory assets | 431 | | | 432 | |
| | | |
| Other | 58 | | | 69 | |
| Total current assets | 2,052 | | | 1,692 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $2,496 and $2,108 as of September 30, 2022 and December 31, 2021, respectively) | 17,177 | | | 16,498 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 1,669 | | | 1,794 | |
| Goodwill | 4,005 | | | 4,005 | |
| Investments | 138 | | | 145 | |
| | | |
| | | |
| Prepaid pension asset | 367 | | | 344 | |
| | | |
| Deferred income taxes | 6 | | | 8 | |
| Other | 241 | | | 258 | |
| Total deferred debits and other assets | 6,426 | | | 6,554 | |
| Total assets | $ | 25,655 | | | $ | 24,744 | |
See the Combined Notes to Consolidated Financial Statements
32
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND MEMBER'S EQUITY | LIABILITIES AND MEMBER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | Short-term borrowings | $ | — | | | $ | 468 | |
| Long-term debt due within one year | Long-term debt due within one year | 91 | | | 399 | |
| Accounts payable | Accounts payable | 565 | | | 578 | |
| Accrued expenses | Accrued expenses | 275 | | | 281 | |
| Payables to affiliates | Payables to affiliates | 54 | | | 104 | |
| Borrowings from Exelon intercompany money pool | Borrowings from Exelon intercompany money pool | 43 | | | 7 | |
| | Customer deposits | Customer deposits | 85 | | | 81 | |
| Customer deposits | |
| Customer deposits | |
| Regulatory liabilities | Regulatory liabilities | 85 | | | 68 | |
| Unamortized energy contract liabilities | Unamortized energy contract liabilities | 10 | | | 89 | |
| | PPA termination obligation | |
| PPA termination obligation | |
| PPA termination obligation | PPA termination obligation | 87 | | | — | |
| Other | Other | 434 | | | 171 | |
| Total current liabilities | Total current liabilities | 1,729 | | | 2,246 | |
| Long-term debt | Long-term debt | 8,039 | | | 7,148 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 2,864 | | | 2,675 | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Regulatory liabilities | Regulatory liabilities | 1,038 | | | 1,238 | |
| Asset retirement obligations | Asset retirement obligations | 58 | | | 70 | |
| Non-pension postretirement benefit obligations | Non-pension postretirement benefit obligations | 53 | | | 66 | |
| | | Unamortized energy contract liabilities | |
| | Unamortized energy contract liabilities | |
| | Unamortized energy contract liabilities | Unamortized energy contract liabilities | 37 | | | 146 | |
| Other | Other | 571 | | | 570 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 4,621 | | | 4,765 | |
| Total liabilities | Total liabilities | 14,389 | | | 14,159 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| | Member's equity | Member's equity | |
| Member's equity | |
| Member's equity | |
| Membership interest | |
| Membership interest | |
| Membership interest | Membership interest | 11,582 | | | 10,795 | |
| | Undistributed losses | Undistributed losses | (316) | | | (210) | |
| Undistributed losses | |
| Undistributed losses | |
| | Total member's equity | Total member's equity | 11,266 | | | 10,585 | |
| Total member's equity | |
| Total member's equity | |
| Total liabilities and member's equity | Total liabilities and member's equity | $ | 25,655 | | | $ | 24,744 | |
See the Combined Notes to Consolidated Financial Statements
3332
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | (In millions) | Membership Interest | | Undistributed (Losses)/Earnings | | | Total Member's Equity | (In millions) | Membership Interest | | Undistributed (Losses)/Gains | | | | Total Member's Equity |
| Balance, December 31, 2021 | $ | 10,795 | | | $ | (210) | | | | $ | 10,585 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | 130 | | | | 130 | |
| Distributions to member | Distributions to member | — | | | (102) | | | | (102) | |
| Contributions from member | Contributions from member | 704 | | | — | | | | 704 | |
| Balance, March 31, 2022 | $ | 11,499 | | | $ | (182) | | | | $ | 11,317 | |
| Net income | — | | | 100 | | | | 100 | |
| Distributions to member | — | | | (293) | | | | (293) | |
| Balance at March 31, 2024 | |
| | Balance, June 30, 2022 | $ | 11,499 | | | $ | (375) | | | | $ | 11,124 | |
| Net income | — | | | 289 | | | | 289 | |
| Distributions to member | — | | | (230) | | | | (230) | |
| Contributions from member | 83 | | | — | | | | 83 | |
| | Balance, September 30, 2022 | $ | 11,582 | | | $ | (316) | | | | $ | 11,266 | |
|
| | Nine Months Ended September 30, 2021 |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| (In millions) | (In millions) | Membership Interest | | Undistributed (Losses)/Earnings | | | Total Member's Equity | (In millions) | Membership Interest | | Undistributed (Losses)/Gains | | | | Total Member's Equity |
| Balance, December 31, 2020 | $ | 10,112 | | | $ | (68) | | | | $ | 10,044 | |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | 128 | | | | 128 | |
| Distributions to member | Distributions to member | — | | | (81) | | | | (81) | |
| Contributions from member | Contributions from member | 560 | | | — | | | | 560 | |
| Balance, March 31, 2021 | $ | 10,672 | | | $ | (21) | | | | $ | 10,651 | |
| Net income | — | | | 141 | | | | 141 | |
| Distributions to member | — | | | (333) | | | | (333) | |
| Balance at March 31, 2023 | |
| | Balance, June 30, 2021 | $ | 10,672 | | | $ | (213) | | | | $ | 10,459 | |
| Net income | — | | | 266 | | | | 266 | |
| Distributions to member | — | | | (191) | | | | (191) | |
| Contribution from member | 107 | | | — | | | | 107 | |
| Balance, September 30, 2021 | $ | 10,779 | | | $ | (138) | | | | $ | 10,641 | |
|
See the Combined Notes to Consolidated Financial Statements
3433
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| (In millions) | |
| (In millions) | |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 | |
| Operating revenues | Operating revenues | | | | | | | | |
| Operating revenues | |
| Operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | Electric operating revenues | $ | 730 | | | $ | 649 | | | $ | 1,930 | | | $ | 1,678 | | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | (8) | | | 9 | | | (15) | | | 54 | | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | Operating revenues from affiliates | 2 | | | 2 | | | 4 | | | 4 | | |
| Total operating revenues | Total operating revenues | 724 | | | 660 | | | 1,919 | | | 1,736 | | |
| Total operating revenues | |
| Total operating revenues | |
| Operating expenses | |
| Operating expenses | |
| Operating expenses | Operating expenses | | | | | | | | |
| Purchased power | Purchased power | 230 | | | 103 | | | 566 | | | 271 | | |
| Purchased power from affiliate | — | | | 69 | | | 39 | | | 200 | | |
| Purchased power | |
| Purchased power | |
| | Operating and maintenance | |
| | Operating and maintenance | |
| | Operating and maintenance | Operating and maintenance | 69 | | | 68 | | | 214 | | | 186 | | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 52 | | | 52 | | | 166 | | | 155 | | |
| Operating and maintenance from affiliates | |
| Operating and maintenance from affiliates | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 99 | | | 104 | | | 312 | | | 302 | | |
| Taxes other than income taxes | Taxes other than income taxes | 105 | | | 105 | | | 291 | | | 282 | | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 555 | | | 501 | | | 1,588 | | | 1,396 | | |
| | Operating income | Operating income | 169 | | | 159 | | | 331 | | | 340 | | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (37) | | | (35) | | | (111) | | | (104) | | |
| | Other, net | Other, net | 14 | | | 12 | | | 39 | | | 37 | | |
| | Other, net | |
| | Other, net | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | Total other income and (deductions) | (23) | | | (23) | | | (72) | | | (67) | | |
| Income before income taxes | Income before income taxes | 146 | | | 136 | | | 259 | | | 273 | | |
| Income before income taxes | |
| Income before income taxes | |
| Income taxes | Income taxes | 1 | | | 6 | | | (2) | | | 9 | | |
| Income taxes | |
| Income taxes | |
| | Net income | |
| | Net income | |
| | Net income | Net income | $ | 145 | | | $ | 130 | | | $ | 261 | | | $ | 264 | | |
| | Comprehensive income | Comprehensive income | $ | 145 | | | $ | 130 | | | $ | 261 | | | $ | 264 | | |
| | Comprehensive income | |
| | Comprehensive income | |
See the Combined Notes to Consolidated Financial Statements
34
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 75 | | | $ | 65 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 107 | | | 108 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 3 | | | 3 | |
| | | |
| Other non-cash operating activities | (13) | | | (10) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | 21 | | | 52 | |
| Receivables from and payables to affiliates, net | 6 | | | 3 | |
| Inventories | (10) | | | (3) | |
| Accounts payable and accrued expenses | — | | | (27) | |
| Collateral paid, net | (1) | | | (25) | |
| Income taxes | 12 | | | 8 | |
| Regulatory assets and liabilities, net | 6 | | | (3) | |
| Pension and non-pension postretirement benefit contributions | (4) | | | (4) | |
| Other assets and liabilities | (19) | | | 11 | |
| Net cash flows provided by operating activities | 183 | | | 178 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (229) | | | (264) | |
| | | |
| | | |
| | | |
| Changes in PHI intercompany money pool | (134) | | | — | |
| Other investing activities | — | | | 8 | |
| Net cash flows used in investing activities | (363) | | | (256) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (132) | | | (299) | |
| Issuance of long-term debt | 675 | | | 250 | |
| Retirement of long-term debt | (400) | | | — | |
| | | |
| Dividends paid on common stock | (51) | | | (48) | |
| Contributions from parent | 251 | | | 243 | |
| | | |
| | | |
| Other financing activities | (15) | | | (14) | |
| Net cash flows provided by financing activities | 328 | | | 132 | |
| Increase in cash, restricted cash, and cash equivalents | 148 | | | 54 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 72 | | | 99 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 220 | | | $ | 153 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (11) | | | $ | (43) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
35
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 261 | | | $ | 264 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 312 | | | 302 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | (5) | | | 12 | |
| | | |
| Other non-cash operating activities | 20 | | | (54) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (87) | | | (57) | |
| Receivables from and payables to affiliates, net | (31) | | | (2) | |
| Inventories | (19) | | | (6) | |
| Accounts payable and accrued expenses | 11 | | | 14 | |
| Collateral received, net | 46 | | | — | |
| Income taxes | (25) | | | (10) | |
| Regulatory assets and liabilities, net | (44) | | | (55) | |
| Pension and non-pension postretirement benefit contributions | (9) | | | (9) | |
| Other assets and liabilities | (29) | | | (59) | |
| Net cash flows provided by operating activities | 401 | | | 340 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (595) | | | (641) | |
| | | |
| | | |
| | | |
| | | |
| Other investing activities | 2 | | | (2) | |
| Net cash flows used in investing activities | (593) | | | (643) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (175) | | | 5 | |
| Issuance of long-term debt | 625 | | | 275 | |
| Retirement of long-term debt | (310) | | | (1) | |
| Changes in PHI intercompany money pool | 25 | | | — | |
| Dividends paid on common stock | (400) | | | (221) | |
| Contributions from parent | 465 | | | 244 | |
| | | |
| | | |
| Other financing activities | (8) | | | (4) | |
| Net cash flows provided by financing activities | 222 | | | 298 | |
| Increase (decrease) in cash, restricted cash, and cash equivalents | 30 | | | (5) | |
| Cash, restricted cash, and cash equivalents at beginning of period | 68 | | | 65 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 98 | | | $ | 60 | |
| | | |
| Supplemental cash flow information | | | |
| Increase (decrease) in capital expenditures not paid | $ | 2 | | | $ | (16) | |
| | | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 198 | | | $ | 48 | |
| Restricted cash and cash equivalents | 22 | | | 24 | |
| Accounts receivable | | | |
| Customer accounts receivable | 349 | | 369 |
| Customer allowance for credit losses | (52) | | (52) |
| Customer accounts receivable, net | 297 | | | 317 | |
| Other accounts receivable | 156 | | 166 |
| Other allowance for credit losses | (35) | | (28) |
| Other accounts receivable, net | 121 | | | 138 | |
| | | |
| Receivables from affiliates | 1 | | | 2 | |
| Receivable from PHI intercompany money pool | 134 | | | — | |
| | | |
| Inventories, net | 169 | | | 159 | |
| | | |
| | | |
| | | |
| Regulatory assets | 133 | | | 150 | |
| | | |
| Other | 35 | | | 51 | |
| Total current assets | 1,110 | | | 889 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,341 and $4,284 as of March 31, 2024 and December 31, 2023, respectively) | 9,584 | | | 9,430 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 467 | | | 450 | |
| Investments | 127 | | | 124 | |
| | | |
| | | |
| | | |
| Prepaid pension asset | 240 | | | 246 | |
| | | |
| Other | 57 | | | 55 | |
| Total deferred debits and other assets | 891 | | | 875 | |
| Total assets | $ | 11,585 | | | $ | 11,194 | |
See the Combined Notes to Consolidated Financial Statements
36
POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 21 | | | $ | 34 | |
| Restricted cash and cash equivalents | 77 | | | 34 | |
| Accounts receivable | | | |
| Customer accounts receivable | 340 | | 277 |
| Customer allowance for credit losses | (44) | | (37) |
| Customer accounts receivable, net | 296 | | | 240 | |
| Other accounts receivable | 179 | | 160 |
| Other allowance for credit losses | (22) | | (16) |
| Other accounts receivable, net | 157 | | | 144 | |
| | | |
| | | |
| | | |
| | | |
| Inventories, net | 138 | | | 119 | |
| | | |
| | | |
| | | |
| Regulatory assets | 225 | | | 213 | |
| | | |
| Other | 12 | | | 25 | |
| Total current assets | 926 | | | 809 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $4,016 and $3,875 as of September 30, 2022 and December 31, 2021, respectively) | 8,518 | | | 8,104 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 452 | | | 532 | |
| Investments | 118 | | | 120 | |
| | | |
| | | |
| | | |
| Prepaid pension asset | 275 | | | 279 | |
| | | |
| Other | 60 | | | 59 | |
| Total deferred debits and other assets | 905 | | | 990 | |
| Total assets | $ | 10,349 | | | $ | 9,903 | |
See the Combined Notes to Consolidated Financial Statements
37
POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | Short-term borrowings | $ | — | | | $ | 175 | |
| Long-term debt due within one year | Long-term debt due within one year | 4 | | | 313 | |
| Accounts payable | Accounts payable | 290 | | | 272 | |
| Accrued expenses | Accrued expenses | 138 | | | 160 | |
| Payables to affiliates | Payables to affiliates | 28 | | | 59 | |
| | Borrowings from PHI intercompany money pool | 25 | | | — | |
| | Customer deposits | |
| | Customer deposits | |
| | Customer deposits | Customer deposits | 37 | | | 35 | |
| Regulatory liabilities | Regulatory liabilities | 11 | | | 14 | |
| Merger related obligation | Merger related obligation | 24 | | | 27 | |
| Current portion of DC PLUG obligation | 34 | | | 30 | |
| | Other | |
| Other | |
| Other | Other | 81 | | | 25 | |
| Total current liabilities | Total current liabilities | 672 | | | 1,110 | |
| Long-term debt | Long-term debt | 3,748 | | | 3,132 | |
| | Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred credits and other liabilities | |
| Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 1,369 | | | 1,275 | |
| Regulatory liabilities | Regulatory liabilities | 460 | | | 549 | |
| Asset retirement obligations | Asset retirement obligations | 38 | | | 45 | |
| | Non-pension postretirement benefit obligations | — | | | 3 | |
| | Other | |
| | Other | |
| | | Other | Other | 261 | | | 314 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 2,128 | | | 2,186 | |
| Total liabilities | Total liabilities | 6,548 | | | 6,428 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholder's equity | Shareholder's equity | |
| Common stock | Common stock | 2,767 | | | 2,302 | |
| Common stock | |
| Common stock | |
| | Retained earnings | Retained earnings | 1,034 | | | 1,173 | |
| | Retained earnings | |
| | Retained earnings | |
| | Total shareholder's equity | |
| Total shareholder's equity | |
| Total shareholder's equity | Total shareholder's equity | 3,801 | | | 3,475 | |
| Total liabilities and shareholder's equity | Total liabilities and shareholder's equity | $ | 10,349 | | | $ | 9,903 | |
See the Combined Notes to Consolidated Financial Statements
3837
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | (In millions) | Common Stock | | | Retained Earnings | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained Earnings | | Total Shareholder's Equity |
| Balance, December 31, 2021 | $ | 2,302 | | | | $ | 1,173 | | | $ | 3,475 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | | 46 | | | 46 | |
| Common stock dividends | Common stock dividends | — | | | | (42) | | | (42) | |
| Contributions from parent | Contributions from parent | 387 | | | | — | | | 387 | |
| Balance, March 31, 2022 | $ | 2,689 | | | | $ | 1,177 | | | $ | 3,866 | |
| Net income | — | | | | 70 | | | 70 | |
| Balance at March 31, 2024 | |
| | Common stock dividends | — | | | | (258) | | | (258) | |
| | Balance, June 30, 2022 | $ | 2,689 | | | | $ | 989 | | | $ | 3,678 | |
| Net income | — | | | | 145 | | | 145 | |
| | Common stock dividends | — | | | | (100) | | | (100) | |
| Contributions from parent | 78 | | | | — | | | 78 | |
| Balance, September 30, 2022 | $ | 2,767 | | | | $ | 1,034 | | | $ | 3,801 | |
|
| | Nine Months Ended September 30, 2021 |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| (In millions) | (In millions) | Common Stock | | | Retained Earnings | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained Earnings | | Total Shareholder's Equity |
| Balance, December 31, 2020 | $ | 2,058 | | | | $ | 1,145 | | | $ | 3,203 | |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | | 59 | | | 59 | |
| Common stock dividends | Common stock dividends | — | | | | (28) | | | (28) | |
| Contributions from parent | Contributions from parent | 138 | | | | — | | | 138 | |
| Balance, March 31, 2021 | $ | 2,196 | | | | $ | 1,176 | | | $ | 3,372 | |
| Net income | — | | | | 75 | | | 75 | |
| Balance at March 31, 2023 | |
| | Common stock dividends | — | | | | (95) | | | (95) | |
| | Balance, June 30, 2021 | $ | 2,196 | | | | $ | 1,156 | | | $ | 3,352 | |
| Net income | — | | | | 130 | | | 130 | |
| | Common stock dividends | — | | | | (98) | | | (98) | |
| Contributions from parent | 106 | | | | — | | | 106 | |
| Balance, September 30, 2021 | $ | 2,302 | | | | $ | 1,188 | | | $ | 3,490 | |
|
See the Combined Notes to Consolidated Financial Statements
3938
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| (In millions) | |
| (In millions) | |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues | Operating revenues | | | | | | | |
| Operating revenues | |
| Operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | Electric operating revenues | $ | 373 | | | $ | 337 | | | $ | 1,017 | | | $ | 899 | |
| Natural gas operating revenues | Natural gas operating revenues | 38 | | | 23 | | | 157 | | | 118 | |
| Natural gas operating revenues | |
| Natural gas operating revenues | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | — | | | (2) | | | (3) | | | 17 | |
| Operating revenues from affiliates | Operating revenues from affiliates | 1 | | | 2 | | | 5 | | | 6 | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | |
| Total operating revenues | |
| Total operating revenues | |
| Total operating revenues | Total operating revenues | 412 | | | 360 | | | 1,176 | | | 1,040 | |
| Operating expenses | Operating expenses | | | | | | | |
| Operating expenses | |
| Operating expenses | |
| Purchased power | |
| Purchased power | |
| Purchased power | Purchased power | 159 | | | 103 | | | 412 | | | 289 | |
| Purchased fuel | Purchased fuel | 24 | | | 9 | | | 85 | | | 50 | |
| Purchased power from affiliates | — | | | 26 | | | 10 | | | 63 | |
| Purchased fuel | |
| Purchased fuel | |
| | Operating and maintenance | |
| | Operating and maintenance | |
| | Operating and maintenance | Operating and maintenance | 45 | | | 47 | | | 142 | | | 132 | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 39 | | | 40 | | | 124 | | | 117 | |
| Operating and maintenance from affiliates | |
| Operating and maintenance from affiliates | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 59 | | | 53 | | | 172 | | | 157 | |
| Taxes other than income taxes | Taxes other than income taxes | 19 | | | 17 | | | 54 | | | 50 | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 345 | | | 295 | | | 999 | | | 858 | |
| | Operating income | Operating income | 67 | | | 65 | | | 177 | | | 182 | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | |
| Interest expense, net | Interest expense, net | (16) | | | (15) | | | (48) | | | (47) | |
| Interest expense, net | |
| Interest expense, net | |
| Other, net | |
| Other, net | |
| Other, net | Other, net | 3 | | | 3 | | | 9 | | | 9 | |
| Total other income and (deductions) | Total other income and (deductions) | (13) | | | (12) | | | (39) | | | (38) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Income before income taxes | Income before income taxes | 54 | | | 53 | | | 138 | | | 144 | |
| Income before income taxes | |
| Income before income taxes | |
| Income taxes | |
| Income taxes | |
| Income taxes | Income taxes | 2 | | | 3 | | | 8 | | | 9 | |
| | Net income | Net income | $ | 52 | | | $ | 50 | | | $ | 130 | | | $ | 135 | |
| | Net income | |
| | Net income | |
| Comprehensive income | Comprehensive income | $ | 52 | | | $ | 50 | | | $ | 130 | | | $ | 135 | |
| Comprehensive income | |
| Comprehensive income | |
See the Combined Notes to Consolidated Financial Statements
39
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 66 | | | $ | 60 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 61 | | | 60 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 6 | | | 3 | |
| | | |
| Other non-cash operating activities | 12 | | | (1) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (7) | | | 23 | |
| Receivables from and payables to affiliates, net | — | | | 4 | |
| Inventories | 1 | | | 10 | |
| Accounts payable and accrued expenses | 16 | | | (16) | |
| Collateral paid, net | — | | | (120) | |
| Income taxes | 10 | | | 9 | |
| Regulatory assets and liabilities, net | (1) | | | 27 | |
| | | |
| Other assets and liabilities | 6 | | | 1 | |
| Net cash flows provided by operating activities | 170 | | | 60 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (134) | | | (134) | |
| | | |
| | | |
| | | |
| | | |
| Net cash flows used in investing activities | (134) | | | (134) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (63) | | | (115) | |
| Issuance of long-term debt | 175 | | | 125 | |
| | | |
| | | |
| Dividends paid on common stock | (45) | | | (42) | |
| Contributions from parent | 154 | | | 99 | |
| Other financing activities | (3) | | | (2) | |
| Net cash flows provided by financing activities | 218 | | | 65 | |
| Increase (decrease) in cash, restricted cash, and cash equivalents | 254 | | | (9) | |
| Cash, restricted cash, and cash equivalents at beginning of period | 16 | | | 152 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 270 | | | $ | 143 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (6) | | | $ | (3) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
40
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 130 | | | $ | 135 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 172 | | | 157 | |
| | | |
| Deferred income taxes and amortization of investment tax credits | 9 | | | 5 | |
| | | |
| Other non-cash operating activities | 22 | | | (2) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (3) | | | 26 | |
| Receivables from and payables to affiliates, net | (8) | | | (12) | |
| Inventories | (11) | | | (5) | |
| Accounts payable and accrued expenses | — | | | 17 | |
| Collateral received, net | 114 | | | 25 | |
| Income taxes | 4 | | | 19 | |
| Regulatory assets and liabilities, net | (23) | | | (20) | |
| Pension and non-pension postretirement benefit contributions | (1) | | | (1) | |
| Other assets and liabilities | 23 | | | (12) | |
| Net cash flows provided by operating activities | 428 | | | 332 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (294) | | | (320) | |
| | | |
| | | |
| Changes in PHI intercompany money pool | (25) | | | — | |
| Other investing activities | 2 | | | 1 | |
| Net cash flows used in investing activities | (317) | | | (319) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (149) | | | (124) | |
| Issuance of long-term debt | 125 | | | 125 | |
| | | |
| | | |
| Dividends paid on common stock | (95) | | | (106) | |
| Contributions from parent | 147 | | | 120 | |
| Other financing activities | (4) | | | (4) | |
| Net cash flows provided by financing activities | 24 | | | 11 | |
| Increase in cash, restricted cash, and cash equivalents | 135 | | | 24 | |
| Cash, restricted cash, and cash equivalents at beginning of period | 71 | | | 15 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 206 | | | $ | 39 | |
| | | |
| Supplemental cash flow information | | | |
| Increase (decrease) in capital expenditures not paid | $ | 2 | | | $ | (24) | |
| | | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 269 | | | $ | 16 | |
| Restricted cash and cash equivalents | 1 | | | — | |
| Accounts receivable | | | |
| Customer accounts receivable | 186 | | 183 |
| Customer allowance for credit losses | (17) | | (19) |
| Customer accounts receivable, net | 169 | | | 164 | |
| Other accounts receivable | 51 | | 52 |
| Other allowance for credit losses | (8) | | (8) |
| Other accounts receivable, net | 43 | | | 44 | |
| Receivables from affiliates | — | | | 1 | |
| | | |
| Inventories, net | | | |
| Fossil fuel | 3 | | | 9 | |
| Materials and supplies | 77 | | | 72 | |
| Prepaid utility taxes | 13 | | | 24 | |
| | | |
| Regulatory assets | 56 | | | 54 | |
| | | |
| Other | 20 | | | 14 | |
| Total current assets | 651 | | | 398 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $1,961 and $1,925 as of March 31, 2024 and December 31, 2023, respectively) | 5,245 | | | 5,165 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 212 | | | 218 | |
| | | |
| | | |
| Prepaid pension asset | 132 | | | 135 | |
| Other | 51 | | | 50 | |
| Total deferred debits and other assets | 395 | | | 403 | |
| Total assets | $ | 6,291 | | | $ | 5,966 | |
See the Combined Notes to Consolidated Financial Statements
41
DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 49 | | | $ | 28 | |
| Restricted cash and cash equivalents | 157 | | | 43 | |
| Accounts receivable | | | |
| Customer accounts receivable | 147 | | 149 |
| Customer allowance for credit losses | (20) | | (18) |
| Customer accounts receivable, net | 127 | | | 131 | |
| Other accounts receivable | 51 | | 58 |
| Other allowance for credit losses | (7) | | (8) |
| Other accounts receivable, net | 44 | | | 50 | |
| Receivables from affiliates | — | | | 1 | |
| Receivable from PHI intercompany pool | 25 | | | — | |
| Inventories, net | | | |
| Fossil fuel | 20 | | | 11 | |
| Materials and supplies | 56 | | | 54 | |
| Prepaid utility taxes | 17 | | | 20 | |
| | | |
| Regulatory assets | 71 | | | 68 | |
| | | |
| Other | 9 | | | 16 | |
| Total current assets | 575 | | | 422 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $1,740 and $1,635 as of September 30, 2022 and December 31, 2021, respectively) | 4,718 | | | 4,560 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 205 | | | 212 | |
| | | |
| | | |
| Prepaid pension asset | 154 | | | 157 | |
| Other | 58 | | | 61 | |
| Total deferred debits and other assets | 417 | | | 430 | |
| Total assets | $ | 5,710 | | | $ | 5,412 | |
See the Combined Notes to Consolidated Financial Statements
42
DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | Short-term borrowings | $ | — | | | $ | 149 | |
| Long-term debt due within one year | Long-term debt due within one year | 84 | | | 83 | |
| Accounts payable | Accounts payable | 120 | | | 131 | |
| Accrued expenses | Accrued expenses | 53 | | | 40 | |
| Payables to affiliates | Payables to affiliates | 24 | | | 33 | |
| | Customer deposits | Customer deposits | 28 | | | 28 | |
| Customer deposits | |
| Customer deposits | |
| Regulatory liabilities | Regulatory liabilities | 39 | | | 25 | |
| Other | Other | 198 | | | 59 | |
| Total current liabilities | Total current liabilities | 546 | | | 548 | |
| Long-term debt | Long-term debt | 1,854 | | | 1,727 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 853 | | | 803 | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Regulatory liabilities | Regulatory liabilities | 392 | | | 441 | |
| Asset retirement obligations | Asset retirement obligations | 13 | | | 16 | |
| | Non-pension postretirement benefits obligations | |
| Non-pension postretirement benefits obligations | |
| Non-pension postretirement benefits obligations | Non-pension postretirement benefits obligations | 9 | | | 11 | |
| Other | Other | 85 | | | 89 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 1,352 | | | 1,360 | |
| Total liabilities | Total liabilities | 3,752 | | | 3,635 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholder's equity | Shareholder's equity | |
| Common stock | Common stock | 1,356 | | | 1,209 | |
| Common stock | |
| Common stock | |
| | Retained earnings | |
| Retained earnings | |
| Retained earnings | Retained earnings | 602 | | | 568 | |
| Total shareholder's equity | Total shareholder's equity | 1,958 | | | 1,777 | |
| Total liabilities and shareholder's equity | Total liabilities and shareholder's equity | $ | 5,710 | | | $ | 5,412 | |
See the Combined Notes to Consolidated Financial Statements
4342
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | (In millions) | Common Stock | | | Retained Earnings | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained Earnings | | Total Shareholder's Equity |
| Balance, December 31, 2021 | $ | 1,209 | | | | $ | 568 | | | $ | 1,777 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | | 56 | | | 56 | |
| Common stock dividends | Common stock dividends | — | | | | (41) | | | (41) | |
| Contributions from parent | Contributions from parent | 144 | | | | — | | | 144 | |
| Balance, March 31, 2022 | $ | 1,353 | | | | $ | 583 | | | $ | 1,936 | |
| Net income | — | | | | 21 | | | 21 | |
| Common stock dividends | — | | | | (15) | | | (15) | |
| Balance at March 31, 2024 | |
| | Balance, June 30, 2022 | $ | 1,353 | | | | $ | 589 | | | $ | 1,942 | |
| Net income | — | | | | 52 | | | 52 | |
| Common stock dividends | — | | | | (39) | | | (39) | |
| Contributions from parent | 3 | | | | — | | | 3 | |
| Balance, September 30, 2022 | $ | 1,356 | | | | $ | 602 | | | $ | 1,958 | |
|
| | Nine Months Ended September 30, 2021 |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| (In millions) | (In millions) | Common Stock | | | Retained Earnings | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained Earnings | | Total Shareholder's Equity |
| Balance, December 31, 2020 | $ | 1,089 | | | | $ | 587 | | | $ | 1,676 | |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | | 56 | | | 56 | |
| Common stock dividends | Common stock dividends | — | | | | (40) | | | (40) | |
| Contributions from parent | Contributions from parent | 120 | | | | — | | | 120 | |
| Balance, March 31, 2021 | $ | 1,209 | | | | $ | 603 | | | $ | 1,812 | |
| Net income | — | | | | 30 | | | 30 | |
| Common stock dividends | — | | | | (23) | | | (23) | |
| Balance at March 31, 2023 | |
| | Balance, June 30, 2021 | $ | 1,209 | | | | $ | 610 | | | $ | 1,819 | |
| Net income | — | | | | 50 | | | 50 | |
| Common stock dividends | — | | | | (43) | | | (43) | |
| | Balance, September 30, 2021 | $ | 1,209 | | | | $ | 617 | | | $ | 1,826 | |
|
See the Combined Notes to Consolidated Financial Statements
4443
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| (In millions) | |
| (In millions) | |
| (In millions) | (In millions) | 2022 | | 2021 | | 2022 | | 2021 |
| Operating revenues | Operating revenues | | | | | | | |
| Operating revenues | |
| Operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | |
| Electric operating revenues | Electric operating revenues | $ | 465 | | | $ | 450 | | | $ | 1,132 | | | $ | 1,055 | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | (3) | | | — | | | (14) | | | 23 | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | |
| Operating revenues from affiliates | Operating revenues from affiliates | — | | | 1 | | | 2 | | | 2 | |
| Total operating revenues | Total operating revenues | 462 | | | 451 | | | 1,120 | | | 1,080 | |
| Total operating revenues | |
| Total operating revenues | |
| Operating expenses | |
| Operating expenses | |
| Operating expenses | Operating expenses | | | | | | | |
| Purchased power | Purchased power | 197 | | | 225 | | | 495 | | | 527 | |
| Purchased power from affiliate | — | | | 5 | | | 2 | | | 14 | |
| Purchased power | |
| Purchased power | |
| | Operating and maintenance | |
| | Operating and maintenance | |
| | Operating and maintenance | Operating and maintenance | 47 | | | 46 | | | 145 | | | 128 | |
| Operating and maintenance from affiliates | Operating and maintenance from affiliates | 33 | | | 35 | | | 106 | | | 103 | |
| Operating and maintenance from affiliates | |
| Operating and maintenance from affiliates | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 74 | | | 46 | | | 192 | | | 133 | |
| Taxes other than income taxes | Taxes other than income taxes | 2 | | | 2 | | | 7 | | | 6 | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 353 | | | 359 | | | 947 | | | 911 | |
| | Operating income | Operating income | 109 | | | 92 | | | 173 | | | 169 | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (17) | | | (14) | | | (49) | | | (43) | |
| | Other, net | Other, net | 3 | | | 1 | | | 9 | | | 3 | |
| | Other, net | |
| | Other, net | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | Total other income and (deductions) | (14) | | | (13) | | | (40) | | | (40) | |
| Income before income taxes | Income before income taxes | 95 | | | 79 | | | 133 | | | 129 | |
| Income before income taxes | |
| Income before income taxes | |
| Income taxes | |
| Income taxes | |
| Income taxes | Income taxes | 1 | | | (11) | | | 2 | | | (12) | |
| | Net income | Net income | $ | 94 | | | $ | 90 | | | $ | 131 | | | $ | 141 | |
| | Net income | |
| | Net income | |
| Comprehensive income | Comprehensive income | $ | 94 | | | $ | 90 | | | $ | 131 | | | $ | 141 | |
| Comprehensive income | |
| Comprehensive income | |
See the Combined Notes to Consolidated Financial Statements
44
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (In millions) | 2024 | | 2023 |
| Cash flows from operating activities | | | |
| Net income | $ | 29 | | | $ | 33 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 74 | | | 67 | |
| Deferred income taxes and amortization of investment tax credits | 7 | | | 6 | |
| Other non-cash operating activities | 2 | | | (9) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (12) | | | 24 | |
| Receivables from and payables to affiliates, net | (5) | | | (1) | |
| Inventories | (3) | | | (3) | |
| Accounts payable and accrued expenses | (1) | | | (15) | |
| Collateral received (paid), net | 1 | | | (44) | |
| Income taxes | 3 | | | 5 | |
| Regulatory assets and liabilities, net | (47) | | | 3 | |
| Pension and non-pension postretirement benefit contributions | (7) | | | (1) | |
| Other assets and liabilities | (13) | | | (21) | |
| Net cash flows provided by operating activities | 28 | | | 44 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (89) | | | (161) | |
| | | |
| | | |
| | | |
| Net cash flows used in investing activities | (89) | | | (161) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (199) | | | — | |
| | | |
| | | |
| Issuance of long-term debt | 75 | | | 75 | |
| | | |
| Changes in PHI intercompany money pool | 134 | | | — | |
| Dividends paid on common stock | (22) | | | (21) | |
| Contributions from parent | 81 | | | 63 | |
| Other financing activities | (2) | | | (1) | |
| Net cash flows provided by financing activities | 67 | | | 116 | |
| Increase (decrease) in cash and cash equivalents | 6 | | | (1) | |
| Cash and cash equivalents at beginning of period | 21 | | | 72 | |
| Cash and cash equivalents at end of period | $ | 27 | | | $ | 71 | |
| | | |
| Supplemental cash flow information | | | |
| Increase (decrease) in capital expenditures not paid | $ | 4 | | | $ | (30) | |
| | | |
| | | |
See the Combined Notes to Consolidated Financial Statements
45
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWSBALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| (In millions) | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 131 | | | $ | 141 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | |
| Depreciation and amortization | 192 | | | 133 | |
| Deferred income taxes and amortization of investment tax credits | 2 | | | (20) | |
| Other non-cash operating activities | 36 | | | (8) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | (53) | | | (81) | |
| Receivables from and payables to affiliates, net | (10) | | | — | |
| Inventories | (6) | | | (1) | |
| Accounts payable and accrued expenses | (10) | | | (3) | |
| Collateral received, net | 70 | | | — | |
| Income taxes | 7 | | | 10 | |
| Regulatory assets and liabilities, net | (6) | | | 29 | |
| Pension and non-pension postretirement benefit contributions | (7) | | | (3) | |
| Other assets and liabilities | (54) | | | (14) | |
| Net cash flows provided by operating activities | 292 | | | 183 | |
| Cash flows from investing activities | | | |
| Capital expenditures | (284) | | | (336) | |
| | | |
| | | |
| Other investing activities | 1 | | | 1 | |
| Net cash flows used in investing activities | (283) | | | (335) | |
| Cash flows from financing activities | | | |
| Changes in short-term borrowings | (144) | | | 38 | |
| | | |
| | | |
| Issuance of long-term debt | 175 | | | 350 | |
| Retirement of long-term debt | — | | | (254) | |
| | | |
| Dividends paid on common stock | (128) | | | (280) | |
| Contributions from parent | 175 | | | 303 | |
| Other financing activities | (4) | | | (5) | |
| Net cash flows provided by financing activities | 74 | | | 152 | |
| Increase in cash, restricted cash, and cash equivalents | 83 | | | — | |
| Cash, restricted cash, and cash equivalents at beginning of period | 29 | | | 30 | |
| Cash, restricted cash, and cash equivalents at end of period | $ | 112 | | | $ | 30 | |
| | | |
| Supplemental cash flow information | | | |
| Decrease in capital expenditures not paid | $ | (12) | | | $ | (34) | |
| | | |
| | | |
| | | | | | | | | | | |
| (In millions) | March 31, 2024 | | December 31, 2023 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 27 | | | $ | 21 | |
| | | |
| Accounts receivable | | | |
| Customer accounts receivable | 178 | | 194 |
| Customer allowance for credit losses | (36) | | (36) |
| Customer accounts receivable, net | 142 | | | 158 | |
| Other accounts receivable | 115 | | 92 |
| Other allowance for credit losses | (14) | | (14) |
| Other accounts receivable, net | 101 | | | 78 | |
| | | |
| Receivables from affiliates | 4 | | | 3 | |
| | | |
| Inventories, net | 58 | | | 55 | |
| | | |
| | | |
| | | |
| Regulatory assets | 145 | | | 125 | |
| Other | 7 | | | 5 | |
| Total current assets | 484 | | | 445 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $1,702 and $1,684 as of March 31, 2024 and December 31, 2023, respectively) | 4,232 | | | 4,192 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 497 | | | 483 | |
| | | |
| | | |
| | | |
| Prepaid pension asset | 6 | | | 3 | |
| | | |
| Other | 34 | | | 34 | |
| Total deferred debits and other assets | 537 | | | 520 | |
| Total assets | $ | 5,253 | | | $ | 5,157 | |
See the Combined Notes to Consolidated Financial Statements
46
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| (In millions) | September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 112 | | | $ | 29 | |
| | | |
| Accounts receivable | | | |
| Customer accounts receivable | 221 | | 190 |
| Customer allowance for credit losses | (47) | | (49) |
| Customer accounts receivable, net | 174 | | | 141 | |
| Other accounts receivable | 70 | | 76 |
| Other allowance for credit losses | (14) | | (15) |
| Other accounts receivable, net | 56 | | | 61 | |
| | | |
| Receivables from affiliates | 1 | | | 2 | |
| | | |
| Inventories, net | 42 | | | 36 | |
| | | |
| | | |
| Prepaid utility taxes | 12 | | | — | |
| Regulatory assets | 125 | | | 61 | |
| Other | 4 | | | 3 | |
| Total current assets | 526 | | | 333 | |
| Property, plant, and equipment (net of accumulated depreciation and amortization of $1,523 and $1,420 as of September 30, 2022 and December 31, 2021, respectively) | 3,858 | | | 3,729 | |
| Deferred debits and other assets | | | |
| Regulatory assets | 525 | | | 430 | |
| | | |
| | | |
| | | |
| Prepaid pension asset | 22 | | | 27 | |
| | | |
| Other | 35 | | | 37 | |
| Total deferred debits and other assets | 582 | | | 494 | |
| Total assets | $ | 4,966 | | | $ | 4,556 | |
See the Combined Notes to Consolidated Financial Statements
47
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | (In millions) | (In millions) | September 30, 2022 | | December 31, 2021 | (In millions) | March 31, 2024 | | December 31, 2023 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| Current liabilities | Current liabilities | |
| Current liabilities | |
| Current liabilities | |
| Short-term borrowings | |
| Short-term borrowings | |
| Short-term borrowings | Short-term borrowings | $ | — | | | $ | 144 | |
| Long-term debt due within one year | Long-term debt due within one year | 3 | | | 3 | |
| Accounts payable | Accounts payable | 147 | | | 165 | |
| Accrued expenses | Accrued expenses | 40 | | | 44 | |
| Payables to affiliates | Payables to affiliates | 20 | | | 31 | |
| | Borrowings from PHI intercompany money pool | |
| | Borrowings from PHI intercompany money pool | |
| | Borrowings from PHI intercompany money pool | |
| Customer deposits | Customer deposits | 19 | | | 18 | |
| Regulatory liabilities | Regulatory liabilities | 34 | | | 28 | |
| PPA termination obligation | PPA termination obligation | 87 | | | — | |
| Other | Other | 81 | | | 12 | |
| Total current liabilities | Total current liabilities | 431 | | | 445 | |
| Long-term debt | Long-term debt | 1,755 | | | 1,579 | |
| Deferred credits and other liabilities | Deferred credits and other liabilities | |
| Deferred income taxes and unamortized investment tax credits | Deferred income taxes and unamortized investment tax credits | 733 | | | 682 | |
| Deferred income taxes and unamortized investment tax credits | |
| Deferred income taxes and unamortized investment tax credits | |
| Regulatory liabilities | Regulatory liabilities | 164 | | | 214 | |
| | Non-pension postretirement benefit obligations | Non-pension postretirement benefit obligations | 9 | | | 12 | |
| | Non-pension postretirement benefit obligations | |
| | Non-pension postretirement benefit obligations | |
| | Other | |
| | Other | |
| | Other | Other | 121 | | | 49 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 1,027 | | | 957 | |
| Total liabilities | Total liabilities | 3,213 | | | 2,981 | |
| Commitments and contingencies | Commitments and contingencies | | | | Commitments and contingencies | | | |
| Shareholder's equity | Shareholder's equity | |
| Common stock | Common stock | 1,765 | | | 1,590 | |
| Common stock | |
| Common stock | |
| Retained deficit | Retained deficit | (12) | | | (15) | |
| | Total shareholder's equity | Total shareholder's equity | 1,753 | | | 1,575 | |
| Total shareholder's equity | |
| Total shareholder's equity | |
| Total liabilities and shareholder's equity | Total liabilities and shareholder's equity | $ | 4,966 | | | $ | 4,556 | |
See the Combined Notes to Consolidated Financial Statements
4847
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
| | Nine Months Ended September 30, 2022 |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| (In millions) | (In millions) | Common Stock | | | Retained Deficit | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained (Deficit) | | Total Shareholder's Equity |
| Balance, December 31, 2021 | $ | 1,590 | | | | $ | (15) | | | $ | 1,575 | |
| Balance at December 31, 2023 | |
| Net income | Net income | — | | | | 26 | | | 26 | |
| Common stock dividends | Common stock dividends | — | | | | (19) | | | (19) | |
| Contributions from parent | Contributions from parent | 173 | | | | — | | | 173 | |
| Balance, March 31, 2022 | $ | 1,763 | | | | $ | (8) | | | $ | 1,755 | |
| Net income | — | | | | 11 | | | 11 | |
| Common stock dividends | — | | | | (19) | | | (19) | |
| Balance at March 31, 2024 | |
| | Balance, June 30, 2022 | $ | 1,763 | | | | $ | (16) | | | $ | 1,747 | |
| Net income | — | | | | 94 | | | 94 | |
| Common stock dividends | — | | | | (90) | | | (90) | |
| Contributions from parent | 2 | | | | — | | | 2 | |
| Balance, September 30, 2022 | $ | 1,765 | | | | $ | (12) | | | $ | 1,753 | |
|
| | Nine Months Ended September 30, 2021 |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| (In millions) | (In millions) | Common Stock | | | Retained Earnings (Deficit) | | Total Shareholder's Equity | (In millions) | Common Stock | | | | Retained (Deficit) Earnings | | Total Shareholder's Equity |
| Balance, December 31, 2020 | $ | 1,271 | | | | $ | 127 | | | $ | 1,398 | |
| Balance at December 31, 2022 | |
| Net income | Net income | — | | | | 14 | | | 14 | |
| Common stock dividends | Common stock dividends | — | | | | (14) | | | (14) | |
| Contributions from parent | Contributions from parent | 303 | | | | — | | | 303 | |
| Balance, March 31, 2021 | $ | 1,574 | | | | $ | 127 | | | $ | 1,701 | |
| Net income | — | | | | 37 | | | 37 | |
| Common stock dividends | — | | | | (215) | | | (215) | |
| Balance at March 31, 2023 | |
| | Balance, June 30, 2021 | $ | 1,574 | | | | $ | (51) | | | $ | 1,523 | |
| Net income | — | | | | 90 | | | 90 | |
| Common stock dividends | — | | | | (51) | | | (51) | |
| | Balance, September 30, 2021 | $ | 1,574 | | | | $ | (12) | | | $ | 1,562 | |
|
See the Combined Notes to Consolidated Financial Statements
4948
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)
Note 1 — Significant Accounting Policies
1. Significant Accounting Policies (All Registrants)
Description of Business
Exelon is a utility services holding company engaged in the energy distributiontransmission and transmissiondistribution businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
On February 21, 2021, Exelon's Board of Directors approved a plan to separate the Utility Registrants and Generation. The separation was completed on February 1, 2022, creating two publicly traded companies, Exelon and Constellation. See Note 2 — Discontinued Operations for additional information.
| | | | | | | | | | | | | | |
| Name of Registrant | | Business | | Service Territories |
| Commonwealth Edison Company | | Purchase and regulated retail sale of electricity | | Northern Illinois, including the City of Chicago |
| | Transmission and distribution of electricity to retail customers | | |
| PECO Energy Company | | Purchase and regulated retail sale of electricity and natural gas | | Southeastern Pennsylvania, including the City of Philadelphia (electricity) |
| | Transmission and distribution of electricity and distribution of natural gas to retail customers | | Pennsylvania counties surrounding the City of Philadelphia (natural gas) |
| Baltimore Gas and Electric Company | | Purchase and regulated retail sale of electricity and natural gas | | Central Maryland, including the City of Baltimore (electricity and natural gas) |
| | Transmission and distribution of electricity and distribution of natural gas to retail customers | | |
| Pepco Holdings LLC | | Utility services holding company engaged, through its reportable segments Pepco, DPL, and ACE | | Service Territories of Pepco, DPL, and ACE |
| | | | |
Potomac Electric
Power Company | | Purchase and regulated retail sale of electricity | | District of Columbia, and major portions of Montgomery and Prince George’s Counties, Maryland |
| | Transmission and distribution of electricity to retail customers | | |
Delmarva Power &
Light Company | | Purchase and regulated retail sale of electricity and natural gas | | Portions of Delaware and Maryland (electricity) |
| | Transmission and distribution of electricity and distribution of natural gas to retail customers | | Portions of New Castle County, Delaware (natural gas) |
| Atlantic City Electric Company | | Purchase and regulated retail sale of electricity | | Portions of Southern New Jersey |
| | Transmission and distribution of electricity to retail customers | | |
Basis of Presentation
This is a combined quarterly report of all Registrants. The Notes to the Consolidated Financial Statements apply to the Registrants as indicated parenthetically next to each corresponding disclosure. When appropriate, the Registrants are named specifically for their related activities and disclosures. Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated, except for the historical transactions between the Utility Registrants and Generation for the purposes of presenting discontinued operations in all periods presented in the Consolidated Statements of Operations and Comprehensive Income.eliminated.
Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology, and supply management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, accounting,finance, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies. The costs of BSC and PHISCO are directly charged or allocated to the applicable subsidiaries. The results of Exelon’s corporate operations are presented as “Other” in the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
The accompanying consolidated financial statements as of September 30, 2022March 31, 2024 and for the three and nine months ended September 30, 2022March 31, 2024 and 20212023 are unaudited but, in the opinion of each Registrant's management, the management of each RegistrantRegistrants include all adjustments that are considered necessary for a fair statement of the Registrants’ respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature,
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)
Note 1 — Significant Accounting Policies
except as otherwise disclosed. The December 31, 20212023 Consolidated Balance Sheets were derived from audited financial statements. The interim financial statements are to be read in conjunction with prior annual financial statements and notes. Additionally, financial results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2022.2024. These Combined Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)
Note 1 — Significant Accounting Policies
statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
New Accounting Standards (All Registrants)
New Accounting Standards Issued and Not Yet Adopted as of March 31, 2024: The separationfollowing new authoritative accounting guidance issued by the FASB has not yet been adopted and reflected by the Registrants in their consolidated financial statements as of Constellation, including Generation and its subsidiaries, meetsMarch 31, 2024. Unless otherwise indicated, the criteria for discontinued operations and asRegistrants are currently assessing the impacts such results of operations are presented as discontinued operations andguidance may have been excluded from continuing operations for all periods presented. Accounting rules require that certain BSC costs previously allocated to Generation(which could be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations. Comprehensive income, shareholders' equity, and cash flows related to Constellation have not been segregated and are includedmaterial) in thetheir Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity, and Consolidated Statements of Cash Flows respectively,and disclosures, as well as the potential to early adopt where applicable. The Registrants have assessed other FASB issuances of new standards which are not listed below given the current expectation that such standards will not significantly impact the Registrants' financial reporting.
Segment Reporting (Issued November 2023). Improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The objective of the revised guidance is to introduce a new requirement to disclose significant segment expenses regularly provided to the CODM, extend certain annual disclosures to interim periods, clarify single reportable segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM. The standard is effective for allannual periods presented. See Note 2 — Discontinued Operationsbeginning January 1, 2024 and interim periods beginning January 1, 2025, with early adoption permitted. The standard will be applied retrospectively.
Improvement to Income Tax Disclosures (Issued December 2023). Provides additional disclosure requirements related to the effective tax rate reconciliation and income taxes paid. Under the revised guidance for the effective tax reconciliations, entities would be required to disclose: (1) eight specific categories in the effective tax rate reconciliation in both percentages and reporting currency amount, (2) additional information.information for reconciling items over a certain threshold, (3) explanation of individual reconciling items disclosed, and (4) provide a qualitative description of the state and local jurisdictions that contribute to the majority of the state income tax expense. For each annual period presented, the new standard requires disclosure of the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign. It also requires additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). The standard is effective January 1, 2025, with early adoption permitted.
2. Discontinued Operations (Exelon)Regulatory Matters (All Registrants)
On February 21, 2021, Exelon's Board As discussed in Note 3 — Regulatory Mattersof Directors approved a plan to separate the Utility2023 Form 10-K, the Registrants are involved in rate and Generation, creating two publicly traded companies ("the separation"). Exelon completed the separation on February 1, 2022, through the distribution of 326,663,937 common stock shares of Constellation, the new publicly traded company, to Exelon shareholders. Under the separation plan, Exelon shareholders retainedregulatory proceedings at FERC and their current shares of Exelon stockstate commissions. The following discusses developments in 2024 and received one share of Constellation common stock for every three shares of Exelon common stock held on January 20, 2022, the record date for the distribution, in a transaction that is tax-free to Exelon and its shareholders for U.S. federal income tax purposes.
Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purposes of separation and holds Generation (including Generation's subsidiaries).
Pursuantupdates to the separation:2023 Form 10-K.
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2024.
Completed Distribution Base Rate Case Proceedings
•Exelon entered into four term loans consisting of a 364-day term loan for $1.15 billion and three 18-month term loans for $300 million, $300 million and $250 million, respectively. Exelon issued these term loans primarily to fund the cash payment to Constellation and for general corporate purposes. See Note 11 — Debt and Credit Agreements for additional information.
•Exelon made a cash payment of $1.75 billion to Constellation on January 31, 2022.
•Exelon contributed its equity ownership interest in Generation to Constellation. Exelon no longer retains any equity ownership interest in Generation or Constellation.
•Exelon transferred certain corporate assets and employee-related obligations to Constellation.
•Exelon received cash from Generation of $258 million to settle the intercompany loan on January 31, 2022. See Note 11 — Debt and Credit Agreements for additional information.
Continuing Involvement
In order to govern the ongoing relationships between Exelon and Constellation after the separation, and to facilitate an orderly transition, Exelon and Constellation have entered into several agreements, including the following:
•Separation Agreement – governs the rights and obligations between Exelon and Constellation regarding certain actions to be taken in connection with the separation, among others, including the allocation of assets and liabilities between Exelon and Constellation.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Discontinued OperationsRegulatory Matters
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Approved Revenue Requirement Increase | | Approved ROE | | Approval Date | | Rate Effective Date |
| ComEd - Illinois | | January 17, 2023 | | Electric | | $ | 1,487 | | | $ | 501 | | | 8.905% | | December 14, 2023(a) | | January 1, 2024 |
| | | $ | 838 | | | $ | 810 | | | 8.905% | | April 18, 2024(b) | | May 1, 2024 |
| April 21, 2023(c) | | Electric | | $ | 247 | | | $ | 259 | | | 8.91% | | November 30, 2023 | | January 1, 2024 |
BGE - Maryland(d) | | February 17, 2023 | | Electric | | $ | 313 | | | $ | 179 | | | 9.50% | | December 14, 2023 | | January 1, 2024 |
| | Natural Gas | | $ | 289 | | | $ | 229 | | | 9.45% | | |
| | | | | | | | | | | | | | |
Pepco - Maryland(e) | | October 26, 2020 (amended March 31, 2021) | | Electric | | $ | 104 | | | $ | 52 | | | 9.55% | | June 28, 2021 | | June 28, 2021 |
DPL - Maryland(f) | | May 19, 2022 | | Electric | | $ | 38 | | | $ | 29 | | | 9.60% | | December 14, 2022 | | January 1, 2023 |
| DPL - Delaware | | December 15, 2022 (amended September 29, 2023) | | Electric | | $ | 39 | | | $ | 28 | | | 9.60% | | April 18, 2024 | | July 15, 2023 |
ACE - New Jersey(g) | | February 15, 2023 (amended August 21, 2023) | | Electric | | $ | 92 | | | $ | 45 | | | 9.60% | | November 17, 2023 | | December 1, 2023 |
__________
•(a)Transition Services Agreement (TSA) – governsReflects a four-year cumulative multi-year rate plan for January 1, 2024 to December 31, 2027. On December 14, 2023, the termsICC approved year-over-year distribution revenue requirement increases in 2024-2027, with an amendatory order on January 10, 2024, of approximately $451 million effective January 1, 2024, $14 million effective January 1, 2025, $6 million effective January 1, 2026, and conditions$30 million effective January 1, 2027, based on an ROE of 8.905%, an equity ratio of 50%, and year end 2022 rate base. The ICC rejected ComEd’s Grid Plan, requiring ComEd to file a revised Grid Plan by March 13, 2024, 90 days after the issuance of the servicesDecember final order. The ICC also directed that Exelon will provide to Constellation and Constellation will provide to Exelon for an expected period of two years, providedthe revised Grid Plan would be reviewed through further formal proceedings in that certain services may be longer thandocket. On January 10, 2024, the term and services may be extended with approval from both parties. The services include specified accounting, finance, information technology, human resources, employee benefits and other services that have historically been provided on a centralized basis by BSC. For the three months ended September 30, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $68 million recorded in Other income, net and $12 million recorded in Operating and maintenance expense, respectively. Additionally, for the period from February 1, 2022 to September 30, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $193 million recorded in Other income, net and $32 million recorded in Operating and maintenance expense, respectively.
•Tax Matters Agreement (TMA) – governs the respective rights, responsibilities and obligations of Exelon and Constellation with respect to all tax matters, including tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. See Note 8. Income Taxes for additional information.
In addition, the Utility Registrants will continue to incur expenses from transactions with Generation after the separation. Prior to the separation, such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants. After the separation, such expenses are primarily recorded as Purchased power and an immaterial amount recorded as Operating and maintenance expense at the Utility Registrants.
•ComEd had an ICC-approved RFP contract with Generation to provide aICC granted one portion of ComEd’s electric supply requirements.application for rehearing of the December 14, 2023 final order, and directed that a rehearing process extending no more than 150 days reconsider certain components of the revenue requirements for the test years (2024-2027), absent an approved Grid Plan. On January 10, 2024, ComEd also purchased RECsfiled with the Illinois appellate court an appeal of various aspects of the ICC’s final order on which rehearing was denied, including the 8.905% ROE and ZECs from Generation.50% equity ratio and denial of any return on ComEd’s pension asset. On March 13, 2024, ComEd filed its revised Grid Plan (Refiled Grid Plan) with supporting testimony and schedules with the ICC. On March 15, 2024, ComEd filed a petition to adjust its MRP to authorize increased rates consistent with the Refiled Grid Plan.
•(b)PECO received electric supplyReflects four-year cumulative increase to the revenue requirement approved on December 14, 2023 and amended on January 10, 2024 of $810 million for January 1, 2024 to December 31, 2027 resulting from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO hadthe rehearing on certain components of the rate plan. On February 16, 2024, ComEd filed a ten-year agreement with Generation to sell solar AECs.
•BGE received a portionrevised revenue request for an $838 million increase in its 2024-2027 revenue requirements based on the ICC’s limited scope for rehearing which included the value of its energythe 2023 forecasted year-end rate base. On April 18, 2024, the ICC issued an order on the rehearing filing which increased the revenue requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.
•Pepco received electric supply from Generation under contracts executed through Pepco’s competitive procurement processpreviously approved by the MDPSCICC in its January 10, 2024, amendatory order by $150 million in 2024, $186 million in 2025, $221 million in 2026 and DCPSC.$253 million in 2027. ComEd anticipates that the revenue requirements determined during the rehearing process will be further adjusted upon approval of the Refiled Grid Plan and the pending petition to adjust rates.
•(c)DPL receivedOn November 30, 2023, the Delivery Reconciliation Amount for 2022 defined in Rider Delivery Service Pricing Reconciliation (Rider DSPR) was approved. The delivery reconciliation amount allows for the reconciliation of the revenue requirement in effect in the final years in which formula rates are determined and until such time as new rates are established under ComEd’s approved MRP. The 2023 filing reconciled the delivery service rates in effect in 2022 with the actual delivery service costs incurred in 2022. The reconciliation revenue requirement provides for a portionweighted average debt and equity return on distribution rate base of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.6.48%, inclusive of an allowed ROE of 8.91%, reflecting the monthly yields on 30-year treasury bonds plus 580 basis points.
•(d)ACE receivedReflects a three-year cumulative multi-year plan for January 1, 2024 through December 31, 2026. The MDPSC awarded BGE electric supply from Generation under contracts executed through ACE’s competitive procurement process approved by the NJBPU.
ComEdrevenue requirement increases of $41 million, $113 million, and PECO also have receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd$25 million in 2024, 2025, and PECO, as applicable, for payment to their respective customers. See Note 9 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements of the 2021 Recast Form 10-K and Note 17 — Related Party Transactions for additional information.
Discontinued Operations
The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations.
The following table presents the results of Constellation that have been reclassified from continuing operations and included in discontinued operations within Exelon’s Consolidated Statements of Operations and Comprehensive Income for the three months ended September 30, 2021 and the nine months ended September 30, 2022 and September 30, 2021.
These results are primarily Generation, which is comprised of Exelon’s Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions reportable segments, and include the impact of transaction costs, certain BSC costs, including any transition costs, that were historically allocated and directly attributable to Generation, transactions2026,
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Discontinued Operations
between Generation and the Utility Registrants, and tax-related adjustments. Transaction costs include costs for external bankers, accountants, appraisers, lawyers, external counsels and other advisors, among others, who are involved in the negotiation, appraisal, due diligence and regulatory approval of the separation. Transition costs are primarily employee-related costs such as recruitment expenses, costs to establish certain stand-alone functions and information technology systems, professional services fees and other separation-related costs during the transition to separate Generation. For the purposes of reporting discontinued operations, these results also include transactions between Generation and the Utility Registrants that were historically eliminated within Exelon’s Consolidated Statements of Operations as these transactions will be ongoing after the separation. Certain BSC costs that were historically allocated to Generation are presented as part of continuing operations in Exelon’s Consolidated Statements of Operations as these costs do not qualify as expenses of the discontinued operations per the accounting rules.
| | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | 2021 | | 2022 | | 2021 |
| Operating revenues | | | | | | | |
| Competitive business revenues | | | $ | 4,083 | | | $ | 1,855 | | | $ | 13,250 | |
| Competitive business revenues from affiliates | | | 325 | | | 161 | | | 873 | |
| Total operating revenues | | | 4,408 | | | 2,016 | | | 14,123 | |
| Operating expenses | | | | | | | |
| Competitive businesses purchased power and fuel | | | 1,545 | | | 1,138 | | | 8,102 | |
| | | | | | | |
Operating and maintenance(a) | | | 845 | | | 371 | | | 3,132 | |
| | | | | | | |
| Depreciation and amortization | | | 866 | | | 94 | | | 2,735 | |
| Taxes other than income taxes | | | 115 | | | 44 | | | 354 | |
| Total operating expenses | | | 3,371 | | | 1,647 | | | 14,323 | |
| Gain on sales of assets and businesses | | | 65 | | | 10 | | | 144 | |
| Operating income (loss) | | | 1,102 | | | 379 | | | (56) | |
| Other income and (deductions) | | | | | | | |
| Interest expense, net | | | (73) | | | (20) | | | (214) | |
| | | | | | | |
| Other, net | | | (115) | | | (281) | | | 561 | |
| Total other (deductions) and income | | | (188) | | | (301) | | | 347 | |
| Income before income taxes | | | 914 | | | 78 | | | 291 | |
| Income taxes | | | 139 | | | (40) | | | 152 | |
| Equity in losses of unconsolidated affiliates | | | (3) | | | (1) | | | (5) | |
| Net income | | | 772 | | | 117 | | | 134 | |
| Net income attributable to noncontrolling interests | | | 26 | | | 1 | | | 126 | |
| Net income from discontinued operations | | | $ | 746 | | | $ | 116 | | | $ | 8 | |
__________
(a)Includes transaction and transition costs related to the separation of $52 million for the nine months ended September 30, 2022 and $13 million and $19 million for the three and nine months ended September 30, 2021, respectively. See discussion above for additional information.
There were no assets and liabilities of discontinued operations included in Exelon’s Consolidated Balance Sheet as of September 30, 2022. Constellation had net assets of $11,573 million that separated on February 1, 2022 that resulted in a reduction to Exelon’s equity during the nine months ended September 30, 2022. Refer to the Distribution of Constellation line in Exelon’s Consolidated Statement of Changes in Shareholders’ Equity for further information.
The following table presents the assets and liabilities of discontinued operations in Exelon’s Consolidated Balance Sheet as of December 31, 2021:
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Discontinued Operations
| | | | | | | | |
| | December 31, 2021 |
ASSETS | | |
Current assets | | |
Cash and cash equivalents | | $ | 510 | |
Restricted cash and cash equivalents | | 72 | |
Accounts receivable | | |
Customer accounts receivable | | 1,724 |
Customer allowance for credit losses | | (55) |
Customer accounts receivable, net | | 1,669 | |
Other accounts receivable | | 596 |
Other allowance for credit losses | | (4) |
Other accounts receivable, net | | 592 | |
Mark-to-market derivative assets | | 2,169 | |
Inventories, net | | |
Fossil fuel and emission allowances | | 284 | |
Materials and supplies | | 1,004 | |
Renewable energy credits | | 529 | |
Assets held for sale | | 13 | |
Other | | 993 | |
Total current assets of discontinued operations | | 7,835 | |
Property, plant, and equipment (net of accumulated depreciation and amortization of $15,888) | | 19,661 | |
Deferred debits and other assets | | |
Nuclear decommissioning trust funds | | 15,938 | |
Investments | | 193 | |
| | |
Mark-to-market derivative assets | | 949 | |
Other | | 1,768 | |
Total property, plant, and equipment, deferred debits, and other assets of discontinued operations | | 38,509 | |
Total assets of discontinued operations | | $ | 46,344 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Discontinued Operations
| | | | | | | | |
| | December 31, 2021 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | |
Current liabilities | | |
Short-term borrowings | | $ | 2,082 | |
Long-term debt due within one year | | 1,220 | |
Accounts payable | | 1,757 | |
Accrued expenses | | 818 | |
Mark-to-market derivative liabilities | | 981 | |
| | |
Renewable energy credit obligation | | 779 | |
Liabilities held for sale | | 3 | |
Other | | 300 | |
Total current liabilities of discontinued operations | | 7,940 | |
Long-term debt | | 4,575 | |
Deferred credits and other liabilities | | |
Deferred income taxes and unamortized investment tax credits | | 3,583 | |
Asset retirement obligations | | 12,819 | |
Pension obligations | | 939 | |
Non-pension postretirement benefit obligations | | 876 | |
Spent nuclear fuel obligation | | 1,210 | |
Mark-to-market derivative liabilities | | 513 | |
| | |
Other | | 1,161 | |
Total long-term debt, deferred credits, and other liabilities of discontinued operations | | 25,676 | |
Total liabilities of discontinued operations | | $ | 33,616 | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
The following table presents selected financial information regarding cash flows of the discontinued operations that are included within Exelon’s Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and September 30, 2021.
| | | | | | | | | | | |
| Nine Months Ended
September 30, |
| 2022 | | 2021 |
| Non-cash items included in net income from discontinued operations: | | | |
| Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization | $ | 207 | | | $ | 3,951 | |
| Asset impairments | — | | | 537 | |
| Loss (gain) on sales of assets and businesses | 9 | | | (144) | |
| Deferred income taxes and amortization of investment tax credits | (143) | | | (242) | |
| Net fair value changes related to derivatives | (59) | | | (1,244) | |
| Net realized and unrealized losses (gains) on NDT fund investments | 205 | | | (383) | |
| Net unrealized losses on equity investments | 16 | | | 83 | |
| Other decommissioning-related activity | 36 | | | (810) | |
| Cash flows from investing activities: | | | |
| Capital expenditures | (227) | | | (1,098) | |
| Collection of DPP | 169 | | | 3,052 | |
| Supplemental cash flow information: | | | |
| Decrease in capital expenditures not paid | (128) | | | (77) | |
| Increase in DPP | 348 | | | 2,933 | |
| Increase in PP&E related to ARO update | 335 | | | 550 | |
| | | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
3. Regulatory Matters (All Registrants)
As discussed in Note 3 — Regulatory Matters of the 2021 Recast Form 10-K, the Registrants are involved in rate and regulatory proceedings at FERC and their state commissions. The following discusses developments in 2022 and updates to the 2021 Recast Form 10-K.
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2022.
Completed Distribution Base Rate Case Proceedings
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Approved Revenue Requirement Increase | | Approved ROE | | Approval Date | | Rate Effective Date |
ComEd - Illinois(a) | | April 16, 2021 | | Electric | | $ | 51 | | | $ | 46 | | | 7.36 | % | | December 1, 2021 | | January 1, 2022 |
| PECO - Pennsylvania | | March 30, 2021 | | Electric | | 246 | | | 132 | | | N/A(b) | | November 18, 2021 | | January 1, 2022 |
| March 31, 2022 | | Natural Gas | | 82 | | | 55 | | | | October 27, 2022 | | January 1, 2023 |
BGE - Maryland(c) | | May 15, 2020 (amended September 11, 2020) | | Electric | | 203 | | | 140 | | | 9.50 | % | | December 16, 2020 | | January 1, 2021 |
| | Natural Gas | | 108 | | | 74 | | | 9.65 | % | | |
Pepco - District of Columbia(d) | | May 30, 2019 (amended June 1, 2020) | | Electric | | 136 | | | 109 | | | 9.275 | % | | June 8, 2021 | | July 1, 2021 |
Pepco - Maryland(e) | | October 26, 2020 (amended March 31, 2021) | | Electric | | 104 | | | 52 | | | 9.55 | % | | June 28, 2021 | | June 28, 2021 |
DPL - Maryland(f) | | September 1, 2021 (amended December 23, 2021) | | Electric | | 27 | | | 13 | | | 9.60 | % | | March 2, 2022 | | March 2, 2022 |
| DPL - Delaware | | January 14, 2022 (amended August 15, 2022) | | Natural Gas | | 13 | | | 8 | | | 9.60 | % | | October 12, 2022 | | November 1, 2022 |
ACE - New Jersey(g) | | December 9, 2020 (amended February 26, 2021) | | Electric | | 67 | | | 41 | | | 9.60 | % | | July 14, 2021 | | January 1, 2022 |
__________
(a)ComEd's 2022 approved revenue requirement reflects an increase of $37 million for the initial year revenue requirement for 2022 and an increase of $9 million related to the annual reconciliation for 2020. The revenue requirement for 2022 provides for a weighted average debt and equity return on distribution rate base of 5.72%, inclusive of an allowed ROE of 7.36%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2020 provides for a weighted average debt and equity return on distribution rate base of 5.69%, inclusive of an allowed ROE of 7.29%, reflecting the monthly yields on 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points.
(b)The PECO electric and natural gas base rate case proceedings were resolved through settlement agreements, which did not specify an approved ROE.
(c)Reflects a three-year cumulative multi-year plan for 2021 through 2023. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 2023. The MDPSC awarded BGE electric revenue requirement increases of $59 million, $39 million, and $42 million, before offsets, in 2021, 2022, and 2023, respectively, and natural gas revenue requirement increases of $53$126 million, $11$62 million, and $10$41 million before offsets, in 2021, 2022,2024, 2025, and 2023,2026, respectively. However,Requested revenue requirement increases will be used to recover capital investments designed to increase the MDPSC utilized the tax benefits to fully offset the increases in 2021 and January 2022 such that customer rates remained unchanged. For the remainder of 2022, the MDPSC chose to offset only 25%resilience of the cumulativeelectric and gas distribution systems and support Maryland's climate and regulatory initiatives. The MDPSC also approved a portion of the requested 2021 and 2022 reconciliation amounts, which will be recovered through separate electric revenue requirement increases and 50% ofgas riders between March 2024 through February 2025. As such, the cumulative gas revenue
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollarsreconciliation amounts are not included in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
requirement increases. In 2021, the MDPSC deferred a decision on whether to use certain tax benefits to offset the revenue requirement increases in 2023 and directed BGE to make another proposal at the end of 2022. In September 2022 BGE proposed that tax benefits not be used to offset the 2023approved revenue requirement increases. On October 26,The 2021 reconciliation amounts are $13 million and $7 million for electric and gas, respectively, and the 2022 reconciliation amounts are $39 million and $15 million for electric and gas, respectively. In April 2024, BGE filed with the MDPSC accepted BGE's recommendation to not use tax benefits to offsetits request for recovery of the 2023 revenue requirement increases.
(d)Reflects a cumulative multi-year plan with 18-months remaining in 2021 through 2022. The DCPSC awarded Pepco electric incremental revenue requirement increasesreconciliation amounts of $42$79 million and $67 million, before offsets, for 2021 and 2022, respectively. However, the DCPSC utilized the acceleration of refunds for certain tax benefits along with other rate relief to partially offset the customer rate increases by $22 million and $40$73 million for 2021electric and 2022, respectively.gas, respectively, with supporting testimony and schedules.
(e)Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024. The MDPSC awarded Pepco electric incremental revenue requirement increases of $21 million, $16 million, and $15 million, before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively. Pepco proposed to utilize certain tax benefits to fully offset the increase through 2023 and partially offset customer rate increases in 2024. However, the MDPSC only utilized the acceleration of refunds for certain tax benefits to fully offset the increases such that customer rates remain unchanged through March 31, 2022. On February 23, 2022, the MDPSC chose to offset 25% of the cumulative revenue requirement increase for the 12-month period ending March 31, 2023. WhetherIn 2021, the MDPSC deferred a decision on whether to use certain tax benefits will be used to offset the customer raterevenue requirement increases for the 12-month period ending March 31, 2024 has2024. In December 2022 Pepco proposed that tax benefits not been decided, and Pepco cannot predictbe used to offset the outcome.revenue requirement increases for this period. On January 25, 2023, the MDPSC accepted Pepco’s recommendations not to use tax benefits to offset revenue requirement increases for the 12-month period ending March 31, 2024.
(f)Reflects a three-year cumulative multi-year plan for January 1, 2023 through December 31, 2025. The approved settlement reflects a 9.60% ROE, which is solelyMDPSC awarded DPL electric incremental revenue requirement increases of $17 million, $6 million, and $6 million for the purposes of calculating AFUDC2023, 2024, and regulatory asset carrying costs.2025, respectively.
(g)Requested and approved increases are before New Jersey sales and use tax. The order allowsNJBPU awarded ACE to retain approximately $11electric revenue requirement increases of $36 million of certain tax benefits which resulted in a decrease to income tax expense in Exelon's, PHI's, and ACE's Consolidated Statements of Operations$9 million effective December 1, 2023 and Comprehensive Income in the third quarter of 2021.February 1, 2024, respectively.
Pending Distribution Base Rate Case Proceedings
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Requested ROE | | Expected Approval Timing |
ComEd - Illinois(a) | | April 15, 2022 | | Electric | | $ | 199 | | | 7.85 | % | | Fourth quarter of 2022 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
DPL - Maryland(b) | | May 19, 2022 | | Electric | | 38 | | | 10.25 | % | | Fourth quarter of 2022 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Requested ROE | | Expected Approval Timing |
| ComEd - Illinois | | March 15, 2024 | | Electric(a) | | $ | 670 | | | 8.905% | | December 2024 |
| April 26, 2024 | | Electric(b) | | $ | 627 | | | 9.89% | | December 2024 |
| PECO - Pennsylvania | | March 28, 2024 | | Electric(c) | | $ | 464 | | | 10.95% | | Fourth quarter of 2024 |
| | Natural Gas | | $ | 111 | | | 11.15% | |
Pepco - District of Columbia(d) | | April 13, 2023 (amended February 27, 2024) | | Electric | | $ | 186 | | | 10.50% | | Third quarter of 2024 |
Pepco - Maryland(e) | | May 16, 2023 (amended February 23, 2024) | | Electric | | $ | 186 | | | 10.50% | | Second quarter of 2024 |
| | | | | | | | | | |
__________(a)ComEd's 2023On March 13, 2024, ComEd filed its Refiled Grid Plan with the ICC and on March 15, 2024, ComEd filed a petition to adjust its multi-year rate plan to be aligned with ComEd’s Refiled Grid Plan. The adjusted rate plan incorporates changes in the Refiled Grid Plan, which seeks a $670 million increase in revenue requirements over four years above those granted in the ICC’s January 10, 2024, amendatory order. The requested year-over-year increases are $302 million in 2024, $89 million in 2025, $136 million in 2026 and $143 million in 2027. A final order on both the Refiled Grid Plan and the adjusted rate plan petition is expected by December 2024 with new rates effective January 1, 2025.
(b)On April 26, 2024, ComEd filed its proposed Delivery Reconciliation Amount of $627 million under Rider DSPR which allows for the reconciliation of the revenue requirement reflectsin effect. The 2024 filing reconciles those rates with the actual delivery service costs incurred in 2023. Final order is expected by December 2024 and the reconciliation amount will adjust customer rates in 2025.
(c)PECO requested an annual electric revenue requirement increase of $144$464 million, for the initial year revenue requirement for 2023 and an increasewhich is partially offset by a one-time credit of $55$64 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on distribution rate base of 5.94%, inclusive of an allowed ROE of 7.85%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2021 provides for a weighted average debt and equity return on distribution rate base of 5.91%, inclusive of an allowed ROE of 7.78%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points. This is ComEd's last performance-based electric distribution formula rate update filing under EIMA as a result of the law authorizing the rate setting process sunsetting at the end of 2022. See Note 3 - Regulatory Matters of the 2021 Recast Form 10-K for additional information on ComEd's transition away from the electric distribution formula rate.in 2025.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Regulatory Matters
(d)Reflects a three-year cumulative multi-year plan for January 1, 2023 to2024 through December 31, 2025 and2026 submitted to the DCPSC. Pepco requested total requestedelectric revenue requirement increases before offsets, of $23$116 million, effective January 1, 2023, $8$35 million, effective January 1,and $35 million in 2024, 2025, and $7 million effective January 1, 2025,2026, respectively. Requested revenue requirement increases will be used to recover capital investments made in 2021designed to advance system-readiness and planned capital investments throughsupport the endDistrict of 2025. DPL proposed the acceleration of refunds for certain tax benefits to partially offset the customer rate increases by $12 millionColumbia’s climate and $8 million in 2023 and 2024, respectively.clean energy goals.
On October 7, 2022, DPL filed a partial settlement agreement with the MDPSC. The partial settlement provides for a total requested revenue requirement increase of $29 million and requested ROE of 9.60%. The partial settlement reflects(e)Reflects a three-year cumulative multi-year plan for JanuaryApril 1, 20232024 through March 31, 2027 submitted to December 31,the MDPSC. Pepco requested total electric revenue requirement increases of $68 million, $53 million, and $51 million effective April 1, 2024, April 1, 2025, and total requested revenue increases of $17 million effective JanuaryApril 1, 2023, $6 million effective January 1, 2024, and $6 million effective January 1, 2025. While the pending base rate case2026, respectively through its surrebuttal filing is partially settled, there are no issues unsettled related to themade on February 23, 2024. The plan contains a proposed nine-month extension period with a requested revenue requirement increase and the requested ROE. While there will likely be no changes to the amended requestedof $14 million effective April 1, 2027 through December 31, 2027. Requested revenue requirement increases will be used to recover capital investments designed to advance system-readiness and support Maryland's climate and clean energy goals. On August 7, 2023, the MDPSC issued an order approving a settlement agreement which allows Pepco to establish a revenue deferral mechanism to recover its full Commission-authorized year 1 increase between July 1, 2024 through March 31, 2025 and requested ROE, DPL cannot predictextend the outcome of any unforeseen proceedings.procedural schedule to address intervenor resource constraints.
Transmission Formula Rates
The Utility Registrants' transmission rates are each established based on a FERC-approved formula. ComEd, BGE, Pepco, DPL, and ACE are required to file an annual update to the FERC-approved formula on or before May 15, and PECO is required to file on or before May 31, with the resulting rates effective on June 1 of the same year. The annual update for ComEd is based on prior year actual costs and current year projected capital
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
additions (initial year revenue requirement). The update for ComEd also reconciles any differences between the revenue requirement in effect beginning June 1 of the prior year and actual costs incurred for that year (annual reconciliation). The annual update for PECO is based on prior year actual costs and current year projected capital additions, accumulated depreciation, and accumulated deferred income taxes. The annual update for BGE Pepco, DPL, and ACE is based on prior year actual costs and current year projected capital additions, accumulated depreciation, depreciation and amortization expense, and accumulated deferred income taxes. The update for PECO, BGE Pepco, DPL, and ACE also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).
For 2022,2024, the following total increases/(decreases) were included in the Utility Registrants'ComEd's and BGE's electric transmission formula rate updates:
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Registrant(a) | | Initial Revenue Requirement Increase | | Annual Reconciliation (Decrease) Increase | | Total Revenue Requirement Increase | | Allowed Return on Rate Base(b) | | Allowed ROE(c) |
| ComEd | | $ | 24 | | | $ | (24) | | | $ | — | | | 8.11 | % | | 11.50 | % |
| PECO | | 23 | | | 16 | | | 39 | | | 7.30 | % | | 10.35 | % |
| BGE | | 25 | | | (4) | | | 16 | | (d) | 7.30 | % | | 10.50 | % |
| Pepco | | 16 | | | 15 | | | 31 | | | 7.60 | % | | 10.50 | % |
| DPL | | 9 | | | 2 | | | 11 | | | 7.09 | % | | 10.50 | % |
| ACE | | 21 | | | 13 | | | 34 | | | 7.18 | % | | 10.50 | % |
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Registrant(a) | | Initial Revenue Requirement Increase | | Annual Reconciliation (Decrease)
Increase | | Total Revenue Requirement Increase | | Allowed Return on Rate Base(b) | | Allowed ROE(c) |
| ComEd | | $ | 32 | | | $ | (12) | | | $ | 20 | | | 8.14 | % | | 11.50 | % |
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| BGE | | $ | 42 | | | $ | 13 | | | $ | 53 | | (d) | 7.47 | % | | 10.50 | % |
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__________
(a)All rates are effective June 1, 20222024 - May 31, 2023,2025, subject to review by interested parties pursuant to review protocols of each Utility Registrants' tariff.ComEd's and BGE's tariffs.
(b)Represents the weighted average debt and equity return on transmission rate bases. For ComEd and PECO, the common equity component of the ratio used to calculate the weighted average debt and equity return on the transmission formula rate base is currently capped at 55% and 55.75%, respectively.
(c)The rate of return on common equity for each Utility RegistrantComEd and BGE includes a 50-basis-point incentive adder for being a member of a RTO.
(d)The increase in BGE's transmission revenue requirement includes a $5$2 million reduction related to a FERC-approved dedicated facilities charge to recover the costs of providing transmission service to specifically designated load by BGE.
Other State Regulatory Matters
Illinois Regulatory Matters
CEJA (Exelon and ComEd). On September 15, 2021, the Governor of Illinois signed into law CEJA. CEJA includes, among other features, (1) procurement of CMCs from qualifying nuclear-powered generating facilities, (2) a requirement to file a general rate case or a new four-year multi-year planMRP no later than January 20, 2023 to establish rates effective after ComEd’s existing performance-based distribution formula rate sunsets, (3) an extension of and certain adjustments to ComEd’s energy efficiency MWh savings goals, (4) revisions to the Illinois RPS requirements, including expanded charges for the procurement of RECs from wind and solar generation, (5) a requirement to accelerate amortization of ComEd’s unprotected excess deferred income taxes ("EDIT") that ComEd was previously directed by the ICC to amortize using the average rate assumption method which equates to approximately 39.5 years, and (6) requirements that ComEd and the ICC initiate and conduct various regulatory proceedings on subjects including ethics, spending, grid investments, and performance metrics. Regulatory or legal challenges regarding the validity or implementation of CEJA are possible and Exelon and ComEd cannot reasonably predict the outcome of any such challenges.
ComEd Electric Distribution Rates
ComEd filed, and received approval for, its last performance-based electric distribution formula rate update filing under EIMA in April 2022. Those2022; those rates will take effect in 2023. Also during 2023, ComEd will file with the ICC a petition to reconcile is 2022 actual costs with the approved revenue requirementwere in effect in 2022.
Under CEJA, ComEd will recover from retail customers, subject to certain exceptions, the costs it incurs to provide electric delivery services either through its electric distribution rate or other recovery mechanisms. On November 3, 2022, ComEd announced it plans on filing a four-year multi-year plan (“MRP”) in Januarythroughout 2023. The
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 32 — Regulatory Matters
MRPOn February 3, 2022, the ICC approved a tariff that establishes the process under which ComEd reconciled its 2022 and will set ratesreconcile its 2023 rate year revenue requirements with actual costs. Those reconciliation amounts are determined using the same process used for 2024 – 2027,prior reconciliations under the performance-based electric distribution formula rate. Using that process, for the rate years 2022 and 2023 ComEd will ultimately collect revenues from customers reflecting each year’s actual recoverable costs, year-end rate base, and a weighted average debt and equity return on distribution rate base, with the ROE component based on forecastedthe annual average of the monthly yields of the 30-year U.S. Treasury bonds plus 580 basis points. In April 2023, ComEd filed its first petition with the ICC to reconcile its 2022 actual costs with the approved revenue requirements and anrequirement that was in effect in 2022; the final order was issued on November 30, 2023, for rates beginning January 2024. On April 26, 2024, ComEd filed with the ICC determinedits 2023 actual costs with the approved revenue requirement that was in effect in 2023; the final order is expected by December 2024, for rates beginning January 2025.
Beginning in 2024, ComEd will recover from retail customers, subject to certain exceptions, the costs it incurs to provide electric delivery services either through its electric distribution rate or other recovery mechanisms authorized by CEJA. On January 17, 2023, ComEd filed a petition with the ICC seeking approval of returna MRP for 2024-2027. The MRP supports a multi-year grid plan (Grid Plan), also filed on rate base, includingJanuary 17, covering planned investments on the cost of common equity.electric distribution system within ComEd’s service area through 2027. Costs incurred during each year of the multi-year planMRP are subject to ICC review and the plan’s revenue requirement for each year will be reconciled with the actual costs that the ICC determines are prudently and reasonably incurred for that year. ThatThe reconciliation is subject to adjustment for certain expenses and, unless the plan is modified, tocosts, including a 5% caplimitation on increases inrecovery of costs that are more than 105% of certain costs over the costs in the previously approved multi-yearMRP revenue requirement, absent a modification of the rate plan revenue requirement.itself. Thus, for example, the rate adjustments necessary to reconcile 2024 revenues to ComEd’s actual 2024 costs incurred would take effect in January 2026 after the ICC’s review during 2025. On May 22, 2023, direct testimony was filed by ICC staff and more than a dozen intervenors and intervenor groups. The testimonies addressed a wide variety of topics, including rate of return on equity, capital structure, grid planning, various distribution grid and information technology investments, and affordability and customer service. ComEd filed rebuttal testimony in June, which provided, among other things, defense of ComEd’s planned 2024-2027 capital investment and proposed cost of equity. ComEd also made voluntary adjustments and, per the ICC’s final beneficial electrification order requiring ComEd to recover beneficial electrification costs through the MRP, increased its total revenue requirement request from $1.472 billion to $1.545 billion. ComEd filed its reply brief on September 27, 2023, to adjust its total requested revenue requirement increase to $1.487 billion.
On December 14, 2023, the ICC issued a final order. The ICC rejected ComEd’s Grid Plan as non-compliant with certain requirements of CEJA, and required ComEd to file a revised Grid Plan by March 13, 2024, 90 days after the issuance of the final order. In the absence of an approved Grid Plan, the ICC set ComEd’s forecast revenue requirements for 2024-2027 based on ComEd's approved year-end 2022 rate base. This results in a total cumulative revenue requirement increase of $501 million, a $986 million total revenue reduction from the requested cumulative revenue requirement increase but remains subject to annual reconciliation in accordance with CEJA. The final order approved the process and formulas associated with the MRP reconciliation mechanisms. The ICC did not approve a previously proposed phase-in of the ICC's approved year-over-year revenue increases, and it also denied ComEd's ability to earn a return on its pension asset.
On December 22, 2023, ComEd filed an application for rehearing on several findings in the final order including the use of the 2022 year-end rate base to establish forecast revenue requirements for 2024-2027, ROE, pension asset return, and capital structure. On January 10, 2024, ComEd’s application for rehearing was denied on all issues except for the order’s use of the 2022 year-end rate base. On January 31, 2024, the ICC granted ComEd's motion seeking additional clarification on the scope on rehearing, generally accepting ComEd's proposal and confirming that the rehearing will determine if the forecasted year-end 2023 rate base should be used to set rates for 2024 through 2027 until a refiled Grid Plan is approved. A final rehearing order on that topic is statutorily required by early June 2024. On April 18, 2024, the ICC issued its final order on rehearing and approved increased revenue requirements for 2024-2027.
On January 10, 2024, ComEd also filed an appeal in the Illinois Appellate Court of the issues on which rehearing was denied, including but not limited to the allowed ROE and denial of a return on ComEd’s pension asset. There is no deadline by when the appellate court must rule. On March 7, 2024, the ICC adopted an interim order on scheduling, which confirmed that it intends to issue a final order on ComEd’s Refiled Grid Plan by the end of 2024 and that it will implement rates that will go into effect January 1, 2025, inclusive of a Grid Plan. On March 13, 2024, ComEd filed its Refiled Grid Plan with supporting testimony and schedules with the ICC. The Refiled Grid Plan is designed to meet or exceed every requirement identified by the ICC in its December order that
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Regulatory Matters
rejected ComEd’s initial Grid Plan. On March 15, 2024, ComEd filed a petition to adjust its MRP to authorize increased rates consistent with the Refiled Grid Plan. ComEd has completed and placed in service additional utility plant assets in 2023 and 2024 and will continue to complete and place in service additional utility plant assets prior to the approval of the new Grid Plan. There are still significant unknowns, but ComEd does not currently believe that it is probable that the initially uncollected depreciation or return on the recently completed plant will ultimately be disallowed.
In January 2022, ComEd filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties in the event ComEd filed a MRP in January 2023. On September 27, 2022, the ICC issued a final order approving seven performance metrics that provide symmetrical performance adjustments of 32 total basis points to ComEd’s rate of return on common equity based on the extent to which ComEd achieves the annual performance goals. On October 27,November 10, 2022, ComEd filedthe ICC granted ComEd's application for rehearing, concerning certain aspects of three of those metrics;in part. On April 5, 2023, the ICC must ruleissued its final order on that rehearing request within 20 days.for the performance and tracking metrics proceeding, in which the ICC declined to adopt ComEd's proposed modifications to the reliability and peak load reduction performance metrics. Efforts are underway to implement the performance metrics, which took effect on January 1, 2024. ComEd will make its initial filing in 2025 to assess performance achieved under the metrics in 2024, and to determine any ROE adjustment, which would take effect in 2026.
Carbon Mitigation Credit
CEJA establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity. ComEd is required to purchase CMCs from participating nuclear-powered generating facilities between June 1, 2022 and May 31, 2027 and all its costs of doing so will be recovered through a new rider.2027. The price to be paid for each CMC was established through a competitive bidding process that included consumer-protection measures that capped the maximum acceptable bid amount and a formula that reduces CMC prices by an energy price index, the base residual auction capacity price in the ComEd zone of PJM, and the monetized value of any federal tax credit or other subsidy if applicable. The consumer protection measures contained in CEJA will result in net payments to ComEd ratepayers if the energy index, the capacity price and applicable federal tax credits or subsidy exceed the CMC contract price. In the June 2022 billing period, ComEd began issuing credits to its retail customers under its new CMC rider in the June 2022 billing period and recorded arider. A regulatory asset of $534 million as of September 30, 2022is recorded for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities. The balance as of March 31, 2024 is $405 million.
Excess Deferred Income Taxes
The ICC initiatedUnder CEJA, the costs of procuring CMCs, including carrying costs, are recovered through a docket to accelerate and fully credit to customers TCJA unprotected property-related EDIT no later than December 31, 2025. On July 7, 2022,rider, the Rider Carbon-Free Resource Adjustment (Rider CFRA). As originally approved by the ICC, issued a final order on the scheduleRider CFRA provides for the acceleration of EDIT amortization, adopting the proposal as submittedan annual reconciliation and true-up to actual costs incurred or credits received by several parties, including ComEd ICC Staff, the Illinois Attorney General's Office, and the Citizens Utility Board. EDIT amortization willto purchase CMCs, with any difference to be credited to or collected from ComEd’s retail customers in subsequent periods. The difference between the net payments to (or receivables from) ComEd ratepayers and the credits received by ComEd to purchase CMCs is recorded to Purchased power expense with an offset to the regulatory asset (or regulatory liability). On December 21, 2022, ComEd filed an amendment to Rider CFRA proposing that it recover costs or provide credits faster than the tariff allows, implement monthly reconciliations, and allow ComEd to adjust Rider CFRA rates based not only on anticipated differences but also past payments or credits, and implement monthly reconciliations beginning the June 2023 delivery period. The ICC approved the proposal on January 19, 2023.In addition, on March 24, 2023, ComEd submitted revisions to Rider CFRA which clarified the methodology for calculating interest to be included in the annual reconciliation associated with the June 2022 through May 2023 delivery year. The ICC approved the proposal on April 20, 2023. On February 2, 2024, ComEd filed a new rider from Januarypetition with the ICC to initiate the reconciliation proceeding for the costs incurred in connection with the procurement of CMCs during the delivery year beginning June 1, 20232022 and extending through DecemberMay 31, 2025.2023.
Beneficial Electrification Plan
On July 1, 2022, ComEd filed a proposed plan to promote beneficial electrification efforts in its Northern Illinois service area withMarch 23, 2023, the ICC as required by CEJA. ComEd's plan is designed to meaningfully reduce barriers to beneficial electrification, including those related to electric vehicles, such as upfront technology adoption costs, charging costs, and charging availability; promote equity and environmental justice; reduce carbon emissions and surface-level pollutants; and support customer education and awareness of electrification options. As proposed, ComEd could expend approximately $300 million in total overissued its final order approving the three-year period 2023 through 2025. The beneficial electrification plan requestsfor ComEd. The ICC rejected ComEd’s request to treat a large portion of beneficial electrification costs as a regulatory asset and ordered ComEd to seek cost recovery of all those coststhrough the multi-year rate plan filing for 2024 and 2025, and the final formula rate reconciliation docket for 2023, rather than through a rider mechanism, under which certainseparate charge. The order also authorized an overall annual budget of $77 million per year for the three-year plan period (2023 through 2025), with flexibility to roll forward unused funds to future years within the same plan period. On April 18, 2023, ComEd filed an application for rehearing in the beneficial electrification plan docket. The Chicago Transit Authority and City of Chicago, jointly, and the Office of the costs would be amortized over ten years with a return on the unrecovered balance. Certain legal questions regarding the permissible scope of the plan's activities and applicable budget have been raised by motion, and the ICC may decide those issues in an interim order. A final order is expected to be issued by the ICC no later than the first quarter of 2023. At this time, ComEd cannot predict the outcome of these proceedings.
See Note 3 — Regulatory Matters of the 2021 Recast Form 10-KIllinois Attorney General (ILAG) also filed applications for additional information on CEJA (referred to as Clean Energy Law).
Energy Efficiency Formula Rate (Exelon and ComEd). During 2022, the ICC approved the following total increases in ComEd's requested energy efficiency revenue requirement:rehearing. On
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 32 — Regulatory Matters
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Filing Date | | Requested Revenue Requirement Increase | | Approved Revenue Requirement Increase(a) | | Approved ROE | | Approval Date | | Rate Effective Date |
| May 25, 2022 | | $ | 50 | | | $ | 50 | | | 7.85 | % | | October 27, 2022 | | January 1, 2023 |
__________
(a)ComEd’sApril 27, 2023, approved revenue requirement above reflectsICC staff filed a motion for clarification, seeking clarification from the ICC on the precise budget described in the final order. On May 8, 2023, the ICC denied all applications for rehearing, and entered an increase of $66amendatory order regarding the annual beneficial electrification plan budgets. ComEd has been directed to use good faith efforts to spend $77 million forannually. ComEd subsequently filed its compliance filing in May 2023, detailing project related spending, clarifying the initial year revenue requirement for 2023 and a decrease of $16 millionprocedure that will be used to seek stakeholder feedback related to beneficial electrification pilot programs, and including the timeline for tariff changes required to implement the programs. ComEd and the ILAG both filed appeals of the ICC’s interim order that addressed the permissible scope of utility beneficial electrification programs outside of transportation and the rate impact cap. The ILAG also filed an appeal seeking reversal of portions of the ICC’s final decision. The final order partly mooted ComEd’s appeal of the interim order and ComEd has decided not to pursue the other issues. As such, ComEd moved to voluntarily dismiss its appeal and the appellate court granted that request. The ILAG consolidated their appeals and filed their opening brief on April 16, 2024. Any ruling on the appeals, even a negative ruling removing programs from the BE Plan or lowering the overall budget of the BE Plan, will only impact forward-looking costs.
Energy Efficiency
CEJA extends ComEd’s current cumulative annual reconciliation for 2021. The revenue requirement for 2023 provides forenergy efficiency MWh savings goals through 2040, adds expanded electrification measures to those goals, increases low-income commitments and adds a weighted average debt and equity return onnew performance adjustment to the energy efficiency formula rate. ComEd expects its annual spend to increase in 2023 through 2040 to achieve these energy efficiency MWh savings goals, which will be deferred as a separate regulatory asset and rate base of 5.94% inclusive of an allowed ROE of 7.85%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The revenue requirement for the 2021 reconciliation year provides for a weighted average debt and equity return onthat will be recovered through the energy efficiency regulatory asset andformula rate baseover the weighted average useful life, as approved by the ICC, of 5.52% inclusive of an allowed ROE of 6.99%, which includes a downward performance adjustment that decreased the ROE. The performance adjustment can either increase or decrease the ROE based upon the achievement ofrelated energy efficiency savings goals.measures.
New Jersey Regulatory Matters
Termination of Energy Procurement Provisions of PPAs (Exelon, PHI, and ACE).
On December 22, 2021, ACE filed with the NJBPU a petition to terminate the provisions in the PPAs to purchase electricity from two coal-powered generation facilities located in the state of New Jersey. The petition was approved by the NJBPU on March 23, 2022. Upon closing of the transaction on March 31, 2022, ACE recognized a liability of $203 million for the contract termination fee, which is to be paid by the end of 2024, and recognized a corresponding regulatory asset of $203 million.
As of September 30, 2022,March 31, 2024, the $158$31 million liability for the contract termination fee consists of $87 million and $71 millionis included in Other current liabilities and Other deferred credits and other liabilities, respectively, in Exelon's Consolidated Balance Sheet. The currentSheet and noncurrent liability is included in PPA termination obligation and Other deferred credits and other liabilities, respectively, in PHI's and ACE's Consolidated Balance Sheets. For the ninethree months ended September 30, 2022,March 31, 2024 and 2023, ACE has respectively paid $45$18 million and $19 million of the liability, which is recorded in Changes in Other assets and liabilities in Exelon's, PHI's, and ACE's Consolidated Statements of Cash Flows.
Other Federal Regulatory AssetsMatters
FERC Audit (Exelon and Liabilities
ComEd). The Utility Registrants' regulatory assetsRegistrants are subject to periodic audits and liabilities have not changed materially since December 31,investigations by FERC. FERC’s Division of Audits and Accounting initiated a nonpublic audit of ComEd in April 2021 unless noted below. See Note 3 — Regulatory Mattersevaluating ComEd’s compliance with (1) approved terms, rates and conditions of its federally regulated service; (2) accounting requirements of the 2021 RecastUniform System of Accounts; (3) reporting requirements of the FERC Form 10-K1; and (4) the requirements for additional informationrecord retention. The audit period extends back to January 1, 2017.
On July 27, 2023, FERC issued a final audit report which included, among other things, findings and recommendations related to ComEd's methodology regarding the allocation of certain overhead costs to capitalized construction costs under FERC regulations, including a suggestion that refunds may be due to customers for amounts collected in previous years. On August 28, 2023, ComEd filed a formal notice of the issues it will contest. On December 14, 2023, FERC appointed a settlement judge for the contested overhead allocation findings and set the matter for a trial-type hearing. That hearing process has been held in abeyance while a formal settlement process, which began in February 2024, takes place. Based on the specific regulatory assetspreliminary findings and liabilities.
ComEd. Regulatory assets increased $668 million primarily due to increases of $534 million in the CMC regulatory asset, as discussed in CEJA above,ongoing settlement process, ComEd determined that a loss was probable and $161 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset, partially offset by a decrease of $152 million in the Renewable Energy regulatory asset.
PECO. Regulatory assets decreased $301 million primarily due to a decrease of $300 million in the Deferred Income Taxes regulatory asset. Regulatory liabilities decreased $436 million primarily due to decreases of $409 million in the Decommissioning the Regulatory Agreement Unitsrecorded its regulatory liability to reflect its best estimate of that loss. The final outcome and $19 millionresolution of any contested audit issues as well as a reasonable estimate of potential future losses cannot be accurately estimated at this stage; however, the final resolution of these matters could result in recognition of future losses, above the Electric Energyamounts currently accrued, that could be material to the Exelon and Natural Gas Costs regulatory liability.
BGE. Regulatory liabilities decreased $70 million primarily due to a decrease of $100 million in the Deferred Income Taxes regulatory liability.
Pepco. Regulatory assets decreased $68 million primarily due to decreases of $25 million in the DC PLUG Charge regulatory asset, $16 million in the Under-Recovered Revenue Decoupling regulatory asset, and $13 million in the Energy Efficiency and Demand Response Programs regulatory asset. Regulatory liabilities decreased $92 million primarily due to a decrease of $99 million in the Deferred Income Taxes regulatory liability.
DPL. Regulatory liabilities decreased $35 million primarily due to a decrease of $41 million in the Deferred Income Taxes regulatory liability.ComEd financial statements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 32 — Regulatory Matters
Regulatory Assets and Liabilities
ACE.The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2023, unless noted below. See Note 3 — Regulatory Mattersof the 2023 Form 10-K for additional information on the specific regulatory assets and liabilities.
ComEd. Regulatory assets decreased $286 million primarily due to a decrease of $268 million in the CMC regulatory asset.
PECO. Regulatory liabilities increased $159$17 million primarily due to an increase of $140$26 million in the Electric Energy CostsDecommissioning the regulatory asset as a result of the PPA termination. agreement units regulatory liability.
BGE. Regulatory liabilities decreased $44$75 million primarily due to a decrease of $49$75 million in the Deferred Income Taxesincome taxes regulatory liability, partially offset by a $12liability.
ACE. Regulatory assets increased $34 million primarily due to an increase of $13 million in the Over-Recovered Revenue DecouplingUnder-recovered revenue decoupling regulatory liability.asset, an increase of $8 million in the Energy efficiency and demand response programs regulatory asset, and an increase of $8 million in the Deferred storm costs regulatory asset.
Capitalized Ratemaking Amounts Not Recognized
The following table presents authorized amounts capitalized for ratemaking purposes related to earnings on shareholders' investment that are not recognized for financial reporting purposes in the Registrants' Consolidated Balance Sheets. These amounts will be recognized as revenues in the related Consolidated Statements of Operations and Comprehensive Income in the periods they are billable to the Utility Registrants' customers. PECO had no related amounts at March 31, 2024 and December 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd(a) | | PECO | | BGE(b) | | PHI | | Pepco(c) | | DPL(c) | | ACE(b) |
| September 30, 2022 | $ | 49 | | | $ | 5 | | | $ | — | | | $ | 30 | | | $ | 14 | | | $ | 11 | | | $ | 2 | | | $ | 1 | |
| | | | | | | | | | | | | | | |
| December 31, 2021 | 43 | | | 1 | | | — | | | 37 | | | 5 | | | 3 | | | 2 | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Exelon | | ComEd(a) | | BGE(b) | | PHI | | Pepco(c) | | DPL(c) | | ACE(d) |
| March 31, 2024 | | | $ | 106 | | | $ | 36 | | | $ | 30 | | | $ | 40 | | | $ | 27 | | | $ | 1 | | | $ | 12 | |
| | | | | | | | | | | | | | | |
| December 31, 2023 | | | 110 | | | 32 | | | 33 | | | 45 | | | 34 | | | 1 | | | 10 | |
__________
(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its energy efficiency and electric distribution formula rate regulatory assets.
(b)BGE's and ACE's authorized amountsamount capitalized for ratemaking purposes primarily relaterelates to earnings on shareholder'sshareholders' investment on their respective AMI programs.programs and on investments in rate base included in the multi-year plan reconciliations.
(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholder'sshareholders' investment on their respective AMI Programsprograms and Energy Efficiencyefficiency and Demand Response Programs,demand response programs, and for Pepco District of Columbia revenue decoupling program. The earnings on energy efficiency are on Pepco District of Columbia and DPL Delaware programs only.
4.3. Revenue from Contracts with Customers (All Registrants)
The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that the entities expect to be entitled to in exchange for those goods or services. The primary sources of revenue include regulated electric and gas tariff sales, distribution, and transmission services.
See Note 4 — Revenue from Contracts with Customers of the 2021 Recast2023 Form 10-K for additional information regarding the primary sources of revenue for the Registrants.
Contract Liabilities
The Registrants record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. The Registrants record contract liabilities in Other current liabilities and Other noncurrent deferred credits and other liabilities in their Consolidated Balance Sheets.
For PHI, Pepco, DPL, and ACE these contract liabilities primarily relate to upfront consideration received in the third quarter of 2020 for a collaborative arrangement ("Agreement") with an unrelated owner and manager of communication infrastructure. The revenue attributable to this arrangement will be recognizedinfrastructure, as operating revenue over the 35 years under the collaborative arrangement.
The following table provides a rollforward of the contract liabilities reflected in Exelon's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheetswell as additional consideration received for the three and nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, ComEd's, PECO's, and BGE's contract liabilities were immaterial.payment option amendment
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 43 — Revenue from Contracts with Customers
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | Exelon(a) | | PHI(a) | | Pepco(a) | | DPL(a) | | ACE(a) |
| Balance as of December 31, 2021 | | $ | 109 | | | $ | 109 | | | $ | 87 | | | $ | 11 | | | $ | 11 | |
| Revenues recognized | | (2) | | | (2) | | | (2) | | | — | | | — | |
| Balance as of March 31, 2022 | | 107 | | | 107 | | | 85 | | | 11 | | | 11 | |
| Revenues recognized | | (2) | | | (2) | | | (1) | | | — | | | (1) | |
| Balance as of June 30, 2022 | | 105 | | | 105 | | | 84 | | | 11 | | | 10 | |
| Revenues recognized | | (2) | | | (2) | | | (1) | | | (1) | | | — | |
| Balance as of September 30, 2022 | | $ | 103 | | | $ | 103 | | | $ | 83 | | | $ | 10 | | | $ | 10 | |
| | | | | | | | | | |
| | Exelon(a) | | PHI(a) | | Pepco(a) | | DPL(a) | | ACE(a) |
| Balance as of December 31, 2020 | | $ | 118 | | | $ | 118 | | | $ | 94 | | | $ | 12 | | | $ | 12 | |
| Revenues recognized | | (2) | | | (2) | | | (2) | | | — | | | — | |
| Balance as of March 31, 2021 | | 116 | | | 116 | | | 92 | | | 12 | | | 12 | |
| Revenues recognized | | (3) | | | (3) | | | (1) | | | (1) | | | (1) | |
| Balance as of June 30, 2021 | | 113 | | | 113 | | | 91 | | | 11 | | | 11 | |
| Revenues recognized | | (2) | | | (2) | | | (2) | | | — | | | — | |
| Balance as of September 30, 2021 | | $ | 111 | | | $ | 111 | | | $ | 89 | | | $ | 11 | | | $ | 11 | |
The following table provides a rollforward of the contract liabilities reflected in Exelon's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheets for the three months ended March 31, 2024 and 2023. At March 31, 2024 and December 31, 2023, ComEd's, PECO's, and BGE's contract liabilities were immaterial.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | Exelon(a) | | PHI(a) | | Pepco(a) | | DPL | | ACE |
| Balance at December 31, 2023 | | $ | 133 | | | $ | 133 | | | $ | 107 | | | $ | 13 | | | $ | 13 | |
| Revenues recognized | | (2) | | | (2) | | | (2) | | | — | | | — | |
| Balance at March 31, 2024 | | $ | 131 | | | $ | 131 | | | $ | 105 | | | $ | 13 | | | $ | 13 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Exelon(a) | | PHI(a) | | Pepco(a) | | DPL | | ACE |
| Balance at December 31, 2022 | | $ | 101 | | | $ | 101 | | | $ | 81 | | | $ | 10 | | | $ | 10 | |
| Revenues recognized | | (1) | | | (1) | | | (1) | | | — | | | — | |
| Balance at March 31, 2023 | | $ | 100 | | | $ | 100 | | | $ | 80 | | | $ | 10 | | | $ | 10 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
__________(a)Revenues recognized in the three and nine months ended September 30, 2022March 31, 2024 and 2021,2023, were included in the contract liabilities at December 31, 20212023 and 2020,2022, respectively.
Transaction Price Allocated to Remaining Performance Obligations
The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2022.March 31, 2024. This disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one month to several years.
This disclosure excludes the Utility Registrants' gas and electric tariff sales contracts and transmission revenue contracts as they generally have an original expected duration of one year or less and, therefore, do not contain any future, unsatisfied performance obligations to be included in this disclosure.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2022 | | 2023 | | 2024 | | 2025 | | 2026 and thereafter | | Total |
| Exelon | $ | 2 | | | $ | 8 | | | $ | 6 | | | $ | 5 | | | $ | 82 | | | $ | 103 | |
| PHI | 2 | | | 8 | | | 6 | | | 5 | | | 82 | | | 103 | |
| Pepco | 2 | | | 6 | | | 5 | | | 5 | | | 65 | | | 83 | |
| DPL | — | | | 1 | | | — | | | — | | | 9 | | | 10 | |
| ACE | — | | | 1 | | | 1 | | | — | | | 8 | | | 10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | Exelon | | PHI | | Pepco | | DPL | | ACE |
| 2024 | $ | 4 | | | $ | 4 | | | $ | 4 | | | $ | — | | | $ | — | |
| 2025 | 7 | | | 7 | | | 5 | | | 1 | | | 1 | |
| 2026 | 6 | | | 6 | | | 5 | | | 1 | | | — | |
| 2027 | 5 | | | 5 | | | 5 | | | — | | | — | |
| 2028 and thereafter | 109 | | | 109 | | | 86 | | | 11 | | | 12 | |
| Total | $ | 131 | | | $ | 131 | | | $ | 105 | | | $ | 13 | | | $ | 13 | |
Revenue Disaggregation
The Registrants disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. See Note 54 — Segment Information for the presentation of the Registrant'sRegistrants' revenue disaggregation.
5.4. Segment Information (All Registrants)
Operating segments for each of the Registrants are determined based on information used by the CODMs in deciding how to evaluate performance and allocate resources at each of the Registrants.
Exelon has six reportable segments, which include ComEd, PECO, BGE, and PHI's three reportable segments consisting of Pepco, DPL, and ACE. ComEd, PECO, BGE, Pepco, DPL, and ACE each represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon,
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 54 — Segment Information
ComEd, PECO, BGE, Pepco, DPL, and ACE's CODMs evaluate the performance of and allocate resources to ComEd, PECO, BGE, Pepco, DPL, and ACEthe segments based on net income.
An analysis and reconciliation of the Registrants’ reportable segment information to the respective information in the consolidated financial statements for the three and nine months ended September 30, 2022March 31, 2024 and 20212023 is as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ComEd | | PECO | | BGE | | PHI | | Other(a) | | Intersegment
Eliminations | | Exelon |
Operating revenues(b): | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | |
| Electric revenues | $ | 2,095 | | | $ | 782 | | | $ | 881 | | | $ | 1,532 | | | $ | — | | | $ | (6) | | | $ | 5,284 | |
| Natural gas revenues | — | | | 272 | | | 416 | | | 72 | | | — | | | (1) | | | 759 | |
| Shared service and other revenues | — | | | — | | | — | | | 2 | | | 459 | | | (461) | | | — | |
| Total operating revenues | $ | 2,095 | | | $ | 1,054 | | | $ | 1,297 | | | $ | 1,606 | | | $ | 459 | | | $ | (468) | | | $ | 6,043 | |
| 2023 | | | | | | | | | | | | | |
| Electric revenues | $ | 1,667 | | | $ | 795 | | | $ | 814 | | | $ | 1,436 | | | $ | — | | | $ | (5) | | | $ | 4,707 | |
| Natural gas revenues | — | | | 317 | | | 443 | | | 97 | | | — | | | (1) | | | 856 | |
| Shared service and other revenues | — | | | — | | | — | | | 3 | | | 437 | | | (440) | | | — | |
| Total operating revenues | $ | 1,667 | | | $ | 1,112 | | | $ | 1,257 | | | $ | 1,536 | | | $ | 437 | | | $ | (446) | | | $ | 5,563 | |
| | | | | | | | | | | | | |
Intersegment revenues(c): | | | | | | | | | | | | | |
| 2024 | $ | 2 | | | $ | 2 | | | $ | 2 | | | $ | 3 | | | $ | 457 | | | $ | (466) | | | $ | — | |
| 2023 | 3 | | | 2 | | | 3 | | | 3 | | | 434 | | | (445) | | | — | |
| Depreciation and amortization: | | | | | | | | | | | | | |
| 2024 | $ | 362 | | | $ | 104 | | | $ | 150 | | | $ | 246 | | | $ | 17 | | | $ | — | | | $ | 879 | |
| 2023 | 338 | | | 98 | | | 167 | | | 241 | | | 16 | | | — | | | 860 | |
| Operating expenses: | | | | | | | | | | | | | |
| 2024 | $ | 1,781 | | | $ | 851 | | | $ | 967 | | | $ | 1,335 | | | $ | 472 | | | $ | (475) | | | $ | 4,931 | |
| 2023 | 1,256 | | | 902 | | | 964 | | | 1,297 | | | 485 | | | (447) | | | 4,457 | |
| Interest expense, net: | | | | | | | | | | | | | |
| 2024 | $ | 122 | | | $ | 55 | | | $ | 50 | | | $ | 90 | | | $ | 151 | | | $ | — | | | $ | 468 | |
| 2023 | 117 | | | 48 | | | 44 | | | 76 | | | 127 | | | — | | | 412 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Income taxes: | | | | | | | | | | | | | |
| 2024 | $ | 19 | | | $ | 10 | | | $ | 24 | | | $ | 40 | | | $ | (30) | | | $ | — | | | $ | 63 | |
| 2023 | 71 | | | 4 | | | 52 | | | 34 | | | (27) | | | — | | | 134 | |
| Net income (loss): | | | | | | | | | | | | | |
| 2024 | $ | 193 | | | $ | 149 | | | $ | 264 | | | $ | 168 | | | $ | (116) | | | $ | — | | | $ | 658 | |
| 2023 | 241 | | | 166 | | | 200 | | | 155 | | | (93) | | | — | | | 669 | |
| Capital expenditures: | | | | | | | | | | | | | |
| 2024 | $ | 594 | | | $ | 361 | | | $ | 324 | | | $ | 453 | | | $ | 35 | | | $ | — | | | $ | 1,767 | |
| 2023 | 617 | | | 335 | | | 350 | | | 561 | | | 18 | | | — | | | 1,881 | |
| Total assets: | | | | | | | | | | | | | |
| March 31, 2024 | $ | 43,132 | | | $ | 16,116 | | | $ | 14,444 | | | $ | 27,535 | | | $ | 6,376 | | | $ | (4,392) | | | $ | 103,211 | |
| December 31, 2023 | 42,827 | | | 15,595 | | | 14,184 | | | 26,903 | | | 6,374 | | | (4,337) | | | 101,546 | |
__________
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 54 — Segment Information
Three Months Ended September 30, 2022 and 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| ComEd | | PECO | | BGE | | PHI | | Other(a) | | Intersegment
Eliminations | | Exelon |
Operating revenues(b): | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| Electric revenues | $ | 1,378 | | | $ | 941 | | | $ | 757 | | | $ | 1,557 | | | $ | — | | | $ | (12) | | | $ | 4,621 | |
| Natural gas revenues | — | | | 73 | | | 113 | | | 38 | | | — | | | — | | | 224 | |
| Shared service and other revenues | — | | | — | | | — | | | 3 | | | 381 | | | (384) | | | — | |
| Total operating revenues | $ | 1,378 | | | $ | 1,014 | | | $ | 870 | | | $ | 1,598 | | | $ | 381 | | | $ | (396) | | | $ | 4,845 | |
| 2021 | | | | | | | | | | | | | |
| Electric revenues | $ | 1,789 | | | $ | 762 | | | $ | 677 | | | $ | 1,444 | | | $ | — | | | $ | 20 | | | $ | 4,692 | |
| Natural gas revenues | — | | | 56 | | | 93 | | | 23 | | | — | | | (1) | | | 171 | |
| Shared service and other revenues | — | | | — | | | — | | | 3 | | | 534 | | | (537) | | | — | |
| Total operating revenues | $ | 1,789 | | | $ | 818 | | | $ | 770 | | | $ | 1,470 | | | $ | 534 | | | $ | (518) | | | $ | 4,863 | |
| | | | | | | | | | | | | |
Intersegment revenues(c): | | | | | | | | | | | | | |
| 2022 | $ | 6 | | | $ | 3 | | | $ | 3 | | | $ | 3 | | | $ | 378 | | | $ | (393) | | | $ | — | |
| 2021 | 9 | | | 2 | | | 7 | | | 3 | | | 531 | | | (516) | | | 36 | |
| Depreciation and amortization: | | | | | | | | | | | | | |
| 2022 | $ | 333 | | | $ | 92 | | | $ | 148 | | | $ | 238 | | | $ | 14 | | | $ | — | | | $ | 825 | |
| 2021 | 304 | | | 86 | | | 142 | | | 210 | | | 16 | | | — | | | 758 | |
| Operating expenses: | | | | | | | | | | | | | |
| 2022 | $ | 913 | | | $ | 798 | | | $ | 810 | | | $ | 1,254 | | | $ | 439 | | | $ | (380) | | | $ | 3,834 | |
| 2021 | 1,428 | | | 677 | | | 709 | | | 1,155 | | | 491 | | | (353) | | | 4,107 | |
| Interest expense, net: | | | | | | | | | | | | | |
| 2022 | $ | 104 | | | $ | 45 | | | $ | 39 | | | $ | 72 | | | $ | 105 | | | $ | — | | | $ | 365 | |
| 2021 | 98 | | | 40 | | | 36 | | | 67 | | | 83 | | | — | | | 324 | |
| Income (loss) from continuing operations before income taxes: | | | | | | | | | | | | | |
| 2022 | $ | 375 | | | $ | 179 | | | $ | 26 | | | $ | 291 | | | $ | (103) | | | $ | — | | | $ | 768 | |
| 2021 | 276 | | | 108 | | | 32 | | | 264 | | | (34) | | | (154) | | | 492 | |
| Income Taxes: | | | | | | | | | | | | | |
| 2022 | $ | 84 | | | $ | 44 | | | $ | (7) | | | $ | 2 | | | $ | (31) | | | $ | — | | | $ | 92 | |
| 2021 | 56 | | | (3) | | | (4) | | | (2) | | | (6) | | | (6) | | | 35 | |
| Net income (loss) from continuing operations: | | | | | | | | | | | | | |
| 2022 | $ | 291 | | | $ | 135 | | | $ | 33 | | | $ | 289 | | | $ | (71) | | | $ | (1) | | | $ | 676 | |
| 2021 | 220 | | | 111 | | | 36 | | | 266 | | | (27) | | | (149) | | | 457 | |
| Capital Expenditures: | | | | | | | | | | | | | |
| 2022 | $ | 593 | | | $ | 333 | | | $ | 340 | | | $ | 398 | | | $ | 8 | | | $ | — | | | $ | 1,672 | |
| 2021 | 561 | | | 301 | | | 287 | | | 410 | | | 4 | | | — | | | 1,563 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
__________(a)Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.
(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expensesTaxes other than income taxes in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 1614 — Supplemental Financial Information for additional information on total utility taxes.
(c)See Note 1715 — Related Party Transactions for additional information on intersegment revenues.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
PHI:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| Pepco | | DPL | | ACE | | Other(a) | | Intersegment
Eliminations | | PHI |
Operating revenues(b): | | | | | | | | | | | |
| 2022 | | | | | | | | | | | |
| Electric revenues | $ | 724 | | | $ | 374 | | | $ | 462 | | | $ | — | | | $ | (3) | | | $ | 1,557 | |
| Natural gas revenues | — | | | 38 | | | — | | | — | | | — | | | 38 | |
| Shared service and other revenues | — | | | — | | | — | | | 94 | | | (91) | | | 3 | |
| Total operating revenues | $ | 724 | | | $ | 412 | | | $ | 462 | | | $ | 94 | | | $ | (94) | | | $ | 1,598 | |
| 2021 | | | | | | | | | | | |
| Electric revenues | $ | 660 | | | $ | 337 | | | $ | 451 | | | $ | — | | | $ | (4) | | | $ | 1,444 | |
| Natural gas revenues | — | | | 23 | | | — | | | — | | | — | | | 23 | |
| Shared service and other revenues | — | | | — | | | — | | | 92 | | | (89) | | | 3 | |
| Total operating revenues | $ | 660 | | | $ | 360 | | | $ | 451 | | | $ | 92 | | | $ | (93) | | | $ | 1,470 | |
Intersegment revenues(c): | | | | | | | | | | | |
| 2022 | $ | 2 | | | $ | 1 | | | $ | — | | | $ | 94 | | | $ | (94) | | | $ | 3 | |
| 2021 | 2 | | | 2 | | | 1 | | | 91 | | | (93) | | | 3 | |
| Depreciation and amortization: | | | | | | | | | | | |
| 2022 | $ | 99 | | | $ | 59 | | | $ | 74 | | | $ | 6 | | | $ | — | | | $ | 238 | |
| 2021 | 104 | | | 53 | | | 46 | | | 7 | | | — | | | 210 | |
| Operating expenses: | | | | | | | | | | | |
| 2022 | $ | 555 | | | $ | 345 | | | $ | 353 | | | $ | 96 | | | $ | (95) | | | $ | 1,254 | |
| 2021 | 501 | | | 295 | | | 359 | | | 93 | | | (93) | | | 1,155 | |
| Interest expense, net: | | | | | | | | | | | |
| 2022 | $ | 37 | | | $ | 16 | | | $ | 17 | | | $ | 1 | | | $ | 1 | | | $ | 72 | |
| 2021 | 35 | | | 15 | | | 14 | | | 3 | | | — | | | 67 | |
| Income (loss) before income taxes: | | | | | | | | | | | |
| 2022 | $ | 146 | | | $ | 54 | | | $ | 95 | | | $ | (4) | | | $ | — | | | $ | 291 | |
| 2021 | 136 | | | 53 | | | 79 | | | (4) | | | — | | | 264 | |
| Income Taxes: | | | | | | | | | | | |
| 2022 | $ | 1 | | | $ | 2 | | | $ | 1 | | | $ | (2) | | | $ | — | | | $ | 2 | |
| 2021 | 6 | | | 3 | | | (11) | | | — | | | — | | | (2) | |
| Net income (loss): | | | | | | | | | | | |
| 2022 | $ | 145 | | | $ | 52 | | | $ | 94 | | | $ | (2) | | | $ | — | | | $ | 289 | |
| 2021 | 130 | | | 50 | | | 90 | | | (4) | | | — | | | 266 | |
| Capital Expenditures: | | | | | | | | | | | |
| 2022 | $ | 193 | | | $ | 100 | | | $ | 105 | | | $ | — | | | $ | — | | | $ | 398 | |
| 2021 | 202 | | | 109 | | | 97 | | | 2 | | | — | | | 410 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pepco | | DPL | | ACE | | Other(a) | | Intersegment
Eliminations | | PHI |
Operating revenues(b): | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Electric revenues | $ | 759 | | | $ | 419 | | | $ | 358 | | | $ | — | | | $ | (4) | | | $ | 1,532 | |
| Natural gas revenues | — | | | 72 | | | — | | | — | | | — | | | 72 | |
| Shared service and other revenues | — | | | — | | | — | | | 109 | | | (107) | | | 2 | |
| Total operating revenues | $ | 759 | | | $ | 491 | | | $ | 358 | | | $ | 109 | | | $ | (111) | | | $ | 1,606 | |
| 2023 | | | | | | | | | | | |
| Electric revenues | $ | 710 | | | $ | 377 | | | $ | 353 | | | $ | — | | | $ | (4) | | | $ | 1,436 | |
| Natural gas revenues | — | | | 97 | | | — | | | — | | | — | | | 97 | |
| Shared service and other revenues | — | | | — | | | — | | | 102 | | | (99) | | | 3 | |
| Total operating revenues | $ | 710 | | | $ | 474 | | | $ | 353 | | | $ | 102 | | | $ | (103) | | | $ | 1,536 | |
Intersegment revenues(c): | | | | | | | | | | | |
| 2024 | $ | 2 | | | $ | 2 | | | $ | 1 | | | $ | 109 | | | $ | (111) | | | $ | 3 | |
| 2023 | 1 | | | 2 | | | 1 | | | 102 | | | (103) | | | 3 | |
| Depreciation and amortization: | | | | | | | | | | | |
| 2024 | $ | 107 | | | $ | 61 | | | $ | 74 | | | $ | 4 | | | $ | — | | | $ | 246 | |
| 2023 | 108 | | | 60 | | | 67 | | | 6 | | | — | | | 241 | |
| Operating expenses: | | | | | | | | | | | |
| 2024 | $ | 640 | | | $ | 391 | | | $ | 303 | | | $ | 111 | | | $ | (110) | | | $ | 1,335 | |
| 2023 | 610 | | | 388 | | | 298 | | | 104 | | | (103) | | | 1,297 | |
| Interest expense, net: | | | | | | | | | | | |
| 2024 | $ | 45 | | | $ | 22 | | | $ | 20 | | | $ | 3 | | | $ | — | | | $ | 90 | |
| 2023 | 39 | | | 17 | | | 16 | | | 4 | | | — | | | 76 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Income taxes: | | | | | | | | | | | |
| 2024 | $ | 14 | | | $ | 17 | | | $ | 11 | | | $ | (2) | | | $ | — | | | $ | 40 | |
| 2023 | 12 | | | 12 | | | 11 | | | (1) | | | — | | | 34 | |
| Net income (loss): | | | | | | | | | | | |
| 2024 | $ | 75 | | | $ | 66 | | | $ | 29 | | | $ | (2) | | | $ | — | | | $ | 168 | |
| 2023 | 65 | | | 60 | | | 33 | | | (3) | | | — | | | 155 | |
| Capital expenditures: | | | | | | | | | | | |
| 2024 | $ | 229 | | | $ | 134 | | | $ | 89 | | | $ | 1 | | | $ | — | | | $ | 453 | |
| 2023 | 264 | | | 134 | | | 161 | | | 2 | | | — | | | 561 | |
| Total assets: | | | | | | | | | | | |
| March 31, 2024 | $ | 11,585 | | | $ | 6,291 | | | $ | 5,253 | | | $ | 4,718 | | | $ | (312) | | | $ | 27,535 | |
| December 31, 2023 | 11,194 | | | 5,966 | | | 5,157 | | | 4,627 | | | (41) | | | 26,903 | |
__________
(a)Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.
(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expensesTaxes other than income taxes in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 1614 — Supplemental Financial Information for additional information on total utility taxes.
(c)Includes intersegment revenues with ComEd, BGE,PECO, and PECO,BGE, which are eliminated at Exelon.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 4 — Segment Information
Electric and Gas Revenue by Customer Class (Utility Registrants):
The following tables disaggregate the Registrants' revenues recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. For the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended March 31, 2024 |
| Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Electric revenues | | | | | | | | | | | | | |
| Residential | $ | 918 | | | $ | 520 | | | $ | 534 | | | $ | 775 | | | $ | 345 | | | $ | 256 | | | $ | 174 | |
| Small commercial & industrial | 594 | | | 126 | | | 90 | | | 158 | | | 46 | | | 62 | | | 50 | |
| Large commercial & industrial | 320 | | | 57 | | | 132 | | | 340 | | | 262 | | | 29 | | | 49 | |
| Public authorities & electric railroads | 17 | | | 7 | | | 7 | | | 20 | | | 11 | | | 4 | | | 5 | |
Other(a) | 227 | | | 74 | | | 93 | | | 192 | | | 64 | | | 63 | | | 67 | |
Total electric revenues(b) | $ | 2,076 | | | $ | 784 | | | $ | 856 | | | $ | 1,485 | | | $ | 728 | | | $ | 414 | | | $ | 345 | |
| Natural gas revenues | | | | | | | | | | | | | |
| Residential | $ | — | | | $ | 193 | | | $ | 271 | | | $ | 46 | | | $ | — | | | $ | 46 | | | $ | — | |
| Small commercial & industrial | — | | | 64 | | | 47 | | | 17 | | | — | | | 17 | | | — | |
| Large commercial & industrial | — | | | — | | | 72 | | | 2 | | | — | | | 2 | | | — | |
| Transportation | — | | | 8 | | | — | | | 5 | | | — | | | 5 | | | — | |
Other(c) | — | | | 7 | | | 5 | | | 2 | | | — | | | 2 | | | — | |
Total natural gas revenues(d) | $ | — | | | $ | 272 | | | $ | 395 | | | $ | 72 | | | $ | — | | | $ | 72 | | | $ | — | |
| Total revenues from contracts with customers | $ | 2,076 | | | $ | 1,056 | | | $ | 1,251 | | | $ | 1,557 | | | $ | 728 | | | $ | 486 | | | $ | 345 | |
| Other revenues | | | | | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 19 | | | $ | (2) | | | $ | 43 | | | $ | 46 | | | $ | 29 | | | $ | 4 | | | $ | 13 | |
Other electric revenues(e) | — | | | — | | | 2 | | | 3 | | | 2 | | | 1 | | | — | |
Other natural gas revenues(e) | — | | | — | | | 1 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
| Total other revenues | $ | 19 | | | $ | (2) | | | $ | 46 | | | $ | 49 | | | $ | 31 | | | $ | 5 | | | $ | 13 | |
| Total revenues for reportable segments | $ | 2,095 | | | $ | 1,054 | | | $ | 1,297 | | | $ | 1,606 | | | $ | 759 | | | $ | 491 | | | $ | 358 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 54 — Segment Information
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 |
| Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Electric revenues | | | | | | | | | | | | | |
| Residential | $ | 935 | | | $ | 620 | | | $ | 406 | | | $ | 808 | | | $ | 318 | | | $ | 207 | | | $ | 283 | |
| Small commercial & industrial | 217 | | | 149 | | | 88 | | | 179 | | | 44 | | | 65 | | | 70 | |
| Large commercial & industrial | (117) | | | 93 | | | 158 | | | 401 | | | 303 | | | 43 | | | 55 | |
| Public authorities & electric railroads | 3 | | | 8 | | | 7 | | | 16 | | | 9 | | | 4 | | | 3 | |
Other(a) | 246 | | | 71 | | | 101 | | | 166 | | | 57 | | | 55 | | | 54 | |
Total electric revenues(b) | $ | 1,284 | | | $ | 941 | | | $ | 760 | | | $ | 1,570 | | | $ | 731 | | | $ | 374 | | | $ | 465 | |
| Natural gas revenues | | | | | | | | | | | | | |
| Residential | $ | — | | | $ | 46 | | | $ | 70 | | | $ | 10 | | | $ | — | | | $ | 10 | | | $ | — | |
| Small commercial & industrial | — | | | 20 | | | 13 | | | 6 | | | — | | | 6 | | | — | |
| Large commercial & industrial | — | | | — | | | 28 | | | 3 | | | — | | | 3 | | | — | |
| Transportation | — | | | 5 | | | — | | | 3 | | | — | | | 3 | | | — | |
Other(c) | — | | | 2 | | | 2 | | | 16 | | | — | | | 16 | | | — | |
Total natural gas revenues(d) | $ | — | | | $ | 73 | | | $ | 113 | | | $ | 38 | | | $ | — | | | $ | 38 | | | $ | — | |
| Total revenues from contracts with customers | $ | 1,284 | | | $ | 1,014 | | | $ | 873 | | | $ | 1,608 | | | $ | 731 | | | $ | 412 | | | $ | 465 | |
| | | | | | | | | | | | | |
| Other revenues | | | | | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 88 | | | $ | (5) | | | $ | (8) | | | $ | (11) | | | $ | (8) | | | $ | — | | | $ | (3) | |
Other electric revenues(e) | 6 | | | 5 | | | 4 | | | 1 | | | 1 | | | — | | | — | |
Other natural gas revenues(e) | — | | | — | | | 1 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
| Total other revenues | $ | 94 | | | $ | — | | | $ | (3) | | | $ | (10) | | | $ | (7) | | | $ | — | | | $ | (3) | |
| Total revenues for reportable segments | $ | 1,378 | | | $ | 1,014 | | | $ | 870 | | | $ | 1,598 | | | $ | 724 | | | $ | 412 | | | $ | 462 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
| | | Three Months Ended September 30, 2021 |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Revenues from contracts with customers | Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE | Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Electric revenues | Electric revenues | | | | | | | | | | | | | |
| Residential | |
| Residential | |
| Residential | Residential | $ | 978 | | | $ | 509 | | | $ | 383 | | | $ | 782 | | | $ | 309 | | | $ | 198 | | | $ | 275 | |
| Small commercial & industrial | Small commercial & industrial | 433 | | | 113 | | | 73 | | | 150 | | | 36 | | | 53 | | | 61 | |
| Large commercial & industrial | Large commercial & industrial | 148 | | | 67 | | | 128 | | | 320 | | | 244 | | | 27 | | | 49 | |
| Public authorities & electric railroads | Public authorities & electric railroads | 11 | | | 7 | | | 7 | | | 15 | | | 8 | | | 4 | | | 3 | |
Other(a) | Other(a) | 245 | | | 61 | | | 104 | | | 172 | | | 53 | | | 56 | | | 63 | |
Total electric revenues(b) | Total electric revenues(b) | $ | 1,815 | | | $ | 757 | | | $ | 695 | | | $ | 1,439 | | | $ | 650 | | | $ | 338 | | | $ | 451 | |
| Natural gas revenues | Natural gas revenues | |
| Residential | Residential | $ | — | | | $ | 36 | | | $ | 57 | | | $ | 10 | | | $ | — | | | $ | 10 | | | $ | — | |
| Residential | |
| Residential | |
| Small commercial & industrial | Small commercial & industrial | — | | | 13 | | | 10 | | | 5 | | | — | | | 5 | | | — | |
| Large commercial & industrial | Large commercial & industrial | — | | | — | | | 22 | | | 2 | | | — | | | 2 | | | — | |
| Transportation | Transportation | — | | | 5 | | | — | | | 3 | | | — | | | 3 | | | — | |
Other(c) | Other(c) | — | | | 2 | | | 6 | | | 3 | | | — | | | 3 | | | — | |
Total natural gas revenues(d) | Total natural gas revenues(d) | $ | — | | | $ | 56 | | | $ | 95 | | | $ | 23 | | | $ | — | | | $ | 23 | | | $ | — | |
| Total revenues from contracts with customers | Total revenues from contracts with customers | $ | 1,815 | | | $ | 813 | | | $ | 790 | | | $ | 1,462 | | | $ | 650 | | | $ | 361 | | | $ | 451 | |
| | Other revenues | Other revenues | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | |
| Revenues from alternative revenue programs | Revenues from alternative revenue programs | $ | (32) | | | $ | 3 | | | $ | (24) | | | $ | 6 | | | $ | 9 | | | $ | (2) | | | $ | — | |
Other electric revenues(e) | Other electric revenues(e) | 6 | | | 2 | | | 3 | | | 2 | | | 1 | | | 1 | | | — | |
Other natural gas revenues(e) | Other natural gas revenues(e) | — | | | — | | | 1 | | | — | | | — | | | — | | | — | |
| | Total other revenues | Total other revenues | $ | (26) | | | $ | 5 | | | $ | (20) | | | $ | 8 | | | $ | 10 | | | $ | (1) | | | $ | — | |
| Total other revenues | |
| Total other revenues | |
| Total revenues for reportable segments | Total revenues for reportable segments | $ | 1,789 | | | $ | 818 | | | $ | 770 | | | $ | 1,470 | | | $ | 660 | | | $ | 360 | | | $ | 451 | |
__________
(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.
(b)Includes operating revenues from affiliates in 20222024 and 20212023 respectively of:
•$62 million, $9$3 million at ComEd
•$32 million, $2$1 million at PECO
•$21 million, $4$2 million at BGE
•$3 million, $3 million at PHI
•$2 million, $2$1 million at Pepco
•$12 million, $2 million at DPL
•less than $1$1 million, $1 million at ACE
(c)Includes revenues from off-system natural gas sales.
(d)Includes operating revenues from affiliates in 20222024 and 20212023 respectively of:
•less than $1 million, less than $1 million at PECO
•$1 million, $3$1 million at BGE
(e)Includes late payment charge revenues.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
Nine Months Ended September 30, 2022 and 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ComEd | | PECO | | BGE | | PHI | | Other(a) | | Intersegment
Eliminations | | Exelon |
Operating revenues(b): | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| Electric revenues | $ | 4,536 | | | $ | 2,390 | | | $ | 2,122 | | | $ | 4,058 | | | $ | — | | | $ | (24) | | | $ | 13,082 | |
| Natural gas revenues | — | | | 487 | | | 688 | | | 157 | | | — | | | (2) | | | 1,330 | |
| Shared service and other revenues | — | | | — | | | — | | | 8 | | | 1,342 | | | (1,350) | | | — | |
| Total operating revenues | $ | 4,536 | | | $ | 2,877 | | | $ | 2,810 | | | $ | 4,223 | | | $ | 1,342 | | | $ | (1,376) | | | $ | 14,412 | |
| 2021 | | | | | | | | | | | | | |
| Electric revenues | $ | 4,840 | | | $ | 2,033 | | | $ | 1,866 | | | $ | 3,726 | | | $ | — | | | $ | 5 | | | $ | 12,470 | |
| Natural gas revenues | — | | | 366 | | | 560 | | | 118 | | | — | | | — | | | 1,044 | |
| Shared service and other revenues | — | | | — | | | — | | | 10 | | | 1,549 | | | (1,559) | | | — | |
| Total operating revenues | $ | 4,840 | | | $ | 2,399 | | | $ | 2,426 | | | $ | 3,854 | | | $ | 1,549 | | | $ | (1,554) | | | $ | 13,514 | |
| | | | | | | | | | | | | |
Intersegment revenues(c): | | | | | | | | | | | | | |
| 2022 | $ | 14 | | | $ | 5 | | | $ | 13 | | | $ | 9 | | | $ | 1,342 | | | $ | (1,377) | | | $ | 6 | |
| 2021 | 19 | | | 6 | | | 20 | | | 10 | | | 1,542 | | | (1,549) | | | 48 | |
| Depreciation and amortization: | | | | | | | | | | | | | |
| 2022 | $ | 982 | | | $ | 277 | | | $ | 470 | | | $ | 697 | | | $ | 46 | | | $ | — | | | $ | 2,472 | |
| 2021 | 893 | | | 259 | | | 434 | | | 614 | | | 52 | | | 1 | | | 2,253 | |
| Operating expenses: | | | | | | | | | | | | | |
| 2022 | $ | 3,357 | | | $ | 2,230 | | | $ | 2,446 | | | $ | 3,535 | | | $ | 1,524 | | | $ | (1,288) | | | $ | 11,804 | |
| 2021 | 3,833 | | | 1,908 | | | 2,080 | | | 3,167 | | | 1,436 | | | (1,067) | | | 11,357 | |
| Interest expense, net: | | | | | | | | | | | | | |
| 2022 | $ | 308 | | | $ | 129 | | | $ | 110 | | | $ | 216 | | | $ | 300 | | | $ | — | | | $ | 1,063 | |
| 2021 | 292 | | | 119 | | | 103 | | | 201 | | | 253 | | | (1) | | | 967 | |
| Income (loss) from continuing operations before income taxes: | | | | | | | | | | | | | |
| 2022 | $ | 909 | | | $ | 541 | | | $ | 270 | | | $ | 528 | | | $ | (228) | | | $ | (42) | | | $ | 1,978 | |
| 2021 | 750 | | | 392 | | | 266 | | | 538 | | | (116) | | | (447) | | | 1,383 | |
| Income Taxes: | | | | | | | | | | | | | |
| 2022 | $ | 203 | | | $ | 67 | | | $ | 3 | | | $ | 10 | | | $ | 82 | | | $ | (9) | | | $ | 356 | |
| 2021 | 141 | | | 9 | | | (24) | | | 3 | | | (27) | | | (26) | | | 76 | |
| Net income (loss) from continuing operations: | | | | | | | | | | | | | |
| 2022 | $ | 706 | | | $ | 474 | | | $ | 267 | | | $ | 518 | | | $ | (310) | | | $ | (33) | | | $ | 1,622 | |
| 2021 | 609 | | | 383 | | | 290 | | | 535 | | | (88) | | | (422) | | | 1,307 | |
| Capital Expenditures: | | | | | | | | | | | | | |
| 2022 | $ | 1,801 | | | $ | 991 | | | $ | 918 | | | $ | 1,174 | | | $ | 68 | | | $ | — | | | $ | 4,952 | |
| 2021 | 1,723 | | | 878 | | | 907 | | | 1,299 | | | 65 | | | — | | | 4,872 | |
| Total assets: | | | | | | | | | | | | | |
| September 30, 2022 | $ | 38,582 | | | $ | 14,048 | | | $ | 12,932 | | | $ | 25,655 | | | $ | 6,341 | | | $ | (4,103) | | | $ | 93,455 | |
| December 31, 2021 | 36,470 | | | 13,824 | | | 12,324 | | | 24,744 | | | 7,626 | | | (8,319) | | | 86,669 | |
__________
(a)Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.
(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 16 — Supplemental Financial Information for additional information on total utility taxes.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
(c)See Note 17 — Related Party Transactions for additional information on intersegment revenues.
PHI:
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| Pepco | | DPL | | ACE | | Other(a) | | Intersegment
Eliminations | | PHI |
Operating revenues(b): | | | | | | | | | | | |
| 2022 | | | | | | | | | | | |
| Electric revenues | $ | 1,919 | | | $ | 1,019 | | | $ | 1,120 | | | $ | — | | | $ | — | | | $ | 4,058 | |
| Natural gas revenues | — | | | 157 | | | — | | | — | | | — | | | 157 | |
| Shared service and other revenues | — | | | — | | | — | | | 298 | | | (290) | | | 8 | |
| Total operating revenues | $ | 1,919 | | | $ | 1,176 | | | $ | 1,120 | | | $ | 298 | | | $ | (290) | | | $ | 4,223 | |
| 2021 | | | | | | | | | | | |
| Electric revenues | $ | 1,736 | | | $ | 922 | | | $ | 1,080 | | | $ | — | | | $ | (12) | | | $ | 3,726 | |
| Natural gas revenues | — | | | 118 | | | — | | | — | | | — | | | 118 | |
| Shared service and other revenues | — | | | — | | | — | | | 281 | | | (271) | | | 10 | |
| Total operating revenues | $ | 1,736 | | | $ | 1,040 | | | $ | 1,080 | | | $ | 281 | | | $ | (283) | | | $ | 3,854 | |
Intersegment revenues(c): | | | | | | | | | | | |
| 2022 | $ | 4 | | | $ | 5 | | | $ | 2 | | | $ | 288 | | | $ | (290) | | | $ | 9 | |
| 2021 | 4 | | | 6 | | | 2 | | | 281 | | | (283) | | | 10 | |
| Depreciation and amortization: | | | | | | | | | | | |
| 2022 | $ | 312 | | | $ | 172 | | | $ | 192 | | | $ | 21 | | | $ | — | | | $ | 697 | |
| 2021 | 302 | | | 157 | | | 133 | | | 22 | | | — | | | 614 | |
| Operating expenses: | | | | | | | | | | | |
| 2022 | $ | 1,588 | | | $ | 999 | | | $ | 947 | | | $ | 291 | | | $ | (290) | | | $ | 3,535 | |
| 2021 | 1,396 | | | 858 | | | 911 | | | 285 | | | (283) | | | 3,167 | |
| Interest expense, net: | | | | | | | | | | | |
| 2022 | $ | 111 | | | $ | 48 | | | $ | 49 | | | $ | 7 | | | $ | 1 | | | $ | 216 | |
| 2021 | 104 | | | 47 | | | 43 | | | 7 | | | — | | | 201 | |
| Income (loss) before income taxes: | | | | | | | | | | | |
| 2022 | $ | 259 | | | $ | 138 | | | $ | 133 | | | $ | (2) | | | $ | — | | | $ | 528 | |
| 2021 | 273 | | | 144 | | | 129 | | | (8) | | | — | | | 538 | |
| Income Taxes: | | | | | | | | | | | |
| 2022 | $ | (2) | | | $ | 8 | | | $ | 2 | | | $ | 2 | | | $ | — | | | $ | 10 | |
| 2021 | 9 | | | 9 | | | (12) | | | (3) | | | — | | | 3 | |
| Net income (loss): | | | | | | | | | | | |
| 2022 | $ | 261 | | | $ | 130 | | | $ | 131 | | | $ | (4) | | | $ | — | | | $ | 518 | |
| 2021 | 264 | | | 135 | | | 141 | | | (5) | | | — | | | 535 | |
| Capital Expenditures: | | | | | | | | | | | |
| 2022 | $ | 595 | | | $ | 294 | | | $ | 284 | | | $ | 1 | | | $ | — | | | $ | 1,174 | |
| 2021 | 641 | | | 320 | | | 336 | | | 2 | | | — | | | 1,299 | |
| Total assets: | | | | | | | | | | | |
| September 30, 2022 | $ | 10,349 | | | $ | 5,710 | | | $ | 4,966 | | | $ | 4,716 | | | $ | (86) | | | $ | 25,655 | |
| December 31, 2021 | 9,903 | | | 5,412 | | | 4,556 | | | 4,933 | | | (60) | | | 24,744 | |
__________
(a)Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.
(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 16 — Supplemental Financial Information for additional information on total utility taxes.
(c)Includes intersegment revenues with ComEd, BGE, and PECO, which are eliminated at Exelon.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
The following tables disaggregate the Registrants' revenues recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. For the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.
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| Nine Months Ended September 30, 2022 |
| Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Electric revenues | | | | | | | | | | | | | |
| Residential | $ | 2,610 | | | $ | 1,538 | | | $ | 1,158 | | | $ | 2,007 | | | $ | 826 | | | $ | 570 | | | $ | 611 | |
| Small commercial & industrial | 953 | | | 386 | | | 239 | | | 461 | | | 117 | | | 173 | | | 171 | |
| Large commercial & industrial | 48 | | | 229 | | | 418 | | | 1,056 | | | 806 | | | 99 | | | 151 | |
| Public authorities & electric railroads | 22 | | | 23 | | | 20 | | | 47 | | | 25 | | | 11 | | | 11 | |
Other(a) | 718 | | | 202 | | | 297 | | | 524 | | | 157 | | | 168 | | | 190 | |
Total electric revenues(b) | $ | 4,351 | | | $ | 2,378 | | | $ | 2,132 | | | $ | 4,095 | | | $ | 1,931 | | | $ | 1,021 | | | $ | 1,134 | |
| Natural gas revenues | | | | | | | | | | | | | |
| Residential | $ | — | | | $ | 335 | | | $ | 448 | | | $ | 77 | | | $ | — | | | $ | 77 | | | $ | — | |
| Small commercial & industrial | — | | | 125 | | | 77 | | | 35 | | | — | | | 35 | | | — | |
| Large commercial & industrial | — | | | — | | | 128 | | | 9 | | | — | | | 9 | | | — | |
| Transportation | — | | | 19 | | | — | | | 11 | | | — | | | 11 | | | — | |
Other(c) | — | | | 7 | | | 50 | | | 25 | | | — | | | 25 | | | — | |
Total natural gas revenues(d) | $ | — | | | $ | 486 | | | $ | 703 | | | $ | 157 | | | $ | — | | | $ | 157 | | | $ | — | |
| Total revenues from contracts with customers | $ | 4,351 | | | $ | 2,864 | | | $ | 2,835 | | | $ | 4,252 | | | $ | 1,931 | | | $ | 1,178 | | | $ | 1,134 | |
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| Other revenues | | | | | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 163 | | | $ | 1 | | | $ | (40) | | | $ | (33) | | | $ | (15) | | | $ | (3) | | | $ | (14) | |
Other electric revenues(e) | 22 | | | 11 | | | 11 | | | 4 | | | 3 | | | 1 | | | — | |
Other natural gas revenues(e) | — | | | 1 | | | 4 | | | — | | | — | | | — | | | — | |
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| Total other revenues | $ | 185 | | | $ | 13 | | | $ | (25) | | | $ | (29) | | | $ | (12) | | | $ | (2) | | | $ | (14) | |
| Total revenues for reportable segments | $ | 4,536 | | | $ | 2,877 | | | $ | 2,810 | | | $ | 4,223 | | | $ | 1,919 | | | $ | 1,176 | | | $ | 1,120 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 5 — Segment Information
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| Nine Months Ended September 30, 2021 |
| Revenues from contracts with customers | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Electric revenues | | | | | | | | | | | | | |
| Residential | $ | 2,479 | | | $ | 1,325 | | | $ | 1,044 | | | $ | 1,924 | | | $ | 785 | | | $ | 535 | | | $ | 604 | |
| Small commercial & industrial | 1,176 | | | 312 | | | 202 | | | 392 | | | 101 | | | 145 | | | 146 | |
| Large commercial & industrial | 420 | | | 183 | | | 342 | | | 825 | | | 616 | | | 70 | | | 139 | |
| Public authorities & electric railroads | 33 | | | 24 | | | 20 | | | 45 | | | 24 | | | 11 | | | 10 | |
Other(a) | 676 | | | 167 | | | 269 | | | 453 | | | 154 | | | 143 | | | 158 | |
Total electric revenues(b) | $ | 4,784 | | | $ | 2,011 | | | $ | 1,877 | | | $ | 3,639 | | | $ | 1,680 | | | $ | 904 | | | $ | 1,057 | |
| Natural gas revenues | | | | | | | | | | | | | |
| Residential | $ | — | | | $ | 251 | | | $ | 354 | | | $ | 67 | | | $ | — | | | $ | 67 | | | $ | — | |
| Small commercial & industrial | — | | | 94 | | | 59 | | | 29 | | | — | | | 29 | | | — | |
| Large commercial & industrial | — | | | — | | | 103 | | | 5 | | | — | | | 5 | | | — | |
| Transportation | — | | | 17 | | | — | | | 11 | | | — | | | 11 | | | — | |
Other(c) | — | | | 4 | | | 41 | | | 6 | | | — | | | 6 | | | — | |
Total natural gas revenues(d) | $ | — | | | $ | 366 | | | $ | 557 | | | $ | 118 | | | $ | — | | | $ | 118 | | | $ | — | |
| Total revenues from contracts with customers | $ | 4,784 | | | $ | 2,377 | | | $ | 2,434 | | | $ | 3,757 | | | $ | 1,680 | | | $ | 1,022 | | | $ | 1,057 | |
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| Other revenues | | | | | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 32 | | | $ | 20 | | | $ | (17) | | | $ | 94 | | | $ | 54 | | | $ | 17 | | | $ | 23 | |
Other electric revenues(e) | 24 | | | 2 | | | 7 | | | 3 | | | 2 | | | 1 | | | — | |
Other natural gas revenues(e) | — | | | — | | | 2 | | | — | | | — | | | — | | | — | |
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| Total other revenues | $ | 56 | | | $ | 22 | | | $ | (8) | | | $ | 97 | | | $ | 56 | | | $ | 18 | | | $ | 23 | |
| Total revenues for reportable segments | $ | 4,840 | | | $ | 2,399 | | | $ | 2,426 | | | $ | 3,854 | | | $ | 1,736 | | | $ | 1,040 | | | $ | 1,080 | |
__________
(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.
(b)Includes operating revenues from affiliates in 2022 and 2021 respectively of:
•$14 million, $19 million at ComEd
•$5 million, $5 million at PECO
•$5 million, $10 million at BGE
•$9 million, $10 million at PHI
•$4 million, $4 million at Pepco
•$5 million, $6 million at DPL
•$2 million, $2 million at ACE
(c)Includes revenues from off-system natural gas sales.
(d)Includes operating revenues from affiliates in 2022 and 2021 respectively of:
•$1 million, $1 million at PECO
•$7 million, $10 million at BGE
(e)Includes late payment charge revenues.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 65 — Accounts Receivable
6.5. Accounts Receivable (All Registrants)
Allowance for Credit Losses on Accounts Receivable
The following tables present the rollforward of Allowance for Credit Losses on Customer Accounts Receivable.
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| Three Months Ended September 30, 2022 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of June 30, 2022 | $ | 354 | | | $ | 81 | | | $ | 107 | | | $ | 57 | | | $ | 109 | | | $ | 42 | | | $ | 22 | | | $ | 45 | |
Plus: Current period provision for expected credit losses(a) | 38 | | | 10 | | | 12 | | | 2 | | | 14 | | | 6 | | | 1 | | | 7 | |
Less: Write-offs, net of recoveries(b) | 51 | | | 17 | | | 16 | | | 5 | | | 12 | | | 4 | | | 3 | | | 5 | |
| Balance as of September 30, 2022 | $ | 341 | | | $ | 74 | | | $ | 103 | | | $ | 54 | | | $ | 111 | | | $ | 44 | | | $ | 20 | | | $ | 47 | |
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| Three Months Ended September 30, 2021 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of June 30, 2021 | $ | 320 | | | $ | 89 | | | $ | 111 | | | $ | 27 | | | $ | 93 | | | $ | 38 | | | $ | 19 | | | $ | 36 | |
Plus: Current period provision for expected credit losses(c) | 37 | | | 11 | | | 1 | | | 7 | | | 18 | | | 5 | | | 3 | | | 10 | |
Less: Write-offs, net of recoveries(b) | 32 | | | 12 | | | 11 | | | 3 | | | 6 | | | 2 | | | 4 | | | — | |
| Balance as of September 30, 2021 | $ | 325 | | | $ | 88 | | | $ | 101 | | | $ | 31 | | | $ | 105 | | | $ | 41 | | | $ | 18 | | | $ | 46 | |
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| Nine Months Ended September 30, 2022 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of December 31, 2021 | $ | 320 | | | $ | 73 | | | $ | 105 | | | $ | 38 | | | $ | 104 | | | $ | 37 | | | $ | 18 | | | $ | 49 | |
Plus: Current period provision for expected credit losses(d)(e) | 141 | | | 31 | | | 33 | | | 30 | | | 47 | | | 23 | | | 8 | | | 16 | |
Less: Write-offs, net of recoveries(b)(f) | 120 | | | 30 | | | 35 | | | 14 | | | 40 | | | 16 | | | 6 | | | 18 | |
| Balance as of September 30, 2022 | $ | 341 | | | $ | 74 | | | $ | 103 | | | $ | 54 | | | $ | 111 | | | $ | 44 | | | $ | 20 | | | $ | 47 | |
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| Nine Months Ended September 30, 2021 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of December 31, 2020 | $ | 334 | | | $ | 97 | | | $ | 116 | | | $ | 35 | | | $ | 86 | | | $ | 32 | | | $ | 22 | | | $ | 32 | |
Plus: Current period provision for expected credit losses(g) | 65 | | | 23 | | | 7 | | | 2 | | | 33 | | | 15 | | | 4 | | | 14 | |
Less: Write-offs, net of recoveries(b) | 74 | | | 32 | | | 22 | | | 6 | | | 14 | | | 6 | | | 8 | | | — | |
| Balance as of September 30, 2021 | $ | 325 | | | $ | 88 | | | $ | 101 | | | $ | 31 | | | $ | 105 | | | $ | 41 | | | $ | 18 | | | $ | 46 | |
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| Three Months Ended March 31, 2024 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at December 31, 2023 | $ | 317 | | | $ | 69 | | | $ | 95 | | | $ | 46 | | | $ | 107 | | | $ | 52 | | | $ | 19 | | | $ | 36 | |
Plus: Current period provision for expected credit losses(a)(b)(c) | 79 | | | 22 | | | 23 | | | 15 | | | 19 | | | 12 | | | 3 | | | 4 | |
Less: Write-offs(d), net of recoveries(e) | 50 | | | 9 | | | 11 | | | 9 | | | 21 | | | 12 | | | 5 | | | 4 | |
| Balance at March 31, 2024 | $ | 346 | | | $ | 82 | | | $ | 107 | | | $ | 52 | | | $ | 105 | | | $ | 52 | | | $ | 17 | | | $ | 36 | |
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| Three Months Ended March 31, 2023 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at December 31, 2022 | $ | 327 | | | $ | 59 | | | $ | 105 | | | $ | 54 | | | $ | 109 | | | $ | 47 | | | $ | 21 | | | $ | 41 | |
| Plus: Current period provision for expected credit losses | 108 | | | 22 | | | 39 | | | 30 | | | 17 | | | 9 | | | 7 | | | 1 | |
| Less: Write-offs, net of recoveries | 46 | | | 7 | | | 14 | | | 11 | | | 14 | | | 7 | | | 2 | | | 5 | |
| Balance at March 31, 2023 | $ | 389 | | | $ | 74 | | | $ | 130 | | | $ | 73 | | | $ | 112 | | | $ | 49 | | | $ | 26 | | | $ | 37 | |
___________________
(a)For PECO, the change in current period provision for expected credit losses is primarily a result of decreased receivable balances.
(b)For BGE and DPL, the change in the current period provision for expected credit losses is primarily a result of changes in customer risk profile.
(c)For ACE, the increasechange in current period provision for expected credit losses is primarily a result of increased receivable balances.
(b)(d)For Pepco and DPL, the change in write-offs is primarily attributable to unfavorable customer payment behavior.
(e)Recoveries were not material to the Registrants.
(c)
The following tables present the rollforward of Allowance for Credit Losses on Other Accounts Receivable.
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| Three Months Ended March 31, 2024 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at December 31, 2023 | $ | 82 | | | $ | 17 | | | $ | 8 | | | $ | 7 | | | $ | 50 | | | $ | 28 | | | $ | 8 | | | $ | 14 | |
| Plus: Current period provision for expected credit losses | 18 | | | 3 | | | 5 | | | 2 | | | 8 | | | 7 | | | — | | | 1 | |
Less: Write-offs, net of recoveries(a) | 4 | | | 1 | | | — | | | 2 | | | 1 | | | — | | | — | | | 1 | |
| Balance at March 31, 2024 | $ | 96 | | | $ | 19 | | | $ | 13 | | | $ | 7 | | | $ | 57 | | | $ | 35 | | | $ | 8 | | | $ | 14 | |
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| Three Months Ended March 31, 2023 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at December 31, 2022 | $ | 82 | | | $ | 17 | | | $ | 9 | | | $ | 10 | | | $ | 46 | | | $ | 25 | | | $ | 7 | | | $ | 14 | |
| Plus: Current period provision for expected credit losses | 14 | | | 2 | | | 3 | | | 4 | | | 5 | | | 3 | | | 1 | | | 1 | |
| Less: Write-offs, net of recoveries | 5 | | | 1 | | | 1 | | | 2 | | | 1 | | | — | | | — | | | 1 | |
| Balance at March 31, 2023 | $ | 91 | | | $ | 18 | | | $ | 11 | | | $ | 12 | | | $ | 50 | | | $ | 28 | | | $ | 8 | | | $ | 14 | |
_________
(a)For ACE,Recoveries were not material to the increase is primarily a result of increased aging of receivables and a slight decrease in the expected recovery rate.Registrants.
(d)For PECO, BGE, and DPL, the increase is primarily a result of increased receivable balances due to the increased aging of receivables.
(e)For PHI, Pepco and ACE, the increase is primarily as a result of increased receivable balances.
(f)For PECO, PHI, Pepco, and ACE, the increase in 2022 is primarily related to the termination of the moratoriums in Pennsylvania, the District of Columbia, and New Jersey, which beginning in March 2020, prevented customer disconnections for non-payment. With disconnection activities restarting in January 2022, write-offs of aging accounts receivable increased throughout the year.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 65 — Accounts Receivable
(g)For PHI, Pepco, and ACE, the increase is primarily a result of increased aging of receivables and a slight decrease in the expected recovery rate.
The following tables present the rollforward of Allowance for Credit Losses on Other Accounts Receivable.
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| Three Months Ended September 30, 2022 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of June 30, 2022 | $ | 81 | | | $ | 18 | | | $ | 10 | | | $ | 11 | | | $ | 42 | | | $ | 20 | | | $ | 8 | | | $ | 14 | |
| Plus: Current period provision (benefit) for expected credit losses | 8 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | (1) | | | 1 | |
Less: Write-offs, net of recoveries(a) | 5 | | | 2 | | | 1 | | | 1 | | | 1 | | | — | | | — | | | 1 | |
| Balance as of September 30, 2022 | $ | 84 | | | $ | 18 | | | $ | 11 | | | $ | 12 | | | $ | 43 | | | $ | 22 | | | $ | 7 | | | $ | 14 | |
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| Three Months Ended September 30, 2021 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of June 30, 2021 | $ | 71 | | | $ | 18 | | | $ | 7 | | | $ | 8 | | | $ | 38 | | | $ | 16 | | | $ | 9 | | | $ | 13 | |
| Plus: Current period provision (benefit) for expected credit losses | 6 | | | 2 | | | 1 | | | 1 | | | 2 | | | 1 | | | (1) | | | 2 | |
Less: Write-offs, net of recoveries(a) | 4 | | | 1 | | | 1 | | | 1 | | | — | | | — | | | — | | | — | |
| Balance as of September 30, 2021 | $ | 73 | | | $ | 19 | | | $ | 7 | | | $ | 8 | | | $ | 40 | | | $ | 17 | | | $ | 8 | | | $ | 15 | |
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| Nine Months Ended September 30, 2022 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of December 31, 2021 | $ | 72 | | | $ | 17 | | | $ | 7 | | | $ | 9 | | | $ | 39 | | | $ | 16 | | | $ | 8 | | | $ | 15 | |
| Plus: Current period provision (benefit) for expected credit losses | 24 | | | 5 | | | 6 | | | 6 | | | 7 | | | 6 | | | (1) | | | 2 | |
Less: Write-offs, net of recoveries(a) | 12 | | | 4 | | | 2 | | | 3 | | | 3 | | | — | | | — | | | 3 | |
| Balance as of September 30, 2022 | $ | 84 | | | $ | 18 | | | $ | 11 | | | $ | 12 | | | $ | 43 | | | $ | 22 | | | $ | 7 | | | $ | 14 | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance as of December 31, 2020 | $ | 71 | | | $ | 21 | | | $ | 8 | | | $ | 9 | | | $ | 33 | | | $ | 13 | | | $ | 9 | | | $ | 11 | |
| Plus: Current period provision (benefit) for expected credit losses | 11 | | | — | | | 2 | | | 2 | | | 7 | | | 4 | | | (1) | | | 4 | |
Less: Write-offs, net of recoveries(a) | 9 | | | 2 | | | 3 | | | 3 | | | — | | | — | | | — | | | — | |
| Balance as of September 30, 2021 | $ | 73 | | | $ | 19 | | | $ | 7 | | | $ | 8 | | | $ | 40 | | | $ | 17 | | | $ | 8 | | | $ | 15 | |
__________
(a)Recoveries were not material to the Registrants.
Unbilled Customer Revenue
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 6 — Accounts Receivable
The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets as of September 30, 2022at March 31, 2024 and December 31, 2021.2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unbilled customer revenues(a) |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| September 30, 2022 | $ | 500 | | | $ | 126 | | | $ | 121 | | | $ | 102 | | | $ | 151 | | | $ | 74 | | | $ | 35 | | | $ | 42 | |
| December 31, 2021 | 747 | | | 240 | | | 161 | | | 171 | | | 175 | | | 82 | | | 53 | | | 40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unbilled customer revenues(a) |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| March 31, 2024 | $ | 849 | | | $ | 344 | | | $ | 138 | | | $ | 171 | | | $ | 196 | | | $ | 96 | | | $ | 53 | | | $ | 47 | |
| December 31, 2023 | 991 | | | 351 | | | 185 | | | 208 | | | 247 | | | 109 | | | 64 | | | 74 | |
__________
(a)Unbilled customer revenues are classified in Customer accounts receivables,receivable, net in the Registrants' Consolidated Balance Sheets.
Other Purchases of Customer and Other Accounts Receivables
The Utility Registrants are required, under separate legislation and regulations in Illinois, Pennsylvania, Maryland, District of Columbia, Delaware, and New Jersey, to purchase certain receivables from alternative retail electric and, as applicable, natural gas suppliers that participate in the utilities' consolidated billing. The following table presents the total receivables purchased.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total receivables purchased |
| Exelon(a) | | ComEd | | PECO | | BGE(a) | | PHI | | Pepco | | DPL | | ACE |
| Nine months ended September 30, 2022 | $ | 3,088 | | | $ | 753 | | | $ | 832 | | | $ | 607 | | | $ | 896 | | | $ | 559 | | | $ | 168 | | | $ | 169 | |
| Nine months ended September 30, 2021 | 2,962 | | | 810 | | | 795 | | | 531 | | | 826 | | | 504 | | | 166 | | | 156 | |
__________(a)Includes $4 million of receivables purchased from Generation prior to the separation on February 1, 2022 for the nine months ended September 30, 2022 and $17 million of receivables purchased from Generation for the nine months ended September 30, 2021.
7. Asset Impairments (Exelon and BGE)
Asset Impairment
In the third quarter of 2022, a review of the impacts of COVID-19 on office use resulted in plans to cease the renovation and dispose of an office building at BGE before the asset was placed into service. BGE determined that the carrying value was not recoverable and that its fair value was less than carrying value. As a result, in the third quarter of 2022, a pre-tax impairment charge of $46 million was recorded in Operating and maintenance expense in Exelon’s and BGE’s Consolidated Statements of Operations and Comprehensive Income. The office building did not meet all of the criteria for classification as held for sale as of September 30, 2022, and therefore continues to be reported within Property, plant and equipment in Exelon’s and BGE’s Balance Sheets as of September 30, 2022. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total receivables purchased |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three months ended March 31, 2024 | $ | 1,060 | | | $ | 235 | | | $ | 297 | | | $ | 219 | | | $ | 309 | | | $ | 194 | | | $ | 60 | | | $ | 55 | |
| Three months ended March 31, 2023 | 1,108 | | | 240 | | | 309 | | | 245 | | | 314 | | | 210 | | | 56 | | | 48 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 86 — Income Taxes
8.6. Income Taxes (All Registrants)
Rate Reconciliation
The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:
| | Three Months Ended September 30, 2022(a) | |
| Exelon | | ComEd | | PECO(b) | | BGE(b) | | PHI(b) | | Pepco(b) | | DPL(b) | | ACE(b) | |
| Three Months Ended March 31, 2024(a) | |
| Three Months Ended March 31, 2024(a) | |
| Three Months Ended March 31, 2024(a) | |
| Exelon | |
| Exelon | |
| Exelon | |
| U.S. Federal statutory rate | |
| U.S. Federal statutory rate | |
| U.S. Federal statutory rate | U.S. Federal statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | |
| Increase (decrease) due to: | Increase (decrease) due to: | | |
| State income taxes, net of Federal income tax benefit | 9.0 | | | 8.0 | | | 20.7 | | | 6.8 | | | 1.4 | | | (2.7) | | | 6.5 | | | 7.0 | | |
| Increase (decrease) due to: | |
| Increase (decrease) due to: | |
| State income taxes, net of federal income tax benefit | |
| State income taxes, net of federal income tax benefit | |
| State income taxes, net of federal income tax benefit | |
| Plant basis differences | |
| Plant basis differences | |
| Plant basis differences | Plant basis differences | (5.3) | | | (0.4) | | | (14.2) | | | (2.6) | | | (1.7) | | | (2.3) | | | (0.8) | | | (1.0) | | |
| Excess deferred tax amortization | Excess deferred tax amortization | (11.6) | | | (5.6) | | | (3.2) | | | (47.3) | | | (19.3) | | | (14.6) | | | (21.7) | | | (25.5) | | |
| Excess deferred tax amortization | |
| Excess deferred tax amortization | |
| Amortization of investment tax credit, including deferred taxes on basis difference | |
| Amortization of investment tax credit, including deferred taxes on basis difference | |
| Amortization of investment tax credit, including deferred taxes on basis difference | Amortization of investment tax credit, including deferred taxes on basis difference | (0.1) | | | (0.1) | | | — | | | (0.2) | | | (0.1) | | | — | | | (0.2) | | | (0.2) | | |
| Tax credits | Tax credits | (0.6) | | | (0.4) | | | — | | | (1.9) | | | (0.9) | | | (0.8) | | | (1.3) | | | (0.7) | | |
| Tax credits | |
| Tax credits | |
| Other | |
| Other | |
| Other | Other | (0.4) | | | (0.1) | | | 0.3 | | | (2.7) | | | 0.3 | | | 0.1 | | | 0.2 | | | 0.5 | | |
| Effective income tax rate | Effective income tax rate | 12.0 | % | | 22.4 | % | | 24.6 | % | | (26.9) | % | | 0.7 | % | | 0.7 | % | | 3.7 | % | | 1.1 | % | |
| Effective income tax rate | |
| Effective income tax rate | |
| | Three Months Ended September 30, 2021(a) |
| Exelon | | ComEd | | PECO(c) | | BGE(c) | | PHI | | Pepco | | DPL | | ACE(c) |
| Three Months Ended March 31, 2023(a) | | | Three Months Ended March 31, 2023(a) |
| Exelon | | | Exelon | | ComEd | | PECO(c) | | BGE | | PHI | | Pepco | | DPL | | ACE |
| U.S. Federal statutory rate | U.S. Federal statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | U.S. Federal statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % |
| Increase (decrease) due to: | Increase (decrease) due to: | |
| State income taxes, net of Federal income tax benefit | 7.1 | | | 8.0 | | | (4.1) | | | (13.0) | | | 5.0 | | | 3.4 | | | 6.4 | | | 7.0 | |
| State income taxes, net of federal income tax benefit | |
| State income taxes, net of federal income tax benefit | |
| State income taxes, net of federal income tax benefit | |
| Plant basis differences | Plant basis differences | (4.7) | | | (0.8) | | | (16.2) | | | (1.4) | | | (1.3) | | | (2.0) | | | (0.6) | | | (0.6) | |
| Excess deferred tax amortization | Excess deferred tax amortization | (15.5) | | | (7.6) | | | (3.4) | | | (17.3) | | | (24.9) | | | (17.6) | | | (19.9) | | | (41.4) | |
| Amortization of investment tax credit, including deferred taxes on basis difference | Amortization of investment tax credit, including deferred taxes on basis difference | (0.1) | | | (0.1) | | | — | | | (0.1) | | | (0.1) | | | — | | | (0.2) | | | (0.2) | |
| Tax credits | Tax credits | (0.6) | | | (0.5) | | | — | | | (0.9) | | | (0.5) | | | (0.5) | | | (0.4) | | | (0.5) | |
| Other | Other | (0.1) | | | 0.3 | | | (0.1) | | | (0.8) | | | — | | | 0.1 | | | (0.6) | | | 0.8 | |
| Effective income tax rate | Effective income tax rate | 7.1 | % | | 20.3 | % | | (2.8) | % | | (12.5) | % | | (0.8) | % | | 4.4 | % | | 5.7 | % | | (13.9) | % | Effective income tax rate | 16.7 | % | | 22.8 | % | | 2.4 | % | | 20.6 | % | | 18.0 | % | | 15.6 | % | | 16.7 | % | | 25.0 | % |
__________
(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.
(b)For PECO,ComEd, the higherlower effective tax rate is relatedprimarily due to a one-time state income expense, netCEJA which resulted in the acceleration of federalcertain income tax benefit, of $38 million attributablebenefits. For BGE, the lower effective tax rate is primarily due to the changeMaryland multi-year plan which resulted in the Pennsylvania corporateacceleration of certain income tax rate partially offset by plant basis differences attributable to tax repair deductions. benefits.
(c)For BGE, PHI, Pepco, DPL, and ACE,PECO, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to distribution and transmission rate case settlements.
(c)For PECO, the income tax benefit is primarily due to plant basis differences attributable to tax repair deductions. For BGE and ACE, the income tax benefit is primarily related to the acceleration of certain income tax benefits due to distribution rate case settlements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 86 — Income Taxes
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022(a) | |
| Exelon | | ComEd | | PECO(b) | | BGE(b) | | PHI(b) | | Pepco(b) | | DPL(b) | | ACE(b) | |
| U.S. Federal statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | |
| Increase (decrease) due to: | | | | | | | | | | | | | | | | |
State income taxes, net of Federal income tax benefit(c) | 9.5 | | | 7.9 | | | 6.6 | | | 2.8 | | | 2.0 | | | (3.2) | | | 6.5 | | | 6.9 | | |
| Plant basis differences | (4.2) | | | (0.5) | | | (12.2) | | | (1.1) | | | (1.7) | | | (2.4) | | | (0.7) | | | (1.1) | | |
| Excess deferred tax amortization | (11.3) | | | (5.7) | | | (3.2) | | | (20.7) | | | (18.8) | | | (15.4) | | | (20.4) | | | (24.7) | | |
| Amortization of investment tax credit, including deferred taxes on basis difference | (0.1) | | | (0.1) | | | — | | | (0.1) | | | (0.1) | | | — | | | (0.2) | | | (0.2) | | |
Tax credits(d) | 0.3 | | | (0.3) | | | — | | | (0.7) | | | (0.7) | | | (0.6) | | | (0.7) | | | (0.6) | | |
Other(e) | 2.8 | | | — | | | 0.2 | | | (0.1) | | | 0.2 | | | (0.2) | | | 0.3 | | | 0.2 | | |
| Effective income tax rate | 18.0 | % | | 22.3 | % | | 12.4 | % | | 1.1 | % | | 1.9 | % | | (0.8) | % | | 5.8 | % | | 1.5 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021(a) |
| Exelon | | ComEd | | PECO(f) | | BGE(f) | | PHI | | Pepco | | DPL | | ACE(f) |
| U.S. Federal statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % | | 21.0 | % |
| Increase (decrease) due to: | | | | | | | | | | | | | | | |
| State income taxes, net of Federal income tax benefit | 3.8 | | | 7.6 | | | (2.6) | | | (10.8) | | | 4.6 | | | 2.5 | | | 6.5 | | | 7.3 | |
| Plant basis differences | (4.0) | | | (0.7) | | | (12.6) | | | (1.5) | | | (1.3) | | | (1.9) | | | (0.7) | | | (0.6) | |
| Excess deferred tax amortization | (13.5) | | | (7.2) | | | (3.3) | | | (16.0) | | | (22.8) | | | (17.4) | | | (19.7) | | | (36.3) | |
| Amortization of investment tax credit, including deferred taxes on basis difference | (0.1) | | | (0.1) | | | — | | | (0.1) | | | (0.1) | | | — | | | (0.2) | | | (0.2) | |
| Tax credits | (0.6) | | | (0.5) | | | — | | | (0.9) | | | (0.5) | | | (0.5) | | | (0.4) | | | (0.5) | |
| Other | (1.1) | | | (1.3) | | | (0.2) | | | (0.7) | | | (0.3) | | | (0.4) | | | (0.2) | | | — | |
| Effective income tax rate | 5.5 | % | | 18.8 | % | | 2.3 | % | | (9.0) | % | | 0.6 | % | | 3.3 | % | | 6.3 | % | | (9.3) | % |
__________
(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.
(b)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions partially offset by higher state income taxes, net of federal income tax benefit, related to a one-time expense of $38 million attributable to the change in the Pennsylvania corporate income tax rate. For BGE, PHI, Pepco, DPL and ACE, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to distribution and transmission rate case settlements.
(c)For Exelon, the higher state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of $67 million and the recognition of a valuation allowance of $40 million against the net deferred tax asset position for certain standalone state filing jurisdictions, partially offset by a one-time impact associated with a state tax benefit of $43 million and indemnification adjustments pursuant to the Tax Matters Agreement of $4 million as a result of the separation. For PECO, the higher state income taxes, net of federal income tax benefit, related to a one-time expense of $38 million attributable to the change in the Pennsylvania corporate income tax rate.
(d)For Exelon, reflects the income tax expense related to the write-off of federal tax credits subject to recapture of $15 million as a result of the separation.
(e)For Exelon, primarily reflects the nondeductible transaction costs of approximately $19 million arising as part of the separation and indemnification adjustments pursuant to the Tax Matters Agreement of $40 million.
(f)For PECO, the lower effective tax rate is primarily due to plant basis differences attributable to tax repair deductions. For BGE and ACE, the income tax benefit is primarily related to the acceleration of certain income tax benefits due to distribution rate case settlements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 8 — Income Taxes
Unrecognized Tax Benefits
Exelon, PHI and ACE have the following unrecognized tax benefits as of September 30, 2022at March 31, 2024 and December 31, 2021.2023. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.
| | | | | | | | | | | | | | | | | | | |
| Exelon(a) | | | | PHI | | ACE |
| September 30, 2022 | $ | 148 | | | | | $ | 59 | | | $ | 17 | |
| December 31, 2021 | 143 | | | | | 56 | | | 16 | |
| | | | | | | | | | | | | | | | | | | |
| Exelon(a) | | | | PHI | | ACE |
| March 31, 2024 | $ | 95 | | | | | $ | 51 | | | $ | 15 | |
| December 31, 2023 | 94 | | | | | 51 | | | 15 | |
__________(a)AsAt March 31, 2024 and December 31, 2023, Exelon's unrecognized tax benefits is inclusive of September 30, 2022, Exelon recorded a receivable of $50$31 million in Noncurrent other assets in the Consolidated Balance Sheet for Constellation’srelated to Constellation's share of unrecognized tax benefits for periods prior to the separation.
Reasonably possible Exelon reflected an offsetting receivable of $31 million in Other deferred debits and other assets in the total amount of unrecognized tax benefits could significantly increase or decrease within 12 months after the reporting date
As of September 30, 2022, ACE has $14 million of unrecognized state tax benefits that could significantly decrease within the 12 months after the reporting date based on the outcome of pending court cases involving other taxpayers. The unrecognized tax benefit, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.Consolidated Balance Sheet for these amounts.
Other Tax Matters
Separation (Exelon)
In the first quarter of 2022, in connection with the separation, Exelon recorded an income tax expense related to continuing operations of $148 million primarily due to the long-term marginal state income tax rate change of $67 million discussed further below, the recognition of valuation allowances of approximately $40 million against the net deferred tax assets positions for certain standalone state filing jurisdictions, the write-off of federal and state tax credits subject to recapture of $17 million, and nondeductible transaction costs for federal and state taxes of $24 million.
Tax Matters Agreement (Exelon)
In connection with the separation, Exelon entered into a TMA with Constellation. The TMA governs the respective rights, responsibilities, and obligations between Exelon and Constellation after the separation with respect to tax liabilities, refunds and attributes for open tax years that Constellation was part of Exelon’s consolidated group for U.S. federal, state, and local tax purposes.
Indemnification for Taxes. As a former subsidiary of Exelon, Constellation has joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods prior to the separation. The TMA specifies that Constellation is liable for their share of taxes required to be paid by Exelon with respect to taxable periods prior to the separation to the extent Constellation would have been responsible for such taxes under the existing Exelon tax sharing agreement. As a result, Exelon recorded a receivable of $55 million in Current other assets in the Consolidated Balance Sheet for Constellation’s share of taxes for periods prior to the separation, as of March 31, 2022. As of September 30, 2022, the remaining amount of the receivable is $55 million.
Tax Refunds. The TMA specifies that Constellation is entitled to their share of any future tax refunds claimed by Exelon with respect to taxable periods prior to the separation to the extent that Constellation would have received such tax refunds under the existing Exelon tax sharing agreement.
Tax Attributes. At the date of separation certain tax attributes, primarily pre-closing tax credit carryforwards, that were generated by Constellation were required by law to be allocated to Exelon. The TMA provides that Exelon will reimburse Constellation when those allocated tax credit carryforwards are utilized. As of March 31, 2022,2024, Exelon recorded a payable of $11$183 million and $484$331 million in Current otherOther current liabilities and NoncurrentOther deferred credits and other liabilities, respectively, in the Consolidated Balance Sheet for tax creditattribute carryforwards that are expected to be utilized and reimbursed to Constellation. As of September 30, 2022, the current and noncurrent payable amounts are $102 million and $392 million, respectively.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 8 — Income Taxes
Long-Term Marginal State IncomeCorporate Alternative Minimum Tax Rate (All Registrants)
In the first quarter of 2022, Exelon updated its marginal state income tax rates for changes in state apportionment due to the separation, which resulted in an increase of $67 million to the deferred tax liability at Exelon, and a corresponding adjustment to income tax expense, net of federal taxes.
Pennsylvania Corporate Income Tax Rate Change (Exelon and PECO)
On July 8, 2022, Pennsylvania enacted House Bill 1342, which will permanently reduce the corporate income tax rate from 9.99% to 4.99%. The tax rate will be reduced to 8.99% for the 2023 tax year. Starting with the 2024 tax year, the rate is reduced by 0.50% annually until it reaches 4.99% in 2031. As a result of the rate change, in the third quarter of 2022, Exelon and PECO recorded a one-time decrease to deferred income taxes of $390 million with a corresponding decrease to the deferred income taxes regulatory asset of $428 million for the amounts that are expected to be settled through future customer rates and an increase to income tax expense of $38 million (net of federal taxes). The tax rate decrease is not expected to have a material ongoing impact to Exelon’s and PECO’s financial statements.
Allocation of Tax Benefits (All Registrants)
The Utility Registrants are party to an agreement with Exelon that provides for the allocation of consolidated tax liabilities and benefits (Tax Sharing Agreement). The Tax Sharing Agreement provides that each party is allocated an amount of tax similar to that which would be owed had the party been separately subject to tax. In addition, any net benefit attributable to Exelon is reallocated to the Utility Registrants. That allocation is treated as a contribution to capital from Exelon to the party receiving the benefit.
The following table presents the allocation of tax benefits from Exelon under the Tax Sharing Agreement, for the nine months ended September 30, 2022 and 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| September 30, 2022 | | $ | 1 | | | $ | 47 | | | $ | — | | | $ | 28 | | | $ | 23 | | | $ | 3 | | | $ | 2 | |
| September 30, 2021 | | 1 | | | 19 | | | — | | | 17 | | | 16 | | | — | | | — | |
Inflation Reduction Act (Exelon)
On August 16, 2022, the Inflation Reduction Act (IRA)IRA was signed into law. The bill extends tax benefits for renewable technologies like solarlaw and wind, creates new tax benefits for alternative clean energy sources like nuclear and hydrogen and it focuses on energy efficiency, electrification, and equity. However, the bill also implements a new 15.0% corporate alternative minimum tax based(CAMT) that imposes a 15.0% tax on adjustedmodified GAAP net income. Corporations are entitled to a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax exceeds the CAMT.
Beginning in 2023, based on the existing statue, Exelon estimatesand each of the IRA could resultUtility Registrants will be subject to and will report the CAMT on a separate Registrant basis in an increase in cash taxesthe Consolidated Statements of Operations and Comprehensive Income and the Consolidated Balance Sheets. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent Exelon’s consolidated deferred tax liabilities exceed the minimum tax credit carryforward. Exelon’s deferred tax liabilities are expected to exceed the minimum tax credit carryforward for Exelon of approximately $200 million per year starting in 2023.the foreseeable future and thus no valuation allowance is required. Exelon is continuing to assess the financial statement impacts of the IRA on the financial statements and will update estimates based on future guidance to be issued by the U.S. Treasury and IRS in the future.Treasury.
9.7. Retirement Benefits (All Registrants)
Defined Benefit Pension and OPEB
Effective February 1, 2022, in connection with the separation, pension and OPEB obligations and assets for current and former employees of the Constellation business and certain other former employees of Exelon and its subsidiaries transferred to pension and OPEB plans and trusts maintained by Constellation or its subsidiaries. The Exelon New England Union Employees Pension Plan and Constellation Mystic Power, LLC Union Employees Pension Plan Including Plan A and Plan B were transferred. The following OPEB plans were also transferred: Constellation Mystic Power, LLC Post-Employment Medical Savings Account Plan, Exelon New England Union Post-Employment Medical Savings Account Plan, and the Nine Mile Point Nuclear Station, LLC Medical Care and Prescription Drug Plan for Retired Employees.
As a result of the separation, Exelon restructured certain of its qualified pension plans. Pension obligations and assets for current and former employees continuing with Exelon and who were participants in the Exelon Employee Pension Plan for Clinton, TMI, and Oyster Creek, Pension Plan of Constellation Energy Nuclear
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 97 — Retirement Benefits
Group, LLC, and Nine Mile Point Pension Plan were merged into the Pension Plan of Constellation Energy Group, Inc, which was subsequently renamed, Exelon Pension Plan (EPP). Exelon employees who participated in these plans prior to the separation now participate in the EPP. The merging of the plans did not change the benefits offered to the plan participants and, thus, had no impact on Exelon's pension obligations.
The tables below show the pension and OPEB plans in which employees of each operating company participated as of September 30, 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Operating Company(a)
|
Name of Plan: | | | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
Qualified Pension Plans: | | | | | | | | | | | | | | | | |
Exelon Corporation Retirement Program | | | | X | | X | | X | | X | | X | | X | | X |
Exelon Corporation Pension Plan for Bargaining Unit Employees | | | | X | | | | | | | | | | | | |
Exelon Pension Plan | | | | X | | X | | X | | X | | X | | X | | X |
Pepco Holdings LLC Retirement Plan | | | | X | | X | | X | | X | | X | | X | | X |
Non-Qualified Pension Plans: | | | | | | | | | | | | | | | | |
Exelon Corporation Supplemental Pension Benefit Plan and 2000 Excess Benefit Plan | | | | X | | X | | | | X | | | | | | |
Exelon Corporation Supplemental Management Retirement Plan | | | | X | | X | | X | | X | | | | X | | |
Constellation Energy Group, Inc. Senior Executive Supplemental Plan | | | | | | | | X | | X | | | | | | |
Constellation Energy Group, Inc. Supplemental Pension Plan | | | | | | | | X | | X | | | | | | |
Constellation Energy Group, Inc. Benefits Restoration Plan | | | | | | X | | X | | X | | | | | | |
Baltimore Gas & Electric Company Executive Benefit Plan | | | | | | | | X | | | | | | | | |
Baltimore Gas & Electric Company Manager Benefit Plan | | | | | | X | | X | | | | | | | | |
Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan | | | | | | | | | | X | | X | | X | | X |
Conectiv Supplemental Executive Retirement Plan | | | | | | | | | | X | | | | X | | X |
Pepco Holdings LLC Combined Executive Retirement Plan | | | | | | | | | | X | | X | | | | |
Atlantic City Electric Director Retirement Plan | | | | | | | | | | X | | | | | | X |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 9 — Retirement Benefits
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Operating Company(a)
|
Name of Plan: | | | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
OPEB Plans: | | | | | | | | | | | | | | | | |
PECO Energy Company Retiree Medical Plan | | | | X | | X | | X | | X | | X | | X | | X |
Exelon Corporation Health Care Program | | | | X | | X | | X | | X | | X | | X | | X |
Exelon Corporation Employees’ Life Insurance Plan | | | | X | | X | | X | | | | | | | | |
Exelon Corporation Health Reimbursement Arrangement Plan | | | | X | | X | | X | | | | | | | | |
BGE Retiree Medical Plan | | | | X | | X | | X | | X | | X | | X | | |
BGE Retiree Dental Plan | | | | | | | | X | | | | | | | | |
Exelon Retiree Medical Plan of Constellation Energy Nuclear Group, LLC | | | | X | | | | X | | X | | | | | | |
Exelon Retiree Dental Plan of Constellation Energy Nuclear Group, LLC | | | | X | | | | X | | X | | | | | | |
Pepco Holdings LLC Welfare Plan for Retirees | | | | X | | X | | X | | X | | X | | X | | X |
__________
(a)Employees generally remain in their legacy benefit plans when transferring between operating companies.
As of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. The remeasurement and separation resulted in a decrease to the pension obligation, net of plan assets, of $921 million and a decrease to the OPEB obligation of $893 million. Additionally, accumulated other comprehensive loss, decreased by $1,994 million (after-tax) and regulatory assets and liabilities increased by $14 million and $5 million respectively. Key assumptions were held consistent with the year end December 31, 2021 assumptions with the exception of the discount rate.
The majority of the 20222024 pension benefit cost for the Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 3.24%5.19%. The majority of the 20222024 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.44%6.50% for funded plans and a discount rate of 3.20%5.17%.
During the first quarter of 2022,2024, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of FebruaryJanuary 1, 2022.2024. This valuation resulted in a decreasean increase to the pension obligation of $24$98 million and an increasea decrease to the OPEB obligation of $5$1 million. Additionally, accumulated other comprehensive lossAOCI increased by $5$25 million (after-tax) and regulatory assets and liabilities decreasedincreased by $30$66 million and $3$2 million, respectively.
A portion of the net periodic benefit cost for all plans is capitalized within the Consolidated Balance Sheets. The following table presents the components of Exelon's net periodic benefit costs, prior to capitalization, for the three and nine months ended September 30, 2022March 31, 2024 and 2021.2023.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 9 — Retirement Benefits
| | | Pension Benefits | | OPEB | |
| | Three Months Ended September 30, | | Three Months Ended September 30, | |
| | 2022 | | 2021 | | 2022 | | 2021 | |
| Components of net periodic benefit cost: | | | | | | | | |
| | Pension Benefits | |
| | Pension Benefits | |
| | Pension Benefits | | | OPEB |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
| 2024 | | | 2024 | | 2023 | | 2024 | | 2023 |
| Components of net periodic benefit cost | |
| Service cost | |
| Service cost | |
| Service cost | Service cost | $ | 58 | | | $ | 74 | | | $ | 10 | | | $ | 13 | | |
| Interest cost | Interest cost | 110 | | | 102 | | | 19 | | | 18 | | |
| Expected return on assets | Expected return on assets | (205) | | | (212) | | | (25) | | | (26) | | |
| Amortization of: | Amortization of: | | |
| Prior service cost (credit) | Prior service cost (credit) | 1 | | | 1 | | | (5) | | | (6) | | |
| Prior service cost (credit) | |
| Prior service cost (credit) | |
| Actuarial loss | Actuarial loss | 73 | | | 100 | | | 4 | | | 7 | | |
| | Settlement charges | — | | | 2 | | | — | | | — | | |
| | Net periodic benefit cost | Net periodic benefit cost | $ | 37 | | | $ | 67 | | | $ | 3 | | | $ | 6 | | |
| | Net periodic benefit cost | |
| | Pension Benefits | | OPEB | |
| Nine Months Ended September 30, | | Nine Months Ended September 30, | |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Components of net periodic benefit cost: | | | | | | | | |
| Service cost | $ | 177 | | | $ | 222 | | | $ | 30 | | | $ | 38 | | |
| Interest cost | 330 | | | 304 | | | 57 | | | 52 | | |
| Expected return on assets | (619) | | | (633) | | | (75) | | | (75) | | |
| Amortization of: | | |
| Prior service cost (credit) | 3 | | | 3 | | | (15) | | | (18) | | |
| Actuarial loss | 222 | | | 299 | | | 12 | | | 19 | | |
| Curtailment benefits | — | | | — | | | — | | | (1) | | |
| Settlement charges | — | | | 2 | | | — | | | — | | |
| Net periodic benefit cost | Net periodic benefit cost | $ | 113 | | | $ | 197 | | | $ | 9 | | | $ | 15 | | |
The amounts below represent the Registrants' allocated pension and OPEB costs. For Exelon, the service cost component is included in Operating and maintenance expense and Property, plant, and equipment, net while the non-service cost components are included in Other, net and Regulatory assets. For the Utility Registrants, which apply multi-employer accounting, the service cost and non-service cost components are included in Operating and maintenance expense and Property, plant, and equipment, net in their consolidated financial statements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 97 — Retirement Benefits
| | | |
| | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | | Three Months Ended March 31, |
| Pension and OPEB Costs (Benefit) | Pension and OPEB Costs (Benefit) | | 2022 | | 2021 | | 2022 | | 2021 | Pension and OPEB Costs (Benefit) | | | | | | 2024 | | 2023 |
| Exelon | Exelon | | $ | 40 | | | $ | 73 | | | $ | 122 | | | $ | 212 | |
| ComEd | ComEd | | 15 | | | 32 | | | 45 | | | 97 | |
| PECO | PECO | | (2) | | | 2 | | | (6) | | | 5 | |
| BGE | BGE | | 11 | | | 16 | | | 33 | | | 47 | |
| PHI | PHI | | 13 | | | 12 | | | 39 | | | 36 | |
| Pepco | Pepco | | 2 | | | 2 | | | 6 | | | 5 | |
| DPL | DPL | | 1 | | | 1 | | | 3 | | | 2 | |
| ACE | ACE | | 3 | | | 3 | | | 9 | | | 8 | |
Defined Contribution Savings Plan
The Registrants participate in a 401(k) defined contribution savings plan that is sponsored by Exelon. The plan is qualified under applicable sections of the IRC and allows employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents the employer contributions and employer matching contributions to the savings plan for the three and nine months ended September 30, 2022March 31, 2024 and 2021.2023.
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | | Three Months Ended March 31, | |
| | | | Three Months Ended March 31, | |
| | | | Three Months Ended March 31, | |
| Savings Plan Employer Contributions | Savings Plan Employer Contributions | | 2022 | | 2021 | | 2022 | | 2021 | Savings Plan Employer Contributions | | | | | | 2024 | | 2023 |
| Exelon | Exelon | | $ | 23 | | | $ | 24 | | | $ | 66 | | | $ | 67 | |
| ComEd | ComEd | | 11 | | | 9 | | | 29 | | | 27 | |
| PECO | PECO | | 3 | | | 2 | | | 9 | | | 8 | |
| BGE | BGE | | 2 | | | 4 | | | 7 | | | 8 | |
| PHI | PHI | | 4 | | | 5 | | | 11 | | | 12 | |
| Pepco | Pepco | | 1 | | | 1 | | | 3 | | | 3 | |
| DPL | DPL | | 1 | | | 1 | | | 3 | | | 3 | |
| ACE | ACE | | 1 | | | 1 | | | 2 | | | 2 | |
10.8. Derivative Financial Instruments (All Registrants)
The Registrants use derivative instruments to manage commodity price risk and interest rate risk related to ongoing business operations. The Registrants do not execute derivatives for speculative or proprietary trading purposes.
Authoritative guidance requires that derivative instruments be recognized as either assets or liabilities at fair value, with changes in fair value of the derivative recognized in earnings immediately. Other accounting treatments are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis. These alternative permissible accounting treatments include NPNS, cash flow hedges, and fair value hedges. At ComEd, derivative economic hedges related to commodities are recorded at fair value and offset by a corresponding regulatory asset or liability. At Exelon, derivative economic hedges related to interest rates are recorded at fair value and offsets are recorded to Electric operating revenues or Interest expense based on the activity the transaction is economically hedging. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivatives settle and revenue or expense is recognized in earnings as the underlying physical commodity is sold or consumed. At Exelon, derivative hedges that qualify and are designated as cash flow hedges are recorded at fair value and offsets are recorded to AOCI.
ComEd’s use of cash collateral is generally unrestricted unless ComEd is downgraded below investment grade. Cash collateral held by PECO, BGE, Pepco, DPL, and ACE must be deposited in an unaffiliated major U.S. commercial bank or foreign bank with a U.S. branch office that meets certain qualifications.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 8 — Derivative Financial Instruments
Commodity Price Risk
The Utility Registrants employ established policies and procedures to manage their risks associated with market fluctuations in commodity prices by entering into physical and financial derivative contracts, which are either determined to be non-derivative or classified as economic hedges. The Utility Registrants procure electric and natural gas supply through a competitive procurement process approved by each of the respective state utility commissions. The Utility Registrants’ hedging programs are intended to reduce exposure to energy and natural
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 10 — Derivative Financial Instruments
gas price volatility and have no direct earnings impact as the costs are fully recovered from customers through regulatory-approved recovery mechanisms. The following table provides a summary of the Utility Registrants’ primary derivative hedging instruments, listed by commodity and accounting treatment.
| | | | | | | | | | | |
| Registrant | Commodity | Accounting Treatment | Hedging Instrument |
| ComEd | Electricity | NPNS | Fixed price contracts based on all requirements in the IPA procurement plans. |
| Electricity | Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(a) | 20-year floating-to-fixed energy swap contracts beginning June 2012 based on the renewable energy resource procurement requirements in the Illinois Settlement Legislation of approximately 1.3 million MWhs per year. |
| PECO | Electricity | NPNS | Fixed price contracts for default supply requirements through full requirements contracts. |
| Gas | NPNS | Fixed price contracts to cover about 10% of planned natural gas purchases in support of projected firm sales. |
| BGE | Electricity | NPNS | Fixed price contracts for all SOS requirements through full requirements contracts. |
| Gas | NPNS | Fixed price contracts for between 10-20% of forecasted system supply requirements for flowing (i.e., non-storage) gas for the November through March period. |
| Pepco | Electricity | NPNS | Fixed price contracts for all SOS requirements through full requirements contracts. |
| DPL | Electricity | NPNS | Fixed price contracts for all SOS requirements through full requirements contracts. |
| Gas | NPNS | Fixed and index priced contracts through full requirements contracts. |
| Gas | Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(b) | Exchange traded future contracts for up to 50% of estimated monthly purchase requirements each month, including purchases for storage injections. |
| ACE | Electricity | NPNS | Fixed price contracts for all BGS requirements through full requirements contracts. |
__________
(a)See Note 3 — Regulatory Matters of the 2021 Recast2023 Form 10-K for additional information.
(b)The fair value of the DPL economic hedge is not material as of September 30, 2022at March 31, 2024 and December 31, 2021.2023.
The fair value of derivative economic hedges is presented in Other current assets and current and noncurrent Mark-to-market derivative liabilities in Exelon's and ComEd's Consolidated Balance Sheets. The Mark-to-market derivative assets included in
Interest Rate and Other current assets in Exelon’s and ComEd’s Consolidated Balance Sheets were $24 million and none as of September 30, 2022 and December 31, 2021, respectively.
Cash Flow Hedges (Interest Rate Risk)Risk (Exelon)
Exelon Corporate uses a combination of fixed-rate and variable-rate debt to manage interest rate exposure. In addition, Exelon Corporate may utilize interest rate derivatives to lock in rate levels in anticipation of future financings.financings, which are typically designated as cash flow hedges. In October 2022,addition, Exelon entered into $840 million of notional amount floating-to-fixed forward startingCorporate utilized interest rate swaps to manage a portion of interest rate exposure and manage potential fluctuations in Electric operating revenues at the corporate level in consolidation. These interest rate swaps are accounted for as economic hedges. A hypothetical 50 basis point change in the interest rates associated with anticipated debt issuances. TheExelon's interest rate swaps are designated as cash flow hedges. Changesof March 31, 2024 would result in fair value each period will initially be recorded in AOCI starting in the fourth quarter of 2022 and recognized in earnings as interest expense is accrued on the anticipated debt issuance.
Economic Hedges (Interest Rate Risk) (Exelon)an immaterial impact to Exelon's Consolidated Net Income.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 108 — Derivative Financial Instruments
Below is a summary of the interest rate hedge balances at March 31, 2024 and December 31, 2023.
| | | | | | | | | | | | | | | | | |
| March 31, 2024 |
| Derivatives Designated
as Hedging Instruments | | Economic Hedges | | Total |
| | | | | |
| Other deferred debits (noncurrent assets) | $ | 2 | | | $ | — | | | $ | 2 | |
| Total derivative assets | 2 | | | — | | | 2 | |
| | | | | |
| Mark-to-market derivative liabilities (noncurrent liabilities) | (1) | | | — | | | (1) | |
| Total mark-to-market derivative liabilities | (1) | | | — | | | (1) | |
| Total mark-to-market derivative net assets | $ | 1 | | | $ | — | | | $ | 1 | |
| | | | | | | | | | | | | | | | | |
| December 31, 2023 |
| Derivatives Designated
as Hedging Instruments | | Economic Hedges | | Total |
| Other current assets | $ | 11 | | | $ | 1 | | | $ | 12 | |
| | | | | |
| Total derivative assets | 11 | | | 1 | | | 12 | |
| Mark-to-market derivative liabilities (current liabilities) | (24) | | | (22) | | | (46) | |
| | | | | |
| Total mark-to-market derivative liabilities | (24) | | | (22) | | | (46) | |
| Total mark-to-market derivative net assets | $ | (13) | | | $ | (21) | | | $ | (34) | |
Cash Flow Hedges (Interest Rate Risk)
For derivative instruments that qualify and are designated as cash flow hedges, the changes in fair value each period are initially recorded in AOCI and reclassified into earnings when the underlying transaction affects earnings.
In February 2024, Exelon may useterminated the previously issued floating-to-fixed swaps with a total notional of $1.3 billion upon issuance of $1.7 billion of debt. See Note 9 – Debt and Credit Agreements for additional information on the debt issuance. Prior to the termination, the 2024 year-to-date AOCI derivative gain was $33 million (net of tax). The settlements resulted in a cash receipt of $30 million. The accumulated AOCI gain of $23 million (net of tax) is being amortized into Interest expense in Exelon's Consolidated Statement of Operations and Comprehensive Income over the 5-year and 10-year terms of the swaps. During the first quarter of 2024, Exelon Corporate entered into $145 million notional of 5-year maturity floating-to-fixed swaps and $145 million notional of 10-year maturity floating-to-fixed swaps, for a total notional of $290 million designated as cash flow hedges. The following table provides the notional amounts outstanding held by Exelon at March 31, 2024 and December 31, 2023.
| | | | | | | | | | | | | | | | | | |
| | March 31, 2024 | | December 31, 2023 | | | | |
| 5-year maturity floating-to-fixed swaps | | $ | 145 | | | $ | 655 | | | | | |
| 10-year maturity floating-to-fixed swaps | | 145 | | | 655 | | | | | |
| Total | | $ | 290 | | | $ | 1,310 | | | | | |
The related AOCI derivative gains for the three months ended March 31, 2024 and 2023were immaterial, respectively. See Note 13 – Changes in Accumulated Other Comprehensive Income (Loss) for additional information.
Economic Hedges (Interest Rate and Other Risk)
Exelon Corporate executes derivative instruments to mitigate exposure to fluctuations in interest rates but for which the fair value or cash flow hedge elections arewere not made. In October 2022, For derivatives intended to serve as economic hedges, fair value is recorded on the balance sheet and changes in fair value each period are recognized in earnings or as a regulatory asset or liability, if regulatory requirements are met, each period.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 8 — Derivative Financial Instruments
Exelon Corporate entered into $1,850 million of notional amount floating-to-fixed interest rate cap swaps to manage a portion of interest rate exposure in connection with existing borrowings. As of December 31, 2023, Exelon held $1,000 million notional of floating-to-fixed interest rate cap swaps, which matured in March 2024. Exelon received payments on the interest rate cap when the floating rate exceeded the fixed rate. Settlements received are immaterial as of March 31, 2024.
Additionally, to manage potential fluctuations in Electric operating revenues related to ComEd's distribution formula rate, Exelon Corporate entered into a total $4,875 million of notional of 30-year constant maturity treasury interest rate (Corporate 30-year treasury) swaps from 2022 through 2023. The Corporate 30-year treasury swaps matured on December 31, 2023 and Exelon recorded a Mark-to-market liability of $22 million for the final settlement amount, which was paid in January 2024.
Exelon Corporate recognized the following net pre-tax mark-to-market (losses) which are not designated as cash flow hedges. As economic hedges, changesalso recognized in Net fair value each period will be recognizedchanges related to derivatives in earnings starting in the fourth quarterExelon's Consolidated Statements of 2022.Cash Flows.
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2024 | | Three Months Ended March 31, 2023 | | | | |
| Income Statement Location | Gain (Loss) | | Gain (Loss) | | | | |
| Electric operating revenues | $ | — | | | $ | 1 | | | | | |
| Interest expense | — | | | (1) | | | | | |
| Total | $ | — | | | $ | — | | | | | |
Credit Risk
The Registrants would be exposed to credit-related losses in the event of non-performance by counterparties on executed derivative instruments. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. The Utility Registrants have contracts to procure electric and natural gas supply that provide suppliers with a certain amount of unsecured credit. If the exposure on the supply contract exceeds the amount of unsecured credit, the suppliers may be required to post collateral. The net credit exposure is mitigated primarily by the ability to recover procurement costs through customer rates. As of September 30, 2022, the amount of cash collateral held with external counterparties by Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE was $505 million, $95 million, $129 million, $279 million, $48 million, $157 million, and $74 million, respectively, which is recorded in Other current liabilities in Exelon's, ComEd's, BGE's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheets. The amount of cash collateral received from external counterparties increasedremained relatively consistent as of September 30, 2022March 31, 2024 due to risingstable energy prices. The amount for PECO was not materialfollowing table reflects the Registrants' cash collateral held from external counterparties, which is recorded in Other current liabilities on their respective Consolidated Balance Sheets, as of September 30, 2022. As ofMarch 31, 2024 and December 31, 2021, the amounts for ComEd2023:
| | | | | | | | | | | | | | | | | | |
| | March 31, 2024 | | December 31, 2023 | | | | |
| Exelon | | $ | 156 | | | $ | 148 | | | | | |
| ComEd | | 154 | | | 146 | | | | | |
PECO(a) | | — | | | — | | | | | |
| BGE | | 1 | | | 1 | | | | | |
| PHI | | 1 | | | 1 | | | | | |
Pepco(b) | | — | | | 1 | | | | | |
| DPL | | 1 | | | — | | | | | |
| ACE | | 1 | | | — | | | | | |
__________
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 8 — Derivative Financial Instruments
(a)PECO had less than one million in cash collateral held with external parties at March 31, 2024 and DPL were $41 million and $43 million, respectively. The amounts for Exelon, PECO, BGE, PHI, Pepco, and ACE were not material as of December 31, 2021.2023.
(b)Pepco had less than one million in cash collateral held with external parties at March 31, 2024.
The Utility Registrants’ electric supply procurement contracts do not contain provisions that would require them to post collateral. PECO’s, BGE’s, and DPL’s natural gas procurement contracts contain provisions that could require PECO, BGE, and DPL to post collateral in the form of cash or credit support, which vary by contract and counterparty, with thresholds contingent upon PECO’s, BGE's, and DPL’s credit rating. As of September 30, 2022,March 31, 2024, PECO, BGE, and DPL were not required to post collateral for any of these agreements. If PECO, BGE, or DPL lost their investment grade credit rating as of September 30, 2022,March 31, 2024, they could have been required to post collateral to their counterparties of $43$27 million, $79$47 million, and $16$12 million, respectively.
11.9. Debt and Credit Agreements (All Registrants)
Short-Term Borrowings
Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets theirits short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and borrowings from the Exelon intercompany money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.
Commercial Paper
The following table reflects the Registrants' commercial paper programs as of September 30, 2022supported by the revolving credit agreements at March 31, 2024 and December 31, 2021. PECO had no commercial paper borrowings as of September 30, 2022 and December 31, 2021.2023.
| | | | | | | | | | | | | | | | | | | | | | | |
| Outstanding Commercial
Paper at | | Average Interest Rate on
Commercial Paper Borrowings at |
| Commercial Paper Issuer | March 31, 2024 | | December 31, 2023 | | March 31, 2024 | | December 31, 2023 |
Exelon(a) | $ | 1,307 | | | $ | 1,624 | | | 5.53 | % | | 5.58 | % |
| ComEd | $ | 330 | | | $ | 202 | | | 5.43 | % | | 5.53 | % |
| PECO | $ | — | | | $ | 165 | | | — | % | | 5.57 | % |
| BGE | $ | 406 | | | $ | 336 | | | 5.57 | % | | 5.59 | % |
PHI(b) | $ | — | | | $ | 394 | | | — | % | | 5.60 | % |
| | | | | | | |
| Pepco | $ | — | | | $ | 132 | | | — | % | | 5.59 | % |
| DPL | $ | — | | | $ | 63 | | | — | % | | 5.60 | % |
| ACE | $ | — | | | $ | 199 | | | — | % | | 5.60 | % |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 119 — Debt and Credit Agreements
| | | | | | | | | | | | | | | | | | | | | | | |
| Outstanding Commercial
Paper as of | | Average Interest Rate on
Commercial Paper Borrowings as of |
| Commercial Paper Issuer | September 30, 2022 | | December 31, 2021 | | September 30, 2022 | | December 31, 2021 |
Exelon(a) | $ | 615 | | | $ | 599 | | | 3.37 | % | | 0.35 | % |
| ComEd | 233 | | | — | | | 3.35 | % | | — | % |
| | | | | | | |
| BGE | 156 | | | 130 | | | 3.40 | % | | 0.37 | % |
PHI(b) | — | | | 469 | | | — | % | | 0.35 | % |
| | | | | | | |
| Pepco | — | | | 175 | | | — | % | | 0.33 | % |
| DPL | — | | | 149 | | | — | % | | 0.36 | % |
| ACE | — | | | 145 | | | — | % | | 0.35 | % |
__________
(a)Exelon Corporate had $226$571 million ofand $527 million in outstanding commercial paper borrowings at September 30, 2022March 31, 2024 and no outstanding commercial paper borrowings as of December 31, 2021.2023, respectively.
(b)Represents the consolidated amounts of Pepco, DPL, and ACE.
Revolving Credit Agreements
On February 1, 2022, Exelon Corporate and the Utility Registrants each entered intohave a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. The following table reflects the credit agreements:
| | | | | | | | | | | | | | |
| Borrower | | Aggregate Bank Commitment | | Interest Rate |
| Exelon Corporate | | $ | 900 | | | SOFR plus 1.275 | % |
| ComEd | | $ | 1,000 | | | SOFR plus 1.000 | % |
| PECO | | $ | 600 | | | SOFR plus 0.900 | % |
| BGE | | $ | 600 | | | SOFR plus 0.900 | % |
| Pepco | | $ | 300 | | | SOFR plus 1.075 | % |
| DPL | | $ | 300 | | | SOFR plus 1.000 | % |
| ACE | | $ | 300 | | | SOFR plus 1.0751.000 | % |
Exelon Corporate and the Utility Registrants had no outstanding amounts on the revolving credit facilities as of September 30, 2022.March 31, 2024.
On October 7, 2022, Exelon entered into newThe Utility Registrants have credit facility agreements, arranged at minority and community banks, which are solely utilized to issue letters of credit. The new facility agreements have aggregate commitments of $40 million, $40 million, $15 million, $15 million, $15 million, and $15 million, at ComEd, PECO, BGE, Pepco, DPL, and ACE, respectively. These facilities expire on October 6, 2023.4, 2024.
See Note 1516 — Debt and Credit Agreements of the 2021 Recast2023 Form 10-K for additional information on the Registrants' credit facilities.
Short-Term Loan Agreements
On March 23, 2017, Exelon Corporate entered into a term loan agreement for $500 million. The loan agreement was renewed in the first quarter of 2024 and was bifurcated into two tranches of $350 million and $150 million on March 14, 2022 and2024. The agreements will expire on March 16, 2023.14, 2025. Pursuant to the loan agreement,agreements, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.65%1.05% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-term borrowings.
On March 31, 2021, Exelon CorporateMay 9, 2023, ComEd entered into a 364-day term loan agreement for $150$400 million with a variable interest rate of LIBOR plus 0.65% and an expiration date of March 30, 2022. Exelon Corporate repaid the term loan on March 30, 2022.
In connection with the separation, on January 24, 2022, Exelon Corporate entered into a 364-day term loan agreement for $1.15 billion. The loan agreement will expire on January 23, 2023. Pursuant to the loan agreement, loans made thereunder bore interest at a variable rate equal to SOFR plus 0.75% until July 23, 2022
851.00% and an expiration date of May 7, 2024. On May 1, 2024, ComEd entered into an agreement to extend the $400 million term loan through the expiration date of June 28, 2024. Interest on the extended loan will be based on a variable rate equal to SOFR plus 1.00%. The original proceeds from the loan were used to repay outstanding commercial paper obligations and for general corporate purposes. The loan agreement is reflected in Exelon's and ComEd's Consolidated Balance Sheets within Short-term borrowings.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 11 — Debt and Credit Agreements
and a rate of SOFR plus 0.975% thereafter. All indebtedness pursuant to the loan agreement is unsecured. On August 11, 2022, Exelon Corporate made a partial repayment of $575 million on the term loan. The remaining $575 million outstanding balance was repaid on October 11, 2022 in conjunction with the $500 million 18-month term loan that was entered into on October 7, 2022. Refer to the Issuance of Long-Term Debt below for further information.
On October 4, 2022, ComEd entered into a 364-day term loan agreement for $150 million with a variable rate equal to SOFR plus 0.75% and an expiration date of October 3, 2023. The proceeds from this loan were used to repay outstanding commercial paper obligations. The loan agreement will be reflected in Exelon's and ComEd's Consolidated Balance Sheets within Short-term borrowings in the fourth quarter of 2022.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 119 — Debt and Credit Agreements
Long-Term Debt
Issuance of Long-Term Debt
During the ninethree months ended September 30, 2022,March 31, 2024, the following long-term debt was issued:
| Company(a) | | Type | | Interest Rate | | Maturity | | Amount | | Use of Proceeds | |
| Company | |
| Company | |
| Company | |
| Exelon | Exelon | | SMBC Term Loan Agreement | | SOFR plus 0.65% | | July 21, 2023(b) | | $300 | | Fund a cash payment to Constellation and for general corporate purposes. | |
| Exelon | Exelon | | U.S. Bank Term Loan Agreement | | SOFR plus 0.65% | | July 21, 2023(b) | | 300 | | Fund a cash payment to Constellation and for general corporate purposes. | |
| Exelon | Exelon | | PNC Term Loan Agreement | | SOFR plus 0.65% | | July 24, 2023(b) | | 250 | | Fund a cash payment to Constellation and for general corporate purposes. | |
| Exelon | Exelon | | Notes(c) | | 2.75% | | March 15, 2027 | | 650 | | Repay existing indebtedness and for general corporate purposes. | |
| Exelon | Exelon | | Notes(c) | | 3.35% | | March 15, 2032 | | 650 | | Repay existing indebtedness and for general corporate purposes. | |
| Exelon | Exelon | | Notes(c) | | 4.10% | | March 15, 2052 | | 700 | | Repay existing indebtedness and for general corporate purposes. | |
| Exelon | Exelon | | Long-Term Software License Agreements | | 2.30% | | December 1, 2025 | | 17 | | Procurement of software licenses | |
| ComEd | | First Mortgage Bonds, Series 132 | | 3.15% | | March 15, 2032 | | 300 | | Repay outstanding commercial paper obligations and to fund other general corporate purposes. | |
| ComEd | | First Mortgage Bonds, Series 133 | | 3.85% | | March 15, 2052 | | 450 | | Repay outstanding commercial paper obligations and to fund other general corporate purposes. | |
| PECO | | First and Refunding Mortgage Bonds | | 4.60% | | May 15, 2052 | | 350 | | Refinance existing indebtedness and for general corporate purposes. | |
| PECO | | First and Refunding Mortgage Bonds | | 4.375% | | August 15, 2052 | | 425 | | Refinance outstanding commercial paper and for general corporate purposes. | |
| BGE | | Notes | | 4.55% | | June 1, 2052 | | 500 | | Repay outstanding commercial paper obligations, repay existing indebtedness, and for general corporate purposes. | |
| Exelon | |
| Exelon | |
| Pepco | Pepco | | First Mortgage Bonds | | 3.97% | | March 24, 2052 | | 400 | | Repay existing indebtedness and for general corporate purposes. | |
| Pepco | Pepco | | First Mortgage Bonds | | 3.35% | | September 15, 2032 | | 225 | | Repay existing indebtedness and for general corporate purposes. | |
| | Pepco | |
| Pepco | |
| Pepco | |
| Pepco | |
| DPL | DPL | | First Mortgage Bonds | | 3.06% | | February 15, 2052 | | 125 | | Repay existing indebtedness and for general corporate purposes. | |
| ACE | | First Mortgage Bonds | | 2.27% | | February 15, 2032 | | 25 | | Repay existing indebtedness and for general corporate purposes. | |
| ACE | | First Mortgage Bonds | | 3.06% | | February 15, 2052 | | 150 | | Repay existing indebtedness and for general corporate purposes. | |
| | DPL | |
| DPL | |
| DPL | |
| DPL | |
| DPL | |
ACE(a) | |
ACE(a) | |
ACE(a) | |
__________
(a)On October 7, 2022, Exelon Corporate entered into an 18-month term loan agreement for $500 million with a variable rate equal to SOFR plus 0.85% and an expiration date of April 7, 2024.
(b)During the third quarter of 2022, the SMBC Term Loan, U.S. Bank Term Loan, and PNC Term Loan were all reclassified to Long-term debt due within one year on the Exelon Consolidated Balance Sheet, given that the Term Loans have maturity dates of July 21, 2023, and July 24, 2023, respectively.
(c)In connection with the issuance and sale of the Notes, ExelonMarch 20, 2024, ACE entered into a Registration Rights Agreement with the representativespurchase agreement of First Mortgage Bonds of $75 million and $100 million at 5.29% and 5.49% due on August 28, 2034 and August 28, 2039, respectively. The closing date of the initial purchasers of the Notes and other parties. Pursuantissuance is expected to the Registration Rights Agreement, Exelon filed a registration statement onoccur in August 3, 2022, with respect to an offer to exchange the Notes for substantially similar notes of Exelon that are registered under the Securities Act. The registration statement became effective on August 19, 2022. The registered notes, when issued later in the fourth quarter, will have terms identical in all material respects to the Notes, except that their issuance will have been registered under the Securities Act.2024.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 11 — Debt and Credit Agreements
Long-Term Debt to Affiliates
As of December 31, 2021, Exelon Corporate had $319 million recorded to intercompany notes receivable from Generation. See Note 15 — Debt and Credit Agreements of the 2021 Recast Form 10-K for additional information. In connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle the intercompany loan.
Debt Covenants
As of September 30, 2022,March 31, 2024, the Registrants are in compliance with debt covenants.
12.10. Fair Value of Financial Assets and Liabilities (All Registrants)
Exelon measures and classifies fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
•Level 1 -— quoted prices (unadjusted) in active markets for identical assets or liabilities that the Registrants have the ability to liquidate as of the reporting date.
•Level 2 -— inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
•Level 3 -— unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.
Exelon’s valuation techniques used to measure the fair value of the assets and liabilities shown in the tables below are in accordance with the policies discussed in Note 17 — Fair Value of Financial Assets and Liabilities of the 2023 Form 10-K.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 10 — Fair Value of Financial Assets and Liabilities
Fair Value of Financial Liabilities Recorded at Amortized Cost
The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of September 30, 2022March 31, 2024 and December 31, 2021.2023. The Registrants have no financial liabilities classified as Level 1.measured using the NAV practical expedient.
The carrying amounts of the Registrants’ short-term liabilities as presented in their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.
| | September 30, 2022 | | December 31, 2021 |
| Carrying Amount | | Fair Value | | Carrying Amount | | Fair Value |
| Level 2 | | Level 3 | | Total | | Level 2 | | Level 3 | | Total |
| | March 31, 2024 | | | | March 31, 2024 | | December 31, 2023 |
| | Carrying Amount | | | | Carrying Amount | | Fair Value | | Carrying Amount | | Fair Value |
| | | Level 1 | | | | | Level 1 | | Level 2 | | Level 3 | | Total | | | Level 1 | | Level 2 | | Level 3 | | Total |
Long-Term Debt, including amounts due within one year(a) | Long-Term Debt, including amounts due within one year(a) | Long-Term Debt, including amounts due within one year(a) |
| Exelon | Exelon | | $ | 36,583 | | | $ | 28,654 | | | $ | 2,270 | | | $ | 30,924 | | | $ | 32,902 | | | $ | 34,897 | | | $ | 2,217 | | | $ | 37,114 | |
| ComEd | ComEd | | 10,517 | | | 8,783 | | | — | | | 8,783 | | | 9,773 | | | 11,305 | | | — | | | 11,305 | |
| PECO | PECO | | 4,612 | | | 3,747 | | | 50 | | | 3,797 | | | 4,197 | | | 4,740 | | | 50 | | | 4,790 | |
| BGE | BGE | | 4,207 | | | 3,539 | | | — | | | 3,539 | | | 3,961 | | | 4,406 | | | — | | | 4,406 | |
| PHI | PHI | | 8,130 | | | 4,434 | | | 2,220 | | | 6,654 | | | 7,547 | | | 5,970 | | | 2,167 | | | 8,137 | |
| Pepco | Pepco | | 3,752 | | | 2,179 | | | 1,174 | | | 3,353 | | | 3,445 | | | 3,201 | | | 975 | | | 4,176 | |
| DPL | DPL | | 1,938 | | | 1,143 | | | 446 | | | 1,589 | | | 1,810 | | | 1,426 | | | 552 | | | 1,978 | |
| ACE | ACE | | 1,758 | | | 903 | | | 600 | | | 1,503 | | | 1,582 | | | 1,091 | | | 641 | | | 1,732 | |
| Long-Term Debt to Financing Trusts | Long-Term Debt to Financing Trusts | Long-Term Debt to Financing Trusts |
| Exelon | Exelon | | $ | 390 | | | $ | — | | | $ | 385 | | | $ | 385 | | | $ | 390 | | | $ | — | | | $ | 470 | | | $ | 470 | |
| ComEd | ComEd | | 205 | | | — | | | 204 | | | 204 | | | 205 | | | — | | | 248 | | | 248 | |
| PECO | PECO | | 184 | | | — | | | 181 | | | 181 | | | 184 | | | — | | | 222 | | | 222 | |
__________
(a)Includes unamortized debt issuance costs, unamortized debt discount and premium, net, purchase accounting fair value adjustments, and finance lease liabilities which are not fair valued. Refer to Note 15 -16 — Debt and Credit Agreements of the 2021 Recast2023 Form 10-K for unamortized debt issuance costs, unamortized debt discount and premium, net, and purchase accounting fair value adjustments and Note 10 -— Leases of the 2021 Recast2023 Form 10-K for finance lease liabilities.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1210 — Fair Value of Financial Assets and Liabilities
Recurring Fair Value Measurements
The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2022at March 31, 2024 and December 31, 2021:2023. Exelon and the Utility Registrants have immaterial and no financial assets or liabilities measured using the NAV practical expedient, respectively:
Exelon
| | As of September 30, 2022 | | As of December 31, 2021 |
| Level 1 | | Level 2 | | Level 3 | | | Total | | Level 1 | | Level 2 | | Level 3 | | | Total |
| At March 31, 2024 | |
| At March 31, 2024 | |
| At March 31, 2024 | | | At December 31, 2023 |
| Level 1 | | | Level 1 | | Level 2 | | Level 3 | | | | Total | | Level 1 | | Level 2 | | Level 3 | | | | Total |
| Assets | Assets | | | | | | | | | | | | | | | | | |
Cash equivalents(a) | Cash equivalents(a) | $ | 664 | | | $ | — | | | $ | — | | | | $ | 664 | | | $ | 524 | | | $ | — | | | $ | — | | | | $ | 524 | |
Cash equivalents(a) | |
Cash equivalents(a) | |
| Rabbi trust investments | Rabbi trust investments | | | | | |
| Cash equivalents | |
| Cash equivalents | |
| Cash equivalents | Cash equivalents | 62 | | | — | | | — | | | | 62 | | | 60 | | | — | | | — | | | | 60 | |
| Mutual funds | Mutual funds | 49 | | | — | | | — | | | | 49 | | | 60 | | | — | | | — | | | | 60 | |
| Fixed income | Fixed income | — | | | 8 | | | — | | | | 8 | | | — | | | 10 | | | — | | | | 10 | |
| Life insurance contracts | Life insurance contracts | — | | | 57 | | | 39 | | | | 96 | | | — | | | 61 | | | 37 | | | | 98 | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | 111 | | | 65 | | | 39 | | | | 215 | | | 120 | | | 71 | | | 37 | | | | 228 | |
| Mark-to-market derivative assets | — | | | — | | | 24 | | | | 24 | | | — | | | — | | | — | | | | — | |
| | Interest rate derivative assets | |
| Interest rate derivative assets | |
| Interest rate derivative assets | |
| Derivatives designated as hedging instruments | |
| Derivatives designated as hedging instruments | |
| Derivatives designated as hedging instruments | |
| Economic hedges | |
| Interest rate derivative assets subtotal | |
| Total assets | Total assets | 775 | | | 65 | | | 63 | | | | 903 | | | 644 | | | 71 | | | 37 | | | | 752 | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | | | |
| Mark-to-market derivative liabilities | — | | | — | | | (67) | | | | (67) | | | — | | | — | | | (219) | | | | (219) | |
| Commodity derivative liabilities | |
| Commodity derivative liabilities | |
| Commodity derivative liabilities | |
| Interest rate derivative liabilities | |
| Derivatives designated as hedging instruments | |
| Derivatives designated as hedging instruments | |
| Derivatives designated as hedging instruments | |
| Economic hedges | |
| Interest rate derivative liabilities subtotal | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (68) | | | — | | | | (68) | | | — | | | (131) | | | — | | | | (131) | |
| Total liabilities | Total liabilities | — | | | (68) | | | (67) | | | | (135) | | | — | | | (131) | | | (219) | | | | (350) | |
| Total net assets (liabilities) | Total net assets (liabilities) | $ | 775 | | | $ | (3) | | | $ | (4) | | | | $ | 768 | | | $ | 644 | | | $ | (60) | | | $ | (182) | | | | $ | 402 | |
__________
(a)Exelon excludes cash of $384$271 million and $464$334 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and restricted cash of $225$154 million and $49$149 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and includes long-term restricted cash of $83$99 million and $44$174 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1210 — Fair Value of Financial Assets and Liabilities
ComEd, PECO, and BGE
| | ComEd | | PECO | | BGE |
| As of September 30, 2022 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| ComEd | | | ComEd | | PECO | | BGE |
| At March 31, 2024 | | At March 31, 2024 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | Assets | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents(a) | |
Cash equivalents(a) | |
Cash equivalents(a) | Cash equivalents(a) | $ | 354 | | | $ | — | | | $ | — | | | $ | 354 | | | $ | 10 | | | $ | — | | | $ | — | | | $ | 10 | | | $ | 1 | | | $ | — | | | $ | — | | | $ | 1 | |
| Rabbi trust investments | Rabbi trust investments | |
| | Mutual funds | Mutual funds | — | | | — | | | — | | | — | | | 8 | | | — | | | — | | | 8 | | | 7 | | | — | | | — | | | 7 | |
| | Mutual funds | |
| | Mutual funds | |
| Life insurance contracts | Life insurance contracts | — | | | — | | | — | | | — | | | — | | | 15 | | | — | | | 15 | | | — | | | — | | | — | | | — | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | — | | | — | | | — | | | — | | | 8 | | | 15 | | | — | | | 23 | | | 7 | | | — | | | — | | | 7 | |
Mark-to-market derivative assets(b) | — | | | — | | | 24 | | | 24 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Total assets | |
| Total assets | |
| Total assets | Total assets | 354 | | | — | | | 24 | | | 378 | | | 18 | | | 15 | | | — | | | 33 | | | 8 | | | — | | | — | | | 8 | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | | | | | | | | | |
Mark-to-market derivative liabilities(b) | — | | | — | | | (67) | | | (67) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Commodity derivative liabilities(b) | |
Commodity derivative liabilities(b) | |
Commodity derivative liabilities(b) | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (7) | | | — | | | (7) | | | — | | | (7) | | | — | | | (7) | | | — | | | (4) | | | — | | | (4) | |
| Total liabilities | Total liabilities | — | | | (7) | | | (67) | | | (74) | | | — | | | (7) | | | — | | | (7) | | | — | | | (4) | | | — | | | (4) | |
| Total net assets (liabilities) | Total net assets (liabilities) | $ | 354 | | | $ | (7) | | | $ | (43) | | | $ | 304 | | | $ | 18 | | | $ | 8 | | | $ | — | | | $ | 26 | | | $ | 8 | | | $ | (4) | | | $ | — | | | $ | 4 | |
| | ComEd | | PECO | | BGE |
| As of December 31, 2021 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| ComEd | | | ComEd | | PECO | | BGE |
| At December 31, 2023 | | At December 31, 2023 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | Assets | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents(a) | Cash equivalents(a) | $ | 237 | | | $ | — | | | $ | — | | | $ | 237 | | | $ | 9 | | | $ | — | | | $ | — | | | $ | 9 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Cash equivalents(a) | |
Cash equivalents(a) | |
| Rabbi trust investments | Rabbi trust investments | |
| Mutual funds | |
| Mutual funds | |
| Mutual funds | Mutual funds | — | | | — | | | — | | | — | | | 11 | | | — | | | — | | | 11 | | | 14 | | | — | | | — | | | 14 | |
| Life insurance contracts | Life insurance contracts | — | | | — | | | — | | | — | | | — | | | 16 | | | — | | | 16 | | | — | | | — | | | — | | | — | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | — | | | — | | | — | | | — | | | 11 | | | 16 | | | — | | | 27 | | | 14 | | | — | | | — | | | 14 | |
| Total assets | Total assets | 237 | | | — | | | — | | | 237 | | | 20 | | | 16 | | | — | | | 36 | | | 14 | | | — | | | — | | | 14 | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | | | | | | | | | |
Mark-to-market derivative liabilities(b) | — | | | — | | | (219) | | | (219) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Commodity derivative liabilities(b) | |
Commodity derivative liabilities(b) | |
Commodity derivative liabilities(b) | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (10) | | | — | | | (10) | | | — | | | (9) | | | — | | | (9) | | | — | | | (7) | | | — | | | (7) | |
| Total liabilities | Total liabilities | — | | | (10) | | | (219) | | | (229) | | | — | | | (9) | | | — | | | (9) | | | — | | | (7) | | | — | | | (7) | |
| Total net assets (liabilities) | Total net assets (liabilities) | $ | 237 | | | $ | (10) | | | $ | (219) | | | $ | 8 | | | $ | 20 | | | $ | 7 | | | $ | — | | | $ | 27 | | | $ | 14 | | | $ | (7) | | | $ | — | | | $ | 7 | |
__________
(a)ComEd excludes cash of $39$75 million and $105$86 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and restricted cash of $95$154 million and $42$147 million as of September 30, 2022at March 31, 2024 and December 31, 2021, respectively, and2023, respectively. Additionally, ComEd includes long-term restricted cash of $83$99 million and $43$174 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets. PECO excludes cash of $93$34 million and $35$42 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively. BGE excludes cash of $20$27 million and $51$47 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and restricted cash of $129zero and $1 million and $4 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively.
(b)The Level 3 balance consists of the current asset of $24 million and current and noncurrent liability of none$29 million and $67$79 million, respectively, as of September 30, 2022at March 31, 2024 and none, $18$27 million and $201$106 million, respectively, as ofat December 31, 20212023 related to floating-to-fixed energy swap contracts with unaffiliated suppliers.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1210 — Fair Value of Financial Assets and Liabilities
PHI, Pepco, DPL, and ACE
| | As of September 30, 2022 | | As of December 31, 2021 |
| At March 31, 2024 | | | At March 31, 2024 | | At December 31, 2023 |
| PHI | PHI | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | PHI | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | Assets | | | | | | | | | | | | | | | |
Cash equivalents(a) | Cash equivalents(a) | $ | 266 | | | $ | — | | | $ | — | | | $ | 266 | | | $ | 110 | | | $ | — | | | $ | — | | | $ | 110 | |
Cash equivalents(a) | |
Cash equivalents(a) | |
| Rabbi trust investments | Rabbi trust investments | |
| Cash equivalents | |
| Cash equivalents | |
| Cash equivalents | Cash equivalents | 59 | | | — | | | — | | | 59 | | | 59 | | | — | | | — | | | 59 | |
| Mutual funds | Mutual funds | 10 | | | — | | | — | | | 10 | | | 14 | | | — | | | — | | | 14 | |
| Fixed income | Fixed income | — | | | 8 | | | — | | | 8 | | | — | | | 10 | | | — | | | 10 | |
| Life insurance contracts | Life insurance contracts | — | | | 22 | | | 38 | | | 60 | | | — | | | 27 | | | 35 | | | 62 | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | 69 | | | 30 | | | 38 | | | 137 | | | 73 | | | 37 | | | 35 | | | 145 | |
| Total assets | Total assets | 335 | | | 30 | | | 38 | | | 403 | | | 183 | | | 37 | | | 35 | | | 255 | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (14) | | | — | | | (14) | | | — | | | (18) | | | — | | | (18) | |
| Deferred compensation obligation | |
| Deferred compensation obligation | |
| | Total liabilities | Total liabilities | — | | | (14) | | | — | | | (14) | | | — | | | (18) | | | — | | | (18) | |
| | Total liabilities | |
| | Total liabilities | |
| Total net assets | Total net assets | $ | 335 | | | $ | 16 | | | $ | 38 | | | $ | 389 | | | $ | 183 | | | $ | 19 | | | $ | 35 | | | $ | 237 | |
| | Pepco | | DPL | | ACE |
| As of September 30, 2022 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Pepco | | | Pepco | | DPL | | ACE |
| At March 31, 2024 | | At March 31, 2024 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | Assets | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents(a) | |
Cash equivalents(a) | |
Cash equivalents(a) | Cash equivalents(a) | $ | 76 | | | $ | — | | | $ | — | | | $ | 76 | | | $ | 157 | | | $ | — | | | $ | — | | | $ | 157 | | | $ | 1 | | | $ | — | | | $ | — | | | $ | 1 | |
| | Rabbi trust investments | Rabbi trust investments | |
| | Rabbi trust investments | |
| | Rabbi trust investments | |
| Cash equivalents | |
| Cash equivalents | |
| Cash equivalents | Cash equivalents | 59 | | | — | | | — | | | 59 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Life insurance contracts | |
| Life insurance contracts | |
| Life insurance contracts | Life insurance contracts | — | | | 22 | | | 38 | | | 60 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | 59 | | | 22 | | | 38 | | | 119 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total assets | Total assets | 135 | | | 22 | | | 38 | | | 195 | | | 157 | | | — | | | — | | | 157 | | | 1 | | | — | | | — | | | 1 | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | | | | | | | | | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (1) | | | — | | | (1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Deferred compensation obligation | |
| Deferred compensation obligation | |
| | Total liabilities | Total liabilities | — | | | (1) | | | — | | | (1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Total liabilities | |
| | Total liabilities | |
| Total net assets | Total net assets | $ | 135 | | | $ | 21 | | | $ | 38 | | | $ | 194 | | | $ | 157 | | | $ | — | | | $ | — | | | $ | 157 | | | $ | 1 | | | $ | — | | | $ | — | | | $ | 1 | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1210 — Fair Value of Financial Assets and Liabilities
| | Pepco | | DPL | | ACE |
| As of December 31, 2021 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Pepco | | | Pepco | | DPL | | ACE |
| At December 31, 2023 | | At December 31, 2023 | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | Assets | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents(a) | |
Cash equivalents(a) | |
Cash equivalents(a) | Cash equivalents(a) | $ | 31 | | | $ | — | | | $ | — | | | $ | 31 | | | $ | 43 | | | $ | — | | | $ | — | | | $ | 43 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Rabbi trust investments | Rabbi trust investments | |
| Cash equivalents | Cash equivalents | 58 | | | — | | | — | | | 58 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Cash equivalents | |
| Cash equivalents | |
| | | Life insurance contracts | |
| | Life insurance contracts | |
| | Life insurance contracts | Life insurance contracts | — | | | 27 | | | 35 | | | 62 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Rabbi trust investments subtotal | Rabbi trust investments subtotal | 58 | | | 27 | | | 35 | | | 120 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total assets | Total assets | 89 | | | 27 | | | 35 | | | 151 | | | 43 | | | — | | | — | | | 43 | | | — | | | — | | | — | | | — | |
| Liabilities | Liabilities | | | | | | | | | | | | | | | | | | | | | | | |
| Deferred compensation obligation | Deferred compensation obligation | — | | | (2) | | | — | | | (2) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Deferred compensation obligation | |
| Deferred compensation obligation | |
| | Total liabilities | Total liabilities | — | | | (2) | | | — | | | (2) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Total liabilities | |
| | Total liabilities | |
| Total net assets | Total net assets | $ | 89 | | | $ | 25 | | | $ | 35 | | | $ | 149 | | | $ | 43 | | | $ | — | | | $ | — | | | $ | 43 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
__________
(a)PHI excludes cash of $186$89 million and $100$96 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and restricted cash of zero and $1 million and $3 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively. Pepco excludes cash of $21$28 million and $34$48 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively, and restricted cash of zero and $1 million and $3 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively. DPL excludes cash of $49$29 million and $28$15 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively. ACE excludes cash of $111$27 million and $29$21 million as of September 30, 2022at March 31, 2024 and December 31, 2021,2023, respectively.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 10 — Fair Value of Financial Assets and Liabilities
Reconciliation of Level 3 Assets and Liabilities
The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and nine months ended September 30, 2022March 31, 2024 and 2021: | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Three Months Ended September 30, 2022 | Total | | Mark-to-Market
Derivatives | | Life Insurance Contracts | | |
| Balance as of June 30, 2022 | $ | (50) | | | $ | (88) | | | $ | 37 | | | |
| Total realized / unrealized gains | | | | | | | |
Included in net income(a) | 1 | | | — | | | 1 | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets/liabilities | 45 | | | 45 | | (b) | — | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Balance as of September 30, 2022 | $ | (4) | | | $ | (43) | | (c) | $ | 38 | | | |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2022 | $ | 1 | | | $ | — | | | $ | 1 | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Three Months Ended September 30, 2021 | Total | | Mark-to-Market
Derivatives | | Life Insurance Contracts | | |
| Balance as of June 30, 2021 | $ | (231) | | | $ | (265) | | | $ | 34 | | | |
| Total realized / unrealized gains | | | | | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets | 51 | | | 51 | | (b) | — | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Balance as of September 30, 2021 | $ | (180) | | | $ | (214) | | | $ | 34 | | | |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2021 | $ | — | | | $ | — | | | $ | — | | | |
92 | | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Three Months Ended March 31, 2024 | Total | | Commodity
Derivatives | | Life Insurance Contracts | | |
| Balance at December 31, 2023 | $ | (90) | | | $ | (133) | | | $ | 41 | | | |
| Total realized / unrealized gains (losses) | | | | | | | |
Included in net income(a) | — | | | — | | | — | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets/liabilities | 25 | | | 25 | | (b) | — | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Balance at March 31, 2024 | $ | (65) | | | $ | (108) | | (c) | $ | 41 | | | |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities at March 31, 2024 | $ | — | | | $ | — | | | $ | — | | | |
| | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Three Months Ended March 31, 2023 | Total | | Commodity
Derivatives | | Life Insurance Contracts | | |
| Balance at December 31, 2022 | $ | (44) | | | $ | (84) | | | $ | 40 | | | |
| Total realized / unrealized gains (losses) | | | | | | | |
Included in net income(a) | 1 | | | — | | | 1 | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets/liabilities | (14) | | | (14) | | (b) | — | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Balance at March 31, 2023 | $ | (57) | | | $ | (98) | | | $ | 41 | | | |
| The amount of total gains included in income attributed to the change in unrealized gain related to assets and liabilities at March 31, 2023 | $ | 1 | | | $ | — | | | $ | 1 | | | |
__________(a)Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.
(b)Includes $13 million of increases in fair value and an increase for realized gains due to settlements of $12 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended March 31, 2024. Includes $25 million of decreases in fair value and an increase for realized losses due to settlements of $11 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended March 31, 2023.
(c)The balance of the current and noncurrent asset was effectively zero as of March 31, 2024. The balance consists of a current and noncurrent liability of $29 million and $79 million, respectively, as of March 31, 2024.
Commodity Derivatives (Exelon and ComEd)
The table below discloses the significant unobservable inputs to the forward curve used to value mark-to-market derivatives.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Type of trade | | Fair Value at March 31, 2024 | | Fair Value at December 31, 2023 | | Valuation
Technique | | Unobservable
Input | | 2024 Range & Arithmetic Average | | 2023 Range & Arithmetic Average |
| Commodity derivatives | | $ | (108) | | | $ | (133) | | | Discounted
Cash Flow | | Forward power price(a) | | $22.68 | - | $84.62 | $46.94 | | $30.27 | - | $73.71 | $43.35 |
________
(a)An increase to the forward power price would increase the fair value.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1211 — Fair Value of Financial AssetsCommitments and LiabilitiesContingencies
| | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Nine months ended September 30, 2022 | Total | | Mark-to-Market
Derivatives | | Life Insurance Contracts | | |
| Balance as of December 31, 2021 | $ | (182) | | | $ | (219) | | | $ | 35 | | | |
| Total realized / unrealized gains | | | | | | | |
Included in net income(a) | 3 | | | — | | | 3 | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets/liabilities | 176 | | | 176 | | (b) | — | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Transfers out of Level 3 | (1) | | | — | | | — | | | |
| Balance as of September 30, 2022 | $ | (4) | | | $ | (43) | | (c) | $ | 38 | | | |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2022 | $ | 3 | | | $ | — | | | $ | 3 | | | |
| | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd | | PHI and Pepco | | |
| Nine Months Ended September 30, 2021 | Total | | Mark-to-Market
Derivatives | | Life Insurance Contracts | | |
| Balance as of December 31, 2020 | $ | (267) | | | $ | (301) | | | $ | 34 | | | |
| Total realized / unrealized gains | | | | | | | |
Included in net income(a) | 2 | | | — | | | 2 | | | |
| | | | | | | |
| | | | | | | |
| Included in regulatory assets | 87 | | | 87 | | (b) | — | | | |
| | | | | | | |
| Purchases, sales, and settlements | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Settlements | (2) | | | — | | | (2) | | | |
| | | | | | | |
| | | | | | | |
| Balance as of September 30, 2021 | $ | (180) | | | $ | (214) | | | $ | 34 | | | |
| The amount of total gains included in income attributed to the change in unrealized gain related to assets and liabilities as of September 30, 2021 | $ | 2 | | | $ | — | | | $ | 2 | | | |
__________(a)Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.
(b)Includes $51 million of increases in fair value and a decrease for realized gains due to settlements of $6 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2022. Includes $49 million of increases in fair value and an increase for realized losses due to settlements of $2 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2021. Includes $179 million of increases in fair value and an decrease for realized losses due to settlements of $3 million recorded in purchase power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2022. Includes $72 million of increases in fair value and an increase for realized losses due to settlements of $15 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2021.
(c)The balance consists of $24 million of current assets and current and noncurrent liability of none and $67 million, respectively, as of September 30, 2022.
Valuation Techniques Used to Determine Fair Value
Exelon’s valuation techniques used to measure the fair value of the assets and liabilities shown in the tables below are in accordance with the policies discussed in Note 16 — Fair Value of Financial Assets and Liabilities of the 2021 Recast Form 10-K.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 12 — Fair Value of Financial Assets and Liabilities
Mark-to-Market Derivatives (Exelon and ComEd)
The table below discloses the significant unobservable inputs to the forward curve used to value mark-to-market derivatives.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Type of trade | | Fair Value as of September 30, 2022 | | Fair Value as of December 31, 2021 | | Valuation
Technique | | Unobservable
Input | | 2022 Range & Arithmetic Average | | 2021 Range & Arithmetic Average |
| Mark-to-market derivatives | | $ | (43) | | | $ | (219) | | | Discounted
Cash Flow | | Forward power price(a) | | $36.02 | - | $111.10 | $50.61 | | $28.65 | - | $47.10 | $33.96 |
________
(a)An increase to the forward power price would increase the fair value.
13.11. Commitments and Contingencies (All Registrants)
The following is an update to the current status of commitments and contingencies set forth in Note 1718 — Commitments and Contingencies of the 2021 Recast2023 Form 10-K.
Commitments
PHI Merger Commitments (Exelon, PHI, Pepco, DPL, and ACE). Approval of the PHI Merger in Delaware, New Jersey, Maryland, and the District of Columbia was conditioned upon Exelon and PHI agreeing to certain commitments. The following amounts represent total commitment costs that have been recorded since the acquisition date and the total remaining obligations for Exelon, PHI, Pepco, DPL, and ACE as of September 30, 2022:at March 31, 2024:
| | Description | Description | Exelon | | PHI | | Pepco | | DPL | | ACE | Description | Exelon | | PHI | | Pepco | | DPL | | ACE |
| Total commitments | Total commitments | $ | 513 | | | $ | 320 | | | $ | 120 | | | $ | 89 | | | $ | 111 | |
Remaining commitments(a) | Remaining commitments(a) | 57 | | | 50 | | | 41 | | | 6 | | | 3 | |
|
__________
(a)Remaining commitments extend through 2026 and include escrow funds, charitable contributions, and rate credits, energy efficiency programs and delivery system modernization.credits.
In addition, DPL has committed to conducting three RFPs to procure up to a total of 120 MWs of wind RECs for the purpose of meeting Delaware's renewable portfolio standards. DPL has conducted two of the three wind REC RFPs. The first 40 MW wind REC tranche was conducted in 2017 and did not result in a purchase agreement. The second 40 MW wind REC tranche was conducted in 2018 and resulted in a proposed REC purchase agreement that was approved by the DEPSC in 2019. The RFP for the third and final 40 MW wind REC tranche was conducted in the second quarter of 2022, an evaluation of the proposals was completed in the third quarter and DPL has made a draft recommendation to the DEPSC. The DEPSC is reviewing DPL's recommendation. DPL expects to make a decision on a potential award in the fourth quarter of 2022.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1311 — Commitments and Contingencies
Commercial Commitments (All Registrants). The Registrants’ commercial commitments as of September 30, 2022,at March 31, 2024, representing commitments potentially triggered by future events were as follows:
| | Expiration within |
| Total | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 and beyond |
| | | Expiration within | | | | | Expiration within |
| Total | | | Total | | 2024 | | 2025 | | 2026 | | 2027 | | 2028 | | 2029 and beyond |
| Exelon | Exelon | | | | | | | | | | | | | |
| Letters of credit | $ | 17 | | | $ | 5 | | | $ | 12 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Surety bonds(a) | 205 | | | 85 | | | 118 | | | 2 | | | — | | | — | | | — | |
| Financing trust guarantees | 378 | | | — | | | — | | | — | | | — | | | — | | | 378 | |
Guaranteed lease residual values(b) | 30 | | | — | | | 1 | | | 6 | | | 6 | | | 5 | | | 12 | |
Letters of credit(a) | |
Letters of credit(a) | |
Letters of credit(a) | |
Surety bonds(b) | |
Financing trust guarantees(c) | |
Guaranteed lease residual values(d) | |
| Total commercial commitments | Total commercial commitments | $ | 630 | | | $ | 90 | | | $ | 131 | | | $ | 8 | | | $ | 6 | | | $ | 5 | | | $ | 390 | |
| | ComEd | ComEd | |
| Letters of credit | $ | 10 | | | $ | 2 | | | $ | 8 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Surety bonds(a) | 46 | | | 5 | | | 39 | | | 2 | | | — | | | — | | | — | |
| Financing trust guarantees | 200 | | | — | | | — | | | — | | | — | | | — | | | 200 | |
| ComEd | |
| ComEd | |
Letters of credit(a) | |
Letters of credit(a) | |
Letters of credit(a) | |
Surety bonds(b) | |
Financing trust guarantees(c) | |
| Total commercial commitments | Total commercial commitments | $ | 256 | | | $ | 7 | | | $ | 47 | | | $ | 2 | | | $ | — | | | $ | — | | | $ | 200 | |
| | PECO | PECO | |
| Letters of credit | $ | 1 | | | $ | — | | | $ | 1 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Surety bonds(a) | 2 | | | — | | | 2 | | | — | | | — | | | — | | | — | |
| Financing trust guarantees | 178 | | | — | | | — | | | — | | | — | | | — | | | 178 | |
| PECO | |
| PECO | |
Letters of credit(a) | |
Letters of credit(a) | |
Letters of credit(a) | |
Surety bonds(b) | |
Financing trust guarantees(c) | |
| Total commercial commitments | Total commercial commitments | $ | 181 | | | $ | — | | | $ | 3 | | | $ | — | | | $ | — | | | $ | — | | | $ | 178 | |
| | BGE | BGE | |
| Letters of credit | $ | 3 | | | $ | 2 | | | $ | 1 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Surety bonds(a) | 2 | | | 1 | | | 1 | | | — | | | — | | | — | | | — | |
| BGE | |
| BGE | |
Letters of credit(a) | |
Letters of credit(a) | |
Letters of credit(a) | |
Surety bonds(b) | |
| Total commercial commitments | Total commercial commitments | $ | 5 | | | $ | 3 | | | $ | 2 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | PHI | PHI | |
| PHI | |
| PHI | |
| Surety bonds(a) | $ | 96 | | | $ | 75 | | | $ | 21 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Guaranteed lease residual values(b) | 30 | | | — | | | 1 | | | 6 | | | 6 | | | 5 | | | 12 | |
Surety bonds(b) | |
| Surety bonds(b) | |
| Surety bonds(b) | |
Guaranteed lease residual values(d) | |
| Total commercial commitments | Total commercial commitments | $ | 126 | | | $ | 75 | | | $ | 22 | | | $ | 6 | | | $ | 6 | | | $ | 5 | | | $ | 12 | |
| | Pepco | Pepco | |
| Pepco | |
| Pepco | |
| Surety bonds(a) | Surety bonds(a) | $ | 85 | | | $ | 71 | | | $ | 14 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Guaranteed lease residual values(b) | 10 | | | — | | | — | | | 2 | | | 2 | | | 2 | | | 4 | |
| Surety bonds(a) | |
| Surety bonds(a) | |
Guaranteed lease residual values(d) | |
| Total commercial commitments | Total commercial commitments | $ | 95 | | | $ | 71 | | | $ | 14 | | | $ | 2 | | | $ | 2 | | | $ | 2 | | | $ | 4 | |
| | DPL | DPL | |
| DPL | |
| DPL | |
| Surety bonds(a) | $ | 7 | | | $ | 3 | | | $ | 4 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Guaranteed lease residual values(b) | 13 | | | — | | | — | | | 3 | | | 3 | | | 2 | | | 5 | |
Surety bonds(b) | |
| Surety bonds(b) | |
| Surety bonds(b) | |
Guaranteed lease residual values(d) | |
| Total commercial commitments | Total commercial commitments | $ | 20 | | | $ | 3 | | | $ | 4 | | | $ | 3 | | | $ | 3 | | | $ | 2 | | | $ | 5 | |
| | ACE | ACE | |
Surety bonds(a) | $ | 4 | | | $ | 1 | | | $ | 3 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Guaranteed lease residual values(b) | 7 | | | — | | | 1 | | | 1 | | | 1 | | | 1 | | | 3 | |
| ACE | |
| ACE | |
Surety bonds(b) | |
Surety bonds(b) | |
Surety bonds(b) | |
Guaranteed lease residual values(d) | |
| Total commercial commitments | Total commercial commitments | $ | 11 | | | $ | 1 | | | $ | 4 | | | $ | 1 | | | $ | 1 | | | $ | 1 | | | $ | 3 | |
|
__________
(a)Surety bonds — Guarantees issued relatedExelon and certain of its subsidiaries maintain non-debt letters of credit to contract and commercial agreements, excluding bid bonds.provide credit support for certain transactions as requested by third parties.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1311 — Commitments and Contingencies
(b)Surety bonds—Guarantees issued related to contract and commercial agreements, excluding bid bonds. Historically, payments under the guarantees have not been made and the likelihood of payments being required is remote.
(c)Reflects guarantee of ComEd and PECO securities held by ComEd Financing III, PECO Trust III, and PECO Trust IV.
(d)Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The lease term associated with these assets ranges from 1 to 89 years. The maximum potential obligation at the end of the minimum lease term would be $73$57 million guaranteed by Exelon and PHI, of which $24$19 million, $30$22 million, and $19$16 million is guaranteed by Pepco, DPL, and ACE, respectively. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote.
Environmental Remediation Matters
General (All Registrants). The Registrants’ operations have in the past, and may in the future, require substantial expenditures to comply with environmental laws. Additionally, under federal and state environmental laws, the Registrants are generally liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous substances generated by them. The Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by substances that are considered hazardous under environmental laws. In addition, the Registrants are currently involved in a number of proceedings relating to sites where hazardous substances have been deposited and may be subject to additional proceedings in the future. Unless otherwise disclosed, the Registrants cannot reasonably estimate whether they will incur significant liabilities for additional investigation and remediation costs at these or additional sites identified by the Registrants, environmental agencies or others, or whether such costs will be recoverable from third parties, including customers. Additional costs could have a material, unfavorable impact on the Registrants' financial statements.
MGP Sites (All Registrants). ComEd, PECO, BGE, and DPL have identified sites where former MGP or gas purification activities have or may have resulted in actual site contamination. For some sites, there are additional PRPs that may share responsibility for the ultimate remediation of each location.
•ComEd has 2016 sites that are currently under some degree of active study and/or remediation. ComEd expects the majority of the remediation at these sites to continue through at least 2031.
•PECO has 6 sites that are currently under some degree of active study and/or remediation. PECO expects the majority of the remediation at these sites to continue through at least 2024.2025.
•BGE has 4 sites that currently require some level of remediation and/or ongoing activity. BGE expects the majority of the remediation at these sites to continue through at least 2023.2025.
•DPL has 1 site that is currently under study and the required cost at the site is not expected to be material.
The historical nature of the MGP and gas purification sites and the fact that many of the sites have been buried and built over, impacts the ability to determine a precise estimate of the ultimate costs prior to initial sampling and determination of the exact scope and method of remedial activity. Management determines its best estimate of remediation costs using all available information at the time of each study, including probabilistic and deterministic modeling for ComEd and PECO, and the remediation standards currently required by the applicable state environmental agency. Prior to completion of any significant clean up, each site remediation plan is approved by the appropriate state environmental agency.
ComEd, pursuant to an ICC order, and PECO, pursuant to a PAPUC order, are currently recovering environmental remediation costs of former MGP facility sites through customer rates. While BGE and DPL do not have riders for MGP clean-up costs, they have historically received recovery of actual clean-up costs in distribution rates.
During the third quarter of 2022, ComEd and PECO completed an annual study of their future estimated MGP remediation requirements. The study resulted in a $60 million increase to the environmental liability and related regulatory asset for ComEd. The increase was primarily due to increased costs due to inflation and changes in remediation plans. The study did not result in a material change to the environmental liability for PECO.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1311 — Commitments and Contingencies
As of September 30, 2022At March 31, 2024 and December 31, 2021,2023, the Registrants had accrued the following undiscounted amounts for environmental liabilities in Accrued expenses, Other current liabilities, and Other deferred credits and other liabilities in their respective Consolidated Balance Sheets:
| | September 30, 2022 | | December 31, 2021 |
| Total environmental
investigation and
remediation liabilities | | Portion of total related to
MGP investigation and
remediation | | Total environmental
investigation and
remediation liabilities | | Portion of total related to
MGP investigation and
remediation |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Total Environmental
Investigation and
Remediation Liabilities | | | Total Environmental
Investigation and
Remediation Liabilities | | Portion of Total Related to
MGP Investigation and
Remediation | | Total Environmental
Investigation and
Remediation Liabilities | | Portion of Total Related to
MGP Investigation and
Remediation |
| Exelon | Exelon | $ | 405 | | | $ | 358 | | | $ | 352 | | | $ | 303 | |
| ComEd | ComEd | 328 | | | 328 | | | 279 | | | 279 | |
| PECO | PECO | 25 | | | 24 | | | 22 | | | 20 | |
| BGE | BGE | 7 | | | 6 | | | 6 | | | 4 | |
| PHI | PHI | 41 | | | — | | | 42 | | | — | |
| Pepco | Pepco | 39 | | | — | | | 40 | | | — | |
| DPL | DPL | 1 | | | — | | | 1 | | | — | |
| ACE | ACE | 1 | | | — | | | 1 | | | — | |
Benning Road Site (Exelon, PHI, and Pepco). In September 2010, PHI received a letter from EPA identifying the Benning Road site as one of six land-based sites potentially contributing to contamination of the lower Anacostia River. A portion of the site, which is owned by Pepco, was formerly the location of an electric generating facility owned by Pepco subsidiary, Pepco Energy Services (PES), which became a part of Generation, following the 2016 merger between PHI and Exelon. This generating facility was deactivated in June 2012. The remaining portion of the site consists of a Pepco transmission and distribution service center that remains in operation. In December 2011, the U.S. District Court for the District of Columbia approved a Consent Decree entered into by Pepco and Pepco Energy Services (hereinafter "Pepco Entities") with the DOEE, which requires the Pepco Entities to conduct a Remedial Investigation and Feasibility Study (RI/FS) for the Benning Road site and an approximately 10 to 15-acre portion of the adjacent Anacostia River. The purpose of this RI/FS is to define the nature and extent of contamination from the Benning Road site and to evaluate remedial alternatives.
Pursuant to an internal agreement between the Pepco Entities, since 2013, Pepco has performed the work required by the Consent Decree and has been reimbursed for that work by an agreed upon allocation of costs between the Pepco Entities. In September 2019, the Pepco Entities issued a draft “final” RI report which DOEE approved on February 3, 2020. The Pepco Entities are developingcompleting a FS to evaluate possible remedial alternatives for submission to DOEE. The Court has established aIn October 2022, DOEE approved dividing the work to complete the landside portion of the FS from the waterside portion to expedite the overall schedule for completion of the project. The landside FS was approved by DOEE on March 15, 2024, and approvalthe waterside FS is scheduled to be complete and approved by DOEE by the DOEE, by March 16, 2023. Afterend of the fourth quarter of 2024. Following the completion and approval of theeach FS, DOEE will prepareissue a Proposed Plan for public comment and then issue a Record of Decision (ROD) identifying any further responsethe remedial actions determined to be necessary. necessary for the area in question. On October 3, 2023, DOEE and Pepco entered into an addendum to the Benning Consent Decree pursuant to which Pepco has agreed to fund or perform the remedial actions to be selected by DOEE for the landslide and water areas. This addendum to the Benning Consent Decree was entered by the Court on February 27, 2024 and became effective on that date.
As part of the separation between Exelon and Constellation in February 2022, the internal agreement between the Pepco Entities for completion and payment for the remaining Consent Decree work was memorialized in a formal agreement for post-separation activities. A second post-separation assumption agreement between Exelon and Constellation transferred any of the potential remaining remediation liability, if any, of PES/Generation to a non-utility subsidiary of Exelon which going forward will be responsible for those liabilities. Exelon, PHI, and Pepco have determined that a loss associated with this matter is probable and have accrued an estimated liability, which is included in the table above.
Anacostia River Tidal Reach (Exelon, PHI, and Pepco). Contemporaneous with the Benning Road site RI/FS being performed by the Pepco Entities, DOEE and National Park Service (NPS)NPS have been conducting a separate RI/FS focused on the entire tidal reach of the Anacostia River extending from just north of the Maryland-District of Columbia boundary line to the confluence of the Anacostia and Potomac Rivers. The river-wide RI incorporated the results of the river sampling performed by the Pepco Entities as part of the Benning RI/FS, as well as similar sampling efforts
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 11 — Commitments and Contingencies
conducted by owners of other sites adjacent to this segment of the river and supplemental river sampling conducted by DOEE’s contractor.
On September 30, 2020, DOEE released its Interim ROD.ROD for the Anacostia River sediments. The Interim ROD reflects an adaptive management approach which will require several identified “hot spots” in the river to be addressed first while continuing to conduct studies and to monitor the river to evaluate improvements and determine potential future remediation plans. The adaptive management process chosen by DOEE is less intrusive, provides more long-term
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 13 — Commitments and Contingencies
environmental certainty, is less costly, and allows for site specific remediation plans already underway, including the plan for the Benning Road site to proceed to conclusion.
On July 15, 2022, Pepco received a letter from the District of Columbia's Office of the Attorney General (District)(D.C. OAG) on behalf of DOEE conveying a settlement offer to resolve all PRPs' liability to the District.District of Columbia (District) for their past costs and their anticipated future costs to complete the work for the Interim ROD. Pepco responded on July 27, 2022 to enter into settlement discussions. On October 3, 2023, Pepco and the District entered into another consent decree (the “Anacostia River Consent Decree”) pursuant to which Pepco agreed to pay $47 million to resolve its liability to the District for all past costs to perform the river-wide RI/FS and all future costs to complete the work required by the Interim ROD. This amount will be paid in four equal annual installments beginning a year after the effective date of the Anacostia River Consent Decree. The funds will be deposited into the DOEE’s Clean Land Fund for the District’s costs of the Interim ROD work. The Anacostia River Consent Decree caps Pepco’s liability for these costs and provides Pepco with the right to seek contribution from other potentially responsible parties. The Anacostia River Consent Decree was signed by the judge for the U.S. District Court for the District of Columbia and became effective on April 11, 2024. Exelon, PHI, and Pepco have determined that it is probable that costs for remediation will be incurred and have accrued a liability for Pepco’s payment obligations under the Anacostia Consent Decree and management's best estimate of its share of theany other future Anacostia River response costs. Pepco has concluded that incremental exposure remains reasonably possible, but management cannot reasonably estimate a range of loss beyond the amounts recorded, which are included in the table above.
In addition to the activities associated with the remedial process outlined above, CERCLA separately requires federal and state (here including Washington, D.C.) Natural Resource Trustees (federal or state agencies designated by the President or the relevant state, respectively, or Indian tribes) to conduct an assessment of any damages to natural resources within their jurisdiction as a result of the contamination that is being remediated. The Trustees can seek compensation from responsible parties for such damages, including restoration costs. During the second quarter of 2018, Pepco became aware that the Trustees are in the beginning stages of a Natural Resources Damages (NRD)NRD assessment, a process that often takes many years beyond the remedial decision to complete. Pepco has entered into negotiations with the Trustees to evaluate possible incorporation of NRD assessment and restoration as part of its remedial activities associated with the Benning site to accelerate the NRD benefits for that portion of the Anacostia River Sediment Project ("ARSP") assessment. Pepco has concluded that a loss associated with the eventual NRD assessment is reasonably possible. Due to the very early stage of the assessmentNRD process, Pepco cannot reasonably estimate the final range of loss potentially resulting from this process.
As noted in the Benning Road Site disclosure above, as part of the separation of Exelon and Constellation in February 2022, an assumption agreement was executed transferring any potential future remediation liabilities associated with the Benning Site remediation to a non-utility subsidiary of Exelon. Similarly, any potential future liability associated with the ARSPAnacostia River Sediment Project (ARSP) was also assumed by this entity.
Buzzard Point Site (Exelon, PHI, and Pepco). On December 8, 2022, Pepco received a letter from the D.C. OAG, alleging wholly past violations of the District's stormwater discharge and waste disposal requirements related to operations at the Buzzard Point facility, a 9-acre parcel of waterfront property in Washington, D.C. occupied by an active substation and former steam plant building. The letter also alleged wholly past violations by Pepco of stormwater discharge requirements related to its district-wide system of underground vaults. On October 3, 2023, Pepco entered into a Consent Order with the District of Columbia to resolve the alleged violations without any admission of liability. The Consent Order requires Pepco to pay a civil penalty of $10 million. In addition, Pepco has agreed to assess the environmental conditions at its Buzzard Point facility and conduct any remedial actions deemed necessary as a result of the assessment, and also to assess potential environmental impacts associated with the operation of its underground vaults. The Consent Order was lodged with the District of Columbia Superior Court in January 2024. The court signed and entered the Consent Order, and it became effective on February 2, 2024. Exelon, PHI, and Pepco have accrued a liability for the penalty payments and for the projected costs for the required environmental assessments and remediation. Pepco has concluded that incremental exposure is reasonably possible, but the range of loss cannot be reasonably estimated beyond the amounts included in the table above.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 11 — Commitments and Contingencies
Litigation and Regulatory Matters
Deferred Prosecution Agreement (DPA)DPA and Related Matters (Exelon and ComEd).Exelon and ComEd received a grand jury subpoena in the second quarter of 2019 from the U.S. Attorney’s Office for the Northern District of Illinois (USAO) requiring production of information concerning their lobbying activities in the State of Illinois. On October 4, 2019, Exelon and ComEd received a second grand jury subpoena from the USAO requiring production of records of any communications with certain individuals and entities. On October 22, 2019, the SEC notified Exelon and ComEd that it had also opened an investigation into their lobbying activities. On July 17, 2020, ComEd entered into a DPA with the USAO to resolve the USAO investigation. Under the DPA, the USAO filedinvestigation, which included a single charge alleging that ComEd improperly gave and offered to give jobs, vendor subcontracts, and payments associated with those jobs and subcontracts for the benefit of the former Speaker of the Illinois House of Representatives and the Speaker’s associates, with the intent to influence the Speaker’s action regarding legislation affecting ComEd’s interests. The DPA provides that the USAO will defer any prosecution of such charge and any other criminal or civil case against ComEd in connection with the matters identified therein for a three-year period subject to certain obligations of ComEd, including payment to the U.S. Treasury of $200 million, which was paid in November 2020. The three-year term of the DPA ended on July 17, 2023, and on that same date the court granted the USAO’s motion to dismiss the pending charge against ComEd that had been deferred by the DPA.
On September 28, 2023, Exelon was not made partyand ComEd reached a settlement with the SEC, concluding and resolving in its entirety the SEC investigation, which related to the conduct identified in the DPA that was entered into by ComEd in July 2020 and thereforesuccessfully exited in July 2023. Under the investigation byterms of the USAO into Exelon’s activities ended with no charges being brought against Exelon. The SEC’s investigation remains ongoingsettlement, Exelon has agreed to pay a civil penalty of $46.2 million and Exelon and ComEd have cooperated fullyagreed to cease and intend to continue to cooperate fully with the SEC. Exelondesist from committing or causing any violations and ComEd cannot predict the outcomeany future violations of specified provisions of the SEC investigation. No loss contingency has beenfederal securities laws and rules promulgated thereunder. Exelon recorded an accrual for the full amount of the penalty in the second quarter of 2023, which was reflected in Operating and maintenance expense within Exelon's Consolidated Statements of Operations and ComEd's consolidated financial statements with respect toComprehensive Income and in Accrued expenses on the SEC investigation, as this contingency is neither probable nor reasonably estimable at this time.Consolidated Balance Sheets. Exelon paid the civil penalty in full on October 4, 2023.
Subsequent to Exelon announcing the receipt of the USAO subpoenas, various lawsuits were filed, and various demand letters were received related to the subject of the subpoenas, the conduct described in the DPA and the SEC's investigation, including:
•Four putative class action lawsuits against ComEd and Exelon were filed in federal court on behalf of ComEd customers in the third quarter of 2020 alleging, among other things, civil violations of federal racketeering laws. In addition, the Citizens Utility Board (CUB) filed a motion to intervene in these cases on October 22, 2020 which was granted on December 23, 2020. On December 2, 2020, the court
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 13 — Commitments and Contingencies
appointed interim lead plaintiffs in the federal cases which consisted of counsel for three of the four federal cases. These plaintiffs filed a consolidated complaint on January 5, 2021. CUB also filed its own complaint against ComEd only on the same day. The remaining federal case, Potter, et al. v. Exelon et al, differed from the other lawsuits as it named additional individual defendants not named in the consolidated complaint. However, the Potter plaintiffs voluntarily dismissed their complaint without prejudice on April 5, 2021. ComEd and Exelon moved to dismiss the consolidated class action complaint and CUB’s complaint on February 4, 2021 and briefing was completed on March 22, 2021. On March 25, 2021, the parties agreed, along with state court plaintiffs, discussed below, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On September 9, 2021, the federal court granted Exelon’sComEd and ComEd’sExelon’s motion to dismiss and dismissed the plaintiffs’ and CUB’s federal law claim with prejudice. The federal court also dismissed the related state law claims made by the federal plaintiffs and CUB on jurisdictional grounds. Plaintiffs appealed dismissal of the federal law claim to the Seventh Circuit Court of Appeals. PlaintiffsAppeals, and CUB also refiled their state law claims in state court and moved to consolidate them with the already pending consumer state court class action, discussed below.court. On August 22, 2022, the Seventh Circuit affirmed the dismissal of the consolidated federal cases in their entirety. The time to further appeal has passed and the Seventh Circuit’s decision is final.
•Three putative class action lawsuits against ComEd and Exelon were filed in Illinois state court in the third quarter of 2020 seeking restitution and compensatory damages on behalf of ComEd customers. The cases were consolidated into a single action in October of 2020. In November 2020, CUB filed a motion to intervene in the cases pursuant to an Illinois statute allowing CUB to intervene as a party or otherwise participate on behalf of utility consumers in any proceeding which affects the interest of utility consumers. On November 23, 2020, the court allowed CUB’s intervention, but denied CUB's request to stay these cases. Plaintiffs subsequently filed a consolidated complaint, and ComEd and Exelon filed a motion to dismiss on jurisdictional and substantive grounds on January 11, 2021. Briefing on that motion was completed on March 2, 2021. The parties agreed, on March 25, 2021, along with the federal court plaintiffs discussed above, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On December 23, 2021, the state court granted ComEd and Exelon's motion to dismiss with prejudice. On December 30, 2021, plaintiffs filed a motion to reconsider that dismissal and for permission to amend their complaint. The court denied the plaintiffs' motion on January 21, 2022. Plaintiffs have appealed the court's ruling dismissing their complaint to the First District Court of Appeals. On February 15, 2022, ExelonComEd and ComEdExelon moved to dismiss the federal plaintiffs' refiled state law claims, seeking dismissal on the same legal grounds asserted in their motion to dismiss the original state court plaintiffs' complaint. The court granted dismissal of the refiled state claims on February 16, 2022. The original federal plaintiffs appealed that dismissal on February 18, 2022. The two state appeals were consolidated on March 21, 2022. Plaintiffs' openingOn September 8, 2023, the appellate brief wascourt affirmed the dismissal. On December 22, 2023, plaintiffs filed a petition for leave to appeal to the Illinois Supreme Court, which ComEd and Exelon responded to on August 5, 2022.January 12, 2024. On March 27, 2024, the Illinois Supreme Court denied plaintiffs' petition for leave to appeal. The dismissal of this action is final.
•On November 3, 2022, a plaintiff filed a putative class action complaint in Lake County, Illinois Circuit Court against ComEd and Exelon for unjust enrichment and ComEd's response is currently due November 18, 2022.deceptive business practices in connection with the conduct giving rise to the DPA. Plaintiff seeks an accounting and disgorgement of any benefits ComEd allegedly obtained from said conduct. ComEd and Exelon filed a motion to dismiss the Complaint on February 3, 2023. On June 16, 2023, the court granted ComEd and Exelon's motion to dismiss the action with prejudice. Plaintiff filed its notice of appeal of that dismissal on July 17, 2023. On April 12, 2024, the appellate court issued its decision affirming dismissal of the action.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 11 — Commitments and Contingencies
•A putative class action lawsuit against Exelon and certain officers of Exelon and ComEd was filed in federal court in December 2019 alleging misrepresentations and omissions in Exelon’s SEC filings related to ComEd’s lobbying activities and the related investigations. The complaint was amended on September 16, 2020, to dismiss two of the original defendants and add other defendants, including ComEd. Defendants filed a motion to dismiss in November 2020. The court denied the motion in April 2021. Following mediation, the parties reached a settlement of the lawsuit, under which defendants agreed to pay plaintiffs $173 million. On May 26, 2021, defendants moved2023, plaintiffs filed a motion for preliminary approval of the settlement, which the court to certify its order denying the motion to dismiss for interlocutory appeal. Briefinggranted on the motion was completed in June 2021. That motion was denied on January 28, 2022. In May 2021, the parties each filed respective initial discovery disclosures. On June 9, 2021, defendants filed their answer and affirmative defenses to the complaint and the parties engaged thereafter in discovery. On September 9, 2021, the U.S. government moved to intervene in the lawsuit and stay discovery until the parties entered into an amendment to their protective order that would prohibit the parties from requesting discovery into certain matters, including communications with the U.S. government.2023. The court ordered said amendment to the protective ordergranted final settlement approval on November 15, 2021 and discovery resumed. The court further amended the protective order on October 17, 2022 and extended it until May 15,September 7, 2023. The next court status is set for May 8, 2023. Discovery remains ongoing.settlement was fully covered by insurance and has been paid in full.
•Several shareholders have sent letters to the Exelon Board of Directors fromsince 2020 through May 2022 demanding, among other things, that the Exelon Board of Directors investigate and address alleged breaches of fiduciary duties and other alleged violations by Exelon and ComEd officers and directors related to the conduct described in the DPA. In the first quarter of 2021, the Exelon Board of Directors
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 13 — Commitments and Contingencies
appointed a Special Litigation Committee (SLC) consisting of disinterested and independent parties to investigate and address these shareholders’ allegations and make recommendations to the Exelon Board of Directors based on the outcome of the SLC’s investigation. In July 2021, one of the demand letter shareholders filed a derivative action against current and former Exelon and ComEd officers and directors, and against Exelon, as nominal defendant, asserting the same claims made in its demand letter. Since that date, multiple parties have filed separate derivative lawsuits that were subsequently consolidated. On October 12, 2021, the parties to the derivative action filed an agreed motion to stay thatthe litigation for 120 days in order to allow the SLC to continue its investigation, which the court granted. The stay has been extended several times. Through mediation efforts, a settlement of the derivative claims was reached by the SLC, the Independent Review Committee of the Board (which had been formed in the third quarter of 2022, to ensure the Board’s consideration of any SLC recommendations would be independent and objective), the Board, and certain of the derivative shareholders. On February 3, 2022,June 16, 2023, the SLC filed a motion for preliminary approval of the settlement, attaching the Stipulation and Agreement of Settlement (Stipulation), which contains the terms of the proposed settlement. The proposed settlement terms include but are not limited to: a payment of $40 million to Exelon by Exelon’s insurers of which $10 million constitutes the attorneys’ fee award to be paid to the Settling Shareholders’ counsel; various compliance and disclosure-related reforms; and certain changes in Board and Committee composition. On June 30, 2023, the court granted an extension of the staynon-settling shareholders’ request for another 120 dayslimited discovery into the settlement. Following that discovery, on October 26, 2023, the SLC filed its renewed motion for preliminary approval with supporting submissions filed by the Independent Review Committee, Exelon, and directed the settling shareholders on that same day. The parties to file a status reportbriefing on June 1, 2022. On June 1, 2022, the parties requested a further extension of the stay until September 14, 2022, which the court granted. On September 13, 2022, the court further extended the stay until December 16, 2022 and directed the parties to file a status reportpreliminary approval was completed on December 9, 2022.
•Two separate shareholder requests seeking review of certain Exelon books and records were received in August 2021 and January 2022. Exelon responded to both requests and both shareholders have since sent formal shareholder demands to the Exelon Board, as discussed above.
No loss contingencies have been reflected in Exelon’s and ComEd’s consolidated financial statements with respect to these matters, as such contingencies are neither probable nor reasonably estimable at this time.18, 2024.
In August 2022, the ICC concluded its investigation initiated on August 12, 2021 into rate impacts of conduct admitted in the DPA, including the costs recovered from customers related to the DPA and Exelon's funding of the fine paid by ComEd. On August 17, 2022, the ICC issued its final order accepting ComEd's voluntary customer refund offer of approximately $38 million (of which about $31 million is ICC jurisdictional; the remaining balance is FERC jurisdictional) that resolves the question of whether customer funds were used for DPA related activities. The customer refund includes the cost of every individual or entity that was either (i) identified in the DPA or (ii) identified by ComEd as an associate of the former Speaker of the Illinois House of Representatives in the ICC proceeding. The ICC rejected an argument by the Illinois Attorney General, City of Chicago, and CUB that a costly permanent adjustment also needed to be made to ComEd's ratemaking capital structure on account of Exelon having funded ComEd's payment of theICC’s DPA fine with an equity infusion. On October 6, the ICC denied the application for rehearing filed by the Illinois Attorney General, City of Chicago, and CUB that specifically focused on their capital structure argument. An accrual for the amount of the voluntary customer refund has been recorded in Regulatory liabilities and Other deferred credits and other liabilities in Exelon’s and ComEd’s Consolidated Balance Sheets as of September 30, 2022.investigation is now closed. The ICC jurisdictional refund must bewas made into customers during the April 2023;2023 billing cycle, as required by the ICC. The FERC jurisdictional refund will be made as part of the nextwas included in ComEd's transmission formula rate update proceeding, filed on May 12, 2023. The filed transmission rate, inclusive of the FERC jurisdictional DPA refund, will appear on ComEd retail customers' bills for the June 2023 through May 2024 monthly billing periods, in 2023.the line designated as "Transmission Services Charge." The customer refund will not be recovered in rates or charged to customers and ComEd will not seek or accept reimbursement or indemnification from any source other than Exelon.
Savings Plan Claim (Exelon). On December 6, 2021, seven current and former employees filed a putative ERISA class action suit in U.S. District Court An accrual for the Northern District of Illinois against Exelon, its Board of Directors, the former Board Investment Oversight Committee, the Corporate Investment Committee, individual defendants, and other unnamed fiduciariesamount of the Exelon Corporation Employee Savings Plan (Plan). The complaint alleges that the defendants violated their fiduciary duties under the Plan by including certain investment options that allegedly were more expensive than and underperformed similar passively-managed or other funds availablecustomer refund has been recorded in the marketplace and permitting a third-party administrative service provider/recordkeeper and an investment adviser to charge excessive fees for the services provided. The plaintiffs seek declaratory, equitable and monetary relief on behalf of the Plan and participants. On February 16, 2022, the court granted the parties' stipulated dismissal of the individual named defendants without prejudice. The remaining defendants filed a motion to dismiss the complaint on February 25, 2022. The plaintiffs filed their response brief on March 28, 2022 and the defendants filed their reply on April 11, 2022. On March 4, 2022, the Chamber of Commerce filed a brief of amicus curiae in support of the defendants' motion to dismiss. On September 22, 2022, the court granted Exelon’s motion to dismiss without prejudice. The court granted plaintiffs leave until October 31, 2022 to file an amended complaint. On October 21, 2022, the court granted plaintiffs additional time, until November 30, 2022, to file an amendment complaint. Defendants’ response to any amended complaint would be due January 20, 2023. No loss contingencies have been reflectedRegulatory assets in Exelon’s consolidated financial statements with respect to this matter,and ComEd’s Consolidated Balance Sheets as such contingencies are neither probable nor reasonably estimable at this time.of March 31, 2024.
General (All Registrants). The Registrants are involved in various other litigation matters that are being defended and handled in the ordinary course of business. The Registrants are also from time to time subject to audits and investigations by the FERC and other regulators. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. The Registrants maintain accruals for such losses that are probable of being
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1311 — Commitments and Contingencies
reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. The Registrants maintain accruals for such losses that are probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of reasonably possible loss, particularly where (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.
14.12. Shareholders' Equity (Exelon)
Equity Securities Offering
On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering (the “Offering”) of 11.3 million shares (the “Shares”) of its common stock, no par value (“Common Stock”). The Shares were sold to the underwriters at a price per share of $43.32. Exelon also granted the underwriters an option to purchase an additional 1.695 million shares of Common Stock also at the price per share of $43.32. On August 5, 2022, the underwriters exercised the option in full. The net proceeds from the Offering and the exercise of the underwriters’ option were $563 million before expenses paid by Exelon. Exelon used the proceeds together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See Note 11 — Debt and Credit Agreements for additional information on Exelon’s term loan.
At-the-Market (ATM) Program
On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”), with certain sales agents and forward sellers and certain forward purchasers, establishing an ATM equity distribution program under which it may offer and sell shares of its Common Stock,stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of Common Stockstock under the Equity Distribution Agreement and may, at any time, suspend or terminate offers and sales under the Equity Distribution Agreement. As of September 30, 2022,In November and December 2023, Exelon has not issued anyapproximately 3.6 million shares of Common Stock understock at an average gross price of $39.58 per share. The net proceeds from these issuances were $140 million, which were used for general corporate purposes. As of March 31, 2024, $858 million of Common stock remained available for sale pursuant to the ATM program and has not entered into any forward sale agreements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 15 —13. Changes in Accumulated Other Comprehensive Income
15. Changes in Accumulated Other Comprehensive Income (Loss) (Exelon)
The following tables presenttable presents changes in Exelon's AOCI, net of tax, by component:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | Foreign
Currency
Items | | | | Total |
| Balance as of June 30, 2022 | $ | — | | | $ | (701) | | | $ | — | | | | | $ | (701) | |
| | | | | | | | | |
| Amounts reclassified from AOCI | — | | | 9 | | | — | | | | | 9 | |
| Net current-period OCI | — | | | 9 | | | — | | | | | 9 | |
| Balance as of September 30, 2022 | $ | — | | | $ | (692) | | | $ | — | | | | | $ | (692) | |
| | Three Months Ended September 30, 2021 | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | Foreign
Currency
Items | | | Total |
| Balance as of June 30, 2021 | $ | (5) | | | $ | (3,264) | | | $ | (20) | | | | $ | (3,289) | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | | | | | Total |
| Balance at December 31, 2023 | |
| OCI before reclassifications | OCI before reclassifications | — | | | 14 | | | (3) | | | | 11 | |
| Amounts reclassified from AOCI | Amounts reclassified from AOCI | — | | | 55 | | | — | | | | 55 | |
| Net current-period OCI | Net current-period OCI | — | | | 69 | | | (3) | | | | 66 | |
| Balance as of September 30, 2021 | $ | (5) | | | $ | (3,195) | | | $ | (23) | | | | $ | (3,223) | |
| Balance at March 31, 2024 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | Foreign
Currency
Items | | | | Total |
| Balance as of December 31, 2021 | $ | (6) | | | $ | (2,721) | | | $ | (23) | | | | | $ | (2,750) | |
| Separation of Constellation | 6 | | | 1,994 | | | 23 | | | | | 2,023 | |
| OCI before reclassifications | — | | | 2 | | | — | | | | | 2 | |
| Amounts reclassified from AOCI | — | | | 33 | | | — | | | | | 33 | |
| Net current-period OCI | — | | | 35 | | | — | | | | | 35 | |
| Balance as of September 30, 2022 | $ | — | | | $ | (692) | | | $ | — | | | | | $ | (692) | |
| | Nine Months Ended September 30, 2021 | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | Foreign
Currency
Items | | | Total |
| Balance as of December 31, 2020 | $ | (5) | | | $ | (3,372) | | | $ | (23) | | | | $ | (3,400) | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | | Cash Flow Hedges | | Pension and Non-Pension Postretirement Benefit Plan Items(a) | | | | | | Total |
| Balance at December 31, 2022 | |
| | OCI before reclassifications | |
| OCI before reclassifications | |
| OCI before reclassifications | OCI before reclassifications | (1) | | | 15 | | | — | | | | 14 | |
| Amounts reclassified from AOCI | Amounts reclassified from AOCI | — | | | 163 | | | — | | | | 163 | |
| Net current-period OCI | Net current-period OCI | (1) | | | 178 | | | — | | | | 177 | |
| Balance as of September 30, 2021 | $ | (6) | | | $ | (3,194) | | | $ | (23) | | | | $ | (3,223) | |
| Balance at March 31, 2023 | |
|
(a)This AOCI component is included in the computation of net periodic pension and OPEB cost. Additionally, as of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. See Note 914 — Retirement Benefits of the 2023 Form 10-K and Note 7 — Retirement Benefits for additional information. See Exelon's Statements of Operations and Comprehensive Income for individual components of AOCI.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1513 — Changes in Accumulated Other Comprehensive Income
The following table presents incomeIncome tax benefit (expense) allocated to each component of Exelon's otherOther comprehensive income (loss):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, | | |
| 2022 | | 2021 | | 2022 | | 2021 | | | | |
| Pension and non-pension postretirement benefit plans: | | | | | | | | | | | |
| Prior service benefit reclassified to periodic benefit cost | $ | — | | | $ | 1 | | | $ | — | | | $ | 3 | | | | | |
| Actuarial loss reclassified to periodic benefit cost | (3) | | | (19) | | | (11) | | | (57) | | | | | |
| Pension and non-pension postretirement benefit plans valuation adjustment | — | | | (7) | | | — | | | (8) | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
| | | | | 2024 | | 2023 |
| Pension and non-pension postretirement benefit plans: | | | | | | | |
| | | | | | | |
| Actuarial losses reclassified to periodic benefit cost | | | | | $ | (2) | | | $ | (1) | |
| Pension and non-pension postretirement benefit plans valuation adjustments | | | | | 8 | | | 3 | |
| Unrealized gains on cash flow hedges | | | | | (10) | | | (1) | |
| | | | | | | |
16.14. Supplemental Financial Information (All Registrants)
Supplemental Statement of Operations Information
The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Operations and Comprehensive Income:
| | Taxes other than income taxes |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended September 30, 2022 | | | | | | | | | | | | | | | |
| Taxes other than income taxes | | | Taxes other than income taxes |
| Exelon | | | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended March 31, 2024 | |
Utility taxes(a) | |
Utility taxes(a) | |
Utility taxes(a) | Utility taxes(a) | $ | 244 | | | $ | 84 | | | $ | 51 | | | $ | 22 | | | $ | 87 | | | $ | 79 | | | $ | 7 | | | $ | 1 | |
| Property | Property | 99 | | | 10 | | | 4 | | | 50 | | | 35 | | | 23 | | | 11 | | | 1 | |
| Payroll | Payroll | 28 | | | 7 | | | 5 | | | 4 | | | 7 | | | 2 | | | 1 | | | — | |
| | Three Months Ended September 30, 2021 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
Utility taxes(a) | |
Utility taxes(a) | |
Utility taxes(a) | Utility taxes(a) | $ | 215 | | | $ | 67 | | | $ | 41 | | | $ | 21 | | | $ | 86 | | | $ | 80 | | | $ | 6 | | | $ | — | |
| Property | Property | 98 | | | 13 | | | 5 | | | 46 | | | 34 | | | 23 | | | 10 | | | 1 | |
| Payroll | Payroll | 33 | | | 7 | | | 4 | | | 5 | | | 7 | | | 2 | | | 1 | | | 1 | |
| | Nine Months Ended September 30, 2022 | | |
Utility taxes(a) | $ | 667 | | | $ | 233 | | | $ | 126 | | | $ | 70 | | | $ | 238 | | | $ | 216 | | | $ | 19 | | | $ | 3 | |
| Property | 287 | | | 30 | | | 12 | | | 142 | | | 103 | | | 70 | | | 31 | | | 2 | |
| Payroll | 92 | | | 21 | | | 14 | | | 13 | | | 21 | | | 5 | | | 4 | | | 2 | |
| | Nine Months Ended September 30, 2021 | |
Utility taxes(a) | $ | 592 | | | $ | 188 | | | $ | 107 | | | $ | 66 | | | $ | 231 | | | $ | 212 | | | $ | 17 | | | $ | 2 | |
| Property | 271 | | | 30 | | | 13 | | | 131 | | | 97 | | | 65 | | | 30 | | | 2 | |
| Payroll | 97 | | | 20 | | | 12 | | | 14 | | | 21 | | | 5 | | | 4 | | | 2 | |
|
(a)The Registrants' utility taxes represent municipal and state utility taxes and gross receipts taxes related to their operating revenues. The offsetting collection of utility taxes from customers is recorded in revenues in the Registrants’ Consolidated Statements of Operations and Comprehensive Income.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other, net |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended March 31, 2024 | | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 40 | | | $ | 10 | | | $ | 8 | | | $ | 7 | | | $ | 15 | | | $ | 12 | | | $ | 3 | | | $ | — | |
| Non-service net periodic benefit cost | (7) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 | | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 38 | | | $ | 10 | | | $ | 6 | | | $ | 3 | | | $ | 19 | | | $ | 14 | | | $ | 2 | | | $ | 3 | |
| Non-service net periodic benefit cost | (1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Supplemental Cash Flow Information
The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Cash Flows.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1614 — Supplemental Financial Information
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other, Net |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended September 30, 2022 | | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 38 | | | $ | 10 | | | $ | 7 | | | $ | 5 | | | $ | 16 | | | $ | 12 | | | $ | 2 | | | $ | 2 | |
| Non-service net periodic benefit cost | 16 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 36 | | | $ | 10 | | | $ | 7 | | | $ | 7 | | | $ | 12 | | | $ | 9 | | | $ | 2 | | | $ | 1 | |
| Non-service net periodic benefit cost | 19 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation, amortization, and accretion |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended March 31, 2024 | | | | | | | | | | | | | | | |
Property, plant, and equipment(a) | $ | 711 | | | $ | 284 | | | $ | 101 | | | $ | 122 | | | $ | 190 | | | $ | 81 | | | $ | 52 | | | $ | 53 | |
Amortization of regulatory assets and liabilities, net(a) | 166 | | | 78 | | | 3 | | | 28 | | | 56 | | | 26 | | | 9 | | | 21 | |
Amortization of intangible assets, net(a) | 2 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
ARO accretion(b) | 1 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total depreciation, amortization and accretion | $ | 880 | | | $ | 362 | | | $ | 104 | | | $ | 150 | | | $ | 246 | | | $ | 107 | | | $ | 61 | | | $ | 74 | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 | | | | | | | | | | | | | | | |
Property, plant, and equipment(a) | $ | 680 | | | $ | 267 | | | $ | 95 | | | $ | 124 | | | $ | 180 | | | $ | 76 | | | $ | 51 | | | $ | 47 | |
Amortization of regulatory assets and liabilities, net(a) | 178 | | | 71 | | | 3 | | | 43 | | | 61 | | | 32 | | | 9 | | | 20 | |
Amortization of intangible assets, net(a) | 2 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Total depreciation and amortization | $ | 860 | | | $ | 338 | | | $ | 98 | | | $ | 167 | | | $ | 241 | | | $ | 108 | | | $ | 60 | | | $ | 67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 112 | | | $ | 28 | | | $ | 22 | | | $ | 17 | | | $ | 45 | | | $ | 35 | | | $ | 5 | | | $ | 5 | |
| Non-service net periodic benefit cost | 48 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| AFUDC — Equity | $ | 99 | | | $ | 23 | | | $ | 19 | | | $ | 21 | | | $ | 36 | | | $ | 30 | | | $ | 4 | | | $ | 2 | |
| Non-service net periodic benefit cost | 64 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Supplemental Cash Flow Information
The following tables provide additional information about material items recorded(a)Included in Depreciation and amortization expense in the Registrants' Consolidated Statements of Cash Flows.Operations and Comprehensive Income.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization |
| Exelon(a) | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | |
Property, plant, and equipment(b) | $ | 2,024 | | | $ | 770 | | | $ | 267 | | | $ | 355 | | | $ | 502 | | | $ | 214 | | | $ | 141 | | | $ | 126 | |
Amortization of regulatory assets(b) | 532 | | | 212 | | | 10 | | | 115 | | | 195 | | | 98 | | | 31 | | | 66 | |
Amortization of intangible assets, net(b) | 10 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Amortization of energy contract assets and liabilities(c) | 3 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Nuclear fuel(d) | 66 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
ARO accretion(e) | 44 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total depreciation, amortization, and accretion | $ | 2,679 | | | $ | 982 | | | $ | 277 | | | $ | 470 | | | $ | 697 | | | $ | 312 | | | $ | 172 | | | $ | 192 | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | |
Property, plant, and equipment(b) | $ | 4,505 | | | $ | 721 | | | $ | 249 | | | $ | 324 | | | $ | 467 | | | $ | 204 | | | $ | 126 | | | $ | 115 | |
Amortization of regulatory assets(b) | 439 | | | 172 | | | 10 | | | 110 | | | 147 | | | 98 | | | 31 | | | 18 | |
Amortization of intangible assets, net(b) | 44 | | | — | | | — | | | — | | | — | | | — | | | — | | | ��� | |
Amortization of energy contract assets and liabilities(c) | 23 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Nuclear fuel(d) | 810 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
ARO accretion(e) | 383 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total depreciation, amortization, and accretion | $ | 6,204 | | | $ | 893 | | | $ | 259 | | | $ | 434 | | | $ | 614 | | | $ | 302 | | | $ | 157 | | | $ | 133 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other non-cash operating activities |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Three Months Ended March 31, 2024 | | | | | | | | | | | | | | | |
| Pension and OPEB costs | $ | 61 | | | $ | 17 | | | $ | — | | | $ | 15 | | | $ | 23 | | | $ | 9 | | | $ | 4 | | | $ | 3 | |
| Allowance for credit losses | 63 | | | 2 | | | 27 | | | 12 | | | 22 | | | 16 | | | 3 | | | 3 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
True-up adjustments to decoupling mechanisms and formula rates(a) | (91) | | | (19) | | | 2 | | | (43) | | | (31) | | | (29) | | | 4 | | | (6) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Amortization of operating ROU asset | 9 | | | — | | | — | | | 2 | | | 6 | | | 1 | | | 2 | | | 1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| AFUDC — Equity | (40) | | | (10) | | | (8) | | | (7) | | | (15) | | | (12) | | | (3) | | | — | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 | | | | | | | | | | | | | | | |
| Pension and OPEB costs (benefit) | $ | 45 | | | $ | 6 | | | $ | (3) | | | $ | 14 | | | $ | 24 | | | $ | 8 | | | $ | 4 | | | $ | 4 | |
| Allowance for credit losses | 70 | | | — | | | 37 | | | 18 | | | 15 | | | 7 | | | 5 | | | 3 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
True-up adjustments to decoupling mechanisms and formula rates(a) | (282) | | | (153) | | | 4 | | | (65) | | | (68) | | | (39) | | | (11) | | | (18) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Long-term incentive plan | 2 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Amortization of operating ROU asset | 10 | | | 1 | | | — | | | 1 | | | 7 | | | 1 | | | 2 | | | 1 | |
| | | | | | | | | | | | | | | |
| Change in environmental liabilities | 25 | | | — | | | — | | | — | | | 25 | | | 25 | | | — | | | — | |
| AFUDC — Equity | (38) | | | (10) | | | (6) | | | (3) | | | (19) | | | (14) | | | (2) | | | (3) | |
__________
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1614 — Supplemental Financial Information
__________
(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.
(b)Included in Depreciation and amortization in the Registrants' Consolidated Statements of Operations and Comprehensive Income.
(c)Included in Operating revenues or Purchased power and fuel expense in Exelon’s Consolidated Statements of Operations and Comprehensive Income.
(d)Included in Purchased fuel expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.
(e)Included in Operating and maintenance expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other non-cash operating activities |
| Exelon(a) | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Nine Months Ended September 30, 2022 | | | | | | | | | | | | | | | |
| Pension and non-pension postretirement benefit costs | $ | 124 | | | $ | 45 | | | $ | (6) | | | $ | 34 | | | $ | 39 | | | $ | 6 | | | $ | 3 | | | $ | 9 | |
| Allowance for credit losses | 130 | | | 40 | | | 32 | | | 18 | | | 42 | | | 21 | | | 9 | | | 12 | |
| Other decommissioning-related activity | 36 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Energy-related options | 60 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
True-up adjustments to decoupling mechanisms and formula rates(b) | (92) | | | (163) | | | (1) | | | 40 | | | 33 | | | 15 | | | 3 | | | 14 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Long-term incentive plan | 35 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Amortization of operating ROU asset | 47 | | | 1 | | | — | | | 14 | | | 21 | | | 5 | | | 6 | | | 3 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| AFUDC — Equity | (112) | | | (28) | | | (22) | | | (17) | | | (45) | | | (35) | | | (5) | | | (5) | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | |
| Pension and non-pension postretirement benefit costs | $ | 304 | | | $ | 97 | | | $ | 5 | | | $ | 45 | | | $ | 36 | | | $ | 5 | | | $ | 2 | | | $ | 8 | |
| Allowance for credit losses | 155 | | | 34 | | | 36 | | | 7 | | | 18 | | | 9 | | | 3 | | | 6 | |
| Other decommissioning-related activity | (810) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Energy-related options | 45 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
True-up adjustments to decoupling mechanisms and formula rates(b) | (129) | | | (32) | | | (20) | | | 17 | | | (94) | | | (54) | | | (17) | | | (23) | |
| Severance costs | (67) | | | 1 | | | — | | | — | | | 1 | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| Long-term incentive plan | 94 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Amortization of operating ROU asset | 146 | | | 2 | | | — | | | 22 | | | 21 | | | 5 | | | 7 | | | 3 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| AFUDC — Equity | (99) | | | (23) | | | (19) | | | (21) | | | (36) | | | (30) | | | (4) | | | (2) | |
__________
(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.
(b)For ComEd, reflects the true-up adjustments in regulatoryRegulatory assets and liabilities associated with its distribution, energy efficiency, distributed generation, and transmission formula rates. For PECO, reflects the change in regulatoryRegulatory assets and liabilities associated with its transmission formula rates. For BGE, Pepco, DPL, and ACE, reflects the change in regulatoryRegulatory assets and liabilities associated with their decoupling mechanisms and transmission formula rates. See Note 3 — Regulatory Matters of the 2021 Recast2023 Form 10-K for additional information.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 16 — Supplemental Financial Information
The following tables provide a reconciliation of cash, cash equivalents, and restricted cash reported within the Registrants’ Consolidated Balance Sheets that sum to the total of the same amounts in their Consolidated Statements of Cash Flows.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| September 30, 2022 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 446 | | | $ | 63 | | | $ | 94 | | | $ | 20 | | | $ | 219 | | | $ | 21 | | | $ | 49 | | | $ | 112 | |
| Restricted cash and cash equivalents | 744 | | | 342 | | | 9 | | | 130 | | | 234 | | | 77 | | | 157 | | | — | |
| Restricted cash included in other long-term assets | 83 | | | 83 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,273 | | | $ | 488 | | | $ | 103 | | | $ | 150 | | | $ | 453 | | | $ | 98 | | | $ | 206 | | | $ | 112 | |
| | | | | | | | | | | | | | | |
| December 31, 2021 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 672 | | | $ | 131 | | | $ | 36 | | | $ | 51 | | | $ | 136 | | | $ | 34 | | | $ | 28 | | | $ | 29 | |
| Restricted cash and cash equivalents | 321 | | | 210 | | | 8 | | | 4 | | | 77 | | | 34 | | | 43 | | | — | |
| Restricted cash included in other long-term assets | 44 | | | 43 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Cash, restricted cash, and cash equivalents from discontinued operations | 582 | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,619 | | | $ | 384 | | | $ | 44 | | | $ | 55 | | | $ | 213 | | | $ | 68 | | | $ | 71 | | | $ | 29 | |
| | | | | | | | | | | | | | | |
| September 30, 2021 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 2,957 | | | $ | 241 | | | $ | 344 | | | $ | 225 | | | $ | 82 | | | $ | 19 | | | $ | 13 | | | $ | 16 | |
| Restricted cash and cash equivalents | 473 | | | 276 | | | 8 | | | 27 | | | 71 | | | 41 | | | 26 | | | 5 | |
| Restricted cash included in other long-term assets | 54 | | | 44 | | | — | | | — | | | 9 | | | — | | | — | | | 9 | |
Total cash, restricted cash, and cash equivalents(a) | $ | 3,484 | | | $ | 561 | | | $ | 352 | | | $ | 252 | | | $ | 162 | | | $ | 60 | | | $ | 39 | | | $ | 30 | |
| | | | | | | | | | | | | | | |
| December 31, 2020 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 432 | | | $ | 83 | | | $ | 19 | | | $ | 144 | | | $ | 111 | | | $ | 30 | | | $ | 15 | | | $ | 17 | |
| Restricted cash and cash equivalents | 349 | | | 279 | | | 7 | | | 1 | | | 39 | | | 35 | | | — | | | 3 | |
| Restricted cash included in other long-term assets | 53 | | | 43 | | | — | | | — | | | 10 | | | — | | | — | | | 10 | |
| Cash, restricted cash, and cash equivalents from discontinued operations | 332 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,166 | | | $ | 405 | | | $ | 26 | | | $ | 145 | | | $ | 160 | | | $ | 65 | | | $ | 15 | | | $ | 30 | |
__________(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash, cash equivalents, and restricted cash |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at March 31, 2024 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 720 | | | $ | 100 | | | $ | 39 | | | $ | 27 | | | $ | 504 | | | $ | 198 | | | $ | 269 | | | $ | 27 | |
| Restricted cash and cash equivalents | 489 | | | 428 | | | 9 | | | — | | | 23 | | | 22 | | | 1 | | | — | |
| Restricted cash included in Other deferred debits and other assets | 99 | | | 99 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,308 | | | $ | 627 | | | $ | 48 | | | $ | 27 | | | $ | 527 | | | $ | 220 | | | $ | 270 | | | $ | 27 | |
| | | | | | | | | | | | | | | |
| Balance at December 31, 2023 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 445 | | | $ | 110 | | | $ | 42 | | | $ | 47 | | | $ | 180 | | | $ | 48 | | | $ | 16 | | | $ | 21 | |
| Restricted cash and cash equivalents | 482 | | | 402 | | | 9 | | | 1 | | | 24 | | | 24 | | | — | | | — | |
| Restricted cash included in Other deferred debits and other assets | 174 | | | 174 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,101 | | | $ | 686 | | | $ | 51 | | | $ | 48 | | | $ | 204 | | | $ | 72 | | | $ | 16 | | | $ | 21 | |
| | | | | | | | | | | | | | | |
| Balance at March 31, 2023 | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 522 | | | $ | 75 | | | $ | 27 | | | $ | 20 | | | $ | 367 | | | $ | 126 | | | $ | 142 | | | $ | 71 | |
| Restricted cash and cash equivalents | 381 | | | 323 | | | 9 | | | 1 | | | 29 | | | 27 | | | 1 | | | — | |
| Restricted cash included in Other deferred debits and other assets | 180 | | | 180 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total cash, restricted cash, and cash equivalents | $ | 1,083 | | | $ | 578 | | | $ | 36 | | | $ | 21 | | | $ | 396 | | | $ | 153 | | | $ | 143 | | | $ | 71 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
For additional information on restricted cash see Note 1 — Significant Accounting Policies of the 2021 Recast2023 Form 10-K.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 16 — Supplemental Financial Information
Supplemental Balance Sheet Information
The following table provides additional information about material items recorded in the Registrants' Consolidated Balance Sheets.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accrued expenses |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| September 30, 2022 | | | | | | | | | | | | | | | |
Compensation-related accruals(a) | $ | 501 | | | $ | 152 | | | $ | 63 | | | $ | 56 | | | $ | 89 | | | $ | 26 | | | $ | 16 | | | $ | 13 | |
| Taxes accrued | 317 | | | 115 | | | 41 | | | 85 | | | 90 | | | 67 | | | 12 | | | 4 | |
| Interest accrued | 341 | | | 66 | | | 43 | | | 44 | | | 73 | | | 34 | | | 21 | | | 16 | |
| | | | | | | | | | | | | | | |
| December 31, 2021 | | | | | | | | | | | | | | | |
Compensation-related accruals(a) | $ | 596 | | | $ | 155 | | | $ | 77 | | | $ | 78 | | | $ | 113 | | | $ | 35 | | | $ | 20 | | | $ | 17 | |
| Taxes accrued | 253 | | | 94 | | | 14 | | | 53 | | | 96 | | | 88 | | | 9 | | | 11 | |
| Interest accrued | 297 | | | 116 | | | 41 | | | 44 | | | 52 | | | 28 | | | 8 | | | 11 | |
__________
(a)Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.
Book Overdrafts (Exelon, PHI, DPL)
Book overdrafts representing outstanding checks in excess of funds on deposit are included in Other current liabilities on the Registrants' Consolidated Balance Sheets. The balance of DPL's book overdrafts was $28 million and $4 million as of September 30, 2022 and December 31, 2021, respectively.
17. Related Party Transactions (All Registrants)
Utility Registrants' expense with Generation
The Utility Registrants incurred expenses from transactions with the Generation affiliate as described in the footnotes to the table below prior to separation on February 1, 2022. Such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
ComEd(a) | $ | — | | | $ | 94 | | | $ | 59 | | | $ | 256 | |
PECO(b) | — | | | 59 | | | 33 | | | 142 | |
BGE(c) | — | | | 65 | | | 18 | | | 195 | |
| PHI | — | | | 99 | | | 51 | | | 276 | |
Pepco(d) | — | | | 69 | | | 39 | | | 199 | |
DPL(e) | — | | | 25 | | | 10 | | | 63 | |
ACE(f) | — | | | 5 | | | 2 | | | 14 | |
__________(a)ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.
(b)PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.
(c)BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.
(d)Pepco received electric supply from Generation under contracts executed through Pepco's competitive procurement process approved by the MDPSC and DCPSC.
(e)DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.
(f)ACE received electric supply from Generation under contracts executed through ACE's competitive procurement process approved by the NJBPU.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1714 — Supplemental Financial Information
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accrued expenses |
| Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Balance at March 31, 2024 | | | | | | | | | | | | | | | |
Compensation-related accruals(a) | $ | 349 | | | $ | 102 | | | $ | 46 | | | $ | 46 | | | $ | 59 | | | $ | 19 | | | $ | 12 | | | $ | 8 | |
| Taxes accrued | 237 | | | 214 | | | 93 | | | 140 | | | 170 | | | 135 | | | 42 | | | 16 | |
| Interest accrued | 408 | | | 80 | | | 54 | | | 59 | | | 87 | | | 40 | | | 29 | | | 17 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Balance at December 31, 2023 | | | | | | | | | | | | | | | |
Compensation-related accruals(a) | $ | 661 | | | $ | 206 | | | $ | 87 | | | $ | 81 | | | $ | 107 | | | $ | 27 | | | $ | 17 | | | $ | 12 | |
| Taxes accrued | 221 | | | 204 | | | 96 | | | 75 | | | 137 | | | 116 | | | 30 | | | 10 | |
| Interest accrued | 414 | | | 148 | | | 49 | | | 44 | | | 72 | | | 38 | | | 13 | | | 15 | |
__________
(a)Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.
15. Related Party Transactions (All Registrants)
Service Company Costs for Corporate Support
The Registrants receive a variety of corporate support services from BSC. Pepco, DPL, and ACE also receive corporate support services from PHISCO. See Note 1 — Significant Accounting Policies for additional information regarding BSC and PHISCO.
The following table presents the service company costs allocated to the Registrants:
| | Operating and maintenance from affiliates | | Capitalized costs |
| Three Months Ended September 30, | | Nine Months Ended September 30, | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 |
| | Operating and maintenance from affiliates | |
| | Operating and maintenance from affiliates | |
| | Operating and maintenance from affiliates | | | Capitalized costs |
| | Three Months Ended March 31, | |
| | 2024 | |
| | 2024 | |
| | 2024 | |
| Exelon | |
| Exelon | |
| Exelon | Exelon | | | | | | | | | | | | | | | | |
| BSC | BSC | | $ | 156 | | | $ | 106 | | | $ | 500 | | | $ | 355 | |
| BSC | |
| BSC | |
| PHISCO | |
| PHISCO | |
| PHISCO | PHISCO | | 20 | | | 18 | | | 60 | | | 54 | |
| ComEd | ComEd | |
| ComEd | |
| ComEd | |
| BSC | |
| BSC | |
| BSC | BSC | | $ | 69 | | | $ | 71 | | | $ | 234 | | | $ | 214 | | | 70 | | | 47 | | | 222 | | | 148 | |
| PECO | PECO | |
| PECO | |
| PECO | |
| BSC | |
| BSC | |
| BSC | BSC | | 44 | | | 41 | | | 140 | | | 120 | | | 24 | | | 12 | | | 80 | | | 57 | |
| BGE | BGE | |
| BGE | |
| BGE | |
| BSC | |
| BSC | |
| BSC | BSC | | 46 | | | 45 | | | 148 | | | 133 | | | 26 | | | 20 | | | 86 | | | 62 | |
| PHI | PHI | |
| PHI | |
| PHI | |
| BSC | |
| BSC | |
| BSC | BSC | | 39 | | | 40 | | | 135 | | | 116 | | | 36 | | | 27 | | | 112 | | | 88 | |
| PHISCO | PHISCO | | — | | | — | | | — | | | — | | | 20 | | | 18 | | | 60 | | | 54 | |
| PHISCO | |
| PHISCO | |
| Pepco | |
| Pepco | |
| Pepco | Pepco | |
| BSC | BSC | | 24 | | | 23 | | | 80 | | | 68 | | | 13 | | | 11 | | | 41 | | | 36 | |
| BSC | |
| BSC | |
| PHISCO | |
| PHISCO | |
| PHISCO | PHISCO | | 28 | | | 26 | | | 86 | | | 84 | | | 8 | | | 7 | | | 24 | | | 22 | |
| | DPL | DPL | |
| | DPL | |
| | DPL | |
| BSC | BSC | | 16 | | | 14 | | | 51 | | | 43 | | | 11 | | | 10 | | | 34 | | | 29 | |
| BSC | |
| BSC | |
| PHISCO | |
| PHISCO | |
| PHISCO | PHISCO | | 24 | | | 24 | | | 73 | | | 73 | | | 7 | | | 6 | | | 20 | | | 17 | |
| | ACE | ACE | |
| | ACE | |
| | ACE | |
| BSC | |
| BSC | |
| BSC | BSC | | 13 | | | 14 | | | 42 | | | 37 | | | 12 | | | 7 | | | 37 | | | 22 | |
| PHISCO | PHISCO | | 20 | | | 21 | | | 63 | | | 64 | | | 5 | | | 5 | | | 16 | | | 15 | |
| PHISCO | |
| PHISCO | |
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 1715 — Related Party Transactions
Current Receivables from/Payables to affiliatesAffiliates
The following tables present current receivablesReceivables from affiliates and current payablesPayables to affiliates:
September 30, 2022March 31, 2024
| | | Receivables from affiliates: | |
| Payables to affiliates: | | ComEd | | PECO | | BGE | | | Pepco | | DPL | | ACE | | BSC | | PHISCO | | Other | | Total |
| | | Receivables from affiliates: | |
| | | Receivables from affiliates: | |
| | | Receivables from affiliates: | |
| Payables to affiliates: | |
| Payables to affiliates: | |
| Payables to affiliates: | | | ComEd | | PECO | | BGE | | | | Pepco | | DPL | | ACE | | BSC | | PHISCO | | Other | | Total |
| ComEd | ComEd | | | | $ | — | | | $ | — | | | | $ | — | | | $ | — | | | $ | — | | | $ | 50 | | | $ | — | | | $ | 4 | | | $ | 54 | |
| PECO | PECO | | $ | — | | | — | | | | — | | | — | | | — | | | 30 | | | — | | | 6 | | | 36 | |
| BGE | BGE | | — | | | — | | | | — | | | — | | | — | | | 31 | | | — | | | 1 | | | 32 | |
| PHI | PHI | | — | | | — | | | — | | | | — | | | — | | | — | | | 4 | | | — | | | 10 | | | 14 | |
| Pepco | Pepco | | — | | | — | | | — | | | | | — | | | — | | | 14 | | | 13 | | | 1 | | | 28 | |
| DPL | DPL | | — | | | — | | | — | | | | — | | | — | | | 13 | | | 10 | | | 1 | | | 24 | |
| ACE | ACE | | — | | | — | | | — | | | | — | | | — | | | 10 | | | 9 | | | 1 | | | 20 | |
| Other | Other | | 3 | | | 1 | | | — | | | | — | | | — | | | 1 | | | 9 | | | — | | | 14 | |
| Total | Total | | $ | 3 | | | $ | 1 | | | $ | — | | | | $ | — | | | $ | — | | | $ | 1 | | | $ | 161 | | | $ | 32 | | | $ | 24 | | | $ | 222 | |
|
December 31, 20212023
| | | Receivables from affiliates: | |
| Payables to affiliates: | | ComEd | | PECO | | BGE | | | Pepco | | DPL | | ACE | | Generation | | BSC | | PHISCO | | Other | | Total |
| | | Receivables from affiliates: | |
| | | Receivables from affiliates: | |
| | | Receivables from affiliates: | |
| Payables to affiliates: | |
| Payables to affiliates: | |
| Payables to affiliates: | | | ComEd | | PECO | | BGE | | | | Pepco | | DPL | | ACE | | BSC | | PHISCO | | Other | | Total |
| ComEd | ComEd | | | | $ | — | | | $ | — | | | | $ | — | | | $ | — | | | $ | — | | | $ | 41 | | | $ | 71 | | | $ | — | | | $ | 9 | | | $ | 121 | |
| PECO | PECO | | $ | — | | | — | | | | — | | | — | | | — | | | 30 | | | 36 | | | — | | | 4 | | | 70 | |
| BGE | BGE | | — | | | — | | | | | — | | | — | | | — | | | 4 | | | 41 | | | — | | | 3 | | | 48 | |
| PHI | PHI | | — | | | 1 | | | — | | | | — | | | — | | | 1 | | | — | | | 5 | | | — | | | 9 | | | 16 | |
| Pepco | Pepco | | — | | | — | | | 1 | | | | 1 | | | 1 | | | 20 | | | 21 | | | 12 | | | 3 | | | 59 | |
| DPL | DPL | | — | | | — | | | — | | | | — | | | — | | | 4 | | | 17 | | | 11 | | | 1 | | | 33 | |
| ACE | ACE | | — | | | — | | | — | | | | — | | | — | | | 7 | | | 13 | | | 9 | | | 2 | | | 31 | |
| Generation | | 13 | | | — | | | — | | | | — | | | — | | | — | | | 102 | | | — | | | 16 | | | 131 | |
| Other | Other | | 3 | | | — | | | — | | | | — | | | — | | | — | | | 11 | | | — | | | — | | | 14 | |
| Total | Total | | $ | 16 | | | $ | 1 | | | $ | 1 | | | | $ | — | | | $ | 1 | | | $ | 2 | | | $ | 117 | | | $ | 306 | | | $ | 32 | | | $ | 47 | | | $ | 523 | |
|
Borrowings from Exelon/PHI intercompany money pool
To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing both Exelon and PHI operate an intercompany money pool. PECO and PHI Corporate participate in the Exelon intercompany money pool. Pepco, DPL, and ACE participate in the PHI intercompany money pool.
Noncurrent Receivables from affiliates
ComEd and PECO have noncurrent receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. The receivables are recorded in Receivable related to Regulatory Agreement Units as of September 30, 2022 and in noncurrent Receivables from affiliates as of December 31, 2021. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements of the 2021 Recast Form 10-K for additional information.
Long-term debt to financing trusts
The following table presents Long-term debt to financing trusts:
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 17 — Related Party Transactions
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
| Exelon | | ComEd | | PECO | | Exelon | | ComEd | | PECO |
| ComEd Financing III | $ | 206 | | | $ | 205 | | | $ | — | | | $ | 206 | | | $ | 205 | | | $ | — | |
| PECO Trust III | 81 | | | — | | | 81 | | | 81 | | | — | | | 81 | |
| PECO Trust IV | 103 | | | — | | | 103 | | | 103 | | | — | | | 103 | |
| Total | $ | 390 | | | $ | 205 | | | $ | 184 | | | $ | 390 | | | $ | 205 | | | $ | 184 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
| Exelon | | ComEd | | PECO | | Exelon | | ComEd | | PECO |
| ComEd Financing III | $ | 206 | | | $ | 205 | | | $ | — | | | $ | 206 | | | $ | 205 | | | $ | — | |
| PECO Trust III | 81 | | | — | | | 81 | | | 81 | | | — | | | 81 | |
| PECO Trust IV | 103 | | | — | | | 103 | | | 103 | | | — | | | 103 | |
| Total | $ | 390 | | | $ | 205 | | | $ | 184 | | | $ | 390 | | | $ | 205 | | | $ | 184 | |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions except per share data, unless otherwise noted)
Exelon
Executive Overview
Exelon is a utility services holding company engaged in the energy distributiontransmission and transmissiondistribution businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
Exelon hasit's six reportable segments consisting ofsegments: ComEd, PECO, BGE, Pepco, DPL, and ACE. See Note 1 — Significant Accounting Policies and Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for additional information regarding Exelon's principal subsidiaries and reportable segments.
Exelon’s consolidated financial information includes the results of its seven separate operating subsidiary registrants, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, which, along with Exelon, are collectively referred to as the Registrants. The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE. However, none of the Registrants makes any representation as to information related solely to any of the other Registrants.
Financial Results of Operations
GAAP Results of Operations. The following table sets forth Exelon's GAAP consolidated Net income attributable to common shareholders from continuing operations and the Utility Registrants' Net incomeby Registrant for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021.2023. For additional information regarding the financial results for the three and nine months ended September 30, 2022March 31, 2024 and 20212023, see the discussions of Results of Operations by Registrant.
| | Three Months Ended September 30, | | Favorable (Unfavorable) Variance | | Nine Months Ended September 30, | | Favorable (Unfavorable) Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| | | | | Three Months Ended March 31, | |
| | | | | Three Months Ended March 31, | |
| | | | | Three Months Ended March 31, | | | (Unfavorable) Favorable Variance |
| | | | | | 2024 | |
| Exelon | |
| Exelon | |
| Exelon | Exelon | $ | 676 | | | $ | 457 | | | $ | 219 | | | $ | 1,622 | | | $ | 1,307 | | | $ | 315 | |
| ComEd | ComEd | 291 | | | 220 | | | 71 | | | 706 | | | 609 | | | 97 | |
| PECO | PECO | 135 | | | 111 | | | 24 | | | 474 | | | 383 | | | 91 | |
| BGE | BGE | 33 | | | 36 | | | (3) | | | 267 | | | 290 | | | (23) | |
| PHI | PHI | 289 | | | 266 | | | 23 | | | 518 | | | 535 | | | (17) | |
| Pepco | Pepco | 145 | | | 130 | | | 15 | | | 261 | | | 264 | | | (3) | |
| DPL | DPL | 52 | | | 50 | | | 2 | | | 130 | | | 135 | | | (5) | |
| ACE | ACE | 94 | | | 90 | | | 4 | | | 131 | | | 141 | | | (10) | |
Other(a) | Other(a) | (72) | | | (176) | | | 104 | | | (343) | | | (510) | | | 167 | |
__________
(a)PrimarilyOther primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities, and other financing and investinginvestment activities.
The separation of Constellation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, Generation's results of operations are presented as discontinued operations and have been excluded from Exelon's continuing operations for all periods presented.
Accounting rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations. Such costs are included in Other in the table above. See further discussion below.
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net income attributable to common shareholders from continuing operations increaseddecreased by $219$11 million and diluted earnings per average common share decreased to $0.66 in 2024 from $0.67 in 2023 primarily due to:
•Higher interest expense at PECO, PHI, and Exelon Corporate;
•Higher storm costs at PECO and BGE;
•Lower electric distribution earnings from lower ROE and the absence of a return on the pension asset at ComEd; and
•Lower carrying costs related to the CMC regulatory assets at ComEd.
The decreases were partially offset by:
diluted earnings per average common share from continuing operations increased to $0.68 in 2022 from $0.47 in 2021 primarily due to:
•Higher electric distribution earnings from higher allowed electric distribution ROE due to an increase in treasury rates and higher rate base at ComEd;
•The favorable impacts of rate increases at PECO, BGE and PHI;
•Favorable impacts of decreased storm costs at PECO and BGE; and
•Lower BSC costs, which were previously allocated to Generation but do not qualify as expenses of the discontinued operations per the accounting rules. Such costs, on a pre-tax basis, were $104 million for the three months ended September 30, 2021.
The increases were partially offset by:
•An adjustment at PECO to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate;
•Higher depreciation expense at PECO and PHI; and
•Higher interest expenseLess unfavorable weather impacts at Exelon Corporate.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income attributable to common shareholders from continuing operations increased by $315 million and diluted earnings per average common share from continuing operations increased to $1.65 in 2022 from $1.33 in 2021 primarily due to:
•Higher electric distribution earnings from higher allowed electric distribution ROE due to an increase in treasury rates and higher rate base at ComEd;
•The favorable impacts of rate increases at PECO, BGE, and PHI;
•Favorable impacts of decreased storm costs at PECO and BGE; and
•Lower BSC costs presented in Exelon’s continuing operations, which were previously allocated to Generation but do not qualify as expenses of the discontinued operation per the accounting rules. Such costs, on a pre-tax basis, were $28 million for the period in 2022 prior to the separation on February 1, 2022 (January 1, 2022 to January 31, 2022) and $309 million for the nine months ended September 30, 2021.
The increases were partially offset by:
•An income tax expense recorded in connection with the separation primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit;
•An adjustment at PECO to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate;
•The absence of favorable weather and volume as a result of the CIP at ACE;
•Higher depreciation expense at PECO, BGE, and PHI;
•Higher credit loss expense at BGE and PHI;
•Higher storm costs at PHI; and
•Higher interest expense at PHI and Exelon Corporate.PECO.
Adjusted (non-GAAP) Operating Earnings.operating earnings. In addition to netNet income, Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) operating earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) operating
earnings exclude certain costs, expenses, gains and losses, and other specified items. This information is intended to enhance an investor’s overall understanding of year-to-yearyear-over-year operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) operating earnings is not a presentation defined under GAAP and may not be comparable to other companies’ presentations or deemed more useful than the GAAP information provided elsewhere in this report.
The following tables providetable provides a reconciliation between netGAAP Net income attributable to common shareholders from continuing operations as determined in accordance with GAAP and adjustedAdjusted (non-GAAP) operating earnings for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021.2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2022 | | 2021 |
| (In millions, except per share data) | | | Earnings per
Diluted Share | | | | Earnings per
Diluted Share |
| Net Income Attributable to Common Shareholders from Continuing Operations | $ | 676 | | | $ | 0.68 | | | $ | 457 | | | $ | 0.47 | |
| Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1) | — | | | — | | | 3 | | | — | |
| Cost Management Program (net of taxes of $0) | — | | | — | | | 4 | | | — | |
COVID-19 Direct Costs (net of taxes of $0)(a) | — | | | — | | | 3 | | | — | |
| Asset Retirement Obligation (net of taxes of $2 and $1) | (4) | | | — | | | 2 | | | — | |
Acquisition Related Costs (net of taxes of $2)(b) | — | | | — | | | 7 | | | 0.01 | |
ERP System Implementation Costs (net of taxes $1)(c) | — | | | — | | | 4 | | | — | |
| Asset Impairments (net of taxes of $10) | 37 | | | 0.04 | | | — | | | — | |
Separation Costs (net of taxes of $1 and $8, respectively)(d) | (3) | | | — | | | 16 | | | 0.02 | |
Income Tax-Related Adjustments (entire amount represents tax expense)(e) | 38 | | | 0.04 | | | 26 | | | 0.03 | |
| Adjusted (non-GAAP) Operating Earnings | $ | 745 | | | $ | 0.75 | | | $ | 522 | | | $ | 0.53 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2022 | | 2021 |
| (In millions, except per share data) | | | Earnings per
Diluted Share | | | | Earnings per
Diluted Share |
| Net Income Attributable to Common Shareholders from Continuing Operations | $ | 1,622 | | | $ | 1.65 | | | $ | 1,307 | | | $ | 1.33 | |
| Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $2) | — | | | — | | | 6 | | | 0.01 | |
| Cost Program Management (net of taxes of $0) | — | | | — | | | 5 | | | 0.01 | |
COVID-19 Direct Costs (net of taxes of $3)(a) | — | | | — | | | 7 | | | 0.01 | |
| Asset Retirement Obligation (net of taxes of $2 and $1) | (4) | | | — | | | 2 | | | — | |
Acquisition Related Costs (net of taxes of $5)(b) | — | | | — | | | 15 | | | 0.02 | |
ERP System Implementation Costs (net of taxes of $0 and $2, respectively)(c) | 1 | | | — | | | 10 | | | 0.01 | |
| Asset Impairments (net of taxes of $10) | 37 | | | 0.04 | | | — | | | — | |
Separation Costs (net of taxes of $10 and $13, respectively)(d) | 25 | | | 0.03 | | | 29 | | | 0.03 | |
Income Tax-Related Adjustments (entire amount represents tax expense)(f) | 130 | | | 0.13 | | | 24 | | | 0.02 | |
| Adjusted (non-GAAP) Operating Earnings | $ | 1,811 | | | $ | 1.84 | | | $ | 1,405 | | | $ | 1.43 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2024 | | 2023 |
| (In millions, except per share data) | | | Earnings per
Diluted Share | | | | Earnings per
Diluted Share |
| Net income attributable to common shareholders | $ | 658 | | | $ | 0.66 | | | $ | 669 | | | $ | 0.67 | |
| Mark-to-market impact of economic hedging activities (net of taxes of $0) | — | | | — | | | (1) | | | — | |
| Change in environmental liabilities (net of taxes of $7) | — | | | — | | | 18 | | | 0.02 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Separation costs (net of taxes of $0)(a) | — | | | — | | | (1) | | | — | |
| Change in FERC audit liability (net of taxes of $9 and $4, respectively ) | 27 | | | 0.03 | | | 11 | | | 0.01 | |
| | | | | | | |
| Adjusted (non-GAAP) operating earnings | $ | 685 | | | $ | 0.68 | | | $ | 696 | | | $ | 0.70 | |
__________Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income from Continuing Operationsincome attributable to common shareholders and Adjusted (non-GAAP) Operating Earningsoperating earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. The marginal statutory income tax rates for 20222024 and 20212023 ranged from 24.0% to 29.0%.
(a)Represents direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees, which are recorded in Operating and maintenance expense.
(b)Reflects certain BSC costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG, which was completed in the third quarter of 2021, that were historically allocated to Constellation Energy Generation, LLC
(Generation) but are presented as part of continuing operations in Exelon’s results as these costs do not qualify as expenses of the discontinued operations per the accounting rules.
(c)Reflects costs related to a multi-year Enterprise Resource Program (ERP) system implementation, which are recorded in Operating and maintenance expense.
(d)Represents costs related to the separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs, which are recorded in Operating and maintenance expense.
(e)In 2022, for PECO, reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate. In 2021, for Corporate, primarily reflects the adjustment to deferred income taxes due to changes in forecasted apportionment.
(f)In 2022, for PECO, reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate. In 2022, for Corporate, in connection with the separation, Exelon recorded an income tax expense primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit. In 2021, for Corporate, primarily reflects the adjustment to deferred income taxes due to changes in forecasted apportionment.
Significant 20222024 Transactions and Developments
Separation
On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies (“the separation”). Exelon completed the separation on February 1, 2022. Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purpose of separation and holds Generation. The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information on the separation and discontinued operations.
In connection with the separation, Exelon incurred separation (benefit)/costs impacting continuing operations of $(2) million and $24 million on a pre-tax basis for the three months ended September 30, 2022 and 2021, respectively, and $35 million and $42 million on a pre-tax basis for the nine months ended September 30, 2022 and 2021, respectively, which are recorded in Operating and maintenance expense. Total separation costs impacting continuing operations for the remainder of 2022 are not expected to be material. These costs are excluded from Adjusted (non-GAAP) Operating Earnings. The separation costs are primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs.
Equity Securities Offering
On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value. The net proceeds were $563 million before expenses paid by Exelon. See Note 14 – Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.
ComEd Electric Distribution Rates
On November 3, 2022, ComEd announced it plans on filing a four-year MRP in January 2023. The MRP will set rates for 2024 – 2027, based on forecasted revenue requirements and an ICC determined rate of return on rate base, including the cost of common equity. See Note 3 – Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Distribution Base Rate Case Proceedings
The Utility Registrants file base rate cases with their regulatory commissions seeking increases or decreases to their electric transmission and distribution, and gas distribution rates to recover their costs and earn a fair return on their investments. The outcomes of these regulatory proceedings impact the Utility Registrants’ current and future financial statements.
The following tables show the Utility Registrants’ completed and pending distribution base rate case proceedings in 2022.2024. See Note 32 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Completed Distribution Base Rate Case Proceedings
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Approved Revenue Requirement Increase | | Approved ROE | | Approval Date | | Rate Effective Date |
| ComEd - Illinois | | April 16, 2021 | | Electric | | $ | 51 | | | $ | 46 | | | 7.36 | % | | December 1, 2021 | | January 1, 2022 |
| PECO - Pennsylvania | | March 30, 2021 | | Electric | | 246 | | | 132 | | | N/A | | November 18, 2021 | | January 1, 2022 |
| March 31, 2022 | | Natural Gas | | 82 | | | 55 | | | | October 27, 2022 | | January 1, 2023 |
| BGE - Maryland | | May 15, 2020 (amended September 11, 2020) | | Electric | | 203 | | | 140 | | | 9.50 | % | | December 16, 2020 | | January 1, 2021 |
| | Natural Gas | | 108 | | | 74 | | | 9.65 | % | | |
| Pepco - District of Columbia | | May 30, 2019 (amended June 1, 2020) | | Electric | | 136 | | | 109 | | | 9.275 | % | | June 8, 2021 | | July 1, 2021 |
| Pepco - Maryland | | October 26, 2020 (amended March 31, 2021) | | Electric | | 104 | | | 52 | | | 9.55 | % | | June 28, 2021 | | June 28, 2021 |
| DPL - Maryland | | September 1, 2021 (amended December 23, 2021) | | Electric | | 27 | | | 13 | | | 9.60 | % | | March 2, 2022 | | March 2, 2022 |
| DPL - Delaware | | January 14, 2022 (amended August 15, 2022) | | Natural Gas | | 13 | | | 8 | | | 9.60 | % | | October 12, 2022 | | November 1, 2022 |
| ACE - New Jersey | | December 9, 2020 (amended February 26, 2021) | | Electric | | 67 | | | 41 | | | 9.60 | % | | July 14, 2021 | | January 1, 2022 |
Completed Distribution Base Rate Case Proceedings
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Approved Revenue Requirement Increase | | Approved ROE | | Approval Date | | Rate Effective Date |
| ComEd - Illinois | | January 17, 2023 | | Electric | | $ | 1,487 | | | $ | 501 | | | 8.905% | | December 14, 2023 | | January 1, 2024 |
| | | $ | 838 | | | $ | 810 | | | 8.905% | | April 18, 2024 | | May 1, 2024 |
| April 21, 2023 | | Electric | | $ | 247 | | | $ | 259 | | | 8.91% | | November 30, 2023 | | January 1, 2024 |
| BGE - Maryland | | February 17, 2023 | | Electric | | $ | 313 | | | $ | 179 | | | 9.50 | % | | December 14, 2023 | | January 1, 2024 |
| | Natural Gas | | $ | 289 | | | $ | 229 | | | 9.45 | % | | |
| Pepco - Maryland | | October 26, 2020 (amended March 31, 2021) | | Electric | | $ | 104 | | | $ | 52 | | | 9.55 | % | | June 28, 2021 | | June 28, 2021 |
| DPL - Maryland | | May 19, 2022 | | Electric | | $ | 38 | | | $ | 29 | | | 9.60 | % | | December 14, 2022 | | January 1, 2023 |
| DPL - Delaware | | December 15, 2022 (amended September 29, 2023) | | Electric | | $ | 39 | | | $ | 28 | | | 9.60 | % | | April 18, 2024 | | July 15, 2023 |
| ACE - New Jersey | | February 15, 2023 (amended August 21, 2023) | | Electric | | $ | 92 | | | $ | 45 | | | 9.60 | % | | November 17, 2023 | | December 1, 2023 |
Pending Distribution Base Rate Case Proceedings
| | Registrant/Jurisdiction | Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Requested ROE | | Expected Approval Timing | Registrant/Jurisdiction | | Filing Date | | Service | | Requested Revenue Requirement Increase | | Requested ROE | | Expected Approval Timing |
| ComEd - Illinois | ComEd - Illinois | | April 15, 2022 | | Electric | | $ | 199 | | | 7.85 | % | | Fourth quarter of 2022 | ComEd - Illinois | | March 15, 2024 | | Electric | | $ | 670 | | | 8.905% | | 8.905% | | December 2024 |
| | DPL - Maryland | | May 19, 2022 | | Electric | | 38 | | | 10.25 | % | | Fourth quarter of 2022 |
| ComEd - Illinois | | ComEd - Illinois | | April 26, 2024 | | Electric | | $ | 627 | | | 9.89% | | December 2024 |
| | March 28, 2024 | | Electric | | $ | 464 | | | 10.95% | | Fourth quarter of 2024 |
| PECO - Pennsylvania | |
| | Pepco - District of Columbia | |
| Pepco - District of Columbia | | | April 13, 2023 (amended February 27, 2024) | | Electric | | $ | 186 | | | 10.50 | % | | Third quarter of 2024 |
| Pepco - Maryland | | Pepco - Maryland | | May 16, 2023 (amended February 23, 2024) | | Electric | | $ | 186 | | | 10.50 | % | | Second quarter of 2024 |
Transmission Formula Rates
For 2022,2024, the following total increases/(decreases) were included in the Utility Registrants'ComEd's and BGE's electric transmission formula rate updates. See Note 32 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant | | Initial Revenue Requirement Increase | | Annual Reconciliation (Decrease) Increase | | Total Revenue Requirement Increase | | Allowed Return on Rate Base | | Allowed ROE |
| ComEd | | $ | 24 | | | $ | (24) | | | $ | — | | | 8.11 | % | | 11.50 | % |
| PECO | | 23 | | | 16 | | | 39 | | | 7.30 | % | | 10.35 | % |
| BGE | | 25 | | | (4) | | | 16 | | | 7.30 | % | | 10.50 | % |
| Pepco | | 16 | | | 15 | | | 31 | | | 7.60 | % | | 10.50 | % |
| DPL | | 9 | | | 2 | | | 11 | | | 7.09 | % | | 10.50 | % |
| ACE | | 21 | | | 13 | | | 34 | | | 7.18 | % | | 10.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Registrant | | Initial Revenue Requirement Increase | | Annual Reconciliation (Decrease)
Increase | | Total Revenue Requirement Increase | | Allowed Return on Rate Base | | Allowed ROE |
| ComEd | | $ | 32 | | | $ | (12) | | | $ | 20 | | | 8.14 | % | | 11.50 | % |
| | | | | | | | | | |
| BGE | | $ | 42 | | | $ | 13 | | | $ | 53 | | | 7.47 | % | | 10.50 | % |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Pennsylvania Corporate Income Tax Rate ChangeThe Utility Registrants are subject to periodic audits and investigations by FERC. FERC’s Division of Audits and Accounting initiated a nonpublic audit of ComEd in April 2021 evaluating ComEd’s compliance with (1) approved terms, rates and conditions of its federally regulated service; (2) accounting requirements of the Uniform System of Accounts; (3) reporting requirements of the FERC Form 1; and (4) the requirements for record retention. The audit period extends back to January 1, 2017.
On July 8, 2022, Pennsylvania enacted House Bill 1342,27, 2023, FERC issued a final audit report which included, among other things, findings and recommendations related to ComEd's methodology regarding the allocation of certain overhead costs to capitalized construction costs under FERC regulations, including a suggestion that refunds may be due to customers for amounts collected in previous years. On August 28, 2023, ComEd filed a formal notice of the issues it will permanently reduce the corporate income tax rate from 9.99% to 4.99%. The tax rate will be reduced to 8.99%contest. On December 14, 2023, FERC appointed a settlement judge for the 2023 tax year. Starting withcontested overhead allocation findings and set the matter for a trial-type hearing. That hearing process has been held in abeyance while a formal settlement process, which began in February 2024, tax year,takes place. Based on the rate is reduced by 0.50% annually until it reaches 4.99% in 2031. Aspreliminary findings and the ongoing settlement process, ComEd determined that a resultloss was probable and recorded its regulatory liability to reflect its best estimate of that loss. The final outcome and resolution of any contested audit issues as well as a reasonable estimate of potential future losses cannot be accurately estimated at this stage; however, the rate change, in the third quarterfinal resolution of 2022, Exelon and PECO recorded a one-time decrease to deferred income taxes of $390 million with a corresponding decrease to the deferred income taxes regulatory asset of $428 million for the amounts that are expected to be settled through future customer rates and an increase to income tax expense of $38 million (net of federal taxes), which was excluded from Exelon's Adjusted (non-GAAP) Operating Earnings. The tax rate decrease is not expected to have a material ongoing impact to Exelon’s and PECO’s financial statements. See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information.
Inflation Reduction Act
On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law. The bill extends tax benefits for renewable technologies like solar and wind, creates new tax benefits for alternative clean energy sources like nuclear and hydrogen and it focuses on energy efficiency, electrification, and equity. However, the bill also implements a new 15.0% corporate alternative minimum tax based on adjusted GAAP income. Exelon estimates the IRAthese matters could result in an increase in cash taxes for Exelonrecognition of approximately $200 million per year starting in 2023. Exelon is continuingfuture losses, above the amounts currently accrued, that could be material to assess the impacts of the IRA on the financial statements and will update estimates based on guidance to be issued by the U.S. Treasury and IRS in the future.
Asset Impairment
In the third quarter of 2022, a review of the impacts of COVID-19 on office use resulted in plans to cease the renovation and dispose of an office building at BGE before the asset was placed into service. As a result, Exelon and BGE recorded a pre-tax impairment charge of $46 million in the third quarter of 2022, which was excluded from Exelon's Adjusted (non-GAAP) Operating Earnings. See Note 7 – Asset Impairments of the Combined Notes to Consolidated Financial Statements for additional information.ComEd financial statements.
Other Key Business Drivers and Management Strategies
The following discussion of other key business drivers and management strategies includes current developments of previously disclosed matters and new issues arising during the period that may impact future financial statements. This section should be read in conjunction with ITEM 1. Business in the 20212023 Form 10-K, ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Other Key Business Drivers and Management Strategies in the 2021 Recast2023 Form 10-K, and Note 1311 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements in this report for additional information on various environmental matters.
Legislative and Regulatory Developments
Infrastructure Investment and Jobs Act
On November 15, 2021, President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA)IIJA into law. IIJA provides for approximately $550 billion in new federal spending. Categories of funding include funding for a variety of infrastructure needs, including but not limited to: (1) power and grid reliability and resilience, (2) resilience for cybersecurity to address critical infrastructure needs, and (3) electric vehicle charging infrastructure for alternative fuel corridors. Federal agencies are developing guidelines to implement spending programs under IIJA. The time needed to develop these guidelines will vary with some limited program applications opened as early as the first quarter of 2022. The Registrants are continuingcontinue to analyzeevaluate programs under the legislation and consideringconsider possible opportunities to apply for funding, either directly or in potential collaborations with state and/or local agencies and key stakeholders. The Registrants cannot predict the ultimate timing and success of securing funding from programs under IIJA.
In March 2023, Exelon, ComEd, and PHI submitted three applications related to the Smart Grid Grants program under section 40107 of IIJA. These applications are focused on replacing existing Advanced Distribution Management Systems (ADMS) in support of distributed energy resources (DERs) and grid-edged technologies, strengthening interoperability and data architecture of systems in support of two-way power flows and accelerating advanced metering deployment in disadvantaged communities. In October 2023, ComEd’s project, Deployment of a Community-Oriented Interoperable Control Framework for Aggregating and Integrating Distributed Energy Resources and Other Grid-Edge Devices, was recommended by the Grid Deployment Office (GDO) for negotiation of a final award up to $50 million. This project will enable ComEd and its local partners to deploy the next generation of grid technologies that support the growth of solar and electric vehicles (EVs), while piloting new local workforce training initiatives to support job creation connected to the clean energy transition. The award negotiation process is currently ongoing.
In April 2023, ComEd, PECO, BGE, appliedand PHI submitted seven applications related to the Grid Resilience Grants program under section 40101(c) of IIJA. These applications are broadly focused on improving grid resilience with an emphasis on disadvantaged communities, relief of capacity constraints and modernizing infrastructure, deployment of DER and microgrid technologies and providing improved resilience through storm hardening projects. In October 2023, PECO’s project, Creating a Resilient, Equitable, and Accessible Transformation in Energy for Greater Philadelphia (CREATE), was recommended by the GDO for negotiation of a final award up to $100 million. This project will support critical electric infrastructure investments to help reduce the impact of extreme weather and historic flooding on the Registrants' electric distribution system. The award negotiation process is currently ongoing.
The Registrants are supporting three different Regional Clean Hydrogen Hub opportunities, covering all five states that Exelon operates in plus Washington D.C. under a program that will create networks of hydrogen producers, consumers, and local connective infrastructure to accelerate the use of hydrogen as a clean energy carrier that can deliver or store energy. Applications for the Middle Mile Grant (MMG)three opportunities under this program were submitted in April 2023. In October 2023 the DOE announced it selected two of the projects for further negotiation: (1) the Mid-Atlantic Clean Hydrogen Hub (MACH2), which establishesis being supported by PECO and funds construction, improvement, or acquisition of middle mile broadband infrastructurePHI, and (2) the Midwest Alliance for Clean Hydrogen (MachH2), which creates high-speed internet services. The MMG addresses inequitable broadband accessis being supported by expansion and extensionComEd.
In November 2023, the GDO announced up to $3.9 billion available through the second-round funding opportunity of the middle mile infrastructureGrid Resilience and Innovation Partnerships (GRIP) Program for Fiscal Years 2024 and 2025. This funding opportunity focuses on projects that will improve electric transmission by increasing funding and advancing interconnection processes for faster build out of energy projects, create comprehensive solutions that
link grid communications systems and operations to increase resilience and reduce power outages and threats, and deploy advanced technologies such as distributed energy resources and battery systems to provide essential grid services to ensure American communities across the country have access to affordable, reliable, clean electricity. In January 2024, Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE submitted seven concept papers in underserved communities. ComEdresponse to the second round of the GRIP program. The concept papers were focused on improving the resilience of the electric grid and deployment of technologies to enhance grid flexibility and deliver benefits to customers and communities across the Exelon footprint. Six of the seven concept papers submitted received notifications of encouragement to submit a full application. Exelon, BGE, PHI, Pepco, DPL, and ACE are in the process of evaluating the development and submission of final applications. Formal applications for Topic Area 1 (Grid Resilience) and Topic Area 3 (Grid Innovation) were due on April 17, 2024. ACE in coordination with the NJBPU Division of Clean Energy submitted an application for Topic Area 3 to expand DER hosting capacity through integrated grid enhancing technologies. Formal applications for Topic Area 2 (Smart Grid Grants) are due on May 22, 2024. The GDO is expected to announce award notification in the second half of 2024. Exelon, BGE, PHI, Pepco, DPL and ACE cannot predict if their applications will be approved as filed or the timingselected for negotiation of receiving any funds if they are awarded a grant.
final award.
Critical Accounting Policies and Estimates
Management of each of the Registrants makes a number of significant estimates, assumptions, and judgments in the preparation of its financial statements. At September 30, 2022,As of March 31, 2024, the Registrants’ critical accounting policies and estimates had not changed significantly from December 31, 2021.2023. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates in the 2021 Recast2023 Form 10-K for further information.
Results of Operations by Registrant
Results of Operations — ComEd
| | Three Months Ended
September 30, | | (Unfavorable)
Favorable
Variance | | Nine Months Ended
September 30, | | (Unfavorable)
Favorable
Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | | | Favorable (Unfavorable) Variance |
| | | | | | 2024 | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | $ | 1,378 | | | $ | 1,789 | | | $ | (411) | | | $ | 4,536 | | | $ | 4,840 | | | $ | (304) | |
| Operating expenses | Operating expenses | |
| Purchased power | |
| Purchased power | |
| Purchased power | Purchased power | 121 | | | 703 | | | 582 | | | 1,041 | | | 1,728 | | | 687 | |
| Operating and maintenance | Operating and maintenance | 355 | | | 330 | | | (25) | | | 1,045 | | | 969 | | | (76) | |
| Depreciation and amortization | Depreciation and amortization | 333 | | | 304 | | | (29) | | | 982 | | | 893 | | | (89) | |
| Taxes other than income taxes | Taxes other than income taxes | 104 | | | 91 | | | (13) | | | 289 | | | 243 | | | (46) | |
| Total operating expenses | Total operating expenses | 913 | | | 1,428 | | | 515 | | | 3,357 | | | 3,833 | | | 476 | |
| Loss on sales of assets | — | | | — | | | — | | | (2) | | | — | | | (2) | |
| | Operating income | |
| Operating income | |
| Operating income | Operating income | 465 | | | 361 | | | 104 | | | 1,177 | | | 1,007 | | | 170 | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (104) | | | (98) | | | (6) | | | (308) | | | (292) | | | (16) | |
| Other, net | Other, net | 14 | | | 13 | | | 1 | | | 40 | | | 35 | | | 5 | |
| Total other income and (deductions) | Total other income and (deductions) | (90) | | | (85) | | | (5) | | | (268) | | | (257) | | | (11) | |
| Income before income taxes | Income before income taxes | 375 | | | 276 | | | 99 | | | 909 | | | 750 | | | 159 | |
| Income taxes | Income taxes | 84 | | | 56 | | | (28) | | | 203 | | | 141 | | | (62) | |
| Net income | Net income | $ | 291 | | | $ | 220 | | | $ | 71 | | | $ | 706 | | | $ | 609 | | | $ | 97 | |
|
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net incomeincreaseddecreased by $71$48 million as compared to the same period in 2021,2023, primarily due to increasesdecreases in electric distribution formula rate earnings (reflecting higherreflecting lower allowed electric distribution ROE due to an increase in treasury rates and the impacts of higher rate base).
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income increased by $97 million as compared to the same period in 2021, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed electric distribution ROE due to an increase in treasury rates and the impacts of higher rate base) partially offset by the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement. See Note 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.ROE.
The changes in Operating revenues consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| Distribution | $ | 112 | | | $ | 223 | |
| Transmission | 9 | | | 47 | |
| Energy efficiency | 19 | | | 39 | |
| Other | 6 | | | 9 | |
| | | |
| | | |
| | | |
| | | |
| 146 | | | 318 | |
| Regulatory required programs | (557) | | | (622) | |
| Total increase | $ | (411) | | | $ | (304) | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase (Decrease) |
| Distribution | | | $ | 34 | |
| Transmission | | | 2 | |
| Energy efficiency | | | 20 | |
| Other | | | (5) | |
| | | 51 | |
| Regulatory required programs | | | 377 | |
| Total increase | | | $ | 428 | |
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. Operating revenues are not impacted by abnormal weather, usage per customer, or number of customers as a result of revenue decoupling mechanisms implemented pursuant to FEJA.mechanisms.
Distribution Revenue. EIMA and FEJA provide forDistribution revenues were under a performance-based formula rate which requires anthrough 2023. Starting in 2024, distribution revenues are under a MRP. Both the performance-based formula rate and the MRP require annual reconciliationreconciliations of the revenue requirement in effect to the actual costs that the ICC determines are prudently and reasonably incurred in a given year.with certain limitations for the MRP reconciliations. Electric distribution revenue varies from year to year based upon fluctuations in the underlying costs, (e.g., severe weather and storm restoration), investments being recovered, and allowed ROE. Electric distribution revenue increased for the three and nine months ended September 30, 2022March 31, 2024 as compared to the same period in 2021,2023, due to higher allowed ROE due to an increase in treasury rates, the impact of a higher rate base, and higher fully recoverable costs.costs offset by lower allowed ROE.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs, capital investments being recovered, and the highest daily peak
load, which is updated annually in January based on the prior calendar year. Generally, increases/decreases in the highest daily peak load will result in higher/lower transmission revenue. Transmission revenue increased for the three and nine months ended September 30, 2022March 31, 2024 as compared to the same period in 20212023, primarily due to the impact of higher rate base and higher fully recoverable costs.peak load.
Energy Efficiency Revenue. FEJA provides forEnergy efficiency revenues are under a performance-based formula rate, which requires an annual reconciliation of the revenue requirement in effect to the actual costs that the ICC determines are prudently and reasonably incurred in a given year. Under FEJA, energyEnergy efficiency revenue varies from year to year based upon fluctuations in the underlying costs, investments being recovered, and allowed ROE. Energy efficiency revenue increased for the three and nine months ended September 30, 2022March 31, 2024 as compared to the same period in 2021,2023, primarily due to increased regulatory asset amortization, which is fully recoverable.
Other Revenue primarily includes assistance provided to other utilities through mutual assistance programs. Other revenue increaseddecreased for the three and nine months ended September 30, 2022March 31, 2024 as compared to the same period in 2021,2023, which primarily reflects less mutual assistance revenues associated with storm restoration efforts.
Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as recoveries under the credit loss expense tariff, environmental costs associated with MGP sites, ETAC, and costs related to electricity, ZEC, CMC, and REC procurement. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding CMCs. ETAC is a retail customer surcharge collected by electric utilities operating in Illinois established by CEJA and remitted to an Illinois state agency for programs to support clean energy jobs and training. The riders are designed to provide full and current cost recovery. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense and Taxes other than income. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries as ComEd remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ComEd either acts as the billing agent or the competitive supplier separately bills its own customers, and therefore does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ComEd, ComEd is permitted to recover the electricity, ZEC, CMC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power expense related to the electricity, ZECs, CMCs, and RECs.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ComEd's revenue disaggregation.
The decreaseincrease of $582 million and $687$419 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, in Purchased power expense is primarily due to the CMCs from the participating nuclear-powered generating facilities. This favorability is offset by a decrease in Operating revenues as part of regulatory required programs. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding CMCs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| | | |
| Storm-related costs | $ | 10 | | | $ | 10 | |
| Pension and non-pension postretirement benefits expense | (8) | | | (22) | |
| Labor, other benefits, contracting and materials | 21 | | | 32 | |
| | | |
| BSC costs | (2) | | | 20 | |
| | | |
Other(a) | 3 | | | 30 | |
| 24 | | | 70 | |
Regulatory required programs(b) | 1 | | | 6 | |
| Total increase | $ | 25 | | | $ | 76 | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase |
| | | |
| Labor, other benefits, contracting and materials | | | $ | 45 | |
| BSC costs | | | 17 | |
| Storm-related costs | | | 6 | |
| | | |
| Pension and non-pension postretirement benefits expense | | | 6 | |
| | | |
| Other | | | 3 | |
| | | 77 | |
Regulatory required programs(a) | | | 4 | |
| Total increase | | | $ | 81 | |
__________
(a)For the nine months ended September 30, 2022, the increase is primarily due to the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement. See Note 13 — Commitments and Contingenciesof the Combined Notes to Consolidated Financial Statements for additional information related to the Deferred Prosecution Agreement.
(b)ComEd is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through a rider mechanism.
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase | | Increase |
Depreciation and amortization(a) | $ | 17 | | | $ | 50 | |
Regulatory asset amortization(b) | 12 | | | 39 | |
| | | |
| Total increase | $ | 29 | | | $ | 89 | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase |
Depreciation and amortization(a) | | | $ | 16 | |
Regulatory asset amortization(b) | | | 8 | |
| | | |
| Total increase | | | $ | 24 | |
__________
(a)Reflects ongoing capital expenditures.
(b)Includes amortization of ComEd's energy efficiency formula rate regulatory asset.
Taxes other than income taxes increased by $13 million and by $46 million for the three and nine months ended September 30, 2022, respectively, compared to the same period in 2021, primarily due to taxes related to ETAC, which is recovered through Operating revenues.
Effective income tax rates were 22.4%9.0% and 20.3%22.8% for the three months ended September 30, 2022March 31, 2024 and 2021, respectively, and 22.3% and 18.8% for the nine months ended September 30, 2022 and 2021,2023, respectively. See Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Results of Operations — PECO
| | Three Months Ended
September 30, | | Favorable
(Unfavorable)
Variance | | Nine Months Ended
September 30, | | Favorable
(Unfavorable)
Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | | | (Unfavorable) Favorable Variance |
| | | | | | 2024 | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | $ | 1,014 | | | $ | 818 | | | $ | 196 | | | $ | 2,877 | | | $ | 2,399 | | | $ | 478 | |
| Operating expenses | Operating expenses | |
| Purchased power and fuel | |
| Purchased power and fuel | |
| Purchased power and fuel | Purchased power and fuel | 403 | | | 277 | | | (126) | | | 1,093 | | | 800 | | | (293) | |
| Operating and maintenance | Operating and maintenance | 243 | | | 263 | | | 20 | | | 705 | | | 706 | | | 1 | |
| Depreciation and amortization | Depreciation and amortization | 92 | | | 86 | | | (6) | | | 277 | | | 259 | | | (18) | |
| Taxes other than income taxes | Taxes other than income taxes | 60 | | | 51 | | | (9) | | | 155 | | | 143 | | | (12) | |
| Total operating expenses | Total operating expenses | 798 | | | 677 | | | (121) | | | 2,230 | | | 1,908 | | | (322) | |
| | Gain on sales of assets | |
| Operating income | Operating income | 216 | | | 141 | | | 75 | | | 647 | | | 491 | | | 156 | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (45) | | | (40) | | | (5) | | | (129) | | | (119) | | | (10) | |
| Other, net | Other, net | 8 | | | 7 | | | 1 | | | 23 | | | 20 | | | 3 | |
| Total other income and (deductions) | Total other income and (deductions) | (37) | | | (33) | | | (4) | | | (106) | | | (99) | | | (7) | |
| Income before income taxes | Income before income taxes | 179 | | | 108 | | | 71 | | | 541 | | | 392 | | | 149 | |
| Income taxes | Income taxes | 44 | | | (3) | | | (47) | | | 67 | | | 9 | | | (58) | |
| | Net income | Net income | $ | 135 | | | $ | 111 | | | $ | 24 | | | $ | 474 | | | $ | 383 | | | $ | 91 | |
| | Net income | |
| | Net income | |
Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income increased by $24 million, primarily due to increases in electric distribution rates and lower storm costs, partially offset by a decrease in electrical volume and the one-time non-cash impacts associated with the Pennsylvania corporate income tax legislation passed in July 2022.
Nine Months Ended September 30, 2022March 31, 2024 Compared to NineThree Months Ended September 30, 2021March 31, 2023. Net income incoincreasedme decreased by $91$17 million, primarily due to increasesan increase in electricoperating expenses as a result of higher storm costs and gas distribution rates,an increase in interest expense, partially offset by an increase in revenue as a result of less unfavorable weather impact relative to the one-time non-cash impacts associated with the Pennsylvania corporate income tax legislation passed in July 2022.same period last year.
The changes in Operating revenues consisted of the following:
| | Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| Electric | | Gas | | Total | | Electric | | Gas | | Total |
| | | Three Months Ended
March 31, 2024 | |
| | | Three Months Ended
March 31, 2024 | |
| | | Three Months Ended
March 31, 2024 | |
| | | Increase (Decrease) | | | | | Increase (Decrease) |
| | | | | | | Electric | | | | | | | | | Electric | | Gas | | Total |
| Weather | Weather | $ | 28 | | | $ | — | | | $ | 28 | | | $ | 23 | | | $ | (5) | | | $ | 18 | |
| Volume | Volume | (23) | | | 1 | | | (22) | | | (19) | | | 11 | | | (8) | |
| Pricing | Pricing | 45 | | | 1 | | | 46 | | | 110 | | | 24 | | | 134 | |
| Transmission | Transmission | 2 | | | — | | | 2 | | | 10 | | | — | | | 10 | |
| Other | Other | 3 | | | 1 | | | 4 | | | 14 | | | 5 | | | 19 | |
| 55 | | | 3 | | | 58 | | | 138 | | | 35 | | | 173 | |
| | | | | | | 15 | |
| Regulatory required programs | Regulatory required programs | 123 | | | 15 | | | 138 | | | 218 | | | 87 | | | 305 | |
| Total increase | $ | 178 | | | $ | 18 | | | $ | 196 | | | $ | 356 | | | $ | 122 | | | $ | 478 | |
| Total decrease | |
Weather. The demand for electricity and natural gas is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the electric and natural gas businesses, very cold weather in winter months are referred to as “favorable weather conditions” because these weather conditions result in increased deliveries of electricity and natural gas. Conversely, mild weather reduces demand. During the three months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, Operating revenues related to weather increased by the impact of favorable weather conditions. During the nine months ended September 30, 2022 compareddue to the same period in 2021, Operating revenues related to weather increased by the impact of favorableless unfavorable weather conditions in PECO's service territory.
Heating and cooling degree-days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree-days for a 30-year period in PECO's service territory. The changes in heating and cooling degree-days in
PECO’s service territory for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 20212023 and normal weather consisted of the following:
| | Three Months Ended March 31, | | | Three Months Ended March 31, | | | | % Change |
| PECO Service Territory | | PECO Service Territory | 2024 | | 2023 | Normal | 2024 vs. 2023 | | 2024 vs. Normal |
| | | Three Months Ended September 30, | | | | % Change |
| PECO Service Territory | 2022 | | 2021 | Normal | 2022 vs. 2021 | | 2022 vs. Normal |
| | | Heating Degree-Days | Heating Degree-Days | 19 | | 4 | | 24 | | 375.0 | % | | (20.8) | % |
| Cooling Degree-Days | 1,290 | | 1,094 | | 1,021 | | 17.9 | % | | 26.3 | % |
| | Heating Degree-Days | |
| | | Nine Months Ended September 30, | | | % Change |
| | 2022 | | 2021 | | Normal | 2022 vs. 2021 | | 2022 vs. Normal |
| Heating Degree-Days | Heating Degree-Days | 2,632 | | | 2,710 | | 2,864 | | (2.9) | % | | (8.1) | % | 2,089 | | | 1,888 | | 1,888 | | 2,410 | | 10.6 | % | | (13.3) | % |
| Cooling Degree-Days | Cooling Degree-Days | 1,725 | | | 1,517 | | 1,413 | | 13.7 | % | | 22.1 | % | Cooling Degree-Days | — | | | — | | — | | 1 | | N/A | | (100.0) | % |
Volume. Electric volume, exclusive of the effects of weather, for the three and nine months ended September 30, 2022,March 31, 2024 compared to the same period in 2021, decreased due to customer mix and load growth.2023, remained relatively consistent. Natural gas volume for the three months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, remained relatively consistent. Natural gas volume for the nine months ended September 30, 2022 compared to the same period in 2021 increased due to retail load growth.
| | Electric Retail Deliveries to Customers (in GWhs) | Electric Retail Deliveries to Customers (in GWhs) | Three Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) | | Nine Months Ended September 30, | | % Change | | Weather - Normal % Change(b) |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Electric Retail Deliveries to Customers (in GWhs) | | Electric Retail Deliveries to Customers (in GWhs) | | | | | | | Three Months Ended March 31, | | % Change | | Weather - Normal % Change(b) |
| | Residential | |
| Residential | |
| Residential | Residential | 4,386 | | 4,318 | | 1.6 | % | | (5.6) | % | | 11,204 | | 11,201 | | — | % | | (2.0) | % | | | | | | | | | 3,455 | | 3,358 | | 2.9 | % | | (1.2) | % |
| Small commercial & industrial | Small commercial & industrial | 2,139 | | 2,157 | | (0.8) | % | | (3.3) | % | | 5,889 | | 5,796 | | 1.6 | % | | 0.8 | % | Small commercial & industrial | | | | | | | | | 1,891 | | 1,843 | | 2.6 | % | | (1.7) | % |
| Large commercial & industrial | Large commercial & industrial | 3,943 | | 3,880 | | 1.6 | % | | 0.1 | % | | 10,691 | | 10,627 | | 0.6 | % | | — | % | Large commercial & industrial | | | | | | | | | 3,355 | | 3,237 | | 3.6 | % | | 2.5 | % |
| Public authorities & electric railroads | Public authorities & electric railroads | 172 | | 155 | | 11.0 | % | | 10.5 | % | | 489 | | 425 | | 15.1 | % | | 15.1 | % | Public authorities & electric railroads | | | | | | | | | 179 | | 168 | | 6.5 | % | | 7.1 | % |
Total electric retail deliveries(a) | Total electric retail deliveries(a) | 10,640 | | 10,510 | | 1.2 | % | | (2.8) | % | | 28,273 | | 28,049 | | 0.8 | % | | (0.4) | % | Total electric retail deliveries(a) | | | | | | | | | 8,880 | | 8,606 | | 3.2 | % | | 0.2 | % |
| | As of September 30, |
| At March 31, | | | At March 31, |
| Number of Electric Customers | Number of Electric Customers | 2022 | | 2021 | Number of Electric Customers | 2024 | | 2023 |
| Residential | Residential | 1,523,269 | | 1,514,836 | Residential | 1,540,491 | | 1,529,779 |
| Small commercial & industrial | Small commercial & industrial | 155,516 | | 155,006 | Small commercial & industrial | 156,475 | | 155,846 |
| Large commercial & industrial | Large commercial & industrial | 3,120 | | 3,108 | Large commercial & industrial | 3,160 | | 3,118 |
| Public authorities & electric railroads | Public authorities & electric railroads | 10,393 | | 10,271 | Public authorities & electric railroads | 10,713 | | 10,401 |
| Total | Total | 1,692,298 | | 1,683,221 | Total | 1,710,839 | | 1,699,144 |
__________
(a)Reflects delivery volumes from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.
(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
123 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural Gas Deliveries to Customers (in mmcf) | | | | | | | Three Months Ended
March 31, | | % Change | | Weather - Normal % Change(b) |
| | | | | 2024 | | 2023 | |
| Residential | | | | | | | | | 18,895 | | 17,190 | | 9.9 | % | | 0.6 | % |
| Small commercial & industrial | | | | | | | | | 9,488 | | 8,699 | | 9.1 | % | | (0.8) | % |
| Large commercial & industrial | | | | | | | | | 16 | | 29 | | (44.8) | % | | (12.2) | % |
| Transportation | | | | | | | | | 6,899 | | 7,014 | | (1.6) | % | | (3.0) | % |
Total natural gas retail deliveries(a) | | | | | | | | | 35,298 | | 32,932 | | 7.2 | % | | (0.5) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural Gas Deliveries to Customers (in mmcf) | Three Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) | | Nine Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) |
| 2022 | | 2021 | | | 2022 | | 2021 | |
| Residential | 2,197 | | 2,244 | | (2.1) | % | | 0.3 | % | | 28,240 | | 27,945 | | 1.1 | % | | 4.1 | % |
| Small commercial & industrial | 2,054 | | 1,926 | | 6.6 | % | | 9.5 | % | | 16,238 | | 15,217 | | 6.7 | % | | 8.5 | % |
| Large commercial & industrial | 6 | | 4 | | 50.0 | % | | 19.6 | % | | 20 | | 13 | | 53.8 | % | | 14.0 | % |
| Transportation | 5,162 | | 5,356 | | (3.6) | % | | (9.3) | % | | 18,508 | | 18,474 | | 0.2 | % | | (0.7) | % |
Total natural gas retail deliveries(a) | 9,419 | | 9,530 | | (1.2) | % | | (3.1) | % | | 63,006 | | 61,649 | | 2.2 | % | | 3.8 | % |
| | | | As of September 30, | | At March 31, |
| Number of Natural Gas Customers | Number of Natural Gas Customers | 2022 | | 2021 | Number of Natural Gas Customers | 2024 | | 2023 |
| Residential | Residential | 500,934 | | 495,752 | Residential | 508,429 | | 504,181 |
| Small commercial & industrial | Small commercial & industrial | 46,074 | | 44,435 | Small commercial & industrial | 45,038 | | 45,003 |
| Large commercial & industrial | Large commercial & industrial | 9 | | 6 | Large commercial & industrial | 7 | | 9 |
| Transportation | Transportation | 656 | | 670 | Transportation | 646 | | 650 |
| Total | Total | 547,673 | | 540,863 | Total | 554,120 | | 549,843 |
__________
(a)Reflects delivery volumes from customers purchasing natural gas directly from PECO and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges.
(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
Pricing for the three months ended September 30, 2022March 31, 2024 compared to the same period in 2021 increased primarily due to increases in electric distribution rates charged to customers. Pricing for the nine months ended September 30, 2022 compared to the same period in 2021 increased primarily due to increases in electric and gas distribution rates charged to customers.2023 remained relatively consistent.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Other revenue primarily includes revenue related to late payment charges. Other revenue for the three months ended September 30, 2022March 31, 2024 compared to the same period in 20212023 remained relatively consistent. Other revenue for the nine months ended September 30, 2022 compared to the same period in 2021 increased primarily due to revenue related to late payment charges.
Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency, PGC, and the GSA. The riders are designed to provide full and current cost recovery as well as a return. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Income taxes. Customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. Customer choice programs do not impact the volume of deliveries as PECO remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, PECO either acts as the billing agent or the competitive supplier separately bills its own customers and therefore PECO does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from PECO, PECO is permitted to recover the electricity, natural gas, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power and fuel expense related to the electricity, natural gas, and RECs.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of PECO's revenue disaggregation.
The increasedecrease of $126 million and $293$81 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023, inPurchased power and fuelexpense is offset in Operating revenues as part of regulatory required programs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase (Decrease) |
| Storm-related costs | | | $ | 25 | |
| BSC costs | | | 7 | |
| Pension and non-pension postretirement benefit expense | | | 2 | |
| Labor, other benefits, contracting and materials | | | (6) | |
| Credit loss expense | | | (10) | |
| Other | | | 7 | |
| | | 25 | |
| Regulatory required programs | | | (2) | |
| Total increase | | | $ | 23 | |
124The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase |
Depreciation and amortization(a) | | | $ | 6 | |
| Regulatory asset amortization | | | — | |
| | | |
| Total increase | | | $ | 6 | |
__________
(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.
The changes in Operating and maintenanceInterest expense, consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| (Decrease) Increase | | (Decrease) Increase |
| Storm-related costs | $ | (40) | | | $ | (39) | |
| Credit loss expense | (7) | | | (3) | |
| Pension and non-pension post retirement benefit expense | (3) | | | (6) | |
| Labor, other benefits, contracting and materials | 17 | | | 8 | |
| BSC costs | 5 | | | 21 | |
| Other | 3 | | | 8 | |
| (25) | | | (11) | |
| Regulatory required programs | 5 | | | 10 | |
| Total decrease | $ | (20) | | | $ | (1) | |
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase | | Increase |
Depreciation and amortization(a) | $ | 6 | | | $ | 18 | |
| Regulatory asset amortization | — | | | — | |
| | | |
| Total increase | $ | 6 | | | $ | 18 | |
__________
(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.
Taxes other than income taxes net increased by $9$7 million for the three months ended September 30, 2022March 31, 2024, compared to the same period in 2021,2023, primarily due to higher PA gross receipts tax, which is offsetan increase in operating revenues. Increased by $12 million for the nine months ended September 30, 2022 compared to the same period in 2021, primarily due to higher PA gross receipts tax, which is offset in operating revenues,interest rates and offset by lower PA Use Tax.
Interest expense, net increased $5 million and $10 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to the issuance of debt in 2021 and 2022.the second quarter of 2023.
Effective income tax rates were 24.6%6.3% and (2.8)%2.4% for the three months ended September 30, 2022March 31, 2024 and 20212023, respectively, and 12.4% and 2.3% for the nine months ended September 30, 2022 and 2021, respectively. See Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Results of Operations — BGE
| | Three Months Ended
September 30, | | Favorable
(Unfavorable)
Variance | | Nine Months Ended
September 30, | | Favorable
(Unfavorable)
Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | |
| | | | | Three Months Ended
March 31, | | | Favorable (Unfavorable) Variance |
| | | | | | 2024 | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | $ | 870 | | | $ | 770 | | | $ | 100 | | | $ | 2,810 | | | $ | 2,426 | | | $ | 384 | |
| Operating expenses | Operating expenses | |
| Purchased power and fuel | |
| Purchased power and fuel | |
| Purchased power and fuel | Purchased power and fuel | 350 | | | 290 | | | (60) | | | 1,093 | | | 840 | | | (253) | |
| Operating and maintenance | Operating and maintenance | 235 | | | 205 | | | (30) | | | 658 | | | 595 | | | (63) | |
| Depreciation and amortization | Depreciation and amortization | 148 | | | 142 | | | (6) | | | 470 | | | 434 | | | (36) | |
| Taxes other than income taxes | Taxes other than income taxes | 77 | | | 72 | | | (5) | | | 225 | | | 211 | | | (14) | |
| Total operating expenses | Total operating expenses | 810 | | | 709 | | | (101) | | | 2,446 | | | 2,080 | | | (366) | |
| | Operating income | Operating income | 60 | | | 61 | | | (1) | | | 364 | | | 346 | | | 18 | |
| Operating income | |
| Operating income | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | |
| Interest expense, net | |
| Interest expense, net | Interest expense, net | (39) | | | (36) | | | (3) | | | (110) | | | (103) | | | (7) | |
| Other, net | Other, net | 5 | | | 7 | | | (2) | | | 16 | | | 23 | | | (7) | |
| Total other income and (deductions) | Total other income and (deductions) | (34) | | | (29) | | | (5) | | | (94) | | | (80) | | | (14) | |
| Income before income taxes | Income before income taxes | 26 | | | 32 | | | (6) | | | 270 | | | 266 | | | 4 | |
| Income taxes | Income taxes | (7) | | | (4) | | | 3 | | | 3 | | | (24) | | | (27) | |
| Net income | Net income | $ | 33 | | | $ | 36 | | | $ | (3) | | | $ | 267 | | | $ | 290 | | | $ | (23) | |
|
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net Income income decreased $3increased $64 million primarily due to an asset impairment in 2022, and an increase in depreciation expense and credit loss expense, partially offset by favorable impacts of the multi-year plans. See Note 7 — Asset Impairments for additional information on the asset impairment. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased $23 million primarily due toplans, partially offset by an asset impairmentincrease in 2022,storm costs, an increase in property tax expense, and an increase in depreciation expense and credit loss expense, partially offset by favorable impacts of the multi-year plans.interest expense. See Note 7 — Asset Impairments for additional information on the asset impairment. See Note 32 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans.
The changes in Operating revenues consisted of the following:
| | Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase | | Increase |
| Electric | | Gas | | Total | | Electric | | Gas | | Total |
| | | Three Months Ended
March 31, 2024 | |
| | | Three Months Ended
March 31, 2024 | |
| | | Three Months Ended
March 31, 2024 | |
| | | Increase (Decrease) | | | | | Increase (Decrease) |
| | | | | | | Electric | | | | | | | | | Electric | | Gas | | Total |
| Distribution | Distribution | $ | 20 | | | $ | 3 | | | $ | 23 | | | $ | 51 | | | $ | 18 | | | $ | 69 | |
| Transmission | Transmission | 13 | | | — | | | 13 | | | 20 | | | — | | | 20 | |
| Other | Other | 1 | | | 1 | | | 2 | | | 10 | | | 6 | | | 16 | |
| 34 | | | 4 | | | 38 | | | 81 | | | 24 | | | 105 | |
| | | | | | | 21 | |
| Regulatory required programs | Regulatory required programs | 47 | | | 15 | | | 62 | | | 175 | | | 104 | | | 279 | |
| Total increase | $ | 81 | | | $ | 19 | | | $ | 100 | | | $ | 256 | | | $ | 128 | | | $ | 384 | |
| Total increase (decrease) | |
Revenue Decoupling. The demand for electricity and natural gas is affected by weather and customer usage. However, Operating revenues are not impacted by abnormal weather or usage per customer as a result of a monthly rate adjustment that provides for fixed distribution revenue per customer by customer class. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.
| | | | | | | | | | | |
| | At March 31, |
| Number of Electric Customers | 2024 | | 2023 |
| Residential | 1,213,063 | | | 1,207,486 | |
| Small commercial & industrial | 115,406 | | | 115,658 | |
| Large commercial & industrial | 13,110 | | | 12,911 | |
| Public authorities & electric railroads | 261 | | | 266 | |
| Total | 1,341,840 | | | 1,336,321 | |
| | | | | | | | | | | |
| | As of September 30, |
| Number of Electric Customers | 2022 | | 2021 |
| Residential | 1,200,786 | | | 1,194,254 | |
| Small commercial & industrial | 115,778 | | | 114,814 | |
| Large commercial & industrial | 12,774 | | | 12,584 | |
| Public authorities & electric railroads | 266 | | | 268 | |
| Total | 1,329,604 | | | 1,321,920 | |
| | As of September 30, |
| At March 31, | | | At March 31, |
| Number of Natural Gas Customers | Number of Natural Gas Customers | 2022 | | 2021 | Number of Natural Gas Customers | 2024 | | 2023 |
| Residential | Residential | 653,413 | | | 649,745 | |
| Small commercial & industrial | Small commercial & industrial | 38,128 | | | 38,216 | |
| Large commercial & industrial | Large commercial & industrial | 6,222 | | | 6,167 | |
| | Total | Total | 697,763 | | | 694,128 | |
| Total | |
| Total | |
Distribution Revenue increased for the three and nine months ended September 30, 2022,March 31, 2024, compared to the same period in 2021,2023, due to favorable impacts of the multi-year plans.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmissionrecovered.Transmission revenue increasedremained relatively the same for the three months ended September 30, 2022,March 31, 2024, compared to the same period in 2021, primarily due to increases in capital investments and underlying costs and increased for the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to increases in capital investments.2023.
Other Revenueincludes revenue related to late payment, charges, mutual assistance, off-system sales, and service application fees. Other revenue increasedRevenue decreased for the three and nine months ended September 30, 2022,March 31, 2024 compared to the same period in 2021, primarily due to an increase in late fees charged to customers.2023.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as conservation, demand response, STRIDE, and the POLR mechanism. The riders are designed to provide full and current cost recovery, as well as a return in certain instances. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. Customer choice programs do not impact the volume of deliveries as BGE remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, BGE acts as the billing agent and therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from BGE, BGE is permitted to recover the electricity and natural gas procurement costs from customers and therefore records the amounts related to the electricity and/or natural gas in Operating revenues and Purchased power and fuel expense. BGE recovers electricity and natural gas procurement costs from customers with a slight mark-up.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of BGE's revenue disaggregation.
The increasedecrease of $60 million and $253$28 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory required programs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| | (Decrease) Increase | | Increase (Decrease) |
| Labor, other benefits, contracting, and materials | $ | (2) | | | $ | 4 | |
| Storm-related costs | (9) | | | (10) | |
| Pension and non-pension postretirement benefits expense | (3) | | | (9) | |
| BSC costs | — | | | 14 | |
| Credit loss expense | (4) | | | 10 | |
Asset impairment (a) | 46 | | | 46 | |
| Other | 2 | | | 5 | |
| 30 | | | 60 | |
| Regulatory required programs | — | | | 3 | |
| | | |
| Total increase | $ | 30 | | | $ | 63 | |
| | | |
| | | |
| | | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase (Decrease) |
| Storm-related costs | | | 10 | |
| | | |
| BSC costs | | | 5 | |
| Credit loss expense | | | (6) | |
| Labor, other benefits, contracting, and materials | | | (3) | |
| | | |
| | | 6 | |
Regulatory required programs(a) | | | 36 | |
| | | |
| Total increase | | | $ | 42 | |
| | | |
| | | |
| | | |
__________
(a)SeeIncrease due to the cost recovery associated with Empower Maryland. Please refer to 2023 10-K Note 73 — Asset ImpairmentsRegulatory Matters for additional information on the asset impairment.additional information.
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase |
Depreciation and amortization(a) | $ | 10 | | | $ | 30 | |
| Regulatory required programs | (4) | | | 2 | |
| Regulatory asset amortization | — | | | 4 | |
| | | |
| Total increase | $ | 6 | | | $ | 36 | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase (Decrease) |
| Depreciation and amortization | | | $ | 1 | |
Regulatory required programs(a) | | | (25) | |
| Regulatory asset amortization | | | 7 | |
| | | |
| Total decrease | | | $ | (17) | |
__________
(a)Depreciation and amortization increased primarilyDecrease due to ongoing capital expenditures.the cost recovery associated with Empower Maryland. Please refer to 2023 10-K Note 3 — Regulatory Matters for additional information.
Taxes other than income taxes
Interest expense, net increased by $5 million and $14$6 million for the three and nine months ended September 30, 2022,March 31, 2024, respectively compared to the same period in 2021,2023, primarily due to the issuance of debt during the second quarter of 2023.
Taxes other than income taxes increased by $6 million for the three months ended March 31, 2024, respectively, compared to the same period in 2023, primarily due to increased property taxes.
Effective income tax rates were (26.9)%8.3% and (12.5)%20.6% for the three months ended September 30, 2022March 31, 2024 and 2021, respectively, and 1.1% and (9.0)% for the nine months ended September 30, 2022 and 2021,2023, respectively. The change is primarily due to decreases in the multi-year plans' accelerated income tax benefits in 2022 as compared to 2021. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans and Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Results of Operations — PHI
PHI’s Results of Operations include the results of its three reportable segments, Pepco, DPL, and ACE. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services, and the costs are directly charged or allocated to the applicable subsidiaries. Additionally, the results of PHI’s corporate operations include interest costs from various financing activities. All material intercompany accounts and transactions have been eliminated in consolidation. The following table sets forth PHI's GAAP consolidated Net income, by Registrant, for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021.2023. See the Results of Operations for Pepco, DPL, and ACE for additional information.
| | Three Months Ended
September 30, | | Favorable Variance | | Nine Months Ended September 30, | | (Unfavorable) Favorable Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| Three Months Ended
March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
| PHI | |
| PHI | |
| PHI | PHI | $ | 289 | | | $ | 266 | | | $ | 23 | | | $ | 518 | | | $ | 535 | | | $ | (17) | |
| Pepco | Pepco | 145 | | | 130 | | | 15 | | | 261 | | | 264 | | | (3) | |
| Pepco | |
| Pepco | |
| DPL | |
| DPL | |
| DPL | DPL | 52 | | | 50 | | | 2 | | | 130 | | | 135 | | | (5) | |
| ACE | ACE | 94 | | | 90 | | | 4 | | | 131 | | | 141 | | | (10) | |
| ACE | |
| ACE | |
Other(a) | Other(a) | (2) | | | (4) | | | 2 | | | (4) | | | (5) | | | 1 | |
Other(a) | |
Other(a) | |
__________
(a)Primarily includes eliminating and consolidating adjustments, PHI's corporate operations, shared service entities, and other financing and investinginvestment activities.
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net Income increased by $23$13 millionprimarily due to the absence of an increase environmental liabilities, an increase in ACE and DPL Delaware electric distribution rates, favorable impacts as a result of Pepco'sthe Pepco Maryland and District of ColumbiaDPL Maryland multi-year plans, and higher electric distributiontransmission rates at DPLPepco and ACE,DPL, partially offset by an increase in depreciation expense.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net Income decreased by $17 million primarily due to an increase in depreciation expense, interest expense at Pepco and ACE, credit loss expense at Pepco and DPL, storm costs at Pepco and DPL, higher contracting costs partially due to timing of maintenance projects at Pepco, the absence of favorable weather and volume as a result of the CIP at ACE, and timing of excess deferred tax amortization at Pepco, partially offset by favorable impacts as a result of Pepco's Maryland and District of Columbia multi-year plans and higher electric distribution rates at DPL and ACE.various operating expenses.
Results of Operations — Pepco
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Favorable (Unfavorable) Variance | | Nine Months Ended September 30, | | Favorable (Unfavorable) Variance |
| 2022 | | 2021 | | | 2022 | | 2021 | |
| Operating revenues | $ | 724 | | | $ | 660 | | | $ | 64 | | | $ | 1,919 | | | $ | 1,736 | | | $ | 183 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | |
| Purchased power | 230 | | | 172 | | | (58) | | | 605 | | | 471 | | | (134) | |
| Operating and maintenance | 121 | | | 120 | | | (1) | | | 380 | | | 341 | | | (39) | |
| Depreciation and amortization | 99 | | | 104 | | | 5 | | | 312 | | | 302 | | | (10) | |
| Taxes other than income taxes | 105 | | | 105 | | | — | | | 291 | | | 282 | | | (9) | |
| Total operating expenses | 555 | | | 501 | | | (54) | | | 1,588 | | | 1,396 | | | (192) | |
| | | | | | | | | | | |
| Operating income | 169 | | | 159 | | | 10 | | | 331 | | | 340 | | | (9) | |
| Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | (37) | | | (35) | | | (2) | | | (111) | | | (104) | | | (7) | |
| Other, net | 14 | | | 12 | | | 2 | | | 39 | | | 37 | | | 2 | |
| Total other income and (deductions) | (23) | | | (23) | | | — | | | (72) | | | (67) | | | (5) | |
| Income before income taxes | 146 | | | 136 | | | 10 | | | 259 | | | 273 | | | (14) | |
| Income taxes | 1 | | | 6 | | | 5 | | | (2) | | | 9 | | | 11 | |
| Net income | $ | 145 | | | $ | 130 | | | $ | 15 | | | $ | 261 | | | $ | 264 | | | $ | (3) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Favorable (Unfavorable) Variance | | | | |
| 2024 | | 2023 | | | | | | |
| Operating revenues | $ | 759 | | | $ | 710 | | | $ | 49 | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | |
| Purchased power | 281 | | | 258 | | | (23) | | | | | | | |
| Operating and maintenance | 150 | | | 150 | | | — | | | | | | | |
| Depreciation and amortization | 107 | | | 108 | | | 1 | | | | | | | |
| Taxes other than income taxes | 102 | | | 94 | | | (8) | | | | | | | |
| Total operating expenses | 640 | | | 610 | | | (30) | | | | | | | |
| | | | | | | | | | | |
| Operating income | 119 | | | 100 | | | 19 | | | | | | | |
| Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | (45) | | | (39) | | | (6) | | | | | | | |
| Other, net | 15 | | | 16 | | | (1) | | | | | | | |
| Total other income and (deductions) | (30) | | | (23) | | | (7) | | | | | | | |
| Income before income taxes | 89 | | | 77 | | | 12 | | | | | | | |
| Income taxes | 14 | | | 12 | | | (2) | | | | | | | |
| Net income | $ | 75 | | | $ | 65 | | | $ | 10 | | | | | | | |
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net Income increased by $1510 million primarily due to the absence of an increase in environmental liabilities, favorable impacts of the Maryland multi-year plan, customer growth, and District of Columbia multi-year plans,higher transmission rates, partially offset by an increase in depreciation expense.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021.Net income decreased by $3 million primarily due to higher contracting costs partially due to timing of maintenance projects, an increase in depreciationinterest expense, credit loss expense, storm costs, interest expense, and timing of excess deferred tax amortization, partially offset by the favorable impacts of the Maryland and District of Columbia multi-year plans.depreciation expense.
The changes in Operating revenues consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| Distribution | $ | 20 | | | $ | 47 | |
| Transmission | (8) | | | — | |
| Other | (3) | | | (3) | |
| 9 | | | 44 | |
| Regulatory required programs | 55 | | | 139 | |
| Total increase | $ | 64 | | | $ | 183 | |
| | | | | | | |
| | | Three Months Ended
March 31, 2024 |
| | | Increase |
| Distribution | | | $ | 9 | |
| Transmission | | | 9 | |
| Other | | | — | |
| | | 18 | |
| Regulatory required programs | | | 31 | |
| Total increase | | | $ | 49 | |
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in both Maryland and the District of Columbia are not impacted by abnormal weather or usage per customer as a result of a bill stabilization adjustment (BSA)BSA that provides for a fixed distribution charge per customer by customer class. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.
| | | | | | | | | | | |
| At March 31, |
| Number of Electric Customers | 2024 | | 2023 |
| Residential | 869,606 | | | 859,207 | |
| Small commercial & industrial | 54,177 | | | 54,089 | |
| Large commercial & industrial | 22,992 | | | 22,858 | |
| Public authorities & electric railroads | 207 | | | 201 | |
| Total | 946,982 | | | 936,355 | |
| | | | | | | | | | | |
| As of September 30, |
| Number of Electric Customers | 2022 | | 2021 |
| Residential | 853,873 | | | 839,574 | |
| Small commercial & industrial | 54,423 | | | 53,849 | |
| Large commercial & industrial | 22,789 | | | 22,586 | |
| Public authorities & electric railroads | 196 | | | 179 | |
| Total | 931,281 | | | 916,188 | |
Distribution Revenue increased for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 20212023 primarily due to favorable impacts of the Maryland multi-year plan, and District of Columbia multi-year plans.customer growth.
Transmission RevenueRevenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmission revenue decreasedincreased for the three months ended September 30, 2022,March 31, 2024, compared to the same period in 2021,2023, primarily due to decreasesincreases in underlying costs. Transmission revenue remained consistent for the nine months ended September 30, 2022.costs and capital investment.
Other Revenueincludes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DC PLUG, and SOS procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as Pepco remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, Pepco acts as the billing agent and therefore, Pepco does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from Pepco, Pepco is permitted to recover the electricity and REC procurement costs from customers and therefore records the amounts related to the electricity and RECs in Operating revenues and Purchased power expense. Pepco recovers electricity and REC procurement costs from customers with a slight mark-up.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of Pepco's revenue disaggregation.
The increase of $58 million and $134$23 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023, in Purchased power expense is fully offset in Operating revenues as part of regulatory required programs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| BSC and PHISCO Costs | $ | 1 | | | $ | 14 | |
| Storm-related costs | 1 | | | 7 | |
| Credit loss expense | — | | | 9 | |
Labor, other benefits, contracting and materials(a) | (1) | | | 7 | |
| Pension and non-pension postretirement benefits expense | — | | | 1 | |
| | | |
| | | |
| Other | (2) | | | (3) | |
| (1) | | | 35 | |
| | | |
| Regulatory required programs | 2 | | | 4 | |
| Total increase | $ | 1 | | | $ | 39 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase (Decrease) | | |
| BSC and PHISCO costs | $ | 7 | | | |
| Credit loss expense | 7 | | | |
| | | |
| Pension and non-pension postretirement benefits expense | (1) | | | |
Labor, other benefits, contracting and materials(a) | (22) | | | |
| | | |
| Other | 1 | | | |
| (8) | | | |
| | | |
Regulatory required programs(b) | 8 | | | |
| Total increase | $ | — | | | |
__________(a)Primarily reflects the absence of an increase in environmental liabilities for the three months ended March 31, 2024 compared to the same period in 2023.
131(b)Increase due to the cost recovery associated with Empower Maryland. Please refer to 2023 10-K Note 3 — Regulatory Matters for additional information.
__________
(a) Primarily reflects higher contracting costs partially due to timing of maintenance projects.
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| (Decrease) | | Increase (Decrease) |
Depreciation and amortization(a) | $ | (1) | | | $ | 10 | |
| Regulatory asset amortization | (1) | | | (3) | |
| Regulatory required programs | (3) | | | 3 | |
| Total (decrease) increase | $ | (5) | | | $ | 10 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase (Decrease) | | |
Depreciation and amortization(a) | $ | 5 | | | |
| Regulatory asset amortization | — | | | |
| Regulatory required programs | (6) | | | |
| Total decrease | $ | (1) | | | |
__________
(a)Depreciation and amortization decreased for the three months ended September 30, 2022 primarily due to a reduction in transmission depreciation rates approved on August 16, 2022, which is fully offset in Operating revenues as part of the FERC-approved formula. Depreciation and amortization increased for the nine months ended September 30, 2022 primarily due to ongoing capital expenditures.
Taxes other than income taxes remained consistentincreased $8 million for the foror the three months ended September 30, 2022 and 2021 and increased by $9 million for the nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, primarily due to an increase in property taxes.
Interest expense, net increased by $2 million and $7$6 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023, primarily due to an increase in interest rates and the issuance of debt in 20212023 and 2022.2024.
Effective income tax rates were 0.7%15.7% and 4.4%15.6% for the three months ended September 30, 2022March 31, 2024 and 2021, respectively, and (0.8)% and 3.3% for the nine months ended September 30, 2022 and 2021,2023, respectively. The three and nine months ended September 30, 2022 change is primarily due to the acceleration of certain income tax benefits as a result of the Maryland and District of Columbia multi-year plans, partially offset by the timing of excess deferred tax amortization. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statement for additional information on the three-year electric distribution multi-year plans and Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Results of Operations — DPL
| | Three Months Ended September 30, | | Favorable (Unfavorable) Variance | | Nine Months Ended September 30, | | Favorable (Unfavorable) Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Three Months Ended March 31, | |
| | Three Months Ended March 31, | |
| | 2024 | |
| 2024 | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | $ | 412 | | | $ | 360 | | | $ | 52 | | | $ | 1,176 | | | $ | 1,040 | | | $ | 136 | |
| Operating expenses | Operating expenses | |
| Operating expenses | |
| Operating expenses | |
| Purchased power and fuel | |
| Purchased power and fuel | |
| Purchased power and fuel | Purchased power and fuel | 183 | | | 138 | | | (45) | | | 507 | | | 402 | | | (105) | |
| Operating and maintenance | Operating and maintenance | 84 | | | 87 | | | 3 | | | 266 | | | 249 | | | (17) | |
| Operating and maintenance | |
| Operating and maintenance | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 59 | | | 53 | | | (6) | | | 172 | | | 157 | | | (15) | |
| Taxes other than income taxes | Taxes other than income taxes | 19 | | | 17 | | | (2) | | | 54 | | | 50 | | | (4) | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 345 | | | 295 | | | (50) | | | 999 | | | 858 | | | (141) | |
| | Operating income | Operating income | 67 | | | 65 | | | 2 | | | 177 | | | 182 | | | (5) | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | Interest expense, net | (16) | | | (15) | | | (1) | | | (48) | | | (47) | | | (1) | |
| Interest expense, net | |
| Interest expense, net | |
| Other, net | |
| Other, net | |
| Other, net | Other, net | 3 | | | 3 | | | — | | | 9 | | | 9 | | | — | |
| Total other income and (deductions) | Total other income and (deductions) | (13) | | | (12) | | | (1) | | | (39) | | | (38) | | | (1) | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Income before income taxes | |
| Income before income taxes | |
| Income before income taxes | Income before income taxes | 54 | | | 53 | | | 1 | | | 138 | | | 144 | | | (6) | |
| Income taxes | Income taxes | 2 | | | 3 | | | 1 | | | 8 | | | 9 | | | 1 | |
| Income taxes | |
| Income taxes | |
| Net income | Net income | $ | 52 | | | $ | 50 | | | $ | 2 | | | $ | 130 | | | $ | 135 | | | $ | (5) | |
| Net income | |
| Net income | |
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021.March 31, 2023. Net income remained relatively consistent.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased $5increased $6 million primarily due to an increase in credit loss expense, storm costs,Delaware electric distribution rates, higher transmission rates, and depreciation expense,favorable impacts of the Maryland multi-year plan, partially offset by higher electric distribution rates.an increase in interest expense.
The changes in Operating revenues consisted of the following:
| | Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| Electric | | Gas | | Total | | Electric | | Gas | | Total |
| Three Months Ended
March 31, 2024 | |
| Three Months Ended
March 31, 2024 | |
| Three Months Ended
March 31, 2024 | |
| Increase (Decrease) | |
| Increase (Decrease) | |
| Increase (Decrease) | |
| Electric | |
| Electric | |
| Electric | |
| Weather | |
| Weather | |
| Weather | Weather | $ | 1 | | | $ | — | | | $ | 1 | | | $ | — | | | $ | — | | | $ | — | |
| Volume | Volume | — | | | (1) | | | (1) | | | 4 | | | 2 | | | 6 | |
| Volume | |
| Volume | |
| Distribution | |
| Distribution | |
| Distribution | Distribution | 3 | | | 1 | | | 4 | | | 13 | | | 4 | | | 17 | |
| Transmission | Transmission | 4 | | | — | | | 4 | | | 6 | | | — | | | 6 | |
| Transmission | |
| Transmission | |
| Other | Other | (1) | | | — | | | (1) | | | (2) | | | — | | | (2) | |
| 7 | | | — | | | 7 | | | 21 | | | 6 | | | 27 | |
| Other | |
| Other | |
| 21 | |
| 21 | |
| 21 | |
| Regulatory required programs | Regulatory required programs | 30 | | | 15 | | | 45 | | | 74 | | | 35 | | | 109 | |
| Total increase | $ | 37 | | | $ | 15 | | | $ | 52 | | | $ | 95 | | | $ | 41 | | | $ | 136 | |
| Regulatory required programs | |
| Regulatory required programs | |
| Total increase (decrease) | |
| Total increase (decrease) | |
| Total increase (decrease) | |
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in Maryland are not impacted by abnormal weather or usage per customer as a result of a bill stabilization adjustment (BSA)BSA that provides for a fixed distribution charge per customer by customer class. While Operating revenues from electric distribution customers in Maryland are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.
Weather. The demand for electricity and natural gas in Delaware is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the electric and natural gas businesses, very cold weather in winter months are referred to as "favorable weather conditions” because these weather conditions result in increased deliveries of electricity and natural gas. Conversely, mild weather reduces demand. During the three months ended March 31, 2024, compared to the same period in 2023, Operating revenues related to weather increased due to favorable weather conditions in Delaware electric and natural gas service territories.
demand. During the three and nine months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather remained relatively consistent.
Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree days for a 20-year period in DPL'sthe Delaware electric service territory and a 30-year period in DPL'sthe Delaware natural gas service territory. The changes in heating and cooling degree days in DPL’sthe Delaware service territory for the three and nine months ended September 30, 2022March 31, 2024 compared to same period in 20212023 and normal weather consisted of the following:
| | Three Months Ended September 30, | | % Change |
| Three Months Ended March 31, | | | Three Months Ended March 31, | | | | % Change |
| Delaware Electric Service Territory | Delaware Electric Service Territory | 2022 | | 2021 | | Normal | | 2022 vs. 2021 | | 2022 vs. Normal | Delaware Electric Service Territory | 2024 | | 2023 | | Normal | | 2024 vs. 2023 | | 2024 vs. Normal |
| Heating Degree-Days | Heating Degree-Days | 32 | | | 11 | | | 26 | | | 190.9 | % | | 23.1 | % | Heating Degree-Days | 2,204 | | | 1,952 | | 1,952 | | | 2,447 | | 2,447 | | | 12.9 | | 12.9 | % | | (9.9) | % |
| Cooling Degree-Days | Cooling Degree-Days | 1,043 | | | 969 | | | 906 | | | 7.6 | % | | 15.1 | % | Cooling Degree-Days | — | | | — | | — | | | 1 | | 1 | | | — | | — | % | | (100.0) | % |
| | | Nine Months Ended September 30, | | % Change |
| | 2022 | | 2021 | | Normal | | 2022 vs. 2021 | | 2022 vs. Normal |
| Heating Degree-Days | 2,828 | | | 2,848 | | | 2,977 | | | (0.7) | % | | (5.0) | % |
| Cooling Degree-Days | 1,374 | | | 1,333 | | | 1,243 | | | 3.1 | % | | 10.5 | % |
|
| | Three Months Ended September 30, | | % Change |
| Three Months Ended March 31, | | | Three Months Ended March 31, | | | | % Change |
| Delaware Natural Gas Service Territory | Delaware Natural Gas Service Territory | 2022 | | 2021 | | Normal | | 2022 vs. 2021 | | 2022 vs. Normal | Delaware Natural Gas Service Territory | 2024 | | 2023 | | Normal | | 2024 vs. 2023 | | 2024 vs. Normal |
| Heating Degree-Days | Heating Degree-Days | 32 | | | 11 | | | 36 | | | 190.9 | % | | (11.1) | % | Heating Degree-Days | 2,204 | | | 1,952 | | 1,952 | | | 2,476 | | 2,476 | | | 12.9 | | 12.9 | % | | (11.0) | % |
| | | Nine Months Ended September 30, | | % Change |
| | 2022 | | 2021 | | Normal | | 2022 vs. 2021 | | 2022 vs. Normal |
| Heating Degree-Days | 2,828 | | | 2,848 | | | 3,029 | | | (0.7) | % | | (6.6) | % |
|
Volume, exclusive of the effects of weather, remained relatively consistent for the three months ended September 30, 2022March 31, 2024 compared to the same period in 2021 and increased for the nine months ended September 30, 2022 compared to the same period in2021 primarily due to customer growth and usage.2023.
| | Electric Retail Deliveries to Delaware Customers (in GWhs) | Electric Retail Deliveries to Delaware Customers (in GWhs) | Three Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) | | Nine Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Electric Retail Deliveries to Delaware Customers (in GWhs) | |
| | 2024 | |
| 2024 | |
| Residential | |
| Residential | |
| Residential | Residential | 978 | | | 973 | | | 0.5 | % | | (2.1) | % | | 2,548 | | | 2,530 | | | 0.7 | % | | 0.2 | % |
| Small commercial & industrial | Small commercial & industrial | 400 | | | 412 | | | (2.9) | % | | (4.0) | % | | 1,107 | | | 1,111 | | | (0.4) | % | | (0.6) | % |
| Small commercial & industrial | |
| Small commercial & industrial | |
| Large commercial & industrial | |
| Large commercial & industrial | |
| Large commercial & industrial | Large commercial & industrial | 856 | | | 860 | | | (0.5) | % | | (1.2) | % | | 2,394 | | | 2,359 | | | 1.5 | % | | 1.4 | % |
| Public authorities & electric railroads | Public authorities & electric railroads | 7 | | | 7 | | | — | % | | (1.7) | % | | 24 | | | 26 | | | (7.7) | % | | (6.1) | % |
| Public authorities & electric railroads | |
| Public authorities & electric railroads | |
Total electric retail deliveries(a) | Total electric retail deliveries(a) | 2,241 | | | 2,252 | | | (0.5) | % | | (2.1) | % | | 6,073 | | | 6,026 | | | 0.8 | % | | 0.5 | % |
Total electric retail deliveries(a) | |
Total electric retail deliveries(a) | |
| | As of September 30, |
| At March 31, | | | At March 31, |
| Number of Total Electric Customers (Maryland and Delaware) | Number of Total Electric Customers (Maryland and Delaware) | 2022 | | 2021 | Number of Total Electric Customers (Maryland and Delaware) | 2024 | | 2023 |
| Residential | Residential | 480,779 | | | 476,008 | |
| Small commercial & industrial | Small commercial & industrial | 63,685 | | | 62,990 | |
| Large commercial & industrial | Large commercial & industrial | 1,230 | | | 1,215 | |
| Public authorities & electric railroads | Public authorities & electric railroads | 597 | | | 605 | |
| Total | Total | 546,291 | | | 540,818 | |
__________
(a)Reflects delivery volumes from customers purchasing electricity directly from DPL and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.
(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 20-year average.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural Gas Retail Deliveries to Delaware Customers (in mmcf) | Three Months Ended
March 31, | | % Change | | Weather - Normal % Change(b) | | | | | | |
| 2024 | | 2023 | | | | | | | | |
| Residential | 3,913 | | | 3,581 | | | 9.3 | % | | (1.2) | % | | | | | | | | |
| Small commercial & industrial | 1,717 | | | 1,652 | | | 3.9 | % | | (6.8) | % | | | | | | | | |
| Large commercial & industrial | 428 | | | 414 | | | 3.4 | % | | 3.5 | % | | | | | | | | |
| Transportation | 1,960 | | | 1,900 | | | 3.2 | % | | (1.9) | % | | | | | | | | |
Total natural gas deliveries(a) | 8,018 | | | 7,547 | | | 6.2 | % | | (2.4) | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural Gas Retail Deliveries to Delaware Customers (in mmcf) | Three Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) | | Nine Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) |
| 2022 | | 2021 | | | | 2022 | | 2021 | | |
| Residential | 374 | | | 399 | | | (6.3) | % | | (15.2) | % | | 5,810 | | | 5,507 | | | 5.5 | % | | 4.7 | % |
| Small commercial & industrial | 331 | | | 352 | | | (6.0) | % | | (10.2) | % | | 2,882 | | | 2,647 | | | 8.9 | % | | 9.1 | % |
| Large commercial & industrial | 397 | | | 395 | | | 0.5 | % | | 0.6 | % | | 1,259 | | | 1,247 | | | 1.0 | % | | 0.9 | % |
| Transportation | 1,284 | | | 1,303 | | | (1.5) | % | | (2.1) | % | | 4,934 | | | 4,997 | | | (1.3) | % | | (1.1) | % |
Total natural gas deliveries(a) | 2,386 | | | 2,449 | | | (2.6) | % | | (5.2) | % | | 14,885 | | | 14,398 | | | 3.4 | % | | 3.2 | % |
| | As of September 30, |
| At March 31, | | | At March 31, |
| Number of Delaware Natural Gas Customers | Number of Delaware Natural Gas Customers | 2022 | | 2021 | Number of Delaware Natural Gas Customers | 2024 | | 2023 |
| Residential | Residential | 129,005 | | | 127,740 | |
| Small commercial & industrial | Small commercial & industrial | 10,044 | | | 9,935 | |
| Large commercial & industrial | Large commercial & industrial | 16 | | | 21 | |
| Transportation | Transportation | 156 | | | 158 | |
| Total | Total | 139,221 | | | 137,854 | |
__________
(a)Reflects delivery volumes from customers purchasing natural gas directly from DPL and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges.
(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
Distribution Revenue increased for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 20212023 primarily due to favorable impacts of the higher electric distribution rates in Delaware that became effective July 2023, favorable impacts of the Maryland multi-year plan that became effective in March 2022January 2024, and higher natural gas DSIC rates in Delaware that became effective in January and July 2022.2024, partially offset by lower electric DSIC rates in Delaware that became effective in January 2024.
Transmission RevenueRevenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. During the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021,2023, transmission revenue increased primarily due to increases in underlying costs.costs and capital investment.
Other Revenue includes rental revenue, revenue related to late payment charges,service connection fees, and mutual assistance revenues, and recoveries of other taxes.revenues.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DE Renewable Portfolio Standards, SOS procurement and administrative costs, and GCR costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. All customers have the choice to purchase electricity from competitive electric generation suppliers; however, only certain commercial and industrial customers have the choice to purchase natural gas from competitive natural gas suppliers. Customer choice programs do not impact the volume of deliveries as DPL remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, DPL either acts as the billing agent or the competitive supplier separately bills its own customers, and therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from DPL, DPL is permitted to recover the electricity, natural gas, and REC procurement costs from customers and therefore records the amounts related to the electricity, natural gas, and RECs in Operating revenues and Purchased power and fuel expense. DPL recovers electricity and REC procurement costs from customers with a slight mark-up, and natural gas costs without mark-up.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of DPL's revenue disaggregation.
The decrease of $6 million for the three months ended March 31, 2024, compared to the same period in 2023, respectively, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory required programs.
The increase of $45 million and $105 million for the three and nine months ended September 30, 2022, compared to the same period in 2021, respectively, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory required programs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
| Storm-related costs | $ | 1 | | | $ | 4 | |
| BSC and PHISCO costs | 1 | | | 7 |
| Credit loss expense | — | | | 4 | |
| | | |
| Labor, other benefits, contracting and materials | (5) | | | (3) | |
| Other | (2) | | | 1 | |
| (5) | | | 13 | |
| Regulatory required programs | 2 | | | 4 | |
| Total (decrease) increase | $ | (3) | | | $ | 17 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase (Decrease) | | |
| Storm-related Costs | $ | 6 | | | |
| BSC and PHISCO costs | 3 | | | |
| Labor and contracting | 2 | | | |
| Credit loss expense | (2) | | | |
| | | |
| Other | (1) | | | |
| 8 | | | |
| Regulatory required programs | — | | | |
| Total increase | $ | 8 | | | |
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended
September 30, 2022 |
| Increase (Decrease) | | Increase (Decrease) |
Depreciation and amortization(a) | $ | 7 | | | $ | 15 | |
| Regulatory asset amortization | (1) | | | (2) | |
| Regulatory required programs | — | | | 2 | |
| Total increase | $ | 6 | | | $ | 15 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase | | |
Depreciation and amortization(a) | $ | 1 | | | |
| Regulatory required programs | — | | | |
| Regulatory asset amortization | — | | | |
| Total increase | $ | 1 | | | |
__________
(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.
Taxes other than income taxes Interest expense, netincreased by $2 million and $4$5 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023, primarily due to an increase in property taxesinterest rates and gross receipts taxes.the issuance of debt in 2023 and 2024.
Effective income tax rates were 3.7%20.5% and 5.7%16.7% for the three months ended September 30, 2022March 31, 2024 and 2021, respectively, and 5.8% and 6.3% for the nine months ended September 30, 2022 and 2021,2023, respectively. See Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Results of Operations — ACE
| | Three Months Ended September 30, | | Favorable (Unfavorable) Variance | | Nine Months Ended September 30, | | Favorable (Unfavorable) Variance |
| 2022 | | 2021 | | 2022 | | 2021 | |
| Three Months Ended March 31, | |
| Three Months Ended March 31, | |
| Three Months Ended March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
| Operating revenues | |
| Operating revenues | |
| Operating revenues | Operating revenues | $ | 462 | | | $ | 451 | | | $ | 11 | | | $ | 1,120 | | | $ | 1,080 | | | $ | 40 | |
| | Operating expenses | Operating expenses | |
| | Operating expenses | |
| | Operating expenses | |
| Purchased power | |
| Purchased power | |
| Purchased power | Purchased power | 197 | | | 230 | | | 33 | | | 497 | | | 541 | | | 44 | |
| Operating and maintenance | Operating and maintenance | 80 | | | 81 | | | 1 | | | 251 | | | 231 | | | (20) | |
| Operating and maintenance | |
| Operating and maintenance | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | Depreciation and amortization | 74 | | | 46 | | | (28) | | | 192 | | | 133 | | | (59) | |
| Taxes other than income taxes | Taxes other than income taxes | 2 | | | 2 | | | — | | | 7 | | | 6 | | | (1) | |
| Taxes other than income taxes | |
| Taxes other than income taxes | |
| Total operating expenses | |
| Total operating expenses | |
| Total operating expenses | Total operating expenses | 353 | | | 359 | | | 6 | | | 947 | | | 911 | | | (36) | |
| | Operating income | Operating income | 109 | | | 92 | | | 17 | | | 173 | | | 169 | | | 4 | |
| | Operating income | |
| | Operating income | |
| Other income and (deductions) | |
| Other income and (deductions) | |
| Other income and (deductions) | Other income and (deductions) | | | | | | | | | | | |
| Interest expense, net | Interest expense, net | (17) | | | (14) | | | (3) | | | (49) | | | (43) | | | (6) | |
| Interest expense, net | |
| Interest expense, net | |
| Other, net | |
| Other, net | |
| Other, net | Other, net | 3 | | | 1 | | | 2 | | | 9 | | | 3 | | | 6 | |
| Total other income and (deductions) | Total other income and (deductions) | (14) | | | (13) | | | (1) | | | (40) | | | (40) | | | — | |
| Total other income and (deductions) | |
| Total other income and (deductions) | |
| Income before income taxes | |
| Income before income taxes | |
| Income before income taxes | Income before income taxes | 95 | | | 79 | | | 16 | | | 133 | | | 129 | | | 4 | |
| Income taxes | Income taxes | 1 | | | (11) | | | (12) | | | 2 | | | (12) | | | (14) | |
| Income taxes | |
| Income taxes | |
| Net income | Net income | $ | 94 | | | $ | 90 | | | $ | 4 | | | $ | 131 | | | $ | 141 | | | $ | (10) | |
| Net income | |
| Net income | |
Three Months Ended September 30, 2022March 31, 2024 Compared to Three Months Ended September 30, 2021March 31, 2023. Net income increaseddecreased by $4 million primarily due to increases in distribution rates, partially offset by an increase in depreciation expense.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased by $10 million primarily due to the absence of favorable weather and volume as a result of the CIP, an increase invarious operating expenses, depreciation expense, and interest expense, partially offset by increasesan increase in distribution rates.
The changes in Operating revenues consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| Increase (Decrease) | | (Decrease) Increase |
| Weather | $ | — | | | $ | (3) | |
| Volume | — | | | (11) | |
| Distribution | 15 | | | 35 | |
| Transmission | 5 | | | 8 | |
| | | |
| 20 | | | 29 | |
| | | |
| | | |
| | | |
| | | |
| Regulatory required programs | (9) | | | 11 | |
| Total increase | $ | 11 | | | $ | 40 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase (Decrease) | | |
| Distribution | $ | 11 | | | |
| Transmission | 2 | | | |
| Other | 1 | | | |
| 14 | | | |
| Regulatory required programs | (9) | | | |
| Total increase | $ | 5 | | | |
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in New Jersey are not impacted by abnormal weather or usage per customer as a result of the CIP which became effective, prospectively, in the third quarter of 2021. The CIP compares current distribution revenues by customer class to approved target revenues established in ACE’s most recent distribution base rate case. The CIP is calculated annually, and recovery is subject to certain conditions, including an earnings test and ceilings on customer rate increases. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.
Weather. Prior to the third quarter of 2021, the demand for electricity was affected by weather conditions. With respect to the electric business, very warm weather in summer months and very cold weather in winter months
are referred to as “favorable weather conditions” because these weather conditions result in increased deliveries of electricity. Conversely, mild weather reduces demand. During the nine months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather decreased due to the absence of favorable impacts in the first and second quarter of 2022 as a result of the CIP.
Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree days for a 20-year period in ACE’s service territory. The changes in heating and cooling degree days in ACE’s service territory for the nine months ended September 30, 2022 compared to same period in 2021 and normal weather consisted of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, | | Normal | | % Change |
| Heating and Cooling Degree-Days | 2022 | | 2021 | | | 2022 vs. 2021 | | 2022 vs. Normal |
| Heating Degree-Days | 3,007 | | | 2,884 | | | 3,024 | | | 4.3 | % | | (0.6) | % |
| Cooling Degree-Days | 1,231 | | | 1,246 | | | 1,178 | | | (1.2) | % | | 4.5 | % |
Volume,exclusive of the effects of weather, decreased for the nine months ended September 30, 2022 compared to the same period in 2021, due to the absence of favorable impacts in the first and second quarter of 2022 as a result of the CIP.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Nine Months Ended
September 30, | | % Change | | Weather - Normal % Change(b) |
| Electric Retail Deliveries to Customers (in GWhs) | | | | | | | 2022 | | 2021 | | |
| Residential | | | | | | | | | 3,293 | | | 3,443 | | | (4.4) | % | | (4.6) | % |
| Small commercial & industrial | | | | | | | | | 1,179 | | | 1,073 | | | 9.9 | % | | 9.8 | % |
| Large commercial & industrial | | | | | | | | | 2,396 | | | 2,351 | | | 1.9 | % | | 1.8 | % |
| Public authorities & electric railroads | | | | | | | | | 34 | | | 33 | | | 3.0 | % | | — | % |
Total electric retail deliveries(a) | | | | | | | | | 6,902 | | | 6,900 | | | — | % | | (0.2) | % |
| | | | | | | | | | | |
| As of September 30, |
| Number of Electric Customers | 2022 | | 2021 |
| Residential | 501,869 | | | 499,775 | |
| Small commercial & industrial | 62,204 | | | 61,838 | |
| Large commercial & industrial | 3,075 | | | 3,209 | |
| Public authorities & electric railroads | 731 | | | 707 | |
| Total | 567,879 | | | 565,529 | |
__________
(a)Reflects delivery volumes from customers purchasing electricity directly from ACE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.
(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 20-year average. | | | | | | | | | | | |
| At March 31, |
| Number of Electric Customers | 2024 | | 2023 |
| Residential | 505,793 | | | 503,260 | |
| Small commercial & industrial | 62,704 | | | 62,230 | |
| Large commercial & industrial | 2,893 | | | 3,030 | |
| Public authorities & electric railroads | 728 | | | 726 | |
| Total | 572,118 | | | 569,246 | |
Distribution Revenue increased for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 20212023 due to higher distribution rates that became effective in January 2022.December 2023 and the expiration of customer credits related to the TCJA tax benefits.
Transmission Revenues. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmission revenue increased for thethree months ended September 30, 2022March 31, 2024 compared to the same period in 2021, primarily due to increases in underlying costs. Transmission revenue increased for the nine months ended September 30, 2022 compared to the same period in 2021,2023, primarily due to increases in underlying costs and capital investment.
Other Revenue includes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, Societal Benefits Charge, Transition Bonds,Bond Charge, and BGS procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income
taxes. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as ACE remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ACE acts as the billing agent and therefore, ACE does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ACE, ACE is permitted to recover the electricity, ZEC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power expense related to the electricity, ZECs, and RECs.
See Note 54 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ACE's revenue disaggregation.
The decrease of $33 million and $44$8 million for the three and nine months ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023, in Purchased power expense is fully offset in Operating revenues as part of regulatory required programs.
The changes in Operating and maintenance expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| (Decrease) Increase | | Increase (Decrease) |
| Labor, other benefits, contracting and materials | $ | (2) | | | $ | 2 | |
| BSC and PHISCO costs | (1) | | | 3 | |
| Storm-related costs | (1) | | | 1 | |
| | | |
| | | |
| Other | 4 | | | 7 | |
| — | | | 13 | |
| | | |
Regulatory required programs(a) | (1) | | | 7 | |
| Total (decrease) increase | $ | (1) | | | $ | 20 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase | | |
| BSC and PHISCO costs | $ | 3 | | | |
| | | |
| Storm-related costs | 2 | | | |
| | | |
| | | |
| Other | 1 | | | |
| 6 | | | |
| | | |
Regulatory required programs(a) | — | | | |
| Total increase | $ | 6 | | | |
__________
(a)ACE is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through the Societal Benefits Charge.
The changes in Depreciation and amortization expense consisted of the following:
| | | | | | | | | | | |
| Three Months Ended
September 30, 2022 | | Nine Months Ended September 30, 2022 |
| Increase | | Increase |
Depreciation and amortization(a) | $ | 4 | | | $ | 11 | |
| Regulatory asset amortization | — | | | 1 | |
Regulatory required programs(b) | 24 | | | 47 | |
| Total increase | $ | 28 | | | $ | 59 | |
| | | | | | | |
| Three Months Ended
March 31, 2024 | | |
| Increase | | |
Depreciation and amortization(a) | $ | 5 | | | |
| Regulatory asset amortization | 2 | | | |
| Regulatory required programs | — | | | |
| Total increase | $ | 7 | | | |
__________
(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.
(b)Regulatory required programs increased primarily due to the regulatory asset amortization of the PPA termination obligation which is fully offset in Operating revenues.
Interest expense, netincreased $3 million and $6$4 million for the three and nine monthsyear ended September 30, 2022March 31, 2024 compared to the same period in 2021, respectively,2023 primarily due to an increase in interest rates and the issuance of debt in 20212023 and 2022.
Other, net increased by $2 million and $6 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to higher AFUDC equity.2024.
Effective income tax rates were 1.1%27.5% and (13.9)%25.0% for the three months ended September 30, 2022March 31, 2024 and 2021, respectively, and 1.5% and (9.3)% for the nine months ended September 30, 2022 and 2021,2023, respectively. The three and nine months ended September 30, 2022 changes primarily reflect the absence of impacts of the July 14, 2021 settlement, which allowed ACE to retain certain tax benefits in 2021, partially offset by the timing of excess deferred tax amortization. See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information on the July 14, 2021 settlement agreement. See Note 86 — Income Taxes of the Combined Notes to
Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.
Liquidity and Capital Resources (All Registrants)
All results included throughout the liquidity and capital resources section are presented on a GAAP basis.
The Registrants’ operating and capital expenditures requirements are provided by internally generated cash flows from operations, as well as funds from external sources in the capital markets and through bank borrowings. The Registrants’ businesses are capital intensive and require considerable capital resources. Each of the Registrants annually evaluates its financing plan, dividend practices, and credit line sizing, focusing on maintaining its investment grade ratings while meeting its cash needs to fund capital requirements, including construction expenditures, retire debt, pay dividends, and fund pension and OPEB obligations. The Registrants spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment. Additionally, the Utility Registrants operate in rate-regulated environments in which the amount of new investment recovery may be delayed or limited and where such recovery takes place over an extended period of time. Each Registrant’s access to external financing on reasonable terms depends on its credit ratings and current overall capital market business conditions, including that of the utility industry in general. If these conditions deteriorate to the extent that the Registrants no longer have access to the capital markets at reasonable terms, the Registrants have access to credit facilities with aggregate bank commitments of $4.0 billion. The Registrants utilize their credit facilities to support their commercial paper programs, provide for other short-term borrowings, and to issue letters of credit. See the “Credit Matters and Cash Requirements” section below for additional information. The Registrants expect cash flows to be sufficient to meet operating expenses, financing costs, and capital expenditure requirements. See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ debt and credit agreements.
Cash flows related to Constellation have not been presented as discontinued operations and are included in the Consolidated Statements of Cash Flows for all periods presented. The Exelon Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 includes one month of cash flows from Generation. The Exelon Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 includes nine months of cash flows from Generation. This is the primary reason for the changes in cash flows as shown in the tables unless otherwise noted below.
Cash Flows from Operating Activities
The Utility Registrants' cash flows from operating activities primarily result from the transmission and distribution of electricity and, in the case of PECO, BGE, and DPL, gas distribution services. The Utility Registrants' distribution services are provided to an established and diverse base of retail customers. The Utility Registrants' future cash flows may be affected by the economy, weather conditions, future legislative initiatives, future regulatory proceedings with respect to their rates or operations, and their ability to achieve operating cost reductions. Additionally, ComEd is required to purchase CMCs from participating nuclear-powered generating facilities for a five-year period that began in June 2022, and all of its costs of doing so will be recovered through a rider. The price to be paid for each CMC is established through a competitive bidding process. ComEd will provide net payments to, or collect net payments from, customers for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities. ComEd’s cash flows are affected by the establishment of CMC prices and the timing of recovering costs through the CMC regulatory asset.
See Note 3 — Regulatory Matters of the 2021 Recast2023 Form 10-K and Notes 32 — Regulatory Matters and 1311 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information on regulatory and legal proceedings and proposed legislation.
The following table provides a summary of the change in cash flows from operating activities for the ninethree months ended September 30, 2022March 31, 2024 and 20212023 by Registrant:
| | Increase (decrease) in cash flows from operating activities | Increase (decrease) in cash flows from operating activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE | Increase (decrease) in cash flows from operating activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Net income (loss) | Net income (loss) | $ | 298 | | | $ | 97 | | | $ | 91 | | | $ | (23) | | | $ | (17) | | | $ | (3) | | | $ | (5) | | | $ | (10) | |
| Adjustments to reconcile net income to cash: | Adjustments to reconcile net income to cash: | |
| Non-cash operating activities | Non-cash operating activities | (1,316) | | | (114) | | | 58 | | | 100 | | | 228 | | | 67 | | | 43 | | | 125 | |
| Option premiums (paid), net | 147 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Collateral received, net | (655) | | | 1 | | | — | | | 105 | | | 205 | | | 46 | | | 89 | | | 70 | |
| Non-cash operating activities | |
| Non-cash operating activities | |
| | Collateral received (paid), net | |
| Collateral received (paid), net | |
| Collateral received (paid), net | |
| Income taxes | Income taxes | (247) | | | 9 | | | (25) | | | (23) | | | (20) | | | (15) | | | (15) | | | (3) | |
| Pension and non-pension postretirement benefit contributions | Pension and non-pension postretirement benefit contributions | 6 | | | (3) | | | 2 | | | 12 | | | (32) | | | — | | | — | | | (4) | |
| Changes in regulatory assets and liabilities, net | (322) | | | (249) | | | (11) | | | (7) | | | (37) | | | 11 | | | (3) | | | (35) | |
| Regulatory assets and liabilities, net | |
| Changes in working capital and other assets and liabilities | Changes in working capital and other assets and liabilities | 2,089 | | | (84) | | | (96) | | | (56) | | | (88) | | | (45) | | | (13) | | | (34) | |
| (Decrease) increase in cash flows from operating activities | $ | — | | | $ | (343) | | | $ | 19 | | | $ | 108 | | | $ | 239 | | | $ | 61 | | | $ | 96 | | | $ | 109 | |
| Increase (decrease) in cash flows from operating activities | |
Changes in the Registrants' cash flows from operations were generally consistent with changes in each Registrant’s respective results of operations, as adjusted by changes in working capital in the normal course of business, except as discussed below. See above for additional information related to cash flows from Generation. Significant operating cash flow impacts for the Registrants and Generation for the ninethree months ended September 30, 2022March 31, 2024 and 20212023 were as follows:
•See Note 1614 — Supplemental Financial Information of the Combined Notes to Consolidated Financial Statements and the Registrants’ Consolidated Statements of Cash Flows for additional information on non-cash operating activities.
•Changes in collateral depended upon whether Generationthe Registrant was in a net mark-to-market liability or asset position, and collateral may have been required to be posted with or collected from its counterparties. In addition, the collateral posting and collection requirements differed depending on whether the transactions were on an exchange or in the over-the-counter markets. Changes in collateral for the Registrants are dependent upon the credit exposure of procurement contracts that may require suppliers to post collateral. The amount of cash collateralchange in Collateral received from external counterparties increased(paid), net, when comparing the three month ended March 31, 2024 to the three month ended March 31, 2023, is due to risingstable energy prices.prices for the current year. See Note 10 –8 — Derivative Financial Instruments for additional information.
•See Note 86 — Income Taxes of the Combined Notes to Consolidated Financial Statements and the Registrants' Consolidated Statements of Cash Flows for additional information on income taxes.
•Changes in Pension and non-pension postretirement benefit contributions relates to Exelon's increased contributions to the Qualified Plans during the three months ended March 31, 2024. See Note 314 — Retirement Benefits of the 2023 Form 10-K for additional information.
•Changes in regulatory assets and liabilities, net, are due to the timing of cash payments for costs recoverable, or cash receipts for costs recovered, under our regulatory mechanisms differs from the recovery period of those costs. Included within the changes is energy efficiency spend for ComEd of $80 million and $72 million for the three months ended March 31, 2024 and 2023, respectively. Also included within the changes is energy efficiency and demand response programs spend for BGE, Pepco, DPL and ACE of $28 million, $10 million, $4 million, and $8 million for the three months ended March 31, 2024 and $33 million, $14 million, $5 million, and $4 million for the three months ended March 31, 2023, respectively. PECO had no energy efficiency and demand response programs spend recorded to the regulatory asset for the three months ended March 31,
2024 and 2023. See Note 2 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on regulatory assets and liabilities.information.
•Changes in working capital and other assets and liabilities for the Utility Registrants and Exelon Corporate total $(316)totaled $(276) million and for Generation total $2,405 million.$(338) million, respectively. The change in working capital and other noncurrent assets and liabilities for Generation primarily relates toExelon Corporate and the revolving accounts receivable financing arrangement. See Note 6 — Accounts ReceivableUtility Registrants is dependent upon the normal course of operations for all Registrants. For ComEd, it is also dependent upon whether the participating nuclear-powered generating facilities are owed money from ComEd as a result of the 2021 Form 10-Kestablished pricing for CMCs. For the three months ended March 31, 2024, the established pricing resulted in ComEd owing payments to nuclear-powered generating facilities, which is reported within the cash flows from operations as a change in accounts payable and the Collection of DPP discussion below for additional information.accrued expense.
Cash Flows from Investing Activities
The following table provides a summary of the change in cash flows from investing activities for the ninethree months ended September 30, 2022March 31, 2024 and 20212023 by Registrant:
| | Increase (decrease) in cash flows from investing activities | Increase (decrease) in cash flows from investing activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE | Increase (decrease) in cash flows from investing activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Capital expenditures | Capital expenditures | $ | 791 | | | $ | (78) | | | $ | (113) | | | $ | (11) | | | $ | 125 | | | $ | 46 | | | $ | 26 | | | $ | 52 | |
| | Investment in NDT fund sales, net | 106 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Collection of DPP | (2,883) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Proceeds from sales of assets and businesses | |
| | Proceeds from sales of assets and businesses | |
| | Proceeds from sales of assets and businesses | Proceeds from sales of assets and businesses | (785) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Changes in intercompany money pool | Changes in intercompany money pool | — | | | — | | | — | | | — | | | — | | | — | | | (25) | | | — | |
| | Other investing activities | Other investing activities | (4) | | | 1 | | | 3 | | | (6) | | | 6 | | | 4 | | | 1 | | | — | |
| (Decrease) increase in cash flows from investing activities | $ | (2,775) | | | $ | (77) | | | $ | (110) | | | $ | (17) | | | $ | 131 | | | $ | 50 | | | $ | 2 | | | $ | 52 | |
| Other investing activities | |
| Other investing activities | |
| Increase (decrease) in cash flows from investing activities | |
Significant investing cash flow impacts for the Registrants for ninethree months ended September 30, 2022March 31, 2024 and 20212023 were as follows:
•VariancesChanges in capital expenditures are primarily due to the timing of cash expenditures for capital projects. See the "Credit Matters and Cash Requirements" section below for additional information on projected capital expenditure spending.spending for the Utility Registrants. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for capital expenditures related to Generation prior to the separation.
•Collection of DPP relates to the revolving accounts receivable financing agreement which Generation entered into in April of 2020. See Note 6 — Accounts Receivable of the 2021 Form 10-K for additional information on the transaction and the DPP, including the $400 million of additional funding received in February and March of 2021.
•Proceeds from sales of assets and businesses decreased primarily due to the sale of a significant portion of Generation's solar business and a biomass facility in 2021. See Note 2 — Mergers, Acquisitions, and Dispositions of the 2021 Form 10-K for additional information.
•Changes in intercompany money pool are driven by short-term borrowing needs. Refer below forto more information regarding the intercompany money pool.pool below.
Cash Flows from Financing Activities
The following table provides a summary of the change in cash flows from financing activities for the ninethree months ended September 30, 2022March 31, 2024 and 20212023 by Registrant:
| | (Decrease) increase in cash flows from financing activities | (Decrease) increase in cash flows from financing activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE | (Decrease) increase in cash flows from financing activities | Exelon | | ComEd | | PECO | | BGE | | PHI | | Pepco | | DPL | | ACE |
| Changes in short-term borrowings, net | Changes in short-term borrowings, net | $ | (746) | | | $ | 556 | | | $ | — | | | $ | 26 | | | $ | (387) | | | $ | (180) | | | $ | (25) | | | $ | (182) | |
| Long-term debt, net | Long-term debt, net | 1,946 | | | (50) | | | (25) | | | (50) | | | 120 | | | 41 | | | — | | | 79 | |
| Changes in intercompany money pool | Changes in intercompany money pool | — | | | — | | | 40 | | | — | | | 41 | | | 25 | | | — | | | — | |
| Issuance of common stock | 563 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Dividends paid on common stock | Dividends paid on common stock | 122 | | | (54) | | | (45) | | | (6) | | | — | | | (179) | | | 11 | | | 152 | |
| Acquisition of noncontrolling interest | 885 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Dividends paid on common stock | |
| Dividends paid on common stock | |
| | Distributions to member | |
| Distributions to member | |
| Distributions to member | Distributions to member | — | | | — | | | — | | | — | | | (20) | | | — | | | — | | | — | |
| Contributions from parent/member | Contributions from parent/member | — | | | (90) | | | (140) | | | (71) | | | 120 | | | 221 | | | 27 | | | (128) | |
| Transfer of cash, restricted cash, and cash equivalents to Constellation | (2,594) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Other financing activities | Other financing activities | (65) | | | 6 | | | (6) | | | (2) | | | (6) | | | (4) | | | — | | | 1 | |
| Increase (decrease) in cash flows from financing activities | $ | 111 | | | $ | 368 | | | $ | (176) | | | $ | (103) | | | $ | (132) | | | $ | (76) | | | $ | 13 | | | $ | (78) | |
| Other financing activities | |
| Other financing activities | |
| (Decrease) increase in cash flows from financing activities | |
Significant financing cash flow impacts for the Registrants for the ninethree months ended September 30, 2022March 31, 2024 and 20212023 were as follows:
•Changes in short-term borrowings, net, is driven by repayments on and issuances of notes due in less than 365 days. See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on short-term borrowings for the Registrants. These changes also included repayments of $552 million in commercial paper and term loans by Generation prior to the separation.
•Long-term debt, net, varies due to debt issuances and redemptions each year. See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on debt issuances. Refer to the debt redemptions table below for additional information.
•Changes in intercompany money pool are driven by short-term borrowing needs. Refer below for more information regarding the intercompany money pool.
•Issuance of common stock relates to the August 2022 underwritten public offering of Exelon common stock. See Note 14 — Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.
•Exelon’s ability to pay dividends on its common stock depends on the receipt of dividends paid by its operating subsidiaries. The payments of dividends to Exelon by its subsidiaries in turn depend on their results of operations and cash flows and other items affecting retained earnings. See Note 1718 — Commitments and Contingencies of the 2021 Recast2023 Form 10-K for additional information on dividend restrictions. See below for quarterly dividends declared.
•Acquisition of noncontrolling interest relates to Generation's acquisition of CENG noncontrolling interest in 2021. See Note 2 — Mergers, Acquisitions, and Dispositions of the 2021 Form 10-K for additional information.
•Refer to Note 2 - Discontinued Operations for the transfer of cash, restricted cash, and cash equivalents to Constellation related to the separation.
•For the nine months ended September 30, 2022, other financing activities primarily consists of debt issuance costs. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information of the Registrants’ debt issuances.
Debt
See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ debt issuances.
During the ninethree months ended September 30, 2022,March 31, 2024, the following long-term debt was retired and/or redeemed:
| | Company | |
| Company | |
| Company | Company | | Type | | Interest Rate | | | Maturity | | Amount | | Type | | Interest Rate | | | Maturity | | Amount |
| Exelon | Exelon | | Junior Subordinated Notes | | 3.50 | % | | | May 2, 2022 | | $ | 1,150 | |
| Exelon | Exelon | | Long-Term Software License Agreement | | 3.96 | % | | | May 1, 2024 | | 2 | |
| PECO | | First Mortgage Bonds | | 2.375 | % | | | September 15, 2022 | | 350 | |
| BGE | | Notes | | 2.80 | % | | | August 15, 2022 | | 250 | |
| Pepco | | First Mortgage Bonds | | 3.05 | % | | | April 1, 2022 | | 200 | |
| Pepco | Pepco | | Tax-Exempt Bonds | | 1.70 | % | | | September 1, 2022 | | 110 | |
|
Dividends
Quarterly dividends declared by the Exelon Board of Directors during the ninethree months ended September 30, 2022March 31, 2024 and for the fourthsecond quarter of 20222024 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period | | Declaration Date | | Shareholder of Record Date | | Dividend Payable Date | | Cash per Share(a) |
First Quarter 20222024 | | February 8, 202221, 2024 | | February 25, 2022 | | March 10, 20224, 2024 | | March 15, 2024 | | $ | 0.33750.3800 | |
Second Quarter 20222024 | | April 26, 202230, 2024 | | May 13, 20222024 | | June 10, 202214, 2024 | | $ | 0.33750.3800 | |
| Third Quarter 2022 | | July 26, 2022 | | August 15, 2022 | | September 9, 2022 | | $0.3375 | |
| Fourth Quarter 2022 | | October 28, 2022 | | November 15, 2022 | | December 9, 2022 | | $0.3375 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
__________
(a)Exelon's Board of Directors approved an updated dividend policy for 2022.2024. The 20222024 quarterly dividend will be $0.3375$0.38 per share.
Credit Matters and Cash Requirements
The Registrants fund liquidity needs for capital investment, working capital, energy hedging, and other financial commitments through cash flows from continuing operations, public debt offerings, commercial paper markets, and large, diversified credit facilities. The credit facilities include $4.0 billion in aggregate total commitments of which $3.4$2.7 billion was available to support additional commercial paper as of September 30, 2022,March 31, 2024, and of which no financial institution has more than 6% of the aggregate commitments for the Registrants. The Registrants had access to the commercial paper markets and had availability under their revolving credit facilities during the ninethree months ended September 30, 2022March 31, 2024 to fund their short-term liquidity needs, when necessary. On February 1, 2022, Exelon Corporate and the Utility Registrants each entered intohave a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. The Registrants routinely review the sufficiency of their liquidity position, including appropriate sizing of credit facility commitments, by performing various stress test scenarios, such as commodity price movements, increases in margin-related transactions, changes in hedging levels, and the impacts of hypothetical credit downgrades. The Registrants have continued to closely monitor events in the financial markets and the financial institutions associated with the credit facilities, including monitoring credit ratings and outlooks, credit default swap levels, capital raising, and merger activity. See PART I. ITEM 1A. RISK FACTORS of the 20212023 Form 10-K for additional information regarding the effects of uncertainty in the capital and credit markets.
The Registrants believe their cash flows from operating activities, access to credit markets, and their credit facilities provide sufficient liquidity to support the estimated future cash requirements.
On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value. The net proceeds were $563 million before expenses paid. Exelon used the proceeds, together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See Note 14 — Shareholders' Equity and
Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.
On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”) with certain sales agents and forward sellers and certain forward purchasers establishing an ATM equity distribution program under which it may offer and sell shares of its common stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of common stock under the Equity Distribution Agreement and may at any time suspend or terminate offers and sales under the Equity Distribution Agreement. As of September 30, 2022,December 31, 2023, $858 million of Common stock remained available for sale pursuant to the ATM program. For the period ended March 31, 2024, Exelon hasdid not issuedissue any shares of common stock under the ATM program and hasdid not enteredenter into any forward sale agreements.
Pursuant to the Separation Agreement between Exelon and Constellation, Exelon made a cash payment of $1.75 billion to Generation on January 31, 2022. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information on the separation.
The following table presents the incremental collateral that each Utility Registrant would have been required to provide in the event each Utility Registrant lost its investment grade credit rating at September 30, 2022March 31, 2024 and available credit facility capacity prior to any incremental collateral at September 30, 2022:March 31, 2024:
| | PJM Credit Policy Collateral | | Other Incremental Collateral Required(a) | | Available Credit Facility Capacity Prior to Any Incremental Collateral |
| PJM Credit Policy Collateral | | | PJM Credit Policy Collateral | | Other Incremental Collateral Required(a) | | Available Credit Facility Capacity Prior to Any Incremental Collateral |
| ComEd | ComEd | $ | 34 | | | $ | — | | | $ | 762 | |
| PECO | PECO | 2 | | | 43 | | | 600 | |
| BGE | BGE | 3 | | | 79 | | | 444 | |
| | Pepco | Pepco | 3 | | | — | | | 300 | |
| Pepco | |
| Pepco | |
| DPL | DPL | 3 | | | 16 | | | 300 | |
| ACE | ACE | 1 | | | — | | | 300 | |
__________
(a)Represents incremental collateral related to natural gas procurement contracts.
Capital Expenditure Spending
As of September 30, 2022,March 31, 2024, the most recent estimates of capital expenditures for plant additions and improvements for 20222024 are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | Transmission | | Distribution | | Gas | | Total |
| Exelon | N/A | | N/A | | N/A | | $ | 6,950 | |
| ComEd | 425 | | | 2,075 | | | N/A | | 2,500 | |
| PECO | 200 | | | 850 | | | 325 | | | 1,375 | |
| BGE | 250 | | | 525 | | | 475 | | | 1,250 | |
| PHI | 600 | | | 1,150 | | | 75 | | | 1,825 | |
| Pepco | 275 | | | 625 | | | N/A | | 900 | |
| DPL | 150 | | | 225 | | | 75 | | | 450 | |
| ACE | 175 | | | 300 | | | N/A | | 475 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | Transmission | | Distribution | | Gas | | Total(a) |
| Exelon | N/A | | N/A | | N/A | | $ | 7,425 | |
| ComEd | 475 | | | 1,675 | | | N/A | | 2,150 | |
| PECO | 75 | | | 1,225 | | | 400 | | | 1,700 | |
| BGE | 475 | | | 625 | | | 500 | | | 1,600 | |
| PHI | 575 | | | 1,325 | | | 100 | | | 1,975 | |
| Pepco | 225 | | | 750 | | | N/A | | 975 | |
| DPL | 200 | | | 300 | | | 100 | | | 625 | |
| ACE | 125 | | | 275 | | | N/A | | 400 | |
__________
(a)Numbers rounded to the nearest $25M and may not sum due to rounding.
Projected capital expenditures and other investments are subject to periodic review and revision to reflect changes in economic conditions and other factors.
Pension and Other PostretirementRetirement Benefits
Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act of 2006 (the Act), management of the pension obligation, and regulatory implications. The Act requires the attainment of certain funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and participant notification). The projected contributions reflect a
funding strategy to make levelized annual contributions with the objective of achieving 100% funded status on an ABO basis over time. This level funding strategy helps minimize volatility of future period required pension contributions. Post-separation, Exelon'sExelon’s estimated annual qualified pension contributions will be approximately $313$93 million in 2022. In connection with the separation, additional qualified pension contributions of $207 million and $33 million were completed on February 1, 2022 and March 2, 2022, respectively.2024. Unlike the qualified pension plans, Exelon’s non-qualified pension plans are not funded, given that they are not subject to statutory minimum contribution requirements.
While OPEB plans are also not subject to statutory minimum contribution requirements, Exelon does fund certain of its plans. For Exelon's funded OPEB plans, contributions generally equal accounting costs, however, Exelon’s management has historically considered several factors in determining the level of contributions to its OPEB plans, including liabilities management, levels of benefit claims paid, and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery).
To the extent interest rates decline significantly or the pension and OPEB plans earn less than the expected asset returns, annual pension contribution requirements in future years could increase. Conversely, to the extent interest rates increase significantly or the pension and OPEB plans earn greater than the expected asset returns, annual pension and OPEB contribution requirements in future years could decrease. Additionally, expected contributions could change if Exelon changes its pension or OPEB funding strategy.
See Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements of the 2023 Form 10-K for additional information on pension and OPEB contributions.
Credit Facilities
Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and the Exelon intercompany money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.
See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ credit facilities and short term borrowing activity.
Security Ratings
The Registrants’ access to the capital markets, including the commercial paper market, and their respective financing costs in those markets, may depend on the securities ratings of the entity that is accessing the capital markets.
The Registrants’ borrowings are not subject to default or prepayment as a result of a downgrading of securities, although such a downgrading of a Registrant’s securities could increase fees and interest charges under that Registrant’s credit agreements.
As part of the normal course of business, the Registrants enter into contracts that contain express provisions or otherwise permit the Registrants and their counterparties to demand adequate assurance of future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contracts law, if the Registrants are downgraded by a credit rating agency, it is possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance, which could include the posting of collateral. See Note 108 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on collateral provisions.
The credit ratings for ComEd, PECO, BGE, and DPLthe Registrants did not change for the ninethree months ended September 30, 2022. On January 14, 2022, Fitch lowered Exelon Corporate's long-term and senior unsecured ratings from BBB+ to BBB and affirmed the short-term rating of F2. In addition, Fitch upgraded Pepco, ACE, and PHI's long-term rating from BBB to BBB+ and upgraded Pepco and ACE's senior secured rating from A- to A.March 31, 2024.
Intercompany Money Pool
To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing, both Exelon and PHI operate an intercompany money pool. Maximum amounts contributed to and borrowed from the money pool by participant and the net contribution or borrowing as of September 30, 2022,March 31, 2024, are presented in the following table.table:
| | | | | | | | | | | | | | | | | | | | |
| | During the Three Months Ended March 31, 2024 | | At March 31, 2024 |
| Exelon Intercompany Money Pool | | Maximum
Contributed | | Maximum
Borrowed | | Contributed
(Borrowed) |
| Exelon Corporate | | $ | 626 | | | $ | — | | | $ | 330 | |
| PECO | | 55 | | | (255) | | | — | |
| BSC | | — | | | (420) | | | (302) | |
| PHI Corporate | | — | | | (86) | | | (73) | |
| PCI | | 45 | | | — | | | 45 | |
| | | | | | | | | | | | | | | | | | | | |
| | During the Three Months Ended March 31, 2024 | | At March 31, 2024 |
| PHI Intercompany Money Pool | | Maximum
Contributed | | Maximum
Borrowed | |
(Borrowed)
Contributed |
| Pepco | | $ | 171 | | | $ | — | | | $ | 134 | |
| DPL | | — | | | (33) | | | — | |
| ACE | | — | | | (171) | | | (134) | |
Shelf Registration Statements
As of January 1st, 2024 Exelon and the Utility Registrants had an effective combined shelf registration statement, unlimited in amount (“Legacy Registration Statement”). On February 20, 2024, Exelon Corporation filed with the SEC Post-Effective Amendment 1 to its Legacy Registration Statement to remove and withdraw registration of all registered securities of ACE, had no activity withinDPL, PECO and BGE.
On February 21, 2024, Exelon Corporation, together with Pepco and ComEd as co-registrants, filed with the PHI intercompany money pool duringSEC Post-Effective Amendment 2 to its Legacy Registration Statement. Post-Effective Amendment 2 amends the nine months ended September 30, 2022.Legacy Registration Statement to include an authorized limit of $7,200 million, which can be used to issue Exelon Corporation debt securities and equity securities, as well as Pepco and ComEd debt securities, through the expiration date of August 3, 2025. On February 21, 2024, PECO and BGE filed with the SEC a standalone effective shelf registration statement, unlimited in amount, which can be used to issue PECO and BGE debt securities through the expiration date of February 20, 2027. The ability of Exelon Corporation, ComEd, Pepco,
| | | | | | | | | | | | | | | | | | | | |
| | During the Nine Months Ended September 30, 2022 | | As of September 30, 2022 |
| Exelon Intercompany Money Pool | | Maximum
Contributed | | Maximum
Borrowed | | Contributed
(Borrowed) |
| Exelon Corporate | | $ | 396 | | | $ | — | | | $ | 299 | |
| PECO | | 138 | | | (105) | | | — | |
| BSC | | — | | | (377) | | | (301) | |
| PHI Corporate | | — | | | (54) | | | (43) | |
| PCI | | 50 | | | — | | | 45 | |
| | | | | | | | | | | | | | | | | | | | |
| | During the Nine Months Ended September 30, 2022 | | As of September 30, 2022 |
| PHI Intercompany Money Pool | | Maximum
Contributed | | Maximum
Borrowed | | Contributed
(Borrowed) |
| Pepco | | $ | — | | | $ | (108) | | | $ | (25) | |
| DPL | | 108 | | | — | | | 25 | |
Shelf Registration Statements
ExelonPECO and the Utility Registrants have a currently effective combined shelf registration statement unlimited in amount, filed with the SEC on August 3, 2022, that will expire in August 2025. The ability of each RegistrantBGE to sell securities off the shelftheir corresponding registration statementStatements, or to access the private placement markets, will depend on a number of factors at the time of the proposed sale, including other required regulatory approvals, as applicable, the current financial condition of the Registrant, its securities ratings and market conditions.
As a result of Post-Effect Amendment 1, DPL and ACE filed to deregister all securities that remain unsold. DPL and ACE periodically issue securities through the private placement markets. DPL and ACE's ability to access the private placement markets will depend on a number of factors at the time of the proposed sale, including other required regulatory approvals, as applicable, current financial condition, securities ratings and market conditions.
Regulatory Authorizations
The Utility Registrants are required to obtain short-term and long-term financing authority from Federal and State Commissions as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of September 30, 2022 |
| | Short-term Financing Authority | | Remaining Long-term Financing Authority |
| Commission | | Expiration Date | | Amount | Commission | | Expiration Date | | Amount |
ComEd(a) | | FERC | | December 31, 2023 | | $ | 2,500 | | | ICC | | January 1, 2025 | | $ | 1,343 | |
PECO(b) | | FERC | | December 31, 2023 | | 1,500 | | | PAPUC | | December 31, 2024 | | 1,125 | |
BGE(c) | | FERC | | December 31, 2023 | | 700 | | | MDPSC | | N/A | | — | |
Pepco(d) | | FERC | | December 31, 2023 | | 500 | | | MDPSC / DCPSC | | 2022 & 2025 | | 1,400 | |
DPL(e) | | FERC | | December 31, 2023 | | 500 | | | MDPSC / DEPSC | | December 31, 2022 | | 47 | |
ACE(f) | | NJBPU | | December 31, 2023 | | 350 | | | NJBPU | | December 31, 2022 | | 700 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | At March 31, 2024 |
| | Short-term Financing Authority (e) | | Remaining Long-term Financing Authority |
| Commission | | Expiration Date | | Amount | Commission | | Expiration Date | | Amount |
ComEd(a) (b) | | FERC | | December 31, 2025 | | $ | 2,500 | | | ICC | | January 1, 2027 | | $ | 2,368 | |
| PECO | | FERC | | December 31, 2025 | | 1,500 | | | PAPUC | | December 31, 2024 | | 550 | |
BGE(c) | | FERC | | December 31, 2025 | | 700 | | | MDPSC | | N/A | | 1,100 | |
| Pepco | | FERC | | December 31, 2025 | | 500 | | | MDPSC / DCPSC | | December 31, 2025 | | 375 | |
| DPL | | FERC | | December 31, 2025 | | 500 | | | MDPSC / DEPSC | | December 31, 2025 | | 375 | |
| ACE | | NJBPU | | December 31, 2025 | | 350 | | | NJBPU | | December 31, 2024 | | 550 | |
__________
(a)On November 18, 2021,June 29, 2023, ComEd received approval from the ICCfiled an application for $2 billion in new money long-term debt financing authority withfrom the ICC and received approval on January 1, 2024.
(b)On February 20, 2024, ComEd filed an application for $750 million in refinancing authority from the ICC, which was approved on April 18, 2024. The refinancing authority under the approved application has an effective date of JanuaryMay 1, 2022.
(b)On December 2, 2021, PECO received approval from2024, and extends the PAPUC for $2.5 billion in new long-term debt financing authority with an effectiveexpiration date of Januaryto May 1, 2022.2027.
(c)On October 28, 2022, BGE filed with the MDPSC for approval of $1.8 billion in new long-term financing authority. The long-term financing authority will become effective on the date of approval. This financing authority does not have an expiration date.
(d)On June 9, 2022 and June 30, 2022, Pepco received approval from the MDPSC and DCPSC, respectively, for $1.4 billion in new long-term financing authority. The long-term financing authority became effective on the date of respective approvals and has an expiration date of December 31, 2025.
(e)On November 2, 2022, DPL filed with the MDPSC and DEPSC for approval of $1.2 billion in new long-term financing authority. The long-term financing authority will become effective on the date of respective approvals. The financing authority filed with MDPSC does not have an expiration date, while the financing authority filed with DCPSC and DEPSC hashave an expiration date of December 31, 2025.
(f)On July 13, 2022, ACE received approval from the NJBPU for $700 million in new long-term debt financing authority with an effective date of July 20, 2022.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Registrants hold commodity and financial instruments that are exposed to the following market risks:
•Commodity price risk, which is discussed further below.
•Counterparty credit risk associated with non-performance by counterparties on executed derivative instruments and participation in all, or some of the established, wholesale spot energy markets that are administered by PJM. The credit policies of PJM may, under certain circumstances, require that losses arising from the default of one member on spot energy market transactions be shared by the remaining participants. See Note 108 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of counterparty credit risk related to derivative instruments.
•Equity price and interest rate risk associated with Exelon’s pension and OPEB plan trusts. See Note 137 — Retirement Benefits of the 2021 Recast2023 Form 10-K for additional information.
•Interest rate risk associated with changes in interest rates for the Registrants’ outstanding long-term debt. This risk is significantly reduced as substantially all of the Registrants’ outstanding debt has fixed interest rates. There is inherent interest rate risk related to refinancing maturing debt by issuing new long-term debt. The Registrants use a combination of fixed-rate and variable-rate debt to manage interest rate exposure. See Note 119 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. In addition, Exelon may utilize interest rate derivatives to lock in rate levels in anticipation of future financings, which are typically designated as cash flow hedges, or to lock in rate levels on borrowings, which are typically designated as economic hedges. See Note 108 – Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
The Registrants operate primarily under cost-based rate regulation limiting exposure to the effects of market risk. Hedging programs are utilized to reduce exposure to energy and natural gas price volatility and have no direct earnings impacts as the costs are fully recovered through regulatory-approved recovery mechanisms.
Exelon manages these risks through risk management policies and objectives for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of risk exposures. Risk management issues are reported to Exelon’s Executive Committee, the Risk Management Committees of each Utility Registrant, and the Audit and Risk Committee of Exelon’s Board of Directors.
Commodity Price Risk
Commodity price risk is associated with price movements resulting from changes in supply and demand, fuel costs, market liquidity, weather conditions, governmental regulatory and environmental policies, and other factors. To the extent the total amount of energy Exelon purchases differs from the amount of energy it has contracted to sell, Exelon is exposed to market fluctuations in commodity prices. Exelon seeks to mitigate its commodity price risk through the sale and purchase of electricity and natural gas.
ComEd entered into 20-year floating-to-fixed renewable energy swap contracts beginning in June 2012, which are considered an economic hedge and have changes in fair value recorded to an offsetting regulatory asset or liability. ComEd has block energy contracts to procure electric supply that are executed through a competitive procurement process, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of accounting. PECO, BGE, Pepco, DPL, and ACE have contracts to procure electric supply that are executed through a competitive procurement process. PECO, BGE, Pepco, DPL, and ACE have certain full requirements contracts, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of accounting. Other full requirements contracts are not derivatives.
PECO, BGE, and DPL also have executed derivative natural gas contracts, which either qualify for NPNS, or have no mark-to-market balances because the derivatives are index priced, to hedge their long-term price risk in the natural gas market. The hedging programs for natural gas procurement have no direct impact on their financial statements.
For additional information on these contracts, see Note 108 — Derivative Financial Instruments and Note 1210 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements.
The following table presents the maturity and source of fair value for Exelon’s and ComEd’s mark-to-market commodity contract net liabilities. These net liabilities are associated with ComEd’s floating-to-fixed energy swap contracts with unaffiliated suppliers. The table provides two fundamental pieces of information. First, the table provides the source of fair value used in determining the carrying amount of Exelon's and ComEd's total mark-to-market net liabilities. Second, the table shows the maturity, by year, of Exelon's and ComEd's commodity contract net liabilities giving an indication of when these mark-to-market amounts will settle and either generate or require cash. See Note 1210 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maturities Within | | Total Fair
Value |
| 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 and Beyond | |
| Prices based on model or other valuation methods (Level 3) | $ | 7 | | | $ | 16 | | | $ | (5) | | | $ | (10) | | | $ | (11) | | | $ | (40) | | | $ | (43) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maturities Within | | Total Fair
Value |
Commodity derivative contracts(a): | 2024 | | 2025 | | 2026 | | 2027 | | 2028 | | 2029 and Beyond | |
| Prices based on model or other valuation methods (Level 3) | $ | (24) | | | $ | (17) | | | $ | (14) | | | $ | (14) | | | $ | (14) | | | $ | (25) | | | $ | (108) | |
_________
(a)Represents ComEd's net liabilities associated with the floating-to-fixed energy swap contracts with unaffiliated suppliers.
ITEM 4. CONTROLS AND PROCEDURES
During the thirdfirst quarter of 2022,2024, each of the Registrants' management, including its principal executive officer and principal financial officer, evaluated its disclosure controls and procedures related to the recording, processing, summarizing, and reporting of information in its periodic reports that it files with the SEC. These disclosure controls and procedures have been designed by the Registrants to ensure that (a) material information relating to that Registrant, including its consolidated subsidiaries, is accumulated and made known to that Registrant's management, including its principal executive officer and principal financial officer, by other employees of that Registrant and its subsidiaries as appropriate to allow timely decisions regarding required disclosure, and (b) this information is recorded, processed, summarized, evaluated, and reported, as applicable, within the time periods specified in the SEC’s rules and forms. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people.
Accordingly, as of September 30, 2022,March 31, 2024, the principal executive officer and principal financial officer of each of the Registrants concluded that such Registrant’s disclosure controls and procedures were effective to accomplish its objectives. The Registrants continually strive to improve their disclosure controls and procedures to enhance the quality of its financial reporting and to maintain dynamic systems that change as conditions warrant. In the first quarter of 2024, ComEd and PECO implemented a new customer care and billing information system replacing the existing system. ComEd and PECO expect the new system to further automate, enhance and standardize the processes by which they engage with their customers. As part of this system implementation, ComEd and PECO appropriately considered the impacts to internal controls over financial reporting. There were no other changes in internal control over financial reporting that occurred during the third quarter of 2022three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, any of the Registrants' internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrants are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses. For information regarding material lawsuits and proceedings, see (a) ITEM 3. LEGAL PROCEEDINGS of the 20212023 Form 10-K, (b) Notes 3 — Regulatory Matters and 1718 — Commitments and Contingencies of the 2021 Recast2023 Form 10-K, and (c) Notes 32 — Regulatory Matters and 1311 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements in PART I, ITEM 1. FINANCIAL STATEMENTS of this Report. Such descriptions are incorporated herein by these references.
ITEM 1A. RISK FACTORS
Risks Related to All Registrants
At September 30, 2022, the Registrants' risk factors were consistent with the risk factors described in the 2021 Form 10-K in ITEM 1A. RISK FACTORS, except for the updates below.
The Registrants are subject to physical security and cybersecurity risks (All Registrants).
The Registrants face physical security and cybersecurity risks. Threat sources, including sophisticated nation-state actors, continue to seek to exploit potential vulnerabilitiesAt March 31, 2024, the Registrants' risk factors were consistent with the risk factors described in the electric and natural gas utility industry, grid infrastructure, and other energy infrastructures, and these attacks and disruptions, both physical and cyber, are becoming increasingly sophisticated and dynamic. Continued implementation of advanced digital technologies increases the potentially unfavorable impacts of such attacks. Additionally, the U.S. government has warned that the Ukraine conflict may increase the risks of attacks targeting critical infrastructureRegistrants' combined 2023 Form 10-K in the United States.ITEM 1A. RISK FACTORS.
A security breach of the Registrants' physical assets or information systems or those of the Registrants competitors, vendors, business partners and interconnected entities in RTOs and ISOs, or regulators could materially impact Registrants by, among other things, impairing the availability of electricity and gas distributed by Registrants and/or the reliability of transmission and distribution systems, or by leading to the theft or inappropriate release of certain types of information, including critical infrastructure information, sensitive customer, vendor, or employee data, or other confidential data. The risk of these system-related events and security breaches occurring continues to intensify, and while the Registrants have been, and will likely continue to be, subjected to physical and cyber-attacks, to date none have directly experienced a material breach or material disruption to its network or information systems or our operations. However, as such attacks continue to increase in sophistication and frequency, the Registrants may be unable to prevent all such attacks in the future.
If a significant breach were to occur, the Registrants' reputation could be negatively affected, customer confidence in the Registrants or others in the industry could be diminished, or the Registrants could be subject to legal claims, loss of revenues, increased costs, or operations shutdown. Moreover, the amount and scope of insurance maintained against losses resulting from any such events or security breaches may not be sufficient to cover losses or otherwise adequately compensate for any disruptions to business that could result.
The Utility Registrants' deployment of smart meters throughout their service territories could increase the risk of damage from an intentional disruption of the system by third parties.
In addition, new or updated security regulations or unforeseen threat sources could require changes in current measures taken by the Registrants or their business operations and could adversely affect their consolidated financial statements.
ITEM 5. OTHER INFORMATION
All Registrants
None.
ITEM 6. EXHIBITS
Certain of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities and Exchange Act of 1934, as amended. Certain other instruments which would otherwise be required to be listed below have not been so listed because such instruments do not authorize securities in an amount which exceeds 10% of the total assets of the applicable Registrant and its subsidiaries on a consolidated basis and the relevantrelevant. Registrant agrees to furnish a copy of any such instrument to the Commission upon request.
(4) Instruments Defining the Rights of Securities Holders, Including Indentures
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| Exelon Corporation |
| Exhibit No. | Description | Location |
| Seventh Supplemental Indenture, dated as of February 27, 2024, among Exelon Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee | |
| | |
| Potomac Electric Power Company |
| Exhibit No. | Description | Location |
| Pepco Supplemental Indenture to the Mortgage and Deed of Trust, dated as of February 15, 2024 | |
| | |
| Atlantic City Electric Company |
| Exhibit No. | Description | Location |
| ACE Supplemental Indenture to the Mortgage and Deed of Trust, dated as of March 1, 2024 | |
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| Delmarva Power & Light Company |
| DPL Supplemental Indenture to the Mortgage and Deed of Trust, dated as of March 1, 2024 | |
(10) Material Contracts
| | | | | | | | |
| Exelon Corporation |
| Exhibit No. | Description | Location |
| Exelon Corporation Senior Management Severance Plan, as amended and restated effective February 1, 2024. | |
| Exelon Corporation Long-Term Incentive Program, as amended and restated effective February 1, 2024. | |
Certifications Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 filed by the following officers for the following companies:
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| Exelon Corporation |
| Exhibit No. | Description |
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| Commonwealth Edison Company |
| Exhibit No. | Description |
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| PECO Energy Company |
| Exhibit No. | Description |
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| Baltimore Gas and Electric Company |
| Exhibit No. | Description |
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| Pepco Holdings LLC |
| Exhibit No. | Description |
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| Potomac Electric Power Company |
| Exhibit No. | Description |
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| Delmarva Power & Light Company |
| Exhibit No. | Description |
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| Atlantic City Electric Company |
| Exhibit No. | Description |
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Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code (Sarbanes-Oxley Act of 2002) as to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 filed by the following officers for the following companies:
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| Exelon Corporation |
| Exhibit No. | Description |
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| Commonwealth Edison Company |
| Exhibit No. | Description |
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| PECO Energy Company |
| Exhibit No. | Description |
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| Baltimore Gas and Electric Company |
| Exhibit No. | Description |
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| Pepco Holdings LLC |
| Exhibit No. | Description |
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| Potomac Electric Power Company |
| Exhibit No. | Description |
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| Delmarva Power & Light Company |
| Exhibit No. | Description |
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| Atlantic City Electric Company |
| Exhibit No. | Description |
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| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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| 101.SCH | Inline XBRL Taxonomy Extension Schema Document.Document |
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| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.Document |
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| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.Document |
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| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document.Document |
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| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.Document |
| |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Certifications Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed by the following officers for the following companies:
Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code (Sarbanes — Oxley Act of 2002) as to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed by the following officers for the following companies:
SIGNATURES
Pursuant to requirements 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.
EXELON CORPORATION
| | | | | | | | |
/s/ CHRISTOPHER M. CRANECALVIN G. BUTLER, JR. | | /s/ JEANNE M. JONES |
Christopher M. CraneCalvin G. Butler, Jr. | | Jeanne M. Jones |
President, Chief Executive Officer
(Principal Executive Officer) and Director | | Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
| | |
/s/ JOSEPH R. TRPIKROBERT A. KLECZYNSKI | | |
Joseph R. TrpikRobert A. Kleczynski | | |
Senior Vice President, and Corporate Controller and Tax
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
COMMONWEALTH EDISON COMPANY
| | | | | | | | |
| /s/ GIL C. QUINIONES | | /s/ ELISABETH J. GRAHAMJOSHUA S. LEVIN |
| Gil C. Quiniones | | Elisabeth J. GrahamJoshua S. Levin |
Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ STEVEN J. CICHOCKI | | |
| Steven J. Cichocki | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
PECO ENERGY COMPANY
| | | | | | | | |
| /s/ MICHAEL A. INNOCENZO | | /s/ ROBERT J. STEFANIMARISSA HUMPHREY |
| Michael A. Innocenzo | | Robert J. StefaniMarissa Humphrey |
President, and Chief Executive Officer
(Principal | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ CAROLINE FULGINITI | | |
| Caroline Fulginiti | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
BALTIMORE GAS AND ELECTRIC COMPANY
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| /s/ CARIM V. KHOUZAMI | | /s/ DAVID M. VAHOS |
| Carim V. Khouzami | | David M. Vahos |
President, Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ JASON T. JONES | | |
| Jason T. Jones | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
PEPCO HOLDINGS LLC
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| /s/ J. TYLER ANTHONY | | /s/ PHILLIP S. BARNETT |
| J. Tyler Anthony | | Phillip S. Barnett |
President, and Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ JULIE E. GIESE | | |
| Julie E. Giese | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
POTOMAC ELECTRIC POWER COMPANY
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| /s/ J. TYLER ANTHONY | | /s/ PHILLIP S. BARNETT |
| J. Tyler Anthony | | Phillip S. Barnett |
President, and Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer) and Director |
| | |
| /s/ JULIE E. GIESE | | |
| Julie E. Giese | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
DELMARVA POWER & LIGHT COMPANY
| | | | | | | | |
| /s/ J. TYLER ANTHONY | | /s/ PHILLIP S. BARNETT |
| J. Tyler Anthony | | Phillip S. Barnett |
President, and Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ JULIE E. GIESE | | |
| Julie E. Giese | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024
Pursuant to requirements 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.
ATLANTIC CITY ELECTRIC COMPANY
| | | | | | | | |
| /s/ J. TYLER ANTHONY | | /s/ PHILLIP S. BARNETT |
| J. Tyler Anthony | | Phillip S. Barnett |
President, and Chief Executive Officer
(Principal Executive Officer) and Director | | Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| /s/ JULIE E. GIESE | | |
| Julie E. Giese | | |
Director, Accounting
(Principal Accounting Officer) | | |
November 3, 2022May 2, 2024