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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 June 30, 2021
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 | ||||||||||||||
333-85496 | EXELON GENERATION COMPANY, LLC | 23-3064219 | ||||||||||||
(a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959 | ||||||||||||||
001-01839 | COMMONWEALTH EDISON COMPANY | 36-0938600 | ||||||||||||
(an Illinois corporation) 440 South LaSalle Street Chicago, Illinois 60605-1028 (312) 394-4321 | ||||||||||||||
000-16844 | PECO ENERGY COMPANY | 23-0970240 | ||||||||||||
(a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000 | ||||||||||||||
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 (202) 872-2000 | ||||||||||||||
001-01072 | POTOMAC ELECTRIC POWER COMPANY | 53-0127880 | ||||||||||||
(a District of Columbia and Virginia corporation) 701 Ninth Street, N.W. Washington, District of Columbia 20068 (202) 872-2000 | ||||||||||||||
001-01405 | DELMARVA POWER & LIGHT COMPANY | 51-0084283 | ||||||||||||
(a Delaware and Virginia corporation) 500 North Wakefield Drive Newark, Delaware 19702 (202) 872-2000 | ||||||||||||||
001-03559 | ATLANTIC CITY ELECTRIC COMPANY | 21-0398280 | ||||||||||||
(a New Jersey corporation) 500 North Wakefield Drive Newark, Delaware 19702 (202) 872-2000 |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | 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/28 | New York Stock Exchange |
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 | ☐ | ||||||||||||||||||||||
Exelon Generation Company, LLC | Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-accelerated Filer | x | 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 June 30, 2021 was:
Exelon Corporation Common Stock, without par value | 977,832,660 | ||||
Exelon Generation Company, LLC | not applicable | ||||
Commonwealth Edison Company Common Stock, $12.50 par value | 127,021,380 | ||||
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
Page No. | ||||||||
1
Page No. | ||||||||
2
Page No. | ||||||||
3
GLOSSARY OF TERMS AND ABBREVIATIONS | ||||||||
Exelon Corporation and Related Entities | ||||||||
Exelon | Exelon Corporation | |||||||
Generation | Exelon Generation Company, LLC | |||||||
ComEd | Commonwealth Edison Company | |||||||
PECO | PECO Energy Company | |||||||
BGE | Baltimore Gas and Electric Company | |||||||
Pepco Holdings or PHI | Pepco Holdings LLC | |||||||
Pepco | Potomac Electric Power Company | |||||||
DPL | Delmarva Power & Light Company | |||||||
ACE | Atlantic City Electric Company | |||||||
Registrants | Exelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, collectively | |||||||
Utility Registrants | ComEd, PECO, BGE, Pepco, DPL, and ACE, collectively | |||||||
ACE Funding or ATF | Atlantic City Electric Transition Funding LLC | |||||||
Antelope Valley | Antelope Valley Solar Ranch One | |||||||
BSC | Exelon Business Services Company, LLC | |||||||
CENG | Constellation Energy Nuclear Group, LLC | |||||||
Constellation | Constellation Energy Group, Inc. | |||||||
EGR IV | ExGen Renewables IV, LLC | |||||||
EGRP | ExGen Renewables Partners, LLC | |||||||
Exelon Corporate | Exelon in its corporate capacity as a holding company | |||||||
FitzPatrick | James A. FitzPatrick nuclear generating station | |||||||
NER | NewEnergy Receivables LLC | |||||||
PCI | Potomac Capital Investment Corporation and its subsidiaries | |||||||
PECO Trust III | PECO Energy Capital Trust III | |||||||
PECO Trust IV | PECO Energy Capital Trust IV | |||||||
Pepco Energy Services | Pepco Energy Services, Inc. and its subsidiaries | |||||||
PHI Corporate | PHI in its corporate capacity as a holding company | |||||||
PHISCO | PHI Service Company | |||||||
RPG | Renewable Power Generation | |||||||
SolGen | SolGen, LLC | |||||||
TMI | Three Mile Island nuclear facility | |||||||
4
GLOSSARY OF TERMS AND ABBREVIATIONS | ||||||||
Other Terms and Abbreviations | ||||||||
Note - of the 2020 Form 10-K | Reference to specific Combined Note to Consolidated Financial Statements within Exelon's 2020 Annual Report on Form 10-K | |||||||
AEC | Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source | |||||||
AESO | Alberta Electric Systems Operator | |||||||
AFUDC | Allowance for Funds Used During Construction | |||||||
AMI | Advanced Metering Infrastructure | |||||||
AOCI | Accumulated Other Comprehensive Income (Loss) | |||||||
ARC | Asset Retirement Cost | |||||||
ARO | Asset Retirement Obligation | |||||||
BGS | Basic Generation Service | |||||||
CBA | Collective Bargaining Agreement | |||||||
CERCLA | Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended | |||||||
CES | Clean Energy Standard | |||||||
Clean Water Act | Federal Water Pollution Control Amendments of 1972, as amended | |||||||
CODM | Chief operating decision maker(s) | |||||||
D.C. Circuit Court | United States Court of Appeals for the District of Columbia Circuit | |||||||
DC PLUG | District of Columbia Power Line Undergrounding Initiative | |||||||
DCPSC | Public Service Commission of the District of Columbia | |||||||
DOE | United States Department of Energy | |||||||
DOEE | District of Columbia Department of Energy & Environment | |||||||
DOJ | United States Department of Justice | |||||||
DPP | Deferred Purchase Price | |||||||
DPSC | Delaware Public Service Commission | |||||||
EDF | Electricite de France SA and its subsidiaries | |||||||
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 | |||||||
FEJA | Illinois Public Act 99-0906 or Future Energy Jobs Act | |||||||
FERC | Federal Energy Regulatory Commission | |||||||
FRCC | Florida Reliability Coordinating Council | |||||||
FRR | Fixed Resource Requirement | |||||||
GAAP | Generally Accepted Accounting Principles in the United States | |||||||
GCR | Gas Cost Rate | |||||||
GHG | Greenhouse Gas | |||||||
GSA | Generation Supply Adjustment | |||||||
IBEW | International Brotherhood of Electrical Workers | |||||||
ICC | Illinois Commerce Commission | |||||||
ICE | Intercontinental Exchange | |||||||
IPA | Illinois Power Agency | |||||||
IRC | Internal Revenue Code | |||||||
IRS | Internal Revenue Service | |||||||
ISO | Independent System Operator | |||||||
ISO-NE | Independent System Operator New England Inc. | |||||||
5
GLOSSARY OF TERMS AND ABBREVIATIONS | ||||||||
Other Terms and Abbreviations | ||||||||
LIBOR | London Interbank Offered Rate | |||||||
MDE | Maryland Department of the Environment | |||||||
MDPSC | Maryland Public Service Commission | |||||||
MGP | Manufactured Gas Plant | |||||||
MISO | Midcontinent Independent System Operator, Inc. | |||||||
mmcf | Million Cubic Feet | |||||||
MOPR | Minimum Offer Price Rule | |||||||
MPSC | Missouri Public Service Commission | |||||||
MW | Megawatt | |||||||
MWh | Megawatt hour | |||||||
NAV | Net Asset Value | |||||||
N/A | Not applicable | |||||||
NDT | Nuclear Decommissioning Trust | |||||||
NERC | North American Electric Reliability Corporation | |||||||
NGX | Natural Gas Exchange | |||||||
NJBPU | New Jersey Board of Public Utilities | |||||||
Non-Regulatory Agreement Units | Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting | |||||||
NOSA | Nuclear Operating Services Agreement | |||||||
NPNS | Normal Purchase Normal Sale scope exception | |||||||
NPS | National Park Service | |||||||
NRC | Nuclear Regulatory Commission | |||||||
NYISO | New York Independent System Operator Inc. | |||||||
NYMEX | New York Mercantile Exchange | |||||||
NYPSC | New York Public Service Commission | |||||||
OCI | Other Comprehensive Income | |||||||
OIESO | Ontario Independent Electricity System Operator | |||||||
OPEB | Other Postretirement Employee Benefits | |||||||
PAPUC | Pennsylvania Public Utility Commission | |||||||
PGC | Purchased Gas Cost Clause | |||||||
PG&E | Pacific Gas and Electric Company | |||||||
PJM | PJM Interconnection, LLC | |||||||
POLR | Provider of Last Resort | |||||||
PPA | Power Purchase Agreement | |||||||
Price-Anderson Act | Price-Anderson Nuclear Industries Indemnity Act of 1957 | |||||||
PRP | Potentially Responsible Parties | |||||||
PSDAR | Post-Shutdown Decommissioning Activities Report | |||||||
PSEG | Public Service Enterprise Group Incorporated | |||||||
PUCT | Public Utility Commission of Texas | |||||||
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 | |||||||
RMC | Risk Management Committee |
6
GLOSSARY OF TERMS AND ABBREVIATIONS | ||||||||
Other Terms and Abbreviations | ||||||||
RNF | Revenues Net of Purchased Power and Fuel Expense | |||||||
ROE | Return on equity | |||||||
ROU | Right-of-use | |||||||
RTO | Regional Transmission Organization | |||||||
S&P | Standard & Poor’s Ratings Services | |||||||
SEC | United States Securities and Exchange Commission | |||||||
SERC | SERC Reliability Corporation (formerly Southeast Electric Reliability Council) | |||||||
SNF | Spent Nuclear Fuel | |||||||
SOS | Standard Offer Service | |||||||
STRIDE | Maryland Strategic Infrastructure Development and Enhancement Program | |||||||
Transition Bonds | Transition Bonds issued by ACE Funding | |||||||
UGSOA | United Government Security Officers of America | |||||||
VIE | Variable Interest Entity | |||||||
WECC | Western Electric Coordinating Council | |||||||
ZEC | Zero Emission Credit, or Zero Emission Certificate | |||||||
ZES | Zero Emission Standard |
7
FILING FORMAT
This combined Form 10-Q is being filed separately by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties including, among others, those related to the timing, manner, tax-free nature, and expected benefits associated with the potential separation of Exelon’s competitive power generation and customer-facing energy business from its six regulated electric and gas utilities. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” 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 Registrants' combined 2020 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies; (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 15, Commitments and Contingencies; and (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 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.
8
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
9
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions, except per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Competitive businesses revenues | $ | 3,900 | $ | 3,612 | $ | 9,165 | $ | 8,016 | |||||||||||||||
Rate-regulated utility revenues | 3,968 | 3,832 | 8,464 | 8,108 | |||||||||||||||||||
Revenues from alternative revenue programs | 47 | (122) | 176 | (55) | |||||||||||||||||||
Total operating revenues | 7,915 | 7,322 | 17,805 | 16,069 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Competitive businesses purchased power and fuel | 1,952 | 1,945 | 6,562 | 4,655 | |||||||||||||||||||
Rate-regulated utility purchased power and fuel | 1,064 | 979 | 2,422 | 2,136 | |||||||||||||||||||
Operating and maintenance | 2,447 | 2,433 | 4,426 | 4,637 | |||||||||||||||||||
Depreciation and amortization | 1,666 | 1,001 | 3,363 | 2,023 | |||||||||||||||||||
Taxes other than income taxes | 432 | 411 | 870 | 847 | |||||||||||||||||||
Total operating expenses | 7,561 | 6,769 | 17,643 | 14,298 | |||||||||||||||||||
Gain on sales of assets and businesses | 12 | 12 | 83 | 13 | |||||||||||||||||||
Operating income | 366 | 565 | 245 | 1,784 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (390) | (421) | (770) | (824) | |||||||||||||||||||
Interest expense to affiliates | (6) | (6) | (13) | (13) | |||||||||||||||||||
Other, net | 581 | 656 | 806 | (68) | |||||||||||||||||||
Total other income and (deductions) | 185 | 229 | 23 | (905) | |||||||||||||||||||
Income before income taxes | 551 | 794 | 268 | 879 | |||||||||||||||||||
Income taxes | 74 | 219 | 55 | (75) | |||||||||||||||||||
Equity in losses of unconsolidated affiliates | (1) | (1) | (2) | (4) | |||||||||||||||||||
Net income | 476 | 574 | 211 | 950 | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 75 | 53 | 99 | (153) | |||||||||||||||||||
Net income attributable to common shareholders | $ | 401 | $ | 521 | $ | 112 | $ | 1,103 | |||||||||||||||
Comprehensive income, net of income taxes | |||||||||||||||||||||||
Net income | $ | 476 | $ | 574 | $ | 211 | $ | 950 | |||||||||||||||
Other comprehensive income (loss), net of income taxes | |||||||||||||||||||||||
Pension and non-pension postretirement benefit plans: | |||||||||||||||||||||||
Prior service benefit reclassified to periodic benefit cost | (1) | (10) | (2) | (20) | |||||||||||||||||||
Actuarial loss reclassified to periodic benefit cost | 56 | 47 | 112 | 94 | |||||||||||||||||||
Pension and non-pension postretirement benefit plan valuation adjustment | 0 | 2 | (2) | (5) | |||||||||||||||||||
Unrealized loss on cash flow hedges | 0 | 0 | 0 | (1) | |||||||||||||||||||
Unrealized gain (loss) on foreign currency translation | 2 | 2 | 3 | (6) | |||||||||||||||||||
Other comprehensive income | 57 | 41 | 111 | 62 | |||||||||||||||||||
Comprehensive income | 533 | 615 | 322 | 1,012 | |||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 75 | 53 | 99 | (153) | |||||||||||||||||||
Comprehensive income attributable to common shareholders | $ | 458 | $ | 562 | $ | 223 | $ | 1,165 | |||||||||||||||
Average shares of common stock outstanding: | |||||||||||||||||||||||
Basic | 978 | 976 | 978 | 975 | |||||||||||||||||||
Assumed exercise and/or distributions of stock-based awards | 1 | 0 | 1 | 1 | |||||||||||||||||||
Diluted(a) | 979 | 976 | 979 | 976 | |||||||||||||||||||
Earnings per average common share | |||||||||||||||||||||||
Basic | $ | 0.41 | $ | 0.53 | $ | 0.11 | $ | 1.13 | |||||||||||||||
Diluted | $ | 0.41 | $ | 0.53 | $ | 0.11 | $ | 1.13 |
__________
(a)The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was zero for the three and six months ended June 30, 2021 and 1 million and less than 1 million for the three and six months ended June 30, 2020, respectively.
See the Combined Notes to Consolidated Financial Statements
10
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 211 | $ | 950 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization | 4,180 | 2,741 | |||||||||
Asset impairments | 500 | 33 | |||||||||
Gain on sales of assets and businesses | (83) | (13) | |||||||||
Deferred income taxes and amortization of investment tax credits | (163) | 33 | |||||||||
Net fair value changes related to derivatives | (490) | (194) | |||||||||
Net realized and unrealized (gains) losses on NDT funds | (376) | 196 | |||||||||
Net unrealized gains on equity investments | (96) | 0 | |||||||||
Other non-cash operating activities | (331) | 671 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (16) | 1,318 | |||||||||
Inventories | 1 | (14) | |||||||||
Accounts payable and accrued expenses | (87) | (798) | |||||||||
Option premiums received (paid), net | 2 | (102) | |||||||||
Collateral received, net | 957 | 340 | |||||||||
Income taxes | 190 | (114) | |||||||||
Pension and non-pension postretirement benefit contributions | (559) | (558) | |||||||||
Other assets and liabilities | (2,702) | (1,809) | |||||||||
Net cash flows provided by operating activities | 1,138 | 2,680 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (4,040) | (3,773) | |||||||||
Proceeds from NDT fund sales | 4,438 | 2,488 | |||||||||
Investment in NDT funds | (4,538) | (2,540) | |||||||||
Collection of DPP | 2,209 | 1,102 | |||||||||
Proceeds from sales of assets and businesses | 724 | 0 | |||||||||
Other investing activities | 17 | 4 | |||||||||
Net cash flows used in investing activities | (1,190) | (2,719) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (666) | (751) | |||||||||
Proceeds from short-term borrowings with maturities greater than 90 days | 500 | 500 | |||||||||
Issuance of long-term debt | 2,455 | 6,526 | |||||||||
Retirement of long-term debt | (630) | (3,894) | |||||||||
Dividends paid on common stock | (747) | (746) | |||||||||
Proceeds from employee stock plans | 47 | 46 | |||||||||
Other financing activities | (64) | (84) | |||||||||
Net cash flows provided by financing activities | 895 | 1,597 | |||||||||
Increase in cash, restricted cash, and cash equivalents | 843 | 1,558 | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 1,166 | 1,122 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 2,009 | $ | 2,680 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (313) | $ | (105) | |||||||
Increase in DPP | 1,958 | 1,754 | |||||||||
See the Combined Notes to Consolidated Financial Statements
11
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 1,578 | $ | 663 | |||||||
Restricted cash and cash equivalents | 379 | 438 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 3,533 | 3,597 | |||||||||
Customer allowance for credit losses | (395) | (366) | |||||||||
Customer accounts receivable, net | 3,138 | 3,231 | |||||||||
Other accounts receivable | 1,426 | 1,469 | |||||||||
Other allowance for credit losses | (72) | (71) | |||||||||
Other accounts receivable, net | 1,354 | 1,398 | |||||||||
Mark-to-market derivative assets | 749 | 644 | |||||||||
Unamortized energy contract assets | 37 | 38 | |||||||||
Inventories, net | |||||||||||
Fossil fuel and emission allowances | 259 | 297 | |||||||||
Materials and supplies | 1,443 | 1,425 | |||||||||
Regulatory assets | 1,252 | 1,228 | |||||||||
Renewable energy credits | 368 | 633 | |||||||||
Assets held for sale | 11 | 958 | |||||||||
Other | 1,780 | 1,609 | |||||||||
Total current assets | 12,348 | 12,562 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $28,783 and $26,727 as of June 30, 2021 and December 31, 2020, respectively) | 82,120 | 82,584 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 8,745 | 8,759 | |||||||||
Nuclear decommissioning trust funds | 15,400 | 14,464 | |||||||||
Investments | 421 | 440 | |||||||||
Goodwill | 6,677 | 6,677 | |||||||||
Mark-to-market derivative assets | 443 | 555 | |||||||||
Unamortized energy contract assets | 278 | 294 | |||||||||
Other | 2,964 | 2,982 | |||||||||
Total deferred debits and other assets | 34,928 | 34,171 | |||||||||
Total assets(a) | $ | 129,396 | $ | 129,317 |
See the Combined Notes to Consolidated Financial Statements
12
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 1,865 | $ | 2,031 | |||||||
Long-term debt due within one year | 3,633 | 1,819 | |||||||||
Accounts payable | 3,547 | 3,562 | |||||||||
Accrued expenses | 1,719 | 2,078 | |||||||||
Payables to affiliates | 5 | 5 | |||||||||
Regulatory liabilities | 686 | 581 | |||||||||
Mark-to-market derivative liabilities | 719 | 295 | |||||||||
Unamortized energy contract liabilities | 95 | 100 | |||||||||
Renewable energy credit obligation | 509 | 661 | |||||||||
Liabilities held for sale | 2 | 375 | |||||||||
Other | 1,139 | 1,264 | |||||||||
Total current liabilities | 13,919 | 12,771 | |||||||||
Long-term debt | 35,077 | 35,093 | |||||||||
Long-term debt to financing trusts | 390 | 390 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 13,194 | 13,035 | |||||||||
Asset retirement obligations | 12,502 | 12,300 | |||||||||
Pension obligations | 3,880 | 4,503 | |||||||||
Non-pension postretirement benefit obligations | 1,983 | 2,011 | |||||||||
Spent nuclear fuel obligation | 1,209 | 1,208 | |||||||||
Regulatory liabilities | 9,148 | 9,485 | |||||||||
Mark-to-market derivative liabilities | 554 | 473 | |||||||||
Unamortized energy contract liabilities | 192 | 238 | |||||||||
Other | 2,848 | 2,942 | |||||||||
Total deferred credits and other liabilities | 45,510 | 46,195 | |||||||||
Total liabilities(a) | 94,896 | 94,449 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholders’ equity | |||||||||||
Common stock (NaN par value, 2,000 shares authorized, 978 shares and 976 shares outstanding at June 30, 2021 and December 31, 2020, respectively) | 19,454 | 19,373 | |||||||||
Treasury stock, at cost (2 shares at June 30, 2021 and December 31, 2020) | (123) | (123) | |||||||||
Retained earnings | 16,098 | 16,735 | |||||||||
Accumulated other comprehensive loss, net | (3,289) | (3,400) | |||||||||
Total shareholders’ equity | 32,140 | 32,585 | |||||||||
Noncontrolling interests | 2,360 | 2,283 | |||||||||
Total equity | 34,500 | 34,868 | |||||||||
Total liabilities and shareholders’ equity | $ | 129,396 | $ | 129,317 |
__________
(a)Exelon’s consolidated assets include $10,093 million and $10,200 million at June 30, 2021 and December 31, 2020, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Exelon’s consolidated liabilities include $3,578 million and $3,598 million at June 30, 2021 and December 31, 2020, respectively, of certain VIEs for which the VIE creditors do not have recourse to Exelon. See Note 17 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
13
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Six Months Ended June 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 | ||||||||||||||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
14
EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(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, 2019 | 974,416 | $ | 19,274 | $ | (123) | $ | 16,267 | $ | (3,194) | $ | 2,349 | $ | 34,573 | ||||||||||||||||||||||||||||
Net income (loss) | — | — | — | 582 | — | (206) | 376 | ||||||||||||||||||||||||||||||||||
Long-term incentive plan activity | 1,354 | (4) | — | — | — | — | (4) | ||||||||||||||||||||||||||||||||||
Employee stock purchase plan issuances | 470 | 31 | — | — | — | — | 31 | ||||||||||||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | — | — | (9) | (9) | ||||||||||||||||||||||||||||||||||
Sale of noncontrolling interests | — | 2 | — | — | — | — | 2 | ||||||||||||||||||||||||||||||||||
Common stock dividends ($0.38/common share) | — | — | — | (374) | — | — | (374) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of income taxes | — | — | — | — | 21 | — | 21 | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | 976,240 | $ | 19,303 | $ | (123) | $ | 16,475 | $ | (3,173) | $ | 2,134 | $ | 34,616 | ||||||||||||||||||||||||||||
Net income | — | — | — | 521 | — | 53 | 574 | ||||||||||||||||||||||||||||||||||
Long-term incentive plan activity | 148 | 17 | — | — | — | — | 17 | ||||||||||||||||||||||||||||||||||
Employee stock purchase plan issuances | (51) | 15 | — | — | — | — | 15 | ||||||||||||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | — | — | (19) | (19) | ||||||||||||||||||||||||||||||||||
Sale of noncontrolling interests | — | 1 | — | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
Common stock dividends ($0.38/common share) | — | — | — | (374) | — | — | (374) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of income taxes | — | — | — | — | 41 | — | 41 | ||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | 976,337 | $ | 19,336 | $ | (123) | $ | 16,622 | $ | (3,132) | $ | 2,168 | $ | 34,871 | ||||||||||||||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
15
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Operating revenues | $ | 3,899 | $ | 3,609 | $ | 9,163 | $ | 8,012 | |||||||||||||||
Operating revenues from affiliates | 254 | 271 | 549 | 601 | |||||||||||||||||||
Total operating revenues | 4,153 | 3,880 | 9,712 | 8,613 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power and fuel | 1,952 | 1,945 | 6,562 | 4,655 | |||||||||||||||||||
Purchased power and fuel from affiliates | (5) | (3) | (5) | (9) | |||||||||||||||||||
Operating and maintenance | 1,337 | 1,053 | 2,194 | 2,174 | |||||||||||||||||||
Operating and maintenance from affiliates | 137 | 136 | 282 | 277 | |||||||||||||||||||
Depreciation and amortization | 930 | 300 | 1,869 | 604 | |||||||||||||||||||
Taxes other than income taxes | 118 | 116 | 239 | 246 | |||||||||||||||||||
Total operating expenses | 4,469 | 3,547 | 11,141 | 7,947 | |||||||||||||||||||
Gain on sales of assets and businesses | 8 | 12 | 79 | 12 | |||||||||||||||||||
Operating (loss) income | (308) | 345 | (1,350) | 678 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (72) | (78) | (140) | (179) | |||||||||||||||||||
Interest expense to affiliates | (4) | (9) | (8) | (18) | |||||||||||||||||||
Other, net | 508 | 602 | 675 | (168) | |||||||||||||||||||
Total other income and (deductions) | 432 | 515 | 527 | (365) | |||||||||||||||||||
Income (loss) before income taxes | 124 | 860 | (823) | 313 | |||||||||||||||||||
Income taxes | 110 | 329 | (70) | (59) | |||||||||||||||||||
Equity in losses of unconsolidated affiliates | (1) | (2) | (3) | (4) | |||||||||||||||||||
Net income (loss) | 13 | 529 | (756) | 368 | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 74 | 53 | 98 | (153) | |||||||||||||||||||
Net (loss) income attributable to membership interest | $ | (61) | $ | 476 | $ | (854) | $ | 521 | |||||||||||||||
Comprehensive income, net of income taxes | |||||||||||||||||||||||
Net income (loss) | $ | 13 | $ | 529 | $ | (756) | $ | 368 | |||||||||||||||
Other comprehensive income (loss), net of income taxes | |||||||||||||||||||||||
Unrealized loss on cash flow hedges | 0 | 0 | 0 | (1) | |||||||||||||||||||
Unrealized gain (loss) on foreign currency translation | 2 | 2 | 3 | (6) | |||||||||||||||||||
Other comprehensive income (loss), net of income taxes | 2 | 2 | 3 | (7) | |||||||||||||||||||
Comprehensive income (loss) | 15 | 531 | (753) | 361 | |||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 74 | 53 | 98 | (153) | |||||||||||||||||||
Comprehensive (loss) income attributable to membership interest | $ | (59) | $ | 478 | $ | (851) | $ | 514 |
See the Combined Notes to Consolidated Financial Statements
16
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net (loss) income | $ | (756) | $ | 368 | |||||||
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities: | |||||||||||
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization | 2,686 | 1,320 | |||||||||
Asset impairments | 493 | 18 | |||||||||
Gain on sales of assets and businesses | (79) | (12) | |||||||||
Deferred income taxes and amortization of investment tax credits | (142) | (54) | |||||||||
Net fair value changes related to derivatives | (490) | (193) | |||||||||
Net realized and unrealized (gains) losses on NDT funds | (376) | 196 | |||||||||
Net unrealized gains on equity investments | (96) | 0 | |||||||||
Other non-cash operating activities | (421) | 136 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (90) | 1,443 | |||||||||
Receivables from and payables to affiliates, net | 43 | 68 | |||||||||
Inventories | 4 | (34) | |||||||||
Accounts payable and accrued expenses | 154 | (666) | |||||||||
Option premiums received (paid), net | 2 | (102) | |||||||||
Collateral received, net | 955 | 342 | |||||||||
Income taxes | (1) | 26 | |||||||||
Pension and non-pension postretirement benefit contributions | (212) | (243) | |||||||||
Other assets and liabilities | (2,031) | (1,332) | |||||||||
Net cash flows (used in) provided by operating activities | (357) | 1,281 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (719) | (930) | |||||||||
Proceeds from NDT fund sales | 4,438 | 2,488 | |||||||||
Investment in NDT funds | (4,538) | (2,540) | |||||||||
Collection of DPP | 2,209 | 1,102 | |||||||||
Proceeds from sales of assets and businesses | 724 | 0 | |||||||||
Other investing activities | (8) | 6 | |||||||||
Net cash flows provided by investing activities | 2,106 | 126 | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (340) | (220) | |||||||||
Proceeds from short-term borrowings with maturities greater than 90 days | 0 | 500 | |||||||||
Issuance of long-term debt | 151 | 2,403 | |||||||||
Retirement of long-term debt | (56) | (2,936) | |||||||||
Changes in Exelon intercompany money pool | (285) | 0 | |||||||||
Distributions to member | (916) | (937) | |||||||||
Other financing activities | (29) | (30) | |||||||||
Net cash flows used in financing activities | (1,475) | (1,220) | |||||||||
Increase in cash, restricted cash, and cash equivalents | 274 | 187 | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 327 | 449 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 601 | $ | 636 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (66) | $ | (108) | |||||||
Increase in DPP | 1,958 | 1,754 | |||||||||
See the Combined Notes to Consolidated Financial Statements
17
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 542 | $ | 226 | |||||||
Restricted cash and cash equivalents | 59 | 89 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 1,410 | 1,330 | |||||||||
Customer allowance for credit losses | (75) | (32) | |||||||||
Customer accounts receivable, net | 1,335 | 1,298 | |||||||||
Other accounts receivable | 476 | 352 | |||||||||
Other allowance for credit losses | (1) | 0 | |||||||||
Other accounts receivable, net | 475 | 352 | |||||||||
Mark-to-market derivative assets | 749 | 644 | |||||||||
Receivables from affiliates | 117 | 153 | |||||||||
Unamortized energy contract assets | 37 | 38 | |||||||||
Inventories, net | |||||||||||
Fossil fuel and emission allowances | 204 | 233 | |||||||||
Materials and supplies | 986 | 978 | |||||||||
Renewable energy credits | 341 | 621 | |||||||||
Assets held for sale | 11 | 958 | |||||||||
Other | 1,353 | 1,357 | |||||||||
Total current assets | 6,209 | 6,947 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $15,024 and $13,370 as of June 30, 2021 and December 31, 2020, respectively) | 19,837 | 22,214 | |||||||||
Deferred debits and other assets | |||||||||||
Nuclear decommissioning trust funds | 15,400 | 14,464 | |||||||||
Investments | 157 | 184 | |||||||||
Goodwill | 47 | 47 | |||||||||
Mark-to-market derivative assets | 441 | 555 | |||||||||
Prepaid pension asset | 1,713 | 1,558 | |||||||||
Unamortized energy contract assets | 278 | 293 | |||||||||
Deferred income taxes | 14 | 6 | |||||||||
Other | 1,725 | 1,826 | |||||||||
Total deferred debits and other assets | 19,775 | 18,933 | |||||||||
Total assets(a) | $ | 45,821 | $ | 48,094 |
See the Combined Notes to Consolidated Financial Statements
18
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 500 | $ | 840 | |||||||
Long-term debt due within one year | 1,229 | 197 | |||||||||
Accounts payable | 1,489 | 1,253 | |||||||||
Accrued expenses | 654 | 788 | |||||||||
Payables to affiliates | 119 | 107 | |||||||||
Borrowings from Exelon intercompany money pool | 0 | 285 | |||||||||
Mark-to-market derivative liabilities | 695 | 262 | |||||||||
Unamortized energy contract liabilities | 4 | 7 | |||||||||
Renewable energy credit obligation | 508 | 661 | |||||||||
Liabilities held for sale | 2 | 375 | |||||||||
Other | 313 | 444 | |||||||||
Total current liabilities | 5,513 | 5,219 | |||||||||
Long-term debt | 4,627 | 5,566 | |||||||||
Long-term debt to affiliates | 322 | 324 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 3,460 | 3,656 | |||||||||
Asset retirement obligations | 12,257 | 12,054 | |||||||||
Non-pension postretirement benefit obligations | 857 | 858 | |||||||||
Spent nuclear fuel obligation | 1,209 | 1,208 | |||||||||
Payables to affiliates | 3,011 | 3,017 | |||||||||
Mark-to-market derivative liabilities | 311 | 205 | |||||||||
Unamortized energy contract liabilities | 3 | 3 | |||||||||
Other | 1,266 | 1,308 | |||||||||
Total deferred credits and other liabilities | 22,374 | 22,309 | |||||||||
Total liabilities(a) | 32,836 | 33,418 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Equity | |||||||||||
Member’s equity | |||||||||||
Membership interest | 9,624 | 9,624 | |||||||||
Undistributed earnings | 1,035 | 2,805 | |||||||||
Accumulated other comprehensive loss, net | (27) | (30) | |||||||||
Total member’s equity | 10,632 | 12,399 | |||||||||
Noncontrolling interests | 2,353 | 2,277 | |||||||||
Total equity | 12,985 | 14,676 | |||||||||
Total liabilities and equity | $ | 45,821 | $ | 48,094 |
__________
(a)Generation’s consolidated assets include $10,077 million and $10,182 million at June 30, 2021 and December 31, 2020, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Generation’s consolidated liabilities include $3,563 million and $3,572 million at June 30, 2021 and December 31, 2020, respectively, of certain VIEs for which the VIE creditors do not have recourse to Generation. See Note 17 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
19
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Member’s Equity | |||||||||||||||||||||||||||||
(In millions) | Membership Interest | Undistributed Earnings | Accumulated Other Comprehensive Loss, net | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 9,624 | $ | 2,805 | $ | (30) | $ | 2,277 | $ | 14,676 | |||||||||||||||||||
Net (loss) income | — | (793) | — | 24 | (769) | ||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | (10) | (10) | ||||||||||||||||||||||||
Distributions to member | — | (458) | — | — | (458) | ||||||||||||||||||||||||
Other comprehensive income, net of income taxes | — | 0 | 1 | 0 | 1 | ||||||||||||||||||||||||
Balance, March 31, 2021 | $ | 9,624 | $ | 1,554 | $ | (29) | $ | 2,291 | $ | 13,440 | |||||||||||||||||||
Net (loss) income | — | (61) | — | 74 | 13 | ||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | (12) | (12) | ||||||||||||||||||||||||
Distributions to member | — | (458) | — | — | (458) | ||||||||||||||||||||||||
Other comprehensive income, net of income taxes | — | 0 | 2 | 0 | 2 | ||||||||||||||||||||||||
Balance, June 30, 2021 | $ | 9,624 | $ | 1,035 | $ | (27) | $ | 2,353 | $ | 12,985 | |||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
Member’s Equity | |||||||||||||||||||||||||||||
(In millions) | Membership Interest | Undistributed Earnings | Accumulated Other Comprehensive Loss, net | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Balance, December 31, 2019 | $ | 9,566 | $ | 3,950 | $ | (32) | $ | 2,346 | $ | 15,830 | |||||||||||||||||||
Net income (loss) | — | 45 | — | (206) | (161) | ||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | (11) | (11) | ||||||||||||||||||||||||
Sale of noncontrolling interests | 2 | — | — | — | 2 | ||||||||||||||||||||||||
Distributions to member | — | (468) | — | — | (468) | ||||||||||||||||||||||||
Other comprehensive loss, net of income taxes | — | 0 | (9) | 0 | (9) | ||||||||||||||||||||||||
Balance, March 31, 2020 | $ | 9,568 | $ | 3,527 | $ | (41) | $ | 2,129 | $ | 15,183 | |||||||||||||||||||
Net income | — | 476 | — | 53 | 529 | ||||||||||||||||||||||||
Changes in equity of noncontrolling interests | — | — | — | (19) | (19) | ||||||||||||||||||||||||
Sale of noncontrolling interests | 1 | — | — | — | 1 | ||||||||||||||||||||||||
Distributions to member | — | (469) | — | — | (469) | ||||||||||||||||||||||||
Other comprehensive income, net of income taxes | — | 0 | 2 | 0 | 2 | ||||||||||||||||||||||||
Balance, June 30, 2020 | $ | 9,569 | $ | 3,534 | $ | (39) | $ | 2,163 | $ | 15,227 | |||||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
20
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 1,503 | $ | 1,431 | $ | 2,977 | $ | 2,853 | |||||||||||||||
Revenues from alternative revenue programs | 9 | (25) | 64 | (13) | |||||||||||||||||||
Operating revenues from affiliates | 5 | 11 | 11 | 16 | |||||||||||||||||||
Total operating revenues | 1,517 | 1,417 | 3,052 | 2,856 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 421 | 380 | 862 | 770 | |||||||||||||||||||
Purchased power from affiliate | 79 | 84 | 163 | 181 | |||||||||||||||||||
Operating and maintenance | 250 | 469 | 495 | 713 | |||||||||||||||||||
Operating and maintenance from affiliates | 73 | 67 | 144 | 140 | |||||||||||||||||||
Depreciation and amortization | 296 | 274 | 589 | 547 | |||||||||||||||||||
Taxes other than income taxes | 77 | 71 | 153 | 146 | |||||||||||||||||||
Total operating expenses | 1,196 | 1,345 | 2,406 | 2,497 | |||||||||||||||||||
Operating income | 321 | 72 | 646 | 359 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (95) | (95) | (187) | (186) | |||||||||||||||||||
Interest expense to affiliates | (3) | (3) | (6) | (6) | |||||||||||||||||||
Other, net | 15 | 11 | 22 | 22 | |||||||||||||||||||
Total other income and (deductions) | (83) | (87) | (171) | (170) | |||||||||||||||||||
Income (loss) before income taxes | 238 | (15) | 475 | 189 | |||||||||||||||||||
Income taxes | 46 | 46 | 85 | 82 | |||||||||||||||||||
Net income (loss) | $ | 192 | $ | (61) | $ | 390 | $ | 107 | |||||||||||||||
Comprehensive income (loss) | $ | 192 | $ | (61) | $ | 390 | $ | 107 |
21
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 390 | $ | 107 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 589 | 547 | |||||||||
Asset impairments | 0 | 15 | |||||||||
Deferred income taxes and amortization of investment tax credits | 143 | 129 | |||||||||
Other non-cash operating activities | 23 | 283 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (48) | (92) | |||||||||
Receivables from and payables to affiliates, net | 5 | (6) | |||||||||
Inventories | (2) | (7) | |||||||||
Accounts payable and accrued expenses | (45) | 4 | |||||||||
Collateral received (posted), net | 2 | (3) | |||||||||
Income taxes | (34) | (90) | |||||||||
Pension and non-pension postretirement benefit contributions | (173) | (144) | |||||||||
Other assets and liabilities | (292) | (245) | |||||||||
Net cash flows provided by operating activities | 558 | 498 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (1,162) | (1,029) | |||||||||
Other investing activities | 12 | (4) | |||||||||
Net cash flows used in investing activities | (1,150) | (1,033) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (290) | (130) | |||||||||
Issuance of long-term debt | 700 | 1,000 | |||||||||
Dividends paid on common stock | (253) | (249) | |||||||||
Contributions from parent | 395 | 249 | |||||||||
Other financing activities | (11) | (14) | |||||||||
Net cash flows provided by financing activities | 541 | 856 | |||||||||
(Decrease) increase in cash, restricted cash, and cash equivalents | (51) | 321 | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 405 | 403 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 354 | $ | 724 | |||||||
Supplemental cash flow information | |||||||||||
(Decrease) increase in capital expenditures not paid | $ | (93) | $ | 18 | |||||||
See the Combined Notes to Consolidated Financial Statements
22
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 71 | $ | 83 | |||||||
Restricted cash and cash equivalents | 240 | 279 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 687 | 656 | |||||||||
Customer allowance for credit losses | (89) | (97) | |||||||||
Customer accounts receivable, net | 598 | 559 | |||||||||
Other accounts receivable | 257 | 239 | |||||||||
Other allowance for credit losses | (18) | (21) | |||||||||
Other accounts receivable, net | 239 | 218 | |||||||||
Receivables from affiliates | 22 | 22 | |||||||||
Inventories, net | 170 | 170 | |||||||||
Regulatory assets | 298 | 279 | |||||||||
Other | 77 | 49 | |||||||||
Total current assets | 1,715 | 1,659 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $5,885 and $5,672 as of June 30, 2021 and December 31, 2020, respectively) | 25,170 | 24,557 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 1,846 | 1,749 | |||||||||
Investments | 6 | 6 | |||||||||
Goodwill | 2,625 | 2,625 | |||||||||
Receivables from affiliates | 2,439 | 2,541 | |||||||||
Prepaid pension asset | 1,138 | 1,022 | |||||||||
Other | 385 | 307 | |||||||||
Total deferred debits and other assets | 8,439 | 8,250 | |||||||||
Total assets | $ | 35,324 | $ | 34,466 |
See the Combined Notes to Consolidated Financial Statements
23
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 33 | $ | 323 | |||||||
Long-term debt due within one year | 350 | 350 | |||||||||
Accounts payable | 575 | 683 | |||||||||
Accrued expenses | 346 | 390 | |||||||||
Payables to affiliates | 102 | 96 | |||||||||
Customer deposits | 90 | 86 | |||||||||
Regulatory liabilities | 419 | 289 | |||||||||
Mark-to-market derivative liabilities | 23 | 33 | |||||||||
Other | 147 | 143 | |||||||||
Total current liabilities | 2,085 | 2,393 | |||||||||
Long-term debt | 9,325 | 8,633 | |||||||||
Long-term debt to financing trust | 205 | 205 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 4,531 | 4,341 | |||||||||
Asset retirement obligations | 128 | 126 | |||||||||
Non-pension postretirement benefits obligations | 180 | 173 | |||||||||
Regulatory liabilities | 6,181 | 6,403 | |||||||||
Mark-to-market derivative liabilities | 242 | 268 | |||||||||
Other | 587 | 595 | |||||||||
Total deferred credits and other liabilities | 11,849 | 11,906 | |||||||||
Total liabilities | 23,464 | 23,137 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholders’ equity | |||||||||||
Common stock | 1,588 | 1,588 | |||||||||
Other paid-in capital | 8,680 | 8,285 | |||||||||
Retained deficit unappropriated | (1,639) | (1,639) | |||||||||
Retained earnings appropriated | 3,231 | 3,095 | |||||||||
Total shareholders’ equity | 11,860 | 11,329 | |||||||||
Total liabilities and shareholders’ equity | $ | 35,324 | $ | 34,466 |
See the Combined Notes to Consolidated Financial Statements
24
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
(In millions) | Common Stock | Other Paid-In Capital | Retained Deficit Unappropriated | Retained Earnings Appropriated | Total Shareholders’ Equity | ||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 1,588 | $ | 8,285 | $ | (1,639) | $ | 3,095 | $ | 11,329 | |||||||||||||||||||
Net income | — | — | 197 | — | 197 | ||||||||||||||||||||||||
Appropriation of retained earnings for future dividends | — | — | (197) | 197 | 0 | ||||||||||||||||||||||||
Common stock dividends | — | — | — | (127) | (127) | ||||||||||||||||||||||||
Contributions from parent | — | 198 | — | — | 198 | ||||||||||||||||||||||||
Balance, March 31, 2021 | $ | 1,588 | $ | 8,483 | $ | (1,639) | $ | 3,165 | $ | 11,597 | |||||||||||||||||||
Net income | — | — | 192 | — | 192 | ||||||||||||||||||||||||
Appropriation of retained earnings for future dividends | — | — | (192) | 192 | 0 | ||||||||||||||||||||||||
Common stock dividends | — | — | — | (126) | (126) | ||||||||||||||||||||||||
Contributions from parent | — | 197 | — | — | 197 | ||||||||||||||||||||||||
Balance, June 30, 2021 | $ | 1,588 | $ | 8,680 | $ | (1,639) | $ | 3,231 | $ | 11,860 | |||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
(In millions) | Common Stock | Other Paid-In Capital | Retained Deficit Unappropriated | Retained Earnings Appropriated | Total Shareholders’ Equity | ||||||||||||||||||||||||
Balance, December 31, 2019 | $ | 1,588 | $ | 7,572 | $ | (1,639) | $ | 3,156 | $ | 10,677 | |||||||||||||||||||
Net income | — | — | 168 | — | 168 | ||||||||||||||||||||||||
Appropriation of retained earnings for future dividends | — | — | (168) | 168 | 0 | ||||||||||||||||||||||||
Common stock dividends | — | — | — | (125) | (125) | ||||||||||||||||||||||||
Contributions from parent | — | 125 | — | — | 125 | ||||||||||||||||||||||||
Balance, March 31, 2020 | $ | 1,588 | $ | 7,697 | $ | (1,639) | $ | 3,199 | $ | 10,845 | |||||||||||||||||||
Net loss | — | — | (61) | — | (61) | ||||||||||||||||||||||||
Common stock dividends | — | — | — | (124) | (124) | ||||||||||||||||||||||||
Contributions from parent | — | 124 | — | — | 124 | ||||||||||||||||||||||||
Balance, June 30, 2020 | $ | 1,588 | $ | 7,821 | $ | (1,700) | $ | 3,075 | $ | 10,784 | |||||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
25
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 602 | $ | 580 | $ | 1,251 | $ | 1,180 | |||||||||||||||
Natural gas operating revenues | 82 | 95 | 310 | 304 | |||||||||||||||||||
Revenues from alternative revenue programs | 7 | 4 | 17 | 5 | |||||||||||||||||||
Operating revenues from affiliates | 2 | 2 | 4 | 4 | |||||||||||||||||||
Total operating revenues | 693 | 681 | 1,582 | 1,493 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 145 | 142 | 334 | 306 | |||||||||||||||||||
Purchased fuel | 22 | 34 | 108 | 117 | |||||||||||||||||||
Purchased power from affiliate | 40 | 40 | 81 | 76 | |||||||||||||||||||
Operating and maintenance | 166 | 235 | 360 | 414 | |||||||||||||||||||
Operating and maintenance from affiliates | 43 | 40 | 83 | 78 | |||||||||||||||||||
Depreciation and amortization | 87 | 88 | 173 | 173 | |||||||||||||||||||
Taxes other than income taxes | 49 | 39 | 92 | 78 | |||||||||||||||||||
Total operating expenses | 552 | 618 | 1,231 | 1,242 | |||||||||||||||||||
Operating income | 141 | 63 | 351 | 251 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (39) | (33) | (74) | (65) | |||||||||||||||||||
Interest expense to affiliates | (3) | (3) | (6) | (6) | |||||||||||||||||||
Other, net | 7 | 5 | 12 | 7 | |||||||||||||||||||
Total other income and (deductions) | (35) | (31) | (68) | (64) | |||||||||||||||||||
Income before income taxes | 106 | 32 | 283 | 187 | |||||||||||||||||||
Income taxes | 2 | (7) | 12 | 9 | |||||||||||||||||||
Net income | $ | 104 | $ | 39 | $ | 271 | $ | 178 | |||||||||||||||
Comprehensive income | $ | 104 | $ | 39 | $ | 271 | $ | 178 |
See the Combined Notes to Consolidated Financial Statements
26
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 271 | $ | 178 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 173 | 173 | |||||||||
Deferred income taxes and amortization of investment tax credits | 21 | 6 | |||||||||
Other non-cash operating activities | (5) | 25 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 86 | 22 | |||||||||
Receivables from and payables to affiliates, net | 2 | 3 | |||||||||
Inventories | 3 | 10 | |||||||||
Accounts payable and accrued expenses | (46) | 27 | |||||||||
Income taxes | 24 | 15 | |||||||||
Pension and non-pension postretirement benefit contributions | (15) | (18) | |||||||||
Other assets and liabilities | (140) | (48) | |||||||||
Net cash flows provided by operating activities | 374 | 393 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (577) | (512) | |||||||||
Changes in Exelon intercompany money pool | 0 | 68 | |||||||||
Other investing activities | 4 | 3 | |||||||||
Net cash flows used in investing activities | (573) | (441) | |||||||||
Cash flows from financing activities | |||||||||||
Issuance of long-term debt | 375 | 350 | |||||||||
Changes in Exelon intercompany money pool | (40) | 0 | |||||||||
Dividends paid on common stock | (169) | (170) | |||||||||
Contributions from parent | 395 | 231 | |||||||||
Other financing activities | (4) | (3) | |||||||||
Net cash flows provided by financing activities | 557 | 408 | |||||||||
Increase in cash, restricted cash, and cash equivalents | 358 | 360 | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 26 | 27 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 384 | $ | 387 | |||||||
Supplemental cash flow information | |||||||||||
(Decrease) increase in capital expenditures not paid | $ | (16) | $ | 42 | |||||||
See the Combined Notes to Consolidated Financial Statements
27
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 376 | $ | 19 | |||||||
Restricted cash and cash equivalents | 8 | 7 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 419 | 511 | |||||||||
Customer allowance for credit losses | (111) | (116) | |||||||||
Customer accounts receivable, net | 308 | 395 | |||||||||
Other accounts receivable | 106 | 130 | |||||||||
Other allowance for credit losses | (7) | (8) | |||||||||
Other accounts receivable, net | 99 | 122 | |||||||||
Receivables from affiliates | 0 | 2 | |||||||||
Inventories, net | |||||||||||
Fossil fuel | 25 | 33 | |||||||||
Materials and supplies | 42 | 38 | |||||||||
Prepaid utility taxes | 76 | 0 | |||||||||
Regulatory assets | 30 | 25 | |||||||||
Other | 37 | 21 | |||||||||
Total current assets | 1,001 | 662 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,906 and $3,843 as of June 30, 2021 and December 31, 2020, respectively) | 10,581 | 10,181 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 866 | 776 | |||||||||
Investments | 32 | 30 | |||||||||
Receivables from affiliates | 571 | 475 | |||||||||
Prepaid pension asset | 387 | 375 | |||||||||
Other | 53 | 32 | |||||||||
Total deferred debits and other assets | 1,909 | 1,688 | |||||||||
Total assets | $ | 13,491 | $ | 12,531 |
See the Combined Notes to Consolidated Financial Statements
28
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Long-term debt due within one year | $ | 300 | $ | 300 | |||||||
Accounts payable | 436 | 479 | |||||||||
Accrued expenses | 125 | 129 | |||||||||
Payables to affiliates | 50 | 50 | |||||||||
Borrowings from Exelon intercompany money pool | 0 | 40 | |||||||||
Customer deposits | 50 | 59 | |||||||||
Regulatory liabilities | 109 | 121 | |||||||||
Other | 29 | 30 | |||||||||
Total current liabilities | 1,099 | 1,208 | |||||||||
Long-term debt | 3,825 | 3,453 | |||||||||
Long-term debt to financing trusts | 184 | 184 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 2,345 | 2,242 | |||||||||
Asset retirement obligations | 29 | 29 | |||||||||
Non-pension postretirement benefits obligations | 287 | 286 | |||||||||
Regulatory liabilities | 600 | 503 | |||||||||
Other | 92 | 93 | |||||||||
Total deferred credits and other liabilities | 3,353 | 3,153 | |||||||||
Total liabilities | 8,461 | 7,998 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholder’s equity | |||||||||||
Common stock | 3,409 | 3,014 | |||||||||
Retained earnings | 1,621 | 1,519 | |||||||||
Total shareholder’s equity | 5,030 | 4,533 | |||||||||
Total liabilities and shareholder's equity | $ | 13,491 | $ | 12,531 |
See the Combined Notes to Consolidated Financial Statements
29
PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Unaudited)
Six Months Ended June 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 | |||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 2,766 | $ | 1,412 | $ | 4,178 | |||||||||||||||||
Net income | — | 140 | 140 | ||||||||||||||||||||
Common stock dividends | — | (85) | (85) | ||||||||||||||||||||
Contributions from parent | 231 | — | 231 | ||||||||||||||||||||
Balance, March 31, 2020 | $ | 2,997 | $ | 1,467 | $ | 4,464 | |||||||||||||||||
Net income | — | 39 | 39 | ||||||||||||||||||||
Common stock dividends | — | (85) | (85) | ||||||||||||||||||||
Balance, June 30, 2020 | $ | 2,997 | $ | 1,421 | $ | 4,418 | |||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
30
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 560 | $ | 530 | $ | 1,180 | $ | 1,125 | |||||||||||||||
Natural gas operating revenues | 125 | 119 | 455 | 419 | |||||||||||||||||||
Revenues from alternative revenue programs | (10) | (37) | 8 | 0 | |||||||||||||||||||
Operating revenues from affiliates | 7 | 4 | 13 | 10 | |||||||||||||||||||
Total operating revenues | 682 | 616 | 1,656 | 1,554 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 133 | 107 | 295 | 221 | |||||||||||||||||||
Purchased fuel | 27 | 18 | 126 | 95 | |||||||||||||||||||
Purchased power and fuel from affiliate | 59 | 69 | 129 | 167 | |||||||||||||||||||
Operating and maintenance | 147 | 146 | 299 | 293 | |||||||||||||||||||
Operating and maintenance from affiliates | 46 | 41 | 91 | 83 | |||||||||||||||||||
Depreciation and amortization | 141 | 129 | 293 | 272 | |||||||||||||||||||
Taxes other than income taxes | 67 | 63 | 139 | 132 | |||||||||||||||||||
Total operating expenses | 620 | 573 | 1,372 | 1,263 | |||||||||||||||||||
Operating income | 62 | 43 | 284 | 291 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (34) | (32) | (67) | (64) | |||||||||||||||||||
Other, net | 9 | 6 | 16 | 10 | |||||||||||||||||||
Total other income and (deductions) | (25) | (26) | (51) | (54) | |||||||||||||||||||
Income before income taxes | 37 | 17 | 233 | 237 | |||||||||||||||||||
Income taxes | (8) | (22) | (21) | 18 | |||||||||||||||||||
Net income | $ | 45 | $ | 39 | $ | 254 | $ | 219 | |||||||||||||||
Comprehensive income | $ | 45 | $ | 39 | $ | 254 | $ | 219 | |||||||||||||||
See the Combined Notes to Consolidated Financial Statements
31
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 254 | $ | 219 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 293 | 272 | |||||||||
Deferred income taxes and amortization of investment tax credits | 11 | 22 | |||||||||
Other non-cash operating activities | 28 | 50 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 73 | 19 | |||||||||
Receivables from and payables to affiliates, net | (19) | (26) | |||||||||
Inventories | (9) | 10 | |||||||||
Accounts payable and accrued expenses | (51) | (15) | |||||||||
Collateral posted, net | 2 | 0 | |||||||||
Income taxes | (27) | 26 | |||||||||
Pension and non-pension postretirement benefit contributions | (71) | (68) | |||||||||
Other assets and liabilities | (96) | (5) | |||||||||
Net cash flows provided by operating activities | 388 | 504 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (620) | (548) | |||||||||
Other investing activities | 10 | (4) | |||||||||
Net cash flows used in investing activities | (610) | (552) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | 0 | (76) | |||||||||
Issuance of long-term debt | 600 | 400 | |||||||||
Dividends paid on common stock | (146) | (123) | |||||||||
Contributions from parent | 0 | 26 | |||||||||
Other financing activities | (6) | (8) | |||||||||
Net cash flows provided by financing activities | 448 | 219 | |||||||||
Increase in cash, restricted cash, and cash equivalents | 226 | 171 | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 145 | 25 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 371 | $ | 196 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (71) | $ | (14) | |||||||
See the Combined Notes to Consolidated Financial Statements
32
BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 368 | $ | 144 | |||||||
Restricted cash and cash equivalents | 3 | 1 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 398 | 487 | |||||||||
Customer allowance for credit losses | (27) | (35) | |||||||||
Customer accounts receivable, net | 371 | 452 | |||||||||
Other accounts receivable | 146 | 117 | |||||||||
Other allowance for credit losses | (8) | (9) | |||||||||
Other accounts receivable, net | 138 | 108 | |||||||||
Receivables from affiliates | 0 | 3 | |||||||||
Inventories, net | |||||||||||
Fossil fuel | 27 | 25 | |||||||||
Materials and supplies | 48 | 41 | |||||||||
Regulatory assets | 177 | 168 | |||||||||
Other | 9 | 6 | |||||||||
Total current assets | 1,141 | 948 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,151 and $4,034 as of June 30, 2021 and December 31, 2020, respectively) | 10,200 | 9,872 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 473 | 481 | |||||||||
Investments | 13 | 10 | |||||||||
Prepaid pension asset | 302 | 270 | |||||||||
Other | 57 | 69 | |||||||||
Total deferred debits and other assets | 845 | 830 | |||||||||
Total assets | $ | 12,186 | $ | 11,650 |
See the Combined Notes to Consolidated Financial Statements
33
BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Long-term debt due within one year | $ | 300 | $ | 300 | |||||||
Accounts payable | 287 | 346 | |||||||||
Accrued expenses | 138 | 205 | |||||||||
Payables to affiliates | 41 | 61 | |||||||||
Customer deposits | 101 | 110 | |||||||||
Regulatory liabilities | 32 | 30 | |||||||||
Other | 87 | 91 | |||||||||
Total current liabilities | 986 | 1,143 | |||||||||
Long-term debt | 3,959 | 3,364 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 1,643 | 1,521 | |||||||||
Asset retirement obligations | 24 | 23 | |||||||||
Non-pension postretirement benefits obligations | 179 | 189 | |||||||||
Regulatory liabilities | 998 | 1,109 | |||||||||
Other | 92 | 104 | |||||||||
Total deferred credits and other liabilities | 2,936 | 2,946 | |||||||||
Total liabilities | 7,881 | 7,453 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholder's equity | |||||||||||
Common stock | 2,318 | 2,318 | |||||||||
Retained earnings | 1,987 | 1,879 | |||||||||
Total shareholder's equity | 4,305 | 4,197 | |||||||||
Total liabilities and shareholder's equity | $ | 12,186 | $ | 11,650 |
See the Combined Notes to Consolidated Financial Statements
34
BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Six Months Ended June 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 | |||||||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | 1,907 | $ | 1,776 | $ | 3,683 | |||||||||||||||||||||||
Net income | — | 181 | 181 | ||||||||||||||||||||||||||
Common stock dividends | — | (62) | (62) | ||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | 1,907 | $ | 1,895 | $ | 3,802 | |||||||||||||||||||||||
Net income | — | 39 | 39 | ||||||||||||||||||||||||||
Common stock dividends | — | (62) | (62) | ||||||||||||||||||||||||||
Contributions from parent | 26 | — | 26 | ||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | 1,933 | $ | 1,872 | $ | 3,805 |
See the Combined Notes to Consolidated Financial Statements
35
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 1,071 | $ | 1,047 | $ | 2,195 | $ | 2,133 | |||||||||||||||
Natural gas operating revenues | 24 | 30 | 94 | 94 | |||||||||||||||||||
Revenues from alternative revenue programs | 41 | (64) | 88 | (47) | |||||||||||||||||||
Operating revenues from affiliates | 4 | 3 | 7 | 7 | |||||||||||||||||||
Total operating revenues | 1,140 | 1,016 | 2,384 | 2,187 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 308 | 286 | 656 | 586 | |||||||||||||||||||
Purchased fuel | 9 | 11 | 41 | 42 | |||||||||||||||||||
Purchased power from affiliates | 79 | 78 | 177 | 182 | |||||||||||||||||||
Operating and maintenance | 217 | 245 | 434 | 464 | |||||||||||||||||||
Operating and maintenance from affiliates | 39 | 36 | 79 | 74 | |||||||||||||||||||
Depreciation and amortization | 194 | 191 | 404 | 385 | |||||||||||||||||||
Taxes other than income taxes | 109 | 109 | 222 | 222 | |||||||||||||||||||
Total operating expenses | 955 | 956 | 2,013 | 1,955 | |||||||||||||||||||
Gain on sales of assets | 0 | 0 | 0 | 2 | |||||||||||||||||||
Operating income | 185 | 60 | 371 | 234 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (67) | (67) | (134) | (134) | |||||||||||||||||||
Other, net | 20 | 14 | 36 | 26 | |||||||||||||||||||
Total other income and (deductions) | (47) | (53) | (98) | (108) | |||||||||||||||||||
Income before income taxes | 138 | 7 | 273 | 126 | |||||||||||||||||||
Income taxes | (3) | (87) | 5 | (76) | |||||||||||||||||||
Equity in earnings of unconsolidated affiliate | 0 | 0 | 1 | 0 | |||||||||||||||||||
Net income | $ | 141 | $ | 94 | $ | 269 | $ | 202 | |||||||||||||||
Comprehensive income | $ | 141 | $ | 94 | $ | 269 | $ | 202 |
See the Combined Notes to Consolidated Financial Statements
36
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 269 | $ | 202 | |||||||
Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 404 | 385 | |||||||||
Deferred income taxes and amortization of investment tax credits | 10 | (74) | |||||||||
Other non-cash operating activities | (50) | 107 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (30) | (64) | |||||||||
Receivables from and payables to affiliates, net | (22) | (22) | |||||||||
Inventories | 3 | 6 | |||||||||
Accounts payable and accrued expenses | (35) | 14 | |||||||||
Income taxes | (1) | (30) | |||||||||
Pension and non-pension postretirement benefit contributions | (40) | (31) | |||||||||
Other assets and liabilities | (131) | (146) | |||||||||
Net cash flows provided by operating activities | 377 | 347 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (889) | (686) | |||||||||
Other investing activities | (2) | 2 | |||||||||
Net cash flows used in investing activities | (891) | (684) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (36) | (189) | |||||||||
Issuance of long-term debt | 625 | 373 | |||||||||
Retirement of long-term debt | (249) | (35) | |||||||||
Changes in Exelon intercompany money pool | (12) | 10 | |||||||||
Distributions to member | (414) | (268) | |||||||||
Contributions from member | 560 | 359 | |||||||||
Other financing activities | (8) | (8) | |||||||||
Net cash flows provided by financing activities | 466 | 242 | |||||||||
Decrease in cash, restricted cash, and cash equivalents | (48) | (95) | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 160 | 181 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 112 | $ | 86 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (41) | $ | (24) | |||||||
See the Combined Notes to Consolidated Financial Statements
37
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 61 | $ | 111 | |||||||
Restricted cash and cash equivalents | 42 | 39 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 617 | 611 | |||||||||
Customer allowance for credit losses | (93) | (86) | |||||||||
Customer accounts receivable, net | 524 | 525 | |||||||||
Other accounts receivable | 286 | 260 | |||||||||
Other allowance for credit losses | (38) | (33) | |||||||||
Other accounts receivable, net | 248 | 227 | |||||||||
Receivables from affiliates | 1 | 8 | |||||||||
Inventories, net | |||||||||||
Fossil fuel | 5 | 6 | |||||||||
Materials and supplies | 196 | 198 | |||||||||
Regulatory assets | 431 | 440 | |||||||||
Other | 77 | 45 | |||||||||
Total current assets | 1,585 | 1,599 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,827 and $1,811 as of June 30, 2021 and December 31, 2020, respectively) | 15,927 | 15,377 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 1,898 | 1,933 | |||||||||
Investments | 145 | 140 | |||||||||
Goodwill | 4,005 | 4,005 | |||||||||
Prepaid pension asset | 370 | 365 | |||||||||
Deferred income taxes | 10 | 10 | |||||||||
Other | 295 | 307 | |||||||||
Total deferred debits and other assets | 6,723 | 6,760 | |||||||||
Total assets(a) | $ | 24,235 | $ | 23,736 |
See the Combined Notes to Consolidated Financial Statements
38
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND MEMBER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 332 | $ | 368 | |||||||
Long-term debt due within one year | 300 | 347 | |||||||||
Accounts payable | 517 | 539 | |||||||||
Accrued expenses | 246 | 299 | |||||||||
Payables to affiliates | 75 | 104 | |||||||||
Borrowings from Exelon intercompany money pool | 9 | 21 | |||||||||
Customer deposits | 89 | 106 | |||||||||
Regulatory liabilities | 123 | 137 | |||||||||
Unamortized energy contract liabilities | 92 | 92 | |||||||||
Other | 131 | 141 | |||||||||
Total current liabilities | 1,914 | 2,154 | |||||||||
Long-term debt | 7,069 | 6,659 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 2,541 | 2,439 | |||||||||
Asset retirement obligations | 59 | 59 | |||||||||
Non-pension postretirement benefit obligations | 75 | 86 | |||||||||
Regulatory liabilities | 1,338 | 1,438 | |||||||||
Unamortized energy contract liabilities | 190 | 235 | |||||||||
Other | 590 | 622 | |||||||||
Total deferred credits and other liabilities | 4,793 | 4,879 | |||||||||
Total liabilities(a) | 13,776 | 13,692 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Member's equity | |||||||||||
Membership interest | 10,672 | 10,112 | |||||||||
Undistributed losses | (213) | (68) | |||||||||
Total member's equity | 10,459 | 10,044 | |||||||||
Total liabilities and member's equity | $ | 24,235 | $ | 23,736 |
__________
(a)PHI’s consolidated total assets include $16 million and $18 million at June 30, 2021 and December 31, 2020, respectively, of PHI's consolidated VIE that can only be used to settle the liabilities of the VIE. PHI’s consolidated total liabilities include $15 million and $26 million at June 30, 2021 and December 31, 2020, respectively, of PHI's consolidated VIE for which the VIE creditors do not have recourse to PHI. See Note 17 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
39
PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||
(In millions) | Membership Interest | Undistributed (Losses)/Earnings | Total Member's Equity | ||||||||||||||||||||
Balance, December 31, 2020 | $ | 10,112 | $ | (68) | $ | 10,044 | |||||||||||||||||
Net income | — | 128 | 128 | ||||||||||||||||||||
Distributions to member | — | (81) | (81) | ||||||||||||||||||||
Contributions from member | 560 | — | 560 | ||||||||||||||||||||
Balance, March 31, 2021 | $ | 10,672 | $ | (21) | $ | 10,651 | |||||||||||||||||
Net income | — | 141 | 141 | ||||||||||||||||||||
Distributions to member | — | (333) | (333) | ||||||||||||||||||||
Balance, June 30, 2021 | $ | 10,672 | $ | (213) | $ | 10,459 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
(In millions) | Membership Interest | Undistributed (Losses)/Earnings | Total Member's Equity | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 9,618 | $ | (10) | $ | 9,608 | |||||||||||||||||
Net income | — | 108 | 108 | ||||||||||||||||||||
Distributions to member | — | (134) | (134) | ||||||||||||||||||||
Contributions from member | 144 | — | 144 | ||||||||||||||||||||
Balance, March 31, 2020 | $ | 9,762 | $ | (36) | $ | 9,726 | |||||||||||||||||
Net income | — | 94 | 94 | ||||||||||||||||||||
Distributions to member | — | (134) | (134) | ||||||||||||||||||||
Contributions from member | 215 | — | 215 | ||||||||||||||||||||
Balance, June 30, 2020 | $ | 9,977 | $ | (76) | $ | 9,901 |
See the Combined Notes to Consolidated Financial Statements
40
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||
Operating revenues | |||||||||||||||||||||||||||||||||||
Electric operating revenues | $ | 503 | $ | 506 | $ | 1,027 | $ | 1,034 | |||||||||||||||||||||||||||
Revenues from alternative revenue programs | 19 | (13) | 46 | 2 | |||||||||||||||||||||||||||||||
Operating revenues from affiliates | 1 | 1 | 3 | 3 | |||||||||||||||||||||||||||||||
Total operating revenues | 523 | 494 | 1,076 | 1,039 | |||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||
Purchased power | 76 | 78 | 168 | 164 | |||||||||||||||||||||||||||||||
Purchased power from affiliate | 57 | 60 | 130 | 139 | |||||||||||||||||||||||||||||||
Operating and maintenance | 62 | 67 | 118 | 128 | |||||||||||||||||||||||||||||||
Operating and maintenance from affiliates | 51 | 52 | 103 | 103 | |||||||||||||||||||||||||||||||
Depreciation and amortization | 96 | 92 | 199 | 186 | |||||||||||||||||||||||||||||||
Taxes other than income taxes | 87 | 87 | 177 | 179 | |||||||||||||||||||||||||||||||
Total operating expenses | 429 | 436 | 895 | 899 | |||||||||||||||||||||||||||||||
Operating income | 94 | 58 | 181 | 140 | |||||||||||||||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||||||||||||||
Interest expense, net | (35) | (34) | (69) | (68) | |||||||||||||||||||||||||||||||
Other, net | 13 | 9 | 25 | 18 | |||||||||||||||||||||||||||||||
Total other income and (deductions) | (22) | (25) | (44) | (50) | |||||||||||||||||||||||||||||||
Income before income taxes | 72 | 33 | 137 | 90 | |||||||||||||||||||||||||||||||
Income taxes | (3) | (24) | 3 | (19) | |||||||||||||||||||||||||||||||
Net income | $ | 75 | $ | 57 | $ | 134 | $ | 109 | |||||||||||||||||||||||||||
Comprehensive income | $ | 75 | $ | 57 | $ | 134 | $ | 109 |
See the Combined Notes to Consolidated Financial Statements
41
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 134 | $ | 109 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 199 | 186 | |||||||||
Deferred income taxes and amortization of investment tax credits | 10 | (22) | |||||||||
Other non-cash operating activities | (43) | 11 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (23) | (45) | |||||||||
Receivables from and payables to affiliates, net | (11) | (22) | |||||||||
Inventories | 1 | 3 | |||||||||
Accounts payable and accrued expenses | (26) | 11 | |||||||||
Income taxes | (20) | (18) | |||||||||
Pension and non-pension postretirement benefit contributions | (7) | (6) | |||||||||
Other assets and liabilities | (79) | (52) | |||||||||
Net cash flows provided by operating activities | 135 | 155 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (439) | (324) | |||||||||
Other investing activities | (2) | (3) | |||||||||
Net cash flows used in investing activities | (441) | (327) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | 119 | (68) | |||||||||
Issuance of long-term debt | 150 | 150 | |||||||||
Retirement of long-term debt | 0 | (1) | |||||||||
Changes in PHI intercompany money pool | 9 | 50 | |||||||||
Dividends paid on common stock | (123) | (101) | |||||||||
Contributions from parent | 138 | 137 | |||||||||
Other financing activities | (2) | (6) | |||||||||
Net cash flows provided by financing activities | 291 | 161 | |||||||||
Decrease in cash, restricted cash, and cash equivalents | (15) | (11) | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 65 | 63 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 50 | $ | 52 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (15) | $ | (28) | |||||||
See the Combined Notes to Consolidated Financial Statements
42
POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 17 | $ | 30 | |||||||
Restricted cash and cash equivalents | 33 | 35 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 290 | 279 | |||||||||
Customer allowance for credit losses | (38) | (32) | |||||||||
Customer accounts receivable, net | 252 | 247 | |||||||||
Other accounts receivable | 155 | 131 | |||||||||
Other allowance for credit losses | (16) | (13) | |||||||||
Other accounts receivable, net | 139 | 118 | |||||||||
Receivables from affiliates | 0 | 2 | |||||||||
Inventories, net | 110 | 111 | |||||||||
Regulatory assets | 215 | 214 | |||||||||
Other | 13 | 13 | |||||||||
Total current assets | 779 | 770 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,782 and $3,697 as of June 30, 2021 and December 31, 2020, respectively) | 7,771 | 7,456 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 571 | 570 | |||||||||
Investments | 118 | 115 | |||||||||
Prepaid pension asset | 282 | 284 | |||||||||
Other | 67 | 69 | |||||||||
Total deferred debits and other assets | 1,038 | 1,038 | |||||||||
Total assets | $ | 9,588 | $ | 9,264 |
See the Combined Notes to Consolidated Financial Statements
43
POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 154 | $ | 35 | |||||||
Long-term debt due within one year | 204 | 3 | |||||||||
Accounts payable | 215 | 226 | |||||||||
Accrued expenses | 123 | 164 | |||||||||
Payables to affiliates | 42 | 55 | |||||||||
Borrowings from PHI intercompany money pool | 9 | 0 | |||||||||
Customer deposits | 41 | 51 | |||||||||
Regulatory liabilities | 38 | 46 | |||||||||
Merger related obligation | 29 | 33 | |||||||||
Current portion of DC PLUG obligation | 30 | 30 | |||||||||
Other | 29 | 31 | |||||||||
Total current liabilities | 914 | 674 | |||||||||
Long-term debt | 3,114 | 3,162 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 1,244 | 1,189 | |||||||||
Asset retirement obligations | 39 | 39 | |||||||||
Non-pension postretirement benefit obligations | 7 | 13 | |||||||||
Regulatory liabilities | 599 | 644 | |||||||||
Other | 319 | 340 | |||||||||
Total deferred credits and other liabilities | 2,208 | 2,225 | |||||||||
Total liabilities | 6,236 | 6,061 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholder's equity | |||||||||||
Common stock | 2,196 | 2,058 | |||||||||
Retained earnings | 1,156 | 1,145 | |||||||||
Total shareholder's equity | 3,352 | 3,203 | |||||||||
Total liabilities and shareholder's equity | $ | 9,588 | $ | 9,264 |
See the Combined Notes to Consolidated Financial Statements
44
POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2020 | $ | 2,058 | $ | 1,145 | $ | 3,203 | |||||||||||||||||
Net income | — | 59 | 59 | ||||||||||||||||||||
Common stock dividends | — | (28) | (28) | ||||||||||||||||||||
Contributions from parent | 138 | — | 138 | ||||||||||||||||||||
Balance, March 31, 2021 | $ | 2,196 | $ | 1,176 | $ | 3,372 | |||||||||||||||||
Net income | — | 75 | 75 | ||||||||||||||||||||
Common stock dividends | — | (95) | (95) | ||||||||||||||||||||
Balance, June 30, 2021 | $ | 2,196 | $ | 1,156 | $ | 3,352 | |||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 1,796 | $ | 1,111 | $ | 2,907 | |||||||||||||||||
Net income | — | 52 | 52 | ||||||||||||||||||||
Common stock dividends | — | (28) | (28) | ||||||||||||||||||||
Contributions from parent | 137 | — | 137 | ||||||||||||||||||||
Balance, March 31, 2020 | $ | 1,933 | $ | 1,135 | $ | 3,068 | |||||||||||||||||
Net income | — | 57 | 57 | ||||||||||||||||||||
Common stock dividends | — | (73) | (73) | ||||||||||||||||||||
Balance, June 30, 2020 | $ | 1,933 | $ | 1,119 | $ | 3,052 | |||||||||||||||||
See the Combined Notes to Consolidated Financial Statements
45
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 262 | $ | 260 | $ | 562 | $ | 543 | |||||||||||||||
Natural gas operating revenues | 24 | 30 | 95 | 94 | |||||||||||||||||||
Revenues from alternative revenue programs | 10 | (25) | 19 | (24) | |||||||||||||||||||
Operating revenues from affiliates | 2 | 2 | 4 | 4 | |||||||||||||||||||
Total operating revenues | 298 | 267 | 680 | 617 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 82 | 80 | 185 | 169 | |||||||||||||||||||
Purchased fuel | 9 | 11 | 41 | 42 | |||||||||||||||||||
Purchased power from affiliates | 17 | 16 | 37 | 38 | |||||||||||||||||||
Operating and maintenance | 41 | 54 | 85 | 97 | |||||||||||||||||||
Operating and maintenance from affiliates | 39 | 38 | 79 | 75 | |||||||||||||||||||
Depreciation and amortization | 51 | 47 | 104 | 94 | |||||||||||||||||||
Taxes other than income taxes | 16 | 17 | 33 | 32 | |||||||||||||||||||
Total operating expenses | 255 | 263 | 564 | 547 | |||||||||||||||||||
Operating income | 43 | 4 | 116 | 70 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (16) | (15) | (30) | (31) | |||||||||||||||||||
Other, net | 4 | 2 | 6 | 5 | |||||||||||||||||||
Total other income and (deductions) | (12) | (13) | (24) | (26) | |||||||||||||||||||
Income (loss) before income taxes | 31 | (9) | 92 | 44 | |||||||||||||||||||
Income taxes | 1 | (28) | 6 | (20) | |||||||||||||||||||
Net income | $ | 30 | $ | 19 | $ | 86 | $ | 64 | |||||||||||||||
Comprehensive income | $ | 30 | $ | 19 | $ | 86 | $ | 64 |
See the Combined Notes to Consolidated Financial Statements
46
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 86 | $ | 64 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 104 | 94 | |||||||||
Deferred income taxes and amortization of investment tax credits | 4 | (19) | |||||||||
Other non-cash operating activities | (12) | 40 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 24 | 6 | |||||||||
Receivables from and payables to affiliates, net | (12) | (2) | |||||||||
Accounts payable and accrued expenses | 7 | 3 | |||||||||
Income taxes | 14 | (12) | |||||||||
Other assets and liabilities | (22) | (21) | |||||||||
Net cash flows provided by operating activities | 193 | 153 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (211) | (184) | |||||||||
Changes in PHI intercompany money pool | (9) | (55) | |||||||||
Other investing activities | 1 | (3) | |||||||||
Net cash flows used in investing activities | (219) | (242) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (146) | (56) | |||||||||
Issuance of long-term debt | 125 | 100 | |||||||||
Retirement of long-term debt | 0 | (1) | |||||||||
Dividends paid on common stock | (63) | (66) | |||||||||
Contributions from parent | 120 | 106 | |||||||||
Other financing activities | (3) | (1) | |||||||||
Net cash flows provided by financing activities | 33 | 82 | |||||||||
Increase (decrease) in cash, restricted cash, and cash equivalents | 7 | (7) | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 15 | 13 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 22 | $ | 6 | |||||||
Supplemental cash flow information | |||||||||||
Decrease in capital expenditures not paid | $ | (14) | $ | (4) | |||||||
See the Combined Notes to Consolidated Financial Statements
47
DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 17 | $ | 15 | |||||||
Restricted cash and cash equivalents | 5 | 0 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 139 | 176 | |||||||||
Customer allowance for credit losses | (19) | (22) | |||||||||
Customer accounts receivable, net | 120 | 154 | |||||||||
Other accounts receivable | 62 | 68 | |||||||||
Other allowance for credit losses | (9) | (9) | |||||||||
Other accounts receivable, net | 53 | 59 | |||||||||
Receivables from affiliates | 0 | 1 | |||||||||
Receivable from PHI intercompany pool | 9 | 0 | |||||||||
Inventories, net | |||||||||||
Fossil fuel | 5 | 6 | |||||||||
Materials and supplies | 52 | 51 | |||||||||
Prepaid utility taxes | 0 | 11 | |||||||||
Regulatory assets | 70 | 58 | |||||||||
Renewable energy credits | 18 | 10 | |||||||||
Other | 3 | 3 | |||||||||
Total current assets | 352 | 368 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,571 and $1,533 as of June 30, 2021 and December 31, 2020, respectively) | 4,425 | 4,314 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 223 | 222 | |||||||||
Goodwill | 8 | 8 | |||||||||
Prepaid pension asset | 159 | 162 | |||||||||
Other | 62 | 66 | |||||||||
Total deferred debits and other assets | 452 | 458 | |||||||||
Total assets | $ | 5,229 | $ | 5,140 |
See the Combined Notes to Consolidated Financial Statements
48
DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 0 | $ | 146 | |||||||
Long-term debt due within one year | 82 | 82 | |||||||||
Accounts payable | 125 | 126 | |||||||||
Accrued expenses | 40 | 46 | |||||||||
Payables to affiliates | 23 | 36 | |||||||||
Customer deposits | 28 | 32 | |||||||||
Regulatory liabilities | 46 | 47 | |||||||||
Other | 14 | 20 | |||||||||
Total current liabilities | 358 | 535 | |||||||||
Long-term debt | 1,722 | 1,595 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 745 | 715 | |||||||||
Asset retirement obligations | 14 | 14 | |||||||||
Non-pension postretirement benefits obligations | 13 | 15 | |||||||||
Regulatory liabilities | 462 | 493 | |||||||||
Other | 96 | 97 | |||||||||
Total deferred credits and other liabilities | 1,330 | 1,334 | |||||||||
Total liabilities | 3,410 | 3,464 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholder's equity | |||||||||||
Common stock | 1,209 | 1,089 | |||||||||
Retained earnings | 610 | 587 | |||||||||
Total shareholder's equity | 1,819 | 1,676 | |||||||||
Total liabilities and shareholder's equity | $ | 5,229 | $ | 5,140 |
See the Combined Notes to Consolidated Financial Statements
49
DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2020 | $ | 1,089 | $ | 587 | $ | 1,676 | |||||||||||||||||
Net income | — | 56 | 56 | ||||||||||||||||||||
Common stock dividends | — | (40) | (40) | ||||||||||||||||||||
Contributions from parent | 120 | — | 120 | ||||||||||||||||||||
Balance, March 31, 2021 | $ | 1,209 | $ | 603 | $ | 1,812 | |||||||||||||||||
Net income | — | 30 | 30 | ||||||||||||||||||||
Common stock dividends | — | (23) | (23) | ||||||||||||||||||||
Balance, June 30, 2021 | $ | 1,209 | $ | 610 | $ | 1,819 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 977 | $ | 603 | $ | 1,580 | |||||||||||||||||
Net income | — | 45 | 45 | ||||||||||||||||||||
Common stock dividends | — | (52) | (52) | ||||||||||||||||||||
Contributions from parent | 6 | — | 6 | ||||||||||||||||||||
Balance, March 31, 2020 | $ | 983 | $ | 596 | $ | 1,579 | |||||||||||||||||
Net income | — | 19 | 19 | ||||||||||||||||||||
Common stock dividends | — | (14) | (14) | ||||||||||||||||||||
Contributions from parent | 100 | — | 100 | ||||||||||||||||||||
Balance, June 30, 2020 | $ | 1,083 | $ | 601 | $ | 1,684 |
See the Combined Notes to Consolidated Financial Statements
50
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Electric operating revenues | $ | 306 | $ | 281 | $ | 605 | $ | 556 | |||||||||||||||
Revenues from alternative revenue programs | 12 | (26) | 23 | (25) | |||||||||||||||||||
Operating revenues from affiliates | 1 | 1 | 1 | 1 | |||||||||||||||||||
Total operating revenues | 319 | 256 | 629 | 532 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Purchased power | 149 | 128 | 302 | 254 | |||||||||||||||||||
Purchased power from affiliate | 5 | 2 | 9 | 5 | |||||||||||||||||||
Operating and maintenance | 39 | 48 | 82 | 94 | |||||||||||||||||||
Operating and maintenance from affiliates | 34 | 34 | 68 | 66 | |||||||||||||||||||
Depreciation and amortization | 40 | 44 | 87 | 86 | |||||||||||||||||||
Taxes other than income taxes | 2 | 2 | 4 | 4 | |||||||||||||||||||
Total operating expenses | 269 | 258 | 552 | 509 | |||||||||||||||||||
Gain on sale of assets | 0 | 0 | 0 | 2 | |||||||||||||||||||
Operating income (loss) | 50 | (2) | 77 | 25 | |||||||||||||||||||
Other income and (deductions) | |||||||||||||||||||||||
Interest expense, net | (14) | (15) | (29) | (29) | |||||||||||||||||||
Other, net | 0 | 2 | 2 | 3 | |||||||||||||||||||
Total other income and (deductions) | (14) | (13) | (27) | (26) | |||||||||||||||||||
Income (loss) before income taxes | 36 | (15) | 50 | (1) | |||||||||||||||||||
Income taxes | (1) | (33) | (1) | (32) | |||||||||||||||||||
Net income | $ | 37 | $ | 18 | $ | 51 | $ | 31 | |||||||||||||||
Comprehensive income | $ | 37 | $ | 18 | $ | 51 | $ | 31 |
See the Combined Notes to Consolidated Financial Statements
51
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 51 | $ | 31 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation and amortization | 87 | 86 | |||||||||
Deferred income taxes and amortization of investment tax credits | (2) | (30) | |||||||||
Other non-cash operating activities | (14) | 34 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (30) | (23) | |||||||||
Receivables from and payables to affiliates, net | 4 | 9 | |||||||||
Inventories | 2 | 2 | |||||||||
Accounts payable and accrued expenses | (2) | 17 | |||||||||
Income taxes | 2 | 2 | |||||||||
Pension and non-pension postretirement benefit contributions | (3) | (2) | |||||||||
Other assets and liabilities | (25) | (68) | |||||||||
Net cash flows provided by operating activities | 70 | 58 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (239) | (178) | |||||||||
Other investing activities | 0 | 5 | |||||||||
Net cash flows used in investing activities | (239) | (173) | |||||||||
Cash flows from financing activities | |||||||||||
Changes in short-term borrowings | (9) | (65) | |||||||||
Issuance of long-term debt | 350 | 123 | |||||||||
Retirement of long-term debt | (249) | (34) | |||||||||
Changes in PHI intercompany money pool | 0 | 5 | |||||||||
Dividends paid on common stock | (229) | (35) | |||||||||
Contributions from parent | 303 | 116 | |||||||||
Other financing activities | (4) | (1) | |||||||||
Net cash flows provided by financing activities | 162 | 109 | |||||||||
Decrease in cash, restricted cash, and cash equivalents | (7) | (6) | |||||||||
Cash, restricted cash, and cash equivalents at beginning of period | 30 | 28 | |||||||||
Cash, restricted cash, and cash equivalents at end of period | $ | 23 | $ | 22 | |||||||
Supplemental cash flow information | |||||||||||
(Decrease) increase in capital expenditures not paid | $ | (13) | $ | 7 | |||||||
See the Combined Notes to Consolidated Financial Statements
52
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 11 | $ | 17 | |||||||
Restricted cash and cash equivalents | 3 | 3 | |||||||||
Accounts receivable | |||||||||||
Customer accounts receivable | 188 | 156 | |||||||||
Customer allowance for credit losses | (36) | (32) | |||||||||
Customer accounts receivable, net | 152 | 124 | |||||||||
Other accounts receivable | 69 | 72 | |||||||||
Other allowance for credit losses | (13) | (11) | |||||||||
Other accounts receivable, net | 56 | 61 | |||||||||
Receivables from affiliates | 1 | 6 | |||||||||
Inventories, net | 35 | 37 | |||||||||
Prepaid utility taxes | 37 | 0 | |||||||||
Regulatory assets | 53 | 75 | |||||||||
Other | 5 | 3 | |||||||||
Total current assets | 353 | 326 | |||||||||
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,358 and $1,303 as of June 30, 2021 and December 31, 2020, respectively) | 3,614 | 3,475 | |||||||||
Deferred debits and other assets | |||||||||||
Regulatory assets | 422 | 395 | |||||||||
Prepaid pension asset | 35 | 40 | |||||||||
Other | 49 | 50 | |||||||||
Total deferred debits and other assets | 506 | 485 | |||||||||
Total assets(a) | $ | 4,473 | $ | 4,286 |
See the Combined Notes to Consolidated Financial Statements
53
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions) | June 30, 2021 | December 31, 2020 | |||||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings | $ | 178 | $ | 187 | |||||||
Long-term debt due within one year | 13 | 261 | |||||||||
Accounts payable | 170 | 177 | |||||||||
Accrued expenses | 38 | 46 | |||||||||
Payables to affiliates | 30 | 31 | |||||||||
Customer deposits | 20 | 23 | |||||||||
Regulatory liabilities | 39 | 44 | |||||||||
Other | 11 | 11 | |||||||||
Total current liabilities | 499 | 780 | |||||||||
Long-term debt | 1,502 | 1,152 | |||||||||
Deferred credits and other liabilities | |||||||||||
Deferred income taxes and unamortized investment tax credits | 643 | 624 | |||||||||
Non-pension postretirement benefit obligations | 14 | 17 | |||||||||
Regulatory liabilities | 252 | 274 | |||||||||
Other | 47 | 48 | |||||||||
Total deferred credits and other liabilities | 956 | 963 | |||||||||
Total liabilities(a) | 2,957 | 2,895 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Shareholder's equity | |||||||||||
Common stock | 1,574 | 1,271 | |||||||||
Retained (deficit) earnings | (58) | 120 | |||||||||
Total shareholder's equity | 1,516 | 1,391 | |||||||||
Total liabilities and shareholder's equity | $ | 4,473 | $ | 4,286 |
__________
(a)ACE’s consolidated total assets include $12 million and $13 million at June 30, 2021 and December 31, 2020, respectively, of ACE's consolidated VIE that can only be used to settle the liabilities of the VIE. ACE’s consolidated total liabilities include $11 million and $21 million at June 30, 2021 and December 31, 2020, respectively, of ACE's consolidated VIE for which the VIE creditors do not have recourse to ACE. See Note 17 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
54
ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Six Months Ended June 30, 2021 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings (Deficit) | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2020 | $ | 1,271 | $ | 120 | $ | 1,391 | |||||||||||||||||
Net income | — | 14 | 14 | ||||||||||||||||||||
Common stock dividends | — | (14) | (14) | ||||||||||||||||||||
Contributions from parent | 303 | — | 303 | ||||||||||||||||||||
Balance, March 31, 2021 | $ | 1,574 | $ | 120 | $ | 1,694 | |||||||||||||||||
Net income | — | 37 | 37 | ||||||||||||||||||||
Common stock dividends | — | (215) | (215) | ||||||||||||||||||||
Balance, June 30, 2021 | $ | 1,574 | $ | (58) | $ | 1,516 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
(In millions) | Common Stock | Retained Earnings | Total Shareholder's Equity | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 1,154 | $ | 122 | $ | 1,276 | |||||||||||||||||
Net income | — | 13 | 13 | ||||||||||||||||||||
Common stock dividends | — | (23) | (23) | ||||||||||||||||||||
Contributions from parent | 1 | — | 1 | ||||||||||||||||||||
Balance, March 31, 2020 | $ | 1,155 | $ | 112 | $ | 1,267 | |||||||||||||||||
Net income | — | 18 | 18 | ||||||||||||||||||||
Common stock dividends | — | (12) | (12) | ||||||||||||||||||||
Contributions from parent | 115 | — | 115 | ||||||||||||||||||||
Balance, June 30, 2020 | $ | 1,270 | $ | 118 | $ | 1,388 |
See the Combined Notes to Consolidated Financial Statements
55
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 (All Registrants)
Exelon is a utility services holding company engaged in the generation, delivery and marketing of energy through Generation and the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
Name of Registrant | Business | Service Territories | ||||||||||||
Exelon Generation Company, LLC | Generation, physical delivery and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy, and other energy-related products and services. | Five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions | ||||||||||||
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 (All Registrants)
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.
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, 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” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
The accompanying consolidated financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 are unaudited but, in the opinion of the management of each Registrant 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, except as otherwise
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)
Note 1 — Significant Accounting Policies
disclosed. The December 31, 2020 Consolidated Balance Sheets were derived from audited financial statements. 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, 2021. 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 statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
2. Mergers, Acquisitions, and Dispositions (Exelon and Generation)
CENG Put Option (Exelon and Generation)
Generation owns a 50.01% membership interest in CENG, a joint venture with EDF, which wholly owns the Calvert Cliffs and Ginna nuclear stations and Nine Mile Point Unit 1, in addition to an 82% undivided ownership interest in Nine Mile Point Unit 2. CENG is 100% consolidated in Exelon's and Generation's financial statements. See Note 17 — Variable Interest Entities for additional information.
On April 1, 2014, Generation and EDF entered into various agreements including a NOSA, an amended LLC Operating Agreement, an Employee Matters Agreement, and a Put Option Agreement, among others. Under the amended LLC Operating Agreement, CENG made a $400 million special distribution to EDF and committed to make preferred distributions to Generation until Generation has received aggregate distributions of $400 million plus a return of 8.50% per annum.
Under the terms of the Put Option Agreement, EDF has the option to sell its 49.99% equity interest in CENG to Generation exercisable beginning on January 1, 2016 and thereafter until June 30, 2022. The Put Option Agreement’s terms also provide that in the event the put closing has not been completed prior to the 18-month anniversary of the exercise date, EDF may withdraw its exercise notice. In the event of a withdrawal, EDF retains the right to exercise the put option until the later of June 30, 2022 and 18 months following the date of withdrawal, but in no event later than January 1, 2024. EDF is not entitled to this withdrawal right in the event it breaches any provision of the Put Option Agreement that results in the failure of the put to close on or before the 18-month anniversary of the exercise date.
The Put Option Agreement provides that the purchase price is to be determined by agreement of the parties, or absent such agreement, by a third-party arbitration process. The third parties determining fair market value of EDF’s 49.99% interest are to take into consideration all rights and obligations under the LLC Operating Agreement and Employee Matters Agreement including but not limited to Generation’s rights with respect to any unpaid aggregate preferred distributions and the related return. As of June 30, 2021, the total unpaid aggregate preferred distributions and related return owed to Generation is $645 million.
On November 20, 2019, Generation received notice of EDF’s intention to exercise the put option to sell its interest in CENG to Generation, and the put automatically exercised on January 19, 2020 at the end of the sixty-day advance notice period. At this time, Generation cannot reasonably predict the ultimate purchase price that will be paid to EDF for its interest in CENG. The transaction required approval by the FERC and the NYPSC, which approvals were received on July 30, 2020 and April 15, 2021, respectively. The sale process is currently expected to close in the second half of 2021. EDF has not exercised its right to withdraw the exercise of the put, which right became effective on July 19, 2021.
Agreement for Sale of Generation’s Solar Business (Exelon and Generation)
On December 8, 2020, Generation entered into an agreement with an affiliate of Brookfield Renewable, for the sale of a significant portion of Generation’s solar business, including 360 MW of generation in operation or under construction across more than 600 sites across the United States. Generation will retain certain solar assets not included in this agreement, primarily Antelope Valley.
Completion of the transaction contemplated by the sale agreement was subject to the satisfaction of several closing conditions which were satisfied in the first quarter of 2021. The sale was completed on March 31, 2021 for a purchase price of $810 million. Generation received cash proceeds of $675 million, net of $125 million long-term debt assumed by the buyer and certain working capital and other post-closing adjustments. Exelon and
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 2 — Mergers, Acquisitions, and Dispositions
Generation recognized a pre-tax gain of $68 million which is included in Gain on sales of assets and businesses in Exelon’s and Generation’s Consolidated Statements of Operations and Comprehensive Income.
See Note 17 — Debt and Credit Agreements of the Exelon 2020 Form 10-K for additional information on the SolGen nonrecourse debt included as part of the transaction.
Agreement for the Sale of a Generation Biomass Facility (Exelon and Generation)
On April 28, 2021, Generation and ReGenerate Energy Holdings, LLC (“ReGenerate”) entered into a purchase agreement, under which ReGenerate agreed to purchase Generation’s interest in the Albany Green Energy biomass facility. As a result, in the second quarter of 2021, Exelon and Generation recorded a pre-tax impairment charge of $140 million within Operating and maintenance expense in Exelon’s and Generation’s Consolidated Statements of Operations and Comprehensive Income. Completion of the transaction was subject to the satisfaction of various customary closing conditions which were satisfied in the second quarter of 2021. The sale was completed on June 30, 2021 for a net purchase price of $36 million.
3. Regulatory Matters (All Registrants)
As discussed in Note 3 — Regulatory Matters of the Exelon 2020 Form 10-K, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The following discusses developments in 2021 and updates to the 2020 Form 10-K.
Utility Regulatory Matters (Exelon, PHI, and the Utility Registrants)
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2021.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
Completed Distribution Base Rate Case Proceedings
Registrant/Jurisdiction | Filing Date | Service | Requested Revenue Requirement (Decrease) Increase | Approved Revenue Requirement (Decrease) Increase | Approved ROE | Approval Date | Rate Effective Date | |||||||||||||||||||||||||||||||||||||
ComEd - Illinois(a) | April 16, 2020 | Electric | $ | (11) | $ | (14) | 8.38 | % | December 9, 2020 | January 1, 2021 | ||||||||||||||||||||||||||||||||||
PECO - Pennsylvania | September 30, 2020 | Natural Gas | 69 | 29 | 10.24 | % | June 22, 2021 | July 1, 2021 | ||||||||||||||||||||||||||||||||||||
BGE - Maryland(b) | 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(c) | May 30, 2019 (amended June 1, 2020) | Electric | 136 | 109 | 9.275 | % | June 8, 2021 | July 1, 2021 | ||||||||||||||||||||||||||||||||||||
Pepco - Maryland(d) | October 26, 2020 (amended March 31, 2021) | Electric | 104 | 52 | 9.55 | % | June 28, 2021 | June 28, 2021 | ||||||||||||||||||||||||||||||||||||
ACE - New Jersey(e) | December 9, 2020 (amended February 26, 2021) | Electric | 67 | 41 | 9.60 | % | July 14, 2021 | January 1, 2022 |
__________
(a)ComEd's 2021 approved revenue requirement reflects an increase of $50 million for the initial year revenue requirement for 2021 and a decrease of $64 million related to the annual reconciliation for 2019. The revenue requirement for 2021 and the revenue requirement for 2019 provide for a weighted average debt and equity return on distribution rate base of 6.28%, inclusive of an allowed ROE of 8.38%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points.
(b)Reflects a three-year cumulative multi-year plan for 2021 through 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 million, $11 million, and $10 million, before offsets, in 2021, 2022, and 2023, respectively. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 2023. However, the MDPSC only utilized the tax benefits to fully offset the increases in 2021 such that customer rates will remain unchanged from 2020 to 2021. The MDPSC has deferred a decision on whether to use certain tax benefits to offset the customer rate increases in 2022 and 2023 and BGE cannot predict the outcome.
(c)Reflects a cumulative multi-year plan with 18-months remaining in 2021 through 2022. The DCPSC awarded Pepco electric incremental revenue requirement increases of $42 million and $67 million, before offsets, for the remainder of 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 million for the remainder of 2021 and 2022, respectively.
(d)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. The MDPSC has deferred decision on whether to use additional tax benefits to offset customer rate increases for periods after March 31, 2022 and Pepco cannot predict the outcome.
(e)Requested and approved increases are before New Jersey sales and use tax. The order allows ACE to retain approximately $11 million of certain tax benefits which will result in a decrease to income tax expense within Exelon's, PHI's, and ACE's Consolidated Statements of Operations and Comprehensive Income in the third quarter of 2021.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
Pending Distribution Base Rate Case Proceedings
Registrant/Jurisdiction | Filing Date | Service | Requested Revenue Requirement Increase | Requested ROE | Expected Approval Timing | |||||||||||||||||||||||||||
ComEd - Illinois(a) | April 16, 2021 | Electric | $ | 51 | 7.36 | % | Fourth quarter of 2021 | |||||||||||||||||||||||||
PECO - Pennsylvania | March 30, 2021 | Electric | 246 | 10.95 | % | Fourth quarter of 2021 | ||||||||||||||||||||||||||
DPL - Delaware(b) | March 6, 2020 (amended February 2, 2021) | Electric | 23 | 10.3 | % | Third quarter of 2021 | ||||||||||||||||||||||||||
__________
(a)ComEd's 2022 requested revenue requirement reflects an increase of $40 million for the initial year revenue requirement for 2022 and an increase of $11 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 average monthly 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 average monthly yields for 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points.
(b)The rates went into effect on October 6, 2020, subject to refund.
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 additions (initial year revenue requirement). 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 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 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 2021, the following total increases/(decreases) were included in the Utility Registrants’ electric transmission formula rate updates:
Registrant(a) | Initial Revenue Requirement Increase (Decrease) | Annual Reconciliation Increase | Total Revenue Requirement Increase(b) | Allowed Return on Rate Base(c) | Allowed ROE(d) | |||||||||||||||||||||||||||
ComEd | $ | 33 | $ | 12 | $ | 45 | 8.20 | % | 11.50 | % | ||||||||||||||||||||||
PECO | (2) | 26 | 24 | 7.37 | % | 10.35 | % | |||||||||||||||||||||||||
BGE | 38 | 27 | 65 | 7.35 | % | 10.50 | % | |||||||||||||||||||||||||
Pepco | (9) | 21 | 12 | 7.68 | % | 10.50 | % | |||||||||||||||||||||||||
DPL | 19 | 33 | 52 | 7.20 | % | 10.50 | % | |||||||||||||||||||||||||
ACE | 27 | 24 | 51 | 7.45 | % | 10.50 | % |
__________
(a)All rates are effective June 1, 2021 - May 31, 2022, subject to review by interested parties pursuant to review protocols of each Utility Registrants' tariff.
(b)In 2020, ComEd, BGE, Pepco, DPL, and ACE's transmission revenue requirement included a one-time decrease in accordance with the April 24, 2020 settlement agreement related to excess deferred income taxes which now completed has resulted in an increase to the 2021 transmission revenue requirement. In 2020, PECO's transmission revenue requirement included a one-time decrease in accordance with the December 5, 2019 settlement agreement related to refunds which now completed has resulted in an increase to the 2021 transmission revenue requirement.
(c)Represents the weighted average debt and equity return on transmission rate bases.
(d)As part of the FERC-approved settlements of ComEd’s 2007 and PECO's 2017 rate cases, the rate of return on common equity is 11.50% and 10.35%, respectively, inclusive of a 50-basis-point incentive adder for being a member of a RTO, and
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
the common equity component of the ratio used to calculate the weighted average debt and equity return for the transmission formula rate is currently capped at 55% and 55.75%, respectively. As part of the FERC-approved settlement of the ROE complaint against BGE, Pepco, DPL, and ACE, the rate of return on common equity is 10.50%, inclusive of a 50-basis-point incentive adder for being a member of a RTO.
Other State Regulatory Matters
Illinois Regulatory Matters
Energy Efficiency Formula Rate (Exelon and ComEd). ComEd filed its annual energy efficiency formula rate update with the ICC on June 1, 2021. The filing establishes the revenue requirement used to set the rates that will take effect in January 2022 after the ICC’s review and approval. The requested revenue requirement update is based on a reconciliation of the 2020 actual costs plus projected 2022 expenditures.
Initial Revenue Requirement Increase | Annual Reconciliation Decrease | Total Revenue Requirement Increase | Requested Return on Rate Base(a) | Requested ROE | |||||||||||||||||||||||||
$ | 55 | $ | (1) | $ | 54 | 5.72 | % | 7.36 | % |
(a)The requested revenue requirement increase provides for a weighted average debt and equity return on the energy efficiency regulatory asset and 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. For the 2020 reconciliation year, the requested revenue requirement provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 6.26% inclusive of an allowed ROE of 8.46%, which includes an upward performance adjustment that increased the ROE. The performance adjustment can either increase or decrease the ROE based upon the achievement of energy efficiency savings goals.
Maryland Regulatory Matters
Maryland Order Directing the Distribution of Energy Assistance Funds (Exelon, BGE, PHI, Pepco, and DPL). On June 15, 2021, the MDPSC issued an order authorizing the disbursal of funds to utilities in accordance with Maryland COVID-19 relief legislation. Upon receipt, the funds are to be used to reduce or eliminate certain qualifying past-due residential customer receivables. Under this order, BGE, Pepco, and DPL received funds of $50 million, $12 million, and $8 million, respectively, in July 2021.
New Jersey Regulatory Matters
Advanced Metering Infrastructure Filing (Exelon, PHI, and ACE). On August 26, 2020, ACE filed an application with the NJBPU as was required seeking approval to deploy a smart energy network in alignment with New Jersey’s Energy Master Plan and Clean Energy Act. The proposal consisted of estimated costs totaling $220 million with deployment taking place over a 3-year implementation period from approximately 2021 to 2024 that involves the installation of an integrated system of smart meters for all customers accompanied by the requisite communications facilities and data management systems.
On July 14, 2021, the NJBPU approved the settlement filed by ACE and the third parties to the proceeding. The approved settlement addresses all material aspects of ACE's smart energy network deployment plan, including cost recovery of the investment costs, incremental O&M expenses, and the unrecovered balance of existing infrastructure through future distribution rates.
Regulatory Assets and Liabilities
The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2020, unless noted below. See Note 3 — Regulatory Matters of the Exelon 2020 Form 10-K for additional information on the specific regulatory assets and liabilities.
ComEd. Regulatory assets increased $116 million primarily due to an increase of $67 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset and $85 million in the Energy Efficiency Costs regulatory asset, partially offset by a decrease of $36 million in the renewable energy regulatory asset.
PECO. Regulatory assets increased $95 million primarily due to an increase of $81 million in the Deferred Income Taxes regulatory asset and $12 million in the Vacation Accrual regulatory asset. Regulatory liabilities
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
increased by $85 million primarily due to an increase of $96 million in the Nuclear Decommissioning regulatory liability partially offset by a $13 million decrease in the Electric Energy and Natural Gas Costs regulatory liability.
BGE. Regulatory liabilities decreased $109 million primarily due to a decrease of $111 million in the Deferred Income Taxes regulatory liability.
Pepco. Regulatory liabilities decreased $53 million primarily due to a decrease of $46 million in the Deferred Income Taxes regulatory liability and $14 million in the Transmission Formula Rate regulatory liability partially offset by an increase of $10 million in various regulatory liabilities as a result of the Pepco DC multi-year plan.
DPL. Regulatory liabilities decreased $32 million primarily due to a decrease of $26 million in the Deferred Income Taxes regulatory liability and $9 million in the Transmission Formula Rate regulatory liability.
ACE. Regulatory liabilities decreased $27 million primarily due to a decrease of $20 million in the Deferred Income Taxes regulatory liability and $6 million in the Transmission Formula Rate regulatory liability.
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 Exelon's and the Utility Registrant's 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.
Exelon | ComEd(a) | PECO | BGE(b) | PHI | Pepco(c) | DPL(c) | ACE | ||||||||||||||||||||||||||||||||||||||||
June 30, 2021 | $ | 48 | $ | 1 | $ | 0 | $ | 41 | $ | 6 | $ | 3 | $ | 3 | $ | 0 | |||||||||||||||||||||||||||||||
December 31, 2020 | 51 | (1) | 0 | 45 | 7 | 4 | 3 | 0 |
__________
(a)Reflects ComEd's unrecognized equity returns/(losses) earned/(incurred) for ratemaking purposes on its electric distribution formula rate regulatory assets.
(b)BGE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholders' investment on its AMI programs.
(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholders' investment on their respective AMI Programs and Energy Efficiency and Demand Response Programs. The earnings on energy efficiency are on Pepco DC and DPL DE programs only.
Generation Regulatory Matters (Exelon and Generation)
Impacts of the February 2021 Extreme Cold Weather Event and Texas-based Generating Assets Outages
Beginning on February 15, 2021, Generation’s Texas-based generating assets within the ERCOT market, specifically Colorado Bend II, Wolf Hollow II, and Handley, experienced outages as a result of extreme cold weather conditions. In addition, those weather conditions drove increased demand for service, dramatically increased wholesale power prices, and also increased gas prices in certain regions. In response to the high demand and significantly reduced total generation on the system, the PUCT directed ERCOT to use an administrative price cap of $9,000 per MWh during firm load shedding events.
The estimated impact to Exelon’s and Generation’s Net income for the six months ended June 30, 2021 arising from these market and weather conditions was a reduction of approximately $880 million. The estimated impact to Exelon's and Generation's Net income for the three months ended June 30, 2021 was not material. The ultimate impact to Exelon’s and Generation’s consolidated financial statements for the full year 2021 may be affected by a number of factors, including final settlement data, the impacts of customer and counterparty credit losses, any state or federal solutions to address the financial challenges caused by the event, and related litigation and contract disputes.
During February and March 2021, various parties with differing interests, including generators and retail providers, filed requests with the PUCT to void the PUCT’s orders setting prices at $9,000 per MWh during firm load shedding events. Other requests were made for the PUCT to enforce its order and reduce prices for 33 hours between February 18 and February 19 after firm load shedding ceased, and to cap ancillary services at $9,000 per MWh. On March 2, 2021, a third party filed a notice of appeal in the Court of Appeals for the Third
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
District of Texas challenging the validity of the PUCT’s actions. Generation intervened in that appeal and filed its initial brief on June 2, 2021. On April 19, 2021, Generation filed a declaratory action and request for judicial review of the PUCT’s orders setting prices at $9,000 per MWh in District Court of Travis County, Texas. Generation subsequently requested that the District Court of Travis County, Texas stay its proceeding pending action by the Court of Appeals in the third party proceeding. On May 17, 2021, Generation amended its petition for declaratory action and request for judicial review pending in the District Court of Travis County, Texas. Exelon and Generation cannot predict the outcome of these proceedings or the financial statement impact.
Due to these events, a number of ERCOT market participants experienced bankruptcies or defaulted on payments to ERCOT, resulting in approximately a $3.0 billion payment shortfall in collections, which is allocated to the remaining ERCOT market participants. As of June 30, 2021, Generation has recorded its portion of this obligation of approximately $17 million on a discounted basis, which is to be paid over a term of 83 years. ERCOT rules historically have limited recovery of default from market participants to $2.5 million per month market-wide. In February 2021, the PUCT gave ERCOT discretion to disregard those rules, but ERCOT has declined to exercise that discretion thus far. On March 8, 2021, a third party filed a notice of appeal in the Court of Appeals for the Third District of Texas challenging the validity of the PUCT's order to ERCOT in February 2021. Generation intervened in that appeal and filed its initial brief on July 7, 2021. On May 7, 2021, Generation filed a declaratory action and request for judicial review of the PUCT's order in the District Court of Travis County, Texas. Generation subsequently requested that the District Court of Travis County, Texas stay its proceeding pending action by the Court of Appeals in the third party proceeding. Exelon and Generation cannot predict the outcome of these proceedings or the financial statement impact. Additionally, several legislative proposals were introduced in the Texas legislature during February and March 2021 concerning the amount, timing and allocation of recovery of the $3.0 billion shortfall, as well as recovery of other costs associated with the PUCT's directive to set prices at $9,000 per MWh. Two of these proposals were enacted into law in June 2021 and establish financing mechanisms that ERCOT and certain market participants can utilize to fund amounts owed to ERCOT. Exelon and Generation are monitoring the implementation of the legislation, which could result in further adjustment to Generation's portion of the obligation.
In addition, other legislative proposals were introduced in the Texas legislature during February and March 2021 addressing cold-weather preparation for power plants and natural gas production and transportation infrastructure and the market structure for reliability services. The Texas legislature addressed these proposals by enacting a bill with a broad set of market reforms that, among other things, directed the PUCT to establish weatherization standards for electric generators within six months of enactment and gave the PUCT authority to impose administrative penalties if the new proposed standards, once adopted, are not met. On June 9, 2021, PUCT staff issued a request for comments regarding the conditions under which the PUCT should require the operation of electric generation facilities and Generation and other third parties responded on June 23, 2021. Exelon and Generation are monitoring and cannot predict the outcome of this proceeding, which could have a material adverse impact in Exelon’s and Generation’s consolidated financial statements. The legislation also directs the PUCT to evaluate whether additional ancillary services are needed for reliability in the ERCOT power region to provide adequate incentives for dispatchable generation. This evaluation is expected to be taken up by the PUCT later in 2021.
In February 2021, more than 70 local distribution companies (LDCs) and natural gas pipelines in multiple states throughout the mid-continent region, where Generation serves natural gas customers, issued operational flow orders (OFOs), curtailments or other limitations on natural gas transportation or use to manage the operational integrity of the applicable LDC or pipeline system. When in effect, gas transportation or use above these limitations is subject to significant penalties according to the applicable LDCs’ and natural gas pipelines’ tariffs. Gas transportation and supply in many states became restricted due to wells freezing and pipeline compression disruption, while demand was increasing due to the extreme cold temperatures, resulting in extremely high natural gas prices. Due to the extraordinary circumstances, many LDCs and natural gas pipelines have either voluntarily waived or have sought applicable regulatory approvals to waive the tariff penalties associated with the extreme weather event. During March 2021, three natural gas pipelines filed individual petitions with the FERC requesting approval to waive OFO penalties. Generation also filed motions in March 2021 to intervene and filed comments in support of these FERC waiver requests. On March 25, 2021, the FERC issued an order on one of the petitions approving a pipeline’s request for a limited waiver of penalties for February 15, 2021. On April 23, 2021, Generation and several other entities filed a request for rehearing and a complaint requesting that FERC expand the order to include additional days of the weather event in February, from February 16 through February 19, 2021. During April 2021, the FERC issued orders on the remaining petitions approving the requests to waive the penalties. During May 2021, an LDC filed a motion with the Kansas Corporation Commission (KCC)
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
requesting the KCC to grant a waiver from the tariff and allow the LDC to reduce the amounts assessed by permitting the removal of a multiplier from the penalty calculation. Exelon and Generation cannot predict the outcome of the pending FERC complaint proceeding, the KCC proceeding, or the determinations made by the LDCs and natural gas pipelines.
New Jersey Regulatory Matters
New Jersey Clean Energy Legislation. On May 23, 2018, New Jersey enacted legislation that established a ZEC program that provides compensation for nuclear plants that demonstrate to the NJBPU that they meet certain requirements, including that they make a significant contribution to air quality in the state and that their revenues are insufficient to cover their costs and risks. Under the legislation, the NJBPU will issue ZECs to qualifying nuclear power plants and the electric distribution utilities in New Jersey, including ACE, will be required to purchase those ZECs. On April 18, 2019, the NJBPU approved the award of ZECs to Salem 1 and Salem 2. Upon approval, Generation began recognizing revenue for the sale of New Jersey ZECs in the month they are generated. On March 19, 2021, a three-judge panel of the Superior Court of New Jersey Appellate Division unanimously affirmed the NJBPU’s April 2019 order awarding ZECs for the first eligibility period. On April 8, 2021, New Jersey Rate Counsel filed a notice asking the New Jersey Supreme Court to hear the appeal of the Superior Court’s order. On July 9, 2021, the New Jersey Supreme Court declined to hear the appeal. On October 1, 2020, PSEG and Generation filed applications seeking ZECs for the second eligibility period (June 2022 through May 2025). On April 27, 2021, the NJBPU approved the award of ZECs to Salem 1 and Salem 2 for the second eligibility period. On May 11, 2021, the New Jersey Rate Counsel appealed the April 27, 2021 decision to the Superior Court of New Jersey Appellate Division. Exelon and Generation cannot predict the outcome of this proceeding. See Note 7 — Early Plant Retirements for additional information related to Salem.
New England Regulatory Matters
Mystic Units 8 & 9 and Everett Marine Terminal Cost of Service Agreement. On March 29, 2018, Generation notified grid operator ISO-NE of its plans to early retire Mystic Units 8 and 9 absent regulatory reforms on June 1, 2022. On May 16, 2018, Generation made a filing with FERC to establish cost-of-service compensation and terms and conditions of service for Mystic Units 8 & 9 for the period between June 1, 2022 - May 31, 2024. On December 20, 2018, FERC issued an order accepting the cost of service compensation, reflecting a number of adjustments to the annual fixed revenue requirement and allowing for recovery of a substantial portion of the costs associated with the adjacent Everett Marine Terminal acquired by Generation in October 2018. Those adjustments were reflected in a compliance filing made on March 1, 2019. In the December 20, 2018 order, FERC also directed a paper hearing on ROE using a new methodology. On January 22, 2019, Exelon and several other parties filed requests for rehearing of certain findings in the order. On July 15, 2021, FERC issued an order establishing the ROE to be used in the cost of service agreement for Mystic 8 and 9 at 9.33%.
On July 17, 2020, FERC issued three orders, which together affirmed the recovery of key elements of Mystic's cost of service compensation, including recovery of costs associated with the operation of the Everett Marine Terminal. FERC directed a downward adjustment to the rate base for Mystic Units 8 and 9, the effect of which will be partially offset by elimination of a crediting mechanism for third party gas sales during the term of the cost of service agreement. In addition, several parties filed protests to a compliance filing by Generation on September 15, 2020, taking issue with how gross plant in-service was calculated, and Generation filed an answer to the protests on October 21, 2020. On December 21, 2020, FERC issued an order on rehearing of the three July 17, 2020 orders, clarifying several cost of service provisions. Several parties appealed the December 21, 2020 order to the U.S. Court of Appeals for the D.C. Circuit and that appeal was consolidated with appeals of orders issued December 20, 2018 and July 17, 2020 in the Mystic proceeding. The briefing schedule for the consolidated appeal has not yet been set.
On February 25, 2021, Mystic made its filing to comply with the December 21, 2020 order. On April 26, 2021, FERC rejected Mystic’s language and directed another compliance filing relating to the claw back provision language, which only applies if Mystic 8 and 9 were to continue operation after the conclusion of the cost-of-service period. FERC’s April 26, 2021 order also accepted in part and rejected in part Mystic’s September 15, 2020 compliance filing. It directed a further compliance filing in 60 days consistent with the information provided in Mystic’s October 21, 2020 answer to protests, which Mystic filed on June 2, 2021.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
On August 25, 2020, a group of New England generators filed a complaint against Generation seeking to extend the scope of the claw back provision in the cost-of-service agreement, whereby Generation would refund certain amounts recovered during the term of the cost of service if it returns to market afterwards. On April 15, 2021 FERC dismissed the complaint.
On February 16, 2021, Generation filed an unopposed motion to voluntarily dismiss an appeal filed with the U.S. Court of Appeals for the D.C. Circuit stemming from a June 2020 complaint filed with the FERC against ISO-NE over failures to follow its tariff in evaluating Mystic for transmission security for the 2024 to 2025 Capacity Commitment Period, which was granted on February 18, 2021.
See Note 7 — Early Plant Retirements for additional information on the impacts of Generation’s August 2020 decision to retire Mystic Units 8 & 9 upon expiration of the cost of service agreement.
Federal Regulatory Matters
PJM and NYISO MOPR Proceedings. PJM and NYISO capacity markets include a MOPR. If a resource is subjected to a MOPR, its offer is adjusted to effectively remove the revenues it receives through a state government-provided financial support program - resulting in a higher offer that may not clear the capacity market. Prior to December 19, 2019, the MOPR in PJM applied only to certain new gas-fired resources. Currently, the MOPR in NYISO applies only to certain resources in downstate New York.
For Generation’s facilities in PJM and NYISO that are currently receiving ZEC compensation, an expanded MOPR would require exclusion of ZEC compensation when bidding into future capacity auctions, resulting in an increased risk of these facilities not receiving capacity revenues in future auctions.
On December 19, 2019, FERC required PJM to broadly apply the MOPR to all new and existing resources including nuclear, renewables, demand response, energy efficiency, storage, and all resources owned by vertically-integrated utilities. This greatly expands the breadth and scope of PJM’s MOPR, which is effective as of PJM’s next capacity auction. While FERC included some limited exemptions, no exemptions were available to state-supported nuclear resources.
FERC provided no new mechanism for accommodating state-supported resources other than the existing FRR mechanism (under which an entire utility zone would be removed from PJM’s capacity auction along with sufficient resources to support the load in such zone). In response to FERC’s order, PJM submitted a compliance filing on March 18, 2020 wherein PJM proposed tariff language interpreting and implementing FERC's directives, and proposed a schedule for resuming capacity auctions that is contingent on the timing of FERC's action on the compliance filing.
On April 16, 2020, FERC issued an order largely denying most requests for rehearing of FERC's December 2019 order but granting a few clarifications that required an additional PJM compliance filing which PJM submitted on June 1, 2020.
On October 15, 2020, FERC issued an order denying requests for rehearing of its April 16, 2020 order and accepting PJM’s two compliance filings, subject to a further compliance filing to revise minor aspects of the proposed MOPR methodology. As part of that order, FERC also accepted PJM’s proposal to condense the schedule of activities leading up to the next capacity auction. A number of parties, including Exelon, have filed petitions for review of FERC's orders in this proceeding, which remain pending before the Court of Appeals for the District of Columbia Circuit.
In November 2020, PJM announced that it will conduct its next capacity auction beginning on May 19, 2021 and ending on May 25, 2021 and will post the results on June 2, 2021. PJM conducted the auction as scheduled and, because neither Illinois nor New Jersey implemented an FRR program in their PJM zones, the MOPR applied in the capacity auction to Generation's owned or jointly owned nuclear plants in those states receiving a benefit under the Illinois ZES, or the New Jersey ZEC program. The MOPR prevented Quad Cities from clearing in the capacity auction.
At the direction of the PJM Board of Managers, PJM and its stakeholders are considering MOPR reforms to ensure that the capacity market rules respect and accommodate state resource preferences such as the ZEC
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 3 — Regulatory Matters
programs which PJM filed at FERC on July 30, 2021. Exelon cannot predict whether or when such changes can be implemented.
On February 20, 2020, FERC issued an order rejecting requests to expand NYISO’s version of the MOPR (referred to as buyer-side mitigation rules) beyond its current limited applicability to certain resources in downstate. However, on October 14, 2020, two natural gas-fired generators in New York filed a complaint at FERC seeking to expand the MOPR in NYISO to apply to all resources, new and existing, across the entire NYISO market. Exelon is strenuously opposing expansion of FERC’s MOPR policies in the NYISO market. While it is too early in the proceeding to predict its outcome and there are significant differences between the NYISO and PJM markets that would justify a different result, if FERC follows its MOPR precedent in PJM and applies the MOPR in NYISO broadly as requested in the complaint, Generation’s facilities in NYISO that are receiving ZEC compensation may be at increased risk of not clearing the capacity auction.
If Generation’s state-supported nuclear plants in PJM or NYISO are subjected to the MOPR or equivalent without compensation under an FRR or similar program, it could have a material adverse impact on Exelon's and Generation's financial statements, which Exelon and Generation cannot reasonably estimate at this time.
Operating License Renewals
Conowingo Hydroelectric Project. On August 29, 2012, Generation submitted a hydroelectric license application to FERC for a new license for the Conowingo Hydroelectric Project (Conowingo). In connection with Generation’s efforts to obtain a water quality certification pursuant to Section 401 of the Clean Water Act (401 Certification) from MDE for Conowingo, Generation had been working with MDE and other stakeholders to resolve water quality licensing issues, including: (1) water quality, (2) fish habitat, and (3) sediment.
On April 27, 2018, MDE issued its 401 Certification for Conowingo. On October 29, 2019, Generation and MDE filed with FERC a Joint Offer of Settlement (Offer of Settlement) that would resolve all outstanding issues relating to the 401 Certification. Pursuant to the Offer of Settlement, the parties submitted Proposed License Articles to FERC to be incorporated by FERC into the new license in accordance with FERC’s discretionary authority under the Federal Power Act.
On March 19, 2021, FERC issued a new 50-year license for Conowingo, effective March 1, 2021. FERC adopted the Proposed License Articles into the new license only making modifications it deemed necessary to allow FERC to enforce the Proposed License Articles. Consistent with the Offer of Settlement, FERC found that MDE waived its 401 Certification. On April 19, 2021, a few environmental groups filed with FERC a petition for rehearing requesting that FERC reconsider the issuance of the new Conowingo license, which was denied by operation of law on May 20, 2021. On June 17, 2021, the petitioners appealed FERC’s ruling to the United States Court of Appeals. On July 15, 2021, FERC issued an order addressing the arguments raised on rehearing, affirming the determinations of its March 19, 2021 order. Generation cannot predict the outcome of this proceeding.
4. 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. Generation’s primary sources of revenue include competitive sales of power, natural gas, and other energy-related products and services. The Utility Registrants’ 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 Exelon 2020 Form 10-K for additional information regarding the primary sources of revenue for the Registrants.
Contract Balances (All Registrants)
Contract Assets
Generation records contract assets for the revenue recognized on the construction and installation of energy efficiency assets and new power generating facilities before Generation has an unconditional right to bill for and
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 4 — Revenue from Contracts with Customers
receive the consideration from the customer. These contract assets are subsequently reclassified to receivables when the right to payment becomes unconditional. Generation records contract assets and contract receivables within Other current assets and Customer accounts receivable, net, respectively, within Exelon’s and Generation’s Consolidated Balance Sheets.
The following table provides a rollforward of the contract assets reflected in Exelon's and Generation's Consolidated Balance Sheets for the three and six months ended June 30, 2021 and 2020. The Utility Registrants do not have any contract assets.
Exelon | Generation | |||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | 144 | $ | 144 | ||||||||||||||||||||||
Amounts reclassified to receivables | (16) | (16) | ||||||||||||||||||||||||
Revenues recognized | 13 | 13 | ||||||||||||||||||||||||
Amounts previously held-for-sale | 12 | 12 | ||||||||||||||||||||||||
Balance as of March 31, 2021 | 153 | 153 | ||||||||||||||||||||||||
Amounts reclassified to receivables | (12) | (12) | ||||||||||||||||||||||||
Revenues recognized | 9 | 9 | ||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | 150 | $ | 150 | ||||||||||||||||||||||
Exelon | Generation | |||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 174 | $ | 174 | ||||||||||||||||||||||
Amounts reclassified to receivables | (19) | (19) | ||||||||||||||||||||||||
Revenues recognized | 17 | 17 | ||||||||||||||||||||||||
Balance as of March 31, 2020 | 172 | 172 | ||||||||||||||||||||||||
Amounts reclassified to receivables | (26) | (26) | ||||||||||||||||||||||||
Revenues recognized | 13 | 13 | ||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | 159 | $ | 159 |
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 within Other current liabilities and Other noncurrent liabilities within the Registrants' Consolidated Balance Sheets.
For Generation, these contract liabilities primarily relate to upfront consideration received or due for equipment service plans, and the Illinois ZEC program that introduces a cap on the total consideration to be received by Generation.
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 with an unrelated owner and manager of communication infrastructure. The revenue attributable to this arrangement will be recognized 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, Generation's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheets for the three and six months ended June 30, 2021 and 2020. As of June 30, 2021 and December 31, 2020, ComEd's, PECO's, and BGE's contract liabilities were immaterial.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 4 — Revenue from Contracts with Customers
Exelon | Generation | PHI | Pepco | DPL | ACE | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | 151 | $ | 84 | $ | 118 | $ | 94 | $ | 12 | $ | 12 | ||||||||||||||||||||||||||
Consideration received or due | 20 | 31 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Revenues recognized | (27) | (64) | (2) | (2) | 0 | 0 | ||||||||||||||||||||||||||||||||
Amounts previously held-for-sale | 3 | 3 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | 147 | 54 | 116 | 92 | 12 | 12 | ||||||||||||||||||||||||||||||||
Consideration received or due | 17 | 39 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Revenues recognized | (32) | (68) | (3) | (1) | (1) | (1) | ||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | 132 | $ | 25 | $ | 113 | $ | 91 | $ | 11 | $ | 11 | ||||||||||||||||||||||||||
Exelon | Generation | PHI | Pepco | DPL | ACE | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 33 | $ | 71 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||
Consideration received or due | 20 | 55 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Revenues recognized | (24) | (70) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | 29 | 56 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Consideration received or due | 13 | 34 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Revenues recognized | (22) | (63) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | 20 | $ | 27 | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
The following table reflects revenues recognized in the three and six months ended June 30, 2021 and 2020, which were included in contract liabilities at December 31, 2020 and 2019, respectively:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Exelon | $ | 17 | $ | 14 | $ | 34 | $ | 23 | |||||||||||||||
Generation | 41 | 42 | 79 | 61 | |||||||||||||||||||
PHI | 3 | 0 | 5 | 0 | |||||||||||||||||||
Pepco | 1 | 0 | 3 | 0 | |||||||||||||||||||
DPL | 1 | 0 | 1 | 0 | |||||||||||||||||||
ACE | 1 | 0 | 1 | 0 |
Transaction Price Allocated to Remaining Performance Obligations (All Registrants)
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 June 30, 2021. 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 Generation's power and gas sales contracts as they contain variable volumes and/or variable pricing. This disclosure also 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.
2021 | 2022 | 2023 | 2024 | 2025 and thereafter | Total | ||||||||||||||||||||||||||||||
Exelon | $ | 149 | $ | 100 | $ | 46 | $ | 31 | $ | 180 | $ | 506 | |||||||||||||||||||||||
Generation | 223 | 146 | 54 | 29 | 94 | 546 | |||||||||||||||||||||||||||||
PHI | 5 | 8 | 8 | 6 | 86 | 113 | |||||||||||||||||||||||||||||
Pepco | 3 | 6 | 6 | 5 | 71 | 91 | |||||||||||||||||||||||||||||
DPL | 1 | 1 | 1 | 0 | 8 | 11 | |||||||||||||||||||||||||||||
ACE | 1 | 1 | 1 | 1 | 7 | 11 |
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollars in millions, except per share data, unless otherwise noted)
Note 4 — Revenue from Contracts with Customers
Revenue Disaggregation (All Registrants)
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 5 — Segment Information for the presentation of the Registrant's revenue disaggregation.
5. Segment Information (All Registrants)
Operating segments for each of the Registrants are determined based on information used by the CODM in deciding how to evaluate performance and allocate resources at each of the Registrants.
Exelon has 11 reportable segments, which include Generation's 5 reportable segments consisting of the Mid-Atlantic, Midwest, New York, ERCOT, and all other power regions referred to collectively as “Other Power Regions” and ComEd, PECO, BGE, and PHI's 3 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, ComEd, PECO, BGE, Pepco, DPL, and ACE's CODMs evaluate the performance of and allocate resources to ComEd, PECO, BGE, Pepco, DPL, and ACE based on net income.
The basis for Generation's reportable segments is the integrated management of its electricity business that is located in different geographic regions, and largely representative of the footprints of ISO/RTO and/or NERC regions, which utilize multiple supply sources to provide electricity through various distribution channels (wholesale and retail). Generation's hedging strategies and risk metrics are also aligned to these same geographic regions. Descriptions of each of Generation’s 5 reportable segments are as follows:
•Mid-Atlantic represents operations in the eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia, and parts of Pennsylvania and North Carolina.
•Midwest represents operations in the western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region.
•New York represents operations within NYISO.
•ERCOT represents operations within Electric Reliability Council of Texas.
•Other Power Regions:
•New England represents the operations within ISO-NE.
•South represents operations in the FRCC, MISO’s Southern Region, and the remaining portions of the SERC not included within MISO or PJM.
•West represents operations in the WECC, which includes California ISO.
•Canada represents operations across the entire country of Canada and includes AESO, OIESO, and the Canadian portion of MISO.
The CODMs for Exelon and Generation evaluate the performance of Generation’s electric business activities and allocate resources based on RNF. Generation believes that RNF is a useful measurement of operational performance. RNF 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. Generation’s operating revenues include all sales to third parties and affiliated sales to the Utility Registrants. Purchased power costs include all costs associated with the procurement and supply of electricity including capacity, energy, and ancillary services. Fuel expense includes the fuel costs for Generation’s owned generation and fuel costs associated with tolling agreements. The results of Generation's other business activities are not regularly reviewed by the CODM and are therefore not classified as operating segments or included in the regional reportable segment amounts. These activities include natural gas, as well as other miscellaneous business activities that are not significant to Generation's overall operating revenues or results of operations. Further,
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