NYSE: EXC
Exelon Corporation
A Utility Growth Story...
It's Not Easy Being Green
John W. Rowe, President and
Co-Chief Executive Officer
EEI Financial Conference, New Orleans
October 30, 2001
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FORWARD-LOOKING STATEMENTS
This presentation contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may vary materially from the
expectations contained herein. The forward-looking statements herein include
statements about future financial and operating results of Exelon. Economic,
business, competitive and/or regulatory factors affecting Exelon's businesses
generally could cause actual results to differ materially from those described
herein. For a discussion of the factors that could cause actual results to
differ materially, please see Exelon's filings with the Securities and Exchange
Commission, particularly those discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operations-- Outlook" in Exelon's
2000 Annual Report. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
presentation. Exelon does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of this presentation.
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Exelon's Earnings Drivers YTD
EPS of $3.46 (fully diluted) through Q3 01
Delivery Business:
$7.9 billion (67%) of YTD Revenue
$2.1 billion (78%) of YTD EBIT
$2.51 (73%) of YTD EPS
Generation Business:
$3.2 billion (27%) of YTD Revenue
$0.70 billion (26%) of YTD EBIT
$1.27 (37%) of YTD EPS
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Building a Solid Foundation
Completed one of the nation's largest utility mergers in under 13 months
On track to achieve 11% to 15% EPS growth in 2001 over pro forma 2000
On track to achieve $148 Million of merger cost savings in 2001
Year-To-Date nuclear capacity factor of 95%, on track to exceed year-end target
of 92%
Distribution reliability improved and costs under budget
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Exelon's Continued Commitment to Growth
Acquired 49.9% of Sithe (10,000 MWs, including under development) at a total
cost of $696 million.
Added approximately 200 MWs in 2001 through power up-rate projects. Expect to
add an additional 550 MWs through 2003 at an average cost well below that of new
generation.
Added 1,950 MW through long-term contracts at a capital equivalent cost of $768
million.
Expect to add an additional 800 MW plus the acquisition of the remaining 50.1%
of Sithe through 2004.
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Exelon's 2002 Earnings Outlook
2002 EPS Estimate of $4.45 to $4.85
Delivery 2002 EPS Estimate of $3.30 to $3.40 (weather normalized)
Generation 2002 EPS Estimate of $1.40 to $1.75 (weather normalized)
Enterprises, Consolidation and Corporate Estimate Loss of $0.25 to $0.30
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Exelon's Valuation
Relative P/E compared to Industry Average
P/E of 8.8X on midpoint of 2002 earnings range ($41.00 per share prices
@ 10/26/01).
Peer Group Average Multiple on 2002 EPS is 10-14X.
Exelon is undervalued
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Questions?
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Exelon Corporate Overview
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Key Assumptions 2002
2001P 2001LE 2002
------ ------ ------
Nuclear Capacity Factor 91.6% 93.8% 91.5%
Total GenCo Sales (GWh) 183,970 195,387 205,737
Total Delivery Sales (GWh) 125,500 123,461 124,749
Tot. Unreg. Retail Sales (GWh) 10,850 5,979 4,629
Volume Retention
PED 65% 81% 84%
CED 86% 92% 89%
ATC Price ($/MWh)
PJM $34 Combined $33.5 $29.2
MAIN $27.6 $26.3
Merger Synergies ($M) $135 $148 $225
P= Original Plan LE= Latest Estimate ATC= Around the Clock
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EPS Sensitivities: 2002
[This slide contains a bar graph chart which shows the effect on EPS of a
positive or negative change in each of three key assumptions.]
-/+ 1% Delivery Sales
PECO -$0.03 +$0.03
ComEd -$0.06 +$0.06
-/+ 1% Nuclear Cap Factor -$0.05 +$0.05
-/+ $1 Wholesale Mkt Price -$0.10 +$0.10
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Operating Cash Flow and
Capital Expenditures Estimate
[This slide shows a column chart indicating the relative level of CapEx, in
millions, to Operating Cash Flow, in millions, for each year, 2001 through
2004.]
Year CapEx Op Cash Flow
---- ---- ------------
2001 2400 3000
2002 2220 2850
2003 2360 3050
2004 2540 3400
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Exelon
Earnings per Share
2000 Pro Forma EPS vs. 2001 EPS
Quarter Ended YTD Period Ended
Pro Forma Pro Forma
2000 2001 2000 2001
------ ------ ------ -------
1Q 1.10 1.23 1.10 1.23
2Q 0.83 0.97 1.93 2.20
3Q 1.27 1.25 3.20 3.46
4Q 0.66 3.86
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Year to Date 2001
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EXELON [LOGO]
--------------------------------------------------------------------------------
News Release
From: Exelon Corporation FOR IMMEDIATE RELEASE
Corporate Communications ---------------------
P.O. Box 805379 October 23, 2001
Chicago, IL 60680-5379
Contact: Linda Marsicano
312.394.3099
Linda Byus, CFA
312.394.7696
Eunice Collins
312.394.8354
Exelon Reports Third Quarter Earnings of $1.25 Per Diluted Share
Chicago (October 23, 2001) Exelon Corporation today announced reported earnings
of $403 million or $1.25 per diluted share for the third quarter of 2001. The
reported $1.25 per diluted share exceeds the high end of our recent guidance due
to higher estimates for unbilled revenue than were used in developing the
guidance. Reported results include three non-recurring items that lowered
reported earnings by $0.16 per share. Exelon's reported earnings for the third
quarter of 2000 were $232 million or $1.35 per diluted share, which represent
the results of PECO Energy and do not reflect the effects of the October 20,
2000 merger with Unicom Corporation. On a pro forma basis assuming the merger of
PECO Energy and Unicom Corporation occurred on January 1, 2000, third quarter
2000 earnings were $1.27 per diluted share.
On September 27, Exelon lowered its 2001 earnings guidance to a range of $4.30
to $4.45 per diluted share down from the original $4.50. This guidance, which
remains our best judgment, represents reported earnings without adjustment for
any one-time items incurred during the year. The forecasted earnings range
represents an 11% to 15% increase over pro forma earnings for the year 2000 of
$3.86.
The company is in the process of finalizing its budget and earnings models for
2002. Our current outlook for 2002 is a range of $4.45 to $4.85 per diluted
share, which reflects the national economic slowdown and wholesale price
volatility.
Third Quarter Highlights:
Factors influencing third quarter results are as follows:
Page 2
o Energy sales by Exelon Generation totaled 54,342 GWhs, a 7% increase over
pro forma third quarter 2000 energy sales of 50,733 GWhs. Approximately 64%
of third quarter 2001 energy sales were to affiliates.
o Lower energy-market prices adversely affected Exelon Generation's Power
Team performance in the third quarter compared with expectations. Wholesale
margins realized were lower than originally incorporated in the third
quarter earnings outlook.
o Exelon Generation's nuclear fleet continues to operate above target with:
o 95.0% nuclear capacity factor for the third quarter
o 95.1% year-to-date through September 30
o Exelon Generation's fossil operations continue their strong performance
with:
o 98% on time delivery
o 94.3% dispatch availability
o ComEd continues to improve the reliability and efficiency of its delivery
operations in a summer in which two new all-time peaks were set. On August
9, ComEd set a new all-time peak load of 21,574 MW.
Non-recurring Items: Third quarter 2001 reported earnings of $1.25 per diluted
share include the effects of the following non-recurring charges:
o Employee severance costs of $31 million ($0.06 per share) related to
approximately 500 additional positions identified to be eliminated as a
result of the 2000 merger of PECO Energy and Unicom.
o A $36 million ($0.07 per share) writedown of its investment in Corvis, a
telecommunications equipment manufacturer.
o A $14 million ($0.03 per share) increase in reserves in conjunction with a
tentative settlement of litigation involving PECO Energy's decision not to
proceed with the proposed purchase of a minority interest in the River Bend
generating facility. The settlement should be finalized shortly.
Exelon's Co-CEO and Chairman, Corbin A. McNeill Jr., said that, "Demand and
prices did not materialize to the extent we planned this summer, and we learned
a good deal about how to prepare for next year. The market decline was
especially frustrating given the very strong operating performance in
Generation. Since the end of June, Exelon Nuclear completed another power uprate
project, two refuelings, and remained on track towards its all-in cost goal of 2
cents/kWh. In early August, during the one summer heat wave, every one of our
fossil plants ran flat out and was available for dispatch over 94% of the time."
John W. Rowe, Co-CEO and President, said, "In the first real test of the
infrastructure improvements we've been making for the past two years, the ComEd
distribution system performed superbly. The turn-around in performance is clear,
real and we intend to make it permanent. In the long run, it's our ability to
generate low-cost power and deliver it reliably that will be the basis for
Exelon's ability to deliver shareholder value."
Page 3
CORPORATE ISSUES
Third quarter earnings reflect goodwill amortization of $37 million or $0.12 per
share. Goodwill amortization is expected to total $151 million, or $0.47 per
share, in 2001. Consistent with the recently issued accounting standard for
goodwill, Exelon expects to discontinue amortization of goodwill, effective
January 1, 2002. Goodwill will be reviewed for impairment and possible
adjustment.
Merger-related synergies continue to be realized and Exelon expects to achieve
its target of $148 million this year.
BUSINESS UNIT RESULTS
Performance of Exelon's business segments--Energy Delivery, Generation and
Enterprises--is reported on the basis of earnings before interest and income
taxes (EBIT). Exelon's EBIT for the third quarter of 2001 was $931 million
compared to pro forma EBIT of $920 million in the third quarter of 2000.
Exelon Energy Delivery consists of the retail electricity transmission and
distribution operations of ComEd and PECO Energy and the natural gas
distribution business of PECO Energy. Energy Delivery's EBIT of $704 million in
the third quarter of 2001 compares to pro forma EBIT of $685 million in the
prior-year period. The segment benefited from increased deliveries to
residential customers during the quarter as a result of warmer summer weather
compared to last year, but experienced declines in deliveries to large
commercial and industrial customers as a result of a slowing economy.
Exelon Generation consists of Exelon's electric generation operations and power
marketing and trading functions. Generation's third quarter 2001 EBIT was $278
million, compared to pro forma EBIT of $300 million last year. Generation
experienced increased sales volumes and continued strong nuclear and fossil
station performance, but overall margins were adversely affected by lower
wholesale electricity market prices. Generation's third quarter 2001 EBIT
includes a $14 million charge for litigation settlement costs.
Exelon Enterprises consists of competitive retail energy sales, energy and
infrastructure services, communications and related investments. Enterprises'
EBIT for the third quarter of 2001 was a loss of $44 million compared to third
quarter 2000 pro forma loss of $67 million. The third quarter EBIT improvement
reflects improved margins and a reduction of operating expenses at Exelon
Energy. The third quarter 2001 results include the $36 million writedown of an
investment in Corvis.
Conference call information:
Exelon has scheduled a Third Quarter Earnings Conference Call for 3 PM EDT (2 PM
CDT) on October 23. The call in number in the US is 877/780-2271; the
international call in number is 973/872-3462. No password is required. Media
representatives are invited to participate on a listen- only basis. The call
will be audio web-cast and archived on Exelon's web site: www.exeloncorp.com.
(Please choose the Investor Relations page.)
Page 4
Telephone replays will be available after 4 PM on October 23 through October 31.
The U.S. call-in number is 877/519-4471; the international call-in number is
973/341-3080. The confirmation code is 2894650.
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may vary materially
from the expectations contained herein. The forward-looking statements herein
include statements about future financial and operating results of Exelon.
Economic, business, competitive and/or regulatory factors affecting Exelon's
businesses generally could cause actual results to differ materially from those
described herein. For a discussion of the factors that could cause actual
results to differ materially, please see Exelon's filings with the Securities
and Exchange Commission, particularly those factors discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Outlook" in Exelon's 2000 Annual Report. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this press release. Exelon does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this press release.
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately five million customers and more than $15 billion in annual
revenues. The company has one of the industry's largest portfolios of
electricity generation capacity, with a nationwide reach and strong positions in
the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately
five million customers in Illinois and Pennsylvania and gas to 425,000 customers
in the Philadelphia area. The company also has holdings in such competitive
businesses as energy, infrastructure services and energy services. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker EXC.
EXELON CORPORATION
Unaudited Income Statement
(in millions, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------- ----------------------------
2001 2000 (1) 2001 2000 (1)
----------- ----------- ------------- -----------
Operating Revenues $ 4,285 $ 1,629 $ 11,759 $ 4,366
Operating Expenses
Fuel and Purchased Power $ 1,731 $ 576 $ 4,271 $ 1,515
Operating and Maintenance 1,101 457 3,293 1,304
Depreciation and Amortization 369 83 1,109 244
Taxes Other Than Income 172 67 493 197
----------- ----------- ------------- -----------
Total Operating Expenses $ 3,373 $ 1,183 $ 9,166 $ 3,260
----------- ----------- ------------- -----------
Operating Income $ 912 $ 446 $ 2,593 $ 1,106
Other Income and Deductions
Interest Expense & Preferred Dividends (295) (118) (901) (348)
Other, net 54 46 180 78
Income Taxes (268) (141) (767) (316)
Extraordinary Item, Net of Income Taxes - (1) - (4)
Cumulative Effect of Change in Accounting
Principle, Net of Income Taxes - - 12 24
----------- ----------- ------------- -----------
Net Income $ 403 $ 232 $ 1,117 $ 540
=========== =========== ============= ===========
Average Common Shares Outstanding
Basic: 321 170 320 175
Diluted: 323 172 323 176
Earnings Per Common Share - Reported
Basic: $ 1.26 $ 1.37 $ 3.49 $ 3.09
=========== =========== ============= ===========
Diluted: $ 1.25 $ 1.35 $ 3.46 $ 3.07
=========== =========== ============= ===========
Nonrecurring Items included in
Diluted EPS - gains/(losses):
Litigation reserves $(0.03) $ - $ (0.03) $ -
Employee severance charge (0.06) - (0.06) -
Gains and losses on investments (0.07) - (0.02) -
Implementation of FAS 133 - - 0.04 -
Settlement of Transition Bond swap - - 0.01 -
Wholesale rate settlement - - 0.01 -
CTC prepayment - - 0.02 -
Cumulative effect of change in accounting
method for nuclear outages - - - 0.14
Premiums paid to reacquire debt - (0.01) - (0.02)
Merger costs - (0.04) - (0.12)
----------- ----------- ------------- -----------
Total Nonrecurring Items $(0.16) $(0.05) $ (0.03) $ -
=========== =========== ============= ===========
Earnings Per Common Share - Proforma for
merger as of 1/1/2000
Diluted: $ 1.27 $ 3.20
=========== ===========
<FN>
(1) Restated to reflect change in accounting method for nuclear outage costs.
</FN>
EXELON CORPORATION
Business Segment Results
(in millions)
Three Months Ended Nine Months Ended
September 30 September 30
-------------------------------------------------------------------------------------
Pro Forma Pro Forma
2001 2000 (1) 2000 (2) 2001 2000 (1) 2000 (2)
--------- ------------ ------------ ---------- ------------ -------------
Revenue
Energy Delivery $ 2,970 $ 877 $ 2,808 $ 7,903 $ 2,496 $ 7,351
Generation 2,291 927 2,067 5,537 2,087 4,703
Enterprises 529 283 468 1,742 801 1,225
Corporate/Intercompany Elimination (1,505) (458) (1,498) (3,423) (1,018) (3,246)
--------- ------------ ------------ ---------- ------------ ------------
Total Exelon $ 4,285 $ 1,629 $ 3,845 $ 11,759 $ 4,366 $ 10,033
========= ============ ============ ========== ============ ============
Earnings Before Interest and IncomeTaxes
Energy Delivery $ 704 $ 260 $ 685 $ 2,091 $ 856 $ 1,957
Generation 278 292 300 697 401 488
Enterprises (44) (55) (67) (80) (86) (110)
Corporate/Intercompany Elimination (7) (15) 2 (19) (23) (7)
--------- ------------ ------------ ---------- ------------ ------------
Total Exelon $ 931 $ 482 $ 920 $ 2,689 $ 1,148 $ 2,328
========= ============ ============ ========== ============ ============
<FN>
(1) Restated to reflect change in accounting method for nuclear outage costs.
(2) Pro forma 2000 data reflects operations as if the merger occurred on January
1, 2000.
</FN>
EXELON
Retail Electric Sales Statistics
For the Three Months Ended September 30
ComEd PECO
------------------------------------------- ---------------------------------------
MWH Deliveries 2001 2000 % Change 2001 2000 % Change
-------------- ------------- ---------- ------------ ------------ ------------
Residential 8,397,985 7,141,346 17.6% 3,164,661 3,011,238 5.1%
Small Commercial & Industrial 8,033,041 7,875,596 2.0% 2,089,306 1,955,308 6.9%
Large Commercial & Industrial 5,501,301 6,253,874 (12.0%) 4,083,355 4,154,974 (1.7%)
Public Authorities & Electric Railroads 2,346,693 2,301,035 2.0% 194,112 192,727 0.7%
-------------- ------------- ------------ ------------
Total Sales to Ultimate Customers 24,279,020 23,571,851 3.0% 9,531,434 9,314,247 2.3%
============== ============= ============ ============
Heating Degree Days 133 121 50 77
Cooling Degree Days 615 551 956 695
Revenue (in thousands) 2001 2000 % Change 2001 2000 % Change
---------------------- -------------- ------------- ---------- ------------ ------------ ------------
Residential $ 816,048 $ 708,107 15.2% $ 385,420 $367,017 5.0%
Small Commercial & Industrial 617,599 609,551 1.3% 241,906 162,601 48.8%
Large Commercial & Industrial 257,795 302,628 (14.8%) 288,793 204,390 41.3%
Public Authorities & Electric Railroads 133,576 130,687 2.2% 18,914 16,892 12.0%
-------------- ------------- ------------ ------------
Total Sales to Ultimate Customers $1,825,018 $1,750,973 4.2% $ 935,033 $750,900 24.5%
============== ============= ============ ============
Cents / kWh 2001 2000 % Change 2001 2000 % Change
----------- -------------- ------------- ---------- ------------ ------------ ------------
Residential $ 0.097 $ 0.099 (2.0%) $ 0.122 $ 0.122 0.0%
Small Commercial & Industrial $ 0.077 $ 0.077 0.0% $ 0.116 $ 0.083 39.8%
Large Commercial & Industrial $ 0.047 $ 0.048 (2.1%) $ 0.071 $ 0.049 44.9%
Public Authorities & Electric Railroad $ 0.057 $ 0.057 0.0% $ 0.097 $ 0.088 10.2%
Total Sales to Ultimate Customers $ 0.075 $ 0.074 1.4% $ 0.098 $ 0.081 21.0%
EXELON
Retail Electric Sales Statistics
For the Nine Months Ended September 30
ComEd PECO
---------------------------------------------- -----------------------------------------
MWH Deliveries 2001 2000 % Change 2001 2000 % Change
-------------- -------------- -------------- ------------ ------------- -------------- ----------
Residential 19,936,277 18,204,564 9.5% 8,671,808 8,472,099 2.4%
Small Commercial & Industrial 22,439,309 21,782,688 3.0% 5,818,577 5,589,735 4.1%
Large Commercial & Industrial 16,429,691 18,254,430 (10.0%) 11,707,138 11,952,613 (2.1%)
Public Authorities & Electric Railroads 6,968,051 6,799,768 2.5% 575,011 591,402 (2.8%)
-------------- -------------- ------------- --------------
Total Sales to Ultimate Customers 65,773,328 65,041,450 1.1% 26,772,534 26,605,849 0.6%
============== ============== ============= ==============
Heating Degree Days 4,081 3,610 2,982 2,888
Cooling Degree Days 848 748 1,366 1,038
Revenue (in thousands) 2001 2000 % Change 2001 2000 % Change
---------------------- -------------- -------------- ------------ ------------- -------------- ----------
Residential $ 1,851,856 $1,724,095 7.4% $ 990,910 $ 955,680 3.7%
Small Commercial & Industrial 1,613,971 1,597,885 1.0% 573,534 443,860 29.2%
Large Commercial & Industrial 732,175 848,786 (13.7%) 750,079 524,696 43.0%
Public Authorities & Electric Railroads 382,235 372,143 2.7% 54,142 41,211 31.4%
-------------- -------------- ------------- --------------
Total Sales to Ultimate Customers $ 4,580,237 $4,542,909 0.8% $ 2,368,665 $ 1,965,447 20.5%
============== ============== ============= ==============
Cents / kWh 2001 2000 % Change 2001 2000 % Change
----------- ------------- ------------- ------------ ------------ -------------- ----------
Residential $ 0.093 $ 0.095 (2.1%) $ 0.114 $ 0.113 0.9%
Small Commercial & Industrial $ 0.072 $ 0.073 (1.4%) $ 0.099 $ 0.079 25.3%
Large Commercial & Industrial $ 0.045 $ 0.046 (2.2%) $ 0.064 $ 0.044 45.5%
Public Authorities & Electric Railroad $ 0.055 $ 0.055 0.0% $ 0.094 $ 0.070 34.3%
Total Sales to Ultimate Customers $ 0.070 $ 0.070 0.0% $ 0.088 $ 0.074 18.9%
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THIRD QUARTER 2001
$30 MILLION IN ADDITIONAL SEVERANCE EXPENSE
-During the 3rd quarter, 536 new positions (in addition to the 2,900 positions
previously announced) were identified for elimination. The 536 positions were
split evenly between the former PECO and Unicom businesses
-Severance of $31 Million for the 268 PECO positions was expensed this quarter;
additional $17 million in the fourth quarter
-Severance costs for Unicom employees are recorded as an adjustment to goodwill,
under purchase accounting. Goodwill was reduced by $60 million as of September
30 to reflect:
- Additional employees terminated (+$40 million)
- Reduced benefit levels for union employees (-$100 million)
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THIRD QUARTER 2001
$36 MILLION (NON-CASH) WRITE-DOWN OF
EQUITY INVESTMENT IN CORVIS
Exelon owns 1.4 million shares of Corvis, acquired pre-merger by Unicom & PECO
through 2 limited partnerships.
-As part of the merger of Unicom and PECO, under purchase accounting,
all Unicom assets were recorded at their fair value as of the date of the
merger. Unicom's Corvis shares (535,000 shares in one investment limited
partnership and 337,000 shares in the second) were re-valued at $32/share (up
from the actual cash cost of between $0.35--$1.15/share).
-The cost basis of PECO's 535,000 Corvis shares was unchanged by the
merger. Post-merger, PECO continued to carry the investment at its actual cash
cost of $1.15/share.
-When Exelon received 1,070,000 shares in February 2001, the cost basis
was adjusted to Corvis' share price on the date of distribution: $26/share,
resulting in a $10M non-cash gain in the first quarter.
-As the result of an impairment analysis, Exelon determined that its
investment in Corvis should be marked-down to $2/share, resulting in a $36M
non-cash loss in the third quarter.
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Exelon Generation
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Exelon Generation
Generation Supply Footprint
[This slide depicts a map of North America which identifies each of the North
American Electricity Reliability Council regions and indicating the amount of
Exelon generation in each region:]
WSCC 252 MW
MAPP 0 MW
ERCOT 990 MW plus
350 MW in development
SPP 795 MW
MAIN 24,169 MW plus
1,865 MW in development
FRCC 0 MW
SERC 451 MW plus
450 MW in development
ECAR 500 MW
MACC 10,390 MW plus
74 MW in development
NPCC 3,412 MW plus
6,140 MW in development (includes NPCCC)
[The slide also contains two boxes with additional information:]
[First box - upper left-hand corner:]
40,279 MW in operation
9,789 MW in *development
50,068 MW TOTAL**
[Second box - lower left-hand corner:]
115 MW plus 115 MW in development - Mexico
[The following footnotes appears in the lower right-hand corner:]
* Development refers to projects that are in planning or construction. (includes
a 3 year view at new development and additional purchased power). ** Assumes
completion of Sithe acquisition and power uprate projects by 2003.
Data as of 10/05/01
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Owned Generation Assets
The following table sets forth at May 31, 2001 the net generation capacity of,
and other information about, the stations that we own directly:
Net
Generation
No of % Primary Dispatch Capacity
Fuel/Technology Station Location Units Owned (1) Fuel Type Type MW)(2)
--------------- ------- -------- ----- --------- --------- ---- ------
Nuclear (3) Braidwood Braidwood, IL 2 Uranium Base-load 2,308
Byron Byron, IL 2 Uranium Base-load 2,304
Dresden Morris, IL 2 Uranium Base-load 1,592
LaSalle Country Seneca, IL 2 Uranium Base-load 2,291
Limerick Limerick Twp., PA 2 Uranium Base-load 2,312
Peach Bottom Peach Bottom Twp., PA 2 46.245 Uranium Base-load 1,028
Quad Cities Cordova, IL 2 75.00 Uranium Base-load 1,172
Salem Hancock's Bridge, NJ 2 42.59 Uranium Base-load 942
Fossil Cromby 1 Phoenixville, PA 1 Coal Base-load 144
(Steam Turbines) Cromby 2 Phoenixville, PA 1 Oil Intermediate 201
Delaware Philadelphia, PA 2 Oil Peaking 250
Eddystone 1, 2 Eddystone, PA 2 Coal Base-load 581
Eddystone 3, 4 Eddystone, PA 2 Oil Intermediate 760
Schuylkill Philadelphia, PA 1 Oil Peaking 166\
Conemaugh New Florence, PA 2 20.72 Coal Base-load 352
Keystone Shelocta, PA 2 20.99 Coal Base-load 357
Fairless Hills Falls Twp., PA 2 Landfill Gas Peaking 60
Fossil Chester Chester, PA 3 Oil Peaking 39
(Combustion Croydon Bristol Twp., PA 8 Oil Peaking 380
Turbines) Delaware Philadelphia, PA 4 Oil Peaking 56
Eddystone Eddystone, PA 4 Oil Peaking 60
Falls Falls Twp., PA 3 Oil Peaking 51
Moser Lower Pottsgrove Twp., PA 3 Oil Peaking 51
Pennsbury Falls Twp., PA 2 Landfill Gas Peaking 6
Richmond Philadelphia, PA 2 Oil Peaking 96
Schuylkill Philadelphia, PA 2 Oil Peaking 30
Southwark Philadelphia, PA 4 Oil Peaking 52
Salem Hancock's Bridge, NJ 1 42.59 Oil Peaking 16
Fossil Cromby Phoenixville, PA 1 Oil Peaking 3
(Internal Delaware Philadelphia, PA 1 Oil Peaking 3
Combustion) Schuylkill Philadelphia, PA 1 Oil Peaking 3
Conemaugh New Florence, PA 4 20.72 Oil Peaking 2
Keystone Shelocta, PA 4 20.99 Oil Peaking 2
Hydroelectric Conowingo Harford Co., MD 11 Hydro Base-load 512
Pumped Storage Muddy Run Lancaster Co., PA 8 Hydro Intermediate 977
-- ------
Total 97 19,159
<FN>
_________________________
(1) 100%, unless otherwise indicated.
(2) For nuclear stations, capacity reflects the annual mean rating. All other
stations reflect a summer rating.
(3) All nuclear stations are boiling water reactors except Braidwood, Byron and
Salem, which are pressurized water reactors.
</FN>
We operate all of the facilities except for Salem, which is operated by PSEG
Nuclear LLC, Keystone and Conemaugh, which are operated by Reliant Energy.
Major Long-Term Contracts
Seller Location Capacity (MW) Expiration
------ -------- ------------- ----------
Midwest Generation, LLC. . . . . . .Various in Illinois 9,460 2004
Kincaid Generation, LLC . . . . . . Kincaid, Illinois 1,108 2012
Tenaska Georgia Partners, LP(1) . . Franklin, Georgia 900 2029
Tenaska Frontier, Ltd. . . . . . . Shiro, Texas 830 2020
Others . . . . . . . . . . . . . . Various 3,715 2002 to 2022
------
Total . . . . . . . . . . . . . . . . 16,013
<FN>
_________________________
(1) Scheduled to be in operation in mid-2001.
Excludes contracts under 500 MWs. These contracts total approx. 1,000 MWs.
</FN>
[LOGO FOR EXELON]
Summary of Midwest Generation Power Purchase Agreements
-----------------------------------------------------------------------------------------------------------------------------------
Coal Power Collins Power Peaking Unit Power
Purchase Agreement Purchase Agreement Purchase Agreement
------------------------------------------------------------------------------------------------------------------------------------
Term 5 years 5 years, subject to earlier 5 years, subject to earlier
termination in whole or in termination in whole or in
part by ComEd part by ComEd
------------------------------------------------------------------------------------------------------------------------------------
Capacity under Contracted capacity and 2,698 megawatts, subject to 943.6 megawatts, subject to
Contract capacity available reduction through the reduction through the
through the exercise of an release of units (see release of units (see
annual option, as follows: "Option to Add or Drop "Option to Add or Drop
Capacity under Contract" Capacity under Contract"
below) below)
Available
Contract Contracted Option
Year Capacity Capacity
---- -------- --------
1-(2000) 5,005 640
2-(2001) 4,535 1,110
3-(2002) 4,013 1,632
4-(2003) 1,696 3,949
5-(2004) 1,696 3,949
------------------------------------------------------------------------------------------------------------------------------------
Option to Add or In Years 1-5, ComEd may elect to take In Years 3-5, ComEd has option In Years 3-5, ComEd has
Drop Capacity additional capacity under contract; except to drop units from contract option to drop units from
under Contract that in Years 4 and 5, capacity not optioned contract
in the previous year may not be optioned in
following years ("use or lose")
------------------------------------------------------------------------------------------------------------------------------------
Minimum Purchase None 2,700,000 MWh, adjusted for 82,607 MWh, adjusted for
Requirements availability and any released availability and any
units released gas-fired units
------------------------------------------------------------------------------------------------------------------------------------
Exelon
EXELON Nuclear Fleet
------------------------------------------------------------------------------------------------------------------------------------
Braidwood Byron Dresden LaSalle
------------------------------------------------------------------------------------------------------------------------------------
Current Owner(s) Exelon Exelon Exelon Exelon
------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
------------------------------------------------------------------------------------------------------------------------------------
Plant Size 2,308 MW (PWR) 2,300 MW (PWR) 1,586 MW (BWR) 2,280 MW (BWR)
------------------------------------------------------------------------------------------------------------------------------------
MW Owned 2,308 MW 2,300 MW 1,586 MW 2,280 MW
------------------------------------------------------------------------------------------------------------------------------------
Site Type Dual unit Dual unit Dual unit Dual unit
------------------------------------------------------------------------------------------------------------------------------------
Power Pool MAIN MAIN MAIN MAIN
------------------------------------------------------------------------------------------------------------------------------------
Plant Start Date 1988 Unit 1-1985 Unit 2-1987 Unit 2-1970 Unit 3-1971 Unit 1-1984 Unit 2-1984
License Expiration Unit 1-2026 Unit 2-2027 Unit 1-2024 Unit 2-2026 Unit 2-2009 Unit 3-2011 Unit 1-2022 Unit 2-2023
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Quad Cities Limerick Peach Bottom Salem
------------------------------------------------------------------------------------------------------------------------------------
Current Owner(s) Exelon / MidAmerican Exelon Exelon / PSE&G Exelon / PSE&G
Energy Holdings
------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 75% 100% 50% (3.75% still pending) 42.6% Non-Operator
------------------------------------------------------------------------------------------------------------------------------------
Plant Size 1,562 MW (BWR) 2,284 MW (BWR) 2,185 MW (BWR) 2,212 MW (PWR)
------------------------------------------------------------------------------------------------------------------------------------
MW Owned 1,172 MW 2,284 MW 1,093 MW 942 MW
------------------------------------------------------------------------------------------------------------------------------------
Site Type Dual unit Dual unit Dual unit Dual Unit
------------------------------------------------------------------------------------------------------------------------------------
Power Pool MAIN PJM PJM PJM
------------------------------------------------------------------------------------------------------------------------------------
Plant Start Date 1973 Unit 1 -1986 Unit 2 -1990 1974 Unit 1 -1977 Unit 2 -1981
License Expiration 2012 Unit 1 -2024 Unit 2 -2029 Unit 2 -2013 Unit 3 -2014 Unit 1 -2016 Unit 2 -2020
------------------------------------------------------------------------------------------------------------------------------------
AmerGen Acquisitions
------------------------------------------------------------------------------------------------------
TMI Unit 1 Clinton Oyster Creek
------------------------------------------------------------------------------------------------------
Seller GPU Illinova GPU
------------------------------------------------------------------------------------------------------
Plant Size 786 MW (PWR) 930 MW BWR 619 MW (BWR)
------------------------------------------------------------------------------------------------------
Power Pool PJM MAIN PJM - East
------------------------------------------------------------------------------------------------------
Ownership Interest 100% AmerGen 100% AmerGen 100% AmerGen
------------------------------------------------------------------------------------------------------
Plant Start date 1974 1987 1969
License expiration April 2014 September 2026 April 2009
------------------------------------------------------------------------------------------------------
EXELON Fossil Fleet
------------------------------------------------------------------------------------------------------------------------------------
Conowingo Muddy Run Cromby Eddystone
------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
------------------------------------------------------------------------------------------------------------------------------------
Number of Units 11 8 2 4
------------------------------------------------------------------------------------------------------------------------------------
Net Capacity (MW) 512 977 345 1,341
------------------------------------------------------------------------------------------------------------------------------------
Fuel Type Hydroelectric Pumped Storage* Unit 1: scrubbed coal Units 1&2: scrubbed coal
Unit 2: natural gas OR #6 oil Units 3&4: nat gas OR #6 oil
------------------------------------------------------------------------------------------------------------------------------------
Power Pool PJM PJM PJM PJM
------------------------------------------------------------------------------------------------------------------------------------
Dispatch Order Baseload (Run of River) Peaking Intermediate Intermediate
------------------------------------------------------------------------------------------------------------------------------------
Plant Location Maryland Pennsylvania Pennsylvania Pennsylvania
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Fairless Hills Schuykill Delaware Distributed Gen
------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
------------------------------------------------------------------------------------------------------------------------------------
Number of Units 2 1 2 42
------------------------------------------------------------------------------------------------------------------------------------
Net Capacity (MW) 60 166 250 1,049
------------------------------------------------------------------------------------------------------------------------------------
Fuel Type Landfill gas #6 oil #6 oil Oil, natural gas, diesel
------------------------------------------------------------------------------------------------------------------------------------
Power Pool PJM PJM PJM PJM
------------------------------------------------------------------------------------------------------------------------------------
Dispatch Order Peaking Peaking Peaking Intermediate, Peaking
------------------------------------------------------------------------------------------------------------------------------------
Plant Location Pennsylvania Pennsylvania Pennsylvania Pennsylvania
------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------
Conemaugh Keystone
----------------------------------------------------------------------------
Ownership Interest 20.72% 20.99%
----------------------------------------------------------------------------
Number of Units 2 2
----------------------------------------------------------------------------
Net Capacity (MW) 352 357
----------------------------------------------------------------------------
Fuel Type Mine-mouth Coal-fired Mine-mouth Coal-fired
----------------------------------------------------------------------------
Power Pool PJM PJM
----------------------------------------------------------------------------
Dispatch Order Baseload Baseload
----------------------------------------------------------------------------
Plant Location Western Pennsylvania Western Pennsylvania
----------------------------------------------------------------------------
* Pumped Storage is a hydroelectric power that is generated by water that has
been pumped from one reservoir to another reservoir located at a higher
elevation. During peak demand periods, the water is released allowing it to
flow downhill through a hydraulic turbine, which drives a generator.
License Extension
License Renewal plans
expiration
Peach Bottom 2013, 2014 Application was
2 and 3 submitted July 2001
Dresden 2 and 3 2009, 2011 Application will be
submitted 2003
Quad Cities 2012 Application will be
1 and 2 submitted 2003
Oyster Creek 2009 Under Review
TMI-1 2014 Under Review
Continue to run plants as long
as they can be operated safely and profitably
[LOGO FOR EXELON]
Nuclear Power Offers Low Costs,
Fuel Price Stability
[This slide shows two charts side by side. The left chart is a line graph
showing Electricity Production Costs in cents per kilowatt-hour for four
different fuel types across the years 1993 through 1999]
nuclear coal gas oil
1993 2.48 2.27 3.89 3.93
1994 2.25 2.16 3.32 3.69
1995 2.1 2.05 2.93 4.12
1996 2.04 1.94 3.59 4.40
1997 2.36 2.17 3.63 3.95
1998 2.18 2.12 3.37 3.31
1999 1.83 2.07 3.52 3.18
[The right side of the slide shows a column chart which indicates the Historical
Fuel Cost Volatility in $/megawatt-hour for nuclear, fossil and gas turbines for
the years 1995 through 1999.]
Nuclear Fossil Gas Turbines
1995 5.75 16.07 20.83
1996 5.50 16.51 30.58
1997 5.42 16.80 24.94
1998 5.39 15.94 23.02
1999 5.17 15.62 28.72
Nuclear Power as a substantial portion of a balanced
supply portfolio is a competitive advantage
[LOGO FOR EXELON]
Exelon Generation
Nuclear Capacity Improvements
[This slide shows a column chart indicating the Capacity Factor in the years
2001, 2002, and 2003. The 2001 value is noted as the goal. Below the chart are
listed the refueling outages (RFOs) for each year. For 2001, 6 RFOs are noted.
For 2002, 11 RFOs are noted. For 2003, 8 RFOs are noted.]
Capacity Factor
2001 Goal 92%
2002 90%
2003 93%
[The following text is enclosed in a box.]
Capacity factor improvement becomes asymptotic in out years.
RFOs = Refueling Outages
[LOGO FOR EXELON]
Exelon Generation
Nuclear Refueling Outage Duration
[This left portion of this slide contains a vertical bar chart showing, side by
side, the average refueling outage duration in days during the years 1997, 1998,
1999, 2000, and 2001 year to date for the U.S. Industry and Exelon.]
Year U.S. Industry Exelon
1997 64 58
1998 51 53
1999 40 30
2000 38 22
2001 YTD 36 16
[The right portion of this slide contains the following information.]
-U.S. industry average of 36, Exelon Generation average 19 days
-Target typical refueling of 15 days by 2004
-Planned outages with larger scope:
-TMI `01, CPS `02, Bwd `02, LaS `03
-all uprate outages
-potential LaSalle mid-cycle
-Estimated revenue impact of shorter outages:
-$456,000/day @ $19/MWh
[LOGO FOR EXELON]
Exelon Generation
Nuclear Plant Security
Security Actions
-Heightened level of security beginning September 11; will continue indefinitely
-additional access control, background checks, expanded patrols
-NRC Advisory (Oct. 6) to consider "prompt" and "additional" actions at and
beyond design basis threat
-operating plants and spent fuel storage facilities
-estimated annual cost of $4 million
Taking steps to ensure industry-wide coordination of action
-Coordinated approach to Homeland Security, NRC, DOE, Congress, other agencies
on both next steps and communications
Communications and Government Interface
-Strong coordination among Government Affairs, Public Affairs, Nuclear
-State agency briefings (3 state-level meetings to date), local outreach
-Congressional interface, staff briefings on October 10
-Coordinated and consistent communications effort
[LOGO FOR EXELON]
Capacity Growth
Continued capacity growth through acquisitions,
development, alliances, contracts and up-rates.
[This slide shows a column chart which shows the additions of MW Capacity over
the years 2000 through 2004. The first column represents the year 2001 with a
value of 40,000. The second column shows the incremental value over the year
2001, the third column shows the incremental value over 2002, and the fourth
column shows the incremental value over 2003. Above the incremental bars in each
year are the items which compose the increase for that year.]
Waukegan
Sithe +850
Sithe Contracts 49400
Contracts Up-rates
Calumet +5100
Up-rates
+3400
40,000
--------------------------------------------------------------------------------
2001 2002 2003 2004
[LOGO FOR EXELON]
Exelon Generation
Increased Nuclear Generation
[The left portion of this slide contains the following text.]
Power uprates
-243 MW added 2000-2001, vs. plan of 240 MW
-620 additional MW scheduled through 2003
-Braidwood 2, Dresden 2&3, Quad Cities 1&2, Clinton
Other additions (feedwater flow calibration, moisture separator upgrades, TMI
turbine upgrade)
-94 MW achieved
~160 MW planned by 2003
[The right portion of the slide contains a column chart showing side by side
Planned vs. Actual (or estimated for 2001) Net Generation (at contract)(in
million megawatt-hours) for the years 2000 through 2004. Below the chart,
corresponding to each year, are the number of refueling outages (RFOs) for that
year.]
Plan Actual/Est. RFOs
2000 113.5 115 11
2001 115.8 119 6
2002 117.2 11
2003 120.5 8
2004 121.3 10
[LOGO FOR EXELON]
Sithe Transaction
Purchased 49.9% of Sithe Energy (10,000 MW's, including in development) for
$696 million
Transaction Closed in the 4th Quarter, 2000
Put-Call Option to Purchase Remaining 50.1% of Sithe between 2003-2005
[LOGO FOR EXELON]
Sithe North America
[This slide depicts a map of North America which identifies each of the North
American Electricity Reliability Council regions and indicating the amount of
Sithe generation in each region:]
WSCC 250 MW in operation
MAAC 30 MW in operation
NPCC 3,410 MW in operation
6,140 MW in development
[To the left of the graphic is a box which contains the following information:]
3,805 MW in Operation
6,255 MW in development
10,060 MW Total
[Below the graphic is the following note:]
plus 115 MW in development in Mexico
and 115 MW in operation in Mexico
[LOGO FOR EXELON]
Sithe Assets
-----------------------------------------------------------------------------
Operating MAAC NPCC/C WSCC Other Total
-----------------------------------------------------------------------------
Mystic 1 11 11
Mystic 4 135 135
Mystic 5 135 135
Mystic 6 138 138
Mystic 7 565 565
New Boston 1 350 350
New Boston 2 350 350
New Boston 3 20 20
Wyman 4 36 36
West Medway 1 60 60
West Medway 2 60 60
West Medway 3 57 57
Framingham 1 11 11
Framingham 2 11 11
Framingham 3 12 12
Fore River 1 12 12
Fore River 2 12 12
Batavia 50 50
Massena 66 66
Ogdensburg 71 71
Sterling 56 56
Independence 1,042 1,042
Cardinal 152 152
TEG II 115 115
Kenilworth 26 26
Greeley 72 72
Oxnard 48 48
Naval Station 45 45
North Island 37 37
NTC/MCRD 23 23
Bypass 10 10
Hazelton 9 9
Elk Creek 2 2
Rock Creek 4 4
Montgomery Creek 3 3
-----------------------------------------------------------------------------
Total Operating 26 3,412 252 115 3,805
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
In Development MAAC NPCC/C WSCC Other Total
-----------------------------------------------------------------------------
Torne Valley 800 800
Heritage 800 800
Brampton 800 800
Mississauga 800 800
TEG I 115 115
Mystic 8 800 800
Mystic 9 800 800
Fore River 3 800 800
Medway 1 180 180
Medway 2 180 180
Medway 3 180 180
-
-
-
-----------------------------------------------------------------------------
Total in development - 6,140 - 115 6,255
-----------------------------------------------------------------------------
MAAC NPCC/C WSCC Other Total
-----------------------------------------------------------------------------
Total Generation 26 9,552 252 230 10,060
-----------------------------------------------------------------------------
[LOGO FOR EXELON]
Exelon Power Team
[LOGO FOR EXELON]
Meeting the ComEd Summer Supply Challenge 2002
Capacity planning to 80% weather peak hour, down from 90% in 2001
Added 1,550 of gas-fired peaking capacity under long term contract (7 to 20
years)
Adding 350 MW gas-fired peaking plant (joint venture with a local gas company)
Released claim on 355 MWs of oil-fired peaking capacity on Midwest Generating
contract
[LOGO FOR EXELON]
ComEd Capacity Analysis
[This slide shows a line graph depicting an example hourly load profile, in
megawatts, for Peak Hours (5x16) - Summer. The vertical axis represents
megawatts and ranges from 8,000 to 24,000. Also shown on the graph are the
values for the 80/20 Peak Hour Load and the Average Load. Immediately to the
right of the line graph, and scaled to match the vertical axis of the line
graph, is a stacked column which shows the generation available to match the
load. The bottom part of the column shows 15,900 MW of baseload Generation.
Above that is an area representing 5,770 MW of Dispatchable Generation. Above
the stacked columns is text that reads "21,670 MW* Total Generation"; where the
asterisk refers to a footnote: "Net of 7% EFOR, and another asterisk indicates
that EFOR = Equivalent Forced Outage Rate"
80/20 Avg Hourly
Peak Hour Load Example
1 21,948 15,968 9,401
2 21,948 15,968 10,044
3 21,948 15,968 10,465
4 21,948 15,968 10,781
5 21,948 15,968 10,909
6 21,948 15,968 11,021
7 21,948 15,968 11,212
8 21,948 15,968 11,273
9 21,948 15,968 11,285
10 21,948 15,968 11,190
11 21,948 15,968 10,897
12 21,948 15,968 10,533
13 21,948 15,968 10,308
14 21,948 15,968 10,468
15 21,948 15,968 10,562
16 21,948 15,968 9,868
17 21,948 15,968 10,380
18 21,948 15,968 11,164
19 21,948 15,968 11,625
20 21,948 15,968 11,905
21 21,948 15,968 11,916
22 21,948 15,968 11,995
23 21,948 15,968 12,090
24 21,948 15,968 12,150
25 21,948 15,968 12,207
26 21,948 15,968 12,255
27 21,948 15,968 12,215
28 21,948 15,968 11,951
29 21,948 15,968 11,672
30 21,948 15,968 11,689
31 21,948 15,968 11,655
32 21,948 15,968 11,100
33 21,948 15,968 9,964
34 21,948 15,968 10,770
35 21,948 15,968 11,245
36 21,948 15,968 11,639
37 21,948 15,968 11,799
38 21,948 15,968 11,938
39 21,948 15,968 12,089
40 21,948 15,968 12,129
41 21,948 15,968 12,105
42 21,948 15,968 12,018
43 21,948 15,968 11,716
44 21,948 15,968 11,221
45 21,948 15,968 10,772
46 21,948 15,968 10,585
47 21,948 15,968 10,513
48 21,948 15,968 9,711
49 21,948 15,968 9,440
50 21,948 15,968 10,250
51 21,948 15,968 10,747
52 21,948 15,968 11,251
53 21,948 15,968 11,548
54 21,948 15,968 11,774
55 21,948 15,968 12,029
56 21,948 15,968 12,108
57 21,948 15,968 11,970
58 21,948 15,968 11,723
59 21,948 15,968 11,381
60 21,948 15,968 10,810
61 21,948 15,968 10,589
62 21,948 15,968 10,659
63 21,948 15,968 10,540
64 21,948 15,968 9,902
65 21,948 15,968 12,498
66 21,948 15,968 13,919
67 21,948 15,968 15,170
68 21,948 15,968 16,410
69 21,948 15,968 17,288
70 21,948 15,968 17,820
71 21,948 15,968 18,277
72 21,948 15,968 18,563
73 21,948 15,968 18,730
74 21,948 15,968 18,772
75 21,948 15,968 18,532
76 21,948 15,968 17,963
77 21,948 15,968 17,238
78 21,948 15,968 16,595
79 21,948 15,968 16,058
80 21,948 15,968 14,695
81 21,948 15,968 13,218
82 21,948 15,968 14,507
83 21,948 15,968 15,436
84 21,948 15,968 16,494
85 21,948 15,968 17,178
86 21,948 15,968 17,842
87 21,948 15,968 18,083
88 21,948 15,968 18,342
89 21,948 15,968 18,509
90 21,948 15,968 18,461
91 21,948 15,968 18,152
92 21,948 15,968 17,527
93 21,948 15,968 16,718
94 21,948 15,968 15,879
95 21,948 15,968 14,836
96 21,948 15,968 13,140
97 21,948 15,968 11,229
98 21,948 15,968 12,061
99 21,948 15,968 12,513
100 21,948 15,968 12,976
101 21,948 15,968 13,277
102 21,948 15,968 13,422
103 21,948 15,968 13,651
104 21,948 15,968 13,770
105 21,948 15,968 13,833
106 21,948 15,968 13,788
107 21,948 15,968 13,450
108 21,948 15,968 12,836
109 21,948 15,968 12,209
110 21,948 15,968 12,040
111 21,948 15,968 11,883
112 21,948 15,968 11,033
113 21,948 15,968 10,750
114 21,948 15,968 11,566
115 21,948 15,968 12,174
116 21,948 15,968 12,807
117 21,948 15,968 13,170
118 21,948 15,968 13,403
119 21,948 15,968 13,671
120 21,948 15,968 13,755
121 21,948 15,968 13,714
122 21,948 15,968 13,628
123 21,948 15,968 13,274
124 21,948 15,968 12,699
125 21,948 15,968 12,232
126 21,948 15,968 12,007
127 21,948 15,968 11,846
128 21,948 15,968 11,013
129 21,948 15,968 10,692
130 21,948 15,968 11,601
131 21,948 15,968 12,161
132 21,948 15,968 12,625
133 21,948 15,968 12,860
134 21,948 15,968 13,017
135 21,948 15,968 13,177
136 21,948 15,968 13,289
137 21,948 15,968 13,269
138 21,948 15,968 13,232
139 21,948 15,968 12,983
140 21,948 15,968 12,449
141 21,948 15,968 11,995
142 21,948 15,968 11,740
143 21,948 15,968 11,600
144 21,948 15,968 10,782
145 21,948 15,968 12,086
146 21,948 15,968 13,137
147 21,948 15,968 13,970
148 21,948 15,968 14,930
149 21,948 15,968 15,608
150 21,948 15,968 16,067
151 21,948 15,968 16,570
152 21,948 15,968 16,843
153 21,948 15,968 17,050
154 21,948 15,968 17,162
155 21,948 15,968 16,906
156 21,948 15,968 16,288
157 21,948 15,968 15,644
158 21,948 15,968 15,392
159 21,948 15,968 15,116
160 21,948 15,968 13,985
161 21,948 15,968 13,273
162 21,948 15,968 14,547
163 21,948 15,968 15,423
164 21,948 15,968 15,982
165 21,948 15,968 15,921
166 21,948 15,968 15,858
167 21,948 15,968 16,073
168 21,948 15,968 16,349
169 21,948 15,968 16,858
170 21,948 15,968 17,401
171 21,948 15,968 17,408
172 21,948 15,968 17,034
173 21,948 15,968 16,555
174 21,948 15,968 16,321
175 21,948 15,968 16,025
176 21,948 15,968 14,860
177 21,948 15,968 13,459
178 21,948 15,968 14,572
179 21,948 15,968 15,031
180 21,948 15,968 15,292
181 21,948 15,968 15,272
182 21,948 15,968 15,084
183 21,948 15,968 15,417
184 21,948 15,968 16,076
185 21,948 15,968 16,789
186 21,948 15,968 17,334
187 21,948 15,968 17,413
188 21,948 15,968 17,022
189 21,948 15,968 16,429
190 21,948 15,968 16,070
191 21,948 15,968 15,636
192 21,948 15,968 14,471
193 21,948 15,968 13,222
194 21,948 15,968 14,444
195 21,948 15,968 15,398
196 21,948 15,968 16,536
197 21,948 15,968 17,329
198 21,948 15,968 17,898
199 21,948 15,968 18,494
200 21,948 15,968 18,752
201 21,948 15,968 18,763
202 21,948 15,968 18,761
203 21,948 15,968 18,457
204 21,948 15,968 17,750
205 21,948 15,968 17,079
206 21,948 15,968 16,910
207 21,948 15,968 16,528
208 21,948 15,968 15,332
209 21,948 15,968 13,868
210 21,948 15,968 15,197
211 21,948 15,968 16,213
212 21,948 15,968 17,223
213 21,948 15,968 17,963
214 21,948 15,968 18,534
215 21,948 15,968 19,090
216 21,948 15,968 19,359
217 21,948 15,968 19,464
218 21,948 15,968 19,435
219 21,948 15,968 19,078
220 21,948 15,968 18,357
221 21,948 15,968 17,648
222 21,948 15,968 17,320
223 21,948 15,968 16,861
224 21,948 15,968 15,843
225 21,948 15,968 13,761
226 21,948 15,968 15,300
227 21,948 15,968 16,546
228 21,948 15,968 17,681
229 21,948 15,968 18,533
230 21,948 15,968 19,392
231 21,948 15,968 19,830
232 21,948 15,968 19,351
233 21,948 15,968 18,221
234 21,948 15,968 17,286
235 21,948 15,968 16,773
236 21,948 15,968 16,260
237 21,948 15,968 15,871
238 21,948 15,968 15,770
239 21,948 15,968 15,546
240 21,948 15,968 14,504
241 21,948 15,968 13,631
242 21,948 15,968 15,043
243 21,948 15,968 16,161
244 21,948 15,968 17,211
245 21,948 15,968 17,966
246 21,948 15,968 18,558
247 21,948 15,968 18,984
248 21,948 15,968 19,403
249 21,948 15,968 19,500
250 21,948 15,968 19,463
251 21,948 15,968 19,137
252 21,948 15,968 18,534
253 21,948 15,968 17,857
254 21,948 15,968 17,609
255 21,948 15,968 16,982
256 21,948 15,968 15,665
257 21,948 15,968 12,908
258 21,948 15,968 13,519
259 21,948 15,968 13,840
260 21,948 15,968 14,280
261 21,948 15,968 14,454
262 21,948 15,968 14,510
263 21,948 15,968 14,544
264 21,948 15,968 14,420
265 21,948 15,968 14,229
266 21,948 15,968 13,873
267 21,948 15,968 13,280
268 21,948 15,968 12,699
269 21,948 15,968 12,342
270 21,948 15,968 12,386
271 21,948 15,968 12,115
272 21,948 15,968 11,331
273 21,948 15,968 11,568
274 21,948 15,968 12,413
275 21,948 15,968 12,869
276 21,948 15,968 13,373
277 21,948 15,968 13,740
278 21,948 15,968 13,937
279 21,948 15,968 14,147
280 21,948 15,968 14,192
281 21,948 15,968 14,154
282 21,948 15,968 14,039
283 21,948 15,968 13,667
284 21,948 15,968 13,060
285 21,948 15,968 12,492
286 21,948 15,968 12,389
287 21,948 15,968 12,142
288 21,948 15,968 11,301
289 21,948 15,968 10,839
290 21,948 15,968 11,686
291 21,948 15,968 12,194
292 21,948 15,968 12,753
293 21,948 15,968 13,096
294 21,948 15,968 13,284
295 21,948 15,968 13,529
296 21,948 15,968 13,658
297 21,948 15,968 13,639
298 21,948 15,968 13,533
299 21,948 15,968 13,177
300 21,948 15,968 12,505
301 21,948 15,968 11,984
302 21,948 15,968 12,025
303 21,948 15,968 11,866
304 21,948 15,968 11,146
305 21,948 15,968 12,820
306 21,948 15,968 14,032
307 21,948 15,968 15,136
308 21,948 15,968 16,259
309 21,948 15,968 17,179
310 21,948 15,968 17,873
311 21,948 15,968 18,479
312 21,948 15,968 18,859
313 21,948 15,968 19,175
314 21,948 15,968 19,344
315 21,948 15,968 19,064
316 21,948 15,968 18,408
317 21,948 15,968 17,649
318 21,948 15,968 17,316
319 21,948 15,968 16,681
320 21,948 15,968 15,313
321 21,948 15,968 14,106
322 21,948 15,968 15,535
323 21,948 15,968 16,769
324 21,948 15,968 18,029
325 21,948 15,968 19,011
326 21,948 15,968 19,646
327 21,948 15,968 20,706
328 21,948 15,968 21,306
329 21,948 15,968 21,486
330 21,948 15,968 21,936
331 21,948 15,968 21,436
332 21,948 15,968 20,376
333 21,948 15,968 19,646
334 21,948 15,968 19,270
335 21,948 15,968 18,668
336 21,948 15,968 17,352
[LOGO FOR EXELON]
Exelon Power Team
2001 Year-To-Date Statistics
GWh Sales 1H 2001 Q3 2001 YTD
Delivery Affiliates 57,309 32,692 90,001
Market Forward & Spot 39,013 19,819 58,832
------ ------ -------
Total Sales 96,322 52,511 148,833
Average Realized Rev ($/MWh)
Delivery Affiliates 29.59 40.01 33.38
Market Forward & Spot 38.84 43.34 40.36
----- ----- ------
Total Sales 33.33 41.27 36.13
Average Supply Cost 18.65 29.70 22.16
(including Transmission)
Margin 14.68 11.57 13.97
[LOGO FOR EXELON]
Exelon Energy Delivery
[LOGO FOR EXELON]
Exelon Energy Delivery
Volume Growth Analysis
September YTD Volume Comparison to Prior Year
ComEd PECO
----------------------- -------------------
Weather Weather
Actual Normalized Actual Normalized
(Gwh) (Gwh) (Gwh) (Gwh)
------- ---------- ------- ----------
Prior Year 65,681 67,561 26,683 27,033
Current Year 67,018 67,058 26,846 26,861
Variance% 2.0% -0.7% 0.6% -0.6%
[LOGO FOR EXELON]
Regulation
[LOGO FOR EXELON]
PECO ENERGY
Restructuring Settlement
This summary of the major elements of the 1998 settlement reflects amendments
made in 2000 following announcement of the PECO Unicom merger.
o Recovery of $5.26 billion of stranded costs over a 12-year transition
period beginning January 1, 1999 and ending December 31, 2010, with a
return of 10.75 percent.
o Rate caps will vary over the transition period. (See Table on Page 2.)
o On January 1, 1999 PECO unbundled rates into three components:
- a transmission and distribution rate of 2.98 cents per kWh.
- a competitive transition charge (CTC) designed to recover the $5.26
billion of stranded costs. Revenue collected through the CTC will be
reconciled annually based on actual sales.
- a shopping credit initially set at 4.46 cents per kWh on a system-wide
basis.
o Authorization for PECO to securitize up to $5 billion of stranded costs.
(PECO has securitized fully to its $5B limit.) The intangible transition
charges associated with transition bonds terminate no later than December
31, 2010.
o Flexible pricing, within a specified range, for residential default
customers.
o Customer choice phased in between January 1, 1999 and January 2, 2000.
o Authorization for PECO to transfer its generation assets to a separate
entity.
o Ability of electric generation suppliers (EGS) to provide metering and
billing services to retail customers who have direct access.
o As required by law, on January 1, 2001 the provider of default service for
20 percent of residential customers was bid competitively.
o If 35 percent and 50 percent of all customers are not shopping by 2001 and
2003, respectively, a number of customers sufficient to equal those trigger
points shall be randomly selected and assigned to licensed suppliers by a
PUC-determined process.
o PLR Requirement: PECO is PLR through 2010.
Schedule of Rates Page 2
Schedule of System Average Rates
(cent)/kWh
---------------------------------------------------------------------------------------------------------------------
Effective Date Transmission(a) Distribution T&D Rate CTC/ITC Credit for Generation
Cap(b) Delivery Rate
Service Only Cap(c)
(1) (2) (3) (4) (5) (6)
---------------------------------------------------------------------------------------------------------------------
January 1, 1999 0.45 2.53 2.98 1.72 4.46 6.18
January 1, 2000 0.45 2.53 2.98 1.92 4.46 6.38
January 1, 2001 0.45 2.53 2.98 2.51 4.47 6.98
January 1, 2002 0.45 2.53 2.98 2.51 4.47 6.98
January 1, 2003 0.45 2.53 2.98 2.47 4.51 6.98
January 1, 2004 0.45 2.53 2.98 2.43 4.55 6.98
January 1, 2005 0.45 2.53 2.98 2.40 4.58 6.98
January 1, 2006 0.45 2.53 2.98 2.66 4.85 7.51
January 1, 2007 N/A N/A N/A 2.66 5.35 8.01
January 1, 2008 N/A N/A N/A 2.66 5.35 8.01
January 1, 2009 N/A N/A N/A 2.66 5.35 8.01
January 1, 2010 N/A N/A N/A 2.66 5.35 8.01
<FN>
(a) Transmission prices listed are for illustration only. The PUC does not
regulate rates for transmission Service.
(b) T&D Rate Cap (column 3) = sum of columns (1)+(2).
(c) Generation Rate Cap (column 6) = sum of columns (4)+(5).
----------------------------------------------------------------------------------------------------------------------
</FN>
Notes:
o Average figures for CTC/ITC from 1999-2010 in column 4 are fixed,
subject to reconciliation for actual sales levels. (CTC in 2000 was
$800.)
o The credit (paid to delivery-service-only-customers) figures in column
5 will be adjusted to reflect changes due to the CTC/ITC
reconciliation.
o Average transmission and distribution service rates will not exceed
the figures in column 3.
o The generation portion of bills for customers who remain with
regulated PECO generation supply will not, on average, exceed figures
in column 6.
o Calculation of average rates for 2001:
9.96(cent)/kWh (existing rate cap) - 8 percent reduction = 9.16(cent)/kWh
9.16(cent)/kWh = 2.98 (column 3) + 1.72 (coumn 4) + 4.46 (column 5)
CTC Amortization Page 3
Annual Stranded Cost
Amortization and Return(a)
----------------------------------------------------------------------------------------------------------------------
Revenue Excluding GRT
Annual ------------------------------------------------------------
Year Sales CTC Total Return @ 10.75% Amortization
MWh (cent)/kWh ($000) ($000) ($000)
----------------------------------------------------------------------------------------------------------------------
2001 34,108,616 2.31 753,241 482,561 270,680
2002 34,381,485 2.51 825,004 516,869 308,135
2003 34,656,537 2.47 818,352 482,401 335,951
2004 34,933,789 2.43 811,540 444,798 366,742
2005 35,213,260 2.40 807,933 403,555 404,378
2006 35,494,966 2.66 902,623 353,070 549,553
2007 35,778,925 2.66 909,844 290,627 619,217
2008 36,065,157 2.66 917,123 220,312 696,811
2009 36,353,678 2.66 924,459 141,229 783,231
2010 36,644,507 2.66 931,855 52,381 879,474
<FN>
(a) Subject to reconciliation of actual sales and collections. Under the settlement, sales are estimated to
increase 0.8 percent per year.
----------------------------------------------------------------------------------------------------------------------
</FN>
Other Features
o The transmission & distribution rate cap of 2.98 cents per kWh includes .01
cents for a sustainable energy and economic development fund during the
rate cap period.
o PECO is permitted to transfer ownership and operation of its generating
facilities to a separate corporate entity. The generating facilities will
be valued at book value at the time of the transfer.
o Twenty percent of residential customers will be assigned to a provider of
last resort (PLR), other than PECO, on January 1, 2001. The PLR will be
selected on the basis of a PUC-approved energy and capacity market price
bidding process. PECO-affiliated suppliers will be prohibited from bidding
for this block of customers.
o As of January 1, 2001, PECO (as PLR) will price its service to residential
customers within a specified range. A single rate will be established for
each rate schedule.
o A Qualified Rate Order authorizing securitization of up to $4 billion is
included.
ComEd Restructuring Legislation
Enacted Dec. 1997
Rate Reductions
o Residential - 15% effective 1/1/98 ~ $400 million
5% effective 10/1/2001 ~ $100 million
Direct Access Phase-In Schedule
o Residential
5/1/2002 100% of residential customers have supplier choice.
o Commercial and Industrial, Governmental
All C&I customers had supplier choice effective 12/31/00.
Transition Cost Recovery Provisions
1) Bundled rates are frozen through 2004 at 1996 levels after taking the
residential rate reductions described above.
2) Unbundled delivery service rates apply to customers who choose an alternate
supplier or the market rate for energy (ComEd PPO).
o Utilities recover transition costs via a Competitive Transition Charge
(CTC) from customers who select an alternate supplier. The CTC will apply
through 2006 for all classes. The CTC will be calculated based on the
following formula:
CTC = Tariff/contract revenues minus
Delivery service revenue minus
Market value of electricity minus
Mitigation factor
(See current and proposed delivery rate schedules attached.)
Mitigation Factor
The mitigation factor is a credit averaging 0.5 cents/kWh offered by the utility
to delivery service only customers.
o The mitigation factor for commercial and industrial customers is:
10/1/99-12/31/02 0.5 cents per kWh or 8%
2003-2004 0.5 cents per kWh or 10%
2005 0.6 cents per kWh or 11%
2006 0.9 cents per kWh or 12%
o The mitigation factor for residential customers is calculated as a
percentage of base rates after the rate reductions are in effect. The
applicable percentages are as follows:
2002 6% of base rates after rate reductions
2003-2004 7% of base rates after rate reductions
2005 8% of base rates after rate reductions
2006 10% of base rates after rate reductions
Transition Period Provision
During the transition period utilities will be able to recognize, sell or assign
assets; retire or remove plants from service; unbundle or restructure tariffs on
a revenue neutral basis (with impact limitations described in Earnings and
Viability below); accelerate depreciation or amortization or assets without ICC
approval. The ICC could intercede if it believed the transaction jeopardized
reliable service.
Earnings and Viability
The maximum allowable rate of return will be pegged to the 30 year T-Bond rate,
plus 8.5%. If earnings exceed the allowed rate of return by more than 1.5%, 50%
of the excess earnings would be shared with customers. If the rate of return is
below the T-bond Rate, the utilities can apply to the ICC for a rate increase.
Securitization
Utilities are allowed to utilize securitization of transition period revenues as
a means to mitigate stranded costs. The proceeds primarily are to be used to
retire debt and equity, and to repay or retire fuel obligations if the
Commission finds such use is the public interest.
Amount allowable for securitization is capped by 50% of capitalization. In
December 1998, ComEd securitized $3.4 billion.
Delivery Service Rate Case (ICC Dkt. 01-0423) to
Set New Delivery Services Rates:
Status:
CURRENT DELIVERY SERVICES RATES SET IN 1999 CASE FOR C & I CUSTOMERS ONLY:
REV. REQUIREMENT ($MILLIONS): $1251.7
ROE: 10.8%
ROR: 8.84%
IN JUNE 2001 COM ED FILED FOR RESIDENTIAL AND C & I CUSTOMERS:
REV. REQUIREMENT ($MILLIONS): $1786.9
ROE: 13.25%
ROR: 9.95%
STAFF RECOMMENDATION:
REV. REQUIREMENT ($MILLIONS): $1,571.1
ROE: 11.72%
ROR: 8.75%
Schedule
Staff and Intervenor Testimony - 8/23/01
ComEd Rebuttal - 9/18/01
Staff and Intervenor Rebuttal - 10/16/01
ComEd Surrebutal - 10/24/01
Hearings - 11/1-2, 5-9 (reserve dates 13-14) at 10:00 a.m.
Initial Briefs - 12/7/01
Reply Briefs - 12/20/01
Draft Interim Order - 12/3/01
ALJ Proposed Order - 1/15/02
Brief on Exceptions - 1/22/02
Replies to Exceptions - 1/29/02
----------------------------------------------------------------------
The schedule has been designed to permit a Commission Order to be issued as
early as March 1, 2002 should the Commission desire.
Commonwealth Edison Company
Determination of Customer Transition Charge (Summary Page)
Based on Market Value Defined in Rider PPO - PPO (Market Index - Altrade/ICE
Into Cinergy) Applicable Period A (June 2001 - May 2002) (All units are in cents
per kilowatt-hour)
Delivery
Base Rate Service Market Mitigation
Revenue Revenue Value Amount CTC
------- ------- ----- ------ ---
3317 (1)(2) (1)(3) (4) (5) (E)=(A)-(B)-(C)-(D)
(A) (B) (C) (D)
Customer Transition Charge Customer Class
Nonresidential Delivery Service Customers
With Only Watt-hour Only Meters 11.258 3.124 5.404 0.901 1.829
0 kW to and including 25 kW Demand 9.288 1.897 5.226 0.743 1.422
Over 25 kW to and including 100 kW Demand 8.344 1.699 5.129 0.668 0.848
Over 100 kW to and including 400 kW Demand 7.428 1.368 5.053 0.594 0.413
Over 400 kW to and including 800 kW Demand 6.839 1.226 4.873 0.547 0.193
Over 800 kW to and including 1,000 kW Demand 6.767 1.125 4.957 0.541 0.144
Over 1,000 kW to and including 3,000 kW Demand 6.456 1.095 4.702 0.516 0.143
Fixture-included Lighting Nonresidential Delivery Service Customers 13.554 8.283 3.348 1.084 0.839
Street Lighting Delivery Service Customers - Dusk to Dawn 3.852 1.608 3.250 0.500 0.000
Street Lighting Delivery Service Customers - All Other Lighting 7.172 1.559 4.242 0.574 0.797
Railroads Delivery Service Customers (6)
Pumping Delivery Service Customers 6.465 1.231 4.579 0.517 0.138
<FN>
Notes:
(1) Transfer from Column (H) and Column (M) of Determination of Customer
Transition Charge, on Page 2 to 12 of supporting workpapers filed March 16,
2000.
(2) Base rate revenues consist of customer, demand, and energy charges. Base
rate revenues do not include facility, meter, or other equipment rentals,
franchise fees or other franchise cost additions, fuel adjustment clause
charges, decommissioning expense adjustment clause charges, taxes, local
government compliance clause charges, compensation for energy generated by
a person or entity other than ComEd, or Renewable Energy Resources and Coal
Technology Development Assistance Charge and Energy Assistance Charge for
the Supplemental Low-Income Energy Assistance Fund.
(3) The amount of revenue that the Company would receive under Rate RCDS -
Retail Customer Delivery Service - Nonresidential (Rate RCDS) for standard
delivery of energy to customers in the CTC Customer Class. Such revenue
includes all standard charges contained in Rate RCDS.
(4) The Market Value for a CTC Customer Class has the same value as the per
kilowatt-hour Load Weighted Average Market Value (LWAMV) as defined in
Rider PPO - Power Purchase Option (Market Index) for the applicable
customer class for Applicable Period A.
(5) The mitigation amount as defined in Rate CTC is the greater of 0.5 cents
per kilowatt-hour or 8% of the base rate revenue for the calculation
period.
(6) There are two customers in the Railroads class and each customer will have
a Customer-specific CTC.
</FN>
Commonwealth Edison Company
Sample Determination of Customer Transition Charge (Class Summary Page)
Based on Market Value Defined in Rider PPO - Power Purchase Option (Market Index) Applicable Period A
(All units are in cents per kilowatt-hour)
Delivery
Base Rate Service Market Mitigation
Revenue Revenue Value Amount CTC
------- ------- ----- ------ ---
(1)(2) (1)(3) (4) (5) (E)=(A)-(B)-(C)-(D)
(A) (B) (C) (D)
Customer Transition Charge Customer Class
Residential Delivery Service Customers
Single Family Without Space Heat 8.727 4.426 5.004 0.524 0.000
Multi Family Without Space Heat 8.975 4.919 5.180 0.539 0.000
Single Family With Space Heat 5.821 3.286 4.551 0.349 0.000
Multi Family With Space Heat 6.155 2.820 4.703 0.369 0.000
Fixture-included Lighting Residential Delivery Service Customers 8.688 8.413 3.348 0.521 0.000
Nonresidential Delivery Service Customers
With Only Watt-hour Only Meters 11.258 3.783 5.386 0.901 1.188
0 kW to and including 25 kW Demand 9.288 2.501 5.199 0.743 0.845
Over 25 kW to and including 100 kW Demand 8.344 2.163 5.090 0.668 0.423
Over 100 kW to and including 400 kW Demand 7.428 1.660 5.037 0.594 0.137
Over 400 kW to and including 800 kW Demand 6.839 1.421 4.841 0.547 0.030
Over 800 kW to and including 1,000 kW Demand 6.767 1.355 4.941 0.541 0.000
Over 1,000 kW to and including 3,000 kW Demand 6.456 1.282 4.680 0.516 0.000
Fixture-included Lighting Nonresidential Delivery Service Customers 13.554 8.413 3.255 1.084 0.802
Street Lighting Delivery Service Customers - Dusk to Dawn 3.852 1.299 3.238 0.500 0.000
Street Lighting Delivery Service Customers - All Other Lighting 7.172 1.461 4.222 0.574 0.915
Railroads Delivery Service Customers (6)
Pumping Delivery Service Customers 6.465 1.329 4.574 0.517 0.045
<FN>
Notes:
(1) Preliminary residential estimates are based on two years of data ending
January 2001 and residential rates expected to be in effect beginning
October 1, 2001.
(2) Base rate revenues consist of customer demand and energy charges. Base rate
revenues do not include facility, meter, or other equipment rentals,
franchise fees or other franchise cost additions, fuel adjustment clause
charges, decommissioning expense adjustment clause charges, taxes, local
government compliance clause charges, compensation for energy generated by
a person or entity other than ComEd, or Renewable Energy Resources and Coal
Technology Development Assistance Charge and Energy Assistance Charge for
the Supplemental Low-Income Energy Assistance Fund.
(3) The amount of revenue that the Company would receive under Rate RCDS -
Retail Customer Delivery Service (Rate RCDS) and Rider TS - Transmission
Services (Rider TS) for standard delivery of energy to customers in the CTC
Customer Class.
(4) The Market Value for a CTC Customer Class has the same value as the per
kilowatt-hour Load Weighted Average Market Value (LWAMV) as defined in the
proposed Rider PPO - Power Purchase Option (Market Index) for the
applicable delivery service customer class.
(5) The residential mitigation amount as defined in Rate CTC is 6% of the base
rate revenue for the sample calculation period. The nonresidential
mitigation amount as defined in Rate CTC is the greater of 0.5 cents per
kilowatt-hour or 8% of the base rate revenue.
(6) There are two customers in the Railroads class and each customer will have
a Customer-specific CTC.
</FN>
[LETTERHEAD FOR EXELON]
Pamela B. Strobel
President
Exelon Energy Delivery Company
10 South Deaborn, 37 East
Post Office Box 805398
Chicago, Illinois 60680-5398
April 2, 2001
Richard L. Mathias, Chairman
Illinois Commerce Commission
160 North LaSalle Street
Chicago, Illinois 60601
Dear Chairman Mathias:
You and your fellow Commissioners have talked with John Rowe, Frank
Clark and me about the legitimate concern, you, and the general public, share
with respect to the continued successful implementation of electric service
restructuring in Illinois. That concern has been heightened for all of us by
recent events in California. The two most important elements of electric service
-- cost and reliability -- are highlighted by the sharp price increases and
inadequate supply facing Californians as summer approaches. The California
experience is the result of a combination of many factors, including a
supply/demand imbalance that developed over time, and has been exacerbated by a
poorly designed market structure. We at Exelon believe it is important both to
reassure our customers that Illinois is not at risk for a repeat of the
California experience, and to take the steps necessary to protect that promise
beyond the term of Commonwealth Edison's existing contractual rights to reliable
generating capacity. To do that we are developing a detailed plan that will, by
further stimulating the development of a functional wholesale and retail market,
encourage and ensure adequate capacity and acceptable price levels in Illinois
for the long term. The outline of our plan is presented in this letter, by which
we hope to solicit your considered suggestions as we proceed to implementation.
Attached to this letter (as Attachment A) is a simplified summary of the plan as
we now envision it.
We have the same objective: to assure the public of a reliable supply
of electricity at a reasonable price, now and in the future. We also recognize
that smaller consumers wish to be protected from the supply and price
fluctuations inherent in commodity markets. It is also important to build a
functional, competitive market in which supply options are available to all,
with a default system that will have the ability to supply those customers who
are unable or unwilling to exercise those options. Our proposal, therefore,
addresses the need to develop a competitive market, with the participation of a
sufficient number of willing buyers and sellers to assure both adequate capacity
and competitive prices. Such a market, we believe, will also provide a measure
of stability that will benefit all consumers.
Chairman Richard L. Mathias
April 2, 2001
Page 2
Meeting this objective within the context of the current legislation in
a way that would be both certain and advantageous to Exelon would be fairly
simple: Exelon could commit to provide supply to meet any level of demand at the
then prevailing spot market price, plus adequate compensation for taking the
risks of providing reliable, potentially universal service. The resulting price,
although "reasonable" in the context of the market, might not, however, be
desirable for all customers and would not necessarily encourage forward
contracting for new generation. Small customers, for example, would probably
find such pricing not adequately stable or predictable, and the lack of forward
contracting would not provide sufficient incentives to attract adequate
investment in new capacity. Thus we believe the simplicity of such a "spot plus"
model should be somewhat compromised, both to provide greater price certainty
for small users, and to provide incentives for a more vigorous market, which
should result, ultimately, in more secure supply.
With this in mind we propose to distinguish between larger users --
defined as those with loads in excess of 400 kW of demand -- and mass market
consumers, with peak loads below that level (which, incidentally, comprise well
over 99% of all of our retail customers). The 400 kW level is an appropriate
break point for Commonwealth Edison's customers because those with larger loads
represent the majority of "switching" activity in our service territory.
Approximately 12,000 of Edison's non-residential customers (representing over
4,800 MW of load) have so far exercised their choice for unbundled service as of
March 27, 2001. Customers with demands greater than 400 kW represent
approximately 3,900 MW, or 82%, of the load that has switched. In addition, of
the 6,400 customers with loads over 400 kW, roughly 33% have already selected
unbundled service. Finally, customers over 400 kW are already required by
Commonwealth Edison's delivery service tariff to have interval metering in
place. This metering permits customer-specific billing settlements to reflect
actual hourly consumption and can provide large customers with hourly price
signals.
The larger users already have both the ability and the sophistication
to participate directly in the bulk power markets, to respond to market price
signals, and to make their own decisions about the length of their supply
arrangements. The present structure, however, places the regulated utility in
the position of providing these customers with several attractive electric
service options, specifically the power purchase option ("PPO") and fixed price
bundled service offerings. The availability of these options for large customers
tends to limit their incentive to turn to alternative suppliers and thus limits
the number of new entrants on the supply side, restraining the robust
development of the competitive market. Thus, we believe it would be best to
pursue a course that would result in the complete elimination of both PPO and
bundled service for large customers by the end of the mandatory transition
period. We believe that by the end of 2004, when the statutory rate freeze and
the mandatory transition period, as well as Commonwealth Edison's current
contractual rights to substantial capacity from our former fossil plants, come
to an end, these large customers should play an important role as participants
in the market. By mitigating our obligation to supply them, our own flexibility,
as well as the market's robustness, will be enhanced. Assuming our efforts are
successful, and a viable competitive market is in place at the end of the
mandatory transition period in 2004, we would offer to supply large users at
day-ahead or other spot market prices, with some adder to reflect our
administrative costs. While we will make every effort to
Chairman Richard L. Mathias
April 2, 2001
Page 3
develop such a competitive market, we will, of course, also depend on the
support and participation of other market participants and the Commission.
While simply notifying large customers today that the existing PPO and
fixed price offerings will be phased out over time should encourage immediate
increased participation in the competitive market, additional steps should also
be taken during the mandatory transition period to help achieve that goal. We
may propose a tariff to be effective mid-year 2002, when we expect that the
majority of our largest customers (those with loads exceeding 3 MW) will not be
paying any CTC, that disqualifies such customers from eligibility for the
existing PPO option. If necessary, other incentives for market participation
might also be implemented during the mandatory transition period. It should be
clear, however, that in the face of a functioning market with adequate supply
and suppliers, it would not be reasonable to hold us to a PPO obligation at a
fixed price where the magnitude of an unpredictable PPO load could exceed our
own available resources. As long as large users have the present choice,
essentially between the lower of cost or market, many will resist direct
participation in the market, to the detriment of all. A strong market cannot
flourish as long as large users can have it both ways.
With respect to smaller consumers, an appropriate policy should
recognize their need for an alternative to direct participation in the market.
We believe that one answer is for us to assume a more clearly defined role in
assuring a reliable supply, at relatively stable prices. Such prices should
reflect the realities of the market, but mitigate much of the volatility and
risk for the small customers. While there is greater certainty associated with
providing supply for some residential customers who are relatively small and
disinterested in pursuing competitive alternatives undertaking this commitment
with respect to our provider of last resort responsibility for the period beyond
2004 nevertheless entails significant risk. That risk increases as it is
accompanied by our commitment not merely to certainty of supply, but to
certainty of price as well, over time periods that exceed our -- or anyone's --
ability to forecast with confidence. Our plan recognizes the need to meet the
public interest with respect to both of these variables -- supply certainty and
price stability -- thus protecting against the possibility that the sins of
California will be visited on the people of Illinois. It also will provide us
with appropriate compensation for the risk we will be assuming.
In part because of the mix in Exelon's existing generation portfolio,
and in part because of our expectation that, through the use of long-term
forward contracting, we can hedge and manage price risk, we are willing to
undertake a commitment to supply users with peak demands below 400 kW with the
power and energy they need, at a fixed, known price for the period 2005 through
2008. The price could be designed either to remain constant over the period or
to escalate modestly on an annual basis over that period, in which case it would
start at a lower level and end at a higher level than the constant price. The
fixed price level to which we are willing to commit at this time reflects
implicitly several factors, including the market, the risks we are assuming, and
the value customers will receive in terms of reliability, price stability, and
simplicity. However, to the extent that our undertaking is asymmetric -- that
is, obligates us to provide capacity but permits customers to
Chairman Richard L. Mathias
April 2, 2001
Page 4
switch back and forth from generation we supply to that supplied by others -- we
would not expect our obligation to be perpetual.
Under this proposal, all customers, subject to appropriate anti-gaming
rules that limit their ability to change suppliers to capture temporary market
conditions, would have the ability to purchase from alternative suppliers. Thus,
if actual market prices turn out to be lower than the fixed-price offer, the
customers could obtain the benefit of the lower prices by purchasing from an
alternative supplier. By choosing not to turn to alternative suppliers, such
customers would be making another choice, the choice to have someone else -- us
-- identify and provide a reliable supply, and do so at a price that will allow
them to budget and be free from price shocks reflecting the actual and extreme
volatility of the spot electric markets.
Our proposal, in addition to the benefits it provides directly for
large and small users alike, will provide the additional benefit of stimulating
the market in several ways. First, although continuing to provide large
customers with an alternative to direct access, the proposal provides incentives
for such customers to contract directly with competitive suppliers in the market
on their own behalf. They are, after all, the customer class who pursued most
vigorously the legislative creation of open access to the market. Their presence
in the market as buyers will serve to stimulate the participation of sellers,
and the market itself, and therefore should be encouraged. Second, by pricing
our offering to small users to reflect both the market value of the service and
appropriate recognition of the value of the reliability, certainty and
simplicity we will provide, we will create an incentive for other sellers to
compete for those loads, stimulating market development through the opportunity
to undercut our price. Thus, we believe our proposal should also be welcomed by
marketers/suppliers, as providing an established price comparison basis from
which they can compete for price-sensitive mass market customers. Finally,
establishing a long-term fixed price today for a subset of customers will allow
Exelon to sign forward contracts with new and existing generators in order to
hedge this price obligation or engage in other risk management activities. Such
forward contracts could encourage additional new entry, thereby increasing
overall system reliability and ensuring reasonable price levels in the future.
Small users themselves are at this time uncertain about the value of
shopping in the market, and the frequency with which they might switch suppliers
if they do shop. This makes it difficult to forecast the magnitude and shape of
the loads they represent, and, obviously, increases the risk of undertaking a
commitment to serve whatever that load may be, at pre-established prices. This,
however, seems to be exactly what the California experience has taught the rest
of us that the public demands: both a functional market, and a safe harbor. Our
proposal is intended to facilitate the development of the former, and assure the
existence of the latter.
Our proposal requires several things at this stage. First, we welcome
your insights into refinements you believe might improve the ability of our
model to stimulate fully competitive markets. We need to consider together the
regulatory or other changes that might be necessary to accommodate our
structure. We must do further work to refine the actual prices at which we are
prepared to offer this service. Finally, we also need to consider the most
efficient process for
Chairman Richard L. Mathias
April 2, 2001
Page 5
implementation. There are several reasons for this, but two are of immediate
concern. The first is the urgent need to reassure a concerned public, troubled
by the California experience, that provision has been made for their power
supply, at reasonable prices, for the foreseeable future. The second is the need
to move quickly to arrange for that supply, and its appropriate pricing. Under
the present arrangement, price uncertainty associated with provider of last
resort and default service obligations does not arise until 2005. However, as
Commissioner Kretschmer has recently observed, long-term price hedging can be of
great value, and negotiations for the necessary contracts and financial hedges
to eliminate price uncertainty through 2008 should therefore begin almost
immediately, with the hope that the sooner we start, the sooner such a service
can be confidently offered at a known price.
I look forward to reporting to you further refinements in our proposal,
to meeting with you, if you wish, to discuss it, and to implementing a plan to
bring the best of both the competitive market and the regulated delivery
business to the people of Illinois.
Very truly yours,
Pamela B. Strobel
President
Exelon Energy Delivery
cc: Hon. Ruth K. Kretschmer
Hon. Terry S. Harvill
Hon. Edward C. Hurley
Hon. Mary Frances Squires
Attachment A
EXELON CORPORATION
MARKET DEVELOPMENT AND CONSUMER PROTECTION PROPOSAL
Objective
---------
o Address need to further stimulate fully functioning wholesale and retail
markets
o Provide reliability and price stability beyond transition period
Solution
--------
o Distinguish between large users (400 kW and above), and largely residential
and small commercial mass-market consumers (loads below 400 kW)
o Large users (over 40% of kWh sales):
o Phase out existing PPO and bundled service after 2004
o Beginning in 2005 offer only pass-through pricing on day-ahead or
real-time spot basis (plus adder)
o Restrict existing PPO offering through 2004 to large users with
continuing CTC obligations
o Mass market (99% of customers):
o Avoid California-style rate shock
o Provide specific fixed price service between 2005-2008
o Identify option of modest scheduled annual price escalation from 2005
through 2008
o Assure availability of reliable supply at established prices
Benefits
--------
o Encourages large user participation in market
o Encourages competitive supplier participation to meet large user
requirements
o Stimulates robust markets
o Provides price insurance for small consumers
o Provides proper price signals to stimulate investment in new generation
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Exelon Enterprises
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Exelon Enterprises
September, 2001
Exelon Enterprises has a current book value of $1.3 billion:
$650 million - EIS
$150 million - Services (including Solutions)
$150 million - Thermal
$150 million - Communications
$125 million - Capital Partners
$ 80 million - Energy
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ENTERPRISES BACKGROUND
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INFRASTRUCTURE SERVICES
-----------------------
Exelon Infrastructure Services' (EIS) goal is to provide integrated services
nationwide to network infrastructure owners in the electric, gas and
telecommunications industries. Services include design, construction, operation,
maintenance, and management of utility distribution and transmission systems.
EIS has grown through acquisition to become one of the largest utility
infrastructure service companies in the U.S.
EXELON SERVICES
---------------
Services is a nationwide provider of energy-related services to commercial and
industrial customers. The services are designed to reduce the risk, uncertainty,
and distraction that exist in the operating environment (i.e., equipment,
systems, and energy) surrounding customers' core business processes. Services
has become a regional leader in the mechanical services and energy marketplace,
with 8 locations in the Midwest.
SOLUTIONS
---------
Exelon Solutions is a facility solutions business organized around three
vertical customer segments. This business offers solutions to customer's
business problems through turn-key energy and operational projects. These
solutions are mainly procured through performance contracting in the Education,
Government and Healthcare segments. As a single-source provider, there are a
variety of elements included in a project, encompassing customer's demand-side
and supply-side requirements, which result in total facility solutions.
ENERGY
------
Exelon Energy is an energy retailer, selling electricity and natural gas to
industrial, commercial, and residential customers. The organization has an
established customer base in Pennsylvania, New Jersey, Massachusetts, Illinois,
Ohio and Michigan.
THERMAL TECHNOLOGIES
--------------------
Exelon Thermal Technologies owns and operates energy facilities throughout North
America. These plants produce and deliver chilled and heated water used for air
conditioning and heating in large commercial and industrial facilities.
Customers, under long-term contracts, receive energy from centralized facilities
instead of self-producing their cooling and heating. ETT is one of North
America's top thermal energy companies.
CAPITAL PARTNERS
----------------
Exelon Capital Partners (ECP) is the corporate venture capital division of
Exelon Enterprises. ECP's business charter is to identify new growth
opportunities, technologies and business models, and establish a network of new
business relationships through active investments in emerging companies. Exelon
Capital Partners will provide venture capital financial returns on its equity
investments.
EXELON COMMUNICATIONS
---------------------
Exelon Communications is engaged in two operating telecommunications businesses.
Exelon Communications entered the telecommunication space to take advantage of
its core competency of infrastructure management and to leverage its assets such
as rights of way, transmission towers, fiber optic networks, and a skilled work
force. Communications is working with experienced telecommunications partners to
operate a wireless phone network and local fiber optics communications services
in the Greater Philadelphia region.
Current Telecommunications Businesses
>> AT&T Wireless Digital PCS - a joint venture with AT&T Wireless Services
>> PECO Adelphia Communications, - a partnership with Adelphia Business
Solutions
AT&T WIRELESS SERVICES JOINT VENTURE
>> Organization
- Name of Entity: AT&T Wireless PCS of Philadelphia, LLC
- Ownership:
o Exelon - 49%
o AT&T Wireless Services (AWS) - 51%
>> AWS is a publicly traded wireless communications company with more than
16 million customers in the US.
>> Communications Services
- The partnership provides wireless voice Personal Communications
Services (PCS) to both business customers and consumers in the
greater Philadelphia Region.
- The service is branded and sold as AT&T Digital PCS.
- Distribution channels include AT&T Wireless stores, national
retail, dealers/ agents, e-commerce, and business-to-business
sales.
- Commercial operation began in October 1997.
>> Service Territory
- The partnership is licensed to provide Wireless Personal
Communications Services in the Philadelphia Major Trading Area
(MTA)
- Population of MTA is 9 million
- The MTA includes Philadelphia, Harrisburg, Lancaster, Reading,
State College, Wilmington DE, Dover DE, Trenton NJ, Atlantic City
NJ and other surrounding areas
>> PCS Network Buildout & Area of Business Focus
- Philadelphia
- Portions of Bucks, Chester, Delaware, and Montgomery Counties,
- Wilmington, DE,
- Salem Co. NJ, Gloucester Co. NJ, Burlington Co. NJ & Mercer Co. NJ
- Areas above represent a population of approximately 6 million
>> AT&T Wireless Services' Role
- Majority Member - 51% ownership of LLC
- AT&T Wireless Services provides day-to-day management of the LLC as
well as services provisioning, billing and network monitoring
>> Exelon Communications' Role
- Minority Member - 49 % ownership of LLC
- Project Manager for site acquisition, construction and maintenance
of PCS cell sites
- Landlord - lease transmission towers and other facilities for
attachment of PCS antennas and equipment
- PECO is receiving approximately $3.2 million per year in lease
revenue.
PECO ADELPHIA COMMUNICATIONS Partnership
>> Organization
- 50/50 General Partnership between Exelon and Adelphia Business
Solutions of Coudersport, PA
- Adelphia Business Solutions is a Competitive Local Exchange Carrier
(CLEC) and is majority owned by Adelphia Communications Corporation
>> Communications Services
- PECO Adelphia provides local and long distance communications
services as well as data networking services to businesses
- PECO Adelphia's services are provided through a 100% fiber optic
network
- The Partnership is currently connected to 34 Bell Atlantic offices
and has negotiated an Interconnection Agreement with Bell Atlantic
- The Partnership is connected to all of the major long distance
carriers within the Philadelphia area
>> Market Focus
- PECO Adelphia provides communications services primarily to large
and medium businesses
- Services are provided to small businesses in multi-tenant buildings
- PECO Adelphia has also been successful in serving Internet Service
Providers as well as education and health care providers
>> Service Territory
- Communications services are provided throughout the PECO Energy
service territory as well as Allentown, Bethlehem, Easton and
Reading.
- PECO Adelphia also resells a small number of lines in southern New
Jersey.
>> Fiber Network
- PECO Adelphia's network extends over 975 route miles and approx.
36,000 fiber miles
- Fiber network installation is performed by Exelon Communications
- All of PECO Adelphia's fiber network that is within the PECO Energy
service territory (about 640 miles) is owned by PECO Energy and is
leased to the Partnership
>> Adelphia's Role
- Adelphia is a leading supplier of communications services in 50
markets throughout the United States
- Adelphia provides day-to-day management of the partnership as well
as services provisioning, billing, and network monitoring
>> Exelon's Role
- Exelon designs, installs and maintains the fiber network.
- Exelon is also leading the local PECO Adelphia marketing campaign
- Exelon chairs the Partnership's Management Oversight Committee
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