UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number
IRS Employer Identification Number
EXELON CORPORATION
(a Pennsylvania corporation)
10 South Dearborn Street
P.O. Box 805379
Chicago, Illinois 60680-5379
(800) 483-3220
COMMONWEALTH EDISON COMPANY
(an Illinois corporation)
10 South Dearborn Street
Chicago, Illinois 60603-2300
(312) 394-4321
PECO ENERGY COMPANY
(a Pennsylvania corporation)
P.O. Box 8699
2301 Market Street
Philadelphia, Pennsylvania 19101-8699
(215) 841-4000
BALTIMORE GAS AND ELECTRIC COMPANY
(a Maryland corporation)
2 Center Plaza
110 West Fayette Street
Baltimore, Maryland 21201-3708
(410) 234-5000
PEPCO HOLDINGS LLC
(a Delaware limited liability company)
701 Ninth Street, N.W.
Washington, District of Columbia 20068-0001
(202) 872-2000
POTOMAC ELECTRIC POWER COMPANY
(a District of Columbia and Virginia corporation)
701 Ninth Street, N.W.
Washington, District of Columbia 20068-0001
(202) 872-2000
DELMARVA POWER & LIGHT COMPANY
(a Delaware and Virginia corporation)
500 North Wakefield Drive
Newark, Delaware 19702-5440
(202) 872-2000
ATLANTIC CITY ELECTRIC COMPANY
(a New Jersey corporation)
500 North Wakefield Drive
Newark, Delaware 19702-5440
(202) 872-2000
23-2990190
36-0938600
23-0970240
52-0280210
52-2297449
53-0127880
51-0084283
21-0398280
Commission
File Number
001-16169
001-01839
000-16844
001-01910
001-31403
001-01072
001-01405
001-03559
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
EXELON CORPORATION:
Common Stock, without par value
PECO ENERGY COMPANY:
Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative
Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and
unconditionally guaranteed by PECO Energy Company
EXC
EXC/28
The Nasdaq Stock Market LLC
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
COMMONWEALTH EDISON COMPANY:
Common Stock Purchase Warrants (1971 Warrants and Series B Warrants)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Yes
☐
Yes
☐
Yes x
Yes x
Yes
☐
Yes
☐
Yes
☐
Yes
☐
Yes ☐
Yes ☐
Yes ☐
Yes ☐
Yes ☐
Yes ☐
Yes ☐
Yes ☐
No x
No x
No
☐
No
☐
No x
No x
No x
No x
No x
No x
No x
No x
No x
No x
No x
No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated
filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric
Company
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Large Accelerated Filer x
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Large Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Accelerated Filer ☐
Non-accelerated Filer ☐
Non-accelerated Filer x
Non-accelerated Filer x
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
Non-accelerated Filer x
Non-accelerated Filer x
Non-accelerated Filer x
Non-accelerated Filer x
Non-accelerated Filer x
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-
Oxley Act by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant
recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x
The estimated aggregate market value of the voting and non-voting common equity held by nonaffiliates of each registrant as of June 30, 2023 was as follows:
Exelon Corporation Common Stock, without par value
Commonwealth Edison Company Common Stock, $12.50 par value
PECO Energy Company Common Stock, without par value
Baltimore Gas and Electric Company, without par value
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
The number of shares outstanding of each registrant’s Common stock as of January 31, 2024 was as follows:
Exelon Corporation Common Stock, without par value
Commonwealth Edison Company Common Stock, $12.50 par value
PECO Energy Company Common Stock, without par value
Baltimore Gas and Electric Company Common Stock, without par value
Pepco Holdings LLC
Potomac Electric Power Company Common Stock, $0.01 par value
Delmarva Power & Light Company Common Stock, $2.25 par value
Atlantic City Electric Company Common Stock, $3.00 par value
$40,536,144,047
No established market
None
None
Not applicable
None
None
None
999,538,542
127,021,399
170,478,507
1,000
Not applicable
100
1,000
8,546,017
Portions of the Exelon Proxy Statement for the 2023 Annual Meeting of Shareholders and the Commonwealth Edison Company 2023 Information Statement are incorporated by reference in Part III.
PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company meet the conditions set forth
in General Instruction I(1)(a) and (b) of Form 10-K and are therefore filing this Form in the reduced disclosure format.
Documents Incorporated by Reference
GLOSSARY OF TERMS AND ABBREVIATIONS
FILING FORMAT
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
WHERE TO FIND MORE INFORMATION
TABLE OF CONTENTS
Page No.
PART I
ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 1C.
ITEM 2.
ITEM 3.
ITEM 4.
PART II
ITEM 5.
ITEM 6.
ITEM 7.
BUSINESS
General
Utility Operations
Exelon's Strategy and Outlook
Employees
Environmental Matters and Regulation
Executive Officers of the Registrants
RISK FACTORS
UNRESOLVED STAFF COMMENTS
CYBERSECURITY
PROPERTIES
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
[RESERVED]
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Exelon Corporation
Executive Overview
Financial Results of Operations
Significant 2023 Transactions and Recent Developments
Other Key Business Drivers and Management Strategies
Critical Accounting Policies and Estimates
Results of Operations
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Liquidity and Capital Resources
ITEM 7A.
ITEM 8.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Exelon Corporation
Consolidated Statements of Operations and Comprehensive Income
1
5
5
5
6
6
7
10
11
13
18
20
31
31
33
34
34
35
39
40
40
40
40
42
45
47
55
55
58
62
65
66
69
73
75
91
93
117
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Shareholders' Equity
Commonwealth Edison Company
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Shareholders' Equity
PECO Energy Company
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Shareholder's Equity
Baltimore Gas and Electric Company
Statements of Operations and Comprehensive Income
Statements of Cash Flows
Balance Sheets
Statements of Changes in Shareholder's Equity
Pepco Holdings LLC
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Member's Equity
Potomac Electric Power Company
Statements of Operations and Comprehensive Income
Statements of Cash Flows
Balance Sheets
Statements of Changes in Shareholder's Equity
Delmarva Power & Light Company
Statements of Operations and Comprehensive Income
Statements of Cash Flows
Balance Sheets
Statements of Changes in Shareholder's Equity
Atlantic City Electric Company
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Balance Sheets
Consolidated Statements of Changes in Shareholder's Equity
Combined Notes to Consolidated Financial Statements
1. Significant Accounting Policies
2. Discontinued Operations
Page No.
118
119
121
122
123
124
126
127
128
129
131
132
133
134
136
137
138
139
141
142
143
144
146
147
148
149
151
152
153
154
156
157
164
3. Regulatory Matters
4. Revenue from Contracts with Customers
5. Segment Information
6. Accounts Receivable
7. Property, Plant, and Equipment
8. Jointly Owned Electric Utility Plant
9. Asset Retirement Obligations
10. Leases
11. Asset Impairments
12. Intangible Assets
13. Income Taxes
14. Retirement Benefits
15. Derivative Financial Instruments
16. Debt and Credit Agreements
17. Fair Value of Financial Assets and Liabilities
18. Commitments and Contingencies
19. Shareholders' Equity
20. Stock-Based Compensation Plans
21. Changes in Accumulated Other Comprehensive Income (Loss)
22. Supplemental Financial Information
23. Related Party Transactions
ITEM 9.
ITEM 9A.
ITEM 9B.
ITEM 9C.
PART III
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.
PART IV
ITEM 15.
ITEM 16.
SIGNATURES
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
CONTROLS AND PROCEDURES
OTHER INFORMATION
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTING FEES AND SERVICES
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
FORM 10-K SUMMARY
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Pepco Holdings LLC
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Page No.
167
189
191
198
200
202
203
203
209
209
211
218
230
234
242
249
258
259
263
264
269
272
272
272
272
273
274
275
276
277
278
322
323
323
324
325
326
327
328
329
330
Table of Contents
Exelon Corporation and Related Entities
Exelon
ComEd
PECO
BGE
Pepco Holdings or PHI
Pepco
DPL
ACE
Registrants
Utility Registrants
Legacy PHI
BSC
EEDC
Exelon Corporate
Exelon Enterprises
Exelon InQB8R
PCI
PEC L.P.
PECO Trust III
PECO Trust IV
Pepco Energy Services or PES
PHI Corporate
PHISCO
UII
Former Related Entities
Constellation
Generation or CEG
CENG
GLOSSARY OF TERMS AND ABBREVIATIONS
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Pepco Holdings LLC (formerly Pepco Holdings, Inc.)
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, collectively
ComEd, PECO, BGE, Pepco, DPL, and ACE, collectively
PHI, Pepco, DPL, ACE, PES, and PCI, collectively
Exelon Business Services Company, LLC
Exelon Energy Delivery Company, LLC
Exelon in its corporate capacity as a holding company
Exelon Enterprises Company, LLC
Exelon InQB8R, LLC
Potomac Capital Investment Corporation and its subsidiaries
PECO Energy Capital, L.P.
PECO Energy Capital Trust III
PECO Energy Capital Trust IV
Pepco Energy Services, Inc. and its subsidiaries
PHI in its corporate capacity as a holding company
PHI Service Company
Unicom Investments, Inc.
Constellation Energy Corporation
Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC, a subsidiary of Exelon as of December
31, 2021 prior to separation on February 1, 2022)
Constellation Energy Nuclear Group, LLC
1
Table of Contents
Other Terms and Abbreviations
2022 Form 10-K
ABO
AECs
AFUDC
AMI
AOCI
ARO
ATM
ARP
BGS
BSA
CBAs
CEJA
CERCLA
CIP
Clean Air Act
Clean Water Act
CMC
CODMs
Conectiv
DC PLUG
DCPSC
DEPSC
DOEE
DPA
DPP
EIMA
EPA
ERCOT
ERISA
EROA
ERP
ETAC
FEJA
FERC
GAAP
GCR
GDP
GHG
GSA
GWhs
ICC
GLOSSARY OF TERMS AND ABBREVIATIONS
The Registrants' Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 14,
2023
Accumulated Benefit Obligation
Alternative Energy Credits that are issued for each megawatt hour of generation from a qualified alternative energy source
Allowance for Funds Used During Construction
Advanced Metering Infrastructure
Accumulated Other Comprehensive Income (Loss)
Asset Retirement Obligation
At the market
Alternative Revenue Program
Basic Generation Service
Bill Stabilization Adjustment
Collective Bargaining Agreements
Climate and Equitable Jobs Act; Illinois Public Act 102-0662 signed into law on September 15, 2021
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
Conservation Incentive Program
Clean Air Act of 1963, as amended
Federal Water Pollution Control Amendments of 1972, as amended
Carbon Mitigation Credit
Chief Operating Decision Makers
Conectiv, LLC, a wholly owned subsidiary of PHI and the parent of DPL and ACE during the Predecessor periods
District of Columbia Power Line Undergrounding Initiative
District of Columbia Public Service Commission
Delaware Public Service Commission
Department of Energy & Environment
Deferred Prosecution Agreement
Deferred Purchase Price
Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
United States Environmental Protection Agency
Electric Reliability Council of Texas
Employee Retirement Income Security Act of 1974, as amended
Expected Rate of Return on Assets
Enterprise Resource Program
Energy Transition Assistance Charge
Illinois Public Act 99-0906 or Future Energy Jobs Act
Federal Energy Regulatory Commission
Generally Accepted Accounting Principles in the United States
Gas Cost Rate
Gross Domestic Product
Greenhouse Gas
Generation Supply Adjustment
Gigawatt hours
Illinois Commerce Commission
2
Table of Contents
Other Terms and Abbreviations
IIJA
IIP
Illinois Settlement Legislation
IPA
IRA
IRC
IRS
ISOs
LNG
LTIP
LTRRPP
MDPSC
MGP
mmcf
MMG
MRP
MRV
MW
MWh
N/A
NAV
NDT
NERC
NJBPU
NPDES
NPNS
NPS
NRD
OCI
OPEB
PAPUC
PCBs
PGC
PJM
PJM Tariff
POLR
PPA
PP&E
PRPs
PSEG
RCRA
REC
Regulatory Agreement Units
RES
RFP
GLOSSARY OF TERMS AND ABBREVIATIONS
Infrastructure Investment and Jobs Act
Infrastructure Investment Program
Legislation enacted in 2007 affecting electric utilities in Illinois
Illinois Power Agency
Inflation Reduction Act
Internal Revenue Code
Internal Revenue Service
Independent System Operators
Liquefied Natural Gas
Long-Term Incentive Plan
Long-Term Renewable Resources Procurement Plan
Maryland Public Service Commission
Manufactured Gas Plant
Million Cubic Feet
Middle Mile Grant
Multi-Year Rate Plan
Market-Related Value
Megawatt
Megawatt hour
Not applicable
Net Asset Value
Nuclear Decommissioning Trust
North American Electric Reliability Corporation
New Jersey Board of Public Utilities
National Pollutant Discharge Elimination System
Normal Purchase Normal Sale scope exception
National Park Service
Natural Resources Damages
Other Comprehensive Income
Other Postretirement Employee Benefits
Pennsylvania Public Utility Commission
Polychlorinated Biphenyls
Purchased Gas Cost Clause
PJM Interconnection, LLC
PJM Open Access Transmission Tariff
Provider of Last Resort
Purchase Power Agreement
Property, Plant, and Equipment
Potentially Responsible Parties
Public Service Enterprise Group Incorporated
Resource Conservation and Recovery Act of 1976, as amended
Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
Nuclear generating units or portions thereof whose decommissioning-related activities are subject to regulatory agreements
with the ICC and PAPUC
Retail Electric Suppliers
Request for Proposal
3
Table of Contents
Other Terms and Abbreviations
Rider
RGGI
ROE
ROU
RPS
RTEP
RTO
S&P
SEC
SOA
SOFR
SOS
SSA
STRIDE
TCJA
Transition Bonds
USAO
ZEC
GLOSSARY OF TERMS AND ABBREVIATIONS
Reconcilable Surcharge Recovery Mechanism
Regional Greenhouse Gas Initiative
Return on equity
Right-of-use
Renewable Energy Portfolio Standards
Regional Transmission Expansion Plan
Regional Transmission Organization
Standard & Poor’s Ratings Services
United States Securities and Exchange Commission
Society of Actuaries
Secured Overnight Financing Rate
Standard Offer Service
Social Security Administration
Maryland Strategic Infrastructure Development and Enhancement Program
Tax Cuts and Jobs Act
Transition Bonds issued by Atlantic City Electric Transition Funding LLC
United States Attorney's Office for the Northern District of Illinois
Zero Emission Credit
4
Table of Contents
FILING FORMAT
This combined Annual Report on Form 10-K is being filed separately by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco
Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is
filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of federal securities laws that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,”
“targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” "should," and variations on such words, and similar expressions that reflect our current views with respect to
future events and operational, economic and financial performance, are intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, including those factors discussed with
respect to the Registrants discussed in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, (c) Part II, ITEM 8.
Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies, and (d) other factors discussed in filings with the SEC by the Registrants.
Investors are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly
release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents
are also available to the public from commercial document retrieval services and free of charge at the Registrants’ website at www.exeloncorp.com. Information contained on the Registrants’ website shall
not be deemed incorporated into, or to be a part of, this Report.
WHERE TO FIND MORE INFORMATION
5
Table of Contents
ITEM 1.
General
PART I
Corporate Structure and Business and Other Information
Exelon is a utility services holding company engaged in the energy transmission and distribution businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation. The separation was completed on February 1, 2022, creating two publicly traded
companies, Exelon and Constellation. See Note 2 – Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information.
Name of Registrant
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Purchase and regulated retail sale of electricity
Transmission and distribution of electricity to retail customers
Business
Northern Illinois, including the City of Chicago
Service Territories
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Southeastern Pennsylvania, including the City of Philadelphia (electricity)
Pennsylvania counties surrounding the City of Philadelphia (natural gas)
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Central Maryland, including the City of Baltimore (electricity and natural gas)
Pepco Holdings LLC
Utility services holding company engaged, through its reportable segments: Pepco, DPL, and ACE
Service Territories of Pepco, DPL, and ACE
Potomac Electric Power Company
Purchase and regulated retail sale of electricity
District of Columbia and Major portions of Montgomery and Prince George’s
Delmarva Power & Light Company
Atlantic City Electric Company
Business Services
Transmission and distribution of electricity to retail customers
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Portions of Delaware and Maryland (electricity)
Portions of New Castle County, Delaware (natural gas)
Purchase and regulated retail sale of electricity
Transmission and distribution of electricity to retail customers
Portions of Southern New Jersey
Counties, Maryland
Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, finance, information technology, and supply
management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, finance, engineering, customer operations, transmission
and distribution planning, asset management, system operations, and power procurement, to PHI operating Registrants. The costs of BSC and PHISCO are directly charged or allocated to the applicable
subsidiaries. The results of Exelon’s corporate operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
6
Table of Contents
Utility Registrants
Utility Operations
Service Territories and Franchise Agreements
The following table presents the size of service territories, populations of each service territory, and the number of customers within each service territory for the Utility Registrants as of December 31, 2023:
ComEd
PECO
BGE
Pepco
DPL
ACE
Service Territories (in square miles)
Electric
Natural Gas
(a)
Total
Service Territory Population (in millions)
Electric
Natural Gas
(b)
Total
Main City
Main City Population
Number of Customers (in millions)
Electric
Natural Gas
(c)
Total
11,450
N/A
11,450
1,900
1,900
2,100
Chicago
9.2
N/A
9.2
2.6
4.1
N/A
4.1
Philadelphia
4.1
2.5
4.1
1.6
1.7
0.6
1.7
2,300
3,050
3,250
3.0
2.9
3.2
0.6
1.3
0.7
1.3
Baltimore
650
N/A
650
2.4
N/A
2.4
District of Columbia
Wilmington
0.7
0.9
N/A
0.9
5,400
250
5,400
1.5
0.6
1.5
0.1
0.6
0.1
0.6
2,700
N/A
2,700
Atlantic City
1.2
N/A
1.2
0.1
0.6
N/A
0.6
___________
(a) The number of total service territory square miles counts once only a square mile that includes both electric and natural gas services, and thus does not represent the combined total square mileage of electric and
natural gas service territories.
(b) The total service territory population counts once only an individual who lives in a region that includes both electric and natural gas services, and thus does not represent the combined total population of electric and
natural gas service territories.
(c) The number of total customers counts once only a customer who is both an electric and a natural gas customer, and thus does not represent the combined total of electric customers and natural gas customers.
The Utility Registrants have the necessary authorizations to perform their current business of providing regulated electric and natural gas distribution services in the various municipalities and territories in
which they now supply such services. These authorizations include charters, franchises, permits, and certificates of public convenience issued by local and state governments and state utility commissions.
ComEd's, BGE's (gas), Pepco DC's, and ACE's rights are generally non-exclusive while PECO's, BGE's (electric), Pepco MD's, and DPL's rights are generally exclusive. Certain authorizations are
perpetual while others have varying expiration dates. The Utility Registrants anticipate working with the appropriate governmental bodies to extend or replace the authorizations prior to their expirations.
The current ComEd Franchise Agreement with the City of Chicago (the City) has been in force since 1992. The Franchise Agreement became terminable on one year notice as of December 31, 2020. It
now continues in effect indefinitely unless and until either party issues a notice of termination, effective one year later, or it is replaced by mutual agreement with a new franchise agreement between
ComEd and the City. If either party terminates and no new agreement is reached between the parties, the parties could continue with ComEd providing electric services within the City with no franchise
agreement in place. The City also has an option to terminate and purchase the ComEd system (“municipalize”), which also requires one year notice. Neither party has issued a notice of termination at this
time, the City has not exercised its municipalization option, and no new agreement has become effective. ComEd is in the process of pursuing a new agreement with the City.
While Exelon and ComEd cannot predict the ultimate outcome, fundamental changes in the agreement or other adverse actions affecting ComEd’s business in the City would require changes in their
business planning models
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and operations and could have a material adverse impact on Exelon’s and ComEd’s consolidated financial statements. If the City were to disconnect from the ComEd system, ComEd would seek full
compensation for the business and its associated property taken by the City, as well as for all damages resulting to ComEd and its system. ComEd would also seek appropriate compensation for stranded
costs with FERC.
Utility Regulations
State utility commissions regulate the Utility Registrants' electric and gas distribution rates and service, issuances of certain securities, and certain other aspects of the business. The following table
outlines the state commissions responsible for utility oversight:
Registrant
ComEd
PECO
BGE
Pepco
DPL
ACE
Commission
ICC
PAPUC
MDPSC
DCPSC/MDPSC
DEPSC/MDPSC
NJBPU
The Utility Registrants are public utilities under the Federal Power Act subject to regulation by FERC related to transmission rates and certain other aspects of the utilities' business. The U.S. Department
of Transportation also regulates pipeline safety and other areas of gas operations for PECO, BGE, and DPL. The U.S. Department of Homeland Security (Transportation Security Administration) provided
new security directives in 2021 that regulate cyber risks for certain gas distribution operators. Additionally, the Utility Registrants are subject to NERC mandatory reliability standards, which protect the
nation's bulk power system against potential disruptions from cyber and physical security breaches.
Seasonality Impacts on Delivery Volumes
The Utility Registrants' electric distribution volumes are generally higher during the summer and winter months when temperature extremes create demand for either summer cooling or winter heating. For
PECO, BGE, and DPL, natural gas distribution volumes are generally higher during the winter months when cold temperatures create demand for winter heating.
ComEd, BGE, Pepco, DPL Maryland, and ACE have electric distribution decoupling mechanisms and BGE has a natural gas decoupling mechanism that eliminate the favorable and unfavorable impacts of
weather and customer usage patterns on electric distribution and natural gas delivery volumes. As a result, ComEd's, BGE's, Pepco's, DPL Maryland's, and ACE's electric distribution revenues and BGE's
natural gas distribution revenues are not materially impacted by delivery volumes. PECO's and DPL Delaware's electric distribution revenues and natural gas distribution revenues are impacted by delivery
volumes.
Electric and Natural Gas Distribution Services
The Utility Registrants are allowed to recover reasonable costs and fair and prudent capital expenditures associated with electric and natural gas distribution services and earn a return on those capital
expenditures, subject to commission approval. ComEd recovers costs through a performance-based rate formula. ComEd is required to file an update to the performance-based rate formula on an annual
basis. On September 15, 2021, Illinois passed CEJA, which contains requirements for ComEd to transition away from the performance-based rate formula by the end of 2022 and would allow for the
submission of either a general rate or multi-year rate plan. On February 3, 2022, the ICC approved a tariff that establishes the process under which ComEd will reconcile its 2022 and 2023 rate year
revenue requirements with actual costs. ComEd's electric distribution costs are currently recovered through a multi-year rate plan with case proceedings as filed with the ICC. PECO's and DPL's electric
and gas distribution costs and ACE's electric distribution costs have generally been recovered through rate case proceedings, with PECO utilizing a fully projected future test year while DPL and ACE
utilize a historical test year. BGE’s electric and gas distribution costs and Pepco’s and DPL Maryland's electric distribution costs are currently recovered through multi-year rate case proceedings, as the
MDPSC and the DCPSC allow utilities to file multi-year rate plans. In certain instances, the Utility Registrants use specific recovery mechanisms
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as approved by their respective regulatory agencies. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
ComEd, Pepco, DPL and ACE customers have the choice to purchase electricity, and PECO and BGE customers have the choice to purchase electricity and natural gas from competitive electric
generation and natural gas suppliers. DPL customers, with the exception of certain commercial and industrial customers, do not have the choice to purchase natural gas from competitive natural gas
suppliers. The Utility Registrants remain the distribution service providers for all customers and are obligated to deliver electricity and natural gas to customers in their respective service territories while
charging a regulated rate for distribution service. In addition, the Utility Registrants also retain significant default service obligations to provide electricity to certain groups of customers in their respective
service areas who do not choose a competitive electric generation supplier. PECO, BGE, and DPL also retain significant default service obligations to provide natural gas to certain groups of customers in
their respective service areas who do not choose a competitive natural gas supplier.
For customers that choose to purchase electric generation or natural gas from competitive suppliers, the Utility Registrants act as the billing agent and therefore do not record Operating revenues or
Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from a Utility Registrant, the Utility Registrants are
permitted to recover the electricity and natural gas procurement costs from customers without mark-up or with a slight mark-up and therefore record the amounts in Operating revenues and Purchased
power and fuel expense. As a result, fluctuations in electricity or natural gas sales and procurement costs have no significant impact on the Utility Registrants’ Net income.
See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Results of Operations and Note 3 — Regulatory Matters of the Combined
Notes to Consolidated Financial Statements for additional information regarding electric and natural gas distribution services.
Procurement of Electricity and Natural Gas
Exelon does not generate the electricity it delivers. The Utility Registrants' electric supply for its customers is primarily procured through contracts as directed by their respective state laws and regulatory
commission actions. The Utility Registrants procure electricity supply from various approved bidders or from purchases on the PJM operated markets.
PECO's, BGE’s, and DPL's natural gas supplies are purchased from a number of suppliers for terms that currently do not exceed three years. PECO, BGE, and DPL each have annual firm transportation
contracts of 445,000 mmcf, 268,000 mmcf, and 44,000 mmcf, respectively, for delivery of gas. To supplement gas transportation and supply at times of heavy winter demands and in the event of temporary
emergencies, PECO, BGE, and DPL have available storage capacity from the following sources:
PECO
BGE
DPL
LNG Facility
Propane-Air Plant
Underground Storage Service Agreements
(a)
Peak Natural Gas Sources (in mmcf)
1,200
1,056
250
150
550
N/A
19,400
22,000
3,900
___________
(a) Natural gas from underground storage represents approximately 27%, 42%, and 33% of PECO's, BGE’s, and DPL's 2023-2024 heating season pipeline capacity, respectively.
PECO, BGE, and DPL have long-term interstate pipeline contracts and also participate in the interstate markets by releasing pipeline capacity or bundling pipeline capacity with gas for off-system sales.
Off-system gas sales are low-margin direct sales of gas to wholesale suppliers of natural gas. Earnings from these activities are shared between the utilities and customers. PECO, BGE, and DPL make
these sales as part of a program to balance its supply and cost of natural gas. The off-system gas sales are not material to PECO, BGE, and DPL.
See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, Commodity Price Risk (All Registrants), for additional information regarding Utility Registrants' contracts to
procure electric supply and natural gas.
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Energy Efficiency Programs
The Utility Registrants are generally allowed to recover costs associated with the energy efficiency and demand response programs they offer. Each commission approved program seeks to meet
mandated electric consumption reduction targets and implement demand response measures to reduce peak demand. The programs are designed to meet standards required by each respective
regulatory agency.
ComEd, with limited exceptions, earns a return on its energy efficiency costs through a regulatory asset. ACE earns a return on most of its energy efficiency and demand response program costs through a
regulatory asset. Historically, BGE, Pepco Maryland, and DPL Maryland deferred most of their energy efficiency program costs to a regulatory asset and either deferred most of their demand response
program costs to a regulatory asset or capitalized them. Beginning in 2024, BGE, Pepco, and DPL will begin deferring less energy efficiency and demand response program costs to a regulatory asset.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Capital Investment
The Utility Registrants' businesses are capital intensive and require significant investments, primarily in electric transmission and distribution and natural gas transportation and distribution facilities, to
ensure the adequate capacity, reliability, and efficiency of their systems. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,
Liquidity and Capital Resources, for additional information regarding projected 2024 capital expenditures.
Transmission Services
Under FERC’s open access transmission policy, the Utility Registrants, as owners of transmission facilities, are required to provide open access to their transmission facilities under filed tariffs at cost-
based rates approved by FERC. The Utility Registrants and their affiliates are required to comply with FERC’s Standards of Conduct regulation governing the communication of non-public transmission
information between the transmission owner’s employees and wholesale merchant employees.
PJM is the regional grid operator and operates pursuant to FERC-approved tariffs. PJM is the transmission provider under, and the administrator of, the PJM Tariff. PJM operates the PJM energy, capacity,
and other markets, and, through central dispatch, controls the day-to-day operations of the bulk power system for the region. The Utility Registrants are members of PJM and provide regional transmission
service pursuant to the PJM Tariff. The Utility Registrants and the other transmission owners in PJM have turned over control of certain of their transmission facilities to PJM, and their transmission
systems are under the dispatch control of PJM. Under the PJM Tariff, transmission service is provided on a region-wide, open-access basis using the transmission facilities of the PJM transmission
owners.
The Utility Registrants' transmission rates are based on a FERC approved formula and established on an annual basis as shown below:
ComEd
PECO
BGE
Pepco
DPL
ACE
Exelon’s Strategy and Outlook
Approval Date
January 2008
December 2019
April 2006
April 2006
April 2006
April 2006
Following the separation on February 1, 2022, Exelon is now a transmission and distribution company, focused on delivering electricity and natural gas service to our customers and communities. Exelon's
businesses remain focused on maintaining industry leading operational excellence, meeting or exceeding their financial commitments, ensuring timely recovery on investments to enable customer benefits,
supporting clean energy
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policies including those that advance our jurisdictions' clean energy targets, and continued commitment to corporate responsibility.
Exelon’s strategy is to improve reliability and operations, enhance the customer experience, and advance clean and affordable energy choices, while ensuring ratemaking mechanisms provide the utilities
fair financial returns. The jurisdictions in which Exelon has operations have set some of the nation's leading clean energy targets and our strategy is to enable that future for all our stakeholders. The Utility
Registrants invest in rate base that supports service to our customers and the community, including investments that sustain and improve reliability and resiliency and that enhance the service experience
of our customers. The Utility Registrants make these investments prudently at a reasonable cost to customers. Exelon seeks to leverage its scale and expertise across the utilities platform through
enhanced standardization and sharing of resources and best practices to achieve improved operational and financial results.
Management continually evaluates growth opportunities aligned with Exelon’s businesses, assets, and markets, leveraging Exelon’s expertise in those areas and offering sustainable returns.
The Utility Registrants anticipate investing approximately $35 billion over the next four years in electric and natural gas infrastructure improvements and modernization projects, including smart grid
technology, storm hardening, advanced reliability technologies, and transmission projects, which is projected to result in an increase to current rate base of approximately $19 billion by the end of 2027.
These investments provide greater reliability, improved service for our customers, increased capacity to accommodate new technologies and support a cleaner grid, and a stable return for the company.
In August 2021, Exelon announced a Path to Clean goal to collectively reduce its operations-driven GHG emissions 50% by 2030 against a 2015 baseline and to reach net zero operations-driven GHG
emissions by 2050, while supporting customers and communities in achieving their GHG reduction goals (Path to Clean). Exelon's quantitative goals include its Scope 1 and 2 GHG emissions, with the
exception of Scope 2 emissions associated with system losses of electric power delivered to customers ("line losses"), and build upon Exelon's long-standing commitment to reducing our GHG emissions.
Exelon's Path to Clean efforts extend beyond these quantitative goals to include efforts such as customer energy efficiency programs, which support reductions in customers' direct emissions and have the
potential to reduce Exelon's Scope 3 emissions and Scope 2 line losses as well. See ITEM 1. BUSINESS — Environmental Matters and Regulation — Climate Change for additional information.
Various market, financial, regulatory, legislative, and operational factors could affect Exelon's success in pursuing its strategies. Exelon continues to assess infrastructure, operational, policy, and legal
solutions to these issues. See ITEM 1A. RISK FACTORS for additional information.
Employees
The Registrants strive to create a workplace culture that promotes and embodies diversity, inclusion, innovation, and safety for their employees. In order to provide the services and products that their
customers expect, the Registrants aspire to create teams that reflect the diversity of the communities that the Registrants serve. Therefore, the Registrants take steps to attract and retain highly qualified
and diverse talent and seek to create hiring and promotion practices that are equitable and neutralize any bias, including unconscious bias. The Registrants provide growth opportunities, competitive
compensation and benefits, and a variety of training and development programs. The Registrants are committed to helping all employees grow their skills and careers largely through numerous training
opportunities, mentorship programs, continuous feedback and development discussions, and evaluations. Employees are encouraged to thrive outside the workplace as well. The Registrants provide a full
suite of wellness benefits targeted at supporting work-life balance, physical, mental and financial health, and industry-leading paid leave policies.
The Registrants typically conduct an employee engagement survey every other year to help identify organizational strengths and areas of opportunity for growth. The survey results are reviewed with
senior management and the Exelon Board of Directors.
Diversity Metrics
The following tables show diversity metrics for all employees and management as of December 31, 2023.
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Employees
Female
(a)(b)
People of Color
Aged <30
(a)(b)
Aged 30-50
Aged >50
Total Employees
(c)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
5,637
8,174
2,295
11,189
6,478
19,962
1,672
2,822
817
3,976
1,881
6,674
813
1,084
406
1,592
1,040
3,038
808
1,273
319
1,914
1,062
3,295
1,320
1,895
460
2,352
1,471
4,283
335
867
157
754
443
1,354
137
233
107
491
320
918
(d)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Management
Female
(a)(b)
People of Color
(a)(b)
Aged <30
Aged 30-50
Aged >50
Within 10 years of retirement eligibility
Total Employees in Management
(c)
1,159
1,303
21
2,045
1,410
1,998
3,476
268
388
4
580
384
551
968
146
143
4
208
173
228
385
138
190
3
314
172
244
489
251
313
5
447
292
412
744
58
119
1
123
66
102
190
14
35
1
63
44
58
108
107
158
65
351
205
621
21
30
2
45
40
58
87
__________
(a) To effectuate Exelon's pay equity goals, Exelon conducts analysis on gender and racial pay equity.
(b)
(c) Total employees represents the sum of the aged categories.
(d) Management is defined as executive/senior level officials and managers as well as all employees who have direct reports and/or supervisory responsibilities.
Information concerning women and people of color is based on self-disclosed information.
Turnover Rates
As turnover is inherent, management succession planning is performed and tracked for all executives and critical key manager positions. Management frequently reviews succession planning to ensure the
Registrants are prepared when positions become available.
The table below shows the average turnover rate for all employees for the last three years of 2021 to 2023.
Retirement Age
Voluntary
Non-Voluntary
Collective Bargaining Agreements
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
3.41 %
3.07 %
0.87 %
3.84 %
2.63 %
0.73 %
3.97 %
2.92 %
1.13 %
2.85 %
2.08 %
0.88 %
3.36 %
2.83 %
1.08 %
3.20 %
3.25 %
1.76 %
3.71 %
1.73 %
0.66 %
3.79 %
2.29 %
0.75 %
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Approximately 43% of Exelon’s employees participate in CBAs. The following table presents employee information, including information about CBAs, as of December 31, 2023.
Total Employees Covered by CBAs
Number of CBAs
CBAs New and Renewed in 2023
(a)
Total Employees Under CBAs
New and Renewed
in 2023
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
8,555
3,583
1,438
1,433
2,096
860
637
405
10
2
2
1
5
1
2
2
2
—
—
1
1
—
—
1
1,813
—
—
1,433
380
—
—
380
__________
(a) Does not include CBAs that were extended in 2023 while negotiations are ongoing for renewal.
Environmental Matters and Regulation
The Registrants are subject to comprehensive and complex environmental legislation and regulation at the federal, state, and local levels, including requirements relating to climate change, air and water
quality, solid and hazardous waste, and impacts on species and habitats.
The Exelon Board of Directors is responsible for overseeing the management of environmental matters. Exelon has a management team to address environmental compliance and strategy, including the
CEO; the Senior Vice President and Chief Strategy and Sustainability Officer; as well as senior management of the Utility Registrants. Performance of those individuals directly involved in environmental
compliance and strategy is reviewed and affects compensation as part of the annual individual performance review process. The Audit and Risk Committee oversees compliance with environmental laws
and regulations, including environmental risks related to Exelon's operations and facilities, as well as SEC disclosures related to environmental matters. Exelon's Corporate Governance Committee has the
authority to oversee Exelon’s climate change and sustainability policies and programs, as discussed in further detail below. The respective Boards of the Utility Registrants oversee environmental issues
related to these companies. The Exelon Board of Directors has general oversight responsibilities for ESG matters, including strategies and efforts to protect and improve the quality of the environment.
Climate Change
As detailed below, the Registrants face climate change mitigation and transition risks as well as adaptation risks. Mitigation and transition risks include changes to the energy systems as a result of new
technologies, changing customer expectations and/or voluntary GHG goals, as well as local, state or federal regulatory requirements intended to reduce GHG emissions. Adaptation risk refers to risks to
the Registrants' facilities or operations that may result from changes to the physical climate and environment, such as changes to temperature, weather patterns and sea level.
Climate Change Mitigation and Transition
The Registrants support comprehensive federal climate legislation that addresses the urgent need to substantially reduce national GHG emissions while providing appropriate protections for consumers,
businesses, and the economy. In the absence of comprehensive federal climate legislation, Exelon supports the EPA moving forward with meaningful regulation of GHG emissions under the Clean Air Act.
The Registrants currently are subject to, and may become subject to additional, federal and/or state legislation and/or regulations addressing GHG emissions. The direct (Scope 1) GHG emission sources
associated with the Registrants include sulfur hexafluoride (SF6) leakage from electric transmission and distribution operations, fossil fuel combustion in motor vehicles and refrigerant leakage from chilling
and cooling equipment. In addition, PECO, BGE, and DPL, as distributors of natural gas, have natural gas (methane) leakage on the natural gas systems. The Registrants also have indirect (Scope 2 and
3) emissions associated with the production of the
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electricity they consume and deliver, and indirect (Scope 3) emissions associated with the production of natural gas they deliver and consumer use of such natural gas.
Exelon uses definitions and protocols provided by the World Resources Institute for its GHG inventory. In 2022, Exelon's Scope 1 and 2 GHG emissions, were just over 5.7 million metric tons carbon
dioxide equivalent using the World Resources Institute Corporate Standard Market-based accounting. Of these emissions, 0.5 million metric tons are considered to be operations-driven and in more direct
control of our employees and processes. The majority of these operations-driven emissions are fugitive emissions from the gas delivery systems of Registrants PECO, BGE, and DPL. The remaining 5.2
million metric tons, approximately 91%, are the indirect emissions associated with the electric transmission and distribution system and primarily consists of losses resulting from the Utility Registrant's
delivery of electricity to their customers (line losses). These emissions are driven primarily by customer demand for electricity and the mix of generation assets supplying energy to the electric grid. The
Registrants do not own generation and must comply with applicable legal and regulatory requirements governing procurement of electricity for delivery to retail customers and use of the system to support
other transmission transactions. However, the Registrants do engage in efforts that help to reduce these emissions, including customer programs to drive customer energy efficiency, to help manage peak
demands, and to enable distributed solar generation.
In August 2021, Exelon announced a Path to Clean goal to collectively reduce its operations-driven GHG emissions 50% by 2030 against a 2015 baseline, and to reach net zero operations-driven GHG
emissions by 2050, while also supporting customers and communities to achieve their clean energy and emissions reduction goals. Exelon’s quantitative goals include its Scope 1 and 2 GHG emissions
with the exception of Scope 2 line losses, and build upon Exelon's long-standing commitment to reducing our GHG emissions. Exelon's activities in support of the Path to Clean goal will include efficiency
and clean electricity for operations, vehicle fleet electrification, equipment and processes to reduce sulfur hexafluoride (SF6) leakage, investments in natural gas infrastructure to minimize methane leaks
and increase safety and reliability, and investment and collaboration to develop new technologies. Beyond 2030, Exelon recognizes that technology advancement and continued policy support will be
needed to ensure achievement of Net-Zero by 2050. Exelon is laying the groundwork by partnering with national labs, universities and research consortia to research, develop, and pilot clean technologies
that will be needed, as well as working with our states, jurisdictions and policy makers to understand the scope and scale of energy transformation, and needed policies and incentives, that will be needed
to reach local ambitions for GHG emissions reductions. The Utility Registrants are also supporting customers and communities to achieve their clean energy and emissions goals through significant energy
efficiency programs. During 2024 - 2027, estimated customer program energy efficiency investments across the Utility Registrants total $5.1 billion. These programs enable customer savings through home
energy audits, lighting discounts, appliance recycling, home improvement rebates, equipment upgrade incentives and innovative programs like smart thermostats and combined heat and power programs.
As an energy delivery company, Exelon can play a role in helping to reduce GHG emissions in its service territories. In connecting end users of energy to electric and gas supply, Exelon can leverage its
assets and customer interface to help support efficient use of lower emitting resources as they become available. Electrification, where feasible, for transportation, buildings, and industry coupled with
simultaneous decarbonization of electric generation, can be an important means to reduce emissions. Exelon is advocating for public policy supportive of vehicle electrification, investing in enabling
infrastructure and technology, and supporting customer education and adoption. In addition, the Utility Registrants have a goal to electrify 30% of their own vehicle fleet by 2025, increasing to 50% by 2030.
Clean fuels and other emerging technologies can also support the transition, lessen the strain on electric system expansion, and support energy system resiliency. Exelon, and its registrants PECO, BGE,
and DPL that own gas distribution assets, are also continuing to explore these other decarbonization opportunities, supporting pilots of emerging energy technologies and clean fuels to support both
operational and customer-driven emissions reductions. The energy transition may present challenges for the Utility Registrants and their service territories. Exelon believes its market and business model
could be significantly affected by the transition of the energy system, such as through an increased electric load and decreased demand for natural gas, potentially accompanied by changes in technology,
customer expectations, and/or regulatory structures. See ITEM 1A. RISK FACTORS. The Registrants are potentially affected by emerging technologies that could over time affect or transform the energy
industry.
Climate Change Adaptation
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The Registrants' facilities and operations are subject to the impacts of global climate change. Long-term shifts in climactic patterns, such as sustained higher temperatures and sea level rise, may present
challenges for the Registrants and their service territories. Exelon believes its operations could be significantly affected by the physical risks of climate change. See ITEM 1A. RISK FACTORS for additional
information related to the Registrants' risks associated with climate change.
The Registrants' assets undergo seasonal readiness efforts to ensure that they are prepared for the weather projections for the summer and winter months. The Registrants consider and review national
climate assessments to inform their planning. Each of the Utility Registrants also has well established system recovery plans and is investing in its systems to install advanced equipment and reinforce the
local electric system, making it more weather resistant and less vulnerable to anticipated storm damage.
International Climate Change Agreements. At the international level, the United States is a party to the United Nations Framework Convention on Climate Change (UNFCCC). The Parties to the
UNFCCC adopted the Paris Agreement at the 21st session of the UNFCCC Conference of the Parties (COP 21) on December 12, 2015. Under the Agreement, which became effective on November 4,
2016, the parties committed to try to limit the global average temperature increase and to develop national GHG reduction commitments. On November 4, 2020, the United States formally withdrew from
the Paris Agreement, but on January 20, 2021, President Biden accepted the Agreement, which resulted in the United States’ formal re-entry on February 19, 2021. The United States has set an economy-
wide target of reducing its net GHG emissions by 50-52% below 2005 levels by 2030. On November 11, 2022, at the UNFCCC Conference of the Parties (COP 27), President Biden recommitted the U.S.
to these goals and detailed the significant domestic climate actions the U.S. had taken to spur a new era of clean American manufacturing, enhance energy security, and drive down the costs of clean
energy for consumers in the U.S. and around the world.
Federal Climate Change Legislation and Regulation. On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA), which, among other things, aims to reduce U.S. carbon emissions
and promote economic development through investments in clean and renewable energy projects. The consumer-facing clean energy tax credits created or expanded by the IRA are intended to drive rapid
adoption of energy efficiency, electric transportation, and solar energy which would require Exelon's utilities to expand and modernize infrastructure, systems and services to integrate and optimize these
resources.
State Climate Change Legislation and Regulation. A number of states in which the Registrants operate have state and regional programs to reduce GHG emissions and renewable and other portfolio
standards, which impact the power sector. See discussion below for additional information on renewable and other portfolio standards.
Certain northeast and mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia) currently
participate in the RGGI. The program requires most fossil fuel-fired power plant owners and operators in the region to hold allowances, purchased at auction, for each ton of CO2 emissions. Non-emitting
resources do not have to purchase or hold these allowances. Pennsylvania joined RGGI in April 2022.
Broader state programs impact other sectors as well, such as the District of Columbia's Clean Energy DC Omnibus Act and cross-sector GHG reduction plans, which resulted in recent requirements for
Pepco to develop 5-year and 30-year decarbonization programs and strategies. Maryland expects to meet and exceed the mandate set in the Greenhouse Gas Emissions Reduction Act to reduce
statewide GHG emissions 40% (from 2006 levels) by 2030, and the state’s Climate Solutions Now Act of 2022 further updates requirements with a proposal to reduce emissions 60% (from 2006 levels) by
2031. New Jersey accelerated its goals through Executive Order 274, which establishes an interim goal of 50% reductions below 2006 levels by 2030 and affirms its goal of achieving 80% reductions by
2050 and includes programs to drive greater amounts of electrified transportation. Delaware's Climate Change Solutions Act established in August 2023 sets a statewide GHG emissions reduction goal of
50% by Jan 1, 2030 and a net-zero GHG emissions goal by Jan 1, 2050, on a net basis as compared to a 2005 baseline. Illinois’ climate bill, CEJA, establishes decarbonization requirements for the state to
transition to 100% clean energy by 2050 and supports programs to improve energy efficiency, manage energy demand, attract clean energy investment and accelerate job creation. See Note 3 —
Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on CEJA.
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The Registrants cannot predict the nature of future regulations or how such regulations might impact future financial statements.
Renewable and Clean Energy Standards. Each of the states where Exelon operates have adopted some form of renewable or clean energy procurement requirement. These standards impose varying
levels of mandates for procurement of renewable or clean electricity (the definition of which varies by state) and/or energy efficiency. These are generally expressed as a percentage of annual electric load,
often increasing by year. The Utility Registrants comply with these various requirements through acquiring sufficient bundled or unbundled credits such as RECs, CMCs, or ZECs, or paying an alternative
compliance payment, and/or a combination of these compliance alternatives. The Utility Registrants are permitted to recover from retail customers the costs of complying with their state RPS requirements,
including the procurement of RECs or other alternative energy resources. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Other Environmental Regulation
Water Quality
Under the federal Clean Water Act, NPDES permits for discharges into waterways are required to be obtained from the EPA or from the state environmental agency to which the permit program has been
delegated, and permits must be renewed periodically. Certain of Exelon's facilities discharge water into waterways and are therefore subject to these regulations and operate under NPDES permits.
Under Clean Water Act Section 404 and state laws and regulations, the Registrants may be required to obtain permits for projects involving dredge or fill activities in waters of the United States.
Where Registrants’ facilities are required to secure a federal license or permit for activities that may result in a discharge to covered waters, they may be required to obtain a state water quality certification
under Clean Water Act section 401.
Solid and Hazardous Waste and Environmental Remediation
CERCLA provides for response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances and authorizes the EPA either to clean up sites at which
hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under CERCLA, generators and transporters of hazardous
substances, as well as past and present owners and operators of hazardous waste sites, are strictly, jointly and severally liable for the cleanup costs of hazardous waste at sites, many of which are listed by
the EPA on the National Priorities List (NPL). These PRPs can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed cleanup, may voluntarily settle with the EPA
concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight. Most states have also enacted statutes that contain provisions
substantially similar to CERCLA. Such statutes apply in many states where the Registrants currently own or operate, or previously owned or operated, facilities, including Delaware, Illinois, Maryland, New
Jersey, and Pennsylvania and the District of Columbia. In addition, RCRA governs treatment, storage and disposal of solid and hazardous wastes and cleanup of sites where such activities were
conducted.
The Registrants’ operations have in the past, and may in the future, require substantial expenditures in order to comply with these Federal and state environmental laws. Under these laws, the Registrants
may be liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous substances generated by them. The
Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by substances that are considered
hazardous under environmental laws. The Registrants and their subsidiaries are, or could become in the future, parties to proceedings initiated by the EPA, state agencies, and/or other responsible parties
under CERCLA and RCRA or similar state laws with respect to a number of sites or may undertake to investigate and remediate sites for which they may be subject to enforcement actions by an agency or
third-party.
ComEd’s and PECO’s environmental liabilities primarily arise from contamination at former MGP sites, which were operated by ComEd's and PECO's predecessor companies. ComEd, pursuant to an ICC
order, and PECO, pursuant to settlements of natural gas distribution rate cases with the PAPUC, have an on-going process to recover certain environmental remediation costs of the MGP sites through a
provision within customer rates. BGE, Pepco, DPL, and ACE do not have material contingent liabilities relating to MGP sites. The amount to be
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expended in 2024 for activities associated with the environmental investigation and remediation related to contamination at former MGP sites and other gas purification sites is estimated to be
approximately $36 million which consists primarily of $25 million at ComEd.
As of December 31, 2023, the Registrants have established appropriate contingent liabilities for environmental remediation requirements. In addition, the Registrants may be required to make significant
additional expenditures not presently determinable for other environmental remediation costs.
See Note 3 — Regulatory Matters and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding the Registrants’
environmental matters, remediation efforts, and related impacts to the Registrants’ Consolidated Financial Statements.
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Information about our Executive Officers as of February 21, 2024
Exelon
Name
Butler Jr., Calvin G.
Jones, Jeanne
Glockner, David
Littleton, Gayle E.
Quiniones, Gil C.
Innocenzo, Michael A.
Khouzami, Carim V.
Position
Age
54 President and Chief Executive Officer, Exelon
Chief Operating Officer, Exelon
Senior Executive Vice President, Exelon
Chief Executive Officer, Exelon Utilities
Chief Executive Officer, BGE
44 Executive Vice President and Chief Financial Officer, Exelon
Senior Vice President, Corporate Finance, Exelon
Senior Vice President and Chief Financial Officer, ComEd
63 Executive Vice President, Compliance, Audit and Risk, Exelon
Chief Compliance Officer, Citadel LLC
51 Executive Vice President, Chief Legal Officer, and Corporate Secretary, Exelon
Partner, Jenner & Block LLP
57 Chief Executive Officer, ComEd
President, ComEd
President and Chief Executive Officer, New York Power Authority
58 President and Chief Executive Officer, PECO
49 President, BGE
Chief Executive Officer, BGE
Senior Vice President & COO, Exelon Utilities
Anthony, J. Tyler
59 President and Chief Executive Officer, PHI, Pepco, DPL, and ACE
Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE
Kleczynski, Robert A.
55 Senior Vice President, Controller and Tax, Exelon
Senior Vice President, Exelon
Vice President, Exelon
General Tax Officer, Exelon
David Velazquez
64 Executive Vice President, Operations and Technology, Exelon Business Services Company, LLC
Executive Vice President, Utility Operations, Exelon Business Services Company, LLC
President and Chief Executive Officer, PHI, Pepco, DPL, and ACE
Period
2022 - Present
2021 - 2022
2019 - 2022
2019 - 2022
2014 - 2019
2022 - Present
2021 - 2022
2018 - 2021
2020 - Present
2017 - 2020
2020 - Present
2015 - 2020
2021 - Present
2024 - Present
2011 - 2021
2018 - Present
2021 - Present
2019 - Present
2018 - 2019
2021 - Present
2016 - 2021
2023 - Present
2020 - 2023
2018 - 2020
2018 - 2023
2023 - Present
2021 -2023
2016 - 2021
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ComEd
Name
Quiniones, Gil
Perez, David R.
Levin, Joshua
Position
Age
57 Chief Executive Officer, ComEd
President, ComEd
President and Chief Executive Officer, New York Power Authority
54 Executive Vice president and Chief Operating Officer, ComEd
Senior Vice President, Distribution Operations
44 Senior Vice President, Chief Financial Officer & Treasurer, ComEd
Vice President, Financial, Planning and Analysis
Director of Financial Planning and Analysis, ComEd
Rippie, E. Glenn
63 Senior Vice President and General Counsel, ComEd
Senior Vice President and Deputy General Counsel, Energy Regulation, Exelon
Partner, Jenner & Block LLP
Partner and Chief Financial Officer, Rooney, Rippie & Ratnaswamy, LLP
Binswanger, Lewis
64 Senior Vice President, Governmental, Regulatory and External Affairs, ComEd
Vice President, External Affairs, Nicor Gas
PECO
Name
Innocenzo, Michael A.
Levine, Nicole
Humphrey, Marissa
Position
Age
58 President and Chief Executive Officer, PECO
47 Senior Vice President and Chief Operations Officer, PECO
Vice President, Electrical Operations, PECO
44 Senior Vice President, Chief Financial Officer and Treasurer, PECO
Vice President, Regulatory Policy and Strategy (NJ/DE), PHI, DPL, and ACE
Vice President, Finance, Exelon Utilities
Vice President, Financial Planning and Analysis, PHI, Pepco, DPL, and ACE
Oliver, Douglas
49 Senior Vice President, Governmental, Regulatory and External Affairs, PECO
Gay, Anthony
Vice President, Governmental and External Affairs, PECO
Vice President, Communications, PECO
58 Vice President and General Counsel, PECO
Vice President, Governmental and External Affairs, PECO
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Period
2021 - Present
2024 - Present
2011 - 2021
2024 - Present
2019 - 2023
2023 - Present
2021 - 2023
2019 - 2021
2022 - Present
2022 - Present
2019 - 2021
2010 - 2019
2022 - Present
2013 - 2022
Period
2018 - Present
2022 - Present
2018 - 2022
2022 - Present
2021 - 2022
2019 - 2020
2016 - 2019
2023 - Present
2019 - 2023
2018 - 2019
2019 - Present
2016 - 2019
Table of Contents
BGE
Name
Khouzami, Carim V.
Position
Age
49 President, BGE
Chief Executive Officer, BGE
Senior Vice President & COO, Exelon Utilities
Dickens, Derrick
59 Senior Vice President and Chief Operating Officer, BGE
Vahos, David M.
Núñez, Alexander G.
Ralph, David
PHI, Pepco, DPL, and ACE
Name
Anthony, J. Tyler
Olivier, Tamla
Barnett, Phillip S.
Oddoye, Rodney
Senior Vice President, Customer Operations, PHI, Pepco, DPL, and ACE
Vice President, Technical Services, BGE
51 Senior Vice President, Chief Financial Officer and Treasurer, BGE
52 Senior Vice President, Governmental, Regulatory and External Affairs, BGE
Senior Vice President, Regulatory Affairs and Strategy, BGE
Senior Vice President, Regulatory and External Affairs, BGE
57 Vice President and General Counsel, BGE
Associate General Counsel, BGE
Assistant General Counsel, Exelon
Position
Age
59 President and Chief Executive Officer, PHI, Pepco, DPL, and ACE
Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE
51 Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE
Senior Vice President, Customer Operations, BGE
Senior Vice President, Constellation NewEnergy, Inc.
60 Senior Vice President, Chief Financial Officer and Treasurer, PHI, Pepco, DPL, and ACE
47 Senior Vice President, Governmental, Regulatory and External Affairs, PHI, Pepco, DPL, and ACE
Senior Vice President, Governmental and External Affairs, BGE
Vice President, Customer Operations, BGE
Bancroft, Anne
57 Vice President and General Counsel, PHI, Pepco, DPL, and ACE
Associate General Counsel, Exelon
ITEM 1A.
RISK FACTORS
Period
2021 - Present
2019 - Present
2018 - 2019
2021 - Present
2020 - 2021
2016 - 2020
2016 - Present
2021 - Present
2020 - 2021
2016 - 2020
2021 - Present
2019 - 2021
2017 - 2019
Period
2021 - Present
2016 - 2021
2021 - Present
2020 - 2021
2016 - 2020
2018 - Present
2021 - Present
2020 - 2021
2018 - 2020
2021 - Present
2017 - 2021
Each of the Registrants operates in a complex market and regulatory environment that involves significant risks, many of which are beyond that Registrant’s direct control. Such risks, which could
negatively affect one or more
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of the Registrants’ consolidated financial statements, are captured below. Although the risks are generally organized by category and separately described, many of these risks are interrelated.
Additionally, the risks should be considered holistically with other information included in this filing and future filings with the SEC.
Risks related to market and financial factors primarily include:
•
•
•
the demand for electricity, reliability of service, and affordability in the markets where the Utility Registrants conduct their business,
the ability of the Utility Registrants to operate their respective transmission and distribution assets, their ability to access capital markets, and the impacts on their results of operations, financial
condition or liquidity/cash flows due to public health crises, epidemics or pandemics, and
emerging technologies and business models, including those related to climate change mitigation and transition to a low carbon economy.
Risks related to legislative, regulatory, and legal factors primarily include changes to, and compliance with, the laws and regulations that govern:
•
•
•
utility regulatory business models,
energy, environmental, and climate policy, and
tax policy.
Risks related to operational factors primarily include:
•
•
•
changes in the global climate could produce extreme weather events, which could put the Registrant’s facilities at risk, and such changes could also affect the levels and patterns of demand for
energy and related services,
the ability of the Utility Registrants to maintain the reliability, resiliency, and safety of their energy delivery systems, which could affect their ability to deliver energy to their customers and affect
their operating costs, and
physical and cyber security risks for the Utility Registrants as the owner-operators of transmission and distribution facilities.
Risks related to the separation primarily include:
•
•
challenges to achieving the benefits of separation and
performance by Exelon and Constellation under the transaction agreements, including indemnification responsibilities.
There may be further risks and uncertainties that are not presently known or that are not currently believed to be material that could negatively affect the Registrants' consolidated financial statements in
the future.
Risks Related to Market and Financial Factors
The Registrants are potentially affected by emerging technologies that could over time affect or transform the energy industry (All Registrants).
Advancements in power generation technology, including commercial and residential solar generation installations and commercial micro turbine installations, are improving the cost-effectiveness of
customer self-supply of electricity. Improvements in energy storage technology, including batteries and fuel cells, could also better position customers to meet their around-the-clock electricity
requirements. Improvements in energy efficiency of lighting, appliances, equipment and building materials will also affect energy consumption by customers. Changes in power generation, storage, and use
technologies could have significant effects on customer behaviors and their energy consumption.
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These developments could affect levels of customer-owned generation, customer expectations, and current business models and make portions of the Utility Registrants' transmission and/or distribution
facilities uneconomic prior to the end of their useful lives. Increasing pressure from both the private and public sectors to take actions to mitigate climate change could also push the speed and nature of this
transition. These factors could affect the Registrants’ consolidated financial statements through, among other things, increased Operating and maintenance expenses, increased capital expenditures, and
potential asset impairment charges or accelerated depreciation over shortened remaining asset useful lives.
Market performance and other factors could decrease the value of employee benefit plan assets and could increase the related employee benefit plan obligations, which then
could require significant additional funding (All Registrants).
Disruptions in the capital markets and their actual or perceived effects on particular businesses and the greater economy could adversely affect the value of the investments held within Exelon’s employee
benefit plan trusts. The asset values are subject to market fluctuations and will yield uncertain returns, which could fall below Exelon's projected return rates. A decline in the market value of the pension
and OPEB plan assets would increase the funding requirements associated with Exelon’s pension and OPEB plan obligations. Additionally, Exelon’s pension and OPEB plan liabilities are sensitive to
changes in interest rates. As interest rates decrease, the liabilities increase, potentially increasing benefit costs and funding requirements. Changes in demographics, including increased numbers of
retirements or changes in life expectancy assumptions or changes to Social Security or Medicare eligibility requirements could also increase the costs and funding requirements of the obligations related to
the pension and OPEB plans. See Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information.
The Registrants could be negatively affected by unstable capital and credit markets (All Registrants).
The Registrants rely on the capital markets, particularly for publicly offered debt, as well as the banking and commercial paper markets, to meet their financial commitments and short-term liquidity needs.
Disruptions in the capital and credit markets in the United States or abroad could negatively affect the Registrants’ ability to access the capital markets or draw on their respective bank revolving credit
facilities. The banks may not be able to meet their funding commitments to the Registrants if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests
within a short period of time. The inability to access capital markets or credit facilities, and longer-term disruptions in the capital and credit markets because of uncertainty, changing or increased regulation,
reduced alternatives, or failures of significant financial institutions could result in the deferral of discretionary capital expenditures, or require a reduction in dividend payments or other discretionary uses of
cash. In addition, the Registrants have exposure to worldwide financial markets, including Europe, Canada, and Asia. Disruptions in these markets could reduce or restrict the Registrants’ ability to secure
sufficient liquidity or secure liquidity at reasonable terms. As of December 31, 2023, approximately 23%, 10%, and 16% of the Registrants’ available credit facilities were with European, Canadian, and
Asian banks, respectively. Additionally, higher interest rates may put pressure on the Registrants’ overall liquidity profile, financial health and impact financial results. See Note 16 — Debt and Credit
Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the credit facilities.
If any of the Registrants were to experience a downgrade in its credit ratings to below investment grade or otherwise fail to satisfy the credit standards in its agreements with
its counterparties or regulatory financial requirements, it would be required to provide significant amounts of collateral that could affect its liquidity and could experience
higher borrowing costs (All Registrants).
The Utility Registrants' operating agreements with PJM and PECO's, BGE's, and DPL's natural gas procurement contracts contain collateral provisions that are affected by their credit rating and market
prices. If certain wholesale market conditions were to exist and the Utility Registrants were to lose their investment grade credit ratings (based on their senior unsecured debt ratings), they would be
required to provide collateral in the forms of letters of credit or cash, which could have a material adverse effect upon their remaining sources of liquidity. PJM collateral posting requirements will generally
increase as market prices rise and decrease as market prices fall. Collateral posting requirements for PECO, BGE, and DPL, with respect to their natural gas supply contracts, will generally increase as
forward market prices fall and decrease as forward market prices rise. If the Utility
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Registrants were downgraded, they could experience higher borrowing costs as a result of the downgrade. In addition, changes in ratings methodologies by the agencies could also have an adverse
negative impact on the ratings of the Utility Registrants.
The Utility Registrants conduct their respective businesses and operate under governance models and other arrangements and procedures intended to assure that the Utility Registrants are treated as
separate, independent companies, distinct from Exelon and other Exelon subsidiaries in order to isolate the Utility Registrants from Exelon and other Exelon subsidiaries in the event of financial difficulty at
Exelon or another Exelon subsidiary. These measures (commonly referred to as “ring-fencing”) could help avoid or limit a downgrade in the credit ratings of the Utility Registrants in the event of a reduction
in the credit rating of Exelon. Despite these ring-fencing measures, the credit ratings of the Utility Registrants could remain linked, to some degree, to the credit ratings of Exelon. Consequently, a reduction
in the credit rating of Exelon could result in a reduction of the credit rating of some or all of the Utility Registrants. A reduction in the credit rating of a Utility Registrant could have a material adverse effect
on the Utility Registrant.
See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Liquidity and Capital Resources — Credit Matters and Cash
Requirements — Security Ratings for additional information regarding the potential impacts of credit downgrades on the Registrants’ cash flows.
The impacts of significant economic downturns or increases in customer rates, could lead to decreased volumes delivered and increased expense for uncollectible customer
balances (All Registrants).
The impacts of significant economic downturns on the Utility Registrants' customers and the related regulatory limitations on residential service terminations for the Utility Registrants, could result in an
increase in the number of uncollectible customer balances and related expense. Further, increases in customer rates, including those related to increases in Purchased power and natural gas prices, could
result in declines in customer usage and lower revenues for the Utility Registrants that do not have decoupling mechanisms.
See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information on the Registrants’ credit risk.
The Registrants could be negatively affected by the impacts of weather (All Registrants).
Weather conditions directly influence the demand for electricity and natural gas and affect the price of energy commodities. Temperatures above normal levels in the summer tend to increase summer
cooling electricity demand and revenues, and temperatures below normal levels in the winter tend to increase winter heating electricity and gas demand and revenues. Moderate temperatures adversely
affect the usage of energy and resulting operating revenues at PECO and DPL Delaware. Due to revenue decoupling, operating revenues from electric distribution at ComEd, BGE, Pepco, DPL Maryland,
and ACE and gas distribution at BGE are not affected by abnormal weather.
Extreme weather conditions or damage resulting from storms could stress the Utility Registrants' transmission and distribution systems, communication systems, and technology, resulting in increased
maintenance and capital costs and limiting each Utility Registrant's ability to meet peak customer demand. First and third quarter financial results, in particular, are substantially dependent on weather
conditions, and could make period comparisons less relevant.
Climate change projections suggest increases to summer temperature and humidity trends, as well as more erratic precipitation and storm patterns over the long-term in the areas where the Utility
Registrants have transmission and distribution assets. The frequency in which weather conditions emerge outside the current expected climate norms could contribute to weather-related impacts
discussed above.
Long-lived assets, goodwill, and other assets could become impaired (All Registrants).
Long-lived assets represent the single largest asset class on the Registrants’ statements of financial position. In addition, Exelon, ComEd, and PHI have material goodwill balances.
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The Registrants evaluate the recoverability of the carrying value of long-lived assets to be held and used whenever events or circumstances indicating a potential impairment exist. Factors such as, but not
limited to, the business climate, including current and future energy and market conditions, environmental regulation, and the condition of assets are considered.
ComEd and PHI perform an assessment for possible impairment of their goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the
fair value of the reporting units below their carrying amount. Regulatory actions or changes in significant assumptions, including discount and growth rates, utility sector market performance and
transactions, projected operating and capital cash flows for ComEd’s, Pepco’s, DPL’s, and ACE’s business, and the fair value of debt, could potentially result in future impairments of Exelon’s, ComEd's,
and PHI’s goodwill.
An impairment would require the Registrants to reduce the carrying value of the long-lived asset or goodwill to fair value through a non-cash charge to expense by the amount of the impairment. See ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates, Note 7 — Property, Plant, and
Equipment, Note 11 — Asset Impairments, and Note 12 — Intangible Assets of the Combined Notes to the Consolidated Financial Statements for additional information on long-lived asset impairments
and goodwill impairments.
The Registrants could incur substantial costs in the event of non-performance by third-parties under indemnification agreements, or when the Registrants have guaranteed
their performance (All Registrants).
The Registrants have entered into various agreements with counterparties that require those counterparties to reimburse a Registrant and hold it harmless against specified obligations and claims. To the
extent that any of these counterparties are affected by deterioration in their creditworthiness or the agreements are otherwise determined to be unenforceable, the affected Registrant could be held
responsible for the obligations. Each of the Utility Registrants has transferred its former generation assets to one or more third parties and in each case the transferee has agreed to assume certain
obligations and to indemnify the applicable Utility Registrant for such obligations. In connection with the restructurings under which ComEd, PECO, and BGE transferred their generating assets to
Constellation, Constellation assumed certain of ComEd’s, PECO’s, and BGE's rights and obligations with respect to their former generation assets. Further, ComEd, PECO, and BGE have entered into
agreements with third parties under which the third-party agreed to indemnify ComEd, PECO, or BGE for certain obligations related to their respective former generation assets that have been assumed by
Constellation as part of the restructuring. If Constellation or a transferee of one of the Utility Registrant’s generation assets experienced events that reduced its creditworthiness or the indemnity
arrangement became unenforceable, the applicable Utility Registrant could be liable for any existing or future claims. In addition, the Utility Registrants have residual liability under certain laws in
connection with their former generation assets.
The Registrants have issued indemnities to third parties regarding environmental or other matters in connection with purchases and sales of assets, including several of the Utility Registrants in connection
with Constellation's absorption of their former generating assets. The Registrants could incur substantial costs to fulfill their obligations under these indemnities.
The Registrants have issued guarantees of the performance of third parties, which obligate the Registrants to perform if the third parties do not perform. In the event of non-performance by those third
parties, the Registrants could incur substantial cost to fulfill their obligations under these guarantees.
Risks Related to Legislative, Regulatory, and Legal Factors
The Registrants' businesses are highly regulated and electric and gas revenue and earnings could be negatively affected by legislative and/or regulatory actions (All
Registrants).
Substantial aspects of the Registrants' businesses are subject to comprehensive Federal or state legislation and/or regulation.
The Utility Registrants' consolidated financial statements are heavily dependent on the ability of the Utility Registrants to recover their costs for the retail purchase, transmission, and distribution of power
and natural gas to their customers.
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Fundamental changes in laws or regulations or adverse legislative or regulatory actions affecting the Registrants’ businesses would require changes in their business planning models and operations.
Registrants cannot always predict when or whether legislative or regulatory action will occur and may not be able to influence the outcome of legislative or regulatory initiatives.
Changes in the Utility Registrants' respective terms and conditions of service, including their respective rates, along with adoption of new rate structures and constructs, or
establishment of new rate cases, are subject to regulatory approval proceedings and/or negotiated settlements that are at times contentious, lengthy, and subject to appeal,
which lead to uncertainty as to the ultimate result, and which could result in uncertainties in rate case outcomes, and/or introduce time delays in effectuating rate changes (All
Registrants).
The Utility Registrants are required to engage in regulatory approval proceedings as a part of the process of establishing the terms and rates for their respective services, adoption of new rate structures
and constructs or establishment of new rate cases. These proceedings typically involve multiple parties, including governmental bodies and officials, consumer advocacy groups, and various consumers of
energy, who have differing concerns but who have the common objective of limiting rate increases or even reducing rates. Decisions are subject to appeal, potentially leading to additional uncertainty
associated with the approval proceedings. The potential duration of such proceedings creates a risk that rates ultimately approved by the applicable regulatory body may not be sufficient for a Utility
Registrant to recover its costs once the rates become effective. Established rates are also subject to subsequent prudency reviews by state regulators, whereby various portions of rates could be adjusted,
subject to refund or disallowed, including recovery mechanisms for costs associated with the procurement of electricity or gas, credit losses, MGP remediation, smart grid infrastructure, and energy
efficiency and demand response programs. In certain instances, the Utility Registrants could agree to negotiated settlements related to various rate matters, customer initiatives, or franchise agreements.
These settlements are subject to regulatory approval. The ultimate outcome and timing of regulatory rate proceedings have a significant effect on the ability of the Utility Registrants to recover their costs or
earn an adequate return.
In addition to potential timing delays, the Registrants also face other uncertainties in rate proceedings that could impact recovery, including not obtaining anticipated allowed rates of return, allowed capital
structures, or allowed return on pension assets, and various other factors.
See Note 3 — Regulatory Matters of the Combined Notes to the Consolidated Financial Statements for additional information.
The Registrants could be subject to higher costs and/or penalties related to mandatory reliability standards, including the likely exposure of the Utility Registrants to the
results of PJM’s RTEP and NERC compliance requirements (All Registrants).
The Utility Registrants as users, owners, and operators of the bulk power transmission system are subject to mandatory reliability standards promulgated by NERC and enforced by FERC. The standards
are based on the functions that need to be performed to ensure the bulk power system operates reliably and are guided by reliability and market interface principles. Compliance with or changes in the
reliability standards could subject the Registrants to higher operating costs and/or increased capital expenditures. In addition, the ICC, PAPUC, MDPSC, DCPSC, DEPSC, and NJBPU impose certain
distribution reliability standards on the Utility Registrants. If the Utility Registrants were found in non-compliance with the Federal or state mandatory reliability standards, they could be subject to
remediation costs as well as sanctions, which could include substantial monetary penalties.
The Registrants could incur substantial costs to fulfill their obligations related to environmental and other matters (All Registrants).
The Registrants are subject to extensive environmental regulation and legislation by local, state, and Federal authorities. These laws and regulations affect the way the Registrants conduct their operations
and make capital expenditures, including how they handle air and water emissions, hazardous and solid waste, and activities affecting surface waters, groundwater, and aquatic and other species.
Violations of these requirements could subject the Registrants to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs for remediation and clean-
up costs, civil penalties and exposure to third parties’ claims
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for alleged health or property damages, or operating restrictions to achieve compliance. In addition, the Registrants are subject to liability under these laws for the remediation costs for environmental
contamination of property now or formerly owned by the Registrants and of property contaminated by hazardous substances they generated or released. Remediation activities associated with MGP
operations conducted by predecessor companies are one component of such costs. Also, the Registrants are currently involved in several proceedings relating to sites where hazardous substances have
been deposited and could be subject to additional proceedings in the future. See ITEM 1. BUSINESS — Environmental Matters and Regulation for additional information.
The Registrants could be negatively affected by federal and state RPS and/or energy conservation legislation, along with energy conservation by customers (All Registrants).
Changes to current state legislation or the development of Federal legislation that requires the use of low-emission, renewable, and/or alternate fuel sources could significantly impact the Utility
Registrants, especially if timely cost recovery is not allowed.
Federal and state legislation mandating the implementation of energy conservation programs that require the implementation of new technologies, such as smart meters and smart grid, could increase
capital expenditures and could significantly impact the Utility Registrants' consolidated financial statements if timely cost recovery is not allowed. These energy conservation programs, regulated energy
consumption reduction targets, and new energy consumption technologies could cause declines in customer energy consumption and lead to a decline in the Registrants' earnings, if timely recovery is not
allowed. See ITEM 1. BUSINESS — Environmental Matters and Regulation — Renewable and Clean Energy Standards and "The Registrants are potentially affected by emerging technologies that could
over time affect or transform the energy industry" above for additional information.
The Registrants could be negatively affected by challenges to tax positions taken, tax law changes, and the inherent difficulty in quantifying potential tax effects of business
decisions. (All Registrants).
The Registrants are required to make judgments to estimate their obligations to taxing authorities, which includes general tax positions taken and associated reserves established. Tax obligations include,
but are not limited to: income, real estate, sales and use, and employment-related taxes and ongoing appeal issues related to these tax matters. All tax estimates could be subject to challenge by the tax
authorities. Additionally, earnings may be impacted due to changes in federal or local/state tax laws, and the inherent difficulty of estimating potential tax effects of ongoing business decisions. See Note 1
— Significant Accounting Policies and Note 13 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information.
Legal proceedings could result in a negative outcome, which the Registrants cannot predict (All Registrants).
The Registrants are involved in legal proceedings, claims, and litigation arising out of their business operations. The material ones are summarized in Note 18 — Commitments and Contingencies of the
Combined Notes to Consolidated Financial Statements. Adverse outcomes in these proceedings could require significant expenditures, result in lost revenue, or restrict or disrupt business activities.
The Registrants could be subject to adverse publicity and reputational risks, which make them vulnerable to negative customer perception and could lead to increased
regulatory oversight or other consequences (All Registrants).
The Registrants could be the subject of public criticism. Adverse publicity could render public service commissions and other regulatory and legislative authorities less likely to view energy companies
generally, or the Registrants specifically, in a favorable light, and could cause the Registrants to be susceptible to less favorable legislative and regulatory outcomes, as well as increased regulatory
oversight and more stringent legislative or regulatory requirements.
The activities associated with the past Deferred Prosecution Agreement and the now resolved associated SEC investigation could have a material adverse effect on Exelon’s
and ComEd’s
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reputation and relationship with legislators, regulators, and customers that could affect their ability to achieve actions and approvals (Exelon and ComEd).
On July 17, 2020, ComEd entered into a Deferred Prosecution Agreement with the USAO for the Northern District of Illinois to resolve the USAO’s investigation into Exelon’s and ComEd’s lobbying
activities in the State of Illinois. Exelon was not made a party to the DPA and no charges were brought against Exelon. Under the DPA, the USAO filed a single charge alleging that ComEd improperly gave
and offered to give jobs, vendor subcontracts, and payments associated with those jobs and subcontracts for the benefit of the Speaker of the Illinois House of Representatives and the Speaker’s
associates, with the intent to influence the Speaker’s action regarding legislation affecting ComEd’s interests. The DPA provided that the USAO would defer any prosecution of such charge and any other
criminal or civil case against ComEd in connection with the matters identified therein for a three-year period. That period expired, and the pending charge was dismissed, in July 2023. In October 2019, the
SEC notified Exelon and ComEd that it had opened an investigation into their lobbying activities in the state of Illinois. On September 28, 2023, Exelon and ComEd reached a settlement with the SEC to
fully resolve the matter.
The DPA and the settlement with the SEC could have a material adverse impact on Exelon’s and ComEd’s reputation or relationships with regulatory and legislative authorities, customers, and other
stakeholders. Those impacts could affect, or make more difficult, their efforts to achieve actions or approvals associated with operations. See Note 18 — Commitments and Contingencies of the Combined
Notes to Consolidated Financial Statements for more information regarding the DPA and SEC settlement.
Risks Related to Operational Factors
The Registrants are subject to risks associated with climate change (All Registrants).
The Registrants periodically perform analyses to better understand long-term projections of climate change and how those changes in the physical environments where they operate could affect their
facilities and operations. The Registrants primarily operate in the Midwest and Mid-Atlantic of the United States, areas that historically have been prone to various types of severe weather events, and the
Registrants have well-developed response and recovery programs based on these historical events. However, the Registrants’ physical facilities could be at greater risk of damage as changes in the
global climate affect temperature and weather patterns, including if such climate changes result in more intense, frequent and extreme weather events, elevated levels of precipitation, sea level rise,
increased surface water temperatures, wildfires and/or other effects. Over time, the Registrants are making additional investments to protect their facilities from physical climate-related risks.
In addition, changes to the climate may impact levels and patterns of demand for energy and related services, which could affect Registrants’ operations and business. Over time, the Registrants are
making additional investments to adapt to changes in operational requirements to manage demand changes and customer expectations caused by climate change.
Climate Change risks include changes to energy systems due to new technologies, changing customer expectations and/or voluntary GHG goals, as well as local, state, or federal regulatory requirements
intended to reduce GHG emissions, including through limitation of the use of natural gas. The Registrants also periodically perform analyses of potential energy system transition pathways to reduce
economy-wide GHG emissions to mitigate climate change. To the extent additional GHG reduction legislation and/or regulation becomes effective at the Federal and/or state levels, the Registrants could
incur costs to further limit the GHG emissions from their operations or otherwise comply with applicable requirements and such legislation and/or regulation could otherwise adversely affect the Registrants'
businesses. See ITEM 1. BUSINESS — Environmental Matters and Regulation — Climate Change and ITEM 1.A. "The Registrants are potentially affected by emerging technologies that could over time
affect or transform the energy industry" above for additional information.
The Utility Registrants' operating costs are affected by their ability to maintain the availability and reliability of their delivery and operational systems (All Registrants).
Failures of the equipment or facilities used in the Utility Registrants' delivery systems could interrupt electric transmission and/or electric or natural gas delivery, which could result in a loss of revenues and
an increase in maintenance and capital expenditures. Equipment or facilities failures can occur due to several factors, including natural causes such as weather or information systems failure. Specifically,
if the implementation of AMI, smart
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grid, or other technologies in the Utility Registrants' service territory fail to perform as intended or are not successfully integrated with billing and other information systems, or if any of the financial,
accounting, or other data processing systems fail or have other significant shortcomings, the Utility Registrants' financial results could be negatively impacted. In addition, dependence upon automated
systems could further increase the risk that operational system flaws or internal and/or external tampering or manipulation of those systems will result in losses that are difficult to detect.
Regulated utilities, which are required to provide service to all customers within their respective service territories, have generally been afforded liability protections against claims by customers relating to
failure of service. Under Illinois law, however, ComEd could be required to pay damages to its customers in some circumstances involving extended outages affecting large numbers of its customers,
which could be material.
The Registrants are subject to physical security and cybersecurity risks (All Registrants).
Risks from cybersecurity and physical threats to energy infrastructures are increasing. Threat actors, including sophisticated nation-state actors, continue to seek to exploit potential vulnerabilities in the
electric and natural gas utility industry, grid infrastructure, and other energy infrastructures, and attacks and disruptions, both physical, cyber, and hybrid targeting physical and cyber assets, are becoming
increasingly sophisticated and dynamic. Several U.S. government agencies have warned of increased risks related to physical attacks, ransomware attacks and cybersecurity threats related to the energy
sector and its supply chains, and that the risks may escalate during periods of heightened geopolitical tensions. Continued implementation of advanced digital technologies increases the potentially
unfavorable impacts of such attacks. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify the Registrants' cybersecurity risks.
A security breach of the Registrants' physical assets or information systems or those of the Registrants' competitors, vendors, business partners and interconnected entities (including RTOs and ISOs)
could materially impact Registrants by, among other things, impairing the availability of electricity and gas distributed by Registrants and/or the reliability of transmission and distribution systems, damaging
grid infrastructure, interrupting critical business functions, impairing the availability of vendor services and materials that the Registrants rely on to maintain their operations, or by leading to the theft or
inappropriate release of certain types of information, including critical infrastructure information, system data and architecture, sensitive customer, vendor, or employee data, or other confidential data. The
Registrants' reliance on vendors to provide services and equipment, and its shared information systems with Constellation pursuant to the Transition Services Agreement between Exelon and
Constellation, increases the risk to assets, systems, and data. While some of the Registrants' vendors have experienced cybersecurity incidents, such incidents have not, to Registrants' knowledge,
resulted in material impact to any of the Registrants to date. The risk of these events and security breaches occurring continues to intensify. The Registrants have been, and will likely continue to be,
subjected to physical and cyber-attacks. While to date none of the Registrants has directly experienced a material breach or material disruption to its network or information systems or operations, as such
attacks continue to increase in sophistication and frequency, the Registrants may be subject to a material breach or material disruption in the future.
If a significant physical or cybersecurity breach or disruption were to occur, the Registrants' reputation could be negatively affected, customer confidence in the Registrants could be diminished and the
Registrants could be subject to legal claims, regulatory exposure, loss of revenues, increased costs including for infrastructure repairs, or operations shutdown, all of which could materially affect the
Registrants' financial condition and materially damage its business reputation. Moreover, the amount and scope of insurance maintained against losses resulting from any such security breaches or
disruptions may not be sufficient to cover losses or otherwise adequately compensate for any disruptions to business that could result. The continued increase in Federal and state regulatory requirements
related to cybersecurity and evolving threat actor-capabilities could require changes to current measures taken by the Registrants or to their business operations and could adversely affect their
consolidated financial statements.
The Registrants’ employees, contractors, customers, and the general public could be exposed to a risk of injury due to the nature of the energy industry (All Registrants).
Employees and contractors throughout the organization work in, and customers and the general public could be exposed to, potentially dangerous environments near the Registrants’ operations. As a
result, employees,
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contractors, customers, and the general public are at some risk for serious injury, including loss of life. These risks include gas explosions, pole strikes, and electric contact cases.
Extreme weather events, natural disasters, operational accidents such as wildfires or natural gas explosions, war, acts and threats of terrorism, public health crises,
epidemics, pandemics, or other significant events could negatively impact the Registrants' results of operations, ability to raise capital and future growth (All Registrants).
The Utility Registrants' infrastructures and/or operations could be affected by extreme weather events, natural disasters, or operational accidents such as wildfires or natural gas explosions which could
result in increased costs, including supply chain costs and third-party property damage. An extreme weather event, natural disaster, or operational accident within the Utility Registrants’ service areas can
also directly affect their capital assets, causing disruption in service to customers due to downed wires and poles or damage to other operating equipment.
The impact that potential terrorist attacks could have on the industry and the Registrants is uncertain. The Registrants face a risk that their operations would be direct targets or indirect casualties of an act
of terror. Any retaliatory military strikes or sustained military campaign could affect Registrants' operations in unpredictable ways, such as changes in insurance markets and disruptions of supplies and
markets. Furthermore, such events could compromise the physical or cybersecurity of the Registrants' facilities, which could adversely affect the Registrants' ability to manage their businesses effectively.
Instability in the financial markets as a result of terrorism, war, natural disasters, public health crises, epidemics, pandemics, credit crises, recession, or other significant events also could result in a decline
in energy consumption or interruption of fuel or the supply chain. In addition, the implementation of security guidelines and measures has resulted in and is expected to continue to result in increased costs.
The Registrants could be significantly affected by public health crises, epidemics, or pandemics. The Registrants have plans in place to respond to such events. However, depending on the severity and
the resulting impacts to workforce and other resource availability, a public health crisis, epidemic, or pandemic could adversely affect our vendors, or customers and customer demand as well as the
Registrants’ ability to operate their transmission and distribution assets.
In addition, on behalf of the Registrants Exelon maintains a level of insurance coverage consistent with industry practices against property, casualty, and cybersecurity losses subject to unforeseen
occurrences or catastrophic events that could damage or destroy assets or interrupt operations. However, there can be no assurance that the amount of insurance will be adequate to address such
property and casualty losses.
The Registrants’ businesses are capital intensive, and their assets could require significant expenditures to maintain, are subject to operational failure and could be impacted
by lack of availability of labor, materials or parts, which could result in potential liability (All Registrants).
The Utility Registrants’ businesses are capital intensive and require significant investments in transmission and distribution infrastructure projects. Equipment, even if maintained in accordance with good
utility practices, is subject to operational failure, including events that are beyond the Utility Registrants’ control, and could require significant expenditures to operate efficiently. Disruptions or cost
increases in the supply chain, including shortages in labor, materials or parts, could materially impact the timing and execution of capital projects, as well as other aspects of the Registrants' businesses.
The Registrants' consolidated financial statements could be negatively affected if they were unable to effectively manage their capital projects or raise the necessary capital, or if they are deemed liable for
operational failure. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Liquidity and Capital Resources for additional
information regarding the Registrants’ potential future capital expenditures.
The Utility Registrants' respective ability to deliver electricity, their operating costs, and their capital expenditures could be negatively impacted by transmission congestion
and failures of neighboring transmission systems (All Registrants).
Demand for electricity within the Utility Registrants' service areas could stress available transmission capacity requiring alternative routing or curtailment of electricity usage. Also, insufficient availability of
electric supply to meet customer demand could jeopardize the Utility Registrants' ability to comply with reliability standards and
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strain customer and regulatory agency relationships. As is the case for electric utilities generally, potential concerns over transmission capacity or generation facility retirements could result in PJM or
FERC requiring the Utility Registrants to upgrade or expand their respective transmission systems through additional capital expenditures.
PJM’s systems and operations are designed to ensure the reliable operation of the transmission grid and prevent the operations of one utility from having an adverse impact on the operations of the other
utilities. However, service interruptions at other utilities may cause interruptions in the Utility Registrants’ service areas.
The Registrants' performance could be negatively affected if they fail to attract and retain an appropriately qualified workforce (All Registrants).
Certain events, such as the separation transaction, an employee strike, loss of employees, loss of contract resources due to a major event, and an aging workforce without appropriate replacements, could
lead to operating challenges and increased costs for the Registrants. Such challenges include lack of resources, loss of knowledge and a lengthy time period associated with skill development. As a result
of such events, costs, including costs for contractors to replace employees, productivity costs, and safety costs, could rise. The Registrants are particularly affected due to the specialized knowledge
required of the technical and support employees needed to conduct Registrants' transmission and distribution operations as well as areas where new technologies are pertinent.
The Registrants’ performance could be negatively affected by poor performance of third-party contractors that perform periodic or ongoing work (All Registrants).
The Registrants rely on third-party contractors to perform operations, maintenance, and construction work. Performance standards typically are included in all contractual obligations, but poor performance
may impact capital execution plans or operations, or have adverse financial or reputational consequences.
The Registrants could make acquisitions or investments in new business initiatives and new markets, which may not be successful or achieve the intended financial results
(All Registrants).
The Utility Registrants face risks associated with regulator-mandated or other new business initiatives, such as smart grids and broader beneficial electrification. Such risks include, but are not limited to,
cost recovery, regulatory concerns, cybersecurity, and obsolescence of technology. Such initiatives may not be successful, and failures could result in adverse financial or reputational consequences.
Risks Related to the Separation (Exelon)
In connection with the separation into two public companies, Exelon and Constellation have agreed to indemnify each other for certain liabilities. If Exelon is required to pay
under these indemnities to Constellation, Exelon's financial results could be negatively impacted. The Constellation indemnities may not be sufficient to hold Exelon harmless
from the full amount of liabilities for which Constellation has been allocated responsibility, and Constellation may not be able to satisfy its indemnification obligations in the
future.
Pursuant to the separation agreement and certain other agreements between Exelon and Constellation, each party agreed to indemnify the other for certain liabilities, generally for uncapped amounts.
Liabilities subject to Exelon’s indemnity obligations to Constellation generally are not subject to caps, may be significant and could negatively impact Exelon’s business. Any amounts Exelon is required to
pay pursuant to these indemnity obligations could require Exelon to divert cash that would otherwise have been used in furtherance of its operating business. Further, third parties could seek to hold
Exelon responsible for any of the liabilities that Constellation has agreed to retain and for which Constellation is obligated to indemnify Exelon. The indemnities from Constellation for Exelon's benefit may
not be sufficient to protect Exelon against the full amount of such liabilities, and Constellation may not be able to fully satisfy its indemnification obligations. Even if Exelon ultimately succeeds in recovering
from Constellation any amounts for which Exelon is held liable, Exelon may be temporarily required to bear these losses. Each of these risks could negatively affect Exelon's business, results of operations
and financial condition.
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ITEM 1B.
UNRESOLVED STAFF COMMENTS
All Registrants
None.
ITEM 1C.
CYBERSECURITY
Risk management and strategy
Cybersecurity risk for all Registrants is managed at the enterprise-level. Management of material risks from cybersecurity threats is integrated into the Registrants' overall risk management processes and
is monitored as an enterprise risk. Exelon's Chief Information Security Officer (CISO) and cybersecurity management team regularly hold meetings with senior management of each Registrant, facilitated
by Exelon’s enterprise risk management team, to discuss issues pertaining to cybersecurity risk management, including changes in the nature and origin of threats, threat actor and risk mitigation activities,
and regulatory developments. Exelon Legal and compliance professionals engage with the CISO and cybersecurity management team to address tactical and strategic cybersecurity risks. Exelon monitors
cybersecurity risks through key risk indicators to identify potential changes in risk exposure and provide the Board of Directors with information about the monitoring of key risks in connection with its
oversight of the Registrants' enterprise risk management system.
The CISO, through Exelon’s Cyber Information and Security Services (CISS), reviews external and internal sources to obtain cyber threat intelligence to develop strategic and tactical threat assessments
that inform the enterprise-wide cyber risk mitigation programs and actions. Exelon uses a wide range of tools, including endpoint, anomaly and network detection, logging and monitoring of security events,
network segmentation, firewalls, hardening and securing devices, cyber vulnerability detection and patch management, cyber threat hunting, malware forensic analysis, industry-specific reports, and
tabletop exercises to inform the cybersecurity management team. Exelon protects assets critical to grid reliability and national security through the implementation of the North American Electric Reliability
Corporation’s Critical Infrastructure Protection requirements, and gas pipeline security under the U.S. Department of Homeland Security’s Transportation Safety Administration’s Security Directives. Exelon
maintains security relationships with law enforcement and U.S. intelligence agencies, coordinates with the Electricity Information Sharing and Analysis Center (E-ISAC) and participates in the Department
of Energy’s Cybersecurity Risk Information Sharing Program (CRISP) to strengthen the security of the energy grid, develop and deploy new technologies, share information, design and participate in drills
and exercises such as the bi-annual Grid Security Exercises and facilitate cross-sector coordination. Exelon applies stringent employee and contractor screening, and advances security awareness
through training and monitoring programs that address both cyber and physical threats. Exelon employees are subject to annual mandatory training addressing security awareness, including cybersecurity
and phishing. Exelon maintains cyber insurance coverage at limits consistent with the utility industry and reviews policy coverage and limits on an annual basis.
In assessing the effectiveness of its cybersecurity risk management program, the CISO makes use of external perspectives from regulatory compliance audits and inspections, external audits of the
Registrants' financial systems, and third-party incident response and detection analytics. Cybersecurity risks associated with the Registrants’ use of certain third-party service providers are evaluated and
managed through CISS' Third Party Security team that leverages security risk assessments, contractual terms and conditions, and security awareness training for such providers. Additionally, those
providers are required to report cybersecurity incidents, including the unauthorized use or disclosure of Registrants’ confidential information to Exelon’s security operations center. Third Party Security
investigates certain third-party cybersecurity events as part of Exelon’s incident response program.
Governance
The Exelon Board of Directors is responsible for oversight of risks from cybersecurity threats. As part of its responsibility and as documented in the 2022 Cybersecurity Oversight Policy, the Board of
Directors oversees Exelon's cybersecurity program and Exelon’s enterprise-wide risk related to cybersecurity, including management’s identification, assessment, and mitigation of cybersecurity risks. At
each regular quarterly meeting, the Board of Directors engages with the CISO and a cross-functional management team regarding the risks from cybersecurity threats. The CISO and professionals from the
legal and compliance departments brief
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the Board of Directors on relevant topics, including information security and operational security, legislative and regulatory developments, and notable external cyber events relevant to Exelon and the
industry more broadly. Management engages with the Board of Directors on risks from cybersecurity threats as appropriate outside of the quarterly meetings.
The CISO manages Exelon's enterprise-wide cybersecurity programs and reports to Exelon’s Chief Information Officer. The CISO has been responsible for assessing and managing material risks from
cybersecurity threats at Exelon since 2018 and was named to the current role in 2022. The CISO has 25 years of information technology and cybersecurity experience in the critical infrastructure sector, of
which 23 years have been in the utility industry. The CISO leads CISS, which manages centralized information technology and operational technology security programs for the Registrants. The programs
are aligned to the National Institute of Standards and Technology Cyber Security Framework (NIST CSF) and integrate cyber asset identification; threat assessment; risk assessment; risk management;
and risk monitoring. CISS operates a security operations center for monitoring, identifying, and mitigating potential cybersecurity events or incidents.
Exelon maintains a single, centralized cybersecurity incident response program and plan that aligns with NIST CSF by integrating the identify, determine/classify, escalate and respond functions (which
track the lifecycle of an event or incident). Security threats and incidents are identified and assessed to determine potential impact and escalated to senior cybersecurity management and the CISO. The
CISO directs the security incident response team to contain, eradicate, and recover from an active threat. Exelon leverages the expertise of dedicated incident response vendors that can provide timely
and specialized support to respond and recover from an event. The CISO and a cross-functional team convene as needed to evaluate cybersecurity events, including third-party events. The legal and
compliance departments provide incident response support to the CISO, manage cybersecurity-related legal and compliance issues, and direct materiality evaluations using both qualitative and
quantitative factors for each Registrant.
Although the Registrants have not experienced any material cybersecurity events to date, cybersecurity threats could materially affect each Registrant’s business strategy, results of operations, or financial
condition, as further discussed in the risk factor entitled “The Registrants are subject to physical and cybersecurity risks" in ITEM 1A. of this report.
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ITEM 2.
PROPERTIES
The Utility Registrants
The Utility Registrants' electric substations and a portion of their transmission rights are located on property that they own. A significant portion of their electric transmission and distribution facilities are
located above or underneath highways, streets, other public places, or property that others own. The Utility Registrants believe that they have satisfactory rights to use those places or property in the form
of permits, grants, easements, licenses, and franchise rights; however, they have not necessarily undertaken to examine the underlying title to the land upon which the rights rest.
Transmission and Distribution
The Utility Registrants’ high voltage electric transmission lines owned and in service at December 31, 2023 were as follows:
Voltage
(Volts)
765,000
(a)
500,000
345,000
230,000
138,000
115,000
69,000
ComEd
90
—
2,678
—
2,268
—
—
PECO
—
188
—
550
135
—
177
Circuit Miles
BGE
—
216
—
352
55
700
—
Pepco
—
108
—
782
61
25
—
DPL
—
16
—
472
587
—
568
ACE
—
—
—
258
214
—
664
___________
(a) In addition, PECO, DPL, and ACE have an ownership interest located in Delaware and New Jersey. See Note 8 — Jointly Owned Electric Utility Plant of the Combined Notes to the Consolidated Financial Statements
for additional information.
The Utility Registrants' electric distribution system includes the following number of circuit miles of overhead and underground lines:
Circuit Miles
Overhead
Underground
ComEd
35,366
32,818
PECO
12,983
9,676
BGE
9,151
18,071
Pepco
4,174
7,358
DPL
6,019
6,589
ACE
7,343
3,033
Gas
The following table presents PECO’s, BGE’s, and DPL’s natural gas pipeline miles at December 31, 2023:
(a)
Transmission
Distribution
Service piping
Total
PECO
6
7,305
6,494
13,805
BGE
149
7,562
6,497
14,208
DPL
8
2,209
1,492
3,709
___________
(a) DPL has a 10% undivided interest in approximately 8 miles of natural gas transmission mains located in Delaware, which are used by DPL for its natural gas operations and by 90% owner for distribution of natural gas
to its electric generating facilities.
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The following table presents PECO’s, BGE’s, and DPL’s natural gas facilities:
Registrant
PECO
PECO
BGE
BGE
DPL
Facility
LNG Facility
Propane Air Plant
LNG Facility
Propane Air Plant
LNG Facility
Location
West Conshohocken, PA
Chester, PA
Baltimore, MD
Baltimore, MD
Wilmington, DE
Storage Capacity
(mmcf)
1,200
105
1,056
550
250
Send-out or Peaking Capacity
(mmcf/day)
195
25
332
85
25
PECO, BGE, and DPL also own 30, 27, and 10 natural gas city gate stations and direct pipeline customer delivery points at various locations throughout their gas service territory, respectively.
First Mortgage and Insurance
The principal properties of ComEd, PECO, PEPCO, DPL, and ACE are subject to the lien of their respective Mortgages under which their respective First Mortgage Bonds are issued. See Note 16 — Debt
and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.
The Utility Registrants maintain property insurance against loss or damage to their properties by fire or other perils, subject to certain exceptions. For their insured losses, the Utility Registrants are self-
insured to the extent that any losses are within the policy deductible or exceed the amount of insurance maintained. Any such losses could have a material adverse effect in the consolidated financial
condition or results of operations of the Utility Registrants.
Exelon
Security Measures
The Registrants have initiated and work to maintain security measures. On a continuing basis, the Registrants evaluate enhanced security measures at certain critical locations, enhanced response and
recovery plans, long-term design changes, and redundancy measures. Additionally, the energy industry has strategic relationships with governmental authorities to ensure that emergency plans are in
place and critical infrastructure vulnerabilities are addressed in order to maintain the reliability of the country’s energy systems.
ITEM 3.
LEGAL PROCEEDINGS
All Registrants
The Registrants are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses. For information regarding material lawsuits and proceedings, see Note 3 —
Regulatory Matters and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. Such descriptions are incorporated herein by these references.
ITEM 4.
Not Applicable
MINE SAFETY DISCLOSURES
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PART II
(Dollars in millions, except per share data, unless otherwise noted)
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Exelon
Exelon’s common stock is listed on the Nasdaq (trading symbol: EXC). As of January 31, 2024, there were 999,538,542 shares of Common stock outstanding and approximately 76,661 record holders of
Common stock.
Stock Performance Graph
The performance graph below illustrates a five-year comparison of cumulative total returns based on an initial investment of $100 in Exelon Common stock, compared with the S&P 500 Stock Index and
the S&P Utility Index, for the period 2019 through 2023. Cumulative total returns account for the separation of Constellation, as the spin-off dividend was assumed to have been reinvested upon receipt.
This performance chart assumes:
•
•
$100 invested on December 31, 2018 in Exelon Common stock, the S&P 500 Stock Index, and the S&P Utility Index; and
All dividends are reinvested.
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Exelon Corporation
S&P 500
S&P Utilities
ComEd
Value of Investment at December 31,
2018
$100.00
$100.00
$100.00
2019
$104.28
$131.49
$126.35
2020
$100.22
$155.68
$126.96
2021
$141.73
$200.37
$149.39
2022
$153.53
$164.08
$151.73
2023
$132.08
$207.21
$140.99
As of January 31, 2024, there were 127,021,399 outstanding shares of Common stock, $12.50 par value, of ComEd, of which 127,002,904 shares were indirectly held by Exelon. As of January 31, 2024, in
addition to Exelon, there were 281 record holders of ComEd Common stock. There is no established market for shares of the Common stock of ComEd.
PECO
As of January 31, 2024, there were 170,478,507 outstanding shares of Common stock, without par value, of PECO, all of which were indirectly held by Exelon.
BGE
As of January 31, 2024, there were 1,000 outstanding shares of Common stock, without par value, of BGE, all of which were indirectly held by Exelon.
PHI
As of January 31, 2024, Exelon indirectly held the entire membership interest in PHI.
Pepco
As of January 31, 2024, there were 100 outstanding shares of Common stock, $0.01 par value, of Pepco, all of which were indirectly held by Exelon.
DPL
As of January 31, 2024, there were 1,000 outstanding shares of Common stock, $2.25 par value, of DPL, all of which were indirectly held by Exelon.
ACE
As of January 31, 2024, there were 8,546,017 outstanding shares of Common stock, $3.00 par value, of ACE, all of which were indirectly held by Exelon.
All Registrants
Dividends
Under applicable Federal law, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE can pay dividends only from retained, undistributed, or current earnings. A significant loss recorded at ComEd, PECO,
BGE, PHI, Pepco, DPL, or ACE may limit the dividends that these Registrants can distribute to Exelon.
ComEd has agreed, in connection with a financing arranged through ComEd Financing III, that ComEd will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its right
to extend the interest payment periods on the subordinated debt securities issued to ComEd Financing III; (2) it defaults on its guarantee of the payment of distributions on the preferred trust securities of
ComEd Financing III; or (3) an event of default occurs under the Indenture under which the subordinated debt securities are issued. No such event has occurred.
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PECO has agreed, in connection with financings arranged through PEC L.P. and PECO Trust IV, that PECO will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its
right to extend the interest payment periods on the subordinated debentures which were issued to PEC L.P. or PECO Trust IV; (2) it defaults on its guarantee of the payment of distributions on the Series D
Preferred Securities of PEC L.P. or the preferred trust securities of PECO Trust IV; or (3) an event of default occurs under the Indenture under which the subordinated debentures are issued. No such
event has occurred.
BGE is subject to restrictions established by the MDPSC that prohibit BGE from paying a dividend on its common shares if (a) after the dividend payment, BGE’s equity ratio would be below 48% as
calculated pursuant to the MDPSC’s ratemaking precedents or (b) BGE’s senior unsecured credit rating is rated by two of the three major credit rating agencies below investment grade. No such event has
occurred.
Pepco is subject to certain dividend restrictions established by settlements approved by the MDPSC and DCPSC that prohibit Pepco from paying a dividend on its common shares if (a) after the dividend
payment, Pepco's equity ratio would be below 48% as calculated pursuant to the MDPSC's and DCPSC's ratemaking precedents, or (b) Pepco’s senior unsecured credit rating is rated by one of the three
major credit rating agencies below investment grade. No such event has occurred.
DPL is subject to certain dividend restrictions established by settlements approved by the DEPSC and MDPSC that prohibit DPL from paying a dividend on its common shares if (a) after the dividend
payment, DPL's equity ratio would be below 48% as calculated pursuant to the DEPSC's and MDPSC's ratemaking precedents, or (b) DPL’s corporate issuer or senior unsecured credit rating, or its
equivalent, is rated by any of the three major credit rating agencies below the generally accepted definition of investment grade. No such event has occurred.
ACE is subject to certain dividend restrictions established by settlements approved by the NJBPU that prohibit ACE from paying a dividend on its common shares if (a) after the dividend payment, ACE's
common equity ratio would be below 48% as calculated pursuant to the NJBPU's ratemaking precedents, or (b) ACE's senior corporate issuer or senior unsecured credit rating is rated by one of the three
major credit rating agencies below investment grade. ACE is also subject to a dividend restriction which requires ACE to notify and obtain the prior approval of the NJBPU before dividends can be paid if its
equity as a percent of its total capitalization, excluding securitization debt, falls below 30%. No such event has occurred.
Exelon’s Board of Directors approved an updated dividend policy for 2024. The 2024 quarterly dividend will be $0.38 per share.
As of December 31, 2023, Exelon had Retained earnings of $5,490 million, ComEd had Retained earnings of $2,374 million, PECO had Retained earnings of $2,019 million, BGE had Retained earnings of
$2,244 million, and PHI had Undistributed losses of $275 million.
The following table sets forth Exelon’s quarterly cash dividends per share paid during 2023 and 2022:
(per share)
Exelon
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
$
0.3600 $
0.3600 $
0.3600 $
0.3600 $
0.3375 $
0.3375 $
0.3375 $
0.3375
2023
2022
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The following table sets forth PHI's quarterly distributions and ComEd’s, PECO’s, BGE's, Pepco's, DPL's, and ACE's quarterly common dividend payments:
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
2023
2022
$
$
187
102
78
103
52
36
15
$
185
101
79
198
85
37
75
$
187
101
79
100
67
18
15
$
187
101
80
112
48
42
21
$
144
100
74
125
63
48
17
$
145
99
75
230
100
39
90
$
145
100
75
293
258
15
19
144
100
76
102
42
41
19
(in millions)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
First Quarter 2024 Dividend
On February 21, 2024, Exelon's Board of Directors declared a regular quarterly dividend of $0.38 per share on Exelon’s Common stock for the first quarter of 2024. The dividend is payable on Friday,
March 15, 2024, to shareholders of record of Exelon as of 5 p.m. Eastern time on Monday, March 4, 2024.
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ITEM 6.
[RESERVED]
39
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Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions except per share data, unless otherwise noted)
Exelon
Executive Overview
Exelon is a utility services holding company engaged in the energy transmission and distribution businesses through its six reportable segments: ComEd, PECO, BGE, Pepco, DPL, and ACE. See Note 1
— Significant Accounting Policies and Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for additional information regarding Exelon's principal subsidiaries and
reportable segments.
Exelon’s consolidated financial information includes the results of its seven separate operating subsidiary registrants, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, which, along with Exelon, are
collectively referred to as the Registrants. The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Exelon, ComEd, PECO,
BGE, PHI, Pepco, DPL, and ACE. However, none of the Registrants makes any representation as to information related solely to any of the other Registrants. For discussion of the Utility Registrants' year
ended December 31, 2022 compared to the year ended December 31, 2021, refer to ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS in the 2022 Form 10-K, which was filed with the SEC on February 14, 2023.
COVID-19. There were no material impacts to the Registrants from unfavorable economic conditions due to COVID-19 for the years ended December 31, 2023 and 2022, other than the 2022 impairment
discussed below.
The Registrants assessed long-lived assets, goodwill, and investments for recoverability. Exelon and BGE recorded a pre-tax impairment charge of $48 million in 2022 as a result of COVID-19 impacts on
office use. See Note 11 — Asset Impairments for additional information related to this impairment assessment.
Financial Results of Operations
GAAP Results of Operations. The following table sets forth Exelon's GAAP consolidated Net income attributable to common shareholders from continuing operations by Registrant for the year ended
December 31, 2023 compared to the same period in 2022. For additional information regarding the financial results for the years ended December 31, 2023 and 2022, see the discussions of Results of
Operations by Registrant.
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Other
(a)
2023
2022
Favorable (Unfavorable) Variance
$
2,328 $
1,090
563
485
590
306
177
120
(400)
2,054 $
917
576
380
608
305
169
148
(427)
274
173
(13)
105
(18)
1
8
(28)
27
__________
(a) Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities, and other financing and investing activities.
The separation of Constellation, including Generation and its subsidiaries, met the criteria for discontinued operations and as such, Generation's results of operations are presented as discontinued
operations and have been excluded from Exelon's continuing operations for the year ended December 31, 2022 presented in the table
40
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above. See Note 1 — Significant Accounting Policies and Note 2 — Discontinued Operations for additional information.
Accounting rules require certain BSC costs previously allocated to Generation to be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued
operations. Such costs are included in Other in the table above and were $28 million on a pre-tax basis, for the year ended December 31, 2022. There were no such costs included in Exelon's continuing
operations for the year ended December 31, 2023
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income attributable to common shareholders from continuing operations increased by $274 million and
Diluted earnings per average common share from continuing operations increased to $2.34 in 2023 from $2.08 in 2022 primarily due to:
•
•
•
•
•
Higher electric distribution and transmission earnings from higher allowed ROE due to an increase in treasury rates and higher rate base at ComEd;
Favorable impacts of rate increases at PECO, BGE, and PHI;
Favorable impacts of the multi-year plans including the recognition of the reconciliation in 2023 at BGE;
Higher carrying costs related to the CMC regulatory assets at ComEd; and
Lower BSC costs presented in Exelon’s continuing operations, which were previously allocated to Generation but do not qualify as expenses of the discontinued operation per the accounting
rules.
The increases were partially offset by:
•
•
•
•
•
•
Higher interest expense at PECO, BGE, PHI, and Exelon Corporate;
Unfavorable weather at PECO and PHI;
Higher depreciation expense at PECO, BGE, and PHI;
Higher contracting costs at PHI;
Higher storm costs at PECO and BGE; and
Higher realized losses from hedging activity at Exelon Corporate.
Adjusted (non-GAAP) operating earnings. In addition to Net income, Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) operating earnings because management
believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) operating earnings exclude certain costs, expenses, gains and losses, and other specified
items. This information is intended to enhance an investor’s overall understanding of year-over-year operating results and provide an indication of Exelon’s baseline operating performance excluding items
not considered by management to be directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a basis for evaluating
performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) operating earnings is not a presentation defined under
GAAP and may not be comparable to other companies’ presentations or deemed more useful than the GAAP information provided elsewhere in this report.
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The following table provides a reconciliation between Net income attributable to common shareholders from continuing operations as determined in accordance with GAAP and Adjusted (non-GAAP)
operating earnings for the year ended December 31, 2023 compared to 2022:
(In millions, except per share data)
Net income attributable to common shareholders from continuing operations
$
Mark-to-market impact of economic hedging activities (net of taxes of $1 and $1, respectively)
Change in environmental liabilities (net of taxes of $8)
ERP system implementation costs (net of taxes of $0)
Asset retirement obligations (net of taxes of $1 and $2, respectively)
SEC matter loss contingency (net of taxes of $0)
(a)
Asset impairments (net of taxes of $10)
Separation costs (net of taxes of $7 and $10, respectively)
Change in FERC audit liability (net of taxes of $4)
(b)
(c)
Income tax-related adjustments (entire amount represents tax expense)
Adjusted (non-GAAP) operating earnings
(d)
2023
2,328 $
(4)
29
—
(1)
46
—
22
11
(54)
Earnings per
Diluted Share
$
2.34
—
0.03
—
—
0.05
—
0.02
0.01
2022
2,054 $
4
—
1
(4)
—
38
24
—
(0.05)
2.38
$
122
2,239 $
Earnings per
Diluted Share
2.08
—
—
—
—
—
0.04
0.02
—
0.12
2.27
$
2,377 $
__________
Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net income and Adjusted (non-GAAP) operating earnings is based on the marginal statutory federal and state income tax rates for
each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. The marginal statutory income tax rates for 2023 and 2022 ranged from 24.0% to 29.0%.
(a) Reflects costs related to a multi-year ERP system implementation, which are recorded in Operating and maintenance expense.
(b) Reflects costs related to the impairment of an office building at BGE, which are recorded in Operating and maintenance expense.
(c) Represents costs related to the separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related
(d)
severance costs, which are recorded in Operating and maintenance expense and Other, net.
In 2022, for PECO, primarily reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax
rate. For Corporate, in connection with the separation, Exelon recorded an income tax expense primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the
net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit. In 2023, reflects the
adjustment to state deferred income taxes due to changes in forecasted apportionment.
Significant 2023 Transactions and Developments
Separation
On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies (“the separation”). Exelon completed the
separation on February 1, 2022. Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purpose of separation and holds Generation. The separation represented a
strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations. See Note 2 — Discontinued Operations
of the Combined Notes to Consolidated Financial Statements for additional information on the separation and discontinued operations.
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In connection with the separation, Exelon incurred separation costs impacting continuing operations of $29 million and $34 million on a pre-tax basis for the year ended December 31, 2023 and 2022,
respectively, which are recorded in Operating and maintenance expense. These costs are excluded from Adjusted (non-GAAP) Operating Earnings. The separation costs are primarily comprised of
system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs.
At-the-Market Program
In November and December 2023, Exelon issued approximately 3.6 million shares of Common stock at an average gross price of $39.58 per share. The net proceeds from these issuances were
$140 million, which were used for general corporate purposes. See Note 19 — Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.
Distribution Base Rate Case Proceedings
The Utility Registrants file base rate cases with their regulatory commissions seeking increases or decreases to their electric transmission and distribution, and gas distribution rates to recover their costs
and earn a fair return on their investments. The outcomes of these regulatory proceedings impact the Utility Registrants’ current and future financial statements.
The following tables show the Utility Registrants’ completed and pending distribution base rate case proceedings in 2023. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated
Financial Statements for additional information on these and other regulatory proceedings.
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Completed Distribution Base Rate Case Proceedings
Registrant/Jurisdiction
Filing Date
April 15, 2022
ComEd - Illinois
January 17, 2023
April 21, 2023
Service
Electric
Electric
Electric
PECO - Pennsylvania
March 31, 2022
Natural Gas
BGE - Maryland
Pepco - Maryland
DPL - Maryland
ACE - New Jersey
May 15, 2020 (amended
September 11, 2020)
February 17, 2023
October 26, 2020 (amended
March 31, 2021)
May 19, 2022
February 15, 2023 (amended
August 21, 2023)
Electric
Natural Gas
Electric
Natural Gas
Electric
Electric
Electric
Requested Revenue
Requirement Increase
Approved Revenue
Requirement Increase
Approved ROE
Approval Date
Rate Effective Date
$
$
$
$
$
$
$
$
$
$
$
199 $
1,487 $
247 $
82
$
203 $
108 $
199
501
259
55
140
74
7.85%
November 17, 2022
January 1, 2023
8.905%
December 14, 2023
January 1, 2024
8.91%
N/A
9.50 %
9.65 %
November 30, 2023
January 1, 2024
October 27, 2022
January 1, 2023
December 16, 2020
January 1, 2021
313 $
179
9.50%
289 $
229
9.45%
December 14, 2023
January 1, 2024
104 $
38
92
$
$
52
29
45
9.55 %
June 28, 2021
June 28, 2021
9.60 %
December 14, 2022
January 1, 2023
9.60 %
November 17, 2023
December 1, 2023
Pending Distribution Base Rate Case Proceedings
Registrant/Jurisdiction
Pepco - District of Columbia
Pepco - Maryland
DPL - Delaware
Filing Date
April 13, 2023
May 16, 2023 (amended January 26,
2024)
December 15, 2022 (amended
September 29, 2023)
Service
Requested Revenue Requirement
Increase
Electric
Electric
Electric
$
$
$
191
188
39
Requested ROE
10.50%
10.50%
10.50%
Expected Approval Timing
Third quarter of 2024
Second quarter of 2024
Second quarter of 2024
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Transmission Formula Rates
The following total increases/(decreases) were included in the Utility Registrants' 2023 annual electric transmission formula rate updates. All rates are effective June 1, 2023 to May 31, 2024, subject to
review by interested parties pursuant to review protocols of each Utility Registrants' tariff. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional
information.
Registrant
Initial Revenue Requirement
Increase
Annual Reconciliation Increase
(Decrease)
Total Revenue Requirement
Increase
Allowed Return on Rate Base
Allowed ROE
ComEd
PECO
BGE
Pepco
DPL
ACE
ComEd's FERC Audit
$
$
$
$
$
$
20
24
19
37
32
41
$
$
$
$
$
$
63
23
(12)
(5)
(3)
(12)
$
$
$
$
$
$
83
47
4
32
29
29
8.09 %
7.41 %
7.34 %
7.57 %
7.08 %
7.08 %
11.50 %
10.35 %
10.50 %
10.50 %
10.50 %
10.50 %
The Utility Registrants are subject to periodic audits and investigations by FERC. FERC’s Division of Audits and Accounting initiated a nonpublic audit of ComEd in April 2021 evaluating ComEd’s
compliance with (1) approved terms, rates and conditions of its federally regulated service; (2) accounting requirements of the Uniform System of Accounts; (3) reporting requirements of the FERC Form 1;
and (4) the requirements for record retention. The audit period extends back to January 1, 2017. During the first quarter of 2023, ComEd was provided with information from FERC about several potential
findings, including ComEd's methodology regarding the allocation of certain overhead costs to capital under FERC regulations. Based on the preliminary findings and discussions with FERC staff, ComEd
determined that a loss was probable and recorded a regulatory liability to reflect its best estimate of that loss in the first quarter of 2023.
On July 27, 2023, FERC issued a final audit report which included, among other things, findings and recommendations related to ComEd's methodology regarding the allocation of certain overhead costs
to capitalized construction costs under FERC regulations, including a suggestion that refunds may be due to customers for amounts collected in previous years. On August 28, 2023, ComEd filed a formal
notice of the issues it will contest. On December 14, 2023, FERC appointed a settlement judge for the contested overhead allocation findings. The final outcome and resolution of any contested audit issues
as well as a reasonable estimate of potential future losses cannot be accurately estimated at this stage; however, the final resolution of these matters could result in recognition of future losses, above the
amounts currently accrued, that could be material to the Exelon and ComEd financial statements.
ACE Employee Strike
ACE’s collective bargaining agreement with the International Brotherhood of Electrical Workers (IBEW) Local 210, expired on November 2, 2023. On November 5, 2023, IBEW Local 210 initiated a strike in
ACE’s service territory. While the work stoppage did not result in a disruption in service to customers, Exelon, PHI, and ACE incurred unfavorable impacts to Net income of approximately $31 million,
$31 million, and $32 million for the year ended December 31, 2023. On December 5, 2023, IBEW Local 210 ratified a new collective bargaining agreement with ACE and ceased the work stoppage.
Other Key Business Drivers and Management Strategies
Utility Rates and Rate Proceedings
The Utility Registrants file rate cases with their regulatory commissions seeking increases or decreases to their electric transmission and distribution, and gas distribution rates to recover their costs and
earn a fair return on their investments. The outcomes of these regulatory proceedings impact the Utility Registrants’ current and future
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results of operations, cash flows, and financial positions. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on these regulatory
proceedings.
Legislative and Regulatory Developments
Infrastructure Investment and Jobs Act
On November 15, 2021, President Biden signed the $1.2 trillion IIJA into law. IIJA provides for approximately $550 billion in new federal spending. Categories of funding include funding for a variety of
infrastructure needs, including but not limited to: (1) power and grid reliability and resilience, (2) resilience for cybersecurity to address critical infrastructure needs, and (3) electric vehicle charging
infrastructure for alternative fuel corridors. Federal agencies are developing guidelines to implement spending programs under IIJA. The time needed to develop these guidelines will vary with some limited
program applications opened as early as the first quarter of 2022. The Registrants continue to evaluate programs under the legislation and consider possible opportunities to apply for funding, either
directly or in potential collaborations with state and/or local agencies and key stakeholders. The Registrants cannot predict the ultimate timing and success of securing funding from programs under IIJA.
In September 2022, ComEd and BGE applied for the MMG, which establishes and funds construction, improvement, or acquisition of middle mile broadband infrastructure which creates high-speed
internet services. The MMG addresses inequitable broadband access by expansion and extension of the middle mile infrastructure in underserved communities. In June 2023, the National
Telecommunications and Information Administration (NTIA) announced it selected two of the applications submitted by BGE and ComEd; awarding ComEd and BGE $14.5 million and $15.4 million
respectively. The applications selected by NTIA for BGE and ComEd proposed projects designed to enhance electric grid reliability and resiliency while leading and advancing shared local, state, and
national goals to increase broadband connectivity, redundancy, affordability, and equity.
In March 2023, Exelon, ComEd, and PHI submitted three applications related to the Smart Grid Grants program under section 40107 of IIJA. These applications are focused on replacing existing Advanced
Distribution Management Systems (ADMS) in support of distributed energy resources (DERs) and grid-edged technologies, strengthening interoperability and data architecture of systems in support of two-
way power flows and accelerating advanced metering deployment in disadvantaged communities. In October 2023, ComEd’s project, Deployment of a Community-Oriented Interoperable Control
Framework for Aggregating and Integrating Distributed Energy Resources and Other Grid-Edge Devices, was recommended by the Grid Deployment Office (GDO) for negotiation of a final award up to $50
million. This project will enable ComEd and its local partners to deploy the next generation of grid technologies that support the growth of solar and electric vehicles (EVs), while piloting new local workforce
training initiatives to support job creation connected to the clean energy transition. The GDO has indicated the award negotiation process can take approximately 120 days.
In April 2023, ComEd, PECO, BGE, and PHI submitted seven applications related to the Grid Resilience Grants program under section 40101(c) of IIJA. These applications are broadly focused on
improving grid resilience with an emphasis on disadvantaged communities, relief of capacity constraints and modernizing infrastructure, deployment of DER and microgrid technologies and providing
improved resilience through storm hardening projects. In October 2023, PECO’s project, Creating a Resilient, Equitable, and Accessible Transformation in Energy for Greater Philadelphia (CREATE), was
recommended by the GDO for negotiation of a final award up to $100 million. This project will support critical electric infrastructure investments to help reduce the impact of extreme weather and historic
flooding on the Registrants' electric distribution system. The GDO has indicated the award negotiation process can take approximately 120 days.
The Registrants are supporting three different Regional Clean Hydrogen Hub opportunities, covering all five states that Exelon operates in plus Washington D.C. under a program that will create networks
of hydrogen producers, consumers, and local connective infrastructure to accelerate the use of hydrogen as a clean energy carrier that can deliver or store energy. Applications for the three opportunities
under this program were submitted in April 2023. In October 2023 the DOE announced it selected two of the projects for further negotiation: (1) the Mid-Atlantic Clean Hydrogen Hub (MACH2), which is
being supported by PECO and PHI, and (2) the Midwest Alliance for Clean Hydrogen (MachH2), which is being supported by ComEd.
In November 2023, the GDO announced up to $3.9 billion available through the second-round funding opportunity of the Grid Resilience and Innovation Partnerships (GRIP) Program for Fiscal Years
2024 and 2025. This funding opportunity focuses on projects that will improve electric transmission by increasing funding and
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advancing interconnection processes for faster build out of energy projects, create comprehensive solutions that link grid communications systems and operations to increase resilience and reduce power
outages and threats, and deploy advanced technologies such as distributed energy resources and battery systems to provide essential grid services to ensure American communities across the country
have access to affordable, reliable, clean electricity. Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE submitted seven concept papers in response to the second round of the GRIP program. The concept
papers are focused on improving the resilience of the electric grid and deployment of technologies to enhance grid flexibility and deliver benefits to customers and communities across the Exelon footprint.
The GDO is expected to issue notifications of encouragement/discouragement for full applications in the first quarter of 2024. Exelon cannot predict if their concept papers will receive a notification of
encouragement to submit a full application.
PJM Regional Transmission Expansion
On April 6, 2023, PJM received a deactivation notice for Brandon Shores, a 1,282 MW coal generation plant located in BGE service territory. The deactivation was requested for June 1, 2025 and will result
in numerous reliability issues across the region. In June 2023, PJM assigned a portion of transmission system upgrades to mitigate these reliability impacts to PECO, BGE, and Pepco. In July 2023, PJM
Board of Managers approved assigning Exelon transmission system upgrades to mitigate these reliability impacts to PECO, BGE, and Pepco. The initial projected capital expenditures associated with
these upgrades are approximately $80 million, $650 million, and $80 million for PECO, BGE, and Pepco, respectively. These amounts include a scope reduction estimated by PJM for PECO of $60 million
associated with a transmission proposal window, as disclosed at a Transmission Expansion Advisory Committee meeting on October 31, 2023. The upgrades are expected to be completed by the end of
2028.
Separately, PJM held a competitive transmission proposal window from February 24, 2023 through May 31, 2023 to address reliability issues driven by significant load increases in northern Virginia.
PECO, BGE, and Pepco submitted four solution proposals. At a meeting of the Transmission Expansion Advisory Committee on October 31, 2023, PJM recommended that PECO, BGE, Pepco, and DPL
be awarded a portion of the work for the proposed solution. Initial estimated costs for these upgrades are approximately $70 million, $700 million, $80 million, and $5 million for PECO, BGE, Pepco, and
DPL, respectively. The PJM Board of Managers approved the solution in December 2023 and the upgrades are expected to be completed by the end of 2030.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the
amounts of assets and liabilities reported in the financial statements. Management believes that the accounting policies described below require significant judgment in their application or incorporate
estimates and assumptions that are inherently uncertain and that may change in subsequent periods. Additional information on the application of these accounting policies can be found in the Combined
Notes to Consolidated Financial Statements.
Goodwill (Exelon, ComEd, and PHI)
As of December 31, 2023, Exelon’s $6.6 billion carrying amount of goodwill consists of $2.6 billion at ComEd and $4 billion at PHI. These entities are required to perform an assessment for possible
impairment of their goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting units below their carrying
amount. A reporting unit is an operating segment or one level below an operating segment (known as a component) and is the level at which goodwill is assessed for impairment. ComEd has a single
operating segment and reporting unit. PHI’s operating segments and reporting units are Pepco, DPL, and ACE. See Note 5 — Segment Information of the Combined Notes to Consolidated Financial
Statements for additional information. Exelon's and ComEd’s goodwill has been assigned entirely to the ComEd reporting unit. Exelon's and PHI’s goodwill has been assigned to the Pepco, DPL, and ACE
reporting units in the amounts of $2.1 billion, $1.4 billion, and $0.5 billion, respectively. See Note 12 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional
information.
Entities assessing goodwill for impairment have the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary. As part of the qualitative assessments,
Exelon, ComEd, and PHI evaluate, among other things, management's best estimate of projected operating and capital cash flows for their businesses, outcomes of recent regulatory proceedings,
changes in certain market
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conditions, including the discount rate and regulated utility peer EBITDA multiples, and the passing margin from their last quantitative assessments performed.
Application of the goodwill impairment assessment requires management judgment, including the identification of reporting units and determining the fair value of the reporting unit, which management
estimates using a weighted combination of a discounted cash flow analysis and a market multiples analysis. Significant assumptions used in these fair value analyses include discount and growth rates,
utility sector market performance and transactions, and projected operating and capital cash flows for ComEd’s, Pepco's, DPL's, and ACE's businesses and the fair value of debt.
While the 2023 annual assessments indicated no impairments, certain assumptions used in the assessment are highly sensitive to changes. Adverse regulatory actions or changes in significant
assumptions could potentially result in future impairments of Exelon’s, ComEd's, or PHI’s goodwill, which could be material.
See Note 1 — Significant Accounting Policies and Note 12 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional information.
Unamortized Energy Contract Liabilities (Exelon and PHI)
Unamortized energy contract liabilities represent the remaining unamortized balances of non-derivative electricity contracts that Exelon acquired as part of the PHI merger. The initial amount recorded
represents the difference between the fair value of the contracts at the time of acquisition and the contract value based on the terms of each contract. Offsetting regulatory assets were also recorded for
those energy contract costs that are probable of recovery through customer rates. The unamortized energy contract liabilities and the corresponding regulatory assets, respectively, are amortized over the
life of the contract in relation to the expected realization of the underlying cash flows. Amortization of the unamortized energy contract liabilities are recorded through Purchased power and fuel expense.
See Note 3 — Regulatory Matters and Note 12 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional information.
Depreciable Lives of Property, Plant, and Equipment (All Registrants)
The Registrants have significant investments in electric and natural gas transmission and distribution assets. These assets are generally depreciated on a straight-line basis, using the group, or composite
methods of depreciation. The group approach is typically for groups of similar assets that have approximately the same useful lives and the composite approach is used for heterogeneous assets that have
different lives. Under both methods, a reporting entity depreciates the assets over the average life of the assets in the group. The estimation of asset useful lives requires management judgment, supported
by formal depreciation studies of historical asset retirement experience. Depreciation studies are conducted periodically and as required by a rate regulator or regulatory action, or changes in retirement
patterns indicate an update is necessary.
Depreciation studies generally serve as the basis for amounts allowed in customer rates for recovery of depreciation costs. Generally, the Registrants adjust their depreciation rates for financial reporting
purposes concurrent with adjustments to depreciation rates reflected in customer rates, unless the depreciation rates reflected in customer rates do not align with management’s judgment as to an
appropriate estimated useful life or have not been updated on a timely basis. Depreciation expense and customer rates for ComEd, BGE, Pepco, DPL, and ACE include an estimate of the future costs of
dismantling and removing plant from service upon retirement. See Note 3 — Regulatory Matters of the Combined Notes to the Consolidated Financial Statements for information regarding regulatory
liabilities and assets recorded by ComEd, BGE, Pepco, DPL, and ACE related to removal costs.
PECO’s removal costs are capitalized to accumulated depreciation when incurred and recorded to depreciation expense over the life of the new asset constructed consistent with PECO’s regulatory
recovery method. Estimates for such removal costs are also evaluated in the periodic depreciation studies.
Changes in estimated useful lives of electric and natural gas transmission and distribution assets could have a significant impact on the Registrants’ future results of operations. See Note 1 — Significant
Accounting Policies of the Combined Notes to Consolidated Financial Statements for information regarding depreciation and estimated service lives of the property, plant, and equipment of the Registrants.
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Retirement Benefits (All Registrants)
Exelon sponsors defined benefit pension plans and OPEB plans. The measurement of the plan obligations and costs of providing benefits involves various factors, including the development of valuation
assumptions and inputs and accounting policy elections. When developing the required assumptions, Exelon considers historical information as well as future expectations. The measurement of benefit
obligations and costs is affected by several assumptions including the discount rate, the long-term expected rate of return on plan assets, the anticipated rate of increase of health care costs, Exelon's
contributions, the rate of compensation increases, and the long-term expected investment rate credited to employees of certain plans, among others. The assumptions are updated annually and upon any
interim remeasurement of the plan obligations.
Pension and OPEB plan assets include cash and cash equivalents, equity securities, including U.S. and international securities, and fixed income securities, as well as certain alternative investment
classes such as real estate, private equity, private credit, and hedge funds.
Expected Rate of Return on Plan Assets. In determining the EROA, Exelon considers historical economic indicators (including inflation and GDP growth) that impact asset returns, as well as expectation
regarding future long-term capital market performance, weighted by Exelon’s target asset class allocations. Exelon calculates the amount of expected return on pension and OPEB plan assets by
multiplying the EROA by the MRV of plan assets at the beginning of the year, taking into consideration anticipated contributions and benefit payments to be made during the year. In determining MRV, the
authoritative guidance for pensions and postretirement benefits allows the use of either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not
more than five years. For the majority of pension plan assets, Exelon uses a calculated value that adjusts for 20% of the difference between fair value and expected MRV of plan assets. Use of this
calculated value approach enables less volatile expected asset returns to be recognized as a component of pension cost from year to year. For OPEB plan assets and certain pension plan assets, Exelon
uses fair value to calculate the MRV.
Discount Rate. The discount rates are determined by developing a spot rate curve based on the yield to maturity of a universe of high-quality non-callable (or callable with make whole provisions) bonds
with similar maturities to the related pension and OPEB obligations. The spot rates are used to discount the estimated future benefit distribution amounts under the pension and OPEB plans. The discount
rate is the single level rate that produces the same result as the spot rate curve. Exelon utilizes an analytical tool developed by its actuaries to determine the discount rates.
Mortality. The mortality assumption is composed of a base table that represents the current expectation of life expectancy of the population adjusted by an improvement scale that attempts to anticipate
future improvements in life expectancy. Exelon’s mortality assumption utilizes the SOA 2019 base table (Pri-2012) and MP-2021 improvement scale adjusted to use Proxy SSA ultimate improvement rates.
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Sensitivity to Changes in Key Assumptions. The following tables illustrate the effects of changing certain of the actuarial assumptions discussed above, while holding all other assumptions constant:
Actuarial Assumption
Change in 2023 cost:
Discount rate
(a)
EROA
Change in benefit obligation at December 31, 2023:
Discount rate
(a)
Actual Assumption
(Decrease) Increase
Pension
5.53%
5.53%
7.00%
7.00%
5.19%
5.19%
OPEB
5.51%
5.51%
6.50%
6.50%
5.17%
5.17%
Change in
Assumption
0.5%
(0.5)%
0.5%
(0.5)%
0.5%
(0.5)%
Pension
OPEB
Total
$
$
$
$
$
$
(17) $
$
21
(54) $
$
54
(449) $
513 $
$
(2)
2 $
(6)
$
6 $
(82) $
$
92
(19)
23
(60)
60
(531)
605
__________
(a)
In general, the discount rate will have a larger impact on the pension and OPEB cost and obligation as the rate moves closer to 0%. Therefore, the discount rate sensitivities above cannot necessarily be extrapolated for
larger increases or decreases in the discount rate. Additionally, Exelon utilizes a liability-driven investment strategy for its pension asset portfolio. The sensitivities shown above do not reflect the offsetting impact that
changes in discount rates may have on pension asset returns.
See Note 1 — Significant Accounting Policies and Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information regarding the accounting for the
defined benefit pension plans and OPEB plans.
Regulatory Accounting (All Registrants)
For their regulated electric and gas operations, the Registrants reflect the effects of cost-based rate regulation in their financial statements, which is required for entities with regulated operations that meet
the following criteria: (1) rates are established or approved by a third-party regulator; (2) rates are designed to recover the entities’ cost of providing services or products; and (3) a reasonable expectation
that rates designed to recover costs can be charged to and collected from customers. Regulatory assets represent incurred costs that have been deferred because of their probable future recovery from
customers through regulated rates. Regulatory liabilities represent (1) revenue or gains that have been deferred because it is probable such amounts will be returned to customers through future regulated
rates; or (2) billings in advance of expenditures for approved regulatory programs. If it is concluded in a future period that a separable portion of operations no longer meets the criteria discussed above, the
Registrants would be required to eliminate any associated regulatory assets and liabilities and the impact, which could be material, would be recognized in the Consolidated Statements of Operations and
Comprehensive Income.
The following table illustrates gains (losses) to be included in net income that could result from the elimination of regulatory assets and liabilities and charges against OCI related to deferred costs
associated with Exelon's pension and OPEB plans that are recorded as Regulatory assets in Exelon's Consolidated Balance Sheets (before taxes) at December 31, 2023:
(In millions)
Gain (loss)
Charge against OCI
(a)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
1,920
(2,868)
$
3,555 $
—
(514) $
—
(156) $
—
(949) $
—
(203) $
—
143 $
—
(462)
—
___________
(a) Exelon's charge against OCI (before taxes) consists of up to $2.1 billion, $355 million, $485 million, $298 million, $122 million, and $22 million related to ComEd's, BGE's, PHI's, Pepco's, DPL's, and ACE's respective
portions of the deferred costs associated with Exelon's pension and OPEB plans. Exelon also has a net regulatory liability of $102 million (before taxes) related to PECO’s portion of the deferred costs associated with
Exelon’s OPEB plans that would result in an increase in OCI if reversed.
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See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding regulatory matters, including the regulatory assets and liabilities of the
Registrants.
For each regulatory jurisdiction in which they conduct business, the Registrants assess whether the regulatory assets and liabilities continue to meet the criteria for probable future recovery or refund at
each balance sheet date and when regulatory events occur. This assessment includes consideration of recent rate orders, historical regulatory treatment for similar costs in each Registrant's jurisdictions,
and factors such as changes in applicable regulatory and political environments. If the assessments and estimates made by the Registrants for regulatory assets and regulatory liabilities are ultimately
different than actual regulatory outcomes, the impact in their consolidated financial statements could be material.
Refer to the revenue recognition discussion below for additional information on the annual revenue reconciliations associated with ICC-approved electric distribution and energy efficiency formula rates for
ComEd, and FERC transmission formula rate tariffs for the Utility Registrants.
Derivative Financial Instruments (All Registrants)
The Registrants use derivative instruments to manage commodity price risk and interest rate risk related to ongoing business operations. See Note 15 — Derivative Financial Instruments of the Combined
Notes to Consolidated Financial Statements for additional information.
Determining whether a contract qualifies as a derivative requires that management exercise significant judgment, including assessing market liquidity as well as determining whether a contract has one or
more underlying and one or more notional quantities.
All derivatives are recognized on the balance sheet at their fair value, except for certain derivatives that qualify for, and are elected under, NPNS. For derivatives that qualify and are designated as cash
flow hedges, changes in fair value each period are initially recorded in AOCI and recognized in earnings when the hedged transaction affects earnings. For derivatives intended to serve as economic
hedges, which are not designated for hedge accounting, changes in fair value each period are recognized in earnings on the Consolidated Statement of Operations and Comprehensive Income or are
recorded as a regulatory asset or liability when there is an ability to recover or return the associated costs or benefits in accordance with regulatory requirements.
NPNS. Contracts that are designated as NPNS are not required to be recorded at fair value, but rather on an accrual basis of accounting. Determining whether a contract qualifies for NPNS requires
judgment on whether the contract will physically deliver and requires that management ensure compliance with all the associated qualification and documentation requirements. For all NPNS derivative
instruments, accounts payable is recorded when derivatives settle and expense is recognized in earnings as the underlying physical commodity is consumed. Contracts that qualify for NPNS are those for
which physical delivery is probable, quantities are expected to be used or sold in the normal course of business over a reasonable period, and the contract is not financially settled on a net basis. See Note
15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for all contracts that are accounted for under NPNS.
Commodity Contracts. The Registrants make estimates and assumptions concerning future commodity prices, interest rates, and the timing of future transactions and their probable cash flows in
deciding whether to enter derivative transactions, and in determining the initial accounting treatment for derivative transactions. The Registrants categorize these derivatives under a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value.
Derivative contracts can be traded in both exchange-based and non-exchange-based markets. Exchange-based derivatives that are valued using unadjusted quoted prices in active markets are generally
categorized in Level 1 in the fair value hierarchy. Certain derivative pricing is verified using indicative price quotations available through brokers or over-the-counter, online exchanges. For derivatives that
trade in liquid markets, the model inputs are generally observable. Such instruments are categorized in Level 2. For derivatives that trade in less liquid markets with limited pricing information, the model
inputs generally would include both observable and unobservable inputs and are categorized in Level 3.
The Registrants consider nonperformance risk, including credit risk in the valuation of derivative contracts, and both historical and current market data in the assessment of nonperformance risk. The
impacts of nonperformance and credit risk to date have generally not been material to the Registrants’ financial statements.
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Interest Rate Derivative Instruments. Exelon Corporate utilizes interest rate swaps to manage interest rate risk on existing and planned future debt issuances as well as potential fluctuations in Electric
operating revenues at the corporate level in consolidation, which are directly correlated to yields on U.S. Treasury bonds under ComEd's distribution formula rate. The fair value of the swaps is calculated
by discounting the future net cash flows to the present value based on the terms and conditions of the agreements and the forward interest rate curves. As these inputs are based on observable data and
valuations of similar instruments, the interest rate derivatives are primarily categorized in Level 2 in the fair value hierarchy.
See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK and Note 17 — Fair Value of Financial Assets and Liabilities and Note 15 — Derivative Financial Instruments
of the Combined Notes to Consolidated Financial Statements for additional information regarding the Registrants’ derivative instruments.
Income Taxes (All Registrants)
Significant management judgment is required in determining the Registrants’ provisions for income taxes, primarily due to the uncertainty related to tax positions taken, as well as deferred tax assets and
liabilities and valuation allowances. The Registrants account for uncertain income tax positions using a benefit recognition model with a two-step approach including a more-likely-than-not recognition
threshold and a measurement approach based on the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. Management evaluates each position based
solely on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information. Significant
judgment is required to determine whether the recognition threshold has been met and, if so, the appropriate amount of tax benefits to be recorded in the Registrants’ consolidated financial statements.
The Registrants evaluate quarterly the probability of realizing deferred tax assets by reviewing a forecast of future taxable income and their intent and ability to implement tax planning strategies, if
necessary, to realize deferred tax assets. The Registrants also assess negative evidence, such as the expiration of historical operating loss or tax credit carryforwards, that could indicate the Registrant's
inability to realize its deferred tax assets. Based on the combined assessment, the Registrants record valuation allowances for deferred tax assets when it is more-likely-than-not such benefit will not be
realized in future periods.
Actual income taxes could vary from estimated amounts due to the future impacts of various items, including future changes in income tax laws, the Registrants’ forecasted financial condition and results of
operations, failure to successfully implement tax planning strategies, as well as results of audits and examinations of filed tax returns by taxing authorities. See Note 13 — Income Taxes of the Combined
Notes to Consolidated Financial Statements for additional information.
Accounting for Loss Contingencies (All Registrants)
In the preparation of their financial statements, the Registrants make judgments regarding the future outcome of contingent events and record liabilities for loss contingencies that are probable and can be
reasonably estimated based upon available information. The amount recorded may differ from the actual expense incurred when the uncertainty is resolved. Such difference could have a significant impact
in the Registrants' consolidated financial statements.
Environmental Costs. Environmental investigation and remediation liabilities are based upon estimates with respect to the number of sites for which the Registrants will be responsible, the scope and cost
of work to be performed at each site, the portion of costs that will be shared with other parties, the timing of the remediation work, regulations, and the requirements of local governmental authorities.
Annual studies and/or reviews are conducted at ComEd, PECO, BGE, and DPL to determine future remediation requirements for MGP sites and estimates are adjusted accordingly. In addition, periodic
reviews are performed at each of the Registrants to assess the adequacy of other environmental reserves. These matters, if resolved in a manner different from the estimate, could have a significant
impact in the Registrants’ consolidated financial statements. See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.
Other, Including Personal Injury Claims. The Registrants are self-insured for general liability, automotive liability, workers’ compensation, and personal injury claims to the extent that losses are within
policy deductibles
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or exceed the amount of insurance maintained. The Registrants have reserves for both open claims asserted, and an estimate of claims incurred but not reported (IBNR). The IBNR reserve is estimated
based on actuarial assumptions and analysis and is updated annually. Future events, such as the number of new claims to be filed each year, the average cost of disposing of claims, as well as the
numerous uncertainties surrounding litigation and possible state and national legislative measures could cause the actual costs to be higher or lower than estimated. Accordingly, these claims, if resolved
in a manner different from the estimate, could have a material impact to the Registrants’ consolidated financial statements.
Revenues (All Registrants)
Sources of Revenue and Determination of Accounting Treatment. The Registrants earn revenues from the sale and delivery of power and natural gas in regulated markets. The accounting treatment
for revenue recognition is based on the nature of the underlying transaction and applicable authoritative guidance. The Registrants primarily apply the Revenue from Contracts with Customers, and
Alternative Revenue Program accounting guidance to recognize revenues as discussed in more detail below.
Revenue from Contracts with Customers. The Registrants recognize revenues in the period in which the performance obligations within contracts with customers are satisfied, which generally occurs
when power and natural gas are physically delivered to the customer. Transactions of the Registrants within the scope of Revenue from Contracts with Customers generally include sales to utility
customers under regulated service tariffs.
The determination of the Registrants' power and natural gas sales to individual customers is based on systematic readings of customer meters, generally monthly. At the end of each month, amounts of
energy delivered to customers since the date of the last meter reading are estimated, and corresponding unbilled revenue is recorded. The measurement of unbilled revenue is affected by the following
factors: daily customer usage measured by generation or gas throughput volume, customer usage by class, losses of energy during delivery to customers and applicable customer rates. Increases or
decreases in volumes delivered to the Registrant’s customers and favorable or unfavorable rate mix due to changes in usage patterns in customer classes in the period could be significant to the
calculation of unbilled revenue. In addition, revenues may fluctuate monthly as a result of customers electing to use an alternative supplier, since unbilled commodity revenues are not recorded for these
customers. Changes in the timing of meter reading schedules and the number and type of customers scheduled for each meter reading date also impact the measurement of unbilled revenue; however,
total operating revenues would remain materially unchanged. See Note 1 — Significant Accounting Policies of the Combined Notes to Consolidated Financial Statements for additional information.
Alternative Revenue Program Accounting. Certain of the Registrants’ ratemaking mechanisms qualify as ARPs if they (i) are established by a regulatory order and allow for automatic adjustment to
future rates, (ii) provide for additional revenues (above those amounts currently reflected in the price of utility service) that are objectively determinable and probable of recovery, and (iii) allow for the
collection of those additional revenues within 24 months following the end of the period in which they were recognized. For mechanisms that meet these criteria, which include the Registrants’ formula rate
mechanisms and revenue decoupling mechanisms, the Registrants adjust revenue and record an offsetting regulatory asset or liability once the condition or event allowing additional billing or refund has
occurred. The ARP revenues presented in the Registrants’ Consolidated Statements of Operations and Comprehensive Income include both: (i) the recognition of “originating” ARP revenues (when the
regulator-specified condition or event allowing for additional billing or refund has occurred) and (ii) an equal and offsetting reversal of the “originating” ARP revenues as those amounts are reflected in the
price of utility service and recognized as Revenue from Contracts with Customers.
ComEd records ARP revenue for its best estimate of the electric distribution, energy efficiency, distributed generation rebates, and transmission revenue impacts resulting from future changes in rates that
ComEd believes are probable of approval by the ICC and FERC in accordance with its formula rate mechanisms. BGE, Pepco, DPL, and ACE record ARP revenue for their best estimate of the electric and
natural gas distribution revenue impacts resulting from future changes in rates that they believe are probable of approval by the MDPSC, DCPSC, and/or NJBPU in accordance with their revenue
decoupling mechanisms. PECO, BGE, Pepco, DPL, and ACE record ARP revenue for their best estimate of the transmission revenue impacts resulting from future changes in rates that they believe are
probable of approval by FERC in accordance with their formula rate mechanisms. Estimates of the current year revenue requirement are based on actual and/or forecasted costs and investments in rate
base for the period and the rates of return on common equity and associated regulatory
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capital structure allowed under the applicable tariff. The estimated reconciliation can be affected by, among other things, variances in costs incurred, investments made, allowed ROE, and actions by
regulators or courts.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.
Allowance for Credit Losses on Customer Accounts Receivable (All Registrants)
The Registrants estimate the allowance for credit losses on customer receivables by applying loss rates developed specifically for each company based on historical loss experience, current conditions,
and forward-looking risk factors to the outstanding receivable balance by customer risk segment. Risk segments represent a group of customers with similar forward-looking credit quality indicators and risk
factors that are comprised based on various attributes, including delinquency of their balances and payment history and represent expected, future customer behavior. Loss rates applied to the accounts
receivable balances are based on a historical average of charge-offs as a percentage of accounts receivable in each risk segment. The Registrants' customer accounts are generally considered delinquent
if the amount billed is not received by the time the next bill is issued, which normally occurs on a monthly basis. The Registrants' customer accounts are written off consistent with approved regulatory
requirements. The Registrants' allowances for credit losses will continue to be affected by changes in volume, prices, and economic conditions as well as changes in ICC, PAPUC, MDPSC, DCPSC,
DEPSC, and NJBPU regulations.
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Results of Operations by Registrant
Results of Operations—ComEd
Operating revenues
Operating expenses
Purchased power
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Gain on sales of assets
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
ComEd
Favorable (Unfavorable)
Variance
2,083
(1,707)
(38)
(80)
5
(1,820)
2
265
(63)
21
(42)
223
(50)
173
2023
2022
$
7,844 $
5,761 $
2,816
1,450
1,403
369
6,038
—
1,806
(477)
75
(402)
1,404
314
1,109
1,412
1,323
374
4,218
(2)
1,541
(414)
54
(360)
1,181
264
$
1,090 $
917 $
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income increased by $173 million primarily due to increases in electric distribution formula rate earnings (reflecting
higher allowed ROE due to an increase in U.S. Treasury rates and the impacts of higher rate base) and carrying costs related to CMC regulatory assets.
The changes in Operating revenues consisted of the following:
Distribution
Transmission
Energy efficiency
Other
Regulatory required programs
Total increase
2023 vs. 2022
Increase
384
11
64
7
466
1,617
2,083
$
$
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. Operating revenues are not impacted by abnormal weather, usage per customer, or number of customers as
a result of revenue decoupling mechanisms implemented pursuant to FEJA.
Distribution Revenue. EIMA and FEJA provide for a performance-based formula rate, which requires an annual reconciliation of the revenue requirement in effect to the actual costs that the ICC
determines are prudently and reasonably incurred in a given year. Electric distribution revenue varies from year to year based upon fluctuations in the underlying costs (e.g., severe weather and storm
restoration), investments being recovered, and allowed ROE. Electric distribution revenue increased during the year ended December 31, 2023, compared to the same period in 2022, due to higher
allowed ROE due to an increase in U.S. Treasury rates, the impact of a higher rate base, and higher fully recoverable costs.
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ComEd
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs, capital investments being recovered, and the
highest daily peak load, which is updated annually in January based on the prior calendar year. Generally, increases/decreases in the highest daily peak load will result in higher/lower transmission
revenue. Transmission revenues increased during the year ended December 31, 2023, compared to the same period in 2022, primarily due to the impact of a higher rate base and higher fully recoverable
costs.
Energy Efficiency Revenue. FEJA provides for a performance-based formula rate, which requires an annual reconciliation of the revenue requirement in effect to the actual costs that the ICC determines
are prudently and reasonably incurred in a given year. Under FEJA, energy efficiency revenue varies from year to year based upon fluctuations in the underlying costs, investments being recovered, and
allowed ROE. Energy efficiency revenue increased during the year ended December 31, 2023, compared to the same period in 2022, primarily due to the impact of a higher rate base, and increased
regulatory asset amortization, which is fully recoverable.
Other Revenue primarily includes assistance provided to other utilities through mutual assistance programs. Other revenue increased for the year ended December 31, 2023, compared to the same period
in 2022, which primarily reflects mutual assistance revenues associated with storm restoration efforts.
Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as recoveries under the credit loss expense tariff,
environmental costs associated with MGP sites, ETAC, and costs related to electricity, ZEC, CMC, and REC procurement. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated
Financial Statements for additional information regarding CMCs. ETAC is a retail customer surcharge collected by electric utilities operating in Illinois established by CEJA and remitted to an Illinois state
agency for programs to support clean energy jobs and training. The riders are designed to provide full and current cost recovery. The costs of these programs are included in Purchased power expense,
Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income. Customers have the choice to purchase electricity from competitive electric generation
suppliers. Customer choice programs do not impact the volume of deliveries as ComEd remains the distribution service provider for all customers and charges a regulated rate for distribution service, which
is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ComEd either acts as the billing agent or the competitive supplier separately bills
its own customers, and therefore does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ComEd,
ComEd is permitted to recover the electricity, ZEC, CMC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power
expense related to the electricity, ZECs, CMCs, and RECs.
See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ComEd's revenue disaggregation.
The increase of $1,707 million for the year ended December 31, 2023, compared to the same period in 2022, in Purchased power expense is primarily due to the CMCs from the participating nuclear-
powered generating facilities, which is offset by an increase in Operating revenues as part of regulatory required programs. See Note 3 - Regulatory Matters of the Combined Notes to Consolidated
Financial Statements for additional information regarding CMCs.
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The changes in Operating and maintenance expense consisted of the following:
BSC costs
Labor, other benefits, contracting, and materials
Storm-related costs
Pension and non-pension postretirement benefits expense
Other
Regulatory required programs
Total increase
(a)
2023 vs. 2022
Increase (Decrease)
$
$
__________
(a) ComEd is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through a rider mechanism.
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
Regulatory asset amortization
(a)
(b)
Total increase
__________
(a) Reflects ongoing capital expenditures and higher depreciation rates effective January 2023.
(b)
Includes amortization of ComEd's energy efficiency formula rate regulatory asset.
2023 vs. 2022
Increase
$
$
ComEd
36
35
(10)
(13)
53
101
(63)
38
64
16
80
Interest expense, net increased $63 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to an increase in interest rates and the issuance of debt in 2022
and 2023.
Effective income tax rates were 22.4% and 22.4% for the years ended December 31, 2023 and 2022, respectively. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information regarding the components of the effective income tax rates.
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Results of Operations—PECO
Operating revenues
Operating expenses
Purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
PECO
2023
2022
$
3,894 $
3,903 $
(Unfavorable)
Favorable Variance
1,544
1,003
397
202
3,146
748
(201)
36
(165)
583
20
1,535
992
373
202
3,102
801
(177)
31
(146)
655
79
$
563 $
576 $
(9)
(9)
(11)
(24)
—
(44)
(53)
(24)
5
(19)
(72)
59
(13)
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income decreased by $13 million, primarily due to unfavorable weather and increases in depreciation and
amortization expense and interest expense, partially offset by an increase in gas distribution rates and Pennsylvania corporate income tax legislation passed in July 2022 driving a one-time non-cash
decrease to net income for 2022.
The changes in Operating revenues consisted of the following:
Weather
Volume
Pricing
Transmission
Other
Regulatory required programs
Total decrease
2023 vs. 2022
(Decrease) Increase
Electric
Gas
Total
$
$
(103) $
1
31
23
(3)
(51)
88
37
$
(37) $
1
52
—
6
22
(68)
(46) $
(140)
2
83
23
3
(29)
20
(9)
Weather. The demand for electricity and natural gas is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the electric and
natural gas businesses, very cold weather in winter months are referred to as “favorable weather conditions” because these weather conditions result in increased deliveries of electricity and natural gas.
Conversely, mild weather reduces demand. For the year ended December 31, 2023 compared to the same period in 2022, Operating revenues related to weather decreased due to the impact of
unfavorable weather conditions in PECO's service territory.
Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating
and cooling degree days for a 30-year period in PECO’s service territory. The changes in heating and cooling degree days in PECO’s service territory for the years ended December 31, 2023 compared to
the same period in 2022 and normal weather consisted of the following:
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PECO Service Territory
Heating Degree-Days
Cooling Degree-Days
PECO
For the Years Ended December 31,
% Change
2023
2022
Normal
2023 vs. 2022
2023 vs. Normal
3,587
1,345
4,135
1,743
4,399
1,440
(13.3)%
(22.8)%
(18.5)%
(6.6)%
Volume. Electric volume, exclusive of the effects of weather, for the year ended December 31, 2023 compared to the same period in 2022, remained relatively consistent. Natural gas volume for the year
ended December 31, 2023 compared to the same period in 2022, remained relatively consistent.
Electric Retail Deliveries to Customers (in GWhs)
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total electric retail deliveries
(a)
2023
2022
% Change
Weather - Normal % Change
(b)
13,262
7,367
13,638
606
34,873
14,379
7,701
14,046
638
36,764
(7.8)%
(4.3)%
(2.9)%
(5.0)%
(5.1)%
0.5 %
(0.3) %
(0.8) %
(5.0) %
(0.3) %
__________
(a) Reflects delivery volumes from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution
charges.
(b) Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
Number of Electric Customers
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total
Natural Gas Deliveries to customers (in mmcf)
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Total natural gas deliveries
(a)
At December 31,
2023
2022
1,535,927
156,248
3,127
10,417
1,705,719
1,525,635
155,576
3,121
10,393
1,694,725
2023
2022
% Change
Weather - Normal % Change
(b)
35,842
21,182
51
23,741
80,816
42,135
23,449
31
25,011
90,626
(14.9)%
(9.7)%
64.5 %
(5.1)%
(10.8)%
(3.2) %
(1.7) %
2.7 %
(2.4) %
(2.6) %
__________
(a) Reflects delivery volumes from customers purchasing natural gas directly from PECO and customers purchasing electricity from a competitive natural gas supplier as all customers are assessed distribution charges.
(b) Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
Number of Gas Customers
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Total
At December 31,
2023
2022
507,197
45,001
9
627
552,834
502,944
44,957
9
655
548,565
Pricing for the year ended December 31, 2023 compared to the same period in 2022 increased primarily due to an increase in gas distribution rates charged to customers, coupled with higher overall
effective rates for both electric and gas attributable to decreased usage.
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PECO
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Other Revenue primarily includes revenue related to late payment charges. Other revenues for the year ended December 31, 2023 compared to the same period in 2022, remained relatively consistent.
Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency, PGC, and the GSA. The riders are
designed to provide full and current cost recovery as well as a return. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation
and amortization expense, and Income taxes. Customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. Customer choice programs
do not impact the volume of deliveries as PECO remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For
customers that choose to purchase electric generation or natural gas from competitive suppliers, PECO either acts as the billing agent or the competitive supplier separately bills its own customers and
therefore PECO does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural
gas from PECO, PECO is permitted to recover the electricity, natural gas, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and
Purchased power and fuel expense related to the electricity, natural gas, and RECs.
See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of PECO's revenue disaggregation.
The increase of $9 million for the year ended December 31, 2023, compared to the same period in 2022, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory
required programs.
The changes in Operating and maintenance expense consisted of the following:
Storm-related costs
BSC costs
Pension and non-pension postretirement benefits expense
Labor, other benefits, contracting, and materials
Other
(a)
Regulatory Required Programs
Total increase
__________
(a)
Due to one-time charitable contributions for the year ended December 31, 2022
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
(a)
Regulatory asset amortization
Total increase
__________
(a) Depreciation and amortization expense increased primarily due to ongoing capital expenditures.
2023 vs. 2022
Increase (Decrease)
2023 vs. 2022
Increase
22
15
(3)
(2)
(31)
1
10
11
24
—
24
$
$
$
$
Interest expense, net increased $24 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to the issuance of debt in 2022 and 2023 and increases in interest
rates.
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PECO
Effective income tax rates were 3.4% and 12.1% for the years ended December 31, 2023 and 2022, respectively. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information regarding the components of the effective income tax rates.
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Results of Operations—BGE
Operating revenues
Operating expenses
Purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
BGE
Favorable (Unfavorable)
Variance
132
36
136
(24)
(17)
131
263
(30)
(3)
(33)
230
(125)
105
2023
2022
$
4,027 $
3,895 $
1,531
741
654
319
3,245
782
(182)
18
(164)
618
133
1,567
877
630
302
3,376
519
(152)
21
(131)
388
8
$
485 $
380 $
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income increased $105 million primarily due to favorable impacts of the multi-year plans including the recognition of
the reconciliation in 2023 and an asset impairment in 2022, partially offset by an increase in depreciation expense, interest expense, and increase in income taxes in 2023 as compared to 2022. See Note
11 — Asset Impairments for additional information on the asset impairment and Note 3 — Regulatory Matters for additional information on multi-year plan order.
The changes in Operating revenues consisted of the following:
Distribution
Transmission
Other
Regulatory required programs
Total increase (decrease)
2023 vs. 2022
Increase (Decrease)
Electric
Gas
Total
78
56
(1)
133
104
237
$
$
$
45
—
2
47
(152)
(105) $
123
56
1
180
(48)
132
$
$
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BGE
Revenue Decoupling. The demand for electricity and natural gas is affected by weather and customer usage. However, Operating revenues are not impacted by abnormal weather or usage per customer
as a result of a monthly rate adjustment that provides for fixed distribution revenue per customer by customer class. While Operating revenues are not impacted by abnormal weather or usage per
customer, they are impacted by changes in the number of customers. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on revenue
decoupling for BGE.
Number of Electric Customers
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total
Number of Gas Customers
Residential
Small commercial & industrial
Large commercial & industrial
Total
At December 31,
2023
2022
1,211,889
115,787
13,072
261
1,341,009
At December 31,
2023
2022
657,823
37,993
6,309
702,125
1,204,429
115,524
12,839
266
1,333,058
655,373
38,207
6,233
699,813
Distribution Revenue increased for the year ended December 31, 2023 compared to the same period in 2022, due to favorable impacts of the multi-year plans.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Transmission revenue increased for the year ended December 31, 2023 compared to the same period in 2022 primarily due to increases in underlying costs and capital investments.
Other Revenue includes revenue related to late payment charges, mutual assistance, off-system sales, and service application fees. Other Revenue remained relatively consistent for the year ended
December 31, 2023 compared to the same period in 2022.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as conservation, demand response, STRIDE, and the POLR
mechanism. The riders are designed to provide full and current cost recovery, as well as a return in certain instances. The costs of these programs are included in Purchased power and fuel expense,
Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity and natural gas from competitive
electric generation and natural gas suppliers. Customer choice programs do not impact the volume of deliveries as BGE remains the distribution service provider for all customers and charges a regulated
rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, BGE acts as the billing agent and
therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas
from BGE, BGE is permitted to recover the electricity and natural gas procurement costs from customers and therefore records the amounts related to the electricity and/or natural gas in Operating
revenues and Purchased power and fuel expense. BGE recovers electricity and natural gas procurement costs from customers with a slight mark-up.
See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of BGE's revenue disaggregation.
The decrease of $36 million for the year ended December 31, 2023 compared to the same period in 2022 in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory
required programs.
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The changes in Operating and maintenance expense consisted of the following:
BSC costs
Storm-related costs
Labor, other benefits, contracting, and materials
Pension and non-pension postretirement benefits expense
Credit loss expense
Impairment on long-lived assets
(b)
Multi-year plan reconciliations
Other
(a)
Regulatory required programs
Total decrease
__________
(a) See Note 11 — Asset Impairments for additional information on the asset impairment taken in 2022.
(b) See Note 3 — Regulatory Matters for additional information on multi-year plan reconciliations.
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
Regulatory required programs
(a)
Regulatory asset amortization
Total increase
__________
(a) Depreciation and amortization increased primarily due to ongoing capital expenditures.
BGE
18
12
12
5
(8)
(48)
(112)
(17)
(138)
2
(136)
30
(5)
(1)
24
2023 vs. 2022
Increase (Decrease)
2023 vs. 2022
Increase (Decrease)
$
$
$
$
Taxes other than income taxes increased by $17 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to increased property taxes.
Interest expense, net increased $30 million for the year ended December 31, 2023 compared to the same period in 2022, due to the issuance of debt in 2022 and 2023 and increases in interest rates.
Effective income tax rates were 21.5% and 2.1% for the years ended December 31, 2023 and 2022, respectively. The change is primarily due to decreases in the multi-year plans' accelerated income tax
benefits in 2023 compared to 2022. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on both the three-year electric and natural gas
distribution multi-year plans and Note 13 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax
rates.
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Results of Operations—PHI
PHI
PHI’s Results of Operations include the results of its three reportable segments, Pepco, DPL, and ACE. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services
and the costs are directly charged or allocated to the applicable subsidiaries. Additionally, the results of PHI's corporate operations include interest costs from various financing activities. All material
intercompany accounts and transactions have been eliminated in consolidation. The following table sets forth PHI's GAAP consolidated Net income, by Registrant, for the year ended December 31, 2023
compared to the same period in 2022. See the Results of Operations for Pepco, DPL, and ACE for additional information.
PHI
Pepco
DPL
ACE
Other
(a)
2023
2022
(Unfavorable) Favorable
Variance
$
590 $
306
177
120
(13)
608 $
305
169
148
(14)
(18)
1
8
(28)
1
__________
(a) Primarily includes eliminating and consolidating adjustments, PHI's corporate operations, shared service entities, and other financing and investing activities.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income decreased by $18 million primarily due to higher contracting costs as a result of the ACE employee strike, an
increase in environmental liabilities at Pepco, an increase in interest expense, depreciation expense, and unfavorable weather at DPL Delaware electric and natural gas service territories, partially offset
by higher distribution rates at DPL Delaware, favorable impacts of the Pepco Maryland and DPL Maryland multi-year plans, and higher transmission rates.
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Results of Operations—Pepco
Operating revenues
Operating expenses
Purchased power
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Gain on sales of assets
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Pepco
Favorable (Unfavorable)
Variance
293
(140)
(65)
(24)
(8)
(237)
9
65
(15)
11
(4)
61
(60)
1
2023
2022
$
2,824 $
2,531 $
974
572
441
390
2,377
9
456
(165)
66
(99)
357
51
834
507
417
382
2,140
—
391
(150)
55
(95)
296
(9)
$
306 $
305 $
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income increased by $1 million primarily due to favorable impacts of the Maryland multi-year plan, higher
transmission rates, customer growth, and a gain on sale of land in the fourth quarter of 2023, partially offset by an increase in environmental liabilities, depreciation expense, and interest expense.
Distribution
Transmission
Other
Regulatory required programs
Total increase
2023 vs. 2022
Increase
94
55
3
152
141
293
$
$
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in both Maryland and the District of Columbia are not
impacted by abnormal weather or usage per customer as a result of a BSA that provides for a fixed distribution charge per customer by customer class. While Operating revenues are not impacted by
abnormal weather or usage per customer, they are impacted by changes in the number of customers. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for
additional information on revenue decoupling for Pepco Maryland and District of Columbia.
Number of Electric Customers
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total
At December 31,
2023
2022
866,018
54,142
22,941
208
943,309
856,037
54,339
22,841
197
933,414
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Pepco
Distribution Revenue increased for the year ended December 31, 2023 compared to the same period in 2022, primarily due to higher rates due to the expiration of customer offsets, favorable impacts of
the Maryland multi-year plan, and customer growth.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Transmission revenue increased for the year ended December 31, 2023 compared to the same period in 2022 primarily due to increases in underlying costs and capital investment.
Other Revenue includes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DC PLUG, and SOS
procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased
power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity from competitive
electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as Pepco remains the distribution service provider for all customers and charges a regulated rate for
distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, Pepco acts as the billing agent and therefore, Pepco
does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from Pepco, Pepco is permitted to recover the
electricity and REC procurement costs from customers and therefore records the amounts related to the electricity and RECs in Operating revenues and Purchased power expense. Pepco recovers
electricity and REC procurement costs from customers with a slight mark-up.
See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of Pepco's revenue disaggregation.
The increase of $140 million for the year ended December 31, 2023 compared to the same period in 2022, in Purchased power expense is fully offset in Operating revenues as part of regulatory required
programs.
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The changes in Operating and maintenance expense consisted of the following:
Labor, other benefits, contracting, and materials
BSC and PHISCO costs
Pension and non-pension postretirement benefits expense
Credit loss expense
Storm-related costs
(a)
Other
Regulatory required programs
Total increase
__________
(a) Primarily reflects an increase in environmental liabilities for the year ended December 31, 2023.
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
(a)
Regulatory asset amortization
Regulatory required programs
Total increase
__________
(a) Depreciation and amortization increased primarily due to ongoing capital expenditures.
Pepco
26
14
11
(3)
(9)
16
55
10
65
22
13
(11)
24
2023 vs. 2022
Increase (Decrease)
2023 vs. 2022
Increase (Decrease)
$
$
$
$
Taxes other than income taxes increased $8 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to an increase in property taxes.
Interest expense, net increased $15 million for the year ended December 31, 2023 compared to the same period in 2022 primarily due to an increase in interest rates and the issuance of debt in 2022
and 2023.
Gain on sales of assets for the year ended December 31, 2023 compared to the same period in 2022 increased $9 million due to the sale of land in the fourth quarter of 2023.
Other, net increased $11 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to higher AFUDC equity.
Effective income tax rates were 14.3% and (3.0)% for the years ended December 31, 2023 and 2022, respectively. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information regarding the components of the effective income tax rates.
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Table of Contents
Results of Operations—DPL
Operating revenues
Operating expenses
Purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
DPL
Favorable (Unfavorable)
Variance
93
(31)
(15)
(12)
(3)
(61)
32
(8)
5
(3)
29
(21)
8
2023
2022
$
1,688 $
1,595 $
737
364
244
75
1,420
268
(74)
18
(56)
212
35
706
349
232
72
1,359
236
(66)
13
(53)
183
14
$
177 $
169 $
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income increased by $8 million primarily due to favorable impacts of the Maryland multi-year plan, higher Delaware
electric and natural gas distribution rates, and higher transmission rates, partially offset by unfavorable weather conditions in Delaware electric and natural gas service territories, and an increase in
depreciation expense and interest expense.
The changes in Operating revenues consisted of the following:
Weather
Volume
Distribution
Transmission
Other
Regulatory required programs
Total increase
2023 vs. 2022
(Decrease) Increase
Electric
Gas
Total
$
$
(10)
$
(6)
34
42
5
65
61
126
$
$
(6)
(5)
7
—
—
(4)
(29)
(33) $
(16)
(11)
41
42
5
61
32
93
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in Maryland are not impacted by abnormal weather or
usage per customer as a result of a BSA that provides for a fixed distribution charge per customer by customer class. While Operating revenues from electric distribution customers in Maryland are not
impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial
Statements for additional information on revenue decoupling for DPL Maryland.
Weather. The demand for electricity and natural gas in Delaware is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the
electric and natural gas businesses, very cold weather in winter months are referred to as "favorable weather conditions” because these weather conditions result in increased deliveries of electricity and
natural gas. Conversely, mild weather reduces demand. During the year ended December 31, 2023 compared to the same period in 2022, Operating revenues
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DPL
related to weather decreased due to unfavorable weather conditions in DPL's Delaware electric and natural gas service territories.
Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating
and cooling degree days for a 20-year period in DPL's Delaware electric service territory and a 30-year period in DPL's Delaware natural gas service territory. The changes in heating and cooling degree
days in DPL’s Delaware service territory for the year ended December 31, 2023 compared to same period in 2022 and normal weather consisted of the following:
Delaware Electric Service Territory
Heating Degree-Days
Cooling Degree-Days
Delaware Natural Gas Service Territory
Heating Degree-Days
For the Years Ended December 31,
% Change
2023
2022
Normal
2023 vs. 2022
2023 vs. Normal
3,845
1,275
4,428
1,382
4,585
1,276
For the Years Ended December 31,
(13.2)%
(7.7)%
% Change
(16.1)%
(0.1)%
2023
2022
Normal
2023 vs. 2022
2023 vs. Normal
3,845
4,428
4,662
(13.2)%
(17.5)%
Volume, exclusive of the effects of weather, decreased for the year ended December 31, 2023 compared to the same period in 2022 primarily due to customer usage, partially offset by customer growth.
Electric Retail Deliveries to Delaware Customers (in GWhs)
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total electric retail deliveries
(a)
Number of Total Electric Customers (Maryland and Delaware)
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total
2023
2022
% Change
Weather - Normal % Change
(b)
3,065
1,399
3,071
33
7,568
3,242
1,443
3,162
33
7,880
(5.5)%
(3.0)%
(2.9)%
— %
(4.0)%
At December 31,
2023
2022
485,713
64,220
1,260
593
551,786
(1.4)%
(1.4)%
(2.0)%
1.2 %
(1.6)%
481,688
63,738
1,235
597
547,258
__________
(a) Reflects delivery volumes from customers purchasing electricity directly from DPL and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.
(b) Reflects the change in delivery volumes assuming normalized weather based on the historical 20-year average.
Natural Gas Retail Deliveries to Delaware Customers (in mmcf)
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Total natural gas deliveries
(a)
2023
2022
% Change
Weather - Normal % Change
(b)
7,326
3,660
1,588
6,004
18,578
8,709
4,176
1,697
6,696
21,278
(15.9)%
(12.4)%
(6.4)%
(10.3)%
(12.7)%
(6.4) %
(2.1) %
(6.4) %
(7.1) %
(5.7) %
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Number of Delaware Natural Gas Customers
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Total
DPL
129,502
10,144
17
156
139,819
At December 31,
2023
2022
129,903
10,133
14
163
140,213
__________
(a) Reflects delivery volumes from customers purchasing natural gas directly from DPL and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges.
(b) Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.
Distribution Revenue increased for the year ended December 31, 2023 compared to the same period in 2022 primarily due favorable impacts of the Maryland multi-year plan that became effective
January 2023, favorable impacts of the higher electric distribution rates in Delaware that became effective July 2023, and higher natural gas distribution rates effective in August 2022.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Transmission revenue increased for the year ended December 31, 2023 compared to the same period in 2022 primarily due to increases in underlying costs and capital investment.
Other Revenue includes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DE Renewable Portfolio
Standards, SOS procurement and administrative costs, and GCR costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these
programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. All customers have the
choice to purchase electricity from competitive electric generation suppliers; however, only certain commercial and industrial customers have the choice to purchase natural gas from competitive natural
gas suppliers. Customer choice programs do not impact the volume of deliveries as DPL remains the distribution service provider for all customers and charges a regulated rate for distribution service,
which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, DPL either acts as the billing agent or the competitive
supplier separately bills its own customers, and therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose
to purchase electric generation or natural gas from DPL, DPL is permitted to recover the electricity, natural gas, and REC procurement costs from customers and therefore records the amounts related to
the electricity, natural gas, and RECs in Operating revenues and Purchased power and fuel expense. DPL recovers electricity and REC procurement costs from customers with a slight mark-up, and
natural gas costs without mark-up.
See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of DPL's revenue disaggregation.
The increase of $31 million for the year ended December 31, 2023 compared to the same period in 2022, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory
required programs.
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The changes in Operating and maintenance expense consisted of the following:
Pension and non-pension postretirement benefits expense
Storm-related costs
BSC and PHISCO costs
Labor, other benefits, contracting, and materials
Credit loss expense
Other
Total increase
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
(a)
Regulatory asset amortization
Regulatory required programs
Total increase
DPL
6
5
4
1
(3)
2
15
17
(1)
(4)
12
2023 vs. 2022
Increase (Decrease)
2023 vs. 2022
Increase (Decrease)
$
$
$
$
__________
(a) For the year ended December 31, 2023, reflects ongoing capital expenditures, higher distribution depreciation rates in Maryland effective March 2022, and higher transmission depreciation rates effective September
2022.
Interest expense, net increased $8 million for the year ended December 31, 2023 compared to the same period in 2022 primarily due to the issuance of debt in 2022 and 2023.
Other, net increased $5 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to higher AFUDC equity.
Effective income tax rates were 16.5% and 7.7% for the years ended December 31, 2023 and 2022, respectively. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information regarding the components of the change in effective income tax rates.
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Results of Operations—ACE
Operating revenues
Operating expenses
Purchased power
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
ACE
Favorable (Unfavorable)
Variance
91
(13)
(55)
(22)
1
(89)
2
(6)
9
3
5
(33)
(28)
2023
2022
$
1,522 $
1,431 $
637
386
283
8
1,314
208
(72)
20
(52)
156
36
624
331
261
9
1,225
206
(66)
11
(55)
151
3
$
120 $
148 $
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022. Net income decreased $28 million primarily due to higher contracting costs primarily due to the ACE employee strike,
and an increase in depreciation expense, and interest expense, partially offset by higher transmission rates.
The changes in Operating revenues consisted of the following:
Distribution
Transmission
Other
Regulatory required programs
Total increase
2023 vs. 2022
Increase
33
46
1
80
11
91
$
$
Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in New Jersey are not impacted by abnormal weather
or usage per customer as a result of the CIP which became effective, prospectively, in the third quarter of 2021. The CIP compares current distribution revenues by customer class to approved target
revenues established in ACE’s most recent distribution base rate case. The CIP is calculated annually, and recovery is subject to certain conditions, including an earnings test and ceilings on customer rate
increases. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers. See Note 3 — Regulatory Matters of the
Combined Notes to the Consolidated Financial Statements for additional information on the ACE CIP.
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Number of Electric Customers
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Total
ACE
502,247
62,246
3,051
734
568,278
At December 31,
2023
2022
504,919
62,646
2,909
727
571,201
Distribution Revenue increased for the year ended December 31, 2023 compared to the same period in 2022 due to higher distribution rates primarily due to the expiration of customer credits related to
the TCJA tax benefits.
Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.
Transmission revenue increased for the year ended December 31, 2023 compared to the same period in 2022 primarily due to increases in capital investment and underlying costs.
Other Revenue includes rental revenue, service connection fees, and mutual assistance revenues.
Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, Societal Benefits Charge,
Transition Bonds, and BGS procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are
included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase
electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as ACE remains the distribution service provider for all customers and charges a
regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ACE acts as the billing agent and
therefore, ACE does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ACE, ACE is permitted to
recover the electricity, ZEC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power expense related to the
electricity, ZECs, and RECs.
See Note 5 - Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ACE's revenue disaggregation.
The increase of $13 million for the year ended December 31, 2023 compared to same period in 2022, in Purchased power expense is fully offset in Operating revenues as part of regulatory required
programs.
The changes in Operating and maintenance expense consisted of the following:
Labor, other benefits, contracting and materials
BSC and PHISCO costs
Pension and non-pension postretirement benefits expense
Storm-related costs
(a)
Credit loss expense
Other
Regulatory required programs
Total increase
(b)
__________
(a) Reflects an increase in contracting costs for the year ended December 31, 2023, primarily due to the ACE employee strike.
74
2023 vs. 2022
Increase (Decrease)
41
9
1
1
1
3
56
(1)
55
$
$
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(b) ACE is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through the Societal Benefits Charge.
The changes in Depreciation and amortization expense consisted of the following:
Depreciation and amortization
(a)
Regulatory required programs
Total increase
(b)
2023 vs. 2022
Increase (Decrease)
$
$
ACE
23
(1)
22
__________
(a) Depreciation and amortization increased primarily due to ongoing capital expenditures and higher transmission depreciation rates effective September 2022.
(b) Regulatory required programs decreased primarily due to the regulatory asset amortization of the PPA termination obligation which is fully offset in Operating revenues.
Interest expense, net increased $6 million for the year ended December 31, 2023 compared to the same period in 2022 primarily due to an increase in interest rates and the issuance of debt in 2022 and
2023.
Effective income tax rates were 23.1% and 2.0% for the years ended December 31, 2023 and 2022, respectively. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information regarding the components of the effective income tax rates.
Liquidity and Capital Resources
All results included throughout the liquidity and capital resources section are presented on a GAAP basis.
The Registrants’ operating and capital expenditures requirements are provided by internally generated cash flows from operations, as well as funds from external sources in the capital markets and through
bank borrowings. The Registrants’ businesses are capital intensive and require considerable capital resources. Each of the Registrants annually evaluates its financing plan, dividend practices, and credit
line sizing, focusing on maintaining its investment grade ratings while meeting its cash needs to fund capital requirements, including construction expenditures, retire debt, pay dividends, and fund pension
and OPEB obligations. The Registrants spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment. Additionally, the Utility
Registrants operate in rate-regulated environments in which the amount of new investment recovery may be delayed or limited and where such recovery takes place over an extended period of time. Each
Registrant’s access to external financing on reasonable terms depends on its credit ratings and current overall capital market business conditions, including that of the utility industry in general. If these
conditions deteriorate to the extent that the Registrants no longer have access to the capital markets at reasonable terms, the Registrants have access to credit facilities with aggregate bank commitments
of $4.0 billion, as of December 31, 2023. The Registrants utilize their credit facilities to support their commercial paper programs, provide for other short-term borrowings, and to issue letters of credit. See
the “Credit Matters and Cash Requirements” section below for additional information. The Registrants expect cash flows to be sufficient to meet operating expenses, financing costs, and capital
expenditure requirements. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ debt and credit
agreements.
Cash flows related to Generation have not been presented as discontinued operations and are included in the Consolidated Statements of Cash Flows for all periods presented. The Exelon Consolidated
Statement of Cash Flows for the year ended December 31, 2023 includes no cash flows from Generation. The Exelon Consolidated Statement of Cash Flows for the year ended December 31, 2022
includes one months of cash flows from Generation. See below for additional reasons for the changes in cash flows.
Cash Flows from Operating Activities
The Utility Registrants' cash flows from operating activities primarily result from the transmission and distribution of electricity and, in the case of PECO, BGE, and DPL, gas distribution services. The Utility
Registrants' distribution services are provided to an established and diverse base of retail customers. The Utility Registrants' future cash flows may be affected by the economy, weather conditions, future
legislative initiatives, future
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regulatory proceedings with respect to their rates or operations, and their ability to achieve operating cost reductions. Additionally, ComEd is required to purchase CMCs from participating nuclear-powered
generating facilities for a five-year period, and all of its costs of doing so will be recovered through a new rider. The price to be paid for each CMC is established through a competitive bidding process.
ComEd will provide net payments to, or collect net payments from, customers for the difference between customer credits issued and the credit to be received from the participating nuclear-powered
generating facilities. ComEd’s cash flows are affected by the establishment of CMC prices and the timing of recovering costs through the CMC regulatory asset.
See Note 3 — Regulatory Matters and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information on regulatory and legal
proceedings and proposed legislation.
The following table provides a summary of the change in cash flows from operating activities for the years ended December 31, 2023 and 2022 by Registrant:
Increase (decrease) in cash flows from operating activities
Net income
Adjustments to reconcile net income to cash:
Non-cash operating activities
Option premiums (paid), net
Collateral (paid) received, net
Income taxes
Pension and non-pension postretirement benefit contributions
Regulatory assets and liabilities, net
Changes in working capital and other noncurrent assets and liabilities
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
157
$
173
$
(13)
$
105
$
(18)
$
1
$
8
$
(864)
39
(1,394)
52
487
887
469
(336)
—
18
106
143
973
(426)
(116)
—
—
106
17
14
170
(103)
—
(41)
54
49
(132)
259
28
—
(344)
66
54
75
193
34
—
(49)
79
(1)
24
140
228
(16)
—
(199)
26
(3)
59
80
(28)
5
—
(96)
(11)
4
(28)
(29)
(Decrease) increase in cash flows from operating activities
$
(167)
$
651
$
178
$
191
$
54
$
$
(45)
$
(183)
Changes in the Registrants' cash flows from operations were generally consistent with changes in each Registrant’s respective results of operations, as adjusted by changes in working capital in the
normal course of business, except as discussed below. See above for additional information related to cash flows from Generation. Significant operating cash flow impacts for the Registrants and
Generation for the years ended December 31, 2023 and 2022 were as follows:
•
•
•
•
See Note 22 —Supplemental Financial Information of the Combined Notes to Consolidated Financial Statements and the Registrants’ Consolidated Statements of Cash Flows for additional
information on non-cash operating activities.
Changes in collateral depended upon whether the Registrant was in a net mark-to-market liability or asset position, and collateral may have been required to be posted with or collected from
its counterparties. In addition, the collateral posting and collection requirements differed depending on whether the transactions were on an exchange or in the over-the-counter markets.
Changes in collateral for the Utility Registrants are dependent upon the credit exposure of procurement contracts that may require suppliers to post collateral. The amount of cash collateral
received from external counterparties increased due to rising energy prices. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for
additional information.
See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial Statements and the Registrants' Consolidated Statements of Cash Flows for additional information on income
taxes.
Changes in Pension and non-pension postretirement benefit contributions relate to Exelon's funding strategy and incremental contributions made in 2022 in connection with the
separation. See Note 14 — Retirement Benefits
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•
•
Changes in Regulatory assets and liabilities, net, are due to the timing of cash payments for costs recoverable, or cash receipts for costs recovered, under our regulatory mechanisms
differs from the recovery period of those costs. Included within the changes is energy efficiency spend for ComEd of $416 million and $394 million for the years ended December 31, 2023 and
2022, respectively. Also included within the changes is energy efficiency and demand response programs spend for BGE, Pepco, DPL, and ACE of $132 million, $70 million, $25 million, and
$20 million for the year ended December 31, 2023, respectively, and $113 million, $71 million, $28 million, and $11 million for the year ended December 31, 2022, respectively. PECO had no
energy efficiency and demand response programs spend recorded to a regulatory asset for the years ended December 31, 2023 and 2022. See Note 3 — Regulatory Matters of the
Combined Notes to Consolidated Financial Statements for additional information.
Changes in working capital and other noncurrent assets and liabilities for the Utility Registrants and Exelon Corporate total $146 million and for Generation total $323 million. The
change for Generation primarily relates to the revolving accounts receivable financing arrangement. The change in working capital and other noncurrent assets and liabilities for Exelon
Corporate and the Utility Registrants is dependent upon the normal course of operations for all Registrants. For ComEd, it is also dependent upon whether the participating nuclear-powered
generating facilities owe money to ComEd as a result of the established pricing for CMCs. For the year ended December 31, 2023, the established pricing resulted in ComEd owing payments
to nuclear-powered generating facilities, which is reported within the cash flows from operations as a change in Accounts payable and accrued expense.
Cash Flows from Investing Activities
The following table provides a summary of the change in cash flows from investing activities for the years ended December 31, 2023 and 2022 by Registrant:
(Decrease) increase in cash flows from investing activities
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Capital expenditures
Investment in NDT fund sales, net
Collection of DPP
Proceeds from sales of assets and businesses
Other investing activities
(Decrease) increase in cash flows from investing activities
$
$
(261)
28
(169)
9
8
(385)
$
$
(70)
—
—
—
(20)
(90)
$
$
(77)
—
—
—
(6)
(83)
$
$
(105)
—
—
—
(4)
(109)
$
$
(279)
—
—
10
2
(267)
$
$
(83)
—
—
10
5
(68)
$
$
(132)
—
—
—
(3)
(135)
$
$
(62)
—
—
—
(1)
(63)
Significant investing cash flow impacts for the Registrants for 2023 and 2022 were as follows:
•
•
Variances in Capital expenditures are primarily due to the timing of cash expenditures for capital projects. See the "Credit Matters and Cash Requirements" section below for additional
information on projected capital expenditure spending for the Utility Registrants. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for Capital
expenditures related to Generation prior to the separation.
Collection of DPP relates to Generation's revolving accounts receivable financing agreement which Generation entered into in April 2020.
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Cash Flows from Financing Activities
The following table provides a summary of the change in cash flows from financing activities for the years ended December 31, 2023 and 2022 by Registrant:
(Decrease) increase in cash flows from financing activities
Changes in short-term borrowings, net
Long-term debt, net
Changes in intercompany money pool
Issuance of common stock
Dividends paid on common stock
Repayments on short-term borrowings with maturities greater than 90 days
Distributions to member
Contributions from parent/member
Transfer of cash, restricted cash, and cash equivalents to Constellation
Other financing activities
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
$
(2,199)
(124)
—
(423)
(99)
1,350
—
—
2,594
(7)
(402)
225
—
—
(168)
(150)
—
(15)
—
(3)
(513)
$
$
(313)
100
—
—
(6)
—
—
74
—
9
(136)
$
$
(350)
150
—
—
(16)
—
—
99
—
4
(113)
$
$
34
(40)
(16)
—
—
—
237
(312)
—
(19)
(116)
$
$
(291)
35
—
—
211
—
—
(157)
—
(16)
(218)
$
$
(18)
25
—
—
10
—
—
(48)
—
(6)
(37)
$
$
343
(100)
—
—
19
—
—
(110)
—
—
152
Increase (decrease) in cash flows from financing activities
$
1,092
$
Significant financing cash flow impacts for the Registrants for 2023 and 2022 were as follows:
•
•
•
•
•
•
•
•
Changes in short-term borrowings, net, is driven by repayments on and issuances of notes due in less than 365 days. Refer to Note 16 — Debt and Credit Agreements of the Combined
Notes to Consolidated Financial Statements for additional information on Short-term borrowings for the Registrants.
Long-term debt, net, varies due to debt issuances and redemptions each year. Refer to the debt issuances and redemptions tables below for additional information for the Registrants.
Changes in intercompany money pool are driven by short-term borrowing needs. Refer below for more information regarding the intercompany money pool.
Issuance of common stock relates to the August 2022 underwritten public offering of Exelon common stock as well as 2023 issuances under the ATM program. See Note 19 — Shareholders'
Equity of the Combined Notes to Consolidated Financial Statements for additional information.
Exelon’s ability to pay dividends on its Common stock depends on the receipt of dividends paid by its operating subsidiaries. The payments of dividends to Exelon by its subsidiaries in turn
depend on their results of operations and cash flows and other items affecting Retained earnings. See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated
Financial Statements for additional information on dividend restrictions. See below for quarterly dividends declared.
Repayments on short-term borrowings, varies due to debt issuances and redemptions each year. Refer to Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated
Financial Statements for additional information on repayments on short-term borrowings for the Registrants.
Refer to Note 2 — Discontinued Operations for the Transfer of cash, restricted cash, and cash equivalents to Constellation related to the separation.
Other financing activities primarily consists of debt issuance costs. See debt issuances table below for additional information on the Registrants’ debt issuances.
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Debt Issuances and Redemptions
See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information of the Registrants’ long-term debt. Debt activity for 2023 and 2022 by
Registrant was as follows:
During 2023, the following long-term debt was issued:
Company
Type
Exelon
Exelon
Exelon
ComEd
ComEd
PECO
BGE
Pepco
Pepco
Pepco
Pepco
DPL
DPL
DPL
DPL
DPL
ACE
Notes
Notes
Notes
First Mortgage Bonds, Series 134
First Mortgage Bonds Series 135
First and Refunding Mortgage Bonds
Notes
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
Interest Rate
5.15%
5.30%
5.60%
4.90%
5.30%
4.90%
5.40%
5.35%
5.30%
5.40%
5.57%
5.30%
5.57%
5.45%
5.55%
5.72%
5.57%
Maturity
March 15, 2028
March 15, 2033
March 15, 2053
February 1, 2033
February 1, 2053
June 15, 2033
June 1, 2053
September 13, 2033
March 15, 2033
March 15, 2038
March 15, 2053
March 15, 2033
March 15, 2053
November 8, 2033
November 8, 2038
November 8, 2053
March 15, 2053
Amount
$1,000
850
650
400
575
575
700
100
85
40
125
60
65
340
75
110
75
Use of Proceeds
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay outstanding commercial paper obligations and to fund other
general corporate purposes.
Repay outstanding commercial paper obligations and to fund other
general corporate purposes.
Refinance existing indebtedness, refinance outstanding commercial
paper obligations, and for general corporate purposes.
Repay outstanding commercial paper obligations, repay existing
indebtedness, and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
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During 2022, the following long-term debt was issued:
Company
Type
SMBC Term Loan Agreement
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
ComEd
ComEd
PECO
PECO
BGE
Pepco
Pepco
DPL
ACE
ACE
Interest Rate
SOFR plus 0.65%
Maturity
July 21, 2023
(b)
Amount
$300
U.S. Bank Term Loan Agreement
SOFR plus 0.65%
July 21, 2023
(b)
PNC Term Loan Agreement
SOFR plus 0.65%
July 24, 2023
(b)
Notes
(a)
Notes
(a)
Notes
(a)
Long-Term Software License
Agreements
Long-Term Software License
Agreements
SMBC Term Loan Agreement
First Mortgage Bonds, Series 132
First Mortgage Bonds, Series 133
First and Refunding Mortgage Bonds
First and Refunding Mortgage Bonds
Notes
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
First Mortgage Bonds
2.75%
3.35%
4.10%
2.30%
3.70%
SOFR plus 0.85%
3.15%
3.85%
4.60%
4.375%
4.55%
3.97%
3.35%
3.06%
2.27%
3.06%
March 15, 2027
March 15, 2032
March 15, 2052
December 1, 2025
August 9, 2025
April 7, 2024
March 15, 2032
March 15, 2052
May 15, 2052
August 15, 2052
June 1, 2052
March 24, 2052
September 15, 2032
February 15, 2052
February 15, 2032
February 15, 2052
300
250
650
650
700
17
8
500
300
450
350
425
500
400
225
125
25
150
Use of Proceeds
Fund a cash payment to Constellation and for general corporate
purposes.
Fund a cash payment to Constellation and for general corporate
purposes.
Fund a cash payment to Constellation and for general corporate
purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Procurement of software licenses
Procurement of software licenses
Repay existing indebtedness and for general corporate purposes.
Repay outstanding commercial paper obligations and to fund other
general corporate purposes.
Repay outstanding commercial paper obligations and to fund other
general corporate purposes.
Refinance existing indebtedness and for general corporate purposes.
Refinance outstanding commercial paper and for general corporate
purposes.
Repay outstanding commercial paper obligations, repay existing
indebtedness, and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
Repay existing indebtedness and for general corporate purposes.
__________
(a)
In connection with the issuance and sale of the Notes, Exelon entered into a Registration Rights Agreement with the representatives of the initial purchasers of the Notes and other parties. Pursuant to the Registration
Rights Agreement, Exelon filed a registration statement on August 3, 2022, with respect to an offer to exchange the Notes for substantially similar notes of Exelon that are registered under the Securities Act. An
exchange offer of registered notes for the Notes was completed on January 12, 2023. The registered notes issued in exchange for Notes in the exchange offer have terms identical in all respects to the Notes, except
that their issuance was registered under the Securities Act.
(b) During the third quarter of 2022, the SMBC Term Loan, U.S. Bank Term Loan, and PNC Term Loan were all reclassified to Long-term debt due within one year on the Exelon Consolidated Balance Sheet, given that the
Term Loans have maturity dates of July 21, 2023, and July 24, 2023, respectively.
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During 2023, the following long-term debt was retired and/or redeemed:
Company
Type
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
Exelon
PECO
BGE
DPL
SMBC Term Loan Agreement
US Bank Term Loan Agreement
PNC Term Loan Agreement
Long-Term Software License Agreement
Long-Term Software License Agreement
Long-Term Software License Agreement
Long-Term Software License Agreement
Loan Agreement
Notes
First Mortgage Bonds
During 2022, the following long-term debt was retired and/or redeemed:
Company
Type
Exelon
Exelon
Exelon
ComEd
PECO
BGE
ACE
ACE
Junior Subordinated Notes
Long-Term Software License Agreement
Long-Term Software License Agreement
Long-Term Software License Agreement
First Mortgage Bonds
Notes
First Mortgage Bonds
Tax-Exempt Bonds
Interest Rate
SOFR plus 0.65%
SOFR plus 0.65%
SOFR plus 0.65%
3.70%
3.95%
3.70%
2.30%
2.00%
3.35%
3.50%
Interest Rate
3.50%
3.96%
2.30%
3.70%
2.375%
2.80%
3.05%
1.70%
Maturity
July 21, 2023
July 21, 2023
July 24, 2023
August 9, 2025
May 1, 2024
August 9, 2025
December 1, 2025
June 20, 2023
July 1, 2023
November 15, 2023
Maturity
May 2, 2022
May 1, 2024
December 1, 2025
August 9, 2025
September 15, 2022
August 15, 2022
April 1, 2022
September 1, 2022
Amount
$
300
300
250
6
2
1
4
50
300
500
Amount
$
1,150
2
4
1
350
250
200
110
Additionally, in connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle an intercompany loan that mirrored the terms and amounts of
the third-party debt obligations. The loan agreements were entered into as part of the 2012 Constellation merger. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated
Financial Statements for additional information on the mirror debt.
From time to time and as market conditions warrant, the Registrants may engage in long-term debt retirements via tender offers, open market repurchases or other viable options to reduce debt on their
respective balance sheets.
Dividends
Quarterly dividends declared by the Exelon Board of Directors during the year ended December 31, 2023 and for the first quarter of 2024 were as follows:
Period
Declaration Date
Shareholder of
Record Date
Dividend Payable Date
Cash per Share
(a)
First Quarter 2023
Second Quarter 2023
Third Quarter 2023
Fourth Quarter 2023
First Quarter 2024
February 14, 2023
April 25, 2023
July 25, 2023
November 1, 2023
February 21, 2024
February 27, 2023
May 15, 2023
August 15, 2023
November 15, 2023
March 4, 2024
March 10, 2023 $
June 9, 2023 $
September 8, 2023 $
December 8, 2023 $
March 15, 2024 $
0.3600
0.3600
0.3600
0.3600
0.3800
___________
(a) Exelon's Board of Directors approved an updated dividend policy for 2024. The 2024 quarterly dividend will be $0.38 per share.
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Credit Matters and Cash Requirements
The Registrants fund liquidity needs for capital expenditures, working capital, energy hedging, and other financial commitments through cash flows from continuing operations, public debt offerings,
commercial paper markets, and large, diversified credit facilities. The credit facilities include $4.0 billion in aggregate total commitments of which $2.4 billion was available to support additional commercial
paper as of December 31, 2023, and of which no financial institution has more than 6% of the aggregate commitments for the Registrants. The Registrants had access to the commercial paper markets
and had availability under their revolving credit facilities during 2023 to fund their short-term liquidity needs, when necessary. Exelon Corporate and the Utility Registrants each have a 5-year revolving
credit facility. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. The Registrants had access to the commercial paper
markets and had availability under their revolving credit facilities during 2023 to fund their short-term liquidity needs, when necessary. The Registrants routinely review the sufficiency of their liquidity
position, including appropriate sizing of credit facility commitments, by performing various stress test scenarios, such as commodity price movements, increases in margin-related transactions, changes in
hedging levels, and the impacts of hypothetical credit downgrades. The Registrants closely monitor events in the financial markets and the financial institutions associated with the credit facilities, including
monitoring credit ratings and outlooks, credit default swap levels, capital raising, and merger activity. See PART I, ITEM 1A. RISK FACTORS for additional information regarding the effects of uncertainty in
the capital and credit markets.
The Registrants believe their cash flow from operating activities, access to credit markets, and their credit facilities provide sufficient liquidity to support the estimated future cash requirements discussed
below.
On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its Common stock, no par value. The net
proceeds were $563 million before expenses paid. Exelon used the proceeds, together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See
Note 19 — Shareholders' Equity and Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.
On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”) with certain sales agents and forward sellers and certain forward purchasers establishing an ATM
equity distribution program under which it may offer and sell shares of its Common stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of
Common stock under the Equity Distribution Agreement and may at any time suspend or terminate offers and sales under the Equity Distribution Agreement. In November and December 2023, Exelon
issued approximately 3.6 million shares of Common stock at an average gross price of $39.58 per share. The net proceeds from these issuances were $140 million, which were used for general corporate
purposes. As of December 31, 2023, $858 million of Common stock remained available for sale pursuant to the ATM program.
Pursuant to the Separation Agreement between Exelon and Constellation Energy Corporation, Exelon made a cash payment of $1.75 billion to Generation on January 31, 2022. See Note 2 —
Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information on the separation.
The following table presents the incremental collateral that each Utility Registrant would have been required to provide in the event each Utility Registrant lost its investment grade credit rating at
December 31, 2023 and available credit facility capacity prior to any incremental collateral at December 31, 2023:
ComEd
PECO
BGE
Pepco
DPL
ACE
__________
(a) Represents incremental collateral related to natural gas procurement contracts.
PJM Credit Policy Collateral
$
—
—
—
—
—
—
82
Other Incremental Collateral Required
$
(a)
Available Credit Facility Capacity Prior to Any
Incremental Collateral
—
25
61
—
10
—
$
788
435
258
168
237
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Capital Expenditures
As of December 31, 2023, estimates of capital expenditures for plant additions and improvements are as follows:
(c)
(in millions)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
(a)
2024 Transmission
2024 Distribution
2024 Gas
Total 2024
Beyond 2024
(b)
N/A
550
75
475
550
200
200
150
N/A
1,600
1,225
625
1,325
750
325
275
N/A $
N/A
400
500
100
N/A
100
N/A
7,425 $
2,150
1,700
1,600
1,975
950
600
425
27,100
9,150
5,650
6,075
6,275
2,925
1,825
1,500
___________
(a) Numbers rounded to the nearest $25M and may not sum due to rounding.
(b)
(c) Effective in 2024, ComEd has chosen to update its rate of capitalization of certain overhead costs on a prospective basis.
Includes estimated capital expenditures for the Utility Registrants from 2025 to 2027.
Projected capital expenditures and other investments are subject to periodic review and revision to reflect changes in economic conditions and other factors. Projected capital expenditures at the Utility
Registrants are for continuing projects to maintain and improve operations, including enhancing reliability and adding capacity to the transmission and distribution systems. The Utility Registrants anticipate
that they will fund their capital expenditures with a combination of internally generated funds and borrowings and additional capital contributions from parent.
Retirement Benefits
Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit
restrictions and at-risk status as defined by the Pension Protection Act of 2006 (the Act), management of the pension obligation, and regulatory implications. The Act requires the attainment of certain
funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and
participant notification). The projected contributions below reflect a funding strategy to make annual contributions with the objective of achieving 100% funded status on an ABO basis over time. This
funding strategy helps minimize volatility of future period required pension contributions. Exelon’s estimated annual qualified pension contributions will be $93 million in 2024. Unlike the qualified pension
plans, Exelon’s non-qualified pension plans are not funded, given they are not subject to statutory minimum contribution requirements.
While OPEB plans are also not subject to statutory minimum contribution requirements, Exelon does fund certain of its plans. For Exelon's funded OPEB plans, contributions generally equal accounting
costs, however, Exelon’s management has historically considered several factors in determining the level of contributions to its OPEB plans, including liabilities management, levels of benefit claims paid,
and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery). The amounts below include benefit payments related to unfunded plans.
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The following table provides all Registrants' planned contributions to the qualified pension plans, planned benefit payments to non-qualified pension plans, and planned contributions to OPEB plans in 2024:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
Qualified Pension Plans
Non-Qualified Pension Plans
OPEB
$
93
3
2
17
66
—
—
7
$
15
1
1
1
8
1
—
—
47
18
1
14
11
10
—
—
To the extent interest rates decline significantly or the pension and OPEB plans earn less than the expected asset returns, annual pension contribution requirements in future years could increase.
Conversely, to the extent interest rates increase significantly or the pension and OPEB plans earn greater than the expected asset returns, annual pension and OPEB contribution requirements in future
years could decrease. Additionally, expected contributions could change if Exelon changes its pension or OPEB funding strategy.
See Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information on pension and OPEB contributions.
Cash Requirements for Other Financial Commitments
The following tables summarize the Registrants' future estimated cash payments as of December 31, 2023 under existing financial commitments:
Exelon
Long-term debt and finance leases
Interest payments on long-term debt
Operating leases
(a)
(b)
Fuel purchase agreements
Electric supply procurement
Long-term renewable energy and REC commitments
(c)
Other purchase obligations
DC PLUG obligation
(d)
ZEC commitments
Pension contributions
(e)
Total cash requirements
2024
Beyond 2024
Total
Time Period
$
1,403 $
1,659
49
281
3,808
366
4,839
3
218
93
39,876 $
26,936
302
1,557
2,222
1,672
3,236
—
421
1,000
$
12,719 $
77,222 $
41,279
28,595
351
1,838
6,030
2,038
8,075
3
639
1,093
89,941
2024 - 2053
2024 - 2053
2024 - 2099
2024 - 2039
2024 - 2027
2024 - 2038
2024 - 2031
2024
2024 - 2027
2024 - 2029
__________
(a)
(b)
Includes amounts from ComEd and PECO financing trusts.
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Variable rate
interest obligations are estimated based on rates as of December 31, 2023. Includes estimated interest payments due to ComEd and PECO financing trusts.
(c) Represents commitments to purchase natural gas and related transportation, storage capacity, and services.
(d) Represents the future estimated value at December 31, 2023 of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between the Registrants or subsidiary and third-parties for
the provision of services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
(e) These amounts represent Exelon’s expected contributions to its qualified pension plans. Qualified pension contributions for years after 2029 are not included.
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ComEd
(a)
Long-term debt
Interest payments on long-term debt
Operating leases
Electric supply procurement
Long-term renewable energy and REC commitments
(b)
Other purchase obligations
ZEC commitments
Total cash requirements
(c)
2024
Beyond 2024
Total
Time Period
$
$
250 $
470
—
417
336
1,244
218
2,935 $
11,567 $
8,240
—
196
1,523
835
421
22,782 $
11,817
8,710
—
613
1,859
2,079
639
25,717
2024 - 2053
2024 - 2053
2024 - 2026
2024 - 2026
2024 - 2038
2024 - 2031
2024 - 2027
__________
(a)
(b)
Includes amounts from ComEd financing trust.
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Includes
estimated interest payments due to the ComEd financing trust.
(c) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between ComEd and third-parties for the provision of
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
PECO
(a)
Long-term debt
Interest payments on long-term debt
Operating leases
(b)
Fuel purchase agreements
Electric supply procurement
(c)
Other purchase obligations
Total cash requirements
(d)
2024
Beyond 2024
Total
Time Period
$
$
— $
222
—
140
729
785
5,384 $
4,097
—
571
183
759
5,384
4,319
—
711
912
1,544
1,876 $
10,994 $
12,870
2024 - 2052
2024 - 2052
2024 - 2034
2024 - 2039
2024 - 2025
2024 - 2031
__________
(a)
(b)
Includes amounts from PECO financing trusts.
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Includes
estimated interest payments due to the PECO financing trusts.
(c) Represents commitments to purchase natural gas and related transportation, storage capacity, and services.
(d) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between PECO and third-parties for the provision of
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
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BGE
Long-term debt
Interest payments on long-term debt
Operating leases
Fuel purchase agreements
Electric supply procurement
(b)
(a)
Other purchase obligations
Total cash requirements
(c)
2024
Beyond 2024
Total
Time Period
$
$
— $
184
4
108
1,097
928
4,650 $
3,775
34
792
746
433
4,650
3,959
38
900
1,843
1,361
2,321 $
10,430 $
12,751
2024 - 2053
2024 - 2053
2024 - 2099
2024 - 2038
2024 - 2026
2024 - 2029
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances.
__________
(a)
(b) Represents commitments to purchase natural gas and related transportation, storage capacity, and services.
(c) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between BGE and third-parties for the provision of
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
PHI
Long-term debt and finance leases
Interest payments on long-term debt
Operating leases
(a)
Fuel purchase agreements
Electric supply procurement
Long-term renewable energy and REC commitments
(b)
Other purchase obligations
DC PLUG obligation
Total cash requirements
(c)
2024
Beyond 2024
Total
Time Period
$
$
644 $
296
36
33
1,565
30
1,379
3
3,986 $
7,631 $
4,500
164
194
1,097
149
394
—
8,275
4,796
200
227
2,662
179
1,773
3
14,129 $
18,115
2024 - 2053
2024 - 2053
2024 - 2032
2024 - 2029
2024 - 2027
2024 - 2033
2024 - 2031
2024
__________
(a)
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Variable rate
interest obligations are estimated based on rates as of December 31, 2023.
(b) Represents commitments to purchase natural gas and related transportation, storage capacity, and services.
(c) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between Pepco, DPL, ACE, and PHISCO and third-
parties for the provision of services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to
period.
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Pepco
Long-term debt and finance leases
Interest payments on long-term debt
Operating leases
Electric supply procurement
(a)
Other purchase obligations
DC PLUG obligation
Total cash requirements
(b)
2024
Beyond 2024
Total
Time Period
$
$
405 $
152
7
776
661
3
2,004 $
3,746 $
2,809
34
574
231
—
7,394 $
4,151
2,961
41
1,350
892
3
9,398
2024 - 2053
2024 - 2053
2024 - 2032
2024 - 2027
2024 - 2031
2024
__________
(a)
(b) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between Pepco and third-parties for the provision of
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances.
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
DPL
Long-term debt and finance leases
Interest payments on long-term debt
Operating leases
(a)
Fuel purchase agreements
Electric supply procurement
Long-term renewable energy and REC commitments
(b)
Other purchase obligations
Total cash requirements
(c)
2024
Beyond 2024
Total
Time Period
$
$
84
70
9
33
445
30
291
$
2,012 $
1,048
46
194
245
149
81
2,096
1,118
55
227
690
179
372
962 $
3,775 $
4,737
2024 - 2053
2024 - 2053
2024 - 2031
2024 - 2029
2024 - 2026
2024 - 2033
2024 - 2031
__________
(a)
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Variable rate
interest obligations are estimated based on rates as of December 31, 2023.
(b) Represents commitments to purchase natural gas and related transportation, storage capacity, and services.
(c) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between DPL and third-parties for the provision of
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
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ACE
Long-term debt and finance leases
Interest payments on long-term debt
Operating leases
Electric supply procurement
(a)
Other purchase obligations
Total cash requirements
(b)
2024
Beyond 2024
Total
Time Period
$
$
154 $
60
3
344
386
947 $
1,688 $
537
7
278
53
2,563 $
1,842
597
10
622
439
3,510
2024 - 2053
2024 - 2053
2024 - 2029
2024 - 2026
2024 - 2028
__________
(a)
(b) Represents the future estimated value, as of December 31, 2023, of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into between ACE and third-parties for the provision of
Interest payments are estimated based on final maturity dates of debt securities outstanding as of December 31, 2023 and do not reflect anticipated future refinancing, early redemptions, or debt issuances.
services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
See Note 18 — Commitments and Contingencies and Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information of the Registrants’ other
commitments potentially triggered by future events. Additionally, see below for where to find additional information regarding the financial commitments in the tables above in the Combined Notes to the
Consolidated Financial Statements:
Item
Long-term debt
Interest payments on long-term debt
Finance leases
Operating leases
Long-term renewable energy and REC commitments
ZEC commitments
DC PLUG obligation
Pension contributions
Credit Facilities
Location within Notes to the Consolidated Financial Statements
Note 16 — Debt and Credit Agreements
Note 16 — Debt and Credit Agreements
Note 10 — Leases
Note 10 — Leases
Note 3 — Regulatory Matters
Note 3 — Regulatory Matters
Note 3 — Regulatory Matters
Note 14 — Retirement Benefits
Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets its short-term liquidity requirements primarily through the
issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial
paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and the Exelon intercompany
money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.
See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ credit facilities and short term borrowing activity.
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Capital Structure
As of December 31, 2023, the capital structures of the Registrants consisted of the following:
Long-term debt
(b)
Long-term debt to affiliates
Common equity
Member’s equity
Commercial paper and notes payable
Exelon
(a)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
59 %
1 %
37 %
— %
3 %
43 %
1 %
54 %
— %
2 %
44 %
2 %
53 %
— %
1 %
44 %
— %
53 %
— %
3 %
42 %
— %
— %
56 %
2 %
49 %
— %
49 %
— %
2 %
49 %
— %
49 %
— %
2 %
48 %
— %
47 %
— %
5 %
__________
(a) As of December 31, 2022, Exelon's Long-term debt and Common equity capital structure percentages were 57% and 38%, respectively. The change in capital structure percentages above is a result of a decrease in
(b)
common equity due to the separation of Constellation in addition to an increase in long-term debt issuances. See Note 2 — Discontinued Operations for additional information regarding the separation.
Includes approximately $390 million, $205 million, and $184 million owed to unconsolidated affiliates of Exelon, ComEd, and PECO respectively. These special purpose entities were created for the sole purposes of
issuing mandatory redeemable trust preferred securities of ComEd and PECO.
Security Ratings
The Registrants’ access to the capital markets, including the commercial paper market, and their respective financing costs in those markets, may depend on the securities ratings of the entity that is
accessing the capital markets.
The Registrants’ borrowings are not subject to default or prepayment as a result of a downgrading of securities, although such a downgrading of a Registrant’s securities could increase fees and interest
charges under that Registrant’s credit agreements.
As part of the normal course of business, the Registrants enter into contracts that contain express provisions or otherwise permit the Registrants and their counterparties to demand adequate assurance of
future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contracts law, if the Registrants are downgraded by a credit rating agency, it is
possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance, which could include the posting of additional
collateral. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on collateral provisions.
The credit ratings for Exelon Corporate, PECO, BGE, PHI, Pepco, DPL, and ACE did not change for the year ended December 31, 2023. On July 26, 2023, S&P raised ComEd's long-term issuer credit
rating from 'BBB+' to a 'A-'. S&P also affirmed the current 'A' rating on ComEd's senior secured debt and 'A-2' short-term rating, which influences long and short-term borrowing cost. On December 20,
2023, Moody's revised its outlook on ComEd to negative from stable due to the final order issued by the ICC on December 14, 2023 rejecting ComEd's proposed Grid Plan and establishing retail rates for
2024-2027 as further discussed in Note 3 — Regulatory Matters. At the same time, Moody's affirmed ComEd's current 'A1' senior secured debt rating and its 'P-2' short-term rating.
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Intercompany Money Pool
To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing, both Exelon and PHI operate an intercompany
money pool. Maximum amounts contributed to and borrowed from the money pool by participant and the net contribution or borrowing as of December 31, 2023, are presented in the following tables.
Exelon Intercompany Money Pool
Exelon Corporate
PECO
BSC
PHI Corporate
PCI
PHI Intercompany Money Pool
Pepco
DPL
ACE
Shelf Registration Statements
$
$
For the Year Ended December 31, 2023
Maximum Contributed
Maximum Borrowed
As of December 31, 2023
Contributed (Borrowed)
$
510
305
—
—
45
$
—
(238)
(350)
(65)
—
For the Year Ended December 31, 2023
Maximum Contributed
Maximum Borrowed
As of December 31, 2023
Contributed (Borrowed)
$
106
147
—
$
(55)
(2)
(147)
225
—
(205)
(65)
45
—
—
—
Exelon, ComEd and Pepco have a currently effective combined shelf registration statement that expires in 2025. PECO and BGE plan to file a new combined shelf registration in the first quarter of 2024.
DPL and ACE periodically issue securities through the private placement markets. The ability of each Registrant to sell securities off the shelf registration statement or to access the private placement
markets will depend on a number of factors at the time of the proposed sale, including other required regulatory approvals, as applicable, the current financial condition of the Registrant, its securities
ratings and market conditions.
Regulatory Authorizations
The Utility Registrants are required to obtain short-term and long-term financing authority from Federal and State Commissions as follows:
(a)
ComEd
PECO
BGE
(b)
Pepco
(c)
DPL
(d)
ACE
(e)
Short-term Financing Authority
(f)
Remaining Long-term Financing Authority
At December 31, 2023
Commission
FERC
FERC
FERC
FERC
FERC
NJBPU
Expiration Date
December 31, 2025
December 31, 2025
December 31, 2025
December 31, 2025
December 31, 2025
December 31, 2025
$
Amount
2,500
1,500
700
500
500
350
Commission
ICC
PAPUC
MDPSC
MDPSC / DCPSC
MDPSC / DEPSC
NJBPU
Expiration Date
January 1, 2025
December 31, 2024
N/A
December 31, 2025
December 31, 2025
December 31, 2024
$
Amount
368
550
1,100
1,050
550
625
__________
(a) On June 29, 2023, ComEd filed an application for $2 billion in new money long-term debt financing authority from the ICC, which was approved on December 14, 2023. The finance authority under the approved
application has an effective date of January 1, 2024, and extends the expiration date to January 1, 2027.
(b) On December 21, 2022, BGE received approval from the MDPSC for $1.8 billion in new long-term financing authority with an effective date of January 4, 2023.
(c) On June 9, 2022 and June 30, 2022, Pepco received approval from the MDPSC and DCPSC, respectively, for $1.4 billion in new long-term financing authority. The long-term financing authority became effective on the
date of respective approvals and has an expiration date of December 31, 2025.
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(d) On November 2, 2022, DPL filed with the MDPSC and DEPSC for approval of $1.2 billion in new long-term financing authority with an effective date of December 14, 2022. The financing authority filed with MDPSC
does not have an expiration date, while the financing authority filed with DEPSC has an expiration date of December 31, 2025.
(e) On July 14, 2023, ACE filed an application with the NJBPU for renewal of its short-term financing authority through December 31, 2025. ACE received approval on December 20, 2023.
(f) On October 2, 2023, ComEd, PECO, BGE, Pepco, and DPL filed applications with FERC for renewal of their short-term financing authority through December 31, 2025. ComEd, PECO, Pepco, and DPL received
approval on December 7, 2023. BGE received approval on December 8, 2023.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Registrants hold commodity and financial instruments that are exposed to the following market risks:
•
•
•
•
•
Commodity price risk, which is discussed further below.
Counterparty credit risk associated with non-performance by counterparties on executed derivative instruments and participation in all, or some of the established, wholesale spot energy markets
that are administered by PJM. The credit policies of PJM may, under certain circumstances, require that losses arising from the default of one member on spot energy market transactions be
shared by the remaining participants. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of counterparty credit
risk related to derivative instruments.
Equity price and interest rate risk associated with Exelon’s pension and OPEB plan trusts. See Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for
additional information.
Interest rate risk associated with changes in interest rates for the Registrants’ outstanding long-term debt. This risk is significantly reduced as substantially all of the Registrants’ outstanding debt
has fixed interest rates. There is inherent interest rate risk related to refinancing maturing debt by issuing new long-term debt. The Registrants use a combination of fixed-rate and variable-rate
debt to manage interest rate exposure. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. In addition, Exelon
Corporate may utilize interest rate derivatives to lock in rate levels in anticipation of future financings, which are typically designated as cash flow hedges, or to lock in rate levels on borrowings,
which are typically designated as economic hedges. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
Electric operating revenues risk associated with ComEd's distribution formula rate. ComEd's ROE for its electric distribution service through 2023 was directly correlated to yields on U.S. Treasury
bonds. Exelon Corporate utilized interest rate derivatives to mitigate volatility and manage risk to Exelon, which were typically accounted for as economic hedges. See Note 15 — Derivative
Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information. Beginning January 1, 2024 ComEd's ROE for its electric distribution service will use a
fixed rate and no longer be exposed to volatility in yields on U.S. Treasury bonds. See Note 3 — Regulatory Matters for additional information.
The Utility Registrants operate primarily under cost-based rate regulation limiting exposure to the effects of market risk. Hedging programs are utilized to reduce exposure to energy and natural gas price
volatility and have no direct earnings impacts as the costs are fully recovered through regulatory-approved recovery mechanisms.
Exelon manages these risks through risk management policies and objectives for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of risk exposures.
Risk management issues are reported to Exelon’s Board of Directors, Exelon's Audit and Risk Committee, and/or the applicable Utility Board Registrant. The Registrants do not execute derivatives for
speculative or proprietary trading purposes.
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Commodity Price Risk (All Registrants)
Commodity price risk is associated with price movements resulting from changes in supply and demand, fuel costs, market liquidity, weather conditions, governmental regulatory and environmental
policies, and other factors. To the extent the total amount of energy Exelon purchases differs from the amount of energy it has contracted to sell, Exelon is exposed to market fluctuations in commodity
prices. Exelon seeks to mitigate its commodity price risk through the sale and purchase of electricity and natural gas.
ComEd entered into 20-year floating-to-fixed renewable energy swap contracts beginning in June 2012, which are considered an economic hedge and have changes in fair value recorded to an offsetting
regulatory asset or liability. ComEd has block energy contracts to procure electric supply that are executed through a competitive procurement process, which are considered derivatives and qualify for
NPNS, and as a result are accounted for on an accrual basis of accounting. PECO, BGE, Pepco, DPL, and ACE have contracts to procure electric supply that are executed through a competitive
procurement process. BGE, Pepco, DPL, and ACE have certain full requirements contracts, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of
accounting. Other full requirements contracts are not derivatives.
PECO, BGE, and DPL also have executed derivative natural gas contracts, which qualify for NPNS, to hedge their long-term price risk in the natural gas market.
For additional information on these contracts, see Note 3 — Regulatory Matters and Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements.
The following table presents maturity and source of fair value for Exelon's and ComEd's mark-to-market commodity contract liabilities. The table provides two fundamental pieces of information. First, the
table provides the source of fair value used in determining the carrying amount of Exelon's and ComEd's total mark-to-market liabilities. Second, the table shows the maturity, by year, of Exelon's and
ComEd's commodity contract liabilities giving an indication of when these mark-to-market amounts will settle and require cash. See Note 17 — Fair Value of Financial Assets and Liabilities of the
Combined Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.
(a)
Commodity derivative contracts :
Prices based on model or other valuation methods (Level 3)
2024
2025
2026
2027
2028
2029 and Beyond
Total Fair
Value
$
(27) $
(19) $
(16) $
(16) $
(17) $
(38)
$
(133)
Maturities Within
_________
(a) Represents ComEd's net liabilities associated with the floating-to-fixed energy swap contracts with unaffiliated suppliers.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Management’s Report on Internal Control Over Financial Reporting
The management of Exelon Corporation (Exelon) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Exelon’s management conducted an assessment of the effectiveness of Exelon’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the
criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, Exelon’s management concluded
that, as of December 31, 2023, Exelon’s internal control over financial reporting was effective.
The effectiveness of Exelon’s internal control over financial reporting as of December 31, 2023, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as
stated in their report which appears herein.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Commonwealth Edison Company (ComEd) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
ComEd’s management conducted an assessment of the effectiveness of ComEd’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the
criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, ComEd’s management concluded
that, as of December 31, 2023, ComEd’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of PECO Energy Company (PECO) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-
15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
PECO’s management conducted an assessment of the effectiveness of PECO’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria
in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, PECO’s management concluded that, as
of December 31, 2023, PECO’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Baltimore Gas and Electric Company (BGE) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
BGE’s management conducted an assessment of the effectiveness of BGE’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, BGE’s management concluded that, as of
December 31, 2023, BGE’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Pepco Holdings LLC (PHI) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
PHI’s management conducted an assessment of the effectiveness of PHI’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, PHI’s management concluded that, as of
December 31, 2023, PHI’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Potomac Electric Power Company (Pepco) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Pepco’s management conducted an assessment of the effectiveness of Pepco’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria
in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, Pepco’s management concluded that, as
of December 31, 2023, Pepco’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Delmarva Power & Light Company (DPL) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
DPL’s management conducted an assessment of the effectiveness of DPL’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, DPL’s management concluded that, as of
December 31, 2023, DPL’s internal control over financial reporting was effective.
February 21, 2024
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Management’s Report on Internal Control Over Financial Reporting
The management of Atlantic City Electric Company (ACE) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
ACE’s management conducted an assessment of the effectiveness of ACE’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, ACE’s management concluded that, as of
December 31, 2023, ACE’s internal control over financial reporting was effective.
February 21, 2024
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To the Board of Directors and Shareholders of Exelon Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
We have audited the consolidated financial statements, including the related notes, of Exelon Corporation and its subsidiaries (the “Company”) as listed in the index appearing under Item 15(a)(1)(i), and
the financial statement schedules listed in the index appearing under Item 15(a)(1)(ii), (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of
internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 8. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the consolidated financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record
in the consolidated financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party
regulator; (ii) rates are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected
from customers. The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws
and the FERC under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess
whether it is probable that its currently recorded regulatory assets and liabilities will be recovered and settled, respectively, in future rates. As of December 31, 2023, there were $10.9 billion of regulatory
assets and $10.0 billion of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included
testing the effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others,
obtaining the Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications,
and recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 21, 2024
We have served as the Company’s auditor since 2000.
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To the Board of Directors and Shareholders of Commonwealth Edison Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the consolidated financial statements, including the related notes, of Commonwealth Edison Company and its subsidiaries (the “Company”) as listed in the index appearing under Item
15(a)(2)(i), and the financial statement schedule listed in the index appearing under Item 15(a)(2)(ii) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the consolidated financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record
in the consolidated financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party
regulator; (ii) rates are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected
from customers. The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws
and the FERC under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess
whether it is probable that its currently recorded regulatory assets and liabilities will be
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recovered and settled, respectively, in future rates. As of December 31, 2023, there were $4.1 billion of regulatory assets and $7.7 billion of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included
testing the effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others,
obtaining the Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications,
and recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 21, 2024
We have served as the Company's auditor since 2000.
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To the Board of Directors and Shareholders of PECO Energy Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the consolidated financial statements, including the related notes, of PECO Energy Company and its subsidiaries (the “Company”) as listed in the index appearing under Item 15(a)(3)(i),
and the financial statement schedule listed in the index appearing under Item 15(a)(3)(ii) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the consolidated financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record
in the consolidated financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party
regulator; (ii) rates are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected
from customers. The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws
and the FERC under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess
whether it is probable that its currently recorded regulatory assets and liabilities will be
105
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recovered and settled, respectively, in future rates. As of December 31, 2023, there were $920 million of regulatory assets and $406 million of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included
testing the effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others,
obtaining the Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications,
and recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
We have served as the Company's auditor since 1932.
106
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To the Board of Directors and Shareholder of Baltimore Gas and Electric Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the financial statements, including the related notes, of Baltimore Gas and Electric Company (the “Company”) as listed in the index appearing under Item 15(a)(4)(i), and the financial
statement schedule listed in the index appearing under Item 15(a)(4)(ii) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in
conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and
that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical
audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record in the
financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party regulator; (ii) rates
are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected from customers.
The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws and the FERC
under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess whether it is
probable that its currently recorded regulatory assets and liabilities will be recovered and settled,
107
Table of Contents
respectively, in future rates. As of December 31, 2023, there were $956 million of regulatory assets and $800 million of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the
effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others, obtaining the
Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications, and
recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Baltimore, Maryland
February 21, 2024
We have served as the Company’s auditor since at least 1993. We have not been able to determine the specific year we began serving as auditor of the Company.
108
Table of Contents
To the Board of Directors and Member of Pepco Holdings LLC
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the consolidated financial statements, including the related notes, of Pepco Holdings LLC and its subsidiaries (the “Company”) as listed in the index appearing under Item 15(a)(5)(i), and
the financial statement schedule listed in the index appearing under Item 15(a)(5)(ii) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the consolidated financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record
in the consolidated financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party
regulator; (ii) rates are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected
from customers. The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws
and the FERC under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess
whether it is probable that its currently recorded regulatory assets and liabilities will be
109
Table of Contents
recovered and settled, respectively, in future rates. As of December 31, 2023, there were $1.9 billion of regulatory assets and $1.0 billion of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included
testing the effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others,
obtaining the Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications,
and recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
We have served as the Company's auditor since 2001.
110
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To the Board of Directors and Shareholder of Potomac Electric Power Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the financial statements, including the related notes, of Potomac Electric Power Company (the “Company”) as listed in the index appearing under Item 15(a)(6)(i), and the financial
statement schedule listed in the index appearing under Item 15(a)(6)(ii) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in
conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and
that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical
audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record in the
financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party regulator; (ii) rates
are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected from customers.
The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws and the FERC
under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess whether it is
probable that its currently recorded regulatory assets and liabilities will be recovered and settled,
111
Table of Contents
respectively, in future rates. As of December 31, 2023, there were $600 million of regulatory assets and $397 million of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the
effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others, obtaining the
Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications, and
recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
We have served as the Company's auditor since at least 1993. We have not been able to determine the specific year we began serving as auditor of the Company.
112
Table of Contents
To the Board of Directors and Shareholder of Delmarva Power & Light Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the financial statements, including the related notes, of Delmarva Power & Light Company (the “Company”) as listed in the index appearing under Item 15(a)(7)(i), and the financial
statement schedule listed in the index appearing under Item 15(a)(7)(ii) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in
conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and
that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical
audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record in the
financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party regulator; (ii) rates
are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected from customers.
The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws and the FERC
under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess whether it is
probable that its currently recorded regulatory assets and liabilities will be recovered and settled,
113
Table of Contents
respectively, in future rates. As of December 31, 2023, there were $272 million of regulatory assets and $415 million of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the
effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others, obtaining the
Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications, and
recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
We have served as the Company's auditor since at least 1993. We have not been able to determine the specific year we began serving as auditor of the Company.
114
Table of Contents
To the Board of Directors and Shareholder of Atlantic City Electric Company
Opinion on the Financial Statements
Report of Independent Registered Public Accounting Firm
We have audited the consolidated financial statements, including the related notes, of Atlantic City Electric Company and its subsidiary (the “Company”) as listed in the index appearing under Item 15(a)(8)
(i), and the financial statement schedule listed in the index appearing under Item 15(a)(8)(ii) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Rate Regulation
As described in Notes 1 and 3 to the consolidated financial statements, the Company applies the authoritative guidance for accounting for certain types of regulation, which requires management to record
in the consolidated financial statements the effects of cost-based rate regulation for entities with regulated operations that meet the following criteria, (i) rates are established or approved by a third-party
regulator; (ii) rates are designed to recover the entity’s cost of providing services or products; and (iii) there is a reasonable expectation that rates designed to recover costs can be charged to and collected
from customers. The Company accounts for its regulated operations in accordance with regulatory and legislative guidance from the regulatory authorities having jurisdiction under state public utility laws
and the FERC under various Federal laws. Upon updates in material regulatory and legislative proceedings, where applicable, management will record new regulatory assets or liabilities and will assess
whether it is probable that its currently recorded regulatory assets and liabilities will be
115
Table of Contents
recovered and settled, respectively, in future rates. As of December 31, 2023, there were $608 million of regulatory assets and $146 million of regulatory liabilities.
The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of rate regulation is a critical audit matter are the high degree of audit
effort to assess the impact of regulation on accounting for regulatory assets and liabilities and to evaluate the complex audit evidence related to whether the regulatory assets and liabilities will be
recovered and settled.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included
testing the effectiveness of controls relating to accounting for regulatory matters and evaluation of new and existing regulatory assets and liabilities. These procedures also included, among others,
obtaining the Company’s correspondence with regulators, evaluating the reasonableness of management’s interpretation of regulatory guidance and proceedings and the related accounting implications,
and recalculating regulatory assets and liabilities based on provisions outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
We have served as the Company's auditor since 1998.
116
Exelon Corporation and Subsidiary Companies
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
Table of Contents
(In millions, except per share data)
Operating revenues
Electric operating revenues
Natural gas operating revenues
Revenues from alternative revenue programs
Total operating revenues
Operating expenses
Purchased power
Purchased fuel
Purchased power and fuel from affiliates
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Gain (loss) on sale of assets and businesses
Operating income
Other income and (deductions)
Interest expense, net
Interest expense to affiliates
Other, net
Total other income and (deductions)
Income from continuing operations before income taxes
Income taxes
Net income from continuing operations after income taxes
Net income from discontinued operations after income taxes (Note 2)
Net income
Net income attributable to noncontrolling interests
Net income attributable to common shareholders
Amounts attributable to common shareholders:
Net income from continuing operations
Net income from discontinued operations
Net income attributable to common shareholders
Comprehensive income, net of income taxes
Net income
Other comprehensive (loss) income, net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefits reclassified to periodic benefit cost
Actuarial losses reclassified to periodic benefit cost
Pension and non-pension postretirement benefit plans valuation adjustments
Unrealized (loss) gain on cash flow hedges
Other comprehensive (loss) income
Comprehensive income
Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to common shareholders
Average shares of common stock outstanding:
Basic
Assumed exercise and/or distributions of stock-based awards
Diluted
Earnings per average common share from continuing operations
Basic
Diluted
Earnings per average common share from discontinued operations
Basic
Diluted
See the Combined Notes to Consolidated Financial Statements
117
$
$
$
$
$
$
$
$
$
19,267
1,764
696
21,727
7,648
593
—
4,559
3,506
1,408
17,714
10
4,023
(1,704)
(25)
408
(1,321)
2,702
374
2,328
—
2,328
—
2,328
$
$
16,899
2,018
161
19,078
5,380
834
159
4,673
3,325
1,390
15,761
(2)
3,315
(1,422)
(25)
535
(912)
2,403
349
2,054
117
2,171
1
2,170
$
$
2,328
—
2,328
$
2,054
116
2,170
$
16,245
1,522
171
17,938
4,703
504
1,178
4,547
3,033
1,291
15,256
—
2,682
(1,264)
(25)
261
(1,028)
1,654
38
1,616
213
1,829
123
1,706
1,616
90
1,706
2,328
$
2,171
$
1,829
—
26
(109)
(5)
(88)
2,240
—
(1)
42
46
2
89
2,260
1
2,240
$
2,259
$
996
1
997
2.34
2.34
—
—
$
$
$
$
986
1
987
2.08
2.08
0.12
0.12
$
$
$
$
(4)
223
432
(1)
650
2,479
123
2,356
979
1
980
1.65
1.65
0.09
0.09
Table of Contents
Exelon Corporation and Subsidiary Companies
Consolidated Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization
Asset impairments
Gain on sales of assets and businesses
Deferred income taxes and amortization of investment tax credits
Net fair value changes related to derivatives
Net realized and unrealized losses (gains) on NDT funds
Net unrealized losses on equity investments
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Inventories
Accounts payable and accrued expenses
Option premiums paid, net
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from NDT fund sales
Investment in NDT funds
Collection of DPP
Proceeds from sales of assets and businesses
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Proceeds from short-term borrowings with maturities greater than 90 days
Repayments on short-term borrowings with maturities greater than 90 days
Issuance of long-term debt
Retirement of long-term debt
Issuance of common stock
Dividends paid on common stock
Acquisition of CENG noncontrolling interest
Proceeds from employee stock plans
Transfer of cash, restricted cash, and cash equivalents to Constellation
Other financing activities
Net cash flows provided by financing activities
Increase (decrease) in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
Increase in DPP
(Decrease) increase in PP&E related to ARO update
For the Years Ended December 31,
2023
2022
2021
$
2,328
$
2,171
$
3,506
—
(10)
319
22
—
—
(335)
(37)
(45)
(191)
—
(146)
48
(439)
(129)
(188)
4,703
(7,408)
—
—
—
25
8
(7,375)
(313)
400
(150)
5,825
(1,713)
140
(1,433)
—
41
—
(114)
2,683
11
1,090
1,101
(215)
—
(13)
$
$
3,533
48
(8)
255
(53)
205
16
370
(1,222)
(121)
1,318
(39)
1,248
(4)
(1,326)
(616)
(905)
4,870
(7,147)
488
(516)
169
16
—
(6,990)
986
1,300
(1,500)
6,309
(2,073)
563
(1,334)
—
36
(2,594)
(102)
1,591
(529)
1,619
1,090
36
348
332
$
$
$
$
1,829
7,573
552
(201)
18
(568)
(586)
160
(200)
(703)
(141)
440
(338)
(74)
327
(634)
(665)
(3,777)
3,012
(7,981)
6,532
(6,673)
3,902
877
26
(3,317)
269
1,380
(350)
3,481
(1,640)
—
(1,497)
(885)
80
—
(80)
758
453
1,166
1,619
16
3,652
642
See the Combined Notes to Consolidated Financial Statements
118
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Inventories, net
Fossil fuel
Materials and supplies
Regulatory assets
Other
Total current assets
Exelon Corporation and Subsidiary Companies
Consolidated Balance Sheets
ASSETS
December 31,
2023
2022
$
2,659
(317)
1,101
(82)
$
445 $
482
2,544
(327)
1,426
(82)
2,342
1,019
94
707
2,215
473
7,777
73,593
8,698
6,630
3,232
251
1,365
20,176
101,546
$
407
566
2,217
1,344
208
547
1,641
406
7,336
69,076
8,037
6,630
2,897
232
1,141
18,937
95,349
Property, plant, and equipment (net of accumulated depreciation and amortization of $17,251 and $15,930 as of December 31, 2023
and 2022, respectively)
Deferred debits and other assets
Regulatory assets
Goodwill
Receivable related to Regulatory Agreement Units
Investments
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
119
Exelon Corporation and Subsidiary Companies
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS’ EQUITY
December 31,
2023
2022
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Regulatory liabilities
Mark-to-market derivative liabilities
Unamortized energy contract liabilities
Other
Total current liabilities
Long-term debt
Long-term debt to financing trusts
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Pension obligations
Non-pension postretirement benefit obligations
Asset retirement obligations
Mark-to-market derivative liabilities
Unamortized energy contract liabilities
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 999 shares and 994 shares outstanding as of December 31, 2023 and 2022,
respectively)
Treasury stock, at cost (2 shares as of December 31, 2023 and 2022)
Retained earnings
Accumulated other comprehensive loss, net
Total shareholders’ equity
Total liabilities and shareholders' equity
See the Combined Notes to Consolidated Financial Statements
120
$
$
2,523 $
1,403
2,846
1,375
5
389
74
8
968
9,591
39,692
390
11,956
9,576
1,571
527
267
106
27
2,088
26,118
75,791
21,114
(123)
5,490
(726)
25,755
101,546
$
2,586
1,802
3,382
1,226
5
437
8
10
1,155
10,611
35,272
390
11,250
9,112
1,109
507
269
83
35
1,967
24,332
70,605
20,908
(123)
4,597
(638)
24,744
95,349
Table of Contents
(In millions, shares in thousands)
Balance at December 31, 2020
Net income
Long-term incentive plan activity
Employee stock purchase plan issuances
Changes in equity of noncontrolling interests
Acquisition of CENG noncontrolling interest
Deferred tax adjustment related to acquisition of CENG noncontrolling
interest
Common stock dividends
($1.53/common share)
Acquisition of other noncontrolling interest
Other comprehensive income, net of income taxes
Balance at December 31, 2021
Net income
Long-term incentive plan
activity
Employee stock purchase
plan issuances
Changes in equity of noncontrolling interests
Distribution of Constellation (Note 2)
Issuance of common stock
Common stock dividends
($1.35/common share)
Other comprehensive income, net of income taxes
Balance at December 31, 2022
Net income
Long-term incentive plan activity
Employee stock purchase plan issuances
Issuance of common stock
Common stock dividends
($1.44/common share)
Other comprehensive loss, net of income taxes
Balance at December 31, 2023
Exelon Corporation and Subsidiary Companies
Consolidated Statements of Changes in Equity
Issued
Shares
Common
Stock
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss, net
Noncontrolling
Interests
Total Equity
977,466
—
1,734
2,091
—
—
—
—
—
—
981,291
—
561
983
—
—
12,995
—
—
995,830
—
659
1,173
3,587
—
—
1,001,249
$
$
$
$
19,373
—
69
90
—
1,080
(290)
—
2
—
20,324
—
1
41
—
(21)
563
—
—
20,908
—
19
47
140
—
—
21,114
$
$
$
$
(123)
—
—
—
—
—
—
—
—
—
(123)
—
—
—
—
—
—
—
—
(123)
—
—
—
—
—
—
(123)
$
$
$
$
16,735
1,706
—
—
—
—
—
(1,499)
—
—
16,942
2,170
—
—
—
(13,179)
—
(1,336)
—
4,597
2,328
—
—
—
(1,435)
—
5,490
$
$
$
$
See the Combined Notes to Consolidated Financial Statements
121
(3,400)
—
—
—
—
—
—
—
—
650
(2,750)
—
—
—
—
2,023
—
—
89
(638)
—
—
—
—
—
(88)
(726)
$
$
$
$
2,283
123
—
—
(37)
(1,965)
—
—
(2)
—
402
1
—
—
(7)
(396)
—
—
—
—
—
—
—
—
—
—
—
$
$
$
$
34,868
1,829
69
90
(37)
(885)
(290)
(1,499)
—
650
34,795
2,171
1
41
(7)
(11,573)
563
(1,336)
89
24,744
2,328
19
47
140
(1,435)
(88)
25,755
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased power from affiliates
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Loss on sale of assets
Operating income
Other income and (deductions)
Interest expense, net
Interest expense to affiliates
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Commonwealth Edison Company and Subsidiary Companies
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
7,272 $
556
16
7,844
5,478 $
267
16
5,761
2,816
—
1,096
354
1,403
369
6,038
—
1,806
(464)
(13)
75
(402)
1,404
314
1,090 $
1,090 $
1,050
59
1,094
318
1,323
374
4,218
(2)
1,541
(401)
(13)
54
(360)
1,181
264
917 $
917 $
6,323
42
41
6,406
1,888
383
1,048
307
1,205
320
5,151
—
1,255
(376)
(13)
48
(341)
914
172
742
742
$
$
$
See the Combined Notes to Consolidated Financial Statements
122
Table of Contents
Commonwealth Edison Company and Subsidiary Companies
Consolidated Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
For the Years Ended December 31,
2023
2022
2021
$
1,090 $
917 $
Depreciation and amortization
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Proceeds from short-term borrowings with maturities greater than 90 days
Repayments on short-term borrowings with maturities greater than 90 days
Issuance of long-term debt
Retirement of long-term debt
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
Increase (decrease) in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
Decrease in capital expenditures not paid
$
$
See the Combined Notes to Consolidated Financial Statements
123
1,403
196
(536)
(138)
(2)
(82)
(87)
69
106
(60)
(41)
(70)
1,848
(2,576)
8
(2,568)
(225)
400
(150)
975
—
(746)
655
(14)
895
175
511
686 $
1,323
241
(165)
(163)
(34)
(28)
406
51
—
(1,033)
(184)
(134)
1,197
(2,506)
28
(2,478)
427
150
—
750
—
(578)
670
(11)
1,408
127
384
511 $
742
1,205
244
126
(25)
32
(2)
—
—
—
(388)
(196)
(143)
1,595
(2,387)
26
(2,361)
(323)
—
—
1,150
(350)
(507)
791
(16)
745
(21)
405
384
(10) $
(20) $
(46)
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivables from affiliates
Inventories, net
Regulatory assets
Other
Total current assets
Commonwealth Edison Company and Subsidiary Companies
Consolidated Balance Sheets
ASSETS
December 31,
2023
2022
$
860
(69)
242
(17)
$
110 $
402
558
(59)
441
(17)
791
225
3
279
1,335
123
3,268
29,088
2,794
2,625
2,954
6
1,217
875
10,471
42,827 $
67
327
499
424
3
196
775
92
2,383
27,513
2,667
2,625
2,660
6
1,206
601
9,765
39,661
Property, plant, and equipment (net of accumulated depreciation and amortization of $7,222 and $6,673 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Goodwill
Receivable related to Regulatory Agreement Units
Investments
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
124
Commonwealth Edison Company and Subsidiary Companies
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS’ EQUITY
December 31,
2023
2022
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
Mark-to-market derivative liabilities
Other
Total current liabilities
Long-term debt
Long-term debt to financing trusts
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Non-pension postretirement benefit obligations
Mark-to-market derivative liabilities
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholders’ equity
Common stock ($12.50 par value, 250 shares authorized, 127 shares outstanding as of December 31, 2023 and 2022)
Other paid-in capital
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity
See the Combined Notes to Consolidated Financial Statements
125
$
$
602 $
250
867
576
72
118
191
27
219
2,922
11,236
205
5,327
7,493
149
161
106
865
14,101
28,464
1,588
10,401
2,374
14,363
42,827 $
577
—
1,010
415
74
108
226
5
191
2,606
10,518
205
5,021
6,913
148
165
79
642
12,968
26,297
1,588
9,746
2,030
13,364
39,661
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
Commonwealth Edison Company and Subsidiary Companies
Consolidated Statements of Changes in Shareholders’ Equity
Common
Stock
Other
Paid-In
Capital
Retained
Earnings
Total
Shareholders’
Equity
$
$
$
$
1,588 $
—
—
—
1,588 $
—
—
—
1,588 $
—
—
—
1,588 $
8,285 $
—
—
791
9,076 $
—
—
670
9,746 $
—
—
655
10,401 $
1,456 $
742
(507)
—
1,691 $
917
(578)
—
2,030 $
1,090
(746)
—
2,374 $
11,329
742
(507)
791
12,355
917
(578)
670
13,364
1,090
(746)
655
14,363
See the Combined Notes to Consolidated Financial Statements
126
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Natural gas operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased fuel
Purchased power from affiliates
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Interest expense to affiliates, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
PECO Energy Company and Subsidiary Companies
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
$
$
$
3,202 $
690
(7)
9
3,894
1,270
274
—
786
217
397
202
3,146
748
(192)
(9)
36
(165)
583
20
563 $
563 $
3,156 $
738
2
7
3,903
1,160
342
33
791
201
373
202
3,102
801
(165)
(12)
31
(146)
655
79
576 $
576 $
2,613
538
26
21
3,198
699
188
194
757
177
348
184
2,547
651
(149)
(12)
26
(135)
516
12
504
504
See the Combined Notes to Consolidated Financial Statements
127
Table of Contents
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by
operating activities:
Depreciation and amortization
Deferred income taxes and amortization of investment tax
credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Change in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Changes in Exelon intercompany money pool
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
PECO Energy Company and Subsidiary Companies
Consolidated Statements of Cash Flows
For the Years Ended December 31,
2023
2022
2021
$
563 $
576 $
397
(43)
13
67
(1)
34
(78)
86
(31)
(1)
13
1,019
(1,426)
2
(1,424)
(74)
575
(50)
—
(405)
348
(6)
388
(17)
68
51
$
373
70
40
(205)
(31)
(56)
152
(20)
(45)
(18)
5
841
(1,349)
8
(1,341)
239
775
(350)
—
(399)
274
(15)
524
24
44
68
$
504
348
11
—
(35)
21
(26)
15
5
(21)
(18)
(31)
773
(1,240)
9
(1,231)
—
750
(300)
(40)
(339)
414
(9)
476
18
26
44
$
$
(56) $
9 $
26
See the Combined Notes to Consolidated Financial Statements
128
PECO Energy Company and Subsidiary Companies
Consolidated Balance Sheets
ASSETS
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivables from affiliates
Inventories, net
Fossil fuel
Materials and supplies
Regulatory assets
Other
Total current assets
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,097 and $4,078 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Receivable related to Regulatory Agreement Units
Investments
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
129
$
527
(95)
117
(8)
December 31,
2023
2022
$
42
9
635
(105)
153
(9)
432
109
2
50
67
127
65
903
13,128
793
278
35
429
29
1,564
$
15,595 $
59
9
530
144
4
99
52
80
38
1,015
12,125
652
237
30
413
30
1,362
14,502
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
Other
Total current liabilities
Long-term debt
Long-term debt to financing trusts
Deferred credits and other liabilities
PECO Energy Company and Subsidiary Companies
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDER'S EQUITY
$
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Non-pension postretirement benefit obligations
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholder's equity
Common stock (No par value, 500 shares authorized, 170 shares outstanding as of December 31, 2023 and 2022)
Retained earnings
Total shareholder's equity
Total liabilities and shareholder's equity
See the Combined Notes to Consolidated Financial Statements
130
December 31,
2023
2022
165 $
—
512
236
39
79
92
59
1,182
5,134
184
2,321
314
26
286
79
3,026
9,526
4,050
2,019
6,069
239
50
668
142
42
63
75
32
1,311
4,562
184
2,213
270
28
286
85
2,882
8,939
3,702
1,861
5,563
14,502
$
15,595 $
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
PECO Energy Company and Subsidiary Companies
Consolidated Statements of Changes in Shareholder's Equity
Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
$
$
$
$
3,014 $
—
—
414
3,428 $
—
—
274
3,702 $
—
—
348
4,050 $
1,519 $
504
(339)
—
1,684 $
576
(399)
—
1,861 $
563
(405)
—
2,019 $
4,533
504
(339)
414
5,112
576
(399)
274
5,563
563
(405)
348
6,069
See the Combined Notes to Consolidated Financial Statements
131
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Natural gas operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased fuel
Purchased power and fuel from affiliates
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Baltimore Gas and Electric Company
Statements of Operations and Comprehensive Income
See the Combined Notes to Consolidated Financial Statements
132
For the Years Ended December 31,
2023
2022
2021
$
$
$
3,065 $
869
84
9
4,027
1,311
220
—
520
221
654
319
3,245
782
(182)
18
(164)
618
133
485 $
485 $
2,890 $
1,037
(47)
15
3,895
1,186
363
18
670
207
630
302
3,376
519
(152)
21
(131)
388
8
380 $
380 $
2,497
801
12
31
3,341
699
243
233
618
193
591
283
2,860
481
(138)
30
(108)
373
(35)
408
408
Table of Contents
Baltimore Gas and Electric Company
Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization
Asset impairments
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
See the Combined Notes to Consolidated Financial Statements
133
For the Years Ended December 31,
2023
2022
2021
$
485 $
380 $
654
—
66
(1)
89
(5)
47
(75)
(22)
37
(292)
(19)
(13)
951
(1,367)
7
(1,360)
(72)
700
(300)
(316)
385
(7)
390
(19)
67
48
$
630
48
9
135
(197)
(2)
(61)
77
19
(17)
(160)
(68)
(33)
760
(1,262)
11
(1,251)
278
500
(250)
(300)
286
(11)
503
12
55
67
$
408
591
—
(17)
75
30
(13)
(29)
14
3
20
(152)
(81)
(120)
729
(1,226)
18
(1,208)
130
600
(300)
(292)
257
(6)
389
(90)
145
55
$
$
(44) $
35
$
(59)
Baltimore Gas and Electric Company
Balance Sheets
ASSETS
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Inventories, net
Fossil fuel
Materials and supplies
Prepaid utility taxes
Regulatory assets
Other
Total current assets
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,744 and $4,583 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Investments
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
134
$
527
(46)
106
(7)
December 31,
2023
2022
$
47
1
617
(54)
132
(10)
481
99
35
74
56
229
25
1,047
12,102
727
9
248
51
1,035
$
14,184 $
43
24
563
122
91
65
52
177
13
1,150
11,338
527
7
291
37
862
13,350
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Baltimore Gas and Electric Company
Balance Sheets
December 31,
2023
2022
LIABILITIES AND SHAREHOLDER'S EQUITY
$
336 $
—
344
203
35
114
27
34
1,093
4,602
1,945
773
32
158
91
2,999
8,694
3,246
2,244
5,490
408
300
462
159
39
105
47
55
1,575
3,907
1,832
816
30
166
88
2,932
8,414
2,861
2,075
4,936
13,350
$
14,184 $
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Non-pension postretirement benefit obligations
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholder's equity
Common stock (No par value, 0 shares authorized, 0 shares outstanding as of December 31, 2023 and 2022)
Retained earnings
(a)
(a)
Total shareholder's equity
Total liabilities and shareholder's equity
_____________
(a)
In millions, shares round to zero. Number of shares is 1,500 authorized and 1,000 outstanding as of December 31, 2023 and 2022.
See the Combined Notes to Consolidated Financial Statements
135
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
Baltimore Gas and Electric Company
Statements of Changes in Shareholder's Equity
Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
$
$
$
$
2,318 $
—
—
257
2,575 $
—
—
286
2,861 $
—
—
385
3,246 $
1,879 $
408
(292)
—
1,995 $
380
(300)
—
2,075 $
485
(316)
—
2,244 $
4,197
408
(292)
257
4,570
380
(300)
286
4,936
485
(316)
385
5,490
See the Combined Notes to Consolidated Financial Statements
136
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Natural gas operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased fuel
Purchased power from affiliates
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Gain on sales of assets
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Pepco Holdings LLC and Subsidiary Companies
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
$
$
$
5,748 $
205
64
9
6,026
2,250
98
—
1,110
179
990
487
5,114
9
921
(323)
108
(215)
706
116
590 $
590 $
5,376 $
238
(59)
10
5,565
1,984
129
51
966
191
938
475
4,734
—
831
(292)
78
(214)
617
9
608 $
608 $
4,769
168
91
13
5,041
1,417
73
367
925
179
821
458
4,240
—
801
(267)
69
(198)
603
42
561
561
See the Combined Notes to Consolidated Financial Statements
137
Table of Contents
Pepco Holdings LLC and Subsidiary Companies
Consolidated Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation and amortization
Gain on sales of assets
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from sales of long-lived assets
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Change in Exelon intercompany money pool
Distributions to member
Contributions from member
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
See the Combined Notes to Consolidated Financial Statements
138
For the Years Ended December 31,
2023
2022
2021
$
590 $
608 $
990
(9)
29
110
(79)
(8)
(42)
40
(196)
65
(61)
(24)
(101)
1,304
(1,988)
10
8
(1,970)
(20)
1,075
(500)
21
(513)
475
(41)
497
(169)
373
204 $
938
—
(9)
163
(184)
(46)
(34)
30
148
(1)
(136)
(78)
(149)
1,250
(1,709)
—
6
(1,703)
(54)
925
(310)
37
(750)
787
(22)
613
160
213
373 $
561
821
—
24
(12)
(48)
6
(16)
34
49
17
(99)
(48)
(132)
1,157
(1,720)
—
2
(1,718)
100
825
(260)
(14)
(703)
683
(17)
614
53
160
213
$
$
(109) $
136 $
(6)
Pepco Holdings LLC and Subsidiary Companies
Consolidated Balance Sheets
ASSETS
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivable from affiliates
Inventories, net
Fossil fuel
Materials and supplies
Regulatory assets
Other
Total current assets
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,175 and $2,618 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Goodwill
Investments
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
139
$
745
(107)
310
(50)
December 31,
2023
2022
180 $
24
734
(109)
300
(46)
638
260
3
9
287
337
100
1,838
18,851
1,587
4,005
143
268
211
6,214
$
26,903 $
198
175
625
254
2
18
236
455
96
2,059
17,686
1,610
4,005
138
353
231
6,337
26,082
Pepco Holdings LLC and Subsidiary Companies
Consolidated Balance Sheets
LIABILITIES AND EQUITY
December 31,
2023
2022
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Borrowings from Exelon intercompany money pool
Customer deposits
Regulatory liabilities
Unamortized energy contract liabilities
PPA Termination Obligation
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Non-pension postretirement benefit obligations
Unamortized energy contract liabilities
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Member's equity
Membership interest
Undistributed losses
Total member's equity
Total liabilities and member's equity
See the Combined Notes to Consolidated Financial Statements
140
$
$
394 $
644
683
338
59
65
100
71
8
49
138
2,549
8,004
3,031
904
55
40
27
511
4,568
15,121
12,057
(275)
11,782
26,903 $
414
591
771
260
66
44
88
76
10
87
330
2,737
7,529
2,895
1,011
59
50
35
536
4,586
14,852
11,582
(352)
11,230
26,082
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Distribution to member
Contributions from member
Balance at December 31, 2021
Net Income
Distribution to member
Contributions from member
Balance at December 31, 2022
Net income
Distribution to member
Contributions from member
Balance at December 31, 2023
Pepco Holdings LLC and Subsidiary Companies
Consolidated Statements of Changes in Equity
Membership Interest
Undistributed (Losses)/Gains
Total
Member's Equity
$
$
$
$
10,112
—
—
683
10,795
—
—
787
11,582
—
—
475
12,057
$
$
$
$
(68)
561
(703)
—
(210)
608
(750)
—
(352)
590
(513)
—
(275)
$
$
$
$
10,044
561
(703)
683
10,585
608
(750)
787
11,230
590
(513)
475
11,782
See the Combined Notes to Consolidated Financial Statements
141
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased power from affiliate
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Gain on sales of assets
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Potomac Electric Power Company
Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
2,793 $
22
9
2,824
2,557 $
(31)
5
2,531
974
—
336
236
441
390
2,377
9
456
(165)
66
(99)
357
51
795
39
284
223
417
382
2,140
—
391
(150)
55
(95)
296
(9)
306 $
306 $
305 $
305 $
2,216
53
5
2,274
353
271
258
213
403
373
1,871
—
403
(140)
48
(92)
311
15
296
296
$
$
$
See the Combined Notes to Consolidated Financial Statements
142
Table of Contents
Potomac Electric Power Company
Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization
Gain on sales of assets
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from sale of long-lived assets
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
See the Combined Notes to Consolidated Financial Statements
143
For the Years Ended December 31,
2023
2022
2021
$
306 $
305 $
441
(9)
(15)
53
(29)
(3)
(24)
6
(25)
60
(45)
(12)
(5)
699
(957)
10
8
(939)
(167)
350
—
(252)
308
(26)
213
(27)
99
72
$
417
—
(17)
36
(104)
(33)
(16)
24
24
(19)
(69)
(11)
(66)
471
(874)
—
3
(871)
124
625
(310)
(463)
465
(10)
431
31
68
99
$
296
403
—
(8)
(52)
(28)
6
(8)
16
2
11
(81)
(11)
(84)
462
(843)
—
(1)
(844)
140
275
—
(268)
244
(6)
385
3
65
68
$
$
(55) $
65
$
30
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivables from affiliates
Inventories, net
Regulatory assets
Other
Total current assets
Potomac Electric Power Company
Balance Sheets
ASSETS
December 31,
2023
2022
$
369
(52)
166
(28)
$
$
48
24
351
(47)
180
(25)
317
138
2
159
150
51
889
9,430
450
124
246
55
875
11,194 $
45
54
304
155
—
135
235
53
981
8,794
437
119
273
53
882
10,657
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,284 and $4,067 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Investments
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
144
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
Merger related obligation
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Potomac Electric Power Company
Balance Sheets
December 31,
2023
2022
LIABILITIES AND SHAREHOLDER'S EQUITY
$
132 $
405
321
191
32
47
15
25
61
1,229
3,691
1,431
382
37
280
2,130
7,050
3,075
1,069
4,144
299
4
382
125
34
39
6
26
93
1,008
3,747
1,382
455
39
244
2,120
6,875
2,767
1,015
3,782
10,657
$
11,194 $
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholder's equity
Common stock ($0.01 par value, 200 shares authorized, 0 shares outstanding as of December 31, 2023 and 2022)
Retained earnings
(a)
Total shareholder's equity
Total liabilities and shareholder's equity
_____________
(a)
In millions, shares round to zero. Number of shares is 100 outstanding as of December 31, 2023 and 2022.
See the Combined Notes to Consolidated Financial Statements
145
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
Potomac Electric Power Company
Statements of Changes in Shareholder's Equity
Common Stock
Retained Earnings
Total Shareholder's Equity
$
$
$
$
2,058 $
—
—
244
2,302 $
—
—
465
2,767 $
—
—
308
3,075 $
1,145 $
296
(268)
—
1,173 $
305
(463)
—
1,015 $
306
(252)
—
1,069 $
3,203
296
(268)
244
3,475
305
(463)
465
3,782
306
(252)
308
4,144
See the Combined Notes to Consolidated Financial Statements
146
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Natural gas operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased fuel
Purchased power from affiliates
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Delmarva Power & Light Company
Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
$
$
$
1,460 $
205
15
8
1,688
639
98
—
193
171
244
75
1,420
268
(74)
18
(56)
212
35
177 $
177 $
1,360 $
238
(9)
6
1,595
567
129
10
183
166
232
72
1,359
236
(66)
13
(53)
183
14
169 $
169 $
1,191
168
14
7
1,380
387
73
79
183
162
210
67
1,161
219
(61)
12
(49)
170
42
128
128
See the Combined Notes to Consolidated Financial Statements
147
Table of Contents
Delmarva Power & Light Company
Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
See the Combined Notes to Consolidated Financial Statements
148
For the Years Ended December 31,
2023
2022
2021
$
177 $
169 $
244
4
13
6
2
(5)
(7)
(121)
26
25
(4)
13
373
(562)
—
(562)
(52)
650
(500)
(133)
99
(11)
53
(136)
152
16
$
232
16
29
(59)
(10)
(11)
19
78
—
(34)
(1)
(10)
418
(430)
3
(427)
(34)
125
—
(143)
147
(5)
90
81
71
152 $
128
210
39
3
15
(3)
(8)
16
43
13
(43)
(1)
(27)
385
(429)
4
(425)
3
125
—
(147)
120
(5)
96
56
15
71
$
$
(6)
$
23
$
(18)
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivables from affiliates
Inventories, net
Fossil fuel
Materials and supplies
Prepaid utility taxes
Regulatory assets
Other
Total current assets
Delmarva Power & Light Company
Balance Sheets
ASSETS
December 31,
2023
2022
$
183
(19)
52
(8)
$
$
16
—
204
(21)
52
(7)
164
44
1
9
72
24
54
14
398
5,165
218
135
50
403
5,966 $
31
121
183
45
—
18
58
23
80
14
573
4,820
202
153
54
409
5,802
Property, plant, and equipment, (net of accumulated depreciation and amortization of $1,925 and $1,772 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
149
Delmarva Power & Light Company
Balance Sheets
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31,
2023
2022
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Asset retirement obligations
Non-pension postretirement benefit obligations
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholder's equity
(a)
Common stock ($2.25 par value, 0 shares authorized, 0 shares outstanding as of December 31, 2023 and 2022, respectively)
Retained earnings
(a)
Total shareholder's equity
Total liabilities and shareholder's equity
_____________
(a)
In millions, shares round to zero. Number of shares is 1,000 authorized and outstanding as of December 31, 2023 and 2022.
See the Combined Notes to Consolidated Financial Statements
150
$
$
$
63
84
159
64
25
31
50
21
497
1,996
904
365
12
6
93
1,380
3,873
1,455
638
2,093
5,966 $
115
584
172
41
22
29
44
136
1,143
1,354
869
380
13
9
84
1,355
3,852
1,356
594
1,950
5,802
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
Delmarva Power & Light Company
Statements of Changes in Shareholder's Equity
Common Stock
Retained Earnings
Total Shareholder's Equity
$
$
$
$
1,089 $
—
—
120
1,209 $
—
—
147
1,356 $
—
—
99
1,455 $
587
128
(147)
—
568
169
(143)
—
594
177
(133)
—
638
$
$
$
$
1,676
128
(147)
120
1,777
169
(143)
147
1,950
177
(133)
99
2,093
See the Combined Notes to Consolidated Financial Statements
151
Table of Contents
(In millions)
Operating revenues
Electric operating revenues
Revenues from alternative revenue programs
Operating revenues from affiliates
Total operating revenues
Operating expenses
Purchased power
Purchased power from affiliate
Operating and maintenance
Operating and maintenance from affiliates
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Net income
Comprehensive income
Atlantic City Electric Company and Subsidiary Company
Consolidated Statements of Operations and Comprehensive Income
For the Years Ended December 31,
2023
2022
2021
$
$
$
1,493 $
27
2
1,522
637
—
233
153
283
8
1,314
208
(72)
20
(52)
156
36
120 $
120 $
1,448 $
(19)
2
1,431
622
2
189
142
261
9
1,225
206
(66)
11
(55)
151
3
148 $
148 $
1,362
24
2
1,388
677
17
179
141
179
8
1,201
187
(58)
4
(54)
133
(13)
146
146
See the Combined Notes to Consolidated Financial Statements
152
Table of Contents
Atlantic City Electric Company and Subsidiary Company
Consolidated Statements of Cash Flows
(In millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization
Deferred income taxes and amortization of investment tax credits
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Receivables from and payables to affiliates, net
Inventories
Accounts payable and accrued expenses
Collateral (paid) received, net
Income taxes
Regulatory assets and liabilities, net
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Issuance of long-term debt
Retirement of long-term debt
Dividends paid on common stock
Contributions from parent
Other financing activities
Net cash flows provided by financing activities
(Decrease) increase in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
Supplemental cash flow information
(Decrease) increase in capital expenditures not paid
See the Combined Notes to Consolidated Financial Statements
153
For the Years Ended December 31,
2023
2022
2021
$
120 $
148 $
283
27
—
(57)
(4)
(12)
27
(50)
—
(47)
(3)
(83)
201
(460)
—
(460)
199
75
—
(126)
65
(5)
208
(51)
72
21
$
261
(2)
46
(19)
(4)
(7)
(9)
46
11
(19)
(7)
(61)
384
(398)
1
(397)
(144)
175
—
(145)
175
(5)
56
43
29
72
$
146
179
(15)
—
(37)
4
1
3
4
—
24
(3)
(11)
295
(445)
1
(444)
(43)
425
(260)
(288)
319
(5)
148
(1)
30
29
$
$
(47) $
48
$
(18)
Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Accounts receivable
Customer accounts receivable
Customer allowance for credit losses
Customer accounts receivable, net
Other accounts receivable
Other allowance for credit losses
Other accounts receivable, net
Receivables from affiliates
Inventories, net
Regulatory assets
Other
Total current assets
Atlantic City Electric Company and Subsidiary Company
Consolidated Balance Sheets
ASSETS
December 31,
2023
2022
$
194
(36)
92
(14)
$
21
$
179
(41)
70
(14)
158
78
3
55
125
5
445
4,192
483
3
34
520
5,157 $
72
138
56
1
43
130
3
443
3,990
494
18
34
546
4,979
Property, plant, and equipment, (net of accumulated depreciation and amortization of $1,684 and $1,551 as of December 31, 2023 and
2022, respectively)
Deferred debits and other assets
Regulatory assets
Prepaid pension asset
Other
Total deferred debits and other assets
Total assets
See the Combined Notes to Consolidated Financial Statements
154
Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Customer deposits
Regulatory liabilities
PPA termination obligation
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Atlantic City Electric Company and Subsidiary Company
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31,
2023
2022
$
$
199 $
154
192
42
25
23
6
49
12
702
1,679
771
140
4
49
964
3,345
1,830
(18)
1,812
5,157 $
—
3
206
47
26
21
26
87
58
474
1,754
734
156
8
100
998
3,226
1,765
(12)
1,753
4,979
Deferred income taxes and unamortized investment tax credits
Regulatory liabilities
Non-pension postretirement benefit obligations
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Shareholder's equity
Common stock ($3.00 par value, 25 shares authorized, 9 shares outstanding as of December 31, 2023 and 2022)
Retained deficit
Total shareholder's equity
Total liabilities and shareholder's equity
See the Combined Notes to Consolidated Financial Statements
155
Table of Contents
(In millions)
Balance at December 31, 2020
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2021
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2022
Net income
Common stock dividends
Contributions from parent
Balance at December 31, 2023
Atlantic City Electric Company and Subsidiary Company
Consolidated Statements of Changes in Shareholder's Equity
Common Stock
Retained Earnings (Deficit)
Total Shareholder's Equity
$
$
$
$
1,271 $
—
—
319
1,590 $
—
—
175
1,765 $
—
—
65
1,830 $
127
146
(288)
—
(15)
148
(145)
—
(12)
120
(126)
—
(18)
$
$
$
$
1,398
146
(288)
319
1,575
148
(145)
175
1,753
120
(126)
65
1,812
See the Combined Notes to Consolidated Financial Statements
156
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
1. Significant Accounting Policies (All Registrants)
Description of Business (All Registrants)
Exelon is a utility services holding company engaged in the energy transmission and distribution businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation. The separation was completed on February 1, 2022, creating two publicly traded
companies, Exelon and Constellation. See Note 2 — Discontinued Operations for additional information.
Name of Registrant
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
Business
Purchase and regulated retail sale of electricity
Transmission and distribution of electricity to retail customers
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Service Territories
Northern Illinois, including the City of Chicago
Southeastern Pennsylvania, including the City of Philadelphia (electricity)
Pennsylvania counties surrounding the City of Philadelphia (natural gas)
Central Maryland, including the City of Baltimore (electricity and natural gas)
Pepco Holdings LLC
Utility services holding company engaged, through its reportable segments Pepco, DPL, and ACE
Service Territories of Pepco, DPL, and ACE
Potomac Electric Power Company
Purchase and regulated retail sale of electricity
District of Columbia, and major portions of Montgomery and Prince George’s Counties,
Delmarva Power & Light Company
Atlantic City Electric Company
Basis of Presentation (All Registrants)
Transmission and distribution of electricity to retail customers
Purchase and regulated retail sale of electricity and natural gas
Transmission and distribution of electricity and distribution of natural gas to retail customers
Purchase and regulated retail sale of electricity
Transmission and distribution of electricity to retail customers
Maryland.
Portions of Delaware and Maryland (electricity)
Portions of New Castle County, Delaware (natural gas)
Portions of Southern New Jersey
This is a combined annual report of all Registrants. The Notes to the Consolidated Financial Statements apply to the Registrants as indicated parenthetically next to each corresponding disclosure. When
appropriate, the Registrants are named specifically for their related activities and disclosures. Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All
intercompany transactions have been eliminated, except for the historical transactions between the Utility Registrants and Generation for the purposes of presenting discontinued operations in all periods
presented in the Consolidated Statements of Operations and Comprehensive Income.
Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology, and supply
management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, finance, engineering, customer operations, transmission
and distribution planning, asset management, system operations, and power procurement, to PHI operating Registrants. The costs of BSC and PHISCO are directly charged or allocated to the applicable
subsidiaries. The results of Exelon’s corporate operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
As of December 31, 2023 and 2022, Exelon owned 100% of PECO, BGE, and PHI and more than 99% of ComEd. PHI owns 100% of Pepco, DPL, and ACE. As of December 31, 2021, Exelon owned
100% of Generation. As of February 1, 2022, as a result of the completion of the separation, Exelon no longer owns any interest in Generation. The separation of Constellation, including Generation and its
subsidiaries, meets the
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
criteria for discontinued operations and as such, its results of operations are presented as discontinued operations and have been excluded from continuing operations for all periods presented. Accounting
rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations.
Comprehensive income, shareholders' equity, and cash flows related to Generation have not been segregated and are included in the Consolidated Statements of Operations and Comprehensive Income,
Consolidated Statements of Changes in Shareholders’ Equity, and Consolidated Statements of Cash Flows, respectively, for the periods ended December 31, 2022 and December 31, 2021. See Note 2 —
Discontinued Operations for additional information.
The accompanying consolidated financial statements have been prepared in accordance with GAAP for annual financial statements and in accordance with the instructions to Form 10-K and Regulation S-
X promulgated by the SEC.
COVID-19 (All Registrants)
The Registrants have taken steps to mitigate the potential risks posed by the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19). The Registrants provide a critical service to their
customers and have taken measures to keep employees who operate the business safe and minimize unnecessary risk of exposure to the virus, including extra precautions for employees who work in the
field. The Registrants have implemented work from home policies where appropriate.
Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and
accompanying notes, and the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. As of December 31, 2023 and 2022, and
through the date of this report, management assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, allowance for credit losses and
the carrying value of goodwill and other long-lived assets, in context with the information reasonably available and the unknown future impacts of COVID-19. The Registrants' future assessment of the
magnitude and duration of COVID-19, as well as other factors, could result in material impacts to their consolidated financial statements in future reporting periods.
Use of Estimates (All Registrants)
The preparation of financial statements of each of the Registrants in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Areas in which significant estimates have been made include, but are not limited to, the accounting for pension and OPEB, unbilled energy revenues, allowance for
credit losses, inventory reserves, goodwill and long-lived asset impairment assessments, derivative instruments, unamortized energy contracts, fixed asset depreciation, environmental costs and other loss
contingencies, AROs, and taxes. Actual results could differ from those estimates.
Regulatory Accounting (All Registrants)
For their regulated electric and gas operations, the Registrants reflect the effects of cost-based rate regulation in their financial statements, which is required for entities with regulated operations that meet
the following criteria: (1) rates are established or approved by a third-party regulator; (2) rates are designed to recover the entities’ cost of providing services or products; and (3) there is a reasonable
expectation that rates designed to recover costs can be charged to and collected from customers. The Registrants account for their regulated operations in accordance with regulatory and legislative
guidance from the regulatory authorities having jurisdiction, principally the ICC, PAPUC, MDPSC, DCPSC, DEPSC, and NJBPU, under state public utility laws and the FERC under various Federal laws.
Regulatory assets and liabilities are amortized and the related expense or revenue is recognized in the Consolidated Statements of Operations consistent with the recovery or refund included in customer
rates. The Registrants' regulatory assets and liabilities as of the balance sheet date are probable of being recovered or settled in future rates. If a separable portion of the Registrants' business was no
longer able to meet the criteria discussed above, the affected entities would be required to eliminate from their consolidated financial statements the effects of regulation for that portion, which could have a
material impact on their financial statements. See Note 3 — Regulatory Matters for additional information.
With the exception of income tax-related regulatory assets and liabilities, the Registrants classify regulatory assets and liabilities with a recovery or settlement period greater than one year as both current
and noncurrent in
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
their Consolidated Balance Sheets, with the current portion representing the amount expected to be recovered from or refunded to customers over the next twelve-month period as of the balance sheet
date. Income tax-related regulatory assets and liabilities are classified entirely as noncurrent in the Registrants’ Consolidated Balance Sheets to align with the classification of the related deferred income
tax balances.
The Registrants treat the impacts of a final rate order received after the balance sheet date but prior to the issuance of the financial statements as a non-recognized subsequent event, as the receipt of a
final rate order is a separate and distinct event that has future impacts on the parties affected by the order.
Revenues (All Registrants)
Operating Revenues. The Registrants’ operating revenues generally consist of revenues from contracts with customers involving the sale and delivery of power and natural gas and utility revenues from
ARP. The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers in an amount that the entities expect to be entitled to in exchange for those
goods or services. The primary sources of revenue include regulated electric and natural gas tariff sales, distribution, and transmission services. At the end of each month, the Registrants accrue an
estimate for the unbilled amount of energy delivered or services provided to customers.
ComEd records ARP revenue for its best estimate of the electric distribution, energy efficiency, and transmission revenue impacts resulting from future changes in rates that ComEd believes are probable
of approval by the ICC and FERC in accordance with its formula rate mechanisms. BGE, Pepco, DPL, and ACE record ARP revenue for their best estimate of the electric and natural gas distribution
revenue impacts resulting from future changes in rates that they believe are probable of approval by the MDPSC, DCPSC, and/or NJBPU in accordance with their revenue decoupling mechanisms. PECO,
BGE, Pepco, DPL, and ACE record ARP revenue for their best estimate of the transmission revenue impacts resulting from future changes in rates that they believe are probable of approval by FERC in
accordance with their formula rate mechanisms. The Registrants recognize all ARP revenues that will be collected within 24 months of the end of the annual period in which they are recorded. See Note 3
— Regulatory Matters for additional information.
Taxes Directly Imposed on Revenue-Producing Transactions. The Registrants collect certain taxes from customers such as sales and gross receipts taxes, along with other taxes, surcharges, and
fees, that are levied by state or local governments on the sale or distribution of electricity and gas. Some of these taxes are imposed on the customer, but paid by the Registrants, while others are imposed
on the Registrants. Where these taxes are imposed on the customer, such as sales taxes, they are reported on a net basis with no impact to the Consolidated Statements of Operations and
Comprehensive Income. However, where these taxes are imposed on the Registrants, such as gross receipts taxes or other surcharges or fees, they are reported on a gross basis. Accordingly, revenues
are recognized for the taxes collected from customers along with an offsetting expense. See Note 22 — Supplemental Financial Information for taxes that are presented on a gross basis.
Leases (All Registrants)
The Registrants recognize a ROU asset and lease liability for operating and finance leases with a term of greater than one year. Operating lease ROU assets are included in Other deferred debits and
other assets and operating lease liabilities are included in Other current liabilities and Other deferred credits and other liabilities on the Consolidated Balance Sheets. Finance lease ROU assets are
included in Plant, property, and equipment, net and finance lease liabilities are included in Long-term debt due within one year and Long-term debt on the Consolidated Balance Sheets. The ROU asset is
measured as the sum of (1) the present value of all remaining fixed and in-substance fixed payments using the rate implicit in the lease whenever that is readily determinable or each Registrant’s
incremental borrowing rate, (2) any lease payments made at or before the commencement date (less any lease incentives received), and (3) any initial direct costs incurred. The lease liability is measured
the same as the ROU asset, but excludes any payments made before the commencement date and initial direct costs incurred. Lease terms include options to extend or terminate the lease if it is
reasonably certain they will be exercised. The Registrants include non-lease components, which are service-related costs that are not integral to the use of the asset, in the measurement of the ROU asset
and lease liability.
Expense for operating leases and leases with a term of one year or less is recognized on a straight-line basis over the term of the lease, unless another systematic and rational basis is more representative
of the derivation of benefit from use of the leased property. Variable lease payments are recognized in the period in which the
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
related obligation is incurred. Operating lease expense, finance lease expense, and variable lease payments are primarily recorded to Operating and maintenance expense on the Registrants’ Statements
of Operations and Comprehensive Income.
Income from operating leases, including subleases, is recognized on a straight-line basis over the term of the lease, unless another systematic and rational basis is more representative of the pattern in
which income is earned over the term of the lease. Variable lease income is recognized in the period in which the related obligation is performed. Operating lease income and variable lease income are
recorded to Operating revenues on the Registrants’ Statements of Operations and Comprehensive Income.
The Registrants’ operating and finance leases consist primarily of real estate including office buildings and vehicles and equipment. The Registrants account for land right arrangements that provide for
exclusive use as leases while shared use land arrangements are generally not leases. The Registrants do not account for secondary use pole attachments as leases.
See Note 10 — Leases for additional information.
Income Taxes (All Registrants)
Deferred federal and state income taxes are recorded on significant temporary differences between the book and tax basis of assets and liabilities and for tax benefits carried forward. Investment tax
credits have been deferred in the Registrants’ Consolidated Balance Sheets and are recognized in book income over the life of the related property. The Registrants account for uncertain income tax
positions using a benefit recognition model with a two-step approach; a more-likely-than-not recognition criterion; and a measurement approach that measures the position as the largest amount of tax
benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit of the tax position will be sustained on its technical merits, no benefit is
recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Registrants recognize accrued interest
related to unrecognized tax benefits in Interest expense, net or Other, net (interest income) and recognize penalties related to unrecognized tax benefits in Other, net in their Consolidated Statements of
Operations and Comprehensive Income.
Cash and Cash Equivalents (All Registrants)
The Registrants consider investments purchased with an original maturity of three months or less to be cash equivalents.
Restricted Cash and Cash Equivalents (All Registrants)
Restricted cash and cash equivalents represent funds that are restricted to satisfy designated current liabilities. As of December 31, 2023 and 2022, the Registrants' restricted cash and cash equivalents
primarily represented the following items:
(a)
Registrant
Exelon
ComEd
PECO
BGE
PHI
(a)
Pepco
DPL
Description
Payment of medical, dental, vision, and long-term disability benefits, in addition to the items listed below for the Utility Registrants.
Collateral held from suppliers associated with energy and REC procurement contracts, any over-recovered RPS costs and alternative compliance payments received from RES
pursuant to FEJA, and costs for the remediation of an MGP site.
Proceeds from the sales of assets that were subject to PECO’s mortgage indenture.
Proceeds from the loan program for the completion of certain energy efficiency measures and collateral held from energy suppliers.
Payment of merger commitments and collateral held from its energy suppliers associated with procurement contracts.
Payment of merger commitments and collateral held from energy suppliers.
Collateral held from energy suppliers.
__________
(a) As of December 31, 2023 and 2022, ACE had no restricted cash and cash equivalents.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
Restricted cash and cash equivalents not available to satisfy current liabilities are classified as noncurrent assets. As of December 31, 2023 and 2022, the Registrants' noncurrent restricted cash and cash
equivalents primarily represented ComEd’s over-recovered RPS costs and alternative compliance payments received from RES pursuant to FEJA and costs for the remediation of an MGP site.
See Note 16 — Debt and Credit Agreements and Note 22 — Supplemental Financial Information for additional information.
Allowance for Credit Losses on Accounts Receivables (All Registrants)
The allowance for credit losses reflects the Registrants’ best estimates of losses on the customers' accounts receivable balances based on historical experience, current information, and reasonable and
supportable forecasts.
The allowance for credit losses is developed by applying loss rates for each Utility Registrant, based on historical loss experience, current conditions, and forward-looking risk factors, to the outstanding
receivable balance by customer risk segment. Utility Registrants' customer accounts are written off consistent with approved regulatory requirements. Adjustments to the allowance for credit losses are
primarily recorded to Operating and maintenance expense on the Registrants' Consolidated Statements of Operations and Comprehensive Income or Regulatory assets and liabilities on the Registrants'
Consolidated Balance Sheets. See Note 3 - Regulatory Matters for additional information regarding the regulatory recovery of credit losses on customer accounts receivable.
The Registrants have certain non-customer receivables in Other deferred debits and other assets which primarily are with governmental agencies and other high-quality counterparties with no history of
default. As such, the allowance for credit losses related to these receivables is not material. The Registrants monitor these balances and will record an allowance if there are indicators of a decline in
credit quality. See Note 6 — Accounts Receivable for additional information.
Inventories (All Registrants)
Inventory is recorded at the lower of weighted average cost or net realizable value. Provisions are recorded for excess and obsolete inventory. Fossil fuel and Materials and supplies are generally included
in inventory when purchased. Fossil fuel is expensed to Purchased power and fuel expense when used or sold. Materials and supplies generally includes transmission and distribution materials and are
expensed to Operating and maintenance or capitalized to Property, plant, and equipment, as appropriate, when installed or used.
Property, Plant, and Equipment (All Registrants)
Property, plant, and equipment is recorded at original cost. Original cost includes construction-related direct labor and material costs and indirect construction costs including labor and related costs of
departments associated with supporting construction activities. When appropriate, original cost also includes AFUDC for regulated property at the Utility Registrants. The cost of repairs and maintenance
and minor replacements of property is charged to Operating and maintenance expense as incurred.
Third parties reimburse the Utility Registrants for all or a portion of expenditures for certain capital projects. Such contributions in aid of construction costs (CIAC) are recorded as a reduction to Property,
plant, and equipment, net.
Upon retirement, the cost of property, net of salvage, is charged to accumulated depreciation consistent with the composite and group methods of depreciation. Depreciation expense at ComEd, BGE,
Pepco, DPL, and ACE includes the estimated cost of dismantling and removing plant from service upon retirement. Actual incurred removal costs are applied against a related regulatory liability or
recorded to a regulatory asset if in excess of previously collected removal costs. PECO’s removal costs are capitalized to accumulated depreciation when incurred and recorded to depreciation expense
over the life of the new asset constructed consistent with PECO’s regulatory recovery method.
Capitalized Software. Certain costs, such as design, coding, and testing incurred during the application development stage of software projects that are internally developed or purchased for operational
use are capitalized within Property, plant, and equipment. Similar costs incurred for cloud-based solutions treated as
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(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
service arrangements are capitalized within Other Current Assets and Deferred Debits and Other Assets. Such capitalized amounts are amortized ratably over the expected lives of the projects when they
become operational, generally not to exceed five years. Certain other capitalized software costs are being amortized over longer lives based on the expected life or pursuant to prescribed regulatory
requirements.
AFUDC. AFUDC is the cost, during the period of construction, of debt and equity funds used to finance construction projects for regulated operations. AFUDC is recorded to construction work in progress
and as a non-cash credit to an allowance that is included in interest expense for debt-related funds and other income and deductions for equity-related funds. The rates used for capitalizing AFUDC are
computed under a method prescribed by regulatory authorities.
See Note 7 — Property, Plant, and Equipment, Note 8 — Jointly Owned Electric Utility Plant and Note 22 — Supplemental Financial Information for additional information.
Depreciation and Amortization (All Registrants)
Depreciation is generally recorded over the estimated service lives of property, plant, and equipment on a straight-line basis using the group or composite methods of depreciation. The group approach is
typically for groups of similar assets that have approximately the same useful lives and the composite approach is used for dissimilar assets that have different lives. Under both methods, a reporting entity
depreciates the assets over the average life of the assets in the group. ComEd, BGE, Pepco, DPL, and ACE's depreciation expense includes the estimated cost of dismantling and removing plant from
service upon retirement, which is consistent with each utility's regulatory recovery method. PECO's removal costs are capitalized to accumulated depreciation when incurred and recorded to depreciation
expense over the life of the new asset constructed consistent with PECO's regulatory recovery method. The estimated service lives for the Registrants are based on a combination of depreciation studies
and historical retirements. See Note 7 — Property, Plant, and Equipment for additional information regarding depreciation.
Amortization of regulatory assets and liabilities are recorded over the recovery or refund period specified in the related legislation or regulatory order or agreement. When the recovery or refund period is
less than one year, amortization is recorded to the line item in which the deferred cost or income would have originally been recorded in the Registrants’ Consolidated Statements of Operations and
Comprehensive Income. Amortization of ComEd’s electric distribution and energy efficiency formula rate regulatory assets and the Utility Registrants' transmission formula rate regulatory assets is
recorded to Operating revenues.
Amortization of income tax related regulatory assets and liabilities is generally recorded to Income tax expense. Except for the regulatory assets and liabilities discussed above, amortization is generally
recorded to Depreciation and amortization in the Registrants’ Consolidated Statements of Operations and Comprehensive Income when the recovery period is more than one year.
See Note 3 — Regulatory Matters and Note 22 — Supplemental Financial Information for additional information regarding the amortization of the Registrants' regulatory assets.
Asset Retirement Obligations (All Registrants)
The Registrants estimate and recognize a liability for their legal obligation to perform asset retirement activities even though the timing and/or methods of settlement may be conditional on future events.
The Registrants update their AROs either annually or on a rotational basis at least once every three years, based on a risk profile, unless circumstances warrant more frequent updates. The updates factor
in new cost estimates, credit-adjusted, risk-free rates (CARFR) and escalation rates, and the timing of cash flows. AROs are accreted throughout each year to reflect the time value of money for these
present value obligations through an increase to Regulatory assets. See Note 9 — Asset Retirement Obligations for additional information.
Guarantees (All Registrants)
If necessary, the Registrants recognize a liability at the time of issuance of a guarantee for the fair value of the obligations they have undertaken by issuing the guarantee. The liability is reduced or
eliminated as the Registrants are released from risk under the guarantee. Depending on the nature of the guarantee, the release from risk of the Registrant may be recognized only upon the expiration or
settlement of the guarantee or by a
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(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
systematic and rational amortization method over the term of the guarantee. See Note 18 — Commitments and Contingencies for additional information.
Asset Impairments
Long-Lived Assets (All Registrants). The Registrants evaluate the carrying value of long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying value of
those assets may not be recoverable. Indicators of impairment may include specific regulatory disallowance, abandonment, or plans to dispose of a long-lived asset significantly before the end of its useful
life. When the estimated undiscounted future cash flows attributable to the long-lived asset may not be recoverable, the amount of the impairment loss is determined by measuring the excess of the
carrying amount of the long-lived asset over its fair value.
Goodwill (Exelon, ComEd, and PHI). Goodwill represents the excess of the purchase price paid over the estimated fair value of the net assets acquired and liabilities assumed in the acquisition of a
business. Goodwill is not amortized but is assessed for impairment at least annually or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value
of a reporting unit below its carrying value. See Note 12 — Intangible Assets for additional information.
Derivative Financial Instruments (All Registrants)
Derivatives are recognized on the balance sheet at their fair value unless they qualify for certain exceptions, including NPNS. For derivatives that qualify and are designated as cash flow hedges, changes
in fair value each period are initially recorded in AOCI and recognized in earnings when the underlying hedged transaction affects earnings. Amounts recognized in earnings are recorded in Interest
expense, net on the Consolidated Statement of Operations and Comprehensive Income based on the activity the transaction is economically hedging. Cash inflows and outflows related to derivative
instruments designated as cash flow hedges are included as a component of operating, investing, or financing cash flows in the Consolidated Statements of Cash Flows, depending on the nature of each
transaction.
For derivatives intended to serve as economic hedges, which are not designated for hedge accounting, changes in fair value each period are recognized in earnings or as a regulatory asset or liability
each period. Amounts recognized in earnings are recorded in Electric operating revenues, Purchased power and fuel, or Interest expense in the Consolidated Statements of Operations and
Comprehensive Income based on the activity the transaction is economically hedging. Changes in fair value are also recorded as a regulatory asset or liability when there is an ability to recover or return
the associated costs or benefits in accordance with regulatory requirements. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing, or financing
cash flows in the Consolidated Statements of Cash Flows, depending on the nature of the hedged item. See Note 3 — Regulatory Matters and Note 15 — Derivative Financial Instruments for additional
information.
Retirement Benefits (All Registrants)
Exelon sponsors defined benefit pension plans and OPEB plans.
The plan obligations and costs of providing benefits under these plans are measured as of December 31. The measurement involves various factors, assumptions, and accounting elections. The impact of
assumption changes or experience different from that assumed on pension and OPEB obligations is recognized over time rather than immediately recognized in the Consolidated Statements of Operations
and Comprehensive Income. Gains or losses in excess of the greater of ten percent of the projected benefit obligation or the MRV of plan assets are amortized over the expected average remaining
service period of plan participants. See Note 14 — Retirement Benefits for additional information.
New Accounting Standards (All Registrants)
New Accounting Standards Issued and Not Yet Adopted as of December 31, 2023: The following new authoritative accounting guidance issued by the FASB has not yet been adopted and reflected
by the Registrants in their consolidated financial statements as of December 31, 2023. Unless otherwise indicated, the Registrants are currently assessing the impacts such guidance may have (which
could be material) in their Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements
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(Dollars in millions, except per share data unless otherwise noted)
Note 1 — Significant Accounting Policies
of Cash Flows and disclosures, as well as the potential to early adopt where applicable. The Registrants have assessed other FASB issuances of new standards which are not listed below given the
current expectation that such standards will not significantly impact the Registrants' financial reporting.
Segment Reporting (Issued November 2023). Improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The objective of the
revised guidance is to introduce a new requirement to disclose significant segment expenses regularly provided to the CODM, extend certain annual disclosures to interim periods, clarify single reportable
segment entities must apply ASC 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions, and require disclosure of the title and position of the
CODM. The standard is effective for annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025, with early adoption permitted. The standard will be applied retrospectively.
Improvement to Income Tax Disclosures (Issued December 2023). Provides additional disclosure requirements related to the effective tax rate reconciliation and income taxes paid. Under the revised
guidance for the effective tax reconciliations, entities would be required to disclose: (1) eight specific categories in the effective tax rate reconciliation in both percentages and reporting currency amount, (2)
additional information for reconciling items over a certain threshold, (3) explanation of individual reconciling items disclosed, and (4) provide a qualitative description of the state and local jurisdictions that
contribute to the majority of the state income tax expense. For each annual period presented, the new standard requires disclosure of the year-to-date amount of income taxes paid (net of refunds received)
disaggregated by federal, state, and foreign. It also requires additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of
total income taxes paid (net of refunds received). The standard is effective January 1, 2025, with early adoption permitted.
2. Discontinued Operations (Exelon)
On February 21, 2021, Exelon's Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies ("the separation"). Exelon completed the
separation on February 1, 2022, through the distribution of 326,663,937 common stock shares of Constellation, the new publicly traded company, to Exelon shareholders. Under the separation plan, Exelon
shareholders retained their current shares of Exelon stock and received one share of Constellation common stock for every three shares of Exelon common stock held on January 20, 2022, the record date
for the distribution, in a transaction that was tax-free to Exelon and its shareholders for U.S. federal income tax purposes.
Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purposes of separation and holds Generation (including Generation's subsidiaries).
Pursuant to the separation:
•
•
•
•
•
Exelon entered into four term loans consisting of a 364-day term loan for $1.15 billion and three 18-month term loans for $300 million, $300 million, and $250 million, respectively. Exelon issued
these term loans primarily to fund the cash payment to Constellation and for general corporate purposes. See Note 16 — Debt and Credit Agreements for additional information.
Exelon made a cash payment of $1.75 billion to Constellation on January 31, 2022.
Exelon contributed its equity ownership interest in Generation to Constellation. Exelon no longer retains any equity ownership interest in Generation or Constellation.
Exelon transferred certain corporate assets and employee-related obligations to Constellation.
Exelon received cash from Generation of $258 million to settle the intercompany loan on January 31, 2022. See Note 16 — Debt and Credit Agreements for additional information.
Continuing Involvement
In order to govern the ongoing relationships between Exelon and Constellation after the separation, and to facilitate an orderly transition, Exelon and Constellation have entered into several agreements,
including the following:
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Note 2 — Discontinued Operations
•
•
•
Separation Agreement – governs the rights and obligations between Exelon and Constellation regarding certain actions to be taken in connection with the separation, among others, including the
allocation of assets and liabilities between Exelon and Constellation.
Transition Services Agreement (TSA) – governs the terms and conditions of the services that Exelon provides to Constellation and Constellation provides to Exelon for an expected period of two
years, provided that certain services may be longer than the term and services may be extended with approval from both parties. The services include specified accounting, finance, information
technology, human resources, employee benefits, and other services that have historically been provided on a centralized basis by BSC. For the year ended December 31, 2023, the amounts
Exelon billed Constellation and Constellation billed Exelon for these services were $151 million recorded in Other income, net and $14 million recorded in Operating and maintenance expense,
respectively. For the period from February 1, 2022 to December 31, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $266 million recorded in
Other income, net and $43 million recorded in Operating and maintenance expense, respectively.
Tax Matters Agreement (TMA) – governs the respective rights, responsibilities and obligations of Exelon and Constellation with respect to all tax matters, including tax liabilities and benefits, tax
attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. See Note 13 — Income Taxes for
additional information.
In addition, the Utility Registrants will continue to incur expenses from transactions with Constellation after the separation. Prior to the separation, such expenses were primarily recorded as Purchased
power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants. After the separation, such expenses are primarily recorded as
Purchased power and an immaterial amount recorded as Operating and maintenance expense at the Utility Registrants.
•
•
•
•
•
•
ComEd had an ICC-approved RFP contract with Constellation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Constellation.
PECO received electric supply from Constellation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Constellation to
sell solar AECs.
BGE received a portion of its energy requirements from Constellation under its MDPSC-approved market-based SOS and gas commodity programs.
Pepco received electric supply from Constellation under contracts executed through Pepco’s competitive procurement process approved by the MDPSC and DCPSC.
DPL received a portion of its energy requirements from Constellation under its MDPSC and DEPSC approved market-based SOS commodity programs.
ACE received electric supply from Constellation under contracts executed through ACE’s competitive procurement process approved by the NJBPU.
ComEd and PECO also have receivables with Constellation for estimated excess funds at the end of decommissioning the Regulatory Agreement Units, such amounts are due back to ComEd and PECO,
as applicable, for payment to their respective customers. See Note 3 — Regulatory Matters and Note 23 — Related Party Transactions for additional information.
Discontinued Operations
The separation represented a strategic shift that had a major effect on Exelon’s operations and financial results. Accordingly, the separation met the criteria for discontinued operations.
There were no results from discontinued operations for the year ended December 31, 2023. The following table presents the results of Constellation that have been reclassified from continuing operations
and included in discontinued operations within Exelon’s Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021.
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(Dollars in millions, except per share data unless otherwise noted)
Note 2 — Discontinued Operations
These results are primarily Generation, which is comprised of Exelon’s Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions reportable segments, and include the impact of transaction
costs, certain BSC costs, including any transition costs, that were historically allocated and directly attributable to Generation, transactions between Generation and the Utility Registrants, and tax-related
adjustments. Transaction costs include costs for external bankers, accountants, appraisers, lawyers, external counsels and other advisors, among others, who are involved in the negotiation, appraisal, due
diligence and regulatory approval of the separation. Transition costs are primarily employee-related costs such as recruitment expenses, costs to establish certain stand-alone functions and information
technology systems, professional services fees, and other separation-related costs during the transition to separate Generation. For the purposes of reporting discontinued operations, these results also
include transactions between Generation and the Utility Registrants that were historically eliminated within Exelon’s Consolidated Statements of Operations, as these transactions will be ongoing after the
separation. Certain BSC costs that were historically allocated to Generation are presented as part of continuing operations in Exelon’s Consolidated Statements of Operations as these costs do not qualify
as expenses of the discontinued operations per the accounting rules.
Operating revenues
Competitive business revenues
Competitive business revenues from affiliates
Total operating revenues
Operating expenses
Competitive businesses purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income taxes
Total operating expenses
(a)
Gain on sales of assets and businesses
Operating income
Other income and (deductions)
Interest expense, net
Other, net
Total other income and (deductions)
Income before income taxes
Income taxes
Equity in losses of unconsolidated affiliates
Net income
Net income attributable to noncontrolling interests
Net income from discontinued operations
For the Years Ended December 31,
2022
2021
1,855 $
161
2,016
1,138
371
94
44
1,647
10
379
(20)
(281)
(301)
78
(40)
(1)
117
1
116 $
18,466
1,189
19,655
12,163
4,174
3,003
475
19,815
201
41
(282)
795
513
554
332
(9)
213
123
90
$
$
__________
(a)
Includes transaction and transition costs related to the separation of $52 million and $43 million for the years ended December 31, 2022 and 2021, respectively.
There were no assets or liabilities of discontinued operations included in Exelon's Consolidated Balance Sheet as of December 31, 2023 and 2022. Constellation had net assets of $11,573 million that
separated on February 1, 2022 that resulted in a reduction to Exelon's equity during the year ended December 31, 2022. Refer to the Distribution of Constellation line in Exelon's Consolidated Statement of
Changes in Shareholders' Equity for further information.
There were no discontinued operations included within Exelon's Consolidated Statements of Cash Flows for the year ended December 31, 2023. The following table presents selected financial information
regarding cash flows of the discontinued operations that are included within Exelon’s Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021.
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(Dollars in millions, except per share data unless otherwise noted)
Non-cash items included in net income from discontinued operations:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization
Asset impairments
Loss (gain) on sales of assets and businesses
Deferred income taxes and amortization of investment tax credits
Net fair value changes related to derivatives
Net realized and unrealized losses (gains) on NDT fund investments
Net unrealized losses on equity investments
Other decommissioning-related activity
Cash flows from investing activities:
Capital expenditures
Collection of DPP
Supplemental cash flow information:
(Decrease) increase in capital expenditures not paid
Increase in DPP
Increase in PP&E related to ARO update
3. Regulatory Matters (All Registrants)
The following matters below discuss the status of material regulatory and legislative proceedings of the Registrants.
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2023.
Completed Distribution Base Rate Case Proceedings
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Note 2 — Discontinued Operations
For the Years Ended December 31,
2022
2021
207 $
—
9
(143)
(59)
205
16
36
(227)
169
(128) $
348
335
4,540
545
(201)
(224)
(568)
(586)
160
(946)
(1,341)
3,902
96
3,652
618
$
$
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Registrant/Jurisdiction
Filing Date
April 15, 2022
(a)
ComEd - Illinois
January 17, 2023
(b)
April 21, 2023
(c)
Service
Electric
Electric
Electric
PECO - Pennsylvania
March 31, 2022
Natural Gas
BGE - Maryland
Pepco - Maryland
(g)
DPL - Maryland
(h)
ACE - New Jersey
(i)
May 15, 2020 (amended
(e)
September 11, 2020)
February 17, 2023
(f)
October 26, 2020 (amended
March 31, 2021)
May 19, 2022
February 15, 2023 (amended
August 21, 2023)
Electric
Natural Gas
Electric
Natural Gas
Electric
Electric
Electric
Requested Revenue
Requirement Increase
Approved Revenue
Requirement Increase
Approved ROE
Approval Date
Rate Effective Date
$
$
$
$
$
$
$
$
$
$
$
199 $
1,487 $
247 $
82
$
203 $
108 $
199
501
259
55
140
74
7.85%
November 17, 2022
January 1, 2023
8.905%
December 14, 2023
January 1, 2024
8.91%
N/A
(d)
9.50%
9.65%
November 30, 2023
January 1, 2024
October 27, 2022
January 1, 2023
December 16, 2020
January 1, 2021
313 $
179
9.50%
289 $
229
9.45%
December 14, 2023
January 1, 2024
104 $
38
92
$
$
52
29
45
9.55%
9.60%
9.60%
June 28, 2021
June 28, 2021
December 14, 2022
January 1, 2023
November 17, 2023
December 1, 2023
__________
(a) ComEd’s 2023 approved revenue requirement above reflects an increase of $144 million for the initial year revenue requirement for 2023 and an increase of $55 million related to the annual reconciliation for 2021. The
revenue requirement for 2023 provides for a weighted average debt and equity return on distribution rate base of 5.94% inclusive of an allowed ROE of 7.85%, reflecting the monthly average yields for 30-year treasury
bonds plus 580 basis points. The reconciliation revenue requirement for 2021 provides for a weighted average debt and equity return on distribution rate base of 5.91%, inclusive of an allowed ROE of 7.78%, reflecting
the monthly yields on 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points. ComEd's last performance-based electric distribution formula rate update filing under EIMA was
completed in 2022. See discussion of CEJA below for details on the transition away from the electric distribution formula rate.
(b) Reflects a four-year cumulative multi-year rate plan for January 1, 2024 to December 31, 2027. On December 14, 2023, the ICC approved year-over-year distribution revenue requirement increases in 2024-2027, with
an amendatory order on January 10, 2024, of approximately $451 million effective January 1, 2024, $14 million effective January 1, 2025, $6 million effective January 1, 2026, and $30 million effective January 1, 2027,
based on an ROE of 8.905%, an equity ratio of 50%, and year end 2022 rate base. The ICC rejected ComEd’s Grid Plan, requiring ComEd to file a revised Grid Plan by March 13, 2024, 90 days after the issuance of the
December final order. The ICC also directed that the revised Grid Plan would be reviewed through further formal proceedings in that docket. On January 10, 2024, the ICC granted one portion of ComEd’s application for
rehearing of the December 14, 2023 final order, and directing that a 150-day rehearing process reconsider the revenue requirements for the test years (2024-2027), absent an approved Grid Plan. On January 31,2024,
the ICC further clarified the scope of the rehearing process. ComEd anticipates that the revenue requirements determined during the rehearing process will be further updated upon approval of a revised Grid Plan. On
January 10, 2024, ComEd also filed with the Illinois appellate court an appeal of various aspects of the ICC’s final order on which rehearing was denied, including the 8.905% ROE, 50% equity ratio, and denial of any
return on ComEd’s pension asset.
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(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
(c) On November 30, 2023, the Delivery Reconciliation Amount for 2022 defined in Rider Delivery Service Pricing Reconciliation (Rider DSPR) was approved. The delivery reconciliation amount allows for the reconciliation
of the revenue requirement in effect in the final years in which formula rates are determined and until such time as new rates are established under ComEd’s approved MRP. The 2023 filing reconciled the delivery
service rates in effect in 2022 with the actual delivery service costs incurred in 2022. The reconciliation revenue requirement provides for a weighted average debt and equity return on distribution rate base of 6.48%,
inclusive of an allowed ROE of 8.91%, reflecting the monthly yields on 30-year treasury bonds plus 580 basis points.
(d) The PECO electric and natural gas base rate case proceedings were resolved through settlement agreements, which did not specify an approved ROE.
(e) Reflects a three-year cumulative multi-year plan for 2021 through 2023. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 2023. The MDPSC
awarded BGE electric revenue requirement increases of $59 million, $39 million, and $42 million, before offsets, in 2021, 2022, and 2023, respectively, and natural gas revenue requirement increases of $53 million,
$11 million, and $10 million, before offsets, in 2021, 2022, and 2023, respectively. However, the MDPSC utilized the tax benefits to fully offset the increases in 2021 and January 2022 such that customer rates remained
unchanged. For the remainder of 2022, the MDPSC chose to offset only 25% of the cumulative 2021 and 2022 electric revenue requirement increases and 50% of the cumulative gas revenue requirement increases. In
2021, the MDPSC deferred a decision on whether to use certain tax benefits to offset the revenue requirement increases in 2023 and directed BGE to make another proposal at the end of 2022. In September 2022,
BGE proposed that tax benefits not be used to offset the 2023 revenue requirement increases. On October 26, 2022, the MDPSC accepted BGE's recommendation to not use tax benefits to offset the 2023 revenue
requirement increases.
(f) Reflects a three-year cumulative multi-year plan for January 1, 2024 through December 31, 2026. The MDPSC awarded BGE electric revenue requirement increases of $41 million, $113 million, and $25 million in 2024,
2025, and 2026, respectively, and natural gas revenue requirement increases of $126 million, $62 million, and $41 million in 2024, 2025, and 2026, respectively. Requested revenue requirement increases will be used
to recover capital investments designed to increase the resilience of the electric and gas distribution systems and support Maryland's climate and regulatory initiatives. The MDPSC also approved a portion of the
requested 2021 and 2022 reconciliation amounts, which will be recovered through separate electric and gas riders starting in 2024. As such, the reconciliation amounts are not included in the approved revenue
requirement increases. The 2021 reconciliation amounts are $13 million and $7 million for electric and gas, respectively, and the 2022 reconciliation amounts are $39 million and $15 million for electric and gas,
respectively.
(g) Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024. The MDPSC awarded Pepco electric incremental revenue requirement increases of $21 million, $16 million, and $15 million,
before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively. Pepco proposed to utilize certain tax benefits to fully offset the increase through 2023 and partially offset customer rate
increases in 2024. However, the MDPSC only utilized the acceleration of refunds for certain tax benefits to fully offset the increases such that customer rates remain unchanged through March 31, 2022. On February
23, 2022, the MDPSC chose to offset 25% of the cumulative revenue requirement increase through March 31, 2023. In 2021, the MDPSC deferred a decision on whether to use certain tax benefits to offset the revenue
requirement increases for the 12-month period ending March 31, 2024. In December 2022 Pepco proposed that tax benefits not be used to offset the revenue requirement increases for this period. On January 25,
2023, the MDPSC accepted Pepco’s recommendations not to use tax benefits to offset revenue requirement increases for the 12-month period ending March 31, 2024.
(h) Reflects a three-year cumulative multi-year plan for January 1, 2023 through December 31, 2025. The MDPSC awarded DPL electric incremental revenue requirement increases of $17 million, $6 million, and $6 million
for 2023, 2024, and 2025, respectively.
(i) Requested and approved increases are before New Jersey sales and use tax. The NJBPU awarded ACE electric revenue requirement increases of $36 million and $9 million effective December 1, 2023 and February 1,
2024, respectively.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Pending Distribution Base Rate Case Proceedings
Registrant/Jurisdiction
Pepco - District of Columbia
(a)
Pepco - Maryland
(b)
DPL - Delaware
(c)
Filing Date
April 13, 2023
May 16, 2023 (amended January
26, 2024)
December 15, 2022 (amended
September 29, 2023)
Service
Electric
Electric
Electric
$
$
$
Requested Revenue
Requirement Increase
191
188
39
Requested ROE
10.50%
10.50%
10.50%
Expected Approval Timing
Third quarter of 2024
Second quarter of 2024
Second quarter of 2024
__________
(a) Reflects a three-year cumulative multi-year plan for January 1, 2024 through December 31, 2026 submitted to the DCPSC. Pepco requested total electric revenue requirement increases of $117 million, $37 million, and
$37 million in 2024, 2025 and 2026, respectively. Requested revenue requirement increases will be used to recover capital investments designed to advance system-readiness and support the District of Columbia’s
climate and clean energy goals.
(b) Reflects a three-year cumulative multi-year plan for April 1, 2024 through March 31, 2027 submitted to the MDPSC. Pepco requested total electric revenue requirement increases of $69 million, $54 million and $51
million effective April 1, 2024, April 1, 2025, and April 1, 2026, respectively through its rebuttal filing made on January 26, 2024. The plan contains a proposed nine-month extension period with a requested revenue
requirement increase of $14 million effective April 1, 2027 through December 31, 2027. Requested revenue requirement increases will be used to recover capital investments designed to advance system-readiness and
support Maryland's climate and clean energy goals. On August 7, 2023, the MDPSC issued an order approving a settlement agreement which allows Pepco to establish a revenue deferral mechanism to recover its full
Commission-authorized year 1 increase between July 1, 2024 through March 31, 2025 and extend the procedural schedule to address intervenor resource constraints.
(c) The rates went into effect on July 15, 2023, subject to refund.
Transmission Formula Rates
The Utility Registrants' transmission rates are each established based on a FERC-approved formula. ComEd, BGE, Pepco, DPL, and ACE are required to file an annual update to the FERC-approved
formula on or before May 15, and PECO is required to file on or before May 31, with the resulting rates effective on June 1 of the same year. The annual update for ComEd is based on prior year actual
costs and current year projected capital additions (initial year revenue requirement). The update for ComEd also reconciles any differences between the revenue requirement in effect beginning June 1 of
the prior year and actual costs incurred for that year (annual reconciliation). The annual update for PECO is based on prior year actual costs and current year projected capital additions, accumulated
depreciation, and accumulated deferred income taxes. The annual update for BGE, Pepco, DPL, and ACE is based on prior year actual costs and current year projected capital additions, accumulated
depreciation, Depreciation and amortization expense, and accumulated deferred income taxes. The update for PECO, BGE, Pepco, DPL, and ACE also reconciles any differences between the actual costs
and actual revenues for the calendar year (annual reconciliation).
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
For 2023, the following total increases/(decreases) were included in the Utility Registrants' electric transmission formula rate updates:
ComEd
PECO
BGE
Pepco
DPL
ACE
Registrant
(a)
Initial Revenue Requirement Increase
20
$
24
$
$
$
$
$
19
37
32
41
$
$
$
$
$
$
Annual Reconciliation Increase
(Decrease)
63
23
(12)
(5)
(3)
(12)
Total Revenue Requirement Increase
83
$
47
$
$
$
$
$
4 (d)
32
29
29
Allowed Return on Rate Base
(b)
Allowed ROE
(c)
8.09 %
7.41 %
7.34 %
7.57 %
7.08 %
7.08 %
11.50 %
10.35 %
10.50 %
10.50 %
10.50 %
10.50 %
__________
(a) All rates are effective June 1, 2023 - May 31, 2024, subject to review by interested parties pursuant to review protocols of each Utility Registrants' tariff.
(b) Represents the weighted average debt and equity return on transmission rate bases. For ComEd and PECO, the common equity component of the ratio used to calculate the weighted average debt and equity return on
the transmission formula rate base is currently capped at 55% and 55.75%, respectively.
(c) The rate of return on common equity for each Utility Registrant includes a 50-basis-point incentive adder for being a member of a RTO.
(d) The increase in BGE's transmission revenue requirement includes a $3 million reduction related to a FERC-approved dedicated facilities charge to recover the costs of providing transmission service to specifically
designated load by BGE.
Other State Regulatory Matters
Illinois Regulatory Matters
CEJA (Exelon and ComEd). On September 15, 2021, the Governor of Illinois signed into law CEJA. CEJA includes, among other features, (1) procurement of CMCs from qualifying nuclear-powered
generating facilities, (2) a requirement to file a general rate case or a new four-year MRP no later than January 20, 2023 to establish rates effective after ComEd’s existing performance-based distribution
formula rate sunsets, (3) requirements that ComEd and the ICC initiate and conduct various regulatory proceedings on subjects including ethics, spending, grid investments, and performance metrics.
ComEd Electric Distribution Rates
ComEd filed, and received approval for, its last performance-based electric distribution formula rate update under EIMA in 2022; those rates were in effect throughout 2023.
On February 3, 2022, the ICC approved a tariff that establishes the process under which ComEd reconciled its 2022 and will reconcile its 2023 rate year revenue requirements with actual costs. Those
reconciliation amounts are determined using the same process used for prior reconciliations under the performance-based electric distribution formula rate. Using that process, for the rate years 2022 and
2023 ComEd will ultimately collect revenues from customers reflecting each year’s actual recoverable costs, year-end rate base, and a weighted average debt and equity return on distribution rate base,
with the ROE component based on the annual average of the monthly yields of the 30-year U.S. Treasury bonds plus 580 basis points. In April 2023, ComEd filed its first petition with the ICC to reconcile its
2022 actual costs with the approved revenue requirement that was in effect in 2022; the final order was issued on November 30, 2023, for rates beginning January 2024. In 2024, ComEd will file with the
ICC its 2023 actual costs with the approved revenue requirement that was in effect in 2023.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Beginning in 2024, ComEd will recover from retail customers, subject to certain exceptions, the costs it incurs to provide electric delivery services either through its electric distribution rate or other recovery
mechanisms authorized by CEJA. On January 17, 2023, ComEd filed a petition with the ICC seeking approval of a MRP for 2024-2027. The MRP supports a multi-year grid plan (Grid Plan), also filed on
January 17, covering planned investments on the electric distribution system within ComEd’s service area through 2027. Costs incurred during each year of the MRP are subject to ICC review and the
plan’s revenue requirement for each year will be reconciled with the actual costs that the ICC determines are prudently and reasonably incurred for that year. The reconciliation is subject to adjustment for
certain costs, including a limitation on recovery of costs that are more than 105% of certain costs in the previously approved MRP revenue requirement, absent a modification of the rate plan itself. Thus,
for example, the rate adjustments necessary to reconcile 2024 revenues to ComEd’s actual 2024 costs incurred would take effect in January 2026 after the ICC’s review during 2025. On May 22, 2023,
direct testimony was filed by ICC staff and more than a dozen intervenors and intervenor groups. The testimonies addressed a wide variety of topics, including rate of return on equity, capital structure, grid
planning, various distribution grid and information technology investments, and affordability and customer service. ComEd also made voluntary adjustments and, per the ICC’s final beneficial electrification
order requiring ComEd to recover beneficial electrification costs through the MRP, increased its total revenue requirement request from $1.472 billion to $1.545 billion. ComEd filed its reply brief on
September 27, 2023, to adjust its total requested revenue requirement increase to $1.487 billion.
On December 14, 2023, the ICC issued a final order. The ICC rejected ComEd’s Grid Plan as non-compliant with certain requirements of CEJA, and required ComEd to file a revised Grid Plan by March
13, 2024, 90 days after the issuance of the final order. In the absence of an approved Grid Plan, the ICC set ComEd’s forecast revenue requirements for 2024-2027 based on ComEd's approved year-end
2022 rate base. This results in a total cumulative revenue requirement increase of $501 million, a $986 million total revenue reduction from the requested cumulative revenue requirement increase but
remains subject to annual reconciliation in accordance with CEJA. The final order approved the process and formulas associated with the MRP reconciliation mechanisms. The ICC did not approve a
previously proposed phase-in of the ICC's approved year-over-year revenue increases, and it also denied ComEd's ability to earn a return on its pension asset.
On December 22, 2023, ComEd filed an application for rehearing on several findings in the final order including the use of the 2022 year-end rate base to establish forecast revenue requirements for 2024-
2027, ROE, pension asset return, and capital structure. On January 10, 2024, ComEd’s application for rehearing was denied on all issues except for the order’s use of the 2022 year-end rate base. On
January 31, 2024, the ICC granted ComEd's motion seeking additional clarification on the scope on rehearing, generally accepting ComEd's proposal and confirming that the rehearing will determine if the
forecasted year-end 2023 rate base should be used to set rates for 2024 through 2027 until a refiled Grid Plan is approved. A final rehearing order on that topic is statutorily required by early June 2024. On
January 10, 2024, ComEd also filed an appeal in the Illinois Appellate Court of the issues on which rehearing was denied, including but not limited to the allowed ROE and denial of a return on ComEd’s
pension asset. There is no deadline by when the appellate court must rule. On February 8, 2024, the ICC denied ComEd's request to provide clarification on other issues including the schedule for review
of the refiled Grid Plan. ComEd has completed and placed in service additional utility plant assets in 2023 and will continue to complete and place in service additional utility plant assets prior to the
approval of the new Grid Plan. There are still significant unknowns, but ComEd does not currently believe that it is probable that the initially uncollected depreciation or return on the recently completed
plant will ultimately be disallowed.
In January 2022, ComEd filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties in the event ComEd filed a MRP in January 2023. On
September 27, 2022, the ICC issued a final order approving seven performance metrics that provide symmetrical performance adjustments of 32 total basis points to ComEd’s rate of return on common
equity based on the extent to which ComEd achieves the annual performance goals. On November 10, 2022, the ICC granted ComEd's application for rehearing, in part. On April 5, 2023, the ICC issued its
final order on rehearing for the performance and tracking metrics proceeding, in which the ICC declined to adopt ComEd's proposed modifications to the reliability and peak load reduction performance
metrics. Efforts are underway to implement the performance metrics, which took effect on January 1, 2024. ComEd will make its initial filing in 2025 to assess performance achieved under the metrics in
2024, and to determine any ROE adjustment, which would take effect in 2026.
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Carbon Mitigation Credit
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
CEJA establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity. ComEd is required to purchase CMCs from
participating nuclear-powered generating facilities between June 1, 2022 and May 31, 2027. The price to be paid for each CMC was established through a competitive bidding process that included
consumer-protection measures that capped the maximum acceptable bid amount and a formula that reduces CMC prices by an energy price index, the base residual auction capacity price in the ComEd
zone of PJM, and the monetized value of any federal tax credit or other subsidy if applicable. The consumer protection measures contained in CEJA will result in net payments to ComEd ratepayers if the
energy index, the capacity price and applicable federal tax credits or subsidy exceed the CMC contract price. In the June 2022 billing period. ComEd began issuing credits to its retail customers under its
new CMC rider. A regulatory asset is recorded for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities. The balance as
of December 31, 2023 is $673 million.
Under CEJA, the costs of procuring CMCs, including carrying costs, are recovered through a rider, the Rider Carbon-Free Resource Adjustment (Rider CFRA). As originally approved by the ICC, Rider
CFRA provides for an annual reconciliation and true-up to actual costs incurred or credits received by ComEd to purchase CMCs, with any difference to be credited to or collected from ComEd’s retail
customers in subsequent periods. The difference between the net payments to (or receivables from) ComEd ratepayers and the credits received by ComEd to purchase CMCs is recorded to Purchased
power expense with an offset to the regulatory asset (or regulatory liability). On December 21, 2022, ComEd filed an amendment to Rider CFRA proposing that it recover costs or provide credits faster
than the tariff allows, implement monthly reconciliations, and allow ComEd to adjust Rider CFRA rates based not only on anticipated differences but also past payments or credits, and implement monthly
reconciliations beginning with the June 2023 delivery period. The ICC approved the proposal on January 19, 2023. In addition, on March 24, 2023, ComEd submitted revisions to Rider CFRA which
clarified the methodology for calculating interest to be included in the annual reconciliation associated with the June 2022 through May 2023 delivery year. The ICC approved the proposal on April 20,
2023. On February 2, 2024, ComEd filed a petition with the ICC to initiate the reconciliation proceeding for the costs incurred in connection with the procurement of CMCs during the delivery year beginning
June 1, 2022 and extending through May 31, 2023.
Excess Deferred Income Taxes
The ICC initiated a docket to accelerate and fully credit to customers TCJA unprotected property-related EDIT no later than December 31, 2025. On July 7, 2022, the ICC issued a final order on the
schedule for the acceleration of EDIT amortization, adopting the proposal as submitted by several parties, including ComEd, ICC Staff, the Illinois Attorney General's Office, and the Citizens Utility Board.
EDIT amortization will be credited to customers through a new rider from January 1, 2023 through December 31, 2025.
Beneficial Electrification Plan
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
On March 23, 2023, the ICC issued its final order approving the beneficial electrification plan for ComEd. The ICC rejected ComEd's request to treat a large portion of beneficial electrification costs as a
regulatory asset and ordered ComEd to seek cost recovery through the multi-year rate plan filing for 2024 and 2025, and the final formula rate reconciliation docket for 2023, rather than through a separate
charge. The order also authorized an overall annual budget of $77 million per year for the three year plan period (2023 through 2025), with flexibility to roll forward unused funds to future years within the
same plan period. On April 18, 2023, ComEd filed an application for rehearing in the beneficial electrification plan docket. The Chicago Transit Authority and City of Chicago, jointly, and the Office of the
Illinois Attorney General (ILAG) also filed applications for rehearing. On April 27, 2023, ICC staff filed a motion for clarification, seeking clarification from the ICC on the precise budget described in the final
order. On May 8, 2023, the ICC denied all applications for rehearing, and entered an amendatory order regarding the annual beneficial electrification plan budgets. ComEd has been directed to use good
faith efforts to spend $77 million annually. ComEd subsequently filed its compliance filing in May 2023, detailing project related spending, clarifying the procedure that will be used to seek stakeholder
feedback related to beneficial electrification pilot programs, and including the timeline for tariff changes required to implement the programs. ComEd and the ILAG both filed appeals of the ICC’s interim
order that addressed the permissible scope of utility beneficial electrification programs outside of transportation and the rate impact cap. The ILAG also filed an appeal seeking reversal of portions of the
ICC’s final decision. The final order partly mooted ComEd’s appeal of the interim order and ComEd has decided not to pursue the other issues. As such, ComEd moved to voluntarily dismiss its appeal and
the appellate court granted that request. The ILAG consolidated their appeals. Any ruling on the appeals, even a negative ruling removing programs from the BE Plan or lowering the overall budget of the
BE Plan, will only impact forward-looking costs.
Energy Efficiency
CEJA extends ComEd’s current cumulative annual energy efficiency MWh savings goals through 2040, adds expanded electrification measures to those goals, increases low-income commitments and
adds a new performance adjustment to the energy efficiency formula rate. ComEd expects its annual spend to increase in 2023 through 2040 to achieve these energy efficiency MWh savings goals, which
will be deferred as a separate regulatory asset that will be recovered through the energy efficiency formula rate over the weighted average useful life, as approved by the ICC, of the related energy
efficiency measures.
Energy Efficiency Formula Rate (Exelon and ComEd). FEJA allows ComEd to defer energy efficiency costs (except for any voltage optimization costs which are recovered through the electric
distribution formula rate) as a separate regulatory asset that is recovered through the energy efficiency formula rate over the weighted average useful life, as approved by the ICC, of the related energy
efficiency measures. ComEd earns a return on the energy efficiency regulatory asset at a rate equal to its weighted average cost of capital, which is based on a year-end capital structure and calculated
using the same methodology applicable to ComEd’s electric distribution formula rate. Beginning January 1, 2018, the ROE that ComEd earns on its energy efficiency regulatory asset is subject to a
maximum downward or upward adjustment of 200 basis points if ComEd’s cumulative persisting annual MWh savings falls short of or exceeds specified percentage benchmarks of its annual incremental
savings goal. ComEd is required to file an update to its energy efficiency formula rate on or before June 1 each year, with resulting rates effective in January of the following year. The annual update is
based on projected current year energy efficiency costs, PJM capacity revenues, and the projected year-end regulatory asset balance less any related deferred income taxes (initial year revenue
requirement). The update also reconciles any differences between the revenue requirement in effect for the prior year and actual costs incurred from the year (annual reconciliation). The approved energy
efficiency formula rate also provides for revenue decoupling provisions similar to those in ComEd’s electric distribution formula rate.
st
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
During 2023, the ICC approved the following total increases in ComEd's requested energy efficiency revenue requirement:
Filing Date
May 26, 2023
$
Requested Revenue Requirement
Increase
Approved Revenue Requirement
Increase
(a)
Approved ROE
118
$
118
8.91 %
Approval Date
November 30, 2023
Rate Effective Date
January 1, 2024
_________
(a) ComEd's 2024 approved revenue requirement above reflects an increase of $71 million for the initial year revenue requirement for 2024 and a increase of $47 million related to the annual reconciliation for 2022. The
revenue requirement for 2024 provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 6.48% inclusive of an allowed ROE of 8.91%, reflecting the monthly
average yields for 30-year treasury bonds plus 580 basis points. The revenue requirement for the 2022 reconciliation year provides for a weighted average debt and equity return on the energy efficiency regulatory
asset and rate base of 7.47% inclusive of an allowed ROE of 10.89%, which includes an upward performance adjustment that increased the ROE. The performance adjustment can either increase or decrease the ROE
based upon the achievement of energy efficiency savings goals. See table below for ComEd's regulatory assets associated with its energy efficiency formula rate.
Maryland Regulatory Matters
Maryland Revenue Decoupling (Exelon, BGE, PHI, Pepco, and DPL). In 1998, the MDPSC approved natural gas monthly rate adjustments for BGE and in 2007, the MDPSC approved electric monthly
rate adjustments for BGE and BSAs for Pepco and DPL, all of which are decoupling mechanisms. As a result of the decoupling mechanisms, certain Operating revenues from electric and natural gas
distribution at BGE and Operating revenues from electric distribution at Pepco Maryland (see also District of Columbia Revenue Decoupling below for Pepco District of Columbia) and DPL are not impacted
by abnormal weather or usage per customer. For BGE, Pepco, and DPL, the decoupling mechanism eliminates the impacts of abnormal weather or customer usage by recognizing revenues based on an
authorized distribution amount per customer by customer class. Operating revenues from electric and natural gas distribution at BGE and Operating revenues from electric distribution at Pepco Maryland
and DPL are, however, impacted by changes in the number of customers.
Maryland Order Directing the Distribution of Energy Assistance Funds (Exelon, BGE, PHI, Pepco, and DPL). On June 15, 2021, the MDPSC issued an order authorizing the disbursal of funds to
utilities in accordance with Maryland COVID-19 relief legislation. Under this order, BGE, Pepco, and DPL received funds of $50 million, $12 million, and $8 million, respectively, in July 2021. The funds
have been used to reduce or eliminate certain qualifying past-due residential customer receivables.
EmPOWER Maryland Cost Recovery (Exelon, BGE, PHI, Pepco and DPL). On December 29, 2023, the MDPSC issued an order authorizing the next three-year program cycle for EmPOWER Maryland
and approved various proposals by the program administrators to implement new energy efficiency programs for the 2024-2026 program cycle, as well as continue operating core programs. Historically,
BGE, Pepco, and DPL deferred most of their energy efficiency program costs to a regulatory asset and either deferred most of their demand response program costs to a regulatory asset or capitalized
them. Beginning in 2024, BGE, Pepco, and DPL will begin deferring less energy efficiency and demand response program costs to a regulatory asset. Additionally, as part of the order, the MDPSC
directed BGE, Pepco, and DPL to extend the amortization of unamortized costs as of December 31, 2023 from 5 to 7 years to mitigate customer bill impacts.
District of Columbia Regulatory Matters
District of Columbia Revenue Decoupling (Exelon, PHI, and Pepco). In 2009, the DCPSC approved a BSA, which is a decoupling mechanism. As a result of the decoupling mechanism, Operating
revenues from electric distribution at Pepco District of Columbia (see also Maryland Revenue Decoupling above for Pepco Maryland) are not impacted by abnormal weather or usage per customer. The
decoupling mechanism eliminates the impacts of abnormal weather or customer usage by recognizing revenues based on an authorized distribution amount per customer by customer class. Operating
revenues from electric distribution at Pepco District of Columbia are, however, impacted by changes in the number of customers.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
New Jersey Regulatory Matters
Conservation Incentive Program (CIP) (Exelon, PHI, and ACE). On September 25, 2020, ACE filed an application with the NJBPU as was required seeking approval to implement a portfolio of energy
efficiency programs pursuant to New Jersey’s clean energy legislation. The filing included a request to implement a CIP that would eliminate the favorable and unfavorable impacts of weather and customer
usage patterns on distribution revenues for most customers. The CIP compares current distribution revenues by customer class to approved target revenues established in ACE’s most recent distribution
base rate case. The CIP is calculated annually and recovery is subject to certain conditions, including an earnings test and ceilings on customer rate increases.
On April 27, 2021, the NJBPU approved the settlement filed by ACE and the third parties to the proceeding. The approved settlement addresses all material aspects of ACE’s filing, including ACE’s ability
to implement the CIP prospectively effective July 1, 2021. As a result of this decoupling mechanism, operating revenues will no longer be impacted by abnormal weather or usage for most customers.
Starting in third quarter of 2021, ACE has recorded alternative revenue program revenues for its best estimate of the distribution revenue impacts resulting from future changes in CIP rates that it believes
are probable of approval by the NJBPU in accordance with this mechanism.
Termination of Energy Procurement Provisions of PPAs (Exelon, PHI, and ACE). On December 22, 2021, ACE filed with the NJBPU a petition to terminate the provisions in the PPAs to purchase
electricity from two coal-powered generation facilities located in the state of New Jersey. The petition was approved by the NJBPU on March 23, 2022. Upon closing of the transaction on March 31, 2022,
ACE recognized a liability of $203 million for the contract termination fee, which is to be paid by the end of 2024, and recognized a corresponding regulatory asset of $203 million.
As of December 31, 2023, the $49 million liability for the contract termination fee is included in Other current liabilities in Exelon's Consolidated Balance Sheet and PPA termination obligation in PHI's and
ACE's Consolidated Balance Sheets. For the year ended December 31, 2023 and 2022, ACE has paid $88 million and $66 million of the liability, which is recorded in Changes in Other assets and liabilities
in Exelon's, PHI's, and ACE's Consolidated Statements of Cash Flows.
ACE Infrastructure Investment Program Filings (Exelon, PHI, and ACE). On February 28, 2018, ACE filed with the NJBPU the Registrants' IIP proposing to seek recovery of a series of investments
through a new rider mechanism, totaling $338 million, between 2019-2022 to provide safe and reliable service for its customers. The IIP will allow for more timely recovery of investments made to
modernize and enhance ACE’s electric system. On April 15, 2019, ACE entered into a settlement agreement with other parties, which allows for a recovery totaling $96 million of reliability related capital
investments from July 1, 2019 through June 30, 2023. On April 18, 2019, the NJBPU approved the settlement agreement.
On October 31, 2022, ACE filed with the NJBPU a second IIP, called “Powering the Future”, proposing to seek recovery through a new component of ACE’s rider mechanism, totaling $379 million, over the
four-year period of July 1, 2023, to June 30, 2027. The new IIP will allow ACE to invest in projects that are designed to enhance the reliability, resiliency, and safety of the service ACE provides to its
customers. On June 15, 2023, ACE entered into a settlement agreement with other parties, which allows for a recovery totaling $93 million of reliability related capital investments from July 1, 2023,
through June 30, 2027. ACE will have the option of seeking approval from the NJBPU to extend the end date of the IIP beyond June 30, 2027, if ACE determines an extension is necessary. On June 29,
2023, the NJBPU adopted the settlement agreement and issued an order approving the program.
Advanced Metering Infrastructure Filing (Exelon, PHI, and ACE). On August 26, 2020, ACE filed an application with the NJBPU as was required seeking approval to deploy a smart energy network in
alignment with New Jersey’s Energy Master Plan and Clean Energy Act. The proposal consisted of estimated costs totaling $220 million with deployment taking place over a 3-year implementation period
from approximately 2021 to 2024 that involves the installation of an integrated system of smart meters for all customers accompanied by the requisite communications facilities and data management
systems.
On July 14, 2021, the NJBPU approved the settlement filed by ACE and the third parties to the proceeding. The approved settlement addresses all material aspects of ACE's smart energy network
deployment plan, including
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(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
cost recovery of the investment costs, incremental O&M expenses, and the unrecovered balance of existing infrastructure through future distribution rates.
New Jersey Clean Energy Legislation (Exelon, PHI, and ACE). On May 23, 2018, New Jersey enacted legislation that established and modified New Jersey’s clean energy and energy efficiency
programs and solar and RPS. On the same day, New Jersey enacted legislation that established a ZEC program that provides compensation for nuclear plants that demonstrate to the NJBPU that they
meet certain requirements. Under the legislation, the NJBPU will issue ZECs to the qualifying nuclear power plants and the electric distribution utilities in New Jersey, including ACE, will be required to
purchase those ZECs. ACE began collecting from retail distribution customers, through a non-bypassable charge, all costs associated with the procurement of the ZECs effective April 18, 2019.
Other Federal Regulatory Matters
FERC Audit (Exelon and ComEd). The Utility Registrants are subject to periodic audits and investigations by FERC. FERC’s Division of Audits and Accounting initiated a nonpublic audit of ComEd in
April 2021 evaluating ComEd’s compliance with (1) approved terms, rates and conditions of its federally regulated service; (2) accounting requirements of the Uniform System of Accounts; (3) reporting
requirements of the FERC Form 1; and (4) the requirements for record retention. The audit period extends back to January 1, 2017. During the first quarter of 2023, ComEd was provided with information
from FERC about several potential findings, including ComEd's methodology regarding the allocation of certain overhead costs to capital under FERC regulations. Based on the preliminary findings and
discussions with FERC staff, ComEd determined that a loss was probable and recorded a regulatory liability to reflect its best estimate of that loss in the first quarter of 2023.
On July 27, 2023, FERC issued a final audit report which included, among other things, findings and recommendations related to ComEd's methodology regarding the allocation of certain overhead costs
to capitalized construction costs under FERC regulations, including a suggestion that refunds may be due to customers for amounts collected in previous years. On August 28, 2023, ComEd filed a formal
notice of the issues it will contest. On December 14, 2023, FERC appointed a settlement judge for the contested overhead allocation findings. The final outcome and resolution of any contested audit issues
as well as a reasonable estimate of potential future losses cannot be accurately estimated at this stage; however, the final resolution of these matters could result in recognition of future losses, above the
amounts currently accrued, that could be material to the Exelon and ComEd financial statements.
Regulatory Assets and Liabilities
Regulatory assets represent incurred costs that have been deferred because of their probable future recovery from customers through regulated rates. Regulatory liabilities represent the excess recovery
of costs or accrued credits that have been deferred because it is probable such amounts will be returned to customers through future regulated rates or represent billings in advance of expenditures for
approved regulatory programs.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
The following tables provide information about the regulatory assets and liabilities of the Registrants at December 31, 2023 and 2022:
December 31, 2023
Regulatory assets
AMI programs - deployment costs
AMI programs - legacy meters
Asset retirement obligations
Carbon mitigation credit
COVID-19
DC PLUG charge
Deferred income taxes
Deferred storm costs
Electric distribution formula rate annual reconciliations
Electric distribution formula rate significant one-time events
Electric energy and natural gas costs
Energy efficiency and demand response programs
Energy efficiency costs
Fair value of long-term debt
Fair value of PHI's unamortized energy contracts
MGP remediation costs
Multi-year plan reconciliations
Pension and OPEB
Pension and OPEB - merger related
Removal costs
Renewable energy
Transmission formula rate annual reconciliations
Under-recovered credit loss expense
Under-recovered revenue decoupling
Universal service fund charge under-recovery - Electric
Zero emission credit
Other
Total regulatory assets
Less: current portion
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
109 $
— $
— $
127
159
673
41
3
759
114
787
89
98
631
1,691
486
35
315
112
2,254
637
827
134
75
112
176
59
58
352
10,913
2,215
28
104
673
11
—
—
—
787
89
—
—
1,691
—
—
286
—
—
—
—
134
—
78
—
—
58
190
4,129
1,335
—
22
—
11
—
748
—
—
—
1
23
—
—
—
15
—
—
—
—
—
9
—
—
59
—
32
920
127
$
49
12
23
—
6
—
—
84
—
—
25
316
—
—
—
14
112
—
—
219
—
5
—
64
—
—
27
956
229
$
60
87
10
—
13
3
11
30
—
—
72
292
—
385
35
—
—
—
—
608
—
61
34
112
—
—
111
1,924
337
$
18
41
6
—
10
3
11
9
—
—
11
187
—
—
—
—
—
—
—
137
—
15
—
100
—
—
52
600
150
$
17
14
2
—
3
—
—
2
—
—
2
73
—
—
—
—
—
—
—
118
—
22
—
—
—
—
19
272
54
Total noncurrent regulatory assets
$
8,698 $
2,794 $
793 $
727 $
1,587 $
450 $
218 $
25
32
2
—
—
—
—
19
—
—
59
32
—
—
—
—
—
—
—
354
—
24
34
12
—
—
15
608
125
483
178
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
December 31, 2023
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Regulatory liabilities
Decommissioning the Regulatory Agreement Units
Dedicated facilities charge
Deferred income taxes
Electric energy and natural gas costs
Energy efficiency and demand response programs
Multi-year plan reconciliations
Over-recovered revenue decoupling
Removal costs
Renewable portfolio standards costs
Other
Total regulatory liabilities
Less: current portion
$
3,232 $
2,954 $
278 $
— $
— $
— $
— $
129
3,284
121
1
23
2
1,845
1,102
226
9,965
389
—
1,900
4
—
—
—
1,701
1,102
23
7,684
191
—
—
93
1
—
—
—
—
34
406
92
129
634
—
—
—
—
28
—
9
800
27
—
750
24
—
23
2
116
—
60
975
71
—
338
9
—
16
—
20
—
14
397
15
—
274
15
—
7
2
96
—
21
415
50
Total noncurrent regulatory liabilities
$
9,576 $
7,493 $
314 $
773 $
904 $
382 $
365 $
—
—
138
—
—
—
—
—
—
8
146
6
140
179
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
December 31, 2022
Regulatory assets
AMI programs - deployment costs
AMI programs - legacy meters
Asset retirement obligations
Carbon mitigation credit
COVID-19
DC PLUG charge
Deferred income taxes
Deferred storm costs
Electric distribution formula rate annual reconciliations
Electric distribution formula rate significant one-time events
Electric energy and natural gas costs
Energy efficiency and demand response programs
Energy efficiency costs
Fair value of long-term debt
Fair value of PHI's unamortized energy contracts
MGP remediation costs
Pension and OPEB
Pension and OPEB - merger related
Removal costs
Renewable energy
Transmission formula rate annual reconciliations
Under-recovered credit loss expense
Under-recovered revenue decoupling
Universal service fund charge under-recovery - Electric
Other
Total regulatory assets
Less: current portion
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Note 3 — Regulatory Matters
$
122 $
160
— $
48
— $
—
151
843
58
37
606
90
271
115
241
560
1,434
521
44
318
1,867
769
782
85
37
71
106
19
371
9,678
1,641
99
843
20
—
—
—
271
115
—
—
1,434
—
—
293
—
—
—
85
—
38
—
—
196
3,442
775
22
—
17
—
595
—
—
—
15
—
—
—
—
13
—
—
—
—
16
—
—
19
35
732
80
$
69
20
21
—
8
—
—
55
—
—
25
286
—
—
—
12
—
—
171
—
—
—
8
—
29
704
177
$
53
92
9
—
13
37
11
35
—
—
201
274
—
414
44
—
—
—
611
—
21
33
98
—
119
2,065
455
$
25
53
6
—
10
37
11
2
—
—
41
187
—
—
—
—
—
—
144
—
3
—
98
—
55
672
235
$
22
17
2
—
3
—
—
2
—
—
26
74
—
—
—
—
—
—
109
—
5
—
—
—
22
282
80
6
22
1
—
—
—
—
31
—
—
134
13
—
—
—
—
—
—
359
—
13
33
—
—
12
624
130
494
Total noncurrent regulatory assets
$
8,037 $
2,667 $
652 $
527 $
1,610 $
437 $
202 $
180
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
December 31, 2022
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Regulatory liabilities
Decommissioning the Regulatory Agreement Units
Dedicated facilities charge
Deferred income taxes
Electric energy and natural gas costs
Energy efficiency and demand response programs
Multi-year plan reconciliations
Over-recovered revenue decoupling
Removal costs
Renewable portfolio standards costs
Stranded costs
Transmission formula rate annual reconciliations
Other
Total regulatory liabilities
Less: current portion
$
2,897 $
110
2,660 $
—
237 $
—
3,546
87
15
14
19
1,750
810
9
31
261
9,549
437
2,010
11
—
—
—
1,604
810
—
3
41
7,139
226
—
65
15
—
—
—
—
—
—
28
345
75
— $
110
682
4
—
—
4
35
—
—
18
10
863
47
— $
—
— $
—
— $
—
854
7
—
14
15
111
—
9
10
67
1,087
76
402
—
—
14
—
20
—
—
9
16
461
6
304
7
—
—
6
91
—
—
1
15
424
44
Total noncurrent regulatory liabilities
$
9,112 $
6,913 $
270 $
816 $
1,011 $
455 $
380 $
—
—
148
—
—
—
9
—
—
9
—
16
182
26
156
Descriptions of the regulatory assets and liabilities included in the tables above are summarized below, including their recovery and amortization periods.
Line Item
Description
End Date of Remaining Recovery/Refund Period
Return
AMI programs - deployment costs
Represents installation and ongoing incremental costs of new smart meters,
including implementation costs at Pepco and DPL of dynamic pricing for
energy usage resulting from smart meters.
AMI programs - legacy meters
Represents early retirement costs of legacy meters.
BGE - 2026
Pepco - 2029
DPL - 2030
ACE - 2029
ComEd - 2028
BGE - 2026
Pepco - 2029
DPL - 2030
ACE - To be determined in next
distribution rate case filed with NJBPU.
BGE, Pepco, DPL - Yes
ACE - Yes, on incremental costs of new
smart meters
ComEd, Pepco (District of Columbia),
DPL (Delaware), ACE - Yes
BGE, Pepco (Maryland), DPL (Maryland)
- No
Asset retirement obligations
Represents future legally required removal costs associated with existing
AROs.
Over the life of the related assets.
Yes, once the removal activities have
been performed
181
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Line Item
Carbon mitigation credit
Description
Represents CMC procurement costs and credits as well as reasonable costs
ComEd has incurred to implement and comply with the CMC procurement
process.
COVID-19
Represents incremental credit losses and direct costs related to COVID-19
incurred primarily in 2020 at the Utility Registrants, partially offset by a
decrease in travel costs at BGE, Pepco and DPL. Direct costs consisted
primarily of costs to acquire personal protective equipment, costs for cleaning
supplies and services, and costs to hire healthcare professionals to monitor
the health of employees.
Note 3 — Regulatory Matters
End Date of Remaining Recovery/Refund Period
Return
No
2024
ComEd - 2025
BGE - 2028
PECO - 2024
Pepco (District of Columbia) - $8 million
to be determined in pending multi-year
plan filed with DCPSC.
ComEd, BGE, and DPL (Maryland) -
Yes
PECO, Pepco, and DPL (Delaware) -
No
Pepco (Maryland) - $2 million to be
determined in pending multi-year plan
filed with MDPSC.
DPL (Maryland) - $1 million - 2027
DPL (Delaware) - $2 million to be
determined in pending distribution rate
case filed with DEPSC.
DC PLUG charge
Decommissioning the Regulatory Units
Represents costs associated with DC PLUG, which is a projected six-year,
$500 million project to place underground some of the District of Columbia’s
most outage-prone power lines with $250 million of the project costs funded
by Pepco and $250 million funded by the District of Columbia. Rates for the
DC PLUG initiative went into effect on February 7, 2018.
Represents estimated excess funds at the end of decommissioning the
Regulatory Agreement Units. See below regarding Decommissioning the
Regulatory Agreement Units for additional information.
2024
Portion of asset funded by Pepco-Yes
Not currently being refunded.
No
182
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Line Item
Description
End Date of Remaining Recovery/Refund Period
Return
Dedicated facilities charge
Represents the timing difference between the recovery of certain
transmission-related assets and their depreciable life.
Deferred income taxes
Represents deferred income taxes that are recoverable or refundable through
customer rates, primarily associated with accelerated depreciation, the equity
component of AFUDC, and the effects of income tax rate changes, including
those resulting from the TCJA.
Depreciable life of the related assets.
Yes
Amounts are recoverable over the period
in which the related deferred income taxes
reverse, which is generally based on the
expected life of the underlying assets. For
TCJA, generally refunded over the
remaining depreciable life of the underlying
assets, except in certain jurisdictions
where the commissions have approved a
shorter refund period for certain assets not
subject to IRS normalization rules.
Pepco - $1 million - 2024; $8 million to be
determined in a future multi-year plan filed
with MDPSC.
No
Deferred storm costs
For Pepco, DPL, ACE, and BGE, amounts represent total incremental storm
restoration costs incurred due to major storm events recoverable from
customers in the Maryland and New Jersey jurisdictions.
DPL - 2027
ACE - 2026
Pepco, DPL, BGE - Yes
ACE - No
Electric distribution formula rate annual
reconciliations
Electric distribution formula rate significant
one-time events
Represents under/(over)-recoveries related to electric distribution service
costs recoverable through ComEd's performance-based formula rate, which is
st
updated annually with rates effective on January 1 .
Represents deferred distribution service costs related to ComEd's significant
one-time events (e.g., storm costs), which are recovered over 5 years from
date of the event.
2025
2027
Yes
Yes
BGE - $57 million - 2028; $27 million to be
determined in the next multi-year plan filed
with MDPSC.
183
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Line Item
Description
End Date of Remaining Recovery/Refund Period
Return
Electric energy and natural gas costs
Represents under (over)-recoveries related to energy and gas supply related
costs recoverable (refundable) under approved rate riders.
2025
Energy efficiency and demand
response programs
Includes under (over)-recoveries of costs incurred related to energy efficiency
programs and demand response programs and recoverable costs associated
with customer direct load control and energy efficiency and conservation
programs that are being recovered from customers.
PECO - 2025
BGE - 2030
Pepco, DPL - 2030
ACE - 2032
Energy efficiency costs
Represents ComEd's costs recovered through the energy efficiency formula
rate tariff and the reconciliation of the difference of the revenue requirement in
effect for the prior year and the revenue requirement based on actual prior
year costs. Deferred energy efficiency costs are recovered over the weighted
average useful life of the related energy measure.
2035
DPL (Delaware), ACE - Yes
ComEd, PECO, BGE, Pepco, DPL
(Maryland) - No
BGE, Pepco (Maryland), DPL (Maryland)
- See above regarding EmPOWER
Maryland Cost Recovery for additional
information
DPL (Delaware), Pepco (District of
Columbia) - No
ACE - Yes
PECO - Yes on capital investment
recovered through this mechanism
Yes
184
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
End Date of Remaining Recovery/Refund Period
Return
Line Item
Fair value of long-term debt
Description
Represents the difference between the carrying value and fair value of long-
term debt of BGE, recorded at Exelon, and PHI of $101 million and
$385 million, respectively, as of December 31, 2023, and $107 million and
$414 million, respectively, as of December 31, 2022, as of the 2016 PHI and
2012 Constellation merger dates.
Exelon - 2036
PHI - 2045
Fair value of PHI’s unamortized energy
contracts
Represents the regulatory assets recorded at Exelon and PHI offsetting the
fair value adjustment related to Pepco's, DPL's, and ACE's electricity and
natural gas energy supply contracts recorded at PHI as of the PHI merger
date.
2036
MGP remediation costs
Represents environmental remediation costs for MGP sites recorded at
ComEd, PECO, and BGE.
Multi-year plan reconciliations
Represents under (over)-recoveries related to electric and gas distribution
multi-year plans.
ComEd and PECO - Over the expected
remediation period. See Note 18 —
Commitments and Contingencies for
additional information.
BGE - 10 years from when the remediation
spend occurs.
BGE - $60 million related to 2021 and
2022 reconciliations - 2025. $52 million
related to 2023 reconciliations - to be
determined in a future MDPSC order.
Pepco (District of Columbia) - $16 million
which has been reviewed by the DCPSC
and will be finalized upon receipt of the
DCPSC order in the pending multi-year
plan filing.
DPL (Maryland) - $7 million to be
determined in next multi-year plan filed
with MDPSC.
185
No
No
ComEd and PECO - No
BGE - Yes
BGE - No
Pepco (District of Columbia) - Yes
DPL (Maryland) - Yes
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Line Item
Description
Pension and OPEB
Primarily reflects the Utility Registrants' and PHI's portion of deferred costs,
including unamortized actuarial losses (gains) and prior service costs (credits),
associated with Exelon's pension and OPEB plans, which are recovered
through customer rates once amortized through net periodic benefit cost. Also,
includes the Utility Registrants' and PHI's non–service cost components
capitalized in Property, plant and equipment, net on their Consolidated Balance
Sheets.
End Date of Remaining Recovery/Refund Period
The deferred costs are amortized over the
plan participants' average remaining service
periods subject to applicable pension and
OPEB cost recognition policies. See Note
14 — Retirement Benefits for additional
information. The capitalized non–service
cost components are amortized over the
lives of the underlying assets.
No
Note 3 — Regulatory Matters
Return
186
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
End Date of Remaining Recovery/Refund Period
Return
Line Item
Pension and OPEB - merger related
Removal costs
Renewable energy
Description
The deferred costs established at the date of the 2012 Constellation and 2016
PHI mergers are amortized over the plan participants' average remaining
service periods subject to applicable pension and OPEB cost recognition
policies. The costs are recovered through customer rates once amortized
through net periodic benefit cost. See Note 14 — Retirement Benefits for
additional information. The capitalized non–service cost components are
amortized over the lives of the underlying assets.
For BGE, Pepco, DPL, and ACE, the regulatory asset represents costs incurred
to remove property, plant and equipment in excess of amounts received from
customers through depreciation rates. For ComEd, BGE, Pepco, and DPL, the
regulatory liability represents amounts received from customers through
depreciation rates to cover the future non–legally required cost to remove
property, plant and equipment, which reduces rate base for ratemaking
purposes.
Represents the change in fair value of ComEd‘s 20-year floating-to-fixed long-
term renewable energy swap contracts.
Renewable portfolio standards costs
Represents an overcollection of funds from both ComEd customers and
alternative retail electricity suppliers to be spent on future renewable energy
procurements.
Stranded costs
Represents overcollection of a customer surcharge collected by ACE to fund
principal and interest payments on Transition Bonds of ACE Transition Funding
that securitized such costs.
2023
187
Legacy BGE - 2038
Legacy PHI - 2032
BGE, Pepco, DPL, and ACE - Asset is
generally recovered over the life of the
underlying assets.
ComEd, BGE, Pepco, and DPL - Liability is
reduced as costs are incurred.
2032
$1,033 million to be determined in pending
ICC annual reconciliation for the
Renewable Energy Adjustment rider.
$69 million to be determined based on the
LTRRPP developed by the IPA.
No
Yes
No
No
No
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Line Item
Description
End Date of Remaining Recovery/Refund Period
Return
Transmission formula rate annual
reconciliations
Represents under (over)-recoveries related to transmission service costs
recoverable through the Utility Registrants’ FERC formula rates, which are
st
updated annually with rates effective each June 1 .
2025
Yes
Under (over) -recovered revenue
decoupling
Represents electric and / or gas distribution costs recoverable from or
refundable to customers under decoupling mechanisms.
Under-recovered credit loss expense
Universal service fund charge under-
recovery - Electric
For ComEd and ACE, amounts represent the difference between annual
credit loss expense and revenues collected in rates through ICC and NJBPU-
approved riders. The difference between net credit loss expense and
revenues collected through the rider each calendar year for ComEd is
recovered over a twelve-month period beginning in June of the following
calendar year. ACE intends to recover from June through May of each
respective year, subject to approval of the NJBPU.
Represents under-recovery of electric supply and distribution revenue
shortfalls net of base rate recovery related to PECO’s Universal Service
programs, which are designed to provide affordable bills for electric service to
low-income, residential customers based on individual household needs.
Zero emission credit
Represents ZEC procurement costs and any reasonable costs ComEd has
incurred to implement and comply with the ZEC procurement process.
Decommissioning the Regulatory Agreement Units
BGE - 2025
Pepco (Maryland) - $10 million - 2024
Pepco (District of Columbia) - $90 million
to be determined in the next multi-year
plan filed with DCPSC.
BGE, Pepco, DPL, ACE - No
DPL - 2024
ACE - 2024
ComEd - 2024
ACE - To be determined in pending
Societal Benefits Rider filing with NJBPU.
No
PECO - To be determined in the annual
adjustment and reconciliation as approved
by the PAPUC.
No
ComEd - Over 9 months starting with the
September billing period and ending with
the following May billing period.
ComEd - No
The regulatory agreements with the ICC and PAPUC dictate obligations related to the shortfall or excess of NDT funds necessary for decommissioning the former ComEd units on a unit-by-unit basis and
the former PECO units in total.
For the former PECO units, given the symmetric settlement provisions that allow for continued recovery of decommissioning costs from PECO customers in the event of a shortfall and the obligation for
Constellation to ultimately return excess funds to PECO customers (on an aggregate basis for all seven units), decommissioning-related activities prior to separation on February 1, 2022 were generally
offset in Exelon’s Consolidated
188
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 3 — Regulatory Matters
Statements of Operations and Comprehensive Income with an offsetting adjustment to the regulatory liabilities or regulatory assets and an equal noncurrent affiliate receivable from or payable to
Generation at PECO. Following the separation, decommissioning-related activities result in an adjustment to the Receivable related to Regulatory Agreement Units and an equal adjustment to the
regulatory liabilities or regulatory assets at PECO.
For the former ComEd units, given no further recovery from ComEd customers is permitted and Constellation retains an obligation to ultimately return excess funds to ComEd customers (on a unit-by-unit
basis), to the extent excess funds are expected for each unit, decommissioning-related activities prior to separation on February 1, 2022 were offset in the Consolidated Statements of Operations and
Comprehensive Income with an offsetting adjustment to regulatory liabilities and noncurrent affiliate receivable from Generation at ComEd. Following the separation, decommissioning-related activities
result in an adjustment to the Receivable related to Regulatory Agreement Units and an equal adjustment to the regulatory liabilities at ComEd. However, given the asymmetric settlement provision that
does not allow for continued recovery from ComEd customers in the event of a shortfall, recognition of a regulatory asset at ComEd is not permissible.
Capitalized Ratemaking Amounts Not Recognized
The following table presents authorized amounts capitalized for ratemaking purposes related to earnings on shareholders’ investment that are not recognized for financial reporting purposes in the
Registrants' Consolidated Balance Sheets. These amounts will be recognized as revenues in the related Consolidated Statements of Operations and Comprehensive Income in the periods they are
billable to the Utility Registrants' customers. PECO had no related amounts at December 31, 2023 and December 31, 2022
December 31, 2023
December 31, 2022
Exelon
ComEd
(a)
BGE
(b)
PHI
Pepco
(c)
DPL
(c)
ACE
(d)
$
110 $
57
$
32
8
$
33
28
$
45
21
$
34
18
$
1
2
10
1
__________
(a) Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its energy efficiency and electric distribution formula rate regulatory assets.
(b) BGE's amount capitalized for ratemaking purposes primarily relates to earnings on shareholders' investment on their AMI programs and on investments in rate base included in the multi-year plan reconciliations.
(c) Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholders' investment on their respective AMI programs and Energy efficiency and demand response programs, and
for Pepco District of Columbia revenue decoupling program. The earnings on energy efficiency are on Pepco District of Columbia and DPL Delaware programs only.
(d) ACE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholders' investment on AMI programs.
4. Revenue from Contracts with Customers (All Registrants)
The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that the entities expect to be entitled to in exchange for those goods
or services. The primary sources of revenue include regulated electric and gas tariff sales, distribution, and transmission services. The performance obligations, revenue recognition, and payment terms
associated with these sources of revenue are further discussed in the table below. There are no significant financing components for these sources of revenue and no variable consideration.
Unless otherwise noted, for each of the significant revenue categories and related performance obligations described below, the Registrants have the right to consideration from the customer in an amount
that corresponds directly with the value transferred to the customer for the performance completed to date. Therefore, the Registrants generally recognize revenue in the amount for which they have the
right to invoice the customer. As a result, there are generally no significant judgments used in determining or allocating the transaction price.
189
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 4 — Revenue from Contracts with Customers
Revenue Source
Regulated Electric and Gas Tariff
Sales
Regulated Transmission Services
Description
Sales of electricity and electricity distribution
services (the Utility Registrants) and natural gas
and gas distribution services (PECO, BGE, and
DPL) to residential, commercial, industrial, and
governmental customers through regulated tariff
rates approved by state regulatory commissions.
The Utility Registrants provide open access to
their transmission facilities to PJM, which directs
and controls the operation of these transmission
facilities and accordingly compensates the Utility
Registrants pursuant to filed tariffs at cost-based
rates approved by FERC.
Performance Obligation
Timing of Revenue Recognition
Payment Terms
Delivery of electricity and/or natural gas.
Various including (i) Network Integration
Transmission Services (NITS), (ii)
scheduling, system control and dispatch
services, and (iii) access to the wholesale
grid.
Over time (each day) as the electricity
and/or natural gas is delivered to
customers. Tariff sales are generally
considered daily contracts as
customers can discontinue service at
any time.
(a)
Within the month following
delivery of the electricity or
natural gas to the customer.
Over time utilizing output methods to
measure progress towards
completion.
(b)
Paid weekly by PJM.
__________
(a) Electric and natural gas utility customers have the choice to purchase electricity or natural gas from competitive electric generation and natural gas suppliers. While the Utility Registrants are required under state
legislation to bill their customers for the supply and distribution of electricity and/or natural gas, they recognize revenue related only to the distribution services when customers purchase their electricity or natural gas
from competitive suppliers.
(b) Passage of time is used for NITS and access to the wholesale grid and MWhs of energy transported over the wholesale grid is used for scheduling, system control and dispatch services.
The Utility Registrants do not incur any material costs to obtain or fulfill contracts with customers.
Contract Liabilities
The Registrants record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. The Registrants record contract liabilities in Other current liabilities
and Other noncurrent liabilities in the Registrants' Consolidated Balance Sheets.
On July 1, 2020, Pepco, DPL, and ACE each entered into a collaborative arrangement ("Agreement") with an unrelated owner and manager of communication infrastructure (the "Buyer"). Under this
arrangement, Pepco, DPL, and ACE sold a 60% undivided interest in their respective portfolios of transmission tower attachment agreements with telecommunications companies to the Buyer, in addition
to transitioning management of the day-to-day operations of the jointly-owned agreements to the Buyer for 35 years, while retaining the safe and reliable operation of its utility assets. In return, Pepco, DPL,
and ACE will provide the Buyer limited access on the portion of the towers where the equipment resides for the purposes of managing the agreements for the benefit of Pepco, DPL, ACE, and the Buyer.
Pursuant to the Agreement, Pepco, DPL, and ACE have the option ("Payment Option"), but not obligation, to sell two additional 10% undivided interests in the tower attachment agreements to the Buyer
for specified consideration. In addition, for an initial period of three years and two, two-year extensions that are subject to certain conditions, the Buyer has the exclusive right to enter into new agreements
with telecommunications companies and to receive a specified undivided percentage interest in those new agreements as set forth in the Agreement. Pepco, DPL, and ACE received cash and recorded
contract liabilities as of July 1, 2020. The revenue attributable to this arrangement will be recognized as Electric operating revenues over the 35 years under the Agreement.
190
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 4 — Revenue from Contracts with Customers
During the fourth quarter of 2023, Pepco, DPL, and ACE entered into an amendment to the Agreement (“Amendment”) to modify the terms of the Payment Option and the conditions to exercise the
exclusive right extensions. Concurrently, Pepco, DPL and ACE exercised both Payment Options which also triggered the extension of the exclusive right period until 2027. The Amendment and executed
Payment Options represent a contract modification that is accounted for prospectively in accordance with authoritative guidance. Pepco, DPL and ACE received cash and recorded an increase to the
contract liabilities as of December 31, 2023 as shown in the table below. The revenue will be recognized as Electric operating revenues over the remaining term of the Agreement (approximately 31
years).
The following table provides a rollforward of the contract liabilities reflected in Exelon's, PHI's, Pepco's, DPL's, and ACE'S Consolidated Balance Sheets. As of December 31, 2023, 2022, and 2021,
ComEd's, PECO's, and BGE's contract liabilities were not material.
Balance at December 31, 2021
Revenues recognized
Balance at December 31, 2022
Consideration received
Revenues recognized
Balance at December 31, 2023
Exelon
(a)
PHI
(a)
Pepco
(a)
DPL
(a)
ACE
(a)
$
$
$
$
$
109
(8)
101
39
(7)
$
$
109
(8)
101
39
(7)
$
$
87
(6)
81
31
(5)
133
$
133
$
107
$
11
(1)
10
4
(1)
13
$
$
$
11
(1)
10
4
(1)
13
__________
(a) Revenues recognized in the years ended December 31, 2023 and 2022, were included in the contract liabilities at December 31, 2022 and 2021, respectively.
Transaction Price Allocated to Remaining Performance Obligations
The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2023. This
disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one
month to several years.
This disclosure excludes the Utility Registrants' gas and electric tariff sales contracts and transmission revenue contracts as they generally have an original expected duration of one year or less and,
therefore, do not contain any future, unsatisfied performance obligations to be included in this disclosure.
Year
2024
2025
2026
2027
2028 and thereafter
Total
Revenue Disaggregation
Exelon
PHI
Pepco
DPL
ACE
$
$
8 $
6
6
5
108
133 $
8 $
6
6
5
108
133 $
6 $
5
5
5
86
107 $
1 $
—
—
—
12
13
$
1
1
1
—
10
13
The Registrants disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by
economic factors. See Note 5 — Segment Information for the presentation of the Registrant's revenue disaggregation.
5. Segment Information (All Registrants)
Operating segments for each of the Registrants are determined based on information used by the CODMs in deciding how to evaluate performance and allocate resources at each of the Registrants.
191
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 5 — Segment Information
Exelon has six reportable segments, which include ComEd, PECO, BGE, and PHI's three reportable segments consisting of Pepco, DPL, and ACE. ComEd, PECO, BGE, Pepco, DPL, and ACE each
represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon, ComEd, PECO, BGE, Pepco, DPL, and ACE's CODMs evaluate the
performance of and allocate resources to the segments based on net income.
The separation of Constellation Energy Corporation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, results of operations are presented as
discontinued operations and have been excluded from continuing operations for all periods presented. Furthermore, the reportable segment information related to the discontinued operations has been
excluded from the tables presented below. See Note 2 — Discontinued Operations for additional information.
An analysis and reconciliation of the Registrants' reportable segment information to the respective information in the consolidated financial statements for the years ended December 31, 2023, 2022, and
2021 is as follows:
192
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
ComEd
PECO
BGE
PHI
Other
(a)
Intersegment
Eliminations
Exelon
Note 5 — Segment Information
Operating revenues :
(b)
2023
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
2022
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
2021
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
Intersegment revenues :
(c)
2023
2022
2021
Depreciation and amortization:
2023
2022
2021
Operating expenses:
2023
2022
2021
Interest expense, net:
2023
2022
2021
Income taxes:
2023
2022
2021
Net income (loss) from continuing operations:
2023
2022
2021
Capital expenditures:
2023
2022
2021
Total assets:
2023
2022
$
$
$
$
$
$
$
$
$
$
$
$
$
$
7,844
$
3,202
$
3,109
$
5,812
$
—
—
7,844
5,761
—
—
5,761
6,406
—
—
6,406
16
16
41
$
$
$
$
$
$
1,403
$
1,323
1,205
692
—
3,894
3,165
738
—
3,903
2,659
539
—
3,198
9
7
21
397
373
348
$
$
$
$
$
$
$
918
—
4,027
2,871
1,024
—
3,895
2,505
836
—
3,341
9
15
31
654
630
591
$
$
$
$
$
$
$
205
9
6,026
5,317
238
10
5,565
4,860
168
13
5,041
9
10
13
990
938
821
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
—
—
1,759
1,759
—
—
1,823
1,823
—
—
2,213
2,213
1,750
1,823
2,203
62
61
67
(51)
$
(4)
(1,768)
(1,823)
(31)
(5)
(1,833)
(1,869)
(35)
—
(2,226)
(2,261)
(1,793)
(1,865)
(2,252)
—
—
1
$
$
$
$
$
$
$
6,038
$
3,146
$
3,245
$
5,114
$
1,991
$
(1,820)
$
4,218
5,151
3,102
2,547
3,376
2,860
4,734
4,240
2,093
2,045
(1,762)
(1,587)
$
$
477
414
389
314
264
172
1,090
$
917
742
$
$
$
201
177
161
20
79
12
563
576
504
$
182
152
138
$
323
292
267
$
546
415
335
133
$
116
$
(207)
$
8
(35)
485
380
408
$
9
42
590
608
561
—
8
$
(380)
$
2,576
$
1,426
$
1,367
$
1,988
$
2,506
2,387
1,349
1,240
1,262
1,226
1,709
1,720
42,827
39,661
$
15,595
14,502
$
14,184
13,350
$
26,903
26,082
$
193
$
—
(3)
(1)
(2)
$
(11)
(161)
(20)
(34)
(443)
—
—
—
(4,337)
(4,260)
$
$
$
(393)
(156)
54
95
67
6,374
6,014
$
$
19,916
1,811
—
21,727
17,083
1,995
—
19,078
16,395
1,543
—
17,938
—
6
57
3,506
3,325
3,033
17,714
15,761
15,256
1,729
1,447
1,289
374
349
38
2,328
2,054
1,616
7,411
6,921
6,640
101,546
95,349
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 5 — Segment Information
__________
(a) Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.
(b)
Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in Taxes other than income taxes in the Registrants’ Consolidated Statements of Operations
and Comprehensive Income. See Note 22 — Supplemental Financial Information for additional information on total utility taxes.
(c) See Note 23 — Related Party Transactions for additional information on intersegment revenues.
194
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 5 — Segment Information
PHI:
Operating revenues :
(b)
2023
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
2022
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
2021
Electric revenues
Natural gas revenues
Shared service and other revenues
Total operating revenues
Intersegment revenues :
(c)
2023
2022
2021
Depreciation and amortization:
2023
2022
2021
Operating expenses:
2023
2022
2021
Interest expense, net:
2023
2022
2021
Income taxes:
2023
2022
2021
Net income (loss):
2023
2022
2021
Capital expenditures:
2023
2022
2021
Total assets:
2023
2022
Pepco
DPL
ACE
Other
(a)
Intersegment
Eliminations
PHI
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2,824
—
—
2,824
2,531
—
—
2,531
2,274
—
—
2,274
9
5
5
441
417
403
2,377
2,140
1,871
165
150
140
51
(9)
15
306
305
296
957
874
843
11,194
10,657
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,483
205
—
1,688
1,357
238
—
1,595
1,212
168
—
1,380
8
6
7
244
232
210
1,420
1,359
1,161
74
66
61
35
14
42
177
169
128
562
430
429
5,966
5,802
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,522
—
—
1,522
1,431
—
—
1,431
1,388
—
—
1,388
2
2
2
283
261
179
1,314
1,225
1,201
72
66
58
36
3
(13)
120
148
146
460
398
445
5,157
4,979
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1
—
422
423
—
—
391
391
—
—
379
379
422
380
380
22
28
29
434
393
388
12
9
8
(6)
1
(2)
(13)
(14)
(9)
9
7
3
4,627
4,677
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(18)
—
(413)
(431)
(2)
—
(381)
(383)
(14)
—
(366)
(380)
(432)
(383)
(381)
—
—
—
(431)
(383)
(381)
—
1
—
—
—
—
—
—
—
—
—
—
(41)
(33)
5,812
205
9
6,026
5,317
238
10
5,565
4,860
168
13
5,041
9
10
13
990
938
821
5,114
4,734
4,240
323
292
267
116
9
42
590
608
561
1,988
1,709
1,720
26,903
26,082
__________
(a) Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.
195
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
(b)
(c)
Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in Taxes other than income taxes in the Registrants’ Consolidated Statements of Operations
and Comprehensive Income. See Note 22 — Supplemental Financial Information for additional information on total utility taxes.
Includes intersegment revenues with ComEd, PECO, and BGE, which are eliminated at Exelon.
Electric and Gas Revenue by Customer Class (Utility Registrants):
The following tables disaggregate the Registrants' revenues recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash
flows are affected by economic factors. For the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with
further disaggregation of these tariff sales provided by major customer groups. Exelon's disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.
Note 5 — Segment Information
Revenues from contracts with customers
Electric revenues
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Other
Total electric revenues
(a)
(b)
Natural gas revenues
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Other
(c)
Total natural gas revenues
(d)
Total revenues from contracts with customers
Other revenues
Revenues from alternative revenue programs
Other electric revenues
Other natural gas revenues
Total other revenues
(e)
(e)
Total revenues for reportable segments
ComEd
PECO
BGE
2023
PHI
Pepco
DPL
ACE
1,765
331
528
29
402
3,055
568
100
161
—
37
866
3,921
84
16
6
106
4,027
$
$
$
$
$
$
$
$
2,845
651
1,420
67
760
5,743
122
53
4
16
10
205
5,948
64
14
—
78
6,026
$
$
$
$
$
$
$
$
1,236
176
1,087
34
258
2,791
—
—
—
—
—
—
2,791
22
11
—
33
2,824
$
$
$
$
$
$
$
$
827
246
126
16
250
1,465
122
53
4
16
10
205
1,670
15
3
—
18
1,688
$
$
$
$
$
$
$
$
782
229
207
17
260
1,495
—
—
—
—
—
—
1,495
27
—
—
27
1,522
$
$
$
$
$
$
$
$
3,565
1,857
824
51
965
7,262
—
—
—
—
—
—
7,262
556
26
—
582
7,844
$
$
$
$
$
$
$
$
2,090
526
249
30
298
3,193
473
172
1
27
17
690
3,883
(7)
16
2
11
3,894
$
$
$
$
$
$
$
$
196
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Revenues from contracts with customers
Electric revenues
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Other
Total electric revenues
(a)
(b)
Natural gas revenues
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Other
(c)
Total natural gas revenues
(d)
Total revenues from contracts with customers
Other revenues
Revenues from alternative revenue programs
Other electric revenues
Other natural gas revenues
Total other revenues
(e)
(e)
Total revenues for reportable segments
Revenues from contracts with customers
Electric revenues
Residential
Small commercial & industrial
Large commercial & industrial
Public authorities & electric railroads
Other
Total electric revenues
(a)
(b)
Natural gas revenues
Residential
Small commercial & industrial
Large commercial & industrial
Transportation
Other
(c)
Total natural gas revenues
(d)
Total revenues from contracts with customers
Other revenues
Revenues from alternative revenue programs
Other electric revenues
Other natural gas revenues
Total other revenues
(e)
(e)
Total revenues for reportable segments
ComEd
PECO
BGE
2022
PHI
Pepco
DPL
ACE
Note 5 — Segment Information
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3,304
1,173
5
29
955
5,466
—
—
—
—
—
—
5,466
267
28
—
295
5,761
$
$
$
$
$
$
$
$
2,026
521
299
30
271
3,147
512
186
—
26
12
736
3,883
2
16
2
20
3,903
$
$
$
$
$
$
$
$
1,564
327
567
27
398
2,883
678
111
183
—
68
1,040
3,923
(47)
14
5
(28)
3,895
$
$
$
$
$
$
$
$
ComEd
PECO
BGE
2021
PHI
1,375
267
459
27
371
2,499
518
83
147
—
68
816
3,315
12
11
3
26
3,341
$
$
$
$
$
$
$
$
3,233
1,571
559
45
926
6,334
—
—
—
—
—
—
6,334
42
30
—
72
6,406
$
$
$
$
$
$
$
$
1,704
422
243
31
229
2,629
372
136
—
24
7
539
3,168
26
4
—
30
3,198
$
$
$
$
$
$
$
$
197
2,590
607
1,422
64
695
5,378
127
55
12
15
29
238
5,616
(59)
8
—
(51)
5,565
2,441
521
1,123
58
634
4,777
97
42
7
14
8
168
4,945
91
5
—
96
5,041
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,076
155
1,083
34
208
2,556
—
—
—
—
—
—
2,556
(31)
6
—
(25)
2,531
Pepco
1,003
135
844
31
205
2,218
—
—
—
—
—
—
2,218
53
3
—
56
2,274
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
750
235
137
15
227
1,364
127
55
12
15
29
238
1,602
(9)
2
—
(7)
1,595
694
193
94
14
201
1,196
97
42
7
14
8
168
1,364
14
2
—
16
1,380
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
DPL
764
217
202
15
252
1,450
—
—
—
—
—
—
1,450
(19)
—
—
(19)
1,431
744
193
185
13
229
1,364
—
—
—
—
—
—
1,364
24
—
—
24
1,388
ACE
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 5 — Segment Information
__________
(a)
(b)
Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.
Includes operating revenues from affiliates in 2023, 2022, and 2021 respectively of:
•
•
•
•
•
•
•
$16 million, $16 million, and $41 million at ComEd
$7 million, $7 million, and $20 million at PECO
$6 million, $7 million, and $13 million at BGE
$9 million, $10 million, and $13 million at PHI
$9 million, $5 million, and $5 million at Pepco
$8 million, $6 million, and $7 million at DPL
$2 million, $2 million, and $2 million at ACE
Includes revenues from off-system natural gas sales.
Includes operating revenues from affiliates in 2023, 2022, and 2021 respectively of:
(c)
(d)
•
•
$2 million, less than $1 million, and $1 million at PECO
$3 million, $8 million, and $18 million at BGE
(e)
Includes late payment charge revenues.
6. Accounts Receivable (All Registrants)
Allowance for Credit Losses on Accounts Receivable
The following tables present the rollforward of Allowance for credit losses on Customer accounts receivable.
Balance at December 31, 2022
Plus: Current period provision for expected credit losses
Less: Write-offs
, net of recoveries
(d)(e)(f)
(g)
(a)(b)(c)
Balance at December 31, 2023
Balance at December 31, 2021
Plus: Current period provision for expected credit losses
Less: Write-offs, net of recoveries
Balance at December 31, 2022
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Year Ended December 31, 2023
$
$
$
$
327 $
170
180
317 $
Exelon
ComEd
320 $
176
169
327 $
59
53
43
69
73
29
43
59
$
$
$
$
105 $
48
58
95
$
54
26
34
46
$
$
109 $
43
45
107 $
Year Ended December 31, 2022
PECO
BGE
PHI
Pepco
105 $
52
52
105 $
38
37
21
54
$
$
104 $
58
53
109 $
47
23
18
52
37
31
21
47
$
$
$
$
$
$
$
21
9
11
19
18
12
9
21
$
DPL
41
11
16
36
49
15
23
41
ACE
_________
(a) For ComEd, the change in current period provision for expected credit losses is primarily a result of increased receivable balances.
(b) For BGE, DPL and ACE, the change in current period provision for expected credit losses is primarily a result of decreased receivable balances.
(c) For Pepco the change in current period provision for expected credit losses is primarily a result of receivables increasing at a slower pace versus the prior period.
(d) For PECO and BGE the change in write-offs is primarily a result of increased disconnection activities.
(e) For PHI, ACE, and Pepco, write-offs are primarily attributable to the termination of the moratorium in the service territory for each operating company, which beginning in 2020, prevented customer disconnections for
non-payment. Disconnection activities across the service territories resumed from September 2020 through January 2022, resulting in write-offs of aged accounts receivable.
(f) For DPL, the change in write-offs is primarily attributable to unfavorable customer payment behavior.
(g) Recoveries were not material to the Registrants.
The following tables present the rollforward of Allowance for credit losses on Other accounts receivable.
198
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 6 — Accounts Receivable
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Year Ended December 31, 2023
$
$
$
$
82
21
21
82
72
26
16
82
$
$
$
$
Exelon
17
5
5
17
17
3
3
17
$
$
$
$
ComEd
9
4
5
8
7
6
4
9
$
$
$
$
PECO
$
10
5
8
7 $
Year Ended December 31, 2022
BGE
PHI
9 $
6
5
10
$
46
7
3
50
39
11
4
46
$
$
$
$
25
3
—
28
16
9
—
25
$
$
$
$
Pepco
7 $
1
—
8 $
DPL
ACE
8 $
(1)
—
7 $
14
3
3
14
15
3
4
14
Balance at December 31, 2022
Plus: Current period provision for expected credit losses
Less: Write-offs, net of recoveries
(a)
Balance at December 31, 2023
Balance at December 31, 2021
Plus: Current period provision (benefit) for expected credit losses
Less: Write-offs, net of recoveries
Balance at December 31, 2022
_________
(a) Recoveries were not material to the Registrants.
Unbilled Customer Revenue
The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets as of December 31, 2023 and 2022.
December 31, 2023
December 31, 2022
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
991 $
912
351 $
223
185 $
219
208 $
247
247 $
223
109 $
103
$
64
74
74
46
Unbilled customer revenues
(a)
_________
(a) Unbilled customer revenues are classified in Customer accounts receivables, net in the Registrants' Consolidated Balance Sheets.
Other Purchases of Customer and Other Accounts Receivables
The Utility Registrants are required, under separate legislation and regulations in Illinois, Pennsylvania, Maryland, District of Columbia, and New Jersey, to purchase certain receivables from alternative
retail electric and, as applicable, natural gas suppliers that participate in the utilities' consolidated billing. The following tables present the total receivables purchased.
Year ended December 31, 2023
Year ended December 31, 2022
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
4,056
3,981
$
(a)
942 $
965
1,099 $
1,081
804
792
$
(a)
1,211 $
1,143
782 $
723
228 $
205
201
215
Total receivables purchased
_________
(a)
Includes $4 million of receivables purchased from Generation prior to the separation on February 1, 2022 for the year ended December 31, 2022.
199
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 7 — Property, Plant, and Equipment
7. Property, Plant, and Equipment (All Registrants)
The following tables present a summary of property, plant, and equipment by asset category at December 31, 2023 and 2022:
Asset Category
December 31, 2023
Electric—transmission and distribution
Gas—transportation and distribution
Common—electric and gas
Construction work in progress
Other property, plant, and equipment
(a)
Total property, plant, and equipment
Less: accumulated depreciation
Property, plant, and equipment, net
December 31, 2022
Electric—transmission and distribution
Gas—transportation and distribution
Common—electric and gas
Construction work in progress
Other property, plant and equipment
(a)
Total property, plant and equipment
Less: accumulated depreciation
Property, plant, and equipment, net
__________
(a) Primarily composed of land and non-utility property.
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
74,102
$
34,834
$
11,295
$
10,537
$
19,153
$
12,429
$
5,590
$
5,659
8,818
2,510
4,589
825
90,844
17,251
—
—
1,369
107
36,310
7,222
3,905
1,083
879
63
17,225
4,097
4,428
1,275
561
45
16,846
4,744
748
243
1,762
120
22,026
3,175
—
—
1,226
59
13,714
4,284
905
211
345
39
7,090
1,925
73,593
$
29,088
$
13,128
$
12,102
$
18,851
$
9,430
$
5,165
$
—
—
189
28
5,876
1,684
4,192
69,034
$
32,906
$
10,719
$
9,993
$
17,165
$
11,270
$
5,231
$
5,219
$
$
8,126
2,521
4,534
791
85,006
15,930
—
—
1,174
106
34,186
6,673
3,619
1,071
744
50
16,203
4,078
4,074
1,317
487
50
15,921
4,583
696
228
2,101
114
20,304
2,618
—
—
1,526
65
12,861
4,067
855
206
271
29
6,592
1,772
$
69,076
$
27,513
$
12,125
$
11,338
$
17,686
$
8,794
$
4,820
$
—
—
296
26
5,541
1,551
3,990
200
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 7 — Property, Plant, and Equipment
The following table presents the average service life for each asset category in number of years:
Asset Category
Electric - transmission and distribution
Gas - transportation and distribution
Common - electric and gas
Other property, plant, and equipment
Exelon
5-80
5-80
4-75
4-61
ComEd
5-80
N/A
N/A
30-50
PECO
5-70
5-70
5-55
50
Average Service Life (years)
BGE
5-80
5-80
4-50
20-50
PHI
5-75
5-75
5-75
10-43
Pepco
5-75
N/A
N/A
10-33
DPL
5-75
5-75
5-75
10-43
ACE
5-75
N/A
N/A
13-15
The following table presents the annual depreciation rates for each asset category.
December 31, 2023
Electric—transmission and distribution
Gas—transportation and distribution
Common—electric and gas
December 31, 2022
Electric—transmission and distribution
Gas—transportation and distribution
Common—electric and gas
December 31, 2021
Electric—transmission and distribution
Gas—transportation and distribution
Common—electric and gas
AFUDC
The following table summarizes credits to AFUDC by year:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Annual Depreciation Rates
2.90%
2.15%
7.77%
2.87%
2.14%
7.54%
2.81%
2.13%
7.31%
3.02%
N/A
N/A
3.00%
N/A
N/A
2.94%
N/A
N/A
2.30%
1.85%
6.87%
2.29%
1.87%
6.31%
2.28%
1.84%
6.34%
2.89%
2.56%
8.68%
2.82%
2.53%
8.20%
2.80%
2.54%
7.88%
3.03%
1.44%
7.18%
2.96%
1.45%
8.96%
2.87%
1.47%
8.33%
2.51%
N/A
N/A
2.58%
N/A
N/A
2.56%
N/A
N/A
3.29%
1.44%
8.79%
3.08%
1.45%
10.03%
2.86%
1.47%
8.69%
3.66%
N/A
N/A
3.38%
N/A
N/A
3.21%
N/A
N/A
2023
2022
2021
$
256
$
215
$
For the Years Ended December 31,
72
46
25
113
85
16
12
54
42
29
90
69
10
11
189
47
34
36
72
59
8
5
See Note 1 — Significant Accounting Policies for additional information regarding property, plant and equipment policies. See Note 16 — Debt and Credit Agreements for additional information regarding
Exelon’s, ComEd’s, PECO's, Pepco's, DPL's, and ACE’s property, plant and equipment subject to mortgage liens.
201
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 8 — Jointly Owned Electric Utility Plant
8. Jointly Owned Electric Utility Plant (Exelon, PECO, PHI, DPL, and ACE)
PECO's, DPL's, and ACE's material undivided ownership interests in transmission facilities jointly owned with non-affiliated utilities as of December 31, 2023 and 2022 were as follows:
Operator
Ownership interest
Exelon’s share at December 31, 2023:
Plant in service
Accumulated depreciation
Construction work in progress
Exelon’s share at December 31, 2022:
Plant in service
Accumulated depreciation
Construction work in progress
Transmission
(a)
NJ/DE
PSEG/DPL
various
103
56
2
103
56
—
$
$
__________
(a) PECO, DPL, and ACE own a 42.55%, 1%, and 13.9% share, respectively, in 151.3 miles of 500kV lines located in New Jersey and in the Salem substation. PECO, DPL, and ACE also own a 42.55%, 7.45%, and 7.45%
share, respectively, in 2.5 miles of 500kV line located over the Delaware River. ACE also has a 21.78% share in a 500kV New Freedom Switching substation.
Certain facilities are fully owned by Exelon through its 100% ownership in PECO, DPL, and ACE. These facilities are operated by Exelon Registrants. PECO's, DPL's, and ACE's material undivided
ownership interests in Exelon owned facilities as of December 31, 2023 and 2022 were as follows:
Ownership interest
Registrant's share at December 31, 2023:
Plant in service
Accumulated depreciation
Construction work in progress
Registrant's share at December 31, 2022:
Plant in service
Accumulated depreciation
Construction work in progress
PECO
PHI
DPL
ACE
56 %
44 %
27 %
17 %
$
$
$
$
7
—
70
7
—
41
$
$
6
—
58
6
—
36
$
$
4
—
36
4
—
22
2
—
22
2
—
14
PECO's, DPL's, and ACE's undivided ownership interests presented in the tables above are financed with their funds and all operations are accounted for as if such participating interests were wholly
owned facilities. PECO's, DPL's, and ACE's share of direct expenses of the jointly owned plants are included in Operating and maintenance expenses in Exelon's, PECO's, PHI's, DPL's, and ACE's
Consolidated Statements of Operations and Comprehensive Income.
202
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 9 — Asset Retirement Obligations
9. Asset Retirement Obligations (All Registrants)
The Registrants have AROs primarily associated with the abatement and disposal of equipment and buildings contaminated with asbestos and PCBs. See Note 1 — Significant Accounting Policies for
additional information on the Registrants’ accounting policy for AROs.
The following table provides a rollforward of the AROs reflected in the Registrants’ Consolidated Balance Sheets from December 31, 2021 to December 31, 2023:
AROs at December 31, 2021
Revisions in estimates of cash flows
Accretion expense
(a)
Payments
AROs at December 31, 2022
Revisions in estimates of cash flows
Accretion expense
Payments
(a)
AROs at December 31, 2023
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
274 $
146 $
29
$
26
$
70
$
45
$
16
$
(8)
8
(3)
2
4
(2)
271 $
150 $
(9)
11
(4)
(3)
6
(3)
(1)
1
(1)
28
(1)
1
(1)
$
3
1
—
30
1
1
—
$
(13)
2
—
59
(6)
3
—
$
(8)
2
—
39
(4)
2
—
$
(3)
—
—
13
(1)
1
—
$
269 $
150 $
27
$
32
$
56
$
37
$
13
$
9
(2)
—
—
7
(1)
—
—
6
$
$
$
__________
(a) For ComEd, PECO, BGE, DPL and ACE, the majority of the accretion is recorded as an increase to a regulatory asset due to the associated regulatory treatment.
10. Leases (All Registrants)
Lessee
The Registrants have operating and finance leases for which they are the lessees. The following tables outline the significant types of leases at each of the Registrants and other terms and conditions of the
lease agreements as of December 31, 2023. Exelon, ComEd, PECO, and BGE did not have material finance leases in 2023, 2022, or 2021.
Real estate
Vehicles and equipment
(in years)
Remaining lease terms
Options to extend the term
Options to terminate within
Exelon
●
●
Exelon
ComEd
●
PECO
●
ComEd
PECO
BGE
●
●
BGE
PHI
●
●
PHI
Pepco
●
●
Pepco
DPL
●
●
DPL
ACE
●
●
ACE
1-82
3-30
9
1-29
N/A
N/A
1-10
N/A
N/A
1-82
3-5
N/A
1-8
3-30
N/A
1-8
5
N/A
1-8
3-30
N/A
1-7
5
N/A
203
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 10 — Leases
The components of operating lease costs were as follows:
For the year ended December 31, 2023
Operating lease costs
Variable lease costs
Total lease costs
(a)
For the year ended December 31, 2022
Operating lease costs
Variable lease costs
Total lease costs
(a)
For the year ended December 31, 2021
Operating lease costs
Variable lease costs
Total lease costs
(a)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
$
$
$
$
$
58
9
67
66
8
74
84
7
91
$
$
$
$
$
$
1
1
2
2
1
3
3
1
4
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
$
$
$
$
$
$
5
—
5
15
—
15
30
1
31
$
$
$
$
$
$
43
3
46
42
2
44
43
1
44
$
$
$
$
$
$
11
1
12
10
1
11
10
—
10
$
$
$
$
$
$
11
1
12
12
1
13
12
—
12
$
$
$
$
$
$
__________
(a) Excludes sublease income recorded at Exelon, PHI, and DPL of $4 million for the years ended December 31, 2023, 2022, and 2021.
The components of financing lease costs were as follows:
For the year ended December 31, 2023
Amortization of ROU asset
Interest on lease liabilities
Total finance lease cost
For the year ended December 31, 2022
Amortization of ROU asset
Interest on lease liabilities
Total finance lease cost
For the year ended December 31, 2021
Amortization of ROU asset
Interest on lease liabilities
Total finance lease cost
PHI
Pepco
DPL
ACE
$
$
$
$
$
$
16
6
22
14
4
18
11
2
13
$
$
$
$
$
$
6
2
8
5
1
6
4
1
5
$
$
$
$
$
$
6
2
8
6
2
8
4
1
5
$
$
$
$
$
$
6
1
7
6
1
7
6
—
6
4
1
5
3
1
4
3
—
3
The following tables provide additional information regarding the presentation of operating and finance lease ROU assets and lease liabilities within the Registrants’ Consolidated Balance Sheets:
204
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 10 — Leases
At December 31, 2023
Operating lease ROU assets
Other deferred debits and other assets
Operating lease liabilities
Other current liabilities
Other deferred credits and other liabilities
Total operating lease liabilities
At December 31, 2022
Operating lease ROU assets
Other deferred debits and other assets
Operating lease liabilities
Other current liabilities
Other deferred credits and other liabilities
Total operating lease liabilities
At December 31, 2023
Finance lease ROU assets
Plant, property and equipment, net
Finance lease liabilities
Long-term debt due within one year
Long-term debt
Total finance lease liabilities
At December 31, 2022
Finance lease ROU assets
Plant, property and equipment, net
Finance lease liabilities
Long-term debt due within one year
Long-term debt
Total finance lease liabilities
$
$
$
$
$
$
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Leases
257
$
—
$
1
$
29
$
152
$
31
$
32
$
38
248
286
$
$
—
—
—
$
$
—
—
—
$
$
4
17
21
$
$
30
141
171
$
$
5
30
35
$
$
7
36
43
$
$
265
$
2
$
1
$
2
$
180
$
36
$
39
$
40
266
306
$
$
2
—
2
$
$
—
1
1
$
$
—
4
4
$
$
31
167
198
$
$
6
34
40
$
$
8
42
50
$
$
PHI
Pepco
DPL
ACE
Finance Leases
72
$
25
$
28
$
15
59
74
$
$
5
21
26
$
$
6
23
29
$
$
74
$
25
$
31
$
12
64
76
$
$
4
21
25
$
$
5
27
32
$
$
$
$
$
$
$
$
205
8
3
6
9
9
3
7
10
18
4
15
19
18
3
16
19
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 10 — Leases
Future minimum lease payments for operating and finance leases as of December 31, 2023 were as follows:
Year
2024
2025
2026
2027
2028
Remaining years
Total
Interest
Total operating lease liabilities
Year
2024
2025
2026
2027
2028
Remaining years
Total
Interest
Total finance lease liabilities
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Leases
$
$
49
47
43
41
41
130
351
65
286
$
$
—
—
—
—
—
—
—
—
—
$
$
$
$
—
—
—
—
—
—
—
—
—
$
$
4
4
4
2
2
22
38
17
21
$
$
7
5
5
4
4
16
41
6
35
$
$
9
8
5
6
6
21
55
12
43
$
$
36
34
30
30
30
40
200
29
171
$
$
Finance Leases
PHI
Pepco
DPL
ACE
16
16
16
14
10
8
80
6
74
$
$
6
6
6
5
3
2
28
2
26
$
$
6
6
6
6
4
3
31
2
29
$
$
The weighted average remaining lease terms, in years, for operating and finance leases were as follows:
At December 31, 2023
At December 31, 2022
At December 31, 2023
At December 31, 2022
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Leases
8.8
9.5
1.8
1.0
5.0
5.5
PHI
17.1
70.9
6.1
6.8
4.9
5.5
Finance Leases
Pepco
4.9
5.4
7.6
8.1
DPL
4.8
5.5
7.4
7.9
ACE
The weighted average discount rates for operating and finance leases were as follows:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Leases
3
3
1
1
1
1
10
1
9
4
4
4
3
3
3
21
2
19
3.2
3.3
5.1
5.6
At December 31, 2023
At December 31, 2022
4.0 %
3.9 %
0.7 %
2.6 %
At December 31, 2023
At December 31, 2022
5.0 %
4.5 %
4.2 %
4.2 %
2.7 %
2.3 %
Finance Leases
Pepco
2.7 %
2.3 %
4.1 %
4.0 %
DPL
4.0 %
4.0 %
ACE
2.6 %
2.3 %
3.6 %
3.3 %
2.8 %
2.4 %
2.5 %
2.3 %
PHI
206
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 10 — Leases
Cash paid for amounts included in the measurement of operating and finance lease liabilities were as follows:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Cash Flows from Operating Leases
For the year ended December 31, 2023
For the year ended December 31, 2022
For the year ended December 31, 2021
$
$
65
66
93
For the year ended December 31, 2023
For the year ended December 31, 2022
For the year ended December 31, 2021
$
2
3
3
PHI
$
—
—
—
$
15
16
46
$
37
37
39
$
7
8
8
Financing Cash Flows from Finance Leases
Pepco
DPL
$
9
9
9
ACE
$
$
15
13
10
$
5
5
3
$
6
5
4
ROU assets obtained in exchange for operating and finance lease obligations were as follows:
For the year ended December 31, 2023
For the year ended December 31, 2022
For the year ended December 31, 2021
For the year ended December 31, 2023
For the year ended December 31, 2022
For the year ended December 31, 2021
Lessor
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
$
35
46
1
$
—
—
—
$
—
—
—
$
32
—
(1)
$
3
2
1
$
—
—
—
$
1
1
1
Operating Leases
PHI
Pepco
DPL
ACE
$
$
11
14
32
$
5
4
12
$
3
7
12
Finance Leases
3
4
4
4
3
3
2
1
—
3
3
8
The Registrants have operating leases for which they are the lessors. The following tables outline the significant types of leases at each of the Registrants and other terms and conditions of their lease
agreements as of December 31, 2023. ACE did not have any operating leases for which they are the lessors for the years ended December 31, 2023, 2022, and 2021.
Real estate
(in years)
Remaining lease terms
Options to extend the term
Exelon
●
ComEd
●
PECO
●
BGE
●
PHI
●
Pepco
●
DPL
●
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
1-79
1-79
1-13
5-79
207
1-79
1-50
19
N/A
1-9
N/A
1-2
N/A
8-9
N/A
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 10 — Leases
The components of lease income were as follows:
For the year ended December 31, 2023
Operating lease income
Variable lease income
For the year ended December 31, 2022
Operating lease income
Variable lease income
For the year ended December 31, 2021
Operating lease income
Variable lease income
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
$
$
$
$
$
$
5
1
4
1
5
1
$
$
$
—
—
—
—
—
—
$
$
$
—
—
—
—
—
—
$
$
$
—
—
—
—
—
—
$
$
$
4
1
4
1
4
1
$
$
$
—
—
—
—
—
—
Future minimum lease payments to be recovered under operating leases as of December 31, 2023 were as follows:
Year
2024
2025
2026
2027
2028
Remaining years
Total
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
$
$
6
6
6
6
5
22
51
$
$
1
1
—
—
—
—
2
$
$
208
1
1
1
—
—
3
6
$
$
—
—
—
—
—
1
1
$
$
4
4
5
5
5
18
41
$
$
—
—
—
—
—
—
—
$
$
3
1
3
1
3
1
4
4
4
4
4
18
38
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 11 — Asset Impairments
11. Asset Impairments (Exelon and BGE)
In the third quarter of 2022, a review of the impacts of COVID-19 on office use resulted in plans to cease the renovation and dispose of an office building at BGE before the asset was placed into service.
BGE determined that the carrying value was not recoverable and that its fair value was less than carrying value. As a result, in 2022, a pre-tax impairment charge of $48 million was recorded in Operating
and maintenance expense in Exelon’s and BGE’s Consolidated Statements of Operations and Comprehensive Income. The fair value used in the analysis was based on an estimate of an expected sales
price. The office building met all of the criteria for classification as held for sale as of December 31, 2023, and therefore is reported within Other current assets in Exelon’s and BGE’s Balance Sheets as of
December 31, 2023.
12. Intangible Assets
Goodwill (Exelon, ComEd, PHI, Pepco, DPL, and ACE)
The following table presents the gross amount, accumulated impairment loss, and carrying amount of Goodwill at Exelon, ComEd, and PHI at December 31, 2023 and 2022. There were no additions or
impairments during the years ended December 31, 2023 and 2022.
Exelon
(a)
ComEd
(b)
PHI
__________
(a) Reflects goodwill recorded in 2000 from the PECO/Unicom merger (predecessor parent company of ComEd).
(b) Reflects goodwill recorded in 2016 from the PHI merger.
Gross Amount
Accumulated Impairment Loss
Carrying Amount
$
8,613 $
4,608
4,005
$
1,983
1,983
—
6,630
2,625
4,005
Goodwill is not amortized, but is subject to an assessment for impairment at least annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value
of ComEd's and PHI's reporting units below their carrying amounts. A reporting unit is an operating segment or one level below an operating segment (known as a component) and is the level at which
goodwill is assessed for impairment. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and its operating
results are regularly reviewed by segment management. ComEd has a single operating segment. PHI's operating segments are Pepco, DPL, and ACE. See Note 5 — Segment Information for additional
information. There is no level below these operating segments for which operating results are regularly reviewed by segment management. Therefore, the ComEd, Pepco, DPL, and ACE operating
segments are also considered reporting units for goodwill impairment assessment purposes. Exelon's and ComEd's $2.6 billion of goodwill has been assigned entirely to the ComEd reporting unit, while
Exelon's and PHI's $4.0 billion of goodwill has been assigned to the Pepco, DPL, and ACE reporting units in the amounts of $2.1 billion, $1.4 billion, and $0.5 billion, respectively.
Entities assessing goodwill for impairment have the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary. As part of the qualitative assessments,
Exelon, ComEd, and PHI evaluate, among other things, management's best estimate of projected operating and capital cash flows for their businesses, outcomes of recent regulatory proceedings,
changes in certain market conditions, including the discount rate and regulated utility peer EBITDA multiples, and the passing margin from their last quantitative assessments performed. If an entity
bypasses the qualitative assessment, a quantitative, fair value-based assessment is performed, which compares the fair value of the reporting unit to its carrying amount, including goodwill. If the carrying
amount of the reporting unit exceeds its fair value, the entity recognizes an impairment charge, which is limited to the amount of goodwill allocated to the reporting unit.
Application of the goodwill impairment assessment requires management judgment, including the identification of reporting units and determining the fair value of the reporting unit, which management
estimates using a weighted combination of a discounted cash flow analysis and a market multiples analysis. Significant assumptions used in these fair value analyses include discount and growth rates,
utility sector market
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 12 — Intangible Assets
performance and transactions, projected operating and capital cash flows for ComEd's, Pepco's, DPL's, and ACE's businesses, and the fair value of debt.
2023 and 2022 Goodwill Impairment Assessment. ComEd and PHI qualitatively determined that it was more likely than not that the fair values of their reporting units exceeded their carrying values and,
therefore, did not perform quantitative assessments as of November 1, 2023 and 2022. The last quantitative assessments performed for PHI was as of November 1, 2018. On December 14, 2023, due to
the issuance of the ICC's final order rejecting ComEd’s proposed Grid Plan and establishing retail rates for 2024-2027 as further discussed in Note 3 — Regulatory Matters, Exelon’s stock price decreased
approximately 10% triggering an interim quantitative assessment for potential goodwill impairment at ComEd. ComEd performed a quantitative assessment as of December 31, 2023, comparing the
estimated fair value of ComEd to its carrying value, and determined there was no indication of goodwill impairment.
While the annual and interim assessments indicated no impairments, certain assumptions used to estimate reporting unit fair values are highly sensitive to changes. Adverse regulatory actions or changes
in significant assumptions could potentially result in future impairments of Exelon's, ComEd's, and PHI’s goodwill, which could be material.
Other Intangible Assets and Liabilities (Exelon and PHI)
Exelon’s other intangible assets, included in Other current assets and Other deferred debits and other assets in the Consolidated Balance Sheets, consisted of the following at December 31, 2023 and
2022. Exelon's and PHI's other intangible liabilities, included in current and noncurrent Unamortized energy contract liabilities in their Consolidated Balance Sheets, consisted of the following at
December 31, 2023 and 2022. The intangible assets and liabilities shown below are amortized on a straight-line basis, except for unamortized energy contracts which are amortized in relation to the
expected realization of the underlying cash flows:
Exelon
Unamortized Energy Contracts
Software License
Exelon Total
PHI
Unamortized Energy Contracts
Gross
Accumulated Amortization
Net
Gross
Accumulated Amortization
Net
December 31, 2023
December 31, 2022
$
$
$
(1,515) $
81
(1,434) $
(1,515) $
1,480
$
(35) $
(1,515) $
(70)
1,410
1,480
$
$
11
81
(24) $
(1,434) $
(35) $
(1,515) $
1,470
$
(61)
1,409
1,470
$
$
The following table summarizes the amortization expense related to intangible assets and liabilities for each of the years ended December 31, 2023, 2022, and 2021:
For the Years Ended December 31,
2023
2022
(b)
2021
Exelon
(a)
PHI
(a)
$
(1)
$
(182)
(83)
(45)
20
(25)
(45)
(10)
(190)
(92)
__________
(a) For PHI unamortized energy contracts, the amortization of the fair value adjustment amounts and the corresponding offsetting regulatory asset amounts are amortized through Purchased power and fuel expense in their
Consolidated Statements of Operations and Comprehensive Income resulting in no effect to net income.
(b) On March 23, 2022, the NJBPU approved a petition by ACE to terminate the provisions in its PPAs. As such, the contract was fully amortized during the year ended December 31, 2022. See Note 3 - Regulatory
Matters for additional information.
210
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
13. Income Taxes (All Registrants)
Components of Income Tax Expense or Benefit
Income tax expense (benefit) from continuing operations is comprised of the following components:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
For the Year Ended December 31, 2023
Included in operations:
Federal
Current
Deferred
Investment tax credit amortization
State
Current
Deferred
Total
Included in operations:
Federal
Current
Deferred
Investment tax credit amortization
State
Current
Deferred
Total
Included in operations:
Federal
Current
Deferred
Investment tax credit amortization
State
Current
Deferred
Total
Rate Reconciliation
$
51
$
130 $
63
$
$
71
$
54
$
25
$
193
(2)
4
128
374
45
(1)
(13)
153
(36)
—
—
(7)
67
16
—
—
50
(8)
(1)
15
39
(28)
—
12
13
51
$
$
314 $
20
$
133 $
116 $
$
$
$
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
For the Year Ended December 31, 2022
(24)
106
(3)
(13)
283
349
$
$
29
117
(1)
(6)
125
$
264 $
13
18
—
(4)
52
79
$
$
(1)
(3)
—
—
12
$
16
(23)
(1)
2
15
$
9
(2)
—
—
(16)
$
8 $
9 $
(9)
$
ACE
(6)
—
6
10
35
(2)
2
—
—
14
14
$
$
$
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
For the Year Ended December 31, 2021
$
(152) $
(30) $
1 $
(18) $
18
$
22
$
2 $
89
(2)
(46)
149
113
(1)
(41)
131
20
—
—
(9)
34
—
—
(51)
$
38
$
172 $
12
$
(35) $
(52)
(1)
—
77
42
(17)
—
1
9
$
15
$
(14)
—
1
53
42
$
9
13
—
—
14
36
6
(15)
—
—
12
3
1
(26)
—
—
12
(13)
The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:
211
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
U.S. federal statutory rate
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit
Plant basis differences
(c)
Excess deferred tax amortization
Amortization of investment tax credit, including deferred taxes
on basis differences
Tax credits
Other
Effective income tax rate
Exelon
ComEd
PECO
(b)
BGE
PHI
Pepco
DPL
ACE
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
For the Year Ended December 31, 2023
(a)
3.9
(3.9)
(6.6)
(0.1)
(0.6)
0.1
7.9
(0.5)
(5.5)
(0.1)
(0.6)
0.2
(1.0)
(14.4)
(2.4)
—
—
0.2
6.4
(0.9)
(4.6)
—
(0.6)
0.2
5.9
(1.4)
(8.6)
(0.1)
(0.6)
0.2
5.5
(2.2)
(9.6)
—
(0.7)
0.3
6.1
(0.7)
(9.4)
(0.1)
(0.4)
—
7.1
(0.4)
(4.2)
(0.2)
(0.5)
0.3
13.8 %
22.4 %
3.4 %
21.5 %
16.4 %
14.3 %
16.5 %
23.1 %
U.S. federal statutory rate
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit
(e)
Plant basis differences
Excess deferred tax amortization
Amortization of investment tax credit, including deferred
taxes on basis differences
Tax credits
(g)
Other
(f)
Effective income tax rate
U.S. federal statutory rate
Increase (decrease) due to:
State income taxes, net of federal income tax benefit
Plant basis differences
Excess deferred tax amortization
Amortization of investment tax credit, including deferred
taxes on basis differences
Tax credits
Other
Effective income tax rate
Exelon
ComEd
PECO
(d)
BGE
(d)
PHI
(d)
Pepco
(d)
DPL
(d)
ACE
(d)
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
For the Year Ended December 31, 2022
(a)
8.8
(4.1)
(11.8)
(0.1)
0.1
0.6
14.5 %
8.0
(0.6)
(5.6)
(0.1)
(0.3)
—
22.4 %
5.8
(11.9)
(3.0)
—
—
0.2
12.1 %
2.6
(1.0)
(19.8)
(0.1)
(0.7)
0.1
2.1 %
2.1
(1.7)
(19.5)
(0.1)
(0.7)
0.4
1.5 %
(4.1)
(2.7)
(16.8)
—
(0.7)
0.3
(3.0)%
6.5
(0.7)
(18.4)
(0.2)
(0.6)
0.1
7.7 %
6.9
(0.7)
(24.5)
(0.2)
(0.5)
—
2.0 %
Exelon
ComEd
PECO
(h)
BGE
(h)
PHI
Pepco
(h)
DPL
(h)
ACE
(h)
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
For the Year Ended December 31, 2021
(a)
5.0
(5.4)
(17.2)
(0.1)
(0.7)
(0.3)
2.3 %
7.8
(0.8)
(7.6)
(0.1)
(0.5)
(1.0)
18.8 %
(1.4)
(13.6)
(3.8)
—
—
0.1
2.3 %
(10.8)
(1.7)
(16.3)
(0.1)
(0.9)
(0.6)
(9.4)%
10.1
(1.1)
(22.4)
(0.1)
(0.5)
—
7.0 %
2.7
(1.6)
(16.4)
—
(0.5)
(0.4)
4.8 %
25.0
(0.8)
(20.0)
(0.2)
(0.4)
0.1
24.7 %
7.4
(0.2)
(37.1)
(0.2)
(0.5)
(0.2)
(9.8)%
__________
(a) Positive percentages represent income tax expense. Negative percentages represent income tax benefit.
(b) For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions.
(c) For Exelon, the lower state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of $54 million.
(d) For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions partially offset by higher state income taxes, net of federal income tax benefit, related to a one-time
expense of $38 million attributable to the change in the Pennsylvania corporate income tax rate. For BGE, PHI, Pepco, DPL, and ACE, the lower effective tax rate is primarily related to the acceleration of certain income
tax benefits due to transmission and distribution rate case settlements.
212
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
(e) For Exelon, the higher state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of $67 million and the recognition of a valuation allowance of
$40 million against the net deferred tax asset position for certain standalone state filing jurisdictions, partially offset by a one-time impact associated with a state tax benefit of $43 million and indemnification adjustments
pursuant to the Tax Matters Agreement of $11 million as a result of the separation. For PECO, the higher state income taxes, net of federal income tax benefit, related to a one-time expense of $38 million attributable to
the change in the Pennsylvania corporate income tax rate.
(f) For Exelon, reflects the income tax expense related to the write-off of federal tax credits subject to recapture of $15 million as a result of the separation.
(g) For Exelon, reflects the nondeductible transaction costs of approximately $12 million arising as part of the separation and indemnification adjustments pursuant to the Tax Matters Agreement of $9 million.
(h) For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. For BGE, the income tax benefit is primarily due to the Maryland multi-year plan which resulted in
the acceleration of certain income tax benefits. For Pepco, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to transmission and distribution rate case settlements. For
DPL, the higher effective tax rate is primarily related to a state income tax expense, net of federal income tax benefit, due to the recognition of a valuation allowance of approximately $31 million against a deferred tax
asset associated with Delaware net operating loss carryforwards as a result of a change in Delaware tax law. For ACE, the income tax benefit is primarily due to a distribution rate case settlement which allows ACE to
retain certain tax benefits.
Tax Differences and Carryforwards
The tax effects of temporary differences and carryforwards, which give rise to significant portions of the deferred tax assets (liabilities), at December 31, 2023 and 2022 are presented below:
Plant basis differences
Accrual based contracts
Derivatives and other financial instruments
Deferred pension and postretirement obligation
Deferred debt refinancing costs
Regulatory assets and liabilities
Tax loss carryforward, net of valuation allowances
Tax credit carryforward
Corporate Alternative Minimum Tax
Investment in partnerships
Other, net
Deferred income tax liabilities (net)
Unamortized investment tax credits
Total deferred income tax liabilities (net) and
unamortized investment tax credits
$
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
At December 31, 2023
$
(12,631)
8
46
524
115
(1,429)
295
281
264
(28)
619
(11,936)
(13)
(4,993) $
—
37
(299)
(5)
(405)
—
—
118
—
227
(5,320)
(7)
(2,264) $
—
—
(36)
—
(208)
47
—
82
—
58
(2,321)
—
(2,064) $
—
—
(26)
(2)
(4)
77
—
55
—
21
(1,943)
(2)
(3,262) $
8
2
(78)
104
(52)
72
—
—
—
186
(3,020)
(4)
(1,454) $
—
—
(70)
(3)
9
—
—
—
—
88
(1,430)
(1)
(947) $
—
—
(35)
(2)
45
18
—
2
—
16
(903)
(1)
(850)
—
—
(2)
(1)
(4)
52
—
11
—
25
(769)
(2)
$
(11,949)
$
(5,327) $
(2,321) $
(1,945) $
(3,024) $
(1,431) $
(904) $
(771)
213
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
Plant basis differences
Accrual based contracts
Derivatives and other financial instruments
Deferred pension and postretirement obligation
Deferred debt refinancing costs
Regulatory assets and liabilities
Tax loss carryforward, net of valuation allowances
Tax credit carryforward
Investment in partnerships
Other, net
Deferred income tax liabilities (net)
Unamortized investment tax credits
Total deferred income tax liabilities (net) and
unamortized investment tax credits
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
At December 31, 2022
$
$
(12,130)
10
26
551
132
(1,107)
250
468
(21)
591
(11,230)
(14)
(4,823) $
—
23
(300)
(5)
(131)
—
—
—
223
(5,013)
(8)
(2,119) $
—
—
(31)
—
(169)
33
—
—
73
(2,213)
—
(1,949) $
—
—
(31)
(2)
57
72
—
—
23
(1,830)
(2)
(3,131) $
10
2
(80)
111
(50)
71
—
—
182
(2,885)
(4)
(1,394) $
—
—
(76)
(4)
7
3
—
—
83
(1,381)
(1)
(906) $
—
—
(39)
(2)
43
20
—
—
16
(868)
(1)
(813)
—
—
(3)
(1)
11
46
—
—
28
(732)
(2)
$
(11,244)
$
(5,021) $
(2,213) $
(1,832) $
(2,889) $
(1,382) $
(869) $
(734)
The following table provides Exelon’s, ComEd's, PECO’s, BGE’s, PHI’s, Pepco’s, DPL’s, and ACE’s carryforwards, of which the state related items are presented on a post-apportioned basis, as well as,
any corresponding valuation allowances at December 31, 2023.
Federal
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Federal net operating loss carryforward
Deferred taxes on Federal net operating loss
Federal general business credits carryforwards
Corporate Alternative Minimum Tax credit carryforward
(b)
(a)
(c)
State
State net operating loss carryforwards
Deferred taxes on state tax attributes (net of federal taxes)
Valuation allowance on state tax attributes (net of federal
taxes)
Year in which net operating loss or credit carryforwards will
begin to expire
(d)
(e)
$
130 $
27
281
264
5,629
341
73
2035
$
—
—
—
118
—
—
—
N/A
— $
—
—
82
1,286
51
4
2032
— $
—
—
55
1,187
77
—
2033
— $
—
—
—
1,509
104
32
2029
—
—
—
—
—
—
—
N/A
$
$
—
—
—
2
743
50
32
2035
—
—
—
11
736
52
—
2031
__________
(a) For Exelon, the federal net operating loss carryforward has an indefinite carryforward period.
(b) For Exelon, the federal general business credit carryforward will begin expiring in 2035.
(c) For Exelon, ComEd, PECO, BGE, DPL and ACE, the Corporate Alternative Minimum Tax credit carryforward has an indefinite carryforward period.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
(d) For Exelon, a full valuation allowance has been recorded against certain separate company state net operating loss carryforwards that are expected to expire before realization. For PECO, a valuation allowance has
been recorded against certain Pennsylvania net operating losses that are expected to expire before realization. For DPL, a full valuation allowance has been recorded against Delaware net operating losses
carryforwards due to a change in Delaware tax law that restricts the ability for corporate taxpayers to monetize net operating losses.
(e) A portion of Exelon's, BGE's, and DPL's Maryland state net operating loss carryforward have an indefinite carryforward period.
Tabular Reconciliation of Unrecognized Tax Benefits
The following table presents changes in unrecognized tax benefits, for Exelon, PHI, and ACE. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.
Note 13 — Income Taxes
Balance at January 1, 2021
Change to positions that only affect timing
Increases based on tax positions related to 2021
Increases based on tax positions prior to 2021
Decreases based on tax positions prior to 2021
Balance at December 31, 2021
Change to positions that only affect timing
Increases based on tax positions related to 2022
Increases based on tax positions prior to 2022
Decreases based on tax positions prior to 2022
Balance at December 31, 2022
Change to positions that only affect timing
Increases based on tax positions related to 2023
Increases based on tax positions prior to 2023
Decreases based on tax positions prior to 2023
Balance at December 31, 2023
Exelon
(a)
PHI
ACE
125
$
52
$
13
4
4
(3)
3
1
—
—
143
$
56
$
(1)
3
3
—
$
148
(57)
3
1
(1)
1
2
—
—
59
(9)
1
—
—
$
94
$
51
$
15
1
—
—
—
16
1
—
—
—
17
(2)
—
—
—
15
$
$
$
$
______
(a) At December 31, 2023 and 2022, Exelon recorded a receivable of $31 million and $50 million, respectively, in noncurrent Other assets in the Consolidated Balance Sheet for Constellation’s share of unrecognized tax
benefits for periods prior to the separation.
Recognition of Unrecognized Tax Benefits
The following table presents Exelon's unrecognized tax benefits that, if recognized, would decrease the effective tax rate. The Utility Registrants' amounts are not material.
December 31, 2023
December 31, 2022
December 31, 2021
$
Exelon
71
90
77
Unrecognized tax benefits for which significant increases or decreases are possible within 12 months after the reporting date
At December 31, 2023, ACE has approximately $14 million of unrecognized state tax benefits that could significantly decrease within the 12 months after the reporting date based on the outcome of
pending court cases involving other taxpayers. The unrecognized tax benefit, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
Total Amounts of Interest and Penalties Recognized
The following table represents the net interest and penalties receivable (payable) related to tax positions reflected in Exelon's Consolidated Balance Sheets. The Utility Registrants' amounts are not
material.
Net interest and penalties receivable at
December 31, 2023
(a)
December 31, 2022
(b)
$
Exelon
62
45
__________
(a) At December 31, 2023, Exelon classified $21 million and $41 million of the interest receivable as current and noncurrent, respectively, based on the expected timing for settlement in cash. At December 31, 2023, Exelon
recorded a receivable of $5 million in noncurrent Other assets in the Consolidated Balance Sheet for Constellation's share of net interest for periods prior to the separation.
(b) At December 31, 2022, the interest receivable balance is not expected to be settled in cash within the next twelve months and is therefore classified as a noncurrent receivable. At December 31, 2022, Exelon recorded a
receivable of $1 million in noncurrent Other assets in the Consolidated Balance Sheet for Constellation's share of net interest for periods prior to the separation.
The Registrants did not record material interest and penalty expense related to tax positions reflected in their Consolidated Balance Sheets. Interest expense and penalty expense are recorded in Interest
expense, net and Other, net, respectively, in Other income and deductions in the Registrants Consolidated Statements of Operations and Comprehensive Income.
Description of Tax Years Open to Assessment by Major Jurisdiction
Major Jurisdiction
Federal consolidated income tax returns
(a)
Delaware separate corporate income tax returns
District of Columbia combined corporate income tax returns
Illinois unitary corporate income tax returns
Maryland separate company corporate net income tax returns
New Jersey separate corporate income tax returns
New Jersey combined corporate income tax returns
New Jersey separate corporate income tax returns
New York combined corporate income tax returns
Pennsylvania separate corporate income tax returns
Pennsylvania separate corporate income tax returns
Open Years
2010-2022
Same as federal
2020-2022
2012-2022
Same as federal
2017-2018
2019-2022
2019-2022
2015-2022
2020-2022
2020-2022
Registrants Impacted
All Registrants
DPL
Exelon, PHI, Pepco
Exelon, ComEd
BGE, Pepco, DPL
Exelon
Exelon
ACE
Exelon
Exelon
PECO
__________
(a) Certain registrants are only open to assessment for tax years since joining the Exelon federal consolidated group; BGE beginning in 2012 and PHI, Pepco, DPL, and ACE beginning in 2016.
Other Tax Matters
Separation (Exelon)
In the first quarter of 2022, in connection with the separation, Exelon recorded an income tax expense related to continuing operations of $148 million primarily due to the long-term marginal state income
tax rate change of $54 million discussed further below, the recognition of valuation allowances of approximately $40 million against the net deferred tax assets positions for certain standalone state filing
jurisdictions, the write-off of federal and state tax credits subject to recapture of $17 million, and nondeductible transaction costs for federal and state taxes of $24 million.
Tax Matters Agreement (Exelon)
In connection with the separation, Exelon entered into a TMA with Constellation. The TMA governs the respective rights, responsibilities, and obligations between Exelon and Constellation after the
separation with respect to tax liabilities, refunds and attributes for open tax years that Constellation was part of Exelon’s consolidated group for U.S. federal, state, and local tax purposes.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
Indemnification for Taxes. As a former subsidiary of Exelon, Constellation has joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods prior to the
separation. The TMA specifies that Constellation is liable for their share of taxes required to be paid by Exelon with respect to taxable periods prior to the separation to the extent Constellation would have
been responsible for such taxes under the existing Exelon tax sharing agreement. In 2023, Exelon remitted $9 million of payments to Constellation. At December 31, 2023, Exelon recorded a payable of
$11 million in Other current liabilities that is due to Constellation.
Tax Refunds. The TMA specifies that Constellation is entitled to their share of any future tax refunds claimed by Exelon with respect to taxable periods prior to the separation to the extent that Constellation
would have received such tax refunds under the existing Exelon tax sharing agreement.
Tax Attributes. At the date of separation certain tax attributes, primarily pre-closing tax credit carryforwards, that were generated by Constellation were required by law to be allocated to Exelon. The TMA
also provides that Exelon will reimburse Constellation when those allocated tax attribute carryforwards are utilized. In 2023, Exelon remitted $21 million of payments to Constellation for the utilization of
pre-closing tax credit carryforwards. At December 31, 2023, Exelon recorded a payable of $182 million and $331 million in Other current liabilities and Other deferred credits and other liabilities,
respectively, in the Consolidated Balance Sheet for tax attribute carryforwards that are expected to be utilized and reimbursed to Constellation.
Corporate Alternative Minimum Tax (All Registrants)
On August 16, 2022, the IRA was signed into law and implemented a new corporate alternative minimum tax (CAMT) that imposes a 15.0% tax on modified GAAP net income. Corporations are entitled to
a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax exceeds the
CAMT.
Based on the existing statue, Exelon and each of the Utility Registrants will be subject to and will report the CAMT on a separate Registrant basis in the Consolidated Statements of Operations and
Comprehensive Income and the Consolidated Balance Sheets. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent Exelon’s consolidated deferred tax
liabilities exceed the minimum tax credit carryforward. Exelon’s deferred tax liabilities are expected to exceed the minimum tax credit carryforward for the foreseeable future and thus no valuation allowance
is required. Exelon is continuing to assess the financial statement impacts of the IRA and will update estimates based on future guidance issued by the U.S. Treasury.
Long-Term Marginal State Income Tax Rate (All Registrants)
Quarterly, Exelon reviews and updates its marginal state income tax rates for material changes in state tax laws and state apportionment. The Registrants remeasure their existing deferred income tax
balances to reflect the changes in marginal rates, which results in either an increase or a decrease to their net deferred income tax liability balances. Utility Registrants record corresponding regulatory
liabilities or assets to the extent such amounts are probable of settlement or recovery through customer rates and an adjustment to income tax expense for all other amounts. In the third quarter of 2023,
Exelon updated its marginal state income tax rates for changes in state apportionment. The changes in marginal rates in the third quarter resulted in a decrease of $54 million to the deferred tax liability at
Exelon, and a corresponding adjustment to income tax expense, net of federal taxes. There were no impacts to ComEd, BGE, PHI, Pepco, DPL, and ACE for the years ended December 31, 2023, 2022,
and 2021.
December 31, 2023
Decrease to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes
December 31, 2022
Increase to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes
December 31, 2021
Increase to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes
Pennsylvania Corporate Income Tax Rate Change (Exelon and PECO)
Exelon
$
(54)
67
27
On July 8, 2022, Pennsylvania enacted House Bill 1342, which will permanently reduce the corporate income tax rate from 9.99% to 4.99%. The tax rate will be reduced to 8.99% for the 2023 tax year.
Starting with the 2024 tax year, the rate is reduced by 0.50% annually until it reaches 4.99% in 2031. As a result of the rate change, in the
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 13 — Income Taxes
third quarter of 2022, Exelon and PECO recorded a one-time decrease to deferred income taxes of $390 million with a corresponding decrease to the deferred income taxes regulatory asset of $428 million
for the amounts that are expected to be settled through future customer rates and an increase to income tax expense of $38 million (net of federal taxes). The tax rate decrease is not expected to have a
material ongoing impact to Exelon’s and PECO’s financial statements. There were no changes to PECO's marginal state income tax rates for the years ended December 31, 2022, and 2021.
Allocation of Tax Benefits (All Registrants)
The Utility Registrants are party to an agreement with Exelon and other subsidiaries of Exelon that provides for the allocation of consolidated tax liabilities and benefits (Tax Sharing Agreement). The Tax
Sharing Agreement provides that each party is allocated an amount of tax similar to that which would be owed had the party been separately subject to tax. In addition, any net federal and state benefits
attributable to Exelon are reallocated to the other Registrants. That allocation is treated as a contribution from Exelon to the party receiving the benefit.
The following table presents the allocation of tax benefits from Exelon under the Tax Sharing Agreement, for the year ended December 31, 2023, 2022, and 2021.
December 31, 2023
December 31, 2022
(a)
(b)
December 31, 2021
(c)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
13
$
1
1
$
19
47
19
— $
—
—
$
10
28
17
4
$
23
16
— $
3
—
2
2
—
__________
(a) BGE and DPL did not record an allocation of federal tax benefits from Exelon under the Tax Sharing Agreement as a result of a tax net operating loss.
(b) BGE did not record an allocation of federal tax benefits from Exelon under the Tax Sharing Agreement as a result of a tax net operating loss.
(c) BGE, DPL, and ACE did not record an allocation of federal tax benefits from Exelon under the Tax Sharing Agreement as a result of a tax net operating loss.
14. Retirement Benefits (All Registrants)
Exelon sponsors defined benefit pension and OPEB plans. Substantially all non-union employees and electing union employees hired on or after January 1, 2001 participate in cash balance pension plans.
Effective January 1, 2009, substantially all newly-hired union-represented employees participate in cash balance pension plans. Effective February 1, 2018 for most newly-hired BSC non-represented, non-
craft, employees, January 1, 2021 for most newly-hired utility management employees, and for certain newly-hired union employees pursuant to their collective bargaining agreements, these newly-hired
employees are not eligible for pension benefits, and will instead be eligible to receive an enhanced non-discretionary employer contribution in an Exelon defined contribution savings plan. Effective January
1, 2018, most newly-hired non-represented, non-craft, employees are not eligible for OPEB benefits and employees represented by Local 614 are not eligible for retiree health care benefits. Effective
January 1, 2021, most non-represented, non-craft, employees who are under the age of 40 are not eligible for retiree health care benefits. Effective January 1, 2022, management employees retiring on or
after that date are no longer eligible for retiree life insurance benefits.
Effective February 1, 2022, in connection with the separation, pension and OPEB obligations and assets for current and former employees of the Constellation business and certain other former employees
of Exelon and its subsidiaries transferred to pension and OPEB plans and trusts maintained by Constellation or its subsidiaries. The Exelon New England Union Employees Pension Plan and Constellation
Mystic Power, LLC Union Employees Pension Plan Including Plan A and Plan B were transferred. The following OPEB plans were also transferred: Constellation Mystic Power, LLC Post-Employment
Medical Savings Account Plan; Exelon New England Union Post-Employment Medical Savings Account Plan; and the Nine Mile Point Nuclear Station, LLC Medical Care and Prescription Drug Plan for
Retired Employees.
As a result of the separation, Exelon restructured certain of its qualified pension plans. Pension obligations and assets for current and former employees continuing with Exelon and who were participants in
the Exelon Employee Pension Plan for Clinton, TMI, and Oyster Creek, Pension Plan of Constellation Energy Nuclear Group, LLC, and Nine Mile Point Pension Plan were merged into the Pension Plan of
Constellation Energy
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Group, Inc, which was subsequently renamed, Exelon Pension Plan (EPP). Exelon employees who participated in these plans prior to the separation now participate in the EPP. The merging of the plans
did not change the benefits offered to the plan participants and, thus, had no impact on Exelon's pension obligations.
The tables below show the pension and OPEB plans in which current and former employees of each operating company participated as of December 31, 2023:
Name of Plan:
Qualified Pension Plans:
Exelon Corporation Retirement Program (ECRP)
Exelon Corporation Pension Plan for Bargaining Unit Employees (PPBU)
Exelon Pension Plan (EPP)
Pepco Holdings LLC Retirement Plan (PHI Qualified)
Non-Qualified Pension Plans:
Exelon Corporation Supplemental Pension Benefit Plan and 2000 Excess Benefit Plan (SPBP)
Exelon Corporation Supplemental Management Retirement Plan (SMRP)
Constellation Energy Group, Inc. Senior Executive Supplemental Plan
Constellation Energy Group, Inc. Supplemental Pension Plan
Constellation Energy Group, Inc. Benefits Restoration Plan
Baltimore Gas & Electric Company Executive Benefit Plan
Baltimore Gas & Electric Company Manager Benefit Plan
Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan
Conectiv Supplemental Executive Retirement Plan
Pepco Holdings LLC Combined Executive Retirement Plan
Name of Plan:
OPEB Plans:
PECO Energy Company Retiree Medical Plan (East)
Exelon Corporation Health Care Program (West)
Pepco Holdings LLC Welfare Plan for Retirees (PHI PRW)
Exelon Corporation Employees’ Life Insurance Plan
Exelon Corporation Health Reimbursement Arrangement Plan
BGE Retiree Medical Plan
BGE Retiree Dental Plan
Exelon Retiree Medical Plan of Constellation Energy Nuclear Group, LLC
Exelon Retiree Dental Plan of Constellation Energy Nuclear Group, LLC
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Company
(a)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Operating Company
(a)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
__________
(a) Employees generally remain in their legacy benefit plans when transferring between operating companies.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Exelon’s traditional and cash balance pension plans are intended to be tax-qualified defined benefit plans. Exelon has elected that the trusts underlying these plans be treated as qualified trusts under the
IRC. If certain conditions are met, Exelon can deduct payments made to the qualified trusts, subject to certain IRC limitations.
Benefit Obligations, Plan Assets, and Funded Status
As of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. The remeasurement and separation resulted in a decrease to the Pension obligation, net of
plan assets, of $921 million and a decrease to the OPEB obligation of $893 million. Additionally, AOCI decreased by $1,994 million (after-tax) and Regulatory assets and liabilities increased by $14 million
and $5 million, respectively. Key assumptions were held consistent with the year end December 31, 2021 assumptions with the exception of the discount rate.
During the first quarter of 2023, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of January 1, 2023. This valuation resulted in an increase to the pension
obligation of $27 million and an increase to the OPEB obligations of $2 million. Additionally, AOCI increased by $10 million (after-tax) and Regulatory assets and liabilities increased by $18 million and $1
million, respectively.
The following tables provide a rollforward of the changes in the benefit obligations and plan assets of Exelon for the most recent two years for all plans combined:
Change in benefit obligation:
Net benefit obligation as of the beginning of year
Service cost
Interest cost
Plan participants’ contributions
Actuarial loss (gain)
Plan amendments
(a)
Settlements
Gross benefits paid
Net benefit obligation as of the end of year
Change in plan assets:
Fair value of net plan assets as of the beginning of year
Actual return on plan assets
Employer contributions
Plan participants’ contributions
Gross benefits paid
Settlements
Fair value of net plan assets as of the end of year
Pension Benefits
OPEB
2023
2022
2023
2022
10,677 $
155
578
—
406
4
(42)
(790)
14,236 $
236
439
—
(3,379)
—
—
(855)
1,884 $
26
101
27
55
—
—
(185)
10,988 $
10,677 $
1,908 $
Pension Benefits
OPEB
2023
2022
2023
2022
9,521 $
12,165 $
1,351 $
638
75
—
(790)
(42)
(2,359)
570
—
(855)
—
108
54
27
(185)
—
9,402 $
9,521 $
1,355 $
2,502
41
76
26
(604)
—
—
(157)
1,884
1,665
(225)
42
26
(157)
—
1,351
$
$
$
$
__________
(a) The pension and OPEB losses in 2023 primarily reflect a decrease in the discount rate. The pension and OPEB gains in 2022 primarily reflect an increase in the discount rate.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Exelon presents its benefit obligations and plan assets net on its Consolidated Balance Sheets within the following line items:
Other current liabilities
Pension obligations
Non-pension postretirement benefit obligations
Unfunded status (net benefit obligation less plan assets)
Pension Benefits
2023
2022
2023
$
$
15
$
1,571
—
1,586 $
47
$
1,109
—
1,156 $
OPEB
$
26
—
527
553 $
2022
26
—
507
533
The following table provides the ABO and fair value of plan assets for all pension plans with an ABO in excess of plan assets. Information for pension and OPEB plans with projected benefit obligations
(PBO) and accumulated postretirement benefit obligation (APBO), respectively, in excess of plan assets has been disclosed in the Obligations and Plan Assets table above as all pension and OPEB plans
are underfunded.
ABO
Fair value of net plan assets
Components of Net Periodic Benefit Costs
Exelon
2023
2022
$
10,376 $
9,279
10,108
9,427
The majority of the 2023 pension benefit cost for the Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 5.53%. The majority of
the 2023 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.50% for funded plans and a discount rate of 5.51%.
A portion of the net periodic benefit cost for all plans is capitalized in the Consolidated Balance Sheets. The following table presents the components of Exelon’s net periodic benefit costs, prior to
capitalization, for the years ended December 31, 2023, 2022, and 2021.
Components of net periodic benefit cost:
Service cost
Interest cost
Expected return on assets
Amortization of:
Prior service cost (credit)
Actuarial loss (gain)
Settlement and other charges
Net periodic benefit cost
2023
Pension Benefits
2022
2021
2023
OPEB
2022
2021
$
$
155 $
236 $
294 $
26
$
41
$
578
(755)
2
166
20
439
(822)
2
295
—
406
(843)
2
399
7
101
(83)
(10)
(2)
—
166 $
150 $
265 $
32
$
76
(99)
(19)
12
—
11
$
51
69
(99)
(25)
27
1
24
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Cost Allocation to Exelon Subsidiaries
All Registrants account for their participation in Exelon’s pension and OPEB plans by applying multi-employer accounting. Exelon allocates costs related to its pension and OPEB plans to its subsidiaries
based on both active and retired employee participation in each plan.
The amounts below represent the Registrants' allocated pension and OPEB costs (benefit). For Exelon, the service cost component is included in Operating and maintenance expense and Property, plant,
and equipment, net while the non-service cost components are included in Other, net and Regulatory assets. For the Utility Registrants, the service cost and non-service cost components are included in
Operating and maintenance expense and Property, plant, and equipment, net in their consolidated financial statements.
For the Years Ended December 31,
2023
2022
2021
Components of AOCI and Regulatory Assets
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
198 $
161
288
$
26
60
129
(14) $
(9)
8
$
56
44
64
$
99
53
49
$
34
9
6
$
18
3
2
13
12
11
Exelon recognizes the overfunded or underfunded status of defined benefit pension and OPEB plans as an asset or liability on its Consolidated Balance Sheets, with offsetting entries to AOCI and
Regulatory assets (liabilities). A portion of current year actuarial (gains) losses and prior service costs (credits) is capitalized in Exelon’s Consolidated Balance Sheets to reflect the expected regulatory
recovery of these amounts, which would otherwise be recorded to AOCI. The following tables provide the components of AOCI and Regulatory assets (liabilities) for Exelon for the years ended
December 31, 2023, 2022, and 2021 for all plans combined. The tables include amounts related to Generation prior to the separation.
Changes in plan assets and benefit obligations recognized in AOCI and Regulatory
assets (liabilities):
Current year actuarial loss (gain)
Amortization of actuarial (loss) gain
Separation of Constellation
Current year prior service cost
Amortization of prior service (cost) credit
Settlements
Total recognized in AOCI and Regulatory assets (liabilities)
Total recognized in AOCI
Total recognized in Regulatory assets (liabilities)
Pension Benefits
2023
2022
2021
2023
OPEB
2022
2021
$
$
$
$
523 $
(166)
(226) $
(295)
(700) $
(598)
—
4
(2)
(20)
(2,631)
—
(2)
—
—
—
(3)
(27)
339 $
(3,154) $
(1,328) $
99
$
240 $
(2,719) $
(435) $
(747) $
(581) $
30
2
—
—
10
—
42
$
$
4 $
38
$
(271) $
(12)
(43)
—
19
—
(270)
(37)
—
—
34
(1)
(307) $
(274)
(74) $
(233) $
(130)
(144)
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Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
The following table provides the components of gross AOCI and Regulatory assets (liabilities) for Exelon that have not been recognized as components of periodic benefit cost as of December 31, 2023
and 2022, respectively, for all plans combined:
Prior service cost (credit)
Actuarial loss (gain)
Total
Total included in AOCI
Total included in Regulatory assets (liabilities)
Average Remaining Service Period
Pension Benefits
2023
2022
2023
$
$
$
$
21
$
3,948
3,969 $
972 $
2,997 $
19
$
3,611
3,630 $
873 $
2,757 $
OPEB
(45) $
(101)
(146) $
(17) $
(129) $
2022
(55)
(133)
(188)
(21)
(167)
For pension benefits, Exelon amortizes its unrecognized prior service costs (credits) and certain actuarial (gains) losses, as applicable, based on participants’ average remaining service periods.
For OPEB, Exelon amortizes its unrecognized prior service costs (credits) over participants’ average remaining service period to benefit eligibility age and amortizes certain actuarial (gains) losses over
participants’ average remaining service period to expected retirement. The resulting average remaining service periods for pension and OPEB were as follows:
Pension plans
OPEB plans:
Benefit Eligibility Age
Expected Retirement
Assumptions
2023
2022
2021
12.6
8.1
9.3
12.5
7.9
9.1
12.4
7.6
8.8
The measurement of the plan obligations and costs of providing benefits under Exelon’s defined benefit and OPEB plans involves various factors, including the development of valuation assumptions and
inputs and accounting policy elections. The measurement of benefit obligations and costs is impacted by several assumptions and inputs, as shown below, among other factors. When developing the
required assumptions, Exelon considers historical information as well as future expectations.
Expected Rate of Return. In determining the EROA, Exelon considers historical economic indicators (including inflation and GDP growth) that impact asset returns, as well as expectations regarding future
long-term capital market performance, weighted by Exelon’s target asset class allocations.
Mortality. The mortality assumption is composed of a base table that represents the current expectation of life expectancy of the population adjusted by an improvement scale that attempts to anticipate
future improvements in life expectancy. For the years ended December 31, 2023 and 2022, Exelon’s mortality assumption utilizes the SOA 2019 base table (Pri-2012) and MP-2021 improvement scale
adjusted to use Proxy SSA ultimate improvement rates.
For Exelon, the following assumptions were used to determine the benefit obligations for the plans as of December 31, 2023 and 2022. Assumptions used to determine year-end benefit obligations are the
assumptions used to estimate the subsequent year’s net periodic benefit costs.
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Table of Contents
Discount rate
(a)
Investment crediting rate
(b)
Rate of compensation increase
Mortality table
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Pension Benefits
OPEB
2023
2022
2023
2022
5.19 %
5.03 %
3.75 %
5.53 %
5.07 %
3.75 %
5.17 %
N/A
3.75 %
5.51 %
N/A
3.75 %
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Health care cost trend on covered charges
N/A
N/A
Initial and ultimate trend rate of 5.00%
Initial and ultimate trend rate of 5.00%
__________
(a) The discount rates above represent the blended rates used to determine the majority of Exelon’s pension and OPEB obligations. Certain benefit plans used individual rates, which range from 5.11% - 5.27% and 5.15% -
5.17% for pension and OPEB plans, respectively, as of December 31, 2023 and 5.46% - 5.60% and 5.49% - 5.51% for pension and OPEB plans, respectively, as of December 31, 2022.
(b) The investment crediting rate above represents a weighted average rate.
The following assumptions were used to determine the net periodic benefit cost for Exelon for the years ended December 31, 2023, 2022 and 2021:
Discount rate
(a)
Investment crediting rate
(b)
Expected return on plan assets
(c)
Rate of compensation increase
Mortality table
2023
Pension Benefits
2022
2021
2023
OPEB
2022
2021
5.53 %
5.07 %
7.00 %
3.75 %
3.24 %
3.75 %
7.00 %
3.75 %
2.58 %
3.72 %
7.00 %
3.75 %
5.51 %
N/A
6.50 %
3.75 %
3.20 %
N/A
6.44 %
3.75 %
2.51 %
N/A
6.46 %
3.75 %
Health care cost trend on covered charges
N/A
N/A
N/A
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP - 2020
improvement scale (adjusted)
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Initial and ultimate rate
of 5.00%
Pri-2012 table with MP- 2021
improvement scale (adjusted)
Pri-2012 table with MP - 2020
improvement scale (adjusted)
Initial and ultimate rate of 5.00% Initial and ultimate rate of 5.00%
__________
(a) The discount rates above represent the blended rates used to establish the majority of Exelon’s pension and OPEB costs. Certain benefit plans used individual rates, which range from 5.46%-5.60% and 5.49%-5.51%
for pension and OPEB plans, respectively, for the year ended December 31, 2023; 2.55%-3.24% and 2.84%-3.20% for pension and OPEB plans; respectively, for the year ended December 31, 2022; and 2.11%-2.73%
and 2.45%-2.63% for pension and OPEB plans, respectively, for the year ended December 31, 2021.
(b) The investment crediting rate above represents a weighted average rate.
(c) Not applicable to pension and OPEB plans that do not have plan assets.
Contributions
Exelon allocates contributions related to its ECRP and PPBU pension plans and East and West OPEB plans to its subsidiaries based on accounting cost. For the EPP pension plan, PHI Qualified, and PHI
PRW plans, pension and OPEB contributions are allocated to the subsidiaries based on employee participation (both active and retired). For Exelon, in connection with the separation, additional qualified
pension contributions of $207 million and $33 million were completed on February 1, 2022 and March 2, 2022, respectively. The following table provides contributions to the pension and OPEB plans:
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Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
2023
$
75
24
1
—
8
1
2
—
Pension Benefits
2022
2021
2023
$
570 $
343 $
176
15
48
69
3
1
7
174
17
57
39
2
1
3
Note 14 — Retirement Benefits
OPEB
2022
2021
$
42
$
8
3
20
9
8
—
—
54
17
—
19
16
11
2
3
63
22
1
24
9
9
—
—
Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit
restrictions and at-risk status as defined by the Pension Protection Act of 2006 (the "Act"), management of the pension obligation, and regulatory implications. The Act requires the attainment of certain
funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and
participant notification). The projected contributions below reflect a funding strategy to make annual contributions with the objective of achieving 100% funded status on an ABO basis over time. This
funding strategy helps minimize volatility of future period required pension contributions. Based on this funding strategy and current market conditions, which are subject to change, Exelon’s estimated
annual qualified pension contributions will be approximately $93 million in 2024. Unlike the qualified pension plans, Exelon’s non-qualified pension plans are not funded, given they are not subject to
statutory minimum contribution requirements.
While OPEB plans are also not subject to statutory minimum contribution requirements, Exelon does fund certain of its plans. For Exelon's funded OPEB plans, contributions generally equal accounting
costs, however, Exelon’s management has historically considered several factors in determining the level of contributions to its OPEB plans, including liabilities management, levels of benefit claims paid,
and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery). The amounts below include benefit payments related to unfunded plans.
The following table provides all Registrants' planned contributions to the qualified pension plans, planned benefit payments to non-qualified pension plans, and planned contributions to OPEB plans in 2024:
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Qualified Pension Plans
Non-Qualified Pension Plans
OPEB
$
93
$
15
$
3
2
17
66
—
—
7
1
1
1
8
1
—
—
47
18
1
14
11
10
—
—
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Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Estimated Future Benefit Payments
Estimated future benefit payments to participants in all of the pension plans and postretirement benefit plans as of December 31, 2023 were:
2024
2025
2026
2027
2028
2029 through 2033
Total estimated future benefits payments through 2033
Plan Assets
$
$
Pension Benefits
OPEB
782 $
783
795
800
792
3,977
7,929 $
152
151
152
151
151
730
1,487
Investment Strategy. On a regular basis, Exelon evaluates its investment strategy to ensure plan assets will be sufficient to pay plan benefits when due. As part of this ongoing evaluation, Exelon may
make changes to its targeted asset allocation and investment strategy.
Exelon has developed and implemented a liability hedging investment strategy for its qualified pension plans that has reduced the volatility of its pension assets relative to its pension liabilities. Exelon is
likely to continue to gradually increase the liability hedging portfolio as the funded status of its plans improves. The overall objective is to achieve attractive risk-adjusted returns that will balance the liquidity
requirements of the plans’ liabilities while striving to minimize the risk of significant losses. Trust assets for Exelon’s OPEB plans are managed in a diversified investment strategy that prioritizes maximizing
liquidity and returns while minimizing asset volatility.
Actual asset returns have an impact on the costs reported for the Exelon-sponsored pension and OPEB plans. The actual asset returns across Exelon’s pension and OPEB plans for the year ended
December 31, 2023 were 7.73% and 9.20%, respectively, compared to an expected long-term return assumption of 7.00% and 6.50%, respectively. Exelon used an EROA of 7.00% and 6.50% to estimate
its 2024 pension and OPEB costs, respectively.
Exelon’s pension and OPEB plan target asset allocations as of December 31, 2023 and 2022 were as follows:
Asset Category
Equity securities
Fixed income securities
Alternative investments
Total
(a)
December 31, 2023
December 31, 2022
Pension Benefits
OPEB
Pension Benefits
OPEB
28 %
44 %
28 %
100 %
44 %
41 %
15 %
100 %
28 %
44 %
28 %
100 %
44 %
41 %
15 %
100 %
__________
(a) Alternative investments include private equity, hedge funds, real estate, and private credit.
Concentrations of Credit Risk. Exelon evaluated its pension and OPEB plans’ asset portfolios for the existence of significant concentrations of credit risk as of December 31, 2023. Types of concentrations
that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country, and individual fund. As of December 31, 2023, there were no significant
concentrations (defined as greater than 10% of plan assets) of risk in Exelon’s pension and OPEB plan assets.
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Table of Contents
Fair Value Measurements
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
The following tables present pension and OPEB plan assets measured and recorded at fair value in Exelon's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy
as of December 31, 2023 and 2022:
Level 1
Level 2
Level 3
Not Subject to
Leveling
Total
Level 1
Level 2
Level 3
Not Subject to
Leveling
Total
December 31, 2023
December 31, 2022
Pension plan assets
(a)
Cash and cash equivalents
$
267
$
Equities
(b)
Fixed income:
U.S. Treasury and agencies
State and municipal debt
Corporate debt
(b)
Other
Fixed income subtotal
Private equity
Hedge funds
Real estate
Private credit
Pension plan assets subtotal
OPEB plan assets
(a)
Cash and cash equivalents
Equities
Fixed income:
U.S. Treasury and agencies
State and municipal debt
Corporate debt
Other
Fixed income subtotal
Hedge funds
Real estate
Private credit
OPEB plan assets subtotal
Total pension and OPEB plan assets
(c)
$
$
$
$
1,513
1,291
—
—
—
1,291
—
—
—
—
$
—
—
184
42
1,792
79
2,097
—
—
—
—
—
1
—
—
9
—
9
—
—
—
—
$
—
$
267
$
200
$
694
—
—
—
788
788
1,166
578
760
626
2,208
1,475
42
1,801
867
4,185
1,166
578
760
626
1,448
986
—
—
—
986
—
—
—
—
$
—
—
178
44
1,975
63
2,260
—
—
—
—
$
—
$
782
—
—
—
744
744
1,169
760
821
658
200
2,230
1,164
44
1,987
807
4,002
1,169
760
821
658
3,071
$
2,097
$
10
$
4,612
$
9,790
$
2,634
$
2,260
$
4,934
$
9,840
45
$
315
15
—
—
175
190
—
—
—
$
—
1
54
7
44
4
109
—
—
—
550
3,621
$
$
110
2,207
$
$
—
—
—
—
—
—
—
—
—
—
—
10
270
—
—
—
206
206
109
88
22
695
5,307
227
$
$
$
—
$
45
$
39
$
—
$
586
69
7
44
385
505
109
88
22
305
17
—
—
161
178
—
—
—
$
—
1
45
8
44
5
102
—
—
—
39
579
62
8
44
353
467
120
106
39
273
—
—
—
187
187
120
106
39
725
5,659
$
$
1,355
11,145
$
$
522
3,156
$
$
103
2,363
$
$
$
$
1,350
11,190
—
—
—
—
12
—
12
—
—
—
—
12
—
—
—
—
—
—
—
—
—
—
—
12
$
$
$
$
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
__________
(a) See Note 17—Fair Value of Financial Assets and Liabilities for a description of levels within the fair value hierarchy.
(b)
Includes derivative instruments of $51 million and $11 million for the years ended December 31, 2023 and 2022, respectively, which have total notional amounts of $3,351 million and $3,434 million as of
December 31, 2023 and 2022, respectively. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the fiscal years ended and do not represent the
amount of Exelon's exposure to credit or market loss.
(c) Excludes net liabilities of $388 million and $318 million as of December 31, 2023 and 2022, respectively, which include certain derivative assets that have notional amounts of $59 million and $69 million as of
December 31, 2023 and 2022, respectively. These items are required to reconcile to the fair value of net plan assets and consist primarily of receivables or payables related to pending securities sales and purchases,
interest and dividends receivable, and repurchase agreement obligations. The repurchase agreements generally have maturities ranging from 3 - 6 months.
The following table presents the reconciliation of Level 3 assets and liabilities for Exelon measured at fair value for pension and OPEB plans for the years ended December 31, 2023 and 2022:
Pension Assets
Balance as of January 1, 2023
Actual return on plan assets:
Relating to assets still held as of the
reporting date
Relating to assets sold during the period
Purchases, sales and settlements:
Purchases
Settlements
(a)
Level 3 transfers (out) in
Balance as of December 31, 2023
Pension Assets
Balance as of January 1, 2022
Actual return on plan assets:
Relating to assets still held as of the reporting date
Relating to assets sold during the period
Purchases, sales and settlements:
Purchases
Settlements
Level 3 transfers out
(a)
(b)
Balance as of December 31, 2022
Fixed Income
Equities
Private Credit
Total
12
$
—
$
—
$
—
—
—
—
(3)
9
$
—
—
—
—
1
1
$
—
—
—
—
—
—
$
Fixed Income
Equities
Private Credit
Total
337 $
2
$
130 $
(9)
(19)
—
(1)
(296)
12
$
—
—
—
—
(2)
—
(15)
13
7
(52)
(83)
$
— $
12
—
—
—
—
(2)
10
469
(24)
(6)
7
(53)
(381)
12
$
$
$
$
__________
(a) Represents cash settlements only.
(b)
In 2022, transfers relate to changes in investment structure for certain investments due to the separation.
Valuation Techniques Used to Determine Fair Value
The techniques used to fair value the pension and OPEB assets invested in cash equivalents are the same as the valuation techniques used to determine the fair value of financial assets. See Cash
Equivalents in Note 17 - Fair Value of Financial Assets and Liabilities for further information. Below outlines the techniques used to fair value the pension and OPEB assets invested in equities, fixed
income, derivatives, private credit, private equity, and real estate investments.
Equities. These investments consist of individually held equity securities, equity mutual funds, and equity commingled funds in domestic and foreign markets. With respect to individually held equity
securities, the trustees obtain prices from pricing services, whose prices are generally obtained from direct feeds from market
228
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
exchanges, which Exelon is able to independently corroborate. Equity securities held individually, including real estate investment trusts, rights, and warrants, are primarily traded on exchanges that
contain only actively traded securities due to the volume trading requirements imposed by these exchanges. The equity securities that are held directly by the trust funds are valued based on quoted prices
in active markets and categorized as Level 1. Certain equity securities have been categorized as Level 2 because they are based on evaluated prices that reflect observable market information, such as
actual trade information or similar securities. Certain private placement equity securities are categorized as Level 3 because they are not publicly traded and are priced using significant unobservable
inputs.
Equity commingled funds and mutual funds are maintained by investment companies, and fund investments are held in accordance with a stated set of fund objectives. The values of some of these funds
are publicly quoted. For mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have been categorized as Level 1. For equity commingled funds and
mutual funds that are not publicly quoted, the fund administrators value the funds using the NAV per fund share, derived from the quoted prices in active markets on the underlying securities and are not
classified within the fair value hierarchy. These investments can typically be redeemed monthly or more frequently, with 30 or less days of notice and without further restrictions.
Fixed income. For fixed income securities, which consist primarily of corporate debt securities, U.S. government securities, foreign government securities, municipal bonds, asset and mortgage-backed
securities, commingled funds, mutual funds, and derivative instruments, the trustees obtain multiple prices from pricing vendors whenever possible, which enables cross-provider validations in addition to
checks for unusual daily movements. A primary price source is identified based on asset type, class, or issue for each security. With respect to individually held fixed income securities, the trustees monitor
prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the portfolio managers challenge an assigned price and the trustees
determine another price source is considered to be preferable. Exelon has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving
such prices. Additionally, Exelon selectively corroborates the fair values of securities by comparison to other market-based price sources. Investments in U.S. Treasury securities have been categorized as
Level 1 because they trade in highly-liquid and transparent markets. Certain private placement fixed income securities have been categorized as Level 3 because they are priced using certain significant
unobservable inputs and are typically illiquid. The remaining fixed income securities, including certain other fixed income investments, are based on evaluated prices that reflect observable market
information, such as actual trade information of similar securities, adjusted for observable differences and are categorized as Level 2.
Other fixed income investments primarily consist of fixed income commingled funds and mutual funds, which are maintained by investment companies and hold fund investments in accordance with a
stated set of fund objectives. The values of some of these funds are publicly quoted. For mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have
been categorized as Level 1. For fixed income commingled funds and mutual funds that are not publicly quoted, the fund administrators value the funds using the NAV per fund share, derived from the
quoted prices in active markets of the underlying securities and are not classified within the fair value hierarchy. These investments typically can be redeemed monthly or more frequently, with 30 or less
days of notice and without further restrictions.
Derivative instruments. These instruments, consisting primarily of futures and swaps to manage risk, are recorded at fair value. Over-the-counter derivatives are valued daily, based on quoted prices in
active markets and trade in open markets, and have been categorized as Level 1. Derivative instruments other than over-the-counter derivatives are valued based on external price data of comparable
securities and have been categorized as Level 2.
Private credit. Private credit investments primarily consist of investments in private debt strategies. These investments are generally less liquid assets with an underlying term of 3 to 5 years and are
intended to be held to maturity. The fair value of these investments is determined by the fund manager or administrator using a combination of valuation models including cost models, market models, and
income models and typically cannot be redeemed until maturity of the term loan. For managed private credit funds, the fair value is determined using a combination of valuation models including cost
models, market models, and income models and typically cannot be redeemed until maturity of the term loan. Managed private credit fund investments are not classified within the fair value hierarchy
because their fair value is determined using NAV or its equivalent as a practical expedient.
229
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 14 — Retirement Benefits
Private equity. These investments include those in limited partnerships that invest in operating companies that are not publicly traded on a stock exchange such as leveraged buyouts, growth capital,
venture capital, distressed investments, and investments in natural resources. These investments typically cannot be redeemed and are generally liquidated over a period of 8 to 10 years from the initial
investment date, which is based on Exelon's understanding of the investment funds. Private equity valuations are reported by the fund manager and are based on the valuation of the underlying
investments, which include unobservable inputs such as cost, operating results, discounted future cash flows, and market based comparable data. These valuation inputs are unobservable. The fair value
of private equity investments is determined using NAV or its equivalent as a practical expedient, and therefore, these investments are not classified within the fair value hierarchy.
Real estate. These investments are funds with a direct investment in pools of real estate properties. These funds are reported by the fund manager and are generally based on independent appraisals of
the underlying investments from sources with professional qualifications, typically using a combination of market based comparable data and discounted cash flows. These valuation inputs are
unobservable. Certain real estate investments cannot be redeemed and are generally liquidated over a period of 8 to 10 years from the initial investment date, which is based on Exelon's understanding of
the investment funds. The remaining liquid real estate investments are generally redeemable from the investment vehicle quarterly, with 30 to 90 days of notice. The fair value of real estate investments is
determined using NAV or its equivalent as a practical expedient, and therefore, these investments are not classified within the fair value hierarchy.
Pension and OPEB assets also include investments in hedge funds. Hedge fund investments include those that employ a broad range of strategies to enhance returns and provide additional diversification.
The fair value of hedge funds is determined using NAV or its equivalent as a practical expedient, and therefore, hedge funds are not classified within the fair value hierarchy. Exelon has the ability to
redeem these investments at NAV or its equivalent subject to certain restrictions that may include a lock-up period or a gate.
Defined Contribution Savings Plan
The Registrants participate in a 401(k) defined contribution savings plan that is sponsored by Exelon. The plan is qualified under applicable sections of the IRC and allows employees to contribute a portion
of their pre-tax and/or after-tax income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents the
employer contributions and employer matching contributions to the savings plan for the years ended December 31, 2023, 2022, and 2021:
For the Years Ended December 31,
2023
2022
2021
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
109 $
91
90
$
47
39
35
$
15
13
12
12
11
12
$
16
14
14
4
4
4
$
3 $
3
3
2
2
2
15. Derivative Financial Instruments (All Registrants)
The Registrants use derivative instruments to manage commodity price risk and interest rate risk related to ongoing business operations. The Registrants do not execute derivatives for speculative or
proprietary trading purposes.
Authoritative guidance requires that derivative instruments be recognized as either assets or liabilities at fair value, with changes in fair value of the derivative recognized in earnings immediately. Other
accounting treatments are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis. These alternative
permissible accounting treatments include NPNS, cash flow hedges, and fair value hedges. At ComEd, derivative economic hedges related to commodities are recorded at fair value and offset by a
corresponding regulatory asset or liability. At Exelon, derivative economic hedges related to interest rates are recorded at fair value and offsets are recorded to Electric operating revenues or Interest
expense based on the activity the transaction is economically hedging. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivatives settle and revenue or
expense is recognized in earnings as the underlying physical commodity is sold or consumed. At Exelon, derivative hedges that qualify and are designated as cash flow hedges are recorded at fair value
and offsets are recorded to AOCI.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 15 — Derivative Financial Instruments
ComEd’s use of cash collateral is generally unrestricted unless ComEd is downgraded below investment grade. Cash collateral held by PECO, BGE, Pepco, DPL, and ACE must be deposited in an
unaffiliated major U.S. commercial bank or foreign bank with a U.S. branch office that meets certain qualifications.
Commodity Price Risk
The Utility Registrants employ established policies and procedures to manage their risks associated with market fluctuations in commodity prices by entering into physical and financial derivative contracts,
which are either determined to be non-derivative or classified as economic hedges. The Utility Registrants procure electric and natural gas supply through a competitive procurement process approved by
each of the respective state utility commissions. The Utility Registrants’ hedging programs are intended to reduce exposure to energy and natural gas price volatility and have no direct earnings impact as
the costs are fully recovered from customers through regulatory-approved recovery mechanisms. The following table provides a summary of the Utility Registrants’ primary derivative hedging instruments,
listed by commodity and accounting treatment.
Registrant
ComEd
PECO
BGE
Pepco
DPL
Commodity
Electricity
Electricity
Electricity
Gas
Electricity
Gas
Electricity
Electricity
Gas
Gas
Accounting Treatment
NPNS
Hedging Instrument
Fixed price contracts based on all requirements in the IPA procurement plans.
Changes in fair value of economic hedge recorded to an
offsetting regulatory asset or liability
(a)
20-year floating-to-fixed energy swap contracts beginning June 2012 based on the renewable
energy resource procurement requirements in the Illinois Settlement Legislation of approximately 1.3
million MWhs per year.
NPNS
NPNS
NPNS
NPNS
NPNS
NPNS
NPNS
Fixed price contracts for default supply requirements through full requirements contracts.
Fixed price contracts to cover about 10% of planned natural gas purchases in support of projected
firm sales.
Fixed price contracts for all SOS requirements through full requirements contracts.
Fixed price contracts for between 10-20% of forecasted system supply requirements for flowing (i.e.,
non-storage) gas for the November through March period.
Fixed price contracts for all SOS requirements through full requirements contracts.
Fixed price contracts for all SOS requirements through full requirements contracts.
Fixed and index priced contracts through full requirements contracts.
Changes in fair value of economic hedge recorded to an
offsetting regulatory asset or liability
(b)
Exchange traded future contracts for up to 50% of estimated monthly purchase requirements each
month, including purchases for storage injections.
ACE
Electricity
NPNS
Fixed price contracts for all BGS requirements through full requirements contracts.
_________
(a) See Note 3—Regulatory Matters for additional information.
(b) The fair value of the DPL economic hedge is not material as of December 31, 2023 and 2022.
The fair value of derivative economic hedges is presented in Other current assets and current and noncurrent Mark-to-market derivative liabilities in Exelon's and ComEd's Consolidated Balance Sheets.
Interest Rate and Other Risk (Exelon)
Exelon Corporate uses a combination of fixed-rate and variable-rate debt to manage interest rate exposure. Exelon Corporate may utilize interest rate derivatives to lock in rate levels in anticipation of
future financings, which are typically designated as cash flow hedges. In addition, Exelon Corporate utilized interest rate swaps to manage interest rate exposure and manage potential fluctuations in
Electric operating revenues at the corporate level in consolidation, which were directly correlated to yields on U.S. Treasury bonds under ComEd's distribution formula rate through December 31, 2023.
These interest rate swaps were accounted for as economic hedges. A hypothetical 50 basis point change in the interest rates associated with Exelon's interest rate swaps as of December 31, 2023 would
result in an immaterial impact to Exelon's Consolidated Net Income.
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Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 15 — Derivative Financial Instruments
Below is a summary of the interest rate hedge balances at December 31, 2023 and 2022.
Other current assets
Other deferred debits (noncurrent assets)
Total derivative assets
Mark-to-market derivative liabilities (current liabilities)
Total mark-to-market derivative liabilities
Total mark-to-market derivative net liabilities
Other deferred debits (noncurrent assets)
Total derivative assets
Mark-to-market derivative liabilities (current liabilities)
Mark-to-market derivative liabilities (noncurrent liabilities)
Total mark-to-market derivative liabilities
Total mark-to-market derivative net assets
Cash Flow Hedges (Interest Rate Risk)
Derivatives Designated
as Hedging Instruments
December 31, 2023
Economic Hedges
Total
Derivatives Designated
as Hedging Instruments
11 $
—
11
(24)
(24)
(13) $
$
6
6
—
(4)
(4)
2
$
1 $
—
1
(22)
(22)
(21) $
December 31, 2022
Economic Hedges
Total
5
$
5
(3)
—
(3)
2
$
12
—
12
(46)
(46)
(34)
11
11
(3)
(4)
(7)
4
$
$
$
$
For derivative instruments that qualify and are designated as cash flow hedges, the changes in fair value each period are initially recorded in AOCI and reclassified into earnings when the underlying
transaction affects earnings. In January 2023, Exelon Corporate entered into $115 million notional of 5-year maturity floating-to-fixed swaps and $115 million notional of 10-year maturity floating-to-fixed
swaps, for a total of $230 million designated as cash flow hedges. In February 2023, Exelon terminated the previously issued floating-to-fixed swaps with a total notional of $1.5 billion upon issuance of
$2.5 billion of debt. See Note 16 – Debt and Credit Agreements for additional information on the debt issuance. Prior to the termination, the AOCI derivative gain was $7 million (net of tax). The
settlements resulted in a cash receipt of $10 million, which is being amortized into Interest expense in Exelon's Consolidated Statement of Operations and Comprehensive Income over the 5-year and 10-
year terms of the swaps.
Since the termination in February 2023, Exelon has entered into additional floating-to-fixed swaps.
The following table provides the notional amounts outstanding held by Exelon at December 31, 2023 and 2022.
5-year maturity floating-to-fixed swaps
10-year maturity floating-to-fixed swaps
Total
December 31, 2023
December 31, 2022
$
$
655 $
655
1,310 $
635
635
1,270
The AOCI derivative loss (net of tax) was $10 million as of December 31, 2023 and gain was $2 million as of December 31, 2022. See Note 21 – Changes in Accumulated Other Comprehensive Income
(Loss) for additional information.
Economic Hedges (Interest Rate and Other Risk)
232
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 15 — Derivative Financial Instruments
Exelon Corporate executes derivative instruments to mitigate exposure to fluctuations in interest rates but for which the fair value or cash flow hedge elections were not made. For derivatives intended to
serve as economic hedges, fair value is recorded on the balance sheet and changes in fair value each period are recognized in earnings or as a regulatory asset or liability, if regulatory requirements are
met, each period.
Exelon Corporate enters into floating-to-fixed interest rate cap swaps to manage a portion of interest rate exposure in connection with existing borrowings. In 2022, Exelon Corporate entered into $1 billion
notional of 18-month maturity floating-to-fixed interest rate cap swaps and $850 million notional of 6-month maturity floating-to-fixed interest rate cap swaps, for a total of $1,850 million notional of floating-
to-fixed interest rate cap swaps as of December 31, 2022. The 6-month maturity floating-to-fixed interest rate cap swaps of $850 million notional matured in March 2023. Exelon receives payments on the
interest rate cap when the floating rate exceeds the fixed rate. Settlements received are immaterial as of December 31, 2023.
Additionally, to manage potential fluctuations in Electric operating revenues related to ComEd's distribution formula rate, Exelon Corporate entered into a total of $4,875 million notional of 30-year constant
maturity treasury interest rate (Corporate 30-year treasury) swaps from 2022 through 2023. The Corporate 30-year treasury swaps matured on December 31, 2023 and Exelon recorded a Mark-to-market
liability of $22 million for the final settlement amount, which was paid in January 2024.
The following table provides the notional amounts outstanding held by Exelon at December 31, 2023 and 2022.
Hedging Instrument
Interest rate cap swaps
Constant maturity treasury interest rate swaps
Total
December 31, 2023
December 31, 2022
$
$
1,000 $
—
1,000 $
1,850
500
2,350
For the year ended December 31, 2023, Exelon Corporate recognized the following net pre-tax mark-to-market losses which are also recognized in Net fair value changes related to derivatives in Exelon's
Consolidated Statements of Cash Flows.
Income Statement Location
Electric operating revenues
Interest expense
Total
Credit Risk
December 31, 2023
(Loss)
December 31, 2022
(Loss)
$
$
(20) $
—
(20) $
(2)
(3)
(5)
The Registrants would be exposed to credit-related losses in the event of non-performance by counterparties on executed derivative instruments. The credit exposure of derivative contracts, before
collateral, is represented by the fair value of contracts at the reporting date. The Utility Registrants have contracts to procure electric and natural gas supply that provide suppliers with a certain amount of
unsecured credit. If the exposure on the supply contract exceeds the amount of unsecured credit, the suppliers may be required to post collateral. The net credit exposure is mitigated primarily by the
ability to recover procurement costs through customer rates. The amount of cash collateral received from external counterparties decreased as of December 31, 2023 due to decreasing energy prices. The
following table reflects the Registrants' cash collateral held from external counterparties, which is recorded in Other current liabilities on their respective Consolidated Balance Sheets, at December 31,
2023 and 2022
233
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Exelon
ComEd
(a)
PECO
BGE
PHI
Pepco
DPL
ACE
$
Note 15 — Derivative Financial Instruments
December 31, 2023
December 31, 2022
148 $
146
—
1
1
1
—
—
297
77
—
23
197
26
121
50
__________
(a) PECO had less than one million in cash collateral held with external parties as of December 31, 2023 and 2022.
The Utility Registrants’ electric supply procurement contracts do not contain provisions that would require them to post collateral. PECO’s, BGE’s, and DPL’s natural gas procurement contracts contain
provisions that could require PECO, BGE, and DPL to post collateral in the form of cash or credit support, which vary by contract and counterparty, with thresholds contingent upon PECO’s, BGE's, and
DPL’s credit rating. As of December 31, 2023, PECO, BGE, and DPL were not required to post collateral for any of these agreements. If PECO, BGE, or DPL lost their investment grade credit rating as of
December 31, 2023, they could have been required to post collateral to their counterparties of $25 million, $61 million, and $10 million, respectively.
16. Debt and Credit Agreements (All Registrants)
Short-Term Borrowings
Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets its short-term liquidity requirements primarily through the
issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial
paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and borrowings from the Exelon
intercompany money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.
Commercial Paper
234
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 16 — Debt and Credit Agreements
The following table reflects the Registrants' commercial paper programs supported by the revolving credit agreements and bilateral credit agreements at December 31, 2023 and 2022:
Commercial Paper Issuer
Exelon
(b)
ComEd
PECO
BGE
(c)
PHI
Pepco
DPL
ACE
Credit Facility Size
at December 31,
Outstanding Commercial
Paper at December 31,
Average Interest Rate on
Commercial Paper Borrowings
at December 31,
2023
(a)
2022
(a)
2023
2022
2023
2022
$
$
$
$
$
$
$
$
4,000
1,000
600
600
900
300
300
300
(d)
(d)
(d)
$
$
$
$
$
$
$
$
4,000 $
1,000 $
600 $
600 $
900 $
300 $
300 $
300 $
1,624 $
1,938
202 $
165 $
336 $
394 $
132 $
63
$
199 $
427
239
409
414
299
115
—
5.58 %
5.53 %
5.57 %
5.59 %
5.60 %
5.59 %
5.60 %
5.60 %
4.77 %
4.71 %
4.71 %
4.81 %
4.78 %
4.79 %
4.76 %
— %
__________
(a) Excludes credit facility agreements arranged at minority and community banks. See below for additional information.
(b)
Includes revolving credit agreements at Exelon Corporate with a maximum program size of $900 million as of December 31, 2023 and December 31, 2022. Exelon Corporate had $527 million in outstanding commercial
paper as of December 31, 2023 and $449 million outstanding commercial paper as of December 31, 2022.
(c) Represents the consolidated amounts of Pepco, DPL, and ACE.
(d) The standard maximum program size for revolving credit facilities is $300 million each for Pepco, DPL and ACE based on the credit agreements in place. However, the facilities at Pepco, DPL, and ACE have the ability
to flex to $500 million, $500 million, and $350 million, respectively. The borrowing capacity may be increased or decreased during the term of the facility, except that (i) the sum of the borrowing capacity must equal the
total amount of the facility, and (ii) the aggregate amount of credit used at any given time by each of Pepco, DPL, or ACE may not exceed $900 million or the maximum amount of short-term debt the company is
permitted to have outstanding by its regulatory authorities. The total number of the borrowing reallocations may not exceed eight per year during the term of the facility. In January 2024, this ability was utilized to
increase ACE's program size to $350 million. As a result, the program size for Pepco did not change and DPL was decreased to $250 million, which prevents the aggregate amount of outstanding short-term debt from
exceeding the $900 million limit.
In order to maintain their respective commercial paper programs in the amounts indicated above, each Registrant must have credit facilities in place, at least equal to the amount of its commercial paper
program. A registrant does not issue commercial paper in an aggregate amount exceeding the then available capacity under its credit facility.
235
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 16 — Debt and Credit Agreements
At December 31, 2023, the Registrants had the following aggregate bank commitments, credit facility borrowings, and available capacity under their respective credit facilities:
Borrower
(a)
(c)
Exelon
ComEd
PECO
BGE
(d)
PHI
Pepco
DPL
ACE
$
Facility Type
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Syndicated Revolver
Aggregate Bank
(b)
Commitment
Facility Draws
Outstanding
Letters of Credit
Actual
To Support
Additional
Commercial
Paper
(c)
Available Capacity at December 31, 2023
4,000
$
1,000
600
600
900
300
300
300
$
—
—
—
—
—
—
—
—
19
10
—
6
—
—
—
—
$
3,981 $
2,357
990
600
594
900
300
300
300
788
435
258
506
168
237
101
__________
(a) On February 1, 2022, Exelon Corporate and the Utility Registrants' respective syndicated revolving credit facilities were replaced with a new 5-year revolving credit facility.
(b) Excludes credit facility agreements arranged at minority and community banks. See below for additional information.
(c)
Includes $900 million aggregate bank commitment related to Exelon Corporate. Exelon Corporate had $3 million outstanding letters of credit as of December 31, 2023. Exelon Corporate had $370 million in available
capacity to support additional commercial paper as of December 31, 2023.
(d) Represents the consolidated amounts of Pepco, DPL, and ACE.
The following table reflects the Registrants' credit facility agreements arranged at minority and community banks at December 31, 2023 and 2022. These are excluded from the Maximum Program Size and
Aggregate Bank Commitment amounts within the two tables above and the facilities are solely used to issue letters of credit.
Borrower
2023
(a)
2022
2023
2022
Aggregate Bank Commitments
Outstanding Letters of Credit
(b)
Exelon
ComEd
PECO
BGE
(c)
PHI
Pepco
DPL
ACE
$
140 $
40
40
15
45
15
15
15
140 $
40
40
15
45
15
15
15
$
10
7
1
2
—
—
—
—
10
7
1
2
—
—
—
—
__________
(a) These facilities were entered into on October 6, 2023 and expire on October 4, 2024.
(b) Represents the consolidated amounts of ComEd, PECO, BGE, Pepco, DPL, and ACE.
(c) Represents the consolidated amounts of Pepco, DPL, and ACE.
Revolving Credit Agreements
On February 1, 2022, Exelon Corporate and the Utility Registrants each entered into a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. The following table
reflects the credit agreements:
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Table of Contents
Exelon Corporate
ComEd
PECO
BGE
Pepco
DPL
ACE
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 16 — Debt and Credit Agreements
Borrower
Aggregate Bank Commitment
Interest Rate
$
$
$
$
$
$
$
900
1,000
600
600
300
300
300
SOFR plus 1.275 %
SOFR plus 1.000 %
SOFR plus 0.900 %
SOFR plus 0.900 %
SOFR plus 1.075 %
SOFR plus 1.000 %
SOFR plus 1.000 %
Borrowings under Exelon’s, ComEd’s, PECO’s, BGE's, Pepco's, DPL's, and ACE's revolving credit agreements bear interest at a rate based upon either the prime rate or a SOFR-based rate, plus an adder
based upon the particular Registrant’s credit rating. The adders for the prime based borrowings and SOFR-based borrowings are presented in the following table:
Prime based borrowings
SOFR-based borrowings
Exelon
(a)
ComEd
PECO
BGE
Pepco
DPL
ACE
0 - 27.5
90.0 - 127.5
—
100.0
—
90.0
—
90.0
7.5
107.5
—
100.0
—
100.0
__________
(a)
Includes interest rate adders at Exelon Corporate of 27.5 basis points and 127.5 basis points for prime and SOFR-based borrowings, respectively.
If any registrant loses its investment grade rating, the maximum adders for prime rate borrowings and SOFR-based rate borrowings would be 65 basis points and 165 basis points, respectively. The credit
agreements also require the borrower to pay a facility fee based upon the aggregate commitments. The fee varies depending upon the respective credit ratings of the borrower. Exelon Corporate and the
Utility Registrants had no outstanding amounts on the revolving credit facilities as of December 31, 2023.
Short-Term Loan Agreements
On March 23, 2017, Exelon Corporate entered into a term loan agreement for $500 million. The loan agreement was renewed in the first quarter of 2023 and was bifurcated into two tranches of
$300 million on March 14, 2023 and $200 million on March 24, 2023. The agreements will expire on March 14, 2024 and March 22, 2024, respectively. Pursuant to the loan agreements, loans made
thereunder bear interest at a variable rate equal to SOFR plus 0.90% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-
term borrowings.
On October 4, 2022, ComEd entered into a 364-day term loan agreement for $150 million with a variable rate equal to SOFR plus 0.75% and an expiration date of October 3, 2023. The proceeds from this
loan were used to repay outstanding commercial paper obligations. The loan agreement is reflected in Exelon's and ComEd's Consolidated Balance Sheets within Short-term borrowings. The balance of
the loan was repaid on January 13, 2023 in conjunction with the $400 million and $575 million First Mortgage Bond agreements that were entered into on January 3, 2023.
On May 9, 2023, ComEd entered into a 364-day term loan agreement for $400 million with a variable rate equal to SOFR plus 1.00% and an expiration date of May 7, 2024. The proceeds from this loan
were used to repay outstanding commercial paper obligations and for general corporate purposes. The loan agreement is reflected in Exelon's and ComEd's Consolidated Balance Sheets within Short-term
borrowings.
Variable Rate Demand Bonds
DPL has outstanding obligations in respect of Variable Rate Demand Bonds (VRDB). VRDBs are subject to repayment on the demand of the holders and, for this reason, are accounted for as short-term
debt in accordance with GAAP. However, these bonds may be converted to a fixed-rate, fixed-term option to establish a maturity which corresponds to the date of final maturity of the bonds. On this basis,
PHI views VRDBs as a source of long-term financing. At both December 31, 2023 and December 31, 2022, $79 million in variable rate demand bonds issued by DPL were outstanding and are included in
the Long-term debt due within one year in Exelon's, PHI's, and DPL's Consolidated Balance Sheets.
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Table of Contents
Long-Term Debt
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 16 — Debt and Credit Agreements
The following tables present the outstanding long-term debt at the Registrants at December 31, 2023 and 2022:
Exelon
Long-term debt
First mortgage bonds
Senior unsecured notes
(a)
Unsecured notes
Notes payable and other
Long-term software licensing agreement
Unsecured tax-exempt bonds
Medium-terms notes (unsecured)
(b)
Loan agreement
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Fair value adjustment
Long-term debt due within one year
Long-term debt
Long-term debt to financing trusts
(c)
Subordinated debentures to ComEd Financing III
Subordinated debentures to PECO Trust III
Subordinated debentures to PECO Trust IV
Total long-term debt to financing trusts
Rates
1.05 % -
2.75 % -
2.25 % -
1.64 % -
2.30 % -
4.15 % -
7.90 %
7.60 %
6.35 %
7.49 %
3.95 %
4.20 %
7.72 %
6.23 %
7.38 % -
6.35 %
10.50 %
5.75 %
Maturity
Date
December 31,
2023
2022
2024 - 2053 $
2025 - 2053
24,776 $
10,824
2026 - 2053
2025 - 2053
2024 - 2025
2024
2027
2024
4,650
84
12
33
10
500
40,889
(80)
(296)
582
(1,403)
$
39,692 $
2033 $
206 $
2028
2033
81
103
$
390 $
22,651
8,324
4,250
86
25
33
10
1,400
36,779
(74)
(257)
626
(1,802)
35,272
206
81
103
390
__________
(a) Substantially all of ComEd’s assets other than expressly excluded property and substantially all of PECO’s, Pepco's, DPL's, and ACE's assets are subject to the liens of their respective mortgage indentures.
(b) Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.85%.
(c) Amounts owed to these financing trusts are recorded as Long-term debt to financing trusts within Exelon’s Consolidated Balance Sheets.
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Table of Contents
ComEd
Long-term debt
First mortgage bonds
Other
(a)
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
Long-term debt to financing trust
(b)
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Rates
2.20 % -
6.45 %
7.49 %
Note 16 — Debt and Credit Agreements
Maturity
Date
December 31,
2023
2022
2024 - 2053 $
11,603 $
10,629
2053
8
11,611
(28)
(97)
(250)
8
10,637
(27)
(92)
—
$
11,236 $
10,518
Subordinated debentures to ComEd Financing III
6.35 %
2033 $
206 $
Total long-term debt to financing trusts
Unamortized debt issuance costs
Long-term debt to financing trusts
__________
(a) Substantially all of ComEd’s assets, other than expressly excluded property, are subject to the lien of its mortgage indenture.
(b) Amount owed to this financing trust is recorded as Long-term debt to financing trust within ComEd’s Consolidated Balance Sheets.
206
(1)
$
205 $
PECO
Long-term debt
First mortgage bonds
Loan agreement
Total long-term debt
(a)
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
Long-term debt to financing trusts
(b)
Subordinated debentures to PECO Trust III
Subordinated debentures to PECO Trust IV
Long-term debt to financing trusts
Rates
2.80 % -
5.95 %
2.00 %
7.38 % -
10.50 %
5.75 %
Maturity
Date
December 31,
2023
2022
2025 - 2052 $
5,200 $
2023
—
5,200
(24)
(42)
—
$
5,134 $
2028 $
2033
$
81
$
103
184 $
206
206
(1)
205
4,625
50
4,675
(24)
(39)
(50)
4,562
81
103
184
__________
(a) Substantially all of PECO’s assets are subject to the lien of its mortgage indenture.
(b) Amounts owed to this financing trust are recorded as Long-term debt to financing trusts within PECO’s Consolidated Balance Sheets.
239
Table of Contents
BGE
Long-term debt
Unsecured notes
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 16 — Debt and Credit Agreements
Rates
Maturity
Date
December 31,
2023
2022
2.25 % -
6.35 %
2026 - 2053 $
4,650 $
4,650
(12)
(36)
—
$
4,602 $
4,250
4,250
(13)
(30)
(300)
3,907
240
Table of Contents
PHI
Long-term debt
First mortgage bonds
Senior unsecured notes
(a)
Unsecured tax-exempt bonds
Medium-terms notes (unsecured)
Finance leases
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Fair value adjustment
Long-term debt due within one year
Long-term debt
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Rates
1.05 % -
4.15 % -
7.90 %
7.45 %
4.20 %
7.72 %
5.62 %
Note 16 — Debt and Credit Agreements
Maturity
Date
December 31,
2023
2022
2024 - 2053 $
7,972 $
7,397
2032
2024
2027
2025 - 2031
185
33
10
74
8,274
—
(55)
429
(644)
$
8,004 $
185
33
10
76
7,701
4
(47)
462
(591)
7,529
_________
(a) Substantially all of Pepco's, DPL's, and ACE's assets are subject to the liens of their respective mortgage indentures.
Pepco
Long-term debt
First mortgage bonds
(a)
Finance leases
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
________
(a) Substantially all of Pepco's assets are subject to the lien of its mortgage indenture.
DPL
Long-term debt
(a)
First mortgage bonds
Unsecured tax-exempt bonds
Medium-terms notes (unsecured)
Finance leases
Total long-term debt
Unamortized debt discount and premium, net
(b)
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
Rates
2.32 % -
Maturity
Date
December 31,
2023
2022
7.90 %
5.62 %
2024 - 2053
2025 - 2031
$
$
4,125
26
4,151
2
(57)
(405)
3,775
25
3,800
2
(51)
(4)
$
3,691
$
3,747
Rates
1.05 % -
4.15 % -
5.72 %
4.20 %
7.72 %
5.62 %
Maturity
Date
December 31,
2023
2022
2028 - 2053 $
2,024 $
1,874
2024
2027
2025 - 2031
33
10
29
2,096
—
(16)
(84)
$
1,996 $
33
10
32
1,949
—
(11)
(584)
1,354
__________
(a) Substantially all of DPL's assets are subject to the lien of its mortgage indenture.
(b) The amount in the Unamortized debt discount and premium, net category was less than $1 million as of December 31, 2023 and 2022.
241
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
ACE
Long-term debt
First mortgage bonds
Finance leases
(a)
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Long-term debt due within one year
Long-term debt
Rates
2.25 % -
5.80 %
5.62 %
Note 16 — Debt and Credit Agreements
Maturity
Date
December 31,
2023
2022
2024 - 2053 $
1,823 $
2025 - 2031
19
1,842
—
(9)
(154)
1,748
19
1,767
(1)
(9)
(3)
$
1,679 $
1,754
__________
(a) Substantially all of ACE's assets are subject to the lien of its mortgage indenture.
Long-term debt maturities at the Registrants in the periods 2024 through 2028 and thereafter are as follows:
Year
2024
2025
2026
2027
2028
Thereafter
Total
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
$
1,403
1,327
1,615
1,023
1,990
33,921
(a)
$
250
—
500
350
550
10,167
(b)
$
41,279
$
11,817
$
—
350
—
—
81
4,953
5,384
(c)
$
$
— $
644 $
405 $
84
$
—
350
—
—
4,300
166
15
22
358
7,070
6
5
4
3
3,728
6
6
15
3
1,982
4,650 $
8,275 $
4,151 $
2,096 $
154
154
4
3
352
1,175
1,842
__________
(a)
(b)
(c)
Includes $390 million due to ComEd and PECO financing trusts.
Includes $206 million due to ComEd financing trust.
Includes $184 million due to PECO financing trusts.
Long-Term Debt to Affiliates
In connection with the debt obligations assumed by Exelon as part of the Constellation merger, Exelon and subsidiaries of Generation (former Constellation subsidiaries) entered into intercompany loan
agreements that mirror the terms and amounts of the third-party debt obligations of Exelon, resulting in intercompany notes receivable at Exelon Corporate from Generation. In connection with the
separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle the intercompany loan.
Debt Covenants
As of December 31, 2023, the Registrants are in compliance with debt covenants.
17. Fair Value of Financial Assets and Liabilities (All Registrants)
Exelon measures and classifies fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into
three levels as follows:
•
•
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Registrants have the ability to liquidate as of the reporting date.
Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market
data.
242
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
•
Level 3 — unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.
Fair Value of Financial Liabilities Recorded at Amortized Cost
The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, and trust preferred securities (long-term debt to financing trusts or junior
subordinated debentures) at December 31, 2023 and 2022. The Registrants have no financial liabilities classified as Level 1 or measured using the NAV practical expedient.
The carrying amounts of the Registrants’ short-term liabilities as presented in their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these
instruments.
Long-Term Debt, including amounts due within one year
Exelon
41,095
$
$
Carrying Amount
Level 1
(a)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Long-Term Debt to Financing Trusts
Exelon
$
ComEd
PECO
11,486
5,134
4,602
8,648
4,096
2,080
1,833
$
390
205
184
December 31, 2023
Fair Value
Level 2
Level 3
Total
Carrying Amount
December 31, 2022
Fair Value
Level 1
Level 2
Level 3
Total
—
—
—
—
—
—
—
—
—
—
—
$
33,804
$
3,442
$
37,246
$
37,074
$
10,210
4,562
4,145
4,160
2,311
694
939
—
—
—
3,442
1,600
1,134
708
10,210
10,518
4,562
4,145
7,602
3,911
1,828
1,647
4,612
4,207
8,120
3,751
1,938
1,757
$
$
—
—
—
$
390
208
182
$
390
208
182
$
390
205
184
—
—
—
—
—
—
—
—
—
—
—
$
29,902
$
2,327
$
32,229
9,006
3,864
3,613
4,507
2,229
1,164
909
$
$
—
—
—
—
50
—
2,277
1,205
458
614
384
204
180
$
9,006
3,914
3,613
6,784
3,434
1,622
1,523
384
204
180
__________
(a)
Includes unamortized debt issuance costs, unamortized debt discount and premium, net, purchase accounting fair value adjustments, and finance lease liabilities which are not fair valued. Refer to Note 16 — Debt and
Credit Agreements for unamortized debt issuance costs, unamortized debt discount and premium, net, and purchase accounting fair value adjustments and Note 10 — Leases for finance lease liabilities.
243
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
Exelon uses the following methods and assumptions to estimate fair value of financial liabilities recorded at carrying cost:
Type
Long-Term Debt, including amounts due within one year
Level
Registrants
Valuation
Taxable Debt Securities
Variable Rate Financing Debt
Non-Government Backed Fixed Rate
Nonrecourse Debt
Taxable Private Placement Debt Securities
Long-Term Debt to Financing Trusts
Long Term Debt to Financing Trusts
Recurring Fair Value Measurements
2
2
2
3
3
All
The fair value is determined by a valuation model that is based on a conventional discounted cash flow methodology
and utilizes assumptions of current market pricing curves. Exelon obtains credit spreads based on trades of existing
Exelon debt securities as well as other issuers in the utility sector with similar credit ratings. The yields are then
converted into discount rates of various tenors that are used for discounting the respective cash flows of the same tenor
for each bond or note.
Exelon, DPL
Debt rates are reset on a regular basis and the carrying value approximates fair value.
Exelon
Fair value is based on market and quoted prices for its own and other nonrecourse debt with similar risk profiles. Given
the low trading volume in the nonrecourse debt market, the price quotes used to determine fair value will reflect certain
qualitative factors, such as market conditions, investor demand, new developments that might significantly impact the
project cash flows or off-taker credit, and other circumstances related to the project.
Exelon, Pepco, DPL, ACE
Rates are obtained similar to the process for taxable debt securities. Due to low trading volume and qualitative factors
such as market conditions, low volume of investors, and investor demand, these debt securities are Level 3.
Exelon, ComEd, PECO
Fair value is based on publicly traded securities issued by the financing trusts. Due to low trading volume of these
securities and qualitative factors, such as market conditions, investor demand, and circumstances related to each
issue, this debt is classified as Level 3.
The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy at
December 31, 2023 and 2022. Exelon and the Utility Registrants have immaterial and no financial assets or liabilities measured using the NAV practical expedient, respectively:
244
Table of Contents
Exelon
(a)
Assets
Cash equivalents
Rabbi trust investments
Cash equivalents
Mutual funds
Fixed income
Life insurance contracts
Rabbi trust investments subtotal
Interest rate derivative assets
Derivatives designated as hedging instruments
Economic hedges
Interest rate derivative assets subtotal
Total assets
Liabilities
Commodity derivative liabilities
Interest rate derivative liabilities
Derivatives designated as hedging instruments
Economic hedges
Interest rate derivative liabilities subtotal
Deferred compensation obligation
Total liabilities
Total net assets (liabilities)
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
At December 31, 2023
At December 31, 2022
$
618
$
—
$
—
$
618
$
664
$
—
$
—
$
67
53
—
—
120
—
—
—
738
—
—
—
—
—
—
—
—
7
61
68
11
1
12
80
—
(24)
(22)
(46)
(75)
(121)
$
738
$
(41)
$
—
—
—
43
43
—
—
—
43
(133)
—
—
—
—
(133)
(90)
$
67
53
7
104
231
11
1
12
861
(133)
(24)
(22)
(46)
(75)
(254)
62
49
—
—
111
—
—
—
775
—
—
—
—
—
—
607
$
775
$
—
—
7
58
65
6
5
11
76
—
(4)
(3)
(7)
(75)
(82)
(6)
$
—
—
—
40
40
—
—
—
40
(84)
—
—
—
—
(84)
(44)
$
664
62
49
7
98
216
6
5
11
891
(84)
(4)
(3)
(7)
(75)
(166)
725
__________
(a) Excludes cash of $334 million and $345 million at December 31, 2023 and 2022, respectively, and restricted cash of $149 million and $81 million at December 31, 2023 and 2022, respectively, and includes long-term
restricted cash of $174 million and $117 million at December 31, 2023 and 2022, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets.
ComEd, PECO, and BGE
At December 31, 2023
Assets
Cash equivalents
Rabbi trust investments
Mutual funds
Life insurance contracts
(a)
Rabbi trust investments subtotal
Total assets
Liabilities
Commodity derivative liabilities
Deferred compensation obligation
(b)
Total liabilities
Total net assets (liabilities)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
ComEd
PECO
BGE
$
453
$
—
$
—
$
453
$
9
$
—
$
—
$
9
$
—
$
—
$
—
$
—
—
—
453
—
—
—
$
453
$
—
—
—
—
—
(8)
(8)
(8)
$
—
—
—
—
(133)
—
(133)
(133)
—
—
—
453
(133)
(8)
(141)
$
312
$
9
—
9
18
—
—
—
18
$
—
18
18
18
—
(8)
(8)
10
$
—
—
—
—
—
—
—
—
$
9
18
27
36
—
(8)
(8)
28
$
9
—
9
9
—
—
—
9
$
—
—
—
—
—
(4)
(4)
(4)
$
—
—
—
—
—
—
—
—
$
—
9
—
9
9
—
(4)
(4)
5
245
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
At December 31, 2022
Assets
Cash equivalents
Rabbi trust investments
Mutual funds
Life insurance contracts
(a)
Rabbi trust investments subtotal
Total assets
Liabilities
Commodity derivative liabilities
Deferred compensation obligation
(b)
Total liabilities
Total net assets (liabilities)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
ComEd
PECO
BGE
$
392
$
—
$
—
$
392
$
10
$
—
$
—
$
10
$
23
$
—
$
—
$
—
—
—
392
—
—
—
$
392
$
—
—
—
—
—
(8)
(8)
(8)
$
—
—
—
—
(84)
—
(84)
(84)
—
—
—
392
(84)
(8)
(92)
$
300
$
7
—
7
17
—
—
—
17
$
—
15
15
15
—
(7)
(7)
8
$
—
—
—
—
—
—
—
—
$
7
15
22
32
—
(7)
(7)
25
$
7
—
7
30
—
—
—
30
$
—
—
—
—
—
(4)
(4)
(4)
$
—
—
—
—
—
—
—
—
$
23
7
—
7
30
—
(4)
(4)
26
__________
(a) ComEd excludes cash of $86 million and $42 million at December 31, 2023 and 2022, respectively, and restricted cash of $147 million and $77 million at December 31, 2023 and 2022, respectively, and includes long-
term restricted cash of $174 million and $117 million at December 31, 2023 and 2022, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets. PECO excludes cash of $42 million and
$58 million at December 31, 2023 and 2022, respectively. BGE excludes cash of $47 million and $43 million at December 31, 2023 and 2022, respectively, and restricted cash of $1 million and $1 million at December 31,
2023 and 2022, respectively.
(b) The Level 3 balance consists of the current and noncurrent liability of $27 million and $106 million, respectively, at December 31, 2023, and $5 million and $79 million, respectively, at December 31, 2022 related to
floating-to-fixed energy swap contracts with unaffiliated suppliers.
PHI, Pepco, DPL, and ACE
(a)
PHI
Assets
Cash equivalents
Rabbi trust investments
Cash equivalents
Mutual funds
Fixed income
Life insurance contracts
Rabbi trust investments subtotal
Total assets
Liabilities
Deferred compensation obligation
Total liabilities
Total net assets
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
At December 31, 2023
At December 31, 2022
$
107
$
—
$
—
$
107
$
205
$
—
$
—
$
64
9
—
—
73
180
—
—
$
180
$
—
—
—
41
41
41
—
—
41
—
—
7
21
28
28
(13)
(13)
15
$
246
64
9
7
62
142
249
(13)
(13)
59
11
—
—
70
275
—
—
$
236
$
275
$
—
—
7
22
29
29
(14)
(14)
15
$
—
—
—
39
39
39
—
—
39
$
205
59
11
7
61
138
343
(14)
(14)
329
Table of Contents
At December 31, 2023
Assets
Cash equivalents
Rabbi trust investments
Cash equivalents
Life insurance contracts
(a)
Rabbi trust investments subtotal
Total assets
Liabilities
Deferred compensation obligation
Total liabilities
Total net assets
At December 31, 2022
(a)
Assets
Cash equivalents
Rabbi trust investments
Cash equivalents
Life insurance contracts
Rabbi trust investments subtotal
Total assets
Liabilities
Deferred compensation obligation
Total liabilities
Total net assets
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Pepco
DPL
ACE
$
23
$
—
$
—
$
23
$
1
$
—
$
—
$
1
$
—
$
—
$
—
$
63
—
63
86
—
—
86
$
$
—
21
21
21
(1)
(1)
20
$
Pepco
—
41
41
41
—
—
41
63
62
125
148
(1)
(1)
$
147
$
—
—
—
1
—
—
1
$
—
—
—
—
—
—
—
DPL
$
—
—
—
—
—
—
—
$
—
—
—
1
—
—
1
$
—
—
—
—
—
—
—
$
—
—
—
—
—
—
—
$
—
—
—
—
—
—
—
ACE
$
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$
51
$
—
$
—
$
51
$
121
$
—
$
—
$
121
$
1
$
—
$
—
$
59
—
59
110
—
—
$
110
$
—
22
22
22
(1)
(1)
21
$
—
38
38
38
—
—
38
59
60
119
170
(1)
(1)
—
—
—
121
—
—
$
169
$
121
$
—
—
—
—
—
—
—
$
—
—
—
—
—
—
—
—
—
—
121
—
—
$
121
$
—
—
—
1
—
—
1
$
—
—
—
—
—
—
—
$
—
—
—
—
—
—
—
$
—
—
—
—
—
—
—
—
1
—
—
—
1
—
—
1
__________
(a) PHI excludes cash of $96 million and $165 million at December 31, 2023 and 2022, respectively, and restricted cash of $1 million and $3 million at December 31, 2023 and 2022, respectively. Pepco excludes cash of $48
million and $45 million at December 31, 2023 and 2022, respectively, and restricted cash of $1 million and $3 million at December 31, 2023 and 2022, respectively. DPL excludes cash of $15 million and $31 million at
December 31, 2023 and 2022, respectively. ACE excludes cash of $21 million and $71 million at December 31, 2023 and 2022, respectively.
Reconciliation of Level 3 Assets and Liabilities
The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the years ended December 31, 2023 and 2022:
For the year ended December 31, 2023
Balance at December 31, 2022
Total realized / unrealized gains (losses)
Included in net income
Included in regulatory assets/liabilities
(a)
Balance at December 31, 2023
The amount of total gains included in income attributed to the change in unrealized gains
(losses) related to assets and liabilities as of December 31, 2023
$
$
$
247
Exelon
Total
ComEd
Commodity
Derivatives
PHI and Pepco
Life Insurance Contracts
(44) $
3
(49)
(90) $
3 $
(84)
—
(49)
(133)
(b)
(c)
—
$
$
$
40
1
—
41
1
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
For the year ended December 31, 2022
Balance at December 31, 2021
Total realized / unrealized gains (losses)
Included in net income
Included in regulatory assets/liabilities
(a)
Transfers into Level 3
Balance at December 31, 2022
The amount of total gains included in income attributed to the change in unrealized gains
(losses) related to assets and liabilities as of December 31, 2022
Exelon
Total
ComEd
Commodity
Derivatives
PHI and Pepco
Life Insurance Contracts
$
$
$
(182) $
5
135
(2)
(44) $
5 $
(b)
(219)
—
135
—
(84)
—
$
$
$
35
5
—
—
40
5
__________
(a) Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.
(b)
Includes $83 million of decreases in fair value and an increase for realized gains due to settlements of $34 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with
unaffiliated suppliers for the year ended December 31, 2023. Includes $136 million of increases in fair value and a decrease for realized losses due to settlements of $1 million recorded in Purchased power expense
associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the year ended December 31, 2022.
(c) The balance of the current and noncurrent asset was effectively zero as of December 31, 2023. The balance consists of a current and noncurrent liability of $27 million and $106 million, respectively, as of December 31,
2023.
Valuation Techniques Used to Determine Fair Value
Cash Equivalents (All Registrants). Investments with original maturities of three months or less when purchased, including mutual and money market funds, are considered cash equivalents. The fair
values are based on observable market prices and, therefore, are included in the recurring fair value measurements hierarchy as Level 1.
Rabbi Trust Investments (Exelon, PECO, BGE, PHI, Pepco, DPL, and ACE). The Rabbi trusts were established to hold assets related to deferred compensation plans existing for certain active and
retired members of Exelon’s executive management and directors. The Rabbi trusts' assets are included in Investments in the Registrants’ Consolidated Balance Sheets and consist primarily of money
market funds, mutual funds, fixed income securities, and life insurance policies. Money market funds and mutual funds are publicly quoted and have been categorized as Level 1 given the clear
observability of the prices. The fair values of fixed income securities are based on evaluated prices that reflect observable market information, such as actual trade information or similar securities, adjusted
for observable differences and are categorized in Level 2. The life insurance policies are valued using the cash surrender value of the policies, net of loans against those policies, which is provided by a
third-party. Certain life insurance policies, which consist primarily of mutual funds that are priced based on observable market data, have been categorized as Level 2 because the life insurance policies
can be liquidated at the reporting date for the value of the underlying assets. Life insurance policies that are valued using unobservable inputs have been categorized as Level 3, where the fair value is
determined based on the cash surrender value of the policy, which contains unobservable inputs and assumptions. Because Exelon relies on its third-party insurance provider to develop the inputs without
adjustment for the valuations of its Level 3 investments, quantitative information about significant unobservable inputs used in valuing these investments is not reasonably available to Exelon. Therefore,
Exelon has not disclosed such inputs.
Interest Rate Derivatives (Exelon) Exelon may utilize fixed-to-floating or floating-to-fixed interest rate swaps as a means to manage interest rate risk. These interest rate swaps are typically accounted for
as economic hedges. In addition, Exelon may utilize interest rate derivatives to lock in interest rate levels in anticipation of future financings. These interest rate derivatives are typically designated as cash
flow hedges. Exelon determines the current fair value by calculating the net present value of expected payments and receipts under the swap agreement, based on and discounted by the market's
expectation of future interest rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk and other market parameters. As these inputs are based on
observable data and valuations of similar instruments, the interest rate swaps are categorized as Level 2 in the fair value hierarchy. See Note 15 — Derivative Financial Instruments for additional
information on mark-to-market derivatives.
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Fair Value of Financial Assets and Liabilities
Deferred Compensation Obligations (All Registrants). The Registrants’ deferred compensation plans allow participants to defer certain cash compensation into a notional investment account. The
Registrants include such plans in other current and noncurrent liabilities in their Consolidated Balance Sheets. The value of the Registrants’ deferred compensation obligations is based on the market
value of the participants’ notional investment accounts. The underlying notional investments are comprised primarily of equities, mutual funds, commingled funds, and fixed income securities which are
based on directly and indirectly observable market prices. Since the deferred compensation obligations themselves are not exchanged in an active market, they are categorized as Level 2 in the fair value
hierarchy.
The value of certain employment agreement obligations (which are included with the Deferred Compensation Obligation in the tables above) are based on a known and certain stream of payments to be
made over time and are categorized as Level 2 within the fair value hierarchy.
Commodity Derivatives (Exelon and ComEd). On December 17, 2010, ComEd entered into several 20-year floating to fixed energy swap contracts with unaffiliated suppliers for the procurement of long-
term renewable energy and associated RECs. Delivery under the contracts began in June 2012. The fair value of these swaps has been designated as a Level 3 valuation due to the long tenure of the
positions and the internal modeling assumptions. The modeling assumptions include using forward power prices. See Note 15 — Derivative Financial Instruments for additional information on mark-to-
market derivatives.
The following table discloses the significant unobservable inputs to the forward curve used to value mark-to-market derivatives:
Type of trade
Commodity derivatives
Fair Value as of
December 31, 2023
Fair Value as of
December 31, 2022
Valuation
Technique
Unobservable
Input
2023 Range & Arithmetic Average
2022 Range & Arithmetic Average
$
(133)
$
(84)
Discounted Cash Flow
Forward power price
(a)
$
30.27 - $
73.71 $
43.35
$
34.78
- $
75.71 $
48.44
__________
(a) An increase to the forward power price would increase the fair value.
18. Commitments and Contingencies (All Registrants)
Commitments
PHI Merger Commitments (Exelon, PHI, Pepco, DPL, and ACE). Approval of the PHI Merger in Delaware, New Jersey, Maryland, and the District of Columbia was conditioned upon Exelon and PHI
agreeing to certain commitments. The following amounts represent total commitment costs that have been recorded since the acquisition date and the total remaining obligations for Exelon, PHI, Pepco,
DPL, and ACE at December 31, 2023:
Description
Total commitments
Remaining commitments
(a)
Exelon
PHI
Pepco
DPL
ACE
$
513 $
38
320 $
35
120 $
31
89
$
3
111
1
__________
(a) Remaining commitments extend through 2026 and include escrow funds, charitable contributions, and rate credits.
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
Commercial Commitments (All Registrants). The Registrants' commercial commitments at December 31, 2023, representing commitments potentially triggered by future events were as follows:
Exelon
Letters of credit
(b)
Surety bonds
(a)
Financing trust guarantees
Guaranteed lease residual values
(c)
(d)
Total commercial commitments
ComEd
Letters of credit
(b)
Surety bonds
(a)
Financing trust guarantees
(c)
Total commercial commitments
PECO
Letters of credit
(b)
(a)
Surety bonds
Financing trust guarantees
(c)
Total commercial commitments
BGE
Letters of credit
(b)
Surety bonds
(a)
Total commercial commitments
PHI
(b)
Surety bonds
Guaranteed lease residual values
(d)
Total commercial commitments
Pepco
(b)
Surety bonds
Guaranteed lease residual values
(d)
Total commercial commitments
DPL
(b)
Surety bonds
Guaranteed lease residual values
(d)
Total commercial commitments
ACE
(b)
Surety bonds
Guaranteed lease residual values
(d)
Total commercial commitments
Total
2024
2025
2026
2027
2028
Expiration within
27 $
204
—
—
231 $
15
$
46
—
61 $
1 $
2
—
3 $
8 $
3
11 $
96
$
—
96 $
84
$
—
84 $
7 $
—
7 $
5 $
—
5 $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
29 $
204
378
27
638 $
17
$
46
200
263 $
1 $
2
178
181 $
8 $
3
11 $
96
$
27
123 $
84
$
9
93 $
7 $
11
18 $
5 $
7
12 $
250
2 $
—
—
5
7 $
2 $
—
—
2 $
— $
—
—
— $
— $
—
— $
— $
5
5 $
— $
2
2 $
— $
2
2 $
— $
1
1 $
— $
—
—
6
6 $
— $
—
—
— $
— $
—
—
— $
— $
—
— $
— $
6
6 $
— $
2
2 $
— $
3
3 $
— $
1
1 $
— $
—
—
4
4 $
— $
—
—
— $
— $
—
—
— $
— $
—
— $
— $
4
4 $
— $
1
1 $
— $
2
2 $
— $
1
1 $
2029 and beyond
—
—
— $
—
78
6
84
$
— $
—
—
— $
— $
—
78
78
$
— $
—
— $
— $
6
6 $
— $
2
2 $
— $
2
2 $
— $
2
2 $
300
6
306
—
—
200
200
—
—
100
100
—
—
—
—
6
6
—
2
2
—
2
2
—
2
2
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
__________
(a) Exelon and certain of its subsidiaries maintain non-debt letters of credit to provide credit support for certain transactions as requested by third parties.
(b) Surety bonds—Guarantees issued related to contract and commercial agreements, excluding bid bonds. Historically, payments under the guarantees have not been made and the likelihood of payments being required
is remote.
(c) Reflects guarantee of ComEd and PECO securities held by ComEd Financing III, PECO Trust III, and PECO Trust IV.
(d) Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The lease term associated with these assets
ranges from 1 to 8 years. The maximum potential obligation at the end of the minimum lease term would be $61 million guaranteed by Exelon and PHI, of which $20 million, $24 million, and $17 million is guaranteed by
Pepco, DPL, and ACE, respectively. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote.
Environmental Remediation Matters
General (All Registrants). The Registrants’ operations have in the past, and may in the future, require substantial expenditures to comply with environmental laws. Additionally, under federal and state
environmental laws, the Registrants are generally liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous
substances generated by them. The Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by
substances that are considered hazardous under environmental laws. In addition, the Registrants are currently involved in a number of proceedings relating to sites where hazardous substances have
been deposited and may be subject to additional proceedings in the future. Unless otherwise disclosed, the Registrants cannot reasonably estimate whether they will incur significant liabilities for additional
investigation and remediation costs at these or additional sites identified by the Registrants, environmental agencies or others, or whether such costs will be recoverable from third parties, including
customers. Additional costs could have a material, unfavorable impact on the Registrants' financial statements.
MGP Sites (All Registrants). ComEd, PECO, BGE, and DPL have identified sites where former MGP or gas purification activities have or may have resulted in actual site contamination. For some sites,
there are additional PRPs that may share responsibility for the ultimate remediation of each location.
•
•
•
•
ComEd has 17 sites that are currently under some degree of active study and/or remediation. ComEd expects the majority of the remediation at these sites to continue through at least 2031.
PECO has 6 sites that are currently under some degree of active study and/or remediation. PECO expects the majority of the remediation at these sites to continue through at least 2025.
BGE has 4 sites that currently require some level of remediation and/or ongoing activity. BGE expects the majority of the remediation at these sites to continue through at least 2025.
DPL has 1 site that is currently under study and the required cost at the site is not expected to be material.
The historical nature of the MGP and gas purification sites and the fact that many of the sites have been buried and built over, impacts the ability to determine a precise estimate of the ultimate costs prior
to initial sampling and determination of the exact scope and method of remedial activity. Management determines its best estimate of remediation costs using all available information at the time of each
study, including probabilistic and deterministic modeling for ComEd and PECO, and the remediation standards currently required by the applicable state environmental agency. Prior to completion of any
significant clean up, each site remediation plan is approved by the appropriate state environmental agency.
ComEd, pursuant to an ICC order, and PECO, pursuant to a PAPUC order, are currently recovering environmental remediation costs of former MGP facility sites through customer rates. While BGE and
DPL do not have riders for MGP clean-up costs, they have historically received recovery of actual clean-up costs in distribution rates.
In 2023, ComEd and PECO completed an annual study of their future estimated MGP remediation requirements. The study resulted in a $25 million increase to the environmental liability and related
regulatory asset for ComEd.
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
The increase was primarily due to increased costs resulting from inflation and changes in remediation plans. The study did not result in a material change to the environmental liability for PECO.
At December 31, 2023 and 2022, the Registrants had accrued the following undiscounted amounts for environmental liabilities in Accrued expenses, Other current liabilities, and Other deferred credits and
other liabilities in their respective Consolidated Balance Sheets:
December 31, 2023
December 31, 2022
Total Environmental
Investigation and
Remediation Liabilities
Portion of Total Related to
MGP Investigation and
Remediation
Total Environmental
Investigation and
Remediation Liabilities
Portion of Total Related to
MGP Investigation and
Remediation
$
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
$
428
303
27
14
81
79
1
1
$
338
302
25
11
—
—
—
—
$
409
325
25
9
46
44
1
1
355
324
23
8
—
—
—
—
Benning Road Site (Exelon, PHI, and Pepco). In September 2010, PHI received a letter from EPA identifying the Benning Road site as one of six land-based sites potentially contributing to contamination
of the lower Anacostia River. A portion of the site, which is owned by Pepco, was formerly the location of an electric generating facility owned by Pepco subsidiary, Pepco Energy Services (PES), which
became a part of Generation, following the 2016 merger between PHI and Exelon. This generating facility was deactivated in June 2012. The remaining portion of the site consists of a Pepco transmission
and distribution service center that remains in operation. In December 2011, the U.S. District Court for the District of Columbia approved a Consent Decree entered into by Pepco and Pepco Energy
Services (hereinafter "Pepco Entities") with the DOEE, which requires the Pepco Entities to conduct a Remedial Investigation and Feasibility Study (RI/FS) for the Benning Road site and an approximately
10 to 15-acre portion of the adjacent Anacostia River. The purpose of this RI/FS is to define the nature and extent of contamination from the Benning Road site and to evaluate remedial alternatives.
Pursuant to an internal agreement between the Pepco Entities, since 2013, Pepco has performed the work required by the Consent Decree and has been reimbursed for that work by an agreed upon
allocation of costs between the Pepco Entities. In September 2019, the Pepco Entities issued a draft “final” RI report which DOEE approved on February 3, 2020. The Pepco Entities are completing a FS to
evaluate possible remedial alternatives for submission to DOEE. In October, 2022, DOEE approved dividing the work to complete the landside portion of the FS from the waterside portion to expedite the
overall schedule for completion of the project. It is currently anticipated that the landside FS will be complete and approved by DOEE by the end of the first quarter of 2024 and the waterside FS will be
complete and approved by DOEE by the end of the fourth quarter of 2024. Following the completion of each FS, DOEE will issue a Proposed Plan for public comment and then issue a Record of Decision
(ROD) identifying the remedial actions determined to be necessary for the area in question. On October 3, 2023, DOEE and Pepco entered into an addendum to the Benning Consent Decree pursuant to
which Pepco has agreed to fund or perform the remedial actions to be selected by DOEE for the landslide and water areas. This addendum to the Benning Consent Decree has been lodged with the court
in January 2024. Once the addendum is signed and entered by the court it will become effective.
As part of the separation between Exelon and Constellation in February 2022, the internal agreement between the Pepco Entities for completion and payment for the remaining Consent Decree work was
memorialized in a formal agreement for post-separation activities. A second post-separation assumption agreement between Exelon and Constellation transferred any of the potential remaining
remediation liability, if any, of PES/Generation to a non-utility subsidiary of Exelon which going forward will be responsible for those liabilities. Exelon, PHI, and Pepco have determined that a loss
associated with this matter is probable and have accrued an estimated liability, which is included in the table above.
Anacostia River Tidal Reach (Exelon, PHI, and Pepco). Contemporaneous with the Benning Road site RI/FS being performed by the Pepco Entities, DOEE and NPS have been conducting a separate
RI/FS focused on the
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
entire tidal reach of the Anacostia River extending from just north of the Maryland-District of Columbia boundary line to the confluence of the Anacostia and Potomac Rivers. The river-wide RI incorporated
the results of the river sampling performed by the Pepco Entities as part of the Benning RI/FS, as well as similar sampling efforts conducted by owners of other sites adjacent to this segment of the river
and supplemental river sampling conducted by DOEE’s contractor.
On September 30, 2020, DOEE released its Interim ROD for the Anacostia River sediments. The Interim ROD reflects an adaptive management approach which will require several identified “hot spots” in
the river to be addressed first while continuing to conduct studies and to monitor the river to evaluate improvements and determine potential future remediation plans. The adaptive management process
chosen by DOEE is less intrusive, provides more long-term environmental certainty, is less costly, and allows for site specific remediation plans already underway, including the plan for the Benning Road
site to proceed to conclusion.
On July 15, 2022, Pepco received a letter from the District of Columbia's Office of the Attorney General (D.C. OAG) on behalf of DOEE conveying a settlement offer to resolve all PRPs' liability to the
District of Columbia (District) for their past costs and their anticipated future costs to complete the work for the Interim ROD. Pepco responded on July 27, 2022 to enter into settlement discussions. On
October 3, 2023, Pepco and the District entered into another consent decree (the “Anacostia River Consent Decree”) pursuant to which Pepco agreed to pay $47 million to resolve its liability to the District
for all past costs to perform the river-wide RI/FS and all future costs to complete the work required by the Interim ROD. This amount will be paid in four equal annual installments beginning a year after the
effective date of the Anacostia River Consent Decree. The funds will be deposited into the DOEE’s Clean Land Fund for the District’s costs of the Interim ROD work. The Anacostia River Consent Decree
caps Pepco’s liability for these costs and provides Pepco with the right to seek contribution from other potentially responsible parties. The Anacostia River Consent Decree was lodged with the U.S. District
Court for the District of Columbia in January 2024. Once the court signs and approves the Anacostia River Consent Decree it will become effective. Exelon, PHI, and Pepco have accrued a liability for
Pepco’s payment obligations under the Anacostia Consent Decree and management's best estimate of its share of any other future Anacostia River response costs. Pepco has concluded that incremental
exposure remains reasonably possible, but management cannot reasonably estimate a range of loss beyond the amounts recorded, which are included in the table above.
In addition to the activities associated with the remedial process outlined above, CERCLA separately requires federal and state (here including Washington, D.C.) Natural Resource Trustees (federal or
state agencies designated by the President or the relevant state, respectively, or Indian tribes) to conduct an assessment of any damages to natural resources within their jurisdiction as a result of the
contamination that is being remediated. The Trustees can seek compensation from responsible parties for such damages, including restoration costs. During the second quarter of 2018, Pepco became
aware that the Trustees are in the beginning stages of a NRD assessment, a process that often takes many years beyond the remedial decision to complete. Pepco has concluded that a loss associated
with the eventual NRD assessment is reasonably possible. Due to the very early stage of the NRD process, Pepco cannot reasonably estimate the final range of loss potentially resulting from this process.
As noted in the Benning Road Site disclosure above, as part of the separation of Exelon and Constellation in February 2022, an assumption agreement was executed transferring any potential future
remediation liabilities associated with the Benning Site remediation to a non-utility subsidiary of Exelon. Similarly, any potential future liability associated with the Anacostia River Sediment Project (ARSP)
was also assumed by this entity.
Buzzard Point Site (Exelon, PHI, and Pepco). On December 8, 2022, Pepco received a letter from the D.C. OAG, alleging wholly past violations of the District's stormwater discharge and waste disposal
requirements related to operations at the Buzzard Point facility, a 9-acre parcel of waterfront property in Washington, D.C. occupied by an active substation and former steam plant building. The letter also
alleged wholly past violations by Pepco of stormwater discharge requirements related to its district-wide system of underground vaults. On October 3, 2023, Pepco entered into a Consent Order with the
District of Columbia to resolve the alleged violations without any admission of liability. The Consent Order requires Pepco to pay a civil penalty of $10 million. In addition, Pepco has agreed to assess the
environmental conditions at its Buzzard Point facility and conduct any remedial actions deemed necessary as a result of the assessment, and also to assess potential environmental impacts associated
with the operation of its underground vaults. The Consent Order was lodged with the District of Columbia Superior Court in January 2024. The court signed and entered the Consent Order, and it became
effective on February 2, 2024. Exelon, PHI, and Pepco have accrued a liability for the penalty
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
payments and for the projected costs for the required environmental assessments and remediation. Pepco has concluded that incremental exposure is reasonably possible, but the range of loss cannot be
reasonably estimated beyond the amounts included in the table above.
Litigation and Regulatory Matters
Fund Transfer Restrictions (All Registrants). Under applicable law, Exelon may borrow or receive an extension of credit from its subsidiaries. Under the terms of Exelon’s intercompany money pool
agreement, Exelon can lend to, but not borrow from the money pool.
Under applicable law, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE can pay dividends only from retained, undistributed or current earnings. A significant loss recorded at ComEd, PECO, BGE, PHI,
Pepco, DPL, or ACE may limit the dividends that these Registrants can distribute to Exelon.
ComEd has agreed in connection with financings arranged through ComEd Financing III that it will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its right to extend
the interest payment periods on the subordinated debt securities issued to ComEd Financing III; (2) it defaults on its guarantee of the payment of distributions on the preferred trust securities of ComEd
Financing III; or (3) an event of default occurs under the Indenture under which the subordinated debt securities are issued. No such event has occurred.
PECO has agreed in connection with financings arranged through PEC L.P. and PECO Trust IV that PECO will not declare dividends on any shares of its capital stock in the event that: (1) it exercises its
right to extend the interest payment periods on the subordinated debentures, which were issued to PEC L.P. or PECO Trust IV; (2) it defaults on its guarantee of the payment of distributions on the Series
D Preferred Securities of PEC L.P. or the preferred trust securities of PECO Trust IV; or (3) an event of default occurs under the Indenture under which the subordinated debentures are issued. No such
event has occurred.
BGE is subject to restrictions established by the MDPSC that prohibit BGE from paying a dividend on its common shares if (a) after the dividend payment, BGE’s equity ratio would be below 48% as
calculated pursuant to the MDPSC’s ratemaking precedents or (b) BGE’s senior unsecured credit rating is rated by two of the three major credit rating agencies below investment grade. No such event has
occurred.
Pepco is subject to certain dividend restrictions established by settlements approved by the MDPSC and DCPSC that prohibit Pepco from paying a dividend on its common shares if (a) after the dividend
payment, Pepco's equity ratio would be 48% as calculated pursuant to the MDPSC's and DCPSC's ratemaking precedents, of or (b) Pepco’s senior unsecured credit rating is rated by one of the three
major credit rating agencies below investment grade. No such event has occurred.
DPL is subject to certain dividend restrictions established by settlements approved by the DEPSC and MDPSC that prohibit DPL from paying a dividend on its common shares if (a) after the dividend
payment, DPL's equity ratio would be 48% as calculated pursuant to the DEPSC's and MDPSC's ratemaking precedents, or (b) DPL’s corporate issuer or senior unsecured credit rating, or its equivalent, is
rated by any of the three major credit rating agencies below the generally accepted definition of investment grade. No such event has occurred.
ACE is subject to certain dividend restrictions established by settlements approved by the NJBPU that prohibit ACE from paying a dividend on its common shares if (a) after the dividend payment, ACE's
common equity ratio would be 48% as calculated pursuant to the NJBPU's ratemaking precedents, or (b) ACE's senior corporate issuer or senior unsecured credit rating is rated by one of the three major
credit rating agencies below investment grade. ACE is also subject to a dividend restriction which requires ACE to notify and obtain the prior approval of the NJBPU before dividends can be paid if its equity
as a percent of its total capitalization, excluding securitization debt, falls below 30%. No such events have occurred.
DPA and Related Matters (Exelon and ComEd). Exelon and ComEd received a grand jury subpoena in the second quarter of 2019 from the USAO requiring production of information concerning their
lobbying activities in the State of Illinois. On October 4, 2019, Exelon and ComEd received a second grand jury subpoena from the USAO requiring production of records of any communications with certain
individuals and entities. On October 22, 2019, the SEC notified Exelon and ComEd that it had also opened an investigation into their lobbying activities. On July 17, 2020, ComEd entered into a DPA with
the USAO to resolve the USAO investigation. Under the DPA, the USAO filed a single charge alleging that ComEd improperly gave and offered to give jobs, vendor
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
subcontracts, and payments associated with those jobs and subcontracts for the benefit of the former Speaker of the Illinois House of Representatives and the Speaker’s associates, with the intent to
influence the Speaker’s action regarding legislation affecting ComEd’s interests. The DPA provided that the USAO would defer any prosecution of such charge and any other criminal or civil case against
ComEd in connection with the matters identified therein for a three-year period subject to certain obligations of ComEd, including payment to the U.S. Treasury of $200 million, which was paid in November
2020. Exelon was not made a party to the DPA, and therefore the investigation by the USAO into Exelon’s activities ended with no charges being brought against Exelon. The three-year term of the DPA
ended on July 17, 2023, and on that same date the court granted the USAO’s motion to dismiss the pending charge against ComEd that had been deferred by the DPA.
On September 28, 2023, Exelon and ComEd reached a settlement with the SEC, concluding and resolving in its entirety the SEC investigation, which related to the conduct identified in the DPA that was
entered into by ComEd in July 2020 and successfully exited in July 2023. Under the terms of the settlement, Exelon agreed to pay a civil penalty of $46.2 million and Exelon and ComEd agreed to cease
and desist from committing or causing any violations and any future violations of specified provisions of the federal securities laws and rules promulgated thereunder. Exelon recorded an accrual for the full
amount of the penalty in the second quarter of 2023, which was reflected in Operating and maintenance expense within Exelon's Consolidated Statements of Operations and Comprehensive Income and in
Accrued expenses on the Consolidated Balance Sheets. Exelon paid the civil penalty in full on October 4, 2023.
Subsequent to Exelon announcing the receipt of the subpoenas, various lawsuits were filed, and various demand letters were received related to the subject of the subpoenas and, the conduct described in
the DPA and the SEC's investigation, including:
•
•
Four putative class action lawsuits against ComEd and Exelon were filed in federal court on behalf of ComEd customers in the third quarter of 2020 alleging, among other things, civil violations of
federal racketeering laws. In addition, the Citizens Utility Board (CUB) filed a motion to intervene in these cases on October 22, 2020 which was granted on December 23, 2020. On September 9,
2021, the federal court granted Exelon’s and ComEd’s motion to dismiss and dismissed the plaintiffs’ and CUB’s federal law claim with prejudice. The federal court also dismissed the related state
law claims made by the federal plaintiffs and CUB on jurisdictional grounds. Plaintiffs appealed dismissal of the federal law claim to the Seventh Circuit Court of Appeals. Plaintiffs and CUB also
refiled their state law claims in state court and moved to consolidate them with the already pending consumer state court class action, discussed below. On August 22, 2022, the Seventh Circuit
affirmed the dismissal of the consolidated federal cases in their entirety. The time to further appeal has passed and the Seventh Circuit’s decision is final.
Three putative class action lawsuits against ComEd and Exelon were filed in Illinois state court in the third quarter of 2020 seeking restitution and compensatory damages on behalf of ComEd
customers. The cases were consolidated into a single action in October of 2020. In November 2020, CUB filed a motion to intervene in the cases pursuant to an Illinois statute allowing CUB to
intervene as a party or otherwise participate on behalf of utility consumers in any proceeding which affects the interest of utility consumers. On November 23, 2020, the court allowed CUB’s
intervention, but denied CUB's request to stay these cases. Plaintiffs subsequently filed a consolidated complaint, and ComEd and Exelon filed a motion to dismiss on jurisdictional and substantive
grounds on January 11, 2021. Briefing on that motion was completed on March 2, 2021. The parties agreed, on March 25, 2021, along with the federal court plaintiffs discussed above, to jointly
engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On December 23, 2021, the state court granted ComEd and Exelon’s motion
to dismiss with prejudice. On December 30, 2021, plaintiffs filed a motion to reconsider that dismissal and for permission to amend their complaint. The court denied the plaintiffs' motion on
January 21, 2022. Plaintiffs have appealed the court's ruling dismissing their complaint to the First District Court of Appeals. On February 15, 2022, Exelon and ComEd moved to dismiss the
federal plaintiffs' refiled state law claims, seeking dismissal on the same legal grounds asserted in their motion to dismiss the original state court plaintiffs' complaint. The court granted dismissal
of the refiled state claims on February 16, 2022. The original federal plaintiffs appealed that dismissal on February 18, 2022. The two state appeals were consolidated on March 21, 2022. On
September 8, 2023, the Illinois appellate court affirmed the dismissal. Plaintiffs have asked the Illinois Supreme Court to grant them leave to further appeal, but such appeal is not allowed as a
matter of right.
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
Exelon and ComEd filed a response in opposition to the request for leave to further appeal on January 12, 2024.
•
•
•
On November 3, 2022, a plaintiff filed a putative class action complaint in Lake County, Illinois Circuit Court against ComEd and Exelon for unjust enrichment and deceptive business practices in
connection with the conduct giving rise to the DPA. Plaintiff seeks an accounting and disgorgement of any benefits ComEd allegedly obtained from said conduct. Plaintiff served initial discovery
requests on ComEd in December 2022, to which ComEd has responded. ComEd and Exelon filed a motion to dismiss the Complaint on February 3, 2023. On June 16, 2023, the court granted
Exelon and ComEd's motion to dismiss the action with prejudice. Plaintiff filed its notice of appeal of that dismissal on July 17, 2023. Plaintiff's opening appellate brief was filed on October 19,
2023. ComEd and Exelon filed a response on January 2, 2024. Plaintiff filed its reply brief on February 2, 2024. With leave of court, Exelon and ComEd filed a sur-reply on February 14, 2024. The
appellate court has set oral argument for April 3, 2024.
A putative class action lawsuit against Exelon and certain officers of Exelon and ComEd was filed in federal court in December 2019 alleging misrepresentations and omissions in Exelon’s SEC
filings related to ComEd’s lobbying activities and the related investigations. The complaint was amended on September 16, 2020, to dismiss two of the original defendants and add other
defendants, including ComEd. Defendants filed a motion to dismiss in November 2020. The court denied the motion in April 2021. On May 26, 2021, defendants moved the court to certify its order
denying the motion to dismiss for interlocutory appeal. Briefing on the motion was completed in June 2021, and that motion was denied on January 28, 2022. In May 2021, the parties each filed
respective initial discovery disclosures. On June 9, 2021, defendants filed their answer and affirmative defenses to the complaint and the parties engaged thereafter in discovery. On September 9,
2021, the U.S. government moved to intervene in the lawsuit and stay discovery until the parties entered into an amendment to their protective order that would prohibit the parties from requesting
discovery into certain matters, including communications with the U.S. government. The court ordered said amendment to the protective order on November 15, 2021 and discovery resumed. The
court further amended the protective order on October 17, 2022 and extended it until May 15, 2023. Following mediation, the parties reached a settlement of the lawsuit, under which defendants
agreed to pay plaintiffs $173 million. On May 26, 2023, plaintiffs filed a motion for preliminary approval of the settlement, which the court granted on June 9, 2023. The court granted final
settlement approval on September 7, 2023. The settlement was fully covered by insurance and has been paid in full.
Several shareholders have sent letters to the Exelon Board of Directors since 2020 demanding, among other things, that the Exelon Board of Directors investigate and address alleged breaches of
fiduciary duties and other alleged violations by Exelon and ComEd officers and directors related to the conduct described in the DPA. In the first quarter of 2021, the Exelon Board of Directors
appointed a Special Litigation Committee (SLC) consisting of disinterested and independent parties to investigate and address these shareholders' allegations and make recommendations to the
Exelon Board of Directors based on the outcome of the SLC's investigation. In July 2021, one of the demand letter shareholders filed a derivative action against current and former Exelon and
ComEd officers and directors, and against Exelon, as nominal defendant, asserting the same claims made in its demand letter. On October 12, 2021, the parties to the derivative action filed an
agreed motion to stay that litigation for 120 days in order to allow the SLC to continue its investigation, which the court granted. The stay has been extended several times. The parties participated
in a mediation in February 2023, but the matter did not resolve at that time. On April 26 and May 1, 2023, two additional demand letter shareholders each filed a separate derivative lawsuit against
current and former Exelon and ComEd officers and directors, and certain third parties, and against Exelon as nominal defendant, asserting claims similar to those made in their respective demand
letters. On May 25, 2023, certain demand letter shareholders (Settling Shareholders) filed a separate derivative lawsuit against current and former Exelon and ComEd officers and directors, and
against Exelon as nominal defendant, asserting claims similar to those made in their respective demand letters. The then pending derivative lawsuits were subsequently consolidated. On May 26,
2023, prior to lawsuit consolidation, the SLC filed a Notice of Determination and Intent to Seek Court Approval of Settlement (Notice of Determination). The Notice of Determination stated that,
through mediation efforts, a settlement of the derivative claims had been approved by the SLC, the Independent Review Committee of the Board (which had been formed in the third quarter of
2022, to ensure the Board’s consideration of any SLC recommendations would be independent and objective),
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
the Board, and the Settling Shareholders (the Settling Parties). The Notice of Determination further specified the process by which the Settling Parties would seek court approval of the proposed
settlement and resolution and dismissal of all derivative claims and lawsuits, including any lawsuits or actions brought by demand letter shareholders who are not participating in the proposed
settlement. In furtherance of the proposed settlement, on June 16, 2023, the SLC filed a motion for preliminary approval of the settlement, attaching the Stipulation and Agreement of Settlement
(Stipulation), which contains the terms of the proposed settlement. The proposed settlement terms include but are not limited to: a payment of $40 million to Exelon by Exelon’s insurers of which
$10 million constitutes the attorneys’ fee award to be paid to the Settling Shareholders’ counsel; various compliance and disclosure-related reforms; and certain changes in Board and Committee
composition. On June 13, 2023, the non-settling derivative shareholders filed a motion asking the court to set a status conference to discuss lifting the discovery stay. On June 29, 2023, an
additional shareholder filed a separate derivative lawsuit against current and former Exelon and ComEd officers and directors, and against Exelon as nominal defendant, asserting claims similar to
those made in its demand letter. That lawsuit has been consolidated into the other pending derivative lawsuits. On June 30, 2023, the non-settling shareholders’ motion for status and the SLC’s
motion for preliminary approval was heard by the court, during which the court set a briefing schedule on the appropriate standard for evaluating the settlement and the proper scope of requested
discovery. Following briefing and a hearing, the court allowed the non-settling shareholders to seek certain, limited discovery, which the SLC, Independent Review Committee, and Exelon
responded to on October 5, 2023. On October 11, 2023, an additional non-settling shareholder filed a separate derivative lawsuit against current and former Exelon and ComEd officers and
directors, and against Exelon as a nominal defendant, asserting claims similar to those made in its demand letter. That lawsuit has been consolidated into the other pending derivative lawsuits.
The SLC filed its renewed motion for preliminary approval on October 26, 2023, with supporting submissions filed by the Independent Review Committee, Exelon, and the settling shareholders on
that same day. The non-settling plaintiffs filed a response to the renewed motion for preliminary approval and supporting submissions on November 29, 2023, and the SLC Independent Review
Committee, Exelon and the Settling Shareholders filed their respective reply briefs on December 21, 2023. On January 16, 2024, the non-settling plaintiffs sought leave of court to file a sur-reply,
which the court granted on January 18, 2024.
In August 2022, the ICC concluded its investigation initiated on August 12, 2021 into rate impacts of conduct admitted in the DPA, including the costs recovered from customers related to the DPA and
Exelon's funding of the fine paid by ComEd. On August 17, 2022, the ICC issued its final order accepting ComEd's voluntary customer refund offer of approximately $38 million (of which about $31 million is
ICC jurisdictional; the remaining balance is FERC jurisdictional) that resolves the question of whether customer funds were used for DPA related activities. The customer refund includes the cost of every
individual or entity that was either (i) identified in the DPA or (ii) identified by ComEd as an associate of the former Speaker of the Illinois House of Representatives in the ICC proceeding. The ICC’s DPA
investigation is now closed. The ICC jurisdictional refund was made to customers during the April 2023 billing cycle, as required by the ICC. The FERC jurisdictional refund was included in ComEd's
transmission formula rate update proceeding, filed on May 12, 2023. The filed transmission rate, inclusive of the FERC jurisdictional DPA refund, will appear on ComEd retail customers' bills for the June
2023 through May 2024 monthly billing periods, in the line designated as "Transmission Services Charge." The customer refund will not be recovered in rates or charged to customers and ComEd will not
seek or accept reimbursement or indemnification from any source other than Exelon. An accrual for the amount of the customer refund has been recorded in Regulatory assets in Exelon’s and ComEd’s
Consolidated Balance Sheets as of December 31, 2023.
Savings Plan Claim (Exelon). On December 6, 2021, seven current and former employees filed a putative ERISA class action suit in U.S. District Court for the Northern District of Illinois against Exelon,
its Board of Directors, the former Board Investment Oversight Committee, the Corporate Investment Committee, individual defendants, and other unnamed fiduciaries of the Exelon Corporation Employee
Savings Plan (Plan). The complaint alleges that the defendants violated their fiduciary duties under the Plan by including certain investment options that allegedly were more expensive than and
underperformed similar passively-managed or other funds available in the marketplace and permitting a third-party administrative service provider/recordkeeper and an investment adviser to charge
excessive fees for the services provided. The plaintiffs seek declaratory, equitable and monetary relief on behalf of the Plan and participants. On February 16, 2022, the court granted the parties' stipulated
dismissal of the individual named defendants without prejudice. The remaining defendants filed
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(Dollars in millions, except per share data unless otherwise noted)
Note 18 — Commitments and Contingencies
a motion to dismiss the complaint on February 25, 2022. On March 4, 2022, the Chamber of Commerce filed a brief of amicus curiae in support of the defendants' motion to dismiss. On September 22,
2022, the court granted Exelon’s motion to dismiss without prejudice. The court granted plaintiffs leave until October 31, 2022 to file an amended complaint, which was later extended to November 30,
2022. Plaintiffs filed their amended complaint on November 30, 2022. Defendants filed their motion to dismiss the amended complaint on January 20, 2023. On September 29, 2023, the court again
granted Exelon's motion to dismiss but granted plaintiffs leave until October 20, 2023 to file a second amended complaint. Plaintiffs did not file an amended complaint by the deadline. On October 25, 2023,
the parties filed a joint Stipulation of Dismissal, which provides that plaintiffs agreed that they will not initiate an appeal from the dismissal of this matter, and the parties agree that each side shall bear their
own costs and attorneys’ fees. Plaintiffs also acknowledge in the Stipulation that defendants have neither paid nor agreed to pay or provide any monetary or equitable remedy in connection with the
dismissal of this action. On October 27, 2023, the court entered final judgment dismissing the matter with prejudice. No loss contingencies have been reflected in Exelon’s consolidated financial statements
with respect to this matter.
General (All Registrants). The Registrants are involved in various other litigation matters that are being defended and handled in the ordinary course of business. The Registrants are also from time to
time subject to audits and investigations by the FERC and other regulators. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often
involves a series of complex judgments about future events. The Registrants maintain accruals for such losses that are probable of being incurred and subject to reasonable estimation. Management is
sometimes unable to estimate an amount or range of reasonably possible loss, particularly where (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters
involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.
19. Shareholders' Equity (All Registrants)
Equity Securities Offering (Exelon)
On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering (the “Offering”) of 11.3 million shares (the “Shares”) of its Common stock,
no par value (“Common Stock”). The Shares were sold to the underwriters at a price per share of $43.32. Exelon also granted the underwriters an option to purchase an additional 1.695 million shares of
Common stock also at the price per share of $43.32. On August 5, 2022, the underwriters exercised the option in full. The net proceeds from the Offering and the exercise of the underwriters’ option were
$563 million before expenses paid by Exelon. Exelon used the proceeds, together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See Note
16 — Debt and Credit Agreements for additional information on Exelon’s term loan.
At-the-Market Program (Exelon)
On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”), with certain sales agents and forward sellers and certain forward purchasers, establishing an ATM
equity distribution program under which it may offer and sell shares of its Common stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of
Common stock under the Equity Distribution Agreement and may, at any time, suspend or terminate offers and sales under the Equity Distribution Agreement. In November and December 2023, Exelon
issued approximately 3.6 million shares of Common stock at an average gross price of $39.58 per share. The net proceeds from these issuances were $140 million, which were used for general corporate
purposes. As of December 31, 2023, $858 million of Common stock remained available for sale pursuant to the ATM program.
ComEd Common Stock Warrants
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 19 — Shareholders' Equity
The following table presents warrants outstanding to purchase ComEd common stock and shares of common stock reserved for the conversion of warrants. The warrants entitle the holders to convert such
warrants into common stock of ComEd at a conversion rate of one share of common stock for three warrants.
Warrants outstanding
Common Stock reserved for conversion
Share Repurchases
2023
2022
December 31,
60,032
20,011
60,052
20,017
There currently is no Exelon Board of Director authority to repurchase shares. Any previous shares repurchased are held as treasury shares, at cost, unless cancelled or reissued at the discretion of
Exelon’s management.
Preferred and Preference Securities
The following table presents Exelon, ComEd, PECO, BGE, Pepco, and ACE's shares of preferred securities authorized, none of which were outstanding, as of December 31, 2023 and 2022. There are no
shares of preferred securities authorized for DPL.
Exelon
ComEd
PECO
BGE
Pepco
(a)
ACE
Preferred Securities Authorized
100,000,000
850,000
15,000,000
1,000,000
6,000,000
2,799,979
_________
(a)
Includes 799,979 shares of cumulative preferred stock and 2,000,000 of no par value preferred stock as of December 31, 2023 and 2022.
The following table presents ComEd, BGE, and ACE's preference securities authorized, none of which were outstanding as of December 31, 2023 and 2022. There are no shares of preference securities
authorized for Exelon, PECO, Pepco, and DPL.
ComEd
(a)
BGE
ACE
Preference Securities Authorized
6,810,451
6,500,000
3,000,000
__________
(a)
Includes 4,600,000 shares of unclassified preference securities and 1,900,000 shares of previously redeemed preference securities as of December 31, 2023 and 2022.
20. Stock-Based Compensation Plans (All Registrants)
Stock-Based Compensation Plans
Exelon grants stock-based awards through its LTIP, which primarily includes performance share awards, restricted stock units, and stock options. At December 31, 2023, there were approximately 33
million shares authorized for issuance under the LTIP. For the years ended December 31, 2023, 2022, and 2021, exercised and distributed stock-based awards were primarily issued from authorized but
unissued Common stock shares.
Separation-related Adjustments. In connection with the separation, Exelon and Constellation entered into an Employee Matters Agreement, effective February 1, 2022. Under the terms of the Employee
Matters Agreement, and pursuant to the terms of the LTIP, the Compensation Committee of the Board of Exelon approved an
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 20 — Stock-Based Compensation Plans
adjustment to outstanding awards granted under the LTIP in order to preserve the intrinsic aggregate value of such awards before the separation. The separation-related adjustments did not have a
material impact on either compensation expense or the potentially dilutive securities to be considered in the calculation of diluted earnings per share of Common stock. Former Exelon employees
transferred to Constellation as a result of the separation surrendered their outstanding unvested Exelon awards effective February 1, 2022.
The Registrants grant cash awards. The following table does not include expense related to these plans as they are not considered stock-based compensation plans under the applicable authoritative
guidance.
The following table presents the stock-based compensation expense included in Exelon's Consolidated Statements of Operations and Comprehensive Income. The Utility Registrants' stock-based
compensation expense for the years ended December 31, 2023, 2022, and 2021 was not material.
Exelon
Total stock-based compensation expense included in Operating and maintenance expense
Income tax benefit
Total after-tax stock-based compensation expense
$
$
2023
Year Ended December 31,
2022
2021
21
(5)
16
$
$
41
(10)
31
$
$
95
(25)
70
Exelon receives a tax deduction based on the intrinsic value of the award on the exercise date for stock options and the distribution date for performance share awards and restricted stock units. For each
award, throughout the requisite service period, Exelon recognizes the tax benefit related to compensation costs. The following table presents information regarding Exelon’s realized tax benefit when
distributed:
Performance share awards
Restricted stock units
Performance Share Awards
2023
2022
2021
$
$
8
6
$
6
6
6
6
Year Ended December 31,
Performance share awards are granted under the LTIP. The performance share awards are settled 50% in common stock and 50% in cash at the end of the three-year performance period, except for
awards that are settled 100% in cash if certain ownership requirements are satisfied.
The common stock portion of the performance share awards is considered an equity award and is valued based on Exelon's stock price on the grant date. The cash portion of the performance share
awards is considered a liability award which is remeasured each reporting period based on Exelon’s current stock price. As the value of the common stock and cash portions of the awards are based on
Exelon’s stock price during the performance period, coupled with changes in the total shareholder return modifier and expected payout of the award, the compensation costs are subject to volatility until
payout is established.
For nonretirement-eligible employees, stock-based compensation costs are recognized over the vesting period of three years using the straight-line method. For performance share awards granted to
retirement-eligible employees, the value of the performance shares is recognized ratably over the vesting period, which is the year of grant. Exelon processes forfeitures as they occur for employees who
do not complete the requisite service period.
The following table summarizes Exelon’s nonvested performance share awards activity:
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 20 — Stock-Based Compensation Plans
Shares
Weighted Average
Grant Date Fair
Value (per share)
Nonvested at December 31, 2022
(a)
Granted
Change in performance
Vested
Forfeited
Undistributed vested awards
(b)
Nonvested at December 31, 2023
(a)
866,805
$
679,196
(1,233)
(261,577)
(112,727)
(212,222)
958,242
$
__________
(a) Excludes 1,198,093 and 1,539,819 of performance share awards issued to retirement-eligible employees as of December 31, 2023 and 2022, respectively, as they are fully vested.
(b) Represents performance share awards that vested but were not distributed to retirement-eligible employees during 2023
The following table summarizes the weighted average grant date fair value and the total fair value of performance share awards vested.
Weighted average grant date fair value (per share)
Total fair value of performance shares vested
Total fair value of performance shares settled in cash
2023
(a)
2022
2021
Year Ended December 31,
$
41.82 $
17
26
43.05 $
29
25
41.86
41.82
41.75
41.25
41.96
41.61
42.01
43.37
44
28
__________
(a) As of December 31, 2023, $11 million of total unrecognized compensation costs related to nonvested performance shares are expected to be recognized over the remaining weighted-average period of 1.8 years.
Restricted Stock Units
Restricted stock units are granted under the LTIP with the majority being settled in a specific number of shares of common stock after the service condition has been met. The corresponding cost of
services is measured based on the grant date fair value of the restricted stock unit issued.
The value of the restricted stock units is expensed over the requisite service period using the straight-line method. The requisite service period for restricted stock units is generally three to five years.
However, certain restricted stock unit awards become fully vested upon the employee reaching retirement-eligibility. The value of the restricted stock units granted to retirement-eligible employees is either
recognized ratably over the first six months in the year of grant if the employee reaches retirement eligibility prior to July 1st of the grant year or through the date of which the employee reaches retirement
eligibility. Exelon processes forfeitures as they occur for employees who do not complete the requisite service period.
The following table summarizes Exelon’s nonvested restricted stock unit activity:
Nonvested at December 31, 2022
(a)
Granted
Vested
Forfeited
Undistributed vested awards
(b)
Nonvested at December 31, 2023
(a)
Shares
Weighted Average
Grant Date Fair
Value (per share)
$
561,161
385,065
(246,618)
(55,371)
(112,292)
531,945
$
41.98
41.84
42.36
40.56
41.87
42.87
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Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 20 — Stock-Based Compensation Plans
__________
(a) Excludes 205,855 and 476,592 of restricted stock units issued to retirement-eligible employees as of December 31, 2023 and 2022, respectively, as they are fully vested.
(b) Represents restricted stock units that vested but were not distributed to retirement-eligible employees during 2023.
The following table summarizes the weighted average grant date fair value and the total fair value of restricted stock units vested.
Weighted average grant date fair value (per share)
Total fair value of restricted stock units vested
2023
(a)
2022
2021
$
41.84 $
15
42.97 $
23
44.21
34
Year Ended December 31,
__________
(a) As of December 31, 2023, $9 million of total unrecognized compensation costs related to nonvested restricted stock units are expected to be recognized over the remaining weighted-average period of 1.6 years.
Stock Options
Non-qualified stock options to purchase shares of Exelon’s common stock were granted through 2012 under the LTIP. The exercise price of the stock options is equal to the fair market value of the
underlying stock on the date of option grant. Stock options will expire no later than ten years from the date of grant.
There were no stock options granted during the year ended December 31, 2023. All stock options were vested and exercised as of December 31, 2022.
The following table summarizes additional information regarding stock options exercised:
Intrinsic value
Cash received for exercise price
(a)
__________
(a) The difference between the market value on the date of exercise and the option exercise price.
$
262
2023
2022
2021
Year Ended December 31,
— $
—
— $
1
11
37
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 21 — Changes in Accumulated Other Comprehensive Income (Loss)
21. Changes in Accumulated Other Comprehensive Income (Loss) (Exelon)
The following table presents changes in Exelon's AOCI, net of tax, by component:
Balance at December 31, 2020
OCI before reclassifications
Amounts reclassified from AOCI
Net current-period OCI
Balance at December 31, 2021
Separation of Constellation
OCI before reclassifications
Amounts reclassified from AOCI
Net current-period OCI
Balance at December 31, 2022
OCI before reclassifications
Amounts reclassified from AOCI
Net current-period OCI
Balance at December 31, 2023
Cash Flow
Hedges
Pension and
Non-Pension
Postretirement
Benefit Plan
Items
(a)
$
$
$
$
$
$
$
(5)
(1)
—
(1)
(6)
6
2
—
2
2
(4)
(1)
(5)
(3)
$
$
$
$
$
$
$
Foreign
Currency
Items
Total
(3,372)
$
(23)
$
432
219
651
(2,721)
1,994
46
41
87
(640)
(109)
26
(83)
(723)
$
$
$
$
$
$
—
—
—
(23)
23
—
—
—
—
—
—
—
—
$
$
$
$
$
$
(3,400)
431
219
650
(2,750)
2,023
48
41
89
(638)
(113)
25
(88)
(726)
__________
(a) This AOCI component is included in the computation of net periodic pension and OPEB cost. Additionally, as of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured.
See Note 14 — Retirement Benefits for additional information. See Exelon's Statements of Operations and Comprehensive Income for individual components of AOCI.
The following table presents income tax benefit (expense) allocated to each component of Exelon's Other comprehensive income (loss):
Pension and non-pension postretirement benefit plans:
Prior service benefits reclassified to periodic benefit cost
Actuarial losses reclassified to periodic benefit cost
Pension and non-pension postretirement benefit plans valuation adjustments
Unrealized gains on cash flow hedges
For the Years Ended December 31,
2023
2022
2021
$
— $
(8)
33
2
— $
(14)
(14)
—
4
(76)
(153)
—
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(Dollars in millions, except per share data unless otherwise noted)
Note 22 — Supplemental Financial Information
22. Supplemental Financial Information (All Registrants)
Supplemental Statement of Operations Information
The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Operations and Comprehensive Income.
For the Year Ended December 31, 2023
Utility
(a)
Property
Payroll
For the Year Ended December 31, 2022
Utility
Property
(a)
Payroll
For the Year Ended December 31, 2021
Utility
Property
(a)
Payroll
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Taxes other than income taxes
$
$
$
$
$
$
875
401
124
878
377
117
774
364
124
299
$
166
$
97
$
33
31
16
17
205
18
306
$
166
$
94
$
31
28
17
16
191
17
246
$
139
$
88
$
39
27
18
16
176
18
$
$
$
313
147
27
312
138
25
301
131
27
$
283
101
6
283
$
94
6
278
$
88
7
$
$
$
26
44
5
25
42
4
22
40
5
4
2
3
4
2
3
3
3
3
__________
(a) The Registrants’ utility taxes represents municipal and state utility taxes and gross receipts taxes related to their operating revenues. The offsetting collection of utility taxes from customers is recorded in revenues in the
Registrants’ Consolidated Statements of Operations and Comprehensive Income.
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Other, net
For the Year Ended December 31, 2023
AFUDC—Equity
Non-service net periodic benefit cost
For the Year Ended December 31, 2022
AFUDC—Equity
Non-service net periodic benefit cost
For the Year Ended December 31, 2021
AFUDC—Equity
Non-service net periodic benefit cost
$
$
$
33
—
35
—
34
—
$
$
$
31
—
31
—
26
—
$
$
$
16
—
21
—
27
—
$
$
$
71
—
63
—
49
—
$
$
$
54
—
48
—
40
—
$
$
$
10
—
7
—
6
—
7
—
8
—
3
—
$
$
$
$
151
(18)
150
$
63
136
$
91
264
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 22 — Supplemental Financial Information
Supplemental Cash Flow Information
The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Cash Flows.
For the Year Ended December 31, 2023
Property, plant, and equipment
(b)
Amortization of regulatory assets
(b)
Amortization of intangible assets, net
(b)
Total depreciation and amortization
For the Year Ended December 31, 2022
Property, plant, and equipment
(b)
Amortization of regulatory assets
(b)
Amortization of intangible assets, net
(b)
Amortization of energy contract assets and liabilities
(c)
Nuclear fuel
(d)
ARO accretion
(e)
Total depreciation, amortization, and accretion
For the Year Ended December 31, 2021
Property, plant, and equipment
(b)
Amortization of regulatory assets
(b)
Amortization of intangible assets, net
(b)
Amortization of energy contract assets and liabilities
(c)
Nuclear fuel
(d)
ARO accretion
(e)
$
$
$
$
$
Exelon
(a)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Depreciation, amortization, and accretion
2,778
$
1,095
$
383
$
720
8
308
—
14
—
$
509
145
—
$
737
253
—
311
130
—
$
208
$
36
—
3,506
$
1,403
$
397
$
654
$
990
$
441
$
244
$
195
88
—
283
2,690
$
1,031
$
359
$
718
12
3
66
44
292
—
—
—
—
14
—
—
—
—
$
476
154
$
680
258
$
288
129
—
—
—
—
—
—
—
—
—
—
—
—
191
$
173
41
—
—
—
—
88
—
—
—
—
3,533
$
1,323
$
373
$
630
$
938
$
417
$
232
$
261
5,384
$
594
58
31
992
514
$
970
235
—
—
—
—
336
$
12
—
—
—
—
$
439
152
$
627
194
$
274
129
—
—
—
—
—
—
—
—
—
—
—
—
169
$
155
41
—
—
—
—
24
—
—
—
—
Total depreciation, amortization, and accretion
$
7,573
$
1,205
$
348
$
591
$
821
$
403
$
210
$
179
__________
(a) Exelon's 2022 and 2021 amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.
(b)
(c)
(d)
(e)
Included in Depreciation and amortization in the Registrants' Consolidated Statements of Operations and Comprehensive Income.
Included in Electric operating revenues or Purchased power expense in Exelon’s Consolidated Statements of Operations and Comprehensive Income.
Included in Purchased fuel expense in Exelon’s Consolidated Statements of Operations and Comprehensive Income.
Included in Operating and maintenance expense in Exelon's Consolidated Statements of Operations and Comprehensive Income.
265
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
For the Year Ended December 31, 2023
Interest (net of amount capitalized)
Income taxes (net of refunds)
For the Year Ended December 31, 2022
Interest (net of amount capitalized)
Income taxes (net of refunds)
For the Year Ended December 31, 2021
Interest (net of amount capitalized)
Income taxes (net of refunds)
Note 22 — Supplemental Financial Information
Exelon
(a)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Cash paid (refunded) during the year
$
$
$
1,616
$
10
441
$
11
1,434
$
73
396
$
23
200
$
(24)
166
$
31
171
$
29
147
$
16
301
$
21
274
$
19
153
$
6
141
$
28
$
1,505
281
$
372
(72)
$
152
(4)
$
134
(38)
$
255
—
$
132
12
69
$
6
$
$
63
(2)
59
(9)
68
9
60
(6)
56
2
__________
(a) Exelon's 2022 and 2021 amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.
266
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
For the Year Ended December 31, 2023
Pension and OPEB costs (benefit)
Allowance for credit losses
True-up adjustments to decoupling mechanisms and formula rates
(b)
Amortization of operating ROU asset
Change in environmental liabilities
AFUDC - Equity
For the Year Ended December 31, 2022
Pension and OPEB costs (benefit)
Allowance for credit losses
Other decommissioning-related activity
Energy-related options
True-up adjustments to decoupling mechanisms and formula rates
(b)
Long-term incentive plan
Amortization of operating ROU asset
AFUDC - Equity
For the Year Ended December 31, 2021
Pension and OPEB costs
Allowance for credit losses
Other decommissioning-related activity
Energy-related options
True-up adjustments to decoupling mechanisms and formula rates
Severance costs
Long-term incentive plan
Amortization of operating ROU Asset
AFUDC - Equity
(b)
Note 22 — Supplemental Financial Information
Exelon
(a)
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Other non-cash operating activities
$
$
$
198
125
(708)
39
37
(151)
164
173
36
60
(168)
42
56
(150)
411
160
(946)
125
(171)
(57)
137
183
(136)
$
26
$
(14)
$
$
$
4
(556)
2
—
(33)
60
46
—
—
(267)
—
2
(35)
129
47
—
—
(42)
2
—
1
(34)
$
$
45
7
—
—
(31)
(9)
45
—
—
(2)
—
—
(31)
8
39
—
—
(26)
—
—
—
(26)
$
$
$
$
$
56
16
(84)
5
—
(16)
44
25
—
—
47
—
14
(21)
61
17
—
—
(12)
—
—
29
(27)
99
60
(77)
28
37
(71)
53
58
—
—
54
—
27
(63)
49
24
—
—
(91)
1
—
28
(49)
$
$
34
33
(22)
6
37
(54)
$
18
10
(21)
8
—
(10)
$
9
$
3
$
29
—
—
31
—
7
(48)
6
9
—
—
(53)
—
—
6
(40)
$
12
—
—
7
—
8
(7)
2
5
—
—
(14)
—
—
8
(6)
$
$
13
17
(34)
3
—
(7)
12
16
—
—
16
—
3
(8)
11
10
—
—
(24)
—
—
4
(3)
__________
(a) Exelon's 2022 and 2021 amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.
(b) For ComEd, reflects the true-up adjustments in Regulatory assets and liabilities associated with its distribution, energy efficiency, distributed generation, and transmission formula rates. For PECO, reflects the change in
Regulatory assets and liabilities associated with its transmission formula rate. For BGE, Pepco, DPL, and ACE, reflects the change in Regulatory assets and liabilities associated with their decoupling mechanisms and
transmission formula rates. See Note 3 — Regulatory Matters for additional information.
267
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 22 — Supplemental Financial Information
The following tables provide a reconciliation of cash, restricted cash, and cash equivalents reported within the Registrants' Consolidated Balance Sheets that sum to the total of the same amounts in their
Consolidated Statements of Cash Flows.
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Cash, restricted cash, and cash equivalents
$
67
$
59
$
Balance at December 31, 2023
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash included in Other deferred debits and other assets
Total cash, restricted cash, and cash equivalents
Balance at December 31, 2022
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash included in Other deferred debits and other assets
Total cash, restricted cash, and cash equivalents
Balance at December 31, 2021
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash included in Other deferred debits and other assets
Cash, restricted cash, and cash equivalents included in current assets of
discontinued operations
Total cash, restricted cash, and cash equivalents
Balance at December 31, 2020
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash included in Other deferred debits and other assets
Cash, restricted cash, and cash equivalents included in current assets of
discontinued operations
Total cash, restricted cash, and cash equivalents
$
$
$
$
$
$
$
$
$
445
482
174
1,101
$
110
402
174
686
$
$
407
566
117
1,090
$
$
672
321
44
582
$
$
327
117
511
131
210
43
—
1,619
$
384
$
432
349
53
332
$
83
$
279
43
—
1,166
$
405
$
For additional information on restricted cash, see Note 1 — Significant Accounting Policies.
268
42
$
47
$
180
$
9
—
51
$
9
—
68
36
8
—
—
44
19
7
—
—
26
$
$
$
$
$
1
—
48
43
24
—
67
$
$
$
24
—
204
$
$
198
175
—
373
$
51
$
136
$
4
—
—
55
77
—
—
$
213
$
144
$
111
$
1
—
—
39
10
—
145
$
160
$
48
24
—
72
45
54
—
99
34
34
—
—
68
30
35
—
—
65
$
$
$
$
$
$
$
$
16
—
—
16
$
$
31
$
121
—
152
$
28
43
—
—
71
15
—
—
—
15
$
$
$
$
21
—
—
21
72
—
—
72
29
—
—
—
29
17
3
10
—
30
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 22 — Supplemental Financial Information
Supplemental Balance Sheet Information
The following tables provide additional information about material items recorded in the Registrants' Consolidated Balance Sheets.
Exelon
ComEd
PECO
BGE
PHI
Pepco
Investments
Balance at December 31, 2023
Rabbi trust investments
(a)
Equity method investments
Other investments
Total investments
Balance at December 31, 2022
Rabbi trust investments
Equity method investments
(a)
Total investments
$
$
$
$
$
231
$
15
5
—
6
—
251
$
6
$
216
16
232
$
$
$
—
6
6
$
$
$
$
28
$
9
$
142
$
7
—
35
22
8
30
$
$
$
$
—
—
1
—
9
$
143
$
7
—
7
$
$
$
138
—
138
$
$
$
__________
(a) The Registrants’ debt and equity security investments and life insurance contracts are recorded at fair market value.
Exelon
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Accrued expenses
Balance at December 31, 2023
Compensation-related accruals
Taxes accrued
(a)
Interest accrued
Balance at December 31, 2022
Compensation-related accruals
Taxes accrued
(a)
Interest accrued
$
$
$
$
661
221
414
613
211
338
$
206
204
148
179
$
92
124
$
$
87
96
49
81
10
47
$
$
81
75
44
79
34
42
__________
(a) Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.
23. Related Party Transactions (All Registrants)
Utility Registrants' expense with Generation
$
27
$
$
17
30
13
107
137
72
104
$
70
61
116
38
29
52
32
$
20
$
8
9
124
—
—
124
119
—
119
12
10
15
16
12
14
The Utility Registrants incurred expenses from transactions with the Generation affiliate as described in the footnotes to the table below prior to separation on February 1, 2022. Such expenses were
primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants:
ComEd
(a)
PECO
(b)
(c)
BGE
PHI
(d)
Pepco
DPL
(e)
ACE
(f)
__________
$
At December 31,
2022
2021
$
59
33
18
51
39
10
2
376
196
236
366
270
79
17
269
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
(a) ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.
(b) PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.
(c) BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.
(d) Pepco received electric supply from Generation under contracts executed through Pepco's competitive procurement process approved by the MDPSC and DCPSC.
(e) DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.
(f) ACE received electric supply from Generation under contracts executed through ACE's competitive procurement process approved by the NJBPU.
Service Company Costs for Corporate Support
The Registrants receive a variety of corporate support services from BSC. Pepco, DPL, and ACE also receive corporate support services from PHISCO. See Note 1 — Significant Accounting Policies for
additional information regarding BSC and PHISCO.
Note 23 — Related Party Transactions
The following table presents the service company costs allocated to the Registrants:
Exelon
BSC
PHISCO
ComEd
BSC
PECO
BSC
BGE
BSC
PHI
BSC
PHISCO
Pepco
BSC
PHISCO
DPL
BSC
PHISCO
ACE
BSC
PHISCO
Current Receivables from/Payables to affiliates
Operating and maintenance from affiliates
For the years ended December 31,
Capitalized costs
For the years ended December 31,
2023
2022
2021
2023
2022
2021
$
670 $
96
707 $
80
304
169
189
168
—
96
114
61
99
53
86
307
120
90
153
95
59
39
43
29
47
26
311
115
122
159
80
60
33
45
26
54
21
$
353 $
316 $
197
204
188
—
110
112
71
96
57
84
213
221
177
—
114
122
73
98
59
92
270
508
72
207
81
92
128
72
50
31
43
22
33
19
Table of Contents
Combined Notes to Consolidated Financial Statements
(Dollars in millions, except per share data unless otherwise noted)
Note 23 — Related Party Transactions
The following tables present current Receivables from affiliates and current Payables to affiliates:
December 31, 2023
Payables to affiliates:
ComEd
PECO
BGE
Pepco
DPL
ACE
BSC
PHISCO
Other
Total
Receivables from affiliates:
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Other
Total
December 31, 2022
Payables to affiliates:
ComEd
PECO
BGE
PHI
Pepco
DPL
ACE
Other
Total
$
$
$
$
—
$
—
—
—
1
1
—
— $
—
—
—
—
—
—
$
2
$
— $
—
—
—
—
—
—
3
3
—
—
—
—
—
1
1
2
$
— $
—
— $
—
—
—
—
1
—
—
—
—
—
3
$
64
36
33
5
17
12
11
1
$
1 $
3 $
179 $
ComEd
PECO
BGE
Pepco
DPL
ACE
BSC
PHISCO
Receivables from affiliates:
$
—
$
— $
—
—
—
—
—
—
3
—
—
—
2
2
—
—
—
—
—
—
—
$
— $
— $
—
—
—
—
—
—
—
—
—
—
—
1
$
66
39
38
4
20
12
14
—
—
—
—
—
—
—
—
—
$
$
$
—
—
—
—
14
11
11
—
36
—
—
—
—
13
8
9
—
8 $
3
2
10
1
1
—
72
39
35
15
32
25
25
8
25
$
251
Other
Total
8 $
3
1
10
1
—
1
74
42
39
14
34
22
26
4
$
3
$
4
$
— $
$
— $
1 $
193 $
30
$
24
$
255
Borrowings from Exelon/PHI intercompany money pool
To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing both Exelon and PHI operate an intercompany
money pool. PECO and PHI Corporate participate in the Exelon money pool. Pepco, DPL, and ACE participate in the PHI intercompany money pool.
Long-term Debt to Financing Trusts
The following table presents Long-term debt to financing trusts:
ComEd Financing III
PECO Trust III
PECO Trust IV
Total
Exelon
2023
ComEd
At December 31,
PECO
Exelon
2022
ComEd
PECO
$
$
206 $
81
103
390 $
205 $
—
—
205 $
— $
81
103
184 $
206 $
81
103
390 $
205 $
—
—
205 $
—
81
103
184
271
Table of Contents
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
All Registrants
None.
ITEM 9A.
CONTROLS AND PROCEDURES
All Registrants—Disclosure Controls and Procedures
During the fourth quarter of 2023, each of the Registrant's management, including its principal executive officer and principal financial officer, evaluated disclosure controls and procedures related to the
recording, processing, summarizing, and reporting of information in that Registrant’s periodic reports that it files with the SEC. These disclosure controls and procedures have been designed by the
Registrants to ensure that (a) material information relating to that Registrant, including its consolidated subsidiaries, is accumulated and made known to that Registrant’s management, including its principal
executive officer and principal financial officer, by other employees of that Registrant and its subsidiaries as appropriate to allow timely decisions regarding required disclosure, and (b) this information is
recorded, processed, summarized, evaluated, and reported, as applicable, within the time periods specified in the SEC’s rules and forms. Due to the inherent limitations of control systems, not all
misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people.
Accordingly, as of December 31, 2023, the principal executive officer and principal financial officer of each of the Registrants concluded that such Registrant’s disclosure controls and procedures were
effective to accomplish its objectives.
All Registrants—Changes in Internal Control Over Financial Reporting
Each Registrant continually strives to improve its disclosure controls and procedures to enhance the quality of its financial reporting and to maintain dynamic systems that change as conditions warrant.
However, there have been no changes in internal control over financial reporting that occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect,
any of the Registrant's internal control over financial reporting.
All Registrants—Internal Control Over Financial Reporting
Management is required to assess and report on the effectiveness of its internal control over financial reporting as of December 31, 2023. As a result of that assessment, management determined that
there were no material weaknesses as of December 31, 2023 and, therefore, concluded that each Registrant’s internal control over financial reporting was effective. Management’s Report on Internal
Control Over Financial Reporting is included in ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
ITEM 9B.
OTHER INFORMATION
All Registrants
None.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable
272
Table of Contents
PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company meet the
conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K for a reduced disclosure format. Accordingly, all items in this section relating to PECO, BGE, PHI, Pepco, DPL, and ACE are not
presented.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Executive Officers
The information required by ITEM 10 relating to executive officers is set forth above in ITEM 1. BUSINESS—Executive officers of the Registrants at February 21, 2024.
Directors, Director Nomination Process and Audit Committee
The information required under ITEM 10 concerning directors and nominees for election as directors at the annual meeting of shareholders (Item 401 of Regulation S-K), the director nomination process
(Item 407(c)(3)), the audit committee (Item 407(d)(4) and (d)(5)), and the beneficial reporting compliance (Sec. 16(a)) is incorporated herein by reference to information to be contained in Exelon’s definitive
2024 proxy statement (2024 Exelon Proxy Statement) and the ComEd information statement (2024 ComEd Information Statement) to be filed with the SEC on or before April 29, 2024 pursuant to
Regulation 14A or 14C, as applicable, under the Securities Exchange Act of 1934.
Code of Ethics
Exelon’s Code of Business Conduct is the code of ethics that applies to Exelon’s and ComEd’s Chief Executive Officer, Chief Financial Officer, Corporate Controller, and other finance organization
employees. The Code of Business Conduct is filed as Exhibit 14 to this report and is available on Exelon’s website at www.exeloncorp.com. The Code of Business Conduct will be made available, without
charge, in print to any shareholder who requests such document from Exelon's Corporate Secretary, 10 South Dearborn Street, P.O. Box 805398, Chicago, Illinois 60680-5398.
If any substantive amendments to the Code of Business Conduct are made or any waivers are granted, including any implicit waiver, from a provision of the Code of Business Conduct, to its Chief
Executive Officer, Chief Financial Officer or Corporate Controller, Exelon will disclose the nature of such amendment or waiver on Exelon’s website, www.exeloncorp.com, or in a report on Form 8-K.
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ITEM 11.
EXECUTIVE COMPENSATION
The information required by this item will be set forth under Executive Compensation Data and Compensation Committee Report in the Exelon Proxy Statement for the 2024 Annual Meeting of
Shareholders or the ComEd 2024 Information Statement, which are incorporated herein by reference.
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ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The additional information required by this item will be set forth under Ownership of Exelon Stock in the 2024 Exelon Proxy Statement or the ComEd 2024 Information Statement, which are incorporated
herein by reference.
Securities Authorized for Issuance under Exelon Equity Compensation Plans
Plan Category
Equity compensation plans approved by security holders
[A]
[B]
Number of securities to
be issued upon
exercise of outstanding
Options, warrants and
rights (Note 1)
Weighted-average
price of outstanding
Options, warrants
and rights (Note 2)
[C]
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in
column [A]) (Note 3)
3,524,772
$
—
41,706,088
__________
(1) Balance includes unvested performance shares, and unvested restricted stock units that were granted under the Exelon LTIP or predecessor company plans (including shares awarded under those plans and deferred
into the stock deferral plan) and deferred stock units granted to directors as part of their compensation. Unvested performance shares are subject to performance metrics and to a total shareholder return modifier.
Additionally, pursuant to the terms of the Exelon LTIP plan, 50% of final payouts are made in the form of shares of common stock and 50% is made in form of in cash, or if the participant has exceeded 200% of their
stock ownership requirement, 100% of the final payout is made in cash. For performance shares granted in 2021, 2022, and 2023, the total includes the maximum number of shares that could be issued assuming all
participants receive 50% of payouts in shares and assuming the performance and total shareholder return modifier metrics were both at maximum, representing best case performance, for a total of 2,401,852 shares. If
the performance and total shareholder return modifier metrics were at "target", the number of securities to be issued for such awards would be 1,200,926. The balance also includes 410,234 shares to be issued upon the
conversion of deferred stock units awarded to members of the Exelon board of directors. Conversion of the deferred stock units to shares of common stock occurs after a director terminates service to the Exelon board
or the board of any of its subsidiary companies. See Note 20 — Stock-Based Compensation Plans of the Combined Notes to Consolidated Financial Statements for additional information about the material features of
the plans.
(2) There are no outstanding stock options. The weighted-average price reported in column B does not take the performance shares and shares credited to deferred compensation plans into account.
(3)
Includes 11,475,245 shares remaining available for issuance from the employee stock purchase plan.
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ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The additional information required by this item will be set forth under Related Person Transactions and Director Independence in the Exelon Proxy Statement for the 2024 Annual Meeting of Shareholders
or the ComEd 2024 Information Statement, which are incorporated herein by reference.
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ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item will be set forth under Ratification of PricewaterhouseCoopers LLP as Exelon’s Independent Accountant for 2024 in the Exelon Proxy Statement for the 2024 Annual
Meeting of Shareholders and the ComEd 2024 Information Statement, which are incorporated herein by reference.
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ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
The following documents are filed as a part of this report:
(1) Exelon
(i)
Financial Statements (Item 8):
PART IV
Report of Independent Registered Public Accounting Firm dated February 13, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
(ii)
Financial Statement Schedules:
Schedule I—Condensed Financial Information of Parent (Exelon Corporate) at December 31, 2023 and 2022 and for the Years Ended December 31, 2023, 2022, and 2021
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto.
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Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Condensed Statements of Operations and Other Comprehensive Income
(In millions)
Operating expenses
Operating and maintenance
Operating and maintenance from affiliates
Other
Total operating expenses
Operating loss
Other income and (deductions)
Interest expense, net
Equity in earnings of investments
Interest income from affiliates, net
Other, net
Total other income and (deductions)
Income from continuing operations before income taxes
Income taxes
Net income from continuing operations after income taxes
Net income from discontinued operations after income taxes
Net income
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefits reclassified to periodic benefit cost
Actuarial losses reclassified to periodic benefit cost
Pension and non-pension postretirement benefit plans valuation adjustments
Unrealized (loss) gain on cash flow hedges
Other comprehensive (loss) income
Comprehensive income
2023
For the Years Ended December 31,
2022
2021
$
$
$
$
88
7
1
96
(96)
(544)
2,728
9
19
2,212
2,116
(212)
2,328
—
2,328 $
—
26
(109)
(5)
(88)
2,240 $
$
25
4
2
31
(31)
(413)
2,450
5
22
2,064
2,033
(21)
2,054
116
2,170 $
(1)
42
46
2
89
2,259 $
(9)
14
2
7
(7)
(333)
1,908
—
—
1,575
1,568
(48)
1,616
90
1,706
(4)
223
431
—
650
2,356
See the Notes to Financial Statements
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Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Condensed Statements of Cash Flows
(In millions)
Net cash flows provided by operating activities
Cash flows from investing activities
Changes in Exelon intercompany money pool
Notes receivable from affiliates
Investment in affiliates
Other investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Changes in short-term borrowings
Proceeds from short-term borrowings with maturities greater than 90 days
Repayments on short-term borrowings with maturities greater than 90 days
Issuance of long-term debt
Retirement of long-term debt
Issuance of common stock
Dividends paid on common stock
Proceeds from employee stock plans
Other financing activities
Net cash flows provided by (used in) financing activities
Increase (decrease) in cash, restricted cash, and cash equivalents
Cash, restricted cash, and cash equivalents at beginning of period
Cash, restricted cash, and cash equivalents at end of period
2023
For the Years Ended December 31,
2022
2021
$
1,486 $
1,690 $
(43)
—
(1,864)
(1)
(1,908)
78
—
—
2,500
(850)
140
(1,433)
41
(39)
437
15
11
26
$
35
274
(4,011)
—
(3,702)
448
1,150
(1,300)
3,350
(1,150)
563
(1,334)
36
(35)
1,728
(284)
295
11
$
$
See the Notes to Financial Statements
280
3,629
381
—
(2,231)
1
(1,849)
—
500
(350)
—
(300)
—
(1,497)
80
19
(1,548)
232
63
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Table of Contents
(In millions)
Current assets
Cash and cash equivalents
Accounts receivable, net
Other accounts receivable
Accounts receivable from affiliates
Notes receivable from affiliates
Regulatory assets
Other
Total current assets
Property, plant, and equipment, net
Deferred debits and other assets
Regulatory assets
Investments in affiliates from continuing operations
Deferred income taxes
Non-pension postretirement benefit asset
Other
Total deferred debits and other assets
Total assets
Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Condensed Balance Sheets
ASSETS
December 31,
2023
2022
$
26
$
561
14
225
188
17
1,031
44
2,877
38,545
884
144
107
42,557
43,632 $
$
11
358
17
182
154
6
728
44
2,650
35,925
929
187
115
39,806
40,578
See the Notes to Financial Statements
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Table of Contents
(In millions)
Current liabilities
Short-term borrowings
Long-term debt due within one year
Accounts payable
Accrued expenses
Payables to affiliates
Regulatory liabilities
Pension obligations
Other
Total current liabilities
Long-term debt
Deferred credits and other liabilities
Regulatory liabilities
Pension obligations
Deferred income taxes
Other
Total deferred credits and other liabilities
Total liabilities
Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Condensed Balance Sheets
LIABILITIES AND SHAREHOLDERS’ EQUITY
December 31,
2023
2022
$
$
1,026 $
500
194
144
361
10
45
49
2,329
10,713
92
4,268
56
419
4,835
17,877
21,114
(123)
5,490
(726)
25,755
43,632 $
948
850
188
101
360
12
77
7
2,543
8,742
103
3,896
53
497
4,549
15,834
20,908
(123)
4,597
(638)
24,744
40,578
Commitments and contingencies
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 999 shares and 994 shares outstanding as of December 31, 2023 and 2022, respectively)
Treasury stock, at cost (2 shares as of December 31, 2023 and 2022)
Retained earnings
Accumulated other comprehensive loss, net
Total shareholders’ equity
Total liabilities and shareholders’ equity
See the Notes to Financial Statements
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1. Basis of Presentation
Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Notes to Financial Statements
Exelon Corporate is a holding company that conducts substantially all of its business operations through its subsidiaries. These condensed financial statements and related footnotes have been prepared in
accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements, and notes thereto, of Exelon Corporation.
As of December 31, 2023 and 2022, Exelon Corporate owned 100% of all of its significant subsidiaries, either directly or indirectly, except for Commonwealth Edison Company (ComEd), of which Exelon
Corporate owns more than 99%. As of February 1, 2022, as a result of the completion of the separation, Exelon Corporate no longer retains any equity ownership interest in Generation or Constellation.
The separation of Constellation, including Generation and its subsidiaries, met the criteria for discontinued operations and as such, results of operations are presented as discontinued operations and have
been excluded from continuing operations for all periods presented. Accounting rules require certain BSC costs previously allocated to Generation to be presented as part of Exelon’s continuing operations
as these costs do not qualify as expenses of the discontinued operations. Comprehensive income and cash flows related to Generation have not been segregated and are included in the Condensed
Statements of Operations and Comprehensive Income and Condensed Statements of Cash Flows, respectively, for all periods presented. See Note 2 — Discontinued Operations of the Combined Notes to
Consolidated Financial Statements for additional information.
2. Retirement Benefits
See Note 14—Retirement Benefits of the Combined Notes to Consolidated Financial Statements for Exelon Corporate’s retirement benefits.
3. Derivative Financial Instruments
See Note 15—Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for Exelon Corporate’s derivatives.
4. Debt and Credit Agreements
Short-Term Borrowings
Exelon Corporate meets its short-term liquidity requirements primarily through the issuance of commercial paper. Exelon Corporate had $527 million in outstanding commercial paper borrowings as of
December 31, 2023 and $449 million outstanding commercial paper as of December 31, 2022.
Revolving Credit Agreements
As of December 31, 2023, Exelon Corporation had a $900 million aggregate bank commitment under its existing syndicated revolving facility in which $370 million was available to support additional
commercial paper as of December 31, 2023. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information regarding Exelon
Corporate’s credit agreement.
On February 1, 2022, Exelon Corporate entered into a new 5-year revolving credit facility with an aggregate bank commitment of $900 million at a variable interest rate of SOFR plus 1.275% which
replaced its existing $600 million syndicated revolving credit facility.
Exelon Corporate had no outstanding amounts on the revolving credit facilities as of December 31, 2023.
Short-Term Loan Agreements
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Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Notes to Financial Statements
On March 23, 2017, Exelon Corporate entered into a term loan agreement for $500 million. The loan agreement was renewed in the first quarter of 2023 and was bifurcated into two tranches of
$300 million on March 14, 2023 and $200 million on March 24, 2023. The agreements will expire on March 14, 2024 and March 22, 2024, respectively. Pursuant to the loan agreements, loans made
thereunder bear interest at a variable rate equal to SOFR plus 0.90% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-
term borrowings.
Long-Term Debt
The following tables present the outstanding long-term debt for Exelon Corporate at December 31, 2023 and December 31, 2022:
Long-term debt
Senior unsecured notes
Loan agreement
(c)
(a)
Total long-term debt
Unamortized debt discount and premium, net
Unamortized debt issuance costs
Fair value adjustment
Long-term debt due within one year
(b)
Long-term debt
Rates
2.75 % -
Maturity
Date
December 31,
2023
2022
7.60 %
6.23 %
2025 - 2053 $
2024
10,639 $
500
11,139
(13)
(65)
152
(500)
$
10,713 $
8,139
1,350
9,489
(10)
(51)
164
(850)
8,742
__________
(a) Senior unsecured notes included mirror debt that was held on Exelon Corporation's Balance Sheet in 2021. In connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of
(b)
$258 million to settle the intercompany loan. See Note 16 — Debt and Credit Agreements for additional information on the merger debt.
In connection with the separation, Exelon Corporate entered into three 18-month term loan agreements. On January 21, 2022, two of the loan agreements were issued for $300 million each with an expiration date of
July 21, 2023. On January 24, 2022, the third loan agreement was issued for $250 million with an expiration date of July 24, 2023. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate
equal to SOFR plus 0.65%.
(c) Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.85%.
The long-term debt maturities for Exelon Corporate for the periods 2024 through 2028 and thereafter are as follows:
2024
2025
2026
2027
2028
Thereafter
Total long-term debt
5. Commitments and Contingencies
See Note 18—Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for Exelon Corporate’s commitments and contingencies.
6. Related Party Transactions
The financial statements of Exelon Corporate include related party transactions as presented in the tables below:
284
$
$
500
807
750
650
1,000
7,432
11,139
Table of Contents
(In millions)
Operating and maintenance from affiliates:
BSC
(a)
Total operating and maintenance from affiliates:
Interest income (expense) from affiliates, net:
BSC
EEDC
(b)
Total interest income from affiliates, net:
Equity in earnings (losses) of investments:
BSC
(b)
EEDC
PCI
Exelon Enterprises
Exelon InQB8R
Other
Total equity in earnings of investments:
Cash contributions received from affiliates
(in millions)
Accounts receivable from affiliates (current):
BSC
ComEd
PECO
BGE
PHISCO
Total accounts receivable from affiliates (current):
Notes receivable from affiliates (current):
(a)
BSC
PHI
Total notes receivable from affiliates (current):
Investments in affiliates from continuing operations:
(a)
BSC
EEDC
(b)
Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Notes to Financial Statements
$
$
$
$
$
$
$
2023
2022
2021
For the Years Ended December 31,
7 $
7 $
6 $
3
9 $
— $
2,727
2
1
(2)
—
4 $
4 $
4 $
1
5 $
(18) $
2,482
(9)
—
(4)
(1)
2,728 $
2,450 $
1,978 $
2,027 $
At December 31,
2023
2022
14
14
—
—
—
(301)
2,215
(1)
—
(7)
2
1,908
1,842
3
4
2
1
7
17
138
44
182
384
35,092
52
365
4
3
12
15
(2)
— $
4
2
1
7
14
$
160 $
65
225 $
384 $
37,705
54
365
9
4
12
13
(1)
$
$
$
$
$
$
$
$
38,545 $
35,925
360 $
1
361 $
360
—
360
PCI
UII
Voluntary Employee Beneficiary Association trust
Exelon Enterprises
Conectiv
Exelon InQB8R
Other
(c)
Total investments in affiliates from continuing operations:
Accounts payable to affiliates (current):
UII
BSC
(a)
Total accounts payable to affiliates (current):
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Exelon Corporation and Subsidiary Companies
Schedule I – Condensed Financial Information of Parent (Exelon Corporate)
Notes to Financial Statements
__________
(a) Exelon Corporate receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology, and supply management services. All services are provided at cost,
including applicable overhead.
(b) EEDC consists of ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE.
(c) Primarily relates to elimination of affiliate transactions with Generation, primarily related to the Regulatory Agreement Units. See Note 3 — Regulatory Matters and Note 23 — Related Party Transactions of the
Combined Notes to Consolidated Financial Statements for additional information.
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Exelon Corporation and Subsidiary Companies
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
(a)
Deferred tax valuation allowance
For the year ended December 31, 2022
Allowance for credit losses
(a)
Deferred tax valuation allowance
For the year ended December 31, 2021
Allowance for credit losses
(a)
Deferred tax valuation allowance
$
$
$
409
$
94
392
$
37
405
$
4
171
(b)
$
—
174
(b)
$
—
107
(b)
$
—
$
$
$
20
20
28
57
—
33
(d)
201
(c)
$
—
185
(c)
$
—
120
(c)
$
—
399
114
409
94
392
37
__________
(a) Excludes the noncurrent Allowance for credit losses related to PECO’s installment plan receivables of $6 million, $7 million, and $14 million for the years ended December 31, 2023, 2022, and 2021, respectively.
(b) The amount charged to costs and expenses includes the amount reclassified to Regulatory assets/liabilities under different mechanisms applicable to the different jurisdictions in which the Utility Registrants operate.
(c) Primarily reflects write-offs, net of recoveries, of individual accounts receivable.
(d) DPL recorded a full valuation allowance against Delaware net operating losses carryforwards due to a change in Delaware tax law. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information on the valuation allowance.
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(2) ComEd
(i)
Financial Statements (Item 8):
Commonwealth Edison Company and Subsidiary Companies
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
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Commonwealth Edison Company and Subsidiary Companies
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Column D
Column E
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
For the year ended December 31, 2022
Allowance for credit losses
For the year ended December 31, 2021
Allowance for credit losses
$
$
$
76
$
90
$
118
$
45
(a)
24
(a)
18
(a)
$
$
$
13
8
1
$
$
$
48
(b)
46
(b)
47
(b)
$
$
$
86
76
90
__________
(a) ComEd is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through a rider mechanism. The amount charged to costs and
expenses includes the amount that was reclassified to Regulatory assets/liabilities under such mechanism. See Note 3 – Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional
information.
(b) Write-offs, net of recoveries of individual accounts receivable.
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(3) PECO
(i)
Financial Statements (Item 8):
PECO Energy Company and Subsidiary Companies
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Changes in Shareholder's Equity for the Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
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PECO Energy Company and Subsidiary Companies
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
Deferred tax valuation allowance
(a)
For the year ended December 31, 2022
Allowance for credit losses
Deferred tax valuation allowance
(a)
For the year ended December 31, 2021
Allowance for credit losses
(a)
Deferred tax valuation allowance
$
$
$
$
$
114
7
112
3
124
$
1
(b)
43
—
(b)
44
—
(b)
32
—
$
$
$
$
$
$
9
—
14
4
(6)
2
(c)
63
—
(c)
56
—
(c)
38
—
$
$
$
103
7
114
7
112
3
__________
(a) Excludes the noncurrent Allowance for credit losses related to PECO’s installment plan receivables of $6 million, $7 million, and $14 million for the years ended December 31, 2023, 2022, and 2021, respectively.
(b) The amount charged to costs and expenses includes the amount that was reclassified to the COVID-19 regulatory asset. See Note 3 – Regulatory Matters of the Combined Notes to Consolidated Financial Statements
for additional information.
(c) Write-offs, net of recoveries of individual accounts receivable.
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(4) BGE
(i)
Financial Statements (Item 8):
Baltimore Gas and Electric Company
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021
Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021
Balance Sheets at December 31, 2023 and 2022
Statements of Changes in Shareholder's Equity for the Years Ended December 31, 2023, 2022 and 2021
Notes to Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
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Table of Contents
Baltimore Gas and Electric Company
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2022
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2021
Allowance for credit losses
Deferred tax valuation allowance
$
$
$
64
$
3
47
$
—
44
—
$
26
(a)
—
37
(a)
—
(a)
16
—
$
$
$
$
$
$
5
—
6
3
3
—
42
(b)
$
—
26
(b)
$
—
16
—
(b)
$
53
3
64
3
47
—
__________
(a) The amount charged to costs and expenses includes the amount that was reclassified to Regulatory assets/liabilities under different mechanisms as approved by the MDPSC.
(b) Write-offs, net of recoveries of individual accounts receivable.
293
Table of Contents
(5) PHI
(i)
Financial Statements (Item 8):
Pepco Holdings LLC and Subsidiary Companies
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
294
Table of Contents
Pepco Holdings LLC and Subsidiary Companies
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2022
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2021
Allowance for credit losses
Deferred tax valuation allowance
$
$
$
155
$
35
$
143
31
119
$
—
57
(a)
—
(a)
69
—
41
(a)
—
$
$
$
(7)
—
—
4
2
31
(c)
$
$
$
48
(b)
—
(b)
57
—
19
(b)
—
$
$
$
157
35
155
35
143
31
__________
(a) The amount charged to costs and expenses includes the amount that was reclassified to Regulatory assets/liabilities under different mechanisms applicable to the different jurisdictions Pepco, DPL, and ACE operate in.
(b) Write-offs, net of recoveries of individual accounts receivable.
(c) DPL recorded a full valuation allowance against Delaware net operating losses carryforwards due to a change in Delaware tax law. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information on the valuation allowance.
295
Table of Contents
(6) Pepco
(i)
Financial Statements (Item 8):
Potomac Electric Power Company
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021
Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021
Balance Sheets at December 31, 2023 and 2022
Statements of Changes in Shareholder's Equity for the Years Ended December 31, 2023, 2022 and 2021
Notes to Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
296
Table of Contents
Potomac Electric Power Company
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
For the year ended December 31, 2022
Allowance for credit losses
For the year ended December 31, 2021
Allowance for credit losses
$
$
$
72
53
45
$
$
$
31
(a)
36
(a)
14
(a)
$
$
$
(5)
4
2
$
$
$
18
(b)
21
(b)
(b)
8
$
$
$
80
72
53
__________
(a) The amount charged to costs and expenses includes the amount that was reclassified to Regulatory assets/liabilities under different mechanisms as approved by the DCPSC and MDPSC.
(b) Write-offs, net of recoveries of individual accounts receivable.
297
Table of Contents
(7) DPL
(i)
Financial Statements (Item 8):
Delmarva Power & Light Company
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021
Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021
Balance Sheets at December 31, 2023 and 2022
Statements of Changes in Shareholder's Equity for the Years Ended December 31, 2023, 2022 and 2021
Notes to Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
298
Table of Contents
Delmarva Power & Light Company
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2022
Allowance for credit losses
Deferred tax valuation allowance
For the year ended December 31, 2021
Allowance for credit losses
Deferred tax valuation allowance
$
$
$
$
$
$
28
32
26
31
31
—
10
(a)
—
(a)
13
—
(a)
6
—
$
$
$
—
—
(2)
1
(1)
31
(c)
$
$
$
11
(b)
—
9
—
(b)
10
(b)
—
$
$
$
27
32
28
32
26
31
__________
(a) The amount charged to costs and expenses includes the amount that was reclassified to Regulatory assets/liabilities under different mechanisms as approved by the DEPSC and MDPSC.
(b) Write-offs, net of recoveries of individual accounts receivable.
(c) DPL recorded a full valuation allowance against Delaware net operating losses carryforwards due to a change in Delaware tax law. See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial
Statements for additional information on the valuation allowance.
299
Table of Contents
(8) ACE
(i)
Financial Statements (Item 8):
Atlantic City Electric Company and Subsidiary Company
Report of Independent Registered Public Accounting Firm dated February 21, 2024 of PricewaterhouseCoopers LLP (PCAOB ID 238)
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Changes in Shareholder's Equity for the Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
(ii)
Financial Statement Schedule:
Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2023, 2022, and 2021
Schedules not included are omitted because of the absence of conditions under which they are required or because the required information is provided in the consolidated financial
statements, including the notes thereto
300
Table of Contents
Atlantic City Electric Company and Subsidiary Company
Schedule II – Valuation and Qualifying Accounts
Column A
Description
Column B
Balance at
Beginning
of Period
Column C
Additions and adjustments
Charged to
Costs and
Expenses
Charged
to Other
Accounts
Column D
Column E
Deductions
Balance at
End
of Period
(In millions)
For the year ended December 31, 2023
Allowance for credit losses
For the year ended December 31, 2022
Allowance for credit losses
For the year ended December 31, 2021
Allowance for credit losses
$
$
$
55
64
43
$
$
$
16
(a)
20
(a)
21
(a)
$
$
$
(2)
(2)
1
$
$
$
19
(b)
27
(b)
(b)
1
$
$
$
50
55
64
__________
(a) ACE is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through the Societal Benefits Charge. The amount charged to
costs and expenses includes the amount that was reclassified to Regulatory assets/liabilities under such mechanism. See Note 3 – Regulatory Matters of the Combined Notes to Consolidated Financial Statements for
additional information.
(b) Write-offs, net of recoveries of individual accounts receivable.
301
Table of Contents
Exhibits required by Item 601 of Regulation S-K:
Certain of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities and Exchange Act of 1934, as amended. Certain other instruments which would otherwise be
required to be listed below have not been so listed because such instruments do not authorize securities in an amount which exceeds 10% of the total assets of the applicable registrant and its subsidiaries
on a consolidated basis and the relevant registrant agrees to furnish a copy of any such instrument to the Commission upon request.
(2) Plans of acquisition, reorganization, arrangement, liquidation, or succession
Exhibit No.
2-1
Description
Separation Agreement, dated January 31, 2022, between Exelon Corporation and
Constellation Energy Corporation
Location
File No. 001-16169, Form 8K dated February 2, 2022, Exhibit 2.1
(3) Articles of Incorporation and Bylaws
Exelon Corporation
Exhibit No.
3-1
3-2
Description
Amended and Restated Articles of Incorporation of Exelon Corporation, as amended
July 24, 2018
Location
File No. 001-16169, Form 8-K dated July 27, 2018, Exhibit 3.1
Amended and Restated Bylaws of Exelon Corporation, as amended on August 3, 2022
File No. 001-16169, Form 10-Q dated August 3, 2022, Exhibit 3.1
Baltimore Gas and Electric Company
Exhibit No.
3-3
3-4
3-5
Description
Articles of Restatement to the Charter of Baltimore Gas and Electric Company, restated
as of August 16, 1996
Location
File No. 001-01910, Form 10-Q dated November 14, 1996, Exhibit 3
Articles of Amendment to the Charter of Baltimore Gas and Electric Company as of
February 2, 2010
File No. 001-01910, Form 8-K dated February 4, 2010, Exhibit 3.1
Amended and Restated Bylaws of Baltimore Gas and Electric Company dated August
3, 2020
File No. 001-01910, Form 10-Q dated August 4, 2020, Exhibit 3.4
302
Table of Contents
Commonwealth Edison Company
Exhibit No.
3-6
3-7
PECO Energy Company
Exhibit No.
3-8
3-9
Pepco Holdings LLC
Exhibit No.
3-10
3-11
Description
Restated Articles of Incorporation of Commonwealth Edison Company Effective
February 20, 1985, including Statements of Resolution Establishing Series, relating to
the establishment of three new series of Commonwealth Edison Company preference
stock known as the “$9.00 Cumulative Preference Stock,” the “$6.875 Cumulative
Preference Stock” and the “$2.425 Cumulative Preference Stock”
Location
File No. 001-01839, Form 10-K dated March 30, 1995, Exhibit 3.2
Amended and Restated Bylaws of Commonwealth Edison Company, Effective February
22, 2021
File No. 001-01839, Form 10-K dated February 24, 2021, Exhibit 3.6
Description
Amended and Restated Articles of Incorporation of PECO Energy Company
Location
File No. 001-01401, Form 10-K dated April 2, 2001, Exhibit 3.3
Amended and Restated Bylaws of PECO Energy Company dated August 3, 2020
File No. 000-16844, Form 10-Q dated August 4, 2020, Exhibit 3.3
Description
Certificate of Formation of Pepco Holdings LLC, dated March 23, 2016
Location
File No. 001-31403, Form 8-K dated March 24, 2016, Exhibit 3.2
Amended and Restated Limited Liability Company Agreement of Pepco Holdings LLC,
dated August 3, 2020
File No. 001-31403, Form 10-Q dated August 4, 2020, Exhibit 3.5
Atlantic City Electric Company
Exhibit No.
3-12
3-13
Description
Restated Certificate of Incorporation of Atlantic City Electric Company (filed in New
Jersey on August 9, 2002)
Location
File No. 001-03559, Amendment No. 1 to Form U5B dated February 13, 2003, Exhibit
B.8.1
Bylaws of Atlantic City Electric Company
File No. 001-03559, Form 10-Q dated May 9, 2005, Exhibit 3.2.2
Delmarva Power & Light Company
Exhibit No.
3-14
3-15
Description
Restated Certificate and Articles of Incorporation of Delmarva Power & Light Company
(as filed in Delaware and Virginia)
Location
File No. 001-01405, Form 10-K dated March 1, 2007, Exhibit 3.3
Bylaws of Delmarva Power & Light Company
File No. 001-01405, Form 10-Q dated May 9, 2005, Exhibit 3.2.1
303
Table of Contents
Potomac Electric Power Company
Exhibit No.
3-16
3-17
3-18
Description
Restated Articles of Incorporation of Potomac Electric Power Company (as filed in the
District of Columbia)
Restated Articles of Incorporation and Articles of Restatement of Potomac Electric
Power Company (as filed in Virginia)
Location
File No. 001-31403, Form 10-Q dated May 5, 2006, Exhibit 3.1
File No. 001-01072, Form 10-Q dated November 4, 2011, Exhibit 3.3
Bylaws of Potomac Electric Power Company
File No. 001-01072, Form 10-Q dated May 5, 2006, Exhibit 3.2
(4) Instruments Defining the Rights of Securities Holders, Including Indentures
Exelon Corporation
Exhibit No.
4-1
Description
Exelon Corporation Direct Stock Purchase Plan
Location
File No. 333-206474, Registration Statement on Form S-3 dated August 19, 2015
4-2
4-3
4-4
4-4-1
4-4-2
4-5
4-5-1
Indenture dated May 1, 2001 between Exelon Corporation and The Bank of New York
Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 10-Q dated July 26, 2005, Exhibit 4.10
Form of $500,000,000 5.625% senior notes due 2035 dated June 9, 2005 issued by
Exelon Corporation
Indenture, dated as of June 17, 2014, between Exelon Corporation and The Bank of
New York Mellon Trust Company, N.A., as Trustee
File No. 001-16169, Form 8-K dated June 9, 2005, Exhibit 99.3
File No. 001-16169, Form 8-K dated June 23, 2014, Exhibit 4.1
First Supplemental Indenture, dated as of June 17, 2014, between Exelon Corporation
and The Bank of New York Mellon Trust Company, N.A., as Trustee
File No. 001-16169, Form 8-K dated June 23, 2014, Exhibit 4.2
Second Supplemental Indenture, dated April 3, 2017, between Exelon and The Bank
of New York Mellon Trust Company, N.A., as trustee, to that certain Indenture (For
Unsecured Subordinated Debt Securities), dated June 17, 2014
Indenture, dated as of June 11, 2015, among Exelon Corporation and The Bank of
New York Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 8-K dated April 4, 2017, Exhibit 4.3
File No. 001-16169, Form 8-K dated June 11, 2015, Exhibit 4.1
First Supplemental Indenture, dated as of June 11, 2015, among Exelon Corporation
and The Bank of New York Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 8-K dated June 11, 2015, Exhibit 4.2
304
Table of Contents
Exhibit No.
4-5-2
4-5-3
4-5-4
4-5-5
4-5-6
4-6
Description
Second Supplemental Indenture, dated as of December 2, 2015, among Exelon
Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee
Location
File No. 001-16169, Form 8-K dated December 2, 2015, Exhibit 4.1
Third Supplemental Indenture, dated as of April 7, 2016, among Exelon Corporation and
The Bank of New York Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 8-K dated April 7, 2016, Exhibit 4.2
Fourth Supplemental Indenture, dated as of April 1, 2020, among Exelon Corporation
and The Bank of New York Mellon Trust Company, N.A., as trustee
Fifth Supplemental Indenture, dated as of March 7, 2022, among Exelon Corporation
and The Bank of New York Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 8-K dated April 1, 2020, Exhibit 4.2
File No. 001-16169, Form 8-K dated March 7, 2022, Exhibit 4.2
Sixth Supplemental Indenture, dated as of February 1, 2023, among Exelon Corporation
and The Bank of New York Mellon Trust Company, N.A., as trustee
File No. 001-16169, Form 8-K dated February 21, 2023, Exhibit 4.2
Description of Exelon Securities
File No. 001-16169, Form 10-K dated February 11, 2020, Exhibit 4.63
305
Table of Contents
Baltimore Gas and Electric Company
Exhibit No.
4-7
4-8
4-9
4-10
4-11
4-12
4-13
Description
Indenture dated as of July 24, 2006 between Baltimore Gas and Electric Company
and Deutsche Bank Trust Company Americas, as trustee
Location
File No. 333-135991, Registration Statement on Form S-3 dated July 24, 2006, Exhibit
4(b)
Form of 2.400% notes due 2026 issued August 18, 2016 by Baltimore Gas and
Electric Company
File No. 001-01910, Form 8-K dated August 18, 2016, Exhibit 4.1
Form of 3.500% Note due 2046 issued August 18, 2016 by Baltimore Gas and Electric
Company
File No. 001-01910, Form 8-K dated August 18, 2016, Exhibit 4.2
Form of 3.750% Note due 2047 issued August 24, 2017 by Baltimore Gas and Electric
Company
File No. 001-01910, Form 8-K dated August 24, 2017, Exhibit 4.1
Form of 4.550% Note due 2052 issued June 6, 2022 by Baltimore Gas and Electric
Company
File No. 001-01910, Form 8-K dated June 6, 2022, Exhibit 4.2
Form of 5.400% Note due 2053 issued May 10, 2023 by Baltimore Gas and Electric
File No. 001-01910, Form 8-K dated May 10, 2023, Exhibit 4.2
Indenture, dated as of September 1, 2019, between Baltimore Gas and Electric
Company and U.S. Bank N.A., as trustee
File No. 001-01910, Form 8-K dated September 12, 2019, Exhibit 4.1
Commonwealth Edison Company
Exhibit No.
4-14
4-14-1
4-14-2
Description
Mortgage of Commonwealth Edison Company to Illinois Merchants Trust Company,
Trustee (BNY Mellon Trust Company of Illinois, as current successor Trustee), dated
July 1, 1923, as supplemented and amended by Supplemental Indenture thereto dated
August 1, 1944
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
January 13, 2003
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 22, 2006
Location
Registration No. 2-60201, Form S-7, Exhibit 2-1
(a)
File No. 001-01839, Form 8-K dated February 13, 2003, Exhibit 4.4
File No. 001-01839, Form 8-K dated March 6, 2006, Exhibit 4.1
306
Table of Contents
Exhibit No.
4-14-3
4-14-4
4-14-5
4-14-6
4-14-7
4-14-8
4-14-9
4-14-10
4-14-11
4-14-12
4-14-13
4-14-14
4-14-15
4-14-16
4-14-17
Description
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
March 1, 2007
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
December 20, 2007
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
September 17, 2012
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
August 1, 2013
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
January 2, 2014
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
October 28, 2014
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 18, 2015
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
November 4, 2015
Location
File No. 001-01839, Form 8-K dated March 23, 2007, Exhibit 4.1
File No. 001-01839, Form 8-K dated January 16, 2008, Exhibit 4.1
File No. 001-01839, Form 8-K dated October 1, 2012, Exhibit 4.1
File No. 001-01839, Form 8-K dated August 19, 2013, Exhibit 4.1
File No. 001-01839, Form 8-K dated January 10, 2014, Exhibit 4.1
File No. 001-01839, Form 8-K dated November 10, 2014, Exhibit 4.1
File No. 001-01839, Form 8-K dated March 2, 2015, Exhibit 4.1
File No. 001-01839, Form 8-K dated November 19, 2015, Exhibit 4.1
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of June
15, 2016
File No. 001-01839, Form 8-K dated June 27, 2016, Exhibit 4.1
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
August 9, 2017
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 6, 2018
File No. 001-01839, Form 8-K dated August 23, 2017, Exhibit 4.1
File No. 001-01839, Form 8-K dated February 20, 2018, Exhibit 4.1
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of July
26, 2018
File No. 001-01839, Form 8-K dated August 14, 2018, Exhibit 4.1
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 7, 2019
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
October 29, 2019
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 10, 2020
File No. 001-01839, Form 8-K dated February 19, 2019, Exhibit 4.1
File No. 001-01839, Form 8-K dated November 12, 2019, Exhibit 4.1
File No. 001-01839, Form 8-K dated February 25, 2020, Exhibit 4.1
307
Table of Contents
Exhibit No.
4-14-18
4-14-19
4-14-20
4-14-21
4-15
4-16
4-17
Description
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 16, 2021
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
August 2, 2021
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
February 23, 2022
Supplemental Indenture to Commonwealth Edison Company Mortgage dated as of
December 21, 2022
Instrument of Resignation, Appointment and Acceptance dated as of February 20, 2002,
under the provisions of the Mortgage of Commonwealth Edison Company dated July 1,
1923, and Indentures Supplemental thereto, regarding corporate trustee
Instrument dated as of January 31, 1996, under the provisions of the Mortgage of
Commonwealth Edison Company dated July 1, 1923 and Indentures Supplemental
thereto, regarding individual
Location
File No. 001-01839, Form 8-K dated March 9, 2021, Exhibit 4.1
File No. 001-01839, Form 8-K dated August 12, 2021, Exhibit 4.1
File No. 001-01839, Form 8-K/A dated March 15, 2022, Exhibit 4.1
File No. 001-01839, Form 8-K dated January 10, 2023, Exhibit 4.1
File No. 001-01839, Form 10-K dated April 1, 2002, Exhibit 4.4.2
File No. 001-01839, Form 10-K dated March 29, 1996, Exhibit 4.29
Description of ComEd Securities
File No. 001-16169, Form 10-K dated February 11, 2020, Exhibit 4.65
PECO Energy Company
Exhibit No.
4-18
4-18-1
4-18-2
4-18-3
4-18-4
Description
First and Refunding Mortgage dated May 1, 1923 between The Counties Gas and
Electric Company (predecessor to PECO Energy Company) and Fidelity Trust
Company, Trustee (U.S. Bank N.A., as current successor trustee)
Location
Registration No. 2-2281, Exhibit B-1
(a)
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of December 1, 1941
Registration No. 2-4863, Exhibit B-1(h)
(a)
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of April 15, 2004
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 15, 2006
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of March 1, 2007
File No. 000-16844, Form 10-Q dated September 30, 2004, Exhibit 4-1-1
File No. 000-16844, Form 8-K dated September 25, 2006, Exhibit 4.1
File No. 000-16844, Form 8-K dated March 19, 2007, Exhibit 4.1
308
Table of Contents
Exhibit No.
4-18-5
4-18-6
4-18-7
4-18-8
4-18-9
4-18-10
4-18-11
4-18-12
4-18-13
4-18-14
4-18-15
4-18-16
4-18-17
4-19
Description
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 1, 2012
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 1, 2014
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 15, 2015
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 1, 2017
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of February 1, 2018
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 1, 2018
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of August 15, 2019
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of June 1, 2020
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of February 15, 2021
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of September 1, 2021
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of May 1, 2022
Supplemental Indenture to PECO Energy Company’s First and Refunding Mortgage
dated as of August 1, 2022
Supplemental Indenture to PECO Energy Company's First and Refunding Mortgage
dated as of June 1, 2023
Location
File No. 000-16844, Form 8-K dated September 17, 2012, Exhibit 4.1
File No. 000-16844, Form 8-K dated September 15, 2014, Exhibit 4.1
File No. 000-16844, Form 8-K dated October 5, 2015, Exhibit 4.1
File No. 000-16844, Form 8-K dated September 18, 2017, Exhibit 4.1
File No. 000-16844, Form 8-K dated February 23, 2018, Exhibit 4.1
File No. 000-16844, Form 8-K dated September 11, 2018, Exhibit 4.1
File No. 000-16844, Form 8-K dated September 10, 2019, Exhibit 4.1
File No. 000-16844, Form 8-K dated June 8, 2020, Exhibit 4.1
File No. 000-16844, Form 8-K dated March 8, 2021, Exhibit 4.1
File No. 000-16844, Form 8-K dated September 14, 2021, Exhibit 4.1
File No. 000-16844, Form 8-K dated May 24, 2022, Exhibit 4.1
File No. 000-16844, Form 8-K dated August 23, 2022, Exhibit 4.1
File No. 001-16844, Form 8-K dated June 23, 2023, Exhibit 4.1
Indenture to Subordinated Debt Securities dated as of June 24, 2003 between PECO
Energy Company, as Issuer, and U.S. Bank N.A., as Trustee
File No. 000-16844, Form 10-Q dated July 30, 2003, Exhibit 4.1
309
Table of Contents
Exhibit No.
4-20
4-21
4-22
Description
Preferred Securities Guarantee Agreement between PECO Energy Company, as
Guarantor, and U.S. Bank N.A., as Trustee, dated as of June 24, 2003
PECO Energy Capital Trust IV Amended and Restated Declaration of Trust among
PECO Energy Company, as Sponsor, U.S. Bank Trust N.A., as Delaware Trustee and
Property Trustee, and J. Barry Mitchell, George R. Shicora and Charles S. Walls as
Administrative Trustees dated as of June 24, 2003
Location
File No. 000-16844, Form 10-Q dated July 30, 2003, Exhibit 4.2
File No. 000-16844, Form 10-Q dated July 30, 2003, Exhibit 4.3
Description of PECO Securities
File No. 001-16169, Form 10-K dated February 11, 2020, Exhibit 4.64
Atlantic City Electric Company
310
Table of Contents
Exhibit No.
4-23
4-23-1
4-23-2
4-23-3
4-23-4
4-23-5
4-23-6
4-23-7
4-23-8
4-23-9
4-23-10
4-23-11
4-23-12
4-23-13
4-23-14
4-24
Description
Mortgage and Deed of Trust, dated January 15, 1937, between Atlantic City Electric
Company and The Bank of New York Mellon (formerly Irving Trust Company), as
trustee
Location
2-66280, Registration Statement dated December 21, 1979, Exhibit 2(a)
(a)
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of June 1,
1949
2-66280, Registration Statement dated December 21, 1979, Exhibit 2(b)
(a)
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of March
1, 1991
Form 10-K dated March 28, 1991, Exhibit 4(d)(1)
(a)
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of April 1,
2004
File No. 001-03559, Form 8-K dated April 6, 2004, Exhibit 4.3
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of March
8, 2006
File No. 001-03559, Form 8-K dated March 17, 2006, Exhibit 4
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of March
29, 2011
File No. 001-03559, Form 8-K dated April 1, 2011, Exhibit 4.2
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of August
18, 2014
File No. 001-03559, Form 8-K dated August 19, 2014, Exhibit 4.2
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of
December 1, 2015
File No. 001-03559, Form 8-K dated December 2, 2015, Exhibit 4.2 (included as
Exhibit A to Exhibit 1.1).
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of
October 9, 2018
File No. 001-03559, Form 8-K dated October 16, 2018, Exhibit 4.1
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of May 2,
2019
File No. 001-03559, Form 8-K dated May 21, 2019, File No. 4.3
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of June 1,
2020
File No. 001-03559, Form 8-K dated June 9, 2020, Exhibit 4.2
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of
February 15, 2021
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of
November 1, 2021
Supplemental Indenture to Atlantic City Electric Company Mortgage dated as of
February 1, 2022
Supplemental Indenture to the Atlantic City Electric Company Mortgage and Deed of
Trust, dated as of March 1, 2023
Pollution Control Facilities Loan Agreement, dated as of June 1, 2020, between The
Pollution Control Financing Authority of Salem County and Atlantic City Electric
File No. 001-03559, Form 8-K dated March 10, 2021, Exhibit 4.1
File No. 001-03559, Form 8-K dated November 16, 2021, Exhibit 4.2
File No. 001-03559, Form 8-K dated February 15, 2022, Exhibit 4.2
File No. 001-03559, Form 8-K dated March 15, 2023, Exhibit 4.2
File No. 001-03559, Form 8-K dated June 2, 2020, Exhibit 4.1
311
Table of Contents
Delmarva Power & Light Company
Exhibit No.
4-25
4-25-1
4-25-2
4-25-3
4-25-4
4-25-5
4-25-6
4-25-7
4-25-8
4-25-9
4-25-10
4-25-11
Description
Mortgage and Deed of Trust of Delaware Power & Light Company to The Bank of New
York Mellon (ultimate successor to the New York Trust Company), as trustee, dated as
of October 1, 1943, and copies of the First through Sixty-Eighth Supplemental
Indentures thereto
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
October 1, 1993
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
October 1, 1994
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
June 2, 2014
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
May 4, 2015
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
December 5, 2016
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
June 1, 2018
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
May 2, 2019
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
January 1, 2020
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
June 1, 2020
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
February 15, 2021
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
February 1, 2022
Location
33-1763, Registration Statement dated November 27, 1985, Exhibit 4-(A)
(a)
33-53855, Registration Statement dated January 30, 1995, Exhibit 4-L
(a)
33-53855, Registration Statement dated January 30, 1995, Exhibit 4-N
(a)
File No. 001-01405, Form 8-K dated June 3, 2014, Exhibit 4.3
File No. 001-01405, Form 8-K dated May 5, 2015, Exhibit 4.2
File No. 001-01405, Form 8-K dated December 12, 2016, Exhibit 4.2
File No. 001-01405, Form 8-K dated June 21, 2018, Exhibit 4.2
File No. 001-01405, Form 8-K dated December 12, 2019, Exhibit 4.2
File No. 001-01405, Form 10-Q dated May 8, 2020, Exhibit 4.4
File No. 001-01405, Form 8-K dated June 9, 2020, Exhibit 4.4
File No. 001-01405, Form 8-K dated March 30, 2021, Exhibit 4.4
File No. 001-01405, Form 8-K dated February 15, 2022, Exhibit 4.4
312
Table of Contents
Exhibit No.
4-25-12
4-25-13
4-26
Description
Supplemental Indenture to Delmarva Power & Light Company Mortgage dated as of
January 1, 2022
Location
File No. 001-01405, Form 10-Q dated May 9, 2022, Exhibit 4.1
Supplemental Indenture to the Delmarva Power & Light Company Mortgage and Deed
of Trust, dated as of March 1, 2023
File No. 001-01405, Form 8-K dated March 15, 2023, Exhibit 4.4
Gas Facilities Loan Agreement, dated as of July 1, 2020, between The Delaware
Economic Development Authority and Delmarva Power & Light Company
File No. 001-01405, Form 8-K dated July 1, 2020, Exhibit 4.1
Potomac Electric Power Company
Exhibit No.
4-27
4-27-1
4-27-2
4-27-3
4-27-4
4-27-5
4-27-6
4-27-7
4-27-8
4-27-9
Description
Mortgage and Deed of Trust, dated July 1, 1936, of Potomac Electric Power Company
to The Bank of New York Mellon as successor trustee, securing First Mortgage Bonds
of Potomac Electric Power Company, and Supplemental Indenture dated July 1, 1936
Location
File No. 2-2232, Registration Statement dated June 19, 1936, Exhibit B-4
(a)
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
December 10, 1939
8-K dated January 3, 1940, Exhibit B
(a)
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 16, 2004
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
May 24, 2005
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
November 13, 2007
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 24, 2008
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
December 3, 2008
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 11, 2013
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
November 14, 2013
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 11, 2014
File No. 001-01072, Form 8-K dated March 23, 2004, Exhibit 4.3
File No. 001-01072, Form 8-K dated May 26, 2005, Exhibit 4.2
File No. 001-01072, Form 8-K dated November 15, 2007, Exhibit 4.2
File No. 001-01072, Form 8-K dated March 28, 2008, Exhibit 4.1
File No. 001-01072, Form 8-K dated December 8, 2008, Exhibit 4.2
File No. 001-01072, Form 8-K dated March 12, 2013, Exhibit 4.2
File No. 001-01072, Form 8-K dated November 15, 2013, Exhibit 4.2
File No. 001-01072, Form 8-K dated March 12, 2014, Exhibit 4.2
313
Table of Contents
Exhibit No.
4-27-10
4-27-11
4-27-12
4-27-13
4-27-14
4-27-15
4-27-16
4-27-17
4-28
Description
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 9, 2015
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
May 15, 2017
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
June 1, 2018
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
May 2, 2019
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
February 12, 2020
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
February 15, 2021
Supplemental Indenture to Potomac Electric Power Company Mortgage dated as of
March 1, 2022
Location
File No. 001-01072, Form 8-K dated March 10, 2015, Exhibit 4.3
File No. 001-01072, Form 8-K dated May 22, 2017, Exhibit 4.2
File No. 001-01072, Form 8-K dated June 21, 2018, Exhibit 4.2
File No. 001-01072, Form 8-K dated June 13, 2019, Exhibit 4.2
File No. 001-01072, Form 8-K dated February 25, 2020, Exhibit 4.2
File No. 001-01072, Form 8-K dated March 30, 2021, Exhibit 4.4
File No. 001-01072, Form 8-K dated March 24, 2022, Exhibit 4.2
Supplemental Indenture to the Potomac Electric Power Company Mortgage and Deed
of Trust, dated as of March 1, 2023
File No. 001-01072, Form 8-K dated March 15, 2023, Exhibit 4.6
Exempt Facilities Loan Agreement dated as of June 1, 2019 between the Maryland
Economic Development Corporation and Potomac Electric Power Company
File No. 001-01072, Form 8-K dated June 27, 2019, Exhibit 4.1
(10) Material Contracts
Exelon Corporation
Exhibit No.
10-1
10-2
10-3
10-4
Description
Transition Services Agreement, dated January 31, 2022, between Exelon Corporation
and Constellation Energy Corporation
Tax Matters Agreement, dated January 31, 2022, between Exelon Corporation and
Constellation Energy Corporation
Employee Matters Agreement, dated January 31, 2022, between Exelon Corporation
and Constellation Energy Corporation
Credit Agreement for $900,000,000 dated February 1, 2022, between Exelon
Corporation and various financial institutions
Location
File No. 001-16169, Form 8K dated February 2, 2022, Exhibit 10.1
File No. 001-16169, Form 8K dated February 2, 2022, Exhibit 10.2
File No. 001-16169, Form 8K dated February 2, 2022, Exhibit 10.3
File No. 001-16169, Form 10-K dated February 25, 2022, Exhibit 10.40
314
Table of Contents
Exhibit No.
10-5
10-6
10-7
10-8
10-9
10-10
10-11
10-12
10-13
10-14
10-15
10-15-1
10-16
Description
Exelon Corporation Non-Employee Directors’ Deferred Stock Unit Plan (As Amended
and Restated Effective April 28, 2020)
Form of Exelon Corporation Unfunded Deferred Compensation Plan for Directors (as
amended and restated Effective March 12, 2012) *
Exelon Corporation Supplemental Management Retirement Plan (As Amended and
Restated Effective January 1, 2009) *
Exelon Corporation Annual Incentive Plan for Senior Executives (As Amended Effective
January 1, 2014) *
Exelon Corporation Employee Stock Purchase Plan, as amended and restated effective
September 25, 2019
Exelon Corporation Employee Stock Purchase Plan for Unincorporated Subsidiaries, as
amended and restated effective September 25, 2019
Location
File No. 001-16169, Form 10-Q dated August 4, 2020, Exhibit 10.1
File No. 001-16169, Form 10-K dated February 13, 2015, Exhibit 10.3
File No. 001-16169, Form 10-K dated February 6, 2009, Exhibit 10.19
File No. 001-16169, Proxy Statement dated April 1, 2014, Appendix A
File No. 001-16169, Form 10-Q dated October 31, 2019, Exhibit 10.3
File No. 001-16169, Form 10-Q dated October 31, 2019, Exhibit 10.4
Exelon Corporation 2020 Long-Term Incentive Plan (Effective April 28, 2020)
File No. 001-16169, Proxy Statement dated March 18, 2020, Appendix A
Exelon Corporation 2020 Long-Term Incentive Plan Prospectus, dated May 27, 2020
File No. 001-16169, Form 10-Q dated August 4, 2020, Exhibit 10.3
Form of Restricted Stock Unit Award Notice and Agreement under the Exelon
Corporation 2020 Long-Term Incentive Plan
Form of Performance Share Award Notice and Agreement under the Exelon
Corporation 2020 Long-Term Incentive Plan
File No. 001-16169, Form 10-Q dated August 4, 2020, Exhibit 10.4
File No. 001-16169, Form 10-Q dated August 4, 2020, Exhibit 10.5
Exelon Corporation Senior Management Severance Plan
File No. 001-16169, Form 10-K dated February 11, 2020, Exhibit 10.13
Exelon Corporation Senior Management Severance Plan as Amended and Restated
effective February 1, 2024
Filed herewith.
Form of Separation Agreement under Exelon Corporation Senior Management
Severance Plan (As Amended and Restated Effective January 1, 2020)
File No. 001-16169, Form 10-K dated February 11, 2020, Exhibit 10.21
315
Table of Contents
Exhibit No.
10-17
10-17-1
10-18
10-19
10-20
10-21
10-22
Description
Exelon Corporation Executive Death Benefits Plan dated as of January 1, 2003 *
Location
File No. 001-16169, Form 10-K dated February 13, 2007, Exhibit 10.52
First Amendment to Exelon Corporation Executive Death Benefits Plan, Effective
January 1, 2006 *
File No. 001-16169, Form 10-K dated February 13, 2007, Exhibit 10.53
Exelon Corporation Deferred Compensation Plan (As Amended and Restated Effective
January 1, 2005)
File No. 001-16169, Form 10-K dated February 13, 2007, Exhibit 10.56
Exelon Corporation Stock Deferral Plan (As Amended and Restated Effective
September 25, 2019)
File No. 001-16169, Form 10-Q dated October 31, 2019, Exhibit 10.5
Form of Exelon Corporation Change in Control Agreement
File No. 001-16169, Form 10-Q dated October 26, 2016, Exhibit 10.1
Letter Agreement, dated June 4, 2020, between Exelon Corporation and William A. Von
Hoene, Jr.
File No. 001-16169, Form 10-K dated February 24, 2021, Exhibit 10.74
2023 Amendment to Certain Plans of Exelon Corporation
Filed herewith.
Commonwealth Edison Company
Exhibit No.
10-23
10-24
Description
Deferred Prosecution Agreement, dated July 17, 2020, between Commonwealth Edison
Company and the U.S. Department of Justice and the U.S. Attorney for the Northern
District of Illinois
Credit Agreement for $1,000,000,000 dated February 1, 2022, between Commonwealth
Edison Company and various financial institutions
Location
File No. 001-01839, Form 8-K dated July 17, 2020, Exhibit 10.1
File No. 001-01839, Form 10-K dated February 25, 2022, Exhibit 10.42
Baltimore Gas and Electric Company
Exhibit No.
10-25
Description
Credit Agreement for $600,000,000 dated February 1, 2022, between Baltimore Gas
and Electric Company and various financial institutions
Location
File No. 001-01910, Form 10-K dated February 25, 2022, Exhibit 10.41
316
Table of Contents
PECO Energy Company
Exhibit No.
10-26
10-27
Description
PECO Energy Company Supplemental Pension Benefit Plan (As Amended and
Restated Effective January 1, 2009)
Credit Agreement for $600,000,000 dated February 1, 2022, between PECO Energy
Company and various financial institutions
Location
File No. 000-16844, Form 10-K dated February 6, 2009, Exhibit 10.20
File No. 000-16844, Form 10-K dated February 25, 2022, Exhibit 10.43
Atlantic City Electric Company, Potomac Electric Power Company, Delmarva Power & Light Company
Description
Bond Purchase Agreement, dated December 1, 2015, among Atlantic City Electric
Company and the purchasers signatory thereto
Credit Agreement for $900,000,000 dated February 1, 2022, between Potomac Electric
Power Company, Delmarva Power & Light Company, Atlantic City Electric Company
and various financial institutions
Location
File No. 001-03559, Form 8-K dated December 2, 2015, Exhibit 1.1
File Nos. 001-010172, 001-01405, 001-03559, Form 10-K dated February 25, 2022,
Exhibit 10.44
Exhibit No.
10-28
10-29
(14) Code of Ethics
Exelon Corporation
Exhibit No.
14-1
Description
Exelon Code of Conduct, as amended December 05, 2023
Location
Filed herewith.
(19) Insider trading policies and procedures
Exelon Corporation
Exhibit No.
19-1
Description
Exelon Insider Trading Policy
(97) Policy Relating to Recovery of Erroneously Awarded Compensation
Exelon Corporation
Location
Filed herewith.
Exhibit No.
97-1
Exhibit No.
21-1
21-2
21-3
21-4
Description
Exelon Financial Restatement Compensation Recoupment Policy
Location
Filed herewith.
Description
Subsidiaries
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
Baltimore Gas and Electric Company
317
Table of Contents
Exhibit No.
21-5
Description
Pepco Holdings LLC
21-6
21-7
21-8
23-1
23-2
23-3
24-1
24-2
24-3
24-4
24-5
24-6
24-7
24-8
24-9
24-10
24-11
24-12
24-13
24-14
24-15
24-16
24-17
24-18
24-19
24-20
24-21
24-22
Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Consent of Independent Registered Public Accountants
Exelon Corporation
Commonwealth Edison Company
Potomac Electric Power Company
Power of Attorney (Exelon Corporation)
Anthony K. Anderson
Anna Richo
Calvin G. Butler, Jr.
W. Paul Bowers
Marjorie Rodgers Cheshire
Matthew Rogers
Linda P. Jojo
Charisse R. Lillie
John F. Young
Brian Segedi
Power of Attorney (Commonwealth Edison Company)
Calvin G. Butler, Jr.
Ricardo Estrada
Zaldwaynaka Scott
Smita Shah
Gil C. Quiniones
Power of Attorney (PECO Energy Company)
Nicholas Bertram
Calvin G. Butler, Jr.
John S. Grady
Michael A. Innocenzo
Sharmaine Matlock-Turner
Michael Nutter
Michelle Hong
Power of Attorney (Baltimore Gas and Electric Company)
318
Table of Contents
Exhibit No.
24-23
24-24
24-25
24-26
24-27
24-28
24-29
24-30
24-31
24-32
24-33
24-34
24-35
24-36
24-37
24-38
24-39
24-40
24-41
24-42
24-43
24-44
24-45
24-46
24-47
24-48
Description
Calvin G. Butler, Jr.
James R. Curtiss
Carim V. Khouzami
Keith Lee
Rachel Garbow Monroe
Byron Marchant
Tim Regan
Amy Seto
Maria Harris Tildon
Power of Attorney (Pepco Holdings LLC)
Antoine Allen
J. Tyler Anthony
Calvin G. Butler, Jr.
Debra P. DiLorenzo
Benjamin Wu
Linda W. Cropp
Gayle Littleton
Power of Attorney (Potomac Electric Power Company)
J. Tyler Anthony
Phillip S. Barnett
Calvin G. Butler, Jr.
Rodney Oddoye
Valencia McClure
Tamla Olivier
Anne Bancroft
Power of Attorney (Delmarva Power & Light Company)
J. Tyler Anthony
Calvin G. Butler, Jr.
Power of Attorney (Atlantic City Electric Company)
J. Tyler Anthony
Certifications Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as to the Annual Report on Form 10-K for the year ended December 31, 2023 filed by the following
officers for the following registrants:
Exhibit No.
31-1
Description
Filed by Calvin G. Butler, Jr. for Exelon Corporation
319
Table of Contents
Exhibit No.
Description
31-2
31-3
31-4
31-5
31-6
31-7
31-8
31-9
31-10
31-11
31-12
31-13
31-14
31-15
31-16
Filed by Jeanne M. Jones for Exelon Corporation
Filed by Gil C. Quiniones for Commonwealth Edison Company
Filed by Joshua S. Levin for Commonwealth Edison Company
Filed by Michael A. Innocenzo for PECO Energy Company
Filed by Marissa Humphrey for PECO Energy Company
Filed by Carim V. Khouzami for Baltimore Gas and Electric Company
Filed by David M. Vahos for Baltimore Gas and Electric Company
Filed by J. Tyler Anthony for Pepco Holdings LLC
Filed by Phillip S. Barnett for Pepco Holdings LLC
Filed by J. Tyler Anthony for Potomac Electric Power Company
Filed by Phillip S. Barnett for Potomac Electric Power Company
Filed by J. Tyler Anthony for Delmarva Power & Light Company
Filed by Phillip S. Barnett for Delmarva Power & Light Company
Filed by J. Tyler Anthony for Atlantic City Electric Company
Filed by Phillip S. Barnett for Atlantic City Electric Company
Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code as to the Annual Report on Form 10-K for the year ended December 31, 2023 filed by the following officers for the
following registrants:
Exhibit No.
32-1
Description
Filed by Calvin G. Butler, Jr. for Exelon Corporation
32-2
32-3
32-4
32-5
32-6
32-7
32-8
32-9
32-10
32-11
32-12
32-13
32-14
32-15
32-16
Filed by Jeanne M. Jones for Exelon Corporation
Filed by Gil C. Quiniones for Commonwealth Edison Company
Filed by Joshua S. Levin for Commonwealth Edison Company
Filed by Michael A. Innocenzo for PECO Energy Company
Filed by Marissa Humphrey for PECO Energy Company
Filed by Carim V. Khouzami for Baltimore Gas and Electric Company
Filed by David M. Vahos for Baltimore Gas and Electric Company
Filed by J. Tyler Anthony for Pepco Holdings LLC
Filed by Phillip S. Barnett for Pepco Holdings LLC
Filed by J. Tyler Anthony for Potomac Electric Power Company
Filed by Phillip S. Barnett for Potomac Electric Power Company
Filed by J.Tyler Anthony for Delmarva Power & Light Company
Filed by Phillip S. Barnett for Delmarva Power & Light Company
Filed by J. Tyler Anthony for Atlantic City Electric Company
Filed by Phillip S. Barnett for Atlantic City Electric Company
320
Table of Contents
Exhibit No.
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Description
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Inline XBRL Taxonomy Extension Schema Document.
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
Inline XBRL Taxonomy Extension Definition Linkbase Document.
Inline XBRL Taxonomy Extension Labels Linkbase Document.
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
__________
* Compensatory plan or arrangements in which directors or officers of the applicable registrant participate and which are not available to all employees.
(a) These filings are not available electronically on the SEC website as they were filed in paper previous to the electronic system that is currently in place.
321
Table of Contents
ITEM 16.
FORM 10-K SUMMARY
All Registrants
Registrants may voluntarily include a summary of information required by Form 10-K under this Item 16. The Registrants have elected not to include such summary information.
322
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
EXELON CORPORATION
By:
Name:
Title:
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
/s/ JEANNE M. JONES
Jeanne M. Jones
/s/ ROBERT A. KLECZYNSKI
Robert A. Kleczynski
President, Chief Executive Officer (Principal Executive Officer) and Director
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Senior Vice President, Corporate Controller and Tax (Principal Accounting Officer)
This annual report has also been signed below by Gayle E. Littleton, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Anthony K. Anderson
Anna Richo
W. Paul Bowers
Marjorie Rodgers Cheshire
Matthew Rogers
By:
Name:
/s/ GAYLE E. LITTLETON
Gayle E. Littleton
Linda P. Jojo
Charisse R. Lillie
John F. Young
Bryan Segedi
323
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
COMMONWEALTH EDISON COMPANY
By:
Name:
Title:
/s/ GIL C. QUINIONES
Gil C. Quiniones
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
/s/ GIL C. QUINIONES
Gil C. Quiniones
/s/ JOSHUA S. LEVIN
Joshua S. Levin
/s/ STEVEN J. CICHOCKI
Steven J. Cichocki
Signature
Title
Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by Gil C. Quiniones, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Calvin G. Butler, Jr.
Ricardo Estrada
By:
Name:
/s/ GIL C. QUINIONES
Gil C. Quiniones
Zaldwaynaka Scott
Smita Shah
324
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
PECO ENERGY COMPANY
By:
Name:
Title:
/s/ MICHAEL A. INNOCENZO
Michael A. Innocenzo
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ MICHAEL A. INNOCENZO
Michael A. Innocenzo
/s/ MARISSA HUMPHREY
Marissa Humphrey
/s/ CAROLINE FULGINITI
Caroline Fulginiti
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by Michael A. Innocenzo, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Nicholas Bertram
Calvin G. Butler, Jr.
John S. Grady
By:
Name:
/s/ MICHAEL A. INNOCENZO
Michael A. Innocenzo
Sharmain Matlock-Turner
Michael Nutter
Michelle Hong
325
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
BALTIMORE GAS AND ELECTRIC COMPANY
By:
Name:
Title:
/s/ CARIM V. KHOUZAMI
Carim V. Khouzami
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ CARIM V. KHOUZAMI
Carim V. Khouzami
/s/ DAVID M. VAHOS
David M. Vahos
/s/ JASON T. JONES
Jason T. Jones
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by Carim V. Khouzami, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Calvin G. Butler, Jr.
James R. Curtiss
Keith Lee
Rachel Garbow Monroe
By:
Name:
/s/ CARIM V. KHOUZAMI
Carim V. Khouzami
Byron Marchant
Tim Regan
Amy Seto
Maria Harris Tildon
326
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
PEPCO HOLDINGS LLC
By:
Name:
Title:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ J. TYLER ANTHONY
J. Tyler Anthony
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
/s/ JULIE E. GIESE
Julie E. Giese
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by J. Tyler Anthony, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Antoine Allen
Calvin G. Butler Jr.
Debra P. DiLorenzo
By:
Name:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
Benjamin Wu
Linda W. Cropp
Gayle Littleton
327
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
POTOMAC ELECTRIC POWER COMPANY
By:
Name:
Title:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
/s/ J. TYLER ANTHONY
J. Tyler Anthony
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
/s/ JULIE E. GIESE
Julie E. Giese
Signature
Title
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer, Treasurer (Principal Financial Officer) and Director
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by J. Tyler Anthony, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Calvin G. Butler, Jr.
Rodney Oddoye
Valencia McClure
By:
Name:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
Tamla Olivier
Anne Bancroft
328
February 21, 2024
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
DELMARVA POWER & LIGHT COMPANY
By:
Name:
Title:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ J. TYLER ANTHONY
J. Tyler Anthony
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
/s/ JULIE E. GIESE
Julie E. Giese
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
This annual report has also been signed below by J. Tyler Anthony, Attorney-in-Fact, on behalf of the following Directors on the date indicated:
Calvin G. Butler, Jr.
By:
Name:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
February 21, 2024
329
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the 21st day of February, 2024.
SIGNATURES
ATLANTIC CITY ELECTRIC COMPANY
By:
Name:
Title:
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 21st day of
February, 2024.
Signature
Title
/s/ J. TYLER ANTHONY
J. Tyler Anthony
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
/s/ JULIE E. GIESE
Julie E. Giese
President, Chief Executive Officer (Principal Executive Officer) and Director
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
Director, Accounting (Principal Accounting Officer)
330
2023 AMENDMENT TO CERTAIN PLANS OF EXELON CORPORATION WHEREAS, Exelon Corporation (the “Company” or “Exelon”) and its subsidiaries sponsor and maintain for the benefit of certain of their employees and retirees (and their dependents) certain compensation and benefit plans and program listed on Appendix A (each a “Plan” and, collectively, the “Plans”); WHEREAS, on July 25, 2023, the Board of Directors of Exelon approved the Exelon Corporation Financial Restatement Compensation Recoupment Policy (the “Mandatory Clawback Policy”), in accordance with the requirements of Section 10D of the U.S. Securities Exchange Act of 1934, as amended, and Section 5608 of the Nasdaq Listing Rules; WHEREAS, pursuant to the Mandatory Clawback Policy, in the event of a Financial Restatement (as defined in the Mandatory Clawback Policy), the Company shall promptly recover certain incentive-based compensation and earnings accrued thereon from Executive Officers (as defined in the Mandatory Clawback Policy); WHEREAS, incentive-based compensation may include amounts provided as compensation or benefits under the Plans; WHEREAS, to reflect the requirements of the Mandatory Clawback Policy, the Company desires to amend the Plans to provide that compensation and benefits thereunder are subject to the Mandatory Clawback Policy; WHEREAS, the Company, through action of its Chief Human Resources Officer or other designated officer, is authorized to amend the Plans in these respects; and WHEREAS the Exelon Corporation Long-Term Incentive Plan and Key Management Severance Plan already provide for the clawback of compensation of benefits awarded thereunder. NOW, THEREFORE, BE IT RESOLVED, that the Plans set forth in Appendix A hereto are each hereby amended effective as of December 1, 2023 to provide that, notwithstanding any provision of any Plan to the contrary, compensation and benefits paid or
payable under each Plan shall be subject to clawback in accordance with the terms and conditions of the Exelon Corporation Financial Restatement Compensation Recoupment Policy, as in effect from time to time, including any amendments thereto or new clawback policies required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing applicable stock exchange listing standards or rules and regulations thereunder, or as otherwise required by law or regulation; and FURTHER RESOLVED, that the Company officers and their delegates are hereby authorized to execute all agreements, documents, instruments and certificates as are necessary, advisable or appropriate to carry out the purposes and intent of the foregoing resolutions. *******************
IN WITNESS WHEREOF, the undersigned officer has executed the foregoing resolutions on behalf of the Company, this 21st day of December, 2023. EXELON CORPORATION By: _____________________________ Amy E. Best Executive Vice President and Chief Human Resources Officer
APPENDIX A AMENDED PLANS Exelon Corporation Annual Incentive Program Exelon Corporation Supplemental Management Retirement Plan Exelon Corporation Deferred Compensation Plan Exelon Corporation Supplemental Pension Benefit Plan Constellation Energy Group, Inc. Senior Executive Supplemental Plan Constellation Energy Group, Inc. Supplemental Pension Plan Constellation Energy Group, Inc. Benefits Restoration Plan Constellation Energy Nuclear Group, LLC Benefits Restoration Plan Baltimore Gas & Electric Company Executive Benefit Plan Baltimore Gas & Electric Company Manager Benefit Plan Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan Conectiv Supplemental Executive Retirement Plan Pepco Holdings LLC Combined Executive Retirement Plan Each other plan or arrangement providing compensation or benefits that is subject to the Exelon Corporation Financial Restatement Compensation Recoupment Policy, as in effect from time to time.
EXELON CORPORATION SENIOR MANAGEMENT SEVERANCE PLAN (As Amended and Restated)
EXELON CORPORATION SENIOR MANAGEMENT SEVERANCE PLAN (As Amended and Restated) 1. PURPOSE OF THE PLAN The Exelon Corporation Senior Management Severance Plan, as amended and restated herein (the “Plan”), is effective as of February 1, 2024 (the “Effective Date”) except as otherwise specifically provided herein, and supersedes in its entirety all prior versions of the Plan with respect to any Termination of Employment occurring on or after the Effective Date. The Plan is intended to encourage the attraction and retention of executives of Exelon Corporation (“Exelon”) and its participating subsidiaries. 2. ELIGIBILITY Each employee of the Company selected by the Plan Administrator whose position is in Salary Band E09 or above (an “Executive”) shall be eligible to participate in the Plan in the event of his or her Termination of Employment, other than an Executive whose Termination of Employment is governed by the terms and conditions of another separation or change in control plan or agreement between such Executive and the Company or an affiliate thereof. 3. PARTICIPATION Each eligible Executive shall become a participant in the Plan (a “Participant”) as of his or her Termination Date, subject to his or her timely execution of, and compliance with the terms and conditions of (a) a separation agreement with the Company (“Separation Agreement”), (b) a waiver and release of claims which has become irrevocable (“Waiver and Release”) and (c) non-solicitation, confidential information, and intellectual property covenants and, in the discretion of the Plan Administrator, non-competition covenants (collectively, “Restrictive Covenants”), each of the foregoing documents in such form as the Plan Administrator, in its sole discretion, may require. 4. BENEFITS In addition to payment of all Accrued Obligations, a Participant shall be entitled to the following benefits upon his or her Termination of Employment: 4.1. Severance Pay. Continued payment of (a) his or her Base Salary, and (b) if the Participant is a participant in the Annual Incentive Award Plan for the year in which the Termination Date occurs, his or her Target Incentive, each payable during the Severance Period in substantially equal regular payroll installments commencing within 45 days after his or her Termination Date. 4.2. Annual Incentive Awards. Each Participant who is a participant in the Annual Incentive Award Plan for the year in which the Termination Date occurs shall remain eligible to receive a pro-rated Annual Incentive based on the number of days elapsed during such year as of the Termination Date, payable at the time such awards are paid to active employees for such
year (but not later than March 15 of the year following the
2 Termination Date). A Participant who is not a participant in the Annual Incentive Award Plan for the year in which the Termination Date occurs shall not be entitled to an Annual Incentive for such year, and the amount (if any) payable under any other annual incentive plan in which the Participate participates for such year shall be determined by the Plan Administrator in its sole discretion. 4.3. Long-Term Incentive Awards. Each of the Participant’s outstanding awards (if any) under the LTIP, including stock options, restricted stock, restricted stock units, restricted cash, performance shares, performance units and similar stock or cash incentive awards, shall become vested and payable to a Participant solely to the extent (and at the time) provided under the terms of the LTIP, applicable program and/or award agreement under which such awards are granted. 4.4. Health Care Coverage. (a) COBRA Coverage. During the Severance Period, a Participant (and his or her eligible dependents) who so elects shall be eligible to participate in the health care plans under which he or she was covered immediately prior to the Termination Date, in accordance with and subject to the terms and conditions of such plans as in effect from time to time. The Participant’s out of pocket costs (including premiums, deductibles and co-payments) for such coverage shall be the same as those in effect from time to time for active peer employees during such period. Such coverage shall be provided during the Severance Period in satisfaction of continuation coverage under Section 4980B of the Code and Section 601 to 609 of ERISA (“COBRA”) for such period. At the end of the Severance Period, COBRA continuation coverage at the Participant’s expense may be continued for any remaining balance of the statutory COBRA coverage period. (b) Retiree Coverage. A Participant who is in a classification and position eligible for retiree coverage as of his or her Termination Date and who, as of the last day of the Severance Period, has attained at least age 50 and completed at least 10 years of service (or who has completed such other age and service requirement then in effect under the Exelon Corporation Severance Benefit Plan or any successor plan as of the relevant time set forth in such plan) shall be entitled to elect to participate in such Company group health care programs that are then available to similarly situated retirees of his or her legacy Company who terminate employment as of the Termination Date. The eligibility for coverage and availability of programs or plans, the amounts charged for coverage, and the other terms, conditions and limitations under the Company’s group health care programs or plans shall remain
subject to the Company’s right to amend, change or terminate such programs or plans at any time. 4.5. SERP / Other Deferred Compensation. With respect to a Participant who has a vested benefit and actively participates in a defined benefit pension plan as of his or her Termination Date, the Severance Period (but not to exceed 24 months) shall be taken into
3 account as service solely for purposes of determining, to the extent relevant under the qualified defined benefit pension plan then covering the Participant, the amount of the Participant’s regular accrued SERP benefit, but not for purposes of determining eligibility for early retirement benefits (including any social security supplement) or any other purpose. In determining the amount of the Participant’s benefit, if any, the severance payments made under Section 4.1 shall be considered as if such payments were normal base salary and incentive payments. All amounts previously deferred by, or accrued to the benefit of, such Participant under a non-qualified deferred compensation plan of the Company shall, to the extent vested, be paid in accordance with the Participant’s distribution election in effect thereunder as of the Termination Date (or, if no affirmative election is in effect as of such date, the default election applicable to the Participant). 4.6. Life Insurance and Disability Coverage. A Participant shall be eligible for continued coverage under the applicable life insurance and executive-only long term disability plans sponsored by the Company (or other equivalent coverage or benefits) through the last day of the Severance Period applicable to such Participant on the same terms and subject to the same terms and conditions as are applicable to active peer employees (including, without limitation, submission of proof by an Executive who seeks long term disability benefits that such Executive would have satisfied the conditions for such benefits had the Executive been an employee during the Severance Period and terminated employment on or before the last day of such period). 4.7. Outplacement and Financial Counseling Services. During the twelve-month period following the Termination Date, the Company shall reimburse the Participant for reasonable fees as incurred for services rendered by a professional outplacement organization approved by the Plan Administrator to provide individual outplacement services, and the Participant shall be eligible to receive financial counseling services consistent with the terms and conditions applicable to active peer executives under Exelon’s executive perquisite policy. 5. CHANGE IN CONTROL BENEFITS A Participant, whose Termination Date occurs during the period commencing ninety (90) days before a Change Date and ending on the second anniversary of such Change Date, shall be entitled to the payment of all Accrued Obligations and the following benefits in lieu of the benefits described in Section 4 hereof: 5.1. Severance Pay. Continued payment of (a) his or her Base Salary, and (b) if the Participant is a participant in the Annual
Incentive Award Plan for the year in which the Termination Date occurs, his or her Target Incentive, each payable during the Severance Period in substantially equal regular payroll installments commencing within 45 days after his or her Termination Date. 5.2. Annual Incentive for Year of Termination. A pro-rated Annual Incentive under the annual incentive plan applicable to such Participant for the year in which the Termination Date occurs, based on the number of days elapsed during such year as of the Termination Date, payable at the time such awards are paid to active employees for such year (but not later than March 15 of the year following the Termination Date).
4 5.3. Long-Term Incentive Awards. (a) Stock Options. Each outstanding stock option granted to the Participant under the LTIP shall (i) become fully vested as of the Termination Date, and (ii) thereafter remain exercisable until the fifth anniversary of the Termination Date or, if earlier, the expiration date of any such stock option, provided that this provision shall not limit the right of the Company to cancel such stock options in connection with a Change in Control in accordance with the terms and conditions of the LTIP. (b) Restricted Stock, Stock Unit and Cash Awards. All forfeiture conditions that are applicable as of the Termination Date to any outstanding shares of restricted stock, restricted stock units or restricted cash awarded to the Participant under the LTIP shall (except as expressly provided to the contrary in such awards) lapse and such awards shall become fully vested as of the Termination Date. (c) Other LTIP Awards. To the extent the performance period applicable to any outstanding performance shares, performance units or similar stock or cash incentive awards granted to the Executive under the LTIP has ended as of the Termination Date (or, if later, the Change Date), including performance periods that are terminated early in connection with the Change in Control, such awards shall become fully vested and payable (to the extent not already paid), based on the performance level attained (or deemed to have been attained in connection with the Change in Control). To the extent the performance period applicable to any such award has not ended as of the Termination Date (or, if later, the Change Date), such award shall become fully vested and payable based on the extent to which the performance goals established under the LTIP for such performance period are attained as of the last day of the performance period. 5.4. Make-Whole if Termination Date Precedes Change Date. Notwithstanding the foregoing provisions of this Section 5, in the event the Participant’s Termination Date occurs during the 90-day period preceding the Change Date, then (i) any payments that would have been to the Participant earlier under Sections 5.1 or 5.2, had the Change Date preceded his or her Termination Date, will be paid in a lump sum within 45 days after the Change Date, (ii) none of the Participant’s LTIP awards described in Section 5.3 shall expire or be forfeited during the 90-day period preceding the Change Date, except to the extent they would have expired or been forfeited had the Participant remained employed until the Change Date, and (iii) any lapse of restrictions and vesting of such LTIP awards that would have occurred as of the Termination Date, had it been preceded by the Change
Date, shall occur as of the Change Date. 5.5. Continuation of Welfare Benefits. (a) COBRA Coverage. During the Severance Period, a Participant (and his or her dependents) who so elects shall be eligible to participate in the health care plans under which he or she was covered immediately prior to the Termination Date, in accordance with and subject to the terms and
5 conditions of such plans as in effect from time to time. The Participant’s out of pocket costs (including premiums, deductibles and co-payments) for such coverage shall be the same as those in effect from time to time for active peer employees during such period. Such coverage shall be provided during the Severance Period in satisfaction of continuation coverage under COBRA for such period. At the end of the Severance Period, COBRA continuation coverage at the Participant’s expense may be continued for the remaining balance of the statutory COBRA coverage period, if any. (b) Retiree Coverage. A Participant who is in a classification and position eligible for retiree coverage as of his or her Termination Date and who, as of the last day of the Severance Period, has attained at least age 50 and completed at least 10 years of service (or who has completed such other age and service requirement then in effect under the Exelon Corporation Severance Benefit Plan or any successor plan as of the relevant time set forth in such plan) shall be entitled to elect to participate in such Company group health care programs that are then available to similarly situated retirees of his or her legacy Company who terminate employment as of the Termination Date. The eligibility for coverage and availability of programs or plans, the amounts charged for coverage, and the other terms, conditions and limitations under the Company’s group health care programs or plans shall remain subject to the Company’s right to amend, change or terminate such programs or plans at any time. 5.6. SERP/ Other Deferred Compensation. For purposes of the Participant’s SERP benefit (if the Participant then actively participates in a defined benefit pension plan), the Severance Period (but not to exceed 24 months) shall be taken into account as service solely for purposes of determining whether the Participant is vested and, to the extent relevant under the qualified defined benefit pension plan then covering the Participant, the amount of the Participant’s regular accrued SERP benefit, but not for purposes of determining eligibility for early retirement benefits (including any social security supplement) or any other purpose. In determining the amount of the Participant’s vested benefit, if any, the severance payments made under Section 5.1 shall be considered as if such payments were normal base salary and incentive payments. All amounts previously deferred by, or accrued to the benefit of, such Participant under a non-qualified deferred compensation plan of the Company shall, to the extent vested, be paid in accordance with the Participant’s distribution election in effect thereunder as of the Termination Date (or, if
affirmative election is in effect as of such date, the default election applicable to the Participant) 5.7. Life Insurance and Disability Coverage. A Participant shall be eligible for continued coverage under the applicable life insurance and executive-only long term disability plans or programs sponsored by the Company (or other equivalent coverage or benefits) through the last day of the Severance Period applicable to such Participant on the same terms and subject to the same terms and conditions as are applicable to active peer employees (including, without limitation, submission of proof by an Executive who seeks long term disability benefits that such Executive would have satisfied the conditions for
6 such benefits had the Executive been an employee during the Severance Period and terminated employment on or before the last day of such period). 5.8. Outplacement and Financial Counseling Services. During the 12-month period following the Termination Date, the Company shall pay or cause to be paid on behalf of such Participant, as incurred, all reasonable fees and costs charged by a nationally recognized outplacement firm selected by such Participant for outplacement services. During such period, the Participant also shall be eligible to receive financial counseling services consistent with the terms and conditions applicable to active peer executives under Exelon’s executive perquisite policy as of the Termination Date. 5.9. Procedural Requirements. The Company shall strictly observe or cause to be strictly observed each of the following procedures in connection with any termination for Cause during the period commencing on a Change Date and ending on the second anniversary of such Change Date: an eligible Executive’s termination of employment shall not be deemed to be for Cause unless and until there shall have been delivered to such Executive a written notice of the determination of the Chief Executive Officer of the Company which is the Executive’s employer (“CEO”) (after reasonable written notice of such consideration by the CEO of acts or omissions alleged to constitute Cause is provided to such Executive and such Executive is given an opportunity to present a written response to the CEO regarding such allegations), finding that, in his or her good faith opinion, such Executive’s acts, or failure to act, constitutes Cause and specifying the particulars thereof in detail. 5.10. Sole and Exclusive Obligations. The obligations of the Company under this Plan with respect to any Termination of Employment under this Section 5 shall supersede and not duplicate any severance obligations of the Company in any other plan of the Company or prior agreement between such Participant and the Company or its predecessor in interest. 5.11. Payment Capped. If the Plan Administrator determines that any benefits paid or payable under this Plan to a Participant would give rise to liability of the Participant for the excise tax imposed by Section 4999 of the Code or any successor provision, then the amount payable to the Participant hereunder shall be reduced by the Company to the extent necessary so that no portion is subject to such excise tax; provided, however, such reduction shall be made only if it results in the Participant retaining a greater amount of benefits on an after-tax basis (taking into account the excise tax and applicable federal, state, and local income
and payroll taxes) than the amount of benefits on an after-tax basis (taking into account the excise tax and applicable federal, state, and local income and payroll taxes) the Participant would have retained absent such reduction. In the event benefits are required to be reduced pursuant to this Section 5.11, then they shall be reduced in the following order of priority in a manner consistent with Section 409A of the Code: (i) first from cash benefits (ii) next from performance-vested equity benefits, with benefits having later payments dates being reduced first; (iii) next from time-vested equity benefits, with benefits having later payment dates being reduced first; and (iv) in the case of equity benefits having the same payments dates, pro-rata amongst all such benefits. The Plan Administrator shall, in its sole discretion, choose an independent public accounting firm or professional consulting services provider of national reputation and experience to make in writing in good faith all calculations and determinations under
7 this Section 5.11 including the assumptions to be used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 5.11, the accountants may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. The Plan Administrator shall furnish to the accountants information and documents as the Accountants may reasonably request to make the calculations and determinations under this Section 5.11 and shall bear all costs the accountants incur in connection with any calculations contemplated hereby. 6. TERMINATION OF PARTICIPATION; CESSATION OF BENEFITS; RECOUPMENT A Participant’s benefits under the Plan shall terminate on the last day of the Participant’s Severance Period; provided that a Participant’s right to benefits shall terminate immediately on the date that the Participant breaches any of the terms of his or her Separation Agreement, Restrictive Covenants or Waiver and Release, or if at any time the Company determines (in accordance with Section 5.9 with respect to a Participant receiving benefits under Section 5) that in the course of his or her employment the Executive engaged in conduct described in Section 7.5(b), (c), (d) or (e), in which case the Company may require the repayment of amounts paid pursuant to Section 4 or Section 5 (other than any Accrued Obligations) prior to such breach or other conduct, and shall discontinue the payment of any additional amounts under the Plan. To the extent that the Company makes payments and provides benefits to an Executive and the Executive either does not timely execute and deliver the Waiver and Release to the Company or revokes the Waiver and Release in accordance with its terms, Executive shall pay to the Company within 10 days following the expiration of the consideration period of the Waiver and Release or the date such Waiver and Release was revoked, a lump sum payment of all payments and the value of all benefits (other than Accrued Obligations) received by Executive to date hereunder. Notwithstanding any provision of the Plan or any Separation Agreement to the contrary, benefits paid or payable to a Participant under the Plan shall be subject to any executive or officer recoupment or claw back policy of the Board of Directors (including but not limited to Exelon’s Financial Restatement Compensation Recoupment Policy), as in effect from time to time. Any termination and/or recoupment of benefits under the Plan shall be in addition and without prejudice to any other remedies that the Company may elect to assert. 7. DEFINITIONS In addition to terms
previously defined, when used in the Plan, the following capitalized terms shall have the following meanings unless the context clearly indicates otherwise: 7.1. “Accrued Obligations” means, the sum of a Participant’s (a) Base Salary (b) any annual incentive with respect to the preceding fiscal year, (c) any unused vacation or paid time off days and (d) any properly reimbursable business expenses; in each case which are accrued but unpaid as of the Termination Date. 7.2. “Annual Incentive” means (a) for purposes of Section 4 hereof, an amount to which a Participant would have been entitled under the Annual Incentive Award Plan based on the actual performance goals established pursuant to such plan and assuming a
8 “meaningful impact” individual performance rating, or (b) for purposes of Section 5 hereof, an amount to which a Participant would have been entitled under the Annual Incentive Award Plan (or any other short-term incentive plan of the Company or its successor applicable to such Participant in lieu of the Annual Incentive Award Plan) based on the actual achievement of performance goals established pursuant to such plan (or if such performance cannot reasonably be determined, the average of the actual Annual Incentives paid or payable to the Participant for each of the two calendar years preceding the Termination Date), assuming a “meaningful impact” individual performance rating (if applicable) and disregarding any reduction in a Participant’s Base Salary or Target Incentive (if any) occurring during the period beginning 90 days prior to the Change Date. 7.3. “Annual Incentive Award Plan”, means the Exelon Corporation Annual Incentive Award Plan (but not any other short-term incentive plan of a Company), or any successor plan thereto (including but not limited to any annual incentive plan of a successor to Exelon pursuant to a Change in Control). 7.4. “Base Salary” means (a) for purposes of Section 4, the annualized base salary payable to the Participant as of his or her Termination Date, and (b) for purposes of Section 5, the greater of the amount determined in the immediately preceding clause and 12 times the highest annualized base salary paid or payable to the Participant by the Company in respect of the 12-month period immediately before the Change Date. 7.5. “Cause” means, with respect to any Executive: (a) the refusal to perform or habitual neglect in the performance of the Executive’s duties or responsibilities, or of specific directives of the Board of Directors of a Company or the officer or other executive to whom the Executive reports which are not materially inconsistent with the scope and nature of the Executive’s employment duties and responsibilities; (b) the Executive’s willful or reckless commission of act(s) or omission(s) which have resulted in, or in the Company’s reasonable judgment are likely to result in, a material loss to, or material damage to the reputation of the Company or any of its affiliates, or that compromise the safety of any employee or other person; (c) the Executive’s commission of a felony or any crime involving dishonesty or moral turpitude; (d) the Executive’s material violation of Exelon’s or any of its affiliate’s Code of Business Conduct (including the corporate policies referenced therein), or of any statutory or common law duty of loyalty to Exelon or any of its affiliates; or (e) any breach by the Executive of one or more of the
Restrictive Covenants. 7.6. “Change Date” means the date on which a Change in Control occurs.
9 7.7. “Change in Control” has the meaning set forth in the definition of such term in the LTIP. 7.8. “COBRA” has the meaning set forth in Section 4.4 hereof. 7.9. “Code” means the Internal Revenue Code of 1986, as amended. 7.10. “Company” means, individually and collectively, Exelon, Atlantic City Electric Company, Baltimore Gas and Electric Company, Commonwealth Edison Company, Delmarva Power & Light Company, Exelon Business Services Company, LLC, PECO Energy Company, PHI Service Company, Potomac Electric Power Company and any other subsidiary of the foregoing of which Exelon directly or indirectly owns at least 80% of the outstanding voting power and that is designated by the Plan Administrator as a participating employer in the Plan. 7.11. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 7.12. “Executive” has the meaning set forth in Section 2 hereof. 7.13. “Exelon” has the meaning set forth in Section 1 hereof. 7.14. “Good Reason” means: (a) for purposes of Section 4 hereof, (i) a material reduction of an Executive’s base salary unless such reduction is part of a policy, program or arrangement applicable to peer executives of the Company or of the Executive’s business unit; (ii) a demotion below the Executive level; or (iii) with respect to Exelon’s Chief Executive Officer, a material adverse reduction in his or her position or duties, but excluding any such change caused solely by a disposition of all or a significant portion of a Company’s business or operations. (b) for purposes of Section 5 hereof, the occurrence of any one or more of the following actions or omissions that occurs during the period commencing on a Change Date and ending on the second anniversary of such Change Date: (i) a material reduction of an Executive’s base salary, incentive compensation opportunity or aggregate benefits; (ii) a material adverse reduction in the Executive’s position, duties or responsibilities (excluding, with respect to an Executive other than the Chief Executive Officer of a Company, a change in the position or level of officer to whom the Executive reports);
10 (iii) a relocation by more than 50 miles of (A) the Executive’s primary workplace, or (B) the principal offices of Exelon or its successor (if such offices are such Executive’s workplace), in each case without the Executive’s consent; provided, however, in both cases of (A) and (B) of this subsection (b)(iii), such new location is farther from the Executive’s residence than the prior location; or (iv) a material breach of this Plan by Exelon or its successor. (c) Limitations on Good Reason. Notwithstanding the foregoing provisions of this Section, no act or omission shall constitute a material breach of this Plan by Exelon, nor grounds for “Good Reason”: (i) unless the Executive gives the Plan Administrator a Notice of Termination at least 30 days prior to the Executive’s Termination Date, and the Company fails to cure such act or omission within the 30-day period; (ii) if the Executive first acquired knowledge of such act or omission more than 90 days before such Participant gives the Plan Administrator such Notice or Termination; or (iii) if the Executive has consented in writing to such act or omission. 7.15. “including” means including without limitation. 7.16. “LTIP” means the Exelon Corporation Long-Term Incentive Plan, as amended from time to time, or any successor thereto. 7.17. “Notice of Termination” means a written notice given by an Executive to the executive or officer to whom he or she reports and to the Plan Administrator which sets forth in reasonable detail the specific facts and circumstances claimed to provide a basis for a Termination of Employment for Good Reason. 7.18. “Participant” has the meaning set forth in Section 3 hereof. 7.19. “Person” means any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government instrumentality, division, agency, body or department. 7.20. “Plan Administrator” means Exelon’s Vice President, Corporate Compensation or, in the event the person holding such position as of a Change Date ceases to hold such position during the succeeding 24 months, a person appointed by the majority of the member of the board of directors who were directors of Exelon immediately prior to the Change Date.
11 7.21. “Restrictive Covenants” has the meaning set forth in Section 3 hereof. 7.22. “Section” means, unless the context otherwise requires, a section of this Plan. 7.23. “Senior Executive Management” means (a) Exelon’s Chief Executive Officer, (b) each Executive Vice President or above who reports directly to Exelon’s Chief Executive Officer and/or is Exelon’s Chief Financial, Human Resources, or Legal Officer, and (c) each Chief Executive Officer of a Company. 7.24. “Separation Agreement” has the meaning set forth in Section 3 hereof. 7.25. “SERP” means the non-qualified supplemental defined benefit pension plan of the Company, if any, in which an Executive actively participates as of his or her Termination Date. 7.26. “Severance Period” means the period during which Base Salary and Target Incentive is payable to a Participant, based on his or her level of seniority and period of continuous service with the Company immediately preceding the Termination Date, as set forth below. (a) For purposes of Section 4 hereof, the Severance Period with respect to: (i) Senior Executive Management shall be 24 months (18 months if less than 2 continuous years of service; 12 months if less than one continuous year of service); (ii) Any Senior Vice President or above shall be 18 months ([15] months if less than 2 continuous years of service; [9] months if less than 1 continuous year of service); and (iii) any other Executive shall be 15 months (12 months if less than 2 continuous years of service; 6 months if less than 1 continuous year of service). (b) For purposes of Section 5 (i.e., Change in Control) hereof, the Severance Period with respect to: (i) Senior Executive Management shall be 2.99 years; (ii) any other Senior Vice President or above shall be 18 months; and (iii) any other Executive shall be 15 months. 7.27. “Specified Employee” means a “specified employee” within the meaning of Section 409A of the Code.
12 7.28. “Target Incentive” means an amount equal to the percentage of the Participant’s Base Salary (if any) to which he or she would have been entitled immediately prior to such date under the Annual Incentive Award Plan for the year in which the Termination Date occurs if the Participant were employed for the entire year and the performance goals established pursuant to such plan were achieved at the 100% (target) level. 7.29. “Termination Date” means the effective date of an eligible Executive’s Termination of Employment with the Company, which shall be the date on which such Executive has a “separation from service,” within the meaning of Section 409A of the Code; provided, however, that if the Executive terminates his or her employment for Good Reason, the Termination Date shall not be earlier than the thirtieth day following the Company’s receipt of such Executive’s Notice of Termination, unless the Plan Administrator consents in writing to an earlier Termination Date. 7.30. “Termination of Employment” means: (a) a termination of an eligible Executive’s employment by the Company for reasons other than for Cause or disability; or (b) a resignation by an eligible Executive for Good Reason. The following shall not constitute a Termination of Employment for purposes of the Plan: (i) a termination of employment for Cause, (ii) an Executive’s resignation for any reason other than for Good Reason, (iii) the cessation of an Executive’s employment with the Company or any Affiliate due to death or disability (as determined by the Plan Administrator in good faith), or (iv) the cessation of an Executive’s employment with the Company or any subsidiary thereof as the result of the sale, spin-off or other divestiture of a plant, division, business unit or subsidiary or a merger or other business combination followed by employment or reemployment with the purchaser or successor in interest to the Executive’s employer with regard to such plant, division, business unit or subsidiary, or an offer of employment by such purchaser or successor in interest on terms and conditions substantially comparable in the aggregate (as determined by the Plan Administrator in its sole discretion) to the terms and conditions of the Executive’s employment with the Company or its subsidiary immediately prior to such transaction. 7.31 “Waiver and Release” has the meaning set forth in Section 3 hereof. 8. FUNDING The Plan is an unfunded employee welfare benefit plan maintained for the purpose of providing severance benefits to a select group of management or highly compensated employees. Nothing in the Plan shall be interpreted as requiring the Company to set aside any of its assets for
obligations under the Plan. No person entitled to benefits under the Plan shall have any right, title or claim in or to any specific assets of the Company, but shall have the right only as a general creditor to receive benefits from the Company on the terms and conditions provided in the Plan.
13 9. ADMINISTRATION OF THE PLAN The Plan shall be administered on a day-to-day basis by the Plan Administrator. The Plan Administrator has the sole and absolute power and authority to interpret and apply the provisions of this Plan to a particular circumstance, make all factual and legal determinations, construe uncertain or disputed terms and make eligibility and benefit determinations in such manner and to such extent as the Plan Administrator, in his or her sole discretion may determine. Benefits under the Plan will be paid only if the Plan Administrator, in his or her discretion, determines that an individual is entitled to them; provided, however, that any dispute after the claims procedure under Section 10 has been exhausted regarding whether an Executive’s termination of employment for purposes of Section 5 is based on either Good Reason or Cause may, at the election of the Executive, be submitted to binding arbitration pursuant to Section 11. The Plan Administrator may promulgate any rules and regulations it deems necessary to carry out the purposes of the Plan or to interpret the terms and conditions of the Plan; provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Plan. The rules, regulations and interpretations made by the Plan Administrator shall, where appropriate, be applied on a consistent basis with respect to similarly situated Executives, and shall be final and binding on any Executive or former Executive and any successor in interest. The Plan Administrator may delegate any administrative duties, including, without limitation, duties with respect to the processing, review, investigation, approval and payment of severance pay and provision of severance benefits, to designated individuals or committees. The Plan Administrator may amend any Participant’s Separation Agreement to the extent the Plan Administrator determines it is reasonably necessary or appropriate to do so to comply with section 409A of the Code. 10. CLAIMS PROCEDURE The Plan Administrator shall determine the status of an individual as an Executive and the eligibility and rights of any Executive or former Executive as a Participant to any severance pay or benefits hereunder. Any Executive or former Executive who believes that he or she is entitled to receive severance pay or benefits under the Plan, including severance pay or benefits other than those initially determined by the Plan Administrator, may file a claim in writing with the Plan Administrator. Within 90 days after the receipt of the claim the Plan Administrator shall either allow or deny the claim in writing, unless special circumstances require an extension of
time for processing, in which case a decision shall be rendered as soon as practicable, but not later than 180 days after receipt of a request for review. A claimant whose claim is denied (or his or her duly authorized representative) may, within 60 days after receipt of the denial of his or her claim, request a review upon written application to Exelon’s Chief Human Resources Officer or other officer designated by Exelon and specified in the claim denial; review (without charge) relevant documents; and submit written comments, documents, records and other information relating to the claim. The Chief Human Resources Officer or other designated officer shall notify the claimant of his or her decision on review within 60 days after receipt of a request for review unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of a request for review.
14 Notice of the decision on review shall be in writing. The officer’s decision on review shall be final and binding on any claimant or any successor in interest. In reviewing a claim or an appeal of a claim denial, the Plan Administrator and the Chief Human Resources Officer or other officer designated by Exelon shall have all of the powers and authority granted to the Plan Administrator pursuant to Section 9. 11. STATUTE OF LIMITATIONS; ARBITRATION No Executive (or representative thereof) may bring any legal or equitable action to recover benefits under the Plan until he or she has exhausted the internal claims and appeals process described above. Any such action must be commenced no later than the first anniversary of a final decision on a claim for benefits (or such earlier date provided in any applicable statute of limitations). Any such action shall be brought exclusively in the federal courts in the Northern District of Illinois, provided that any dispute, controversy or claim between the parties hereto concerning whether an Executive’s termination of employment for purposes of Section 5 is based on either Good Reason or Cause may, at the election of the Executive, be settled by binding arbitration in Chicago, Illinois, before an impartial arbitrator pursuant to the rules and regulations of the American Arbitration Association (“AAA”) pertaining to the arbitration of commercial disputes. The costs and fees of the arbitrator shall be borne equally by the parties, regardless of the result of the arbitration. Notwithstanding anything to the contrary contained in this Section or elsewhere in this Plan, any party may seek relief in the form of specific performance, injunctive or other equitable relief in order to enforce the decision of the arbitrator, and the Company may seek injunctive relief to enforce the above-referenced statutes of limitations. 12. AMENDMENT OR TERMINATION OF PLAN The Talent Management and Compensation Committee of Exelon’s Board of Directors (or its delegate) may amend, modify or terminate the Plan at any time, and Exelon’s Chief Human Resources Officer may amend the Plan without action of such Committee with respect to matters other than eligibility and severance levels of executive officers at any time; provided, however, that no amendment, modification or termination shall deprive any Participant of any payment or benefit that the Plan Administrator previously has determined is payable under the Plan. Notwithstanding the foregoing, no amendment or termination that reduces the severance payments or materially adversely affects any Participant’s other benefits under Section 5 shall become effective as to such Participant during the
24-month period following a Change Date unless such Participant consents to such termination or amendment. Any purported Plan termination or amendment in violation of this Section 12 shall be void and of no effect. 13. MISCELLANEOUS 13.1. Limitation on Rights. Participation in the Plan is limited to the individuals described in Sections 2 and 3, and the benefits under the Plan shall not be payable with respect to any voluntary or involuntary termination of employment that is not a Termination of Employment. 13.2. Offset; No Mitigation.
15 (a) To the extent permitted by Section 409A of the Code, the amount of a Participant’s payments under Section 4 of this Plan may be reduced to the extent necessary to defray amounts owed by the Participant due to unused expense account balances, overpayment of salary, awards or bonuses, advances or loans. (b) A Participant shall not have any duty to mitigate the amounts payable by the Company under this Plan by seeking new employment following termination. Except as specifically otherwise provided in this Plan, all amounts payable pursuant to this Plan shall be paid without reduction regardless of any amounts of salary, compensation or other amounts which may be paid or payable to the Executive as the result of the Executive’s employment by another, unaffiliated employer. 13.3. Indemnification. Each Participant shall be indemnified and held harmless by the Company to the greatest extent permitted under applicable law and the Company’s by- laws (as in effect immediately preceding the Change Date with respect to a termination pursuant to Section 5) if such Participant was, is, or is threatened to be, made a party to any pending, completed or threatened action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding brought by a third party whether civil, criminal, administrative or investigative, and whether formal or informal, by reason of the fact that such Participant is or was, or had agreed to become, a director, officer, employee, agent, or fiduciary of the Company or any other entity which such Participant is or was serving at the request of the Company (“Proceeding”), against all expenses (including all reasonable attorneys’ fees) and all claims, damages, liabilities and losses incurred or suffered by such Participant or to which such Participant may become subject for any reason; provided, that the Participant provides the Plan Administrator written notice of any such Proceeding promptly after receipt and such that the Company’s ability to defend shall not be prejudiced in any fashion and the Company shall have the right to direct the defense, approve any settlement and shall not be required to indemnify the Participant in connection with any proceeding initiated by the Participant, including a counterclaim or crossclaim. 13.4. Severability. If any one or more Sections, subsections or other portions of this Plan are declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not serve to invalidate any Section, subsection or other portion not so declared to be unlawful or invalid. Any Section, subsection or other portion so declared to be
unlawful or invalid shall be construed so as to effectuate the terms of such Section, subsection or other portion to the fullest extent possible while remaining lawful and valid. Notwithstanding the foregoing, in the event a determination is made that the Restrictive Covenants are invalid or unenforceable in whole or in part, then the Separation Agreement with respect to the Participant subject to such determination shall be void and the Company shall have no obligation to provide benefits under this Plan to such Participant. 13.5. Governing Law. The Plan shall be construed and enforced in accordance with the applicable provisions of ERISA and Section 409A of the Code.
16 13.6. No Right to Continued Employment. Nothing in this Plan shall guarantee the right of a Participant to continue in employment, and the Company retains the right to terminate a Participant’s employment at any time for any reason or for no reason. 13.7. Successors and Assigns. This Plan shall be binding upon and inure to the benefit of Exelon and its successors and assigns and shall be binding upon and inure to the benefit of a Participant and his or her legal representatives, heirs and legatees. No rights, obligations or liabilities of a Participant hereunder shall be assignable without the Plan Administrator’s prior written consent. In the event of the death of a Participant prior to receipt of severance pay or benefits to which he or she is entitled hereunder (and, with respect to benefits under Section 4 or Section 5, after he or she has signed the Waiver and Release), the severance pay described in Section 4.1 or 5.1, as applicable, shall be paid to his or her estate, and the Participant’s dependents who are covered under any health care plans maintained by the Company shall be entitled to continued rights under Section 4.4 or Section 5.5, as applicable; provided that the estate or other successor of the Participant has not revoked such Waiver and Release. 13.8. Notices. All notices and other communications under this Plan shall be in writing and delivered by hand, by nationally recognized delivery service that promises overnight delivery, or by first-class registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) If to a Participant, to such Participant at his most recent home address on file with the Company; (b) If to the Company, to the Plan Administrator; (c) or to such other address as either party shall have furnished to the other in writing. Notice and communications shall be effective upon notice of delivery to the addressee. 13.9. Tax Withholding. The Company may withhold from any amounts payable under this Plan or otherwise payable to a Participant or beneficiary any federal, state, city and other taxes the Company determines to be appropriate under applicable law and may report all such amounts payable to such authority in accordance with any applicable law or regulation. 13.10. Section 409A and Changes to Law. (a) It is the intention of the Company that the provisions of this Plan comply with Section 409A of the Code, and all provisions of this Plan shall be construed and interpreted in a manner consistent with Section 409A of the Code. The Company shall administer and operate this Plan in compliance with Section 409A of the Code and any rules, regulations or other guidance promulgated thereunder as in effect from time to time
and in the event that the Company determines that any provision of this Plan does not comply with Section 409A of the Code or any such rules, regulations or guidance and that as a result any Participant may become subject to a tax under Section 409A of the Code, notwithstanding Section 12, the
17 Company shall have the discretion to amend or modify such provision to avoid the application of such tax, and in no event shall any Participant’s consent be required for such amendment or modification. Notwithstanding any provision of this Plan to the contrary, each Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with amounts payable pursuant to this Plan (including any taxes arising under Section 409A of the Code), and the Company not shall have any obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes. (b) In the event that the Company determines that any provision of this Plan violates, or would result in any material liability (other than liabilities for the severance benefits) to the Company, under any law, regulation, rule or similar authority of any governmental agency the Company shall be entitled, notwithstanding Section 12, to amend or modify such provision as the Company determines in its discretion to be necessary or desirable to avoid such violation or liability, and in no event shall any Participant’s consent be required for such amendment or modification. (c) The payments under this Plan are designated as separate payments for purposes of the short-term deferral rule under Treasury Regulation Section 1.409A-1(b)(4), the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A 1(b)(9)(iii), and the exemption for medical expense reimbursements under Treasury Regulation Section 1.409A 1(b)(9)(v)(B). As a result, (A) payments that are made on or before the 15th day of the third month of the calendar year following the year that includes the Participant’s Termination Date, (B) any additional payments that are made on or before the last day of the second calendar year following the year of the Participant’s Termination Date and do not exceed the lesser of two times the Participant’s annual rate of pay in the year prior to his termination or two times the limit under Section 401(a)(17) of the Code then in effect, and (C) continued medical expense reimbursements during the applicable COBRA period, are exempt from the requirements of Section 409A of the Code. (d) To the extent any amounts under this Plan are payable by reference to a Participant’s Termination of Employment, such term and similar terms shall be deemed to refer to such Participant’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Plan, to the extent any payments hereunder constitute “nonqualified deferred compensation,” within the meaning of
Section 409A of the Code (a “Section 409A Payment”), and the Participant is a specified employee, within the meaning of Treasury Regulation Section 1.409A 1(i), as determined by the Company in accordance with any method permitted under Section 409A of the Code, as of the date of the Participant’s separation from service, each such Section 409A Payment that is payable upon such Participant’s separation
18 from service and would have been paid prior to the six-month anniversary of such Participant’s separation from service, shall be delayed until the earlier to occur of (i) the six-month anniversary of Participant’s separation from service and (ii) the date of Participant’s death. Further, to the extent that any amount is a Section 409A Payment and such payment is conditioned upon Participant’s execution of a release and which is to be paid or provided during a designated period that begins in one taxable year and ends in a second taxable year, then such Section 409A Payment shall be paid or provided in the later of the two taxable years. (e) Any reimbursements payable to a Participant pursuant to this Plan or otherwise shall be paid to such Participant in no event later than the last day of the calendar year following the calendar year in which such Participant incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Plan shall not be subject to liquidation or exchange for any other benefit. Any tax gross-up payment payable to a Participant, whether under this Plan or otherwise, shall be paid to the Participant or to the applicable taxing authorities on the Participant’s behalf as soon as practicable after the related taxes are due, but in any event not later than the last day of the calendar year following the calendar year in which the related taxes are remitted to the taxing authorities. EXELON CORPORATION By: _______________________________ Executive Vice President and Chief Human Resources Officer
Exelon Corporation Code of Business Conduct Performance that Drives Progress
©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Exelon’s vision of performance that drives progress depends on each one of us committing to our values – every job, every shift, every day. Whether it’s our companywide commitments to safety, diversity, equity and inclusion, or the communities we serve, we must embrace the highest ethical standards as we pursue our business strategy. This is your entry point to the Exelon Code of Business Conduct. This is no poster on the wall. Our Code is an active and vibrant part of our everyday business: how we act, how we make decisions, how we treat our partners and colleagues, how we relate to the communities where we each live and work. The Code is designed for use – to answer questions you Our success depends on each of us living up to these standards. You have my commitment to do so and I expect the same from each and every one of you. Leadership Message may have about unclear situations, or simply to point you in the right direction. In short, our Exelon Code of Business Conduct outlines what is expected of all of us to meet our obligations, and gives us resources to understand these requirements and live up to them. Please read this Code carefully and, if you have any questions, ask your supervisor or contact Compliance & Ethics at EthicsOffice2@exeloncorp.com. Sincerely, Calvin Butler President and Chief Executive Officer ©Exelon Corporation. 2024. All rights reserved. ii Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Table of Contents 04 Our Responsibilities 06 Our People 05 Following the Code Performance that Drives Progress 01 Our Purpose Special Responsibilities of Managers The Importance of Speaking Up and Seeking Help – Resources – Compliance & Ethics – Ethics Help Line and Web Portal – Reporting Possible Violations No Tolerance for Retaliation Making Ethical Decisions Investigations Certification of Compliance Disciplinary Action Waivers Promoting a Safe and Healthy Workplace Maintaining a Drug-Free and Alcohol-Free Workplace Living Diversity, Equity, and Inclusion Promoting a Respectful Workplace How We Uphold the Code Leadership Message 03 02 iiiCode of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
07 Our Company 10 Conclusion 08 09 Avoiding Conflicts of Interest – Personal Relationships – Personal or Family Financial Interests – Gifts and Business Entertainment – Outside Employment and Other Activities – Corporate Opportunities Creating, Maintaining, and Disclosing Accurate Books and Records Managing Our Records Appropriately Protecting Company Assets – Protecting Our Confidential Information – Using Information and Communications Systems Responsibly Avoiding Insider Trading Competing with Integrity Promoting Fair Purchasing Practices Gathering Business Intelligence Ensuring Appropriate Affiliate Interactions Trading Energy Responsibly Protecting Personal Information Delivering on Quality, Reliability, and Customer Service Government Relations Fighting Bribery and Corruption Protecting the Environment Contributing to Our Communities Participating in Political Activities Communicating Publicly About Exelon Our Customers and Business Partners Our Communities iv Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Powering a cleaner and brighter future for our customers and communities. Our Purpose01 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Our Values We are dedicated to safety We are committed to maintaining the highest standards of safety and reliability for our people, our customers and the communities in which we work. As a fundamental part of our culture and operations, every member of the Exelon team is dedicated to putting safety first. We actively pursue excellence We are driven to excel. Recognizing the value of constant improvement, we reach beyond compliance to advance our processes and develop more efficient energy. In all we do, we passionately exceed the standards of our industry – and those we set for ourselves – creating value for our shareholders, customers and communities. We innovate to better serve our customers We see challenge as an opportunity to exercise our ingenuity and our competitive spirit. We encourage curiosity and exploration to develop better ways of delivering clean energy. We innovate with focus and intent, creating the solutions that matter most for our customers. We act with integrity and are accountable to our communities and the environment We are committed to doing what’s right. A deep connection to the communities we serve compels us to take responsibility for our work, and we actively look for ways to engage and give back. We value the environment and work to reduce our impact with future generations in mind. We succeed as an inclusive and diverse team We foster an inclusive culture of trust, collaboration, and performance. We welcome and respect people with different perspectives, backgrounds, and traits because we know that diverse teams drive powerful outcomes. Our Values ©Exelon Corporation. 2024. All rights reserved. 2 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
To deliver on our vision to provide reliable, clean, and affordable energy, each of us – our system engineers, customer support personnel, data analysts, security staff, administrative personnel, and senior executives – must play a key role in building a brighter, more sustainable future. How we run our business is just as crucial as the results we achieve. Our shared values shape how we work with each other, our customers and our communities. They reflect what is truly important to us as an organization. 02 Performance that Drives Progress They serve as the foundation of our culture and the Exelon Code of Business Conduct (the Code), and help guide behavior and decision making across Exelon. Wherever we operate, each one of us represents Exelon. Each of us is the face of the company in our local communities. Living the values every day and following the Code sets us apart from other companies and ensures performance that drives progress. 3Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Because we actively pursue excellence, each of us must reach beyond compliance. Setting the bar high strengthens our reputation as an industry leader and is the right way to conduct our business. While the Code cannot describe all situations where questions of ethics may arise, it is a resource for making effective, ethical business decisions. It enables us to identify situations that may raise ethical and legal issues. It also helps us understand what Exelon expects of each of us. 03 Following the Code We are all accountable for following the Code. Specifically, the Code applies to: • Employees, officers, and directors of Exelon and its subsidiaries • Third party vendors and contractors must adhere to the Code’s principles described in the Exelon Supplier Code of Conduct 4 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Our Responsibilities04 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
We are all responsible for understanding and following the Code. In addition to its specific provisions, the Code requires that we: • Act with integrity • Have the courage to do the right thing • Foster a culture of safety and commitment to high ethical standards through actions and words • Hold ourselves and others accountable • Are honest • Follow the law, regulatory requirements and Exelon policies when conducting company business • Treat everyone with respect and decency • Use common sense and good judgment • Promptly seek guidance when unsure about the right thing to do • Speak up when we see a problem ©Exelon Corporation. 2024. All rights reserved. 6 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Special Responsibilities of Managers and Supervisors Managers and Supervisors must: • Demonstrate the highest ethical standards and quality in their work and hold others to the same standards • Treat others with respect, while ensuring appropriate accountability • Not bend the rules or pressure others to do so • Understand and communicate laws, regulations, policies, and procedures affecting their areas of operation with support from the Legal Department, Compliance & Ethics, and other company subject matter experts • Encourage team members to speak up without fear of retaliation • Exercise meaningful oversight of employee actions implicating compliance and ethics • Act to prevent problems before they happen, and intervene early as problems emerge • Report problems or possible violations to Compliance & Ethics, HR, or the Legal Department • Promptly seek guidance when they are unsure about the right thing to do While we are all expected to do our part in understanding and following the Code, Exelon managers – from first-line supervisors to senior leaders – have an additional responsibility to lead by example and uphold our values. Oversight of External Business Partners Employees who engage or are responsible for overseeing external business partners must: • Provide effective oversight of vendors and contractor personnel to ensure third parties adhere to applicable contract terms, provisions of the Exelon Supplier Code of Conduct, and company policies and procedures • Take action – up to and including terminating a contract – if a vendor fails to honor its contractual commitments or violates the Supplier Code of Conduct, and report violations to Supply or Compliance & Ethics 7Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
An employee can seek assistance through any of the following options: • Department leadership • Human Resources • Compliance & Ethics • Ethics Help Line & Web Portal • Legal Department • Exelon Audit Services • Corporate and Information Security Services Compliance & Ethics can be reached: • Directly at EthicsOffice2@Exeloncorp.com; or • Through the Exelon Ethics Help Line Website An open culture that encourages us to voice our opinions and concerns will help us capture great ideas and mitigate risks we face. When people speak up, we innovate and improve, which drives progress at Exelon. When people speak up to report improper behavior, we can resolve issues before harm is done or ensure prompt, effective remediation of any harm that has occurred. We must seek advice when we’re unsure about the proper course of action. We also are required to speak up immediately if we see something that violates – or could violate – the law or the Code. If something does not feel right, we must take action to ensure that we maintain our standards and serve our customers well. Resources If policies and procedures do not provide clear direction, we should ask our managers or Compliance & Ethics for guidance. There are many resources available when employees have a question or need additional guidance, or when they need to raise a concern or report a potential violation. Supervisors and managers are the best initial resource. Compliance & Ethics Office Compliance & Ethics is responsible for administering Exelon’s Compliance & Ethics program. It is the primary resource for seeking guidance about the Code and is responsible for ensuring that all reports of potential violations are properly investigated and resolved. The Importance of Speaking Up and Seeking Help 8 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Exelon Help Line and Web Portal The Ethics Help Line and web portal are available 24 hours a day, every day of the year. Both have an anonymous reporting option. The Help Line is a dedicated resource for asking compliance and ethics questions, raising compliance and ethics concerns, and reporting suspected violations of the law or the Code. No attempt is made to identify individuals who choose to remain anonymous. All calls to the Help Line are answered by an independent third-party vendor that offers multilingual service. Caller ID is not used. A report of each call is forwarded to Compliance & Ethics for assessment and appropriate follow-up action. All reporters are issued a case number and a confidential Report Key and password that allows the reporter to follow up on a report, even if the reporter has chosen to remain anonymous. During a follow up, a reporter can access responses from Compliance & Ethics, including requests for additional information that may be required to investigate. The Ethics Help Line (with anonymous reporting option) can be reached: By phone: 1-800-23ETHIC (1-800-233-8442) Via web portal: On your Exelon Connect home page, click the Ethics Help Line tab located in the footer, and follow the prompts, or enter the following address into your browser: https://secure. ethicspoint.com/domain/media/ en/gui/71992/index.html 9Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Ethical, legal, and regulatory lapses can harm many Exelon stakeholders – including employees, customers, investors, and the communities we serve. They can also negatively impact our hard- earned reputation as an energy industry leader. We all have the responsibility to report promptly – and in good faith – any activity that may violate the Code or applicable laws, rules, or regulations. As noted in the Resources section, there are multiple options for reporting possible violations. Note that these options do not restrict employees in the exercise of their rights to report a concern to regulatory and law enforcement authorities including, but not limited to, the Equal Employment Opportunity Commission, Reporting Possible Violations the Federal Energy Regulatory Commission, the Department of Justice, and the Securities and Exchange Commission. All reports will be treated confidentially, to the fullest extent possible under the circumstances. Employees must cooperate completely and honestly in any investigation. When an allegation is substantiated Exelon will take appropriate corrective action, including measures to prevent similar issues from occurring in the future. For more information, see Management Model Procedure LE-AC-204, Reporting Potential Violations of the Code of Business Conduct. 10 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Exelon will not tolerate retaliation against anyone who, in good faith, raises a question or concern about a potential violation of the Code or potential non-compliance with applicable laws or regulations. Retaliation in any form – threats, harassment, intimidation, violence, reassignment, demotion, or firing – has no place in our organization. No Tolerance for Retaliation If any employee believes they have been subjected to retaliation for reporting a potential violation or participating in an investigation, the employee should immediately contact one of the entities listed in the Resources section. Anyone who threatens or engages in any act of retaliation is subject to discipline, up to and including termination. 11Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
How we make decisions says as much about who we are as a company as the decision itself. It is important to make decisions we can be proud of. Making Ethical Decisions Could I defend my action in front of supervisors, fellow employees, the general public and my family? Does it conform to Exelon’s policies and procedures? Would I mind my action being reported in media channels? Is my action legal? Is my action honest in every respect? Will my action comply with the intent and purpose of the Code? Do I feel comfortable taking the action? Do I have all the information I need to make a good decision? If I am not sure, have I sought advice? Asking ourselves the following questions before acting can help ensure we make the best choices for Exelon. 12 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
How We Uphold the Code05 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Exelon takes each report seriously, no matter how the report is received. Our procedures are designed to promptly review and address each issue. The Code requires us to participate completely and honestly in any investigation conducted by the company. Withholding information or being untruthful in an investigation can lead to discipline, up to and including termination. Investigations Certification of Compliance For more information, see Corporate Procedure LE-AC-205, Investigating and Resolving Alleged Violations of the Code of Business Conduct. All non-represented employees, officers, and directors of Exelon and its subsidiaries must complete a certification of compliance questionnaire each year, which is reviewed and followed up on, as appropriate, by Compliance & Ethics. Responses that identify potential violations of the law or Code will be appropriately investigated. ©Exelon Corporation. 2024. All rights reserved. 14 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Disciplinary Action The Code is important to the company and violations will not be tolerated. The Code must be appropriately enforced, regardless of the seniority, role, or location of those involved in misconduct. Exelon will consider matters involving potential criminal conduct for referral to law enforcement. Disciplinary action may be taken against any Exelon employee, officer, or director who: • Authorizes or participates in actions that violate the Code or the law • Fails to report or discourage the reporting of a Code violation • Fails to cooperate with an investigation, conceals information, or otherwise intentionally obstructs an investigation by the company • Retaliates or discriminates in any way against anyone who, in good faith, reports a suspected Code or legal violation or cooperates in an investigation of a suspected violation • Fails to complete or falsely completes a certification of compliance or related questionnaire Discipline may include: • Reprimand or warning • Suspension or other administrative leave • Demotion • Reduction of bonus or incentive award • Required restitution for losses or damages • Termination of employment 15Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
A waiver of any provision of the Code will be made only in exceptional circumstances. Requests for waivers must be submitted to the Chief Compliance & Ethics Officer for review and resolution. Any request for a waiver by any director or executive officer must be submitted to Exelon’s Board of Directors or a Board committee. In addition, any waiver of a provision in the Code for any director or executive officer must be disclosed to shareholders. Waivers 16 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Our People06 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Promoting a Safe and Healthy Workplace We must maintain the highest standards of safety and reliability for our people, our customers, and the public. How We Live Our Values ©Exelon Corporation. 2024. All rights reserved. 18 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
“Safety first” requires us to: • Not engage in any behavior that poses a risk to the safety of our coworkers, customers, or communities • Report to work fit for duty, take responsibility for our own safety, and look out for the safety of others • Know and follow all health and safety laws and regulations, as well as Exelon policies, procedures, and established practices • Eliminate potential hazards and continually improve safety performance in all areas of the company • Not take unnecessary risks on the job • Stop work immediately if it cannot be done safely • Speak up immediately if we: – See a health or safety hazard – Have a safety incident or near-miss – Observe threatening or violent behavior – Observe any other behavior or event that could indicate a safety risk • Not possess any weapons, explosives, or incapacitating devices while on duty, on company property or job sites, or while in company vehicles (unless specifically authorized by company policies) What’s Expected We are dedicated to safety – this is an Exelon value. Our people do complicated work that can be dangerous if not performed in a safe manner. Maintaining the highest standards of safety and reliability helps keep our people, customers, and the public free from harm, our job sites secure, and our productivity levels high. No job is so important and no schedule so urgent that we can’t take the time to plan, perform, and supervise work in a safe and compliant manner. We seek to prevent all accidents and injuries, and Exelon will provide the resources needed to keep our worksites safe and healthy. In turn, we are all accountable for properly using these resources to eliminate health and safety hazards. Our commitment to safety also includes protecting our employees from the risk of violence in the workplace. Acts of violence, threats and physical intimidation are strictly prohibited at any Exelon work location. Why It’s Important 19Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions A co-worker recently challenged our supervisor regarding a work plan for a new project, suggesting we consider a different approach because of concerns for the safety of the employees performing the work. The suggested alternative would lengthen the time to complete the project and the supervisor rejected it without discussion. Should I pursue the issue further? Yes. Our commitment to employee safety must come first. You and your co-workers may be able to get your supervisor to reconsider and discuss the safety issue. If you’re not comfortable having that conversation and the concerns persist, the situation must be reported either up the management chain or to Compliance & Ethics, the Legal Department, or Human Resources. A Q 20 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Maintaining a Drug-Free and Alcohol-Free Workplace How We Live Our Values We require a drug-free and alcohol-free workplace to support Exelon’s commitment to the safety and health of our people and the public. Safety is our priority. To do our work safely and effectively, we must be able to think clearly and react quickly. The health, safety, and performance of everyone at Exelon demands that we are free from any substances – including drugs and alcohol – that could prevent us from doing our jobs properly. Maintaining a drug- and alcohol-free workplace requires that we must: • Not use, possess, or be under the influence of illicit drugs or alcohol while on duty, on company property or job sites, or in company vehicles • Follow all laws and regulations governing the use or possession of alcohol and drugs • Speak up immediately if we observe a colleague who may be under the influence of alcohol or drugs while at work • Use good judgment when alcohol is served at Exelon-sponsored events • Inform Exelon’s Occupational Health and Safety Department if using, for medical reasons, any prescription or non-prescription drug that may impair alertness or judgmentWhy It’s Important What’s Expected For more information, see HR-AC-16, our Drug and Alcohol Policy. 21Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions I recently noticed that a co-worker had alcohol on his breath while at work the last few mornings. Do I need to report it to someone? Yes. We can’t ignore potential violations of our Drug and Alcohol policies. Employees under the influence of drugs or alcohol pose a safety risk to themselves, other employees, and customers. We also want to encourage employees who may be suffering from substance abuse to use the resources provided by the company, such as the Employee Assistance Program (EAP). You must immediately report your observations to your supervisor or, if that is uncomfortable or impractical, to Human Resources or Compliance & Ethics. A Q 22 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Living Diversity, Equity, and Inclusion How We Live Our Values At Exelon, we value our differences in background, skills, perspectives, and thinking. We must make the most of everyone’s contribution to collaborate, innovate and perform to our full potential. Exelon operates in a world that’s extremely diverse. Valuing individual differences in race, color, national origin, ethnicity, gender, sexual orientation, gender identity, disability, religious affiliation, experience, and thought makes us a stronger, more successful organization. When we’re inclusive, we all contribute to solving problems, overcoming challenges, and achieving our vision of performance that drives progress. Diversity, Equity, and Inclusion at Exelon strengthen us because they: • Foster an environment of mutual respect and trust, in which each of us has the opportunity to grow and contribute • Enable us to attract, retain, and develop colleagues who will best serve and represent our customers, shareholders, partners, and communities • Provide different viewpoints that promote innovation, drive powerful outcomes, and ultimately make the company more successful We must: • Welcome and respect people with different perspectives, backgrounds, and traits • Evaluate individuals based on qualifications and demonstrated skills and achievements without regard to personal characteristics, including race, color, national origin, ethnicity, gender, sexual orientation, gender identity, disability, or religious affiliation • Consider a diverse range of candidates in hiring, promotion, and other employment decisions • Promote communication that is open, direct, honest, and respectful For more information, see our Diversity, Equity & Inclusion page on Exelon Connect and Diversity & Inclusion Annual Report. Why It’s Important What’s Expected 23Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions We are looking for a new technician at one of our facilities. One of the applicants is missing a limb. He has a prosthetic and has the right training, but some people on the hiring team have questioned whether his disability will limit his ability to complete his job duties in an effective and timely manner. How should this situation be handled? We succeed as an inclusive and diverse team. Basing a hiring decision in whole or in part on an applicant’s disability may violate the law. An applicant with a disability should not be excluded from consideration based on assumptions or misperceptions. Talent Acquisition, Human Resources, Occupational Health and Safety, and the Legal Department should be consulted so they can work collaboratively with management and the applicant to determine whether the applicant’s disability restricts his ability to perform the essential functions of his job and, if so, whether reasonable accommodations exist that will permit him to perform those essential functions. The fact that a reasonable accommodation may be required should not affect our evaluation of his candidacy. If this candidate can perform all the essential functions of the position with reasonable accommodation, hiring him offers the benefits that a different perspective and experience will bring to the team. A Q Calvin Butler Incorporating diverse perspectives into our thinking leads to greater innovation, increased employee engagement, and better solutions to take advantage of opportunities and overcome challenges. 24 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Promoting a Respectful Workplace How We Live Our Values At Exelon, we thrive by treating each other with respect, fairness, and dignity. Our people have the right to work in an atmosphere free from harassment. A respectful workplace allows us to focus on what’s important: collaborating with each other to provide reliable, clean, and affordable energy. The Code prohibits harassment in connection with any interaction with coworkers or customers or any time we are representing the company in any way. Harassment also violates our values and often the law – and it won’t be tolerated. A respectful workplace requires that we: • Deal with others in a considerate, courteous, and respectful manner For more information, see HR-AC-72, our Policy Against Discrimination, Harassment, and Retaliation, and HR-AC-73, our Policy Against Sexual Harassment. Why It’s Important What’s Expected • Think about how our actions and comments might be received by others before we act or speak • Not make – or tolerate – comments, insults, jokes, or slurs with sexual, racial, gender, or ethnic innuendo • Not engage in conduct, whether verbal or physical conduct that another person would reasonably find threatening or humiliating • Not display or share images that contain stereotypes or insults based on race, color, religion, sex, age, or disability • Provide a work environment free of unwelcome sexual advances and requests for sexual favors, and not engage in any other unwelcome verbal or physical conduct of a sexual nature toward coworkers, customers, or others while representing the company • Report harassment we experience or observe • Not retaliate against anyone who, in good faith, reports potential harassment or other misconduct 25Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions After completing a large project, our team celebrated with a company-sponsored dinner at a local restaurant. After several drinks, one of my co-workers told several sexually suggestive jokes and made a similarly themed comment about one of our female co-workers who was present, but out of earshot. Several other employees looked uncomfortable, but no one said anything. Shortly afterward, I noticed one female co- worker leave the restaurant abruptly. What should I do? You should speak up. If you are comfortable doing so, tell your co-worker that the jokes and comments are unwelcome and inappropriate. Whether you address it directly or not, you must report the incident to your supervisor, HR, and/or Compliance & Ethics. Although the dinner was off company premises, it was a work-related event and Exelon’s expectations regarding values and acceptable behavior apply. Fostering a culture of trust, collaboration, and performance means that no employee should be made to feel uncomfortable, even in a more informal “social” setting with co-workers. A Q 26 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Our Company07 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Avoiding Conflicts of Interest We must make decisions and act in the best interests of Exelon, not allowing our personal interests to get in the way of what’s right for our business, customers, or shareholders. How We Live Our Values ©Exelon Corporation. 2024. All rights reserved. 28 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
To avoid conflicts of interest or the appareance of a conflict you should: • Not participate in any activity, interest, or association that could compromise your individual judgment or prevent you from acting in the best interests of the company • Avoid actions that could cause an uninvolved observer to reasonably question your objectivity • Seek guidance from a manager or the Compliance & Ethics Office whenever there is a question concerning an actual or potential conflict of interest • Promptly disclose all potential conflicts to Compliance & Ethics • Remove yourself from the decision-making process in any situation that might present even the appearance of a conflict of interest What’s Expected Conflict of Interest Quick Test If I take this course of action: 1. Will I feel obligated to someone else? 2. Am I acting inconsistently with Exelon’s interests? 3. Could my independent judgment be compromised? 4. Could an uninvolved observer reasonably question my objectivity? If you answer “yes” to any of these questions, a real or perceived conflict of interest may exist. Immediately seek guidance from a manager or Compliance & Ethics. With every business decision and choice that we make, we have an impact on the performance and reputation of Exelon. Our decisions must be based on the facts and our best judgment, while being mindful of our values and what’s best for the company. Allowing personal interests, relationships, or activities outside of work to interfere with our jobs or our ability to make objective business decisions for the good of Exelon is a conflict of interest. Such conflicts must be avoided because they can harm our effectiveness as well as our reputation for integrity. Even the appearance of a conflict of interest can make others think we are acting improperly. Many conflicts of interest can be avoided or addressed if promptly disclosed and properly managed. This section provides guidance on some of the more common conflicts of interest, but it cannot cover every situation we may face. Why It’s Important 29Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
To avoid conflicts of interest or the appearance of a conflict, we must: • Make decisions objectively, without favoritism and in the best interest of Exelon • Promptly disclose to Compliance & Ethics or Human Resources any personal relationships that create or appear to create a conflict of interest • Not manage any business relationship if the business partner employs someone with whom we have a close personal or family relationship • Recuse ourselves from employment decisions (including interviewing, hiring, promoting, or disciplining) that involve anyone with whom we have a close personal or family relationship • Not supervise, directly or indirectly, anyone with whom we have a close personal or family relationship We must avoid conflicts of interest by: • Ensuring that our own investments and business relationships do not conflict with our obligation to act in the best interests of Exelon • Promptly disclosing to Compliance & Ethics any investments or business or personal relationships that might create, or appear to create, a conflict of interest • Disclosing any material financial interest in any organization that does business, seeks to do business, or competes with Exelon to Compliance & Ethics to determine whether a potential conflict of interest can be appropriately managed What does “material financial interest” mean? “Material financial interest” means having any financial involvement or ownership interest that might influence or reasonably be thought by others to influence an employee’s judgment or action in the conduct of Exelon’s business. You should consult Compliance & Ethics for guidance regarding whether specific financial interests are material. Personal Relationships Personal relationships with family members, close friends, or romantic partners must not impact, or even appear to impact, our judgment and decision making for Exelon. Personal or Family Financial Interests Considerations of personal finances (or those of family and friends) must not impair our ability to make objective decisions on behalf of and in the best interests of the company. This may include investment in, or ownership of, an Exelon competitor, supplier, contractor, or partner. 30 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Gifts and Business Entertainment To maintain integrity in our business relationships, you must not offer or accept a gift, entertainment, or anything of value that is intended to influence a business decision or official action relating to Exelon or might be perceived that way by others. Avoid conflicts of interest in business relationships by recognizing your obligation to: • Not offer or accept any gift of more than modest value • Not accept any monetary gifts, such as cash, gift cards or personal discounts • Ensure that all business entertainment has a legitimate business purpose • Decline lavish or extravagant gifts or offers of entertainment and explain that company policy prohibits accepting them (see examples below) • Decline offers of business entertainment from any third party where significant decisions about the third party are pending (e.g., a vendor is on a Supplier Performance Improvement Plan or engaged in a significant dispute with Exelon or there is a pending business transaction of particular significance to Exelon or the third party) • Obtain prior guidance from Compliance & Ethics if there is any question whether it is appropriate to accept a particular gift or offer of business entertainment. • Accurately account for any gifts or entertainment given to third parties in expense records • Consider the nature of the event and consult Compliance & Ethics before accepting offers of travel or lodging from a third-party • Ensure that any offer or gift of anything of value to a government official or employee complies with Exelon’s Interactions with Public Officials policy, LE-AC-POL8. If there is any question whether a gift, offer of entertainment, or anything else of value may be offered or provided consistent with this policy, seek advice and advance approval from Compliance & Ethics The Right Decisions I have been working with a certain vendor for years. I know the owners and most of their employees pretty well. I am often asked by others at Exelon for input on the vendor’s performance, although I don’t have direct involvement in payment issues or renewal decisions. During the holidays, they usually send me a gift basket of food that I set out for my team to share. This year, the vendor included a $50 gift card, sent to me personally, with a nice note. I am certain the gift card won’t influence my treatment of the vendor and I don’t want to insult them. Can I keep the gift card? No. A gift card for any amount is no different from cash and accepting it sends the wrong message, even if the sender is well-intentioned. All cash and cash equivalents received from third parties must be declined. You should return it
with a polite note explaining that company policy prevents you from accepting. A Q 31Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Here are some examples of generally acceptable gifts and business entertainment, as well as some examples of gifts and entertainment that are generally unacceptable and must be declined or reviewed by management and Compliance & Ethics to determine if the circumstances allow for acceptance: Generally Acceptable Entertainment • Infrequent meals of reasonable value at business-appropriate locations • Providing third parties with occasional meals, entertainment, refreshments or incidental hospitality Gifts • Mementos, advertising novelties and souvenirs, and promotional or logoed items of modest value • Small personal gifts or expressions of gratitude, such as flowers Educational and Training Programs • Participation in routine training and professional development opportunities offered by vendors, such as seminars and panel presentations, that do not involve lavish meals or entertainment Generally Unacceptable Entertainment • Tickets to a playoff game, championship, or other high profile sporting event (for example, the Super Bowl, the Stanley Cup Finals, the World Series, the World Cup, etc.) • Any entertainment offered by a supplier if significant decisions about the supplier are pending and the recipient will play a direct or indirect role in that decision • All-expenses-paid trips sponsored by a supplier • Lavish entertainment or meals at expensive restaurants • Visiting an adult entertainment venue or other questionable locale • Frequent meals and entertainment from a continuing business supplier Gifts • Cash, gift certificates, or cash equivalents • Personal discounts or loans • Lavish or extravagant personal gifts What does "lavish" or "extravagant" mean? Whether a gift or offer of entertainment is "lavish” or “extravagant" is a common- sense determination of reasonableness based on all the circumstances. If you have any question at all about whether it is appropriate to accept a particular gift or offer of entertainment, you should consult Compliance & Ethics. 32 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Outside Employment and Other Activities Exelon encourages our people to lead full and productive lives outside of work. While at work, we must give our best effort every day, not allowing outside jobs or other activities to hinder our contributions to Exelon and our customers. Outside activities – such as community work or serving on the board of a non-profit, or on an educational or residential board – are encouraged as long as they do not interfere with our ability to fulfill our Exelon responsibilities. Corporate Opportunities We must always put Exelon’s interests ahead of our own. Any business opportunities we discover, through our work or the use of company property or information, belong to Exelon and must not be used for our personal benefit. To avoid conflicts of interest we must: • Disclose and obtain prior approval for all outside employment or consulting opportunities (even short-term or hourly consulting engagements) • Ensure that outside activities do not interfere or create conflicts of interest with our Exelon job responsibilities or performance • Obtain approval from the Office of Corporate Governance before serving on any board or advisory board of any for-profit organization • Not conduct outside business, political campaigns or other similar activities while working on company time • Not use Exelon resources to conduct activities unrelated to company business • Not work for a competitor, supplier, or other entity likely to do business with the company To avoid conflicts of interest we must: • Not take for ourselves opportunities discovered through the use of company property, company information, or our position with the company • Not compete against Exelon or assist others in doing so 33Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Creating, Maintaining, and Disclosing Accurate Books and Records We must maintain complete and accurate records to make responsible business decisions and provide truthful and timely information to Exelon shareholders, investors, regulators, and other stakeholders. How We Live Our Values Business and financial records are essential to our business operations. Exelon relies on the integrity and accuracy of these records to make strategic decisions. Similarly, investors, government agencies, regulators, and others rely on the integrity and accuracy of our records and disclosures.. Each of us is responsible for the accuracy of all the records we generate and data we input – from individual timecards to corporate balance sheets to equipment maintenance records. Accurate and transparent record keeping protects our reputation, promotes organizational efficiency and safety, and helps us meet our legal and regulatory obligations. It’s also essential in helping our business better serve our customers. Creating and maintaining accurate books and records and ensuring accurate disclosures requires that we: • Follow generally accepted accounting principles and all procedures and guidelines in our internal control systems • Not keep off-the-books accounts or false or incomplete records Why It’s Important What’s Expected • Not make an entry in any record that misrepresents, conceals, or disguises the true nature of any transaction, event, or condition • Record all business transactions, events, and conditions accurately, completely, and in a timely fashion • Ensure there is clear, complete, fair, and accurate reporting of financial and non financial information pertaining to business transactions • Follow all delegation of authority and segregation of duties requirements established by the company involving the authorization, creation, approval, and reconciliation of transactions • Provide receipts and back-up documentation when required • Not mislead or misinform anyone about our business operations or finances • Immediately report any requests to manipulate accounts, books and records, or financial reports, and any suspected misconduct regarding accounting, internal controls, or auditing matters to Compliance & Ethics, Exelon Audit Services, or the Legal Department • Report to Exelon Audit Services any accounting or internal control deficiencies that could adversely affect Exelon’s ability to accurately record, process, or report financial or operations data 34 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Managing Our Records Appropriately How We Live Our Values We must accurately manage our records to protect Exelon’s proprietary and confidential information and meet our legal and regulatory obligations. Proper records management is essential to the vital flow of information within Exelon. It also reduces risks associated with outdated information and helps us meet our legal obligations and respond appropriately in legal and regulatory proceedings. Why It’s Important Proper records management requires that we: • Maintain, retain, and dispose of business records in accordance with Exelon’s Records Management Policy • Abide by all notices for the retention of documents issued by the Legal Department • Contact Compliance & Ethics or the Legal Department with any questions about what to retain or discard, or for help understanding or complying with any record hold or retention notice What’s Expected For more information see LE-AC-4, our Corporate Policy on Records and Information Management, Retention and Disposition, and LE-AC-401, our Corporate Procedure on Records and Information Management, Retention and Disposition. 35Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Company records can include: • Communications in any form or media • Policies and procedures • Purchase orders and invoices • Contracts • Reports, memos, analyses, maps, schedules, tables, presentations, and financial models • Personnel files • Production reports Company records come in all formats and media, including: • Paper documents, including correspondence, engineering drawings, architectural plans, charts, records, sketches, and maps • Photographs, prints, and electronic media files • Electronic records, including databases, email, chat and text messages and other forms of electronic communication, and documents such as spreadsheets, presentation decks, and written materials • Audio and video recordings, including voice mail • Microfilm, microfiche, aperture cards, and other microform media Note that whether something is a company record is determined by its content, not where and how it is stored. 36 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Protecting Company Assets How We Live Our Values We must protect Exelon’s assets and use them responsibly so we can better serve our customers and thrive in a dynamic industry. Exelon’s assets are essential to running our company efficiently, effectively, and profitably. They are the resources we use to drive progress. While our responsibilities will vary depending on the type of asset and our individual roles within Exelon, one thing remains the same – each of us is responsible for protecting company assets. • Physical assets include anything tangible that we use to conduct our business, from computers, office supplies, and furnishings, to transmission lines, substations, and natural gas mains. The land, buildings, vehicles, and inventory Exelon owns or has interests in are also physical assets. • Information assets include any data relating to Exelon’s business, no matter how it is created, distributed, used, or stored. This includes computer software and data in our files and on our servers. • Intangible assets include Exelon’s ideas, inventions, improvements, intellectual property, designs, copyrights, licenses, trademarks, patents, and trade secrets. This includes our own work product and on-the-job innovations and discoveries. • Financial assets include money and anything that can be converted to money, such as stocks, bonds, loans, and deposits. Why It’s Important To protect Exelon’s assets, we must: • Use them prudently, carefully, and efficiently • Take reasonable steps to protect company assets, ensuring they are not damaged, abused, destroyed, wasted, lost, or stolen • Use company assets only for Exelon business purposes, regardless of condition or value, except for incidental personal use of computers and mobile devices (see page 40) • Not sell, lend, borrow, give away, or dispose of company assets without proper authorization • Promptly report any abuse or misuse • Bring any on-the-job discoveries or innovations related to Exelon’s business to the company’s attention • Not use proprietary information acquired on the job for personal gain or any other purpose not in furtherance of our job duties What’s Expected 37Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Protecting Our Confidential Information Business information is a critical Exelon asset. We must closely protect the company’s confidential information and intellectual property against unauthorized disclosure and misuse, which could limit our growth and threaten our ability to compete in the future. Protecting Exelon’s confidential information requires that we: • Do not post confidential information on any social media sites • Do not work with or discuss confidential information in public areas, such as airplanes, elevators, or restaurants, where your conversations may be overheard or confidential information may be viewed by others • Not leave confidential information where others could access it • Share sensitive information only with authorized co-workers or business partners who have a legitimate need to know For more information, see our Corporate Procedure LE-AC-301, Protecting Exelon Information and related procedures and policies. • Do not divulge confidential information to persons outside of the Exelon business, except where such disclosure is appropriately authorized, legally mandated, or done in accordance with a confidentiality and non-disclosure agreement • Continue to protect Exelon confidential information, including our own work product, even if we leave the company • Protect our customers’ and suppliers’ confidential information as we would protect Exelon’s confidential information, and consistent with any additional legal and contractual requirements. • Immediately report any unauthorized disclosure or loss of confidential information to Corporate Security or Compliance & Ethics 38 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions A peer utility asked for copies of specific Management Model policies and procedures. Can I share them with another company? There is tension between the company’s inclination to share best practices for the benefit of the industry – particularly through industry groups such as EEI, EPRI, or AGA – and our need to control Exelon’s proprietary information. In most situations, the right balance is to not hand over our policies and procedures, but rather to provide the other company’s personnel with a verbal overview. Contact your management team, the Legal Department or the functional area that has governance over specific documents with questions. A Q What are some examples of confidential information? • Business plans, reports, and projections (including estimates or reports of production, reserves, and resources) • Company policies and procedures that are not publicly available • Marketing and sales strategies • Patents, trademarks, and other intellectual property • Inventions, ideas, proprietary information, and trade secrets • Estimates and non-public reports of resources, reserves, exploration results and productivity • Applications, proposals, and contracts • Unpublished financial information • Confidential information belonging to other parties with which we do business, such as prices charged or proposed to Exelon for goods and/or services • Technological developments and designs • Computer software • Customer or supplier lists • Customer information 39Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Using Information and Communications Systems Responsibly Exelon’s information and communications systems are critical to providing reliable, clean, and affordable energy. We all must be prudent and responsible in our use of these systems. Our information and communications equipment and systems include mobile devices, computers, and networks. They are the property of Exelon, as are the contents of communications shared over these systems, such as email, voicemail, social media posts, instant messages, recordings, texts, and any other electronic messages. Incidental personal use of these resources is permitted if it’s reasonable and does not interfere with work responsibilities or expose Exelon to potential liability. What is “acceptable use”? Incidental, infrequent, and reasonable personal use of Exelon mobile devices, computers and related resources is acceptable. Limited personal use of the company’s electronic information assets is permitted if it is not detrimental to the productivity of the employee or co-workers, does not cause liability or additional costs to the company, and is not otherwise prohibited by management. Responsible use of Exelon’s information and communications systems requires that we: • Grant access only to authorized individuals • Do not share or use unauthorized login credentials for accessing company systems and networks • Take precautions to ensure company systems and devices are not compromised by malicious electronic threats, such as viruses and phishing schemes • Acknowledge that there is no expectation of privacy when using company-provided information technology and equipment • Take the same care composing any electronic message that we would when writing a letter on company letterhead • Not use Exelon information, communications systems, or equipment for illegal or unethical activities, such as viewing or sending content that is pornographic, obscene, sexually oriented, harassing, violent, discriminatory, likely to incite hatred or otherwise offensive • Substantive written business communications should be conducted on Exelon networks and communication platforms, not on personal accounts, absent special circumstances For more information regarding acceptable use of Exelon systems, including the company guidelines for text communication, see our Corporate Procedure SY-AC-6, Acceptable Use Policy. 40 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Avoiding Insider Trading How We Live Our Values Exelon supports fair and open markets for buying and selling securities. Insider trading is illegal and distorts financial markets. Insider trading is illegal and damages the trust we have with our investors, the government, and the marketplace. Insider trading is committed when people who have material nonpublic information trade in shares or other securities of a company before the information becomes available to the public. Because of our roles at Exelon, many of us have that kind of “inside information” – information that is not known to the public that might be important to someone considering buying or selling shares in Exelon or another company. Why It’s Important To avoid insider trading, we must: • Not buy, sell, or trade the stock or other securities of Exelon or any other company while we have inside information What’s Expected • Prevent inside information from being disclosed to people outside Exelon. This means: – Keep it secure – whether it’s a physical lock on a file drawer or a password on a laptop or cell phone – Share it only with those within the company who have a legitimate business need to know – Don’t share it with family or friends – Never discuss it in public or on social media • Abstain from making buy or sell recommendations to anyone else while in possession of inside information • Not engage in “short sales” or trading in market options such as puts or calls on Exelon securities • Immediately report to Compliance & Ethics or the Legal Department any inside information that has been mistakenly provided to unauthorized individuals For more information, see our Corporate Procedure LE-AC-202, Insider Trading Compliance. 41Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions I was part of a team that recently completed a very significant transaction. As a result, I had access to communications that indicated company earnings would exceed expectations this quarter. I was planning to make some adjustments to my 401(k) account, including an increase in the percentage of company stock included in my contribution, before I saw the earnings communication. Can I still make that adjustment? No, not until the earnings results become public. Even when information does not actually influence you, trading after the receipt of insider information and prior to that information becoming public is prohibited by law. This might result in criminal charges and civil penalties against you. A Q Examples of inside information include: • Unreleased company financial results and dividends • Detailed business plans or marketing strategies • Anticipated mergers, acquisitions, divestitures or joint ventures • A significant change in corporate strategy • Significant management changes • Important developments in legal proceedings 42 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Our Customers and Business Partners08 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Competing with Integrity At Exelon, we must conduct business honestly, fairly and lawfully. We must compete vigorously for business opportunities, distinguishing ourselves through integrity, superior performance and value. How We Live Our Values ©Exelon Corporation. 2024. All rights reserved. 44 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Healthy competition is good for our customers and the communities we serve. Our commitment to fair competition and responsible third- party sourcing policies and practices helps drive progress and value for our customers, communities and shareholders. We must avoid even the appearance of restraining trade or reducing competition. It’s therefore essential that we follow all applicable laws that govern the way companies compete, wherever we do business. These laws are complex and the consequences of violations can be serious for the individuals and companies involved. In our dealings with competitors, we must avoid even the appearance of restraining trade or reducing competition. Why It’s Important As regulated utilities, Exelon and its operating companies have few direct “competitors.” However, Exelon and its affiliates participate in many competitive markets including but not limited to markets for labor, materials, and services. Exelon also participates in competitive bidding processes, such as bidding for the right to construct certain transmission facilities. When participating in competitive markets, we must: • Comply with antitrust laws and similar laws in What’s Expected any jurisdiction where we conduct business • Ensure Exelon’s business activities do not (and do not appear to) fix prices or costs between competitors, restrict output, divide markets or force a competitor out of business • Protect from improper disclosure confidential information regarding pricing (past, present, or future), terms and conditions of business, contracts and bids, markets and territories, customers, costs, production, and distribution • Not enter into agreements that improperly restrain competition for labor • Not disclose one bidder’s confidential information to another bidder or otherwise undermine the integrity of bidding processes that we run or compete in • Remove ourselves from any conversation that could restrain trade or reduce competition, indicate our reason for doing so, and immediately report the matter to the Legal Department or Compliance & Ethics • Always remain aware of how conversations with peer utilities may be perceived, and avoid the appearance of misconduct When dealing with customers, fair competition requires that we: • Describe what we do and sell honestly and accurately • Not make false claims or spread false or misleading information about our competitors or their services • Not interfere with a customer’s or competitor's existing business contracts 45Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Promoting Fair Purchasing Practices We must select suppliers fairly and objectively to ensure the best value for Exelon while protecting our reputation and supporting the diverse communities we serve. How We Live Our Values Our suppliers often are an extension of Exelon. We count on them to help us deliver the best service for our customers. We work with a diverse group of suppliers and contractors who share our commitment to the highest standards in quality, price, service, reliability, availability, technical excellence, and delivery. Why It’s Important Those involved in purchasing and relationship management with suppliers have the responsibility to: • Make procurement decisions with integrity, based on objective, fair and reasonable criteria • Follow Exelon’s third-party sourcing policies, procedures, and processes and properly document and seek approval for any exceptions What’s Expected • Ensure we have appropriate and properly documented justification for any sole source procurement • Avoid frequent or excessive business entertaining with any supplier • Treat all suppliers professionally, ethically, and fairly – regardless of the value of the transaction or the length of the relationship • Conduct Exelon business in good faith and resolve disputes with suppliers quickly and equitably • Administer contracts to ensure Exelon receives the materials and/or services in full compliance with the contract terms For more information, see, for example, Corporate Policies and Procedures SM-AC-POL1-001, Exelon Spending Policy and Authorization to Contract with Suppliers; SM- AC-400, Materials and Services Procurement Procedure; PC-EU-1035, Contractor Award Procedure; SM-AC-4011, Single Source Procedure; LE-AC-11, Delegation of Authority Policy 46 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Gathering Business Intelligence As we evolve our business, we constantly monitor the competitive landscape and analyze industry trends. This allows us to anticipate and respond to customer demands for clean, affordable energy and the delivery of services. We gather business intelligence properly and legally, and do not solicit or accept other companies’ trade secrets or other proprietary or confidential information. Below is a list that includes some generally acceptable and generally unacceptable sources of competitive intelligence: If there is ever a doubt about how we are gathering business information, or contact the Legal Department or Compliance & Ethics for guidance. Generally Acceptable • Public web sites and social media • Newspapers and trade journals • Public financial filings • Publicly available industry analyst reports • Marketing materials • Third-party market research and analysis • Governmental agency reports Generally Unacceptable • Emails intended for others • Proposals • Price sheets • Process documents • Business plans • Found apparent confidential documents • Non-public due diligence associated with M&A activity and other transactions • Materials governed by a confidentiality agreement 47Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
The Right Decisions I work in project management. A supplier who is working on a current project asked me for some detailed information about a new project that just went out for bid. What should I do? While the supplier’s intent may be innocent, informally providing any information about the new project might provide that firm with an advantage over other bidders. You should not provide any information about the new project, and should direct the supplier to the proper channel for obtaining information (in this case, the formal Request for Proposal information sharing protocols) and advise that they follow the process. Additionally, you should notify your manager, Compliance & Ethics, or the Legal Department that you received this request from the supplier. A Q 48 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Ensuring Appropriate Affiliate Interactions Laws and regulations require separation between utility transmission operations and their affiliates. How We Live Our Values Regulatory authorities governing the energy industry have established affiliate rules to safeguard the fair treatment of all utility rate payers. These rules guard against unfair activities, such as inappropriately sharing information or allocating costs incurred by affiliates to a utility. Where applicable, we must comply with all affiliate regulations, including: • FERC Standards of Conduct • Pennsylvania Code of Conduct • Illinois Affiliate Non-Discrimination Rules • New Jersey Affiliate Standards Rules • Maryland Electric and Gas Companies – Affiliate Regulations • Delaware Code of Conduct Governing Regulated Utility Activities and Competitive Activities • District of Columbia Affiliate Code of Conduct Why It’s Important Appropriate affiliate interactions require that we must: • Properly charge or allocate costs between the regulated and other business functions of utilities and between utilities and their non- utility affiliates, as well as verifying that costs have been correctly allocated • Not provide transmission function information to Exelon marketing function personnel • Not share non-public information about a utility's market, its customers, or its transmission and distribution systems to any third parties on an unduly preferential basis • Not share utility customer information across Exelon utilities, without consent of the customer What’s Expected 49Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Trading Energy Responsibly We conduct and report on our electric power and gas procurement activities in a transparent and ethical manner, complying fully with all applicable laws and regulations. How We Live Our Values The buying and selling of wholesale energy are governed by Federal Energy Regulatory Commission (FERC) rules and orders, while state laws, regulations and utility commission orders govern the provision of retail electric and gas service to customers. Ensuring the integrity of our energy procurement activities protects the company from violating these rules, helps to ensure such activities are conducted fairly by all participants in the marketplace and protects the company against cost disallowances. Why It’s Important Responsible energy procurement practices require that we must: • Satisfy statutory and regulatory obligations to provide standard offer service (SOS), to function as the electric or gas service provider of last resort (POLR) or gas supplier of last resort (SOLR), to meet the needs of our customers What’s Expected • Optimize energy procurements not utilized to meet POLR or SOLR responsibilities to benefit customers and shareholders, where applicable • Responsibly execute regulatorily-approved energy commodity supply programs for the benefit of customers and shareholders • Follow statutory, FERC and state utility commission-sanctioned frameworks, and structures that direct utilities on how to procure energy for retail end use customers • Pursue transparent and reliable electric power supply and gas supply in full compliance with applicable statutory and regulatory mandates • Prepare and maintain accurate documentation of all energy procurement transactions consistent with applicable laws and regulations 50 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
What is considered personal information? Personal information (sometimes known as personally identifiable information or PII) is information that can be used on its own or with other information to identify, contact or locate a single person, or to identify an individual in context. It can include names, Social Security numbers, financial account numbers, credit card numbers with security codes, medical records and other types of information that require protection due to regulations. Protecting Personal Information We must value and preserve the trust that fellow employees, job applicants, customers, business partners, and others place in us by safeguarding their personal information consistent with regulatory requirements. How We Live Our Values To run our business effectively and comply with legal obligations, we gather, store, use and, when appropriate, share personal information, but we must always do so in a secure, confidential manner. Why It’s Important Protecting personal information requires that we must: • Collect, use, process, and access personal information for legitimate business purposes only • Restrict access to those who have both appropriate authorization and a clear business need to know • Not share personal information with anyone (inside or outside the company) who does not have a clear business need for it • Follow the company’s information protection policies and procedures when handling personal information What’s Expected For more information, see Corporate Procedure LE-AC-31, our Corporate Integrated Privacy Program. 51Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Delivering on Quality, Reliability, and Customer Service We satisfy our customers by providing reliable, clean, affordable energy and related products and services. How We Live Our Values Our customers are the heart of our business. Without them, we wouldn’t exist. We must always treat them with courtesy and respect. We want them to value Exelon, and we will earn their loyalty if we understand – and even anticipate – their needs. By collaborating with each other to satisfy our customers’ fundamental needs for high quality, reliable service with integrity, we will continue to earn their business. Why It’s Important To meet or exceed our customers’ expectations, we must: • Listen carefully and quickly respond to customer inquiries and requests • Act professionally, respectfully, and with empathy • Work safely, responsibly, and courteously when on the property of a customer or other third party • Treat customers fairly and consistently • Use fair and honest practices in advertising, marketing, sales, and customer service interactions • Not bypass quality controls or take shortcuts that compromise the quality or safety of our services What’s Expected 52 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Government Relations We must interact with governments at all levels ethically and in full compliance with the law. How We Live Our Values Much of our business is regulated by federal, local, and state governments. Government entities also are important customers. How we interact with government officials is regulated by law and has a significant impact on our credibility, reputation, and success. Why It’s Important Those who interact with government agencies and officials, whether as regulators, customers or otherwise, have the responsibility to: • Comply with all applicable laws, regulations, and company policies governing interactions with public officials. This includes but is not limited to laws and policies relating to lobbying, campaign contributions, gifts and entertainment, ex parte communications, bribery, and interactions with public officials What’s Expected • Promptly report to your Government and External Affairs team or Compliance & Ethics any request, recommendation, or referral from a public official for anything of value, including but not limited to personnel actions, vendor contracts, and directed charitable contributions For more details, employees should visit the Interacting with Public Officials section of Compliance & Ethics page, and third parties should visit this overview page on the Exelon web site. • Ensure compliance with all applicable laws and regulations when a government entity is a customer, including government procurement and contracting regulations • Provide timely, responsive, and accurate information in connection with any regulatory reporting requirements, information requests, or proceedings • Cooperate fully and honestly with any government or law enforcement inquiry or investigation 53Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Fighting Bribery and Corruption Our relationships with our customers, business partners, and government officials depend on trust, transparency, and accountability. We can only succeed by acting with integrity and providing superior value. We must not request, offer, or accept any form of payment or incentive intended to improperly influence a decision. How We Live Our Values 54 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Bribes and kickbacks of any kind are illegal, unethical, and violate our values and the Code. Employees must abide by all applicable anti- bribery and anti-corruption laws, including laws prohibiting offering and receiving bribes, kickbacks, and similar payments. These include laws from all jurisdictions in which the company operates, among them the Foreign Corrupt Practices Act and other federal, state, and foreign anti-corruption laws. Exelon prohibits any employee, officer, director, or third-party agent from providing, authorizing, offering, or promising to provide anything of value, directly or indirectly, with the intent to improperly obtain a commercial advantage with respect to any third party. Anti-bribery and anticorruption laws: • Make it a crime to promise or offer anything of value to any government (federal, state, local, or foreign) official to obtain or retain business, secure an improper advantage, or improperly influence an official decision • Require that publicly held companies, like Exelon, have accounting controls to assure that all transactions are recorded fairly and accurately in our books and records Why It’s Important • Obtain guidance from Compliance & Ethics and/or the relevant government and regulatory affairs team before offering or providing any gift, favor, or entertainment, or What’s Expected For more information, see LE-AC-60, our Anti- Bribery and Anti-Corruption Corporate Policy, and LE-AC-POL8-003, our Policy on Vendors and Suppliers Affiliated With or Referred, Recommended, or Requested by Public Officials. anything of value to any government official or employee of a state-owned entity • Keep accurate and complete records so all payments are properly documented • Ensure company funds are not used for unlawful purposes • Conduct appropriate due diligence of potential lobbyists, agents, political consultants, and other business partners • Do not use or allow a third party to make payments or offers that could be improper 55Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Bribery and kickbacks can also occur in the context of private and commercial relationships. Commercial bribery Occurs in the context of business transactions. It can occur when a company employee, officer, or director solicits or accepts something of value from a third-party (for example, a kickback for steering a contract to a vendor) in exchange for, or to influence, actions on behalf of Exelon. It also can occur when an Exelon employee, director, or third party intermediary provides, authorizes, offers, or promises to provide something of value to a third party with the intent to obtain an improper commercial advantage. 56 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Our Communities09 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
Protecting the Environment At Exelon, our commitment to the environment is integral to meeting our customers’ expectations and reducing our impact on future generations. How We Live Our Values ©Exelon Corporation. 2024. All rights reserved. 58 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Since its formation, Exelon has focused on the business value of reducing our impact on the environment and better meeting the needs of our customers, our employees, and the communities we serve. In all that we do, we seek to exceed the standards of our industry – as well as the standards we set for ourselves. We believe it’s our responsibility to lead the industry in shaping public policy on strategic environmental issues. Our values include the following environmental commitments: • We will actively pursue excellence by reaching beyond compliance to reduce our impact on the environment, address climate change, Why It’s Important improve energy and resource efficiency, and provide our customers with clean, safe, and affordable energy • We will innovate to better serve our customers through smart meters, energy efficiency programs for homes and businesses, transportation electrification options, and other methods of enabling and delivering clean energy • We will act with integrity and be accountable to our communities and the environment We must ensure that our actions are consistent with environmental stewardship and demonstrate environmental leadership through full legal compliance, pollution prevention and continuous improvement. Our commitment to environmental stewardship stretches across the entire energy value chain. We proactively manage our environmental footprint, not only because we care about protecting the environment, but also to improve operational efficiency, maintain our license to operate and enhance our competitive position. As a result, we are able to better serve our customers, create value for our shareholders and employees, and enhance communities. Calvin Butler 59Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
We must: • Meet or exceed all applicable environmental laws, regulations, and voluntary commitments • Use natural resources efficiently to reduce environmental impacts and operating costs • Partner with the communities where we operate to enhance the environment, combat climate change, and build resilience for the future What’s Expected • Report any spills, releases or other environmental hazards or accidents to our supervisors immediately • Provide accurate and complete information on all environmental monitoring or sampling reports to government officials or the company 60 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Contributing to Our Communities The energy we deliver to our customers is important, but so too is the human energy Exelon’s people bring to the communities where we operate. How We Live Our Values Exelon has a strong tradition of community involvement. Through various Exelon programs, our employees are strong ambassadors for corporate giving and community service to improve the quality of life in our communities. Our vision includes the following goals: • Advance our strong tradition of community service by improving the quality of life of the people in the communities we serve and where we work • Strengthen and enrich our communities through corporate giving in four areas – education, environment, neighborhood and workforce development, and arts and culture – and encourage our people to support the organizations that they value Why It’s Important We encourage employees to: • Participate in Exelon’s matching funds program for donations to charitable or civic organizations that enrich our communities • Give time generously to our communities, so long as those activities don’t interfere with job performance Employees must avoid pressuring other employees or suppliers to contribute to charitable or civic organizations or causes. What’s Expected 61Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Participating in Political Activities At Exelon, we are committed to engage constructively with governments where we operate. Likewise, we encourage employees to participate in the political process. How We Live Our Values 62 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Exelon believes that an active, inclusive, and fair political process promotes open government, sound policy decisions, and safe, healthy, and productive communities. We recognize that public policy decisions can greatly impact our customers, our business, and our industry, now and in the future. As individuals, we all have a right to participate in civic activities and the political process. However, we always need to make it clear that our views and actions are our own – not those of Exelon. Why It’s Important Responsible company participation in political activities requires that we: • Follow established procedures for making corporate contributions and conducting activities to support state or local candidates – see LE-AC-23, Corporate Political Contributions Guidelines • Not coerce or pressure others to make contributions to any political candidate, party, advocacy group, political action committee, or political entity, or to support or oppose any political candidate or election. Exelon and its employees, officers, directors, and lobbyists may not solicit employees for political contributions other than voluntary contributions to Exelon-affiliated political action committees • Ensure that any offer or gift of anything of value to a government official or employee complies with Exelon’s Interactions with Public What’s Expected Officials policy, LE-AC-POL8. If there is any question whether a gift, offer of entertainment, or anything else of value may be offered or provided consistent with this policy, we must seek advice and advance approval from Compliance & Ethics • Obtain prior guidance from Compliance & Ethics and/or the relevant government and regulatory affairs team before offering or providing any gift, entertainment, or anything of value to any government official or employee of a state-owned entity. When participating in political activities as individuals, we must: • Make personal political contributions with the understanding that we will not be reimbursed by the company • Understand that only where state law permits, minimal use of company resources – such as phones, computers, email, fax machines, or office supplies – is allowed for personal political purposes (consult the Legal Department for additional guidance on this issue) • Not ask or require other employees, including administrative or support staff, to perform tasks in support of our personal political activities • Make it clear that our personal political views and actions are our own, and not those of the company 63Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Lobbying Exelon, like many other companies, advocates for legislation we believe will enhance value for our customers, communities, employees, and shareholders. Those of us who have contact with legislators, regulators, executive branch officials or their staffs may be involved in lobbying and must take care to comply with the laws applicable to these activities. Only Exelon employees who have been approved to lobby, and contract lobbyists retained and overseen pursuant to the company’s Due Diligence and Monitoring Procedure for Third Parties Engaged in Political Consulting and Lobbying Activities, LE-AC-PCD8-001, may engage in lobbying activities. 64 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Communicating Publicly About Exelon At Exelon, we must speak with one voice when communicating publicly to all audiences, including customers, investors, financial analysts, and the media. How We Live Our Values Our customers, consumers, investors, industry analysts, journalists, public interest groups and others deserve accurate, clear, complete, and consistent communications from Exelon. Because these interactions require careful consideration and an expert understanding of legal, regulatory, financial and media issues, only designated Exelon spokespersons are authorized speak on the company’s behalf. Why It’s Important If you receive an inquiry from outside the company and are not authorized to respond on behalf of the company, you should: • Refer all media-related inquiries to Exelon Corporate Communications • Refer all investor-related inquiries to the Investor Relations Department What’s Expected 65Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Engaging in Social Media Responsibly Social media – networking sites, video/photo sharing, blogs, online discussion forums, and others – are powerful forms of communication that are widely used by consumers, investors and other audiences to share opinions and seek information. If we choose to use social media, we must keep in mind that what we say or share can affect: • Our colleagues in the workplace • Exelon’s reputation with the customers and communities we serve • Exelon’s ability to compete in the marketplace • Exelon’s compliance with laws and regulations Responsible use of social media includes: • Adhering to Exelon’s values in all authorized business communications • Not creating the impression that our personal opinions are those of Exelon • Not identifying ourselves as an Exelon representative without authorization • Ensuring that time and effort spent on social media does not interfere with our job responsibilities • Not disclosing proprietary company information • Not divulging the personal information of others, especially personal data obtained as part of your job duties or our company relationships For more information see CP-AC-72, Corporate Guidelines - Social Media. 66 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024 ©Exelon Corporation. 2024. All rights reserved.
Conclusion10 ©Exelon Corporation. 2024. All rights reserved. Code of Business Conduct Approved by the Exelon Board of Directors: Effective February 15, 2024
At Exelon, our values demand a commitment to ethical behavior that goes beyond the letter of the law, and includes respecting our diverse and inclusive stakeholders, promoting a culture of safety, respecting the environment, and avoiding any business activity that could tarnish the company’s reputation. Living this commitment, living our values, is how we will achieve our vision. ©Exelon Corporation. 2024. All rights reserved. 68 Code of Business ConductApproved by the Exelon Board of Directors: Effective February 15, 2024
Compliance & Ethics Office Directly: EthicsOffice2@Exeloncorp.com Exelon Help Line By phone: 1-800-23ETHIC (1-800-233-8442) Online: https://secure.ethicspoint.com/domain/media/en/ gui/71992/index.html Security Incident? Contact the ESOC for 24-hour assistance at: 1-800-550-6154 ©Exelon Corporation. 2024. All rights reserved. Approved by the Exelon Board of Directors: Effective February 15, 2024
Insider Trading Compliance LE-AC-202 1. PURPOSE 1.1. The purpose of this Insider Trading Policy (the “Policy”) is to promote compliance with applicable securities laws to prevent insider trading violations by Covered Persons (defined below) of Exelon Corporation (including its subsidiaries, hereafter the “Company” or “Exelon”). 2. TERMS AND DEFINITIONS 2.1. Benefit Plan means any Exelon sponsored employee benefit plan or deferred compensation plan, as amended in accordance with their terms, whether tax qualified or not, including, but not limited to, the Exelon Corporation Employee Savings Plan, the ESPP (defined below), and the Exelon Corporation Deferred Compensation Plan. 2.2. Benefit Plan Blackout Period means a specified period of time during which all employee participants of a particular Benefit Plan are not allowed to make any discretionary transactions through some administrative decision. 2.3. Company means Exelon Corporation and its subsidiaries. 2.4. Covered Persons means all directors, officers, employees, trustees, agents or fiduciaries, independent contractors, and consultants of the Company, and their Related Persons. 2.5. ESPP means the Exelon Corporation Employee Stock Purchase Plan. 2.6. Executive Officer means an employee of the Company who has been designated by the Board of Directors of Exelon or one of its Committees of the Board of Directors of Exelon to be an executive officer for purposes of reporting to the SEC. 2.7. Exelon Securities means Exelon common stock (including Exelon stock held in a Benefit Plan) and any debt or equity securities issued by Exelon or any subsidiary. 2.8. Insider Trading is buying or selling securities “on the basis of” Material Non-Public Information (defined below) obtained through employment or other involvement with a company, or by providing MNPI to others outside the company (“tipping”). Buying or selling securities “on the basis of” Material Non-Public Information means that the person trading is aware of the information at the time of purchase or sale (regardless of whether the MNPI is the basis for the trade). 2.9. Material Non-Public Information or MNPI means information which is both “material,” and “non- public.” Information is material if there is a substantial likelihood that, considering all of the surrounding facts and circumstances, a reasonable investor would consider such information important to a decision to buy, sell, or hold a security. Information is deemed to be “non- public” until it has been disseminated by a method that is reasonably designed to provide broad distribution of the information to the
public, usually by means of a press release, earnings call, or SEC filing.
Insider Trading Compliance LE-AC-202 Examples of MNPI may include but are not limited to: information concerning earnings and earnings estimates or targets; significant operational problems; a significant cybersecurity event; dividends and changes to the dividend policy; liquidity and cash flow; proposals or agreements for significant mergers, acquisitions or divestitures; capital market transactions; significant capital investments; significant litigation developments; changes in credit ratings; management changes; and pending significant regulatory actions. 2.10. OCG means the Office of Corporate Governance. 2.11. Related Persons means: (a) your family members who reside with you (including a spouse, partner, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings, and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in securities are directed by you or subject to your influence or control, such as parents or children who consult with you before they trade in securities and, when used in reference to an entity; and (b) any entities that you influence or control, including any corporations, partnerships or trusts. 2.12. SEC means the United States Securities and Exchange Commission. 2.13. Section 16 Insiders means all directors and Executive Officers of Exelon Corporation. 2.14. Short Sale means a sale of stock not then owned by the seller (in effect betting that the stock price will drop and that the seller can later buy at a lower price the shares necessary to complete the sale). 2.15. Special Blackout Period means a blackout period in which Covered Persons have MNPI related to a special project, transaction or business development and will not be permitted to trade in Exelon Securities. 2.16. Tier 1 Persons means vice presidents and certain key managers and staff determined likely to have access to MNPI through (1) routine job duties, or (2) participation in a specialized project, committee, or task force. 2.17. Tier 2 Persons means all Section 16 Insiders, directors of any subsidiary that files reports with the SEC, all Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, and other employees determined to regularly have access to MNPI through (1) routine job duties, or (2) participation in a specialized project, committee, or task force. 2.18. Trading Plan means a pre-determined schedule of one or more trades to be executed under the terms and conditions established in a written document designed to conform to the provisions of SEC Rule 10b5-1. 2.19. Trading Window means a
specified period of time determined by OCG during which Tier 1 and Tier 2 Persons and their Related Persons may execute approved transactions involving Exelon Securities or enter into a Trading Plan. 3. ROLES AND RESPONSIBILITIES 3.1. Personal Responsibility. Each Covered Person is responsible for compliance with this Policy and must not engage in illegal trading and avoid any appearance of improper trading. Legal pre-clearance of trades or the approval of a Trading Plan does not constitute legal advice or insulate a Covered Person from liability under the applicable securities laws. Each individual is responsible for ensuring that each of his or her Related Persons also comply with the Policy.
Insider Trading Compliance LE-AC-202 Before engaging in any transaction, individuals should consider how enforcement authorities, regulators, the media and others might view the transaction in hindsight. 3.2. OCG Responsibility. Questions about whether information may be regarded as MNPI or other questions related to this Policy should be directed to OCG. Additionally, OCG is responsible for establishing and maintaining procedures for: a) Communicating each quarter to Tier 1 and Tier 2 Persons about the restrictions applicable to each group and about the expected opening and closing dates of the Trading Window and announcing any changes to such dates, b) Reviewing, granting, or denying pre-clearance trading requests, c) The review and approval of Trading Plans, d) Determining and periodically updating individuals classified as “Tier 1 Persons” and “Tier 2 Persons,” e) Communicating to applicable individuals if they are subject to a Special Blackout Period, and f) Developing and implementing training plans and/or processes to Tier 1 and Tier 2 persons regarding insider trading and the requirements of this Policy. 4. PROCEDURE 4.1 General Rules Applicable to All Covered Persons 4.1.1 Prohibition Against Insider Trading. Insider trading is a criminal offense and a violation of Company policy, including the Code of Business Conduct. If a Covered Person has MNPI about the Company, he or she may not buy or sell Exelon Securities until the Company has broadly disseminated the MNPI to the public. In the event the Company issues a press release or makes an SEC filing disclosing all of the MNPI known to a Covered Person, the Covered Person may only trade in Exelon Securities beginning on the second full trading day after such release or filing is made public. 4.1.2 Prohibition Against Tipping. A Covered Person must not share MNPI or information proprietary to the Company with Related Persons or anyone without a need to know, including family members, friends, and business associates. If a person receives MNPI from a Covered Person and buys or sell securities on the basis of that information, both the Covered Person and the person who used it may be deemed to have committed illegal insider trading, regardless of whether the Covered Person benefited personally from the other person's trading. 4.1.3 Prohibition Against Short Sales and Put and Call Options. Covered Persons are prohibited from engaging in short sales and the purchase or sale of put and call options on Exelon Securities. 4.1.4 Prohibition Against Hedging and Derivative Transactions. Covered Persons and their Related Persons are
prohibited from engaging in hedging or monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps,
Insider Trading Compliance LE-AC-202 spread bets, contracts for difference, collars and exchange funds, with respect to Exelon Securities. 4.1.5 Prohibition Against the Insider Trading of Securities of Other Companies. Covered Persons are prohibited from trading in the securities of any other company on the basis of MNPI acquired while providing services to, or on behalf of, Exelon. The preceding rules in this Section 4 apply to the securities of other companies where the Covered Person is acting on the basis of MNPI. 4.1.6 Private Brokerage Accounts. All Covered Persons are strongly encouraged to hold Exelon Securities in accounts with Exelon’s equity administrator or in registered book entry accounts with Exelon’s transfer agent, and not in private brokerage accounts. (Additional rules apply to Tier 2 Persons; see Section 4.4.4 below.) 4.1.7 Special Blackout Periods. The Company may establish Special Blackout Periods during which designated Covered Persons will not be permitted to trade in Exelon Securities. OCG will determine the persons subject to Special Blackout Periods and will provide notice to such individuals. Special Blackout Periods may be established in connection with a significant event, including, but not limited to: a) a pending or proposed merger, acquisition or tender offer, b) a significant cybersecurity incident, c) financial or accounting developments, d) significant operational events, e) legal or regulatory developments or proceedings, or f) pending senior management changes. 4.1.8 Prohibition Against Discussing Special Blackout Period. Individuals subject to Special Blackout Periods may not discuss the existence of the Special Blackout Period or the identity of any individuals subject to the Special Blackout Period with any other person not also subject to the Special Blackout Period. 4.2 Benefit Plan Transactions 4.2.1 Benefit Plan Transactions Subject to Policy. Certain discretionary transactions effected through Benefit Plans or other plans are subject to this Policy and should only occur when a Covered Person has no MNPI (and subject to any other applicable restrictions set forth in this Policy). These include: a) Employee Savings Plan (401(k) Plan) – Elections made under the 401(k) plan to: (a) initially participate, or increase or decrease the percentage of periodic contributions allocated to the Company stock fund; (b) make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (d) pre‑pay a plan loan if the pre-payment will result in allocation of loan proceeds to
the Company stock fund.
Insider Trading Compliance LE-AC-202 b) ESPP - An initial election to participate, any changes to your participation amount or type for any enrollment period, and market sales of Exelon Securities acquired under the ESPP or through related dividend reinvestment. c) Automatic Dividend Reinvestment – An initial election to participate in any dividend reinvestment plan, any change to your participation including any market sale of Exelon Securities acquired under the plan, or any voluntary purchases of Exelon Securities resulting from additional contributions made under the plan. d) Equity Awards - Any market sale of equity securities acquired through Company awards. 4.2.2 Benefit Plan Transactions NOT Subject to Policy. Certain Benefit Plan or other Company plan transactions are not subject to this Policy and can occur at any time. These include the following transactions executed on your behalf by Company or other Benefit Plan administrators: a) Employee Savings Plans (401(k) Plans) - Acquisitions of Exelon Securities through one of the Exelon-sponsored 401(k) plans resulting from periodic, ongoing contributions of money pursuant to payroll deduction. b) ESPP – Acquisitions of Exelon Securities through ongoing participation in the ESPP pursuant to and consistent with a prior election to participate. c) Dividend Reinvestment – Exelon Securities acquired through the automatic dividend reinvestment plan pursuant to a prior election to participate. d) Equity Awards - Vesting of company-awarded equity, or the election to exercise tax withholding rights pursuant to which the Company withholds shares equal in value to satisfy tax withholding obligations upon vesting of any equity award. 4.3 Additional Rules Applicable to Tier 1 and Tier 2 Persons 4.3.1 Approved Trading Limited to Trading Windows. Tier 1 and Tier 2 Persons and their Related Persons may only engage in transactions involving Exelon Securities during a Trading Window unless trading is executed pursuant to an approved Trading Plan. Trading Windows generally begin in each calendar quarter at the beginning of the second trading day after the release of earnings for the prior quarter and continue for approximately six weeks unless otherwise specified by OCG. Trading Windows may open later or close earlier than described above at the discretion of OCG for various reasons. 4.3.2 Prohibition Against Holding Exelon Securities in Margin Accounts or Using Exelon Securities as Collateral for a Loan. Tier 1 and Tier 2 Persons and their Related Persons are prohibited from holding Exelon Securities in a margin account or otherwise pledging Exelon Securities as collateral for a loan. 4.4
Additional Rules Applicable to Tier 2 Persons 4.4.1 Prior Approval Required. Tier 2 Persons and their Related Persons are required to obtain approval from OCG prior to any transaction involving any Exelon Securities subject to the exceptions noted in Section 4.4.2. Trading approval is valid for three business days. If a transaction is not completed within that time, the person wishing to trade must contact OCG to obtain new approval. For the avoidance of doubt, if OCG approves a person to trade and the
Insider Trading Compliance LE-AC-202 person obtains MNPI prior to completing the transaction, such person is prohibited from executing such transaction. Examples of transactions for which prior approval is required include, but are not limited to: a) Open market purchases or sales of Exelon Securities, b) Exercising stock options involving Exelon Securities, c) Any Benefit Plan transactions subject to this Policy and listed in Section 4.2.1, d) Transactions or transfers of Exelon Securities between accounts pursuant to which there is a financial benefit, including but not limited to a tax benefit, and e) Gifts of Exelon Securities. 4.4.2 Transactions Exempt from Prior Approval Requirement. The following transactions do not require prior approval: a) Any purchase or sale of Exelon Securities made pursuant to a Trading Plan approved in advance by OCG, b) Any Benefit Plan transactions exempted from this Policy and listed in Section 4.2.2, c) Company matching contributions under the Employee Savings Plan or other Benefit Plans, and d) Any transaction specifically approved in advance in writing by OCG. 4.4.3 Approval Procedures. OCG has established and maintains procedures for the approval of transactions and maintains controls to ensure compliance with this Policy. These procedures are communicated to all Tier 1 and Tier 2 Persons at the beginning of each Trading Window. Approval by OCG of any transaction does not relieve anyone of the responsibility for compliance with federal securities laws and does not constitute legal or investment advice. 4.4.4 Broker Letters. Any Tier 2 Person who holds Exelon Securities in a private brokerage account must enter into an agreement with his/her broker that (a) requires the broker to obtain authorization from OCG before executing any trade and (b) authorizes the broker to provide immediate notice to OCG of all trades in Exelon Securities, and to confirm balances and provide other information as needed to OCG. 4.4.5 Rules Remain in Effect for 90 Days after Separation. Tier 2 Persons (and their Related Persons) remain subject to pre-approval of trading for 90 days after ceasing to serve in such role for any reason. However, in this case, the trading of Exelon Securities need not be limited to the Trading Windows. The 90-day period will be measured from the date the person officially terminates employment. (See Section 4.5.3 for related provision applicable to Section 16 Insiders.) 4.5 Additional Rules Applicable to Section 16 Insiders 4.5.1 Reporting Requirements. All Section 16 Insiders are required by federal securities laws to file reports with the SEC disclosing initial beneficial ownership of, and any
transactions in Exelon Securities. OCG maintains procedures to assist Section 16 Insiders with compliance with this requirement and to facilitate the reporting obligations of these individuals.
Insider Trading Compliance LE-AC-202 4.5.2 Prohibition Against Trading During Benefit Plan Blackout Periods. During a Benefit Plan Blackout Period, Section 16 Insiders may not buy or sell any Exelon common stock in any other account or in any other Benefit Plan. Any profit obtained by a Section 16 Insider from trades during a Benefit Plan Blackout Period must be returned to the Company. OCG maintains procedures for communicating to Section 16 Insiders about any Benefit Plan Blackout Periods. 4.5.3 Rules Remain in Effect for Six Months after Separation. Certain reporting requirements under federal securities laws remain in effect for Section 16 Insiders for six months after the termination of employment or cessation of serving in a Director or an Executive Officer role for any reason, therefore prior approval for trading also remains in effect for six months. However, trading of Exelon Securities need not be limited to Trading Windows. The six-month period will be measured from the date the person officially terminates employment. 4.6 10b5-1 Trading Plans 4.6.1 Trading Through Approved Trading Plans. The Company allows individuals to enter into pre- set Trading Plans designed to meet the requirements of the SEC’s Rule 10b5-1(c) pursuant to which trades in Exelon Securities may be executed. Entry into a Trading Plan may only be made in good faith and during an open Trading Window and so long as the individual establishing the plan has no MNPI and receives pre-clearance from OCG. See Attachment 6.1 for additional details and requirements about the design, approval, and execution of such Trading Plans. 4.6.2 Multiple Plans Prohibited. Individuals may not have multiple Trading Plans in place at any one period of time; however, an individual may enter a new Trading Plan (subject to the same timing and pre-clearance requirements set forth in Section 4.6.1) that will take effect after the expiration or termination of a then-effective Trading Plan. An Individual with a Trading Plan in effect may not buy or sell Exelon Securities outside of that Trading Plan until the expiration or termination of that Trading Plan. 4.6.3 Single Trade Plans. In any twelve-month period, individuals are limited to one Trading Plan that is designed to effect an open market purchase or sale as a single transaction. 4.6.4 Amending Trading Plans. Trading Plans may not be amended; however, individuals may terminate an existing Trading Plan in accordance with Section 4.6.5 and commence a new Trading Plan subject to the same timing and pre-clearance requirements set forth in Section 4.6.1. 4.6.5 Terminating Trading Plans. Individuals may terminate an existing Trading Plan
prior to the execution of the first trade under the Trading Plan by providing notice to OCG and the executing broker prior to termination. * * *
Insider Trading Compliance LE-AC-202 ATTACHMENT DESIGN, APPROVAL AND EXECUTION OF TRADING PLANS DESIGNED TO COMPLY WITH THE PROVISIONS OF SEC RULE 10b5-1 The procedures for establishing a 10b5-1 Trading Plans set forth below are supplementary to the provisions of LE-AC-202, Insider Trading Compliance Policy. Unless otherwise defined in these procedures, defined terms have their meanings as set forth in the Insider Trading Compliance Policy. Plan Provider • Exelon works with an equity administration vendor to make Trading Plans available to Exelon incentive plan participants. • Individuals may use Trading Plans established by other financial advisors/brokers subject to approval by OCG. Establishing a Plan • Individuals wishing to enter a Trading Plan should contact Exelon’s equity administration vendor to discuss the design and parameters of the plan. • Trading Plans may only be entered into in good faith and during an open Trading Window when the individual has no MNPI. • Any Covered Person may adopt a Trading Plan. Trading Plans are strongly encouraged for Section 16 Insiders wishing to engage in long-term trading to meet wealth management or estate planning goals. Plan Requirements and Approval • For Directors and Executive Officers, the first trade under a Trading Plan may not be executed until the later of (a) 90 days after adoption of the Trading Plan or (b) two business days following the filing of the Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted. • For all other Covered Persons, the first trade under a Trading Plan may not be executed until 30 days after adoption of the Trading Plan. • The plan must specify an amount, price, and date of transaction(s). Subject to approval by the broker that will execute the transaction, there is no minimum transaction size. • Trades under a Trading Plan may occur at any time, including outside of an open Trading Window. • The terms of any Trading Plan are generally subject to approval by the broker that will execute the transactions.
Exhibit 21.1
Exelon Corporation (50% and Greater)
12/31/2023
Subsidiary
AMP Funding, L.L.C.
Atlantic City Electric Company
Atlantic City Electric Transition Funding LLC
Atlantic Generation, Inc.
Atlantic Southern Properties, Inc.
ATNP Finance Company
Baltimore Gas and Electric Company
Clean Jobs for Pennsylvania, LLC
ComEd Financing III
Commonwealth Edison Company
Commonwealth Edison Company of Indiana, Inc.
Conectiv Communications, Inc.
Conectiv Energy Supply, Inc.
Conectiv Properties and Investments, Inc.
Conectiv Solutions LLC
Conectiv, LLC
Data Center Enterprise, LLC
Delaware Operating Services Company, LLC
Delmarva Power & Light Company
E&W Development Corporation
EdiSun, LLC
ETT Canada, Inc.
Exelon Business Services Company, LLC
Exelon Energy Delivery Company, LLC
Exelon Enterprises Company, LLC
Exelon Genesis, LLC
Exelon InQB8R, LLC
Exelon Mechanical, LLC
Exelon Microgrid, LLC
Exelon Transmission Company, LLC
Exelorate Enterprises, LLC
Ex-FM, Inc.
Ex-FME, Inc.
ExTel Corporation, LLC
F & M Holdings Company, L.L.C.
Friendly Skies, Inc.
Millennium Account Services, LLC
Northwind Thermal Technologies Canada Inc.
PCI - BT Investing, L.L.C.
PCI Air Management Corporation
PCI Air Management Partners, L.L.C.
PEC Financial Services, LLC
PECO Energy Capital Corp.
PECO Energy Capital Trust III
PECO Energy Capital Trust IV
Jurisdiction
Delaware
New Jersey
Delaware
New Jersey
New Jersey
Delaware
Maryland
Delaware
Delaware
Illinois
Indiana
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware & Virginia
Florida
Delaware
New Brunswick
Delaware
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
New York
Delaware
Delaware
Delaware
Virgin Islands (U.S.)
Delaware
New Brunswick
Delaware
Nevada
Delaware
Pennsylvania
Delaware
Delaware
Delaware
1
PECO Energy Capital, L.P.
PECO Energy Company
PECO Wireless, LLC
Pepco Holdings LLC
PH Holdco LLC
PHI Service Company
Potomac Capital Investment Corporation
Potomac Delaware Leasing Corporation
Potomac Electric Power Company
Potomac Leasing Associates, L.P.
Ramp Investments, L.L.C.
RF HoldCo LLC
RITELine Illinois, LLC
RITELine Transmission Development, LLC
Scherer Holdings 1, LLC
Scherer Holdings 2, LLC
Scherer Holdings 3, LLC
UII, LLC
Wansley Holdings 1, LLC
Wansley Holdings 2, LLC
Exhibit 21.1
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
District of Columbia & Virginia
Delaware
Delaware
Delaware
Illinois
Delaware
Delaware
Delaware
Delaware
Illinois
Delaware
Delaware
2
Commonwealth Edison Company (50% and Greater)
12/31/2023
Subsidiary
Commonwealth Edison Company of Indiana, Inc.
ComEd Financing III
EdiSun, LLC
RITELine Illinois, LLC
Jurisdiction
Indiana
Delaware
Delaware
Illinois
Exhibit 21.2
Exhibit 21.3
PECO Energy Company (50% and Greater)
12/31/2023
Subsidiary
ATNP Finance Company
ExTel Corporation, LLC
PEC Financial Services, LLC
PECO Energy Capital Corp.
PECO Energy Capital Trust III
PECO Energy Capital Trust IV
PECO Energy Capital, L.P.
PECO Wireless, LLC
Jurisdiction
Delaware
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Baltimore Gas and Electric Company (50% and Greater)
12/31/2023
Subsidiary
None
Jurisdiction
Exhibit 21.4
Pepco Holdings LLC (50% and Greater)
12/31/2023
Subsidiary
Atlantic City Electric Company
Atlantic City Electric Transition Funding LLC
Delmarva Power & Light Company
Millennium Account Services, LLC
PHI Service Company
Potomac Electric Power Company
Exhibit 21.5
Jurisdiction
New Jersey
Delaware
Delaware & Virginia
Delaware
Delaware
District of Columbia & Virginia
Potomac Electric Power Company (50% and Greater)
12/31/2023
Subsidiary
None
Jurisdiction
Exhibit 21.6
Delmarva Power & Light Company (50% and Greater)
12/31/2023
Subsidiary
None
Jurisdiction
Exhibit 21.7
Atlantic City Electric Company (50% and Greater)
12/31/2023
Subsidiary
Atlantic City Electric Transition Funding LLC
Jurisdiction
Delaware
Exhibit 21.8
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-266487) and Form S-8 (No. 333-219037, No. 333-189849, No. 333-238720, and No. 333-238747)
of Exelon Corporation of our report dated February 21, 2024 relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which
appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 21, 2024
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.2
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-266487-06) of Commonwealth Edison Company of our report dated February 21, 2024 relating to
the financial statements and financial statement schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 21, 2024
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.3
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-266487-03) of Potomac Electric Power Company of our report dated February 21, 2024 relating to
the financial statements and financial statement schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 21, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Anthony K. Anderson, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf
to sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.1
/s/ ANTHONY K. ANDERSON
Anthony K. Anderson
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Anna RIcho, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.2
/s/ ANNA RICHO
Anna Richo
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr. , do hereby appoint Gayle E. Littleton attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all
things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.3
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, W. Paul Bowers, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.4
/s/ W. PAUL BOWERS
W. Paul Bowers
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Marjorie Rodgers Cheshire, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my
behalf to sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.5
/s/ MARJORIE RODGERS CHESHIRE
Marjorie Rodgers Cheshire
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Matthew Rogers, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.6
/s/ MATTHEW ROGERS
Matthew Rogers
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Linda P. Jojo, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.7
/s/ LINDA P. JOJO
Linda P. Jojo
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Charisse R. Lillie, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.8
/s/ CHARISSE R. LILLIE
Charisse R. Lillie
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, John F. Young, do hereby appoint Calvin G. Butler, Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Exelon Corporation, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.9
/s/ JOHN F. YOUNG
John F. Young
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Brian Segedi, do hereby appoint Calvin G. Butler Jr. and Gayle E. Littleton, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.10
/s/ BRIAN SEGEDI
Brian Segedi
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr. , do hereby appoint Gil C. Quiniones and Glenn Rippie, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.11
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Ricardo Estrada, do hereby appoint Gil C. Quiniones and Glenn Rippie, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.12
/s/ RICARDO ESTRADA
Ricardo Estrada
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Zaldwaynaka Scott, do hereby appoint Gil C. Quiniones and Glenn Rippie, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.13
/s/ ZALDWAYNAKA SCOTT
Zaldwaynaka Scott
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Smita Shah, do hereby appoint Gil C. Quiniones and Glenn Rippie, or either of them, attorney for me and in my name and on my behalf to sign the annual
Securities and Exchange Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.14
/s/ SMITA SHAH
Smita Shah
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Gil C. Quiniones, do hereby appoint Glenn Rippie attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Commonwealth Edison Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.15
/s/ GIL C. QUINIONES
Gil C. Quiniones
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Nicholas Bertram, do hereby appoint Michael A. Innocenzo and Anthony E. Gay, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.16
/s/ NICHOLAS BERTRAM
Nicholas Bertram
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr., do hereby appoint Michael A. Innocenzo and Anthony E. Gay, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.17
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, John S. Grady, do hereby appoint Michael A. Innocenzo and Anthony E. Gay, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.18
/s/ JOHN S. GRADY
John S. Grady
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Michael A. Innocenzo, do hereby appoint Anthony E. Gay or either of them, attorney for me and in my name and on my behalf to sign the annual
Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.19
/s/ MICHAEL A. INNOCENZO
Michael A. Innocenzo
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Sharmain Matlock-Turner, do hereby appoint Michael A. Innocenzo or Anthony E. Gay attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.20
/s/ SHARMAIN MATLOCK-TURNER
Sharmain Matlock-Turner
DATE: January 24, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Michael Nutter, do hereby appoint Michael A. Innocenzo and Anthony E. Gay, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.21
/s/ MICHAEL NUTTER
Michael Nutter
DATE: January 24, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Michelle Hong, do hereby appoint Michael A. Innocenzo and Anthony E. Gay, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of PECO Energy Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.22
/s/ MICHELLE HONG
Michelle Hong
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr., do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.23
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, James R. Curtiss, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.24
/s/ JAMES R. CURTISS
James R. Curtiss
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Carim V. Khouzami, do hereby appoint David Ralph attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.25
/s/ CARIM V. KHOUZAMI
Carim V. Khouzami
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Keith Lee, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign the annual
Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.26
/s/ KEITH LEE
Keith Lee
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Rachel Garbow Monroe, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to
sign the annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and
Exchange Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.27
/s/ RACHEL GARBOW MONROE
Rachel Garbow Monroe
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Byron Marchant, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.28
/s/ BYRON MARCHANT
Byron Marchant
DATE: February 6, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Tim Regan, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.29
/s/ TIM REGAN
Tim Regan
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Amy Seto, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign the annual
Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.30
/s/ AMY SETO
Amy Seto
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Maria Harris Tildon, do hereby appoint Carim V. Khouzami and David Ralph, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Baltimore Gas & Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.31
/s/ MARIA HARRIS TILDON
Maria Harris Tildon
DATE: January 31, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Antoine Allen, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.32
/s/ ANTOINE ALLEN
Antoine Allen
DATE: February 5, 2024
KNOW ALL MEN BY THESE PRESENTS that I, J. Tyler Anthony, do hereby appoint Anne Bancroft attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and perform all
things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.33
/s/ J. TYLER ANTHONY
J. Tyler Anthony
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr. , do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.34
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Debra P. DiLorenzo, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission,
and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.35
/s/ DEBRA P. DILORENZO
Debra P. DiLorenzo
DATE: February 5, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Benjamin Wu, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.36
/s/ BENJAMIN WU
Benjamin Wu
DATE: February 5, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Linda W. Cropp, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.37
/s/ LINDA W. CROPP
Linda W. Cropp
DATE: February 5, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Gayle Littleton, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Pepco Holdings LLC, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and
generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.38
/s/ GAYLE LITTLETON
Gayle Littleton
DATE: February 5, 2024
KNOW ALL MEN BY THESE PRESENTS that I, J. Tyler Anthony, do hereby appoint Anne Bancroft attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.39
/s/ J. TYLER ANTHONY
J. Tyler Anthony
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Phillip S. Barnett, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.40
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr. , do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.41
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Rodney Oddoye, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.42
/s/ RODNEY ODDOYE
Rodney Oddoye
DATE: February 9, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Valencia McClure, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.43
/s/ VALENCIA MCCLURE
Valencia McClure
DATE: February 12, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Tamla Olivier, do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign the
annual Securities and Exchange Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.44
/s/ TAMLA OLIVIER
Tamla Olivier
DATE: February 9, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Anne Bancroft, do hereby appoint J. Tyler Anthony attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Potomac Electric Power Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.45
/s/ ANNE BANCROFT
Anne Bancroft
DATE: February 9, 2024
KNOW ALL MEN BY THESE PRESENTS that I, J. Tyler Anthony, do hereby appoint Anne Bancroft attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Delmarva Power & Light Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.46
/s/ J. TYLER ANTHONY
J. Tyler Anthony
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, Calvin G. Butler, Jr. , do hereby appoint J. Tyler Anthony and Anne Bancroft, or either of them, attorney for me and in my name and on my behalf to sign
the annual Securities and Exchange Commission report on Form 10-K for 2023 of Delmarva Power & Light Company, together with any amendments thereto, to be filed with the Securities and Exchange
Commission, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.47
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
DATE: February 20, 2024
KNOW ALL MEN BY THESE PRESENTS that I, J. Tyler Anthony, do hereby appoint Anne Bancroft attorney for me and in my name and on my behalf to sign the annual Securities and Exchange
Commission report on Form 10-K for 2023 of Atlantic City Electric Company, together with any amendments thereto, to be filed with the Securities and Exchange Commission, and generally to do and
perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present.
POWER OF ATTORNEY
Exhibit 24.48
/s/ J. TYLER ANTHONY
J. Tyler Anthony
DATE: February 20, 2024
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.1
I, Calvin G. Butler, Jr., certify that:
I have reviewed this annual report on Form 10-K of Exelon Corporation;
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ CALVIN G. BUTLER, JR.
President and Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.2
I, Jeanne M. Jones, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Exelon Corporation;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ JEANNE M. JONES
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.3
I, Gil C. Quiniones, certify that:
I have reviewed this annual report on Form 10-K of Commonwealth Edison Company;
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ GIL C. QUINIONES
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.4
I, Joshua S. Levin, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Commonwealth Edison Company;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ JOSHUA S. LEVIN
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.5
I, Michael A. Innocenzo, certify that:
I have reviewed this annual report on Form 10-K of PECO Energy Company;
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ MICHAEL A. INNOCENZO
President, Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.6
I, Marissa Humphrey, certify that:
1.
I have reviewed this annual report on Form 10-K of PECO Energy Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ MARISSA HUMPHREY
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.7
I, Carim V. Khouzami, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Baltimore Gas and Electric Company;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ CARIM V. KHOUZAMI
President and Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.8
I, David M. Vahos, certify that:
1.
I have reviewed this annual report on Form 10-K of Baltimore Gas and Electric Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ DAVID M. VAHOS
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.9
I, J. Tyler Anthony, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Pepco Holdings LLC;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
President, Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.10
I, Phillip S. Barnett, certify that:
1.
I have reviewed this annual report on Form 10-K of Pepco Holdings LLC;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.11
I, J. Tyler Anthony, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Potomac Electric Power Company;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
President, Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.12
I, Phillip S. Barnett, certify that:
1.
I have reviewed this annual report on Form 10-K of Potomac Electric Power Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.13
I, J. Tyler Anthony, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Delmarva Power & Light Company;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
President, Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.14
I, Phillip S. Barnett, certify that:
I have reviewed this annual report on Form 10-K of Delmarva Power & Light Company;
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.15
I, J. Tyler Anthony, certify that:
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
I have reviewed this annual report on Form 10-K of Atlantic City Electric Company;
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
President, Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Exhibit 31.16
I, Phillip S. Barnett, certify that:
I have reviewed this annual report on Form 10-K of Atlantic City Electric Company;
1.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.1
The undersigned officer hereby certifies, as to the Report on Form 10-K of Exelon Corporation for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
Exelon Corporation.
Date: February 21, 2024
/s/ CALVIN G. BUTLER, JR.
Calvin G. Butler, Jr.
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.2
The undersigned officer hereby certifies, as to the Report on Form 10-K of Exelon Corporation for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
Exelon Corporation.
Date: February 21, 2024
/s/ JEANNE M. JONES
Jeanne M. Jones
Executive Vice President and Chief Financial Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.3
The undersigned officer hereby certifies, as to the Report on Form 10-K of Commonwealth Edison Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Commonwealth Edison Company.
Date: February 21, 2024
/s/ GIL C. QUINIONES
Gil C. Quiniones
Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.4
The undersigned officer hereby certifies, as to the Report on Form 10-K of Commonwealth Edison Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Commonwealth Edison Company.
Date: February 21, 2024
/s/ JOSHUA S. LEVIN
Joshua S. Levin
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.5
The undersigned officer hereby certifies, as to the Report on Form 10-K of PECO Energy Company for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
PECO Energy Company.
Date: February 21, 2024
/s/ MICHAEL A. INNOCENZO
Michael A. Innocenzo
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.6
The undersigned officer hereby certifies, as to the Report on Form 10-K of PECO Energy Company for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
PECO Energy Company.
Date: February 21, 2024
/s/ MARISSA HUMPHREY
Marissa Humphrey
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.7
The undersigned officer hereby certifies, as to the Report on Form 10-K of Baltimore Gas and Electric Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Baltimore Gas and Electric Company.
Date: February 21, 2024
/s/ CARIM V. KHOUZAMI
Carim V. Khouzami
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.8
The undersigned officer hereby certifies, as to the Report on Form 10-K of Baltimore Gas and Electric Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Baltimore Gas and Electric Company.
Date: February 21, 2024
/s/ DAVID M. VAHOS
David M. Vahos
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.9
The undersigned officer hereby certifies, as to the Report on Form 10-K of Pepco Holdings LLC for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
Pepco Holdings LLC.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.10
The undersigned officer hereby certifies, as to the Report on Form 10-K of Pepco Holdings LLC for the year ended December 31, 2023, that (i) the report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of
Pepco Holdings LLC.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.11
The undersigned officer hereby certifies, as to the Report on Form 10-K of Potomac Electric Power Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Potomac Electric Power Company.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.12
The undersigned officer hereby certifies, as to the Report on Form 10-K of Potomac Electric Power Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Potomac Electric Power Company.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.13
The undersigned officer hereby certifies, as to the Report on Form 10-K of Delmarva Power & Light Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Delmarva Power & Light Company.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.14
The undersigned officer hereby certifies, as to the Report on Form 10-K of Delmarva Power & Light Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Delmarva Power & Light Company.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
Senior Vice President, Chief Financial Officer, and Treasurer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.15
The undersigned officer hereby certifies, as to the Report on Form 10-K of Atlantic City Electric Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Atlantic City Electric Company.
Date: February 21, 2024
/s/ J. TYLER ANTHONY
J. Tyler Anthony
President and Chief Executive Officer
Certificate Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code
Exhibit 32.16
The undersigned officer hereby certifies, as to the Report on Form 10-K of Atlantic City Electric Company for the year ended December 31, 2023, that (i) the report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of Atlantic City Electric Company.
Date: February 21, 2024
/s/ PHILLIP S. BARNETT
Phillip S. Barnett
Senior Vice President, Chief Financial Officer, and Treasurer
1 Exelon Corporation FINANCIAL RESTATEMENT COMPENSATION RECOUPMENT POLICY Approved July 25, 2023 The Board of Directors (the “Board”) of Exelon Corporation (the “Company”) has adopted this Financial Restatement Compensation Recoupment Policy (the “Policy”). This Policy provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under U.S. federal securities laws in accordance with the terms and conditions set forth herein. This Policy is intended to comply with the requirements of Section 10D of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 5608 of the Nasdaq Listing Rules. 1. Definitions. For the purposes of this Policy, the following terms shall have the meanings set forth below. a) “Committee” means the Talent Management and Compensation Committee of the Board or any successor committee thereof. b) “Covered Compensation” means any Incentive-based Compensation “received” by a Covered Executive during the applicable Recoupment Period; provided that: (i) such Covered Compensation was received by such Covered Executive (A) after the Effective Date, (B) after they commenced service as an Executive Officer and (C) while the Company had a class of securities publicly listed on a United States national securities exchange; and (ii) such Covered Executive served as an Executive Officer at any time during the performance period applicable to such Incentive-based Compensation. For purposes of this Policy, Incentive-based Compensation is “received” by a Covered Executive during the fiscal period in which the Financial Reporting Measure applicable to such Incentive-based Compensation (or portion thereof) is attained, even if the payment or grant of such Incentive-based Compensation is made thereafter. c) “Covered Executive” means any current or former Executive Officer. d) “Effective Date” means December 1, 2023. e) “Executive Officer” means those officers designated by the Committee as Executive Officers who are required to file forms with the SEC pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended. f) “Financial Reporting Measure” means any (i) measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, (ii) stock price measure or (iii) total shareholder return measure (and any measures that are derived wholly or in part from any measure referenced in clause (i), (ii) or (iii) above). For the avoidance of doubt, any such
measure does not need to be presented within the Company’s financial statements or included in a filing with the U.S. Securities and Exchange Commission to constitute a Financial Reporting Measure.
2 g) “Financial Restatement” means a restatement of the Company’s financial statements due to the Company’s material noncompliance with any financial reporting requirement under U.S. federal securities laws that is required in order to correct: (i) an error in previously issued financial statements that is material to the previously issued financial statements; or (ii) an error that would result in a material misstatement if (A) the error were corrected in the current period or (B) left uncorrected in the current period. For purposes of this Policy, a Financial Restatement shall not be deemed to occur in the event of a revision of the Company’s financial statements due to an out-of-period adjustment (i.e., when the error is immaterial to the previously issued financial statements and the correction of the error is also immaterial to the current period) or a retrospective (1) application of a change in accounting principles; (2) revision to reportable segment information due to a change in the structure of the Company’s internal organization; (3) reclassification due to a discontinued operation; (4) application of a change in reporting entity, such as from a reorganization of entities under common control; or (5) revision for stock splits, reverse stock splits, stock dividends or other changes in capital structure. h) “Incentive-based Compensation” means any compensation (including, for the avoidance of doubt, any cash or equity or equity-based compensation, whether deferred or current) that is granted, earned and/or vested based wholly or in part upon the achievement of a Financial Reporting Measure. For purposes of this Policy, “Incentive-based Compensation” shall also be deemed to include any amounts which were determined based on (or were otherwise calculated by reference to) Incentive-based Compensation as defined in the preceding sentence, including, without limitation, any amounts under any long-term disability, life insurance or supplemental retirement or severance plan or agreement or any notional account that is based on Incentive-based Compensation, as well as any earnings accrued thereon. i) “Nasdaq” means the NASDAQ Global Select Market, or any successor thereof. j) “Recoupment Period” means the three fiscal years completed immediately preceding the date of any applicable Recoupment Trigger Date. Notwithstanding the foregoing, the Recoupment Period additionally includes any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years, provided that a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises
a period of nine (9) to twelve (12) months would be deemed a completed fiscal year. k) “Recoupment Trigger Date” means the earlier of (i) the date that the Board (or a committee thereof or the officer(s) of the Company authorized to take such action if Board action is not required) concludes, or reasonably should have concluded, that the Company is required to prepare a Financial Restatement, and (ii) the date on which a court, regulator or other legally authorized body directs the Company to prepare a Financial Restatement.
3 2. Recoupment of Erroneously Awarded Compensation. a) In the event of a Financial Restatement, if the amount of any Covered Compensation received by a Covered Executive (the “Awarded Compensation”) exceeds the amount of such Covered Compensation that otherwise would have been received by such Covered Executive if calculated based on the Financial Restatement (the “Adjusted Compensation”), the Company shall reasonably promptly recover from such Covered Executive an amount equal to the excess of the Awarded Compensation over the Adjusted Compensation, each calculated on a pre-tax basis (such excess amount, the “Erroneously Awarded Compensation”). b) If (i) the Financial Reporting Measure applicable to the relevant Covered Compensation is stock price or total shareholder return (or any measure derived wholly or in part from either of such measures) and (ii) the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the Financial Restatement, then the amount of Erroneously Awarded Compensation shall be determined (on a pre-tax basis) based on the Company’s reasonable estimate of the effect of the Financial Restatement on the Company’s stock price or total shareholder return (or the derivative measure thereof) upon which such Covered Compensation was received. c) For the avoidance of doubt, the Company’s obligation to recover Erroneously Awarded Compensation is not dependent on (i) if or when the restated financial statements are filed or (ii) any fault of any Covered Executive for the accounting errors or other actions leading to a Financial Restatement. d) Notwithstanding anything to the contrary in Sections 2a) through c) hereof, the Company shall not be required to recover any Erroneously Awarded Compensation if both (x) the conditions set forth in either of the following clauses (i) or (ii) are satisfied and (y) the Committee (or a majority of the independent directors serving on the Board) has determined that recovery of the Erroneously Awarded Compensation would be impracticable: (i) the direct expense paid to a third party to assist in enforcing the recovery of the Erroneously Awarded Compensation under this Policy would exceed the amount of such Erroneously Awarded Compensation to be recovered; provided that, before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation pursuant to this Section 2d), the Company shall have first made a reasonable attempt to recover such Erroneously Awarded Compensation, document such reasonable attempt(s) to make such recovery and provide that documentation to the
Nasdaq; (ii) recovery of the Erroneously Awarded Compensation would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Sections 401(a)(13) or 411(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). e) The Company shall not indemnify any Covered Executive, directly or indirectly, for any losses that such Covered Executive may incur in connection with the recovery of Erroneously Awarded Compensation pursuant to this Policy, including through the payment of insurance premiums or gross-up payments. f) The Committee shall determine, in its sole discretion, the manner and timing in which any Erroneously Awarded Compensation shall be recovered from a Covered Executive in accordance with applicable law, including, without limitation, by (i) requiring reimbursement of Covered Compensation previously paid in
4 cash; (ii) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity or equity-based awards; (iii) offsetting the Erroneously Awarded Compensation amount from any compensation otherwise owed by the Company or any of its affiliates to the Covered Executive; (iv) cancelling outstanding vested or unvested equity or equity-based awards; and/or (v) taking any other remedial and recovery action permitted by applicable law. For the avoidance of doubt, except as set forth in Section 2(d), in no event may the Company accept an amount that is less than the amount of Erroneously Awarded Compensation; provided that, to the extent necessary to avoid any adverse tax consequences to the Covered Executive pursuant to Section 409A of the Code, any offsets against amounts under any nonqualified deferred compensation plans (as defined under Section 409A of the Code) shall be made in compliance with Section 409A of the Code. 3. Administration. This Policy shall be administered by the Committee. All decisions of the Committee shall be final, conclusive, and binding upon the Company and the Covered Executives, their beneficiaries, executors, administrators, and any other legal representative. The Committee shall have full power and authority to (i) administer and interpret this Policy; (ii) correct any defect, supply any omission and reconcile any inconsistency in this Policy; and (iii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of this Policy and to comply with applicable law (including Section 10D of the Exchange Act) and applicable stock market or exchange rules and regulations. Notwithstanding anything to the contrary contained herein, to the extent permitted by Section 10D of the Exchange Act and Section 5608 of the Nasdaq Listing Rules, the Board may, in its sole discretion, at any time and from time to time, administer this Policy in the same manner as the Committee. 4. Amendment/Termination. Subject to Section 10D of the Exchange Act and Section 5608 of the Nasdaq Listing Rules, this Policy may be amended or terminated by the Committee at any time. To the extent that any applicable law, or stock market or exchange rules or regulations require recovery of Erroneously Awarded Compensation in circumstances in addition to those specified herein, nothing in this Policy shall be deemed to limit or restrict the right or obligation of the Company to recover Erroneously Awarded Compensation to the fullest extent required by such applicable law, stock market or exchange rules and regulations. Unless otherwise
required by applicable law, this Policy shall no longer be effective from and after the date that the Company no longer has a class of securities publicly listed on a United States national securities exchange. 5. Interpretation. Notwithstanding anything to the contrary herein, this Policy is intended to comply with the requirements of Section 10D of the Exchange Act and Section 5608 of the Nasdaq Listing Rules (and any applicable regulations, administrative interpretations or stock market or exchange rules and regulations adopted in connection therewith). The provisions of this Policy shall be interpreted in a manner that satisfies such requirements and this Policy shall be operated accordingly. If any provision of this Policy would otherwise frustrate or conflict with this intent, the provision shall be interpreted and deemed amended so as to avoid such conflict. 6. Other Compensation Clawback/Recoupment Rights. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies, rights or requirements with respect to the clawback or recoupment of any compensation that may be available to the Company pursuant to the terms of any other recoupment or clawback policy of the Company (or any of its affiliates) that may be in effect from time to time, any provisions in any employment agreement, offer letter, equity plan, equity award agreement or similar plan or agreement, and any other legal remedies available to the Company, as well as applicable law, stock market or exchange rules, listing standards or regulations; provided, however, that any amounts recouped or clawed back under any other policy that would be recoupable under this Policy shall count toward any required clawback or recoupment under this Policy and vice versa.
5 7. Exempt Compensation. Notwithstanding anything to the contrary herein, the Company has no obligation to seek recoupment of amounts paid to a Covered Executive which are granted, vested, or earned based solely upon the occurrence or non-occurrence of nonfinancial events. Such exempt compensation includes, without limitation, base salary, time-vesting awards, compensation awarded on the basis of the achievement of metrics that are not Financial Reporting Measures or compensation awarded solely at the discretion of the Committee or the Board, provided that such amounts are in no way contingent on, and were not in any way granted on the basis of, the achievement of any Financial Reporting Measure performance goal. 8. Miscellaneous. a) Any applicable award agreement or other document setting forth the terms and conditions of any compensation covered by this Policy shall be deemed to include the restrictions imposed herein and incorporate this Policy by reference and, in the event of any inconsistency, the terms of this Policy will govern. For the avoidance of doubt, this Policy applies to all compensation that is received on or after the Effective Date, regardless of the date on which the award agreement or other document setting forth the terms and conditions of the Covered Executive’s compensation became effective, including, without limitation, compensation received under the Exelon Corporation 2020 Long-Term Incentive Plan, the 2023 Exelon Corporation Annual Incentive Program, and any successor plan to each of the foregoing. b) This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators, or other legal representatives. c) All issues concerning the construction, validity, enforcement and interpretation of this Policy and all related documents, including, without limitation, any employment agreement, offer letter, equity award agreement or similar agreement, shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania. d) The Covered Executives, their beneficiaries, executors, administrators and any other legal representative and the Company shall initially attempt to resolve all claims, disputes, or controversies (“Dispute”) arising under, out of or in connection with this Policy by conducting good faith negotiations amongst themselves.
Any Party may give the other Party written notice of any Dispute, and if the matter has not been resolved within thirty (30) days from notice of the Dispute, either Party may initiate arbitration by filing a demand with Judicial Arbitration and Mediation Services, Inc. (“JAMS”), as set forth below. To ensure the timely and economical resolution of disputes that arise in connection with this Policy, any and all disputes, claims or causes of action arising from or relating to the enforcement, performance or interpretation of this Policy shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in the location of the principal place of business of the Company Affiliate that employs the Covered Executive, and conducted by JAMS under its applicable rules. To the fullest extent permitted by law, the Covered Executives, their beneficiaries, executors, administrators and any other legal representative and the Company, shall waive (and shall hereby be deemed to have waived) (1) the right to resolve any such dispute through a trial by jury or judge or administrative proceeding; and (2) any objection to arbitration taking place in the location provided for above. The arbitrator shall: (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would
6 otherwise be permitted by law; and (ii) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that any party would be entitled to seek in a court of law. The award rendered by the arbitrator shall be final and binding on the parties and may be entered and enforced in any court having jurisdiction. Except as may be required by law (including without limitation Securities and Exchange Act regulations), to enforce the terms of any award, or to comply with the listing rules of any exchange on which the Company’s stock is listed, neither a party nor the arbitrator(s) may disclose the existence, content, or results of any arbitration without the prior written consent of both parties. Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or any injunctive relief in any court of competent jurisdiction to preserve its ability to recover in arbitration any Erroneously Awarded Compensation or otherwise to preserve its right to any other available relief in arbitration. Such restraining order or injunction may be granted without the necessity of the Company’s posting any bond, except to the extent otherwise required by applicable law. e) If any provision of this Policy is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by applicable law and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law.