subsidiary, PHISCO, a wholly owned subsidiary of PHI,which provides a variety of support services at cost, including legal, finance,accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies. The costs of BSC and its operating subsidiaries. These servicesPHISCO are directly charged or allocated pursuant to service agreements among PHISCOthe applicable subsidiaries. The results of Exelon’s corporate operations are presented as

ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs in markets regulated by FERC.

Generation and EDF entered into a Put Option Agreement on April 1, 2014, pursuant to which EDF has the option, exercisable beginning on January 1, 2016 and thereafter until June 30, 2022, to sell its 49.99% interest in CENG to Generation for a fair market value price determined by agreement of the parties, or absent agreement, a third-party arbitration process. The appraisers determining fair market value of EDF’s 49.99% interest in CENG under the Put Option Agreement are instructed to take into account all rights and obligations under the CENG Operating Agreement, including Generation’s rights with respect to any unpaid aggregate preferred distributions and the related return, and the value of Generation’s rights to other distributions. In addition, under limited circumstances, the period for exercise of the put option may be extended for 18 months. In order to exercise its option, EDF must give 60-days advance written notice to Generation stating that it is exercising its option. To date, EDF has not given notice to Generation that it is exercising its option.

On November 1, 2014, Generation acquired the competitive retail electric and natural gas business activities of Integrys Energy Group, Inc. through the purchase of all of the stock of itsindirect wholly owned subsidiary, Integrys Energy Services, Inc. (Integrys) for a purchase priceOyster Creek Environmental Protection, LLC (OCEP), of $332 million, including net working capital. TheOyster Creek located in Forked River, New Jersey, which permanently ceased generation and solar asset businesses of Integrys were excluded from the transaction.operations on September 17, 2018.

terms of the operating licenses. Changes in regulations by the NRC may require a substantial increase in capital expenditures and/or operating costs for nuclear generating facilities.

stations, which reflect the actualfirst renewal of the operating licenses for all of Generation’s operating nuclear generating stations except for TMIClinton and Clinton. Beginning in 2017, TMI depreciation provisions are based on its 2019 expected shutdown date. Beginning in 2016,Peach Bottom. Clinton depreciation provisions are based on an estimated useful life of 2027 which is the last year of the Illinois Zero Emissions Standard.ZES. Peach Bottom depreciation provisions are based on estimated

Generation transferred to ZionSolutions substantially all of the assets (other than land) associated with Zion Station, including assets held in related NDT funds. In consideration for Generation’s transfer of those assets, ZionSolutions assumed decommissioning and other liabilities, excluding the obligation to dispose of SNF, associated with Zion Station. Pursuant to the ASA, ZionSolutions will periodically request reimbursement from the Zion Station-related NDT funds for costs incurred related to the decommissioning efforts at Zion Station. However, ZionSolutions is subject to certain restrictions on its ability to request reimbursement; specifically, if certain milestones as defined in the ASA are not met, all or a portion of requested reimbursements will be deferred until such milestones are met. See Note 159 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding Zion Station decommissioning and Note 2 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for a discussion of variable interest entity considerations related to ZionSolutions.information.

that are unhedged. As of December 31, 2018,2019, the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York and ERCOT reportable segments is 89%-92%, 56%-59%91%-94% and 32%-35%61%-64% for 2019, 2020 and 2021, respectively. The percentage of expected generation hedged is the amount of equivalent sales divided by the expected generation. Expected generation is the volume of energy that best represents our commodity position in energy markets from owned or contracted generating facilitiesgeneration based upon a simulated dispatch model that makes assumptions regarding future market conditions, which are calibrated to market quotes for power, fuel, load following products and options. Equivalent sales represent all hedging products, which include economic hedges and certain non-derivative contracts, including sales to ComEd, PECO, BGE, Pepco, DPL and ACEthe Utility Registrants to serve their retail load. A portion of Generation’s hedging strategy may be implemented through the use of fuel products based on assumed correlations between power and fuel prices. The risk management group and Exelon’s RMC monitor the financial risks of the wholesale and retail power marketing activities. Generation also uses financial and commodity contracts for proprietary trading purposes, but this activity accounts for only a small portion of Generation’s efforts. The proprietary trading portfolio is subject to a risk management policy that includes stringent risk management limits. See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information.

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 without mark-up and therefore record equal and offsetting amounts of Operating revenues and Purchased power and fuel expense related to the electricity and/or natural gas. As a result, fluctuations in electricity or natural gas sales and procurement costs have no impact on the Utility Registrants’ Revenues net of purchased power and fuel expense, which is a non-GAAP measure used to evaluate operational performance, or Net Income.

As of December 31, 2018, Exelon and its subsidiaries had 33,383 employees in the following companies, of which 11,372 or 34% were covered by collective bargaining agreements (CBAs):2019:

President, Corporate Strategy & Chief Innovation and Sustainability Officer; the Senior Vice President, Competitive Market Policy; and the Director, Safety & Sustainability, as well as senior management of Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE.the 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 Exelon Board of Directors has delegated to its Generation Oversight Committee and the Corporate Governance Committee the authority to oversee

environmental remediation of non-MGP contaminants (e.g., PCBs). As of December 31, 2018,2019, the Utility Registrants have established appropriate contingent liabilities for environmental remediation requirements.

16, 2017 the EPA proposed to repeal the CPP on the basis that the new Administration believed that the CPP rule went beyond the EPA's authority to establish a best system of emissions reduction (BSER) for existing power plants. Subsequently, onOn August 31, 2018, EPA proposed its Affordable Clean Energy Rule (ACE), which wouldrule to replace the CPP with revised emission guidelines based on heat rate improvement measures that could be achieved within the fence line of existing power plants. In June 2019, EPA issued a final rule that repealed the CPP, and finalized the Affordable Clean Energy rule. The Affordable Clean Energy rule is currently being litigated.