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Peco Energy

Filed: 3 Nov 20, 2:21pm
000110935710-QSeptember 30, 2020false2020Q3December 31975,572,46300011681650000022606127,021,3540000078100170,478,50700000094661,0000001135971000007973210000000278791,00000000081928,546,017PA10 South Dearborn StreetP.O. Box 805379ChicagoIL60680-5379(800)483-3220PA300 Exelon WayKennett SquarePA19348-2473(610)765-5959IL440 South LaSalle StreetChicagoIL60605-1028(312)394-4321PAP.O. Box 86992301 Market StreetPhiladelphiaPA19101-8699(215)841-4000MD2 Center Plaza110 West Fayette StreetBaltimoreMD21201-3708(410)234-5000DE701 Ninth Street, N.W.Washington, District of Columbia20068(202)872-2000DCVA701 Ninth Street, N.W.Washington, District of Columbia20068(202)872-2000DEVA500 North Wakefield DriveNewarkDE19702(202)872-2000NJ500 North Wakefield DriveNewarkDE19702(202)872-2000Common stock, without par valueEXCNasdaqEXC/28NYSECumulative Preferred Security, Series D00000001.300.00000.000.0000000000000000000000000000001060981313600001109357us-gaap:RegulatedOperationMemberexc:CommonwealthEdisonCoMemberus-gaap:NaturalGasUsRegulatedMemberexc:ResidentialMember2019-01-012019-09-300001109357exc:ExelonGenerationCoLLCMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberexc:OtherFixedIncomeMember2019-12-310001109357us-gaap:GuaranteeObligationsMemberexc:PotomacElectricPowerCompanyMember2020-09-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File NumberName of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone NumberIRS Employer Identification Number
001-16169EXELON CORPORATION23-2990190
(a Pennsylvania corporation)
10 South Dearborn Street
P.O. Box 805379
Chicago, Illinois 60680-5379
(800) 483-3220
333-85496EXELON GENERATION COMPANY, LLC23-3064219
(a Pennsylvania limited liability company)
300 Exelon Way
Kennett Square, Pennsylvania 19348-2473
(610) 765-5959
001-01839COMMONWEALTH EDISON COMPANY36-0938600
(an Illinois corporation)
440 South LaSalle Street
Chicago, Illinois 60605-1028
(312) 394-4321
000-16844PECO ENERGY COMPANY23-0970240
(a Pennsylvania corporation)
P.O. Box 8699
2301 Market Street
Philadelphia, Pennsylvania 19101-8699
(215) 841-4000
001-01910BALTIMORE GAS AND ELECTRIC COMPANY52-0280210
(a Maryland corporation)
2 Center Plaza
110 West Fayette Street
Baltimore, Maryland 21201-3708
(410) 234-5000
001-31403PEPCO HOLDINGS LLC52-2297449
(a Delaware limited liability company)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
001-01072POTOMAC ELECTRIC POWER COMPANY53-0127880
(a District of Columbia and Virginia corporation)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
001-01405DELMARVA POWER & LIGHT COMPANY51-0084283
(a Delaware and Virginia corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000
001-03559ATLANTIC CITY ELECTRIC COMPANY21-0398280
(a New Jersey corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000



Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
EXELON CORPORATION:
Common Stock, without par valueEXCThe Nasdaq Stock Market LLC
PECO ENERGY COMPANY:
Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and unconditionally guaranteed by PECO Energy CompanyEXC/28New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Exelon CorporationLarge Accelerated FilerxAccelerated FilerNon-accelerated FilerSmaller Reporting CompanyEmerging Growth Company
Exelon Generation Company, LLCLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Commonwealth Edison CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
PECO Energy CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Baltimore Gas and Electric CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Pepco Holdings LLCLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Potomac Electric Power CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Delmarva Power & Light CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Atlantic City Electric CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes    No  x

The number of shares outstanding of each registrant’s common stock as of September 30, 2020 was:
Exelon Corporation Common Stock, without par value975,572,463
Exelon Generation Company, LLCnot applicable
Commonwealth Edison Company Common Stock, $12.50 par value127,021,354
PECO Energy Company Common Stock, without par value170,478,507
Baltimore Gas and Electric Company Common Stock, without par value1,000
Pepco Holdings LLCnot applicable
Potomac Electric Power Company Common Stock, $0.01 par value100
Delmarva Power & Light Company Common Stock, $2.25 par value1,000
Atlantic City Electric Company Common Stock, $3.00 par value8,546,017



TABLE OF CONTENTS
1





2





3




GLOSSARY OF TERMS AND ABBREVIATIONS
Exelon Corporation and Related Entities
ExelonExelon Corporation
GenerationExelon Generation Company, LLC
ComEdCommonwealth Edison Company
PECOPECO Energy Company
BGEBaltimore Gas and Electric Company
Pepco Holdings or PHIPepco Holdings LLC (formerly Pepco Holdings, Inc.)
PepcoPotomac Electric Power Company
DPLDelmarva Power & Light Company
ACEAtlantic City Electric Company
RegistrantsExelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, collectively
Utility RegistrantsComEd, PECO, BGE, Pepco, DPL, and ACE, collectively
ACE Funding or ATFAtlantic City Electric Transition Funding LLC
Antelope ValleyAntelope Valley Solar Ranch One
BSCExelon Business Services Company, LLC
CENGConstellation Energy Nuclear Group, LLC
ConstellationConstellation Energy Group, Inc.
EGR IVExGen Renewables IV, LLC
EGRPExGen Renewables Partners, LLC
Exelon CorporateExelon in its corporate capacity as a holding company
FitzPatrickJames A. FitzPatrick nuclear generating station
NERNewEnergy Receivables LLC
PCIPotomac Capital Investment Corporation and its subsidiaries
PECO Trust IIIPECO Energy Capital Trust III
PECO Trust IVPECO Energy Capital Trust IV
Pepco Energy ServicesPepco Energy Services, Inc. and its subsidiaries
PHI CorporatePHI in its corporate capacity as a holding company
PHISCOPHI Service Company
SolGenSolGen, LLC
TMIThree Mile Island nuclear facility
4




GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
Note - of the 2019 Form 10-KReference to specific Combined Note to Consolidated Financial Statements within Exelon's 2019 Annual Report on Form 10-K
AECAlternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AESOAlberta Electric Systems Operator
AFUDCAllowance for Funds Used During Construction
AMIAdvanced Metering Infrastructure
AOCIAccumulated Other Comprehensive Income (Loss)
ARCAsset Retirement Cost
AROAsset Retirement Obligation
BGSBasic Generation Service
CBACollective Bargaining Agreement
CERCLAComprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
CESClean Energy Standard
Clean Water ActFederal Water Pollution Control Amendments of 1972, as amended
CODMChief operating decision maker(s)
D.C. Circuit CourtUnited States Court of Appeals for the District of Columbia Circuit
DC PLUGDistrict of Columbia Power Line Undergrounding Initiative
DCPSCPublic Service Commission of the District of Columbia
DOEUnited States Department of Energy
DOEEDistrict of Columbia Department of Energy & Environment
DOJUnited States Department of Justice
DPPDeferred Purchase Price
DPSCDelaware Public Service Commission
EDFElectricite de France SA and its subsidiaries
EIMAEnergy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EPAUnited States Environmental Protection Agency
ERCOTElectric Reliability Council of Texas
FASBFinancial Accounting Standards Board
FEJAIllinois Public Act 99-0906 or Future Energy Jobs Act
FERCFederal Energy Regulatory Commission
FRCCFlorida Reliability Coordinating Council
FRRFixed Resource Requirement
GAAPGenerally Accepted Accounting Principles in the United States
GCRGas Cost Rate
GSAGeneration Supply Adjustment
IBEWInternational Brotherhood of Electrical Workers
ICCIllinois Commerce Commission
ICEIntercontinental Exchange
IPAIllinois Power Agency
IRCInternal Revenue Code
IRSInternal Revenue Service
5




GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
ISOIndependent System Operator
ISO-NEIndependent System Operator New England Inc.
LIBORLondon Interbank Offered Rate
MDEMaryland Department of the Environment
MDPSCMaryland Public Service Commission
MGPManufactured Gas Plant
MISOMidcontinent Independent System Operator, Inc.
mmcfMillion Cubic Feet
MOPRMinimum Offer Price Rule
MWMegawatt
MWhMegawatt hour
NDTNuclear Decommissioning Trust
NERCNorth American Electric Reliability Corporation
NGXNatural Gas Exchange
NJBPUNew Jersey Board of Public Utilities
Non-Regulatory Agreement UnitsNuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NOSANuclear Operating Services Agreement
NPNSNormal Purchase Normal Sale scope exception
NRCNuclear Regulatory Commission
NYISONew York Independent System Operator Inc.
NYMEXNew York Mercantile Exchange
NYPSCNew York Public Service Commission
OCIOther Comprehensive Income
OIESOOntario Independent Electricity System Operator
OPEBOther Postretirement Employee Benefits
PAPUCPennsylvania Public Utility Commission
PGCPurchased Gas Cost Clause
PG&EPacific Gas and Electric Company
PJMPJM Interconnection, LLC
POLRProvider of Last Resort
PPAPower Purchase Agreement
PPEProperty, plant, and equipment
Price-Anderson ActPrice-Anderson Nuclear Industries Indemnity Act of 1957
PRPPotentially Responsible Parties
PSDARPost-Shutdown Decommissioning Activities Report
PSEGPublic Service Enterprise Group Incorporated
RECRenewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
RNFRevenues Net of Purchased Power and Fuel Expense
Regulatory Agreement UnitsNuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
RFPRequest for Proposal
RiderReconcilable Surcharge Recovery Mechanism
RMCRisk Management Committee
ROEReturn on equity
6




GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
ROURight-of-use
RTORegional Transmission Organization
S&PStandard & Poor’s Ratings Services
SECUnited States Securities and Exchange Commission
SEIUService Employees International Union
SERCSERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNFSpent Nuclear Fuel
SOSStandard Offer Service
SPFPAInternational Union, Security, Police, and Fire Professionals of America
STRIDEMaryland Strategic Infrastructure Development and Enhancement Program
TCJATax Cuts and Jobs Act
Transition BondsTransition Bonds issued by ACE Funding
UGSOAUnited Government Security Officers of America
VIEVariable Interest Entity
WECCWestern Electric Coordinating Council
ZECZero Emission Credit, or Zero Emission Certificate
ZESZero Emission Standard
7




FILING FORMAT
This combined Form 10-Q is being filed separately by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties including among others those related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of various governments and regulatory bodies, our customers, and the company, on our business, financial condition and results of operations; any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, as well as the items discussed in (1) the Registrants' combined 2019 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 14, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.
Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.
WHERE TO FIND MORE INFORMATION
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and the Registrants' website at www.exeloncorp.com. Information contained on the Registrants' website shall not be deemed incorporated into, or to be a part of, this Report.
8




PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
9





EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions, except per share data)2020201920202019
Operating revenues
Competitive businesses revenues$4,330 $4,499 $12,344 $13,436 
Rate-regulated utility revenues4,533 4,510 12,643 12,758 
Revenues from alternative revenue programs(11)(80)(66)(98)
Operating revenue from affiliates
Total operating revenues8,853 8,929 24,925 26,096 
Operating expenses
Competitive businesses purchased power and fuel2,311 2,648 6,967 8,142 
Rate-regulated utility purchased power and fuel1,303 1,304 3,439 3,589 
Operating and maintenance2,732 2,072 7,370 6,419 
Depreciation and amortization1,289 1,083 3,312 3,237 
Taxes other than income taxes452 452 1,299 1,316 
Total operating expenses8,087 7,559 22,387 22,703 
Gain (Loss) on sales of assets and businesses(17)16 19 
Operating income769 1,353 2,554 3,412 
Other income and (deductions)
Interest expense, net(398)(403)(1,222)(1,202)
Interest expense to affiliates(6)(6)(19)(19)
Other, net421 158 352 837 
Total other income and (deductions)17 (251)(889)(384)
Income before income taxes786 1,102 1,665 3,028 
Income taxes216 172 141 626 
Equity in losses of unconsolidated affiliates(1)(170)(5)(182)
Net income569 760 1,519 2,220 
Net income (loss) attributable to noncontrolling interests68 (12)(85)56 
Net income attributable to common shareholders$501 $772 $1,604 $2,164 
Comprehensive income, net of income taxes
Net income$569 $760 $1,519 $2,220 
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost(10)(16)(30)(49)
Actuarial loss reclassified to periodic benefit cost49 37 142 111 
Pension and non-pension postretirement benefit plan valuation adjustment(13)(17)(32)
Unrealized loss on cash flow hedges(1)(2)
Unrealized gain on investments in unconsolidated affiliates
Unrealized gain (loss) on foreign currency translation(2)(3)
Other comprehensive income28 30 90 33 
Comprehensive income597 790 1,609 2,253 
Comprehensive income (loss) attributable to noncontrolling interests68 (9)(85)57 
Comprehensive income attributable to common shareholders$529 $799 $1,694 $2,196 
Average shares of common stock outstanding:
Basic976 973 976 972 
Assumed exercise and/or distributions of stock-based awards
Diluted(a)
977 974 976 973 
Earnings per average common share:
Basic$0.51 $0.79 $1.64 $2.23 
Diluted$0.51 $0.79 $1.64 $2.22 
__________
(a)The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 1 million for the three and nine months ended September 30, 2020, and less than 1 million for the three and nine months ended September 30, 2019.
See the Combined Notes to Consolidated Financial Statements
10




EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$1,519 $2,220 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization4,419 4,393 
Asset impairments567 174 
Gain on sales of assets and businesses(16)(15)
Deferred income taxes and amortization of investment tax credits164 412 
Net fair value changes related to derivatives(448)96 
Net realized and unrealized gains on NDT funds(59)(467)
Other non-cash operating activities988 460 
Changes in assets and liabilities:
Accounts receivable1,195 445 
Inventories(67)(94)
Accounts payable and accrued expenses(519)(671)
Option premiums (paid) received, net(131)13 
Collateral received (posted), net644 (254)
Income taxes(31)143 
Pension and non-pension postretirement benefit contributions(580)(377)
Other assets and liabilities(3,423)(1,079)
Net cash flows provided by operating activities4,222 5,399 
Cash flows from investing activities
Capital expenditures(5,606)(5,259)
Proceeds from NDT fund sales3,370 8,443 
Investment in NDT funds(3,438)(8,437)
Collection of DPP2,518 
Proceeds from sales of assets and businesses46 17 
Other investing activities(2)21 
Net cash flows used in investing activities(3,112)(5,215)
Cash flows from financing activities
Changes in short-term borrowings(689)430 
Proceeds from short-term borrowings with maturities greater than 90 days500 
Repayments on short-term borrowings with maturities greater than 90 days(125)
Issuance of long-term debt6,756 1,576 
Retirement of long-term debt(5,158)(644)
Dividends paid on common stock(1,119)(1,055)
Proceeds from employee stock plans62 94 
Other financing activities(104)(63)
Net cash flows provided by financing activities248 213 
Increase in cash, cash equivalents, and restricted cash1,358 397 
Cash, cash equivalents, and restricted cash at beginning of period1,122 1,781 
Cash, cash equivalents, and restricted cash at end of period$2,480 $2,178 
Supplemental cash flow information
Decrease in capital expenditures not paid$(11)$(96)
Increase in DPP3,275 
Increase in PPE related to ARO update775 344 
See the Combined Notes to Consolidated Financial Statements
11




EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$1,858 $587 
Restricted cash and cash equivalents485 358 
Accounts receivable
Customer accounts receivable3,1504,835
Customer allowance for credit losses(358)(243)
Customer accounts receivable, net2,792 4,592 
Other accounts receivable1,5761,631
Other allowance for credit losses(75)(48)
Other accounts receivable, net1,501 1,583 
Mark-to-market derivative assets472 679 
Unamortized energy contract assets41 47 
Inventories, net
Fossil fuel and emission allowances311 312 
Materials and supplies1,405 1,456 
Regulatory assets1,170 1,170 
Other2,277 1,253 
Total current assets12,312 12,037 
Property, plant, and equipment (net of accumulated depreciation and amortization of $25,582 and $23,979 as of September 30, 2020 and December 31, 2019, respectively)82,561 80,233 
Deferred debits and other assets
Regulatory assets8,485 8,335 
Nuclear decommissioning trust funds13,432 13,190 
Investments444 464 
Goodwill6,677 6,677 
Mark-to-market derivative assets383 508 
Unamortized energy contract assets308 336 
Other3,165 3,197 
Total deferred debits and other assets32,894 32,707 
Total assets(a)
$127,767 $124,977 
See the Combined Notes to Consolidated Financial Statements
12




EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings$1,181 $1,370 
Long-term debt due within one year2,077 4,710 
Accounts payable3,182 3,560 
Accrued expenses1,879 1,981 
Payables to affiliates
Regulatory liabilities575 406 
Mark-to-market derivative liabilities177 247 
Unamortized energy contract liabilities107 132 
Renewable energy credit obligation604 443 
Other1,475 1,331 
Total current liabilities11,262 14,185 
Long-term debt35,512 31,329 
Long-term debt to financing trusts390 390 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits13,058 12,351 
Asset retirement obligations11,989 10,846 
Pension obligations3,648 4,247 
Non-pension postretirement benefit obligations2,128 2,076 
Spent nuclear fuel obligation1,207 1,199 
Regulatory liabilities9,495 9,986 
Mark-to-market derivative liabilities396 393 
Unamortized energy contract liabilities266 338 
Other3,313 3,064 
Total deferred credits and other liabilities45,500 44,500 
Total liabilities(a)
92,664 90,404 
Commitments and contingencies
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 976 shares and 973 shares outstanding at September 30, 2020 and December 31, 2019, respectively)19,362 19,274 
Treasury stock, at cost (2 shares at September 30, 2020 and December 31, 2019)(123)(123)
Retained earnings16,749 16,267 
Accumulated other comprehensive loss, net(3,104)(3,194)
Total shareholders’ equity32,884 32,224 
Noncontrolling interests2,219 2,349 
Total equity35,103 34,573 
Total liabilities and shareholders’ equity$127,767 $124,977 
__________
(a)Exelon’s consolidated assets include $10,102 million and $9,532 million at September 30, 2020 and December 31, 2019, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Exelon’s consolidated liabilities include $3,531 million and $3,473 million at September 30, 2020 and December 31, 2019, respectively, of certain VIEs for which the VIE creditors do not have recourse to Exelon. See Note 16 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
13




EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions, shares
in thousands)
Issued
Shares
Common
Stock
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss, net
Noncontrolling
Interests
Total Shareholders'
Equity
Balance, December 31, 2019974,416 $19,274 $(123)$16,267 $(3,194)$2,349 $34,573 
Net income (loss)— — — 582 — (206)376 
Long-term incentive plan activity1,354 (4)(4)
Employee stock purchase plan issuances470 31 31 
Changes in equity of noncontrolling interests— — — — — (9)(9)
Sale of noncontrolling interests— — — — — 
Common stock dividends
($0.38/common share)
— — — (374)— — (374)
Other comprehensive income, net of income taxes— — — — 21 21 
Balance, March 31, 2020976,240 $19,303 $(123)$16,475 $(3,173)$2,134 $34,616 
Net income— — — 521 — 53 574 
Long-term incentive plan activity148 17 17 
Employee stock purchase plan issuances(51)15 15 
Changes in equity of noncontrolling interests— — — — — (19)(19)
Sale of noncontrolling interests— — — — — 
Common stock dividends
($0.38/common share)
— — — (374)— — (374)
Other comprehensive income, net of income taxes— — — — 41 41 
Balance, June 30, 2020976,337 $19,336 $(123)$16,622 $(3,132)$2,168 $34,871 
Net income— — — 501 — 68 569 
Long-term incentive plan activity68 10 — — — — 10 
Employee stock purchase plan issuances1,000 16 — — — — 16 
Changes in equity of noncontrolling interests— — — — — (17)(17)
Common stock dividends
($0.38/common share)
— — — (374)— — (374)
Other comprehensive income net of income taxes— — — — 28 — 28 
Balance, September 30, 2020977,405 $19,362 $(123)$16,749 $(3,104)$2,219 $35,103 









See the Combined Notes to Consolidated Financial Statements
14




EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Nine Months Ended September 30, 2019
(In millions, shares
in thousands)
Issued
Shares
Common
Stock
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss, net
Noncontrolling
Interests
Total Shareholders'
Equity
Balance, December 31, 2018970,020 $19,116 $(123)$14,766 $(2,995)$2,306 $33,070 
Net income— — — 907 — 59 966 
Long-term incentive plan activity2,446 (3)(3)
Employee stock purchase plan issuances320 51 51 
Changes in equity of noncontrolling interests— — — — — (17)(17)
Sale of noncontrolling interests— — — — — 
Common stock dividends
($0.36/common share)
— — — (352)— — (352)
Other comprehensive loss, net of income taxes— — — — (17)(1)(18)
Balance, March 31, 2019972,786 $19,171 $(123)$15,321 $(3,012)$2,347 $33,704 
Net income— — — 484 — 10 494 
Long-term incentive plan activity320 14 14 
Employee stock purchase plan issuances311 24 24 
Changes in equity of noncontrolling interests— — — — — 
Common stock dividends
($0.36/common share)
— — — (353)— — (353)
Other comprehensive income, net of income taxes— — — — 22 (1)21 
Balance, June 30, 2019973,417 $19,209 $(123)$15,452 $(2,990)$2,359 $33,907 
Net Income (loss)— — — 772 — (12)760 
Long-term incentive plan activity207 10 — — — — 10 
Employee stock purchase plan issuances317 19 — — — — 19 
Changes in equity of noncontrolling interests— — — — — (18)(18)
Common stock dividends
($0.36/common share)
— — — (353)— — (353)
Other comprehensive income, net of income taxes— — — — 27 27 
Balance, September 30, 2019973,941 $19,238 $(123)$15,871 $(2,963)$2,329 $34,352 
See the Combined Notes to Consolidated Financial Statements
15





EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Operating revenues$4,328 $4,499 $12,340 $13,436 
Operating revenues from affiliates331 275 932 844 
Total operating revenues4,659 4,774 13,272 14,280 
Operating expenses
Purchased power and fuel2,311 2,648 6,967 8,141 
Purchased power and fuel from affiliates(6)
Operating and maintenance1,605 947 3,779 3,131 
Operating and maintenance from affiliates132 140 409 439 
Depreciation and amortization558 407 1,161 1,221 
Taxes other than income taxes118 129 364 394 
Total operating expenses4,727 4,274 12,674 13,333 
(Loss) Gain on sales of assets and businesses(18)12 15 
Operating (loss) income(68)482 610 962 
Other income and (deductions)
Interest expense, net(72)(101)(251)(310)
Interest expense to affiliates(8)(8)(26)(26)
Other, net367 128 199 729 
Total other income and (deductions)287 19 (78)393 
Income before income taxes219 501 532 1,355 
Income taxes100 87 41 388 
Equity in losses of unconsolidated affiliates(2)(170)(6)(183)
Net income117 244 485 784 
Net income (loss) attributable to noncontrolling interests68 (13)(85)56 
Net income attributable to membership interest$49 $257 $570 $728 
Comprehensive income, net of income taxes
Net income$117 $244 $485 $784 
Other comprehensive income (loss), net of income taxes
Unrealized loss on cash flow hedges(1)
Unrealized gain on investments in unconsolidated affiliates
Unrealized gain (loss) on foreign currency translation(2)(3)
Other comprehensive income (loss)(4)
Comprehensive income120 247 481 787 
Comprehensive income (loss) attributable to noncontrolling interests68 (10)(85)57 
Comprehensive income attributable to membership interest$52 $257 $566 $730 
See the Combined Notes to Consolidated Financial Statements
16




EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$485 $784 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization2,266 2,377 
Asset impairments552 174 
Gain on sales of assets and businesses(12)(15)
Deferred income taxes and amortization of investment tax credits(51)201 
Net fair value changes related to derivatives(448)102 
Net realized and unrealized gains on NDT funds(59)(467)
Other non-cash operating activities293 (95)
Changes in assets and liabilities:
Accounts receivable1,463 395 
Receivables from and payables to affiliates, net75 (12)
Inventories(65)(36)
Accounts payable and accrued expenses(619)(428)
Option premiums (paid) received, net(131)13 
Collateral posted, net640 (292)
Income taxes112 327 
Pension and non-pension postretirement benefit contributions(249)(165)
Other assets and liabilities(2,889)(390)
Net cash flows provided by operating activities1,363 2,473 
Cash flows from investing activities
Capital expenditures(1,212)(1,282)
Proceeds from NDT fund sales3,370 8,443 
Investment in NDT funds(3,438)(8,437)
Collection of DPP2,518 
Proceeds from sales of assets and businesses46 17 
Other investing activities(6)
Net cash flows provided by (used in) investing activities1,289 (1,265)
Cash flows from financing activities
Changes in short-term borrowings(280)
Proceeds from short-term borrowings with maturities greater than 90 days500 
Issuance of long-term debt2,405 41 
Retirement of long-term debt(3,613)(196)
Changes in Exelon intercompany money pool(100)
Distributions to member(1,406)(674)
Contributions from member64 
Other financing activities(48)(37)
Net cash flows used in financing activities(2,378)(966)
Increase in cash, cash equivalents, and restricted cash274 242 
Cash, cash equivalents, and restricted cash at beginning of period449 903 
Cash, cash equivalents, and restricted cash at end of period$723 $1,145 
Supplemental cash flow information
Decrease in capital expenditures not paid$(77)$(24)
Increase in DPP3,275 
Increase in PPE related to ARO update775 342 
    
See the Combined Notes to Consolidated Financial Statements
17




EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$623 $303 
Restricted cash and cash equivalents100 146 
Accounts receivable
Customer accounts receivable1,0892,973
Customer allowance for credit losses(33)(80)
Customer accounts receivable, net1,056 2,893 
Other accounts receivable311619
Other accounts receivable, net311 619 
Mark-to-market derivative assets471 675 
Receivables from affiliates109 190 
Unamortized energy contract assets41 47 
Inventories, net
Fossil fuel and emission allowances238 236 
Materials and supplies971 1,026 
Renewable energy credits576 336 
Other1,387 605 
Total current assets5,883 7,076 
Property, plant, and equipment (net of accumulated depreciation and amortization of $12,588 and $12,017 as of September 30, 2020 and December 31, 2019, respectively)23,709 24,193 
Deferred debits and other assets
Nuclear decommissioning trust funds13,432 13,190 
Investments197 235 
Goodwill47 47 
Mark-to-market derivative assets383 508 
Prepaid pension asset1,584 1,438 
Unamortized energy contract assets308 336 
Deferred income taxes12 
Other1,820 1,960 
Total deferred debits and other assets17,780 17,726 
Total assets(a)
$47,372 $48,995 
See the Combined Notes to Consolidated Financial Statements
18




EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings$540 $320 
Long-term debt due within one year203 2,624 
Long-term debt to affiliates due within one year551 558 
Accounts payable1,109 1,692 
Accrued expenses699 786 
Payables to affiliates113 117 
Mark-to-market derivative liabilities147 215 
Unamortized energy contract liabilities17 
Renewable energy credit obligation604 443 
Other437 517 
Total current liabilities4,411 7,289 
Long-term debt5,677 4,464 
Long-term debt to affiliates325 328 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits3,715 3,752 
Asset retirement obligations11,744 10,603 
Non-pension postretirement benefit obligations864 878 
Spent nuclear fuel obligation1,207 1,199 
Payables to affiliates2,888 3,103 
Mark-to-market derivative liabilities121 123 
Unamortized energy contract liabilities11 
Other1,488 1,415 
Total deferred credits and other liabilities22,035 21,084 
Total liabilities(a)
32,448 33,165 
Commitments and contingencies
Equity
Member’s equity
Membership interest9,633 9,566 
Undistributed earnings3,114 3,950 
Accumulated other comprehensive loss, net(36)(32)
Total member’s equity12,711 13,484 
Noncontrolling interests2,213 2,346 
Total equity14,924 15,830 
Total liabilities and equity$47,372 $48,995 
__________
(a)Generation’s consolidated assets include $10,082 million and $9,512 million at September 30, 2020 and December 31, 2019, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Generation’s consolidated liabilities include $3,499 million and $3,429 million at September 30, 2020 and December 31, 2019, respectively, of certain VIEs for which the VIE creditors do not have recourse to Generation. See Note 16 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
19




EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
Member’s Equity
(In millions)Membership
Interest
Undistributed
Earnings
Accumulated
Other
Comprehensive
Loss, net
Noncontrolling
Interests
Total Equity
Balance, December 31, 2019$9,566 $3,950 $(32)$2,346 $15,830 
Net income (loss)— 45 — (206)(161)
Changes in equity of noncontrolling interests— — — (11)(11)
Sale of noncontrolling interests— — — 
Distributions to member— (468)— — (468)
Other comprehensive loss, net of income taxes— (9)(9)
Balance, March 31, 2020$9,568 $3,527 $(41)$2,129 $15,183 
Net income— 476 — 53 529 
Changes in equity of noncontrolling interests— — — (19)(19)
Sale of noncontrolling interests— — — 
Distributions to member— (469)— — (469)
Other comprehensive loss, net of income taxes— 
Balance, June 30, 2020$9,569 $3,534 $(39)$2,163 $15,227 
Net income— 49 — 68 117 
Changes in equity of noncontrolling interests— — — (18)(18)
Sale of noncontrolling interests— — — 
Contribution from member64 — — — 64 
Distributions to member— (469)— — (469)
Other comprehensive income, net of income taxes— 
Balance, September 30, 2020$9,633 $3,114 $(36)$2,213 $14,924 
See the Combined Notes to Consolidated Financial Statements
20




Nine Months Ended September 30, 2019
Member’s Equity
(In millions)Membership
Interest
Undistributed
Earnings
Accumulated
Other
Comprehensive
Loss, net
Noncontrolling
Interests
Total Equity
Balance, December 31, 2018$9,518 $3,724 $(38)$2,304 $15,508 
Net income— 363 — 59 422 
Changes in equity of noncontrolling interests— — — (17)(17)
Sale of noncontrolling interests— — — 
Distributions to member— (225)— — (225)
Other comprehensive income, net of income taxes— (1)
Balance, March 31, 2019$9,525 $3,862 $(36)$2,345 $15,696 
Net income— 108 — 10 118 
Changes in equity of noncontrolling interests— — — 
Distributions to member— (224)— — (224)
Other comprehensive income, net of income taxes— (1)(1)
Balance, June 30, 2019$9,525 $3,746 $(36)$2,357 $15,592 
Net income (loss)— 257 — (13)244 
Changes in equity of noncontrolling interests— — — (18)(18)
Distributions to member— (225)— — (225)
Balance, September 30, 2019$9,525 $3,778 $(36)$2,326 $15,593 

See the Combined Notes to Consolidated Financial Statements
21




COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$1,666 $1,635 $4,519 $4,427 
Revenues from alternative revenue programs(38)(56)(51)(98)
Operating revenues from affiliates15 31 13 
Total operating revenues1,643 1,583 4,499 4,342 
Operating expenses
Purchased power535 494 1,305 1,199 
Purchased power from affiliate71 83 252 270 
Operating and maintenance252 267 964 771 
Operating and maintenance from affiliate69 73 209 196 
Depreciation and amortization294 259 841 767 
Taxes other than income taxes81 80 227 228 
Total operating expenses1,302 1,256 3,798 3,431 
Gain on sales of assets
Operating income341 328 701 915 
Other income and (deductions)
Interest expense, net(92)(87)(277)(258)
Interest expense to affiliates(3)(4)(10)(10)
Other, net10 32 27 
Total other income and (deductions)(85)(83)(255)(241)
Income before income taxes256 245 446 674 
Income taxes60 45 142 130 
Net income$196 $200 $304 $544 
Comprehensive income$196 $200 $304 $544 

22




COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$304 $544 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion841 767 
Asset impairments15 
Deferred income taxes and amortization of investment tax credits205 115 
Other non-cash operating activities354 180 
Changes in assets and liabilities:
Accounts receivable(104)(38)
Receivables from and payables to affiliates, net(13)(27)
Inventories(2)(16)
Accounts payable and accrued expenses21 (132)
Collateral received (posted), net43 
Income taxes(22)25 
Pension and non-pension postretirement benefit contributions(145)(71)
Other assets and liabilities(380)(245)
Net cash flows provided by operating activities1,077 1,145 
Cash flows from investing activities
Capital expenditures(1,583)(1,413)
Other investing activities25 
Net cash flows used in investing activities(1,583)(1,388)
Cash flows from financing activities
Changes in short-term borrowings11 387 
Issuance of long-term debt1,000 400 
Retirement of long-term debt(500)(300)
Dividends paid on common stock(374)(380)
Contributions from parent488 187 
Other financing activities(14)(10)
Net cash flows provided by financing activities611 284 
Increase in cash, cash equivalents, and restricted cash105 41 
Cash, cash equivalents, and restricted cash at beginning of period403 330 
Cash, cash equivalents, and restricted cash at end of period$508 $371 
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid$49 $(52)
See the Combined Notes to Consolidated Financial Statements
23




COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
   Cash and cash equivalents$76 $90 
   Restricted cash and cash equivalents305 150 
   Accounts receivable
   Customer accounts receivable707604
   Customer allowance for credit losses(105)(59)
       Customer accounts receivable, net602 545 
   Other accounts receivable309306
   Other allowance for credit losses(27)(20)
       Other accounts receivable, net282 286 
   Receivables from affiliates20 28 
   Inventories, net160 159 
   Regulatory assets274 281 
   Other59 44 
   Total current assets1,778 1,583 
Property, plant, and equipment (net of accumulated depreciation and amortization of $5,533 and $5,168 as of September 30, 2020 and December 31, 2019, respectively)24,081 23,107 
Deferred debits and other assets
   Regulatory assets1,742 1,480 
   Investments
   Goodwill2,625 2,625 
   Receivables from affiliates2,445 2,622 
   Prepaid pension asset1,050 995 
   Other516 347 
   Total deferred debits and other assets8,384 8,075 
Total assets$34,243 $32,765 
See the Combined Notes to Consolidated Financial Statements
24




COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
   Short-term borrowings$141 $130 
   Long-term debt due within one year350 500 
   Accounts payable671 527 
   Accrued expenses282 385 
   Payables to affiliates82 103 
   Customer deposits100 118 
   Regulatory liabilities251 200 
   Mark-to-market derivative liabilities30 32 
   Deferred Prosecution Agreement payments200 
   Other140 122 
   Total current liabilities2,247 2,117 
Long-term debt8,631 7,991 
Long-term debt to financing trust205 205 
Deferred credits and other liabilities
   Deferred income taxes and unamortized investment tax credits4,299 4,021 
   Asset retirement obligations126 128 
   Non-pension postretirement benefits obligations175 180 
   Regulatory liabilities6,420 6,542 
   Mark-to-market derivative liabilities274 269 
   Other771 635 
   Total deferred credits and other liabilities12,065 11,775 
   Total liabilities23,148 22,088 
Commitments and contingencies
Shareholders’ equity
   Common stock1,588 1,588 
   Other paid-in capital8,060 7,572 
   Retained deficit unappropriated(1,700)(1,639)
   Retained earnings appropriated3,147 3,156 
   Total shareholders’ equity11,095 10,677 
Total liabilities and shareholders’ equity$34,243 $32,765 
See the Combined Notes to Consolidated Financial Statements
25




COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Common
Stock
Other
Paid-In
Capital
Retained Deficit
Unappropriated
Retained
Earnings
Appropriated
Total
Shareholders’
Equity
Balance, December 31, 2019$1,588 $7,572 $(1,639)$3,156 $10,677 
Net income— — 168 — 168 
Appropriation of retained earnings for future dividends— — (168)168 
Common stock dividends— — — (125)(125)
Contributions from parent— 125 — — 125 
Balance, March 31, 2020$1,588 $7,697 $(1,639)$3,199 $10,845 
Net loss— — (61)— (61)
Common stock dividends— — — (124)(124)
Contributions from parent— 124 — — 124 
Balance, June 30, 2020$1,588 $7,821 $(1,700)$3,075 $10,784 
Net income— — 196 — 196 
Appropriation of retained earnings for future dividends— — (196)196 
Common stock dividends— — — (124)(124)
Contributions from parent— 239 — — 239 
Balance, September 30, 2020$1,588 $8,060 $(1,700)$3,147 $11,095 
Nine Months Ended September 30, 2019
(In millions)Common
Stock
Other
Paid-In
Capital
Retained Deficit
Unappropriated
Retained
Earnings
Appropriated
Total
Shareholders’
Equity
Balance, December 31, 2018$1,588 $7,322 $(1,639)$2,976 $10,247 
Net income— — 157 — 157 
Appropriation of retained earnings for future dividends— — (157)157 
Common stock dividends— — — (127)(127)
Contributions from parent— 63 — — 63 
Balance, March 31, 2019$1,588 $7,385 $(1,639)$3,006 $10,340 
Net income— — 186 — 186 
Appropriation of retained earnings for future dividends— — (186)186 
Common stock dividends— — — (127)(127)
Contributions from parent— 61 — — 61 
Balance, June 30, 2019$1,588 $7,446 $(1,639)$3,065 $10,460 
Net income— — 200 — 200 
Appropriation of retained earnings for future dividends— — (200)200 
Common stock dividends— — — (126)(126)
Contributions from parent— 63 — — 63 
Balance, September 30, 2019$1,588 $7,509 $(1,639)$3,139 $10,597 
See the Combined Notes to Consolidated Financial Statements
26





PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$751 $726 $1,931 $1,914 
Natural gas operating revenues54 62 358 431 
Revenues from alternative revenue programs(11)10 (16)
Operating revenues from affiliates
Total operating revenues813 778 2,306 2,333 
Operating expenses
Purchased power190 185 495 461 
Purchased fuel12 18 129 184 
Purchased power from affiliate67 43 144 122 
Operating and maintenance214 182 628 531 
Operating and maintenance from affiliates37 37 114 112 
Depreciation and amortization85 83 259 247 
Taxes other than income taxes53 47 131 126 
Total operating expenses658 595 1,900 1,783 
Operating income155 183 406 550 
Other income and (deductions)
Interest expense, net(36)(30)(100)(91)
Interest expense to affiliates(3)(3)(8)(9)
Other, net12 11 
Total other income and (deductions)(33)(29)(96)(89)
Income before income taxes122 154 310 461 
Income taxes(16)14 (7)51 
Net income$138 $140 $317 $410 
Comprehensive income$138 $140 $317 $410 
See the Combined Notes to Consolidated Financial Statements
27




PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$317 $410 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization259 247 
Deferred income taxes and amortization of investment tax credits(5)
Other non-cash operating activities27 28 
Changes in assets and liabilities:
Accounts receivable(2)46 
Receivables from and payables to affiliates, net(7)(12)
Inventories(3)(3)
Accounts payable and accrued expenses32 (32)
Income taxes48 (15)
Pension and non-pension postretirement benefit contributions(18)(26)
Other assets and liabilities(13)(111)
Net cash flows provided by operating activities635 538 
Cash flows from investing activities
Capital expenditures(824)(675)
Changes in Exelon intercompany money pool68 
Other investing activities
Net cash flows used in investing activities(752)(668)
Cash flows from financing activities
Issuance of long-term debt350 325 
Dividends paid on common stock(255)(268)
Contributions from parent248 174 
Other financing activities(4)(6)
Net cash flows provided by financing activities339 225 
Increase in cash, cash equivalents, and restricted cash222 95 
Cash, cash equivalents, and restricted cash at beginning of period27 135 
Cash, cash equivalents, and restricted cash at end of period$249 $230 
Supplemental cash flow information
Increase in capital expenditures not paid$28 $42 
See the Combined Notes to Consolidated Financial Statements
28




PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$242 $21 
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable412412
Customer allowance for credit losses(96)(55)
Customer accounts receivable, net316 357 
Other accounts receivable126145
Other allowance for credit losses(7)(7)
Other accounts receivable, net119 138 
Receivables from affiliates
Receivable from Exelon intercompany money pool68 
Inventories, net
Fossil fuel36 36 
Materials and supplies37 35 
Prepaid utility taxes35 
Regulatory assets38 41 
Other23 19 
Total current assets853 722 
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,804 and $3,718 as of September 30, 2020 and December 31, 2019, respectively)9,912 9,292 
Deferred debits and other assets
Regulatory assets692 554 
Investments29 27 
Receivables from affiliates443 480 
Prepaid pension asset377 365 
Other28 29 
Total deferred debits and other assets1,569 1,455 
Total assets$12,334 $11,469 
See the Combined Notes to Consolidated Financial Statements
29




PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Long-term debt due within one year$300 $
Accounts payable443 387 
Accrued expenses124 101 
Payables to affiliates47 55 
Customer deposits63 69 
Regulatory liabilities129 91 
Other27 19 
Total current liabilities1,133 722 
Long-term debt3,453 3,405 
Long-term debt to financing trusts184 184 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits2,194 2,080 
Asset retirement obligations29 28 
Non-pension postretirement benefits obligations286 288 
Regulatory liabilities471 510 
Other96 74 
Total deferred credits and other liabilities3,076 2,980 
Total liabilities7,846 7,291 
Commitments and contingencies
Shareholder’s equity
Common stock3,014 2,766 
Retained earnings1,474 1,412 
Total shareholder’s equity4,488 4,178 
Total liabilities and shareholder's equity$12,334 $11,469 
See the Combined Notes to Consolidated Financial Statements
30




PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Unaudited)
Nine months ended September 30, 2020
(In millions)Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
Balance, December 31, 2019$2,766 $1,412 $4,178 
Net income— 140 140 
Common stock dividends— (85)(85)
Contributions from parent231 — 231 
Balance, March 31, 2020$2,997 $1,467 $4,464 
Net income— 39 39 
Common stock dividends— (85)(85)
Balance, June 30, 2020$2,997 $1,421 $4,418 
Net income— 138 138 
Common stock dividends— (85)(85)
Contributions from parent17 — 17 
Balance, September 30, 2020$3,014 $1,474 $4,488 
Nine months ended September 30, 2019
(In millions)Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
Balance, December 31, 2018$2,578 $1,242 $3,820 
Net income— 168 168 
Common stock dividends— (90)(90)
Contributions from parent145 — 145 
Balance, March 31, 2019$2,723 $1,320 $4,043 
Net income— 102 102 
Common stock dividends— (90)(90)
Balance, June 30, 2019$2,723 $1,332 $4,055 
Net income— 140 140 
Common stock dividends— (88)(88)
Contributions from parent29 — 29 
Balance, September 30, 2019$2,752 $1,384 $4,136 
See the Combined Notes to Consolidated Financial Statements
31





BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$649 $623 $1,775 $1,814 
Natural gas operating revenues85 79 503 484 
Revenues from alternative revenue programs(9)(5)(10)11 
Operating revenues from affiliates16 18 
Total operating revenues731 703 2,284 2,327 
Operating expenses
Purchased power155 159 376 480 
Purchased fuel12 12 106 128 
Purchased power and fuel from affiliate83 64 249 196 
Operating and maintenance152 157 445 451 
Operating and maintenance from affiliates39 39 122 118 
Depreciation and amortization133 116 405 368 
Taxes other than income taxes68 65 200 195 
Total operating expenses642 612 1,903 1,936 
Operating income89 91 381 391 
Other income and (deductions)
Interest expense, net(34)(31)(99)(89)
Other, net17 18 
Total other income and (deductions)(28)(24)(82)(71)
Income before income taxes61 67 299 320 
Income taxes12 26 59 
Net income$53 $55 $273 $261 
Comprehensive income$53 $55 $273 $261 
See the Combined Notes to Consolidated Financial Statements
32




BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$273 $261 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization405 368 
Deferred income taxes and amortization of investment tax credits35 66 
Other non-cash operating activities82 63 
Changes in assets and liabilities:
Accounts receivable(19)110 
Receivables from and payables to affiliates, net(27)(14)
Inventories(5)
Accounts payable and accrued expenses53 (28)
Collateral posted, net(5)
Income taxes46 (43)
Pension and non-pension postretirement benefit contributions(74)(45)
Other assets and liabilities(50)(65)
Net cash flows provided by operating activities726 663 
Cash flows from investing activities
Capital expenditures(838)(842)
Other investing activities
Net cash flows used in investing activities(838)(838)
Cash flows from financing activities
Changes in short-term borrowings(76)(35)
Issuance of long-term debt400 400 
Dividends paid on common stock(186)(169)
Contributions from parent284 104 
Other financing activities(8)(7)
Net cash flows provided by financing activities414 293 
Increase in cash, cash equivalents, and restricted cash302 118 
Cash, cash equivalents, and restricted cash at beginning of period25 13 
Cash, cash equivalents, and restricted cash at end of period$327 $131 
Supplemental cash flow information
Increase in capital expenditures not paid$$
See the Combined Notes to Consolidated Financial Statements
33




BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$326 $24 
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable357329
Customer allowance for credit losses(35)(12)
    Customer accounts receivable, net322 317 
Other accounts receivable114152
Other allowance for credit losses(9)(5)
     Other accounts receivable, net105 147 
Receivables from affiliates
Inventories, net
Fossil fuel31 30 
Materials and supplies43 46 
Prepaid utility taxes78 
Regulatory assets167 183 
Other
Total current assets1,001 833 
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,963 and $3,834 as of September 30, 2020 and December 31, 2019, respectively)9,541 8,990 
Deferred debits and other assets
Regulatory assets473 454 
Investments
Prepaid pension asset283 264 
Other64 86 
Total deferred debits and other assets828 811 
Total assets$11,370 $10,634 
See the Combined Notes to Consolidated Financial Statements
34




BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings$$76 
Accounts payable273 243 
Accrued expenses178 152 
Payables to affiliates39 66 
Customer deposits115 120 
Regulatory liabilities39 33 
Other76 63 
Total current liabilities720 753 
Long-term debt3,664 3,270 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits1,504 1,396 
Asset retirement obligations24 22 
Non-pension postretirement benefits obligations190 199 
Regulatory liabilities1,121 1,195 
Other93 116 
Total deferred credits and other liabilities2,932 2,928 
Total liabilities7,316 6,951 
Commitments and contingencies
Shareholder's equity
Common stock2,191 1,907 
Retained earnings1,863 1,776 
Total shareholder's equity4,054 3,683 
Total liabilities and shareholder's equity$11,370 $10,634 

See the Combined Notes to Consolidated Financial Statements
35




BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
Balance, December 31, 2019$1,907 $1,776 $3,683 
Net income— 181 181 
Common stock dividends— (62)(62)
Balance, March 31, 2020$1,907 $1,895 $3,802 
Net income— 39 39 
Common stock dividends— (62)(62)
Contributions from parent26 — 26 
Balance, June 30, 2020$1,933 $1,872 $3,805 
Net income— 53 53 
Common stock dividends— (62)(62)
Contributions from parent258 — 258 
Balance, September 30, 2020$2,191 $1,863 $4,054 
Nine Months Ended September 30, 2019
(In millions)Common
Stock
Retained
Earnings
Total
Shareholder's
Equity
Balance, December 31, 2018$1,714 $1,640 $3,354 
Net income— 160 160 
Common stock dividends— (56)(56)
Balance, March 31, 2019$1,714 $1,744 $3,458 
Net income— 45 45 
Common stock dividends— (55)(55)
Balance, June 30, 2019$1,714 $1,734 $3,448 
Net income— 55 55 
Common stock dividends— (57)(57)
Contributions from parent104 — 104 
Balance, September 30, 2019$1,818 $1,732 $3,550 
See the Combined Notes to Consolidated Financial Statements
36





PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$1,308 $1,365 $3,440 $3,570 
Natural gas operating revenues23 20 116 115 
Revenues from alternative revenue programs31 (9)(15)
Operating revenues from affiliates13 11 
Total operating revenues1,368 1,380 3,554 3,700 
Operating expenses
Purchased power393 428 979 1,086 
Purchased fuel49 51 
Purchased power from affiliates106 83 288 254 
Operating and maintenance237 254 702 706 
Operating and maintenance from affiliates38 36 111 105 
Depreciation and amortization200 193 585 562 
Taxes other than income taxes121 122 343 342 
Total operating expenses1,102 1,124 3,057 3,106 
Gain on sales of assets
Operating income266 256 499 594 
Other income and (deductions)
Interest expense, net(67)(66)(201)(197)
Other, net16 13 42 39 
Total other income and (deductions)(51)(53)(159)(158)
Income before income taxes215 203 340 436 
Income taxes(1)14 (77)25 
Equity in earnings of unconsolidated affiliate
Net income$216 $189 $418 $412 
Comprehensive income$216 $189 $418 $412 
See the Combined Notes to Consolidated Financial Statements
37




PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$418 $412 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization585 562 
Deferred income taxes and amortization of investment tax credits(99)
Other non-cash operating activities115 122 
Changes in assets and liabilities:
Accounts receivable(121)(64)
Receivables from and payables to affiliates, net(26)
Inventories(2)(36)
Accounts payable and accrued expenses57 
Income taxes(14)(11)
Pension and non-pension postretirement benefit contributions(35)(15)
Other assets and liabilities(61)(102)
Net cash flows provided by operating activities817 877 
Cash flows from investing activities
Capital expenditures(1,072)(1,006)
Other investing activities
Net cash flows used in investing activities(1,069)(1,003)
Cash flows from financing activities
Changes in short-term borrowings(208)78 
Repayments of short-term borrowings with maturities greater than 90 days(125)
Issuance of long-term debt601 410 
Retirement of long-term debt(119)(130)
Changes in Exelon intercompany money pool10 
Distributions to member(451)(429)
Contributions from member493 283 
Other financing activities(10)(5)
Net cash flows provided by financing activities315 92 
Increase (decrease) in cash, cash equivalents, and restricted cash63 (34)
Cash, cash equivalents, and restricted cash at beginning of period181 186 
Cash, cash equivalents, and restricted cash at end of period$244 $152 
Supplemental cash flow information
Decrease in capital expenditures not paid$(5)$(62)
See the Combined Notes to Consolidated Financial Statements
38




PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$196 $131 
Restricted cash and cash equivalents38 36 
Accounts receivable
Customer accounts receivable584516
Customer allowance for credit losses(89)(37)
Customer accounts receivable, net495 479 
Other accounts receivable244190
Other allowance for credit losses(32)(16)
Other accounts receivable, net212 174 
Receivables from affiliates
Inventories, net
Fossil fuel
Materials and supplies194 190 
Regulatory assets440 412 
Other52 49 
Total current assets1,634 1,480 
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,692 and $1,213 as of September 30, 2020 and December 31, 2019, respectively)14,954 14,296 
Deferred debits and other assets
Regulatory assets1,972 2,061 
Investments138 135 
Goodwill4,005 4,005 
Prepaid pension asset381 406 
Deferred income taxes10 13 
Other300 323 
Total deferred debits and other assets6,806 6,943 
Total assets(a)
$23,394 $22,719 
See the Combined Notes to Consolidated Financial Statements
39




PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Short-term borrowings$$208 
Long-term debt due within one year349 103 
Accounts payable507 462 
Accrued expenses279 296 
Payables to affiliates71 98 
Borrowings from Exelon intercompany money pool21 12 
Customer deposits111 117 
Regulatory liabilities143 70 
Unamortized energy contract liabilities98 115 
Other144 131 
Total current liabilities1,723 1,612 
Long-term debt6,671 6,460 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits2,409 2,278 
Asset retirement obligations58 57 
Non-pension postretirement benefit obligations85 93 
Regulatory liabilities1,471 1,707 
Unamortized energy contract liabilities258 327 
Other650 577 
Total deferred credits and other liabilities4,931 5,039 
Total liabilities(a)
13,325 13,111 
Commitments and contingencies
Member's equity
Membership interest10,112 9,618 
Undistributed losses(43)(10)
Total member's equity10,069 9,608 
Total liabilities and member's equity$23,394 $22,719 
__________
(a)PHI’s consolidated total assets include $20 million and $20 million at September 30, 2020 and December 31, 2019, respectively, of PHI's consolidated VIE that can only be used to settle the liabilities of the VIE. PHI’s consolidated total liabilities include $32 million and $44 million at September 30, 2020 and December 31, 2019, respectively, of PHI's consolidated VIE for which the VIE creditors do not have recourse to PHI. See Note 16 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
40




PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Membership InterestUndistributed Earnings (Losses)Member's Equity
Balance, December 31, 2019$9,618 $(10)$9,608 
Net income— 108 108 
Distributions to member— (134)(134)
Contributions from member144 — 144 
Balance, March 31, 2020$9,762 $(36)$9,726 
Net income— 94 94 
Distributions to member— (134)(134)
Contributions from member215 — 215 
Balance, June 30, 2020$9,977 $(76)$9,901 
Net income— 216 216 
Distributions to member— (183)(183)
Contributions from member135 — 135 
Balance, September 30, 2020$10,112 $(43)$10,069 
Nine Months Ended September 30, 2019
(In millions)Membership InterestUndistributed Earnings (Losses)Member's Equity
Balance, December 31, 2018$9,220 $62 $9,282 
Net income— 117 117 
Distributions to member— (128)(128)
Contributions from member19 — 19 
Balance, March 31, 2019$9,239 $51 $9,290 
Net income— 106 106 
Distributions to member— (88)(88)
Contributions from member264 — 264 
Balance, June 30, 2019$9,503 $69 $9,572 
Net income— 189 189 
Distributions to member— (213)(213)
Balance, September 30, 2019$9,503 $45 $9,548 
See the Combined Notes to Consolidated Financial Statements
41





POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$590 $643 $1,624 $1,733 
Revenues from alternative revenue programs18 (3)20 10 
Operating revenues from affiliates
Total operating revenues611 642 1,650 1,748 
Operating expenses
Purchased power83 116 248 325 
Purchased power from affiliate80 65 219 188 
Operating and maintenance57 85 184 208 
Operating and maintenance from affiliates49 50 152 156 
Depreciation and amortization96 95 282 281 
Taxes other than income taxes100 104 279 286 
Total operating expenses465 515 1,364 1,444 
Operating income146 127 286 304 
Other income and (deductions)
Interest expense, net(35)(33)(103)(100)
Other, net10 28 22 
Total other income and (deductions)(25)(24)(75)(78)
Income before income taxes121 103 211 226 
Income taxes(16)
Net income$118 $98 $227 $217 
Comprehensive income$118 $98 $227 $217 
See the Combined Notes to Consolidated Financial Statements
42




POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$227 $217 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization282 281 
Deferred income taxes and amortization of investment tax credits(36)12 
Other non-cash operating activities43 
Changes in assets and liabilities:
Accounts receivable(61)(49)
Receivables from and payables to affiliates, net(23)
Inventories(23)
Accounts payable and accrued expenses36 (12)
Income taxes(11)(23)
Pension and non-pension postretirement benefit contributions(8)(10)
Other assets and liabilities15 (55)
Net cash flows provided by operating activities429 385 
Cash flows from investing activities
Capital expenditures(512)(455)
Changes in PHI intercompany money pool(117)
Other investing activities(3)
Net cash flows used in investing activities(632)(453)
Cash flows from financing activities
Changes in short-term borrowings(82)(28)
Issuance of long-term debt300 260 
Retirement of long-term debt(2)(118)
Dividends paid on common stock(174)(173)
Contributions from parent262 129 
Other financing activities(6)(3)
Net cash flows provided by financing activities298 67 
Increase (decrease) in cash, cash equivalents, and restricted cash95 (1)
Cash, cash equivalents, and restricted cash at beginning of period63 53 
Cash, cash equivalents, and restricted cash at end of period$158 $52 
Supplemental cash flow information
Decrease in capital expenditures not paid$(23)$(7)
See the Combined Notes to Consolidated Financial Statements
43




POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$125 $30 
Restricted cash and cash equivalents33 33 
Accounts receivable
Customer accounts receivable278244
Customer allowance for credit losses(35)(13)
Customer accounts receivable, net243 231 
Other accounts receivable12998
Other allowance for credit losses(13)(7)
Other accounts receivable, net116 91 
Receivable from PHI intercompany money pool117 
Inventories, net110 112 
Regulatory assets200 188 
Other13 11 
Total current assets957 696 
Property, plant, and equipment (net of accumulated depreciation and amortization of $3,651 and $3,517 as of September 30, 2020 and December 31, 2019, respectively)7,236 6,909 
Deferred debits and other assets
Regulatory assets573 584 
Investments113 110 
Prepaid pension asset287 296 
Other61 66 
Total deferred debits and other assets1,034 1,056 
Total assets$9,227 $8,661 
See the Combined Notes to Consolidated Financial Statements
44




POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings$$82 
Long-term debt due within one year
Accounts payable206 195 
Accrued expenses144 156 
Payables to affiliates43 66 
Customer deposits54 57 
Regulatory liabilities49 
Merger related obligation39 39 
Current portion of DC PLUG obligation30 30 
Other29 22 
Total current liabilities597 657 
Long-term debt3,161 2,862 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits1,194 1,131 
Asset retirement obligations38 41 
Non-pension postretirement benefit obligations14 20 
Regulatory liabilities647 746 
Other354 297 
Total deferred credits and other liabilities2,247 2,235 
Total liabilities6,005 5,754 
Commitments and contingencies
Shareholder's equity
Common stock2,058 1,796 
Retained earnings1,164 1,111 
Total shareholder's equity3,222 2,907 
Total liabilities and shareholder's equity$9,227 $8,661 
See the Combined Notes to Consolidated Financial Statements
45




POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2019$1,796 $1,111 $2,907 
Net income— 52 52 
Common stock dividends— (28)(28)
Contributions from parent137 — 137 
Balance, March 31, 2020$1,933 $1,135 $3,068 
Net income— 57 57 
Common stock dividends— (73)(73)
Balance, June 30, 2020$1,933 $1,119 $3,052 
Net income— 118 118 
Common stock dividends— (73)(73)
Contributions from parent125 — 125 
Balance, September 30, 2020$2,058 $1,164 $3,222 

Nine Months Ended September 30, 2019
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2018$1,636 $1,104 $2,740 
Net income— 55 55 
Common stock dividends— (24)(24)
Contributions from parent14 — 14 
Balance, March 31, 2019$1,650 $1,135 $2,785 
Net income— 64 64 
Common stock dividends— (48)(48)
Contributions from parent115 — 115 
Balance, June 30, 2019$1,765 $1,151 $2,916 
Net income— 98 98 
Common stock dividends— (101)(101)
Balance, September 30, 2019$1,765 $1,148 $2,913 

See the Combined Notes to Consolidated Financial Statements
46





DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$303 $304 $846 $872 
Natural gas operating revenues23 20 116 116 
Revenues from alternative revenue programs(6)(15)(6)
Operating revenues from affiliates
Total operating revenues337 319 954 987 
Operating expenses
Purchased power103 105 270 298 
Purchased fuel49 51 
Purchased power from affiliates21 14 60 50 
Operating and maintenance64 43 160 127 
Operating and maintenance from affiliates37 37 112 113 
Depreciation and amortization48 46 143 138 
Taxes other than income taxes16 15 49 43 
Total operating expenses296 268 843 820 
Operating income41 51 111 167 
Other income and (deductions)
Interest expense, net(15)(15)(47)(45)
Other, net10 
Total other income and (deductions)(13)(13)(40)(35)
Income before income taxes28 38 71 132 
Income taxes(20)16 
Net income$27 $33 $91 $116 
Comprehensive income$27 $33 $91 $116 
See the Combined Notes to Consolidated Financial Statements
47




DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$91 $116 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization143 138 
Deferred income taxes and amortization of investment tax credits(20)(2)
Other non-cash operating activities47 21 
Changes in assets and liabilities:
Accounts receivable29 
Receivables from and payables to affiliates, net(5)(7)
Inventories(3)(7)
Accounts payable and accrued expenses21 
Income taxes(12)11 
Pension and non-pension postretirement benefit contributions(1)(1)
Other assets and liabilities(25)(22)
Net cash flows provided by operating activities239 279 
Cash flows from investing activities
Capital expenditures(278)(245)
Other investing activities(3)
Net cash flows used in investing activities(281)(244)
Cash flows from financing activities
Changes in short-term borrowings(56)57 
Issuance of long-term debt178 
Retirement of long-term debt(79)
Dividends paid on common stock(99)(105)
Contributions from parent112 
Other financing activities(1)
Net cash flows provided by (used in) financing activities55 (48)
Increase (decrease) in cash, cash equivalents, and restricted cash13 (13)
Cash, cash equivalents, and restricted cash at beginning of period13 24 
Cash, cash equivalents, and restricted cash at end of period$26 $11 
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid$$(13)
See the Combined Notes to Consolidated Financial Statements
48




DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$26 $13 
Accounts receivable
Customer accounts receivable141152
Customer allowance for credit losses(22)(11)
Customer accounts receivable, net119 141 
Other accounts receivable5342
Other allowance for credit losses(8)(4)
Other accounts receivable, net45 38 
Inventories, net
Fossil fuel
Materials and supplies49 44 
Prepaid utility taxes17 18 
Regulatory assets51 52 
Renewable energy credits
Other
Total current assets321 325 
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,502 and $1,425 as of September 30, 2020 and December 31, 2019, respectively)
4,209 4,035 
Deferred debits and other assets
Regulatory assets227 222 
Goodwill
Prepaid pension asset164 171 
Other63 69 
Total deferred debits and other assets462 470 
Total assets$4,992 $4,830 
See the Combined Notes to Consolidated Financial Statements
49




DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings$$56 
Long-term debt due within one year81 80 
Accounts payable126 112 
Accrued expenses50 46 
Payables to affiliates23 32 
Customer deposits34 36 
Regulatory liabilities46 37 
Other19 15 
Total current liabilities379 414 
Long-term debt1,595 1,487 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits689 655 
Asset retirement obligations14 12 
Non-pension postretirement benefits obligations14 16 
Regulatory liabilities516 574 
Other101 92 
Total deferred credits and other liabilities1,334 1,349 
Total liabilities3,308 3,250 
Commitments and contingencies
Shareholder's equity
Common stock1,089 977 
Retained earnings595 603 
Total shareholder's equity1,684 1,580 
Total liabilities and shareholder's equity$4,992 $4,830 
See the Combined Notes to Consolidated Financial Statements
50




DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2019$977 $603 $1,580 
Net income— 45 45 
Common stock dividends— (52)(52)
Contributions from parent— 
Balance, March 31, 2020$983 $596 $1,579 
Net income— 19 19 
Common stock dividends— (14)(14)
Contributions from parent100 — 100 
Balance, June 30, 2020$1,083 $601 $1,684 
Net income— 27 27 
Common stock dividends— (33)(33)
Contributions from parent— 
Balance, September 30, 2020$1,089 $595 $1,684 

Nine Months Ended September 30, 2019
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2018$914 $595 $1,509 
Net income— 53 53 
Common stock dividends— (41)(41)
Balance, March 31, 2019$914 $607 $1,521 
Net income— 30 30 
Common stock dividends— (29)(29)
Balance, June 30, 2019$914 $608 $1,522 
Net income— 33 33 
Common stock dividends— (35)(35)
Balance, September 30, 2019$914 $606 $1,520 

See the Combined Notes to Consolidated Financial Statements
51





ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)2020201920202019
Operating revenues
Electric operating revenues$414 $417 $969 $964 
Revenues from alternative revenue programs(20)
Operating revenues from affiliates
Total operating revenues420 419 952 966 
Operating expenses
Purchased power207 207 460 463 
Purchased power from affiliate16 
Operating and maintenance45 54 140 142 
Operating and maintenance from affiliates32 32 98 99 
Depreciation and amortization48 43 134 114 
Taxes other than income taxes
Total operating expenses338 340 847 838 
Gain on sale of assets
Operating income82 79 107 128 
Other income and (deductions)
Interest expense, net(15)(15)(45)(44)
Other, net
Total other income and (deductions)(14)(14)(40)(39)
Income before income taxes68 65 67 89 
Income taxes(7)(39)
Net income$75 $63 $106 $87 
Comprehensive income$75 $63 $106 $87 
See the Combined Notes to Consolidated Financial Statements
52




ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(In millions)20202019
Cash flows from operating activities
Net income$106 $87 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization134 114 
Deferred income taxes and amortization of investment tax credits(40)
Other non-cash operating activities34 21 
Changes in assets and liabilities:
Accounts receivable(62)(44)
Receivables from and payables to affiliates, net(4)
Inventories(4)
Accounts payable and accrued expenses16 27 
Income taxes
Pension and non-pension postretirement benefit contributions(3)
Other assets and liabilities(53)(18)
Net cash flows provided by operating activities138 186 
Cash flows from investing activities
Capital expenditures(281)(300)
Other investing activities
Net cash flows used in investing activities(276)(300)
Cash flows from financing activities
Changes in short-term borrowings(70)49 
Repayments of short-term borrowings with maturities greater than 90 days(125)
Issuance of long-term debt123 150 
Retirement of long-term debt(38)(13)
Changes in PHI intercompany money pool117 
Dividends paid on common stock(111)(100)
Contributions from parent117 155 
Other financing activities(1)(1)
Net cash flows provided by financing activities137 115 
(Decrease) increase in cash, cash equivalents, and restricted cash(1)
Cash, cash equivalents, and restricted cash at beginning of period28 30 
Cash, cash equivalents, and restricted cash at end of period$27 $31 
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid$$(37)
See the Combined Notes to Consolidated Financial Statements
53




ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
ASSETS
Current assets
Cash and cash equivalents$13 $12 
Restricted cash and cash equivalents
Accounts receivable
Customer accounts receivable165121
Customer allowance for credit losses(32)(13)
Customer accounts receivable, net133 108 
Other accounts receivable6553
Other allowance for credit losses(11)(5)
Other accounts receivable, net54 48 
Receivables from affiliates
Inventories, net34 34 
Prepaid utility taxes
Regulatory assets88 57 
Other
Total current assets340 270 
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,276 and $1,210 as of September 30, 2020 and December 31, 2019, respectively)
3,372 3,190 
Deferred debits and other assets
Regulatory assets395 368 
Prepaid pension asset44 52 
Other50 53 
Total deferred debits and other assets489 473 
Total assets(a)
$4,201 $3,933 
See the Combined Notes to Consolidated Financial Statements
54




ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)September 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings$$70 
Long-term debt due within one year261 20 
Accounts payable168 144 
Accrued expenses42 42 
Payables to affiliates24 25 
Borrowings from PHI intercompany money pool117 
Customer deposits23 25 
Regulatory liabilities48 25 
Other10 
Total current liabilities693 360 
Long-term debt1,156 1,307 
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits617 577 
Non-pension postretirement benefit obligations16 17 
Regulatory liabilities279 357 
Other52 39 
Total deferred credits and other liabilities964 990 
Total liabilities(a)
2,813 2,657 
Commitments and contingencies
Shareholder's equity
Common stock1,271 1,154 
Retained earnings117 122 
Total shareholder's equity1,388 1,276 
Total liabilities and shareholder's equity$4,201 $3,933 
__________
(a)ACE’s consolidated total assets include $14 million and $17 million at September 30, 2020 and December 31, 2019, respectively, of ACE's consolidated VIE that can only be used to settle the liabilities of the VIE. ACE’s consolidated total liabilities include $26 million and $41 million at September 30, 2020 and December 31, 2019, respectively, of ACE's consolidated VIE for which the VIE creditors do not have recourse to ACE. See Note 16 — Variable Interest Entities for additional information.
See the Combined Notes to Consolidated Financial Statements
55




ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
Nine Months Ended September 30, 2020
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2019$1,154 $122 $1,276 
Net income— 13 13 
Common stock dividends— (23)(23)
Contributions from parent— 
Balance, March 31, 2020$1,155 $112 $1,267 
Net income— 18 18 
Common stock dividends— (12)(12)
Contributions from parent115 — 115 
Balance, June 30, 2020$1,270 $118 $1,388 
Net income— 75 75 
Common stock dividends— (76)(76)
Contributions from parent— 
Balance, September 30, 2020$1,271 $117 $1,388 

Nine Months Ended September 30, 2019
(In millions)Common StockRetained EarningsTotal Shareholder's Equity
Balance, December 31, 2018$979 $147 $1,126 
Net income— 10 10 
Common stock dividends— (12)(12)
Contributions from parent— 
Balance, March 31, 2019$984 $145 $1,129 
Net income— 14 14 
Common stock dividends— (12)(12)
Contributions from parent150 — 150 
Balance, June 30, 2019$1,134 $147 $1,281 
Net income— 63 63 
Common stock dividends— (76)(76)
Balance, September 30, 2019$1,134 $134 $1,268 

See the Combined Notes to Consolidated Financial Statements
56




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies

1. Significant Accounting Policies (All Registrants)
Description of Business (All Registrants)
Exelon is a utility services holding company engaged in the generation, delivery and marketing of energy through Generation and the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.
Name of Registrant  Business  Service Territories
Exelon Generation
Company, LLC
Generation, physical delivery and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy, and other energy-related products and services.Five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions
Commonwealth Edison CompanyPurchase and regulated retail sale of electricityNorthern Illinois, including the City of Chicago
Transmission and distribution of electricity to retail customers
PECO Energy CompanyPurchase and regulated retail sale of electricity and natural gasSoutheastern Pennsylvania, including the City of Philadelphia (electricity)
Transmission and distribution of electricity and distribution of natural gas to retail customersPennsylvania counties surrounding the City of Philadelphia (natural gas)
Baltimore Gas and Electric CompanyPurchase and regulated retail sale of electricity and natural gasCentral Maryland, including the City of Baltimore (electricity and natural gas)
Transmission and distribution of electricity and distribution of natural gas to retail customers
Pepco Holdings LLCUtility services holding company engaged, through its reportable segments Pepco, DPL, and ACEService Territories of Pepco, DPL, and ACE
Potomac Electric 
Power Company
  Purchase and regulated retail sale of electricity  District of Columbia, and major portions of Montgomery and Prince George’s Counties, Maryland
Transmission and distribution of electricity to retail customers
Delmarva Power &
Light Company
Purchase and regulated retail sale of electricity and natural gasPortions of Delaware and Maryland (electricity)
Transmission and distribution of electricity and distribution of natural gas to retail customersPortions of New Castle County, Delaware (natural gas)
Atlantic City Electric CompanyPurchase and regulated retail sale of electricityPortions of Southern New Jersey
Transmission and distribution of electricity to retail customers
Basis of Presentation (All Registrants)
Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated.
Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology, and supply management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies. The costs of BSC and PHISCO are directly charged or allocated to the applicable subsidiaries. The results of Exelon’s corporate operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
The accompanying consolidated financial statements as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 are unaudited but, in the opinion of the management of each Registrant include all adjustments that are considered necessary for a fair statement of the Registrants’ respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The December 31, 2019 Consolidated Balance Sheets were derived from audited financial statements. Financial results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2020. These Combined
57




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies
Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
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 and imposed travel limitations on employees. In addition, the Registrants have updated their existing business continuity plans.

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. Management assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, our allowance for credit losses and the carrying value of our goodwill and other long-lived assets, in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of September 30, 2020 and through the date of this report. The Registrants' future assessment of our current expectations 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.
New Accounting Standards (All Registrants)
New Accounting Standards Adopted as of January 1, 2020: The following new authoritative accounting guidance issued by the FASB was adopted as of January 1, 2020 and was reflected by the Registrants in their consolidated financial statements beginning in the first quarter of 2020.
Impairment of Financial Instruments (Issued June 2016). Provides for a new Current Expected Credit Loss (CECL) impairment model for specified financial instruments including loans, trade receivables, debt securities classified as held-to-maturity investments, and net investments in leases recognized by a lessor. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. The standard was effective January 1, 2020 and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This standard was primarily applicable to Generation's and the Utility Registrants' Customer accounts receivables balances. This guidance did not have a significant impact on the Registrants’ consolidated financial statements.
Goodwill Impairment (Issued January 2017). Simplifies the accounting for goodwill impairment by removing Step 2 of the current test, which requires calculation of a hypothetical purchase price allocation. Under the revised guidance, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill (currently Step 1 of the two-step impairment test). Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The standard was effective January 1, 2020 and must be applied on a prospective basis. Exelon, Generation, ComEd, PHI, and DPL will apply the new guidance for their goodwill impairment assessments in 2020 and do not expect the updated guidance to have a material impact to their financial statements.
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.

58




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies
The allowance for credit losses for Generation’s retail customers is based on accounts receivable aging historical experience coupled with specific identification through a credit monitoring process, which considers current conditions and forward-looking information such as industry trends, macroeconomic factors, changes in the regulatory environment, external credit ratings, publicly available news, payment status, payment history, and the exercise of collateral calls. The allowance for credit losses for Generation wholesale customers is developed using a credit monitoring process, similar to that used for retail customers. When a wholesale customer’s risk characteristics are no longer aligned with the pooled population, Generation uses specific identification to develop an allowance for credit losses. Adjustments to the allowance for credit losses are recorded in Operating and maintenance expense on Generation’s Consolidated Statements of Operations and Comprehensive Income.

The allowance for credit losses for the Utility Registrants’ customers 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 Utility Registrants' Consolidated Statements of Operations and Comprehensive Income and Regulatory assets on ComEd, BGE, Pepco, DPL, and ACE’s Consolidated Balance Sheets. See Note 3 - Regulatory Matters of the 2019 Form 10-K for additional information regarding the regulatory recovery of credit losses on customer accounts receivable at ComEd, BGE, Pepco, DPL, and ACE.

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.

2. Regulatory Matters (All Registrants)
As discussed in Note 3 — Regulatory Matters of the Exelon 2019 Form 10-K, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The following discusses developments in 2020 and updates to the 2019 Form 10-K.
Utility Regulatory Matters (Exelon and the Utility Registrants)
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2020.
Completed Distribution Base Rate Case Proceedings
Registrant/JurisdictionFiling DateRequested Revenue Requirement (Decrease) IncreaseApproved Revenue Requirement (Decrease) IncreaseApproved ROEApproval DateRate Effective Date
ComEd - Illinois (Electric)(a)
April 8, 2019$(6)$(17)8.91 %December 4, 2019January 1, 2020
DPL - Maryland (Electric)December 5, 2019 (amended April 23, 2020)17 12 9.60 %July 14, 2020July 16, 2020
__________
(a)Reflects an increase of $51 million for the initial revenue requirement for 2019 and a decrease of $68 million related to the annual reconciliation for 2018. The revenue requirement for 2019 and annual reconciliation for 2018 provides for a weighted average debt and equity return on distribution rate base of 6.51%, inclusive of an allowed ROE of 8.91%, reflecting the average rate on 30-year treasury notes plus 580 basis points.
Pending Distribution Base Rate Case Proceedings
59




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
Registrant/JurisdictionFiling DateRequested Revenue Requirement (Decrease) IncreaseRequested ROEExpected Approval Timing
ComEd - Illinois (Electric)(a)
April 16, 2020$(11)8.38 %Fourth quarter of 2020
PECO - Pennsylvania (Natural Gas)September 30, 202069 10.95 %Second quarter of 2021
BGE - Maryland (Electric and Natural Gas)(b)
May 15, 2020
(amended September 11, 2020)
228 10.1 %Fourth quarter of 2020
Pepco - District of Columbia (Electric)(c)
May 30, 2019 (amended June 1, 2020)136 9.7 %First quarter of 2021
Pepco - Maryland (Electric)(d)
October 26, 2020110 10.2 %Second quarter of 2021
DPL - Delaware (Natural Gas)(e)
February 21, 2020 (amended October 9, 2020)10.3 %First quarter of 2021
DPL - Delaware (Electric)(f)
March 6, 2020 (amended October 26, 2020)24 10.3 %Second quarter of 2021
__________
(a)Reflects an increase of $51 million for the initial revenue requirement for 2020 and a decrease of $62 million related to the annual reconciliation for 2019. The revenue requirement for 2020 and annual reconciliation for 2019 provides for a weighted average debt and equity return on distribution rate base of 6.28%, inclusive of an allowed ROE of 8.38%, reflecting the average rate on 30-year treasury notes plus 580 basis points.
(b)Reflects a three-year cumulative multi-year plan for 2021 through 2023 and total requested revenue requirement increases in 2023 of $137 million related to electric distribution and $91 million related to natural gas distribution to recover capital investments made in late 2019 and planned capital investments from 2020 to 2023.
(c)Pepco filed the multi-year plan enhanced proposal as an alternative to address the impacts of COVID-19. Reflects a three-year cumulative multi-year plan for 2020 through 2022 and requested revenue requirement increases of $73 million in 2022 and $63 million in 2023, to recover capital investments made during 2018 through 2020 and planned capital investments through the end of 2022.
(d)Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024 and total requested revenue requirement increases of $56 million effective April 1, 2023 and $54 million effective April 1, 2024 to recover capital investments made in 2019 and 2020 and planned capital investments through March 31, 2024.
(e)The rates went into effect on September 21, 2020, subject to refund.
(f)The rates went into effect on October 6, 2020, subject to refund.
Transmission Formula Rates
Transmission Formula Rate (Exelon and the Utility Registrants). ComEd’s, PECO's, BGE’s, Pepco's, DPL's, and ACE's 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, BGE, DPL, and ACE is based on prior year actual costs and current year projected capital additions (initial year revenue requirement). The annual update for PECO is based on prior year actual costs and current year projected capital additions, accumulated depreciation, and accumulated deferred income taxes. The annual update for Pepco is based on prior year actual costs and current year projected capital additions, accumulated depreciation, depreciation and amortization expense, and accumulated deferred income taxes. The update for ComEd, BGE, DPL, and ACE 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
60




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
reconciliation). The update for PECO and Pepco also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).
For 2020, the following total increases/(decreases) were included in ComEd’s, PECO's, BGE’s, Pepco's, DPL's, and ACE's electric transmission formula rate filings:
Registrant(a)
Initial Revenue Requirement Increase (Decrease)Annual Reconciliation Decrease
Total Revenue Requirement Increase (Decrease)(c)
Allowed Return on Rate Base(d)
Allowed ROE(e)
ComEd$18 $(4)$14 8.17 %11.50 %
PECO(b)
(28)(23)7.47 %10.35 %
BGE16 (3)7.26 %10.50 %
Pepco(46)(44)7.81 %10.50 %
DPL(4)(40)(44)7.20 %10.50 %
ACE(25)(20)7.40 %10.50 %
__________
(a)All rates are effective June 2020, subject to review by interested parties, which is anticipated to be completed by the fourth quarter of 2020 or first quarter of 2021 for ComEd, BGE, Pepco, DPL, and ACE and second quarter of 2021 for PECO.
(b)PECO posted a revised filing to the PJM website on July 17, 2020 reflecting updates to the formula rate based on the FERC order dated July 9, 2020.
(c)The decrease in PECO's transmission revenue requirement relates to refunds from December 1, 2017, in accordance with the settlement agreement dated July 22, 2019. The increase in BGE's transmission revenue requirement includes a $9 million reduction related to a FERC-approved dedicated facilities charge to recover the costs of providing transmission service to specifically designated load by BGE. ComEd, BGE, Pepco, DPL, and ACE’s transmission revenue requirement include a decrease related to the April 24, 2020 settlement agreement related to excess deferred income taxes. Refer to Transmission-Related Income Tax Regulatory Assets below for additional information.
(d)Represents the weighted average debt and equity return on transmission rate bases.
(e)As part of the FERC-approved settlements of ComEd’s 2007 and PECO's 2017 transmission rate cases, the rate of return on common equity is 11.50% and 10.35%, respectively, inclusive of a 50-basis-point incentive adder for being a member of a RTO, and the common equity component of the ratio used to calculate the weighted average debt and equity return for the transmission formula rate is currently capped at 55% and 55.75%, respectively. As part of the FERC-approved settlement of the ROE complaint against BGE, Pepco, DPL, and ACE, the rate of return on common equity is 10.50%, inclusive of a 50-basis-point incentive adder for being a member of a RTO.
Other State Regulatory Matters
Illinois Regulatory Matters
Energy Efficiency Formula Rate (Exelon and ComEd). ComEd filed its annual energy efficiency formula rate update with the ICC on May 21, 2020. The filing establishes the revenue requirement used to set the rates that will take effect in January 2021 after the ICC’s review and approval. The revenue requirement requested is based on a reconciliation of the 2019 actual costs plus projected 2020 and 2021 expenditures.
Initial Revenue Requirement IncreaseAnnual Reconciliation IncreaseTotal Revenue Requirement IncreaseRequested Return on Rate BaseRequested ROE
$45 $$48 (a)6.28 %8.38 %
__________
(a)The requested revenue requirement increase provides for a weighted average debt and equity return on rate base of 6.28% inclusive of an allowed ROE of 8.38%. The ROE reflects the average rate on 30-year treasury notes plus 580 basis points. The ROE applicable to the 2019 reconciliation year is 8.96% and the return on rate base is 6.56%, which includes a performance adjustment that can either increase or decrease the ROE.
61




COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
New Jersey Regulatory Matters
Advanced Metering Infrastructure Filing (Exelon, PHI, and ACE). On August 26, 2020, ACE filed an application with the NJBPU as was required seeking approval to deploy a smart energy network in alignment with New Jersey’s Energy Master Plan and Clean Energy Act. The proposal consists 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. ACE is seeking authority to recover these estimated investments through a combination of the ACE Infrastructure Investment Program rider mechanism and future distribution base rates. ACE currently expects a decision in this matter in the third quarter of 2021 but cannot predict if the NJBPU will approve the application as filed.
Other Federal Regulatory Matters
Transmission-Related Income Tax Regulatory Assets (Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE). On December 13, 2016 (and as amended on March 13, 2017), BGE filed with FERC to begin recovering certain existing and future transmission-related income tax regulatory assets through its transmission formula rate. BGE’s existing regulatory assets included (1) amounts that, if BGE’s transmission formula rate provided for recovery, would have been previously amortized and (2) amounts that would be amortized and recovered prospectively. On November 16, 2017, FERC issued an order rejecting BGE’s proposed revisions to its transmission formula rate to recover these transmission-related income tax regulatory assets. In the fourth quarter of 2017, ComEd, BGE, Pepco, DPL, and ACE fully impaired their associated transmission-related income tax regulatory asset for the portion of the income tax regulatory asset that would have been previously amortized.
On February 23, 2018 (as amended on July 9, 2018), ComEd, Pepco, DPL, and ACE each filed with FERC to revise their transmission formula rate mechanisms to permit recovery of transmission-related income tax regulatory assets, including those amounts that would have been previously amortized and recovered through rates had the transmission formula rate provided for such recovery.
On September 7, 2018, FERC issued orders rejecting 1) BGE's rehearing request of FERC's November 16, 2017 order; and 2) the February 23, 2018 (as amended on July 9, 2018) filing by ComEd, Pepco, DPL, and ACE for similar recovery.
On November 2, 2018, BGE filed an appeal of FERC’s September 7, 2018 order to the Court of Appeals for the D.C. Circuit. On March 27, 2020, the Court of Appeals denied BGE’s November 2, 2018 appeal.
On October 1, 2018, ComEd, BGE, Pepco, DPL, and ACE submitted filings to recover only ongoing non-TCJA amortization amounts and credit TCJA transmission-related income tax regulatory liabilities to customers for the prospective period starting on October 1, 2018. On April 26, 2019, FERC issued an order accepting ComEd’s, BGE’s, Pepco’s, DPL’s, and ACE’s October 1, 2018 filings, effective October 1, 2018, subject to refund and established hearing and settlement judge procedures. On April 24, 2020, ComEd, BGE, Pepco, DPL, ACE, and other parties filed a settlement agreement with FERC, which FERC approved on September 24, 2020. The settlement agreement provides for the recovery of ongoing transmission-related income tax regulatory assets and establishes the amount and amortization period for excess deferred income taxes resulting from TCJA. The settlement resulted in a reduction to Operating revenues and an offsetting reduction to Income tax expense in the second quarter of 2020.
Regulatory Assets and Liabilities
The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2019, unless noted below. See Note 3 — Regulatory Matters of the Exelon 2019 Form 10-K for additional information on the specific regulatory assets and liabilities.
ComEd. Regulatory assets increased $255 million primarily due to an increase of $145 million in the Energy Efficiency Costs regulatory asset, $58 million in the Electric Distribution Formula Rate Significant One-time Events regulatory asset, $47 million in the ARO regulatory asset, and $18 million in the COVID-19 regulatory asset recorded in 2020, partially offset by a decrease of $37 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset. Refer to COVID-19 disclosure below for additional information.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
PECO. Regulatory assets increased $135 million primarily due to an increase of $119 million in the Deferred Income Taxes regulatory asset and $20 million in new COVID-19 regulatory asset recorded in the third quarter of 2020. Refer to COVID-19 disclosure below for additional information.
BGE. Regulatory liabilities decreased $68 million primarily due to a decrease of $73 million in the Deferred Income Taxes regulatory liability.
Pepco. Regulatory liabilities decreased $58 million primarily due to a decrease of $99 million in the Deferred Income Taxes regulatory liability, partially offset by a $24 million increase in the Transmission FERC Formula Rate regulatory liability, and $24 million in the Electric Energy and Natural Gas Costs regulatory liability.
DPL. Regulatory liabilities decreased $49 million primarily due to a decrease of $54 million in the Deferred Income Taxes regulatory liability, $4 million in the Removal Costs regulatory liability, and $3 million in the Electric Energy and Natural Gas Costs regulatory liability, partially offset by a $16 million increase in the Transmission FERC Formula Rate regulatory liability.
ACE. Regulatory assets increased $58 million primarily due to an increase of $29 million in the Deferred Storm Costs regulatory asset, $19 million in the Uncollectible Deferral regulatory asset, and $17 million in the Electric Energy Costs regulatory asset, partially offset by a decrease of $9 million in the Securitized Stranded Costs regulatory asset. Regulatory liabilities decreased $55 million primarily due to a decrease of $80 million in the Deferred Income Taxes regulatory liability, partially offset by a $13 million increase in Transmission FERC Formula Rate regulatory liability, and $9 million in Stranded Costs regulatory liability.
COVID-19 (Exelon and the Utility Registrants). Starting in March of 2020, the Utility Registrants temporarily suspended customer disconnections for non-payment and temporarily ceased new late payment fees for all customers and restored service to customers upon request who were disconnected in the last twelve months. The duration and extent of these measures varies by jurisdiction. While these measures are no longer in place for some jurisdictions, they are expected to continue through the first quarter of 2021 in other jurisdictions. Typically, the Utility Registrants recover credit loss expense through rate required programs or distribution base rate cases. ComEd and ACE have existing mechanisms for recovery of credit loss expense. For those jurisdictions without an existing rate required program to recover credit loss expense, the Utility Registrants are pursuing strategies to recover incremental costs being incurred as a result of COVID-19:
In the period of April to July of 2020, the MDPSC, the DCPSC, the DPSC, and the NJBPU issued orders authorizing the creation of regulatory assets to track incremental COVID-19 related costs.
In May of 2020, the PAPUC issued a Secretarial Letter authorizing the creation of regulatory assets to track incremental credit loss expense related to COVID-19.
The Utility Registrants have also incurred direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of their employees.
The Utility Registrants have recorded regulatory assets for the impacts of COVID-19 reflecting primarily incremental credit losses and direct costs, partially offset by a decrease in travel costs at BGE and PHI. The Utility Registrants expect to seek recovery in upcoming distribution base rate cases. Exelon and the Utility Registrants recorded the following regulatory assets related to COVID-19:
ExelonComEdPECOBGEPHIPepcoDPLACE
September 30, 2020$60 $18 $20 $11 $11 $$$
Capitalized Ratemaking Amounts Not Recognized (Exelon and the Utility Registrants)
The following table presents authorized amounts capitalized for ratemaking purposes related to earnings on shareholders’ investment that are not recognized for financial reporting purposes in Exelon's and the Utility Registrant's Consolidated Balance Sheets. These amounts will be recognized as revenues in the related Consolidated Statements of Operations and Comprehensive Income in the periods they are billable to our customers.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
Exelon
ComEd(a)
PECO
BGE(b)
PHI
Pepco(c)
DPL(c)
ACE
September 30, 2020$54 $$$47 $$$$
December 31, 201963 53 
_________
(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its electric distribution formula rate regulatory assets.
(b)BGE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholders' investment on its AMI programs.
(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholders' investment on their respective AMI Programs and Energy Efficiency and Demand Response Programs. The earnings on energy efficiency are on Pepco DC and DPL DE programs only.
Generation Regulatory Matters (Exelon and Generation)
New Jersey Regulatory Matters
New Jersey Clean Energy Legislation. On May 23, 2018, New Jersey enacted legislation that established a ZEC program that provides compensation for nuclear plants that demonstrate to the NJBPU that they meet certain requirements, including that they make a significant contribution to air quality in the state and that their revenues are insufficient to cover their costs and risks. Under the legislation, the NJBPU will issue ZECs to qualifying nuclear power plants and the electric distribution utilities in New Jersey, including ACE, will be required to purchase those ZECs. On April 18, 2019, the NJBPU approved the award of ZECs to Salem 1 and Salem 2. Upon approval, Generation began recognizing revenue for the sale of New Jersey ZECs in the month they are generated and has recognized $56 million and $31 million for the nine months ended September 30, 2020 and 2019, respectively. On May 15, 2019, New Jersey Rate Counsel appealed the NJBPU's decision to the New Jersey Superior Court. Briefing has been completed and oral argument is scheduled for December 9, 2020. Exelon and Generation cannot predict the outcome of the appeal. See Note 6 — Early Plant Retirements for additional information related to Salem.
New York Regulatory Matters
New York Clean Energy Standard. On August 1, 2016, the NYPSC issued an order establishing the New York CES, a component of which is a Tier 3 ZEC program targeted at preserving the environmental attributes of zero-emissions nuclear-powered generating facilities that meet the criteria demonstrating public necessity as determined by the NYPSC to be Generation's FitzPatrick, Ginna, and Nine Mile Point nuclear facilities.
On November 30, 2016 (as amended on January 13, 2017), a group of parties filed a Petition in New York State court seeking to invalidate the ZEC program, which argued that the NYPSC did not have authority to establish the program, that it violated state environmental law and that it violated certain technical provisions of the State Administrative Procedures Act when adopting the ZEC program. On January 22, 2018, the court dismissed the environmental claims and the majority of the plaintiffs from the case but denied the motions to dismiss with respect to the remaining five plaintiffs and claims, without commenting on the merits of the case. On October 8, 2019, the court dismissed all remaining claims. The petitioners filed a notice of appeal on November 4, 2019 and originally had until May 4, 2020 to file their brief. Due to COVID-19 related restrictions, the court extended the deadline to July 29, 2020. Petitioners did not file a brief by the deadline, so the case is deemed dismissed. Petitioners are permitted up to one year from July 29, 2020 to file a motion to vacate the dismissal if they can show good cause for the delay.
See Note 6 — Early Plant Retirements for additional information related to Ginna and Nine Mile Point.
New England Regulatory Matters
Mystic Units 8 & 9 and Everett Marine Terminal Cost of Service Agreement (Exelon and Generation). On March 29, 2018, Generation notified grid operator ISO-NE of its plans to early retire Mystic Units 8 and 9 absent regulatory reforms on June 1, 2022. On May 16, 2018, Generation made a filing with FERC to establish cost-of-service compensation and terms and conditions of service for Mystic Units 8 & 9 for the period between June 1, 2022 - May 31, 2024. On December 20, 2018, FERC issued an order accepting the cost of service compensation, reflecting a number of adjustments to the annual fixed revenue requirement and allowing for recovery of a substantial portion of the costs associated with the adjacent Everett Marine Terminal acquired by
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
Generation in October 2018. Those adjustments were reflected in a compliance filing made on March 1, 2019. In the December 20, 2018 order, FERC also directed a paper hearing on ROE using a new methodology. On January 22, 2019, Exelon and several other parties filed requests for rehearing of certain findings in the order.
On July 17, 2020, FERC issued three orders, which together affirmed the recovery of key elements of Mystic's cost of service compensation, including recovery of costs associated with the operation of the Everett Marine Terminal. FERC directed a downward adjustment to the rate base for Mystic Units 8 and 9, the effect of which will be partially offset by elimination of a crediting mechanism for third party gas sales during the term of the cost of service agreement. A compliance filing was submitted on September 15, 2020. Several parties filed protests to the compliance filing on the issue of how gross plant in-service was calculated, and Generation filed an answer to the protests on October 21, 2020. On July 28, 2020, FERC ordered additional briefings in the ROE proceeding.
On August 25, 2020, a group of New England generators filed a complaint against Generation seeking to extend the scope of the claw back provision in the cost-of-service agreement, whereby Generation would refund certain amounts recovered during the term of the cost of service if it returns to market afterwards. On September 14, 2020, Generation filed an answer to the complaint arguing that the complaint is procedurally improper and a collateral attack on existing FERC orders and pointing out that the ISO-NE tariff contains protections against the New England generators' concerns that they failed to mention. Generation cannot predict the outcome of this proceeding.
On June 10, 2020, Generation filed a complaint with FERC against ISO-NE on the grounds that ISO-NE failed to follow its tariff with respect to its evaluation of Mystic for transmission security for the 2024 to 2025 Capacity Commitment Period (FCA 15) and that the modifications that ISO-NE made to its unfiled planning procedures to avoid retaining Mystic should have been filed with FERC for approval. On July 27, 2020, ISO-NE issued a memo to NEPOOL announcing its determination pursuant to its unfiled planning procedures that Mystic Units 8 and 9 are not needed for FCA 15 for transmission security. It had previously determined Mystic Units 8 and 9 are not needed for fuel security. On August 17, 2020, FERC issued an order denying the complaint. On September 16, 2020, Generation filed a request for rehearing with FERC. The timing and the outcome of this proceeding is uncertain.
See Note 6 — Early Plant Retirements and Note 8 — Asset Impairments for additional information on the impacts of Generation’s August 2020 decision to retire Mystic Units 8 & 9 upon expiration of the cost of service agreement.
Federal Regulatory Matters
PJM and NYISO MOPR Proceedings. PJM and NYISO capacity markets include a MOPR. If a resource is subjected to a MOPR, its offer is adjusted to effectively remove the revenues it receives through a state government-provided financial support program - resulting in a higher offer that may not clear the capacity market. Prior to December 19, 2019, the MOPR in PJM applied only to certain new gas-fired resources. Currently, the MOPR in NYISO applies only to certain resources in downstate New York.
For Generation’s facilities in PJM and NYISO that are currently receiving ZEC compensation, an expanded MOPR would require exclusion of ZEC compensation when bidding into future capacity auctions, resulting in an increased risk of these facilities not receiving capacity revenues in future auctions.
On December 19, 2019, FERC required PJM to broadly apply the MOPR to all new and existing resources including nuclear, renewables, demand response, energy efficiency, storage, and all resources owned by vertically-integrated utilities. This greatly expands the breadth and scope of PJM’s MOPR, which is effective as of PJM’s next capacity auction. While FERC included some limited exemptions, no exemptions were available to state-supported nuclear resources.
FERC provided no new mechanism for accommodating state-supported resources other than the existing FRR mechanism (under which an entire utility zone would be removed from PJM’s capacity auction along with sufficient resources to support the load in such zone). In response to FERC’s order, PJM submitted a compliance filing on March 18, 2020 wherein PJM proposed tariff language interpreting and implementing FERC's directives and proposed a schedule for resuming capacity auctions that is contingent on the timing of FERC's action on the compliance filing.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
On April 16, 2020, FERC issued an order largely denying most requests for rehearing of FERC's December 2019 order but granting a few clarifications that required an additional PJM compliance filing which PJM submitted on June 1, 2020.
On October 15, 2020, FERC issued an order denying requests for rehearing of its April 16, 2020 order and accepted PJM’s two compliance filings, subject to a further compliance filing to revise minor aspects of the proposed MOPR methodology. As part of that order, FERC also accepted PJM’s proposal to condense the schedule of activities leading up to the next capacity auction but did not specify when that schedule would commence given that a key element of the MOPR level computation remains pending before FERC in another proceeding.
FERC issued an order on May 21, 2020 involving reforms to PJM’s day-ahead and real-time reserves markets that need to be reflected in the calculation of MOPR levels. In approving reforms to PJM’s reserves markets, FERC also directed PJM to develop a new methodology for estimating revenues that resources will receive for sales of energy and related services (referred to as the Energy and Ancillary Services Offset) and to use that new methodology in calculating a number of parameters and assumptions used in the capacity market, including MOPR levels. PJM submitted all elements of its new Energy and Ancillary Services Offset revenue projection methodology on August 5, 2020. On review of this compliance filing, FERC is expected to address how these additional reforms will impact MOPR levels, the timeline for implementing the new revenue projection methodology, and the timing for commencing the capacity auction schedule.
Unless Illinois and New Jersey can implement an FRR program in their PJM zones, the MOPR will apply in the next capacity auction to Generation's owned or jointly owned nuclear plants in those states receiving a benefit under the Illinois ZES or the New Jersey ZEC program, as applicable, increasing the risk that those units may not clear the capacity market.
Exelon is currently working with PJM and other stakeholders to pursue the FRR option as an alternative to the PJM capacity auction. If Illinois implements the FRR option, Generation’s Illinois nuclear plants could be removed from PJM’s capacity auction and instead supply capacity and be compensated under the FRR program, which has the potential to mitigate the current economic distress being experienced by Generation's nuclear plants in Illinois, as discussed in Note 6 - Early Plant Retirements. Implementing the FRR program in Illinois will require both legislative and regulatory changes. Whether legislation is needed in New Jersey would depend on how the state chooses to structure an FRR program. Exelon cannot predict whether or when such legislative and regulatory changes can be implemented.
On February 20, 2020, FERC issued an order rejecting requests to expand NYISO’s version of the MOPR (referred to as buyer-side mitigation rules) beyond its current limited applicability to certain resources in downstate. However, on October 14, 2020, two natural gas-fired generators in New York filed a complaint at FERC seeking to expand the MOPR in NYISO to apply to all resources, new and existing, across the entire NYISO market. Exelon plans to strenuously oppose expansion of FERC’s MOPR policies in the NYISO market. While it is too early in the proceeding to predict its outcome, if FERC follows its MOPR precedent in PJM and applies the MOPR in NYISO broadly as requested in the complaint, Generation’s facilities in NYISO that are receiving ZEC compensation may be at increased risk of not clearing the capacity auction.
If Generation’s state-supported nuclear plants in PJM or NYISO are subjected to the MOPR or equivalent without compensation under an FRR or similar program, it could have a material adverse impact on Exelon's and Generation's financial statements, which Exelon and Generation cannot reasonably estimate at this time.
Operating License Renewals
Conowingo Hydroelectric Project. On August 29, 2012, Generation submitted a hydroelectric license application to FERC for a new license for the Conowingo Hydroelectric Project (Conowingo). In connection with Generation’s efforts to obtain a water quality certification pursuant to Section 401 of the Clean Water Act (401 Certification) from MDE for Conowingo, Generation has been working with MDE and other stakeholders to resolve water quality licensing issues, including: (1) water quality, (2) fish habitat, and (3) sediment.
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(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters
On October 29, 2019, Generation and MDE filed with FERC a Joint Offer of Settlement (Offer of Settlement) that would resolve all outstanding issues relating to the 401 Certification. Pursuant to the Offer of Settlement, the parties submitted Proposed License Articles to FERC to be incorporated by FERC into the new license in accordance with FERC’s discretionary authority under the Federal Power Act. Among the Proposed License Articles are modifications to river flows to improve aquatic habitat, eel passage improvements, and initiatives to support rare, threatened and endangered wildlife. If FERC approves the Offer of Settlement and incorporates the Proposed License Articles into the new license without modification, then MDE would waive its rights to issue a 401 Certification and Generation would agree, pursuant to a separate agreement with MDE (MDE Settlement), to implement additional environmental protection, mitigation, and enhancement measures over the anticipated 50-year term of the new license. These measures address mussel restoration and other ecological and water quality matters, among other commitments. Exelon’s commitments under the various provisions of the Offer of Settlement and MDE Settlement are not effective unless and until FERC approves the Offer of Settlement and issues the new license with the Proposed License Articles. Generation cannot currently predict when FERC will issue the new license.
Peach Bottom Units 2 and 3. On July 10, 2018, Generation submitted a second 20-year license renewal application with the NRC for Peach Bottom Units 2 and 3, which was approved on March 6, 2020. Peach Bottom Units 2 and 3 are now licensed to operate through 2053 and 2054, respectively.

3. Revenue from Contracts with Customers (All Registrants)
The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that the entities expect to be entitled to in exchange for those goods or services. Generation’s primary sources of revenue include competitive sales of power, natural gas, and other energy-related products and services. The Utility Registrants’ primary sources of revenue include regulated electric and gas tariff sales, distribution, and transmission services.
See Note 4 — Revenue from Contracts with Customers of the Exelon 2019 Form 10-K for additional information regarding the primary sources of revenue for the Registrants.
Contract Balances (All Registrants)
Contract Assets
Generation records contract assets for the revenue recognized on the construction and installation of energy efficiency assets and new power generating facilities before Generation has an unconditional right to bill for and receive the consideration from the customer. These contract assets are subsequently reclassified to receivables when the right to payment becomes unconditional. Generation records contract assets and contract receivables within Other current assets and Customer accounts receivable, net, respectively, within Exelon’s and Generation’s Consolidated Balance Sheets.
The following table provides a rollforward of the contract assets reflected in Exelon's and Generation's Consolidated Balance Sheets for the three and nine months ended September 30, 2020 and 2019. The Utility Registrants do not have any contract assets.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Revenue from Contracts with Customers
ExelonGeneration
Balance as of December 31, 2019$174 $174 
Amounts reclassified to receivables(19)(19)
Revenues recognized17 17 
Balance at March 31, 2020$172 $172 
Amounts reclassified to receivables(26)(26)
Revenues recognized13 13 
Balance at June 30, 2020$159 $159 
Amounts reclassified to receivables(18)(18)
Revenues recognized19 19 
Balance at September 30, 2020$160 $160 
ExelonGeneration
Balance as of December 31, 2018$187 $187 
Amounts reclassified to receivables(26)(26)
Revenues recognized26 26 
Balance at March 31, 2019$187 $187 
Amounts reclassified to receivables(18)(18)
Revenues recognized27 27 
Balance at June 30, 2019$196 $196 
Amounts reclassified to receivables(65)(65)
Revenues recognized39 39 
Balance at September 30, 2019$170 $170 
Contract Liabilities
The Registrants record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. The Registrants record contract liabilities within Other current liabilities and Other noncurrent liabilities within the Registrants' Consolidated Balance Sheets.
For Generation, these contract liabilities primarily relate to upfront consideration received or due for equipment service plans, solar panel leases, and the Illinois ZEC program that introduces a cap on the total consideration to be received by Generation.
On July 1, 2020, Pepco, DPL, and ACE each entered into a collaborative arrangement 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. 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 30% undivided interest in those new agreements. PHI, Pepco, DPL, and ACE received cash and recorded contract liabilities as of July 1, 2020 as shown in the table below. The revenue attributable to this arrangement will be recognized as operating revenue over the 35 years under the collaborative arrangement.
The following table provides a rollforward of the contract liabilities reflected in Exelon's, Generation's, PHI's, Pepco's, DPL's, and ACE'S Consolidated Balance Sheets for the three and nine months ended September 30, 2020 and 2019. As of September 30, 2020 and December 31, 2019, ComEd's, PECO's, and BGE's contract liabilities were immaterial.
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Revenue from Contracts with Customers
ExelonGenerationPHIPepcoDPLACE
Balance as of December 31, 2019$33 $71 $$$$
Consideration received or due20 55