What is the significance of the Market Share Thresholds (MST) for PECO Energy Company?

The MST are regulatory requirements set by the Pennsylvania Public Utility Commission (PUC) to encourage competition in the electric generation market. If a certain percentage of customers do not choose an alternative Electric Generation Supplier (EGS) by specific dates, customers may be randomly assigned to an EGS. This process directly impacts PECO's customer base and its role as a potential default service provider.

What impact did New Power Company's withdrawal have on PECO?

New Power Company's withdrawal from providing default service to a substantial number of PECO's residential and non-CDS customers in 2002 resulted in these customers being returned to PECO. PECO is currently serving these customers at discounted energy rates based on the original agreement for the remaining contract term, which affects PECO's generation supply load and potentially its financial results.

Is there any legal uncertainty surrounding the MST process?

Yes, Strategic Energy LLC filed an Application for Stay or Supersedeas with the Pennsylvania Commonwealth Court challenging the process used to develop the MST auction. The court is scheduled to hear oral arguments on this matter on March 18, 2003, indicating potential delays or adjustments to the customer assignment process.

Where can I find more detailed information about Exelon's future outlook and risks?

This filing contains forward-looking statements. For a comprehensive understanding of the factors that could cause actual results to differ materially, investors are directed to review Exelon's other filings with the Securities and Exchange Commission, including its 2002 Annual Report on Form 8-K (filed February 21, 2003), and various Registration Statements (Forms S-4 and S-3) for Exelon Generation Company, PECO Energy Company, and Commonwealth Edison Company.

EXC 8-K SEC Disclosure — Feb 26, 2003

Summary

This 8-K filing from Exelon Corporation (EXC) provides an update on the PECO Energy Company's customer choice program and regulatory developments related to electric restructuring in Pennsylvania. The core of the disclosure focuses on the progress and challenges in meeting Market Share Thresholds (MST) for customer choice of electric generation suppliers. While the initial 35% threshold was met in 2001, PECO has experienced shifts in customer behavior and supplier participation, with a notable increase in customers returning to PECO as their chosen supplier during 2002. The filing details recent actions, including the approval of an MST plan for commercial customers and ongoing efforts to meet the 50% threshold, alongside a legal challenge to the MST auction process that is scheduled for court review. Furthermore, the report highlights the withdrawal of New Power Company from providing default service to a significant number of PECO residential customers in 2002, resulting in those customers being returned to PECO's service. These developments are significant for investors as they impact PECO's customer base, revenue streams from generation supply, and the competitive landscape within its service territory. The company also notes that this filing contains forward-looking statements and directs investors to other SEC filings for a comprehensive understanding of risks and potential impacts on future financial and operating results.

Key Highlights

1PECO Energy Company is actively managing customer choice programs to meet Pennsylvania Public Utility Commission (PUC) Market Share Thresholds (MST).
2As of December 31, 2002, a portion of PECO's customer load was purchasing generation from alternative suppliers, with varying percentages across residential, small commercial, and large commercial classes.
3PECO experienced an increase in customers selecting or returning to PECO as their Electric Generation Supplier (EGS) during 2002.
4An MST plan for small and large commercial customers was approved by the PUC on February 6, 2003, leading to a completed auction on February 24, 2003, assigning over 64,000 customers.
5A legal challenge (Application for Stay or Supersedeas) was filed by Strategic Energy LLC regarding the MST auction process, with court argument scheduled for March 18, 2003.
6New Power Company withdrew from providing Competitive Default Service (CDS) to approximately 180,000 residential customers and 15,000 non-CDS customers in 2002, returning them to PECO's service.
7The filing includes forward-looking statements and advises investors to consult other SEC filings for detailed risk factors and business outlook.

EXELON CORP 8-K Report (Feb 26, 2003)

Summary

Key Highlights

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