8-KOther Events

EXELON CORP 8-K Report, Corporate Update (May 26, 2011)

Filed May 26, 2011For Securities:EXC

Summary

This 8-K filing from Exelon Corporation (EXC) on May 26, 2011, primarily details an order from the Illinois Commerce Commission (ICC) regarding Commonwealth Edison Company (ComEd)'s 2010 electric delivery services rate case. The ICC approved a $143 million increase to ComEd's annual delivery services revenue requirement, which represents approximately 42% of the $343 million initially requested by ComEd. This decision aims to allow ComEd to recover costs associated with substantial investments in its distribution system and increased operating expenses, such as pension and postretirement benefits, since its last rate filing in 2007. The approved rate of return on common equity stands at 10.50%. As a consequence of this order, ComEd anticipates recording a one-time net benefit of approximately $58 million, resulting from the reestablishment of previously expensed plant balances, the creation of new regulatory assets, and the reversal of certain reserves. ComEd is currently reviewing the order and reserves the right to request a rehearing on specific issues from the ICC, and the potential for appeals from other parties remains.

Key Highlights

  • 1Illinois Commerce Commission (ICC) approved a $143 million increase in Commonwealth Edison Company's (ComEd) annual delivery services revenue requirement, effective June 1, 2011.
  • 2The approved revenue increase is approximately 42% of the $343 million ComEd had requested.
  • 3The rate increase is intended to recover costs from significant investments in ComEd's distribution system and rising operational expenses, including pension and postretirement benefits.
  • 4The ICC has set an approved rate of return on common equity at 10.50% for ComEd.
  • 5ComEd expects to record a one-time net benefit of approximately $58 million due to the ICC's order, which includes adjustments to plant balances, regulatory assets, and reserves.
  • 6ComEd is evaluating the order and may seek a rehearing from the ICC on particular matters.
  • 7The filing includes forward-looking statements subject to risks and uncertainties, as detailed in Exelon's previous SEC filings.

Frequently Asked Questions

The main event reported is the Illinois Commerce Commission's (ICC) order regarding Commonwealth Edison Company's (ComEd) 2010 electric delivery services rate case, which approves an increase in ComEd's annual revenue requirement.

The ICC approved a $143 million increase to ComEd's annual delivery services revenue requirement. This is approximately 42% of the $343 million that ComEd had initially requested.

ComEd anticipates recording a one-time net benefit of approximately $58 million. This benefit is due to the reestablishment of previously expensed plant balances, the creation of new regulatory assets, and the reversal of certain reserves.

ComEd is evaluating the results of the ICC order and may request a rehearing on specific issues. The filing also notes that the company cannot predict if other parties will file appeals or the outcome of any such appeals.