8-KMaterial AgreementsExhibits & Filings

EXELON CORP 8-K Report, Material Agreement (Nov 18, 2016)

Filed November 18, 2016For Securities:EXC

Summary

Exelon Corporation, through its subsidiaries, has entered into significant agreements with the New York State Energy Research & Development Authority (NYSERDA) related to the procurement of Zero Emission Credits (ZECs). These agreements, effective April 1, 2017, through March 31, 2029, are designed to preserve the environmental attributes of zero-emission nuclear power generating facilities in New York. The program aims to provide financial support for these facilities by compensating them for their zero-emission characteristics. The NYSERDA Agreements establish a structured procurement process for ZECs over several two-year tranches, with pricing administratively determined. This initiative, stemming from the New York Public Service Commission's Clean Energy Standard, is a crucial development for Exelon's nuclear generation assets in New York, offering a long-term revenue stream tied to the facilities' environmental benefits. The cost of these ZECs will ultimately be recovered from New York ratepayers.

Key Highlights

  • 1Exelon's subsidiaries entered into three separate NYSERDA Agreements for Zero Emission Credits (ZECs) on November 18, 2016.
  • 2These agreements support the New York Clean Energy Standard, aiming to preserve zero-emission nuclear power generation.
  • 3The contracts are effective from April 1, 2017, to March 31, 2029, providing long-term revenue visibility.
  • 4ZECs will be procured in six, two-year tranches, with pricing determined administratively.
  • 5Pricing for Tranche 1 is set at $17.48/MWh, escalating over the contract term based on the Social Cost of Carbon.
  • 6The quantity of ZECs purchased is capped based on the facilities' historic contribution to the clean energy mix.
  • 7Costs associated with these ZECs will be recovered from New York ratepayers through commodity charges on customer bills.

Frequently Asked Questions

Zero Emission Credits (ZECs) represent the environmental attributes of electricity generated by facilities that do not produce emissions. Exelon is entering into these agreements with NYSERDA to receive compensation for the zero-emission benefits provided by its nuclear power plants in New York, as part of New York's Clean Energy Standard. This helps ensure the continued operation of these important zero-emission generation assets.

The NYSERDA Agreements are long-term, running from April 1, 2017, through March 31, 2029. ZECs will be procured in six, two-year tranches. The pricing for each tranche will be administratively determined, escalating over time, and for the first tranche, it is set at $17.48 per megawatt-hour (MWh).

The cost of the ZECs procured under these agreements will be recovered from New York ratepayers. This recovery will be incorporated into the commodity charges on customer bills, ensuring that the program's costs are spread across the electricity consumers in New York.

The agreements specifically cover the zero-emission nuclear power generating facilities operated by Exelon's subsidiaries, Nine Mile Point Nuclear Station, LLC, and R. E. Ginna Nuclear Power Plant, LLC, in New York.