1109357--2/5/2010--EXELON_GENERATION_CO

related topics

{operation, natural, condition}

{loss, insurance, financial}

{regulation, change, law}

{condition, economic, financial}

{cost, operation, labor}

{competitive, industry, competition}

{customer, product, revenue}

{tax, income, asset}

Generation is exposed to price fluctuations in the wholesale power market, which may negatively impact its results of operations. (Exelon and Generation) In addition to price fluctuations, Generation is exposed to other risks of the wholesale power market that are beyond its control, which may negatively impact its results of operations. (Exelon and Generation) Market and Financial Risks Continued Market performance and other economic factors may decrease the value of decommissioning trust funds and benefit plan assets or increase the related obligations, which then could require significant additional funding. (Exelon, Generation, ComEd and PECO) Disruptions in the capital and credit markets and increased volatility in commodity markets may adversely affect the Registrants businesses in several ways, including the availability and cost of short-term funds for liquidity requirements, the Registrants ability to meet long-term commitments, Generation s ability to hedge effectively its generation portfolio, and the competitiveness and liquidity of energy markets; each could adversely affect the Registrants financial condition, results of operations and cash flows. (Exelon, Generation, ComEd and PECO) Market and Financial Risks Continued If the Registrants were to experience a downgrade in their credit ratings below investment grade or otherwise fail to satisfy the credit standards of trading counterparties, they would be required to provide significant amounts of collateral under their agreements with counterparties and could experience higher borrowing costs. (Exelon, Generation, ComEd and PECO) Market and Financial Risks Continued Results of operations may be negatively affected by increasing costs. (Exelon, Generation, ComEd and PECO) Market and Financial Risks Continued Generation s financial performance may be negatively affected by price volatility, availability and other risk factors associated with the procurement of nuclear and fossil fuel. (Exelon and Generation) Generation s risk management policies cannot fully eliminate the risk associated with its commodity trading activities. (Exelon and Generation) Generation may not be able to effectively respond to increased demand for energy. (Exelon and Generation) Market and Financial Risks Continued Financial performance and load requirements may be adversely affected if Generation is unable to effectively manage its power portfolio. (Exelon and Generation) Challenges to tax positions taken by the Registrants as well as tax law changes and the inherent difficulty in quantifying potential tax effects of business decisions, could negatively impact the Registrants results of operations and cash flows. (Exelon, Generation, ComEd and PECO) 1999 sale of fossil generating assets. Tax reserves and the recoverability of deferred tax assets. Increases in customer rates and the impact of economic downturns may lead to greater expense for uncollectible customer balances. Additionally, increasing rates could lead to decreased volumes delivered. Both of these factors may decrease ComEd s and PECO s results from operations and cash flows. (Exelon, ComEd and PECO) Market and Financial Risks Continued The effects of weather may impact the Registrants results of operations and cash flows. (Exelon, Generation, ComEd and PECO) Market and Financial Risks Continued Certain long-lived assets recorded on the Registrants statements of financial position may become impaired, which would result in write-offs of the impaired amounts. (Exelon, Generation, ComEd and PECO) The Registrants businesses are capital intensive and the costs of capital projects may be significant. (Exelon, Generation, ComEd and PECO) Exelon and its subsidiaries have guaranteed the performance of third parties, which may result in substantial costs in the event of non-performance. (Exelon, Generation, ComEd and PECO) Due to its dependence on its two most significant customers, ComEd and PECO, Generation will be negatively affected in the event of non-performance or change in the creditworthiness of either of its most significant customers. (Exelon and Generation) Generation s business may be negatively affected by competitive electric generation suppliers. (Exelon and Generation) The Registrants generation and energy delivery businesses are highly regulated and could be subject to adverse legislative actions. Fundamental changes in regulation or legislation could disrupt the Registrants business plans and adversely affect their operations and financial results. (Exelon, Generation, ComEd and PECO) Regulatory and Legislative Risks Continued Generation may be negatively affected by possible Federal legislative or regulatory actions that could affect the scope and functioning of the wholesale markets. (Exelon and Generation) Regulatory and Legislative Risks Continued Generation s affiliation with ComEd and PECO, together with the presence of a substantial percentage of Generation s physical asset base within the ComEd and PECO service territories, could increase Generation s cost of doing business to the extent future complaints or challenges regarding ComEd and/or PECO retail rates result in settlements or legislative or regulatory requirements funded in part by Generation. (Exelon and Generation) Regulatory and Legislative Risks Continued Legislators or regulators may respond to anticipated increases in rates following the end of the retail electric generation rate cap transition period in Pennsylvania on December 31, 2010 by enacting laws or regulations aimed at restricting or controlling those rates or by establishing rate relief programs that could require significant funding from PECO and/or Generation that could adversely affect PECO and/or Generation s results of operations. (Exelon, Generation and PECO) The Illinois Settlement Legislation enacted in 2007 providing rate relief to Illinois electric customers and requiring other changes in the electric industry in lieu of harmful alternatives such as rate freezes, caps, or a tax on generation, could be reversed or modified by new legislation that could be harmful to ComEd and Generation. (Exelon, Generation and ComEd) The Registrants may incur substantial costs to fulfill their obligations related to environmental and other matters. (Exelon, Generation, ComEd and PECO) Regulatory and Legislative Risks Continued Changes in ComEd s and PECO s terms and conditions of service, including their respective rates, are subject to regulatory approval proceedings and/or negotiated settlements that are at times contentious, lengthy and subject to appeal, which lead to uncertainty as to the ultimate result and which may introduce time delays in effectuating rate changes. (Exelon, ComEd and PECO) Regulatory and Legislative Risks Continued Federal or additional state RPS and/or energy conservation legislation along with energy conservation by customers could negatively affect the results of operations and cash flows of ComEd and PECO. (Exelon, ComEd and PECO) ComEd and PECO are likely to be subject to higher transmission operating costs in the future as a result of PJM s RTEP. (Exelon, ComEd and PECO) The impact of not meeting the criteria of the authoritative guidance for accounting for the effects of certain types of regulation could be material to Exelon, ComEd and PECO. (Exelon, ComEd and PECO) Regulatory and Legislative Risks Continued Exelon and Generation may incur material costs of compliance if Federal and/or state legislation is adopted to address climate change. (Exelon and Generation) The Registrants could be subject to higher costs and/or penalties related to mandatory reliability standards. (Exelon, Generation, ComEd and PECO) The Registrants cannot predict the outcome of the legal proceedings relating to their business activities. An adverse determination could have a material adverse effect on their results of operations, financial positions and cash flows. (Exelon, Generation, ComEd and PECO) The Registrants employees, contractors, customers and the general public may be exposed to a risk of injury due to the nature of the energy industry. (Exelon, Generation, ComEd and PECO) War, acts and threats of terrorism, natural disaster, pandemic and other significant events may adversely affect Exelon s results of operations, its ability to raise capital and its future growth. (Exelon, Generation, ComEd and PECO) Generation s financial performance may be negatively affected by matters arising from its ownership and operation of nuclear facilities. (Exelon and Generation) Generation s financial performance may be negatively affected by risks arising from its ownership and operation of hydroelectric facilities. (Exelon and Generation) ComEd s and PECO s operating costs, and customers and regulators opinions of ComEd and PECO, are affected by their ability to maintain the availability and reliability of their delivery systems. (Exelon, ComEd and PECO) The physical risks associated with climate change could impact the Registrant s results of operations and cash flows. (Exelon, ComEd and PECO) ComEd s and PECO s respective ability to deliver electricity, their operating costs and their capital expenditures may be negatively affected by transmission congestion. (Exelon, ComEd and PECO) Failure to attract and retain an appropriately qualified workforce may negatively impact the Registrants results of operations. (Exelon, Generation, ComEd and PECO) The Registrants are subject to information security risks. (Exelon, Generation, ComEd and PECO) Due to PECO s dependence on Generation to fulfill 100% of its electric energy supply requirements under a PPA, PECO could be negatively affected in the event of Generation s inability to perform under the PPA. (Exelon and PECO) The Registrants may make acquisitions that do not achieve the intended financial results.

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1109357--2/5/2010--EXELON_GENERATION_CO_LLC