ComEd 2006 Annual Report Download - page 117

Rate changes and mix. The increase in electric revenues at PECO attributable to rate changes
and mix resulted from increased residential sales, which are billed at higher average rates relative to
other customer classes. In addition, rates were higher in 2005 for certain large commercial and
industrial customers whose rates reflect wholesale energy prices, which were higher in 2005 relative to
2004.
The increase in gas revenues was due to increases in rates through PAPUC-approved changes to
the purchased gas adjustment clause that became effective March 1, 2004, March 1, 2005, June 1,
2005, September 1, 2005 and December 1, 2005. The average purchased gas cost rate per million
cubic feet in effect for 2005 was 12% higher than the average rate for 2004.
Customer choice. All PECO customers have the choice to purchase energy from a competitive
electric generation supplier. This choice does not impact the volume of deliveries, but affects revenue
collected from customers related to supplied energy and generation service. PECO’s operating income
is not affected by customer choice since any increase or decrease in revenues is completely offset by
any related increase or decrease in purchased power expense.
For 2005 and 2004, 5% and 12%, respectively, of energy delivered to PECO’s retail customers
was provided by competitive electric generation suppliers.
2005 2004
Retail customers purchasing energy from a competitive electric generation supplier:
Number of customers at period end .................................... 44,500 101,500
Percentage of total retail customers .................................... 3% 7%
Volume (GWhs) (a) .................................................. 2,094 4,605
Percentage of total retail deliveries .................................... 5% 12%
(a) One GWh is the equivalent of one million kilowatthours (kWh).
The increase in electric retail revenue associated with customer choice was primarily related to a
significant number of residential customers returning to PECO as their energy provider in December
2004. This action followed the assignment of approximately 194,000 residential customers to
competitive electric generation suppliers for a one-year term beginning in December 2003, as required
by the PAPUC and PECO’s final electric restructuring order. In 2005, additional customers returned to
PECO as their energy supplier primarily as a result of two alternative energy suppliers exiting the
market.
Volume. The increase in electric revenues was primarily as a result of higher delivery volume,
exclusive of the effects of weather and customer choice, due to an increased number of customers and
increased usage per customer across all customer classes. The decrease in gas revenues attributable
to lower delivery volume, exclusive of the effects of weather, was primarily due to decreased customer
usage, which is consistent with rising gas prices.
Weather. The demand for electricity and gas is affected by weather conditions. With respect to the
electric business, very warm weather in summer months and, with respect to the electric and gas
businesses, very cold weather in other months are referred to as “favorable weather conditions”
because these weather conditions result in increased sales of electricity and gas. Conversely, mild
weather reduces demand. Revenues were positively affected by favorable weather conditions at PECO
in 2005 compared to 2004. In the PECO service territory, cooling and heating degree days were 21%
and 2% higher, respectively, than the prior year.
T&O / SECA rates. Effective December 1, 2004, PJM became obligated to pay SECA collections
to PECO, and PECO became obligated to pay SECA charges—see “Purchased Power and Fuel
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