ComEd 2006 Annual Report Download - page 191

Exelon Corporation and Subsidiary Companies
Exelon Generation Company, LLC and Subsidiary Companies
Commonwealth Edison Company and Subsidiary Companies
PECO Energy Company and Subsidiary Companies
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Property, Plant and Equipment (Exelon, Generation, ComEd and PECO)
Property, plant and equipment is recorded at cost. The cost of maintenance, repairs and minor
replacements of property is charged to maintenance expense as incurred.
For Generation, upon retirement, the cost of property is charged to accumulated depreciation. For
ComEd and PECO, upon retirement, the cost of regulated property, net of salvage, is charged to
accumulated depreciation in accordance with the composite method of depreciation. ComEd’s and
PECO’s depreciation expense, which is included in cost of service for rate purposes, includes the
estimated cost of dismantling and removing plant from service upon retirement. For ComEd, removal
costs reduce the related regulatory liability. For PECO, removal costs are capitalized when incurred
and depreciated over the life of the new asset constructed consistent with PECO’s regulatory recovery
method. For unregulated property, the cost and accumulated depreciation of property, plant and
equipment retired or otherwise disposed of are removed from the related accounts.
See Note 6—Property, Plant and Equipment, Note 7—Jointly Owned Electric Utility Plant and
Note 19—Supplemental Financial Information for additional information regarding property, plant and
equipment.
Nuclear Fuel (Exelon and Generation)
The cost of nuclear fuel is capitalized and charged to fuel expense using the unit-of-production
method. The estimated cost of disposal of Spent Nuclear Fuel (SNF) is established per the Standard
Waste Contract with the Department of Energy (DOE) and is expensed through fuel expense at one
mill ($.001) per kilowatthour (kWh) of net nuclear generation. On-site SNF storage costs are capitalized
or expensed, as incurred, based upon the nature of the work performed.
Nuclear Outage Costs (Exelon and Generation)
Costs associated with nuclear outages are recorded in the period incurred.
New Site Development Costs (Exelon and Generation)
New site development costs represent certain costs incurred in the planning and evaluation stage
of new stations and are capitalized when the project is considered probable of occurrence, which is
based on various factors.
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