ComEd 2013 Annual Report Download - page 30

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The transmission rate inthePJM Open Access Transmission Tariff under which PECO incurscoststo serveitsdefault service
customersandearnsrevenue asa transmission facilityowner is aFERC-approvedrate. This is the rate that all loadservingentities
inthePECO transmission zone payfor wholesale transmission service.
BGE’s transmission ratesare establishedbasedon a formula that wasapprovedbyFERCin April 2006. FERC’s order establishes
theagreed-upon treatment ofcostsandrevenuesinthedetermination ofnetworkservice transmission ratesandthe process for
updatingtheformula rate calculation on an annual basis.
See Note 3 oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information regardingtransmission services.
Environmental Regulation
General
Exelon,Generation,ComEd, PECO and BGE are subjecttocomprehensiveandcomplexlegislation regardingenvironmental
mattersbythefederal government andvariousstate andlocal jurisdictionsinwhich theyoperate theirfacilities. TheRegistrantsare
alsosubjecttoregulationsadministeredbytheU.S. EPAandvariousstate andlocal environmental protection agencies. Federal,
state andlocal regulation includesthe authorityto regulate air,water,andsolid andhazardouswaste disposal.
TheExelon boardofdirectorsisresponsible for overseeingthemanagement ofenvironmental matters. Exelon hasamanagement
teamto address environmental complianceandstrategy, includingtheCEO; theSenior VicePresident,Corporate Strategy and
ChiefSustainability Officer;theCorporate Environmental Strategy Director andtheEnvironmental RegulatoryStrategy Director,as
well assenior management ofGeneration,ComEd, PECO and BGE. Performanceofthoseindividualsdirectlyinvolvedin
environmental complianceandstrategy is reviewedandaffectscompensation aspart ofthe annual individual performancereview
process. TheExelon boardhasdelegatedto itscorporate governancecommittee authorityto oversee Exelon’s compliancewithlaws
andregulationsanditsstrategiesandeffortsto protectandimprovethequalityoftheenvironment,including, Exelon’s climate
changeandsustainabilitypoliciesandprograms, andExelon 2020,Exelon’s comprehensivebusiness andenvironmental plan,as
discussedinfurther detailbelow. TheExelon boardhasalsodelegatedto itsgeneration oversightcommittee authorityto oversee
environmental,healthandsafety issuesrelatingto Generation.Therespectiveboards ofComEd, PECO and BGE, which each
includedirectorswhoalsoserveontheExelon board, oversee environmental,healthandsafety issuesrelatedto ComEd, PECO
and BGE.
Air Quality
AirqualityregulationspromulgatedbytheU.S. EPAandthevariousstate andlocal environmental agenciesinIllinois, Maryland,
Massachusetts, NewYork, PennsylvaniaandTexasinaccordancewiththeFederal Clean AirActimposerestrictionson emission of
particulates, sulfur dioxide(SO2), nitrogen oxides (NOx), mercuryandother pollutantsandrequire permitsfor operation ofemissions
sources. Such permitshavebeen obtainedbyExelon’s subsidiariesandmustbe renewedperiodically. TheClean AirAct
establishesacomprehensiveandcomplexnational programto reducesubstantiallyair pollution frompower plants. Advanced
emission controlsfor SO2and NOx havebeen installedat all ofGeneration’s co-ownedbituminouscoal-firedunits.
See Note 22 oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information regardingclean airregulation
andlegislation intheforms oftheCSAPRandCAIR,theregulation ofhazardousair pollutantsfromcoal-andoil-firedelectric
generatingfacilitiesunder MATS, andregulation of GHG emissions, inaddition to NOVs issuedto Generation andComEd for
allegedviolationsoftheClean AirAct.
Water Quality
Under theClean Water Act, NPDES permitsfor dischargesinto waterways are requiredto beobtainedfromtheU.S. EPAorfrom
thestate environmental agency to which the permit programhasbeen delegatedandmustbe renewedperiodically. Certainof
Generation’s power generation facilities dischargeindustrial wastewater into waterways andare therefore subjecttothese
regulationsandoperate under NPDES permitsor pendingapplicationsfor renewalsofsuch permitsafter beinggrantedan
administrativeextension.
See Note 22 oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information regardingtheimpacttoExelon
ofstate permittingagencies’ administration ofthePhaseII rule implementingSection 316(b) oftheClean Water Act.
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