Exelon 2015 Annual Report Download - page 186

Table of Contents
energy derivatives and interest rate and foreign exchange derivatives related to underlying energy contracts, respectively. As of December 31,
2014, $8 million of cash collateral posted was not offset against net derivative positions because it was not associated with energy-related
derivatives or as the balance sheet date there were no positions to offset. See Note 23—Commitments and Contingencies of the Combined Notes
to Consolidated Financial Statements for information regarding the letters of credit supporting the cash collateral.
ComEd
As of December 31, 2015, ComEd held no collateral from suppliers in association with standard block energy procurement contracts and
held approximately $19 million in the form of cash and letters of credit for renewable energy contracts. See Note 3—Regulatory Matters and Note
13—Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
PECO
As of December 31, 2015, PECO was not required to post collateral under its energy and natural gas procurement contracts. See Note 13—
Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
BGE
BGE is not required to post collateral under its electric supply contracts. As of December 31, 2015, BGE was not required to post collateral
under its natural gas procurement contracts nor was it holding collateral under its electric supply and natural gas procurement contracts. See Note
13—Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
RTOs and ISOs (Exelon, Generation, ComEd, PECO and BGE)
Generation, ComEd, PECO and BGE participate in all, or some, of the established, real-time energy markets that are administered by PJM,
ISO-NE, ISO-NY, CAISO, MISO, SPP, AESO, OIESO and ERCOT. In these areas, power is traded through bilateral agreements between buyers
and sellers and on the spot markets that are operated by the RTOs or ISOs, as applicable. In areas where there is no spot market, electricity is
purchased and sold solely through bilateral agreements. For sales into the spot markets administered by an RTO or ISO, the RTO or ISO
maintains financial assurance policies that are established and enforced by those administrators. The credit policies of the RTOs and ISOs may,
under certain circumstances, require that losses arising from the default of one member on spot market transactions be shared by the remaining
participants. Non-performance or non-payment by a major counterparty could result in a material adverse impact on the Registrants’ results of
operations, cash flows and financial positions.
Exchange Traded Transactions (Exelon and Generation)
Generation enters into commodity transactions on NYMEX, ICE and the Nodal exchange. The NYMEX, ICE and Nodal exchange
clearinghouses act as the counterparty to each trade. Transactions on the NYMEX, ICE and Nodal exchange must adhere to comprehensive
collateral and margining requirements. As a result, transactions on NYMEX, ICE and Nodal exchange are significantly collateralized and have
limited counterparty credit risk.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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