Constellation Energy 10-K 2021-12-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number						Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number						IRS Employer Identification Number
001-41137						CONSTELLATION ENERGY CORPORATION						87-1210716
						(a Pennsylvania corporation) 1310 Point Street Baltimore, Maryland 21231-3380 (610) 765-5959
333-85496						CONSTELLATION ENERGY GENERATION, LLC						23-3064219
						(a Pennsylvania limited liability company) 200 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading Symbol(s)						Name of each exchange on which registered
CONSTELLATION ENERGY CORPORATION:
Common Stock, without par value						CEG						The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Constellation Energy Corporation			Yes			☐						No			x
Constellation Energy Generation, LLC			Yes			☐						No			x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Constellation Energy Corporation			Yes			☐						No			x
Constellation Energy Generation, LLC			Yes			☐						No			x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Constellation Energy Corporation			Yes			☐						No			x
Constellation Energy Generation, LLC			Yes			x						No			☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Constellation Energy Corporation			Large Accelerated Filer			☐			Accelerated Filer			☐			Non-accelerated Filer			x			Smaller Reporting Company			☐			Emerging Growth Company			☐
Constellation Energy Generation, LLC			Large Accelerated Filer			☐			Accelerated Filer			☐			Non-accelerated Filer			x			Smaller Reporting Company			☐			Emerging Growth Company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

Prior to the separation of registrants from Exelon Corporation on February 1, 2022, the registrants were wholly owned subsidiaries of Exelon Corporation. Consequently, there was no aggregate market value of common stock held by non-affiliates of the registrants as of June 30, 2021, the last business day of the registrants’ most recently completed second fiscal quarter.

The number of shares outstanding of each registrant’s common stock as of February 1, 2022 was as follows:

Constellation Energy Corporation Common Stock, without par value			326,663,937
Constellation Energy Generation, LLC			Not applicable

TABLE OF CONTENTS

						Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS						1
FILING FORMAT						5
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION						5
WHERE TO FIND MORE INFORMATION						5
PART I
ITEM 1.			BUSINESS			6
			General			6
			Constellations Strategy and Outlook			17
			Employees			20
			Environmental Matters and Regulation			22
ITEM 1A.			RISK FACTORS			28
ITEM 1B.			UNRESOLVED STAFF COMMENTS			43
ITEM 2.			PROPERTIES			43
ITEM 3.			LEGAL PROCEEDINGS			46
ITEM 4.			MINE SAFETY DISCLOSURES			46
PART II
ITEM 5.			MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES			47
ITEM 6.			SELECTED FINANCIAL DATA			47
ITEM 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			48
			Executive Overview			48
			Significant 2021 Transactions and Developments			48
			Other Key Business Drivers and Management Strategies			51
			Critical Accounting Policies and Estimates			52
			Results of Operations			58
			Liquidity and Capital Resources			66
ITEM 7A.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			73
ITEM 8.			FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			79
			Constellation Energy Generation, LLC			82
			Notes to Consolidated Financial Statements			87
			1. Significant Accounting Policies			87
			2. Mergers, Acquisitions, and Dispositions			93
			3. Regulatory Matters			95
			4. Revenue from Contracts with Customers			100
			5. Segment Information			103
			6. Accounts Receivable			106
			7. Early Plant Retirements			108
			8. Property, Plant, and Equipment			110
			9. Jointly Owned Electric Utility Plant			111
			10. Asset Retirement Obligations			111
			11. Leases			116
			12. Asset Impairments			118
			13. Intangible Assets			119
			14. Income Taxes			120

			15. Retirement Benefits			124
			16. Derivative Financial Instruments			127
			17. Debt and Credit Agreements			131
			18. Fair Value of Financial Assets and Liabilities			135
			19. Commitments and Contingencies			145
			20. Stock-Based Compensation Plans			150
			21. Variable Interest Entities			151
			22. Supplemental Financial Information			155
			23. Related Party Transactions			158
			24. Separation from Exelon			160
ITEM 9.			CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			161
ITEM 9A.			CONTROLS AND PROCEDURES			161
ITEM 9B.			OTHER INFORMATION			161
ITEM 9C.			DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS			161
PART III
ITEM 10.			DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE			162
ITEM 11.			EXECUTIVE AND DIRECTOR COMPENSATION			167
ITEM 12.			SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			193
ITEM 13.			CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE			194
ITEM 14.			PRINCIPAL ACCOUNTING FEES AND SERVICES			195
PART IV
ITEM 15.			EXHIBITS, FINANCIAL STATEMENT SCHEDULES			196
ITEM 16.			FORM 10-K SUMMARY			201
SIGNATURES						202
			Constellation Energy Corporation			202
			Constellation Energy Generation, LLC			203

GLOSSARY OF TERMS AND ABBREVIATIONS
Constellation Energy Corporation and Related Entities
CEG Parent						Constellation Energy Corporation
Constellation						Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC)
Registrants						CEG Parent and Constellation, collectively
Exelon						Exelon Corporation
ComEd						Commonwealth Edison Company
PECO						PECO Energy Company
BGE						Baltimore Gas and Electric Company
Pepco Holdings or PHI						Pepco Holdings LLC (formerly Pepco Holdings, Inc.)
Pepco						Potomac Electric Power Company
DPL						Delmarva Power & Light Company
ACE						Atlantic City Electric Company
Antelope Valley						Antelope Valley Solar Ranch One
BSC						Exelon Business Services Company, LLC
CENG						Constellation Energy Nuclear Group, LLC
CR						Constellation Renewables, LLC (formerly ExGen Renewables IV, LLC)
CRP						Constellation Renewables Partners, LLC (formerly ExGen Renewables Partners, LLC)
FitzPatrick						James A. FitzPatrick nuclear generating station
Ginna						R. E. Ginna nuclear generating station
NER						NewEnergy Receivables LLC
NMP						Nine Mile Point nuclear generating station
Pepco Energy Services or PES						Pepco Energy Services, Inc. and its subsidiaries
RPG						Renewable Power Generation, LLC
SolGen						SolGen, LLC
TMI						Three Mile Island nuclear facility

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
AEC						Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AESO						Alberta Electric Systems Operator
ARC						Asset Retirement Cost
ARO						Asset Retirement Obligation
ASA						Asset Sale Agreement
Bcf						Billion cubic feet
Brookfield Renewable						Brookfield Renewable Partners, L.P.
CAIDI						Customer Average Interruption Duration Index
CAISO						California ISO
CERCLA						Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
C&I						Commercial and Industrial
Clean Air Act						Clean Air Act of 1963, as amended
Clean Energy Law						Illinois Public Act 102-0062 signed into law on September 15, 2021
Clean Water Act						Federal Water Pollution Control Amendments of 1972, as amended
CMC						Carbon Mitigation Credit
CODM						Chief Operating Decision Maker
CORe						Constellation Offsite Renewables
DCPSC						District of Columbia Public Service Commission
DEPSC						Delaware Public Service Commission
DOE						United States Department of Energy
DOEE						Department of Energy & Environment
DOJ						United States Department of Justice
DPP						Deferred Purchase Price
EDF						Electricite de France SA and its subsidiaries
EFEC						Emissions-Free Energy Certificate
EIMA						Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EPA						United States Environmental Protection Agency
ERCOT						Electric Reliability Council of Texas
ERISA						Employee Retirement Income Security Act of 1974, as amended
ESG						Environmental, Social, and Governance
EV						Electric Vehicle
FERC						Federal Energy Regulatory Commission
Form 10						Amendment Number 2 to our General Form for Registration of Securities on Form 10, filed with the SEC on December 20, 2021 and declared effective by the SEC on December 29, 2021, as supplemented by Exhibit 99.1 to our Current Report on Form 8-K, filed with the SEC on January 28, 2022.
Former PECO Units						Limerick, Peach Bottom, and Salem nuclear generating units
Former ComEd Units						Braidwood, Byron, Dresden, LaSalle and Quad Cities nuclear generating units
FRCC						Florida Reliability Coordinating Council
FRR						Fixed Resource Requirement
GAAP						Generally Accepted Accounting Principles in the United States
GHG						Greenhouse Gas

GWh						Gigawatt hour
ICC						Illinois Commerce Commission
ICE						Intercontinental Exchange
IPA						Illinois Power Agency
IRC						Internal Revenue Code
IRS						Internal Revenue Service
ISO						Independent System Operator
ISO-NE						ISO New England Inc.
kWh						Kilowatt-hour
LIBOR						London Interbank Offered Rate
LIPA						Long Island Power Authority
LLRW						Low-Level Radioactive Waste
LTIP						Long-Term Incentive Plan
MATS						U.S. EPA Mercury and Air Toxics Standards
MDE						Maryland Department of the Environment
MDPSC						Maryland Public Service Commission
MISO						Midcontinent Independent System Operator, Inc.
MOPR						Minimum Offer Price Rule
MPSC						Missouri Public Service Commission
MW						Megawatt
MWh						Megawatt hour
NAV						Net Asset Value
NDT						Nuclear Decommissioning Trust
NEIL						Nuclear Electric Insurance Limited
NERC						North American Electric Reliability Corporation
NGX						Natural Gas Exchange, Inc.
NJDEP						New Jersey Department of Environmental Protection
Non-Regulatory Agreement Units						Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NOSA						Nuclear Operating Services Agreement
NPDES						National Pollutant Discharge Elimination System
NPNS						Normal Purchase Normal Sale scope exception
NRC						Nuclear Regulatory Commission
NWPA						Nuclear Waste Policy Act of 1982
NYISO						New York ISO
NYMEX						New York Mercantile Exchange
NYPSC						New York Public Service Commission
OPEB						Other Postretirement Employee Benefits
PA DEP						Pennsylvania Department of Environmental Protection
PAPUC						Pennsylvania Public Utility Commission
PCAOB						Public Company Accounting Oversight Board
PG&E						Pacific Gas and Electric Company
PJM						PJM Interconnection, LLC
PPA						Power Purchase Agreement
PP&E						Property, Plant, and Equipment
Price-Anderson Act						Price-Anderson Nuclear Industries Indemnity Act of 1957
PRP						Potentially Responsible Parties
PSDAR						Post-shutdown Decommissioning Activities Report

PSEG						Public Service Enterprise Group Incorporated
PUCT						Public Utility Commission of Texas
PV						Photovoltaic
RCRA						Resource Conservation and Recovery Act of 1976, as amended
REC						Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
Regulatory Agreement Units						Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
RFP						Request for Proposal
RGGI						Regional Greenhouse Gas Initiative
RIN						Renewable Identification Number
RMC						Risk Management Committee
RNF						Revenue Net of Purchased Power and Fuel Expense
ROE						Return on equity
ROU						Right-of-use
RPS						Renewable Energy Portfolio Standards
RTO						Regional Transmission Organization
S&P						Standard & Poor’s Ratings Services
SAIFI						System Average Interruption Frequency Index
SEC						United States Securities and Exchange Commission
SERC						SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNF						Spent Nuclear Fuel
SOFR						Secured Overnight Financing Rate
SOS						Standard Offer Service
SPP						Southwest Power Pool
STEM						Science, Technology, Engineering, and Mathematics
TWh						Terawatt-hour
U.S. Court of Appeals for the D.C. Circuit						United States Court of Appeals for the District of Columbia Circuit
VIE						Variable Interest Entity
WECC						Western Electric Coordinating Council
ZEC						Zero Emission Credit
ZES						Zero Emission Standard

FILING FORMAT

This combined Annual Report on Form 10-K is being filed separately by Constellation Energy Corporation and Constellation Energy Generation, LLC, (Registrants). Information contained herein relating to any individual Registrant is filed by the Registrant on its own behalf.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements.

The factors that could cause actual results to differ materially from the forward-looking statements made by us include those factors discussed herein, including those factors discussed in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies, and (d) other factors discussed in filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.

WHERE TO FIND MORE INFORMATION

The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and our website at www.ConstellationEnergy.com. Information contained on our website shall not be deemed incorporated into, or to be a part of, this Report.

PART I

General

On February 21, 2021, the board of directors of Exelon Corporation (“Exelon”) authorized management to pursue a plan to separate its competitive generation and customer-facing energy businesses, conducted through Constellation Energy Generation, LLC (“Constellation”, formerly Exelon Generation Company, LLC) and its subsidiaries, into an independent, publicly traded company. Constellation Energy Corporation (“CEG Parent” or the “Company”), a Pennsylvania corporation and a direct, wholly owned subsidiary of Exelon, was newly formed for the purpose of separation and had not engaged in any activities except in preparation for the distribution. On February 1, 2022, Exelon completed the separation by distributing all the outstanding shares of the Company’s common stock, on a pro rata basis to the holders of Exelon’s common stock, with the Company holding all the interests in Constellation previously held by Exelon. As of 2002, Constellation has been an individual registrant since the registration of their public debt securities under the Securities Act. As an individual registrant, Constellation has historically filed consolidated financial statements to reflect their financial position and operating results as a stand-alone, wholly owned subsidiary of Exelon. The consolidated financial information presented in this Annual Report on Form 10-K for 2021 represents twelve months of information for Constellation.

References in this report to "we," "our," "us" and "the Company" are to Constellation and/or its subsidiaries, as apparent in the context. See Glossary for defined terms.

Our Business

We are America’s leading clean energy company, based on the production of carbon-free electricity. We are the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations and a range of wholesale customers (such as municipalities, cooperatives, and other strategics) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets. We produced nearly 10% of the nation's carbon-free energy (based on generation output of electricity) based on published reports on energy delivery by the U.S. Energy Information Administration, making us an important partner to businesses and state and local governments that are setting ambitious carbon-reduction goals and seeking long-term solutions to the climate crisis. We operate in 48 states, Canada and now employ approximately 12,700 people after separation.

We are differentiated by owning the cleanest generation fleet in the country. We are committed to a clean energy future, and we believe our generation fleet is essential to helping meet clean energy targets, at both the state and national level. We are uniquely positioned through the pairing of our clean energy fleet with our customer-facing business. Our customer-facing business is one of the nation's largest competitive energy suppliers, offering innovative options along the sustainability continuum to meet customer clean energy and climate goals.

Our Operations

We operate the largest carbon-free generation fleet in the nation and are one of the largest competitive electric generation companies in the country, as measured by owned and contracted MW. Collectively, the combined fleet is nearly 90% carbon-free (based on generation output of electricity) and is the fourth largest generation portfolio in the U.S. in terms of total generation with meaningful geographic diversity.

At December 31, 2021, our generating resources consisted of the following:

Type of Capacity			MW
Owned generation assets(a)
Nuclear			20,899
Natural gas and oil			8,819
Renewable(b)			2,682
Owned generation assets			32,400
Contracted generation(c)			4,102
Total generating resources			36,502

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(a)Net generation capacity is stated at proportionate ownership share. See ITEM 2. PROPERTIES for additional information.

(b)Includes wind, hydroelectric, and solar generating assets.

(c)Electric supply procured under unit-specific agreements.

The following map illustrates the locations of our generation facilities as of December 31, 2021:

The Company's Generation Fleet Map**(a)**

Owned Assets**(b)**

Nuclear Wind

Gas/Other Solar

Hydro Other Renewables

---

(a)Note: One symbol is included per location. Some locations may have multiple generating units. Locations in tight geographic proximity may appear as one symbol. Units that are not currently operational are not captured.

(b)Does not reflect Grand Prairie Generating Station (Gas/other), located in Alberta, Canada.

We have five reportable segments, as described in the table below, representing the different geographical areas in which our owned generating resources are located, and our customer-facing activities are conducted.

Segment						Net Generation Capacity (MW)****(a)						% of Net Generation Capacity						Geographical Area
Mid-Atlantic						10,508						32		%				Eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia, and parts of Pennsylvania and North Carolina
Midwest						11,898						37		%				Western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region
New York						3,093						10		%				NYISO
ERCOT						3,610						11		%				Electric Reliability Council of Texas
Other Power Regions						3,291						10		%				New England, South, West, and Canada
Total						32,400						100		%

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(a)Net generation capacity is stated at proportionate ownership share as of December 31, 2021. See ITEM 2. PROPERTIES for additional information.

The following table shows sources of electric supply in GWh for 2021 and 2020:

			Source of Electric Supply
			2021						2020
Nuclear(a)			174,987						175,085
Purchases — non-trading portfolio			67,605						79,972
Natural gas and oil			19,960						19,501
Renewable(b)			6,577						7,052
Total Supply			269,129						281,610

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(a)Includes the proportionate share of output where we have an undivided ownership interest

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We operate in a complex market and regulatory environment that involves significant risks, many of which are beyond our direct control. Such risks, which could negatively affect our consolidated financial statements, fall primarily under the categories below:

Risks related to market and financial factors primarily include:

• the price of fuels, in particular the price of natural gas, which affects power prices,

• the generation resources in the markets in which we operate,

• our ability to operate our generating assets, our ability to access capital markets, and the impacts on our results of operations due to the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19),

• the impacts of on-going competition, and

• emerging technologies and business models, including those related to climate change mitigation and transition to a low carbon economy.

Risks related to legislative, regulatory, and legal factors primarily include changes to, and compliance with, the laws and regulations that govern:

• the design of power markets,

• the renewal of permits and operating licenses,

• environmental and climate policy, including ZEC and CMC programs, and

• tax policy.

Risks related to operational factors primarily include:

• changes in the global climate could produce extreme weather events, which could put our facilities at risk, and such changes could also affect the levels and patterns of demand for energy and related services,

• the safe, secure and effective operation of our nuclear facilities and the ability to effectively manage the associated decommissioning obligations,

• the ability of energy transmission and distribution companies to maintain the reliability, resiliency and safety of their energy delivery systems, which could affect our ability to deliver energy to our customers and affect our operating costs, and

• physical and cyber security risks for us as an owner-operator of generation facilities and as a participant in commodities trading.

Risks related to our separation from Exelon primarily include:

• challenges to achieving the benefits of separation, including limited business diversification, loss of economies of scale in sourcing goods and services, and the need to replicate certain services provided by Exelon (such as treasury, finance, human resources, investor relations, legal, information technology, security, and supply), which will require additional resources and expense,

• performance by Exelon and us under the transaction agreements, including indemnification responsibilities tied to the allocation of businesses and liabilities, and

• limitations on future capital-raising or strategic transactions during the two-year period following the distribution arising from the need to protect the tax-free treatment of the distribution.

Risks related to our common stock primarily include:

• following the separation, a trading market for our common stock will have only been initiated recently and our stock price may fluctuate significantly and

• certain anti-takeover provisions in our charter and bylaws that could have the effect of delaying or discouraging an acquisition of our company or a change in our management.

Risks Related to Market and Financial Factors

We are exposed to price volatility associated with both the wholesale and retail power markets and the procurement of nuclear and fossil fuels.

We are exposed to commodity price risk for natural gas and the unhedged portion of our electricity generation supply portfolio. Our earnings and cash flows are therefore exposed to variability of spot and forward market prices in the markets in which we operate.

Price of Fuels. The spot market price of electricity for each hour is generally determined by the marginal cost of supplying the next unit of electricity to the market during that hour. Thus, the market price of power is affected by the market price of the marginal fuel used to generate the electricity unit.

Cost of Fuel. We depend on nuclear fuel and fossil fuels to operate most of our generating facilities. The supply markets for nuclear fuel, natural gas and oil are subject to price fluctuations, availability restrictions, counterparty default, and geopolitical risk including the current Russia Ukraine conflict and United States sanctions against Russia.

Demand and Supply. The market price for electricity is also affected by changes in the demand for electricity and the available supply of electricity. Unfavorable economic conditions, milder than normal weather, and the growth of energy efficiency and demand response programs can depress demand. In addition, in some markets, the supply of electricity can exceed demand during some hours of the day, resulting in loss of revenue for base-load generating plants such as our nuclear plants. Conversely, new demand sources such as electrification of transportation could increase demand and change demand patterns.

Retail Competition. Our retail operations compete for customers in a competitive environment, which affects the margins we can earn and the volumes we are able to serve. In periods of sustained low natural gas and power prices and low market volatility, retail competitors can aggressively pursue market share because the barriers to entry can be low and wholesale generators (including us) use their retail operations to hedge generation output.

The impact of sustained low market prices or depressed demand and over-supply could be emphasized given our concentration of base-load electric generating capacity within primarily two geographic market regions, namely the Midwest and the Mid-Atlantic. These impacts could adversely affect our ability to reduce debt and provide attractive shareholder returns. In addition, such conditions may no longer support the continued operation of certain generating facilities, which could adversely affect our financial statements primarily through accelerated depreciation and amortization expenses and one-time charges. See Note 7 — Early Plant Retirements of the Notes to Consolidated Financial Statements for additional information.

Market Designs. The wholesale markets vary from region to region with distinct rules, practices and procedures. Changes in these market rules, problems with rule implementation, or failure of any of these markets could adversely affect our business. In addition, a significant decrease in market participation could affect market liquidity and have a detrimental effect on market stability.

We are potentially affected by emerging technologies that could over time affect or transform the energy industry.

Advancements in power generation technology, including commercial and residential solar generation installations and commercial micro turbine installations, are improving the cost-effectiveness of customer self-supply of electricity. Improvements in energy storage technology, including batteries and fuel cells, could also better position customers to meet their around-the-clock electricity requirements. Improvements in energy efficiency of lighting, appliances, equipment and building materials will also affect energy consumption by customers. Changes in power generation, storage, and use technologies could have significant effects on customer behaviors and their energy consumption.

These developments could affect the price of energy, levels of customer-owned generation, customer expectations and current business models and make portions of our generation facilities uneconomic prior to the end of their useful lives. These technologies could also result in further declines in commodity prices or demand for delivered energy. Each of these factors could affect our consolidated financial statements through, among other things, reduced operating revenues, increased operating and maintenance expenses, increased capital expenditures, and potential asset impairment charges or accelerated depr

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None.

The following table presents our interests in net electric generating capacity by station at December 31, 2021:

Station**(a)**						Location						No. of Units						Percent Owned**(b)**						Primary Fuel Type						Primary Dispatch Type**(c)**						Net Generation Capacity (MW)****(d)
Midwest
Braidwood						Braidwood, IL						2												Uranium						Base-load						2,386
Byron						Byron, IL						2												Uranium						Base-load						2,347			(e)
LaSalle						Seneca, IL						2												Uranium						Base-load						2,320
Dresden						Morris, IL						2												Uranium						Base-load						1,845			(e)
Quad Cities						Cordova, IL						2						75						Uranium						Base-load						1,403			(f)
Clinton						Clinton, IL						1												Uranium						Base-load						1,080
Michigan Wind 2						Sanilac Co., MI						50						51			(g)			Wind						Intermittent						46			(f)
Beebe						Gratiot Co., MI						34						51			(g)			Wind						Intermittent						42			(f)
Michigan Wind 1						Huron Co., MI						46						51			(g)			Wind						Intermittent						35			(f)
Harvest 2						Huron Co., MI						33						51			(g)			Wind						Intermittent						30			(f)

Station**(a)**						Location						No. of Units						Percent Owned**(b)**						Primary Fuel Type						Primary Dispatch Type**(c)**						Net Generation Capacity (MW)****(d)
Harvest						Huron Co., MI						32						51			(g)			Wind						Intermittent						27			(f)
Beebe 1B						Gratiot Co., MI						21						51			(g)			Wind						Intermittent						26			(f)
Blue Breezes						Faribault Co., MN						2												Wind						Intermittent						3
CP Windfarm						Faribault Co., MN						2						51			(g)			Wind						Intermittent						2			(f)
Southeast Chicago						Chicago, IL						8												Gas						Peaking						296			(h)
Clinton Battery Storage						Blanchester, OH						1												Energy Storage						Peaking						10
Total Midwest																																				11,898
Mid-Atlantic
Limerick						Sanatoga, PA						2												Uranium						Base-load						2,317
Calvert Cliffs						Lusby, MD						2												Uranium						Base-load						1,789
Peach Bottom						Delta, PA						2						50						Uranium						Base-load						1,324			(f)
Salem						Lower Alloways Creek Township, NJ						2						42.59						Uranium						Base-load						995			(f)
Conowingo						Darlington, MD						11												Hydroelectric						Base-load						572
Criterion						Oakland, MD						28						51			(g)			Wind						Intermittent						36			(f)
Fair Wind						Garrett County, MD						12												Wind						Intermittent						30
Fourmile Ridge						Garrett County, MD						16						51			(g)			Wind						Intermittent						20			(f)
Solar Horizons						Emmitsburg, MD						1						51			(g)			Solar						Intermittent						16			(f)
Solar New Jersey 3						Middle Township, NJ						4						51			(g)			Solar						Intermittent						2			(f)
Muddy Run						Drumore, PA						8												Hydroelectric						Intermediate						1,070
Eddystone 3, 4						Eddystone, PA						2												Oil/Gas						Peaking						760
Perryman						Aberdeen, MD						5												Oil/Gas						Peaking						404
Croydon						West Bristol, PA						8												Oil						Peaking						391
Handsome Lake						Kennerdell, PA						5												Gas						Peaking						268
Richmond						Philadelphia, PA						2												Oil						Peaking						98
Philadelphia Road						Baltimore, MD						4												Oil						Peaking						61
Eddystone						Eddystone, PA						4												Oil						Peaking						60
Delaware						Philadelphia, PA						4												Oil						Peaking						56
Southwark						Philadelphia, PA						4												Oil						Peaking						52
Falls						Morrisville, PA						3												Oil						Peaking						51
Moser						Lower Pottsgrove Twp., PA						3												Oil						Peaking						51
Chester						Chester, PA						3												Oil						Peaking						39
Schuylkill						Philadelphia, PA						2												Oil						Peaking						30
Salem						Lower Alloways Creek Township, NJ						1						42.59						Oil						Peaking						16			(f)
Total Mid-Atlantic																																				10,508
ERCOT
Whitetail						Webb County, TX						57						51			(g)			Wind						Intermittent						47			(f)

Station**(a)**						Location						No. of Units						Percent Owned**(b)**						Primary Fuel Type						Primary Dispatch Type**(c)**						Net Generation Capacity (MW)****(d)
Sendero						Jim Hogg and Zapata County, TX						39						51			(g)			Wind						Intermittent						40			(f)
Colorado Bend II						Wharton, TX						3												Gas						Intermediate						1,143
Wolf Hollow II						Granbury, TX						3												Gas						Intermediate						1,115
Handley 3						Fort Worth, TX						1												Gas						Intermediate						395
Handley 4, 5						Fort Worth, TX						2												Gas						Peaking						870
Total ERCOT																																				3,610
New York
Nine Mile Point						Scriba, NY						2									(i)			Uranium						Base-load						1,675			(f)
FitzPatrick						Scriba, NY						1												Uranium						Base-load						842
Ginna						Ontario, NY						1												Uranium						Base-load						576
Total New York																																				3,093
Other
Antelope Valley						Lancaster, CA						1												Solar						Intermittent						242
Bluestem						Beaver County, OK						60						51			(g)(j)			Wind						Intermittent						101			(f)
Shooting Star						Kiowa County, KS						65						51			(g)			Wind						Intermittent						53			(f)
Sacramento PV Energy						Sacramento, CA						4						51			(g)			Solar						Intermittent						30			(f)
Bluegrass Ridge						King City, MO						27						51			(g)			Wind						Intermittent						29			(f)
Conception						Barnard, MO						24						51			(g)			Wind						Intermittent						26			(f)
Cow Branch						Rock Port, MO						24						51			(g)			Wind						Intermittent						26			(f)
Mountain Home						Glenns Ferry, ID						20						51			(g)			Wind						Intermittent						21			(f)
High Mesa						Elmore Co., ID						19						51			(g)			Wind						Intermittent						20			(f)
Echo 1						Echo, OR						21						50.49			(g)			Wind						Intermittent						17			(f)
Cassia						Buhl, ID						14						51			(g)			Wind						Intermittent						15			(f)
Wildcat						Lovington, NM						13						51			(g)			Wind						Intermittent						14			(f)
Echo 2						Echo, OR						10						51			(g)			Wind						Intermittent						10			(f)
Tuana Springs						Hagerman, ID						8						51			(g)			Wind						Intermittent						9			(f)
Greensburg						Greensburg, KS						10						51			(g)			Wind						Intermittent						6			(f)
Echo 3						Echo, OR						6						50.49			(g)			Wind						Intermittent						5			(f)
Three Mile Canyon						Boardman, OR						6						51			(g)			Wind						Intermittent						5			(f)
Loess Hills						Rock Port, MO						4												Wind						Intermittent						5
Denver Airport Solar						Denver, CO						1						51			(g)			Solar						Intermittent						4			(f)
Mystic 8, 9						Charlestown, MA						6												Gas						Intermediate						1,417			(e)
Hillabee						Alexander City, AL						3												Gas						Intermediate						753
Wyman 4						Yarmouth, ME						1						5.9						Oil						Intermediate						34			(f)
West Medway II						West Medway, MA						2												Oil/Gas						Peaking						189
West Medway						West Medway, MA						3												Oil						Peaking						124
Grand Prairie						Alberta, Canada						1												Gas						Peaking						105
Framingham						Framingham, MA						3												Oil						Peaking						31

Station**(a)**						Location						No. of Units						Percent Owned**(b)**						Primary Fuel Type						Primary Dispatch Type**(c)**						Net Generation Capacity (MW)****(d)
Total Other																																				3,291
Total																																				32,400

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(a)All nuclear stations are boiling water reactors except Braidwood, Byron, Calvert Cliffs, Ginna, and Salem, which are pressurized water reactors.

(b)100%, unless otherwise indicated.

(c)Base-load units are plants that normally operate to take all or part of the minimum continuous load of a system and, consequently, produce electricity at an essentially constant rate. Intermittent units are plants with output controlled by the natural variability of the energy resource rather than dispatched based on system requirements. Intermediate units are plants that normally operate to take load of a system during the daytime higher load hours and, consequently, produce electricity by cycling on and off daily. Peaking units consist of lower-efficiency, quick response steam units, gas turbines and diesels normally used during the maximum load periods.

(d)For nuclear stations, capacity reflects the annual mean rating. Fossil stations and wind and solar facilities reflect a summer rating.

(e)On August 9, 2020, we announced we would permanently cease generation operations at Byron and Dresden nuclear facilities in 2021 and Mystic Unit 8 and 9 in 2024. On September 15, 2021, we reversed the previous decision to retire Byron and Dresden. See Note 7 — Early Plant Retirements of the Notes to the Consolidated Financial Statements for additional information.

(f)Net generation capacity is stated at proportionate ownership share.

(g)Reflects the prior sale of 49% of CRP to a third-party. See Note 21 — Variable Interest Entities of the Notes to Consolidated Financial Statements for additional information.

(h)We have deactivated the site and are evaluating for potential return of service or retirement beyond 2023.

(i)We wholly own Nine Mile Point Unit 1 and have an 82% undivided ownership interest in Nine Mile Point Unit 2.

(j)CRP owns 100% of the Class A membership interests and a tax equity investor owns 100% of the Class B membership interests of the entity that owns the Bluestem generating assets.

The net generation capability available for operation at any time may be less due to regulatory restrictions, transmission congestion, fuel restrictions, efficiency of cooling facilities, level of water supplies, or generating units being temporarily out of service for inspection, maintenance, refueling, repairs, or modifications required by regulatory authorities.

We maintain property insurance against loss or damage to our principal plants and properties by fire or other perils, subject to certain exceptions. For additional information regarding nuclear insurance of generating facilities, see ITEM 1. — BUSINESS — General. For our insured losses, we are self-insured to the extent that any losses are within the policy deductible or exceed the amount of insurance maintained. Any such losses could have a material adverse effect on our consolidated financial condition or results of operations.