Item 1. General

General

Corporate Structure and Business and Other Information

As of December 31, 2021, Exelon was a utility services holding company engaged in the generation, delivery, and marketing of energy through Generation and the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies with the resources necessary to best serve customers and sustain long-term investment and operating excellence. The separation was completed on February 1, 2022 and gives each company the financial and strategic independence to focus on its specific customer needs, while executing its core business strategy. See Note 26 – Separation of the Combined Notes to Consolidated Financial Statements for additional information.

Name of Registrant / Subsidiary						Business						Service Territories
Commonwealth Edison Company (registrant)						Purchase and regulated retail sale of electricity						Northern Illinois, including the City of Chicago
						Transmission and distribution of electricity to retail customers
PECO Energy Company (registrant)						Purchase and regulated retail sale of electricity and natural gas						Southeastern Pennsylvania, including the City of Philadelphia (electricity)
						Transmission and distribution of electricity and distribution of natural gas to retail customers						Pennsylvania counties surrounding the City of Philadelphia (natural gas)
Baltimore Gas and Electric Company (registrant)						Purchase and regulated retail sale of electricity and natural gas						Central Maryland, including the City of Baltimore (electricity and natural gas)
						Transmission and distribution of electricity and distribution of natural gas to retail customers
Pepco Holdings LLC (registrant)						Utility services holding company engaged, through its reportable segments Pepco, DPL, and ACE						Service Territories of Pepco, DPL, and ACE
Potomac Electric Power Company (registrant)						Purchase and regulated retail sale of electricity						District of Columbia and Major portions of Montgomery and Prince George’s Counties, Maryland
						Transmission and distribution of electricity to retail customers
Delmarva Power & Light Company (registrant)						Purchase and regulated retail sale of electricity and natural gas						Portions of Delaware and Maryland (electricity)
						Transmission and distribution of electricity and distribution of natural gas to retail customers						Portions of New Castle County, Delaware (natural gas)
Atlantic City Electric Company (registrant)						Purchase and regulated retail sale of electricity						Portions of Southern New Jersey
						Transmission and distribution of electricity to retail customers
Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC) (subsidiary)						Generation, physical delivery, and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy, and other energy-related products and services.						Five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions

Business Services

Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology, and supply management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies. The costs of BSC and PHISCO are directly charged or allocated to the applicable subsidiaries. The results of Exelon’s corporate

operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.

Generation

Generation, one of the largest competitive electric generation companies in the United States as measured by owned and contracted MW, physically delivers and markets power across multiple geographic regions through its customer-facing business, Constellation. Constellation sells electricity and natural gas, including renewable energy and associated attributes, in competitive domestic energy markets to both wholesale and retail customers. Generation leverages its generation portfolio to serve customers under both long-term and short-term contracts, as well as spot market sales. Generation operates in well-developed energy markets and employs integrated and ratable hedging strategies to manage commodity price volatility. Generation's fleet also provides geographic and supply source diversity. Generation’s customers include distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers in competitive markets. Generation’s customer-facing activities foster development and delivery of other innovative energy-related products and services for its customers.

Generation is a public utility as defined under the Federal Power Act and is subject to FERC’s exclusive ratemaking jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce. Under the Federal Power Act, FERC has the authority to grant or deny market-based rates for sales of energy, capacity, and ancillary services to ensure that such sales are just and reasonable. FERC’s jurisdiction over ratemaking includes the authority to suspend the market-based rates of utilities and set cost-based rates should FERC find that its previous grant of market-based rates authority is no longer just and reasonable. Other matters subject to FERC jurisdiction include, but are not limited to, third-party financings; review of mergers; dispositions of jurisdictional facilities and acquisitions of securities of another public utility or an existing operational generating facility; affiliate transactions; intercompany financings and cash management arrangements; certain internal corporate reorganizations; and certain holding company acquisitions of public utility and holding company securities.

RTOs and ISOs exist in a number of regions to provide transmission service across multiple transmission systems. FERC has approved PJM, MISO, ISO-NE, and SPP as RTOs and CAISO and NYISO as ISOs. These entities are responsible for regional planning, managing transmission congestion, developing wholesale markets for energy and capacity, maintaining reliability, market monitoring, the scheduling of physical power sales brokered through ICE and NYMEX, and the elimination or reduction of redundant transmission charges imposed by multiple transmission providers when wholesale customers take transmission service across several transmission systems. ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs in markets regulated by FERC.

Specific operations of Generation are also subject to the jurisdiction of various other Federal, state, regional, and local agencies, including the NRC, and Federal and state environmental protection agencies. Additionally, Generation is subject to NERC mandatory reliability standards, which protect the nation’s bulk power system against potential disruptions from cyber and physical security breaches.

Generating Resources

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

Type of Capacity			MW
Owned generation assets(a)
Nuclear			20,899
Fossil (primarily 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—Generation for additional information.

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

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

Generation has five reportable segments, as described in the table below, representing the different geographical areas in which Generation’s owned generating resources are located and Generation's 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. See ITEM 2. PROPERTIES—Generation for additional information.

Nuclear Facilities

Generation has ownership interests in thirteen nuclear generating stations currently in service, consisting of 23 units with an aggregate of 20,899 MW of capacity. These stations exclude TMI located in Middletown, Pennsylvania, which permanently ceased generation operations on September 20, 2019 and Oyster Creek located in Forked River, New Jersey, which permanently ceased generation operations on September 17, 2018 and was subsequently sold to Holtec International (Holtec) on July 1, 2019. Generation wholly owns all of its nuclear generating stations, except for undivided ownership interests in four jointly-owned nuclear stations: Quad Cities (75% ownership), Peach Bottom (50% ownership), Salem (42.59% ownership), and Nine Mile Point Unit 2 (82% ownership), which are consolidated in Exelon’s financial statements relative to its proportionate ownership interest in each unit.

Generation had a 50.01% membership interest in CENG, a joint venture with EDF, which wholly owns the Calvert Cliffs and Ginna nuclear stations and Nine Mile Point Unit 1, in addition to an 82% undivided ownership interest in Nine Mile Point Unit 2. EDF had the option to sell its 49.99% equity interest in CENG to Generation exercisable beginning on January 1, 2016 and thereafter until June 30, 2022. On August 6, 2021, Generation and

EDF entered into a settlement agreement pursuant to which Generation, through a wholly owned subsidiary, purchased EDF’s equity interest in CENG for a net purchase price of $885 million.

See ITEM 2. PROPERTIES for additional information on Generation's nuclear facilities, Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on the acquisition of EDF's equity interest in CENG and the disposition of Oyster Creek, and Note 23 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding the CENG consolidation.

Generation’s nuclear generating stations are all operated by Generation, with the exception of the two units at Salem, which are operated by PSEG Nuclear, LLC (PSEG Nuclear), an indirect, wholly owned subsidiary of PSEG. In 2021, 2020, and 2019 electric supply (in GWh) generated from the nuclear generating facilities was 65%, 62%, and 64%, respectively, of Generation’s total electric supply, which also includes fossil, hydroelectric, and renewable generation and electric supply purchased for resale. Generation’s wholesale and retail power marketing activities are, in part, supplied by the output from the nuclear generating stations. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information of Generation’s electric supply sources.

Nuclear Operations

Capacity factors, which are significantly affected by the number and duration of refueling and non-refueling outages, can have a significant impact on Generation’s results of operations. Generation’s operations from its nuclear plants have historically had minimal environmental impact and the plants have a safe operating history.

Generation manages its scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable generation base for Generation’s wholesale and retail power marketing activities. During scheduled refueling outages, Generation performs maintenance and equipment upgrades in order to minimize the occurrence of unplanned outages and to maintain safe, reliable operations. During 2021, 2020, and 2019, the nuclear generating facilities operated by Generation, achieved capacity factors of 94.5%, 95.4%, and 95.7%, respectively, at ownership percentage.

In addition to the maintenance and equipment upgrades performed by Generation during scheduled refueling outages, Generation has extensive operating and security procedures in place to ensure the safe operation of the nuclear units. Generation also has extensive safety systems in place to protect the plant, personnel, and surrounding area in the unlikely event of an accident or other incident.

Regulation of Nuclear Power Generation

Generation is subject to the jurisdiction of the NRC with respect to the operation of its nuclear generating stations, including the licensing for operation of each unit. The NRC subjects nuclear generating stations to continuing review and regulation covering, among other things, operations, maintenance, emergency planning, security, and environmental and radiological aspects of those stations. As part of its reactor oversight process, the NRC continuously assesses unit performance indicators and inspection results and communicates its assessment on a semi-annual basis. All nuclear generating stations operated by Generation are categorized by the NRC in the Licensee Response Column, which is the highest of five performance bands. The NRC may modify, suspend, or revoke operating licenses and impose civil penalties for failure to comply with the Atomic Energy Act or the terms of the operating licenses. Changes in regulations by the NRC may require a substantial increase in capital expenditures and/or operating costs for nuclear generating facilities.

Licenses

Generation has original 40-year operating licenses from the NRC for each of its nuclear units and has received 20-year operating license renewals from the NRC for all its nuclear units except Clinton. PSEG has received 20-year operating license renewals for Salem Units 1 and 2. Peach Bottom has received a second 20-year license renewal from the NRC for Units 2 and 3.

The following table summarizes the current license expiration dates for Generation’s operating nuclear facilities in service:

Station			Unit						In-Service Date**(a)**						Current License Expiration
Braidwood			1						1988						2046
			2						1988						2047
Byron			1						1985						2044
			2						1987						2046
Calvert Cliffs			1						1975						2034
			2						1977						2036
Clinton(b)			1						1987						2027
Dresden			2						1970						2029
			3						1971						2031
FitzPatrick			1						1975						2034
LaSalle			1						1984						2042
			2						1984						2043
Limerick			1						1986						2044
			2						1990						2049
Nine Mile Point			1						1969						2029
			2						1988						2046
Peach Bottom			2						1974						2053
			3						1974						2054
Quad Cities			1						1973						2032
			2						1973						2032
Ginna			1						1970						2029
Salem			1						1977						2036
			2						1981						2040

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(a)Denotes year in which nuclear unit began commercial operations.

(b)Although timing has been delayed, Generation currently plans to seek license renewal for Clinton and has received a Timely Renewal Exemption from the NRC that allows for the license renewal application to be filed in the first quarter of 2024.

The operating license renewal process takes approximately four to five years from the commencement of the renewal process, which includes approximately two years for Generation to develop the application and approximately two years for the NRC to review the application. Depreciation provisions are based on the estimated useful lives of the stations, which corresponds with the term of the NRC operating licenses denoted in the table above as of December 31, 2021. From August 27, 2020 through September 15, 2021, Byron and Dresden depreciation provisions were accelerated to reflect the previously announced shutdown dates of September 2021 and November 2021, respectively. On September 15, 2021, Generation updated the expected useful lives for both facilities to reflect the end of the available NRC operating license for each unit consistent with the table above. See Note 7 — Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information on Byron and Dresden.

Nuclear Waste Storage and Disposal

There are no facilities for the reprocessing or permanent disposal of SNF currently in operation in the United States, nor has the NRC licensed any such facilities. Generation currently stores all SNF generated by its nuclear generating facilities on-site in storage pools or in dry cask storage facilities. Since Generation’s SNF storage pools generally do not have sufficient storage capacity for the life of the respective plant, Generation has developed dry cask storage facilities to support operations.

As of December 31, 2021, Generation had approximately 89,400 SNF assemblies (21,900 tons) stored on site in SNF pools or wet and dry cask storage which includes SNF assemblies at Zion Station, for which Generation retains ownership and responsibility for the decommissioning of the Zion Independent Spent Fuel Storage Installation. All currently operating Generation-owned nuclear sites have on-site dry cask storage. TMI's on-site dry cask storage is projected to be in operation in 2022. On-site dry cask storage in concert with on-site storage pools will be capable of meeting all current and future SNF storage requirements at Generation’s sites through the end of the license renewal periods and through decommissioning.

For a discussion of matters associated with Generation’s contracts with the DOE for the disposal of SNF, see Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.

As a by-product of their operations, nuclear generating units produce LLRW. LLRW is accumulated at each generating station and permanently disposed of at licensed disposal facilities. The Federal Low-Level Radioactive Waste Policy Act of 1980 provides that states may enter into agreements to provide regional disposal facilities for LLRW and restrict use of those facilities to waste generated within the region. Illinois and Kentucky have entered into such an agreement, although neither state currently has an operational site and none is anticipated to be operational for the next ten years.

Generation ships its Class A LLRW, which represents 93% of LLRW generated at its stations, to disposal facilities in Utah and South Carolina, which have enough storage capacity to store all Class A LLRW for the life of all stations in Generation's nuclear fleet. The disposal facility in South Carolina at present is only receiving LLRW from LLRW generators in South Carolina, New Jersey (which includes Salem), and Connecticut.

Generation utilizes on-site storage capacity at all its stations to store and stage for shipping Class B and Class C LLRW. Generation has a contract through 2040 to ship Class B and Class C LLRW to a disposal facility in Texas. The agreement provides for disposal of all current Class B and Class C LLRW currently stored at each station as well as the Class B and Class C LLRW generated during the term of the agreement. However, because the production of LLRW from Generation’s nuclear fleet will exceed the capacity at the Texas site (3.9 million curies for 15 years beginning in 2012), Generation will still be required to utilize on-site storage at its stations for Class B and Class C LLRW. Generation currently has enough storage capacity to store all Class B and Class C LLRW for the life of all stations in Generation’s nuclear fleet. Generation continues to pursue alternative disposal strategies for LLRW, including an LLRW reduction program to minimize on-site storage and cost impacts.

Nuclear Insurance

Generation is subject to liability, property damage, and other risks associated with major incidents at all of its nuclear stations. Generation has reduced its financial exposure to these risks through insurance and other industry risk-sharing provisions. See “Nuclear Insurance” within Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.

For information regarding property insurance, see ITEM 2. PROPERTIES — Generation. Generation is self-insured to the extent that any losses may exceed the amount of insurance maintained or are within the policy deductible for its insured losses.

Fossil and Renewable Facilities (including Hydroelectric)

Generation wholly owns all its fossil and renewable generating stations, except for: (1) Wyman; (2) certain wind project entities; and (3) CRP, which is owned 49% by another owner. See Note 23 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding CRP which is a VIE. Generation’s fossil and renewable generating stations are all operated by Generation, except for Wyman, which is operated by the principal owner, NextEra Energy Resources LLC, a subsidiary of the FPL Group, Inc. In 2021, 2020, and 2019, electric supply (in GWh) generated from owned fossil and renewable generating facilities was 10%, 9%, and 11%, respectively, of Generation’s total electric supply. Much of this output was dispatched to support Generation’s wholesale and retail power marketing activities. On March 31, 2021 and June 30, 2021, Generation completed the sale of a significant portion of its solar business and its interest in the Albany Green Energy biomass facility, respectively. See ITEM 2. PROPERTIES for additional information regarding Generation's electric generating facilities and Note 2 - Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on these dispositions.

Licenses

Fossil and renewable generation plants are generally not licensed, and, therefore, the decision on when to retire plants is, fundamentally, a commercial one. FERC has the exclusive authority to license most non-Federal hydropower projects located on navigable waterways or Federal lands, or connected to the interstate electric grid, which include Generation's Conowingo Hydroelectric Project (Conowingo) and Muddy Run Pumped Storage Facility Project (Muddy Run). Muddy Run's license expires on December 1, 2055 and Conowingo's on February 28, 2071. The stations are currently being depreciated over their estimated useful lives, which correspond with the license terms. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on Conowingo.

Insurance

Generation maintains business interruption insurance for its renewable projects, but not for its fossil and hydroelectric operations unless required by contract or financing agreements. See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on financing agreements. Generation maintains both property damage and liability insurance. For property damage and liability claims for these operations, Generation is self-insured to the extent that losses are within the policy deductible or exceed the amount of insurance maintained. For information regarding property insurance, see ITEM 2. PROPERTIES — Generation.

Contracted Generation

In addition to energy produced by owned generation assets, Generation sources electricity from plants it does not own under long-term contracts. The following tables summarize Generation’s long-term contracts to purchase unit-specific physical power with an original term in excess of one year in duration, by region, in effect as of December 31, 2021:

Region						Number of Agreements						Expiration Dates						Capacity (MW)
Mid-Atlantic						7						2022 - 2032						176
Midwest						3						2026 - 2032						351
New York						4						2022						26
ERCOT						5						2022 - 2035						864
Other Power Regions						12						2022 - 2033						2,685
Total						31												4,102

						2022						2023						2024						2025						2026						Thereafter						Total
Capacity Expiring (MW)						1,084						114						101						490						398						1,915						4,102

Fuel

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
Fossil (primarily 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 Generation has an undivided ownership interest in jointly-owned generating plants and includes the total output of plants that are fully consolidated.

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

The cycle of production and utilization of nuclear fuel includes the mining and milling of uranium ore into uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride, the enrichment of the uranium hexafluoride, and the fabrication of fuel assemblies. Generation has inventory in various forms and does not anticipate difficulty in obtaining the necessary uranium concentrates or conversion, enrichment, or fabrication services to meet the nuclear fuel requirements of its nuclear units.

Natural gas is procured through long-term and short-term contracts, as well as spot-market purchases. Fuel oil inventories are managed so that in the winter months sufficient volumes of fuel are available in the event of extreme weather conditions and during the remaining months to take advantage of favorable market pricing.

Generation uses financial instruments to mitigate price risk associated with certain commodity price exposures, using both over-the-counter and exchange-traded instruments. See ITEM 1A. RISK FACTORS, ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Critical Accounting Policies and Estimates and Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative financial instruments.

Power Marketing

Generation’s integrated business operations include physical delivery and marketing of power and natural gas. Generation largely obtains physical power supply from its owned and contracted generation in multiple geographic regions. The commodity risks associated with the output from owned and contracted generation is managed using various commodity transactions including sales to customers and its ratable hedging program. The main objective is to obtain low-cost energy supply to meet physical delivery obligations to both wholesale and retail customers. Generation sells electricity, natural gas, and other energy related products and solutions to various customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers in competitive markets.

Price and Supply Risk Management

Generation uses a combination of wholesale and retail customer load sales, as well as non-derivative and derivative contracts, including financially-settled swaps, futures contracts and swap options, and physical options and physical forward contracts, all with credit-approved counterparties, to hedge the price risk of the generation portfolio. Generation implements a three-year ratable sales plan to align its hedging strategy with its financial objectives. Generation may also enter into transactions that are outside of this ratable hedging program.

A portion of Generation’s hedging strategy may be implemented using fuel products based on assumed correlations between power and fuel prices. The risk management group monitors the financial risks of the wholesale and retail power marketing activities. Generation also uses financial and commodity contracts for proprietary trading purposes, but this activity accounts for only a small portion of Generation’s efforts. The

proprietary trading portfolio is subject to a risk management policy that includes stringent risk management limits. See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information.

Utility Registrants

Utility Operations

Service Territories and Franchise Agreements

The following table presents the size of service territories, populations of each service territory, and the number of customers within each service territory for the Utility Registrants as of December 31, 2021:

						ComEd						PECO						BGE						Pepco						DPL						ACE
Service Territories (in square miles)
Electric						11,450						2,100						2,300						650						5,400						2,750
Natural Gas						N/A						1,900						3,050						N/A						250						N/A
Total(a)						11,450						2,100						3,250						650						5,400						2,750
Service Territory Population (in millions)
Electric						9.3						4.0						3.0						2.4						1.5						1.2
Natural Gas						N/A						2.5						2.9						N/A						0.6						N/A
Total(b)						9.3						4.0						3.1						2.4						1.5						1.2
Main City						Chicago						Philadelphia						Baltimore						District of Columbia						Wilmington						Atlantic City
Main City Population						2.7						1.6						0.6						0.7						0.1						0.1
Number of Customers (in millions)
Electric						4.1						1.7						1.3						0.9						0.5						0.6
Natural Gas						N/A						0.5						0.7						N/A						0.1						N/A
Total(c)						4.1						1.7						1.3						0.9						0.5						0.6

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(a)The number of total service territory square miles counts once only a square mile that includes both electric and natural gas services, and thus does not represent the combined total square mileage of electric and natural gas service territories.

(b)The total service territory population counts once only an individual who lives in a region that includes both electric and natural gas services, and thus does not represent the combined total population of electric and natural gas service territories.

(c)The number of total customers counts once only a customer who is both an electric and a natural gas customer, and thus does not represent the combined total of electric customers and natural gas customers.

The Utility Registrants have the necessary authorizations to perform their current business of providing regulated electric and natural gas distribution services in the various municipalities and territories in which they now supply such services. These authorizations include charters, franchises, permits, and certificates of public convenience issued by local and state governments and state utility commissions. ComEd's, BGE's (gas), Pepco DC's, and ACE's rights are generally non-exclusive while PECO's, BGE's (electric), Pepco MD's, and DPL's rights are generally exclusive. Certain authorizations are perpetual while others have varying expiration dates. The Utility Registrants anticipate working with the appropriate governmental bodies to extend or replace the authorizations prior to their expirations.

Utility Regulations

State utility commissions regulate the Utility Registrants' electric and gas distribution rates and service, issuances of certain securities, and certain other aspects of the business. The following table outlines the state commissions responsible for utility oversight:

Registrant						Commission
ComEd						ICC
PECO						PAPUC
BGE						MDPSC
Pepco						DCPSC/MDPSC
DPL						DEPSC/MDPSC
ACE						NJBPU

The Utility Registrants are public utilities under the Federal Power Act subject to regulation by FERC related to transmission rates and certain other aspects of the utilities' business. The U.S. Department of Transportation also regulates pipeline safety and other areas of gas operations for PECO, BGE, and DPL. The U.S. Department of Homeland Security (Transportation Security Administration) provided new security directives in 2021 that regulate cyber risks for certain gas distribution operators. Additionally, the Utility Registrants are subject to NERC mandatory reliability standards, which protect the nation's bulk power system against potential disruptions from cyber and physical security breaches.

Seasonality Impacts on Delivery Volumes

The Utility Registrants' electric distribution volumes are generally higher during the summer and winter months when temperature extremes create demand for either summer cooling or winter heating. For PECO, BGE, and DPL, natural gas distribution volumes are generally higher during the winter months when cold temperatures create demand for winter heating.

ComEd, BGE, Pepco, DPL Maryland, and ACE have electric distribution decoupling mechanisms and BGE has a natural gas decoupling mechanism that eliminate the favorable and unfavorable impacts of weather and customer usage patterns on electric distribution and natural gas delivery volumes. As a result, ComEd's, BGE's, Pepco's, DPL Maryland's, and ACE's electric distribution revenues and BGE's natural gas distribution revenues are not materially impacted by delivery volumes. PECO's and DPL Delaware's electric distribution revenues and natural gas distribution revenues are impacted by delivery volumes.

Electric and Natural Gas Distribution Services

The Utility Registrants are allowed to recover reasonable costs and fair and prudent capital expenditures associated with electric and natural gas distribution services and earn a return on those capital expenditures, subject to commission approval. ComEd recovers costs through a performance-based rate formula. ComEd is required to file an update to the performance-based rate formula on an annual basis. On September 15, 2021, Illinois passed the Clean Energy Law, which contains requirements for ComEd to transition away from the performance-based rate formula by the end of 2022 and would allow for the submission of either a general rate or multi-year rate plan. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information. PECO's, BGE's, and DPL's electric and gas distribution costs and Pepco's and ACE's electric distribution costs have generally been recovered through traditional rate case proceedings. However, the MDPSC and the DCPSC allow utilities to file multi-year rate plans. In certain instances, the Utility Registrants use specific recovery mechanisms as approved by their respective regulatory agencies.

ComEd, Pepco, DPL and ACE customers have the choice to purchase electricity, and PECO and BGE customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. DPL customers, with the exception of certain commercial and industrial customers, do not have the choice to purchase natural gas from competitive natural gas suppliers. The Utility Registrants remain the distribution service providers for all customers and are obligated to deliver electricity and natural gas to customers in their respective service territories while charging a regulated rate for distribution service. In addition, the Utility Registrants also retain significant default service obligations to provide electricity to certain groups of customers in their respective service areas who do not choose a competitive electric generation supplier. PECO,

BGE, and DPL also retain significant default service obligations to provide natural gas to certain groups of customers in their respective service areas who do not choose a competitive natural gas supplier.

For customers that choose to purchase electric generation or natural gas from competitive suppliers, the Utility Registrants act as the billing agent and therefore do not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from a Utility Registrant, the Utility Registrants are permitted to recover the electricity and natural gas procurement costs from customers without mark-up or with a slight mark-up and therefore record the amounts in Operating revenues and Purchased power and fuel expense. As a result, fluctuations in electricity or natural gas sales and procurement costs have no significant impact on the Utility Registrants’ Net income.

See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Results of Operations and Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding electric and natural gas distribution services.

Procurement of Electricity and Natural Gas

The Utility Registrants' electric supply for its customers is primarily procured through contracts as required by their respective state commissions. The Utility Registrants procure electricity supply from various approved bidders, including Generation. RTO spot market purchases and sales are utilized to balance the utility electric load and supply as required. Charges incurred for electric supply procured through contracts with Generation are included in Purchased power from affiliates on the Utility Registrants' Statements of Operations and Comprehensive Income.

PECO's, BGE’s, and DPL's natural gas supplies are purchased from a number of suppliers for terms of up to three years. PECO, BGE, and DPL have annual firm supply and transportation contracts of 137,000 mmcf, 268,000 mmcf and 61,000 mmcf, respectively. In addition, to supplement gas supply at times of heavy winter demands and in the event of temporary emergencies, PECO, BGE, and DPL have available storage capacity from the following sources:

			Peak Natural Gas Sources (in mmcf)
			LNG Facility						Propane-Air Plant						Underground Storage Service Agreements (a)
PECO			1,200						150						19,400
BGE			1,056						550						22,000
DPL			250						N/A						3,900

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(a)Natural gas from underground storage represents approximately 28%, 20%, and 33% of PECO's, BGE’s, and DPL's 2021-2022 heating season planned supplies, respectively.

PECO, BGE, and DPL have long-term interstate pipeline contracts and also participate in the interstate markets by releasing pipeline capacity or bundling pipeline capacity with gas for off-system sales. Off-system gas sales are low-margin direct sales of gas to wholesale suppliers of natural gas. Earnings from these activities are shared between the utilities and customers. PECO, BGE, and DPL make these sales as part of a program to balance its supply and cost of natural gas. The off-system gas sales are not material to PECO, BGE, and DPL.

See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, Commodity Price Risk (All Registrants), for additional information regarding Utility Registrants' contracts to procure electric supply and natural gas.

Energy Efficiency Programs

The Utility Registrants are generally allowed to recover costs associated with the energy efficiency and demand response programs they offer. Each commission approved program seeks to meet mandated electric consumption reduction targets and implement demand response measures to reduce peak demand. The programs are designed to meet standards required by each respective regulatory agency.

ComEd is allowed to earn a return on its energy efficiency costs. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

Capital Investment

The Utility Registrants' businesses are capital intensive and require significant investments, primarily in electric transmission and distribution and natural gas transportation and distribution facilities, to ensure the adequate capacity, reliability, and efficiency of their systems. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Liquidity and Capital Resources, for additional information regarding projected 2022 capital expenditures.

Transmission Services

Under FERC’s open access transmission policy, the Utility Registrants, as owners of transmission facilities, are required to provide open access to their transmission facilities under filed tariffs at cost-based rates approved by FERC. The Utility Registrants and their affiliates are required to comply with FERC’s Standards of Conduct regulation governing the communication of non-public transmission information between the transmission owner’s employees and wholesale merchant employees.

PJM is the regional grid operator and operates pursuant to FERC-approved tariffs. PJM is the transmission provider under, and the administrator of, the PJM Open Access Transmission Tariff (PJM Tariff). PJM operates the PJM energy, capacity, and other markets, and, through central dispatch, controls the day-to-day operations of the bulk power system for the region. The Utility Registrants are members of PJM and provide regional transmission service pursuant to the PJM Tariff. The Utility Registrants and the other transmission owners in PJM have turned over control of certain of their transmission facilities to PJM, and their transmission systems are under the dispatch control of PJM. Under the PJM Tariff, transmission service is provided on a region-wide, open-access basis using the transmission facilities of the PJM transmission owners at rates based on the costs of transmission service.

The Utility Registrants' transmission rates are established based on a FERC approved formula as shown below:

			Approval Date
ComEd			January 2008
PECO			December 2019
BGE			April 2006
Pepco			April 2006
DPL			April 2006
ACE			April 2006

Exelon’s Strategy and Outlook

In 2021, the businesses remained focused on maintaining industry leading operational excellence, meeting or exceeding their financial commitments, ensuring timely recovery on investments to enable customer benefits, supporting enactment of clean energy policies, and continued commitment to corporate responsibility.

Exelon’s strategy is to improve reliability and operations, enhance the customer experience, and advance clean and affordable energy choices, while ensuring ratemaking mechanisms provide the utilities fair financial returns. The Utility Registrants only invest in rate base where it provides a benefit to customers and the community by improving reliability and the service experience or otherwise meeting customer needs. The Utility Registrants make these investments at the lowest reasonable cost to customers. Exelon seeks to leverage its scale and expertise across the utilities platform through enhanced standardization and sharing of resources and best practices to achieve improved operational and financial results. Additionally, the Utility Registrants anticipate making significant future investments in smart grid technology, transmission projects, gas infrastructure, and electric system improvement projects, providing greater reliability, improved service for our customers, increased capacity to accommodate new technologies, and a stable return for the company.

Management continually evaluates growth opportunities aligned with Exelon’s businesses, assets and markets leveraging Exelon’s expertise in those areas and offering sustainable returns.

The Utility Registrants anticipate investing approximately $29 billion over the next four years in electric and natural gas infrastructure improvements and modernization projects, including smart grid technology, storm

hardening, advanced reliability technologies, and transmission projects, which is projected to result in an increase to current rate base of approximately $17 billion by the end of 2025. The Utility Registrants invest in rate base where beneficial to customers and the community by increasing reliability and the service experience or otherwise meeting customer needs. These investments are made at the lowest reasonable cost to customers.

In August 2021, the Utility Registrants announced a “path to clean” goal to collectively reduce their operations-driven emissions 50% by 2030 against a 2015 baseline, and to reach net zero operations-driven emissions by 2050. This goal builds upon Exelon’s long-standing commitment to reducing our GHG emissions. See ITEM 1. BUSINESS — Environmental Matters and Regulation — Climate Change for additional information.

Various market, financial, regulatory, legislative and operational factors could affect Exelon's success in pursuing its strategies. Exelon continues to assess infrastructure, operational, policy, and legal solutions to these issues. See ITEM 1A. RISK FACTORS for additional information.

Employees

The Registrants strive to create a workplace that is diverse, innovative, and safe for their employees. In order to provide the services and products that their customers expect, the Registrants must create the best teams. These teams must reflect the diversity of the communities that the Registrants serve. Therefore, the Registrants strive to attract highly qualified and diverse talent and routinely review their hiring and promotion practices to ensure they maintain equitable and bias free processes to neutralize any unconscious bias. The Registrants provide growth opportunities, competitive compensation and benefits, and a variety of training and development programs. The Registrants are committed to helping employees grow their skills and careers largely through numerous training opportunities in technical, safety and business acumen areas, mentorship programs, and continuous feedback and development discussions and evaluations. Employees are encouraged to thrive outside the workplace as well. The Registrants provide a full suite of wellness benefits targeted at supporting work-life balance, physical, mental and financial health, and industry-leading paid leave policies.

The Registrants generally conduct an employee engagement survey every other year to help identify their successes and areas where they can grow. The survey results are reviewed with senior management and the Exelon Board of Directors.

Diversity Metrics

The following tables show diversity metrics for all employees and management as of December 31, 2021. The Exelon numbers include all subsidiaries, including Generation.

Employees						Exelon												ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Female(a) (b)						7,892												1,505						752						753						1,269						339						143						105
People of Color(b)						9,436												2,464						929						1,115						1,760						873						196						139
Aged <30						3,236												653						315						280						413						169						87						58
Aged 30-50						17,008												3,566						1,337						1,728						2,241						748						458						361
Aged >50						11,274												2,037						1,157						1,120						1,532						472						365						214
Total Employees(c)						31,518												6,256						2,809						3,128						4,186						1,389						910						633

Management**(d)**						Exelon												ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Female(a) (b)						1,242												219						123						116						179						49						11						19
People of Color(b)						1,233												308						117						146						246						113						27						20
Aged <30						73												6						7						1						8						3						—						2
Aged 30-50						2,857												469						157						256						356						105						58						44
Aged >50						2,107												365						194						161						266						67						59						40
Within 10 years of retirement eligibility						2,876												497						239						226						368						92						74						53
Total Employees in Management(c)						5,037												840						358						418						630						175						117						86

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(a)The Registrants are devoted to creating an environment that allows women to stay in the workforce, grow with the company, and move up the ranks, all with parity of pay. Exelon employs an independent third-party vendor to run regression analysis on all management positions each year. The analysis consistently shows that the Registrants have no systemic pay equity issues.

(b)This is based on self-disclosed information.

(c)Total employees represents the sum of the aged categories.

(d)Management is defined as executive/senior level officials and managers as well as all employees who have direct reports and supervisory responsibilities.

Turnover Rates

As turnover is inherent, management succession planning is performed and tracked for all executives and critical key manager positions. Management frequently reviews succession planning to ensure the Registrants are prepared when positions become available.

The table below shows the average turnover rate for all employees for the last three years of 2019 to 2021. The Exelon numbers include all subsidiaries, including Generation.

						Exelon												ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Retirement Age						4.27		%										3.82		%				3.47		%				3.70		%				4.02		%				4.37		%				4.10		%				3.17		%
Voluntary						2.98		%										1.49		%				1.76		%				1.36		%				2.06		%				2.36		%				1.11		%				1.20		%
Non-Voluntary						0.98		%										0.56		%				1.06		%				0.94		%				0.96		%				1.87		%				0.32		%				0.68		%

Collective Bargaining Agreements

Approximately 37% of Exelon’s employees participate in CBAs. The following table presents employee information, including information about CBAs, as of December 31, 2021. The Exelon numbers include all subsidiaries, including Generation.

			Total Employees Covered by CBAs						Number of CBAs						CBAs New and Renewed in 2021**(a)**						Total Employees Under CBAs New and Renewed in 2021
Exelon			11,770						32						8						6,476
ComEd			3,478						2						2						3,478
PECO			1,351						2						2						1,351
BGE			1,416						1						—						—
PHI			2,161						5						—						—
Pepco			929						1						—						—
DPL			631						2						—						—
ACE			387						2						—						—

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(a)Does not include CBAs that were extended in 2021 while negotiations are ongoing for renewal.

Environmental Matters and Regulation

On February 21, 2021, Exelon's Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies. The separation was completed on February 1, 2022. See Note 26 — Separation of the Combined Notes to Consolidated Financial Statements for additional information. As such, the disclosures below do not include disclosures associated with Generation.

The Registrants are subject to comprehensive and complex environmental legislation and regulation at the federal, state, and local levels, including requirements relating to climate change, air and water quality, solid and hazardous waste, and impacts on species and habitats.

The Exelon Board of Directors is responsible for overseeing the management of environmental matters. Exelon has a management team to address environmental compliance and strategy, including the CEO; the Senior Vice President and Chief Strategy and Sustainability Officer; as well as senior management of the Utility Registrants. Performance of those individuals directly involved in environmental compliance and strategy is reviewed and affects compensation as part of the annual individual performance review process. The Exelon Board of Directors has delegated to the Corporate Governance Committee the authority to oversee Exelon’s compliance with health, environmental, and safety laws and regulations and its strategies and efforts to protect and improve the quality of the environment, including Exelon’s internal climate change and sustainability policies and programs, as discussed in further detail below. The respective Boards of the Utility Registrants oversee environmental, health, and safety issues related to these companies.

Climate Change

As detailed below, the Registrants face climate change mitigation and transition risks as well as adaptation risks. Mitigation and transition risks include changes to the energy systems as a result of new technologies, changing customer expectations and/or voluntary GHG goals, as well as local, state or federal regulatory requirements intended to reduce GHG emissions. Adaptation risk refers to risks to the Registrants' facilities or operations that may result from changes in the physical climate, such as changes to temperature, weather patterns and sea level.

Climate Change Mitigation and Transition

The Registrants support comprehensive federal climate legislation that addresses the urgent need to substantially reduce national GHG emissions while providing appropriate protections for consumers, businesses, and the economy. In the absence of comprehensive federal legislation, Exelon supports EPA moving forward with meaningful regulation of GHG emissions under the Clean Air Act.

The Registrants currently are subject to, and may become subject to additional, federal and/or state legislation and/or regulations addressing GHG emissions. GHG emission sources associated with the Registrants include natural gas (methane) leakage on the natural gas systems, sulfur hexafluoride (SF6) leakage from electric transmission and distribution operations, refrigerant leakage from chilling and cooling equipment, and fossil fuel combustion in motor vehicles. In addition, PECO, BGE, and DPL distribute natural gas; and consumers' use of such natural gas produces GHG emissions.

Since its inception, Exelon has positioned itself as a leader in climate change mitigation. In 2020, Exelon's Scope 1 and 2 GHG emissions, as revised following the separation, were just over 5.6 million metric tons carbon dioxide equivalent using the World Resources Institute Corporate Standard Market-based accounting. Of these emissions, 551,000 metric tons are considered to be operations-driven and in more direct control of our employees and processes. The remaining 5 million metric tons, approximately 90%, are the indirect emissions associated with electric distribution and transmission system uses and losses resulting from the Utility Registrant's delivery of electricity to their customers. These system uses and losses are driven primarily by customer use and generation assets on the grid that are not under our ownership.

In August 2021, the Utility Registrants announced a "path to clean" goal to collectively reduce their operations-driven emissions 50% by 2030 against a 2015 baseline, and to reach net zero operations-driven emissions by 2050, while also supporting customers and communities to achieve their clean energy and emissions goals. This goal builds upon Exelon's long-standing commitment to reducing our GHG emissions. The Utility Registrants "path to clean" will include efficiency and clean electricity for operations, vehicle fleet electrification, equipment

and processes to reduce sulfur hexafluoride (SF6) leakage, modern natural gas infrastructure to minimize methane leaks and increase safety and reliability, and investment and collaboration to develop new technologies. Over the next 10 years, Exelon anticipates investing approximately $4.8 billion towards its "path to clean" goal. Exelon believes it has line of sight into solutions available today to achieve 80% of its "path to clean" goal and that achieving full net-zero operations will require some technology advancement and continued policy support. Exelon is laying the groundwork by partnering with national labs, universities and research consortia to research, develop and pilot clean technologies. The Utility Registrants are also driving customer-driven emissions reductions in their communities through some of the nation's largest energy efficiency programs. During 2022 - 2025, estimated energy efficiency investments across the Utility Registrants total $3.4 billion. These programs enable customer savings through home energy audits, lighting discounts, appliance recycling, home improvement rebates, equipment upgrade incentives and innovative programs like smart thermostats and combined heat and power programs.

The electric sector plays a key role in lowering GHG emissions across much of the economy. Electrification, where feasible for transportation, buildings, and industry coupled with simultaneous decarbonization of electric generation can be a key lever for emissions reductions. To support this transition, Exelon is advocating for public policy supportive of vehicle electrification, investing in enabling infrastructure and technology, and supporting customer education and adoption. In addition, the Utility Registrants will electrify 30% of their own vehicle fleet by 2025, increasing to 50% by 2030. Exelon also continues to explore other decarbonization opportunities, supporting pilots of emerging energy technologies and clean fuels to support both operational and customer-driven emissions reductions.

International Climate Change Agreements. At the international level, the United States is a party to the United Nations Framework Convention on Climate Change (UNFCCC). The Parties to the UNFCCC adopted the Paris Agreement at the 21st session of the UNFCCC Conference of the Parties (COP 21) on December 12, 2015. Under the Agreement, which became effective on November 4, 2016, the parties committed to try to limit the global average temperature increase and to develop national GHG reduction commitments. On November 4, 2020, the United States formally withdrew from the Paris Agreement, retracting its commitment to reduce domestic GHG emissions by 26%-28% by 2025 compared with 2005 levels. However, on January 20, 2021, President Biden accepted the Paris Agreement, which resulted in the United States’ formal re-entry on February 19, 2021. The Biden administration has announced its intent to pursue ambitious GHG reductions in the United States and internationally, and the United States has now set an economy-wide target of reducing its net GHG emissions by 50-52% below 2005 levels by 2030. The 2021 UNFCCC Conference of the Parties (COP26) and resulting Glasgow Climate Pact indicated important global support for the Paris Agreement and continued progress toward decarbonization.

Federal Climate Change Legislation and Regulation. It is uncertain whether federal legislation to significantly reduce GHG emissions will be enacted in the near-term. On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act's (IIJA) into law, which does include provisions intended to address climate change. Exelon anticipates pursuing opportunities under IIJA.

Regulation of GHGs from Power Plants under the Clean Air Act. The EPA’s 2015 Clean Power Plan (CPP) established regulations addressing carbon dioxide emissions from existing fossil-fired power plants under Clean Air Act Section 111(d). The CPP’s carbon pollution limits could be met through changes to the electric generation system, including shifting generation from higher-emitting units to lower- or zero-emitting units, as well as the development of new or expanded zero-emissions generation. In July 2019, the EPA published its final Affordable Clean Energy rule, which repealed the CPP and replaced it with less stringent emissions guidelines for existing fossil-fired power plants based on heat rate improvement measures that could be achieved within the fence line of individual plants. Exelon, together with a coalition of other electric utilities, filed a lawsuit in the U.S. Court of Appeals for the D.C. Circuit on September 6, 2019, challenging the Affordable Clean Energy rule as unlawful. This lawsuit was consolidated with separate challenges to the Affordable Clean Energy rule filed by various states, non-governmental organizations, and business coalitions. On January 19, 2021, the U.S. Court of Appeals for the D.C. Circuit held the Affordable Clean Energy Rule to be unlawful, vacated the rule, and remanded it to the EPA. On October 29, 2021, the Supreme Court granted certiorari to examine the extent of EPA's authority to regulate GHGs from power plants; a decision is expected in 2022. The EPA has indicated it will promulgate new GHG limits for existing power plants. Increased regulation of GHG emissions from power plants could increase the cost of electricity delivered or sold by The Registrants. As of February 1, 2022, the Registrants no longer directly own electric generation plants.

State Climate Change Legislation and Regulation. A number of states in which the Registrants operate have state and regional programs to reduce GHG emissions and renewable and other portfolio standards, which impact the power sector. See discussion below for additional information on renewable and other portfolio standards.

Eleven northeast and mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia) currently participate in the RGGI, which is in the process of strengthening its requirements. The program requires most fossil fuel-fired power plants in the region to hold allowances, purchased at auction, for each ton of CO2 emissions. Non-emitting resources do not have to purchase or hold these allowances. In October 2019, the Governor of Pennsylvania issued an Executive Order directing the PA DEP to begin a rulemaking process to allow Pennsylvania to join the RGGI, with the goal of reducing carbon emissions from the electricity sector. On November 7, 2020, the PA DEP proposed its rule, which is anticipated to support Pennsylvania's participation in RGGI beginning sometime in 2022.

Broader state programs impact other sectors as well, such as the District of Columbia's Clean Energy DC Omnibus Act and cross-sector GHG reduction plans, which resulted in recent requirements for Pepco to develop 5-year and 30-year decarbonization programs and strategies. Maryland has a statewide GHG reduction mandate to reduce GHG emissions by 40% no later than 2030, which it expects to meet and surpass. New Jersey accelerated its goals through Executive Order 274, which establishes an interim goal of 50% reductions below 2006 levels by 2030 and affirms its goal of achieving 80% reductions by 2050 and includes programs to drive greater amounts of electrified transportation. Finally, the Clean Energy Law establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the Clean Energy Law.

The Registrants cannot predict the nature of future regulations or how such regulations might impact future financial statements.

Renewable and Clean Energy Standards. The states where Exelon operates have adopted some form of renewable or clean energy procurement requirement. These standards impose varying levels of mandates for procurement of renewable or clean electricity (the definition of which varies by state) and/or energy efficiency. These are generally expressed as a percentage of annual electric load, often increasing by year. The Utility Registrants comply with these various requirements through purchasing qualifying renewables, implementing efficiency programs, acquiring sufficient credits (e.g., RECs), paying an alternative compliance payment, and/or a combination of these compliance alternatives. The Utility Registrants are permitted to recover from retail customers the costs of complying with their state RPS requirements, including the procurement of RECs or other alternative energy resources. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

Climate Change Adaptation

The Registrants' facilities and operations are subject to the global impacts of climate change. Long-term shifts in climactic patterns, such as sustained higher temperatures and sea level rise, may present challenges for the Registrants and their service territories. Exelon believes its operations could be significantly affected by the physical risks of climate change. See ITEM 1A. RISK FACTORS, The Registrants are subject to risks associated with climate change, for additional information.

The Registrants' assets undergo seasonal readiness efforts to ensure they are ready for the weather projections of the summer and winter months. The Registrants consider and review national climate assessments to inform their planning. Each of the Utility Registrants also has well establish system recovery plans and is investing in its systems to install advanced equipment and reinforce the local electric system, making it more weather resistant and less vulnerable to anticipated storm damage.

Other Environmental Regulation

Water Quality

Under the federal Clean Water Act, NPDES permits for discharges into waterways are required to be obtained from the EPA or from the state environmental agency to which the permit program has been delegated, and

permits must be renewed periodically. Certain of Exelon's facilities discharge water into waterways and are therefore subject to these regulations and operate under NPDES permits.

Under Clean Water Act Section 404 and state laws and regulations, the Registrants may be required to obtain permits for projects involving dredge or fill activities in Waters of the United States.

Where Registrants’ facilities are required to secure a federal license or permit for activities that may result in a discharge to covered waters, they may be required to obtain a state water quality certification under Clean Water Act section 401.

Solid and Hazardous Waste and Environmental Remediation

CERCLA provides for response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances and authorizes the EPA either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under CERCLA, generators and transporters of hazardous substances, as well as past and present owners and operators of hazardous waste sites, are strictly, jointly and severally liable for the cleanup costs of hazardous waste at sites, many of which are listed by the EPA on the National Priorities List (NPL). These PRPs can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed cleanup, may voluntarily settle with the EPA concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight. Most states have also enacted statutes that contain provisions substantially similar to CERCLA. Such statutes apply in many states where the Registrants currently own or operate, or previously owned or operated, facilities, including Delaware, Illinois, Maryland, New Jersey, and Pennsylvania and the District of Columbia. In addition, RCRA governs treatment, storage and disposal of solid and hazardous wastes and cleanup of sites where such activities were conducted.

The Registrants’ operations have in the past, and may in the future, require substantial expenditures in order to comply with these Federal and state environmental laws. Under these laws, the Registrants may be liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous substances generated by them. The Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by substances that are considered hazardous under environmental laws. The Registrants and their subsidiaries are, or could become in the future, parties to proceedings initiated by the EPA, state agencies, and/or other responsible parties under CERCLA and RCRA or similar state laws with respect to a number of sites or may undertake to investigate and remediate sites for which they may be subject to enforcement actions by an agency or third-party.

ComEd’s and PECO’s environmental liabilities primarily arise from contamination at former MGP sites. ComEd, pursuant to an ICC order, and PECO, pursuant to settlements of natural gas distribution rate cases with the PAPUC, have an on-going process to recover environmental remediation costs of the MGP sites through a provision within customer rates. BGE, ACE, Pepco, and DPL do not have material contingent liabilities relating to MGP sites. The amount to be expended in 2022 for compliance with environmental remediation related to contamination at former MGP sites and other gas purification sites is estimated to be approximately $54 million which consists primarily of $48 million at ComEd.

As of December 31, 2021, the Registrants have established appropriate contingent liabilities for environmental remediation requirements. In addition, the Registrants may be required to make significant additional expenditures not presently determinable for other environmental remediation costs.

See Note 3 — Regulatory Matters and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding the Registrants’ environmental matters, remediation efforts, and related impacts to the Registrants’ Consolidated Financial Statements.

Information about our Executive Officers as of February 25, 2022

Exelon

Name						Age						Position						Period
Crane, Christopher M.						63						Chief Executive Officer, Exelon;						2012 - Present
												President, Exelon						2008 - Present
Butler, Calvin G.						52						Senior Executive Vice President, Exelon; Chief Operations Officer, Exelon						2021 - Present
												Senior Executive Vice President, Exelon; Chief Executive Officer, Exelon Utilities						2019 - 2021
												Chief Executive Officer, BGE						2014 - 2019
Glockner, David						61						Executive Vice President, Compliance and Audit, Exelon						2020 - Present
												Chief Compliance Officer, Citadel LLC						2017 - 2020
												Regional Director, U.S. Securities and Exchange Commission						2013 - 2017
Littleton, Gayle E.						49						Executive Vice President, General Counsel, Exelon						2020- Present
												Partner, Jenner & Block LLP						2015 -2020
Quiniones, Gil						55						Chief Executive Officer, ComEd						2021 - Present
												President and Chief Executive Officer, New York Power Authority						2011 - 2021
Innocenzo, Michael A.						56						President and Chief Executive Officer, PECO						2018 - Present
												Senior Vice President and Chief Operations Officer, PECO						2012 - 2018
Khouzami, Carim V.						46						Chief Executive Officer, BGE						2019 - Present
												Senior Vice President, Chief Operating Officer, Exelon Utilities						2018 - 2019
												Senior Vice President, Chief Financial Officer, Exelon Utilities						2016 - 2018
Anthony, J. Tyler						57						President and Chief Executive Officer, PHI						2021 - Present
												Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE						2016 - 2021
Nigro, Joseph						57						Senior Executive Vice President and Chief Financial Officer, Exelon						2018 - Present
												Executive Vice President, Exelon; Chief Executive Officer, Constellation						2013 - 2018
Souza, Fabian E.						51						Senior Vice President and Corporate Controller, Exelon						2018 - Present
												Senior Vice President and Deputy Controller, Exelon						2017 - 2018
												Vice President, Controller and Chief Accounting Officer, The AES Corporation						2015 - 2017

ComEd

Name						Age						Position						Period
Quiniones, Gil						55						Chief Executive Officer, ComEd						2021 - Present
												President and Chief Executive Officer, New York Power Authority						2011 - 2021
Donnelly, Terence R.						61						President and Chief Operating Officer, ComEd						2018 - Present
												Executive Vice President and Chief Operating Officer, ComEd						2012 - 2018
Trpik, Joseph						52						Interim Senior Vice President, Chief Financial Officer and Treasurer, ComEd						2021 - Present
												Senior Vice President, Chief Financial Officer, Exelon Utilities						2018 - Present
												Senior Vice President, Chief Financial Officer and Treasurer, ComEd						2009 - 2018
Rippie, E. Glenn						61						Senior Vice President and General Counsel, ComEd						2022 - Present
												Partner, Jenner & Block LLP						2019 - 2021
												Partner and Chief Financial Officer, Rooney, Rippie & Ratnaswamy, LLP						2010 - 2019
Washington, Melissa						52						Senior Vice President, Customer Operations and Chief Customer Officer, ComEd						2021 - Present
												Senior Vice President, Governmental and External Affairs, ComEd						2019 - 2021
												Vice President, Governmental and External Affairs, ComEd						2019 -2019
												Vice President, External Affairs and Large Customer Services, ComEd						2016 - 2019
Perez, David						52						Senior Vice President, Distribution Operations, ComEd						2019 - Present
												Vice President, Transmission and Substation, ComEd						2016 - 2019
Blaise, M. Michelle						60						Senior Vice President, Technical Services, ComEd						2014 - Present

PECO

Name						Age						Position						Period
Innocenzo, Michael A.						56						President and Chief Executive Officer, PECO						2018 - Present
												Senior Vice President and Chief Operations Officer, PECO						2012 - 2018
McDonald, John						64						Senior Vice President and Chief Operations Officer, PECO						2018 - Present
												Vice President, Integration, PHI						2016 - 2018
Stefani, Robert J.						48						Senior Vice President, Chief Financial Officer and Treasurer, PECO						2018 - Present
												Vice President, Corporate Development, Exelon						2015 - 2018
Murphy, Elizabeth A.						62						Senior Vice President, Governmental and External Affairs, PECO						2016 - Present
Webster Jr., Richard G.						60						Vice President, Regulatory Policy and Strategy, PECO						2012 - Present
Williamson, Olufunmilayo						43						Senior Vice President, Customer Operations, PECO						2020 - Present
												Senior Vice President, Chief Commercial Risk Officer, Exelon						2017 - 2020
												Vice President, Commercial Risk Management, Exelon						2015 - 2017
Gay, Anthony						56						Vice President and General Counsel, PECO						2019 - Present
												Vice President, Governmental and External Affairs, PECO						2016 - 2019

BGE

Name						Age						Position						Period
Khouzami, Carim V.						46						Chief Executive Officer, BGE						2019 - Present
												Senior Vice President, Chief Operating Officer, Exelon Utilities						2018 - 2019
												Senior Vice President, Chief Financial Officer, Exelon Utilities						2016 - 2018
Dickens, Derrick						56						Senior Vice President and Chief Operating Officer, BGE						2021 - Present
												Senior Vice President, Customer Operations, PHI						2020 - 2021
												Vice President, Technical Services, BGE						2016 - 2020
Vahos, David M.						49						Senior Vice President, Chief Financial Officer and Treasurer, BGE						2016 - Present
Núñez, Alexander G.						50						Senior Vice President, Governmental, External and Regulatory Affairs, BGE						2021 - Present
												Senior Vice President, Regulatory Affairs and Strategy, BGE						2020 - 2021
												Senior Vice President, Regulatory and External Affairs, BGE						2016 - 2020
Case, Mark D.						60						Vice President, Strategy and Regulatory Affairs, BGE						2012 - Present
Galambos, Denise						59						Senior Vice President, Customer Operations, BGE						2021 - Present
												Vice President, Utility Oversight, Exelon Utilities						2020 - 2021
												VP, Human Resources, BGE						2018 - 2020
												Associate General Counsel, Exelon						2012 - 2017
Ralph, David						55						Vice President and General Counsel, BGE						2021 - Present
												Associate General Counsel, BGE						2019 - 2021
												Assistant General Counsel, Exelon						2017 - 2019
												City Attorney, City of Baltimore						2016 - 2017

PHI, Pepco, DPL, and ACE

Name						Age						Position						Period
Anthony, J. Tyler						57						President and Chief Executive Officer, PHI						2021 - Present
												Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE						2016 - 2021
Olivier, Tamla						49						Senior Vice President and Chief Operating Officer, PHI, Pepco, DPL, and ACE						2021 - Present
												Senior Vice President, Customer Operations, BGE						2020 - 2021
												Senior Vice President, Constellation NewEnergy, Inc.						2016 - 2020
Barnett, Phillip S.						58						Senior Vice President, Chief Financial Officer and Treasurer, PHI, Pepco, DPL, and ACE						2018 - Present
												Senior Vice President and Chief Financial Officer, PECO						2007 - 2018
												Treasurer, PECO						2012 - 2018
Oddoye, Rodney						45						Senior Vice President, Governmental & External Affairs, PHI, Pepco, DPL, and ACE						2021 - Present
												Senior Vice President, Governmental and External Affairs, BGE						2020 - 2021
												Vice President, Customer Operations, BGE						2018 - 2020
												Director, Northeast Regional Electric Operations, BGE						2016 - 2018
Bancroft, Anne						55						Vice President and General Counsel, PHI						2021 - Present
												Associate General Counsel, Exelon						2017 - 2021
												Assistant General Counsel, Exelon						2010 - 2017
Bell-Izzard, Morlon						56						Senior Vice President, Customer Operations & Chief Customer Officer, PHI						2021 - Present
												Vice President, Customer Operations, PHI						2019 - 2021
												Director, Utility Performance Assessment, Exelon						2016 - 2019
O'Donnell, Morgan						46						Vice President, Regulatory Policy and Strategy, DC/MD						2021 - Present
												Director, Financial Planning and Analysis, PHI						2020 - 2021
												Director, Regulatory Strategy & Revenue Policy, PHI						2019 - 2020
												Manager, Regulatory Analysis, PHI						2016 - 2019
Humphrey, Marissa						42						Vice President, Regulatory Policy and Strategy, PHI, DPL, and ACE						2021 - Present
												Vice President Finance, Exelon Utilities						2019 - 2020
												Vice President, Finance, PHI						2016 - 2019