Published: 2022-05-09 00:00:00 ET

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Description of Business

Exelon is a utility services holding company engaged in 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. The separation was completed on February 1, 2022, creating two publicly traded companies, Exelon and Constellation. See Note 2 — Discontinued Operations for additional information.

Name of Registrant

Business

Service Territories

Commonwealth Edison Company

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

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

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

Utility services holding company engaged, through its reportable segments Pepco, DPL, and ACE

Service Territories of Pepco, DPL, and ACE

Potomac Electric  Power Company

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

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

Purchase and regulated retail sale of electricity

Portions of Southern New Jersey

Transmission and distribution of electricity to retail customers

Basis of Presentation

This is a combined quarterly report of all Registrants. The Notes to the Consolidated Financial Statements apply to the Registrants as indicated parenthetically next to each corresponding disclosure. When appropriate, the Registrants are named specifically for their related activities and disclosures. Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated, except for the historical transactions between the Utility Registrants and Generation for the purposes of presenting discontinued operations in all periods presented in the Consolidated Statements of Operations and Comprehensive Income.

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” in the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.

The accompanying consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 are unaudited but, in the opinion of the management of each Registrant include all adjustments that are considered necessary for a fair statement of the Registrants’ respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The

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December 31, 2021 Consolidated Balance Sheets were derived from audited financial statements. The interim financial statements are to be read in conjunction with prior annual financial statements and notes. Additionally, financial results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2022. These Combined Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

The separation of Constellation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, results of operations are presented as discontinued operations and have been excluded from continuing operations for all periods presented. Accounting rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations. Comprehensive income, shareholders' equity, and cash flows related to Constellation have not been segregated and are included in the Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity, and Consolidated Statements of Cash Flows, respectively, for all periods presented. See Note 2 — Discontinued Operations for additional information.

Prior Period Adjustments and Reclassifications (Exelon, PHI, ACE)

In the first quarter of 2022, management identified an error related to an overstatement of the regulatory liability associated with ACE’s mechanism to recover the cost of Transition Bonds issued in 2002 and 2003 by ACE Funding. Management has concluded that the error was not material to previously issued financial statements for Exelon, PHI or ACE.

The error was corrected through a revision to ACE’s financial statements contained herein. The impact of the error correction was an $8 million increase to ACE’s opening Retained earnings as of January 1, 2021 with a corresponding reduction to Regulatory liabilities of $11 million and an increase to Deferred income taxes and unamortized investment tax credits of $3 million. The impact of the error to ACE’s Total operating revenues and Net income was less than $1 million for the three months ended March 31, 2021. The error did not impact net cash flows provided by operating activities, net cash flows used in investing activities or net cash flows provided by financing activities for the three months ended March 31, 2021.

The error was corrected in the Exelon and PHI financial statements for the three months ended March 31, 2022 as it was not material, resulting in an increase to Net income of $8 million.

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"). Exelon completed the separation on February 1, 2022, through the distribution of 326,663,937 common stock shares of Constellation, the new publicly traded company, to Exelon shareholders. Under the separation plan, Exelon shareholders retained their current shares of Exelon stock and received one share of Constellation common stock for every three shares of Exelon common stock held on January 20, 2022, the record date for the distribution, in a transaction that is tax-free to Exelon and its shareholders for U.S. federal income tax purposes.

Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purposes of separation and holds Generation (including Generation's subsidiaries).

Pursuant to the separation:

•Exelon entered into four term loans consisting of a 364-day term loan for $1.15 billion and three 18-month term loans for $300 million, $300 million and $250 million, respectively. Exelon issued these term loans primarily to fund the cash payment to Constellation and for general corporate purposes. See Note 10 — Debt and Credit Agreements for additional information.

•Exelon made a cash payment of $1.75 billion to Constellation on January 31, 2022.

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•Exelon contributed its equity ownership interest in Generation to Constellation. Exelon no longer retains any equity ownership interest in Generation or Constellation.

•Exelon transferred certain corporate assets and employee-related obligations to Constellation.

•Exelon received cash from Generation of $258 million to settle the intercompany loan on January 31, 2022. See Note 10 — Debt and Credit Agreements for additional information.

Continuing Involvement

In order to govern the ongoing relationships between Exelon and Constellation after the separation, and to facilitate an orderly transition, Exelon and Constellation have entered into several agreements, including the following:

•Separation Agreement – governs the rights and obligations between Exelon and Constellation regarding certain actions to be taken in connection with the separation, among others, including the allocation of assets and liabilities between Exelon and Constellation.

•Transition Services Agreement (TSA) – governs the terms and conditions of the services that Exelon will provide to Constellation and Constellation will provide to Exelon for an expected period of two years, provided that certain services may be longer than the term and services may be extended with approval from both parties. The services include specified accounting, finance, information technology, human resources, employee benefits and other services that have historically been provided on a centralized basis by BSC. For the period from February 1, 2022 to March 31, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $56 million recorded in Other income, net and $9 million recorded in Operating and maintenance expense, respectively.

•Tax Matters Agreement (TMA) – governs the respective rights, responsibilities and obligations of Exelon and Constellation with respect to all tax matters, including tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. See Note 7. Income Taxes for additional information.

In addition, the Utility Registrants will continue to incur expenses from transactions with Generation after the separation. Prior to the separation, such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants. After the separation, such expenses are primarily recorded as Purchased power and an immaterial amount recorded as Operating and maintenance expense at the Utility Registrants.

•ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.

•PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.

•BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.

•Pepco received electric supply from Generation under contracts executed through Pepco’s competitive procurement process approved by the MDPSC and DCPSC.

•DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.

•ACE received electric supply from Generation under contracts executed through ACE’s competitive procurement process approved by the NJBPU.

ComEd and PECO also have receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements of the Exelon 2021 Form 10-K and Note 15 — Related Party Transactions for additional information.

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Discontinued Operations

The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations.

The following table presents the results of Constellation that have been reclassified from continuing operations and included in discontinued operations within Exelon’s Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2022 and March 31, 2021.

These results are primarily Generation, which is comprised of Exelon’s Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions reportable segments, and include the impact of transaction costs, certain BSC costs, including any transition costs, that were historically allocated and directly attributable to Generation, transactions between Generation and the Utility Registrants, and tax-related adjustments. Transaction costs include costs for external bankers, accountants, appraisers, lawyers, external counsels and other advisors, among others, who are involved in the negotiation, appraisal, due diligence and regulatory approval of the separation. Transition costs are primarily employee-related costs such as recruitment expenses, costs to establish certain stand-alone functions and information technology systems, professional services fees and other separation-related costs during the transition to separate Generation. For the purposes of reporting discontinued operations, these results also include transactions between Generation and the Utility Registrants that were historically eliminated within Exelon’s Consolidated Statements of Operations as these transactions will be ongoing after the separation. Certain BSC costs that were historically allocated to Generation are presented as part of continuing operations in Exelon’s Consolidated Statements of Operations as these costs do not qualify as expenses of the discontinued operations per the accounting rules.

			Three Months Ended March 31,
			2022						2021
Operating revenues
Competitive business revenues			$	1,855					$	5,265
Competitive business revenues from affiliates			161						294
Total operating revenues			2,016						5,559
Operating expenses
Competitive businesses purchased power and fuel			1,138						4,610
Operating and maintenance(a)			371						904
Depreciation and amortization			94						940
Taxes other than income taxes			44						121
Total operating expenses			1,647						6,575
Gain on sales of assets and businesses			10						71
Operating income (loss)			379						(945)
Other income and (deductions)
Interest expense, net			(20)						(68)
Other, net			(281)						167
Total other income and (deductions)			(301)						99
Income (loss) before income taxes			78						(846)
Income taxes			(40)						(58)
Equity in losses of unconsolidated affiliates			(1)						(1)
Net income (loss)			117						(789)
Net income attributable to noncontrolling interests			1						25
Net income (loss) from discontinued operations			$	116					$	(814)

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__________

(a)Includes transaction and transition costs related to the separation of $52 million and $3 million for the three months ended March 31, 2022 and 2021, respectively. $50 million and $2 million of transaction costs and $2 million and less than $1 million of transition costs are included in the results of discontinued operations in the table presented above for the three months ended March 31, 2022 and March 31, 2021, respectively. See discussion above for additional information.

There were no assets and liabilities of discontinued operations included in Exelon’s Consolidated Balance Sheet as of March 31, 2022. Constellation had net assets of $11,573 million that separated on February 1, 2022 that resulted in a reduction to Exelon’s equity during the three months ended March 31, 2022. Refer to the Distribution of Constellation line in Exelon’s Consolidated Statement of Changes in Shareholders’ Equity for further information.

The following table presents the assets and liabilities of discontinued operations in Exelon’s Consolidated Balance Sheet as of December 31, 2021:

						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents						$	510
Restricted cash and cash equivalents						72
Accounts receivable
Customer accounts receivable						1,724
Customer allowance for credit losses						(55)
Customer accounts receivable, net						1,669
Other accounts receivable						596
Other allowance for credit losses						(4)
Other accounts receivable, net						592
Mark-to-market derivative assets						2,169
Inventories, net
Fossil fuel and emission allowances						284
Materials and supplies						1,004
Renewable energy credits						529
Assets held for sale						13
Other						993
Total current assets of discontinued operations						7,835
Property, plant, and equipment (net of accumulated depreciation and amortization of $15,888)						19,661
Deferred debits and other assets
Nuclear decommissioning trust funds						15,938
Investments						193
Mark-to-market derivative assets						949
Other						1,768
Total property, plant, and equipment, deferred debits, and other assets of discontinued operations						38,509
Total assets of discontinued operations						$	46,344

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						December 31, 2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings						$	2,082
Long-term debt due within one year						1,220
Accounts payable						1,757
Accrued expenses						818
Mark-to-market derivative liabilities						981
Renewable energy credit obligation						779
Liabilities held for sale						3
Other						300
Total current liabilities of discontinued operations						7,940
Long-term debt						4,575
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits						3,583
Asset retirement obligations						12,819
Pension obligations						939
Non-pension postretirement benefit obligations						876
Spent nuclear fuel obligation						1,210
Mark-to-market derivative liabilities						513
Other						1,161
Total long-term debt, deferred credits, and other liabilities of discontinued operations						25,676
Total liabilities of discontinued operations						$	33,616

The following table presents selected financial information regarding cash flows of the discontinued operations that are included within Exelon’s Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and March 31, 2021.

			Three Months Ended March 31, 2022
			2022						2021
Non-cash items included in net income (loss) from discontinued operations:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization			$	207					$	1,346
Gain on sales of assets and businesses			9						(71)
Deferred income taxes and amortization of investment tax credits			(143)						(234)
Net fair value changes related to derivatives			(59)						(178)
Net realized and unrealized losses (gains) on NDT fund investments			205						(118)
Net unrealized losses on equity investments			16						23
Other decommissioning-related activity			36						(332)
Cash flows from investing activities:
Capital expenditures			(227)						(394)
Collection of DPP			169						1,574
Supplemental cash flow information:
Decrease in capital expenditures not paid			(128)						(37)
Increase in DPP			348						1,339
Increase in PP&E related to ARO update			335						—

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As discussed in Note 3 — Regulatory Matters of the Exelon 2021 Form 10-K, the Registrants are involved in rate and regulatory proceedings at FERC and their state commissions. The following discusses developments in 2022 and updates to the 2021 Form 10-K.

Distribution Base Rate Case Proceedings

The following tables show the completed and pending distribution base rate case proceedings in 2022.

Completed Distribution Base Rate Case Proceedings

Registrant/Jurisdiction						Filing Date						Service						Requested Revenue Requirement Increase						Approved Revenue Requirement Increase						Approved ROE						Approval Date						Rate Effective Date
ComEd - Illinois(a)						April 16, 2021						Electric						$	51					$	46					7.36		%				December 1, 2021						January 1, 2022
PECO - Pennsylvania						March 30, 2021						Electric						246						132						N/A(b)						November 18, 2021						January 1, 2022
BGE - Maryland(c)						May 15, 2020 (amended September 11, 2020)						Electric						203						140						9.50		%				December 16, 2020						January 1, 2021
												Natural Gas						108						74						9.65		%
Pepco - District of Columbia(d)						May 30, 2019 (amended June 1, 2020)						Electric						136						109						9.275		%				June 8, 2021						July 1, 2021
Pepco - Maryland(e)						October 26, 2020 (amended March 31, 2021)						Electric						104						52						9.55		%				June 28, 2021						June 28, 2021
DPL - Maryland(f)						September 1, 2021 (amended December 23, 2021)						Electric						27						13						9.60		%				March 2, 2022						March 2, 2022
ACE - New Jersey(g)						December 9, 2020 (amended February 26, 2021)						Electric						67						41						9.60		%				July 14, 2021						January 1, 2022

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(a)ComEd's 2022 approved revenue requirement reflects an increase of $37 million for the initial year revenue requirement for 2022 and an increase of $9 million related to the annual reconciliation for 2020. The revenue requirement for 2022 provides for a weighted average debt and equity return on distribution rate base of 5.72%, inclusive of an allowed ROE of 7.36%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2020 provides for a weighted average debt and equity return on distribution rate base of 5.69%, inclusive of an allowed ROE of 7.29%, reflecting the monthly yields on 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points.

(b)The PECO electric base rate case proceeding was resolved through a settlement agreement, which did not specify an approved ROE.

(c)Reflects a three-year cumulative multi-year plan for 2021 through 2023. The MDPSC awarded BGE electric revenue requirement increases of $59 million, $39 million, and $42 million, before offsets, in 2021, 2022, and 2023, respectively, and natural gas revenue requirement increases of $53 million, $11 million, and $10 million, before offsets, in 2021, 2022, and 2023, respectively. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 2023. However, the MDPSC utilized the tax benefits to fully offset the increases in 2021 and January 2022 such that customer rates remained unchanged. For the remainder of 2022, the MDPSC chose to offset only 25% of the cumulative 2021 and 2022 electric revenue requirement increases and 50% of the cumulative gas revenue requirement increases. Whether certain tax benefits will be used to offset the customer rate increases in 2023 has not been decided, and BGE cannot predict the outcome.

(d)Reflects a cumulative multi-year plan with 18-months remaining in 2021 through 2022. The DCPSC awarded Pepco electric incremental revenue requirement increases of $42 million and $67 million, before offsets, for 2021 and 2022, respectively. However, the DCPSC utilized the acceleration of refunds for certain tax benefits along with other rate relief to partially offset the customer rate increases by $22 million and $40 million for 2021 and 2022, respectively.

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(e)Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024. The MDPSC awarded Pepco electric incremental revenue requirement increases of $21 million, $16 million, and $15 million, before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively. Pepco proposed to utilize certain tax benefits to fully offset the increase through 2023 and partially offset customer rate increases in 2024. However, the MDPSC only utilized the acceleration of refunds for certain tax benefits to fully offset the increases such that customer rates remain unchanged through March 31, 2022. On February 23, 2022, the MDPSC chose to offset 25% of the cumulative revenue requirement increase for the 12-month period ending March 31, 2023. Whether certain tax benefits will be used to offset the customer rate increases for the 12-month period ending March 31, 2024 has not been decided, and Pepco cannot predict the outcome.

(f)The approved settlement reflects a 9.60% ROE, which is solely for the purposes of calculating AFUDC and regulatory asset carrying costs.

(g)Requested and approved increases are before New Jersey sales and use tax. The order allows ACE to retain approximately $11 million of certain tax benefits which resulted in a decrease to income tax expense in Exelon's, PHI's, and ACE's Consolidated Statements of Operations and Comprehensive Income in the third quarter of 2021.

Pending Distribution Base Rate Case Proceedings

Registrant/Jurisdiction

Filing Date

Service

Requested Revenue Requirement Increase

Requested ROE

Expected Approval Timing

ComEd - Illinois(a)

April 15, 2022

Electric

$

199

7.85

%

Fourth quarter of 2022

PECO - Pennsylvania

March 31, 2022

Natural Gas

82

10.95

%

Fourth quarter of 2022

DPL - Delaware(b)

January 14, 2022 (amended February 28, 2022)

Natural Gas

15

10.30

%

First quarter of 2023

__________

(a)ComEd's 2023 requested revenue requirement reflects an increase of $144 million for the initial year revenue requirement for 2023 and an increase of $55 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on distribution rate base of 5.94%, inclusive of an allowed ROE of 7.85%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2021 provides for a weighted average debt and equity return on distribution rate base of 5.91%, inclusive of an allowed ROE of 7.78%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points. This is ComEd's last performance-based electric distribution formula rate update filing under EIMA as a result of the law authorizing the rate setting process sunsetting at the end of 2022. See Note 3. - Regulatory Matters of the Exelon 2021 Form 10-K for additional information on ComEd's transition away from the electric distribution formula rate.

(b)The rates will go into effect on August 14, 2022, subject to refund.

Transmission Formula Rates

The Utility Registrants' transmission rates are each established based on a FERC-approved formula. ComEd, BGE, Pepco, DPL, and ACE are required to file an annual update to the FERC-approved formula on or before May 15, and PECO is required to file on or before May 31, with the resulting rates effective on June 1 of the same year. The annual update for ComEd is based on prior year actual costs and current year projected capital additions (initial year revenue requirement). The update for ComEd also reconciles any differences between the revenue requirement in effect beginning June 1 of the prior year and actual costs incurred for that year (annual reconciliation). The annual update for BGE is based on prior year actual costs and current year projected capital additions, accumulated depreciation, depreciation and amortization expense, and accumulated deferred income taxes. The update for BGE also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).

For 2022, the following total increases were included in ComEd’s and BGE's electric transmission formula rate update. PECO, Pepco, DPL, and ACE intend to file by the required deadline for the annual update.

Registrant(a)						Initial Revenue Requirement Increase						Annual Reconciliation Decrease						Total Revenue Requirement Increase						Allowed Return on Rate Base(c)						Allowed ROE(d)
ComEd						$	24					$	(24)					$	—					8.11		%				11.50		%
BGE						25						(4)						16			(b)			7.30		%				10.50		%

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(a)All rates are effective June 1, 2022 - May 31, 2023, subject to review by interested parties pursuant to review protocols of ComEd's and BGE's tariff.

(b)The increase in BGE's transmission revenue requirement includes a $5 million reduction related to a FERC-approved dedicated facilities charge to recover the costs of providing transmission service to specifically designated load by BGE.

(c)Represents the weighted average debt and equity return on transmission rate bases.

(d)As part of the FERC-approved settlements of ComEd’s 2007 transmission rate case, the rate of return on common equity is 11.50%, inclusive of a 50-basis-point incentive adder for being a member of a RTO, and the common equity component of the ratio used to calculate the weighted average debt and equity return for the transmission formula rate is currently capped at 55%. As part of the FERC-approved settlement of the ROE complaint against BGE, the rate of return on common equity is 10.50%, inclusive of a 50-basis-point incentive adder for being a member of a RTO.

Other State Regulatory Matters

Illinois Regulatory Matters

CEJA (Exelon and ComEd). On September 15, 2021, the Governor of Illinois signed into law CEJA. CEJA includes, among other features, (1) procurement of CMCs from qualifying nuclear-powered generating facilities, (2) a requirement to file a general rate case or a new four-year multi-year plan no later than January 20, 2023 to establish rates effective after ComEd’s existing performance-based distribution formula rate sunsets, (3) an extension of and certain adjustments to ComEd’s energy efficiency MWh savings goals, (4) revisions to the Illinois RPS requirements, including expanded charges for the procurement of RECs from wind and solar generation, (5) a requirement to accelerate amortization of ComEd’s unprotected excess deferred income taxes ("EDIT") that ComEd was previously directed by the ICC to amortize using the average rate assumption method which equates to approximately 39.5 years, and (6) requirements that the ICC initiate and conduct various regulatory proceedings on subjects including ethics, spending, grid investments, and performance metrics. Regulatory or legal challenges regarding the validity or implementation of CEJA are possible and Exelon and ComEd cannot reasonably predict the outcome of any such challenges.

The ICC initiated a docket to accelerate and fully credit to customers TCJA unprotected property-related EDIT no later than December 31, 2025. On April 13, 2022, a stipulation and agreement on the schedule for the acceleration of EDIT amortization was submitted by ComEd, the Illinois Attorney General's Office, and the Citizens Utility Board. At this time, ComEd cannot predict an outcome of these proceedings.

See Note 3 — Regulatory Matters of the Exelon 2021 Form 10-K for additional information on CEJA (referred to as Clean Energy Law).

New Jersey Regulatory Matters

Termination of Energy Procurement Provisions of PPAs (Exelon, PHI, and ACE).

On December 22, 2021, ACE filed with the NJBPU a petition to terminate the provisions in the PPAs to purchase electricity from two coal-powered generation facilities located in the state of New Jersey. The petition was approved by the NJBPU on March 23, 2022. Upon closing of the transaction on March 31, 2022, ACE recognized a liability of $203 million for the contract termination fee, which is to be paid by the end of 2024, and recognized a corresponding regulatory asset of $203 million.

As of March 31, 2022, the $203 million liability for the contract termination fee consists of $85 million and $118 million included in Other current liabilities and Other deferred credits and other liabilities, respectively, in Exelon's Consolidated Balance Sheet. As of March 31, 2022, the current and noncurrent liability is included in PPA termination obligation and Other deferred credits and other liabilities, respectively, in PHI's and ACE's Consolidated Balance Sheets.

Regulatory Assets and Liabilities

The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2021, unless noted below. See Note 3 — Regulatory Matters of the Exelon 2021 Form 10-K for additional information on the specific regulatory assets and liabilities.

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PECO. Regulatory assets increased $66 million primarily due to an increase of $60 million in the Deferred Income Taxes regulatory asset. Regulatory liabilities decreased by $112 million primarily due to a decrease of $111 million in the Nuclear Decommissioning regulatory liability.

BGE. Regulatory assets decreased $50 million primarily due to a decrease of $19 million in the Electric Energy and Natural Gas Costs regulatory asset and $16 million in the Energy Efficiency and Demand Response Programs regulatory asset. Regulatory liabilities decreased $53 million primarily due to a decrease of $65 million in the Deferred Income Taxes regulatory liability.

ACE. Regulatory assets increased $205 million primarily due to an increase in the Electric Energy Costs regulatory asset as a result of the PPA termination. Regulatory liabilities decreased $19 million primarily due to a decrease of $9 million in the Deferred Income Taxes regulatory liability and $5 million in the Electric Energy Costs regulatory liability.

Capitalized Ratemaking Amounts Not Recognized

The following table presents authorized amounts capitalized for ratemaking purposes related to earnings on shareholders' investment that are not recognized for financial reporting purposes in the Registrants' Consolidated Balance Sheets. These amounts will be recognized as revenues in the related Consolidated Statements of Operations and Comprehensive Income in the periods they are billable to the Utility Registrants' customers.

			Exelon						ComEd(a)						PECO						BGE(b)						PHI						Pepco(c)						DPL(c)						ACE
March 31, 2022			$	49					$	2					$	—					$	34					$	13					$	11					$	2					$	—
December 31, 2021			43						1						—						37						5						3						2						—

__________

(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its energy efficiency and electric distribution formula rate regulatory assets.

(b)BGE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholder's investment on its AMI programs.

(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholder's investment on their respective AMI Programs and Energy Efficiency and Demand Response Programs, and for Pepco District of Columbia revenue decoupling program. The earnings on energy efficiency are on Pepco District of Columbia and DPL Delaware programs only.

The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that the entities expect to be entitled to in exchange for those goods or services. The primary sources of revenue include regulated electric and gas tariff sales, distribution, and transmission services.

See Note 4 — Revenue from Contracts with Customers of the Exelon 2021 Form 10-K for additional information regarding the primary sources of revenue for the Registrants.

Contract Liabilities

The Registrants record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. The Registrants record contract liabilities in Other current liabilities and Other noncurrent liabilities in their Consolidated Balance Sheets.

For PHI, Pepco, DPL, and ACE these contract liabilities primarily relate to upfront consideration received in the third quarter of 2020 for a collaborative arrangement with an unrelated owner and manager of communication infrastructure. The revenue attributable to this arrangement will be recognized as operating revenue over the 35 years under the collaborative arrangement.

Revenues recognized were immaterial for Exelon, PHI, Pepco, DPL, and ACE for the three months ended March 31, 2022 and 2021. As of March 31, 2022 and December 31, 2021, ComEd's, PECO's, and BGE's contract liabilities were immaterial.

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Transaction Price Allocated to Remaining Performance Obligations

The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2022. This disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one month to several years.

This disclosure excludes the Utility Registrants' gas and electric tariff sales contracts and transmission revenue contracts as they generally have an original expected duration of one year or less and, therefore, do not contain any future, unsatisfied performance obligations to be included in this disclosure.

			2022						2023						2024						2025						2026 and thereafter						Total
Exelon			$	6					$	8					$	6					$	5					$	82					$	107
PHI			6						8						6						5						82						107
Pepco			4						6						5						5						65						85
DPL			1						1						—						—						9						11
ACE			1						1						1						—						8						11

Revenue Disaggregation

The Registrants disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. See Note 5 — Segment Information for the presentation of the Registrant's revenue disaggregation.

Operating segments for each of the Registrants are determined based on information used by the CODMs in deciding how to evaluate performance and allocate resources at each of the Registrants.

Exelon has six reportable segments, which include ComEd, PECO, BGE, and PHI's three reportable segments consisting of Pepco, DPL, and ACE. ComEd, PECO, BGE, Pepco, DPL, and ACE each represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon, ComEd, PECO, BGE, Pepco, DPL, and ACE's CODMs evaluate the performance of and allocate resources to ComEd, PECO, BGE, Pepco, DPL, and ACE based on net income.

An analysis and reconciliation of the Registrants’ reportable segment information to the respective information in the consolidated financial statements for the three months ended March 31, 2022 and 2021 is as follows:

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Three Months Ended March 31, 2022 and 2021

			ComEd						PECO						BGE						PHI						Other(a)						Intersegment Eliminations						Exelon
Operating revenues(b):
2022
Electric revenues			$	1,734					$	741					$	736					$	1,318					$	—					$	(7)					$	4,522
Natural gas revenues			—						306						418						83						—						(2)						$	805
Shared service and other revenues			—						—						—						3						576						(579)						$	—
Total operating revenues			$	1,734					$	1,047					$	1,154					$	1,404					$	576					$	(588)					$	5,327
2021
Electric revenues			$	1,535					$	661					$	632					$	1,170					$	—					$	(7)					$	3,991
Natural gas revenues			—						228						342						71						—						—						641
Shared service and other revenues			—						—						—						3						491						(494)						—
Total operating revenues			$	1,535					$	889					$	974					$	1,244					$	491					$	(501)					$	4,632
Intersegment revenues(c):
2022			$	6					$	1					$	7					$	3					$	576					$	(587)					$	6
2021			6						2						6						3						487						(497)						7
Depreciation and amortization:
2022			$	321					$	92					$	171					$	218					$	15					$	—					$	817
2021			292						86						152						210						17						—						757
Operating expenses:
2022			$	1,406					$	793					$	919					$	1,215					$	625					$	(531)					$	4,427
2021			1,210						679						752						1,058						448						(339)						3,808
Interest expense, net:
2022			$	100					$	41					$	35					$	69					$	93					$	—					$	338
2021			96						38						34						67						83						—						318
Income (loss) from continuing operations before income taxes:
2022			$	240					$	220					$	207					$	137					$	(62)					$	(43)					$	699
2021			236						177						196						136						(32)						(149)						564
Income Taxes:
2022			$	52					$	14					$	9					$	7					$	146					$	(10)					$	218
2021			39						10						(13)						8						7						(12)						39
Net income (loss) from continuing operations:
2022			$	188					$	206					$	198					$	130					$	(208)					$	(33)					$	481
2021			197						167						209						128						(39)						(137)						525
Capital Expenditures:
2022			$	617					$	344					$	303					$	409					$	22					$	—					$	1,695
2021			613						295						336						456						46						—						1,746
Total assets:
March 31, 2022			$	37,013					$	14,113					$	12,509					$	25,636					$	7,583					$	(4,156)					$	92,698
December 31, 2021			36,470						13,824						12,324						24,744						7,634						(8,319)						86,677

__________

(a)Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.

(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 14 — Supplemental Financial Information for additional information on total utility taxes.

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(c)See Note 15 — Related Party Transactions for additional information on intersegment revenues.

PHI:

			Pepco						DPL						ACE						Other(a)						Intersegment Eliminations						PHI
Operating revenues(b):
2022
Electric revenues			$	614					$	348					$	349					$	—					$	7					$	1,318
Natural gas revenues			—						83						—						—						—						83
Shared service and other revenues			—						—						—						107						(104)						3
Total operating revenues			$	614					$	431					$	349					$	107					$	(97)					$	1,404
2021
Electric revenues			$	553					$	311					$	310					$	—					$	(4)					$	1,170
Natural gas revenues			—						71						—						—						—						71
Shared service and other revenues			—						—						—						95						(92)						3
Total operating revenues			$	553					$	382					$	310					$	95					$	(96)					$	1,244
Intersegment revenues(c):
2022			$	1					$	1					$	1					$	97					$	(97)					$	3
2021			1						2						1						95						(96)						3
Depreciation and amortization:
2022			$	108					$	57					$	47					$	6					$	—					$	218
2021			102						53						47						8						—						210
Operating expenses:
2022			$	547					$	357					$	311					$	97					$	(97)					$	1,215
2021			466						309						282						97						(96)						1,058
Interest expense, net:
2022			$	36					$	16					$	14					$	3					$	—					$	69
2021			34						15						15						3						—						67
Income (loss) before income taxes:
2022			$	44					$	60					$	27					$	6					$	—					$	137
2021			65						61						14						(4)						—						136
Income Taxes:
2022			$	(2)					$	4					$	1					$	4					$	—					$	7
2021			6						5						—						(3)						—						8
Net income (loss):
2022			$	46					$	56					$	26					$	2					$	—					$	130
2021			59						56						14						(1)						—						128
Capital Expenditures:
2022			$	218					$	103					$	87					$	1					$	—					$	409
2021			220						112						123						1						—						456
Total assets:
March 31, 2022			$	10,458					$	5,573					$	4,929					$	4,720					$	(44)					$	25,636
December 31, 2021			9,903						5,412						4,556						4,933						(60)						24,744

__________

(a)Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.

(b)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 14 — Supplemental Financial Information for additional information on total utility taxes.

(c)Includes intersegment revenues with ComEd, BGE, and PECO, which are eliminated at Exelon.

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The following tables disaggregate the Registrants' revenues recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. For the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.

			Three Months Ended March 31, 2022
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	857					$	487					$	417					$	652					$	275					$	207					$	170
Small commercial & industrial			423						111						81						141						38						56						47
Large commercial & industrial			153						64						131						323						253						26						44
Public authorities & electric railroads			14						8						7						16						8						4						4
Other(a)			239						62						97						193						46						56						81
Total electric revenues(b)			$	1,686					$	732					$	733					$	1,325					$	620					$	349					$	346
Natural gas revenues
Residential			$	—					$	218					$	282					$	51					$	—					$	51					$	—
Small commercial & industrial			—						76						45						21						—						21						—
Large commercial & industrial			—						—						65						3						—						3						—
Transportation			—						8						—						4						—						4						—
Other(c)			—						3						35						4						—						4						—
Total natural gas revenues(d)			$	—					$	305					$	427					$	83					$	—					$	83					$	—
Total revenues from contracts with customers			$	1,686					$	1,037					$	1,160					$	1,408					$	620					$	432					$	346
Other revenues
Revenues from alternative revenue programs			$	40					$	6					$	(12)					$	(5)					$	(7)					$	(1)					$	3
Other electric revenues(e)			8						3						4						1						1						—						—
Other natural gas revenues(e)			—						1						2						—						—						—						—
Total other revenues			$	48					$	10					$	(6)					$	(4)					$	(6)					$	(1)					$	3
Total revenues for reportable segments			$	1,734					$	1,047					$	1,154					$	1,404					$	614					$	431					$	349

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			Three Months Ended March 31, 2021
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	741					$	433					$	362					$	605					$	253					$	190					$	162
Small commercial & industrial			367						100						69						118						33						46						39
Large commercial & industrial			134						57						105						248						184						21						43
Public authorities & electric railroads			11						9						7						13						6						4						3
Other(a)			220						52						77						143						51						41						52
Total electric revenues(b)			$	1,473					$	651					$	620					$	1,127					$	527					$	302					$	299
Natural gas revenues
Residential			$	—					$	160					$	216					$	46					$	—					$	46					$	—
Small commercial & industrial			—						59						35						18						—						18						—
Large commercial & industrial			—						—						54						2						—						2						—
Transportation			—						7						—						4						—						4						—
Other(c)			—						2						31						1						—						1						—
Total natural gas revenues(d)			$	—					$	228					$	336					$	71					$	—					$	71					$	—
Total revenues from contracts with customers			$	1,473					$	879					$	956					$	1,198					$	527					$	373					$	299
Other revenues
Revenues from alternative revenue programs			$	54					$	10					$	18					$	46					$	26					$	9					$	11
Other electric revenues(e)			8						—						—						—						—						—						—
Total other revenues			$	62					$	10					$	18					$	46					$	26					$	9					$	11
Total revenues for reportable segments			$	1,535					$	889					$	974					$	1,244					$	553					$	382					$	310

__________

(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.

(b)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•$6 million, $6 million at ComEd

•$1 million, $1 million at PECO

•$2 million, $2 million at BGE

•$3 million, $3 million at PHI

•$1 million, $1 million at Pepco

•$2 million, $2 million at DPL

•$1 million, $1 million at ACE

(c)Includes revenues from off-system natural gas sales.

(d)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•less than $1 million, less than $1 million at PECO

•$6 million, $4 million at BGE

(e)Includes late payment charge revenues.

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Allowance for Credit Losses on Accounts Receivable

The following tables present the rollforward of Allowance for Credit Losses on Customer Accounts Receivable.

			Three Months Ended March 31, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2021			$	320					$	73					$	105					$	38					$	104					$	37					$	18					$	49
Plus: Current period provision for expected credit losses(a)			110						26						31						26						27						11						7						9
Less: Write-offs, net of recoveries(b)(c)			41						7						11						5						18						8						1						9
Balance as of March 31, 2022			$	389					$	92					$	125					$	59					$	113					$	40					$	24					$	49
			Three Months Ended March 31, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2020			$	334					$	97					$	116					$	35					$	86					$	32					$	22					$	32
Plus: Current period provision for expected credit losses(d)			70						21						20						9						20						11						6						3
Less: Write-offs, net of recoveries(b)			27						15						6						1						5						2						3						—
Balance as of March 31, 2021			$	377					$	103					$	130					$	43					$	101					$	41					$	25					$	35

__________

(a)For PECO, BGE and ACE, the increase is primarily as a result of increased receivable balances due to the increased aging of receivables. For BGE, also reflects increased receivable balance due to colder weather.

(b)Recoveries were not material to the Registrants.

(c)For ACE, the increase in 2022 is primarily related to the termination of the moratorium, which beginning in March 2020, prevented customer disconnections for non-payment. With disconnection activities restarting in January 2022, write-offs of aging accounts receivable increased throughout the year.

(d)The increase is primarily as a result of increased receivable balances due to the colder weather and the increased aging of receivables, the temporary suspension of customer disconnections for non-payment, temporary cessation of new late payment fees, and reconnection of service for customers previously disconnected due to COVID-19.

The following tables present the rollforward of Allowance for Credit Losses on Other Accounts Receivable.

			Three Months Ended March 31, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2021			$	72					$	17					$	7					$	9					$	39					$	16					$	8					$	15
Plus: Current period provision for expected credit losses			14						4						3						3						4						2						1						1
Less: Write-offs, net of recoveries(a)			5						1						1						1						2						—						—						2
Balance as of March 31, 2022			$	81					$	20					$	9					$	11					$	41					$	18					$	9					$	14
			Three Months Ended March 31, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2020			$	71					$	21					$	8					$	9					$	33					$	13					$	9					$	11
Plus: Current period provision for expected credit losses			10						1						4						1						4						2						1						1
Less: Write-offs, net of recoveries(a)			2						—						1						1						—						—						—						—
Balance as of March 31, 2021			$	79					$	22					$	11					$	9					$	37					$	15					$	10					$	12

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__________

(a)Recoveries were not material to the Registrants.

Unbilled Customer Revenue

The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

			Unbilled customer revenues(a)
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
March 31, 2022			$	629					$	189					$	127					$	139					$	174					$	89					$	50					$	35
December 31, 2021			747						240						161						171						175						82						53						40

__________

(a)Unbilled customer revenues are classified in Customer accounts receivables, net in the Registrants' Consolidated Balance Sheets.

Other Purchases of Customer and Other Accounts Receivables

The Utility Registrants are required, under separate legislation and regulations in Illinois, Pennsylvania, Maryland, District of Columbia, Delaware, and New Jersey, to purchase certain receivables from alternative retail electric and, as applicable, natural gas suppliers that participate in the utilities' consolidated billing. The following tables present the total receivables purchased.

			Total receivables purchased
			Exelon(a)						ComEd						PECO						BGE(a)						PHI						Pepco						DPL						ACE
Three months ended March 31, 2022			$	1,044					$	248					$	292					$	222					$	282					$	174					$	57					$	51
Three months ended March 31, 2021			1,023						266						290						199						268						166						56						46

__________

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Rate Reconciliation

The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:

			Three Months Ended March 31, 2022(a)
			Exelon						ComEd						PECO(b)						BGE(b)						PHI						Pepco(b)						DPL						ACE(b)
U.S. Federal statutory rate			21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit(c)			21.1						8.0						(0.1)						2.4						3.7						(4.5)						6.2						6.8
Plant basis differences			(3.6)						(0.6)						(11.3)						(0.9)						(1.6)						(2.6)						(0.7)						(1.3)
Excess deferred tax amortization			(11.5)						(6.3)						(3.2)						(17.6)						(17.7)						(17.4)						(19.4)						(22.2)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.1)						(0.1)						—						(0.2)						(0.2)
Tax credits(d)			1.7						(0.3)						—						(0.4)						(0.4)						(0.4)						(0.3)						(0.3)
Other(e)			2.6						—						—						(0.1)						0.2						(0.6)						0.1						(0.1)
Effective income tax rate			31.2		%				21.7		%				6.4		%				4.3		%				5.1		%				(4.5)		%				6.7		%				3.7		%

			Three Months Ended March 31, 2021(a)
			Exelon						ComEd						PECO(f)						BGE(f)						PHI						Pepco						DPL						ACE(f)
U.S. Federal statutory rate			21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%				21.0		%
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit			2.8						6.8						(1.6)						(10.1)						6.1						5.5						6.4						6.9
Plant basis differences			(3.4)						(0.6)						(10.5)						(1.4)						(1.5)						(2.1)						(0.7)						(0.9)
Excess deferred tax amortization			(12.0)						(6.9)						(3.2)						(15.5)						(19.3)						(15.1)						(18.5)						(28.7)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.1)						(0.1)						—						(0.2)						(0.2)
Tax credits			(0.3)						(0.2)						—						(0.4)						(0.2)						(0.2)						(0.1)						(0.3)
Other			(1.1)						(3.5)						(0.1)						(0.1)						(0.1)						0.1						0.3						2.2
Effective income tax rate			6.9		%				16.5		%				5.6		%				(6.6)		%				5.9		%				9.2		%				8.2		%				—		%

__________

(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.

(b)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. For BGE, the lower effective tax rate is primarily due to the Maryland multi-year plan which resulted in the acceleration of certain income tax benefits. For Pepco, the income tax benefit is primarily due to the Maryland and Washington, D.C. multi-year plans which resulted in the acceleration of certain income tax benefits. For ACE, the lower effective tax rate is primarily due to the acceleration of certain income tax benefits due to distribution rate case settlements.

(c)For Exelon, the higher state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of approximately $67 million and the recognition of a valuation allowance of approximately $40 million against the net deferred tax asset position for certain standalone state filing jurisdictions as a result of the separation.

(d)For Exelon, reflects the income tax expense related to the write-off of federal tax credits subject to recapture of approximately $15 million as a result of the separation.

(e)For Exelon, primarily reflects the nondeductible transaction costs of approximately $19 million arising as part of the separation.

(f)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. For BGE, the income tax benefit is primarily due to the Maryland multi-year plan which resulted in the acceleration of

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certain income tax benefits. For ACE, the lower effective tax rate is primarily due to the acceleration of certain income tax benefits due to distribution rate case settlements.

Unrecognized Tax Benefits

Exelon, PHI and ACE have the following unrecognized tax benefits as of March 31, 2022 and December 31, 2021. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.

			Exelon												PHI						ACE
March 31, 2022			$	146											$	56					$	16
December 31, 2021			143												56						16

__________

(a)As of March 31, 2022, Exelon recorded a receivable of approximately $50 million in Noncurrent other assets in the Consolidated Balance Sheet for Constellation’s share of unrecognized tax benefits for periods prior to the separation.

Reasonably possible the total amount of unrecognized tax benefits could significantly increase or decrease within 12 months after the reporting date

As of March 31, 2022, ACE has approximately $14 million of unrecognized state tax benefits that could significantly decrease within the 12 months after the reporting date based on the outcome of pending court cases involving other taxpayers. The unrecognized tax benefit, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.

Other Tax Matters

Separation (Exelon)

In connection with the separation, Exelon recorded an income tax expense related to continuing operations of approximately $148 million primarily due to the long-term marginal state income tax rate change of approximately $67 million discussed further below, the recognition of valuation allowances of approximately $40 million against the net deferred tax assets positions for certain standalone state filing jurisdictions, the write-off of federal and state tax credits subject to recapture of approximately $17 million, and nondeductible transaction costs for federal and state taxes of approximately $24 million.

Tax Matters Agreement (Exelon)

In connection with the separation, Exelon entered into a TMA with Constellation. The TMA governs the respective rights, responsibilities, and obligations between Exelon and Constellation after the separation with respect to tax liabilities, refunds and attributes for open tax years that Constellation was part of Exelon’s consolidated group for U.S. federal, state, and local tax purposes.

Indemnification for Taxes. As a former subsidiary of Exelon, Constellation has joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods prior to the separation. The TMA specifies that Constellation is liable for their share of taxes required to be paid by Exelon with respect to taxable periods prior to the separation to the extent Constellation would have been responsible for such taxes under the existing Exelon tax sharing agreement. As of March 31, 2022, Exelon recorded a receivable of approximately $55 million in Current other assets in the Consolidated Balance Sheet for Constellation’s share of taxes for periods prior to the separation.

Tax Refunds. The TMA specifies that Constellation is entitled to their share of any future tax refunds claimed by Exelon with respect to taxable periods prior to the separation to the extent that Constellation would have received such tax refunds under the existing Exelon tax sharing agreement.

Tax Attributes. At the date of separation certain tax attributes, primarily pre-closing tax credit carryforwards, that were generated by Constellation were required by law to be allocated to Exelon. The TMA also provides that Exelon will reimburse Constellation when those allocated tax credit carryforwards are utilized. As of March 31, 2022, Exelon recorded a payable of approximately $11 million and $484 million in Current other liabilities and Noncurrent other liabilities, respectively, in the Consolidated Balance Sheet for tax credit carryforwards that are expected to be utilized and reimbursed to Constellation.

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Defined Benefit Pension and OPEB

Effective February 1, 2022, in connection with the separation, pension and OPEB obligations and assets for current and former employees of the Constellation business and certain other former employees of Exelon and its subsidiaries transferred to pension and OPEB plans and trusts maintained by Constellation or its subsidiaries. The Exelon New England Union Employees Pension Plan and Constellation Mystic Power, LLC Union Employees Pension Plan Including Plan A and Plan B were transferred. The following OPEB plans were also transferred: Constellation Mystic Power, LLC Post-Employment Medical Account Savings Plan, Exelon New England Union Post-Employment Medical Savings Account Plan, and the Nine Mile Point Nuclear Station, LLC Medical Care and Prescription Drug Plan for Retired Employees.

As a result of the separation, Exelon restructured certain of its qualified pension plans. Pension obligations and assets for current and former employees continuing with Exelon and who are participants in the Exelon Employee Pension Plan for Clinton, TMI, and Oyster Creek, Pension Plan of Constellation Energy Nuclear Group, LLC, and Nine Mile Point Pension Plan were merged into the Pension Plan of Constellation Energy Group, Inc, which was subsequently renamed, Exelon Pension Plan (EPP). Exelon employees who participated in these plans prior to the separation now participate in the EPP. The merging of the plans did not change the benefits offered to the plan participants and, thus, had no impact on Exelon's pension obligations.

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The tables below show the pension and OPEB plans in which employees of each operating company participated as of March 31, 2022:

Operating Company(a)

Name of Plan:

ComEd

PECO

BGE

PHI

Pepco

DPL

ACE

Qualified Pension Plans:

Exelon Corporation Retirement Program

X

X

X

X

X

X

X

Exelon Corporation Pension Plan for Bargaining Unit Employees

X

Exelon Pension Plan

X

X

X

X

X

X

X

Pepco Holdings LLC Retirement Plan

X

X

X

X

X

X

X

Non-Qualified Pension Plans:

Exelon Corporation Supplemental Pension Benefit Plan and 2000 Excess Benefit Plan

X

X

X

Exelon Corporation Supplemental Management Retirement Plan

X

X

X

X

X

Constellation Energy Group, Inc. Senior Executive Supplemental Plan

X

X

Constellation Energy Group, Inc. Supplemental Pension Plan

X

X

Constellation Energy Group, Inc. Benefits Restoration Plan

X

X

X

Baltimore Gas & Electric Company Executive Benefit Plan

X

Baltimore Gas & Electric Company Manager Benefit Plan

X

X

Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan

X

X

X

X

Conectiv Supplemental Executive Retirement Plan

X

X

X

Pepco Holdings LLC Combined Executive Retirement Plan

X

X

Atlantic City Electric Director Retirement Plan

X

X

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Operating Company(a)

Name of Plan:

ComEd

PECO

BGE

PHI

Pepco

DPL

ACE

OPEB Plans:

PECO Energy Company Retiree Medical Plan

X

X

X

X

X

X

X

Exelon Corporation Health Care Program

X

X

X

X

X

X

X

Exelon Corporation Employees’ Life Insurance Plan

X

X

X

Exelon Corporation Health Reimbursement Arrangement Plan

X

X

X

BGE Retiree Medical Plan

X

X

X

X

X

X

BGE Retiree Dental Plan

X

Exelon Employee Life Insurance Plan and Family Life Insurance Plan

X

X

X

X

X

Exelon Retiree Medical Plan of Constellation Energy Nuclear Group, LLC

X

X

X

Exelon Retiree Dental Plan of Constellation Energy Nuclear Group, LLC

X

X

X

Pepco Holdings LLC Welfare Plan for Retirees

X

X

X

X

X

X

X

__________

(a)Employees generally remain in their legacy benefit plans when transferring between operating companies.

As of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. The remeasurement and separation resulted in a decrease to the pension obligation, net of plan assets, of $921 million and a decrease to the OPEB obligation of $893 million. Additionally, accumulated other comprehensive loss, decreased by $1,994 million (after-tax) and regulatory assets and liabilities increased by $14 million and $5 million respectively. Key assumptions were held consistent with the year end December 31, 2021 assumptions with the exception of the discount rate.

The majority of the 2022 pension benefit cost for the Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 3.24%. The majority of the 2022 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.44% for funded plans and a discount rate of 3.20%.

During the first quarter of 2022, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of February 1, 2022. This valuation resulted in a decrease to the pension obligation of $24 million and an increase to the OPEB obligation of $5 million. Additionally, accumulated other comprehensive loss increased by $5 million (after-tax) and regulatory assets and liabilities decreased by $30 million and $3 million, respectively.

A portion of the net periodic benefit cost for all plans is capitalized within the Consolidated Balance Sheets. The following table presents the components of Exelon's net periodic benefit costs, prior to capitalization, for the three months ended March 31, 2022 and 2021.

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			Pension Benefits												OPEB
			Three Months Ended March 31,												Three Months Ended March 31,
			2022						2021						2022						2021
Components of net periodic benefit cost:
Service cost			$	61					$	74					$	10					$	14
Interest cost			110						102						19						17
Expected return on assets			(209)						(213)						(25)						(26)
Amortization of:
Prior service cost (credit)			1						1						(5)						(6)
Actuarial loss			76						100						4						7
Curtailment benefits			—						—						—						(1)
Net periodic benefit cost			$	39					$	64					$	3					$	5

The amounts below represent the Registrants' allocated pension and OPEB costs. For Exelon, the service cost component is included in Operating and maintenance expense and Property, plant, and equipment, net while the non-service cost components are included in Other, net and Regulatory assets. For the Utility Registrants, the service cost and non-service cost components are included in Operating and maintenance expense and Property, plant, and equipment, net in their consolidated financial statements.

												Three Months Ended March 31,
Pension and OPEB Costs																		2022						2021
Exelon																		$	42					$	69
ComEd																		16						32
PECO																		(2)						2
BGE																		11						15
PHI																		13						12
Pepco																		2						2
DPL																		1						1
ACE																		3						3

Defined Contribution Savings Plan

The Registrants participate in a 401(k) defined contribution savings plan that is sponsored by Exelon. The plan is qualified under applicable sections of the IRC and allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents the matching contributions to the savings plans for the three months ended March 31, 2022 and 2021, respectively.

												Three Months Ended March 31,
Savings Plans Matching Contributions																		2022						2021
Exelon																		$	20					$	20
ComEd																		8						8
PECO																		3						3
BGE																		2						2
PHI																		3						3
Pepco																		1						1
DPL																		1						1
ACE																		—						—

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The Registrants use derivative instruments to manage commodity price risk related to ongoing business operations.

Authoritative guidance requires that derivative instruments be recognized as either assets or liabilities at fair value, with changes in fair value of the derivative recognized in earnings immediately. Other accounting treatments are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis. These alternative permissible accounting treatments include NPNS, cash flow hedges, and fair value hedges. At ComEd, derivative economic hedges related to commodities are recorded at fair value and offset by a corresponding regulatory asset or liability. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivatives settle and revenue or expense is recognized in earnings as the underlying physical commodity is sold or consumed.

ComEd’s use of cash collateral is generally unrestricted unless ComEd is downgraded below investment grade. Cash collateral held by PECO, BGE, Pepco, DPL, and ACE must be deposited in an unaffiliated major U.S. commercial bank or foreign bank with a U.S. branch office that meet certain qualifications.

Commodity Price Risk

The Registrants employ established policies and procedures to manage their risks associated with market fluctuations in commodity prices by entering into physical and financial derivative contracts, which are either determined to be non-derivative or classified as economic hedges. The Utility Registrants procure electric and natural gas supply through a competitive procurement process approved by each of the respective state utility commissions. The Utility Registrants’ hedging programs are intended to reduce exposure to energy and natural gas price volatility and have no direct earnings impact as the costs are fully recovered from customers through

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regulatory-approved recovery mechanisms. The following table provides a summary of the Utility Registrants’ primary derivative hedging instruments, listed by commodity and accounting treatment.

Registrant			Commodity			Accounting Treatment			Hedging Instrument
ComEd			Electricity			NPNS			Fixed price contracts based on all requirements in the IPA procurement plans.
			Electricity			Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(a)			20-year floating-to-fixed energy swap contracts beginning June 2012 based on the renewable energy resource procurement requirements in the Illinois Settlement Legislation of approximately 1.3 million MWhs per year.
PECO			Electricity			NPNS			Fixed price contracts for default supply requirements through full requirements contracts.
			Gas			NPNS			Fixed price contracts to cover about 10% of planned natural gas purchases in support of projected firm sales.
BGE			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
			Gas			NPNS			Fixed price contracts for between 10-20% of forecasted system supply requirements for flowing (i.e., non-storage) gas for the November through March period.
Pepco			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
DPL			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
			Gas			NPNS			Fixed and index priced contracts through full requirements contracts.
						Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(b)			Exchange traded future contracts for up to 50% of estimated monthly purchase requirements each month, including purchases for storage injections.
ACE			Electricity			NPNS			Fixed price contracts for all BGS requirements through full requirements contracts.

__________

(a)See Note 3 — Regulatory Matters of the 2021 Form 10-K for additional information.

(b)The fair value of the DPL economic hedge is not material as of March 31, 2022 and December 31, 2021.

The fair value of derivative economic hedges is presented in current and noncurrent Mark-to-market derivative liabilities in Exelon's and ComEd's Consolidated Balance Sheets.

Credit Risk

The Registrants would be exposed to credit-related losses in the event of non-performance by counterparties on executed derivative instruments. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. The Utility Registrants have contracts to procure electric and natural gas supply that provide suppliers with a certain amount of unsecured credit. If the exposure on the supply contract exceeds the amount of unsecured credit, the suppliers may be required to post collateral. The net credit exposure is mitigated primarily by the ability to recover procurement costs through customer rates. As of March 31, 2022, the amount of cash collateral held with external counterparties by Exelon, ComEd, PHI, and DPL was $192 million, $72 million, $86 million, and $73 million, respectively, which is recorded in Other current liabilities in Exelon's, ComEd's, PHI's, and DPL's Consolidated Balance Sheets. The amounts for PECO, BGE, Pepco, and ACE were not material as of March 31, 2022. As of December 31, 2021, the amounts for ComEd and DPL were $41 million and $43 million, respectively. The amounts for Exelon, PECO, BGE, PHI, Pepco, and ACE were not material as of December 31, 2021.

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Short-Term Borrowings

Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and borrowings from the Exelon intercompany money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.

Commercial Paper

The following table reflects the Registrants' commercial paper programs as of March 31, 2022 and December 31, 2021. PECO and ComEd had no commercial paper borrowings as of March 31, 2022 and December 31, 2021.

			Outstanding Commercial Paper as of												Average Interest Rate on Commercial Paper Borrowings as of
Commercial Paper Issuer			March 31, 2022						December 31, 2021						March 31, 2022						December 31, 2021
Exelon(a)			$	250					$	599					0.87		%				0.35		%
BGE			250						130						0.87		%				0.37		%
PHI(b)			—						469						—		%				0.35		%
Pepco			—						175						—		%				0.33		%
DPL			—						149						—		%				0.36		%
ACE			—						145						—		%				0.35		%

__________

(a)Exelon Corporate had no outstanding commercial paper borrowings as of March 31, 2022 and December 31, 2021.

(b)Represents the consolidated amounts of Pepco, DPL, and ACE.

Revolving Credit Agreements

On February 1, 2022, Exelon Corporate and the Utility Registrants' each entered into a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. The following table reflects the credit agreements:

Borrower						Aggregate Bank Commitment						Interest Rate
Exelon Corporate						900						SOFR plus 1.275		%
ComEd						1,000						SOFR plus 1.000		%
PECO						600						SOFR plus 0.900		%
BGE						600						SOFR plus 0.900		%
Pepco						300						SOFR plus 1.075		%
DPL						300						SOFR plus 1.000		%
ACE						300						SOFR plus 1.075		%

See Note 17 — Debt and Credit Agreements of the Exelon 2021 Form 10-K for additional information on the Registrants' credit facilities.

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Short-Term Loan Agreements

On March 23, 2017, Exelon Corporate entered into a term loan agreement for $500 million. The loan agreement was renewed on March 14, 2022 and will expire on March 16, 2023. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.65% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-term borrowings.

On March 31, 2021, Exelon Corporate entered into a 364-day term loan agreement for $150 million with a variable interest rate of LIBOR plus 0.65% and an expiration date of March 30, 2022. Exelon Corporate repaid the term loan on March 30, 2022.

In connection with the separation, on January 24, 2022, Exelon Corporate entered into a 364-day term loan agreement for $1.15 billion. The loan agreement will expire on January 23, 2023. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.75% with a 22.5 basis point increase commencing on July 24, 2022. All indebtedness pursuant to the loan agreement is unsecured.

Long-Term Debt

Issuance of Long-Term Debt

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During the three months ended March 31, 2022, the following long-term debt was issued:

Company

Type

Interest Rate

Maturity

Amount

Use of Proceeds

Exelon

SMBC Term Loan Agreement

SOFR plus 0.65%

July 21, 2023

$300

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

U.S. Bank Term Loan Agreement

SOFR plus 0.65%

July 21, 2023

300

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

PNC Term Loan Agreement

SOFR plus 0.65%

July 24, 2023

250

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

Notes

2.75%

March 15, 2027

650

Repay existing indebtedness and for general corporate purposes.

Exelon

Notes

3.35%

March 15, 2032

650

Repay existing indebtedness and for general corporate purposes.

Exelon

Notes

4.10%

March 15, 2052

700

Repay existing indebtedness and for general corporate purposes.

ComEd

First Mortgage Bonds, Series 132

3.15%

March 15, 2032

300

Repay outstanding commercial paper obligations and to fund other general corporate purposes.

ComEd

First Mortgage Bonds, Series 133

3.85%

March 15, 2052

450

Repay outstanding commercial paper obligations and to fund other general corporate purposes.

Pepco(a)

First Mortgage Bonds

3.97%

March 24, 2052

400

Repay existing indebtedness and for general corporate purposes.

DPL

First Mortgage Bonds

3.06%

February 15, 2052

125

Repay existing indebtedness and for general corporate purposes.

ACE

First Mortgage Bonds

2.27%

February 15, 2032

25

Repay existing indebtedness and for general corporate purposes.

ACE

First Mortgage Bonds

3.06%

February 15, 2052

150

Repay existing indebtedness and for general corporate purposes.

__________

(a)On March 24, 2022, Pepco entered into a purchase agreement of First Mortgage Bonds of $225 million at 3.35% due on September 15, 2032. The closing date of the issuance is expected to occur in September 2022.

Long-Term Debt to Affiliates

As of December 31, 2021, Exelon Corporate had $319 million recorded to intercompany notes receivable from Generation. See Note 17 — Debt and Credit Agreements of the Exelon 2021 Form 10-K for additional information. In connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle the intercompany loan.

Debt Covenants

As of March 31, 2022, the Registrants are in compliance with debt covenants.

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Exelon measures and classifies fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

•Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Registrants have the ability to liquidate as of the reporting date.

•Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

•Level 3 - unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.

Fair Value of Financial Liabilities Recorded at Amortized Cost

The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of March 31, 2022 and December 31, 2021. The Registrants have no financial liabilities classified as Level 1.

The carrying amounts of the Registrants’ short-term liabilities as presented in their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.

						March 31, 2022																								December 31, 2021
						Carrying Amount						Fair Value																		Carrying Amount						Fair Value
												Level 2						Level 3						Total												Level 2						Level 3						Total
Long-Term Debt, including amounts due within one year(a)
Exelon						$	37,162					$	35,174					$	2,645					$	37,819					$	32,902					$	34,897					$	2,217					$	37,114
ComEd						10,515						10,894						—						10,894						9,773						11,305						—						11,305
PECO						4,198						4,244						50						4,294						4,197						4,740						50						4,790
BGE						3,961						3,969						—						3,969						3,961						4,406						—						4,406
PHI						8,233						5,453						2,595						8,048						7,547						5,970						2,167						8,137
Pepco						3,841						2,901						1,272						4,173						3,445						3,201						975						4,176
DPL						1,935						1,300						592						1,892						1,810						1,426						552						1,978
ACE						1,757						1,007						732						1,739						1,582						1,091						641						1,732
Long-Term Debt to Financing Trusts
Exelon						$	390					$	—					$	435					$	435					$	390					$	—					$	470					$	470
ComEd						205						—						228						228						205						—						248						248
PECO						184						—						207						207						184						—						222						222

__________

(a)Includes unamortized debt issuance costs, unamortized debt discount and premium, net, purchase accounting fair value adjustments, and finance lease liabilities which are not fair valued. Refer to Note 17 - Debt and Credit Agreements of the Exelon 2021 Form 10-K for unamortized debt issuance costs, unamortized debt discount and premium, net, and purchase accounting fair value adjustments and Note 11 - Leases of the Exelon 2021 Form 10-K for finance lease liabilities.

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Recurring Fair Value Measurements

The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of March 31, 2022 and December 31, 2021:

Exelon

			As of March 31, 2022																								As of December 31, 2021
			Level 1						Level 2						Level 3												Total						Level 1						Level 2						Level 3												Total
Assets
Cash equivalents(a)			$	2,418					$	—					$	—											$	2,418					$	524					$	—					$	—											$	524
Rabbi trust investments
Cash equivalents			65						—						—												65						60						—						—												60
Mutual funds			55						—						—												55						60						—						—												60
Fixed income			—						9						—												9						—						10						—												10
Life insurance contracts			—						63						37												100						—						61						37												98
Rabbi trust investments subtotal			120						72						37												229						120						71						37												228
Total assets			2,538						72						37												2,647						644						71						37												752
Liabilities
Mark-to-market derivative liabilities			—						—						(144)												(144)						—						—						(219)												(219)
Deferred compensation obligation			—						(84)						—												(84)						—						(131)						—												(131)
Total liabilities			—						(84)						(144)												(228)						—						(131)						(219)												(350)
Total net assets (liabilities)			$	2,538					$	(12)					$	(107)											$	2,419					$	644					$	(60)					$	(182)											$	402

__________    

(a)Exelon excludes cash of $470 million and $464 million as of March 31, 2022 and December 31, 2021, respectively, and restricted cash of $110 million and $49 million as of March 31, 2022 and December 31, 2021, respectively, and includes long-term restricted cash of $92 million and $44 million as of March 31, 2022 and December 31, 2021, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets.

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ComEd, PECO, and BGE

			ComEd																								PECO																								BGE
As of March 31, 2022			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	537					$	—					$	—					$	537					$	9					$	—					$	—					$	9					$	—					$	—					$	—					$	—
Rabbi trust investments
Cash equivalents			—						—						—						—						1						—						—						1						—						—						—						—
Mutual funds			—						—						—						—						9						—						—						9						7						—						—						7
Life insurance contracts			—						—						—						—						—						17						—						17						—						—						—						—
Rabbi trust investments subtotal			—						—						—						—						10						17						—						27						7						—						—						7
Total assets			537						—						—						537						19						17						—						36						7						—						—						7
Liabilities
Mark-to-market derivative liabilities(b)			—						—						(144)						(144)						—						—						—						—						—						—						—						—
Deferred compensation obligation			—						(9)						—						(9)						—						(8)						—						(8)						—						(5)						—						(5)
Total liabilities			—						(9)						(144)						(153)						—						(8)						—						(8)						—						(5)						—						(5)
Total net assets (liabilities)			$	537					$	(9)					$	(144)					$	384					$	19					$	9					$	—					$	28					$	7					$	(5)					$	—					$	2

			ComEd																								PECO																								BGE
As of December 31, 2021			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	237					$	—					$	—					$	237					$	9					$	—					$	—					$	9					$	—					$	—					$	—					$	—
Rabbi trust investments
Mutual funds			—						—						—						—						11						—						—						11						14						—						—						14
Life insurance contracts			—						—						—						—						—						16						—						16						—						—						—						—
Rabbi trust investments subtotal			—						—						—						—						11						16						—						27						14						—						—						14
Total assets			237						—						—						237						20						16						—						36						14						—						—						14
Liabilities
Mark-to-market derivative liabilities(b)			—						—						(219)						(219)						—						—						—						—						—						—						—						—
Deferred compensation obligation			—						(10)						—						(10)						—						(9)						—						(9)						—						(7)						—						(7)
Total liabilities			—						(10)						(219)						(229)						—						(9)						—						(9)						—						(7)						—						(7)
Total net assets (liabilities)			$	237					$	(10)					$	(219)					$	8					$	20					$	7					$	—					$	27					$	14					$	(7)					$	—					$	7

__________

(a)ComEd excludes cash of $71 million and $105 million as of March 31, 2022 and December 31, 2021, respectively, and restricted cash of $73 million and $42 million as of March 31, 2022 and December 31, 2021, respectively, and includes long-term restricted cash of $92 million and $43 million as of March 31, 2022 and December 31, 2021, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets. PECO excludes cash of $25 million and $35 million as of March 31, 2022 and December 31, 2021, respectively. BGE excludes cash of $41 million and $51 million as of March 31, 2022 and December 31, 2021, respectively, and restricted cash of $34 million and $4 million as of March 31, 2022 and December 31, 2021, respectively.

(b)The Level 3 balance consists of the current and noncurrent liability of none and $144 million, respectively, as of March 31, 2022 and $18 million and $201 million, respectively, as of December 31, 2021 related to floating-to-fixed energy swap contracts with unaffiliated suppliers.

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PHI, Pepco, DPL, and ACE

			As of March 31, 2022																								As of December 31, 2021
PHI			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	599					$	—					$	—					$	599					$	110					$	—					$	—					$	110
Rabbi trust investments
Cash equivalents			61						—						—						61						59						—						—						59
Mutual funds			12						—						—						12						14						—						—						14
Fixed income			—						9						—						9						—						10						—						10
Life insurance contracts			—						24						36						60						—						27						35						62
Rabbi trust investments subtotal			73						33						36						142						73						37						35						145
Total assets			672						33						36						741						183						37						35						255
Liabilities
Deferred compensation obligation			—						(17)						—						(17)						—						(18)						—						(18)
Total liabilities			—						(17)						—						(17)						—						(18)						—						(18)
Total net assets			$	672					$	16					$	36					$	724					$	183					$	19					$	35					$	237

			Pepco																								DPL																								ACE
As of March 31, 2022			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	294					$	—					$	—					$	294					$	152					$	—					$	—					$	152					$	153					$	—					$	—					$	153
Rabbi trust investments
Cash equivalents			59						—						—						59						—						—						—						—						—						—						—						—
Life insurance contracts			—						24						36						60						—						—						—						—						—						—						—						—
Rabbi trust investments subtotal			59						24						36						119						—						—						—						—						—						—						—						—
Total assets			353						24						36						413						152						—						—						152						153						—						—						153
Liabilities
Deferred compensation obligation			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total liabilities			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total net assets			$	353					$	22					$	36					$	411					$	152					$	—					$	—					$	152					$	153					$	—					$	—					$	153

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			Pepco																								DPL																								ACE
As of December 31, 2021			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	31					$	—					$	—					$	31					$	43					$	—					$	—					$	43					$	—					$	—					$	—					$	—
Rabbi trust investments
Cash equivalents			58						—						—						58						—						—						—						—						—						—						—						—
Life insurance contracts			—						27						35						62						—						—						—						—						—						—						—						—
Rabbi trust investments subtotal			58						27						35						120						—						—						—						—						—						—						—						—
Total assets			89						27						35						151						43						—						—						43						—						—						—						—
Liabilities
Deferred compensation obligation			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total liabilities			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total net assets			$	89					$	25					$	35					$	149					$	43					$	—					$	—					$	43					$	—					$	—					$	—					$	—

__________

(a)PHI excludes cash of $300 million and $100 million as of March 31, 2022 and December 31, 2021, respectively, and restricted cash of $3 million as of both March 31, 2022 and December 31, 2021. Pepco excludes cash of $239 million and $34 million as of March 31, 2022 and December 31, 2021, respectively, and restricted cash of $3 million as of both March 31, 2022 and December 31, 2021. DPL excludes cash of $41 million and $28 million as of March 31, 2022 and December 31, 2021, respectively. ACE excludes cash of $15 million and $29 million as of March 31, 2022 and December 31, 2021, respectively.

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Reconciliation of Level 3 Assets and Liabilities

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three months ended March 31, 2022 and 2021:

			Exelon						ComEd						PHI and Pepco
Three months ended March 31, 2022			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of January 1, 2022			$	(182)					$	(219)					$	35
Total realized / unrealized gains
Included in net income(a)			1						—						1
Included in regulatory assets			75						75			(b)			—
Transfers out of Level 3			(1)						—						—
Balance as of March 31, 2022			$	(107)					$	(144)					$	36
The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of March 31, 2022			$	1					$	—					$	1

			Exelon						ComEd						PHI and Pepco
Three Months Ended March 31, 2021			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of January 1, 2021			$	(267)					$	(301)					$	34
Total realized / unrealized gains
Included in net income(a)			1						—						1
Included in regulatory assets			6						6			(b)			—
Balance as of March 31, 2021			$	(260)					$	(295)					$	35
The amount of total gains included in income attributed to the change in unrealized gain related to assets and liabilities as of March 31, 2021			$	1					$	—					$	1

__________

(a)Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

(b)Includes $69 million of increases in fair value and an increase for realized losses due to settlements of $6 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended March 31, 2022. Includes $2 million of decreases in fair value and an increase for realized losses due to settlements of $8 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended March 31, 2021.

Valuation Techniques Used to Determine Fair Value

Exelon’s valuation techniques used to measure the fair value of the assets and liabilities shown in the tables below are in accordance with the policies discussed in Note 18 — Fair Value of Financial Assets and Liabilities of the Exelon 2021 Form 10-K.

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Mark-to-Market Derivatives (Exelon and ComEd)

The table below discloses the significant inputs to the forward curve used to value mark-to-market derivatives.

Type of trade						Fair Value as of March 31, 2022						Fair Value as of December 31, 2021						Valuation Technique						Unobservable Input						2022 Range & Arithmetic Average															2021 Range & Arithmetic Average
Mark-to-market derivatives						$	(144)					$	(219)					Discounted Cash Flow						Forward heat rate(a)						8.90x			-			9.10x			9.00x						9x			-			10x			9.13x
																								Marketability reserve						4%			-			5%			4.35%						3%			-			7%			4.77%
																								Renewable factor						92%			-			120%			98%						92%			-			120%			97%

__________

(a)Quoted forward natural gas rates are utilized to project the forward power curve for the delivery of energy at specified future dates.

The following is an update to the current status of commitments and contingencies set forth in Note 19 — Commitments and Contingencies of the Exelon 2021 Form 10-K.

Commitments

PHI Merger Commitments (Exelon, PHI, Pepco, DPL, and ACE). Approval of the PHI Merger in Delaware, New Jersey, Maryland, and the District of Columbia was conditioned upon Exelon and PHI agreeing to certain commitments. The following amounts represent total commitment costs that have been recorded since the acquisition date and the total remaining obligations for Exelon, PHI, Pepco, DPL, and ACE as of March 31, 2022:

Description			Exelon						PHI						Pepco						DPL						ACE
Total commitments			$	513					$	320					$	120					$	89					$	111
Remaining commitments(a)			65						55						46						6						3

__________

(a)Remaining commitments extend through 2026 and include rate credits, energy efficiency programs and delivery system modernization.

In addition, Exelon has committed to purchase 100 MWs of wind energy in PJM. DPL has committed to conducting three RFPs to procure up to a total of 120 MWs of wind RECs for the purpose of meeting Delaware's renewable portfolio standards. DPL has conducted two of the three wind REC RFPs. The first 40 MW wind REC tranche was conducted in 2017 and did not result in a purchase agreement. The second 40 MW wind REC tranche was conducted in 2018 and resulted in a proposed REC purchase agreement that was approved by the DEPSC in 2019. The RFP for the third and final 40 MW wind REC tranche will be conducted in the second half of 2022.

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Commercial Commitments (All Registrants). The Registrants’ commercial commitments as of March 31, 2022, representing commitments potentially triggered by future events were as follows:

									Expiration within
			Total						2022						2023						2024						2025						2026						2027 and beyond
Exelon
Letters of credit			$	14					$	12					$	2					$	—					$	—					$	—					$	—
Surety bonds(a)			201						188						11						2						—						—						—
Financing trust guarantees			378						—						—						—						—						—						378
Guaranteed lease residual values(b)			30						1						3						6						5						5						10
Total commercial commitments			$	623					$	201					$	16					$	8					$	5					$	5					$	388
ComEd
Letters of credit			$	7					$	7					$	—					$	—					$	—					$	—					$	—
Surety bonds(a)			17						12						3						2						—						—						—
Financing trust guarantees			200						—						—						—						—						—						200
Total commercial commitments			$	224					$	19					$	3					$	2					$	—					$	—					$	200
PECO
Letters of credit			$	1					$	1					$	—					$	—					$	—					$	—					$	—
Surety bonds(a)			3						2						1						—						—						—						—
Financing trust guarantees			178						—						—						—						—						—						178
Total commercial commitments			$	182					$	3					$	1					$	—					$	—					$	—					$	178
BGE
Letters of credit			$	2					$	2					$	—					$	—					$	—					$	—					$	—
Surety bonds(a)			4						3						1						—						—						—						—
Total commercial commitments			$	6					$	5					$	1					$	—					$	—					$	—					$	—
PHI
Surety bonds(a)			$	94					$	91					$	3					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			30						1						3						6						5						5						10
Total commercial commitments			$	124					$	92					$	6					$	6					$	5					$	5					$	10
Pepco
Surety bonds(a)			$	84					$	84					$	—					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			10						—						1						2						2						2						3
Total commercial commitments			$	94					$	84					$	1					$	2					$	2					$	2					$	3
DPL
Surety bonds(a)			$	6					$	3					$	3					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			13						1						1						3						2						2						4
Total commercial commitments			$	19					$	4					$	4					$	3					$	2					$	2					$	4
ACE
Surety bonds(a)			$	4					$	4					$	—					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			7						—						1						1						1						1						3
Total commercial commitments			$	11					$	4					$	1					$	1					$	1					$	1					$	3

__________

(a)Surety bonds — Guarantees issued related to contract and commercial agreements, excluding bid bonds.

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(b)Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The lease term associated with these assets ranges from 1 to 8 years. The maximum potential obligation at the end of the minimum lease term would be $73 million guaranteed by Exelon and PHI, of which $25 million, $30 million, and $18 million is guaranteed by Pepco, DPL, and ACE, respectively. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote.

Environmental Remediation Matters

General (All Registrants). The Registrants’ operations have in the past, and may in the future, require substantial expenditures to comply with environmental laws. Additionally, under Federal and state environmental laws, the Registrants are generally 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. In addition, the Registrants are currently involved in a number of proceedings relating to sites where hazardous substances have been deposited and may be subject to additional proceedings in the future. Unless otherwise disclosed, the Registrants cannot reasonably estimate whether they will incur significant liabilities for additional investigation and remediation costs at these or additional sites identified by the Registrants, environmental agencies or others, or whether such costs will be recoverable from third parties, including customers. Additional costs could have a material, unfavorable impact on the Registrants' financial statements.

MGP Sites (All Registrants). ComEd, PECO, BGE, and DPL have identified sites where former MGP or gas purification activities have or may have resulted in actual site contamination. For almost all of these sites, there are additional PRPs that may share responsibility for the ultimate remediation of each location.

•ComEd has 21 sites that are currently under some degree of active study and/or remediation. ComEd expects the majority of the remediation at these sites to continue through at least 2031.

•PECO has 6 sites that are currently under some degree of active study and/or remediation. PECO expects the majority of the remediation at these sites to continue through at least 2023.

•BGE has 4 sites that currently require some level of remediation and/or ongoing activity. BGE expects the majority of the remediation at these sites to continue through at least 2023.

•DPL has 1 site that is currently under study and the required cost at the site is not expected to be material.

The historical nature of the MGP and gas purification sites and the fact that many of the sites have been buried and built over, impacts the ability to determine a precise estimate of the ultimate costs prior to initial sampling and determination of the exact scope and method of remedial activity. Management determines its best estimate of remediation costs using all available information at the time of each study, including probabilistic and deterministic modeling for ComEd and PECO, and the remediation standards currently required by the applicable state environmental agency. Prior to completion of any significant clean up, each site remediation plan is approved by the appropriate state environmental agency.

ComEd, pursuant to an ICC order, and PECO, pursuant to a PAPUC order, are currently recovering environmental remediation costs of former MGP facility sites through customer rates. While BGE and DPL do not have riders for MGP clean-up costs, they have historically received recovery of actual clean-up costs in distribution rates.

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As of March 31, 2022 and December 31, 2021, the Registrants had accrued the following undiscounted amounts for environmental liabilities in Other current liabilities and Other deferred credits and other liabilities in their respective Consolidated Balance Sheets:

			March 31, 2022												December 31, 2021
			Total environmental investigation and remediation liabilities						Portion of total related to MGP investigation and remediation						Total environmental investigation and remediation liabilities						Portion of total related to MGP investigation and remediation
Exelon			$	354					$	305					$	352					$	303
ComEd			279						279						279						279
PECO			21						20						22						20
BGE			7						6						6						4
PHI			42						—						42						—
Pepco			40						—						40						—
DPL			1						—						1						—
ACE			1						—						1						—

Benning Road Site (Exelon, PHI, and Pepco). In September 2010, PHI received a letter from EPA identifying the Benning Road site as one of six land-based sites potentially contributing to contamination of the lower Anacostia River. A portion of the site, which is owned by Pepco, was formerly the location of an electric generating facility owned by Pepco subsidiary, Pepco Energy Services, which became a part of Generation, following the 2016 merger between PHI and Exelon. This generating facility was deactivated in June 2012. The remaining portion of the site consists of a Pepco transmission and distribution service center that remains in operation. In December 2011, the U.S. District Court for the District of Columbia approved a Consent Decree entered into by Pepco and Pepco Energy Services (hereinafter "Pepco Entities") with the DOEE, which requires the Pepco Entities to conduct a Remedial Investigation and Feasibility Study (RI/FS) for the Benning Road site and an approximately 10 to 15-acre portion of the adjacent Anacostia River. The purpose of this RI/FS is to define the nature and extent of contamination from the Benning Road site and to evaluate remedial alternatives.

Pursuant to an internal agreement between the Pepco Entities, since 2013, Pepco has performed the work required by the Consent Decree and has been reimbursed for that work by an agreed upon allocation of costs between the Pepco Entities. In September 2019, the Pepco Entities issued a draft “final” RI report which DOEE approved on February 3, 2020. The Pepco Entities are developing a FS to evaluate possible remedial alternatives for submission to DOEE. The Court has established a schedule for completion of the FS, and approval by the DOEE, by September 16, 2022. After completion and approval of the FS, DOEE will prepare a Proposed Plan for public comment and then issue a Record of Decision (ROD) identifying any further response actions determined to be necessary. As part of the separation between Exelon and Constellation in February 2022, the internal agreement between the Pepco Entities for completion and payment for the remaining Consent Decree work was memorialized in a formal agreement for post-separation activities. A second post-separation assumption agreement between Exelon and Constellation transferred any of the potential remaining remediation liability, if any, of PES/Generation to a non-utility subsidiary of Exelon which going forward will be responsible for those liabilities. Exelon, PHI, and Pepco have determined that a loss associated with this matter is probable and have accrued an estimated liability, which is included in the table above.

Anacostia River Tidal Reach (Exelon, PHI, and Pepco). Contemporaneous with the Benning Road site RI/FS, being performed by the Pepco Entities, DOEE and National Park Service ("NPS") have been conducting a separate RI/FS focused on the entire tidal reach of the Anacostia River extending from just north of the Maryland-District of Columbia boundary line to the confluence of the Anacostia and Potomac Rivers. The river-wide RI incorporated the results of the river sampling performed by the Pepco Entities as part of the Benning RI/FS, as well as similar sampling efforts conducted by owners of other sites adjacent to this segment of the river and supplemental river sampling conducted by DOEE’s contractor. In April 2018, DOEE released a draft RI report for public review and comment. Pepco submitted written comments to the draft RI and participated in a public hearing.

Exelon, PHI, and Pepco have determined that it is probable that costs for remediation will be incurred and recorded a liability in the third quarter 2019 for management’s best estimate of its share of those costs. On September 30, 2020, DOEE released its Interim ROD. The Interim ROD reflects an adaptive management

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approach which will require several identified “hot spots” in the river to be addressed first while continuing to conduct studies and to monitor the river to evaluate improvements and determine potential future remediation plans. The adaptive management process chosen by DOEE is less intrusive, provides more long-term environmental certainty, is less costly, and allows for site specific remediation plans already underway, including the plan for the Benning Road site to proceed to conclusion. Pepco concluded that incremental exposure remains reasonably possible, but management cannot reasonably estimate a range of loss beyond the amounts recorded, which are included in the table above.

On July 12, 2021, DOEE and NPS held a virtual meeting with the PRP's in response to a General Notice Letter sent by each agency inviting the PRP's to participate in discussions, which Pepco attended.

In addition to the activities associated with the remedial process outlined above, CERCLA separately requires federal and state (here including Washington, D.C.) Natural Resource Trustees (federal or state agencies designated by the President or the relevant state, respectively, or Indian tribes) to conduct an assessment of any damages to natural resources within their jurisdiction as a result of the contamination that is being remediated. The Trustees can seek compensation from responsible parties for such damages, including restoration costs. During the second quarter of 2018, Pepco became aware that the Trustees are in the beginning stages of a Natural Resources Damages (NRD) assessment, a process that often takes many years beyond the remedial decision to complete. Pepco has entered into negotiations with the Trustees to evaluate possible incorporation of NRD assessment and restoration as part of its remedial activities associated with the Benning site to accelerate the NRD benefits for that portion of the Anacostia River Sediment Project ("ARSP") assessment. Pepco has concluded that a loss associated with the eventual NRD assessment is reasonably possible. Due to the very early stage of the assessment process, Pepco cannot reasonably estimate the final range of loss potentially resulting from this process.

As noted in the Benning Road Site disclosure above, as part of the separation of Exelon and Constellation in February 2022, an assumption agreement was executed transferring any potential future remediation liabilities associated with the Benning Site remediation to a non-utility subsidiary of Exelon. Similarly, any potential future liability associated with the ARSP was also assumed by this entity.

Litigation and Regulatory Matters

Deferred Prosecution Agreement (DPA) and Related Matters (Exelon and ComEd). Exelon and ComEd received a grand jury subpoena in the second quarter of 2019 from the U.S. Attorney’s Office for the Northern District of Illinois (USAO) requiring production of information concerning their lobbying activities in the State of Illinois. On October 4, 2019, Exelon and ComEd received a second grand jury subpoena from the USAO requiring production of records of any communications with certain individuals and entities. On October 22, 2019, the SEC notified Exelon and ComEd that it had also opened an investigation into their lobbying activities. On July 17, 2020, ComEd entered into a DPA with the USAO to resolve the USAO investigation. Under the DPA, the USAO filed a single charge alleging that ComEd improperly gave and offered to give jobs, vendor subcontracts, and payments associated with those jobs and subcontracts for the benefit of the Speaker of the Illinois House of Representatives and the Speaker’s associates, with the intent to influence the Speaker’s action regarding legislation affecting ComEd’s interests. The DPA provides that the USAO will defer any prosecution of such charge and any other criminal or civil case against ComEd in connection with the matters identified therein for a three-year period subject to certain obligations of ComEd, including payment to the U.S. Treasury of $200 million, which was paid in November 2020. Exelon was not made party to the DPA, and therefore the investigation by the USAO into Exelon’s activities ended with no charges being brought against Exelon. The SEC’s investigation remains ongoing and Exelon and ComEd have cooperated fully and intend to continue to cooperate fully with the SEC. Exelon and ComEd cannot predict the outcome of the SEC investigation. No loss contingency has been reflected in Exelon's and ComEd's consolidated financial statements with respect to the SEC investigation, as this contingency is neither probable nor reasonably estimable at this time.

Subsequent to Exelon announcing the receipt of the subpoenas, various lawsuits were filed, and various demand letters were received related to the subject of the subpoenas, the conduct described in the DPA and the SEC's investigation, including:

•Four putative class action lawsuits against ComEd and Exelon were filed in federal court on behalf of ComEd customers in the third quarter of 2020 alleging, among other things, civil violations of federal racketeering laws. In addition, the Citizens Utility Board (CUB) filed a motion to intervene in these cases

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on October 22, 2020 which was granted on December 23, 2020. On December 2, 2020, the court appointed interim lead plaintiffs in the federal cases which consisted of counsel for three of the four federal cases. These plaintiffs filed a consolidated complaint on January 5, 2021. CUB also filed its own complaint against ComEd only on the same day. The remaining federal case, Potter, et al. v. Exelon et al, differed from the other lawsuits as it named additional individual defendants not named in the consolidated complaint. However, the Potter plaintiffs voluntarily dismissed their complaint without prejudice on April 5, 2021. ComEd and Exelon moved to dismiss the consolidated class action complaint and CUB’s complaint on February 4, 2021 and briefing was completed on March 22, 2021. On March 25, 2021, the parties agreed, along with state court plaintiffs, discussed below, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On September 9, 2021, the federal court granted Exelon’s and ComEd’s motion to dismiss and dismissed the plaintiffs’ and CUB’s federal law claim with prejudice. The federal court also dismissed the related state law claims made by the federal plaintiffs and CUB on jurisdictional grounds. Plaintiffs appealed dismissal of the federal law claim to the Seventh Circuit Court of Appeals. Plaintiffs and CUB also refiled their state law claims in state court and moved to consolidate them with the already pending consumer state court class action, discussed below. Plaintiffs' opening appeal brief in the Seventh Circuit was filed on January 14, 2022. Exelon and ComEd filed their response brief on March 7, 2022, and plaintiffs filed their reply brief on April 6, 2022. The court has scheduled oral argument for May 17, 2022.

•Three putative class action lawsuits against ComEd and Exelon were filed in Illinois state court in the third quarter of 2020 seeking restitution and compensatory damages on behalf of ComEd customers. The cases were consolidated into a single action in October of 2020. In November 2020, CUB filed a motion to intervene in the cases pursuant to an Illinois statute allowing CUB to intervene as a party or otherwise participate on behalf of utility consumers in any proceeding which affects the interest of utility consumers. On November 23, 2020, the court allowed CUB’s intervention, but denied CUB's request to stay these cases. Plaintiffs subsequently filed a consolidated complaint, and ComEd and Exelon filed a motion to dismiss on jurisdictional and substantive grounds on January 11, 2021. Briefing on that motion was completed on March 2, 2021. The parties agreed, on March 25, 2021, along with the federal court, plaintiffs discussed above, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On December 23, 2021, the state court granted ComEd and Exelon's motion to dismiss with prejudice. On December 30, 2021, plaintiffs filed a motion to reconsider that dismissal and for permission to amend their complaint. The court denied the plaintiffs' motion on January 21, 2022. Plaintiffs have appealed the court's ruling dismissing their complaint to the First District Court of Appeals. On February 15, 2022, Exelon and ComEd moved to dismiss the federal plaintiffs' refiled state law claims, seeking dismissal on the same legal grounds asserted in their motion to dismiss the original state court plaintiffs' complaint. The court granted dismissal of the refiled state claims on February 16, 2022. The original federal plaintiffs appealed that dismissal on February 18, 2022. The two state appeals were consolidated on March 21, 2022. Plaintiffs' opening appellate briefs are currently due June 3, 2022.

•A putative class action lawsuit against Exelon and certain officers of Exelon and ComEd was filed in federal court in December 2019 alleging misrepresentations and omissions in Exelon’s SEC filings related to ComEd’s lobbying activities and the related investigations. The complaint was amended on September 16, 2020, to dismiss two of the original defendants and add other defendants, including ComEd. Defendants filed a motion to dismiss in November 2020. The court denied the motion in April 2021. On May 26, 2021, defendants moved the court to certify its order denying the motion to dismiss for interlocutory appeal. Briefing on the motion was completed in June 2021. That motion was denied on January 28, 2022. In May 2021, the parties each filed respective initial discovery disclosures. On June 9, 2021, defendants filed their answer and affirmative defenses to the complaint and the parties engaged thereafter in discovery. On September 9, 2021, the U.S. government moved to intervene in the lawsuit and stay discovery until the parties entered into an amendment to their protective order that would prohibit the parties from requesting discovery into certain matters, including communications with the U.S. government. The court ordered said amendment to the protective order on November 15, 2021 and discovery resumed. On February 10, 2022, the court granted an extension of the amendment to the protective order, at the U.S. government's request, to May 15, 2022 and directed the parties to submit a proposed joint schedule for the additional case proceedings by May 13, 2022.

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•Several shareholders have sent letters to the Exelon Board of Directors from 2020 through May 2022 demanding, among other things, that the Exelon Board of Directors investigate and address alleged breaches of fiduciary duties and other alleged violations by Exelon and ComEd officers and directors related to the conduct described in the DPA. In the first quarter of 2021, the Exelon Board of Directors appointed a Special Litigation Committee (“SLC”) consisting of disinterested and independent parties to investigate and address these shareholders’ allegations and make recommendations to the Exelon Board of Directors based on the outcome of the SLC’s investigation. In July 2021, one of the demand letter shareholders filed a derivative action against current and former Exelon and ComEd officers and directors, and against Exelon, as nominal defendant, asserting the same claims made in its demand letter. On October 12, 2021, the parties to the derivative action filed an agreed motion to stay that litigation for 120 days in order to allow the SLC to continue its investigation, which the court granted. On January 31, 2022, the parties jointly moved the court to extend the stay an additional 120 days.

•Two separate shareholder requests seeking review of certain Exelon books and records were received in August 2021 and January 2022. Exelon responded to both requests and both shareholders have since sent formal shareholder demands to the Exelon Board, as discussed above.

No loss contingencies have been reflected in Exelon’s and ComEd’s consolidated financial statements with respect to these matters, as such contingencies are neither probable nor reasonably estimable at this time.

The ICC continues to conduct an investigation into rate impacts of conduct admitted in the DPA initiated on August 12, 2021. On December 16, 2021, ComEd filed direct testimony addressing the costs recovered from customers related to the DPA and Exelon's funding of the fine paid by ComEd. In that testimony, ComEd proposed to voluntarily refund to customers compensation costs of the former officers charged with wrongdoing in connection with events described in the DPA for the period during which those events occurred as well as costs, previously proposed to be returned, of individuals and entities specifically identified in the DPA, as well as individuals and entities who were referred to ComEd as part of the conduct described in the DPA and who failed, during their tenure at ComEd, to perform work to management expectations. The testimony supports the calculation of the refund amount and proposes a refund mechanism (one-time bill credit in April 2023) and also addresses other topics outlined by statute and the ICC orders initiating the investigation. On April 14, 2022, in response to rebuttal testimony from ICC staff and the Illinois Attorney General, City of Chicago, and CUB, ComEd filed surrebuttal testimony, in which ComEd proposed to increase its voluntary customer refund to $38 million of ICC and FERC jurisdictional amounts, and estimated interest to resolve the issue of the potential expenditure of customer monies on activities identified in the DPA in this matter. An accrual for the amount of the voluntary customer refund has been recorded in Other deferred credits and other liabilities in Exelon’s and ComEd’s Consolidated Balance Sheets as of March 31, 2022. The voluntary customer refund will not be recovered in rates or charged to customers and ComEd will not seek or accept reimbursement or indemnification from any source other than Exelon. The evidentiary hearing on the remaining contested issue was held on April 28, 2022. A final order is expected by September 9, 2022.

Savings Plan Claim (Exelon). On December 6, 2021, seven current and former employees filed a putative ERISA class action suit in U.S. District Court for the Northern District of Illinois against Exelon, its Board of Directors, the former Board Investment Oversight Committee, the Corporate Investment Committee, individual defendants, and other unnamed fiduciaries of the Exelon Corporation Employee Savings Plan (“Plan”). The complaint alleges that the defendants violated their fiduciary duties under the Plan by including certain investment options that allegedly were more expensive than and underperformed similar passively-managed or other funds available in the marketplace and permitting a third-party administrative service provider/recordkeeper and an investment adviser to charge excessive fees for the services provided. The plaintiffs seek declaratory, equitable and monetary relief on behalf of the Plan and participants. On February 16, 2022, the court granted the parties' stipulated dismissal of the individual named defendants without prejudice. The remaining defendants filed a motion to dismiss the complaint on February 25, 2022. The plaintiffs filed their response brief on March 28, 2022 and the defendants filed their reply on April 11, 2022. On March 4, 2022, the Chamber of Commerce filed a brief of amicus curiae in support of the defendants' motion to dismiss. No loss contingencies have been reflected in Exelon’s consolidated financial statements with respect to this matter, as such contingencies are neither probable nor reasonably estimable at this time.

General (All Registrants). The Registrants are involved in various other litigation matters that are being defended and handled in the ordinary course of business. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex

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The following tables present changes in Exelon's AOCI, net of tax, by component:

Three Months Ended March 31, 2022			Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance at December 31, 2021			$	(6)					$	(2,721)					$	(23)											$	(2,750)
Separation of Constellation			6						1,994						23												2,023
Amounts reclassified from AOCI			—						14						—												14
Net current-period OCI			—						14						—												14
Balance at March 31, 2022			$	—					$	(713)					$	—											$	(713)

Three Months Ended March 31, 2021			Losses on Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance at December 31, 2020			$	(5)					$	(3,372)					$	(23)											$	(3,400)
OCI before reclassifications			—						(2)						1												(1)
Amounts reclassified from AOCI			—						55						—												55
Net current-period OCI			—						53						1												54
Balance at March 31, 2021			$	(5)					$	(3,319)					$	(22)											$	(3,346)

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(a)This AOCI component is included in the computation of net periodic pension and OPEB cost. Additionally, as of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. See Note 8 — Retirement Benefits for additional information. See Exelon's Statements of Operations and Comprehensive Income for individual components of AOCI.

The following table presents income tax benefit (expense) allocated to each component of Exelon's other comprehensive income (loss):

						Three Months Ended March 31,
												2022						2021
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost												$	—					$	1
Actuarial loss reclassified to periodic benefit cost												(5)						(19)

Supplemental Statement of Operations Information

The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Operations and Comprehensive Income:

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			Taxes other than income taxes
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended March 31, 2022
Utility taxes(a)			$	221					$	78					$	38					$	27					$	78					$	70					$	7					$	1
Property			94						10						4						46						34						23						10						1
Payroll			37						7						4						4						7						2						1						1
Three Months Ended March 31, 2021
Utility taxes(a)			$	193					$	59					$	35					$	25					$	74					$	67					$	6					$	1
Property			86						8						4						42						32						21						10						1
Payroll			33						7						4						5						7						2						1						—

_________

(a)The Registrants' utility taxes represent municipal and state utility taxes and gross receipts taxes related to their operating revenues. The offsetting collection of utility taxes from customers is recorded in revenues in the Registrants’ Consolidated Statements of Operations and Comprehensive Income.

			Other, net
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended March 31, 2022
AFUDC — Equity			$	36					$	8					$	7					$	6					$	15					$	11					$	2					$	2
Non-service net periodic benefit cost			17						—						—						—						—						—						—						—
Three Months Ended March 31, 2021
AFUDC — Equity			$	28					$	4					$	6					$	7					$	11					$	9					$	1					$	1
Non-service net periodic benefit cost			20						—						—						—						—						—						—						—

Supplemental Cash Flow Information

The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Cash Flows.

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			Depreciation and amortization
			Exelon(a)						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended March 31, 2022
Property, plant, and equipment(b)			$	726					$	254					$	88					$	117					$	164					$	72					$	45					$	41
Amortization of regulatory assets(b)			179						67						4						54						54						36						12						6
Amortization of intangible assets, net(b)			6						—						—						—						—						—						—						—
Amortization of energy contract assets and liabilities(c)			3						—						—						—						—						—						—						—
Nuclear fuel(d)			66						—						—						—						—						—						—						—
ARO accretion(e)			44						—						—						—						—						—						—						—
Total depreciation, amortization, and accretion			$	1,024					$	321					$	92					$	171					$	218					$	108					$	57					$	47
Three Months Ended March 31, 2021
Property, plant, and equipment(b)			$	1,522					$	239					$	82					$	106					$	154					$	67					$	42					$	37
Amortization of regulatory assets(b)			160						53						4						46						56						35						11						10
Amortization of intangible assets, net(b)			15						—						—						—						—						—						—						—
Amortization of energy contract assets and liabilities(c)			4						—						—						—						—						—						—						—
Nuclear fuel(d)			276						—						—						—						—						—						—						—
ARO accretion(e)			127						—						—						—						—						—						—						—
Total depreciation, amortization, and accretion			$	2,104					$	292					$	86					$	152					$	210					$	102					$	53					$	47

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(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

(b)Included in Depreciation and amortization in the Registrants' Consolidated Statements of Operations and Comprehensive Income.

(c)Included in Operating revenues or Purchased power and fuel expense in the Registrants’ Consolidated Statements of Operations and Comprehensive Income.

(d)Included in Purchased fuel expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.

(e)Included in Operating and maintenance expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.

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			Other non-cash operating activities
			Exelon(a)						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended March 31, 2022
Pension and non-pension postretirement benefit costs			$	44					$	16					$	(2)					$	12					$	13					$	2					$	1					$	3
Allowance for credit losses			78						17						27						18						18						9						6						3
Other decommissioning-related activity			36						—						—						—						—						—						—						—
Energy-related options			60						—						—						—						—						—						—						—
True-up adjustments to decoupling mechanisms and formula rates(b)			(29)						(40)						(6)						12						5						7						1						(3)
Long-term incentive plan			25						—						—						—						—						—						—						—
Amortization of operating ROU asset			23						1						—						7						7						2						2						1
AFUDC — Equity			(36)						(8)						(7)						(6)						(15)						(11)						(2)						(2)
Three Months Ended March 31, 2021
Pension and non-pension postretirement benefit costs			$	95					$	32					$	2					$	14					$	12					$	2					$	1					$	3
Allowance for credit losses			85						13						24						4						10						5						4						1
Other decommissioning-related activity			(322)						—						—						—						—						—						—						—
Energy-related options			17						—						—						—						—						—						—						—
True-up adjustments to decoupling mechanisms and formula rates(b)			(129)						(54)						(10)						(18)						(46)						(26)						(9)						(11)
Long-term incentive plan			32						—						—						—						—						—						—						—
Amortization of operating ROU asset			37						—						—						7						7						1						3						1
AFUDC — Equity			(28)						(4)						(6)						(7)						(11)						(9)						(1)						(1)

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(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

(b)For ComEd, reflects the true-up adjustments in regulatory assets and liabilities associated with its distribution, energy efficiency, distributed generation, and transmission formula rates. For BGE, Pepco, DPL, and ACE, reflects the change in regulatory assets and liabilities associated with their decoupling mechanisms and transmission formula rates. For PECO, reflects the change in regulatory assets and liabilities associated with its transmission formula rates. See Note 3 — Regulatory Matters of the Exelon Form 10-K for additional information.

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The following tables provide a reconciliation of cash, cash equivalents, and restricted cash reported within the Registrants’ Consolidated Balance Sheets that sum to the total of the same amounts in their Consolidated Statements of Cash Flows.

			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
March 31, 2022
Cash and cash equivalents			$	2,476					$	343					$	26					$	41					$	796					$	502					$	120					$	168
Restricted cash and cash equivalents			430						246						8						34						106						34						73						—
Restricted cash included in other long-term assets			92						92						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents			$	2,998					$	681					$	34					$	75					$	902					$	536					$	193					$	168
December 31, 2021
Cash and cash equivalents			$	672					$	131					$	36					$	51					$	136					$	34					$	28					$	29
Restricted cash and cash equivalents			321						210						8						4						77						34						43						—
Restricted cash included in other long-term assets			44						43						—						—						—						—						—						—
Cash, restricted cash, and cash equivalents from discontinued operations			582						—						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents			$	1,619					$	384					$	44					$	55					$	213					$	68					$	71					$	29
March 31, 2021
Cash and cash equivalents			$	1,908					$	86					$	48					$	21					$	558					$	134					$	64					$	353
Restricted cash and cash equivalents			374						270						7						1						37						33						—						4
Restricted cash included in other long-term assets			52						43						—						—						9						—						—						9
Total cash, restricted cash, and cash equivalents(a)			$	2,334					$	399					$	55					$	22					$	604					$	167					$	64					$	366
December 31, 2020
Cash and cash equivalents			$	663					$	83					$	19					$	144					$	111					$	30					$	15					$	17
Restricted cash and cash equivalents			438						279						7						1						39						35						—						3
Restricted cash included in other long-term assets			53						43						—						—						10						—						—						10
Cash, restricted cash, and cash equivalents - Held for Sale			12						—						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents(a)			$	1,166					$	405					$	26					$	145					$	160					$	65					$	15					$	30

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(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

For additional information on restricted cash see Note 1 — Significant Accounting Policies of the Exelon 2021 Form 10-K.

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Supplemental Balance Sheet Information

The following table provides additional information about material items recorded in the Registrants' Consolidated Balance Sheets.

			Accrued expenses
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
March 31, 2022
Compensation-related accruals(a)			$	370					$	95					$	51					$	48					$	73					$	26					$	15					$	12
Taxes accrued			258						95						15						78						94						85						10						9
Interest accrued			346						66						36						39						77						37						21						17
December 31, 2021
Compensation-related accruals(a)			$	596					$	155					$	77					$	78					$	113					$	35					$	20					$	17
Taxes accrued			253						94						14						53						96						88						9						11
Interest accrued			297						116						41						44						52						28						8						11

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(a)Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.

Utility Registrants' expense with Generation

The Utility Registrants incurred expenses from transactions with the Generation affiliate as described in the footnotes to the table below prior to separation on February 1, 2022. Such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants:

			Three Months Ended March 31,
			2022						2021
ComEd(a)			$	59					$	85
PECO(b)			33						42
BGE(c)			18						72
PHI			51						100
Pepco(d)			39						75
DPL(e)			10						21
ACE(f)			2						4

__________

(a)ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.

(b)PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.

(c)BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.

(d)Pepco received electric supply from Generation under contracts executed through Pepco's competitive procurement process approved by the MDPSC and DCPSC.

(e)DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.

(f)ACE received electric supply from Generation under contracts executed through ACE's competitive procurement process approved by the NJBPU.

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Service Company Costs for Corporate Support

The Registrants receive a variety of corporate support services from BSC. Pepco, DPL, and ACE also receive corporate support services from PHISCO. See Note 1 — Significant Accounting Policies for additional information regarding BSC and PHISCO.

The following table presents the service company costs allocated to the Registrants:

																		Operating and maintenance from affiliates																								Capitalized costs
												Three Months Ended March 31,																		Three Months Ended March 31,
																		2022						2021																		2022						2021
Exelon
BSC																																										$	205					$	114
PHISCO																																										19						17
ComEd
BSC																		$	85					$	71																	85						45
PECO
BSC																		49						39																		36						17
BGE
BSC																		51						43																		38						20
PHI
BSC																		50						39																		46						32
PHISCO																																										19						17
Pepco
BSC																		29						22																		17						13
PHISCO																		29						30																		8						7
DPL
BSC																		18						14																		14						10
PHISCO																		24						25																		6						5
ACE
BSC																		15						12																		15						8
PHISCO																		21						22																		5						5

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Current Receivables from/Payables to affiliates

The following tables present current receivables from affiliates and current payables to affiliates:

March 31, 2022

									Receivables from affiliates:
			Payables to affiliates:						ComEd						PECO						BGE												Pepco						DPL						ACE						BSC						PHISCO						Other						Total
ComEd												$	—					$	—											$	—					$	—					$	—					$	64					$	—					$	2					$	66
PECO						$	—											—												—						—						—						33						—						5						38
BGE						—						—																		—						—						—						35						—						2						37
PHI						—						—						—												—						—						—						7						1						10						18
Pepco						—						—						—																		—						—						19						15						—						34
DPL						—						—						—												—												—						3						12						—						15
ACE						—						—						—												—						—												12						11						—						23
Other						3						—						—												—						—						—						—						—												3
Total						$	3					$	—					$	—											$	—					$	—					$	—					$	173					$	39					$	19					$	234

December 31, 2021

									Receivables from affiliates:
			Payables to affiliates:						ComEd						PECO						BGE												Pepco						DPL						ACE						Generation						BSC						PHISCO						Other						Total
ComEd												$	—					$	—											$	—					$	—					$	—					41						$	71					$	—					$	9					$	121
PECO						$	—											—												—						—						—						30						36						—						4						70
BGE						—						—																		—						—						—						4						41						—						3						48
PHI						—						1						—												—						—						1						—						5						—						9						16
Pepco						—						—						1																		1						1						20						21						12						3						59
DPL						—						—						—												—												—						4						17						11						1						33
ACE						—						—						—												—						—												7						13						9						2						31
Generation						13						—						—												—						—						—												102						—						16						131
Other						3						—						—												—						—						—						11						—						—												14
Total						$	16					$	1					$	1											$	—					$	1					$	2					$	117					$	306					$	32					$	47					$	523

Borrowings from Exelon/PHI intercompany money pool

To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing both Exelon and PHI operate an intercompany money pool. ComEd, PECO, and PHI Corporate participate in the Exelon money pool. Pepco, DPL, and ACE participate in the PHI intercompany money pool.

Noncurrent Receivables from affiliates

ComEd and PECO have noncurrent receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. The receivables are recorded in Receivable related to Regulatory Agreement Units as of March 31, 2022 and in noncurrent Receivables from affiliates as of December 31, 2021. See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements of the Exelon 2021 Form 10-K for additional information.

Long-term debt to financing trusts

The following table presents Long-term debt to financing trusts:

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