As discussed in Note 3 — Regulatory Matters of the 2021 Recast 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 Recast Form 10-K.


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
	March 31, 2022	Natural Gas	82		55				October 27, 2022	January 1, 2023
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
DPL - Delaware	January 14, 2022 (amended August 15, 2022)	Natural Gas	13		8		9.60	%	October 12, 2022	November 1, 2022
ACE - New Jersey(g)	December 9, 2020 (amended February 26, 2021)	Electric	67		41		9.60	%	July 14, 2021	January 1, 2022

(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.

(c)Reflects a three-year cumulative multi-year plan for 2021 through 2023. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 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. 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. In 2021, the MDPSC deferred a decision on whether to use certain tax benefits to offset the revenue requirement increases in 2023 and directed BGE to make another proposal at the end of 2022. In September 2022 BGE proposed that tax benefits not be used to offset the 2023 revenue requirement increases. On October 26, 2022, the MDPSC accepted BGE's recommendation to not use tax benefits to offset the 2023 revenue requirement increases.

(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.

(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.

(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.

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

DPL - Maryland(b)

May 19, 2022

Electric

10.25

Fourth quarter of 2022

__________

(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 2021 Recast Form 10-K for additional information on ComEd's transition away from the electric distribution formula rate.

(b)Reflects a three-year cumulative multi-year plan for January 1, 2023 to December 31, 2025 and total requested revenue requirement increases, before offsets, of $23 million effective January 1, 2023, $8 million effective January 1, 2024, and $7 million effective January 1, 2025, to recover capital investments made in 2021 and planned capital investments through the end of 2025. DPL proposed the acceleration of refunds for certain tax benefits to partially offset the customer rate increases by $12 million and $8 million in 2023 and 2024, respectively.

On October 7, 2022, DPL filed a partial settlement agreement with the MDPSC. The partial settlement provides for a total requested revenue requirement increase of $29 million and requested ROE of 9.60%. The partial settlement reflects a three-year cumulative multi-year plan for January 1, 2023 to December 31, 2025 and total requested revenue increases of $17 million effective January 1, 2023, $6 million effective January 1, 2024, and $6 million effective January 1, 2025. While the pending base rate case filing is partially settled, there are no issues unsettled related to the requested revenue requirement increase and the requested ROE. While there will likely be no changes to the amended requested revenue requirement increase and requested ROE, DPL cannot predict the outcome of any unforeseen proceedings.

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 PECO is based on prior year actual costs and current year projected capital additions, accumulated depreciation, and accumulated deferred income taxes. The annual update for BGE, Pepco, DPL, and ACE 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 PECO, BGE, Pepco, DPL, and ACE also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).


Registrant(a)	Initial Revenue Requirement Increase		Annual Reconciliation (Decrease) Increase		Total Revenue Requirement Increase			Allowed Return on Rate Base(b)		Allowed ROE(c)
ComEd	$	24	$	(24)	$	—		8.11	%	11.50	%
PECO	23		16		39			7.30	%	10.35	%
BGE	25		(4)		16		(d)	7.30	%	10.50	%
Pepco	16		15		31			7.60	%	10.50	%
DPL	9		2		11			7.09	%	10.50	%
ACE	21		13		34			7.18	%	10.50	%

(b)Represents the weighted average debt and equity return on transmission rate bases. For ComEd and PECO, the common equity component of the ratio used to calculate the weighted average debt and equity return on the transmission formula rate base is currently capped at 55% and 55.75%, respectively.

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 ComEd and 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.

ComEd filed its last performance-based electric distribution formula rate update filing under EIMA in April 2022. Those rates will take effect in 2023. Also during 2023, ComEd will file with the ICC a petition to reconcile is 2022 actual costs with the approved revenue requirement in effect in 2022.

Under CEJA, ComEd will recover from retail customers, subject to certain exceptions, the costs it incurs to provide electric delivery services either through its electric distribution rate or other recovery mechanisms. On November 3, 2022, ComEd announced it plans on filing a four-year multi-year plan (“MRP”) in January 2023. The

MRP will set rates for 2024 – 2027, based on forecasted revenue requirements and an ICC determined rate of return on rate base, including the cost of common equity. Costs incurred during each year of the multi-year plan are subject to ICC review and the plan’s revenue requirement for each year will be reconciled with the actual costs that the ICC determines are prudently and reasonably incurred for that year. That reconciliation is subject to adjustment for certain expenses and, unless the plan is modified, to a 5% cap on increases in certain costs over the costs in the previously approved multi-year rate plan revenue requirement. Thus, for example, the rate adjustments necessary to reconcile 2024 revenues to ComEd’s actual 2024 costs incurred would take effect in January 2026 after the ICC’s review during 2025.

In January 2022, ComEd filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties in the event ComEd filed a MRP in January 2023. On September 27, 2022, the ICC issued a final order approving seven performance metrics that provide symmetrical performance adjustments of 32 total basis points to ComEd’s rate of return on common equity based on the extent to which ComEd achieves the annual performance goals. On October 27, 2022, ComEd filed for rehearing concerning certain aspects of three of those metrics; the ICC must rule on that rehearing request within 20 days. ComEd will make its initial filing in 2025 to assess performance achieved under the metrics in 2024, and to determine any ROE adjustment, which would take effect in 2026.

CEJA establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity. ComEd is required to purchase CMCs from participating nuclear-powered generating facilities between June 1, 2022 and May 31, 2027 and all its costs of doing so will be recovered through a new rider. The price to be paid for each CMC was established through a competitive bidding process that included consumer-protection measures that capped the maximum acceptable bid amount and a formula that reduces CMC prices by an energy price index, the base residual auction capacity price in the ComEd zone of PJM, and the monetized value of any federal tax credit or other subsidy if applicable. The consumer protection measures contained in CEJA will result in net payments to ComEd ratepayers if the energy index, the capacity price and applicable federal tax credits or subsidy exceed the CMC contract price. ComEd began issuing credits to its retail customers under its new CMC rider in the June 2022 billing period and recorded a regulatory asset of $534 million as of September 30, 2022 for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities.

The ICC initiated a docket to accelerate and fully credit to customers TCJA unprotected property-related EDIT no later than December 31, 2025. On July 7, 2022, the ICC issued a final order on the schedule for the acceleration of EDIT amortization, adopting the proposal as submitted by several parties, including ComEd, ICC Staff, the Illinois Attorney General's Office, and the Citizens Utility Board. EDIT amortization will be credited to customers through a new rider from January 1, 2023 through December 31, 2025.

On July 1, 2022, ComEd filed a proposed plan to promote beneficial electrification efforts in its Northern Illinois service area with the ICC as required by CEJA. ComEd's plan is designed to meaningfully reduce barriers to beneficial electrification, including those related to electric vehicles, such as upfront technology adoption costs, charging costs, and charging availability; promote equity and environmental justice; reduce carbon emissions and surface-level pollutants; and support customer education and awareness of electrification options. As proposed, ComEd could expend approximately $300 million in total over the three-year period 2023 through 2025. The beneficial electrification plan requests recovery of all those costs through a rider mechanism, under which certain of the costs would be amortized over ten years with a return on the unrecovered balance. Certain legal questions regarding the permissible scope of the plan's activities and applicable budget have been raised by motion, and the ICC may decide those issues in an interim order. A final order is expected to be issued by the ICC no later than the first quarter of 2023. At this time, ComEd cannot predict the outcome of these proceedings.

(a)ComEd’s 2023 approved revenue requirement above reflects an increase of $66 million for the initial year revenue requirement for 2023 and a decrease of $16 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 5.94% inclusive of an allowed ROE of 7.85%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The revenue requirement for the 2021 reconciliation year provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 5.52% inclusive of an allowed ROE of 6.99%, which includes a downward performance adjustment that decreased the ROE. The performance adjustment can either increase or decrease the ROE based upon the achievement of energy efficiency savings goals.

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 September 30, 2022, the $158 million liability for the contract termination fee consists of $87 million and $71 million included in Other current liabilities and Other deferred credits and other liabilities, respectively, in Exelon's Consolidated Balance Sheet. 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. For the nine months ended September 30, 2022, ACE has paid $45 million of the liability, which is recorded in Changes in Other assets and liabilities in Exelon's, PHI's, and ACE's Consolidated Statements of Cash Flows.

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 2021 Recast Form 10-K for additional information on the specific regulatory assets and liabilities.

ComEd. Regulatory assets increased $668 million primarily due to increases of $534 million in the CMC regulatory asset, as discussed in CEJA above, and $161 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset, partially offset by a decrease of $152 million in the Renewable Energy regulatory asset.

PECO. Regulatory assets decreased $301 million primarily due to a decrease of $300 million in the Deferred Income Taxes regulatory asset. Regulatory liabilities decreased $436 million primarily due to decreases of $409 million in the Decommissioning the Regulatory Agreement Units regulatory liability and $19 million in the Electric Energy and Natural Gas Costs regulatory liability.

Pepco. Regulatory assets decreased $68 million primarily due to decreases of $25 million in the DC PLUG Charge regulatory asset, $16 million in the Under-Recovered Revenue Decoupling regulatory asset, and $13 million in the Energy Efficiency and Demand Response Programs regulatory asset. Regulatory liabilities decreased $92 million primarily due to a decrease of $99 million in the Deferred Income Taxes regulatory liability.

ACE. Regulatory assets increased $159 million primarily due to an increase of $140 million in the Electric Energy Costs regulatory asset as a result of the PPA termination. Regulatory liabilities decreased $44 million primarily due to a decrease of $49 million in the Deferred Income Taxes regulatory liability, partially offset by a $12 million increase in the Over-Recovered Revenue Decoupling regulatory liability.

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.

(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.