Property, Plant and Equipment

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment (EME, Midwest Generation)

Property, plant and equipment consisted of the following:



	EME				Midwest Generation
	December 31,				December 31,
(in millions)	2013		2012		2013		2012
Land	$	34	$	36	$	31	$	32
Power plant facilities	4,453		4,612		$	613	$	1,293
Leasehold improvements	4		4		—		—
Emission allowances	541		672		496		639
Construction in progress¹	54		495		53		28
Equipment, furniture and fixtures	105		128		8		13
Plant and equipment under lease financing	—		—		1,333		1,333
	5,191		5,947		2,534		3,338
Less accumulated depreciation and amortization	1,314		1,431		1,011		1,260
Net property, plant and equipment	$	3,877	$	4,516	$	1,523	$	2,078


¹	Included $466 million at December 31, 2012 for EME's new gas and wind projects under construction.

The power sales agreements of certain EME wind projects qualify as operating leases pursuant to authoritative guidance on leases. The carrying amount and related accumulated depreciation of the property of these wind projects totaled $1.7 billion and $362 million, respectively, at December 31, 2013.

Property, plant and equipment for Midwest Generation includes leased properties pursuant to the Powerton and Joliet Sale Leaseback. Midwest Generation recorded amortization expense related to the leased facilities of $42 million for each of the three years ended December 31, 2013, 2012 and 2011. Accumulated amortization related to the leased facilities was $555 million and $514 million at December 31, 2013 and 2012 respectively.

For information on impairment charges relating to property, plant and equipment, see Note 13—Asset Impairments and Other Charges.

Asset Retirement Obligations

EME

A reconciliation of the changes in EME's ARO liability is as follows:



	Years Ended December 31,
(in millions)	2013		2012		2011
Beginning balance	$	80	$	70	$	47
Accretion expense	6		5		5
Revisions	—		—		(1		)
Liabilities added	8		5		19
Ending balance	$	94	$	80	$	70

EME has recorded AROs related to its new gas-fired peaker plant in connection with the commencement of commercial operations there, as well as its wind facilities due to site lease obligations to return the land to grade at the end of the respective leases. Wind-related AROs cover site reclamation and turbine and related facility dismantlement. The earliest settlement of any of these obligations is anticipated to be in 2019. However, the operation of an individual facility may impact the timing of the ARO for that facility. Decisions made in conjunction with each facility's operation could extend or shorten the anticipated life depending on improvements and other factors.

Midwest Generation

A reconciliation of the changes in Midwest Generation's ARO liability is as follows:



	Years Ended December 31,
(in millions)	2013		2012		2011
Beginning balance	$	2	$	2	$	2
Accretion expense	—		—		1
Revisions	—		—		(1		)
Ending balance	$	2	$	2	$	2

Midwest Generation has conditional AROs related to asbestos removal and disposal costs for owned buildings and power plant facilities. Midwest Generation has not recorded a liability related to these structures because they cannot reasonably estimate the obligation's fair value at this time. The range of time over which Midwest Generation may settle these obligations in the future (demolition or other method) is sufficiently large to not allow for the use of expected present value techniques. At December 31, 2013, Midwest Generation had assets with a fair value of $4 million that were legally restricted for purposes of settling AROs.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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