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Income Taxes (All Registrants)
 3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes (All Registrants) Income Taxes (All Registrants)
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)
ExelonComEd
PECO(b)
BGE(b)
PHI
Pepco(b)
DPL
ACE(b)
U.S. Federal statutory rate21.0 %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 rate31.2 %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 rate21.0 %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 benefit2.8 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 rate6.9 %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
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.
ExelonPHIACE
March 31, 2022$146 $56 $16 
December 31, 2021143 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.
Long-Term Marginal State Income Tax Rate (All Registrants)In the first quarter of 2022, Exelon updated its marginal state income tax rates for changes in state apportionment due to the separation, which resulted in an increase of approximately $67 million to the deferred tax liability at Exelon, and a corresponding adjustment to income tax expense, net of federal taxes.