Investment in Constellation Energy Nuclear Group, LLC (Exelon and Generation)

9 Months Ended

Sep. 30, 2012

Equity Method Investments and Joint Ventures [Line Items]

Investment in Constellation Energy Nuclear Group, LLC (CENG)

5. Investment in Constellation Energy Nuclear Group, LLC (Exelon and Generation)

As a result of the Constellation merger, Generation owns a 50.01% interest in CENG, a nuclear generation business. Generation's total equity in earnings (losses) ontheinvestment in CENG is as follows:

	Three Months			For the Period March 12,
	Ended September 30,			through September 30,
	2012		2012
Equity investment income	$	58	$	53
Amortization of basis difference in CENG		(57)		(131)
Total equity in earnings (losses) - CENG	$	1	$	(78)

As of March 12, 2012, Generation had an initial basis difference of approximately $204 million between the initial carrying value of its investment in CENG and its underlying equity in CENG.  This basis difference resulted from the requirement to record the investment in CENG at fair value under purchase accounting while the underlying assets and liabilities within CENG continue to be accounted for on a historical cost basis.Generationis amortizing this basis difference over the respective useful lives of the assets and liabilities of CENG or as those assets and liabilities impact the earnings of CENG.

In future periods, Generation may be eligible for distributions from CENG in excess of its 50.01% ownership interest based on tax sharing provisions contained in the operating agreement for CENG.  Generation would record these distributions, if realized, in earnings in the period earned.

Related Party Transactions (Exelon and Generation)

CENG

A subsidiary of Generation has an agreement under which it is purchasing 85-90% of the output of CENG's nuclear plants that is not sold to third parties under pre-existing firm and unit contingent PPAs through 2014. Beginning on January 1, 2015 and continuing to the end of the life of the respective plants, Generation will purchase on a unit contingent basis 50.01% of the output of CENG's nuclear plants, and EDF will purchase on a unit contingent basis 49.99% of the output.

In addition to the PPA, a subsidiary of Generation has a power services agency agreement (PSAA) with the CENG plants, which expires on December 31, 2014. The PSAA is a five-year agreement under which Generation provides scheduling, asset management and billing services to the CENG plants for a specified monthly fee. The charges for services reflect the cost of the service, with such cost not to exceed approximately $358,000 per month.

In addition to the PSAA, Exelon has a shared services agreement (SSA) with CENG, which expires in 2017.  Under the SSA, BSC provides a variety of support services to CENG.  The SSA includes both a consumption-based pricing structure and a fixed-price structure which are subject to change in future years based on the level of service needed. Pursuant to an agreement between Exelon and EDF, the pricing in the SSA is in the process of being amended so that the charges for services reflect actual costs determined on the same basis that BSC chargesits affiliates for similar services.

The impact of transactions under these agreements on Exelon's and Generation's Consolidated Financial Statements is summarized below:

	Income/(Expense)		Income/(Expense)			Accounts
	Three Months		For the Period		Income	Receivable/
	Ended		March 12 through		Statement	(Accounts Payable)
Agreement	September 30, 2012		September 30, 2012		Classification	At September 30, 2012
PPA	$	(282)	$	(541)	Purchased power and fuel	$	(86)
PSAA		1		2	Operating revenues		-
SSA		14		30	Operating revenues		5

In May 2011, CENG issued an unsecured revolving promissory note to borrow up to an aggregate principal amount of $63 million from a subsidiary of Generation. CENG also issued a promissory note to EDF on substantially identical terms, such that any request for borrowings by CENG must be submitted 50% to Generation and 50% to EDF.As of September 30, 2012, CENG hadborrowed $43 million from Generation.The unsecured promissory note matured on October 31, 2012, and all amounts due were paid in full as of that date.

Exelon Generation Co L L C [Member]

Equity Method Investments and Joint Ventures [Line Items]

Investment in Constellation Energy Nuclear Group, LLC (CENG)

5. Investment in Constellation Energy Nuclear Group, LLC (Exelon and Generation)

As a result of the Constellation merger, Generation owns a 50.01% interest in CENG, a nuclear generation business. Generation's total equity in earnings (losses) ontheinvestment in CENG is as follows:

	Three Months			For the Period March 12,
	Ended September 30,			through September 30,
	2012		2012
Equity investment income	$	58	$	53
Amortization of basis difference in CENG		(57)		(131)
Total equity in earnings (losses) - CENG	$	1	$	(78)

As of March 12, 2012, Generation had an initial basis difference of approximately $204 million between the initial carrying value of its investment in CENG and its underlying equity in CENG.  This basis difference resulted from the requirement to record the investment in CENG at fair value under purchase accounting while the underlying assets and liabilities within CENG continue to be accounted for on a historical cost basis.Generationis amortizing this basis difference over the respective useful lives of the assets and liabilities of CENG or as those assets and liabilities impact the earnings of CENG.

In future periods, Generation may be eligible for distributions from CENG in excess of its 50.01% ownership interest based on tax sharing provisions contained in the operating agreement for CENG.  Generation would record these distributions, if realized, in earnings in the period earned.

	Income/(Expense)		Income/(Expense)			Accounts
	Three Months		For the Period		Income	Receivable/
	Ended		March 12 through		Statement	(Accounts Payable)
Agreement	September 30, 2012		September 30, 2012		Classification	At September 30, 2012
PPA	$	(282)	$	(541)	Purchased power and fuel	$	(86)
PSAA		1		2	Operating revenues		-
SSA		14		30	Operating revenues		5