15. Corporate Restructuring and Plant Retirements (Exelon, Generation, ComEd and PECO)

The Registrants provide severance and health and welfare benefits to terminated employees primarily based upon each individual employee's years of service and compensation level. The Registrants accrue amounts associated with severance benefits that are considered probable and that can be reasonably estimated.

The following tables present severance benefits expenses, recorded as operating and maintenance expense in relation to the announced job reductions, for the years ended December 31, 2012, 2011 and 2010:

On October 31, 2012, Generation notified PJM of its intention to permanently retire Schuylkill Generating Station Unit 1 by February 1, 2013, and Riverside Generating Station Unit 6 by June 1, 2014. Schuylkill Unit 1 is a 166 MW peaking oil unit located in Philadelphia, Pennsylvania, which was placed in service in 1958. Riverside Unit 6 is a 115 MW peaking gas/kerosene unit located in Baltimore, Maryland, which was placed in service in 1970. The units are being retired because they are no longer economic to operate due to their age, relatively high capital and operating costs and declining revenue expectations. On November 30, 2012, PJM notified Generation that it did not identify any transmission system reliability issues associated with the proposed Schuylkill Unit 1 retirement date and as a result, Schuylkill Unit 1 was retired on January 1, 2013. On January 7, 2013, PJM notified Generation that it did not identify any transmission system reliability issues associated with the proposed Riverside Unit 6 retirement date. Exelon will determine the final retirement date for Riverside Unit 6 during the second quarter of 2013. The early retirements will not have a material impact on Generation or Exelon's results of operations, cash flows or financial position.

On December 8, 2010, in connection with the executed Administrative Consent Order (ACO) with the NJDEP, Exelon announced that Generation will permanently cease generation operations at Oyster Creek by December 31, 2019.

In 2009, Exelon announced its intention to permanently retire three coal-fired generating units and one oil/gas-fired generating unit, effective May 31, 2011, in response to the economic outlook related to the continued operation of these four units. However, PJM determined that transmission reliability upgrades would be necessary to alleviate reliability impacts and that those upgrades would be completed in a manner that will permit Generation's retirement of two of the units on that date and two of the units subsequent to May 31, 2011. On May 31, 2011, Cromby Generating Station (Cromby) Unit 1 and Eddystone Generating Station (Eddystone) Unit 1 were retired; Cromby Unit 2 retired on December 31, 2011 and Eddystone Unit 2 retired on May 31, 2012. On May 27, 2011, the FERC approved a settlement providing for a reliability-must-run rate schedule, which defines compensation to be paid to Generation for continuing to operate these units. The monthly fixed-cost recovery during the reliability-must-run period for Eddystone Unit 2 is approximately $6 million. Such revenue is intended to recover total expected operating costs, plus a return on net assets, of the two units during the reliability-must-run period. In addition, Generation is reimbursed for variable costs, including fuel, emissions costs, chemicals, auxiliary power and for project investment costs during the reliability-must-run period. Eddystone Unit 2 and Cromby Unit 2 operated under the reliability-must-run agreement from June 1, 2011 until their respective retirement dates.

Since the announced retirements in December 2009, Generation recorded pre-tax expense of $44 million, which included $18 million of expense for the write down of inventory, $13 million of expense for estimated salary continuance and health and welfare severance benefits and $13 million of shut down costs recorded within operating and maintenance expense in Exelon's and Generation's Consolidated Statements of Operations and Comprehensive Income.

During the year ended December 31, 2012, Generation recorded $1 million of expense for the write down of inventory and $11 million of shut down costs. During the year ended December 31, 2011, Generation recorded pre-tax expense of $4 million for estimated salary continuance and health and welfare severance benefits and $2 million of shut down costs.

The following table presents the activity of severance obligations for the announced Cromby and Eddystone retirements from January 1, 2011 through December 31, 2012:

Severance Benefits Obligation		Exelon and Generation
Balance at January 1, 2011	$	7

Severance charges recorded		4
Cash payments		(4)

Balance at December 31, 2011		7

Cash payments		(4)

Balance at December 31, 2012	$	3