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Derivative Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of the derivative fair value
The following table provides a summary of the derivative fair value balances recorded by the Registrants as of December 31, 2014:
 
 
Generation
 
ComEd
 
Exelon
Derivatives
Economic
Hedges
 
Proprietary
Trading
 
Collateral
and Netting (a)
 
Subtotal (b)
 
Economic
Hedges  (c)
 
Total
Derivatives
Mark-to-market
derivative assets (current assets)
$
4,992


$
456


$
(4,184
)
 
$
1,264

 
$
—

 
$
1,264

Mark-to-market
derivative assets (noncurrent assets)
1,821


56


(1,112
)
 
765

 
—

 
765

Total mark-to-market
derivative assets
6,813


512


(5,296
)
 
2,029

 
—

 
2,029

Mark-to-market
derivative liabilities (current liabilities)
(4,947
)

(468
)

5,200

 
(215
)
 
(20
)
 
(235
)
Mark-to-market
derivative liabilities (noncurrent liabilities)
(1,540
)

(64
)

1,502

 
(102
)
 
(187
)
 
(289
)
Total mark-to-market
derivative liabilities
(6,487
)

(532
)

6,702

 
(317
)
 
(207
)
 
(524
)
Total mark-to-market
derivative net assets (liabilities)
$
326


$
(20
)

$
1,406

 
$
1,712

 
$
(207
)
 
$
1,505

______________________ 
(a)
Exelon and Generation net all available amounts allowed under the derivative accounting guidance on the balance sheet. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral. In some cases Exelon and Generation may have other offsetting exposures, subject to a master netting or similar agreement, such as trade receivables and payables, transactions that do not qualify as derivatives, letters of credit and other forms of non-cash collateral. These are not reflected in the table above.
(b)
Current and noncurrent assets are shown net of collateral of $(416) million and $(171) million, respectively, and current and noncurrent liabilities are shown net of collateral of $(599) million and $(220) million, respectively. The total cash collateral posted, net of cash collateral received and offset against mark-to-market assets and liabilities was $1,406 million at December 31, 2014.
(c)
Includes current and noncurrent liabilities relating to floating-to-fixed energy swap contracts with unaffiliated suppliers.

The following table provides a summary of the derivative fair value balances recorded by the Registrants as of December 31, 2013:
 
 
Generation
 
ComEd
 
Exelon
Derivatives
Economic
Hedges
 
Proprietary
Trading
 
Collateral
and
Netting  (a)
 
Subtotal (b)
 
Economic
Hedges (c)
 
Total
Derivatives
Mark-to-market
derivative assets (current assets)
$
2,616


$
1,476


$
(3,364
)
 
$
728

 
$
—

 
$
728

Mark-to-market
derivative assets (noncurrent assets)
1,344


285


(1,060
)
 
569

 
—

 
569

Total mark-to-market
derivative assets
3,960


1,761


(4,424
)
 
1,297

 
—

 
1,297

Mark-to-market
derivative liabilities (current liabilities)
(2,023
)

(1,410
)

3,292

 
(141
)
 
(17
)
 
(158
)
Mark-to-market
derivative liabilities (noncurrent liabilities)
(804
)

(293
)

988

 
(109
)
 
(176
)
 
(285
)
Total mark-to-market
derivative liabilities
(2,827
)

(1,703
)

4,280

 
(250
)
 
(193
)
 
(443
)
Total mark-to-market
derivative net assets (liabilities)
$
1,133


$
58


$
(144
)
 
$
1,047

 
$
(193
)
 
$
854

______________________
(a)
Exelon and Generation net all available amounts allowed under the derivative accounting guidance on the balance sheet. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral. In some cases Exelon and Generation may have other offsetting exposures, subject to a master netting or similar agreement, such as trade receivables and payables, transactions that do not qualify as derivatives, letters of credit and other forms of non-cash collateral. These are not reflected in the table above.
(b)
Current and noncurrent assets are shown net of collateral of $84 million and $72 million, respectively. Current liabilities are shown net of collateral of $(12) million. Collateral related to noncurrent liabilities was $0 million. The total cash collateral posted, net of cash collateral received and offset against mark-to-market assets and liabilities was $144 million at December 31, 2013.
(c)
Includes current and noncurrent liabilities relating to floating-to-fixed energy swap contracts with unaffiliated suppliers.
Below is a summary of the interest rate and foreign exchange hedges as of December 31, 2014:
 
 
Generation
 
    Other
 
 
 
Exelon
Description
Derivatives
Designated as
Hedging
Instruments
 
Economic
Hedges
 
Proprietary
Trading  (a)
 
Collateral
and Netting (b)
 
Subtotal
 
Derivatives
Designated as
Hedging
Instruments
 
Economic
Hedges
 
Collateral
and Netting (b)
 
Subtotal
 
Total
Mark-to-market derivative
assets (current assets)
$
7


$
7


$
20

 
$
(22
)
 
$
12

 
$
3

 
$
—

 
$
—

 
$
3

 
$
15

Mark-to-market derivative
assets (noncurrent assets)
1


5


7

 
(7
)
 
6

 
20

 
1

 
(19
)
 
2

 
8

Total mark-to-market
derivative assets
8


12


27

 
(29
)
 
18

 
23

 
1

 
(19
)
 
5

 
23

Mark-to-market derivative
liabilities (current liabilities)
(8
)

(2
)

(14
)
 
25

 
1

 
—

 
—

 
—

 
—

 
1

Mark-to-market derivative
liabilities (noncurrent liabilities)
(4
)

—


(9
)
 
10

 
(3
)
 
(29
)
 
(101
)
 
19

 
(111
)
 
(114
)
Total mark-to-market
derivative liabilities
(12
)

(2
)

(23
)
 
35

 
(2
)
 
(29
)
 
(101
)
 
19

 
(111
)
 
(113
)
Total mark-to-market
derivative net assets (liabilities)
$
(4
)

$
10


$
4

 
$
6

 
$
16

 
$
(6
)
 
$
(100
)
 
$
—

 
$
(106
)
 
$
(90
)
_________________________
(a)
Generation enters into interest rate derivative contracts to economically hedge risk associated with the interest rate component of commodity positions. The characterization of the interest rate derivative contracts between the proprietary trading activity in the above table is driven by the corresponding characterization of the underlying commodity position that gives rise to the interest rate exposure. Generation does not utilize proprietary trading interest rate derivatives with the objective of benefiting from shifts or changes in market interest rates.
(b)
Represents the netting of fair value balances with the same counterparty and any associated cash collateral.

The following table provides a summary of the interest rate and foreign exchange hedge balances recorded by the Registrants as of December 31, 2013:
 
 
Generation
 
Other
 
Exelon
Description
Derivatives
Designated as
Hedging
Instruments
 
Economic
Hedges
 
Proprietary
Trading (a)
 
Collateral
and Netting (b)
 
Subtotal
 
Derivatives
Designated as
Hedging
Instruments
 
Total
Mark-to-market derivative
assets (current assets)
$
—


$
3


$
15


$
(19
)
 
$
(1
)
 
$
—

 
$
(1
)
Mark-to-market derivative
assets (noncurrent assets)
26


3


15


(13
)
 
31

 
7

 
38

Total mark-to-market
derivative assets
26


6


30


(32
)
 
30

 
7

 
37

Mark-to-market derivative
liabilities (current liabilities)
(1
)

(1
)

(18
)

19

 
(1
)
 
—

 
(1
)
Mark-to-market derivative
liabilities (noncurrent liabilities)
(10
)

(1
)

(13
)

13

 
(11
)
 
(4
)
 
(15
)
Total mark-to-market
derivative liabilities
(11
)

(2
)

(31
)

32

 
(12
)
 
(4
)
 
(16
)
Total mark-to-market
derivative net assets (liabilities)
$
15


$
4


$
(1
)

$
—

 
$
18

 
$
3

 
$
21

_________________________
(a)
Generation enters into interest rate derivative contracts to economically hedge risk associated with the interest rate component of commodity positions. The characterization of the interest rate derivative contracts between the proprietary trading activity in the above table is driven by the corresponding characterization of the underlying commodity position that gives rise to the interest rate exposure. Generation does not utilize proprietary trading interest rate derivatives with the objective of benefiting from shifts or changes in market interest rates.
(b)
Represents the netting of fair value balances with the same counterparty and any associated cash collateral.
Gain or loss on the hedged items and the offsetting loss or gain on the related interest rate swaps in interest expense
Exelon includes the gain or loss on the hedged items and the offsetting loss or gain on the related interest rate swaps in interest expense as follows:
 
 
 
 
Year Ended December 31,
  
Income Statement Location
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
  
Gain (Loss) on Swaps
 
Gain (Loss) on Borrowings
Generation
Interest expense  (a)
 
$
(16
)
 
$
(15
)
 
$
(6
)
 
$
2

 
$
(6
)
 
$
—

Exelon
Interest expense
 
$
3

 
$
(24
)
 
$
(9
)
 
$
15

 
$
(3
)
 
$
(1
)
______________________
(a)
For the years ended December 31, 2014 and 2013, the loss on Generation swaps included $(17) million and $16 million realized in earnings, respectively, with $4 million and $2 million excluded from hedge effectiveness testing, respectively.
The activity of accumulated OCI related to cash flow hedges
The tables below provide the activity of Accumulated OCI related to cash flow hedges for the years ended December 31, 2014 and 2013, containing information about the changes in the fair value of cash flow hedges and the reclassification from Accumulated OCI into results of operations. The amounts reclassified from Accumulated OCI, when combined with the impacts of the actual physical power sales, result in the ultimate recognition of net revenues at the contracted price.
 
 
Income Statement
Location
 
Total Cash Flow Hedge OCI  Activity,
Net of Income Tax
 
Generation
 
Exelon
 
Energy-Related
Hedges
 
Total Cash Flow
Hedges
 
Accumulated OCI derivative gain at January 1, 2013
 
 
$
532

(a)(d) 
$
368

 
Effective portion of changes in fair value
 
 
—

 
29

(e) 
Reclassifications from accumulated OCI to net
income
Operating Revenues
 
(413
)
(c)(b) 
(277
)
 
Ineffective portion recognized in income
Operating Revenues
 
—

 
—

 
Accumulated OCI derivative gain at December 31, 2013
 
 
119

(d) 
120

 
Effective portion of changes in fair value
 
 
—

 
(31
)
(e) 
Reclassifications from accumulated OCI to net income
Operating Revenues
 
(117
)
(b) 
(117
)
 
Accumulated OCI derivative gain at December 31, 2014
 
 
$
2

(d) 
$
(28
)
 
_______________________
(a)
Includes $133 million of gains, net of taxes, related to the fair value of the five-year financial swap contract with ComEd for the years ended December 31, 2012.
(b)
Amount is net of related income tax expense of $78 million and $270 million for the years ended December 31, 2014 and 2013, respectively.
(c)
Includes $133 million of losses, net of taxes, reclassified from Accumulated OCI to recognize gains in net income related to settlements of the five-year financial swap contract with ComEd for the year ended December 31, 2013.
(d)
Excludes $20 million and $5 million,of losses, net of taxes, related to interest rate swaps and treasury rate locks for the years ended December 31, 2014 and 2013, respectively.
(e)
Includes $15 million and $15 million of losses, net of taxes, related to the effective portion of changes in fair value of interest rate swaps and treasury rate locks at Generation for the years ended December 31, 2014 and 2013, respectively.
Change in fair value and reclassification of derivative contracts
In the tables below, “Change in fair value” represents the change in fair value of the derivative contracts held at the reporting date. The “Reclassification to realized at settlement” represents the recognized change in fair value that was reclassified to realized due to settlement of the derivative during the period.
 
 
Generation
 
Intercompany
Eliminations
 
Exelon Corporate
 
Exelon
Year Ended December 31, 2014
Operating
Revenues
 
Purchased
Power
and Fuel
 
Interest Expense
 
Total
 
Operating
Revenues  (a)
 
Interest Expense
 
Total
Change in fair value of commodity positions
$
(413
)

$
(194
)

$
—

 
$
(607
)
 
$
—

 
$
—

 
$
(607
)
Reclassification to realized at settlement of
commodity positions
231


(223
)

—

 
8

 
—

 
—

 
8

Net commodity mark-to-market gains (losses)
(182
)

(417
)

—


(599
)

—


—


(599
)
Change in fair value of treasury positions
10


—


(2
)
 
8

 
—

 
(100
)
 
(92
)
Reclassification to realized at settlement of
treasury positions
(2
)

—


—

 
(2
)
 
—

 
—

 
(2
)
Net treasury mark-to market gains
(losses)
8


—


(2
)

6


—


(100
)

(94
)
Net mark-to market gains (losses)
$
(174
)

$
(417
)

$
(2
)

$
(593
)

$
—


$
(100
)

$
(693
)
 
Generation


Intercompany
Eliminations
 
Exelon Corporate
 
Exelon
Year Ended December 31, 2013
Operating
Revenues

Purchased
Power
and Fuel
 
Interest Expense

Total

Operating
Revenues  (a)
 
Interest Expense
 
Total
Change in fair value of commodity positions
$
286


$
180


$
—


$
466


$
(6
)

$
—

 
$
460

Reclassification to realized at settlement of
commodity positions
(64
)

104


—


40


13


—

 
53

Net commodity mark-to-market gains
(losses)
222


284


—


506


7


—

 
513

Change in fair value of treasury positions
(1
)

—


(4
)

(5
)

—


—

 
(5
)
Reclassification to realized at settlement of
treasury positions
(1
)

—


—


(1
)

—


—

 
(1
)
Net treasury mark-to market gains
(losses)
(2
)

—


(4
)

(6
)

—


—

 
(6
)
Net mark-to market gains (losses)
$
220


$
284


$
(4
)

$
500


$
7


$
—

 
$
507

 
 
Generation
 
Intercompany
Eliminations
 
Exelon Corporate
 
Exelon
Year Ended December 31, 2012
Operating
Revenues
 
Purchased
Power
and Fuel
 
Interest Expense
 
Total
 
Operating
Revenues  (a)
 
Interest Expense
 
Total
Change in fair value of commodity positions
$
(362
)

$
215


$
—

 
$
(147
)
 
$
(94
)

$
—

 
$
(241
)
Reclassification to realized at settlement of
commodity positions
432


238


—

 
670

 
101


—

 
771

Net commodity mark-to-market gains
(losses)
70


453


—

 
523

 
7


—

 
530

Change in fair value of treasury positions
—


—


6

 
6

 
—


—

 
6

Reclassification to realized at settlement of
treasury positions
(3
)

—


—

 
(3
)
 
—


—

 
(3
)
Net treasury mark-to market gains
(losses)
(3
)

—


6

 
3

 
—


—

 
3

Net mark-to market gains (losses)
$
67


$
453


$
6

 
$
526

 
$
7


$
—

 
$
533

________________________
(a)
Prior to the Constellation merger, the five-year financial swap contract between Generation and ComEd was de-designated. As a result, all prospective changes in fair value were recorded to operating revenues and eliminated in consolidation.
In the tables below, “Change in fair value” represents the change in fair value of the derivative contracts held at the reporting date. The “Reclassification to realized at settlement” represents the recognized change in fair value that was reclassified to realized due to settlement of the derivative during the period.
 
 
Location on Income
Statement
 
For the Years Ended
December 31,
2014
 
2013
 
2012
Change in fair value of commodity positions
Operating Revenues
 
$
(1
)
 
$
(22
)
 
$
(13
)
Reclassification to realized at settlement of commodity positions
Operating Revenues
 
(29
)
 
(15
)
 
108

Net commodity mark-to-market gains (losses)
Operating Revenues
 
(30
)
 
(37
)
 
95

Change in fair value of treasury positions
Operating Revenues
 
1

 
1

 
1

Reclassification to realized at settlement of treasury positions
Operating Revenues
 
3

 
(3
)
 
—

Net treasury mark-to market gains (losses)
Operating Revenues
 
4

 
(2
)
 
1

Net mark-to market gains (losses)
Operating Revenues
 
$
(26
)
 
$
(39
)
 
$
96
Information on Generation's credit exposure for all derivative instruments, normal purchase normal sales, and applicable payables and receivables, net of collateral and instruments that are subject to master netting agreements
The figures in the tables below exclude credit risk exposure from individual retail counterparties, Nuclear fuel procurement contracts and exposure through RTOs, ISOs, NYMEX, ICE and Nodal commodity exchanges, further discussed in ITEM 7A.—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Additionally, the figures in the tables below exclude exposures with affiliates, including net receivables with ComEd, PECO and BGE of $43 million, $29 million and $40 million, respectively.
 
Rating as of December 31, 2014
Total
Exposure
Before Credit
Collateral
 
Credit
Collateral (a)
 
Net
Exposure
 
Number of
Counterparties
Greater  than 10%
of Net Exposure
 
Net Exposure  of
Counterparties
Greater than 10%
of Net Exposure
Investment grade
$
1,629


$
62

 
$
1,567

 
1

 
$
452

Non-investment grade
49


19

 
30

 
—

 
—

No external ratings



 

 
 
 
 
Internally rated—investment grade
479


—

 
479

 
—

 
—

Internally rated—non-investment
grade
60


4

 
56

 
—

 
—

Total
$
2,217


$
85

 
$
2,132

 
1

 
$
452

 
Net Credit Exposure by Type of Counterparty
December 31, 2014
Financial institutions
$
295

Investor-owned utilities, marketers, power producers
958

Energy cooperatives and municipalities
862

Other
17

Total
$
2,132

______________________
(a)
As of December 31, 2014, credit collateral held from counterparties where Generation had credit exposure included $69 million of cash and $16 million of letters of credit.
The aggregate fair value of all derivative instruments with credit-risk-related contingent features in a liability position that are not fully collateralized (excluding transactions on the exchanges that are fully collateralized) is detailed in the table below:
 
 
For the Years Ended December 31,
Credit-Risk Related Contingent Feature
2014
 
2013
Gross Fair Value of Derivative Contracts Containing this Feature (a)
$
(1,433
)
 
$
(1,056
)
Offsetting Fair Value of In-the-Money Contracts Under Master Netting
Arrangements (b)
1,140

 
846

Net Fair Value of Derivative Contracts Containing This Feature (c)
$
(293
)
 
$
(210
)

__________________________
(a)
Amount represents the gross fair value of out-of-the-money derivative contracts containing credit-risk-related contingent features ignoring the effects of master netting agreements.
(b)
Amount represents the offsetting fair value of in-the-money derivative contracts under legally enforceable master netting agreements with the same counterparty, which reduces the amount of any liability for which a Registrant could potentially be required to post collateral.
(c)
Amount represents the net fair value of out-of-the-money derivative contracts containing credit-risk related contingent features after considering the mitigating effects of offsetting positions under master netting arrangements and reflects the actual net liability upon which any potential contingent collateral obligations would be based.