Severance (All Registrants)

The Registrants have an ongoing severance plan under which, in general, the longer an employee worked prior to termination the greater the amount of severance benefits. The Registrants record a liability and expense or regulatory asset for severance once terminations are probable of occurrence and the related severance benefits can be reasonably estimated. For severance benefits that are incremental to its ongoing severance plan (“one-time termination benefits”), the Registrants measure the obligation and record the expense at fair value at the communication date if there are no future service requirements, or, if future service is required to receive the termination benefit, ratably over the required service period.

Ongoing Severance Plans

The Registrants provide severance and health and welfare benefits under Exelon’s ongoing severance benefit plans to terminated employees in the normal course of business. These benefits are accrued for when the benefits are considered probable and can be reasonably estimated.

For the years ended December 31, 2017 and 2016, the Registrants recorded the following severance costs associated with ongoing severance benefits within Operating and maintenance expense in their Consolidated Statements of Operations and Comprehensive Income:



											Successor
	Exelon		Generation^(a)		ComEd^(a)		PECO^(a)		BGE^(a)		PHI^(a)		Pepco^(a)		DPL^(a)		ACE^(a)
Year ended December 31,
2017	$	14	$	6	$	3	$	1	$	—	$	4	$	2	$	1	$	1
2016	19		13		3		1		1		1		—		—		—

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(a)	The amounts above for Generation, ComEd, PECO, BGE, and PHI include immaterial amounts billed by BSC for the years ended December 31, 2017 and 2016. Pepco, DPL, and ACE include immaterial amounts billed by PHISCO for the year ended December 31, 2017. Pepco, DPL, and ACE did not have any ongoing severance plans for the year ended December 31, 2016.

Cost Management Program-Related Severance

In August 2015, Exelon announced a cost management program focused on cost savings of approximately $400 million at BSC and Generation. Additionally, in November 2017, Exelon announced a new commitment for an additional $250 million of cost savings, primarily at Generation, to be achieved by 2020. These actions are in response to the continuing economic challenges confronting all parts of Exelon’s business and industry, necessitating continued focus on cost management through enhanced efficiency and productivity. In connection with the program, certain positions have been identified for elimination and severance costs were recognized as both probable and estimable.

While there may be additional position eliminations identified leading to potential severance or other termination benefit changes, Exelon, Generation and BSC intend to manage any staff reductions through natural attrition to the extent possible to minimize impacts on employees. Any additional severance or other termination benefit charges related to this commitment will be recognized when such amounts are considered probable and can be reasonably estimated.

For the years ended December 31, 2017 and 2016, the Registrants recorded the following severance costs related to the cost management program within Operating and maintenance expense in their Consolidated Statements of Operations:



	Exelon		Generation		ComEd			PECO			BGE
2017^(a)	$	6	$	9	$	(1	)	$	(1	)	$	(1	)
2016^(b)	23		18		3			1			1

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(a)	The amounts for Generation, ComEd, PECO, and BGE include $(4) million, $(2) million, $(1) million, and $(1) million, respectively, for amounts billed by BSC through intercompany allocations for the year ended December 31, 2017.


(b)	The amounts above for Generation, ComEd, PECO and BGE include $7 million, $3 million, $1 million, and $1 million, respectively, for amounts billed by BSC through intercompany allocations for the year ended December 31, 2016.

Early Plant Retirement-Related Severance (Exelon and Generation)

As a result of the Three Mile Island plant retirement decision, Exelon and Generation will incur certain employee-related costs, including severance benefit costs. Severance costs will be provided to management employees that are eligible under the Company's severance policy, to the extent that those employees are not redeployed to other locations. In June 2017, Exelon and Generation recognized severance costs of $17 million related to expected management employee severances resulting from the plant retirements within Operating and maintenance expense in their Consolidated Statements of Operation and Comprehensive Income. Approximately half of the employees at this location fall under a collective bargaining union agreement and are not eligible for severance benefits under an existing plan. The union and Exelon will negotiate terms of any severance benefits. If severance benefits are successfully negotiated, the amounts will be accrued as a one-time employee termination benefit once the established plan is communicated to employees. The final amount of the severance cost will ultimately depend on the specific employees severed. See Note 8 - Early Nuclear Plant Retirements for additional information regarding the announced early retirement of TMI. See Note 28 - Subsequent Events for additional information regarding the early retirement of Oyster Creek.

Severance Costs Related to the PHI Merger

Upon closing the PHI Merger, Exelon recorded a severance accrual for the anticipated employee position reductions as a result of the post-merger integration. Cash payments under the plan began in May 2016 and will continue through 2020.

For the year ended December 31, 2017, the PHI Merger severance costs were immaterial. For the year ended December 31, 2016, the Registrants recorded the following severance costs associated with the identified job reductions within Operating and maintenance expense in their Consolidated Statements of Operations and Comprehensive Income, pursuant to the authoritative guidance for ongoing severance plans:



											Successor
	Exelon		Generation		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Severance Benefits
Severance costs^(a)	$	57	$	9	$	2	$	1	$	1	$	44	$	21	$	13	$	10

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(a)	The amounts above for Generation, ComEd, PECO, BGE, Pepco, DPL, and ACE include $8 million, $2 million, $1 million, $1 million, $20 million, $12 million and $10 million, respectively, for amounts billed by BSC and/or PHISCO through intercompany allocations for the year ended December 31, 2016.

PHI, Pepco, DPL and ACE record regulatory assets for merger related integration costs which include a portion of the severance costs in the table above related to the PHI Merger. These regulatory assets are either currently being recovered in rates or are deemed probable of recovery in future rates. See Note 3 — Regulatory Matters for further information.

Severance Liability

Amounts included in the table below represent the severance liability recorded for employees of each Registrant and exclude amounts included at Exelon and billed through intercompany allocations:



															Successor
Severance Liability	Exelon			Generation			ComEd			PECO		BGE			PHI			Pepco			DPL			ACE
Balance at December 31, 2015	$	35		$	23		$	3		$	—	$	1		$	—		$	—		$	—		$	—
Severance charges^(a)	99			22			2			—		—			56			1			1			—
Payments	(46		)	(9		)	(2		)	—		(1		)	(27		)	(1		)	(1		)	—
Balance at December 31, 2016	$	88		$	36		$	3		$	—	$	—		$	29		$	—		$	—		$	—
Severance charges^(a)	35			31			2			—		—			3			—			—			—
Payments	(29		)	(9		)	(2		)	—		—			(12		)	—			—			—
Balance at December 31, 2017	$	94		$	58		$	3		$	—	$	—		$	20		$	—		$	—		$	—

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(a)	Includes salary continuance and health and welfare severance benefits.