Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair value of financial liabilities recorded at the carrying amount

The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, SNF obligation and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of September 30, 2018 and December 31, 2017:

Exelon

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	834	$	—	$	834	$	—	$	834
Long-term debt (including amounts due within one year)(b)(c)	35,290		—		33,608		2,079		35,687
Long-term debt to financing trusts(d)	390		—		—		411		411
SNF obligation	1,164		—		993		—		993

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	929	$	—	$	929	$	—	$	929
Long-term debt (including amounts due within one year)(b)(c)	34,264		—		34,735		1,970		36,705
Long-term debt to financing trusts(d)	389		—		—		431		431
SNF obligation	1,147		—		936		—		936

Generation

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Long-term debt (including amounts due within one year)(b)(c)	$	8,842	$	—	$	7,563	$	1,461	$	9,024
SNF obligation	1,164		—		993		—		993

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	2	$	—	$	2	$	—	$	2
Long-term debt (including amounts due within one year)(b)(c)	8,990		—		7,839		1,673		9,512
SNF obligation	1,147		—		936		—		936

ComEd

	September 30, 2018
	Carrying Amount	Fair Value
		Level 1	Level 2	Level 3	Total
Long-term debt (including amounts due within one year)(b)(c)	8,100	—	8,317	—	8,317
Long-term debt to financing trusts(d)	205	—	—	214	214

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Long-term debt (including amounts due within one year)(b)(c)	$	7,601	$	—	$	8,418	$	—	$	8,418
Long-term debt to financing trusts(d)	205		—		—		227		227

PECO

	September 30, 2018
	Carrying Amount	Fair Value
		Level 1	Level 2	Level 3	Total
Long-term debt (including amounts due within one year)(b)(c)	3,083	—	3,130	50	3,180
Long-term debt to financing trusts	184	—	—	196	196

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Long-term debt (including amounts due within one year)(b)(c)	$	2,903	$	—	$	3,194	$	—	$	3,194
Long-term debt to financing trusts	184		—		—		204		204

BGE

	September 30, 2018
	Carrying Amount	Fair Value
		Level 1	Level 2	Level 3	Total
Long-term debt (including amounts due within one year)(b)(c)	2,876	—	2,933	—	2,933

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	77	$	—	$	77	$	—	$	77
Long-term debt (including amounts due within one year)(b)(c)	2,577		—		2,825		—		2,825

PHI

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	334	$	—	$	334	$	—	$	334
Long-term debt (including amounts due within one year)(b)(c)	6,089		—		5,323		568		5,891

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	350	$	—	$	350	$	—	$	350
Long-term debt (including amounts due within one year)(b)(c)	5,874		—		5,722		297		6,019

Pepco

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	64	$	—	$	64	$	—	$	64
Long-term debt (including amounts due within one year)(b)(c)	$	2,625	$	—	$	2,890	$	101	$	2,991

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	26	$	—	$	26	$	—	$	26
Long-term debt (including amounts due within one year)(b)(c)	2,540		—		3,114		9		3,123

DPL

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Long-term debt (including amounts due within one year)(b)(c)	$	1,494	$	—	$	1,299	$	196	$	1,495

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	216	$	—	$	216	$	—	$	216
Long-term debt (including amounts due within one year)(b)(c)	1,300		—		1,393		—		1,393

ACE

	September 30, 2018
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	270	$	—	$	270	$	—	$	270
Long-term debt (including amounts due within one year)(b)(c)	1,100		—		887		271		1,158

	December 31, 2017
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3		Total
Short-term liabilities(a)	$	108	$	—	$	108	$	—	$	108
Long-term debt (including amounts due within one year)(b)(c)	1,121		—		949		288		1,237

_________

(a) Level 1 securities consist of dividends payable (included in other current liabilities). Level 2 securities consist of short term borrowings.

(b) Includes unamortized debt issuance costs which are not fair valued of $219 million, $53 million, $64 million, $23 million, $19 million, $11 million, $34 million, $12 million and $4 million for Exelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, respectively, as of September 30, 2018. Includes unamortized debt issuance costs which are not fair valued of $201 million, $60 million, $52 million, $17 million, $17 million, $6 million, $32 million, $11 million and $5 million for Exelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, respectively, as of December 31, 2017.

(c) Level 2 securities consist of fixed-rate taxable debt securities, fixed-rate tax-exempt debt, variable rate tax-exempt debt and variable rate non-recourse debt. Level 3 securities consist of fixed-rate private placement taxable debt securities, fixed rate nonrecourse debt, government-backed fixed rate non-recourse debt and loan agreements.

(d) Includes unamortized debt issuance costs which are not fair valued of $1 million and $1 million for Exelon and ComEd, respectively, as of September 30, 2018 and December 31, 2017

Assets and liabilities measured and recorded at fair value on recurring basis

The following tables present assets and liabilities measured and recorded at fair value on Exelon's and Generation’s Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2018 and December 31, 2017:

	Generation										Exelon
As of September 30, 2018	Level 1		Level 2		Level 3		Not subject to leveling		Total		Level 1		Level 2		Level 3		Not subject to leveling		Total
Assets
Cash equivalents(a)	$	1,099	$	—	$	—	$	—	$	1,099	$	1,906	$	—	$	—	$	—	$	1,906
NDT fund investments
Cash equivalents(b)	278		92		—		—		370		278		92		—		—		370
Equities	3,206		1,608		1		1,942		6,757		3,206		1,608		1		1,942		6,757
Fixed income
Corporate debt	—		1,629		231		—		1,860		—		1,629		231		—		1,860
U.S. Treasury and agencies	2,031		99		—		—		2,130		2,031		99		—		—		2,130
Foreign governments	—		49		—		—		49		—		49		—		—		49
State and municipal debt	—		165		—		—		165		—		165		—		—		165
Other(c)	—		29		—		854		883		—		29		—		854		883
Fixed income subtotal	2,031		1,971		231		854		5,087		2,031		1,971		231		854		5,087
Middle market lending	—		—		334		235		569		—		—		334		235		569
Private equity	—		—		—		303		303		—		—		—		303		303
Real estate	—		—		—		490		490		—		—		—		490		490
NDT fund investments subtotal(d)	5,515		3,671		566		3,824		13,576		5,515		3,671		566		3,824		13,576
Pledged assets for Zion Station decommissioning
Cash equivalents	9		—		—		—		9		9		—		—		—		9
Pledged assets for Zion Station decommissioning subtotal(e)	9		—		—		—		9		9		—		—		—		9
Rabbi trust investments
Cash equivalents	5		—		—		—		5		48		—		—		—		48
Mutual funds	25		—		—		—		25		76		—		—		—		76
Fixed income	—		—		—		—		—		—		16		—		—		16
Life insurance contracts	—		23		—		—		23		—		73		37		—		110
Rabbi trust investments subtotal(f)	30		23		—		—		53		124		89		37		—		250

	Generation														Exelon
As of September 30, 2018	Level 1			Level 2			Level 3			Not subject to leveling		Total			Level 1			Level 2			Level 3			Not subject to leveling		Total
Commodity derivative assets
Economic hedges	234			2,117			2,019			—		4,370			234			2,117			2,019			—		4,370
Proprietary trading	—			84			90			—		174			—			84			90			—		174
Effect of netting and allocation of collateral(g) (h)	(230		)	(1,887		)	(1,302		)	—		(3,419		)	(230		)	(1,887		)	(1,302		)	—		(3,419		)
Commodity derivative assets subtotal	4			314			807			—		1,125			4			314			807			—		1,125
Interest rate and foreign currency derivative assets
Derivatives designated as hedging instruments	—			—			—			—		—			—			—			—			—		—
Economic hedges	—			21			—			—		21			—			21			—			—		21
Effect of netting and allocation of collateral	—			(1		)	—			—		(1		)	—			(1		)	—			—		(1		)
Interest rate and foreign currency derivative assets subtotal	—			20			—			—		20			—			20			—			—		20
Other investments	—			—			52			—		52			—			—			52			—		52
Total assets	6,657			4,028			1,425			3,824		15,934			7,558			4,094			1,462			3,824		16,938
Liabilities
Commodity derivative liabilities
Economic hedges	(329		)	(2,056		)	(1,660		)	—		(4,045		)	(329		)	(2,056		)	(1,919		)	—		(4,304		)
Proprietary trading	—			(95		)	(32		)	—		(127		)	—			(95		)	(32		)	—		(127		)
Effect of netting and allocation of collateral(g) (h)	247			1,987			1,397			—		3,631			247			1,987			1,397			—		3,631
Commodity derivative liabilities subtotal	(82		)	(164		)	(295		)	—		(541		)	(82		)	(164		)	(554		)	—		(800		)
Interest rate and foreign currency derivative liabilities
Derivatives designated as hedging instruments	—			—			—			—		—			—			(10		)	—			—		(10		)
Economic hedges	—			(2		)	—			—		(2		)	—			(2		)	—			—		(2		)
Effect of netting and allocation of collateral	—			1			—			—		1			—			1			—			—		1
Interest rate and foreign currency derivative liabilities subtotal	—			(1		)	—			—		(1		)	—			(11		)	—			—		(11		)
Deferred compensation obligation	—			(36		)	—			—		(36		)	—			(142		)	—			—		(142		)
Total liabilities	(82		)	(201		)	(295		)	—		(578		)	(82		)	(317		)	(554		)	—		(953		)
Total net assets	$	6,575		$	3,827		$	1,130		$	3,824	$	15,356		$	7,476		$	3,777		$	908		$	3,824	$	15,985

	Generation														Exelon
As of December 31, 2017	Level 1			Level 2			Level 3			Not subject to leveling		Total			Level 1			Level 2			Level 3			Not subject to leveling		Total
Assets
Cash equivalents(a)	$	168		$	—		$	—		$	—	$	168		$	656		$	—		$	—		$	—	$	656
NDT fund investments
Cash equivalents(b)	135			85			—			—		220			135			85			—			—		220
Equities	4,163			915			—			2,176		7,254			4,163			915			—			2,176		7,254
Fixed income
Corporate debt	—			1,614			251			—		1,865			—			1,614			251			—		1,865
U.S. Treasury and agencies	1,917			52			—			—		1,969			1,917			52			—			—		1,969
Foreign governments	—			82			—			—		82			—			82			—			—		82
State and municipal debt	—			263			—			—		263			—			263			—			—		263
Other(c)	—			47			—			510		557			—			47			—			510		557
Fixed income subtotal	1,917			2,058			251			510		4,736			1,917			2,058			251			510		4,736
Middle market lending	—			—			397			131		528			—			—			397			131		528
Private equity	—			—			—			222		222			—			—			—			222		222
Real estate	—			—			—			471		471			—			—			—			471		471
NDT fund investments subtotal(d)	6,215			3,058			648			3,510		13,431			6,215			3,058			648			3,510		13,431
Pledged assets for Zion Station decommissioning
Cash equivalents	2			—			—			—		2			2			—			—			—		2
Equities	—			1			—			—		1			—			1			—			—		1
Middle market lending	—			—			12			24		36			—			—			12			24		36
Pledged assets for Zion Station decommissioning subtotal(e)	2			1			12			24		39			2			1			12			24		39
Rabbi trust investments
Cash equivalents	5			—			—			—		5			77			—			—			—		77
Mutual funds	23			—			—			—		23			58			—			—			—		58
Fixed income	—			—			—			—		—			—			12			—			—		12
Life insurance contracts	—			22			—			—		22			—			71			22			—		93
Rabbi trust investments subtotal(f)	28			22			—			—		50			135			83			22			—		240
Commodity derivative assets
Economic hedges	557			2,378			1,290			—		4,225			557			2,378			1,290			—		4,225
Proprietary trading	2			31			35			—		68			2			31			35			—		68
Effect of netting and allocation of collateral(g) (h)	(585		)	(1,769		)	(635		)	—		(2,989		)	(585		)	(1,769		)	(635		)	—		(2,989		)
Commodity derivative assets subtotal	(26		)	640			690			—		1,304			(26		)	640			690			—		1,304

	Generation														Exelon
As of December 31, 2017	Level 1			Level 2			Level 3			Not subject to leveling		Total			Level 1			Level 2			Level 3			Not subject to leveling		Total
Interest rate and foreign currency derivative assets
Derivatives designated as hedging instruments	—			3			—			—		3			—			6			—			—		6
Economic hedges	—			10			—			—		10			—			10			—			—		10
Effect of netting and allocation of collateral	(2		)	(5		)	—			—		(7		)	(2		)	(5		)	—			—		(7		)
Interest rate and foreign currency derivative assets subtotal	(2		)	8			—			—		6			(2		)	11			—			—		9
Other investments	—			—			37			—		37			—			—			37			—		37
Total assets	6,385			3,729			1,387			3,534		15,035			6,980			3,793			1,409			3,534		15,716
Liabilities
Commodity derivative liabilities
Economic hedges	(712		)	(2,226		)	(845		)	—		(3,783		)	(713		)	(2,226		)	(1,101		)	—		(4,040		)
Proprietary trading	(2		)	(42		)	(9		)	—		(53		)	(2		)	(42		)	(9		)	—		(53		)
Effect of netting and allocation of collateral(g) (h)	650			2,089			716			—		3,455			651			2,089			716			—		3,456
Commodity derivative liabilities subtotal	(64		)	(179		)	(138		)	—		(381		)	(64		)	(179		)	(394		)	—		(637		)
Interest rate and foreign currency derivative liabilities
Derivatives designated as hedging instruments	—			(2		)	—			—		(2		)	—			(2		)	—			—		(2		)
Economic hedges	(1		)	(8		)	—			—		(9		)	(1		)	(8		)	—			—		(9		)
Effect of netting and allocation of collateral	2			5			—			—		7			2			5			—			—		7
Interest rate and foreign currency derivative liabilities subtotal	1			(5		)	—			—		(4		)	1			(5		)	—			—		(4		)
Deferred compensation obligation	—			(38		)	—			—		(38		)	—			(145		)	—			—		(145		)
Total liabilities	(63		)	(222		)	(138		)	—		(423		)	(63		)	(329		)	(394		)	—		(786		)
Total net assets	$	6,322		$	3,507		$	1,249		$	3,534	$	14,612		$	6,917		$	3,464		$	1,015		$	3,534	$	14,930

_________

(a) Generation excludes cash of $183 million and $259 million at September 30, 2018 and December 31, 2017 and restricted cash of $57 million and $127 million at September 30, 2018 and December 31, 2017.  Exelon excludes cash of $330 million and $389 million at September 30, 2018 and December 31, 2017 and restricted cash of $85 million and $145 million at September 30, 2018 and December 31, 2017 and includes long-term restricted cash of $163 million and $85 million at September 30, 2018 and December 31, 2017, which is reported in Other deferred debits on the Consolidated Balance Sheets.

(b) Includes $37 million and $77 million of cash received from outstanding repurchase agreements at September 30, 2018 and December 31, 2017, respectively, and is offset by an obligation to repay upon settlement of the agreement as discussed in (d) below.

(c) Includes derivative instruments of $(4) million and less than $1 million, which have a total notional amount of $915 million and $811 million at September 30, 2018 and December 31, 2017, respectively. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the fiscal years ended and do not represent the amount of Exelon and Generation's exposure to credit or market loss.

(d) Excludes net liabilities of $89 million and $82 million at September 30, 2018 and December 31, 2017, respectively. These items consist of receivables related to pending securities sales, interest and dividend receivables, repurchase agreement obligations, and payables related to pending securities purchases. The repurchase agreements are generally short-term in nature with durations generally of 30 days or less.

(e) Excludes net assets of less than $1 million at September 30, 2018. These items consist of receivables related to pending securities sales, interest and dividend receivables, and payables related to pending securities purchases.

(f) The amount of unrealized gains/(losses) at Generation totaled less than $1 million for the three months ended September 30, 2018 and September 30, 2017. The amount of unrealized gains/(losses) at Generation totaled less than $1 million and $1 million for the nine months ended September 30, 2018 and September 30, 2017, respectively. The amount of unrealized gains/(losses) at Exelon totaled $1 million for the three months ended September 30, 2018 and September 30, 2017. The amount of unrealized gains/(losses) at Exelon totaled $2 million and $3 million for the nine months ended September 30, 2018 and September 30, 2017, respectively.

(g) Collateral posted/(received) from counterparties totaled $18 million, $100 million and $94 million allocated to Level 1, Level 2 and Level 3 mark-to-market derivatives, respectively, as of September 30, 2018. Collateral posted/(received) from counterparties, net of collateral paid to counterparties, totaled $65 million, $320 million and $81 million allocated to Level 1, Level 2 and Level 3 mark-to-market derivatives, respectively, as of December 31, 2017.

(h) Of the collateral posted/(received), $(166) million represents variation margin on the exchanges as of September 30, 2018. Of the collateral posted/(received), $(117) million represents variation margin on the exchanges as of December 31, 2017.

Exelon and Generation hold investments without readily determinable fair values with carrying amounts of $71 million as of September 30, 2018. Changes were immaterial in fair value, cumulative adjustments and impairments for the three and nine months ended September 30, 2018.

ComEd, PECO and BGE

The following tables present assets and liabilities measured and recorded at fair value on ComEd's, PECO's and BGE's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2018 and December 31, 2017:

	ComEd											PECO										BGE
As of September 30, 2018	Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets
Cash equivalents(a)	$	211	$	—		$	—		$	211		$	84	$	—		$	—	$	84		$	100	$	—		$	—	$	100
Rabbi trust investments
Mutual funds	—		—			—			—			7		—			—		7			6		—			—		6
Life insurance contracts	—		—			—			—			—		11			—		11			—		—			—		—
Rabbi trust investments subtotal(b)	—		—			—			—			7		11			—		18			6		—			—		6
Total assets	211		—			—			211			91		11			—		102			106		—			—		106
Liabilities
Deferred compensation obligation	—		(7		)	—			(7		)	—		(10		)	—		(10		)	—		(5		)	—		(5		)
Mark-to-market derivative liabilities(c)	—		—			(259		)	(259		)	—		—			—		—			—		—			—		—
Total liabilities	—		(7		)	(259		)	(266		)	—		(10		)	—		(10		)	—		(5		)	—		(5		)
Total net assets (liabilities)	$	211	$	(7	)	$	(259	)	$	(55	)	$	91	$	1		$	—	$	92		$	106	$	(5	)	$	—	$	101

	ComEd											PECO										BGE
As of December 31, 2017	Level 1		Level 2			Level 3			Total			Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets
Cash equivalents(a)	$	98	$	—		$	—		$	98		$	228	$	—		$	—	$	228		$	—	$	—		$	—	$	—
Rabbi trust investments
Mutual funds	—		—			—			—			7		—			—		7			6		—			—		6
Life insurance contracts	—		—			—			—			—		10			—		10			—		—			—		—
Rabbi trust investments subtotal(b)	—		—			—			—			7		10			—		17			6		—			—		6
Total assets	98		—			—			98			235		10			—		245			6		—			—		6
Liabilities
Deferred compensation obligation	—		(8		)	—			(8		)	—		(11		)	—		(11		)	—		(5		)	—		(5		)
Mark-to-market derivative liabilities(c)	—		—			(256		)	(256		)	—		—			—		—			—		—			—		—
Total liabilities	—		(8		)	(256		)	(264		)	—		(11		)	—		(11		)	—		(5		)	—		(5		)
Total net assets (liabilities)	$	98	$	(8	)	$	(256	)	$	(166	)	$	235	$	(1	)	$	—	$	234		$	6	$	(5	)	$	—	$	1

_________

(a) ComEd excludes cash of $69 million and $45 million at September 30, 2018 and December 31, 2017 and includes long-term restricted cash of $144 million and $62 million at September 30, 2018 and December 31, 2017, which is reported in Other deferred debits on the Consolidated Balance Sheets.  PECO excludes cash of $23 million and $47 million at September 30, 2018 and December 31, 2017.  BGE excludes cash of $13 million and $17 million at September 30, 2018 and December 31, 2017 and restricted cash of $3 million and $1 million at September 30, 2018 and December 31, 2017.

(b) The amount of unrealized gains/(losses) at ComEd, PECO and BGE totaled less than $1 million for the three and nine months ended September 30, 2018 and September 30, 2017, respectively.

(c) The Level 3 balance consists of the current and noncurrent liability of $24 million and $235 million, respectively, at September 30, 2018, and $21 million and $235 million, respectively, at December 31, 2017, related to floating-to-fixed energy swap contracts with unaffiliated suppliers.

PHI, Pepco, DPL and ACE

The following tables present assets and liabilities measured and recorded at fair value on PHI's, Pepco's, DPL's and ACE's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2018 and December 31, 2017:

	As of September 30, 2018										As of December 31, 2017
PHI	Level 1		Level 2			Level 3		Total			Level 1			Level 2			Level 3		Total
Assets
Cash equivalents(a)	$	182	$	—		$	—	$	182		$	83		$	—		$	—	$	83
Rabbi trust investments
Cash equivalents	42		—			—		42			72			—			—		72
Mutual funds	15		—			—		15			—			—			—		—
Fixed income	—		16			—		16			—			12			—		12
Life insurance contracts	—		22			37		59			—			23			22		45
Rabbi trust investments subtotal(b)	57		38			37		132			72			35			22		129
Total assets	239		38			37		314			155			35			22		212
Liabilities
Deferred compensation obligation	—		(22		)	—		(22		)	—			(25		)	—		(25		)
Mark-to-market derivative liabilities(c)	—		—			—		—			(1		)	—			—		(1		)
Effect of netting and allocation of collateral	—		—			—		—			1			—			—		1
Mark-to-market derivative liabilities subtotal	—		—			—		—			—			—			—		—
Total liabilities	—		(22		)	—		(22		)	—			(25		)	—		(25		)
Total net assets	$	239	$	16		$	37	$	292		$	155		$	10		$	22	$	187

	Pepco										DPL										ACE
As of September 30, 2018	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total			Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(a)	$	35	$	—		$	—	$	35		$	102	$	—		$	—	$	102		$	26	$	—	$	—	$	26
Rabbi trust investments
Cash equivalents	41		—			—		41			—		—			—		—			—		—		—		—
Fixed income	—		6			—		6			—		—			—		—			—		—		—		—
Life insurance contracts	—		22			36		58			—		—			—		—			—		—		—		—
Rabbi trust investments subtotal(b)	41		28			36		105			—		—			—		—			—		—		—		—
Total assets	76		28			36		140			102		—			—		102			26		—		—		26
Liabilities
Deferred compensation obligation	—		(3		)	—		(3		)	—		(1		)	—		(1		)	—		—		—		—
Total liabilities	—		(3		)	—		(3		)	—		(1		)	—		(1		)	—		—		—		—
Total net assets (liabilities)	$	76	$	25		$	36	$	137		$	102	$	(1	)	$	—	$	101		$	26	$	—	$	—	$	26

	Pepco										DPL											ACE
As of December 31, 2017	Level 1		Level 2			Level 3		Total			Level 1			Level 2			Level 3		Total			Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(a)	$	36	$	—		$	—	$	36		$	—		$	—		$	—	$	—		$	29	$	—	$	—	$	29
Rabbi trust investments
Cash equivalents	44		—			—		44			—			—			—		—			—		—		—		—
Fixed income	—		12			—		12			—			—			—		—			—		—		—		—
Life insurance contracts	—		23			22		45			—			—			—		—			—		—		—		—
Rabbi trust investments subtotal(b)	44		35			22		101			—			—			—		—			—		—		—		—
Total assets	80		35			22		137			—			—			—		—			29		—		—		29
Liabilities
Deferred compensation obligation	—		(4		)	—		(4		)	—			(1		)	—		(1		)	—		—		—		—
Mark-to-market derivative liabilities(c)	—		—			—		—			(1		)	—			—		(1		)	—		—		—		—
Effect of netting and allocation of collateral	—		—			—		—			1			—			—		1			—		—		—		—
Mark-to-market derivative liabilities subtotal	—		—			—		—			—			—			—		—			—		—		—		—
Total liabilities	—		(4		)	—		(4		)	—			(1		)	—		(1		)	—		—		—		—
Total net assets (liabilities)	$	80	$	31		$	22	$	133		$	—		$	(1	)	$	—	$	(1	)	$	29	$	—	$	—	$	29

_________

(a) PHI excludes cash of $33 million and $12 million at September 30, 2018 and December 31, 2017, respectively, and includes long-term restricted cash of $19 million and $23 million at September 30, 2018 and December 31, 2017, respectively, which is reported in Other deferred debits on the Consolidated Balance Sheets.  Pepco excludes cash of $12 million and $4 million at September 30, 2018 and December 31, 2017, respectively. DPL excludes cash of $8 million and $2 million at September 30, 2018 and December 31, 2017, respectively. ACE excludes cash of $11 million and $2 million at September 30, 2018 and December 31, 2017, respectively, and includes long-term restricted cash of $19 million and $23 million at September 30, 2018 and December 31, 2017, respectively, which is reported in Other deferred debits on the Consolidated Balance Sheets.

(b) The amount of unrealized gains/(losses) at PHI totaled less than $1 million for the three months ended September 30, 2018 and 2017, respectively. The amount of unrealized gains/(losses) at Pepco totaled $1 million and less than $1 million for the three months ended September 30, 2018 and 2017, respectively. The amount of unrealized gains/(losses) at PHI totaled $1 million and less than $1 million for the nine months ended September 30, 2018 and 2017, respectively. The amount of unrealized gains/(losses) at Pepco totaled less than $1 million for the nine months ended September 30, 2018 and 2017, respectively.

(c) Represents natural gas futures purchased by DPL as part of a natural gas hedging program approved by the DPSC.

Fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and nine months ended September 30, 2018 and 2017:

	Generation															ComEd				PHI					Exelon
Three Months Ended September 30, 2018	NDT Fund Investments			Pledged Assets for Zion Station Decommissioning			Mark-to-Market Derivatives				Other Investments		Total Generation			Mark-to-Market Derivatives				Life Insurance Contracts(c)		Eliminated in Consolidation			Total
Balance as of June 30, 2018	$	585		$	18		$	737			$	36	$	1,376		$	(252	)		$	36	$	—		$	1,160
Total realized / unrealized gains (losses)
Included in net income	(1		)	—			(259		)	(a)	13		(247		)	—				1		—			(246		)
Included in noncurrent payables to affiliates	(4		)	—			—				—		(4		)	—				—		4			—
Included in payable for Zion Station decommissioning	—			2			—				—		2			—				—		—			2
Included in regulatory assets/liabilities	—			—			—				—		—			(7		)	(b)	—		(4		)	(11		)
Change in collateral	—			—			(44		)		—		(44		)	—				—		—			(44		)
Purchases, sales, issuances and settlements
Purchases	15			—			81				3		99			—				—		—			99
Sales	—			(20		)	—				—		(20		)	—				—		—			(20		)
Settlements	(29		)	—			—				—		(29		)	—				—		—			(29		)
Transfers into Level 3	—			—			3				—		3			—				—		—			3
Transfers out of Level 3	—			—			(6		)		—		(6		)	—				—		—			(6		)
Balance at September 30, 2018	$	566		$	—		$	512			$	52	$	1,130		$	(259	)		$	37	$	—		$	908
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of September 30, 2018	$	(1	)	$	—		$	(104	)		$	13	$	(92	)	$	—			$	—	$	—		$	(92	)

	Generation																ComEd				PHI				Exelon
Nine Months Ended September 30, 2018	NDT Fund Investments			Pledged Assets for Zion Station Decommissioning			Mark-to-Market Derivatives				Other Investments			Total Generation			Mark-to-Market Derivatives				Life Insurance Contracts(c)		Eliminated in Consolidation		Total
Balance as of December 31, 2017	$	648		$	12		$	552			$	37		$	1,249		$	(256	)		$	22	$	—	$	1,015
Total realized / unrealized gains (losses)
Included in net income	(1		)	—			(188		)	(a)	14			(175		)	—				3		—		(172		)
Included in noncurrent payables to affiliates	—			—			—				—			—			—				—		—		—
Included in payable for Zion Station decommissioning	—			7			—				—			7			—				—		—		7
Included in regulatory assets	—			—			—				—			—			(3		)	(b)	—		—		(3		)
Change in collateral	—			—			14				—			14			—				—		—		14
Purchases, sales, issuances and settlements
Purchases	34			1			181				3			219			—				—		—		219
Sales	—			(20		)	(3		)		—			(23		)	—				—		—		(23		)
Settlements	(115		)	—			—				—			(115		)	—				12		—		(103		)
Transfers into Level 3	—			—			(21		)		—			(21		)	—				—		—		(21		)
Transfers out of Level 3	—			—			(23		)		(2		)	(25		)	—				—		—		(25		)
Balance as of September 30, 2018	$	566		$	—		$	512			$	52		$	1,130		$	(259	)		$	37	$	—	$	908
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of September 30, 2018	$	(5	)	$	—		$	159			$	14		$	168		$	—			$	—	$	—	$	168

__________

(a) Includes a reduction for the reclassification of $155 million and $347 million of realized losses due to the settlement of derivative contracts for the three and nine months ended September 30, 2018, respectively.

(b) Includes $4 million of increases in fair value and an increase for realized losses due to settlements of $3 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2018. Includes $9 million of decreases in fair value and an increase for realized losses due to settlements of $12 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2018.

(c) The amounts represented are life insurance contracts at Pepco.

	Generation															ComEd				PHI		Exelon
Three Months Ended September 30, 2017	NDT Fund Investments			Pledged Assets for Zion Station Decommissioning			Mark-to-Market Derivatives				Other Investments		Total Generation			Mark-to-Market Derivatives				Life Insurance Contracts(c)		Total
Balance as of June 30, 2017	$	683		$	21		$	589			$	41	$	1,334		$	(256	)		$	20	$	1,098
Total realized / unrealized gains (losses)
Included in net income	—			—			(82		)	(a)	1		(81		)	—				1		(80		)
Included in noncurrent payables to affiliates	—			—			—				—		—			—				—		—
Included in payable for Zion Station decommissioning	—			(4		)	—				—		(4		)	—				—		(4		)
Included in regulatory assets	—			—			—				—		—			(21		)	(b)	—		(21		)
Change in collateral	—			—			11				—		11			—				—		11
Purchases, sales, issuances and settlements
Purchases	19			—			57				1		77			—				—		77
Sales	—			—			—				—		—			—				—		—
Settlements	(31		)	—			10				—		(21		)	—				—		(21		)
Transfers into Level 3	—			—			—				—		—			—				—		—
Transfers out of Level 3	—			—			10				—		10			—				—		10
Balance as of September 30, 2017	$	671		$	17		$	595			$	43	$	1,326		$	(277	)		$	21	$	1,070
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of September 30, 2017	$	—		$	—		$	24			$	1	$	25		$	—			$	1	$	26

	Generation																ComEd				PHI						Exelon
Nine Months Ended September 30, 2017	NDT Fund Investments			Pledged Assets for Zion Station Decommissioning			Mark-to-Market Derivatives				Other Investments			Total Generation			Mark-to-Market Derivatives				Life Insurance Contracts(c)			Eliminated in Consolidation			Total
Balance as of December 31, 2016	$	677		$	19		$	493			$	42		$	1,231		$	(258	)		$	20		$	—		$	993
Total realized / unrealized gains (losses)
Included in net income	4			—			(110		)	(a)	2			(104		)	—				2			—			(102		)
Included in noncurrent payables to affiliates	13			—			—				—			13			—				—			(13		)	—
Included in payable for Zion Station decommissioning	—			(3		)	—				—			(3		)	—				—			—			(3		)
Included in regulatory assets	—			—			—				—			—			(19		)	(b)	—			13			(6		)
Change in collateral	—			—			81				—			81			—				—			—			81
Purchases, sales, issuances and settlements
Purchases	54			1			146				4			205			—				—			—			205
Sales	—			—			(15		)		—			(15		)	—				—			—			(15		)
Issuances	—			—			—				—			—			—				(1		)	—			(1		)
Settlements	(77		)				(8		)					(85		)	—				—			—			(85		)
Transfers into Level 3	—			—			(9		)		—			(9		)	—				—			—			(9		)
Transfers out of Level 3	—			—			17				(5		)	12			—				—			—			12
Balance as of September 30, 2017	$	671		$	17		$	595			$	43		$	1,326		$	(277	)		$	21		$	—		$	1,070
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of September 30, 2017	$	2		$	—		$	161			$	2		$	165		$	—			$	2		$	—		$	167

__________

(a) Includes a reduction for the reclassification of $96 million and $279 million of realized gains due to the settlement of derivative contracts for the three and nine months ended September 30, 2017, respectively.

(b) Includes $24 million of increases in fair value and an increase for realized losses due to settlements of $3 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2017. Includes $32 million of decreases in fair value and an increase for realized losses due to settlements of $13 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2017.

(c) The amounts represented are life insurance contracts at Pepco.

Total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis

The following tables present the income statement classification of the total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis during the three and nine months ended September 30, 2018 and 2017:

	Generation								PHI		Exelon
	Operating Revenues			Purchased Power and Fuel			Other, net		Operating and Maintenance		Operating Revenues			Purchased Power and Fuel			Operating and Maintenance		Other, net
Total gains (losses) included in net income for the three months ended September 30, 2018	$	(176	)	$	(83	)	$	12	$	1	$	(176	)	$	(83	)	$	1	$	12
Total gains (losses) included in net income for the nine months ended September 30, 2018	(32		)	(156		)	13		3		(32		)	(156		)	3		13
Change in the unrealized gains (losses) relating to assets and liabilities held for the three months ended September 30, 2018	(64		)	(40		)	12		—		(64		)	(40		)	—		12
Change in the unrealized gains (losses) relating to assets and liabilities held for the nine months ended September 30, 2018	174			(15		)	9		—		174			(15		)	—		9

	Generation								PHI		Exelon
	Operating Revenues			Purchased Power and Fuel			Other, net		Other, net(a)		Operating Revenues			Purchased Power and Fuel			Other, net
Total gains (losses) included in net income for the three months ended September 30, 2017	$	(3	)	$	(69	)	$	1	$	1	$	(3	)	$	(69	)	$	2
Total gains (losses) included in net income for the nine months ended September 30, 2017	34			(152		)	6		2		34			(152		)	8
Change in the unrealized gains (losses) relating to assets and liabilities held for the three months ended September 30, 2017	47			(23		)	1		1		47			(23		)	2
Change in the unrealized gains (losses) relating to assets and liabilities held for the nine months ended September 30, 2017	222			(61		)	4		2		222			(61		)	6

Fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis, valuation technique

The table below discloses the significant inputs to the forward curve used to value these positions.

Type of trade	Fair Value at September 30, 2018			Valuation Technique	Unobservable Input	Range
Mark-to-market derivatives — Economic Hedges (Exelon and Generation)(a)(b)	$	359		Discounted Cash Flow	Forward power price	$9	-	$158
					Forward gas price	$1.10	-	$12.57
				Option Model	Volatility percentage	8%	-	211%
Mark-to-market derivatives — Proprietary trading (Exelon and Generation)(a)(b)	$	58		Discounted Cash Flow	Forward power price	$17	-	$158
Mark-to-market derivatives (Exelon and ComEd)	$	(259	)	Discounted Cash Flow	Forward heat rate(c)	10x	-	11x
					Marketability reserve	4%	-	8%
					Renewable factor	86%	-	121%

Type of trade	Fair Value at December 31, 2017			Valuation Technique	Unobservable Input	Range
Mark-to-market derivatives — Economic Hedges (Exelon and Generation)(a)(b)	$	445		Discounted Cash Flow	Forward power price	$3	-	$124
					Forward gas price	$1.27	-	$12.80
				Option Model	Volatility percentage	11%	-	139%
Mark-to-market derivatives — Proprietary trading (Exelon and Generation)(a)(b)	$	26		Discounted Cash Flow	Forward power price	$14	-	$94
Mark-to-market derivatives (Exelon and ComEd)	$	(256	)	Discounted Cash Flow	Forward heat rate(c)	9x	-	10x
					Marketability reserve	4%	-	8%
					Renewable factor	88%	-	120%

_________

(a) The valuation techniques, unobservable inputs and ranges are the same for the asset and liability positions.

(b) The fair values do not include cash collateral posted on level three positions of $94 million and $81 million as of September 30, 2018 and December 31, 2017, respectively.

(c) Quoted forward natural gas rates are utilized to project the forward power curve for the delivery of energy at specified future dates. The natural gas curve is extrapolated beyond its observable period to the end of the contract’s delivery.