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What changed in Constellation Energy's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Constellation Energy's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+565 added−577 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-27)

Top changes in Constellation Energy's 2024 10-K

565 paragraphs added · 577 removed · 419 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

142 edited+34 added−61 removed76 unchanged
Biggest changeThese actions help to create an environment where all employees can thrive and advance as equal members of the workforce. 20 Table of Contents The following table shows diversity metrics for all employees, management, and executives based on self-disclosed information as of December 31, 2023: Metric All Employees Full-Time 13,813 Part-Time 58 Total Employees 13,871 Metric All Employees Regular (a) 13,833 Temporary (b) 38 Total Employees 13,871 Metric All Employees Management (c) Executives (d) Male 10,672 2,178 112 Female 3,078 522 32 Undisclosed 83 11 — Total Employees 13,833 2,711 144 Metric All Employees Management (c) Executives (d) Aged (e) 13 % 2 % — % Aged 30-50 (e) 56 % 63 % 47 % Aged >50 (e) 31 % 35 % 53 % Metric All Employees Management (c) Executives (d) Employees within 10 years of retirement (f) 5,778 1,298 113 Metric All Employees Management (c) Executives (d) People of Color (e) 20 % 14 % 13 % __________ (a) Regular employees hold a position where employment is for an indeterminate period and the position is expected to continue on an ongoing basis.
Biggest changeThese actions help to create an environment where all employees can thrive and advance based on merit. 25 Table of Contents The following table shows total number of employees, management, and executives as of December 31, 2024: Metric All Employees Full-Time 14,215 Part-Time 49 Total Employees 14,264 Metric All Employees Regular (a) 14,219 Temporary (b) 45 Total Employees 14,264 __________ (a) Regular employees hold a position where employment is for an indeterminate period and the position is expected to continue on an ongoing basis.
The following states are participants in RGGI; Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Pennsylvania’s participation in RGGI is currently being litigated at the Pennsylvania Supreme Court. Renewable and Clean Energy Standards. According to the U.S.
The following states are currently participants in RGGI; Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Pennsylvania’s participation in RGGI is currently being litigated at the Pennsylvania Supreme Court. Renewable and Clean Energy Standards. According to the U.S.
Our operations have in the past, and may in the future, require substantial expenditures in order to comply with these federal and state environmental laws. Under these laws, we may be liable for the costs of remediating environmental contamination of property now or formerly owned by us and of property contaminated by hazardous substances generated or transported by us.
Our operations have in the past, and may in the future, require substantial expenditures to comply with these federal and state environmental laws. Under these laws, we may be liable for the costs of remediating environmental contamination of property now or formerly owned by us and of property contaminated by hazardous substances generated or transported by us.
We operate all of these nuclear generating stations, except for the units at Salem and STP, which are operated by PSEG Nuclear, LLC (an indirect, wholly owned subsidiary of PSEG) and STPNOC, respectively. We have consistently operated our nuclear plants at best-in-class levels.
We operate all of our nuclear generating stations, except for the units at Salem and STP, which are operated by PSEG Nuclear, LLC (an indirect, wholly owned subsidiary of PSEG) and STPNOC, respectively. We have consistently operated our nuclear plants at best-in-class levels.
The Federal Low-Level Radioactive Waste Policy Act of 1980 provides that states may enter into agreements to provide regional disposal facilities for LLRW and restrict use of those facilities to waste generated within the region.
The Federal Low-Level Radioactive Waste Policy Act of 1980 provides that states may enter agreements to provide regional disposal facilities for LLRW and restrict use of those facilities to waste generated within the region.
Beginning in 2024, our nuclear fleet is eligible for the nuclear PTC provided by the IRA, an important tool in managing commodity price risk for each nuclear unit not already receiving state support.
Beginning in 2024, our existing nuclear fleet is eligible for the nuclear PTC provided by the IRA, an important tool in managing commodity price risk for each nuclear unit not already receiving state support.
Our consistently high renewal rates are driven by our ability to provide customized solutions and deliver focused attention to our customers’ needs, resulting in an industry-leading C&I customer-service business ranking in the DNV 2023 Energy Blueprint: Sales Strategies report. We are also successful at acquiring new customers by offering innovative services and products that meet their needs.
Our consistently high renewal rates are driven by our ability to provide customized solutions and deliver focused attention to our customers’ needs, resulting in an industry-leading C&I customer-service business ranking in the DNV 2024 Energy Blueprint: Sales Strategies report. We are also successful at acquiring new customers by offering innovative services and products that meet their needs.
Our Operations We operate the largest carbon-free generation fleet in the nation and are one of the largest competitive electric generation companies in the country, as measured by owned and contracted MWs.
Our Operations We operate the largest carbon-free generation fleet in the nation and are one of the largest competitive electric generation companies in the nation, as measured by owned and contracted MWs.
Many states in which we operate have state and regional programs to reduce GHG emissions and renewable and other portfolio standards, which impact the power sector and other sectors as well. 25 states and the District of Columbia have 100% clean energy targets, deep GHG reductions, or both, encompassing 53% of U.S residential electricity customers.
Many states in which we operate have state and regional programs to reduce GHG emissions and renewable and other portfolio standards, which impact the power sector and other sectors as well. 25 states and the District of Columbia have 100% clean energy targets, deep GHG reductions, or both, encompassing 55% of U.S. residential electricity customers.
For a discussion of matters associated with our contracts with the DOE for the disposal of SNF, see Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. As a by-product of their operations, nuclear generating units produce LLRW. LLRW is accumulated at each generating station and permanently disposed of at licensed disposal facilities.
For a discussion of matters associated with our contracts with the DOE for the disposal of SNF, see Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. As a by-product of their operations, nuclear generating units produce LLRW. LLRW is accumulated at each generating station and permanently disposed of at licensed disposal facilities.
Until the compliance requirements are determined by the applicable state permitting director for each of the seven remaining nuclear stations, on a site-specific basis for each plant, we cannot estimate the effect that compliance with the EPA’s 2014 rule will have on the operation of our generating facilities and our consolidated financial statements.
Until the compliance requirements are determined by the applicable state permitting director for each of the six remaining nuclear stations, on a site-specific basis for each plant, we cannot estimate the effect that compliance with the EPA’s 2014 rule will have on the operation of our generating facilities and our consolidated financial statements.
The commodity risks associated with the output from owned and contracted generation are managed using various commodity transactions including sales to retail customers, trades on commodity exchanges, and sales to wholesale counterparties in accordance with our hedging program. See further discussion of the hedging program in the Price and Supply Risk Management section below.
The commodity risks associated with the output from owned and contracted generation are managed using various commodity transactions including sales to retail customers, trades on commodity exchanges, bilateral contracts, and sales to wholesale counterparties in accordance with our hedging program. See further discussion of the hedging program in the Price and Supply Risk Management section below.
As a result, in some instances, such as Peach Bottom, the permit expiration dates have elapsed and have been administratively extended. Should a state permitting director determine that a facility must install cooling towers to comply with the rule, that facility’s economic viability could be called into question.
As a result, in some instances, such as Peach Bottom, the permit expiration dates have lapsed and have been administratively extended. Should a state permitting director determine that a facility must install cooling towers to comply with the rule, that facility’s economic viability could be called into question.
While this trend of customers using third parties to find suppliers has slowed in recent years, we have remained the market leader in direct C&I sales with over 33% of the C&I market share of direct customer business driven by our highly experienced and long-tenor direct sales team.
While this trend of customers using third parties to find suppliers has slowed in recent years, we have remained the market leader in direct C&I sales with over 32% of the C&I market share of direct customer business driven by our highly experienced and long-tenor direct sales team.
Our comprehensive benefits help our employees care for themselves and their families, now and in the future. Community We actively invest in community development through philanthropic giving and employee volunteerism. We work to build a future in which our employees, customers, business associates and communities benefit equitably from social, environmental and economic progress.
Our comprehensive benefits help our employees care for themselves and their families, now and in the future. Community We actively invest in community development through philanthropic giving and employee volunteerism. We work to build a future in which all our employees, customers, business associates and communities benefit from social, environmental and economic progress.
It is this attention to the customer that creates the durable, repeatable value highlighted in these statistics.
It is this attention to the customer that creates the durable and repeatable value highlighted in these statistics.
Our Board of Directors has delegated to its Nuclear Oversight Committee and the Corporate Governance Committee the authority to oversee our compliance with health, environmental, and safety laws and regulations and its strategies and efforts to protect and improve the quality of the environment, including our internal climate change and sustainability policies and programs, as discussed in further detail below.
Our Board of Directors has delegated to its Nuclear Oversight Committee and the Corporate Governance Committee the authority to oversee our compliance with health, environmental, and safety laws and regulations and its 19 Table of Contents strategies and efforts to protect and improve the quality of the environment, including our internal climate change and sustainability policies and programs, as discussed in further detail below.
Corporations are facing increasing pressure from their customers and investors to align their businesses with international and national environmental and sustainability objectives, including supporting goals to reduce GHG emissions in their business operations.
Corporations are facing increasing pressure from their customers and investors to align their businesses with environmental and sustainability objectives, including supporting goals to reduce GHG emissions in their business operations.
In 2023, 2022, and 2021, electric supply (in GWhs) generated from our nuclear generating facilities was 65%, 64%, and 65%, respectively, of our total electric supply. During scheduled refueling outages, we perform maintenance and equipment upgrades in order to maintain safe, reliable operations and to minimize the occurrence of unplanned outages.
In 2024, 2023, and 2022, electric supply (in GWhs) generated from our nuclear generating facilities was 67%, 65%, and 64%, respectively, of our total electric supply. During scheduled refueling outages, we perform maintenance and equipment upgrades in order to maintain safe, reliable operations and to minimize the occurrence of unplanned outages.
We strive to create a workplace that is diverse, inclusive, innovative, and safe for our employees. In order to provide the services and products that our customers expect, we focus on creating the best teams to foster community, mutual respect and the empowerment of employees to be their authentic selves.
We strive to create a workplace that is inclusive, innovative, and safe for our employees. In order to provide the services and products that our customers expect, we focus on creating the best teams to foster teamwork, mutual respect and the empowerment of employees to be their authentic selves.
See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding our environmental matters, remediation efforts, and related impacts to our Consolidated Financial Statements.
See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding our environmental matters, remediation efforts, and related impacts to our consolidated financial statements.
On July 28, 2016, the NJDEP issued a final permit for Salem requiring 316(b) studies and deferring the Agency's selection of a final compliance technology. The permit allows Salem to continue to operate utilizing the existing cooling water intake system with certain required modifications.
In July 2016, the NJDEP issued a final permit for Salem requiring 316(b) studies and deferring the Agency's selection of a final compliance technology. The permit allows Salem to continue to operate utilizing the existing cooling water intake system with certain required modifications.
We are also subject to the jurisdiction of the Delaware River Basin Commission and the Susquehanna River Basin Commission, regional agencies that primarily regulate water usage. 26 Table of Contents Solid and Hazardous Waste and Environmental Remediation CERCLA authorizes response to releases or threatened releases of hazardous substances into the environment.
We are also subject to the jurisdiction of the Delaware River Basin Commission and the Susquehanna River Basin Commission, regional agencies that primarily regulate water usage. Solid and Hazardous Waste and Environmental Remediation CERCLA authorizes response to releases or threatened releases of hazardous substances into the environment.
In 2023, 2022, and 2021, electric supply (in GWhs) generated from our owned natural gas, oil, and renewable generating facilities was 11%, 10%, and 10%, respectively, of our total electric supply.
In 2024, 2023, and 2022, electric supply (in GWhs) generated from our owned natural gas, oil, and renewable generating facilities was 10%, 11%, and 10%, respectively, of our total electric supply.
See ITEM 2. PROPERTIES for additional information. (b) Includes wind, hydroelectric, and solar generating assets. In addition to the owned generating resources above, at December 31, 2023 we have contracted generation with a total capacity of 4,103 MWs, which represents electric supply procured under unit-specific agreements.
See ITEM 2. PROPERTIES for additional information. (b) Includes wind, hydroelectric, and solar generating assets. In addition to the owned generating resources above, at December 31, 2024 we have contracted generation with a total capacity of 4,774 MWs, which represents electric supply procured under unit-specific agreements.
These PRPs can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed cleanup, may voluntarily settle with the EPA concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight. Most states have also enacted statutes that contain provisions substantially like CERCLA.
These PRPs can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed 23 Table of Contents cleanup, may voluntarily settle with the EPA concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight. Most states have also enacted statutes that contain provisions substantially like CERCLA.
Additionally, these service offerings provide scalable solutions to meet sustainability goals through investment across the life of the facility or operations and allow for budget certainty. The ongoing ability to optimize energy consumption for customers allows us to support customer demands with the right combination of technology and efficiency program options.
Additionally, these service 14 Table of Contents offerings provide scalable solutions to meet sustainability goals through investment across the life of the facility or operations and allow for greater budget certainty. The ongoing ability to optimize energy consumption for customers allows us to support customer demands with the right combination of technology and efficiency program options.
Wholesale Market Our wholesale channel-to-market involves the sale of electricity among electric utilities and electricity marketers before it is eventually sold to end-use consumers. In 2023, we served approximately 62 TWhs of power load across competitive utility load procurement and bilateral sales to municipalities, co-ops, and other wholesale entities.
Wholesale Market Our wholesale channel-to-market involves the sale of electricity among electric utilities and electricity marketers before it is eventually sold to end-use consumers. In 2024, we served approximately 58 TWhs of power load across competitive utility load procurement and bilateral sales to municipalities, co-ops, and other wholesale entities.
The following map illustrates the locations of our owned generation facilities as of December 31, 2023: The Company's Generation Fleet Map (a)(b) Owned Assets __________ (a) Note: One symbol is included per location. Some locations may have multiple generating units. Locations in tight geographic proximity may appear as one symbol. Units that are not currently operational are not captured.
The following map illustrates the locations of our owned generation facilities as of December 31, 2024: Our Owned Generation Fleet Map (a)(b) Owned Assets __________ (a) One symbol is included per location. Some locations may have multiple generating units. Locations in tight geographic proximity may appear as one symbol. Units that are not currently operational are not captured.
Collective Bargaining Agreements Approximately 25% of employees participate in CBAs.
Collective Bargaining Agreements Approximately 25% of all employees participate in CBAs.
In addition to our high customer renewal rates, we have produced consistently high new win rates for C&I 13 Table of Contents power as well, acquiring nearly one out of every three new customers who have chosen to shop with us over the past five years.
In addition to our high customer renewal rates, we have produced consistently high new win rates within C&I power 13 Table of Contents as well, acquiring nearly one out of every three new customers who have chosen to shop with us over the past six years.
FERC’s jurisdiction over ratemaking includes the authority to suspend the market-based rates of utilities and set cost-based rates should FERC find that its previous grant of market-based rates authority is no longer just and reasonable.
FERC’s 16 Table of Contents jurisdiction over ratemaking includes the authority to suspend the market-based rates of utilities and set cost-based rates should FERC find that its previous grant of market-based rates authority is no longer just and reasonable.
These state-specific policies preserve the environmental attributes of our nuclear facilities, and include the following: Policy Name Year Enacted Nuclear Facilities Impacted Type of Program Year of Expiration New York Clean Energy Standard 2016 FitzPatrick, Ginna, and NMP ZEC 2029 Illinois Zero Emission Standard 2016 Clinton and Quad Cities ZEC 2027 New Jersey Clean Energy Legislation 2018 Salem ZEC 2025 Illinois Clean Energy Law 2021 Byron, Braidwood, and Dresden CMC 2027 Regional Greenhouse Gas Initiative (RGGI).
These state-specific policies preserve the environmental attributes of our nuclear facilities, and include the following: Policy Name Year Enacted Nuclear Facilities Impacted Type of Program Year of Expiration New York Clean Energy Standard 2016 FitzPatrick, Ginna, and NMP ZEC 2029 Illinois Zero Emission Standard 2016 Clinton and Quad Cities ZEC 2027 New Jersey Clean Energy Legislation 2018 Salem ZEC 2025 (a) Illinois Clean Energy Law 2021 Byron, Braidwood, and Dresden CMC 2027 __________ (a) The New Jersey Clean Energy Legislation program ends May 2025. 21 Table of Contents Regional Greenhouse Gas Initiative (RGGI).
The disposal facility in South Carolina at present is only receiving LLRW from LLRW generators in South Carolina, New Jersey (which includes Salem), and Connecticut. 27 Table of Contents We utilize on-site storage capacity at all our stations to store and stage for shipping Class B and Class C LLRW.
The disposal facility in South Carolina at present is only receiving LLRW from LLRW generators in South Carolina, New Jersey (which includes Salem), and Connecticut. We utilize on-site storage capacity at all our stations to store and stage for shipping Class B and Class C LLRW.
Consumers are increasingly purpose-driven and knowledgeable of services that drive decarbonization, leading them to value the ability to be connected to and trace the source of their clean energy choices.
Evolving Customer Preferences. Consumers are increasingly purpose-driven and knowledgeable of services that drive decarbonization, leading them to value the ability to be connected to and trace the source of their clean energy choices.
During 2023, 2022, and 2021, our nuclear generating facilities achieved capacity factors (a) of 94.4%, 94.8%, and 94.5%, respectively, at ownership percentage. The nuclear capacity factor has been approximately four percentage points better than the industry average annually since 2013.
During 2024, 2023, and 2022, our nuclear generating facilities achieved capacity factors (a) of 94.6%, 94.4%, and 94.8%, respectively, at ownership percentage. The nuclear capacity factor has been approximately four percentage points better than the industry average annually since 2013.
Factors having an adverse effect on Dispatch Match include forced outages, derates, and failure to operate to the desired generation signal. Beginning in 2023, Dispatch Match reflects a change to remove the Conowingo run-of-river hydroelectric operational performance. Prior year Dispatch Match for 2022 and 2021 was previously reported as 98.4% and 72.4%, respectively.
Factors having an adverse effect on Dispatch Match include forced outages, derates, and failure to operate to the desired generation signal. Beginning in 2023, Dispatch Match reflects a change to remove the Conowingo run-of-river hydroelectric operational performance. Dispatch Match for 2022 was previously reported as 98.4%.
We work to continuously expand the knowledge and skills of our workforce through formal assessments, feedback, coaching, mentoring, training, leadership development programs and targeted developmental experiences. Well-Being and Benefits We help our employees maintain and improve their overall well-being, and we offer a wide range of benefits that support physical, mental, financial, and family health.
We work to continuously enhance the knowledge and skills of our workforce through formal assessments, feedback, coaching, mentoring, training, leadership development programs and development programs. Well-Being and Benefits We help our employees maintain and improve their overall well-being, and we offer a wide range of benefits that support physical, mental, financial, and family health.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources; Critical Accounting Policies and Estimates, Nuclear Decommissioning Asset Retirement Obligations; and Note 3 — Regulatory Matters, Note 10 — Asset Retirement Obligations, and Note 18 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial statements for additional information regarding our NDT funds and decommissioning obligations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Liquidity and Capital Resources; Critical Accounting Policies and Estimates — Nuclear Decommissioning Asset Retirement Obligations; and Note 10 — Asset Retirement Obligations and Note 17 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial statements for additional information regarding our NDT funds and decommissioning obligations.
Retail customer renewal rates have been strong over the last seven years across C&I power customer groups, with average contract terms of approximately two years and customer duration of approximately six years, with many customers well beyond these metrics.
Retail customer renewal rates have been strong over the last nine years across C&I power customer groups with average contract terms of approximately two years and customer duration of approximately five years, with many customers well beyond these metrics.
Adaptation risk refers to risks to our facilities or operations that may result from changes in the physical climate, such as changes to temperatures, weather patterns and sea level rise. See ITEM 1A.
Adaptation risk refers to risks to our facilities or operations that may result from changes in the physical climate, such as changes to temperatures, weather patterns, and sea level rise. See ITEM 1A. RISK FACTORS for additional information.
We are focused on optimizing cash returns through a disciplined approach to safe and efficient operations and cost management, underpinned by stable and durable margins from our customer-facing businesses and coupled with distinct payments to our generation plants for the clean energy attributes.
We focus on optimizing cash returns through a disciplined approach to safe and efficient operations and cost management, underpinned by stable and durable margins from our customer-facing business and coupled with distinct payments to our generation plants for the clean energy attributes.
We achieved an average refueling outage duration of 21 and 22 days in 2022 and 2021, respectively, against industry averages of 40 and 32 days, respectively. We manage our scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable supply position for our wholesale and retail power marketing activities.
We achieved an average refueling outage duration of 21 days in both 2023 and 2022, respectively, against industry averages of 38 and 40 days, respectively. We manage our scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable supply position for our wholesale and retail power marketing activities.
We conducted an employee engagement survey at the end of 2022 to gain insight into engagement and job satisfaction within our workforce and will use it and future surveys to help identify our successes and opportunities for growth. The survey results are shared with leaders at all levels and they are also part of action planning to increase engagement.
We conducted an employee engagement survey during 2024 to gain insight into engagement and job satisfaction within our workforce. We will use this and future surveys to help identify our successes and opportunities for growth. The survey results are shared with leaders at all levels and they are also part of action planning to increase engagement.
We have submitted the NPDES/SPDES renewal timely for all of our owned and operated nuclear stations. Five of the twelve stations have been deemed compliant with the 316(b) rule using existing technology.
We have submitted the NPDES/SPDES renewal timely for all our owned and operated nuclear stations. Six of the twelve stations we operate and STP have been deemed compliant with the 316(b) rule using existing technology.
High customer satisfaction levels, market expertise, stability and scale drive growth and result in historically proven business with consistent margins. While providing customers with the best possible price is a key focus, we leverage our broad suite of electric and gas product structures, oftentimes customized, to provide customers with the commodity solution and information that best fits their needs.
High customer satisfaction levels, market expertise, stability, and scale driven growth have resulted in a historically proven business with consistent margins. While providing customers with a competitive price is a key focus, we leverage our broad suite of electric and gas product structures, oftentimes customized, to provide customers with the commodity solution and information that best fits their needs.
We may pursue growth opportunities that optimize our core business or expand upon our strengths, including, but not limited to the following: • Opportunistic carbon-free energy acquisitions, particularly nuclear plants with supportive policy, • Create new value from the existing fleet through nuclear uprates, repowering of renewables, co-location of customer load (including hydrogen with supportive policy), and other opportunities, • Grow sustainability solutions for our customers focused on clean energy, efficiency, storage and electrification; help our C&I customers develop and meet sustainability targets, • Engagement with the technology and innovation ecosystem through continued partnerships with national labs, universities, startups, and research institutions, and • Continue to monitor opportunities to participate in advanced nuclear to maintain our leadership position as stewards of a carbon-free energy future.
We may pursue growth opportunities that optimize our core business or expand upon our strengths, including, but not limited to the following: • Opportunistic energy acquisitions with a focus on reliability, • Create new value from the existing fleet through nuclear uprates and license extensions, repowering of renewables, co-location of data centers, production of clean hydrogen, and other opportunities, • Grow sustainability solutions for our customers focused on clean energy, efficiency, storage and electrification; help our C&I customers develop and meet sustainability targets, • Engagement with the technology and innovation ecosystem through continued partnerships with national labs, universities, startups, and research institutions, and • Continue to monitor opportunities to participate in advanced nuclear to maintain our leadership position as stewards of a carbon-free energy future.
In addition to the owned generation above, we also had purchased power from the spot energy markets that are administered by the RTOs/ISOs and bilateral transactions of 67,215 GWhs and 70,682 GWhs for the years ended December 31, 2023 and 2022, respectively. See ITEM 7.
In addition to the owned generation above, we also had purchased power from the spot energy markets that are administered by the RTOs/ISOs and bilateral transactions of 60,983 GWhs and 67,215 GWhs for the years ended December 31, 2024 and 2023, respectively. See ITEM 7.
We also maintain business interruption insurance for our renewable projects, but not for our other generating stations unless required by contract or financing agreements. We are self-insured to the extent that any losses may exceed the amount of insurance maintained or are within the policy deductible for our insured losses. See ITEM 2.
We also maintain business interruption insurance for certain of our renewable assets, but not for our other generating stations unless required by contract or financing agreements. We are self-insured to the extent that any losses may exceed the amount of insurance maintained or are within the policy deductible for our insured losses.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information on electric supply sources. 8 Table of Contents Nuclear Facilities Our nuclear fleet is the nation’s largest, with current generating capacity of approximately 22 GWs; it produced 174 TWhs of zero-emissions electricity during 2023 – enough to power 16 million homes and avoid more than 123 million metric tons of carbon emissions according to the EPA GHG Equivalencies Calculator.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information on electric supply sources. 8 Table of Contents Nuclear Facilities Our nuclear fleet is the nation’s largest, with current generating capacity of approximately 22 GWs, producing 182 TWhs of zero-emissions electricity during 2024 – enough to power 16 million homes and avoid more than 122 million metric tons of carbon emissions according to the EPA GHG Equivalencies Calculator.
Prior year Renewable Energy Capture for 2022 and 2021 was previously reported as 95.8% and 95.7%, respectively. 11 Table of Contents Contracted Generation In addition to energy produced by owned generation assets, we source electricity from generators we do not own under long-term contracts.
Renewable Energy Capture for 2022 was previously reported as 95.8%. 11 Table of Contents Contracted Generation In addition to energy produced by owned generation assets, we source electricity from generators we do not own under long-term contracts.
Our Scope 1 and 2 market-based GHG emissions in 2022 were 9.2 million metric tons carbon dioxide equivalent, of which 8.6 million metric tons were from our natural gas and oil fueled generation fleet, significantly less than our peers with similar volume of power generation.
Our Scope 1 and 2 market-based GHG emissions in 2023 were 10 million metric tons carbon dioxide equivalent, of which 9.3 million metric tons were from our natural gas and oil-fueled generation fleet, significantly less than our peers with similar volume of power generation.
As of December 31, 2023, we wholly own all our nuclear generating stations, except for undivided ownership interests in five jointly owned nuclear stations: Quad Cities (75% ownership), Peach Bottom (50% ownership), Salem (42.59% ownership), Nine Mile Point Unit 2 (82% ownership), and STP 44% ownership), that are included in our consolidated financial statements relative to our proportionate ownership interest in each unit.
As of December 31, 2024, we wholly own all our nuclear generating stations, except for undivided ownership interests in five jointly-owned nuclear stations: Quad Cities (75% ownership), Peach Bottom (50% ownership), Salem (42.59% ownership), NMP Unit 2 (82% ownership), and STP (44% ownership), that are reflected in our consolidated financial statements relative to our proportionate ownership interest in each unit.
Capacity factors, which are significantly affected by the number and duration of refueling and non-refueling outages, can have a significant impact on our results of operations. In 2023, we achieved an average refueling outage duration of 21 days for units we operate.
Capacity factors, which are significantly affected by the number and duration of refueling and non-refueling outages, can have a material impact on our results of operations. In 2024, we achieved an average refueling outage duration of 19 days for units we operate.
The pattern of this fluctuation may change depending on the type and location of the facilities owned, the wholesale and retail load served and the terms of contracts to purchase or sell electricity. See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information.
The pattern of this fluctuation may change depending on the type and location of the facilities owned, the wholesale and retail load served and the terms of contracts to purchase or sell electricity. See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information. Weather can also impact our operating conditions.
See ITEM 2. PROPERTIES for additional information regarding these generating facilities and Note 22 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding CRP, which is a VIE.
PROPERTIES for additional information regarding these generating facilities and Note 21 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information regarding CRP, which is a VIE.
As of December 31, 2023, we have established appropriate contingent liabilities for environmental remediation requirements. In addition, we may be required to make significant additional expenditures not presently determinable for other environmental remediation costs.
We have established appropriate contingent liabilities for environmental remediation requirements. In addition, we may be required to make significant additional expenditures not presently determinable for other environmental remediation costs.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information. 9 Table of Contents The following table summarizes the current license expiration dates for our nuclear facilities currently in service: Station Unit In-Service Date (a) Current License Expiration Braidwood 1 1988 2046 2 1988 2047 Byron 1 1985 2044 2 1987 2046 Calvert Cliffs 1 1975 2034 2 1977 2036 Clinton (b) 1 1987 2027 Dresden (b) 2 1970 2029 3 1971 2031 FitzPatrick 1 1975 2034 LaSalle 1 1984 2042 2 1984 2043 Limerick 1 1986 2044 2 1990 2049 Nine Mile Point (b) 1 1969 2029 2 1988 2046 Peach Bottom (c) 2 1974 2033 3 1974 2034 Quad Cities 1 1973 2032 2 1973 2032 Ginna (b) 1 1970 2029 Salem 1 1977 2036 2 1981 2040 STP 1 1988 2047 2 1989 2048 __________ (a) Denotes year in which nuclear unit began commercial operations.
The following table summarizes the current license expiration dates for our nuclear facilities currently in service: Station Unit In-Service Date (a) Current License Expiration Braidwood 1 1988 2046 2 1988 2047 Byron 1 1985 2044 2 1987 2046 Calvert Cliffs 1 1975 2034 2 1977 2036 Clinton (b) 1 1987 2027 Dresden (b) 2 1970 2029 3 1971 2031 FitzPatrick 1 1975 2034 LaSalle 1 1984 2042 2 1984 2043 Limerick 1 1986 2044 2 1990 2049 NMP 1 1969 2029 2 1988 2046 Peach Bottom (c) 2 1974 2033 3 1974 2034 Quad Cities 1 1973 2032 2 1973 2032 Ginna 1 1970 2029 Salem 1 1977 2036 2 1981 2040 STP 1 1988 2047 2 1989 2048 __________ (a) Denotes year in which nuclear unit began commercial operations.
We currently have enough storage capacity to store all Class B and Class C LLRW for the duration of both current and subsequent license periods for of all the stations in our nuclear fleet and, we continue to pursue alternative disposal strategies for LLRW, including an LLRW reduction program to minimize on-site storage and cost impacts.
We currently have enough storage capacity to store all Class B and Class C LLRW for the duration of both current and subsequent license periods for of all the stations in our nuclear fleet and, we continue to pursue alternative disposal strategies for LLRW, including an LLRW reduction program to minimize on-site storage and cost impacts. 24 Table of Contents Employees Engaged Workforce Our employees are our greatest strength.
We partner with our customers to provide options along the sustainability continuum, including renewable, efficiency and digital solutions to meet their carbon-free energy goals. Our energy efficiency products provide the ability to optimize performance and maximize efficiency across customer facilities and operations through contract structures that include implementation of energy efficiency upgrades with no upfront capital requirements.
We also partner with our customers to provide energy efficiency options to meet their carbon-free energy goals. Our energy efficiency products provide the ability to optimize performance and maximize efficiency across customer facilities and operations through contract structures that include implementation of energy efficiency upgrades and behind-the-meter solutions with no upfront capital requirements.
Specifically, we enjoyed renewal rates of 75% for C&I power customers and 90% for C&I gas customers in 2023, owing to both our competitive pricing as well as our strong customer relationships.
Specifically, we enjoyed renewal rates of 78% for C&I power customers and 88% for C&I gas customers in 2024, owing to both our competitive pricing as well as our strong customer relationships.
We work toward this objective by sourcing and developing a diverse talent pipeline and cultivating an inclusive and respectful culture where all individuals can develop to reach their full potential. Through our talent acquisition strategy, we work with universities and organizations to attract and recruit STEM-focused students and professionals from diverse backgrounds.
We work toward this objective by sourcing from and developing a broad talent pipeline and cultivating an inclusive and respectful culture where all individuals can develop to reach their full potential. In 2024, we hired over 1,400 employees. Through our talent acquisition strategy, we work with universities and organizations to attract and recruit STEM-focused students and professionals.
Continuing innovation in the digitization of the broader economy will facilitate greater control and opportunities for customers and businesses to more frequently engage with their energy providers and become more knowledgeable of their energy choices, including the solutions we provide. Employees Engaged Workforce Our employees are our greatest assets.
Continuing innovation in the digitization of the broader economy will facilitate greater control and opportunities for customers and businesses to more frequently engage with their energy providers and become more knowledgeable of their energy choices, including the products and solutions we provide.
We currently are subject to, and may become subject to additional, federal and/or state legislation and/or regulations addressing GHG emissions. We are deliberately positioned as a low-carbon generation company. We have minimized GHG emitting assets in our portfolio and maximized carbon-free electric production in support of achieving economy-wide GHG emissions reduction goals.
GHG Mitigation and Transition We currently are subject to, and may become subject to additional, federal and/or state legislation and/or regulations addressing GHG emissions. We are deliberately positioned as a low-carbon generation company. We have minimized GHG emitting assets in our portfolio and maximized carbon-free electric production.
On-site dry cask storage in concert with on-site storage pools will be capable of meeting all current and future SNF storage requirements at each of our sites for the duration of both current and subsequent license periods of all stations and through decommissioning.
On-site dry cask storage in concert with on-site storage pools can meet all current and future SNF storage requirements at each of our sites, including Crane, for the duration of both current and subsequent license periods of all stations and through decommissioning.
Through our integrated business operations, we sell electricity, natural gas, and other energy-related products and sustainable solutions to various types of customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, public sector, and residential customers in markets across multiple geographic regions.
Through our integrated business operations, we sell electricity, natural gas, and other energy-related products and sustainable solutions to various types of customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, public sector, and residential customers in markets across multiple geographic regions. We serve approximately 1.5 million total customers, including three-fourths of Fortune 100 companies, and approximately 1.2 million residential customers.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Critical Accounting Policies and Estimates and Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative financial instruments. Seasonality Our operations are affected by weather, which affects demand for electricity and natural gas, as well as operating conditions.
See ITEM 1A. RISK FACTORS, ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Critical Accounting Policies and Estimates and Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative financial instruments. Seasonality Our operations are affected by weather, which affects demand for electricity and natural gas.
Such statutes apply in many states where we currently own or operate, or previously owned or operated facilities, including Illinois, Maryland, New Jersey, Pennsylvania, New York, and Texas. In addition, RCRA governs treatment, storage and disposal of solid and hazardous wastes and cleanup of sites where such activities were conducted.
Such statutes apply in many states where we currently own or operate, or previously owned or operated facilities. In addition, RCRA governs treatment, storage, and disposal of solid and hazardous waste and cleanup of sites where such activities were conducted.
Collectively, the combined fleet is nearly 90% carbon-free (based on generation output of electricity) and is the third largest generation portfolio in the U.S. in terms of total generation with meaningful geographic diversity, according to the 2023 Ceres Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States. 6 Table of Contents At December 31, 2023, our owned generating resources total capacity of 33,094 MWs consisted of the following: __________ (a) Net generation capacity is stated at proportionate ownership share.
Collectively, the combined fleet is the cleanest large generation portfolio in the country (nearly 90% carbon-free based on generation output of electricity) according to the 2024 Ceres Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States. 6 Table of Contents At December 31, 2024, our owned generating resources total capacity of 31,676 MWs consisted of the following: __________ (a) Net generation capacity is stated at proportionate ownership share.
See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on these dispositions. __________ (a) Dispatch Match is used to measure the responsiveness of a unit to the market, expressed as the total actual energy revenue net of fuel cost relative to the total desired energy revenue net of fuel cost.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the status of Conowingo's license. __________ (a) Dispatch Match is used to measure the responsiveness of a unit to the market, expressed as the total actual energy revenue net of fuel cost relative to the total desired energy revenue net of fuel cost.
We provide opportunities for company-sponsored volunteerism and charitable matching gifts programs. Our employees donated $5.1 million to non-profit organizations and provided just over 102,000 volunteer hours in 2023. Next Generation of Talent We aim to attract, retain and advance a world-class workforce that effectively serves our customers and communities.
We provide opportunities for company-sponsored volunteerism and charitable matching gifts programs. Our employees donated more than $5.3 million to non-profit organizations of their choice and provided more than 116,500 volunteer service hours in 2024. Next Generation of Talent We aim to attract, retain and advance a world-class workforce that effectively serves our customers and communities.
Our generation fleet of nuclear, hydro, wind, and solar generation facilities has the generating capacity to power the equivalent of 16 million homes, producing about 10 percent of the carbon-free energy in the United States.
Our nuclear, hydro, wind, and solar generation facilities have the generating capacity to power the equivalent of 16 million homes, providing about 10 percent of the nation's clean energy in the United States.
See ITEM 2. PROPERTIES for additional information. The following table shows our total owned sources of electric supply of 202,474 GWhs and 200,962 GWhs for 2023 and 2022, respectively: _________ (a) Includes the proportionate share of output where we have an undivided ownership interest in jointly-owned generating plants. (b) Includes wind, hydroelectric, and solar generating assets.
The following table shows our total owned sources of electric supply of 208,434 GWhs and 202,474 GWhs for 2024 and 2023, respectively, which includes the proportionate share of output where we have an undivided ownership interest in jointly-owned generating plants. _________ (a) Includes wind, hydroelectric, and solar generating assets.
Key drivers of increased demand for carbon-free energy include: • Governmental and corporate policies designed to accelerate the decarbonization of the economy, • Policy support for nuclear energy sources that also enable energy security, reliability and diversification, • Rapid electrification of the U.S. economy, and • Evolving customer preferences favoring clean energy, choice and digitization.
Key drivers of increased demand include: • Governmental and corporate policies designed to accelerate the decarbonization of the economy, • Policy support for nuclear energy sources that also enable energy security, reliability and diversification, • New technologies requiring reliable energy, and 18 Table of Contents • Evolving customer preferences favoring clean energy, choice and digitization.
This federal support builds on actions taken by states to recognize that existing nuclear generation facilities are essential to meeting policy objectives to reduce GHG emissions, with 10 states introducing bills in 2023 to add nuclear energy to clean energy targets and four of those states, including Connecticut, Michigan, North Carolina and Tennessee, finalizing such legislation.
Actions taken by states recognize that existing nuclear generation facilities are essential to meeting their policy objectives to reduce GHG emissions, with three states currently considering bills to add nuclear energy to clean energy targets and four states, including Connecticut, Michigan, North Carolina and Tennessee, finalizing such legislation since 2023.
The following tables summarize our long-term contracts to purchase unit-specific physical power with an original term in excess of one year in duration, by region, in effect as of December 31, 2023: Region Number of Agreements Expiration Dates Capacity (MWs) Mid-Atlantic 8 2024 - 2035 319 Midwest 3 2026 - 2032 351 ERCOT 7 2025 - 2035 981 Other Power Regions 16 2024 - 2037 2,452 Total 34 4,103 2024 2025 2026 2027 2028 Thereafter Total Capacity Expiring (MW) 101 501 398 5 58 3,040 4,103 Customer-Facing Business We are one of the nation’s largest energy suppliers.
The following tables summarize our long-term contracts to purchase unit-specific physical power with an original term in excess of one year in duration, by region, in effect as of December 31, 2024: Region Number of Agreements Expiration Dates Capacity (MWs) Mid-Atlantic 17 2025 - 2039 446 Midwest 7 2026 - 2044 805 ERCOT 8 2025 - 2035 1,121 Other Power Regions 16 2025 - 2037 2,402 Total 48 4,774 2025 2026 2027 2028 2029 2030 and thereafter Total Capacity Expiring (MWs) 501 398 5 75 98 3,697 4,774 Customer-Facing Business We are one of the nation’s largest energy suppliers.
Peach Bottom has previously received a second 20-year license renewal from the NRC for Units 2 and 3, for a total 80-year term.
PSEG and STPNOC have also received 20-year operating license renewals for the Salem and STP units, respectively. Peach Bottom has previously received a second 20-year license renewal from the NRC for Units 2 and 3, for a total 80-year term.
Energy Information Administration, 36 states and the District of Columbia, inc l uding most of the states where we operate, have adopted some form of renewable or clean energy procurement requirement. Of these 36 states, eight states have non-enforceable 24 Table of Contents renewable energy goals.
Energy Information Administration, 35 states and the District of Columbia, including most of the states where we operate, have adopted some form of renewable or clean energy procurement requirement. Of these 35 states, seven states have non-enforceable renewable energy goals.
We may pursue future growth opportunities that provide additional value building on our core businesses, or expanding our competitive advantages. We are committed to maintaining a strong balance sheet, returning value to our shareholders, and investing in clean energy and sustainable solutions.
We may pursue future growth opportunities that provide additional value building on our core businesses, or expanding our competitive advantages. We are committed to maintaining a strong balance sheet, returning value to our shareholders, and investing in energy and sustainable solutions to meet customer needs. The demand for reliable, carbon-free energy and sustainability solutions continues to grow across the country.
In addition to larger-scale CORe+ offerings and Hourly CFE, we offer a range of sustainability solutions to customers (e.g., RECs, CORe, EFECs, RINs, RNG, carbon offsets, etc.) to support their energy needs during the transition to a carbon-free energy ecosystem. 14 Table of Contents In addition to sustainability solutions, data and analytics have also become increasingly important for our customers.
In addition to larger-scale CORe+ offerings and Hourly CFE, we offer a range of sustainability solutions to customers (e.g., RECs, CORe+, EFECs, RINs, RNG, carbon offsets, etc.) as well as offers for carbon-free generation attributes to support their needs during the transition to a carbon-free energy ecosystem.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOne or both events could adversely affect available liquidity and, in the case of a rating downgrade, borrowing and credit support costs. 35 Table of Contents See ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources – Credit Matters and Cash Requirements – Security Ratings and Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding the potential impacts of credit downgrades on our cash flows.
Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources – Credit Matters and Cash Requirements – Security Ratings and Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding the potential impacts of credit downgrades on our cash flows. 29 Table of Contents If we fail to meet project-specific financing agreement requirements, we could experience an impairment or loss of the financed project.
The impacts of significant economic downturns on our retail customers, such as less demand for products and services provided by C&I customers, could result in an increase in the number of uncollectible customer balances and related expense. See ITEM 7A.
The impacts of significant economic downturns on our retail customers, such as less demand for the products and services provided by our C&I customers, could result in an increase in the number of uncollectible customer balances and related expense. See ITEM 7A.
Actual costs to decommission our nuclear facilities may substantially exceed our estimates as a result of changes in the approach and timing of decommissioning activities, changes in decommissioning costs, changes in federal or state regulatory requirements, other changes in our estimates or ability to effectively execute on our planned decommissioning activities.
Actual costs to decommission our nuclear facilities may substantially exceed our estimates as a result of changes in the approach and timing of decommissioning activities, changes in decommissioning costs, changes in federal or state regulatory requirements, other changes in our estimates or our ability to effectively execute on planned decommissioning activities.
Coordinated physical and or cyber attacks that disrupt multiple key electric assets of unaffiliated parties responsible for real-time planning and management of the bulk electric system which could impact our ability to provide generation potentially resulting in localized and regional blackouts affecting third parties and the public, many of which will have no direct commercial relationship with the Company.
Coordinated physical and or cyber-attacks that disrupt multiple key electric assets of unaffiliated parties responsible for real-time planning and management of the bulk electric system could impact our ability to provide generation, potentially resulting in localized and regional blackouts affecting third parties and the public, many of which will have no direct commercial relationship with the Company.
Failure to meet those arrangements could give rise to a project-specific financing default which, if not cured or waived, could result in the specific project being required to repay the associated debt or other borrowings earlier than otherwise anticipated, and if such repayment were not made, the lenders or security holders would generally have broad remedies, including rights to foreclose against the project assets and related collateral or to force our subsidiaries in the project-specific financings to enter into bankruptcy proceedings.
Failure to meet those arrangements could give rise to a project-specific financing default which, if not cured or waived, could result in the specific project being required to repay the associated debt or other borrowings earlier than otherwise anticipated, and if such repayment were not made, the lenders or security holders would generally have broad remedies, including rights to foreclose against the project assets and related collateral or to force our subsidiaries in the project-specific financings to enter bankruptcy proceedings.
Climate change projections suggest increases to summer temperature and humidity trends, as well as more erratic precipitation and storm patterns over the long term in the areas where we have generation assets. The frequency in which weather conditions emerge outside the current expected climate norms could contribute to the weather-related impacts discussed above.
Weather projections suggest increases to summer temperature and humidity trends, as well as more erratic precipitation and storm patterns over the long term in the areas where we have generation assets. The frequency in which weather conditions emerge outside the current expected climate norms could contribute to the weather-related impacts discussed above.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Critical Accounting Policies and Estimates, Note 1 — Basis of Presentation, Note 8 — Property, Plant, and Equipment, Note 12 — Asset Impairments, and Note 13 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional information on long-lived asset impairments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Critical Accounting Policies and Estimates, Note 1 — Basis of Presentation, Note 8 — Property, Plant, and Equipment, and Note 12 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional information on long-lived asset impairments.
Furthermore, if a significant security breach were to occur, our reputation could be negatively affected, customer confidence in us or others in the industry could be diminished, or we could be subject to legal claims, loss of revenues, increased costs, regulatory penalties, or operational shutdown.
If a significant security breach were to occur, our reputation could be negatively affected, customer confidence in us or others in the industry could be diminished, or we could be subject to legal claims, loss of revenues, increased costs, regulatory penalties, or operational shutdown.
BUSINESS – Price and Supply Risk Management and See ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information on the nuclear fuel cycle and procurement. Demand and Supply. The market price for electricity is also affected by changes in the demand for electricity and the available supply of electricity.
BUSINESS – Price and Supply Risk Management and ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information on the nuclear fuel cycle and procurement. Demand and Supply. The market price for electricity is also affected by changes in the demand for electricity and the available supply of electricity.
While we have not experienced a material breach or disruption to our network or information systems or our operations to date, future attacks may negatively impact our business, reputation, or financial results.
While we have not experienced a material breach or disruption to our network or information systems or our operations to date, future attacks or reliability may negatively impact our business, reputation, or financial results.
Also, we are currently involved in several proceedings relating to sites where hazardous substances have been deposited and could be subject to additional proceedings in the future. See ITEM 1. BUSINESS – Environmental Matters and Regulation and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.
Also, we are currently involved in several proceedings relating to sites where hazardous substances have been deposited and could be subject to additional proceedings in the future. See ITEM 1. BUSINESS – Environmental Matters and Regulation and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.
The cycle of production and utilization of nuclear fuel is complex, and we engage a diverse set of suppliers to ensure we can secure the nuclear fuel needed to continue to operate our nuclear fleet long-term. Non-performance by these suppliers could have a material adverse impact on our consolidated financial statements. See ITEM 1.
The cycle of production and utilization of nuclear fuel is complex, and we engage a diverse set of suppliers to secure the nuclear fuel needed to continue to operate our nuclear fleet long-term. Non-performance by these suppliers could have a material adverse impact on our consolidated financial statements. See ITEM 1.
Adverse outcomes in these proceedings could require significant expenditures, result in lost revenue, or restrict existing business activities. We could be subject to adverse publicity and reputational risks, which make us vulnerable to negative customer perception and could lead to increased regulatory oversight or other consequences. We could be the subject of public criticism.
Adverse outcomes in these proceedings could require significant expenditures, result in loss of revenue, or restrict existing business activities. We could be subject to adverse publicity and reputational risks, which make us vulnerable to negative customer perception and could lead to increased regulatory oversight or other consequences. We could be the subject of public criticism.
These judgments include reserves established for potential adverse outcomes regarding tax positions that have been taken that could be subject to challenge by the tax authorities. See Note 1 — Basis of Presentation and Note 14 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information.
These judgments include reserves established for potential adverse outcomes regarding tax positions that have been taken that could be subject to challenge by the tax authorities. See Note 1 — Basis of Presentation and Note 13 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information.
The impact of bankruptcy could result in the impairment of certain project assets. See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. Our risk management policies cannot fully eliminate the risk associated with our commodity trading activities.
The impact of bankruptcy could result in the impairment of certain project assets. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. Our risk management policies cannot fully eliminate the risk associated with our commodity trading activities.
Legal proceedings could result in a negative outcome, which we cannot predict. We are involved in legal proceedings, claims and litigation arising from our business operations. Our material legal proceedings, claims and litigation are summarized in Note 3 — Regulatory Matters and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.
Legal proceedings could result in a negative outcome, which we cannot predict. We are involved in legal proceedings, claims, and litigation arising from our business operations. Our material legal proceedings, claims, and litigation are summarized in Note 3 — Regulatory Matters and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.
Such initiatives could involve significant risks and uncertainties, including distraction of 44 Table of Contents management from current operations, inadequate return on capital, and unidentified issues not discovered during diligence performed prior to launching an initiative or entering a market. Additionally, it is possible that FERC, state public utility commissions or others could impose certain other restrictions on such transactions.
Such initiatives could involve significant risks and uncertainties, including distraction of management from current operations, inadequate return on capital, and unidentified issues not discovered during diligence performed prior to launching an initiative or entering a market. Additionally, it is possible that FERC, state public utility commissions, or others could impose certain other restrictions on such transactions.
See Note 10 — Asset Retirement Obligations and Note 15 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information. We could be negatively affected by unstable capital and credit markets and increased volatility in commodity markets.
See Note 10 — Asset Retirement Obligations and Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information. We could be negatively affected by unstable capital and credit markets and increased volatility in commodity markets.
Thus, the market price of power is affected by the market price of the marginal fuel used to generate the electricity unit. Cost and Availability of Fuel. We depend on nuclear fuel, natural gas and oil to operate most of our generating facilities.
Thus, the market price of power is affected by the market price of the marginal fuel, in particular the price of natural gas, used to generate the electricity unit. Cost and Availability of Fuel. We depend on nuclear fuel, natural gas, and oil to operate most of our generating facilities.
Our future results of operations are impacted by (1) FERC’s and PJM's level of support for policies that favor the preservation of competitive wholesale power markets and recognize the value of carbon-free electricity and resiliency and for states' energy objectives and policies and (2) the absence of material changes to market structures that would limit or otherwise negatively affect us.
Our future results of operations are impacted by (1) FERC’s and PJM's level of support for policies that favor the preservation of competitive wholesale power markets, recognize the value of emissions-free electricity and resiliency, complement states' energy objectives and policies and (2) the absence of material changes to market structures that would limit or otherwise negatively affect us.
We also periodically perform analyses of potential pathways to reduce power sector and economy-wide GHG emissions to mitigate climate change. To the extent additional GHG reduction regulation or legislation becomes 40 Table of Contents effective at the federal and/or state levels, we could incur costs to further limit the GHG emissions from our operations or otherwise comply with applicable requirements.
We also periodically perform analyses of potential pathways to reduce power sector and economy-wide GHG emissions to mitigate climate change. To the extent additional GHG reduction regulation or legislation becomes effective at the federal and/or state levels, we could incur costs to further limit the GHG emissions from our operations or otherwise comply with applicable requirements.
See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information. We are subject to evolving physical security and cybersecurity risks. Threat actors continue to seek to exploit potential vulnerabilities in the energy sector associated with protection of sensitive and confidential information, grid infrastructure and other energy infrastructures.
See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information. We are subject to evolving physical security, cybersecurity, and third-party reliability risks. Threat actors continue to seek to exploit potential vulnerabilities in the energy sector associated with protection of sensitive and confidential information, grid infrastructure, and other energy infrastructures.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding the license renewal for the Conowingo hydroelectric project. We could be negatively affected by challenges to tax positions taken, tax law changes and the inherent difficulty in quantifying potential tax effects of business decisions.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding the license renewal for the Conowingo hydroelectric project. 33 Table of Contents We could be negatively affected by challenges to tax positions taken, tax law changes and the inherent difficulty in quantifying potential tax effects of business decisions.
Consequently, we may be subject to short- and long-term interruptions, delays and outages in service and availability due to third-party cybersecurity incidents that are outside of our direct control.
Consequently, we may be subject to short- and long-term interruptions, delays and outages in service and availability due to third-party cybersecurity or reliability incidents that are outside of our direct control.
In the spot markets, we are exposed to risk as a result of default sharing 37 Table of Contents mechanisms that exist within certain markets, primarily RTOs and ISOs. We are also a party to agreements with entities in the energy sector that have experienced rating downgrades or other financial difficulties.
In the spot markets, we are exposed to risk as a result of default sharing mechanisms that exist within certain markets, primarily RTOs and ISOs. We are also a party to agreements with entities in the energy sector that have experienced rating downgrades or other financial difficulties.
Our nuclear operations produce various types of nuclear waste materials, including SNF. The approval of a national repository for the storage of SNF and the timing of that facility opening, 38 Table of Contents will significantly affect the costs associated with storage of SNF and the ultimate amounts received from the DOE to reimburse us for these costs.
Our nuclear operations produce various types of nuclear waste materials, including SNF. The approval of a national repository for the storage of SNF and the timing of that facility opening will significantly affect the costs associated with storage of SNF and the ultimate amounts received from the DOE to reimburse us for these costs.
Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent actions by our employees, third-party service providers or their personnel or other parties. Our customers depend on the 42 Table of Contents continuous availability of our commercial and generation operations.
Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent actions by our employees, third-party service providers or their personnel or other parties. Our customers depend on the continuous availability of our commercial and generation operations.
Risks Related to Market and Financial Factors We are exposed to price volatility associated with both the wholesale and retail power markets and the procurement of nuclear fuel, natural gas and oil. 33 Table of Contents We are exposed to commodity price risk for natural gas and the unhedged portion of our generation portfolio.
Risks Related to Market and Financial Factors We are exposed to price volatility associated with both the wholesale and retail power markets and the procurement of nuclear fuel, natural gas, and oil. We are exposed to commodity price risk for natural gas and the unhedged portion of our generation portfolio.
The existence of inflation in the economy has resulted in, or may result in, higher interest rates and capital costs, increased costs of labor, and other similar effects. If inflation rates continue to rise or remain elevated for a sustained period, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.
The existence of inflation in the economy has resulted in, or may result in, higher interest rates and capital costs, increased costs of labor, and other similar effects. If inflation rates rise or become elevated for a sustained period, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.
In addition, natural disasters could affect the availability of a secure and economical supply of water in some locations, which is essential for our continued operation, particularly the cooling of generating units.
In addition, natural disasters could affect the availability of a secure and economical supply of water in some locations, which is essential for our continued operation, particularly the cooling of 37 Table of Contents generating units.
See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information. We could be subject to higher costs and/or penalties related to mandatory reliability standards. We, as a user of the bulk power transmission system, are subject to mandatory reliability standards promulgated by NERC and enforced by FERC.
See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information. 32 Table of Contents We could be subject to higher costs and/or penalties related to mandatory reliability standards. We, as a user of the bulk power transmission system, are subject to mandatory reliability standards promulgated by NERC and enforced by FERC.
We have recourse to collect additional amounts from utility customers through PECO (subject to certain limitations and thresholds) for former PECO units and through CenterPoint Energy Houston Electric and AEP Texas for STP units.
We have recourse to collect additional amounts from utility customers through PECO (subject to certain limitations and thresholds) for former PECO units and through CenterPoint and AEP Texas for STP units.
Unfavorable economic conditions, milder than normal weather, and the growth of energy efficiency and demand response programs can depress demand. In addition, in some markets, the supply of electricity can exceed demand during some hours of the day, resulting in loss of revenue for base-load generating plants such as our nuclear plants.
Unfavorable economic conditions, milder than normal weather, and the growth of energy efficiency and demand response programs can depress demand. In addition, in some markets, the supply of electricity can exceed demand during some hours of the day, resulting in loss of revenue for baseload generating plants such as our nuclear plants. Retail Competition.
The PTC benefiting existing nuclear plants included in the IRA (starting January 1, 2024) continues to be the subject of additional guidance issued from the U.S. Treasury and IRS, which may negatively impact the amount of benefits we ultimately receive with respect to some of our units.
The PTC benefiting existing nuclear plants included in the IRA (starting January 1, 2024) continues to be the subject of additional guidance issued from the U.S. Treasury and IRS, which may negatively impact the amount of benefits we ultimately receive.
Similar 39 Table of Contents effects could result from a change in the Federal Power Act or the applicable regulations due to events at hydroelectric facilities owned by others, as well as those owned by us.
Similar effects could result from a change in the Federal Power Act or the applicable regulations due to events at hydroelectric facilities owned by others, as well as those owned by us.
Congress could impose revenue-raising measures on the nuclear industry to pay claims exceeding the $16.2 billion limit for a single incident. 41 Table of Contents See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information of nuclear insurance. Decommissioning obligation and funding.
Congress could impose revenue-raising measures on the nuclear industry to pay claims exceeding the $16.3 billion limit for a single incident. See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information of nuclear insurance. 35 Table of Contents Decommissioning obligation and funding.
Operational harm could be in the form of impact to the operation of the generation fleet and/or reliability of the bulk electric system. Impacts to confidential or proprietary information could include inappropriate release of certain types of information, including critical infrastructure, sensitive customer, vendor and employee, trading, export control or other confidential information.
Operational harm could be in the form of impact to the generation fleet, our commercial operations, and/or reliability of the bulk 36 Table of Contents electric system. Impacts to confidential or proprietary information could include inappropriate release of certain types of information, including critical infrastructure, sensitive customer, vendor and employee, trading, export control or other confidential information.
In addition, we have exposure to worldwide financial markets, including Europe, Canada and Asia. Disruptions in these markets could reduce or restrict our ability to secure sufficient liquidity or secure liquidity at reasonable terms. As of December 31, 2023, approximately 37%, 12%, and 17% of our available credit facilities were with European, Canadian and Asian banks, respectively.
In addition, we have exposure to worldwide financial markets, including Europe, Canada, and Asia. Disruptions in these markets could reduce or restrict our ability to secure sufficient liquidity or secure liquidity at reasonable terms. As of December 31, 2024, approximately 35%, 11%, and 20% of our available credit facilities were with European, Canadian, and Asian banks, respectively.
We periodically perform analyses to better understand how climate change could affect our facilities and operations. We primarily operate in the Midwest, East Coast of the United States, and Texas areas that have historically been prone to various types of severe weather events, and as such we have well-developed response and recovery programs based on these historical events.
We periodically perform analyses to better understand how climate change could affect our facilities and operations. We primarily operate in the Midwest, Mid-Atlantic, Northeast, and Texas areas that have historically been prone to various types of severe weather events. As such, we have well-developed response and recovery programs based on historical weather events and patterns.
See Note 3 — Regulatory Matters and Note 7 — Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information. NRC actions could negatively affect the operations and profitability of our nuclear generating fleet. Regulatory Risk.
See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the nuclear PTC. NRC actions could negatively affect the operations and profitability of our nuclear generating fleet. Regulatory Risk.
Such risks, which could negatively affect our consolidated financial statements, fall primarily under the categories below: Risks related to market and financial factors primarily include: • the price of fuels, in particular the price of natural gas, which affects power prices, • the generation resources in the markets in which we operate, • the design of power markets, • our ability to operate our generating assets, • our ability to access capital markets, • the impacts of on-going competition, and • emerging technologies and business models, including those related to climate change mitigation and transition to a low-carbon economy.
Such risks, which could negatively affect our consolidated financial statements, fall primarily under the categories below: Risks related to market and financial factors primarily include: • the price and availability of fuels, • the generation resources in the markets in which we operate, • the design of power markets, • our ability to operate our generating assets, 26 Table of Contents • our ability to access capital markets, • the impacts of ongoing competition, and • emerging technologies and business models, including those related to climate change mitigation and transition to a low-carbon economy.
Risks related to operational factors primarily include: • changes in the global climate could produce extreme weather events, which could put our facilities at risk, and such changes could also affect the levels and patterns of demand for energy and related services, • the safe, secure and effective operation of our nuclear facilities and the ability to effectively manage the associated decommissioning obligations, and • physical and cybersecurity risks for us as an owner-operator of generation facilities and as a participant in commodities trading.
Risks related to operational factors primarily include: • changes in the global climate could produce extreme weather events, which could put our facilities at risk, and such changes could also affect the levels and patterns of demand for energy and related services, • the safe, secure and effective operation of our nuclear facilities and the ability to effectively manage the associated decommissioning obligations, • physical, cybersecurity, and third-party reliability risks for us as an owner-operator of generation facilities and as a participant in commodities trading, • ability to attract and retain an appropriately qualified workforce, and • acquisitions or investments in new business initiatives and new markets.
This could include opportunistic carbon-free energy acquisitions, creating new value from our existing fleet through nuclear uprates, renewable repowerings, co-location of customer load, growing sustainability solutions for our customers, and investment opportunities in other emerging technologies and innovation.
We could continue to pursue growth in our existing businesses and markets and further diversification across the competitive energy value chain. This could include opportunistic carbon-free energy acquisitions, creating new value from our existing fleet through nuclear uprates, renewable repowerings, co-location of customer load, growing sustainability solutions for our customers, and investment opportunities in other emerging technologies and innovation.
We have significant obligations in these areas and hold substantial assets in these trusts to meet those obligations. The asset values are subject to market fluctuations and will yield uncertain returns, which could fall below our projected return rates. A decline in the market value of the NDT fund investments could increase our funding requirements to decommission our nuclear plants.
The asset values are subject to market fluctuations and will yield uncertain returns, which could fall below our projected return rates. A decline in the market value of the NDT fund investments could increase our funding requirements to decommission our nuclear plants.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK and Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on our credit risk.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK and Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on our credit risk. We could be negatively affected by the impacts of weather.
To the extent such additional regulation or legislation does not become effective, the potential competitive advantage offered by our low-carbon emission profile may be reduced. See ITEM 1. BUSINESS – Environmental Matters and Regulation – Climate Change for additional information. Our financial performance could be negatively affected by matters arising from our ownership and operation of nuclear facilities.
To the extent such additional regulation or legislation does not become effective, the potential competitive advantage offered by our low-carbon emission profile may be reduced. 34 Table of Contents See ITEM 1. BUSINESS – Environmental Matters and Regulation – Climate for additional information.
See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information. Long-lived assets, goodwill, and other assets could become impaired. Long-lived assets – principally, generation assets – represent the single largest asset class on our Consolidated Balance Sheets. In addition, we have a material goodwill balance as of December 31, 2023.
Long-lived assets, goodwill, and other assets could become impaired. Long-lived assets – principally, generation assets – represent the single largest asset class on our Consolidated Balance Sheets. In addition, we have a material goodwill balance as of December 31, 2024.
Each of these factors could affect our consolidated financial statements through, among other things, reduced operating revenues, increased operating and maintenance expenses, increased capital 34 Table of Contents expenditures, and potential asset impairment charges or accelerated depreciation and decommissioning expenses over shortened remaining asset useful lives.
Each of these factors could affect our consolidated financial statements through, among other things, reduced operating revenues, increased operating and maintenance expenses, increased capital expenditures, and potential asset impairment charges or accelerated depreciation and decommissioning expenses over shortened remaining asset useful lives. 28 Table of Contents Market performance and other factors could decrease the value of our NDT funds and employee benefit plan assets, which then could require significant additional funding.
We are also subject to certain financial requirements under NRC regulations as a result of our operation of nuclear power plants that could require us to provide cash collateral or surety bonds if those requirements are not met.
We are also subject to certain financial requirements under NRC regulations as a result of our operation of nuclear power plants that could require us to provide cash collateral or surety bonds if those requirements are not met. One or both events could adversely affect available liquidity and, in the case of a rating downgrade, borrowing and credit support costs.
If we fail to meet project-specific financing agreement requirements, we could experience an impairment or loss of the financed project. We have project-specific financing arrangements and must meet the requirements of various agreements relating to those financings.
We have project-specific financing arrangements and must meet the requirements of various agreements relating to those financings.
Conversely, new demand sources such as electrification of transportation could increase demand and change demand patterns. Retail Competition. Our retail operations compete for customers in a competitive environment, which affects the margins we can earn and the volumes we are able to serve.
Our retail operations compete for customers in a competitive environment, which affects the margins we can earn and the volumes we are able to serve.
Natural disasters, war, acts and threats of terrorism, pandemic and other significant events could negatively impact our results of operations, ability to raise capital, and future growth. 43 Table of Contents Our fleet of power plants and the transmission infrastructure to which they are connected could be affected by natural disasters and extreme weather events, which could result in increased costs, including supply chain costs.
Our fleet of power plants and the transmission infrastructure to which they are connected could be affected by natural disasters and extreme weather events, which could result in increased costs, including supply chain costs.
Although we may take measures to mitigate the impact of inflation, those measures may not be effective. We are potentially affected by emerging technologies that could over time affect or transform the energy industry. Advancements in power generation technology, including commercial and residential solar generation installations and commercial micro turbine installations, are improving the cost-effectiveness of customer self-supply of electricity.
Although we may take measures to mitigate the impact of inflation, those measures may not be effective. We are potentially affected by emerging technologies that could, over time, affect or transform the energy industry. Advancements in both distributed and utility-scale power generation technology could impact market prices and demand size and behaviors.
Market performance and other factors could decrease the value of our NDT funds and employee benefit plan assets, which then could require significant additional funding. Disruptions in the capital markets and their actual or perceived effects on particular businesses and the broader economy could adversely affect the value of the investments held within our NDTs and employee benefit plan trusts.
Disruptions in the capital markets and their actual or perceived effects on particular businesses and the broader economy could adversely affect the value of the investments held within our NDTs and employee benefit plan trusts. We have significant obligations in these areas and hold substantial assets in these trusts to meet those obligations.
For example, as Artificial Intelligence (AI) continues to evolve, threat actors could use AI to develop malicious code and sophisticated phishing attempts. As threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate information security vulnerabilities.
As threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate information security vulnerabilities.
This risk represents the loss that could be incurred due to the nonpayment of a customer’s account balance, as well as the loss from the resale of energy previously committed to serve the customer.
This risk represents the loss that could be incurred due to the nonpayment of a customer’s account balance, as well as the loss from the resale of energy previously committed to serve the customer. 31 Table of Contents Risks Related to Legislative, Regulatory, and Legal Factors Federal or state legislative or regulatory actions could negatively affect the scope and functioning of the wholesale markets.
Extreme weather conditions or storms have affected the availability of generation and its transmission, limiting our ability to source or send power to where it is sold, and have also impaired the transportation of natural gas to our generating assets and our ability to supply natural gas to our customers.
Extreme weather conditions or storms could affect the availability of generation and the transmission of electricity, limiting our ability to source electricity or transmit it to our customers. It could also impair our ability to transport natural 30 Table of Contents gas to our generating assets and our ability to supply natural gas to our customers.
The supply markets for nuclear fuel, natural gas and oil are subject to price fluctuations, availability restrictions, counterparty default, and geopolitical risk, including the current Russia and Ukraine conflict and the potential for additional United States sanctions against Russia.
The supply markets for nuclear fuel, natural gas, and oil are subject to price fluctuations, 27 Table of Contents availability restrictions, tariffs, counterparty default, and geopolitical risk, including the ongoing Russia and Ukraine conflict which has yielded sanctions and legislation by the United States, United Kingdom, European Union, and Canada impacting the exports and imports of Russian nuclear fuel.
To the extent that weather is warmer in the summer or colder in the winter than assumed, we could require greater resources to meet our contractual commitments.
Our operations are affected by weather, which impacts demand for electricity and natural gas, the price of energy commodities, as well as operating conditions. To the extent that weather is warmer in the summer or colder in the winter than assumed, we could require greater resources to meet our contractual commitments.
See Note 7 — Early Plant Retirements and Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information. Forecasting trust fund investment earnings and costs to decommission nuclear generating stations requires significant judgment, and actual results could differ significantly from current estimates.
Forecasting trust fund investment earnings and costs to decommission nuclear generating stations requires significant judgment, and actual results could differ significantly from current estimates.
We could make acquisitions or investments in new business initiatives and new markets, which may not be successful or achieve the intended financial results. We could continue to pursue growth in our existing businesses and markets and further diversification across the competitive energy value chain.
If we are unable to source the necessary workforce it could result in unfavorable financial results and/or a delay to Crane's restart. We could make acquisitions or investments in new business initiatives and new markets, which may not be successful or achieve the intended financial results.
Nuclear capacity factors. Capacity factors for nuclear generating units significantly affect our results of operations.
Our financial performance could be negatively affected by matters arising from our ownership and operation of nuclear facilities. Nuclear capacity factors. Capacity factors for nuclear generating units significantly affect our results of operations.
Improvements in energy storage technology, including batteries and fuel cells, could also better position customers to meet their around-the-clock electricity requirements. Improvements in energy efficiency of lighting, appliances, equipment and building materials will also affect energy consumption by customers. Changes in power generation, storage, and use technologies could have significant effects on customer behaviors and their energy consumption.
For instance, commercial and residential solar generation installations, energy storage improvements that include batteries and fuel cells, and other emerging technologies are improving the cost-effectiveness of customer self-supply of electricity. Improvements in energy efficiency of lighting, appliances, equipment and building materials will also affect energy consumption by customers.
We also cannot anticipate, detect, repel, or implement fully effective preventative measures against all cyber threats, particularly because the techniques used are constantly evolving. Continued implementation of advanced digital technologies increases the potentially unfavorable impacts of such attacks and may introduce new vulnerabilities and threat tactics.
We cannot anticipate, detect, repel, or implement fully effective preventative measures against all cyber threats, particularly because the techniques used are constantly evolving. Similarly, we cannot guarantee uninterrupted availability of third-party managed systems that may be affected by factors unrelated to cybersecurity incidents.
All these factors could result in higher costs or lower revenues than expected, resulting in lower than planned returns on investment. Risks Related to Our Separation from Exelon The terms in our agreements with Exelon could be less beneficial than the terms we may have otherwise received from unaffiliated third parties.
All these 38 Table of Contents factors could result in higher costs or lower revenues than expected, resulting in lower than planned returns on investment. We are actively pursuing the restart of our Crane nuclear generation facility.
Removed
Risks related to our separation from Exelon primarily include: • replicate certain services provided by Exelon (e.g., information technology), which will require additional resources and expense, and • performance by Exelon and us under the transaction agreements, including indemnification responsibilities tied to the allocation of businesses and liabilities.
Added
Risks related to the proposed acquisition of Calpine primarily include: • challenges in satisfying conditions, obtaining regulatory approvals, and potential delays or abandonment of the merger agreement, • no assurance of the dividends at the current rate post-acquisition, reduced ownership and voting power for current shareholders, and potential dilution to earnings per share and significant transaction costs, • integration challenges including the complex, costly and time-consuming integration process with potential unknown liabilities, and the possible loss of key employees and customers, and • legal and regulatory risks such as potential lawsuits and substantial costs, as well as valuation risk, which could negatively impact future operating results.
Removed
Changes in demographics, including increased numbers of retirements or changes in life expectancy assumptions or changes to Social Security or Medicare eligibility requirements could also increase the costs and funding requirements of the obligations related to the pension and OPEB plans.
Added
An example of such sanctions includes the "Prohibiting Russian Uranium Imports Act" which bans the import of low-enriched uranium into the U.S. that is produced in Russia or by Russian entities, absent a waiver from the DOE.
Removed
We could be negatively affected by the impacts of weather. 36 Table of Contents Our operations are affected by weather, which impacts demand for electricity and natural gas, the price of energy commodities, as well as operating conditions.
Added
Advancements in nuclear technology, carbon capture sequestration, storage and advanced geothermal may contribute to a substantial increase in the supply of clean, reliable baseload power, impacting market prices. Carbon sequestration technology may also allow for gas generation to continue to be a viable source of clean electricity and provide for future growth of clean gas-powered generation.
Removed
Beginning on February 15, 2021, our Texas-based generating assets within the ERCOT market, specifically Colorado Bend II, Wolf Hollow II, and Handley, experienced periodic outages as a result of historically severe cold weather conditions. As a result of this weather event, we incurred a loss of approximately $800 million for the year ended December 31, 2021.
Added
In addition, the duration of the PTC program, the value of the PTC, and/or the existence of the PTC could be affected by legislative action and may have significant adverse effects on our financial performance depending on the future gross receipts received by our nuclear units.
Removed
See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information on the February 2021 extreme cold weather event and Texas-based generating asset outages. Risks Related to Legislative, Regulatory, and Legal Factors Federal or state legislative or regulatory actions could negatively affect the scope and functioning of the wholesale markets.
Added
Continued implementation of advanced digital technologies increases the potentially unfavorable impacts of such attacks and reliability, and may introduce new vulnerabilities and threat tactics. For example, threat actors could use Artificial Intelligence (AI) to develop malicious code and sophisticated phishing attempts.
Removed
For the year ended December 31, 2021, a pre-tax charge of $193 million was recorded in the Consolidated Statement of Operations and Comprehensive Income for decommissioning-related activities that were not offset for the Byron units due to contractual offset being temporarily suspended.
Added
Natural disasters, war, acts and threats of terrorism, pandemic and other significant events could negatively impact our results of operations, ability to raise capital, and future growth.
Removed
The agreements entered with Exelon in connection with the separation, including the separation agreement, a tax matters agreement, an employee matters agreement, and a transition services agreement, were prepared in the context of the separation while we were still a wholly owned subsidiary of Exelon.
Added
In 2024 we announced the planned restart of our Crane nuclear generation facility which will require hiring skilled employees to restart and operate the plant. Our ability to source qualified employees will impact the timing and cost of the restart.
Removed
Accordingly, during the period in which the terms of those agreements were prepared, we did not have an independent Board of Directors or a management team that was independent of Exelon. As a result, the terms of those agreements may not reflect terms that would have resulted from negotiations between unaffiliated third parties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−3 removed10 unchanged
Biggest changeOur cybersecurity organization, under the direction of the CISO who reports to the CIO, implements and provides governance and functional oversight for cybersecurity controls and services. Our CIO has over 20 years of experience with information systems, including management roles in operational security, technical design and engineering, and platform architecture cybersecurity, governance and compliance, and business continuity.
Biggest changeOur CIO has over 20 years of experience with information systems, including management roles in operational security, technical design and engineering, and platform architecture cybersecurity, governance and compliance, and business continuity. Our CISO has over 20 years of experience in cybersecurity, governance and compliance, physical security and business continuity.
At the highest level, our program includes multi-layered oversight by the Board of Directors and Board Committees. Our cybersecurity and physical security controls are implemented through policies and procedures which form the comprehensive framework we utilize for planning, performing, managing, assessing, innovating, and improving our security controls.
At the highest level, our program includes multi-layered oversight by the Board of Directors and Board Committees. Our cybersecurity and physical security controls are implemented through policies and procedures we utilize for planning, performing, managing, assessing, innovating, and improving our security controls.
RISK FACTORS for additional information regarding the Company’s cybersecurity risks. 29 Table of Contents
RISK FACTORS for additional information regarding the Company’s cybersecurity risks.
To protect our information and cyber assets, we implement practices for training and screening of personnel, access management, network defense, asset configuration management, vulnerability assessment (including penetration testing), third-party security, and privacy and information protection. In addition, to detect cybersecurity events, we deploy security logging and monitoring, malicious code detection, and data loss protection tools.
To protect our information and cyber assets, we implement practices for training and screening of personnel, access management, network defense, asset configuration management, vulnerability assessment (including penetration testing), third-party security, and privacy and information protection.
The program aligns enterprise cyber and physical security controls with the National Institute of Standards & Technology (NIST) Cybersecurity Framework (CSF) and other industry standards such as the NERC and NRC cybersecurity standards.
The program aligns enterprise cyber and physical security controls with the National Institute of Standards & Technology (NIST) Cybersecurity Framework (CSF) and other industry standards such as the NERC and NRC cybersecurity standards. Our cybersecurity program is aligned to 42 Table of Contents the five functions of the NIST Cybersecurity Framework – identify, detect, protect, respond, and recover.
Although the risks from cyber threats have not materially affected our business strategy, results of operations, or financial condition to date, we continue to closely monitor cyber risk.
In addition, cybersecurity risk is assessed and tracked through the Company's enterprise risk management program. 43 Table of Contents Although the risks from cyber threats have not materially affected our business strategy, results of operations, or financial condition to date, we continue to closely monitor cyber risk.
Emergent matters or events are reported to the Board between scheduled meetings on an ad hoc basis through our incident response and crisis management protocols.
Emergent matters or events are reported to the Board between scheduled meetings on an ad hoc basis through our incident response and crisis management protocols. At the executive and management level, the Chief Administration Officer, via delegations to the Cyber Security organization, is authorized to govern and functionally oversee our security controls and services on behalf of the enterprise.
If the company is the target of a cybersecurity attack, we have established processes for incident response and crisis management to detect and triage potential incidents and determine severity, contain, and eradicate a threat. These processes also include steps to recover our systems and information through established and exercised system recovery plans and business continuity plans.
If the company is the target of a cybersecurity attack, we have established processes for incident response and crisis management to triage potential incidents, determine severity, contain, and eradicate a threat. These processes require notifications to regulatory and other governmental authorities of cybersecurity events as required by law, including providing notice to investors for material cybersecurity events.
Cross-functional executive steering committees and peer groups, with business unit and technical stakeholder participation, are maintained to support oversight, security controls development, change management, implementation, evaluation, continuous improvement, and sustainment. 28 Table of Contents Our cybersecurity program is aligned to the five functions of the NIST Cybersecurity Framework – identify, detect, protect, respond, and recover.
Cross-functional executive steering committees and peer groups, with business unit and technical stakeholder participation, are maintained to support oversight, security controls development, change management, implementation, evaluation, continuous improvement, and sustainment. To assist in detecting cybersecurity events, we deploy security logging and monitoring, malicious code detection, and data loss protection tools.
We also engage third-party subject matter experts to independently assess our programs, processes and technical controls, as needed.
To recover our systems and information, we utilize established system recovery plans and business continuity plans. As part of our process to continuously improve, we utilize our internal audit, risk, and legal functions to evaluate security controls and risk management practices. We also engage third-party subject matter experts to independently assess our programs, processes and technical controls, as needed.
Removed
Our incident response process includes steps to notify regulatory and other governmental authorities of cybersecurity events as required by law, including providing notice to investors for material cybersecurity events. As part of our process to continuously improve, we utilize internal functions such as our internal audit and risk functions to evaluate security controls and risk management practices.
Added
Our cybersecurity organization, under the direction of the CISO who reports to the CIO, implements and provides governance and functional oversight for cybersecurity controls and services, including coordination with our Corporate Security function.
Removed
At the executive and management level, the Chief Administration Officer, via delegations to the Cyber and Physical Security organizations, is authorized to govern and functionally oversee our security controls and services on behalf of the enterprise.
Removed
Our CISO has over 20 years of experience in cybersecurity, governance and compliance, physical security and business continuity. In addition, cybersecurity risk is assessed and tracked through the Company's enterprise risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES The following table presents our interests in net electric generating capacity by station at December 31, 2023: Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) Midwest Braidwood Braidwood, IL 2 Uranium Base-load 2,386 Byron Byron, IL 2 Uranium Base-load 2,347 (e) LaSalle Seneca, IL 2 Uranium Base-load 2,320 Dresden Morris, IL 2 Uranium Base-load 1,845 (e) Quad Cities Cordova, IL 2 75 Uranium Base-load 1,403 Clinton Clinton, IL 1 Uranium Base-load 1,092 Michigan Wind 2 Sanilac Co., MI 50 51 (f) Wind Intermittent 46 Beebe Gratiot Co., MI 34 51 (f) Wind Intermittent 42 Michigan Wind 1 Huron Co., MI 46 51 (f) Wind Intermittent 35 Harvest 2 Huron Co., MI 33 51 (f) Wind Intermittent 30 Harvest Huron Co., MI 31 51 (f) Wind Intermittent 26 Beebe 1B Gratiot Co., MI 21 51 (f) Wind Intermittent 26 CP Windfarm Faribault Co., MN 2 51 (f) Wind Intermittent 2 Clinton Battery Storage Blanchester, OH 1 Energy Storage Peaking 5 Total Midwest 11,605 Mid-Atlantic Limerick Sanatoga, PA 2 Uranium Base-load 2,315 Calvert Cliffs Lusby, MD 2 Uranium Base-load 1,789 Peach Bottom Delta, PA 2 50 Uranium Base-load 1,324 Salem Lower Alloways Creek Township, NJ 2 42.59 Uranium Base-load 995 Conowingo Darlington, MD 11 Hydroelectric Base-load 497 Criterion Oakland, MD 28 51 (f) Wind Intermittent 36 Fair Wind Garrett County, MD 12 Wind Intermittent 30 Fourmile Ridge Garrett County, MD 16 51 (f) Wind Intermittent 20 Solar Horizons Emmitsburg, MD 1 51 (f) Solar Intermittent 8 Solar New Jersey 3 Middle Township, NJ 5 51 (f) Solar Intermittent 1 Muddy Run Drumore, PA 8 Hydroelectric Intermediate 1,058 Eddystone 3, 4 Eddystone, PA 2 Oil/Gas Peaking 760 (i) Perryman Aberdeen, MD 5 Oil/Gas Peaking 404 Croydon West Bristol, PA 8 Oil Peaking 391 Handsome Lake Kennerdell, PA 5 Gas Peaking 268 Richmond Philadelphia, PA 2 Oil Peaking 98 Philadelphia Road Baltimore, MD 4 Oil Peaking 60 Eddystone Eddystone, PA 4 Oil Peaking 60 Delaware Philadelphia, PA 4 Oil Peaking 56 30 Table of Contents Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) Southwark Philadelphia, PA 4 Oil Peaking 52 Falls Morrisville, PA 3 Oil Peaking 51 Moser Lower Pottsgrove Twp., PA 3 Oil Peaking 51 Chester Chester, PA 3 Oil Peaking 39 Schuylkill Philadelphia, PA 2 Oil Peaking 30 Total Mid-Atlantic 10,393 ERCOT South Texas Project Bay City, TX 2 44 Uranium Base-load 1,161 Whitetail Webb County, TX 57 51 (f) Wind Intermittent 47 Sendero Jim Hogg and Zapata County, TX 39 51 (f) Wind Intermittent 40 Colorado Bend II Wharton, TX 3 Gas Intermediate 1,138 Wolf Hollow II Granbury, TX 3 Gas Intermediate 1,103 Handley 3 Fort Worth, TX 1 Gas Intermediate 375 Handley 4, 5 Fort Worth, TX 2 Gas Peaking 870 Total ERCOT 4,734 New York Nine Mile Point Scriba, NY 2 (g) Uranium Base-load 1,675 FitzPatrick Scriba, NY 1 Uranium Base-load 842 Ginna Ontario, NY 1 Uranium Base-load 576 Total New York 3,093 Other Antelope Valley Lancaster, CA 1 Solar Intermittent 242 Bluestem Beaver County, OK 60 51 (f)(h) Wind Intermittent 101 Shooting Star Kiowa County, KS 65 51 (f) Wind Intermittent 53 Bluegrass Ridge King City, MO 27 51 (f) Wind Intermittent 29 Conception Barnard, MO 24 51 (f) Wind Intermittent 26 Cow Branch Rock Port, MO 24 51 (f) Wind Intermittent 26 Mountain Home Glenns Ferry, ID 20 51 (f) Wind Intermittent 21 High Mesa Elmore Co., ID 19 51 (f) Wind Intermittent 20 Echo 1 Echo, OR 21 50.49 (f) Wind Intermittent 17 Sacramento PV Energy Sacramento, CA 4 51 (f) Solar Intermittent 15 Cassia Buhl, ID 13 51 (f) Wind Intermittent 14 Wildcat Lovington, NM 13 51 (f) Wind Intermittent 14 Echo 2 Echo, OR 9 51 (f) Wind Intermittent 9 Tuana Springs Hagerman, ID 8 51 (f) Wind Intermittent 9 Greensburg Greensburg, KS 10 51 (f) Wind Intermittent 6 Threemile Canyon Boardman, OR 6 51 (f) Wind Intermittent 5 Loess Hills Rock Port, MO 4 Wind Intermittent 5 Denver Airport Solar Denver, CO 1 51 (f) Solar Intermittent 2 31 Table of Contents Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) Mystic 8, 9 Charlestown, MA 6 Gas Intermediate 1,413 (e) Hillabee Alexander City, AL 3 Gas Intermediate 753 Wyman 4 Yarmouth, ME 1 5.9 Oil Intermediate 36 West Medway II West Medway, MA 2 Oil/Gas Peaking 193 West Medway West Medway, MA 3 Oil Peaking 124 Grand Prairie Alberta, Canada 1 Gas Peaking 105 Framingham Framingham, MA 3 Oil Peaking 31 Total Other 3,269 Total 33,094 __________ (a) All nuclear stations are boiling water reactors except Braidwood, Byron, Calvert Cliffs, Ginna, Salem, and STP units which are pressurized water reactors.
Biggest changePROPERTIES The following table presents our interests in net electric generating capacity by station at December 31, 2024: Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) Midwest Braidwood Braidwood, IL 2 Uranium Baseload 2,386 Byron Byron, IL 2 Uranium Baseload 2,350 LaSalle Seneca, IL 2 Uranium Baseload 2,320 Dresden Morris, IL 2 Uranium Baseload 1,845 Quad Cities Cordova, IL 2 75 Uranium Baseload 1,403 Clinton Clinton, IL 1 Uranium Baseload 1,092 Michigan Wind 2 Sanilac County, MI 50 51 (e) Wind Intermittent 46 Beebe Gratiot County, MI 34 51 (e) Wind Intermittent 42 Michigan Wind 1 Huron County, MI 46 51 (e) Wind Intermittent 35 Harvest 2 Huron County, MI 33 51 (e) Wind Intermittent 30 Harvest Huron County, MI 31 51 (e) Wind Intermittent 26 Beebe 1B Gratiot County, MI 21 51 (e) Wind Intermittent 26 CP Windfarm Faribault County, MN 2 51 (e) Wind Intermittent 2 Clinton Battery Storage Blanchester, OH 1 Energy Storage Peaking 5 Total Midwest 11,608 Mid-Atlantic Limerick Sanatoga, PA 2 Uranium Baseload 2,315 Calvert Cliffs Lusby, MD 2 Uranium Baseload 1,789 Peach Bottom Delta, PA 2 50 Uranium Baseload 1,324 Salem Lower Alloways Creek Township, NJ 2 42.59 Uranium Baseload 989 Conowingo Darlington, MD 11 Hydroelectric Baseload 497 Criterion Oakland, MD 28 51 (e) Wind Intermittent 36 Fair Wind Garrett County, MD 12 Wind Intermittent 30 Fourmile Ridge Garrett County, MD 16 51 (e) Wind Intermittent 20 Solar Horizons Emmitsburg, MD 1 51 (e) Solar Intermittent 8 Solar New Jersey 3 Middle Township, NJ 4 51 (e) Solar Intermittent 1 Muddy Run Drumore, PA 8 Hydroelectric Intermediate 1,058 Eddystone 3, 4 Eddystone, PA 2 Oil/Gas Peaking 760 (h) Perryman Aberdeen, MD 5 Oil/Gas Peaking 404 (i) Croydon West Bristol, PA 8 Oil Peaking 391 Handsome Lake Kennerdell, PA 5 Gas Peaking 268 Richmond Philadelphia, PA 2 Oil Peaking 98 Philadelphia Road Baltimore, MD 4 Oil Peaking 60 44 Table of Contents Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) Eddystone Eddystone, PA 4 Oil Peaking 60 Delaware Philadelphia, PA 4 Oil Peaking 56 Southwark Philadelphia, PA 4 Oil Peaking 52 Falls Morrisville, PA 3 Oil Peaking 51 Moser Lower Pottsgrove Township, PA 3 Oil Peaking 51 Chester Chester, PA 3 Oil Peaking 39 Schuylkill Philadelphia, PA 2 Oil Peaking 30 Total Mid-Atlantic 10,387 ERCOT STP Bay City, TX 2 44 (j) Uranium Baseload 1,162 Whitetail Webb County, TX 57 51 (e) Wind Intermittent 47 Sendero Jim Hogg and Zapata Counties, TX 39 51 (e) Wind Intermittent 40 Colorado Bend II Wharton, TX 3 Gas Intermediate 1,143 Wolf Hollow II Granbury, TX 3 Gas Intermediate 1,103 Handley 3 Fort Worth, TX 1 Gas Intermediate 375 Handley 4, 5 Fort Worth, TX 2 Gas Peaking 870 Total ERCOT 4,740 New York NMP Scriba, NY 2 (f) Uranium Baseload 1,675 FitzPatrick Scriba, NY 1 Uranium Baseload 842 Ginna Ontario, NY 1 Uranium Baseload 576 Total New York 3,093 Other Antelope Valley Lancaster, CA 1 Solar Intermittent 242 Bluestem Beaver County, OK 60 51 (e)(g) Wind Intermittent 101 Shooting Star Kiowa County, KS 65 51 (e) Wind Intermittent 53 Bluegrass Ridge King City, MO 26 51 (e) Wind Intermittent 29 Conception Barnard, MO 23 51 (e) Wind Intermittent 26 Cow Branch Rock Port, MO 24 51 (e) Wind Intermittent 26 Mountain Home Glenns Ferry, ID 20 51 (e) Wind Intermittent 21 45 Table of Contents Station (a) Location No. of Units Percent Owned (b) Primary Fuel Type Primary Dispatch Type (c) Net Generation Capacity (MWs) (d) High Mesa Elmore County, ID 19 51 (e) Wind Intermittent 20 Echo 1 Echo, OR 21 50.49 (e) Wind Intermittent 17 Sacramento PV Energy Sacramento, CA 4 51 (e) Solar Intermittent 15 Cassia Buhl, ID 13 51 (e) Wind Intermittent 14 Wildcat Lovington, NM 13 51 (e) Wind Intermittent 14 Echo 2 Echo, OR 9 51 (e) Wind Intermittent 9 Tuana Springs Hagerman, ID 8 51 (e) Wind Intermittent 9 Greensburg Greensburg, KS 10 51 (e) Wind Intermittent 6 Threemile Canyon Boardman, OR 6 51 (e) Wind Intermittent 5 Loess Hills Rock Port, MO 4 Wind Intermittent 5 Denver Airport Solar Denver, CO 1 51 (e) Solar Intermittent 2 Hillabee Alexander City, AL 3 Gas Intermediate 753 Wyman 4 Yarmouth, ME 1 5.9 Oil Intermediate 35 West Medway II West Medway, MA 2 Oil/Gas Peaking 188 West Medway West Medway, MA 3 Oil Peaking 123 Grand Prairie Alberta, Canada 1 Gas Peaking 105 Framingham Framingham, MA 3 Oil Peaking 30 Total Other 1,848 Total 31,676 __________ (a) All nuclear stations are boiling water reactors except Braidwood, Byron, Calvert Cliffs, Ginna, Salem, and STP units which are pressurized water reactors.
(b) 100%, unless otherwise indicated. (c) Base-load units are those that normally operate to take all or part of the minimum continuous load of a system and, consequently, produce electricity at an essentially constant rate. Intermittent units are those with output controlled by the natural variability of the energy resource rather than dispatched based on system requirements.
(b) 100%, unless otherwise indicated. (c) Baseload units are those that normally operate to take all or part of the minimum continuous load of a system and, consequently, produce electricity at an essentially constant rate. Intermittent units are those with output controlled by the natural variability of the energy resource rather than dispatched based on system requirements.
We also own EMT, which is a liquefied natural gas (LNG) import facility located on the Mystic River in Everett, MA. EMT connects to two interstate pipeline systems as well as a local gas utility's distribution system and the Mystic Generating Station.
We also own EMT, which is a liquefied natural gas import facility located on the Mystic River in Everett, MA. EMT connects to two interstate pipeline systems as well as a local gas utility's distribution system. We maintain property insurance against loss or damage to our principal plants and properties by fire or other perils, subject to certain exceptions.
For our insured losses, we are self-insured to the extent that any losses are within the policy deductible or exceed the amount of insurance maintained. Any such losses could have a material adverse effect on our consolidated financial condition or results of operations.
For additional information on insurance specific to our nuclear facilities, see 46 Table of Contents Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. For our insured losses, we are self-insured to the extent that any losses are within the policy deductible or exceed the amount of insurance maintained.
(h) CRP owns 100% of the Class A membership interests and a tax equity investor owns 100% of the Class B membership interests of the entity that owns the Bluestem generating assets. (i) Eddystone stations 3 and 4 will be retiring in June 2025.
(f) We wholly own NMP Unit 1 and have an 82% undivided ownership interest in NMP Unit 2. (g) CRP owns 100% of the Class A membership interests and a tax equity investor owns 100% of the Class B membership interests of the entity that owns the Bluestem generating assets.
On September 15, 2021, we reversed the previous decision to retire Byron and Dresden. See Note 7 — Early Plant Retirements of the Combined Notes to Consolidated Financial Statements for additional information. (f) Reflects the prior sale of 49% of CRP to a third party.
For nuclear stations, capacity reflects the annual mean rating. All other facilities reflect a summer rating. (e) Reflects the prior sale of 49% of CRP to a third party. See Note 21 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information.
See Note 22 — Variable Interest Entities of the Combined Notes to Consolidated Financial Statements for additional information. (g) We wholly own Nine Mile Point Unit 1 and have an 82% undivided ownership interest in Nine Mile Point Unit 2.
(j) Within the 44% undivided ownership interest in STP, 2% interest was recorded as held for sale as of December 31, 2024. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
Removed
For nuclear stations, capacity reflects the annual mean rating. Natural gas and oil stations and wind and solar facilities reflect a summer rating. (e) On August 9, 2020, we announced we would permanently cease generation operations at Byron and Dresden nuclear stations in 2021 and Mystic Units 8 and 9 in 2024.
Added
(h) Eddystone units 3 and 4 will be retiring in June 2025. (i) In July 2024, we submitted a deactivation notice with PJM with intent to deactivate one of the Perryman 6 units (unit 1) with approximately 54.9 MW of installed capacity on or about May 31, 2025.
Removed
We maintain property insurance against loss or damage to our principal plants and properties by fire or other perils, subject to certain exceptions. For additional information on insurance specific to our nuclear facilities, see Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.
Added
Any such losses could have a material adverse effect on our consolidated financial statements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are parties to various lawsuits and regulatory proceedings in the ordinary course of business. For information regarding material lawsuits and proceedings, see Note 3 — Regulatory Matters and Note 19 — Commitments 32 Table of Contents and Contingencies of the Combined Notes to Consolidated Financial Statements. Such descriptions are incorporated herein by these references.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are parties to various lawsuits and regulatory proceedings in the ordinary course of business. For information regarding material lawsuits and proceedings, see Note 3 — Regulatory Matters and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. Such descriptions are incorporated herein by these references.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis performance chart assumes: • $100 invested on February 1, 2022, in CEG Parent common stock, the S&P 500 Stock Index, and the UTY, and • All dividends are reinvested. 46 Table of Contents Value of Investment 2/1/22 12/31/22 12/31/23 CEG $100 $175 $240 S&P 500 $100 $86 $108 UTY $100 $107 $96 Constellation As of January 31, 2024, CEG Parent directly held the entire membership interest in Constellation.
Biggest changeValue of Investment 2/1/22 12/31/22 12/31/23 12/31/24 CEG $100 $175 $240 $462 S&P 500 $100 $86 $108 $135 UTY $100 $107 $96 $116 48 Table of Contents Constellation As of January 31, 2025, CEG Parent directly held the entire membership interest in Constellation.
Stock Performance Graph The performance graph below illustrates a two-year comparison of cumulative total returns based on an initial investment of $100 in CEG Parent common stock, as compared with the S&P 500 Stock Index and the Philadelphia Utility Sector Index, or UTY, for the period 2022 through 2023.
Stock Performance Graph The performance graph below illustrates a three-year comparison of cumulative total returns based on an initial investment of $100 in CEG Parent common stock, as compared with the S&P 500 Stock Index and the Philadelphia Utility Sector Index (UTY), for the period 2022 through 2024.
The dividend is payable on Tuesday, March 19, 2024, to shareholders of record as of 5 p.m. Eastern time on Friday, March 8, 2024. Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities Our Board of Directors considers share buybacks to be one of several ways we can provide value to our shareholders through our deployment of capital.
The dividend is payable on Tuesday, March 18, 2025, to shareholders of record as of 5 p.m. Eastern time on Friday, March 7, 2025. Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities Our Board of Directors considers share buybacks to be one of several ways we can provide value to our shareholders through our deployment of capital.
The following table sets forth Constellation’s quarterly cash dividends per share paid during 2023 and 2022. 2023 2022 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter $ 0.2820 $ 0.2820 $ 0.2820 $ 0.2820 $ 0.1410 $ 0.1410 $ 0.1410 $ 0.1410 First Quarter 2024 Dividend On February 26, 2024, our Board of Directors declared a regular quarterly dividend of $0.3525 per share on our common stock for the first quarter of 2024.
The following table sets forth Constellation’s quarterly cash dividends per share paid during 2024 and 2023. 2024 2023 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter $ 0.3525 $ 0.3525 $ 0.3525 $ 0.3525 $ 0.2820 $ 0.2820 $ 0.2820 $ 0.2820 First Quarter 2025 Dividend On February 18, 2025, our Board of Directors declared a regular quarterly dividend of $0.3878 per share on our common stock for the first quarter of 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES CEG Parent Our common stock is listed on the Nasdaq (trading symbol: CEG). As of January 31, 2024 there were 316,666,538 shares of common stock outstanding and approximately 70,439 record holders of common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES CEG Parent Our common stock is listed on the Nasdaq (trading symbol: CEG). As of January 31, 2025, there were approximately 66,724 record holders of common stock.
We believe that our share buyback policy is in the best interests of our company and its shareholders and is also consistent with the interests of our other stakeholders. 47 Table of Contents On February 16, 2023, as part of our capital allocation plan, our Board of Directors announced a share repurchase program with a $1 billion authority without expiration.
We believe that our share buyback policy is in the best interests of our company and its shareholders and is also consistent with the interests of our other stakeholders. Since 2023, our Board of Directors authorized the repurchase of up to $3 billion of the Company's outstanding common stock.
The following table provides information regarding our share repurchases under the program during the three months ended December 31, 2023.
See Note 19 — Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information regarding our share repurchase program. There were no share repurchases under our share repurchase program during the three months ended December 31, 2024.
The 2024 quarterly dividend will be $0.3525 per share.
Dividends Our Board of Directors approved a 10% increase in the 2025 quarterly dividend per share compared to the 2024 quarterly dividend per share. The 2025 quarterly dividend will be $0.3878 per share.
During 2023, we repurchased from the open market approximately 10.6 million shares of our common stock for a total cost, inclusive of taxes and transaction costs, of $1 billion. As of December 31, 2023, there was $1 billion of remaining authority to repurchase shares.
As of December 31, 2024, there was $991 million of remaining authority to repurchase shares of the Company's outstanding common stock. ITEM 6. RESERVED Not Applicable.
Removed
Dividends As a Pennsylvania corporation, Constellation is subject to certain restrictions on dividends under Pennsylvania corporate law.
Added
This performance chart assumes: • $100 invested on February 1, 2022, in CEG Parent common stock, the S&P 500 Stock Index, and the UTY, and • All dividends are reinvested.
Removed
Generally, a corporation may only pay dividends under the Pennsylvania Business Corporation Law if the total assets of the corporation would be more than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time as of which the distribution is measured, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
Removed
Constellation's revolving credit facility contains a covenant requiring it to maintain a consolidated leverage ratio calculated as the ratio of its consolidated indebtedness to its consolidated earnings before interest, taxes, depreciation and amortization. Maintaining that ratio may affect Constellation's ability to make distributions to the CEG Parent. Our Board of Directors approved an updated dividend policy for 2024.
Removed
Repurchases under this program commenced in March 2023. Shares repurchased were made through open market transactions and purchases pursuant to a Rule 10b5-1 trading plan. All repurchased shares were constructively retired and cancelled.
Removed
On December 12, 2023, our Board of Directors approved an increase to our previously announced $1 billion share repurchase program, authorizing the repurchase of up to an additional $1 billion of the Company’s outstanding common stock.
Removed
On November 9, 2023, we entered into a stock purchase plan for the purchase of shares of our common stock (November 2023 Stock Purchase Plan), designed to comply with Rule 10b5-1 under the Exchange Act.
Removed
Under its terms, the November 2023 Stock Purchase Plan would expire at the later of the completion of the maximum purchase amount of $250 million of shares of our common stock, or December 31, 2023.
Removed
All repurchases disclosed were made pursuant to the November 2023 Stock Purchase Plan: Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (c) October 1, 2023 to October 31, 2023 — $ — $ 244,000,000 November 1, 2023 to November 30, 2023 993,800 $ 122.84 $ 121,000,000 December 1, 2023 to December 31, 2023 (d) 1,031,569 $ 115.75 $ 1,000,000,000 Total 2,025,369 $ 119.22 $ 1,000,000,000 __________ (a) We have not made any purchases of shares other than in connection with the publicly announced share repurchase program described above.
Removed
(b) Average price paid per share for open market transactions excludes taxes and commissions. (c) Approximate dollar value of shares that may yet be purchased under the program includes taxes and commissions. (d) Includes increase of additional $1 billion of share repurchase authority. ITEM 6. RESERVED Not Applicable.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeRevenue from Contracts with Customers 108 5. Segment Information 111 6. Accounts Receivable 114 7. Early Plant Retirements 115 8. Property, Plant, and Equipment 117 9. Jointly Owned Electric Plant 118 10. Asset Retirement Obligations 118 11. Leases 124 12. Asset Impairments 125 13. Intangible Assets 126 14. Income Taxes 127 15. Retirement Benefits 130 16.
Biggest changeRevenue from Contracts with Customers 105 5. Segment Information 108 6. Government Assistance 111 7. Accounts Receivable 111 8. Property, Plant, and Equipment 113 9. Jointly-Owned Electric Plants 114 10. Asset Retirement Obligations 114 11. Leases 119 12. Intangible Assets 121 13. Income Taxes 122 14. Retirement Benefits 125 15. Derivative Financial Instruments 133 16.
ITEM 6. RESERVED 48 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 48 Executive Overview 48 Significant Transactions and Developments 49 Other Key Business Drivers 50 Critical Accounting Policies and Estimates 50 Financial Results of Operations 58 Liquidity and Capital Resources 67 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 76 ITEM 8.
ITEM 6. RESERVED 49 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 49 Executive Overview 49 Significant Transactions and Developments 50 Other Key Business Drivers 51 Critical Accounting Policies and Estimates 51 Financial Results of Operations 59 Liquidity and Capital Resources 68 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 76 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 81 Management's Report on Internal Control Over Financial Reporting 81 Report of Independent Registered Public Accounting Firm 82 Constellation Energy Corporation 86 Constellation Energy Generation, LLC 91 Combined Notes to Consolidated Financial Statements 96 1. Basis of Presentation 96 2. Mergers, Acquisitions, and Dispositions 103 3. Regulatory Matters 106 4.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 80 Management's Report on Internal Control Over Financial Reporting 80 Report of Independent Registered Public Accounting Firm 81 Constellation Energy Corporation 85 Constellation Energy Generation, LLC 90 Combined Notes to Consolidated Financial Statements 95 1. Basis of Presentation 95 2. Mergers, Acquisitions, and Dispositions 102 3. Regulatory Matters 104 4.
Derivative Financial Instruments 140 17. Debt and Credit Agreements 144 18. Fair Value of Financial Assets and Liabilities 149 19. Commitments and Contingencies 157 20. Shareholders' Equity 162 21. Stock-Based Compensation Plans 163 22. Variable Interest Entities 166 23. Supplemental Financial Information 169 24. Related Party Transactions 173
Debt and Credit Agreements 138 17. Fair Value of Financial Assets and Liabilities 142 18. Commitments and Contingencies 150 19. Shareholders' Equity 155 20. Stock-Based Compensation Plans 157 21. Variable Interest Entities 159 22. Supplemental Financial Information 161 23. Related Party Transactions 164

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the year ended December 31, 2023 compared to 2022, changes in Operating revenues by region were approximately as follows: 2023 vs. 2022 Variance % Change (a) Description Mid-Atlantic $ (26) (0.5) % • unfavorable settled economic hedges of ($305) due to settled prices relative to hedged prices • unfavorable retail load revenue of ($40) primarily due to lower contracted energy prices; partially offset by • favorable wholesale load revenue of $250 due to higher contracted energy prices and higher volumes • favorable PJM net performance bonuses of $45 associated with the December 2022 weather event (b) Midwest 8 0.2 % • favorable settled economic hedges of $210 due to settled prices relative to hedged prices • favorable ZEC revenue of $85 primarily due to revenue recognized for Illinois ZECs delivered in prior planning years partially offset by a decrease in the ZEC price in current planning year • favorable retail load revenue of $25 primarily due to higher load volumes, partially offset by lower contracted energy prices; partially offset by • unfavorable net generation and wholesale load revenue of ($280) primarily due to lower nuclear generation and lower load volumes, partially offset by CMC program activity and net capacity revenue • unfavorable PJM performance bonuses of ($40), associated with the December 2022 weather event (b) , 63 Table of Contents 2023 vs. 2022 Variance % Change (a) Description New York 426 26.7 % • favorable settled economic hedges of $520 due to settled prices relative to hedged prices • favorable retail load revenue of $105 primarily due to higher contracted energy prices; partially offset by • unfavorable net generation revenue of ($150) primarily due to lower energy prices • unfavorable ZEC revenue of ($50) primarily due to lower ZEC price partially offset by higher generation volumes ERCOT (197) (12.8) % • unfavorable settled economic hedges of ($570) due to settled prices relative to hedged prices; partially offset by • favorable wholesale load revenue of $330 due to higher volumes and higher contracted energy prices Other Power Regions (881) (13.1) % • unfavorable settled economic hedges of ($845) due to settled prices relative to hedged prices • unfavorable wholesale load revenue of ($190) primarily due to lower volumes; partially offset by • favorable retail load revenue of $175 primarily due to higher contracted energy prices Other (1,439) (24.2) % • unfavorable gas revenue, including settled economic hedges, of ($1,240) primarily due to lower gas prices • unfavorable revenues in the United Kingdom of ($225) primarily due to lower energy prices Mark-to-market (c) 2,587 • gains on economic hedging activities of $1,399 in 2023 compared to losses of ($1,188) in 2022 Total $ 478 2.0 % __________ (a) % Change in mark-to-market is not a meaningful measure.
Biggest changeFor the year ended December 31, 2024 compared to 2023, changes in Operating revenues by region were approximately as follows: 2024 vs. 2023 $ Change % Change (a) Description Mid-Atlantic $ 384 7.5 % • favorable estimated nuclear PTC revenue of $515 • favorable retail load revenue of $135 primarily due to higher contracted energy prices; partially offset by • unfavorable wholesale load revenue of ($100) primarily due to lower volumes • unfavorable net ZEC program revenue of ($80) due to estimated refund associated with Nuclear PTC • unfavorable settled economic hedges of ($60) due to settled prices relative to hedged prices 64 Table of Contents 2024 vs. 2023 $ Change % Change (a) Description Midwest 147 3.2 % • favorable estimated nuclear PTC revenue of $1,300; partially offset by • unfavorable net ZEC and CMC program revenue of ($750) due to decrease in ZEC revenue realized and estimated pass through associated with nuclear PTC • unfavorable settled economic hedges of ($205) due to settled prices relative to hedged prices • unfavorable net generation and wholesale load revenue of ($85) primarily due to lower load volumes • unfavorable PJM performance bonuses of ($70) due to absence of favorable adjustment in 2023 associated with the December 2022 weather event New York 29 1.4 % • favorable retail load revenue of $155 primarily due to higher load volumes and contracted energy prices • favorable estimated nuclear PTC revenue of $150; partially offset by • unfavorable net ZEC program revenue of ($180) due to estimated refund associated with nuclear PTC and decrease in ZEC price in current planning year • unfavorable settled economic hedges of ($120) due to settled prices relative to hedged prices ERCOT 204 15.2 % • favorable settled economic hedges of $150 due to settled prices relative to hedged prices • favorable estimated nuclear PTC revenue of $110; partially offset by • unfavorable retail load revenue of ($100) primarily due to lower contracted energy prices Other Power Regions (345) (5.9) % • unfavorable wholesale load revenue of ($515) primarily due to lower contracted prices and load volumes; partially offset by • favorable retail load revenue of $200 primarily due to higher contracted energy prices Other (686) (15.2) % • unfavorable gas revenue, inclusive of settled economic hedges, of ($555) primarily due to lower gas prices • no other individually significant items to note Mark-to-market (b) (1,083) • gains on economic hedging activities of $316 in 2024 compared to gains of $1,399 in 2023 Total $ (1,350) (5.4) % __________ (a) % Change in mark-to-market is not a meaningful measure.
Changes to these estimates and assumptions could result in material changes to the fair value of assets and liabilities as of acquisition date.
Changes to these estimates and assumptions could result in material changes to the fair value of assets and liabilities as of the acquisition date.
We anticipate funding these capital expenditures with a combination of internally generated funds and borrowings. Pension and Other Postretirement Benefits We consider various factors when making pension funding decisions, including actuarially-determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act, and management of the pension obligation.
We anticipate funding these capital expenditures with a combination of internally generated funds and borrowings. Pension and Other Postretirement Benefits We consider various factors when making qualified pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act, and management of the pension obligation.
Along with depreciation study results, management considers expected future energy market conditions and generation plant operating costs and capital investment requirements in determining the estimated service lives of our generating facilities and reassesses the reasonableness of estimated useful lives whenever events or changes in circumstances warrant.
Along with depreciation study results, management considers expected future energy market conditions and generation plant operating costs and capital investment requirements in determining the estimated useful lives of our generating facilities and reassesses the reasonableness of estimated useful lives whenever events or changes in circumstances warrant.
We consider non-performance risk, including credit risk in the valuation of derivative contracts, and both historical and current market data in our assessment of non-performance risk. The impacts of non-performance and credit risk to date have generally not been material to the consolidated financial statements. See ITEM 7A.
We consider non-performance risk, including credit risk in the valuation of derivative contracts, and both historical and current market data in our assessment of non-performance risk. The impacts of non-performance and credit risk to date have not been material to the consolidated financial statements. See ITEM 7A.
Refer to debt issuances and redemptions tables below for additional information. • Changes in short-term borrowings, net , is driven by repayments on and issuances of notes due in less than 365 days.
Refer to the Debt Issuances and Redemptions tables below for additional information. • Changes in short-term borrowings, net is driven by repayments on and issuances of notes due in less than 365 days.
See Operating revenues above for discussion of our reportable segments and hedging strategies and for supplemental statistical data, including supply sources by region, nuclear fleet capacity factor, capacity prices, and electricity prices.
See Operating revenues above for discussion of our reportable segments and hedging strategies and for supplemental statistical data, including sales and supply sources by region, nuclear fleet capacity factor, capacity prices, and electricity prices.
(e) Represents the future estimated value at December 31, 2023 of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into with third-parties for the provision of services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
(e) Represents the future estimated value at December 31, 2024 of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into with third parties for the provision of services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.
As power market and regulatory environment developments occur, we evaluate and incorporate, as necessary, the impacts of such developments into our nuclear ARO assumptions and estimates. Our probabilistic cash flow models also include an assessment of the timing of DOE acceptance of SNF for disposal. We currently assume DOE will begin accepting SNF from the industry in 2035.
As power market and regulatory environment developments occur, we evaluate and incorporate, as necessary, the impacts of such developments into our nuclear ARO assumptions and estimates. Our probabilistic cash flow models also include an assessment of the timing of DOE acceptance of SNF for disposal. We currently assume DOE will begin accepting SNF from the industry in 2040.
(b) See the Consolidated Statements of Cash Flows for details of non-cash operating activities, includes Depreciation, amortization, and accretion, Asset impairments, Gain on sales of assets and businesses, Deferred income taxes and amortization of ITCs, Net fair value changes related to derivatives, and Net realized and unrealized activity associated with NDTs and equity investments.
(b) See the Consolidated Statements of Cash Flows for details of non-cash operating activities, includes Depreciation, amortization, and accretion, Asset impairments, Gain on sale of assets and businesses, Deferred income taxes and amortization of ITCs, Net fair value changes related to derivatives, and Net realized and unrealized activity associated with NDTs and equity investments.
See Note 23 — Supplemental Financial Information of the Combined Notes to Consolidated Financial Statements for additional information on the Other non-cash operating activities line. Changes in our cash flows from operations were generally consistent with changes in results of operations, as adjusted by changes in working capital in the normal course of business, except as discussed below.
See Note 22 — Supplemental Financial Information of the Combined Notes to Consolidated Financial Statements for additional information on the Other non-cash operating activities line. Changes in our cash flows from operations were generally consistent with changes in results of operations, as adjusted by changes in working capital in the normal course of business, except as discussed below.
The SNF acceptance date assumption is based on management’s estimates of the amount of time required for DOE to select a site location and develop the necessary infrastructure for long-term SNF storage. For additional information regarding SNF, see Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. Discount Rates.
The SNF acceptance date assumption is based on management’s estimates of the amount of time required for DOE to select a site location and develop the necessary infrastructure for long-term SNF storage. For additional information regarding SNF, see Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements. Discount Rates.
See Note 14 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information. Accounting for Loss Contingencies In the preparation of our financial statements, we make judgments regarding the future outcome of contingent events and record liabilities for loss contingencies that are probable and can be reasonably estimated based upon available information.
See Note 13 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information. Accounting for Loss Contingencies In the preparation of our financial statements, we make judgments regarding the future outcome of contingent events and record liabilities for loss contingencies that are probable and can be reasonably estimated based upon available information.
The measurement of projected benefit obligations and costs is affected by several assumptions including the discount rate, the long-term expected rate of return on plan assets, the anticipated rate of increase of health care costs, our contributions, the rate of compensation increases, and the long-term expected investment rate credited to employees of certain plans, among others.
The measurement of these benefit obligations and costs is affected by several assumptions including the discount rate, the long-term expected rate of return on plan assets, the anticipated rate of increase of health care costs, our contributions, the rate of compensation increases, and the long-term expected investment rate credited to employees of certain plans, among others.
The following table sets forth our GAAP consolidated Net Income (Loss) Attributable to Common Shareholders for the year ended December 31, 2023 compared to the same period in 2022. For additional information regarding the financial results for the years ended December 31, 2023 and 2022 see the discussions of Results of Operations below.
The following table sets forth our consolidated GAAP Net Income (Loss) Attributable to Common Shareholders for the year ended December 31, 2024 compared to the same period in 2023. For additional information regarding the financial results for the years ended December 31, 2024 and 2023, see the discussions of Results of Operations below.
In the event of a credit downgrade below investment grade and a resulting requirement to provide incremental collateral exceeding our available capacity and cash on hand, we would be required to access additional liquidity through the capital markets.
In the event of a credit downgrade below investment grade and a resulting requirement to provide incremental collateral exceeding available capacity under our credit facilities and cash on hand, we would be required to access additional liquidity through the capital markets.
See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on project finance credit facilities and nonrecourse debt. Credit Facilities We meet our short-term liquidity requirements primarily through the issuance of commercial paper.
See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on project finance credit facilities and nonrecourse debt. Credit Facilities We meet our short-term liquidity requirements primarily through the issuance of commercial paper.
We may use our credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit. See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on our credit facilities.
We may use our credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on our credit facilities.
Transactions within the scope of 57 Table of Contents Revenue from Contracts with Customers generally include non-derivative agreements, contracts that are designated as NPNS and spot-market energy commodity sales, including settlements with RTOs and ISOs. The determination of our retail power and natural gas sales to individual customers is based on systematic readings of customer meters, generally monthly.
Transactions within the scope of Revenue from Contracts with Customers generally include non-derivative agreements, contracts that are designated as NPNS and spot-market energy commodity sales, including settlements with RTOs and ISOs. The determination of our retail power and natural gas sales to individual customers is based on systematic readings of customer meters, generally monthly.
We recognize revenues in the period in which the performance obligations within contracts with customers are satisfied, which generally occurs when power, natural gas and other energy-related commodities and services are provided to the customer.
We recognize revenues in the period in which the performance obligations within contracts with customers are satisfied, which generally occurs when power, natural gas and other energy-related products and services are provided to the customer.
In certain cases, our generating assets may be evaluated on an individual basis where those assets are contracted on a long-term basis with a third-party and operations are independent of other generating assets (typically contracted renewable generation). On a quarterly basis, we assess our long-lived assets or asset groups for indicators of potential impairment.
In certain cases, our generating assets may be evaluated on an individual basis where those assets are contracted on a long-term basis with a third party and operations are independent of other generating assets (typically contracted renewable generation). 54 Table of Contents On a quarterly basis, we assess our long-lived assets or asset groups for indicators of potential impairment.
Determining whether a contract qualifies for NPNS requires judgment on whether the contract will physically deliver and requires that management ensure compliance with all associated qualification and documentation requirements. Commodity Contracts. Identification of a commodity contract as an economic hedge requires us to determine that the contract is in accordance with the RMP.
Determining whether a contract qualifies for NPNS requires judgment on whether the contract will physically deliver and requires that management ensure compliance with all associated qualification and documentation requirements. 55 Table of Contents Commodity Contracts. Identification of a commodity contract as an economic hedge requires us to determine that the contract is in accordance with the RMP.
See Note 1 — Basis of Presentation and Note 15 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information regarding the accounting for the defined benefit pension and OPEB plans.
See Note 1 — Basis of Presentation and Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information regarding the accounting for the defined benefit pension and OPEB plans.
Changes in management’s assessment of contracts and the liquidity of their markets, and changes in authoritative guidance, could result in previously excluded contracts becoming in scope of new authoritative guidance. 54 Table of Contents All derivatives are recognized on the balance sheet at their fair value, except for certain derivatives that qualify for, and are elected under, NPNS.
Changes in management’s assessment of contracts and the liquidity of their markets, and changes in authoritative guidance, could result in previously excluded contracts becoming in scope of new authoritative guidance. All derivatives are recognized on the balance sheet at their fair value, except for certain derivatives that qualify for, and are elected under, NPNS.
Our access to external financing on reasonable terms depends on our credit ratings and current overall capital market business conditions. If these conditions deteriorate to the extent that we no longer have access to the capital markets at reasonable terms, we have access to credit facilities with aggregate bank commitments of $6.1 billion.
Our access to external financing on reasonable terms depends on our credit ratings and current overall capital market business conditions. If these conditions deteriorate to the extent that we no longer have access to the capital markets at reasonable terms, we have access to credit facilities with aggregate bank commitments of $9 billion.
Capacity prices have a significant impact on our operating revenues and purchased power and fuel expense. We report capacity on a net monthly basis within each region in either Operating revenues or Purchased power and fuel expense, depending on our net monthly position. The following table presents the average capacity prices ($/MW Day) for each of our major regions.
We report capacity on a net monthly basis within each region in either Operating revenues or Purchased power and fuel expense, depending on our net monthly position. The following table presents the average capacity prices ($/MW Day) for each of our major regions.
The lowest level of independent cash flows is determined by the evaluation of several factors, including the geographic dispatch of the generation units and the hedging strategies related to those units.
The lowest level of independent cash flows is determined by the evaluation of several factors, including the geographic dispatch of the generating units and the hedging strategies related to those units.
Any decrease in the estimated undiscounted future cash flows relating to the ARO are treated as a modification of an existing ARO cost layer and, therefore, are measured using the average historical CARFR rates used in creating the initial ARO cost 51 Table of Contents layers.
Any decrease in the estimated undiscounted future cash flows relating to the ARO are treated as a modification of an existing ARO cost layer and, therefore, are measured using the average historical CARFR rates used in creating the initial ARO cost layers.
Our business is capital intensive and requires considerable capital resources. We 67 Table of Contents annually evaluate our financing plan and credit line sizing, focusing on maintaining our investment grade ratings while meeting our cash needs to fund capital requirements, including construction expenditures, retire debt, pay dividends, fund pension and OPEB obligations, and invest in new and existing ventures.
Our business is capital intensive and requires considerable capital resources. We annually evaluate our financing plan and credit line sizing, focusing on maintaining our investment grade ratings while meeting our cash needs to fund capital requirements, including construction expenditures, retire debt, pay dividends, fund pension and OPEB obligations, and invest in new and existing ventures.
(b) See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on mark-to-market gains and losses.
(b) See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on mark-to-market gains and losses.
If a project financing entity does not maintain compliance with its specific debt covenants, there could be a requirement to accelerate repayment of the associated debt or other project-related borrowings earlier than the stated maturity dates.
If 74 Table of Contents a project financing entity does not maintain compliance with its specific debt covenants, there could be a requirement to accelerate repayment of the associated debt or other project-related borrowings earlier than the stated maturity dates.
The cash flows from our generating units are generally evaluated at a regional portfolio level (asset group) given the interdependency of cash flows generated from the customer supply and 53 Table of Contents risk management activities within each region.
The cash flows from our generating units are generally evaluated at a regional portfolio level (asset group), given the interdependency of cash flows generated from the customer supply and risk management activities within each region.
Accounting for Derivative Instruments We use derivative instruments to manage commodity price risk, foreign currency exchange risk and interest rate risk related to ongoing business operations. Our derivative activities are in accordance with our Risk Management Policy (RMP). See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
Accounting for Derivative Instruments We use derivative instruments to manage commodity price risk, foreign currency exchange risk and interest rate risk related to ongoing business operations. Our derivative activities are in accordance with our RMP. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
The price of electricity is impacted by several variables, including but not limited to, the price of fuels, generation resources in the region, weather, on-going competition, emerging technologies, as well as macroeconomic and regulatory factors.
The price of electricity is impacted by several variables, including but not limited to, the price of fuels, generation resources in the region, weather, ongoing competition, emerging technologies, as well as macroeconomic and regulatory factors.
Goodwill is assigned to reporting units that are expected to benefit from the acquisition. Goodwill is not amortized, instead it is subject to an impairment assessment at least annually to consider whether the 52 Table of Contents reporting unit fair value is more likely than not less than the carrying amount.
Goodwill is assigned to reporting units that are expected to benefit from the acquisition. Goodwill is not amortized, instead it is subject to an impairment assessment at least annually to consider whether the reporting unit fair value is more likely than not less than the carrying amount.
For OPEB plan assets and certain pension plan assets, we use fair value to calculate the MRV. Discount Rate. The discount rates are determined by developing a spot rate curve based on the yield to maturity of a universe of high-quality non-callable (or callable with make-whole provisions) bonds with similar maturities to the related pension and OPEB obligations.
For OPEB plan assets and certain pension plan assets, we use fair value to calculate the MRV. 56 Table of Contents Discount Rate. Discount rates are determined by developing a spot rate curve based on the yield to maturity of high-quality non-callable (or callable with make-whole provisions) bonds with similar maturities to the pension and OPEB obligations.
Liquidity and Capital Resources For discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, refer to Liquidity and Capital Resources of MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the 2022 Form 10-K which was filed with the SEC on February 16, 2023.
Liquidity and Capital Resources For discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Liquidity and Capital Resources of MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the 2023 Form 10-K which was filed with the SEC on February 27, 2024.
Other Key Business Drivers Russia and Ukraine Conflict We are closely monitoring developments of the Russia and Ukraine conflict including United States, United Kingdom, European Union, and Canadian sanctions, and pending legislation that may impact exports and imports of Russian nuclear fuel supply and enrichment activities, as well as the potential for Russia to limit energy deliveries.
Other Key Business Drivers Russia and Ukraine Conflict We are closely monitoring developments of the ongoing Russia and Ukraine conflict, including United States, United Kingdom, European Union, and Canadian sanctions, and legislation that may impact exports and imports of Russian nuclear fuel supply and enrichment activities, as well as the potential for Russia to limit fuel deliveries. The U.S.
Our future cash flows from operating activities may be affected by future demand for, and market prices of, energy and our ability to continue to produce and supply power at competitive costs, as well as to obtain collections from customers and the sale of certain receivables.
Our future cash flows from operating activities may be affected by future demand for, and market prices of, energy and our ability to continue to produce and supply power at competitive costs, as well as to obtain collections from customers.
The price received (paid) for each CMC is determined by the IPA monthly and is based on the accepted CMC bid, less the sum of (a) monthly weighted average PJM busbar price, (b) ComEd zone capacity price and (c) any federal tax credit or subsidy received, and is subject to a customer protection cap ($30.30 per MWh for initial delivery period June 1, 2022 through May 31, 2023 and $32.50 per MWh for the period June 1, 2023 through May 31, 2024).
The price received (paid) for each CMC is determined by the IPA monthly and is based on the accepted CMC bid, less the sum of (a) monthly weighted average PJM Busbar price, (b) ComEd zone capacity price and (c) any federal tax credit or subsidy received by each qualifying plant and is subject to a customer protection cap ($30.30 per MWh for initial delivery period June 2022 through May 2023, $32.50 per MWh for the period June 2023 through May 2024 and $33.43 per MWh for the period June 2024 through May 2025).
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in millions, unless otherwise noted) Executive Overview We are a supplier of carbon-free energy. Our generating capacity primarily consists of nuclear, wind, solar, natural gas and hydroelectric assets.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in millions, unless otherwise noted) Executive Overview We are a producer of carbon-free energy and a supplier of energy products and services. Our generating capacity includes primarily nuclear, wind, solar, natural gas, and hydroelectric assets.
See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on collateral. • Option premiums paid, net relate to options contracts that we purchase and sell as part of our established policies and procedures to manage risks associated with market fluctuations in commodity 69 Table of Contents prices.
See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on collateral. • Option premiums received (paid), net relate to options contracts that we purchase and sell as part of our established policies and procedures to manage risks associated with market fluctuations in commodity prices.
Management evaluates each position based solely on the technical merits and facts and circumstances of the position, assuming the 56 Table of Contents position will be examined by a taxing authority having full knowledge of all relevant information.
Management evaluates each position based on the technical merits and facts and circumstances of the position, assuming the position will be examined by a taxing authority having full knowledge of all relevant information.
Through our integrated business operations, we sell electricity, natural gas, and other energy-related products and sustainable solutions to various types of customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers in competitive markets across multiple geographic regions. We have five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions.
Through our integrated business operations, we sell electricity, natural gas, and other energy-related products and sustainable solutions to various types of customers, including distribution utilities, municipalities, cooperatives, and commercial, 49 Table of Contents industrial, public sector, and residential customers in markets across multiple geographic regions. We have five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions.
For the majority of pension plan assets, we use a calculated value that adjusts for 20% of the difference between fair value and expected MRV of plan assets. Use of this calculated value approach enables less volatile expected asset returns to be recognized as a component of pension cost from year to year.
For the majority of pension plan assets, we use a calculated value that adjusts for 20% of the difference between fair value and expected MRV, resulting in less volatile expected asset returns to be recognized as a component of pension cost from year to year.
The accounting treatment for revenue recognition is based on the nature of the underlying transaction and applicable authoritative guidance. We primarily apply the Revenue from Contracts with Customers and Derivatives Revenues guidance to recognize revenue, as discussed in more detail below. Revenue from Contracts with Customers.
The accounting treatment for revenue recognition is based on the nature of the underlying transaction and applicable authoritative guidance. We primarily apply the Revenue from Contracts with Customer, Government Assistance, and Derivatives and Hedging guidance to recognize revenue, as discussed in more detail below. Revenue from Contracts with Customers.
As of December 31, 2023, we have access to facilities with aggregate bank commitments of $6.1 billion. We had access to the commercial paper markets and had availability under our revolving credit facilities during 2023 to fund our short-term liquidity needs, when necessary.
As of December 31, 2024, we have access to facilities with aggregate bank commitments of $9 billion. We had access to the commercial paper markets and had availability under our revolving credit facilities during 2024 to fund our short-term liquidity needs, when necessary.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK and Note 16 — Derivative Financial Instruments and Note 18 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative instruments.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK and Note 15 — Derivative Financial Instruments and Note 17 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding derivative instruments.
The following table presents nuclear fleet operating data for our plants, which reflects ownership percentage of stations operated by us, excluding Salem and STP, which are operated by PSEG and STPNOC, respectively.
The following table presents nuclear fleet operating data for our plants that reflects our ownership percentage for stations operated by us and excludes Salem and STP, which are operated by PSEG and STPNOC, respectively.
The nuclear fleet capacity factor presented in the table is defined as the ratio of the actual output of a plant over a period of time to its output if the plant had operated at its net monthly mean capacity for that time period.
The nuclear fleet capacity factor presented in the table is defined as the ratio of the actual output of a unit (or combination of units) over a period of time to its output if the unit had operated at net monthly mean capacity for that time period.
Variable rate interest obligations are estimated based on rates as of December 31, 2023. (b) Capacity payments associated with contracted generation lease agreements are net of sublease and capacity offsets of $47 million and $275 million for 2024 and beyond 2024, respectively and $322 million in total.
Variable rate interest obligations are estimated based on rates as of December 31, 2024. (b) Capacity payments associated with contracted generation lease agreements are net of sublease and capacity offsets of $47 million and $230 million for 2025 and beyond 2025, respectively and $277 million in total.
Beginning in May 2023, these redemptions are based on SOFR + the variable interest rate of 2.975% - 3.225%. See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the West Medway II nonrecourse debt.
Beginning in May 2023, these redemptions are based on SOFR + the variable interest rate of 2.975% - 3.225%. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the West Medway II nonrecourse debt. (e) The nonrecourse debt has an average blended interest rate.
(b) Excludes any retired sites. See Note 1 — Basis of Presentation and Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding accounting for nuclear AROs.
(b) Excludes Crane and Zion. See Note 1 — Basis of Presentation and Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding accounting for nuclear AROs.
The following table illustrates the effects of changing certain ARO assumptions while holding all other assumptions constant: Change in ARO Assumption Increase (Decrease) to ARO as of December 31, 2023 Cost escalation studies Uniform increase in escalation rates of 50 basis points $ 1,860 Probabilistic cash flow models Increase the estimated costs to decommission the nuclear plants by 10 percent 770 Increase the likelihood of the DECON scenario by 10 percent and decrease the likelihood of the SAFSTOR scenario by 10 percent (a) 140 Shorten each unit's probability-weighted operating life assumption by 10 percent (b) 220 Extend the estimated date for DOE acceptance of SNF to 2040 (80) __________ (a) Excludes any sites in which management has committed to a specific decommissioning approach.
The following table illustrates the effects of changing certain ARO assumptions while holding all other assumptions constant: Change in ARO Assumption Increase (Decrease) to ARO as of December 31, 2024 Cost escalation studies Uniform increase in escalation rates of 50 basis points $ 2,290 Probabilistic cash flow models Increase the estimated costs to decommission the nuclear plants by 10 percent 770 Increase the likelihood of the DECON scenario by 10 percent and decrease the likelihood of the SAFSTOR scenario by 10 percent (a) 130 Shorten each unit's probability-weighted operating life assumption by 10 percent (b) 430 Extend the estimated date for DOE acceptance of SNF to 2045 (40) __________ (a) Excludes any sites in which management has committed to a specific decommissioning approach.
Following the latest annual update, on August 16, 2023 the ZEC price for the delivery period beginning June 1, 2022 through May 31, 2023 was calculated to be $9.88. (c) See Note 4 — Revenue from Contracts with Customers of the Combined Notes to Consolidated Financial Statements for additional information on the Illinois ZEC program. Illinois CMC Price.
Following the latest annual update in August 2024, the ZEC price for the delivery period beginning June 2023 through May 2024 was calculated to be $9.95. (c) See Note 4 — Revenue from Contracts with Customers of the Combined Notes to Consolidated Financial Statements for additional information on the Illinois ZEC program. Illinois CMC Price.
Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on derivative contracts. • Decrease in cash outflows for pension and non-pension postretirement benefit contributions is primarily due to our annual qualified pension contribution of $21 million and $192 million made in July 2023 and February 2022, respectively.
Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on derivative contracts. • Increase in cash outflows for pension and non-pension postretirement benefit contributions is primarily due to our annual qualified pension contribution of $161 million and $21 million made in February 2024 and July 2023, respectively.
Nuclear Decommissioning Asset Retirement Obligations The AROs associated with decommissioning our nuclear un its were $13.9 billion at December 31, 2023. The authoritative guidance requires that we estimate our obligation for the future decommissioning of our nuclear generating plants.
Nuclear Decommissioning Asset Retirement Obligations The AROs associated with decommissioning our nuclear un its were $12.2 billion at December 31, 2024. The authoritative guidance requires that we estimate our obligation for the future decommissioning of our nuclear generating plants.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations summarizes results for the year ended December 31, 2023 compared to the year ended December 31, 2022. For discussion of the year ended December 31, 2022 48 Table of Contents compared to the year ended December 31, 2021, refer to ITEM 7.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations summarizes results for the year ended December 31, 2024 compared to the year ended December 31, 2023. For discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to ITEM 7.
See Note 6 — Accounts Receivable of the Combined Notes to Consolidated Financial Statements for additional information on the sales of customer accounts receivable. • Depending upon whether we are in a net mark-to-market liability or asset position, collateral may be required to be posted with or collected from our counterparties.
See Note 6 — Government Assistance of the Combined Notes to Consolidated Financial Statements for additional information. • Depending upon whether we are in a net mark-to-market liability or asset position, collateral may be required to be posted with or collected from our counterparties, respectively.
Dividends Quarterly dividends declared by our Board of Directors during 2023 and for the first quarter of 2024 were as follows: Period Declaration Date Shareholder of Record Date Dividend Payable Date Cash per Share First Quarter of 2023 February 15, 2023 February 27, 2023 March 10, 2023 $ 0.2820 Second Quarter of 2023 April 25, 2023 May 12, 2023 June 9, 2023 $ 0.2820 Third Quarter of 2023 August 1, 2023 August 14, 2023 September 8, 2023 $ 0.2820 Fourth Quarter of 2023 November 1, 2023 November 17, 2023 December 8, 2023 $ 0.2820 First Quarter of 2024 February 26, 2024 March 8, 2024 March 19, 2024 $ 0.3525 Credit Matters and Cash Requirements We fund liquidity needs for capital expenditures, working capital, energy hedging and other financial commitments through cash flows from operations, public debt offerings, commercial paper markets and large, diversified credit facilities.
Dividends Quarterly dividends declared by our Board of Directors during 2024 and for the first quarter of 2025 were as follows: Period Declaration Date Shareholder of Record Date Dividend Payable Date Cash per Share First Quarter of 2024 February 26, 2024 March 8, 2024 March 19, 2024 $ 0.3525 Second Quarter of 2024 May 1, 2024 May 29, 2024 June 10, 2024 $ 0.3525 Third Quarter of 2024 July 30, 2024 August 12, 2024 September 6, 2024 $ 0.3525 Fourth Quarter of 2024 November 1, 2024 November 15, 2024 December 6, 2024 $ 0.3525 First Quarter of 2025 February 18, 2025 March 7, 2025 March 18, 2025 $ 0.3878 Credit Matters and Cash Requirements We fund liquidity needs for capital expenditures, working capital, energy hedging and other financial commitments through cash flows from operations, public debt offerings, commercial paper markets and large, diversified credit facilities.
Approximately 44% - 47% of projected capital expenditures are for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels. This is a strategic decision in response to the potential for the continuing Russia and Ukraine conflict to impact our long-term nuclear fuel supply.
Approximately 35% of projected capital expenditures are for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels in response to the potential for the continuing Russia and Ukraine conflict to impact our long-term nuclear fuel supply.
However, these measures are not a presentation defined under GAAP and may not be comparable to other companies’ presentations or be more useful than the GAAP information provided elsewhere in this report. 2023 2022 Nuclear fleet capacity factor 94.4 % 94.8 % Refueling outage days 256 212 Non-refueling outage days 51 54 ZEC Prices.
However, these measures are not a presentation defined under GAAP and may not be comparable to other companies’ presentations or be more useful than the GAAP information provided elsewhere in this report. 2024 2023 Nuclear fleet capacity factor 94.6 % 94.4 % Refueling outage days 230 256 Non-refueling outage days 36 51 Nuclear PTC.
Refer to Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on short-term borrowings. • Refer to ITEM 5. — MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES for additional information on dividend restrictions.
Refer to Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. • Refer to ITEM 5. — MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES for additional information on dividends.
Mark-to-market revenues and expenses include inception gains or losses on new transactions where the fair value is observable, unrealized gains and losses from changes in the fair value of open contracts, and realized gains and losses. Financial Results of Operations GAAP Results of Operations.
These derivative transactions primarily relate to commodity price risk management activities. Mark-to-market revenues and expenses include inception gains or losses on new transactions where the fair value is observable, unrealized gains and losses from changes in the fair value of open contracts, and realized gains and losses. Financial Results of Operations GAAP Results of Operations.
The mortality assumption is composed of a base table that represents the current expectation of life expectancy of the population adjusted by an improvement scale that attempts to anticipate future improvements in life expectancy. At separation and upon remeasurement as of December 31, 2023, we utilized the mortality tables and projection scales released by the SOA.
The mortality assumption includes a base table for the current expectation of life expectancy of the population adjusted by an improvement scale that attempts to anticipate future improvements in life expectancy. Upon remeasurement as of December 31, 2023 and 2024, we utilized the mortality tables and projection scales released by the SOA. Sensitivity to Changes in Key Assumptions.
A loss of investment grade credit rating would have required a three notch downgrade by S&P or a two notch downgrade by Moody's from their current levels of BBB+ and Baa2, to BB+ and Ba1 or below. respectively. As of December 31, 2023, we had $3.1 billion of available capacity and $0.4 billion of cash on hand.
A loss of investment grade credit rating would have required a three-notch downgrade by S&P or Moody's from their current levels as of December 31, 2024 of BBB+ and Baa1, to BB+ and Ba1 or below, respectively. As of December 31, 2024, we had $6.7 billion of available capacity under our credit facilities and $3 billion of cash on hand.
The spot rates are used to discount the estimated future benefit distribution amounts under the pension and OPEB plans. The discount rate is the single level rate that produces the same result as the spot rate curve. We utilize an analytical tool developed by our actuaries to determine the discount rates. Mortality.
These spot rates discount the estimated future benefit distribution amounts for the pension and OPEB plans. The discount rate is the single level rate that matches the spot rate curve. We utilize an analytical tool developed by our actuaries to determine these rates. Mortality.
At the same time, regulators are gaining more information about decommissioning activities which could result in changes to existing decommissioning requirements. In addition, as more nuclear plants are retired, it is possible that technological advances will be identified that could create efficiencies and lead to a reduction in decommissioning costs.
At the same time, regulators are gaining more information about decommissioning activities which could result in changes to existing decommissioning requirements. In addition, over time, it is possible that technological advances will be identified that could create efficiencies and lead to a reduction in decommissioning costs. The amount of NDT funds could also impact the timing of the decommissioning activities.
The determination of fair value is driven by both internal assumptions that include significant unobservable inputs, such as revenue and generation forecasts, projected capital, maintenance expenditures, and discount rates, as well as information from various public, financial and industry sources.
The determination of fair value is driven by both internal assumptions that include significant unobservable inputs, such as revenue and generation forecasts, projected capital, maintenance expenditures, and discount rates, as well as information from various public, financial and industry sources. Depreciable Lives of Property, Plant, and Equipment We have significant investments in electric generating assets.
Beginning in June 2023, these redemptions are based on SOFR + 2.76%. See Note 17 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the CR nonrecourse debt. (b) The interest rate for long-term debt redemptions prior to May 2023 were based on LIBOR + 2.875%.
See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the CR nonrecourse debt. (d) The interest rate for long-term debt redemptions prior to May 2023 were based on LIBOR + 2.875%.
(f) These amounts represent our expected contributions to our qualified pension plans. Qualified pension contributions for years after 2029 are not included. See Note 3 — Regulatory Matters and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information of our other commitments potentially triggered by future events.
(f) These amounts represent our expected contributions to our qualified pension plans. See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information of our other commitments potentially triggered by future events.
Our borrowings are not subject to default or prepayment as a result of a downgrade of our securities, although such a downgrade could increase fees and interest charges under our credit agreements.
Our borrowings are not subject to default or prepayment as a result of a downgrade of our securities, although such a downgrade could increase fees and interest charges under our credit agreements. Our credit ratings were affirmed following the announcement of our proposed acquisition of Calpine.
The estimation of asset useful lives requires management judgment, supported by formal depreciation studies of historical asset retirement experience. Depreciation studies are generally conducted periodically if an event, regulatory action, or change in retirement patterns indicate an update is necessary.
Under both methods, a reporting entity depreciates the assets over the average life of the assets in the group. The estimation of asset useful lives requires management judgment, supported by formal depreciation studies of historical asset retirement experience. Depreciation studies are generally conducted periodically if an event, regulatory action, or change in retirement patterns indicate an update is necessary.
The assumptions are updated annually and upon any interim remeasurement of the plan obligations. Pension and OPEB plan assets include equity securities, including U.S. and international securities, and fixed income securities, as well as certain alternative investment classes such as real estate, private equity, private credit, and hedge funds. 55 Table of Contents Expected Rate of Return on Plan Assets.
The assumptions are updated annually and during any interim remeasurement. Pension and OPEB plan assets include U.S. and international equity securities, fixed income securities, and alternative investments such as real assets, private equity, private credit, and hedge funds. Expected Rate of Return on Plan Assets.
Therefore, the discount rate sensitivities above cannot necessarily be extrapolated for larger increases or decreases in the discount rate. Additionally, we utilize a liability-driven hedging investment strategy for our pension asset portfolio. The sensitivities shown above do not reflect the offsetting impact that changes in discount rates may have on pension asset returns.
Therefore, the sensitivities above cannot be extrapolated for larger changes in the discount rate. Additionally, our liability-driven hedging investment strategy for our pension asset portfolio is not reflected in the sensitivities shown, which do not account for the offsetting impact that discount rate changes may have on pension asset returns.
See Note 13 — Intangible Assets of the Combined Notes to Consolidated Financial Statements for additional information. Impairment of Long-Lived Assets We regularly monitor and evaluate the carrying value of long-lived assets or asset groups for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.
Impairment of Long-Lived Assets We regularly monitor and evaluate the carrying value of long-lived assets or asset groups for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.
Cash Flows from Financing Activities The following table provides a summary of the change in cash flows from financing activities for the years ended December 31, 2023 and 2022: For the Years Ended December 31, Cash flows from financing activities 2023 2022 Change Long-term debt, net $ 3,027 $ (1,406) $ 4,433 Changes in short-term borrowings, net 485 (923) 1,408 Dividends paid on common stock (366) (185) (181) Repurchases of common stock (992) — (992) Contributions from Exelon — 1,750 (1,750) Other financing activities 42 (35) 77 Net cash flows provided by (used in) financing activities $ 2,196 $ (799) $ 2,995 70 Table of Contents Significant financing cash flow impacts for 2023 and 2022 were as follows: • Long-term debt, net, varies due to debt issuances and redemptions each year.
Cash Flows from Financing Activities The following table provides a summary of the change in cash flows from financing activities for the years ended December 31, 2024 and 2023: For the Years Ended December 31, Cash flows from financing activities 2024 2023 $ Change Long-term debt, net $ 799 $ 3,027 $ (2,228) Changes in short-term borrowings, net (1,644) 485 (2,129) Dividends paid on common stock (444) (366) (78) Repurchases of common stock (999) (992) (7) Other financing activities (1) 42 (43) Net cash flows provided by (used in) financing activities $ (2,289) $ 2,196 $ (4,485) Significant financing cash flow impacts for 2024 and 2023 were as follows: • Long-term debt, net varies due to debt issuances and redemptions each year.
In addition, periodic reviews are performed to assess the adequacy of other environmental reserves. These matters, if resolved in a manner different from the estimate, could have a significant impact in the consolidated financial statements. See Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information. Other, Including Personal Injury Claims.
These matters, if resolved in a manner different from the estimate, could have a material impact to our consolidated financial statements. See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information. Other, Including Personal Injury Claims.
If we had lost our investment grade credit ratings as of December 31, 2023, we would have been required to provide incremental collateral estimated to be approximately $1.9 billion to meet collateral obligations for derivatives, non-derivatives, NPNS, and applicable payables and receivables, net of the contractual right of offset under master netting agreements.
If we had lost our investment grade credit ratings as of December 31, 2024, we would have been required to provide incremental collateral estimated to be approximately $1.9 billion to meet collateral obligations for derivatives, non-derivatives, NPNS, and applicable payables and receivables, net of the contractual right of offset under master netting agreements. 72 Table of Contents See Note 15 — Derivative Financial Instruments and Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.
To estimate that liability, we use an internally-developed, probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple decommissioning outcome scenarios. As a result of nuclear plant retirements in the industry, in recent years, nuclear operators and third-party service providers are obtaining more information about costs associated with decommissioning activities.
To estimate that liability, we use an internally-developed, probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple decommissioning outcome scenarios. Over the past decade, nuclear operators and third-party service providers have continued to obtain more information about costs associated with decommissioning activities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

31 edited+2 added−3 removed11 unchanged
Biggest changeExchange Traded Transactions We enter into commodity transactions on NYMEX, ICE, NASDAQ, NGX, and the Nodal exchange (each an Exchange and, collectively, Exchanges). The Exchange clearinghouses act as the counterparty to each trade. Transactions on the Exchanges must adhere to comprehensive collateral and margining requirements. As a result, transactions on Exchanges are significantly collateralized and have limited counterparty credit risk.
Biggest changeNon-performance or non-payment by a major member of an RTO or ISO could result in a material adverse impact on our consolidated financial statements. Exchange Traded Transactions We enter commodity transactions on NYMEX, ICE, NASDAQ, NGX, and the Nodal exchange (each an Exchange and, collectively, Exchanges). The Exchange clearinghouses act as the counterparty to each trade.
Market price risk exposure is the risk of a change in the value of unhedged positions. The forecasted market price risk exposure is the risk of a change in the value of unhedged positions.
The forecasted market price risk exposure is the risk of a change in the value of unhedged positions.
Credit-Risk-Related Contingent Features As part of the normal course of business, we routinely enter into physically or financially settled contracts for the purchase and sale of capacity, electricity, fuels, emissions allowances, and other energy-related products.
Credit-Risk-Related Contingent Features As part of the normal course of business, we routinely enter physically or financially settled contracts for the purchase and sale of capacity, electricity, fuels, emissions allowances, and other energy-related products.
Beginning in 2024, our nuclear fleet is eligible for the nuclear PTC provided by the IRA, an important tool in managing commodity price risk for each nuclear unit not already receiving state support.
Beginning in 2024, our existing nuclear fleet is eligible for the nuclear PTC provided by the IRA, an important tool in managing commodity price risk for each nuclear unit not already receiving state support.
Our employee benefit plan trusts also hold investments in equity and debt securities. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates for sensitivity analysis of key assumptions in the valuation of our Pension and OPEB obligations. 80 Table of Contents
Our employee benefit plan trusts also hold investments in equity and debt securities. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates for sensitivity analysis of key assumptions in the valuation of our Pension and OPEB obligations. 79 Table of Contents
(b) Includes derivative contracts acquired or sold through upfront payments or receipts of cash, excluding option premiums and the associated amortizations. Fair Values The following table presents maturity and source of fair value for mark-to-market commodity contract net assets (liabilities).
(b) Includes derivative contracts acquired or sold through upfront payments or receipts of cash, excluding option premiums and the associated amortizations. 77 Table of Contents Fair Values The following table presents maturity and source of fair value for mark-to-market commodity contract net assets (liabilities).
The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of credit risk.
The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of credit risk.
Geopolitical developments, including the Russia and Ukraine conflict and United States, United Kingdom, European Union, and Canadian sanctions against Russia, have the potential to impact delivery from multiple suppliers in the international uranium processing industry. Non-performance by these counterparties could have a material adverse impact on our consolidated financial statements.
Geopolitical developments, including the Russia and Ukraine conflict and United States, United Kingdom, European Union, and Canadian sanctions against Russia, have the potential to impact delivery from multiple suppliers in the international uranium processing industry. Non-performance by these counterparties could have a material adverse impact on our consolidated financial statements. See ITEM 7.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks associated with adverse changes in commodity prices, counterparty credit, interest rates, and equity prices. We manage these risks through risk management policies and objectives for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of risk 76 Table of Contents exposures.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks associated with adverse changes in commodity prices, counterparty credit, interest rates, and equity prices. We manage these risks through risk management policies and objectives for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of risk exposures.
We use derivative instruments as economic hedges to mitigate exposure to fluctuations in commodity prices. We expect the settlement of the majority of our economic hedges will occur during 2024 through 2026. In general, increases and decreases in forward market prices have a positive and negative impact, respectively, on owned and contracted generation positions that have not been hedged.
We use derivative instruments as economic hedges to mitigate exposure to fluctuations in commodity prices. We expect the settlement of the majority of our economic hedges will occur during 2025 through 2027. In general, increases and decreases in forward market prices have a positive and negative impact, respectively, on owned and contracted generation positions that have not been hedged.
We actively monitor the investment performance of the trust funds and periodically review asset allocations in accordance with our NDT fund investment policy. A hypothetical 25 basis points increase in interest rates and 10% decrease in equity prices would have resulted in a $885 million reduction in the fair value of our NDT trust assets as of December 31, 2023.
We actively monitor the investment performance of the trust funds and periodically review asset allocations in accordance with our NDT fund investment policy. A hypothetical 25 basis points increase in interest rates and 10% decrease in equity prices would have resulted in a $943 million reduction in the fair value of our NDT trust assets as of December 31, 2024.
See Note 18 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.
See Note 17 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.
To manage foreign exchange rate exposure associated with international energy purchases in currencies other than U.S. dollars, we utilize foreign currency derivatives, which are typically designated as economic hedges. See 79 Table of Contents Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
To manage foreign exchange rate exposure associated with international energy purchases in currencies other than U.S. dollars, we utilize foreign currency derivatives, which are typically designated as economic hedges. See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.
A hypothetical 50 basis point increase in the interest rates associated with unhedged variable-rate debt (excluding Commercial Paper) and fixed-to-floating swaps would not have resulted in a material decrease in our pre-tax income for the year ended December 31, 2023.
A hypothetical 50 basis point increase in the interest rates associated with unhedged variable-rate debt (excluding Commercial Paper) and fixed-to-floating swaps would not have resulted in a material decrease in our earnings for the year ended December 31, 2024.
(b) Amounts are shown net of collateral paid/(received) from counterparties (and offset against mark-to-market assets and liabilities) of $2,400 million at December 31, 2023. 78 Table of Contents Credit Risk We would be exposed to credit-related losses in the event of non-performance by counterparties that execute derivative instruments.
(b) Amounts are shown net of collateral paid to and received from counterparties (and offset against mark-to-market assets and liabilities) of $586 million at December 31, 2024. Credit Risk We would be exposed to credit-related losses in the event of non-performance by counterparties that execute derivative instruments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Other Key Business Drivers for more information on the Russia and Ukraine conflict. Trading and Non-Trading Marketing Activities The following table provides detail on changes in our commodity mark-to-market net asset or liability balance sheet position from December 31, 2021 to December 31, 2023.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Other Key Business Drivers for more information on the Russia and Ukraine conflict. Trading and Non-Trading Marketing Activities The following table provides detail on changes in our commodity mark-to-market net assets (liabilities) balance sheet position from December 31, 2022 to December 31, 2024.
Liquidity and Capital Resources — Credit Matters and Cash Requirements — Credit Facilities for additional information. RTOs and ISOs We participate in all of the established wholesale spot energy markets that are administered by PJM, ISO-NE, NYISO, CAISO, MISO, SPP, AESO, and ERCOT.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Liquidity and Capital Resources — Credit Matters and Cash Requirements — Credit Facilities for additional information. RTOs and ISOs We participate in all of the established wholesale energy markets that are administered by PJM, ISO-NE, NYISO, CAISO, MISO, SPP, AESO, and ERCOT.
See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information regarding collateral requirements and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding the letters of credit supporting the cash collateral. We transact output through bilateral contracts.
See Note 15 — Derivative Financial Instruments and Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information regarding the letters of credit supporting the cash collateral. We sell output through bilateral contracts.
The forecasted market price risk exposure for our entire economic hedge portfolio associated with a $5/MWh reduction in the annual average around-the-clock energy price based on December 31, 2023 market conditions and hedged position results in an immaterial impact to net income (loss) for 2024 and 2025, respectively.
The forecasted market price risk exposure for our entire economic hedge portfolio associated with a $5/MWh reduction in the annual average around-the-clock energy price based on December 31, 2024 market conditions and hedged position results in an immaterial impact to earnings for 2025 and 2026, respectively, largely due to the nuclear PTC.
See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on the balance sheet classification of the mark-to-market energy contract net assets (liabilities) recorded as of December 31, 2023 and 2022. 2023 2022 Beginning balance as of January 1 (a) $ 1,046 $ 1,622 Total change in fair value of contracts recorded in result of operations (2,530) (647) Reclassification to realized at settlement of contracts recorded in results of operations 1,561 (380) Changes in allocated collateral 1,502 386 Net option premium paid (received) (26) 177 Option premium amortization (183) (293) Upfront payments and amortizations (b) (249) 167 Foreign currency translation (13) 14 Ending balance as of December 31 (a) $ 1,108 $ 1,046 __________ (a) Amounts are shown net of collateral paid to and received from counterparties.
See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on the balance sheet classification of the mark-to-market commodity contract net assets (liabilities) recorded as of December 31, 2024 and 2023. 2024 2023 Beginning balance as of January 1 (a) $ 1,108 $ 1,046 Total change in fair value of contracts recorded in results of operations (654) (2,530) Reclassification to realized at settlement of contracts recorded in results of operations 1,934 1,561 Changes in allocated collateral (1,813) 1,502 Net option premium paid (received) (216) (26) Option premium amortization (32) (183) Upfront payments and amortizations (b) (10) (249) Foreign currency translation — (13) Ending balance as of December 31 (a) $ 317 $ 1,108 __________ (a) Amounts are shown net of collateral paid to and received from counterparties.
It indicates the drivers behind changes in the balance sheet amounts. This table incorporates the mark-to-market activities that are immediately recorded in earnings. This table excludes all NPNS contracts and does not segregate proprietary trading activity.
This table incorporates the mark-to-market activities that are immediately recorded in earnings. This table excludes all NPNS contracts and does not segregate proprietary trading activity.
After the separation on February 1, 2022, reporting on risk management issues is to the Executive Committee and the Audit and Risk Committee of the Board of Directors. Commodity Price Risk Commodity price risk is associated with price movements resulting from changes in supply and demand, fuel costs, market liquidity, weather conditions, governmental, regulatory, and environmental policies, and other factors.
The Executive Committee and the Audit and Risk Committee of the Board of Directors have oversight responsibilities for risk management. Commodity Price Risk Commodity price risk is associated with price movements resulting from changes in supply and demand, fuel costs, market liquidity, weather conditions, governmental, regulatory, and environmental policies, and other factors.
In the event of non-performance by these or other suppliers, we believe that replacement uranium concentrate can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.
To-date, we have not experienced any counterparty credit risk associated with these suppliers stemming from the Russia and Ukraine conflict. In the event of non-performance by these or other suppliers, we believe that replacement uranium concentrate can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.
See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information. Fuel Procurement We procure natural gas through long-term and short-term contracts, and spot-market purchases.
See Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information. Fuel Procurement We procure natural gas through long-term and short-term contracts, and spot-market purchases. Nuclear fuel is obtained predominantly through long-term contracts for uranium concentrates, conversion services, enrichment services, (or a combination thereof) and fabrication services, including contracts sourced from Russia.
Maturities Within Total Fair Value 2024 2025 2026 2027 2028 2029 and Beyond Normal Operations, Commodity derivative contracts (a)(b) : Actively quoted prices (Level 1) $ 103 $ 90 $ 46 $ 9 $ (8) $ — $ 240 Prices provided by external sources (Level 2) (276) 186 91 (1) (1) — (1) Prices based on model or other valuation methods (Level 3) 712 133 (9) 9 1 23 869 Total $ 539 $ 409 $ 128 $ 17 $ (8) $ 23 $ 1,108 __________ (a) Mark-to-market gains and losses on other economic hedge and trading derivative contracts that are recorded in the results of operations.
Maturities Within Total Fair Value 2025 2026 2027 2028 2029 2030 and Beyond Normal Operations, Commodity derivative contracts (a)(b) : Actively quoted prices (Level 1) $ 66 $ 67 $ 18 $ (8) $ (4) $ — $ 139 Prices provided by external sources (Level 2) 150 9 15 (1) 6 — 179 Prices based on model or other valuation methods (Level 3) 127 (58) (94) (18) (16) 58 (1) Total $ 343 $ 18 $ (61) $ (27) $ (14) $ 58 $ 317 __________ (a) Represents mark-to-market gains and losses on commodity derivative contracts that are recorded in the results of operations.
ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs in markets regulated by FERC. In these areas, power is traded through bilateral agreements between buyers and sellers and on the spot energy markets that are administered by the RTOs or ISOs, as applicable.
ERCOT is not subject to regulation by FERC but performs a similar function in Texas to that performed by RTOs and ISOs in markets regulated by FERC.
Interest Rate and Foreign Exchange Risk We use a combination of fixed-rate and variable-rate debt to manage interest rate exposure. We may also utilize interest rate swaps to manage our interest rate exposure.
Transactions on the Exchanges must adhere to comprehensive collateral and margining requirements. As a result, transactions on Exchanges are significantly collateralized and have limited counterparty credit risk. Interest Rate and Foreign Exchange Risk We use a combination of fixed-rate and variable-rate debt to manage interest rate exposure. We may also utilize interest rate swaps to manage our interest rate exposure.
Supply market conditions may make our procurement contracts subject to credit risk related to the potential non-performance of counterparties to deliver the contracted commodity or service at the contracted prices. We engage a diverse set of suppliers to ensure we can secure the nuclear fuel needed to continue to operate our nuclear fleet long-term.
The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions. Supply market conditions may make our procurement contracts subject to credit risk related to the potential non-performance of counterparties to deliver the contracted commodity or service at the contracted prices.
The credit policies of the RTOs and ISOs may, under certain circumstances, require that losses arising from the default of one member on spot energy market transactions be shared by the remaining participants. Non-performance or non-payment by a major member of an RTO/ISO could result in a material adverse impact on our consolidated financial statements.
For activities administered by an RTO or ISO, the RTO or ISO maintains financial assurance policies that are established and enforced by those administrators. The credit policies of the RTOs and ISOs may, under certain circumstances, require that losses arising from the default of one member be shared by the remaining participants.
The nuclear PTC provides increasing levels of support as unit revenues decline below levels established in the IRA and is further adjusted annually for inflation over the duration of the program. In locations and periods where our load serving activities do not naturally offset existing generation portfolio risk, remaining commodity price exposure is managed through portfolio hedging activities.
See Note 6 — Government Assistance of the Combined Notes to Consolidated Financial Statements for additional information on the nuclear PTC. In locations and periods where our load serving activities do not naturally offset existing generation portfolio risk, remaining commodity price exposure is managed through portfolio hedging activities.
In areas where there is no spot energy market, electricity is purchased and sold solely through bilateral agreements. For sales into the spot markets administered by an RTO or ISO, the RTO or ISO maintains financial assurance policies that are established and enforced by those administrators.
In these areas, power and related products are traded through bilateral agreements between buyers and sellers and in the energy markets 78 Table of Contents that are administered by the RTOs or ISOs, as applicable. In areas where there is no RTO or ISO to administer energy markets, electricity and related products are purchased and sold solely through bilateral agreements.
Removed
Nuclear fuel assemblies are obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, including contracts sourced from Russia, and contracted fuel fabrication services. The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions.
Added
The nuclear PTC provides increasing levels of support as unit revenues decline below levels established in the IRA and is further adjusted for inflation after 2024 through the duration of the program based on the GDP price deflator for the preceding calendar year.
Removed
Approximately 55% of our uranium concentrate requirements from 2024 through 2028 are supplied by three suppliers. To-date, we have not experienced any counterparty credit risk associated with these suppliers stemming from the Russia and Ukraine conflict.
Added
We engage a diverse set of suppliers to secure the nuclear fuel needed to continue to operate 76 Table of Contents our nuclear fleet long-term. Approximately 45% of our uranium concentrate requirements from 2025 through 2029 are supplied by three suppliers.
Removed
To-date, we have not experienced any delivery or non-performance issues from our suppliers, nor any degradation in the 77 Table of Contents quality of fuel we have received, and we are closely monitoring developments from the conflict. See ITEM 7.

Other CEG 10-K year-over-year comparisons