Exelon Energy Solutions

Exelon Energy Solutions:  Supply and Demand

Energy Supply Solutions

Selling wind energy in Pennsylvania

PECO WIND  is an environmentally-friendly power option provided by PECO and leading wind energy marketer Community Energy, Inc., of Wayne, Pa. When PECO launched the product in May 2004, it was the first wind energy product offered by a utility in Pennsylvania, but almost 10,000 customers had enrolled by the end of the year. By the end of 2005, the number of customers exceeded 22,000.  As a result, this program was ranked as the country’s seventh largest green-energy program on the National Renewable Energy Laboratory’s Top 10 list, published in March 2006. In 2005 PECO Wind customers purchased 43 million kWh of wind-generated electricity, the environmental equivalent of planting more than 3 million trees, or not driving 41 million miles.

On October 24, 2005, the EPA and the DOE recognized PECO WIND with the 2005 New Green Power Program of the Year award for its successful marketing of green energy. In November, Citizens for Pennsylvania’s Future (PennFuture) honored PECO with its Green Power Policymakers of the Year for its purchase of wind power to meet 10 percent of the electricity needs of the company headquarters.

PECO WIND is available to PECO’s residential and business customers in Bucks, Chester, Delaware, Montgomery, Philadelphia and York counties. Customers may elect to purchase wind energy either for their entire electric load or in increments of 100-kWh blocks up to 100 percent of their total load. For more information or to sign up, please call 1.866.WIND.321 or visit www.pecowind.com.

ComEd’s renewable energy portfolio

ComEd purchases electricity generated from landfill methane gas at 21 sites across northern Illinois and 2 wind energy projects in northern Illinois, totaling 105 MW. In 2004, Chicago passed the 1-MW milestone for installed photovoltaic systems with the completion of the Exelon Pavilions in Millennium Park that integrates photovoltaics into the building’s exterior walls – a first-of-its-kind system.  Other photovoltaic installations include systems on ComEd’s Chicago North and South facilities, several universities, affordable single-family housing units and the Cook County Domestic Violence Court House – at 110 kW, the largest single system in the city to date. For more on ComEd’s photovoltaic installations, visit www.chicagosolarpartnership.com.

Exelon’s Wind Generation Portfolio

Exelon Generation has long-term power purchase agreements (PPAs) with four wind generation projects in Pennsylvania and West Virginia, providing a total wind capacity of 153 MW. The installed capacity associated with these contracts easily makes Exelon the largest wholesale wind marketer east of the Mississippi.

The original rationale for Generation entering into its PPAs several years ago was the belief that the primary demand for wind would be to supply renewable energy credits to competitive retail suppliers and, with the approval of a wind block rider, through PECO. As the market developed, however, retail choice has not been a growing market. Instead, Exelon discovered a demand for wind energy among large institutions such as universities and government agencies.

And now the market has again shifted with increased focus on compliance demand associated with RPS laws in Maryland, New Jersey and Pennsylvania. New RPS requirements are also expected to be considered in other states in the future. Consequently, Exelon sees a tightening of renewable supply and demand in PJM Interconnection by 2006-2007. The company's marketing and sales strategy will accordingly shift somewhat to compliance demand. To expand its renewable portfolio, Exelon will pursue additional generation projects in PJM.

Emissions performance that beats industry averages

Generating electricity with fossil fuels produces a variety of air - and greenhouse gas – emissions.  Conversely, nuclear generation, which relies on nuclear fission rather than combustion of fossil fuels to generate electric power, does not directly produce any air or greenhouse gas emissions.  Nuclear generation constitutes the majority of Exelon's generating capacity and is the main driver behind the company's low air and greenhouse gas emission rates.

In 2006, Ceres, Natural Resources Defense Council (NRDC), and PSEG issued a report, Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States – 2004. Exelon’s rankings in this report are:

The “all-source” pounds per megawatt hour (lbs/MWh) emission rate equals fossil emissions divided by MWh from all sources of generation, including fossil, hydro and nuclear. These rankings are on a scale with one being the highest emissions or emissions rate and 100 being the least.

Nuclear generation constitutes the majority of Exelon's generating capacity and is the main driver behind Exelon’s low emission rates.  Exelon operates the largest nuclear fleet in the nation and the third largest fleet in the world.  In 2005, this fleet produced 130.2 million net megawatt-hours of electricity.  The fleet also achieved an average capacity factor of 93.5 percent - the fifth year in a row the capacity factor was above 92 percent.  Since 1999, Exelon has added over 1,000 megawatts (MW) of nuclear capacity through uprates and efficiency projects – enough to serve more than 1 million average residential customers. This added capacity annually avoids more than 9 million tons of carbon dioxide (CO2) emissions compared to adding the same amount of coal-fired generation. By the end of 2006, Exelon plans to add an additional 44 megawatts (MW) through uprates at its nuclear reactors.

Other factors contributing to the company's low emission rates include Exelon Power’s non-emitting Conowingo Hydroelectric Station, the use of new and existing advanced pollution controls at many of its fossil generation plants, additional generating capacity achieved from Exelon’s nuclear and hydroelectric uprate and efficiency programs and a continuation of industry-leading capacity factors at Exelon’s nuclear units.  Exelon's significant non-air and non-greenhouse gas emitting generation sources, mean that Exelon Generation’s air emissions per unit of energy produced are very low compared to the industry across all major emissions, as measured against the year 2004 U.S. electric utility average (EUA).

Adding Generation Without Increasing Air or Climate Emissions

Since 1999, Exelon has added more than 1,000 megawatts (MW) through uprates and efficiency projects – enough to serve more than 1 million average residential customers. This added capacity annually avoids more than 9 million tons of carbon dioxide (CO2) emissions to the atmosphere compared to adding the same amount of coal-fired generation. Uprates increase the capability of a nuclear unit by increasing the reactor’s power “rating,” allowing the unit to produce more electricity, safely. All power uprates must be authorized by the Nuclear Regulatory Commission (NRC), after comprehensive safety analyses and equipment modifications. The goal of the company's ongoing Uprate and Efficiency Program is to meet growing energy needs safely, while reducing the need to construct new plants – and without increasing air or greenhouse gas emissions. By the end of 2006, Exelon plans to add an additional 44 megawatts (MW) through uprates at its nuclear reactors, and in January 2008, the company plans to submit a license renewal application for TMI Unit 1.

Exelon's uprate and efficiency program is not limited to its nuclear fleet.  The company has undertaken efforts at its hydro, landfill gas and fossil units as well.  Exelon continues work on a $39 million project to replace four of the eleven turbines at Conowingo Hydroelectric Station.  The last of these turbines will be operational in 2008.  In 2006, it will complete ongoing upgrades at Fairless Hills—where electric generation from landfill gas is expected to increase through 2013

Also in 2005, Exelon Nuclear made significant strides in performance and outage efficiency. In October, Three Mile Island (TMI) Unit 1 (operated by wholly-owned subsidiary AmerGen Energy) broke its own world record by operating continuously for 689 days, while Peach Bottom Unit 3 became only the second light-water reactor in the world to run continuously for more than 700 days.

In addition, Exelon, along with eight other power companies and two reactor vendors, formed the NuStart Energy Development consortium and is implementing a project, co-funded by the U.S. Department of Energy, to demonstrate the new process for obtaining a streamlined combined construction and operating license (COL) for advanced nuclear power reactors.  In September 2005, NuStart announced Grand Gulf in Mississippi and Bellefonte in Alabama as the selected sites for the COL.  Site characterization is now in progress.  NuStart expects to develop a formal COL application(s) and submit it to the NRC in 2008.  It is anticipated that the NRC will award COL(s) around 2011.

Generation From Lower-GHG Emitting Sources

Natural gas generation can be an additional means of decreasing GHG emissions.  These facilities operate at emissions rates less than 50 percent of the U.S. fossil fuel average.  In the early 1990’s Exelon converted Cromby Generating Station Unit 2 and Eddystone Generating Station units 3 and 4 to burn natural gas in addition to residual fuel oil.  The summer of 2006 was the first time in about five years that it was economic to run the units on natural gas rather than residual fuel oil.  On May 31, 2006 Eddystone Unit 4 and Cromby Unit 2 came online firing natural gas. Natural gas firing of the Cromby and Eddystone units continued over the balance of the summer generation period.

Eddystone optimization project reducing pollution and improving cash flow

For many years, Eddystone unit 2’s deteriorating performance on collection of dry ash resulted in significantly increased air emissions, load limitations and high costs for wet ash processing. In 2003, Eddystone unit 2 began replacing or upgrading its electrostatic precipitators (ESP) at an expected cost of $10–20 million. Rather than accepting this cost, the project team conducted a detailed study of the possible root causes of poor ESP performance. The team members mapped the fuel utilization process from coal delivery to flue gas leaving the stack, collecting and analyzing more than 10,000 data points.

The findings confirmed that dust loading leaving the ESPs was extremely high but also showed that, surprisingly, the ash collection issues were mostly due to two interrelated causes far upstream in the process. Flue gas flow was found to be 50 percent over design, and nearly 3 percent of all coal was being sent up the stack as particulate emissions. The team reframed the project to fix these root causes at a cost of less than half of the original concept. Benefits include reduced air pollution, substantial fuel savings, decreased capital and maintenance costs and additional revenue from fully utilizing the unit’s capacity. Together, these benefits increased the unit’s cash flow by more than $2 million annually.

The project installation was completed in May 2004 with zero lost-time accidents. On September 13, 2004, the project team received Exelon’s first-ever Chairman’s Environmental Award for Environmental Performance Improvement and Operational Excellence.

Financing clean energy in Pennsylvania

The Sustainable Development Fund (SDF) finances Pennsylvania companies and projects that involve renewable energy, advanced clean energy and energy efficiency technologies. Funded by PECO settlement agreements, SDF is managed by The Reinvestment Fund, a regional nonprofit based in Philadelphia. In addition to providing the environmental benefits of clean energy, SDF helps PECO diversify its power generation options.

In 2005, SDF approved $1.75 million in production incentives for two new wind projects that will add 114.5 MW of generating capacity in 2006. The incentives are expected to leverage over $175 million in private investment. SDF served as the participating agent in the syndication of a $5.75 million loan to a new 26 MW wind farm in Luzerne County, PA, which was in the final state of construction as 2005 ended.  SDF also led a $3.25 million equity investment round for a developer of fuel cells that operate on a wide range of hydrocarbon fuels without the need of a reformer.  In 2005, SDF’s Pennsylvania Advanced Industrial Technology (PA-AIT) Fund invested $180,000 in a manufacturer of lighting control and energy management equipment, and a $200,000 equity investment in an internet-based load monitoring and energy management company.  Other financings in 2005 included a $140,000 pre-development loan to finance the design of a deep well geothermal system and construction of a test well, and a $200,000 highly energy efficient production equipment upgrade for a manufacturer of point-of-sale commercial displays and signs. The SDF solar photovoltaic grant program grew to 158 approved systems totaling 660 kW of capacity. SDF also sponsored $350,000 of television and radio spots in the fall to encourage support for clean energy, including the PECO WIND product.

Energy Demand Solutions

Exelon Energy Delivery’s Smart Returns Load Reduction Programs

ComEd’s 10 Smart Returns products represent one of the largest, most successful load response portfolios in the United States. The programs provide customers with a financial incentive to curtail use, while benefiting the community and the environment through a lower, more stable load. The more customers curtail use, the more financial incentives they can potentially earn.

From single-family residential homes to large steel mills, the Smart Returns products provide opportunities for almost every customer to participate. ComEd works closely with large commercial, institutional and industrial customers to customize curtailment plans and maximize energy efficiency opportunities. On hot summer days, ComEd’s load response programs can contribute a 1,000-MW reduction to system peak loads.

PECO’s Smart Returns  program has three products, and customers may participate in any or all. The first, active load management (ALM) is a program in which participating customers guarantee that they will reduce their energy consumption within one hour of PECO’s request. This emergency program is designed to respond to events that are triggered within the PJM Interconnection, a regional transmission organization. Under the second Smart Returns program, voluntary load reduction, customers receive a one-hour notification to curtail energy consumption and share in a percentage of PECO’s energy cost savings.  Finally, PJM’s voluntary Economic and Emergency Load Response Programs provide an additional Smart Returns choice for potential load response customers. In 2005 PECO had five curtailment events, tapping into more than 200 MW of this reduction capability.

Internal energy efficiency initiative

The EED Energy Efficiency Team was charged with the goals of improving energy efficiency at EED facilities by 3 percent annually from 2003–2007 and developing recommendations for expanding the program to other Exelon facilities. The team, which supports 74 EED facilities and 8,200 employees, implemented a broad strategy that includes a budget for collateral materials, facility benchmarking and energy audits, efficiency retrofits and a multiyear communications plan with internal articles, posters and stickers to remind employees to turn off computers and lights when not in use.

Unfortunately, EED’s energy use increased 0.3 percent in 2005. Lighting retrofit projects were deferred until later in the year and into 2006, and several of EED’s facilities experienced changes to building occupancy and operating hours—all of which contributed to the increase.  In 2006, EED will pursue a management-approved three-year plan to focus on funding lighting-retrofit projects, conducting facility process reviews and reenergizing an employee and contractor awareness campaign.

Exelon Power saved 4.7 percent in energy costs over 2004—exceeding its goal of 3.0 percent—due in part to energy-reduction initiatives like valve-open starts (VOS), which reduce its plants’ start-up time, associated fuel burn and emissions by approximately 50 percent. This year Exelon performed testing at its Cromby Units 1 & 2 and Eddystone Units 3 & 4 to enable them to utilize VOS in 2006. In 2006, Exelon Power will expand VOS as appropriate, as well as examine its other energy uses.

Exelon Nuclear also completed energy assessments at the Byron, Dresden and Peach Bottom stations to enable development of new efficiency goals and strategies. Plans are underway to complete the most cost-effective initiatives identified in the energy assessments starting in 2006. 

Green corporate headquarters

In 2004, Exelon’s Real Estate and Facilities organization initiated the consolidation of the company's three downtown Chicago locations into a single flagship headquarters. Exelon believes that greater cross-collaboration between functions can achieve synergies that will improve productivity. In addition, the new headquarters will contribute toward reducing real estate costs.

Exelon incorporated sustainable design and building practices into the design of the company’s renovated Chicago headquarters. The U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program defines the parameters for building and operating new and existing buildings to be more environmentally friendly.  The integrated design and project management efforts to renovate ten floors in Chicago’s Chase Tower to date have resulted in specifications for office layouts that leverage natural light; material selection that includes use of recycled or regionally manufactured materials; and energy procurement of Green e-power to serve the needs of the new space.  “We have committed to 100% renewable energy use for the floors that we will be occupying,” says Helen Howes, Exelon's Vice President for Environmental Health and Safety, who adds that the focus on energy efficiency will also lead to a reduction in energy consumption by 20% to 35% compared to a conventional office. “We expect to pay a 10% premium for renovating the office space, but we expect to gain those dollars back in reduced operating costs for water and electricity,” says Howes. Exelon is seeking LEED platinum certification for its renovated Chicago headquarters, which will open in December 2006.

ComEd CARE Helps Customers Reduce Energy Usage

In July 2006, ComEd launched CARE (Customers’ Affordable Reliable Energy), a multiyear initiative to help residential customers with their electricity bills in preparation for rate increases coming in January 2007 after the end of a nine-year rate freeze.  A key component is the CARE Web site, www.ComEdCARE.com, dedicated to helping customers better manage their energy usage.  As part of the program, this fall ComEd customers purchased more than 1.2 million significantly discounted ENERGY STAR compact fluorescent light bulbs to help them reduce their energy usage and save money.

EED support of Chicago Green City goal

The Exelon Marketing Technical Services (MTS) team actively supports Chicago’s efforts to make the city the greenest community in the United States. Exelon’s support ranges from energy efficiency work in city facilities to efficiency improvements in industrial facilities and sustainable design outreach.

Retrofits in city facilities. In 2004, MTS conducted a benchmark study evaluating energy efficiency opportunities such as lighting retrofits and solar domestic water heating for the city’s firehouses. Exelon also completed lighting retrofits at several Chicago Transit Authority and City Colleges of Chicago facilities, including bus garages, repair shops, classrooms, laboratories, gymnasiums and swimming pools. In aggregate, the projects saved more than 1,500 kW in installed lighting load, 9.6 million kWh in annual electricity consumption and 20.5 million pounds of CO2 emissions.

Saving energy, avoiding emissions and improving Chicago’s economy. In conjunction with the University of Illinois and the city’s Department of Environment, MTS supports and coordinates Chicago’s Industrial Rebuild Program targeted to specific industrial segments. In 2004, ComEd completed assessments of chemical manufacturers and continued assessments of confectionery companies. These efforts identified potential annual savings of 3.7 million kWh and 14.5 million cubic feet of water and avoidance of 5.5 million pounds of CO2 emissions.

In 2005 the Chicago Industrial Trend Report—a partnership between ComEd, the City of Chicago’s Department of Planning and Development, and other development organizations—was named the best long-term program of the year by Business Retention and Expansion International (BREI).

Sustainable design. Through creation of a Chicago Standard, the city is committed to LEED certification for all new buildings. ComEd is providing technical support for operating efficiency, maintenance practices and training of building staff. ComEd is also commissioning four new Chicago Public Schools.

Exelon’s Support for the National Action Plan for Energy Efficiency (NAPEE)

Launched in July 2006, the National Action Plan for Energy Efficiency (NAPEE) is designed to help invigorate efforts to conserve and use energy more wisely.  The National Action Plan is facilitated by DOE and EPA, with the participation of utilities, public utility commissions, energy consumers, and non-governmental groups.  Exelon is a member.  EEI member companies are emphasizing the following actions to help implement NAPEE: 

• helping foster more energy-efficient buildings;
• promoting the development and deployment of more energy-efficient electric appliances, consumer electronics, and other electric technologies;
• accelerating the development and use of “smart” or advanced electric meters;
• supporting development of innovative electric ratemaking and rate design that promote efficiency and provide customers more control over their electricity bills; and
• helping commercialize plug-in hybrid electric vehicles to improve transportation efficiency, reduce fuel costs, improve the environment and help reduce dependence on foreign oil. 

Adoption of these and other untapped energy-efficiency practices could yield significant savings in total electricity demand nationwide by 2025, which in turn could help cut load growth compared to current forecasts. 

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