EXELON GENERATION CO LLC (Form: S-4, Received: 04/04/2002 08:18:21)

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As filed with the Securities and Exchange Commission on April 4, 2002

Registration No.

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

Exelon Generation Company, LLC
(Exact name of registrant as specified in its charter)

Pennsylvania	4911	23-3064219
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

300 Exelon Way
Kennett Square, Pennsylvania 19348
(610)765-8200
http://www.exeloncorp.com
(Address, including zip code and telephone number, including
area code, of Registrant's principal executive offices)

John L. Settelen, Jr.
Vice President and Controller
300 Exelon Way
Kennett Square, Pennsylvania 19348
(610)765-5978
(Name, address, including zip code and telephone number, including
area code, of agent for service)

Copies to:

Edward J. Cullen, Jr.,				Robert C. Gerlach Lisa M. Sloan
Vice President & General Counsel 300 Exelon Way Kennett Square, Pennsylvania 19348 (610)765-5700		and		c/o Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street Philadelphia, Pennsylvania 19103 (215)864-8526 (215)864-8638

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit(2)	Proposed Maximum Aggregate Offering Price(2)	Amount of Registration Fee


6.95% Senior Notes due 2011 (Exchange Notes)	$700,000,000	100%	$700,000,000	$64,400

(1): The registration fee has been calculated pursuant to Rule 457(f)(2) under the Securities Act. The proposed maximum aggregate offering price represents the total value of the bonds being exchanged under this registration statement.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion dated April , 2002
PRELIMINARY PROSPECTUS

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

$700,000,000

Exelon Generation Company, LLC

Offer to Exchange
$700,000,000 6.95% Senior Notes Due 2011 (Exchange Notes)
Which have been registered under the Securities Act

For Any and All Outstanding
$700,000,000 6.95% Senior Notes Due 2011
Which have not been so registered

TERMS OF THE EXCHANGE OFFER

•: The exchange offer expires at 5:00 p.m., Eastern Time, on , 2002, unless extended by us in our sole discretion, subject to applicable law.
•: The terms of the exchange notes are identical to the original notes, except that the exchange notes are registered under the Securities Act and the transfer restrictions and registration rights applicable to the original notes do not apply to the exchange notes.
•: All original notes that are validly tendered and not validly withdrawn will be exchanged.
•: Tenders of original notes may be withdrawn at any time prior to expiration of the exchange offer.
•: We do not intend to apply for listing of the exchange notes on any securities exchange or to arrange for them to be quoted on any quotation system.
•: The exchange offer is subject to customary conditions, including the condition that the exchange offer not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.
•: We will not receive any proceeds from the exchange offer.
•: You will not incur any material federal income tax consequences from your participation in the exchange offer.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where the original notes were acquired by the broker-dealer as a result of market-making activities or other trading activities. We have agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business one year after the Expiration Date, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

Please see "Risk Factors" beginning on page 7 for a discussion of factors you should consider in connection with the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the exchange notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2002.

Table of Contents

		Page
WHERE TO FIND MORE INFORMATION		i
PROSPECTUS SUMMARY		1
RISK FACTORS		7
FORWARD-LOOKING STATEMENTS		11
USE OF PROCEEDS		12
CAPITALIZATION		13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		15
BUSINESS		31
MANAGEMENT		61
COMPENSATION		62
CERTAIN TRANSACTIONS		73
THE EXCHANGE OFFER		77
DESCRIPTION OF THE EXCHANGE NOTES		85
PLAN OF DISTRIBUTION		98
LEGAL OPINIONS		99
EXPERTS		99
INDEX TO FINANCIAL STATEMENTS		F-1

When we refer to the term "note" or "notes," we are referring to both the original notes and the exchange notes to be issued in the exchange offer. When we refer to "holders" of the notes, we are referring to those persons who are the registered holders of notes on the books of the registrar appointed under the indenture. Unless the context otherwise indicates, all references to "we," "us" or "our" in this prospectus mean Exelon Generation Company, LLC, a Pennsylvania limited liability company, and its consolidated subsidiaries.

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer only of the exchange notes to be issued in exchange for the original notes, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

WHERE TO FIND MORE INFORMATION

In connection with the exchange offer, we have filed with the Securities and Exchange Commission (the "SEC") a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), which offers to exchange the original notes for exchange notes. As permitted by SEC rules, this prospectus omits information included in the registration statement. For a more complete understanding of this exchange offer, you should refer to the registration statement, including its exhibits.

The public may read and copy any reports or other information that we file with the SEC at the SEC's public reference room, Room 1024 at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or at the SEC's regional offices located at 233 Broadway, New York, New York 10279, and Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. These documents are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov. You may also obtain a copy of the exchange offer registration statement at no cost by writing us at the following address:

Exelon Generation Company, LLC
Attn: Investor Relations
10 South Dearborn Street, 36 ^th Floor
P.O. Box 805379
Chicago, Illinois 60680-5379

PROSPECTUS SUMMARY

The following information is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in this prospectus. An investment in the exchange notes involves certain risks relating to our business, prospects, financial condition and results of operations and certain other risks relating to the terms of the exchange notes. These risks are described in "Risk Factors" beginning on page 7.

Summary of the Exchange Offer

The Exchange Offer	We are offering to exchange an aggregate of $700,000,000 principal amount of exchange notes in one series, for the $700,000,000 6.95% Senior Notes due 2011. The original notes may be exchanged only in minimum denominations of $1,000 and multiples thereof.
The Original Notes	The original notes were issued and sold on June 14, 2001 in a transaction not requiring registration under the Securities Act. At the time we issued the original notes, we entered into a registration rights agreement which obligates us to make this exchange offer.
Required Representations	In order to participate in the exchange offer, you will be required to make some representations in a letter of transmittal, including that:
	•	you are not affiliated with us,
	•	you are not a broker-dealer who bought your original notes directly from us,
	•	you will acquire the exchange notes in the ordinary course of business, and
	•	you have not agreed with anyone to distribute the exchange notes.
	If you are a broker-dealer that purchased original notes for your own account as part of market-making or trading activities, you must represent to us that you have agreed with us or our affiliates not to distribute the exchange notes. If you make this representation, you need not make the last representation provided for above. Each broker-dealer that receives exchange notes for its own account in exchange for original notes, where the original notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of exchange notes. See "Plan of Distribution."

Resale of the Exchange Notes		We are making the exchange offer in reliance on the position of the staff of the Division of Corporation Finance of the SEC outlined in certain interpretive letters issued to other companies in other transactions. We believe that the exchange notes acquired in this exchange offer may be freely traded without compliance with the provisions of the Securities Act that call for registration and delivery of a prospectus, except as described in the following paragraph.
		The exchange notes will be freely tradable only if the holders meet the conditions described under "Required Representations" above. If you are a broker-dealer that purchased original notes for your own account as part of market-making or trading activities, you must deliver a prospectus when you sell the exchange notes. We have agreed in the registration rights agreement relating to the original notes to allow you to use this prospectus for this purpose during the one-year period following the Expiration Date, subject to our right under some circumstances to restrict your use of this prospectus. See "The Exchange Offer—Resales of Exchange Notes."
		Broker-dealers that acquired original notes directly from us may not rely on the staff's interpretations and must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as a selling security holder, in order to resell the original notes or the exchange notes.
Accrued Interest on the Exchange Notes		The exchange notes will bear interest at an annual rate of 6.95%. Any interest that has accrued on the original notes before their tender in this exchange offer will be payable on the exchange notes on the first interest payment date after the conclusion of this exchange offer.
Procedures for Exchanging Notes		The procedures for exchanging original notes involve notifying the exchange agent before the Expiration Date of your intention to do so. These procedures are described in this prospectus under the heading "The Exchange Offer—Procedures for Tendering Original Notes."
Expiration Date		5:00 p.m., Eastern Time, on , 2002, unless the exchange offer is extended (the "Expiration Date").
Exchange Date		We will notify the exchange agent of the date of acceptance of the original notes for exchange.
Withdrawal Rights		If you tender your original notes for exchange in this exchange offer and later wish to withdraw them, you may do so at any time before 5:00 p.m., Eastern Time, on the Expiration Date.
Acceptance of Original Notes and Delivery of Exchange Notes		We will accept any original notes that are properly tendered for exchange before 5:00 p.m., Eastern Time, on the Expiration Date. The exchange notes will be delivered promptly after the Expiration Date.

Tax Consequences		You will not incur any material federal income tax consequences from your participation in this exchange offer. The exchange of notes will not constitute a taxable exchange for United States federal income tax purposes. For a discussion of other United States federal income tax consequences resulting from the exchange and the acquisition, ownership and disposition of the exchange notes, see "Certain U.S. Federal Income Tax Considerations."
Use of Proceeds		We will not receive any cash proceeds from this exchange offer.
Exchange Agent		Wachovia Bank, National Association is serving as the exchange agent. Its address and telephone number are provided in this prospectus under the heading "The Exchange Offer—Exchange Agent."
Effect on Holders of Original Notes		Any original notes that remain outstanding after this exchange offer will continue to be subject to restrictions on their transfer. The original notes may not be offered or sold in the United States for the account of or benefit of United States persons within the meaning of the Securities Act, except pursuant to an exemption from or in a transaction not subject to, the registration requirements of the Securities Act. After this exchange offer, holders of original notes will not (with limited exceptions) have any further rights under the registration rights agreement. Any market for original notes that are not exchanged could be adversely affected by the consummation of this exchange offer.

Summary of the Exchange Notes

This exchange offer applies to $700,000,000 aggregate principal amount of the original notes. The terms of the exchange notes will be the same as the original notes, except that the exchange notes will not contain language restricting their transfer, and holders of the exchange notes generally will not be entitled to further registration rights under the registration rights agreement. The exchange notes will be issued under the same indenture as the original notes.

Issuer	Exelon Generation Company, LLC
Securities Offered	$700,000,000 6.95% Senior Notes due 2011 (Exchange Notes) which have been registered under the Securities Act.
Interest Payment Dates	June 15 and December 15 of each year, beginning June 15, 2002.
Maturity	June 15, 2011.
Optional Redemption	We may, at our option, redeem the exchange notes in whole or in part at any time at a price equal to the greater of (i) 100% of the principal amount of the exchange notes being redeemed plus accrued interest to the redemption date or (ii) as determined by the reference treasury dealer appointed by us, the sum of the present values of the remaining scheduled payments of principal and interest on the exchange notes to be redeemed (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate plus 25 basis points, plus accrued interest to the redemption date. See "Description of Exchange Notes—Redemption at Our Option."
Ranking	The exchange notes will be unsecured obligations and will rank equally with all of our unsecured and unsubordinated debt. As of December 31, 2001, we had outstanding approximately $1.03 billion of debt (including the original notes) that ranked equally with the exchange notes.
Ratings	It is anticipated that the exchange notes will be rated "Baa1" by Moody's Investors Service, Inc., "BBB+" by Fitch, Inc. and "A-" by Standard & Poor's Ratings Services.
	A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.
Certain Covenants	The indenture under which the exchange notes will be issued limits our ability to, among other things,
	•	engage in mergers, consolidations or similar transactions;
	•	create liens;
	•	sell property and assets (except under certain circumstances); and
	•	engage in sale and leaseback transactions.
	Each of these covenants is subject to a number of important qualifications and exceptions. See "Description of the Exchange Notes—Certain Covenants."
Form	The exchange notes will be book-entry only and registered in the name of a nominee of DTC.

Summary Information About Exelon Generation Company, LLC

The following summary contains basic information about Exelon Generation Company, LLC. It may not contain all of the information that may be important to you in making a decision to exchange your original notes for the exchange notes. You should read this entire prospectus, and the documents to which we refer, before making your decision.

Exelon Generation Company, LLC

We are one of the largest competitive electric generation companies in the United States, as measured by owned and controlled megawatts. We directly own generation assets in the Mid-Atlantic and Midwest regions with net capacity of 19,715 MW, including 14,250 MW of nuclear capacity. We also control another 16,245 MW of capacity in the Midwest, Southeast and South Central regions through long-term power purchase agreements.

In addition to our own generation facilities, we own a 49.9% interest in Sithe Energies, Inc. with an option to purchase, beginning in December 2002, the remaining 50.1% interest. Sithe develops, owns and operates generation facilities and currently has 8,422 MW of capacity in operation, under construction or in advanced development. We also own a 50% interest in AmerGen Energy Company, LLC, which owns three nuclear stations with total generation capacity of 2,398 MW of which our interest is 1,199 MW.

Our Power Team division is a major wholesale marketer of energy that uses our generation portfolio, transmission rights and expertise to provide generation to wholesale customers under long- and short-term contracts. Power Team is responsible for supplying the load requirements of our utility affiliates Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO). Power Team also buys and sells power in the wholesale spot markets.

Corporate Structure

We were formed on December 27, 2000 as a Pennsylvania limited liability company. We are an indirect wholly owned subsidiary of Exelon Corporation, a public utility holding company. Exelon is the result of the merger in October 2000 between Unicom Corporation, the former parent company of ComEd, and PECO. As part of a corporate restructuring of Exelon effective January 1, 2001, the power generation assets and the wholesale power marketing businesses of ComEd and PECO were transferred to us.

Business Strategy

Our business strategy is to develop a national generation portfolio with fuel and dispatch diversity. To implement this strategy, we plan to:

Grow Our Generation Portfolio. We intend to continue to grow our generation portfolio through a disciplined approach to asset acquisitions, development of new plants, innovative applications of technology, joint ventures and long-term off-take contracts.

Drive Cost and Operational Leadership through Proven Fleet Management and Economies of Scale. Our goals are to increase fleet output and to improve fleet efficiency while sustaining operational safety. We intend to achieve these results in our nuclear fleet by increasing capacity factors over historic levels, reducing refueling outage duration and increasing our generation capacity through power uprates and other modifications. We applied to the Nuclear Regulatory Commission (the "NRC") in July 2001 for extension of the Peach Bottom 2 and 3 licenses and we expect to apply for extensions of the operating licenses for Dresden 2 and 3 and Quad Cities in 2003. AmerGen is also reviewing the potential for license extensions for Oyster Creek and Three Mile Island.

Optimize the Value of Our Low-Cost Generation Portfolio through Our Power Marketing Expertise. Power Team is responsible for optimizing the revenues of our generation assets through long- and short-term contracts and spot-market sales. Power Team also contracts for access to additional generation through bilateral long- and short-term power purchase agreements and spot-market purchases. By using real-time market information, Power Team manages the efficient dispatch of both our owned and contracted generation.

Competitive Strengths

We believe that we are well positioned to play a leading role in the competitive energy industry because of a number of key strengths:

Competitive, Low-Cost Fleet of Generation Assets. Our low-cost advantage is driven by our ownership of or investment in 11 nuclear generation stations, consisting of 19 units, with net capacity totaling 15,449 MW. Our nuclear plants benefit from stable fuel costs, minimal environmental impact from operations and a safe operating history. In addition, our fuel diversity includes oil, coal, gas, water and wind.

Operating Experience and Expertise. We have achieved superior operating performance in our generation business through the leadership of a deep and experienced management team. We benefit from a coordinated approach to fleet management that includes the sharing of "best-in-class" practices across our organization and broad employee recognition that exceptional performance is required to succeed in a competitive environment.

Critical Mass of Generation Capacity with Economies of Scale. The generation assets transferred to us by ComEd and PECO and our investments in Sithe and AmerGen provide critical mass and a leadership position in the new energy markets. As the largest generator of nuclear power in the United States, we can take advantage of our scale and scope to negotiate favorable terms for the materials and services that our business requires.

Stable Revenue Streams under Long-Term Contracts with ComEd and PECO. We have entered into agreements to supply the load requirements of ComEd and PECO through 2004 and 2010, respectively. In 2001, sales to ComEd and PECO under these agreements accounted for approximately 58% of our revenues and the remaining 42% were in the wholesale market. Less than 4% of our sales represented transactions entered into for trading purposes.

RISK FACTORS

In addition to the information contained elsewhere in this prospectus, you should carefully consider the risks described below. Each of the following factors could have a material adverse effect on our business and could result in a loss or a decrease in the value of your investment.

Our financial performance depends on the operation of our generation assets.

Deterioration in the operation of our power plants may adversely affect our financial performance as a result of lower revenues, increased operating expenses and higher maintenance costs.

Operating power generation facilities involves many risks, including:

•: operator error and breakdown or failure of equipment or processes;
•: operating limitations that may be imposed by environmental or other regulatory requirements;
•: labor disputes;
•: fuel supply interruptions; and
•: catastrophic events such as fires, earthquakes, explosions, floods or other similar occurrences.

Deterioration in the operation of Sithe or AmerGen plants also may adversely affect our financial performance.

We also depend on the performance of generation assets under contract.

Energy supplied by third-party generators pursuant to long-term agreements represents a significant portion of our overall capacity. The assets owned by these generators are subject to the same operational risks described above. In addition, performance under these power supply agreements may depend on the generator's financial condition. As a result, our financial performance depends on the ability of these generators to deliver capacity and energy under their contracts. Our largest power supply contract is with Midwest Generation, LLC, an affiliate of Southern California Edison Company, whose troubled financial condition was the subject of much media attention. To the extent the financial condition of Southern California Edison or its parent, Edison International, deteriorates, we cannot predict what impact, if any, this would have on Midwest Generation's ability to supply capacity and energy to us.

Our revenues depend on sales to ComEd and PECO.

We have agreed to supply our affiliates ComEd and PECO with their respective load requirements through 2006 and 2010, respectively. Both ComEd and PECO are obligated to provide energy to all customers in their service territories who do not select an alternative energy supplier. In 2001, we derived approximately 58% of our revenues from sales to ComEd and PECO, as a result of these agreements.

Our supply agreements with ComEd and PECO are expected to provide us with a stable source of revenue; they do not, however, provide us with any guaranteed level of customer sales. As long as we have commitments to ComEd and PECO, our revenues will largely be a function of the cost of fulfilling these obligations and how much electricity is available to sell in wholesale markets after fulfilling those contracts. Generally, to the extent market prices decrease, customers may have an incentive to obtain electricity from alternative energy suppliers. To the extent that customers choose alternative energy suppliers, our revenues from contracts with ComEd and PECO will be reduced and our revenues will depend more on prices in the wholesale markets. If market prices increase substantially and our load requirements exceed our generation capacity, we may be required to purchase expensive power in the wholesale markets. Thus, any dramatic change in electricity prices combined with switching by ComEd's and PECO's customers could have an adverse effect on our

results of operations or financial condition. Similarly, if we lose a substantial portion of these load requirements, we may be required to sell excess energy into the wholesale market at lower prices.

Further, while our contracts with ComEd and PECO are currently a substantial portion of our business, we cannot predict whether they will be renewed at the end of their respective terms or, if renewed, what the terms of such renewal would be.

We are subject to electricity price risk.

After we have met our contractual commitments, we sell energy in the wholesale markets. These sales expose us to the risks of rising and falling prices in those markets, and cash flows may vary accordingly. After our contracts with ComEd and PECO expire, our cash flows will largely be determined by our ability to successfully market energy, capacity and ancillary services and by wholesale prices of electricity.

The marketing, trading and risk management activities of our Power Team may not be successful.

The principal function of Power Team is to manage our long asset-based position in the markets for energy and capacity. Power Team's risk management and other activities may not yield the planned or expected results. As a consequence, we are exposed to the risks of the commodity market for electricity that can exhibit extremely high volatility.

In addition, we are exposed to the risk that a counterparty with whom we transact business does not perform its obligations or does not pay us. While we employ a rigorous counterparty credit evaluation methodology, the failure of one of our counterparties to perform its obligations could have a material adverse effect on our results of operations or financial condition.

We may incur substantial cost and liabilities due to our ownership and operation of nuclear facilities.

The ownership and operation of nuclear facilities involve certain risks. These risks include: mechanical or structural problems; inadequacy or lapses in maintenance protocols; the impairment of reactor operation and safety systems due to human error; the costs of storage, handling and disposal of nuclear materials; limitations on the amounts and types of insurance coverage commercially available; and uncertainties with respect to the technological and financial aspects of decommissioning nuclear facilities at the end of their useful lives. The following are among the more significant of these risks:

•: Operational risk. Operations at any nuclear generation plant could degrade to the point where we have to shut down the plant. If this were to happen, the process of identifying and correcting the causes of the operational downgrade to return the plant to operation could require significant time and expense, resulting in both lost revenue and increased fuel and purchased power expense to meet our supply commitments. For plants operated by us but not wholly owned by us, we could also incur liability to the co-owners. We may choose to close a plant rather than incur substantial costs to restart the plant.
•: Regulatory risk. The NRC may modify, suspend or revoke licenses and impose civil penalties for failure to comply with the Atomic Energy Act, the regulations under it or the terms of the licenses of nuclear facilities. Changes in regulations by the NRC that require a substantial increase in capital expenditures or that result in increased operating or decommissioning costs could adversely affect our results of operations or financial condition.
•: Nuclear accident risk. Although the safety record of nuclear reactors generally has been very good, accidents and other unforeseen problems have occurred both in the United States and elsewhere. The consequences of an accident can be severe and include loss of life and property damage. Any resulting liability from a nuclear accident could exceed our resources, including insurance coverages.

We depend on transmission availability.

We have invested in a significant amount of long-term transmission reservations throughout the United States. Our performance depends on our ability to retain these rights in the face of decreasing availability of transmission and rising cost for renewals of existing rights. Additionally, our performance could be impacted by changes to existing usage rules.

Our investment, acquisition and development activities may not be successful.

We currently intend to grow our generation portfolio through investments, acquisitions and the development of new energy projects, the completion of any of which is subject to substantial risk. The competitive energy market is emerging following deregulation and we may not be successful in anticipating appropriate market opportunities. It is possible that, due to a variety of factors, including purchase price, operating performance and future market conditions, we would be unable to achieve our goals. We may not be able to successfully integrate our acquisitions or investments with our existing businesses. Successful acquisition and development are contingent upon, among other things, negotiation of contracts satisfactory to us with other project participants and receipt of required governmental approvals and consents. Successful development of new projects depends on our ability to obtain permits and equipment and complete the projects within budget in a timely fashion. Further, we may be unable to obtain the substantial debt and equity capital required to invest in, acquire and develop new generation projects, to refinance existing projects or to complete projects under construction.

Our business may be adversely affected by regulatory changes in the electric power industry.

The regulation of the electric power industry continues to undergo substantial changes at both the state and Federal level. These changes have significantly affected the industry and the manner in which its participants conduct their businesses.

Future changes in laws and regulations, including changes resulting from increased security concerns, may have an effect on our business in ways that we cannot predict. Some restructured markets have recently experienced supply problems and price volatility that have been the subject of a significant amount of media coverage, much of which has been critical of the restructuring initiatives. In some of these markets, including California, government agencies and other interested parties have made proposals to re-regulate portions of the utility industry that have previously been deregulated and, in California, legislation has been passed placing a moratorium on the sale of generation plants by regulated utilities. Other proposals to re-regulate our industry may be made, and legislative or other attention to the electric power restructuring process may cause the process to be delayed, discontinued or reversed in the states in which we currently, or may in the future, operate. If competition in the electric power industry is discontinued, or our business re-regulated, we cannot predict the impact on our business.

We may not be able to respond effectively to competition or new technologies.

We may not be able to respond in a timely or effective manner to the many changes in the power industry that may occur as a result of regulatory initiatives to increase competition. As a result, additional competitors in our industry may be created, and we may not be able to maintain our revenues and earnings levels or pursue our growth strategy. In addition, new technologies may be developed that impact the competitiveness of our generation facilities. To the extent that competition increases, our profit margins may be negatively affected.

While demand for electricity is generally increasing throughout the United States, the rate of construction and development of new, more efficient, electric generation facilities may exceed increases in demand in some regional electric markets. The introduction of new participants with better

technologies in our regional markets could increase competition, which could lower prices and have a material adverse effect on our results of operations or financial condition.

We have a limited operating history as a stand-alone power generator.

We have operated as a separate, stand-alone entity since January 1, 2001. We depend on Exelon for some of our liquidity, capital resource and credit support needs, and on our affiliates for certain general corporate and other services. We are still in the process of integrating the generation assets and operations we acquired from ComEd and PECO. Additionally, we may not be able to successfully integrate our acquisitions or developments with our existing business.

We are subject to control by Exelon.

Our sole limited liability company member, Exelon Ventures Company, LLC, is controlled by Exelon and, therefore, ultimately Exelon controls the decision of all matters submitted for member approval and has control over our management and affairs. In circumstances involving a conflict of interest between Exelon, on the one hand, and our creditors, on the other, Exelon could exercise its power to control us in a manner that would benefit Exelon to the detriment of our creditors, including the holders of the exchange notes.

Conflicts of interest may arise between us and our affiliates.

We rely on sales to our affiliates, ComEd and PECO, under long-term contracts for a majority of our revenues. Conflicts of interest may arise if we need to enforce the terms of agreements between us and ComEd and PECO. Decisions concerning the interpretation or operation of these agreements could be made from perspectives other than the interests solely of our company or its creditors, including the holders of the exchange notes.

We are subject to regulation by the SEC under the Public Utility Holding Company Act.

We are subject to regulation by the SEC under the Public Utility Holding Company Act of 1935. Under PUHCA, we cannot issue debt or equity securities or guaranties without the SEC's prior approval. Under the Public Utility Holding Company Act (PUHCA), generally, we can invest only in traditional electric and gas utility businesses and related businesses. The acquisition of the voting stock of other gas or electric utilities is subject to prior SEC approval. PUHCA also imposes restrictions on transactions among affiliates. The restrictions imposed on us by PUHCA may limit our ability to pursue acquisition or development opportunities.

There is no public market for the exchange notes.

Following the completion of this exchange offer, the exchange notes will be freely tradable by most holders. See "The Exchange Offer." We do not intend to list the exchange notes on any United States or foreign securities exchange. We can give no assurances concerning the liquidity of any market that may develop for the exchange notes, the ability of any investor to sell the exchange notes, or the price at which investors would be able to sell their exchange notes. If a market for the exchange notes does not develop, investors may be unable to resell the exchange notes for an extended period of time, if at all. Consequently, investors may not be able to liquidate their investment readily, and lenders may not readily accept the exchange notes as collateral for loans.

If you fail to exchange the original notes, they will remain subject to transfer restrictions.

Any original notes that remain outstanding after this exchange offer will continue to be subject to restrictions on their transfer. After this exchange offer, holders of original notes will not (with limited exceptions) have any further rights under the exchange and registration rights agreement. Any market

for original notes that are not exchanged could be adversely affected by the conclusion of this exchange offer.

Late deliveries of the original notes and other required documents could prevent a holder from exchanging its notes.

Holders are responsible for complying with all exchange offer procedures. Issuance of exchange notes in exchange for original notes will only occur upon completion of the procedures described in this prospectus under the heading "The Exchange Offer—Procedures for Tendering Original Notes." Therefore, holders of original notes who wish to exchange them for exchange notes should allow sufficient time for completion of the exchange procedure. We are not obligated to notify you of any failure to follow the proper procedure.

If you are a broker-dealer, your ability to transfer the notes may be restricted.

A broker-dealer that purchased original notes for its own account as part of market-making or trading activities must deliver a prospectus when it sells the exchange notes. Our obligation to make this prospectus available to broker-dealers is limited. Consequently, we cannot guarantee that a proper prospectus will be available to broker-dealers wishing to resell their exchange notes.

FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this prospectus that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections, future capital expenditures, business strategy, competitive strengths, goals, expansion, market and industry developments and the growth of our businesses and operations, are forward-looking statements. These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements involve a number of risks and uncertainties, many of which are beyond our control. The following are among the most important factors that could cause actual results to differ materially from the forward-looking statements.

•: the significant considerations and risks discussed in this prospectus;
•: general and local economic, market or business conditions;
•: fluctuations in demand for electricity, capacity and ancillary services in the markets in which we operate;
•: increasing competition from other companies;
•: the acquisition and development opportunities (or lack thereof) that may be presented to and pursued by us;
•: changes in laws or regulations that are applicable to us;
•: environmental constraints on construction and operation;
•: the rapidly changing market for energy products; and
•: access to capital.

Consequently, all of the forward-looking statements made in this prospectus are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by us will be realized or, even if realized, will have the expected consequences to or effects on us or our business prospects, financial condition or results of operations. You should not place undue reliance on these forward-looking statements in making your investment decision. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to these forward-looking statements to reflect events or circumstances that occur or arise or are anticipated to occur or arise after the date hereof. In making an investment decision regarding the exchange notes, we are not making, and you should not infer, any representation about the likely existence of any particular future set of facts or circumstances.

USE OF PROCEEDS

The exchange offer is being made in accordance with requirements of the registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes in the exchange offer. In exchange for issuing the exchange notes as described in this prospectus, we will receive an equal principal amount of original notes, which will be canceled.

The net proceeds from the sale of the original notes were used to repay intercompany obligations of $696 million to Exelon incurred to fund the acquisition of our interest in Sithe. The intercompany obligation to Exelon was a demand note that carried interest at a floating rate and was due no later than December 16, 2001.

CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2001.

		As of December 31, 2001
		(in millions)
Current Portion of Long-Term Debt		$	4
Long-Term Debt:
	Senior Notes due 2011		699
	Other Long-Term Debt		322

Total Debt			1,025
Total Member's Equity			2,936

Total Capitalization		$	3,961

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table sets forth our selected historical consolidated financial data. The historical consolidated income statement data for the years ended December 31, 2001, December 31, 2000 and December 31, 1999 have been derived from our audited financial statements included elsewhere in this prospectus. The historical consolidated balance sheet data as of December 31, 2001 and 2000 have been derived from our audited financial statements included elsewhere in this prospectus. The historical consolidated balance sheet data as of December 31, 1999 has been derived from our unaudited financial statements. The information set forth below should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements included elsewhere in this prospectus. Our results of operations for the year ended December 31, 1999 and for the period from January 1, 2000 to October 19, 2000 are the results of operations of the generation business unit of PECO. After October 20, 2000, the date of the merger, our results are the results of the PECO generation business unit and the ComEd business unit combined. Since January 1, 2001, we have operated as a separate generation company.

	For The Years Ended At December 31,
	2001		2000		1999
	(in millions)
Income Statement Data
Operating Revenues	$	7,048	$	3,274	$	2,425
Operating Expenses		6,176		2,833		2,125
Operating Income		872		441		300
Interest Expense		115		41		12
Income Taxes		327		160		125
Net Income		524		260		204

	For The Years Ended At December 31,
	2001	2000	1999
Balance Sheet Data
Property, Plant and Equipment, net	1,160	831	719
Nuclear Fuel, net	843	896	271
Total Assets	8,242	8,262	2,292
Current Liabilities	1,073	2,176	404
Long-Term Debt	1,021	205	209
Total Non-Current Liabilities	3,212	3,271	729
Member's Equity	2,936	2,610	950

	For The Years Ended At December 31,
	2001		2000		1999
Other Data
EBITDA(1)	1,636		736		600
Ratio of Earnings to Fixed Charges(2)	6.15		9.45		14.46
Capital Expenditures	851		326		348
Cash Flows from Operating Activities	1,331		476		429
Cash Flows from Investing Activities	(1,110	)	(1,164	)	(431	)
Cash Flows from Financing Activities	(1	)	692		2

(1): EBIT is earnings before interest and income taxes, earnings from equity investments, and other income and expense recorded in other, net, with exception of interest income. EBITDA is EBIT plus depreciation and decommissioning, plus amortization of nuclear fuel. EBIT and EBITDA may differ from the calculations used by other companies and should not be considered as an alternative to net income, cash flows or any other item calculated in accordance with United States generally accepted accounting principles or as an indication of operating performance or liquidity.
(2): The Ratio of Earnings to Fixed Charges is calculated by dividing earnings by fixed charges. For this purpose "earnings" means pre-tax income from continuing operations before adjustment for income or loss from equity investees. "Fixed Charges" means interest costs and amortization of debt discount and premium on all indebtedness and rentals for operating leases.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net Income. Our net income increased $264 million, or 102%, for 2001. Income before cumulative effect of changes in accounting principles increased $252 million, or 97%, for 2001.

Earnings Before Interest and Income Taxes. We and our parent Exelon evaluate our performance based on earnings before interest and income taxes (EBIT). In addition to components of operating income as shown on the consolidated statements of income, EBIT includes equity in earnings of unconsolidated affiliates, and other income and expense recorded in other, net, with the exception of investment income.

The October 20, 2000 merger of PECO and Unicom, and the January 1, 2001 corporate restructuring, significantly impacted our results of operations. To provide a more meaningful analysis of results of operations, the EBIT analyses below identifies the portion of the EBIT variance that is attributable to the former ComEd generation business unit results of operations and the portion of the variance that results from normal operations attributable to changes in components of our underlying operations. The merger variance represents the former ComEd generation business unit results for the year ended December 31, 2000 prior to the October 20, 2000 acquisition date as well as the effect of merger-related costs incurred in 2000. The 2000 effects of the merger and restructuring were developed using estimates of various items, including allocation of corporate overheads and intercompany transactions.

							Components of Variance
	2001		2000		Variance		Merger Variance		Normal Operations
	(in millions)
Operating Revenue	$	7,048	$	3,274	$	3,774	$	2,772	$	1,002

Fuel & Purchased Power		4,218		1,846		2,372		1,689		683
Operating & Maintenance and Other		1,586		858		728		978		(250	)
Depreciation & Decommissioning		282		123		159		83		76

EBIT	$	962	$	447	$	515	$	22	$	493

Our EBIT increased $515 million for 2001 compared to 2000. This increase was primarily attributable to higher margins on increased market and affiliate wholesale energy sales, coupled with reduced operating expenses at the nuclear plants, partially offset by additional depreciation and decommissioning expense. During the first five months of 2001, we benefited from increases in wholesale market prices, particularly in the Pennsylvania-New Jersey-Maryland control area and Mid-America Interconnected Network regions. The increase in wholesale market prices was primarily driven by significant increases in fossil fuel prices. The large concentration of nuclear generation in our portfolio allowed us to capture the higher prices in the wholesale market for sales to non-affiliates with minimal increase in fuel prices. Our revenues for 2001 include charges to affiliates for line losses. Line loss charges were not included in 2000 revenue. We also benefited from higher nuclear plant output due to increased capacity factors during 2001. Energy marketing activities positively impacted 2001 results. Mark-to-market gains were $16 million and $14 million on non-trading and trading energy contracts, respectively, offset by realized trading losses of $6 million.

Our sales were 201,879 GWhs in 2001 compared to 200,072 GWhs in 2000, approximately 60% of which were to affiliates. Supply sources for 2001 and 2000 were as follows:

	2001		2000
Operated nuclear units	54	%	54	%
Purchases	37	%	37	%
Fossil and hydro units	3	%	3	%
Generation investments	6	%	6	%
Total	100	%	100	%

Our nuclear fleet, including AmerGen, performed at a weighted average capacity factor of 94.4% for 2001 compared to 93.8% in 2000. Our nuclear fleet's production costs, including AmerGen, were $12.79 per MWh for 2001, compared to $14.65 per MWh for 2000. Our purchased power costs were $42.26 MWh for 2001, compared to $38.05 per MWh for 2000. The increase resulted from the increase in fuel prices in the first quarter of 2001 as well as the increase in volumes sold during peak demand in 2001 compared to 2000.

Operating expenses were favorably affected by reductions in labor costs due to a decline in the number of employees and fewer nuclear outages in 2001 than in 2000, which offset the effect of increases in litigation-related expenses of $30 million. In addition, our EBIT benefited from an increase in equity in earnings of AmerGen and Sithe of $86 million in 2001 compared to the prior-year period reflecting a full year of operations for Sithe and AmerGen's Oyster Creek plant in 2001.

The increase in depreciation and decommissioning expense is primarily due to an increase in decommissioning expense of $140 million resulting from the discontinuance of regulatory accounting practices associated with decommissioning costs for the former ComEd nuclear generating stations that are in active generation, partially offset by a $90 million reduction in depreciation and decommissioning expense attributable to the extension of estimated service lives of our generating plants.

Other Components of Net Income

Interest Expense. Interest expense increased $74 million in 2001, from $41 million, in 2000. This increase was primarily attributable to increased interest charge on the note payable to Exelon of $23 million, interest charges of $26 million due to the issuance of $700 million of 6.95% senior unsecured notes in a 144A offering in June 2001, $23 million of additional interest due to a full year of interest charges on the spent fuel obligation compared to only two months in 2000 for the former ComEd generating stations and $15 million of interest charges from affiliates. These increases were partially offset by capitalized interest of approximately $17 million.

Investment Income. Investment income is recorded in Other, Net on the Consolidated Statements of Income, but is excluded from EBIT. Investment income decreased by $29 million due to net realized losses of $127 million offset by interest and dividend income of $67 million on the nuclear decommissioning trust funds reflecting the discontinuance of regulatory accounting practices associated with nuclear decommissioning costs for the nuclear stations formerly owned by ComEd, primarily offset by increased income of $31 million of money market interest and interest on the loan to Sithe recorded in 2001.

Income Taxes. The effective income tax rate was 39.0% for 2001 as compared to 38.1% for 2000. The increase in the effective income tax rate was primarily attributable to a higher effective state income rate due to operations in Illinois subsequent to the merger and a reduction in the investment tax credit. Income taxes increased by $167 million in 2001 as compared to 2000, $160 million of which is due to higher pretax income and $7 million due to a higher effective income tax rate.

Cumulative Effect of Changes in Accounting Principles

On January 1, 2001, we adopted Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), as amended, resulting in a benefit of $12 million, net of income taxes.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Net Income. Our net income increased $56 million, or 27%, in 2000.

Earnings Before Interest and Income Taxes. To provide a more meaningful analysis of our results of operations, the EBIT analysis below identifies the portion of the EBIT variance that is attributable to the former ComEd generation business unit results of operations and the portion of the variance that results from normal operations attributable to changes in components of our underlying operations. The merger variance represents the former ComEd generation business unit results for the period after October 20, 2000 as well as the effect of merger-related costs incurred in 2000. The 2000 and 1999 results also reflect the corporate restructuring as if it had occurred on January 1, 1999. The 2000 effects of the merger and restructuring were developed using estimates of various items, including allocation of corporate overheads and intercompany transactions.

								Components of Variance
	2000		1999		Variance			Merger Variance		Normal Operations
	(in millions)
Operating Revenue	$	3,274	$	2,425	$	849		$	561	$	288

Fuel & Purchased Power		1,846		1,205		641			279		362
Operating Expense and Other		858		765		93			180		(87	)
Depreciation & Decommissioning		123		125		(2	)		31		(33	)

EBIT	$	447	$	330	$	117		$	71	$	46

Our EBIT increased $117 million for 2000 compared to 1999. The merger accounted for $71 million of the variance. The remaining $46 million increase resulted primarily from higher margins on market and affiliate wholesale energy sales, a charge against earnings of $15 million related to the abandonment of two information systems implementations in 1999 and a $15 million write-off in 1999 of the investment in a cogeneration facility in connection with the settlement of litigation. Our EBIT benefited from an increase in equity in earnings of AmerGen of $4 million in 2000 compared to the prior-year period. Effective with the acquisition of Clinton Nuclear Power Station by AmerGen, our agreement to manage Clinton was terminated, resulting in lower revenues of $99 million and lower operating and maintenance expense of $70 million.

Our nuclear fleet, including AmerGen, performed at a weighted average capacity factor of 93.8% for 2000. Our nuclear fleet production costs for 2000, including AmerGen, were $14.65 per MWh. Our purchased power costs for 2000 were $38.05 per MWh.

Other Components of Net Income

Interest Expense. Interest expense increased $29 million, or 242%, to $41 million in 2000. The increase was primarily attributable to interest related to the spent fuel obligation of the former ComEd nuclear plants, which was assumed in connection with the merger, and interest expense related to the $696 million note payable to Exelon used to finance our investment in Sithe.

Income Taxes. The effective tax rate was 38.10% in 2000 as compared to 38.0% in 1999.

Liquidity and Capital Resources

Our capital resources are primarily provided by internally generated cash flows from operations and, to the extent necessary, external financings and borrowings or capital contributions from Exelon. Our access to external financing at reasonable terms is dependent on our credit ratings and our general business condition, as well as the general business conditions of the industry. Our business is capital intensive. Capital resources are used primarily to fund our capital requirements, including construction, investments in new and existing ventures, and repayments of maturing debt. Any potential future acquisitions could require external financing or borrowings or capital contributions for Exelon.

Cash Flows from Operating Activities. Cash flows provided by operations for 2001 were $1.3 billion. Our cash flows from operating activities primarily result from the sale of electric energy to wholesale customers, including our affiliated companies. Our future cash flow from operating activities will depend upon future demand and market prices for energy and the ability to continue to produce and supply power at competitive costs.

Cash Flows from Investing Activities. Cash flows used in investing activities for 2001 were $1.1 billion, primarily for capital expenditures of $515 million, investment in nuclear fuel of $336 million and $239 million related to our investment in the nuclear decommissioning funds. We project capital expenditures of approximately $1.1 billion in 2002, approximately 75% of which are for additions to and upgrades of existing facilities, nuclear fuel and increases in capacity at existing plants. Capital expenditures are projected to increase in 2002 as compared to 2001 due to higher nuclear fuel expenditures, growth and an increase in the number of planned refueling outages, during which significant maintenance work is performed. Eleven nuclear refueling outages, including AmerGen, are planned for 2002, compared to six during 2001. Total capital expenditures during nuclear refueling outages are expected to increase in 2002 over 2001 by $24 million. We anticipate that our capital expenditures will be funded by internally generated funds, external borrowings, and borrowings or capital contributions from Exelon. Our proposed capital expenditures and other investments are subject to periodic review and revision to reflect changes in economic conditions and other factors.

In addition to the 2002 capital expenditures of $1.1 billion, we expect to close the purchase of two natural-gas and oil-fired plants from TXU Corp. (TXU) in the second quarter of 2002. The $443 million purchase is expected to be funded with available cash and borrowings from Exelon.

During 2001, we loaned Sithe $150 million, which was repaid by Sithe in December of 2001. During 2001, Sithe paid us $2 million in interest on the loan.

Cash Flows from Financing Activities. Cash flows used in financing activities were $1 million in 2001 primarily attributable to the issuance of $700 million of senior unsecured notes with a maturity of June 2011 The majority of the proceeds of this issuance were used to repay Exelon for amounts borrowed to finance our investment in Sithe. We also issued $121 million of pollution control bonds to refinance an equivalent amount originally issued by PECO.

Credit Issues. We meet short-term liquidity requirements primarily through internally generated cash or borrowings from Exelon. We, along with ComEd, PECO and Exelon, entered into a $1.5 billion unsecured revolving credit facility with a group of banks. We currently cannot borrow under the credit agreement until we deliver audited financial statements to the banks, which is expected to occur in the second quarter of 2002. At December 31, 2001, we had outstanding $700 million of 6.95% senior unsecured debt, $317 million of variable rate pollution control notes and other long-term notes payable of $9 million. For 2001, the average interest rate on these pollution control notes was approximately 2.62% Certain of the credit agreements to which we are party require us to maintain a debt to total capitalization ratio of 65% or less. At December 31, 2001, our debt to total capitalization ratio on that basis was 35%.

Our access to the capital markets and financing costs in those markets is dependent on our securities ratings. None of our borrowings are subject to default or prepayment as a result of a downgrading of securities ratings, although such a downgrading could increase interest charges under the bank credit facility. We enter agreements to purchase energy and capacity, including obligations that are treated as derivatives, which require us to maintain investment grade ratings. Failure to maintain investment grade ratings would allow a counterparty to terminate its contract and settle the transaction on a net present value basis. Exelon has provided guarantees to support certain of our lines of credit, surety bonds, nuclear insurance and energy marketing contracts.

Exelon has obtained an order from the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935 (PUHCA) authorizing financing transactions, including the issuance of common stock, preferred securities, long-term debt and short-term debt in an aggregate amount not to exceed $4 billion. The order applies to our issuances as well. As of December 31, 2001, $3.0 billion of financing authority was available under the SEC order. Exelon requested, and the SEC reserved jurisdiction over, an additional $4 billion in financing authorization. Exelon agreed to limit its short-term debt outstanding to $3 billion of the $4 billion total financing authority. Exelon has asked the SEC to eliminate the short-term debt restriction. The SEC order also authorized Exelon to issue guarantees of up to $4.5 billion outstanding at any one time. At December 31, 2001, Exelon had provided $1.4 billion of guarantees. Under PUHCA and the Federal Power Act, we can pay dividends only from retained or current earnings. At December 31, 2001, we had retained earnings of $524 million. Exelon is also limited by order of the SEC under PUHCA to an aggregate investment of $4 billion in exempt wholesale generators (EWGs) and foreign utility companies (FUCOs). Exelon requested, and the SEC reserved jurisdiction over, an additional $1.5 billion investment in EWGs and FUCOs.

Contractual Obligations and Commercial Commitments. Our contractual obligations and commercial commitments as of December 31, 2001 are as follows:

			Payment Due within
Obligations/Commitments			Payment Due within						Due After 5 Years
Obligations/Commitments	Total		1 Year		2-3 Years		4-5 Years		Due After 5 Years
	($ in millions)
Long-Term Debt(a)	$	1,025	$	4	$	5	$	—	$	1,016
Operating Leases(b)		682		28		63		64		527
Purchase Power Obligations(c)		12,192		1,695		3,173		1,346		5,978
Acquisition of TXU Generating Stations(d)		443		443		—		—		—
Spent fuel obligation(e)		843								843

(a): Comprised primarily of senior unsecured debt and pollution control notes. In connection with the variable rate debt we maintain direct pay letters of credit in order to provide liquidity in the event that it is not possible to remarket all of the debt as required following specific events, including changes in the basis of determining the interest rate of debt. Letters of credit as of December 31, 2001 amounted to $317 million of which $121 million expire in 2002 and the remaining $196 million expire in 2003 to 2004. Total includes the current portion of long-term debt.
(b): Company leases equipment and certain office facilities.
(c): Commitments relating to the purchase of energy, capacity and transmission rights. Include in amounts are $3,485 million of dollars power purchases from our affiliate AmerGen.
(d): Commitment to purchase generating stations in spring of 2002.
(e): One-time fee of $277 million with interest to date payable to the DOE for Spent Nuclear Fuel.

We have an obligation to decommission our nuclear power plants. Our current estimate of decommissioning costs for our owned nuclear plants is $7.2 billion in current-year (2002) dollars. Nuclear decommissioning activity occurs primarily after a plant's retirement and is currently estimated to begin in 2029, except for the retired Zion station, which is currently estimated to begin decommissioning in 2013. Decommissioning costs are recoverable by ComEd and PECO through regulated rates and are remitted to us for deposit in the decommissioning trust funds. In 2001, ComEd and PECO collected from customers and remitted to us approximately $102 million in decommissioning costs. At December 31, 2001, the decommissioning liability, which is recorded over the life of the plant, recorded in Property, Plant and Equipment, Net as well as Deferred Credits and Other Liabilities on our balance sheet was $2.7 billion and $1.3 billion, respectively. In order to fund future decommissioning costs, we held $3.2 billion of investments in nuclear decommissioning trust funds, which are included as Deferred Debits and Other Assets on our balance sheet and which include net unrealized and realized gains. Due to the performance of the United States debt and equity markets in 2001, the value of assets held in trusts to satisfy the obligations of the nuclear generating stations eventual decommissioning has decreased. Contributions to the nuclear decommissioning trust funds of $112 million offset net losses of $109 million, resulting in a 2% increase in the decommissioning trust funds balance at December 31, 2001 compared to December 31, 2000. We believe that the amounts being remitted to us by ComEd and PECO and the earnings on nuclear decommissioning trust funds will be sufficient to fully fund our decommissioning obligations.

Off Balance Sheet Obligations. Beginning December 18, 2002, we will have the right to purchase all (but not less than all) of the remaining outstanding shares of the Sithe common stock. The option expires on December 18, 2005. In addition, each of Sithe's other stockholder groups will have the right to require us to purchase all (but not less than all) of its shares during the same period in which we can exercise our option. At the end of that period, if no stockholder has exercised its option, we will have a one-time option to purchase shares from the other stockholders to bring our holdings to 50.1% of the total outstanding shares. If we exercise our option or if all the stockholder groups exercise their put rights, the purchase price for 70% of the remaining 50.1% of the Sithe stock will be set at a fair market value plus a 10% premium in the case of a call or 10% discount in the case of a put, subject to a floor of $430 million and a ceiling of $650 million, and the remaining portion will be valued at fair market value subject to floor price of $141 million and a ceiling price of $330 million, plus, in each case, interest accrued from the beginning of the exercise period.

If we increase our ownership in Sithe to 50.1% or more, Sithe will become a consolidated subsidiary and our financial results will include Sithe's financial results from the date of purchase. At December 31, 2001, Sithe had total assets of $4.2 billion and long-term debt of $2.3 billion, including $2.1 billion of non-recourse project debt and excluding $107 million of non-recourse project debt associated with Sithe's equity investments. For the year ended December 31, 2001 Sithe had revenues of $1 billion. As of December 31, 2001, we had a $725 million equity investment in Sithe.

Additionally, the debt on the books of our unconsolidated equity investments and joint ventures is not reflected on our Consolidated Balance Sheets. Total investee debt, including the debt of Sithe described in the preceding paragraph, is currently estimated to be $2.4 billion ($1.2 billion based on Exelon Generation's ownership interest of the investments).

We and British Energy, our joint venture partner in AmerGen, have each agreed to provide up to $100 million to AmerGen at any time for operating expenses. We have committed to provide AmerGen with capital contributions equivalent to 50% of the purchase price of any acquisitions AmerGen makes in 2002.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks associated with commodity price, credit, interest rates and equity prices. The inherent risk in market sensitive instruments and positions is the potential loss arising from adverse changes in commodity prices, counterparty credit, interest rates and equity security prices. Exelon's corporate Risk Management Committee (RMC) sets forth risk management philosophy and objectives through a corporate policy, and establishes procedures for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of derivative activity and risk exposures. The RMC is chaired by Exelon's chief risk officer and includes the chief financial officer, general counsel, treasurer, vice president of corporate planning and officers from each of the Exelon business units. The RMC reports to the Exelon Board of Directors on the scope of our derivative and risk management activities.

Commodity Price Risk. Commodity price risk is associated with market price movements resulting from excess or insufficient generation, changes in fuel costs, market liquidity and locational price commodity differences. Trading activities and non-trading marketing activities include the purchase and sale of electric capacity and energy and fossil fuels, including oil, gas and coal. The availability and prices of energy and energy-related commodities are subject to fluctuations due to factors such as weather, environmental policies, changes in supply and demand, state and federal regulatory policies and other events.

Marketing (non-trading) activities. To the extent that our generation supply (either owned or contracted) is in excess of our obligations to customers, including ComEd's and PECO's retail load, the available electricity is sold in the wholesale markets. To reduce price risk caused by market fluctuations, we enter into derivative contracts, including forwards, futures, swaps, and options with approved counterparties, to hedge our anticipated exposures. Market price risk exposure is the risk of a change in the value of unhedged positions. We expect to maintain a minimum 80% hedge ratio in 2002 for our energy marketing portfolio. This hedge ratio represents the percentage of our forecasted aggregate annual generation supply that is committed to firm sales, including sales to our affiliated entities. The hedge ratio is not fixed and will vary from time to time depending upon market conditions, demand and volatility. Absent any opportunistic efforts to mitigate market price exposure, the estimated market price exposure for the non-trading portfolio associated with a 10% reduction in the average around-the-clock market price of electricity is an approximate $100 million decrease in net income. This sensitivity assumes an 80% hedge ratio and that price changes occur evenly throughout the year and across all markets. The sensitivity also assumes a static portfolio. We expect to actively manage our portfolio to mitigate the market price exposure. Actual results could differ depending on the specific timing of, and markets affected by, the price changes, as well as future changes in our portfolio.

Trading activities. We began to use financial contracts for trading purposes in the second quarter of 2001. The trading activities were entered into as a complement to our energy marketing portfolio and represent a very limited portion of our overall energy marketing activities. For example, the limit on open positions in electricity for any forward month represents less than 5% of the owned and contracted supply of electricity. The trading portfolio is planned to grow modestly in 2002, subject to stringent risk management limits and policies, including volume, stop-loss and value-at-risk limits to manage exposure to market risk. A value-at-risk (VAR) model is used to assess the market risk associated with financial derivative instruments entered into for trading purposes. VAR represents the potential gains or losses for instruments or portfolios due to changes in market factors, for a specified time period and confidence level. The measured VAR as of December 31, 2001, using a Monte Carlo model with a 95% confidence level and assuming a one-day time horizon was approximately $800,000. The measured VAR represents an estimate of the potential change in value of our portfolio of trading related financial derivative instruments. These estimates, however, are not necessarily indicative of

actual results, which may differ due to the fact that actual market rate fluctuations may differ from forecasted fluctuations and due to the fact that the portfolio may change over the holding period.

Our energy contracts are accounted for under SFAS No. 133. Most non-trading contracts qualify for a normal purchases and normal sales exception under that accounting pronouncement and therefore are not recorded on the balance sheet and marked to market. Contracts that do not qualify for the exception are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of qualifying hedge contracts are recorded in Other Comprehensive Income, and gains and losses are recognized in earnings when the underlying transaction occurs. Changes in the fair value of derivative contracts that do not meet hedge criteria under SFAS No. 133 or the ineffective portion of hedge contracts is recognized in earnings on a current basis. Outlined below is a summary of the changes in fair value for those contracts included as assets and liabilities in our balance sheet for the year ended December 31, 2001:

	Non-trading			Trading
	(in millions)
Fair value of contracts outstanding as of January 1, 2001 (Reflects the adoption of SFAS No. 133)	$	(7	)		—
Change in fair value during 2001:
Contracts settled during year		87			7
Mark-to-market unrealized gain (loss)		(2	)		7

Total change in Fair Value		85			14

Fair value of contracts outstanding at December 31, 2001	$	78		$	14

The total change in fair value during 2001 is reflected in the 2001 consolidated financial statements as follows:

	Non-trading		Trading
Mark-to-market gain on non-qualifying hedge contracts or hedge ineffectiveness reflected in earnings	$	16	$	14
Mark-to market hedge contracts reflected in Other Comprehensive Income		69		—

Total change in fair value	$	85	$	14

The majority of our contracts are non-exchange traded contracts valued using prices provided by external sources, which primarily represent price quotations available through brokers or over-the-counter, on-line exchanges. Prices reflect the average of the bid-ask midpoint prices obtained from all sources that we believe provide the most liquid market for the commodity. The terms for which such price information is available varies by commodity, by region and by product. The remainder of the assets represents contracts for which external valuations are not available, primarily option contracts. These contracts are valued using the Black model, an industry standard option valuation model and other valuation techniques. The fair values in each category reflect the level of forward prices and volatility factors as of December 31, 2001 and may change as a result of future

changes in these factors. The maturities of the net energy trading and non-trading assets and sources of fair value as of December 31, 2001 are as follows:

		Less than One Year			One - Three Years		Three - Five Years			Total Fair Value
		(in millions)
Non-trading:
Actively quoted prices		$	—		$	—	$	—		$	—
Prices provided by other external sources			36			50		—			86
Prices based on model or other valuation methods			(4	)		2		(6	)		(8	)

	Total	$	32		$	52	$	(6	)	$	78

Trading:
Actively quoted prices		$	—		$	—	$	—		$	—
Prices provided by other external sources			10			4		—			14
Prices based on model or other valuation methods			—			—		—			—

	Total	$	10		$	4	$	—		$	14

Management uses its best estimates to determine the fair value of commodity and derivative contracts it holds and sells. These estimates consider various factors, including closing exchange and over-the-counter price quotations, time value, volatility factors, and credit exposure. However, it is possible that future market prices could vary from those used in recording assets and liabilities from energy marketing and trading activities, and such variations could be material.

Credit Risk. We have credit risk associated with counterparty performance, which includes, but is not limited to, the risk of financial default or slow payment. Counterparty credit risk is managed through established policies, including establishing counterparty credit limits, and in some cases requiring deposits or letters of credit to be posted by certain counterparties. Our counterparty credit limits are based on a scoring model that considers a variety of factors, including leverage, liquidity, profitability, credit ratings and risk management capabilities. We have entered into master netting agreements with the majority of our large counterparties, which reduce exposure to risk by providing for the offset of amounts payable to the counterparty against the counterparty receivables.

We participate in the five established, real-time energy markets, which are administered by independent system operators (ISOs): Pennsylvania, New Jersey, Maryland, LLC (PJM), which is in the Mid-Atlantic Area Council region; New England and New York, which are both in the Northeast Power Coordinating Council region; California, which is in the Western Systems Coordinating Council region; and Texas, which is administered by the Electric Reliability Council of Texas. In 2001, approximately one-half of our transactions, on a megawatthour basis, were made in these markets. In these areas, power is traded through bilateral agreements between buyers and sellers and on the spot markets which are operated by the ISOs For sales into the spot markets administered by an ISO, the ISO maintains financial assurance policies that are established and enforced by those administrators. The credit policies of the ISOs may under certain circumstances require that losses arising from the default of one member on spot market transactions be shared by the remaining participants. Non-performance or non-payment by a major counterparty, could result in a material adverse impact on our financial condition, results of operations or net cash flows.

In areas where there is no spot market, electricity is purchased and sold solely through bilateral agreements.

Interest Rate Risk. We use a combination of fixed-rate and variable-rate debt to reduce interest rate exposure. Interest rate swaps may be used to adjust exposure when deemed appropriate based

upon market conditions. We also use forward-starting interest rate swaps and treasury rate locks to lock in interest rate levels in anticipation of future financings. These strategies are employed to maintain the lowest cost of capital. As of December 31, 2001, a hypothetical 10% increase in the interest rates associated with pollution control bonds would result in an approximately $1 million decrease in pre-tax earnings for 2002.

Equity Price Risk. We maintain trust funds, as required by the Nuclear Regulatory Commission (NRC), to fund certain costs of decommissioning our nuclear plants. As of December 31, 2001, these funds are reflected at fair value on our balance sheet. The mix of securities is designed to provide returns to be used to fund decommissioning and to compensate, including inflationary increases in decommissioning costs. However, the equity securities in the trusts are exposed to price fluctuations in equity markets, and the value of fixed rate, fixed income securities are exposed to changes in interest rates. We actively monitor the investment performance and periodically review asset allocation in accordance with our nuclear decommissioning trust fund investment guidelines. A hypothetical 10% increase in interest rates and decrease in equity prices would result in a $204 million reduction in the fair value of the trust assets.

Critical Accounting Policies

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the reported amounts of assets and liabilities in the financial statements. The following areas represent those that management believes are particularly important to the financial statements and that require the use of estimates and assumptions to describe matters that are inherently uncertain.

Accounting for Derivative Instruments. We use derivative financial instruments primarily to manage our commodity price and interest rate risks. Derivative financial instruments are accounted for under SFAS No. 133. Accounting for derivatives continues to evolve through guidance issued by the Derivatives Implementation Group (DIG) of the Financial Accounting Standards Board. To the extent that changes by the DIG modify current guidance, including the normal purchases and normal sales determination, the accounting treatment for derivatives may change.

Energy Contracts. To manage our use of generation supply (including owned and contracted assets), we enter into contracts to purchase or sell electricity, fossil fuels, and ancillary products such as transmission rights and congestion credits, and emission allowances. These energy marketing contracts are considered derivatives under SFAS 133 unless a determination is made that they qualify for a SFAS No. 133 normal purchases and normal sales exclusion. If the exclusion applies, those contracts are not marked-to-market and are not reflected in the financial statements until delivery occurs.

The availability of the normal purchases and normal sales exclusion to specific contracts is based on a determination that excess generation is available for a forward sale and similarly a determination that at certain times generation supply will be insufficient to serve load. This determination is based on internal models that forecast customer demand and generation supply. The models include assumptions regarding customer load growth rates, which are influenced by the economy, weather and the impact of customer choice, and generating unit availability, particularly nuclear generating unit capability factors. The critical assumptions used in the determination of normal purchases and normal sales are consistent with assumptions used in the general corporate planning process.

Energy contracts that are considered derivatives may be eligible for designation as hedges. If a contract is designated as a hedge, the change in its market value is generally deferred as a component of other comprehensive income until the transaction it is hedging occurs. Conversely, the change in the market value of derivatives not designated as hedges is recorded in current period earnings. To qualify

as a cash flow hedge, the fair value changes in the derivative must be expected to offset 80%-120% of the change in fair value or cash flows of the hedged item. The effectiveness of an energy contract designated as a hedge is determined by internal models that measure the statistical correlation between the derivative and the associated hedged item.

When external quoted market prices are not available, we use the Black model, a standard industry valuation model to determine the fair value of energy derivative contracts. The valuation model uses volatility assumptions relating to future energy prices based on specific energy markets and utilizes externally available forward market price curves.

Interest Rate Derivatives. We use derivatives to manage our exposure to fluctuation in interest rates and planned future debt issuances. Hedge accounting has been used for all interest rate derivatives to date based on the probability of the transaction and the expected highly effective nature of the hedging relationship between the interest rate swap contract and the interest payment or changes in fair value of the hedged debt. Dealer quotes are available for all of our interest rate swap agreement derivatives.

Nuclear Decommissioning. Our current estimate of our nuclear facilities' decommissioning cost is $7.2 billion in current year dollars. Calculating this estimate involves significant assumptions with respect to the expected increases in decommissioning costs relative to general inflation rates, changes in the regulatory environment or regulatory requirements, and the timing of decommissioning. The estimated service life of a nuclear station is also a significant assumption because decommissioning costs are generally recognized over the life of the generating station. Cost estimates for decommissioning our nuclear facilities have been prepared by an independent engineering firm and reflect currently existing regulatory requirements and available technology. Nuclear station service lives, over which the decommissioning costs are recognized, were extended by 20 years in 2001. The life extension is subject to NRC approval of an extension of existing NRC operating licenses, which generally are 40 years. As discussed in New Accounting Pronouncements, this accounting will be affected by the adoption of SFAS No. 143, "Asset Retirement Obligations" (SFAS No. 143) effective January 1, 2003.

Estimated Service Lives of Property, Plant and Equipment. We depreciate our generation facilities and other property plant and equipment over estimated useful service lives. These estimated useful service lives are determined using three criteria: (1) economic feasibility, (2) physical feasibility and (3) functional feasibility. Economic feasibility is demonstrated through a cost/benefit analysis that an asset is economically viable and that the asset is providing an overall financial benefit. Physical feasibility represents the fact that the actual plant and equipment can operate during the defined period. Changes in physical feasibility may result from changes in the regulatory environment or environmental restrictions. Functional feasibility evaluates the impact of technology changes on the estimated service lives. In addition, nuclear power stations operate under licenses granted by the Nuclear Regulatory Commission (NRC). Operating licenses for our operating plants are for 40 years. We have or intend to request 20-year life extensions of these operating licenses. If not extended, nuclear plant service lives would be limited by the expiration of licenses. During 2001, we increased the estimated service lives for our operating nuclear stations, certain fossil stations and our pumped storage station. As a result of the change in service lives, depreciation and decommissioning expense decreased $90 million ($54 million, net of income taxes). Annualized savings resulting from the change will be $132 million ($79 million, net of income taxes).

Outlook

Changes in the Utility Industry. The electric utility industry in the United States remains in transition. It is moving from a fully regulated industry, consisting primarily of integrated companies combining generation, transmission and distribution, to competitive wholesale generation markets with

continuing regulation of transmission and distribution. The transition has resulted in substantial disposition of generating assets by formerly integrated companies, the creation of separate and, in some cases, stand-alone generating companies and consolidation. During 2001, however, the pace of transition slowed. This slowdown was due primarily to public and governmental reactions to issues associated with deregulation efforts in California and the collapse of the wholesale electricity market in California.

At the Federal level, FERC remains committed to the development of wholesale generation markets. Although its proposal for the development of large regional transmission organizations to facilitate markets has been delayed, it is planning an initiative to standardize wholesale markets in the United States. At the state level, concerns raised by the California experiences have stalled new retail competition initiatives and slowed the separation of generation from regulated transmission and distribution assets.

We believe that the transition in the electric utility industry will continue, albeit at a slower pace than previously, particularly at the state level. This slower transition may be reflected in reduced industry consolidation in the near term and reduced disaggregation of regulated to unregulated services. These uncertainties may limit opportunities for us to pursue our plans to expand our generation portfolio.

We also believe that competition for electric generation services has created new risks and uncertainties in the industry. Some of these risks were clearly illustrated in California—the risks of inadequate sources of generation, having load obligations without owning generation, and price volatility. The situation in California also illustrated the need for additional infrastructure to support competitive markets. The uncertainties include future prices of generation services in both the wholesale and retail markets, supply and demand volatility, and changes in customer profiles that may impact margins on various electric service offerings. These uncertainties create additional risk for participants in the industry, including us, and may result in increased volatility in operating results from year to year.

Competitive Position. We compete nationally in the wholesale electric generation markets on the basis of price and service offerings, using our generation portfolio to assure customers of energy deliverability. We have agreed to supply ComEd and PECO with their load requirements for customers through 2006 and 2010, respectively. We have contracted with Exelon Energy, the competitive retail energy services subsidiary of Exelon, to meet its load requirements pursuant to its competitive retail generation sales agreements and, in addition, we have contracts to sell energy and capacity to third parties. To the extent that our resources exceed our contractual commitments, we market these resources on a short-term basis or sell them in the spot market.

Our supply agreements with ComEd and PECO are expected to provide us with a stable source of revenue; they do not, however, provide us with any guaranteed level of revenue. As long as we have commitments to ComEd and PECO, our revenues will largely be a function of the cost of fulfilling these obligations and how much electricity is available to sell in wholesale markets after fulfilling those contracts. Generally, to the extent market prices decrease, customers may have an incentive to obtain electricity from alternative energy suppliers. To the extent that customers choose alternative energy suppliers, our revenues from contracts with ComEd and PECO will be reduced and our revenues will depend more on prices in the wholesale markets. If market prices increase substantially and our load requirements exceed our generation capacity, we may be required to purchase expensive power in the wholesale markets. Thus, any dramatic change in electricity prices combined with switching by ComEd's and PECO's customers could have an adverse effect on our results of operations or financial condition. Further, while our contracts with ComEd and PECO are currently a substantial portion of our business, we cannot predict whether they will be renewed at the end of their respective terms or, if renewed, what the terms of such renewal would be.

Our future results of operations also depend upon our ability to operate our generating facilities efficiently to meet our contractual commitments and to sell energy services in the wholesale markets. A substantial portion of our generating capacity, including all of the nuclear capacity, is base-load generation designed to operate for extended periods of time at low variable costs. Nuclear generation is currently the most cost-effective way for us to meet our commitments for sales to affiliated entities and other utilities. During 2001, our nuclear generating fleet, including AmerGen, operated at a 94.4% weighted average capacity factor. The number of refueling outages, including AmerGen, is expected to increase to eleven in 2002 from six in 2001 and, accordingly, our planned nuclear capacity factor for 2002 is 91%. Failure to achieve these capacity levels may require us to contract or purchase more expensive energy in the spot market to meet these commitments. Maintenance and capital expenditures during nuclear refueling outages are expected to increase by $80 million and $24 million, respectively, in 2002 compared to 2001 as a result of the additional nuclear refueling outages. Because of our reliance on nuclear facilities, any changes in regulations by the NRC requiring additional investments or resulting in increased operating or decommissioning costs of nuclear generating units could adversely affect our results of operations.

Our wholesale marketing unit, Power Team, uses our generation portfolio, transmission rights and expertise to ensure delivery of generation to wholesale customers under long-term and short-term contracts. Power Team is responsible for supplying the load requirements of ComEd and PECO and markets the remaining energy in the wholesale markets. Power Team also buys and sells power in the wholesale markets. Trading activities were initiated in 2001 and represent a small portion of Power Team's activity. As of December 31, 2001, trading activities accounted for less than 1% of our EBIT. Trading activities are expected to increase modestly in 2002; trading activity growth will be dependent on the continued development of the wholesale energy markets and Power Team's ability to manage trading and credit risks in those markets. The spot markets also involve the credit risks of market participants purchasing energy, which we may not be able to manage or hedge. We use financial trading primarily to complement the marketing of our generation portfolio. We intend to manage the risk of these activities through a mix of long-term and short-term supply obligations and through the use of established policies, procedures and trading limits. Financial trading, together with the effects of SFAS No. 133, may cause volatility in our future results of operations.

Other Factors

Environmental. Our operations have in the past and may in the future require substantial capital expenditures in order to comply with environmental laws. Additionally, under Federal and state environmental laws, we are generally liable for the costs of remediating environmental contamination of property now owned by us or formerly owned by ComEd or PECO and of property contaminated by hazardous substances generated by us, ComEd or PECO.

As of December 31, 2001 and 2000, we had accrued $14 million and $16 million, respectively, for environmental investigation and remediation costs, other than decommissioning. We expect to spend $5 million for environmental remediation activities in 2002. We cannot predict whether we will incur other significant liabilities for any additional investigation and remediation costs at these or additional sites identified by us, environmental agencies or others, or whether such costs will be recoverable from third parties.

Security Issues and Other Impacts of Terrorist Actions. The events of September 11, 2001 have affected our operating procedures and costs and are expected to affect the cost and availability of the insurance coverages that we carry. The NRC has issued Safeguards and Threat Advisories to all nuclear power plant licensees, including us, requesting that they place their facilities on highest alert security status. In response to the NRC Advisories and on our own initiative, we also implemented enhanced security measures, such as increased guard forces, the erection of additional physical barriers, and heightened communication with authorities at all levels of government. In addition to the Advisories, the NRC began an initiative to perform a "top to bottom" review of its safeguards and security programs and requirements in light of the events of September 11.

On February 25, 2002, the NRC issued immediately effective orders modifying the operating licenses for all nuclear power plants to require all licensees, including us, to implement certain interim security enhancements. The security requirements imposed by the NRC's orders issued to us are currently estimated to increase capital expenditures by approximately $1 million per station for improvements, such as enhanced vehicle barriers, modifications to plant facilities and increased size of guard forces.

Insurance. We carry nuclear liability insurance. The Price-Anderson Act limits the liability of nuclear reactor owners for claims arising from a single incident. The current limit is $9.5 billion and is subject to change to account for the effects of inflation and changes in the number of licensed reactors. We carry the maximum available commercial insurance of $200 million. The remaining $9.3 billion is provided through mandatory participation in a financial protection pool. Price-Anderson is scheduled to expire on August 1, 2002. While there are numerous bills proposing to review Price-Anderson, we cannot predict at this time whether Congress will renew it or the effects on operations resulting from the expiration of the Price-Anderson Act.

In addition to nuclear liability insurance, we carry property damage and liability insurance for our properties and operations. Our property insurance through Nuclear Electric Insurance Limited (NEIL) provides coverage for damages caused by acts of terrorism at any of our nuclear generating stations. The terrorism endorsement to the NEIL policy specifies that the coverage applies to acts of terrorism similar to the September 11, 2001 events. In the event that one or more acts of terrorism cause accidental property damage within a 12-month period from the first accidental property damage under one or more policies for all insureds, the maximum recovery for all losses by all insureds will be an aggregate of $3.24 billion plus such additional amounts as the insurer may recover for all such losses from reinsurance, indemnity or any other source applicable to such losses. If total property losses exceed available funds under the policy, proportionate recovery is provided to cover a portion of an insured's property losses. The percentage recovery would be equal to the ratio of the insured's property losses and the total of all property losses.

NEIL also provides replacement power cost insurance in the event of a major accidental outage at a nuclear station. The policy provides for a waiting period before recovery of costs can commence. The premium for this coverage is subject to assessment for adverse loss experience, with a maximum assessment of $46 million per year. Recovery under this insurance for terrorist acts is subject to the $3.24 billion aggregate limit and is secondary to the property insurance described above.

We are self-insured to the extent that any losses may exceed the amount of insurance maintained. NEIL provides property and business interruption insurance for our nuclear operations. In recent years,

NEIL has made distributions to its members. Our distribution for 2001 was $69 million, which was recorded as a reduction to Operating and Maintenance Expense on our Statements of Income. Due in part to the September 11, 2001 events, we cannot predict the level of future distributions, although they are expected to be lower than historical levels.

In addition, we participate in the American Nuclear Insurers Master Worker Program, which provides coverage for worker tort claims filed for bodily injury caused by a nuclear energy accident. This program was modified, effective January 1, 1998, to provide coverage to all workers whose nuclear-related employment began on or after the commencement date of reactor operations. We will not be liable for a retrospective assessment under this new policy. However, in the event losses incurred under the small number of policies in the old program exceed accumulated reserves, a maximum retrospective assessment of up to $50 million could apply.

We do not carry any business interruption insurance other than NEIL coverage for nuclear operations. We cannot at this time predict the effect on our operations of any changes in any of these insurance policies because of terrorist acts or otherwise.

Benefit Plans. We maintain defined benefit pension plans and post-retirement welfare benefit plans. Essentially all of our employees are eligible to participate in these plans. Management employees and electing union employees, hired on or after January 1, 2001, are eligible to participate in newly established Exelon cash balance pension plans. Management employees who were active participants in the former ComEd and PECO pension plans on December 31, 2000 and remain employed by Exelon or a participating subsidiary on January 1, 2002, will have the opportunity to continue to participate in the pension plan or to transfer to the cash balance plan. Participants in the cash balance plan, unlike participants in the other defined benefit plans, may request a lump-sum cash payment upon the termination of their employment, which may result in increased cash requirements from pension plan assets. We may be required to increase future funding to the pension plan as a result of these increased cash requirements.

Due to the performance of the United States debt and equity markets in 2001, the value of assets held in trusts to satisfy the obligations of pension and postretirement benefit plans has decreased. Also, as a result of the merger and corporate restructuring, there was a larger number of employees taking advantage of retirement benefits in 2001 than in other years. These factors may also result in additional future funding requirements of the pension and postretirement benefit plans.

New Accounting Pronouncements

In 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, "Business Combinations" (SFAS No. 141), SFAS No. 142 "Goodwill and Other Intangible Assets" (SFAS No. 142, SFAS No. 143, and SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144).

SFAS No. 141 requires that all business combinations be accounted for under the purchase method of accounting and establishes criteria for the separate recognition of intangible assets acquired in business combinations. SFAS No. 141 is effective for business combinations initiated after June 30, 2001. In addition, SFAS No. 141 requires that unamortized negative goodwill related to pre-July 1, 2001 purchase be recognized as change in accounting principle concurrent with the adoption of SFAS No. 142. Included on AmerGen's balance sheet is $43 million of negative goodwill, net of accumulated amortization. Upon AmerGen's adoption of SFAS No. 141 on January 1, 2002, we will recognize our appropriate share of approximately $22 million in additional income as a cumulative effect of a change in accounting principle.

SFAS No. 142 establishes new accounting and reporting standards for goodwill and intangible assets. We adopted SFAS No. 142 as of January 1, 2002. Under SFAS No. 142, effective January 1,

2002, goodwill is no longer subject to amortization. After January 1, 2002, goodwill will be subject to an assessment for impairment using a two-step fair value based test, the first step of which must be performed at least annually, or more frequently if events or circumstances indicate that goodwill might be impaired. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step is performed. The second step compares the carrying amount of the goodwill to the fair value of the goodwill. If the fair value of goodwill is less than the carrying amount, an impairment loss would be reported as a reduction to goodwill and a charge to operating expense, except at the transition date, when the loss would be reflected as a cumulative effect of a change in accounting principle. As of December 31, 2001, we did not have any goodwill recorded on our Consolidated Balance sheets. Accordingly, we do not expect the adoption of SFAS No. 142 to have a material impact on our financial statements.

SFAS No. 143 provides accounting requirements for retirement obligations associated with tangible long-lived assets. We expect to adopt SFAS No. 143 on January 1, 2003. Retirement obligations associated with long-lived assets included within the scope of SFAS No. 143 are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction under the doctrine of promissory estoppel. Adoption of SFAS No. 143 will change the accounting for the decommissioning of our nuclear generating plants. Currently, we record the obligation for decommissioning ratably over the lives of the plants. The January 1, 2003 adoption of this standard will require a cumulative effect adjustment effective the date of adoption to adjust plant assets and decommissioning liabilities to the values they would have been had SFAS No. 143 been employed from the in-service dates of the plants.

The effect of this cumulative adjustment will be to increase the decommissioning liability to reflect a full decommissioning obligation in current year dollars. Additionally, SFAS No. 143 will require the accrual of an asset related to the full amount of the decommissioning obligation, which will be amortized over the remaining lives of the plants. The difference between the asset recognized and the liability recorded upon adoption of the standard will be charged to earnings and recognized as a cumulative effect, net of expected regulatory recovery. The decommissioning liability to be recorded represents an obligation for the future decommissioning of the plants, and as a result, interest expense will be accrued on this liability until such time as the obligation is satisfied.

We are in the process of evaluating the impact of SFAS No. 143 on our financial statements, and cannot determine the ultimate impact of adoption at this time; however, the cumulative effect could be material to our earnings. Additionally, although over the life of the plant the charges to earnings for the depreciation of the asset and the interest on the liability will be equal to the amounts currently recognized as decommissioning expense, the timing of those charges will change and in the near-term period subsequent to adoption, the depreciation of the asset and the interest on the liability could result in an increase in expense.

SFAS No. 144 establishes accounting and reporting standards for both the impairment and disposal of long-lived assets. This statement is effective for fiscal years beginning after December 15, 2001 and provisions of this statement are generally applied prospectively. We are in the process of evaluating the impact of SFAS No. 144 on our financial statements, and we do not expect the impact to be material.

BUSINESS

Overview

We are one of the largest competitive electric generation companies in the United States, as measured by owned and controlled megawatts. We combine our large, low-cost generation fleet with an experienced wholesale power marketing operation. We directly own generation assets in the Mid-Atlantic and Midwest regions with a net capacity of 19,715 MW, including 14,250 MW of nuclear capacity. We also control another 16,245 MW of capacity in the Midwest, Southeast and South Central regions through long-term contracts.

In addition to our own generation facilities, we have acquired a 49.9% interest in Sithe Energies, Inc. with an option to purchase, beginning in December 2002, the remaining 50.1% interest. Sithe develops, owns and operates 27 generation facilities in North America. Currently, Sithe has 3,371 MW of capacity in operation and 5,051 MW under construction or in advanced development. We also own a 50% interest in AmerGen Energy Company, LLC, a joint venture with British Energy plc. AmerGen owns three nuclear stations with total generation capacity of 2,398 MW.

The following chart reflects the geographic location of our generation portfolio by North American Electric Reliability Council Region (see "—Energy Markets" below), including our long-term contracts and investments.

Our Power Team division is a major wholesale marketer of energy that uses our generation portfolio, transmission rights and expertise to ensure delivery of generation to our wholesale customers under long-term and short-term contracts. Power Team is responsible for supplying the load requirements of our utility affiliates, ComEd and PECO, and markets the remaining energy in the wholesale markets. Power Team also buys and sells power in the wholesale spot markets.

Business Strategy

Our business strategy is to develop a national generation portfolio with fuel and dispatch diversity. To implement this strategy, we plan to:

•: grow our generation portfolio;
•: drive cost and operational leadership through proven fleet management and economies of scale; and
•: optimize the value of our low-cost generation portfolio through our power marketing expertise.

Grow Our Generation Portfolio. We intend to continue to grow our generation portfolio through asset acquisitions, development of new plants, innovative applications of technology, joint ventures and long-term off-take contracts. Regardless of the approach employed, we remain disciplined in our evaluation of opportunities to grow our business. We use sophisticated analytical tools to evaluate the potential returns on investments as well as the risks of these investments.

Drive Cost and Operational Leadership through Proven Fleet Management and Economies of Scale. Our facilities have achieved superior performance through a proven fleet management model, an experienced management team, highly trained employees and economies of scale. Our goals are to increase fleet output and to improve efficiency, while sustaining operational safety. We intend to achieve these results in our nuclear fleet by increasing capacity factors over historic levels, reducing refueling outage duration and increasing our generation capacity through power uprates and other modifications.

In addition, we have reduced operating and maintenance costs by $93 million by capturing merger synergies, achieving economies of our fleet scale at single-unit sites, implementing planned staff reductions and reducing costs of equipment and services through consolidated purchasing programs. In addition, we expect to reduce fuel costs through both contract management and improved fuel design and management.

Finally, we intend to apply for extensions to the operating licenses for our nuclear plants. In July 2001, we applied to the NRC for extension of the Peach Bottom 2 and 3 licenses and we expect to apply for extensions of the operating licenses for Dresden 2 and 3 and Quad Cities in 2003. AmerGen is also reviewing the potential for license extensions for Oyster Creek and Three Mile Island.

Optimize the Value of Our Low-Cost Generation Portfolio through Our Power Marketing Expertise. Power Team is responsible for marketing all the energy and capacity of our owned generation facilities, long-term contracts and the three AmerGen plants. We seek to maintain a net positive supply of capacity through ownership of generation assets and power purchase agreements. In 2001, Power Team had open-market sales of 78 million MWh. In addition to supplying ComEd and PECO, Power Team markets energy, capacity and ancillary services from our owned and contracted generation.

Power Team has also contracted for access to additional generation through bilateral long-term power purchase agreements. These agreements relate to the power from specific generation plants that Power Team dispatches in a manner similar to our owned assets. We enter into power purchase agreements with the objective of obtaining low-cost energy supply sources to meet our physical delivery obligations to customers. Power Team also purchases generation from the spot markets. Power Team's operations enable us to efficiently manage the dispatch of our generation facilities with real-time market information, including energy demand levels, supply availability, market pricing, weather expectations and the anticipated timing and duration of peak demand periods.

Competitive Strengths

We believe that we are well positioned to play a leading role in the competitive energy industry because of our:

•: competitive, low-cost fleet of generation assets;
•: operating experience and expertise;
•: critical mass of generation capacity with economies of scale;
•: stable revenue streams under long-term contracts with ComEd and PECO; and
•: extensive experience in the wholesale power markets.

Competitive, Low-Cost Fleet of Generation Assets. Our 41,362 MW fleet of generation assets makes us the largest competitive electric generation company in the United States. Our low-cost advantage is driven by our ownership of or investment in 11 nuclear generation stations, consisting of 19 units, with net capacity totaling 15,449 MW. The production costs of our nuclear fleet are significantly below the average prices of electricity in the markets where we operate. The nuclear plants benefit from stable fuel costs, minimal environmental impact from operations and a safe operating history. In addition, our fuel sources for other plants include oil, coal, gas, water and wind.

Operating Experience and Expertise. We have achieved superior operating performance in our generation business through the leadership of a deep and experienced management team. We benefit from a coordinated approach to fleet management, sharing of "best-in-class" practices across our organization and broad employee recognition that exceptional performance is required to succeed in a competitive environment. Using this experience and coordinated approach, we are increasing the capacity of our generation units through power uprates and other modifications.

Critical Mass of Generation Capacity with Economies of Scale. We believe that a limited number of substantial competitors will emerge from the consolidation and transformation of the energy industry. Our generation assets and our investments in Sithe and AmerGen provide critical mass and a leadership position in the new energy markets. As the largest generator of nuclear power in the United States, we can take advantage of our scale and scope to negotiate favorable terms for the materials and services that our business requires.

Stable Revenue Streams under Long-Term Contracts with ComEd and PECO. Under electric utility restructuring legislation in Illinois and Pennsylvania, ComEd and PECO are obligated to supply generation services to customers who do not or cannot choose an alternative energy supplier during the transition periods to a competitive supply marketplace. We have entered into long-term agreements to supply the load requirements of ComEd and PECO through 2006 and 2010, respectively. In 2001, sales to ComEd and PECO under these agreements accounted for approximately 58% of our revenues. Our contracts with ComEd and PECO, combined with our contracts to sell power in the wholesale markets, provide us with an appropriate balance in our exposure between long- and short-term commitments and wholesale market exposure.

Extensive Experience in Wholesale Power Markets. Power Team has substantial experience in energy markets, generation dispatch and the requirements for the physical delivery of power. Operating from our large asset platforms in the Mid-Atlantic and Midwest regions, Power Team has established itself as a leading asset-based power marketer. Because of our substantial asset base, Power Team has been able to distinguish itself within these regions as a reliable supplier. Currently, we are expanding our operations and generation portfolio through power purchase contracts and are also opportunistically pursuing the acquisition of generation assets nationally. With our investment in Sithe, we have established a base for future growth in New England and New York.

Overview of Generation Assets and Investments

Our generation assets and investments consist of the following:

Type of Capacity			Capacity (MW)
Owned Generation Assets(1,2)
	Nuclear		14,250
	Fossil		3,881
	Hydro		1,584

			19,715
Long-term Contracts(3)			16,245
AmerGen and Sithe(2)			2,881

		Available Resources	38,841
Under Construction or in Advanced Development(2)			2,521

		Total Generating Resources	41,362

(1): See "Fuel" for sources for fuels used in electric generation.
(2): Based on Generation's ownership.
(3): Contracts range from 1 to 29 years.

Our owned generation assets are primarily the nuclear generation stations in the Midwest region that we acquired from ComEd and the nuclear, fossil and hydroelectric stations in the Mid-Atlantic region that we acquired from PECO.

Our investments in generation assets consist of a 49.9% interest in Sithe and a 50% interest in AmerGen. Sithe, an independent power producer, owns and operates 27 power generation facilities in North America, with approximately 3,371 MW of net generation capacity and approximately 5,051 MW of capacity under construction or in advanced development. AmerGen owns three nuclear plants with a total capacity of 2,398 MW.

We also have access to generation capacity through contractual commitments. In particular, when ComEd sold its fossil generation assets to Midwest Generation, LLC, a subsidiary of Edison Mission Energy, ComEd entered into contracts for energy and capacity from these fossil assets. These contracts were transferred to us. In addition, we have entered into long-term power purchase agreements with independent power producers.

Dispatch and Fuel Types. Power generation facilities can generally be categorized into three classes based on the amount of time that the facilities are operating and their variable costs to produce electricity. A facility's variable cost to produce electricity, in turn, determines the order in which it is used to meet fluctuations in electricity demand. Base-load facilities are those that typically have low variable costs and provide power at all times when available. Base-load facilities are used to satisfy the base level of demand for power, or "load," that is not dependent upon time of day or weather. Peaking facilities have the highest variable cost to generate electricity and typically are used only during periods of highest demand for power. Intermediate facilities have cost and usage characteristics in between those of base-load and peaking facilities.

The following charts provide a breakdown of our generation assets and investments by dispatch and fuel type, as of December 31, 2001:

Overview of Power Marketing

Power Team, our wholesale marketing division, markets power nationally 24 hours a day, 7 days a week. Power Team schedules power for customers and dispatches our owned and operated generation facilities, including the AmerGen facilities, but excluding the Sithe facilities. Power Team has experience and resources capable of meeting the energy needs of customers throughout the country.

We have entered into bilateral long-term contracts for sales of energy to load-serving entities, including electric utilities, municipalities, electric cooperatives, and retail load aggregators. We have also entered into agreements to deliver energy to wholesale market participants, whose primary focus is the resale of energy products for delivery. We deliver our energy to these customers through access to transmission assets or rights for transmission service.

We compete nationally in the wholesale electric generation markets on the basis of service offerings and price, using our generation assets to assure customers of energy delivery. To the extent that our resources exceed our contractual commitments, we market those resources on a short-term basis.

Owned Generation Assets

The following table sets forth at December 31, 2001 the net generation capacity of, and other information about, the stations that we own directly:

Fuel/Technology		Station	Location	No. of Units	% Owned(1)	Primary Fuel Type	Dispatch Type	Net Generation Capacity (MW)(2)
Nuclear(3)		Braidwood	Braidwood, IL	2		Uranium	Base-load	2,372
		Byron	Byron, IL	2		Uranium	Base-load	2,391
		Dresden	Morris, IL	2		Uranium	Base-load	1,659
		LaSalle County	Seneca, IL	2		Uranium	Base-load	2,298
		Limerick	Limerick Twp., PA	2		Uranium	Base-load	2,312
		Peach Bottom	Peach Bottom Twp., PA	2	50.00	Uranium	Base-load	1,112	(4)
		Quad Cities	Cordova, IL	2	75.00	Uranium	Base-load	1,172	(4)
		Salem	Hancock's Bridge, NJ	2	42.59	Uranium	Base-load	934	(4)

								14,250
Fossil		Cromby 1	Phoenixville, PA	1		Coal	Base-load	144
(Steam Turbines)		Cromby 2	Phoenixville, PA	1		Oil/Gas	Intermediate	201
		Delaware	Philadelphia, PA	2		Oil	Peaking	250
		Eddystone 1, 2	Eddystone, PA	2		Coal	Base-load	581
		Eddystone 3, 4	Eddystone, PA	2		Oil/Gas	Intermediate	760
		Schuylkill	Philadelphia, PA	1		Oil	Peaking	166
		Conemaugh	New Florence, PA	2	20.72	Coal	Base-load	352	(4)
		Keystone	Shelocta, PA	2	20.99	Coal	Base-load	357	(4)
		Fairless Hills	Falls Twp., PA	2		Landfill Gas	Peaking	60

								2,871
Fossil		Chester	Chester, PA	3		Oil	Peaking	39
(Combustion		Croydon	Bristol Twp., PA	8		Oil	Peaking	380
Turbines)		Delaware	Philadelphia, PA	4		Oil	Peaking	56
		Eddystone	Eddystone, PA	4		Oil	Peaking	60
		Falls	Falls Twp., PA	3		Oil	Peaking	51
		Moser	Lower Pottsgrove Twp., PA	3		Oil	Peaking	51
		Pennsbury	Falls Twp., PA	2		Landfill Gas	Peaking	6
		Richmond	Philadelphia, PA	2		Oil	Peaking	96
		Schuylkill	Philadelphia, PA	2		Oil	Peaking	30
		Southwark	Philadelphia, PA	4		Oil	Peaking	52
		Salem	Hancock's Bridge, NJ	1	42.59	Oil	Peaking	16	(4)
		LaPorte	LaPorte, TX	4		Gas	Peaking	160

								997
Fossil		Cromby	Phoenixville, PA	1		Oil	Peaking	3
(Internal		Delaware	Philadelphia, PA	1		Oil	Peaking	3
Combustion/Diesel)		Schuylkill	Philadelphia, PA	1		Oil	Peaking	3
		Conemaugh	New Florence, PA	4	20.72	Oil	Peaking	2	(4)
		Keystone	Shelocta, PA	4	20.99	Oil	Peaking	2	(4)

								13
Hydroelectric		Conowingo	Harford Co., MD	11		Hydro	Base-load	512
Pumped Storage		Muddy Run	Lancaster Co., PA	8		Hydro	Intermediate	1,072

								1,584
	Total			101				19,715

(1): 100%, unless otherwise indicated.
(2): For nuclear stations, except Salem, capacity reflects the annual mean rating. All other stations, including Salem, reflect a summer rating.
(3): All nuclear stations are boiling water reactors except Braidwood, Byron and Salem, which are pressurized water reactors.
(4): Generation's portion.

We operate all of the facilities except for Salem, which is operated by PSEG Nuclear LLC, Keystone and Conemaugh, which are operated by Reliant Energy, and LaPorte, which is operated by Air Products.

Nuclear Facilities

Nuclear facilities represent 73% of our directly owned generation capacity. Nuclear facilities are base-load plants. In 2001, approximately 54% of our electric supply was generated from the nuclear facilities.

The following table sets forth the capacity factors for our nuclear facilities for the last five years.

	Year Ended December 31,
Capacity Factors of Our Nuclear Facilities	Year Ended December 31,
Capacity Factors of Our Nuclear Facilities	1997		1998		1999		2000		2001
Nuclear facilities previously owned by PECO	90	%	86	%	93	%	92	%	93	%
Nuclear facilities previously owned by ComEd(1)	49		65		89		93		95

(1): The capacity factors for 1997 through 1999 reflect the shutdown of LaSalle and Zion for portions of the period.

Nuclear facilities are subject to comprehensive regulation by the NRC under the Atomic Energy Act of 1954. See "Regulation." Nuclear units are operated under licenses granted by the NRC, which specify permitted operations of the unit and which must be amended to reflect certain changes in operation and plant modifications.

Licenses. We have 40-year operating licenses for each of our nuclear units. We applied to the NRC in July 2001 for extension of the Peach Bottom 2 and 3 licenses and we expect to apply for the extension of the operating license for Dresden 2 and 3 and Quad Cities in 2003. AmerGen is reviewing the potential for license extensions for Oyster Creek and Three Mile Island. The operating license extension process takes approximately four to five years from the commencement of the project until completion of the NRC's review. The NRC review process takes approximately two years from the docketing of an application. Each requested license extension is expected to be for 20 years beyond the current license period. The following table summarizes operating license expiration dates for our nuclear facilities in service.

Station	Unit	In-Service Date	Current License Expiration
Braidwood	1	1988	2026
	2	1988	2027
Byron	1	1985	2024
	2	1987	2026
Dresden	2	1970	2009
	3	1971	2011
LaSalle	1	1984	2022
	2	1984	2023
Quad Cities	1	1973	2012
	2	1973	2012
Limerick	1	1986	2024
	2	1990	2029
Peach Bottom	2	1974	2013
	3	1974	2014
Salem	1	1977	2016
	2	1981	2020

Fuel. The fuel costs for nuclear generation are substantially less than those of fossil-fuel generation. Consequently, nuclear generation is the most cost-effective way for us to meet our commitment to supply the requirements of ComEd and PECO and for sales to others.

The cycle of production of nuclear fuel includes the mining and milling of uranium ore into uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride, the enrichment of the uranium hexafluoride, and the fabrication of fuel assemblies.

We have uranium concentrate inventory and supply contracts sufficient to meet all of our uranium concentrate requirements through 2003. Our contracted conversion services are sufficient to meet all of our uranium conversion requirements through 2004. All of our enrichment requirements have been contracted through 2004. Contracts for fuel fabrication have been obtained through 2005. We do not anticipate difficulty in obtaining the necessary uranium concentrates or conversion, enrichment or fabrication services for our nuclear units.

We obtain approximately 25% of our uranium enrichment services from European suppliers. There is an ongoing trade action by USEC, Inc. alleging dumping in the United States against European enrichment services suppliers. In January 2002, the U.S. International Trade Commission determined that USEC was "materially injured or threatened with material injury" by low-enriched uranium exported by European suppliers. The U.S. Department of Commerce has assessed countervailing and anti-dumping duties against the European suppliers. Both USEC and the European suppliers have appealed these decisions. We are uncertain at this time as to the outcome of the pending appeals; however, as a result of these actions we may incur higher costs for uranium enrichment services necessary for the production of nuclear fuel.

The capacity factor of a nuclear unit depends in part on the duration of the unit's refueling outage. Each of our nuclear units has a scheduled refueling outage every two years. We have become an industry leader in reducing the duration of our refueling outages.

Fossil and Hydroelectric Facilities

Our fossil units include:

•: base-load units —the coal-fired units at Eddystone and Cromby and our interests in the Keystone and Conemaugh Stations;
•: intermediate units —the Eddystone and Cromby units that have dual fuel (oil/gas) capability; and
•: peaking units —oil- or gas-fired steam turbines, combustion turbines and internal combustion units at various locations.

Our hydroelectric facilities include:

•: base-load units —at the Conowingo run-of-river hydroelectric facility on the Susquehanna River in Harford County, Maryland; and
•: intermediate units —at the Muddy Run pumped-storage hydroelectric facility in Lancaster County, Pennsylvania.

We operate all of our fossil and hydroelectric facilities other than La Porte, Keystone and Conemaugh. In 2001, approximately 3% of our electric output was generated from our owned fossil and hydroelectric generation facilities. The majority of this output was dispatched by the Power Team to support our power marketing activities.

We are in the process of extensively renovating the Conowingo and Muddy Run control systems to improve plant efficiency. We are planning to overhaul four units at Conowingo, which is expected to increase capacity by 10 MW per unit.

The controls at all our combustion turbine facilities have been re-configured to provide remote start capability for all units, enabling immediate response time to capture fluctuations in electric market prices.

Fuel Management. Coal is obtained for our coal-fired plants primarily through annual contracts with the remainder supplied through either short-term contracts or spot-market purchases.

Some of our fossil generation stations can use either oil or gas as fuel. Natural gas is procured through annual, monthly and spot-market purchases. Fuel oil inventories are managed such that in the winter months sufficient volumes of fuel are available in the event of extreme weather conditions and during the remaining months inventory levels are managed to take advantage of favorable market pricing. In 2001, Power Team started to use financial instruments to mitigate price risk associated with multi-commodity price exposures. We also hedge forward price risk with both over-the-counter and exchange-traded instruments.

Licenses. Fossil generation plants are generally not licensed and, therefore, the decision on when to retire plants is fundamentally an economic one. Hydroelectric plants are licensed by FERC. The Muddy Run and Conowingo facilities have licenses that expire in September 2014. We are considering applying to FERC for license extensions of 40 years for both plants, but the duration of any license extension will depend on then-current policies at FERC. The process of applying for an extension to an existing hydroelectric license generally takes at least eight years.

Long-Term Contracts

In addition to our owned generation assets, we sell electricity that we purchase under the long-term contracts described below:

Seller	Location	Capacity (MW)	Expiration
Midwest Generation, LLC	Various in Illinois	9,105	2004
Kincaid Generation, LLC	Kincaid, Illinois	1,158	2012
Tenaska Georgia Partners, LP	Franklin, Georgia	900	2029
Tenaska Frontier, Ltd	Shiro, Texas	830	2020
Others	Various	4,252	2002 to 2022

Total		16,245

In 2001, approximately 37% of our sales were of purchased power.

Midwest Generation Contract

We are a party to contracts with Midwest Generation, LLC, a subsidiary of Edison Mission Energy. Under the contracts, we initially had the right to purchase through 2004 the capacity and energy associated with approximately 9,460 MW of fossil-fired generation stations located in Northern Illinois, formerly owned by ComEd. The generation units include base-load, intermediate and peaking units. Under the contracts, we pay a fixed capacity charge that varies by season and a fixed energy charge. The capacity charge is reduced to the extent the plants are unable to generate and deliver energy when requested. Under the contracts, we have annual rights to reduce the capacity and related energy that we are obligated to purchase, and we recently exercised some of these rights. Effective January 1, 2002, we have released all of the 355 MW of oil-fired peaking capacity that is covered by the contracts. We will decide whether to exercise yearly options in 2003 and 2004 depending on our projected need for capacity and energy to fulfill our obligations under our agreement with ComEd or otherwise, taking into account forward market conditions and other alternatives. We are also in arbitration with Midwest Generation under the contract relating to the unavailability of certain units in January 2001.

Investments

Sithe Energies, Inc.

We own 49.9% of Sithe Energies, Inc. Another subsidiary of Exelon acquired the Sithe interest on December 18, 2000 for $696 million and $8 million of acquisition costs, and transferred it to us in January 2001 in connection with Exelon's corporate restructuring. Sithe, headquartered in New York, is a leading independent power producer, with ownership interests in 27 facilities in North America. Sithe has net generation capacity of 3,371 MW, primarily in New York and Massachusetts, 2,651 MW under construction and 2,400 MW in advanced development.

For the year ended December 31, 2001, Sithe had annual revenues (excluding revenues from operations disposed of during 2001) of approximately $1 billion. On December 31, 2001, Sithe had long-term debt of approximately $2.3 billion, including $2.1 billion of non-recourse project debt and excluding $107 million of non-recourse project debt associated with Sithe's equity investments. In December 2001, Sithe entered into a new 18-month corporate credit facility for $500 million expiring in June 2003. As of December 31, 2001, Sithe had drawn approximately $176 million under this facility and extended approximately $161 million in letters of credit. In connection with that credit facility, Exelon agreed to provide the lenders with a support letter confirming its investment in Sithe and Exelon's agreement to maintain a positive net worth of Sithe. Through internally generated cashflows and the corporate credit facility, Sithe has sufficient liquidity to cover all 2002 operating and capital commitments.

The following table shows Sithe's principal assets as of December 31, 2001.

Type of Plant	Station	Location	No. of Units	Fuel	Dispatch Type	Net Generation Capacity (MW)
Merchant Plants	Batavia	New York	1	Gas	Intermediate	50
	ForeRiver 1, 2	Massachusetts	2	Oil	Peaking	26
	Framingham 1, 2, 3	Massachusetts	3	Oil	Peaking	37
	Massena	New York	1	Gas/Oil	Intermediate	66
	Mystic 4, 5, 6, 7	Massachusetts	4	Oil	Intermediate	995
	Mystic CT	Massachusetts	1	Oil	Peaking	11
	New Boston 1, 2	Massachusetts	2	Gas/Oil	Intermediate	760
	New Boston 3	Massachusetts	1	Oil	Peaking	20
	Ogdensburg	New York	1	Gas/Oil	Intermediate	71
	West Medway 1, 2, 3	Massachusetts	3	Gas/Oil	Peaking	165
	Wyman 4	Maine	1	Oil	Intermediate	36
	Cardinal	Canada	1	Gas	Base-load	157
Qualifying Facilities	Allegheny 5, 6, 8, 9	Pennsylvania	4	Hydro	Intermediate	51
	Bypass	Idaho	1	Hydro	Base-load	10
	Elk Creek	Idaho	1	Hydro	Base-load	2
	Greeley	Colorado	1	Gas	Base-load	48
	Hazelton	Idaho	1	Hydro	Base-load	9
	Independence	New York	1	Gas	Base-load	614
	Ivy River	North Carolina	1	Hydro	Base-load	1
	Kenilworth	New Jersey	1	Gas/Oil	Base-load.	26
	Montgomery Creek	California	1	Hydro	Base-load	3
	Naval Station	California	1	Gas/Oil	Base-load	45
	Naval Training Center	California	1	Gas/Oil	Base-load	23
	North Island	California	1	Gas/Oil	Base-load	37
	Oxnard	California	1	Gas	Base-load	48
	Rock Creek	California	1	Hydro	Base-load	4
	Sterling	New York	1	Gas	Intermediate	56
Under Construction	ForeRiver 3	Massachusetts	1	Gas/Oil	Base-load	807
	Mystic 8, 9	Massachusetts	2	Gas	Base-load	1,614
	TEG 1, 2	Mexico	2	Coke	Base-load	230
Under Advanced Development	Heritage 1, 2	New York	2	Gas	Base-load	800
	Goreway	Canada	1	Gas	Base-load	800
	Southdown	Canada	1	Gas	Base-load	800

Total			48			8,422

Sithe also holds other international assets, which are accounted for by Sithe as "held for sale" consistent with Sithe's strategy to exit the international power-development business and are not shown on the table. Proceeds from their sale, to the extent the proceeds are greater or less than the assets' net book value, will be solely for the account of the holders of the remaining 50.1% interest in Sithe. Proceeds from their sale equal to the assets' net book value will be solely for our account.

A majority of Sithe's merchant capacity is located in the Boston area. These facilities were purchased from Boston Edison Company in 1997. Prior to the purchase of these facilities, Sithe received authority from FERC to sell energy and capacity and ancillary services at market-based rates.

Purchase Option. Beginning December 18, 2002, we will have the right to purchase all (but not less than all) of the remaining outstanding shares of the Sithe common stock. The option expires on December 18, 2005. In addition, each of Sithe's other stockholder groups will have the right to require us to purchase all (but not less than all) of its shares during the same period in which we can exercise our option. At the end of that period, if we have not exercised our purchase option and the other Sithe stockholders have not exercised their put rights, we will have a one-time option to purchase shares

from the other stockholders to bring our holdings to 50.1% of the total outstanding shares. If we exercise our option or if all the stockholder groups exercise their put rights, the purchase price for 70% of the remaining 50.1% of the Sithe stock will be set at a fair market value plus a 10% premium in the case of a call or 10% discount in the case of a put, subject to a floor of $430 million and a ceiling of $650 million, and the remaining portion will be valued at fair market value, subject to a floor price of $141 million and a ceiling price of $330 million, plus, in each case, interest accrued from the beginning of the exercise period.

Under the terms of a stockholders' agreement, Sithe's board of directors consists of six directors, of which we have the right to nominate three. The approval of the majority of the entire board is required for certain actions, including approval of any agreement to purchase or sell electricity that will not be fully performed, or that is not terminable without penalty, before December 18, 2003. The approval of two-thirds of the stockholders is required to take certain actions, including incurring recourse debt in excess of $25 million.

Sithe's qualifying facilities (each a "QF") generally have been financed with non-recourse project finance debt and have entered into long-term, fixed rate contracts with various utilities. The debt and the contracts with the utilities are secured by the QF assets.

We are restricted under PUHCA from owning more than 50% of any QF. Accordingly, Sithe has agreed to use commercially reasonable efforts to sell or otherwise restructure each QF so as not to prohibit the purchase from occurring. In the event that the QFs are not sold or restructured at the time of the purchase of the remaining interest in Sithe, we may need alternative holding structures so as not to prohibit the purchase. Sithe is undertaking a comprehensive review of each QF.

Construction. Sithe's most significant construction projects are the Mystic 8 and 9 and ForeRiver plants, located in the Boston area. Both projects are intended to be merchant facilities and have been financed on a project finance basis, with recourse for repayment of the debt limited to the assets the Sithe project entity.

Washington Group International ("WGI"), as a result of its purchase of Raytheon Engineers & Constructors, Inc., served as the engineering, procurement, and construction ("EPC") contractor for the Mystic 8 & 9 and Fore River projects. In March 2001, WGI abandoned the projects and was terminated by Sithe as EPC contractor. Shortly thereafter, Raytheon, as guarantor of the EPC contractor's obligations under the applicable EPC agreements, stepped in to recommence construction activities at the project sites. WGI, recently reorganized under the federal bankruptcy laws, has been engaged by Raytheon to assist in completing the projects.

Originally, the commercial operation date for Mystic 8 & 9 under the EPC contract was April 19, 2002 and for Fore River was May 31, 2002. Because of delays in construction, Raytheon's project schedules for Mystic 8 & 9 and Fore River call for these projects to be available for operation on July 10, 2002, October 19, 2002 and September 2, 2002, respectively, but it is not certain that such objectives will be met. The EPC agreements call for liquidated damages to be paid to Sithe in the event of unexcused delays in the commercial operation date. Also, as a result of these delays, Sithe is liable for damages to its fuel supplier for its inability to accept a minimum amount of gas as originally scheduled.

Other Matters. On May 14, 2001, NSTAR Electric & Gas Corporation, the successor entity to Boston Edison, filed a complaint with FERC pursuant to section 206 of the Federal Power Act against four of Sithe's New England subsidiaries and PG&E Energy Trading. In the complaint, NSTAR accuses the four Sithe subsidiaries and PG&E of holding market power in generation in and around Boston and of engaging in bidding practices that capitalize on transmission constraints in the Boston area to drive up electricity prices. Sithe's response to the complaint was filed on June 4, 2001. In its filing, Sithe asserted that NSTAR's complaint is without merit and that the governing precedents support

continuance of Sithe's market-based rate authority and preclude the grant of the refunds sought by NSTAR. Since June 4, 2001, NSTAR and Sithe have each filed several pleadings further detailing their positions. In addition, ISO-New England filed an answer to NSTAR's complaint in support of Sithe. Sithe also responded to NSTAR's protest of the three-year market update filing of Sithe's FERC jurisdictional affiliates. FERC has not yet taken any action in these matters.

The Independence power station is a gas-fired power plant located in Scriba, New York directly owned by Sithe Independence Power Partners ("SIPP"). On June 29, 2001, Sithe restructured the Independence project. As part of this restructuring, SIPP amended its long-term gas supply agreement with Enron North America Corp. ("ENA") and Sithe sold an indirect 40% limited partnership interest in SIPP to an Enron Corp subsidiary for $186 million. As a result of restructuring, SIPP entered into a $419.3 million secured subordinated loan. The loan bears interest at an annual rate of 7%, which is payable semi-annually beginning on December 1, 2001. The principal amount of the loan will be repaid in 40 semi-annual installments commencing June 1, 2015. In connection with the restructuring, SIPP also entered into tolling arrangements for the Independence Project with Dynegy Power Marketing, Inc. that commenced on July 1, 2001 and run through 2014.

AmerGen Energy Company, LLC

AmerGen Energy Company, LLC was formed in 1997 by PECO and British Energy plc, a Scottish corporation, to acquire and operate nuclear generation facilities in North America. Currently, AmerGen owns three single-unit nuclear generation facilities which are described in the table below. AmerGen operates these nuclear facilities; however, we provide AmerGen with many services, including management services, in connection with the operation and support of these facilities under a Services Agreement dated March 1, 1999. In addition, our chief nuclear officer holds the same position at AmerGen. See "Certain Transactions—AmerGen Services Agreement." As part of the restructuring, PECO transferred its 50% interest in AmerGen to us in January 2001.

Station	Year Acquired	Location	Net Generation Capacity (MW)	License Expiration Date(1)
Clinton Nuclear Power Station	1999	Clinton, IL	933	2026
Unit 1 of Three Mile Island ("TMI") Nuclear Station	1999	Londonderry Twp., PA	835	2014
Oyster Creek Nuclear Generation Facility	2000	Forked River, NJ	630	2009

Total			2,398

(1): AmerGen is reviewing the potential for license extensions for the Oyster Creek and Unit 1 of TMI.

The capacity factors for the AmerGen plants for 1999, 2000 and 2001 were 57%, 87% and 88.5%, respectively. The 1999 capacity factor reflects the shutdown of Clinton for the portion of 1999 prior to our acquisition.

As part of each acquisition of its nuclear facilities, AmerGen entered into a power sales agreement with the seller. The agreement with Illinois Power Company for Clinton is for 75% of the output for a term expiring at the end of 2004. Under a 1999 power purchase agreement, we purchase from AmerGen all of the residual energy for Clinton through December 31, 2002. The agreement with GPU, Inc. for Oyster Creek is for all of the output and expires on March 31, 2004. We buy the output of TMI pursuant to an agreement with AmerGen that expires on December 31, 2014.

AmerGen maintains a decommissioning trust fund for each of its plants in accordance with NRC regulations and believes that amounts in these trust funds, together with investment earnings thereon

and additional contributions for Clinton from Illinois Power, will be sufficient to meet its decommissioning obligations.

Under its LLC Agreement, AmerGen is managed by or at the direction of a management committee, which consists of six voting representatives, three of whom are appointed by British Energy and three by us. In addition, we appoint the chairman of the management committee. Action by the management committee generally requires the affirmative vote of a majority of members.

We may transfer our interest in AmerGen, as may British Energy, subject to a right of first refusal of the other party and to the right of the other party to require a third party buying the interest to also purchase the other party's interest.

In February 2002, Generation entered into an agreement to loan AmerGen up to $75 million at an interest rate of 1-month London Interbank Offering Rate plus 2.25%. As of March 31, 2002, $46 million has been loaned to AmerGen. The loan is due November 1, 2002.

Exelon has committed to provide AmerGen with capital contributions equivalent to 50% of the purchase price of any acquisitions AmerGen makes in 2002.

Portfolio Growth

We are growing our portfolio by investing in plant modifications through investments and acquisitions, among them our investments in Sithe and AmerGen. In addition, in July 2001 we applied to the NRC for extension of the Peach Bottom 2 and 3 licenses and we expect to apply for extensions of operating licenses for Dresden 2 and 3 and Quad Cities in 2003. AmerGen is reviewing the potential for license extensions for Oyster Creek and TMI.

In December 2001, we agreed to purchase two generation plants located in the Dallas-Fort Worth metropolitan area from TXU Corp. to expand its presence in the Texas region. The $443 million purchase of the two natural-gas and oil-fired plants, to be financed through available cash and borrowings from Exelon, will add approximately 2,334 MW capacity. The transaction includes a power purchase agreement and tolling agreement for TXU to purchase power during the months of May through September from 2002 through 2006. During the periods covered by the power purchase agreement, TXU will make fixed capacity payments and will provide us fuel in return for exclusive rights to the energy and capacity of the generation plants. The closing of the acquisition is contingent upon receipt of the necessary regulatory approvals and is anticipated to occur in the second quarter of 2002.

We are in the process of increasing the capacity and output of our nuclear fleet through power uprates, plant modifications and refinements. These projects, which have the potential of adding up to 885 MW of capacity by the end of 2003, require NRC approval. For example, in December 2001, the NRC approved power uprates for Dresden Units 2 and 3 (allowing an increase of approximately 17% above the current rated thermal power) and Quad Cities Units 1 and 2 (allowing an increase of approximately 17.8% above the current rated thermal power). We constantly seek opportunities to improve the power output of each station by applying new technology, engineering upgrades and design improvements.

We are in the process of constructing a 350 MW gas-fired peaking facility in Chicago together with Peoples Energy Resources Corp. We expect the facility to begin operations in the summer of 2002.

In 2001, we completed the purchase of an additional 3.755% interest in the Peach Bottom Station from Atlantic City Electric Company. Total cash paid for the additional interest, including nuclear fuel, was $7 million. As part of this purchase, nuclear decommissioning funds of $29 million were also transferred to us. We are now a 50% owner of Peach Bottom.

Pebble Bed Modular Reactor. We are a 12.5% stakeholder in Pebble Bed Modular Reactor (Pty) Ltd., which is a consortium of investors (including British Nuclear Fuels, ESKOM Enterprises and the Industrial Developmental Corporation of South Africa) which is studying the feasibility of building a demonstration reactor in South Africa and commercializing the Pebble Bed design. There are a number of potential safety and economic advantages that have drawn favorable interest in the PBMR technology: the reactor modulars are small; they require less construction time; they are refueled without requiring a shut down; they do not require large external cooling water sources; and they are inherently safer than light water reactors. As a new technology, PBMR must address many first-of-a-kind issues. In addition, the cost of the final product to the end user must be competitive with alternative energy sources. The decision by the members of the consortium to move ahead with finalizing the design and construction of a demonstration plant in South Africa was due to be made in November 2001, but was delayed for up to a year to resolve a number of technical issues. We believe that the PBMR technology is feasible; however, significant work remains to determine the commercial viability of the technology for use as an alternative electric energy generation source.

Development of New Uranium Centrifuge Plant. In December 2001, we signed an agreement to purchase general and limited partnership interests in Louisiana Energy Services, L.P. ("LES") totaling 6.75% from Graystone Corporation and Le Paz Incorporated, respectively. We expect to close on the acquisition of these interests in April 2002. LES was formed in the early 1990s by a consortium of companies to design, build and operate a private uranium enrichment facility. LES was officially abandoned in 1998 because, among other reasons, there was a perceived weakness in demand for uranium enrichment services due to uncertainly about the outlook for nuclear power in the U.S. In the last several years, the regulatory climate and market conditions have turned more favorable. For example, since the NRC has successfully processed license extension applications and power uprates, the long-term outlook for the uranium enrichment market may be stronger than previously believed, although future demand for uranium enrichment cannot be predicted with certainty. However, Exelon's need for a reliable competitively priced supply of enriched uranium is clear.

LES, through its principal partner Urenco, has notified the NRC of its plans for submitting an application to license a new centrifuge uranium enrichment plant in the U.S. We and Urenco are part of what is expected to be a realigned LES consortium, which would also include Duke Energy and Entergy. LES has requested an opportunity to begin a pre-application review process with the NRC, with a view towards submitting an application to the NRC in the fourth quarter of 2002. The LES consortium is currently working to site the new facility. We do not expect these costs to be material to us.

Several additional factors may affect the companies' plans. One factor relates to the potential for significantly enhanced security requirements in light of the events of September 11, 2001, which in turn would add cost. Another situation involves USEC Inc.'s recent statements about the possible expansion of its uranium enrichment capacity by constructing new gas centrifuge machines. These apparent plans are related to the continuing negotiations between USEC Inc. and Russia's Techsnabexport to finalize a new 12-year agreement on the sale of uranium to the U.S. from Russian high-enriched uranium. A final factor is the continuation of an agreement that severely restricts the amount of enriched uranium that can be imported into the United States from Russia. The Russian Federation has petitioned for a review of this agreement to have the restriction removed in 2004.

Power Team

Power Team conducts our power marketing activities by:

•: managing our supply obligations to ComEd and PECO and our other customers;
•: marketing owned and contracted-for generation resources not used to meet our supply commitments in the bilateral and regional wholesale markets; and

•: managing the market and price risks of our generation resources and commitments, including fossil fuel prices, through hedging and other power marketing and trading activities.

Power Team manages our supply obligations to ComEd, PECO and other wholesale customers by:

•: scheduling and dispatching our generation units and capacity under contract using purchased transmission rights to deliver power;
•: entering into bilateral contracts for capacity, energy and other services; and
•: trading in the regional spot markets to reduce supply expenses and maximize our portfolio revenues.

Power Team competes nationally in wholesale power marketing on the basis of price and service offerings, using our generation assets, transmission access, reservations and its knowledge of the interconnected bulk power systems and developing markets to assure customers of energy delivery. Through Power Team, we enter into bilateral arrangements for the purchase, sale and delivery of capacity, energy and ancillary services. Sales agreements are with load-serving entities, including electric utilities, municipalities, electric cooperatives, retail load aggregators and other wholesale market participants. Through Power Team, we also compete in the wholesale spot markets for electricity.

We have agreements with ComEd and PECO to supply their respective load requirements for customers through 2006 and 2010, respectively. Under the agreements with ComEd and PECO, we will supply all of ComEd and PECO's needs to supply customers who do not select an alternative electric generation supplier through the end of the respective transition periods. Therefore, the supply requirements under the agreements will vary depending on how much of the load has selected an alternative supplier.

Power Team also manages the price and supply risks for energy and fuel associated with our generation assets and the risks of our power marketing activities. Through Power Team, we began to use financial and commodity contracts for trading purposes in the second quarter of 2001. The trading activities represent a very limited portion of our overall power marketing activities. For example, the limit on new purchases of electricity for any forward month represents less than 5% of our owned and contracted supply of electricity. The trading portfolio is planned to grow modestly in 2002, subject to stringent risk management limits and policies including volume, stop-loss and value-at-risk limits to manage exposure to market risk. Additionally, we have a financial risk management policy and a corporate risk group to monitor the financial risks of our power marketing activities.

At December 31, 2001, we had long-term commitments, relating to the purchase and sale of energy, capacity and transmission rights from unaffiliated utilities and others, including the Midwest Generation and AmerGen contracts, as expressed in the following table:

(in millions)	Capacity Purchases		Power Only Purchases		Power-Only Sales		Transmission Rights Purchases
2002	$	1,005	$	551	$	1,803	$	139
2003		1,214		345		666		11
2004		1,222		346		219		15
2005		406		264		139		15
2006		406		250		58		5
Thereafter		3,657		2,321		22		—

Total	$	7,910	$	4,077	$	2,907	$	205

In addition, in connection with the acquisition of the TXU generating stations, expected to close in the second quarter of 2002, we have agreed to supply TXU with 100% of the station output during the months of May through September from 2002 through 2006. During the periods covered by the power purchase agreement, TXU will make fixed capacity payments and will provide fuel to us in return for exclusive rights to the energy and capacity of the generation plants.

Energy Markets

In the United States, there are four established, real-time power markets, which are administered by independent system operators: Pennsylvania, New Jersey, Maryland, LLC ("PJM"), which is in the Mid-Atlantic Area Council ("MAAC") region; New England and New York, which are both in the Northeast Power Coordinating Council ("NPCC") region, and California, which is in the Western Systems Coordinating Council ("WSCC") region. In each of these areas, power is traded through bilateral agreements between buyers and sellers and on the spot markets operated by independent system operators. In areas where there is no spot-market, electricity is purchased and sold solely through bilateral agreements. The facilities that were transferred to us by PECO, as well as two of AmerGen's facilities, are located in the PJM market. To the extent that these facilities have capacity available after our obligations to customers, including PECO and ComEd, have been met, Power Team sells into the PJM market, as well as under bilateral agreements inside and outside of the market. The facilities that were transferred to us by ComEd, the facilities that supply electricity to us under our agreements with Midwest Generation and AmerGen's Clinton facility are located in the Mid-America Interconnected Network region ("MAIN"), where there is no independently operated regional spot market. To the extent that these facilities have capacity available after our obligations to our customers, including ComEd, have been met, Power Team sells electricity in the wholesale markets. Sithe sells into the New England Power Pool ("NEPOOL") and, to a lesser degree, the New York market.

In addition to selling energy in PJM, New England and New York markets, generators can sell other energy-related products. These products differ from market to market and include, among others, regulation (and/or automatic generation control), unbundled capacity, and operating reserves.

PJM. The PJM market covers all or part of the states of Pennsylvania, New Jersey, Maryland, Delaware, Virginia, and the District of Columbia. PJM, one of the largest centrally dispatched power pools in the world, handles about 8% of United States electricity. The PJM market is expected to grow at an annual rate of 1.4% through 2020. PJM requires load-serving entities, such as PECO, to own or contract for capacity to cover their peak demand and reserve margins required by PJM, currently, 18%.

MAIN. The Mid-American Interconnected Network region includes Illinois and parts of Missouri, Wisconsin and Michigan. MAIN has a policy, but not a requirement, that companies maintain a reserve of at least 17% to 20% of their capacity for long-term planning. MAIN currently has a wholesale market consisting largely of informal arrangements, with most electricity sold through bilateral agreements, not a power exchange, but is rapidly progressing toward the formation of an independent system operator that will manage regional transmission assets and establish spot-market trading centers.

NEW ENGLAND. The New England market is one of the two established markets in the Northeast Power Coordinating Council and covers the six New England states. Peak demand in the New England market is forecasted to grow at an annual rate of 1.47% through 2020. The New England market structure includes markets for energy, automatic generation control, ten-minute spinning reserve, ten-minute non-spinning reserve and thirty-minute operating reserve.

NEW YORK. The New York market, also located in the NPCC region, covers the State of New York. Peak demand in the New York market is forecasted to grow at an annual rate of 0.8% through 2020. The New York market structure includes markets for installed capacity, day-ahead and real-time energy, day-ahead and real-time ancillary services, including reserves and regulation and installed capacity.

OTHER REGIONS. We also have long-term contracts for the purchase of energy in the Electric Reliability Council of Texas region (1,060 MW); the Southeastern Electric Reliability Council region (1,000 MW) and the Southwest Power Pool region (800 MW). None of these regions has an established spot market, although Texas has a balancing market.

Regulation

Federal Regulation of Nuclear Power Generation and Security

We are subject to the jurisdiction of the NRC with respect to our nuclear generation stations. The Atomic Energy Act empowers the NRC to issue, modify, suspend and revoke licenses for the construction and operation of nuclear generation stations and impose civil penalties for failure to comply with the Act, the regulations under it or the terms of those licenses. The NRC subjects nuclear generation stations to continuing review and regulation covering, among other things, operations, maintenance, emergency planning, security, environmental and radiological aspects of those stations. The NRC also adopts regulations regarding decommissioning of nuclear facilities and insurance requirements for nuclear accidents, including a regulation requiring that, within 30 days of stabilizing a reactor, a licensee must submit a report to the NRC that provides a clean-up plan, identifying all clean-up operations necessary to decontaminate the reactor, to permit either the resumption of operation or decommissioning of the facility.

The NRC has revamped its inspection, assessment and enforcement programs for commercial nuclear power plants. The new oversight process uses more objective, timely and safety-significant criteria in assessing performance, while seeking to more effectively and efficiently regulate the industry. It also takes into account improvements in the performance of the nuclear industry over the past

twenty years. Nuclear plant performance is measured by a combination of objective performance indicators and by the NRC inspection program. These are closely focused on those plant activities having the greatest impact on safety and overall risk. In addition, the NRC conducts periodic reviews of the effectiveness of each operator's programs to identify and correct problems. The inspection program is designed to verify the accuracy of performance indicator information and to assess performance based on safety cornerstones that include:

•: initiating events;
•: mitigating systems;
•: integrity of barriers to release of radioactivity;
•: emergency preparedness;
•: occupational radiation safety;
•: public radiation safety; and
•: physical protection.

The NRC evaluates licensee performance by analyzing two distinct inputs: inspection findings resulting from the NRC inspection program and performance indicators reported by the licensees on a quarterly basis. These inputs are typically color-coded. A "green" coding indicates performance within an expected performance level in which the related safety cornerstone objectives are met. A "white" coding indicates performance outside an expected range of nominal utility performance but related cornerstone objectives are still being met. A "yellow" coding indicates related cornerstone objectives are being met, but with a minimal reduction in safety margin. A "red" coding indicates a significant reduction in safety margin in the area measured by the performance indicator. The overall plant assessment by the NRC is based on a combination of the performance indicators and the NRC's inspection findings. Where all inputs are "green," the plant typically requires only routine oversight by the NRC. Where no more than two "white" findings are found in different cornerstones and cornerstone objectives are fully met, the NRC generally permits licensees to implement corrective actions to remedy the findings. Plants that do not meet the "safety cornerstone" objectives, measured by performance indicator and inspection findings, may receive increased inspection, focusing on areas of declining performance. There are also inspections beyond the baseline program, even at plants performing well, if there are operational problems or events the NRC believes require greater scrutiny. Generic problems, affecting some or all plants, may also require additional inspections.

NRC reactor oversight process results for the fourth quarter of 2001 for us and AmerGen indicate predominantly "green" inspection findings associated with the seven safety cornerstones as well as performance indicators. There were no "red" or "yellow" inspection findings or performance indicators at any of our plants. Eight units (Braidwood Unit 2, Byron Units 1 & 2, LaSalle Unit 1, Quad Cities Units 1 and 2, as well as Salem Units 1 and 2) all had "green" inputs (both performance indicators and inspection findings).

Of the remaining plants, six units (Clinton, Limerick Unit 1, Oyster Creek, Peach Bottom Units 2 and 3, and Three Mile Island) had one "white" finding each, while Limerick Unit 2 had two "white" findings in different cornerstones. Two units (Braidwood Unit 1 and LaSalle Unit 2) each had one "white" performance indicator.

Accordingly, all of our plants performed at levels satisfactory enough to receive routine NRC oversight with the opportunity to implement corrective actions to address any "white" findings.

With respect to nuclear power plant security issues, in response to the events of September 11, 2001, the NRC issued Safeguards and Threat Advisories to all nuclear power plant licensees, including us, requesting that they place their facilities on highest alert security status. In response to the NRC

Advisories and on our own initiative, we also implemented enhanced security measures, such as increased guard forces, the erection of additional physical barriers, and heightened communication with authorities at all levels of government. In addition to the Advisories, the NRC began an initiative to perform a "top to bottom" review of our safeguards and security programs and requirements in light of the events of September 11.

On February 25, 2002, the NRC issued immediately effective orders modifying the operating licenses for all nuclear power plants to require all licensees, including us, to implement certain interim security enhancements. In issuing the orders, the NRC found that these compensatory measures should be implemented "as prudent, interim measures, to address the generalized high-level threat environment.…" The orders direct all licensees to provide the NRC a schedule for achieving compliance with the requirements of the orders or explain site-specific circumstances to justify relief or variation from those requirements. In addition, if implementation of any requirement would adversely affect safe operation of a facility, a licensee may either propose an alternate plan for achieving the objectives of the order or provide the NRC a schedule for modifying the facility to address the adverse safety condition(s). All enhancements required by the orders are to be implemented by August 31, 2002. The orders are to remain in effect pending an NRC decision that changes in the threat environment justify a relaxation of the requirements or until the NRC determines that other changes are necessary following a re-evaluation of current security programs. The security requirements imposed by the NRC's orders issued to us will involve increased capital expenditures, at each of our nuclear stations, for such things as enhanced vehicle barriers, modifications to plant facilities and increased size of guard forces. We currently estimate the increased costs to be approximately $1 million per station.

Nuclear Waste Disposal

There are no facilities for the reprocessing or permanent disposal of spent nuclear fuel ("SNF") currently in operation in the United States, nor has the NRC licensed any such facilities. We currently store all SNF generated by our nuclear generation facilities in on-site storage pools and, in the case of Peach Bottom and Dresden, some SNF has been placed in dry cask storage facilities. Our SNF storage pools do not have sufficient storage capacity for the life of the plant and we are developing dry cask storage facilities, as necessary, to support operations.

As of December 31, 2001, we had 37,300 SNF assemblies (9,200 tons) stored on site in SNF pools and dry cask storage. On site dry cask storage in concert with existing spent fuel storage is capable of

meeting all spent fuel storage requirements at our sites. The following table describes the current status of our SNF storage facilities:

Spent Nuclear Fuel Pool Capacity

Site		Date for Loss of Full Core Discharge
Dresden		Dry cask storage in operation
Quad Cities		2006
Byron		2011
LaSalle		2012
Braidwood		2013
Clinton		2006 (Plans to re-rack to increase SNF pool capacity)
Peach Bottom		Dry cask storage in operation
Limerick		2009
Oyster Creek		2000 (Dry cask storage project underway)(1)
TMI		Life of plant storage capable in SNF pool
Salem		2011

(1): Oyster Creek lost the ability to fully discharge the reactor's complement of fuel into the spent fuel pool in 2000. AmerGen is currently constructing a dry cask storage facility at the site and expects to move some spent fuel into dry storage in the late spring of 2002, after which AmerGen will regain full core discharge capability. AmerGen will lose fuel core discharge capability again after refueling in the Fall, to be restored again in 2003 upon completion of the next dry-cask storage campaign.

Under the Nuclear Waste Policy Act of 1982 (the "NWPA"), the United States Department of Energy (the "DOE") is responsible for the disposal of SNF and other high-level radioactive waste. ComEd and PECO each signed contracts with the DOE (each, a "Standard Contract") to provide for disposal of SNF from their respective nuclear generation stations. We assumed ComEd and PECO Standard Contracts as part of the restructuring, covering Byron, Braidwood, LaSalle, Quad Cities, Zion, Dresden, Limerick and Peach Bottom; AmerGen assumed the standard contracts for Clinton, Oyster Creek and TMI-1. In accordance with the NWPA and the Standard Contract, we pay the DOE one mill ($.001) per kilowatt-hour of net nuclear generation, net of station use, for the cost of nuclear fuel long-term storage and disposal. This fee may be adjusted in order to ensure full cost recovery by the DOE.

The Standard Contract required ComEd and PECO to pay the DOE a one-time fee applicable to nuclear generation through April 6, 1983. PECO has paid this fee while ComEd exercised its option to pay the one-time fee of $277 million, with interest, just prior to the first delivery of SNF to the DOE. As of December 31, 2001, the unfunded liability for the one-time fee with interest was $843 million. We assumed this obligation in the restructuring.

The NWPA and the Standard Contract required the DOE to begin taking possession of SNF generated by nuclear generating units by no later than January 1998. The DOE, however, failed to meet that deadline and its performance is expected to be delayed significantly. The DOE's current estimate for opening an SNF permanent disposal facility is 2010. This extended delay in SNF acceptance by the DOE has led to the use of dry storage at the Dresden and Peach Bottom Units and consideration of dry storage at other units.

In July 1998, ComEd filed a complaint against the DOE in the U.S. Court of Federal Claims seeking to recover damages caused by the DOE's failure to honor its contractual obligation to begin disposing of SNF in January 1998. ComEd subsequently moved for partial summary judgment on liability for breach of contract claim. In August 2001, the Court granted ComEd's motion for partial

summary judgment for liability on ComEd's breach of contract claim. In November 2001, the DOE filed two partial summary judgment motions relating to certain damage issues in the case, as well as two motions to dismiss claims other than ComEd's breach of contract claim. The Court has deferred briefing on those motions pending completion of discovery on certain damage issues. We assumed this litigation in the restructuring.

In July 2000, PECO entered into an agreement with the DOE relating to Peach Bottom to address the DOE's failure to begin removal of SNF in January 1998, as required by the Standard Contract. Under that agreement, the DOE agreed to provide PECO (now us) with credits against PECO's future contributions to the nuclear waste fund over the next ten years to compensate for SNF storage costs incurred as a result of the DOE's breach of the Standard Contract. The agreement also provides that, upon PECO's request, the DOE will take title to the SNF and the interim storage facility at Peach Bottom, provided certain conditions are met. We have assumed this contract.

In November 2000, eight utilities with nuclear power plants filed a Joint Petition for Review against the DOE with the U.S. Court of Appeals for the Eleventh Circuit seeking to invalidate the portion of the agreement providing for credits to PECO against nuclear waste fund payments on the ground that such provision is a violation of the NWPA. PECO intervened as a defendant in that case, which is ongoing. On December 5, 2001, the United States Court of Appeals for the Eleventh Circuit held oral argument on the utilities' Joint Petition for Review. In April, 2001, an individual filed suit against the DOE with the United States District Court for the Middle District of Pennsylvania seeking to invalidate the agreement on the grounds that the DOE has violated the National Environmental Policy Act and the Administrative Procedure Act. PECO intervened as a defendant and moved to dismiss the complaint. The Court has not yet ruled on the motion to dismiss.

As a by-product of their operations, nuclear generation units produce low-level radioactive waste ("LLRW"). LLRW is accumulated at each generation station and permanently disposed of at Federally licensed disposal facilities. The Federal Low-Level Radioactive Waste Policy Act of 1980 (the "Waste Policy Act") 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. Illinois and Kentucky have entered into an agreement, although neither state currently has an operational site, and none is currently expected to be operational until after 2011. Pennsylvania, which had agreed to be the host site for LLRW disposal facilities for generators located in Pennsylvania, Delaware, Maryland and West Virginia, has suspended the search for a permanent disposal site.

We have temporary on-site storage capacity at our nuclear generation stations for limited amounts of LLRW and have been shipping such waste to LLRW disposal facilities in South Carolina and Utah. The number of LLRW disposal facilities is decreasing, and we anticipate the possibility of continuing difficulties in disposing of LLRW. We are also pursuing alternative disposal strategies for LLRW, including a LLRW reduction program to minimize cost impacts.

The Energy Policy Act of 1992 requires that the owners of nuclear reactors pay for the decommissioning and decontamination of the DOE uranium enrichment facilities. The total cost to all domestic utilities covered by this requirement is estimated to be $150 million per year through 2006, of which our share is approximately $22 million per year.

Nuclear Facility Decommissioning

NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available in certain minimum amounts at the end of the life of the facility to decommission the facility. Based on estimates of decommissioning costs for each of the nuclear facilities in which we have an ownership interest, the ICC permits ComEd and the PUC permits PECO to collect from its customers and deposit in segregated accounts amounts which, together with earnings thereon, will be used to decommission such nuclear facilities. As of December 31, 2001, our estimate of

our nuclear facilities' decommissioning cost is $7.2 billion in current year dollars. These expenditures are expected to occur primarily after the plants are retired and are currently estimated to begin in 2029 for plants currently in operation. Decommissioning costs are recoverable by ComEd and PECO through regulated rates and are remitted to us for deposit in the decommissioning trust funds. In 2001, ComEd and PECO collected from customers and remitted to us approximately $102 million in decommissioning costs. At December 31, 2001, the decommissioning liability recorded in accumulated depreciation and deferred credits and other liabilities was $2.7 billion and $1.3 billion, respectively. We believe that the amounts being remitted to us by ComEd and PECO and the earnings on nuclear decommissioning trust funds will be sufficient to fully fund our decommissioning obligations.

In connection with the transfer of ComEd's nuclear generating stations to us, ComEd asked the ICC to approve the continued recovery of decommissioning costs after the transfer. On December 20, 2000, the ICC issued an order finding that the ICC has the legal authority to permit ComEd to continue to recover decommissioning costs from customers for the six-year term of the power purchase agreements between ComEd and us. Under the ICC order, ComEd is permitted to recover $73 million per year from customers for decommissioning for the years 2001 through 2004. In 2005 and 2006, ComEd can recover up to $73 million annually, depending upon the portion of the output of the former ComEd nuclear stations that ComEd purchases from us. Under the ICC order, subsequent to 2006, there will be no further recoveries of decommissioning costs from customers. The ICC order also provides that any surplus funds after the nuclear stations are decommissioned must be refunded to customers. The ICC order is currently pending on appeal in the Illinois Appellate Court.

Zion, a two-unit nuclear generation station, and Dresden Unit 1 formerly owned by ComEd, have permanently ceased power generation. ComEd transferred Zion and Dresden Unit 1 as well as their related decommissioning liabilities and trust funds to us as part of Exelon's corporate restructuring. Zion's and Dresden Unit 1's spent nuclear fuel is currently being stored in on-site storage pools until a permanent repository under the NWPA is completed. We have recorded a liability of $1.3 billion, which represents the estimated cost of decommissioning Zion and Dresden Unit 1 in current year dollars. Decommissioning expenditures are expected to occur primarily after 2013 and 2030 for Zion and Dresden Unit 1, respectively.

Environmental Regulation

General. Specific operations of ours are subject to regulation regarding environmental matters by the United States and by various states and local jurisdictions where we operate our facilities. The Illinois Pollution Control Board ("IPCB") has jurisdiction over environmental control in the state of Illinois, together with the Illinois Environmental Protection Agency, which enforces regulations of the IPCB and issues permits in connection with environmental control. The Pennsylvania Department of Environmental Protection ("PDEP") has jurisdiction over environmental control in the Commonwealth of Pennsylvania. State regulation includes the authority to regulate air, water and noise emissions and solid waste disposals. The United States Environmental Protection Agency ("EPA") administers certain Federal statutes relating to such matters as do various interstate and local agencies.

When the generation assets of PECO and ComEd were transferred to us, we agreed to assume environmental liabilities arising out of any violation of environmental laws, environmental permits or environmental claims related to any real property or asset transferred to us and to indemnify PECO and ComEd, their permitted assigns and their respective officers, directors, stockholders and employees against all fines or penalties, liabilities, damages and losses related to environmental claims. PECO and ComEd transferred to us all indemnities, hold harmless agreements and funds, reserves, escrows and other repositories of funds related to environmental obligations associated with the units we acquired and kept all liabilities for all substantial transmission and distribution facilities.

Water. Under the Federal Clean Water Act, National Pollutant Discharge Elimination System ("NPDES") permits for discharges into waterways are required to be obtained from the EPA or from the state environmental agency to which the permit program has been delegated. Those permits must be renewed periodically. We either have NPDES permits for all of our generation stations or have pending applications for such permits. We are also subject to the jurisdiction of certain other state agencies, including the Delaware River Basin Commission and the Susquehanna River Basin Commission.

Solid and Hazardous Waste. The Comprehensive Environmental Response; Compensation, and Liability Act of 1980, as amended ("CERCLA"), provides for immediate response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances into the environment and authorizes the U.S. Government either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under CERCLA, generators and transporters of hazardous substances, as well as past and present owners and operators of hazardous waste sites, are strictly, jointly and severally liable for the cleanup costs of waste at sites, most of which are listed by the EPA on the National Priorities List ("NPL"). These potentially responsible parties ("PRPs") can be ordered to perform a cleanup, can be sued for costs associated with an EPA-directed cleanup, may voluntarily settle with the U.S. Government concerning their liability for cleanup costs, or may voluntarily begin a site investigation and site remediation under state oversight prior to listing on the NPL. Various states, including Pennsylvania and Illinois, have enacted statutes that contain provisions substantially similar to CERCLA. In addition, the Resource Conservation and Recovery Act ("RCRA") governs treatment, storage and disposal of solid and hazardous wastes and cleanup of sites where such activities were conducted.

By notice issued in November 1986, the EPA notified over 800 entities, including PECO and ComEd, that they may be PRPs under CERCLA with respect to releases of radioactive and/or toxic substances from the Maxey Flats disposal site, a LLRW disposal site near Moorehead, Kentucky, where PECO and ComEd wastes were deposited. A settlement was reached among the Federal and private PRPs including ComEd and PECO, the Commonwealth of Kentucky and the EPA concerning their respective roles and responsibilities in conducting remedial activities at the site. Under the settlement, the private PRPs agreed to perform the initial remedial work at the site and the Commonwealth of Kentucky agreed to assume responsibility for long-range maintenance and final remediation of the site. On April 18, 1996, a consent decree, which included the terms of the settlement, was entered by the United States District Court for the Eastern District of Kentucky. The PRPs have entered into a contract for the design and implementation of the remedial plan and work has commenced. As a result of the restructuring of Exelon, we have agreed to assume ComEd's and PECO's liability and obligations arising from the Maxey Flats site. We estimate that our share of remediation costs will not be material.

Air. Air quality regulations promulgated by the EPA, the PDEP and the City of Philadelphia in accordance with the Federal Clean Air Act and the Clean Air Act Amendments of 1990 (the "Amendments") impose restrictions on emission of particulates, sulfur dioxide (SO ₂ ), nitrogen oxides (NO _X ) and other pollutants and require permits for operation of emission sources. We have obtained such permits and they must be renewed periodically.

The Amendments establish a comprehensive and complex national program to substantially reduce air pollution. The Amendments include a two-phase program to reduce acid rain effects by significantly reducing emissions of SO ₂ and NO _X from electric power plants. Flue-gas desulfurization systems (scrubbers) have been installed at all of our coal-fired units other than the Keystone Station. Keystone is subject to, and in compliance with, the Phase II SO ₂ and NO _X limits of the Amendments, which became effective January 1, 2000. We and the other Keystone co-owners are purchasing SO ₂ emission allowances to comply with the Phase II limits.

We have completed implementation of measures, including the installation of NO _X emissions controls and the imposition of certain operational constraints, to comply with the Reasonably Available Control Technology Limitations of the Amendments. We expect that the cost of compliance with anticipated air-quality regulations may be substantial due to further limitations on permitted NO _X emissions:

The EPA has issued two regulations to limit NO _X emissions from power plants in the eastern United States to address the "ozone transport" issue. The first regulation was issued on September 24, 1998. The original NO _X regulation covered power plants in the 22 eastern states and had an effective date of May 1, 2003. As a result of litigation at the D.C. Circuit Court of Appeals, the original NO _X regulation was revised to cover 19 eastern states (rather than the original 22) and the effective date was delayed by approximately one year to May 31, 2004. In most other respects, the original NO _X regulation was substantively upheld by the Court. Both Pennsylvania and Illinois power plants are covered by the original NO _X regulation.

The second EPA regulation, referred to as the "Section 126 Petition Regulation" was issued on May 25, 1999. This regulation was issued by the EPA in response to downwind state (Connecticut, Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, Vermont) complaints under Section 126 of the Clean Air Act that upwind state NO _X emissions were negatively impacting downwind states' ability to attain the Federal ozone standard. The Section 126 Petition Regulation requires substantively the same NO _X reduction requirement for the power generation sector as the original NO _X regulation. However, the Section 126 Petition Regulation covers fewer states (Delaware, Indiana, Kentucky, Maryland, Michigan, North Carolina, New Jersey, New York, Ohio, Virginia and West Virginia). It does not cover power plants in Illinois. The compliance date of the Section 126 Petition Regulation, originally set for May 1, 2003, was tolled by the D.C. Circuit Court of Appeals pending resolution of several issues. Despite this delay, the northeast states covered by the Section 126 Petition Regulation are still expected to comply with the original May 1, 2003 compliance date.

On September 23, 2000, Pennsylvania issued final state NO _X reduction regulations for power plants to satisfy both the original NO _X regulation and the Section 126 Petition Regulation. The Pennsylvania regulation is effective May 1, 2003. Exelon is currently evaluating options to comply with the new Pennsylvania regulations. These options include limiting the operation of our fossil-fired units, purchasing NO(x) emission allowances from the allowance market, installing additional control equipment or a combination of these alternatives. For Keystone, the co-owners have approved and started preliminary work for the installation of selective catalytic reduction units to comply with the new regulations.

Many other provisions of the Amendments affect our business activities. The Amendments establish stringent control measures for geographical regions which have been determined by the EPA to not meet National Ambient Air Quality Standards; establish limits on the purchase and operation of motor vehicles and require increased use of alternative fuels, establish stringent controls on emissions of toxic air pollutants and provide for possible future designation of some utility emissions as toxic; establish new permit and monitoring requirements for sources of air emissions, and provide for significantly increased enforcement power, and civil and criminal penalties.

Federal Power Act

The Federal Power Act gives FERC exclusive rate-making jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce. Pursuant to the Federal Power Act, all public utilities subject to FERC's jurisdiction are required to file rate schedules with FERC with respect to wholesale sales or transmission of electricity. Tariffs established under FERC regulation give us access to transmission lines that enable us to participate in competitive wholesale markets.

Because we sell power in the wholesale markets, we are deemed to be a public utility for purposes of the Federal Power Act and are required to obtain FERC's acceptance of our rate schedules for wholesale sales of electricity. We have received authorization from FERC to sell energy at market-based rates. As is customary with market-based rate schedules, FERC reserved the right to suspend market-based rate authority on a retroactive basis if it is subsequently determined that we or any of our affiliates exercised or have the ability to exercise market power. FERC is also authorized to order refunds if it finds that market-based rates are unreasonable.

In April 1996, FERC issued Order 888. The intent of Order 888 was to open the transmission grid subject to FERC's jurisdiction to eligible customers, including sellers of power and retail customers, in states where retail access is approved. Order 888 requires that owners of transmission facilities provide access to their transmission facilities under filed tariffs at cost-based rates. In connection with Order 888, FERC issued Order 889. Under Order 889, PECO and ComEd were required to file Standards of Conduct, which governed the communication of non-public information between transmission personnel and employees of any affiliated wholesale merchant function. FERC recently issued a Notice of Proposed Rulemaking for the Standards of Conduct for Transmission Providers. Among other things, FERC is considering whether it would be appropriate for it to adopt measures that would limit the amount of capacity an affiliate can hold in a transmission provider and revising the policy of interruption of transportation. Our business would be impacted if any of these measures is instituted.

In December 1999, FERC issued Order 2000 which encourages the voluntary restructuring of transmission operations through the use of independent system operators ("ISOs") and regional transmission organizations ("RTOs"). The establishment of these entities is intended to eliminate or reduce transmission charges imposed by successive transmission systems when wholesale generators cross several transmission systems to deliver capacity. Under Order 2000, each transmission-owning public utility was required to file a plan to form an RTO, with December 2001 as the target date for operation. In July 2001, FERC conditionally granted RTO status to PJM and, in separate orders, directed that the various proposed RTOs combine into four regional RTOs. However, inconsistencies in the pace of RTO development and significant state public utility commission concerns caused FERC to indefinitely extend its operational target date of December 2001.

The latter half of 2001 and early 2002 have brought further change to the electric industry. In early November 2001, FERC announced its intent to complete RTO development using two parallel tracks: (1) address geographic scope and governance of RTOs; and (2) address transmission pricing and market design. Contemporaneously, FERC initiated several immediate steps to move the RTO development process forward. One of these actions was initiation of an effort to standardize generator interconnection (a related effort concerning cost allocation is to be addressed in 2002). Also, FERC issued a Notice of Proposed Ruling on Revised Public Utility Filing Requirements, pursuant to which it is considering mandatory electronic filing of transactional data and additional public filing requirements.

FERC announced in late November 2001 a new market power test, the Supply Margin Assessment (SMA) screen. Under the SMA, if within a particular geographic market an energy company's generation capacity exceeds the market's surplus capacity above peak demand then the test is failed. If this occurs, FERC will impose on the company and its affiliates a requirement to offer uncommitted capacity under a cost-based rate structure. The only exemption will be for companies operating under the authority of an ISO or RTO with a FERC-approved market monitoring and mitigation plan. Under this approach, it would be unlikely that a vertically integrated energy company serving franchised retail load would be able to pass the test and maintain market-based rates, unless and until the company was a member of an approved ISO or RTO.

FERC also continues to exhibit a commitment to increased market monitoring with an intent to ensure that significant price volatility, such as was seen in California, does not occur again. As part of

this commitment, FERC announced early in 2002 the formation of the Office of Market Oversight and Investigation which will report directly to the FERC Chairman. This new office will assess, among other things, market performance. It is unclear how our business may be affected by these initiatives.

In 2001, FERC approved the Midwest ISO (MISO) as an RTO, which principally resides within the MAPP reliability region, as an RTO. At the same time, FERC rejected the stand alone, for-profit RTO structure proposed by the Alliance Companies. FERC, however, indicated that a for-profit transmission company could be formed and successfully integrated into the MISO. Currently, approximately 25% of our generation is located within the proposed PJM RTO area, other significant generation is located in the MAIN reliability region, where an approved ISO or RTO does not exist. It is possible that under its evolving market power tests, FERC may determine that we have market power in this area. If FERC were to suspend our market-based rate authority, it would most likely be necessary to file to obtain FERC acceptance of cost-based rate schedules or schedules tied to a public index. In addition, the loss of market-based rate authority would subject us to the accounting, record-keeping and reporting requirements that are imposed on public utilities with cost-based rate schedules.

Public Utility Holding Company Act

We are subject to regulation under the Public Utility Holding Company Act as a registered public utility holding company and as a wholly owned subsidiary of Exelon, which is also a registered public utility holding company. The restrictions under PUHCA generally involve financing, investments and affiliate transactions. Under PUHCA, we cannot issue debt or equity securities or guaranties without the approval of the SEC. Exelon and its subsidiaries currently have approval to issue up to an aggregate of $4 billion of common stock, preferred securities, long- and short-term debt, and to issue up to $4.5 billion of guarantees. Exelon also requested, and the SEC reserved jurisdiction over, an additional $4 billion in financing authorization. Under PUHCA, generally, we can invest only in traditional electric and gas utility businesses and related businesses. Our investments in exempt wholesale generators and foreign utility companies are limited to $4 billion in the aggregate. The acquisition of the voting stock of other gas or electric utilities is subject to prior SEC approval. In addition, PUHCA requires that all of a registered holding company's utility subsidiaries constitute a single system that can be operated in an efficient, coordinated manner. PUHCA also imposes restrictions on transactions among affiliates.

Insurance

The Price-Anderson Act limits the liability of nuclear reactor owners to $9.5 billion for claims arising from a single incident. The current limit is subject to change to account for the effects of inflation and changes in the number of licensed reactors. We carry the maximum available commercial insurance of $200 million and the remaining $9.3 billion is provided through mandatory participation in a financial protection pool. Under the Price-Anderson Act, all nuclear reactor licensees can be assessed up to $89 million per reactor per incident, payable at a rate of no more than $10 million per reactor per incident per year. This assessment is subject to inflation and state premium taxes. In addition, the U.S. Congress could impose revenue raising measures on the nuclear industry to pay claims. The Price-Anderson Act is scheduled to expire in August 2002. Although replacement legislation has been proposed from time to time, we are unable to predict whether replacement legislation will be enacted. The Price-Anderson Act and the extensive regulation of nuclear plants by the NRC do not preclude claims under state law for personal, property or punitive damages related to radiation hazards.

Liability of owners of nuclear power plants currently licensed by the NRC to operate would continue to be limited by the Price-Anderson Act provisions regardless of whether Congress renews the Price-Anderson Act. The renewal of Price-Anderson, however, would be important for any new plants to be licensed in the future. Although several bills proposing the renewal of the Price-Anderson Act are

currently pending in the United States Congress, Generation is unable to predict at this time whether renewal will occur before August 1, 2002.

We maintain property insurance for each nuclear power plant in which we have an ownership interest. We are responsible for our proportionate share of premiums for such insurance based on our ownership interest. Our insurance policies provide coverage for decontamination liability expense, premature decommissioning and loss or damage to nuclear facilities. These policies require that insurance proceeds first be applied to assure that, following an accident, the facility is in a safe and stable condition and can be maintained in such condition. Under our insurance policies, proceeds not already expended to place the reactor in a stable condition must be used to decontaminate the facility. If, as a result of an incident, the decision is made to decommission the facility, a portion of the insurance proceeds will be allocated to a decommissioning fund that we, or AmerGen, as the case may be, are required to maintain by the NRC. (See "Nuclear Facility Decommissioning.") These proceeds would be paid to the fund to make up any difference between the amount of money in the fund at the time of the early decommissioning and the amount that would have been in the fund if contributions had been made over the normal life of the facility. We are unable to predict what effect these requirements may have on the timing of the availability of insurance proceeds to creditors and the amount of these proceeds. Under the terms of the various insurance agreements, we could be assessed up to $121 million for losses incurred at any plant insured by the insurance companies.

Nuclear Electric Institute Limited (NEIL), a mutual insurance company to which Generation belongs, provides property and business interruption insurance for Generation's nuclear operations. One feature of our property insurance through NEIL is coverage for damages caused by acts of terrorism at any of our nuclear generating station. This terrorism endorsement to the NEIL policy specifies that its coverage applies to acts of terrorism similar to the September 11, 2001 events. In the event that one or more acts of terrorism cause accidental property damage within a 12-month period from the first accidental property damage under one or more policies for all insureds, the maximum recovery for all losses by all insureds will be an aggregate of $3.2 billion plus such additional amounts as the insurer may recover for all such losses from reinsurance, indemnity or any other source applicable to such losses. If total property losses exceed available funds under the policy, proportionate recovery is provided to cover a portion of an insured's property losses. The percentage recovery would be equal to the ratio of the insured's property losses and the total of all property losses.

Our insurance through NEIL also provides replacement power cost insurance in the event of a major accidental outage at a nuclear station. The policy provides for a waiting period before recovery of costs can commence. The premium for this coverage is subject to assessment for adverse loss experience, with a maximum assessment of $46 million per year. Recovery under this insurance for terrorist acts is subject to the $3.2 billion aggregate limit and is secondary to the property insurance described above.

In addition, we participate in the American Nuclear Insurers Master Worker Program, which provides coverage for worker tort claims filed for bodily injury caused by a nuclear energy accident. This program was modified, effective January 1, 1998, to provide coverage to all workers whose nuclear-related employment began on or after the commencement date of reactor operations. We will not be liable for a retroactive assessment under this new policy. However, in the event losses incurred under the small number of policies in the old program exceed accumulated reserves, a maximum retroactive assessment of up to $50 million could apply.

We do not carry business interruption insurance other than the NEIL coverage for nuclear operations. We are self-insured to the extent that any losses may exceed the amount of insurance maintained. Such losses could have a material adverse effect on our financial conditions and results of operations.

Employees

We currently have approximately 7,200 employees. Of those employees, 2,000 are subject to collective bargaining agreements with Local 15 of the International Brotherhood of Electrical Workers ("IBEW"). On April 20, 2001, Exelon and Local 15 officials signed an agreement for a new three-year collective bargaining agreement, effective April 1, 2001 through March 31, 2004. The new agreement covers our 2,000 employees. An agreement to extend the date of the contract was ratified by the union on December 31, 2001. For us, the new agreement extends the collective bargaining agreement through September 30, 2005.

Litigation

We are involved in a number of judicial and regulatory proceedings (including the ones described below) concerning matters arising out of the conduct of our business. We believe, based on currently available information, that the ultimate outcome of any proceedings known to us at this time will not have a material adverse effect on our financial condition or results of operations.

Cotter Corporation. During 1989 and 1991, actions were brought in Federal and state courts in Colorado against ComEd and its subsidiary, Cotter Corporation ("Cotter"), seeking unspecified damages and injunctive relief based on allegations that Cotter permitted radioactive and other hazardous material to be released from its mill into areas owned or occupied by the plaintiffs, resulting in property damage and potential adverse health effects. In 1994, a Federal jury returned nominal dollar verdicts against Cotter on eight plaintiffs' claims in the 1989 cases, which verdicts were upheld on appeal. The remaining claims in the 1989 actions were settled or dismissed. In 1998, a jury verdict was rendered against Cotter in favor of 14 of the plaintiffs in the 1991 cases, totaling approximately $6 million in compensatory and punitive damages, interest and medical monitoring. On appeal, the Tenth Circuit Court of Appeals reversed the jury verdict, and remanded the case for new trial. These plaintiffs' cases were consolidated with the remaining 26 plaintiffs' cases, which had not been tried. The consolidated trial was completed on June 28, 2001. The jury returned a verdict against Cotter and awarded $16.3 million in various damages. On November 20, 2001, the District Court entered an amended final judgment which included an award of both pre-judgment and post-judgment interests, costs, and medical monitoring expenses which total $43.3 million. This matter is being appealed by Cotter in the Tenth Circuit Court of Appeals. Cotter will vigorously contest the award.

In November 2000, another trial involving a separate sub-group of 13 plaintiffs, seeking $19 million in damages plus interest was completed in federal district court in Denver. The jury awarded nominal damages of $42,500 to 11 of 13 plaintiffs, but awarded no damages for any personal injury or health claims, other than requiring Cotter to perform periodic medical monitoring at minimal cost. The plaintiffs appealed the verdict to the Tenth Circuit Court of Appeals.

On February 18, 2000, ComEd sold Cotter to an unaffiliated third party. As part of the sale, ComEd agreed to indemnify Cotter for any liability incurred by Cotter as a result of these actions, as well as any liability arising in connection with the West Lake Landfill discussed in the next paragraph.

The EPA has advised Cotter that it is potentially liable in connection with radiological contamination at a site known as the West Lake Landfill in Missouri. Cotter is alleged to have disposed of approximately 39,000 tons of soils mixed with 8,700 tons of leached barium sulfate at the site. Cotter, along with three other companies identified by the EPA as PRPs, is reviewing a draft feasibility study that recommends capping the site. The PRPs are also engaged in discussions with the State of Missouri and the EPA. The estimated costs of remediation for the site are $10 to $15 million. Once a final feasibility study is complete and a remedy selected, it is expected that the PRPs will agree on an allocation of responsibility for the costs. Until an agreement is reached, we cannot predict our share of the costs.

As a result of the restructuring of Exelon, we have agreed to assume the liability and obligation resulting from the Cotter matters.

Pennsylvania Real Estate Tax Appeals. PECO initiated tax appeals regarding two of its nuclear facilities, Limerick Generating Station (Montgomery County) and Peach Bottom Atomic Power Station (York County), and one of its fossil facilities, Eddystone (Delaware County). The potential benefit or obligation resulting from these appeals was transferred to us in connection with the restructuring of Exelon. We are also involved in a tax appeal for TMI (Dauphin County) through AmerGen. We do not believe the outcome of these matters will have a material adverse effect on our results of operations or financial condition.

Enron. We are an unsecured creditor in Enron Corp.'s bankruptcy proceeding. Our claim for power and other products sold to Enron in November and early December 2001 is $8.5 million. Enron may assert that we should not have closed out and terminated all of our forward contracts with Enron. If Enron is successful in this argument, our exposure could be greater than $8.5 million. We may also be subject to exposure due to credit policies of ISO-operated spot markets, such as ISO-New England and PJM, that allocate defaults of market participants to non-defaulting participants. We have established an allowance for uncollectibles for these matters.

Godley Park District. On April 18, 2001, the Godley Park District filed suit in Will County Circuit Court against ComEd and Exelon Corporation alleging that oil spills at Braidwood Station have contaminated the Park District's water supply. The complaint sought actual damages, punitive damages of $100 million and statutory penalties. The court dismissed all counts seeking punitive damages and statutory penalties, and the plaintiff has filed an amended complaint before the court. We are contesting the liability and damages sought by the plaintiff.

MANAGEMENT

Exelon Ventures Company, LLC is our sole member and has control over all matters submitted for member approval and over our management and affairs. Exelon Ventures is wholly owned by Exelon. Currently some of our officers are also officers of Exelon or one of its subsidiaries other than Exelon Generation.

Our executive officers and their ages as of December 31, 2001 are as follows:

Name	Age	Position
Corbin A. McNeill, Jr.	62	Chief Executive Officer and President*
John W. Rowe	56	President and Co-Chief Executive Officer of Exelon**
Oliver D. Kingsley, Jr.	59	President and Chief Nuclear Office, Exelon Nuclear***
Ian P. McLean	52	President, Exelon Power Team
John L. Skolds	51	Chief Operating Officer, Exelon Nuclear****
William H. Bohlke	57	Sr. VP, Nuclear Services, Exelon Nuclear
Christopher M. Crane	43	Sr. VP, MidWest Regional Operating Group, Exelon Nuclear
Christine A. Jacobs	49	Sr. VP, Exelon Generation; President, Exelon Power
David W. Woods	44	Sr. VP, Communications & Public Affairs
John L. Settelen, Jr.	42	VP and Controller

*: Mr. McNeill announced his retirement on February 26, 2002, effective April 23, 2002.
**: Effective upon Mr. McNeill's retirement, Mr. Rowe will become Chairman and Chief Executive Officer of Exelon.
***: On February 27, 2002, Mr. Kingsley was appointed President and Chief Executive Officer on an interim, transitional basis. Effective upon Mr. McNeill's retirement, Mr. Kingsley will become Chief Executive Officer and President of Exelon Generation.
****: On February 27, 2002, Mr. Skolds was appointed President and Chief Nuclear Officer, Exelon Nuclear on an interim, transitional basis. Effective upon Mr. McNeill's retirement, Mr. Skolds will become President and Chief Nuclear Officer, Exelon Nuclear.

Each of the executive officers named above, other than Mr. Kingsley, was elected to such office effective January 1, 2001, the effective date of the restructuring of Exelon. Mr. Kingsley was appointed to his position on March 1, 2002. Each of these executive officers holds such office at the discretion of the managing member of the Company until his or her replacement or earlier resignation, retirement or death. Other positions currently held by the executive officers with Exelon and prior positions held with Exelon, PECO, ComEd or other companies since January 1, 1996, are described below.

Corbin A. McNeill, Jr. Mr. McNeill is also Chairman and Co-Chief Executive Officer of Exelon. Prior to his election to his current position, Mr. McNeill was Chairman of the Board, President and Chief Executive Officer of PECO; President and Chief Executive Officer of PECO; and President and Chief Operating Officer and Executive Vice President—Nuclear of PECO. Mr. McNeill is also a director of Associated Electric and Gas Insurance Services Limited.

John W. Rowe. Mr. Rowe is Co-Chief Executive Officer and President of Exelon and a Director of PECO and ComEd. Prior to his election to his current position, Mr.Rowe was Chairman, President and Chief Executive Officer of ComEd and Unicom Corporation; and President and Chief Executive Officer of New England Electric System. Mr. Rowe is also a director of UnumProvident Corporation.

Oliver D. Kingsley, Jr. Mr. Kingsley is also an Executive Vice President of Exelon. Prior to his election to his current position, Mr. Kingsley was Executive Vice President of ComEd and Unicom

Corporation; President and Chief Nuclear Officer—Nuclear Generation Group of ComEd; and Chief Nuclear Officer of the Tennessee Valley Authority.

Ian P. McLean. Mr. McLean is also a Senior Vice President of Exelon. Prior to his election to his current position, Mr. McLean was President of the Power Team division of PECO; and Group Vice President of Engelhard Corporation.

John L. Skolds. Prior to his election to his current position, Mr. Skolds was Senior Vice President of Unicom Corporation; and President and Chief Operating Officer, South Carolina Electric and Gas Company. Mr. Skolds is also the Chief Executive Officer of AmerGen.

William H. Bohlke. Prior to his election to his current position, Mr. Bohlke was Vice President, Nuclear Engineering for Exelon; Vice President, Engineering of ComEd; Vice President and Director of Nuclear Power Operations of Stone & Webster Engineering Corporation; and Vice President, Nuclear Engineering of Florida Power & Light Company.

Christopher M. Crane. Prior to his election to his current position, Mr. Crane was Senior Vice President of ComEd; Vice President of ComEd; and Vice President of Tennessee Valley Authority.

Christine A. Jacobs. Prior to her election to her current position, Ms. Jacobs was Vice President, Support Services for PECO and Vice President, Industrial Operations, Americas for Rhone-Poulenc Rorer Pharmaceuticals.

David W. Woods. Mr. Woods is also a Senior Vice President of Exelon. Prior to his election to his current position, Mr. Woods was Senior Vice President—Corporate Public Affairs of PECO; and Chief of Staff of the Pennsylvania Senate Majority Leader.

John L. Settelen, Jr. Prior to his election to his current position, Mr. Settelen was Generation Business Unit Manager—Accounting and Control/Controller of PECO; and Vice President and Comptroller of New Jersey—American Water Company, Inc.

COMPENSATION

The Management Incentive Compensation Plan (the "MICP") was originally established by PECO in 1988 and amended in 1997. In connection with the merger, Exelon assumed sponsorship of the MICP.

The MICP provides for annual awards of cash, stock, or other currency (the "Awards") to key employees (employees so designated by a Committee of Exelon's Board of Directors, including employees who are officers or directors) based on achievement of certain pre-established goals. The maximum annual Award payable to any participant is two million dollars.

The MICP is administered and interpreted by a Committee (the "Committee") consisting of two or more outside, non-employee directors of Exelon. The Committee has the full power to select the employees who will receive Awards under the MICP; determine the amounts and forms of Awards; determines the terms and conditions of Awards in a manner consistent with the MICP; construe and interpret the MICP and any agreement or instrument entered into under the MICP; make factual determinations; and, establish, amend, or waive rules and regulations for the MICP's administration.

In order to qualify as performance-based compensation, the Committee must establish performance goals and the formula for applying such goals in determining Awards (within 90 days after the commencement of the applicable performance period or before 25% of the performance period has elapsed, if shorter than 12 months). During the performance period, the Committee may modify performance goals or the formula for applying such goals; provided, however, that the Committee cannot increase the Award otherwise payable to employees subject to section 162(m) of the Internal

Revenue Code under the goals and formula initially adopted. The Committee may, however, reduce or eliminate the Award otherwise payable.

The performance goals are based on business criteria chosen by the Committee from among the following alternatives, each of which may be based on absolute standards or peer industry group comparatives and may be applied at various organizational levels (e.g. corporate, business unit, division): a) total shareholder return; b) stock price increase; c) dividend payout as percentage of net income; d) return on equity; e) return on capital; f) cash flow, including operating cash flows, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost of capital; g) economic value added (income in excess of capital costs); h) cost per kilowatt hour; i) market share; j) customer/employee satisfaction as measured by survey instruments; k) earnings per share; l) revenue; m) workforce diversity; n) safety; o) personal performance; p) productivity measures; q) diversification of business opportunities; r) price to earnings ratio: s) expense ratio; t) total expenditures; and u) completion of key projects.

The Exelon Long-Term Incentive Plan (the "Incentive Plan") was originally established by PECO in 1989 as the PECO Energy Company 1989 Long-Term Incentive Plan. In connection with the exchange of PECO shares for shares of Exelon Corporation and the merger, Exelon Corporation assumed sponsorship of the Incentive Plan and the Incentive Plan was amended to change its name and otherwise reflect the share exchange and the merger.

Employees of Exelon Corporation and its subsidiary companies (including us) are eligible to be selected to participate in the Incentive Plan. Approximately 650 persons are eligible to participate in the Incentive Plan.

The Incentive Plan authorizes the following types of grants singly, in combination or in tandem:

Stock Options. Grants consist of options to purchase shares of Exelon Corporation's common stock, which may be "incentive stock options" or non-qualified stock options. Incentive stock options must meet the requirements of Section 422 of the Internal Revenue Code and carry some potential tax advantages for the recipient. Non-qualified stock options are not subject to those requirements and do not carry such advantages. Each stock option grant specifies the number of shares subject to the option, the manner and time of the option's exercise and the exercise price per share of stock subject to the option. The exercise price of stock option may not be less than the fair market value of a share of Exelon Corporation common stock on the date the option is granted. The exercise price of an option may be paid by a participant in cash, shares of Exelon Corporation common stock owned by the participant if approved by Exelon's Compensation Committee, a combination thereof or such other consideration as the Compensation Committee may deem appropriate.

Stock Appreciation Rights. A stock appreciation right ("SAR") is a right to receive a payment (either in cash, shares of Exelon Corporation common stock, or a combination thereof) equal to the appreciation in market value of a stated number of shares of Exelon Corporation common stock. The appreciation is measured by the difference between a base amount stated in the SAR and the market value of a share of Exelon Corporation common stock on the date of exercise of the SAR. A SAR may be granted in tandem with a stock option ("Tandem SARS") or independent of a stock option ("Non-tandem SARs"). A Tandem SAR may be granted either at the time of the grant of the related stock option or, in the case of a non-qualified stock option, at any time thereafter during the term of such option. Upon the exercise of a stock option as to some or all of the shares covered by the award, the related Tandem SAR is cancelled automatically to the extent that the number of shares subject to the Tandem SAR exceeds the number of remaining shares subject to the related stock option.

Restricted Stock. Grants are made of restricted shares of Exelon Corporation common stock. Such grants will be subject to such terms, conditions, restrictions and/or limitations, if any, as Exelon's

Compensation Committee deems appropriate, which may include vesting periods, restrictions on transferability and requirements of continued employment.

Performance Shares and Performance Units. Performance shares are shares of Exelon Corporation common stock and performance units which are valued by reference to criteria chosen by Exelon's Compensation Committee. Such grants are contingent on the attainment over a specified period of time of certain performance objectives. The length of the performance period, the performance objectives to be achieved and the measure of whether and to what degree such objectives have been achieved are determined by Exelon's Compensation Committee. Amounts earned under performance shares and performance units may be paid in cash, shares of Exelon Corporation common stock or both.

Phantom Stock. Phantom stock is a grant expressed in terms of, but not actually represented by, a number of shares of Exelon Corporation common stock. Exelon's Compensation Committee establishes the initial value of the phantom stock at the time of grant, which may be greater than, equal to or less than the fair market value of a share of Exelon Corporation common stock. Exelon's Compensation Committee also determines the time at which the phantom stock will be paid and whether such payment will be in the form of cash, shares of Exelon Corporation common stock or a combination of both. Any cash payment will be the fair market value of shares of Exelon Corporation common stock on the payment date equal in number to the number of shares of phantom stock being paid in cash.

Dividend Equivalents. Each dividend equivalent represents the right to receive an amount in cash, or in shares of Exelon Corporation common stock having a fair market value, equal to the amount of each dividend paid on one share of Exelon Corporation common stock during a period of time established by Exelon's Compensation Committee. Dividend equivalents may be paid currently or accrued as contingent cash obligations payable at a time or times specified by Exelon's Compensation Committee. Dividend equivalents may be granted separately or in connection with grants of stock options or phantom stock under the Incentive Plan.

The Incentive Plan currently limits the maximum aggregate number of shares of Exelon Corporation common stock that may be granted to any given individual in any calendar year to 500,000 (proposed to be amended to 1,000,000). The proposed amendment also adds to the Incentive Plan a provision that limits the number of shares available to be granted under the Incentive Plan at full value as restricted stock, performance shares or phantom stock to 3,000,000.

Grants are evidenced by written agreements containing the terms, conditions, restrictions and/or limitations covering the grant.

Available Shares and Outstanding Awards. On October 20, 2000, the effective date of the exchange of PECO shares for shares of Exelon Corporation common stock and the merger, 10,800,000 shares of Exelon Corporation common stock were available for grants under the Incentive Plan. Since then, grants covering 9,883,672 shares have been made under the Incentive Plan and grants covering 232,651 shares have expired or been forfeited, leaving approximately 1,148,979 shares of Exelon Corporation common stock available for future grants under the Incentive Plan as of March 1, 2002. Approval of the proposed amendment of the Incentive Plan will increase the number of shares available for future grants under the Incentive Plan to approximately 14,148,000. As of March 1, 2002, the market price of Exelon Corporation common stock was $50.52 per share.

The Exelon Corporation Employee Stock Purchase Plan (the "Purchase Plan") was adopted by the Board of Directors of Exelon Corporation on May 11, 2001 and became effective on June 1, 2001, subject to approval by the shareholders of Exelon Corporation in April 2002 at the annual meeting. If shareholders do not approve the Purchase Plan, it will cease to be effective on May 10, 2002.

Under the Purchase Plan, eligible employees of Exelon and designated subsidiaries including us may authorize their employers to withhold up to 10% of their regular base pay and to use those amounts to purchase shares of Exelon Corporation common stock. The Purchase Plan establishes four purchase periods beginning on January 1, April 1, July 1 and October 1 of each year. A participant's payroll deductions are accumulated and used to purchase shares of Exelon Corporation common stock as soon as practicable after the end of each purchase period. The purchase price per share for any purchase period is equal to 90% of the lesser of the closing price on the New York Stock Exchange of a share of Exelon Corporation common stock on the first day of the purchase period or the last day of the purchase period on which the Exchange is open. Dividends on shares purchased under the Purchase Plan will be paid in cash unless the participant elects to have the dividends reinvested to purchase additional shares of Exelon Corporation common stock. Shares purchased with reinvested dividends will be purchased at fair market value with no discount. In addition to the 10% limit on payroll deductions, a participant in the Purchase Plan may not purchase more than 125 shares in any purchase period (500 shares per year) or more than $25,000 in fair market value of stock in any calendar year. An individual's purchases under the Purchase Plan also will be limited if they would cause the employee to own 5% or more of the total combined voting power or value of all classes of stock of Exelon Corporation or any of its subsidiaries.

Under the terms of the Purchase Plan, the maximum number of shares of Exelon Corporation common stock that may be purchased under the Purchase Plan is 3,000,000, subject to adjustment for stock dividends, stock splits or combinations of shares of Exelon Corporation common stock. Through the purchase period that ended December 31, 2001, 137,648 shares of Exelon Corporation common stock had been purchased under the Purchase Plan. John Rowe, President and Chief Executive Officer of our parent has purchased 394 shares under the Purchase Plan. As of March 31, 2002, approximately 28,705 employees were eligible to participate in the Purchase Plan and 3,657 were participating in the Purchase Plan.

In 2001, Exelon adopted a cash balance pension plan. All management and electing union employees who joined Exelon or one of its participating subsidiaries, including us, during 2001 become participants in the plan. Management employees who were active participants in Exelon's previous qualified defined plans at December 31, 2000 and are employed by Exelon in January 1, 2002 will be given a choice to convert to the cash balance plan. Participants in the cash balance plan, unlike participants in the other defined benefit plans, may request a lump-sum cash payment upon employee termination which may result in increased requirements for pension plan assets. Exelon may be required to increase future funding to the pension plan as a result of these increased cash requirements.

SUMMARY COMPENSATION TABLE

Compensation of Executive Officers

	A N N U A L C O M P E N S A T I O N						L O N G T E R M C O M P E N S A T I O N
							Awards
		Bonus					Awards		Payouts
		Bonus					Restricted Stock Awards ($)		Payouts				All Other Compen- sation ($)
Name and Principal Position	Year	Salary ($)	Cash ($)	Stock- Based ($)(1)		Other ($)(2)	Restricted Stock Awards ($)	Options (#)(3)	Cash ($)		Stock- Based ($)(1)		All Other Compen- sation ($)
Corbin A. McNeill, Jr. Chief Executive Officer & President,	2001 2000 1999	1,050,000 855,830 659,857	1,500,300 1,081,472 1,000,000	— — —		84,987	1,354,104 2,803,513 942,188	233,000 392,500 —	— — —		— — —		26,573 3,200 3,200
John W. Rowe Co-CEO & President, Exelon Corp.	2001 2000 1999	1,050,000 989,423 957,692	1,500,300 1,180,269 529,125	— — 529,125	*	71,369 134,473 55,112	1,354,104	233,000 385,450 116,850	— 1,071,878 475,246	*	— 1,071,878 203,667	* *	52,729 60,293 42,478
Oliver D. Kingsley, Jr. President & Chief Nuclear Officer, Exelon Nuclear	2001 2000 1999	650,000 609,615 544,385	928,000 677,354	— — 594,000	*	98,677 175,502	597,729 231,562	— 223,250 38,000	— 547,251 —		— 547,251 322,488	* *	32,499 37,745 24,139
John L. Skolds(4) Chief Operating Officer, Exelon Nuclear	2001 2000 1999	430,000 157,115	483,900 441,306	— — —		59,772 130,466	353,750 453,750	45,000 107,075 —	— — —		— 617,465 —	*	21,499 5,755 —
Ian P. McLean(5) President, Exelon Power Team	2001 2000 1999	362,311 308,000 72,692	323,100 220,596 63,900	— — —		134,267 — —	261,042 429,600 1,105,625	49,644 83,000 125,000	149,160 — —		— — —		683 — —

(1): All of the amounts shown under "Bonus—Stock Based" and "Long Term Compensation Payouts—Stock Based" were paid either in shares of Exelon common stock or were deferred and since the merger, are deemed to be invested in shares of Exelon common stock. Such deferred shares are fully at risk until the end of the deferral period. Deferred amounts are noted with an asterisk.
(2): Excludes prerequisite and other benefits, unless the aggregate amount of such compensation is at least $50,000. For 2001, includes $42,805 paid to Mr. McNeill for financial and legal services and $22,879 paid to Mr. Rowe for the payment of other taxes; $55,067 paid to Mr. Skolds for payment of other taxes, and $104,417 paid to Mr. McLean for moving expenses.
(3): Grants of options to Mr. Rowe, Mr. Kingsley, and Mr. Skolds prior to the merger have been adjusted to reflect the substitution of options to acquire shares of Exelon common stock in accordance with the merger agreement
(4): Mr. Skolds commenced employment on August 21, 2000.
(5): Mr. McLean commenced employment on September 22, 1999.

Option Grants in 2001

The "grant date present values" indicated in the option grant table below are an estimate based on the Black-Scholes option pricing model. Although executives risk forfeiting these options in some circumstances, these risks are not factored into the calculated values. The actual value of these options will be determined by the excess of the stock price over the exercise price on the date that the options are exercised. There is no certainty that the actual value realized will be at or near the value estimated by the Black-Scholes option pricing model. The assumptions used for the Black-Scholes model are as of December 31, 2001 and are as follows: Risk-free interest rate: 4.85%; Volatility: 37.17%; Dividend Yield: 3.24%; Time of Exercise: 5 years.

	Individual Grants						Grant Date Value
Name	Number of Securities Underlying Options Granted(#)(1)	% of Total Options Granted to Employees in 2000		Exercise or Base Price ($/Sh.)		Expiration Date	Grant Date Present Value ($)
Corbin A. McNeill, Jr.	233,300	37.08	%	$	67.88	01/01/2011	$	4,710,327
John W. Rowe	233,300	37.08	%	$	67.88	01/01/2011	$	4,710,327
Oliver D. Kingsley, Jr.	0
John L. Skolds	0
Ian P. McLean	0

(1): Regular stock options that would have normally been granted to eligible participants in January 2001 were granted at the time of the merger in October 2000 with the exception of the Co-CEOs. Due to Plan limitations as to the maximum number of options that can be granted in a calendar year, the 10/20/2000 launch grant to the Co-CEOs was split between that date and January 2, 2001. The remaining stock options granted during 2001 were deemed "off-cycle" grants and were usually awarded as part of an employment offer.

Option Exercises and Year-End Value

This table shows the number and value of exercised and unexercised stock options for the named executive officers during 2001. Value is determined using the market value of Exelon common stock at the year-end price of $47.88 per share, minus the value of Exelon common stock at the exercise price. All options whose exercise price exceeds the market value are valued at zero.

				Number of Securities Underlying Unexercised Options at 12/31/2001	Value of Unexercised In-the-Money Options at 12/31/2001
Name	Shares Acquired of Exercise (#)	Value Realized ($)		(#) Exercisable Unexercisable	($) Exercisable Unexercisable
Corbin A. McNeill, Jr.	32,500	$	1,478,750	545,833 E 494,967 U	$ $	11,586,765 E 886,265 U
John W. Rowe	100,000	$	2,980,000	348,000 E 525,100 U	$ $	2,936,529 E 1,058,110 U
Oliver D. Kingsley, Jr.	0		0	156,750 E 161,500 U	$ $	1,247,315 E 550,560 U
John L. Skolds	0		0	36,167 E 72,333 U		1,045 E 2,090 U
Ian P. McLean	0		0	110,999 E 97,001 U		883,356 E 547,369 U

Retirement Plans

The following tables show the estimated annual retirement benefits payable on a straight-life annuity basis to participating employees, including officers, in the earnings and year of service classes indicated, under Exelon's non-contributory retirement plans. Effective January 1, 2001, Exelon Corporation assumed sponsorship of the Commonwealth Edison Company Service Annuity System and the PECO Energy Company Service Annuity Plan. Effective December 31, 2001, these plans were merged to form the Exelon Corporation Retirement Program, which incorporates the separate benefit formula of each merged plan for employees in business units formerly covered by that merged plan. Effective January 1, 2001, Exelon Corporation also established two cash balance pension plans which cover management employees and bargaining unit employees hired on or after such date. The amounts shown in the table are not subject to any deduction for Social Security or other offset amounts.

Covered compensation includes salary and bonus which is disclosed in the Summary Compensation Table on page 66 for the named executive officers. The calculation of retirement benefits under the plans is based upon average earnings for the highest consecutive five-year period under the PECO Energy Company Service Annuity Benefit Formula and for the highest four-year period (three-year for certain represented employees) under the ComEd Service Annuity Benefit Formula.

The Internal Revenue Code limits the annual benefits that can be paid from a tax-qualified retirement plan to $170,000 as of January 1, 2001. As permitted by the Employee Retirement Income Security Act of 1974, Exelon sponsored supplemental plans, which allow the payment out of its general assets, any benefits calculated under provisions of the applicable retirement plan which may be above these limits.

PECO Energy Service Annuity Formula Table

	Annual Normal Retirement Benefits After Specified Years of Service
Highest 5-Year Average Earnings	10 Years ($)	15 Years ($)	20 Years ($)	25 Years ($)	30 Years ($)	35 Years ($)	40 Years ($)
$100,000.00	19,272	26,407	33,543	40,679	47,815	54,950	62,086
200,000.00	39,772	54,657	69,543	84,429	99,315	114,200	129,086
300,000.00	60,272	82,907	105,543	128,179	150,815	173,450	196,086
400,000.00	80,772	111,157	141,543	171,929	202,315	232,700	263,086
500,000.00	101,272	139,407	177,543	215,679	253,815	291,950	330,086
600,000.00	121,772	167,657	213,543	259,429	305,315	351,200	397,086
700,000.00	142,272	195,907	249,543	303,179	356,815	410,450	464,086
800,000.00	162,772	224,157	285,543	346,929	408,315	469,700	531,086
900,000.00	183,272	252,407	321,543	390,679	459,815	528,950	598,086
1,000,000.00	203,772	280,657	357,543	434,429	511,315	588,200	665,086

Mr. McNeill and Mr. McLean have 32 and 0 credited years of service, respectively, under PECO Energy Company's pension program.

Commonwealth Edison Service Annuity Formula Table

	Annual Normal Retirement Benefits After Specified Years of Service
Highest 4-Year Average Earnings	10 Years ($)	15 Years ($)	20 Years ($)	25 Years ($)	30 Year ($)	35 Years ($)	40 Years ($)
$100,000.00	19,523	31,016	41,648	51,626	61,113	70,232	79,076
200,000.00	39,647	63,290	85,181	105,720	125,221	143,923	162,013
300,000.00	59,770	95,563	128,714	159,815	189,328	217,613	244,949
400,000.00	79,893	127,836	172,247	213,909	253,435	291,303	327,885
500,000.00	100,017	160,109	215,780	268,003	317,543	364,994	410,822
600,000.00	120,140	192,383	259,313	322,097	381,650	438,684	493,758
700,000.00	140,263	224,656	302,846	376,191	445,757	512,375	576,694
800,000.00	160,386	256,929	346,379	430,286	509,864	586,065	659,630
900,000.00	180,510	289,202	389,912	484,380	573,972	659,755	742,567
1,000,000.00	200,633	321,476	433,445	538,474	638,079	733,446	825,503

The approximate number of years of credited service under ComEd's pension programs for the persons named in the Summary Compensation Table are as follows: John W. Rowe, 24 years; Oliver D. Kingsley, 20 years; and John L. Skolds, 2 years.

Employment Agreements

Employment Agreement with John W. Rowe

Exelon entered into an amended employment agreement with Mr. Rowe, which amended and restated his employment agreement with Unicom Corporation and ComEd in effect at the time of the merger forming Exelon (the "prior agreement") and under which Mr. Rowe will serve as:

•: co-chief executive officer and president of Exelon, chairman of the executive committee of the Exelon board of directors and a member of the Exelon board of directors during the first half of the transition period provided for in Exelon's Bylaws, which is defined as the period from the effective time of the merger forming Exelon (October 20, 2000) until December 31, 2003,
•: co-chief executive officer of Exelon, chairman of the Exelon board of directors and a member of the Exelon board of directors during the second half of the transition period, and

•: chief executive officer of Exelon, chairman of the Exelon board of directors and a member of the Exelon board of directors after the transition period.

Mr. Rowe will succeed to the position of sole chief executive officer of Exelon or chairman of the Exelon board of directors if:

•: prior to the end of the transition period, Mr. McNeill should cease to be a co-chief executive officer of Exelon or the chairman of the Exelon board of directors, and
•: Mr. Rowe is still a co-chief executive officer of Exelon at that time.

Mr. Rowe will receive an annual base salary determined by Exelon's compensation committee. Mr. Rowe will be eligible to participate in annual incentive award programs, long-term incentive plans and stock option plans on the same basis as other senior executives of Exelon. The agreement provided that a grant of options would be considered at the time the merger was completed. Mr. Rowe is entitled to participate in all savings, deferred compensation, retirement and other employee benefit plans generally available to other senior executives of Exelon. During the transition period, Mr. Rowe's base salary and participation in the plans and awards described in this paragraph will be in an amount or on a basis that is not less than that of Mr. McNeill's or on which Mr. McNeill participates.

Under his amended employment agreement and the prior agreement, Mr. Rowe is entitled to receive a special supplemental executive retirement plan, or SERP, benefit if he terminates due to normal retirement, early retirement, termination without cause, termination for good reason, death or disability or if he voluntarily terminates his employment for any other reason.

The term "good reason" includes the failure to appoint Mr. Rowe to the management and Exelon board of director positions described above. The special SERP benefit will equal the SERP benefit that Mr. Rowe would have received if:

•: he had attained age 60 (or his actual age, if greater),
•: he had earned 20 years of service on March 16, 1998 and one additional year of service on each anniversary after that date and prior to termination, and
•: his annual incentive awards for each of 1998 and 1999 had been $300,000 greater than the annual incentive awards he actually received for those years.

Except as provided in the next paragraph, if Exelon terminates Mr. Rowe's employment for reasons other than cause, death or disability or if he should terminate employment for good reason on or after December 31, 2004 and not within 24 months following a change in control of Exelon, he would be entitled to the following benefits:

•: a prorated annual incentive award for the year in which termination occurs,
•: severance payments equal to his base salary for two years after termination, and for each year during such period an amount equal to the average of the annual incentive awards paid to him with respect to the three years preceding the year of termination or, if greater, his annual incentive award for the year before termination,
•: for the two-year period, continuation of his life, disability, accident, health and other welfare benefits, plus the retirement benefits described above and post-retirement health care coverage,
•: all of his exercisable options would remain exercisable until the applicable option expiration date,
•: unvested options would continue to become exercisable during the two-year continuation period and thereafter remain exercisable until the applicable option expiration date, and
•: all compensation earned through the date of termination and coverage and benefits under all benefit plans to which he is entitled.

Mr. Rowe will receive the termination benefits described in "Change in Control and Severance Arrangements" below, rather than the benefits described in the previous paragraph, if Excelon terminates Mr. Rowe without cause or he terminates with good reason and

•: the termination occurs within 24 months after a change in control of Exelon, or
•: the termination occurs at any other time prior to the earlier of normal retirement or December 31, 2004, or
•: the termination occurs at any other time on and before normal retirement because of the failure to appoint or elect Mr. Rowe to the management or Exelon board of director positions described above.

Employment Arrangement with Corbin A. McNeill, Jr.

Although Exelon has not entered into an employment agreement with Mr. McNeill, the merger agreement provided that at any time during the transition period when Messrs. McNeill and Rowe are co-chief executive officers, each of them will receive the same salary, bonus and other compensation (including option grants and other incentive awards and all other forms of compensation) and enjoy the same other benefits and the same employment security arrangements as the other. In February 2002, Mr. McNeill announced that he will retire as an officer and director of Exelon effective immediately after the 2002 annual meeting of shareholders. Under an agreement approved by the board of directors of Exelon, Mr. McNeill will receive the termination benefits described in "Change in Control Severance Arrangements" below upon his retirement.

Employment Agreement with Oliver D. Kingsley, Jr.

ComEd entered into an employment agreement with Oliver D. Kingsley, Jr. pursuant to which he became Executive Vice President and President and Chief Nuclear Officer-Nuclear Generation Group, effective November 1, 1997. The agreement provides for a guaranteed increase in annual base salary of at least 4% per year, beginning in 1999.

Mr. Kingsley received an option to purchase 25,000 shares of common stock with an option price equal to the fair market value of the common stock as of November 1, 1997. Such option became exercisable in equal installments on November 1 of 1998, 1999 and 2000, and expires on October 31, 2007. Mr. Kingsley also received a grant of 20,000 shares of restricted stock that vested in equal installments on November 1 of 1998, 1999 and 2000.

Mr. Kingsley received $375,000 as an inducement to enter into the employment agreement, and an annual living cost allowance equal to $75,000 (increased by the amount of applicable taxes on such amount as so increased) for the first three years of the agreement term.

Mr. Kingsley's employment agreement provides for a retirement benefit equal to the amount that would have been payable under the Service Annuity System (plus amounts payable under the ComEd Supplemental Management Retirement Plan) for an employee who retires at age 60 calculated based on the assumption that Mr. Kingsley had completed 15 years of credited service beginning with the third year of his employment and that such credited service increased by five years during each of the next two years, in addition to his actual years of credited service after five years of employment.

The employment agreement with Mr. Kingsley provides for a lump sum severance payment to Mr. Kingsley if he should be terminated without cause equal to two times his base salary at the time of such termination, and a continuation of health and life insurance benefits for two years after the date of termination, plus retirement benefits (calculated as though he had completed at least 15 years of credited service if such termination occurs during the first two years of employment) and retiree health care coverage. In addition, any unvested-portion of the restricted stock granted under the agreement will immediately become fully vested and nonforfeitable. These benefits have been incorporated into a

change in control severance agreement that became effective on October 20, 2000. See "Change in Control Severance Agreements" below.

Mr. Kingsley agreed not to use for his own benefit or disclose any confidential information of Unicom or ComEd during or after the term of his employment, and not to solicit any employee of ComEd for one year after the term of his employment with ComEd.

Change in Control Severance Arrangements

Exelon has entered into change in control agreements with certain senior executives including the senior executives listed under "Management" on page 61 which generally protect executives' positions and compensation levels through October 20, 2002 with respect to the Exelon merger in the case of certain officers, and for two years after certain future changes in control if such changes in control occur before June 1, 2003. The June 1, 2003 date is subject to annual extension if there is no change in control before June 1 of each year. In some cases, these agreements replaced change in control agreements with PECO and Unicom which became effective upon the completion of the merger and which cover employment through October 20, 2002. A material adverse change in compensation or position is included in the definition of "good reason" for purposes of these agreements. If an executive resigns for good reason or if the executive's employment is terminated by Exelon other than for cause, severance pay and benefits become payable.

The severance payments and benefits provided under the change in control agreements include:

•

Severance payments equal to either two and one-half or three multiplied by the sum of:

•: the employee's annual base salary, plus
•: an amount equal to the average of the annual incentive awards paid to the employee for the two years preceding the year of termination or, if greater, the target award under the annual incentive award program in which the employee participates for the year in which termination occurs.

•: A prorated annual incentive award for the year in which termination occurs.
•: Continuation of life, disability, accident, health and other welfare benefit coverage for three years; thereafter, if applicable, retiree coverage is available.
•: Outplacement services.
•: All of a terminated employee's exercisable options remain exercisable until the applicable option expiration date, and all unvested options become fully exercisable and remain so until the applicable option expiration date.
•: Any deferred stock units, restricted stock, or restricted share units become fully vested and any other long-term incentive plan award which is unvested would vest.
•: For purposes of determining benefits under the supplemental retirement plan or arrangement, in which the employee participates, the employee will be credited with three additional years of credited service, age and compensation.
•: For purposes of determining eligibility for retiree welfare benefits, the employee will be deemed to have three additional years of service and age.
•: All compensation earned through the date of termination as well as all coverage and benefits under all benefit plans to which the employee is entitled.

Pursuant to the terms of offers of employment or employment agreements, certain employees are also entitled to additional service credits for purposes of retiree health care eligibility and for determining benefits under the supplemental retirement plan or arrangement in which they participate.

In connection with the severance benefits described above, each executive is subject to a non-compete agreement for 24 months from the applicable termination date. Although a participating employee does not have a duty to mitigate the amounts due from Exelon continued welfare benefit coverage would be offset during the applicable continuation period by comparable coverage provided under welfare plans of another employer.

Employees who are senior vice-presidents or above will receive an additional payment to cover excise taxes imposed under Section 4999 of the Internal Revenue Code on "excess parachute payments" or under similar state or local law if the after-tax amount of payments and benefits subject to these taxes exceeds 110% of the "safe harbor" amount that would not subject the employee to these excise taxes. If the after-tax amount, however, is less than 110% of the safe harbor amount, payments and benefits subject to these taxes would be reduced or eliminated to equal the safe harbor amount. Benefits payable to other employees subject to the excise taxes imposed under Section 4999 of the Internal Revenue Code will be reduced to the employees' safe harbor amount.

CERTAIN TRANSACTIONS

We are an indirect subsidiary of Exelon. The following describes our material relationships and agreements with Exelon and other affiliates.

Restructuring and Asset Transfers. During January 2001, Exelon undertook a restructuring to separate its generation and other competitive businesses from its regulated energy delivery business. As part of this restructuring, both ComEd and PECO transferred their assets and liabilities unrelated to energy delivery to other subsidiaries of Exelon, including us. In the case of ComEd, the assets and liabilities transferred to us included nuclear generation facilities, wholesale power marketing operations, rights under certain power purchase agreements and nuclear decommissioning trust funds. In the case of PECO, the assets and liabilities transferred related to nuclear, fossil and hydroelectric generation facilities and wholesale power marketing operations, rights under certain power purchase agreements and nuclear decommissioning trust funds. The liabilities that we assumed include: decommissioning costs for nuclear facilities; obligations to comply with all liabilities connected with or arising out of permits, licenses, exemptions, allowances, approvals and other items obtained or required in connection with the generation assets; obligations and liabilities arising under contracts assigned to us, including power purchase agreements and pollution control revenue bonds after January 1, 2001; all employment related obligations and liabilities to employees of PECO and ComEd who became our employees in connection with the restructuring; and certain litigation matters described under "Our Business—Litigation."

Power Purchase and Related Agreements with ComEd. We are a party to a power purchase agreement and other agreements with ComEd, under which we must provide ComEd with all of ComEd's energy, capacity and ancillary services needs through December 31, 2004 (after taking into account deliveries from other suppliers of electricity and capacity that ComEd is required to accept by law). ComEd uses such energy, capacity and ancillary services to meet its service obligations to its retail and wholesale customers and to provide energy imbalance service as part of its obligation to operate the ComEd control area. During the period from January 1, 2005 to December 31, 2006, the agreement changes to a partial requirements arrangement under which we will provide ComEd with all of the electric energy and capacity from the nuclear facilities formerly owned by ComEd that we now own and operate. Through 2004, ComEd has agreed to pay us fixed energy prices only, which vary depending on the time of day and the season. The prices for the portion of the term during 2005 and 2006 are not specified in the agreement, but the agreement does provide that the parties will meet before the end of 2004 to set the prices for that period, and that the intent is that such prices will reflect expected market prices for energy and capacity during that period. The agreement provides that if we and ComEd cannot agree on prices by July 1, 2004 (or by any agreed to later date), then ComEd may terminate the agreement as of December 31, 2004. We have also entered into an Ancillary Services and other Control Area Services Resource Purchase Agreement with ComEd. This agreement contains additional terms under which we provide ancillary and related services to ComEd.

Power Purchase Agreement with PECO. The power purchase agreement between PECO and us, dated January 1, 2001, requires us to deliver energy to PECO to meet PECO's hourly load obligations for provider-of-last-resort ("PLR") customers and provide PECO with rights to capacity sufficient to meet PECO's daily unforced capacity obligation as determined by PJM through the year 2010. To ensure long-term generation reliability within the PJM control area, PJM rules require that load-serving entities, such as PECO, have rights to capacity in amounts based on PECO's load plus a reserve margin. The bundled price for both the energy and capacity that we provide to PECO is a function of the amount PECO is able to charge its PLR customers. PECO arranges for transmission service and all other transmission service products with PJM and pays PJM for these services.

Power Purchase Agreements with AmerGen. A power purchase agreement between us and AmerGen, dated as of December 5, 2001, requires us to buy all unforced capacity associated with TMI, all electric output of TMI in excess of the output used to operate TMI and the output used to deliver electric energy to the point of delivery to us and all ancillary products that are derived from TMI, including but not limited to ancillary services, at a monthly all-in scheduled price that varies month to month over the term of the contract. The term of the contract is from January 1, 2002 to December 31, 2014. Under the terms of a 1999 power purchase agreement with AmerGen, we purchase all of the residual energy from Clinton through December 31, 2002, also at an all-in price that varies month to month over the term of the agreement. Currently the residual output approximates 25% of the total output for Clinton.

Market Operations Services Arrangement. As a generator connected to the regional transmission system controlled by PJM, we are obligated to conduct certain market operation services, which, prior to PECO's restructuring, were performed by PECO directly. Pursuant to the terms of a Market Operations Services Arrangement, PECO has agreed to continue to provide us with these services, which include, among other things, operation of generation dispatch function, troubleshooting generation problems and scheduling of generation units outages. For 2001, our cost was approximately $1.4 million for employee services under this arrangement. In addition to charges for employee services, we are charged for those costs, properly allocable to us, associated with the use of PECO-owned facilities and/or equipment (e.g., telecommunications equipment) in the performance of the market operations services under the terms of the agreement. The agreement can be terminated by either party upon 120 day's prior written notice.

Interconnection Agreements. Following the corporate restructuring and the disaggregation of Exelon's distribution and generation businesses, interconnection agreements between ComEd and us and between PECO and us were filed with FERC to establish the requirements, terms and conditions for the continuing interconnection of the generation facilities assigned to us with the transmission and distribution systems owned and operated by each of PECO and ComEd. The agreements govern interconnection only and it is our responsibility or the responsibility of the purchaser of our capacity or energy output to make arrangements for transmission service.

Generation Reliability Services. Pursuant to the terms of certain Call Contracts for Generator Reliability Services between us and PECO dated as of January 10, 2001, we have agreed that, when called upon by PECO to do so in accordance with the terms of the Call Contracts, we will generate energy at the Delaware Generation Station and Moser Generator and deliver that energy to PECO's distribution system in order to preserve the reliable operations of the distribution system. In exchange for providing such services, we are entitled to receive our net out-of-pocket costs associated with providing the services. The agreements are for terms of ten years, unless terminated earlier by either party upon 90 days' prior written notice, and relate to the Delaware Generation Station and the Moser Generation Station.

Transmission Services. We purchase transmission services from our affiliates at price terms set under FERC open-access transmission tariffs. For 2001, our affiliated transmission purchases totaled $6.6 million.

Operating Guidelines and License Agreement. In connection with the corporate restructuring of ComEd, ComEd transferred to us two synchronous condensers and related equipment located at Zion Nuclear Station. These synchronous condensers are used to provide voltage support on ComEd's transmission system. Pursuant to the terms of the Operating Guidelines and License Agreement, we license to ComEd all of our rights to the synchronous condensers and agree to operate and maintain the synchronous condensers as required by ComEd.

AmerGen Services Agreement. We provide operation and support services to the nuclear facilities owned by AmerGen pursuant to a Services Agreement dated as of March 1, 1999. The Services Agreement has an indefinite term and may be terminated by us or by AmerGen on 90 days' notice. Under work orders issued under the Services Agreement, we provide such services as administrative and management services, human resource services, legal services, financial and accounting services, information technology and computer services and laboratory analysis services. We are compensated for these services in an amount agreed to in the work order but not less than the higher of our fully allocated costs for performing the services or the market price. In 2001, we charged AmerGen $80 million for these services.

Agreement with Exelon Energy Company, LLC. Under a power purchase agreement between Exelon Energy Company, LLC ("Exelon Energy") and us for the period January 1, 2001 through March 31, 2003, we are obligated to provide all the energy and capacity requirements of Exelon Energy to enable Exelon Energy to fulfill its competitive retail load obligations in Massachusetts at market-based prices. Exelon Energy is an affiliate of Exelon that provides competitive retail generation service to customers in the PJM region and elsewhere.

Capital Contributions and Distributions. The total capital contributions to us from Exelon in connection with the transfer and purchase of operating assets were $2.398 million in 2001. Exelon has not contributed any capital to us in 2002. There are currently no plans for us to make distributions to Exelon.

Affiliated Services Agreements. There are several contracts among Exelon and its affiliates, including us, under which services are provided and received. Exelon Business Services Company, a

wholly owned subsidiary of Exelon, provides business services, such as legal, accounting, purchasing and information technology, to Exelon and its affiliates, including us, at cost. ComEd and PECO currently provide services to or receive services from Exelon affiliates, including us, at market prices, or if there is no prevailing price, then at fully allocated cost. We also provide and receive from ComEd and PECO services, at cost, pertaining to the interface between the generation function conducted by us and the transmission and distribution functions provided by ComEd and PECO. These services are limited to those necessary for the efficient operation of the facilities located at the generation station sites where generation facilities are connected to the transmission and distribution facilities (primarily switchyard facilities). We also provide supply planning services, at cost, to ComEd and PECO and assist them in obtaining energy supply resources to the extent energy supply is not provided by us.

Pollution Control Notes. In 2001, PECO transferred to us $121 million of debt, through refundings of tax-exempt pollution control notes. We intend to assume from PECO approximately $29.5 million in debt through refundings in 2002.

Consolidated Tax Return and Tax Sharing Agreement. We join with Exelon and its subsidiaries in filing a consolidated federal income tax return. The consolidated tax liability is allocated among participants in accordance with a Tax Sharing Agreement entered into with the other members of the Exelon Consolidated Group (including PECO and ComEd). This agreement provides an equitable method for determining the share of the affiliated group's consolidated federal tax burdens and benefits to be attributed to each member.

THE EXCHANGE OFFER

Purpose of the Exchange Offer

In connection with the sale of the original notes, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed to use our best efforts to complete the exchange offer and to file and cause to become effective with the SEC a registration statement for the exchange of the original notes for exchange notes.

The terms of the exchange notes are the same as the terms of the original notes, except that the exchange notes have been registered under the Securities Act and will not be subject to some restrictions on transfer that apply to the original notes. In that regard, the original notes provide, among other things, that if the exchange offer has not been consummated within the period specified in the original notes, the interest rate on the original notes will increase by 0.50% per annum, until the exchange offer is consummated.

Upon completion of the exchange offer, holders of original notes will not be entitled to any further registration rights under the registration rights agreement, except under limited circumstances. See "Risk Factors—If you fail to exchange the original notes, they will remain subject to transfer restrictions" and "Description of the Exchange Notes." The exchange offer is not being made to holders of original notes in any jurisdiction in which the exchange offer or the acceptance of the notes would not comply with securities or blue sky laws.

The original notes were issued and are held in the book-entry system of The Depository Trust Company ("DTC"). Unless the context requires otherwise, the term "holder" with respect to the exchange offer means any person whose original notes are held of record by DTC and who desires to deliver such original notes by book-entry transfer at DTC. As soon as practicable after the Expiration Date, we will exchange the original notes for a like aggregate principal amount of the exchange notes of each series.

Completion of the exchange offer is subject to the conditions that the exchange offer not violate any applicable law or interpretation of the staff of the Division of Corporate Finance of the SEC and that no injunction, order or decree has been issued that would prohibit, prevent or materially impair our ability to proceed with the exchange offer. The exchange offer is also subject to various procedural requirements discussed below with which holders must comply. We reserve the right, in our absolute discretion, to waive compliance with these requirements subject to applicable law.

Terms of the Exchange Offer

We are offering, upon the terms and subject to the conditions described in this prospectus and in the accompanying letter of transmittal, to exchange up to $700,000,000 aggregate principal amount of exchange notes for a like aggregate principal amount of original notes of the same series properly tendered on or before the Expiration Date and not properly withdrawn in accordance with the procedures described below. We will issue, promptly after the Expiration Date, an aggregate principal amount of up to $700,000,000 of exchange notes in exchange for a like principal amount of outstanding original notes tendered and accepted in connection with the exchange offer. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. See "—Fees and Expenses."

Holders may tender their original notes in whole or in part in minimum denominations of $1,000 and multiples thereof. The exchange offer is not conditioned upon any minimum principal amount of original notes being tendered. As of the date of this prospectus, $700,000,000 aggregate principal amount of the original notes is outstanding. Holders of original notes do not have any appraisal or dissenters' rights in connection with the exchange offer. Original notes that are not tendered or are tendered but not accepted in connection with the exchange offer will remain outstanding and be

entitled to the benefits of the indenture, but will not be entitled to any further registration rights under the registration rights agreement, except under limited circumstances. See "Risk Factors—If you fail to exchange the original notes, they will remain subject to transfer restrictions" and "Description of the Exchange Notes." If any tendered original notes are not accepted for exchange because of an invalid tender, the occurrence of other events described in this prospectus or otherwise, appropriate book-entry transfer will be made, without expense, to the tendering holder of the original notes promptly after the Expiration Date. Holders who tender original notes in connection with the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the bondholders' instruction form, transfer taxes with respect to the exchange of original notes in connection with the exchange offer.

We do not make any recommendation to holders of original notes as to whether to exchange all or any portion of their original notes in the exchange offer. In addition, no one has been authorized to make any recommendation as to whether holders should exchange notes in the exchange offer. Holders of original notes must make their own decisions whether to exchange original notes in the exchange offer and, if so, the aggregate amount of original notes to exchange based on the holders' own financial positions and requirements.

Expiration Date; Extensions; Amendments

The term "Expiration Date" means 5:00 p.m., Eastern Time, on , 2002. However, if the exchange offer is extended by us, the term "Expiration Date" will mean the latest date and time to which we extend the exchange offer.

We expressly reserve the right in our sole and absolute discretion, subject to applicable law, at any time and from time to time:

•: to delay the acceptance of the original notes for exchange,
•: to extend the Expiration Date and retain all original notes tendered in the exchange offer, subject, however, to the right of holders of original notes to withdraw their tendered original notes as described under "—Withdrawal Rights," and
•: to waive any condition or otherwise amend the terms of the exchange offer in any respect.

If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly

•: disclose the amendment in a prospectus supplement that will be distributed to the holders of the original notes,
•: file a post-effective amendment to the registration statement filed with the SEC with regard to the exchange notes and the exchange offer, and
•: extend the exchange offer to the extent required by Rule 14e-1 under the Exchange Act.

We will promptly notify the exchange agent by making an oral or written public announcement of any delay in acceptance, extension, termination or amendment. This announcement in the case of an extension will be made no later than 9:00 a.m., Eastern Time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which we may choose to make any public announcement and, subject to applicable law, we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to an appropriate news agency.

Acceptance for Exchange and Issuance of Exchange Notes

Upon the terms and subject to the conditions of the exchange offer, we will exchange and issue to the exchange agent, promptly after the Expiration Date, exchange notes for original notes validly tendered and not withdrawn. In all cases, delivery of exchange notes in exchange for original notes tendered and accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of:

•: a book-entry confirmation of a book-entry transfer of original notes into the exchange agent's account at DTC, including an agent's message (as defined below) if the tendering holder has not delivered a letter of transmittal,
•: the letter of transmittal (or facsimile thereof), properly completed or an agent's message instead of the letter of transmittal, and
•: any other documents required by the letter of transmittal.

The term "book-entry confirmation" means a timely confirmation of a book-entry transfer of original notes into the exchange agent's account at DTC. The term "agent's message" means a message, transmitted by DTC to and received by the exchange agent and forming a part of a book-entry confirmation, that states that DTC has received an express acknowledgment from the tendering DTC participant. This acknowledgment states that the participant has received and agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against the participant.

If the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 PM Eastern Standard Time on the Expiration Date, a Notice of Guaranteed Delivery may be submitted to the Exchange Agent in the manner and at the address for the Exchange Agent below (See "—Exchange Agent"). The notice of guaranteed delivery must be signed by a member of a registered national securities exchange, or a member of the National Association of Securities Dealers or a commercial bank or trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. In addition, in order to use the guaranteed delivery procedure to render original notes pursuant to the Exchange Offer, a completed and signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 PM Eastern Standard Time on the Expiration Date.

Subject to the terms and conditions of the exchange offer, we will be deemed to have accepted for exchange, and therefore exchanged, original notes validly tendered and not withdrawn as, if and when we give oral or written notice to the exchange agent of our acceptance of such original notes for exchange pursuant to the exchange offer. The exchange agent will act as agent for us for the purpose of receiving tenders of original notes, letters of transmittal and related documents, and as agent for tendering holders for the purpose of receiving holders' instruction forms, letters of transmittal and related documents and transmitting exchange notes to validly exchanging holders. The exchange will be made promptly after the Expiration Date.

If, for any reason whatsoever, acceptance for exchange or the exchange of any tendered original notes is delayed, whether before or after our acceptance for exchange of original notes, or we extend the exchange offer or are unable to accept for exchange or exchange tendered original notes, then, without prejudice to the rights we have in the exchange offer, the exchange agent may, nevertheless, on our behalf and subject to Rule 14e-1(c) under the Exchange Act, retain tendered original notes. These original notes may not be withdrawn except to the extent tendering holders are entitled to withdrawal rights as described under "—Withdrawal Rights."

Under the letter of transmittal or agent's message, a holder of original notes will warrant and agree that it has full power and authority to tender, exchange, sell, assign and transfer original notes, that we will acquire good, marketable and unencumbered title to the tendered original notes, free and clear of all liens, restrictions, charges and encumbrances, and the original notes tendered for exchange are not subject to any adverse claims or proxies. The holder also will warrant and agree that it will, upon request, execute and deliver any additional documents deemed by us or the exchange agent to be necessary or desirable to complete the exchange, sale, assignment, and transfer of the original notes exchanged in the exchange offer.

Procedures for Tendering Original Notes

Valid Tender. The tender of original notes must follow the procedures for book-entry transfer described below and a book-entry confirmation, including an agent's message if the tendering holder has not delivered a letter of transmittal, must be received by the exchange agent, in each case on or before the Expiration Date.

If less than all of the original notes are to be exchanged, a holder should fill in the amount of original notes being exchanged in the appropriate box on the holder's instruction forms. The entire amount of original notes will be deemed to have been tendered for exchange unless otherwise indicated.

The method of delivery of the holder's instruction form and all other required documents is at the option and sole risk of the tendering holder. Delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, we recommend properly insured registered mail, return receipt requested, or an overnight delivery service. In all cases, you should allow sufficient time to ensure timely delivery.

The exchange agent will establish an account with respect to the original notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution that is a participant in DTC's book-entry transfer facility system may make a book-entry delivery of the original notes by causing DTC to transfer the original notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfers. However, although delivery of original notes may be effected through book-entry transfer into the exchange agent's account at DTC, the holder's instruction form (or facsimile thereof), properly completed and duly executed, or an agent's message instead of the letter of transmittal, and any other required documents, must in any case be delivered to and received by the exchange agent at its address listed under "—Exchange Agent" on or before the Expiration Date.

Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent.

Determination of Validity. All questions as to the form of documents, validity, eligibility, including time of receipt, and acceptance for exchange of any tendered original notes will be determined by us, in our sole discretion. Our interpretation of the terms and conditions of the exchange offer, including the bondholders' instruction form letter of transmittal and the accompanying instructions, will be final and binding.

We reserve the absolute right, in our sole and absolute discretion, to reject any and all tenders determined by us not to be in proper form or the acceptance of which, or exchange for, may, in the opinion of our counsel, be unlawful. We also reserve the absolute right, subject to applicable law, to waive any condition or irregularity in any tender by a particular holder whether or not similar conditions or irregularities are waived in the case of other holders. No tender will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither we, any of our affiliates or assigns, the exchange agent nor any other person will be under any duty to give any notification of any irregularities in tenders or incur any liability for failure to give any notification.

If any bondholder instruction form, endorsement, bond power, power of attorney, or any other required document is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and unless waived by us, evidence satisfactory to us, in our sole discretion, of that person's authority must be submitted.

Resales of Exchange Notes

We are making the exchange offer in reliance on the position of the staff of the Division of Corporation Finance of the SEC as defined in certain interpretive letters addressed to third parties in other transactions. However, we did not seek our own interpretive letter and we cannot assure that the staff of the Division of Corporation Finance of the SEC would make a similar determination with respect to the exchange offer as it has in other interpretive letters to third parties. Based on these interpretations by the staff of the Division of Corporation Finance of the SEC, and subject to the two immediately following sentences, we believe that exchange notes issued pursuant to this exchange offer in exchange for original notes may be offered for resale, resold and otherwise transferred by a holder thereof (other than a holder who is a broker-dealer) without further compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such exchange notes are acquired in the ordinary course of the holder's business and that the holder is not participating, and has no arrangement or understanding with any person to participate, in a distribution (within the meaning of the Securities Act) of the exchange notes.

However, any holder of original notes who is an "affiliate" of ours or who intends to participate in the exchange offer for the purpose of distributing exchange notes, or any broker-dealer who purchased original notes from us to resell pursuant to Rule 144A or any other available exemption under the Securities Act:

•: will not be able to rely on the interpretations of the staff of the Division of Corporation Finance of the SEC defined in the above-mentioned interpretive letters,
•: will not be permitted or entitled to tender such original notes in the exchange offer and
•: must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of such original notes unless such sale is made pursuant to an exemption from such requirements.

In addition, as described below, if any broker-dealer holds original notes acquired for its own account as a result of market-making or other trading activities and exchanges those original notes for exchange notes, then that broker-dealer must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of those exchange notes. Each holder of original notes who wishes to exchange original notes for exchange notes in the exchange offer will be required to represent that:

•: it is not an "affiliate" of ours,
•: any exchange notes to be received by it are being acquired in the ordinary course of its business,
•: it has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such exchange notes, and
•: if the tendering holder is not a broker-dealer, that holder is not engaged in, and does not intend to engage in, a distribution (within the meaning of the Securities Act) of its exchange notes.

In addition, we may require the holder, as a condition to that holder's eligibility to participate in the exchange offer, to furnish to us (or an agent of ours) in writing, information as to the number of

"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom that holder holds the original notes to be exchanged in the exchange offer.

Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it acquired the original notes for its own account as the result of market-making activities or other trading activities and must agree that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those exchange notes. The letter of transmittal states that by making that acknowledgement and delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Based on the position taken by the staff of the Division of Corporation Finance of the SEC in the interpretive letters referred to above, we believe that participating broker-dealers who acquired original notes for their own accounts as a result of market-making activities or other trading activities may fulfill their prospectus delivery requirements with respect to the exchange notes received upon exchange of original notes (other than original notes that represent an unsold allotment from the initial sale of the original notes) with a prospectus meeting the requirements of the Securities Act, which may be the prospectus prepared for this exchange offer so long as it contains a description of the plan of distribution regarding the resale of the exchange notes.

Accordingly, this prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer in connection with resales of exchange notes received in exchange for original notes where the original notes were acquired by the participating broker-dealer for its own account as a result of market-making or other trading activities. See "Plan of Distribution." Subject to certain provisions contained in the registration rights agreement, we have agreed that this prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer in connection with resales of exchange notes for a period not exceeding one year after the expiration date. However, a participating broker-dealer who intends to use this prospectus in connection with the resale of exchange notes received in exchange for original notes pursuant to the exchange offer must notify us on or before the Expiration Date that it is a participating broker-dealer. This notice may be given in the space provided for that purpose in the letter of transmittal or may be delivered to the exchange agent at one of the addresses set forth herein under "—Exchange Agent."

Any participating broker-dealer who is an "affiliate" of ours may not rely on these interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. In that regard, each participating broker-dealer who surrenders original notes in the exchange offer will be deemed to have agreed, by execution of the letter of transmittal or an agent's message, that upon receipt of notice from us of the occurrence of any event or the discovery of:

•: any fact that makes any statement contained or incorporated by reference in this prospectus untrue in any material respect, or
•: any fact that causes this prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference in this prospectus, in light of the circumstances under which they were made, not misleading, or
•: the occurrence of other events specified in the registration rights agreement,

that participating broker-dealer will suspend the sale of exchange notes under this prospectus until we have amended or supplemented this prospectus to correct the misstatement or omission and have furnished copies of the amended or supplemented prospectus to the participating broker-dealer, or we have given notice that the sale of the exchange notes may be resumed, as the case may be.

Withdrawal Rights

Except as otherwise provided in this prospectus, tenders of original notes may be withdrawn at any time on or before the Expiration Date. In order for a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission of the notice of withdrawal must be timely received by the exchange agent at its address listed under "—Exchange Agent" on or before the Expiration Date. Any notice of withdrawal must specify the name of the person who tendered the original notes to be withdrawn and the aggregate principal amount of original notes to be withdrawn.

The notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of original notes, in which case a notice of withdrawal will be effective if delivered to the exchange agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of original notes may not be rescinded. Original notes properly withdrawn will not be deemed validly tendered for purposes of the exchange offer, but may be retendered at any subsequent time on or before the Expiration Date by following any of the procedures described above under "—Procedures for Tendering Original Notes." All questions as to the validity, form and eligibility, including time of receipt, of withdrawal notices will be determined by us, in our sole discretion, and our determination will be final and binding on all parties. None of we, the exchange agent or any other person is under any duty to give any notification of any irregularities in any notice of withdrawal nor will those parties incur any liability for failure to give that notice. Any original notes that have been tendered but which are withdrawn will be credited to the holder promptly after withdrawal.

Interest on Exchange Notes

Interest on the exchange notes will accrue at the rate of 6.95% per annum and will be payable semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2002. We will make each interest payment to the persons in whose names the exchange notes are registered at the close of business on the 15th day immediately preceding the applicable interest payment date. The exchange notes will bear interest from and including the last interest payment date on the original notes, or if one has not yet occurred, the date of issuance of the original notes. Accordingly, holders of original notes that are accepted for exchange will not receive accrued but unpaid interest on original notes at the time of tender. Rather, that interest will be payable on the exchange notes delivered in exchange for the original notes on the first interest payment date after the Expiration Date.

Accounting Treatment

The exchange notes will be recorded at the same carrying value as the original notes for which they are exchanged, which is the aggregate principal amount of the original notes, as reflected in our accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized in connection with the exchange offer. The cost of the exchange offer will be amortized over the term of the exchange notes.

Exchange Agent

Wachovia Bank, National Association has been appointed exchange agent for the exchange offer. Delivery of the bondholders' instruction forms, letters of transmittal and any other required documents, questions, requests for assistance, and requests for additional copies of this prospectus or of the

bondholders' instruction form or letters of transmittal should be directed to the exchange agent as follows:

By Registered or Certified Mail:

Wachovia Bank, National Association
Exelon Generation Company, LLC
Corporate Actions Department
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28262
Attention: Marsha Rice

By Hand or Overnight Delivery Service:

Wachovia Bank, National Association
Exelon Generation Company, LLC
Corporate Actions Department
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28262
Attention: Marsha Rice

By Facsimile Transmission (for Eligible Institutions only):

Wachovia Bank, National Association
Attention: Marsha Rice
(704) 590-7628

Confirm by Telephone:

Wachovia Bank, National Association
Attention: Marsha Rice
(704) 590-7413

Delivery to other than the above addresses or facsimile number will not constitute a valid delivery.

Fees and Expenses

We have agreed to pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses. We will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus and related documents to the beneficial owners of original notes, and in handling or tendering for their customers. Holders who tender their original notes for exchange will not be obligated to pay any transfer taxes in connection with the transfer. If, however, exchange notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the original notes tendered, or if a transfer tax is imposed for any reason other than the exchange of original notes in connection with the exchange offer, then the amount of any such transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the exchanging holder's letter of instruction or the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. We will not make any payment to brokers, dealers or other nominees soliciting acceptances of the exchange offer.

DESCRIPTION OF THE EXCHANGE NOTES

General

We issued the original notes and will issue the exchange notes under the indenture dated as of June 1, 2001 (the "indenture") between us and Wachovia Bank, National Association, as trustee (the "trustee"). The indenture includes certain terms of the exchange notes and terms made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). You should refer to the indenture and the Trust Indenture Act for a statement of these terms. The indenture is governed by Pennsylvania law. As used herein, "notes" means original notes and exchange notes. The indenture provides for issuance from time to time of debt securities in series (including the notes) in an unlimited amount. We may issue additional securities under the indenture from time to time.

The following summary of selected provisions of the indenture is not complete. We recommend that you read the indenture, a copy of which may be obtained from the trustee. You can find the definitions of certain capitalized terms used in the following summary under the subheading "—Certain Definitions."

The exchange notes will be our unsecured obligations. They will rank equally in right of payment to all of our existing and future and unsecured and unsubordinated indebtedness. We have approximately $1.03 billion of indebtedness outstanding, all of which is senior unsecured debt. The exchange notes will rank junior to secured indebtedness to the extent of related collateral. We currently do not have any outstanding secured indebtedness.

Principal, Maturity and Interest

The exchange notes will be unlimited in aggregate principal amount. The exchange notes initially will be issued in an aggregate principal amount of $700,000,000. We may, without the consent of the holders of the exchange notes, create and issue additional notes ranking equally with the exchange notes and otherwise similar in all respects so that such additional notes will be consolidated and form a single series with the exchange notes. No additional notes can be issued if an event of default exists with respect to the exchange notes.

The exchange notes will mature on June 15, 2011. Interest will be payable on the exchange notes semiannually on June 15 and December 15 of each year, commencing on June 15, 2002 until the principal is paid or made available for payment. The exchange notes will bear interest from and including the last interest payment date on the original notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

For so long as the exchange notes are issued in book-entry form, payments of principal and interest will be made in immediately available funds by wire transfer to The Depository Trust Company ("DTC") or its nominee. If the exchange notes are issued in certificated form to a holder other than DTC, payments of principal and interest will be made by check mailed to the holder at the holder's registered address or, upon written application by a holder of $1,000,000 or more in aggregate principal amount of exchange notes to the trustee in accordance with the terms of the indenture, by wire transfer of immediately available funds to an account maintained by such holder with a bank or other financial institution. Payment of principal of the exchange notes will be made against surrender of such exchange notes at the office or agency of our company in New York, New York. Payment of interest on the exchange notes will be made to the person in whose name such exchange notes are registered at the close of business on the June 1 or December 1 immediately preceding the relevant interest payment date. Default interest will be paid in the same manner to holders as of a special record date established in accordance with the indenture.

All amounts paid by us for the payment of principal, premium (if any) or interest on any exchange notes that remain unclaimed at the end of two years after such payment has become due and payable will be repaid to us and the holders of such exchange notes will thereafter look only to us for payment thereof.

Redemption at Our Option

We may, at our option, redeem the exchange notes in whole or in part at any time at a redemption price equal to the greater of:

•: 100% of the principal amount of the exchange notes to be redeemed, plus accrued interest to the redemption date, or
•: as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the exchange notes to be redeemed (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate plus 25 basis points, plus accrued interest to the redemption date.

The redemption price will be calculated assuming a 360-day year consisting of twelve 30-day months.

We will mail notice of any redemption at least 30 days but not more than 60 days before the redemption date to each registered holder of the exchange notes to be redeemed.

Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the exchange notes or portions of the exchange notes called for redemption.

Certain Covenants

Mergers and Consolidations

We will not consolidate with or merge with or into any other person, or sell, convey, transfer or lease our properties and assets substantially as an entirety to any person, and we will not permit any person to consolidate with or merge with or into us, unless:

•: immediately prior to and immediately following the consolidation, merger, sale or lease, no event of default under the indenture has occurred and is continuing; and
•: we are the surviving or continuing corporation, or the surviving or continuing corporation or corporations that acquires by sale, conveyance, transfer or lease, is incorporated in the United States or under the laws of a foreign jurisdiction and consents to the jurisdiction of the courts of the United States and, in either case, expressly assumes the payment and performance of all of our obligations under the indenture and the exchange notes.

Limitation on Asset Sales

Except for the sale of our properties and assets substantially as an entirety as described in "Mergers and Consolidations" above, and other than assets required to be sold to conform with governmental regulations, we will not consummate any Asset Sale, if the aggregate net book value of all Asset Sales consummated since the date of issuance of the exchange notes would exceed 25% of our consolidated net tangible assets as of the beginning of our most recently ended full fiscal quarter; provided that any such Asset Sale will be disregarded for purposes of this 25% limitation if the proceeds thereof (1) are, within 12 months of such Asset Sale, invested or reinvested by us in new generation assets or (2) are used by us to repay our Indebtedness.

Limitation on Liens

We shall not issue, assume, guarantee or permit to exist any Indebtedness secured by any lien on any of our property, whether owned on the date that the exchange notes are issued or thereafter acquired without, in any such case, effectively securing the outstanding exchange notes (together with, if we shall so determine, any other Indebtedness of or guaranteed by us ranking equally with the original notes) equally and ratably with such Indebtedness (but only so long as such Indebtedness is so secured); provided, however, that the foregoing restriction does not apply to the following permitted liens:

(1): pledges or deposits in the ordinary course of business in connection with bids, tenders, contracts or statutory obligations or to secure surety or performance bonds;
(2): liens imposed by law, such as carriers', warehousemen's and mechanics' liens, arising in the ordinary course of business;
(3): liens for property taxes being contested in good faith;
(4): minor encumbrances, easements or reservations that do not in the aggregate materially adversely affect the value of the properties or impair their use;
(5): liens on property existing at the time of acquisition thereof by us, or to secure any indebtedness incurred by us prior to, at the time of, or within 90 days after the latest of the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operation of the property, which Indebtedness is incurred for the purpose of financing all or any part of the purchase price or construction or improvements;
(6): liens to secure purchase money Indebtedness not in excess of the cost or value of the property acquired;
(7): mortgages securing obligations issued by a state, territory or possession of the United States, or any political subdivision of any of the foregoing or the District of Columbia, to finance the acquisition or construction of property, and on which the interest is not, in the opinion of tax counsel of recognized standing or in accordance with a ruling issued by the Internal Revenue Service, includible in gross income of the holder by reason of Section 103(a)(1) of the Internal Revenue Code (or any successor to such provision) as in effect it the time of' the issuance of such obligations;
(8): other liens to secure Indebtedness so long as the amount of outstanding Indebtedness secured by liens pursuant to this clause (8) does not exceed 10% of our consolidated net tangible assets; and
(9): liens on the stock or assets of Sithe or any of its subsidiaries to secure Indebtedness incurred in connection with a transaction to acquire the remaining 50.1% equity interest in Sithe.

If we propose to pledge, mortgage or hypothecate any property, other than as permitted by clauses (1) through (9) of the previous paragraph, we must (prior thereto) give written notice thereof to the trustee, who must give notice to the holders, and we must, prior to or simultaneously with such pledge, mortgage or hypothecation, effectively secure, all the exchange notes equally and ratably with such Indebtedness. The indenture does not otherwise limit our Subsidiaries ability to issue, assume, guarantee or permit to exist any Indebtedness secured by any lien on any of such Subsidiary's property, whether owned on the date the exchange notes are issued or thereafter acquired, provided that such Indebtedness is limited in recourse only to such Subsidiary.

Restriction on Sales and Leasebacks

We may not enter into any sale and leaseback transaction with any subsidiary. In addition, we may not enter into any sale and leaseback transaction unless we comply with this restrictive covenant. A "sale and leaseback transaction" generally is an arrangement between us and a subsidiary, bank, insurance company or other lender or investor where we lease real or personal property which was or will be sold by us to that subsidiary, lender or investor.

We can comply with this restrictive covenant if we meet either of the following conditions:

•: the sale and leaseback transaction is entered into prior to, concurrently with or within 90 days after the acquisition, the completion or construction (including any improvements on an existing property) or the commencement of commercial operations of the property; or
•: we could otherwise grant a lien on the property as a permitted lien described in "—Limitations on Liens."

Events of Default

The following constitute events of default under the indenture:

(1): our default in the payment of all or any part of the principal of, or premium, if any, on, any of the exchange notes issued under the indenture as and when the same become due and payable either at maturity, upon any redemption, by declaration of acceleration or otherwise; or
(2): our default in the payment of any installment of interest on any of the exchange notes issued under the indenture as and when the same become due and payable, and continuance of such default for a period of 30 days; or
(3): an event of default, as defined in any of our instruments under which there may be issued, or by which there may be secured or evidenced, any Indebtedness of our company that results in the acceleration of such Indebtedness, or any default occurring in payment of any Indebtedness at final maturity (and after the expiration of any applicable grace periods), other than Indebtedness the principal of and interest on which does not individually, or in the aggregate, exceed $50,000,000; or
(4): our failure to perform or observe any covenant or agreement (while such covenant or agreement is effective) and the failure continues uncured for more than 30 days after we have actual knowledge of the failure; or
(5): one or more final judgments, decrees or orders of any court, tribunal, arbitrator, administrative or other governmental body or similar entity for the payment of money is rendered against us or any of our properties in an aggregate amount in excess of $50,000,000 (excluding the amount thereof covered by insurance) and the judgment, decree or order remains unvacated, undischarged and unstayed for more than 60 consecutive days, except while being contested in good faith by appropriate proceedings; or
(6): the occurrence of certain events of bankruptcy, insolvency or reorganization involving our company.

If an event of default (other than an event of default due to of our bankruptcy, insolvency or reorganization) occurs and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the notes outstanding under the indenture may, by written notice to us (and to the trustee if given by the holders), declare the principal of and accrued interest on all notes outstanding under the indenture to be immediately due and payable, but upon certain conditions such declaration may be annulled and past defaults (except, unless already cured, a default in payment of

principal, premium or interest) may be waived by the holders of a majority in aggregate principal amount of notes then outstanding under the indenture. If an event of default due to our bankruptcy, insolvency or reorganization occurs, all unpaid principal, premium, if any, and interest in respect of the notes outstanding under the indenture will automatically become due and payable without any declaration or other act on the part of the trustee or any holder.

The holders of a majority in principal amount of the notes then outstanding under the indenture shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture, subject to certain limitations specified in the indenture, provided that the holders offer to the trustee reasonable indemnity against expenses and liabilities.

Modification of Indenture

Under the indenture, our rights and obligations and the rights of the holders of any notes may be changed. Any change affecting the rights of the holders of any series of notes requires the consent of the holders of not less than a majority in aggregate principal amount of the outstanding notes of all series affected by the change, voting as one class. However, we cannot change the terms of payment of principal or interest, or a reduction in the percentage required for changes or a waiver of default with respect to any note unless all the holders consent. We may take other action that does not affect the rights of the holders by executing supplemental indentures without the consent of any noteholders.

Defeasance and Covenant Defeasance

Defeasance

The indenture provides that we will be deemed to have paid and will be discharged from any and all obligations in respect of notes issued under the indenture, on the 91st day after the deposit referred to below has been made, and the provisions of the indenture will cease to be applicable with respect to the notes (except for, among other matters, certain obligations to register the transfer of or exchange of the notes, to replace apparently mutilated, defaced, destroyed, lost or stolen notes, to maintain paying agencies and to hold funds for payment in trust) if:

(A) we have deposited with the trustee, in trust, money and/or U.S. Government Obligations (as defined in the indenture) that, through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of, premium, if any, and accrued interest on the notes, at the time such payments are due in accordance with the terms of the indenture;

(B) we have delivered to the trustee (1) an opinion of counsel to the effect that holders will not recognize income, gain or loss for federal income tax purposes as a result of our exercise of our option under the defeasance provisions of the indenture and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred, which opinion of counsel must be based upon a ruling of the Internal Revenue Service to the same effect or a change in applicable federal income tax law or related treasury regulations after the date of the indenture and (2) an opinion of counsel to the effect that the defeasance trust does not constitute an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and after the passage of 90 days following the deposit, the trust fund will not be subject to the effect of Section 547 of the U.S. Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;

(C) immediately after giving effect to such deposit, on a pro forma basis, no event of default, or event that after the giving of notice or lapse of time or both would become an event of default, has occurred and is continuing on the date of such deposit or during the period ending on the 91st day after the date of such deposit, and such deposit will not result in a breach or violation of, or

constitute a default under, any other agreement or instrument to which we are a party or by which we are bound; and

(D) if, at such time, the notes are listed on a national securities exchange, we have delivered to the trustee an opinion of counsel to the effect that the notes will not be delisted as a result of such deposit, defeasance and discharge.

Defeasance of Certain Covenants and Certain Events of Default

The indenture further provides that its provisions will cease to be applicable to (1) the covenants described under "Certain Covenants— Mergers and Consolidations," "—Limitations on Asset Sales," and "—Limitation on Liens" and (2) clause (4) under "Events of Default" with respect to such covenants and clauses (3) and (5) under "Events of Default" upon the deposit with the trustee, in trust, of money and/or U.S. Government Obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of, premium, if any, and accrued interest on the notes, the satisfaction of the conditions described in clauses (B)(2), (C) and (D) under "—Defeasance" above and the delivery by us to the trustee of an opinion of counsel to the effect that, among other things, the holders of the notes will not recognize income, gain or loss for federal income tax purposes as a result of the deposit and defeasance of certain covenants and events of default and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if the deposit and defeasance had not occurred.

Defeasance and Certain Other Events of Default

If we exercise our option to omit compliance with certain covenants and provisions of the indenture with respect to the notes as described in the immediately preceding paragraph and the notes are declared due and payable because of the occurrence of an event of default that remains applicable, the amount of money and/or U.S. Government Obligations on deposit with the trustee will be sufficient to pay amounts due on the original notes, at the time of their stated maturity, but may not be sufficient to pay amounts due on the notes at the time of acceleration resulting from such event of default. We will remain liable for such payments.

Concerning the Trustee

We and our affiliates use or will use some of the banking services of the trustee in the normal course of business.

Governing Law

The indenture and the notes will be governed by the laws of the Commonwealth of Pennsylvania.

Certain Definitions

Set forth below are definitions of some of the terms used in this prospectus.

"Adjusted Treasury Rate" means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the redemption date.

"Asset Sale" means any sale, lease, sale and leaseback transfer, conveyance or other disposition of any assets including by way of the issue by us or any of our Subsidiaries of equity interests in such Subsidiaries, except (1) in the ordinary course of business to the extent that such property is worn out or is no longer useful or necessary in connection with the operation of our business or sale inventory, (2) if, prior to such conveyance or disposition, each Rating Agency provides a ratings reaffirmation of the then existing rating of the exchange notes after giving effect to such Asset Sale or (3) the sale of the stock or assets of Sithe or any of its subsidiaries, as part of a sale and leaseback transaction or other financing involving the acquisition of the remaining 50.1% interest in Sithe.

"Business Day" means any day that is not a day on which banking institutions in New York City are authorized or required by law or regulation to close.

"Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the exchange notes that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the exchange notes.

"Comparable Treasury Price" means, with respect to any redemption date:

•: the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or
•: if the trustee obtains fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.

"Indebtedness" of any person means (1) all indebtedness of the person for borrowed money, (2) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (3) all obligations of such person to pay the deferred purchase price of property or services, (4) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even though the rights and remedies of the seller or lender under such agreement in the event of the default are limited to repossession or sale of such property), (5) all capital lease obligations of such person (excluding leases of property in the ordinary course of business), and (6) all Indebtedness of the type referred to in clauses (1) through (5) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien or security interest on property.

"Quotation Agent" means the Reference Treasury Dealer appointed by us.

"Rating Agencies" means Standard & Poor's Rating Services, Moody's Investors Services, Inc. and Fitch, Inc.

"Reference Treasury Dealer" means (1) each of Salomon Smith Barney Inc., Credit Suisse First Boston Corporation, Banc One Capital Markets, Inc. and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), in which case we will substitute another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by us.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding that redemption date.

"Subsidiary" means any corporation or other entity of which sufficient voting stock or other ownership or economic interests having ordinary voting power to elect a majority of the board of directors (or equivalent body) are at the time directly or indirectly held by us.

Concerning the Trustee

Wachovia Bank, National Association is the trustee under the indenture.

The indenture provides that, except during the continuance of an event of default thereunder, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an event of default, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any

holder of notes, unless the holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense. The trustee may resign at any time with respect to a series of securities by written notice in accordance with the indenture. In addition, the trustee may be removed upon the happening of certain events specified in the indenture. Following any resignation or removal of the trustee, our Board of Directors will promptly appoint a successor trustee with respect to the securities affected in accordance with the indenture.

Book-Entry, Delivery and Form

The certificates representing the exchange notes will be in fully registered, global form without interest coupons.

Ownership of beneficial interests in a global note will be limited to persons who have accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in a global note will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants).

So long as DTC or its nominee is the registered owner or holder of the global notes, DTC or such nominee, as the case may be, will be considered the sole record owner or holder of the exchange notes represented by such global notes for all purposes under the indenture. No beneficial owner of an interest in the global notes will be able to transfer that interest except in accordance with DTC's applicable procedures, in addition to those provided for under the indenture and, if applicable, Euroclear or Clearstream.

Payments of the principal of and interest on the global notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of us, the trustee, or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

We expect that DTC or its nominee, upon receipt of any payment of principal or interest in respect of the global notes, will credit participants, accounts with payments in amounts proportionate to their respective beneficial ownership interests in the principal amount of such global notes, as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in such global notes held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers.

Such payments will be the responsibility of such participants.

DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of the exchange notes. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ("indirect participants").

Neither the trustee nor we will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

If DTC is at any time unwilling or unable to continue as a depositary for the global notes and a successor depositary is not appointed within 90 days, we will issue definitive, certificated Senior Notes in exchange for the global notes.

Euroclear has advised us as follows: Euroclear was created in 1968 to hold securities for its participants and to clear and settle transactions between its participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries. Euroclear is operated by Euroclear Bank S.A./N.V. (the "Euroclear Operator"), under contract with Euroclear Clearance Systems, S.C., a Belgian cooperative corporation (the "Cooperative"). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries. Indirect access to Euroclear is also available to others that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

The Euroclear Operator was granted a banking license by the Belgian Banking and Finance Commission in 2000, authorizing it to carry out banking activities on a global basis. It took over operation of Euroclear from the Brussels, Belgium office of Morgan Guaranty Trust Company of New York on December 31, 2000.

Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the "Terms and Conditions"). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

Distributions with respect to exchange notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the Terms and Conditions, to the extent received by Euroclear.

Clearstream has advised us as follows: Clearstream is incorporated under the laws of The Grand Duchy of Luxembourg as a professional depositary. Clearstream holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream participants are financial institutions around the world, including securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to Clearstream is also available to others that clear through or maintain a custodial relationship with a Clearstream participant either directly or indirectly.

Distributions with respect to exchange notes held beneficially through Clearstream will be credited to cash accounts of Clearstream participants in accordance with its rules and procedures, to the extent received by Clearstream.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a summary of certain United States federal income tax consequences relevant to the acquisition, ownership and disposition of the exchange notes by the beneficial owners thereof ("Holders"). This discussion is limited to the tax consequences to the initial Holders of original notes who purchased the original notes at the issue price within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended (the "Code"), and does not address the tax consequences to subsequent purchasers of the original notes or the exchange notes. This summary does not purport to be a complete analysis of all of the potential United States federal income tax consequences relating to the purchase of the original notes or the exchange of original notes for exchange notes or the ownership and disposition of the Senior Notes, nor does this summary describe any federal estate or gift tax consequences.

There can be no assurance that the Internal Revenue Service ("IRS") will take a similar view of the tax consequences described herein. Furthermore, this discussion does not address all aspects of taxation that might be relevant to particular purchasers in light of their individual circumstances. For instance, this discussion does not address the alternative minimum tax provisions of the Code or special rules applicable to certain categories of purchasers (including dealers in securities or foreign currencies, insurance companies, regulated investment companies, financial institutions, tax-exempt entities, Holders whose functional currency is not the U.S. dollar and, except to the extent discussed below, Foreign Holders (as defined below)), or to purchasers who hold the notes as part of a hedge, straddle, conversion, constructive ownership or constructive sale transaction or other risk reduction transaction. This discussion is based on the provisions of the Code, the Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect as of the date hereof and all of which are subject to change (possibly on a retroactive basis). This discussion below assumes that the original notes (and the exchange notes) have been (and will be) held as capital assets within the meaning of Code Section 1221.

You are urged to consult your tax advisor as to the specific tax consequences of an exchange of the original notes for exchange notes in light of such investor's particular tax situation, including the application and effect of the Code, as well as state, local and foreign income tax, estate and gift tax and other tax laws .

Tax Consequences to United States Holders

The following summary is a general description of certain United States federal income tax consequences applicable to a "United States Holder." For the purpose of this discussion, the term "United States Holder" means a Holder of an original note or an exchange note that is for United States federal income tax purposes: (1) a citizen or resident of the United States, (2) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (3) an estate, the income of which is subject to United States federal income taxation regardless of its source, or (4) a trust, the administration of which is subject to the primary supervision of a court within the United States and which has one or more United States persons with authority to control all substantial decisions, or a trust that was in existence on August 20, 1996 and has elected to continue to be treated as a United States trust.

If a partnership (or an entity taxable as a partnership) holds the exchange notes, the United States federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If you are a partner in a partnership (or an entity taxable as a partnership) holding exchange notes, you should consult your tax advisor.

Exchange Offer

The exchange of an original note for an exchange note pursuant to the registered exchange offer generally will not be taxable to the exchanging Holder for United States federal income tax purposes. As a result, an exchanging Holder:

•: will not recognize any gain or loss on the exchange;
•: will have a holding period for the exchange note that includes the holding period for the original note exchanged therefor;
•: will have an initial adjusted tax basis in the exchange note equal to its adjusted tax basis in the original note exchanged therefor; and
•: will experience tax consequences upon a subsequent sale, exchange, redemption or retirement of an exchange note similar to the tax consequences upon a sale, exchange, redemption or retirement of an original note.

This exchange offer is not expected to result in any United States federal income tax consequences to a nonexchanging Holder.

Payments of Interest

Interest paid on the exchange notes will generally be taxable to a United States Holder as ordinary interest income at the time the interest accrues or is received in accordance with such Holder's method of accounting for United States federal income tax purposes.

Sale, Redemption, Retirement or Other Disposition of the Notes

In general, upon the sale, redemption, retirement or other taxable disposition of an exchange note, a United States Holder will recognize capital gain or loss equal to the difference between the amount realized on such sale, redemption, retirement or other disposition (not including any amount attributable to accrued but unpaid interest that the United States Holder has not already included in gross income) and such Holder's adjusted tax basis in the note. Any amount attributable to accrued but unpaid interest that the United States Holder has not already included in gross income will be treated as a payment of interest. See "Payments of Interest" above. A United States Holder's adjusted tax basis in a note generally will equal the cost of the original note, reduced by any principal payments received by such Holder and increased by any accrued but unpaid interest the Holder has included in income.

A noncorporate United States Holder generally will be subject to a maximum tax rate of 20% on net capital gains realized by the Holder on the disposition of capital assets (including the notes) held for more than one year. Capital losses realized by a Holder from the disposition of capital assets (including the notes) during any taxable year are, with minor exceptions, deductible only to the extent of capital gains realized in that taxable year or subsequent taxable years.

Tax Consequences to Foreign Holders

The following summary is a general description of certain United States federal income tax consequences to a "Foreign Holder" (which, for the purpose of this discussion, means a Holder that is not a United States Holder). Special rules not discussed in this summary may apply to certain Foreign Holders, including a "controlled foreign corporation," a "passive foreign investment company," an "expatriate," or a "foreign personal holding company." The following summary is subject to the discussion below concerning backup withholding.

Exchange Offer

A Foreign Holder will not recognize gain or loss from the exchange of an original note for an exchange note regardless of whether such Holder is otherwise subject to United States federal income tax with respect to income derived from an original note or an exchange note under the rules described below.

Payments of Interest

Assuming that a Foreign Holder's income from an exchange note is not "effectively connected" with the conduct by such Holder of a trade or business in the United States, payments of interest on an exchange note to a Foreign Holder will not be subject to United States federal income tax or withholding tax, provided that:

•: such Holder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote;
•: such Holder is not, for United States federal income tax purposes, a controlled foreign corporation related, directly or indirectly, to us through stock ownership;
•: such Holder is not a bank receiving interest described in Code Section 881(c)(3)(A); and
•: the certification requirements imposed under Code Section 871(h) or 881(c) (summarized below) are met.

Payments of interest on an exchange note that do not satisfy all of the foregoing requirements are generally subject to United States federal income tax withholding at a flat rate of 30% (or a lower applicable treaty rate, provided certain certification requirements are met).

Except to the extent otherwise provided under an applicable tax treaty, a Foreign Holder generally will be subject to United States federal income tax in the same manner as a United States Holder with respect to interest on an exchange note if such interest is effectively connected with the conduct of a United States trade or business by such Holder. Effectively connected interest income will not be subject to withholding tax if the Foreign Holder delivers an IRS Form W-8ECI to the paying agent. Effectively connected interest income received by a corporate Foreign Holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or lower treaty rate).

Sales, Exchange, Redemption or Retirement of an Exchange Note

In general, a Foreign Holder will not be subject to United States federal income tax or withholding tax on the receipt of payments of principal on an exchange note or on any gain recognized on the sale, redemption, retirement or other taxable disposition of an exchange note, unless:

•: such Foreign Holder is a nonresident alien individual who is present in the United States for 183 or more days during the taxable year of disposition and certain other conditions are met;
•: the Foreign Holder is required to pay tax pursuant to the provisions of United States tax law applicable to certain United States expatriates;
•: the gain is effectively connected with the conduct of a United States trade or business by the Foreign Holder;
•: the certification requirements imposed under Code Section 871(h) or 881(c) (summarized below) are not satisfied.

Certification Requirements

In order to obtain the exemption from U.S. federal income tax withholding described above, either (1) a Foreign Holder of an exchange note must provide a certificate containing its name and address, and certify, under penalties of perjury, to our paying agent that such Holder is a Foreign Holder, or (2) a securities clearing organization, bank or other financial institution that holds customer securities in the ordinary course of its trade or business (a "Financial Institution") that holds an exchange note on behalf of the Foreign Holder must (a) certify, under penalties of perjury, to our paying agent that the required certificate has been received from the Foreign Holder by it or by an intermediary Financial Institution and (b) furnish a copy of the certificates to our paying agent. A certificate described in this paragraph is effective only with respect to payments of interest made to the Foreign Holder after issuance of the certificate in the calendar year of its issuance and the two immediately succeeding calendar years. The foregoing certification may be provided by the Foreign Holder on IRS Form W-8BEN, W-8IMY or W-8EXP, as applicable.

Backup Withholding and Information Reporting

Backup withholding tax (presently imposed at the rate of 30%) and certain information reporting requirements apply to certain payments of principal and interest or the proceeds of sale made to certain Holders of exchange notes.

In the case of a noncorporate United States Holder, information reporting requirements will apply to payments of principal or interest made by our paying agent on an exchange note. The payor will be required to impose backup withholding tax if:

•: a Holder fails to furnish its Taxpayer Identification Number ("TIN") (which, for an individual, is the individual's Social Security number) to the payor in the manner required;
•: a Holder furnishes an incorrect TIN and the payor is so notified by the IRS;
•: the payor is notified by the IRS that such Holder has failed to properly report payments of interest or dividends; or
•: under certain circumstances, a Holder fails to certify, under penalties of perjury, that it has furnished a correct TIN and is not subject to backup withholding for failure to report interest or dividend payments.

Backup withholding and information reporting do not apply with respect to payments made to certain exempt recipients, including a corporation.

In the case of a Foreign Holder, backup withholding will not apply to payments of principal or interest made by our paying agent on an exchange note (absent actual knowledge that the Holder is actually a United States Holder) if the Foreign Holder has provided the required certification under penalties of perjury that it is not a United States Holder or has otherwise established an exemption from backup withholding. If the Foreign Holder provides the required certification, such Holder may nevertheless be subject to withholding of United States federal income tax as described above under "—Tax Consequences to Foreign Holders."

Credit for Withheld Taxes

Federal withholding tax is not an additional tax. Rather, any amount withheld from a payment to a Holder is generally allowed as a credit against such Holder's United States federal income tax liability and may entitle the Holder to a refund provided that certain required information is provided to the IRS.

PLAN OF DISTRIBUTION

We are making the exchange offer in reliance on the position of the staff of the Division of Corporation Finance of the SEC as defined in certain interpretive letters issued to third parties in other transactions.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where such original notes were acquired as a result of market-making activities or other trading activities. We have agreed that, starting on the Expiration Date and ending on the close of business one year after the Expiration Date, we will make this prospectus, as amended or supplemented, available to any broker-dealer that reasonably requests such document for use in connection with any such resale. Broker-dealers who acquired original notes directly from us may not rely on the staff's interpretations and must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as a selling security holder, in order to resell the original notes or the exchange notes.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices.

Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act.

The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

For a period of one year after the exchange offer has been completed, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such document in the letter of transmittal.

We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the original notes), other than commissions or concessions of any brokers or dealers, and will indemnify the holders of the exchange notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

By acceptance of this exchange offer, each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer agrees that, upon receipt of notice from us of the happening of any event which makes any statement in the prospectus untrue in any material respect or requires the making of any changes in the prospectus in order to make the statements therein not misleading (which notice we agree to deliver promptly to such broker-dealer), such broker-dealer will suspend use of the prospectus until we have amended or supplemented the prospectus to correct such misstatement or omission and have furnished copies of the amended or supplemental prospectus to such broker-dealer.

LEGAL OPINIONS

The validity of the exchange notes will be passed upon for us by Ballard Spahr Andrews & Ingersoll, LLP.

EXPERTS

The financial statements of Exelon Generation Company, LLC as of December 31, 2001 and 2000 and for each of the three years ended December 31, 2001 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers, LLP independent accountants, given on the authority of said firm as experts in auditing and accounting.

Table of Contents

		Page(s)
Report of Independent Accountants		F-2
Consolidated Financial Statements:
	Statements of Income	F-3
	Statements of Cash Flows	F-4
	Balance Sheets	F-5
	Statements of Changes in Divisional/Member's Equity	F-6
	Statements of Other Comprehensive Income	F-7
	Notes to Consolidated Financial Statements	F-8 - 39

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Member and Board of Directorse
of Exelon Generation Company LLC

In our opinion, the accompanying consolidated balance sheets and related consolidated statements of income, cash flows, changes in divisional/member's equity and comprehensive income present fairly, in all material respects, the financial position of Exelon Generation Company, LLC and Subsidiary Companies (Exelon Generation) at December 31, 2001 and December 31, 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Exelon Generation's management; our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 3 to the consolidated financial statements, Exelon Generation's parent company, Exelon Corporation, acquired Unicom Corporation on October 20, 2000 in a business combination accounted for under the purchase method of accounting. The results of the acquired generation-related business are included in the consolidated financial statements of Exelon Generation since the acquisition date.

As discussed in Note 1, Exelon Generation changed its method of accounting for derivative instruments and hedging activities effective January 1, 2001.

PricewaterhouseCoopers LLP

March 1, 2002
Philadelphia, PA

F-2

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Millions)

			For the Years Ended December 31,
			2001			2000			1999
Operating revenues:
	Operating revenues		$	2,946		$	1,723		$	1,584
	Operating revenues—affiliates			4,102			1,551			841

		Total operating revenues		7,048			3,274			2,425

Operating expenses:
	Fuel and purchased power			4,093			1,845			1,205
	Purchased power—affiliates			125			1			—
	Operating and maintenance			1,338			754			658
	Operating and maintenance—affiliates			189			46			100
	Depreciation and decommissioning			282			123			125
	Taxes other than income			149			64			37

		Total operating expenses		6,176			2,833			2,125

Operating income				872			441			300

Other income and deductions:
	Interest expense			(115	)		(41	)		(12	)
	Equity in earnings of unconsolidated affiliates			90			4			—
	Other, net			(8	)		16			41

		Total other income and deductions		(33	)		(21	)		29

Income before income taxes and cumulative effect of a change in accounting principle				839			420			329
Income taxes				327			160			125

Income before cumulative effect of a change in accounting principle				512			260			204
Cumulative effect of a change in accounting principle (net of income taxes of $7)				12			—			—

		Net income	$	524		$	260		$	204

F-3

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Millions)

				For the Years Ended December 31,
				2001			2000			1999
Cash flows from operating activities:
	Net income			$	524		$	260		$	204
	Adjustments to reconcile net income to net cash flows provided by operating activities:
		Depreciation and decommissioning (including amortization of nuclear fuel)			674			289			270
		Provision for uncollectible accounts			15			2			—
		Allowance for obsolete inventory			11			1			—
		Cumulative effect of a change in accounting principle (net of income taxes)			(12	)		—			—
		Deferred income taxes			33			(47	)		23
		Amortization of investment tax credit			(8	)		(13	)		(12	)
		Earnings from equity investments			(90	)		(4	)		—
		Net realized losses on decommissioning trust funds			127			—			—
		Unrealized gains on derivative financial instruments			(30	)		—			—
		Interest expense on spent nuclear fuel obligation			33			10			—
		Expense in contributions to long term incentive plan			—			44			—
		Other operating activities			(6	)		(4	)		22
	Changes in working capital:
		Accounts receivable			127			(158	)		(54	)
		Accounts receivable from affiliates			104			(342	)		(66	)
		Accounts payable to affiliates			(99	)		99			—
		Inventories			(22	)		(58	)		(5	)
		Accounts payable			(101	)		91			(70	)
		Accrued expenses			61			286			114
		Other current assets			2			37			(7	)
		Other current liabilities			(12	)		(17	)		10

			Net cash provided by operating activities		1,331			476			429

Cash flows from investing activities:
	Investment in nuclear fuel				(336	)		(112	)		(95	)
	Investment in plant				(515	)		(214	)		(253	)
	Investment in AmerGen Energy, LLC				—			—			(39	)
	Investment in Sithe Energies, Inc.				—			(704	)		—
	Change in long-term receivable, affiliate				72			1			—
	Proceeds from nuclear decommissioning trust funds				1,624			265			69
	Investment in nuclear decommissioning trust funds				(1,863	)		(380	)		(95	)
	Other investment activity				(92	)		(20	)		(18	)

			Net cash used in investing activities		(1,110	)		(1,164	)		(431	)

Cash flows from financing activities:
	Change in note payable, member				(696	)		696			—
	Issuance of long-term debt, net of issuance costs				820			—			6
	Retirement of long-term debt				(4	)		(4	)		(4	)
	Distributions to member				(121	)		—			—

			Net cash (used in) provided by financing activities		(1	)		692			2

Increase in cash and cash equivalents					220			4			—
Cash and cash equivalents at beginning of period					4			—			—

Cash and cash equivalents at end of period				$	224		$	4		$	—

F-4

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)

				December 31,
				2001		2000
Assets
Current assets:
	Cash and cash equivalents			$	224	$	4
	Accounts receivable, net
		Customer			316		316
		Other			165		198
		Affiliates			327		941
	Inventories, net, at average cost:
		Fossil fuel			105		93
		Materials and supplies			202		203
	Other				65		38

	Total current assets				1,404		1,793
Property, plant and equipment, net					1,160		831
Nuclear fuel, net					843		896
Deferred debits and other assets:
	Deferred income taxes, net				297		337
	Nuclear decommissioning trust funds				3,165		3,127
	Investments				859		762
	Receivables from affiliate				291		363
	Other				223		153

		Total deferred debits and other assets			4,835		4,742

Total assets				$	8,242	$	8,262

Liabilities and Divisional/Member's Equity
Current liabilities:
	Note payable to parent			$	—	$	696
	Payable to affiliate				—		99
	Long-term debt due within one year				4		4
	Accounts payable				588		618
	Accrued expenses				303		576
	Deferred income taxes				7		—
	Other				171		183

		Total current liabilities			1,073		2,176
Long-term debt					1,021		205
Deferred credits and other liabilities:
	Unamortized investment tax credits				234		242
	Nuclear decommissioning liability for retired plants				1,353		1,301
	Pension obligations				118		172
	Non-pension postretirement benefits obligation				384		377
	Spent nuclear fuel obligation				843		810
	Other				280		369

			Total deferred credits and other liabilities		3,212		3,271

Commitments and contingencies (See Note 11)					—		—
Divisional equity					—		2,610
Member's equity:
	Membership interest				2,315
	Undistributed earnings				524
	Accumulated other comprehensive income				97		—

			Total divisional/member's equity		2,936		2,610

Total liabilities and divisional/member's equity				$	8,242	$	8,262

The accompanying notes are an integral part of these consolidated financial statements.

F-5

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN DIVISIONAL/MEMBER'S EQUITY

(Dollars in Millions)

		Divisional Equity			Membership Interest			Undistributed Earnings		Accumulated Other Comprehensive Income			Total Divisional/ Member's Equity
Balance, January 1, 1999		$	746		$	—		$	—	$	—		$	746
	Net income		204											204

Balance, December 31, 1999			950											950

	Net income		260											260
	Contribution of net assets as a result of merger with Unicom		1,400											1,400

Balance, December 31, 2000			2,610											2,610

	Formation of LLC		(2,610	)		2,610								—
	Non-cash distribution to member					(174	)							(174	)
	Net income								524					524
	Distribution to member					(121	)							(121	)
	Reclassified net unrealized losses on marketable securities, net of income taxes of $22										(23	)		(23	)
	Comprehensive income, net of income tax benefit of $171										120			120

Balance, December 31, 2001		$	—		$	2,315		$	524	$	97		$	2,936

The accompanying notes are an integral part of these consolidated financial statements.

F-6

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Millions)

		For the Years Ended December 31
		2001			2000		1999
Net income		$	524		$	260	$	204

Other comprehensive income:
	SFAS 133 transitional adjustment, net of income taxes of $3		5
	Net unrealized gains on nuclear decommissioning trust funds, net of income taxes of $138		69
	Cash flow hedge fair value adjustment, net of income taxes of $29		48
	Realized loss on forward starting interest rate swap net of income taxes of $1		(2	)

Total other comprehensive income			120			—		—

Total comprehensive income		$	644		$	260	$	204

The accompanying notes are an integral part of these consolidated financial statements.

F-7

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Millions, unless otherwise noted)

1. Summary of Significant Accounting Policies

Description of Business

Exelon Generation Company, LLC ("Exelon Generation") is a limited liability company engaged principally in the production and wholesale marketing of electricity in various regions of the United States. In 2001, the Company also began trading activities. Exelon Generation is wholly owned by Exelon Corporation (Exelon). In connection with the restructuring by Exelon to separate the regulated energy delivery business of its subsidiaries Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO) from its unregulated businesses, including its generation business, Exelon Generation began operations as a separate indirect subsidiary of Exelon effective January 1, 2001. Exelon Generation has numerous wholly owned subsidiaries. These subsidiaries were primarily established to hold certain hydro electric and peaking unit facilities as well as the 49.9% interest in Sithe Energies, Inc. ("Sithe") and 20.99% investment in Keystone Fuels, LLC. In addition, Exelon Generation also has a finance company subsidiary, Exelon Generation Finance Company, LLC, which provides certain financing for Exelon Generation's other subsidiaries. Exelon Generation also owns a 50% investment in AmerGen Energy Company, LLC (AmerGen).

Basis of Presentation

The consolidated financial statements include the accounts of all majority-owned subsidiaries of Exelon Generation after the elimination of intercompany accounts and transactions. Exelon Generation consolidates its proportionate interest in jointly owned electric utility plants. Exelon Generation accounts for its investments in 20% to 50% owned entities under the equity method of accounting.

The consolidated financial statements of Exelon Generation as of December 31, 2000 and for the years ended December 31, 2000 and 1999 present the financial position, results of operations and net cash flows of the generation-related business of Exelon prior to its corporate restructuring on January 1, 2001. Exelon Generation operated as a separate business subsequent to electric-industry restructuring in Pennsylvania effective January 1, 1999. Prior to that date, Exelon (and its predecessor, PECO Energy Company) operated as a fully integrated electric and gas utility, and revenues and expenses were not separately identified in the accounting records. The consolidated financial statements are not necessarily indicative of the financial position, results of operations or net cash flows that would have resulted had the generation-related business been a separate entity during the periods presented. For periods prior to the restructuring, references to Exelon Generation mean the generation-related business of Exelon Corporation.

Certain information in these consolidated financial statements relating to the results of operations and financial condition of Exelon Generation for periods prior to Exelon's restructuring was derived from the historical financial statements of Exelon. Various allocation methodologies were employed to separate the results of operations and financial condition of the generation-related portion of Exelon's business from the historical financial statements for the periods presented prior to the restructuring. Revenues include the generation component of revenue from Exelon's operations and any generation-related revenues, such as ancillary services and wholesale energy activity. Expenses including fuel and other energy-related costs, including purchased power, operations and maintenance and depreciation and amortization, as well as assets, such as property, plant and equipment, materials and supplies and fuel, were specifically identified for Exelon Generation's operations. Various allocations were used to

F-8

disaggregate other common expenses, assets and liabilities between Exelon Generation and Exelon's other businesses, primarily the regulated transmission and distribution operations.

Management believes that these allocation methodologies are reasonable; however, had Exelon Generation existed as a separate company prior to January 1, 2001, its results could have significantly differed from those presented herein. In addition, future results of operations, financial position and net cash flows could materially differ from the historical results presented.

Segment Information

Exelon Generation operates in one business comprising its generation and marketing of energy and energy-related products in the United States.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates have been made in the accounting for derivatives, nuclear decommissioning liabilities and estimated service lives for plant.

Revenue Recognition

Operating revenues are generally recorded as service is rendered or energy is delivered to customers. At the end of each month, Exelon Generation accrues an estimate for unbilled energy provided to its customers. Premiums received and paid on option contracts and swap arrangements are amortized to revenue and expense over the life of the contracts. Certain of these contracts are considered derivative instruments and are recorded at fair value with subsequent changes in fair value recognized as revenues and expenses unless hedge accounting is applied.

Commodity derivatives used for trading purposes are accounted for using the mark-to-market method. Under this methodology, these derivatives are adjusted to fair value, and the unrealized gains and losses are recognized in current period income.

Nuclear Fuel

The cost of nuclear fuel is capitalized and charged to fuel expense using the units of production method. Estimated costs of nuclear fuel storage and disposal at operating plants are charged to expense as the related fuel is consumed.

Emission Allowances

Emission allowances are included in deferred debits and other assets and are carried at acquisition cost and charged to fuel expense as they are used in operations. Allowances held can be used from years 2002 to 2028.

F-9

Depreciation and Decommissioning

Depreciation is provided over the estimated useful service lives of the property, plant and equipment on a straight-line basis. Nuclear power stations operate under licenses granted by the Nuclear Regulatory Commission ("NRC".) Operating licenses for Exelon Generation's operating plants are for 40 years. Exelon Generation has or intends to request 20 year extensions of these operating licenses. If not extended, nuclear plant service lives would be limited by the expiration of the licenses.

The average estimated useful service lives currently being applied to determine depreciation and decommissioning expense of property, plant and equipment by type of asset are as follows:

Nuclear		60 years
Fossil		40 years
Hydro		100 years
Other		5-50 years

Exelon Generation's current estimate of the costs for decommissioning its ownership share of its nuclear generation stations is charged to operations over the expected service life of the plant. Exelon Generation's affiliates PECO and ComEd are currently recovering costs for the decommissioning of nuclear generating stations through regulated customer rates. Amounts collected for decommissioning by Exelon Generation's affiliates are remitted to Exelon Generation and are deposited in trust accounts and invested for the funding of future decommissioning costs. Exelon Generation accounts for the current period's cost of decommissioning related to generation plants previously owned by PECO by recording a charge to depreciation and decommissioning expense and a corresponding liability in accumulated depreciation concurrently with decommissioning collections.

For Exelon Generation's active nuclear generating stations previously owned by ComEd, annual decommissioning expense is based on an annual assessment of the difference between the current cost of decommissioning estimate and the decommissioning liability recorded in accumulated depreciation. The difference is amortized to depreciation and decommissioning expense on a straight-line basis over the remaining lives of the operating plants with the corresponding offset to accumulated depreciation. The current decommissioning cost estimate (adjusted annually to reflect inflation), for the former ComEd retired units recorded in deferred credits and other liabilities is accreted to depreciation and decommissioning expense. Exelon Generation believes that the amounts being recovered by ComEd and PECO from their customers through electric rates along with the earnings on the trust funds will be sufficient to fully fund its decommissioning obligations.

Research and Development

Research and development costs are charged to expense as incurred.

Capitalized Interest

Exelon Generation capitalizes the costs during construction of debt funds used to finance its construction projects. Exelon Generation recorded capitalized interest of $17 million, $2 million and $6 million in 2001, 2000 and 1999, respectively.

F-10

Income Taxes

As part of Exelon's consolidated group, Exelon Generation files a consolidated Federal income tax return with Exelon. Income taxes are allocated to each of Exelon subsidiaries within the consolidated group, including Exelon Generation, based on the separate return method.

Deferred Federal and state income taxes are provided on all temporary differences between book bases and tax bases of assets and liabilities. Investment tax credits previously used for income tax purposes have been deferred on Exelon Generation's consolidated balance sheet and are recognized in income over the life of the related property.

Cash and Cash Equivalents

Exelon Generation considers all temporary cash investments purchased with an original maturity of three months or less to be cash equivalents.

Marketable Securities

Marketable securities are classified as available-for-sale securities and are reported at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income. The cost of these securities is determined on the basis of specific identification. At December 31, 2001 and 2000, Exelon Generation had no held-to-maturity or trading securities.

Unrealized gains and losses on marketable securities held in the nuclear decommissioning trust funds associated with the former PECO plants are reported in accumulated depreciation. Unrealized gains and losses on marketable securities held in the nuclear decommissioning trust funds associated with the former ComEd plants are reported in accumulated other comprehensive income.

Inventories

Inventories, which consist primarily of fuel and materials and supplies, are valued at the lower of cost or market and are stated on the average cost method.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Exelon Generation evaluates the carrying value of property, plant and equipment and other long-term assets based upon current and anticipated undiscounted cash flows, and recognizes an impairment when it is probable that such estimated cash flows will be less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value. The cost of maintenance, repairs and minor replacements of property are charged to maintenance expense as incurred. The cost and accumulated depreciation of property, plant and equipment retired or otherwise disposed of are removed from the related accounts and included in the determination of the gain or loss on disposition.

Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from investments by and distributions to the member. Comprehensive income primarily relates to unrealized

F-11

gains or losses on securities held in nuclear decommissioning trust funds and unrealized gains and losses on cash flow hedge instruments.

Derivative Financial Instruments

Subsequent to January 1, 2001, Exelon Generation accounts for derivative financial instruments under SFAS No. 133 "Accounting for Derivatives and Hedging Activities" (SFAS No. 133). Under the provisions of SFAS No. 133, all derivatives are recognized on the balance sheet at their fair value unless they qualify for a normal purchases or normal sales exception. Derivative financial instruments are recorded as other assets and liabilities in the consolidated balance sheet and classified as current or non-current based on the maturity date. Changes in the fair value of the derivative financial instruments are recognized in earnings unless specific hedge accounting criteria are met. A derivative financial instrument can be designated as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge), or a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge).

Changes in the fair value of a derivative that is highly effective as, and is designated and qualifies as, a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in earnings. Changes in the fair value of a derivative that is highly effective as, and is designated as and qualifies as a cash flow hedge are recorded in other comprehensive income, until earnings are affected by the variability of cash flows being hedged.

Pursuant to Exelon's Risk Management Policy (RMP), Exelon Generation uses derivatives to manage the utilization of its available generating capability and provisions of wholesale energy to its affiliates. Exelon Generation also utilizes energy option contracts and energy financial swap arrangements to limit the market price risk associated with forward energy commodity contracts. Exelon Generation enters into certain energy related derivatives for trading or speculative purposes. Exelon Generation may also enter into derivatives to manage its exposure to fluctuation in interest rates related to its variable rate debt instruments, changes in interest rates related to planned future debt issuances prior to their actual issuance and changes in the fair value of outstanding debt which is planned for early retirement. As part of Exelon Generation's energy marketing business, Exelon Generation enters into contracts to buy and sell energy to meet the requirements of its customers. These contracts include short-term and long-term commitments to purchase and sell energy and energy related products in the retail and wholesale markets with the intent and ability to deliver or take delivery. While these contracts are considered derivative financial instruments under SFAS No. 133, the majority of these transactions have been designated as "normal purchases" and "normal sales" and are not subject to the provisions of SFAS No. 133. Normal purchases and normal sales are contracts where physical delivery is probable, quantities are expected to be used or sold in the normal course of business over a reasonable period of time, and price is not tied to an unrelated underlying derivative. Under these contracts Exelon Generation recognizes gains or losses when the underlying physical transaction occurs. Revenues and expenses associated with market price risk management contracts are amortized over the terms of such contracts. The remainder of these contracts are generally considered cash flow hedges under SFAS No. 133.

F-12

Additionally, during 2001, as part of the creation of Exelon Generation's energy trading operation, Exelon Generation began to enter into contracts to buy and sell energy for trading purposes, subject to limits. These contracts are recognized on the balance sheet at fair value and changes in the fair value of these derivative financial instruments are recognized in earnings.

Prior to the adoption of SFAS No. 133, Exelon Generation applied hedge accounting only if the derivative reduced the risk of the underlying hedged item and was designated at the inception of the hedge, with respect to the hedged item. Exelon Generation recognized any gains or losses on these derivatives when the underlying physical transaction affected earnings.

Contracts entered into by Exelon Generation to limit market risk associated with forward energy commodity contracts are reflected in the financial statements at the lower or cost or market using the accrual method of accounting. Under these contracts Exelon Generation recognizes any gains or losses when the underlying physical transaction affects earnings. Revenues and expenses associated with market price risk management contracts were amortized over the terms of such contracts.

Recently Issued Accounting Standards

During 2001, the FASB issued SFAS No. 141, "Business Combinations" (SFAS No. 141), No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142), No. 143, "Asset Retirement Obligations" (SFAS No. 143) and No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144).

SFAS No. 141 requires that all business combinations be accounted for under the purchase method of accounting and establishes criteria for the separate recognition of intangible assets acquired in business combinations. SFAS No. 141 is effective for business combinations initiated after June 30, 2001. In addition, SFAS No. 141 requires that unamortized negative goodwill related to pre-July 1, 2001 purchase be allocated as a pro-rata reduction of the amounts that otherwise would have been assigned to the acquired assets. If any excess remains, that remaining excess is to be recognized as an extraordinary gain concurrent with the adoption of SFAS No. 142. Included on AmerGen's balance sheet is $43 million of negative goodwill net of accumulated amortization. Upon AmerGen's adoption of SFAS No. 141 in the first quarter of 2002. Exelon Generation expects to recognize its appropriate share of approximately $22 million, pre-tax, as a cumulative effect of a change in accounting principle.

SFAS No. 142 establishes new accounting and reporting standards for goodwill and intangible assets. Exelon Generation adopted SFAS No. 142 as of January 1, 2002. Under SFAS No. 142, goodwill will no longer be subject to amortization. After January 1, 2002, goodwill will be subject to an assessment for impairment using a fair value based test at least annually, or more frequently if events or circumstances indicate that goodwill might be impaired. An impairment loss would be reported as a reduction to goodwill and a charge to operating expense, except at the transition date, when the loss would be reflected as a cumulative effect of a change in accounting principle. As of December 31, 2001, Exelon Generation has no goodwill recorded on its consolidated balance sheet.

SFAS No. 143 provides accounting requirements for retirement obligations associated with tangible long-lived assets. Exelon Generation expects to adopt SFAS No. 143 on January 1, 2003. Retirement obligations associated with long-lived assets included within the scope of SFAS No. 143 are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract

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or by legal construction under the doctrine of promissory estoppel. Adoption of SFAS No. 143 will change the accounting for the decommissioning of Exelon Generation's nuclear generating plants. Currently, Exelon Generation records the obligation for decommissioning ratably over the lives of the plants. The January 1, 2003 adoption of SFAS No. 143 will require a cumulative effect adjustment effective the date of adoption to adjust plant assets and decommissioning liabilities to the values they would have been had this standard been employed from the in-service dates of the plants. The effect of this cumulative adjustment will be to increase the decommissioning liability to reflect a full decommissioning obligation in current year dollars. Additionally, the SFAS No. 143 standard will require the accrual of an asset, to the extent allowable under the standard, related to the full amount of the decommissioning obligation, which will be amortized over the remaining lives of the plants. The net difference between the asset recognized and the liability recorded upon adoption of the standard will be charged to earnings and recognized as a cumulative effect, net of expected regulatory recovery. The decommissioning liability to be recorded represents an obligation for the future decommissioning of the plants, and as a result interest expense will be accrued on this liability until such time as the obligation is satisfied.

Exelon Generation is in the process of evaluating the impact of SFAS No. 143 on its financial statements, and cannot determine the ultimate impact of adoption at this time, however the cumulative effect could be material to Exelon's earnings. Additionally, although over the life of the plant the charges to earnings for the depreciation of the asset and the interest on the liability will be equal to the amounts currently recognized as decommissioning expense, the timing of those charges will change and in the near-term period subsequent to adoption, the depreciation of the asset and the interest on the liability could result in a significant increase in expense.

SFAS No. 144 establishes accounting and reporting standards for both the impairment and disposal of long-lived assets. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and provisions of SFAS No. 144 are generally applied prospectively. Exelon Generation is in the process of evaluating the impact of SFAS No. 144 on its financial.

2. Merger

On October 20, 2000 Exelon became the parent corporation for PECO and ComEd as a result of the completion of the transactions contemplated by the Agreement and Plan of Exchange and Merger, as amended (Merger Agreement) among PECO, Unicom Corporation and Exelon. The Merger was accounted for using the purchase method of accounting, with PECO as acquirer.

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The fair value of the assets acquired and liabilities assumed in the merger associated with the generation-related business of ComEd are summarized below:

Current assets	$	704
Property, plant and equipment		64
Nuclear fuel		669
Deferred debits and other assets		3,683

		5,120
Current liabilities		634
Deferred credits and other liabilities		3,086

		3,720

Net generation-related assets	$	1,400

Exelon Generation has included the generation-related assets and liabilities of ComEd and the related results of operations in its consolidated financial statements beginning October 20, 2000. Exelon Generation's Statement of Changes in Member's Equity reflects the generation-related impacts of the Merger as a capital contribution from Exelon.

3. Corporate Restructuring

During January 2001, Exelon undertook a corporate restructuring to separate its generation and other competitive businesses from its regulated energy delivery businesses conducted by ComEd and PECO. As part of the restructuring, the generation-related operations, employees, assets, liabilities, and certain commitments of Exelon Corporation were transferred to Exelon Generation.

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The assets and liabilities transferred to Exelon Generation as of January 1, 2001 were as follows:

Assets
Current assets		$	1,285
Property, plant and equipment			831
Nuclear fuel			896
Nuclear decommissioning trust funds			3,127
Investments			762
Deferred income taxes			337
Note receivable from affiliate			363
Other noncurrent assets			153

	Total assets transferred		7,754

Liabilities
Note payable to member			696
Current liabilities			1,146
Long-term debt			205
Decommissioning obligation for retired plants			1,301
Other noncurrent liabilities			1,970

	Total liabilities transferred		5,318

	Net assets transferred	$	2,436

On January 1, 2001, a non-cash distribution of $174 million was made in connection with the elimination of certain intercompany transactions.

In connection with the restructuring, ComEd and PECO also assigned their respective rights and obligations under various power purchase and fuel supply agreements to Exelon Generation. Additionally, Exelon Generation entered into power purchase agreements ("PPAs") to supply the capacity and energy requirements of ComEd and PECO.

4. Equity Investments

Sithe Energies, Inc.

On December 18, 2000, Exelon Generation acquired 49.9% of the outstanding common stock of Sithe for $696 million in cash and $8 million of acquisition costs. Sithe, headquartered in New York, is a leading independent power producer, with ownership interests in 27 facilities in North America. Sithe has net generation capacity of 3,371 MW, primarily in New York and Massachusetts, 2,651 MW under construction and 2,400 MW in advanced development.

Beginning December 18, 2002, Exelon Generation will have the right to purchase all (but not less than all) of the remaining outstanding shares of the Sithe common stock. The option expires on December 18, 2005. In addition, each of Sithe's other stockholder groups will have the right to require us to purchase all (but not less than all) of its shares during the same period in which Exelon Generation can exercise its option. At the end of that period, if no stockholder has exercised its option,

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Exelon Generation will have a one-time option to purchase shares from the other stockholders to bring its holdings to 50.1% of the total outstanding shares. If Exelon Generation exercise its option or if all the stockholder groups exercise their put rights, the purchase price for 70% of the remaining 50.1% of the Sithe stock will be set at a fair market value plus a 10% premium in the case of a call or 10% discount in the case of a put, subject to a floor of $430 million and a ceiling of $650 million, and the remaining portion will be valued at fair market value, subject to a floor price of $141 million and a ceiling price of $330 million, plus, in each case, interest accrued from the beginning of the exercise period.

If Exelon Generation increases its ownership in Sithe to 50.1% or more, Sithe will become a consolidated subsidiary and Exelon Generation's financial results will include Sithe's financial results from the date of purchase. At December 31, 2001, Sithe had total assets of $4.2 billion and long-term debt of $2.3 billion, including $2.1 billion of non-recourse project debt, and excluding any non-recourse project debt associated with Sithe's equity investments. For the year ended December 31, 2001 Sithe had revenues of approximately $1 billion. In December 2001, Sithe entered into a new 18-month corporate credit facility for $500 million expiring in June 2003. As of December 31, 2001 Sithe had drawn approximately $176 million under this facility and extended approximately $161 million in letters of credit.

Exelon Generation's investment in Sithe as of December 31, 2001 and 2000 was $725 million and $704 million, respectively.

AmerGen Energy Company, LLC

Exelon Generation and British Energy, Inc, a wholly owned subsidiary of British Energy, plc, each own a 50% equity interest in AmerGen Energy Company, LLC (AmerGen). Established in 1997, AmerGen was formed to pursue opportunities to acquire and operate nuclear generation facilities in the North America. Currently, AmerGen owns and operates three nuclear generation facilities: Clinton Power Station (Clinton) located in Illinois, Three Mile Island (TMI) Unit 1 located in Pennsylvania, and Oyster Creek, which was acquired in August 2000, located in New Jersey. Oyster Creek was acquired from GPU, Inc. (GPU) for $10 million. Under the terms of the purchase agreement, GPU agreed to fund outage cots of $89 million, including the cost of fuel, for a refueling outage that occurred in 2000. AmerGen is repaying these costs to GPU in equal annual installments through 2009. In addition, AmerGen assumed full responsibility for the ultimate decommissioning of Oyster Creek. At the closing of the sale, GPU provided funding for the decommissioning trust of $440 million. In conjunction with this acquisition, AmerGen has received a fully funded decommissioning trust fund which has been computed assuming the anticipated costs to appropriately decommission Oyster Creek discounted to net present value using the NRC's mandated rate of 2%. As part of each acquisition, AmerGen entered into a power sales agreement with the seller. The agreement with the seller for Clinton calls for Exelon Generation to sell 75% of the output back to Illinois Power for a term expiring at the end of 2005. The agreements with the seller of TMI and Oyster Creek are for all of the output expiring in 2001 and 2003, respectively.

AmerGen maintains a nuclear decommissioning trust fund for each of its plants in accordance with NRC regulations and believes that amounts in these trust funds, together with the investment earnings

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thereon and additional contributions for Clinton from Illinois Power, will be sufficient to meet its decommissioning obligations.

Exelon Generation's investment in AmerGen as of December 31, 2001 and 2000 was $113 million and $44 million, respectively.

The table below presents summarized financial information for Sithe and AmerGen, Exelon Generation's unconsolidated equity affiliates:

	Year Ended December 31,
Income Statement Information	Year Ended December 31,
Income Statement Information	2001			2000		1999
Operating revenues	$	1,691		$	1,675	$	15
Operating income		297			546		4
Income before extraordinary items and cumulative effect of change in accounting principle		(8	)		254		4
Net income	$	(8	)	$	254	$	4

	Year Ended December 31,
Balance Sheet Information	Year Ended December 31,
Balance Sheet Information	2001			2000
Current assets	$	745		$	588
Noncurrent assets		5,126			3,930

Total assets	$	5,871		$	4,518

Current liabilities		591			1,072
Noncurrent liabilities		3,714			2,025
Members' capital		80			80
Undistributed earnings (deficit)		155			(1	)
Additional paid-in capital		735			735
Retained earnings		647			602
Accumulated other comprehensive income (loss)		(51	)		5

Total capitalization and liabilities	$	5,871		$	4,518

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5. Property, Plant and Equipment

A summary of property, plant and equipment by classification is as follows:

		December 31,
		2001		2000
Generation plant		$	4,344	$	4,142
Construction work-in-progress			610		380

Total property, plant and equipment			4,954		4,522
Less: accumulated depreciation (including decommissioning costs for active nuclear stations)			3,794		3,691

	Property, plant and equipment, net	$	1,160	$	831

6. Jointly Owned Facilities—Property, Plant and Equipment

Exelon Generation's ownership interest in jointly owned generation plant at December 31, 2001 and 2000 were as follows:

	2001
Plant	2001
Plant	Peach Bottom			Salem			Keystone			Conemaugh			Quad Cities
Operator	Exelon Generation			PSEG Nuclear			Sithe			Sithe			Exelon Generation
Participating Interest		50.00	%		42.59	%		20.99	%		20.72	%		75.00	%
Generation plant	$	387		$	12		$	121		$	193		$	96
Construction work-in-progress		13			53			13			12			52

Total property, plant and equipment		400			65			134			205			148
Accumulated depreciation		220			4			98			124			10

Property, plant and equipment, net	$	180		$	61		$	36		$	81		$	138

	2000
Plant	2000
Plant	Peach Bottom			Salem			Keystone			Conemaugh			Quad Cities
Operator	Exelon Generation			PSEG Nuclear			Sithe			Sithe			Exelon Generation
Participating Interest		46.25	%		42.59	%		20.99	%		20.72	%		75.00	%
Generation plant	$	378		$	3		$	120		$	190		$	84
Construction work-in-progress		41			41			4			10			38

Total property, plant and equipment		419			44			124			200			122
Accumulated depreciation		214			3			94			118			2

Property, plant and equipment, net	$	205		$	41		$	30		$	82		$	120

Exelon Generation's undivided ownership interests are financed with Exelon Generation funds and, when placed in service, all operations are accounted for as if such participating interests were wholly owned facilities.

On September 30, 1999, PECO reached an agreement to purchase an additional 7.51% ownership interest in Peach Bottom Atomic Power Station ("Peach Bottom") from Atlantic City Electric Company

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("ACE") and Delmarva Power & Light Company ("DPL") for $18 million. With the purchase of the additional ownership interest in Peach Bottom, Exelon Generation received a transfer of $47 million representing ACE and DPL's decommissioning trust funds and the related liability for the station. As a result of the restructuring, the purchase agreement has been assigned to Exelon Generation. DPL's 3.755% interest was purchased in December 2000 by PECO and transferred to Exelon Generation as part of the restructuring. The purchase of ACE's 3.755% ownership interest was completed in October 2001.

7. Nuclear Decommissioning and Spent Fuel Storage

Nuclear Decommissioning

Exelon Generation has an obligation to decommission its nuclear power plants. Exelon Generation's current estimate of its nuclear facilities' decommissioning cost for its owned nuclear plants is $7.2 billion in current year (2002) dollars. Nuclear decommissioning activity occurs primarily after the plants retirement and is currently estimated to begin in 2031. Exelon Generation's Zion Station permanently ceased power generation operations in 1998. The plant is currently being maintained in a secure and safe condition until final decommissioning, which is scheduled to begin in 2013. Decommissioning costs are currently recoverable through the regulated rates of ComEd and PECO. Exelon Generation collected $102 million in 2001 from ComEd and PECO. At December 31, 2001, the decommissioning liability recorded in accumulated depreciation and deferred credits and other liabilities was $2.7 billion and $1.3 billion, respectively. At December 31, 2000, the decommissioning liability recorded in Accumulated Depreciation and deferred credits and other liabilities was $2.6 billion and $1.3 billion, respectively. In order to fund future decommissioning costs, at December 31, 2001 and 2000, Exelon Generation held $3.2 billion and $3.1 billion, respectively, in trust accounts which are included as investments in Exelon Generation's Consolidated Balance Sheets at their fair market value. These trust funds are either qualified or non-qualified. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a "qualified fund." Contributions made into a qualified fund are tax deductible. Exelon Generation believes that the amounts being recovered from customers through regulated rates and earnings on nuclear decommissioning trust funds will be sufficient to fully fund its decommissioning obligations.

In connection with the transfer by ComEd of its nuclear generating stations to Exelon Generation, ComEd asked the Illinois Commerce Commission (ICC) to approve the continued recovery of decommissioning costs after the transfer. On December 20, 2000, the ICC issued an order finding that the ICC has the legal authority to permit ComEd to continue to recover decommissioning costs from customers for the six-year term of the power purchase agreements between ComEd and Exelon Generation. Under the ICC order, ComEd is permitted to recover $73 million per year from customers for decommissioning for the years 2001 through 2004. In 2005 and 2006, ComEd can recover up to $73 million annually, depending upon the portion of the output of the former ComEd nuclear stations that ComEd purchases from Exelon Generation. Under the ICC order, subsequent to 2006, there will be no further recoveries of decommissioning costs from customers. The ICC order also provides that any surplus funds after the nuclear stations are decommissioned must be refunded to customers. The ICC order is currently pending on appeal in the Illinois Appellate Court.

Exelon Generation recorded a receivable from ComEd of approximately $440 million representing ComEd's legal requirement to remit funds to Exelon Generation upon collection from customers, and

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for collections from customers prior to the establishment of external decommissioning trust funds in 1989 to be remitted to Exelon Generation for deposit into the decommissioning trusts through 2006. Unrealized gains and losses on decommissioning trust funds (based on the market value of the assets on the Merger date, in accordance with purchase accounting) had previously been recorded in accumulated depreciation. As a result of the transfer of the ComEd nuclear plants to Exelon Generation and the ICC order limiting the regulated recoveries of decommissioning costs, net unrealized losses of $23 million (net of income taxes) at that date were reclassified to accumulated other comprehensive income. All subsequent realized gains and losses on these decommissioning trust funds' assets are based on the cost basis of the trust fund assets established on the Merger date and are reflected in Other Income and Deductions in Exelon Generation's Consolidated Statements of Income.

Nuclear decommissioning costs associated with the nuclear generating stations formerly owned by PECO continue to be recovered currently through rates charged by PECO to regulated customers these amounts are remitted to Exelon Generation as allowed by the Pennsylvania Public Utility Commission.

Spent Fuel Storage

Under the Nuclear Waste Policy Act of 1982 (NWPA), the U.S. Department of Energy (DOE) is responsible for the selection and development of repositories for, and the disposal of, spent nuclear fuel and high-level radioactive waste (SNF). ComEd and PECO, as required by the NWPA, each signed a contract with the DOE (Standard Contract) to provide for disposal of SNF from their respective nuclear generating stations. In accordance with the NWPA and the Standard Contract, ComEd and PECO pay the DOE one mill ($.001) per kilowatt-hour of net nuclear generation for the cost of nuclear fuel long-term storage and disposal. This fee may be adjusted prospectively in order to ensure full cost recovery. The NWPA and the Standard Contract required the DOE to begin taking possession of SNF generated by nuclear generating units by no later than January 1998. The DOE, however, failed to meet that deadline and its performance is expected to be delayed significantly. The DOE's current estimate for opening an SNF facility is 2010. This extended delay in SNF acceptance by the DOE has led to Exelon Generation's use of dry storage at its Dresden and Peach Bottom Units and its consideration of dry storage at other units.

In July 2000, PECO entered into an agreement with the DOE relating to Peach Bottom nuclear generating unit to address the DOE's failure to begin removal of SNF in January 1998 as required by the Standard Contract. Under that agreement, the DOE agreed to provide credits against future contributions to the Nuclear Waste Fund over the next ten years to compensate for SNF storage costs incurred as a result of the DOE's breach of the contract. The agreement also provides that the DOE will take title to the SNF upon request and the interim storage facility at Peach Bottom provided certain conditions are met.

In November 2000, eight utilities with nuclear power plants filed a Joint Petition for Review against the DOE with the United States Court of Appeals for the Eleventh Circuit seeking to invalidate that portion of the agreement providing for credits against nuclear waste fund payments on the ground that such provision is a violation of the NWPA. PECO intervened as a defendant in that case, which is ongoing. In April, 2001, an individual filed suit against the DOE with the United States District Court for the Middle District of Pennsylvania seeking to invalidate the agreement on the grounds that the DOE has violated the National Environmental Policy Act and the Administrative Procedure Act. PECO

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intervened as a defendant and moved to dismiss the complaint. The Court has not yet ruled on the motion to dismiss.

The Standard Contract with the DOE also requires that PECO and ComEd pay the DOE a one-time fee applicable to nuclear generation through April 6, 1983. PECO's fee has been paid. Pursuant to the Standard Contract, ComEd elected to defer payment of the one-time fee of $277 million, with interest accruing to the date of payment, just prior to the first delivery of SNF to the DOE. As of December 31, 2001, the liability for the one-time fee with interest was $843 million.

The liabilities for spent nuclear fuel disposal costs, including the one-time fee, were transferred to Exelon Generation as part of the corporate restructuring.

8. Long-Term Debt

Long-term debt is comprised of the following:

					December 31,
				Maturity Date	December 31,
		Rates		Maturity Date	2001			2000
Notes payable		7.25	%	2003-2004	$	9		$	14
Senior unsecured notes		6.95	%	2011		699			—
Pollution control notes		2.10%—2.70	%	2016-2034		317			195

	Total long-term debt					1,025			209
Due within one year						(4	)		(4	)

	Long-term debt				$	1,021		$	205

Long-term debt maturities in the period 2002 through 2006 and thereafter are as follows:

2002	$	4
2003		4
2004		1
2005		—
2006		—
Thereafter		1,016

	$	1,025

In May 2001, Exelon Generation entered into a forward-starting interest rate swap, with an aggregate notional amount of $700 million, to hedge the interest rate risk related to the anticipated issuance of debt. On June 11, 2001, Exelon Generation issued $700 million of senior unsecured notes with a maturity date of June 15, 2011 and an interest rate of 6.95% and closed the forward-starting interest rate swap. The aggregate loss on the settlement of the swap of $2 million, net of related income taxes, was classified in Accumulated Other Comprehensive Income and is being amortized to interest expense over the life of the debt.

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Also during 2001, Exelon Generation issued $121 million of Pollution Control Revenue Refunding Bonds at an average variable commercial paper interest rate of 2.685% with maturities of 20 to 33 years. The proceeds from these offerings were used to refund tax-exempt debt previously issued by PECO. The transaction was accounted for as a distribution to the member.

Exelon Generation, together with Exelon, ComEd and PECO, entered into a $1.5 billion 364 day unsecured revolving credit facility on December 12, 2001 with a group of banks. As of December 31, 2001, Exelon Generation did not meet the requirements to borrow under this facility.

9. Income Taxes

Income tax expense (benefit) is comprised of the following components for the years ended December 31:

			2001			2000			1999
Included in operations:
	Federal:
		Current	$	253		$	177		$	92
		Deferred		15			(38	)		18
		Investment tax credit, net		(8	)		(13	)		(12	)
	State:
		Current		51			43			22
		Deferred		16			(9	)		5

			$	327		$	160		$	125

Included in cumulative effect of a change in accounting principle:
Federal—deferred			$	6		$	—		$	—
State—deferred				1			—			—

			$	7			—			—

The effective income tax rate differed from the Federal statutory rate for the years ended December 31 principally due to the following:

		2001		2000		1999
Income taxes on above at Federal statutory rate of 35%		35.0	%	35.0	%	35.0	%
Increase (decrease) due to:
	State income taxes, net of Federal income tax benefit	5.2	%	5.0	%	5.2	%
	Nuclear decommissioning trust income	(0.6	)%	0.0	%	—
	Amortization of investment tax credit	(0.6	)%	(1.9	)%	(2.1	)%
	Other, net	—		—		(0.1	)%

Effective income tax rate		39.0	%	38.1	%	38.0	%

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The tax effect of temporary differences giving rise to Exelon Generation's deferred tax assets and liabilities as of December 31, 2001 and 2000 are presented below:

		2001			2000
Deferred tax assets:
	Decommissioning and decontamination obligations	$	856		$	455
	Deferred pension and postretirement obligations		236			227
	Deferred investment tax credits		93			96
	Other, net					110

Total deferred tax assets			1,185			888

Deferred tax liabilities:
	Plant basis difference		(709	)		(397	)
	Unrealized gains on derivative financial instruments		(30	)		—
	Decommissioning and decontamination obligations		(100	)		(118	)
	Emission allowances		(44	)		(36	)
	Other, net		(12	)		—

Total deferred tax liabilities			(895	)		(551	)

Deferred income taxes net on the balance sheet		$	290		$	337

Prior to 2001, the offsetting deferred tax assets and liabilities resulting from decommissioning and decontamination assets and obligations, accounted for as regulatory assets and liabilities, were recorded within the plant basis difference caption above. As a result of the corporate restructuring, on January 1, 2001, the decommissioning and decontamination obligations were transferred to Exelon Generation. The deferred tax asset related to the decommissioning and decontamination obligation is no longer recorded in the plant basis difference caption with the regulatory assets and liabilities.

Included in accrued expenses on Exelon Generation's consolidated balance sheets at December 31, 2001 and 2000 was approximately $245 and $334 million current taxes payable due to the member.

The Internal Revenue Service and certain state tax authorities are currently auditing certain tax returns of Exelon's predecessor entities, Unicom and PECO. The current audits are not expected to have an adverse effect on financial condition or results of operations of Exelon Generation.

10. Employee Benefits

Exelon Generation has adopted defined benefit pension plans and postretirement welfare plans sponsored by Exelon. Essentially all Exelon Generation employees are eligible to participate in these plans. Essentially all Exelon Generation management employees, and electing union employees, hired on or after January 1, 2001 are eligible to participate in the newly established Exelon cash balance pension plan. Management employees who were active participants in the pension plans on December 31, 2000 and remain employed on January 1, 2002, will have the opportunity to continue to participate in the pension plans or to transfer to the cash balance plan. Benefits under these pension plans generally reflect each employee's compensation, years of service, and age at retirement. Funding is based upon actuarially determined contributions that take into account the amount deductible for

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income tax purposes and the minimum contribution required under the Employee Retirement Income Security Act of 1974, as amended. The following tables provide a reconciliation of benefit obligations, plan assets, and funded status of Exelon Generation's proportionate interest in the Exelon plans.

	Pension Benefits						Other Postretirement Benefits
	2001			2000			2001			2000
Change in Benefit Obligation:
Net benefit obligation at beginning of year	$	2,757		$	893		$	1,144		$	351
Service cost		37			17			17			11
Interest cost		166			91			70			33
Plan participants' contributions		—			—			2			—
Plan amendments		19			—			(105	)		—
Actuarial (gain)loss		102			102			72			77
Acquisitions		—			1,689			—			670
Curtailments/Settlements		(16	)		(32	)		—			2
Special accounting costs		13			90			2			25
Gross benefits paid		(202	)		(93	)		(70	)		(25	)

Net benefit obligation at end of year	$	2,876		$	2,757		$	1,132		$	1,144

Change in Plan Assets:
Fair value of plan assets at beginning of year	$	2,908		$	1,296		$	635		$	108
Actual return on plan assets		(111	)		82			(7	)		(6	)
Employer contributions		14			1			40			40
Plan participants' contributions		—			—			2			1
Acquisitions		—			1,622			—			517
Gross benefits paid		(202	)		(93	)		(70	)		(25	)

Fair value of plan assets at end of year	$	2,609		$	2,908		$	600		$	635

Funded status at end of year	$	(267	)	$	151		$	(532	)	$	(509	)
Miscellaneous adjustment		—			—			—			3
Unrecognized net actuarial (gain)loss		110			(347	)		207			75
Unrecognized prior service cost		46			33			(105	)		—
Unrecognized net transition obligation (asset)		(7	)		(9	)		46			54

Net amount recognized at end of year	$	(118	)	$	(172	)	$	(384	)	$	(377	)

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	Pension Benefits						Other Postretirement Benefits
	2001		2000		1999		2001		2000		1999
Weighted-average assumptions as of December 31,
Discount rate	7.35	%	7.60	%	8.00	%	7.35	%	7.60	%	8.00	%
Expected return on plan assets	9.50	%	9.50	%	9.50	%	9.50	%	8.00	%	8.00	%
Rate of compensation increase	4.00	%	4.30	%	5.00	%	4.00	%	4.30	%	5.00	%
Health care cost trend on covered charges	N/A		N/A		N/A		10.00	%	7.00	%	8.00	%
							decreasing to ultimate trend of 4.5% in 2008		decreasing to ultimate trend of 5.0% in 2005		decreasing to ultimate trend of 5.0% in 2006

	Pension Benefits									Other Postretirement Benefits
	2001			2000			1999			2001			2000			1999
Components of net periodic
benefit cost (benefit):
Service cost	$	37		$	17		$	13		$	17		$	11		$	8
Interest cost		166			91			65			70			33			20
Expected return on assets		(215	)		(131	)		(94	)		(46	)		(15	)		(6	)
Amortization of:
Transition obligation (asset)		(2	)		(2	)		(2	)		4			4			4
Prior service cost		4			3			2			(5	)		—			—
Actuarial (gain) loss		(11	)		(11	)		(3	)		—			—			—
Curtailment charge (credit)		(6	)		(5	)		—			4			10			—
Settlement charge (credit)		(3	)		(7	)		—			—			—			—

Net periodic benefit cost (benefit)	$	(30	)	$	(45	)	$	(19	)		44		$	43		$	26

Special accounting costs	$	13		$	90		$	—		$	2		$	25		$	—

Sensitivity of retiree welfare results
Effect of a one percentage point increase in assumed health care cost trend on total service and interest cost components	$	15
on postretirement benefit obligation	$	135
Effect of a one percentage point decrease in assumed health care cost trend on total service and interest cost components	$	(12	)
on postretirement benefit obligation	$	(117	)

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Prior service cost is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plans.

Special accounting costs in 2000 of $90 million include $42 million for separation benefits and $48 million for plan enhancements. Exelon Generation provides certain health care and life insurance benefits for retired employees through plans sponsored by Exelon. In 2001, Exelon amended the postretirement medical benefit plan to change the eligibility requirement of the plan to cover only employees who retire with 10 years of service after age 45 rather than with 10 years of service and having attained the age of 55. Welfare benefits for active employees are provided by several insurance policies or self-funded plans whose premiums or contributions are based upon the benefits paid during the year.

Exelon Generation has savings plans for the majority of its employees. The plans allow employees to contribute a portion of their pretax income in accordance with specified guidelines. Exelon Generation matches a percentage of the employee contribution up to certain limits. The cost of Exelon Generation's matching contribution to the savings plans totaled $15 million in 2001.

Exelon Generation participates in a 401(k) Savings Plan for Employees sponsored by Exelon. The plan allows employees to contribute a portion of their pretax income in accordance with specified guidelines. Exelon Generation matches a percentage of employee contributions to the plan up to certain limits. Exelon Generation expensed matching contributions to the plan totaling $23 million for 2001, $7 million for 2000 and $3 million for 1999.

11. Commitments and Contingent Liabilities

Capital Expenditures

Generation's estimated capital expenditures for 2002 are as follows:

		(in millions)
Production Plant		$	392
Nuclear Fuel			432
Investments			254

	Total	$	1,078

Capital expenditures for production include expenditures to increase capacity of existing plants.

Capital Commitments

Exelon Generation has committed to provide AmerGen with capital contributions equivalent to 50% of the purchase price of any acquisitions AmerGen makes in 2002 and Exelon Generation and British Energy have each agreed to provide up to $100 million to AmerGen at any time for operating expenses.

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Pending Acquisition

In December 2001, Exelon Generation agreed to purchase two generation plants located in the Dallas-Fort Worth metropolitan area from TXU Corp. (TXU) to expand its presence in the Texas region. The $443 million purchase (not included in above table) of the two natural-gas and oil-fired plants, to be funded through available cash and commercial paper proceeds, will add approximately 2,300 megawatts (MW) capacity. The transaction includes a power purchase agreement for TXU to purchase power during the months of May through September from 2002 through 2006. During the periods covered by the power purchase agreement, TXU will make fixed capacity payments and will provide fuel to Exelon Generation in return for exclusive rights to the energy and capacity of the generation plants. The closing of the acquisition is contingent upon receipt of the necessary regulatory approvals and is anticipated to occur in the second quarter of 2002.

Nuclear Insurance Coverages and Assessments

The Price-Anderson Act limits the liability of nuclear reactor owners for claims that could arise from a single incident. The current limit is $9.5 billion and is subject to change to account for the effects of inflation and changes in the number of licensed reactors. Exelon Generation carries the maximum available commercial insurance of $200 million and the remaining $9.3 billion is provided through mandatory participation in a financial protection pool. Under the Price-Anderson Act, all nuclear reactor licensees can be assessed up to $89 million per reactor per incident, payable at no more than $10 million per reactor per incident per year. This assessment is subject to inflation and state premium taxes. In addition, the U.S. Congress could impose revenue-raising measures on the nuclear industry to pay claims. Price-Anderson is scheduled to expire on August 1, 2002. Although replacement legislation has been proposed from time to time, Exelon Generation is unable to predict whether replacement legislation will be enacted.

Exelon Generation carries property damage, decontamination and premature decommissioning insurance for each station loss resulting from damage to its nuclear plants. In the event of an accident, insurance proceeds must first be used for reactor stabilization and site decontamination. If the decision is made to decommission the facility, a portion of the insurance proceeds will be allocated to a fund, which Exelon Generation is required by the Nuclear Regulatory Commission ("NRC") to maintain, to provide for decommissioning the facility. Exelon Generation is unable to predict the timing of the availability of insurance proceeds to Exelon Generation and the amount of such proceeds which would be available. Under the terms of the various insurance agreements, Exelon Generation could be assessed up to $121 million for losses incurred at any plant insured by the insurance companies. In the event that one or more acts of terrorism cause accidental property damage within a twelve month period from the first accidental property damage under one or more policies for all insureds, the maximum recovery for all losses by all insureds will be an aggregate of $3.2 billion plus such additional amounts as the insurer may recover for all such losses from reinsurance, indemnity, and any other source, applicable to such losses.

Additionally, Exelon Generation is a member of an industry mutual insurance company that provides replacement power cost insurance in the event of a major accidental outage at a nuclear station. The premium for this coverage is subject to assessment for adverse loss experience. Exelon Generation's maximum share of any assessment is $46 million per year.

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In addition, Exelon Generation participates in the American Nuclear Insurers Master Worker Program, which provides coverage for worker tort claims filed for bodily injury caused by a nuclear energy accident. This program was modified, effective January 1, 1998, to provide coverage to all workers whose "nuclear-related employment" began on or after the commencement date of reactor operations. Exelon Generation will not be liable for a retrospective assessment under this new policy. However, in the event losses incurred under the small number of policies in the old program exceed accumulated reserves, a maximum retroactive assessment of up to $50 million could apply.

Exelon Generation is self-insured to the extent that any losses may exceed the amount of insurance maintained. Such losses could have a material adverse effect on Exelon Generation's financial condition and results of operations.

Energy Commitments

Exelon Generation's wholesale operations include the physical delivery and marketing of power obtained through its generation capacity, and long, intermediate and short-term contracts. Exelon Generation maintains a net positive supply of energy and capacity, through ownership of generation assets and power purchase and lease agreements, to protect it from the potential operational failure of one of its owned or contracted power generation units. Exelon Generation has also contracted for access to additional generation through bilateral long-term power purchase agreements. These agreements are firm commitments related to power generation of specific generation plants and/or are dispatchable in nature—similar to asset ownership. Exelon Generation enters into power purchase agreements with the objective of obtaining low-cost energy supply sources to meet its physical delivery obligations to its customers. Exelon Generation has also purchased firm transmission rights to ensure that it has reliable transmission capacity to physically move its power supplies to meet customer delivery needs. The intent and business objective for the use of its capital assets and contracts are to provide Exelon Generation with physical power supply to enable it to deliver energy to meet customer needs. Exelon primarily uses financial contracts in its wholesale marketing activities for hedging purposes. Exelon also uses financial contracts to manage the risk surrounding trading for profit activities.

Exelon Generation has entered into bilateral long-term contractual obligations for sales of energy to ComEd, PECO and other load-serving entities, including electric utilities, municipalities, electric cooperatives, and retail load aggregators. Exelon Generation also enters into contractual obligations to deliver energy to wholesale market participants who primarily focus on the resale of energy products for delivery. Exelon Generation provides delivery of its energy to these customers through rights for firm transmission. In addition, Exelon Generation has entered into long-term power purchase agreements with independent power producers ("IPP") under which Exelon Generation makes fixed capacity payments to the IPP in return for exclusive rights to the energy and capacity of the generation units for a fixed period.

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At December 31, 2001, Exelon Generation's long-term commitments, relating to the purchase and sale of energy, capacity and transmission rights from affiliated and unaffiliated entities are as expressed in the following tables:

		Unaffiliated								Affiliated
		Power Purchases		Power Sales		Capacity Purchases		Transmission Rights Purchases		Power Sale/ Capacity		Power Purchases
2002		$	295	$	1,803	$	1,005	$	139	$	4,047	$	256
2003			84		666		1,214		31		4,220		261
2004			31		219		1,222		15		4,094		315
2005			23		139		406		15		4,018		241
2006			9		58		406		5		3,974		241
Thereafter			150		22		3,657		—		6,207		2,171

	Total	$	592	$	2,907	$	7,910	$	205	$	26,560	$	3,485

Included in Exelon Generation's long-term commitments are power purchase arrangements (PPAs) with Midwest Generation, LLC Midwest Generation for the purchase of capacity from its coal fired stations, in declining amounts through 2004. Contracted capacity and capacity available through the exercise of an annual option are as follows (in megawatts):

	Contracted Capacity	Available Option Capacity
2002	4,013	1,632
2003	1,696	3,949
2004	1,696	3,949

The agreements with Midwest Generationa also provide for the option to purchase 2,698 megawatts of oil and gas-fired capacity, and 944 megawatts of peaking capacity, subject to reduction.

Exelon Generation has entered into PPAs with AmerGen, under which it will purchase all the energy from Unit No. 1 at TMI after December 31, 2001 through December 31, 2014. Under a 1999 PPA, Generation will purchase from AmerGen all of the residual energy from Clinton through December 31, 2002. Currently, the residual output approximates 25% of the total output of the Clinton facility.

Environmental Issues

Exelon Generation's operations have in the past and may in the future require substantial capital expenditures in order to comply with environmental laws. Additionally, under Federal and state environmental laws, Exelon Generation is generally liable for the costs of remediating environmental contamination of property now owned and of property contaminated by hazardous substances generated by Exelon Generation.

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As of December 31, 2001, Exelon Generation had accrued $14 million for environmental investigation and remediation costs. Exelon Generation cannot reasonably estimate whether it will incur other significant liabilities for additional investigation and remediation costs at these or additional sites identified by Exelon Generation, environmental agencies or others, or whether such costs will be recoverable from third parties.

Leases

Minimum future operating lease payments, including lease payments for real estate, rail cars and office equipment, as of December 31, 2001 were:

2002	$	28
2003		37
2004		26
2005		32
2006		32
Thereafter		527

Total minimum future lease payments	$	682

Rental expense under operating leases totaled $29 million $19 million and $18 million for the year ended December 31, 2001, 2000 and 1999, respectively.

Litigation

Cajun Electric Power Cooperative, Inc. On May 27, 1998, the United States Department of Justice, on behalf of the Rural Utilities Service and the Chapter 11 Trustee for the Cajun Electric Power Cooperative, Inc. ("Cajun"), filed an action claiming breach of contract against PECO in the United States District Court for the Middle District of Louisiana arising out of PECO's termination of the contract to purchase Cajun's interest in the River Bend nuclear power plant. Effective with the corporate restructuring, Exelon Generation has agreed to assume any liability and obligation arising from this litigation. During 2001, the parties reached a settlement of the dispute, and Exelon Generation made a payment of $14 million to Cajun.

Cotter Corporation. During 1989 and 1991, actions were brought in federal and state courts in Colorado against ComEd and its subsidiary, Cotter Corporation (Cotter), seeking unspecified damages and injunctive relief based on allegations that Cotter permitted radioactive and other hazardous material to be released from its mill into areas owned or occupied by the plaintiffs, resulting in property damage and potential adverse health effects. In 1994, a federal jury returned nominal dollar verdicts against Cotter on eight plaintiffs' claims in the 1989 cases, which verdicts were upheld on appeal. The remaining claims in the 1989 actions were settled or dismissed. In 1998, a jury verdict was rendered against Cotter in favor of 14 of the plaintiffs in the 1991 cases, totaling approximately $6 million in compensatory and punitive damages, interest and medical monitoring. On appeal, the Tenth Circuit Court of Appeals reversed the jury verdict, and remanded the case for new trial. These plaintiffs' cases were consolidated with the remaining 26 plaintiffs' cases, which had not been tried. The consolidated trial was completed on June 28, 2001. The jury returned a verdict against Cotter and

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awarded $16.3 million in various damages. On November 20, 2001, the District Court entered an amended final judgment which included an award of both pre-judgment and post-judgment interests, costs, and medical monitoring expenses which total $43.3 million. This matter is being appealed by Cotter in the Tenth Circuit Court of Appeals. Cotter will vigorously contest the award.

The United States Environmental Protection Agency (EPA) has advised Cotter that it is potentially liable in connection with radiological contamination at a site known as the West Lake Landfill in Missouri. Cotter is alleged to have disposed of approximately 39,000 tons of soils mixed with 8,700 tons of leached barium sulfate at the site. Cotter, along with three other companies identified by the EPA as potentially responsible parties (PRPs), is reviewing a draft feasibility study that recommends capping the site. The PRPs are also engaged in discussions with the State of Missouri and the EPA. The estimated costs of remediation for the site are $10 to $15 million. Once a final feasibility study is complete and a remedy selected, it is expected that the PRPs will agree on an allocation of responsibility for the costs. Until an agreement is reached, Exelon Generation cannot predict its share of the costs.

In connection with the corporate restructuring, the responsibility to indemnify Cotter for any liability related to these matters was transferred to Exelon Generation. Management believes it has established an adequate contingent liability in connection with these proceedings.

Godley Park District Litigation. On April 18, 2001, the Godley Park District filed suit in Will County Circuit Court against ComEd and Exelon alleging that oil spills at Braidwood Station have contaminated the Park District's water supply. The complaint sought actual damages, punitive damages of $100 million and statutory penalties. The court dismissed all counts seeking punitive damages and statutory penalties, and the plaintiff has filed an amended complaint before the court. Exelon Generation is contesting the liability and damages sought by plaintiff.

Pennsylvania Real Estate Tax Appeals. Exelon Generation is involved in tax appeals regarding two of its nuclear facilities, Limerick (Montgomery County) and Peach Bottom (York County) and one of its fossil facilities, Eddystone (Delaware County), Exelon is also involved in the appeal for TMI (Dauphin County) through AmerGen. Exelon Generation does not believe the outcome of these matters will have a material adverse effect on Exelon Generation's results of operations or financial condition.

Enron. Exelon Generation is an unsecured creditor in Enron Corp.'s (Enron) bankruptcy proceeding. Exelon Generation's claim for power and other products sold to Enron in November and early December 2001 is $8.5 million. Enron may assert that Exelon Generation should not have closed

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out and terminated all of its forward contracts with Enron. If Enron is successful in this argument, Exelon Generation's exposure could be greater than $8.5 million. Exelon Generation may also be subject to exposure due to the credit policies of ISO-operated spot markets that allocate defaults of market participants to non-defaulting participants. Exelon Generation has established an allowance for uncollectibles in anticipation of resolution of these matters.

General. Exelon Generation is involved in various other litigation matters. The ultimate outcome of such matters, while uncertain, is not expected to have a material adverse effect on Exelon Generation's financial condition or results of operations.

12. Fair Value of Financial Assets and Liabilities

The carrying amounts and fair values of Exelon Generation's financial assets and liabilities as of December 31 were as follows:

		2001		2000
		Carrying Amount	Fair Value	Carrying Amount		Fair Value
Non-derivatives
Assets:
	Cash and cash equivalents	224	224	4		4
	Customer accounts receivable	316	316	316		316
	Nuclear decommissioning trust funds	3,165	3,165	3,127		3,127
Liabilities:
	Long-term debt (including amounts due within one year)	1,025	1,040	209		209
Derivatives
	Energy Derivatives	92	92	(34	)	(34	)

As of December 31, 2001 and 2000, Exelon Generation's carrying amounts of cash and cash equivalents and accounts receivable are representative of fair value because of the short-term nature of these instruments. Fair values of the trust accounts for decommissioning nuclear plants and long-term debt are estimated based on quoted market prices for the same or similar issues. The fair value of Exelon Generation's and power purchase and sale contracts is determined using quoted exchange prices, external dealer prices, or internal valuation models which utilize assumptions of future energy prices and available market pricing curves. The fair value of Exelon Generation's energy derivatives is reported in the balance sheet as current or non-current assets or liabilities depending on the time until settlement of the transaction. At December 31, 2001, the following amounts were reported in Exelon Generation's consolidated balance sheet for the fair value of energy derivatives: accounts receivable of $109 million; other non-current assets of $62; accounts payable of $71; and non-current liabilities of $8.

Financial instruments that potentially subject Exelon Generation to concentrations of credit risk consist principally of cash equivalents, customer accounts receivable and energy derivatives. Exelon Generation places its cash equivalents with high-credit quality financial institutions. Generally, such investments are in excess of the Federal Deposit Insurance Corporation limits.

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Exelon Generation utilizes derivatives to manage the utilization of its available generating capacity and provision of wholesale energy to its affiliates. Exelon Generation also utilizes energy option contracts and energy financial swap arrangements to limit the market price risk associated with forward energy commodity contracts. Additionally, Exelon Generation enters into certain energy-related derivatives for trading or speculative purposes. Exelon Generation would be exposed to credit-related losses in the event of non-performance by the counterparties that issued the derivative instruments. The credit exposure of derivatives contracts is represented by the fair value of contracts at the reporting date. The majority of power purchase and sale contracts are documented under master netting agreements.

On January 1, 2001, Exelon Generation recognized a non-cash gain of $12 million, net of income taxes, in earnings and deferred a non-cash gain of $5 million, net of income taxes, in accumulated other comprehensive income, a component of shareholders' equity, to reflect the initial adoption of SFAS No. 133, as amended. SFAS No. 133 must be applied to all derivative instruments and requires that such instruments be recorded in the balance sheet either as an asset or a liability measured at their fair value through earnings, with special accounting permitted for certain qualifying hedges.

During 2001, Exelon Generation recognized net gains of $16 million ($10 million, net of income taxes) relating to mark-to-market (MTM) adjustments of certain non-trading power purchase and sale contracts pursuant to SFAS No. 133. MTM adjustments on power purchase contracts are reported in fuel and purchased power and MTM adjustments on power sale contracts are reported as Operating Revenues in the Consolidated Statements of Income. During 2001, Exelon Generation recognized net gains aggregating $14 million ($10 million, net of income taxes) on derivative instruments entered into for trading purposes. Exelon Generation commenced financial trading in the second quarter of 2001. Gains and losses associated with financial trading are reported as either operating revenue or fuel and purchased power expense in the Consolidated Statements of Income. During 2001, no amounts were reclassified from accumulated other comprehensive income into earnings as a result of forecasted energy commodity transactions no longer being probable.

As of December 31, 2001, approximately $50 million of deferred net gains on derivative instruments accumulated in other comprehensive income are expected to be reclassified to earnings during the next twelve months. Amounts in accumulated other comprehensive income related to interest rate cash flows are reclassified into earnings when the forecasted interest payment occurs. Amounts in accumulated other comprehensive income related to energy commodity cash flows are reclassified into earnings when the forecasted purchase or sale of the energy commodity occurs. The majority of Exelon Generation's cash flow hedges are expected to settle within the next 3 years.

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Exelon Generation classifies investments in the trust accounts for decommissioning nuclear plants as available-for-sale. The following tables show the fair values, gross unrealized gains and losses and amortized costs bases for the securities held in these trust accounts.

		December 31, 2001
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Equity securities		$	1,666	$	130	$	(236	)	$	1,560

Debt securities:
	Government obligations		882		28		(3	)		907
	Other debt securities		701		16		(19	)		698

Total debt securities			1,583		44		(22	)		1,605

Total available-for-sale securities		$	3,249	$	174	$	(258	)	$	3,165

	December 31, 2000
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Equity securities	$	1,712	$	144	$	(180	)	$	1,676

Debt securities:
Government obligations		940		40		—			980
Other debt securities		470		8		(7	)		471

Total debt securities		1,410		48		(7	)		1,451

Total available-for-sale securities	$	3,122	$	192	$	(187	)	$	3,127

Net unrealized losses of $84 million and net unrealized gains of $5 million, respectively, were recognized in Accumulated Depreciation and Other Comprehensive Income in Exelon Generation's Consolidated Balance Sheets at December 31, 2001 and 2000, respectively.

	For the years ended December 31,
	2001			2000
Proceeds from sales	$	1,624		$	265
Gross realized gains		76			9
Gross realized losses		(189	)		(46	)

Net realized gains of $14 million and net realized losses of $37 million were recognized in Accumulated Depreciation in Exelon Generation's Consolidated Balance Sheets at December 31, 2001 and 2000, respectively, and $127 million of net realized losses was recognized in Other Income and Deductions in Exelon Generation's Consolidated Income Statements for 2001. The available-for-sale securities held at December 31, 2001 have an average maturity of eight to ten years.

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13. Selected Quarterly Data (Unaudited)

The information shown below, in the opinion of management, includes all adjustments, consisting only of normal or recurring accruals, necessary to a fair presentation of such amounts. Due to the seasonal nature of the generation business, quarterly amounts vary significantly during the year.

	Calendar Quarter Ended
	March 31,				June 30,				September 30,				December 31,
	2001		2000		2001		2000		2001		2000		2001		2000
Revenues	$	1,628	$	510	$	1,618	$	645	$	2,292	$	941	$	1,510	$	1,178
Operating income	$	268	$	70	$	113	$	140	$	225	$	228	$	266	$	3
Income before cumulative effect of change in accounting principle	$	158	$	88	$	71	$	147	$	167	$	164	$	116	($	139	)
Cumulative effect of a change in accounting principle	$	12		—		—		—		—		—		—		—
Net income (loss)	$	170	$	88	$	71	$	147	$	167	$	164	$	116	($	139	)

14. Related Party Transactions

Exelon Corporation

At December 31, 2000, Exelon Generation had a $696 million demand note payable, that was due no later than December 16, 2001, with Exelon related to the acquisition of Sithe, which was reflected in current liabilities in Exelon Generation's Consolidated Balance Sheet. Interest expense on the note payable was $23 million and $2 million for the years ended December 31, 2001 and 2000. The loan was repaid in full in June 2001.

Exelon Corporate Restructuring

At December 31, 2001, Exelon Generation had a long-term receivable of $291 million from ComEd resulting from the restructuring which is included in deferred debits and other assets, on Exelon Generation's consolidated balance sheet. This receivable represents ComEd's legal requirement to remit the recovery of decommissioning costs upon collection from the customers.

Exelon Business Service Company

Effective January 1, 2001, upon the corporate restructuring, Exelon Generation receives a variety of corporate support services from the Business Services Company ("BSC"), a subsidiary of Exelon, including executive management, legal, human resources, financial and information technology services. Such services are provided at cost including applicable overheads. Costs charged to Exelon Generation by BSC for the year ended December 31, 2001 were $78 million.

Power Purchase Agreements with ComEd and PECO

In connection with the restructuring transaction, ComEd and PECO entered into PPAs with Exelon Generation. Under the PPA between Exelon Generation and ComEd, Exelon Generation supplies all of ComEd's load requirements through 2004. Prices for energy vary depending upon the time of day and month of delivery, as specified in the PPA. During 2005 and 2006, ComEd will purchase energy and capacity from Exelon Generation, up to the available capacity of the nuclear

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generation plants formerly owned by ComEd and transferred to Exelon Generation. Under the terms of the PPA with ComEd, Exelon Generation is responsible for obtaining the required transmission for its supply. The PPA with ComEd also specifies that prior to 2005, ComEd and Exelon Generation will jointly determine and agree on a market-based price for energy delivered under the PPA for 2005 and 2006. In the event that the parties cannot agree to market-based prices for 2005 and 2006 prior to July 1, 2004, ComEd has the option of terminating its PPA effective December 31, 2004.

Exelon Generation has also entered into a PPA with PECO whereby Exelon Generation will supply all of PECO's load requirements through 2010. Prices for energy are equivalent to the net proceeds from sales of unbundled generation to PECO's provider of last resort customers at rates PECO is allowed to charge customers who do not choose an alternate generation supplier. Under the terms of PPA, PECO is responsible for obtaining the required transmission for its supply.

Intercompany power purchases pursuant to the PPAs for the year ended December 31, 2001 for ComEd and PECO were $2.6 billion and $1.2 billion, respectively. Prior to the restructuring, Exelon Generation recorded revenues of $871 million and $798 million related to sales of energy to PECO for 2000 and 1999, respectively. During 2000, Exelon Generation recorded revenue of $403 million related to sales of energy to ComEd.

AmerGen

Exelon Generation has entered into a PPA dated November 22, 1999 with AmerGen. Under this PPA, Exelon Generation has agreed to purchase from AmerGen all of the residual energy from the Clinton Power Station through December 31, 2002. Currently, the residual output approximates 25% of the total output of the Clinton Power Station. For the years ended December 31, 2001 and 2000, the amount of purchased power recorded in Consolidated Statements of Income is $57 million and $52 million, respectively. As of December 31, 2001 and 2000, Exelon Generation had a payable of $3.1 million and $2.9 million, respectively, resulting from this PPA.

In addition, under a service agreement dated March 1, 1999, Exelon Generation provides AmerGen with certain operation and support services to the nuclear facilities owned by AmerGen. This service agreement has an indefinite term and may be terminated by Exelon Generation or by AmerGen on 90 days' notice. Exelon Generation is compensated for these services in an amount agreed to in the work order but not less than the higher of the fully allocated costs for performing the services or the market price. For the years ended December 31, 2001, 2000 and 1999, the amount charged to AmerGen for these services was $80 million, $32 million and $1 million respectively. As of December 31, 2001 and 2000, Exelon Generation had a receivable of $47 million and $20 million respectively resulting from these services.

In February 2002, Exelon Generation entered into an agreement to loan AmerGen up to $75 million at an interest rate of one-month LIBOR plus 2.25%. As of March 1, 2002, AmerGen had borrowed $30 million under this agreement. The loan is due November 1, 2002.

Sithe Energies, Inc.

In August 2001, Exelon Generation recorded a $150 million note receivable from Sithe. Sithe used the proceeds from the note to repay its subordinated debt. The note has a maturity date of August 20,

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2004 and an interest rate of the Eurodollar rate, plus 2.25%. Sithe repaid this note in December 2001. For the year ended December 31, 2001, Exelon recorded $2.7 million of interest income on the note.

Beginning December 18, 2002, we will have the right to purchase all (but not less than all) of the remaining outstanding shares of the Sithe common stock. The option expires on December 18, 2005. In addition, each of Sithe's other stockholder groups will have the right to require us to purchase all (but not less than all) of its shares during the same period in which we can exercise our option. At the end of that period, if no stockholder has exercised its option, we will have a one-time option to purchase shares from the other stockholders to bring our holdings to 50.1% of the total outstanding shares. If we exercise our option or if all the stockholder groups exercise their put rights, the purchase price for 70% of the remaining 50.1% of the Sithe stock will be set at a fair market value plus a 10% premium in the case of a call or 10% discount in the case of a put, subject to a floor of $430 million and a ceiling of $650 million, and the remaining portion will be valued at fair market value subject to floor price of $141 million and a ceiling price of $330 million, plus, in each case, interest accrued from the beginning of the exercise period.

15. Change in Accounting Estimate

Effective April 1, 2001, Exelon Generation changed its accounting estimates related to the depreciation and decommissioning of certain generating stations. The estimated service lives were extended by 20 years for three nuclear stations, by periods of up to 20 years for certain fossil stations and by 50 years for a pumped storage station. Effective July 1, 2001, the estimated service lives were extended by 20 years for the remainder of Exelon Generation's operating nuclear stations. These changes were based on engineering and economic feasibility studies performed by Exelon Generation considering, among other things, future capital and maintenance expenditures at these plants. The extension of the estimated service lives for the nuclear generating facilities is subject to approval by the NRC. As a result of the change, depreciation and decommissioning expense for 2001 decreased $90 million ($54 million, net of income taxes). At the end of the year, annualized savings resulting from the change would be a decrease of $132 million ($79 million, net of income taxes).

16. Supplemental Financial Information

Supplemental Balance Sheet Information

	December 31,
	2001		2000
Valuation Allowances
Allowance for Doubtful Accounts	$	17	$	2
Reserve for inventory obsolescence	$	12	$	79
Accumulated Amortization
Nuclear Fuel	$	1,838	$	1,445

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Supplemental Income Statement Information

		For the Years Ended December 31,
		2001			2000		1999
Taxes Other than Income
	Real Estate	$	94		$	32	$	18
	Payroll		38			27		16
	Other		17			5		3

	Total	$	149		$	64	$	37
Other, Net
	Investment Income	$	(8	)	$	14		—
	Other					2		41

	Total	$	(8	)	$	16	$	41

Supplemental Cash Flow Information

		For the Years Ended December 31,
		2001		2000		1999
Cash paid during the year:
	Interest (net of amount capitalized)	$	74	$	35	$	18
	Income taxes (net of refunds)	$	335		—		—

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Exelon Generation Company, LLC

OFFER TO EXCHANGE

$700,000,000 6.95% Senior Notes due 2011
(Exchange Notes)

Which have been registered under the Securities Act
For Any and All Outstanding

$700,000,000 6.95% Senior Notes due 2011

Which have not been so registered

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

Section 4.6 of the registrant's operating agreement provides, as follows:

•: The Member shall, and any officer, employee or agent of the Company may in the Member's absolute discretion, be indemnified by the Company to the fullest extent permitted by Section 8945 of the [Pennsylvania Limited Liability Company Laws of 1994, as amended] and as may be otherwise permitted by applicable laws.

The [officers and employees] of the registrant are insured under policies of insurance, within the limits and subject to the limitations of the policies, against claims made against them for acts in the discharge of their duties, and the registrant is insured to the extent that it is required or permitted by law to indemnify the [officers and employees] for such loss. The premiums for such insurance are paid by the registrant.

Item 21. Exhibits and Financial Statement Schedules

(a) Exhibits.

Exhibit Number		Description
3.1		Certificate of Formation of Exelon Generation Company, LLC.
3.2		Exelon Generation Company, LLC Operating Agreement.
4.1		Indenture dated June 1, 2001 between Registrant and First Union National Bank (now Wachovia Bank, National Association).
4.2		Registration Rights Agreement dated June 29, 2001 between Registrant and the purchasers named therein.
4.3		Form of 6.95% Exchange Note.
5		Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
8		Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding tax matters.
10.1		Power Purchase Agreement among Registrant and PECO
10.2		Power Purchase Agreement among Registrant and ComEd.
12		Statement regarding computation of ratios of earnings.
23.1		Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in Exhibits 5 and 8).
23.2		Consent of Independent Accountants.
24		Power of Attorney.
25		Statement of Eligibility of Trustee on Form T-1.
99.1		Form of Letter of Transmittal.
99.2		Form of Notice of Guaranteed Delivery
99.3		Client Letter
99.4		Broker-Dealer Letter
99.5		Form W-9

II-1

Item 22. Undertakings

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

The undersigned registrant hereby undertakes (a):

1.

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i): To include any prospectus required by Section 10(a)(3) of the Securities Act.
(ii): To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
(iii): To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change in such information in the registration statement; provided, however, that the registrant need not file a post-effective amendment to include the information required to be included by subsection (a)(1)(i) or (a)(l)(ii) if such information is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated by reference in the registration statement.

2.: That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3.: To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant, Exelon Generation Company, LLC, certifies that it has reasonable grounds to believe it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kennett Square, Commonwealth of Pennsylvania, on this day of April, 2002.

Exelon Generation Company, LLC
By:	Exelon Ventures Company, LLC, a Delaware limited liability company, as the Managing Member
By:	Exelon Corporation, a Pennsylvania corporation, as the Managing Member
	/s/ OLIVER D. KINGSLEY, JR.
	Name:	Oliver D. Kingsley, Jr.
	Title:	Senior Vice President

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Oliver D. Kingsley, Jr. and John L. Settelen, Jr. and each or any one of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any registration statement relating to any offering made pursuant to this registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Date	Title

/s/ OLIVER D. KINGSLEY, JR. Oliver D. Kingsley, Jr.	April , 2002	Chief Executive Officer and President, Exelon Generation Company, LLC
/s/ JOHN L. SETTELEN, JR. John L. Settelen, Jr.	April , 2002	Vice President and Controller, Exelon Generation Company, LLC (Principal Financial Officer)

II-3

Exhibit Index

Exhibit Number		Description
3.1		Certificate of Formation of Exelon Generation Company, LLC.
3.2		Exelon Generation Company, LLC Operating Agreement.
4.1		Indenture dated June 1, 2001 between the Registrants and First Union National Bank (now Wachovia Bank, National Association).
4.2		Registration Rights Agreement dated June 29, 2001 between the Registrant and the purchasers named therein.
4.3		Form of 6.95% Exchange Note.
5		Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
8		Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding tax matters.
10.1		Power Purchase Agreement among Registrant and PECO
10.2		Power Purchase Agreement among Registrant and ComEd.
12		Statement regarding computation of ratios of earnings.
23.1		Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in Exhibits 5 and 8).
23.2		Consent of Independent Accountants.
24		Power of Attorney.
25		Statement of Eligibility of Trustee on Form T-1.
99.1		Form of Letter of Transmittal.
99.2		Form of Notice of Guaranteed Delivery
99.3		Client Letter
99.4		Broker-Dealer Letter
99.5		Form W-9

QuickLinks

Table of Contents
WHERE TO FIND MORE INFORMATION
PROSPECTUS SUMMARY
Summary of the Exchange Offer
Summary of the Exchange Notes
Summary Information About Exelon Generation Company, LLC
Exelon Generation Company, LLC
Corporate Structure
Business Strategy
Competitive Strengths
RISK FACTORS
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
CAPITALIZATION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
Spent Nuclear Fuel Pool Capacity
MANAGEMENT
COMPENSATION
Option Grants in 2001
Option Exercises and Year-End Value
Retirement Plans
PECO Energy Service Annuity Formula Table
Commonwealth Edison Service Annuity Formula Table
Employment Agreements
CERTAIN TRANSACTIONS
THE EXCHANGE OFFER
DESCRIPTION OF THE EXCHANGE NOTES
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL OPINIONS
EXPERTS
Table of Contents
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in Millions)
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Millions)
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Dollars in Millions)
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CHANGES IN DIVISIONAL/MEMBER'S EQUITY (Dollars in Millions)
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Millions)
EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Millions, unless otherwise noted)
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

Item 21. Exhibits and Financial Statement Schedules

Item 22. Undertakings

SIGNATURES
Exhibit Index

Seq. #35

Microfilm Number Filed with the Seq. #35 Department of State on DEC 27 2000

Entity Number 2979826 [Illegible]

Secretary of the Commonwealth

CERTIFICATE OF ORGANIZATION-DOMESTIC LIMITED LIABILITY COMPANY
DSCB:15-8913 (Rev 95)

In compliance with the requirements of 15 Pa.C.S. Section 8913 (relating to certificate of organization), the undersigned, desiring to organize a limited liability company, hereby state(s) that

1. The name of the limited liability company is: Exelon Generation Company, LLC

2. The (a) address of the limited liability company's initial registered office in this Commonwealth or (b) name of its commercial registered office provider and the county of venue is:

(a)      300 Exelon Way        Kennett Square      PA     19348         Chester
   -----------------------------------------------------------------------------
         Number and Street            City       State    Zip           County

(b)      c/o:
   -----------------------------------------------------------------------------

Name of Commercial Registered Office Provider County

For a limited liability company represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the limited liability company is located for venue and official publication purposes.

3. The name and address, including street and number, if any, of each organizer are:

         NAME                              ADDRES

PECO Energy Company                  2301 Market Street, Philadelphia, PA 10103
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

4. (Strike out if inapplicable): XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

5. (Strike out if inapplicable); XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

6. The specified effective date, if any is: Upon Filing

month day year hour, if any

7. (Strike out if inapplicable); XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

8. For additional provisions of the Certificate, if any, attach an 8 1/2 x 11 sheet.

THIS IS A TRUE COPY OF
THE ORIGINAL SIGNED
DOCUMENT FILED WITH
THE DEPARTMENT OF STATE.

DSCB: 15-8913 (Rev-95)-2

IN TESTIMONY WHEREOF, the organizer(s) has (have) signed this Certificate of Organization this 27th day of December 2000

/s/ Jenifer Friel Newman
-------------------------------------------------
                Signature
Jenifer Friel Newman, Organizer/Authorized Person

Signature

SEQ #36

OPERATING AGREEMENT

EXELON GENERATION COMPANY, LLC

(A PENNSYLVANIA LIMITED LIABILITY COMPANY)

THIS OPERATING AGREEMENT OF EXELON GENERATION COMPANY, LLC (this "Agreement") is executed as of January 1, 2001 by PECO Energy Company (the "Member"). The Member, intending to be legally bound, hereby states the terms of its agreement as to the affairs of, and the conduct of the business of, a limited liability company (the "Company") to be managed by the Member, as follows:

ARTICLE 1
FORMATION, PURPOSE AND DEFINITIONS

1.1 ESTABLISHMENT OF LIMITED LIABILITY COMPANY. The Member has caused a limited liability company to be established and organized on or about December 27, 2000 pursuant to the provisions of the Pennsylvania Limited Liability Company Law of 1994, as amended (the "Act"), to carry on a business for profit. This Agreement, in accordance with the Act, states terms relating to the governance and business affairs of the Company. The Member is hereby admitted to membership in the Company and, as provided in SECTION 5.2 until this Agreement is amended appropriately to contemplate the admission of additional members and their right to conduct the Company's business, the Member shall be the sole member of the Company.

1.2 NAME. The name of the Company is Exelon Generation Company, LLC. The Company may conduct its activities under any other permissible name designated by the Member. The Member shall be responsible for complying with any registration requirements if an alternate name is used.

1.3 PRINCIPAL PLACE OF BUSINESS OF THE COMPANY. The principal place of business of the Company shall be located at 300 Exelon Way, Kennett Square, Chester County, Pennsylvania 19348, or at such other or additional locations as the Member, in its discretion, may determine. The registered agent for the service of process, if any, and the registered office of the Company shall be the person (if any) and location stated in the Company's Certificate of Organization filed with the Pennsylvania Department of State. The Member may, from time to time, change such registered agent and registered office, by appropriate filings as required by law.

1.4 PURPOSE. The Company's purpose shall be to engage in all lawful businesses for which limited liability companies may be organized under the Act. The Company shall have the authority to do all things necessary or advisable in order to accomplish such purposes.

1.5 DURATION. Unless the Company shall be earlier terminated in accordance with Article 7, it shall continue in existence in perpetuity.

1.6 OTHER ACTIVITIES OF MEMBER. The Member may engage in or possess an interest in other business ventures of any nature, whether or not similar to or competitive with the activities of the Company.

1.7 FEDERAL INCOME TAX STATUS. The Company has been structured to qualify as an entity that will not be required to pay income tax at the state or federal level.

ARTICLE 2
CAPITAL CONTRIBUTIONS

2.1 CAPITAL CONTRIBUTIONS. The Member, as its contribution to the capital of the Company, hereby contributes $1,000 to the Company. The receipt by the Member from the Company of any distributions whatsoever (whether pursuant to SECTION 3.1 or otherwise and whether or not such distributions may be considered a return of capital) shall not increase the Member's obligations under this SECTION 2.1.

2.2 ADDITIONAL CAPITAL CONTRIBUTIONS. Except as provided in
SECTION 2.1, the Member may, but shall not be required to, make additional capital contributions to the Company.

2.3 LIMITATION OF LIABILITY OF MEMBER. The Member shall not have any liability or obligation for any debts, liabilities or obligations of the Company, or of any agent or employee of the Company, beyond the Member's capital contribution, except as may be expressly required by this Agreement or applicable law.

2.4 LOANS. If the Member makes any loans to the Company, or advances money on its behalf, the amount of any such loan or advance shall not be deemed an increase in, or contribution to, the capital contribution of the Member. Interest shall accrue on any such loan at an annual rate agreed to by the Company and the Member (but not in excess of the maximum rate allowable under applicable usury laws).

ARTICLE 3
DISTRIBUTIONS

3.1 DISTRIBUTIONS. The Company shall make cash distributions to the Member at the times and in the manner that the Member deems appropriate and as permitted by law.

ARTICLE 4
RIGHTS AND DUTIES OF THE MEMBER

4.1 MANAGEMENT. The business and affairs of the Company shall be managed solely by the Member. In doing so, the Member shall not be deemed a "manager" within the meaning of the Act. The Member shall direct, manage, and control the business of the Company to the best of the Member's ability.

4.2 ACTION BY WRITTEN CONSENT. Any action by the Member may be taken in the form of a written consent rather than at a Member's meeting. The Company shall maintain a permanent record of all actions taken by the Member.

4.3 POWERS OF THE MEMBER. The Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by the Member under the laws of the Commonwealth of Pennsylvania. Without limiting the generality of the foregoing, the Member shall have the specific power and authority to cause the Company, in the Company's own name:

(a) To sell or otherwise dispose of all or substantially all of the assets of the Company (or a substantial portion of the assets) as part of a single transaction or plan so long as that disposition is not in violation of or a cause of a default under any other agreement to which the Company may be bound;

(b) To execute all instruments and documents, including, without limitation, checks; drafts; notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage or disposition of the Company's property; assignments; bills of sale; leases; partnership agreements; operating agreements of other limited liability companies; and any other instruments or documents necessary, in the opinion of the Member, to the business of the Company;

(c) To enter into any and all other agreements on behalf of the Company, with any other person for any purpose, in such form as the Member may approve;

(d) To make distributions in accordance with SECTION 3.1; and

(e) To do and perform all other acts as may be necessary or appropriate to the conduct of the Company's business.

Unless authorized in writing to do so by this Agreement or by the Member, no attorney-in-fact, employee, or other agent of the Company shall have any power or authority to bind the Company in any way, to pledge its credit or to render it liable pecuniarily for any purpose.

4.4 OFFICERS AND AGENTS. The Company may have such officers and agents with such respective rights and duties as the Member may from time to time determine. The Member may delegate to one or more agents, officers, employees or other persons (who shall not be deemed "managers" within the meaning of the Act) any and all powers to manage the Company that the Member possesses under this Agreement and the Act.

4.5 MEMBER HAS NO EXCLUSIVE DUTY TO COMPANY. The Member shall not be required to manage the Company as its sole and exclusive function and, as provided in SECTION 1.6, it may have other business interests and may engage in other activities in addition to those relating to the Company. The Company shall not have any right, by virtue of this Agreement, to share or participate in such other investments or activities of the Member or to the income or proceeds derived from such investments or activities. The Member shall incur no liability to the Company as a result of engaging in any other business or venture.

4.6 INDEMNIFICATION. The Member shall, and any officer, employee or agent of the Company may in the Member's absolute discretion, be indemnified by the Company to the fullest extent permitted by Section 8945 of the Act and as may be otherwise permitted by applicable law.

ARTICLE 5
TRANSFER OF MEMBERSHIP INTERESTS

5.1 GENERAL RESTRICTION. Until and unless this Agreement is appropriately amended to contemplate the admission of additional members, the Member may not transfer, whether voluntarily or involuntarily, any portion of its membership interest in the Company; provided, however, that the Member may assign or otherwise transfer, as a whole or in one or more partial or successive assignments or transfers, its membership interest to any direct or indirect subsidiary of the holding company of which the Member is then a direct or indirect subsidiary or to such holding company ("Permitted Transfers") and following any such Permitted Transfer(s), such permitted transferee shall be considered hereunder and for all purposes under the Act as the Member. For purposes of this Agreement, a "transfer" includes, but is not limited to, any sale, assignment, gift, exchange, pledge, hypothecation, collateral assignment or creation of any security interest.

5.2 SINGLE MEMBER. Until and unless this Agreement is appropriately amended to contemplate the admission of additional members, the Company shall at all times have only one Member.

ARTICLE 6
DISSOCIATION OF THE MEMBER

6.1 DISSOCIATION. The Member shall not be entitled voluntarily to withdraw, resign or dissociate from the Company or assign his membership interest prior to the dissolution and winding-up of the Company, and any attempt by the Member to do so shall be ineffective; provided, however, that "Permitted Transfers" under SECTION 5.1 shall not be a violation of this SECTION 6.1.

ARTICLE 7
DISSOLUTION AND LIQUIDATION

7.1 EVENTS TRIGGERING DISSOLUTION. The Company shall dissolve and commence winding up and liquidation upon the first to occur of any of the following ("Liquidating Events"):

(a) the written consent of the Member; or

(b) the entry of a decree of judicial dissolution under Section 8972 of the Act.

The Company shall not be dissolved for any other reason, including without limitation, the Member's becoming bankrupt or executing an assignment for the benefit of creditors and any such bankruptcy or assignment shall not effect a transfer of any portion of Member's membership interest in the Company.

7.2 LIQUIDATION. Upon dissolution of the Company in accordance with SECTION 7.1, the Company shall be wound up and liquidated by the Member or by a liquidating manager selected by the Member. The proceeds of such liquidation shall be applied and distributed in the following order of priority:

(a) to creditors, including the Member if it is a creditor, in the order of priority as established by law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for which reasonable provision for payment has been made and liabilities for distributions to the Member under Section 8932 or 8933 of the Act; and then

(b) to the setting up of any reserves in such amount and for such period as shall be necessary to make reasonable provisions for payment of all contingent, conditional or unmatured claims and obligations known to the Company and all claims and obligations known to the Company but for which the identity of the claimant is unknown; and then

(c) to the Member, which liquidating distribution may be made to the Member in cash or in kind, or partly in cash and partly in kind.

7.3 CERTIFICATE OF DISSOLUTION. Upon the dissolution of the Company and the completion of the liquidation and winding up of the Company's affairs and business, the Member shall on behalf of the Company prepare and file a certificate of dissolution with the Pennsylvania Department of State, if and as required by the Act. When such certificate is filed, the Company's existence shall cease.

ARTICLE 8
ACCOUNTING AND FISCAL MATTERS

8.1 FISCAL YEAR. The fiscal year of the Company shall be the calendar year.

8.2 METHOD OF ACCOUNTING. The Member shall select a method of accounting for the Company as deemed necessary or advisable and shall keep, or cause to be kept, full and accurate records of all transactions of the Company in accordance with sound accounting principles consistently applied.

8.3 FINANCIAL BOOKS AND RECORDS. All books of account shall, at all times, be maintained in the principal office of the Company or at such other location as specified by the Member.

ARTICLE 9
MISCELLANEOUS

9.1 BINDING EFFECT. Except as otherwise provided in this Agreement to the contrary, this Agreement shall be binding upon and inure to the benefit of the Member and, subject to Article 5, its successors and assigns.

9.2 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania without reference to conflict of laws principles.

9.3 SEVERABILITY. The invalidity or unenforceability of any particular provision of this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

9.4 GENDER. As used in this Agreement, the masculine gender shall include the feminine and the neuter, and vice versa, and the singular shall include the plural.

IN WITNESS WHEREOF, the Member has signed this instrument as of the date first written above.

PECO ENERGY COMPANY

By:      /s/ Edward J. Cullen, Jr.
Name:    Edward J. Cullen, Jr.
Title:   Authorized Person

EXELON GENERATION COMPANY, LLC

FIRST UNION NATIONAL BANK

TRUSTEE

INDENTURE

DATED AS OF JUNE 1, 2001

6.95% SENIOR NOTES DUE 2011

TABLE OF CONTENTS

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.....................................................................................1
Section 102. Compliance Certificates and Opinions............................................................9
Section 103. Form of Documents Delivered to Trustee.........................................................10
Section 104. Acts of Holders; Record Dates..................................................................10
Section 105. Notices, Etc., to Trustee and Company..........................................................11
Section 106. Notice to Holders, Waiver......................................................................11
Section 107. Conflict with Trust Indenture Act..............................................................12
Section 108. Effect of Headings and Table of Contents.......................................................12
Section 109. Successors and Assigns.........................................................................12
Section 110. Separability Clause............................................................................12
Section 111. Benefits of Indenture..........................................................................12
Section 112. Governing Law..................................................................................12
Section 113. Legal Holidays.................................................................................12

ARTICLE TWO

SECURITY FORMS

Section 201. Forms Generally................................................................................13
Section 202. Form of Face of Security.......................................................................13
Section 203. Form of Reverse of Security....................................................................17
Section 204. Additional Provisions Required in Global Security..............................................20
Section 205. Form of Trustee's Certificate of Authentication................................................21

ARTICLE THREE

THE SECURITIES

Section 301. Title and Terms................................................................................21
Section 302. Denominations..................................................................................22
Section 303. Execution, Authentication, Delivery and Dating.................................................22
Section 304. Temporary Securities...........................................................................23
Section 305. Registration; Restriction on Transfer and Exchange.............................................23
Section 306. Mutilated, Destroyed, Lost and Stolen Securities...............................................27
Section 307. Payment of Interest; Interest Rights Preserved.................................................28
Section 308. Persons Deemed Owners..........................................................................29
Section 309. Cancellation...................................................................................29
Section 310. Computation of Interest........................................................................29
Section 311. CUSIP Numbers..................................................................................29

ARTICLE FOUR

SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture........................................................30
Section 402. Application of Trust Money.....................................................................31

ARTICLE FIVE

REMEDIES

Section 501. Events of Default..............................................................................31
Section 502. Acceleration of Maturity; Rescission and Annulment.............................................32
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee................................33
Section 504. Trustee May File Proofs of Claim...............................................................34
Section 505. Trustee May Enforce Claims Without Possession of Securities....................................34
Section 506. Application of Money Collected.................................................................34
Section 507. Limitation on Suits............................................................................35
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest......................35
Section 509. Restoration of Rights and Remedies.............................................................35
Section 510. Rights and Remedies Cumulative.................................................................36
Section 511. Delay or Omission Not Waiver...................................................................36
Section 512. Control by Holders.............................................................................36
Section 513. Waiver of Past Default.........................................................................36
Section 514. Undertaking for Costs..........................................................................37
Section 515. Waiver of Stay or Extension Laws...............................................................37

ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities............................................................37
Section 602. Notice of Defaults.............................................................................38
Section 603. Certain Rights of Trustee......................................................................38
Section 604. Not Responsible for Recitals or Issuance of Securities.........................................39
Section 605. May Hold Securities............................................................................39
Section 606. Money Held in Trust............................................................................39
Section 607. Compensation and Reimbursement.................................................................39
Section 608. Disqualification; Conflicting Interests........................................................40
Section 609. Corporate Trustee Required; Eligibility........................................................40
Section 610. Resignation and Removal; Appointment of Successor..............................................40
Section 611. Acceptance of Appointment by Successor.........................................................41
Section 612. Merger, Conversion, Consolidation or Succession to Business....................................41
Section 613. Preferential Collection of Claims Against Company..............................................42

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701. Company to Furnish Trustee Names and Addresses of Holders......................................42
Section 702. Preservation of Information; Communications to Holders.........................................42
Section 703. Reports by Trustee.............................................................................43
Section 704. Reports by Company.............................................................................43

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms...........................................43
Section 802. Successor Substitute...........................................................................44

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.............................................44
Section 902. Supplemental Indentures with Consent of Holders................................................45
Section 903. Execution of Supplemental Indentures...........................................................45
Section 904. Effect of Supplemental Indenture...............................................................46
Section 905. Conformity with Trust Indenture Act............................................................46
Section 906. Reference in Securities to Supplemental Indentures.............................................46

ARTICLE TEN

COVENANTS
Section 1001. Payment of Principal, Premium and Interest.....................................................46
Section 1002. Maintenance of Office or Agency................................................................46
Section 1003. Money for Security Payments to Be Held in Trust................................................47
Section 1004. Statement by Officers as to Default............................................................48
Section 1005. Existence......................................................................................48
Section 1006. Payment of Taxes and Other Claims..............................................................48
Section 1007. Restrictions on Certain Liens..................................................................48
Section 1008. Limitation on Sale/Leaseback Transactions......................................................49
Section 1009. Limitation on Asset Sales......................................................................50

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Right of Redemption............................................................................50
Section 1102. Applicability of Article.......................................................................50

iii

Section 1103. Election to Redeem; Notice to Trustee..........................................................50
Section 1104. Selection by Trustee of Securities to Be Redeemed..............................................51
Section 1105. Notice of Redemption...........................................................................51
Section 1106. Deposit of Redemption Price....................................................................52
Section 1107. Securities Payable on Redemption Date..........................................................52
Section 1108. Securities Redeemed in Part....................................................................52

ARTICLE TWELVE

DEFEASANCE AND COVENANT DEFEASANCE

Section 1201. Company's Option to Effect Defeasance or Covenant Defeasance...................................53
Section 1202. Defeasance and Discharge.......................................................................53
Section 1203. Covenant Defeasance............................................................................53
Section 1204. Conditions to Defeasance or Covenant Defeasance................................................54
Section 1205. Deposited Money and Government Securities to Be Held in Trust; Miscellaneous Provisions........55
Section 1206. Reinstatement..................................................................................55

Annex A Form of Restricted Securities Certificate

Annex B Form of Regulation S Certificate

INDENTURE, dated as of June 1, 2001, between EXELON GENERATION COMPANY, LLC, a limited liability company duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Company"), having its principal office at Kennett Square, Pennsylvania, and First Union National Bank, a national banking association, as Trustee (herein called the "Trustee"), having its corporate trust office at Charlotte, North Carolina.

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of its 6.95% Senior Notes due 2011 (herein called the "Original Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. The Company has agreed pursuant to a Registration Rights Agreement to use its best efforts to effect a registered exchange offer for the Original Securities (the "Registered Exchange Offer"). The Securities to be issued in the Registered Exchange Offer (the "Exchange Securities") will be issued under the Indenture and will have substantially the same terms as the Original Securities. The Original Securities and the Exchange Securities shall rank equally in right of payment with all existing and future unsecured and unsubordinated obligations of the Company.

All things necessary to make the Original Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, and intending to be legally bound hereby, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE ONE

Definitions and Other Provisions
of General Application

Section 101. DEFINITIONS.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) each of the terms defined in this Article has the meaning assigned to it in this Article and include the plural as well as the singular;

(2) each other term used herein which is defined in the Trust Indenture Act, either directly or by reference therein, has the meaning assigned to it therein;

(3) each accounting term not otherwise defined herein has the meaning assigned to it in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and

(4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

"Act" when used with respect to any Holder, has the meaning specified in Section 104.

"Additional Securities" means Securities issued as Additional Securities pursuant to Section 203 of the Indenture.

"Adjusted Treasury Rate" has the meaning set forth in the form of the Securities contained in Section 203.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"Agent Member" means any member of, or participant in, the Depositary.

"Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, in each case to the extent applicable to such transaction and as in effect from time to time.

"Asset Sale" means any sale, lease, sale-leaseback, transfer, conveyance or other disposition of any assets, including by way of the issue by the Company or any Subsidiary of the Company of any equity interest in any Subsidiary, except (i) in the ordinary course of business to the extent that such property is worn out or is no longer useful or necessary in connection with the operation of the Company's business or sale inventory, (ii) if, prior to such conveyance or disposition, each Rating Agency provides a ratings reaffirmation of the then existing rating of the Securities after giving effect to such Asset Sale or (iii) the sale of the stock or assets of Sithe Energies, Inc. ("Sithe") or any of its subsidiaries, as part of a Sale/Leaseback Transaction or other financing involving the acquisition of the remaining 50.1% equity interest in Sithe. For purposes of this definition, "Rating Agency" means each of Standard & Poor's Rating Services, Moody's Investors Services, Inc. and Fitch, Inc.

"Authorizing Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Governing Body and to be in full force and effect on the date of such certification, and delivered to the Trustee.

"Beneficial Owner" means, for Securities in book-entry from, the person who acquires an interest in the Securities which is reflected on the records of the Depositary through its participants.

"Business Day" means any day that is not a day on which banking institutions in The City of New York are authorized or required by law or regulation to close.

"Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.

"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person.

"Company Request" or "Company Order" means a written request or order signed in the name of the Company by its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

"Comparable Treasury Issue" has the meaning set forth in the form of the Securities contained in Section 203.

"Comparable Treasury Price" has the meaning set forth in the form of the Securities contained in Section 203.

"Corporate Trust Office" means the principal office of the Trustee in The City of Charlotte, North Carolina at which at any particular time its corporate trust business shall be administered.

"Corporation" means a corporation, association, company, joint-stock company or business trust.

"Covenant Defeasance" has the meaning specified in Section 1203.

"Defaulted Interest" has the meaning specified in Section 307.

"Defeasance" has the meaning specified in Section 1202.

"Depositary" means, with respect to the Securities issuable or issued in whole or in part in the form of one or more Global Securities, DTC for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers' Certificate delivered to the Trustee.

"DTC" means The Depository Trust Company.

"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels office) as operator of the Euroclear system.

"Event of Default" has the meaning specified in Section 501.

"Exchange Act" means the Securities Exchange Act of 1934, as amended (or any successor act), and the rules and regulations thereunder.

"Exchange Offer" has the meaning set forth in the form of the Securities contained in Section 202.

"Exchange Registration Statement" has the meaning set forth in the form of the Securities contained in Section 202.

"Exchange Security" means any Security issued in exchange for an Original Security or Original Securities pursuant to the Exchange Offer.

"Global Security" means a Security in the form prescribed in
Section 204 evidencing all or part of the Securities, issued to the Depositary or its nominee, and registered in the name of such Depositary or its nominee.

"Governing Body" means the governing body of the Company or any duly authorized committee of that body.

"Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which obligations or guarantee the full faith and credit of the United States is pledged and which have a remaining weighted average life to maturity of not more than 18 months from the date of investment therein.

"Holder" means a Person in whose name a Security is registered in the Security Register.

"Indebtedness" of any person means (i) all indebtedness of such person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such person to pay the deferred purchase price of property or services, (iv) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (v) all lease obligations of such person characterized as capital lease obligations under U.S. generally accepted accounting principles (excluding leases of property in the ordinary course of business), and (vi) all Indebtedness of the type referred to in clauses (i) through (v) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien or security interest on property of such person.

"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and

any such supplemental indenture, the provisions of the Trust Indenture Act, if any, that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.

"Initial Purchasers" means Salomon Smith Barney Inc., Credit Suisse Boston Corporation, Banc One Capital Markets, Inc., J.P. Morgan Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Pryor, Counts & Co., Inc.

"Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities.

"Investment Company Act" means the Investment Company Act of 1940, as amended.

"Maturity", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

"Officers' Certificate" means a certificate signed by the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer of the Company.

"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be reasonably acceptable to the Trustee.

"Original Securities" means all Securities other than Exchange Securities.

"Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, EXCEPT:

(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; PROVIDED THAT, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

(iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such securities are held by

a bona fide purchaser in whose hands such Securities are valid obligations of the company.

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded, Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

"Paying Agent" means the Company or any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company.

"Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

"Purchase Agreement" means the Purchase Agreement, dated June 11, 2001, among the Company and the Initial Purchasers.

"Quotation Agent" has the meaning set forth in the form of the Securities contained in Section 203.

"Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

"Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

"Reference Treasury Dealer Quotations" has the meaning set forth in the form of the Securities contained in Section 203.

"Registered Securities" means the Exchange Securities and all other Securities sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act, together with their respective Successor Securities.

"Registration Rights Agreement" means the Registration Rights Agreement among the Company and the Initial Purchasers, dated June 14, 2001, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

"Regular Record Date" for the interest payable on any Interest Payment Date means the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

"Regulation S" means Regulation S under the Securities Act (or any successor provision), as it may be amended from time to time.

"Regulation S Certificate" means a certificate substantially in the form set forth in Annex B.

"Regulation S Global Security" has the meaning specified in
Section 201.

"Regulation S Legend" means a legend substantially in the form of the legend required in the form of Security set forth in Section 202 to be placed upon each Regulation S Security.

"Regulation S Securities" means all Securities required pursuant to Section 305(b) to bear a Regulation S Legend. Such term includes the Regulation S Global Security.

"Resale Registration Statement" has the meaning set forth in the form of the Securities contained in Section 202.

"Restricted Global Security" has the meaning specified in Section 201.

"Restricted Period" means the period of 41 consecutive days beginning on and including the later of (i) the day on which Securities are first offered to persons other than distributors (as defined in Regulation S) in reliance on Regulation S and (ii) the day on which the closing of the offering of Securities pursuant to the Purchase Agreement occurs.

"Restricted Securities" means all Securities required pursuant to
Section 305(c) to bear the Restricted Securities Legend. Such term includes the Restricted Global Security.

"Restricted Securities Certificate" means a certificate substantially in the form set forth in Annex A.

"Restricted Securities Legend" means a legend substantially in the form of the legend required in the form of Security set forth in Section 202 to be placed upon each Restricted Security.

"Rule 144A" means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

"Rule 144A Securities" means all Securities initially distributed in connection with the offering of the Original Securities by the Initial Purchasers or in connection with the offering of Additional Securities in reliance upon Rule 144A.

"Sale/Leaseback Transaction" means, with respect to any Person, any direct or indirect arrangement pursuant to which any real or personal property is sold by such Person and is thereafter leased back from the purchaser or transferee thereof by such Person.

"Securities" means the Original Securities, the Exchange Securities and the Additional Securities, if any.

"Securities Act" means the Securities Act of 1933, as amended (or any successor act), and the rules and regulations thereunder.

"Securities Act Legend" means the Restricted Securities Legend and/or the Regulation S Legend.

"Security Register" and "Security Registrar" have the respective meanings specified in Section 305.

"Special Interest" has the meaning set forth in the form of the Original Security contained in Section 202. Unless the context otherwise requires, references herein to "interest" on the Securities shall include Special Interest.

"Special Interest Notice" has the meaning specified in Section 301.

"Special Interest Payment Event" has the meaning set forth in the form of the Original Security contained in Section 202.

"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable.

"Step-Down Date" has the meaning set forth in the form of the Original Security contained in Section 202.

"Step-Up" has the meaning set forth in the form of the Original Security contained in Section 202.

"Subsidiary" means a corporation or other entity of which sufficient voting stock or other ownership or economic interests having ordinary voting power to elect a majority of the board of directors (or equivalent body) is held, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the

election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

"Successor Security" of any particular Security means every Security issued after, and evidencing all or a portion of the same debt as that evidenced by, such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

"Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president".

Section 102. COMPLIANCE CERTIFICATES AND OPINIONS.

Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained or opinion are based;

(3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 104. ACTS OF HOLDERS; RECORD DATES.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be, with regard to any record date. Only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

(d) The ownership of Securities shall be proved by the Security Register.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration, or

(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

Section 106. NOTICE TO HOLDERS, WAIVER.

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but

such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 107. CONFLICT WITH TRUST INDENTURE ACT.

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 109. SUCCESSORS AND ASSIGNS.

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 110. SEPARABILITY CLAUSE.

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 111. BENEFITS OF INDENTURE.

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 112. GOVERNING LAW.

This Indenture and the Securities shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

Section 113. LEGAL HOLIDAYS.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need

not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

ARTICLE TWO

Security Forms

Section 201. FORMS GENERALLY.

The Securities and the Trustee's certificates of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities.

Upon their original issuance, the Rule 144A Securities and the Regulation S Securities shall be issued in the form of separate Global Securities registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Securities represented thereby (or such other accounts as they may direct). The Global Security representing Rule 144A Securities, together with its Successor Securities which are Global Securities other than Regulation S Global Securities, are collectively herein called the "Restricted Global Security". The Global Security representing Regulation S Securities, together with its Successor Securities which are Global Securities other than Restricted Global Securities, are collectively herein called the "Regulation S Global Security".

The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

Section 202. FORM OF FACE OF SECURITY.

[If the Security is a Global Security, insert the legends required by Section 204 of the Indenture.]

[If Restricted Securities, then insert -- THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM AND IN ANY EVENT MAY BE SOLD OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE

WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE.

EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXTEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. EACH HOLDER OF THIS SECURITY REPRESENTS TO EXELON GENERATION COMPANY, LLC THAT (A) SUCH HOLDER WILL NOT SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY (WITHOUT THE CONSENT OF EXELON GENERATION COMPANY, LLC) OTHER THAN (I) TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A UNDER THE SECURITIES ACT, (II) IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES (II), (III) OR (IV), TO THE RECEIPT BY EXELON GENERATION COMPANY, LLC OF AN OPINION OF COUNSEL OR SUCH OTHER EVIDENCE ACCEPTABLE TO EXELON GENERATION COMPANY, LLC THAT SUCH RESALE, PLEDGE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO HEREIN AND DELIVER TO THE TRANSFEREE (OTHER THAN A QUALIFIED INSTITUTIONAL BUYER) PRIOR TO THE SALE OF A COPY OF THE TRANSFER RESTRICTIONS APPLICABLE HERETO (COPIES OF WHICH MAY BE OBTAINED FROM THE TRUSTEE).]

[If Regulation S Securities, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER SUCH LAWS.]

EXELON GENERATION COMPANY, LLC

6.95% SENIOR NOTES DUE 2011

CUSIP NO.

No. $

Exelon Generation Company, LLC, a limited liability company duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received and intending to be legally bound hereby, hereby promises to pay to , or registered assigns, the principal sum set forth above [to be inserted in Global Securities - or such other principal sum on the schedule attached hereto (which shall not exceed U.S. $ ) (which principal amount may from time to time be increased or decreased to such other principal amounts by adjustments made on the records of the Trustee hereinafter referred to in accordance with the Indenture)] [to be inserted in definitive Securities - upon surrender] on June 15, 2011, and to pay interest thereon from or from the most recent Interest Payment Date to which interest has been paid or duly provided for [If Exchange Securities, then insert: on the Original Securities], semi-annually on June 15 and December 15 in each year commencing , at the rate of 6.95% per annum, until the principal hereof is paid or made available for payment. [If Original Securities, then insert: ; PROVIDED, HOWEVER, that if (i) on or prior to the 360th day following the original issue date of the Securities, neither (x) an exchange offer (the "Exchange Offer") registered pursuant to the Company's registration statement (the "Exchange Registration Statement") under the Securities Act, registering a security substantially identical to this Security (except that such Security will not contain terms with respect to the Special Interest payments described below or transfer restrictions) has been consummated nor (y) if applicable, in lieu thereof, a registration statement registering this Security for resale (a "Resale Registration Statement") has become or been declared effective; or (ii) either the Exchange Registration Statement or, if applicable, the Resale Registration Statement is filed and declared effective (except as specifically permitted therein) but shall thereafter cease to be effective without being succeeded promptly by an additional registration statement filed and declared effective, in each case (i) and (ii) upon the terms and conditions set forth in the Registration Rights Agreement (each such event referred to in clauses (i) and (ii), a "Special Interest Payment Event"), then additional interest will accrue (in addition to interest at the stated rate above) (the "Step-Up") from the date of such Special Interest Payment Event at a rate of 0.50% per annum, determined daily, on the principal amount hereof, and such additional interest shall be payable until such time (the "Step Down Date") as no Special Interest Payment Event is in effect or the first date the Securities become freely tradeable under Rule 144(k) of the Securities Act. Interest accruing as a result of the Step-Up (which shall be computed on the basis of a 365-day year and the actual number of days elapsed) is referred to herein as "Special Interest." Accrued Special Interest, if any, shall be paid semi-annually on June 15 and December 15 in each year. Any accrued and unpaid interest (including Special Interest) on this Security upon the issuance of an Exchange Security (as defined in the Indenture) in exchange for this Security shall cease to be payable to the Holder hereof but such accrued and unpaid interest (including Special Interest) shall be payable on the next Interest Payment Date for such Exchange Security to the Holder thereof on the related Regular Record Date.]

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. If any Interest Payment Date falls on a day that is not a Business Day, it shall be postponed to the following Business Day. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

If this Security is issued in the form of a Global Security, payments of the principal of (and premium, if any) and interest on this Security shall be made in immediately available funds to the Depositary. If this Security is issued in certificated form, payment of the principal of (and premium, if any) and interest on this Security will be made at the corporate trust office of the Trustee or the office of the Company in The City of New York, New York maintained for such purpose, and at any other office or agency maintained by the Company for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:

EXELON GENERATION COMPANY, LLC

By:

Name:

Title:

Attest:

Name:
Title:

Section 203. FORM OF REVERSE OF SECURITY.

This Security is one of a duly authorized issue of [Original]
[Exchange] Securities of the Company designated as its 6.95% Senior Notes due 2011 (herein called the "Securities"), issued under an Indenture, dated as of June 1, 2001 (herein called the "Indenture"), between the Company and First Union National Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture). The Securities will be unlimited in aggregate principal amount. The Original Securities will initially be issued in an aggregate principal amount of $700,000,000. The Company may, without the consent of the Holders, create and issue additional Securities (the "Additional Securities") ranking equally with the Securities and otherwise similar in all respects so that the Additional Securities shall be consolidated and form a single series with the Securities. The Company may not issue Additional Securities if an Event of Default shall occur and be continuing with respect to the Securities. [If Original Securities, then insert: The Company may issue Exchange Securities substantially identical to this Security (except that such Exchange Security will not contain terms with respect to the payment of Special Interest (as described on the face of this Security) or transfer restrictions) pursuant to an Exchange Offer or, in lieu thereof, a Resale Registration Statement.] Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

The Securities are subject to redemption upon not less than 30 nor more than 60 days' notice by mail, at any time, as a whole or in part, at the election of the Company, at a Redemption Price equal to the greater of (a) 100% of the principal amount of the Securities to be redeemed, plus accrued interest to the Redemption Date, or (b) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of payments of interest accrued as of the Redemption Date), discounted to the Redemption Date on a semi-annual basis at the Adjusted Treasury Rate plus 25 basis points, plus accrued interest to the Redemption Date.

The Redemption Price will be calculated assuming a 360-day year consisting of twelve 30-day months.

"Adjusted Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Redemption Date.

"Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities that would be used, at the time of the selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities.

"Comparable Treasury Price" means, with respect to any Redemption Date: (a) the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.

"Quotation Agent" means the Reference Treasury Dealer appointed by the Company.

"Reference Treasury Dealer" means (a) each of Salomon Smith Barney Inc., Credit Suisse First Boston Corporation and Banc One Capital Markets, Inc. and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), in which case the Company shall substitute another Primary Treasury Dealer; and (b) any other Primary Treasury Dealer selected by the Company.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding that Redemption Date.

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Securities do not have the benefit of any sinking fund obligations.

In the event of a deposit or withdrawal of an interest in this Security (including upon an exchange, transfer, redemption or repurchase of this Security in part only) effected in accordance with the Applicable Procedures, the Security Registrar, upon receipt of notice of such event from the Depositary's custodian for this Security, shall make an adjustment on its records to reflect an increase or decrease of the Outstanding principal amount of this Security resulting from such deposit or withdrawal, as the case may be.

If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this Security, or (ii) certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth therein.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 50% in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Outstanding Securities a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in The City of New York, New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of the same tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof as provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of the same tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Interest [if an Original Security, then insert: (other than Special Interest)] on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Section 204. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.

Any Global Security issued hereunder shall, in addition to the provisions contained in Sections 202 and 203, bear a legend in substantially the following form:

[If a Global Security, insert -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[If a Global Security to be held by The Depository Trust Company, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

Section 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

This is one of the Securities of the series referred to in the within-mentioned Indenture.

FIRST UNION NATIONAL BANK
AS TRUSTEE

By:
AUTHORIZED OFFICER

ARTICLE THREE

The Securities

Section 301. TITLE AND TERMS.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Original Securities will initially be issued in an aggregate principal amount of $700,000,000, except for Additional Securities and Securities authenticated and delivered pursuant to Section 306. The Company may, without the consent of the Holders, create and issue Additional Securities ranking equally with the Securities and otherwise similar in all respects so that the Additional Securities shall be consolidated and form a single series with the Securities. The Trustee shall authenticate Additional Securities upon receipt of an Officers' Certificate, subject to Section 303, specifying the amount of Additional Securities to be authenticated.

The Company may issue as another series of Securities Exchange Securities from time to time pursuant to an Exchange Offer, in each case pursuant to a Authorizing Resolution, subject to Section 303, included in an Officers' Certificate delivered to the Trustee, in authorized denominations in exchange for a like principal amount of Original Securities. Upon any such exchange the Original Securities shall be canceled in accordance with Section 309 and shall no longer be deemed Outstanding for any purpose.

The Securities shall be known and designated as the "6.95% Senior Notes due 2011" of the Company. Their Stated Maturity shall be June 15, 2011, and they shall bear interest from June 14, 2001, in the case of the Original Securities, from the date of authentication, in the case of Additional Securities, and from the most recent Interest Payment Date to which interest on the Original Securities has been paid, in the case of the Exchange Securities and thereafter, in all cases from the most recent Interest Payment Date to which interest has been paid or duly provided for, at a per annum interest rate of 6.95%, until the principal thereof is paid or made available for payment; PROVIDED, HOWEVER, with respect to Original Securities, if there has been a Special Interest Payment Event, a Step-Up will occur and the Original Securities will from such date bear Special Interest until the Step-Down Date. Accrued Special Interest, if any, shall be paid in cash in arrears semi-annually on June 15 and December 15 in each year, and the amount of accrued Special Interest shall be determined on the basis of a 365-day year and the number of

days actually elapsed. In connection with the cash payment of any Special Interest, the Company shall notify the Trustee (the "Special Interest Notice") on or before the later to occur of (i) the Regular Record Date preceding such payment of any Special Interest, and (ii) the date on which any such Additional Interest begins to accrue, of the amount of Special Interest to be paid by the Company on the next Interest Payment Date. In the event of the occurrence of a Step-Down Date during the period between the date on which the Special Interest Notice is given and the next Interest Payment Date, the Company shall so notify the Trustee and shall provide the Trustee with the revised amount of Special Interest to be paid by the Company on such Interest Payment Date.

If the Securities are issued in the form of a Global Security, payments of the principal of (and premium, if any) and interest on the Securities shall be made in immediately available funds to the Depositary. If the Securities are issued in certificated form, the principal of and premium, if any, and interest on the Securities shall be payable at the corporate trust office of the Trustee in The City of New York, New York, maintained for such purpose and at any other office or agency maintained by the Company for such purpose; PROVIDED, HOWEVER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

The Securities shall be redeemable as provided in Article Eleven.

The Securities shall not have the benefit of any sinking fund obligations.

Section 302. DENOMINATIONS.

The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof.

Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

The Securities shall be executed on behalf of the Company by its President or one of its Vice Presidents and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with the items specified in the following paragraph; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.

The Company's request to the Trustee to authenticate Securities shall be accompanied by the following:

(1) A Company Order requesting authentication and specifying the principal amount of the Securities to be authenticated and whether such Securities are Original Securities, Additional Securities or Exchange Securities.

(2) An Authorizing Resolution.

(3) In the case of Additional Securities, an Officer's Certificate that no Event of Default has occurred and is continuing.

(4) In the case of Exchange Securities, delivery to the Trustee of a like principal amount of Original Securities for cancellation.

(5) An Opinion of Counsel that the Securities have been duly and validly issued in accordance with the Indenture and are entitled to the rights and benefits set forth herein and, in the case of the issuance of Exchange Securities, that the exchange for Original Securities has been effected in compliance with the Act.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

Section 304. TEMPORARY SECURITIES.

Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. The Global Securities shall be issued only as temporary Securities.

If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

Section 305. REGISTRATION; RESTRICTION ON TRANSFER AND EXCHANGE.

(a) The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided.

Such Security Register shall distinguish between Original Securities, Exchange Securities and any Additional Securities.

Subject to other provisions of this Indenture regarding restrictions on transfer, upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 1002 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same tenor of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

At the option of the Holder and subject to the other provisions of this Section 305, Securities may be exchanged for other Securities of the same tenor of any authorized denominations and of a like aggregate principal amount and bearing the applicable legends set forth in Section 202, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1108 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section

1104 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

(b) CERTAIN TRANSFERS AND EXCHANGES. Notwithstanding any other provision of this Indenture or the Securities, transfers and exchanges of Securities and beneficial interests in a Global Security of the kinds specified in this Section 305(b) shall be made only in accordance with this Section 305(b).

(i) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A Security that is not a Global Security may be transferred, in whole or in part, to a Person who takes delivery in the form of another Security that is not a Global Security as provided in Section 305(a), PROVIDED that, if the Security to be transferred in whole or in part is a Restricted Security, or is a Regulation S Security and the transfer is to occur during the Restricted Period, then the Trustee shall have received (i) a Restricted Securities Certificate, satisfactory to the Trustee and duly executed by the transferor Holder or his attorney duly authorized in writing, in which case the transferee Holder shall take delivery in the form of a Restricted Security or (ii) a Regulation S Certificate, satisfactory to the Trustee and duly executed by the transferor Holder or his attorney duly authorized in writing, in which case the transferee Holder or his attorney duly authorized in writing shall take delivery in the form of a Regulation S Security.

(ii) EXCHANGE OF BOOK-ENTRY SECURITIES FOR CERTIFICATED SECURITIES. A beneficial interest in a Global Security may not be exchanged for a Security in certificated form unless (i) DTC (x) notifies the Company that it is unwilling or unable to continue as Depositary for the Global Security or (y) has ceased to be a clearing agency registered under the Exchange Act, and in either case the Company thereupon fails to appoint a successor Depositary within 90 days, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Securities in certificated form or (iii) there shall have occurred and be continuing an Event of Default or any event which after notice or lapse of time or both would be an Event of Default with respect to the Securities. In all cases, certificated Securities delivered in exchange for any Global Security or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Any certificated Security issued in exchange for an interest in a Global Security will bear the legend restricting transfers that is borne by such Global Security. Any such exchange will be effected through the DWAC System and an appropriate adjustment will be made in the records of the Security Registrar to reflect a decrease in the principal amount of the relevant Global Security.

(iii) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY. If the owner of a beneficial interest in the Restricted Global Security wishes at any time to transfer such interest to a Person who wishes to acquire the same in the form of a beneficial interest in the Regulation S Global Security, such transfer may be effected only in accordance with the provisions of this Section 305(b)(iii) and Section 305(b)(v) below and subject to the Applicable Procedures. Upon receipt by the Trustee, as Security Registrar, or (i) an order given by the Depositary or its authorized representative directing

that a beneficial interest in the Regulation S Global Security in a specified principal amount be created to a specified Agent Member's account and that a beneficial interest in the Restricted Global Security in an equal amount be debited from another specified Agent Member's account and (ii) a Regulation S Certificate, satisfactory to the Trustee and duly executed by the Holder of such Restricted Global Security or his attorney in fact duly authorized in writing, then the Trustee, as Security Registrar but subject to Section 305(b)(v) below, shall reduce the principal amount of such Restricted Global Security and increase the principal amount of such Regulation S Global Security by such specified principal amount.

(iv) REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL SECURITY. If the owner of a beneficial interest in the Regulation S Global Security wishes at any time to transfer such interest to a Person who wishes to acquire the same in the form of a beneficial interest in the Restricted Global Security, such transfer may be effected only in accordance with this Section 305(b)(iv) and subject to the Applicable Procedures. Upon receipt by the Trustee, as Security Registrar, of (i) an order given by the Depositary or its authorized representative directing that a beneficial interest in the Restricted Global Security in a specified principal amount be credited to a specified Agent Member's account and that a beneficial interest in the Regulation S Global Security in an equal principal amount be debited from another specified Agent Member's account and (ii) if such transfer is to occur during the Restricted Period, a Restricted Securities Certificate, satisfactory to the Trustee and duly executed by the Holder of such Regulation S Global Security or his attorney in fact duly authorized in writing, then the Trustee, as Security Registrar, shall reduce the principal amount of such Regulation S Global Security and increase the principal amount of such Restricted Global Security by such specified principal amount.

(v) REGULATION S GLOBAL SECURITY TO BE HELD THROUGH EUROCLEAR OR CLEARSTREAM DURING RESTRICTED PERIOD. The Company shall use its best efforts to cause the Depositary to ensure that, until the expiration of the Restricted Period, beneficial interests in the Regulation S Global Security may be held only in or through accounts maintained at the Depositary by Euroclear and Clearstream (or by Agent Members acting for the account thereof), and no person shall be entitled to effect any transfer or exchange that would result in any such interest being held otherwise than in or through such an account; PROVIDED that this Section 305(b)(v) shall not prohibit any transfer or exchange of such an interest in accordance with Section 305(b)(iv) above.

(c) SECURITIES ACT LEGENDS. Rule 144A Securities and their Successor Securities shall bear the Restricted Securities Legend and Regulation S Securities and their Successor Securities shall bear the Regulation S Legend, subject to the following:

(i) subject to the following Clauses of this Section 305(c), a Security or any portion thereof which is exchanged, upon transfer or otherwise, for a Global Security or any portion thereof shall bear the Securities Act Legend borne by such Global Security while represented thereby;

(ii) subject to the following Clauses of this Section
305(c), a new Security which is not a Global Security and is issued in exchange for another Security (including a Global Security) or any portion thereof, upon transfer or otherwise, shall bear the Securities Act Legend borne by such other Security, PROVIDED that, if such new Security is required pursuant to Section 305(b)(ii) to be issued in the form of a Restricted Security, it shall bear the Restricted Securities Legend and, if such new Security is so required to be issued in the form of a Regulation S Security, it shall bear the Regulation S Legend;

(iii) a new Security which does not bear a Securities Act Legend may be issued in exchange for or in lieu of a Security (other than a Global Security) or any portion thereof which bears such a legend if, in the Company's judgment, placing such a legend upon such new Security is not necessary to ensure compliance with the registration requirements of the Securities Act, and the Trustee, at the direction of the Company, shall authenticate and deliver such a new Security as provided in this Article Three; and

(iv) notwithstanding the foregoing provisions of this
Section 305(c), a Successor Security of a Security that does not bear a particular form of Securities Act Legend shall not bear such form of legend unless the Company has reasonable cause to believe that such Successor Security is a "restricted security" within the meaning of Rule 144, in which case the Trustee, at the direction of the Company, shall authenticate and deliver a new Security bearing the Restricted Securities Legend in exchange for such Successor Security as provided in this Article Three.

Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

Any interest (including Special Interest) on any Security which is payable but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, and such money when deposited shall be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

(3) Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

Section 308. PERSONS DEEMED OWNERS.

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section 309. CANCELLATION.

All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order.

Section 310. COMPUTATION OF INTEREST.

Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months, except that Special Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

Section 311. CUSIP NUMBERS.

The Company in issuing Securities may use "CUSIP" numbers (if then generally in use) in addition to serial numbers; if so, the Trustee shall use such CUSIP numbers in addition to serial numbers in notices of redemption and repurchase as a convenience to Holders; PROVIDED that any such notice may state that no representation is made as to the correctness of such CUSIP numbers either as printed on the Securities or as contained in any notice of a redemption or repurchase and that reliance may be placed only on the serial or other identification numbers

printed on the Securities, and any such redemption or repurchase shall not be affected by any defect in or omission of such CUSIP numbers.

ARTICLE FOUR

Satisfaction and Discharge

Section 401. SATISFACTION AND DISCHARGE OF INDENTURE.

This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or

(B) all such Securities not theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within one year, or

(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust sufficient cash or Government Securities for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

(D) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

Section 402. APPLICATION OF TRUST MONEY.

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee.

ARTICLE FIVE

Remedies

Section 501. EVENTS OF DEFAULT.

"Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in the payment of any installment of interest upon any Security as and when it becomes due and payable, and continuance of such default for a period of 30 days; or

(2) default in the payment of all or any part of the principal of (or premium, if any, on) any Security as and when the same shall become due and payable, either at its Maturity, upon redemption, by declaration of acceleration or otherwise; or

(3) default in the performance, or breach, of any covenant or agreement of the Company in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

(4) an event of default, as defined in any of the Company's instruments under which there may be issued, or by which there may be secured or evidenced, any Indebtedness of the Company that has resulted in the acceleration of such Indebtedness, or any default occurring in payment of any such Indebtedness at final maturity (and after the expiration of any applicable grace periods), other than such Indebtedness the principal

of, and interest on which, does not individually, or in the aggregate, exceed $50,000,000; or

(5) one or more final judgments, decrees or orders of any court, tribunal, arbitrator, administrative or other governmental body or similar entity for the payment of money is rendered against the Company or any of its properties in an aggregate amount in excess of $50,000,000 (excluding the amount covered by insurance) and such judgment, decree or order remains unvacated, undischarged and unstayed for more than 30 consecutive days, except while being contested in good faith by appropriate proceedings; or

(6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

(7) the commencement by the Company of a voluntary case or proceeding under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

If an Event of Default (other than an Event of Default specified in Section 501(6) or (7)) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal shall become immediately due and payable. If an Event of Default specified in Section 501(6) or (7) occurs, the principal of and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

(1) the Company has paid or deposited with the Trustee a sum sufficient to pay

(A) all overdue interest on all Securities,

(B) the principal of (and premium, if any, on) any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Securities, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;

and

(2) all Events of Default, other than the non-payment of the principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in
Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

The Company covenants that if

(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM.

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

Section 506. APPLICATION OF MONEY COLLECTED.

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under
Section 607; and

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively.

Section 507. LIMITATION ON SUITS.

No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default;

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST.

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

Section 509. RESTORATION OF RIGHTS AND REMEDIES.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any

reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 510. RIGHTS AND REMEDIES CUMULATIVE.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 511. DELAY OR OMISSION NOT WAIVER.

No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 512. CONTROL BY HOLDERS.

The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, PROVIDED that

(1) such direction shall not be in conflict with any rule of law or with this Indenture, and

(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 513. WAIVER OF PAST DEFAULT.

The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default

(1) in the payment of the principal of (or premium, if any) or interest on any Security, or

(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 514. UNDERTAKING FOR COSTS.

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or the Trustee.

Section 515. WAIVER OF STAY OR EXTENSION LAWS.

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee but will suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE SIX

The Trustee

Section 601. CERTAIN DUTIES AND RESPONSIBILITIES.

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

Section 602. NOTICE OF DEFAULTS.

The Trustee shall give the Holders notice of any default of which the Trustee has actual knowledge within 90 days after a default occurs hereunder as and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case of any default of the character specified in Section 501(3), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default.

Section 603. CERTAIN RIGHTS OF TRUSTEE.

Subject to the provisions of Section 601:

(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Governing Body may be sufficiently evidenced by a Authorizing Resolution;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;

(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.

Section 605. MAY HOLD SECURITIES.

The Trustee, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent.

Section 606. MONEY HELD IN TRUST.

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 607. COMPENSATION AND REIMBURSEMENT.

The Company agrees

(1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

Section 608. DISQUALIFICATION; CONFLICTING INTERESTS.

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611.

(b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company.

(d) If at any time:

(i) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(ii) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

(iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property "be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Authorizing Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Authorizing Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 106. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee shall be the successor of the Trustee hereunder, PROVIDED such corporation shall be otherwise qualified and eligible under this Article,

without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to any applicable provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

ARTICLE SEVEN

Holders' Lists and Reports by Trustee and Company

Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

If the Trustee is not the Security Registrar, the Company will furnish or cause to be furnished to the Trustee

(a) semi-annually, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and

(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

EXCLUDING from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

(b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of

either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

Section 703. REPORTS BY TRUSTEE.

The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange.

Section 704. REPORTS BY COMPANY.

(a) The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided thereby.

(b) For so long as any Securities are deemed to be "restricted securities", as defined in Rule 144 under the Securities Act, and the Company is neither subject to Section 13 or Section 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, the Company shall furnish to Holders of the Securities and to prospective purchasers of those Securities designated by such Holders, upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) For so long as the Company is not subject to Section 13 or
Section 15(d) of the Exchange Act, the Company shall furnish to the Trustee copies of annual audited financial statements prepared in accordance with U.S. generally accepted accounting principles and certified by the Company's independent public accountants and with unaudited interim financial statements prepared in accordance with U.S. generally accepted accounting principles for each of the first three quarters of each fiscal year.

ARTICLE EIGHT

Consolidation, Merger, Conveyance, Transfer or Lease

Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company, unless:

(i) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation,

partnership or trust, shall be organized and validly existing under (A) the laws of the United States of America, any State thereof or the District of Columbia or (B) the laws of a foreign jurisdiction and consents to the jurisdiction of the courts of the United States and, in each case (A) or (B), shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; and

(ii) immediately prior to and after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing.

Section 802. SUCCESSOR SUBSTITUTE.

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE NINE

Supplemental Indentures

Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

Without the consent of any Holders, the Company, when authorized by a Authorizing Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

(2) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or

(3) to secure the Securities; or

(4) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall

not be inconsistent with the provisions of this Indenture, PROVIDED that such action pursuant to this Clause (4) shall not adversely affect the interests of the Holders in any material respect.

Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

With the consent of the Holders of not less than 50% in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Authorizing Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

(2) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

(3) modify any of the provisions of this Section or Section 513 except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.

It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES.

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 904. EFFECT OF SUPPLEMENTAL INDENTURE.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section 905. CONFORMITY WITH TRUST INDENTURE ACT.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

ARTICLE TEN

Covenants

Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

The Company will duly and punctually pay the principal of (and premium, if any) and interest on the Securities in accordance with the terms of the Securities and this Indenture.

Section 1002. MAINTENANCE OF OFFICE OR AGENCY.

If the Securities are not issued as Global Securities, the Company will maintain in The City of New York, New York an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside The City of New York, New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the

Company of its obligation to maintain an office or agency in The City of New York, New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.

If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, New York notice that such money remains unclaimed and that after a date specified

therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 1004. STATEMENT BY OFFICERS AS TO DEFAULT.

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

Section 1005. EXISTENCE.

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.

Section 1006. PAYMENT OF TAXES AND OTHER CLAIMS.

The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or upon the income, profits or property of the Company, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company; PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

Section 1007. RESTRICTIONS ON CERTAIN LIENS.

The Company will not issue, assume, guarantee or permit to exist any Indebtedness secured by any lien on any property of the Company, whether owned on the date that the Securities are issued or thereafter acquired, without in any such case effectively securing the Outstanding Securities (together with, if the Company shall so determine, any other Indebtedness of or guaranteed by the Company ranking equally with the Securities) equally and ratably with such Indebtedness (but only so long as such Indebtedness is so secured); PROVIDED, HOWEVER, that the foregoing restriction shall not apply to the following permitted liens:

(i) pledges or deposits in the ordinary course of business in connection with bids, tenders, contracts or statutory obligations or to secure surety or performance bonds,

(ii) liens imposed by law, such as carriers', warehousemen's and mechanics' liens, arising in the ordinary course of business,

(iii) liens for property taxes being contested in good faith,

(iv) minor encumbrances, easements or reservations which do not in the aggregate materially adversely affect the value of the properties or impair their use,

(v) liens on property existing at the time of acquisition thereof by the Company, or to secure any indebtedness incurred by the Company prior to, at the time of, or within 90 days after the later of the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operation of the property, which indebtedness is incurred for the purpose of financing all or any part of the purchase price or construction or improvements,

(vi) liens to secure purchase money Indebtedness not in excess of the cost or value of the property acquired,

(vii) mortgages securing obligations issued by a state, territory or possession of the United States, or any political subdivision of any of the foregoing or the District of Columbia, to finance the acquisition or construction of property, and on which the interest is not, in the opinion of tax counsel of recognized standing or in accordance with a ruling issued by the Internal Revenue Service, includible in gross income of the holder by reason of Section 103(a)(1) of the Internal Revenue Code (or any successor to such provision) as in effect at the time of the issuance of such obligations,

(viii) other liens to secure Indebtedness so long as the amount of outstanding Indebtedness secured by liens pursuant to this provision does not exceed 10% of the Company's consolidated net tangible assets, or

(ix) liens on the stock or assets of Sithe or any of its subsidiaries to secure Indebtedness incurred in connection with a transaction to acquire the remaining 50.1% equity interest in Sithe.

In the event that the Company shall propose to pledge, mortgage or hypothecate any property, other than as permitted by clauses (i) through
(viii) of the previous paragraph, the Company shall (prior thereto) give written notice thereof to the Trustee, who shall give notice to the Holders, and the Company shall, prior to or simultaneously with such pledge, mortgage or hypothecation, effectively secure all the Securities equally and ratably with such Indebtedness.

Section 1008. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.

The Company shall not enter into any Sale/Leaseback Transaction with any Subsidiary. In addition, the Company shall not enter into any Sale/Leaseback Transaction unless:

(i) the Sale/Leaseback Transaction is entered into prior to, concurrently with or within 90 days after the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operations of the property; or

(ii) the Company could otherwise grant a lien on the property as a permitted lien described in Section 1007. In determining whether the Company could

have granted a lien on a property the subject of a Sale/Leaseback Transaction pursuant to Section 1007(v), the amount of Indebtedness being secured shall be deemed to be equal to the amount capitalized, under generally accepted accounting principles, in respect of the lease involved in such Sale/Leaseback transaction.

Section 1009. LIMITATION ON ASSET SALES.

Except for the sale of the Company's properties and assets substantially as an entirety as described in Section 801, and other than assets required to be sold to conform with governmental regulations, the Company shall not consummate any Asset Sale if the aggregate book value of all such Asset Sales consummated since the date of issuance of the Securities would exceed 25% of the Company's net tangible assets as of the beginning of the Company's most recently ended full fiscal quarter; PROVIDED, HOWEVER, that any such Asset Sale will be disregarded for purposes of the 25% limitation specified herein if the proceeds thereof are (i) within twelve (12) months of such Asset Sale, invested or reinvested by the Company in new generating assets, or (ii) used by the Company to repay its Indebtedness.

ARTICLE ELEVEN

Redemption of Securities

Section 1101. RIGHT OF REDEMPTION.

The Securities may be redeemed at the election of the Company, as a whole or from time to time in part, at the Redemption Price equal to the greater of (a) 100% of the principal amount of the Securities to be redeemed, plus accrued interest to the Redemption Date, or (b) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of payments of interest accrued as of the Redemption Date), discounted to the Redemption Date on a semi-annual basis at the Adjusted Treasury Rate plus 25 basis points, plus accrued interest to the Redemption Date.

Section 1102. APPLICABILITY OF ARTICLE.

Redemption of Securities at the election of the Company, as permitted by any provision of this Indenture, shall be made in accordance with such provision and this Article.

Section 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.

The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Authorizing Resolution. In case of any redemption at the election of the Company of less than all the Securities, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed.

Section 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

If less than all the Securities are to be redeemed, the particular Securities (treating the Original Securities, the Additional Securities and the Exchange Securities as a single series) to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $1,000 or any integral multiple thereof) of the principal amount of Securities of a denomination larger than $1,000.

The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

Section 1105. NOTICE OF REDEMPTION.

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed,

(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that interest thereon will cease to accrue on and after said date,

(5) the place or places where such Securities are to be surrendered for payment of the Redemption Price,

(6) that in the case that a Security is only redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities in an aggregate amount equal to the unredeemed portion of the Security,

(7) the aggregate principal amount of Securities being redeemed, and

(8) the CUSIP number, PROVIDED that no representation is made as to the correctness or accuracy of the CUSIP number or numbers listed in such notice or printed on the Securities being redeemed.

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.

Section 1106. DEPOSIT OF REDEMPTION PRICE.

On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

Section 1107. SECURITIES PAYABLE ON REDEMPTION DATE.

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Security.

Section 1108. SECURITIES REDEEMED IN PART.

Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company designated for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security of the same tenor without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. If a Global Security is so surrendered, such new Security shall also be a Global Security.

ARTICLE TWELVE

Defeasance and Covenant Defeasance

Section 1201. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

The Company may elect, at its option at any time, to have Section 1202 or Section 1203 applied to the Securities pursuant to such Section 1202 or 1203 and upon compliance with the conditions set forth below in this Article.

Section 1202. DEFEASANCE AND DISCHARGE.

Upon the Company's exercise of its option to have this Section applied to the Securities, the Company shall be deemed to have been discharged from its obligations, with respect to the Securities on and after the date the conditions set forth in Section 1204 are satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Securities and to have satisfied all its other obligations under the Securities and this Indenture (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of the Securities to receive, solely from the trust fund described in Section 1204 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance with this Article, the Company may exercise its option to have this Section applied to the Securities notwithstanding the prior exercise of its option to have Section 1203 applied to the Securities.

Section 1203. COVENANT DEFEASANCE.

Upon the Company's exercise of its option to have this Section applied to the Securities, (1) the Company shall be released from any term, provision or condition provided in pursuant to Article Eight and Sections 1006 and 1007, and any covenants provided pursuant to Section 901(2) for the benefit of the Holders of such Securities and (2) the occurrence of any event specified in Section 501(3) shall be deemed not to be or result in an Event of Default on and after the date the conditions set forth in Section 1204 are satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that, with respect to the Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(3)) whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture shall be unaffected thereby.

Section 1204. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

The following shall be the conditions to the application of
Section 1202 or Section 1203 to the Securities:

(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of the Securities, (A) money in an amount, or (B) Government Securities which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on the Securities on the Stated Maturity, in accordance with the terms of this Indenture and the Securities.

(2) In the event of an election to have Section 1202 apply to the Securities, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of the Securities will not recognize gain or loss for federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to the Securities and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

(3) In the event of an election to have Section 1203 apply to the Securities, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Securities will not recognize gain or loss for federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to the Securities and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

(4) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(4) and 501(5), at any time on or prior to the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 91st day).

(5) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).

(6) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound.

(7) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.

(8) The Company shall deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Securities over the other creditors of the Company, or with the intent of defeating, hindering, delaying or defaulting creditors of the Company or others.

(9) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

Section 1205. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS.

Subject to the provisions of the last paragraph of Section 1003, all money and Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 1204 in respect of the Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any such Paying Agent as the Trustee may determine, to the Holders of the Securities, of all sums due and to become due thereon in respect of principal and any premium and interest but money so held in trust need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Securities deposited pursuant to Section 1204 or the principal and interest received in respect thereof.

Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Securities held by it as provided in Section 1204 with respect to the Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to the Securities.

Section 1206. REINSTATEMENT.

If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to the Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the

obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to the Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1205 with respect to the Securities in accordance with this Article; PROVIDED, HOWEVER, that if the Company makes any payment of principal of or any premium or interest an any Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

EXELON GENERATION COMPANY, LLC

                                             By: /s/ J. Barry Mitchell
                                                --------------------------------
                                                Name:
                                                Title:

Attest:
 /s/ Todd D. Cutler
--------------------------------------
Name:
Title:

FIRST UNION NATIONAL BANK, N.A.

                                             By: /s/ George J. Rayzis
                                                --------------------------------
                                                Name:
                                                Title:

Attest:
 /s/ Catherine A. Grinnell
--------------------------------------
Name:
Title:

ANNEX A - Form of Restricted Securities Certificate

RESTRICTED SECURITIES CERTIFICATE

(For transfers pursuant to

Section 305(b)(i) and (iv) of the Indenture)

First Union National Bank
as Trustee
[Address of Trustee]

Attention: Corporate Trust Administration

Re: 6.95% Senior Notes due 2011 of Exelon Generation Company, LLC

(the "Securities")

Reference is made to the Indenture, dated as of June 1, 2001 (the "Indenture"), between Exelon Generation Company, LLC (the "Company") and First Union National Bank, as Trustee. Terms used herein and defined in the Indenture or in Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities Act") are used herein as so defined.

This certificate relates to U.S. $ principal amount of Securities, which are evidenced by the following certificate(s) (the "Specified Securities"):

CUSIP No(s).

CERTIFICATE No(s).

The person in whose name this certificate is executed below (the "Undersigned") hereby certifies that (i) it is the sole beneficial owner of the Specified Securities, (ii) it is acting on behalf of all the beneficial owners of the Specified Securities and is duly authorized by them to do so or (iii) it is the Holder of a Global Security and has received a certification to the effect set forth below. Such beneficial owner or owners are referred to herein collectively as the "Owner". If the Specified Securities are represented by a Global Security, they are held through the Depositary or an Agent Member in the name of the Undersigned, as or on behalf of the Owner. If the Specified Securities are not represented by a Global Security, they are registered in the name of the Undersigned, as or on behalf of the Owner.

The Owner has requested that the Specified Securities be transferred to a person (the "Transferee") who will take delivery in the form of a Restricted Security. In connection with such transfer, the Owner hereby certifies that, unless such transfer is being effected pursuant to an effective registration statement under the Securities Act, it is being effected in accordance with Rule 144A or Rule 144 under the Securities Act and all applicable securities laws of the

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states of the United States and other jurisdictions. Accordingly, the Owner hereby further certifies as follows:

(1) RULE 144A TRANSFERS. If the transfer is being effected in accordance with Rule 144A:

(A) the Specified Securities are being transferred to a person that the Owner and any person acting on its behalf reasonably believe is a "qualified institutional buyer" within the meaning of Rule 144A, acquiring for its own account or for the account of a qualified institutional buyer, and

(B) the Owner and any person acting on its behalf have taken reasonable steps to ensure that the Transferee is aware that the Owner may be relying on Rule 144A in connection with the transfer; and

(2) RULE 144 TRANSFERS. If the transfer is being effected pursuant to Rule 144:

the transfer is occurring after a holding period of at least one year (computed in accordance with paragraph (d) of Rule 144) has elapsed since the Specified Securities were last acquired from the Company or from an affiliate of the Company, whichever is later, and is being effected in accordance with the applicable amount, manner of sale and notice requirements of Rule 144.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Purchasers.

Dated:
(Print the name of the Undersigned, as such term is defined in the second paragraph of this certificate.)

By:
Name:

Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)

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ANNEX B - Form of Regulation S Certificate

REGULATION S CERTIFICATE

(For transfers pursuant to Section 305(c)(i) and (iii)

of the Indenture)

First Union National Bank
as Trustee
[Address of Trustee]

Attention: Corporate Trust Administration

Re: 6.95% Senior Notes due 2011 of Exelon Generation Company, LLC

(the "Securities")

Reference is made to the Indenture, dated as of June 1, 2001 (the "Indenture), between Exelon Generation Company, LLC (the "Company") and First Union National Bank, as Trustee. Terms used herein and defined in the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities Act") are used herein as so defined.

This certificate relates to U.S. $ principal amount of Securities, which are evidenced by the following certificate(s) (the "Specified Securities"):

CUSIP No(s).

CERTIFICATE No(s).

The person in whose name this certificate is executed below (the "Undersigned") hereby certifies that (i) it is the sole beneficial owner of the Specified Securities, (ii) it is acting on behalf of all the beneficial owners of the Specified Securities and is duly authorized by them to do, so or (iii) it is the Holder of a Global Security and has received a certification to the effect set forth below. Such beneficial owner or owners are referred to herein collectively as the "Owner". If the Specified Securities are represented by a Global Security, they are held through the Depositary or an Agent Member in the name of the Undersigned, as or on behalf of the Owner. If the Specified Securities are not represented by a Global Security, they are registered in the name of the Undersigned, as or on behalf of the Owner.

The Owner has requested that the Specified Securities be transferred to a person (the "Transferee") who will take delivery in the form of a Regulation S Security.

In connection with such transfer, the Owner hereby certifies or has certified that, unless such transfer is being effected pursuant to an effective registration statement under the

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Securities Act, it is being effected in accordance with Rule 904 of Regulation S or Rule 144 under the Securities Act and with all applicable securities laws of the states of the United States and other jurisdictions. Accordingly, the Owner hereby further certifies or has certified as follows:

(1) RULE 904 TRANSFERS. If the transfer is being effected in accordance with Rule 904 of Regulation S:

(A) the Owner is not a distributor of the Securities, an affiliate of the Company or any such distributor or a person acting on behalf of any of the foregoing;

(B) the offer of the Specified Securities was not made to a person in the United States or for the account or benefit of a U.S. Person;

(ii) either:

(i) at the time the buy order was originated, the Transferee was outside the United States or the Owner and any person acting on its behalf reasonably believed that the Transferee was outside the United States, or

(ii) the transaction is being executed in, on or through the facilities of the Eurobond market, as regulated by the International Securities Market Association or another designated offshore securities market and neither the Owner nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States;

(iii) no directed selling efforts have been made in the United States by or on behalf of the Owner or any affiliate thereof,

(iv) if the Owner is a dealer in securities or has received a selling concession, fee or other remuneration in respect of the Specified Securities, and the transfer is to occur during the Restricted Period, then the requirements of Rule 904(c)(1) have been satisfied, and

(v) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

(2) RULE 144 TRANSFERS. If the transfer is being effected pursuant to Rule 144:

the transfer is occurring after a holding period of at least one year (Computed in accordance with paragraph (d) of Rule 144) has elapsed since the Specified Securities were last acquired from the Company or from an affiliate of the Company, whichever is later, and is being effected in accordance with the applicable amount, manner of sale and notice requirements of Rule 144.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Purchasers.

B-2

Dated:
(Print the name of the Undersigned, as such term is defined in the second paragraph of this certificate.)

By:
Name:

Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the
Undersigned must be stated.)

B-3

EXHIBIT 4.2

EXELON GENERATION COMPANY, LLC

6.95% Senior Notes due 2011

REGISTRATION RIGHTS AGREEMENT

New York, New York
June 14, 2001

Salomon Smith Barney Inc.
Credit Suisse First Boston Corporation
Banc One Capital Markets, Inc.
As Representatives of the Initial Purchasers c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

Exelon Generation Company, LLC, a limited liability company organized under the laws of the Commonwealth of Pennsylvania (the "Company"), proposes to issue and sell to certain purchasers (the "Initial Purchasers"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), its 6.95% Senior Notes Due 2011 (the "Securities"), relating to the initial placement of the Securities (the "Initial Placement"). To induce the Initial Purchasers to enter into the Purchase Agreement and to satisfy a condition of your obligations thereunder, the Company agrees with you for your benefit and the benefit of the holders from time to time of the Securities (including the Initial Purchasers) (each a "Holder" and, together, the "Holders"), as follows:

1. DEFINITIONS. Each of the capitalized terms used herein without definition shall have the meaning set forth in the Purchase Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings:

"Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Affiliate" of any specified Person shall mean any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified Person. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing.

"Broker-Dealer" shall mean any broker or dealer registered as such under the Exchange Act.

"Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.

"Commission" shall mean the Securities and Exchange Commission.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Exchange Offer Registration Period" shall mean the one-year period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement.

"Exchange Offer Registration Statement" shall mean a registration statement of the Company on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

"Exchanging Dealer" shall mean any Holder (which may include any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of the Company) for New Securities.

"Final Memorandum" shall have the meaning set forth in the Purchase Agreement.

"Holder" shall have the meaning set forth in the preamble hereto.

"Indenture" shall mean the Indenture relating to the Securities, dated as of June 1, 2001, between the Company and First Union National Bank, as trustee, as the same may be amended from time to time in accordance with the terms thereof.

"Initial Placement" shall have the meaning set forth in the preamble hereto.

"Initial Purchaser" shall have the meaning set forth in the preamble hereto.

"Losses" shall have the meaning set forth in Section 6(d) hereof.

"Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Securities registered under a Registration Statement.

"Managing Underwriters" shall mean the investment banker or investment bankers and manager or managers that shall administer an underwritten offering of the Securities offered pursuant to a Shelf Registration Statement.

"New Securities" shall mean debt securities of the Company identical in all

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material respects to the Securities (except that the interest rate step-up provisions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be issued under the Indenture.

"Prospectus" shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein.

"Purchase Agreement" shall have the meaning set forth in the preamble hereto.

"Registered Exchange Offer" shall mean the proposed offer of the Company to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for the Securities, a like aggregate principal amount of the New Securities.

"Registration Statement" shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein.

"Securities" shall have the meaning set forth in the preamble hereto.

"Shelf Registration" shall mean a registration effected pursuant to
Section 3 hereof.

"Shelf Registration Period" has the meaning set forth in Section 3(b) hereof.

"Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

"Trustee" shall mean the trustee with respect to the Securities under the Indenture.

"Underwriter" shall mean any underwriter of Securities in connection with an offering thereof under a Shelf Registration Statement.

2. REGISTERED EXCHANGE OFFER.

(a) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the Commission, the Company shall use its best efforts to consummate the

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Registered Exchange Offer within 360 days of the date of the original issuance of the Securities (or if such 360th day is not a Business Day, the next succeeding Business Day).

(b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for New Securities (assuming that such Holder is not an Affiliate of the Company, acquires the New Securities in the ordinary course of such Holder's business, has no arrangements with any Person to participate in the distribution of the New Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer ) to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States.

(i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(ii) keep the Registered Exchange Offer open for not less than 20 Business Days and not more than 30 Business Days after the date notice thereof is mailed to the Holders (or, in each case, longer if required by applicable law);

(iii) use its best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required, under the Act to ensure that it is available for sales of New Securities by Exchanging Dealers during the Exchange Offer Registration Period;

(iv) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee or an Affiliate of the Trustee;

(v) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open;

(vi) prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Company is conducting the Registered Exchange Offer in reliance on the position of the Commission in EXXON CAPITAL HOLDINGS CORPORATION (pub. avail. May 13, 1988), MORGAN STANLEY AND CO., INC. (pub. avail. June 5, 1991); and (B) including a representation that the Company has not entered into any arrangement or understanding with any Person to distribute the New Securities to be received in the Registered Exchange Offer and that, to the best of the Company's information and belief, each Holder participating in the Registered Exchange Offer is

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acquiring the New Securities in the ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the New Securities; and

(vii) comply in all respects with all applicable laws.

(d) As soon as practicable after the close of the Registered Exchange Offer, the Company shall:

(i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;

(ii) deliver to the Trustee for cancellation in accordance with
Section 4(s) all Securities so accepted for exchange; and

(iii) cause the Trustee promptly to authenticate and deliver to each Holder of Securities a principal amount of New Securities equal to the principal amount of the Securities of such Holder so accepted for exchange.

(e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in MORGAN STANLEY AND CO., INC. (pub. avail. June 5, 1991) and
EXXON CAPITAL HOLDINGS CORPORATION (pub. avail. May 13, 1988), as interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that, at the time of the consummation of the Registered Exchange Offer:

(i) any New Securities received by such Holder will be acquired in the ordinary course of business;

(ii) such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Securities or the New Securities within the meaning of the Act; and

(iii) such Holder is not an Affiliate of the Company.

(f) If any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser, the Company shall issue and deliver to such Initial Purchaser or the Person purchasing New Securities

-5-

registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of New Securities. The Company shall use its best efforts to cause the CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer.

3. SHELF REGISTRATION.

(a) If (i) due to any change in law or applicable interpretations thereof by the Commission's staff, the Company determines upon advice of its outside counsel that it is not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; or

(ii) for any other reason the Registered Exchange Offer is not consummated within 360 days of the date hereof;

(iii) any Initial Purchaser so requests with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer and that are held by it following consummation of the Registered Exchange Offer;

(iv) any Holder (other than an Initial Purchaser) is not eligible to participate in the Registered Exchange Offer; or

(v) in the case of any Initial Purchaser that participates in the Registered Exchange Offer or acquires New Securities pursuant to
Section 2(f) hereof, such Initial Purchaser does not receive freely tradeable New Securities in exchange for Securities constituting any portion of an unsold allotment (it being understood that (x) the requirement that an Initial Purchaser deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of New Securities acquired in exchange for such Securities shall result in such New Securities being not "freely tradeable"; and (y) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not "freely tradeable"), the Company shall effect a Shelf Registration Statement in accordance with subsection (b) below.

(b) (i) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the Commission, the Company shall as promptly as practicable (but in no event more than 60 days after so required or requested pursuant to this Section 3), file with the Commission and thereafter shall use its best efforts to cause to be declared effective under the Act a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; PROVIDED, HOWEVER, that no Holder (other than an Initial

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Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further, that with respect to New Securities received by an Initial Purchaser in exchange for Securities constituting any portion of an unsold allotment, the Company may, if permitted by current interpretations by the Commission's staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction of its obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement.

(ii) The Company shall use its best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the Commission or such shorter period that will terminate when all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement (in any such case, such period being called the "Shelf Registration Period"). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless (A) such action is required by applicable law; or (B) such action is taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets, so long as the Company promptly thereafter complies with the requirements of Section 4(k) hereof, if applicable.

4. ADDITIONAL REGISTRATION PROCEDURES. In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply.

(a) The Company shall:

(i) furnish to you, not less than five Business Days prior to the filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing) and shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as you reasonably propose;

(ii) include the information set forth in Annex A hereto on the facing page of the Exchange Offer Registration Statement, in Annex B hereto in the forepart

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of the Exchange Offer Registration Statement in a section setting forth details of the Exchange Offer, in Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and in Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer;

(iii) if requested by an Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Exchange Offer Registration Statement; and

(iv) in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities pursuant to the Shelf Registration Statement as selling security holders.

(b) The Company shall advise you, the Holders of Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company a telephone or facsimile number and address for notices, and, if requested by you or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until the Company shall have remedied the basis for such suspension):

(i) when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information;

(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose; and

(v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

(c) The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction at the earliest possible time.

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(d) The Company shall furnish to each Holder of Securities covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

(e) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of securities in connection with the offering and sale of the securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(f) The Company shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

(g) The Company shall promptly deliver to each Initial Purchaser, each Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such Person may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer and any such other Person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.

(h) Prior to the Registered Exchange Offer or any other offering of Securities pursuant to any Registration Statement, the Company shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and will maintain such qualification in effect so long as required; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the Initial Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where it is not then so subject.

(i) The Company shall cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing New Securities or Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request.

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(j) Upon the occurrence of any event contemplated by subsections
(b)(ii) through (v) above, the Company shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to Initial Purchasers of the Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in
Section 2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(b) to and including the date when the Initial Purchasers, the Holders of the Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section.

(k) Not later than the effective date of any Registration Statement, the Company shall provide a CUSIP number for the Securities or the New Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or New Securities, in a form eligible for deposit with The Depository Trust Company.

(l) The Company shall make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of
Section 11(a) of the Act.

(m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner.

(n) The Company may require each Holder of Securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of such Securities as the Company may from time to time reasonably require for inclusion in such Registration Statement. The Company may exclude from such Shelf Registration Statement the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request and the Company shall be under no further obligations to such Holder to include such Holder in a Shelf Registration Statement.

(o) In the case of any Shelf Registration Statement, the Company shall enter into such and take all other appropriate actions (including if requested an underwriting agreement in customary form) in order to expedite or facilitate the registration or the disposition of the Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 6 (or such other provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section 6.

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(p) In the case of any Shelf Registration Statement, the Company shall:

(i) subject to execution of a confidentiality agreement in form and substance reasonably acceptable to the Company and the Holders, make reasonably available for inspection by the Holders of Securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries;

(ii) cause the Company's officers, directors and employees to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality;

(iii) make such representations and warranties to the Holders of Securities registered thereunder and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement;

(iv) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;

(v) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of Securities registered thereunder and the underwriters, if any, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; and

(vi) deliver such documents and certificates as may be reasonably requested by the Majority Holders and the Managing Underwriters, if any,

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including those to evidence compliance with Section 4(k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this
Section shall be performed at each closing under any underwriting or similar agreement as and to the extent required thereunder.

(q) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the New Securities, the Company shall mark, or caused to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the New Securities. In no event shall the Securities be marked as paid or otherwise satisfied.

(r) The Company will use its best efforts (i) if the Securities have been rated prior to the initial sale of such Securities pursuant to the Purchase Agreement, to confirm such ratings will apply to the Securities or the New Securities, as the case may be, covered by a Registration Statement; or (ii) if the Securities were not previously rated, to cause the Securities covered by a Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by Majority Holders with respect to the related Registration Statement or by any Managing Underwriters.

(s) In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc.) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by:

(i) if such Rules or By-Laws shall so require, engaging a "qualified independent underwriter" (as defined in such Rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities;

(ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof; and

(iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Rules.

(t) The Company shall use its best efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement.

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5. REGISTRATION EXPENSES. The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in connection therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements of their counsel incurred in connection with their review of the Exchange Offer Registration Statement.

6. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company agrees to indemnify and hold harmless each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement (including each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees and agents of each such Holder and each Person who controls any such Holder within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any such Holder specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

The Company also agrees to indemnify or contribute as provided in
Section 6(d) to Losses of each and any person deemed an "underwriter", under the Act or the rules and regulations thereunder, of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees or agents and each Person who controls such underwriter on substantially the same basis as that of the indemnification of the Initial Purchasers and the selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in
Section 4(p) hereof.

(b) Each Holder of securities covered by a Registration Statement (including each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees to indemnify and hold

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harmless the Company each of its directors each of its officers who signs such Registration Statement and each Person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.

(c) Promptly after receipt by an indemnified party under this Section 6 or notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party;
(iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.

(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section is for any reason held to be unenforceable by an indemnified party although applicable in accordance with its terms, then each applicable indemnifying party shall

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have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Initial Purchaser or any subsequent Holder of any Security or New Security be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a New Security, applicable to the Security that was exchangeable into such New Security, as set forth on the cover page of the Final Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the sum of
(x) the total net proceeds from the Initial Placement (before deducting expenses) as set forth on the cover page of the Final Memorandum and (y) the total amount of additional interest which the Company was not required to pay as a result of registering the securities covered by the Registration Statement which resulted in such Losses. Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions as set forth on the cover page of the Final Memorandum, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or New Securities, as applicable, registered under the Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any alleged untrue statement or omission relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each Person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each Person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who

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shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).

(e) The provisions of this Section will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder or the Company or any of the officers, directors or controlling Persons referred to in this Section hereof, and will survive the sale by a Holder of securities covered by a Registration Statement.

7. UNDERWRITTEN REGISTRATIONS.

(a) If any of the Securities or New Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders.

(b) No Person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such Person (i) agrees to sell such Person's Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

8. NO INCONSISTENT AGREEMENTS. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

9. AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Majority Holders (or, after the consummation of any Registered Exchange Offer in accordance with Section 2 hereof, of New Securities); provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement.

10. NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery:

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(a) if to a Holder, at the most current address given by such holder to the Company in accordance with the provisions of this Section, which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to Salomon Smith Barney Inc.;

(b) if to you, initially at the respective addresses set forth in the Purchase Agreement; and

All such notices and communications shall be deemed to have been duly given when received.

The Initial Purchasers or the Company by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

11. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders of Securities and the New Securities. The Company hereby agrees to extend the benefits of this Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

12. COUNTERPARTS. This agreement may be in signed counterparts, each of which shall an original and all of which together shall constitute one and the same agreement.

13. HEADINGS. The headings used herein are for convenience only and shall not affect the construction hereof.

14. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

15. SEVERABILITY. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

16. SECURITIES HELD BY THE COMPANY, ETC. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

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[signature page follows]

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a building agreement among the Company and the several Initial Purchasers.

Very truly yours,

EXELON GENERATION COMPANY, LLC

By: EXELON VENTURES COMPANY, LLC, a
Delaware limited liability company, as the
Managing Member
By: EXELON CORPORATION, a
Pennsylvania corporation, as the
Managing Member

By: /s/ J. Barry Mitchell
    Name: J. Barry Mitchell
    Title:

The foregoing Agreement is hereby confirmed and accepted as of the date first above written.

SALOMON SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON
CORPORATION
BANC ONE CAPITAL MARKETS, INC.

By: SALOMON SMITH BARNEY INC.

By: /s/ Henry A. Clark
    Name:  Henry A. Clark
    Title: Managing Director

For themselves and the other several
Initial Purchasers named in Schedule I
to the Purchase Agreement.

ANNEX A

Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an "underwriter: within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business one year after the Expiration Date, it will make this Prospectus available to any Broker-Dealer for use in connection with any such resale. See "Plan of Distribution".

ANNEX B

Each Broker-Dealer that receives New Securities for its own account in exchange for Securities, where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. See "Plan of Distribution".

ANNEX C

PLAN OF DISTRIBUTION

Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date and ending on the close of business one year after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any Broker-Dealer for use in connection with any such resale. In addition, until __________, 20___, all dealers effecting transactions in the New Securities may be required to deliver a prospectus.

The Company will not receive any proceeds from any sale of New Securities by brokers-dealers. New Securities received by Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-Dealer that resales New Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit of any such resale of New Securities and any commissions or concessions received by any such Persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

For a period of one year after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Broker-Dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any Broker-Dealers) against certain liabilities, including liabilities under the Securities Act.

ANNEX D

RIDER A

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:     ______________________________________
Address:  ______________________________________
          ______________________________________

RIDER B

If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of New Securities and it has not arrangements or understandings with any Person to participate in a distribution of the New Securities. If the undersigned is a Broker-Dealer that will receive New Securities for its own account in exchange for Securities, it represents that the Securities to be exchange for New Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

EXELON GENERATION COMPANY, LLC

6.95% SENIOR NOTES DUE 2011

No. 1 $700,000,000.00
CUSIP No. 30161M AB 9

If this Security is issued in the form of a Global Security, payments of the principal of (and premium, if any) and interest on this Security shall be made in immediately available funds to the Depositary. If this Security is issued in certificated form, payment of the principal of (and premium, if any) and interest on this Security will be made at the corporate trust office of the Trustee or at the office of the Company in New York, New York, maintained for such purpose, and at any other office or agency maintained by the Company for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated: _________, 2002

EXELON GENERATION COMPANY, LLC

By:

Name:

Title:

Attest:

Name:
Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series referred to in the within-mentioned Indenture.

WACHOVIA BANK, NATIONAL ASSOCIATION,
AS TRUSTEE

By:
AUTHORIZED OFFICER

[Reverse of Security]

This Security is one of a duly authorized issue of Exchanged Securities of the Company designated as its 6.95% Senior Notes due 2011 (herein called the "Securities"), issued under an Indenture, dated as of June 1, 2001 (herein called the "Indenture"), between the Company and First Union National Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture). The Securities will be unlimited in aggregate principal amount. The Securities will initially be issued in an aggregate principal amount of $700,000,000. The Company may, without the consent of the Holders, create and issue additional Securities (the "Additional Securities") ranking equally with the Original Securities and otherwise similar in all respects so that the Additional Securities shall be consolidated and form a single series with the Securities. The Company may not issue Additional Securities if an Event of Default shall occur and be continuing with respect to the Securities. Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

The Redemption Price will be calculated assuming a 360-day year consisting of twelve 30-day months.

"Quotation Agent" means the Reference Treasury Dealer appointed by the Company.

The Securities do not have the benefit of any sinking fund obligations.

If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Security, or (ii) certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth therein.

Interest (other than Special Interest) on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

ASSIGNMENT FORM

If you, the holder, want to assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to

(Insert assignee's social security or tax ID number)

(Print or type assignee's name, address and zip code)

and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for such agent.

Date:                             Your Signature:

---------------                   ----------------------------------------------
                                  (Sign exactly as your name appears on
                                  the other side of this Note)

                                  By:
                                      ------------------------------------------
                                  NOTICE: To be executed by an executive officer

Signature Guarantee:

SCHEDULE OF INCREASES OR DECREASES IN REGISTERED GLOBAL SECURITY

The following increases or decreases in this Registered Global Security have been made:

                                                                         Principal Amount of this           Signature of
                 Amount of decrease In        Amount of Increase in     Registered Global Security      authorized officer of
  Date of       Principal Amount of this     Principal Amount of this            following              Trustee or Securities
 Exchange      Global Registered Security   Global Registered Security   such decrease or increase            Custodian
----------     --------------------------   --------------------------  --------------------------      ----------------------

EXHIBIT 5

April 3, 2002

Exelon Generation Company, LLC
300 Exelon Way
Kennett Square, Pennsylvania 15348

Re: REGISTRATION STATEMENT ON FORM S-4

Ladies and Gentlemen:

We have acted as counsel to Exelon Generation Company, LLC, a Pennsylvania corporation (the "Company"), and are rendering this opinion in connection with the preparation and filing with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-4 (the "Registration Statement") relating to the registration under the Act of the Company's $700,000,000 aggregate principal amount of 6.95% Senior Notes due 2011 (the "Exchange Notes").

The Exchange Notes are to be offered in exchange for the Company's outstanding $700,000,000 aggregate principal amount of 6.95% Senior Notes due 2011 issued and sold by the Company on June 14, 2001 in an offering exempt from registration under the Act. The Exchange Notes will be issued by the Company in accordance with the terms of the Indenture (the "Indenture"), dated as of June 1, 2001, between the Company and First Union National Bank (now Wachovia Bank, National Association).

In our capacity as counsel, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statement and all exhibits thereto, including the Indenture, and of such records of the Company and other agreements, documents and instruments, and have made such inquiries of officers and representatives of the Company and other persons and have considered such matters of law as we have deemed appropriate as the basis for the opinions hereafter set forth. In all cases, we have assumed the legal capacity and competence of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of documents submitted to us as certified, conformed, photostatic or facsimile copies and the accuracy and

completeness of all corporate records and other information made available to us by the Company.

Based upon and subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that, when (i) the Registration Statement has become effective under the Act, and (ii) the Exchange Notes have been duly executed and authenticated in accordance with the Indenture and duly issued and delivered by the Company in the manner contemplated in the Registration Statement and any prospectus relating thereto, the Exchange Notes will constitute valid and binding obligations of the Company.

We express no opinion as to the law of any jurisdiction other than the federal laws of the United States and the laws of the Commonwealth of Pennsylvania.

We hereby consent to the sole use of this opinion as an exhibit to the Registration Statement and to the use of our name under the heading "Legal Matters" in the prospectus included therein. This opinion is not to be used, circulated, quoted, referred to or relied upon by any other person or for any other purpose without our prior written consent.

Very truly yours,

/s/ Ballard Spahr Andrews & Ingersoll, LLP

April 3, 2002

Exelon Generation Company, LLC
300 Exelon Way
Kennett Square, PA 15348

RE: EXELON GENERATION COMPANY, LLC

Dear Ladies and Gentlemen:

We have acted as special counsel to Exelon Generation Company, LLC (the "Company"), a Pennsylvania limited liability company, in connection with the preparation and filing of the registration statement on Form S-4 (the "Registration Statement") with the Securities and Exchange Commission, relating to the registration, under the Securities Act of 1933, as amended (the "Securities Act"), of the Company's $700,000,000 aggregate principal amount of 6.95% Senior Notes due 2011, as described in the prospectus (the "Prospectus") included as part of the Registration Statement.

We hereby adopt and confirm to you our opinions as set forth under the headings "Summary of the Exchange Offer: Tax Consequences" in the Prospectus Summary and "Certain United States Federal Income Tax Considerations" in the Prospectus, and hereby consent to the filing of this opinion as an exhibit to the Registration Statement. This opinion is not to be used, circulated, quoted, referred to or relied upon by any other person or for any other purpose without our prior written consent.

Very truly yours,

/s/ Ballard Spahr Andrews & Ingersoll

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT 10.1

POWER PURCHASE AGREEMENT
BETWEEN
EXELON GENERATION COMPANY AND PECO ENERGY COMPANY

THIS AGREEMENT (hereinafter, the "Agreement") is made and entered into as of the first day of January, 2001 by and between Exelon Generation Company, LLC (hereinafter referred to as "Exelon Generation") and PECO Energy Company (hereinafter referred to as "PECO Energy") (hereinafter individually referred to as "Party" or collectively as "Parties").

WHEREAS, pursuant to the corporate restructuring of PECO Energy Company (the "Restructuring"), which has been approved by the Pennsylvania Public Utility Commission, the Federal Energy Regulatory Commission ("FERC"), the Nuclear Regulatory Commission, and the Securities and Exchange Commission ("SEC"), PECO Energy and Exelon Generation will be separate corporate affiliates directly or indirectly held by Exelon Corporation, which is a holding company registered with the SEC under the Public Utility Holding Act of 1935; and

WHEREAS, PECO Energy has responsibility for operating the transmission and distribution systems of PECO Energy and, for the duration of the intangible transition charge and competitive transition charge recovery period, for serving as provider-of-last resort ("PLR") for all retail customers located in the PECO Zone as defined by PJM who do not purchase power from an alternative electric generation supplier or from any Competitive Default Supplier ("PLR Customers"); and

WHEREAS, as a result of the transfer of the generation assets and contract rights of PECO Energy to Exelon Generation that is part of the Restructuring, Exelon Generation will have the responsibility for operating the generation and generation related assets of Exelon Generation, and will, pursuant to this Agreement, have responsibility for selling the capacity and energy associated with these assets and rights to PECO Energy to enable PECO Energy to serve PLR Customers; and

NOW THEREFORE, in consideration of the premises, the mutual agreements set forth herein and other good and valuable consideration, and intending to be legally bound hereby, the Parties agree as follows:

1. FULL REQUIREMENTS RETAIL PRODUCT

During the Term, Exelon Generation will provide and sell to PECO Energy, and PECO Energy will accept and purchase, Full Retail Requirements ("FRR") - Load Following Energy and Capacity from Exelon Generation for the sole purpose of supplying all of PECO Energy's PLR Customer load located in the PECO Zone as defined by PJM receiving any service under PECO Energy's retail tariff on file with the Pennsylvania Public Utility Commission as the same may be amended from time to time. From January 10, 2001, PECO Energy commits that the energy and

capacity pricing contained in any special contracts or proposed rates or riders under its retail tariff will enhance margin on a Company-wide basis.

2. TERM

FRR deliveries to PECO Energy under this Agreement shall commence as of the hour ending 0100 on January 01, 2001 and continue through the remaining duration of PECO Energy's PLR service obligations, which end in the hour ending 2400 on December 31, 2010.

3. ENERGY AND CAPACITY AMOUNTS

Exelon Generation will provide PECO Energy with energy, in amounts required to serve 100% of PECO Energy's PLR Customer load (grossed up for losses) for the Term subject to conditions set forth herein. Exelon Generation shall also provide PECO Energy with Unforced Capacity Credits, and/or Network Resource equivalents (each as defined by the Office of Interconnection of the PJM Interconnection, L.L.C. or its successor ("PJM")) for the Term in amounts required to meet 100% of PECO Energy's Unforced Capacity obligation as determined by PJM.

3.1 ENERGY AMOUNT Exelon Generation will deliver energy to PECO Energy in an amount necessary to meet PECO Energy's hourly load obligations for PLR Customers ("Scheduled Energy Amount"). The Scheduled Energy Amount for each hour will be determined by subtracting from the "day after" calculated total PECO Energy territory load, the aggregate of alternative electric generation suppliers' and Competitive Default Suppliers' "Net Load Schedules" for retail customers located in PECO Energy's service territory (as determined in accordance with Section 7 of PECO Energy's Electric Generation Supplier Coordination Tariff, on file with the PaPUC, Tariff Electric PaPUC No. 1S, as it may be modified from time to time) (the "Supplier Tariff').

The Scheduled Energy Amount will be delivered at the Delivery Point, as specified in Section 6 of this Agreement.

3.2 CAPACITY AMOUNT Exelon Generation will deliver capacity to PECO Energy in an amount ("Scheduled Capacity Amount") necessary to meet PECO Energy's daily Unforced Capacity obligation as determined by PJM.

4. FORECASTING AND SCHEDULING REQUIREMENTS

PECO Energy will provide to Exelon Generation, upon request, all information needed by Exelon Generation to calculate or verify PECO Energy's Scheduled Energy Amount for each hour. Such information includes, but is not limited to, the "day after" calculated hourly loads for

the PECO Energy territory and the aggregated Net Load Schedules of the load supplied by alternative electric generation suppliers and Competitive Default Suppliers in the PECO Energy territory.

PECO Energy and Exelon Generation will be responsible for scheduling and confirming PECO Energy's net load schedule and net capacity schedule with PJM in accordance with established PJM procedures. In the event that a Party fails to fulfill this daily responsibility, that Party will make the other whole with respect to the net cost of the error. Notwithstanding the above, in no event shall either Party be required to pay for any error arising from an event which was beyond said Party's reasonable control, was not the result of the Party's negligence, and which, by exercise of due diligence, the Party was unable to overcome or avoid.

5. TRANSMISSION

5.1 NETWORK TRANSMISSION SERVICE

PECO Energy will arrange for Network Transmission Service as defined by
PJM.
[********************************************************************]

5.2 OTHER TRANSMISSION SERVICE PRODUCTS

PECO Energy will arrange for all other transmission service products with PJM as necessary in amounts required to serve PECO Energy's PLR Customers.
[*******************************************************************.]

5.3 FIXED TRANSMISSION RIGHTS

PECO Energy will assign to Exelon Generation in accordance with PJM procedures any Fixed Transmission Rights ("FTRs") obtained using PECO Energy PLR Customer load and Exelon Generation capacity network resources.
[*******************************************************************.]

5.4 NETWORK RESOURCE DESIGNATION

Exelon Generation will designate network resources to serve PECO Energy's PLR Customer load to enable use of PJM's Network Transmission Service to serve PECO Energy's PLR Customer load. Notwithstanding, the specific units designated by Exelon Generation may or may not be used, at Exelon Generation's sole discretion, to serve PECO Energy's PLR Customer load.

6. DELIVERY POINT

The Delivery Point will be the "PECO Zone" load bus as defined by PJM.

7. GROSS RECEIPTS TAX

PECO Energy will be responsible for collecting Pennsylvania Gross Receipts Tax, or the successor thereto, from its PLR Customers and remitting revenue to the Commonwealth of Pennsylvania.[**************************************************

********************************************************************************
***************************.]

8.       PJM CHARGES TO LOAD SERVING ENTITIES

[*******************************************************************************
********************************************************************************
******************.]

9.       PRICING AND PAYMENT TO EXELON GENERATION

[*******************************************************************************
********************************************************************************
********************]

         9.1      [*****************************]


         [**********************************************************************
         ***********************************************************************
         ***********************************************************************
         *******************************************************]:

                  1)
                                [***********************************************
                         *******************************************************
                         *******************************************************
                         ***]

                  2)
                                [***********************************************
                         *******************************************************
                         *******************************************************
                         *******************************************************
                         *****************************************************].

10.      AUTHORITY

This sale is made under the authority of Exelon Generation's market based rates tariff on file with the FERC and shall be governed by the terms and conditions of said tariff as the same may be amended from time to time, to the extent not inconsistent with this Agreement.

11. ASSIGNMENT

Neither Party may assign its rights or obligations under this Agreement.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed this Agreement by the undersigned duly authorized representatives as of the date first stated above.

Exelon Generation Company, LLC PECO Energy Company

By:    /s/ John L. Settelen                  By:    /s/ Kenneth G. Lawrence
    -----------------------------------      --------------------------------
--------------------------------------------------------------------------------
Name:  John L. Settelen                      Name:  Kenneth G. Lawrence
      ---------------------------------      -----------------------------------
--------------------------------------------------------------------------------
Title: Treasurer                             Title: President
       --------------------------------      -----------------------------------
--------------------------------------------------------------------------------

EXHIBIT 10.2

POWER PURCHASE AGREEMENT

DATED AS OF __________, 2001

AMONG

COMED GENERATION COMPANY LLC

EXELON GENERATION COMPANY, LLC

AND

COMMONWEALTH EDISON COMPANY

                                TABLE OF CONTENTS

                                                                                          PAGE
1.      Definitions and Interpretation.......................................................1
        (a)    Definitions...................................................................1
        (b)    Interpretation................................................................4
        (c)    Titles and Headings...........................................................4

2.      Term.................................................................................5
        (a)    Term..........................................................................5
        (b)    Provisions Surviving Termination..............................................5

3.      Character of Electric Energy; Scope of Service.......................................5
        (a)    Electric Energy...............................................................5
        (b)    Requirements..................................................................5
        (c)    Ancillary Services............................................................5
        (d)    Black Start Capability........................................................6

4.      Annual Load Plan.....................................................................6
        (a)    Annual Load Plan..............................................................6
        (b)    Genco Response................................................................6
        (c)    Shortfalls....................................................................7
        (d)    Updates.......................................................................7

5.      Transmission.........................................................................7
        (a)    Network Resource Designation..................................................7
        (b)    Genco Responsibility..........................................................7
        (c)    Interface of Control Area with Genco..........................................7

6.      Delivery; Title; Metering............................................................7
        (a)    Delivery and Title............................................................7
        (b)    Measurement...................................................................8

7.      Billing..............................................................................8
        (a)    Billing.......................................................................8
        (b)    Disputes......................................................................8
        (c)    Offsetting Charges............................................................8
        (d)    Records; Inspection...........................................................9

8.      Information; Outrage.................................................................9
        (a)    MAIN..........................................................................9
        (b)    Information...................................................................9
        (c)    Outage Scheduling.............................................................9

9.      Compensation.........................................................................9
        (a)    Energy Charge through December 31, 2002.......................................9
        (b)    Energy Charge from January 1, 2003 through December 31, 2004..................9
        (c)    Energy Charge During Partial Requirements Term................................9
        (d)    Ancillary Services............................................................9
        (e)    Competitive Transition Charge.................................................9

10.     Limitation of Liability.............................................................10


                                       i

11.     Assignment..........................................................................10

12.     Default; Termination and Remedies...................................................10
        (a)    Genco's Default..............................................................10
        (b)    ComEd Default................................................................10
        (c)    Remedies and Remedies Cumulative.............................................11

13.     Representations and Warranties......................................................11
        (a)    Representations and Warranties of Genco......................................11
        (b)    Representations and Warranties of ComEd......................................12

14.     Indemnification.....................................................................13

15.     Notices.............................................................................13

16.     Disagreements.......................................................................14
        (a)    Administrative Committee Procedure...........................................14
        (b)    Arbitration..................................................................14
        (c)    Obligations to Pay Charges and Perform.......................................16
        (d)    Preliminary Injunctive Relief................................................16
        (e)    Settlement Discussions.......................................................16

17.     Governing Law.......................................................................16

18.     No Third Party Beneficiaries........................................................16

19.     Partial Invalidity..................................................................16

20.     Waivers.............................................................................17

21.     WAIVER OF JURY TRIAL................................................................17

22.     Entire Agreement and Amendments.....................................................17

APPENDICES:

Appendix A: Prices through December 31, 2002 Appendix B: Prices from January 1, 2003 through December 31, 2004

POWER PURCHASE AGREEMENT

THIS POWER PURCHASE AGREEMENT (this "AGREEMENT") dated as of January 1, 2001 among (i) COMED GENERATION COMPANY LLC, a Delaware limited liability company ("COMED GENCO"), (ii) EXELON GENERATION COMPANY, LLC, a Pennsylvania limited liability company ("EXELON GENCO"), and (iii) COMMONWEALTH EDISON COMPANY, an Illinois corporation ("COMED");

W I T N E S S E T H:

WHEREAS, ComEd has transferred its interest in the Nuclear Stations to ComEd Genco pursuant to the provisions of a Contribution Agreement dated as of January 1, 2001 between ComEd and ComEd Genco; and

WHEREAS, ComEd desires to receive and purchase, and ComEd Genco desires to deliver and sell, electric energy to meet ComEd's requirements to serve its customers; and

WHEREAS, immediately following the execution and delivery of this Agreement, ComEd Genco is to be merged into and with Exelon Ventures Company, LLC, a Delaware limited liability company ("EXELON VENTURES") and the surviving entity in such merger pursuant to the terms of an Agreement and Plan of Merger dated as of the date hereof between ComEd Genco and Exelon Ventures; and immediately thereafter, Exelon Ventures will contribute all of the assets constituting the Nuclear Stations to Exelon Genco, which will then own and operate the Nuclear Stations;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein set forth, the parties hereto agree as follows:

1. DEFINITIONS AND INTERPRETATION

(a) DEFINITIONS. As used in this Agreement, (i) the ten as set forth below in this Section 1(a) shall have the respective meanings so set forth and
(ii) the terms defined elsewhere in this Agreement shall have the meanings therein so specified.

"ANCILLARY SERVICES" has the meaning specified in Section 3(c).

"ANNUAL LOAD PLAN" has the meaning specified in Section 4(a).

"BANKRUPTCY" means any case, action or proceeding, under any bankruptcy, reorganization, debt arrangement, insolvency or receivership law or any dissolution or liquidation proceeding commenced by or against a Person and, if such case, action or proceeding is not commenced by such Person, such case or proceeding shall be consented to or acquiesced in by such Person or shall result in an order for relief or shall remain undismissed for 90 days.

"BLACK START SERVICE" means the provision and operation of equipment that is necessary to reestablish the ability of the transmission and distribution systems to deliver

electric energy after a large-scale interruption, and includes the maintenance and use of the equipment necessary to allow the interconnected grid to be restored to operation absent an external source of power to the generating units that support the grid.

"BUSINESS DAY" means each weekday (Monday through Friday) except the days on which the following holidays are observed: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

"CHANGE OF LAW" means the adoption, promulgation, modification or reinterpretation of any law, rule, regulation, ordinance, order or other Requirement of Law of any Governmental Authority which occurs subsequent to the Effective Date but excluding any change in law relating to taxation of net income.

"COMED EVENT OF DEFAULT" has the meaning specified in Section 12(b).

"CONTRACT YEAR" means, in the case of the First Contract Year, the period beginning on the Effective Date and ending on December 31 of the calendar year in which such Effective Date occurs; and, in the case of subsequent Contract Years, means a calendar year beginning on January 1 and ending on December 31. First Contract Year refers to the first such period commencing on the Effective Date; Second Contract Year refers to the calendar year immediately following such First Contract Year; and so on.

"CPT" means Central Prevailing Time, being the time then prevailing in the Central Time Zone of the United States, whether central, standard time or central daylight savings time.

"DEFAULT RATE" means (i) the "Prime Rate" as published from time to time in the "Money Rates" section of THE WALL STREET JOURNAL plus
(ii) 1.0% (100 basis points) per annum.

"EFFECTIVE DATE" means January 1, 2001.

"ELECTRIC ENERGY" has the meaning specified in Section 3(a).

"FERC" means the Federal Energy Regulatory Commission.

"FULL REQUIREMENTS TERM" means the period commencing on the Effective date through December 31, 2004.

"GENCO" shall mean (i) upon execution of this Agreement until the consummation of the transfer referred to in clause (ii) of this definition, ComEd Genco and its successor, Exelon Ventures, and (ii) following the consummation of the transfer of the Nuclear Stations to Exelon Genco, Exelon Genco and its successors and permitted assigns.

"GENCO EVENT OF DEFAULT" has the meaning specified in Section 12(a).

"GENERATING FACILITIES" has the meaning specified in Section 4(b).

"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, local or other governmental authority or regulatory agency, commission, department, or other governmental subdivision, court, tribunal or body, but excluding Genco and any subsequent owner(s) of the Generating Facilities (if otherwise a Governmental Authority under this definition).

"ISO" means any Person that becomes responsible under applicable FERC guidelines for the transmission system serving ComEd customers.

"MAIN" means the Mid-America Interconnected Network.

"NERC" means the North American Electric Reliability Council.

"NON-SUMMER MONTH"" means any month other than a Summer Month.

"NUCLEAR STATION" and "NUCLEAR STATIONS" have the meaning specified in Section 3(b)(ii).

"OFF-PEAK PERIOD" means, with respect to each day of a calendar week, the off-peak period as defined in Appendix 1F of NERC Policy 1 and, in addition, shall include all hours on Saturday.

"PARTIAL REQUIREMENTS TERM" means the period commencing on January 1, 2005 through December 31, 2006.

"PARTY" shall mean each, and "PARTIES" shall mean all, of (i) ComEd Genco and its successor, Exelon Ventures, until such time as the Nuclear Stations are transferred to Exelon Genco, at which time ComEd Genco and Exelon Ventures shall cease to be parties to this Agreement,
(ii) Exelon Genco and its successors and permitted assigns and (iii) ComEd and its successors and permitted assigns.

"PEAK PERIOD" means, with respect to each day of a calendar week, the on-peak period as defined in Appendix 1F of NERC Policy 1, but shall exclude all hours on Saturday.

"PERMITS" means all licenses, permits, franchises, approvals, authorizations, consents, waivers, exemptions, variances or orders of, or filings by Genco and required by, or otherwise issued by any Governmental Authority.

"PERSON" means any natural person, corporation, partnership, firm, association, trust, unincorporated organization, Governmental Authority or any other entity whether acting in an individual, fiduciary or other capacity.

"PRUDENT UTILITY PRACTICES" means any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry in the United States of America during the relevant time period, or any of the practices, methods or acts which, in the exercise of reasonable judgment in light of the facts known at the time the

decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. "PRUDENT UTILITY PRACTICES" is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be acceptable practices, methods or acts generally accepted in the electric utility industry in the United States of America.

"REQUIREMENT OF LAW" means any foreign, federal, state and local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any federal, state, local or other governmental authority or regulatory body (including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements) or an applicable tariff filed with any federal, state, local or other governmental authority or regulatory body.

"SUMMER MONTH" means each of June, July, August and September.

"TAXES" means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, withholding, payroll, employment, excise, property, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amount with respect thereto.

"TERM" has the meaning specified in Section 2.

(b) INTERPRETATION. In this Agreement, unless a clear contrary intention appears:(i) the singular includes the plural and vice versa; (ii) reference to any Person includes such Person's successors and assigns but, in the case of a Party, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually; (iii) reference to any gender includes each other gender; (iv) reference to any agreement (including this Agreement), document, instrument or tariff means such agreement, document, instrument or tariff as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof; (v) reference to any Requirement of Law means such Requirement of Law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, including, if applicable, rules and regulations promulgated thereunder;
(vi) reference to any Section means such Section of this Agreement, and references in any Section or definition to any clause means such clause of such
Section or definition; (vii) "hereunder", "hereof', "hereto" and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof or thereof; (viii) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term; and (ix) relative to the determination of any period of time, "from" means "from and including", "to" means "to but excluding" and "through" means "through and including".

(c) TITLES AND HEADINGS. Section and Appendix titles and headings in this Agreement are inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement.

2. TERM

(a) TERM. This Agreement shall have a term (the "TERM") commencing on the Effective Date and ending on December 31, 2006 unless terminated earlier as provided in Section 12(c) or Section 9(c).

(b) PROVISIONS SURVIVING TERMINATION. The provisions of Sections
7(d) (Records; Inspection), 10 (Limitation of Liability), 12 (Default, Termination and Remedies), 14 (Indemnification) and 16 (Disagreements) shall survive any termination of this Agreement.

3. CHARACTER OF ELECTRIC ENERGY; SCOPE OF SERVICE.

(a) ELECTRIC ENERGY. All electric energy ("ELECTRIC ENERGY") provided by Genco under this Agreement shall be in the form of three-phase alternating current having a nominal frequency of sixty cycles per second and a harmonic content consistent with the requirements of the Institute of Electrical and Electronic Engineers Standard No. 519.

(b) REQUIREMENTS.

(i) For the Full Requirements Term, Genco shall provide to ComEd, and ComEd shall purchase from Genco, a quantity of Electric Energy and capacity equal to the amount required by ComEd to meet its service obligations to its retail and wholesale customers and the energy imbalance requirements of the ComEd "control area" (after taking into account deliveries from other Persons of Electric Energy and capacity that ComEd is required to accept under any Requirement of Law).

(ii) For the Partial Requirements Term, Genco shall provide to ComEd, and ComEd shall purchase from Genco, Electric Energy and capacity from the Byron, Braidwood, LaSalle, Quad Cities and Dresden nuclear generating stations (individually, a "NUCLEAR STATION" and collectively, the "NUCLEAR STATIONS") equal to the amount required by ComEd to meet its service obligations to its retail and wholesale customer, subject in all events to the available capacity of the Nuclear Stations, and in the case of Quad Cities Nuclear Station, to the rights of such Station's co-owner. Genco shall have no obligation under this Agreement to provide Electric Energy or capacity from any other source during the Partial Requirements Term if the amount required by ComEd to meet such service obligations exceeds the available capacity of the Nuclear Stations. In addition, it is the intent of the Parties that during the Partial Requirements Term the Nuclear Stations shall be utilized as "base load" facilities to meet such service obligations and not as peakers, and that the Annual Load Plan, and the protocols and practices developed pursuant to Section 5(c), for each Contract Year during the Partial Requirements Term shall reflect such intent.

(c) ANCILLARY SERVICES. As directed by ComEd, Genco shall provide the following additional services (the "ANCILLARY SERVICES") during the Full Requirements Term:

(i) Reactive supply and voltage control from generation sources service;

(ii) Regulation and frequency response service.

(iii) Energy imbalance service;

(iv) Operating reserve - spinning reserve service;

(v) Operating reserve - supplemental reserve service; and

(vi) Black Start Service.

The requirements of the services set forth in clauses (i) through (v) (inclusive) shall be as stated in ComEd's Open Access Transmission Tariff as filed with FERC, and any other Requirement of Law and any requirements of MAIN, NERC, any ISO and any successors to the functions thereof.

(d) BLACK START CAPABILITY. Genco shall prepare and maintain a written plan setting forth the procedures that would be used to restart its generation after a system-wide blackout. Genco shall provide a copy of such plan to ComEd for its review and approval (which shall not be unreasonably withheld or delayed) as to its overall feasibility (after such approval, the "BLACK START PLAN"). ComEd shall provide for system restoration in accordance with the Black Start Plan. In addition, ComEd may request that Genco implement a test of such plan from time to time. Genco shall cooperate with ComEd, or any other entity performing the restoration function, in integrating the Black Start Plan into a system restoration plan and shall participate in training and restoration drills. In the event that system restoration is necessary, Genco shall respond to all directions from the entity performing the restoration.

4. ANNUAL LOAD PLAN

(a) ANNUAL LOAD PLAN. On or before (i) the Effective Date, in the case of the First Contract Year, and (ii) the October 1 immediately preceding the commencement of a Contract Year, in the case of each Contract Year after the First Contract Year, ComEd shall deliver to Genco a written load plan (the "ANNUAL LOAD PLAN") for such Contract Year, which shall set forth (i) the maximum peak load expected in each week in each calendar month (or portion of a calendar month) during such Contract Year, (ii) the expected requirements for the Ancillary Services in each calendar month (or portion of a calendar month) during such Contract Year and (iii) the average of maximum load day, average of average load day and average of minimum load day data for each of the following time periods in each calendar month (or portion of a calendar month) during such Contract Year: the weekday peak(16 hours) period, the weekday off-peak (hours) period and the weekend off-peak period. In the event that the Effective Date shall occur after September 1 in a year and prior to the immediately following January 1, then, in addition to an Annual Load Plan for the First Contract Year, ComEd shall also deliver an Annual Load Plan for the Second Contract Year.

(b) GENCO RESPONSE. Following the receipt of an Annual Load Plan, Genco may request that representatives of ComEd meet with its representatives for purposes of discussing and reviewing the Annual Load Plan. In any event, Genco shall, within thirty days of its receipt of an Annual Load Plan, identify
(i) the generating facilities ("GENERATING FACILITIES") that it desires that ComEd designate as "network resources" for the Contract Year in question and
(ii) the generating facilities from which it will provide Ancillary Services. In connection with the development of the Annual Load Plan for a Contract Year, ComEd and Genco may discuss and

agree upon specific terms and values associated with the implementation of voluntary curtailment actions for the Contract Year in question. Such terms and values may be adjusted by agreement of the Parties as appropriate during the applicable Contract Year.

(c) SHORTFALLS. The Parties acknowledge that an Annual Load Plan is designed to provide a reasonable basis on which to estimate ComEd's service requirements to its customers for the Contract Year in question, but shall not relieve Genco from its obligations under Section 3(b)(i) or (ii) to provide ComEd's actual full or partial requirements, as the case may be, needed to meet its service obligations to its retail and retained wholesale customers during such Contract Year.

(d) UPDATES. ComEd shall provide monthly updates to Genco regarding an Annual Load Plan to reflect any changes in expectations or circumstances.

5. TRANSMISSION

(a) NETWORK RESOURCE DESIGNATION. ComEd shall designate as "network resources" for a Contract Year any Generating Facilities identified by Genco under Section 4(b) in respect to an Annual Load Plan. Notwithstanding any such designation, such Generating Facilities may or may not be used by Genco, at Genco's sole discretion, to meet ComEd's requirements for Electric Energy, PROVIDED, HOWEVER, any sales of electric energy made by Genco to third parties from any such Generating Facility designated as a "network resource" shall be interruptible prior to sales of Electric Energy to ComEd under this Agreement.

(b) GENCO RESPONSIBILITY. Except as otherwise provided in Section
5(a), Genco shall be responsible for arranging any transmission service required in order to deliver Electric Energy to ComEd under this Agreement, including transmission service on systems not owned by ComEd. With respect to Generating Facilities designated as "network resources," Genco shall be responsible for arranging all necessary transmission service on transmission systems not owned by ComEd in order to ensure that such Generating Facilities qualify as "network resources" under ComEd's Open Access Transmission Tariff and any other Requirement of Law applicable thereto.

(c) INTERFACE OF CONTROL AREA WITH GENCO. The Parties acknowledge that certain operating and interface protocols and practices may need to be developed between ComEd, as the control area operator, and Genco, including with respect to, among other items, load forecasting, resource commitments, the sources and availability of Ancillary Services and the ability, pursuant to terms and conditions agreed to by the Parties, to obtain load reductions through voluntary customer load curtailments. The Parties agree to establish jointly from time to time in accordance with Prudent Utility Practices such operating and interface protocol as may be necessary with respect to control area operations and dispatch.

6. DELIVERY; TITLE; METERING

(a) DELIVERY AND TITLE. Electric Energy shall be delivered by Genco to ComEd, and title to such Electric Energy shall pass to ComEd, at its point of interconnection with ComEd's transmission system.

(b) MEASUREMENT. The amount of Electric Energy delivered by Genco to ComEd under this Agreement during a given hour shall be determined by:

(i) taking the total for such hour of Electric Energy delivered by or on behalf of Genco from (x) outside the ComEd control area to an interconnection with the ComEd transmission system, as established by scheduled deliveries of such Electric Energy at such interconnection, for delivery into the ComEd control area, and (y) generating facilities in the ComEd control area, as established by readings from meters at such facilities; and

(ii) subtracting therefrom the total for such hour of scheduled deliveries of Electric Energy (grossed-up for line losses, if not already so grossed-up) delivered by or on behalf of Genco to (x) an interconnection between the ComEd transmission system and the transmission system of a third party, for delivery outside of the ComEd control area and (y) non-ComEd customers in ComEd's control area.

7. BILLING

(a) BILLING.

(i) Within fifteen days after the end of each calendar month, Genco shall render an invoice to ComEd setting forth (a) all amounts due to Genco pursuant to this Agreement for the immediately preceding calendar month and all amounts remaining unpaid from previous calendar months and (b) the amount, if any, by which the amount set forth in clause (a) has been reduced as a result of any offset calculated in accordance with Section 7(c). Failure by Genco to render an invoice within such fifteen-day period shall not preclude Genco from subsequently rendering an invoice for the relevant calendar month.

(ii) ComEd shall pay any balance set forth in any such invoice by wire transfer of immediately available funds to the account specified in the invoice within fifteen days after receipt of the invoice, subject to the provisions of Section 7(b).

(b) DISPUTES. Within ten days after receiving an invoice pursuant to
Section 7(a), ComEd may, by written notice to Genco, dispute, in good faith, any amount set forth in such invoice, PROVIDED that ComEd shall pay all undisputed amounts pursuant to Section 7(a)(ii). If the dispute relates to any charge payable by ComEd to Genco hereunder, and such dispute is not resolved by the Parties within five days of the receipt of written notice by Genco, then the dispute shall be resolved as provided in Section 16. If the dispute (or any portion thereof) is resolved against ComEd, ComEd shall within three days of the date of such resolution pay to Genco amounts corresponding to such portion of the dispute which has been resolved against ComEd plus interest on such amounts from the date payable pursuant to Section 7(a) through the date paid at the Default Rate.

(c) OFFSETTING CHARGES. Each Party shall have the right to set-off against amounts payable to the other Party (i) any amounts paid by such Party for, or on behalf of, such other Party, (ii) any amounts due such Party from such other Party, whether under this Agreement or otherwise, and (iii) any overpayment by such Party to such other Party which is either undisputed

by such other Party or which has been determined to constitute an overpayment in accordance with Section 6(b).

(d) RECORDS; INSPECTION

(i) Each Party shall keep and maintain all records as may be necessary or useful in performing or verifying any calculations or charges made pursuant to this Agreement, or in verifying such Party's performance hereunder. All such records shall be retained by each Party for at least three calendar years following the calendar year in which such records were created. Each Party shall make such records available to the other Party for inspection and copying at the other Party's expense, upon reasonable notice during such Party's regular business hours. Each Party and its agents, including auditors, shall have the right, upon thirty days written notice prior to the end of an applicable three calendar year period to request copies of such records. Each Party shall provide such copies, at the other Party's expense, within thirty days of receipt of such notice or shall make such records available to the other Party and its agents, including auditors, in accordance with the foregoing provisions of this Section.

(ii) Each Party (and its representative(s)) shall have the right, at its sole expense, upon reasonable notice and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation relating to charges under this Agreement.

8. INFORMATION; OUTAGE SCHEDULING

(a) MAIN. For generating capacity that is located within the MAIN region and is part of the resources proposed to be used to meet an Annual Load Plan, Genco shall, to the extent it has the right to do so, require the operator(s) of such capacity to comply with all MAIN Guides and policies.

(b) INFORMATION. Genco shall, upon reasonable request, assist ComEd in providing information to MAIN, NERC, any ISO or any Governmental Authority as may be required, or considered by ComEd to be necessary.

(c) OUTAGE SCHEDULING. Genco shall undertake to schedule and/or adjust outages in the sources of generating capacity for a Contract Year in accordance with Prudent Utility Practice and so as to minimize outages during the Summer Months.

9. COMPENSATION

ComEd shall pay to Genco, in respect of each calendar month during the Term, the following amounts:

(a) ENERGY CHARGE THROUGH DECEMBER 31, 2002. For Electric Energy sold to ComEd under this Agreement from the Effective Date through December 31, 2002:

(i) during Peak Periods in such month, an amount equal to the product of the number of megawatt-hours delivered to ComEd during such Peak Period (determined as provided in Section 6(b)), multiplied by the price per megawatt hour shown for such Peak Period on Appendix A and

(ii) during Off-Peak Periods in such month, an amount equal to the product of the number of megawatt-hours delivered to ComEd during such Off-Peak Period (determined as provided in Section
6(b)), multiplied by the price per megawatt hour shown for such Off-Peak Period on Appendix A.

(b) ENERGY CHARGE FROM JANUARY 1, 2003 THROUGH DECEMBER 31, 2004. For Electric Energy sold to ComEd under this Agreement from January 1, 2003 through December 31, 2004:

(c) ENERGY CHARGE DURING PARTIAL REQUIREMENTS TERM. Prior to December 31, 2004, the Parties shall meet and discuss the energy charge(s) and any other charges (including charges for any "competitive transitional charges" (as defined in Illinois Public Act 90-561)) to be applied during the Partial Requirements Term. Such prices shall be reflective of market prices for electirc energy delivered in the geographic region served by ComEd in the quantities contemplated under this Agreement for the Partial Requirements Term. Such market prices (E.G., market indices or power exchange prices) that may exist at the time. ComEd may terminate this Agreement as of December 31, 2004 in the event that the Parties are unable to arrive at an agreement by July 1, 2004 (or such later date as the Parties may determine) as to the pricing to be applied to Electric Energy to be delivered during the Partial Requirements Term.

(d) ANCILLARY SERVICES. For any Ancillary Services sold to ComEd for its own use under this Agreement, it is agreed that the price for such Ancillary Services is the same price as ComEd is entitled to collect for such Ancillary Serive under the provisions of its Open Access Transmission Tariff as filed with FERC or, in the case of the Ancillary Service described in
Section 3(c)(vi), ComEd's Rate RCDS, and that the energy charge calculated under Section 9(a) or (b), as the case may be, includes such prices. For any Ancillary Services sold to ComEd for the use of a third party transmission customer of ComEd, Genco shall be entitled to receive the amount which ComEd receives from such third party in respect of such Anicllary Service under the provisions of ComEd's Open Access Transmission Tariff or, in the case of the Ancillary Service described in Section 3(c)(vi), ComEd's Rate RCDS.

(e) COMPETITIVE TRANSITION CHARGE. The prices set forth in
Section 9(a) and (b) have been calculated inclusive of an amount for the "competitive transition charge" (as defined in Illinois Public Act 90-561).

10. LIMITATION OF LIABILITY

In no event or under any circumstances shall either Party (including such Party's affiliates and such Party's and such affiliates' respective directors, officers, employees and agents) be liable to the other Party (including such Party's affiliates and such Party's and such affiliate's respective directors, officers, employees and agents) for any special, incidental, exemplary, indirect, punitive or consequential damages or damages in the nature of lost profits, whether such loss is based on contract, warranty or tort (including intentional acts, errors or omissions, negligence, indemnity, strict liability or otherwise). A Party's liability under this Agreement shall be limited to direct, actual damages, and all other damages at law or in equity are waived.

11. ASSIGNMENT

Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, a Party shall have the right to assign its rights and obligations hereunder without the consent of the other Party to any affiliate of such Party.

12. DEFAULT; TERMINATION AND REMEDIES

(a) GENCO'S DEFAULT. The occurrence and continuation of any of the following events or circumstances at any time during the Term, except to the extent caused by, or resulting from, an act or omission of ComEd in breach of this Agreement, shall constitute an event of default by Genco ("GENCO EVENT OF DEFAULT"):

(i) Genco fails to pay any sum due from it hereunder on the due date thereof and such failure is not remedied within 10 Business Days after receipt of written notice thereof from ComEd;

(ii) Genco's Bankruptcy; or

(iii) Genco fails in any material respect to perform or comply with any other obligation in this Agreement on its part to be observed or performed which failure materially and adversely affects ComEd, and if reasonably capable of remedy, is not remedied within 60 days after ComEd has given written notice to Genco of such failure and requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot reasonably be cured within such period of 10 days, such failure shall not constitute a Genco Event of Default if Genco has promptly commenced and is diligently proceeding to cure such default.

(b) COMED DEFAULT. The occurrence and continuation of any of the following events or circumstances at any time during the Term, except to the extent caused by, or resulting from, an act or omission of Genco in breach of this Agreement, shall constitute an event of default by ComEd ("COMED EVENT OF DEFAULT"):

(i) ComEd fails to pay any amount due from it pursuant to
Section 9 hereof on the due date thereof and such failure is not remedied within 10 Business Days after receipt of written notice thereof from Genco;

(ii) ComEd's Bankruptcy; or

(iii) ComEd fails in any material respect to perform or comply with any other obligation in this Agreement on its part to be observed or performed which failure materially and adversely affects Genco, and if reasonably capable of remedy, is not remedied within 60 days after Genco has given written notice to ComEd of such failure and requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot reasonably be cured within such period of 60 days, such failure shall not constitute a ComEd Event of Default if ComEd has promptly commenced and is diligently proceeding to cure such default.

(c) REMEDIES AND REMEDIES CUMULATIVE. Upon the occurrence and during the continuation of a Genco Event of Default, ComEd may at its discretion
(i) terminate this Agreement upon 30 days prior written notice to Genco and (ii) exercise any other rights and remedies available to it at law or in equity. Upon the occurrence and during the continuation of a ComEd Event of Default, Genco may seek money damages from ComEd but may not terminate this Agreement.

13. REPRESENTATIONS AND WARRANTIES

(a) REPRESENTATIONS AND WARRANTIES OF GENCO. Genco hereby makes the following representations and warranties to ComEd:

(i) Genco is a limited liability company duly organized and validly existing under the laws of the State of Delaware and has the legal power and authority to own its properties, to carry on its business as now being conducted and to enter into this Agreement and carry out transactions contemplated hereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement.

(ii) The execution, delivery and performance by Genco of this Agreement have been duly authorized by all necessary corporate action.

(iii) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the fulfillment of and compliance with the provisions of this Agreement, do not and will not conflict with or constitute a breach of or a default under, any of the terms, conditions or provisions of any legal requirements, or any organizational documents, agreement, deed of trust, mortgage, loan agreement, other evidence of indebtedness or any other agreement or instrument to which Genco is a party or by which it or any of its property is bound, or result in a breach of or a default under any of the foregoing.

(iv) This Agreement constitutes the legal, valid and binding obligation of Genco enforceable in accordance with its terms, except as such enforceability may be

limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(v) There is no pending, or to the knowledge of Genco, threatened action or proceeding at or proceeding affecting Genco before any Governmental Authority, which purports to affect the legality, validity or enforceability of this Agreement.

(vi) Genco has all necessary approvals from Governmental Authorities for it to perform its obligations under this Agreement.

(b) REPRESENTATIONS AND WARRANTIES OF COMED. ComEd hereby makes the following representations and warranties to Genco:

(i) ComEd is a corporation duly organized, validly existing and in good standings under the law of the State of Illinois and has the legal power and authority to own its properties, to carry on its business as now being conducted and to enter into this Agreement and carry out the transactions contemplated hereby and perform and carry out all covenants and obligations on its part to be performed pursuant to this Agreement.

(ii) The execution, delivery and performance by ComEd of this Agreement have been duly authorized by all necessary corporate action.

(iii) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the fulfillment of and compliance with the provisions of this Agreement do not and will not conflict with or constitute a breach of or a default under, any of the terms, conditions or provisions of any legal requirements, or its articles of incorporation or bylaws, or any deed of trust, mortgage, loan agreement, other evidence of indebtedness or any other agreement or instrument to which ComEd is a party or by which it or any of its property is bound, or result in a breach of or a default under any of the foregoing.

(iv) This Agreement constitutes the legal, valid and binding obligation of ComEd enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally, or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(v) There is no pending, or to the knowledge of ComEd, threatened action or proceeding affecting ComEd before any Governmental Authority, which purports to affect the legality, validity or enforceability of this Agreement.

(vi) ComEd has all necessary approvals from Governmental Authorities for it to perform its obligations under this Agreement.

14. INDEMNIFICATION

Each Party shall indemnify and hold harmless the other Party, and its officers, directors, agents and employees from and against any and all claims, demands, actions, losses, liabilities, expenses (including reasonable legal fees and expenses), suits and proceedings of any nature whatsoever for personal injury, death or property damage to each other's property or facilities or personal injury, death or property damage to third parties caused by the negligence or willful misconduct of the indemnifying Party that arise out of or are in any manner connected with the performance of this Agreement, except to the extent such injury or damage is attributable to the negligence or willful misconduct of, or breach of this Agreement by, the Party seeking indemnification hereunder. Title, and all risk relating to, all Electric Energy purchased by ComEd under this Agreement shall pass to ComEd at the Applicable Point of Delivery. ComEd shall indemnify Genco for liability from Electric Energy once sold and delivered at the applicable point pf delivery set forth in Section
6(a); and Genco shall indemnify ComEd for liability from Electric Energy prior to its delivery at delivery at such point of delivery.

15. NOTICES

Unless otherwise provided in this Agreement, any notice, consent or other communication required to be made under this Agreement shall be in writing and shall be sent by facsimile transmission, delivered or sent to the address set forth below or such other address as the receiving Party may from time to time designate by written notice:

If to ComEd, to:

Commonwealth Edison Company
10 South Dearborn Street, 37th Floor
Chicago, Illinois 60603

Attention: President, Exelon Energy Delivery Facsimile No.: (312) 394-4488 Confirmation No.: (312) 394-3702

with a copy to:

Commonwealth Edison Company One Financial Place
440 South LaSalle Street Suite 3300
Chicago, Illinois 60605
Attention: General Counsel Facsimile: (312) 394-5733 Confirmation: (312) 394-3517

If to Genco, to:

Exelon Generation Company, LLC
300 Exelon Way
Kennett Square, PA 19348

Attention: Chief Executive Officer and President Facsimile: (610) 765-5418 Confirmation: (610) 765-5801

with a copy to:

Exelon Generation Company, LLC 300 Exelon Way
Kennett Square, PA 19348 Attention: General Counsel Facsimile: (610) 765-5805 Confirmation: (610) 765-5808

All notices shall be effective when received.

16. DISAGREEMENTS

(a) ADMINISTRATIVE COMMITTEE PROCEDURE. Except to the extent otherwise provided in Section 7(b), if any disagreement arises on matters concerning this Agreement, the disagreement shall be referred to one representative of each Party, who shall attempt to timely resolve the disagreement. If such representatives can resolve the disagreement, such resolution shall be reported in writing to and shall be binding upon the Parties. If such representatives cannot resolve the disagreement, such resolution shall be reported in writing to and shall be binding upon the Parties. If such representatives cannot resolve the disagreement within a reasonable time, or a Party fails to appoint a representative within 10 days of written notice of the existence of a disagreement, then the matter shall proceed to arbitration as provided in Section 16(b).

(b) ARBITRATION. If pursuant to Section 16(a), the Parties are unable to resolve a disagreement arising on a matter pertaining to this Agreement, such disagreement shall be settled by arbitration in Chicago, Illinois. The arbitration shall be governed by the United States Arbitration Act (9 U.S.C. ss. 1 ET SEQ.), and any award issued pursuant to such arbitration may be enforced in any court of competent jurisdiction. This agreement to arbitrate and any other agreement or consent to arbitrate entered into in accordance herewith will be specifically enforceable under the prevailing arbitration law of any court having jurisdiction. Notice of demand for arbitration must be filed in writing with the other Party to this Agreement. Arbitration shall be conducted as follows:

(i) Either Party may give the other Party written notice in sufficient detail of the disagreement and the specific provision of this Agreement under which the disagreement arose. The demand for arbitration must be made within a reasonable time after the disagreement has arisen. In no event may the demand for arbitration be made if the institution of legal or equitable proceedings based on such disagreement is barred by

the applicable statute of limitations. Any arbitration related to this Agreement may be consolidated with any other arbitration proceedings related to this Agreement.

(ii) The Parties shall attempt to agree on a person with special knowledge and expertise with respect to the matter at issue to serve as arbitrator. If the Parties cannot agree on an arbitrator within ten days, each shall then appoint one person to serve as an arbitrator and the two thus appointed shall select a third arbitrator with such special knowledge and expertise to serve as Chairman of the panel of arbitrators; and such three arbitrators shall determine all matters by majority vote; PROVIDED, HOWEVER, if the two arbitrators appointed by the Parties are unable to agree upon the appointment of the third arbitrator within five days after their appointment, both shall give written notice of such failure to agree to the Parties, and, if the Parties fail to agree upon the selection of such third arbitrator within five days thereafter, then either of the Parties upon written notice to the other may require appointment from, and pursuant to the rules of, the Chicago office of the American Arbitration Association for commercial arbitration. Prior to appointment, each arbitrator shall agree to conduct such arbitration in accordance with the terms of this Agreement.

(iii) The Parties shall have sixty days from the appointment of the arbitrator(s) to perform discovery and present evidence and argument to the arbitrator(s). During that period, the arbitrator(s) shall be available to receive and consider all such evidence as is relevant and, within reasonable limits due to the restricted time period, to hear as much argument as is feasible, giving a fair allocation of time to each Party to the arbitration. The arbitrator(s) shall use all reasonable means to expedite discovery and to sanction noncompliance with reasonable discovery requests or any discovery order. The arbitrator(s) shall not consider any evidence or argument not presented during such period and shall not extend such period except by the written consent of both Parties. At the conclusion of such period, the arbitrator(s) shall have forty-five calendar days to reach a determination. To the extent not in conflict with the procedures set forth herein, which shall govern, such arbitration shall be held in accordance with the prevailing rules of the Chicago office of the American Arbitration Association for commercial arbitration.

(iv) The arbitrator(s) shall have the right only to interpret and apply the terms and conditions of this Agreement and to order any remedy allowed by this Agreement, but may not change any term or condition of this Agreement, deprive either Party of any right or remedy expressly provided hereunder, or provide any right or remedy that has been expressly excluded hereunder,

(v) The arbitrator(s) shall give a written decision, to the Parties stating their findings of fact and conclusions of law, and shall furnish to each Party a copy thereof signed by him (them) within five calendar days from the date of their determination. The arbitrator's(s') decision shall be final and binding upon the Parties.

(vi) Each Party shall pay the cost of the arbitrator(s) with respect to those issues as to which they do not prevail, as determined by the arbitrator(s).

(c) OBLIGATIONS TO PAY CHARGES AND PERFORM. If a disagreement should arise on any matter which is not resolved as provided in Section 16(a), then, pending the resolution of the disagreement by arbitration as provided in Section
16(b), Genco shall continue to provide Electric Energy in a manner consistent with the applicable provisions of this Agreement and pay all charges and perform all other obligations required in accordance with the applicable provisions of this Agreement.

(d) PRELIMINARY INJUNCTIVE RELIEF. Nothing in this Section 16 shall preclude, or be construed to preclude, the resort by either Party to a court of competent jurisdiction solely for the purposes of securing a temporary or preliminary injunction to preserve the status quo or avoid irreparable harm pending arbitration pursuant to this Section 16.

(e) SETTLEMENT DISCUSSIONS. The Parties agree that no statements of position or offers of settlement made in the course of the dispute process described in this Section 16 will be offered into evidence for any purpose in any litigation or arbitration between the Parties, nor will any such statements or offers of settlement be used in any manner against either Party in any such litigation or arbitration. Further, no such statements or offers of settlement shall constitute an admission or waiver of rights by either Party in connection with any such litigation or arbitration. At the request of either Party, any such statements and offers of settlement, and all copies thereof, shall be promptly returned to the Party providing the same.

17. GOVERNING LAW

Except as provided in Section 16, this Agreement shall be construed in accordance with, and governed by, the laws of the state of Illinois without regard to its conflicts of laws provisions.

18. NO THIRD PARTY BENEFICIARIES

This Agreement is intended to be solely for the benefit of the Parties and their successors and permitted assigns and is not intended to and shall not confer any rights or benefits on any third party not a signatory hereto. The Parties' successors and permitted transferees shall be bound by the provisions of this Agreement.

19. PARTIAL INVALIDITY

Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, legality or unenforceability without invalidating the remainder of such invalid, illegal or unenforceable provision or provisions or any other provisions hereof, unless such a construction would be unreasonable. In the event that such a construction would be unreasonable or would deprive a Party of a material benefit under this Agreement, the Parties shall seek to amend this Agreement to remove the invalid provision and otherwise provide the benefit unless prohibited by any Requirement of Law.

20. WAIVERS

The failure of either Party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of a Party thereafter to enforce each and every such provision. A waiver under this Agreement must be in writing and state that it is a waiver. No waiver of any breach of this Agreement shall be held to constitute a waiver or subsequent breach.

21. WAIVER OF JURY TRIAL

THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT.

22. ENTIRE AGREEMENT AND AMENDMENTS

This Agreement supersedes all previous representations, understandings, negotiations and agreements either written or oral between the Parties or their representatives with respect to the supply and delivery of Electric Energy and constitutes the entire agreement of the Parties with respect thereto.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set forth at the beginning of this Agreement.

COMMONWEALTH EDISON COMPANY

By: /s/ Robert E. Berdelle
    -------------------------------------
    Name:  Robert E. Berdelle
    Title: Vice President

COMED GENERATION COMPANY LLC

By: /s/ Robert E. Berdelle
    -------------------------------------
    Name:  Robert E. Berdelle
    Title: Vice President

EXELON GENERATION COMPANY, LLC

By: /s/ Robert E. Berdelle
    -------------------------------------
    Name:  Robert E. Berdelle
    Title: Vice President

EXHIBIT 12

Ratio of Earnings to Fixed Charges
(Amounts in million of dollars)

                                                          2001                     2000                    1999

Pre-tax income from continuing operations
before adjustment for income or loss from
equity investees                                          749                      416                     329

Fixed charges:

Interest costs and amoritization of debt
discount and premium on all indebtedness                  132                       43                      18

Rentals                                                    10                        6                       6

Total Fixed Charges                                       142                       49                      24

Pre-tax income from continuing operations
before adjustment for income or loss from
equity investees plus fixed charges                       874                      463                     347

Ratio of earnings to fixed charges                      6.15                     9.45                   14.46

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-4 of our report dated March 1, 2001, relating to the financial statements of Exelon Generation Company LLC, which appear in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Philadelphia, PA
April 3, 2002

EXHIBIT 24

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature                          Date                 Title
---------                          ----                 -----
                                   April __, 2002       Chief Executive Officer
                                                        and President, Exelon
-----------------------------                           Generation
Oliver D. Kingsley, Jr.                                 Company, LLC


                                   April __, 2002       Vice President and
                                                        Controller, Exelon
-----------------------------                           Generation Company, LLC
John L. Settelen, Jr.

EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)

WACHOVIA BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)

22-1147033
(I.R.S. Employer Identification No.)

301 S. COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)

28288-0630
(Zip Code)

FIRST UNION NATIONAL BANK
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 670-6300
(Name, address and telephone number of Agent for Service)

EXELON GENERATION COMPANY, LLC
(Exact Name of Obligor as Specified in its Charter)

PENNSYLVANIA

(State or other jurisdiction of Incorporation or Organization)

23-3064219

(I.R.S. Employer Identification No.)

300 EXELON WAY
KENNETT SQUARE, PA
(Address of Principal Executive Offices)

15348
(Zip Code)

6.95% SENIOR NOTES DUE 2011 (EXCHANGE NOTES)
(TITLE OF INDENTURE SECURITIES)

1. GENERAL INFORMATION.

FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH IT IS SUBJECT:
Comptroller of the Currency
United States Department of the Treasury Washington, D.C. 20219

Federal Reserve Bank
Richmond, Virginia 23219

Federal Deposit Insurance Corporation Washington, D.C. 20429

b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

Yes.

2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH

AFFILIATION.

None.

3. VOTING SECURITIES OF THE TRUSTEE.

FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES

OF THE TRUSTEE:

Not applicable - see answer to Item 13.

4. TRUSTEESHIPS UNDER OTHER INDENTURES.

IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:

Not applicable - see answer to Item 13.

5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR UNDERWRITERS.

IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.

Not applicable - see answer to Item 13.
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.

FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF THE OBLIGOR:

Not applicable - see answer to Item 13.

7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR OFFICIALS.

FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER:

Not applicable - see answer to Item 13.

8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.

FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE TRUSTEE:

Not applicable - see answer to Item 13.

9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.

IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:

Not applicable - see answer to Item 13.

10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.

IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING STOCK OF THE OBLIGOR OR
(2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON:

Not applicable - see answer to Item 13.

11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.

IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:

Not applicable - see answer to Item 13.

12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.

EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE

TRUSTEE, FURNISH THE FOLLOWING INFORMATION:

Not applicable - see answer to Item 13.

13. DEFAULTS BY THE OBLIGOR.

(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.

None.

(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
None
14. AFFILIATIONS WITH THE UNDERWRITERS.

IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH

SUCH AFFILIATION.

Not applicable - see answer to Item 13.

15. FOREIGN TRUSTEE.

IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE TRUSTEE IS AUTHORIZED TO

ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED UNDER THE ACT.

Not applicable - trustee is a national banking association organized under the laws of the United States.

16. LIST OF EXHIBITS.

LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.

_X_ 1. Copy of Articles of Association of the trustee as now in effect.

_X_ 2. Copy of the Certificate of the Comptroller of the Currency dated March 27, 2002, evidencing the authority of the trustee to transact business.

_X_ 3. Copy of the Certification of Fiduciary Powers of the trustee by the Office of the Comptroller of the Currency dated March 27, 2002.

_X_ 4. Copy of existing by-laws of the trustee.

___ 5. Copy of each indenture referred to in Item 4, if the obligor is in default.
-Not Applicable.

_X_ 6. Consent of the trustee required by Section 321(b) of the Act.

_X_ 7. Copy of report of condition of the trustee at the close of business on December 31, 2002, published pursuant to the requirements of its supervising authority. *

___ 8. Copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act.
- Not Applicable

___ 9. Consent to service of process required of foreign trustees pursuant to Rule 10a-4 under the Act.
- Not Applicable

* As of December 31, 2001, the Trustee was two separate National Banking Associations hence there are two separate reports enclosed.

NOTE

The trustee disclaims responsibility for the accuracy or completeness of information contained in this Statement of Eligibility and Qualification not known to the trustee and not obtainable by it through reasonable investigation and as to which information it has obtained from the obligor and has had to rely or will obtain from the principal underwriters and will have to rely.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939,the trustee, Wachovia Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility and Qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Philadelphia and the Commonwealth of Pennsylvania, on the 3rd day of April, 2002.

Wachovia Bank, National Association

By: s/James M. Matthews, Jr.
   -------------------------
      James M. Matthews, Jr.
    Assistant Vice President

EXHIBIT 1

WACHOVIA BANK, NATIONAL ASSOCIATION

CHARTER NO. 1*

ARTICLES OF ASSOCIATION

AS RESTATED 4/1/02

* The OCC allowed the reassignment of Charter No. 1 (formerly held by CoreStates Bank, N.A., which merged into First Union National Bank on 5/15/98) to First Union National Bank on 5/18/98. Charter No. 1 superceded Charter No. 22693. On 4/1/02, First Union National Bank changed its name to Wachovia Bank, National Association.

Charter No. 1

WACHOVIA BANK, NATIONAL ASSOCIATION

ARTICLES OF ASSOCIATION

For the purpose of organizing an Association to carry on the business of banking under the laws of the United States, the undersigned do enter into the following Articles of Association:

FIRST. The title of this Association shall be WACHOVIA BANK, NATIONAL
ASSOCIATION.

SECOND. The main office of the Association shall be in Charlotte, County of Mecklenburg, State of North Carolina. The general business of the Association shall be conducted at its main office and its branches.

THIRD. The Board of Directors of this Association shall consist of not less than five nor more than twenty-five directors, the exact number of directors within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by resolution of the shareholders at any annual or special meeting thereof. Unless otherwise provided by the laws of the United States, any vacancy in the Board of Directors for any reason, including an increase in the number thereof, may be filled by action of the Board of Directors.

FOURTH. The annual meeting of the shareholders for the election of directors and the transaction of whatever other business may be brought before said meeting shall be held at the main office or such other place as the Board of Directors may designate, on the day of each year specified therefor in the By-Laws, but if no election is held on that day, it may be held on any subsequent day according to the provisions of law; and all elections shall be held according to such lawful regulations as may be prescribed by the Board of Directors.

Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the bank entitled to vote for election of directors. Nominations, other than those made by or on behalf of the existing management of the bank, shall be made in writing and shall be delivered or mailed to the President of the bank and to the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors, PROVIDED, HOWEVER, that if less than 21 days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Bank and to the Comptroller of the Currency not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the bank that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and (e) the number of shares of capital stock of the bank owned by the notifying shareholder. Nominations not made in accordance herewith may, in his discretion, be disregarded by the Chairman of the meeting, and upon his instructions, the vote tellers may disregard all votes cast for each such nominee.

FIFTH.

(a) GENERAL. The amount of capital stock of this Association shall be (I) 25,000,000 shares of common stock of the par value of twenty dollars ($20.00) each (the "Common Stock") and (ii) 160,540 shares of preferred stock of the par value of one dollar ($ 1. 00) each (the "Non-Cumulative Preferred Stock"), having the rights, privileges and preferences set forth below, but said capital stock may be increased or decreased from time to time in accordance with the provisions of the laws of the United States.

(b) TERMS OF THE NON-CUMULATIVE PREFERRED STOCK.

1. GENERAL. Each share of Non-Cumulative Preferred Stock shall be identical in all respects with the other shares of Non-Cumulative Preferred Stock. The authorized number of shares of Non-Cumulative Preferred Stock may from time to time be increased or decreased (but not below the number then outstanding) by the Board of Directors. Shares of Non-Cumulative Preferred Stock redeemed by the Association shall be canceled and shall revert to authorized but unissued shares of Non-Cumulative Preferred Stock.

2. DIVIDENDS.

(a) GENERAL. The holders of Non-Cumulative Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, but only out of funds legally available therefor, non-cumulative cash dividends at the annual rate of $83.75 per share, and no more, payable quarterly on the first days of December, March, June and September, respectively, in each year with respect to the quarterly dividend period (or portion thereof) ending on the day preceding such respective dividend payment date, to shareholders of record on the respective date, not exceeding fifty days preceding such dividend payment date, fixed for that purpose by the Board of Directors in advance of payment of each particular dividend. Notwithstanding the foregoing, the cash dividend to be paid on the first dividend payment date after the initial issuance of Non-Cumulative Preferred Stock and on any dividend payment date with respect to a partial dividend period shall be $83.75 per share multiplied by the fraction produced by dividing the number of days since such initial issuance or in such partial dividend period, as the case may be, by 360.

(b) NON-CUMULATIVE DIVIDENDS. Dividends on the shares of NonCumulative Stock shall not be cumulative and no rights shall accrue to the holders of shares of Non-Cumulative Preferred Stock by reason of the fact that the Association may fail to declare or pay dividends on the shares of Non-Cumulative Preferred Stock in any amount in any quarterly dividend period, whether or not the earnings of the Association in any quarterly dividend period were sufficient to pay such dividends in whole or in part, and the Association shall have no obligation at any time to pay any such dividend.

(c) PAYMENT OF DIVIDENDS. So long as any share of Non-Cumulative Preferred Stock remains outstanding, no dividend whatsoever shall be paid or declared and no distribution made on any junior stock other than a dividend payable in junior stock, and no shares of junior stock shall be purchased, redeemed or otherwise acquired for consideration by the Association, directly or indirectly (other than as a result of a reclassification of junior stock, or the exchange or conversion of one junior stock for or into another junior stock, or other than through the use of the proceeds of a substantially contemporaneous sale of other junior stock), unless all dividends on all shares of non-cumulative Preferred Stock and non-cumulative Preferred Stock ranking on a parity as to dividends with the shares of Non-Cumulative Preferred Stock for the most recent dividend period ended prior to the date of such payment or declaration shall have been paid in

full and all dividends on all shares of cumulative Preferred Stock ranking on a parity as to dividends with the shares of Non-Cumulative Stock (notwithstanding that dividends on such stock are cumulative) for all past dividend periods shall have been paid in full. Subject to the foregoing, and not otherwise, such dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors may be declared and paid on any junior stock from time to time out of any funds legally available therefor, and the Non-Cumulative Preferred Stock shall not be entitled to participate in any such dividends, whether payable in cash, stock or otherwise. No dividends shall be paid or declared upon any shares of any class or series of stock of the Association ranking on a parity (whether dividends on such stock are cumulative or non-cumulative) with the Non-Cumulative Preferred Stock in the payment of dividends for any period unless at or prior to the time of such payment or declaration all dividends payable on the Non-cumulative Preferred Stock for the most recent dividend period ended prior to the date of such payment or declaration shall have been paid in full. When dividends are not paid in full, as aforesaid, upon the Non-Cumulative Preferred Stock and any other series of Preferred Stock ranking on a parity as to dividends (whether dividends on such stock are cumulative or non-cumulative) with the Non-Cumulative Preferred Stock, all dividends declared upon the Non-Cumulative Preferred Stock and any other series of Preferred Stock ranking on a parity as to dividends with the Non-Cumulative Preferred Stock shall be declared pro rata so that the amount of dividends declared per share on the Non-cumulative Preferred Stock and such other Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Non-Cumulative Preferred Stock (but without any accumulation in respect of any unpaid dividends for prior dividend periods on the shares of Non-Cumulative Stock) and such other Preferred Stock bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Non-Cumulative Preferred Stock which may be in arrears.

3. VOTING. The holders of Non-Cumulative Preferred Stock shall not have any right to vote for the election of directors or for any other purpose.

4. REDEMPTION.

(a) OPTIONAL REDEMPTION. The Association, at the option of the Board of Directors, may redeem the whole or any part of the shares of Non-Cumulative Preferred Stock at the time outstanding, at any time or from time to time after the fifth anniversary of the date of original issuance of the Non-Cumulative Preferred Stock, upon notice given as hereinafter specified, at the redemption price per share equal to $1,000 plus an amount equal to the amount of accrued and unpaid dividends from the immediately preceding dividend payment date (but without any accumulation for unpaid dividends for prior dividend periods on the shares of Non-Cumulative Preferred Stock) to the redemption date.

(b) PROCEDURES. Notice of every redemption of shares of Non-Cumulative Preferred Stock shall be mailed by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses as they shall appear on the books of the Association. Such mailing shall be at least 10 days and not more than 60 days prior to the date fixed for redemption. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the shareholder receives such notice, and failure duly to give such notice by mail, or any defect in such notice, to any holder of shares of Non-Cumulative Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Non-Cumulative Preferred Stock.

In case of redemption of a part only of the shares of Non-Cumulative Preferred Stock at the time outstanding the redemption may be either pro rata or by lot or by such other means as the Board of Directors of the Association in its discretion shall determine. The Board of Directors shall have full power and authority, subject to the provisions herein contained, to prescribe the terms and conditions upon which shares of the Non-Cumulative Preferred Stock shall be redeemed from time to time.

If notice of redemption shall have been duly given, and, if on or before the redemption date specified therein, all funds necessary for such redemption shall have been set aside by the Association, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, all shares so called for redemption shall no longer be deemed outstanding on and after such redemption date, and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to, receive the amount payable on redemption thereof, without interest.

If such notice of redemption shall have been duly given or if the Association shall have given to the bank or trust company hereinafter referred to irrevocable authorization promptly to give such notice, and, if on or before the redemption date specified therein, the funds necessary for such redemption shall have been deposited by the Association with such bank or trust company in trust for the pro rata benefit of the holders of the shares called for redemption, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, from and after the time of such deposit, all shares so called for redemption shall no longer be deemed to be outstanding and all rights with respect to such shares shall forthwith cease and terminate, except only the right of the holders thereof to receive from such bank or trust company at any time after the time of such deposit the funds so deposited, without interest. The aforesaid bank or trust company shall be organized and in good standing under the laws of the United States of America or any state thereof, shall have capital, surplus and undivided profits aggregating at least $50,000,000 according to its last published statement of condition, and shall be identified in the notice of redemption. Any interest accrued on such funds shall be paid to the Association from time to time. In case fewer than all the shares of Non-Cumulative Preferred Stock represented by a stock certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

Any funds so set aside or deposited, as the case may be, and unclaimed at the end of the relevant escheat period under applicable state law from such redemption date shall, to the extent permitted by law, be released or repaid to the Association, after which repayment the holders of the shares so called for redemption shall look only to the Association for payment thereof.

5. LIQUIDATION.

(a) LIQUIDATION PREFERENCE. In the event of any voluntary liquidation, dissolution or winding up of the affairs of the Association, the holders of Non-cumulative Preferred Stock shall be entitled, before any distribution or payment is made to the holders of any junior stock, to be paid in full an amount per share equal to an amount equal to $1,000 plus an amount equal to the amount of accrued and unpaid dividends per share from the immediately preceding dividend payment date (but without any accumulation for

unpaid dividends for prior dividend periods on the shares of Non-cumulative Preferred Stock) per share to such distribution or payment date (the "liquidation amount").

In the event of any involuntary liquidation, dissolution or winding up of the affairs of the Association, then, before any distribution or payment shall be made to the holders of any junior stock, the holders of Non-Cumulative Preferred Stock shall be entitled to be paid in full an amount per share equal to the liquidation amount.

If such payment shall have been made in full to all holders of shares of Non-Cumulative Preferred Stock, the remaining assets of the Association shall be distributed among the holders of junior stock, according to their respective rights and preferences and in each case according to their respective numbers of shares.

(b) INSUFFICIENT ASSETS. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the available assets of the Association are insufficient to pay such liquidation amount on all outstanding shares of Non-cumulative Preferred Stock, then the holders of Non-Cumulative Preferred Stock shall share ratably in any distribution of assets in proportion to the full amounts to which they would otherwise be respectively entitled.

(c) INTERPRETATION. For the purposes of this paragraph 5, the consolidation or merger of the Association with any other corporation or association shall not be deemed to constitute a liquidation, dissolution or winding up of the Association.

6. PREEMPTIVE RIGHTS. The Non-Cumulative Preferred Stock is not entitled to any preemptive, subscription, conversion or exchange rights in respect of any securities of the Association.

7. DEFINITIONS. As used herein with respect to the Non-Cumulative Preferred Stock, the following terms shall have the following meanings:

(a) The term "junior stock" shall mean the Common Stock and any other class or series of shares of the Association hereafter authorized over which the Non-Cumulative Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Association.

(b) The term "accrued dividends", with respect to any share of any class or series, shall mean an amount computed at the annual dividend rate for the class or series of which the particular share is a part, from, if such share is cumulative, the date on which dividends on such share became cumulative to and including the date to which such dividends are to be accrued, less the aggregate amount of all dividends theretofore paid thereon and, if such share is noncumulative, the relevant date designated to and including the date to which such dividends are accrued, less the aggregate amount of all dividends theretofore paid with respect to such period.

(c) The term "Preferred Stock" shall mean all outstanding shares of all series of preferred stock of the Association as defined in this Article Fifth of the Articles of Association, as amended, of the Association.

8. RESTRICTION ON TRANSFER. No shares of Non-Cumulative Preferred Stock, or any interest therein, may be sold, pledged, transferred or otherwise disposed of without the prior written consent of the Association. The foregoing restriction shall be stated on any certificate for any shares of Non-Cumulative Preferred Stock.

9. ADDITIONAL RIGHTS. The shares of Non-Cumulative Preferred Stock shall not have any relative, participating, optional or other special rights and powers other than as set forth herein.

SIXTH. The Board of Directors shall appoint one of its members President of this Association, who shall be Chairman of the Board, unless the Board appoints another director to be the Chairman. The Board of Directors shall have the power to appoint one or more Vice Presidents; and to appoint a cashier or such other officers and employees as may be required to transact the business of this Association.

The Board of Directors shall have the power to define the duties of the officers and employees of the Association, to fix the salaries to be paid to them; to dismiss them, to require bonds from them and to fix the penalty thereof; to regulate the manner in which any increase of the capital of the Association shall be made; to manage and administer the business and affairs of the Association; to make all By-Laws that it may be lawful for them to make; and generally to do and perform all acts that it may be legal for a Board of Directors to do and perform.

SEVENTH. The Board of Directors shall have the power to change the location of the main office to any other place within the limits of Charlotte, North Carolina, without the approval of the shareholders but subject to the approval of the Comptroller of the Currency; and shall have the power to establish or change the location of any branch or branches of the Association to any other location, without the approval of the shareholders but subject to the approval of the Comptroller of the Currency.

EIGHTH. The corporate existence of this Association shall continue until terminated in accordance with the laws of the United States.

NINTH. The Board of Directors of this Association, or any three or more shareholders owning, in the aggregate, not less than 10 percent of the stock of this Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least ten days prior to the date of such meeting to each shareholder of record at his address as shown upon the books of this Association.

TENTH. Each director and executive officer of this Association shall be indemnified by the association against liability in any proceeding (including without limitation a proceeding brought by or on behalf of the Association itself) arising out of his status as such or his activities in either of the foregoing capacities, except for any liability incurred on account of activities which were at the time taken known or believed by such person to be clearly in conflict with the best interests of the Association. Liabilities incurred by a director or executive officer of the Association in defending a proceeding shall be paid by the Association in advance of the final disposition of such proceeding upon receipt of an undertaking by the director or executive officer to repay such amount if it shall be determined, as provided in the last paragraph of this Article Tenth, that he is not entitled to be indemnified by the Association against such liabilities.

The indemnity against liability in the preceding paragraph of this Article Tenth, including liabilities incurred in defending a proceeding, shall be automatic and self-operative.

Any director, officer or employee of this Association who serves at the request of the Association as a director, officer, employee or agent of a charitable, not-for-profit, religious, educational or hospital corporation, partnership, joint venture, trust or other enterprise, or a trade association, or as a trustee or administrator under an employee benefit plan, or who serves at

the request of the Association as a director, officer or employee of a business corporation in connection with the administration of an estate or trust by the Association, shall have the right to be indemnified by the Association, subject to the provisions set forth in the following paragraph of this Article Tenth, against liabilities in any manner arising out of or attributable to such status or activities in any such capacity, except for any liability incurred on account of activities which were at the time taken known or believed by such person to be clearly in conflict with the best interests of the Association, or of the corporation, partnership, joint venture, trust, enterprise, Association or plan being served by such person.

In the case of all persons except the directors and executive officers of the Association, the determination of whether a person is entitled to indemnification under the preceding paragraph of this Article Tenth shall be made by and in the sole discretion of the Chief Executive Officer of the Association. In the case of the directors and executive officers of the Association, the indemnity against liability in the preceding paragraph of this Article Tenth shall be automatic and self-operative.

For purposes of this Article Tenth of these Articles of Association only, the following terms shall have the meanings indicated:

(a) "Association" means Wachovia Bank, National Association and its direct and indirect wholly-owned subsidiaries.

(b) "Director" means an individual who is or was a director of the Association.

(c) "Executive officer" means an officer of the Association who by resolution of the Board of Directors of the Association has been determined to be an executive officer of the Association for purposes of Regulation O of the Federal Reserve Board.

(d) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses, including counsel fees and expenses, incurred with respect to a proceeding.

(e) "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.

(f) "Proceeding" means any threatened, pending, or completed claim, action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.

The Association shall have no obligation to indemnify any person for an amount paid in settlement of a proceeding unless the Association consents in writing to such settlement.

The right to indemnification herein provided for shall apply to persons who are directors, officers, or employees of banks or other entities that are hereafter merged or otherwise combined with the Association only after the effective date of such merger or other combination and only as to their status and activities after such date.

The right to indemnification herein provided for shall inure to the benefit of the heirs and legal representatives of any person entitled to such right.

No revocation of, change in, or adoption of any resolution or provision in the Articles of Association or By-laws of the Association inconsistent with, this Article Tenth shall adversely affect the rights of any director, officer, or employee of the Association with respect to (i) any

proceeding commenced or threatened prior to such revocation, change, or adoption, or (ii) any proceeding arising out of any act or omission occurring prior to such revocation, change, or adoption, in either case, without the written consent of such director, officer, or employee.

The rights hereunder shall be in addition to and not exclusive of any other rights to which a director, officer, or employee of the Association may be entitled under any statute, agreement, insurance policy, or otherwise.

The Association shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, or employee of the Association, or is or was serving at the request of the Association as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, trade association, employee benefit plan, or other enterprise, against any liability asserted against such director, officer, or employee in any such capacity, or arising out of their status as such, whether or not the Association would have the power to indemnify such director, officer, or employee against such liability, excluding insurance coverage for a formal order assessing civil money penalties against an Association director or employee.

Notwithstanding anything to the contrary provided herein, no person shall have a right to indemnification with respect to any liability (i) incurred in an administrative proceeding or action instituted by an appropriate bank regulatory agency which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association, (ii) to the extent such person is entitled to receive payment therefor under any insurance policy or from any corporation, partnership, joint venture, trust, trade association, employee benefit plan, or other enterprise other than the Association, or (iii) to the extent that a court of competent jurisdiction determines that such indemnification is void or prohibited under state or federal law.

ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of holders of a greater amount of stock is required by law, and in that case, by the vote of the holders of such greater amount.

TWELFTH. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders.

EXHIBIT 2 & 3

Comptroller of the Currency
Administrator of National Banks

Large Bank Licensing, MS 7-13
250 E. Street, S.W.
Washington, DC 20219

March 27, 2002

OCC Control Nr. 2002-ML-02-0001

Ms. Courtney D. Allison
Assistant General Counsel
Legal Division
Wachovia Corporation
301 South College Street (NC0630)
Charlotte, North Carolina 28288-0630

Dear Ms. Allison:

This letter is the official certification of the Comptroller of the Currency (OCC) of the merger of Wachovia Bank, National Association, Winston-Salem, North Carolina, Charter Nr. 1559, into and under the charter of First National Bank, Charlotte, North Carolina, Charter Nr. 1 with the resulting title of Wachovia Bank, National Association and headquarters at Charlotte, North Carolina, effective April 1, 2002.

This letter is also the official authorization given to Wachovia Bank, N.A., Charter Nr. 1 (formerly First Union National Bank), to operate the former head office of Wachovia Bank, N.A. Charter Nr. 1559 as a branch of the following site:

Title            :      Downtown Winston-Salem Branch
Certificate Nr.  :      122534A
Address:                100 North Main Street
                        Winston-Salem, North Carolina 27150

Branch authorizations previously granted to Wachovia Bank, N.A., Charter Nr. 1559, automatically convey to Wachovia Bank, N.A., Charter Nr. 1 (formerly First Union National Bank), the resulting bank, and will not be reissued. Please furnish a copy of this certificate to personnel responsible for branch administration.

This letter also serves to certify that First Union Bank, Charlotte, North Carolina, Charter Nr. 1, now known as Wachovia Bank, National Association, remains authorized to exercise the fiduciary powers previously granted to it by the OCC.

Certification of Merger
First Union National Bank/Wachovia Bank, N.A.

Page 2 of 2

The OCC also authorizes the resulting bank, should the merger occur between Call Report dates, to recalcalulate its legal lending limit. The new lending limit should be calculated by using data from the last Call Report of the individual banks filed prior to consummating the consolidation, as adjusted for the combination. The resulting bank will then file a new Call Report and begin calculating its legal lending limit according to 12 C.F.R. 32.4(a) at the end of the quarter following consummation of the consolidation.

In the event of questions, I may be contacted at (202) 874-5060 or by e-mail at: largebanks@occ.treas.gov.

Sincerely,

/s/ Richard T. Erb
Richard T. Erb
Licensing Manager

2002-MI-02-0001

EXHIBIT 4
BY-LAWS OF

WACHOVIA BANK, NATIONAL ASSOCIATION

ARTICLE I

MEETINGS OF SHAREHOLDERS

SECTION 1.1 ANNUAL MEETING. The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the third Tuesday of April in each year, commencing with the year 1998, except that the Board of Directors may, from time to time and upon passage of a resolution specifically setting forth its reasons, set such other date for such meeting during the month of April as the Board of Directors may deem necessary or appropriate; provided, however, that if an annual meeting would otherwise fall on a legal holiday, then such annual meeting shall be held on the second business day following such legal holiday. The holders of a majority of the outstanding shares entitled to vote which are represented at any meeting of the shareholders may choose persons to act as Chairman and as Secretary of the meeting.

SECTION 1.2 SPECIAL MEETINGS. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the Board of Directors or by any three or more shareholders owning, in the aggregate, not less than ten percent of the stock of the Association. Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than ten days prior to the date fixed for such meeting, to each shareholder at his address appearing on the books of the Association, a notice stating the purpose of the meeting.

SECTION 1.3 NOMINATIONS FOR DIRECTORS. Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the bank entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the bank, shall be made in writing and shall be delivered or mailed to the President of the Bank and to the Comptroller of the Currency, Washington, D. C., not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors, provided however, that if less than 21 days' notice of such meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Bank and to the Comptroller of the Currency not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the bank that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the bank owned by the notifying shareholder. Nominations not made in accordance herewith may, in his discretion, be disregarded by the chairman of the meeting, and upon his instructions, the vote tellers may disregard all votes cast for each such nominee.

SECTION 1.4 JUDGES OF ELECTION. The Board may at any time appoint from among the shareholders three or more persons to serve as Judges of Election at any meeting of shareholders; to act as judges and tellers with respect to all votes by ballot at such meeting and to file with the Secretary of the meeting a Certificate under their hands, certifying the result thereof.

SECTION 1.5 PROXIES. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this Association shall act as proxy. Proxies shall be valid only for one meeting, to be specified therein, and any adjournments of such meeting. Proxies shall be dated and shall be filed with the records of the meeting.

SECTION 1.6 QUORUM. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law; but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association.

ARTICLE II

DIRECTORS

SECTION 2.1 BOARD OF DIRECTORS. The Board of Directors (hereinafter referred to as the "Board"), shall have power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by said Board.

SECTION 2.2 NUMBER. The Board shall consist of not less than five nor more than twenty-five directors, the exact number within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full Board or by resolution of the shareholders at any meeting thereof; provided, however, that a majority of the full Board of Directors may not increase the number of directors to a number which, (1) exceeds by more than two the number of directors last elected by shareholders where such number was fifteen or less, and (2) to a number which exceeds by more than four the number of directors last elected by shareholders where such number was sixteen or more, but in no event shall the number of directors exceed twenty-five.

SECTION 2.3 ORGANIZATION MEETING. The Secretary of the meeting upon receiving the certificate of the judges, of the result of any election, shall notify the directors-elect of their election and of the time at which they are required to meet at the Main Office of the Association for the purpose of organizing the new Board and electing and appointing officers of the Association for the succeeding year. Such meeting shall be held as soon thereafter as practicable. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting from time to time, until a quorum is obtained.

SECTION 2.4 REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such place and time as may be designated by resolution of the Board of Directors. Upon adoption of such resolution, no further notice of such meeting dates or the places or times thereof shall be required. Upon the failure of the Board of Directors to adopt such a resolution, regular meetings of the Board of Directors shall be held, without notice, on the third Tuesday in February, April, June, August, October and December, commencing with the year 1997, at the main office or at such other place and time as may be designated by the Board of Directors. When any regular meeting of the Board would otherwise fall on a holiday, the meeting shall be held on the next business day unless the Board shall designate some other day.

SECTION 2.5 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the President of the Association, or at the request of three
(3) or more directors. Each

member of the Board of Directors shall be given notice stating the time and place, by telegram, letter, or in person, of each such special meeting.

SECTION 2.6 QUORUM. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law; but a less number may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice.

SECTION 2.7 VACANCIES. When any vacancy occurs among the directors, the remaining members of the Board, in accordance with the laws of the United States, may appoint a director to fill such vacancy at any regular meeting of the Board, or at a special meeting called for that purpose.

SECTION 2.8 ADVISORY BOARDS. The Board of Directors may appoint Advisory Boards for each of the states in which the Association conducts operations. Each such Advisory Board shall consist of as many persons as the Board of Directors may determine. The duties of each Advisory Board shall be to consult and advise with the Board of Directors and senior officers of the Association in such state with regard to the best interests of the Association and to perform such other duties as the Board of Directors may lawfully delegate.

The senior officer in such state, or such officers as directed by such senior officer, may appoint advisory boards for geographic regions within such state and may consult with the State Advisory Boards prior to such appointments.

ARTICLE III

COMMITTEES OF THE BOARD

SECTION 3.1 The Board of Directors, by resolution adopted by a majority of the number of directors fixed by these By-Laws, may designate two or more directors to constitute an Executive Committee and other committees, each of which, to the extent authorized by law and provided in such resolution, shall have and may exercise all of the authority of the Board of Directors and the management of the Association. The designation of any committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility or liability imposed upon it or any member of the Board of Directors by law. The Board of Directors reserves to itself alone the power to act on (1) dissolution, merger or consolidation, or disposition of substantially all corporate property, (2) designation of committees or filling vacancies on the Board of Directors or on a committee of the Board (except as hereinafter provided), (3) adoption, amendment or repeal of By-laws, (4) amendment or repeal of any resolution of the Board which by its terms is not so amendable or repealable, and (5) declaration of dividends, issuance of stock, or recommendations to stockholders of any action requiring stockholder approval.

The Board of Directors or the Chairman of the Board of Directors of the Association may change the membership of any committee at any time, fill vacancies therein, discharge any committee or member thereof either with or without cause at any time, and change at any time the authority and responsibility of any such committee.

A majority of the members of any committee of the Board of Directors may fix such committee's rules of procedure. All action by any committee shall be reported to the Board of Directors at a meeting succeeding such action, except such actions as the Board may not require to be reported to it in the resolution creating any such committee. Any action by any committee shall be subject to revision, alteration, and approval by the Board of Directors, except to the extent otherwise provided in the resolution creating such committee; provided, however, that no rights or acts of third parties shall be affected by any such revision or alteration.

ARTICLE IV

OFFICERS AND EMPLOYEES

SECTION 4.1 OFFICERS. The officers of the Association may be a Chairman of the Board, a Vice Chairman of the Board, one or more Chairmen or Vice Chairmen (who shall not be required to be directors of the Association), a President, one or more Vice Presidents, a Secretary, a Cashier or Treasurer, and such other officers, including officers holding similar or equivalent titles to the above in regions, divisions or functional units of the Association, as may be appointed by the Board of Directors. The Chairman of the Board and the President shall be members of the Board of Directors. Any two or more offices may be held by one person, but no officer shall sign or execute any document in more than one capacity.

SECTION 4.2 ELECTION, TERM OF OFFICE, AND QUALIFICATION. Each officer shall be chosen by the Board of Directors and shall hold office until the annual meeting of the Board of Directors held next after his election or until his successor shall have been duly chosen and qualified, or until his death, or until he shall resign, or shall have been disqualified, or shall have been removed from office.

SECTION 4.2(a) OFFICERS ACTING AS ASSISTANT SECRETARY. Notwithstanding
Section 1 of these By-laws, any Senior Vice President, Vice President, or Assistant Vice President shall have, by virtue of his office, and by authority of the By-laws, the authority from time to time to act as an Assistant Secretary of the Bank, and to such extent, said officers are appointed to the office of Assistant Secretary.

SECTION 4.3 CHIEF EXECUTIVE OFFICER. The Board of Directors shall designate one of its members to be the President of this Association, and the officer so designated shall be an ex officio member of all committees of the Association except the Examining Committee, and its Chief Executive Officer unless some other officer is so designated by the Board of Directors.

SECTION 4.4 DUTIES OF OFFICERS. The duties of all officers shall be prescribed by the Board of Directors. Nevertheless, the Board of Directors may delegate to the Chief Executive Officer the authority to prescribe the duties of other officers of the corporation not inconsistent with law, the charter, and these By-laws, and to appoint other employees, prescribe their duties, and to dismiss them. Notwithstanding such delegation of authority, any officer or employee also may be dismissed at any time by the Board of Directors.

SECTION 4.5 OTHER EMPLOYEES. The Board of Directors may appoint from time to time such tellers, vault custodians, bookkeepers, and other clerks, agents, and employees as it may deem advisable for the prompt and orderly transaction of the business of the Association, define their duties, fix the salary to be paid them, and dismiss them. Subject to the authority of the Board of Directors, the Chief Executive Officer or any other officer of the Association authorized by him, may appoint and dismiss all such tellers, vault custodians, bookkeepers and other clerks, agents, and employees, prescribe their duties and the conditions of their employment, and from time to time fix their compensation.

SECTION 4.6 REMOVAL AND RESIGNATION. Any officer or employee of the Association may be removed either with or without cause by the Board of Directors. Any employee other than an officer elected by the Board of Directors may be dismissed in accordance with the provisions of the preceding Section 4.5. Any officer may resign at any time by giving written notice to the Board of Directors or to the Chief Executive Officer of the Association. Any such resignation shall

become effective upon its being accepted by the Board of Directors, or the Chief Executive Officer.

ARTICLE V

FIDUCIARY POWERS

SECTION 5.1 CAPITAL MANAGEMENT GROUP. There shall be an area of this Association known as the Capital Management Group which shall be responsible for the exercise of the fiduciary powers of this Association. The Capital Management Group shall consist of four service areas: Fiduciary Services, Retail Services, Investments and Marketing. The Fiduciary Services unit shall consist of personal trust, employee benefits, corporate trust and operations. The General Office for the Fiduciary Services unit shall be located in Charlotte, N.C., with additional Trust Offices in such locations as the Association shall determine from time to time.

SECTION 5.2 TRUST OFFICERS. There shall be a General Trust Officer of this Association whose duties shall be to manage, supervise and direct all the activities of the Capital Management Group. Further, there shall be one or more Senior Trust Officers designated to assist the General Trust Officer in the performance of his duties. They shall do or cause to be done all things necessary or proper in carrying out the business of the Capital Management Group in accordance with provisions of applicable law and regulation.

SECTION 5.3 GENERAL TRUST COMMITTEE. There shall be a General Trust Committee composed of not less than four (4) members of the Board of Directors or officers of this Association who shall be appointed annually, or from time to time, by the Board of Directors of this Association. Each member shall serve until his successor is appointed. The Board of Directors or the Chairman of the Board may change the membership of the General Trust Committee at any time, fill any vacancies therein, or discharge any member thereof with or without cause at any time. The General Trust Committee shall counsel and advise on all matters relating to the business or affairs of the Capital Management Group and shall adopt overall policies for the conduct of the business of the Capital Management Group, including, but not limited to: general administration, investment policies, new business development, and review for approval of major assignments of functional responsibilities. The General Trust Committee shall appoint the members of the following subcommittees: the Investment Policy Committee, Personal Trust Administration Committee, Account Review Committee, and Corporate and Institutional Accounts Committee. The General Trust Committee shall meet at least quarterly or as called for by its Chairman or any three (3) members of the Committee. A quorum shall consist of three (3) members. In carrying out its responsibilities, the General Trust Committee shall review the fiduciary activities of the Capital Management Group and may assign the administration and performance of any fiduciary powers or duties to any officers or employees of the Capital Management Group or to the Investment Policy Committee, Personal Trust Administration Committee, Account Review Committee, or Corporate and Institutional Accounts Committee, or other committees it may designate. One of the methods to be used in the review process will be the scrutiny of the Reports of Examination by the Office of the Comptroller of the Currency and the reports of the Audit Division of Wachovia Corporation, as they relate to the activities of the Capital Management Group. The Chairman of the General Trust Committee shall be appointed by the Chairman of the Board of Directors. The Chairman of the General Trust Committee shall cause to be recorded in appropriate minutes all actions taken by the Committee. The minutes shall be signed by its Secretary, approved by its Chairman and submitted to the Board of Directors at its next regularly scheduled meeting following a meeting of the General Trust Committee. The Board of Directors retains responsibility for the proper exercise of this Association's fiduciary powers.

SECTION 5.4 INVESTMENT POLICY COMMITTEE. There shall be an Investment Policy Committee composed of not less than seven (7) officers and/or employees of this Association, who shall be appointed annually or from time to time by the General Trust Committee. Each member shall serve until his or her successor is appointed. Meetings shall be called by the Chairman or by any two (2) members of the Committee. A quorum shall consist of five (5) members. The Investment Policy Committee shall exercise such fiduciary powers and perform such duties as may be assigned to it by the General Trust Committee. All actions taken by the Investment Policy Committee shall be recorded in appropriate minutes, signed by the Secretary thereof, approved by its Chairman, and submitted to the General Trust Committee at its next ensuing regular meeting for its review and approval.

SECTION 5.5 PERSONAL TRUST ADMINISTRATION COMMITTEE. There shall be a Personal Trust Administration Committee composed of not less than five (5) officers and/or employees of this Association, who shall be appointed annually or from time to time by the General Trust Committee. Each member shall serve until his or her successor is appointed. Meetings shall be called by the Chairman or by any three (3) members of the Committee. A quorum shall consist of three (3) members. The Personal Trust Administration Committee shall exercise such fiduciary powers and perform such duties as may be assigned to it by the General Trust Committee. All actions taken by the Personal Trust Administration Committee shall be recorded in appropriate minutes, signed by the Secretary thereof, approved by its Chairman, and submitted to the General Trust Committee at its next ensuing regular meeting for its review and approval.

SECTION 5.6 ACCOUNT REVIEW COMMITTEE. There shall be an Account Review Committee composed of not less than four (4) officers and/or employees of this Association, who shall be appointed annually or from time to time by the General Trust Committee. Each member shall serve until his or her successor is appointed. Meetings shall be called by the Chairman or by any two (2) members of the Committee. A quorum shall consist of three (3) members. The Account Review Committee shall exercise such fiduciary powers and perform such duties as may be assigned to it by the General Trust Committee. All actions taken by the Account Review Committee shall be recorded in appropriate minutes, signed by the Secretary thereof, approved by its Chairman, and submitted to the General Trust Committee at its next ensuing regular meeting for its review and approval.

SECTION 5.7 CORPORATE AND INSTITUTIONAL ACCOUNTS COMMITTEE. There shall be a Corporate and Institutional Accounts Committee composed of not less than five
(5) officers and/or employees of this Association, who shall be appointed annually or from time to time by the General Trust Committee. Each member shall serve until his or her successor is appointed. Meetings shall be called by the Chairman or by any two (2) members of the Committee. A quorum shall consist of three (3) members. The Corporate and Institutional Accounts Committee shall exercise such fiduciary powers and perform such duties as may be assigned to it by the General Trust Committee. All actions taken by the Corporate and Institutional Accounts Committee shall be recorded in appropriate minutes, signed by the Secretary thereof, approved by its Chairman, and submitted to the General Trust Committee at its next ensuing regular meeting for its review and approval.

ARTICLE VI

STOCK AND STOCK CERTIFICATES

SECTION 6.1 TRANSFERS. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and liabilities of the prior holder of such shares.

SECTION 6.2 STOCK CERTIFICATES. Certificates of stock shall bear the signature of the Chairman, the Vice Chairman, the President, or a Vice President (which may be engraved, printed, or impressed), and shall be signed manually or by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant Cashier, or any other officer appointed by the Board of Directors for that purpose, to be known as an Authorized Officer, and the seal of the Association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed.

ARTICLE VII

CORPORATE SEAL

SECTION 7.1 The President, the Cashier, the Secretary, or any Assistant Cashier, or Assistant Secretary, or other officer thereunto designated by the Board of Directors shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.1 FISCAL YEAR. The fiscal year of the Association shall be the calendar year.

SECTION 8.2 EXECUTION OF INSTRUMENTS. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, notices, applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted in behalf of the Association by the Chairman of the Board, the Vice Chairman of the Board, any Chairman or Vice Chairman, the President, any Senior Executive Vice President, Executive Vice President, Vice President or Assistant Vice President, the Secretary, the Cashier or Treasurer, or any officer holding similar or equivalent titles to the above in any regions, divisions or functional units of the Association, or, if in connection with the exercise of fiduciary powers of the Association, by any of said officers or by any Trust Officer or Assistant Trust Officer (or equivalent titles), and if so required by applicable law or regulation, attested or countersigned by the Secretary or Assistant Secretary; provided, however, that where required, any such instrument shall be attested by one of said officers other than the officer executing such instrument. Any such instruments may also be executed, acknowledged, verified, delivered or accepted in behalf of the Association in such other manner and by such other officers as the Board of Directors may from time to time direct. The provisions of this Section 8.2 are supplementary to any other provision of these By-laws.

SECTION 8.3 RECORDS. The Articles of Association, the By-laws, and the proceedings of all meetings of the shareholders, the Board of Directors, standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes of each meeting

shall be signed by the Secretary, Cashier, or other officer appointed to act as Secretary of the meeting.

ARTICLE IX

BY-LAWS

SECTION 9.1 INSPECTION. A copy of the By-laws, with all amendments thereto, shall at all times be kept in a convenient place at the Head Office of the Association, and shall be open for inspection to all shareholders, during banking hours.

SECTION 9.2 AMENDMENTS. The By-laws may be amended, altered or repealed, at any regular or special meeting of the Board of Directors, by a vote of a majority of the whole number of Directors.

EXHIBIT A

Wachovia Bank, National Association
Article X
Emergency By-laws

In the event of an emergency declared by the President of the United States or the person performing his functions, the officers and employees of this Association will continue to conduct the affairs of the Association under such guidance from the directors or the Executive Committee as may be available except as to matters which by statute require specific approval of the Board of Directors and subject to conformance with any applicable governmental directives during the emergency.

OFFICERS PRO TEMPORE AND DISASTER

Section 1. The surviving members of the Board of Directors or the Executive Committee shall have the power, in the absence or disability of any officer, or upon the refusal of any officer to act, to delegate and prescribe such officer's powers and duties to any other officer, or to any director, for the time being.

Section 2. In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of this Association by its directors and officers as contemplated by these By-laws, any two or more available members of the then incumbent Executive Committee shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Association in accordance with the provisions of Article II of these By-laws; and in addition, such Committee shall be empowered to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof. In the event of the unavail- ability, at such time, of a minimum of two members of the then incumbent Executive Committee, any three available directors shall constitute the Executive Committee for the full conduct and management of the affairs and business of the Association in accordance with the foregoing provisions of this section. This By-law shall be subject to implementation by resolutions of the Board of Directors passed from time to time for that purpose, and any provisions of these By-laws (other than this section) and any resolutions which are contrary to the provisions of this section or to the provisions of any such implementary resolutions shall be suspended until it shall be determined by an interim Executive Committee acting under this section that it shall be to the advantage of this Association to resume the conduct and management of its affairs and business under all of the other provisions of these By-laws.

Officer Succession

BE IT RESOLVED, that if consequent upon war or warlike damage or disaster, the Chief Executive Officer of this Association cannot be located by the then acting Head Officer or is unable to assume or to continue normal executive duties, then the authority and duties of the Chief Executive Officer shall, without further action of the Board of Directors, be automatically assumed by one of the following persons in the order designated:

Chairman
President

Division Head/Area Administrator - Within this officer class, officers shall take seniority on the basis of length of service in such office or, in the event of equality, length of service as an officer of the Association.

Any one of the above persons who in accordance with this resolution assumes the authority and duties of the Chief Executive Officer shall continue to serve until he resigns or until five-sixths of the other officers who are attached to the then acting Head Office decide in writing he is unable to perform said duties or until the elected Chief Executive Officer of this Association, or a person higher on the above list, shall become available to perform the duties of Chief Executive Officer of the Association.

BE IT FURTHER RESOLVED, that anyone dealing with this Association may accept a certification by any three officers that a specified individual is acting as Chief Executive Officer in accordance with this resolution; and that anyone accepting such certification may continue to consider it in force until notified in writing of a change, said notice of change to carry the signatures of three officers of the Association.

Alternate Locations

The offices of the Association at which its business shall be conducted shall be the main office thereof in each city which is designated as a City Office (and branches, if any), and any other legally authorized location which may be leased or acquired by this Association to carry on its business. During an emergency resulting in any authorized place of business of this Association being unable to function, the business ordinarily conducted at such location shall be relocated elsewhere in suitable quarters, in addition to or in lieu of the locations heretofore mentioned, as may be designated by the Board of Directors or by the Executive Committee or by such persons as are then, in accordance with resolutions adopted from time to time by the Board of Directors dealing with the exercise of authority in the time of such emergency, conducting the affairs of this Association. Any temporarily relocated place of business of this Association shall be returned to its legally authorized location as soon as practicable and such temporary place of business shall then be discontinued.

Acting Head Offices

BE IT RESOLVED, that in case of and provided because of war or warlike damage or disaster, the General Office of this Association, located in Charlotte, North Carolina, is unable temporarily to continue its functions, the Raleigh office, located in Raleigh, North Carolina, shall automatically and without further action of this Board of Directors, become the "Acting Head Office of this Association";

BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage or disaster, both the General Office of this Association and the said Raleigh Office of this Association are unable to carry on their functions, then and in such case, the Asheville Office of this Association, located in Asheville, North Carolina, shall, without further action of this Board of Directors, become the "Acting Head Office of this Association"; and if neither the Raleigh Office nor the Asheville Office can carry on their functions, then the Greensboro Office of this Association, located in Greensboro, North Carolina, shall, without further action of this Board of Directors, become the "Acting Head Office of this Association"; and if neither the Raleigh Office, the Asheville Office, nor the Greensboro Office can carry on their functions, then the Lumberton Office of this Association, located in Lumberton, North Carolina, shall, without further action of this Board of Directors, become the "Acting Head Office of this Association". The Head Office shall resume its functions at its legally authorized location as soon as practicable.

EXHIBIT 6

CONSENT OF THE TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, and in connection with the proposed issue of Exelon Generation Company, LLC 6.95% Senior Notes due 2011 (Exchange Notes). Wachovia Bank, National Association, hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor.

WACHOVIA BANK, NATIONAL ASSOCIATION

                                              By: /s/ James M. Matthews, Jr.
                                                 ---------------------------
                                                      James M. Matthews, Jr.
                                                    Assistant Vice President




Philadelphia, Pennsylvania

April 3, 2002

EXHIBIT T-7

REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of the First Union National Bank, at the close of business on December 31, 2001, published in response to call made by Comptroller of the Currency, under title 12, United States Code,
Section 161. Charter Number 1 Comptroller of the Currency.

STATEMENT OF RESOURCES AND LIABILITIES

                                     ASSETS
                               THOUSAND OF DOLLARS
Cash and balance due from depository institutions:
  Noninterest-bearing balances and currency and coin.........                10,660,000
  Interest-bearing balances..................................                 6,638,000
Securities...................................................                 /////////
  Hold-to-maturity securities................................                         0
  Available-for-sale securities..............................                47,596,000
Federal funds sold and securities purchased under agreements                 //////////
      to resell..............................................                 5,188,000
Loans and lease financing receivables:
      Loan and leases held for sale..........................                 7,337,000
      Loan and leases, net of unearned income................  116,417,000
      LESS: Allowance for loan and lease losses..............    2,222,000
      LESS: Allocated transfer risk reserve..................            0
      Loans and leases, net of unearned income, allowance,
      and reserve............................................               114,195,000
Trading Assets...............................................                19,071,000
Premises and fixed assets (including capitalized leases).....                 2,628,000
Other real estate owned......................................                    92,000
Investment in unconsolidated subsidiaries and associated                     //////////
      companies..............................................                   503,000
Customer's liability to this bank on
      acceptances outstanding................................                   732,000
Intangible assets............................................

      Goodwill...............................................                 2,253,000
      Other intangible Assets................................                   336,000
Other assets.................................................                15,556,000

                 TOTAL ASSETS..................................             232,785,000

                                        LIABILITIES
Deposits:
      In domestic offices.....................................              135,276,000
        Noninterest-bearing...................................  24,546,000
        Interest-bearing...................................... 110,730,000
      In foreign offices, Edge and Agreement subsidiaries,
      and IBFs................................................               12,473,000
        Noninterest-bearing...................................      32,000
        Interest-bearing......................................  12,441,000
Federal funds purchased and securities sold under agreements
      to repurchase...........................................               19,728,000
Trading liabilities...........................................               15,559,000
Other borrowed money:.........................................               16,702,000
Bank's liability on acceptances executed and outstanding.....                   749,000
Subordinated notes and debentures............................                 5,993,000
Other liabilities............................................                 9,195,000
TOTAL LIABILITIES............................................               215,675,000
Minority Interest in consolidated subsidiaries...............                   977,000

                                      EQUITY CAPITAL
Perpetual preferred stock and related surplus.................                  161,000
Common Stock..................................................                  455,000
Surplus.......................................................               13,302,000
Retained Earnings........................                                     1,847,000
Accumulated other comprehensive income........................                  368,000
Other Equity Capital components...........                                            0
Total equity capital..........................................               16,133,000
Total liabilities and equity capital....                                    232,785,000

EXHIBIT T-7

REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of the Wachovia Bank, National Asociation, at the close of business on December 31, 2001, published in response to call made by Comptroller of the Currency, under title 12, United States Code,
Section 161. Charter Number 1559 Comptroller of the Currency.

STATEMENT OF RESOURCES AND LIABILITIES
                                          ASSETS
                               THOUSAND OF DOLLARS
Cash and balance due from depository institutions:
  Noninterest-bearing balances and currency and coin..........               3,765,118
  Interest-bearing balances...................................                 650,642
Securities....................................................               /////////
  Hold-to-maturity securities.................................                   9,414
  Available-for-sale securities...............................               7,410,048
Federal funds sold and securities purchased under agreements                //////////
      to resell                                                                167,423
Loans and lease financing receivables:
      Loan and leases held for sale                                            626,273
      Loan and leases, net of unearned income................. 46,370,568
      LESS: Allowance for loan and lease losses...............    756,033
      LESS: Allocated transfer risk reserve...................          0
      Loans and leases, net of unearned income, allowance, and
      reserve.................................................              45,614,535
Trading Assets                ................................                 722,364
Premises and fixed assets (including capitalized leases)......                 920,948
Other real estate owned.......................................                  17,806
Investment in unconsolidated subsidiaries and associated                    //////////
companies.....................................................                       0
Customer's liability to this bank on acceptances outstanding..                  12,654
Intangible assets.............................................
      Goodwill................................................               6,972,981
      Other intangible Assets.................................               2,018,340
Other assets..................................................               2,646,575
                 TOTAL ASSETS.................................              71,555,121


                                        LIABILITIES
Deposits:
      In domestic offices.....................................              42,684,201
        Noninterest-bearing...................................  9,947,526
        Interest-bearing...................................... 32,736,675
      In foreign offices, Edge and Agreement subsidiaries,
      and IBFs................................................               3,626,852
        Noninterest-bearing...................................        000
        Interest-bearing......................................  3,626,852
Federal funds purchased and securities sold under agreements
      to repurchase                                                          2,955,746
Trading liabilities...........................................                 633,696
Other borrowed money:.........................................               3,912,732
Bank's liability on acceptances executed and outstanding......                  12,654
Subordinated notes and debentures.............................               2,604,790
Other liabilities.............................................               1,453,484
TOTAL LIABILITIES.............................................              57,884,155
Minority Interest in consolidated subsidiaries................                       0

                                      EQUITY CAPITAL
Perpetual preferred stock and related surplus.................                    0
Common Stock..................................................               53,182
Surplus.......................................................           13,344,925
Retained Earnings.............................................              209,703
Accumulated other comprehensive income........................               63,156
Other Equity Capital components...............................                    0
Total equity capital..........................................           13,670,966
Total liabilities and equity capital..........................           71,555,121

LETTER OF TRANSMITTAL

EXELON GENERATION COMPANY, LLC

OFFER TO EXCHANGE $700,000,000 6.95% SENIOR NOTES
DUE 2011 (EXCHANGE NOTES)
REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR
ALL OUTSTANDING $700,000,000 6.95% SENIOR NOTES DUE 2011

PURSUANT TO THE PROSPECTUS, DATED APRIL , 2002
THE EXCHANGE OFFER WILL EXPIRE AT P.M., EASTERN STANDARD TIME,
ON 2002 UNLESS EXTENDED (SUCH DATE AND TIME,
AS IT MAY BE EXTENDED, (THE "EXPIRATION DATE").
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
EASTERN STANDARD TIME, ON THE EXPIRATION DATE.

THE EXCHANGE AGENT FOR THIS OFFER IS
WACHOVIA BANK, NATIONAL ASSOCIATION

BY HAND OR OVERNIGHT COURIER:       BY FACSIMILE TRANSMISSION:          CONFIRM BY TELEPHONE:
   WACHOVIA BANK, NATIONAL           WACHOVIA BANK, NATIONAL           WACHOVIA BANK, NATIONAL
         ASSOCIATION                       ASSOCIATION                       ASSOCIATION
      EXELON GENERATION               Attention: Marsha Rice            Attention: Marsha Rice
         COMPANY, LLC                    (704) 590-7628                    (704) 590-7413
 Corporate Actions Department
1525 West W. T. Harris Blvd.,
             3C3
     Charlotte, NC 28262
    Attention: Marsha Rice

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH

ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU SHOULD READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL BEFORE

COMPLETING IT.

The undersigned acknowledges that he or she has received the prospectus, dated April , 2002 (the "Prospectus"), of Exelon Generation Company, LLC., a Delaware corporation (the "Company"), and this letter of transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to exchange an aggregate principal amount of any and all of its $700,000,000 6.95% Senior Notes due 2011 registered under the Securities Act of 1933, as amended (the "Exchange Notes"), for a like principal amount of the Company's issued and outstanding unregistered $700,000,000 6.95% Senior Notes due 2011 (the "Original Notes"). The Exchange Offer is subject to all of the terms and conditions set forth in the Prospectus, including without limitation, the right of the Company to waive, subject to applicable laws, conditions. In the event of any conflict between the Letter of Transmittal and the Prospectus, the Prospectus shall govern.

The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Original Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus) and have no registration rights or rights to additional interest. For each Original Notes accepted for exchange, the holder of such Original Notes will receive an Exchange Note having a principal amount equal to that of the surrendered Original Notes. Interest on the Exchange Notes will accrue at the rate of 6.95% per annum and will be payable semiannually on each June 15 and December 15, commencing on June 15, 2002. The Exchange Notes will mature on June 15, 2011. Any interest that has accrued on the Original Notes before their tender in this Exchange Offer will be payable on the Exchange Notes on the first interest payment date after the conclusion of this exchange offer.

The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the latest time and date to which the Exchange Offer is extended. The Company shall notify the holders of the Original Notes of any extension as promptly as practicable by oral or written notice thereof.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE EXCHANGE AGENT. SEE INSTRUCTION 11.

The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

List below the Original Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, list the certificate numbers and principal amount of Original Notes on a separate signed schedule and affix the schedule to this Letter of Transmittal.

-----------------------------------------------------------------------------------------------------------------
                                          DESCRIPTION OF ORIGINAL NOTES
-----------------------------------------------------------------------------------------------------------------
   NAME(S) AND ADDRESS(S) OF REGISTERED HOLDER(S)                           SHARES TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR
                     ON ACCOUNT)
                                                       ---------------------------------------------------------
                                                             AGGREGATE AMOUNT              PRINCIPAL AMOUNT
                                                            OF ORIGINAL NOTES                 EXCHANGED*
                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

                                                       ---------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
 *  Unless otherwise indicated in this column, ALL of the Original Notes will be deemed to have been exchanged.
 See Instruction 2. Original Notes exchanged must be in denominations of principal amount of $1,000 and any
 integral multiple thereof. See Instruction 1.
-----------------------------------------------------------------------------------------------------------------

ADDITIONAL INFORMATION REGARDING EXCHANGED NOTES

/ /            Check here if exchanged Original Notes are being delivered
               by book-entry transfer made to the account maintained by the
               exchange agent with DTC, Euroclear or Clearstream and
               complete the following:

               Name of Exchange Institution:
               DTC, Euroclear or Clearstream Book-Entry Account:
               Transaction Code Number:
/ /            Check here if exchanged Original Notes are being delivered
               pursuant to a notice of guaranteed delivery previously sent
               to the exchange agent and complete the following:

               Name(s) of Registered Holder(s):
               Window Ticket Number (if any):
               Date of Execution of Notice of Guaranteed Delivery:
               Name of Institution which Guaranteed Delivery:
               If Delivered by Book-Entry Transfer, Complete the Following:

               DTC, Euroclear or Clearstream Book-Entry Account:
               Transaction Code Number:
/ /            Check here if you are a broker-dealer and wish to receive 10
               additional copies of the prospectus and 10 copies of any
               amendments or supplement thereto.

               Name:
               Address:

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby delivers for exchange to the Company the aggregate principal amount of Original Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Notes delivered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Original Notes as are being delivered hereby.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Original Notes delivered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned further represents that (i) it will acquire the Exchange Notes in the ordinary course of its business, (ii) it has no arrangements or understandings with any person to participate in a distribution of the Exchange Notes, and (iii) it is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act. The undersigned also acknowledges that this Exchange Offer is being made by the Company based upon the Company's understanding of an interpretation by the staff of the Commission as set forth in no-action letters issued to third parties, that the Exchange Notes issued in exchange for the Original Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: (i) such holders are not affiliates of the Company within the meaning of Rule 405 under the Securities Act; (ii) such Exchange Notes are acquired in the ordinary course of such holder's business; and (iii) such holders are not engaged in, and do not intend to engage in, a distribution of the Exchange Notes and have no arrangement or understanding with any person to participate in the distribution of the Exchange Notes. However, the staff of the Commission has not considered the Exchange Offer in the context of a request for a no-action letter, and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in other circumstances.

Any broker-dealer and any holder who has an arrangement or understanding with any person to participate in the distribution of Exchange Notes may not rely on the applicable interpretations of the staff of the Commission. Consequently, these holders must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. If the undersigned is a broker-dealer, it acknowledges that the SEC considers broker-dealers that acquired Original Notes directly from the Company, but not as a result of market-making activities or other trading activities, to be making a distribution of the Exchange Notes.

If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes acquired by such broker-dealer as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Original Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This delivery may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer--Withdrawal of Tenders" section of the Prospectus.

Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, please issue the Exchange Notes in the name of the undersigned or, in the case of a book-entry delivery of Original Notes, please credit the book-entry account indicated above maintained at DTC, Euroclear or Clearstream. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, please send the Exchange Notes (and, if applicable, substitute certificates representing Original Notes for any Original Notes not exchanged) to the undersigned at the address shown above in the box entitled "Description of Original Notes."

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.

SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)

To be completed ONLY if certificates for Original Notes not tendered and/or Exchange Notes are to be issued in the name of and sent to someone other than the person(s) whose signature(s) appear(s) on this Letter of Transmittal above, or if Original Notes which are not accepted for exchange are to be returned by credit to an account maintained at DTC, Euroclear or Clearstream other than the account indicated above. Issue: Exchange Notes and/or Original Notes to:
Name(s): ___________________________________________________________________

(PLEASE TYPE OR PRINT)

Address: ___________________________________________________________________

(INCLUDING ZIP CODE)

(Complete accompanying Substitute Form W-9)

Credit unexchanged Original Notes delivered by book-entry transfer to the DTC, Euroclear or Clearstream account set forth below.

(DTC, EUROCLEAR OR CLEARSTREAM ACCOUNT NUMBER, IF APPLICABLE)

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)

To be completed ONLY if certificates for Original Notes not tendered and/or Exchange Notes are to be sent to someone other than the person(s) whose signature(s) appear(s) on this Letter of Transmittal above or to such person(s), at an address other than shown in the box entitled "Description of Original Notes" on this Letter of Transmittal above.

Mail: Exchange Notes and/or Original Notes to:

Name(s): ___________________________________________________________________

(PLEASE TYPE OR PRINT)

Address: ___________________________________________________________________

(INCLUDING ZIP CODE)

IMPORTANT: THIS LETTER OF TRANSMITTAL, OR A FACSIMILE HEREOF, OR AN AGENT'S MESSAGE (TOGETHER WITH THE CERTIFICATES FOR ORIGINAL NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., EASTERN STANDARD TIME, ON THE EXPIRATION DATE.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.

PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)

(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)

Dated: ____________________________ , 2001

                    X:                                                 , 2001

                    X:                                                 , 2001
         SIGNATURE(S) OF OWNER(S))                                     (DATE)

Area Code and Telephone Number

If a holder is tendering any Original Notes, this Letter of Transmittal must be signed by the registered holder(s) for the Original Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instructions 4.

Name(s): ___________________________________________________________________

(PLEASE TYPE OR PRINT) CAPACITY:

Address: ___________________________________________________________________

(INCLUDING ZIP CODE)

SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)

(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)

(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE)

OF FIRM)

(AUTHORIZED SIGNATURES)

(PRINTED NAME)

(TITLE)

DATED: ____________________________ , 2001

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE OFFER TO EXCHANGE
REGISTERED 6.95% SENIOR NOTES DUE 2011 FOR
OUTSTANDING 6.95% SENIOR NOTES DUE 2011
OF EXELON GENERAL COMPANY, LLC

1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL NOTES; GUARANTEED DELIVERY PROCEDURES. A holder of Original Notes may tender the same by
(i) properly completing and signing this Letter of Transmittal or a facsimile thereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Original Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date; or (ii) complying with the procedure for book-entry transfer described below, or (iii) complying with the guaranteed delivery procedures described below. Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof.

The Exchange Agent will make a request to establish an account with respect to the Original Notes at the Depositary Trust Company, or DTC, Euroclear and Clearstream for purposes of the Exchange Offer promptly after the date of the Prospectus. Any financial institution that is a participant in DTC's system may make book-entry delivery of Original Notes by causing DTC to transfer such Original Notes into the Exchange Agent's account at DTC in accordance with DTC's Automated Tender Offer Program procedures for such transfer. Any participant in Euroclear or Clearstream may make book-entry delivery of Original Notes by causing Euroclear or Clearstream to transfer such Original Notes into the Exchange Agent's account in accordance with established Euroclear or Clearstream procedure for transfer. However, although delivery of Original Notes may be effected through book-entry transfer at DTC, Euroclear, or Clearstream, an Agent's Message (as defined in the next paragraph) in connection with a book-entry transfer and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at the address specified on the cover page of this Letter of Transmittal on or prior to the Expiration Date or the guaranteed delivery procedures described below must be compiled with.

A Holder may tender Original Notes that are held through DTC by transmitting its acceptance through DTC's Automatic Tender Offer Program ("ATOP"), for which the transaction will be eligible, and DTC will then edit and verify the acceptance and send an Agent's Message to the Exchange Agent for its acceptance. The term "Agent's Message" means a message transmitted by DTC, Euroclear or Clearstream to, and received by, the Exchange Agent and forming part of the book-entry confirmation, which states that DTC, Euroclear or Clearstream has received an express acknowledgment from the participant tendering the Original Notes that such participant has received the Letter of Transmittal and agrees to be bound by the terms of the Letter of Transmittal, and that the Company may enforce such agreement against such participant. Delivery of an Agent's Message will also constitute an acknowledgment from the tendering DTC, Euroclear or Clearstream participant that the representations and warranties set forth in this Letter of Transmittal are true and correct.

Holders of Original Notes held through Euroclear or Clearstream are required to use book-entry transfer pursuant to the standard operating procedures of Euroclear or Clearstream to accept the Exchange Offer and to tender their Original Notes. A computer-generated message must be transmitted to Euroclear or Clearstream in lieu of a Letter of Transmittal, in order to tender the Original Notes in the Exchange Offer.

DELIVERY OF THE AGENT'S MESSAGE BY DTC, EUROCLEAR OR CLEARSTREAM WILL SATISFY THE TERMS OF THE EXCHANGE OFFER AS TO EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL BY THE PARTICIPANT IDENTIFIED IN THE AGENT'S MESSAGE. DTC PARTICIPANTS MAY ALSO ACCEPT THE EXCHANGE OFFER BY SUBMITTING A NOTICE OF GUARANTEED DELIVERY THROUGH ATOP.

Holders of Original Notes who cannot deliver all required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Original Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to such procedures:

(i) such tender must be made through an Eligible Institution (as defined below),

(ii) prior to the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by

the Company (by facsimile transmission, mail or hand delivery or a properly transmitted Agent's Message in lieu of Notice of Guaranteed Delivery), setting forth the name and address of the holder of Original Notes, the certificate number or numbers of such Original Notes and the principal amount of Original Notes tendered, stating that the tender is being made thereby and guaranteeing that within five business days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with a book-entry confirmation and any other documents required by this Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and

(iii) such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as a book-entry confirmation and all other documents required by this Letter of Transmittal, are received by the Exchange Agent within five business days after the Expiration Date.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, OR BOOK-ENTRY TRANSFER AND TRANSMISSION OF AN AGENT'S MESSAGE BY A DTC, EUROCLEAR OR CLEARSTREAM PARTICIPANT, ARE AT THE ELECTION AND RISK OF THE TENDERING HOLDERS. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE, NO LETTER OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY, DTC, EUROCLEAR OR CLEARSTREAM. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE TENDERS FOR SUCH HOLDERS. SEE "THE EXCHANGE OFFER" SECTION OF THE PROSPECTUS.

2. PARTIAL TENDERS; WITHDRAWALS. If less than all of the Original Notes evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Original Notes tendered in the box entitled "Description of Original Notes--Principal Amount Tendered." All Original Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise clearly indicated.

If not yet accepted, a tender pursuant to the Exchange Offer may be withdrawn at any time prior to 5:00 p.m., Eastern Standard time, on the Expiration Date.

For a withdrawal to be effective:

- the Exchange Agent must receive a written notice, which may be by telegram, telex, facsimile transmission or letter, of withdrawal at the address set forth above, or

- for DTC, Euroclear or Clearstream participants, holders must comply with their respective standard operating procedures for electronic tenders and the Exchange Agent must receive an electronic notice of withdrawal from DTC, Euroclear or Clearstream.

Any notice of withdrawal must:

- specify the name of the person who deposited the Original Notes to be withdrawn,

- identify the Original Notes to be withdrawn, including the principal amount of the Original Notes to be withdrawn,

- be signed by the person who tendered the Original Notes in the same manner as the original signature on the Letter of Transmittal, including any required signature guarantees, and

- specify the name in which any Original Notes are to be re-registered, if different from that of the withdrawing holder.

The Exchange Agent will return the properly withdrawn Original Notes without cost to the holder as soon as practicable following receipt of notice of withdrawal. If Original Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Original Notes or otherwise comply with the book-entry transfer facility's procedures. All questions as to the validity, form and eligibility, including time of receipt, of any notice of withdrawal will be determined by the Company, in its sole discretion, and such determination will be final and binding on all parties.

3. TENDER BY HOLDER. Except in limited circumstances, only a Euroclear, Clearstream or DTC participant listed on a DTC securities position listing may tender Original Notes in the Exchange Offer. Any beneficial owner of Original Notes who is not the registered holder and is not a Euroclear, Clearstream or DTC participant and who wishes to tender should arrange with such registered holder to execute and deliver this Letter of Transmittal

on such beneficial owner's behalf or must, prior to completing and executing this Letter of Transmittal and delivering his, her or its Original Notes, either make appropriate arrangements to register ownership of the Original Notes in such beneficial owner's name or obtain a properly completed bond power from the registered holder or properly endorsed certificates representing such.

4. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If any tendered Original Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If any tendered Original Notes are registered in different names, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates.

When this Letter of Transmittal is signed by the registered holder (including any participant in DTC, Euroclear or Clearstream whose name appears on a security position listing as the owner of the Original Notes) of the Original Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Notes are to be issued to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution (as defined below).

If this Letter of Transmittal is signed by a person other than the registered holder or holders of any Original Notes specified therein, such certificate(s) must be endorsed by such registered holder(s) or accompanied by separate written instruments of transfer or endorsed in blank by such registered holder(s) exchange in form satisfactory to the Company and duly executed by the registered holder, in either case signed exactly as such registered holder(s) name or names appear(s) on the Original Notes.

If this Letter of Transmittal or any certificates of Original Notes or separate written instruments of transfer or exchange are signed or endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal.

Signature on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution unless the Original Notes tendered pursuant thereto are tendered (i) by a registered holder (including any participant in DTC, Euroclear or Clearstream whose name appears on a security position listing as the owner of the Original Notes) who has not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (each of the foregoing in "Eligible Institution").

5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Original Notes should indicate in the applicable box the name and address to which Exchange Notes issued pursuant to the Exchange Offer are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Original Notes by book-entry transfer may request that Original Notes not exchanged be credited to such account maintained at DTC, Euroclear or Clearstream as such holder may designate hereon. If no such instructions are given, such Original Notes not exchanged will be returned to the name or address of the person signing this Letter of Transmittal.

6. TAX IDENTIFICATION NUMBER. Federal income tax law generally requires that a tendering holder whose Original Notes are accepted for exchange must provide the Company (as payor) with such holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 below or otherwise establish a basis for exemption from backup withholding. If such holder is an individual, the TIN is his or her social security number. If the Company is not provided with the current TIN or an adequate basis for an exemption, such tendering holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, delivery to such tendering holder of Exchange Notes may be subject to backup withholding rate that will 30% for payment made in 2002, and decrease in steps to 28% for payments made in 2006 and thereafter when the holder receives interest with respect to the Exchange Notes, or when the holder receives proceeds upon sale, exchange, redemption, retirement or other disposition of the Exchange Notes.

Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for additional instructions.

Under the federal income tax laws, payments that may be made by the Company on account of Exchange Notes issued pursuant to the Exchange Offer may be subject to the above mentioned backup withholding. To prevent backup withholding, each tendering holder of Original Notes must provide its correct TIN by completing the "Substitute Form W-9" set forth below, certifying that the TIN provided is correct (or that such holder is awaiting a TIN) and that
(i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject tot a backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the tendering holder of Original Notes is a nonresident alien or foreign entity not subject to backup withholding, such holder must give the Company a completed Form W-8, Certificate of Foreign Status. These forms may be obtained from the Exchange Agent. If the Original Notes are in more than one name or are not in the name of the actual owner, such holder should consult the W-9 Guidelines for information on which TIN to report. If such holder does not have a TIN, such holder should consult the W-9 Guidelines for instructions for applying for a TIN, check the box in Part 2 of the Substitute Form W-9, write "applied for" in lieu of its TIN and complete the Certificate of Awaiting Taxpayer Identification Number. Checking this box or writing "applied for" on the form means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. If a holder checks the box in Part 2 of the Substitute Form W-9 or writes "applied for" on that form, backup withholding will nevertheless apply to all reportable payments made to such holder. If such a holder furnishes its TIN to the Company within 60 days, however, any amounts so withheld shall be refunded to such holder. If, however, the holder has not provided the Company with its TIN within such 60-day period, the Company will remit such previously retained amounts to the IRS as backup withholding.

Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in overpayment of taxes, a refund may be obtained from the Internal Revenue Service.

7. TRANSFER TAXES. Holders who tender their Original Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, Exchange Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Original Notes tendered hereby, or if tendered Original Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Original Notes in connection with the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.

Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Original Notes specified in this Letter of Transmittal.

8. WAIVER OF CONDITIONS. The Company reserves the right to waive satisfaction of any or all conditions enumerated in the Prospectus.

9. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Original Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Original Notes for exchange.

Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Original Notes nor shall any of them incur any liability for failure to give any such notice.

10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent, at the address and telephone number indicated above.

[Remainder of page intentionally left blank]

NOTICE OF GUARANTEED DELIVERY
EXELON GENERATION COMPANY, LLC
OFFER TO EXCHANGE $700,000,000 6.95% SENIOR NOTES DUE 2011
REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR
ALL OUTSTANDING $700,000,000 6.95% SENIOR NOTES DUE 2011

This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Exelon Generation Company, LLC (the "Company") made pursuant to the prospectus, dated April , 2002 (the "Prospectus") and the enclosed Letter of Transmittal (the "Letter of Transmittal") if certificates for Original Notes of the Company are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 P.M., Eastern Standard time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to Wachovia Bank, National Association (the "Exchange Agent") as set forth below. In addition, in order to use the guaranteed delivery procedure to tender Original Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 P.M., Eastern Standard time, on the Expiration Date. Capitalized terms not defined herein are defined in the Prospectus or the Letter of Transmittal.

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME
ON , 2002 UNLESS EXTENDED (SUCH DATE AND TIME,
AS IT MAY BE EXTENDED, THE "EXPIRATION DATE").
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
EASTERN STANDARD TIME, ON THE EXPIRATION DATE.

THE EXCHANGE AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION

BY HAND OR OVERNIGHT COURIER:   BY FACSIMILE TRANSMISSION:        CONFIRM BY TELEPHONE:
   WACHOVIA BANK, NATIONAL        WACHOVIA BANK, NATIONAL        WACHOVIA BANK, NATIONAL
         ASSOCIATION                    ASSOCIATION                    ASSOCIATION
      EXELON GENERATION           Attention: Marsha Rice         Attention: Marsha Rice
        COMPANY, LLC                  (704) 590-7628                 (704) 590-7413
Corporate Actions Department
1525 West W. T. Harris Blvd.,
             3C3
     Charlotte, NC 28262
   Attention: Marsha Rice

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed to by Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal.

Ladies and Gentlemen:

Upon the terms and conditions set forth in the Prospectus and the accompanying Letters of Transmittal, the undersigned hereby tenders to the Company the principal amount of Original Notes set forth below, pursuant to the guaranteed delivery procedure described in "The Exchange Offer " section of the Prospectus.

The undersigned understands that tenders of Original Notes will be accepted only in authorized denominations. The undersigned understands that tenders of Original Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., Eastern Standard time on the Expiration Date. Tenders of Original Notes may be withdrawn if the Exchange offer is terminated or as otherwise provided in the Prospectus.

All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

----------------------------------------------------------------------------------------------
 Principal Amount of Original Notes               If Original Notes will be delivered by
Tendered*                                         book-entry transfer, provide account number

 $                                                Account Number
----------------------------------------------------------------------------------------------
 * Must be in denominations of principal amount of $1,000 and any integral multiple thereof.
----------------------------------------------------------------------------------------------

PLEASE SIGN HERE

                  X

                  X
SIGNATURE(S) OF OWNER(S) OR AUTHORIZED                           DATE
              SIGNATORY

                           Area Code and Telephone Number:

Must be signed by the holder(s) of Original Notes as the name(s) of such holder(s) appear(s) on the certificate(s) for the Original Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If any signature is by a trustee, executor, administrator, guardian, attorney-in-fact, offer of a corporation or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below and furnish evidence of his or her authority as provided in this Letter of Transmittal.

PLEASE PRINT NAME(S) AND ADDRESS(ES)

Name(s): ___________________________________________________________________

Capacity: __________________________________________________________________

Address(es): _______________________________________________________________

GUARANTEE

The undersigned, a member of a registered national securities exchange, or a member of the National Association of Securities Dealers, or a commercial bank trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, hereby guarantees that timely confirmation of the book-entry transfer of Original Notes in the principal amount to be transferred into the Exchange Agent's account at Wachovia Bank, National Association pursuant to the procedures set forth in "The Exchange Offer section of the Prospectus, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, within five business days after the Expiration Date.

Authorized Signature: ______________________________________________________

Name: ______________________________________________________________________

(PLEASE PRINT)

Title: _____________________________________________________________________

Name of Firm: ______________________________________________________________

Address: ___________________________________________________________________

(INCLUDE ZIP CODE)

Area Code and Telephone Number: ____________________________________________

Dated: ____________________________ , 2002

CLIENT LETTER

EXELON GENERATION COMPANY, LLC

OFFER TO EXCHANGE $700,000,000 6.95% SENIOR NOTES DUE 2011 REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ALL OUTSTANDING $700,000,000 6.95% SENIOR NOTES DUE

2011

April , 2002

To Our Clients:

Enclosed for your consideration is a prospectus, dated April , 2002 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of Transmittal"), relating to the offer (the "Exchange Offer") of Exelon Generation Company, LLC (the "Company") to exchange its $700,000,000 6.95% Senior Notes due 2011 which have been registered under the Securities Act of 1933, as amended (the "Exchange Notes"), for its outstanding $700,000,000 6.95% Senior Notes due 2011 (the "Original Notes"), upon the terms and subject to the conditions described in the Prospectus. The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement, dated as of June 14, 2001, between the Company and the initial purchasers referred to therein.

This material is being forwarded to you as the beneficial owner of the Original Notes carried by us in your account but not registered in your name. A tender of such Original Notes may only be made by us as the holder of record and pursuant to your instructions.

Accordingly, we request instructions as to whether you wish us to tender on your behalf the Original Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.

Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Original Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., Eastern Standard time, on , 2002, unless extended by the Company (the "Expiration Date"). Any Original Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before 5:00 p.m., Eastern Standard time, on the Expiration Date.

The Exchange Offer is not conditioned upon any minimum number of Original Notes being tendered. Your attention is directed to the following:

1. The Exchange Offer is for any and all Original Notes.

2. The Exchange Offer expires at 5:00 p.m., Eastern Standard time, on the Expiration Date, unless extended by the Company.

PLEASE READ THE PROSPECTUS

IF YOU WISH TO TENDER YOUR ORIGINAL NOTES, PLEASE SO INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM ON THE BACK OF THIS LETTER. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER ORIGINAL NOTES.

If we do not receive written instructions in accordance with the procedures presented in the Prospectus and the Letter of Transmittal, we will not tender any of the Original Notes on your account. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Original Notes held by us for your account.

Please carefully review the enclosed material as you consider the Exchange Offer.

INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE ORDER

The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Exelon Generation Company, LLC. with respect to its Original Notes.

This will instruct you to tender the Original Notes held by you for the account of the undersigned, upon and subject to terms and conditions set forth in the Prospectus and the related Letter of Transmittal.

Please tender the Original Notes held by you for my account as indicated below:

The aggregate face amount of Original Notes held by you for the account of the undersigned is (fill in amount):

$_________ of 6.95% Senior Notes due 2011

With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

/ / To TENDER the following Original Notes held by you for the account of the undersigned (insert principal amount of Original Notes to be tendered (if any)):

$_________ of 6.95% Original Notes due 2011

/ / NOT to TENDER any Original Notes held by you for the account of the undersigned.

SIGN HERE

Name of beneficial owner(s) (please print): ________________________________

Signature(s): ______________________________________________________________

Address: ___________________________________________________________________

Telephone Number: __________________________________________________________

Taxpayer Identification or Social Security Number: _________________________

Date: ______________________________________________________________________

BROKER DEALER LETTER
EXELON GENERATION COMPANY, LLC
OFFER TO EXCHANGE $700,000,000 6.95% SENIOR NOTES DUE 2011
REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ALL OUTSTANDING $700,000,000 SENIOR NOTES DUE 2011.

April , 2002

To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

Exelon Generation Company, LLC (the "Company") is offering to exchange (the "Exchange Offer"), upon and subject to the terms and conditions set forth in the prospectus, dated April , 2002 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of Transmittal"), its $700,000,000 6.95% Senior Notes due 2011 which have been registered under the Securities Act of 1933, as amended (the "Exchange Notes"), for its outstanding $700,000,000 6.95% Senior Notes due 2011 (the "Original Notes"). The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement, dated as of June 14, 2001, between the Company and the initial purchasers referred to therein.

We are requesting that you contact your clients for whom you hold Original Notes regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Original Notes registered in your name or in the name of your nominee, or who hold Original Notes registered in their own names, we are enclosing the following documents:

1. Prospectus, dated April , 2002;

2. The Letter of Transmittal for your use and for the information of your clients;

3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date (as defined below), or if the procedure for book-entry transfer cannot be completed on a timely basis;

4. A form of letter which may be sent to your clients for whose account you hold Original Notes registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer;

5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and

6. Return envelopes addressed to Wachovia Bank, National Association, the Exchange Agent for the Original Notes.

YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON , 2002, UNLESS EXTENDED BY THE COMPANY ("THE EXPIRATION DATE"). THE ORIGINAL NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., EASTERN STANDARD TIME, ON THE EXPIRATION DATE.

The Company will not pay any fee or commission to any broker or dealer or to any other person (other than the Exchange Agent for the Exchange Offer). The Company will pay all transfer taxes, if any, applicable to the exchange of Original Notes pursuant to the Exchange Offer, on the transfer of Original Notes to it, except as otherwise provided in instruction 7 of the enclosed Letter of Transmittal. The Company may reimburse brokers, dealers, commercial banks, trust companies and other nominees for their reasonable out-of-pocket expenses incurred in forwarding copies of the Prospectus, Letter of Transmittal and related documents to the beneficial owners of the Original Notes and in handling or forwarding tenders for exchange.

To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.

If holders of Original Notes wish to tender, but it is impracticable for them to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under "The Exchange Offer--Guaranteed Delivery Procedures."

Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials should be directed to the Exchange Agent for the Original Notes, at its address and telephone number set forth on the front of the Letter of Transmittal.

Very truly yours,

Exelon Generation Company, LLC

Enclosures

NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.

TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)

PAYOR'S NAME: EXELON GENERATION COMPANY, LLC

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       SUBSTITUTE             Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT                 TIN:
        FORM W-9              THE RIGHT AND CERTIFY BY SIGNING AND DATING
    Department of the         BELOW. For individuals, this is your Social          Social Security Number
   Treasury Internal          Security Number (SSN). For sole proprietors,                   or
    Revenue Service           see the Instructions in the enclosed                        Employer
                              Guidelines. For other entities, it is your           Identification Number
                              Employer Identification Number (EIN). If you
                              do not have a number, see how to get a TIN in
                              the enclosed Guidelines.
                              ----------------------------------------------------------------------------
                              Part 2--TIN Applied for  / /
                              ----------------------------------------------------------------------------
                              Part 3--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
  Payor's Request for         (1) the number shown on this form is my correct Taxpayer Identification
        Taxpayer              Number (or I am waiting for a number to be issued to me), (2) I am not
     Identification           subject to backup withholding because (a) I am exempt from backup
     Number ("TIN")           withholding, (b) I have not been notified by the Internal Revenue Service
   and Certification          (the "IRS") that I am subject to backup withholding as a result of a failure
                              to report all interest or dividends, or (c) the IRS has notified me that I
                              am no longer subject to backup withholding, and (3) I am a U.S. person
                              (including a U.S. resident alien).
                              ----------------------------------------------------------------------------

                              SIGNATURE:                                          DATE:
----------------------------------------------------------------------------------------------------------
 You must cross out item (2) of the above certification if you have been notified by the IRS that you are
 subject to backup withholding because of underreporting of interest or dividends on your tax returns and
 you have not been notified by the IRS that you are no longer subject to backup withholding. The Internal
 Revenue Service does not require your consent to any provisions of this document other than the
 certifications required to avoid backup withholding.
----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------
                  YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
                          PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING
                                      TAXPAYER IDENTIFICATION NUMBER

     I certify under penalties of perjury that a taxpayer identification number has not been issued to me,
 and either (a) I have mailed or delivered an application to receive a taxpayer identification number to
 the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend
 to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer
 identification number by the time of payment, 30 percent of all reportable cash payments made to me
 thereafter will be withheld until I provide a number and such retained amounts will be remitted to the
 Internal Revenue Service as backup withholding.

 Signature:                                                                       Date:

 FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF ANY PAYMENTS MADE TO YOU ON
 ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
 IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS
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