The following definitions supplement those contained in 18 C.F.R. Part 358:

Transcription

1 Corporate Procedure STANDARDS OF CONDUCT(SOC) Page 1 of 12 Effective Date: January 26, PURPOSE Overview of the FERC Requirements: The Federal Energy Regulatory Commission ( FERC or the Commision ) has promulgated regulations titled Standards of Conduct, ( SOC ) 18 C.F.R. Part 358. The Standards of Conduct set forth legal requirements applicable to any public utility that owns, operates or controls facilities used for the transmission of such electric energy in interstate commerce. The regulation designates such utilities as Transmision Providers. Within Exelon, the Commonwealth Edison Company (with its subsidiary Commonwealth Edison Company of Indiana)( ComEd ) and PECO Energy Company ( PECO ) are Transmision Providers. The regulation sets forth two general principles: (1) a Transmision Provider s personnel engaged in transmission system operations must function independently from the Transmision Provider s Marketing personnel and from its Marketing Affiliate; and (2) a Transmission Provider must treat all transmission customers, affiliated and non-affiliated, on a non-discriminatory basis, and must not operate its transmission system to preferentially benefit its Marketing Affiliates. This Procedure identifies and memorializes the means by which Exelon complies with and implements these principles. As a part of SOC implementation, an Exelon SOC Sharepoint Site has been developed with contacts, information about the regulations, various implementation efforts and a number of other helpful items. This site can be accessed through the Exelon Intranet at: TERMS AND DEFINITIONS The following definitions supplement those contained in 18 C.F.R. Part 358: 2.1 Chief Compliance Officer -See Responsibilities section for explanation of the SOC team Chief Compliance Officer. 2.2 Compliance Group All Exelon personnel engaged in Transmission Functions, Marketing Functions, the Exelon Board, Shared Personnel and personnel working for Marketing Affiliates as selected and defined by the Exelon SOC Compliance Team. 2.3 Deputy Compliance Officer - See Responsibilities section for explanation of the SOC

2 team Deputy Compliance Officers. Page 2 of Document or Record Any records or documents, including magnetic tapes, micrographic media and other electronic media, prepared, maintained or held by any agent or employee of Exelon, including any such documents of an independent contractor, stock transfer agent, registrar, paying agent, indenture trustee or other person employed by Exelon to perform services with respect to the company, insofar as such person is accountable to the company. 2.5 Exelon Code of Business Conduct -- The Exelon code that establishes the standards for all company personnel to conduct business both legally and ethically. 2.6 Generation Station Personnel -- Employees and contractors of Exelon Generation performing generation plant operations for either Exelon Nuclear or Exelon Power business units and who are separate from employees of Exelon Generation engaged in the Wholesale Merchant Function. 2.7 Market Information Non-public information acquired by ComEd or PECO from nonaffiliated transmission customers or potential non-affiliated transmission customers or developed in the course of responding to requests for transmission or ancillary service. 2.8 Marketing Function sale for resale or submission of offers to sell electric energy or capacity, demand response, virtual transactions or financial or physical transmission rights, all as subject to an exclusion for bundled retail sales, including sales of electric energy made by POLRs acting as POLR. 2.9 Marketing Function Personnel employee, contractor, consultant or agent of a Transmission Provider or of an affiliate of a Transmission Provider who actively and personally engages on a day-to-day basis in marketing functions Marketing Affiliate An affiliate of PECO or ComEd that sells power or energy for resale in interstate commerce and employs Marketing Function personnel (for example, Exelon Generation Power Team) OASIS The Open Access Same-Time Information System maintained by PJM for ComEd and PECO PJM The Pennsylvania-New Jersey-Maryland Interconnection, LLC PJM Tariff The PJM Open Access Transmission Tariff on file with the FERC and which sets forth the rates, terms and conditions of transmission service over transmission facilities located in the PJM Control Area Responsible Manager See Responsibilities section for explanation of the SOC team Responsible Managers Transmission Function - planning, directing, organizing or carrying out of day-to-day transmission operations, including the granting and denying of transmission service

3 requests. Page 3 of Transmission Function Personnel - employee, contractor, consultant or agent of a transmission provider who actively and personally engages on a day-to-day basis in transmission functions Transmission Information All information relating to Transmission Functions, including information about available transmission capability, price, curtailments, ancillary services, and the like regarding any transmission system Transmission Organization or Provider - The Exelon organizations engaged in a transmission function, currently ComEd and PECO Wholesale Merchant Function The purchase and sale of electric energy or gas for resale in interstate commerce. 3.0 RESPONSIBILITIES 3.1 Standards of Conduct Team The Exelon SOC program is currently administered utilizing an overall team structure governed by a Chief Compliance Officer with support from Deputy Compliance Officers, Responsible Managers, Legal team members and various other support roles. 3.2 Chief Compliance Officer ( CCO ) Exelon shall designate a person with a working knowledge of Exelon, its structure and operations, to serve as Chief Compliance Officer with responsibility for ensuring compliance with the FERC Standards of Conduct and the governing Exelon Policies and Procedures relating to such. The responsibilities of the Chief Compliance Officer shall be to maintain oversight of the implementation of the SOC regulations and the overall SOC team and to designate Deputy Compliance Officers and Responsible Managers with the assistance of the Deputy Officers. 3.3 Deputy Compliance O ficers ( DCO ) Exelon Energy Delivery ( EED ), and Exelon Generation ( ExGen ) shal each designate one or more Deputy Compliance Officers to act at the direction of the Chief Compliance Officer to achieve compliance with this Procedure and the Standards of Conduct in their respective business units. Deputy Compliance Officers shall designate Responsible Managers for their organizations and provide recommendations to the Chief Compliance Officer on potential Responsible Managers for other organizations. The Deputy Compliance Officers will contribute to SOC implementation and participate in SOC team meetings as determined by the team and shall assist in procuring needed resources to assure effective implementation and compliance throughout Exelon. The Deputy Compliance Officers will report to the Chief Compliance Officer on SOC issues and team matters.

4 3.3.1 Responsible Managers ( RM ) Page 4 of 12 PECO, ComEd, BSC, ExGen, Exelon Power Team and Exelon Power will be required to appoint an SOC Responsible Manager to deal with the day-to-day implementation and management of SOC issues for their respective organization. Responsible Managers will participate on the SOC team and substantively contribute to all SOC implementation. RM responsibilities shall include, employee training, maintaining up-to-date lists of all members of the Compliance Group, answering employee questions, ensuring that appropriate records are maintained as described in the Records Retention Section below and coordinating audits and investigations with the Commission Staff, as well as other duties determined by the SOC team to be necessary to ensure that Exelon complies with the Standards of Conduct. 4.0 PROCEDURE 4.1 WRITTEN PROCEDURES Posting and Distribution of SOC Procedures ComEd and PECO shall post on the OASIS and/or its Internet website a summary of the procedures/processes for implementing the Standards of Conduct, which enables the Commission to determine that they are in compliance with the requirements of 18 C.F.R. Part 358. ComEd and PECO shall distribute this Procedure to senior management, all Transmission and Marketing Function personnel and any other personnel likely to become privy to Transmission Function information. 4.2 SEPARATION OF FUNCTIONS Separation of Functions Exelon personnel engaged in wholesale merchant functions are prohibited from engaging in transmission operations on the PECO and ComEd transmission systems Senior Officers and Directors ComEd and PECO will share with their Marketing Affiliates senior officers and directors, none of whom is engaged in day-to-day activity associated with either the sales or marketing functions or the transmission function Risk Management Personnel ComEd and PECO will share with their Marketing Affiliates risk management personnel, none of whom is engaged in day-to-day activity associated with either the sales or marketing functions or the transmission function. 4.3 RESTRICTIONS ON ACCESS TO TRANSMISSION ORGANIZATION FACILITIES AND TRANSMISSION INFORMATION Restrictions on Physical Access to Transmission Organization Facilities for Marketing Function Personnel -ComEd and PECO s system control centers,

5 Page 5 of 12 transmission planning departments, transmission engineering departments and distribution dispatch centers are all equipped with cardkey access security systems. Marketing Function personnel shall be prohibited from having cardkey access to those facilities and visiting any of those facilities other than in accordance with the subsequent paragraph (Escorted Access). In addition, computer workstations at all these facilities are password protected and have a standard screen saver with a timeout of 15 minutes on average. Escorted Access to Transmission Organization Facilities - PECO and ComEd shall permit Transmission Customers, including Exelon Marketing Function Personnel, on a non-discriminatory basis, to visit their control centers for general orientation purposes by prior arrangement so long as the Transmission Customers are escorted by authorized Exelon Corporation personnel at all times and all nonpublic information is adequately secured so as not to be viewed. No Preferential Physical Access - Exelon personnel engaged in wholesale merchant functions will not have preferential access over that of other Transmission Customers to the PECO or ComEd system control centers or similar facilities used for transmission operations or reliability functions Restrictions on Access to Transmission Information (c) Senior Officers and Directors - ComEd and PECO will share non-public transmission and market information with senior officers and directors that they have in common with their Marketing Affiliates, provided those individuals do not participate in directing, organizing or executing day-to-day transmission system operations or marketing functions; or do not act as a conduit to share such information with a Marketing Affiliate. Off-OASlS/On-OASIS Communications - PECO and ComEd personnel engaged in transmission system operations and reliability functions are prohibited from disclosing to Exelon Marketing Function personnel any non-public transmission or market information, including through communications off the OASIS, through access to information not posted on the OASIS that is not at the same time available to the general public without restriction, or through information on the OASIS that is not at the same time publicly available to all OASIS users. Operations Council - Exelon has established an Operations Council, consisting of senior executives, whose role is to facilitate coordination and integration on operational issues and improve efficiency and effectiveness across the corporation. The Operations Council will not discuss non-public Transmission Information or non-public market information derived from the transmission business if any Merchant Function personnel are present. To further ensure that the Council does not become a conduit for such information, the following steps have been implemented: (1) ensure that every member of the Council and regular participants have completed Standards of Conduct training; (2) conduct periodic

6 Page 6 of 12 supplemental, tailored training; (3) prepare a list of dos and don ts to guide the Council; (4) provide legal review of agenda items for initial meetings; (5) have an attorney present at the meetings; and (6) keep meeting minutes. (d) Interface Meetings Between Exelon Energy Delivery and Exelon Generation (i) (ii) In order to assure reliable coordination of interconnected facilities, and in particular to comply with Nuclear Regulatory Commission requirements and nuclear industry reliability and safety standards, Exelon Energy Delivery (EED) personnel and Exelon Generation Station personnel must coordinate and exchange operating information. EED conducts monthly interface meetings with nuclear operations personnel and fossil operations personnel at Exelon Generation. EED conducts similar coordination meetings or phone calls with non-affiliated generators interconnected to the system. To assure that these meetings, and personnel participating, do not serve as conduits, the following steps are being taken: (1) train all meeting participants in Standards of Conduct requirements; (2) at each meeting, the facilitator opens by reminding participants of these requirements; (3) the EED representative takes meeting minutes; (4) EED will maintain the minutes for three years. In addition to these monthly meetings, transmission and generation engineering staffs also engage in routine engineering and equipment failure communications as necessary for equipment maintenance. EED gives written notifications to Exelon Generation Station personnel that particular equipment is being taken off line for maintenance and replacement work; such notifications are necessary for worker safety. There are routine work management communications to coordinate work discussed at the monthly interface meetings. There are real-time operational communications by telephone between the transmission control center and the control rooms of the generating plants. Line failures or equipment breakdowns directly affecting the flow of energy to and from a plant are communicated directly to the plant. EED engages in similar types of communications with unaffiliated generators interconnected to the system. All personnel involved in such communications have been trained in the requirements of the standards of conduct and understand they are not permitted to share information with Merchant Function personnel. The routine operational calls are on recorded telephone lines. (e) Customer Consent Regarding Market Information - PECO and ComEd may disclose Market Information to a Marketing Affiliate when the non-affiliated Transmission Customer from whom the information is obtained has voluntarily consented in writing to such disclosure. PECO or ComEd must post notice of such authorization on the OASIS and/or its Internet website along with a statement that it did not provide any preference, either operational or rate-related, in exchange for the voluntary consent.

7 (f) (g) (h) Page 7 of 12 Energy Affiliate Transmission Requests - ComEd and PECO may disclose Transmission Information to a Marketing Affiliate if it relates solely to the Marketing Afiliate s specific request for transmision service. Zion Synchronous Condensers - The synchronous condensers at the retired Zion Nuclear Station are owned by Exelon Generation but operated maintained and controlled by ComEd in accordance with the Zion Operating Agreement and Zion Facilities Agreement filed with the Commission in Docket No. ERO In accordance with Commonwealth Edison Company, 93 FERC 61,040 (2000), ComEd will post on the OASIS in a timely manner: the status at all times of the synchronous condensers; and the times of planned status changes as soon as ComEd has determined them. Electronic Information Access Restriction (i) (ii) All systems/applications in ComEd and PECO housing non-public Transmission Information shall be secured using user ID and password protection controls assigned only to Transmission personnel where job responsibilities require access to such information. Additionally, periodic reviews of the access lists will be conducted and verifications made that the list has been reviewed and security has been confirmed. All procedures for the designation of access, control of access and/or modification of access must include a reminder that the Standards of Conduct apply to systems/applications housing non-public Transmission Information and they must be appropriately secured and monitored Implementation of Access Controls The SOC Compliance Team utilizes team use processes that govern the actions taken on a day-to-day basis to implement access restriction controls. 4.4 POSTING OBLIGATIONS APPLICABLE TO EXELON Marketing Affiliates - PECO and ComEd post on the OASIS and/or its Internet website the names and addresses of all Marketing Affiliates Shared Facilities - PECO and ComEd post on the OASIS and/or its Internet website a complete list of any facilities each of them shares with a Marketing Affiliate, including the types of facilities shared and their addresses Organizational Charts and Job Descriptions - PECO and ComEd post organizational charts and job descriptions on the OASIS and/or its Internet website showing (1) the names and addresses of Marketing Affiliates (ComEd Energy Acquisition is not considered to be a Marketing Affiliate); (2) the organizational structure of the parent corporation with the relative position in the corporate structure of the Transmission Providers and Marketing and Energy Affiliates; (3) for PECO and ComEd, the business

8 Page 8 of 12 units, job titles and descriptions for all personnel engaged in transmission organizations, including Transmission Functions, and the chain of command for all such positions, includingoficers and directors. Postings include the employee s title, the employee s duties, whether the employee is engaged in transmission or sales, and the name of the supervisory personnel who manage non-clerical personnel involved in transmission or sales. The postings of names and job descriptions for ComEd and PECO do not include positions that are not involved in either transmission or sales; and (4) Exelon shared services structure and information to provide context for the other positions Potential Mergers - PECO and ComEd must post information concerning potential merger partners on the Exelon corporate website, The PECO and ComEd websites used for postings related to the Standards of Conduct will provide a link to the Exelon corporate website Personnel Transfers - For all transfers of personnel between PECO and ComEd Transmission Functions, on one hand, and Marketing Affiliates, on the other, PECO and ComEd shall post a notice of the transfer on the PJM OASIS for a minimum period of 90 days. The information posted will include the name of the transferring employee, the respective titles held while performing each function, and the effective date of the transfer. The employee shall not commence work in his or her new position until this information has been posted on OASIS. The PECO and ComEd Internet websites used for postings related to the Standards of Conduct will provide a link to the PJM OASIS Inadvertent Disclosures - In the event it is determined that there has been an inadvertent disclosure of non-public Transmission Information or any other information in violation of the Standards of Conduct, the information shall be immediately reported to the OASIS Operator for posting on the OASIS in accordance with the SOC team use procedures for investigations and posting Deviations from Standards of Conduct - Please refer to the next section System Emergencies for more information Other Items Posted In addition to the above referenced items, PECO and ComEd also post information about voluntary consents; discretionary actions; discounts; and a summary of the Exelon procedures and implementation of Standards of Conduct Maintenance and Updating of Postings - PECO and ComEd will update the postings within the time period specified by the Regulation for each item. The SOC Compliance Team has designated personnel to manage the process of posting organizational chart updates and other information as required by the Standards of Conduct. The SOC Compliance Team also has designated points of contact for each of the departments for which organization chart postings are required. These contact persons are responsible for submitting updated organizational charts and related information such as job descriptions for their respective departments to the

9 Page 9 of 12 posting personnel within 3 business days of a change. In turn, the posting personnel will review the submissions and have changes posted within the time required by the regulation. (c) (d) With respect to the requirements relating to the corporate organizational structure chart and the lists of Marketing Affiliates and shared facilities listing, the Exelon SOC Compliance team has identified points of contact who will be responsible for supplying SOC posting personnel with an updated corporate structure chart and/or lists within 3 business days of any organization structural change affecting the chart or the lists. Posting personnel will review the submissions and have changes posted within the time required by the regulation. Reminder communications are sent at least monthly to all designated posting points of contact to remind them of the SOC posting requirements and the timeframes for responding Implementation of Posting Controls - The Exelon SOC Compliance Team utilizes team use processes that govern the actions taken on a day-to-day basis to implement these posting controls. 4.5 TRAINING Training and Certification Required - SOC regulations require training of certain personnel on the restrictions and the implication of the regulations on our organization. The basic requirements and information can be found in this section. Online Module Compliance Training - Beginning in 2009 and every year thereafter, personnel identified as part of the Compliance Group will be required to complete detailed training around the SOC regulations and various requirements in a form determined by the SOC Compliance Team. All such personnel will be required to provide certification, through the available system tools, that the training has been completed. Targeted, Live, Board and Senior Management Training - In addition to the general training requirement, various targeted training and presentation efforts will take place throughout the organization each year. These training sessions will be for the purpose of addressing key groups who the team has identified would benefit from tailored or additional training and/or training with specific information related to that group s activities Implementation of Training Controls The Exelon SOC Compliance Team utilizes team use processes that govern the day-today implementation of these training controls

10 4.6 SYSTEM EMERGENCIES Page 10 of Suspension of Standards of Conduct - During system emergencies and/or any condition that could, in the sole discretion of the system operator, endanger and/or adversely affect system reliability, the Standards of Conduct shall be deemed suspended to the extent necessary to address the emergency and/or condition. During these circumstances, personnel engaged in transmission system operations or reliability functions shall take whatever steps are necessary to maintain system reliability during an emergency, notwithstanding that this could otherwise constitute a violation of the Standards of Conduct and/or these implementation procedures Posting of Deviations from Standards of Conduct - PECO or ComEd will report on the OASIS any emergency resulting in a deviation from the Standards of Conduct within 24 hours of the deviation. The deviation will also be reported to FERC within 24 hours, either by telephone, fax or BOOKS AND RECORDS Obligation to Maintain Separate Books and Records - PECO and ComEd will maintain separate books of accounts and records from those of their Marketing Affiliates. These books of accounts and records will be available for Commission inspection. 4.8 RECORDS RETENTION All documents should be kept in accordance with these requirements and those set forth in the Exelon Records Management Retention and Disposition Policy, Procedure and Schedules available on the Exelon Intranet The following types of records related to compliance with, and implementation of, the Standards of Conduct must be retained as follows: (c) Copies of this Procedure in original and amended forms - to be retained by the SOC Team member responsible for the SOC file. Copies of the names and addresses of Marketing Affiliates, shared facilities, organizational charts and job descriptions, merger, employee transfer, Tariff waiver and discount information required to be posted on the OASIS and/or its Internet website - to be retained by the SOC Team members responsible for the creation of such records. Any Document or Record (as defined above and in Exelon Procedure LE-AC- 401) relevant to measures taken to comply with this Procedure and/or current practices related to compliance with this Procedure and the Standards of Conduct, including policies, procedures, processes and other guiding documents prepared to assist in compliance measures - to be retained by the SOC RM for the relevant organization. If you are not the RM but are the creator of such record, please provide the record to the RM for appropriate retention.

11 Page 11 of 12 The Responsible Managers, in coordination with the SOC team as applicable, will ensure that the above-mentioned records are maintained in accordance with the provisions of the Standards of Conduct. 4.9 ENFORCEMENT Violations of the Standards of Conduct Any knowing violation of the FERC Standards of Conduct constitutes a violation of the Exelon Code of Business Conduct Obligation to Report Violations Exelon Personnel who have a question or concern related to SOC issues or who need to report a potential violation can find information on who to contact at the Exelon SOC website in the Who Should I cal Section on the front page and/or the Compliance Team listing available in the Helpful Information section on the left side of the page. In the event you are unable to access the information, please contact someone in Legal for further direction. (c) (d) Reporting. In accordance with the section on Reporting Violations in the Exelon Code of Business Conduct, Exelon Corporation personnel who learn of any actual or potential violation of the Standards of Conduct shall have an obligation to report such occurrence to the SOC Legal team members, the Designated Responsible Manager, the Ethics and Compliance resource line at ETHIC or the employee s supervisor. No Retaliation. No employee will be discharged, threatened or otherwise discriminated against, or retaliated against, because the employee, or a person acting on behalf of the employee, makes a good-faith disclosure concerning any actual or potential violation of the FERC Standards of Conduct. Investigation of Reported Violation. Upon notification of any potential violation, and in addition to any OASlS posting that might be required as a result of the violation, the matter will be investigated in accordance with the internal team use processes governing investigation of inquiries and incidents to determine whether, in fact, any violation of the Standards of Conduct and/or these Procedures occurred, whether any such violation was willful and/or knowing and the identities of persons involved. Disciplinary Action. Any employee who is found to have willfully violated a Standard of Conduct and/or knowingly failed to report such a violation, will be subject to discipline in accordance with the Exelon Corporation s internal disciplinary procedures FERC REGULATIONS To view the FERC Regulations, please visit the Exelon SOC website referenced in the Purpose Section above and go to the SOC Standards and Guidelines section on the left

12 side of the page. Page 12 of REFERENCES Corporate Policy Ethics, Legal and Regulatory Compliance LE-AC-2. APPROVAL /s/ Paul R. Bonney Vice President and General Counsel PECO Energy Company Exelon FERC Standards of Conduct Chief Compliance Officer Exelon Corporation Revision History: Writer Reviewer(s) FAM Approver(s) Reason Written Writer Reviewer(s) FAM Approver(s) Revision Description Revision 0 Revisions Must Be Distributed to All Personnel Original version Revision 1 Revisions Must Be Distributed to All Personnel Vilna Gaston, Transmission; Peter Thornton, Exelon BSC Legal SOC Compliance Team Paul R. Bonney Order 2004 implementation revisions Writer Reviewer(s) FAM Approver(s) Revision Description Revision 2 Revisions Must Be Distributed to All Personnel Shari Gribbin, Assistant General Counsel BSC Legal Peter Thornton; Vilna Gaston Paul Bonney Formatting and alignment for posted versions Date 01/30/2009 Revisions Must Be Distributed to All Personnel Writer Shari Gribbin, Assistant General Counsel, BSC Legal Paul Bonney; Sue Ivey; Noel Trask; Peter Thornton; John Bustard; Reviewer(s) Betty Gallagher; Monica Merino; Dave Schupp; Jim Reilly; Michelle Ross. FAM Approver(s) Paul Bonney, Exelon SOC Chief Compliance Officer Revision Description Revisions to implement 2008 Order 717