CONSTELLATION ENERGY GENERATION LLC

6. Government Assistance

Beginning in 2024, our nuclear units are eligible for a PTC extending through 2032. The nuclear PTC provides a transferable credit up to $15 per MWh (a base credit of $3 per MWh with a five times multiplier provided certain prevailing wage requirements are met) and is subject to phase-out when annual gross receipts are between $25.00 per MWh and $43.75 per MWh and $26.00 per MWh and $44.75 per MWh for 2024 and 2025, respectively. We evaluated and expect to meet the annual prevailing wage requirements at all of our nuclear units and are eligible for the five times multiplier. Both the amount of the PTC and the gross receipts thresholds adjust for inflation annually through the duration of the program based on the GDP price deflator for the preceding calendar year. The benefits of the PTC may be realized through a credit against our federal income taxes or transferred via sale to an unrelated party. In July 2025, Congress passed the OBBBA which affirmed the provisions of the nuclear PTC with no material changes.

For the three and nine months ended September 30, 2025, our Consolidated Statements of Operations and Comprehensive Income included an estimated nuclear PTC benefit in Operating revenues of approximately $175 million and $220 million, respectively. For the three and nine months ended September 30, 2024, our Consolidated Statements of Operations and Comprehensive Income included an estimated nuclear PTC benefit in Operating revenues of approximately $670 million and $1,380 million, respectively. Our estimates require the exercise of judgment in determining the amount of nuclear PTC expected for each of our nuclear units. The nuclear PTC continues to be the subject of additional guidance, from the U.S. Treasury and IRS, and may materially impact the total amount of the benefits we receive.

Note 6 — Government Assistance

Nuclear PTCs are initially recorded within Other deferred debits and other assets within the Consolidated Balance Sheets and reclassified as a reduction to Accounts payable and accrued expenses when used to reduce our federal income tax payable, or an increase in Cash and cash equivalents or Other current assets when sold, depending on the specific payment terms of each contract.

There were no agreements for sales of nuclear PTCs executed in 2025. During the third quarter of 2024, we executed agreements for the sale of $1 billion of nuclear PTCs to unaffiliated third parties at a nominal discount, with approximately $670 million of cash proceeds received upon sale (included within Cash flows from operating activities in our Consolidated Statements of Cash Flows) and approximately $195 million received in the fourth quarter of 2024. Cash received in 2025 on sale agreements executed in 2024 was approximately $95 million. As of September 30, 2025, our Consolidated Balance Sheets reflect approximately $125 million of nuclear PTCs within Other deferred debits and other assets. As of December 31, 2024, our Consolidated Balance Sheets reflected $185 million of estimated nuclear PTCs within Other deferred debits and other assets, and $95 million within Other current assets. Additionally, as of September 30, 2025 and December 31, 2024, we recognized a reduction to Accounts payable and accrued expenses in our Consolidated Balance Sheets of $270 million and $150 million, respectively, for estimated nuclear PTCs that we have utilized as a credit against our current federal income taxes payable.

Many of the state-sponsored programs providing compensation for the emissions-free attributes of generation from certain of our nuclear units include contractual or other provisions that require us to refund that compensation up to the amount of the nuclear PTC received or pass through the entirety of the nuclear PTC received. As of September 30, 2025 and December 31, 2024, we have recognized approximately $1,140 million and $1,030 million, respectively, of estimated payables within Other deferred credits and other liabilities, Accounts payable and accrued expenses or as offsets to Customer accounts receivable in our Consolidated Balance Sheets associated with programs requiring refunds or pass through of the nuclear PTC. During the three and nine months ended September 30, 2025, we recognized a reduction to net operating revenue of approximately $220 million and $30 million, respectively, associated with these programs in our Consolidated Statements of Operations and Comprehensive Income, compared to a reduction to net operating revenue of approximately $115 million and increase to net operating revenue (pre-tax) of approximately $10 million during the three and nine months ended September 30, 2024, respectively. As with the actual amount of the nuclear PTC earned, which cannot be determined until after the end of the calendar year, any change resulting from additional guidance received may materially impact amounts due under state-sponsored programs.