The following table summarizes the price and volume factors contributing to the $1,243 million increase in generation revenues in 2022, as compared to 2021: Source of Change in Generation Revenues Increase (Decrease) (In millions) Retail: Change in sales volumes $ 466 Change in prices 645 1,111 Wholesale: Change in sales volumes (15) Change in prices 184 Capacity revenue (37) 132 Change in Generation Revenues $ 1,243 The increase in retail generation sales volumes was primarily due to higher weather-related usage and decreased customer shopping in New Jersey, Ohio and Pennsylvania. Total generation provided by alternative suppliers as a percentage of total MWH deliveries in 2022, as compared to 2021, decreased to 41% from 46% in New Jersey, to 78% from 86% in Ohio, and to 60% from 63% in Pennsylvania. The increase in retail generation prices primarily resulted from higher non-shopping generation auction rates. Retail generation sales, excluding those in West Virginia, have no material impact to earnings. Wholesale generation revenues increased $132 million in 2022, as compared to 2021, primarily due to an increase in spot market energy prices, partially offset by lower capacity revenues and sales volumes. The difference between current wholesale generation revenues and certain energy costs incurred are deferred for future recovery or refund, with no material impact to current period earnings. Operating Expenses — Total operating expenses increased $1,167 million primarily due to the following: • Fuel expense increased $249 million in 2022, as compared to 2021, primarily due to higher unit costs and increased generation output. Due to the ENEC, fuel expense has no material impact on current earnings. • Purchased power costs increased $896 million in 2022, as compared to 2021, primarily due to higher market prices and increased volumes as described above. Source of Change in Purchased Power Increase (Decrease) (In millions) Purchases Change due to unit costs $ 611 Change due to volumes 314 925 Capacity expense (29) Change in Purchased Power Costs $ 896 39
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