Exelon Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2024

Key Takeaways

  • Exelon reported Q1 GAAP EPS of $0.66 and adjusted EPS of $0.68, reaffirming full-year operating earnings guidance of $2.40–$2.50 per share.
  • EPS was $0.02 lower year-over-year, weighed by higher interest expense from rising rates, storm restoration costs and lower returns on certain distribution investments.
  • ComEd concluded its rehearing two months early with the Illinois Commerce Commission, secured a $150M rate increase for 2024 and filed a revised grid plan targeting a December final order for rates effective in 2025.
  • Exelon’s utilities delivered top-quartile to top-decile performance on outage frequency and duration despite significant storm activity, and the company adopted a new Serious Injury Incident Rate (SEER) to enhance safety.
  • The company raised $1.7B in corporate debt and $1.0B for its PHI entities in Q1, completing 55% of its 2024 debt needs while maintaining a 100–200 bps credit cushion and planning $1.6B in equity issuances through 2027.
AI Generated. May Contain Errors.
Earnings Conference Call
Exelon Q1 2024
00:00 / 00:00

There are 8 speakers on the call.

Operator

and welcome to Exelon's First Quarter Earnings Call. My name is Gigi, and I'll be your event specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. During the presentation, we'll have a question and answer session.

Operator

Press the escape key on your keyboard to return to your original view. And finally, should you need technical assistance, as a best practice, we suggest you first refresh your browser. If that does not resolve the issue, please click on the help option in the upper right hand corner of your screen for online troubleshooting. It is now my pleasure to turn today's program over to Andrew Plenge, Vice President of Investor Relations. The floor is yours.

Speaker 1

Thank you, Gigi, and good morning, everyone. We're pleased to have you with us for our 2024 Q1 earnings call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer and Gene Jones, Exelon's Chief Financial Officer. Other members of Exelon's senior management team are also with us today, and they will be available to answer your questions following our prepared remarks. Today's presentation, along with our earnings release and other financial information, can be found in the Investor Relations section of Exelon's website.

Speaker 1

We'd also like to remind you that today's presentation and associated earnings release materials contain forward looking statements, which are subject to risks and uncertainties. You can find the cautionary statements on these risks on Slide 2 of today's presentation or in our SEC filings. In addition, today's presentation includes references to adjusted operating earnings and other non GAAP measures. Reconciliations between these measures and the nearest equivalent GAAP measures can be found in the appendix of our presentation and in our earnings release. It is now my pleasure to turn the call over to Calvin Butler, Exelon's President and CEO.

Speaker 2

Thank you, Andrew, and happy birthday. Good morning, everyone. We appreciate you joining us for our Q1 earnings call. We continue our focus on strong execution. We have started the year with solid operational performance and are on track to meet our financial expectations.

Speaker 2

And we are making good progress on the regulatory front, having concluded ComEd's rehearing process almost 2 months ahead of schedule. But before I get into the details of today's call, I want to start by acknowledging all of the thoughtful outreach we received on the passing of my predecessor, Chris Crane. Exelon and really the energy industry wouldn't be what it is today without his leadership. All 20,000 of our employees are committed to furthering the legacy of the platform he established and the culture of operational excellence he promoted permeates all aspects of the performance you see today. Beginning with our key messages on Slide 4, we earned $0.66 per share on a GAAP basis and $0.68 per share on a non GAAP basis.

Speaker 2

We again faced well below normal weather across our jurisdictions along with significant storm activity, but having approximately 3 quarters of our revenues decoupled from load, balanced cost recovery mechanisms and strong operating earnings guidance of $2.40 to $2.50 per share. We are on track to deliver that. We also continue to perform in the top quartile operationally across all of our operating company utilities. On the regulatory front, we have continued to make good progress. As laid out in our Q4 call, a key goal this year is to improve our regulatory outlook in Illinois.

Speaker 2

We took a large step forward on March 13, when we filed our updated grid plan with the Illinois Commerce Commission. Upon hearing from the commission in December, the ComEd team got to work the day after the order and worked tirelessly with key stakeholders over the next 90 days to create an updated grid plan that addressed the commission's feedback. I am so proud of the ComEd team for their efforts to refile an updated grid plan that is thoroughly responsive to the ICC's direction and we look forward to a final order, which the commission has stated should be received by the end of the year for rates effective at the beginning of next year. And in the meantime, we are pleased that the commission approved an updated revenue requirement for ComEd in its rehearing almost 2 months ahead of the statutory deadline, which recognizes the investments made last year and the prudent expectations for continued investment in new business in Illinois. We also filed electric and gas rate cases at PECO in late March.

Speaker 2

These rate cases will support PECO's expanded investment in infrastructure and they will enhance programs and services for customers, including assistance for low income customers and support for customers embracing cleaner energy options. And lastly, the Delaware Public Service Commission approved a settlement in Delmarva Power and Light's electric distribution rate case, supporting continued investment in the reliability and resiliency of its grid. Gene will review more details around our regulatory activity shortly. Finally, we continue to reaffirm all of our long term guidance, including an expected 5% to 7% annualized operating earnings growth going forward. This will be driven by the significant investment needed to support our jurisdictions energy goals, which we are committed to doing as affordably and equitably as possible.

Speaker 2

Turning to slide 5, our streak of operational excellence continues despite the significant storm activity we saw across our territories in the Q1. In both outage frequency and outage duration, ComEd and Pepco Holdings achieved top decile performance, while BGE and PECO achieved top quartile performance. This also includes extremely high performance on the gas side of the business, where gas odor response rates were perfect at both BGE and PECO. We also maintained strong performance in our customer satisfaction scores at ComEd and PECO, with ComEd achieving top decile. In light of its lower performance at the start of the year, BGE has created several working groups to identify and address customer pain points highlighted in customer surveys and direct interactions.

Speaker 2

With 10 initiatives underway that include enhanced community outreach for energy efficiency programs, especially targeted towards limited and moderate income customers and a continuous improvement plan for new business. Results are trending favorably in the second quarter. Lastly, I'll spend some time speaking about our safety culture and performance. We achieved top desk outperformance on our metric through the Q1 at BGE and Pepco Holdings, while ComEd and PECO sit in the 2nd quartile. As many are familiar, the measure we have historically used for safety has been OSHA recordables, in line with the industry standard.

Speaker 2

This metric has been in place for decades resulting from legislation passed over 50 years ago. While OSHA recordable served as a useful starting point to drive safe behaviors and accountability, it has limitations in its ability to focus efforts on the most critical areas. While the total injury rate for the industry has declined, the most severe outcomes, fatalities have not. The power sector occupies a unique space in today's economy and the nature of our work entails significant physical risk more than most other business sectors. In our efforts to advance our capabilities as a learning organization, we have worked with the industry to adopt a more targeted and comprehensive framework to monitor high safety risk situations to harness key learnings and further engage our employees.

Speaker 2

Such a framework is better suited for our industry to drive safety performance to the next level. And this approach not only better ensures our efforts are focused on the highest potential risk, but also helps measure the success of those efforts, evaluating the presence of safeguards as opposed to the absence of injuries. In alignment with this strategy to focus on the highest risk safety situations, we are now reporting on our safety performance through the Serious Injury Incident Rate or SEER. Given this safety metric now measures serious injuries, we're more focused than ever on doing as much as we can to operate at industry leading levels and any incidents are unacceptable. Based on performance to date, ComEd is refreshing all employees on serious injury prevention tools, including recognition of their empowerment to stop work if a situation is deemed unsafe.

Speaker 2

And PECO is focused on strategies to improve safety performance around motor vehicles, including a co pilot program to identify and communicate passenger responsibilities for safe driving. I'm very proud of our operations team for its industry leadership on an issue as paramount as safety and I look forward to driving continuous improvement in this area. Jean, I'll now turn it over to you to cover our financial and regulatory

Speaker 3

update. Thank you, Calvin, and good morning, everyone. Today, I will cover our first quarter financial update and progress on our 2024 rate case schedule, including key developments in Illinois. Starting on Slide 6, we show our quarter over quarter adjusted operating earnings blocks. As Calvin mentioned, Exelon earned $0.68 per share in the Q1 of 2024 versus $0.70 in the Q1 of 2023, reflecting lower results of $0.02 per share over the same period.

Speaker 3

Earnings are lower in the Q1 relative to last year, driven primarily by $0.04 of higher interest expense due to the rise in interest rates and higher levels of debt at the holding company and at some of our utilities. Dollars 0.03 of higher restoration and damage repair costs associated with the challenging storm season across the Mid Atlantic and $0.02 of lower return on ComEd's distribution investments, including no return on its pension asset resulting from the December rate order. This was partially offset by $0.07 of higher distribution rates at our other utilities associated with incremental investments net of other expenses. Results of $6.8 per share in the Q1 represents an approximate 28% contribution of the midpoint of our projected 2024 operating earnings guidance range, which is right in line with historical patterns, but slightly behind where we expected to be for Q1. This is a direct result of the continued warmer than normal temperatures in our non decoupled jurisdictions and the challenging storm activity experienced throughout the 1st 3 months of 2024.

Speaker 3

As we look ahead to the next quarter, the relative EPS contribution is expected to be approximately 15% of the midpoint of our projected full year earnings guidance range, which contemplates the update to ComEd's revenue requirement approved by the Illinois Commerce Commission to go into effect in May bills. In combination with Q1 results, this would result in recognizing 43% of projected full year earnings, which is slightly behind how we have performed historically, but in line with our latest outlook given various new rates expected to go into effect towards the second half of the year across several jurisdictions. As we demonstrated in 2023, weather related volatility is a risk we expect to manage alongside other changes in the plan. The ComEd rehearing provides for incremental revenue relief relative to the final order, which underpinned our base case for the year. As we progress through the year, you can expect us to balance this opportunity with management of our costs and utility work plans, regulatory outcomes and weather over the remaining quarters to deliver against the expectations laid out for the year.

Speaker 3

We remain on track for full year operating earnings of $2.40 to $2.50 per share in 2024 with the goal of being at midpoint or better of that range. Lastly, we are reaffirming the fully regulated operating EPS compounded annual growth target of 5% to 7% from the 2023 guidance midpoint through 2027 with the expectation to be at the midpoint or better of that growth range. Moving to Slide 7, there are several positive developments to highlight in the ongoing regulatory matters in Illinois. Starting with the most recent, on April 18, the ICC issued an order on the rehearing of ComEd's December MYP order that reset rates, which went into effect in May, providing for an increase of $150,000,000 in 2024 relative to the December 2023 order. The order also increased the 2025 to 2027 revenue requirements over the approved revenue requirements in those years.

Speaker 3

While we are encouraged the revenue requirements on rehearing were largely uncontested and the rehearing process was completed nearly 2 months ahead of schedule, obtaining approval of the refiled grid plan remains top priority. That leads me to the next key development. After 3 months of robust stakeholder engagement to address feedback from the commission in which ComEd hosted 2 public meetings and a series of 6 workshops on 10 different topics, the revised grid plan was filed with the ICC on March 13. Based on this engagement, ComEd made a number of changes to the original grid plan, including the following. 1st, we reduced overall investment levels and bill impacts by up to 30% to better ensure affordability for customers.

Speaker 3

We also included additional affordability analysis, anchored around energy burden, which is the total home energy cost as a percentage of household income. And we demonstrated that new rates under the proposed grid plan result in electric bills at levels well less than half the threshold considered to be energy burdened. And third, we outlined in detail how every more than 40% of the benefits more than 40% of the benefits of grid modernization and clean energy have been demonstrated to support equity investment eligible communities customers. Lastly, we enhanced our support for the value of grid investments to ComEd customers through a new cost effectiveness framework. ComEd's analysis details the present value benefits of grid plan investments totaling over 7,000,000,000 as compared to the present value of the revenue requirements of $4,400,000,000 These quantifiable benefits driven largely by reliability and emissions reductions do not capture other qualitative value like cybersecurity protection, safety, customer engagement, low income customer assistance and health improvements from improved air quality.

Speaker 3

The refiled grid plan not only satisfies all statutory requirements and supports the achievement of statutory objectives, it also represents a collaboration among ComEd, commission staff and other stakeholders on implementation of the groundbreaking Climate and Equitable Jobs Act. CJ has put the State of Illinois on a path to advance ambitious plans to combat climate change, a goal that is equally important to policymakers and utilities alike. In support of these objectives, on March 7, the Commission issued an order that a procedural schedule be adopted for the grid and rate plan proceeding that will allow the commission to issue a final order in December 2024 and implement rates that will go into effect by the start of 2025. The administrative law judges subsequently adopted a proposed procedural schedule in line with this timing. ComEd also filed its final distribution formula rate reconciliation with the ICC on April 26, seeking a one time recovery of $627,000,000 in rates effective January 1, 2025.

Speaker 3

A key driver of the increase includes the impact of U. S. Treasury yields that increased in 2023 relative to the prior years. As a reminder, the formula rate construct was historical and that it set rates based on prior year expenditures. As such, in addition to collecting actual costs from 2023, trued up from 2021 2022 costs, the reconciliation reflects higher O and M expenses due in part to the inclusion of beneficial electrification and credit card convenience fees required by CJA, as well as additional investments in infrastructure to support safe, reliable service for customers and growth of new business in the state supported by its economic development policies.

Speaker 3

Storm recovery was also a material driver of the under recovery. Per statute, an order is expected on the reconciliation in December. As I mentioned, obtaining approval of ComEd's refiled grid plan is our priority. Early approval of the rehearing coupled with the adoption of a procedural schedule for an order on the refiled grid plan before the end of 2024 are the first steps to getting Illinois back on track to achieve its clean energy goals. Turning to Slide 8, as Calvin mentioned, there have been some important developments on the regulatory front for our East Coast jurisdictions since the beginning of the year.

Speaker 3

Let me begin with the most recent filing. On March 28, PECO filed both electric and gas distribution rate cases with the Pennsylvania Public Utility Commission. In its electric rate case, PECO requesting a $399,000,000 net revenue increase by 2025 to support significant investments in infrastructure to maintain and improve safety, reliability and customer service for its customers. To reduce the impacts of severe weather, PECO has proposed a storm reserve mechanism designed to defer storm cost variances to the balance sheet to be collected or refunded in the next base rate case. Additionally, PECO is seeking to recover $111,000,000 in its gas distribution rate case to support continued replacement of existing natural gas mains and service lines with new plastic pipe intended to enhance safety, improve service and reduce methane emissions.

Speaker 3

As part of the case, Tayco has requested a weather normalization adjustment designed to adjust customers' gas bills for actual versus normal weather on each individual customer bill when bills are issued. Both the proposed storm reserve and weather normalization adjustments would reduce the variability of revenues relative to our costs and at the same time benefit customers by ensuring that they only pay for actual storm costs and by making their gas bills more predictable. Further strengthening the experience for our customers are the planned infrastructure investments to modernize the electric grid, make it stronger, more weather resistant and less vulnerable to storm damage. Despite the impacts of several severe storms in 2023, PECO customers experienced the lowest power outage in company history, with 86% of PECO customers experiencing 0 or one outage in 2023. PECO's investment plans outlined in the electric and gas rate cases are designed to build upon the strong foundation, delivering enhanced reliability performance to its customers.

Speaker 3

Orders are expected from the PAPUC for both rate cases before the end of 2024. On April 18, the Delaware Public Service Commission unanimously approved Delmarva Power settlement agreement with modification for its electric distribution rate case. The settlement was for a $42,000,000 gross increase in distribution rates premised on an ROE of 9.6%. The decision improves recovery of investments in infrastructure to mean safety and reliability and improve service for our customers. It also helps better align revenues with costs, specifically high storm expenses through a newly established rider that allows for deferral of storms exceeding 5,000,000 As permitted by Delaware law, Delmarva Power implemented full allowable rates on July 15, 2023 subject to refund.

Speaker 3

I'll close with an update on the progress in PESCO's electric distribution rate cases in Washington DC and Maryland. The procedural schedule in Pepco DC's multi year rate plan filing has been adjusted to accommodate an intervenor's request for additional time to review the rebuttal testimony from PESCO. PESCO anticipates DC's commission to issue a subsequent order with an updated hearing and briefing schedule in the coming weeks. A final order is expected by the Q3. Additionally, in Maryland, evidentiary hearings were conducted and brief filed in March April, respectively, as part of Pepco's pending multiyear electric rate case.

Speaker 3

The hearings allowed Pepco Maryland the opportunity to demonstrate the benefits afforded by a multiyear rate plan relative to traditional rate making. Multi year plans in Maryland have enabled investments necessary to improve reliability and customer service, modernize the distribution system and support state environmental goals that have served our customers and communities well. We continue to believe Pepco's proposed investment plans are well suited for Maryland to meet its aggressive clean energy goals in an affordable manner. A final order is expected from the commission by June 10 per statue. More details on the rate cases can be found on Slides 19 through 29 of the appendix.

Speaker 3

I will conclude with a review of our balance sheet activity on Slide 9. As you heard on our last earnings call, we project to continue to have approximately 100 basis points of cushion on average for our consolidated corporate credit metrics above the threshold specified by the agencies. And while we continue to await specific guidance and implementation of the corporate alternative minimum tax, I'll remind you that our plan continues to incorporate the assumption that the regulations will not allow for repairs. If implemented in a way that mitigates the cash impact, we'd expect an increase of approximately 50 basis points to our consolidated credit metrics on average over the plan, putting us more on the higher end of our targeted 100 to 200 basis points of cushion. From a debt financing perspective, we successfully raised 1,700,000,000 dollars at corporate and approximately $1,000,000,000 for the PHI entities in the Q1.

Speaker 3

To date, we have completed 55% of our planned 20 24 long term debt financing needs, including all of our corporate needs, positioning us well for any market volatility in the balance of the year. As a reminder, we continue the pre assurance hedging program that was initiated in 2022 to manage the ongoing interest rate volatility. In addition, we continuously monitor the capital markets and regularly assess our plans for future issuance timing, sizing, tenor and trancheing strategy to ensure we achieve optimal outcomes. The strong investor demand for our debt offerings continues to be a testament to the strength of our balance sheet and to our value proposition as a premier T and D utility with a low risk platform. To reiterate our equity needs, there has been no change in our guidance to issue $1,600,000,000 over the 2024 to 2027 period to fund the estimated $34,500,000,000 capital plan in a balanced manner.

Speaker 3

Specifically, we expect to issue $150,000,000 of equity at the holding company in 2024 and the balance of approximately $475,000,000 annually over 2025 through 2027. We will continue to update you as we make progress on that plan. Thank you. I'll now turn the call back to Calvin for his closing remarks.

Speaker 2

Thank you, Gene. I will close on Slide 10 by reminding you of your 2024 of our 2024 business priorities and commitments and the unique power of our platform. As always, we start with operational excellence, providing safe and reliable power to our customers as the demands on the grid continue to increase. We remain committed to achieving regulatory outcomes that adequately balanced stakeholder interests, supporting the necessary progress on the energy transformation. This includes completing the ComEd grid plan process in a way that allows sufficient investment in the grid to support Illinois Energy goals.

Speaker 2

We are focused on delivering on all of our financial commitments for the year, investing $7,400,000,000 of capital expenditures, while earning a consolidated ROE of 9% to 10% and delivering operating earnings per share of $2.40 to $2.50 per share. And we expect to achieve this while executing on our financing plan to maintain a strong balance sheet. We continue our strong advocacy for equitable and balanced energy transition, taking advantage of the unprecedented federal support through IIJA for investment across the ecosystem, while continuing our industry leading efforts to strengthen our communities. As you may have seen, we are proud to partner with the Cal Ripken Senior Foundation to open 81 STEM centers across various cities we serve, including Atlantic City, Chicago, Philadelphia, Wilmington and Washington DC. We opened the very first of those in April in Lansdowne, Maryland and we are excited to give students an opportunity to gain hands on knowledge, skills and confidence in areas like coding and engineering, which are indispensable in the energy industry.

Speaker 2

We also continue to focus on maintaining a long term O and M trajectory that supports customer affordability, while relentlessly pursuing opportunities to operate more efficiently as OneExelon. Executing against our established priorities and commitments year in and year out is what you would expect of a premier utility. In many ways, those priorities and commitments aren't new. The foundation of operational excellence and a commitment to values that support the diverse communities we have, the privilege and responsibility to serve was established long ago by Chris. He demanded continuous improvement from the businesses he ran while relentlessly advocating for sensible and long sided policies.

Speaker 2

And he was an equally strong champion of diversity and inclusion, including industry leading efforts to advance equitable recruitment, retention and promotion of women, along with award winning programs in workforce development and supplier diversity. Indeed, he laid the foundation for the STEM Academy initiative that I highlighted moments ago. We will all miss Chris. And we look forward to honoring his legacy by pushing Exelon to lead the energy transformation with the platform and culture that he helped establish. Gigi, that concludes our prepared remarks and we welcome any questions from the audience.

Operator

Thank you. Our first question comes from the line of Jeremy Tonet from JPMorgan Securities LLC. Good

Speaker 1

morning, Jeremy. Good morning.

Speaker 4

This is actually Aidan Kelly on for Jeremy. Just looking at Pennsylvania, there appears to be an abundance of natural gas growth potential in the Marcellus and Utica if incremental demand materializes. Do you see this backdrop in ample reserve margin supporting data center development in the state?

Speaker 2

The short answer is yes. And I would tell you that we continue to see significant activity around high density low growth in general. As we discussed in our as recently as our Q4 2023 earnings call, we have high probability of low growth, not only in Illinois, but Pennsylvania. And I have with me Dave Velasquez and both Mike and Accenso, who can provide you further color. But the short answer is yes, and I'll turn it over to them to see if they want to add anything.

Speaker 5

This is Dave. Just to add that we have continued to see different businesses, including some interest from data centers in the PECO territory. And we have the infrastructure to be able to support that both on the generation side and also have the transmission infrastructure, again, would have to be reinforced in certain places to be able to serve those loads.

Speaker 2

Yes. And I would add, we've got we have a governor that's very aggressive around economic development. We're an energy exporter in Pennsylvania. So the ability to utilize that for all sorts of growth, I would say in addition to data centers, we're seeing electrification, we're seeing development around the South Philadelphia area. So lots of opportunities for growth in all sorts of electrification.

Speaker 2

And the key to your question for me is that the utilities in all of our jurisdictions, we will be a partner in economic development identifying areas and opportunities to put the assets of our jurisdictions in play. Thank you for the question.

Speaker 4

Yes, that's super helpful. And then maybe just one follow-up shifting to the PECO rate cases. Could you just talk more about the prospects of receiving approval for both the storm mechanism and weather normalization adjustment? Just curious like have these been used before? Are they a first time ask in front of the PUC?

Speaker 4

And just like any points of contention you would highlight there?

Speaker 2

Great question and Dave is going to take that.

Speaker 5

Now both those mechanisms have been used or are being used. So if you think of the weather normalization on the gas, 4 of the 6 gas utilities already have a weather normalization adjustment and 1 of the 2 that doesn't has applied as well for a weather normalization adjustment. And then on the storm reserve, one of the major electric companies in PA already has a storm reserve account similar to us and another of the major utilities for storms uses kind of a rider, which is kind of like an automatic add to the bill. So both are mechanisms that are known and have been approved in the past in PA.

Speaker 4

That's clear. Thanks. I'll leave it there.

Speaker 2

Thank you.

Operator

Thank you. Our last question comes from the line of Carlee Davenport from Goldman Sachs.

Speaker 2

Good morning, Carly.

Speaker 6

Hey, Carly. Good morning. Thanks so much for taking the questions. Just wanted to ask on ComEd, just as you think about getting the timing to getting clarity around the grid plan refiling, obviously, the rehearing was resolved sooner than anticipated as you highlighted. Is there any potential for that re filing resolution to also come sooner?

Speaker 6

Do you think it's really a December event?

Speaker 2

Yes, I do Carly. This is Calvin. I do believe it's a December event. We continue to work the process. And I would tell you the fact that we did get the other ruling prior to the statutory deadline was very was a positive outcome, but we are work continue to work with all the stakeholders to drive this process to conclusion.

Speaker 2

And if we get those rates into effect prior to the beginning of at the beginning of the next year, that lays the foundation for us to continue to work with the Illinois Commission and government to get to achieve the results they want out of the Climate Equitable and Jobs Act. But I do not see it ending sooner than that. Gil, anything

Speaker 7

you'd like to add? No, I think the just a couple of important things to note on its own accord, the ICC voted on an interim order to say that they will decide on this by December and subsequent to that, the administrative law judge on April 11 set forth the procedural schedule to guide it for a decision in December of this year.

Speaker 6

Great. Thank you for that. And then know that you've gotten a lot of the year's financing needs done during the Q1, but just as you think about the rest of the year there, do you expect there to be any sort of impact relative to your base plan just given the move that we've seen in rates here year to date?

Speaker 3

Hey, Carly. No, I think, getting that

Speaker 2

corporate financing done was important.

Speaker 3

And we had also pre issuance hedge a significant portion of that as we always do heading into the year. And that's why as we give you the sensitivity on an open year, it's about a penny absent any hedges. So we've really we work hard leading into the year to mitigate it and then getting it done early in the year leaves any amount that isn't hedged sort of takes that risk off the table. The other thing I'll note is coming out of the separation, we were holding a little bit more short term debt than we normally do. As part of that financing in the Q1, we termed out all but $500,000,000 So that's all we carry in short term debt and that's typically what we would normally carry.

Speaker 3

So also completed that. And then in our operating companies for the most part interest expenses are covered whether immediately through sort of reconciliations or over time as we recapture them in new rate cases. So it's really the corporate exposure that we continue to manage.

Speaker 6

Great. Thanks so much for the time.

Speaker 2

Thank you, Carla.

Operator

Thank you. I would now like to turn the conference back over to Exelon's President and CEO, Calvin Butler for closing remarks.

Speaker 2

Let me just always say thank you for joining today and for your interest in Exelon. Always appreciated you taking the time and asking questions We look forward to connecting with all of you over the next several months. And with that, Gigi, that concludes today's call.

Powered by Quartr