Exelon Q1 2025 Earnings Report

Exelon EPS Results

• Actual EPS: $0.92
• Consensus EPS: $0.86
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: $0.68

Exelon Revenue Results

• Actual Revenue: $6.71 billion
• Expected Revenue: $6.30 billion
• Beat/Miss: Beat by +$410.40 million
• YoY Revenue Growth: +11.10%

Exelon Announcement Details

• Quarter: Q1 2025
• Date: 5/1/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 1, 2025
• Conference Call Time: 10:00AM ET

Exelon (NASDAQ:EXC), a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

Exelon Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Hello, and welcome to Exelon's first quarter earnings call. My name is Latif, and I will 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]

You can ask questions by pressing star, one, one on your telephone keypad. If you would like to view the presentation in a full screen view, click the full screen button by hovering your computer mouse cursor over the PowerPoint screen. 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 corner of your screen for online troubleshooting.

[Operator]

It is now my pleasure to turn today's program over to Andrew Plinch, Vice President of Investor Relations. The floor is yours.

[Andrew Plenge, Investor Relations at Exelon]

Thank you, Latif. Good morning, everyone. Thank you for joining us for our twenty twenty five first quarter 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.

[Andrew Plenge, Investor Relations at Exelon]

Today's presentation, along with our earnings release and other financial information, can be found in the Investor Relations section of Exelon's website. We would also like to remind you that today's presentation and the 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 two 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.

[Andrew Plenge, Investor Relations at Exelon]

It is now my pleasure to turn the call over to Calvin Ballard, Exelon's President and CEO.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you, Andrew, and good morning, everyone. We appreciate you joining us for our first quarter earnings call. 2025 is off to a good start. We're reporting operating earnings of $0.92 per share, representing strong growth over the first quarter of twenty twenty four and ahead of expectations, which keeps us on track to deliver on our 2025 operating earnings guidance range. Reliability and safety performance continues to be very strong as well, despite a number of high wind events throughout the winter months that challenged our operators who remain the best in the business.

[Calvin Butler, President and Chief Executive Officer at Exelon]

ComEd and Pepco Holdings are projecting top decile auto frequency and duration performance, while VGE and PECO are in top quartile. We have a relatively lower level of base rate case activity this year. And our two open rate cases remain on track at Atlantic City Electric and Delmarva Power, which Jean will cover in her remarks. We have also been actively engaging in a variety of legislative and regulatory reforms to ensure energy policy keeps pace with the industry and broader economic trends. Ensuring reliable and affordable energy for all customers is critical to our jurisdictions and the nation as a whole as they work to realize their economic and energy policy ambitions.

[Calvin Butler, President and Chief Executive Officer at Exelon]

The first quarter of twenty twenty five has already seen great progress on that front. In Maryland, the legislature passed several energy bills that take important steps around energy security, including prescribing a competitive process to procure new dispatchable resources and capacity while providing a path for alternative approaches should they be needed. They also lay out ambitious goals around developing battery storage at both the distribution and transmission level, offering us and developers further opportunity to shore up the state's energy supply. And the state also outlined for the first time in law the recognition of multi year plan constructs prompting a robust discussion that highlighted its merits of increased transparency, planning, and alignment while giving stakeholders a greater say in how much and where their dollars should be invested. We now look to the Commission to conclude its multi year plan lessons learned process so we can move the state forward with confidence in meeting its energy and economic goals.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Our other states are also considering legislation to address elements of energy policy, including a focus on the energy security and cost allocation implications of large load growth. We expect to have more to share on those sessions as the year advances. There has been significant activity at the regional and federal level as well. First, PJM has made considerable progress to address suboptimal outcomes in its capacity market construct. We have been pleased to see that FERC approved a number of solutions put forward by PJM via two zero five filings, including its temporary price collar and refinement to its deactivation process.

[Calvin Butler, President and Chief Executive Officer at Exelon]

We are also encouraged to see the response to its reliability response initiative, which has generated applications worth almost 27 gigawatts worth of nameplate capacity. In February, FERC initiated a two zero six proceeding requesting that PJM and its transmission owners investigate whether the tariff remains just and reasonable in rates, terms, and conditions of service that apply to co located arrangements. We are pleased with the leadership shown by FERC in working to resolve this issue in a timely manner, along with PJM's efforts to meet the aggressive timeline to address a very complicated topic. We're also encouraged by the consensus that PJM transmission owners were able to reach on a complex top in such a short period. And we look forward to assisting the industry in aligning on a policy that equitably supports the national crisis critical issues of energy security and economic development.

[Calvin Butler, President and Chief Executive Officer at Exelon]

More details on the progress we're making across these forms can be found in our appendix. Maintaining momentum across these policy arenas is key to meeting the task ahead of us, and we see no abatement in our opportunity for new large loads in our territories. The 17 gigawatt pipeline of opportunity that we communicated in our fourth quarter earnings call remains fully intact. We are also conducting advanced studies on an additional 16 gigawatts of high density load, which we anticipate will result in significant incremental commitments from customers upon aligning on investment needs and timing. We continue to focus on ways to enhance our process to ensure we are offering unparalleled service to new customers in our territories, while continuing to ensure existing customers are protected and benefit from the new load.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And the pace of new business seeking to connect to the grid makes it even more critical for stakeholders to collaborate actively and with urgency on policy that balances the common goals of reliability, affordability, and progress toward a cleaner energy future. We look forward to providing further updates on our new business prospects in future quarters. As a reminder, this is just one of the elements that contributes to our visibility into 10,000,000,000 to $15,000,000,000 of transmission opportunity beyond our plan. As we laid out in our fourth quarter call, the need for investment in our high voltage network is real and growing. We are proud to have Karim Kuzami now leading those efforts with his extensive background in commercial, regulatory, and operational roles ideally suited to industry tailwinds and our unique transmission assets and capabilities.

[Calvin Butler, President and Chief Executive Officer at Exelon]

I also want to congratulate Tamla Olivier for her promotion to VGE President and CEO. Her effectiveness leading increasingly large organizations during her fifteen year career here will continue to ensure VGE's two million electric and gas customers receive high value service. Congratulations to you both. Lastly, I'll remind you of our expectations for our four year outlook. We reaffirm our plan to invest $38,000,000,000 over the next four years for the benefit of our customers that will drive 7.4% rate base growth and be financed with a balanced mix of debt and equity.

[Calvin Butler, President and Chief Executive Officer at Exelon]

In fact, we have been able to de risk a large portion of our financing needs for the year with all of our planned corporate debt issuances completed and 60% of our $700,000,000 annualized equity need priced. By earning a fair return on that investment plan, we expect to deliver annualized earnings growth of 5% to 7% through 2028, generating consistent growth and long term value. I'll now turn it to Jean to discuss our financial performance and provide further details on our rate case activity.

[Jeanne Jones, Executive VP & CFO at Exelon]

Thank you, Calvin, and good morning, everyone. Today I will cover our first quarter financial update and progress on our 2025 regulatory activity. Starting on slide five, we present our quarter over quarter adjusted operating earnings block. Exelon earned $0.92 per share in the first quarter of twenty twenty five compared to $0.68 per share in the same period in 2024, reflecting higher results of $0.24 per share over the same period. Earnings are higher in the first quarter relative to the same period last year, primarily driven by $0.14 of new distribution and transmission rates in effect across our jurisdictions, 3¢ of favorable weather at PICO, and 2¢ of tax repairs timing partially offset by 3¢ of higher interest expense due to higher levels of debt at increased interest rates.

[Jeanne Jones, Executive VP & CFO at Exelon]

As anticipated, results are also impacted by timing at ComEd, which totaled $09 for the quarter and includes $02 due to the lower revenue recognition in 2024 as we awaited updated rates from the rehearing order and eventual approval of our refiled grid plan. The remaining $07 is due to year over year revenue shaping and O and M timing, including higher storm and IT project related spend in the first quarter of 'twenty four. We expect the revenue shaping and O and M timing to reverse in the balance of the year. These results are slightly ahead of our indications on the fourth quarter call, primarily due to the timing of O and M as well as timing of tax repairs. As we look ahead, our second quarter earnings are expected to be approximately 14% of the mid midpoint of our projected full year earnings guidance range, which contemplates partial reversal of the ComEd timing along with normal weather and storm activity.

[Jeanne Jones, Executive VP & CFO at Exelon]

In combination with Q1 results, this would result in recognizing 48% of projected full year earnings in the first half of the year, consistent with seasonal shaping in prior years, allowing us to remain on track for full year operating earnings of $2.64 to $2.74 per share, with the goal to be at the midpoint or better. Finally, we are reaffirming our annualized earnings growth rate of 5% to 7% through 2028, with the expectation to be at the midpoint or better of that range. Turning to slide six, we currently have two base rate cases open at Pepco Holdings. The Delmarva Power Gas Distribution Rate Case filed last September remains on track, with interim rates which went into effect on April 20 subject to refund. The rate case seeks to recover continued reliability investments, such as aging piping upgrades and upgrades to its LNG plant, which helps protect customers from supply price volatility during peak periods.

[Jeanne Jones, Executive VP & CFO at Exelon]

It will be open for intervenor and rebuttal testimony in July and September before evidentiary hearings are convened in November. An order is expected in the first quarter of twenty twenty six. Our second open base rate case is at Atlantic City Electric, where we are seeking recovery of grid improvement and modernization efforts in line with New Jersey's Energy Master Plan and the Clean Energy Act. The proposed procedural schedule was approved by the judge in March, with settlement discussions set for late April to early May. Evidentiary hearings are scheduled to begin in late July and continue into early August, with an order expected by the end of the year.

[Jeanne Jones, Executive VP & CFO at Exelon]

ACE is also anticipated to implement interim rates on August 21, subject to refund. In Maryland, we continue to work to close out our final reconciliations from the first BGE and Pepco Maryland multi year plans, and remain engaged in the lessons learned process as we approach our next rate case filings. We are encouraged that the legislature recognize the multi year construct in the recently passed Next Generation Act. This legislation provides greater direction and alignment between all stakeholders on the future investments needed to support our customers. Now that we are on our second NYPFEGE and our fourth one in Maryland, we feel better prepared to support a multi year investment plan without a reconciliation, and we look forward to working with the Commission and our stakeholders to continue to demonstrate customer benefits in future multi year plan filings.

[Jeanne Jones, Executive VP & CFO at Exelon]

We steadfastly believe that forward looking plans are the most planful and cost effective way to ensure the reliability and resiliency of the system while meeting the state's energy and economic goals. We await the Commission's comments on the lessons learned to fully ensure our next filing aligns with the PSC's recommendations that accommodate the new legislation and the lessons learned proceeding. Finally, in Illinois, ComEd filed its annual performance evaluation and request for annual adjustment under 2024 base distribution rates on April 29. The requested adjustment of $268,000,000 is primarily driven by operating under lower revenue requirements throughout 2024 relative to the final approved order, and it includes the revenue impact of achieving a performance metrics adder of over five basis points. Comma's actual revenue requirement in 2024 closely aligns with the final revenue requirement approved in December 2024.

[Jeanne Jones, Executive VP & CFO at Exelon]

Direct and rebuttal testimony is expected to occur throughout the summer at a hearing and an ALJ proposed order in the fall. A final order on comments reconciliation is expected in December. Turning to slide seven, I will conclude with a review of our balance sheet activity. From a financing perspective, we took advantage of the favorable market conditions in the first quarter and made substantial progress on our 2025 capital needs. First, we have completed nearly 50% of our planned long term debt financing transactions, having successfully raised $650,000,000 for the Pepco Holdings utilities and all of our $2,000,000,000 of debt financing needs at corporate, including $1,000,000,000 of hybrid debt.

[Jeanne Jones, Executive VP & CFO at Exelon]

The strong investor demand and attractive pricing for our debt securities continue to be a testament to the strength of our balance sheet and to our value proposition, positioning us well as we seek to finance the energy transformation in the most cost effective way for our customers and our investors. We also continue to execute on our pre issuance hedging strategy implemented in 2022 to further protect us from interest rate volatility. As it pertains to equity, as a reminder, in our last guidance update, we estimated we would finance 40% of our incremental capital investment with equity, resulting in total equity needs of $2,800,000,000 over the four year plan and applying approximately $700,000,000 of equity on an annual basis. For 2025, we've successfully de risked nearly 60% of our annualized needs via our ATM, issuing approximately $175,000,000 worth of shares and pricing an additional $250,000,000 under forward agreements for issuance later in the year. As you heard on our last earnings call, we project to continue to have 100 to 200 basis points of financial flexibility on average over the plan for our consolidated corporate metrics above the Moody's downgrade threshold of 12%, approaching 14% at the end of our guidance period.

[Jeanne Jones, Executive VP & CFO at Exelon]

We continue to advocate for language that incorporates repairs for calculating the corporate alternative minimum tax, and we are encouraged by the recent bipartisan legislation introduced in the U. S. House to advocate for this change, which will lower energy costs for our customers. However, we will remind you that our plan assumes that the final regulations will not allow for repairs. Favorably addressing repairs in the minimum tax calculation would result in an increase of approximately 50 basis points to our consolidated metrics on average over the plan.

[Jeanne Jones, Executive VP & CFO at Exelon]

Thank you. I'll now turn the call back to Calvin for his closing remarks.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you, Gene. In closing on slide eight, I'll reconfirm our focus as we look to add another year of execution to our track record as a premier utility. Our talented and dedicated employees will continue to deliver operational excellence, investing $9,100,000,000 in the system to deliver high reliability service to our customers. We are also constantly working to find the right rate making mechanisms that allow us to fulfill our responsibility and privilege to serve the 10,700,000 customers that count on us for their energy needs. Those mechanisms need to provide adequate compensation for our investors while allowing for the critical feedback and collaboration necessary to ensure we are only investing where our jurisdictions want us to invest.

[Calvin Butler, President and Chief Executive Officer at Exelon]

We recognize some of our customers are broadly struggling with economic uncertainty, as well as we all navigate updated tariff policies, federal budget reprioritization, and increased energy supply costs. Weather extremes like our first cold winter in years only exasperate those pressures. We do feel that we are relatively well positioned to protect our customers as it pertains to the proposed tariff policy. With approximately 90% of our supply sourced domestically, we have estimated the impact to be around 1.5% of our four year capital and O and M investment plan before any mitigating efforts with the majority impacting capital. The impacts will also be delayed as a result of our inventory levels and long lead time requirements.

[Calvin Butler, President and Chief Executive Officer at Exelon]

With our size, scale, and deconcentrated investment plan and the culture of cost discipline, we expect to be able to manage any tariff related impacts, highlighting the value of Exelon's platform. And while we are advocating for the continuance of the tax credits under the IRA law, we are not directly exposed to any reductions in those nor to any transferability restrictions. As Jean mentioned, we remain committed that we will be able to improve our position with respect to the corporate alternative minimum tax associated with that law. We will continue to leverage a variety of tools to assist customers, including deferred payment plans as well as suspended disconnections and associated fees, And we are advertising budget billing options throughout community forums in community engagement events. Additionally, our policy advocacy has focused on solutions that enable PJM and our states to acquire new power supply as cost effectively as possible while serving large new loads equitably.

[Calvin Butler, President and Chief Executive Officer at Exelon]

As I noted earlier, we have made good progress thus far in legislative and regulatory forms. Finally, we also stress the degree to which we try and maximize the dollars that we need to invest in the grid to serve our customers. We focus on forward looking recovery mechanisms because it allows us to collaboratively determine where best to invest their dollar and do it efficiently. In fact, over the last five years, over 98% of the net profits we earn at our utilities, all of which are established and reviewed through rigorous regulatory proceedings, have been reinvested have been reinvested back into the business for our customers. And for every $1,000,000 of capital investment we make at our utilities, it supports eight jobs or 1,600,000 in economic output.

[Calvin Butler, President and Chief Executive Officer at Exelon]

So customer affordability continues to be a big part of our focus this year, which complements our efforts to drive economic development to further benefit our jurisdictions. And of course, as always, you can count on our continued discipline in executing our financial plan, earning a consolidated ROE of nine to 10%, maintaining a strong balance sheet, and reporting earnings within our guidance range of $2.64 to $2.74 per share. We look forward to making 2025, our twenty fifth anniversary of Exelon, another year where you can count on us to deliver consistent growth and long term value. Latif, we can now open it up for any questions.

[Operator]

Our first question comes from the line of Nick Campanella of Barclays. Please go ahead, Nick.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Good morning, Nick. Hey, Nick.

[Nicholas Campanella, Director at Barclays]

Hey, good morning, everyone. Hope everyone's well. So I guess just you have this new Maryland legislation that's out there. It does prohibit reconciliations after Jan one twenty five. And I'm just wondering if you can maybe kind of talk about how you think that can impact the outcomes in the BGE or the Pepco reconciliations.

[Nicholas Campanella, Director at Barclays]

And if an order were to kind of go against you there, is the guidance resilient to that? And maybe you can give some more color on that. Thanks.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Yeah, Nick. Let me just say this. First, thank you for the question. And to your direct point, I think Jean hit it well, is that we do expect the reconciliation to come forward in short order. And our plan is solidified and ready to operate as we've considered all alternatives.

[Calvin Butler, President and Chief Executive Officer at Exelon]

There's nothing on here that we believe that would prevent us from meeting our objectives. That's one. But let me turn it also, Nick, to where we see Maryland going. As you know better than most that Maryland this year had legislation passed. And I think it's important to focus on five key areas I'll point out.

[Calvin Butler, President and Chief Executive Officer at Exelon]

One, for the first time, it provides language that NYP can be approved. And as you talked about, it doesn't have reconciliations. But we've kind of gone through this process a couple of times now. Think Gene said we're now fourth one in Maryland. So we know how to build this up and know how to work collaboratively with the stakeholders to ensure we spend on the right things.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And I'm very comfortable that we will meet the budget for future NYPs. Second, specific language in the legislation this year stated on the large load colocation issue, which was very important. It has provisions in there that requires that any load that for infrastructure upgrades and other reasonable costs behind the meter, it's balanced and it does not shift the cost to other customers on the system. That's very important. And that would apply to any load over 100 megawatts with 80% or greater capacity factor.

[Calvin Butler, President and Chief Executive Officer at Exelon]

So that's just very important. And it's important to note that we continue to drive this on an affordability front within our jurisdictions, and Maryland has codified it. The next piece is that battery storage was a big item within the Maryland legislation. It directed that the Public Service Commission establish and solicit 150 megawatts of distribution battery storage from each electric utility with a target of 70% owned by the utility and 30% owned by third parties. It also requires that the PSC start a procurement solicitation of 1.6 gigawatts of transmission battery storage by January 26.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Again, all indications that they recognize the issues and they're driving the state of Maryland forward. And I just want to also give kudos and just acknowledge the two new commissioners that have been appointed. They have a strong track record of regulatory experience. And I think they will continue to be vital voices in Maryland as we move forward. So long answer, but to your direct question, we are not concerned about the reconciliation pullout of the legislation.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And we feel very confident that we will work with the state to meet the needs going forward.

[Nicholas Campanella, Director at Barclays]

Hey, thanks for all that color. I appreciate that. And then maybe on the FERC two zero six, obviously, there's been some requests to settle by the power companies, and that was put forward a week or two ago. And I'm just curious what your response would be as a T and D. Do you think or are you open to resolving this co location issue via settlement perhaps?

[Nicholas Campanella, Director at Barclays]

And does this kind of need to go the full distance at FERC? Any comments there would be helpful. Thanks.

[Calvin Butler, President and Chief Executive Officer at Exelon]

You, Nick. I would say we're always open to discussions and have been from the very beginning. And that hasn't changed. We continue to move forward as a T and D to meet our customers' expectations. We talk about the 17 gigawatts and another 16 that we're considering.

[Calvin Butler, President and Chief Executive Officer at Exelon]

So our process is continuing. I think the transmission owners coming together and putting forth this statement, EEI putting a transmission owner unified statement to FERC goes a long way. So our principles have not changed one bit, Nick. And we are right there. And in having discussions with the IPPs, we're open.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And we're open to make sure that we get this done quickly and equitably for all of our customers. And that has not changed.

[Nicholas Campanella, Director at Barclays]

Thank you.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Welcome. Thank you.

[Operator]

Thank you. Our next question comes from the line of James Kennedy of Guggenheim Partners. Your line is open, James.

[James Kennedy, Vice President at Guggenheim Partners]

Hello, Good morning. So one of your peers has been talking recently about the introduction of legislation in Pennsylvania to support potentially regulated generation. I guess, what's your degree of involvement in that process And any views on reg generation versus potential long term PPAs and other mechanisms? Thanks.

[Calvin Butler, President and Chief Executive Officer at Exelon]

I would tell you that anything that is good for our customers to address the issue of resource adequacy and affordability, we will support. As you can appreciate, James, our teams are actively involved in those discussions at the legislative front and even having the discussions at the regulatory side. So we just need it to be balanced, And we need to ensure that the recovery of us getting into that I will quote my CFO is that we need to have a very straightforward approach in that it is recoverability is very clear and outlined in legislation. So we know what we're getting into, and we're partnering with the state to meet those needs. But it's all about the customers in terms of affordability and energy security and adequacy.

[James Kennedy, Vice President at Guggenheim Partners]

Okay, perfect. And then just on the data center side, thanks for the incremental color in the appendix slides on the phases. Is there like a rule of thumb that we should be thinking about for how you convert between the phases and ultimately shift into the capital plan? Just any kind of timeline considerations? Thanks.

[Jeanne Jones, Executive VP & CFO at Exelon]

Yeah. Hey. Yeah, we don't really have a rule of thumb because every project is different. And we always start with how do we how do we be most cost efficient for all of our customers. And so, as you can imagine, therefore, it depends.

[Jeanne Jones, Executive VP & CFO at Exelon]

But what I will say is that the $38,000,000,000 that we have in the plan, 5,000,000,000 of that is for new business. And when I look back to our last four year plan, that was an increase of $900,000,000 So, we can expect to continue to see more incremental capital necessary to accommodate the new load. As we outlined in our fourth quarter call, that 10,000,000,000 to $15,000,000,000 beyond the planning period, at least $1,000,000,000 is related to this new business. So, as we know, the investment is needed, we build it into the plan, but as you also know, we don't put anything in that is uncertain. So, of the $38,000,000,000 5 billion dollars related to new business, and that's at least a $900,000,000 increase from our last four year period.

[Jeanne Jones, Executive VP & CFO at Exelon]

We expect that to continue.

[James Kennedy, Vice President at Guggenheim Partners]

Thanks, guys. See you soon.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Julien Dumoulin Smith of Jefferies. Please go ahead, Julien.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Hey. Good morning, team. Nicely done, guys. Hey. Thank you again for your time.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Just following up on on some of the last questions, if I can press a little bit further, if

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

you don't mind. First, on

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

the data center front, I mean, you all are are framing these as 8050% problem. These are fairly high numbers in isolation. How do you think about the timing here and how that perhaps is juxtaposed against the the backdrop of this FERC ongoing process? Again, I think we all take it for granted that maybe one sort of precludes the other, but how do you think about it? 80% probability is nontrivial, particularly given the metric that you define them as being, having already achieved?

[Jeanne Jones, Executive VP & CFO at Exelon]

Yeah, I would say, well, I would start with saying that none of this, as a reminder, is dependent on that co located FERC two zero six. This is all front of the meter, full T and D, typical sort of customers that we have in our service territory. So none of that is dependent on that process. And in fact, we're not seeing any slowdown as we work through that process. We announced the 16 gigs on Q4 of twenty four, those 16 gigs remain very solid, high probability, and we've even given more color in terms of phase one, phase two, and phase three for those 16 gigs.

[Jeanne Jones, Executive VP & CFO at Exelon]

What we did a little bit different this time was also give you insight into what's around the corner, and we have another 16 gigs. So, sorry to confuse you, but they're both the same number. But it's another 16 gigs. 12 of that is a cluster study, the second cluster study we're doing in ComEd service territory, and then four of it is just spread across the East Coast utilities. So, continued momentum all in front of the meter, not dependent on this process, but as you heard from Calvin, we continue to work that process in parallel, because we want to meet any and all types of customers.

[Jeanne Jones, Executive VP & CFO at Exelon]

As we think about the buckets you can see again, phase one, phase two, phase three, I would say 70% is probably phase one, another 20% phase 10% in phase three. We feel very confident in the other 16 gig, and I think you can kind of think of them roughly in the phase one time period too, but we wanted to be clear about how we're thinking about those and the fact that we're moving more, because of the demand we're seeing, more of a cluster study approach where we're looking at customers together so that we can give them better insights into time and cost and things like that. So, to evolve our customer service there. But as that cluster study is completed, as we work the other four gigs, you can expect us to kind of move that 16 gigs into the other phases as we continue to update you on a quarterly basis.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Alright. Excellent. Thank you for clarifying that it remains distinct and separate. I appreciate that. And then related, just not to nitpick too much on the prepared comments, just curious, when you talk about assisting the industry with respect you know, the backdrop here on on leadership at FERC, how do you think about what that timeout looks like and what that settlement process could be?

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

I know that there's, you know, several different forms where you could have another PGIM stakeholder process that that could be more of a FERC oriented process here. How do you think about potentially finding a joint arrangement or settlement here amongst a litany of different parties?

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

Good morning, Julian. It's Colette, honorable. How are you today?

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Great, thank you.

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

Julian, can you hear me? Okay, good. Let me get to your question. One, let's take a look at the docket itself. We really see quite a bit of consensus in the docket.

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

Calvin referenced the filing by EEI, which represents a majority of the industry, the NERC filing, the filing from the independent market monitor. And then the United Transmission Owner Group really demonstrate to FERC that there is a record and a consensus about how to treat this load. When Calvin said we appreciated the commission's efforts here, it is to move quickly so that we can all have the clarity that we need. That's where we started in this matter. And so we're not surprised at all by how the docket is progressing.

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

As Calvin mentioned, we will be open to having discussions of any sort, but what we really want is for FERC to issue a decision quickly so that we can all have the clarity so that we can support those large load that Jean described as well as going back to Calvin's point ensuring affordability and energy security for all of our customers.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Got it. So looking for FERC to take action principally before anything else with a firm decision?

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

We think there is a record before them

[Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary at Exelon]

to do so. As Calvin mentioned, should the commission determine that settlement discussions are appropriate, we would be more than willing to participate in that exercise as we have been very constructive partners in the past. If you look back at our record here, we were the ones that really started in the forefront of this issue. So we've demonstrated that we will be constructive and collaborative partners, but we're ready to continue supporting this moment in time.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Excellent. Thank you all very much. See you soon. Cheers.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you, Julie. Thank you.

[Operator]

Thank you. Our next question comes from the line of David O'Carlo of Morgan Stanley. Please go ahead, David.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Good morning, David.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Hey, thanks. Good morning. Morning. Maybe a quick follow-up on the data center side of things. Could you give a sense as to the timing of when that load looks to be ramping up within your forecast period?

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

And I guess from your I'm also thinking in the context of your infrastructure and any limitations there, when can you connect in new large loads at this point given such a big pipeline?

[Jeanne Jones, Executive VP & CFO at Exelon]

Yeah, so as we think about the 16 gigs that we have on the slide, we think about 10% of the load will be on by 2028, another a third of it by 02/1930, '3 fourths of it by 02/1934, and then the remainder beyond that. So, that kind of gives you an insight into the view as we see the load coming on. And then your second question, again, it depends on the customer. I mean, I think there's at times where it's thirty six months, we're always trying to push to be faster for our customers. Other times it can be a little bit longer.

[Jeanne Jones, Executive VP & CFO at Exelon]

But in all of our discussions, the most important thing we hear from our customers is just understanding the timeline and being upfront with that, which is why these studies are so important. I think

[Calvin Butler, President and Chief Executive Officer at Exelon]

Let me add there, Gene. David, I think it was last year we talked about how we restructured our customer strategy organization, And we created a centralized group to talk with the data center developers and really to understand what their needs were. And by strategically working with them ahead of time, what we found is that we can meet their needs and understanding how much they need to ramp up in a timely fashion and also determine appropriate sites where they can connect quicker onto the system where the infrastructure was already there or in a large part there, so it required less. And that's the partnership. Give you an example, just about a month ago, we had a EEI hosted and we hosted with them a large key account meeting in Chicago.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And we had sidebars with all the large data center developers to talk about their needs and where they were going. And we looked at all of our six jurisdictions to say, if this is what you need, here are sites that we've identified, and that's that partnership. So to Gene's point, all very different, but it's a very collaborative approach in how we're targeting it.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Okay, excellent. Thanks for that. And I wanted to touch affordability. You know, we've seen some states maybe louder than others, but, seeing, with the impact of PJM capacity, pricing increases, an increased focus in affordability. Wondering, how you're kind of approaching that, getting ahead of that and managing affordability challenges and concerns broadly across your portfolio.

[Calvin Butler, President and Chief Executive Officer at Exelon]

No, you nailed it. It has become the primary topic of discussion this past winter. As I talked about in my prepared remarks, this was the first cold winter we've had in several years. And as an example, VGE bills were up approximately 50% with 80% of that increase due to weather, commodities, and just legislative changes that were made. Our Dell, Dell Harbor Power and Light DPL had no real changes in gas distribution rates, but equally high increases.

[Calvin Butler, President and Chief Executive Officer at Exelon]

We continue to see weather volatility and supply costs, which are the primary challenges we are working to address and mitigate for customers. And as I talked about what we're doing proactively, we're helping our customers manage the costs. We're talking about energy efficiency. We're going out to customers' homes and small business, really driving what they can take action on to mitigate some of those. We're deploying our tools to assist customers.

[Calvin Butler, President and Chief Executive Officer at Exelon]

We've already suspended disconnections. We've delayed or extended payment plans, removed any additional charges. And I think the biggest piece for us is that we're out in our communities at a robust level, holding community forums and connecting with them and ensuring that the assistance that may be available at the state and local level, we're connecting them with that. So that is the key. Are we done?

[Calvin Butler, President and Chief Executive Officer at Exelon]

Absolutely not. Do we recognize the hardship that many of our customers are facing? Yes. As I always say to my team here, a dollar increase for some of our customers is a dollar too much. So we're not taking it lightly and so we're having conversations at the state and local level about how to partner.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And I think a good scenario that you can think about the Maryland legislation that I was talking to Nick about earlier, they allocated $200,000,000 from a fund that they had established. And I think that fund was called a it was Strategic Energy Infrastructure Fund directed at companies. And it had about $300,000,000 in it. They took $200,000,000 of those dollars to help people with paying their bills. Now, how can we partner with them to let those dollars go further?

[Calvin Butler, President and Chief Executive Officer at Exelon]

And we're having those discussions. So you're right. Key issue, the key issue, and we're meeting those challenges.

[David Arcaro, Executive Director, Equity Research at Morgan Stanley]

Okay, great. I appreciate the color. Thank you so much.

[Operator]

You're welcome. Thank you. Our next question comes from the line of Bill Apicelli of UBS. Please go ahead,

[Calvin Butler, President and Chief Executive Officer at Exelon]

Hey, Hey,

[Bill Appicelli, Executive Director, Head of North America Power & Utilities Research at UBS Group]

good morning. Just wanted to go back to Marilyn for a second. Maybe on the lessons learned docket, can you just remind us on the timeline and maybe what's the range of outcomes there? Given the legislative developments, is there any concern around not continuing the NYPs beyond the current plan? Or what sort of is maybe a range of scenarios that we could look to there?

[Calvin Butler, President and Chief Executive Officer at Exelon]

I would tell you that the fact in the debate this year around NYPs, the state, the legislature did a wonderful job at understanding the value of NYPs. But we do have the discretion, to your point, on whether we do. We do believe that that multi year collaborative process, the engagement with stakeholders, forward looking is the most productive. So I don't see anything to date that would take us away from that. And I am pleased that the Commission did embark on the lessons learned process.

[Calvin Butler, President and Chief Executive Officer at Exelon]

So it extended into this year, likely delaying the timing. But we believe that this legislative session that we just had will spark a ruling very soon. As you may recall, we went through an extensive process to determine that it was the best option. And so I think we will have a I'm looking at Kareem and Tamela here. We will have a decision in the short order.

[Calvin Butler, President and Chief Executive Officer at Exelon]

We anticipated by the end of the second quarter that we will have a decision on the lessons learned. And we continue to involve in those states. Everyone has submitted their comments. Everyone has engaged in the process from the Office of People Council to the large industrials to residential customers. So everyone's voice has been heard, which is what we wanted.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And that's what we were driving to.

[Bill Appicelli, Executive Director, Head of North America Power & Utilities Research at UBS Group]

Okay, great. And then just going back a little bit to the resource adequacy debate, you're indicating an ever increasing amount of load that's interested in coming on. The queue I think for new capacity additions remains pretty small, right? I think there's only about six gigawatts of gas in the queue for PJM. Guess, and Perks is going be having this technical conference here in June, but I guess where do you guys stand in terms of addressing the resource adequacy concerns as you look out to the amount of load that wants to come on over the next call it five to seven years?

[Calvin Butler, President and Chief Executive Officer at Exelon]

We do believe it's a portfolio approach, meaning that there's an approach that PJM and all of our states can take that we can't limit how we get the generation resources to the table. We should be looking at everything and if it's a delay of closings of certain plants, is it's allowing gas to come in and built And we talked about this utilities owning generation. All of that needs to be on the table because as you've just said, we see we're at a critical time in this industry where we have to meet the need. Having said that, it has to be a very balanced approach. And you have to balance it with the affordability issue.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And I think that's why it's all coming to the table right now. So our discussions is portfolio approach. Let's be open to it and get it done sooner rather than later. And also put the right policies around it where you don't shift the cost from one customer group to another because we're running too fast.

[Jeanne Jones, Executive VP & CFO at Exelon]

Yeah, and I think that's portfolio approach, just a focus on energy efficiency, distributed resources, demand response, and engaging with our states there to say, how they happen to those programs, whether we have them today and we expand upon them, or can we implement new programs to continue to add to that portfolio approach?

[Calvin Butler, President and Chief Executive Officer at Exelon]

And, you know, part of our challenge, and I've we've been saying this for a while now, is some jurisdictions are using more, let's call it outdated rules, outdated rules to address modern issues. And we need to keep the policies updated to address the needs of tomorrow. And that's what we're working on. And I'll just be out. It's very takes some time to move regulatory bodies forward in a timely manner to meet the needs up to market.

[Calvin Butler, President and Chief Executive Officer at Exelon]

And that's what we've really been putting our attention towards.

[Jeanne Jones, Executive VP & CFO at Exelon]

And I think one of the slides we talked about is to Calvin's point about the portfolio approach, we're active at FERC, active at PJM, pleased to see PJM putting forth proposals on the capacity auction, FERC already approving some of them, but then also, to Calvin's point, working with our states. Maryland has already made progress here in the first legislative session outlining a competitive procurement process for three gigawatts within state generation. So, I think we're pleased to see all of our stakeholders working with a sense of urgency, and we're right there at the table to help drive those solutions.

[Bill Appicelli, Executive Director, Head of North America Power & Utilities Research at UBS Group]

Great. Thank you for that.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you.

[Operator]

Thank you. I would now like to turn the conference back to Calvin Butler for closing remarks. Sir?

[Calvin Butler, President and Chief Executive Officer at Exelon]

Thank you. Thank you, Latif. And let me just say to everyone, thank you for your interest and support of Exelon. I hope as we continue to move these things forward, we're providing you with valuable information. And we appreciate you all taking the time to join us today and for your support.

[Calvin Butler, President and Chief Executive Officer at Exelon]

Let's see if that concludes our call.

[Operator]

Thanks to all our participants for joining us today. This concludes our presentation. You may now disconnect. Have a good day.

Participants

Executives

• Andrew Plenge, Investor Relations
• Calvin Butler, President and Chief Executive Officer
• Jeanne Jones, Executive VP & CFO
• Colette Honorable, EVP, Chief Legal Officer & Corporate Secretary

Analysts

• Nicholas Campanella, Director at Barclays
• James Kennedy, Vice President at Guggenheim Partners
• Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group
• David Arcaro, Executive Director, Equity Research at Morgan Stanley
• Bill Appicelli, Executive Director, Head of North America Power & Utilities Research at UBS Group