Exelon Q2 2025 Earnings Report

Exelon EPS Results

• Actual EPS: $0.39
• Consensus EPS: $0.37
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $0.47

Exelon Revenue Results

• Actual Revenue: $5.43 billion
• Expected Revenue: $5.47 billion
• Beat/Miss: Missed by -$40.57 million
• YoY Revenue Growth: +1.20%

Exelon Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 10:00AM ET

Exelon (NASDAQ:EXC) (NASDAQ: EXC) is a regulated utility company that delivers electricity and natural gas to residential, commercial and industrial customers. Its operations are focused primarily on the transmission and distribution of energy, along with related customer, infrastructure and energy-efficiency services.

Exelon operates through six utility companies: Atlantic City Electric, Baltimore Gas and Electric, Commonwealth Edison, Delmarva Power, PECO and Pepco. Together, these utilities serve customers across Illinois, Maryland, Delaware, New Jersey, Pennsylvania and the District of Columbia.

The company was formed in 2000 through the merger of PECO Energy and Unicom, the parent company of Commonwealth Edison. Exelon separated its competitive power-generation and energy-marketing business into Constellation Energy in 2022, leaving Exelon focused on regulated utility operations. Calvin Butler serves as Exelon's president and chief executive officer.

Exelon Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Exelon reported $0.39 in second-quarter adjusted operating earnings, beating expectations thanks to favorable timing and disciplined cost management, and reaffirmed its full-year guidance of $2.64–$2.74 per share.
• Positive Sentiment: During June’s storm, Exelon restored power to over 325,000 customers with more than 3,000 team members working in 100°F heat, reinforcing its ranking among the most reliable utilities in the U.S.
• Negative Sentiment: PJM capacity auction results and tightening power markets may raise customer bills by $1.50 to $4 per month, underscoring supply‐cost volatility and a decline in demand‐response capacity.
• Positive Sentiment: Exelon plans to invest $38 billion through 2028 and identify an additional $10–$15 billion in transmission work thereafter, targeting a 9–10% return on equity and 5–7% annualized earnings growth via a balanced capital strategy.
• Positive Sentiment: The company’s large-load pipeline stands at over 17 GW of firm projects plus 16 GW under study, with cluster study results due in Q3–Q4 and new large-load tariff proposals under review to expedite interconnection.

Presentation

[Operator]

Hello, and welcome to Exelon's Second 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. 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. 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.

[Operator]

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

[Andrew Plenge, VP of Investor Relations at Exelon Corporation]

Thank you, Gigi, and good morning, everyone. Thank you for joining us for our 2025 Second Quarter Earnings Call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer, and Jeanne 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. 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.

[Andrew Plenge, VP of Investor Relations at Exelon Corporation]

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.

[Calvin Butler, President and CEO at Exelon Corporation]

Good morning, Andrew, and thank you very much. Thank you all for being with us today as we report on our results through the first half of the year. We continue to execute well across our priorities for 2025, building on a platform that is very well positioned to lead our states and jurisdictions through an exciting time in the sector. We earned $0.39 in operating earnings in the second quarter, above expectations at the time of our first quarter call, driven by favorable timing and cost management at our utilities, offsetting the impact of our $50 million customer relief fund and a stormy start to the summer. This keeps us on track to deliver on our operating earnings guidance for 2025 of $2.64-$2.74 per share. Storm seasons always highlight the talented and committed employees that make up the Exelon team.

[Calvin Butler, President and CEO at Exelon Corporation]

In June, PECO was hit with one of the largest storms in recent memory, with peak customer outages surpassing 325,000. Restoring power quickly was critical in light of a heat wave that followed the storm, and over 3,000 of our team members at PECO were joined by almost as many support personnel from around the country to bring customers back online, working tirelessly in 100-degree temperatures. It's easy to take performance like this for granted. This is what you've come to expect from Exelon and why we continue to be recognized as the number one, three, five, and eighth most reliable utilities across the country. I'm incredibly proud of the sacrifices our team makes on a regular basis to provide the service our customers and communities expect.

[Calvin Butler, President and CEO at Exelon Corporation]

Turning to regulatory activity, I will remind you that our core rate case activity is limited this year, having updated investment recovery rates across close to 90% of our rate base in the last couple of years. However, we have remained very active across a variety of federal and state proceedings to solve an ever-evolving set of opportunities to better serve our customers and advance our states' energy and economic goals. Building on the momentum from the first quarter, our legislatures continue to consider ways in which they might address an energy landscape that is rapidly evolving. Illinois wrapped up its spring legislative session after drafting an energy omnibus legislation seeking opportunities to expand efficiency efforts, transmission build, storage, and resource planning, among other areas.

[Calvin Butler, President and CEO at Exelon Corporation]

While the legislature did not pass the bill, the process offered us and other stakeholders the opportunity to discuss critical issues, and we remain optimistic that Illinois will continue to lead the nation in advancing progressive, constructive legislation that enables effective partnership across private and public entities. Other states like Pennsylvania and New Jersey remain in active discussions around ways in which they might address tightening power markets, including bills to allow for utility ownership of generation. Coming off of last week's capacity auction, it's clearer now than ever that states should be thinking broadly about how to secure the energy futures for our citizens. Exclusive reliance on PJM-enabled low and relatively steady supply costs for its customers in a period of low demand growth, and when states weren't yet facing significant turnover in their generation supply driven by economics, policy, and technology.

[Calvin Butler, President and CEO at Exelon Corporation]

The volatility and unpredictability we are seeing in supply costs, along with a steady increase in warnings from institutions like NERC and DOE, is undermining the faith in the status quo. Despite higher prices, we are not seeing the market respond fast enough. We saw some new generation entry, but demand growth was double that amount. In fact, the capacity contribution by one of the quick solutions available, demand response, actually declined in this most recent auction. States have an opportunity to proactively bring control, certainty, and cost benefits by pursuing options outside of the capacity market, including regulated generation. Such options can ensure solutions are there to meet state goals when the market can't or won't deliver. State involvement already resulted in savings for customers with the temporary cap on pricing, resulting in close to $3 billion saved relative to an uncapped outcome.

[Calvin Butler, President and CEO at Exelon Corporation]

Bigger, longer-term fixes are available with legislative action, and we stand ready to be part of that solution. We look forward to continuing the dialogue with our states to be a part of the solutions to ensure energy is delivered reliably and cost-effectively in a manner that best suits their goals. Time remains of the essence in adding supply to the grid. As you can see, our pipeline for large load remains robust. Our large load pipeline is holding firm at more than 17 GW, and customers remain in our queue to study another 16 GW of high-probability load that we expect to formalize as part of our pipeline by the end of the year. In fact, we have also opened another cluster study window at ComEd, closing in August, in which several gigawatts' worth of large load have indicated an interest in participating.

[Calvin Butler, President and CEO at Exelon Corporation]

Transmission solutions to connect this new load and generation to the grid are also advancing. We continue to be well-positioned to be assigned over $1 billion of transmission work associated with the MISO-Tranche 2.1 set of projects, and we now have the organizational structure and are developing strategic and financial partnerships necessary to take further advantage of our industry-leading position in transmission. The expansive work needed across all aspects of the grid gives us strong confidence in our four-year outlook and beyond, investing $38 billion through 2028 with an additional $10 billion-$15 billion of transmission work identified beyond that to support our jurisdictions and, most importantly, our customers. Success in winning competitively bid projects, which we have already proven we can do with the Tri-County Line, would offer even more upside.

[Calvin Butler, President and CEO at Exelon Corporation]

By earning a fair return on equity of 9%-10% on a rate base growing at 7.4% through 2028 and financing that with a balanced capital strategy, we expect to grow our earnings at an annualized rate of 5%-7%, with the expectation of delivering at the midpoint or better of that range. I will now turn it over to Jeanne to provide a more detailed update on our financial outlook and rate case activity. Jeanne?

[Jeanne Jones, CFO at Exelon Corporation]

Thank you, Calvin, and good morning, everyone. Today, I will cover our financial update for the second quarter and the progress on our current regulatory activity. Starting on slide five, we present our quarter-over-quarter adjusted operating earnings block. Exelon earned $0.39 per share in the second quarter of 2025 compared to $0.47 per share in the same period in 2024, reflecting lower results of $0.08 per share over the same period. Earnings are lower in the second quarter relative to the same period last year, primarily driven by $0.13 of higher distribution and transmission rates driven by new rates in effect. This favorability was offset by $0.07 of ComEd timing, which reverses most of the favorability seen in the first quarter due to revenue shaping and timing of O&M spend relative to 2024.

[Jeanne Jones, CFO at Exelon Corporation]

There's $0.04 at corporate attributable to our customer relief fund, $0.03 of higher storm costs at PECO, $0.02 of higher interest at corporate and PHI, and $0.02 attributable to the recognition of Pepco Maryland's first MYP reconciliations for rate years one and two in 2024. The remaining $0.03 is attributable to smaller, non-recurring items, including timing of taxes at corporate and approximately a penny attributable to the derecognition of a regulatory asset subsequent to Maryland's Next Generation Act. As Calvin mentioned, these results are slightly ahead of the guidance we provided in our prior quarter call due to favorable revenue and tax timing at ComEd and disciplined cost management at our utilities. Our year-to-date performance underscores our ability to deliver strong financial results amidst increasingly significant storm activity and while continuing to find new and creative ways to support our customers.

[Jeanne Jones, CFO at Exelon Corporation]

Looking ahead to next quarter, we expect earnings to be approximately 29% of the midpoint of our projected full-year earnings guidance range, which contemplates new rates in effect, anticipated shaping of costs and revenue timing, and assumes normal weather and storm conditions, along with our ability to seek deferral treatment of extraordinary storm costs at PECO from the first half of the year. As we look towards the end of the year, we remain on track for full-year operating earnings of $2.64-$2.74 per share with the goal to be at midpoint or better. Finally, we reaffirm our annualized earnings growth rate of 5%-7% through 2028 with the expectation to be at the midpoint or better of that range. Turning to slide six, I will review the limited base rate case activity across our platform.

[Jeanne Jones, CFO at Exelon Corporation]

We received intervenor testimony on July 25th on the Delmarva Power gas distribution rate case filed last September, keeping the rate case on track. The rate filing seeks to recover continued reliability investments such as aging piping, along with the LNG plant upgrades, which help protect customers from price volatility during peak periods. Following intervenor testimony, the case will be open for rebuttal testimony in September before evidentiary hearings are held in November, with an order expected in the first quarter of 2026. Our second open base rate case is at Atlantic City Electric, where settlement discussions remain ongoing as we seek recovery for grid improvement and modernization efforts in line with New Jersey's Energy Master Plan and the Clean Energy Act, with an order expected by the end of the year. At ComEd, our first reconciliation under the new multi-year rate plan framework is underway.

[Jeanne Jones, CFO at Exelon Corporation]

As a reminder, we filed for a $268 million reconciliation adjustment, primarily driven by operating under a lower revenue requirement in 2024 than what was ultimately approved by the commission. The reconciliation is also inclusive of $6 million related to a positive 5.3 basis point adjustment to our return on equity from our performance metrics. In initial testimony filed on July 15th, staff recommended a $108 million reduction in the net reconciliation amount but noted they would consider additional information that could impact their ultimate recommendation. We continue to feel confident in the spend we incurred in 2024 as we maintained industry-leading levels of reliability at well below average rates and are working toward the remaining rounds of testimony, including our rebuttal testimony due next week.

[Jeanne Jones, CFO at Exelon Corporation]

In Maryland, we continue to await decisions on our final reconciliations from the first BGE and Pepco Maryland's multi-year plans, along with the commission's comments on the lessons learned proceeding to support our next filings. We trust that we can find an approach that best aligns stakeholders' interests in balancing affordability, reliability, economic development, and the state's energy transition goals. I'll conclude with updates on our balance sheet activity on slide seven, where we've continued to make substantial progress on our 2025 capital needs. From a financing perspective, we have successfully completed nearly 80% of our planned long-term debt financing needs for the year, with ComEd and BGE issuing $725 million and $650 million in the second quarter, respectively.

[Jeanne Jones, CFO at Exelon Corporation]

The strong investor demand and attractive pricing we continue to achieve in our debt offerings is supported by the strength of our balance sheet and by the low-risk attributes of our platform. Investor confidence in our offerings, along with our pre-issuance hedging program, position us well as we seek to finance the energy transformation in the most cost-effective way for our customers and our investors. As it pertains to equity, we've successfully priced the full $700 million of planned equity needs for 2025 via our ATM, issuing $175 million in shares and pricing an additional $525 million under forward agreements for the issuance later in the year. In addition to de-risking 2025, we've also priced nearly $160 million of our equity needs for 2026 through forward agreements using our ATM, which we renewed in upside in the second quarter to cover our needs for the current four-year plan.

[Jeanne Jones, CFO at Exelon Corporation]

We continue to project 100 basis points-200 basis points of financial flexibility on average over the Moody's downgrade threshold of 12%, approaching 14% at the end of our guidance period, with a focus on ways in which we can protect and strengthen our balance sheet to ensure we support all opportunities to invest to meet our customer needs. Most recently, we filed with FERC for construction work in process incentive treatment on our Tri-County transmission project, which will support stronger credit ratings. We also continue to advocate for a language that incorporates repairs for calculating the corporate alternative minimum tax, which will lower energy costs for our customers. 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, CFO at Exelon Corporation]

I'll also remind you that our financing plan and credit metrics are not impacted by the most recent tax legislation. Thank you. I'll now turn the call back to Calvin for his closing remarks.

[Calvin Butler, President and CEO at Exelon Corporation]

Thank you, Jeanne. Closing on slide nine, we remain focused in 2025 on our four core areas to create value for our customers, jurisdictions, and shareholders. As I noted, our employees deliver unparalleled service to our customers in all jurisdictions, which becomes especially apparent in the face of increasingly unpredictable and volatile weather. We invest every dollar as prudently and as efficiently as possible, trying to prevent outages from impacting our customers in the first place, even amidst storms. It's why 98% of the net profit earned at our utilities has been reinvested back in the system over the last five years. Storms inevitably bring disruptions. When that happens, our team works tirelessly to bring people back online as quickly as possible.

[Calvin Butler, President and CEO at Exelon Corporation]

Those two elements, our investments in the system and the performance by our employees, are the reason why we occupy four of the top eight spots in reliability in the industry. This focus on top-notch service at below-average cost is what drove ComEd's latest large load tariff proposals, which seek to ensure an interconnection process that is as efficient as possible for new customers while protecting existing customers against the risk that the load does not materialize at expected levels. We appreciate the engagement with large customers and other stakeholders in developing this set of proposals and look forward to finding a balanced solution as we continue to grow our pipeline of customers seeking to take advantage of industry-leading reliability at some of the lowest rates in the nation.

[Calvin Butler, President and CEO at Exelon Corporation]

That customer orientation was also highlighted by the CEO of a quantum computing company, who noted ComEd's partnership with the state at the beginning of the company's site evaluation process was a key differentiator when deciding to locate in Chicago. Connecting this load continues to offer long-term advantages for our jurisdictions. The market for data processing, driven by artificial intelligence and increased reliance on the cloud and other high-density load, is national, and ensuring our customers get the local benefits of that growth, including from a reduced share of fixed costs, supports longer-term affordability. With the extent of investment needed in the grid, not just from new business, but from connecting new generation to service and from ensuring reliability and resiliency amidst more challenging weather conditions, affordability requires every tool we have and new ones as well.

[Calvin Butler, President and CEO at Exelon Corporation]

It's why we continue to focus on connecting customers to federal, state, and local relief funds, including continued advocacy for key programs like LIHEAP. It's why we suspended disconnects, offered extended payment plans, and waived late payment fees after a cold winter. It's why we partnered with trusted local nonprofits to provide $50 million in customer relief for low and middle-income customers this summer. It's why we're increasingly advocating that our jurisdictions be proactive in taking more control over their power supply, complementing the supply induced by the capacity market with solutions like utility-owned generation that their regulators oversee, giving them control, certainty, and cost benefits to customers that markets alone don't offer.

[Calvin Butler, President and CEO at Exelon Corporation]

By putting our customers at the center of everything we do, we are confident we can earn a fair return on our investments and maintain a balanced funding strategy that enables delivering not only on 2025 guidance but also on our long-term growth rate of 5%-7%. We have built a platform and a culture of excellence over the last 25 years, and we are committed to using it to deliver consistent growth and long-term value for our communities and shareholders for the next 25 years and beyond. Gigi, we are now happy to take any questions.

[Operator]

Thank you. If you would like to ask a question, simply press star 11 on your telephone keypad. Our first question comes from the line of Paul A. Zimbardo from Jefferies.

[Calvin Butler, CEO at Exelon Corporation]

Hey, Paul.

[Paul Zimbardo, Managing Director and Equity Research at Jefferies]

Hi. Good morning, team.

[Jeanne Jones, CFO at Exelon Corporation]

Morning.

[Paul Zimbardo, Managing Director and Equity Research at Jefferies]

Hi. Thank you. I think just to kick it off, you described it well on your call, and it seems like nearly every one of your governors, if not all of the governors, have been increasingly active with PJM. Which jurisdiction do you think is the most right for further action on that utility-owned generation or more energy efficiency, storage, something in those areas?

[Calvin Butler, President and CEO at Exelon Corporation]

Yeah. Thank you, Paul. This is Calvin, and I'll start off with you. I would say you're absolutely right. Our governor signed in and stepped in. As I talked about, we appreciate their engagement. We are committed to working with PJM, but we do believe state involvement is critical in this effort, as I outlined. As I also said, Governor Shapiro's effort specifically helped in capping what our customers would have otherwise had to pay. That was roughly about $3 billion in savings. That's significant. Most of our jurisdictions have engaged in some legislative process to allow for us to look at what we can do to supplement existing supply. As we talk about, you have battery storage at the T&D level being offered in Maryland. You have utility-owned generation considerations in Delaware. You're looking at it in New Jersey.

[Calvin Butler, President and CEO at Exelon Corporation]

To your question, which is right, it depends on how quickly they are looking to move and where's the need coming from. What I can tell you, as we work with them and talk to them, we need three things that we talk about. One, certainty. Two, we want the states to think that they have a sense of control over this to the customer benefits that derive directly from utility-owned generation. We're going to be part of the solution, and we're committed to it because it goes right to the affordability question. What can we do for our customers today that is not being done? In the meantime, we do need to offer short, mid, and long-term solutions in this process. I would look to Mike Innocenzo, our COO, to see if you have anything you'd like to add there.

[Mike Innocenzo, COO at Exelon Corporation]

Yeah, I think the only thing I would add in terms of timing would be the Maryland legislation, which has a definitive request out there for 3,000 MW of power. We'll know that by October, whether that's met by the competitive market. If that's not met, that would probably be the next time in the timeline to trigger some additional action.

[Calvin Butler, President and CEO at Exelon Corporation]

Thank you, Mike. Paul, does that answer your question?

[Paul Zimbardo, Managing Director and Equity Research at Jefferies]

Yes, it does. Just to follow up, and I appreciate that timing, Mike, is it something that could be ready for a fourth quarter refresh when you do that next roll forward, just given the Maryland opportunities, Delaware, New Jersey, just purely on the storage side? Is that something that could be ready in time for fourth quarter, or could it take a little bit longer?

[Jeanne Jones, CFO at Exelon Corporation]

I think it depends on the outcome of the procurement that Mike mentioned, but I think sometime next year we'll have more clarity, for sure, on all of our states.

[Calvin Butler, President and CEO at Exelon Corporation]

Paul, as you know how we do this, we're very deliberate about rolling forward on what we share with you. We're not going to speculate. We're going to be consistent and transparent in everything we do, and promise you we'll bring that to you as soon as we have some clarity on where it's going.

[Paul Zimbardo, Managing Director and Equity Research at Jefferies]

Excellent. Yes. No, I appreciate that. Thank you, team.

[Calvin Butler, President and CEO at Exelon Corporation]

Thank you, Paul.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Anthony Crowdell from Mizuho.

[Calvin Butler, President and CEO at Exelon Corporation]

Good morning, Anthony.

[Anthony Crowdell, Managing Director at Mizuho]

Good morning, team. Paul A.Z. took my PJM question. If I could look at the $10 billion-$15 billion of potential transmission opportunity, or timing on when I could see that move into the base plan for the company, is that on a fourth quarter refresh? If you could give us some more timing of when that becomes part of your base plan.

[Jeanne Jones, CFO at Exelon Corporation]

Yeah. Hey, Anthony and Jeanne. You're right. We would normally do that in Q4. The reason why is we have the cluster study that I mentioned. We'll have more clarity on that in the fall. We have ComEd's grid plan that has to be filed in 2026, BGE looking at its next filing. We like to take all that together, including the transmission, and build that into the updated plan that we present to you in Q4. All of that will be contemplated in there, including the new business. I think if you look back, in the last couple of updates, we've typically updated about 8%-10% every four years. I think transmission has gone up about 30%. You can expect that transmission will continue to be a big part of our roll forward going forward.

[Jeanne Jones, CFO at Exelon Corporation]

Of course, we'll continue to keep an eye on the potential generation opportunities working with our states. We wouldn't build that in until it's certain. Calvin also mentioned that we've organized ourselves under our Head of Transmission, Carim Khouzami, to also look at other competitive types of transmission. Those opportunities are not in the 10%-15%, and we would only put that in, as you would expect from Exelon, when we have more certainty on those. Those are opportunities that we continue to work towards.

[Anthony Crowdell, Managing Director at Mizuho]

Financing that $10 billion-$15 billion, a good rule of thumb, 30%-40% equity? I'm curious, what would be a good rule of thumb to finance that incremental CapEx?

[Jeanne Jones, CFO at Exelon Corporation]

Yes. We have been using a rule of thumb of every new dollar is about 40% equity.

[Anthony Crowdell, Managing Director at Mizuho]

Great. If I could jump to—I don't know what paper it was—had a big story on the Illinois governor and quantum computing. It seems like, I apologize if I mispronounce names, Governor Pritzker is very big in quantum computing. Is that creating a bigger opportunity or a unique opportunity for ComEd that maybe is different than the data center thematic that's going through the rest of the country?

[Calvin Butler, President and CEO at Exelon Corporation]

Great question. You did pronounce his name correctly, so congratulations. I was there last week on a panel with members of IBM and others talking about the quantum computing campus that they've established. The state of Illinois is very proud of that. You heard me allude to in my comment, Anthony, that the CEO of PsiQuantum said that but for ComEd engaging in that process, it wouldn't have come to Illinois. That's very significant, and it goes into that partnership. To your direct question, is there upside? Absolutely. We've already seen requests coming from others who want to be on that campus, and that was the whole point. You get an anchor, and people want to be close to what they're doing and benefit from the quantum computing efforts. It was a several-day conference on exactly that.

[Calvin Butler, President and CEO at Exelon Corporation]

This is not built into anything that we've provided you because we're going to be very transparent on the when and the who. When we roll it forward, it will come for you. That's separate and above anything that we've talked about.

[Anthony Crowdell, Managing Director at Mizuho]

Great. Thanks for taking my questions, guys. Really appreciate it.

[Calvin Butler, President and CEO at Exelon Corporation]

Thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of David Arcaro from Morgan Stanley.

[Calvin Butler, President and CEO at Exelon Corporation]

Good morning, David.

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

Good morning. Thanks so much. On the generation side of things, we've obviously seen some of your peers express a willingness to build regulated-like or contracted generation. What are your current thoughts on whether that might fit into your model? Is that something you would consider?

[Calvin Butler, President and CEO at Exelon Corporation]

Simple, yes. It's based on how it's done. Policy matters in this process, right? We go back to those three tenets. We need certainty. We want to make sure we have a clear understanding where the states are getting in control. We also want to know what the customer benefits. We want to be part of the solution. We do believe in that portfolio approach because what you're finding right now, David, is that the supply is not meeting the demand. What can we do to be part of that solution? How it's done does matter. We're very optimistic that our states will do something. I think it was Paul that asked earlier where our states are engaging in this discussion. We're engaged in those discussions every step along the way. We want to partner, and we will continue to partner with PJM.

[Calvin Butler, President and CEO at Exelon Corporation]

We do see it as an end, the competitive markets and regulated generation being part of the solution.

[Jeanne Jones, CFO at Exelon Corporation]

Yeah. We think the regulated generation in partnership with our states is the best way to do it. The states need certainty, right? While the PJM works, the competitive markets, if the states don't want to wait, right, and they know they have economic development that needs more generation, this regulated path can give them certainty. It also gives them control. They can decide what type of generation makes sense for their customer set, for their state. In working with them, we can provide that control. It provides customer benefits. We know we have a cost of capital advantage. In doing it and proactively planning, you can get—we believe there's customer benefits there. That's why we believe that's the right way to do it. Look, half of PJM states today already have sort of a hybrid approach between some sort of regulated-like generation and the restructured market.

[Jeanne Jones, CFO at Exelon Corporation]

This isn't new or novel. We think our states should just capture the opportunity, get that control, the certainty, and the customer benefits. We stand ready to partner with them and move forward.

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

Okay. Great. Thanks. I appreciate the color. I was wondering if you could elaborate on how data center discussions have been progressing recently. How quickly do you anticipate firming up more megawatts and kind of any reactions that you're seeing from the industry to some of the large load tariffs that you're rolling out?

[Calvin Butler, President and CEO at Exelon Corporation]

We talked about significant activity in Illinois. We talked about the second cluster study that's being presented and started in August, which will provide more clarity as we go forward. Let me just be very clear. We're also seeing data center activity across our other jurisdictions, Pennsylvania and Maryland. This is not just one state. You just see Illinois being in the top five of what we're doing. Understand it's driving forward, and you'll see more of those announcements coming in. Doing it the right way with reliability in mind is key. I'm looking at Mike. I'm going to ask Mike if he'd like to jump in there.

[Mike Innocenzo, COO at Exelon Corporation]

The only thing I would add is timing. As you mentioned, we've got active cluster studies going in Illinois and active cluster studies going in the Mid-Atlantic. We expect results in the third, fourth quarter. Once you complete the cluster studies, you have commercial discussions with the different applicants there. I think you would start to see in the third and fourth quarter some announcements as a result of those cluster studies coming out.

[Jeanne Jones, CFO at Exelon Corporation]

We are watching the other large load tariffs across the states. You may have seen ComEd filed with the ICC some proposed changes to its tariff, just seeking to not only meet the moment here with our new customers and get more clarity and certainty there, but also protect the other customer base. Just memorializing this use of cluster studies, recognizing state-certified economic development priority projects, and this would all be for projects 50 MW or more. It is pretty consistent with what you're seeing in other states, but that would be the most recent that we filed. The ICC is going to seek, I think, opinions and stakeholders on that as well.

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

Okay, perfect. Thanks so much.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Carly Davenport from Goldman Sachs.

[Carly Davenport, VP at Goldman Sachs]

Good morning. Thanks.

[Carly Davenport, VP at Goldman Sachs]

Hey, Calvin. Thanks for taking the questions. Maybe just a quick follow-up on the large load pipeline. Is there any color you can provide in terms of the potential timelines for projects to progress through the different phases that you've outlined in that pipeline? What the potential gating factors potentially impacting that cadence would be?

[Jeanne Jones, CFO at Exelon Corporation]

Hey, Carly. It's Jeanne. I think what I would say first, kind of to answer your second part of your question, I think what we try to give you is something that is highly confident. When it's in these phases, we have found that it's sort of met the initial studies, and we feel more confident to move forward. Don't expect necessarily barriers. What we have outlined is, as we think about those megawatts, we think about 10% of that load will be online by 2028, another third by 2030, and then 3/4 of it by 2034. Not only do we want to give you kind of where they are in the phases, but also you can kind of think about how they move through those phases in correlation with the load ramp that I mentioned there.

[Carly Davenport, VP at Goldman Sachs]

Got it. Okay. That's super helpful. Maybe just a follow-up on the PJM capacity auction results and customer bills. Could you just talk a little bit about the bill impact with these auction results in place, especially with the BGE clear being lower relative to the last auctions? Any shifts that you're anticipating in sort of the rhetoric around customer bills from here?

[Calvin Butler, President and CEO at Exelon Corporation]

Yeah. Carly, I think what you saw—I'll address with BGE specifically—what you saw is BGE finished the previous auction higher. The relative delta between this one and that one, that's why you saw less of a decrease this time than you did last. We anticipate the BGE bill impacts, and I'm looking at Tamla Olivier, the CEO of BG, of roughly $1.50 going into our BGE customers. I always say this: a $1 increase on some of our customers' monthly bills is a dollar too much. We take it very seriously. Across our jurisdictions, we see anywhere from $1.50 to a $4 increase going across the system. We're doing everything we can to offset that and work with the states to mitigate it, but that's the impact we're seeing.

[Jeanne Jones, CFO at Exelon Corporation]

I think in terms of your comment around sentiment, I think there is a broader understanding and recognition that this is driven by the supply costs, right? We need the investments necessary in the grid to attract the economic development, just like we need to address these rising supply costs. That goes back to what we're doing in terms of working with our states, having them take control, thinking of complementary solutions to PJM. That may take some time in terms of generation. Back to what Calvin said, whether it's energy efficiency or demand response, those are the near-term solutions we really need to take action while we get these longer-term solutions in place.

[Calvin Butler, President and CEO at Exelon Corporation]

Carly, it also goes directly to why the commissions need to be directly engaged, the commissions and the governors, because these other solutions, we can do some things today to offset some of the rising costs and customer bills. It has to be very thoughtful. It's no longer, "Can you do one-offs and expect something to happen?" It has to be that portfolio approach. Energy efficiency and demand response are clear examples of what some of our states can do today to decrease customer bills. Because it's out of their norm, you get hesitation. We continue to work with them to think broader than just today or the next decision.

[Carly Davenport, VP at Goldman Sachs]

Great. Thank you for all the details. Super helpful.

[Operator]

Thank you. At this time, I would now like to turn the conference back over to Calvin Butler for closing remarks.

[Calvin Butler, President and CEO at Exelon Corporation]

Thank you very much, Gigi. As always, thank you guys for joining. Let me just say that we are committed to work with our states to really drive financial excellence and operational excellence. We appreciate your support. We hope to see many of you in the months ahead as we continue to get out on our roadshows and talk with you and look forward to seeing you at our financial conference at EEI. With that, Gigi, 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

• Calvin Butler, President and CEO
• Jeanne Jones, CFO
• Calvin Butler, CEO
• Andrew Plenge, VP of Investor Relations
• Mike Innocenzo, COO

Analysts

• Carly Davenport, VP at Goldman Sachs
• David Arcaro, Executive Director and Equity Research at Morgan Stanley
• Paul Zimbardo, Managing Director and Equity Research at Jefferies
• Anthony Crowdell, Managing Director at Mizuho