EXC - Earnings call transcript Q2 2023

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Operator

Hello, and welcome to Exelon's Second Quarter Earnings Call. My name is Gigi, and I'll be your event specialist today. [Operator Instructions] Please note that today's webcast is being recorded. [Operator Instructions]

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

Andrew Plenge

Chief Jeanne us President members with of Officer. and us and everyone. following they'll and quarter for call Butler, Leading Gigi, have earnings be pleased you management Officer; answer Financial the are Exelon's our Calvin are with our today your remarks. Chief senior questions team good Other Exelon's you, Jones, Executive also today, Exelon's We're available morning, to to call. and Thank XXXX second prepared

Today's earnings information presentation, section and can release be website. Relations Exelon's with Investor along our other found financial in of the

We associated remind earnings would which you the contain materials presentation forward-looking statements and risks to also release to are that like subject today's uncertainties. and

cautionary of on Slide SEC statements on our in the today's or risks X filings. these can You presentation find

today's other and and the be In our appendix operating references measures non-GAAP equivalent of measures. includes found GAAP addition, adjusted and release. between measures our can earnings these the nearest to earnings presentation in in Reconciliations presentation

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

Calvin Butler

you, quarter Thank call. everyone, Good for thank earnings our for Andy. joining us you morning, second and

is continue work plan We our expected, testament dedicated as the on all of of put which our delivering by in a employees.

get the company to which complied of DPA, Justice. hearing. prosecution first the the with the we end deferred the our start Department court in before the hearing, of court government milestone. the into updates, July, to agreement business the fully granted reached the dismiss with ComEd status the But charge, term by results key I'd like and noting At In acknowledging a X-year moved of the

of our all ethical the highest as committed integrity of we and building to trust look on levels to we customers company forward. of the at to forward and continue move remain the behavior, We standards

leader. Secretary pleased Counsel, Anna for will our Compliance Officer to spirit, Richo the Corporate General excellence Board and as In operational she and complementary an commitment brings Chief oversight. Anna highly Directors. welcome and is to am experience compliance to Her Cargill, business invaluable that and I of provide attorney

the quarter. the turning Now for to results

you we basis. in basis results earned within range on share X, expected $X.XX GAAP on share track These what a and on to per As $X.XX for non-GAAP we we earn line and per guidance are to on see $X.XX XXXX. a this with can Slide per of $X.XX our remain share right quarter,

duration, of high outage a X We in continue Three next utilities will touch slide. level. on on more operationally frequency and performing which at outage our performance very I best on-record had our

base through Illinois, We and the have case cases with Maryland, also District continued in to X calendar Delaware, active New rate rate Columbia. progress Jersey our of underway

to the Maryland, plan includes Pepco look beneficial on focus help programs the transportation climate clean recently, second climate customers' Most Ready we of of rates process commission mechanism Pepco's Maryland million incentive filing reductions our posing to and the of plan. energy reliability, in filed and We effective XXXX. greenhouse decarbonization, May staff proposed emission multiyear a electrification, taking stakeholders to its removal second for of solution the forward bills. The over and electrification working while includes XX, goals Climate performance with toward efforts energy health on impact to the these mitigate areas also outlines the state's and meet steps $XXX the goals, proposal The Pathway distributed It proposal to of risk. near-term on environmental advance in building gas integration. quarter and equipment through

activity its those in the also Columbia for ComEd for cases our Delmarva rebuttals, await set filed our along and received milestones and of have we multiyear rate Maryland, intervenor in City of Pepco with has Commission Electric. additional and Service The schedule now Public plan. testimony Delaware Pepco plans District multiyear the us and BGE in Atlantic Beyond August, D.C.

You to with stakeholders. regulatory from underway the align hear about work all our more will Jeanne

past guidance we've the we'll XXXX, previously long-term also our remind you provided looking Now of outlook. on

expect midpoint better dividend grow those XXXX to to ranges of to annualized X% and our earnings. We line XXXX be XXXX and the at with to XXXX, growth X% to the or earnings in

driving billion that Over support the investing over is which anticipate transformation, X years, to energy growth. $XX next we the what's

we And continue further for whether increasing I'll long-term the it's investment of finding or our opportunities that support affordability the durability to remind customers you plans. transformation, strengthening

the about talked grants recently have the support investments middle-mile have and we the under And we announced winning grant commissions. programs and efforts Jobs million $XX pursuing we for Investment for laid funding broadband instance, For Infrastructure of approximately our ComEd. BGE at investment Act, which out

Shores with you proceed to also of assigned Additionally, Brandon have that reliability of may upgrades recently coal challenges million over with Eastern in seen utilities. retirement plant transmission voted Maryland the associated $XXX to work our address with the PJM to

United Now have incremental illustration largest strengthen while it's our T&D of our expected lengthen as and of opportunities guidance great base the to most window, pure current we growth for how rate beyond that occurs in investment States. the a utility spend continue the to

that ensure that a transmission power. buy and reliable, deliver can Our resilient cleaner upgrades on grid to they generation to able depend customers are

Before want in in report that I Report company's our on to This the latest mid-July. published mention we XXth to our history. I Sustainability operations, is move Exelon

into of incredibly puts transformation equitable proud the ensuring leading are organization energy We in we and our are an affordable work the manner.

shines and future brighter a Our for purpose, customers powering really cleaner report. our through that communities, and

to that we purpose fulfilling make the continue in meaningful. is And progress

few a examples. are Here

our XXX,XXX XXXX We over at million resources, efficiency metric over retail energy over saved megawatt increase, average XX% and X avoided customers to X.X a over hours million greenhouse of renewable rate. a gases tons connected increase with programs, million customers XXXX. with have energy gigawatts award-winning We XX close our that of X% $XX saved in

levels, is now diverse support than from in Our such spent billion $X.X XXXX. with XXXX suppliers XX% for suppliers more having up

Additionally, XX% billion we with $X.X spend the of is serve. communities companies total supplier our in

more which XX,XXX doing our the support all our goals. Our greatly ways annual to are ensure sustainability transformation from than report we their benefit work energy illustrates in employees the communities

Slide first to of provide I'll on operating the year. an the update half for our X. performance Turning

and reliability, utilities to setting achieve happen we on in PHI row pertains X on-record ComEd frequency makes up the illustrates performance that for for in making as operational and top back it the the we best quickly second online That quartile, possible investments to in quartile. PECO getting for And the PHI top ComEd, performance, performance. BGE bar at As quarter rise outage the employees when a it occur. also the outages operate and Those X grid footing system as to record continue do in outage least performance. our operated Their to them then performance. the achieved the best duration to keeping is or to this challenge continues best of All and customers it utilities excellence. for on-record are online provide

more as only But annual growing is seeing And in services Nationally, harder ComEd, on electric strengthen opportunity see increasingly expect The industries and cars Now do electricity. that data getting particularly, AI. storms job in XX% to severe. XX% important do more cloud sizable rely it's in depends to centers. we annual more as already on and frequent and growth and growth is society centers. data to data growth increasingly will center with

gas levels on nation's to operational the grid. the odor largest performance company, response. X rise continuing meeting the matched This of gas T&D must for incremental was As top-decile we utilities to all side, at these challenge the demands perform on with

Our customer our in those scores quarter first with satisfaction reported remain line in call.

across performing pandemic relief prices. off board were when interest and and had quartile second are yet escalating had impacted the the utilities XXXX by not yet in lower, rates benchmark commodity customers Our not versus the been the costs rolled

are We these options every of the ensure their costs, seen efforts. are have day working customers increased customers our by to manage through to and have engagement we they aware

several X These awards initiatives. annual and among programs it announced Annual with by ComEd excellence ago Chartwell Best fact, Awards recognize Chartwell. gas In in projects, that customer-oriented to the weeks and XXth Practices just respect won utilities recognitions electric service

for of same importance the own and we bills costs population. to continuously as discussed. on we the while value in reminder customers as launched the access and economic employment to have these in of to opportunities of initiatives in help to pursuing pay is creating a well the designed for with operating focusing awards reduce options our addition education ComEd's recognition for originally customers to eligible electric ambassador It response energy financial impact can assistance One XXXX This that their program. was pandemic. a increase local constant community it our organization program included But seeking assistance affordability, of customer-focused the community-based are income vulnerable

performance and contractors largely from our I incidents. X falls is where vehicle-related employees and we will this ground operate a low-impact performance safe Lower X safety minor conclude slips environment paramount by importance. recordables in quarter OSHA at lost discussing and resulted our like utilities. of our Ensuring of

plans As companies for the expanding more facility includes are our plans to address observed year Other have to our to a and year-to-date. standards. result, each training we they we issues simulation-based underway of ensuring enhance improvement This opportunities action our include safety needed the are safety ensure addressing examples reviews adequately offer at employees. for to of operating operating revisiting our have areas to that

We to safety that drive hard expect. we working are levels the to performance

our provide activity second will on I to Jeanne now to quarter. our performance it additional and in financial the color turn over regulatory Jeanne? discuss

Jeanne Jones

update project energy the schedule, progress by our the outlook 'XX Philadelphia Today, value and the rate ongoing area. financial premier in as second Calvin, the morning, I'll that highlight I also and XXXX, second our you, everyone. of modernizing with infrastructure good case for along exemplifies on to an critical sustainable commitment will Thank T&D quarter the cover company delivering our half

our X, operating earnings. Slide on Starting we quarter-over-quarter show adjusted

per the the share As Exelon earned of provided with prior $X.XX in of mentioned, lower $X.XX the the period. were same versus per $X.XX in in the Results line in over XXXX quarter second $X.XX results second in expectations the right of call. quarter earnings of XXXX, quarter reflecting share second Calvin

$X.XX expense relative some in Earnings associated the as higher interest and the weather $X.XX was second as ComEd. depreciation mitigation costs with quarter rise of net same levels are credit of holding the $X.XX driven distribution to of at and a at company higher period as investments as utilities of balance well of to and transmission carrying to debt rates by well lower due incremental in the at year higher partially of our carbon primarily interest the PECO. of at offset by unfavorable $X.XX This related last rates

earnings operating impacting XXXX. reflecting are $X.XX mild where we Through earnings the nondecoupled first our year quarter with full performed This first weather of of said. jurisdictions, how delivered exactly projected we we the another of earnings. XXXX, half share, the of per is line Despite XX% half through results in

PECO's rate case and cycle electric XX-year to on rate as ahead as X strong midpoint well of contribution rate we effect guidance from formula a treasury current approximately that relative rate the its ComEd. EPS year formula of at range. in of higher operating ROE quarter, $X.XX saw QX third realized XXXX rates of next ComEd's the with quarter XXXX and in another distribution our rate Recall projected of of expect to XX% earnings distribution Looking uplift $X.XX timing $X.XX be growth

transmission be year, higher and some also underpinning lower. to remaining earnings O&M will this expect expect fundamentals be growth the third timing offset the and by and taxes. interest, results quarter we Net we of distribution While 'XX

under fourth its expected quarter proactive absence BGE's impact fourth of and that of from reconciliation the growth and benefit occurred the derisking the onetime the 'XX, anticipated tax of reversal of and of the to first plan. 'XX 'XX quarter For expect year-over-year of multiyear O&M the earnings the for 'XX, we in timing recovery

As the that cannot order on 'XX, not for of the do until until we time. the record with BGE receive we reconciliation final BGE's December reconciliation associated earnings

levers to year CMC the the share. at and asset regulatory $X.XX balance. continue of with quarter earnings EPS year-to-date full per our depreciation the call, expect PECO we of to In of experienced with first earnings unfavorable the carrying O&M costs XXXX $X.XX On guidance impact line a range associated $X.XX full weather favorable platform, the across to on basis, be reaffirm year discussion the combination the offset we with of

exposure our months earnings within remaining, of guidance work to Through cost in you several we midpoint at storm increase of and continued rate customers benefit remain manage capital platform, as our the base The on to we'll of weather deploy expectations. deliver a track we the deliver control utility strong and earnings can range. or for across plans better the expect

from the the target the XXXX fully are range. be of XXXX expectation or we XXXX, growth better XXXX's midpoint and compounded EPS growth to that annual of reaffirming guidance with XX% through and operating midpoint regulated respectively, Lastly, at

Turning to Slide X.

there outlines application enable As Calvin the December investments X-month have the last front. Commission. that and Maryland to $XXX.X one reach earnings million expects some On provide support Pepco pathway, and extension proceedings, regulatory open support goal of net is X-year starting emissions its Maryland submitted so important case energy Service update X rate by Pepco the Public of new filing. XX.X%. filed, with and ready been status an Since the XX, the company call, developments climate-ready of XXXX current to period, May mentioned, revenue each Maryland's most a a a programs on over there multiyear plan cleaner zero the I'll reflecting on recent was ROE April climate to to XXXX. make the proposed requesting to a grid filing increase XXXX The inclusive technologies a

included million the like to approximately building mentioned, $XXX climate conversions for programs Calvin pumps half than are proposed technologies are plan, an dedicated to transitioning more customers solution PepCo's of for electrification the heat in example As incentive of equipment in sector. cleaner XX,XXX that

more to reinforces security from grid and more against modernized that Another threats. key weather enhancing installation through inject automatically anticipated into system full-time cyber more billion support jobs. detect reliability, the to than local spend category issues, than the these or the economy severe and Overall, $X.XX is grid equipment physical are of potential investments resiliency and of the dedicated protects grid more XX,XXX

distribution For center affordability for to expected The reported commitment the acceleration and XXXX. as focused future any as of testament to bill efforts assistance to years, in and as order XXXX brighter communities. keeping performance X state the Maryland, includes Pepco increase of June offset in a Maryland for which to XXXX, a customers. participation well customers alone its $XX true by utility the Pepco the front important is benefits best serve efficiency tax our customers. electric million of Equally the as in provided last as spanning reliability and XXXX of has energy multiyear powering Pepco is a of energy and approximately cleaner company's reliability, on programs, plan An to

Let in you me other also the remind of progress. electric cases distribution rate

a on A July First, revenue quarter Delaware in XXXX. for decision Power increase rate test in updated by implemented million Delmarva has to electric expected full permitted a refund. rates and second XX law, as based Delaware of an request proposed on case revised the period $XX.X is the subject

in test request revenue increase the expected the million their a an period, on revised first ACE of final order 'XX. Similarly, for $XX.X updated based quarter with

capital of X-year for enhance Utilities million, Additionally, $XX economic New master energy Future, a the accelerates approved Powering in portfolio region. which at receiving, projects Board the goals to designed X-month totaling and Jersey resiliency New after tracker reliability growth advance called and the Public the of Jersey's an customers, sustained plan ACE

Next, proposals ComEd milestones year. filed testimony having in the BGE initial rate surpassed earlier and their the plan of rebuttals received elements X multiyear to company's key their this intervenor support key cases, and

in calls, in to cases, are customers to orders December. investments states. plans goals plan energy August with to while both multiyear both scheduled earnings follow needed final prior on equity respective before discussed clean essential are BGE of the and service late evidentiary briefs expected provide their and to As begin hearings ComEd outline the rate In the meeting

XXXX schedule of District briefs procedural of multiyear of evidentiary a to Service the Public received DC with of staff in the milestones Pepco plan rate in by Columbia begin from be filing. Upcoming Public Service March filed XX October January and to on final second expected Commission hearing include in Commission its testimony the Lastly, XX. intervenor set

across step to we and Relationships process our are our communities and reach regulators, goals. of every with working jurisdictions states constructive, remain the shared together through our

we all energy be and expect found cases on equitable affordable of on in details by year, the manner. D.C. can mentioned, appendix. Maryland plans path our to resolution clear supporting Calvin and goals the climate Illinois, multiyear ongoing and the rate clean next and an in on through a As forward Slides XX More of rate X XX

Moving to Slide X.

serving and billion to meet and During for while the for quarter, transformation are on our the that of we the for second increasing clean capital continued energy electrification. grid the to energy our high preparing we infrastructure of are invest customers vital $X.X standard in have the These guidance XXXX. investments maintaining our of in benefit service track levels customers to

that about property. began substation the I'll PECO how partnering building Yard This XXXX. X currently Today, Civic new the modifications talk XX-XX PECO's project build retirement substation X kV the switchgear for of the to lines to in XX-kV to into insulated of a in includes transmission Schuylkill will million community Philadelphia transmission under allow civic Terminal $XXX substations installation is running at Civic and the new River. with lines neighboring XX-kV and commitment

on past river. It additional supply University in relieve and the reconfiguration is heavy substations, increase the substation reliability serve where low-lying through in side enable the expected has the the west following the of access the better and to new the area and also customers City thunderstorms. areas PECO increased distribution surrounding The resiliency capacity of flood will to constraints, to lines low been transmission restricted critical

substation. insulated is of Civic by be which will substation 'XX, modern the most second newest quarter energized, fully and the Once PECO's expected

less X land, substation to electrical That land. the in represents use. PECO open-air equipment with insulated allows on of required construction X XX% would a of X-acre XX% reduction a acres the to upgraded to substation plot build associated land than traditional While required have

the utilities Since project the customers, of the and civic city PECO has a agencies partnered the to its ensure has substation government such of nearby other the local the operational excellence customers Veteran construction inception, surrounding Center, riverbank. with vital Medical protecting on to is and Philadelphia, and and impact in minimal area, Philadelphia, University With as Children's waterway Philadelphia the the Affairs imperative. environment, Hospital Pennsylvania the of customers of Hospital

PECO utility, Exelon it. ready an to As deliver is

X. sheet conclude to Slide of balance activity. a will I review Turning with our

XXX cushion above strong to project and tax balance we metrics credit a to commitment through XXX we of an not inclusion maintaining downgrade anticipate being guidance demonstrating for As period thresholds its basis our in continue the our S&P range. consolidated sheet. a lower is to XXX end average corporate alternative minimum of our points at If basis over points the or reminder, Moody's on corporate that calculation, of of mitigated repairs XX%,

to on hopeful specific await tax and continue to the corporate year-end. have resolution We guidance minimum alternative by are implementation

Department XXXX, supported that of successfully BGE financing the investor deferral $X.X and PECO demand meantime, of in is the all strong see by our to payments our and continue is of a the debt minimum second we debt billion quarter, sheet offerings XXXX. balance for our raised of planned by the The issued the which tax with corporate for the attributes low-risk strength of nearly our for platform. needs financing associated we Treasury required completes From which more In for guidance to granting estimated points a the perspective, appreciation alternative implementation. notice tax until

on our no update line as earnings the guidance to make by $XXX million company the you. you plan. We'll in issue 'XX. equity change call, we at with to has of been Thank In continue progress there holding the last

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

Calvin Butler

great safely. we're online of teams XXXX. will challenge working once to most our excellence, our Jeanne. is community take we operational I accomplish severe daily. themselves the and which get in quickly dedicate to again the the you, remind pride weather and what when We investment customers some employees back to our in Summer Thank of embrace see activity,

ensure rate work services plans and we that equitable our stakeholders. proceed want and our are to ongoing the are to and the their to we transformation transformation we support energy cases, energy with in goals We listening manner. on focused right supporting investment As delivering of climate right the very an in meeting our affordable

understands strong. forward our investing much year, next financial and several path clear. of also range team capital After will XX% in billion our $X.XX for earning and priorities to per support the established this on earnings and must Efficiently it our range meeting $X.X The be guidance and deliver ROEs years guidance. to of share sheet our keeping X% the XXXX of $X.XX will balance

ways next investments by XcXi, our Exelon the we're the business. residents million investment And to change, throughout end-to-end challenges and support fund we round customers innovative finally, In change our in for cities. advance way our to our improving continuing Foundation, of life the for initiative to to look $XX while are of partnership looking communities place of or climate climate quality solutions an to innovative brought the with

day, For software this year, is have analytics were energy areas receive selected Every charging and vital reminded we air a in we that's it. happening, we're X have team track role. role to plastic the solutions. And play and to talented investments, incredibly transformation novel excited to spanning that be to like quality, a companies EV that reuse nonrecyclable

our Vice Chief Policy and Executive Colette Honorable be of us as We joining External Public announced President will recently that Officer. Affairs

foundation like build already brings a our here. equable by And have transformation addition got who leader we team ratemaking, team. she built an As energy energy in to on in expertise clean and the policy will be that strong help place, invaluable renowned areas us the she'll us

made our led supply. shaping particular, excellence. want like wide business and an support you, your inclusion Bridget, corporate Officer Chief Executive and and Vice President Reidy, across recognize our Bridget of in company, services of who leadership. retiring integral diversity, the IT is I strides played groups she in She variety to equity for organizational commitment in incredible and role also Thank that to September In Operating

utility, return makes values, us offers by interest. total your expected and its and Our uniquely team's supports that to distribution energy its commitment what shareholder is for transmission one the strong the of premier Thank as a to you, XX%. X% communities lives always, transformation leading

I'll now questions. turn it to Gigi for your

Operator

the first David line Instructions] Arcaro of comes from [Operator Stanley. Morgan from Our question

David Arcaro

Let's your see, so rate have expectations. progressed these relative speak the you and and wondering cases far to comment if could BGE how to

gotten when far, cases, in versus Just terms you have we've key overall staff at that had like look both how shaped of so you the expected? areas these intervenor what focus testimony up in the

Calvin Butler

walk I David, thank proceeding responses. is their have we're you Calvin. Yes, have with ComEd; as the of you. expect and us tell they're And through teams can Quiniones, to But of I'll This CEO ComEd. through planned. Carim of going we moving would forward. start the provided of who -- and Khouzami, Gil that President just And of process. them the and CEO you each BGE, the of both highlights as President kind Gil some what Jeanne mentioned, I'll and and take shareholder time can ask with you

Gil Quiniones

aggregate for our pension filed center and The the to positions direct ICC programmatic communications upgrades, not out, those interveners case testimony our playing on case mentioned, position ComEd. capital and challenges They ROE their spending. continue did their in investments. on Gil from maintained Their still the and is The and their will and waver is we proposed rate private process certain IT make as Calvin and systematic network LTE staff projects, fiber in asset. This Yes. May. from in initial capital in

regular and of questions any provide clarification. answer staff with interveners and additional their information, We have provide continue to to meetings

Calvin Butler

Carim?

Carim Khouzami

BGE. Khouzami Carim from is This

staff As the with Calvin of has is expected. of XX% about mentioned, a case as come proposal ask. The our in proceeding

help some proposed and the BGE change first electrification of building that of state system surround gas expected, its meet climate the As some goals. areas ROE for debate in to programs time investments our the

of staff the OPC One it of our requests. plan. reconciliations, suggested is as in other a intervening you multiyear being know, Maryland parties and to and in the about XX% point out, Both done things first time

So again, that well. is proceeding

all well. So all, in going

expected final September, have early the with Calvin order and Jeanne August, As end hearings mentioned, the more in of mid-December. we at

Calvin Butler

And environmental just goals that. David, as and would climate opportunities. well built economic Both their the meet plans I states add helping on creation development were to and job as

been I So don't engaged underrepresent stakeholder all have and meeting with in process, companies the both very want that stakeholders. because process to

So itself orders a proceeding, expect process end the of out. year. we it's that the will both But play for companies again, by

David Arcaro

helpful issues, the do see an there any through really fully likely? That's commissioners partial new both of you are settlement? appreciating more settling expectation opportunity settlement, is on a case of just full kind strategy that in and see color. for Or And this litigated states, kind

Calvin Butler

great David. No, question,

critical their multiyear to from for that process it's opinions We both formula X-year Maryland, process time stakeholder And it for years, rate that, fully out. through voice to Gil, first and let everyone Carim play as recognizing important they've is mentioned, them it's a expect and to that. the moving to reconciliation plan, that we'll feels see through see in that the the had and and -- next chance X a it

see the we way year. So all the do it to playing end of out the

Operator

line Kennedy of comes James from Our the question next from Partners. Guggenheim

James Kennedy

portion I'll purely Shores. that of this any and start plan for falls other current like color incremental? see potential we the morning, on the with guess So in transmission BGE? I the Is Brandon opportunities secondly, $XXX other EMAAC the million retirements these in as quantum And start the announcement to

Calvin Butler

Thank you, James.

any First have We additive all of do the plan. not that. to current off, it is

to As want never we've to anything to get we that going put until we it. you conveyed previously, were were striving we

David us additional strategy oversees or into our insight to of EVP Velazquez, So across this today provide Operations, with that's transmission I oversight important. our because David have Exelon.

So David?

David Velazquez

what has open. is currently transmission reinforcements the reinforcements in window Dominion the also Brandon be that Shores are Yes. Thank an you, that aware transmission for open PJM you to Calvin. question. help for needed needed, an That additional call load growth James, they And Besides thanks territory. open may the --

range We October September, window range longer-term initial that PJM will their $X that provide that of have enhancements both frame recommendations help in short- in submitted December in year. in billion. over $XXX projects and from, the I'll are meetings open say, PJM expected needs smaller time this X different proposals decision an meet well the from million to of readout And with an Board committee large

legislature needed offshore in requires wind, In July July a then of for by there's a to year next to for are of solicitation the offshore back to by reinforcements make that, X transmission New -- report offshore Jersey transmission addition issue Maryland for And in to there reinforcements there are and Maryland. that 'XX. the PSC both also in legislation and wind

with again, occur, generation the predict Brandon ensure just we what do ready And grid. need cannot of the So to retirements, not reliability are growth. but retirement, do Shores wind, to to load if but the offshore we they

James Kennedy

Excellent. second on can we And update an question franchise real agreement then just get ComEd process? quick, the

Calvin Butler

quo. it's Right Yes. now, status

You And team. an has in on had and in at Mayor been team have involved own. can provisions we we year, very earlier administration's parameters the appreciate closely what with the team with new at several he own, been and working time, administration trying really, the calls. franchise. with his talking team of And discussed assembling have very think come coming is the Gil his is you looking this Mayor this previous line, proposal, the I is as make this to you issues. agreement Lightfoot the that that to and him it franchise the on But know, the and ComEd we're with that on about those

to there? else add have you Gil, like would you'd anything

Gil Quiniones

only I for agreement when will the we to Chicago. conversations them, is in meantime, engage they thing Calvin, existing a us, are franchise informed franchise we initial had with they continues. in and our ready, negotiations want and restart The new our had have that But add,

Calvin Butler

I And us. important recently the that's He been that want was for Subcommittee Mayor. just named Environmental to addition, Gil Transition to Mayor. has just And in partnering recognize with for very the this Justice

the a So team in what think I more franchise the has are understanding new that's why play plugged administration. they're directly the that will priorities their important new into is And And administration. with agreement. of as

Operator

line comes Paul Bank question from from Our America. next of of the Zimbardo

Paul Zimbardo

more I just get bit to little a First, wanted clarity.

Does this fully SEC earnings briefly -- matter results comment resolve you investigation? could you legacy that in that that If on disclosed you out. the that just SEC

Jeanne Jones

Paul, it's Jeanne.

contingency a still So did the loss was where we a SEC investigation ongoing, point reach probable. but is

did we So that. book

treated initial It's a it's is the that we nonoperating item see nonrecurring treated how in to onetime earnings. amount. can nonoperating had You similarly DPA

began So investigation it's to continuing, XXXX. is in but the it that related

original So investigation. the same

Paul Zimbardo

wanted Great. stream. to if that's original Yes. I just Okay. clarify

Jeanne Jones

Yes.

Paul Zimbardo

And Great. you then term, about second, think plus. the as we XXXX just reaffirmed long the Okay. expectation, midpoint I better or know

keep like otherwise, the those kind offsets, Could stubbornly areas up of XX even some parent ticking combat or costs? Just since the of you whether to update. rates basis higher points discuss cost last of interest

Calvin Butler

and start to it turn I'll Well, I'll over then Jeanne. Yes.

always, didn't to a costs, immune prices But As our that and have very we we -- aren't across been as managing to separation. you the seeing are alluded change are our the that on upon the country. company, is customers that aggressive going higher-cost commodity in

Our first result didn't and that was foremost our that costs up of priority ensuring go a separation. as

it's the up the to X.X%. the the CAGR our I of important of O&M growth organization of to gone costs for and has And say portfolio, and rationalize to ways organizational ] flexible only becoming let to our And creating on we've [ and of be me work -- XXXX, really our our customers. to XXXX. and is that work to real our practices the footprint. arrangements that look automated plan, efficiencies. We've course in X% transmission affordability note just We've customers' to over estate to tell you in year-over our our our a course continued focus to over since needs. office over some automate response for But more say And operations that things processes you realigned done. continue we've harness centralized that primary nimble best our efficient

we're a we We're transmission on that, as as the done. team just not and going as operate to focus a to really Exelon, utility pure look said company, continue how scratching Having leadership distribution surface one to we're that. and at

what out. So is Jeanne? day our that is and focus in day

Jeanne Jones

terms O&M to helps reduce think the the Yes, and that finance investments, also preserve of the minimizes said, I the that and cash so redeploying getting business. well all of we back cash, that to need that's into and it our in amount which

cases, parent at as is we're add the the the at interest But ability rate other hedging. so stepping whole how recover only interest important. rates, there the engage we -- new sort operating do thing we company, on the of will new in I to is the companies, pre-issuance do into incremental The

a able heading of being certainty into ahead so with And time to expense is, lock is in that interest year what important.

So as and us 'XX, we'll can continue expect those to practices well. do that heading issuances that future into us helped for you

Operator

from JPMorgan Our of from Jeremy line LLC. question the Securities, comes Tonet next

Aidan Kelly

Kelly This is Jeremy. actually for on Aidan

to you your ultimately how equity? million $XXX contribute outline this current able plan metrics Just credit your wondering, targets? would be to relative could and remaining thresholds And to

Jeanne Jones

Sure. Jeanne. It's

is the current and through our we average to it And take that months, XX%. the XX% in of and decoupled a And So look on were XX%. cushion shown we platform, our mechanisms, time of slides that rate it's as downgrade to as scale, revenues. prior just XX reflection low-risk we've but have lightly, recently 'XX those don't of that's 'XX at I XX%. about talked and the think right, is us our in as credit reminder, be script, Moody's afforded at as And threshold I our -- XX% published forward-looking a period, metrics, why kind expect -- at S&P diversity, that we we

basis or put that manage low-risk XXX that of we to XXX above all that. But So no profile. all -- generation, that at of together a in very results like points

we're published. the the rate as just agencies XX%, So at

the And that of or get regulations We we're final the regulations mitigated, we alternative minimum corporate that we'd year. closer expect be to XX.X%, by mid-high, XX%. at at the that hopeful to know to If the be least like preliminary end XX%. tax

relates equity. You to asked how that our

to change We $XXX plans million. in have no related the

tax way, got So alleviated, corporate minimum said we the another alternative that if we'd million. $XXX do still

And between do now sometime expect XXXX. can so and you us that to

there thing XX% of over timing the as will sort calculation. just to is I'll there and Moody's some is in the at because differences. trend little relates that however, say difference last it a is Moody's, S&P bit of calculation, of cash S&P, The the horizon. time

'XX -- coming for flow some 'XX. -- of we neutralize in, want So and that's well. really rate But that's average be end, end by end timing to in timing and cash back we driven in XX%. of 'XX the formula that why higher and of that's low in true-up 'XX such average of sort the the we of with And 'XX at coming as expect some on on sort sort ComEd, because the then that the give to you 'XX, the you

Operator

comes line Goldman Davenport question from Carly next the from of Our Sachs.

Carly Davenport

You had this of mild levers weather O&M mentioned to kind offset year.

what So change a bit expectations? a to of tracking your of could the from see O&M little the balance to for you on talk about And how O&M? been you relative rate just expect then costs have perspective year

Calvin Butler

So philosophy the inflation. that initially, we will a always maintained we've O&M rate below of drive costs

go benchmark. And was has over X% traditional that keeping flat warm of the possibly rate objectives I of allows we we've when anything up, Because always PECO in us to is table, as meeting what The which or XX% XX% else -- and you who been experiencing been unseasonally that around or the O&M have decoupled. that -- so. flexibility keeping around we're of our are keeping that and Now or levers sitting driving about the years, our And it to winters our or that are seeing talk rate base the our like. last trending over doing several X.X%. inflation mentioned, CEOs, strong

of a weather that's our impacts about So PECO the gas said largest doing done. utility Jeanne? talking on focus so. that, costs. Having manage primarily off we in foot you're the those as will really take continue lot to that never We the

Jeanne Jones

the X a ComEd to those rate advantage levers, true-up PECO, PHI vacancies, to labor across and was taking addition had But and BGE platform, mostly whether for on PECO combination given has had at And companies, lower favorable that, contracting O&M. Yes. And formula as saw T&E 'XX, of O&M it relates we spend. the depreciation. some we the operating weather of across offsets in it then

last benefit combination probably And had that of it's a this sort then we not year the relative it all reg asset. $X.XX interest costs, was which because rate $X.XX was ComEd the So the and was year around we year. that deposit a of to have did Really, commission. the last for up weather, and at of the of large end were X year this of the benefit carrying back built this on

were last an that incurring So we on weren't though interest we getting year. interest offset, even

And guidance last on to at in still it's while cost and year reset carrying now the However, year, that, both have this incurring rate X% because this we reg the asset year. deposit to ICC year. larger we're this benefit a the the

And an to we guidance, so baked into that plan. are wasn't to now relative offset having that, our

So that's of probably $X.XX. $X.XX about the

to that just those to all we're there. the Calvin's can And on the put starting you down scratch we drive to we're that's how offsetting of focus So together, costs. point, $X.XX continue And just surface else we do weather. to what

Carly Davenport

mentioned you maybe any can is of and Got year. getting temperature I deduction preliminary your That's expecting minimum then there the end at kind know this there by factors share to But on the clarity color corporate just discussions tax. that included? from it. tax gating the being on of the repairs you the And helpful. to get least that around

Jeanne Jones

remain probably and faces a not say There that capital-intensive utility just to industry. much the being would accounting technical it's discussion capital-intensive in share. to I ongoing industry our nature the else discussions. of utility the and are receptive to of the that some stakeholders overlays very -- regulatory that Their differences

remain it to if mention that have script, won't just in But think you're clarity more don't point. data sort we'll out guidance other you said, you So there's be that end did some this this we penalized tax, earlier discussions June just pay hopeful was year. come needed." the the subject I did receptive year. one of so the understand of we guidance discussions you and We see and in and interpretation "Hey, if that basically more And ongoing by ongoing,

Operator

next Our line Chopra Evercore of Durgesh from question comes the ISI. from

Durgesh Chopra

rate just I go to want So quick. to case back real ComEd the

It output were seems from and using ROE calculation they're the methodology last an on using the itself. the and kind year. of some rates staff And like of same as us of update expecting

Any there progressing? Just do would thoughts that how be you appreciated. see

Jeanne Jones

Yes.

ROE. still as still mentioned, strong a think argument putting our come. to Gil around more forth I proposed We're

change it appears was clear in just they CEJA, to their mentioned, rate was that formula you required. formula, of did As sunset which of of position. the not It the be the sort continuation

the So our market current feel filing cost the we taking offers ROE actual that appropriately of account reflects into an conditions. equity,

we'll So through that to work continue process.

proxy testimony. which electric there's point data that think also and the then is staff point there's data group, and the I another

continue point. to no But this through as we'll them. of that with work So changes

Durgesh Chopra

Got it.

before get It like year. end here the we'll an update of Okay. the sounds

I views the Just and question room, supply anybody in switching chain, Calvin have or there. else on would gears, a love your

we've Just seen on media several shortages. reports transformer

a plan, So say, maybe equipment you CapEx on can And let's -- you how shortages? ago? tracking that broadly, you is can XX shortages, But broadly, obviously. have comment sizable comment labor versus, this months year just

Calvin Butler

our identify of but is being one that able and you advantages leverage to Yes. suppliers, of not would the, that I access ones. new I scale size current we're would of our tell only say, the platform our to

not have our transformers. shortage So in a seen directly to your question, we

a workforce on this other plan. things shortage are impacting in seen not us have executing that or capital We any

time that frame wasn't what to planned the that in attention do work. customers Now pay give as new businesses is our to, looking some coming for that we part of online initial because online, are our of ability that

our top issues those supply we we that stay others on same and of with are experiencing organization. date, working that So But to made. not

Jeanne Jones

think of not the greater we've rate, of our $XX X% talked I than of spend. that before, one of And project the profile about billion, as one benefits is

to and to So the track experience allows do on bite be any issues the that ability us able in extent portfolio deliver. stay to sizes of manage we to kind

Operator

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

Calvin Butler

for I always focused we're you And leadership and the see to by plan. delivering today. comments table, on much. that today and want and the made very around us just I you you thank thank Gigi, all team From joining Jeanne the

always, concludes as interest, appreciate this your our and So call.

Operator

today. us Thanks participants joining our presentation. for concludes our all This to

You may now disconnect. Have a good day.

Exelon (EXC) 2 Aug 232023 Q2 Earnings call transcript