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    Exelon Corp (EXC)

    Q1 2024 Earnings Summary

    Reported on Jan 10, 2025 (Before Market Open)
    Pre-Earnings Price$37.84Last close (May 1, 2024)
    Post-Earnings Price$38.45Open (May 2, 2024)
    Price Change
    $0.61(+1.61%)

    What went wrong

    • Regulatory uncertainty in Pennsylvania could impact Exelon's financial performance, as the approval of PECO's storm mechanism and weather normalization adjustment is not guaranteed, and any delays or disapprovals by the Pennsylvania Public Utility Commission could negatively affect earnings.
    • Delayed approval of ComEd's grid plan in Illinois may impact Exelon's financial results, as the timing of the approval is uncertain and not expected until December, which could delay rate implementations and investments.
    • Rising interest rates could increase Exelon's financing costs, and although the company has hedged some exposure, there remains corporate exposure to manage, potentially impacting earnings if interest rates continue to rise.

    Q&A Summary

    1. Impact of Interest Rate Movements on Financing Plans
      Q: Will recent rate movements impact your financing plans?
      A: Jeanne Jones explained that Exelon completed significant corporate financing in the first quarter and had pre-issuance hedged a significant portion to mitigate interest rate risks. They termed out about $500 million of short-term debt, bringing it down to their typical level. With these actions, they do not expect impacts relative to their base plan despite movements in rates year-to-date.

    2. Timing of ComEd Grid Plan Refiling
      Q: Could the grid plan refiling be resolved sooner than December?
      A: Calvin Butler stated that they anticipate the decision on the ComEd grid plan refiling by December. The Illinois Commerce Commission voted on an interim order to decide by December, and an administrative law judge set the procedural schedule accordingly. While earlier resolution would be positive, they do not expect it before then.

    3. Prospects of PECO Rate Case Approvals
      Q: What are the prospects for approval of the storm mechanism and weather normalization adjustment?
      A: David Velazquez noted that both mechanisms have been used or approved previously in Pennsylvania. Four of the six gas utilities already have a weather normalization adjustment, and the others have applied for it. Major electric companies in Pennsylvania have similar storm reserve mechanisms, so these are established practices in the state.

    4. Data Center Development in Pennsylvania
      Q: Does the natural gas backdrop support data center development in Pennsylvania?
      A: Management affirmed there is significant activity around high-density load growth, including interest from data centers in the PECO territory. They have the infrastructure to support this growth, both in generation and transmission, though reinforcement may be needed in some areas. Pennsylvania's aggressive economic development efforts and status as an energy exporter support opportunities for growth and electrification.

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