Earnings call transcript: Exelon Q2 2025 misses EPS forecast, stock dips

Exelon Corporation, a utility giant with a market capitalization of $45 billion, reported its Q2 2025 earnings with adjusted operating earnings of $0.39 per share, falling short of the $0.41 forecast. This marks a 4.88% negative surprise. Revenue also missed expectations slightly, coming in at $5.43 billion against a $5.45 billion forecast. In response, Exelon’s stock saw a pre-market decline of 0.7%, trading at $43.95. According to InvestingPro’s analysis, the company maintains a "GOOD" overall financial health score, despite current challenges.

Key Takeaways

• Exelon reported Q2 2025 EPS of $0.39, below the $0.41 forecast.
• Revenue reached $5.43 billion, slightly under the expected $5.45 billion.
• The stock dropped by 0.7% in pre-market trading following the earnings release.
• Full-year EPS guidance remains at $2.64 to $2.74, with a target of achieving the midpoint or better.
• Exelon plans significant investments in transmission projects and large load connections.

Company Performance

Exelon’s Q2 2025 performance showed a decline in earnings compared to the same quarter last year, where it reported $0.47 per share. The company attributed the decrease to several factors, including higher distribution and transmission rates, a ComEd timing reversal, and increased storm costs. Despite these challenges, Exelon maintains its full-year guidance and continues to focus on strategic investments in infrastructure and innovation. The company has demonstrated remarkable stability in shareholder returns, maintaining dividend payments for 55 consecutive years, with a current dividend yield of 3.62%.

Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and exclusive analysis for Exelon, including detailed Fair Value calculations and comprehensive financial health scores.

Financial Highlights

• Revenue: $5.43 billion, slightly below the $5.45 billion forecast
• Earnings per share: $0.39, down from $0.47 in Q2 2024
• Full-year EPS guidance: Maintained at $2.64 to $2.74

Earnings vs. Forecast

Exelon’s Q2 2025 EPS of $0.39 fell short of the $0.41 forecast, resulting in a 4.88% negative surprise. Revenue also missed expectations by 0.37%, coming in at $5.43 billion compared to the forecasted $5.45 billion. This performance contrasts with the company’s historical trend, where it has often met or exceeded earnings expectations.

Market Reaction

Following the earnings announcement, Exelon’s stock experienced a 0.7% decline in pre-market trading, reflecting investor disappointment with the earnings miss. The stock traded at $43.95, moving closer to its 52-week low of $35.94. With a beta of 0.47, Exelon generally trades with low price volatility, typical for utility stocks. InvestingPro data shows the stock has delivered a solid 23.63% total return over the past year, demonstrating resilience despite market fluctuations.

Outlook & Guidance

Exelon has reaffirmed its full-year EPS guidance of $2.64 to $2.74, targeting the midpoint or better. The company projects 5-7% annualized earnings growth through 2028 and plans to invest $38 billion in infrastructure, with an additional $10-15 billion identified for transmission work. Nine analysts have recently revised their earnings expectations downward, though the consensus remains positive with price targets ranging from $37 to $52 per share. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels.

Executive Commentary

CEO Calvin Butler emphasized the need for certainty in utility-owned generation, highlighting state-level energy policy developments. CFO Jean Jones noted the hybrid approach between regulated generation and restructured markets in half of the PJM states. Both executives stressed the urgency of adding supply to the grid to meet growing demand.

Risks and Challenges

• Supply chain disruptions could impact project timelines and costs.
• Regulatory changes at the state level may affect operational strategies.
• Market saturation in some regions could limit growth opportunities.
• Macroeconomic pressures, such as inflation, may increase operational costs.
• Weather-related events pose risks to infrastructure and service reliability.

Q&A

During the earnings call, analysts inquired about Exelon’s interest in utility-owned generation and the potential impacts of state-level energy policies. Executives also addressed questions on the company’s strategic partnerships for transmission projects and the expected growth in large load connections.

Full transcript - Exelon Corporation (EXC) Q2 2025:

Gigi, Event Specialist: 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.

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

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

Good morning, Andrew, thank

Calvin Butler, President and Chief Executive Officer, Exelon: you very much. And 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 $50,000,000 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 to $2.74 per share.

Now storm seasons always highlight the talented and committed employees that make up the Exelon team. 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 numbers one, three, five, and eight 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. 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 state’s 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. 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 clear 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 and growth low demand growth and when states weren’t yet facing significant turnover in their generation supply driven by economics, policy, and technology.

But 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 quickest 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 a savings for customers with the temporary cap on pricing resulting in close to $3,000,000,000 saved relative to an uncapped outcome. But 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 gigawatts and customers remain in our queue to study another 16 gigawatts 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. And 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 $1,000,000,000 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 $38,000,000,000 through 2028 with an additional 10,000,000,000 to $15,000,000,000 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. By earning a fair return on equity of 9% to 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% to 7% with the expectation of delivering at the midpoint or better of that range. I will now turn it over to Jean to provide a more detailed update on our financial outlook and rate case activity.

Jean?

Jean Jones, Chief Financial Officer, Exelon: 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 2025 compared to $0.47 per share in the same period in 2024, reflecting lower results of $08 per share over the same period. Earnings are lower in the second quarter relative to the same period last year, primarily driven by $03 of higher distribution and transmission rates driven by new rates in effect.

This favorability was offset by 7¢ of ComEd timing, which reverses most of the favorability seen in the first quarter due to revenue shaping and timing of O and M spend relative to 2024. There’s 4¢ at corporate attributable to our customer relief fund, dollars $0.03 of higher storm costs at PICO, dollars $0.02 of higher interest at corporate and PHI, and $02 attributable to the recognition of Pepco Maryland’s first NYP reconciliations for rate years one and two in 2024. The remaining 3¢ 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.

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 up 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 to $2.74 per share with the goal to be at midpoint or better. Finally, we have reaffirmed our annualized earnings growth rate of 5% to 7% through 2028 with the expectation to be at the midpoint or better of that range. Turning to slide six, I will review the limited base rate case activity across our platform. We received intervener testimony on July 25 on the Dalmarva 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 opened for rebuttal testimony in September before evidentiary hearings are held in November. An order is expected in the 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. An order is expected by the end of the year.

At ComEd, our first reconciliation under the new multiyear rate plan framework is underway. As a reminder, we filed for a 268,000,000 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 $6,000,000 related to a positive 5.3 basis point adjustment to our return on equity from our performance metrics. In initial testimony filed on July 15, SAF recommended a $108,000,000 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 towards the remaining rounds of testimony, including our rebuttal testimony due next week.

Finally, in Maryland, we continue to await decisions on our final reconciliations from the first BGE and Pepco Maryland 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’ interest in balancing affordability, reliability, economic development, and the state’s energy transition goals. Finally, 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 $725,000,000 and $650,000,000 in the second quarter respectively. 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 $700,000,000 of planned equity needs for 2025 via our ATM, issuing $175,000,000 in shares and pricing an additional $525,000,000 under forward agreements for the issuance later in the year. In addition to derisking 2025, we’ve also priced nearly $160,000,000 of our equity needs for 2026 through forward agreements using our ATM, which we renewed an upside in the second quarter to cover our needs for the current four year plan. We continue to project 100 to 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 language that incorporates repairs for calculating the corporate alternative minimum tax, which will lower energy costs for our customers. As a reminder, 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. And 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 Chief Executive Officer, Exelon: Thank you, Jean. Closing on slide nine, we remain focused in 2025 on our four core areas to create value for our customers, jurisdictions, 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.

But storms inevitably bring disruptions. When that happens, our team works tirelessly to bring people back online as quickly as possible. 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.

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 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. But with the extent of investment needed in the grid, not just from new business, but from connecting new generation to serve it and from ensuring reliability and resiliency amidst more challenging weather conditions, affordability requires every tool we have and new ones as well. 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 $50,000,000 in customer relief for low and middle income customers this summer. And 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. 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% to 7%. We have a built platform and a culture of excellence over the last twenty five years And we are committed to using it to deliver consistent growth and long term value for our communities and shareholders for the next twenty five years and beyond.

Gigi, we are now happy to take any questions.

Gigi, Event Specialist: Thank you. Our first question comes from the line of Paul A. Zimbardo from Jefferies.

Calvin Butler, President and Chief Executive Officer, Exelon: Hey, Paul.

Paul A. Zimbardo, Analyst, Jefferies: Hi. Good morning, team.

Jean Jones, Chief Financial Officer, Exelon: Good morning.

Paul A. Zimbardo, Analyst, Jefferies: Hi. Thank you.

David Arcaro, Analyst, Morgan Stanley: I think just to kick it off,

Paul A. Zimbardo, Analyst, Jefferies: and 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 PGM. 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 Chief Executive Officer, Exelon: Yeah. Thank thank you, Paul. I’ll this is Calvin, and I’ll start off with you. I would say you’re absolutely right. Our governor signed in and stepped in.

And 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 efforts specifically helped in capping what our customers would have otherwise had to pay and that was roughly about $3,000,000,000 in savings. So that’s significant. And all of our, and I shouldn’t say all, 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.

But as we talk about, you have battery storage at the T and D level being offered in Maryland. You have generation utility owned generation considerations in Delaware. You’re looking at it in New Jersey. And to your question, which is ripe? It depends on how quickly they are looking to move and where is the need coming from.

But 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. And 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?

But in the meantime, we do need to offer short, mid and long term solutions in this process. I would look to Mike Inocenzo, our COO to see if you have anything you’d like to add there.

Mike Inocenzo, Chief Operating Officer, Exelon: 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 megawatts of power. We’ll know that by October whether that’s met by the competitive market and I think if that’s not met, that would probably be the next time the timeline to trigger some additional action. Thank you, Mike.

Calvin Butler, President and Chief Executive Officer, Exelon: Paul, does that answer your question?

Paul A. Zimbardo, Analyst, 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?

Jean Jones, Chief Financial Officer, Exelon: Yeah. 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 Chief Executive Officer, Exelon: And 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 A. Zimbardo, Analyst, Jefferies: Excellent. Yes. No, I appreciate that. Thank you, team.

Calvin Butler, President and Chief Executive Officer, Exelon: Thank you, Paul.

Gigi, Event Specialist: Thank you. One moment for our next question. Our next question comes from the line of Anthony Crowdell from Mizuho.

Calvin Butler, President and Chief Executive Officer, Exelon: Good morning, Anthony.

Anthony Crowdell, Analyst, Mizuho: Hey, good morning, team. Paul Eze took my PJM question. Just if I could look at the 10,000,000,000 to $15,000,000,000 of potential transmission opportunity, when do we or timing on when I could see that move into the base plan for the company? Is that on like a fourth quarter refresh? Could you give us some more timing of when that becomes part of your base plan?

Jean Jones, Chief Financial Officer, Exelon: Yeah. Hey Anthony, it’s Jean. So we you’re right. We would normally do that in Q4. And the reason why is we have the cluster study that I mentioned.

So we’ll have more clarity on that in the fall. We have ComEd’s grid plan that has to be filed in ’26, BGE looking at its next filing. So we like to take all that together including the transmission and build that into the updated plan that we present to you on Q4. All of that will be contemplated in there including the new business. And I think if you look back in the last couple updates, we’ve typically updated about eight to 10% every four years and I think transmission has gone up about 30%.

So you can expect that transmission will continue to be a big part of our roll forward going forward. And then 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. And then Calvin also mentioned that we’ve organized ourselves under our head of transmission, Karim Kuzami, to also look at other competitive types of transmission. So, as those opportunities are not in the 10% to 15% and we would only put that in as you would expect from Exxon until we have more certainty on those.

But those are opportunities that we continue to work towards.

Anthony Crowdell, Analyst, Mizuho: And financing that 10 to 15%, a good rule of thumb, 30 to 40% equity? Or I’m curious what would be a good rule of thumb to finance that incremental, CapEx?

Jean Jones, Chief Financial Officer, Exelon: Yes. We have been using a rule of thumb of every new dollar is about 40% equity.

Anthony Crowdell, Analyst, Mizuho: Great. And then if I could jump to, weird. I don’t know what paper it was. I had a big story on, I think, the Illinois governor and quantum computing. And, like, seems like I apologize if I mispronounced his name.

Governor Pritzker is is very big in quantum computing. Is that creating a bigger opportunity or a unique opportunity for ComEd that maybe, it’s different than the data center thematic that’s going through the rest of the country?

Calvin Butler, President and Chief Executive Officer, Exelon: Great, great question. And 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. And the state of Illinois is very proud of that. And you heard me allude to in my comments, Anthony, that the CEO of Sci Quantum said that but for ComEd engaging in that process, it wouldn’t come to Illinois.

That’s very significant. And it goes into that partnership. So 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 wanna be close to what they’re doing and benefit from the quantum computing efforts. And it was a several day conference on exactly that. And once again, it’s not built into anything that we’ve provided you because once we’re gonna be very transparent on the when and the who. And when we roll it forward, it will come for you.

But that’s separate and above anything that we’ve talked about.

Anthony Crowdell, Analyst, Mizuho: Great. Thanks for taking my questions guys. Really appreciate it.

Calvin Butler, President and Chief Executive Officer, Exelon: Thank you.

Gigi, Event Specialist: 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 Chief Executive Officer, Exelon: Good morning, David.

David Arcaro, Analyst, Morgan Stanley: Hey, good morning. Thanks so much. Maybe on, let’s see, the generation side of things, we’ve obviously seen some of your peers express a willingness to build regulated like or contracted generation. So wondering your current thoughts on whether that might fit into your model, is that something you would consider?

Calvin Butler, President and Chief Executive Officer, Exelon: Simple yes. And it’s based on how it’s done. Policy matters in this process. Right? And we go back to those three tenets.

We need certainty. We wanna make sure we have a clear understanding where the states are getting in control and we also want to know what the customer benefits. But we want to be part of the solution and we do believe in that portfolio approach because what you’re finding right now, David, is that the cost, the supply is not meeting the demand. So what can we do to be part of that solution? But how it’s done does matter.

And 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 and we’re engaged in those discussions every step along the way. And we want to partner and we will continue to partner with PJM. But we do see it as an and, the competitive markets and regulated generation being part of the solution.

Jean Jones, Chief Financial Officer, Exelon: Yeah, and we think the regulated generation in partnership with our states is the best way to do it. So again, the states need certainty. The PJM works, the competitive markets, if the states don’t wanna 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 that, for their customer set, for their state.

And and in working with them, we can provide that control. And then it provides customer benefits. We know we have cost of capital advantage and in in doing it and proactively planning, you can get we believe there’s customer benefits there. So that’s why we believe that’s the right way to do it. And look, half of PJM states today already have sort of a hybrid approach between some sort of regulated like generation and the restructured market.

So we don’t this isn’t new or novel and we think our states should just capture the opportunity, get that control, the certainty, and the customer benefits, and and we stand ready to partner with them and and and move forward.

David Arcaro, Analyst, Morgan Stanley: Okay. Great. Thanks. I appreciate the color. And then 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 Chief Executive Officer, Exelon: We talked about, we see significant activity in Illinois and we talked about the second cluster study that’s being presented and started in August which will provide more clarity as we go forward. And then let me just be very clear, we’re also seeing data center activity across our other jurisdictions, Pennsylvania, Maryland. So this is not just one state. You just see Illinois being in the top five of what we’re doing. So understand it’s driving forward, and you’ll see more of those announcements coming in.

But doing it the right way with reliability in mind is key. And I’m looking at Mike, I’m going ask Mike if he’d like to jump in there.

Mike Inocenzo, Chief Operating Officer, Exelon: Yeah, the only thing I would add is timing, as Calvin, as you mentioned, so we’ve got active cluster studies going in Illinois, we’ve got active cluster studies going in the Mid Atlantic. We expect results in the third, fourth quarter, you know, once you complete the cluster studies, you have commercial discussions with the different applicants there, so I think you would start to see in the third and fourth quarter some announcements as a result of those cluster studies coming out.

Jean Jones, Chief Financial Officer, Exelon: Yeah, and we are watching the other large load tariffs across the states. ComEd, 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 and get more clarity and certainty there, but also protect the the other customer base. So just memorializing this use of cluster studies, recognizing, you know, state certified economic development priority projects, and this would all be for projects 50 megawatts or more. So it’s pretty consistent with what you’re seeing in other states, but would be the most recent that we filed and the ICC is gonna seek, I think, opinions and stakeholders on that as well.

David Arcaro, Analyst, Morgan Stanley: Okay, perfect. Thanks so much.

Gigi, Event Specialist: Thank you. One moment for our next question. Our next question comes from the line of Carly Davenport from Goldman Sachs.

Carly Davenport, Analyst, Goldman Sachs: Hey, good morning. 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 and what the potential gating factors potentially impacting that cadence would be?

Jean Jones, Chief Financial Officer, Exelon: Hey, Carly, it’s Jean. I think once we, 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, highly confident. And so, when it’s in these phases, I think we have found that it’s sort of the initial studies and we feel more confident as we move forward. So don’t expect necessarily barriers. But 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 02/1930, and then three fourths of it by 02/1934.

So not only do we wanna give you kind of where they are in the phases, but then also you can kinda think about how they move through those phases in correlation with the the load ramp that I mentioned there.

Carly Davenport, Analyst, Goldman Sachs: Got it. Okay. That’s super helpful. And then maybe just a follow-up on 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?

And then any shifts that you’re anticipating in sort of the rhetoric around customer bills from here?

Calvin Butler, President and Chief Executive Officer, Exelon: Yeah. So Carly, I think what you saw I’ll address with BGE specifically. What you saw is BGE finished the previous auction higher. So the relative delta between this one and that one, that’s why you saw less of a decrease this time than you did last. But we anticipate the BGE bill impacts, and I’m looking at Tamela Olivier, the CEO of BGE, of roughly a dollar and a half going into the for our BGE customers.

And again, I always say this, a dollar increase on some of our customers’ monthly bills is a dollar too much. So we take it very seriously. So you see across our jurisdictions, we see anywhere from a dollar and a half to a $4 increase going across the system. And 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.

Jean Jones, Chief Financial Officer, Exelon: Yeah, and 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? And we need the investments necessary in the grid to attract the economic development just like we need to address these rising supply costs. And 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. Now 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 Chief Executive Officer, Exelon: And, Collie, 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 in customer bills, but it has to be very It’s no longer can you do one offs and expect something to happen. It has to be that portfolio approach. And energy efficiency and demand response are clear examples of what some of our states can do today to decrease customer bills. But because it’s out of their norm, you get hesitation.

And we continue to work with them to think broader than just today or the next decision.

Carly Davenport, Analyst, Goldman Sachs: Great. Thank you for all the details. Super helpful.

Gigi, Event Specialist: 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 Chief Executive Officer, Exelon: Thank you very much, Gigi and as always, thank you guys for joining. Let me just say that we are committed to work with our state to really drive financial excellence and operational excellence And we appreciate your support and we hope to see many of you in the months ahead as we continue to get out on our road shows and talk with you and look forward to seeing you at our financial conference at EEI. So with that, Gigi, that concludes our call.

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

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