By Suzanne Herel
Exelon is on track to deliver its best year of earnings since 2012, CEO Christopher Crane told analysts in the company’s third-quarter earnings call.
“At the utilities, we’re set to invest $3.7 billion this year in needed infrastructure and enhancements and grid reliability and resiliency modifications, part of more than a $16 billion investment that’s planned over the next five years,” he said.
The Chicago company reported third-quarter operating earnings of $757 million ($0.83/share) compared with $676 million ($0.78/share) for the same period in 2014.
Exelon credited higher revenue from the company’s generation business, favorable weather in the Commonwealth Edison and PECO territories and lower storm costs for the Baltimore Gas and Electric territory. That was offset in part by higher contracting costs and interest payments on higher outstanding debt.
Crane highlighted three key initiatives for the year: PJM’s new Capacity Performance product; a legislative initiative to impose a customer surcharge to fund Illinois nuclear plants; and its proposed merger with Pepco Holdings Inc.
“For the 2018/2019 auction, we cleared a significant number of megawatts at higher priced zones, and these prices exceeded our own internal expectations,” he said. (See PJM Transition Auction Means Reprieve for Exelon Nukes.)
Regarding the legislation, which Exelon calls the Low Carbon Portfolio Standard, Crane expressed disappointment that more hadn’t been accomplished. However, he said, “The overall outlook for the nuclear fleet has improved as a result of policy and market factors, namely the constructive results of the capacity auction, the positive results from the Illinois Power Agency’s capacity procurement for 2016 and the long-term impact of the Environmental Protection Agency’s new carbon reduction rules.” (See Exelon-Backed Bill Proposes Surcharge to Fund Illinois Nukes.)
The proposed acquisition of PHI last week was revived by the D.C. Public Service Commission, which agreed to reconsider the deal after the companies submitted a proposed settlement reached with Mayor Muriel Bowser’s administration. (See related story, DC PSC Rulings Give Exelon-PHI Merger a Shot in the Arm.)
“The deal remains an important strategic element to the future of Exelon, allowing us to shift our business mix to a more regulated and durable earnings stream,” Crane said.