Exelon CEO Calvin Butler opened the company’s first-quarter earnings call May 2 with a tribute to his predecessor, Chris Crane, who died April 13, then quickly turned to the business at hand: the rate cases, from Illinois to D.C., that could have major impacts on the utility’s bottom line and profitability.
“A key goal this year is to improve our regulatory outlook in Illinois,” Butler said, referring to the Illinois Commerce Commission’s rejection of Commonwealth Edison’s integrated grid plan Dec. 14 for failing to meet core provisions of the state’s Climate and Equitable Jobs Act.
The ICC sent both ComEd and Ameren Illinois back to the drawing board after finding the utilities had not sufficiently incorporated customer affordability into their plans or outlined how 40% of plan benefits would go to low-income and environmental justice communities, “among other shortcomings,” according to the commission’s announcement.
With a 90-day deadline for submitting a revised plan, “the ComEd team got to work the day after the order and worked tirelessly with key stakeholders … to create an updated plan that … is thoroughly responsive to the ICC’s direction,” Butler said.
“We outlined in detail, for every customer and community, [the] benefits from the clean energy transition,” as well as providing an affordability analysis, CFO Jeanne Jones said. “Specifically, through focused grid investments in disadvantaged communities, more than 40% of the benefits of grid modernization and clean energy have been demonstrated to support equity-investment-eligible communities’ customers.”
The revised plan was submitted March 13, Butler reported. The ICC has scheduled intervenor testimony, rebuttal and an evidentiary hearing in May, June and August, respectively, with a final decision expected in December.
Jones also provided a rundown of recently approved and pending rate cases across Exelon’s utilities, beginning with the Delaware Public Service Commission’s approval April 18 of a settlement in Delmarva Power’s rate case, allowing a $27.8 million increase in the utility’s revenue request.
Pending regulatory approvals include multiyear rate cases for Pepco in both D.C. and Maryland, with decisions expected this summer or early fall, and PECO Energy oil and gas rate cases in Pennsylvania, expected in either November or December.
Data Centers in Pa.?
Exelon’s earnings edged down in the first quarter of 2024 compared to the year before, Jones said. The company’s non-GAAP net income was $685 million ($0.68/share), versus $696 million ($0.70/share) for the same period in 2023. Corresponding GAAP figures were $658 million net income ($0.66/share) for Q1 2024 and $669 million net income ($0.67/share) in 2023.
Butler pointed to the combination of a warmer-than-normal winter and severe storms as factors in the decrease. Jones also cited higher costs from storm damage, as well as high interest rates and higher levels of debt at both the company and its utilities.
With data centers and the resulting demand growth exploding across the country, Aidan Kelly, an analyst with J.P. Morgan Securities, asked if Pennsylvania might be a prime candidate for data center development, with its large natural gas reserves at the Marcellus and Utica shales.
“The short answer is ‘yes,’” Butler said. “And I would tell you that we continue to see significant activity around high-density load growth in general,” with both Illinois and Pennsylvania in the mix.
“We have continued to see different businesses, including some interest from data centers in the PECO territory,” said utility CEO David Velazquez. “We have the infrastructure to support that … on the generation side and also have the transmission infrastructure.”
“In addition to data centers, we’re seeing electrification; we’re seeing development around the South Philadelphia area,” Exelon COO Michael Innocenzo added. “So, lots of opportunities for growth in all sorts of electrification.”
