Exelon Corporation — 2024 Q1
Transcript
Each turn shows the speaker, their inferred role, the section, and that turn's net sentiment (×1000).
Hello, and welcome to Exelon's First 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].
Thank you, Gigi, and good morning, everyone. We're pleased to have you with us for our 2024 first quarter earnings call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer; and Jeanne Jones, Exelon's Chief Financial Officer. Other members of Exelon senior management team are also with us today and they will be available to answer your questions following our prepared remarks.
Thank you, Andrew, and happy birthday. Good morning, everyone. We appreciate you joining us for our first quarter earnings call. We continue our focus on strong execution. We have started the year with solid operational performance and are on track to meet our financial expectations, and we are making good progress on the regulatory front having concluded ComEd's rehearing process almost 2 months ahead of schedule.
Thank you, Calvin, and good morning, everyone. Today, I will cover our first quarter financial update and progress on our 2024 rate case schedule, including key developments in Illinois.
First, we reduced overall investment levels and bill impacts by up to 30% to better ensure affordability for customers. We also included additional affordability analysis anchored around energy burden, which is the total home energy cost as a percentage of household income, and we demonstrated that new rates under the proposed grid plan result in electric bills at levels well less than half the threshold considered to be energy burdened. And third, we outlined in detail how every customer and community benefits from the clean energy transition. 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.
Thank you, Jeanne. I will close on Slide 10 by reminding you of your 2024 -- of our 2024 business priorities and commitments and the unique power of our platform.
[Operator Instructions] Our first question comes from the line of Jeremy Tonet from JPMorgan Securities, LLC.
This is actually Aidan Kelly on for Jeremy. Just looking at Pennsylvania, there appears to be an abundance of natural gas growth potential in the Marcellus and Utica if incremental demand materializes. Do you see this backdrop in ample reserve margin supporting data center development in the state?
The short answer is yes. And I would tell you that we continue to see significant activity around high-density load growth in general. As we discussed in our -- as recently as our Q4 2023 earnings call, we have high probability of load growth, not only in Illinois, but Pennsylvania.
This is Dave. Just to add that we have continued to see different businesses, including some interest from data centers in the PECO territory and we have the infrastructure to be able to support that both on the generation side and also have the transmission infrastructure, again, would have to be reinforced in certain places to be able to serve those loads.
Yes. And I would add, we've got -- we have a governor that's very aggressive around economic development. We're an energy exporter in Pennsylvania. So the ability to utilize that for all sorts of growth, I would say, in addition to data centers, we're seeing electrification, we're seeing development around the South Philadelphia area. So lots of opportunities for growth and all sorts of electrification.
And the key to your question for me is that the utilities in all of our jurisdictions, we will be a partner in economic development, identifying areas and opportunities to put the assets of our jurisdictions in play. Thank you for the question.
Yes, that's super helpful. And then maybe just one follow-up, shifting to the PECO rate cases. Could you just talk more about the prospects of receiving approval for both the storm mechanism and weather normalization adjustment. Just curious, like have these been used before? Are they a first-time ask in front of the PUC. And just like any points of contention you would highlight there?
Great question, and Dave is going to take that.
Now both those mechanisms have been used or are being used. So if you think of the weather normalization on the gas, 4 of the 6 gas utilities already have a weather normalization adjustment. And 1 of the 2 that doesn't, has applied as well for a weather normalization adjustment.
Our last question comes from the line of Carly Davenport from Goldman Sachs.
Just wanted to ask on ComEd. Just as you think about getting the timing to getting clarity around the grid plan refiling? Obviously, the rehearing was resolved sooner than anticipated as you highlighted. Is there any potential for that refiling resolution to also come sooner? Or do you think it's really a December event?
I do, Carly, this is Calvin. I do believe it's a December event. We continue to work the process. And I would tell you, the fact that we did get the other ruling prior to the statutory deadline was very -- was a positive outcome, but we are -- continue to work with all the stakeholders to drive this process to conclusion. And if we get those rates into effect prior to the beginning of -- at the beginning of the next year, that lays the foundation for us to continue to work with the Illinois Commission and the government to achieve the results of the -- one out of the Climate Equitable and Jobs Act, but I do not see it any sooner than that, Gil, you have anything you'd like to add?
No. I think -- just a couple of important things to note. On its own accord, the ICC voted on an interim order to say that they will decide on this by December. And subsequent to that, the administrative law judge on April 11, set forth the procedural schedule to guide it for a decision in December of this year.
Great. And then I know that you've gotten a lot of the year's financing needs done during the first quarter. But just as you think about the rest of the year there, do you expect there to be any sort of impact relative to your base plan just given the move that we've seen in rates here year-to-date?
Carly. No, I think getting that corporate financing done was important, and we had also pre-issuance hedge, a significant portion of that as we always do heading into the year. So that's why we give you the sensitivity on an open year, it's about $0.01 absent any hedges. So we've really -- we work hard leading into the year to mitigate it and then getting it done early in the year, leaves -- any amount that isn't hedged sort of takes that risk off the table.
I would now like to turn the conference back over to Exelon's President and CEO, Calvin Butler for closing remarks.
Let me just always say thank you for joining today and for your interest in Exelon. Always appreciated you taking the time and asking questions, and we look forward to connecting with all of you over the next several months. And with that, Gigi, that concludes today's call.
Thanks to all our participants for joining us today. This concludes our presentation. You may now disconnect. Have a good day.