Q2 2024 Exco Technologies Ltd Earnings Call

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Andrew Plenge: It is now my pleasure to turn today's program over to Andrew <unk>, Vice President of Investor Relations. The floor is yours.

Andrew Plenge: 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, Excellence's President and Chief Executive Officer, and Gene Jones, Excellence'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.

Andrew Plenge: 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 Excellence, President and Chief Executive Officer, and Jim Jones Excellence, 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.

Andrew Plenge: Remarks.

Andrew Plenge: Today's presentation, along with our earnings release and other financial information can be found in the Investor Relations section of excellent web site.

Andrew Plenge: We'd also like to remind you that today's presentation and the associated earnings release materials contain forward-looking statements that are subject to risks and uncertainties. You can find cautionary statements on these risks on slide 2 of today's presentation or in our SEC filing. 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.

Andrew Plenge: We'd 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.

Speaker Change: Additionally, 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 Excellence, President and CEO. Thank you, Andrew and happy birthday.

Calvin Butler: It is now my pleasure to turn the call over to Calvin Butler, Excellence President and CEO. Thank you, Andrew, and happy birthday. Good morning, everyone.

Calvin Butler: 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 re-hearing process almost two months ahead of schedule. But before I get into the details of today's call, I want to start by acknowledging all of the thoughtful outreach we received on the passing of my predecessor, Chris Crane.

Calvin Butler: 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 comments rehearing process almost.

Calvin Butler: Two months ahead of schedule.

Calvin Butler: But before I get into the details of today's call I want to start by acknowledging all of the thoughtful outreach we received on the passing of my predecessor, Chris Crane.

Calvin Butler: Exelon, and really the energy industry, wouldn't be what it is today without his leadership. All 20,000 of our employees are committed to furthering the legacy of the platform he established, and the culture of operational excellence he promoted permeates all aspects of the performance you see today.

Calvin Butler: Exelon and really the energy industry wouldn't be what it is today without his leadership.

Calvin Butler: All 20000, a bar employees are committed to furthering the legacy of the platform. He established and the culture of operational excellence you promoted permeates all aspects of the performance you see today.

Calvin Butler: Beginning with our key messages on slide 4, we earned $0.66 per share on a GAAP basis and $0.68 per share on a non-GAAP basis. We again faced well below normal weather across our jurisdictions, along with significant storm activity, but with approximately three-quarters of our revenues decoupled from load, balanced cost recovery mechanisms, and strong operating earnings guidance of $2.40 to $2.50 per share. We are on track to deliver. We also continue to perform in the top quartile operationally across all of our operating company utilities.

Calvin Butler: Beginning with our key messages on slide four we earned <unk> 66 per share on a GAAP basis, and <unk> 68 per share on a non-GAAP basis.

Calvin Butler: We again faced well below normal weather across our jurisdictions, along with significant storm activity, but having approximately three quarters of our revenues decoupled from load balanced cost recovery mechanisms and strong operating earnings guidance of $2 40 to $2 50 per share.

Calvin Butler: We are on track to deliver that.

Calvin Butler: We also continued to perform in the top quartile operationally across all of our operating company utilities.

Calvin Butler: On the regulatory front, we have continued to make good progress. As laid out in our fourth quarter call, a key goal this year is to improve our regulatory outlook in Illinois. We took a large step forward on March 13th when we filed our updated grid plan with the Illinois Commerce Commission. Upon hearing from the Commission in December, the ComEd team got to work the day after the order and worked tirelessly with key stakeholders over the next 90 days to create an updated grid plan that addressed the Commission's feedback.

Calvin Butler: On the regulatory front, we have continued to make good progress.

Calvin Butler: As laid out in our fourth quarter call. A key goal. This year is to improve our regulatory outlook in Illinois.

Calvin Butler: We took a large step forward on March 13th when we filed our updated grid plan with the Illinois Commerce Commission.

Calvin Butler: Upon hearing from the commission in December the combat team got to work the day after the order and worked tirelessly with key stakeholders over the next 90 days to create an updated grid plan that addressed the commission's feedback.

Calvin Butler: I am so proud of the ComEd team for their efforts to refile an updated grid plan that is thoroughly responsive to the ICC's direction, and we look forward to a final order, which the Commission has stated should be received by the end of the year for rates effective at the beginning of next year. In the meantime, we are pleased that the Commission approved an updated revenue requirement for ComEd in its rehearing almost two months ahead of the statutory deadline, which recognizes the investments made last year and the prudent expectations for continual investment in new business in Illinois.

Calvin Butler: I am so proud of the comment team for their efforts to re file an updated grid plan that is thoroughly responsive to the icc's direction and we look forward to a final order, which the commission has stated should be received by the end of the year for rates effective at the beginning of next year.

Calvin Butler: And in the meantime, we are pleased that the commission approved an updated revenue requirement for comment and its rehearing almost two months ahead of the statutory deadline, which recognizes the investments made last year and the prudent expectations for continued investment in new business in Illinois.

Calvin Butler: We also filed electric and gas rate cases at PICO in late March. These rate cases will support PECO's expanded investment in infrastructure, and they will enhance programs and services for customers, including assistance for low-income customers and support for customers embracing cleaner energy options. And lastly, the Delaware Public Service Commission approved a settlement in Delmarva Power and Light's electric distribution rate case, supporting continued investment in the reliability and resiliency of its grid.

Calvin Butler: We also filed electric and gas rate cases at Pico in late March. These rate cases will support <unk> expanded investment in infrastructure and they will enhanced programs and services for customers, including assistance for low income customers and support for customers embracing cleaner energy options.

Calvin Butler: And last week, the Delaware Public Service Commission approved a settlement in Delmarva power lights, the electric distribution rate case supporting continued investment in the reliability and resiliency of its grid.

Calvin Butler: Gene will review more details around our regulatory activities shortly. Finally, we continue to reaffirm all of our long-term guidance, including an expected 5% to 7% annualized operating earnings growth going forward. This will be driven by the significant investment needed to support our jurisdiction's energy goals, which we are committed to doing as affordably and equitably as possible. Turning to slide five, our streak of operational excellence continues. Despite the significant storm activity we saw across our territories in the first quarter,

Calvin Butler: Jean will review more details around our regulatory activity shortly.

Calvin Butler: Finally, we continue to reaffirm all of our long term guidance, including an expected 5% to 7% annualized operating earnings growth.

Calvin Butler: Going forward.

Calvin Butler: This will be driven by the significant investment needed to support our jurisdictions energy goals, which we are committed to doing as affordably and equitably as possible.

Calvin Butler: In both outage frequency and outage duration, ComEd and Pepco Holdings achieved top decile performance, while BGE and PECO achieved top quartile performance. This also included extremely high performance on the gas side of the business, where gas odor response rates were perfect at both BGE and PECO. We also maintain strong performance in our customer satisfaction scores at ComEd and Pico, with ComEd achieving top decile. In light of its lower performance at the start of the year, BGE has created several working groups to identify and address customer pain points highlighted in customer surveys and direct interaction.

Calvin Butler: Turning to slide five our streak of operational excellence continues despite the significant storm activity, we saw across our territories in the first quarter.

Calvin Butler: And both outage frequency and outage duration comment and Pepco holdings achieved top decile performance, while <unk> achieved top quartile performance. This also includes extremely high performance on the gas side of the business where gas odor response rates were perfect at both BG and Pico.

Calvin Butler: We also maintained strong performance in our customer satisfaction scores at Comed and peco with Comed achieving top decile.

Calvin Butler: In light of its lower performance at the start of the year BJ has created several working groups to identify and address customer pain points highlighted and customer surveys and direct interactions with 10 initiatives underway that include enhanced community outreach for energy efficiency programs, especially targeted towards limited.

Calvin Butler: With ten initiatives underway that include enhanced community outreach for energy efficiency programs, especially targeted towards limited and moderate income customers, and a continuous improvement plan for new business, results are trending favorably in the second quarter. Lastly, I'll spend some time speaking about our safety culture and performance. We achieved top decile performance on our metric through the first quarter at BGE and Pepco Holdings, while ComEd and PECO sit in the second quart

Calvin Butler: And moderate income customers and a continuous improvement plan for new business.

Calvin Butler: Results are trending favorably in the second quarter.

Calvin Butler: Lastly, I will spend some time speaking about our safety culture and performance, we achieved top desk outperformance on our metric through the first quarter at BJ and Pepco holdings, while comment MP go sit in the second quartile.

Calvin Butler: As many are familiar, the measure we have historically used for safety has been OSHA recordable, in line with industry standards. This metric has been in place for decades, resulting from legislation passed over 50 years ago.

Calvin Butler: As many are familiar the measure we have historically used for safety has been Osha recordable.

Calvin Butler: In line with the industry standard.

Calvin Butler: This metric has been in place for decades, resulting from legislation passed over 50 years ago.

Calvin Butler: While OSHA Recordable served as a useful starting point to drive safe behaviors and accountability, it has limitations in its ability to focus efforts on the most critical areas. For example, while the total injury rate for the industry has declined, the most severe outcomes, fatalities, have not. The power sector occupies a unique space in today's economy, and the nature of our work entails significant physical risk, more so than most other business sectors. In our efforts to advance our capabilities as a learning organization, we have worked with the industry to adopt a more targeted and comprehensive framework to monitor high-safety risk situations, to harness key learnings, and further engage our employees.

Calvin Butler: While Osha recordable served as a useful starting point to drive safe behaviors and accountability. It has limitations in its ability to focus efforts on the most critical areas.

Calvin Butler: While the total injury rate for the industry has declined the most severe outcomes fatalities.

Calvin Butler: Act.

Calvin Butler: The power sector occupies a unique space in today's economy, and the nature of our work entails significant physical risk more than most other business sectors.

Calvin Butler: Our efforts to advance our capabilities as a learning organization, we have worked with the industry to adopt a more targeted and comprehensive framework to monitor high safety risk situations to harness key learnings and further engage our employees.

Calvin Butler: Such a framework is better suited for our industry to drive safety performance to the next level, and this approach not only better ensures our efforts are focused on the highest potential risks but also helps measure the success of those efforts by evaluating the presence of safeguards as opposed to the absence of insurance. In alignment with this strategy to focus on the highest-risk safety situations, we are now reporting on our safety performance through the Serious Injury Incident Rate, or SEER.

Calvin Butler: Such a framework is better suited for our industry to drive safety performance to the next level.

Calvin Butler: And this approach not only better insures. Our efforts are focused on the highest potential risks, but also helps to measure the success of those efforts evaluating the presence of safeguards as opposed to the absence of injuries.

Calvin Butler: In alignment with this strategy to focus on the highest risk safety situations. We are now reporting on our safety performance through the serious injury incident rate or <unk>.

Calvin Butler: Given this safety metric now measures serious injuries, we're more focused than ever on doing as much as we can to operate at industry-leading levels, and any incidents are unacceptable. Based on performance to date, ComEd is refreshing all employees on serious injury prevention tools, including recognition of their empowerment to stop work if a situation is deemed unsafe. And PECO is focused on strategies to improve safety performance around motor vehicles, including a co-pilot program to identify and communicate passenger responsibilities for safe driving.

Calvin Butler: Given the safety metric now measure serious injuries, we're more focused than ever on doing as much as we can to operate at industry, leading levels and any incidents are unacceptable.

Calvin Butler: Based on our performance to date comment is refreshing all employees on serious injury prevention tools, including recognition of their empowerment to stop work if a situation is deemed unsafe.

Calvin Butler: And Pico is focus on strategies to improve safety performance around motor vehicles, including a co pilot program to identify and communicate passenger responsibilities for safe driving.

Calvin Butler: I am very proud of our operation for its industry leadership on an issue as paramount as safety, and I look forward to driving continuous improvement in this area. Jean, I'll now turn it over to you to cover our financial and regulatory update. Thank you.

Calvin Butler: I am very proud of our operations team for its industry leadership on an issue as Paramount safety and I look forward to driving continuous improvement in this area.

Jean: I'll now turn it over to you to cover our financial and regulatory update thank.

Gene Jones: 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. Starting on slide six, we show our quarterly-over-quarter adjusted operating earnings loss. As Calvin mentioned, Exxon earned $0.68 per share in the first quarter of 2024 versus $0.70 in the first quarter of 2023, reflecting lower results of $0.02 per share over the same period.

Jean: Thank you Kelvin and good morning, everyone. Today, I will cover our first quarter financial update and progress on our 2020 for a rate case schedule, including key developments in Illinois.

Gene Jones: Starting on slide six we show our quarter over quarter adjusted operating earnings blocks as Kelvin mentioned Exelon earned <unk> 68 per share in the first quarter of 2024 versus <unk> 70 in the first quarter of 2023, reflecting lower results at <unk> <unk> per share over the same period.

Gene Jones: Earnings were lower in the first quarter relative to last year, driven primarily by $0.04 of higher interest expense due to the rise in interest rates and higher levels of debt at the holding company and at some of our utilities. $0.03 of higher restoration and damage repair costs associated with a challenging storm season across the mid-Atlantic and $0.02 of lower return on ComEd's distribution and bus costs, including no return on his pension asset resulting from the December rate order.

Gene Jones: Earnings are lower in the first quarter relative to last year, driven primarily by <unk> of higher interest expense due to the rise in interest rates and higher levels of debt at the holding company and at some of our utilities.

Gene Jones: <unk> <unk> of higher restoration and damage repair costs associated with the challenging storm season across the mid Atlantic and two cents of low return on comments distribution investments, including no return on net pension asset, resulting from the December rate order.

Gene Jones: This is partially offset by seven cents of higher distribution rates at our other utilities associated with incremental investments net of other expenses. Results of 68 cents per share in the first quarter represent an approximate 28% contribution of the midpoint of our projected 2024 operating earnings guidance range, which is right in line with historical patterns but slightly behind where we expect it to be for Q1. This is a direct result of the continued warmer than normal temperatures in our non-decoupled jurisdictions and the challenging storm activity experienced throughout the first three months of 2024.

Gene Jones: This was partially offset by seven tenths of higher distribution rates at our other utilities associated with incremental investments net of other expenses.

Gene Jones: Results of 68 cents per share in the first quarter represents an approximate 28% contribution of the midpoint of our projected 2024 operating earnings guidance range, which is right in line with historical patterns, but slightly behind where we expect it to be for Q1.

Gene Jones: This is a direct result of the continued warmer than normal temperatures in our non decoupled jurisdictions and the challenging storm activity experienced throughout the first three months of 2024.

Gene Jones: As we look ahead to the next quarter, the relative EPS contribution is expected to be approximately 15% of the midpoint of our projected full year earnings guidance range, which contemplates the update to ComEd's revenue requirement approved by the Illinois Commerce Commission to go into effect in May. In combination with Q1 results, this would result in recognizing 43% of projected full-year earnings, which is slightly behind how we have performed historically but in line with our latest outlook, given various new rates expected to go into effect toward the second half of the year across several jurisdictions. As we demonstrated in 2023, weather-related volatility is a risk we expect to manage, alongside other changes in the plan.

Gene Jones: As we look ahead to the next quarter the relative EPS contribution is expected to be approximately 15% of the.

Gene Jones: The midpoint of our projected full year earnings guidance range, which contemplates the update to comment the revenue requirement approved by the Illinois Commerce Commission to go into effect in May bells.

Gene Jones: In combination with Q1 results. This would result in recognizing 43% of projected full year earnings.

Gene Jones: Slightly behind how we have performed historically, but in line with our latest outlook given various new rates expected to go into a back toward the second half of the year across several jurisdictions.

Gene Jones: As we demonstrated in 2023 weather related volatility is a risk we expect to manage alongside other changes in the plan.

Gene Jones: The ComEd Rehearing provides for incremental revenue relief relative to the final order, which underpinned our base case for the year. As we progress through the year, you can expect us to balance this opportunity with management of our costs and utility work plans, regulatory outcomes, and weather over the remaining quarters to deliver against the expectations laid out for the year. We remain on track for full-year operating earnings of $2.40 to $2.50 per share in 2024, with the goal of being at the midpoint or better of that range.

Gene Jones: The comment rehearing provides for incremental revenue relief relative to the final order, which underpinned our base case for the year as we progress through the year you can expect us to balance this opportunity with management of our costs and utility of our plans regulatory outcomes and weather over the remaining quarters to deliver against the expectations.

Gene Jones: <unk> laid out for the year.

Gene Jones: We remain on track for full year operating earnings of $2 <unk> to $2 50 per share in 2024 with the goal of being at midpoint or better of that range.

Gene Jones: Lastly, we are reaffirming the fully regulated operating EPS compounded annual growth target of 5 to 7 percent from the 2023 guidance midpoint through 2027 with the expectation to be at the midpoint or better of that growth range. Moving to slide 7, there are several positive developments to highlight in the ongoing regulatory matters in Illinois. Starting with the most recent, on April 18th, the ICC issued an order on the rehearing of ComEd's December MYP order that reset rates, which went into effect in May, providing for an increase of $150 million in 2024 relative to the December 2023 order.

Gene Jones: Lastly, we are reaffirming the fully regulated operating EPS compounded annual growth target of 5% to 7% from the 2023 guidance mid point through 2027 with the expectation to be at the midpoint or better of back growth range.

Gene Jones: Moving to slide seven there are several positive developments to highlight in the ongoing regulatory matters in Illinois.

Gene Jones: Starting with the most recent on April 18th the ICC issued an order on the rehearing of comments December MIP order that reset rates, which went into effect in may providing for an increase of $150 million in 2024 relative to the December 2023 order.

Gene Jones: The order also increased the 2025 to 2027 revenue requirements over the approved revenue requirements in those years. While we are encouraged that the revenue requirements on rehearing were largely uncontested and the rehearing process was completed nearly two months ahead of schedule, obtaining approval of the refiled grid plan remains top priority. That leads me to the next key development.

Gene Jones: The order also increased the 2025 to 2027 revenue requirements over the approved revenue requirements in those years.

Gene Jones: While we are encouraged the revenue requirements on rehearing, we're largely uncontested and the rehearing process was completed nearly two months ahead of schedule and obtaining approval of the rebuild grid plan remains top priority.

Gene Jones: That leads me to the next key development.

Gene Jones: After three months of robust stakeholder engagement to address feedback from the commission, in which ComEd hosted two public meetings and a series of six workshops on ten different topics, the revised grid plan was filed with the ICC on March 13. Based on this engagement, ComEd made a number of changes to the original grid plan, including the following. 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 the energy burden, which is the total home energy cost as a percentage of household income.

Gene Jones: After three months of robust stakeholder engagement to address feedback from the commission and which comment hosted two public meetings and a series of six workshops on 10 different capex. The revised grid plan was filed with the ICC on March 13th based.

Gene Jones: Based on this engagement comment I've made a number of changes to the original grid plan, including the following.

Gene Jones: First we reduced overall investment levels and bill impacts by up to 30% to better ensure affordability for customers.

Gene Jones: 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, resulting electric bills at levels well less than half the threshold considered to be NRG burdened.

Gene Jones: 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 an energy burden. And third, we outlined in detail how every customer and community benefits from the clean energy transition. Specifically, through focused grid investments and disadvantaged communities, more than 40% of the benefits of grid modernization and clean energy have been demonstrated to support equity investment eligible communities. Lastly, we enhanced our support for the value of grid investments to ComEd customers through a new cost-effectiveness framework.

Gene Jones: And third we outlined in detail for every customer and community benefits from the clean energy transition.

Gene Jones: Specifically to focus 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 community as customers.

Gene Jones: Lastly, we enhanced our support for the value of grid investments to comment customers. There are new cost effectiveness framework.

Gene Jones: ComEd's analysis details the present value benefits of grid plan investments totaling over $7 billion, as compared to the present value of the revenue requirements of $4.4 billion. These quantifiable benefits, driven largely by reliability and emissions reduction, do not capture other qualitative values like cybersecurity protection, safety, customer engagement, low-income customer assistance, and health improvements from improved air quality.

Gene Jones: <unk> analysis details the present value benefit of grid plan investments totaling over 7 billion as compared to the present value of the revenue requirements of $4 4 billion.

Gene Jones: These quantifiable benefits driven largely by reliability emissions reduction and emissions reductions do not capture other qualitative value like cyber security protection safety customer engagement low income customer assistance and health improvements from improved air quality.

Gene Jones: The refiled grid plan not only satisfies all statutory requirements and supports the achievement of statutory objectives, but it also represents a collaboration among ComEd, Commission staff, and other stakeholders on implementation of the groundbreaking Climate and Equitable Jobs Plan. CJA has put the state of Illinois on a path to advance ambitious plans to combat climate change, a goal that is equally important to policymakers and utilities alike. In support of these objectives, on March 7th, the Commission issued an order that a procedural schedule be adopted for the grid and rate plan proceeding that will allow the Commission to issue a final order in December 2024 and implement rates that will go into effect by the start of 2025.

Gene Jones: The rebuild grid plan not only satisfies all statutory requirements and support the achievement of statutory objectives. It also represents a collaboration among combat Commission staff and other stakeholders on implementation of the ground breaking climate in Ecuador jobs Act.

Gene Jones: <unk> has put the state of Illinois on a path to advance ambitious plans to come back climate change our goal that is equally important to policymakers and utilities alike.

Gene Jones: The Administrative Law judges subsequently adopted a proposed procedural schedule in line with this timing. ComEd also filed its final distribution formula rate reconciliation with the ICC on April 26, seeking a one-time recovery of $627 million in rates effective January 1, 2025. A key driver of the increase is the impact of U.S. Treasury yields that increased in 2023 relative to the prior year. As a reminder, the formula rate construct was historical in that it set rates based on prior year expenditures.

Gene Jones: In support of these objectives on March 7th the Commission issued an order that a procedural schedule will be adopted for the grid and rate plan proceeding that will allow the commission to issue a final order in December 2024, and implement rates that will go into effect by the start of 2025.

Gene Jones: The administrative law judges subsequently adopted our proposed procedural schedule in line with this timing.

Gene Jones: <unk> also filed its final distribution formula rate reconciliation with the ICC on April 26, seeking a onetime recovery of $627 million and rates effective January one 2025.

Gene Jones: A key driver of the increase includes the impact of U S. Treasury yield that increased in 2023 relative to the prior years.

Gene Jones: As a reminder, the formula rate construct with historical and that it sat rates based on prior year expenditures.

Gene Jones: As such, in addition to collecting actual costs from 2023, trued up from 2021 and 2022 costs, the reconciliation reflects higher O&M expenses due in part to the inclusion of beneficial electrification and credit card convenience fees required by, as well as additional investments in infrastructure to support safe, reliable service for customers and growth of new business in the state supported by its economic development policy. Storm recovery was also a material driver of the under-recovery.

Gene Jones: Such in addition to collecting actual costs from 2023 chewed up from 21% and 22 costs. The reconciliation reflects higher O&M expenses due in part to the inclusion of beneficial electrification and credit card convenience fees required by seizure.

Gene Jones: As well as additional investments in infrastructure to support safe reliable service for customers and growth of new business and the state supported by its economic development policies.

Gene Jones: Storm recovery was also a material driver of the under recovery.

Gene Jones: Per statute, an order is expected on the reconciliation in December. As I mentioned, obtaining approval of ComEd's refiled grid plan is our priority. Early approval of the rehearing, coupled with the adoption of a procedural schedule for an order on the refiled grid plan before the end of 2024, are the first steps to getting Illinois back on track to achieve its clean energy goals. Turning to slide 8, as Calvin mentioned, there have been some important developments on the regulatory front for our East Coast jurisdiction since the beginning of the year. Let me begin with the most recent filing.

Gene Jones: Her statute and order is expected on the reconciliation in December.

Gene Jones: As I mentioned obtaining approval of comments re filed grid plan is our priority early approve of the rehearing coupled with the adoption of a procedural schedule for an order on the rebuild grid plan before the end of 2024 are the first steps to getting Illinois back on track to achieve its clean energy goals.

Gene Jones: Turning to slide eight as Calvin mentioned, there have been some important developments on the regulatory front for our east coast jurisdictions.

Gene Jones: Since the beginning of the year, let me begin with the most recent filing.

Gene Jones: On March 28th, PECO filed both electric and gas distribution rate cases with the Pennsylvania Public Utility Commission. In its electric rate case, PECO is requesting a $399 million net revenue increase by 2025 to support significant investments in infrastructure to maintain and improve safety, reliability, and customer service for its customers. To reduce the impacts of severe weather, PECO has proposed a storm reserve mechanism designed to defer storm cost variances to the balance sheet to be collected or refunded in the next base rate.

Gene Jones: On March 28th Pico filed both electric and gas distribution rate cases, with the Pennsylvania Public utility Commission.

Gene Jones: And its electric rate case, Pico is requesting a $399 million net revenue increased by 2025 to support significant investments in infrastructure to maintain and improve safety reliability and customer service for its customers.

Gene Jones: To reduce the impacts of severe weather Pico has proposed a storm reserve mechanism designed to defer storm cost variances to the balance sheet to be collected or refunded and the next base rate case.

Gene Jones: Additionally, PECO is seeking to recover $111 million in its gas distribution rate case to support continued replacement of existing natural gas mains and service lines with new plastic pipes intended to enhance safety, improve service, and reduce methane emissions. As part of the case, PECO has requested a weather normalization adjustment designed to adjust customers' gas bills for actual versus normal weather on each individual customer bill when bills are issued. Both the proposed storm reserve and weather normalization adjustments would reduce the variability of revenues relative to our costs and, at the same time, benefit customers by ensuring that they only pay for actual storm costs and by making their gas bills more predictable.

Gene Jones: Additionally, Pico is seeking to recover $111 million in its gas distribution rate case to support continued replacement of existing natural gas mains and service lines with new plastic pipe intended to enhance safety improve service and reduce methane emissions.

Gene Jones: As part of the case Peco has requested a weather normalization adjustment designed to adjust customers' gas bill for actual versus normal weather on each individual customer bell when bills are issued.

Gene Jones: Both the proposed storm reserve and weather normalization adjustments would reduce the variability of revenues relative to our cost and at the same time benefit customers by ensuring that they only pay for actual storm costs and by making their gas bills more predictable.

Gene Jones: Further strengthening the experience for our customers are the planned infrastructure investments to modernize the electric grid, make it stronger, more weather resistant, and less vulnerable to storm damage. Despite the impacts of several severe storms in 2023, PECO customers experienced the lowest power outage rate in company history, with 86% of PECO customers experiencing zero or one outage in 2023.

Gene Jones: Further strengthening the experience for our customers are the planned infrastructure investments to modernize the electric grid make it stronger more rather resistant and less vulnerable to storm damage.

Gene Jones: Despite the impacts of several severe storms in 2023 Pico customers experienced the lowest power outage in company history, with 86% of Pico customers experiencing zero or one outage in 2023.

Gene Jones: Pecos Investment Plans, outlined in the Electric and Gas Rate Cases, are designed to build upon this strong foundation, delivering enhanced reliability performance to its customers. Orders are expected from the PAPUC for both rate cases before the end of 2024. On April 18th, the Delaware Public Service Commission unanimously approved the Delmarva Power Settlement Agreement with modification for its electric distribution rate. The settlement was for a $42 million gross increase in distribution rates premised on an ROE of 9.6%.

Gene Jones: He goes investment plans outlined in the electric and gas rate cases are designed to build upon the strong foundation delivering enhanced reliability performance towards customers.

Gene Jones: Orders are expected from the PUC for both rate cases before the end of 2024.

Gene Jones: The decision approves recovery of investments in infrastructure to mean safety and reliability and improve service for our customers. It also helps better align revenues with costs, specifically high storm expenses, through a newly established rider that allows for deferral of storms exceeding $5 million. As permitted by Delaware law, Delmarva Power implemented full allowable rates on July 15, 2023, subject to refund.

Gene Jones: On April 18th the Delaware Public Service Commission unanimously approved Delmarva power settlement agreement with modification for its electric distribution rate case.

Gene Jones: The settlement was for a $42 million gross increase in distribution rates premised on an ROE of nine 6%.

Gene Jones: The decision approved recovery of investments in infrastructure to meet safety and reliability and improve service for our customers.

Gene Jones: And it also helps better align revenues with costs, specifically high storm expenses through a newly established rider that allows for deferral of storms exceeding 5 million.

Gene Jones: As permitted by Delaware Law, Delmarva power implemented full allowable rates on July 15th 2023 subject to refund.

Gene Jones: I'll close with an update on the progress in PEPCO's electric distribution rate cases in Washington, D.C., and Maryland. The procedural schedule in PEPCO-DC's multi-year rate plan filing has been adjusted to accommodate an intervenor's request for additional time to review through a bottle of testimony from PEPCO. PESCO anticipates D.C.'s commission to issue a subsequent order with an updated hearing and briefing schedule in the coming weeks. The final order is expected by the third quarter.

Gene Jones: I'll close with an update on the progress and Pepco electric distribution rate cases in Washington, D C and Maryland.

Gene Jones: Procedural schedule and Pepco D. CS multiyear rate plan filing has been adjusted to accommodate and intervenors requests for additional time to review Surrebuttal testimony from Pepco.

Gene Jones: <unk> anticipates Dc's Commission to issue a subsequent order with an updated hearings and briefing schedule in the coming weeks a final order is expected by the third quarter.

Gene Jones: Additionally, in Maryland, evidentiary hearings were conducted and briefs filed in March and April, respectively, as part of PEPFAR's pending multi-year electric rate cut. The hearings allowed Pepco Maryland the opportunity to demonstrate the benefits afforded by a multi-year rate plan relative to traditional rate making. Multi-year plans in Maryland have enabled investments necessary to improve reliability and customer service, modernize the distribution system, and support state environmental goals that have served our customers and communities well.

Gene Jones: Additionally, in Maryland, Evidentiary hearings were conducted and brief filed in March and April respectively. As part of Pepco pending multiyear electric rate case, the hearings allowed pepco, Maryland, the opportunity to demonstrate the benefits afforded by a multiyear rate plan relative traditional to traditional ratemaking.

Gene Jones: Multiyear plans in Maryland have enabled investments necessary to improve reliability and customer service modernize the distribution system and support state environmental goals that have served our customers and communities well.

Gene Jones: We continue to believe PEPCO's proposed investment plans are well suited for Maryland to meet its aggressive clean energy goals in an affordable manner. A final order is expected from the Commission by June 10th. More details on the rate cases can be found on slides 19 through 29 of the appendix.

Gene Jones: We continue to believe Pepco proposed investment plans are well suited for Maryland to meet its aggressive clean energy goals in an affordable manner.

Gene Jones: Final order is expected from the commission by June comp per statue.

Gene Jones: Details on the rate cases can be found on slides 19 through 29 of the appendix.

Gene Jones: I will conclude with a review of our balance sheet activity on slide 9. As you heard on our last earnings call, we project to continue to have approximately 100 basis points of cushion on average for our consolidated corporate credit metrics above the threshold specified by the agency. And while we continue to await specific guidance and implementation of the Corporate Alternative Minimum Tax, I'll remind you that our plan continues to incorporate the assumption that the regulations will not allow for repairs.

Gene Jones: I will conclude with a review of our balance sheet activity on slide nine as you heard on our last earnings call. We project to continue to have approximately 100 basis points of cushion on average for our consolidated corporate credit metrics above the threshold specified by the agencies.

Gene Jones: And while we continue to await specific guidance on implementation of the corporate alternative minimum tax I'll remind you that our plan continues to incorporate the assumption that the regulations will not allow for repairs at.

Gene Jones: If implemented in a way that mitigates the cash impact, we'd expect an increase of approximately 50 basis points to our consolidated credit metrics on average over the plan, putting us more on the higher end of our targeted 100 to 200 basis points of cushion. From a debt financing perspective, we successfully raised $1.7 billion at corporate and approximately $1 billion for the PHI entities in the first quarter.

Gene Jones: It's implemented in a way that mitigates the cash impact we would expect an increase of approximately 50 days basis points to our consolidated credit metrics on average over the plan putting us more on the higher end of our targeted 100 to 200 basis points of cushion.

Gene Jones: From a debt financing perspective, we successfully raised $1 7 billion at corporate and approximately $1 billion for the PHA entities in the first quarter.

Gene Jones: To date, we have completed 55% of our plan, 2020 for long-term debt finance, including all of our corporate needs, positioning us well for any market volatility in the balance of the year. As a reminder, we continue the Preassurance Hedging Program that was initiated in 2022 to manage the ongoing interest rate volatility. In addition, we continuously monitor the capital markets and regularly assess our plans for future issuance timing, sizing, tenor, and tranching strategy to ensure we achieve optimal outcomes.

Gene Jones: Date, we have completed 55% of our planned 2020 for our long term debt financing needs, including all of our corporate needs positioning us well for any market volatility and the balance of the year.

Gene Jones: As a reminder, we continue the pre issuance hedging program that was initiated in 2022 to manage the ongoing interest rate volatility.

Gene Jones: In addition, we continuously monitor the capital markets and regularly assess our plans for future issuance timing sizing tenor and trenching strategy to ensure we achieve optimal outcomes.

Gene Jones: The strong investor demand for our debt offerings continues to be a testament to the strength of our balance sheet and to our value proposition as a premier T&D utility with a low-risk platform. To reiterate, our equity needs have not changed. We will issue $1.6 billion over the 2024-2027 period to fund the estimated $34.5 billion capital plan in a balanced manner. Specifically, we expect to issue $150 million of equity at the holding company in 2024 and the balance of approximately $475 million annually over 2025 through 2027.

Gene Jones: The strong investor demand for our debt offerings continues to be a testament to the strength of our balance sheet and to our value proposition as a premier T&D utility with a low risk platform.

Gene Jones: To reiterate our equity needs. There has been no change in our guidance to issue $1 6 billion over the 2024 to 2000 2007 period to fund the estimated $34 5 billion capital plan in a balanced manner.

Gene Jones: Specifically, we expect to issue $150 million of equity at the holding company in 2024, and the balance of approximately $475 million annually over 2025 through 2027, well we will continue to update you as we make progress on that plan.

Gene Jones: We will continue to update you as we make progress on that plan. Thank you. I'll now turn the call back to Calvin for his closing remarks. Thank you, Jane.

Gene Jones: Thank you I'll now turn the call back to Kevin for his closing remarks. Thank you Jamie I'll close on slide 10 by reminding you of your 2024 of our 2024 business priorities and commitments and the unique power of our platform.

Calvin Butler: Thank you, Gene. I will close on slide 10 by reminding you of our 2024 business priorities and commitments and the unique power of our platform. As always, we start with operational excellence, providing safe and reliable power to our customers as the demands on the grid continue to increase. We remain committed to achieving regulatory outcomes that adequately balance stakeholder interests, supporting the necessary progress on the energy transformation. This includes completing the ComEd grid plan process in a way that allows sufficient investment in the grid to support Illinois' energy goals.

Calvin Butler: As always we start with operational excellence, providing safe and reliable power to our customers as the demands on the grid continue to increase we remain committed to achieving regulatory outcomes that adequately balanced stakeholder interests supporting the necessary progress on the energy transformation. This includes completing the <unk>.

Calvin Butler: Grid plan process in a way that allows sufficient investment in the grid to support the Illinois energy goals, we're focused on delivering on all of our financial commitments for the year investing $7 4 billion of capital expenditures, while earning a consolidated Roe of 9% to 10% and delivering operating earnings.

Calvin Butler: We are focused on delivering on all of our financial commitments for the year, investing $7.4 billion in capital expenditures while earning a consolidated ROE of 9 to 10 percent and delivering operating earnings per share of $2.40 to $2.50 per share. And we expect to achieve this while executing on our financing plan to maintain a strong balance sheet. We continue our strong advocacy for an equitable and balanced energy transition, taking advantage of the unprecedented federal support through IIJA for investment across the ecosystem while continuing our industry-leading efforts to strengthen our community, as you may have seen.

Calvin Butler: Per share of $2 40 to $2 50 per share and.

Calvin Butler: And we expect to achieve this while executing on our financing plan to maintain a strong balance sheet.

Calvin Butler: We continue our strong advocacy for equitable imbalanced energy transition taking advantage of the unprecedented federal support through <unk> for investment across the ecosystem, while continuing our industry leading efforts to strengthen our communities.

Calvin Butler: We are proud to partner with the Cal Ritkin Senior Foundation to open 81 STEM centers across various cities we serve, including Atlantic City, Chicago, Philadelphia, Wilmington, and Washington, D.C. We opened the very first of those in April in Lansdowne, Maryland, and we are excited to give students an opportunity to gain hands-on knowledge, skills, and confidence in areas like coding and engineering, which are indispensable in the energy industry.

Calvin Butler: As you May have seen we are proud to partner with the Cal Ripken Senior Foundation to open 81 stem centers across various cities, we serve including Atlantic City, Chicago, Philadelphia, Wilmington, and Washington D. C. We opened the very first of those in April and Lansdowne, Maryland.

Calvin Butler: And we are excited to give students an opportunity to gain hands on knowledge skills and confidence in areas like coding and engineering, which are indispensable in the energy industry.

Calvin Butler: We also continue to focus on maintaining a long-term O&M trajectory that supports customer affordability while relentlessly pursuing opportunities to operate more efficiently as one Exelon. Executing against our established priorities and commitments year in and year out is what you would expect of a premier utility. In many ways, those priorities and commitments aren't new. The foundation of operational excellence and a commitment to values that support the diverse communities we have, the privilege and responsibility to serve, were established long ago by Chris.

Calvin Butler: We also continue to focus on maintaining a long term O&M trajectory that supports customer affordability, while relentlessly pursuing opportunities to operate more efficiently as one exelon.

Calvin Butler: Executing against our established priorities and commitments year in and year out is what you would expect of a premier utility.

Calvin Butler: There are many ways those priorities and commitments aren't new.

Calvin Butler: The foundation of operational excellence and a commitment to values that support the diverse communities. We have the privilege and responsibility to serve was established longer run long ago by Chris.

Calvin Butler: He demanded continuous improvement from the businesses he ran while relentlessly advocating for sensible and long-sighted policy. He was an equally strong champion of diversity and inclusion, including industry-leading efforts to advance equitable recruitment, retention, and promotion of women, along with award-winning programs in workforce development and supplier diversity. Indeed, he laid the foundation for the STEM Academy initiative that I highlighted moments ago. We will all miss you, and we look forward to honoring his legacy by pushing Excelon to lead the energy transformation with the platform and culture that he helped establish. Gigi, that concludes our prepared remarks, and we welcome any questions from the audience.

Calvin Butler: He demanded continuous improvement from the business as he ran while relentlessly advocating for sensible and long-sighted policies.

Calvin Butler: He was an equally strong champion of diversity and inclusion including industry, leading efforts to advance equitable recruitment retention and promotion of women, along with award winning programs and workforce development and supply diversity.

Calvin Butler: Deed he laid the foundation for the stomach Adhamiyah initiative that I highlighted moments ago.

Calvin Butler: We will all Miss Chris.

Calvin Butler: And we look forward to honoring his legacy by pushing exelon to lead the energy transformation with the platform and culture that he helped establish.

Calvin Butler: <unk> that concludes our prepared remarks, and we welcome any questions from the audience.

Operator: Thank you. If you would like to ask a question, simply press star 1 1 on your telephone keypad. Our first question comes from the line of Jeremy Tonnet from JP Morgan.

Gigi: Thank you if you would like to ask a question simply press Star one one on your telephone keypad.

Jeremy Tonnet: Our first question comes from the line of Jeremy Tonet from Jpmorgan Securities LLC.

Aidan Kelly: Hey, good morning. This is actually Aidan Kelly on for Jeremy.

Operator: Good morning, Good morning, Jeremy This is actually Ian Kelly on for Jeremy.

Calvin Butler: 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 margins supporting data center development in the state?

Aidan Kelly: Okay.

Aidan Kelly: Just looking at Pennsylvania, there appears to be an abundance of natural gas growth potential in the Marcellus and Utica.

Calvin Butler: Incremental demand materializes do you see this backdrop, an ample reserve margin supporting data center development in the state.

Calvin Butler: The short answer is yes, and I would tell you that we continue to see significant activity around high-density load growth in general. You know, as we discussed in our reach as recently as our Q4 2023 earnings call, we have a high probability of low growth, not only in Illinois but also in Pennsylvania. And I have with me Dave Velasquez and both Mike Innocenzo, who can provide you with further color, but the short answer is yes, and I'll turn it over to them to see if they want to add anything.

Speaker Change: The short answer is yes.

Calvin Butler: And I would tell you that we continue to see significant activity around high density load growth in general.

Calvin Butler: As we discussed in our recent as recently as our Q4 2023 earnings call we have.

Speaker Change: High probability of low growth not only in Illinois, but Pennsylvania and I have with me David last question, both Mike and Asenjo, who can provide you further color, but the short answer is yes, and I will turn it over to them and see if they want to add anything.

Dave Velasquez: This is Dave. Just to add that we have continued to see different businesses, including some interest from data centers in the PICO territory, and we have the infrastructure, you know, to be able to support that both on the generation side and also have the transmission infrastructure, which would have to be reinforced in certain places to be able to serve those loads.

Calvin Butler: This is Dave just to add that.

Dave Velasquez: We have we have continued to see.

Dave Velasquez: Different businesses, including some interest from data centers in the Pico territory, and we have the infrastructure to be able to support that both on the generation side and also have the transmission infrastructure again, we would have to be reinforced in certain places to be able to serve those loads.

Mike Innocenzo: Yeah, and I would add, you know, we've got 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,

Speaker Change: Yeah, and I would add we've got it we have a governor thats very aggressive around economic development were in energy export are in Pennsylvania.

Mike Innocenzo: 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.

Calvin Butler: And the key to your question for me is that, 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.

Calvin Butler: Identifying areas and opportunities to put the assets of our jurisdictions and play.

Calvin Butler: Yeah, that's super helpful. And then maybe just one follow-up question on the PICO 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?

Calvin Butler: For the question.

Speaker Change: Yeah, that's super helpful. And then maybe just one follow up shifting to the Pico rate cases could you just talk more about the prospects of receiving approval for both both the storm mechanism and weather normalization adjustment just curious like have these been used before are they are first time ask in front of the PUC.

Calvin Butler: And just like any points of contention you would you would highlight there.

Dave Velasquez: Great question, and Dave is going to take that.

Dave Velasquez: Now, both those mechanisms have been used or are being used. So if you think of weather normalization on gas, four of the six gas utilities already have a weather normalization adjustment, and one of the two that doesn't has applied it as well for a weather normalization adjustment. And then on the storm reserve, you know, one of the major electric companies in PA already has a storm reserve account similar to us, and another of the major utilities for storms uses kind of a rider, which is kind of like an automatic add to the bill. So both are mechanisms that are known and have been approved in the past in Pennsylvania.

Speaker Change: Great question, and Dave is going to take them now.

Dave Velasquez: Those mechanisms.

Dave Velasquez: Been used or are being used so if you think of the weather normalization on the gas for the sixth gas utilities already have a weather normalization adjustment in <unk>.

Dave Velasquez: One of the two that doesn't has applied as well for a weather normalization adjustment and then on the storm reserve one of the major electric companies and Ta already has a storm reserve accounts similar to us in another of the major.

Dave Velasquez: Utilities for storms uses kind of a rider, which is kind of like an automatic AD to the bill. So both are mechanisms that are known and have been approved in the past.

Operator: That's clear, thanks. I'll leave it there.

Speaker Change: That's clear thanks, I'll leave it there.

Speaker Change: Thank you.

Speaker Change: Thank you.

Carly Davenport: Our last question comes from the line of... Carly Davenport from Goldman Sachs.

Speaker Change: Our last question comes from the line of.

Carly Davenport: Carly Davenport from Goldman Sachs.

Carly Davenport: Good morning, Carly. Good morning, good morning.

Carly Davenport: Good morning, Charlie Hi, Caroline Good morning, good morning, Thanks, so much for taking the questions.

Calvin Butler: Thanks so much for taking the questions. Just wanted to ask about ComEd, just as you think about getting, you know, the timing for 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? Do you think it's really a December event?

Calvin Butler: Just wanted to ask on on Karma, just as you think about getting the timing to getting clarity around the grid plan re filing obviously the rehearing was was resolved sooner than anticipated as you highlighted is there any potential for that re filing resolution to also come sooner or do you think it is really a December event.

Calvin Butler: I do, Carly. This is Calvin.

Speaker Change: I do colleagues with Calvin I do believe it's a December event.

Calvin Butler: 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 up was a positive outcome, but we have work continue to work with all the stakeholders should 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.

Calvin Butler: 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 a positive outcome, but we continue to work with all the stakeholders to drive this process to conclusion. And if we get those rates into effect at the beginning of the next year, that lays the foundation for us to continue to work with the Illinois Commission and government to achieve the results that they want out of the Climate Equitable and Jobs Act. But I do not see it ending sooner than that. Gil, is there anything you'd like to add? No.

Speaker Change: That lays the foundation for us to continue to work with Illinois.

Speaker Change: Emission and government to achieve the results that they want out of the climate equitable and jobs Act, what I do not see it ending sooner than that Joe you anything you'd like to add no I think just a couple of important things to note on its own accord.

Gene Jones: Now, 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 would decide on this by December, and subsequent to that, the Administrative Law Judge on April 11 set forth the procedural schedule to guide it to a decision in December of this year.

Gene Jones: ICC.

Gene Jones: Voted on an interim order to us.

Gene Jones: Say that they will decide on this by December and subsequent to that.

Gene Jones: The administrative law judge on April 11 set forth the procedural schedule to guide for a decision in December of this year.

Carly Davenport: And then 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?

Speaker Change: Great. Thank you for that.

Carly Davenport: And then now 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.

Gene Jones: Hey, Carly. No, I think, you know, getting that corporate financing gun was important. And we also pre-issuance hedged a significant portion of that, as we always do heading into the year. And that's why, if we give you the sensitivity on an open year, it's about a penny, you know, absent any hedges. So we 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.

Carly Davenport: Hey, Charlie No I think.

Gene Jones: Getting that corporate financing gun was important and we had also pre issuance hedge a significant portion of that as we always do heading into the year does that give you the sensitivity on an open year. Its about a penny you know absent any hedges. So we've really worked 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 take.

Gene Jones: The other thing I'll note is, you know, coming out of the separation, we were holding a little bit more short-term debt than we normally do. As part of that financing in the first quarter, we termed out all but $500 million. So that's all we carry in short-term debt. And that's typically what we would normally carry. So I also completed that. And then, in our operating companies, for the most part, interest expenses are covered, whether immediately through some sort of reconciliations or over time, as we recapture them in new rate cases. So it's really the corporate exposure that we continue to manage.

Gene Jones: That risk off the table.

Carly Davenport: Great, thanks so much for your time.

Gene Jones: Other thing I'll notice coming out of the separation, we were holding a little bit more short term debt than we normally do.

Carly Davenport: Part of that financing in the first quarter, we termed out all about 500 million. So thats all we carry in short term debt and Thats typically what we would normally carry so also completed that and then at our operating companies for the most part interest expenses are covered whether immediately through sort of.

Carly Davenport: Reconciliations are overtime as we recapture them in your rate cases, so it's really the corporate exposure that we continue to manage.

Speaker Change: Great. Thanks, so much for the time.

Speaker Change: Thank you Carla.

Calvin Butler: Thank you. I would now like to turn the conference back over to Exelon's President and CEO, Calvin Butler, for closing remarks.

Speaker Change: Thank you.

Calvin Butler: I would now like to turn the conference back over to Exelon, President and CEO Calvin Butler for closing remarks.

Calvin Butler: Let me just always say thank you for joining today and for your interest in Exelon. I always appreciate 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.

Calvin Butler: Let me just always say, thank you for joining today and for your interest in extra line.

Speaker Change: Always appreciate 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 <unk> that concludes today's call.

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

Speaker Change: 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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Operator: Thanks.

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