Q1 2025 Exelon Corp Earnings Call
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Latif: Hello, and welcome to extra lines first quarter earnings call. My name is Latif and I will 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.
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Andrew: It is now my pleasure to turn today's program over to Andrew <unk>, Vice President of Investor Relations. The floor is yours.
Speaker Change: Thank you Latif and good morning, everyone. Thank you for joining us for our 2025 first quarter earnings call, leading the call today are Calvin Butler Excellence, President and Chief Executive Officer, and Jim Jones excellent 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.
Speaker Change: Today's presentation, along with our earnings release and other financial information can be found in the Investor Relations section of <unk> 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 Kelvin <unk>.
Kelvin: <unk> President and CEO. Thank you Andrew and good morning, everyone. We appreciate you joining us for our first quarter earnings call 2025 is off to a good start we're reporting operating earnings of 92 per share representing strong growth over the first quarter of 2024 and ahead.
Kelvin: Expectations, which keeps us on track to deliver on our 2025 operating earnings guidance range reliability and safety performance continued to be very strong as well. Despite a number of high wind events throughout the winter months that challenged our operators who remain the best in the business comment and Pepco holdings.
Kelvin: We're projecting top decile audits frequency and duration performance, while BJ E&P go our top quartile.
Kelvin: We have a relatively lower level of base rate case activity this year.
Kelvin: And our two open rate cases remain on track at Atlantic City Electric and Delmarva power, which Jim will cover in her remarks.
Speaker Change: We have also been actively engaging in a variety of legislative and regulatory reforms to ensure energy policy keeps pace with the industry and broader economic trends in.
Speaker Change: Ensuring reliable and affordable energy for all customers is critical to our jurisdictions and the nation as a whole as they work to realize the economic and energy policy ambitions.
Speaker Change: The first quarter of 2025 has already seen great progress on that front.
Speaker Change: In Maryland, the legislature passed several energy bills that take important steps around energy security, including prescribing a competitive process to procure new dispatch will resources at capacity, while providing a path for alternative approaches should they be needed there.
Speaker Change: Also lay out ambitious goals around developing battery storage at both the distribution and transmission level offering us and developers further opportunity to shore up the state's energy supply.
Speaker Change: And the state also outline for the first time in well the recognition of multiyear plan construct prompting a robust discussion that highlighted its merits of increased transparency planning and alignment, while giving stakeholders, a greater say and how much and where their dollar should be invested.
Speaker Change: We now look to the commission to conclude its multiyear plan lessons learned process. So we can move the state board with confidence in meeting its energy and economic goals.
Speaker Change: Other states are also considering legislation to address elements of energy policy, including a focus on the energy security and cost allocation implications of large load growth we.
Speaker Change: We expect to have more to share on those sessions as the year advances.
Speaker Change: There has been significant activity at the regional and federal level as well.
Speaker Change: PJM has made considerable progress to address optimal outcomes in its capacity market construct we have been pleased to see that FERC approved for <unk> approved a number of solutions put forward by <unk> 205 filings, including its temporary price collar and refinement towards <unk>.
Speaker Change: Activation process.
Speaker Change: We are also encouraged to see the response to its reliability response initiative, which has generated applications worth almost 27 gigawatts worth of nameplate capacity.
Speaker Change: In February <unk> initiated a 206 proceeding requesting that PJM and its transmission owners investigate whether the tariff remains just and reasonable and rates terms and conditions of service that apply to co located arrangements.
Speaker Change: We are pleased with the leadership shown by four and working to resolve this issue in a timely manner, along with Pjm's efforts to meet the aggressive timeline to address a very complicated topic.
Speaker Change: We're also encouraged by the consensus that PJM transmission owners were able to reach on a complex top in such a short period and we look forward to assisting the industry and aligning on a policy that equitably supports the national crisis critical issues of energy security and economic development more details on the progress.
Speaker Change: We're making across these forms can be found in our appendix.
Speaker Change: Maintaining momentum across these policy arenas is key to meeting the task ahead of us and we see no abatement in our opportunity for new large loads in our territories.
Speaker Change: The 17 gigawatt pipeline of opportunity that we communicated at our fourth quarter earnings call remains fully intact.
Speaker Change: We are also conducting advanced studies, an additional 16 gigawatts of high density low, which we anticipate will result in significant incremental commitments from customers upon aligning on investment needs and timing.
Speaker Change: We continue to focus on ways to enhance our process to ensure we are offering unparalleled service to our two new customers in our territories, while continuing to ensure existing customers are protected and benefit from the new low and the pace of new business seeking to connect to the grid makes it even more critical.
Speaker Change: For stakeholders to collaborate actively and with urgency on policy that balances the common goals of reliability affordability and progress toward a cleaner energy future.
Speaker Change: We look forward to providing further updates on our new business prospects in future quarters as a reminder.
Speaker Change: This is just one of the elements that contributes to our visibility into $10 billion to $15 billion up transmission opportunity beyond our plan as.
Speaker Change: As we laid out in our fourth quarter call the need for investment in our high voltage network is real and growing we are proud to have green Khuzami now leading those efforts with his extensive background in commercial regulatory and operational roles ideally suited to industry tailwind and our unique transmission asset.
Speaker Change: <unk> and capabilities.
Speaker Change: Also want to congratulate canola Olivier for her promotion to BCE, President and CEO.
Speaker Change: Effectiveness, leading increasingly large organizations during her 15 year career here will continue to ensure <unk> 2 million electric and gas customers receive high value service congratulations to you both.
Speaker Change: Lastly, I'll remind you of our expectations for our for your outlook.
Speaker Change: We reaffirm our plan to invest $38 billion over the next four years for the benefit of our customers that will drive seven 4% rate base growth and be financed with a balanced mix of debt and equity in fact, we have been able to derisk a large portion of our financing needs for the year with all of our plan.
Speaker Change: Corporate debt issuances completed and 60% of our $700 million annualized equity need price.
Speaker Change: By earning a fair return on that investment plan, we expect to deliver analyzed annualized earnings growth up 5% to 7% through 2028 generated consistent growth and long term value.
Speaker Change: I'll now turn it to Jim to discuss our financial performance and provide further details on our rate case activity.
Jim Jones: And good morning, everyone today, I will kind of our first quarter financial update and progress on our 2025 regulatory activity.
Jim Jones: Starting on slide five we present, our quarter over quarter adjusted operating earnings walk.
Jim Jones: Exxon earned 92 cents per share in the first quarter of 2025 compared to 68 per share in the same period in 2024, reflecting higher results at 20% per share over the same period.
Jim Jones: Earnings are higher in the first quarter relative to the same period last year, primarily driven by 14% of new distribution and transmission rates and in fact across our jurisdictions <unk> that favorable weather at Peco and two sets of tax repairs timing, partially offset by <unk> of higher interest expense due to higher levels of debt and increased interest rates.
Jim Jones: As anticipated results are also impacted by timing at cum Ed which totaled nine times for the quarter and <unk> <unk> due to the lower revenue recognition in 2024, as we awaited updated rates from the rehearing order and eventual approval of our rebound Grand plan.
Jim Jones: The remaining seven events due to year over year revenue shaping and O&M timing, including higher storm and 90 project related spend in the first quarter of 2004.
Jim Jones: We expect the revenue shaping and O&M timing to reverse in the balance of the year.
Jim Jones: These results are slightly ahead of our indications on the fourth quarter call, primarily due to this timing of O&M as well as timing of tax repairs.
Jim Jones: As we look ahead, our second quarter earnings are expected to be approximately 14% at the midpoint of our projected full year earnings guidance range, which contemplates partial reversal of the comment timing along with normal weather and storm activity in.
Jim Jones: In combination with Q1 results good resultant recognizing 48% of projected full year earnings in the first half of the year consistent with seasonal shaping and prayers, allowing us to remain on track for full year operating earnings of $2 64 to $2 74 per share with the goal to be at the midpoint or better.
Jim Jones: Finally, we are reaffirming our annualized earnings growth rate of 5% to 7% through 2028 with the expectation to be at the mid cleaner better of that range.
Jim Jones: Turning to slide six we currently have two base rate case cases open at Pepco Holdings.
Jim Jones: The Delmarva power gas distribution rate case filed last September remains on track with interim rates, which went into effect on April 20th subject to refund.
Jim Jones: <unk> seeks to recover continued reliability investments such as aging piping upgrades and upgrades to its LNG plant, which helps protect customers from supplier price volatility during peak periods.
It will be open for intervenor and rebuttal testimony in July and September before evidentiary hearings are convened in November and order is expected in the first quarter of 2026.
Speaker Change: Our second open base rate cases at Atlantic City Electric where we are seeking recovery of great improvement and modernization efforts in line with New Jersey's energy Master plan and the clean Energy Act.
Speaker Change: The proposed procedural schedule that was approved by the judge in March with settlement discussions that for late April early may.
Speaker Change: Evidentiary hearings are scheduled to begin in late July and continue into early August with an order expected by the end of the year.
Speaker Change: <unk> is also anticipated to implement interim rates on August 21 subject to refund.
Speaker Change: In Maryland, we continue to work to close out our final reconciliations from the first BJ and Pepco, Maryland, multiyear plans and remain engaged and lessons learned process as they approach our next rate case filings.
Speaker Change: We are encouraged that the legislature recognize the multiyear contract in the recently passed next generation Act.
Speaker Change: A lot of inflation provides greater direction and alignment between all stakeholders on the future of investments needed to support our customers.
Speaker Change: Now that we are in our second MIP FPGA and our fourth one in Maryland, we feel better prepared to support our multi year investment plan without a reconciliation and we look forward to working with the commission and our stakeholders to continue to demonstrate customer benefits and future multiyear plan filings with.
Speaker Change: We sat back we believe that forward looking plans are the most plantar and cost effective way to ensure the reliability and resiliency of the system, while meeting the state's energy and economical.
Speaker Change: We await the commission's comments on the lessons learned to fully insure our next following the lines of the Psc's recommendations that accommodate the new legislation and the lessons learned proceeding.
Speaker Change: Finally in Illinois comment <unk> annual performance evaluation and request for annual adjustment under 2024, our base distribution rates on April 29.
Speaker Change: <unk> adjustment of $268 million, primarily driven by operating operating under a lower revenue requirements throughout 2024 relative to the final approved order and it includes the revenue impact of achieving our performance metrics adder of over five basis points.
Speaker Change: Actual revenue requirement in 2024 are closely aligns with the final revenue requirement approved in December 2024.
Speaker Change: Direct and rebuttal testimony is expected to occur throughout the summer at Ada hearings and an ALJ proposed order in the fall.
Speaker Change: A final order on common second filiation is effected in December.
Speaker Change: Turning to slide seven I will conclude with a review of our balance sheet activity from a financing perspective, we took advantage of the favorable market conditions in the first quarter and made substantial progress on our 2025 capital needs.
Speaker Change: First we have completed nearly 50% of our planned long term debt financing transaction, having successfully raised $650 million for the Pepco holdings utilities, and all of our $2 billion of debt financing needs at corporate including 1 billion of hybrid debt. This.
Speaker Change: The strong investor demand and attractive pricing for our debt securities continue to be a testament to the strength of our balance sheet and to our value proposition positioning us well as we seek to finance the energy transformation in the most cost effective way for our customers and our investors.
Speaker Change: We also continue to execute on our patients hedging strategy implemented in 2022 to further protect us from interest rate volatility.
Speaker Change: As it pertains to equity as a reminder, in our last guidance update we estimated we would finance 40% of our incremental capital investment with equity, resulting in total equity needs of $2 8 billion over the four year plan and implying approximately $700 million of equity on an annual basis for 2025.
Speaker Change: Secondly, derisked nearly 60% of our annualized needs via our ATM issuing approximately $175 million worth of shares in pricing, an additional $250 million under forward agreements for issuance later in the year.
Speaker Change: As you heard on our last earnings call. We project to continue to have 100 to 200 basis points of financial flexibility on average over the plan for our consolidated corporate metrics above the Moody's downgrade gosh, almost 12% approaching 14% at the end of our guidance period.
Speaker Change: We continue to advocate for language that incorporates our pairs for Cathay and the corporate alternative minimum tax and we are encouraged by the recent bipartisan legislation introduced in the U S House to advocate for this change, which will lower energy costs for our customers. However, we will remind you that our plan assumes that the final regulations do not allow for repairs favorably.
Speaker Change: Addressing repairs and the minimum tax calculation would result in an increase of approximately 50 basis points to our consolidated metrics on average over the plan.
Speaker Change: Thank you I'll now turn the call back to Calvin for his closing remarks. Thank you Jim in closing on slide eight I'll reconfirm, our focus as we look to add another year of execution to our track record as a premier utility our talented and dedicated employees will continue to deliver operational excellence investing nine 1 billion.
Speaker Change: And the system to deliver high reliability service to our customers.
Speaker Change: We are also constantly working to find the right rate, making mechanisms that allow us to fulfill our responsibility and privilege to serve the $10 7 million customers that count on us for their energy needs.
Speaker Change: Those mechanisms need to provide adequate compensation for our investors, while allowing for the critical feedback and collaboration necessary to ensure we are only investing where our jurisdictions want us to invest.
Speaker Change: We recognize some of our customers are broadly struggling with economic uncertainty as well as we all navigate updated tariff policies federal budget re prioritization and increased energy supply costs.
Speaker Change: The extremes like our first cold winter in years, only exacerbate those pressures.
Speaker Change: We do feel that we are relatively well positioned to protect our customers as it pertains to the proposed tariff policy with approximately 90% of our supply source domestically, we have estimated the impact to be around one 5% of our four year capital and O&M investment plans before any mitigating efforts.
Speaker Change: With the majority impacting capital.
Speaker Change: The impacts will also be delayed as a result of our inventory levels and long lead time requirements.
Speaker Change: With our size scale and deep concentrated investment plan and the culture of cost discipline, we expect to be able to manage any tariff related impacts highlighting the value of excellence platform.
Speaker Change: And while we are advocating for the continuance of the tax credits under the IRA well, we are not directly exposed to any reductions in those nor to any transferability restrictions as gene mentioned, we remain committed that we will be able to improve our position with respect to the corporate alternative minimum tax associated with.
Speaker Change: That law.
Speaker Change: We will continue to leverage a variety of tools to assist customers, including deferred payment plans as well as suspended disconnections and associated fees and we are advertising budget building options throughout community forums and customer and community engagement Index <unk>.
Speaker Change: Additionally, our policy advocacy has focused on solutions that enable PJM and our states to acquired new power supply as cost effectively as possible, while serving large new loads equity as I noted earlier, we have made good progress, thus far and legislative and regulatory forums.
Speaker Change: Finally.
Speaker Change: We also stress the degree to which we try to maximize the dollars that we need to invest in the grid to serve our customers. We focus on forward looking recovery mechanisms because it allows us to collaboratively determine where best to invest their dollars and do it efficiently in fact over the last five.
Speaker Change: Five years over 98% of the net profits we earn at our utilities all of which are established and reviewed through rigorous regulatory proceedings. We have we have been reinvested it had been reinvested back into the business for our customers.
Speaker Change: And for every $1 million of capital investment we make at our utilities is supports eight jobs are $1 6 million in economic output.
Speaker Change: So customer affordability continues to be a big part of our focus this year, which complements our efforts to drive economic development to further benefit our jurisdictions and of course as always you can count on our continued discipline in executing our financial plan, earning a.
Speaker Change: <unk> Roe of.
Of 9% to 10%, maintaining a strong balance sheet and reporting earnings within our guidance range of $2 64 to $2 74 per share.
Speaker Change: We look forward to making 2025 or 25th anniversary of Epsilon another year, where you can count on us to deliver consistent growth and long term value.
Speaker Change: We can now open it up for any questions.
Speaker Change: If you would like to ask a question simply press Star one one on your telephone keypad.
Speaker Change: Our first question.
Nick Campanella: Come from the line of Nick Campanella of Barclays. Please go ahead Nick.
Nick Campanella: Good morning Mig.
Nick Campanella: Hey, good morning, everyone I hope everyone's well.
Nick Campanella: So I guess just you have this new Maryland legislation that's out there it doesn't prohibit reconciliations after gen 125%.
Nick Campanella: Just wondering if you can maybe kind of talk about how you think that could impact the outcomes in the BJ or the Pepco reconciliation.
Nick Campanella: If an order we're just kind of go against you there.
Nick Campanella: Is the guidance resilient to that and maybe you can kind of give some more color on that thanks.
Speaker Change: Yes, let me let me just say this first thank you for the question and to your direct point I think Jim hit it well is that we do expect the reconciliation to come forward in short order.
Speaker Change: Our plan is solidified and ready to operate as we considered all alternatives. There is nothing on here that we believe that will prevent us from meeting our objectives. That's one but let me turn it also make too where we see Marilyn going as you know better than most of that.
Speaker Change: Maryland. This year had legislative legislation passed in I think it's important to focus on five key areas I'll point out one for the first time. It provides a language that <unk> can be approved and as you talked about it doesn't have reconciliations, but we've kind of gone through this process a couple of times in IPG or not.
Speaker Change: Fourth one in Maryland, So we know how to build this up and know how to work collaboratively with the state goes to ensure we spent on the right base and I'm very comfortable that we will meet the budget for future.
Speaker Change: Rick.
Speaker Change: Second spin.
Speaker Change: Specific language in the legislation. This year stated on the large low co location issue, which was very important.
Speaker Change: It has provisions in there that requires that any low that for infrastructure upgrades and other reasonable cost behind the meter it's balanced and it does not shift the cost to other customers on the system, that's very important and that would apply to any low over 100 megawatts with greater with 80% or greater capacity.
Speaker Change: Factor. So this is very important and it's important to note that we continue to drive this on an affordability front within our jurisdictions in Maryland has qualified it.
Speaker Change: The next pieces that.
Speaker Change: Battery storage was a big item within the Maryland legislation. It directed that the public service Commission established solicit a 150 megawatts of distribution battery storage from each electric utility with a target of 70% owned by the utility and 30% owned by.
Speaker Change: And third parties.
Speaker Change: It also requires that the PSC startup procurement solicitation of one six gigawatts of transmission battery storage by January 'twenty, six again, all indications that they recognize the issues and they are driving the state of Maryland for and I just want to also give kudos and just acknowledge.
Speaker Change: Two new commissioners that have been appointed.
Speaker Change: They are they have a strong track record of regulatory experience and I think they will continue to be vital voices in Maryland, as we move forward. So long answer but to your direct question. We are not concerned about the reconciliation pullout of the legislation and we feel very confident that we will work with the state to meet the needs going forward.
Hey, Thanks for all that color I appreciate that and then.
Speaker Change: Maybe on the FERC 206, obviously theres been some request to settle by the power companies and that was put forward a week or two ago and I'm just curious what your response would be at the T&D.
Speaker Change: Are you do you think or are you open to resolving this co location issue via settlement, perhaps in or does this kind of need to go the full distance at FERC any comments there would be helpful. Thanks.
Speaker Change: Thank you Nick I would say, we're always open to discussions and have been from the very beginning and that Hasnt changed we continue to move forward as the T&D to meet our customers' expectations, we talked about the 17 gigawatt and another 16 that we're considering so our processes continue.
Speaker Change: I think the.
Speaker Change: The transmission owners coming together, putting forth this statement EI, putting a transmission owner unified statement.
Speaker Change: Goes a long way so our principles have not changed one bit.
Speaker Change: And we are right there and having discussions with the IPP is we're open and we're open to make sure that we get this done quickly and equitable for all of our customers and that has not changed.
Speaker Change: Thank you.
Speaker Change: Welcome. Thank you.
Speaker Change: Thank you our next question.
Speaker Change: Comes from the line of Jamie Kennedy of Guggenheim Partners. Your line is open James.
Jamie Kennedy: Hello, Hey, guys.
Speaker Change: Hey.
Speaker Change: So one of your peers has been talking recently about the introduction of legislation in Pennsylvania to support potentially regulated generation I guess, what's your degree of involvement in that process and any views on Reg generation versus potential long term ppas or other mechanisms.
Speaker Change: I would tell you that anything that is good for our customers to address the issue of resource adequacy.
Speaker Change: And affordability, we will support Rfps you can appreciate James our teams are actively involved in those discussions at the legislative front and even having the discussions with the regulatory side. So we just needed to be balanced and we need to ensure that the recovery of us getting into that.
Speaker Change: I'll put my CFO is that we need to have a very straightforward approach embed recover recoverability is very clear and outlined in legislation. So are we know what we're getting into and we're partnering with the state to meet those needs, but it's all about the customers in terms of affordability and energy security and adequacy.
Speaker Change: Right.
Speaker Change: Okay, Perfect and then just on the datacenter side, thanks for the incremental color in the appendix slides on the phases.
Speaker Change: Is there like a rule of thumb that we should be thinking about for how you convert between the phases ultimately shifting to the capital plan and any kind of timeline considerations.
Speaker Change: Yes.
Speaker Change: Yes, we don't really have a rule of thumb because every project is different and we always start with how do we how do we be most cost efficient for all of our customers and so.
Speaker Change: As you can imagine therefore, it depends but what I will say is that the $38 million that we have in the planned $5 billion of that is for new business and when I look back to our last four year plan that was an increase of $900 million. So we can expect to continue to see more incremental capital necessary to accommodate the new load.
Speaker Change: As we outlined in our fourth quarter call that 10% to $15 billion beyond the planning period at least a $1 billion is related to this new business so well.
Speaker Change: As we as we know the investment is needed we built it into the plan, but as we've often we don't we don't put anything in medicine. So of the $38 billion 5 billion related to new business and that's what leads to $900 million increase from our last four year period.
Speaker Change: And we expect that to continue.
Speaker Change: Excellent thanks, guys.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Next question comes from the line of Julien Dumoulin Smith of Jefferies. Please go ahead.
Speaker Change: Hey, good morning, again nicely done guys Hey, Thank you again for your time.
Speaker Change: Yeah.
Speaker Change: Absolutely.
Speaker Change: Just following up on some of the last questions. If I can press a little bit further if you don't mind.
Speaker Change: First on the data Center front I mean, you all are framing these is 80% and 50% probably either fairly high numbers in isolation, how do you think about the timing here and how that.
Speaker Change: Perhaps is juxtaposed against the backdrop of this FERC ongoing process again, I think we all take it for granted that maybe one sort.
Speaker Change: Precludes the other but how do you think about an 80% probability is non trivial.
Speaker Change: Particularly given the metric that you define them as being.
Speaker Change: Having already achieved.
Speaker Change: Yeah, I would say I would start with saying that none of this as a reminder is dependent on that co located at FERC to attacks. This is all in front of the meter.
Speaker Change: For T&D.
Speaker Change: Typical sort of customers that we have in our secretary. So I assume none of that is dependent on that process and and in fact, we're not seeing any slowdown as as they work through that process. So we got we announced in 16 games in Q4 of 'twenty for those 16 games remain.
Speaker Change: Very solid high probability and we've even given more color in terms of phase one phase II and phase III for those 16 gig well, we did a little bit different. This time is also give you insight into what's around the corner and we have another 16 gig so sorry to confuse you, but about the same number but it's another 16 gig 12 of that is a cluster.
Speaker Change: The second cluster study, we're doing and comment service territory and then four of it is just spread across the east coast utility. So continued momentum all in front of the meter not dependent on this process, but as you heard from Calvin we continue to work that process in parallel because we want to meet all and any any and all types of customers.
Speaker Change: And as we think about the buckets you can see again phase I phase II phase III I would say, 70% is probably phase one another 2000 phase II and 10% in phase III, we feel very confident in the other 16 gig and I think you can kind of think of them roughly in the phase one time period too, but we wanted to be clear about how we're thinking.
Speaker Change: Those in the fact that we're moving more because of the demand we're seeing more of a cluster steady approach, where we're looking at customers together. So that we can give them better insights into time and cost and things like that so continuing to evolve our customer service there, but as that customer said. He is completed as we work with the other four gig you can expect us to kind of.
Speaker Change: The move that 16 gets into the other phases as we continue to update you on a quarterly basis.
Speaker Change: Alright excellent.
Speaker Change: Excellent. Thank you for clarifying that it remains distinct and separate and I appreciate that.
Speaker Change: And then related just not to nitpick too much on the prepared comments, but I'm just curious when you talk about assisting the industry with respect to.
Speaker Change: The backdrop here on leadership at FERC.
Speaker Change: Do you think about what that time, it looks like and what that settlement process could be I know that there is.
Speaker Change: Several different forms right you could have another pjm's takeaway process that there could be more of a FERC oriented process here, how do you think about.
Speaker Change: Potentially finding.
Speaker Change: A joint arrangement or settlement here amongst a litany of different parties.
Julien: Good morning, Julien is collette on or about how do we need today.
Lindsey: Great. Thank you Lindsey okay. Good.
Speaker Change: Me get to your question one let's take a look at the Bakken itself, we really see quite a bit of consensus in the docket housing reference the filing that <unk>, which represents the majority of the industry.
Speaker Change: The filing the filing from the independent market monitor and then <unk>.
Speaker Change: Transmission owners group really demonstrate to FERC that there is a record and a consensus about how to treat this load.
Speaker Change: When Kevin said, we appreciate it that commissions FX here. It can move quickly. So that we can all have the clarity that we need that's where we started in <unk> and so we're not to pass it off the docket is progressing as Calvin mentioned, we will be open to having discussions of any sort, but what we really want it.
Speaker Change: To issue a decision quickly so that we can all have the clarity. So that we can support large load that Jim described as well as going back to Kevin's point, ensuring affordability and energy security for all of our customers.
Speaker Change: Got it so looking for FERC to take action, principally before anything else with a firm decision.
Speaker Change: We think there is a record perform the day so as Kevin mentioned should that should the commission determined that settlement discussions are appropriate we would be more than willing to participate in that exercise and we have been very constructive partners in the past. If you look back at our record here, we were the ones that really.
Speaker Change: Got it in the forefront of this issue. So we've demonstrated that we will be constructive and collaborative partners, but we're ready.
Speaker Change: To continue supporting this.
Speaker Change: <unk> and Penn.
Speaker Change: Excellent. Thank you all very much see you soon.
Julie: Thank you Julie.
Speaker Change: Thank you. Our next question comes from the line of David Arcaro of Morgan Stanley. Please go ahead David.
Julie: Morning, Jami. Thanks, good morning, good morning.
David Arcaro: Maybe a quick follow up on the data center side of things could you just give a sense as to the timing of when that load that looks to be ramping up within your forecast period and.
I guess from your I'm also thinking in the context of your infrastructure and any limitations. There when can you connect in new large loads at this point given such a big pipeline.
David Arcaro: Yeah. So as we think about the <unk> that we have on the slide we think about 10% of the load will be on by 2028. Another third of it by 2033 fourths of that by 2034, and then the remainder of beyond that so that kind of gives you an insight into the data center load coming on.
David Arcaro: And then your second question again, it depends on the customer I mean, I think there is.
David Arcaro: At times, where it.
David Arcaro: Six months.
David Arcaro: Always trying to push to be faster for our customers. Other times it can be a little bit longer but in all of our discussions. The most important thing we hear from our customers is just understanding the timeline.
David Arcaro: And being upfront with that and just why these studies are still an important so.
David Arcaro: I think.
David Arcaro: Let me answer that David also I think it was last year, we talked about how we've restructured our customer strategy organization and we created a centralized group to talk with the data center developers.
David Arcaro: And really to understand what their needs were and.
David Arcaro: By strategically working with them ahead of its headed Todd what we found is that we can meet their needs and understanding how much they need to ramp up in a timely fashion. It also determined an appropriate sites, where they can can mix quicker onto the system, where the infrastructure was already there or in large part there so it.
David Arcaro: Required less and that's the partnership give me. An example, just about a month ago, we had.
David Arcaro: Hosted and we hosted with them a large key account meeting in Chicago, and we had sidebars with all the large data center developers to talk about their needs and where they were going and we've looked at all of our six jurisdictions to say if this is what you need secure sites that we've identified and thats that partnership so to jeans.
David Arcaro: All very different but it's a very collaborative approach and how we are targeting.
David Arcaro: Okay excellent thanks for that and.
David Arcaro: I wanted to touch on affordability, we've seen some some states may be louder than others, but seeing.
David Arcaro: Pact of PJM capacity pricing increases.
David Arcaro: An increased focus on affordability wondering how you're kind of approaching that getting ahead of that and managing affordability challenges and concerns that.
David Arcaro: Broadly across your portfolio.
David Arcaro: No.
David Arcaro: It has become the primary topic of discussion this past winter as I've talked about in my prepared remarks. This was the first cold weather we've had in several years and as an example, BJ builds were up approximately 50% with 80% of that increase due to weather commodities.
David Arcaro: Just.
David Arcaro: Legislative changes that were made.
David Arcaro: Our Delmarva power light BPL had no real changes in gas distribution rates, but equally high increases we continue to see whether volatility and supply costs, which are the primary challenges. We are working to address and mitigate for customers and as I've talked about what we're doing proactively where health.
David Arcaro: <unk> our customers manage their costs.
David Arcaro: We're talking about energy efficiency, we're going out to customers homes, and small business really driving what they can take action to mitigate some of those we are deploying our tools to assist customers we've already suspended disconnections.
David Arcaro: We've delayed or extended payment plans removed any additional charges and I think the biggest piece for US is that were out in our communities at a robust level holding community forums and connecting with them and ensuring that the assistance that may be available at the state and local level, we're connecting them.
David Arcaro: With that.
David Arcaro: That is the key or we've done absolutely not do we recognize.
David Arcaro: Ignite the hardship that many of our customers are facing yes, as I always say to my team here a dollar increase for some of our customers is a $1 too much. So we're not taking it lightly and so we're having conversations at the state and local level about how to partner and I think a good.
Speaker Change: Scenario, but you can think about the Maryland legislation that I was talking to Mick about earlier, they allocated $200 million.
Speaker Change: From a fund that they had established and I think that fund was called.
Speaker Change: It was strategic energy infrastructure fund directed at the company's new had about 300 million. They took $200 million of those dollars to help people with paying their bills now how can we partner with them to let those dollars go further and we're having those discussions so if youre right key issue.
Speaker Change: The key issue and we're meeting those challenges.
Speaker Change: Okay, Great I appreciate the color. Thank you so much.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Bill <unk> of UBS. Please go ahead bill.
Speaker Change: Hey, Bill.
Bill: Hey, Good morning, just wanted to go back to Maryland for a second.
Speaker Change: Maybe on the lessons learned back can you just remind us on the timeline and maybe what's the range of outcomes there.
Bill: Given the legislative developments is there any concern around.
Speaker Change: Not continuing the mip's.
Speaker Change: Beyond the current plan or sort of maybe a range of scenarios that we could we can look to there.
Speaker Change: I would tell you that the fact in the debate this shift around.
Speaker Change: <unk> PS.
Speaker Change: The state legislature did a wonderful job of understanding the value of <unk>, but we do have the discretion to your point on whether we do we do believe that that multiyear collaborative process the engagement with stakeholders.
Speaker Change: We're looking is the most productive so I don't see anything to date that would take us away from that.
Speaker Change: And I am pleased that the commission did in part on the lessons learned process.
Speaker Change: So it extended into this year likely delaying the timing.
Speaker Change: But we believe that this legislative session that we just that will spark.
Speaker Change: A ruling very soon.
Speaker Change: As you May recall, we went through an extensive process to.
Speaker Change: To be determined that it was the best option and so I think we will have I'm looking at <unk>, we will have a decision in the short order we anticipated by the end of the second quarter that we will have a decision on the lessons learned and we continue to involve those traits everyone that submitted their comments.
Speaker Change: We won has engaged in the process from the office of people Council to the large industrials to residential customers. So everyone's voice has been heard which is what we wanted and that's what we're driving to.
Speaker Change: Okay, Great and then just going back a little bit to the resource adequacy debate.
Speaker Change: You're indicating an ever increasing amount of money that you're interested in coming on.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: Q I think for new capacity additions remains pretty small probably I think theres only about six gigawatts of gas in.
In the Q for PJM.
I guess.
Purchase could be having this technical conference here in June but I.
Speaker Change: I guess, where do you guys stand in terms of addressing the resource adequacy concerns as you look out to the system.
Speaker Change: When did that once they come on over the next call it five to seven years.
Speaker Change: We do believe it's a portfolio approach meaning that.
Speaker Change: There is an approach that PJM and all of our states can take that we can't limit how we get to generation resources to the table, we should be looking at everything and if it's a delay of closings of certain plants is it's allowing gas to come in and built and we've talked about this utilities.
Speaker Change: Owning generation all of that needs to be on the table because as you've just said we see we're at a critical time in this industry, where we have to meet the need.
Speaker Change: Being said that it has to be a very balanced approach and you have to balance it with the affordability issue and I think that's why it's all coming to the table right. Now so our discussions is portfolio approach, let's be open to it and get it done sooner rather than later and also put the right policies around it where you don't ship the <unk>.
Speaker Change: Cost from one customer group to another because we're running too fast.
Speaker Change: Yeah, and I think to add to that portfolio.
Speaker Change: On energy efficiency and distributed resources demand response, and engaging with our state fair to say how can they how can this program, whether we have them today, we expand upon them or to implement new programs to continue to add to that portfolio approach.
Speaker Change: Part of our challenge that we've been saying this for a while now.
Speaker Change: Is.
Speaker Change: Some jurisdictions are using.
Speaker Change: Let's call it outdated rules outdated rules to address modern issues and we need to keep the policies updated to address the needs of tomorrow and Thats what were working on and I'll just yeah. It's very it's it takes some time to move regulatory body.
Speaker Change: These forward in a timely manner to meet the needs of tomorrow, and that's what we've really been putting our attention towards.
Speaker Change: One of the size and type of it to Calvin Klein about the portfolio penetrate where active FERC.
Speaker Change: After that PJM CP dampening fourth proposal on the capacity auction for a variety of proving some of them. But then also to Calvin plant working with our state, Maryland has already made progress here in the first legislative session with that.
Speaker Change: Outlining a competitive procurement process for three gigawatt, but in state generation. So I think we're pleased to see all of our stakeholders working with a sense of urgency and we're right there at the table to help drive those solutions.
Speaker Change: Alright, great. Thank you for that.
Speaker Change: Thank you. Thank you I would now like to turn the conference back to Calvin Butler for closing remarks, Sir.
Calvin Butler: Thank you. Thank you achieve but let me just say to everyone. Thank you for your interest and support of Exelon I Hope as we continue to move these things forward, we are providing you with.
Calvin Butler: Valuable information and we appreciate you all taking the time to join US today and for your support but cheap that concludes our call.
Calvin Butler: Okay. Thanks to all our participants for joining US today. This concludes our presentation. You may now disconnect have a good day.
Calvin Butler: Okay.
Calvin Butler: Okay.
Calvin Butler: [music].
Calvin Butler: Okay.
Calvin Butler: [music].
Calvin Butler: Yes.
Calvin Butler: Hum.
Calvin Butler: [music].
Calvin Butler: Yeah.
Calvin Butler: [music].
Calvin Butler: Yes.
Calvin Butler: [music].
Calvin Butler: Okay.