The operator, Gigi, welcomes listeners to Exelon's first quarter earnings call and introduces the company's President and CEO, Calvin Butler, and CFO, Jeanne Jones. Andrew Plenge, Vice President of Investor Relations, provides an overview of the call and reminds listeners of the company's forward-looking statements and non-GAAP measures. Calvin Butler thanks listeners for joining and expresses the company's continued focus on strong execution.

Exelon has had a strong start to the year, meeting financial expectations and making progress on the regulatory front. They acknowledge the passing of their predecessor, Chris Crane, and the impact he had on the company. They earned $0.66 per share on a GAAP basis and $0.68 per share on a non-GAAP basis despite facing below normal weather and storm activity. They are on track to deliver strong operating earnings and continue to perform well operationally. They have also made progress in improving their regulatory outlook in Illinois, filing an updated grid plan with the Illinois Commerce Commission after receiving feedback from them in December.

The ComEd team has worked diligently to refile an updated grid plan that addresses the ICC's direction and is awaiting a final order by the end of the year. They have also received approval for an updated revenue requirement and have filed rate cases for PECO to support infrastructure investment and customer assistance programs. The Delaware Public Service Commission has also approved a settlement for Delmarva Power & Light's electric distribution rate case. The company remains committed to long-term growth and has achieved top performance in operational excellence despite storm activity in the first quarter.

The company has maintained strong customer satisfaction scores, with ComEd achieving top decile. BGE has identified and addressed customer pain points and is seeing positive results. The company also has a strong safety culture and has adopted a more targeted and comprehensive framework to monitor high safety risk situations and engage employees. This has resulted in improved safety performance in the first quarter. The company acknowledges the unique physical risks in the power sector and is continuously working to improve safety performance.

The approach to focus on the highest risk safety situations not only ensures efforts are targeted effectively but also measures the success of these efforts. This is reflected in the reporting of safety performance through the serious injury incident rate. ComEd and PECO are implementing strategies to improve safety performance, including a copilot program for safe driving. In terms of financial and regulatory updates, Exelon's first quarter adjusted operating earnings were lower compared to the same period last year, primarily due to higher interest expense.

The paragraph discusses the financial results of the company in the first quarter, highlighting a decrease in earnings due to higher restoration and repair costs from storms and lower returns on investments. The company expects a lower EPS contribution in the next quarter but is confident in managing weather-related risks and changes in the plan. The rehearing for ComEd also provides additional revenue relief for the company.

The company is confident in its ability to manage costs and utility work plans while also delivering on its earnings expectations for the year. They are on track to reach their goal of $2.40 to $2.50 per share in 2024 and are reaffirming a 5% to 7% annual growth target through 2027. In Illinois, there have been positive developments in regulatory matters, including an increase in revenue requirements and the filing of a revised grid plan with reduced investment levels and bill impacts. Obtaining approval for the grid plan remains a top priority for the company.

The article discusses additional affordability analysis done for the proposed grid plan, which shows that the new rates will result in electric bills that are less than half the threshold for energy burden. It also outlines the benefits of the clean energy transition, with a focus on disadvantaged communities. The article also mentions a new cost effectiveness framework and the quantifiable benefits of the grid plan investments. The plan aligns with the objectives of the Climate and Equitable Jobs Act and the commission has issued a procedural schedule to implement the rates by the start of 2025.

ComEd has filed a final distribution formula rate reconciliation with the ICC seeking a one-time recovery of $627 million in rates effective January 1, 2025. This increase is due to various factors such as higher O&M expenses, inclusion of beneficial electrification, and additional investments in infrastructure. Storm recovery was also a significant driver of the under recovery, and a decision on the reconciliation is expected in December. The company's priority is to obtain approval for its refiled grid plan, and early approval of the rehearing and adoption of a procedural schedule are crucial steps to achieving Illinois' clean energy goals. On the East Coast, PECO has filed both electric and gas distribution rate cases with the Pennsylvania Public Utility Commission, requesting a $399 million net revenue increase by 2025 to support infrastructure investments.

PECO has proposed a storm reserve mechanism and weather normalization adjustment to reduce the impacts of severe weather and make customer bills more predictable. They are also seeking to recover $111 million to replace gas mains and service lines and improve infrastructure. Despite severe storms in 2023, PECO had the lowest power outage in company history. The company's investment plans aim to further improve reliability. The Delaware Public Service Commission approved a $42 million increase in distribution rates for Delmarva Power.

The decision to implement full allowable rates on July 15, 2023, subject to refund, will improve recovery of investments in infrastructure, align revenues with costs, and help with high storm expenses. There is an update on the progress of Pepco's electric distribution rate cases in Washington, D.C. and Maryland, with a final order expected in the third quarter and by June 10, respectively. The hearings in Maryland demonstrated the benefits of a multiyear rate plan and Pepco's proposed investment plans align with the state's clean energy goals. More details can be found on Slides 19-29 of the Appendix. The paragraph concludes with a review of balance sheet activity.

The company's projected credit metrics are expected to have a 100 basis point cushion above the threshold specified by agencies. The implementation of the corporate alternative minimum tax may increase this cushion to 150 basis points. The company has successfully raised $1.7 billion in corporate debt and $1 billion for PHI entities in the first quarter, completing 55% of their planned 2024 long-term debt financing needs. The company continues to monitor the capital markets and regularly assess their plans for future debt issuance. There has been no change in the company's guidance to issue $1.6 billion in equity over the 2024 to 2027 period to fund their capital plan. $150 million of equity is expected to be issued in 2024 and the balance of approximately $475 million annually over 2025 to 2027.

The company will continue to update stakeholders on their progress and focus on operational excellence, achieving regulatory goals, and delivering on financial commitments. They will also advocate for a balanced energy transition and invest in communities, including partnering with the Cal Ripken Senior Foundation to open STEM centers in various cities.

The company is focused on maintaining customer affordability and operating more efficiently. The foundation for this was established by the former CEO, Chris, who prioritized operational excellence and diversity and inclusion. There is potential for natural gas growth in Pennsylvania, which could support data center development.

The company is seeing significant growth in high-density loads in Illinois and Pennsylvania, and they have the infrastructure to support it. The utilities will also be a partner in economic development. They are seeking approval for a store mechanism and weather normalization adjustment in PECO rate cases, which have been used before and may face some contention.

David Velazquez explains that both weather normalization and storm reserve mechanisms have been used by gas and electric utilities in the past. These mechanisms have been approved and known to be effective. Aidan Kelly acknowledges this and ends the discussion. The last question comes from Carly Davenport of Goldman Sachs, who asks about the timing of the grid plan refiling for ComEd. Calvin Butler believes that it will still be a December event despite the rehearing being resolved sooner than expected. They are continuing to work with stakeholders to drive the process to conclusion and hope to have the rates in effect before the beginning of next year. Gil Quiniones does not have anything to add.

The ICC has set a deadline for a decision on a matter and an administrative law judge has established a schedule for the decision. The company has completed most of its financing needs for the year and does not anticipate any major impact from interest rate changes. The company has also termed out its short-term debt and has measures in place to manage interest expenses.

Calvin Butler thanks the participants for joining the call and their interest in Exelon. He expresses appreciation for their questions and looks forward to connecting with them in the future. The operator then concludes the call.

This summary was generated with AI and may contain some inaccuracies.