The operator welcomes listeners to Exelon's Second Quarter Earnings Call and introduces the event's specialists. Andrew Plenge, Vice President of Investor Relations, leads the call and is joined by Exelon's President and CEO Calvin Butler and CFO Jeanne Jones. The presentation, along with earnings release and other financial information, can be found on Exelon's website. Forward-looking statements and non-GAAP measures are mentioned, and the call is focused on reporting a solid second quarter earnings and operational performance.

The company expects to meet its guidance range for earnings and reaffirms its long-term guidance. They have delivered above expectations due to favorable weather and operational performance. Progress has been made on the regulatory front, with agreements reached with key parties. Approval of their revised plan will ensure investment in maintaining a reliable and clean grid. The PECO rate cases and Pepco DC's rate case are also on track for final decisions.

The company received an order in PECO Maryland's second multiyear plan rate case, which adopted a one year framework with the ability to refile for new rates. This plan maintains positive elements of multiyear rate making and allows for updates to keep rates current with costs. All stakeholders, including Exelon, are interested in balancing interests and meeting the goals of Maryland's Climate Solutions Now Act. Multiyear plans provide transparency, accountability, and alignment, and can instill confidence in customers. The company is refining their regulatory strategy based on this plan.

The company is open to discussing any necessary adjustments to address stakeholders' concerns and is currently focusing on operational performance. Despite facing challenges such as increased storm activity, the company's utilities are performing well and have improved their safety ratings. The company is grateful for its dedicated employees and the mutual assistance provided during storm seasons. The company is also utilizing a new safety observation platform to prevent incidents.

ComEd is focused on improving its performance and moving into the top quartile, with consistent customer satisfaction scores. Other utilities under Exelon, such as PECO, Pepco Holdings, and BGE, have also made progress in improving their performances. ComEd's actions to improve include enhancing accuracy for time to restore communications and providing more self-service options. The second half of the year is expected to bring continued operational excellence and value to customers. Jeanne Jones then covers the financial and regulatory update for the second quarter, highlighting Exelon's earnings of $0.47 per share, which is $0.06 higher than the same period last year. This increase is attributed to higher distribution and transmission rates from investments and completed rate cases.

The company's earnings for the first quarter of 2024 were above expectations due to favorable weather conditions and early execution of their weather and storm recovery plan. They expect similar earnings contribution in the third quarter and reaffirm their long-term earnings growth guidance. There have been positive regulatory developments for ComEd, with support for their revised grid plan and a minimal increase in residential customer bills.

ComEd and PECO have filed their testimonies for their rate cases with the Illinois Commerce Commission and Pennsylvania Public Utility Commission, respectively. Pepco Holdings had a legislative-style hearing with the DC Public Service Commission to discuss its pending multiyear re-plan filing. The procedural schedule for the hearing is expected to conclude in late August, with a final order in the fourth quarter of this year. Pepco Maryland received a final order on June 10, which adopted a one-year plan with a total revenue increase of $44.6 million and a 9.5% ROE. The company is grateful for the ability to file for new rates and reconcile eligible costs.

The company remains committed to engaging with the Maryland Public Service Commission and advocating for transparency and accountability in rate making. They are requesting a rehearing and reconsideration of certain aspects of the decision. The company's footprint and platform continue to attract low growth opportunities, such as AI-driven data center demand and electrification trends. One example is a large data center project in Illinois which will bring over 1,000 construction jobs and further advance economic development in the area.

ComEd's 25 years of experience working with data center customers and strong infrastructure in the region have attracted energy-intensive industries. This has resulted in a 45% increase in transmission spend and significant updates in new business. In Maryland, BGE is playing a crucial role in transforming the Baltimore Peninsula into a mixed-use community, with new substations and capacity to support 100 megawatts of load and distributed solar and EV charging stations. This project will also bring new jobs and investments to the area.

The company is the largest transmission and distribution utility in the country and plays a vital role in supporting areas like Baltimore City for economic development and addressing infrastructure challenges. They operate in six utilities across seven jurisdictions and provide a world-class customer experience. The company's platform allows them to support customers at a national level and they have a strong balance sheet. They are also awaiting guidance on the implementation of the corporate alternative minimum tax, which could potentially increase their credit metrics.

In the second quarter, the company successfully raised $1.6 billion for ComEd and BGE, completing 90% of their planned long-term debt financing for the year. They have a strong balance sheet and continue to see strong investor demand for their debt. Their guidance to issue $1.6 billion of equity from 2024 to 2027 remains unchanged, and they expect to issue approximately $150 million this year and the balance over 2025 to 2027. The company's top priorities include achieving operational excellence, accommodating customer engagement with the grid, and reaching fair rate case outcomes. They have a number of proceedings expected to conclude in the second half of the year, providing clarity for their plan for the next several years.

The company is focused on building a reliable and modern grid through effective rate making and investing in capital. They are also working to ensure all customers benefit from the energy transformation and are addressing concerns about co-located customers sharing grid costs. The company is a leader in investing in the energy transformation and supporting economic development. They recently announced a partnership to house a utility-scale quantum computer in Chicago.

The speaker discusses the company's commitment to investing in the energy transformation while maintaining affordable rates for customers. They also mention advocating for policies that support grid investment and monitoring a FERC proceeding. The question from the audience is about the company's conversations with state policymakers on solving resource adequacy issues, and the speaker acknowledges concerns and signals that have been raised in the past.

The challenges of providing reliable, affordable power are discussed, and the need for infrastructure investments in generation and transmission is highlighted. The company is focused on meeting these challenges and ensuring a resilient grid, and plans to continue expanding energy efficiency efforts to help customers manage affordability.

The company has reached a milestone of 1 gigawatt of distributed generation in Illinois and will continue to work with policy makers to find solutions that benefit customers and address competing demands. They will also focus on controlling their O&M costs and are open to exploring different options, including potentially owning peaking assets, to ensure affordability and equity in their operations.

Calvin Butler, speaking about the Susquehanna protest, states that the issue has gotten a lot of attention due to the emergence of a new source of load and a promising industry for the US economy. He clarifies that their protest is not against co-location, but rather about fair rate design and ensuring that all users of the grid pay their fair share. Butler also mentions their success in attracting data centers to their markets and their focus on economic development and affordability.

The speaker states that their company is committed to serving all customers equally and driving growth in various jurisdictions. They also mention that policies should not be determined on a one-off basis and they will continue to monitor FERC's decisions. The speaker then responds to a question about state support for attracting data centers, saying that they have seen a lot of momentum and several states have passed legislation to provide tax benefits. The COO adds that they have seen no shift in state support for data centers and all jurisdictions see the opportunities created by them.

The company is supportive of jobs and economic development, but also wants to ensure fairness and equity in the process. The most activity for data center projects is currently happening in Illinois, with over 5 gigawatts in the engineering phase and 13 gigawatts in the prospect phase. Other states, such as Maryland, also remain committed to supporting data centers.

The company has seen a number of operational data centers in Maryland and remains committed to attracting more. The team is actively engaged in this process and is ensuring operational and reliability standards are met. In Illinois, the company has reached agreements with some parties regarding the grid plan, but it is unclear which parts of the plan they have agreed to. The impact of these agreements on the commission's decision is uncertain, as it has previously ignored staff and ALJs. Settlements may hold more weight in the decision-making process.

In December, there was a discrepancy between the expectations of the commission and the stakeholders regarding a plan. Since then, the company has been actively engaging with both parties to reach a compromise that satisfies both groups. This has resulted in agreements that signify progress and will be presented to the commission for final approval. The agreements cover compliance and policy issues as well as investments and cost benefits. The evidentiary hearing will take place in August.

Calvin Butler and Steve Fleishman discuss the importance of reaching an agreement with stakeholders in the refile grid plan. They mention that there are 11 metrics that need to be met and that they have created a specific chapter in the plan to address each of the gaps or deficiencies identified by the commission. They also mention that they have engaged with staff and stakeholders to ensure compliance with policy requirements. Steve asks if they had tried to resolve the issue of co-location directly before making the filing, to which Calvin responds that it was a matter of public policy.

The speaker explains that they did not have a specific contract with Exelon, but rather intervened to understand the public policy implications of the situation. They are open to working with anyone on ratemaking issues and believe that policy guidance will benefit all PJM customers.

The speaker expresses their commitment to continuing dialogue and engagement with stakeholders, particularly customers, in order to provide strong solutions for large load customers while considering cost, affordability, and reliability. They mention that the PJM auction may result in double-digit increases in customer bills, and that they will use this as an opportunity to advocate for acceleration of transmission procurement in the region. They emphasize their focus on affordability and their proactive approach to finding solutions.

The speaker discusses plans for expanding current programs to help customers manage their bills and emphasizes the importance of policy in the energy transformation. They also mention their legislative priorities in Maryland, specifically in regards to Senate Bill 1 and the need for a public process with input from all stakeholders. The speaker stresses the importance of having a voice in the discussion to avoid having to react to issues that have already occurred.

During a conference call, Paul A. Zimbardo thanked the participants for keeping everyone engaged during the summer. Colette Honorable from FERC addressed a question about the ISA proceeding and stated that there are various options for addressing the issues raised. Anthony Crowdell from Mizuho asked about AEP's involvement in the filing, to which Colette responded that there is a timeline for responding and that they quickly responded because they want to be a leader in investment and affordability.

The speaker discusses the need for investment in response to customer demand, regardless of whether it is for co-location or not. They emphasize the importance of fair allocation of costs and mention that investments will focus on both transmission and distribution in Illinois, despite lower returns for distribution. The speaker also mentions the $1.05 cap on distribution reconciliation and the need to hook up new customers for the benefit of all. They thank the participants for their participation in the call.

The speaker expresses gratitude for the listeners' participation and invites them to ask questions and provide feedback. They thank the listeners for their interest in the company and conclude the call.

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