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DATE
Fri, Oct. 30, 2026
CALL PARTICIPANTS
- President and Chief Executive Officer – Calvin Butler
- Chief Financial Officer – Robert Kleczynski
- Vice President of Investor Relations – Ryan Brown
- Chief Executive Officer of PECO – Michael Innocenzo
- Finance and Strategy – Jeanne Jones
TAKEAWAYS
- Adjusted Operating Earnings — $0.87 per share, increasing from $0.86 per share in the prior year quarter due to approved rate increases and disciplined cost management.
- Full Year 2026 Guidance — $2.85 to $2.91 per share, narrowed from the previous range with management aiming to deliver at the midpoint or higher.
- Long-term Growth Target — 5% to 7% compounded annual adjusted operating earnings growth from 2025 to 2029, with management affirming expectations near the top end of that range.
- Capital Plan — $41.7 billion for the five-year period through 2029, focusing on reliability, resiliency, and grid modernization.
- Rate Base Growth — 7.9% projected through 2029, underpinned by a 16% growth rate in transmission investments.
- Incremental Transmission Opportunities — $12 billion to $17 billion in identified potential investment over the next decade beyond the existing base plan.
- Regulated Storage Potential — $3 billion to $7 billion, representing 1.5 to 3.5 gigawatts of potential utility-owned storage investment across various jurisdictions.
- Atlantic City Electric Battery Project — 500-megawatt installation in New Jersey, expected to provide $700 million in net customer benefits over its lifespan.
- Load Growth Pipeline — 11 gigawatts of high-probability load growth identified through 2034, with approximately 10% expected to come online by 2028.
- Grid Reliability Performance — 6.6 million customer outages prevented by grid investments during 31 significant weather events year-to-date.
- Equity Financing Plan — $3.4 billion through 2029, with 30% already priced and $850 million in 2026 needs expected to settle by Dec. 15, 2026.
- Debt Management — 100% of planned 2026 debt financing completed, mitigating exposure to interest rate volatility for the remainder of the year.
- Credit Metrics — 14% average funds from operations to debt through 2029, which is approximately 200 basis points above the Moody’s downgrade threshold.
- Pepco Maryland Rate Case — $50.9 million annual revenue requirement increase approved in August, based on a 9.4% return on equity and 50.5% equity ratio.
- ComEd Reconciliation Settlement — $205 million delivery adjustment amount agreed upon with all parties, with a final order expected by Dec. 20, 2026.
- ComEd Grid Plan — $15.3 billion cost, which is expected to deliver more than three times its cost in customer benefits while supporting significant load growth.
- Affordability Metric — 19% lower customer rates compared to the largest U.S. cities, with bills as a percentage of median income at 20% below the national average.
- Storm Restoration — 94% of customers restored in less than 48 hours following extreme weather events including 57 confirmed tornadoes and two derechos.
- ComEd Adjusted Operating Earnings — $412 million, rising from $373 million year over year due to higher rate base and incremental investments.
- PHI Adjusted Operating Earnings — $320 million, up from $290 million year over year reflecting updated distribution rates and investment recovery.
- BGE Adjusted Operating Earnings — $119 million, increasing from $82 million year over year driven by approved distribution rates and lower contracting costs.
- PECO Adjusted Operating Earnings — $167 million, decreasing from $250 million year over year primarily due to higher storm and contracting costs.
- Transmission Security Agreements — 23 gigawatts of load currently in cluster studies, with management utilizing agreements to protect existing customers from costs associated with speculative load.
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RISKS
- Butler stated, “The biggest challenge… for our customers’ face is in the supply, and candidly, our progress on regional solutions remains too slow,” regarding the impact of rising PJM-driven supply costs and regulatory delays.
- Honorable warned that PJM could face a capacity shortfall of approximately 11.5 gigawatts by 2030, which may impact regional resource adequacy and customer costs.
- Management noted that delaying needed grid investments would lead to more outages, greater disruption, and higher costs in the future for customers and communities.
SUMMARY
Exelon Corporation (EXC +0.55%) reported adjusted operating earnings of $0.87 per share for the third quarter of 2026, surpassing management’s internal expectations and leading to a narrowed full-year guidance range. The company highlighted its commitment to a $41.7 billion five-year capital plan focused on grid reliability and resilience, which has already prevented millions of customer outages during a severe storm season. Management confirmed that the utility’s rates remain significantly below the national average despite rising regional supply costs beyond their direct control. Strategic initiatives are moving toward addressing these supply challenges through incremental investments in regulated battery storage and transmission infrastructure, which offer substantial upside potential to the existing growth plan. The corporation remains focused on maintaining a strong investment-grade balance sheet while executing a balanced financing strategy to support nearly 8% rate base growth through 2029.
- Management reported that organizational changes made in August were intended to increase accountability, accelerate decision-making, and improve capital execution by aligning utility leadership more directly with the CEO.
- Butler noted that the company is advancing practical energy solutions at the state level, stating, “we’re not waiting for a single regional solution,” following delays in PJM’s reliability backstop auctions.
- Kleczynski indicated that the company’s pre-issuance hedging strategy has limited the earnings impact of a 50 basis point increase in interest rates to approximately $0.01 per share.
- The company identified 11 gigawatts of high-probability load growth, which management is managing through Transmission Security Agreements to ensure developers cover necessary infrastructure costs rather than existing ratepayers.
- Colette Honorable stated that the company continues to support a regional price cap for capacity auctions until better processes are established to reduce costs for consumers.
INDUSTRY GLOSSARY
- AFUDC: Allowance for Funds Used During Construction, an accounting component that represents the cost of capital used to finance utility construction projects before they enter rate base.
- BPU: Board of Public Utilities, the state-level regulatory body in New Jersey responsible for overseeing utility rates and services.
- CEJA: Climate and Equitable Jobs Act
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
