Exelon(US:EXC)2023-05-03 17:45Financial Data and Key Metrics Changes - The company reported earnings of $0.67 per share on a GAAP basis and $0.70 per share on a non-GAAP basis for the first quarter, reflecting a year-over-year growth of $0.06 per share [53][62] - The company expects to deliver earnings within the guidance range of $2.30 to $2.42 per share for 2023, despite the impact of mild weather [70][80] - The company anticipates a return on equity (ROE) in the range of 9% to 10% by year-end [80] Business Line Data and Key Metrics Changes - Atlantic City Electric filed a distribution rate case seeking a revenue increase of $105 million, reflecting a 10.5% increase to support critical investments [42] - BGE's multi-year plan details nearly $2.3 billion annual investment in the electric grid and natural gas system, injecting nearly $36 billion into the local economy and supporting an estimated 72,000 jobs [44] - Pepco DC is requesting a $190.7 million revenue increase to enhance the reliability and security of the local energy grid [46] Market Data and Key Metrics Changes - The company has successfully raised $2.5 billion at the corporate level and approximately $2 billion for ComEd and PHI entities, completing over 80% of its planned 2023 long-term debt financing needs [25] - The company continues to see strong investor demand for its debt offerings, indicating a strong balance sheet and low-risk attributes [25] Company Strategy and Development Direction - The company is focused on building a stronger, smarter, and cleaner energy grid, engaging with stakeholders to align on shared goals [54][70] - The proposed grid modernization plan supports the goals of the Climate Equitable JOBS Act and aims for an orderly energy transition in Illinois [16] - The company is committed to maximizing customer value and ensuring equitable service delivery, as demonstrated by BGE's partnership with the City of Baltimore [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the engagement with the Treasury on the implementation of the corporate alternative minimum tax and its impact on energy infrastructure providers [24] - The company is well-positioned to participate in transmission opportunities arising from Maryland's offshore wind legislation [20] - Management emphasized the importance of transparency and collaboration with stakeholders to support the energy transformation [73] Other Important Information - The company has made substantial changes to its contracting, lobbying, and compliance operations to ensure integrity and ethical behavior following past legal issues [11] - The company is committed to a zero-tolerance safety culture and has implemented targeted training to improve safety performance across its utilities [75] Q&A Session Summary Question: Discussion on O&M savings drivers and segments for offsets - Management highlighted a combination of levers, including favorable depreciation at Pepco and a penny of favorability from the carbon mitigation credit deposit rate [84][94] Question: Quantification of Infrastructure and JOBS Act opportunities - Management noted that the IIJA and IRA create significant opportunities for Exelon utilities to partner with jurisdictions and drive energy transition faster [90][116] Question: Initial dialogue with new chair in Illinois - Management confirmed ongoing engagement with stakeholders and expressed confidence in moving the state's goals forward despite leadership transitions [127] Question: Reconciliation processes for ComEd and BGE - Management indicated that the reconciliation for ComEd is straightforward due to its long-standing formula rate process, while BGE's reconciliation will set a precedent for future recoveries [128]