Exelon Corp.
The leaders of Exelon are forecasting the company's rate base will grow by more than 8% annually from 2021 to 2025.

Exelon Lifts Capex Outlook for Coming Years

Jan. 11, 2022
The parent of ComEd and PECO, among others, is preparing to split off its competitive energy business.

The leaders of Exelon Corp. have ratcheted up their transmission and distribution capital spending forecasts for the next few years ahead of the company’s split into utility and competitive retail energy/generation companies.

Speaking to investors and analysts Jan. 10, Exelon President and CEO Chris Crane and his top lieutenants outlined their vision for Chicago-based Exelon, the parent of ComEd in Illinois and PECO in the Philadelphia region, among others. Today’s Exelon is scheduled to separate into the T&D-only business (which will keep the Exelon brand) and the clean energy-focused generation business that will go by Constellation Energy Corp. The former, Crane and his team said, will be able to grow its rate base to $65 billion by 2025  an average growth rate of 8.1% from last year, which is slightly faster than previous forecasts. That growth is expected to power earnings and dividend increases of between 6% and 8% annually while retaining the company’s debt ratings.

Helping fuel that growth will be capital investments of $29 billion over the next four years, an increase of $2 billion from the 2021-2024 forecast the Exelon team projected last fall. Those investments are scheduled to grow steadily from $6.9 billion this year to $7.5 billion in 2025. In each year, electric distribution is slated for the lion’s share of capex dollars – between $4.5 billion and $4.9 billion – with transmission work in line for $1.5 billion to $1.7 billion annually and gas delivery and other projects having between $875 million and $975 million allocated to them.

CFO Joe Nigro and COO and COO Calvin Butler on Jan. 10 detailed some of the plans, which analysts noted break somewhat from their peers’ because they grow steadily into the middle of the decade rather than leveling off after an initial ramp. In response, the executives noted two main points: Because the new Exelon won’t own any generating assets, its investments are going to be sharply focused on hardening its system – through electrification, resiliency and cyber and physical security – and won’t be dominated by a handful of massive works. Nigro noted the largest single project accounts for a mere 1.1% of the $29 billion total.

“We’re not just plugging in numbers on the back end,” Nigro said about the plans for the later years in the timespan in question. “We have designated projects where we know where that investment is going.”

The projected spending breakdown by the company’s utility subsidiaries is as follows:

  • ComEd: About $10.3 billion from 2022 through 2025, up from the previously projected $9.7 billion for 2021-2024
  • PECO: $5.8 billion, up from about $5.2 billion that had been in the works for 2021 through 2024
  • BGE, which has about 1.3 million electric customers in Baltimore and other parts of Maryland: $5.3 billion versus $4.9 billion
  • Pepco, which serves Washington, D.C., and parts of Maryland: $3.7 billion, which is down about $150 million from the comparable 2021-2024 number
  • Delmarva Power, which has about 500,000 electric customers in Delaware and Maryland: $2 billion versus $1.7 billion
  • Atlantic City Energy in New Jersey: $1.9 billion versus $1.45 billion

Shares of Excelon (Ticker: EXC) rose slightly Jan. 10 to close at $65.82. They have climbed about 25% over the past six months, growing the company’s market capitalization to more than $55 billion.

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