EXELON CORP Q3 FY2024 earnings call

• Performance: Reported solid quarter of earnings and operational performance, with GAAP earnings of $0.70 per share and operating earnings of $0.71 per share above second quarter expectations. Top quartile or better outage performance despite significant storm activity in July.
• Regulatory progress: ComEd received proposed order and refiled multiyear rate plan; PECO reached settlements with key parties; Pepco DC anticipates order by end of year; Maryland initiated lessons learned proceeding on multiyear plans.
• Operating highlights: All 4 utility operating companies in top quartile for safety; ComEd and Pepco Holdings in top decile for outage frequency and duration; BGE and Pepco Holdings showing improved customer satisfaction; Delmarva Power's transmission project to modernize grid and save customers money.

For the third quarter of 2024, Exelon earned $0.71 per share compared to $0.67 per share in the third quarter of 2023. Earnings were higher due to timing at ComEd on distribution earnings. After removing ComEd's timing, there was $0.03 higher distribution and transmission rates net of depreciation, offset by $0.03 higher interest expense. Year-to-date performance shows ability to deliver strong results despite weather and storm activity. The fourth quarter guidance assumes reversal of distribution earnings timing, fair outcomes for rate cases, and normal weather/storm activity, with a target of achieving operating earnings of $2.40 to $2.50 per share. Long-term annualized operating earnings per share guidance range is 5% to 7% through 2027 with expectation of midpoint or better.

• Fourth quarter guidance: Assumes reversal of common distribution earnings timing, fair and reasonable outcomes for rate cases, and normal weather and storm activity, aiming for operating earnings of $2.40 to $2.50 per share.
• Long-term guidance: Reaffirms annualized operating earnings per share guidance range of 5% to 7% through 2027 with expectation to be at the midpoint or better of that growth range.

• Rate case outcomes: Uncertainty regarding final orders for ComEd, PECO, and Pepco DC, which could impact rate base and investment plans.
• Weather-related risks: Severe weather events throughout the year, such as storms and hurricanes, pose challenges to reliability and operational costs.

Q: Nick Campanella from Barclays asked if the midpoint or above for 2024 is still the case.

A: Jeanne Jones responded that they aim for midpoint or better over the long-term and that for the current year, it continues to be the goal.

Q: Julien Dumoulin-Smith from Jefferies LLC asked about the transmission backdrop and how it fits against the stated $9.7 billion.

A: Jeanne Jones mentioned themes like modernizing grid against volatile weather, changing generation mix with retirements and new generation, and new load like data centers, indicating continued need for more transmission investment.

Q: Shar Pourreza from Guggenheim Partners asked about the 205 filings and the pathway forward.

A: Calvin Butler explained that the filings were to seek clarity from FERC regarding the tariff treatment of network load, with a goal of getting guidance by early December.

Q: Steve Fleishman from Wolfe asked about the governors' positions on the issue and what happens once an outcome is reached.

A: Calvin Butler stated that governors are concerned about reliability, affordability, and economic development, and they are working to ensure everyone pays their fair share for utilizing the grid.

Q: Ross Fowler from Bank of America asked about the interplay of reliability between FERC and PJM and details on the ISA filings.

A: Colette Honorable explained that FERC has jurisdiction over grid reliability, PJM oversees reliability in the region, and there are discussions on cost allocation, reliability, and rate design related to the ISA filings