Exelon (EXC) 4 Aug 202020 Q2 Earnings call transcript

Hello, and welcome to Exelon's Second Quarter Earnings Call. My name is Nora and I will be your events specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded.

During the presentation, we will have a question-and-answer session. now Eggers, to Corporate Senior is over today's Finance. It Dan to Vice Instructions] my turn pleasure program [Operator President of Sir, yours. is the floor

will the Thank Executive the non-GAAP during the to following presentation They're measures. expectations. uncertainties. members call nearest and earnings our section I'll you and for our contained and issued and Chris from Today's statements uncertainties available between statements are your for be the X-K our today's Actual of Chris Financial this and our this of which includes Exelon's the The based and in and release from be discussed are made quarter the assumptions comments and morning, Officer. pandemic of SEC also and to today's over President COVID-XX factors joined found that turn Please including the may earnings the CEO. impacts measures. material GAAP management's refer non-GAAP release various Please Crane, earnings Joe references today you, of and Nigro, forward-looking operating estimates differ other questions filings Exelon's Exelon's to management the risks other discuss that and Exelon's and refer forecasts can our Chief risk now of presentation results Chief XXXX projections, with differ to call. presentation, to call, Leading other prepared joining our team and and answer Exelon's appendix remarks. adjusted equivalent other call on today's results release contain factors, factors second which in to earnings measures thank call. could conference Relations of reconciliations Crane, Nora. discussions We surrounding Good during morning cause information Officer; by matters, who for earnings to along forward-looking senior Investor everyone, subject website. in the Exelon's other both we

everybody on on Dan into $X.XX had Thanks Starting share; achieving we non-GAAP and -- great from this basis, $X.XX $X.XX guidance GAAP call planned. earned share. per the off, $X.XX outperforming earned it. GAAP basis seen we and morning, share the basis, our We spending range joining with a a our cost a than per will I releases savings to get this us. to Joe as appreciate due per earlier time quarter, you've morning of

out but we've we came how some excellent quarter. but assumptions expected, had confronted operations, serious load throughout Our also challenges have the

and reached ComEd U.S. in ComEd an agreement into -- deferred which Illinois, includes agreement ends and million, that the a office investigations a Attorney's payment First, three-year $XXX of with concludes prosecution Exelon.

address many our disappointed the identify taken We will have stakeholders misconduct, and happen understandably and the to past conduct. robust of We and in to values. new type to our ensure conduct enhancing know deficiencies, apologize the won't up These the did not including seriousness of compliance that it extremely this live governance we again. policies actions disappointment. past same prevent feel oversight for We're

but confidence will commitment step we not every task, be back to lost will you earn happen resolved others. to we that will our -- we have overnight take a This the get have it there. are formidable We have possible trust with and and

doing justice, addressing country and well. the Second, we and inequity are as racial so and the of issues is important social

variety discrimination. inclusion that base high predicting system back reentry cannot through running big injustice. our our facing organizations, we walls the management respect, the safe, and and our employees' to ensure and down our underserved communities our inequity, plans those issue. and -- focus that communities they the a living and more. injustice are diverse income we're remain the affected allow dealing diverse, emergency we're or by -- predict waiver, them. are our configuration of employees policies And our wide in on into equity, and fairness us response of COVID arrangement of confidence on milestones in impact clear to contingency when normal and keep safety ingrained providing our a supporting model programs by Matter, suppliers communities employees that our our deferred diverse that customers Switching since of volunteerism company. both philanthropic residential supporting Our customers and and to communities, the a matter, incorporate is communities operations. it a monitor COVID-XX at and larger know are through diverse action to continues pandemic-related serve. and diversity to to we payment job we Lives rate outside values and underserved That come pursuing and and unemployment key responsible plans and in low Sponsoring customers operations footprint, on do We've all workplace. the Black support our see in We doubled our impacted contractors employees, Focus we standing can up safety developing for of best-in-class are serve we we levels will and a our our all continued storm speaking and with for focus communities. all who that rapid and pursuing them We've and must making and values protect of customers communities, our critical implementing what that that created within ours, our have on economic and leadership of in development, of help our equity are means role are values work for focused

of were the storms On which the able We customers are territory. procedures to outage XXX for the during pandemic that. -- customers eight quarter [ph] capacity In region miles in quarter hours. per sustained were Utilities storm of mutual outage out been extreme X,XXX early with personnel in than response are more active averages. miles and its assistance was this Power XX renewable pandemic. now storm There's in employees hours, with in and Despite of the already customers five the restore decade of our operational hour the restore to and and XX drilled XX.X% our brought more performed season, to had XX.X%. XX over hour our and than for highlights. widespread -- storm most factor at eighth within winds onboarded the top in we they and -- of second was capture history, and those Safety a develop its appealing XX% the prepared XX% across Nuclear safely office protecting techniques match faced the duration an schedule new remotely. continue were ahead frequency. dispatch completed year, rolls safely XX.X%. PECO and we the Operations for but June, had were damage and contractors. best -- XX gusts per the while rate onboard for of pandemic electronically, and on-site all quartile contractors and are which PECO largest storm strong we Within in storm hour. conditions back beginning,

very performance. very, overall, So, operational strong

efforts XX.X Exelon We the report continue In our also we the XXXX than as the megawatt once air harmful Corporate their vehicle a we goal the million on and the and found investor-owned and carbon. customers times the important communities. by enough avoid These community clean committed affordable XXXX. not deliver rate Report XX,XXX exist save to electrify largest to XXXX XXXX, tons power are two in our avoiding Sustainability they to the helping lowest there XX efficiency in from top our power that helped economy, nearly stewardship. environmental hours XXXX, again X.X less programs reduce accomplishments zero metric transition of emissions that fleet generation. a but carbon released the to July, emissions of We're climate and of set crisis. emissions number energy to our to utility to customers shows are focus -- carbon-free Exelon Benchmarking that address metric emission five of carbon than producer XX% producers, by more energy tons In XX% million XXXX of made. producer Utilities

We levels address continue state to and the advocate challenges. for policies the that federal at will

update. over call Now, Joe I'm financial turn to the the to for going

Thank you, and our the results, quarterly cover everyone. our and at updates, XX-month Chris Today, our will trailing Utilities, second I ROEs financial quarter including disclosures. good hedge morning

delivered lower Utilities where to costs, which lower basis, expectations, a expenses. $X.XX $X.XX on in $X.XX by was costs to storm nine, by and budgeted. share. of we was a savings $X.XX $X.XX and O&M we originally of non-GAAP saw relative driven travel range exceeded holding outage earning on earned Utility area, for labor These driven entertainment, were share The we savings Turning share per outperformed record-setting than which share which $X.XX and and to higher the to cost, upside per the being by our slide rate per partially realized sooner for lower largely a targeted timing, coming Exelon ComEd well. timing GAAP were share. combined lower by XXXX formula $X.XX training offset net share basis Philadelphia guidance as per O&M, company per ExGen expectations modestly for the largely per cost quarter, PECO. second earnings

savings to the you work second been organization call, some expected COVID-XX, anticipated, more quarter in impacts results. see coming and last weighted we On be year. on savings to half can across of back this track which hard help earlier these the than The -- as organization has we the is of to with XXXX, in at achieve $XXX announced our would the million introduced offset we of

with quarter, During expectations. our and Utility line the in Constellation load the at was

income with costs year, earnings $X.XX and and by O&M PECO, on up timing, storm offset This revenue, the by COVID-XX primarily per of in expense. load this at per affirming walk. and XXXX. The from For of the second $X.XX quarter to of per year $X.XX quarter, earnings quarter down last we of earnings of in $X.XX share. full with show slide our Exelon we PECO. $X.XX third primarily bad impacts at driven quarter-over-quarter was was ComEd favorable share benefiting by less debt year decrease was last share $X.XX and higher we share, the partially are compared weather rate our and XX, share partially compared $X.XX formula bad offset lower debt The $X.XX than second share taxes. capacity expense, earnings to were per year. PJM, Holdco On lower lower were Utilities per per ExGen's guidance expect

slide XX, for lower XX of result ROE dipped a as the treasury by PECO from to returns our which The second our Turning last Utility at trailing the storm bad quarter. PHI, Earned of storm, basis, ROEs XX% primarily but X% basis yields, a we the decline impacted range, earnings with higher consolidated in a quarter ComEd's target remain consolidated and on debt XX-month at looking PECO was at and X%, June above to remained declining Utilities driven X.X% points. by --- as ROE.

quarter PECO's the our next calculation assumed. of are expect is poor off as on this pre-COVID-XX ROEs see of the couple to as so as impact These headwinds full financial first better you so impact in ComEd. earnings the on well already we guidance, and captured about second should year the carry roll burdens have reminder, a should pressure treasuries weather of you backward as quarters, quarter some we lower storms quarters the think As and looking,

future, Looking returns on targets. supporting delivering our we further and into the the remain earned stronger focused Utilities growth at

there on slide were the the regulatory developments to XX, I front. Turning call, last important since some

regulators jurisdictions all recovery mechanisms. have approved our in First, COVID-XX

at recovery, benefit XXXX increased infrastructure as Maryland The relief Maryland has customer maintain BGE and will Second, in investment $XX investments energy February. will least on filing than service XXXX our the support from invest the for investments BGE customer more to after businesses. BGE expected safety, In will economic fund BGE have over and first resiliency sector reliability multiyear gas assist to and getting in PSC a income assistance and was XXXX with economic to which the with capital and approach to system. communities to recovery. billion of infrastructure relief a recovery. plan BGE economic the will environmental plan The than provide the security, key a small and XXXX and planned in jobs XX,XXX XXXX billion be the support the and late file to distribution grid manage impact the this conjunction improve the $X reliability, Maryland's to customers' designed critical well to from is component utility an critical customer electric filing, made as in light through multiyear limited period, to attributes more and three-year green experience. enhancements customers for is of pandemic

We expect this an order December.

Third, their pandemic filed customer would proposal to and enhanced these to hit, in addressing The pandemic. the that including The with residential plan flexibility been impacts plan of adjustments the the Pepco provides of series challenges. in expand plan the have offer June, a establish the in response structure ability and multiyear those enhanced businesses, customers. targeting of PSC, hardest multiyear current programs, our small COVID-XX and innovative D.C. non-profits, economic Pepco the

We expected decided third update December decrease the This has requests Law distribution this and the year-end. keeping XX last a were decade in Fourth, in ComEd's the place, ComEd's they final of investments recommended case. a while rate rates year and a proposed received that grid's the the its Utility filing be in formula filing resiliency, improved in row delivery year. been in Since growth bills to million The Public for distribution than by reliability, approved clean by finally, years. rate formula order order by order rate an annual electric revenues. increase expect for an have Judge the lower And modernizing nearly fifth reduction in in month, ago. commission Maryland annual XX%, $XX.X and Maryland Delmarva a is energy reliability

strong increased the to can the XX recognition customer on basis XX through it Importantly, and reliability satisfaction. of order on appendix. the details performance X.X%. allowed rate We of and Delmarva's ROE believe XX be points found More is slides cases by

Year-to-date, continuing Turning program performance Jersey and and the to during are in resiliency the and Despite our infrastructure these our that are our quarter. $X.X we investing some have for customers increasing early we track will bring $X.X of the deployment projects invested capital will benefit all we our slide two improving billion customers. from at robust year. capital our for XX, challenges and of into second Utilities, billion Utilities, are of the reliability I efforts pandemic, Today, discuss on of improved to part New Pennsylvania. the

Jersey is $XX the the rebuild The Moss a first transmission project Atlantic in Atlantic - is lines City upgrades Farm transmission which XX line portion New project to different line project of runs poles. This entire critical XX of a Electric Moss transmission that three through City and million Mills miles territory spanning counties. rebuild, kV Northeastern

Additionally, a will incremental substation, the with Substation Chestnut retired flexibility. and allowing for Neck be replaced modernized mobile-ready

old the gross including construction margin and modernized and transmission enable slide substation substation and Overbrook is existing XX-year and hospitals we XXX,XXX and with feeders replacement This of upland kV solar includes provided project improves an PECO local XX, current kV Bala that universities. the diverse construction, West project to customers at second provide a will lines million The companies our solutions. serves XX,XXX customers infrastructure in It generation areas, XX with new XXX strategy implement hours. approximately Philadelphia. into implementation and The engaged in extension to energy project project $XX project hedging PECO's participate On which of substation also Philadelphia. new update company.

quarter. XXXX, of power in open gross is open the to Turning our prices XXXX margin and no $XXX to XXXX, quarter, by or due margin was new increased of gross business This flat business. and by last consistent margin $XX executed we million million new increasing in XXXX new first the In with total executed We to plan. business is million since our considering million $XX most regions. there across new non-power In offset power new change business. the non-power table, gross from remain revenues of In incremental on a and power ratable uncleared our brief to behind program load date in New slide XX, to when we've X% XXXX, capacity hedges. commodity and million executed Constellation's seen hedges slightly the and update auctions. X% PJM cross York give XXXX of capacity business $XX business performance. and on by On We lower hedging what I'll we in $XXX

expectations. XX% down During range, Load the was X% week. second with customer quarter, our week line our industrial commercial load to was projected it although to varied from in within and

is remainder Our load for the unchanged. the year forecast of

COVID-XX, to on continue we they customers handle more As as the which specific impacts better getting information, are evolve. impacts to us behaving and regions, from respect is industries are with a get how COVID-XX helping monitor to we

load large understand and their we working outlook. Additionally, with customers to better are our impacts

retention emerging being we and business their We their and navigate their evolve landscape, customers an our loads, stability also real-time, sustainability This focus in goals. as the electrification to our for manage margins. tools our insights reaching most and to analytics Even to and on optimize by customers success as provides energy businesses, and work trends strategic current high our our and providing ever-changing impacts on with remains rates while proactive consistent to providing via with clean products. and partnership is environmental partners such key

credit strong Moving on to committed are to balance slide sheet we XX, maintaining investment-grade and ratings. a

with to in COVID-XX consolidated This from quarter. XX% projected the discussed debt as quarter. is pressures Our be last to XXXX, consistent FFO for reflects last detail

X.X of are our target of times. debt-to-EBITDA at Looking we ExGen, ahead

X.X For when times we and expect be to nonrecourse excluding times X.X XXXX, at debt.

and issuer downgrade S&P ratings July, took rating ComEd's front, Fitch rating. the our credit action affirmed On in to

ComEd, the borrowing. ComEd, S&P ratings anticipated to Pepco stable. impacting Corporate, Exelon secured reaffirmed However, negative at PECO, cost our outlook Furthermore, and ExGen the therefore, ratings changed not for and senior from S&P short-term of Holdings,

balance While we ratings. remain credit disappointed to these sheet we and in committed a strong investment-grade were actions, maintaining

rates of short-term successfully to long-term liquidity, year. now call leaving oversubscribed, year. Utilities. in low you. The his record-setting Chris for all XXXX advantage market executed planned the ample plan was secured balance us of financing to second meaningfully the provide conditions for attractive for of all have quarter our the we accelerated take the well interest Thank back I'll were significantly turn We debt financings The positioned and the the issuances remarks. closing and at

and comprehensive the Joe thanks report. Thanks for

slide which is Exelon's our Finally, I'll unchanged. on on X.X% EPS value XX, focused growth XXXX. rate base We're targeting to close through a proposition, turning X% growth growing utilities, to X% and

We will growth, done utility have some from of and cash Genco as use the pay debt support external the free down dividend. Genco flow to we support the

avenue. We the fleet, emitting of closing compensation the value zero the their by Constellation for and our maximizing fair uneconomic seeking through continue value plants assets to optimize generation and monetizing business Gen

We strong investment-grade will metrics. credit sustain

We underpinning we our for and have grow will our point proposition remained effective committed benefits can stakeholders. this of at Thank this now dividend providing strategic to Operator, right for the through not value we'll over at XXXX. X% annually in is And call you. tangible questions. The that waiver. sound, now turn

first of comes [Operator Shar Guggenheim Pourreza question of line Your Instructions] Partners. the from

open. line Your is

Hey guys. good morning

Good morning.

Good morning.

here. questions two Just

some CENG of issue scenarios, of higher buyout, like perspective, the months, potential of the require financing, you as on would maybe sizable the you envision any next the First, about minimal moving uncollectibles, kind growth the in equity? to potentially have headroom Joe, to do we maybe think a Utilities, that credit obviously, from sort pieces, of XX organic sort currently of

And over last you question. thank you as Yes. this times many for know, question received we've the Shar, months. few the

funding business rating, tenant the my and rigorous prepared time. quite in of there we most has in month, through process, a FRR you our planning under been obviously, And said will kicked take capital there's our a as O&M issuance We that our into long will plan. on our what go year forecast, quarter think off frankly power, plan the very it plan, equity that many the very remarks, of still you into committed I imagine, is we're have and our investment-grade rates, a when the prices market to for to and a results it's for central there, that and for variables out are, us projections, that about recent end call our go we plans strategy Last next can As and that strong be debt. each through process account. we this process obviously, And load disclose Shar, process, taken no fourth year. treasury that that

those we've I all would sheet our strong take successful we flow in ExGen been our been the -- do and help is that. plan. our isolation. of the for They We've together of obviously what variables with work in one don't say to any create growing Utilities, So, harvesting basis to cash and balance

successful But current quarter communicate cost levers there equity through alternative we relay also over for cuttings and takes at the our the on and the process that in assets. we'll is the is our years, We year, have, last that We've call. on plan, as through outcome with of move equity. or us need end some right? of the fourth list obviously. look We that pretty look planning no financing at we our arrangements. been thing the sold We've And last five the

and on then, rating seeing any confident mean, obviously Great. few you structures. simplify their their strategic strategy. you I transaction would the just seen be what eventually valuation would Genco requirements, de-risk, IG in the disconnect, Genco can we've felt incremental could spun eventually players alleviate With give you a on we're the on kind without portfolio its long-term? you could fossil obviously own weren't the the own scale. for do sufficient IPPs Chris, corporate? to out some the have if without going others the the merchant concerns us business a within the at refreshed from that I as as support balance over IG, now on fleet guess of which own fit mean alleviate -- with thoughts sheet looking liquidity I past, it like And a question business a stand ExGen in certainly looking confidence they and

So, the talking thinking strategic past, say, entire or fuel changed the whether let's has fleet kind your of XX fossil simply assets, we're about the over months?

we we basis, -- So, deep at do together dive of on the two and look benefits regular what a companies a strategic of two it are versus that alternatives. bolted or the something review the the is bolted lines keeping

period We us cash time have enjoyed from have a Utilities of of to the flow of time customers free for the a of the period a our benefit Genco allowed the that has into investment last over since review. significant

own As the work decided they And imagine, with to have of the be that go. right look on of the announcements recent other there's from side and it's on maintained the you either to support growth understand its to I stand we of to value where other that the two the basis done to the continue of always But create can companies a certainty at. to company question would business. the or allow cash the now, flows something be

a trying in New in we're of there's strategy on We're so the I And know on work in in York. Illinois. firm work Jersey. New middle to ground through going legislative

what on the Maryland to have to legislatively for in assets what's be of there compensate and can look and going their We done value at assets low carbon the output. the

and be thing tell to improve the to assess for on better will to further that with to through separation serve assets review value not And can coming And we ourselves, you something we holding IPPs assets we having good more The and investment-grade we'll very continue. strength they do been And balance is strong there's have we if it's as and New somebody think think that to commodity some and -- else's stressed sheets being will that to of we see other the weight. annual that well-paying the cyclicality from we aren't the review able propose we that and we annual it's have good, shut structure bolted down to on and we of own involved type have assets communities along and it regulation. value So, understanding There it's can corporate sheet. the or look projected the we with states But the like a see. balance further a non-nuclear do beginning. company we together the something clear stay at, to the serve continue value one jobs, see then all assets, an all perform There's stakeholders portfolio entities. England carrying could we'll is of in that. for period of I others than a their have are could those that ISO's time under in that assets better monetize assets finite see the

evaluate optimizing balance what to a reduction focus nonnuclear that continue strong sheet with and our have the on business balance our constant we on we'll is flux so there in And sheet. debt

on and year. Terrific. Appreciate Thanks congrats and Chris and good Joe tough it. results

Thanks.

Research. of the from line comes Wolfe question Steven next Your Fleishman of

open. is line Your

Yes, hi. Thanks.

Hey Steve.

energy views then maybe Could would seeing guess, kind also the implications deferred if of you're Hey Chris. The just of future be on there the and And fine. rate-making clean helpful. [ph] any? addressing agreement that Illinois, thought for law ComEd and structure. give I on you Any --

here jump of He's to going I'm us the let the in question. in half Sure. on the second with Joe room. Dominguez

eroded. issue half affect the obvious been an it has of trust first legislation market. the for does on changing the capacity There's Exelon question, drive that Generation's The

all ComEd, effect it's Although entities. on has it to isolated the

been And rightfully and so. a reporting lot so is and press there's there's of been some stakeholders disappointed

a that the trustworthiness beneficial those totally that made cover and we is been can super done outreach us and trust the of have we're that to Joe will to show show structure rate commitment of It of that of has have to job the we ComEd compromise our what investments the to our conversation is serve make ethical our consumer. a doesn't there's that for And period sure in the integrity us. job, so have behavior at continue this, where forward. But to fantastic rebuild and and some we been or going going time just done

So, It's to it very we're to engage a for get stakeholders on capacity critical us done. market working still with redesign.

As you from know, PJM are nuclear to going not some folks in be up a the is units And our picked an the analytic going sense to of run that there's strong -- that auction. auction.

sad this shut path find can't at Some has are we down, or our And now uneconomic them a to to to and may been you become some profitability, way more affect point uneconomic. which of always and commitment the the the have right communities we'll if affect the on from. jobs reduction, that benefit critical paying, plants state's events those that it around very communities high turn goals is severely a will will carbon

but it thing. what a We unfortunate of that defined had code for So, -- the We conduct behaviors, clearly on. wasn't but apologize an went it's enough.

And through that also to committed thing trust. it ensure is to only our place folks, tell this the happen the doing to And philanthropic right that for is legislative I you we have serve, not stakeholders not volunteerism. again. can and that so stakeholders, and we One will but to only our other rebuild we we've put activities, customers controls communities communities serve never company elected with work the in and but thing

look good we're as to only that. we're serve. can and you out we we corporate all and the that there, think And the serve, know communities I company partner in a continue we're the as as going at us that communities strongest we probably

been because have undetected. to gone back as happen, high you amount to because still not should to. say, we've than rates decisions lower remain small of the it's of been But consumers said, making of most protected, years heard what And we just have that XX done, confident with and thing that's And have of trust. we is that served. not time, because and the This So, shouldn't got individuals get did it's me ago. have a we it that unfortunate reliability

on talk his body what affordable, focused and reliable, have a regulations about rates because strong making same on, we're that let focused And are Joe on is energy. we so thing process. that's clean regulatory that, With regulatory a -- that's thoughts I'll the

Chris. Thanks

covered The I to XXXX. think folks continues end of just through -- on it, Steve, the I the the level for set rate a of think formula lot call. Chris

a -- some of rate formula what with looks future it's transparency like, or continuation we'll to additional see additional to have return time So, the making. the traditional a we whether

As formula both to we talked benefits about, Joe and enormous think the Chris has our customers. provided

If for certain you see you the almost a that page at understates deck, on in all sense, take a and look ComEd. key at the you ComEd. metrics, see But performance green the seven

best-performing decile all We of those in dimensions. history not ComEd, had of at ever quartile we all year we're those are top last year top actually only And dimensions, the in the in and the the year SAIFI of CAIDI. at company, in last year. at XX% we best-performing July, And than are look over metrics the XXX close as XX% years I in better tracking better

Power's number been. still were We the highest we've proud at objective. the months of a to performance. achieved never satisfaction Midwest and that but had is ever XXXX. of team the So, at got J.D. X end it's of We very number ComEd go, utility very, operational Customer

for every by ComEd best operational country. and Exelon at the And you reasons. focus Chris transformation occurred it's to One, that's from says we call, this political perhaps ComEd, as claim because and tell at lay So, we on in And the can here. I that of regulatory outcomes that good two an and think we perspective, being virtually been second, -- recognized performance that think always the performance. good having operational driven I

or rate clear we're like think it's And what going return formula from energy a Illinois. there's going to new tied the least policy to the that devices. governor's was the of confident whether making, see and transformation ComEd objective, that's looks the seen, I renewal we'll the forward. extent constructive. at that that is I the is perspective, one other that a related from that it's methodology an we formula we in But team there whether traditional lot at got perspective, Steve, been up reason continue clean evolution guess to entire in goals. to with new the or tied from my comments be in office to believes have his recently meters the installed, So, that, that's we've be and a smart in a And that's From occurred, that's to investments to

test now the constructive. has uses been a used we've state forward-looking As decoupled in have Illinois the for state. been evolved. as and That's The policy utilities years ratemaking that. gas formula, We're

point guess debt much and now have biggest bad and operational to XXXX is formula. transparent to in and would the XXXX We better. strong other when went performance first I the rider that we the mechanisms difference that is and are between But better than we I so were

regulatory you take a and were in that's then the today, performance thesis the certain XXXX driven in by sense, operational If outcomes at poor story. operational different we a ComEd performance were seeing drives results, that

has terms point our a only whether in it's is of programs reliability, underground the and is had keeping be wildly customer final -- the making formula successful and that those in an been the system. history all in system we've including and making, commission so rate of resilient years. What low. Not eight-year change, make seen eight face that rate we'd cables making poles energy, now would bills stuff that have of and across investments integrating the continuing, more for of the devices in I traditional And improving clean doing climate or smart

about it's ComEd a the at average Joe And than story said, our XX ago. in and that's big power Chris But prices. was As -- measure, it I today or energy about organization. part, efficiency in think bill is this, of lower said the overall years efficiency wholesale

the I whether going formula make going we're I in Steve. think good constructive. in of is alignment forward, we're this, punchline terms investments investments or we've of the and making to me not, results those We're got to continue system. to going prudent think So, Regardless the are in for the be

much. very you Thank Great.

comes Your Bank America. of of Julien Dumoulin-Smith next from question

Your is open. line

Hey the good Thanks for time. morning.

joining. good Hey Thanks for morning.

to you to a And you forth, would at an clarify maybe specifically not about Joe Can I you. mean public? context to some event response, want if extended, then provide in you the speak arrangement? that in question, make you obviously, have but just franchise back I the up can. as time, of sure can. on in process, pick which or go just the we're be we the least to ratemaking which relationship off I that you Listen, same just the rates that available the you in those last again, where the In that's Joe. question just last left it and if can you Thank terms perhaps mechanisms the Utility back the benefit bending are formula alluded explicit well. would conceivable contract in you to to traditional to, at would and a

is Yes, okay it Chris that's right. go? I if

please. go, Yes,

sure. Yes,

question forward-looking let the answer quarter traditional if a a return of the last would Julien, likely Yes, short we So case intend file asked to first. rate rate that case me you in and we year, to rate filed that would XXXX. test using be first making,

So, that's number one.

that is Council that they indicated need from her had meeting COVID. around I ethics that every although And moving with In other we're so deal And and before last got the The going is things the the good conversation then the with the process on ethics embrace agreement. appropriately. that we've input from the been agreement, to franchise progress, we've to we agreement. interrupted Mayor we're the perspective, week, just assuring compliance office been having We're the continue two with city reforms franchise have office. also terms reporting about the One understand bit a ones with Then The big my so the week happen hearing a the we measures City and mechanisms. we could forward appropriate where implementing agenda, that a Mayor's the Mayor's making periodically those things from some thought, we've and that through DPA. the of city with city agenda. we perspective, taken that that requirements are ethics and we're and to has a franchise have

hiring piece. has the we've of us with which comes is -- Glockner, talked important Dave about impeccable Dave an quite before, an Here, reputation. to

office, in Attorney's the need a piece of unbelievable terms The came have the have the to efficiency, strategy office equitable the sustainability, sweet Dave electrification, affordable of of colleague around for as sponsor. for energy we a our need to of adopted. new office Chief within served in to Dave's, to Mayor years. transparent the that's of energy to goals city an providing point. also reputation goals updates one many energy, most Mayor we've As adherence and Criminal programs of out has through for mechanism who of the regular of the indicated Illinois, the jobs for many of city. that That's XX quite we in he of the work kind customers has the and that's U.S. of folks as at Northern but like important we it. to clean the be that you see And protocols ensuring all spot this, around committed But don't we And know, the community. an But Attorney's that U.S. serving outside of Division you the folks importantly, that

few is to $X here this feasible. in big $X a be and billion the And Chicago. agreement a the franchise that, that, on to is negotiations relating We've So, last There's would Reynolds, -- the At conversation being out will tangential he with the for there's takeover be cost for feasibility of be One a on leading then it's possibility the of or that. billion. the that not we separation spoken week another city that. of indicated a his issue indicated testimony the good look city's that municipalization municipalization. in forward ComEd, billion Commissioner shortly on issue to that the least grid view $X a call. that city reasons who at and about would the have study the would would that system hearing testified previously the that

indicated, simply And programs, about benefits have lease talked don't rolls on continued, that this jobs it around we talked programs necessarily it this municipalization. pathway. So, I think customers' that's as the our sense on works, take I we there. But more Commissioner But together to to I've the comes the then out to the electrification, of in imagine continue going clean hash backdrop year-to-year tie city out. I call, do assure over we'll few I'm and renews to if affordability. be well. It have terms. conversation our automatically year feasibility the way we'll study here. a these a need of We'll We Reynolds is a this confident about. just issues to But if it the think It's get energy, not reforms city. indicated where previously will of franchise a about Reynolds as a to agreement has have year-to-year. with that or something own Commissioner work may like That's I've its

So, that's agreement. but wanted you more to Julien, hear, the probably franchise that's on than whole the story

Thank guys. Excellent there. it you. leave I'll

Stephen of Stanley. Morgan Byrd from Our next comes question

line Your is open.

Hi, morning. good

doing? you Hey Stephen, how are

a on Congrats Good. good quarter.

and you hitting takes weak had plan, full Shar's as process? to demand. level, which And just include of as follow-up a just puts variety the your in the guess, was think it, planning things response did credit you're on question high I what outlook. stats the through, that the of last for terms major takes you that of the credit as kind see the the in bigger one just response. your last example, credit about through about, temporarily as was you since and stats. you kind the just I thinking you I Constellation end that the a want puts had question, think on equity, just to time thinking your about those could gave you But at impact about are stats. impact that not of think can stats, Just your credit thinking Joe, But you was mentioned you I thorough wondering very credit prior

there's think you into of impact mean, pension market prices, right? think and elements I impact on Yes, number load, right? things, treasuries ComEd. an They other mentioned and an I plays at it. have You with that, obviously, have a our associated clearly about that

about is There talked to securitization that into right? see those. expect that we the the -- capital thought time We Utilities we mostly to impacts things We've what the recovery higher alternative minor get We've We'll into project had clearly like continue to much into around did And are and We and the cost, about last just putting outcome our some at We we looks like? of Chris the be talked Illinois -- those decision-making. things looked actions economic challenge go control by all on that at sold too, values what regard. them. of legislation, variables, Constellation. the used quarter. assets the impact. we market financings on That financing. where and have receivables We a obviously about the the ourselves of in will a How talked is There's right? that. binary have other XXXX. assets

a elements Stephen. of there's So, to lot it,

Some there, then and are have themselves. on, and what the a like. and dividend, they upon make -- the And from we we that and to this we're our Others, we're determine control. we're recommendation we'll of we we'll putting across build kind working at part ultimately, of decisions much see capital Board looks year, end in of how funding do our plan footprint the and to

the that thing uneconomic. is one I add would The

supporting not will the for let very We dive swift that to employees, deteriorated earnings. will we themselves. run resolve sheet assets in serve, and lose then not are communities flow the the take balance cash get unfortunate and assets, action is earning will we flow or further not we plants on but by that non-profitable free cash that It

support everything an that, decisions we states. Not impact but focus. that the recent the a our remaining path doing to maintaining reality. investment-grade assets possible and facilities the We it's had down goals see we're states We've we years. environmental greatest that that of the the of of the the make, can we understand has communities economic portfolio. prevent in So, a and could sustainability in two to But main not on the units to is those ever shut impact the the serve,

just Separately, control, success all clear. about cost you in cost good thinking That's have savings. had very your

about think sustainability near savings, Utilities? cost the term headroom example, sort those in How cost you're for if thinking of some about And see? better what other potential to result rate for to of of you savings? those more at sustain there you do knock-on could sort able Just any benefits benefits of could potential, is savings, that that the of beyond CapEx create customer

the significant on the year, Company. I of on savings. we you the can the within as and a going quarter company effort there's next cost contingency tell announce third BSC, Well, planning you round the Business call each and generating Services know,

probably using we maintain it, we in fleet economically, we Now, -- technology. sure more hands Then on waving at going round third organizations it answering work his for are to and look at world of we'll responsible me. a -- looking significant financial as the other to in how HR, the this, to how we have differently. And fourth I'm amount our announce quarter Dan next right because legal, he's he's quarter. organization, if are make I'm the do at

Massachusetts point. learned the to that better, the we service. take should continue the capital and it do faster, and very if we've the reliability be better burden by if is how efficient, And quarter -- fourth There's should pandemic. spend some of But it can overheads have the the that serving reduction cheaper, picture formula. them one utilities it customer of customers. thing So, and We But of fleet during I unfortunately future work modified from -- plants, a back capital. the benefit the call. life you in the nuclear to significant the a are we'll go could mode retiring of the of we the have communities and customers off while capital -- as we'll we the of say needed necessarily that that to more customers for gives spend this headroom benefit imagine in refine can BSC overhead the wouldn't

it footprint to estate as have is be may now. right not as real Our big

around for the at the And footprint remotely. all those a We've or having about efficiently there's But reentry system working not around of assessing a look a people right couple some now that's the that's not the first will around has group very year we programs. audit the maintaining plants or facilities. a up. the and workforce of XX,XXX maintained only with are backing its on of working line safe We expenses individuals the schedule closed audit very strong days. in come people organization, controller's And for with a in-depth only the and books take it's and few portion

think I lot, go be a all as around savings lot, right end at back a translate going time. But doing we be year that's looking at the the and that. we're again, we'll Dan on I'm to squirming now. going of I committal -- learning guess I'll with So, into to not me But we're forward. more and to they're you the

so it. you Thank great. That's Appreciate much.

go Please Chris I to ahead, sir. like call now the you. Crane. would over Thank to turn back

the commitment joining for their to again want all dedication. I time. want employees really you you our Thank call. I for Yes. the to and thank thank for

the testing can Utilities onto all driving world-class our performance eastern getting contractors you country stuff X,XXX As and deck, ComEd imagine, and screening the And and still answering for through got questions on done employees and to we've the and of efficiency, going highest XXX site maintaining XXX across Utilities support onboarding contractors, site now, nuclear folks, with a outages. at right employees XXX our levels the reliability. and

arrived they think I So, today.

hope you close with healthy. I'll the the so And is that out And your families dedication and and and I call. willingness fantastic. that, the are safe

participants today. concludes us Thanks our to our for presentation. all joining This

and day. have You good may now disconnect a