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    EXC
    Earnings call· Jun 2026(Q2 FY26)

    EXELON Q2 FY26 earnings call EXC

    Jul 30, 2026 Source

    Executive summary

    Exelon Q2 FY26 — Strong Operational Performance Amidst Growing Grid Strain and Data Center Demand

    Exelon delivered solid Q2 FY26 adjusted operating earnings, reaffirming its full-year guidance and demonstrating strong operational reliability despite severe weather events. The company is actively addressing growing grid strain and resource adequacy challenges, particularly in the PJM market, by advocating for an "all-of-the-above" approach including transmission, utility-owned generation, and battery storage solutions. Management emphasized disciplined capital deployment and proactive engagement with regulators to balance affordability with necessary infrastructure investments, while also filtering speculative large-load demand through new security agreements.

    Highlights

    5

    • Reported adjusted operating earnings of $0.43 per share, consistent with expectations.

    • Reaffirmed full-year guidance of $2.81 to $2.91 per share, with a goal to be at the midpoint or better.

    • All utilities projecting top quartile reliability, with ComEd and PHI projected in the top decile.

    • Completed approximately 86% of 2026 debt financing needs, significantly reducing interest rate exposure.

    • Priced approximately 37% of planned equity needs through 2029 via forward contracts under the ATM program.

    Concerns

    4

    • PJM's most recent capacity auction cleared at the FERC approved price cap but fell short on reliability by approximately 6.8 gigawatts.

    • Only about 525 megawatts of new generation or uprates cleared in the PJM capacity auction, indicating insufficient new supply.

    • July heatwave pushed PJM to its limits, with demand hitting a record peak of 168 gigawatts and power prices surging tenfold from $80 to $800 per megawatt hour.

    • BGE delayed its rate case filing and deferred select projects to manage customer impacts, stating critical work cannot be delayed further without consequences.

    Guidance & targets

    6
    CategoryTargetConfidence
    Adjusted Operating Earnings
    $2.81 to $2.91 per share
    high materiality
    High
    Adjusted Operating Earnings Goal
    at the midpoint or better
    high materiality
    High
    Annualized Earnings Growth Rate
    near the top end of 5% to 7%
    high materiality
    High
    Q3 Earnings as % of Full Year Guidance Midpoint
    approximately 27%
    medium materiality
    Medium
    Capital Deployment
    approximately $10 billion
    high materiality
    High
    Consolidated Operating Return on Equity (ROE)
    between 9% to 10%
    medium materiality
    High

    Operational metrics

    19
    Adjusted Operating Earnings per Share
    $0.43up $0.04 year-over-year
    Q2 FY26

    Consistent with expectations, primarily driven by $0.04 of distribution and transmission rates, $0.04 related to last year's customer relief fund, and $0.01 of favorable weather at PECO, offset by $0.02 of higher credit loss expense at BGE and $0.02 of interest at Corporate and PECO.

    Annual Customer Interruptions Decline
    nearly 2 million
    since 2021

    Reflects disciplined investment in grid resilience. Transcription note: "nearly $2 million" is likely an ASR error for "nearly 2 million" or "2 million events" based on context.

    Jobs Created per $1M Investment
    8
    annual

    For every $1 million Exelon invests, an average of 8 jobs are created and $1.7 is generated.

    PJM Peak Demand
    168record peak
    July

    PJM was pushed to its limits during extreme heat, activating emergency procedures.

    PJM Power Price Surge
    tenfoldfrom roughly $80 to $800 per megawatt hour
    July

    During peak demand, power prices surged.

    New Generation/Uprates Cleared in PJM Capacity Auction
    525
    most recent auction

    Indicates market is not attracting the level of new supply the system needs, even at the highest allowed price.

    PJM Simulated Price without Price Cap
    $777vs. FERC approved price cap of $330
    most recent auction

    PJM's own simulation shows prices would have cleared higher without the cap, indicating severe underlying scarcity in ComEd territory.

    PJM Simulated Price without Price Cap
    $555vs. FERC approved price cap of $330
    most recent auction

    PJM's own simulation shows prices would have cleared higher without the cap, indicating severe underlying scarcity across the footprint.

    ERCOT Record Peak Demand
    91record peak
    earlier this month

    Met without emergency actions or curtailment requests, with stable power prices.

    ERCOT Power Prices during Peak
    $40relatively stable
    during peak hour

    During record peak demand, renewables and battery storage played a significant role.

    Energy Cost Savings from ACE Battery Storage
    $7.5 million
    July 2-5 wave

    If the ACE battery project had been operating during the July 2-5 heat wave, customers would have realized these savings to help offset higher market prices.

    Debt Financing Needs Completed
    86%
    2026

    Materially reducing remaining exposure to interest rate volatility for the year.

    Equity Needs Priced via ATM
    37%
    through 2029

    Priced via forward contracts under the ATM program.

    Average Credit Metrics Outlook
    approximately 14%
    through 2029

    Supporting the strategic and financial flexibility needed to advance the capital plan and capture additional customer-driven growth opportunities.

    Capital Plan
    $41 billionunchanged due to data center update
    2026-2029

    Remains unchanged despite data center pipeline refinement, as it did not include speculative projects.

    Data Center Collateral
    $1 billion
    Q2 FY26

    Financial commitment behind signed Transmission Security Agreements for data centers, filtering out speculative projects.

    Transmission Investment Opportunity
    $12 billion to $17 billion
    beyond 2029

    This amount is roughly what is spent in a 4-year period today, indicating continued investment opportunities beyond the current capital plan.

    Illinois Storage Procurement Target
    3
    this year

    State initiative to address grid needs, with 1,000 MW of the 3 GW target to be procured this year.

    PECO Rise Grant
    $50 million
    recent

    PECO was awarded a Rise grant for an investment at its gas plant.

    Industry KPIs

    3
    MetricValueDetails
    Regulatory rate base growth7.9%%
    Rto market structure reviewPJM EDC proposal
    Contracted large load capacity esas loas4GW

    Orderbook & backlog

    1
    Data Center Pipeline36 GWQ2 FY26

    down from 43 GW previously cited

    Reflects filtering out speculative projects via Transmission Security Agreements (TSAs). Includes 4 GW with signed TSAs backed by $1 billion collateral and 7 GW of high-probability projects predating TSAs. The remaining 25 GW is under study.

    Deals & partnerships

    2
    InvenergyDevelopment of a 500-megawatt battery energy storage system

    Atlantic City Electric partnered with Invenergy to advance a 500-megawatt battery energy storage system using 4-hour batteries in New Jersey.

    InvenergySubmission of two additional MISO Tranche 2.1 competitive transmission bids

    Exelon continues to leverage its scale, expertise, and strong development partnerships to pursue transmission opportunities. These bids are for the MARS and EASL projects in Iowa.

    Capital programs

    2
    ComEd Grid Planproceeding continues to move forward$15.3 billion
    Start: 2028

    Benefit: support reliability, accommodate significant load growth, advance Illinois' Energy policy framework

    Proposed investment from 2028 through 2031. An order is expected by December 15.

    Atlantic City Electric (ACE) 500 MW Battery Energy Storage Systemsubmitted in PJM Cycle 1; regulatory approval requestedapproximately $1 billion

    Benefit: 500 MW using 4-hour batteries; power approximately 400,000 homes; over $700 million in net benefits to customers

    Partnered with Invenergy. Not currently reflected in the capital plan. ACE filed a request for regulatory approval on the cost recovery mechanism last week, with a final order anticipated in the first half of 2027.

    Risks & headwinds

    5
    PJM market reliability shortfallmost recent capacity auction

    approximately 6.8 gigawatts

    Mitigation: Exelon advocating for all-of-the-above approach including transmission, demand-side solutions, market resources, and utility-owned generation; advancing battery storage and VPPs.

    Lack of new generation supply in PJMmost recent capacity auction

    only about 525 megawatts of new generation or uprates cleared

    Mitigation: Exelon advocating for policies that attract new supply, including utility-owned generation where it makes sense.

    Increased grid strain from extreme heat and weather eventsJuly 2026, YTD 2026

    PJM demand hit a record peak of 168 gigawatts in July; ComEd experienced 16 major weather events so far this year

    Mitigation: Disciplined investment in grid resilience; advocating for new supply and transmission expansion; deploying battery storage and VPPs.

    Customer affordability challenges due to rising costs and market pricesongoing

    PJM power prices surged tenfold from $80 to $800 per MWh in July; BGE delayed rate case filing and deferred projects to manage customer impacts

    Mitigation: Managing expenses carefully, deploying capital for customer value, supporting assistance programs, structuring large load agreements with financial commitments, advocating for new supply to put downward pressure on long-term costs.

    Regulatory delays and uncertainty impacting investment recoveryongoing

    BGE delayed its filing, deferred select projects; ComEd grid plan order expected by Dec 15; DPL Delaware final order expected Q3 2027

    Mitigation: Proactive engagement with regulators, balancing affordability with investment needs, highlighting long-term costs of deferred critical work.

    What to watch in Q3 FY26

    5

    ComEd Grid Plan Regulatory Order

    by December 15
    CurrentProceeding continues, staff and intermedial rebuttal testament filed
    TargetOrder issued

    Why it matters

    This order will determine the scope and approval of $15.3 billion in investment for reliability and load growth in Illinois.

    In order is expected by December 15.

    Q&A highlights

    6

    Does PJM's revised EDC proposal adequately address issues, and will Exelon intervene further with FERC or continue its own solutions like the 500 MW battery?

    Calvin Butler applauded PJM's efforts but noted they might not resolve long-term affordability without more generation. Exelon will continue advocating for consumer protections and believes states should play a central role, with utility-owned generation as a cost-effective complement. Gene Jones confirmed the 500 MW battery is not a one-off and more solutions are being pursued.

    “Ultimately, what we've always said and we're very consistent to really resolve long-term challenges on affordability, you need more generation to be brought online.”

    asked by Shahriar Pourreza · answered by Calvin Butler

    2 min read6 chapters

    Detailed Narrative

    01

    Grid Reliability and Storm Response

    Exelon's utilities demonstrated strong grid resilience, with all utilities projecting top quartile reliability and ComEd and PHI in the top decile. ComEd experienced 16 major weather events, more than two decades, including severe storms that impacted 530,000 customers, with 90% restored within 48 hours. This performance reflects disciplined investment in grid infrastructure, leading to a decline of nearly 2 million in annual customer interruptions since 2021.

    02

    Regulatory Activity and Affordability

    The company is actively engaged in several rate cases, including Pepco Maryland, DPL Delaware, ComEd's grid plan, and a new BGE filing. These filings aim to recover prudent investments for grid maintenance and reliability while balancing customer affordability. BGE delayed its filing and deferred select projects to manage customer impacts, emphasizing that long-term affordability depends on a strong, resilient system. A final order for BGE is anticipated in January 2027.

    03

    PJM Market Strain and Resource Adequacy

    The PJM market is under increasing strain, evidenced by a record demand peak of 168 GW in July, surging power prices, and a capacity auction that cleared at the FERC-approved price cap but still showed a 6.8 GW reliability shortfall. Only 525 MW of new generation cleared, highlighting a significant gap between growing demand and new supply. Exelon advocates for an "all-of-the-above" approach, including transmission, demand-side solutions, market resources, and utility-owned generation.

    04

    Large Load Demand and Customer Protection

    Exelon is proactively managing the influx of large load customers, particularly data centers, by structuring agreements that require real financial commitments and collateral for necessary infrastructure. This approach, reinforced by FERC's recent dockets, aims to protect existing customers from speculative requests and ensure actionable demand drives system investments. The company's data center pipeline has been refined, filtering out speculative projects, with 4 GW backed by $1 billion in collateral.

    05

    Battery Storage and Virtual Power Plants

    Exelon is advancing practical solutions like battery storage and virtual power plants (VPPs) to address capacity needs and manage price volatility. A significant 500 MW battery storage project in New Jersey, developed with Invenergy, is expected to provide over $700 million in net benefits to customers without bill impact until 2035. VPP programs in ComEd and Maryland aggregate customer-sited resources to reduce peak demand and support grid reliability.

    06

    Balanced Financing and Credit Metrics

    The company maintains a strong balance sheet and disciplined financing plan. Approximately 86% of 2026 debt financing needs are complete, and 37% of planned equity needs through 2029 have been priced via ATM forward contracts. Exelon expects strong average credit metrics of approximately 14% through 2029, supporting its capital plan and future growth opportunities.

    AI-generated summary of the company’s earnings call. Not investment advice.