Exelon's Q3 2025 Earnings Call: Contradictions on Regulatory Stance, Maryland RFP Solutions, Data Center Infrastructure, and Colocation Strategy

Date of Call: November 4, 2025

Financials Results

• EPS: $0.86 per share, up $0.15 YOY (from $0.71 in Q3 2024)

Guidance:

• Reaffirmed 2025 adjusted operating earnings guidance of $2.64 to $2.74 per share, targeting midpoint or better.
• Annualized operating earnings growth of 5%–7% through 2028, with expectation to be at midpoint or better.
• Expect rate base growth of ~7.4% through 2028 and target ROE in the 9%–10% range.
• Q4 assumptions: reversal of timing items (O&M, distribution earnings, taxes), fair/reasonable rate-case outcomes, and normal weather/storm activity.
• Financing: continued derisking (debt issuance completed), priced ~half of equity needs through 2028; targeting ~14% cushion vs. Moody's downgrade threshold.

Business Commentary:

• Operating Earnings and Weather Impact:
• Exelon reported earnings of $0.86 per share for Q3 2025, which was stronger than anticipated due to slightly warmer weather and a mild storm season.

• This exceeded expectations driven by favorable storm conditions and timing-related drivers.

• Regulatory Approvals and Investments:

• Exelon is progressing with several regulatory filings, including a gas distribution rate case at Delmarva Power and an electric base rate case at Pepco, with expected orders in Q1 2026 and by the end of the year, respectively.

• These filings support infrastructure investments and demonstrate cost savings and reliability improvements.

• Large Load Pipeline and Transmission Investment:

• Exelon's large load pipeline stands at over 19 gigawatts, with at least 27 gigawatts awaiting transmission security agreements or in active cluster studies.

• The large load pipeline is expected to drive broader needs for the grid, enhancing transmission investment and grid reliability.

• Financial Outlook and Debt Issuance:

• The company plans to settle nearly half of its equity needs through 2028, including all of its annualized equity needs in 2025.
• This is due to strategic debt issuance and equity-pricing strategies aimed at derisking the company's financing plan.

  Sentiment Analysis:

  Overall Tone: Positive

  • "We reported earnings of $0.86, which was stronger than anticipated"; management "reaffirmed our operating earnings guidance for 2025 of $2.64 to $2.74 per share"; utilities ranked 1, 2, 4 and 7 in reliability benchmarking; "strong investor demand and attractive pricing" on recent debt issuance; plan to grow earnings 5%–7% through 2028. These statements emphasize better‑than‑expected results, reaffirmed guidance and constructive financing outcomes.

Q&A:

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Can you discuss your view on Maryland's RFP process, the timing, and how you see competing proposals (including Constellation's) fitting with regulated solutions?
  Response: Exelon views the RFP responses as encouraging but insufficient to meet the need; the company is willing to step up and supports regulated solutions if the competitive market doesn't deliver.

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Thoughts on the two Pennsylvania bills on resource adequacy and whether utilities can reach middle ground with IPPs (e.g., long‑term RA agreements vs. rate‑basing)?
  Response: Discussions in Pennsylvania are progressing, exploring all‑of‑the‑above solutions including long‑term PPAs and contracts; more legislative/activity likely in spring after current budget work, with a third‑party PUC study informing next steps.

• Question from Paul Zimbardo (Jefferies LLC, Research Division): Can you unpack Illinois' new legislation (Clean and Reliable Grid Affordability Act) and the investment opportunities related to energy efficiency, storage and distributed resources?
  Response: SB25 expands energy efficiency, targets 3 GW of storage by 2030, broadens distributed generation rebates and mandates TOU offerings—creating investment opportunities Exelon and ComEd will actively pursue to support reliability and economic development.

• Question from Paul Zimbardo (Jefferies LLC, Research Division): As transmission rate base steps up into 2028, is it fair to expect stronger growth in 2029 within your 5%–7% earnings growth target?
  Response: Formal guidance will be provided on the Q4 call; transmission opportunities point to stronger rate‑base growth toward 2029–2032, but those items are not included in current guidance until they are certain.

• Question from Nicholas Campanella (Barclays Bank PLC, Research Division): Is clarity on CAMT repairs timing achievable by year‑end and will that affect the financing outlook to '29?
  Response: Management is hopeful for CAMT guidance clarity by year‑end; a favorable resolution would provide incremental credit cushion (~50 bps) and be incorporated into the Q4 financing update.

• Question from Nicholas Campanella (Barclays Bank PLC, Research Division): If you receive CAMT-related cushion, would you use it to reduce equity needs or accelerate CapEx?
  Response: The cushion would support reaching the ~14% target; Exelon will balance equity, hybrids and capital deployment to maintain credit metrics while funding plan needs.

• Question from Nicholas Campanella (Barclays Bank PLC, Research Division): ACE rate case has been long running — why do you still expect settlement and not a final order in the coming months?
  Response: Atlantic City Electric and stakeholders remain actively engaged; settlement is expected by year‑end and the ability to implement interim rates (subject to refund) helps keep settlement discussions moving.

• Question from Jeremy Tonet (JPMorgan Chase & Co, Research Division): Can you update us on the Amazon PECO TSA and the broader TSA approach for large loads?
  Response: TSAs (first executed in PECO) firm up large‑load commitments, weed out speculative projects and protect customers; a ComEd tariff has been filed to require TSAs for loads >50 MW.

• Question from Jeremy Tonet (JPMorgan Chase & Co, Research Division): Regarding the $10B–$15B transmission CapEx and competition lifting growth outlooks, how will Exelon remain competitive?
  Response: Exelon will include only bankable, executable transmission projects in the plan; awaiting PJM window outcomes by year‑end and will incorporate projects once certainty exists, focusing on execution and core operational strength.

• Question from David Arcaro (Morgan Stanley, Research Division): How do you probability‑weight the 47 GW large‑load pipeline — are these timing issues or lower probability?
  Response: Probability is largely a timing issue: projects move to 'high probability' only after completing the cluster study and signing a TSA; many MWs are advancing (6 studied awaiting TSA, ~20 actively studied).

• Question from David Arcaro (Morgan Stanley, Research Division): What is the typical time to connect for new data center projects entering the cluster study — when can you offer power?
  Response: Time to connect depends on size, location and existing infrastructure; where existing capacity can be used (e.g., NorthPoint) connections can be achieved within a year or two, sometimes faster with expedited processes.

Contradiction Point 1

Utility-Owned Generation and Regulated Generation

It involves the company's stance on utility-owned and regulated generation, which impacts strategy and regulatory engagement, potentially affecting revenue and public policy positions.

Can wire companies and IPPs reach a consensus on long-term resource adequacy agreements amid proposed legislation? - Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division)

2025Q3: We believe in the merits of competition and believe that competitive markets can deliver significant customer benefits. However, if competitive markets cannot meet these needs without relying on old rules, we believe there must be alternatives. - Calvin Butler(CEO)

Are you open to building regulated or contracted generation to address supply-demand gaps? - David Keith Arcaro (Morgan Stanley)

2025Q2: We partner with states and believe regulated generation can provide needed supply. We are discussing this with our states. - Calvin Butler(CEO)

Contradiction Point 2

Maryland RFP and Resource Adequacy

It involves differing perspectives on the Maryland RFP process and resource adequacy solutions, which could impact Exelon's strategic positioning and regulatory outcomes.

What are your thoughts on the RFP in Maryland? Are you concerned the disclosed need may fall short of the goal, and how do you assess Constellation's competing proposals? - Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division)

2025Q3: We commend the state of Maryland for initiating the RFP process. While the disclosed need fell short, we are encouraged by the replies, but more supply is needed. We support solutions that meet customer needs for affordability and reliability. - Calvin Butler(CEO)

What are your expectations for resource adequacy legislation in Maryland and Pennsylvania? - Nicholas Campanella (Barclays)

2024Q4: In Maryland, there's a focus on increasing in-state generation. - Calvin Butler(CEO)

Contradiction Point 3

Data Center Load Ramp-up and Infrastructure Limitations

It involves differing expectations on the timeline and infrastructure limitations related to the ramp-up of data center load, which could impact Exelon's growth and reliability.

Can you update us on the Amazon TSA and its impact on your business? - Jeremy Tonet (JPMorgan Chase & Co, Research Division)

2025Q3: We have implemented transmission service agreements to solidify projects and protect other customers. The pipeline of large loads is being studied and signed, with 27 gigawatts in advanced stages. The process ensures certainty in project development and customer protection. - Jeanne Jones(CFO)

Can you provide a timeline for the ramp-up of data center load and infrastructure limitations? - David Arcaro (Morgan Stanley, Research Division)

2025Q1: The timing of the FERC process does not impact the timing of data center development. Exelon is working on 16 gigawatts of new load, with 10% expected by 2028 and the remainder by 2034. - Jeanne Jones(CFO)

Contradiction Point 4

Maryland RFP and Colocation Issue

It involves differing views on the Maryland RFP process and the colocation issue, which could impact Exelon's strategy and potential regulatory outcomes.

What are your thoughts on the RFP in Maryland? What concerns exist regarding the disclosed need not meeting the goal, and how do you assess Constellation's competing proposals? - Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division)

2025Q3: We are encouraged by the replies, but more supply is needed. We support solutions that meet customer needs for affordability and reliability. If competitive markets can meet the demand without relying on old rules, we are willing to step up, but also recognize the need for progressive solutions. - Calvin Butler(CEO)

What is Exelon's response to the FERC 206 settlement request for colocation? - Nick Campanella (Barclays)

2025Q1: We are committed to finding a solution quickly and equitably. The company is actively engaging with IPPs and is aligned with transmission owners in seeking a solution. - Calvin Butler(CEO)