Exelon’s 2026 Q2 Earnings Call: Data Center Growth Reclassification and Transmission Spend Rationale at Odds

Date of Call: Jul 30, 2026

Financials Results

• EPS: $0.43 per share, up $0.04 year-over-year

Guidance:

• Reaffirmed full-year operating earnings guidance of $2.81 to $2.91 per share, with goal to be at the midpoint or better.
• Expect third quarter earnings to be approximately 27% of the midpoint of the full-year guidance range.
• Anticipate fourth quarter to benefit from absence of one-time 2025 distribution and transmission rates and disciplined execution.
• Reaffirmed expectation to deliver annualized earnings growth near the top end of 5% to 7% from 2025 through 2029.

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Business Commentary:

Earnings Performance and Reliability:

• Exelon reported adjusted operating earnings of $0.43 per share for Q2 2026, consistent with expectations. The company reaffirmed its full-year guidance of $2.81 to $2.91 per share.
• This performance reflects disciplined investment in grid resilience and a sustained focus on delivering safe, reliable service, particularly highlighted by ComEd's response to 16 major weather events, restoring power to 90% of affected customers within 48 hours.

Regulatory Activity and Rate Cases:

• Exelon remains on track with several regulatory proceedings, including the PEPCO Maryland, DPL Delaware, and ComEd's grid plan. Additionally, a rate case was filed with BGE, with a decision expected in January 2027.
• These efforts are focused on balancing affordability with the necessary investments to maintain a safe and reliable grid, ensuring long-term affordability and reliability for customers.

Affordability and Supply Challenges:

• Exelon highlighted the challenge of affordability, noting that extreme heat in July pushed PJM to its limits, with record demand leading to a tenfold increase in power prices.
• The company is advocating for an all-of-the-above approach, including transmission expansion, demand-side solutions, market resources, and utility-owned generation, to address growing demand and supply constraints.

Transmission and Storage Solutions:

• Exelon continues to lead on transmission expansion, recently submitting two additional MISO Tranche 2.1 competitive transmission bids in partnership with Invenergy.
• The company emphasizes the importance of battery storage, citing a 500-megawatt battery storage project in New Jersey, which can provide significant energy cost savings and support grid reliability.

Capital Investment and Growth:

• Exelon is focused on deploying approximately $10 billion of capital for customer benefit in 2026, supporting reliable, resilient, and affordable energy service.
• The company's strategy is underpinned by a strong balance sheet, with about 86% of its 2026 debt financing needs completed, and a balanced hedging strategy protecting against interest rate volatility.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in the path ahead, citing Exelon's scale, platform, and experience. Statements include: 'The story is consistent and straightforward... we're performing today and actively preparing for tomorrow. Exelon is built for this moment.' and 'We remain confident in our ability to deliver value for our customers and shareholders.'

Q&A:

• Question from Char Perez (Wells Fargo): PJM walked back from the EDC proposal... Do you feel like where they landed meaningfully addresses the key issues in PJM? Do you have any plans to intervene further with FERC?
  Response: Management believes PJM's measures address near-term reliability but not long-term affordability; they will continue advocating for consumer protections and state-led resource planning with utility-owned generation as a complement.

• Question from Char Perez (Wells Fargo): Data center growth slide shows... 36 gigs, that's down around 11 gigs from the 43 gigs... Is that simply like a reclassification?
  Response: The update reflects weeding out speculative projects via Transmission Security Agreements (TSAs), leaving 11 gigawatts of high-probability growth (4 gigawatts with signed TSAs and collateral), with total capital plan unchanged.

• Question from Jeremy Tunnett (JPMorgan Securities), asked by Aiden Kelly: Now a few months since the withdrawal of your PECO rate case... what would encourage you to file this time?
  Response: Constructive conversations with Governor Shapiro's office and PUC, along with existing data points and settlements, indicate a solid regulatory framework; they aim to address stakeholder concerns on investment value, ROE transparency, and affordability when filing again.

• Question from Jeremy Tunnett (JPMorgan Securities), asked by Aiden Kelly: To what extent can you tap into your identified 12 to 17 billion upside opportunity... what win rate should we be thinking about as it pertains to upcoming competitive transmission windows?
  Response: The $12-17 billion is driven by multiple factors including competitive transmission; Exelon is well-positioned due to operational excellence and experience with high-voltage lines, having filed projects in MISO and expecting decisions in Q4.

• Question from Paul Zimbardo (Jeffries): ComEd that simulated $777 per megawatt day clear in the last auction, is that a catalyst for unlocking even more incremental transmission and storage investments?
  Response: Yes, it reinforces the need for an all-of-the-above approach, including transmission and battery storage, to address affordability and reliability; such investments are already part of the capital plan.

• Question from Paul Zimbardo (Jeffries): Holistically, it looks like there have been some... paper cuts across the jurisdictions... How would you claim comfort, conservatism in the plan overall?
  Response: Management does not view adverse rulings as 'paper cuts'; Exelon's diversified platform and execution capability allow it to meet or exceed targets despite regulatory challenges in any single jurisdiction.

• Question from Andrew Weissel (Scotiabank): How are you thinking about CapEx levels and categories for Pennsylvania? Are your conversations pointing toward minimizing spending, purely focused on reliability and safety?
  Response: Focus remains on investments that provide clear customer value, supporting economic development, safety, reliability, and affordability; they will leverage the DISC mechanism and communicate thoroughly with stakeholders.

• Question from Andrew Weissel (Scotiabank): In Illinois, I know that there's the IRP process... what exactly is the goal here?
  Response: The goal is for the state to gain a better picture of its specific supply and demand needs, enabling the ICC to expand programs like energy efficiency, storage, or distributed generation as needed.