Exelon Corporation

Hello, and welcome to Exelon's third quarter earnings call. My name is Gigi, and I'll be your event 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'll have a question and answer session. You can ask questions by pressing star 1 on your telephone keypad. If you would like to view the presentation in a full screen view, click the full screen button by hovering your computer mouse cursor over the PowerPoint screen. Press the Escape key on your keyboard to return to your original view. And finally, should you need technical assistance, as a best practice, we suggest you first refresh your browser. If that does not resolve the issue, please click on the Help option in the upper right-hand corner of your screen for online troubleshooting. It is now my pleasure to turn today's program over to Dan Eggers, Senior Vice President of Corporate Finance. The floor is yours.

Thank you, Gigi. Good morning, everyone, and thank you for joining our third quarter 2020 earnings conference call. Leading the call today are Chris Crane, Exelon's President and Chief Executive Officer, and Joe Nigro, Exelon's Chief Financial Officer. They're joined by other members of Exelon's senior management team who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning along with a presentation, both of which can be found in the investor relations section of Exelon's website. The earnings release and other matters which we discussed during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made during this call. Please refer to today's 8K and Excellence Other SEC filings for discussions of risk factors and other factors, including uncertainties surrounding the impacts of the COVID-19 pandemic, that may cause results to differ from management's projections, forecasts, and expectations. Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between the non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Chris Crane, Exelon CEO. Thanks, Dan.

Appreciate it. As you can see from our release, we've had strong earnings and operational performance while continuing to focus on the health and safety of our employees in the communities. Our GAAP basis earned 51 cents per share. Our non-GAAP basis earned $1.04 per share. We did outperform our guidance that we had originally given at 80 to 90 cents per share due to some favorable weather and more cost savings coming through sooner than we anticipated. Joe's going to get into the detail that I want to highlight. In August, we had the tropical storm that battered the East Coast with rain and strong winds, significant impacts to Ace, Delmarvin, Pico, It was Pico's 10th largest storm on record following the 8th largest storm in June. Then a hurricane like Derecho tore through the ComEd service territory, spawning 13 tornadoes. Between the two storms, we had more than 1.5 customers lost power. We had more than 500 employees and contractors. that were helping their sister utilities moving back and forth between the east and the west to try to respond to the needs of the customers. And despite the intensity, we were able to restore the power to our customers at record time. Due to the power of our Exelon Utilities platform, our employees' quick response and collaboration made the difference for our customers. So I really want to thank our employees for their great work. restoring service to customers during not just the pandemic, but a very active storm season as we've seen. As I mentioned on the last call, Exelon is committed to our values of diversity, equality, and inclusion. Part of this commitment calls on our businesses and our partners to recognize these values and include women and people of color in key roles on our accounts. For 10 years, we've recognized partners who have excelled in this area. This year, we've included 30 companies in banking, insurance, legal investment, professional and IT services to our 2020 diversity and inclusion honor roll. We also are committed to delivering clean energy in a clean energy future. Exelon Foundation and Exelon selected 10 startups as part of the first round of 20 million in climate change investment initiatives. Beyond the financial support, Exelon will mentor the startups on accessing capital, structuring the business, capital allocation, and meeting the regulatory requirements. Through this program, the foundation will invest early in stage startups working on climate change, mitigating, adapting and resilience in our service territory. 50% are minority or women owned. 60% of the projects focus on greenhouse gas mitigation, and the others are on resiliency and adapting to the changing climate environment that we're living in. These investments will bring us a step closer to a clean energy future by helping Entrepreneurs translate their ideas for reversing climate change into practical solutions. Finally, we made the difficult decision to retire some on economic generation stations. Mystic Generation Gas Fire Station in Boston will retire in 2024 when the cost of service agreement expires. And very disappointingly, we announced our Dresden Byron and Dresden nuclear stations will retire in 2021. These plants produce 30% of the carbon free electricity in Illinois. They provide over 1500 good paying full time jobs. And they support 2000 supplemental workers during refueling outages, most from local union halls. Paying $63 million in taxes annually to support local schools, fire departments, and other services in their community. Despite being among the most efficient, reliable units in the US nuclear fleet, they face revenue shortfalls, declining energy prices, lack of capacity revenue, and market rules that allow fossil plants to underbid clean energy resources in the PJM market auction. Given these losses, we have made a tough decision to shut these units down and give our employees and the host communities time to manage through the personal and economic challenges ahead. Without these plants and others at risk, customers will pay $483 million in increased annual energy costs under the PJM auction structure that is about to occur. The electric sector emissions will increase by 70%, and instead of growing zero-carbon energy in Illinois to reach the state's goal of clean energy, will fail decades behind. We continue to work with interested parties on the best way to achieve these state goals, but urgent action is needed. We have to protect our consumers from higher bills, our state from dirtier air, and our communities from the loss of these irreplaceable power plants and the jobs that they create. Turning to operations, even with the pandemic conditions, extreme storms, and record heat across our territories, All our utilities have achieved first quartile operating performance and outage duration and frequency. Customer service remains at a top quartile across all utilities with VGE, ComEd, and PECO delivering service in top decile. Power dispatch match of 98.9% and renewable energy capture at 91.9%. Constellation has also had a very strong quarter. of execution as a result was able to increase the new business targets for the year that we talked about that looked at trouble in the first quarter. The nuclear performance was excellent. The plants ran at 96% for the quarter. They led the nation in zero carbon electricity production, producing almost 38 terawatt hours of emission-free generation. Like all of our plants, Dresden, Byron, ran at nearly full power through the hottest summer on record. Employees at Dresden and Byron are entirely focused on ensuring the reliability and safety of these plants through their retirement dates. The plant's forced retirement is simply hard to deal with, and it's a shame. I'll now turn the call over to Joe for a financial update.