Exelon Corporation

Hello and welcome to Exelon's first quarter earnings call. My name is Amanda 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 conference is being recorded. During the presentation, we'll have a question and answer session. You can ask a question by pressing star 1 on your telephone keypad. If you would like to view the presentation in full screen view, click the full screen button by hovering over your computer mouse cursor over the PowerPoint screen. Press the escape key on your keyboard to return to the original view. And finally, should you need technical assistance, as best practice would 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. And it's now my pleasure to turn today's program over to Dan Eggers, Senior Vice President of Corporate Finance. The floor is yours.

Thank you, Amanda. Good morning, everyone, and thank you for joining our first quarter 2021 earnings conference calls. 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 management team who will be available to answer your questions following our prepared remarks. These are the earnings released this morning along with the presentation, all of which can be found in the investor relations section of Exelon's website. The earnings released 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 Exelon's other SEC filings for discussions of risk factors and other factors, including uncertainties surrounding the plan separation 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. And good morning, everybody, and thanks for joining us. As you've seen from our earlier releases and notifications, we had mixed results in the first quarter. We performed well across our businesses outside of the challenges from five days in February due to the Texas weather event. Overall, our first quarter gap loss was 30 cents per share, and our non-gap loss was six cents per share. Exelon Utilities performed well operationally and financially during the quarter, delivering 72 cents per share, which is 11 cents better than the first quarter last year. At XGen, we lost 58 cents per share overall with the February weather event, costing 90 cents per share in the first quarter. The event was unprecedented. We continue to investigate. the multiple complex factors that led to our plant outages. And we're working with ERCOT regulators and other stakeholders to ensure an event like this does not happen again. As you saw in our 8K last week, we updated our full year losses at 150 million due to the updated load meter data in ERCOT default payments that differed from our original estimate. In addition, we reaffirmed our full year guidance of $2.60 to $3 per share. We continue to work on mitigating this approximately billion-dollar loss and expect to offset the loss by $410 to $490 million after taxes through a combination of mostly one-time cost reductions and deferral of non-essential maintenance and revenue opportunities Joe's going to go in much more detail on that in his presentation. Turning to the operations. Despite the extreme cold winters and the winter storms, the pandemic conditions, our utilities had a strong operational performance delivering reliability, affordable electricity and gas for our consumers. All the utilities achieved first quartile operating performance and outage duration and frequency BGE, ComEd, and PHI were in top decile in outage duration. Customer operations metrics remained strong across the utilities. PECO and BGE's customer satisfaction levels were top decile. ComEd was top quartile, and PHI just missed top quartile but improved year over year. On the generation front, in the face of extreme temperatures, winter storms, Our nuclear plants provided 37 terawatt hours of reliable, resilient, and clean to the grid of the citizens of Illinois, Pennsylvania, New York, and Maryland. The fleet capacity factor of 95.3% was what we reached for the quarter. The spring has been active, switching to policy. The spring has been active on the policy front with momentum building at both federal and state levels for policies that recognize the value of existing nuclear and would put the country on a path to a net zero future. Both XGen and the utilities are well positioned to benefit from these policies and the transition to a clean energy economy. On the federal level, The Biden administration has set out an ambitious goal to reduce greenhouse gas emissions by 50% to 52% by 2030. Nuclear provides more than half of the carbon-free emission electricity in the U.S., with Exelon plants providing 12% of all the carbon-free energy in the United States. The administration is clear that preserving the existing nuclear fleet is key in meeting the goals that they have set. The administration's infrastructure proposal, the American Jobs Plan, would enact policies to help reach the goal. It includes a clean electricity standard that would require 100% clean electricity by 2035 with existing nuclear qualifying as clean. Incentives to build 500,000 EV charging stations by 2030 and for 20 gigawatts of high voltage transmission lines to be built to support the renewable buildup. We're encouraged that the administration and members of Congress recognize the importance of preserving the nuclear fleet to meet the country's clean energy and climate goals. The timing and the outcome of the federal legislation is highly uncertain. And in any case, it will be too late to reverse the retirement decisions for Byron and Dresden. Our states are also advancing clean energy policies. In Illinois, six energy policy reform bills have been introduced that would drive the transition to clean energy and address climate change. The legislative leaders are meeting to craft a package from the various bills that can be considered this session. We're encouraged by the expression of support for the continued operation of the nuclear plants. However, the details really matter. A bill needs to pass before the end of the regular session and it needs to provide adequate support for continuing to invest in the Illinois fleet. Current market prices do not allow us to continue to meet our payroll, paying our property taxes and covering other significant costs and risks of operating these assets. Without adequate policy, as I've stated to you, that we will retire on economic plants beginning this fall. If you take a look at what happened in New Jersey last week, the board concluded that the financial challenges faced by nuclear plants there justified a maximum ZEC of $10 per megawatt hour. The same voices that are arguing in Illinois that our plants are profitable were overruled in New Jersey's decision. The commission in New Jersey emphasized that maintaining the existing nuclear plants was critical to achieving the state's emission goals and significantly less costly than replacing nuclear with other zero-free carbon generation. This is true in Illinois. Keeping the nuclear plants running is a better option for the customers than trying to replace them with all renewables in storage. At 12 times the cost, a higher cost than preserving the nuclear plants, it would cost the Illinois consumers over $80 billion more to achieve the same admissions. We've been advocating for policy changes in Illinois for more than two years, because I feel that we have a duty to our customers to preserve every opportunity to correct flawed policies and keep these critical energy resources running. But we're almost out of time, and we'll prematurely retire these assets. in the fall if the policy reforms are not passed in this session. Turning to clean energy policy in Pennsylvania, the Senate is moving forward on a bill that would set a state goal for transportation, electrification, and authorized electric utilities to develop EV infrastructure and plans authorize the recovery for these investments. We support these federal and state policy efforts and stand ready to enable this important transition to a clean energy future. Joe will talk about what our utilities are doing currently on EVs. Moving on to the separation update, our team is working to get the separation done. We filed our applications for regulatory approval at FERC, the NRC, New York Public Service Commission in February. The NRC has indicated that our application is complete and they expect to rule by November 30. In New York comments are due on May 24. And we requested that the Commission rule no later than their December 16 meeting. We're on track to get the necessary approvals so that we can close in the first quarter of next year. With that, I'll turn it over to Joe to go into the financial details.