Exelon Corporation’s EXC investments to strengthen transmission and distribution infrastructure to allow it to meet rising demand from customers. EXC’s cost-saving initiatives and stable operations enable it to generate a steady cash flow and reward shareholders.
However, new technology disrupting usage patterns, failure of equipment or facilities and fluctuating weather conditions are concerns.
Exelon invests substantially in infrastructure projects and plans to invest nearly $38 billion during the 2025-2028 period in regulated utility operations for grid modernization and increasing the resilience of its infrastructure to benefit customers. The increasing demand from the data centers operating in Exelon’s service territories is providing new opportunities for it.
Few other utilities like NextEra Energy NEE, Dominion Energy D and The Southern Company SO, among others, have long-term capital investment plans to strengthen their operation.
Exelon is going to invest $21.7 billion in electric distribution, $12.6 billion in electric transmission and $3.8 billion in gas delivery in the 2025-2028 period. Its systematic investments will support rate base growth of 7.4% through 2028. The company also targets long-term EPS growth of 5-7% through 2028.
Exelon serves more than 10 million customers in its service territories. Utility customers across its service territories benefited from tax reforms, energy efficiency programs and cost-saving initiatives. Exelon’s ongoing cost-saving initiatives will further benefit customers going forward. It continues to manage expenses efficiently and keeps costs below the rate of inflation, thereby benefiting customers.
Exelon is currently concentrating on the transmission and distribution of clean energy. To offset the loss of revenues due to lower customer usage, nearly 78% of Exelon’s distribution revenues are decoupled. This insulates the top line from the impact of load fluctuations and leads to stable earnings. Exelon has a diversified rate base as it operates under seven different regulatory jurisdictions.
New emerging and advanced technologies could affect or transform the energy industry and energy delivery structure over time. Improvements in power generation technology, commercial and residential solar generation installations and commercial microturbine installations are improving the cost-effectiveness of customer self-supply of electricity. These developments can lower demand for Exelon’s transmission and distribution services, adversely impacting its profitability.
Failure of the equipment or facilities used in the delivery systems could interrupt electric transmission, and electric and natural gas delivery, which may result in a loss of revenues and an increase in maintenance and capital expenditures.
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