Exelon has the best platform for confronting an uncertain future as we adhere to our vision to be the best group of electric generation and electric and gas delivery companies in the United States. We have the industry’s best performing generation fleet, stable and improving delivery businesses, and the balance sheet and financial discipline to see us through difficult times. We are committed to being nimble and finding ways to be opportunistic in this economic environment.
Our platform for confronting an uncertain future is built on achieving the following sustainable performance goals.
1. Sustainable Operational Excellence
Our superior operating performance allows us to keep the lights on and the gas flowing.
Central to our continuing success is the operating excellence of Exelon Generation. As Exelon is committed to growing our long-term value, we will increase our generation scope and scale to succeed throughout industry cycles and adapt our generation portfolio to the changing marketplace.
- We consistently operate the nation’s largest nuclear fleet at world-class levels. Our nuclear fleet produced an overall capacity factor of more than 93% for 9 consecutive years through 2011.
- We operate a best-in-class nuclear fleet at a lower cost than our competitors.
- We recently took the management model for our nuclear fleet and applied it to the fossil fleet. Our fossil fleet had a commercial availability factor of 90.5% in 2011.
- In response to the American Recovery and Reinvestment Act, Exelon partnered with SunPower to build the nation’s largest urban solar installation—a 10-MW photovoltaic plant on a brownfield site on Chicago’s far south side.
Our delivery companies are also achieving constructive financial and regulatory progress.
- ComEd will submit every April a proposed revenue requirement based on actual costs incurred for the preceding year as well as anticipated plant additions for the current year, in compliance with the Energy Infrastructure Modernization Act legislation enacted in 2011. The highly transparent formula rate-making process is designed to provide ComEd with greater predictability concerning the recovery of actual costs in order to make the long-term investments needed to strengthen and modernize the electric system serving northern Illinois.
- PECO is targeting a long-term earned ROE at or above 10%. In 2010, PECO secured a fair outcome in both its electric and gas distribution rate cases. The Pennsylvania Public Utilities Commission unanimously approved an annual rate increase of $225 million for electric customers and $20 million for gas customers, with new rates in effect as of January 1, 2011.
- BGE is targeting an earned ROE closer to its allowed ROE over the long-term. BGE’s last completed rate case was in 2010. The Maryland Public Service Commission authorized an annual rate increase of $31.0 million for electric customers and $9.8 million for gas customers, with new rates effective on December 4, 2010. BGE filed a rate case on July 27, 2012 and requested an annual rate increase of $131 million for electric customers and $45 million for gas customers. The results of the current rate case are expected in February 2013.
Business Services Company
Our Business Services Company (BSC) continues to provide best-in-class professional services at exceptional value to Exelon’s family of companies. BSC’s accomplishments include:
- Reducing energy consumption by 18% compared with 2001 levels with a goal of 25% by 2012.
- Leading the Electric Utility Industry Sustainable Supply Chain Alliance, which is committed to improving the environmental performance of electric utility suppliers
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2. Sustainable Financial Discipline
Our finance group continues to deliver the financial discipline our shareholders have come to expect.
Exelon’s leadership position in the electric and gas utility industry is made possible by industry-leading financial discipline, cash flow and risk management practices. The combination of our conservative financial and risk management strategies gives us the strength and flexibility to enhance the value of our company. We are pursuing financially disciplined organic growth across the business without issuing equity. We are staying nimble so we can take advantage of opportunities that present themselves in this new economic era.
- As of December 31, 2011, our market capitalization was $28.8 billion.
- As of December 31, 2011, our ten-year total return measured by stock appreciation plus dividend reinvestment stands at about 158%, compared to 118% for the Philadelphia Utility Index and 33% for the S&P 500 Index.
- Our power marketing team makes the most of Exelon Generation’s outstanding performance. Power Team’s hedging and risk management efforts are instrumental in protecting the value of our assets and investor-grade balance sheet during this volatile time. By design, our hedging program allows us to weather short-term, adverse market conditions while positioning us to participate in long-term, upside potential.
- A major reorganization of the senior executive team and structure led to a leaner corporate management model in 2009. Additionally, Exelon started a major cost-cutting initiative to achieve savings in operations and maintenance expenses in 2009-2010.
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3. Sustainable Environmental Leadership
Exelon’s early commitment to responsible, low-carbon energy investment has enabled us to create advantages for our stakeholders while minimizing our impacts on the environment. Through Exelon 2020, we have been able to improve our energy efficiency and that of our customers and drive increased use of renewable sources of energy while meeting future energy needs.
Each of the Exelon operating companies is wholly committed to achieving this goal.
- At the close of 2010, Exelon achieved the first half of its Energy Reduction goal by reducing energy use at commercial buildings by 25% based on the 2001 baseline. Our generating stations are also making steady headway toward their goal of reducing total power use by 7%, having achieved a 6% reduction at the end of 2010.
- New buildings and renovations at Exelon are expected to follow Leadership in Energy and Environmental Design (LEED) criteria, and to date Exelon and its operating companies have attained 10 LEED certifications, with several others on the way.
- Exelon Generation is closing four older, inefficient fossil generating units, and beginning to replace this generation in its portfolio with wind, solar and newer natural-gas fired generation.
- Our utilities are also incorporating more alternatively-fueled and hybrid vehicles into their fleets. At the end of 2010, ComEd and PECO emit on average over 7% less GHG emissions per mile traveled compared to 2005, when mileage information was first tracked.
- Through replacement of aging breakers and agressive programs to identify and reduce leakage, in 2010 ComEd and PECO have reduced emissions from SF6 insulating gas by 70% since 2001.
- Exelon Business Services Company has established supply chain initiatives requiring environmental performance disclosure as part of its standard sourcing process. This allows Exelon to evaluate its suppliers based on this criteria, and raises awareness of the importance of environmental issues in the marketplace, helping suppliers recognize the value of these often intangible aspects of their businesses as part of their product's overall value.
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Financial and Operating Highlights
(in millions, except per share data and where indicated)
|Electric deliveries (in GWHs)
|Gas Deliveries (in million cubic feet)
|Total available electric supply resources (MWs)
|Cash flows from operating activities
|GAAP earnings per share (diluted)