Hello, and welcome to Exelon's Second Quarter Earnings Call. My name is Gigi, and I'll be your event specialist today. [Operator Instructions] Please note that today's webcast is being recorded. [Operator Instructions] It is now my pleasure to turn today's program over to Andrew Plenge, Vice President of Investor Relations. The floor is yours.

Thank you, Gigi, and good morning, everyone. Thank you for joining us for our 2025 second quarter earnings call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer; and Jeanne Jones, Exelon's Chief Financial Officer. Other members of Exelon's senior management team are also with us today, and they will be available to answer your questions following our prepared remarks. Today's presentation, along with our earnings release and other financial information can be found in the Investor Relations section of Exelon's website. We would also like to remind you that today's presentation and the associated earnings release materials contain forward-looking statements, which are subject to risks and uncertainties. You can find the cautionary statements on these risks on Slide 2 of today's presentation or in our SEC filings. In addition, today's presentation includes references to adjusted operating earnings and other non-GAAP measures. Reconciliations between these measures and the nearest equivalent GAAP measures can be found in the appendix of our presentation and in our earnings release. It is now my pleasure to turn the call over to Calvin Butler, Exelon's President and CEO.

Good morning, Andrew, and thank you very much, and thank you all for being with us today as we report on our results through the first half of the year. We continue to execute well across our priorities for 2025, building on a platform that is very well positioned to lead our states and jurisdictions through an exciting time in the sector. We earned $0.39 in operating earnings in the second quarter, above expectations at the time of our first quarter call, driven by favorable timing and cost management at our utilities, offsetting the impact of our $50 million customer relief fund and a stormy start to the summer. This keeps us on track to deliver on our operating earnings guidance for 2025 of $2.64 to $2.74 per share. Now storm seasons always highlight the talented and committed employees that make up the Exelon team. In June, PECO was hit with one of the largest storms in recent memory, with peak customer outages surpassing 325,000. Restoring power quickly was critical in light of a heat wave that followed the storm, and over 3,000 of our team members at PECO were joined by almost as many support personnel from around the country to bring customers back online working tirelessly in 100-degree temperatures. It's easy to take performance like this for granted. This is what you've come to expect from Exelon and why we continue to be recognized as the #1, #3, #5 and #8 most reliable utilities across the country. I'm incredibly proud of the sacrifices our team makes on a regular basis to provide the service our customers and communities expect. Turning to regulatory activity. I will remind you that our core rate case activity is limited this year having updated investment recovery rates across close to 90% of our…

Thank you, Calvin, and good morning, everyone. Today, I will cover our financial update for the second quarter and the progress on our current regulatory activity. Starting on Slide 5, we present our quarter-over-quarter adjusted operating earnings block. Exelon earned $0.39 per share in the second quarter of 2025 compared to $0.47 per share in the same period in 2024, reflecting lower results of $0.08 per share over the same period. Earnings are lower in the second quarter relative to the same period last year, primarily driven by $0.13 of higher distribution and transmission rates driven by new rates in effect. This favorability was offset by $0.07 of ComEd timing, which reverses most of the favorability seen in the first quarter due to revenue shaping and timing of O&M spend relative to 2024. There's $0.04 at corporate attributable to our customer relief fund, $0.03 of higher storm costs at PECO, $0.02 of higher interest at corporate and PHI and $0.02 attributable to the recognition of Pepco Maryland's first MIP reconciliations for rate years 1 and 2 in 2024. The remaining $0.03 is attributable to smaller nonrecurring items, including timing of taxes at corporate and approximately $0.01 attributable to the derecognition of a regulatory asset subsequent to Maryland's Next- generation act. As Calvin mentioned, these results are slightly ahead of the guidance we provided in our prior quarter call due to favorable revenue and tax timing at ComEd and disciplined cost management at our utilities. Our year-to-date performance underscores our ability to deliver strong financial results amidst increasingly significant storm activity and while continuing to find new and creative ways to support our customers. Looking ahead to next quarter, we expect earnings to be approximately 29% of the midpoint of our projected full year earnings guidance range, which contemplates new rates…

Thank you, Jeanne. Closing on Slide 9. We remain focused in 2025 on our 4 core areas to create value for our customers, jurisdictions and shareholders. As I noted, our employees deliver unparalleled service to our customers in all jurisdictions, which becomes especially apparent in the face of increasingly unpredictable and volatile weather. We invest every dollar as prudently and as efficiently as possible, trying to prevent outages from impacting our customers in the first place even amidst storms. It's why 98% of the net profit earned at our utilities has been reinvested back in the system over the last 5 years. But storms inevitably bring disruptions. When that happens, our team works tireless to bring people back online as quickly as possible. Those 2 elements, our investments in the system and the performance by our employees are the reason why we occupy 4 of the top 8 spots in reliability in the industry. This focus on top-notch service at below average cost is what drove ComEd's latest large low-tier proposals, which seek to ensure an interconnection process that is as efficient as possible for new customers while protecting existing customers against the risk that the load does not materialize at expected levels. We appreciate the engagement with large customers and other stakeholders in developing this set of proposals and look forward to finding a balanced solution as we continue to grow our pipeline of customers seeking to take advantage of industry-leading reliability at some of the lowest rates in the nation. That customer orientation was also highlighted by the CEO of a quantum computing company who noted ComEd's partnership with the state at the beginning of the company's site evaluation process was a key differentiator when deciding to locate in Chicago. Connecting this load continues to offer long-term advantages…

[Operator Instructions] Our first question comes from the line of Paul A. Zimbardo from Jefferies.

I think just to kick it off, and you described it well on your call, and it seems like nearly every one of your governors, if not all of the governors, have been increasingly active with PJM. which jurisdictions do you think is the most right for further action on that utility- owned generation or more energy efficiency, storage, something in those areas?

Yes. Thank you, Paul. I'll -- this is Calvin, and I'll start off with you. I would say you're absolutely right. Our governor signed in and stepped in. And as I talked about, we appreciate their engagement. We are committed to working with PJM, but we do believe state involvement is critical in this effort, as I outlined. As I also said, Governor Shapiro's effort specifically helped in capping what our customers would have otherwise had to pay, and that was roughly about $3 billion in savings. So that's significant. And all of our -- and I shouldn't say all, most of our jurisdictions have engaged in some legislative process to allow for us to look at what we can do to supplement existing supply. But as we talk about, you have battery storage at the T&D level being offered in Maryland. You have generation, utility-owned generation considerations in Delaware. You're looking at it in New Jersey. And to your question, which is right. It depends on how quickly they are looking to move and where is the need coming from. But what I can tell you, as we work with them and talk to them, we need 3 things that we talk about: one, certainty; two, we want the states to think that they have a sense of control over this to the customer benefits that derive directly from utility-owned generation, and we're going to be part of the solution and we're committed to it because it goes right to the affordability question. What can we do for our customers today that is not being done. But in the meantime, we do need to offer short-, mid- and long-term solutions in this process. I would look to Mike Innocenzo, our COO, to see if you have anything you'd like to add there.

Yes. I think the only thing I would add in terms of timing would be the Maryland legislation, which has a definitive request out there for 3,000 megawatts of power. We'll know that by October, whether that's met by the competitive market. And I think if that's not met, that would probably be the next time -- in the timeline to trigger some additional action.

Thank you, Mike. Paul, does that answer your question?

Yes, it does. And just a follow-up, and I appreciate that timing, Mike. Is it something that could be ready for a fourth quarter refresh when you do that next roll forward just given the Maryland opportunities, Delaware, New Jersey, just purely on the storage side? Is that something that could be ready in time for fourth quarter? Or could it take a little bit longer?

Yes. I think it depends on the outcome of the procurement that Mike mentioned. But I think sometime next year, we'll have more clarity for sure on all of our states.

And Paul, as you know how we do this, we're very deliberate about rolling forward on what we share with you. We're not going to speculate. We're going to be consistent and transparent in everything we do. And I promise you, we'll bring that to you as soon as we have some clarity on where it's going.

Our next question comes from the line of Anthony Crowdell from Mizuho.

Paul Z took my PJM question. Just if I could look at the $10 billion to $15 billion of potential transmission opportunity. When do -- or timing on when I could see that move into the base plan for the company? Is that on like a fourth quarter refresh? Can you give us some more timing of when that becomes part of your base plan?

Yes, Anthony, it's Jeanne. So we -- you're right. We would normally do that in Q4. And the reason why is we have the cluster study that I mentioned. So we'll have more clarity on that in the fall. We have ComEd grid plan that has to be filed in '26, BGE looking at its next filing. So we like to take all that together, including the transmission and build that into the updated plan that we present to you on Q4. All of that will be contemplated in there including the new business. And I think if you look back in the last couple of updates, we've typically updated about 8% to 10% every 4 years. And I think transmission has gone up about 30%. So you can expect that transmission will continue to be a big part of our roll forward going forward. And then, of course, we'll continue to keep an eye on the potential generation opportunities, working with our states. We wouldn't build that in until it's certain. And then Calvin also mentioned that we've organized ourselves under our Head of Transmission, Carim Khouzami, to also look at other competitive types of transmission. So as those opportunities are not in the $10 billion to $15 billion, and we would only put that in, as you would expect from Exelon until we have more certainty on those. But those are opportunities that we continue to work towards.

And financing that $10 billion to $15 billion a good rule of thumb, 30% to 40% equity or I'm curious what would be a good rule of thumb to finance that incremental CapEx?

Yes, we have been using a rule of thumb of every new dollar is about 40% equity.

Great. And then if I could jump to -- weird. I don't know what paper it was, had a big story on, I think the Illinois governor and quantum computing and like -- it seems like -- I apologize if I mispronounce the name, Governor Pritzker is very big in quantum computing. Is that creating a bigger opportunity or a unique opportunity for ComEd that may be it's different than the data center thematic that's going through the rest of the country?

Great question, and you did pronounce his name correctly. So congratulations. I was there last week on a panel with members of IBM and others talking about the quantum computing campus that they've established. And we're -- and the State of Illinois is very proud of that. And you heard me allude to in my comments that the CEO of PsiQuantum said that, but for ComEd engaging in that process, it wouldn't have been -- it wouldn't have come to Illinois. That's very significant, and it goes into that partnership. So to your direct question, is there upside? Absolutely. We've already seen requests coming from others who want to be on that campus, and that was the whole point. You get an anchor and people want to be close to what they're doing and benefit from the quantum computing efforts. And it was a several-day conference on exactly that. And once again, it's not built into anything that we've provided you because once we're going to be very transparent on the when and the who and when we roll it forward, it will come for you. But that's separate and above anything that we've talked about.

Our next question comes from the line of David Arcaro from Morgan Stanley.

Maybe on, let's say, on the generation side of things, we've obviously seen some of your peers express a willingness to build regulated like or contracted generation. So I'm wondering your current thoughts on whether that might kind of fit into your model? Is that something you would consider?

Simple yes. And it's based on how it's done, policy matters in this process, right? And we go back to those 3 tenets. We need certainty. We want to make sure we have a clear understanding where the states are getting in control, and we also want to know what the customer benefits. But we want to be part of the solution, and we do believe in that portfolio approach because what you're finding right now, David, is that the cost, the supply is not meeting the demand. So what can we do to be part of that solution. But how it's done does matter. And we're very optimistic that our states will do something. I think it was Paul that asked earlier where our states are engaging in this discussion, and we're engaged in those discussions every step along the way. And we want to partner, and we will continue to partner with PJM, but we do see it as an and, the competitive markets and regulated generation being part of the solution.

Yes. And we think the regulated generation in partnership with our states is the best way to do it. So again, the states need certainty, right? They don't -- while the PJM works, the competitive markets, if the states don't want to wait, right, and they know they have economic development that needs more generation, this regulated cap can give them certainty. It also gives them control. They can decide what type of generation makes sense for that -- for their customer set for their state. And in working with them, we can provide that control and then it provides customer benefits. We know we have a cost of capital advantage in doing it and proactively planning, you can get -- we believe there's customer benefits there. So that's why we believe that's the right way to do it. And look, half of PJM states today already have sort of a hybrid approach between some sort of regulated like generation and the restructured market. So we don't -- this isn't new or novel. And we think our state should just capture the opportunity, get that control, the certainty and the customer benefits, and we stand ready to partner with them and move forward.

Okay. Great. I appreciate that color. And then wondering if you could elaborate on how data center discussions have been progressing recently. How quickly do you anticipate firming up more megawatts and kind of any reactions that you're seeing from the industry to some of the large load tariffs that you're rolling out?

We talked about we see significant activity in Illinois. And we talked about the second cluster study that's being presented and started in August, which will provide more clarity as we go forward. And then let me just be very clear, we're also seeing data center activity across our other jurisdiction. Pennsylvania, Maryland. So this is not just a one state. You just see Illinois being in the top 5 of what we're doing. So understand it's driving forward, and you'll see more of those announcements coming in. But doing it the right way with reliability in mind is key. And I'm looking at Mike. I'm going to ask Mike if you'd like to jump in there.

Yes. The only thing I would add is timing, as Calvin, as you mentioned, so we've got active cluster studies going in Illinois. We've got active cluster studies going in the Mid-Atlantic. We expect results in the third, fourth quarter. Once you complete the cluster studies, you have commercial discussions with the different applicants there. So I think you would start to see in the third and fourth quarter some announcements as a result of those cluster studies coming up.

Yes. And we are watching the other large load tariffs across the states. ComEd did -- you may have seen ComEd filed with the ICC some proposed changes to its tariff, just seeking to not only meet the moment here with our new customers and get more clarity and certainty there, but also protect the other customer base. So just memorializing this use of cluster studies, recognizing state-certified economic development priority projects, and this would all be for projects 50 megawatts or more. So it's pretty consistent with what you're seeing in other states, but that would be the most recent that we filed. And the ICC is going to seek, I think, opinions and stakeholders on that as well.

Our next question comes from the line of Carly Davenport from Goldman Sachs.

Maybe just a quick follow-up on the large load pipeline. Is there any color you can provide in terms of the potential timelines for projects to progress through the different phases that you've outlined in that pipeline? And what the potential gating factors potentially impacting that cadence would be?

Carly, it's Jeanne. I think once we -- what I would say first, kind of to answer your second part of your question, I think what we try to give you is something that is highly, highly confident. And so when it's in these phases, I think we have found that it sort of met the initial studies, and we feel more confident that we'll move forward. So don't expect necessarily barriers. But what we have outlined is as we think about those megawatts, we think about 10% of that load will be online by 2028, another 1/3 by 2030 and then 3/4 of it by 2034. So not only do we want to give you kind of where they are in the phases, but then also, you can kind of think about how they move through those phases in correlation with the load ramps that I mentioned there.

Got it. Okay. That's super helpful. And then maybe just a follow-up on the PJM capacity auction results and customer bills. Could you just talk a little bit about the bill impact with these auction results in place, especially with the BGE clear being lower relative to the last auctions? And then any shifts that you're anticipating in sort of the rhetoric around customer bills from here?

Yes. So Carly, I think what you saw -- I'll address with BGE specifically. What you saw is BGE finished the last -- the previous auction higher. So the relative delta between this one and that one, that's why you saw less of an increase this time than you did last. But we anticipate the BGE bill impacts, and I'm looking at Tamla Olivier, the CEO of BGE, of roughly $1.5 going into our BGE customers. And again, I always say this, $1 increase on some of our customers' monthly bills was $1 too much. So we take it very seriously. So you see across our jurisdictions, we see anywhere from $1.5 to $4 increase going across the system. And we're doing everything we can to offset that and work with the states to mitigate it, but that's the impact we're seeing.

Yes. And I think in terms of your comment around sentiment, I think there is a broader understanding and recognition that this is driven by the supply costs, right? And we need the investments necessary in the grid to attract the economic development, just like we need to address these rising supply costs. And that goes back to what we're doing in terms of working with our states, having them take control, thinking of complementary solutions to PJM. Now that may take some time in terms of generation back to what Calvin said, whether it's energy efficiency or demand response, those are the near-term solutions we really need to take action while we get these longer-term solutions in place.

And Carly, it also goes directly to why the commissions need to be directly engaged, the commissions and the governors because these other solutions, we can do some things today to offset some of the rising costs and customer bills, but it has to be very thoughtful. It's no longer, can you do one-offs and expect something to happen. It has to be that portfolio approach. And energy efficiency and demand response are clear examples of what some of our states can do today to decrease customer bills. But because it's out of their norm, you get hesitation, and we continue to work with them to think broader than just today are the next decision.

Thank you. At this time, I would now like to turn the conference back over to Calvin Butler for closing remarks.

Thank you very much, Gigi. And as always, thank you, guys, for joining. Let me just say that we are committed to work with our states to really drive financial excellence and operational excellence. And we appreciate your support. And we hope to see many of you in the months ahead as we continue to get out on our road shows and talk with you and look forward to seeing you at our financial conference at EEI. So with that, Gigi, that concludes our call.

Thanks to all our participants for joining us today. This concludes our presentation. You may now disconnect. Have a good day.