Exelon Corporation

What they do

Exelon operates as a holding company for regulated transmission and distribution utilities: Commonwealth Edison (ComEd), PECO Energy, Baltimore Gas and Electric (BGE), and Pepco Holdings (PHI), which includes Potomac Electric Power (Pepco), Delmarva Power & Light, and Atlantic City Electric. The utilities earn revenue under cost-of-service regulation through distribution and transmission rates approved by state and federal regulators, plus regulated natural gas delivery. Revenue is billed to residential, commercial and industrial customers in its service territories.

Revenue drivers

• Electric distribution and transmission (ComEd, PHI, BGE, PECO) — The largest earnings source; Q2 2026 results were driven by higher distribution and transmission rate base at ComEd and PHI and distribution rates at BGE. ComEd's distribution earnings are decoupled from weather and usage.
• Regulated natural gas delivery — BGE and PECO deliver natural gas to customers under regulated rates; the 10-K tags both Electricity US Regulated and NaturalGas US Regulated revenue categories.
• Rate case and rider recovery — Revenue reflects approved rate increases tied to recovery of costs and investments in serving customers, including updated recovery rates and surcharge mechanisms.
• AFUDC and construction-related earnings — Higher allowance for funds used during construction at ComEd contributed to Q2 2026 earnings and reflects the ongoing capital investment program.

Recent performance

For the second quarter of 2026, Exelon reported GAAP net income of $0.39 per share and adjusted (non-GAAP) operating earnings of $0.43 per share, up from $0.39 in Q2 2025. ComEd GAAP net income rose to $249 million from $228 million, while PECO GAAP net income fell to $119 million from $136 million. Drivers included higher distribution and transmission rates at ComEd and PHI, higher BGE distribution rates, absence of customer surcharge credits at PECO, higher AFUDC at ComEd, and favorable PECO weather, partly offset by higher PECO and PHI depreciation, higher BGE credit loss expense, and higher PECO interest and taxes. Full-year 2025 revenue was $24.26 billion with net income of $2.77 billion.

Strategy

Management is focused on grid modernization, reliability and affordability, citing top-quartile reliability targets with ComEd and PHI in the top decile. The company is advancing storage and virtual power plant solutions, including a transmission-connected battery storage proposal filed by ACE with the New Jersey Board of Public Utilities. BGE filed an electric distribution rate case in July 2026 seeking recovery of investments and operating costs, cost of capital, and storm event recovery. Exelon has executed 86% of 2026 planned debt financings to fund utility investment. These efforts are framed under 'The Exelon Promise.'

Risks

• Regulatory rate case outcomes — Results depend on state commissions approving rate requests such as the BGE electric distribution rate case filed in July 2026.
• Higher interest expense — Exelon reported higher interest expense in Q2 2026, including at the holding company and PECO, and carries $47.86 billion of long-term debt as of 2026-03-31.
• Cost and credit pressures at operating utilities — Q2 2026 earnings were reduced by higher depreciation at PECO and PHI and higher credit loss expense at BGE.
• Weather and usage variability — PECO results benefited from favorable weather in Q2 2026, while ComEd's distribution earnings are decoupled; other utilities remain exposed to weather and customer usage patterns.

Outlook

Exelon affirmed full-year 2026 adjusted (non-GAAP) operating earnings guidance of $2.81 to $2.91 per share and expects operating EPS compounded annual growth near the top end of 5% to 7% from 2025 to 2029. The company said it is on track with its financing plan, having executed 86% of 2026 planned debt financings. Management cited growing energy demand and continued investment across its utilities, including storage and virtual power plant solutions.