Exelon Reports Fourth Quarter and Full Year 2020 Results And Initiates 2021 Financial Outlook

• Lower utility earnings due to lower allowed electric distribution ROE due to a decrease in treasury rates at ComEd; and unfavorable weather conditions at PECO; partially offset by regulatory rate increases at BGE and PHI; and
  
• Lower Generation earnings due to lower realized energy prices; a reduction in load due to COVID-19; increased nuclear outage days; and the absence of research and development income tax benefits recognized in the fourth quarter of 2019; partially offset by higher capacity revenues; lower operating and maintenance expense; and unrealized gains resulting from equity investments that became publicly traded entities in the fourth quarter of 2020.
  

FULL YEAR 2020

• Planned Separation: Exelon announced on Feb. 24, 2021 that its Board of Directors approved a plan to separate its utilities business, comprised of the company’s six regulated electric and gas utilities, and Generation, its competitive power generation and customer-facing energy businesses, creating two publicly traded companies with the resources necessary to best serve customers and sustain long-term investment and operating excellence. The separation gives each company the financial and strategic independence to focus on its specific customer needs, while executing its core business strategy. Exelon is targeting to complete the separation in the first quarter of 2022, subject to final approval by Exelon’s Board of Directors, a Form 10 registration statement being declared effective by the SEC, regulatory approvals, and satisfaction of other conditions.  
  
  
• Impacts of February 2021 Weather Events and Texas-based Generating Assets Outages: Beginning on Feb. 15, 2021, Generation’s Texas-based generating assets within the Electric Reliability Council of Texas (ERCOT) market, specifically Colorado Bend II, Wolf Hollow II, and Handley, experienced periodic outages as a result of historically severe cold weather conditions. In addition, those weather conditions drove increased demand for service, limited the availability of natural gas to fuel power plants, and dramatically increased wholesale power and gas prices.  
  

• Dividend: On Feb. 21, 2021, Exelon’s Board of Directors declared a regular quarterly dividend of $0.3825 per share on Exelon’s common stock for the first quarter of 2021. The dividend is payable on Monday, March 15, 2021, to shareholders of record of Exelon as of 5 p.m. Eastern time on Monday, March 8, 2021. The Board of Directors of Exelon approved an updated dividend policy for 2021. The 2021 quarterly dividend will remain the same as the 2020 dividend of $0.3825 per share.
  
  
• Agreement for Sale of Generation’s Solar Business: On Dec. 8, 2020, Generation entered into an agreement with an affiliate of Brookfield Renewable Partners L.P. (“Brookfield Renewable”), for the sale of a significant portion of Generation’s solar business, including 360 megawatts of generation in operation or under construction across more than 600 sites across the United States. Generation will retain certain solar assets not included in this agreement, primarily Antelope Valley. Under the terms of the transaction, the purchase price is $810 million, subject to certain working capital and other post-closing adjustments. The transaction is expected to result in an estimated pre-tax gain ranging from $75 million to $125 million. Completion of the transaction contemplated by the sale agreement is subject to the satisfaction of several closing conditions and is expected to occur in the first half of 2021. 
  
  
• ComEd Distribution Formula Rate: On Dec. 9, 2020, the Illinois Commerce Commission issued an order approving ComEd’s 2021 revenue requirement. The order resulted in a $14 million decrease to the revenue requirement, reflecting a $50 million increase for the initial year revenue requirement for 2021 and a $64 million decrease related to the annual reconciliation for 2019. The revenue requirement for 2021 and the annual reconciliation for 2019 provide for a weighted average debt and equity return on distribution rate base of 6.28%, inclusive of an allowed ROE of 8.38%. The rates were effective on Jan. 1, 2021.
  
  
• BGE Maryland Electric and Natural Gas Rate Case: On Dec. 16, 2020, the Maryland Public Service Commission (MDPSC) approved BGE’s three-year cumulative multi-year plan for 2021 through 2023 to recover capital investments made in late 2019 and planned capital investments from 2020 to 2023. The MDPSC offset the awarded electric and natural gas revenue increases in 2021 with certain tax benefits so customers would see no change in rates. The MDPSC’s order approved an increase in BGE’s electric distribution rates of $39 million in 2022 and $42 million in 2023 reflecting an ROE of 9.5% and an increase in BGE’s annual natural gas distribution rates of $11 million in 2022 and $10 million in 2023 reflecting an ROE of 9.65%. These rates are effective on Jan. 1, 2021. The MDPSC has deferred a decision on whether to use the tax benefits to offset the revenue requirement increases in 2022 and 2023 and BGE cannot predict the outcome.
  
  
• DPL Delaware Natural Gas Base Rate Case: On Jan. 6, 2021, the Delaware Public Service Commission approved an increase in DPL’s annual natural gas distribution rates of $2 million with an effective date of Sept. 21, 2020 and reflecting an ROE of 9.6%. 
  
  
• ACE New Jersey Electric Distribution Base Rate Case: On Dec. 9, 2020, ACE filed an application with the New Jersey Board of Public Utilities (NJBPU) to increase its annual electric distribution rates by $67 million (before New Jersey sales and use tax), reflecting a requested ROE of 10.3%. ACE currently expects a decision in the fourth quarter of 2021 but cannot predict if the NJBPU will approve the application as filed. ACE intends to put rates into effect on Sept. 8, 2021, subject to refund.
  
  
• Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem generating station and 100% of the CENG units, produced 44,230 gigawatt-hours (GWhs) in the fourth quarter of 2020, compared with 44,647 GWhs in the fourth quarter of 2019. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 96.2% capacity factor for the fourth quarter of 2020, compared with 95.0% for the fourth quarter of 2019. Excluding Salem, the number of planned refueling outage days in the fourth quarter of 2020 totaled 57, compared with 64 in the fourth quarter of 2019. There were four non-refueling outage days in the fourth quarter of 2020, compared with eight in the fourth quarter of 2019.
  
  
• Fossil and Renewables Operations: The Dispatch Match rate for Generation’s gas and hydro fleet was 98.8% in the fourth quarter of 2020, compared with 98.6% in the fourth quarter of 2019.

• Financing Activities:
• • On Dec. 18, 2020, ExGen Renewables IV (EGR IV), an indirect subsidiary of Generation, entered into a financing agreement for a $750 million nonrecourse senior secured term loan credit facility scheduled to mature on Dec. 15, 2027. The term loan bears interest at a variable rate equal to LIBOR plus 2.75%, subject to a 1.00% LIBOR floor. Generation used the proceeds to repay EGR IV's Nov. 2017 non-recourse senior secured term loan credit facility and to settle the related interest rate swap.