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| 8-K - FORM 8-K - EXELON GENERATION CO LLC | d545829d8k.htm |
 Sanford C. Bernstein Strategic Decisions Conference
2013
Christopher M. Crane
Chief Executive Officer, Exelon Corporation
May 30, 2013
Exhibit 99.1 |
 Cautionary Statements Regarding Forward Looking Information
Sanford C. Bernstein Strategic Decisions Conference 2013
1
This
presentation
contains
certain
forward-looking
statements
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995,
that
are
subject
to
risks
and
uncertainties.
The
factors
that
could
cause
actual
results
to
differ
materially
from
the
forward-looking
statements
made
by
Exelon
Corporation,
Commonwealth
Edison
Company,
PECO
Energy
Company,
Baltimore
Gas
and
Electric
Company
and
Exelon
Generation
Company,
LLC
(Registrants)
include
those
factors
discussed
herein,
as
well
as
the
items
discussed
in
(1)
Exelon’s
2012
Annual
Report
on
Form
10-K
in
(a)
ITEM
1A.
Risk
Factors,
(b)
ITEM
7.
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
and
(c)
ITEM
8.
Financial
Statements
and
Supplementary
Data:
Note
19;
(2)
Exelon’s
First
Quarter
2013
Quarterly
Report
on
Form
10-Q
in
(a)
Part
II,
Other
Information,
ITEM
1A.
Risk
Factors;
(b)
Part
1,
Financial
Information,
ITEM
2.
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
and
(c)
Part
I,
Financial
Information,
ITEM
1.
Financial
Statements:
Note
17;
and
(3)
other
factors
discussed
in
filings
with
the
SEC
by
the
Registrants.
Readers
are
cautioned
not
to
place
undue
reliance
on
these forward-
looking
statements,
which
apply
only
as
of
the
date
of
this
presentation.
None
of
the
Registrants
undertakes
any
obligation
to
publicly
release
any
revision
to
its
forward-looking
statements
to
reflect
events
or
circumstances
after
the
date
of
this
presentation. |
 2
Exelon Overview
Power Generation
Constellation
ComEd, PECO & BGE
Competitive Business
Regulated Business
Exelon is one of the largest competitive integrated energy companies in the
U.S. •
One of the largest merchant
fleets in the nation (~35 GW of
capacity)
•
One of the largest and best
managed nuclear fleets in the
world (~19 GW)
•
Significant gas generation
capacity (~10 GW)
•
Renewable portfolio (~1.5 GW),
mostly contracted
•
Leading competitive energy
provider in the U.S.
•
Customer-facing business, with
~1.1 M competitive customers
and large wholesale business
•
Top-notch portfolio and risk
management capabilities
•
Extensive suite of products
including Load Response,
RECs, Distributed Solar
•
One of the largest electric and
gas distribution companies in
the nation (~6.6 M customers)
•
Diversified across three utility
jurisdictions –
Illinois, Maryland
and Pennsylvania
•
Significant investments in
Smart Grid technologies
•
Transmission infrastructure
improvement at utilities
Exelon Generation
Exelon Utilities
Sanford C. Bernstein Strategic Decisions Conference 2013
|
 National Presence
Power Generation
Constellation
Exelon Utilities
Operations in seven RTOs, with
strong positions across PJM,
ERCOT & New England
Serves more than 2/3
rds
of the
Fortune 100 companies in the
U.S.
Large urban presence with
operations in three states –
IL,
PA and MD
3
Sanford C. Bernstein Strategic Decisions Conference 2013
|
 Substantial presence across the value chain
Unique combination of scale and scope in the industry
Exelon is one of the largest competitive integrated energy companies in the
U.S. with a balanced national presence. This unique and
metrics-focused platform enables us to invest and drive growth in
both our competitive and regulated businesses Operational
Excellence
Regulatory
Advocacy
Disciplined Growth
& Investment
Financial
Discipline
We create value through our core competencies
Sanford C. Bernstein Strategic Decisions Conference 2013
4
Scale:
One
of
the
largest
competitive
integrated
energy
companies
in
the
U.S.,
with
a
balance
sheet
that
affords
us
investment
opportunities
like
few
others
in
the
sector
Scope:
Coast-to-coast
presence
with
operations
in
47
states,
the
District
of
Columbia
and
Canada
gives
us
a
unique
platform
to
identify
targeted
investments |
 •
Invested $6 billion
(1)
over the last three years across the
energy value chain via organic growth and M&A
Provided returns in excess of cost of capital
Accretive from a free cash flow, earnings and credit
metrics perspective
•
On track to install 230 MW of solar by year end
•
Added 404 MW of wind in 2012, all of which were done
under long-term PPAs
•
Expect 5%-6% utility rate base growth
•
Decision to resize dividend based on:
Investment grade at all registrants
65% -
70% payout ratio at the Utilities
Sustainable under various stress scenarios
•
Delay or cancel uneconomic capital programs
•
On track to achieve $550 million of merger synergies by
2014
•
History of top quartile Nuclear operating performance:
Best ever first quarter generation output and
fourth best ever nuclear capacity factor of
96.4% in Q1
Trademarked management model recognized
worldwide
•
Establishment of Exelon Utilities to exploit
standardization, common platforms, and the sharing of
best practices across the three utilities. Targeted goal
of 1
st
quartile operating performance by 2015.
Exelon’s competencies drive value for the shareholder
Sanford C. Bernstein Strategic Decisions Conference 2013
5
Operational Excellence
Capitalize on reliability and efficiency in our operations as a
competitive advantage
Financial Discipline
Committed to strong balance sheet and sustainable
dividend
Disciplined Growth & Investment
Invest in projects that build on our existing platform and
add shareholder value
Current 5-year plan includes ~$16B of growth investments across the
business; ~$13B
at
Utilities
and
~$3B
at
ExGen
(2)
•
Formula rate established at ComEd. Passage of Senate Bill
9 puts grid modernization plans on track in IL
•
Constructive outcome on latest BGE rate case
•
Promote competitive markets:
Advocate
for
phasing
out
of
subsidies
for
generation
Expand customer choice
Regulatory Advocacy
Champion competitive energy markets to empower our
customers and enhance value for our shareholders
1.
Excludes Constellation merger
2.
Exclusive of base capex and nuclear fuel |
 6
Incremental growth drivers include operating efficiency,
opportunistic investments and exposure to commodity upside
Sanford C. Bernstein Strategic Decisions Conference 2013
On a fully open basis, $1/mmbtu move in natural gas results in $1B of gross
margin 2015 ATC Price Change
2015 Heat Rate Change
Intrinsic value creation
Incremental balance sheet capacity deployed towards growth investments plus
additional productivity improvements to provide earnings boost over
current plan
(1)
$41.47
$39.17
$33.89
$31.87
$40
$38
$36
$34
$32
$30
6/1/13
5/1/13
4/1/13
3/1/13
2/1/13
1/1/13
$42
NiHub
PJM-W
9.4
9.3
7.7
7.5
5/1/13
6/1/13
9.5
7.5
9.0
8.5
8.0
10.0
7.0
4/1/13
3/1/13
2/1/13
1/1/13
NiHub
PJM-W
•
Continue to improve balance sheet strength
Pursue project financing opportunities
•
Productivity improvements
•
Utilities
•
Exelon Generation
•
Scale and scope affords us access to and ability to
execute across a wide range of opportunities
•
Look for value creating opportunities that will complement
our existing portfolio
Contracted generation assets both conventional
and renewable
Merchant generation in attractive markets
Regulated
Retail expansion
Beyond the Meter (rooftop solar)
Opportunistic Investments
Drive costs down across the enterprise,
incremental to synergy targets
Improve ROE and drive efficiency model across
the three utilities
Nuclear uprates
Investments in upstream gas and renewables
1. Balance sheet capacity grows over time through the next five years given
forward energy and capacity prices and assumption that any cash surplus is used to pay down debt |
 Our company and our value proposition
Sanford C. Bernstein Strategic Decisions Conference 2013
7
•
We believe in clean energy and competitive markets
•
Our management model for fleet operations is world renowned
•
With the Constellation merger, we have an industry leading retail and
wholesale platform and portfolio management expertise
•
We have a proven track record of operational excellence and investments
in growth
•
We are focused on value return to shareholders
Sustainable dividend with opportunities for growth in the future
Pursuing opportunities for earnings growth via driving business efficiencies,
opportunistic growth and intrinsic investments
Unparalleled upside to commodity price recovery |