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Exelon (EXC) Unit Files for Rate Hike to Recoup Investment

Zacks Equity Research
·3 min read

Exelon Corporation EXC announced that its unit, ComEd, filed for a distribution rate increase with the Illinois Commerce Commission (“ICC”). The appeal to increase rates has been made after four years to recoup the investments made by the company to strengthen infrastructure and increase resilience of its operations. If approved by ICC, it will result in 20 cents increase in the monthly bill of average residential customers.

Investments made by the company to strengthen the grid, and improve the transmission and distribution infrastructure allowed it to restore power quickly amid extreme weather conditions. ComEd plans to invest $9.7 billion in the 2021-2024 time frame to strengthen operations.

Exelon’s Long-Term Plan

Exelon invests substantially in infrastructure projects, in addition to expanding renewable and fossil fuel generating capacity. After investing $6.5 billion in 2020 in utility operation, it plans to invest nearly $26.7 billion over the 2021-2024 time frame in regulated operations, which will support rate base growth of 7.6% in the 2020-2024 time period.

Management has decided to separate its businesses into two parts: one focusing on transmission and distribution of clean energy and the other concentrating on producing clean energy for customers.

Transition in Utility Space

Utilities operating across the United States have understood the need for reducing emissions in their production process and Exelon is also committed to do the same. It aims to attain carbon neutrality by generating electricity from sources having low carbon emissions. To lower emissions across the entire value chain, the company has a goal to electrify 30% its electric utility vehicle fleet by 2025 and 50% by 2050.

Other utilities like Xcel Energy XEL, The Southern Company SO and Duke Energy DUK, among others, have made long-term plans to attain carbon neutrality by 2050. The majority of the companies are moving away from coal, and starting to produce more electricity from natural gas as well as renewable sources.

Zacks Rank & Price Performance

Exelon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Exelon have outperformed the industry in the past six months.

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Southern Company The (SO) : Free Stock Analysis Report

Exelon Corporation (EXC) : Free Stock Analysis Report

Xcel Energy Inc. (XEL) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

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