Exelon Corporation (EXC) Business Profile

What it does

Exelon is a utility services holding company that transmits and distributes electricity and distributes natural gas through ComEd, PECO, BGE, Pepco, DPL and ACE. It buys power or gas for customers where it has a default-supply obligation, moves electricity over transmission networks, and delivers electricity and gas through local networks to homes, businesses and other users.

The company does not generate the electricity it delivers. Its regulated utilities remain the delivery provider even when customers choose a competitive supplier for electricity generation or natural gas. ComEd supplies northern Illinois, including Chicago. PECO serves southeastern Pennsylvania, including Philadelphia; BGE serves central Maryland, including Baltimore; and Pepco serves the District of Columbia and parts of Maryland. DPL serves parts of Delaware and Maryland, while ACE serves southern New Jersey.

Exelon provides shared legal, human-resources, finance, technology and supply-management services through BSC. PHISCO provides similar operating, engineering, customer-operations, planning, asset-management, system-operations and power-procurement support to Pepco, DPL and ACE.

Calvin G. Butler Jr. has been President and Chief Executive Officer since 2022. Exelon had 20,571 employees at December 31, 2025.

How it makes money

Exelon operates six reportable utility segments: ComEd, PECO, BGE, Pepco, DPL and ACE. Its main economic activity is operating regulated transmission, electric-distribution and gas-distribution systems. State commissions regulate distribution rates and service, while FERC regulates transmission rates and specified parts of the transmission business.

The utilities are allowed, subject to regulatory approval, to recover reasonable operating costs and fair and prudent capital spending for delivery systems, and to earn a return on that capital. Distribution recovery uses a mix of multi-year plans, rate cases and specific regulatory mechanisms across the service territories. Transmission rates use FERC-approved formulas that are updated annually.

Customers in several territories may select a competitive electricity or gas supplier. Exelon still bills and delivers for those customers, but generally does not record the associated commodity revenue or purchased-power and fuel expense. Where a utility supplies the commodity itself, it generally recovers procurement costs with no mark-up or only a slight mark-up. Consequently, swings in commodity sales and procurement costs have no significant impact on net income.

Some operations have decoupling mechanisms intended to remove weather- and usage-driven variation in delivery revenue. ComEd, BGE, Pepco, DPL Maryland and ACE have electric decoupling mechanisms; BGE also has one for gas. PECO and DPL Delaware remain more exposed to delivery volumes.

FY2025 diluted earnings per average common share were $2.73; Q2 2026 adjusted operating earnings were $0.43 per share.

Customers and how it sells

Exelon serves electric and, in three utility territories, natural-gas delivery customers in the Midwest and Mid-Atlantic. Its electric territories cover northern Illinois; southeastern Pennsylvania; central Maryland; the District of Columbia and nearby Maryland counties; parts of Delaware and Maryland; and southern New Jersey. PECO, BGE and DPL also distribute natural gas.

The six electric utilities reported customer totals at ComEd, PECO, BGE, Pepco, DPL and ACE as of December 31, 2025. These totals count a customer receiving both electric and gas service only once. Main cities in the territories include Chicago, Philadelphia, Baltimore, the District of Columbia, Wilmington and Atlantic City.

Customers include households, commercial users and industrial users. Certain customers can buy commodity electricity and, in applicable territories, gas from competitive suppliers, while the utilities continue to provide regulated delivery service. Utilities also retain default-service obligations for customers that do not select competitive suppliers.

Electric delivery demand is generally higher during summer and winter temperature extremes. Natural-gas delivery volumes at PECO, BGE and DPL are generally higher in winter.

Suppliers and costs

Exelon purchases rather than generates the electricity it delivers. Its utilities procure electric supply through contracts directed by state laws and regulatory commission actions, from approved bidders or through PJM-operated markets. PECO, BGE and DPL purchase natural gas from multiple suppliers, with current supply terms of no more than three years.

PECO, BGE and DPL also hold annual firm gas-transportation contracts and access liquefied-natural-gas facilities, propane-air plants and underground storage to supplement supply during winter peaks and temporary emergencies. They have long-term interstate pipeline contracts and may release capacity or bundle capacity with gas for off-system wholesale sales; these sales are described as low-margin and not material.

The largest cost and funding requirement is maintaining and expanding transmission, electricity-distribution, gas-transportation and gas-distribution assets. The business requires significant capital spending, while operating costs include contracted work, depreciation, financing costs, storm restoration, employee costs, purchased power and fuel where Exelon is the commodity supplier, and compliance expenditures. The company also relies on external capital markets and bank borrowings alongside operating cash flow to finance capital requirements.

Competitive position

No company competitors are named in the available company information. Competition occurs mainly in commodity supply rather than in Exelon’s regulated delivery networks: customers in several territories may choose competitive electricity suppliers, and PECO and BGE customers may also choose competitive natural-gas suppliers. Exelon remains responsible for distribution service in its territories, including delivery to customers using competitive suppliers.

The utilities’ authority to serve comes from charters, franchises, permits and certificates issued by governments and utility commissions. Some rights are generally exclusive, while ComEd’s, BGE gas’s, Pepco DC’s and ACE’s are generally non-exclusive. Transmission facilities must provide open access at FERC-approved cost-based rates, and PJM administers regional transmission service and wholesale markets.

Our reading: The regulatory authorizations and physical delivery networks are a strong moat in local distribution because competitors supplying commodity energy still rely on the utility for delivery service.

Our reading: The moat is qualified by non-exclusive rights in several territories, customer choice for commodity supply, and regulatory control over rates, investment recovery and permitted returns.

Our reading: Exelon’s six-territory platform is a moderate operational advantage because shared-service functions support multiple utilities, although regulation keeps the businesses separately governed.

Growth opportunities

Exelon expects approximately $41 billion of investment over the next four years in electric and gas infrastructure modernization, including smart-grid technology, storm hardening, advanced reliability technologies, data-center-related new business and transmission projects. The company expects this program to increase current rate base by approximately $23 billion by the end of 2029.

Management said on the Q2 2026 call that it reaffirmed full-year operating-earnings guidance of $2.81 to $2.91 per share and expected annualized earnings growth near the top of 5% to 7% from 2025 through 2029, supported by 7.9% annualized rate-base growth. Management also said it planned to deploy approximately $10 billion of capital in 2026.

Transmission expansion, large-load connections, storage, virtual power plants, energy efficiency, grid resilience and state clean-energy policies are development areas. Management said its $12 billion to $17 billion transmission opportunity beyond the current plan spans existing infrastructure, data-center-related new business, state policies, generation retirements and competitive transmission. It said 4 gigawatts of projects had signed transmission security agreements backed by $1 billion of collateral.

Atlantic City Electric, with Invenergy, has advanced a 500-megawatt, four-hour battery-storage project in Pittsgrove, New Jersey. Management said the project represents approximately $1 billion of investment not reflected in the plan; a final recovery-mechanism order is anticipated in the first half of 2027.

Structural risks

• Regulatory recovery and returns. Revenue and earnings depend heavily on recovering costs of retail power and gas purchases, transmission and distribution. Rate cases, settlements, prudency reviews and appeals can delay, reduce or disallow recovery and returns.

• System reliability and security. Equipment failures, severe weather, cyberattacks, physical attacks and information-system failures can interrupt delivery, damage assets, require capital and restoration spending, and lead to penalties, legal claims or regulatory exposure.

• Power-resource adequacy. Exelon does not own generation. Insufficient third-party generation or storage, transmission congestion, generator retirements and delayed new resources could limit service, cause outages or constrain economic development.

• Capital execution and financing. The system requires sustained investment. Shortages and long lead times for transformers, conductors, labor, materials and parts, as well as higher tariffs or financing costs, can affect project timing, costs and access to capital.

• Climate, environmental and energy transition exposure. Climate change may damage facilities and change demand patterns. Environmental remediation, emissions requirements, clean-energy mandates, conservation programs and changing natural-gas demand can create costs if recovery is not timely.

• Workforce needs. Transmission and distribution operations require specialized technical and support skills. Strikes, labor shortages, loss of contract resources or difficulty retaining qualified employees can raise costs and operational risk.

Bottom line

Our reading

Our reading: Exelon is a regulated energy-delivery business whose earnings model rests on approved recovery of operating costs and invested capital across six utility territories. Its planned infrastructure spending, transmission opportunities and large-load projects create avenues for rate-base growth, while execution depends on regulatory approvals, adequate third-party power supply and continued access to financing. The business also remains exposed to weather, physical and cyber disruptions, supply-chain constraints and policy-driven changes in electricity and natural-gas systems.