Exelon Corporation (EXC) Earnings Call Transcript & Summary

Hello and welcome to Exelon's Third Quarter Earnings Call. My name is Gigi, and I'll be your event specialist today. [Operator Instructions] Please note that today's webcast is being recorded. [Operator Instructions] It is now my pleasure to turn today's program over to Andrew Plenge, Vice President of Investor Relations. The floor is yours.

Thank you, Gigi. Good morning, everyone. We're pleased to have you with us for our 2024 Third Quarter Earnings Call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer; and Jeanne Jones, Exelon's Chief Financial Officer. Other members of Exelon's senior management team are also with us today, and they will be available to answer your questions following our prepared remarks. Today's presentation, along with our earnings release and other financial information, can be found in the Investor Relations section of Exelon's website. We would also like to remind you that today's presentation and the associated earnings release materials contain forward-looking statements which are subject to risks and uncertainties. You can find the cautionary statements on these risks on Slide 2 of today's presentation or in our SEC filings. In addition, today's presentation includes references to adjusted operating earnings and other non-GAAP measures. Reconciliations between these measures and the nearest equivalent GAAP measures can be found in the appendix of our presentation and in our earnings release. It is now my pleasure to turn the call over to Calvin Butler, Exelon's President and CEO.

Thank you, Andrew. And good morning, everyone. We appreciate you joining us for the call; and are pleased to be reporting a solid quarter of earnings and operational performance, keeping us on track for another year of consistent and stable performance. We reported GAAP earnings of $0.70 per share and operating earnings of $0.71 per share, above the expectations shared on our Second Quarter Call. We delivered another strong quarter of operations, despite significant storm activity in July, with top-quartile or better outage performance across the board. We have also made considerable progress on our 2024 regulatory calendar since the Second Quarter Call. First, ComEd has now received its proposed order in its refiled multiyear rate plan. The order serves as another positive data point that ComEd has filed a compliant plan that appropriately balances the state's desire to continue to deliver reliable and affordable power while making progress on its ambitious energy goals. We now await the commission's final order. And we look forward to regaining the momentum in establishing Illinois as a clear leader in the energy transition. We also reached settlements with key parties in our PECO gas and electric rate cases, which were recommended for approval by the administrative law judges presiding over this case. We appreciate the parties' interest in advancing the critical investments needed to maintain and improve safe and reliable service for PECO's customers, playing a key role in the state's economic development efforts. In the District of Columbia, we continue to anticipate an order by the end of the year, laying the groundwork for continued investment to support a climate-ready grid and the district's clean energy goals. Finally, in September, Maryland initiated a lessons learned proceeding on multiyear plans, completing its hearings earlier this month. In those hearings, each of our Maryland utilities provided an extensive record of the ways in which multiyear rate plans are able to address the demands of a 21st century grid. And we are appreciative that a number of stakeholders, including large customers, chambers of commerce and contractors, filed their support of the construct, but we also acknowledge ways in which we can address certain stakeholder concerns, with the goal of continuously improving on the foundation of transparency and accountability on which the framework is built. A grid of the future cannot rely on the rate making of the past. And ensuring we have alignment and transparency around our investment plans is critical to meeting our state's energy goals, allowing us to execute as efficiently and effectively as possible on behalf of all of our customers. We remain optimistic that we'll find alignment on a solution that can give us all the confidence to keep Maryland moving forward. Let me now turn to our operating highlights for the quarter. On Slide 5, you can see that we are achieving first-quartile performance across most of our key indicators for safety, reliability and customer satisfaction. In both outage frequency and outage duration, ComEd and Pepco Holdings continued to perform at top-decile levels. And that's despite the powerful storms that swept the Chicago area in July and the significant mutual assistance extended throughout the quarter for Hurricanes Beryl and Helene, with Hurricane Milton following directly afterwards. The storms that hit Illinois were record breaking by a variety of measures. In just 2 days, the Chicagoland area experienced double the number of tornadoes that it sees in an average year. And then some of those same crews, along with those at BGE, PECO and our Pepco Holdings utilities, were part of more than 500 field and support personnel to aid in restoring service to customers in Florida, Georgia and West Virginia after a very challenging hurricane season. I do want to take a moment to personally thank our employees for their continued focus and dedication. The ability of our utilities to keep pace with the increasing severity and frequency of extreme weather events can only happen with the dedication of some of the best in the business and with the support of our jurisdictions for the critical investments [ needed ] to maintain reliability and resiliency. As it pertains to safety, after 3 quarters of benchmarking against serious injury performance, we now have all 4 utility operating companies in top quartile. The safety of our employees, contractors and customers is always our highest priority. Finally, on customer satisfaction, performance has improved since last quarter, with BGE now operating in second quartile alongside Pepco Holdings. Both utilities remained focused on initiatives to further improve performance, including enhancing customer communications, streamlining new business processes and additional customer service representative trainings. Now it's my pleasure to turn the call over to Jeanne to cover our financial and regulatory update. Jeanne?

Thank you, Calvin. And good morning, everyone. Today, I will cover our third quarter financial update, along with our financial and regulatory outlook for the remainder of 2024. I will also spend some time highlighting a transmission project at Delmarva Power which is helping to modernize the grid and accelerate an opportunity to save money for our customers. Starting on Slide 6, we present our quarter-over-quarter adjusted operating earnings walk. For the third quarter of 2024, Exelon earned $0.71 per share compared to $0.67 per share in the third quarter of 2023, reflecting higher results of $0.04 per share over the same period. Earnings are higher in the third quarter relative to the same period last year, driven primarily by $0.04 of timing at ComEd on its distribution earnings. After removing the timing at ComEd, across Exelon, we earned $0.03 of higher distribution and transmission rates, net of associated depreciation, which was offset by $0.03 of higher interest expense. After accounting for the timing at ComEd, driven in part by expensive mutual assistance provided to non-Exelon utilities, we delivered earning results in line with the guidance we provided in our prior quarter call. Our year-to-date performance underscores our ability to deliver strong financial results despite mild weather and heightened storm activity throughout the year. As we close out the year in the fourth quarter, we remain on track to achieve operating earnings of $2.40 to $2.50 per share. Our fourth quarter guidance assumes the reversal of ComEd distribution earnings timing, fair and reasonable outcomes for Pepco D.C.'s multiyear rate case as well as the BGE and ComEd reconciliations and normal weather and storm activity. In addition, we reaffirm our long-term annualized operating earnings per share guidance range of 5% to 7% through 2027, with the expectation to be at the midpoint or better of that growth range. Turning to Slide 7. As Calvin highlighted, we have made meaningful progress in our distribution rate cases across our jurisdictions, approaching the final milestones for ComEd's, PECO's and Pepco D.C.s open rate cases. We also filed a historical test year gas distribution rate case in Delaware. I'll begin my remarks by providing an update on this most recent filing, followed by status updates on the remaining rate cases anticipated to reach resolution this year. On September 20, Delmarva Power filed its gas distribution rate case seeking approval of a proposed $35.6 million revenue increase, exclusive of the transfer of $6.4 million of the distribution system improvement charges. The filing represents Delmarva Power's work since its last gas rate adjustment filing in 2022; and reflects investments that help ensure customer reliability and improve service and safety, including work to inspect and proactively maintain natural gas mains, replacing aging cast iron and bare steel pipe, and replace and upgrade equipment at our Wilmington LNG facility. The filing also requests the adoption of a weather normalization rider, which will offer customers more bill predictability as seasonal temperatures grow increasingly volatile. Continuing with Pepco Holdings. On August 30, Pepco and other parties filed final brief on Pepco's Climate Ready Pathway DC multiyear plan, which outlines the investments we will make to support a climate-ready grid and enable cleaner energy programs and technologies. The plan also enhances the reliability, resiliency and security of the local energy grid; and expands affordability assistance for Pepco's customers across the District of Columbia. We now await the D.C. Public Service Commission's final order, which we anticipate before the end of the year; and look forward to continuing the important work needed to enhance customer reliability, advancing economic and work development and further supporting the district goals to be carbon neutral by 2045. Turning to Pennsylvania. Administrative law judges have issued recommended decisions in the PECO gas and electric rate cases. And we are pleased with the recommendation that the Pennsylvania Public Utility Commission accept both settlements filed in August. The proposal for PECO's electric rate case allows for a $354 million revenue requirement increase, excluding a onetime credit of $64 million in 2025. On the gas side, the ALJs -- ALJ proposed a $78 million revenue requirement increase in 2025. While the ALJs ruled against the addition of a weather normalization adjustment, we have filed an exception to address the adjustment, which will now go for commission review and consideration. The adjustment, which has been approved for all other major Pennsylvania gas utilities, is intended to reduce the inherent volatility in customer bills and PECO's recovery of distribution revenue. We expect the commission to issue its final orders by the end of December. Lastly, at ComEd, on October 18, the administrative law judges presiding over the case issued a proposed order on the revised grid plan, for which we expect a final order from the Illinois Commerce Commission in December. The proposed order recommends the commission approve the revised grid plan and associated adjusted revenue requirements for 2024 through 2027 with a $637 million revenue requirement increase and a $3.9 billion rate base increase, with the new rates in effect in January 2025. As a reminder. This construct allows for the recovery of prudently incurred investments up to 105% of the approved revenue requirement and provides that certain investment categories such as storms and new business are excluded from the 105% threshold. We are appreciative of the hard work put in by all parties to craft a compliant and balanced credit plan, which has resulted in strong alignment up through the proposed order. And we look forward to the commission setting the path for the next 3 years of investments during a critical time in the industry. With final orders anticipated to be issued for ComEd, PECO and Pepco D.C. by year-end, approximately 90% of our rate base will have established rates or known rate mechanisms in place through 2026 or 2027, allowing us to focus on plan execution and the strategic discussions required to support growing electrification needs; and the necessary expansion of clean, reliable generation in our states. As always, additional details on the rate cases can be found on Slides 20 to 30 of the appendix. That brings me to Slide 8, where I want to take a moment to highlight an example of the work we've been doing to modernize the transmission system. Earlier this year, Delmarva Power began work to rebuild the Vienna-to-Nelson 138 kV transmission line, a 14-mile circuit that extends from the Vienna substation in Dorchester County, Maryland to the Nelson substation in Sussex County, Delaware. The project replaces over 100 wooden 60-year-old structures with steel poles and upgrades our equipment to 230 kV standards. The new infrastructure will also be able to withstand winds over 110 miles per hour, is constructed above flood zones and includes an underground transmission lead-in, enhancing overall system resilience. Currently, the project is on track to be placed in service nearly 2 years ahead of schedule in December. Completion of the project will enable the Indian River 410-megawatt coal fire generating unit to retire, eliminating the collection of the RMR and saving nearly $100 million across 551,000 customers in that 2 years, which is over 1.5x greater than the installed cost of the project that will be collected over decades. Alongside lower bills, these customers will also experience better system reliability and resiliency from the elimination of capacity constraints. The project also emphasizes our commitment to workforce development, with 13.5 million of the spend on the project with diverse suppliers, supporting local economic growth and partnership with the jurisdiction we serve. These efforts highlight our dedication to enhancing customer value while fostering local economic growth. And they are a testament to our strategic efforts to maximize the impacts of our investments modernizing the energy grid while mitigating resource adequacy constraints and supporting state goals to decarbonize. The project also highlights the power of our platform to efficiently execute on capital plans for the benefit of our customers. This is just one example of the $9.7 billion we have in our capital plan for electric transmission investment through 2027. And it highlights why transmission will continue to be an area of significant opportunity to support our customers going forward. Finally, I will conclude with updates on our financing activity on Slide 10 (sic) [ 9 ]. We continue to project a cushion of approximately 100 basis points on average, over the planning period for our consolidated corporate credit metrics, above the downgrade threshold of 12% specified by S&P and Moody's, demonstrating our commitment to maintaining a strong balance sheet. And while we continue to advocate for language that incorporates the corporate alternative minimum tax in the final treasury regulations, recall that our plan incorporates the assumption that the final regulations will not allow for repairs, consistent with the proposed guidance released in September. If implemented in a way that mitigates the cash impact, we'd expect an increase of approximately 50 basis points to our consolidated metrics on average over the plan, putting us in the higher end of our targeted 100 to 200 basis points of cushion over the planning period. From a financing perspective, we have successfully completed all of our planned long-term debt financing needs for the year, with PECO raising $575 million in the third quarter. The strong investor demand we continue to see for our debt offerings is supported by the strength of our balance sheet and by the low-risk attributes of our platform. Investor confidence in our offerings, along with our pre-issuance hedging program, positions us well as we continue to seek out the most efficient ways to finance the energy transformation for our customers and investors. We've also successfully completed our planned $150 million of equity issuances for 2024 via our ATM. There has been no change in our guidance to issue a total of $1.6 billion of equity from 2024 to 2027 to fund our current $34.5 billion capital plan, with the remaining balance expected to be issued ratably from 2025 to 2027, approximating $475 million on an annual basis. Thank you. And I'll now turn the call back to Calvin for his closing remarks.

Thank you, Jeanne. As you can see, we've come a long way toward delivering on our priorities and commitments for 2024, with the team highly focused on continued execution and operational excellence as we approach the final months of the year. We have maintained top-quartile performance despite a tremendous amount of storm activity this year. The bar keeps getting set higher and we keep meeting it. We are approaching final orders for ComEd and PECO, with path towards reasonable, supportive outcomes in both, covering approximately 50% of our rate base, with another approximately 40% covered by known or established rate-making processes as far out as 2027. And we appreciate Maryland acting quickly to address its lessons learned process so that we can agree on an approach that allows all stakeholders input into how customer dollar should be invested to meet the state's energy goals. We are on track to invest $7.4 billion of capital in 2024 for the benefit of our customers and earn a fair return on equity in our targeted 9% to 10% range, with our planned financings for the year already complete. This will allow us to deliver in the $2.40 and $2.50 operating earnings guidance range that we laid out at the beginning of the year. And most importantly, we have maintained our steadfast commitment to customer affordability both through constant vigilance in developing and adopting cost-saving measures as well as in our legislative and regulatory advocacy during a very dynamic time in the industry. As the largest utility by customer count, serving some of the largest cities in this country, our primary mission is to provide reliable, resilient and affordable power to everyone [ equitably ]. The ability to invest in the grid is integral to that mission. It, of course, supports reliability where demands continue to increase due to more severe weather, increased electrification and an evolving generation supply mix. And those demands have only been amplified by the growth of artificial intelligence. At the beginning of the year, we indicated that we had 6 gigawatts of high-probability data center load in our territories. That's now at 11 gigawatts, which is indicative of the incredible opportunity this sector has ahead, but investing in the grid can also contribute to affordability as well. The transmission project that Jeanne highlighted is just one example of many where our grid investments can create savings for our customers. The importance of the grid reinforces the value of coordinated, thoughtful and efficient investment; and thus the benefit of transparent, forward-looking planning and rate making. It also underpins our policy advocacy. It has driven our focus to ensure co-located load arrangements do not compromise reliability, or avoid the costs of relying on the grid. And it's why we are actively engaging with peers and policymakers on how our state and PJM can ensure generation continues to be as reliable and as affordable as possible. All of our actions are focused on enabling the necessary investment in a grid that we all rely on and that is indispensable to the economic vitality of our jurisdictions, and the impact of that partnership is clear. In September, Site Selection magazine named ComEd and PECO 2 of the top 20 utilities in economic development in the country, their 10th and 14th time receiving that award, respectively. 2 weeks ago, the District of Columbia's chamber of commerce named Pepco its business of the year. And Exelon Utilities were just named as recipient of 3 more awards under the DOE's grid resilience and innovation partnership program, bringing our total direct funding under that program to $330 million. Again, we have the honor and the privilege to serve over 10.5 million customers. And they are counting on us to dependently deliver safe, resilient and affordable power during this energy transformation. Gigi, we are now ready for any questions from the audience.

[Operator Instructions] Our first question comes from the line of Nick Campanella from Barclays.

So I just wanted to address upfront because I know we've gotten some questions. Just you previously said midpoint or above for '24. Is that kind of still the case today? And how should we kind of think about that?

Yes, Nick, good question. So we started that language as part of our long-term guidance when we were trying to show 5% to 7%. And the combination of the years may be different. And we give you where we end up in the year, but that -- over that time period, right, yes, as always, we aim for midpoint or better. And I would say, for the current year, that also continues to be our goal, right? When we give you a guidance range, our goal is always to be at the midpoint or better. And so I just -- yes, that's how we're still thinking about it and what we're still working towards. The last 2 years, that's what we've done. And we're working hard to make sure that we continue that trend.

Okay, great. So it's been a few months since we've had the PJM auction. I'm sure you've had some more kind of time to digest it. Just there has been kind of discussion potentially in the legislative arena to address solutions for new generation, so as you kind of flip the script into '25, I heard your comments on focusing more on strategic initiatives. Just how does this kind of play out in your mind? What will you be kind of advocating for specifically to fix the bill issue that's kind of growing in PJM?

Nick, thank you. This is Calvin. Let me just -- I'll approach this in a couple of ways, Nick. And you make sure you let me know if I get directly to your question. First off, I do believe, we believe that PJM's request to delay the capacity auction does reinforce the concerns over whether increasing prices are efficiently addressing our electricity demand needs and sends a clear message that reform is definitely needed. So that was the first step and an acknowledgment that something has to be different. And I do appreciate PJM's leadership to put forward interconnection [ and ] various capacity and market reforms. And it's just another example that the PJM stakeholder process is just not working. And we will continue to support them as well as other federal and regional agencies to get that done. So that's first and foremost. It would not surprise you that, as a T&D-only company not owning generation, our voice is unique in this discussion. And we've been working with all of our governors and regulatory bodies on how to address this issue and what needs to be done. And I think you've seen the magnification of this issue, Nick, with the letter that the governor has most recently sent, 2 page, PJM stating that something needs to be done not tomorrow but today. And we want to be part of that solution and we will be part of that solution. And one of the things we are always focused on, and I think we start with this, Nick: It's all about reliable, resilient and affordable energy. What can we do to be part of that mix to ensure that takes place? And as I said in my opening remarks, everything we do is about providing that in an equitable manner to all of our customers across the footprint. And we will continue to work with that. And I think you're seeing that momentum going. Now people are talking about whether you're reregulating generation and so forth. If that's part of the solution, we'll be at the table figuring out how that happens, but we're not advocating for that. What we're advocating for is reliable and affordable energy. And that's our foundation of what we're talking about.

I certainly appreciate that. And I think that's just the direction that we all want to see it going, but I guess people just -- I think we all acknowledge it takes a long time to facilitate this new build that could potentially supplement this higher-demand outlook. And I guess, just as you look at the build trajectory, do you still kind of feel comfortable with the rate base growth that you've outlined across your jurisdictions, specifically in some of those ones like BGE and otherwise?

I do. I do. Because if you want to accomplish that goal of what we were just talking about and reliable and resilient and -- you can't do without investing in the grid. A matter of fact, Nick, I would tell you that there's a cost of not making these investments because all of our jurisdictions have a clean decarbonization goal to it. And you know you can't get there without investing smartly in transmission. And you've seen the, I mean, weather conditions that all of our jurisdictions are facing. I talked about Illinois with the number of tornadoes. If you even take a look at what -- Jeanne's transmission project that she highlighted: It's the conversion of wooden poles to steel poles because of the wind pressures that all of our system is under. So you can't get there without the investment. What we have to do is make sure it's smart investment because -- I believe the cost of not doing it is -- far outweighs the cost of just systematically doing it, but that goes into how we work with those regulatory bodies and ensuring that the conversations are happening upfront and not after the fact. And that's why I'm leaning into the multiyear plans, because whether you like them or not, if you're not having thoughtful and proactive conversations, it becomes more expensive on the back end. So to your direct question, yes, the grid investments are needed. And yes, they will need to continue. We just have to work with everyone to make sure we're doing it in the right way. Colette, do you have anything you'd like to add to this?

Thank you, Calvin. And Nick, Colette Honorable here. I'm EVP of Public Policy and Chief External Affairs Officer. I would add to Calvin's comments that -- and you've heard him allude to the fact that we are unique. We are the nation's largest utility. We are a pure transmission and distribution energy delivery company, and that gives us a lot of optionality. It gives us the ability to be strong partners with policymakers, with members of the legislature, with our regulators to help find and support the solutions that our customers need. So while we will continue to be focused on the fundamentals, reliability, affordability, resilience; and being a leader in the clean energy transformation, we also are leaning into PJM, for instance, on fashioning solutions that help us do this work more efficiently and more quickly, for instance. PJM has been focused on ways to find reforms to help us either get more generation, more transmission. We support a shovel-ready construct, where we are looking at how we can move these projects through the queue more quickly to help with the addition of new generation. We will also continue to be a leader in the PJM stakeholder process on a number of pricing reforms. So we applaud the effort of the governors in elevating the capacity auction issue as one that needs attention from everyone right now. And we'll continue to be a leader in that regard.

Thank you, Colette. And I think, Nick, to your direct question on how we're engaged with PJM: Today, all of our CEOs of our operating companies are participating in the PJM meeting that's taking place right now. And they're engaged in that because we know that their voice matters. And they're sitting there representing their jurisdictions in a very proactive way.

We'll see you in Florida here shortly.

Looking forward to it.

Thanks, Nick.

Our next question comes from the line of Julien Dumoulin-Smith from Jefferies LLC.

So a couple of things real quickly here. First off, starting with Maryland here. I mean I know you gave some commentaries in the prepared remarks, but just, at the end of the day, even if you didn't have an additional multiyear plan and -- as it's at least structured today, I mean, how would that change your plan, right? I mean it just ultimately falls back to more discrete spending plans, but does that change anything in aggregate, if you will?

Yes, let me jump in there first, Julien. And then I'll turn it over to Jeanne. Let me just be very clear. The multiyear plan was only implemented, I think, in 2020, so we've been operating in Maryland with traditional rate making well before then. And the organization was doing well. When I was CEO of BGE, we were filing annual rate cases and we were being effective in getting it done. What we have shared and I continue to share is that the MYP is the best way to go because of the transparency and the affordability piece, because what we do well is we effectively build things and keep things in-line. And working with the stakeholder process in a collaborative manner allows that to happen and ensures everyone's goals are met. So to your direct question. We will continue to advocate for it, but we know how to move forward on traditional rate making if that's what they require. It would not be something that we will ever say is the best thing for that state to do, but it is something that we're prepared to do. And we will reallocate our capital [ and where ] it comes to other jurisdictions because we have to continue moving forward. So we're not going to miss a beat, but it will require us to reassess where we go and how we invest capital across our systems. We've demonstrated that we know how to do that. When you look at what happened in Illinois: In 30 days, we've reallocated capital to other parts of the system. And we'll continue to look at those issues. Jeanne?

Yes. No, I think that's right. I mean I think, if you look at all of these proceedings coming to conclusion here in the fourth quarter, whether it's ComEd's grid plan, the Maryland lessons learned. We're getting our D.C. order. That's the benefit of having the size and scale, right? We get to then reflect kind of the new investments related to those orders but then also layering capital where we know we need to invest. When you saw our last 4-year update, we went up $3 billion over a 4-year period. I think 90% of that was transmission. There's a lot of transmission work we need to do, so we'll manage all of that. We'll manage the portfolio and we'll meet our jurisdictions where they are.

Yes, absolutely. I appreciate the details there, appreciate it. And Jeanne and Calvin, can you speak a little bit to the transmission backdrop? I mean you referenced in the remarks, again, this $9.7 billion number, but as I look at it, clearly it seems like there's a number of leading indicators that would suggest that number could go materially higher, right? We've seen some sense of the PJM RTEP thus far related. We've also got MISO really pushing a much more expensive program conceivably that can weave into your plan as well, Pennsylvania also. Do you want to speak a little bit to each one of those and just how that fits against what you have at least currently stated as last updated at $9.7 billion?

Yes. I think, at a high level, right, you're going to see that trend continue, the increasing need for more transmission investment. I think there's at least 3 themes there, probably several more, but there is just core work across our jurisdictions that we need to do for reliability, resiliency. We talked about and Calvin reiterated, right, that even in the Delmarva project we just talked about, the system needs to be modernized against the increasingly volatile weather. So whether it's wood to steel poles, elevating substations for flooding, making sure they can withstand hurricane category 4 winds, all of that, security is becoming increasingly important for substations, so that's just core work across our 4 operating companies we know we have to do. And that's continuing to increase. I would say a second key theme is the changing generation mix. You've got retirements. We've talked about the Indian River RMR today. That transmission was to replace that and save our customers money. Brandon Shores is another one. And so you've got retiring generation, which needs to have investment in transmission to accommodate that, but then you've got new generation. When you look at the Mid-Atlantic, right, Maryland, New Jersey, Delaware, you add up the goals in the states there. You're looking at maybe 20 gigawatts of offshore wind. We're not going to build that offshore wind, but we will build the transmission to support that new generation and we're excited about that, right? We all know we need more generation and we need all types of generation. So that's another key theme, the changing generation mix. And then, of course, right, the theme of new load. When we updated that capital plan that I mentioned, the $3 billion, 90% of it was transmission. $700 million was in ComEd, right? And ComEd is where we are increasingly seeing that data center growth. You heard Calvin talk about going from 6 gigawatts of high probability to 11 gigawatts just this year alone. The work we need to do to accommodate that high-density load continues not only in ComEd but across PJM, right? Last year, we talked about the $1 billion for the RTEP Window 3 related to Northern Virginia data centers. So I think that increasingly becomes a trend. What's not in our plan? You mentioned PJM's Window 1 this year. We think there's opportunity there probably more in the couple-hundred-million size, but then outside of PJM, MISO is doing its tranche 2. That is another potential opportunity for us that's not in the plan. There are pieces of those solutions that cross in our territory. And MISO has indicated a willingness to work with PJM operators, so I think no shortage of opportunities, a lot of strong themes, which just kind of continue to build that momentum for more investments. And what we love about them is often those investments help save our customer money when you think about the alternatives.

Our next question comes from the line of Shar Pourreza from Guggenheim Partners.

So Calvin, you guys made a series of 205 filings in late August sort of seeking to clarify the tariff treatment of network load. Can you just talk a little bit more to what specifically drove those filings within your service territories and what you see as kind of the pathway forward? Procedurally, what are the pathways?

Yes, absolutely. So let me just be very concise, try to, anyway, Shar, because there's been a lot of activity. And to frame it on the why and the what, right: So first off, as you know, the regulatory conversation was initiated when AEP and ourselves really jumped in and protest the Talen ISA, which is -- in its most recent amendment was the first-time deceleration that the co-located load was not network load, which implies that it will bear no share of the cost of service associated with being part of the grid. Now we are happy that FERC stepped in and really initiated a technical conference with the commissioner, so -- and as you know, Shar -- which will begin on November 1. So that's a big step because we do not believe that policy should be determined by one-off contracts. And therefore, our voice -- even though it was not in our service territory, we saw [ some things ] beginning. And we needed to say we have questions and we need to get clarity. We filed our 205s for each of our utilities, with the goal of having guidance from FERC by early December, so that the rules of the road going forward are clear. And we needed that because we were being asked to do things that were contrary to the support and the reliability of the grid. And we cannot have the cost, the potential cost, shifting to other customers, so what we were doing in those 205s is saying, "Hey. Give us clarity. Answer the questions sooner rather than later so we know how to proceed." And that was the purpose of them and that's why we did them. And Colette, please...

Thank you. And Shar, to your question about the 205s. So following the intervention in the Talen ISA docket and now that FERC has set the technical conference, as Calvin said, we certainly applaud that. It's a welcome development, but the outcoming and timing of the process is still uncertain, so we don't know what will happen as a result of the technical conference. And we still need clarity as we engage with a number of our large-load customers. And to be clear: As Calvin mentioned, ComEd and PECO in particular, [ at ] 2 of the site selection utilities, we are seeing a lot of activity. And so we need clarity sooner rather than later that will aid us in moving ahead with confidence and so that all of the parties know the rules of the road. So we filed those 205s in each -- for each of our utilities, with the goal of having guidance from FERC by early December.

And as you know -- thank you, Colette. And as you know, in the technical conference, Shar, FERC did not have a time line in which they must act. So this asking for the summer ruling by December, early December, was really the catalyst to say, look, let's get that clarity so we can all move forward.

Got it, yes, you pressing a little bit. Okay, got it. And then just, Calvin, any work in Illinois regarding the CMC roll-off? The curves have come off a bit, which is good, but I guess, is the IPA kind of taking the lead here?

Yes. So I'll turn it over to Jeanne, as the former CFO of ComEd, and because she's intimately involved with this. Jeanne?

I mean I think I would just bucket it in the same way I think about all of our jurisdictions, right? The sooner we can get to solutions around securing reliable generation at affordable prices, the better. And so I think what's been -- while the affordability issues from the capacity auction are a bad thing, right, a good thing is that the conversations are starting earlier because of that, right? There's a recognition across all of our states, including Illinois, that we need to come up with solutions to address that. So we have those through '27, as you mentioned, but those conversations are starting now to make sure that customers have safe, reliable and affordable generation in the State of Illinois.