Exelon Corporation (EXC) Q4 2025 Earnings Report, Transcript and Summary

Hello, and welcome to Exelon's Fourth 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 Ryan Brown, Vice President of Investor Relations. The floor is yours.

Great. Thank you, Gigi. Good morning, everybody. Thank you for joining us for our 2025 fourth 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'll 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. I'd 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. With that, it's now my pleasure to turn the call over to Calvin Butler, Exelon's President and CEO.

Thank you, Ryan, and congratulations on the new role. And good morning to everyone. We appreciate everyone joining us today for our fourth quarter earnings call. As we reflect on another successful year and celebrate the close of our 25th anniversary, we're proud to once again deliver exceptional results for our customers, employees and investors. Across Exelon, our companies bring more than 800 years of collective experience. Even with that long view, this moment stands out. The industry is changing at a speed and scale rarely seen. With that comes both great responsibility and opportunity. I've never been more confident that Exelon has the people, the discipline and the platform to continue to lead the energy transformation and meet this unprecedented demand. This is underscored by our recent results. As you saw from this morning's release, we delivered another strong year. For 2025, we reported adjusted operating earnings per share of $2.77, delivering above expectations. This continues our track record of exceeding the midpoint of guidance in each year as a stand-alone utility. And since 2021, we've achieved a 7.4% annual earnings growth rate and 8% rate base growth through 2025, highlighting our ability to navigate changes and consistently execute. This steady performance is a direct result of the continued focus on affordability and our ability to deliver investments that directly benefit our customers, providing above-average performance at below-average rates. It was also another exceptional year of operation. Exelon continues to set the standard for the industry. Our utilities maintained top-quartile reliability metrics once again, and we're ranked 1, 2, 4 and 7 amongst our peers based on 2024 benchmarking data. This level of performance is nothing new. In fact, we've delivered top-quartile reliability for over a decade. It's who we are and it's center to our mission. But don't get me wrong, consistency does not come easy. It's the direct result of a culture of continuous improvement, innovation and a steadfast focus on targeted investments that maximize value for our customers. These investments not only prevent outages and deliver best-in-class service, but they directly benefit local economies, with every $1 million invested creating 8 jobs or $1.6 million of economic output. I am truly humbled by the commitment and sacrifice of our employees that make this level of service possible. Recently, their dedication was on full display during Winter Storm Fern. Despite record-low temperatures, our investments withstood heavy snow and icing across our territories, maintaining strong reliability with only minimal disruptions. Fewer than 1% of our customers experienced outages even as an extreme weather impacted our regions. This reflects the tremendous work of our employees over the past decade to invest in the safety, reliability and resiliency of our system. The performance is remarkable when accounting for the scale of the storm as well as the demand put on the grid. Fern resulted in the PJM RTO experiencing 5 days in a row of peak load ranging from 135 to 140 gigawatts, reaching 97% of the all-time winter peak. Our investments combined with our employees' around-the-clock dedication, kept nearly 11 million electric and gas customers safe and warm when they needed us most. I'd like to express my gratitude to all of our employees who have supported storm restoration efforts locally and afar. Thank you for all that you do. Over the last quarter, we also made significant progress on the regulatory front. As Jeanne will detail shortly, it's been an active few months. We've achieved several key milestones, including final settlements for the Atlantic City Electric and Delmarva gas rate cases, reconciliation orders at ComEd and BGE, and the filing of ComEd's second multiyear grid plan. This progress is built on a foundation of hard-earned trust. We work collaboratively with stakeholders and our communities to ensure that our investments align with the specific goals and needs of the states we serve. Looking ahead, we now expect to invest $41.3 billion of capital to support our customers, with more than 70% of the plan-over-plan increase driven by transmission, where we continue to have a unique opportunity and significant momentum. Our size and scale, multistate footprint and operational expertise position our utilities to capitalize on the growing need for transmission investments in reliability and resiliency, accelerated by the pace of new business growth. This progress is further evidenced by our success in the recent PJM Reliability Window results, where $1.2 billion of incremental Exelon investment was recommended, including a jointly developed solution with NextEra. This comes on the heels of other recent large-scale transmission awards, including Brandon Shores, Tri-County and the MISO Tranche 2.1 project. You should expect us to be active in future windows within PJM and other ISOs, leveraging our competitive advantages where appropriate. And we continue to see robust demand in our jurisdictions with anticipated load growth exceeding 3% through 2029. This is further reinforced by our large load pipeline, which is now further supported by an increasing number of signed transmission security agreements or TSAs. Overall, our pure transmission and distribution capital plan is unique and truly differentiated. It's highly diversified across 7 regulatory jurisdictions, including FERC, with no 1 jurisdiction greater than 30% and no single project comprising more than 3% of the plan. It's also actionable. We have line of sight to each project that comprises the $41.3 billion, with a significant pipeline of incremental projects over the next 5 to 10 years and the size and scale to execute efficiently. With continued returns on equity in the 9% to 10% range, we expect rate base growth of approximately 8% and annualized earnings growth of 5% to 7% through 2029, with the expectation of being near the top end of that range. We will continue to fund investments in a balanced and disciplined manner that maintains a strong balance sheet. And for 2026, we are initiating operating earnings guidance of $2.81 to $2.91 per share. Our continued progress is clearly demonstrated by the scorecard on Slide 5, where we can once again -- where we've once again met or exceeded every goal we set at the start of the year. At Exelon, commitments made are commitments met. That discipline and credibility define who we are and shape how our teams operate every day. In addition to strong operational and financial performance, we continue to lead on customer affordability, which remains a top priority. We continuously drive costs out of the business through efficiency and innovation, maintaining a track record of cost growth well below inflation. In the past year, we executed a $60 million customer relief fund to support low and moderate-income customers facing higher supply costs. We advanced innovative TSAs that prioritize large loads while ensuring existing customers remain protected. Our award-winning energy efficiency programs continue to deliver meaningful savings. We expanded connections of distributed resources, giving customers more ways to participate and save. And we are steadfast in introducing innovative tools and processes to connect customers to low-income assistance. We continue to focus on actions like these that are directly within our control in addition to delivering safe, reliable energy while keeping bills as low as possible. In the meantime, we are also actively partnering with federal, RTO and state leaders to address high supply prices and emerging reliability risks. The supply challenge is real, but not insurmountable. We're encouraged by the growing national focus, including the recent announcement from the White House and our state governors advancing policies to incent new generation and improve affordability. As we said before, we firmly believe it's going to require an all-of-the-above strategy that includes utility-generated, demand side and merchant solutions. This was further supported by the study released last week by Charles River Associates. The report is an urgent call to action, highlighting the risk of the status quo and the cost and reliability benefits of utility-generated energy. Specifically, they note that utility-generated power could have saved total PJM customers $9.6 billion to $20 billion in the 2028/2029 delivery year, while reducing the risk of potential future outages from energy shortages by approximately 85%. We are committed to continuing to work with all stakeholders to advance policies that strengthen energy security as quickly and cost-effectively as possible. Finally, I want to take a moment to reiterate why our platform and approach is best positioned for the years to come. As highlighted on Slide 6, our foundation is based upon a customer-focused and industry-leading operations. With our size and scale, constructive regulatory frameworks and diversified footprint and capital plan, we have a disciplined and defensive foundation that is resilient. Yet at the same time, we're well positioned to capture credible, meaningful opportunities for sustainable growth. We're excited about where we're headed. Our platform is designed to deliver an attractive risk-adjusted return and long-term value for all stakeholders. I'll now turn the call to Jeanne to dive deeper into our 2025 results and share more details on our updated long-term plan. Jeanne?

Thank you, Calvin, and good morning, everyone. Today, I will cover our fourth quarter and full year results, key regulatory developments and updates to our financial disclosures, including 2026 guidance. Starting on Slide 7, as Calvin noted, since becoming a stand-alone utility, we have continued to execute, and 2025 adds to that track record. In 2025, we delivered $2.73 per share on a GAAP basis and $2.77 per share on a non-GAAP basis for the full year, reflecting strong year-over-year growth. For the quarter, Exelon earned $0.58 on a GAAP basis and $0.59 on a non-GAAP basis. Full year earnings above our guidance range primarily benefited from favorable weather and storm conditions and the resolution of certain regulatory proceedings. Throughout the year, we also managed costs well across the platform, ensuring we can accommodate a range of outcomes while monitoring regulatory activity and weather in the fourth quarter. Quarter-to-date and year-to-date drivers relative to prior year can be found on Appendix slides 37 and 38. Turning to Slide 8, we are initiating 2026 operating earnings guidance of $2.81 to $2.91 per share. With much of our growth aligned with completed rate cases and continued strong cost management, the 2026 implied midpoint relative to the midpoint of our 2025 estimated guidance range is ahead of previous disclosures, reflecting midpoint-to-midpoint growth above 6%. Our performance in 2025 underscores our ability to deliver strong financial results amid uncertainty, all while operating at industry-leading levels and innovating to find new and creative ways to support our customers. We've executed operational efficiencies, capitalized on our growth opportunities and identified more ways than ever to support our customers. We look forward to furthering this progress in 2026. Looking ahead to the first quarter, we expect earnings to be approximately 31% of the midpoint of our projected full year earnings guidance range, which is in line with historical averages. This accounts for completed regulatory filings, anticipated revenue shaping and O&M timing as well as normal weather and storm conditions throughout the quarter. Turning to Slide 9, we executed another busy regulatory calendar in 2025, marking significant milestones and reaching final resolution on open reconciliations and key rate cases, providing cost recovery for the next several years. Starting with Atlantic City Electric, in November, the New Jersey Board of Public Utilities approved a settlement supporting the recovery of $54 million associated with grid improvements and modernization investments in line with New Jersey's Energy Master Plan and the Clean Energy Act, at a 9.6% ROE. New rates went into effect at the beginning of December 2025. Also, in December, the Delaware Public Service Commission issued a final order on the Delmarva Power gas rate case, approving a settlement that supports the $21.5 million revenue requirement and 9.6% ROE, recovering various reliability investments and LNG plant upgrades, which protect customers from price volatility during peak periods. Rates went into effect at the beginning of this year. In addition to closing out base rate case activity, we also received final orders in our open reconciliations at BGE and ComEd in December, now gaining clarity on the recovery of our investments from 2023 and 2024. While we were disappointed to receive about half of the BGE reconciliation, we realigned capital accordingly. Finally, moving to our current regulatory activity for 2026, the Pepco Maryland base rate case continues to progress according to the procedural schedule, with intervenor testimony filed at the end of last month. A final order is expected in August this year. In December, Delmarva Power filed an electric base rate case in Delaware, requesting a net revenue increase of $44.6 million to support system reliability investments, storm remediation and storm damage costs. DPL also requested to implement a bill stabilization adjustment, which will offer customers more predictability as seasonal temperatures grow increasingly volatile. DPL expects to be able to implement interim rates in effect on July 9. Finally, on January 16, ComEd filed its multiyear grid plan in Illinois, requesting an approval of an investment plan covering 2028 through 2031 in support of the priorities laid out in the state's CEJA and CRGA bills. A final order is expected in December, and the company expects to file its next rate filing in 2027. On Slide 10, we provide updated utility CapEx and rate base outlook through 2029. We plan to invest almost $10 billion in 2026 and a total of $41.3 billion over the next 4 years, an increase of $3.3 billion or 9% from the prior 4-year planning period. Incremental investments reflect updates to align with recently approved rate cases and jurisdictional priorities and an increase in transmission investments. Of the overall increase, approximately 70% or $2.3 billion is attributable to incremental transmission investments driven by the structural trends that underpin the energy transformation in our jurisdictions: increased demand for high-voltage investments and capacity expansion to support large load growth, evolving generation supply and the reliability and resiliency needs of grid customers to withstand increasingly volatile weather. In fact, the majority of the additional transmission relates to continued system performance and capacity expansion across our platform, supporting incremental data center load in addition to the gradual replacement of an aging network. Our plan also includes an additional year of investment of our 2 largest transmission projects, Brandon Shores and Tri-County, going into service in 2028 through 2030, along with the early spend of the MISO Tranche 2.1 project which goes into service in 2034. Our annualized rate base growth of 7.9% over the next 4 years reflects an increase from the prior year plan, with a projected addition of nearly $23 billion in rate base from '25 to '29. Having executed within 2% of our capital plan since 2023, we are confident we will execute this next stage of growth, driving progress towards economic and energy goals and always prioritizing our customer needs in everything that we do. Moving to Slide 11. Our size and scale, award-winning reliability and expertise in owning and operating 765kV lines uniquely position us to capitalize on additional transmission opportunities that enable us to grow our transmission rate base CAGR by over 15% from '25 through the end of the guidance period. Coupled with our strength in execution, we now have line of sight to an additional $12 billion to $17 billion of transmission opportunities over the next decade, that strengthen and lengthen our plan. Of which, over 60% includes projects associated with our existing infrastructure, supporting continued reliability, generator deactivations, and providing additional operational flexibility and efficiency. This upside also includes an estimated $1 billion of transmission associated with high-density load projects, with signed TSAs, where we now have a foundation for additional certainty in our pipeline as agreements are presented to customers coming out of our Cluster Study process. We also remain optimistic about the work associated with MISO Tranche 2.1 with over $1 billion of investment in our ComEd service territory, which is now awaiting a cost allocation filing at FERC. Beyond these opportunities, we anticipate additional investment required to support our states' public policy goals, particularly as our jurisdictions assess energy security and economic development needs. For example, achieving CEJA's goals amid growing economic development in Illinois will likely require billions in transmission investments. Finally, as we discussed in prior quarters, success in winning competitively bid projects offer additional upside. From our success in winning the Tri-County project to the $1.2 billion in Exelon investment PJM has recommended in this recent window, our size, scale and expertise position us well to pursue competitive opportunities outside of our service territories within and outside of PJM. Our ability to play with $10 billion of capital annually over the next 4 years is only possible with a rigorous focus on cost management and delivering value through those investments, supporting customer rates at -- supporting customer bills at rates 19% to 20% below national averages. This focus is saving our customers approximately $580 million in O&M annually relative to what it would have been growing at a standard inflation level over the last decade. We feel confident we can continue to keep our expense growth well below inflation levels, demonstrating nearly flat expense growth from '24 to '26 and targeting no more than 2.5% adjusted O&M growth through '29. As we talked about last year, our institutionalized team and our One Exelon culture are committed to delivering value. We have taken advantage of our focused operations along with our size and scale to continue to standardize and streamline our structure and operations. Driving out $580 million in the annual O&M savings is no small task, but it's something our customers and shareholders have come to expect. Exelon's unique platform and industry best practices enable us to build upon these savings with line of sight to additional opportunities. As investment needs grow to meet unprecedented load growth and reliability needs, our customers remain our top priority. Since 2021, Exelon's portion of the average customer bill as a percent of median income has remained relatively flat, growing only 10 basis points, while maintaining top-quartile reliability which saved customers $1 billion in avoided outage costs last year alone. We've reduced annual customer interruptions by nearly 2 million since 2021 and made significant economic impact in our communities. Since 2021, we've employed 20,000 people, sustained 50,000 jobs and have fostered nearly $60 billion in economic activity in our communities. Bringing value to our customers is foundational to what we do and it's why we invest in the grid. That's why we've committed to keeping our O&M cost relatively flat from '24 to '26 and in partnership with our jurisdictions, have committed to support our customers through nation-leading programs and advocacy efforts. Conversely, the supply side of the average monthly residential bill in the Mid-Atlantic has increased up to 80% or more over the last 5 years. Customers are now paying more for less. Since July of 2024, PJM customers have paid more than $32 billion as supply in the market declined 1.2 gigawatts. That's why we continue to be at the forefront for advocating for our customers across federal, PJM and state levels, ensuring that every dollar our customers spend can be tied to additional value they receive. We are pleased that federal discussions propose the extension of the PJM capacity auction collar, saving customers tens of billions of dollars through 2030. But our advocacy efforts don't stop there. We are committed to advocating for other policies, such as interconnection queue and rate design reforms that protect customers and support economic development. Our first-of-its-kind transmission security agreements filed at FERC do just that, providing a clear path to interconnection while protecting existing customers. We believe all solutions are required to support energy security and drive affordability. This includes encouraging state procure solutions such as utility-generated power, which can bring certainty that the supply will be there, offer our states control and ultimately benefit our customers. Turning to Slide 14, with prudent O&M spending and $41.3 billion of projected capital spend driving 7.9% rate base growth, along with earning ROEs of 9% to 10%, we are projecting compounded annual earnings growth near the top end of 5% to 7% from our 2025 guidance midpoint of $2.69 per share through 2029. We continue to build momentum across our jurisdictions as we make progress on Pepco and Delmarva rate cases, the ComEd grid plan and as BGE prepares to file later this year. We look forward to working with our stakeholders to align on the investments that benefit our customers, enable us to maintain and improve upon our operational excellence, all at a fair return. Maintaining our commitment to transparency, we have provided assumptions associated with our expected annual growth in earnings through 2029 on Appendix Slide 23. As you can see, we expect to deliver the out years near the top end of the 5% to 7% range, aligned for flexibility of rate case timing and keeping us on track to deliver near the top end of our 5% to 7% annualized growth rate from '25 to '29. We're also continuing to project an annual dividend growth at 5% and anticipate paying out a dividend of $1.68 per share in 2026 in line with that growth. Finally, turning to Slide 15, I will conclude with a review of our balance sheet and financing activity, where we've continued to derisk and secure cost-effective capital to invest for the benefit of our customers. In December, Exelon Corporate issued $1 billion in convertible debt, pulling forward almost over half of our planned long-term corporate debt needs for '26. Through 2029, we expect to fund the $41.3 billion capital plan with $22 billion of internally generated cash flow, $13 billion of debt at the utilities and $3 billion of total debt at the holding company, with the balance funded with a modest amount of equity. As a reminder, our policy is to fund the incremental capital needs with approximately 40% of equity. Specifically, our total equity needs of $3.4 billion over the 4-year plan implies approximately $850 million of annualized equity needs, less than 2% of Exelon's annual market cap. We have already made progress on 20% of these equity needs, having priced $700 million in 2025 using forward contracts under our ATM. Our financial plan has been designed to accommodate the use of other fixed income securities that receive equity credit in place of senior debt at our holding company. Identifying opportunities to mitigate risk and maintain a strong balance sheet continues to be core to our strategy. And in 2025, our average credit metrics of 13.5% exceeded our downgrade threshold of 12% at Moody's by 150 basis points. With our balanced funding strategy in place, we target credit metrics of 14% over the planning period, providing 100 to 200 basis points of financial flexibility on average over our downgrade thresholds at S&P and Moody's throughout our guidance period. We also continue to advocate for a language that incorporates all tax repairs for calculating the Corporate Alternative Minimum Tax, which is now reflected in our disclosures. As a reminder, without the implementation of tax repairs deduction, our anticipated consolidated credit metrics would average over the plan closer to 13%. Supported by our history of execution, I want to close by reiterating our confidence not only in the plan we have laid out, but also in the broader opportunity we have to deliver value for our customers and our shareholders for another 25 years and beyond. I'll now turn it back to Calvin for his closing remarks.

Thank you, Jeanne. As we look ahead to 2026, our priorities are clear and aligned with what matters most to our customers, communities, policymakers and investors. We have a track record of meeting our commitments, and we will continue to focus on what we do best: executing our capital plan efficiently and maintaining industry-leading operational performance to benefit our customers, driving affordability through disciplined cost management, proven investment and active stakeholder engagement, and pursuing growth and innovative customer solutions. We have the right people, platform and strategy to continue delivering on these commitments. In 2026, we expect to deploy $10 billion in capital, earning a consolidated 9% to 10% operating return on equity. We anticipate delivering operating earnings of $2.81 to $2.91 per share, with the goal of being midpoint or better. And finally, we will execute a balanced funding strategy that maintains and strengthens our balance sheet. Serving approximately 11 million customers across some of the largest and most economically vital metropolitan areas in the country is a responsibility we do not take lightly. Our infrastructure is essential to the economic future of the regions we serve, and we honor that responsibility through disciplined execution, operational excellence and a relentless focus on the people who depend on us every day. We are proud of our track record of execution. The sector continues to evolve at a breakneck pace, but Exelon remains steadfast in its priorities, consistently delivering as a proven leader. Gigi, we can now open it up to questions.

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

Thanks for the updates. Appreciate it. Great to see the 5% to 7% outlook refresh, near the upper end here. I think just maybe could you comment quickly on the rate base growth is near 8%, you do have financing lag against that, which maybe would be greater than 1% financing lag between equity needs and debt funding. So just what's the tailwind to the plan to keep you at the high end of the 5% to 7% outlook?

Yes. I think I'll start with kind of what we've done, right, which is if you look back since 2021, we've had actual rate base growth of about 8% and earnings growth of 7.4%. So I think it's really just a continuation of that track record. But if you look at where rate base is at the end of '29 and you kind of assume half equity and then you look at our earned ROEs over the last 4 years, I think you can get to an EPS number that then, to your point, you got to back off financing costs. But I think if you look at kind of the equity needs, that sort of assume an average debt cost, but then I think what you might be missing is the AFUDC associated with transmission capital. And so if you look at that and how much we're growing transmission over that period, that will get you to kind of the near top end, Nick.

Okay. Great. And then I know that you probably are assuming a range of regulatory outcomes here. But maybe you can just kind of comment on, given so much focus on Pennsylvania, how you're thinking about regulatory strategy for '26, whether you'd file in '26 or wait until '27? And then any kind of considerations there for the timing of rate cases and how that can kind of impact where you are within this 5% to 7%?

Yes. No problem, Nick. I will tell you this, is that we are constantly in conversations with all of our stakeholders, and that goes from the governors to the regulatory bodies, to talk about what makes sense for the jurisdictions and our customers. And with affordability at front and center in all of our jurisdictions, we lean into that first. But we also recognize that we have to maintain a reliable and resilient grid. So to your point, we're looking at what we are going to do in Pennsylvania and what we're going to do in Maryland. I think in our documents, we've already laid out that we're filing in Maryland this year, and we're considering what is the best approach to action in Pennsylvania. But we will keep you updated on that. But right now, please keep in mind, everything centers on affordability and maintaining a reliable system.

Yes. And to your point, Nick, the disclosure kind of accommodate a variety of scenarios. So looking at a variety of scenarios around rate case timing, we feel confident in that. The 8% rate base growth, the earned ROEs and the sort of manageable amount of equity, delivers that 5% to 7%, near the top end.

And then just, Calvin, if I could squeeze one more in, you talked about in your prepared remarks just supply being a real challenge. And I know this RBA process is in its early innings at PJM, and we've all seen the comments from the IPPs and what they're looking for. But just maybe what are the T&Ds advocating for here and how do you see that process shaping up? Do you expect it to still be on time for a September auction? If you could comment at all there.

Do you want to take that one?

Nick, thank you for the question. We've really been focused on engaging, not only at PJM, but with our regulators. We were really pleased to see the administration, to Calvin's point, the administration's focus on this issue. We do support the development of this Reliability Backstop Action. And we really endeavored also to bring a bit of clarity to the discourse. That's why we enlisted Charles River Associates' support in helping us crystallize what we're dealing with. We need to focus on supply because we know it will lower customer electric costs. We know that we will also see improved reliability. To the point on cost, as Calvin mentioned, utility-generated power, which you know is something we are very focused on, because if no one else is going to build, we know that supply costs are an ever-increasing portion of the customer bill. So we really have to be focused on driving more build, and as this report outlaid, utility-generated power could reduce PJM customer costs by between $9.6 billion and $20 billion in the '28/'29 delivery year. So while we're focused on supporting the RBA, we also have to, in the near-term, focus on extending the price cap, getting more supply on the grid and, as Calvin mentioned, improving reliability. We know that those things will bring greater price stability and ultimately help address affordability, which is an ever-growing concern in each of our jurisdictions.

Nick, I know she doesn't need an introduction, but that was Colette Honorable.

Our next question comes from the line of Shar Pourreza from Wells Fargo.

Just on Colette's -- maybe a quick question for Colette. I mean obviously, there's a lot of affordability things out there, whether you're looking at Maryland, New Jersey, Pennsylvania, Delaware. We saw that in obviously Shapiro's budget speech. There are several bills out there in Pennsylvania, Maryland and New Jersey around resource adequacy. I guess a little bit more specifically, how are the conversations going on the legislative fronts? Like, can you strike a middle ground in a state like Pennsylvania with the IPPs around a new generation PPA structure which is currently being proposed under the House and Senate bills? Or are the conversations just too wide apart right now?

Shar, this is Calvin. I'll jump in -- and just say, first and foremost, we understand where Governor Shapiro was coming from because we're all frustrated with the affordability, the limit that's hitting all of our customers and his constituents. So at the forefront, we start from a foundation of alignment, that we all have to do something together. And you notice our approach has always been an all-of-the-above approach. How can we help deliver solutions that satisfy everyone? So to your direct question, is there an opportunity to have conversations and engage with you? Absolutely. Because we have never said we are going to do this on our own, but we do believe it must involve everyone. And I think -- you talked about Shapiro, but's let's -- Governor Moore in his State of the State even talked about an all-of-the-above, it requires everyone to come together to solve this problem. And we are committed to that. So when you talk about the House and Senate bills, it's always in the details, but please know that we're showing up every day in the Capitol and with the government and the PSC to talk about delivering solutions. And you notice from us, it's not one or done. It's everyone coming through and it's an all-of-the-above approach. Colette, anything you'd like to add there?

Thank you, Calvin. Shar, I would add, it will help put in better context why we showed up as a company the way we did around colocation issues. Colocation can be a great solution. We knew when we saw this headed our way that we needed to focus on affordability. Now you see others jumping in with us, it's great to see. And we need these discussions because this is how we will solve the problem. We've been very active, to your question, Shar, not only in Pennsylvania, on the ground there, on the ground with the governor. As you know, we joined Governor Shapiro in the filing at FERC on extending the price cap. We'll continue to partner with him, his administration and engage heavily in the legislature. Not only in Pennsylvania, we're having these same discussions in Maryland, in Delaware, in New Jersey. And I think that, for instance, in the address by Governor Moore, you could see very clearly, he has a view on what needs to happen. Take a look at New Jersey with Governor Sherrill stepping in and really focusing in on the solutions that need to come about in PJM. This is heartening to see. And you will continue to find us engaging in each of our jurisdictions to help solve this issue of affordability. Let me close by saying we're bringing solutions. We've been focused, as you know, on our customer relief fund that we developed last year and then we further supplemented ahead of the winter season in anticipation of these issues. And then we will continue focusing on low-income discounts in our jurisdictions, we have both well underway, and as well as focusing on longer-term solutions such as utility generation. So we are very active in our jurisdictions and we'll continue to be active.

And is it fair to just assume that there is some level of collaboration with the generators? Or is that bid-ask too wide apart? So I'm just trying to tease that out.

At the right price, right? Like I think it's -- we're always going to be our customers' advocate. So I think right now, what's -- the problem, right now, our customers are paying more for less. And so we got to get to the right place where there's actual new generation at the right price. If they want to build it at the right price, wonderful, right? But at the end of the day, to Colette and Calvin's comments, the Charles River report was really helpful because it said, if we had been doing this and we have the generation needed for '28, '29, that costs would have been $10 billion to $20 billion lower. We can't go back in time and build that generation, but we can take action now. And that's what we're focused on, is getting the generation built at the right price.

And then just last question here, just to tease out Nick's question around the CAGR. There's not a lot of delta between rate base growth and the EPS growth, so that sort of makes sense where you are. And Jeanne, clearly, from the slides this morning, there's plenty of incremental upside, so whether you're looking at PJM RTEP or MISO tranches, data center TSAs, resource adequacy. I guess what's the correct podium to step-function change the trajectory which has been out there for some time? Is it as it could be as simple as we need a few more quarters to execute? I guess how do we sort of think about the upsides that are evident on these slide decks, whether -- and it will be incremental to rate base growth, it will be incremental to EPS growth? I guess what do you need to see to step-function change that 5% to 7%?

Yes. No, good question. And I think, again, we feel like it is kind of progressing, right? So last rate base CAGR was 7.4%, we're sitting at 7.9% now. Also that 7.4%, we delivered above expectations through '25. So I think we are seeing continued progress there. I think given the deconcentrated plan, in addition to progress, it's really executable. We, as I mentioned in my prepared remarks, we've delivered within our capital within 2% since separation. And you look at our rate base this year, within 1%. That's no small task on $64 billion of rate base. So we feel not only is it really executable, you should feel confident in that growth, but it is continuing to progress. Like we're not going to be the flashy, right, it's going to go up double digits, but it's going to -- it's going up and it's highly executable, defensible. And we're not going to give you a number that I can't sit here and say that. So I think that's how we should think about it.

Our next question comes from the line of Paul Zimbardo from Jefferies.

Kudos, nicely done. To continue the theme a little bit from Nick and Shar, almost asking an inverse. It seems like rate base growth is pretty consistent with historical, the 7.9%, and you did grow at 7.4% despite some headwinds in Illinois and elsewhere and, of course, tailwinds too. Why couldn't you not grow at that kind of ZIP code, the same 7.5% growth rate, again, doing even better than the top end? Like, is it kind of a conservatism like you're mentioning or just getting more comfort? If you could elaborate a little bit more.

Sure. I mean, I think we're always going to strive to exceed expectations, but I think, again, giving you a number you can count on. I think financing costs are increasing, right? So you've got to account for that. But we are investing more in transmission. And so that gives us confidence in the -- that we can continue with the strong earned ROEs that we've had. So I think it's defensible, it is growing. I think -- but you've got to think about giving a number that's defensible that we can manage, but also account for the associated financing costs. But we're always going to strive to exceed your expectations, Paul.

No, you have been. So if you give a massive cookie, I always have to ask for more. But...

I've noticed that, Paul. Thank you.

The last one I wanted to ask, just on the incremental financing costs. So you definitely made a lot of progress on the balance sheet. How should we think about financing incremental capital opportunities as they come? Should we be using kind of that 40% in this roll forward or maybe a lower number?

No, it's the 40%. We want to maintain and keep that cushion we've worked so hard to get on the balance sheet. So what that results in is about the $3.4 billion over the 4-year period. On an annual basis, it's less than 2% of market cap, very manageable. And as you probably saw, we've already made good progress on that. So we've priced $700 million of that $3.4 billion. So on an annual basis for '26, it's a small amount to do. And given our ATM and our trading activities, it's very manageable. But we're going to stick with that 40%.

Our next question will be from the line of Steve Fleishman from Wolfe.

So maybe just on the -- with the move to more transmission continuing, that 9% to 10% earned ROE range, are we seeing some kind of movement up within that range that helps kind of put all these pieces together on the growth rate?

Yes, I think, again -- yes. If we go back to, I think, since separation, '22 to '25, our average earned has been somewhere around 9.4%. To your point, as we have been turning the ship towards transmission, I think you can expect that, if not slightly better. But it's going to take some time for some of these transmission projects to close. We've got some longer-dated ones, the big ones. But that's the direction we're headed.

Okay. And then on the CAMT that you mentioned, just when do you expect to actually have that, like full clarity on that? It sounds like sometime this year?

Yes. Yes. We are hopeful that we have a final, final resolution here in the near term.

Okay. And then lastly, just tying up some loose state stuff, are we going to get a Maryland lessons learned at some point or, yes, is there any chance they just say kind of we'll move on to -- I don't know. Yes.

Yes. See, I hear in your voice, my frustration. So thank you. It is -- we do believe we're going to get a lessons learned. And I know the team has been talking to the commission and the new chair, who we've worked with as a former state senator, and he understands the need for this. So we do believe we'll get a lessons learned. And I wish I could give you a time line, but we do believe it will happen in 2026.

Okay. But you'll file BGE probably before you get it?

Yes.

Yes. We're going to file probably in the first half. And would love to accommodate whatever is in there, but to Calvin's point, we've been transparent with the commission around the fact that the rates expire in '27 and so we have to do something here.

And then a last quick one. I know New Jersey is not your -- one of your larger states, but just curious your take so far under the new governor.

Absolutely. To your point, not one of our largest, but it's very important. And Tyler Anthony, the CEO of Pepco Holdings, has spent time with the other EDCs with Governor Sherrill. Mike Innocenzo, our Chief Operating Officer, spent time. And I'll let Mike elaborate further on New Jersey, if you would like to, Mike.

Yes. I would just say it's certainly got a lot of headlines during the election campaign. But if you look at the content of the executive orders, we think that they're very constructive, they're things that we can live with. And I would say, behind the scenes, the conversations are focused on the right areas, which is, if we're really going to go after affordability, we need to bring more supply in an affordable way, in an efficient way. And we fully support those discussions.

Thank you. Thanks to all our participants for joining us today. This concludes our presentation. You may now disconnect. Have a good day.