US power company Exelon announced on 24 February that its Board of Directors had approved a plan to separate Exelon Utilities (RemainCo), comprising the company’s six regulated electric and gas utilities, and Exelon Generation (SpinCo), its competitive power generation and customer-facing energy businesses, “into two publicly traded companies with the resources necessary to best serve customers and sustain long-term investment and operating excellence”.
RemainCo will be the parent company for Exelon’s fully regulated transmission and distribution utilities, delivering electricity and natural gas to more than 10 million customers. With operations across five states and the District of Columbia, its six utilities include Atlantic City Electric in southern New Jersey, BGE in central Maryland, ComEd in northern Illinois, Delmarva Power in Delaware and eastern Maryland, Pepco in Washington, DC, and central Maryland, and PECO in southeastern Pennsylvania.
Exelon Utilities has invested $22 billion over the last four years to modernise the grid and improve customer service, the company said. RemainCo will continue that performance track record with an additional $27 billion in investment over the next four years to continue modernising the grid “while managing costs and keeping rates affordable”. In addition, each Exelon utility has launched initiatives in their respective jurisdictions to expand transportation electrification and connect customers with options such as solar and battery storage to help communities meet their sustainability and climate goals.
SpinCo “will be the largest?supplier?of?clean energy?and sustainable solutions?to homes, businesses and public-sector customers across?the?continental?US,?backed by?more than 31,000 megawatts of?generating capacity?consisting of?nuclear,?wind, solar, natural gas and hydro?assets”.?The company?will?produce?about?12% of US carbon-free?energy. SpinCo will operate USA’s largest fleet of carbon-free nuclear power plants, which produced 150 GWh of electricity last year. The company also operates approximately 12,000MWe of hydroelectric, wind, solar, natural gas and oil generation assets, “which provide a mix of baseload, intermediate and peak power generation”.
Exelon said that, “to maintain the generation fleet’s legacy of safety, operational excellence and financial stewardship, the company will retire uneconomic assets that negatively affect its ability to provide a reliable source of clean power to tens of millions of American homes and businesses”.
Under the separation plan, Exelon Corporation shareholders will retain their current shares of Exelon stock and receive a pro-rata dividend of shares of the new company’s stock. The number of shares to be distributed to Exelon shareholders will be determined prior to closing. Exelon is targeting to complete the separation in the first quarter of 2022.
"Our industry is changing at a rapid pace and our customers expect us to continuously innovate to stay ahead of growing demand for clean energy, evolving business conditions and changing technology," said Exelon President and CEO Christopher Crane. "Now is the right time to take this step to best serve our customers, employees, community partners and shareholders. These are two strong, distinct businesses that will benefit from the strategic flexibility to focus on their unique customer, market and community priorities."