SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EXELON CORPORATION
/S/ Ruth Ann M. Gillis
------------------------------
Ruth Ann M. Gillis
Senior Vice President &
Chief Financial Officer
COMMONWEALTH EDISON COMPANY
/S/ Robert E. Berdelle
------------------------------
Robert E. Berdelle
Vice President & Chief
Financial Officer
PECO ENERGY COMPANY
/S/ Thomas P. Hill, Jr.
------------------------------
Thomas P. Hill, Jr.
Vice President & Chief
Financial Officer
August 15, 2001
EXHIBIT 99.1
NYSE: EXC
Exelon Corporation
National Generation with Regional Distribution
John W. Rowe, President and
Co-Chief Executive Officer
Texas
August 15, 2001
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NYSE: EXC
FORWARD LOOKING STATEMENTS
This presentation contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may vary materially from the
expectations contained herein. The forward-looking statements herein include
statements about future financial and operating results of Exelon. Economic,
business, competitive and/or regulatory factors affecting Exelon's businesses
generally could cause actual results to differ materially from those described
herein. For a discussion of the factors that could cause actual results to
differ materially, please see Exelon's filings with the Securities and Exchange
Commission, particularly those discussed in "Management's Discussions and
Analysis of Financial Condition and Results of Operations-- Outlook" in Exelon's
2000 Annual Report. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
presentation. Exelon Generation does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this presentation.
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NYSE: EXC
Top Five Reasons to Buy Exelon
1. Portfolio of superior performing assets with critical mass.
2. Integrated strategy with upside earnings potential and limited downside
risk.
3. Proven management with a record for delivering on commitments.
4. Solid earnings model: $4.50 EPS in 2001 and 10% earnings growth through
2003.
5. Recent market discount -- stock undervalued.
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NYSE: EXC
Top Five Reasons to Buy Exelon
Portfolio of Superior Performing Assets
[On the left portion of this slide there is a map of North America which
identifies each of the North American Electric Reliability Council regions.]
[To the right of the map there are the following bullet points:]
GENERATION PORTFOLIO
-16 GWs Nuclear
-5 GWs Gas/ Hydro
-16 GWs Long-Term Contracts
-4 GWs Sithe NA (Equity Investment)
-NPCC, MAAC, MAIN, WSCC, ERCOT, SERC, SPP
-Top 10 U.S. Power Marketer
ENERGY DELIVERY
-ComEd: 3.5 million customers in Illinois
-PECO: 1.5 million customers in Pennsylvania
ENTERPRISES
-Infrastructure management
-Competitive retail energy sales, infrastructure services and
communications businesses.
-National reach with focus on the east coast and the midwest
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NYSE: EXC
Top Five Reasons to Buy Exelon
Integrated Strategy
GENERATION
-Increase fuel, dispatch and geographic diversity in generation
portfolio.
-Continue to expand our energy supply.
-Drive nuclear costs to 2(cents)/KWh.
-Optimize position of low-cost provider through
Power Team's national reach.
ENERGY DELIVERY
-Insure earnings stream through service reliability and strong
relations with customers and regulators.
-Drive costs down through improving management and economies of scale.
-Extract full value from all assets (e.g., Alliance RTO).
-Build value of 5 million customers.
ENTERPRISES
-Leverage physical assets, customer relationships and core competencies
in infrastructure management.
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NYSE: EXC
Top Five Reasons to Buy Exelon
Proven Management
Completed one of the nation's largest utility mergers in under 13 months.
Significant accomplishments before, during, and after the merger.
Produced earnings during the 1st half of 2001 that surpassed market
expectations.
Realized $100 million of merger synergies through 2nd quarter 2001.
Superior 1st half performance throughout the corporation.
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NYSE: EXC
Top Five Reasons to Buy Exelon
Solid Earnings Model
[The following line is emphasized with Italics:]
2001 annual EPS of $4.50 and 10% growth through 2003.
$4.50 EPS in 2001:
-Performance above plan in first two quarters.
-Expect annual average wholesale prices to be in line
with original estimates.
-Above-plan performance by Exelon Nuclear, Delivery
companies.
10% Growth Model:
-Assumes average annual wholesale power price drop from $34/MWh to
$30/MWh from 2001-2003.
-Low-cost nuclear capacity additions will add 9 million MWh by 2003.
-Completion of Sithe and other planned additions.
-Significant decline in Energy Delivery expenditures coupled
with substantial improvements in efficiency /
productivity.
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NYSE: EXC
Top Five Reasons to Buy Exelon
A Great Stock at a Great Price
Confusion in power and stock markets has created a significant opportunity for
investors.
-Exelon's stock price has fallen over 20% YTD, while its fundamentals
are stronger than ever.
-When the dust settles, the prize will belong to those with critical
mass; low-cost generation; smart management.
-Exelon fits the bill.
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NYSE: EXC
Questions?
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Second Quarter Earnings Press Release
On July 24, 2001, Exelon Corporation issued the following press release.
Exelon Reports Strong Second Quarter Earnings of $0.97 Per Diluted Share
Chicago (July 24, 2001) Exelon Corporation today announced operating and
reported earnings of $315 million or $0.97 per diluted share for the second
quarter of 2001, representing a 17% increase over pro forma diluted operating
earnings for the comparable period in 2000. Exelon operating earnings for the
second quarter of 2000 were $125 million or $0.71 per diluted share, which
represent the results of PECO Energy and do not reflect the effects of the
October 20, 2000 merger with Unicom Corporation. On a pro forma basis assuming
the merger of PECO Energy and Unicom Corporation occurred on January 1, 2000,
second quarter 2000 earnings were $0.83 per diluted share.
Highlights for the quarter include:
o Energy sales of 48,522 GWh's which were 31% higher than pro forma second
quarter 2000. Wholesale market sales accounted for 42% of total sales.
o Strong performance by Power Team, Exelon Generation's wholesale marketing
division, in April and May which was partially offset by the effects of
cool weather across most of the United States and a decline in wholesale
power prices in June.
o The addition of 800 megawatts of long-term contracts to the Power Team
supply portfolio.
o Continuing superior performance by Exelon Generation's nuclear operations:
o a 93.6% nuclear capacity factor
o two record-breaking refueling outages
o the addition of 129 megawatts of capacity through power uprate
projects at Byron and Braidwood
o Exelon Generation's fossil operations continue their strong performance
with:
o 97% on time delivery
o 94% dispatch availability
o ComEd's on time completion of over 450 projects which formed the foundation
of its rigorous 2001 summer preparedness and infrastructure improvement
program.
Corbin A. McNeill, Co-CEO and Chairman, said, "The quarter confirmed, yet again,
Exelon's ability to meet its commitments. Despite cool weather and the fall in
wholesale prices in June, we've produced earnings that surpassed market
expectations. And we did it as we've done it in the past: through superior
execution."
John W. Rowe, Co-CEO and President, said, "I am delighted that our generation
group, Power Team, PECO and ComEd delivery operations all contributed to these
excellent results. While we expect larger challenges in the wholesale power
markets and in our Enterprise group during the second half, the combined
strength of our generation, power marketing and energy delivery groups put us in
a strong position to meet our commitments for the year."
Ruth Ann Gillis, Senior Vice President and Chief Financial Officer, confirmed
the company's previous earnings guidance. She noted, "We have had two good
quarters and we continue to believe our integrated strategy positions us to meet
our commitment of $4.50 earnings per share for 2001."
CORPORATE ISSUES
Second quarter earnings reflect goodwill amortization of $0.11 per share.
Consistent with FASB's new accounting standard for goodwill, Exelon expects to
discontinue annual amortization of approximately $140 million of goodwill,
effective January 1, 2002.
Merger-related synergies continue to be realized and Exelon expects to achieve
its target of $148 million this year.
BUSINESS UNIT RESULTS
Performance for Exelon's business segments--Energy Delivery, Generation and
Enterprises--is reported on the basis of earnings before interest and income
taxes (EBIT). Exelon's EBIT increased 20% to $821 million in the quarter
compared to pro forma EBIT of $685 million in the second quarter of 2000.
Energy Delivery consists of the retail electricity transmission and distribution
operations of ComEd and PECO Energy and the natural gas distribution business of
PECO Energy. Energy Delivery's operating revenues were $2,436 million for the
current quarter compared to pro forma revenues of $2,271 million in 2000.
Operating revenues reflect retail kilowatt-hour sales of 28,749 GWh's, which
were essentially flat compared to the prior-year sales of 28,764 GWh's due to
moderate weather conditions and the impact of a slower economy. Energy
Delivery's EBIT of $706 million in the second quarter of 2001 increased 10% over
the prior-year period pro forma EBIT of $643 million. ComEd's EBIT increased $73
million primarily as a result of lower operating and maintenance expenses
compared to the prior year period. PECO Energy's EBIT declined by $10 million
compared to the prior-year period pro forma EBIT due to an increase in
Competitive Transition Charge amortization, partially offset by increased
delivery revenues, net of fuel costs.
ComEd's distribution system reliability, delivery performance, and customer
satisfaction statistics, continued to improve, and PECO Energy was praised for
improved customer service in a report recently released by the Pennsylvania
Public Utility Commission.
Generation consists of Exelon's electric generation facilities and power
marketing operations. Revenues increased 14% to $1,618 million compared to pro
forma revenues in the second quarter of 2000. This increase reflects continued
strong nuclear performance, the expansion of power marketing activities and
additions to the supply portfolio, partially offset by the impact of lower
wholesale prices in both the PJM and ComEd markets. Generation's second quarter
EBIT of $126 million increased 66% over pro forma EBIT for the comparable
prior-year period of $76 million.
Exelon Generation is well on track to achieving its longer-term operating goals:
o 1,950 of the 3,000 megawatts targeted for this year have been acquired. The
Power Team energy supply portfolio, currently totaling over 41,000
megawatts, is projected to grow to 49,000 megawatts by 2003.
o 243 of the approximately 885 megawatts to be added through power uprate
projects by 2003 have been achieved.
o The year-to-date June 30 nuclear capacity factor is 96.2% compared to the
year-to-date goal of 93%. The target capacity factor for the year is 91.6%
reflecting five refueling outages scheduled for the fall.
Enterprises consists of competitive retail energy sales, energy and
infrastructure services, communications and related investments. Enterprises
revenues were $546 million in the second quarter, an increase of 36% compared to
second quarter 2000 pro forma revenues of $401 million. EBIT was a loss of $5
million in the quarter compared to a pro forma EBIT loss of $42 million in the
second quarter of 2000. Enterprises EBIT reflects lower margins in the
infrastructure services business, which has been impacted by the significant
downturn in the telecommunications industry. The sluggish performance of the
infrastructure services business was partially offset by a gain from the sale of
certain communications investments.
Conference call information:
Exelon has scheduled a Second Quarter Earnings Conference Call for 3 PM EDT; (2
PM CDT) on July 24. The call in number in the US is 800/289-0518; the
international call in number is 913/981-5532. No password is required. Media
representatives are invited to participate on a listen only basis. The call will
be audio web-cast and archived on Exelon's web site: www.exeloncorp.com. (Please
choose the Investor Relations page.)
Telephone replays will be available after 4 PM on July 24 through July 30. The
U.S. call-in number is 888/203-1112; the international call-in number is
719/457-0820. The confirmation code is 789042.
Except for the reported historical information, matters discussed in this
release are forward-looking statements that are subject to risks and
uncertainties. The factors that could cause actual results to differ materially
include future events affecting the demand for, and the supply of, energy,
including weather and economic conditions and the availability of generating
units, and other factors discussed in Exelon's filings with the SEC. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this release. Exelon undertakes no obligation to
publicly release any revision to these forward-looking statements to reflect
events or circumstances after the date of this release.
Exelon Corporation is one of the nation's largest electric utilities with
approximately five million customers and more than $15 billion in annual
revenues. The company has one of the industry's largest portfolios of
electricity generation capacity, with a nationwide reach and strong positions in
the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately
five million customers in Illinois and Pennsylvania and gas to 425,000 customers
in the Philadelphia area. The company also has holdings in such competitive
businesses as energy, infrastructure services and energy services. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker EXC.
EXELON CORPORATION
Earnings Summary
(in millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------- ----------------------------------
Pro Forma Pro Forma
2001 2000 (1) 2000 (2) 2001 2000 (1) 2000 (2)
------- ------- ------- ------- ------- -------
Revenue
Energy Delivery $ 2,436 $ 771 $ 2,271 $ 4,933 $ 1,620 $ 4,544
Generation 1,618 633 1,414 3,246 1,131 2,606
Enterprises 546 271 401 1,213 517 756
Corporate/Intercompany Eliminations (949) (290) (898) (1,918) (530) (1,718)
------- ------- ------- ------- ------- -------
Total Exelon $ 3,651 $ 1,385 $ 3,188 $ 7,474 $ 2,738 $ 6,188
======= ======= ======= ======= ======= =======
Earnings Before Interest and Taxes
Energy Delivery $ 706 $ 257 $ 643 $ 1,387 $ 594 $ 1,260
Generation 126 78 76 419 117 186
Enterprises (5) (32) (42) (36) (44) (55)
Corporate/Intercompany Eliminations (6) 1 8 (12) (1) 17
------- ------- ------- ------- ------- -------
Total Exelon 821 304 685 1,758 666 1,408
Interest Income 27 11 42 49 27 105
Interest Expense & Preferred Dividends (306) (121) (282) (606) (230) (561)
Income Taxes (227) (75) (177) (499) (176) (329)
Extraordinary Item, Net of Income Taxes -- (3) -- -- (3) --
Cumulative Effect of Change in Accounting
Principle, Net of Income Taxes -- -- -- 12 24 --
------- ------- ------- ------- ------- -------
Net Income $ 315 $ 116 $ 268 $ 714 $ 308 $ 623
======= ======= ======= ======= ======= =======
Average Common Shares Outstanding
Basic: 321 174 320 178
Diluted: 324 175 324 323 179 323
Earnings Per Common Share - Reported
Basic: $ 0.98 $ 0.67 $ 2.23 $ 1.73
Diluted: $ 0.97 $ 0.66 $ 2.21 $ 1.72
Nonrecurring Items excluded from
Operating Earnings:
Premiums paid to reacquire debt -- 0.02 -- 0.02
Cumulative effect of change in accounting
method for nuclear outages -- -- -- (0.13)
Implementation of SFAS 133 -- -- (0.04) --
Merger Costs -- 0.03 -- 0.07
------- ------- ------- -------
Earnings Per Common Share - Operating
Diluted: $ 0.97 $ 0.71 $ 0.83 $ 2.17 $ 1.68 $ 1.93
======= ======= ======= ======= ======= =======
(1) Reflects PECO Energy stand-alone earnings, restated to reflect change in
accounting method for nuclear outage costs.
(2) Pro forma 2000 data reflects operations as if the merger occurred on
January 1, 2000.
EXELON CORPORATION
Retail Electric Sales Statistics
For the Three Months Ended June 30
ComEd PECO
------------------------------------------ ------------------------------------------
MWH Sales 2001 2000 % Change 2001 2000 % Change
- --------- ---------- ---------- ---------- ---------- ----------- ----------
Residential 5,231,699 5,095,773 2.7% 2,520,984 2,538,146 (0.7%)
Small Commercial & Industrial 7,246,759 6,914,496 4.8% 1,835,660 1,798,142 2.1%
Large Commercial & Industrial 5,516,303 6,131,010 (10.0%) 3,903,853 4,043,136 (3.4%)
Public Authorities & Electric Railroads 2,310,170 2,050,780 12.6% 183,401 192,062 (4.5%)
----------- ----------- ----------- -----------
Total Sales to Ultimate Customers 20,304,931 20,192,059 0.6% 8,443,898 8,571,486 (1.5%)
=========== =========== =========== ===========
Heating Degree Days 667 733 418 503
Cooling Degree Days / Hours 233 194 2,740 2,835
Revenue (in thousands) 2001 2000 % Change 2001 2000 % Change
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------
Residential $ 501,657 $ 494,861 1.4% $ 288,875 $ 293,738 (1.7%)
Small Commercial & Industrial 532,533 526,510 1.1% 184,674 145,758 26.7%
Large Commercial & Industrial 250,751 277,978 (9.8%) 242,770 172,934 40.4%
Public Authorities & Electric Railroads 129,827 122,827 5.7% 17,436 11,465 52.1%
----------- ----------- ----------- -----------
Total Sales to Ultimate Customers $ 1,414,768 $ 1,422,176 (0.5%) $ 733,755 $ 623,895 17.6%
=========== =========== =========== ===========
Cents / kWh 2001 2000 % Change 2001 2000 % Change
- ----------- ---------- ---------- ---------- ---------- ----------- ----------
Residential $ 0.096 $ 0.097 (1.0%) $ 0.115 $ 0.116 (0.9%)
Small Commercial & Industrial $ 0.073 $ 0.076 (3.9%) $ 0.101 $ 0.081 24.7%
Large Commercial & Industrial $ 0.045 $ 0.045 0.0% $ 0.062 $ 0.043 44.2%
Public Authorities & Electric Railroad $ 0.056 $ 0.060 (6.7%) $ 0.095 $ 0.060 58.3%
Total Sales to Ultimate Customers $ 0.070 $ 0.070 0.0% $ 0.087 $ 0.073 19.2%
CORPORATE STRUCTURE
NYSE: EXC
CORPORATE STRUCTURE
[This slide shows an organization chart consisting of boxes connected with lines
arranged into 3 tiers. In the top tier is the box labeled "Exelon Corporation".
Below Exelon Corporation in the second tier are two boxes connected to it by
lines; the left box labeled "Exelon Energy Delivery", the right box labeled
"Exelon Ventures". Below Exelon Energy Delivery, in the third tier, are two
boxes connected to it; the left box labeled "ComEd", and the right box labeled
"PECO Energy". Below Exelon Ventures, in the third tier, are two boxes connected
to it; the left box labeled "Exelon Generation", and the right box labeled
"Exelon Enterprises".
Below the two boxes labeled ComEd and PECO Energy and centered between them are
the words "Electric and Gas Distribution". Below that there is a bracket which
extends underneath ComEd and PECO Energy with the word "Regulated".
Directly below the box labeled Exelon Generation are the words "Generation and
Power Marketing". Directly below the box labeled Exelon Enterprises are the
words: "Infrastructure Services, Communications, Retail Energy Sales, Energy
Services." There is another bracket which extends underneath Exelon Generation
and Exelon Enterprises with the word "Unregulated".
[The following debt ratings are shown under their appropriate boxes:]
Exelon Corporation Baa2/BBB+
ComEd A3 / A-
PECO Energy A2 / A
Exelon Generation Baa1/A-
Note: ComEd and PECO Energy ratings are for senior secured debt.
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GENERATION COMPANY BACKGROUND
NYSE: EXC
Profile of Current Generation Supply Portfolio
[This slide shows a pie chart indicating the percent breakdown of generation
capacity by fuel type:]
37 GWs of Capacity*
Hydro 1%
Fossil 14%
Contracts(Fossil) 40%
Nuclear 45%
[Below the pie chart is a box containing the words:]
LOW COST WITH INCREASING DIVERSITY
Note: Hydro includes pumped storage generation.
* Excludes 49.9% ownership in Sithe.
[LOGO FOR EXELON]
NYSE: EXC
Generation Supply Footprint
2001 - 2003*
[This slide depicts a map of North America which identifies each of the North
American Electric Reliability Council regions and indicating the amount of
Exelon generation in each region:]
WSCC 252 MW
MAPP 0 MW
ERCOT 830 MW plus
510 MW under development
SPP 800 MW under development
MAIN 24,187 MW plus
340 MW of CT under development
FRCC 0 MW
SERC 901 MW
ECAR 500 MW
MACC 10,394 MW plus
50 under development
NPCC 3,412 MW plus
6,140 MW under development (includes NPCCC)
[The slide also contains two boxes with additional information:]
[First box - upper left-hand corner:]
40,592 MW in operation
7,955 MW in development*
48,547 MW TOTAL
[Second box - lower left-hand corner:]
115 MW plus 115 MW under development in Mexico
[The following footnote appears in the lower left-hand corner:] * Assumes
completion of Sithe NA Acquisition.
[The following footnote appears in the lower right-hand corner:]
* Development refers to projects that are in planning or construction. Data as
of 5/18/01
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NYSE: EXC
Generation Supply MW's
Owned Generation Operating Development Total Generation
Portfolio
Exelon/
Amergen Nuclear 16,612
Exelon Power
(Hydro & Fossil) 5,210 500
Sithe Energies 3,806
Sithe Energies 6,255
Total Owned Generation 25,629 6,755
Contracts 14,963 1200
- --------------------------------------------------------------------------------
Total 40,592 7,955 48,547
Generation By Operating Development Total Generation
NERC Regions Portfolio
MAIN 24,187 340
ECAR 500 -
SERC 901 -
SPP - 800
ERCOT 830 510
MAAC 10,394 50
NPCC 3,412 4,540
NPCCC - 1,600
WSCC 252 -
Other (Mexico) 115 115
- --------------------------------------------------------------------------------
Total 40,592 7,955 48,547
[LOGO FOR EXELON]
Exelon
EXELON Nuclear Fleet
- ------------------------------------------------------------------------------------------------------------------------------------
Braidwood Byron Dresden LaSalle
- ------------------------------------------------------------------------------------------------------------------------------------
Current Owner(s) Exelon Exelon Exelon Exelon
- ------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Size 2,308 MW (PWR) 2,300 MW (PWR) 1,586 MW (BWR) 2,280 MW (BWR)
- ------------------------------------------------------------------------------------------------------------------------------------
MW Owned 2,308 MW 2,300 MW 1,586 MW 2,280 MW
- ------------------------------------------------------------------------------------------------------------------------------------
Site Type Dual unit Dual unit Dual unit Dual unit
- ------------------------------------------------------------------------------------------------------------------------------------
Power Pool MAIN MAIN MAIN MAIN
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Start Date 1988 Unit 1-1985 Unit 2-1987 Unit 2-1970 Unit 3-1971 Unit 1-1984 Unit 2-1984
License Expiration Unit 1-2026 Unit 2-2027 Unit 1-2024 Unit 2-2026 Unit 2-2009 Unit 3-2011 Unit 1-2022 Unit 2-2023
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Quad Cities Limerick Peach Bottom Salem
- ------------------------------------------------------------------------------------------------------------------------------------
Current Owner(s) Exelon / MidAmerican Exelon Exelon / PSE&G Exelon / PSE&G
Energy Holdings
- ------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 75% 100% 50% (3.75% still pending) 42.6% Non-Operator
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Size 1,562 MW (BWR) 2,284 MW (BWR) 2,185 MW (BWR) 2,212 MW (PWR)
- ------------------------------------------------------------------------------------------------------------------------------------
MW Owned 1,172 MW 2,284 MW 1,093 MW 942 MW
- ------------------------------------------------------------------------------------------------------------------------------------
Site Type Dual unit Dual unit Dual unit Dual Unit
- ------------------------------------------------------------------------------------------------------------------------------------
Power Pool MAIN PJM PJM PJM
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Start Date 1973 Unit 1 -1986 Unit 2 -1990 1974 Unit 1 -1977 Unit 2 -1981
License Expiration 2012 Unit 1 -2024 Unit 2 -2029 Unit 2 -2013 Unit 3 -2014 Unit 1 -2016 Unit 2 -2020
- ------------------------------------------------------------------------------------------------------------------------------------
AmerGen Acquisitions
- ------------------------------------------------------------------------------------------------------
TMI Unit 1 Clinton Oyster Creek
- ------------------------------------------------------------------------------------------------------
Seller GPU Illinova GPU
- ------------------------------------------------------------------------------------------------------
Plant Size 786 MW (PWR) 930 MW BWR 619 MW (BWR)
- ------------------------------------------------------------------------------------------------------
Power Pool PJM MAIN PJM - East
- ------------------------------------------------------------------------------------------------------
Ownership Interest 100% AmerGen 100% AmerGen 100% AmerGen
- ------------------------------------------------------------------------------------------------------
Plant Start date 1974 1987 1969
License expiration April 2014 September 2026 April 2009
- ------------------------------------------------------------------------------------------------------
EXELON Fossil Fleet
- ------------------------------------------------------------------------------------------------------------------------------------
Conowingo Muddy Run Cromby Eddystone
- ------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Units 11 8 2 4
- ------------------------------------------------------------------------------------------------------------------------------------
Net Capacity (MW) 512 977 345 1,341
- ------------------------------------------------------------------------------------------------------------------------------------
Fuel Type Hydroelectric Pumped Storage Unit 1: scrubbed coal Units 1&2: scrubbed coal
Unit 2: natural gas OR #6 oil Units 3&4: nat gas OR #6 oil
- ------------------------------------------------------------------------------------------------------------------------------------
Power Pool PJM PJM PJM PJM
- ------------------------------------------------------------------------------------------------------------------------------------
Dispatch Order Baseload (Run of River) Peaking Intermediate Intermediate
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Location Maryland Pennsylvania Pennsylvania Pennsylvania
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Fairless Hills Schuykill Delaware Distributed Gen
- ------------------------------------------------------------------------------------------------------------------------------------
Ownership Interest 100% 100% 100% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Units 2 1 2 42
- ------------------------------------------------------------------------------------------------------------------------------------
Net Capacity (MW) 60 166 250 1,049
- ------------------------------------------------------------------------------------------------------------------------------------
Fuel Type Landfill gas #6 oil #6 oil Oil, natural gas, diesel
- ------------------------------------------------------------------------------------------------------------------------------------
Power Pool PJM PJM PJM PJM
- ------------------------------------------------------------------------------------------------------------------------------------
Dispatch Order Peaking Peaking Peaking Intermediate, Peaking
- ------------------------------------------------------------------------------------------------------------------------------------
Plant Location Pennsylvania Pennsylvania Pennsylvania Pennsylvania
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Conemaugh Keystone
- ----------------------------------------------------------------------------
Ownership Interest 20.72% 20.99%
- ----------------------------------------------------------------------------
Number of Units 2 2
- ----------------------------------------------------------------------------
Net Capacity (MW) 352 357
- ----------------------------------------------------------------------------
Fuel Type Mine-mouth Coal-fired Mine-mouth Coal-fired
- ----------------------------------------------------------------------------
Power Pool PJM PJM
- ----------------------------------------------------------------------------
Dispatch Order Baseload Baseload
- ----------------------------------------------------------------------------
Plant Location Western Pennsylvania Western Pennsylvania
- ----------------------------------------------------------------------------
SITHE ASSETS BACKGROUND
Exelon
Sithe Assets by Region
Net MW in
Net MW in Net MW under Advanced
Operating construction Development
- ----------------------------------------------------------------------
NEPOOL 2,051 2,421 540
NYPP 243 - 1,392
Ontario 157 - 1,670
Mexico - 114 114
Q.F.'s 1,331 - -
- ----------------------------------------------------------------------
TOTAL 3,782 2,535 3,716
Exelon
Sithe Assets
- -----------------------------------------------------------------------------------------------------------------------
Region Plant Name Net Capacity Fuel Type Dispatch Order Location
- -----------------------------------------------------------------------------------------------------------------------
NEPool Mystic 1 12 Oil Peaking Everett, MA
Operating: Mystic 4 135 Oil Intermediate Everett, MA
Mystic 5 130 Oil Intermediate Everett, MA
Mystic 6 138 Oil Intermediate Everett, MA
Mystic 7 592 Oil Intermediate Everett, MA
New Boston 1 380 Gas Intermediate South Boston, MA
New Boston 2 380 Gas Intermediate South Boston, MA
New Boston 3 20 Oil Peaking South Boston, MA
Wyman 4 36 Oil Intermediate Yarmouth, Maine
West Medway 1 55 Gas/Oil Peaking West Medway, MA
West Medway 2 55 Gas/Oil Peaking West Medway, MA
West Medway 3 55 Gas/Oil Peaking West Medway, MA
Framingham 1 13 Oil Peaking Framingham, MA
Framingham 2 11 Oil Peaking Framingham, MA
Framingham 3 13 Oil Peaking Framingham, MA
Fore River 1 13 Oil Peaking Weymouth, MA
Fore River 2 13 Oil Peaking Weymouth, MA
Sub Total 2,051
Development:
Mystic 8 807 Gas Baseload Everett, MA
Mystic 9 807 Gas Baseload Everett, MA
Fore River 3 807 Gas Baseload Weymouth, MA
SubTotal 2,421
Total NEPool 4,472
1
- --------------------------------------------------------------------------------
Exelon
Sithe Assets (cont.)
- -------------------------------------------------------------------------------------------------------------------------
Region Plant Name Net Capacity Fuel Type Dispatch Order Location
- -------------------------------------------------------------------------------------------------------------------------
NYPP
Operating: Massena 66 Gas Intermediate Massena, NY
Ogdensburg 71 Gas Intermediate Ogdensburg, NY
Batavia 50 Gas Intermediate Batavia, NY
Sterling 56 Gas Intermediate Sherrill, NY
Total NYPP 243
QFs
Independence 1,024 Gas Baseload Oswego, NY
Cardinal 157 Gas Baseload Cardinal, Ontario, Canada
Kenilworth 26 Gas Baseload Kenilworth, NJ
Allegheny 5 10 Hydro Intermediate Allegheny River, PA
Allegheny 6 9 Hydro Intermediate Allegheny River, PA
Allegheny 8 14 Hydro Intermediate Allegheny River, PA
Allegheny 9 18 Hydro Intermediate Allegheny River, PA
Greeley 48 Gas Baseload Greeley, Colorado
Oxnard 48 Gas Baseload Oxnard, California
Naval New 45 Oil Baseload San Diego, CA
North Island 37 Oil Baseload San Diego, CA
NTC MCRD 23 Oil Baseload San Diego, CA
Bypass 10 Hydro Baseload Jerome County, Idaho
Hazelton 9 Hydro Baseload Jerome County, Idaho
Elk Creek 2 Hydro Baseload Boise, Idaho
Rock Creek 4 Hydro Baseload El Dorado County, California
Mont Creek 3 Hydro Baseload Shasta County, California
Ivy River 1 Hydro Baseload Madison County, North Carolina
Total QFs 1,488
International
Cemex-Sithe 114 Pet Coke PPA Tamuin, Mexico
International 114
Total 6,317
- -------------------------------------------------------------------------------------------------------------------------
2
Exelon
Projects in Advanced
Development
Project Capacity Likelihood of Occurrence
------- -------- ------------------------
West Medway 540 MW Peakers in final permitting and
highly probable of occurrence
TEG II, Mexico 230 MW Project with CEMEX of high
probability
Torne Valley, NY 800 MW Faces permitting difficulties in NY
and local opposition
Heritage, NY 800 MW Requires GE's development of "H"
technology
Ontario (2 sites) 1,600 MW Sites under option. Depends on
successful implementation of
de-regulation in Ontario
3
NYSE: EXC
Exelon: Top 10 Power Marketer
Top 20 Power Marketers
(TWh)
Company 1Q 2001 Rank YE 2000 Rank
Enron 203.7 1 590.2 1
AEP 132.4 2 401.3 2
Reliant 76.8 3 205.5 5
Williams 68.1 4 138.4 10
PG&E 62.9 5 282.6 3
Cinergy 60.7 6 166.4 8
Aquila 52.8 7 186.7 7
Mirant 52.6 8 202.6 6
Duke 49.9 9 276.2 4
Exelon 48.3 10 85.3 16
El Paso 35.9 11 115.3 13
Edison Mission 35.2 12 136.9 12
Constellation 29.8 13 162.3 9
PP&L 28.7 14 60.4 21
First Energy 26.8 15 12.5 48
Dynegy 26.1 16 137.7 11
PSEG 25.2 17 100.7 15
CSM 23.9 18 37.8 27
Merrill Lynch 23.6 19 53.6 23
Allegheny 22.3 20 61.9 20
Source: Power Markets Week- June 4, 2001
[LOGO FOR EXELON]
ENERGY DELIVERY BACKGROUND
NYSE: EXC
Successful Utility Restructuring
[This slide is divided into two columns; the left column has the heading ComEd,
the right column: PECO Energy.]
ComEd
- ------
-Transition through 2006
which can be extended through 2008
-Full customer choice by 5/1/02
-Customer load retention of 95%
-Sold fossil assets for $5 billion;
transferred nuclear assets to Generation
-Securitized $3.4 billion of $6.3 billion
of allowed stranded cost recovery
-ROE "Cap": 30-Year Treasury yield
average plus 8.5% for 2000-2004
PECO Energy
- -----------
-Transition through 2010
-Full customer choice since 1/2/00
-Customer load retention of 70%
-Transferred nuclear and fossil assets to Generation
-Securitized $5.0 billion of $5.3 billion
of allowed stranded cost recovery
-Capped transmission and distribution rates
through 2006
[LOGO FOR EXELON]
NYSE: EXC
No Supply Risk at Utilities
[The following sentence is emphasized with italics:]
Favorable Regulatory Settlements to Cover the Transition Period.
[This slide is divided into three columns, the first two columns appear under
the heading ComEd; the third under the heading PECO Energy
ComEd
Term Term
- ---- ----
Through 12/31/04 1/1/05 - 12/31/06
Requirements Requirements
- ------------ ------------
Full requirements Power produced at
contract with ComEd's former
Generation nuclear plants
Pricing Pricing
- ------- -------
Fixed price at To be determined
approximately based on market
ComEd's legacy conditions
cost of generation
PECO Energy
Term
- ----
Through 12/31/10
Requirements
- ------------
Full requirements
contract with
Generation
Pricing
- -------
At the "shopping
credit" as specified
in 1998 Settlement
Agreement
[LOGO FOR EXELON]
NYSE: EXC
Why Pennsylvania and Illinois Work
[This slide is divided into two columns; the left column has the heading
"Competitive Markets", the right column: "PECO/ComEd".]
Competitive Markets
- -Queue of new power projects to
meet demand
-Approximately 6 GW in PJM and 7
GW in MAIN through 2003
- -Coal and nuclear dominant fuels -
prices stable
- -Ample transmission access for imports
ComEd/PECO
- -Transferred 30 GW of capacity to
affiliate Exelon Generation
- -Purchase power through long-term
contracts with Generation
- -Contracts are priced at attractive
levels
[LOGO FOR EXELON]
[LETTERHEAD FOR EXELON]
Pamela B. Strobel
President
Exelon Energy Delivery Company
10 South Deaborn, 37 East
Post Office Box 805398
Chicago, Illinois 60680-5398
April 2, 2001
Richard L. Mathias, Chairman
Illinois Commerce Commission
160 North LaSalle Street
Chicago, Illinois 60601
Dear Chairman Mathias:
You and your fellow Commissioners have talked with John Rowe, Frank
Clark and me about the legitimate concern, you, and the general public, share
with respect to the continued successful implementation of electric service
restructuring in Illinois. That concern has been heightened for all of us by
recent events in California. The two most important elements of electric service
- -- cost and reliability -- are highlighted by the sharp price increases and
inadequate supply facing Californians as summer approaches. The California
experience is the result of a combination of many factors, including a
supply/demand imbalance that developed over time, and has been exacerbated by a
poorly designed market structure. We at Exelon believe it is important both to
reassure our customers that Illinois is not at risk for a repeat of the
California experience, and to take the steps necessary to protect that promise
beyond the term of Commonwealth Edison's existing contractual rights to reliable
generating capacity. To do that we are developing a detailed plan that will, by
further stimulating the development of a functional wholesale and retail market,
encourage and ensure adequate capacity and acceptable price levels in Illinois
for the long term. The outline of our plan is presented in this letter, by which
we hope to solicit your considered suggestions as we proceed to implementation.
Attached to this letter (as Attachment A) is a simplified summary of the plan as
we now envision it.
We have the same objective: to assure the public of a reliable supply
of electricity at a reasonable price, now and in the future. We also recognize
that smaller consumers wish to be protected from the supply and price
fluctuations inherent in commodity markets. It is also important to build a
functional, competitive market in which supply options are available to all,
with a default system that will have the ability to supply those customers who
are unable or unwilling to exercise those options. Our proposal, therefore,
addresses the need to develop a competitive market, with the participation of a
sufficient number of willing buyers and sellers to assure both adequate capacity
and competitive prices. Such a market, we believe, will also provide a measure
of stability that will benefit all consumers.
Chairman Richard L. Mathias
April 2, 2001
Page 2
Meeting this objective within the context of the current legislation in
a way that would be both certain and advantageous to Exelon would be fairly
simple: Exelon could commit to provide supply to meet any level of demand at the
then prevailing spot market price, plus adequate compensation for taking the
risks of providing reliable, potentially universal service. The resulting price,
although "reasonable" in the context of the market, might not, however, be
desirable for all customers and would not necessarily encourage forward
contracting for new generation. Small customers, for example, would probably
find such pricing not adequately stable or predictable, and the lack of forward
contracting would not provide sufficient incentives to attract adequate
investment in new capacity. Thus we believe the simplicity of such a "spot plus"
model should be somewhat compromised, both to provide greater price certainty
for small users, and to provide incentives for a more vigorous market, which
should result, ultimately, in more secure supply.
With this in mind we propose to distinguish between larger users --
defined as those with loads in excess of 400 kW of demand -- and mass market
consumers, with peak loads below that level (which, incidentally, comprise well
over 99% of all of our retail customers). The 400 kW level is an appropriate
break point for Commonwealth Edison's customers because those with larger loads
represent the majority of "switching" activity in our service territory.
Approximately 12,000 of Edison's non-residential customers (representing over
4,800 MW of load) have so far exercised their choice for unbundled service as of
March 27, 2001. Customers with demands greater than 400 kW represent
approximately 3,900 MW, or 82%, of the load that has switched. In addition, of
the 6,400 customers with loads over 400 kW, roughly 33% have already selected
unbundled service. Finally, customers over 400 kW are already required by
Commonwealth Edison's delivery service tariff to have interval metering in
place. This metering permits customer-specific billing settlements to reflect
actual hourly consumption and can provide large customers with hourly price
signals.
The larger users already have both the ability and the sophistication
to participate directly in the bulk power markets, to respond to market price
signals, and to make their own decisions about the length of their supply
arrangements. The present structure, however, places the regulated utility in
the position of providing these customers with several attractive electric
service options, specifically the power purchase option ("PPO") and fixed price
bundled service offerings. The availability of these options for large customers
tends to limit their incentive to turn to alternative suppliers and thus limits
the number of new entrants on the supply side, restraining the robust
development of the competitive market. Thus, we believe it would be best to
pursue a course that would result in the complete elimination of both PPO and
bundled service for large customers by the end of the mandatory transition
period. We believe that by the end of 2004, when the statutory rate freeze and
the mandatory transition period, as well as Commonwealth Edison's current
contractual rights to substantial capacity from our former fossil plants, come
to an end, these large customers should play an important role as participants
in the market. By mitigating our obligation to supply them, our own flexibility,
as well as the market's robustness, will be enhanced. Assuming our efforts are
successful, and a viable competitive market is in place at the end of the
mandatory transition period in 2004, we would offer to supply large users at
day-ahead or other spot market prices, with some adder to reflect our
administrative costs. While we will make every effort to
Chairman Richard L. Mathias
April 2, 2001
Page 3
develop such a competitive market, we will, of course, also depend on the
support and participation of other market participants and the Commission.
While simply notifying large customers today that the existing PPO and
fixed price offerings will be phased out over time should encourage immediate
increased participation in the competitive market, additional steps should also
be taken during the mandatory transition period to help achieve that goal. We
may propose a tariff to be effective mid-year 2002, when we expect that the
majority of our largest customers (those with loads exceeding 3 MW) will not be
paying any CTC, that disqualifies such customers from eligibility for the
existing PPO option. If necessary, other incentives for market participation
might also be implemented during the mandatory transition period. It should be
clear, however, that in the face of a functioning market with adequate supply
and suppliers, it would not be reasonable to hold us to a PPO obligation at a
fixed price where the magnitude of an unpredictable PPO load could exceed our
own available resources. As long as large users have the present choice,
essentially between the lower of cost or market, many will resist direct
participation in the market, to the detriment of all. A strong market cannot
flourish as long as large users can have it both ways.
With respect to smaller consumers, an appropriate policy should
recognize their need for an alternative to direct participation in the market.
We believe that one answer is for us to assume a more clearly defined role in
assuring a reliable supply, at relatively stable prices. Such prices should
reflect the realities of the market, but mitigate much of the volatility and
risk for the small customers. While there is greater certainty associated with
providing supply for some residential customers who are relatively small and
disinterested in pursuing competitive alternatives undertaking this commitment
with respect to our provider of last resort responsibility for the period beyond
2004 nevertheless entails significant risk. That risk increases as it is
accompanied by our commitment not merely to certainty of supply, but to
certainty of price as well, over time periods that exceed our -- or anyone's --
ability to forecast with confidence. Our plan recognizes the need to meet the
public interest with respect to both of these variables -- supply certainty and
price stability -- thus protecting against the possibility that the sins of
California will be visited on the people of Illinois. It also will provide us
with appropriate compensation for the risk we will be assuming.
In part because of the mix in Exelon's existing generation portfolio,
and in part because of our expectation that, through the use of long-term
forward contracting, we can hedge and manage price risk, we are willing to
undertake a commitment to supply users with peak demands below 400 kW with the
power and energy they need, at a fixed, known price for the period 2005 through
2008. The price could be designed either to remain constant over the period or
to escalate modestly on an annual basis over that period, in which case it would
start at a lower level and end at a higher level than the constant price. The
fixed price level to which we are willing to commit at this time reflects
implicitly several factors, including the market, the risks we are assuming, and
the value customers will receive in terms of reliability, price stability, and
simplicity. However, to the extent that our undertaking is asymmetric -- that
is, obligates us to provide capacity but permits customers to
Chairman Richard L. Mathias
April 2, 2001
Page 4
switch back and forth from generation we supply to that supplied by others -- we
would not expect our obligation to be perpetual.
Under this proposal, all customers, subject to appropriate anti-gaming
rules that limit their ability to change suppliers to capture temporary market
conditions, would have the ability to purchase from alternative suppliers. Thus,
if actual market prices turn out to be lower than the fixed-price offer, the
customers could obtain the benefit of the lower prices by purchasing from an
alternative supplier. By choosing not to turn to alternative suppliers, such
customers would be making another choice, the choice to have someone else -- us
- -- identify and provide a reliable supply, and do so at a price that will allow
them to budget and be free from price shocks reflecting the actual and extreme
volatility of the spot electric markets.
Our proposal, in addition to the benefits it provides directly for
large and small users alike, will provide the additional benefit of stimulating
the market in several ways. First, although continuing to provide large
customers with an alternative to direct access, the proposal provides incentives
for such customers to contract directly with competitive suppliers in the market
on their own behalf. They are, after all, the customer class who pursued most
vigorously the legislative creation of open access to the market. Their presence
in the market as buyers will serve to stimulate the participation of sellers,
and the market itself, and therefore should be encouraged. Second, by pricing
our offering to small users to reflect both the market value of the service and
appropriate recognition of the value of the reliability, certainty and
simplicity we will provide, we will create an incentive for other sellers to
compete for those loads, stimulating market development through the opportunity
to undercut our price. Thus, we believe our proposal should also be welcomed by
marketers/suppliers, as providing an established price comparison basis from
which they can compete for price-sensitive mass market customers. Finally,
establishing a long-term fixed price today for a subset of customers will allow
Exelon to sign forward contracts with new and existing generators in order to
hedge this price obligation or engage in other risk management activities. Such
forward contracts could encourage additional new entry, thereby increasing
overall system reliability and ensuring reasonable price levels in the future.
Small users themselves are at this time uncertain about the value of
shopping in the market, and the frequency with which they might switch suppliers
if they do shop. This makes it difficult to forecast the magnitude and shape of
the loads they represent, and, obviously, increases the risk of undertaking a
commitment to serve whatever that load may be, at pre-established prices. This,
however, seems to be exactly what the California experience has taught the rest
of us that the public demands: both a functional market, and a safe harbor. Our
proposal is intended to facilitate the development of the former, and assure the
existence of the latter.
Our proposal requires several things at this stage. First, we welcome
your insights into refinements you believe might improve the ability of our
model to stimulate fully competitive markets. We need to consider together the
regulatory or other changes that might be necessary to accommodate our
structure. We must do further work to refine the actual prices at which we are
prepared to offer this service. Finally, we also need to consider the most
efficient process for
Chairman Richard L. Mathias
April 2, 2001
Page 5
implementation. There are several reasons for this, but two are of immediate
concern. The first is the urgent need to reassure a concerned public, troubled
by the California experience, that provision has been made for their power
supply, at reasonable prices, for the foreseeable future. The second is the need
to move quickly to arrange for that supply, and its appropriate pricing. Under
the present arrangement, price uncertainty associated with provider of last
resort and default service obligations does not arise until 2005. However, as
Commissioner Kretschmer has recently observed, long-term price hedging can be of
great value, and negotiations for the necessary contracts and financial hedges
to eliminate price uncertainty through 2008 should therefore begin almost
immediately, with the hope that the sooner we start, the sooner such a service
can be confidently offered at a known price.
I look forward to reporting to you further refinements in our proposal,
to meeting with you, if you wish, to discuss it, and to implementing a plan to
bring the best of both the competitive market and the regulated delivery
business to the people of Illinois.
Very truly yours,
Pamela B. Strobel
President
Exelon Energy Delivery
cc: Hon. Ruth K. Kretschmer
Hon. Terry S. Harvill
Hon. Edward C. Hurley
Hon. Mary Frances Squires
Attachment A
EXELON CORPORATION
MARKET DEVELOPMENT AND CONSUMER PROTECTION PROPOSAL
Objective
- ---------
o Address need to further stimulate fully functioning wholesale and retail
markets
o Provide reliability and price stability beyond transition period
Solution
- --------
o Distinguish between large users (400 kW and above), and largely residential
and small commercial mass-market consumers (loads below 400 kW)
o Large users (over 40% of kWh sales):
o Phase out existing PPO and bundled service after 2004
o Beginning in 2005 offer only pass-through pricing on day-ahead or
real-time spot basis (plus adder)
o Restrict existing PPO offering through 2004 to large users with
continuing CTC obligations
o Mass market (99% of customers):
o Avoid California-style rate shock
o Provide specific fixed price service between 2005-2008
o Identify option of modest scheduled annual price escalation from 2005
through 2008
o Assure availability of reliable supply at established prices
Benefits
- --------
o Encourages large user participation in market
o Encourages competitive supplier participation to meet large user
requirements
o Stimulates robust markets
o Provides price insurance for small consumers
o Provides proper price signals to stimulate investment in new generation
ENTERPRISES BACKGROUND
[LOGO FOR EXELON]
INFRASTRUCTURE SERVICES
- -----------------------
Exelon Infrastructure Services' (EIS) goal is to provide integrated services
nationwide to network infrastructure owners in the electric, gas and
telecommunications industries. Services include design, construction, operation,
maintenance, and management of utility distribution and transmission systems.
EIS has grown through acquisition to become one of the largest utility
infrastructure service companies in the U.S.
EXELON SERVICES
- ---------------
Services is a nationwide provider of energy-related services to commercial and
industrial customers. The services are designed to reduce the risk, uncertainty,
and distraction that exist in the operating environment (i.e., equipment,
systems, and energy) surrounding customers' core business processes. Services
has become a regional leader in the mechanical services and energy marketplace,
with 8 locations in the Midwest.
SOLUTIONS
- ---------
Exelon Solutions is a facility solutions business organized around three
vertical customer segments. This business offers solutions to customer's
business problems through turn-key energy and operational projects. These
solutions are mainly procured through performance contracting in the Education,
Government and Healthcare segments. As a single-source provider, there are a
variety of elements included in a project, encompassing customer's demand-side
and supply-side requirements, which result in total facility solutions.
ENERGY
- ------
Exelon Energy is an energy retailer, selling electricity and natural gas to
industrial, commercial, and residential customers. The organization has an
established customer base in Pennsylvania, New Jersey, Massachusetts, Illinois,
Ohio and Michigan.
THERMAL TECHNOLOGIES
- --------------------
Exelon Thermal Technologies owns and operates energy facilities throughout North
America. These plants produce and deliver chilled and heated water used for air
conditioning and heating in large commercial and industrial facilities.
Customers, under long-term contracts, receive energy from centralized facilities
instead of self-producing their cooling and heating. ETT is one of North
America's top thermal energy companies.
CAPITAL PARTNERS
- ----------------
Exelon Capital Partners (ECP) is the corporate venture capital division of
Exelon Enterprises. ECP's business charter is to identify new growth
opportunities, technologies and business models, and establish a network of new
business relationships through active investments in emerging companies. Exelon
Capital Partners will provide venture capital financial returns on its equity
investments.
EXELON COMMUNICATIONS
- ---------------------
Exelon Communications is engaged in two operating telecommunications businesses.
Exelon Communications entered the telecommunication space to take advantage of
its core competency of infrastructure management and to leverage its assets such
as rights of way, transmission towers, fiber optic networks, and a skilled work
force. Communications is working with experienced telecommunications partners to
operate a wireless phone network and local fiber optics communications services
in the Greater Philadelphia region.
Current Telecommunications Businesses
>> AT&T Wireless Digital PCS - a joint venture with AT&T Wireless Services
>> PECO Adelphia Communications, - a partnership with Adelphia Business
Solutions
AT&T WIRELESS SERVICES JOINT VENTURE
>> Organization
- Name of Entity: AT&T Wireless PCS of Philadelphia, LLC
- Ownership:
o Exelon - 49%
o AT&T Wireless Services (AWS) - 51%
>> AWS is a publicly traded wireless communications company with more than
16 million customers in the US.
>> Communications Services
- The partnership provides wireless voice Personal Communications
Services (PCS) to both business customers and consumers in the
greater Philadelphia Region.
- The service is branded and sold as AT&T Digital PCS.
- Distribution channels include AT&T Wireless stores, national
retail, dealers/ agents, e-commerce, and business-to-business
sales.
- Commercial operation began in October 1997.
>> Service Territory
- The partnership is licensed to provide Wireless Personal
Communications Services in the Philadelphia Major Trading Area
(MTA)
- Population of MTA is 9 million
- The MTA includes Philadelphia, Harrisburg, Lancaster, Reading,
State College, Wilmington DE, Dover DE, Trenton NJ, Atlantic City
NJ and other surrounding areas
>> PCS Network Buildout & Area of Business Focus
- Philadelphia
- Portions of Bucks, Chester, Delaware, and Montgomery Counties,
- Wilmington, DE,
- Salem Co. NJ, Gloucester Co. NJ, Burlington Co. NJ & Mercer Co. NJ
- Areas above represent a population of approximately 6 million
>> AT&T Wireless Services' Role
- Majority Member - 51% ownership of LLC
- AT&T Wireless Services provides day-to-day management of the LLC as
well as services provisioning, billing and network monitoring
>> Exelon Communications' Role
- Minority Member - 49 % ownership of LLC
- Project Manager for site acquisition, construction and maintenance
of PCS cell sites
- Landlord - lease transmission towers and other facilities for
attachment of PCS antennas and equipment
- PECO is receiving approximately $3.2 million per year in lease
revenue.
PECO ADELPHIA COMMUNICATIONS Partnership
>> Organization
- 50/50 General Partnership between Exelon and Adelphia Business
Solutions of Coudersport, PA
- Adelphia Business Solutions is a Competitive Local Exchange Carrier
(CLEC) and is majority owned by Adelphia Communications Corporation
>> Communications Services
- PECO Adelphia provides local and long distance communications
services as well as data networking services to businesses
- PECO Adelphia's services are provided through a 100% fiber optic
network
- The Partnership is currently connected to 34 Bell Atlantic offices
and has negotiated an Interconnection Agreement with Bell Atlantic
- The Partnership is connected to all of the major long distance
carriers within the Philadelphia area
>> Market Focus
- PECO Adelphia provides communications services primarily to large
and medium businesses
- Services are provided to small businesses in multi-tenant buildings
- PECO Adelphia has also been successful in serving Internet Service
Providers as well as education and health care providers
>> Service Territory
- Communications services are provided throughout the PECO Energy
service territory as well as Allentown, Bethlehem, Easton and
Reading.
- PECO Adelphia also resells a small number of lines in southern New
Jersey.
>> Fiber Network
- PECO Adelphia's network extends over 975 route miles and approx.
36,000 fiber miles
- Fiber network installation is performed by Exelon Communications
- All of PECO Adelphia's fiber network that is within the PECO Energy
service territory (about 640 miles) is owned by PECO Energy and is
leased to the Partnership
>> Adelphia's Role
- Adelphia is a leading supplier of communications services in 50
markets throughout the United States
- Adelphia provides day-to-day management of the partnership as well
as services provisioning, billing, and network monitoring
>> Exelon's Role
- Exelon designs, installs and maintains the fiber network.
- Exelon is also leading the local PECO Adelphia marketing campaign
- Exelon chairs the Partnership's Management Oversight Committee
EXHIBIT 99.2
Texas Investor Presentation
15 August 2001
Talking Points for John Rowe
Texas Investor Presentation
15 August 2001
Talking points for John Rowe
SLIDE 3: TOP 5 REASONS TO BUY EXELON
>> Confusion {or readjustment} in stock and power markets surrounding the
sudden decline in forward power prices has created the following 2
opportunities:
1. The opportunity for Exelon to more clearly differentiate itself from
other companies in the power business.
2. The opportunity for you to buy a very good stock at a very good price.
>> Exelon's vision is to be the most admired utility in the world. We are
committed to creating shareholder value through strong financial
discipline, superior execution in all areas - sticking to the basics and
making them work, and leadership in our industry through boldness and
creativity.
>> Exelon has:
o Total assets of $34 billion.
o Revenues of $15 billion from substantial operations along the length
of the energy value chain.
o A strong balance sheet (over half our debt is securitized).
o Favorable credit ratings (Corp: BBB+; Genco: A-; ComEd A-/PECO A).
o Restructuring legislation that has been in place for 2 years and
recognized as working for both consumers and utilities.
o Projected 2001 EPS of $4.50 and a 10% growth rate through 2003.
>> For all these reasons and the several more I'll give you in the course of
my short remarks today, we believe Exelon is significantly undervalued in
terms of its short and long term earnings potential.
-2-
Texas Investor Presentation
15 August 2001
Talking points for John Rowe
SLIDE 4: Portfolio of Superior Performing Assets
>> There's tremendous potential inherent in size and location of our asset
bases.
>> Generation
o 16 GW nuclear fleet - largest and best operated in the U.S.
o Size key to:
o Attracting and keeping top talent, which will be increasingly
critical in sustaining top-quartile operations: Oliver Kingsley
is astonishing in himself, but also in the management team he's
built.
o Achieving economies of scale in fuel, capital expenditures, and
costs of operating single units.
o Driving costs down by standardizing operations across the fleet
at the highest levels of performance.
o 2003 Goal: nuclear generation at an all in cost of 2 cents/kWh.
>> Power Team.
o The value of our 41 GW generation supply portfolio is significantly
enhanced by our power marketing business.
o Power Team is the No. 10 power marketer in nation.
o Power Team has been a successful, asset-based power marketer since the
mid 90's.
o Asset-based means that 90% of Power Team's trades result in the
physical delivery of power - unlike financial traders like Enron.
>> T& D
o Rich in as-yet untapped opportunity.
o We believe our tie to 5 million customers will become increasingly
valuable, and that we can squeeze out costs through improved
efficiency, productivity, and back-office synergies (billing, customer
service etc.)
>> Enterprises.
o Enterprises operation consists of businesses that build on, in a
variety of different markets, our core competencies in infrastructure
management and energy, and customer relationships.
-3-
Texas Investor Presentation
15 August 2001
Talking points for John Rowe
SLIDE 5: Integrated Strategy
>> Last fall we were under considerable pressure to split off our generation
operations to take advantage of the extremely high multiples "pure"
generation companies were enjoying.
>> We resisted that pressure seeing then what all can see today, a decline in
wholesale prices that makes an integrated strategy the key to long-term
success in a volatile and evolving industry.
>> 3 Earnings Engines
o Generation.
o Near-Term Growth
- Efficiency improvements that will continue to support our
low-cost generation position.
- Asset Acquisitions.
- Development.
- Contractual Agreements.
- Power Uprates.
o Energy Delivery
o Steady and Stable earnings stream.
o 70% Exelon revenues and EBIT come from the delivery companies.
o Native Load obligation provides protection from the risks of the
wholesale market.
- Amount
* 90% on-peak sales through native load.
* 50-60% off-peak sales through native load.
- Timing.
* 4 years remaining in Chicago.
* 9 years remaining in Pennsylvania.
o Substantial cost cutting opportunity in O&M and Capital.
o Enterprises.
o Enterprises was originally viewed as Exelon's long-term source of
earnings growth - complimenting the steady earnings of the Energy
Delivery Business and the near term growth of the Generation
Business.
o Challenges
- Telecommunication Industry Collapse.
- Positive Value investments do not translate to earnings.
-4-
Texas Investor Presentation
15 August 2001
Talking points for John Rowe
SLIDE 5: Integrated Strategy (continued)
o Positives
- PECOAdelphia.
* Performing better than plan.
* Demand for voice and data services continues to grow.
* Net Income positive.
* $7.5 million ahead of plan to date (Exelon's share is
$3.75 million).
* Other CLEC businesses continue to struggle to reach
positive Net Income.
* Estimated value of $110-150 million (internal DCF
valuation).
- AT&T Wireless
* Essentially on plan.
* Some softening in new customer acquisitions.
* EBITDA Neutral - on plan.
* Estimated value of $400-$600 M (multiple of AWE stock
price).
- Corvis
* Another example of an investment that created value.
* Both companies had invested separately prior to the
merger.
* Marked to market at merger.
* Currently below marked value, but still above initial
purchase price.
o Priorities Going Forward - Plan.
- Temporarily stop acquisitions.
- Concentrate on fixing current businesses - cost management.
- Evaluate any possible divestitures/sales opportunities.
* Thermal - have had offers.
* ATT - being public creates more opportunities or
options.
- New management - recent announcement regarding Michael Egan.
- Look to growth again once "house is in order".
-5-
SLIDE 6: Proven Management
>> Merger.
o The Unicom/PECO no-premium, merger-of-equals transformed two good
utilities into an energy powerhouse in a remarkable 13 months. The
most telling testament to the difficulty of this feat is the failure
of so many others to repeat it.
o Our success in first conceiving and then executing the merger is
indicative of one of Exelon's greatest strengths - a management team
committed to achievement - both near and longer term.
>> Significant Accomplishments.
o Acquisition of 49.9% of Sithe.
o Corporate restructuring.
o Tax-Free Transfer of 30 GW's of generation from our utilities to our
unregulated Generation Company.
>> Earnings.
Actual ('01) Pro-Forma
------------ ---------
o 1st Qtr: $1.19 $1.10
o 2nd Qtr: $0.97 $0.83
o YTD: $2.17 $1.93
>> Synergies.
o Merger-related synergies continue to be realized and Exelon expects to
achieve its target of $148 million this year.
>> Strong 1st half performance throughout the company.
o Nuclear
o Continued Superior Performance
o 93.6% capacity factor for the quarter. (does not include Salem,
in which we have 42% ownership, but we don't operate)
o 96.2% capacity factor for the year to date - compared to a target
of 93% (does not include Salem, in which we have 42% ownership,
but we don't operate)
o Two record-breaking refueling outages.
o Addition of 129 megawatts of capacity through power uprate
projects this quarter.
o 243 of total 885 megawatts of capacity to be added through power
uprates by 2003 have been achieved.
-6-
SLIDE 6: Proven Management (continued)
o Fossil.
o 97% on-time delivery this quarter.
o 94% dispatch availability this quarter.
o Power Team.
o Energy sales of 48,522 GWh's were 31% higher than pro-forma
second quarter 2000.
o Added 800 megawatts of long-term contracts to the supply
portfolio this quarter.
o 1,950 of 3,000 megawatts targeted for this year have been
acquired.
o Energy Delivery.
o KEPT THE LIGHTS ON! Superior performance, meeting demands of
record-breaking heat wave in Chicago and Philadelphia.
o ComEd completed rigorous 2001 summer preparedness and
infrastructure improvement program on time and on budget.
o ComEd's distribution system reliability, delivery performance,
and customer satisfaction statistics continued to improve.
o PECO Energy was praised for improved customer service in a report
recently released by the Pennsylvania Public Utility Commission.
-7-
SLIDE 7: Solid Earnings
$4.50 Commitment for 2001.
>> While we expect challenges in the wholesale power markets and in our
Enterprise Group during the second half of the year, the combined strength
of our generation, marketing, and delivery groups puts us in a strong
position to meet our commitments for the year.
>> Timing. Strong wholesale electricity prices during the start of the year
(January through May) mitigate weaker actual and expected prices for the
summer months (June, July, and August). We believe the end of year prices
(September through December) will be slightly better than those assumed in
our estimates at the beginning of the year.
o Our earnings estimates at the beginning of the year were based on a
$34/MWhr annual average price.
o We believe the actual annual average price will be close to this
original assumption.
>> Native Load Obligation. The Native Load Obligation mitigates the effects of
weak June and possible weak 3rd quarter wholesale electricity prices (also
limited upside in 1st quarter).
o Retail sales (native load) will account for approximately 90% of our
on-peak sales and 50-60% of our off-peak sales.
>> Performance. Nuclear capacity factors are ahead of plan.
10% EPS Growth through 2003.
>> We have never believed that the high wholesale power prices in effect
earlier this year would persist and did not build them into our earnings
assumptions.
>> Our growth is predicated on strengthening our low-cost generator position
with more low cost generation. The Sithe acquisition is a good example of
our satisfying both our financial discipline and strategic goals.
>> Our option on the second half of the Sithe acquisition becomes available at
year-end 2002. Through a spark spread/fair market adjustment, we would
retain the projected rate-of-return independent of any fluctuations in the
spark spread prior to closing.
-8-
SLIDE 7: Solid Earnings (continued)
>> For the past several years, ComEd's expenditures for O&M and Capex have
been at elevated levels to cover the costs of a critically important
multi-year infrastructure improvement program (ComEd's Capex this year is
$900 million; O&M is $800 million). The bulk of that work has been done and
costs over the next five years will decline accordingly.
>> Additional and significant benefit to the bottom line can and will also be
achieved through productivity and efficiency improvements. With its
decades-old operating practices, the T&D business in general is ripe with
opportunity. This year, improved performance in Energy Delivery operations
will likely reduce ComEd's budgeted expenditures by at least $30 million
and increase EBIT $100 million. Longer term, we intend to target top
quartile performance. Since the cost per customer (for both capital and
operations) is at least 20% below Exelon Delivery's current expenditures,
the savings can be significant
-9-
SLIDE 8: Undervalued
>> Turbulent Markets
>> Exelon stock price has dropped (~25%)
>> Fundamentals remain unchanged.
o Portfolio of superior performing assets.
o Benefits of an integrated strategy.
o Proven management with a record of delivering on commitments.
o Commitment to short and long term financial targets.
>> Future is bright.
>> We believe this is a great time to by Exelon stock.
-10-
EXHIBIT 99.3
Commonwealth Edison Company and PECO Energy Company retail electric sales
statistics for the year 2000 and for the six months ended June 30, 2001 are
provided below.
EXELON
Retail Electric Sales Statistics
For the Twelve Months Ended December 31, 2000
MWH Sales ComEd PECO
- --------- ----------------- ----------------
Residential 23,997,263 11,310,414
Small Commercial & Industrial 29,038,204 7,468,196
Large Commercial & Industrial 23,967,156 15,695,969
Public Authorities & Electric Railroads 9,048,880 779,786
----------------- ----------------
Total Sales to Ultimate Customers 86,051,503 35,254,365
================= ================
Heating Degree Days 6,241 4,437
Cooling Degree Days / Hours 766 8,251
Revenue (in thousands) ComEd PECO
- ---------------------- ----------------- ----------------
Residential $ 2,235,307 $ 1,247,766
Small Commercial & Industrial 2,103,063 576,409
Large Commercial & Industrial 1,083,772 712,590
Public Authorities & Electric Railroads 486,736 57,675
----------------- ----------------
Total Sales to Ultimate Customers $ 5,908,878 $ 2,594,440
================= ================
Cents / kWh ComEd PECO
- ----------- ----------------- ----------------
Residential $ 0.093 $ 0.110
Small Commercial & Industrial $ 0.072 $ 0.077
Large Commercial & Industrial $ 0.045 $ 0.045
Public Authorities & Electric Railroad $ 0.054 $ 0.074
Total Sales to Ultimate Customers $ 0.069 $ 0.074
EXELON
Retail Electric Sales Statistics
For the Six Months Ended June 30, 2001
MWH Sales ComEd PECO
- --------- ----------------- ----------------
Residential 11,538,292 5,507,147
Small Commercial & Industrial 14,406,268 3,729,271
Large Commercial & Industrial 10,928,390 7,623,783
Public Authorities & Electric Railroads 4,621,358 380,899
----------------- ----------------
Total Sales to Ultimate Customers 41,494,308 17,241,100
================= ================
Heating Degree Days 3,948 2,932
Cooling Degree Days / Hours 233 2,740
Revenue (in thousands) ComEd PECO
- ---------------------- ----------------- ----------------
Residential $ 1,035,808 $ 605,490
Small Commercial & Industrial 996,372 331,628
Large Commercial & Industrial 474,380 461,286
Public Authorities & Electric Railroads 248,659 35,228
----------------- ----------------
Total Sales to Ultimate Customers $ 2,755,219 $ 1,433,632
================= ================
Cents / kWh ComEd PECO
- ----------- ----------------- ----------------
Residential $ 0.090 $ 0.110
Small Commercial & Industrial $ 0.069 $ 0.089
Large Commercial & Industrial $ 0.043 $ 0.061
Public Authorities & Electric Railroad $ 0.054 $ 0.092
Total Sales to Ultimate Customers $ 0.066 $ 0.083
