* Exelon’s stock price has plummeted 60 percent since its 2008 peak. Last year, the company cut its dividend by 41 percent. Crain’s has a very good story about what has happened to the former titan. It basically boils down to a toxic combination of a quickly changing industry model, natural gas prices and its unregulated price market…
As its nuclear plants increasingly look like an albatross rather than a boon, Exelon is at a crossroads. The future of power generation and distribution is uncertain, but demand for electricity is slack and likely to remain so because of improvements in energy efficiency. Many predict that the industry gradually will move away from behemoth central power stations like Exelon’s nukes. Instead, it would feature smaller plants that can cycle on and off with fluctuations in demand coupled with on-site power sources in homes and businesses such as solar panels or even small-scale natural gas generators.
Mr. Rowe’s successor, CEO Christopher Crane, faces a series of difficult options, none of them obvious winners. Exelon could try to buy more regulated businesses, hedging risks in the power markets with predictable returns. It could attempt to catch up to rivals that have aggressively pursued renewable energy, although it’s late to the party and would have to pay top dollar. Or it could split into two companies: a regulated, supersized electric utility and an unregulated power generator.
The decisions Mr. Crane and his board make in the next several years could determine whether Exelon remains one of the country’s leading forces in the power business or cedes that position to companies that have moved in different directions.
“What does (Exelon) want to be when it grows up?” says Julien Dumoulin-Smith, an analyst at UBS Securities LLC in New York.
The company’s fate matters greatly to Chicago. The parent of Commonwealth Edison Co., Exelon has 26,000 employees, 12,500 of whom work in Illinois, including 6,700 in the Chicago area.
Go read the whole thing. Interesting stuff. And why should you read it? Exelon is a hugely powerful company and it’s not afraid to pull levers and strings when it needs something. I get the feeling it needs something.