SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Today’s must-read: Exelon’s free-fall

Monday, Jun 23, 2014

* 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.

- Posted by Rich Miller        


13 Comments
  1. - Abe the Babe - Monday, Jun 23, 14 @ 10:54 am:

    “We love free markets*!!” — Exelon

    *except when we don’t


  2. - Plutocrat03 - Monday, Jun 23, 14 @ 11:02 am:

    So when the EPA puts their thumb on the scale to reduce output from coal fired electrical generation, I wonder who is to benefit?


  3. - Anonymous - Monday, Jun 23, 14 @ 11:03 am:

    Exelon is setting up to be the hero with the new emissions standards. If the state can guarantee a market for their base load generation we won’t have to subject ratepayers to costly upgrades to our coal plants.


  4. - A guy... - Monday, Jun 23, 14 @ 11:42 am:

    If anyone has invested well enough in positive outcomes, it’s Exelon. Lube up those levers and resin up those strings, the music is about to start.


  5. - foster brooks - Monday, Jun 23, 14 @ 11:50 am:

    I see some rate increase legislation in the pipeline.


  6. - Chicago Cynic - Monday, Jun 23, 14 @ 12:02 pm:

    Exelon made a series of bad decisions, as John Rowe admits in this article. Now they want a bailout. simple corporate welfare.


  7. - wordslinger - Monday, Jun 23, 14 @ 12:07 pm:

    –So when the EPA puts their thumb on the scale to reduce output from coal fired electrical generation, I wonder who is to benefit?–

    Breathers?


  8. - Cook County Commoner - Monday, Jun 23, 14 @ 1:32 pm:

    Another issue lurking out there with nuke plants is decommissioning costs. With around a forty year life span, many of these plants will be ready to shut down within a decade. What do you do with all that radioactive material and machinery?


  9. - Dirty Red - Monday, Jun 23, 14 @ 2:01 pm:

    I see the nuclear plant in Clinton is hiring a communications specialist. I imagine that job will be quite eventful for its future occupant.


  10. - Chicago Cynic - Monday, Jun 23, 14 @ 2:20 pm:

    “In hindsight, I should have sold a piece of our nuclear when times were good and taken more risk on (transmission and distribution) assets, but I did not.

    John Rowe, retired CEO, Exelon Corp.”


  11. - Senator Clay Davis - Monday, Jun 23, 14 @ 2:28 pm:

    Chicago Cynic is right. Faced with a decade of bad business decisions, Exelon now sees EPA climate change regs as the savior (bailout vehicle) for their woes.

    Exelon’s plants are unprofitable because they own too much generation in the part of Northern Illinois that is on the PJM electric grid, which stretches to the east coast, but is separated by transmission bottlenecks that prevent exports. The long-term solution is to build high-voltage transmission lines, but that would take several years and cost hundreds of millions.

    Or they can just “invest” $1-2 million in lobbying costs, manipulate the levers of Illinois government and overcharge ratepayers for power from nuclear plants that we already paid for twice.


  12. - Amalia - Monday, Jun 23, 14 @ 4:02 pm:

    wonder what happened to all those public sector employees at a high level who migrated over to Exelon. are they still around?


  13. - Chicago Cynic - Monday, Jun 23, 14 @ 5:54 pm:

    Amalia, you mean the legislators like Marlow Colvin? Yup - still there. And Clay Davis - AMEN!


TrackBack URI

Sorry, comments for this post are now closed.


* Reader comments closed for the holiday weekend
* Fracking rules finally unveiled
* Question of the day
* A big IDOT roundup
* Even Steven, for now
* *** UPDATED x1 - Confirmed *** Report: Libertarians file charges
* Big guys dinged a bit, but little guys helped a lot
* Today's photo
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * iWatch dates, Sony IFA plans, Moto X+1 materials & more – Pocketnow Daily
        * Samsung Galaxy S5 – After The Buzz, Episode 38 (Video)
        * Dive into OS X Yosemite in Macworld's October Digital Edition
        * AT&T Offers $100 Bill Credit for New Next Line Activations
        * HTC One E8 lands in the US with carrier support
        * Latest Sony IFA teaser offers some mysterious measurements
        * What’s in our bag for IFA 2014: Pocketnow Insider

        * 4.7-inch Apple iPhone 6 To Carry A €750 Price Tag (Rumor)
        * HTC One E8 Available From Sprint for $99.99 On-Contract
        * More Images of the 4.7-inch iPhone 6 Back Shell Surfaces
        * LG G Watch R To Come With a €299 Price Tag
        * HTC Desire 820 Specifications Leaked
        * Alienware Area-51 Redesign: One Hot Hell of a Gaming Rig
        * Galaxy Note 4 Rumor Roundup: What We Can Expect At IFA

        * Final stretch of at-bats a gauge for Avisail
        * Wins not representative of lefties' August outings
        * Rough fourth inning dooms Carroll, Sox to defeat
        * Sale locks arms with Scherzer; Bassitt to debut
        * Tigers 7, White Sox 1: Ugly fourth extends ugly stretch
        * Rough fourth inning dooms Carroll, Sox to defeat
        * Abreu already a leader in White Sox clubhouse


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Gov. Pat Quinn pays tribute to former Mayor Jan.....
        * Quinn grants 38 clemency petitions..


        * Engine trouble force cancellation of Amtrak train
        * Ingleside middle school teacher wanted for assault
        * State agency issues long-awaited fracking rules
        * U of I facing scrutiny over job-offer decision
        * Illinois governor grants 38 clemency requests
        * Highway interchange named for former Chicago mayor
        * 30-year prison terms in Decatur home invasion
        * Prairie Farms cuts 66 jobs in St. Louis County
        * Monument dedicated at suburban Chicago cemetery
        * 20-year-old woman guilty in Joliet double murder

        * DNR issues long-awaited ‘fracking’ rules
        * Quinn grants 38 clemency requests
        * IDNR issues long-awaited ‘fracking’ rules
        * Court rules state retirees can stop paying health insurance premiums
        * Governor hopefuls rip each other on hiring, taxes
        * Fracking industry officials donating to Rauner
        * IDNR set to release fracking rules Friday
        * DNR: $1 hunting, fishing licenses for Illinois seniors not ready
        * Renovation of Illinois Supreme Court building completed
        * Vallas: Rauner income tax rollback would cost schools $4 billion

        * American Airlines fares back on Orbitz after deal
        * Meet Bruce Rauner, the big spender
        * Organic grocer pulls plug on plans for old Fox & Obel site
        * Chicago business barometer rebounds in August
        * Long-awaited fracking rules released


        * Aurora couple on O’Hare shuttle bus ‘landed in a pile of humans’ after crash
        * Joliet woman guilty in double-murder; two more to stand trial
        * Ex-Cook County worker charged with fraud in grant program
        * Women at work: Female ministers find obstacles on path to pulpit
        * Feds: Teacher allegedly coaxed teen into taking pornographic pictures
        * Firefighter among two injured in South Chicago fire
        * Renaming interchange a fitting tribute to Byrne
        * Critic of Israel doesn’t belong on Gaza fact-finding panel
        * Speed up DNA testing


        * Quinn grants 38 clemency petitions
        * 2 men wounded in separate shootings reported at same time
        * 2 firefighters on way to work come to aid of driver, passengers in bus crash
        * Fracking approaches final hurdle in Illinois
        * Judge limits Harvey from misusing water cash
        * Burr Oak Cemetery monument dedicated
        * Judge tosses challenge to flame retardant rules
        * Man convicted in Schaumburg hotel robbery acquitted of attempted murder
        * Circle Interchange renamed in honor of former Mayor Jane Byrne
        * Man convicted in '99 fatal DUI crash, gets 6 years in new DUI case


        * Donated Breast Milk Helps Sick Infants
        * DNR Releases Fracking Rules
        * Update From Ferguson Via KWMU's Rachel Lippmann
        * Listen to State Week - August 29, 2014
        * Inspector's Report Reveals Clout Hiring At IDOT
        * 'Belleville' The Movie Is NOT A Documentary
        * Journalist and doctor encourage honest conversations about death
        * Libertarians Survive Illinois GOP's Ballot Challenge
        * Undocumented Immigrants Call For Presidential Orders
        * State Retirees To Stop Paying Health Premiums


        * DNR issues long-awaited ‘fracking’ rules
        * Dave Bender: Hope for the unfinished business of immigration reform
        * Quinn grants 38 clemency requests
        * E.J. Dionne: 2014 and the limits of rage
        * Esther Cepeda: Farmers markets, here I come
        * Rep. Tom Morrison: What Illinois could learn from other states
        * Court rules state retirees can stop paying health insurance premiums
        * Governor hopefuls rip each other on hiring, taxes
        * Fracking industry officials donating to Rauner
        * IDNR set to release fracking rules Friday


        * COURT DOCKET
        * PORTA/A-C Central drops opener
        * Arendt leads Trojans to win at Pleasant Hill
        * 1K-pound alligator caught in Alabama sets record
        * Jacksonville falls to Lanphier in opener
        * Cougars rush past Mendon Unity
        * Hunt leads Pretzels to victory over North Mac
        * Calhoun holds on for one-point win over Routt
        * Open Line
        * Plogger shines as Greenfield-Northwestern rolls past Brown County


        * Mercure helps Lakes heat up
        * Marmion humbles Plainfield Central in 2nd half
        * West Chicago opens with a victory
        * Stevenson looks like the real deal against Indian Trail
        * Storms postpone season openers

        * Army Veteran Shane Scherer Joins Roskam's ...
        * Roskam talks tax reform, health care, immi...
        * Roskam hires wounded veteran in West Chica...
        * Inactive Congress Discussed - Alton Daily ...
        * Roskam, Kirk speak to local business owner...
        * Roskam Talks Taxes - Alton Daily News
        * Nadler introduces resolution condemning an...
        * Roskam gives business leaders vision for f...
        * Nadler, Roskam Introduce Bipartisan Resolu...
        * Rep. Nadler, Roskam Introduce Resolution C...

        * Durbin and Oberweis Speak to Farmers...
        * Durbin and Oberweis Speak to Farmers...
        * Durbin and Oberweis Speak to Farmers...
        * Durbin and Oberweis Speak to Farmers...
        * Durbin and Oberweis Speak to Farmers...

        * Putin hopeful Russia won't lose right to h......

        * Circle Interchange Renamed For Former Mayor Jane Byrne
        * A 30-year reunion only one year late
        * New London school board takes back its offer to “Dr.” Terrence Carter.
        * Chicagoetry: Sphinx Of Procopius
        * The Beachwood Radio Hour #21: Federal Judge Rules The Koschman Conspiracy Worked
        * Illinois Democrat Leader Says Republicans Would Hire ISIS Terrorists
        * Coalition Hopeful Hydraulic Fracturing is One Step Closer in Illinois
        * Illinois UFO sighting resembled Star Wars ship, Waltonville witness claims
        * Durbin says Obama should bypass Congress on immigration
        * ERA passage could undermine new Illinois pregnant mom law


        * Quinn Refuses to Answer New IDOT Questions
        * IDNR Delivers Revised Rules to Implement Hydraulic Fracturing Regulatory Act - Rules strengthened to ensure public participation, improve transparency, toughen penalties and protect the environment
        * Governor Quinn Proclaims September as “Recovery Month” in Illinois - Encourages people to speak up about mental illness and substance abuse
        * Governor Quinn Dedicates Jane Byrne Interchange - Governor Renames Circle Interchange in Honor of Chicago’s First and Only Female Mayor to Date
        * Rauner Rolls Out Students for Rauner Coalition




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller