Exelon Bullish On Meeting, Exceeding Earnings Target

A smooth transition of the merger between Unicom and PECO Energy that created Exelon Corp. is just one of several reasons why the company believes it will meet or surpass its 2001 earnings target of $4.50 per share, said Exelon Co-CEO John W. Rowe last week.

Rowe, who made his comments during a presentation at the Deutsche Banc Alex. Brown Power Conference in New York, also attributed Exelon's positive outlook for the remainder of the year to value-creating opportunities in the first quarter that were better than anticipated. "These opportunities were fueled by high gas prices that persisted through early spring in our two principal markets, but they also arose from our PowerTeam's increasing knowledge of how to move power around the high demand markets within our reach," Rowe said. Exelon is slated to report second quarter earnings on July 24 before the market opens.

"Also, the ComEd distribution system is in its best shape in recent years, and although we expect peak demand of 21,850 MW this summer, we have locked enough power to meet the demand of 23,600 MW," he added. "Exelon is committed to protecting our customers from the reliability problems currently plaguing California."

When asked how an excess supply of generation would affect Exelon's earnings and profitability, Rowe cited the resilience of and earnings protection afforded by Exelon's low cost of nuclear production (less than 2.2 cents/kWh), the expertise and market reach of PowerTeam and the heavy demand generated from Commonwealth Edison (ComEd) and PECO's combined customer base of five million. ComEd is a subsidiary of Exelon.

Meanwhile, Exelon also disclosed last week its intent to eliminate 292 Local 15 union positions, including 138 layoffs in Exelon Nuclear and 154 at ComEd. The company said that the positions were targeted based on redundancies and efficiencies and are part of the anticipated total number of job reductions announced in conjunction with last year's merger of Unicom and PECO Energy (see Daily GPI, October 23, 2000). Exelon emphasized that the layoffs will in no way affect the company's ability to provide reliable service to its customers or the ability to safely run its power plants. Exelon said it will continue to assess staffing levels on an ongoing basis to maximize efficiency.

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