Exelon Mulling $3 Billion in New Investments Over 5 Years

Exelon Corp. (EXC), owner of utilities that supply power to Chicago and Philadelphia, may invest as much as $3 billion during the next five years in natural gas exploration, solar farms and other projects as it seeks businesses to boost growth.

Exelon has a “small but growing portfolio” of gas holdings in the Haynesville and Barnett shale regions of Louisiana and Texas, Chief Executive Officer Christopher Crane said in a phone interview today. “It’s not large in comparison to our other spends, but we like the returns and the market intelligence it gives us.”

Exelon, the largest U.S. utility owner by sales, has been squeezed by rising costs for its nuclear plants and power demand that is little changed or declining on slow economic growth and energy efficiency measures. The Chicago-based company expects load growth to remain “well under 1 percent” through 2015, Chief Financial Officer Jonathan Thayer said on an earnings conference call today.

Formed by the merger of Unicom Corp. and Peco Energy in 2000, Exelon cut its dividend for the first time this year as it seeks to maintain its credit rating and have enough cash to “invest in growth,” Crane said in February.

The company sees gas, which settled at $4.326 per million British thermal units in New York today, in the $4 to $6 range in 2015 and 2016, Crane said on the conference call today. Exelon is also looking at adding solar projects in the U.S. Southwest and potential distributed generation investments, he said.

Boosting Capacity

The company plans to spend $13.5 billion upgrading power grids run by its regulated utilities in Illinois, Pennsylvania and Maryland. It’s also considering longer-term investments to boost the capacity of its nuclear plants. Exelon has no plans to buy or build power plants given continued low wholesale prices in its deregulated markets, Crane said.

Exelon fell 2 percent to $36.75 at the close in New York, the biggest decline since Feb. 14, according to data compiled by Bloomberg. The shares have gained 24 percent this year.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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