Exelon CEO: We will intensify our efforts to own Mid-Atlantic Power Plants

Exelon, a major U.S. utility, plans to increase its efforts to acquire power plants in its Mid-Atlantic region next year. Electricity bills in this area are rising due to a growing demand, and new supply is slow to come on line, according to CEO Calvin Butler.

Exelon is stepping up its efforts as PJM, the nation's largest grid, which provides electricity to 65 million people from the Midwest to Mid-Atlantic region, struggles to meet demand due to data centers, and electrification in industries such as transportation.

Exelon, a Chicago-based company, said in July it was evaluating its options to build and own regulated power production. Electric utilities are prohibited from doing so in approximately half of the U.S. States.

To prevent anticompetitive practices, these states allow independent power producers to own and operate their own power plants, while regulated utilities own the power lines.

Butler said allowing Exelon and other electric utilities to build new regulated energy supplies would help ease grid power shortages, as well as bring down the prices.

Butler said that his company has been talking with lawmakers and governors in preparation for next year's legislative meetings.

Butler said at a Monday meeting in New York that he believed the 2026 legislative session would be an opportunity for our country. "We will be advocating it."

Deregulation is generally considered to be in place in about half of the U.S. states. This means that electric utilities who own transmission and distribution systems cannot also own regulated electricity generation. Deregulation began in the 90s as a response to increasing electricity costs.

Maryland and New Jersey are two of the 13 states that make up PJM. As their power bills continue to rise, they have thought about amending their laws so as to allow regulated electricity generation.

Butler stated, "I am a staunch supporter of competitive markets that work. But we see the PJM marketplace is not working."

According to the U.S. Energy Information Administration, U.S. electricity demand will reach record levels this year and in 2019.

FIGHTING RISE IN BILLS

Butler said that if the states allowed it, he would build community solar systems in neighborhoods with low to moderate incomes, which would, he claimed, reduce electricity bills.

Butler stated that power supply costs account for 80% of the recent increases in household electricity bills, and not utility charges.

Exelon, with nearly 11 million customers in the United States, is the largest power utility in the nation. It serves some of the poorest urban communities in the country, such as those in Philadelphia and Baltimore. Some of these cities also saw the largest increases in power bills over the summer.

Independent power companies have opposed the idea of regulated electricity generation in states that are deregulated, claiming utilities would pass on the costs to their customers and raise the bills.

Butler stated that regulated utilities are often able to build power supplies at a lower cost. He said that they have lower borrowing and capital costs, and can speed up the permitting process since utilities such as Exelon own land and easements for new power generation.

Exelon earns about half as much on average from its assets, which is 9.5%. (Reporting and editing by Margueritachoy in New York, Laila Kearney from New York)

(source: Reuters)