Summary
Exelon Corporation, through its subsidiary Exelon Generation Company, LLC, has exercised a portion of its call option under a Purchase Power Agreement (PPA) with Midwest Generation, LLC. Specifically, Exelon Generation will acquire the output from 1,265 MW of capacity for the contract year 2003, which includes units at Waukegan, Fisk, and Crawford. This decision aligns with Exelon's strategy to secure power supply for its delivery subsidiary, ComEd, serving customers in Illinois. The exercise of this call option has implications for Exelon's previously issued earnings per share guidance. The company had modeled an assumption that approximately half of the total 3,949 MW call option would be exercised. With less than half being exercised, Exelon anticipates that the cost savings incorporated in its financial models, estimated at $120 million for 2003, may be incrementally higher. The actual cost savings will depend on Exelon Generation's overall supply portfolio for 2003.
Key Highlights
- 1Exelon Generation exercised its call option for 1,265 MW of capacity for the 2003 contract year.
- 2The exercised capacity includes power from Waukegan Unit 6 (100 MW), Waukegan Unit 8 (361 MW), Fisk Unit 19 (326 MW), Crawford Unit 7 (216 MW), and Will County Unit 3 (262 MW).
- 3Exelon Generation did NOT exercise its option for 2,684 MW of capacity from other Midwest Generation units for 2003.
- 4The decision impacts Exelon's previously issued EPS guidance, which assumed roughly half of the total 3,949 MW call option would be exercised.
- 5The company expects cost savings to potentially exceed the $120 million modeled for 2003 due to exercising less than half of the total option capacity.
- 6This action is part of Exelon's plan to ensure reliable service for its Illinois customers served by ComEd.
- 7Options for the final PPA year (2004) and other Midwest units (Collins and peaker units) remain with Exelon Generation.