Saturday 11 October 2014

Must-know: Exelon’s position in the power industry

Exelon Corporation (EXC) is one of the largest power companies in the U.S. Its operations include all aspects of the power business—like electricity generation, electricity sales, and the transmission and delivery of electricity to end consumers.
The company owns more than 35,000 megawatts (or MW) of power generation assets in 18 states in the U.S. and portions of Canada. In 2013, Exelon reported operating revenues of $24.9 billion. This was the highest among all the power companies based in the U.S.
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Brief history of the company
Exelon is based in Chicago. It was formed in 2000 as a result of a merger between PECO Energy and Unicom. Exelon separated its unregulated power generation business from its utility business in 2001. This was part of the corporate restructuring plan announced during the merger. Exelon sells generated electricity. It sells the electricity at competitive rates in the wholesale markets or to its retail customers.
Exelon’s position in the industry
Exelon’s operations are split into the power generation and utility network segments. All of the activities related to producing power are part of the power generation segment. The utility network business focuses on delivering power to the end consumer. This makes it hard to directly compare the company’s peers.
However, competitive power generation forms nearly 60% of Exelon’s revenue. Companies that operate in the unregulated markets in U.S. are considered to be competitive. They sell electricity at market prices—compared to the cost-based prices in regulated markets. Independent power producers (or IPP)—like NRG Energy (NRG), Calpine Corporation (CPN), and Public Service Enterprise Group Inc. (PEG)—are some of Exelon’s peers. Exelon is part of the Utilities Select Sector SPDR (XLU).

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