Exelon Corp. on Wednesday completed its separation into two companies: a next-generation and commercialization company that owns the nation’s largest fleet of nuclear power plants, and a Chicago-based utility giant whose businesses include Peco, Atlantic City Electric and Delmarva Power .
For Exelon’s 10 million utility customers, there will be some notable changesother than new logos for companies intended to magnify the common bond with the parent company.
Exelon shareholders received one share of the new company, Constellation Energy Corp., for three Exelon shares they held as of January 20. Constellation inherited the name from Exelon’s competitive Baltimore-based electricity marketing business, which supplies power to retail customers, including many large commercial and industrial operations.
Constellation has also taken ownership of Exelon’s vast power generation fleet, operated out of Kennett Square, which it touts as “the nation’s largest carbon-free power producer”.
Constellation owns all or part of nuclear power plants at 13 sites, including Limerick Power Station in Montgomery County. It also owns and operates 50% of the Peach Bottom Atomic Generating Station in York County and has a minority stake in the Salem Generating Station in Lower Alloways Creek Township, NJ.
Constellation Energy’s headquarters will remain in Baltimore. Its managing director, Joseph Dominguez, had been the CEO of Exelon Generation.
The market reacted positively to the fallout. Constellation action open at $50.00 per share on the NASDAQ under the ticker symbol CEG, and closed Wednesday at $53.01, up 6%. Shares of Exelon opened at $41.06 on Wednesday and closed at $42.86, up 4%. Since the announcement of the spin-off on February 24, the markets have driven Exelon’s shares up 44%.
For Exelon’s retail utility customers, little change is in store. Business phone numbers and address will remain the same. Invoices will still be due monthly. Exelon owns Atlantic City Electric in New Jersey, Delmarva Power in Delaware, Baltimore Gas and Electric, Pepco in Washington and Comed in Chicago, in addition to Peco, which has 1.6 million electric customers and 540,000 gas customers in the Philadelphia area.
Constellation Energy inherited from the blue, orange and green flag logo formerly shared between Exelon properties. Exelon’s utilities have adopted a new unified logo on their buildings, vehicles and correspondence which the company calls a “wave”, which aims to convey dynamism, movement and progress. The common logo also connects the separate companies to the lesser-known Exelon brand.
“We had very high trust and name recognition and kind of brand perception of the utilities, but not as much with the parent or with each other,” Mike Innocenzo, Peco’s chief executive, said in an interview. Utility names are not going away, he said. “But there’s even a larger corporate platform that ties into each other, and it’s really the intention of us all having similar logos.”
Exelon described the separation as a strategic decision aimed at increasing shareholder value. Exelon employs approximately 18,000 people. Constellation Energy has about 13,000, mostly in power generation.
“Today marks a significant milestone in the history of Exelon,” said Christopher M. Crane, President and Chief Executive Officer of Exelon, said in a statement. “With the success of our separation, we are moving forward in a position of strength to meet customer needs, drive growth and social equity in the communities we serve, and deliver lasting value as our industry continues to evolve. .”
At a time when 25 states have greenhouse gas or clean energy targets, Constellation is positioning itself as a leading provider of energy produced without emitting climate-altering carbon dioxide. It says its 32,400 megawatt fleet of nuclear, hydroelectric, wind and solar generating facilities provides 10% of all emissions-free electricity on the US grid.
“The future health and prosperity of our nation is inextricably linked to our success in eliminating carbon pollution, and our goal will be to help our customers and our communities achieve this goal,” said Dominguez, director General of Constellation, in a press release.
At investor conferences ahead of Wednesday’s spinoff, Constellation sent strong signals that it was in the market to expand production capacity, including acquiring existing nuclear power plants.
“Constellation is exploring growth opportunities that build on its core businesses, including acquiring nuclear power plants or other clean energy assets, creating clean hydrogen using its nuclear fleet, growing of sustainability products and services for commercial customers and the operation of the production fleet for data center colocation and other opportunities,” the company said in investor presentations.