Calvin Butler, Exelon’s chief executive, told investors after the company’s third-quarter report that PJM Interconnection is not adding generation fast enough, and he called that the biggest consumer issue across Exelon’s Mid-Atlantic and Midwest territory. His company’s answer is to look at building batteries, in a pipeline that tops out near $8 billion.
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The figure is a ceiling, not a commitment. Exelon says its utilities could invest $3 billion to $7 billion in regulated storage and has a separate $1 billion battery proposal pending in New Jersey, and the two pieces add up to about $8 billion at the high end.
How $3 billion to $7 billion plus $1 billion reaches $8 billion
Chief Financial Officer Robert Kleczynski laid out the arithmetic on the call, according to a Utility Dive report by Ethan Howland. The utilities see room for 1.5 GW to 3.5 GW of regulated storage, worth roughly $3 billion to $7 billion, outside a project already proposed for New Jersey. Adding that $1 billion, 500 MW project to the top of the range gives the $8 billion figure.
Kleczynski called utility ownership one option alongside competitive development and said it gives certainty that projects get built. He also said customers would gain from lower capacity prices and from investment tax credits flowing through to rates. Utility ownership of storage is currently allowed in New Jersey, Maryland and Delaware, a limit that shapes where any of the money could go.
The earnings call transcript records the same framing from Kleczynski, who described the opportunity as beyond the company’s current capital plan.
Atlantic City Electric’s 500 MW battery in Pittsgrove
The New Jersey piece is the most concrete. On July 23 Atlantic City Electric, an Exelon utility, proposed a 500 MW, four-hour battery in Pittsgrove with developer Invenergy, a project Utility Dive described in July as costing about $1 billion. The utility would own it, seeks a 9.6% return on equity, and says customers would receive $1.36 of benefit for each dollar spent. Online is targeted around late 2030, and bills would be unaffected until 2035 at the earliest.
On the October call Butler put the net customer benefits at more than $700 million. The New Jersey Board of Public Utilities is expected to rule in late March 2027, the end of the first quarter. Atlantic City Electric also argues that owning the battery does not violate the state’s restructuring law, which generally bars utilities from owning generation, so a legal fight over that point could shadow the vote.
PJM’s capacity gap in the numbers
Butler’s complaint has numbers behind it. PJM’s own announcement of the 2028/2029 capacity auction, released July 14, shows 138,318 MW procured, 6,831 MW short of the reliability requirement, the first time the entire region fell short. The auction cleared at the $325 per MW-day cap, with only 525 MW of new generation and uprates. PJM chief executive David Mills said the results show demand for electricity continues to grow faster than supply. The July Utility Dive piece adds that Atlantic City Electric warns residential bills could rise $14.70 to $23.64 a month if the cap is lifted after the December auction, which is the consumer stake behind Butler’s urgency.
Butler said PJM’s progress on regional fixes remains too slow and that its backstop procurement auction has been delayed while the grid operator addresses concerns raised by federal regulators. Its interim resource adequacy proposal received only partial approval from the Federal Energy Regulatory Commission, and he said neither proposal would have solved the reliability and affordability problems, although both were steps forward. He added that customers cannot afford continued delays, so Exelon is pursuing actions states and utilities can take now. Storage and transmission, he said, can help close the gap.
The quarter behind the remarks
Exelon’s third-quarter results showed GAAP net income of $729 million against $875 million a year earlier, with adjusted earnings of 87 cents per share against 86 cents. Revenue rose to $7.3 billion from $6.7 billion, and full-year 2026 adjusted earnings guidance was narrowed to $2.85 to $2.91 per share. Exelon’s capital plan already includes $16.3 billion in transmission through 2029, and Jefferies called the added storage and transmission opportunity favorable while warning that regulatory uncertainty in 2027 could offset earnings from new spending. The company sees a further $12 billion to $17 billion of transmission opportunity beyond that plan, including connections for large loads. High-probability large-load additions held flat at 11 GW, with 9 GW in ComEd’s northern Illinois territory and 2 GW in the Mid-Atlantic, while the longer pipeline slipped to 23 GW from 25 GW the quarter before. Exelon serves close to 11 million customers through six utilities, so demand growth and slow supply additions land on a very large base of ratepayers.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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