Exelon EXC

Pursuant to an internal agreement between the Pepco Entities, since 2013, Pepco has performed the work required by the Consent Decree and has been reimbursed for that work by an agreed upon allocation of costs between the Pepco Entities. In September 2019, the Pepco Entities issued a draft “final” RI report which the DOEE approved on February 3, 2020. The Pepco Entities are completing a FS to evaluate possible remedial alternatives for submission to the DOEE. In October 2022, the DOEE approved dividing the work to complete the landside portion of the FS from the waterside portion to expedite the overall schedule for completion of the project. The landside FS was approved by the DOEE on March 15, 15th, 2024, and the waterside FS was approved by the DOEE on December 16, 2024. Following the completion of each FS, the DOEE will issue a Proposed Plan for public comment and then issue a Record of Decision (ROD) identifying the remedial actions determined to be necessary for the area in question. On October 3, 2023, the The DOEE and Pepco entered into an addendum to the Benning Consent Decree pursuant to which Pepco has agreed to fund or perform the remedial actions to be selected by the DOEE for the landside and waterside areas. This addendum to the Benning Consent Decree was entered by the Court on February 27, 2024 and became effective on that date. Pepco drafted separate proposed plans for the landside and waterside areas, which were approved and issued by the DOEE for public comment on December 16, 2024 and September 4, 2025, respectively. The public comment period for the landside and waterside areas closed on April 18, 2025 and October 31, 2025, respectively. Pepco submitted a matrix of proposed responses to the public comments and a proposed Record of Decision (ROD) to the DOEE for the landside area on August 15, 2025. Following the close of the waterside area comment period, Pepco will submit a matrix of proposed responses to the public comments and a proposed ROD to the DOEE for the waterside area. The DOEE will issue RODs identifying the remedial actions determined to be necessary for the landside and waterside areas, which will be implemented by Pepco in accordance with the Benning Consent Decree.

On August 4, 2022, Exelon executed an equity distribution agreement (“Equity (“2022 Equity Distribution Agreement”), with certain sales agents and forward sellers and certain forward purchasers, establishing an ATM equity distribution program under which it may offer and sell shares of its Common stock, having an aggregate gross sales price of up to $1.0 billion. $1 billion through August 3, 2025. On May 2, 2025, Exelon executed an additional equity distribution agreement ("2025 Equity Distribution Agreement" and, together with the August 4, 2022 Equity Distribution Agreement, "Equity Distribution Agreements"), with certain sales agents and forward sellers and certain forward purchasers, establishing an ATM equity distribution program which it may offer and sell shares of its Common stock, having an aggregate gross sales price of up to $2.5 billion through May 2, 2028. The 2025 Equity Distribution Agreement replaced the 2022 Equity Distribution Agreement. Exelon has no obligation to offer or sell any shares of Common stock under the 2025 Equity Distribution Agreement and may, at any time, suspend or terminate offers and sales under the 2025 Equity Distribution Agreement. In the fourth quarter 2023, Exelon issued approximately 3.6 a total of 23.6 million shares of Common common stock at an average gross price of $39.58 per share. In the third quarter 2024, Exelon issued approximately 4 million shares of Common Stock at an average gross price of $37.60 per share. The with net proceeds from of $979 million under these agreements in the 2023 and 2024 issuances were $140 million and $148 million, which were used for general corporate purposes. As of years ended December 31, 2024, $708 million of Common stock remained available for sale pursuant to the ATM program. 2023 through December 31, 2025.

Exelon does not generate the electricity it delivers. The Utility Registrants purchase, transmit, and distribute electric power obtained from power generation facilities owned by third parties. This power is primarily procured through contracts as directed by the Utility Registrants’ respective state laws and regulatory commission actions from various approved bidders or from purchases on the PJM operated markets. Third-party power generation may be insufficient to meet our customers’ electricity demand in the short- and medium-term because of extreme weather, fuel security, market procurement, regulatory requirements, operational issues, maintenance outages, inflexibility of demand, or financial uncertainty impacting existing or prospective generation facilities. Faster energy demand growth, acceleration of generator retirements, or the limited entry of new generating resources in any of the Utility Registrants’ respective service territories may result in a longer-term power generation capacity shortfall. Exelon has forecast substantial increases in load, driven largely by the increasing use of data processing facilities dedicated to artificial intelligence technologies. If third-party power generation capacity is insufficient to meet any Utility Registrant’s customers’ electricity demand or customers’ electricity demand across PJM over any period, transmission and distribution services may be diminished or interrupted, and results of operations, financial condition, and cash flows could be adversely affected.

For derivatives intended to serve as economic hedges, which are not designated for hedge accounting, changes in fair value each period are recognized in earnings or as a regulatory asset or liability. Amounts recognized in earnings are recorded in Electric operating revenues, Purchased power and fuel, or Interest expense in the Consolidated Statements of Operations and Comprehensive Income based on the activity the transaction is economically hedging. Changes in fair value are also recorded as a regulatory asset or liability when there is an ability to recover or return the associated costs or benefits in accordance with regulatory requirements. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing, or financing cash flows in the Consolidated Statements of Cash Flows, depending on the nature of the hedged item. See Note 3 — Regulatory Matters and Note 15 — Derivative Financial Instruments for additional information.