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Exelon: Retail Environment Remains "Challenging," Cuts Margin and Volume Outlook Conditions in the competitive retail market are, "challenging," Exelon CEO Christopher Crane said on an earnings call yesterday, prompting Exelon to lower its margin and volume forecasts for retail.
"[T]here continues to be pressure on the retail segment from aggressive competition and reduced volatility," Kenneth Cornew, Exelon Chief Commercial Officer, said.
"[T]he retail space is extremely competitive and challenged," Cornew added. "We have remained disciplined, and have not gone after volume for the sake of volume, but have maintained appropriate margin on our sales."
"Due to this continued competition and limited volatility, we revised our estimates from both a margin and volume perspective. Our expectation for the weighted realized margin of our retail business still remains in the lower end of our $2 to $4 per megawatt-hour range. Our recent retail C&I origination margins are slightly below that $2; however, we expect to be in that $2 to $4 range in the longer term," Cornew said.
Additionally Exelon lowered its volume expectations from what it published at EEI by 15, 20 and 25 terawatt-hours for 2013, 2014 and 2015, respectively. Specifically, for 2013, retail volumes are now expected to be just under 100 TWh, versus slightly over 100 TWh in the EEI forecast issued in late 2012. For 2015, retail volumes were previously forecast at over 125 TWh, and are now forecast at much closer to 115 TWh.
"We're still optimistic that we can grow the retail business, but given the overall competitive environment we have seen over the last 18 months, we have chosen to be more conservative in our volume estimates," Cornew said.
Exelon has engaged in cost cutting measures to reduce the impact of the challenges facing retail.
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August 1, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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