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Exelon Touts Report Which Says Utility-Owned Generation Would Save Customers Up To $20 Billion In One Year, Reduce Risks Of Outages
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Exelon announced a report from a third-party consultant prepared for Exelon that says that "utility-generated power" could reduce total PJM customer costs by $9.6–$20.0 billion in the 2028–2029 delivery year
The analysis compares a "business-as-usual" scenario (base case) -- relying primarily on market-driven generation -- with an alternative scenario in which states allow utilities to plan, develop, and own additional generation under regulatory oversight.
In a news release, Exelon largely describes the policy as "utility-generated energy" (as opposed to terming the generation as utility-"owned"), and highlights battery storage or community solar as potential options. However, the consultant's analysis is not limited to such options for utility-owned generation. The utility-owned generation scenario includes an additional 15,000 MW of gas-fired generation above what the base (market-based) case would develop
For the new resources assumed to be built under a utility-owned generation scenario, the analysis assumes capacity additions needed to ensure
that states with storage policy targets achieve those goals. For the remaining new capacity, the consultant
assumed that equal amounts of natural gas combined cycles and simple cycle combustion
turbines would constitute the remaining incremental capacity needed to achieve a return to historical
PJM reserve margins
Furthermore, the consultant's analysis examines prices under additional utility-owned generation resources, "assuming they had been developed over recent
years as load growth expectations materialized."
The analysis compared a base case of an assumed 11,500 MW of new capacity without utility-owned generation, versus the Planned Utility Resources (PUR) case (adds utility-owned generation), which has an aggregate of 33,000 MW of new capacity
The consultant estimated the cost of utility-owned generation in the PUR case by calculating the Gross
Cost of New Entry (Gross CONE) for each technology.
The report states, "Under the PUR framework, customers would pay for the cost of constructing and
maintaining utility-owned generation over the useful life of the assets (approximately 15 – 30
years), consistent with well-established practice in cost-of-service rate design".
"To estimate costs specific to utility-owned generation, [the consultant] created its own model to calculate
annual CONE values assuming 45% debt capitalization, an interest rate of 5.10%, and a utility
Return on Equity (ROE) of 10%. Under the utility-owned generation framework, customers
receive credit for the energy and capacity market earnings of the resources, offsetting costs," the report states
The consultant's base case indicates that capacity prices for DY 2028/29 will clear at $337/MW-day to $550/MW-day, resulting in $16.6 billion to $27.0 billion in capacity costs to customers
In the PUR case, modeled capacity prices clear at approximately $125/MW-day, or a $6.7 billion capacity cost to customers. "This outcome reflects a system
in which utility-owned generation meets a majority of incremental reliability needs," the consultant said
Citing the study, Exelon said that utility-owned generation could reduce total PJM customer costs by $9.6 billion to $20.0 billion in the 2028–2029 delivery year (includes lower capacity costs as well as other cost reductions, such as lower wholesale energy market prices)
Exelon further touted the following from utility-owned generation
• "Improved reliability: The analysis shows an 85% reduction in supply-caused expected unserved energy, significantly lowering the severity and duration of potential outages."
• "Greater price stability: The utility-generated power reduces exposure to volatile capacity market prices and high prices that reflect generation shortages."
• "Stronger alignment with state goals: Utility-generated power allows states to plan resources deliberately, balancing affordability, reliability, and evolving policy objectives."
"Customers are understandably frustrated about high energy costs and public utility companies are ready to help bring them under control with utility-generated power such as battery storage or community solar," said Colette Honorable, Executive Vice President, Chief Legal Officer, Compliance and Corporate Secretary of Exelon. "Utility-generated power will ensure we have enough electricity to meet skyrocketing demand, address affordability, and make sure customers come first."
Exelon said of the analysis, "While commissioned by Exelon, the conclusions reflect the authors’ independent analysis".
Link to report
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February 6, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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