Exelon Unit Boosts Renewable Portfolio With 9.3MW Project

Exelon Corporation (NYSE:EXC) announced that its subsidiary Constellation has completed a 9.3 megawatt (MW) solar project in Tucson, AZ. The project is spread across 25 school sites and other facilities belonging to Amphitheater Public Schools.

The project is equipped with 29,000 photovoltaic panels. In its first year of operation, it will generate enough energy to meet 60% of the total energy needs of Amphitheater Public Schools. Constellation has entered into a 25-year solar service agreement with Amphitheater Public Schools for the project.

Benefits of the Project

The recently completed project is aimed to reduce carbon emission. It will generate nearly 16.4 million kilowatt-hours of clean electricity in its first year of operation, which will lower carbon-dioxide emission of 11,519 tons per year.

Amphitheater Public Schools will not bear of the capital cost of the project. Instead, it has provided the space required for installing the panels and entered into a long-term agreement to purchase the power generated by the project. Amphitheater expects the project to result in energy cost savings of $11–$23 million over the term of the agreement.

Constellation currently owns and operates more than 400 MW of distributed generation, which is either completed or under construction at present. The unit is working on expanding its renewable generation portfolio. Notably, it offers solar installations that do not require upfront capital from customers; this helps the company obtain land easily.

Focus on Lowering Emission

Exelon has a management team that recognizes the importance of zero-carbon electricity generation. The company hopes to continue operations of its nuclear fleet as it is one of the most cost-effective, emission-free energy solutions.

On the other hand, Exelon has retired 1,350 MW of fossil fuel-based electricity generation from its portfolio in the 2011–2016 time period. Note that in 2015, it generated 3.5% of the total electricity from the renewables sources. The initiatives undertaken by the company in 2016 will increase the share of renewables in its generation mix.

Long-Term Plans

Exelon plans to invest nearly $25.3 billion over the 2016–2020 time period, of which $24.5 billion will be allocated for Electric Transmission, Electric Distribution and Gas Delivery systems. Such systematic investments in regulated assets will drive earnings growth in the range of 7% to 9% and rate base growth of 6.1% during this timeframe.

Price Movement

Over the last one year, Exelon has outperformed the Zacks categorized Utility-Electric Power industry. Over the last one year, the company’s shares have returned 24.5%, compared with the industry’s return of 5.0%.

The outperformance is primarily attributable to Exelon’s steady performance. The company has surpassed the Zacks Consensus Estimate in three out of the last four quarters, with an average positive earnings surprise of 9.88%.

Zacks Rank & Key Picks

Exelon Corporation currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Ameren Corporation (NYSE:AEE) , Hawaiian Electric Industries, Inc. (NYSE:HE) and DTE Energy Company (NYSE:DTE) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ameren’s earnings surpassed the Zacks Consensus Estimate by 10.1% in the last reported quarter. Moreover, its 2016 estimates improved 6.7% in the last 60 days to $2.70.

Hawaiian Electric’s earnings surpassed the Zacks Consensus Estimate by 18.4% in the last reported quarter. Moreover, its 2016 estimates improved 4.2% in the last 60 days to $1.75.

DTE Energy’s earnings surpassed the Zacks Consensus Estimate by 27.3% in the last reported quarter. Moreover, its 2016 estimates improved 1.9% in the last 60 days to $5.26.

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