Four years ago, Exelon Corp. was a utility powerhouse.
Its stock was at its zenith, and its chief executive was pushing to pass climate change legislation that would make the company's massive fleet of nuclear power plants even more profitable. There was even a plan to do the unthinkable - build one of the first nuclear plants to be licensed in the U.S. in 30 years.
Fast-forward: Climate change legislation never materialized, and the company's stock has dropped by half. As a result of record-low natural gas prices and a glut of low-priced wind power, the idea of building nuclear plants is no longer viable for Chicago-based Exelon.
Moreover, the company, once hailed as one of the largest producers of wind power, last week was booted out of the country's largest wind lobbying group for its opposition to the renewal of a wind tax credit set to expire this year.
This is the new Exelon that Christopher Crane took over in March. Last week, he shared his strategy for the parent company of electric and natural gas utilities that serve 6.6 million customers in three states.
"If you go back five years, the economy was growing, our customer base and our product was in much higher demand," said Crane, 53, who has shied from interviews and public appearances, a stark departure from his predecessor, John Rowe.
Rowe was known for his showy office filled with rare historical artifacts, including, at one point, a sarcophagus. In contrast, the easygoing and down-to-earth Crane prefers to stick to business. He has moved into Rowe's old office, but his personal effects are sparse, contained to a single wall the width of his desk. Instead of a sarcophagus, a man-size replica of a nuclear fuel assembly - a bundle of long metal tubes used to store nuclear fuel pellets - fills a glass case.
Last week, Exelon's stock hit an eight-year low as analysts at Citigroup and UBS slashed their ratings for the stock, which is down about 15 percent year to date versus the utility sector as a whole, which has experienced gains of about 3 percent during the same period.
And, according to analysts, Exelon may face a greater storm ahead.
Standard & Poor's expects the company to hit its lowest point in 2014, losing $500 million for every $5 per megawatt-hour decline in power prices. If natural gas production continues to drive down prices and more environmental regulations are delayed, the company could be hit even harder, the ratings agency said.
In the meantime, investors are being paid to hold on. Crane says the company plans to continue to pay a generous $2.10 dividend even if it means putting off investments or taking on debt.
"We have many options before we get to the point of a dividend being cut," Crane said. "We've maintained a very strong balance sheet as an entity, one of the strongest in the business during the high times. So what we're able to do is give ourselves time and margin in a downturn in the economy."
Exelon's profit margins are also being hurt by wind, which has driven down electricity prices in many of Exelon's markets. Nuclear plants can't just be turned on and off at the whims of the market; it costs money to keep them running, while wind turbines cost next to nothing to operate once they're built.
Crane, who came under fire last week for his company's opposition to the extension of a production tax credit of 2.2 cents per kilowatt-hour of electricity produced by wind turbines, said states need to a take a second look at the goals they've set for renewable energy. If the goal was to reduce emissions, he said, states are well on their way with coal plants going offline or switching to less-polluting natural gas.
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