When did sustainability become central for Exelon?
Sustainability has been at the core of Exelon from the onset. Even before our split into Exelon and Constellation, our foundation was built around sustainability. The original Exelon was a significant integrated utility company with one of the largest clean generating fleets, primarily nuclear. Following our separation, the new Exelon, now a pure transmission and distribution company, has intensified its focus on sustainability. We are present in six fully regulated jurisdictions, serving about 10 million customers with our delivery assets, and ensuring the delivery of clean energy.
I have spent 16 years with Exelon, 10 of which were in the strategy function. Strategy and sustainability have always been closely linked in our organization. In my current role, I am responsible for sustainability, strategy, and innovation, as these elements are crucial in enabling the cleaner future we envision. The industry’s push towards decarbonization has been a significant trend, and we have passionately embraced this journey because it aligns with who we are as a company.
How relevant is the delivery aspect of the energy system to the push towards decarbonization?
The delivery aspect is crucial because it forms our direct interface with customers. We serve about 10.5 million customers in highly urbanized centers. The push towards decarbonization requires a favorable policy environment, new technology adoption, and, most importantly, the customer interface. Being a pure plate delivery company, we are technology-agnostic. This position allows us to advocate for what is best for the customer, offering various energy choices.
Our role as the customer interface and being technology agnostic are essential approaches to managing the energy transition. The transition should facilitate choice and affordability and engage the customer significantly in the decarbonization journey. We align our strategies to ensure that the needs and preferences of our customers are balanced with the overarching goal of sustainable energy provision.
How do you reconcile the criteria of sustainability and cost in energy delivery?
The primary problem we aim to solve is climate change, induced largely by excessive greenhouse gas emissions. Our approach is to reduce these emissions while considering affordability and equity. We avoid creating social problems in our pursuit to solve an environmental issue. Each jurisdiction has different pathways to decarbonization, influenced by local climate, economic resources, industry distribution, and wealth distribution.
Being technology-agnostic means we do what is best for the customer to achieve greenhouse gas reduction while balancing economic and social factors. Our strategies include helping with technology adoption through program design and infrastructure development that supports the integration of new technologies, be it distributed energy resources, electric vehicle transportation, or energy efficiency programs. We strive to find a balance that aligns with both environmental and socio-economic factors, ensuring comprehensive well-being.
Does the customer have a choice at the end of the day or do you present them with an offer that is pre-determined?
Customer choice is paramount to us. We are deeply invested in enhancing our grid and delivery infrastructure, including on the gas side, to enable customer choice. We currently serve 1.3 million natural gas customers. The choice is crucial because we are working towards a fully decarbonized future. There are four core steps to this – ensuring a clean grid, utilizing clean energy to power economic processes, optimizing energy efficiency, and offering clean fuels where electrification is not yet feasible. We have structured a suite of options for our customers to navigate these areas efficiently.
Our role is at the intersection of a strong policy environment, the advancement of technology, and customer choice. We advocate for appropriate policies, invest in technology to offer choices, and design programs to educate customers on making the right energy decisions. The transition to decarbonization hinges significantly on behavior modification and changing our relationship with energy. The customer is at the forefront of this change, and providing them with the right choices is essential.
Could you tell us about your investments in climate-change-tackling startups?
Our focus on decarbonization is coordinated and comprehensive. We are not just setting ambitious goals, like our net-zero goal for 2050, but we are also facilitating the journey for our customers. Recognizing the pivotal role of technology in this journey, we have built relationships with academia and peers. We have also turned our attention to startups within our jurisdictions focusing on climate change through our Climate Change Investment Initiative.
This initiative is part of the Exelon Foundation and is designed to support startups with financial backing and structural growth support. Business advisors from Exelon assist these startups, helping them navigate regulatory challenges and market access. The success of these startups not only aids in mitigating greenhouse gas emissions but also spurs wealth creation in the communities, serving a dual purpose of economic upliftment and climate action.
What would you highlight as the principal challenges for Exelon to achieve its net-zero goals?
The biggest challenge is maintaining a balance. We are in progressive jurisdictions with ambitious climate targets, but these need to be matched by technological support and customer uptake.
Our strategy to advance decarbonization is built on delivering customer value through our investments, ensuring grid reliability and resilience, modernizing our infrastructure, and investing in our communities.
The balancing act involves aligning policy, technology, and customer trends. For instance, as the electric sector becomes integral to decarbonization, our investments are channeled towards bolstering the grid to handle increased demand and ensure resilience against climate events and other physical risks. Moreover, community investments, like the Racial Equity Capital Fund and workforce development programs, are pivotal as the community is at the core of the energy transition.
