The big picture

Let’s talk Exelon Corporation. The Loop-headquartered energy company with a comic-book villainous name is enormous. As in: $34 billion in annual revenue, 10 million utility customers, one of the largest owner-operators of nuclear power plants in the United States, with six in Illinois (two will close this fall). It also has six utility companies across the Midwest and mid-Atlantic regions, including northern Illinois’s favorite frenemy, Commonwealth Edison, unpopularly known as ComEd.

ComEd, an Exelon subsidiary since 2000, is the only electricity provider in Chicago. It doesn’t make power — it simply transports it from plants to your home. Consumer rights advocates have long argued that Exelon owning ComEd is a conflict of interest: The power generator has every incentive to overcharge the power provider, right?

The divorce

In February, Exelon announced it would split into two separate companies: one for its regulated utilities (ahem, ComEd) and one for its unregulated generation of nuclear, natural gas, solar, and wind power. It’s aiming to complete this conscious uncoupling by the first quarter of 2022.

Why now? It’s not totally clear. Exelon says its customers expect it to “continuously innovate to stay ahead of growing demand for clean energy.” While Governor Pritzker has vowed to make Illinois carbon-free by 2050, there’s no indication that his plan informed Exelon’s decision to split, so J.B. doesn’t deserve all that much credit. Some suspect it’s an attempt to boost shareholder confidence after the ComEd bribery scandal broke in the summer of 2020 — ComEd is accused of paying off Mike Madigan’s cronies for legislative help (real classic Chicago stuff!) — though that’d be a pretty drastic move, considering Chicagoans can’t ditch ComEd even if they wanted to. But likely it’s still a way to appease investors.

What’s in it for stockholders

Exelon is a peculiar investment because energy producers and providers have different business models. ComEd has a predictable, reliable one: It’s a regulated monopoly, everyone needs electricity, and power use doesn’t fluctuate wildly each year. But with Springfield and D.C. issuing carbon reduction goals and directives, energy production companies are changing course. Exelon says isolating its power generation business will give it the dexterity to innovate new forms of clean energy. In that transition away from nuclear fuel, Exelon could strike gold or, you know, fail spectacularly.

Right now, buying Exelon stock means you’re investing in a stable, boring company and a high-risk, high-reward one. Which is … financially confusing! Splitting into two distinct entities might encourage new investors who want to be more targeted with their money. Both of these companies will still be run by actual humans, not Lex Luthor.

What’s in it for consumers

Abe Scarr, director of the nonpartisan consumer rights advocacy group Illinois PIRG, has a relatively optimistic take on this corporate split. ComEd will have more leeway to buy energy on the free market — potentially, Scarr says, lowering customer bills. The dissolution could also mean that ComEd, now separate from Exelon’s nuclear plants, could get greener. “ComEd’s PR talks about clean energy all the time,” says Scarr. “But in Springfield, they’ve been fighting clean energy for years because clean energy is a competitor to Exelon’s nuclear plants.” (Wait, are multibillion-dollar corporations … not … honest with consumers?)

Let’s not get ahead of ourselves. PIRG thinks the split only scratches the surface of the sordid alliance of ComEd, Exelon, and Springfield. The group is still calling for utility policy reform and customer restitution, postscandal. So don’t worry, there’s no reason to get too optimistic about Illinois’s climate future!