Exelon's portfolio of "high probability" data center load dropped nearly 40%, falling to roughly 11 gigawatts in the second quarter from 18 GW at the close of last year, the Chicago-based utility company reported Thursday. The decline follows the company's move to require transmission security agreements with prospective data center clients, filtering out projects that lack financial commitment. The remaining pipeline includes about 9 GW in northern Illinois and 2 GW across Mid-Atlantic states.
The transmission security agreements contain safeguards meant to shield current ratepayers from data center-related expenses, including credit requirements, guaranteed revenue payments and shortfall coverage. Of the 11 GW still classified as high probability, roughly 4 GW comes from projects with signed agreements that have put up $1 billion in collateral. Exelon's broader data center interconnection pipeline—covering potential projects under study or about to be reviewed—shrank to approximately 25 GW in the second quarter from about 43 GW disclosed during a May earnings call. As part of the winnowing process, Exelon's Commonwealth Edison subsidiary canceled a previously approved agreement with PowerHouse Hillwood Holding on July 24, a project tied to a planned 1.8-GW, $20 billion data center in Joliet, Illinois. Meanwhile, PECO Energy's electric sales for the first half of 2026 fell 0.7% from a year earlier to 17.6 gigawatt-hours, or 2.1% on a weather-adjusted basis.
"What this update reflects is [that] we now weed out speculative projects, and it gives us proactive insight into what is real," Jeanne Jones, Exelon's chief financial officer, said during Thursday's earnings conference call with equity analysts. The utility reported second-quarter income of $396 million, up roughly 1% from the same period a year ago. Exelon's capital expenditure plan totals nearly $42 billion over four years, though $12 billion to $17 billion in possible transmission projects aren't included in that figure.
The shrinking data center pipeline comes as Exelon pushes for utility-owned generation to address capacity shortfalls in the PJM Interconnection market, which spans 13 Mid-Atlantic and Midwestern states plus the District of Columbia. PJM's capacity auction this summer cleared at the price cap for the third consecutive time, missed a reliability target by 6.8 GW, and drew only 525 MW in new generation. "Even at the highest allowed price, the market is not attracting the level of new supply the system needs," Calvin Butler, Exelon's president and CEO, said on the call. If PJM's current $325-per-megawatt-day price cap is lifted after the next auction in December, the average residential customer of Exelon's Atlantic City Electric subsidiary in New Jersey could see monthly bill hikes ranging from $14.70 to $23.64, the utility told state regulators last week.
To tackle some of those capacity challenges, Atlantic City Electric partnered with Invenergy on July 23 to propose building and owning a 500-MW, four-hour battery storage system in Pittsgrove, New Jersey. The project, expected to cost about $1 billion, would come online in late 2030 and be offered into PJM's markets. ACE argues the storage facility wouldn't breach New Jersey's restructuring laws barring utilities from owning generation, and says it could help meet rising peak demand without affecting customer bills until 2035 at the earliest. The utility is seeking a 9.6% return on equity with the potential for higher returns if performance benchmarks are met, and claims customers will receive $1.36 in benefits for every dollar spent. If state regulators follow ACE's proposed timeline, a decision could arrive in February. Two other Exelon subsidiaries, Baltimore Gas and Electric and Potomac Electric Power Co., are pursuing 150 MW of battery storage projects in Maryland under review by that state's public service commission.