Keynote by Exelon President and CEO Chris Crane

Thanks so much, Bob, for having me. And thanks, Representative Tonko, an expert on energy issues and a strong supporter of climate action. And we need a whole lot more of him in the House of Representatives. So thank you again. I want to welcome you to Baltimore, you know, the home of two of Exelon's top-notch operating companies, Constellation. I think there's a tour that some of you may take tomorrow of our building right across the way here, and BGE, Baltimore Gas and Electric. And I also want to welcome you to Maryland. Governor Hogan, our governor, has positioned Maryland since taking office to be open for business, and he's done a lot of work on that. But he also is continuing the conversation on climate and environmental in a progressive and effective way. The state has adopted climate change policies that support energy efficiency and understands the needs for modernizing the critical infrastructure. What do we need to do to the grid to support more distributed generation and continue to provide low-cost service for our customers? It's truly past time not just for the government to be taking action, but for every business, most particularly the energy sector, along with customers and stakeholders. There is a real call for action, and many are doing that. The energy sector is one of the key areas. In the last, since 2005, our carbon footprint in the generation sector has been reduced by 25%. But there's significantly more that can and should be done. The climate challenge requires us to consider every single option that accelerates our transition to a low-carbon economy. Support limits on carbon emissions, and preferably do that through a market-based approach, not picking winners and losers. We need to continue our development of renewables as the efficiency of our technologies improve, the market costs come down, the affordability for our customers is very critical. Continuing to use low-cost, safe, secure, zero-carbon nuclear and explore new nuclear technologies, and develop cost-efficient carbon capture and storage technology solutions. We must quickly reduce our carbon dioxide accumulating from our fossil fuels. Utilizing efficient natural gas as we transition into a zero-carbon or low-carbon future is going to be critical. There are a handful of ways to reduce it. As I said earlier, reducing energy demand, energy efficiency is the cheapest and most effective way to reduce the carbon footprint of the electrical generation business. The use of low-carbon and zero-carbon energy sources, and continuing the investment in the advancement of scrubbing carbon out of fossil fuels that we use. It will take these strategies at large scale to avoid the catastrophic impacts of climate change. What does this mean for our business? The electric sector, the electric utilities, account for nearly one-third. Although we have done a great deal to reduce it, we are still one-third of the US economy-based carbon emissions. We must reduce the emissions drastically, as I've said, by making significant capital investments. It is not going to be cheap. It has to be done effectively, but it's going to take a lot of balance sheet space and investment to be made. Exelon is analyzing how the US economy could achieve the 80% reduction in greenhouse gases by 2050 to avoid more than the 2 degrees C rise in global temperatures, consistent with the IPCC and the Paris Accord. Dramatic reductions are needed in both energy on the supply side, but also on the demand side, using a range of options including continuing to support the existing nuclear assets. The state of Illinois is 60% zero-carbon generation; 90% of that is nuclear. If we were to shut two nuclear units down, we would go backwards from all our investment that we've made on renewables, on our carbon reduction. The dramatic reductions in emissions will need, both as I said, from energy supply and demand. Additional renewables, carbon capture and storage, and other alternatives. Demand-side options such as energy efficiency, as I mentioned, and electrification and alternate fuels will also be needed. Much research is being done on how we can advance hydrogen, how we can advance other technologies that can support the needs of the grid. One of our issues that we have as we go forward is designing the grid around the physics that are required to maintain quality levels of voltage. We all want to go to zero carbon, but in the meantime, our manufacturing facilities, our customer base, are demanding a power quality like never before. So any fluctuations in voltage will stop manufacturing production lines. So as we do this, the engineers have to work with the economists and the environmental scientists to make sure we do this the correct way. Our utilities will connect with customers with clean technology, clean energy, and enabling them to control their own carbon footprint, which again can be a market-based solution on time of use, time of day, and their own demand side. Giving our customers more information is going to be critical. Clearly, every ton of carbon we keep out of the atmosphere is a positive move. Right now, Exelon is aggressively involved in energy storage development to enable a greater and more reliable use of renewables. We're an active investor. We were the original investor and still an active investor in Volta Energy. It's pursuing the work begun at Argonne Labs on the advancement of energy storage and energy management systems. It's essentially commercializing National Lab technologies, but we haven't achieved the large-scale storage technology that is needed to be economic going forward. A lot of work is being done by our universities, by our national labs, but the private sector has got to continue to invest in that move going forward. We're also working on preserving existing sources of carbon-free generation like our nuclear fleet, which are currently not getting the market credit for their zero emissions in all locations or the quality of the generation that's coming out of them. States have led the way. This has not been a federal initiative; it's been a state initiative. New York, Illinois, New Jersey, Connecticut have all acted to add existing nuclear credits programs. Pennsylvania is introducing a bill to try to do the same thing. A growing number of state legislators have adopted or considering 100% zero-carbon emissions. California, Illinois, Minnesota, New Mexico, Wisconsin, New Jersey, all continuing to drive forward. And governors have set similar limits in New York and New Jersey. But federal policy needs to catch up with where we're going as more people realize it makes sense to head in that direction. It makes no sense to shut down power plants that cost pennies on the dollar versus new technologies today to be built. We need to bring on more effective carbon capture and storage technologies, as I've mentioned. Exelon is an active investor in a carbon capture partnership that we have a pilot program, a pilot unit on now. It's called NET Power. It has great promise, and hopefully, we can continue to advance that technology to not only be effective but to be economically efficient. And we need to advance the lower-emissions electrification to other sectors, particularly transportation. The electric sector, as you all know, was the highest carbon-emitting sector. The actions that have been taken to lower that carbon emission has now created the transportation sector to be the highest-emitting sector. Electrification of that can significantly help us as we go forward. Exelon utilities and our competitive retail arm, Constellation, are heavily engaged in electric transport across a wide spectrum of options in the markets, supporting our states, our cities, with particular ways that they can take public transportation and other methods and incent electrification. We're an investor in Proterra. I think we'll hear from one of the Proterra folks here at the session, bringing electric vehicles into the public sector. And that includes here in Baltimore. We have pilots in Chicago, Philadelphia, and we'll continue to advance it. So the electric sector needs to devote real political and financial capital to speed up the deployment of low-carbon technologies, and we need all these tools in the toolbox. The world is changing in terms of awareness of the scope of the problem and the needs for new potential solutions. The dedication of time and money is of the essence at this time. As a man in a company that makes its living off of selling electricity, I can tell you that if the government doesn't get there, our customers will truly drive us there, and our stakeholders certainly will too. We recently did customer polling, and the number one concern or item that our customers wanted us to focus on was climate change and where is our leadership in climate change. That was not the answer I thought we would get out of the polling. I thought we would get something about the bills, the costs. It was about climate change. The customers, our customers, the residential but especially the large commercial industrial customers, are demanding that we provide them with clean power. And as I mentioned, the research makes it clear that that's the expectations of our customers right now. Cities and communities in our service territory are demanding our action on clean power. They're taking actions on their own. If we don't get there ourselves, we become irrelevant, and they'll get there on their own. So for us to maintain relevance, we need to continue to support the direction that our customers want. And another thing is our emerging workforces. We hire in the new generation. As they come in, the expectation is that they have involvement in the communities we serve in volunteerism, but they're also working for a company that recognizes that climate change is real and action has to be taken. So that's what we intend to provide for our customers, for our stakeholders, our employees, and that's the future that Exelon is heading down the path to. So again, I want to welcome you here. Appreciate you all coming in and spending some time in Baltimore. We appreciate the tax revenue, but it's also a great conversation, and the agenda looks packed with fantastic conversation and learnings and sharing. So thank you very much. Thanks, Bob, again for having me.