EXC · 10-Q · 2026Q3 · Full report

PJM Cost Allocation Methodology

EXELON CORP · 2026-10-30 · Importance 50 · Surprise 60 · In source text

On October 7, 2026, FERC issued further direction on its March 6, 2026 order requiring PJM to eliminate the de minimis exemption for allocating certain transmission reliability upgrade costs to the Utility Registrants’ rate zones. PJM must recalculate historical allocations beginning June 18, 2015, and pass through applicable charges or payments, with interest, to customers including the Utility Registrants. FERC also directed hearing and settlement proceedings regarding changes in market participants during the 15-year refund and surcharge period; an appeal remains pending before the U.S. Court of Appeals for the D.C. Circuit. Exelon says the final impact cannot yet be estimated but could be material to its financial statements.

Key facts

• On October 7, 2026, FERC issued an order giving additional direction on its March 6, 2026 order requiring PJM to eliminate the de minimis threshold exemption for allocating certain transmission reliability upgrade costs to PJM transmission owners, including Exelon’s utility registrants.
• FERC directed PJM to recalculate historical cost allocations beginning June 18, 2015, and pass through applicable additional charges or payments, with interest, to PJM customers including Exelon’s utility registrants.
• The final impact of the PJM cost-allocation proceedings could be material to Exelon’s financial statements but could not be predicted or reasonably estimated at the time of filing.
• FERC directed hearing and settlement proceedings to determine how PJM should account for participant changes during the 15-year refund and surcharge period; an appeal of FERC’s March 6 order remained pending before the D.C. Circuit.

Impact estimates