With management tying the dividend to the cash flow generated by its regulated utilities, Exelon could increase its payout before many investors expect –especially if wholesale prices for power improve.
Exelon may shutter some of its 24 nuclear power plants in coming years and refocus its 35 gigawatts (GW) of capacity more on natural gas or renewable energy. But last winter’s Polar Vortex demonstrated that power prices can still rise sharply. The retirement of older, coal-fired power plants through 2017 should also tighten the supply-demand balance.
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