Columbia's IEEPA Tariffs and Cost Recognition Q1 2026

Answer outline

• The near-term legislative theme: slower local deployment + updated zoning/protections (not a ban)
• PPL’s stance on moratorium risk: “not misplaced” to expect protections rather than stopping development
• Areas lawmakers are keying into: water, land, noise, and electricity system reliability/prices
• Resource adequacy + generation policy: legislation is “keyed into” PJM/FERC activity, but not necessarily the top priority
• Wholesale/regulatory impacts: legislation and tariffs intersect with capacity-price pressure and affordability
  • Tariffs as a structural affordability mechanism (regulatory design that can be reinforced by policy)

Answer outline

• Timing: why the filing was delayed and when it’s expected to happen
• Planned approach: “capital case” posture and deference to the Governor’s ROE/capital-structure emphasis
  • Compliance-first framing plus respect for the Governor’s position
  • How ROE/capital-structure issues are being treated (and where they anchor expectations)
  • Practical implication: same overall structure as prior filings, but responsive to intervenors and policy emphasis
• How the Governor’s direction is reflected operationally (cost-effective capital and justification of investments)
• Bottom line

Answer outline

• Timing: why the Aqua Pennsylvania case was delayed and what the company now expects
• Planned approach: how management says it will handle the Governor’s ROE and capital structure focus
  • The case is framed as primarily a “capital case,” but with a compliance-first process
  • B. “Respectful” filings and deference to the Commission on fairness
  • ROE signaling: management cited DSIC ROE used in American Water’s case as a benchmark
• What changes in approach are implied (based strictly on the excerpts)
• Numerically grounded context: where Governor focus shows up in the company’s regulatory narrative
• Bottom line

Answer outline

• Timing for the Aqua Pennsylvania case filing
  • The company delayed the Aqua Pennsylvania filing due to broader Pennsylvania regulatory activity
  • Despite the delay, they still expect to file around year-end
  • The “why now/why later” is connected to administratively respecting the Governor’s positioning
• Planned approach changes related to the Governor’s focus on ROE and capital structure
  • Management describes the Aqua Pennsylvania case as “largely a capital case,” but says it will be handled in a “normal” compliant way
  • They intend to be “respectful” to the Governor’s ROE/capital-structure position while proceeding with a fair-capital-return case
  • They highlighted ROE reference points from a recently adjudicated Pennsylvania case (American Water) and how that informs expectations
  • Governor’s office directives are described as pushing cost-effectiveness and capital necessity—management says the filing will explicitly account for that stance
• What this implies about “planned changes” in approach (based on the excerpts)
• Bottom line

Answer outline

• Timing: why the filing was delayed and when it’s expected now
• Planned approach: how management says it will respond to the Governor’s ROE and capital structure focus
  • Characterizing the case and the scope of “what changes”
  • B) “Respectful” positioning toward the Governor’s ROE and capital-structure priorities
  • How they referenced ROE: anchoring to DSIC ROE from American Water
  • Practical “how they will file”: largely normal case, but structured around capital necessity
• What the excerpts do not quantify (important limits)
• Conclusion

Answer outline

• What the record suggests about PURA’s posture when a large case hits in an election year
• How informed stakeholders were prefiling (and what evidence exists in the excerpt)
• Were stakeholders surprised?
• What gives management confidence regulators will act appropriately (and how strong that evidence is)
  • PURA’s process quality and engagement
  • The case record is framed as cost-controlled and reliability-positive
  • Existing evidence of regulatory “decision-making” in relevant domains
• Bottom-line assessment

Answer outline

• FX: primary driver of the YoY deceleration
• F1 theatrical release: a lap-related benefit that didn’t repeat
• App Store headwinds: mobile gaming softness and business-model adjustments
• Putting it together: why growth decelerated from 16% to 12%

Answer outline

• What would prompt re-filing the PECO rate case (data points / regulatory signals)
  • Constructive settlements and progress on active rate cases at the PA PUC
  • Ongoing stakeholder discussions that indicate alignment on the “key points” Pennsylvania is looking for
  • Clear indication that the investment-and-reliability rationale is understood as necessary for Pennsylvania’s goals
  • Demonstrated track record of reliability and reliability-focused communications as part of the regulatory narrative
  • Receipt of supportive funding/grants that help demonstrate customer and policy value (a “proof point” style signal)
• What would encourage filing at this time (what management says increases confidence)
  • Confidence that Exelon can address the state’s and intervenors’ concerns in the next filing
  • Increased comfort from constructive momentum in Pennsylvania rate proceedings (not waiting for silence or delay)
  • An “inflection point” is effectively whether stakeholders are aligned that investments produce customer value and affordability mechanisms are adequate
  • Financing and execution credibility supports readiness (even though it doesn’t replace regulatory signals)
  • Management’s broader platform approach implies PECO re-filing is not “binary,” but timing depends on PA alignment
• Bottom line (direct answer)

Answer outline

• What management said about the risk to fixed-price program profitability
  • Management ties the risk assessment to EAC updates and customer progress
  • KC-46: characterized as very low risk for EACs going forward
  • MQ and T-7: “normal risks,” focused on completion of flight test
  • Starliner (Commercial Crew): the main remaining uncertainty is schedule/launch alignment with NASA
• Bottom line (how management assessed profitability risk)

Answer outline

• Connect-and-manage / interconnection cost allocation proposals: what’s implied and what matters
• September reliability-backstop auction: what the proposal is and why the allocation/credit details are decisive
  • 2.1 Who provides credit support (and why management thinks it must map to “ratepayer protection pledges”)
  • 2.2 Who pays / allocation impact on PJM zones (and why FirstEnergy says its exposure appears limited)
• Bottom-line evaluation: what’s favorable, what’s uncertain, and the practical takeaway on payment/credit
  • Favorable elements (supported by the excerpt)
  • Key uncertainties / decisive factors (supported by the excerpt)
• Direct answer to “including who pays and who provides credit support”

Answer outline

• What the company says the macro downside risks are (especially sustained higher fuel)
  • Demand risk if fuel stays high for “the long term”
  • Potential operational/economic threshold risk (“$100 vs. $110–$120”)
  • The freight-cycle context amplifies the risk
  • Fuel is a swing factor for near-term profitability—but also a tailwind/ headwind depending on timing
• Is achieving an operating ratio in the low 60s feasible over the next 2–3 years?
  • What “low 60s OR” means in the current snapshot
  • Feasibility logic: what must go right (per management’s own framework)
  • Fuel and inflation are the primary threats to sustained low 60s
  • Counterbalancing positives that support “feasible,” but with conditions
• Bottom line answer
  • Downside risks (including sustained higher fuel prices)
  • Is low-60s OR feasible in 2–3 years?