Good morning. My name is Lindsay, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2019 Q1 Exelon Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you.
Dan Ager, Senior Vice President, Corporate Finance, you may begin your conference.
Thank you, Lindsey. Good morning, everyone, and thank you for joining our Q1 2019 earnings conference call. Leading the call today are Chris Crane, Exelon's President and Chief Executive Officer and Joe Nigro, Exelon's Chief Financial Officer. They are joined by other members of Exelon's senior management team who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning along with the presentation, both of which can be found in the Investor Relations section of Exelon's website.
The earnings release and other matters, which we discuss during today's call, contain forward looking statements and estimates that are subject to various risks and uncertainties. Actual results could differ from our forward looking statements based on factors and assumptions discussed in today's material and comments made during this call. Please refer to today's 8 ks and Exelon's other SEC filings for discussions of risk factors and factors that may cause results to differ from management's projections, forecasts and expectations. Today's presentation also includes references to adjusted operating earnings and other non GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between the non GAAP measures and the nearest equivalent GAAP measures.
I'll now turn the call over to Chris Crane, Exelon's CEO. Thanks, Dan, and
good morning, everyone, and thank you for joining us today. During the quarter, we achieved success on several key fronts and reached a couple of milestones. First, the U. S. Supreme Court declined to hear the ZEC cases clearing the last legal challenge at the federal level for the Illinois and New York programs.
The decision affirms that states have the right to protect their citizens by favoring clean energy and it is a win for the consumers, policymakers and the regulators. 2nd, we received credit upgrades from both S and P and Fitch. These upgrades recognize a successful execution on our utility driven growth strategy and reduction in business risk, while maintaining strong financial metrics. 3rd, we reached settlements in New Jersey on the ACE rate case and the infrastructure investment program. These outcomes reflect the continued positive evolution of our partnership with regulators built on improvement in reliability and customer satisfaction.
Finally, turning to Slide 5. In March, we celebrated the 7th anniversary of the Constellation merger and the 3rd anniversary of the PHI merger. Each merger has positively contributed to our strategy of increasing our regulated business mix and providing more stable earnings. Before these mergers, Exelon earned a mix of 28% utilities, 72% generation in 2021. We project that mix will have flopped with nearly 70% earnings coming from the utilities.
Through the Constellation merger, we grew our regulated earnings with the addition of BGE and also benefited from the combination of Exelon and Constellation's competitive business, creating an industry leader integrated business that supports efficiently hedging of our plans while capturing incremental margins and cash flows. The PHI merger further advanced our strategy to become more regulated while creating value for customers and communities we serve. We are meeting or exceeding all of our reliability merger commitments and customers across the PHI service territory and experiencing record reliability. The frequency and duration of outages have improved at each utility. Customers are out of power less frequency with less frequency and are restored to service much faster when out of power.
In 2018, Delmarva customers had the lowest frequency of outages. At Pepco, customers saw the fastest restoration time and customer satisfaction is at an all time high at Ace, Delmarva and Pepco. We're also delivering on our promise to be a true partner with the communities we serve. The PHI utilities have contributed more than $470,000,000 in total economic impact since the merger closed. In 2018 alone, these utilities spent $313,000,000 with minority and women owned suppliers, which is between 22% 29% of each utility's total procurement spend.
Each utility has made investments in workforce development programs, including partnering with the District of Columbia to create the DC Infrastructure Academy. We are also an important community partner for hundreds of organizations in the PHI service territory, contributing more than $15,000,000 in financial support and volunteering approximately 85,000 hours since the merger was approved. Because of the improved service and enhanced partnership with our communities, we are building trust in our jurisdictions and are seeing a more positive regulatory environment develop. Since the merger, we have reached constructive settlements in each of the PHI jurisdictions, including Pepco, Maryland and DC, and we've had our first settlement since 1980s. Exelon has delivered on the promises we made to our customers and the communities and the shareholders when we merged with PHI in 2016.
Turning to our financial results on Slide 6. We had a strong quarter. On a GAAP basis, we earned $0.93 per share versus $0.60 per share last year. On a non GAAP operating basis, we earned $0.87 per share versus $0.96 per share last year. Joe will cover the drivers in his remarks.
Turning to Slide 7. At the utilities, we continue to execute at top quartile levels across key customer satisfaction and operating metrics. The investments we are making are resulting in improved reliability, which is strengthening the relationship with our customers and the regulators. We remain focused on helping our customers and communities become more energy efficient, saving energy and money. We have been doing this for years, and I'm happy to say once again, the EPA named all 5 of our eligible companies, BGE, ComEd, Delmarva, PECO and Pepco as 2018 Energy Star Partners of the Year.
Generation performed well during the quarter. Nuclear produced 39.2 terawatt hours of 0 emission electricity with a capacity factor of 97.1 percent, the best quarter performance in more than 10 years during the polar vortex when the temperatures were significantly below 0, our fleet ran at full power, keeping families in our markets safe and warm. Exelon Power and Gas and Hydro Dispatch Match of 97.8% and wind and solar capture of 96.5% exceeding plan. Moving on to Slide 8. Since the beginning of the year, there has been a number of important developments.
The U. S. Supreme Court upheld the clean energy programs. Illinois is looking to advance its clean energy goals. Pennsylvania is considering adding nuclear to its alternative energy standard.
New Jersey awarded 0 emission credits. PJM has made its scarcity filing in March with the request approval date by mid December and FERC Act on Fast Start Energy pricing reforms. These actions recognize the importance of preserving the existing resources of carbon free energy. And addressing the underlying deficiencies in the market. In Illinois, legislation was introduced that would require the Illinois Power Authority to procure clean capacity for ComEd customers using the fixed resource requirement mechanism that is currently in the PJM tariff.
In addition to supporting a course of truly clean energy future in Illinois, the legislation would also ensure that consumers pay less than they do today. The concept of the FRR has a wide support and has been endorsed by the Illinois Cub, the Clean Jobs Coalition and Organized Labor. Another piece of Another piece of legislation has been introduced into Illinois to extend the formula rate. ComEd's formula rate provides tangible benefits to the consumers as well as we need to make investments and improve reliability and resiliency and customer service while keeping the bills affordable in the 9 years that ComEd has filed the formula rate, we have asked for rate decreases 4 times. It's a busy legislative season as Governor Pritzker and the General Assembly tackle Illinois' significant budget problems.
However, we are optimistic these two priorities can get done this year. In Pennsylvania, bipartisan group in the House and the Senate introduced legislation that would treat nuclear equal to other non emitting resources by adding it to the ultimate energy portfolio standard. Several hearings have been held in the House and Senate on the bill, but it's not clear the action will be taken in time to reverse our decision to retire TMI. We also achieved 2 important milestones for our existing ZEC programs in April. First, as mentioned, the U.
S. Supreme Court declined to hear the challenges. The New York and the Illinois ZEC programs consistent with the resounding decision we received from the district and the circuit courts. 2nd, the New Jersey BPU awarded ZECs to all 3 New Jersey units in New Jersey, allowing them to continue to provide 0 carbon energy to the state. We are pleased to see the states moving forward with thoughtful energy policy that preserves the rights to chart a clean energy future.
Finally, turning to FERC and PJM. We are pleased FERC acted on the fast start reforms that expand the price setting eligibility for block loaded resources. FERC has requested that PJM submit a compliance filing by July 31, and we expect the reforms to be implemented shortly after that. In addition, PJM filed a 206 petition to improve the pricing of reserves, which we have previously referred to as scarcity or ORDC reforms. These reforms along with base load price formation are essential to preserve an effective competitive market in PJM, and we're happy to see the programs being made to address these clear needs.
Turning to Slide 9, much of the policy work we've engaged in, including preserving 0 carbon generation, we have viewed as necessary to bridge a comprehensive carbon policy. In the past time, not just for the government, but for every business, most particularly energy business, along with their customers and stakeholders to take action on reducing carbon emissions. For several decades, Exelon has been positioning itself for a carbon constrained world and acting as a leader advocating for carbon policy at the state and federal level. We have built the cleanest power generation company in the country. We have divested or retired all of our coal generation and invested in renewables and increasing our output of our nuclear fleet.
As a result, Exelon has produced more clean energy than any other company in the United States by a factor of 2 and out of 9 every 9 clean megawatts in the U. S. Comes from an Exelon plant. We've avoided 67,800,000 metric tons of greenhouse gas, the equivalent of making or taking 14,500,000 cars off the road through 2 previous carbon reduction goals, and we are on track to meet the most recent goal of 15% additional reduction of emissions from internal operations. We're a leading voice in supporting policies and regulations that require reduced emissions and encourage technology changes.
And across our businesses, we're working to enable clean energy solutions for our customers and communities. In 2018 alone, our energy efficiency program saved customers 21,900,000 Megawatt hours of electricity, avoiding 9,900,000 metric tons of greenhouse gas emission. We're investing in electric transportation and charging infrastructure at both utilities and Constellation. Exelon is also involved in grid scale energy storage development to enable faster and greater reliability for the use of renewables. One example of this is through our efforts to launch the Volta Energy, which works with the national labs and research universities to commercialize new technologies.
The world is changing in terms of awareness of the scope of climate change and the need for new potential solutions. Our customers, our cities and our communities as well as our employees are demanding clean power, so that is what we intend to provide. We still have a long way to go, but the engagements that we are seeing at the state level affirms our view that these policies will be part of our country's future. With that, now I'll turn it over with Joe to continue the call.
Thank you, Chris, and good morning, everyone. Today, I'll cover our Q1 results and quarterly financial update, including trailing 12 month ROEs at the utilities and our hedge disclosures. Starting with Slide number 10, we had a strong quarter financially. We earned $0.93 per share on a GAAP basis and $0.87 per share on a non GAAP basis, which is at the upper end of our guidance range of $0.80 to $0.90 per share. Our performance in the quarter was consistent with our expectations, including a positive $0.01 of net benefit around timing of expenses.
Exelon Utilities delivered a combined $0.56 per share net of holding company expenses. Utility earnings lower than our plan due to O and M timing at ComEd and PECO, which will reverse itself over the course of the year. Exelon Generation earned $0.30 per share, outperforming plan. This was a result of some realized gains in our nuclear decommissioning trust fund and favorable timing of O and M. We are reaffirming our full year guidance of $3 to $3.30 per share.
For the Q2, we are providing adjusted operating earnings guidance of $0.55 to $0.65 per share. On Slide 11, we show our quarter over quarter walk. The $0.87 per share in the Q1 of this year was $0.09 per share lower than the Q1 of 2018. ExOne Utilities less holdco earnings were up $0.10 per share compared with last year. This earnings growth is driven primarily by higher rate base, new rates associated with completed rate demand and lower storm costs at PECO and PG and E relative to the Q1 of 2018.
Generation earnings were down $0.19 per share compared with last year. The biggest driver was the absence of $0.10 per share of ZEC ketchup payments from 2017 due to the timing of the final Illinois ZEC approvals. Generation was also impacted by lower realized power prices. Moving on to Slide 12. As Chris mentioned, we celebrated the 3rd anniversary of the merger with PHI in March.
We have seen tremendous improvement in PHI's operational performance, customer satisfaction and relationships with our communities and regulators, which is leading to more constructive outcomes. Given our progress on the commitment of our 9% to 10% ROEs across our utilities and the quarterly variability at the individual PHI utilities depending on rate case timing, we are now consolidating the PHI utilities trailing 12 month ROEs. We have also changed the format of the slide to show the relative size of the aggregate PHI utility when compared to legacy XLR utilities and the consolidated XLR utilities. In total, the PHI utilities represent approximately 26% of our total rate base of $41,200,000,000 On a consolidated basis, the PHI utilities earned a 9.3% ROE for the trailing 12 months. This is a 90 basis point improvement over consolidated 8.4% from the Q4 of 2018.
The improvement is due to 2018 distribution rate case settlements at both Delmarva and Pepco, favorable transmission revenue from the higher peak load and true ups, the roll off of higher storm costs and favorable O and N timing at Delmarva and Pepco, which will reverse over the course of the year. At the legacy Exelon utilities, our earned ROEs are modestly better, largely driven by the roll off of the March 2018 winter storm costs as well as new rates associated with completed rate cases at PECO and BG and E. Including PHI, the combined Exelon utilities have a 10.2% earned ROE, which is above our 9% to 10% earned ROE target and 50 basis points higher than last quarter. We remain focused on meeting our utility earnings growth targets by maintaining the earned ROEs at PHI and sustaining strong performance at our other utilities. Turning to Slide 13.
Since the last call, the New Jersey Board of Public Utilities approved Atlantic City Electric's settlement agreement, which provides for a $70,000,000 revenue increase. The new rates went into effect on April 1. In addition, the BPU approved recovery of $96,000,000 of capital over a 4 year period through the infrastructure investment program to improve reliability. On April 8, ComEd filed its annual distribution formula rate update with the Illinois Commerce Commission seeking a $6,400,000 decrease to base rate, representing the 4th requested rate under the formula rate design. We expect to receive an order in the 4th quarter.
Pepco Maryland filed its latest rate case in January, requesting a $30,000,000 revenue increase, which has been updated to $27,200,000 with the test year update to actuals. The request is based on the continued infrastructure investments to enhance reliability and customer service. We expect to receive an order in the Q3 of this year. More details on the rate cases can be found on Slides 21 through 24 in the appendix. Turning to Slide 14.
During the Q1, we invested $1,200,000,000 of capital across the utilities and are on track to meet our $5,300,000,000 commitment for 2019. These investments will improve the reliability and resiliency of the grid to the benefit of our customers. This quarter, I would like to highlight 2 projects. The first is the modernization of Pepco's Harrison substation in Washington, D. C.
This $190,000,000 project will renovate aging infrastructure to more reliably serve important loads, including 2 metro stations. It also expands regional transmission capacity, supporting future load growth. The other project is the 2nd phase of BG and E's large gas line replacement program in Baltimore that will be recovered through STRIDE Capital Recovery Mechanism. The second phase includes $732,000,000 of investment and will replace approximately 2.40 miles of gas lines by the end of 2023. Replacing these lines will improve the safety and reliability of the distribution system.
During the first phase of the program, BG and E replaced 208 miles of gas lines. Since the program start in 2014, Stride has created 600 full time jobs in BGE's service territory. On Slide 15, we provide our gross margin update and current hedging strategy to Generation Companies. As a reminder, our disclosures previously reflected the planned retirement of PMI and include New Jersey's net revenues. Since last quarter, total gross margin is flattened every year.
In 2019, open gross margin decreased $150,000,000 primarily due to lower prices at West Hub, New York Zone A and NiHub. During the quarter, we executed $150,000,000 in Power New Business. In 2020 2021, respectively, open gross margin is up $50,000,000 relative to our prior disclosure, primarily on the back of higher power prices at NiHub and New York Zone A, which was partially offset by lower ERCOT spark spreads. Mark to market of hedges were down $50,000,000 due to our hedge position, offsetting the increase in gross margin and we executed $50,000,000 of power new business in both years. Our generation to load matching strategy continues to yield positive results.
We ended the quarter 8% to 11% behind ratable in 20 20 and 1% to 4% behind ratable in 2021 when considering cross commodity hedges. Our open position is primarily concentrated in the Midwest and Texas. Given the strength of our balance sheet, we are comfortable with our strategy to hold open market length. Moving on to Slide 16, we remain committed to maintaining a strong balance sheet and our investment grade credit ratings. As Chris mentioned, our work team is rewarded with credit upgrades at S and P and Fitch in the Q1.
S and P upgraded Exelon's issuer credit rating from to BBB plus from BBB. In addition, all subsidiaries were raised 1 notch. According to S and P, the rating upgrades reflect the successful execution of our business strategy, which has reduced business risk while maintaining strong financial metrics. Fitch also upgraded Exelon to BBB plus based on similar reasons. Looking at ExGen, we are well ahead of our debt to EBITDA target of 3x.
For 2019, we expect to be at 2.4 times debt to EBITDA and 1.9 times debt to EBITDA on a recourse basis. With that, I will now turn the call back to Chris for
his closing remarks. Thanks, Joe. Turning to Slide 17. We remain committed to our strategy and are pleased that our consistent execution is being recognized by the rating agencies and others. I'll close on Exelon's value proposition.
We continue to grow our utilities targeting 7.8% rate base growth and between a 6% to 8 percent earnings growth through 2022. We continue to use free cash from the GenCo to fund incremental equity needs at the utilities, pay down debt and fund part of our growing dividend. We will continue to optimize the value of our XGen business by seeking fair compensation for our 0 admitting generation fleet, selling assets where it makes sense to accelerate debt reduction plans and maximizing value through the generation to load matching strategy at Constellation. We will sustain strong investment grade credit metrics and grow our dividend annually at 5% through 2020. The strategy underpinning this value proposition is effective in providing tangible benefits to our stakeholders.
We remain committed to optimizing the value of our business and earnings your ongoing support for Exelon. Operator, we can now turn it over for questions.
Thank you. And our first question comes from the line of Greg Gordon with Evercore ISI. Your line is now open.
Thanks. Good morning.
Good morning, Greg.
Two questions. First, can you just give us a little more detail on the status of the bills that relate to energy policy in Illinois? What processes for moving them to vote? And I think you intimated that given the pressures on the legislature with regard to other Illinois issues that there might be a chance that this slips from the regular session to the veto session. So could you just talk through all those issues, please?
Sure. As you pointed out, there is a lot of activity in the session right now as the governor prioritizes all of his issues. A lot of it's focused on the budget and revenue sources. Those bills are moving and being debated as we discussed. He also has a priority on achieving a 0 carbon generation fleet by the 2020,030 timeframe 2,030 timeframe.
So there are numerous energy related bills to get to that point. Our bill for the FRR, there's one that's path to 100, and then there's one that's the Clean Jobs Coalition. So we're in the process right now of negotiating with all the bills, so we can come together and provide the legislature with a coalition that agrees on many things right now, just working through the details. We hope to be done. Meetings are constant.
I've met with the leadership of both House and Senate talking about what we need to do and them showing their support for us going forward. So we're just going to keep working on it as we always do. If it's not done in the regular session because of the other priorities, we will have it positioned to move through during the veto session. That's the generation bill. The other bill in Illinois that will affect Exelon is the extension of the ComEd formula rate for 10 years.
That bill is proceeding. We've been able to work with stakeholders to gain support and recognition. As I mentioned, out of the 9 past filings that we've made with the formula rate, we've had 4 rate reductions. So it's very balanced for the consumer. It's very balanced for our investment strategy, and we are able to do so in a predictable way to serve our customers.
So that's Illinois. Pennsylvania Thank you. Yes.
I'm sorry, you might as well cover Pennsylvania too.
I figured that was coming. So Pennsylvania, as you know, we've been working with the other nuclear operators there to create an alliance to continue and allow those assets to compete in with the other non emitting assets. The bill continues to garner support and we'll continue to work through that. As we've told folks, we need clarity on this by the end of May or we're going to have to make the final steps in shutdown. We won't be able to adequately procure design procure manufacture fuel for continued operations without that certainty and would not want to make that investment without that.
So we'll continue working on it. As you can see, the governor has shown recognition that he wants to have a low carbon future for the state and all recognize that that cannot be done with the current technology without including the existing nuclear assets. So we'll work on that one and combined with the Illinois effort.
Thanks. One other real quick one for Joe. Just looking at Slide 19, it looks like the free cash flow profile mainly at the utility portfolio is lower than you projected lower now for the year than you projected at year end by $300,000,000 or so. What's the cause of that? And because you didn't it doesn't look like you've changed your overall guidance for the long term cash flow profile of the company.
Yes, Greg. You're correct. The variance versus our Q4 disclosure is $300,000,000 lower. It's being driven by increased working capital at the utilities and we're funding that with commercial paper. I think it's important to note though from a Genco perspective on a cash flow profile basis, we're still well we're in line with the forecast that we've provided you on the Q4 call.
I mean, I think that's an important element.
Okay. Is that working capital increase sort of a permanent structural issue? Or is that related to things like storms or other things that might slip in future years?
Yes, it's the latter. It's more just the ongoing business itself and we had some favorable weather points in the quarter and we took advantage of that from a work basis perspective.
Okay. Thank you.
Our next question comes from the line of Julien Dumoulin Smith of Bank of America. Your line is now open. [SPEAKER
JULIEN DUMOULIN
SMITH:] Hey, good morning, everyone.
Good morning. So
just to follow-up a little bit on Greg's question, can you elaborate a little bit on the scenarios around capacity auction participation, particularly if it happens in August? And I'm thinking that given your commentary in the prepared remarks around the timing of Illinois legislation that it'd be difficult to implement any full FRR or anything else coming out of this Illinois legislation in time for the next upcoming capacity auction. So I suppose there's a litany of scenarios. How do you think about them, particularly if FERC does indeed act around something else, say a partial FRR for instance?
So we put our input into FERC that we believe it's very inefficient to execute an auction when with the previous FERC ruling for PJM to execute an auction in the August timeframe with the previous FERC ruling, we actually need to get guidance from FERC on what the construct should be. So we think it should be an April timeframe, but FERC feels PJM feels like they're compelled to run forward and hopefully we'll hear something from FERC to clarify PJM's letter requesting clarification. The most likely scenario for an FRR in Illinois would be the 'twenty three auction timeframe from everything we're looking at. We need to get the legislation passed. We need to have the IPA, who we've been working with the Illinois Power Authority, be able to build a construct to be able to run it.
That estimate is aggressive on our side by about 8 months. Our folks have been in communications with the IPA to see how reasonable that is. And so we'll continue to work down that path. But to run an auction, it's going to be potentially rejected without clarification, does not seem like the most efficient use of all of our resources at this time.
Maybe even if it is delayed into 2020 and that is for the 'twenty two auction, How do you think about the choices before you?
Kathleen, you want to cover it more?
Sure. Hey, Julian, it's Kathleen. As Chris said, we do know that the FRR bill once enacted will take a period of time to implement. The IPA has to write the rules, the ICC has to approve them, then the IPA has to conduct a procurement. And so if the auction is not delayed, there clearly is not enough time for that to occur before the auction if it happens in August.
If it happens next April and the bill is enacted this spring, there would be enough time for it to be implemented by, let's say, the auctions delayed to next April. And then the big wildcard is, what if the we don't know what FERC is going to do and we don't know when the exactly when the coalition that Chris mentioned together with the other clean energy packages will come together in Springfield. So we can't really speculate on what would happen because we have a couple of variables that are just unknown at this time.
All right, fair enough.
And then just to follow-up on the business risk improvement and the credit side of the equation. Can you comment a little bit more about where you see that going over time in terms of added latitude from FFO to debt perspective and just where you would like to see the credit ratings over time? Just perhaps following on some of the recent improvements.
Yes, Julien.
First of
all, we're happy with the upgrades by both S and P and Fitch. And we continue to work to stabilize the earnings and the cash flows of the company. We talked about how we're transitioning to the earnings and the cash being driven from the much more regulated outcome and we're really focused on that and we'll continue to manage accordingly and continue to stay close work closely with the rating agencies.
Okay, great. Thank you all very much.
Our next question comes from the line of Steve Fleishman with Wolfe Research. Your line is now open.
Yes. Hi. Good morning. Good morning.
So just
I guess on Pennsylvania, if obviously something needs to get done there by the end of May to save Three Mile Island. But if it doesn't get done by then, does that I mean, could something come back later on for the other plants? Or is it how should we just think about that?
We don't plan on stopping and the coalition doesn't plan on stopping if the TMI deadline is passed. There are other critical assets in the state that need to be recognized for the governor's low carbon future. And so we'll continue to work as hard as we are right now after the end of May for the other reactors in the state. So you've got 8 other reactors that are very critical that are highly reliable, but their environmental benefits cannot be replaced with technologies available today without significant costs. So we'll continue to work on it and we believe that we'll end up successful at the end.
Okay. Thank you.
Our next question comes from the line of Stephen Byrd with Morgan Stanley. Your line is now open.
Hi, good morning.
I wanted to just drill into the Illinois Clean Energy Progress Act a little further. I'm thinking through the procurement process and I've read through the legislation, but I'm trying to understand the procurement process in terms of the clean bundled capacity. Is it possible to talk a little bit more about the generation that would be eligible, the mix of energy that would be procured. I'm thinking about 0 carbon versus renewables, just to make sure I understand the nature of the clean bundles capacity that's going to be procured under this legislation if it passes?
Kathleen, you want to go through that?
Yes. Thank you, Stephen. The way that we have envisioned this is that the state would be able to conduct a clean energy procurement, as you said, and that any zero carbon resources would be allowed to compete to provide that capacity. And as you know, the bill is not specific about the exact timetable or there are other details that we believe are important, including how prices will be overseen by the IPA. And the reason for that is that the reason the Future Energy Jobs Act was so successful is it brought together a number of parties together towards a common future.
And what's exciting about this is that this FRR concept is integral to all the other clean energy bills that are being considered right now because everyone appreciates that it's that exact authority living the IPA, conduct a clean energy capacity procurement and then having the ability to set its course towards a zero carbon future, will give it more flexibility than it has under current market rules where every asset gets the same capacity payment, whether it's emitting or non emitting. So we have left some room to have that discussion among other stakeholders to make sure that we have the right group who are supporting it. And as Chris said at the top of the call between the Clean Jobs Coalition, including this in their bill, the consumer advocates see the tremendous benefit associated with this. We think that's the winning combination.
That's extremely helpful. Just as a follow-up there, in terms of the state's overall energy mix in terms of clean energy versus fossil, I know there's an objective to move toward clean energy over time. What would that energy mix broadly look like over time? How should we think about that evolution in the state?
So you're starting off right now with 60% of the generation statewide being 0 carbon emitting, 90% of that statewide is nuclear. The concept that Kathleen talked about is we would in the ComEd zone, currently we can account for 100% carbon free, but we would have a transition period where you would have the carbon free assets bidding in at a greater percentage each year or being taken as a greater percentage each year as you build into 2,030 when the procurement would become 100% carbon free. And those details, the finite details there will have to be worked out, but that's the concept.
That's super helpful. And that's all
I had. Thank you. Sure.
Our next question comes from the line of Jonathan Arnold with Deutsche Bank. Your line is open.
Hi. Good morning, guys. Could I just just coming back to Illinois and the discussion about timing. If I understand you correctly, the ability to implement the FRR for the next auction should the next auction happen in April, that would only be the case if it passes in the spring. Am I right about that?
Yes.
Okay. And so to that, I mean, Chris, what exactly are you saying about the spring session? Are you you said you were optimistic in your prepared remarks about this year. And I just wasn't clear in the previous answer if you're saying you think we're more likely in the veto session or do you think you're still kind of in play for the spring depending on how things go?
We're working with the coalitions as hard as we can to have something presentable to the legislature supports to move in the spring. But what I've cautioned in our roadshows and on the calls previously, there is a very aggressive legislative agenda in Illinois this spring. They're talking about graduated tax legislation that is needed to pass for constitutional amendment and the 2020 election, the work on legalization of merit, recreation, marijuana, the work on the gambling and the sporting issues to continue to increase revenue, those are the top three priorities. We come after that. We need to be ready to be able to tell our story, communicate and have that coalition that we're building, endorsing where we're heading.
But we need to be realistic. We do think if it doesn't happen in the spring, we'll be ready to move it in the Avedo session in the fall.
Okay, great. So you're not saying it's impossible, you're just making us aware of the priorities and the fallback on the fall? Right. Okay. And then just one other thing I wanted to ask on the Slide 10, you call out the MDT realized gains as one of the driver in ExGen versus guidance.
But it doesn't show up as a factor in the waterfall. So could you any chance you guys could quantify that piece and sort of explain the discrepancy there?
Yes. In the waterfall, you're looking at a year over year change and the NDT gains in each of the years was roughly the same.
Okay.
So there would be no delta on the waterfall.
Got it. Roughly how much, Joe, are you willing to share?
$0.02 a share.
Okay, great. Thank you.
That is all the time we have for questions today. I will now turn the call over to Chris Crane, President and CEO of Exelon, for closing comments.
Thank you all for participating in the call today. I think we're off to a very good start for the year. And so with that, we'll close the call out. Thanks again.