Exelon (EXC) risk factors, 2026 10-K

Risks Related to Legislative, Regulatory, and Legal Factors

1. 01Substantial aspects of the Registrants' businesses are subject to comprehensive Federal or state legislation and/or regulation
2. 02The Utility Registrants' consolidated financial statements are heavily dependent on the ability of the Utility Registrants to recover their costs associated with the retail purchase, transmission, and distribution of power and natural gas to their customers
3. 03The Registrants could be subject to higher costs and/or penalties related to mandatory reliability standards, including the likely exposure of the Utility Registrants to the results of NERC compliance requirements (All Registrants)
4. 04The Registrants could incur substantial costs to fulfill their obligations related to environmental and other matters (All Registrants)
5. 05The Registrants could be negatively affected by federal and state RPS, energy conservation and GHG reduction legislation and regulation, and/or changing customer expectations, along with energy conservation by customers (All Registrants)
6. 06The Registrants could be negatively affected by challenges to tax positions taken, tax law changes, and the inherent difficulty in quantifying potential tax effects of business decisions. (All Registrants)
7. 07Legal proceedings could result in a negative outcome, which the Registrants cannot predict (All Registrants)
8. 08The Registrants could be subject to adverse publicity and reputational risks, which make them vulnerable to negative customer perception and could lead to increased regulatory oversight or other consequences (All Registrants)84% rewritten

Risks Related to Operational Factors

1. 09The Utility Registrants' operating costs are affected by their ability to maintain the availability and reliability of their delivery and operational systems (All Registrants)
2. 10The Registrants are subject to physical security and cybersecurity risks (All Registrants)
3. 11The Registrants’ electricity and natural gas operations are inherently hazardous and involve significant risks to employees, contractors, customers, and the general public (All Registrants)30% rewritten
4. 12implementation of security guidelines and measures has resulted in and is expected to continue to result in increased costsnew
5. 13The Registrants are subject to risks associated with climate change (All Registrants)23% rewritten
6. 14In addition, changes to the climate may impact levels and patterns of demand for energy and related services, which could affect Registrants’ operations and businessnew
7. 15The Registrants' performance could be negatively affected if they fail to attract and retain an appropriately qualified workforce (All Registrants)
8. 16The Registrants’ performance could be negatively affected by poor performance of third-party contractors that perform periodic or ongoing work (All Registrants)
9. 17The Registrants could make acquisitions or investments in new business initiatives and new markets, which may not be successful or achieve the intended financial results (All Registrants)

Risks Related to Market and Financial Factors

1. 18The Registrants are potentially affected by emerging technologies that could over time affect or transform the energy industry (All Registrants)
2. 19The Registrants could be negatively affected by unstable capital and credit markets (All Registrants)59% rewritten
3. 20amounts of collateral that could affect its liquidity and could experience higher borrowing costs (All Registrants)new
4. 21The impacts of significant economic downturns or increases in customer rates, could lead to decreased volumes delivered and increased expense for uncollectible customer balances (All Registrants)
5. 22The Registrants could be negatively affected by the impacts of weather (All Registrants)
6. 23Long-lived assets represent the single largest asset class on the Registrants’ statements of financial position. In addition, Exelon, ComEd, and PHI have material goodwill balances
7. 24The Registrants could incur substantial costs in the event of non-performance by third-parties under indemnification agreements, or when the Registrants have guaranteed their performance (All Registrants)
8. 25Market performance and other factors could decrease the value of employee benefit plan assets and could increase the related employee benefit plan obligations, which then could require significant additional funding (All Registrants)