Although its 2022 losses were less severe than a year ago, Constellation Energy, Baltimore, was still in the red thanks to higher operating costs and lower revenues, the utility said in earnings reports published last week.
Net losses for Constellation, the company that spun off from Exelon’s generation business in February 2022 and which manages over a dozen nuclear plants, was around $160 million, or $0.49 per share, in 2022, according to an earnings report published Thursday. That is still an improvement from the $205 million Exelon’s generation segment lost in 2021.
Impacts from severe cold weather in February 2021 caused the spike in losses that year. The absence of such an event in 2022 improved income, Constellation said. But easier going from milder weather was offset by “decreased capacity revenues” as well as “increased labor, contracting, and materials” costs, the utility said.
Fourth quarter net income was about $34 million, or $0.10 per share, down from the $42 million or so Exelon reported during the same period in 2021.
The decrease in fourth-quarter income was largely attributable to increased expenses for labor, contracting and materials, as well as “unfavorable market and portfolio conditions,” Constellation said. The company operates in wholesale power markets where the price of energy fluctuates.
Despite those uncertainties, though, Constellation reported that its fourth-quarter losses were partially offset by “favorable” nuclear plant refueling outages. The utility wrote in a 10-K filing published Thursdsay that when refueling outages take longer than anticipated, it drives up operating and maintenance costs for those nuclear facilities. In 2022, Constellation’s refueling outages averaged 21 days, a shorter duration than the industry average of about 32 days in 2021, the company said.
Meanwhile, Constellation’s annual revenue was up last year, at around $24 billion year-over-year compared with roughly $20 billion in 2021. In the fourth quarter, revenue was around $7 billion, up from $5 billion during the same period last year.
It was “an incredible first year that exceeded expectations,” Constellation CEO Joe Dominguez said in a statement.
“A year ago, we laid out our strategy for the company and made commitments to [investors] focused on creating value — namely that we would create an enduring business with the unique ability to tackle the climate crisis,” Dominguez told investors on a conference call Thursday. “Thanks to the hardworking women and men that work at our power plants and serve our customers, along with the corporate teams that support them, we’re well on the way to delivering on these commitments.”
The utility’s nuclear power business is “only going to increase in the years ahead,” Dominguez said, “as we invest to extend the lives of our nuclear plants, increase their output and utilize their carbon-free energy to power the dirtiest parts of our economy with clean hydrogen.”
