Exelon - Eco Preferred Power

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OVERVIEW

Exelon Corporation is an electricity generating and distributing company headquartered in the Chase Tower in the Chicago Loop area of Chicago. Exelon came into existence in October 2000 after the merger between two large utilities: Unicom corp., the parent company of ComEd (Illinois) & PECO Energy Co. (Pennsylvania). Unicom owned Commonwealth Edison. Exelon has 5.4 million electricity customers and serves 485,000 natural gas customers in the Philadelphia suburbs. Exelon is the largest nuclear operator in the U.S. and the 4th largest power generator (in GW) of the nation.

Question & Answers

Question 1: How will branding benefit Exelon power?

Answer:

Exelon’s plan to brand Environmentally Preferable Power (EPP) serves 2 goals: o Charge a Premium for EPP and get better margins for a superior product. o To gain incremental business outside of its traditional served markets.

Branding will send a strong signal to the market. Exelon is the 1st company attempting to market an ISO certified energy in the industry. Being the 1st mover not only gives Exelon the opportunity to shape the market but also to position Eco Preferred as a premium Product. The value of Eco Preferred comes from the fact that it is going to be a differentiating tool for companies purchasing it.

Companies are used to purchasing electricity as a commodity & focusing only on price. Brand could help address this problem by giving a name and an identity to their clean power production assets.

Question 2: How should Exelon implement its Eco-Preferred Power offering?

Answer: Regarding the Implementation decision Exelon is facing 2 main issues : o Challenge of demonstrating the value of Eco Preferred to Customers. o What should be the sales process & the incentive Exelon should offer to prospective customers so as to lure them to purchase EPP.

As identified in the case there are 2 possible ways of capturing the value created

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