Duke Energy (DUK) Q4 2025 Earnings Call Transcript

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Date

Tuesday, February 10, 2026 at 10 a.m. ET

Call participants

• Executive Vice President and Chief Commercial Officer — Harry Sideris
• Executive Vice President and Chief Financial Officer — Brian Savoy

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Takeaways

• Earnings Per Share (EPS) -- Reported and adjusted EPS reached $6.31, representing 7% growth and coming in above the midpoint of guidance for the year.
• 2026 EPS Guidance -- New guidance range of $6.55 to $6.80 was introduced, with management reiterating a 5%-7% long-term EPS CAGR target through 2030, anchored off the $6.30 midpoint of 2025 guidance.
• Capital Plan -- The five-year plan increased by $6 billion to $103 billion, driving a projected 9.6% earnings-based CAGR and identified as the largest fully regulated capital program in the industry.
• Cash Flow Metrics -- Fund from operations (FFO) to debt improved to 14.8%, with 2026 forecast at approximately 14% and a stated long-term target of 15% as proceeds from recent transactions are received.
• Signed Data Center ESAs -- Four and a half gigawatts (GW) of electric service agreements (ESAs) are secured with data center customers, up by 1.5 GW since the last quarter; all are under construction and subject to minimum billing requirements, ramping load from late 2027 and accelerating in 2028.
• Regulatory Achievements -- Comprehensive settlements in South Carolina rate cases were fully approved in December, and North Carolina multiyear rate plan requests are progressing for planned implementation on January 1, 2027.
• Storm Recovery and System Performance -- Over 200,000 outages during the winter storm were restored at a greater than 95% success rate within 24 hours, supported by $3 billion in storm cost recovery and securitization and established recovery mechanisms in The Carolinas.
• Generation Expansion -- Construction has begun on five GW of new natural gas generation in The Carolinas and Indiana, combined with a 100-megawatt battery storage installation in North Carolina (the largest to date); approximately 14 GW of incremental capacity will be added systemwide over the next five years.
• Dividend Commitment -- Management highlighted the current dividend yield as a component of the overall risk-adjusted return profile for shareholders.
• Equity Issuance Plans -- $10 billion in equity is planned from 2027-2030 (approximately 35% of the capital plan), with consideration of various structures including the Dividend Reinvestment Plan (DRIP), at-the-market (ATM) programs, and hybrids.
• Customer Affordability Initiatives -- The company maintained electricity rate changes below the rate of inflation on average over the last decade, leveraging tax credits, cost controls, and regulatory tools such as securitization and Construction Work in Progress (CWIP) in rate base.
• Pending Utility Combination -- If approved, the planned Carolinas utility merger is expected to save customers more than $1 billion through 2038.
• New Nuclear Activity -- An early site permit application was submitted in December for a potential small modular reactor (SMR) at the Belize Creek site in North Carolina; management continues to adopt a disciplined, risk-mitigating approach to new nuclear development.
• Load Growth Drivers -- Data centers are expected to constitute 75% of economic development load growth in The Carolinas by 2030, up from 50% a few quarters ago, with residential and existing customers accounting for roughly one-third of total enterprise load growth.
• Customer Protection Contractual Provisions -- Data center ESAs feature minimum take requirements, termination penalties, refundable capital advances, and the use of tariffs to prevent cost shifting to residential and small business customers.
• Pipeline and Ramp Confidence -- Management reported a late-stage data center pipeline double the size of currently signed ESAs (about nine GW), with high probability that additional contracts will be announced in 2026.

Summary

Duke Energy (NYSE:DUK) reported EPS of $6.31, marking 7% annual growth and exceeding guidance midpoint, as management introduced a $6.55-$6.80 EPS outlook for 2026 alongside the extension of 5%-7% long-term EPS growth guidance through 2030. The company raised its five-year capital plan to $103 billion, funding the largest fully regulated capital program in the sector and driving a 9.6% earnings base CAGR. Regulatory constructs were strengthened, with the completion of key South Carolina settlements and ongoing progress in North Carolina for new multiyear rate frameworks taking effect in 2027. The company secured 4.5 GW of data center ESAs underpinned by risk-adjusted minimum demand contracts, forecasting a material ramp in load and revenue from late 2027, with a further nine GW in the active pipeline. Initiatives to maintain customer affordability continue, evidenced by rate increases trailing inflation and cost recovery mechanisms in place for storm response, which preserved guidance despite recent winter storm events.

• Brian Savoy stated, "our plan assumes normal weather and retail sales growth of 1.5% to 2% in 2026."
• Harry Sideris confirmed that, "we do not anticipate any impacts to our guidance for this year." from storm costs, with recovery mechanisms available in The Carolinas.
• There is no expected dilution in the growth outlook from the Tennessee and Florida transactions, as interest savings at the holding company are planned to offset lower earnings in divested segments.
• The capital plan's 9.6% gross rate base CAGR would be 8.8% if minority interest in Florida is netted out per management disclosures.
• New battery deployment is set to accelerate, with approximately 4.5 GW to be added through 2031, supporting broader system reliability.
• Uprate investments include about 1,000 megawatts of upgrades—mainly advanced materials for gas units, nuclear, and hydro projects—described as more cost-effective than new build generation.
• Data center ESA contracts include structural flexibility provisions, such as curtailment options and minimum ramp schedules, which enable expedited grid interconnection and safeguard system reliability.
• FFO to debt improvement resulted from the timely securitization of $3 billion in storm costs and regulatory support, with multiyear rate plans in place across multiple states reducing financing risk.

Industry glossary

• Electric Service Agreement (ESA): A contract outlining terms, load obligations, and cost recovery for connecting large commercial customers—specifically data centers in this context—to the electric grid.
• Construction Work in Progress (CWIP): Regulated utility accounting treatment allowing utilities to include ongoing construction costs in rate base prior to project completion, improving cash flow and reducing regulatory lag.
• Small Modular Reactor (SMR): A nuclear power plant design featuring smaller, scalable reactors that can be incrementally deployed, offering potential flexibility and cost advantages over traditional large-scale nuclear units.
• FFO to Debt: A credit metric indicating the percentage of funds from operations relative to total debt, serving as an indicator of utility financial strength and flexibility.

Full Conference Call Transcript

Harry Sideris: Thank you, Abby, and good morning, everyone. Let me begin by acknowledging our teammates for their incredible response to the recent winter storms that impacted our states. We were prepared, and our system performed well, which is a testament to the efforts of our team and the benefits of our grid hardening investments. Moving to financial results, today we announced 2025 earnings per share of $6.31, representing 7% growth over 2024 and above the midpoint of our guidance range for the year. I am proud to say we executed on all fronts. Our performance reflects the strength of our regulated utilities, our teammates' unwavering focus on operational excellence, and our commitment to generating sustainable shareholder and customer value.

Looking ahead, we are introducing 2026 earnings guidance of $6.55 to $6.80, also extending our 5% to 7% long-term EPS growth rate through 2030 off the original 2025 guidance midpoint of $6.30. I am more confident than ever in our ability to deliver in the top half of the range beginning in 2028 as load growth accelerates. Our earnings profile is underpinned by a $6 billion increase in our five-year capital plan to $103 billion. Our capital plan will drive 9.6% earnings-based growth and is the largest fully regulated capital plan in the industry, focused on critical energy infrastructure investments that strengthen the system and serve increasing load.

As the investment needs of our utilities accelerate, I want to emphasize that the cost of energy has been and will remain a key focus for Duke Energy Corporation. I am proud that we have kept rate changes below the rate of inflation on average over the last decade, supported by our continuous improvement culture as well as sensible federal and state energy policies. Before I turn to our focus areas for the year ahead, I want to reflect on the significant financial accomplishments in 2025 as outlined on Slide 5. It was a tremendous year of execution. We delivered strong reported and adjusted earnings above our guidance midpoint.

We also announced two strategic transactions at premium valuations that position the company for growth, and our credit profile continued to strengthen. Over the last twelve months, we worked with regulators and other stakeholders to recover and securitize nearly $3 billion of storm costs, which was key to achieving 14.8% FFO to debt in 2025. We also advanced our all-of-the-above generation strategy, adding capacity to our system across a diverse mix of resources. This includes a 100-megawatt battery storage system we installed in North Carolina, the largest on our system to date. We also broke ground on five gigawatts of new natural gas generation in The Carolinas and Indiana.

Importantly, we put contracts in place to secure the long lead-time equipment and workforce needed to support this new dispatchable generation. While we build for the growth of tomorrow, we remain focused on adding value for our stakeholders today by providing safe, reliable power at the lowest possible cost. Moving to Slide 6, this year will be defined by continued execution in four core areas: delivering value for our customers, advancing construction on new generation, converting our economic development pipeline into firm projects, and building on our demonstrated track record of constructive regulatory outcomes. Our customers remain our top priority, and we will never waver on our commitment to value and affordability.

We will continue to utilize every tool available to keep rates as low as possible, including managing costs, leveraging tax credits, and minimizing financing costs through regulatory mechanisms like securitization and CWIP and rate base. In 2026, we will also move forward through the process to combine our Carolinas utilities, which, if approved, will save customers more than $1 billion through 2038. These are some of the many solutions we will employ as we continue to challenge ourselves to find new ways to deliver affordable energy for our customers. We are also protecting existing customers from costs associated with new large load projects through tariff structures and contract provisions.

This is important as we continue to convert economic development prospects into firm projects. Since the third quarter call, we signed electric service agreements for another one and a half gigawatts of new data centers. These projects form industry clusters that create value for communities for years to come and benefit our existing customers, as fixed costs of the system are spread across a larger base. Finally, we will build on our established track record of delivering constructive regulatory outcomes, which includes our recent South Carolina rate case orders. As a reminder, we reached comprehensive settlements in both cases last year, which were fully approved by the commission in December.

In North Carolina, we are progressing our request for new multiyear rate plans, which would take effect on January 1, 2027. These requests cover investments to strengthen the grid and upgrade our fleet, and importantly, reflect cost control initiatives that have allowed us to maintain a flat O&M cost structure despite inflationary pressures in a growing asset base. We know there is never a good time for energy bills to go up. Families and businesses feel every increase, and affordability matters. That is why our focus is straightforward: keep costs as low as possible while maintaining reliability.

Moving to Slide 7, providing the reliable power our customers expect requires us to add every available megawatt to the grid and increase speed to power as we build for economic growth. We are adding approximately 14 gigawatts of incremental capacity over the next five years, which demonstrates our commitment to meet the accelerated growth in front of us by maximizing our current fleet as we add new generation. As I mentioned earlier, we already have agreements in place for the supply chain and workforce to support this incredible build, including provisions with EPC contractors to create efficiencies over time and a framework agreement with GE Vernova on turbine procurement.

With over $1 billion of capital deployed every single month, Duke Energy Corporation's scope and scale uniquely position us to lead this generation build. We have extensive experience from building nearly four gigawatts of gas generation across our fleet over the last decade. We have been actively preparing for this next build cycle for more than three years, giving us full confidence in our ability to execute the work ahead. Consistent with our all-of-the-above strategy, we will also continue to add battery and solar projects at a steady pace. Our battery deployment, in particular, will ramp significantly through the five-year plan, with approximately four and a half gigawatts of additions through 2031.

Finally, we continue to evaluate the potential for new nuclear, maintaining optionality for future development. In December, we submitted an early site permit for a potential SMR at our Belize Creek site in North Carolina. We are taking a disciplined approach to new nuclear, sharing our operational expertise and advancing licensing activities while reducing supply chain risks and allowing technologies to mature. We also continue to seek solutions that mitigate financial risk for customers and investors before we make a decision to move forward with any new nuclear development. Investing in our existing fleet, advancing new generation, and evaluating emerging technologies are critical to ensuring we can support our growing communities.

We entered 2026 with incredible momentum and are poised to deliver. We are executing our strategy and creating meaningful value for our shareholders and customers. With that, I will now turn over the call to Brian.

Brian Savoy: Thanks, Harry, and good morning, everyone. As shown on Slide 8, we delivered 2025 reported and adjusted earnings per share of $6.31, a 7% increase year-over-year. Results reflect strong execution of our financial plan, including top-line growth from efficient regulatory constructs in place across our growing states. These drivers will continue in 2026, and we set our adjusted EPS guidance range at $6.55 to $6.80 for 2026. As we move into year three of our multiyear rate plans in North Carolina, year two in Florida, and implement phase two rates in Indiana, new rates from constructive rate case orders in South Carolina will be effective in the first quarter.

We also expect to see steady growth from grid riders in the Midwest and Florida. In addition, our plan assumes normal weather and retail sales growth of 1.5% to 2% in 2026. In the gas segment, we will see growth from Piedmont integrity management riders and new rates at Duke Energy Kentucky. Finally, higher financing costs will drive results in the other segment. Consistent with prior guidance, we expect the Tennessee and Florida transactions to be earnings neutral, with interest savings at the holding company fully offsetting lower earnings at Piedmont and Duke Energy Florida. I am proud of the results we delivered in 2025, and I am bullish about the future.

We are well-positioned to execute our investment plan to serve our growing jurisdictions. Turning to Slide 9, our economic development pipeline continues to progress, increasing confidence in our growth profile. Since the third quarter earnings call, we signed an additional one and a half gigawatts of electric service agreements with data center customers, including Microsoft and Compass, and now have approximately four and a half gigawatts of data center load secured under ESAs. Our success underscores the attractiveness of our service territories to prospective large load customers. Duke Energy Corporation is a one-stop shop providing significant speed-to-power advantages.

We work with customers in our communities to optimize siting, which ensures we can connect new load quickly while minimizing system upgrade costs. As we execute our ambitious generation build cycle, we will grow together as customers ramp into their full energy demand. We are partnering with our states to attract hyperscale customers to our service territories and remain laser-focused on meeting their energy needs in a way that protects our existing customer base. These incremental volumes will support affordability over the life of the contract as system costs are spread over a larger base.

The ESA contract provisions, including minimum billing requirements, termination charges, and refundable capital advances, ensure new large load customers pay their fair share of overall system costs. As a reminder, we have consistently taken a risk-adjusted approach to evaluate which projects to include in our load forecast. I am proud of the work we have done to streamline processes across the organization to accelerate projects through the pipeline, which is yielding results. This allows us to focus our resources and efforts on high-confidence projects, supporting speed to power. With signed ESAs that lock in ramp schedules and minimum demand, we have high confidence in the load forecast underpinning our broader financial plan.

On Slide 10, our $103 billion capital plan is the largest among regulated utilities and represents an increase of 18% versus our prior plan. Our capital plan is increasing as we progress further into the generation build cycle and invest in fuel security infrastructure to support future combined cycle plants in The Carolinas as outlined in the IRP. Beyond generation, we continue to strengthen the grid to improve reliability and resiliency, delivering value for customers. Our industry-leading capital plan drives 9.6% earnings base growth through 2030, up over 150 basis points versus the prior plan. This accelerated earnings base growth, combined with efficient recovery mechanisms across our utilities, underpins our confidence in delivering sustainable, long-term growth.

Beyond the five-year plan, we see a long runway of capital investment opportunities as our generation modernization strategy advances well into the next decade. As the investment plans of our utilities accelerate, we remain committed to customer value and affordability. We are focused on making the right investments at the right time in a way that enhances reliability and affordability. Turning to the balance sheet on Slide 11, we reported 14.8% FFO to debt in 2025. The significant improvement over 2024 reflects timely storm recovery and improving operating cash flows from continued regulatory execution.

We are forecasting 2026 FFO to debt of approximately 14% and remain well-positioned to achieve our long-term target of 15% as proceeds from the Tennessee and Florida transactions are received. Our financing plan includes $10 billion of equity in the 2027 to 2030 timeframe to fund accretive growth. This represents approximately 35% equity funding of the capital plan, an increase that demonstrates our ongoing commitment to balance sheet strength. While our base plan assumes common equity issuances through our DRIP and ATM programs, we will also evaluate hybrids and other equity content securities to fund a portion of our equity needs over the planning horizon.

Brookfield's minority interest investment in Duke Energy Florida and the sale of our Piedmont, Tennessee business to Spire will further strengthen our credit profile and satisfy our 2026 equity needs. We remain on track to close the Tennessee sale by the end of the first quarter and the first tranche of the DEF investment in early 2026. With efficient recovery mechanisms in place, a disciplined focus on capital deployment, and a balanced funding approach, we are positioned for sustainable, long-term growth. Let me close with Slide 12. I am proud of the work of our employees in 2025 to deliver on our commitments.

It takes all of us executing at a high level to succeed in this dynamic environment, and we will continue to build on this momentum. As load growth and capital investment accelerate, we are more confident than ever in our ability to earn the top half of the 5% to 7% EPS range beginning in 2028. Combined with our attractive dividend yield, our growth targets provide a compelling risk-adjusted return for shareholders. Before we move to questions, I would like to recognize Abby's exceptional work leading our Investor Relations function for more than three years.

She has set the model of excellence for the industry, and we wish her continued success in her next chapter as she becomes our Chief Accounting Officer and Controller on March 1. I also want to congratulate Mike Switzer, who will succeed Abby as our head of investor relations in addition to continuing to oversee corporate development. I know many of you are familiar with Mike's leadership from our strategic transactions this year, and we look forward to the opportunity for you to work more closely with him in the coming weeks and months ahead. With that, we will open the line for your questions.

Harry Sideris: Thank you, Brian. And finally, when preparing to ask your question, ensure that your device is unmuted locally. Our first question will be from the line of Nicholas Campanella with Barclays. Please go ahead. Your line is open.

Nicholas Campanella: Hey, good morning. Thanks for all the updates. Appreciate it. Morning, Nick. I just wanted to ask, hey. Morning. You brought up the storms in your prepared remarks and the response. Just any costs or impacts from that you could disclose? And is that already kind of embedded in the midpoint view of the $6.68? If you could just confirm that. From this quarter specifically in 1Q. Thank you.

Harry Sideris: We are still compiling those costs, but I am really proud of the response the company had there. We had 200,000 outages, and we restored over 95% of those within 24 hours. It is really a testament to the team and their preparation as well as our grid strengthening that we have done over the years. We do have mechanisms in The Carolinas for recovery of those costs, so we will be finalizing that. But we do not anticipate any impacts to our guidance for this year.

Nicholas Campanella: Great. Thanks. Appreciate that. And then, you know, on the North Carolina rate case, the Carolinas rate case specifically, you brought up affordability in your comments. Obviously, a lot of stakeholders are kind of watching the case. And since it is a larger case with the merger being a big item, just curious on how you are viewing the strategy. Do you need to kind of go full distance here, or do you think that you can constructively get to an agreement to settle it like you have in prior cases? And I recognize it is early in the process, but just kind of understanding how you are viewing that potential.

Harry Sideris: Yeah. Nick, we, you know, we do not take rate cases lightly, especially in this environment of affordability. I know our customers are struggling with housing costs, insurance costs, health care costs, as well as food prices. But we are really focused on delivering reliable and affordable energy, which is what our commission and our legislators want as well. So we are aligned there. We have a lot of tools in our bag with tax credits, or one utility merger that you mentioned. These are all things that are going to help mitigate some of those increases. We have a good case that shows a lot of value for our investments going forward.

So we feel we have a good case if we get to litigation. But in the past, we have always tried to settle or settle portions and have a constructive track record of doing that. We will look to do that again. But, again, we are just focused on making sure that our customers in The Carolinas get reliable and affordable energy from us.

Nicholas Campanella: Thank you.

Harry Sideris: Thank you. Thanks, Nick.

Harry Sideris: The next question will be from the line of Shar Pourreza with Wells Fargo. Please go ahead. Your line is open.

Alexander Calvert: Hey, good morning, everyone. It is actually Alex on for Shar. Thanks for taking our questions.

Brian Savoy: Good morning, Alex.

Alexander Calvert: Good morning. So just on the CapEx outlook and the drivers behind it, obviously, a healthy number you put out there. Can you help us think about the incremental data center opportunities you are seeing on the slides? And can you just talk about your level of confidence in rolling that into the plan? We have seen data centers pull out of other states despite signing ESAs. So at what point does this move the needle for you? And how do you think about customer protections in lieu of having a blanket large load tariff? Thanks.

Harry Sideris: Yeah. I will start off, and then Brian can add some color. But we are very confident in our 5% to 7% growth rate as well as our capital plan that supports that. The ESAs that we have signed, all of those are under construction. They are turning dirt. They have zoning in hand. We do not anticipate any of those backing out. And then we have a robust pipeline that we continue to work. So we feel very confident with our projections of 5% to 7% through the period as well as in the top half starting in '28 as some of those loads come online. So very durable plan.

Consistent with what we have been talking about the last several times. Brian, I do not know if you want to add anything.

Brian Savoy: Yeah. I will just say that signing these ESAs, Alex, gives us high confidence in the growth outlook of Duke Energy Corporation because we are risk-adjusting our load forecast basically to the minimum billing demands of these contracts, which clearly gives us high confidence in the revenue profile as these projects come online. And, you know, we have got four and a half gigawatts of ESA signed. You think about those, those will start coming online in late 2027 and really ramp in '28. That is why we are pointing to 2028 as an inflection point in earnings. And our pipeline in the late stage, the ones that are moving through the funnel at pace, is about double that.

So you think about nine gigawatts is what we are working through, and you should expect new announcements over the course of 2026 as we progress the pipeline in a very expedient manner.

Alexander Calvert: Great. That is very helpful. Thank you. And just on the long-term growth rate outlook, so you raised the rate base to about 9.6% CAGR. You reiterated the top half of that 5% to 7% by '28. Can you just walk us through what is driving the delta between the two? You are obviously seeing a lot of growth in investment opportunities, especially in The Carolinas. Do you see an opportunity for that delta to narrow between rate base and EPS prior to '28? Is that just based on timing of load ramp? Thanks.

Brian Savoy: Yes, Alex. The delta between the earnings-based CAGR and EPS CAGR, there is always a difference. Right? And we have our holding company. We are funding these investments with partially with equity, partially with debt. There is a drag there that we would see, but I would point to the revenues are accelerating into that 2028 timeframe. That is when these customers will start taking energy. And we are locking in these ramp schedules, so we have high confidence in this revenue acceleration. Our earnings outlook is robust. We are pointing to the top half, which is, you know, the 6% to 7% of the 5% to 7% CAGR. And we see a very robust plan in front of us.

Alexander Calvert: Great. That is all I had. I will leave it there. Thank you.

Harry Sideris: Your next question today will be from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead. Your line is open.

James Ward: James Ward here on for Julien. How are you this morning?

Harry Sideris: Hey, James.

Brian Savoy: We are good.

James Ward: Hey. Awesome. I am going to ask just a little bit differently. So in November, you reaffirmed the 5% to 7% through '29. You have extended to 2030%. You have got the 9.6% of earnings base growth. Assuming about 2.5% dilution from financing, what has to go right to deliver the top half performance beginning in 2028 in terms of earned ROEs and so on?

Harry Sideris: Yeah. We, James, we feel very confident in our plan that we laid out. You know, 2028, like Brian mentioned, is an inflection point for our load. Late 2027 and '28 as those data centers start ramping up. So that is what is driving our confidence in that upper end of the 5% to 7%. And we see that extending out as those ramp rates continue in '29 and '30 and beyond. So we feel like our plan is very durable. We are very confident in our regulatory outcomes that we have a very strong track record of. Again, providing value and showing that value to our customers and our regulators is important.

Then the tools I mentioned earlier, how are we going to use one utility to offset some of these costs? How the data centers are paying for their fair share? And then over time reducing the cost to the customers as we spread out the cost, our fixed cost over a broader base. We feel very confident that we will continue to have constructive outcomes regulatorily and that our shaping of the load that we have laid out in our contracts will deliver that upper half of the range starting in '28.

James Ward: Got it. Thank you for that. And then the second question was on FFO to debt. You obviously achieved 14.8% in 2025. You are targeting 14.5% in 2026, 15% longer term. With a larger capital plan, what are the key assumptions that keep you within those guardrails? Timing of Tennessee and Florida proceeds you spoke to already, but thinking on regulatory cash flow mechanisms, dividend payout, and what would cause you to adjust the funding mix?

Brian Savoy: Yeah. James, I am incredibly proud of the improvement in our cash flow profile that we made in 2025 and will continue into the future. So it is underpinned by improving operating cash flows. So the great work we have done with our regulators and policymakers over the last several years is paying dividends because recovering our investments for customers in a timely way is a way to support the balance sheet and keep rates low for customers. So we are seeing that. So what has to happen to get to the 15%? Basically, the fundamentals are in place. We do not need a change in regulatory policy. We do not need a law passed.

We need to continue to execute the plan we have and support our capital investments with some equity funding. You will see that the increase in capital, we funded with 35% equity. You know, that is a good gauge of where we might be to maintain that 15% FFO to debt once we are in 2028 and beyond.

Harry Sideris: No. I would add a lot of the regulatory work we have already accomplished with some of the multiyear rate plans that we have in place, and we will be looking at multiyear rate plans in Ohio. Those help as well as CWIP recovery that helps with our customer costs, but also helps with our cash position. So that was work that we have accomplished over the last several years that will continue to help us support our FFO to debt number.

James Ward: Very clear. Thank you both. Much appreciated. I will hop back in the queue.

Harry Sideris: Thank you. Thanks, James.

Harry Sideris: The next question will be from the line of Carly Davenport with Goldman Sachs. Please go ahead. Your line is open.

Carly Davenport: Hey. Good morning. Thanks so much for taking the questions and for all the updates. Maybe just on the generation build cycle you have referenced outside of the CPCN approvals, are there any outstanding items or constraints to signing firm EPC contracts for the execution of the gas generation building your plan?

Harry Sideris: Yeah. Good morning, Carly. Yeah. We have been planning for this for the last three years, making sure that we had the supply chain built out to make sure we had all the long lead items, whether it is transformers, circuit breakers, as well as gas turbines. And also the EPC contracts. We have taken a different approach going forward with how we do this where we are looking at more of a programmatic approach with one EPC vendor that will get us efficiencies, that will help us deliver the projects on time and on budget. And move them from one project through the next project through the next project.

So as we stage those out and layer them out, we feel like that will keep us with a solid workforce as well as the experience to be able to develop these projects in a timely and qualitative manner.

Carly Davenport: Great. Thank you for that. And then maybe just on some of the uprate opportunities that you have given us, I think, some more details just on the type of generation that you are looking at those opportunities. Could you talk a little bit about the timing of sort of the cadence of the gas, nuclear, and hydro upgrade opportunity and also any indication on the capital investment required to execute on those projects?

Harry Sideris: Yes. So there are about a thousand megawatts of upgrades across the system. A lot of that is on the gas fleet with advanced materials as well as packages into those. We have done a lot of that work already in Florida. We also have about 300 megawatts of nuclear upgrades, and then the rest are some hydro upgrades. These are very competitive to new generation. They are cheaper than anything that we can do on the system. That is why we are going forward. They also add an efficiency component that allows you to get more megawatts for the same fuel, which helps with fuel costs and drives that affordability number that we were talking about earlier.

So we feel very comfortable with our plan and our costs that we have in our plan, and those are very good investments for our customers.

Carly Davenport: Great. Thank you for the time.

Harry Sideris: Thanks, Carly.

Harry Sideris: The next question will be from the line of Anthony Crowdell with Mizuho. Please go ahead. Your line is open.

Anthony Crowdell: Hey, thanks so much. Good morning, team. Abby, congrats on your last quarterly call. So I am sure you are going to really miss it. Anthony. Also, Harry, kudos to you, an operator with the same first name. It is probably not happened in a while.

Harry Sideris: We planned it that way. Just for you.

Anthony Crowdell: Alright. Just, quickly, it is not so much Duke specific. I am curious because I know you guys have two pending rate cases, follow-up on Nick's question earlier. But in the current environment where affordability has really reached a new level of concern for policymakers, do you think it is easier for parties now to come to a settlement? Or do you think with that affordability backdrop and it seems like every politician is using this as a stump speech, it is getting more challenging to reach a settlement?

Harry Sideris: Affordability is definitely on everybody's mind. And like I mentioned earlier, it is not just electricity prices that they have on their mind. It is really housing, health care, food prices. So it is definitely a topic of discussion. What we focus on talking to stakeholders and legislators is making sure that we show the value that Duke Energy Corporation provides to our customers. Through storm response, reliability, economic development, bringing more jobs and businesses into the communities. But also showing that we have always, for over 120 years, focused on cost. That is what has made us successful in the past.

That is why we have auto manufacturers and other businesses in our territory because we have always had low rates. We continue to have rates well below the national average. Our rate increases on average have been below the rate of inflation. Those are very important points as we talk to the stakeholders about what we are trying to accomplish. Then we have a lot of tools. Like I mentioned, the tax credits, $500 plus million a year of nuclear credits because of our well-run nuclear plants. Allow us to turn that back into the customers, helping absorb some of those increases as we build out the system for the future. So we feel like we are positioned very well.

We have a history of having constructive settlements. And, again, we feel like we have a strong case based on value, reliability, and affordability for our customers if we have to litigate it.

Anthony Crowdell: Great. And then just, and again, maybe this one more maybe more specific to Duke on the data centers. That is signing up, and I guess maybe regulatory approval of them. You know, you guys highlighted earlier, and you have been pretty steadfast on making sure that data centers or the big hookups large loads do not really impact residential customers or, you know, residential are made whole from these large loads.

I am just wondering, do you think the regulation shifts where not only you have to show that it is no impact to the residential of the small customer, but actually that this new load is beneficial or some net it is a net benefit and that maybe the regulators want to quantify that sooner, or do you think that the current backdrop of just showing that there is no impact to the smaller customer really will stay hold for the next several years?

Harry Sideris: I think this is another hot topic amongst regulators and politicians as well, and we continue to show that our data centers are paying their fair share. And then over time, they are actually reducing the cost to the broader base of customers through spreading out the fixed cost over a larger base. So we continue to show those results to them. You know, we have a tariff filed in Florida, but in the other we are using currently approved tariffs.

And that protect the customer in these minimum take requirements, these termination fees, these upfront capital investments from them, are all tools that we are using to show that these folks are not only carrying their weight, they are actually over time going to help our customers. So we have been very, very constructive discussions with our regulators on that.

Anthony Crowdell: Great. Thanks so much for taking my questions.

Harry Sideris: Appreciate it. You are welcome. Thank you.

Harry Sideris: The next question today will be from the line of David Arcaro with Morgan Stanley. Please go ahead. Your line is now open.

David Arcaro: Hey, good morning. Thanks so much for taking my question.

Harry Sideris: Good morning, David.

Brian Savoy: Morning.

David Arcaro: Was curious with the data center pipeline. Are you evaluating or flexibility as kind of one of the characteristics, you know, as a way to speed up interconnection? Is that something that you think data centers would be willing to consider or something that you are exploring as you firm up the ESAs?

Harry Sideris: Yeah. Great question, David. Yes. We absolutely have done that with the contracts that we have signed. That has been one of the provisions. It helps us get them online faster. They have been open to doing it because it does give them that speed to the power that they need. And it also helps us as we discuss benefits to the customers and the fact that it is going to maintain reliability, having that ability to curtail their load or have them go on their backup generation for fifty hours or so a year. So very, very constructive discussions, and that is in our contracts that we have signed.

David Arcaro: Great. Okay. Thanks so much. I will leave it there. Appreciate it.

Harry Sideris: Thanks, David.

Harry Sideris: The next question will be from the line of Steve De Ambrisi with RBC. Please go ahead. Your line is open.

Steve De Ambrisi: Hi, Harry and Brian. Thanks very much for the time this morning. Just had a quick one on sales growth and the incremental one and a half gigawatts of center ESAs that you signed. Can you just level set us on what amount of data center load growth is embedded in the 3% to 4% enterprise load growth and the 4% to 5% Carolina's load growth and just how we if there are any sensitivities that we can think about to the extent you have incremental data center ESA signings?

Brian Savoy: Yep. So as you intimate, it is becoming a more increasingly larger component of the load growth profile as we get later in the decade. And just for a number, the economic development profile that we have in The Carolinas and across the system, data centers comprise about 75% of that by the end of by 2030. Right? So it is a growing component. That was only 50% just a couple of quarters ago. But as we sign new customers, it becomes a larger component.

And so, you know, if you break down the 3% to 4% long-term load growth enterprise-wide, think of residential and existing customers are maybe a third of that, and then the other two-thirds relate to economic development, of which a big portion is data centers.

Steve De Ambrisi: Okay. And then that is really helpful. And then just to the extent that we have incrementally, you know, you referenced nine gigawatts of pipeline to the extent, you know, where we roll forward a couple of quarters and four and a half gigawatts of ESAs goes to six. Obviously, there are timing considerations, like, you know, how should we think about that layering into load growth? You know, and rolling forward your load growth projections?

Brian Savoy: It definitely is a tailwind, Steve, and I would but your point about timing is important because contracts that we signed in 2026 are going to be a year behind those we signed in '25, and then the ramp will start. So I would think about it as two ways. One, it is a tailwind to the low growth around the 2030 timeframe, and then it extends that ramp well into the thirties.

Harry Sideris: A lot of those that are in the pipeline now will be a little further out as they start their development. So that ramp rate will be towards the back end of the plan.

Steve De Ambrisi: Okay. That is helpful. And then the only other question I had was just on the rate base CAGR. It says, you know, you raised it obviously to 9.6%. And I noticed that the footnote said that it is gross of minority interest investments and or minority investments. And so just with the impact of the DEF transaction, can you talk about what that number is on maybe a net basis?

Brian Savoy: Yes, happy to, Steve. And I would say first, we put the footnote for clarity, but we have always shown the rate base growth gross because we have had the GIC investment in Indiana since 2021. So this is not new, and it is how we would we would we are investing the CapEx gross, and then the minority interest is taken out at the income statement. So, the well, we are not doing any trickery here with the rate base growth. But the 9.6%, if we took out the minority investment in Florida that is going to happen during this five-year window, would knock the CAGR to 8.8%.

But I want to underscore, you know, those the proceeds coming in from Brookfield are going to offset HoldCo. So if you are doing the detailed model, whatever you are modeling for Holdco interest expense should be less than it would be otherwise if you were going to have it on a gross level.

Steve De Ambrisi: Perfect. Yeah. Was not implying that you were there was any trickery. Just wanted to get the clarity.

Brian Savoy: No. No. No. I did not. Appreciate it. No. I wanted to be clear. I want to be clear. We added the footnotes this time. That was a new ad.

Steve De Ambrisi: Yeah. Yeah. Thank you very much.

Brian Savoy: Thank you. Thanks, Steve.

Harry Sideris: The next question will be from the line of David Paz with Wolfe Research. Please go ahead. Your line is open.

David Paz: Thank you. Just appreciate the confidence in your growth inflection in 2028. But make sure I heard you correctly. Did you say that you could still reach the top half of 5% to 7% in 2028? Reflecting just the minimum takes. So in order to predict, you will hit at least 6% even if for some reason, the data center is going to show up and cancel it.

Harry Sideris: Yeah. Good morning, Dave. That is absolutely correct. We are fully confident in being able in '28 as that load comes online, with these minimum take contract provisions that we have reaching that top half, that 6% to 7% growth rate.

David Paz: Okay. Great. Thank you. And then just on the four and a half gigawatts you have saved, would any of those or I guess any sign from me now until there is potentially some kind of order ruling on it. Large load tariff in North Carolina, which if you if we were to see a large load tariff is it do you anticipate they would impact four and a half gigawatts?

Harry Sideris: No. Not at all. These are we have existing tariffs that these things are signed under. And, you know, they will continue to function under that. Any new changes to tariffs will only apply to the new ones. We have had conferences and technical conferences with the commission in North Carolina, and they are supportive of the way that we are approaching this, and we do not see any impacts there.

David Paz: Great. Thank you so much. Thank you.

Harry Sideris: Thank you. This will conclude Q&A. So I will now hand back to Harry Sideris for some closing remarks.

Harry Sideris: Yes. Thank you for the questions today. I just wanted to wrap up real quick and reemphasize that our business has never been stronger. We delivered on 2025 commitments, and we are going to build on that momentum into 2026. We are fully executing on all years on our strategy, reaching new milestones in our generation build, and converting our economic development pipeline into real projects. I am more confident than ever that of our ability to earn in the top half like we talked about of our 5% to 7% EPS growth range starting in '28 and also the fact that this will be durable into the future.

So, again, thanks for joining us today, and thank you for your investment in Duke Energy Corporation. Take care.

Harry Sideris: This concludes the Duke Energy Corporation fourth quarter and year-end 2025 earnings call. Thank you for joining. You may now disconnect your lines.

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