PPL (PPL) Q4 2025 Earnings Call Transcript

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Date

Friday, Feb. 20, 2026 at 11 a.m. ET

Call participants

• President and Chief Executive Officer — Vince Sorgi
• Executive Vice President and Chief Financial Officer — Joe Bergstein

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Takeaways

• Ongoing EPS -- $1.81 per share, a 7.1% increase, matching the midpoint of prior guidance.
• GAAP EPS -- $1.59 per share, up from $1.20 in the previous year.
• 2026 ongoing EPS guidance -- $1.90 to $1.98 per share, with a midpoint of $1.94 targeting 7.2% growth.
• Extended EPS growth target -- Annual EPS CAGR of 6%-8% reaffirmed and extended through at least 2029, with expectations near the top end of that range based on 2025 ongoing EPS.
• Dividend -- Quarterly cash dividend raised to $0.285 per share, annualized to $1.14, reflecting nearly a 5% increase, and supporting an updated dividend growth target of 4%-6%.
• Dividend payout ratio -- Projected to remain in the 50%-60% band.
• Capital expenditures -- $4.4 billion invested in 2025 and a new $23 billion plan for 2026–2029, up from $20 billion previously, with a $3 billion increase mainly for electric transmission and distribution system enhancements in Pennsylvania and Kentucky.
• Rate base growth -- Annual CAGR projected at 10.3% through 2029, with two-thirds of the rate base focused on electric T&D, and 80% of new generation rate base already approved by the Kentucky Public Service Commission.
• Equity needs -- $3 billion in total 2026–2029 equity needs, with $1 billion executed in 2025, leaving $2 billion to be raised, financed via ATM and other equity-like structures as appropriate.
• FFO-to-debt ratio -- Maintained at 16%-18% for plan period; holding company to total debt ratio remains below 25%.
• Kentucky rate case outcome -- Approved $233 million aggregate electric and gas revenue increase, and allowed ROEs of 9.775% for both utilities, with 9.675% for capital mechanisms, each approximately 32-35 basis points higher than previous authorizations.
• Pennsylvania rate case -- Hearings concluded in a single day, with focus on data center load impact and net metering for non-load generators; new rates expected July 1, 2026.
• Rhode Island rate request -- Filed for phased increase, decision expected summer 2026, with new rates effective September 1, including $350 million in annual ISR plans and expansion of targeted low-income assistance.
• O&M savings -- Approximately $170 million in run-rate savings from 2021 baseline achieved, exceeding plan and benefiting Kentucky customers by $100 million, reducing bill increases in recent rate cases.
• Data center pipeline (PA) -- Advanced-stage projects now at 25.2 gigawatts, up 23% sequentially, with at least 10 gigawatts expected to be under ESAs by end of Q1; approximately 5 gigawatts under construction; ESAs include customer prepayment and minimum load protections.
• Data center pipeline (KY) -- Economic development load pipeline above 9 gigawatts, over 8 gigawatts attributable to data centers, with 4 gigawatts highly active and 500 megawatts under construction; advanced manufacturing pipeline at 1.1 gigawatts.
• Kentucky generation planning -- Approved pilot generation recovery mechanism enables cost recovery and return on new generation and storage investments, including deferred unit retirements; planned generation additions cover 1.8 gigawatts of need, with visible probability of needing more if demand materializes.
• Joint venture with Blackstone -- Strategic partnership formed to build, own, and operate generation specifically for data centers. No hyperscaler agreement was announced on the call, and no earnings contributions or CapEx from the JV are embedded in the updated business plan. Depending on the timing of executing these agreements and the generation mix selected by hyperscalers, earnings contributions could occur as early as the back end of the updated planning horizon.
• Competitive transmission -- Nearly $600 million of competitive projects won in PPL Electric territory, supporting grid reliability and future large-load interconnections.

Summary

PPL Corporation (NYSE:PPL) delivered fiscal performance and infrastructure investments directly in line with stated targets, while advancing visibility on sustained long-term growth. Management provided clear details supporting an updated capital plan, which incorporates growing transmission and generation demands from data center expansions, as well as full regulatory cost recovery mechanisms for Kentucky and ongoing rate cases in other jurisdictions. Explicit articulation of equity issuance and dividend strategy, combined with commitments to maintain a strong credit profile, addresses potential dilution and capital structure considerations for investors. The call outlined proactive engagement with hyperscalers and data center customers through ESAs and a Blackstone joint venture, with all incremental EPS or CapEx from new commercial wins treated entirely as potential upside rather than baseline expectations, establishing a disciplined and transparent approach to planning.

• The company outperformed planned O&M efficiency initiatives, which management emphasized as lowering customer bill increases and extending periods between base rate cases.
• Pennsylvania and Kentucky data center loads are expected to improve system utilization and may moderate future customer costs under current tariffs.
• Management specifically identified technology innovation, including agentic AI and customer-facing digital tools, as ongoing contributors to operating efficiency and customer service improvements.
• Dividend growth is set to 4%-6% during the equity issuance period, with a full-year dividend yield offering a total return proposition in the 10%-12% range when combined with ongoing EPS growth goals.
• Rate case settlements in Kentucky did not approve the proposed earnings sharing mechanism, prompting the company to reassess the timing of future filings.
• Rhode Island segment results underperformed management’s forecast by $0.06 per share, due to higher operating costs and true-ups, but management stated they do not expect those items to reoccur.
• The company prioritized grid resilience and modernization investments to address reliability headwinds from more frequent extreme weather events, which continue to impact industry operating and capital spending trends.
• Company reiterated that most identified upside opportunities would not increase customer bills and may promote lower costs over time, due to scale and supply improvements.

Industry glossary

• ESA (Electric Service Agreement): A contract with a power provider that secures service, often with minimum load requirements, prepayments, and credit protections for new, large-load customers such as data centers.
• O&M (Operations and Maintenance): Costs related to running and maintaining utility systems, commonly targeted for savings initiatives.
• FFO-to-debt ratio: A measure of financial leverage in utilities, calculated as funds from operations divided by total debt; used by credit rating agencies.
• ISR (Infrastructure, Safety, and Reliability) plan: Regulatory programs in some jurisdictions for preapproved spending on grid and gas system upgrades, cost-recovered annually.
• CPCN (Certificate of Public Convenience and Necessity): Regulatory approval to construct and operate new utility infrastructure, often tied to long-term demand outlooks.
• PJM: The regional transmission organization overseeing electricity markets and grid reliability in much of the Mid-Atlantic and Midwest U.S.
• Blackstone JV: Joint venture between PPL and Blackstone for building, owning, and operating new generation assets—targeting data center power supply.
• Hyperscaler: A very large data center operator, typically demanding high-capacity, high-availability infrastructure from utility providers.

Full Conference Call Transcript

Vince Sorgi: Thank you, Andy, and good morning, everyone. Let’s begin on Slide 4 with a look back at 2025. I am proud to report that we finished the year exactly where we said we would, delivering safe and reliable electricity and natural gas service to more than 3,500,000 customers and achieving our stated financial targets for investors. Operationally, our teams performed at an extremely high level across the company, directly resulting from years of intentional investment in our infrastructure combined with strong day-to-day execution by our workforce. We achieved first quartile or near first quartile T&D reliability in all of our jurisdictions and top decile generation performance in Kentucky.

I will say first quartile T&D performance is trending worse overall for the industry as a result of more frequent and severe storms as well as more extreme weather events. This is causing utilities across the country to increase their capital investment plans significantly to combat Mother Nature, and the same applies here at PPL. During 2025, we continued to clearly focus on innovation as this will be a significant source of continued operating efficiency across our business in support of customer affordability. We are developing several digital solutions to improve customer service, including an agentic AI digital customer service agent and a recently released customer app at PPL Electric Utilities.

We will expand the rollout of these and other digital solutions across our business in the coming years, and we are really excited about the digital future for utilities. From a financial perspective, we achieved ongoing earnings of $1.81 per share, 7.1% growth from our prior year results and in line with the midpoint of our forecast. From a capital investment standpoint, we executed $4,400,000,000 of planned investments focused on grid hardening and modernization, advanced metering, pipeline replacement in our natural gas businesses, and the initial stages of building new generation in Kentucky. These investments directly support reliability, resilience, and long-term affordability for our customers.

On the cost efficiency front, we outperformed our O&M savings target by about $20,000,000, achieving approximately $170,000,000 in run-rate savings from our 2021 baseline, about a year ahead of our $175,000,000 target for 2026. Our O&M efficiency strategy has been a key component of our affordability strategy here at PPL, and that will continue to be the case as we move forward beyond 2026. Finally, we engaged extensively with a wide range of stakeholders to power economic development in our territories.

These actions have supported the growth of our significant data center pipeline, while fueling some of the largest economic development projects our territories have seen, including the $3,500,000,000 advanced manufacturing investment by Eli Lilly, announced earlier this month right here in Allentown, Pennsylvania. In summary, this past year reflects what we strive for as a company: consistently high levels of execution, disciplined financial performance, a forward-looking strategy, and results that create value for both customers and shareowners.

Let’s turn to Slide 5. Building off our strong year in 2025, today we announced an updated business plan that extends our growth outlook while keeping customer affordability and our strong credit profile front and center. For 2026, we are issuing ongoing earnings guidance of $1.90 to $1.98 per share, with a midpoint of $1.94 per share representing 7.2% growth from 2025. We are extending our 6% to 8% annual EPS growth target through at least 2029, expecting the EPS CAGR through 2029 to be near the top end of that range based off of our 2025 ongoing earnings.

We are expecting stronger growth beginning in 2027 and continuing through 2029 compared to the midpoint of our 2026 growth range since the full-year impacts of our current rate cases do not kick in until next year. Importantly, beyond this strong base plan, we see several identifiable upside opportunities to further enhance or extend our earnings growth over time. These include earnings from competitive transmission projects, additional transmission and distribution investments to support the significant economic development that we are seeing in both Pennsylvania and Kentucky, and additional generation needs in Kentucky. It also includes earnings from our joint venture with Blackstone, which I will cover in more detail in a few slides.

Our earnings growth is supported by our capital investment plan. We project capital investment needs of $23,000,000,000 from 2026 to 2029, up from $20,000,000,000 in our prior plan period. Our updated plan includes the critical investments that strengthen our networks against those more frequent and severe storms and other extreme weather impacts. These investments will accelerate our ability to restore power when storms do strike and deliver the new generation resources approved by the Kentucky Public Service Commission last year, ensuring we continue to deliver safe, reliable, and affordable energy for our customers. The result of these investments is an estimated rate base CAGR of about 10.3%, providing a strong foundation for predictable and durable earnings growth.

Our updated plan supports PPL’s strong credit metrics, including 16% to 18% FFO to debt throughout the plan period. In support of our expected capital expenditures, the plan reflects total equity needs of about $3,000,000,000 from 2026 to 2029. Importantly, we already executed about $1,000,000,000 of that equity need last year, leaving about $2,000,000,000 of equity to be issued going forward in support of this updated plan. Finally, in connection with the updated capital needs, we modified our annual dividend growth rate target to 4% to 6% while we are issuing equity to fund our capital plan. Overall, our updated business plan balances growth, affordability, and financial discipline, while continuing to provide top-tier returns for shareowners relative to our peers.

Turning to Slide 6 and an update on the final Kentucky rate case orders that were issued earlier this week. Overall, the outcome of these cases allows us to deliver on the business plan we have outlined for you today. The commission approved an aggregate increase of approximately $233,000,000 in annual electric and gas revenues, which is within $2,000,000 of the stipulation we had agreed upon with most intervenors in the case. In addition, the KPSC approved allowed ROEs of 9.775% for both utilities with 9.675% for our capital-related mechanisms. These ROEs are 35 and 32.5 basis points higher, respectively, than our previously approved levels.

Importantly, the commission approved the pilot generation recovery mechanism, which enables recovery of and a return on investment associated with new generation and energy storage projects that were previously authorized by the commission. This mechanism supports improving reliability and resilience of our network as well as our ability to meet growing demand on the system. The mechanism also provides for the recovery of and uncertain costs related to keeping the Mill Creek Unit 2 plant online beyond its original retirement date, which was originally scheduled for 2027. We were also pleased to receive approval for our extremely high load factor tariff, which is designed to protect existing customers from the impacts of large data center loads.

One element not approved was the proposed earnings sharing mechanism which had been tied to our agreement to stay out of rate cases through mid-2028. As a result, we are reassessing the timing of our next Kentucky rate case to ensure we continue to balance customer affordability and the capital required to support system needs. While we are disappointed that the commission modified a settlement that we and the intervening parties worked very hard to achieve, overall, the revenue requirement remained effectively unchanged from the stipulation. From here, we will move forward with implementing the new rates, issuing required refunds related to interim rates, and filing a motion for reconsideration with the KPSC on several items.

Moving to Slide 7. We continue to advance progress on our ongoing rate case in Pennsylvania. Earlier this week, evidentiary hearings were held and concluded in one day. We are also actively working towards a settlement with intervenors. If we cannot agree to a settlement, we remain very confident in the strength of our case and are well prepared to fully litigate if necessary. Our case balances PPL Electric’s need to make critical distribution system and IT investments to maintain and improve reliability, customer service, and storm response while providing important customer protections and maintaining affordable rates for our customers. A decision is expected in June, with new rates effective on 07/01/2026.

Continuing with Rhode Island regulatory updates on Slide 8, in the fourth quarter, Rhode Island Energy filed its first base rate request since 2017, seeking a two-year phased increase aligned with the cost of delivering safe, reliable energy while supporting critical infrastructure improvements and affordability programs. This includes a redesigned low-income rate offering deeper targeted support for those in greatest need, importantly, without raising costs for our other customers. The decision is expected this summer with new rates effective on 09/01/2026. We also filed our annual electric and gas ISR plans in late December totaling about $350,000,000, which primarily relates to capital investments to sustain and enhance the safety and reliability of our electric and gas distribution systems.

We expect a PUC decision on the ISR filings by March. Finally, we remain committed to reaching a new hold harmless settlement in Rhode Island to provide meaningful near-term rate relief to our customers. As a reminder, the settlement that we reached with the Division last year provided for about $70 a month credit to combined electric and gas customers in the winter months of 2026 and 2027, so very meaningful credits in the months where energy bills tend to be the highest. We will be engaging with the Division and the PUC on a new settlement in parallel with the base rate case proceeding currently underway.

Moving to Slide 9 and an update on our Pennsylvania data center pipeline. PPL Electric Utilities’ service territory continues to see rapid growth in data center interconnection requests. As of today’s update, projects in advanced stages, meaning they have executed agreements and have meaningful financial commitments attached to them, now total approximately 25.2 gigawatts, up another 23% since our last quarterly update. We now expect at least 10 gigawatts to be under ESAs by the end of the first. About 5 gigawatts remain under construction, which is consistent with our last update.

That said, we believe all of the 25.2 gigawatts of projects have a high probability of completion, and our ESAs include strong customer protections, such as prepayments and credit support, as well as minimum load requirements for data center customers to pay approximately 80% of forecasted load until the costs incurred to extend service are fully recovered. So data center developers will bear the financial risk of a data center project not getting completed versus our existing customers.

Turning our attention to Kentucky on Slide 10. Economic development overall remained strong. Our current pipeline reflects more than 9 gigawatts of potential new load through the early 2030s. Load related to data centers exceeds 8 gigawatts, and about 4 gigawatts of these requests are considered highly active with 500 megawatts under construction. The development pipeline also includes 1.1 gigawatts of advanced manufacturing and other non-data center requests, up about 150 megawatts from our prior update. We are continuing to see robust economic development with several major manufacturers announcing almost $500,000,000 new investments in our service territories, including Toyota, Foxconn, GE, and Antro Energy.

Our probability-weighted demand growth projections remain at about 2.8 gigawatts, or about a gigawatt more than what was reflected in the load forecast in our 2025 CPCN. If this potential growth continues to materialize, additional generation resources will absolutely be required. In summary, continued strong interest from both data centers and manufacturing customers validates our long-term generation planning and the recent CPCN approval in Kentucky.

Turning to Slide 11. As we have been discussing for several years now, affordability remains a core commitment across everything we do. It has been a foundational element of the new PPL strategy since 2022. Since that time, we have reduced O&M by nearly 3% annually, reaching $170,000,000 in run-rate savings by 2025. About $100,000,000 of those savings benefited our Kentucky customers alone and directly reduced the increases needed in our most recent Kentucky rate cases. In the end, residential bill increases were in the 5%–11% range after roughly five years without base rate increases. This is significantly below the level of inflation over the same period and reflects the tangible benefits of sustained cost discipline.

The $170,000,000 of total O&M savings that we have achieved has helped to fund $1,400,000,000 of capital investment without incremental pressure on customer bills, enabling longer intervals between base rate cases. It has been ten years in Pennsylvania, eight years in Rhode Island, and, as I said, about five years in Kentucky without requesting base rate increases, a direct result of this strategy. Looking ahead, cost discipline will remain a critical component of our affordability strategy. In our updated plan, we project O&M growth of approximately 1% annually, well below inflation. We expect additional structural savings as we continue to harden the grid and deploy smart grid technologies and improve overall system efficiency.

We also see AI as an incremental but meaningful driver of efficiency across customer service, grid operations, and back-office functions. Beyond cost control, continued economic development across our jurisdictions also supports customer affordability. Over time and under the tariff structures we have put in place, incremental load growth, including large-load data centers and smaller distribution-connected customers, improves system utilization and helps moderate costs for existing customers. We also continue to support targeted customer assistance programs to help our customers afford their energy bills. For example, PPL Electric’s Operation HELP leaned in during the 2025 government shutdown to support low-income customers when LIHEAP grants were unavailable.

In addition to the low-income program I talked about as part of our Rhode Island Energy rate case, we have also created a new employee-funded assistance program that provides support to Rhode Island customers that meet various income thresholds. And as mentioned earlier, we remain committed to a solution on a hold harmless settlement in Rhode Island and to get those credits reflected in customer bills.

In deregulated states like Pennsylvania and Rhode Island, we do not control every aspect of the customer bill. But we are focused on lowering those costs as well. So let’s move to Slide 12 and talk about what we are doing in this regard. As an example, more than half of the customer bill in Pennsylvania comes from costs we do not control, with energy supply costs being the largest component. For several years, we have been sounding the alarm on a worsening generation supply situation in PJM, which has been the primary driver of higher customer bills. Since December 2020, energy supply costs have increased by roughly 200%, and over that time, PPL Electric’s average monthly residential bill has increased by about $68, with approximately $50 of that increase coming from energy supply costs alone. The takeaway is straightforward: the single biggest driver of long-term affordability in PJM will be increasing generation supply. And with the scale of data center growth we are seeing, we absolutely need to build new reliable generation to meet that demand. The recent call by President Trump and the state governors in PJM for an emergency auction to spur construction of generation, that is a clear acknowledgment of what we have been saying for years. At PPL, we are focused on supporting the build-out of new generation in a number of ways. First, we formed a strategic partnership with Blackstone to build, own, and operate new electric generating stations to directly power data centers.

Second, we are actively supporting legislation that has been proposed in Pennsylvania to allow regulated utilities to enter into long-term resource adequacy agreements with independent power producers. The legislation would also permit utilities, where appropriate, to build and own generation to support reliability and affordability. At the same time, we continue to invest in a robust transmission grid, capable of quickly connecting both new large-load customers and generation. At PPL, our grid will not be what stalls either new generation or data center development. I will note that even with the emergency auction envisioned by President Trump and the governors, a lot more generation will be needed.

We estimate the auction, if it comes to fruition, could produce about 6 to 7 gigawatts. This, however, would not address the expected data center demand in PPL Electric’s service territory, let alone data center demand across all of PJM. What the auction does signal, however, is increased pressure on data centers to bring their own generation to market or at least pay for the new generation required to power their data centers. And building new generation will directly lower capacity prices in PJM by increasing supply, thus lowering customer bills over time.

Bilateral arrangements to bring new generation online will continue to play a key role here as well, and our joint venture with Blackstone is perfectly positioned to enter those agreements now without needing to wait for future PJM reforms.

And that brings me to an update on the joint venture on Slide 13. We have made meaningful progress over the past year as within the PJM market continues to build. Hyperscalers are increasingly seeking bring-your-own-generation solutions, and their sense of urgency is significantly higher now. We are extremely well positioned to support this need given our expertise in PJM and the significant generation fleet we operate and are building in Kentucky. Recent market developments are only increasing pressure on large-load customers to secure dedicated generation solutions, and we have uniquely positioned the JV to deliver speed to market at scale, which we all know is the number one priority for these customers.

In support of this need, we have diligently executed contracts for several strategic land parcels over the past year and are securing natural gas capacity. We have also evolved our generation solutions in the past few months to meet hyperscalers’ changing needs. In addition to natural gas combined-cycle units that take about five years to come online, we now offer alternate generation solutions to enable new generation to come online more commensurate with the ramping requirements of data centers. While we do not have a hyperscaler agreement to announce on our call today, it is important to note that we have not embedded any earnings contributions or CapEx from the JV in our updated business plan.

However, depending on the timing of executing these agreements and the generation mix selected by hyperscalers, we could see earnings contributions as early as the back end of our updated planning horizon. Taken together, the policy signals, the market response, the engagement we are seeing from hyperscalers and other data center developers, and all the legwork that we have done over the past year, our joint venture is perfectly positioned for this moment, and we look forward to providing you with more updates as contracts are finalized. I will now turn the call over to Joe for our financial update. Joe?

Joe Bergstein: Thank you, Vince, and good morning, everyone. Let’s turn to Slide 15. On a full-year basis, our 2025 GAAP earnings were $1.59 per share compared to $1.20 per share in 2024. Excluding special items, our 2025 ongoing earnings were $1.81 per share, an improvement of $0.12 and in line with expectations. From an earnings quality perspective, the year-over-year growth was driven primarily by incremental returns on capital investments across our regulated businesses, supported by higher transmission revenues, rider recovery, and continued cost discipline resulting in lower O&M. Those benefits were partially offset by higher interest expense, reflecting the additional financing to support our CapEx plan.

Kentucky results increased by $0.09 per share, driven by higher sales volumes, largely due to weather, higher earnings from additional CapEx, and lower O&M, partially offset by interest expense. Pennsylvania results increased by $0.04 per share led by higher transmission revenue and distribution rider recovery along with higher sales volumes and lower operating costs, partially offset by higher depreciation and interest expense. Rhode Island results decreased by $0.02 per share compared to 2024. This was due to higher operating costs and other factors that were not individually significant, partially offset by higher distribution revenue.

When compared to our 2025 forecast, the Rhode Island segment decreased by $0.06 per share due to several true-ups and higher operating costs related to system costs, nonrecoverable storm costs, and several miscellaneous costs. We do not expect those items to reoccur and, therefore, do not expect these pressures to carry forward in the future periods. Finally, Corporate and Other was $0.01 better than last year, driven by lower income taxes and other factors, partially offset by higher interest expense.

Turning to the ongoing segment drivers for the fourth quarter on Slide 16. Our Kentucky segment results increased by $0.02 per share compared to 2024, driven by higher sales volumes due to favorable weather and higher earnings from additional capital investments, partially offset by higher interest expense. Our Pennsylvania regulated segment increased by $0.01 compared to the same period a year ago, primarily driven by higher transmission revenues, higher distribution rider recovery, and lower operating costs, partially offset by higher interest expense and other factors. Our Rhode Island segment results increased by $0.01 per share compared to the same period a year ago, driven by higher distribution revenue.

And finally, results at Corporate and Other increased by $0.03 per share compared to the same period a year ago due to lower interest expense and lower income taxes.

Moving to Slide 17. We continue to execute a plan that has consistently delivered at least the midpoint of our 6% to 8% annual growth target since our strategic repositioning three years ago. Over that time period, we achieved a 7% EPS CAGR, and the plan we announced today further strengthens our growth outlook.

Turning to Slide 18. We are extremely confident in the growth outlined in our updated plan. As Vince noted, we have extended our 6% to 8% annual EPS growth target through 2029, and we expect to deliver a compound annual growth rate near the top end of that range over the period, and we see several upside opportunities to bolster that growth even further. These include transmission investments. We continue to see potential investment needs to further guide reliability and support growth in large-load customers. While much of the material transmission upgrades to support our current data center pipeline are reflected in the plan, additional interconnections could enhance our outlook. We also see opportunities in competitive transmission.

Last year, we were awarded almost $600,000,000 of competitive transmission projects in our PPL Electric service territory, and we believe we can be competitive more broadly in PJM and even in MISO. On the Kentucky generation side, should economic development continue to come to fruition as our pipeline would suggest, we will need to build even more generation in Kentucky to meet the increased demand, especially if it is data center demand. Depending on the type of resources needed to meet that demand, this could result in upside to our current plan or support capital spend and earnings beyond 2029.

Finally, on the Blackstone JV, as we have said, we are not assuming any earnings contribution from the partnership in our updated plan. However, depending on the timing of when we sign agreements with hyperscalers and what type of generation they desire, we could see some upside in the back end of the plan. Importantly, most of these upsides do not necessarily drive customer bills higher, but could actually lower them over time. Overall, our updated plan supports a disciplined approach to capital deployment, providing safe, reliable, affordable service for our customers and a focus on delivering strong, sustainable growth for shareowners with a number of upside opportunities.

Moving to Slide 19. We have provided a walk from our 2025 ongoing earnings results of $1.81 per share to our 2026 forecast midpoint of $1.94 per share. Across our business segments, we project this forecast midpoint to be primarily driven by improved rate recovery and higher revenues associated with ongoing capital investment programs. We expect these drivers to be partially offset by higher depreciation and higher interest expense. Taken together, these drivers underscore our continued ability to deliver steady, predictable earnings growth across our segments despite operating in a higher-cost environment.

Turning to Slide 20. Our updated capital plan supports customer-focused investments of $23,000,000,000 over the next four years, a $3,000,000,000 increase in CapEx needs compared to our prior plan. Overall, the primary areas driving the increase relate to electric transmission and distribution investments. On the transmission side, we are projecting an increase of nearly $2,000,000,000, with nearly $1,300,000,000 supporting Pennsylvania’s data center development and reliability projects. The remaining $700,000,000 of that increase will support system hardening and smart grid deployment in our Kentucky service territory. We are also projecting an $800,000,000 increase in electric distribution investments, the majority of that focused on strengthening and modernizing the grid across Pennsylvania and Kentucky.

And in Rhode Island, we have adjusted some of the timing of our prior plan spend, which lowers our capital expenditures throughout this time period.

Turning to Slide 21. Our updated capital investment plan supports annual rate base growth of 10.3% from 2025 to 2029. As shown on this slide, two-thirds of our rate base relates to investments in our electric transmission and distribution networks, and about 80% of our expected generation rate base increase is based on projects that have already been approved by the KPSC.

Moving to an update on PPL’s financing plan on Slide 22. We continue to believe that having one of the sector’s strongest balance sheets is a clear strategic advantage that provides the company with significant financial flexibility, benefiting both customers and shareholders. And our updated business plan maintains strong credit metrics throughout while supporting our updated earnings growth targets. This includes maintaining a 16% to 18% FFO to debt ratio and a holding company to total debt ratio below 25%. We have included a new funding sources chart outlining how we plan to finance approximately $23,000,000,000 of capital investment needs.

We expect roughly half of the plan to be funded through cash flow from operations, which is net of common dividends, with approximately 40% financed through debt primarily at the utilities. This results in total equity needs of about $3,000,000,000 over the 2026 to 2029 period, including about $1,000,000,000 of forward equity transactions already executed in 2025. That leaves approximately $2,000,000,000 of equity that we will opportunistically execute through 2029. We expect to continue utilizing our established ATM program and may supplement it with other equity-like financing structures where they provide an efficient cost of capital, consistent with our approach in 2025.

Moving to Slide 23. The dividend remains a key component of PPL’s total return proposition. As such, our board of directors declared a quarterly cash dividend of 28.5 cents per share to be paid on April 1 to shareowners of record as of March 10. This represents a nearly 5% increase from our previously issued quarterly dividend, resulting in an annualized dividend of $1.14 per share. The increase aligns with our updated dividend growth target of 4% to 6% per year. We expect the dividend payout ratio to remain within a 50% to 60% range over the plan period.

The combination of PPL’s EPS growth and current dividend yield continues to provide investors with a top-tier total return proposition in the range of 10% to 12%. This concludes my prepared remarks. I will now turn the call back over to Vince.

Vince Sorgi: Thank you, Joe. Let’s move to Slide 25. In closing, I will leave you with a few thoughts. First, 2025 was a year of delivery. We told you what we were going to do, and we did it—operationally, financially, and strategically. That consistency is the foundation of who we are as a company. Second, our long-term outlook has never been strong. The updated business plan we introduced today extends our growth trajectory, strengthens the predictability of our earnings, and does so with continued discipline around affordability and credit quality, keeping our customers front and center in everything we do.

We are entering 2026 with a clear line of sight to the investments, cost structure, and regulatory frameworks that will support sustained, durable value creation. Third, the trends shaping our industry—data center growth, electrification, and the need for new generation—are all moving in our favor. The momentum we highlighted today across Pennsylvania and Kentucky and through our joint venture with Blackstone reinforces the central message you have heard from us for more than three years: the system needs new, reliable, dispatchable generation, and the market is now aligning around that reality. We are positioned exactly where we want to be as these forces accelerate and converge. And finally, none of this happens without our people.

Our teams continue to deliver for our customers with professionalism, skill, and care. Whether it is restoring power and natural gas during severe weather, operating one of the nation’s most reliable grids, or advancing the technology and partnerships that will define the next decade of energy delivery, I cannot thank our electric, gas, and generation crews enough. They are the unsung heroes of our industry, as they work in some of the worst conditions possible to ensure our customers have the energy they need to power their lives and businesses. So we enter 2026 with confidence—confidence in our strategy, confidence in our execution, and confidence in the opportunities ahead of us. And we are focused on the long game.

We are aligned around the right priorities, and we are committed to delivering value for both customers and shareowners. And for our shareowners, we offer you a top-tier 10% to 12% total return proposition, a return grounded in long-term earnings growth with expectations to achieve compound annual growth near the top end of our 6% to 8% target through at least 2029. That earnings growth is supplemented with a dividend that we have paid for every quarter over the past eighty years and expect to grow in the 4% to 6% range over the planning horizon.

And this growth is driven by the rate base growth being generated by the critical investments we need to make to stay ahead of Mother Nature, resulting in a rate base growth of over 10%. But none of this is achievable if our customers cannot afford to pay their bills. And that is what sets PPL apart from our peers. We have been and will continue to be laser-focused on minimizing bill increases or even reducing overall bills for our customers. We will do that through our actions over those areas of the bill that we directly control and even attacking those parts of the bill that we do not.

All of this creates the balance between customers and shareowners that we believe utility investors are focused on. We thank you for your continued interest and support of PPL. And operator, let’s open it up for questions.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then 1, on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. At any time your question has been addressed and you would like to withdraw your question, please press star, then 2. The first question will come from Shahriar Pourreza with Wells Fargo. Please go ahead.

Shahriar Pourreza: Good morning, Vince. Just first on Pennsylvania. I mean, there is lots of debates and theories with sort of the investment community around the process. Obviously, you guys do not want to front-run the process, but maybe just a bit more color around how the conversations are going. Are there any kind of sticky points here? And should we read into anything given the fact that the hearings were done in a day versus the expected three days? We just saw two black box settlements. So just maybe a little bit more color there would be great.

Vince Sorgi: Sure. There is a lot there. Sure. Let’s see. Maybe we will start with the rate case and then maybe more broadly about Governor Shapiro’s comments. Does that work?

Shahriar Pourreza: Perfect.

Vince Sorgi: Okay. So on the rate case, you know, you asked what are the areas of focus, if you will. Look. Besides the usual suspects, I would say generally pretty light, Shar. So a lot of discussion around the impact of data centers on customer affordability. You mentioned the hearings, it was one day. Pretty much the entire hearing was on a data center load impact on customers, which, as you know, that is all connected to the transmission grid, so not really directly relevant to a distribution rate case. But that was the main focus of the hearing. So I would say that was positive.

The other area is area of focus from the intervenors is really the proposed changes to the net metering rules that we have for non-load generators. These are the solar projects that are connecting to the distribution grid. In terms of settlement, as you know, no hard deadline there. I will say we are actively engaged with the parties, and we continue to be as I speak here right now. From an overall process standpoint, I think the case continues to advance. It is going as we would expect. Briefings are scheduled in March with a final order expected in June and then rates effective July 1.

I will say, I think maybe there was some hope or expectation in the market that we would have had a settlement announcement before the hearings. I think if you look back at when those announcements generally happen in Pennsylvania, it is more around the main brief meeting and or deadline, not necessarily the initial hearings that we just had. So just FYI on that. But, look, we feel really good about underlying strength of our filing and the investments that are in there that are supported, particularly around improving the reliability of the system.

As I talked about in my prepared remarks, we do have some affordability measures included in there, including memorializing what we have in our ESAs into a large-load tariff. But with all that said, I would say a constructive outcome really does not hinge on a settlement in our view. We are comfortable whether this resolves through settlement or a commission decision. So feeling good either way. And then more broadly, just on the Shapiro comments, look.

I think the state remains incredibly constructive and supportive of its utilities, and I think they recognize the investments that are needed to not just ensure that we can continue to provide safe, reliable energy to our customers, but it is critical to help drive all this economic growth that we see coming to the state. And you may have heard Senator Yaw just recently made some comments, which we completely agree with, that the core issue around affordability and high prices is that generation has not kept pace with demand. And it is really the imbalance between supply and demand that is driving those pressures.

Obviously, affordability is clearly a concern at the state level, but it is important to focus on really what is driving that and, as we said, about 50% of the energy bill or electricity bill is that energy supply cost. And those costs are up about 200% over the last five years. Represents $50 a month increase of the total $68 a month that we have seen over that time period. So we will continue to engage with the governor and his team just to make sure that he recognizes the importance of having strong utilities, that they are financially strong, and the role that we play in driving all of this economic development.

So I think those conversations continue to be constructive. I think the state overall continues to be constructive despite some of the comments that we may have heard that might suggest otherwise. And from our perspective, Shar, we just keep doing the right thing for our customers as we have been doing over the last decade or more. Not because we are told to do it that way, but that is just how we operate.

And so every dollar we have spent and will continue to spend is critical to ensure that we can deliver that safe and affordable, reliable energy but also drive that economic growth, and there is no question in my mind—none—that everything we have done is well justified.

Shahriar Pourreza: Got it. Super comprehensive answers to my 25-part question. I appreciate it. I will pass it to someone else. Thanks.

Operator: The next question will come from Jeremy Tonet with JPMorgan. Please go ahead.

Jeremy Tonet: Hi, good morning.

Vince Sorgi: Hey, Jeremy.

Joe Bergstein: Morning, Jeremy.

Jeremy Tonet: Just wanted to pivot over to Genco if I could. It sounds like contracts could be in the near term there. And so just wondering, is this something that you would wait for an earnings call to announce, or could something be communicated earlier than that if the deal comes together?

Vince Sorgi: Yes. I do not think we would necessarily need to wait for an earnings call. No. I think that would be a significant event that we would do that off-cycle, for sure.

Jeremy Tonet: Got it. Thanks for that. And for the JV, would the JV look to bid into the base residual auction? Or just wondering your thoughts around that.

Vince Sorgi: Yes. So right now, we are still evaluating, Jeremy, whether that is something that we would participate in. The normal auction, I do not see the JV participating in that. The special auction that PJM might be holding for the backstop creation or incentivization of new generation, perhaps, but we really need to see the final structure, if that even comes to fruition, what that is going to look like. We have to see if it fits within the risk profile that we have set up here.

You know, I have said all along that the joint venture with Blackstone, while that could be meaningful for us for sure, we are not looking to significantly modify the risk profile of the company with it, which is why we have talked about regulated-like structures of contracts, etcetera, etcetera. So really depends on what the details of that auction might look like, and we will have to determine if that fits the risk profile that we are looking for.

Jeremy Tonet: Understood. That makes sense. And one quick one if I could. Just as regards the nature of the generation, when you are talking about the alternative generation solutions that could come online more commensurate with ramping requirements of data centers, if you could share a little bit more color on what that could look like.

Vince Sorgi: Yes. I prefer not to talk about the actual types of technology that we are looking at. But just suffice it to say, these are technologies that we could get online more in kind of the 2028–2029 timeframe versus, call it, 2031–2032, like what we are seeing with the larger CCGTs.

Jeremy Tonet: Got it. That makes sense. I will leave it there. Thank you.

Vince Sorgi: Sure, Jeremy. Thanks.

Operator: The next question will come from Steven Fleishman with Wolfe Research. Please go ahead.

Steven Fleishman: Hi, good morning.

Vince Sorgi: Morning, Vince.

Steven Fleishman: Just a follow-up to that last one. Is it fair to say that it would be mainly other gas-fueled technologies, or would you even be looking at things like fuel—well, I guess, fuel cells, or I guess it is gas-fueled too—but fuel cells or storage?

Vince Sorgi: Could be all of those, Steve.

Steven Fleishman: Okay. And maybe switching gears back to your data center backlog. Could you just give some color on all these, you know, the 10 gigawatts that is supposed to come on by the end of the decade, or might even be more than that. Or the ones that are highly likely, like, what were these customers thinking they were going to get their generation from? Just, like, buy it off PJM market, or—I mean, obviously, Susquehanna one, but just—and I guess the second part of that is, what is the risk that they switch gears from the region if this does not get resolved soon, or are they pretty committed to come either way?

Vince Sorgi: Yes. Sure. So, look. As we have talked about in the past, I think the key for the hyperscalers has been speed to getting connected to the grid. And that has been something that we have been able to deliver consistently since we have been talking about this. To your point, I am not sure they were that focused or concerned about where the actual generation was coming. We are in an RTO. We are in the PJM ISO. The market takes care of that. They did not really have to worry about it.

You know, they have energy procurement parts of their business that procure the energy if they want to do that on a forward basis or as part of polar loads or just shopping, etcetera. So I think they were just thinking through the normal process there. Obviously, the heat has been turned up on just adequacy in PJM, the amount of load that is connecting here versus the lack of generation. Obviously, all of that is moving in our favor.

So they are to the table, which is kind of where we thought they would be when it was apparent that they were going to have to worry about this, I would say, more pointedly than they had in the past. So the good news is they are. They are extremely focused on it. Our engagement with them is incredibly constructive. Their sense of urgency is much higher than it was, probably because of some of the political pressure now that is being put on them and the industry overall. But, yes, I think they were just planning on getting it from the market.

Steven Fleishman: I think—oh, are they—it sounds like they are still willing to stick with it and not, like, divert—oh, yes. So pay you the money. We will pay you the money and then—but we are going elsewhere.

Vince Sorgi: Yes. I mean, look. We are—yes, we are up another 23% this quarter versus last. I will tell you the interest is continuing to be there. So we are not seeing people pulling out as a result of the gen issue. We just see them engaging in a very different way to help solve it. I would even say I think Pennsylvania itself speed is starting to look better and better to the hyperscalers. They took notice during this latest cold spell that our transmission network performed flawlessly through that event. And Pennsylvania was the one that was generating and exporting the vast majority of the energy, including down to Virginia, which is where, obviously, current data center alley is.

So what we have heard directly from some of the hyperscalers is they are actually very impressed with the reliability both on the gen and transmission side in PA. So if anything, I would say they are getting more comfortable staying here versus thinking about leaving.

Operator: Thank you very much. The next question will come from Michael Ronigen with Barclays. Please go ahead.

Michael Ronigen: Hi, thanks for taking my questions. You highlighted upside to your EPS forecast. You talked about competitive transmission projects, you know, additional T&D in Pennsylvania and Kentucky, more generation in Kentucky, and Blackstone JV. Was just wondering if you could talk about the potential size of the investment opportunity here, what it could maybe increase your EPS CAGR to, and, you know, what portion of the investment would be financed with equity?

Joe Bergstein: Yes, thanks, Mike. It is Joe. Well, good job in recapping all of the drivers there. So, look, I am not going to quantify that today from either an EPS or a capital perspective. The intent there really was to show you what gives us confidence in our plan—right?—delivering the plan that we laid out today, and then where we see the upside potential coming from. So, look, we believe that all of these areas can certainly come through for us to some extent. Ultimately, the size and timing of that will depend on a number of factors.

But they are all areas that we are active and successful in to date, and we think that they continue to provide more benefit as we go forward. As far as your funding question, look. All of that is dependent on what type of capital is—how we get recovery of that—rate cases and other things. I would say, though, if, you know, we added $3,000,000,000 of capital to the plan and we increased the equity amount by $1,000,000,000, I guess, generally speaking, that is a decent rule of thumb. But there are other factors that could influence that amount.

Vince Sorgi: Yes, Mike, I would just add to that those upside opportunities for both CapEx and EPS are not the type that necessarily will drive rates up for our customers, which is incredibly important. So obviously, the Blackstone JV new generation increases supply. That should put downward pressure on wholesale energy costs that flow back to the customers. On the transmission side, right, we have talked about every gigawatt that we connect on the transmission side—that continues to lower the bills for everybody else just because we are spreading fixed costs over more customers, and those large loads end up taking a big piece of that fixed cost. So that is good for our customers.

So many of those areas are actually—while there are upsides to the earnings, they are not pressuring the bill, which is—in some cases, they could actually lower the bill. So really, really pleased with the makeup of those upsides.

Michael Ronigen: Great. Thank you. And then secondly for me, you know, for the Blackstone JV, I know in the past you talked about having to secure turbines still. So just wondering if you could provide an update on where you stand in sourcing the supply chain, and I know you said you secured land parcels. I was just wondering if you could talk about more strategic advantages your JV has that you would highlight.

Vince Sorgi: Yes. Sure. So, I mean, I am not going to talk about the size or where the land parcels are, obviously, for competitive reasons. But I will say that they are in Pennsylvania, and they can support multiple gigawatts of generation. And, obviously, we strategically locate those where transmission and natural gas can easily be interconnected. So making really good progress there. On securing turbines, a lot is happening on the turbine front, as you probably know. GE was certainly early on with their commitment to build new capacity for turbines. We are seeing the same now with Siemens and Mitsubishi.

So while we have not formally locked in any reservation agreements with either of the three parties, we are very actively engaged with all three and actually feel pretty good about our ability to get turbines from either or all of those to meet the needs of the data centers. The bigger issue, right, is providing generation sooner for them that can kind of match the load forecast and the ramping schedule that they have, and we would not be using the combined cycles for those. And those are those other types of technologies, and supply chains look good for those. And again, we should be able to get some of that in, call it, late 2028–2029 timeframe.

So we are focused on that as well for the near term, but we feel good about our ability to get the turbines that we need for that 2031–2032 timeframe for the big CCGTs.

Michael Ronigen: Great. Thank you very much.

Operator: The next question will come from David Arcaro with Morgan Stanley. Please go ahead.

David Arcaro: Hey, good morning. Thanks so much. Hey, I was wondering if you could elaborate a little bit on the EPS growth trajectory. Excuse me. Sorry. It looks like growing, you know, seven-ish percent into 2026, and then looks like it accelerates beyond that point. Wondering if you could just kind of frame out, you know, does it go above the top end of the annual kind of growth rate at some point looking out through the forecast? And how does that shaping look?

Joe Bergstein: Yes, Dave. It is Joe. Yes, you are right. It does increase, as we said, starting in 2027. It is not a back-end-loaded plan. I would say the growth between 2027 and 2029 is, generally speaking, pretty linear. So I think you can think of it in that regard.

David Arcaro: Okay. Got it. And then maybe on O&M, you have had, you know, a very successful O&M cutting program here. And I guess as you look out to another 1% kind of inflationary rate, wondering if you could just talk to levers to manage that and look for more cost-cutting opportunities going forward within the plan?

Joe Bergstein: Yes. There is certainly more in the plan that we will look to. As we deploy capital across the networks, continued deployment of smart grid technology can drive costs lower. We have seen that already. I think there is more to do there. IT system upgrades can certainly provide a benefit to us. And then we are looking at deployment of AI across O&M savings beyond what we are seeing. Some of those we have in the plan and get us to that 1%, but certainly others we will look to improve upon that once we deploy the various forms of technology.

David Arcaro: Okay. Got it. Great. Thanks so much.

Operator: The next question will come from Paul Zimbardo with Jefferies. Please go ahead.

Julian: Hey, good morning team. It is Julian on for Paul here. Thank you guys again. Appreciate it. Can you comment a little bit—how material could this JV be, right, by the end of the decade? I just want to make sure we are zeroing in. We are not either exaggerating it or, at the same time, the total opportunity here. Again, seems like you have multiple sites, potentially working with hyperscalers, which would imply a certain size and scale. But want to ask you directly, how material could this be and by when? And how many innings are you in to this contracting effort? Because, obviously, that can take some time at times.

Vince Sorgi: Yes. I mean, we are—I would say we are many innings in. Obviously, we have been working the JV for about a year now, Julian, so a lot of work has gone into making sure that we can provide those solutions, whether it is land, natural gas supply, working with gas suppliers on extension leads, all of that. At the same time, we are working with the hyperscalers and data center developers as well. It is not just the hyperscalers. We are seeing data center developers also very interested in bringing BYOG solutions to their hyperscale clients as well. So pretty far along.

Again, we have not given a date or a timing on our expectation of signing an ESA just because of the complexity and the time it takes, primarily to get, I would say, to the hyperscaler approval process. These are very large organizations that it just takes time, and they are complicated. So we certainly understand that. In terms of how big it can be, yes, it is a bit early for that, I would say. Obviously, our focus right now is getting these first deals over the goal line. But as I have said before—and, look, I think the joint venture can be meaningful for us for sure.

That is why we are spending so much time and attention on it. But as I have said before, and from the beginning, we are not really looking to change the overall risk profile of the company with the joint venture. So that is why you heard us talk about things like regulated-light contracts and things like that. So you asked through the end of the decade, so through 2030. Clearly, given now that we are providing solutions that would have a generation ramp more commensurate with the load profile at the data center, I think we absolutely can see some earnings from the JV, maybe even the back end of this plan, which is 2029, certainly kicking into 2030.

More materially, though, I think you will see it when those combined cycles start to come online, which is in the early 2030s. But I do think you will see from us, ultimately, some earnings contribution in the back end of this decade, more meaningful into next.

Julian: Awesome. Excellent. Thank you, guys. And maybe if I can go back on the load forecast real quickly. On Pennsylvania, it seems like it came down on ’27 slightly even while you ramped up materially the longer dated. Can you comment on what you are seeing near term versus longer dated? And then separately, also, in Kentucky, you comment here about updated projections of 2.8 gigawatts of load by 2032. Is that fully in the plan? Because I think the plan is this 1.8. Can you comment a little bit about what is in your updated plan here in Kentucky and then also the dynamics in PA?

Vince Sorgi: Yes. Sure. So PA is really just the data center developers and the hyperscalers taking longer to get their projects built and completed. So the projects are still all there. They are just getting pushed out a little bit. So we kind of suspected that would happen. Again, a lot of the early discussions in the ESAs that we are signing with folks were to get that capacity signed up. That is competitive advantage for them. In some cases, I think the timeframe that they had given us was probably quicker than they physically were able to build out the capabilities. But overall, the projects are still there. So nothing really of concern in PA.

And then in Kentucky, the 2.8 is 2.8 as well last quarter. This quarter’s 2.8 is not the same as last quarter’s 2.8. Normal business development stuff happening in Kentucky as well. We have a lot more projects in this 2.8 than the prior 2.8. We actually have close to 2.5 more gigawatts in this 2.8. It is just on a probability-weighted basis, the two happen to both be 2.8. So good news is we are getting more projects, more gigawatts in the queue. We are just early in some of those additions, which is why the overall position has not changed much.

But to your point, what we have in the plan is basically the generation that is currently underway—the solar, the battery, and the combined-cycle plants—as well as the environmental remediation on the gen plant. So that is all in the plan. We did push out the 400 megawatt battery that we had in the original CPCN that got deferred—that is still in the plan, we just pushed it out from 2028 to 2030. So there is some capital spending in the through-2029 time period for an in-service in 2030. But that all supports just 1.8 gigawatts.

So if the 2.8 were to happen—and there are some large projects in the 2.8 that might only be in there 50% probability—if some of those hit, we could blow through that 1.8 very quickly. So that is why we indicated we could potentially have a CPCN filing as early as this year to either go back in for the 400 megawatt battery or potentially even more than that. But most likely, what we would like to see is similar to the conversation we had on the Blackstone JV and trying to get smaller generation amounts online quicker.

I think that is where you would see this type of a CPCN is trying to keep up with the ramp rates as opposed to the big projects in 2032 at this point. So that is why we are saying we could do that as early as ’26 with all of these things kind of moving in the direction of more versus less.

Julian: Awesome. Hey. Thank you so much for the detailed response to this. So looks like ’26. We will see what you guys ultimately file for in Kentucky. Batteries or otherwise.

Operator: Sounds good. The next question will come from Angie Storozynski with Seaport. Please go ahead.

Angie Storozynski: Hey, thank you. In your prepared remarks, you talked about potential contracting with generation assets of IPPs in Pennsylvania—at least that is what it sounded like to me. And I am wondering if you are referring to existing assets or to new build, and what type of earnings benefit, if any, that would present for your Pennsylvania utility?

Vince Sorgi: Sure. So this is all in the context of resource adequacy, Angie, and trying to get new generation built in Pennsylvania. So within the legislation that has been proposed, there are really two main components. There is this LTRAA, which are really long-term resource adequacy contracts that would be a contract between the utility and an IPP to build new generation. Again, it is not for existing generation. This is to promote getting new plants built. So it would be for new generation. And then the second piece, obviously, is the ability for utilities to own generation as a backstop or as directed by the commission for whatever reason. So, yes, that is the LTRAA component of the legislation.

Angie Storozynski: And if you were to pursue one of those, do you think that this would be, for example, deducted against the capacity deficiency that would be procured in the backstop PJM capacity auction? I am just trying to figure out how that gets embedded in the PJM planning and those future capacity procurements.

Vince Sorgi: Yes. So, generally, I think the way we are thinking about it right now—that, of course, that legislation is proposed and, hopefully, in the springtime, we will start to see some debate on those bills in the chambers. But we are still early innings, as you know, on that legislation. But the thinking now is that both the load and the generation would both be in the PJM auctions. A lot of the load is already in the PJM forecast, so any new generation coming on would just increase the supply part of the equation to basically help supply all of the load that we have in there.

But as we kind of think about this going forward, I think the intention and, again, the pressure that we are seeing at the federal and state level is that when a hyperscaler or a data center developer brings a gigawatt, two gigawatts of load, they are also bringing the plan that they had to bring the commensurate amount of generation to offset that. And I think the way you need to think about that is in the calculation that PJM actually performs, which discounts the load significantly less than how they discount generation. So on a pure megawatt-per-megawatt basis, you actually need more generation than the load for that to balance out in the PJM auction process.

And those are the conversations that we are having with BYOG solutions.

Angie Storozynski: Okay. And then changing topics. The results in Rhode Island—you mentioned about a $0.06 drag on 2025 earnings in Rhode Island versus what you had expected or budgeted. And I understand it is a onetime issue, but is it a onetime issue because of the rate case that you just filed, meaning that some of those earnings deficiencies get remediated in this rate case? Or is it that those were just truly onetime in nature—earnings impact that will not repeat themselves regardless of the outcome of this pending rate case?

Joe Bergstein: Yes. It is a little bit of both, Angie. There are certainly some that get remediated as part of the rate case, and then there were some true-ups, like I mentioned, on the transmission revenue true-up that was truly onetime in nature. But that is really why we do not think that these will continue, and we generally see positive earnings performance from here after we get through these true-ups and onetime items.

Angie Storozynski: Okay. Okay. Thank you. Thanks, guys.

Operator: The next question will come from Anthony Crowdell with Mizuho. Please go ahead.

Anthony Crowdell: Appreciate you guys squeezing me in here. I will try not to clear my throat like everyone else. I guess first on the settlement discussions in Pennsylvania, it appears from Governor Shapiro’s remarks there is more of a—affordability is always important. There seems like there is more of a consumer focus in the state. Have you noticed parties may be more rigid or less flexible in these discussions than previously? And I have another follow-up.

Vince Sorgi: No. I would say nothing out of the ordinary in terms of settlement discussions with the parties. I mean, there are various views of course with the different intervenors, and that is always the challenge in coming up with settlements, but that is normal. So no, I would not say I am seeing anything different as a result of our governor’s comments.

Anthony Crowdell: Got it. And then Steve had a question when he asked about where did the hyperscalers think the power was coming from. And if I understand correctly, you said they believed just they would connect to the grid. My question is, when you have the discussions today, the political backdrop that is going on, when you have discussions today with these hyperscalers, is there a clear preference for new generation that would benefit the partnership? Or are they just like whatever I could sign, I will take whether it is existing or new?

Vince Sorgi: No. There is a clear preference for new generation because that is what the White House is calling for. That is what our state governors are calling for. PJM, NERC, FERC, everyone is saying if you are going to bring a gigawatt or two of load, you need to bring new generation to supply that load. So, look. Will they still try to procure power from, say, the nuclear fleet for their clean energy goals and all of that? Perhaps you will continue to see that happen. But there is just a lot of pressure right now to build new, and that is what we are seeing.

Now in particular with the joint venture, those are the conversations that we are having because that is the offering that we are providing. We are not providing connecting to existing generation, Anthony. So, clearly, that is the conversations we are having. Whether they are having conversations on existing assets I cannot necessarily comment on. But the conversations clearly are more urgent, more significant. They understand the issue, and they seem very committed to helping to resolve it.

Anthony Crowdell: Great. Thanks for taking my questions, guys.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Vince Sorgi for any closing remarks.

Vince Sorgi: Yes. Thanks for joining us today, everybody. Again, just real quick summary: the business plan, the business itself—I think it is stronger than it has ever been. We are excited about moving into 2026 and delivering this. Blackstone JV, tremendous opportunity there. Everything moving in the right direction. So look forward to seeing you all on the circuit in the next month or so. Thanks for joining us.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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