Financial Data and Key Metrics Changes - The company reported earnings of $1.58 per share in Q2 2025, a decrease of $0.18 compared to Q2 2024, primarily due to weather, O&M costs, share issuance, pension and OCAD non-service credits, income taxes, and D&A [17] - Weather-normalized sales increased by 5.2% year-over-year, solidly within the guidance range of 4% to 6% [18][20] - The company experienced a 2.4% customer growth in the second quarter, with significant contributions from both residential and commercial & industrial (C&I) customer classes [19] Business Line Data and Key Metrics Changes - C&I sales showed robust growth at 8% for the quarter, driven by diverse data center and large manufacturing customers [18] - O&M costs were higher this quarter due to the timing of a planned major outage at the 4 Corners plant, but the company anticipates balanced spending aligned with O&M guidance in the second half of the year [21] Market Data and Key Metrics Changes - Arizona's economic backdrop remains strong, with Phoenix ranking in the top three among the hottest new home markets for 2025 [19] - The Arizona Commerce Authority reported a record-breaking year in fiscal 2025, with 24,000 jobs created and over $31 billion in business investments [8] Company Strategy and Development Direction - The company updated its clean energy goal from zero carbon to carbon neutral by 2050, focusing on reliability and affordability for customers [12] - A new pipeline project with Transwestern Pipeline Company is expected to enhance regional energy reliability by expanding natural gas transport capacity [10][11] - The company is focused on investments to protect the grid from extreme weather and has proposed a formula rate adjustment mechanism to improve timely recovery of costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term sales growth guidance of 4% to 6% through 2027, supported by strong in-migration and population growth [20] - The company is closely monitoring sales growth and weather as it moves through the summer, with expectations to end the year in the top half of the full-year EPS range of $4.4 to $4.6 per share [22][23] Other Important Information - The company filed a rate case on June 13, requesting an increase of annual revenue of $580 million, with rates expected to be in effect in 2026 [13] - The company is evaluating additional opportunities to build FERC jurisdictional transmission for customer benefit [11] Q&A Session Summary Question: Can you elaborate on the opportunity to scale beyond the current RFP? - Management indicated that the pipeline project is foundational for building generation and transmission needed for future growth, with the potential to exceed two gigawatts in total results from RFP and procurement efforts [29][31] Question: What is the scale of the transmission opportunity? - Management confirmed that transmission investments are expected to grow alongside generation investments, with a run rate of $300 to $400 million for local area projects [36][37] Question: How do you expect regulatory lag to evolve through 2026 and beyond? - Management explained that regulatory lag will remain significant until the conclusion of the rate case in 2026, with the first ability to file a formula rate adjustment expected in 2027 [46][48] Question: What is the risk if uncommitted growth projects do not materialize? - Management stated that the pipeline is essential for long-term reliability for existing customers, regardless of uncommitted projects [90][91] Question: When should guidance for 2026 be expected? - Management indicated that guidance for 2026 would typically be provided during the third quarter call, following the procedural schedule of the rate case [98]