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PPL(PPL) - 2024 Q2 - Earnings Call Transcript
PPLPPL(PPL)2024-08-02 18:42
Financials
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Financial Data and Key Metrics Changes - PPL Corporation reported second quarter GAAP earnings of 0.26pershare,anincreasefrom0.26 per share, an increase from 0.15 per share in Q2 2023. Adjusted ongoing earnings were 0.38pershare,up0.38 per share, up 0.09 from the previous year [22][3][4] - Year-to-date GAAP earnings reached 0.67persharecomparedto0.67 per share compared to 0.54 per share in the same period last year. Adjusted ongoing earnings for the first half of 2024 totaled 0.92pershare,animprovementof0.92 per share, an improvement of 0.15 per share compared to the first half of 2023 [22][23] Business Line Data and Key Metrics Changes - The Kentucky segment's results increased by 0.05persharecomparedtoQ22023,drivenbyhighersalesvolumesandloweroperatingcosts[24]−ThePennsylvaniaRegulatedsegmentalsosawanincreaseof0.05 per share compared to Q2 2023, driven by higher sales volumes and lower operating costs [24] - The Pennsylvania Regulated segment also saw an increase of 0.05 per share, attributed to higher transmission revenues and increased usage per customer [24] - The Rhode Island segment's results improved by 0.01pershare,mainlyduetohigherdistributionandtransmissionrevenues,offsetbyincreasedoperatingcosts[25]MarketDataandKeyMetricsChanges−PPLhasover17gigawattsofinterconnectionrequestsinPennsylvania,withnearly5gigawattsinadvancedplanningstages,upfrom3gigawattspreviouslydiscussed[13]−Thecompanyestimatesthatforevery1gigawattofdatacenterdemandconnectedtothegrid,residentialcustomerscouldsaveabout100.01 per share, mainly due to higher distribution and transmission revenues, offset by increased operating costs [25] Market Data and Key Metrics Changes - PPL has over 17 gigawatts of interconnection requests in Pennsylvania, with nearly 5 gigawatts in advanced planning stages, up from 3 gigawatts previously discussed [13] - The company estimates that for every 1 gigawatt of data center demand connected to the grid, residential customers could save about 10% on the transmission portion of their bill, translating to approximately 3 monthly savings [14] Company Strategy and Development Direction - PPL's "Utility of the Future" strategy aims for a net zero energy system by 2050 while ensuring reliability and affordability [6][7] - The company plans to invest 14.3 billion in infrastructure improvements from 2024 to 2027, focusing on decarbonization and enhancing grid reliability [5][6] - PPL is actively pursuing partnerships for R&D in low-carbon technologies, including advanced nuclear and carbon capture [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2024 ongoing earnings forecast of 1.63 to 1.75pershare,withafocusonmaintainingastrongbalancesheettosupportinvestmentneeds[3][26]−Thecompanyispositionedtoachieveannualearningspershareanddividendgrowthof61.75 per share, with a focus on maintaining a strong balance sheet to support investment needs [3][26] - The company is positioned to achieve annual earnings per share and dividend growth of 6% to 8% through at least 2027 [5][26] Other Important Information - PPL is on track to complete approximately 3.1 billion in infrastructure improvements in 2024 [4] - The Pennsylvania PUC approved modifications to PPL's long-term infrastructure improvement plan, allowing for 200 million of reliability investments to be classified as capital eligible for recovery [18] Q&A Session Summary Question: Insights on transmission side and capacity auction implications - Management acknowledged the need for generation and transmission investments in PJM, indicating potential opportunities for additional transmission solutions [29][30] Question: Impact of PJM auction results on customer bills - Management estimated that higher prices could increase the generation portion of the bill by about 10 to $15 per month for average customers starting in 2025 [37] Question: Balance sheet capacity and CapEx considerations - Management confirmed a strong balance sheet and indicated that capital needs would be assessed in light of various factors, including interest rates and inflation [39][40] Question: Kentucky IRP and potential new generation needs - Management stated that a comprehensive load forecast would be conducted to determine if new generation is necessary, with results expected in October [43][44] Question: Data center demand and associated CapEx - Management indicated that formal announcements regarding data center demand would likely come at the end of the year or early next year [56][57]