PPL(US:PPL)2023-11-02 18:46Financial Data and Key Metrics Changes - The company reported third quarter earnings of $0.31 per share, an increase from $0.24 per share in Q3 2022. Adjusted ongoing earnings were $0.43 per share, up from $0.41 per share year-over-year [8][16] - Ongoing earnings for the first nine months of 2023 reached $1.20 per share, reflecting a 6% increase compared to the same period last year [19] - The ongoing earnings forecast for 2023 has been narrowed to a range of $1.55 to $1.60 per share, with a midpoint of $1.58 per share unchanged [9][21] Business Line Data and Key Metrics Changes - Pennsylvania Regulated segment results increased by $0.02 per share year-over-year, driven by higher transmission revenue and distribution rider recovery, despite higher interest and O&M expenses [17] - Kentucky segment results also increased by $0.02 per share year-over-year, primarily due to lower O&M expenses [18] - Rhode Island segment results decreased by $0.01 per share compared to Q3 2022, mainly due to higher O&M expenses related to staffing [18] Market Data and Key Metrics Changes - The company is on track to invest nearly $2.5 billion to modernize the grid and enhance resiliency [9][10] - The Rhode Island Public Utilities Commission authorized capital investments of up to $153 million for generation investment plans [26] Company Strategy and Development Direction - The company aims to replace up to 1,500 megawatts of aging coal generation with a cleaner energy mix by 2028 [26] - A $12 billion capital investment plan is in place, with targeted O&M savings of at least $175 million by 2026 to support a reliable and cleaner energy future [10][34] - The company continues to focus on smart grid innovations and has received federal funding to support these initiatives [5][121] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2023 earnings forecast despite challenges from mild weather and storms [21][30] - The company maintains a strong credit position, allowing for growth without the need for equity issuances through at least 2026 [4][33] - Management highlighted the importance of regulatory proceedings and the potential for multistate coordination in future projects [12][34] Other Important Information - The company is preparing for a trial regarding a fraudulent conveyance lawsuit, with a trial date set for February of next year [65] - The company is actively pursuing transmission investments within the PJM footprint, indicating additional opportunities for growth [68][69] Q&A Session Summary Question: Can the company continue to grow EPS in 2024 and 2025? - Management confirmed that they expect linear growth through the planning period, despite market forces [35][110] Question: What are the implications of rising costs for the generation replacement plan? - Management acknowledged cost increases but emphasized that the proposed plan remains significantly NPV positive [38][39] Question: How is the company tracking towards the $175 million O&M savings target? - Management reported that they are on track to achieve at least the $50 million to $60 million in efficiencies this year, contributing to the $175 million target [59][60] Question: What is the company's outlook for industrial growth in Kentucky? - Management indicated that the recent decline in industrial load is primarily due to normalization from a large steel manufacturer, but the long-term outlook remains positive with significant economic development expected [83][84] Question: What is the company's stance on offshore wind commitments in Rhode Island? - Management expressed confidence in Rhode Island's commitment to offshore wind as part of its clean energy strategy [80][81]