2025-07-31 16:02Financial Data and Key Metrics Changes - The company reported second quarter GAAP earnings of $0.25 per share, down from $0.26 per share in Q2 2024. Adjusted earnings from ongoing operations were $0.32 per share, a decrease of $0.06 compared to Q2 2024 [4][33] - The decline in earnings was attributed to several factors, including the timing of operating costs, favorable weather in Q2 2024, and higher interest expenses [33][34] - The company remains confident in achieving at least the midpoint of its 2025 ongoing earnings forecast of $1.81 per share, with expectations of stronger growth in the second half of the year [5][34] Business Line Data and Key Metrics Changes - The Kentucky segment results were flat compared to 2024, with lower sales volumes offset by other factors [36] - The Pennsylvania Regulated segment results decreased by $0.02 per share due to higher operating costs and timing of transmission revenue true-ups [36] - The Rhode Island segment results decreased by $0.03 per share, with higher distribution revenues offset by timing of operating costs [36] Market Data and Key Metrics Changes - The company anticipates a significant increase in demand in Pennsylvania, with approximately 14.5 gigawatts of data center projects in advanced stages of development [17][60] - In Kentucky, the economic development pipeline remains robust, with an estimated 8.5 gigawatts of economic development load potential [30][31] Company Strategy and Development Direction - The company is focused on infrastructure improvements, projecting $20 billion in investments from 2025 to 2028, resulting in average annual rate base growth of 9.8% [5][6] - A joint venture with Blackstone Infrastructure aims to build new generation resources to support data centers, with a focus on long-term energy service agreements [19][20] - The company is actively engaging with stakeholders to strengthen resource adequacy and support economic development [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial targets despite current challenges, emphasizing the importance of infrastructure investments and regulatory support [5][39] - The company is optimistic about the potential for new generation resources to be built, contingent on long-term agreements with hyperscalers [23][24] Other Important Information - The company filed a stipulation agreement with the KPSC for new generation in Kentucky, which includes mechanisms to reduce lag on investments and support cost recovery [8][9] - The company is seeking a combined $391 million increase in annual electric and gas revenues in Kentucky to support safety and reliability investments [11][12] Q&A Session Summary Question: Can you elaborate on the $17 billion to $19 billion CapEx needs? - Management indicated that this estimate reflects the potential shift from a net long to a net short position in generation due to data center load, with the joint venture and existing IPPs likely addressing this need [43][44] Question: How will power risk be allocated within the joint venture? - The joint venture aims for a regulated-like risk profile, focusing on long-term contracted generation with creditworthy counterparties [48][49] Question: What are the future equity needs and plans for capital? - The company plans to issue $400 million to $500 million in equity this year, utilizing an ATM program for cost-effective capital [51] Question: What is the outlook on PJM capacity auctions? - Management expressed concerns about the current auction outcomes and the need for new generation, emphasizing the importance of the joint venture and legislative support [56][62] Question: How is the company addressing industrial sales contraction? - The decline in industrial sales is attributed to specific customers rather than a broader trend, with management not concerned about the overall industrial load [81][82]