Aditya Gandhi

Aditya Gandhi with Wolfe Research sought clarification on the base for the 7-8% plus earnings growth commentary, details on the 2-4 gigawatts of negotiations (new vs. existing customers/expansions), and the expected cadence of updates. He also asked for more information on the accelerated load ramp agreement with Google, including previous and current ramp expectations.

Answer

Lisa Barton, President and CEO, confirmed that the 7-8% plus growth uses the midpoint of 2026 guidance as its base. Robert Durian, Executive Vice President and CFO, explained that the 2-4 gigawatts pipeline includes both expansions of existing sites and new data centers from high-quality hyperscalers/co-locators, with more clarity expected within 12 months and quarterly updates. He detailed that the Google agreement, representing about 300 megawatts, accelerates the load ramp, leading to more load in 2027 and 2028 than initially planned, with three of the four projects already under active construction.

Aditya Gandhi sought clarification on the base for the 7%-8%+ growth commentary, details on the 2 GW-4 GW negotiations (expansions vs. new customers), cadence of future updates, and specifics on the Google agreement to accelerate load ramp.

Answer

Lisa Barton (President and CEO) confirmed the 7%-8%+ growth uses the midpoint of 2026 guidance as its base. Robert Durian (EVP and CFO) stated the 2 GW-4 GW pipeline is a mix of expansions and new sites with high-quality counterparties, with quarterly updates expected. He explained the Google agreement accelerates a 300 MW ramp, starting in late 2026 and quickening in 2027-2028. Lisa Barton added three projects are under active construction.

Aditya Gandhi sought clarification on the annual impact of Texas House Bill 4384, asking if annualizing the $0.10 Q4 impact to $0.40 was a reasonable estimate for the rebased 2026 EPS range. He also inquired about the company's balanced equity and debt funding strategy, asking if it implied a 50% split of the $16 billion incremental financing over the five-year plan and for a sense of the equity cadence in 2026 and beyond.

Answer

Senior Vice President and CFO Chris Forsythe explained that the full-year impact of House Bill 4384 is factored into the rebased 2026 EPS guidance, leading to a more consistent year-over-year impact thereafter, supporting the 6-8% growth rate. Regarding financing, Chris Forsythe confirmed the intention to maintain approximately 60% equity capitalization, implying a roughly 50/50 split between debt and equity for annual cash needs, with 50% of annual cash needs typically coming from FFO.

Aditya Gandhi sought clarification on the annual impact of Texas House Bill 4384, asking if annualizing the $0.10 Q4 impact to $0.40 is a reasonable estimate for the rebased 2026 EPS range. He also inquired about the equity and debt funding strategy for the $16 billion incremental long-term financing, specifically if it implies a 50/50 split and the cadence of equity beyond 2026.

Answer

Chris Forsythe, Senior Vice President and Chief Financial Officer, explained that the rebasing for fiscal 2026 includes the full-year impact of House Bill 4384, after which the annual impact becomes more consistent, supporting the 6-8% growth off the rebased $8.25 midpoint. Regarding financing, Mr. Forsythe confirmed the $16 billion incremental financing, stating the company aims to maintain its 60% equity capitalization, which implies a roughly 50/50 split between debt and equity for annual cash needs, with 50% from FFO.

Aditya Gandhi asked for a rough rule of thumb regarding the equity component for the $250 million CapEx increase. He also sought more color on the stage of data center discussions, how potential announcements would interact with special contracts or tariff filings, and how associated capacity needs would be met.

Answer

Chuck Walworth, CFO, stated that the financing plan for the $250 million CapEx increase would be clarified after approval of the larger pre-approval generation project. Sean Trauschke, Chairman, President, and CEO, characterized data center discussions as 'very serious negotiations' with optimism for a 'soon' announcement, which would be followed by a commission filing. He confirmed that the last RFP provisioned for data center capacity, and OGE Energy is confident in meeting obligations based on counterparty ramp rates.

Aditya Gandhi questioned the equity component for the recently announced $250 million CapEx increase, asking for a rough rule of thumb, and how it would be communicated. He also sought more color on the stage of data center discussions, their interplay with special contracts or tariff filings, and how OGE Energy plans to serve the associated capacity needs.

Answer

Charles Walworth, CFO, stated that the financing plan remains consistent, and clarity on the equity component would be provided after approval of the largest CapEx increase. Sean Trauschke, Chairman, President, and CEO, characterized data center discussions as 'very serious negotiations,' expressing optimism for a 'soon' announcement. He confirmed that any agreement would be followed by a filing with the commission for approval and that capacity needs were provisioned for in the last RFP, with confidence in meeting obligations based on counterparty ramp rates.

Aditya Gandhi of Wolfe Research asked about the long-term load growth assumption beyond 2025 and for an update on the Core Scientific data center near Muskogee. He also sought to clarify if potential SPP ITP transmission CapEx is in the new plan and if management felt comfortable guiding within the 5-7% growth range.

Answer

CFO and Treasurer Charles Walworth stated the long-term load growth outlook remains around 2%+, with upside from potential projects. Chairman, President and CEO R. Trauschke added there was nothing new to communicate on the Muskogee opportunity and confirmed SPP ITP CapEx is not yet in the plan. He affirmed comfort with the 5-7% long-term growth rate, emphasizing consistency over pointing to a specific end of the range for any single year.