Julien Dumoulin-Smith

Julien Dumoulin-Smith pressed for details on Sunrun's capital allocation strategy, specifically regarding returning cash to shareholders (dividends/buybacks), catalysts for a more 'offensive' stance, the outlook for tax equity markets, and Sunrun's adaptability to persistent market conditions.

Answer

CFO Danny Abajian reiterated the focus on paying down over $100 million in parent debt in 2026 to achieve the sub-2x leverage target, with remaining cash allocated to safe harbor investments before considering other shareholder returns. Regarding tax equity markets, Abajian noted growing corporate profitability and tax appetite, with further clarity on entity-level FEOC rules potentially bringing sidelined participants back. He emphasized Sunrun's ongoing progress in pipeline building and securing tax equity runway.

Julien Dumoulin-Smith from Jefferies pressed for an update on Sunrun's strategy for returning cash to shareholders, including dividends and buybacks, and whether the company's stance is offensive or defensive in the current environment. He also asked about potential catalysts for opening up tax equity markets and Sunrun's flexibility in adapting capital market strategies.

Answer

CFO Danny Abajian reiterated the plan to use $100 million of the $350 million Cash Generation (midpoint) in 2026 to pay down debt, which is expected to bring the company below its 2x leverage target, marking the completion of the deleveraging period. He stated that beyond this, Sunrun would evaluate capital allocation options to maximize shareholder return, including safe harbor investments. Regarding the financing environment, Abajian noted that corporate profitability and tax appetite are growing, and further clarification on entity-level FEOC rules could bring sidelined participants back to the tax equity market.

Julien Dumoulin-Smith inquired about the strategy for debt principal paydowns, asking if investors should expect proactive debt reduction to be a primary use of cash generated in 2025. He also asked for an update on the competitive landscape and the rationale for removing language about cash generation beyond 2025.

Answer

CFO Danny Abajian confirmed a 'strong focus on debt paydown,' stating that after paying down the remaining convertible notes, the company will increasingly target its recourse corporate revolver to lower leverage. Executive Patrick Jobin addressed the competitive landscape, noting that while some 'irrational' competitors have corrected their pricing, new entrants have emerged with even more aggressive terms. He emphasized Sunrun is gaining market share by focusing on differentiated value, not by matching prices.

Julien Dumoulin-Smith asked about the cadence of future updates, specifically if Sempra would consider an analyst day or a full look after the Texas settlement is resolved and more California visibility emerges from the next study phase.

Answer

Jeff Martin, Chairman and Chief Executive Officer of Sempra, acknowledged the opportunity to provide more visibility and transparency, which he believes is beneficial for the investment community. He stated that simplifying the business and reducing investor risk leads to a rerating story. He confirmed that an analyst day is a 'great idea' and something the management team will consider as they move through the year.

Julien Dumoulin-Smith asked about additional factors, beyond the $9 billion upside and SIP sell-down, that could influence Sempra's position within its 2030 EPS range, specifically inquiring about California's strategic role. He also asked about the cadence of future updates, including the possibility of an analyst day, following the Texas settlement and increased California visibility.

Answer

Jeff Martin (Chairman and CEO, Sempra) highlighted regulatory certainty from the Texas settlement through 2030 and California's GRC through 2027, emphasizing execution on the 2028 GRC and SIP transaction. He underscored California's high equity layers, top-decile regulatory environment, and strong cash flow generation as complementary to Texas's growth. He acknowledged an analyst day as a 'great idea' for providing more visibility as execution risks are removed.

Julien Dumoulin-Smith questioned Sempra's confidence in earning target ROEs given Oncor's historic $55 billion-$60 billion capital expenditure level, and when equity might be considered. He also asked about the various puts and takes contributing to Sempra's 'phenomenal year' and 'stacking of positive catalysts,' particularly regarding potential dilution from equity offsets.

Answer

Jeff Martin (Chairman and CEO, Sempra) clarified the $55 billion-$60 billion capital opportunity for Oncor and addressed ROE, noting improvements from the unified tracker mechanism and a new 2024 test year. He stated Sempra is not reticent to issue equity if necessary, but the SI transaction eliminated prior equity needs. He reaffirmed bullish growth prospects, citing improved capital efficiency at Oncor, increased capital programs, and the SI transaction's accretion to credit and EPS.

Julien Dumoulin-Smith asked about Sempra's confidence in earning authorized ROEs on Oncor's projected $55-$60 billion capital expenditures, and whether the magnitude of this spend would necessitate a renewed discussion on equity needs. He also inquired about the impact of recent positive catalysts on Sempra's previously stated 7-9% long-term growth rate.

Answer

Jeff Martin, Chairman and CEO of Sempra, clarified that the $55-$60 billion for Oncor includes a 30% base plan increase and existing upside. He expressed confidence in improved ROEs due to the Unified Tracker Mechanism (UTM) resolving regulatory lag and the new 2024 test year. He stated that while Sempra is not reticent to issue equity if necessary, the SI transaction eliminated prior equity needs, and they will use all available tools to fund growth. Martin reaffirmed the long-term growth rate, citing improved capital efficiency at Oncor, extended growth runway for Sempra Infrastructure (Port Arthur Phase Two FID), and the accretive nature of the KKR transaction.

Julien Dumoulin-Smith requested a breakdown of the drivers behind the 40% to 50% increase in Oncor's capital plan, asking about the contributions from the System Resiliency Plan, the Permian Basin, and general load growth. He also sought to clarify if the upper end of that range reflects the potential for a 765 kV transmission build-out.

Answer

Allen Nye, Chief Executive Officer of Oncor, detailed the growth drivers, including strong premise growth, a 38% increase in new transmission interconnection requests, and a massive 103 GW queue for large load customers, of which 82 GW is data center-related. Jeffery Martin, Chairman and CEO of Sempra, added that the PUCT will decide on a 345 kV or 765 kV build-out in May 2025, which is not yet fully determined in the current range.

Julien Dumoulin-Smith asked for more detail on the Texas System Resiliency Plan (SRP) in light of recent storms and potential expansion plans, as well as expectations for the next legislative session. He also questioned if the ECA project issues had any read-through for the Port Arthur LNG project's timeline or budget, particularly for the Phase 2 continuous construction strategy.

Answer

Chairman and CEO Jeff Martin characterized the growth in Texas as an unprecedented capital opportunity and stated that state public policy favors reliability investments. Oncor CEO Alan Nye outlined the procedural next steps for the SRP settlement, targeting a definitive filing by August 16. Regarding Port Arthur, Mr. Martin confirmed there is no impact from ECA, citing a different labor market and a fully wrapped EPC contract with Bechtel. Sempra Infrastructure CEO Justin Bird highlighted positive momentum for Port Arthur Phase 2, including a fixed-price EPC contract and a significant HOA with Saudi Aramco.

Julien Dumoulin-Smith inquired about the specific 'bigger projects' contributing to the 2026 guidance range, the overall duration of the company's backlog, the opportunity in the defense market, and the timing and scaling plans for manufacturing lines 3 and 4.

Answer

CEO Joe Mastrangelo highlighted NYSERDA projects, collaborations with Talen in PJM, and opportunities with hyperscalers as key drivers for the higher end of guidance. He also discussed the defense market's potential, citing the NDAA and DOE loan due diligence. Regarding future lines, he emphasized disciplined execution and faster implementation through new automation partnerships.

Julien Dumoulin-Smith from Jefferies asked for specifics on the "bigger projects" contributing to the $300M-$400M revenue guidance, the duration of the current backlog, the opportunity in the defense market including project characteristics and timing, and the scaling timeline for manufacturing lines 3 and 4.

Answer

CEO Joe Mastrangelo identified NYSERDA Bulk Storage projects, PJM initiatives with Talen, and opportunities with large hyperscalers as key "bigger projects." Regarding defense, he noted the NDAA's "buy American" mandate and ongoing government approvals. For lines 3 and 4, he emphasized disciplined execution, leveraging the new Thorn Hill building for efficiency, and faster implementation with new automation partners.

Julien Dumoulin-Smith inquired about Array Technologies' market share momentum with key clients, the potential for multi-gigawatt orders, and the commercial strategy for international expansion, including expected disclosures.

Answer

CEO Kevin Hostetler noted an increase in multi-project deals and larger average project sizes. President and COO Neil Manning emphasized a selective and targeted approach to international markets, focusing on regions where Array's differentiation is valued, with progress in Eastern Europe and Latin America.

Julien Dumoulin-Smith asked about Array Technologies' market share momentum with key clients, the potential for multi-gigawatt orders, and how much of this is already reflected in current disclosures. He also sought details on the reinvigorated international commercial strategy and expected formal disclosures or announcements with key partners.

Answer

CEO Kevin Hostetler noted an increase in multi-project deals and larger average project sizes, which are reflected in the growing order book. President and COO Neil Manning emphasized a selective international expansion strategy, prioritizing markets that value Array's differentiation in terrain, weather capability, and installation performance. He mentioned good progress in Eastern Europe and Latin America, with key wins from repeat customers, and expects to see continued flow-through in disclosures in coming quarters as the early-stage pipeline outside Spain and Brazil increases.

Julien Dumoulin-Smith inquired about the realization cadence of the $2 billion backlog through 2025 and how the mix is evolving between new orders and project pushouts.

Answer

CEO Kevin Hostetler confirmed the backlog realization timeline remains consistent with prior commentary, with about 80% expected to convert by the end of 2025. He noted that after an acute period of pushouts mid-year, the cadence has returned to a normalized level. Hostetler expressed confidence in strong 2025 growth, as it's largely supported by the existing backlog rather than relying on significant new "go-get" orders.

Julien Dumoulin-Smith inquired about the timing and strategy for equity financing, engagement with rating agencies regarding FFO to debt metrics through the construction cycle, and the potential for latitude in these metrics. He also asked for details on the Great Basin expansion project's scope, customer interest beyond current commitments, and the total eventual opportunity, including serving data centers. Finally, he questioned the cadence of earnings uplift and plans to close the regulatory lag gap in Arizona and Nevada.

Answer

Karen Haller, President and CEO of Southwest Gas Holdings, deferred to Jay Foer. Jay Foer, Senior Vice President and Chief Financial Officer and Treasurer, Southwest Gas Holdings, discussed maintaining over 300 basis points above the downgrade threshold, utilizing holding company leverage capacity to minimize equity needs, and not upsizing the existing ATM program. Justin Brown, President of Southwest Gas Corporation, elaborated on the Great Basin project's open season process, future demand, potential for supplemental open seasons, and ongoing engagement with prospective shippers. He also detailed efforts to reduce regulatory lag through upcoming rate cases and formula rate adjustments, aiming to cut the historical gap by 100 basis points. Jay Foer added that EPS guidance is front-end loaded, with 15%-17% EPS growth expected through 2028-2029.

Julien Dumoulin-Smith asked about the timing and amount of equity needs for the capital plan, engagement with rating agencies regarding FFO to debt metrics during the construction cycle, the total scope and potential for expansion of the Great Basin project beyond the 800 MCF subscribed capacity, and the cadence of earnings uplift, specifically how the company plans to close the regulatory lag gap in Arizona and Nevada.

Answer

Karen Haller, President and CEO of Southwest Gas Holdings, thanked Julien for the question. Jay Foer, Senior Vice President and Chief Financial Officer and Treasurer, explained that the company has significant headroom above downgrade thresholds and plans to utilize holding company leverage capacity to minimize equity needs, not anticipating upsizing the existing $340 million ATM. Justin Brown, President of Southwest Gas Corporation, elaborated on the Great Basin project, noting that the 800 MCF capacity was based on a specific in-service date, and future demand could lead to supplemental open seasons or further expansions beyond 2028. He also discussed the regulatory strategy, aiming to reduce the historical 160 basis point regulatory lag by about 100 basis points through new rate cases and formula rate adjustments in Arizona and Nevada, using the UNS Gas decision as a proxy. Jay Foer added that the EPS growth is front-end loaded, with a 15%-17% EPS growth rate expected through 2028-2029, supported by rate base growth and tightening regulatory lag.

Julien Dumoulin-Smith inquired about the implications of the recent UNS rate case decision, particularly regarding the formula rate and fair value, and how these might read through to APS. He also sought clarification on reconciling the 20 gigawatts of uncommitted load and 4.5 gigawatts of committed load against the upcoming IRP, and the breakdown of committed versus uncommitted load, including TSMC's portion and the potential for uncommitted load to move into the committed bucket.

Answer

Chairman, President, and CEO Ted Geisler characterized the UNS decision as generally constructive, noting an 86% revenue requirement, a 14% rate increase, and a secure formula rate. He highlighted differences for APS, such as higher growth and a different risk profile. Geisler clarified that the IRP would reflect known and committed demand (including the 4.5 GW and TSMC's schedule) but not the uncommitted queue, which would be incremental. He added that the majority of committed load consists of high load factor data centers, with TSMC being a material portion, and negotiations for the uncommitted queue are ongoing with an aim to file an agreement this year.

Julien Dumoulin-Smith asked about the implications of the recent UNS case, particularly regarding the formula rate decision and fair value, and how these might read through to APS. He also sought clarification on reconciling the 20GW of uncommitted load and 4.5GW of committed load against the upcoming Integrated Resource Plan (IRP), specifically what portions are incremental to the current forecast. Additionally, he inquired about the breakdown of committed versus uncommitted load, including TSMC's contribution, and the progress in moving uncommitted load into the committed bucket before the IRP.

Answer

Chairman, President, and CEO Ted Geisler characterized the UNS case as generally constructive, noting an 86% revenue requirement, a 14% rate increase, and a secure formula rate for perpetuity, while acknowledging differences in growth and risk profile compared to APS. Regarding load, he explained the IRP would cover known/committed demand (4.5GW), organic growth, and TSMC's schedule, but the 20GW uncommitted queue would be incremental. He further clarified that the 4.5GW committed load includes a healthy amount of data centers and related high load factor customers, with TSMC being a material portion, and that potential TSMC expansion is not included. He mentioned active discussions to finalize agreements from the uncommitted queue via a subscription model this year.

Julien Dumoulin-Smith from Jefferies inquired about the long-term visibility for Pinnacle West's gas build, specifically for 2029 and 2030, and the sequencing of the pipeline construction to align with the generation build-out. He also asked for an update on the progress of the 1.2 GW subscription model opportunity and the sustainability of the $0.55 transmission revenue increase.

Answer

Chairman, President, and CEO Ted Geisler confirmed the pipeline is expected in service by 2029, with Desert Sun Phase 1 serving committed customers by 2030, supported by secured equipment and land. CFO Andrew Cooper added that the capital plan includes long-lead investments for Desert Sun, with more visibility expected post-rate case. Mr. Geisler noted active dialogue for the 1.2 GW subscription tranche, aligning with Phase 2 of Desert Sun and the new pipeline. Mr. Cooper clarified that the $0.55 transmission bump reflects the company's commitment to FERC-regulated transmission investments and their conversion into annual earnings.

Julien Dumoulin-Smith from Jefferies inquired about Pinnacle West's long-term gas build strategy, seeking visibility on the 2029-2030 trajectory for the Desert Southwest expansion pipeline and the Desert Sun Power Plant generation. He also asked for an update on the 1.2 gigawatt subscription model's progress and the sustainability of the $0.55 transmission revenue increase projected for 2026.

Answer

Chairman, President, and CEO Ted Geisler confirmed confidence in the pipeline's 2029 in-service date and Desert Sun Phase 1 generation by 2030, noting secured equipment and land. He detailed active dialogues for the 1.2 GW subscription model, aligning with counterparty needs. CFO Andrew Cooper added that capital for long-lead items is in the current plan, with more visibility expected post-rate case, and affirmed the $0.55 transmission revenue bump in 2026 as a natural reflection of planned FERC-regulated investments.

Julien Dumoulin-Smith inquired about the new Transwestern pipeline project, asking about its potential scale beyond the current RFP and how it aligns with Pinnacle West's generation and transmission growth opportunities, particularly concerning the large uncommitted customer queue.

Answer

President, CEO & Chairman Ted Geisler described the pipeline as a critical, foundational milestone for long-term reliability, enabling the company to pursue new generation to serve both committed and uncommitted customer queues. CFO Andrew Cooper added context on the transmission capital plan, noting the current run rate has more than doubled and that larger, strategic projects will become operational in the latter part of the decade, accelerating investment.

Julien Dumoulin-Smith from Jefferies questioned the company's plans for providing a longer-term financial outlook beyond the current 3-year window and asked about procurement timing for accelerated demand from TSMC and other customers.

Answer

CFO Andrew Cooper acknowledged the company is evaluating a longer-term view, especially as large projects extend further out, but noted clarity from the formula rate case is a key step. CEO Ted Geisler added that the current all-source RFP for 2,000+ MW is actively being evaluated, with the potential to procure more than the minimum to meet accelerating demand from TSMC and others.

Julien Dumoulin-Smith from Bank of America inquired about the likelihood of settling the upcoming rate case given the new formula rate proposal and questioned the outlook for capital expenditures beyond the 2027 forecast.

Answer

President Ted Geisler and Chairman and CEO Jeff Guldner explained that while they are open to settlements, they are preparing for a fully litigated case to properly establish the new formula rate mechanism. CFO Andrew Cooper added that CapEx is expected to remain robust beyond 2027 due to long-lead-time projects and that the capital plan will be re-evaluated after the formula rate is implemented.

Julien Dumoulin-Smith asked about the outlook for earned returns and regulatory lag beyond 2025, the dependency of the EPS growth target on the lag docket, and drivers behind 2024 O&M and the 2025 tax rate.

Answer

CFO Andrew Cooper explained that a rate case is needed to true-up lagging costs like O&M and interest expense. He reiterated that resolving the lag docket would smooth the 5-7% EPS growth rather than being a prerequisite. The 2024 O&M increase was a deliberate pull-forward of projects to take advantage of weather benefits. The lower 2025 tax rate is primarily due to lower expected pretax income, not a structural change.

Julien Dumoulin-Smith asked for clarification on the difference between volumes produced and sold, and what that implies for inventory. He also inquired about the sell-through of volumes from Asia, specifically the assumptions for Southeast Asia and India in 2026, and preliminary views for 2027.

Answer

CEO Mark Widmar stated that the delta between produced and sold volume is about 700 megawatts, coming out of inventory. He explained that India is expected to produce and sell around 3 gigawatts domestically in 2026, with strong demand and high teens to low 20% gross margins due to lower manufacturing costs. For Southeast Asia, factories are running at extremely low utilization (around 20%), viewed as an option value for potential future demand driven by policy changes. He noted that some Southeast Asia capacity will be utilized for the new South Carolina finishing facility.

Julien Dumoulin-Smith (Jefferies LLC) asked for clarification on the difference between volumes produced and sold, and elaborated on the sell-through expectations for volumes from Southeast Asia and India for 2026 and preliminarily for 2027.

Answer

CEO Mark Widmar stated that the delta between produced and sold volumes is approximately 700 MW, coming out of inventory. For India, about 3 GW will be produced and sold domestically in 2026, with strong demand. Southeast Asia factories are running at extremely low utilization (around 20%), viewed as an option value for potential future demand driven by policy changes, with some capacity eventually supporting the U.S. South Carolina finishing line. He noted significant underutilization and cost headwinds in Southeast Asia.

Julien Dumoulin-Smith of Jefferies asked about the company's priorities for use of cash, given its improved liquidity, and the timeline for decisions on capital allocation between finishing lines, perovskite R&D, and shareholder returns.

Answer

CFO Alex Bradley outlined the capital allocation priorities as: running the core business, funding expansion (like finishing lines), investing in R&D (including perovskite and potential M&A), and finally, considering shareholder returns. He stated that major long-term capital decisions are pending further clarity on the tariff regime and the recent executive order, with updates likely toward the end of the year.

Julien Dumoulin-Smith asked if there is any repricing risk on the backlog beyond the 12 gigawatts of international volume identified. He also questioned whether using U.S. finishing lines would satisfy existing contract terms for that 12 GW block or if it would require renegotiation with customers.

Answer

CEO Mark Widmar confirmed there is no repricing risk on the remaining ~54 gigawatts of backlog, as it is almost entirely domestic U.S. product. He explained that the outcome for the 12 GW of international volume is entirely dependent on customer negotiations. He stressed that he is prepared to idle facilities if tariffs are too high to maintain negotiating leverage, and any decision on strategies like U.S. finishing lines would be made in partnership with customers and contingent on the final policy environment.

Julien Dumoulin-Smith of Jefferies questioned if the manufacturing issue causing the $50 million Series 7 warranty charge has been fully remediated and sought clarity on whether the plan to ship panels from India to the U.S. represents a net increase in foreign panel blending.

Answer

Executive Mark Widmar provided a detailed explanation of the Series 7 warranty issue, confirming it was not a fundamental device defect but two specific manufacturing start-up problems that have since been fully remediated in current production. These were a glass cleaning issue and an error in calculating the engineering performance margin. Regarding the India strategy, he noted that blending domestic and international Series 7 panels is straightforward, allowing the company to optimize its global fleet while helping customers qualify for the domestic content bonus.

Julien Dumoulin-Smith asked about the flexibility within the 14% capital allocation commitment through 2030, particularly how buybacks might shift to accommodate data center investments, and the expected returns for these projects. He also inquired about the expansion and economic contribution of the Virtual Power Plant (VPP) rollout.

Answer

CFO Bruce Chung stated that the $1 billion annual buyback for the next few years is firm, with flexibility for redeploying cash flows for lucrative projects in later years after deleveraging. He reiterated the 12%-15% pretax unlevered IRR hurdle rate for all projects. President of NRG Consumer Brad Bentley reported continued VPP scaling in Texas and plans for a Q2 launch in the East, pacing well against 2027 targets.

Julien Dumoulin-Smith questioned the latitude within NRG's 14% capital allocation growth commitment, particularly regarding potential shifts from buybacks to data center investments and the timing of associated cash flows. He also asked about the expected returns on data center projects and the expansion timeline and economic contributions of the Virtual Power Plant (VPP) rollout.

Answer

CFO Bruce Chung stated that the variability in buybacks is more on the back end of the plan, with a $1 billion buyback program likely set for the next couple of years, and ample opportunity to fund projects while maintaining buybacks. He reiterated NRG's hurdle rate of 12-15% pretax unlevered for all projects. Brad Bentley, President of NRG Consumer, expressed satisfaction with Texas VPP results, noting plans to launch a VPP-like program in the East in early Q2 and strong progress towards the 300 MW target for 2027.

Julien Dumoulin-Smith from Jefferies asked about the timelines for the GE Vernova-KeyWatt partnership, the potential scale of "build-your-own-power" (BYOP) contract generation, and opportunities within NRG's PJM portfolio to add gas and storage, particularly in light of recent Illinois legislation.

Answer

Larry Coben, Chair, President, and CEO, expressed confidence in meeting GE Vernova-KeyWatt partnership timelines without disclosing specifics. He emphasized the significant 5.4 GW scale of the partnership for BYOP, with potential for further expansion. Mr. Coben confirmed active work on PJM opportunities, which will accelerate post-LS Power acquisition, but noted that Illinois legislation is not expected to be the primary driver for asset development there.

Julien Dumoulin-Smith inquired about specific timelines for equipment deployment under the GEV-Kiewit partnership, the potential scale of 'build-your-own-power' (BYOP) contracted generation, and opportunities in the PJM portfolio (especially Illinois) for adding gas and storage assets.

Answer

Larry Coben, Chair, President, and CEO of NRG Energy, stated that while specific timelines for GEV-Kiewit are not disclosed, NRG is confident in meeting all requirements. He emphasized the significant scale of the 5.4 GW GEV-Kiewit deal for BYOP and confirmed active efforts to accelerate PJM opportunities, particularly after the LS Power acquisition closes, but noted Illinois legislation is not the primary driver.

Julien Dumoulin-Smith from Jefferies inquired about the new 295 MW data center agreement, asking for details on its commercial structure, margin profile, and how it compares to standard C&I contracts. He also asked about the potential to expand this partnership and the status of the broader 4 GW pipeline of letters of intent.

Answer

Chairman, CEO and President Larry Coben explained that the data center agreement is structured like a long-term C&I contract but with premium, protected margins. He noted that while this is just the beginning of their data center strategy, specific client and site details remain confidential. Regarding the 4 GW pipeline, he expressed excitement but cautioned that not all letters of intent will convert to final deals due to their complexity.

Julien Dumoulin-Smith of BofA Securities asked for clarification on the EBITDA assumptions for the LS Power acquisition, including the contribution from C-Power, potential synergies, and whether any growth from retail or C-Power is included in the new financial targets.

Answer

Lawrence Coben, Chair, President and CEO, explained that the company used conservative, consistent pricing assumptions for an 'apples-to-apples' comparison and confirmed that zero synergies or incremental growth from C-Power or retail were included in the accretive projections. He emphasized that the deal provides enormous optionality and any synergies would be an additional benefit.

Julien Dumoulin-Smith inquired about the expected timeline for converting the recently announced data center Letters of Intent (LOIs) into firm contracts, questioning the need for patience given the 2026 in-service targets. He also asked for more detail on the 5.4 GW development pipeline with GE Vernova and the potential to expand participation in the Texas Energy Fund (TEF).

Answer

Lawrence Coben, NRG's Chair, President and CEO, clarified that while development timelines are complex and won't receive step-by-step quarterly updates, the 2026-2029 in-service dates imply news will not be years away. He also noted NRG may now issue announcements between quarters. Regarding TEF, Coben confirmed two of three shovel-ready projects are already participating. For the GE Vernova pipeline, he highlighted the two secured turbine slots as the most concrete line of sight for near-term development.

Julien Dumoulin-Smith of Jefferies sought more specific details on the development site monetization plan, asking whether the primary focus is on the Midwest portfolio or the two shovel-ready Texas projects. He also questioned the potential to combine value from the Texas Energy Fund (TEF) with hyperscaler deals for these sites.

Answer

Chair and CEO Lawrence Coben clarified that the company is focused on both its 21 development sites and the two Texas shovel-ready projects, noting the latter became available for new opportunities after the TEF's 'one loan per developer' rule. He highlighted the high interest in these projects due to their rare 'shovel-ready additionality.' Coben added that while they would consider a potential TEF 2, they are proceeding as if it won't occur and do not believe 'double-dipping' would be necessary to make the projects attractive.

Julien Dumoulin-Smith asked about the book-and-turn business expectations for 2026, the impact of new customers and product diversification on seasonality, and the expected order rate trajectory for the BESS segment.

Answer

CEO Brandon Moss indicated a reasonable book-and-turn business of $50 million-$70 million, noting prudence in guidance due to market uncertainty and different project delivery schedules from new customers. He also mentioned that BESS bookings could be lumpy, but revenue recognition is expected to be more stable once production lines are operational.

Julien Dumoulin-Smith asked about Shoals' book-and-turn business expectations for 2026 revenue, considering new customer dynamics and market uncertainty. He also inquired about seasonality and the expected order rate trajectory for the BESS segment, noting its impressive Q4 over Q3 growth.

Answer

CEO Brandon Moss explained that a $50 million to $70 million book-and-turn business is reasonable, but guidance is prudent due to lingering uncertainty and different project delivery schedules from new customers and diversified products. He noted BESS bookings could be lumpy, but revenue recognition would be more stable once production starts. For the follow-up, he clarified that the pause in revenue translation is primarily due to the nature of new customers and their project patterns, suggesting the upper end of the revenue range is achievable if projects proceed as scheduled.

Julien Dumoulin-Smith of Jefferies inquired about customer order activity and willingness to sign new contracts amid the current policy and tax environment, with a specific focus on the Battery Energy Storage Systems (BESS) market.

Answer

CEO Brandon Moss confirmed a strong market backdrop driven by high energy demand, highlighting a record backlog and awarded orders (BLAO) of $671.3 million. He noted that the BESS opportunity is significant, with strong interest for their combiner and recombiner products in data center and AI applications, leading to a surge in quoting activity.

Speaking for Julien Smith of Jefferies, an analyst asked how to reconcile the 2025 midpoint revenue guidance of 8% growth with the 12-18% long-term CAGR outlook from the Investor Day. They also asked about other international markets being explored and their margin profiles.

Answer

CFO Dominic Bardos stated that the long-term CAGR involves a ramp-up period and that 2025 growth is on track with that plan, especially given that 2024 revenue exceeded prior expectations. CEO Brandon Moss reiterated focus markets like Australia, Latin America, and Southern Europe, noting that international margins will vary by location and product mix.

Julien Dumoulin-Smith asked about the potential materiality and timing of earnings contributions from the Blackstone JV by the end of the decade, the progress of contracting efforts, and details on the Pennsylvania and Kentucky load forecasts, including near-term versus longer-dated trends and the 2.8 GW projection in Kentucky.

Answer

Vince Sorgi, PPL President and CEO, indicated that PPL is 'many innings in' on the JV, with significant work on land, natural gas, and engagement with hyperscalers and data center developers. He expects some JV earnings by the back end of the current plan (2029) and more materially in the early 2030s. For Pennsylvania, Sorgi noted that projects are still there but are being pushed out slightly due to longer build times. In Kentucky, the 2.8 GW load forecast for 2032 is not fully in the plan, which currently supports 1.8 GW, and a CPCN filing for additional generation could occur as early as 2026.

Julien Dumoulin-Smith (Jefferies Financial Group Inc.) asked about the potential materiality of the Blackstone JV by the end of the decade, the progress of contracting efforts, and the number of "innings" into this process. He also sought clarification on the Pennsylvania load forecast, noting a slight near-term decrease but a material long-term ramp-up, and the Kentucky load forecast, specifically how the 2.8 GW potential load by 2032 aligns with the 1.8 GW reflected in the current plan.

Answer

PPL President and CEO, Vince Sorgi, indicated that the JV is "many innings in," having worked on it for about a year, securing land and natural gas supply, and engaging with hyperscalers and data center developers. He expects some JV earnings contribution by late 2029, becoming more material into the next decade, especially when combined cycles come online in the early 2030s, while maintaining the company's risk profile. For Pennsylvania, Sorgi explained the near-term load shift is due to data center developers taking longer to build, not project cancellations. In Kentucky, the 2.8 GW potential load is a probability-weighted figure with more projects in the queue than previously, and the current plan only includes generation for 1.8 GW, suggesting a potential CPCN filing as early as 2026 for additional generation, possibly smaller, quicker-to-market solutions.

Julien Dumoulin-Smith asked about American Water's post-merger portfolio strategy, specifically regarding the potential sale of the People's Gas business and the allocation of any resulting proceeds. He also inquired about the company's 2025 realized FFO to debt and future projections, as well as the likelihood of settlements in pending rate cases in Pennsylvania, New Jersey, and Illinois.

Answer

John Griffith, President and CEO, clarified that strategic decisions on People's Gas would occur post-merger, with proceeds earmarked for reinvestment, debt repayment, and rate-based investments. David Bowler, Vice President and Treasurer, noted that FFO to debt figures are not typically disclosed but can be derived from financial statements. He also indicated the company's openness to constructive settlements in ongoing rate cases, provided they ensure a fair return.

Julien Dumoulin-Smith asked about American Water's portfolio positioning post-merger, specifically the plans for the Peoples Gas business and the intended use of any sale proceeds, including for debt paydown. He also inquired about the 2025 realized FFO to debt and its forecast pro forma for the Essential Utilities transaction, and the expectation for settlements in the pending Pennsylvania, New Jersey, and Illinois rate cases.

Answer

John Griffith, President and CEO, stated that decisions regarding Peoples Gas would be made after the merger closes, with proceeds allocated to reinvestment, debt repayment, and continued rate-based investment. David Bowler, Vice President and Treasurer, noted that the company does not typically disclose FFO to debt but it can be calculated from financial statements. Mr. Bowler also confirmed the company is open to constructive settlements in rate cases that provide a fair return.

Julien Dumoulin-Smith inquired about the outlook for high teens earnings growth through the back half of the decade, the specific data center contracts embedded in the 2026 guidance, and Quanta's strategic positioning for the data center opportunity, including the need for further external acquisitions.

Answer

Duke Austin, President and CEO, stated that data centers represent roughly 10% of the business and are the fastest-growing piece of backlog, with expectations for significant bookings over a multi-decade growth period. He expressed confidence in the management team's ability to continue past performance given better markets and larger total addressable markets (TAMs).

Julien Dumoulin-Smith asked about the company's outlook for high-teens earnings growth through the back half of the decade, the embedded data center contracts in 2026 guidance, and Quanta's positioning to capture data center opportunities through internal capabilities versus further external acquisitions.

Answer

Duke Austin, President and CEO, stated that data centers currently represent approximately 10% of the business and are the fastest-growing segment of backlog, with multi-decade growth potential. He expressed confidence in the management team's ability to continue delivering strong results given improved market conditions and larger total addressable markets. He did not elaborate on the internal vs. external acquisition strategy for data centers.

Julian Dumoulin-Smith inquired about Quanta's expansion into the data center market, specifically beyond generation for large loads, to include 'inside the house' services like MEP and total data center construction, and the expected growth rate.

Answer

President and CEO Duke Austin stated that Quanta is positioned to build essentially the entire data center, from the shell to generation and all the way to the rack. He highlighted opportunities in the convergence of generation, labor certainty, and utility interface.

Julien Dumoulin-Smith asked about Quanta Services' expansion into the data center market, specifically focusing on getting 'inside the house' and directly expanding its scope and rate of growth in this area.

Answer

President and CEO Duke Austin stated that Quanta is positioned to build essentially the entire data center, from the shell, MEP, and grading, all the way to the rack, including the generation behind it. He emphasized the company's ability to work with general contractors and capitalize on the convergence of generation, labor certainty, and technology.

Julien Dumoulin-Smith asked about the company's confidence in executing the SunZia project given the new administration and how the strong renewables backlog translates to revenue growth, addressing potential concerns about a slowdown that might be masked by the resegmentation.

Answer

President & CEO Earl Austin expressed high confidence in the SunZia project, stating it is past permitting hurdles and that its future revenue contribution has already been replaced by new work in the backlog. He asserted that the company is not concerned about a renewables slowdown, seeing growth in 2025 and beyond, driven by the urgent need for all forms of generation. CFO Jayshree Desai confirmed the resegmentation would be effective in the first quarter.

Julien Dumoulin-Smith of Jefferies asked about the impact of the skilled labor shortage on the industry and Quanta's business. He also questioned how this dynamic affects top-line inflation and the potential for margin expansion.

Answer

President and CEO Earl "Duke" Austin highlighted Quanta's long-term investments in craft-skilled labor training, which he sees as a key differentiator. He stated that labor inflation of 4-6% is typically passed through to customers contractually. He noted the inside electrical labor market for data centers is particularly constrained, and Quanta is leveraging the Cupertino acquisition to expand training and recruitment for that workforce.

Julien Dumoulin-Smith asked for further elaboration on the seasonality commentary, specifically regarding C&I trends, secular trends, and other factors impacting observed trends for 2026.

Answer

CEO Shuki Nir explained that combining storage, residential, C&I, U.S., and Europe makes precise seasonality numbers difficult. He clarified that historical trends refer to how the industry has trended over several years, encompassing both C&I and residential, and that the expectation for Q2 to be higher than Q1 is a combination of both. Julien Dumoulin-Smith also inquired about the 45X credit, asking how much credit the company expects and when deferred revenues related to it might unwind. CFO Asaf Alperovitz stated that 45X is not broken out in the press release as it's an integral part of the U.S. manufacturing cost structure and the most attractive incentive globally. He reiterated that SolarEdge's strategy is to manufacture where the net cost is lowest, which is currently the U.S. due to 45X.

Julien Dumoulin-Smith asked for clarity on a sustainable run-rate for operating expenses following recent cuts and requested a breakdown of the ~$600 million inventory balance.

Answer

CFO Ariel Porat indicated that Q1 is not representative and pointed to the year-end non-GAAP OpEx target of $85M-$90M as a better indicator. Regarding inventory, he explained that the company will continue manufacturing for the U.S. while consuming existing stock for Europe, aiming for normalized balance sheet levels by year-end.

Julien Dumoulin-Smith of Jefferies asked about the decision-making process for potentially exiting unprofitable geographies or product lines to achieve further cost reductions beyond the stated $100 million quarterly OpEx target.

Answer

Interim CEO Ronen Faier detailed a thorough evaluation process based on a market's current and future profitability, as well as the resource drain (e.g., R&D) it requires. The company is analyzing markets, product lines, and even SKU complexity to rationalize costs. The goal is to focus on fewer, but larger and more profitable, markets and to discontinue products that are not profitable or are too complex to manage.

Julien Dumoulin-Smith asked about the pro forma economics of the upsized Desert Southwest (DSW) project and the expected tariffs for the Dakota Access Pipeline (DAPL) related to the MLO2 project, comparing them to past tariff structures. He also followed up on the potential for further DSW expansion within the next 12 months.

Answer

Co-CEO Mackie McCrea described the DSW project as likely one of the better rate of return projects built, given its size and market demand. EVP of Crude Oil Adam Mackay stated that recent DAPL open season rates were strong market rates, and MLO2 tariffs are expected to be in line. Co-CEO Mackie McCrea affirmed that they would actively pursue opportunities to loop, add compression, and backhaul on DSW, similar to Florida Gas Transmission, as demand in New Mexico and Phoenix grows.

Julien Dumoulin-Smith asked about the pro forma economics of the Desert Southwest Pipeline Project following its upsizing to 48 inches. He also inquired about DAPL tariffs, how they compare to the last decade, and the preliminary economics for the 250,000 barrels per day (or more) Canadian crude project. Additionally, he asked if a further expansion of the Desert Southwest project could be discussed within the next 12 months, similar to Florida Gas Transmission.

Answer

Co-CEO Mackie McCrea stated that the Desert Southwest project is expected to be one of the best rate of return projects Energy Transfer has ever built, given its size, distance, throughput, and the significant demand growth in Phoenix and New Mexico. EVP of Crude Oil Adam Mackay reported a successful DAPL open season, with rates for the MLO2 project expected to be in line with market rates and those from Bakken producers. McCrea confirmed the potential for future looping, compression, and backhaul opportunities on Desert Southwest as demand in the region grows.

Julien Dumoulin-Smith inquired about the expected earned ROEs for the acquired Washington assets, the timeline to achieve normalized ROEs, and how rating agencies view the credit metrics and wildfire diversification benefits from the transaction. He also asked about break fees and the transaction's fit with the ongoing Holdco/Transco process.

Answer

Joseph Trpik (SVP of Finance and CFO, Portland General Electric) stated the allowed ROE is 9.5% and expects performance to improve over time with integration. He confirmed preliminary discussions with rating agencies aiming for investment-grade credit ratings. Joseph Trpik also confirmed break fees of $35 million for specific non-closure reasons, including regulatory disapproval or rate base not matching the contract.

Julien Dumoulin-Smith asked about the expected earned ROEs for the acquired Washington utility, the timeline to achieve normalized ROE, and how rating agencies view the diversification benefits, particularly concerning wildfire risk. He also inquired about break fees for the transaction and its fit with the ongoing Holdco/Transco process. In a follow-up, he pressed for details on the $600 million Holdco equity financing, rating agency FFO to debt targets, and the possibility of a fully debt-financed Holdco.

Answer

Joseph Trpik (SVP of Finance and CFO) stated that the allowed ROE for the Washington utility is 9.5% and they expect to work towards a similar performance level over time. He confirmed preliminary discussions with rating agencies about maintaining investment-grade credit ratings. Joseph Trpik also confirmed break fees of $35 million for specific reasons like lack of regulatory approval or rate base not matching the contract. Maria Pope (President and CEO) and Joseph Trpik clarified that the Holdco structure is not a prerequisite but is seen as a clean vehicle for the transaction. Joseph Trpik later added that the $600 million Holdco financing would be a balanced mix of debt, equity, and potentially hybrid securities, emphasizing flexibility and alignment with regulators.

Julien Dumoulin-Smith inquired about the progress of wildfire legislation, the company's commitment to its CapEx plan and 5-7% CAGR amid regulatory pressures, and the timing and status of ongoing RFP negotiations.

Answer

President and CEO Maria Pope detailed the legislative progress, noting that while a safety certificate process has gained traction, a catastrophic fund requires more work and may take another session. She affirmed that the company continually reassesses its plans based on its ability to recover costs and deliver competitive returns. Regarding the RFPs, she expressed satisfaction with the negotiation progress, targeting project in-service dates for 2027.

Julien Dumoulin-Smith inquired about Portland General Electric's wildfire mitigation efforts, including how dialogue in California is influencing Oregon's legislative strategy for a potential backstop fund. He also asked about the company's plans to manage its cost structure and address any resulting rate lag.

Answer

President and CEO Maria Pope outlined a three-part legislative strategy focused on a standard of care, a backstop fund with liability limitations, and federal reforms. Senior Vice President of Finance and CFO Joseph Trpik added that the company is focused on long-term cost compression to reduce structural lag and is realigning its cost structure to the latest rate case outcome.

Julien Dumoulin-Smith asked about PG&E's strategy for the $5 billion in upside capital beyond the $73 billion plan, including its potential deployment and financing methods like debt capacity or Junior Subordinated Notes (JSNs). He also sought specific milestones for the CEA process after April 1st.

Answer

CFO Carolyn Burke outlined three options for the $5 billion: making the plan bigger (least likely), making it better (e.g., accelerating capital for new load to improve bill trajectory – most likely), or extending the growth runway. She reiterated the priority of avoiding equity and maintaining mid-teens FFO to debt. CEO Patti Poppe stated there are no specific public milestones after April 1st, expecting ongoing political conversations.

Julien Dumoulin-Smith asked how the SB 254 Phase 2 conversation fits into broader state insurance reform, including inverse condemnation and strict liability, and about the recent reduction in the data center pipeline.

Answer

Patti Poppe, CEO, emphasized the Governor's 'whole-of-government' approach to insurance and utilities, highlighting the importance of utility financial health for California's future, but stated it's too early to predict specific outcomes. On data centers, she clarified that while the overall pipeline is fluid, projects in final engineering are growing, and new large load is beneficial for customers and investors. Carolyn Burke, EVP and CFO, added that additional capital from data centers could make the plan better (affordability) or longer (growth runway), with a bigger plan being less likely.

Julien Dumoulin-Smith inquired about how SB 254 Phase 2 fits into broader insurance reform and the implications of the data center pipeline reduction on capital allocation.

Answer

CEO Patti Poppe stated it's too soon to predict the outcome of the 'whole-of-government' approach to insurance and utilities, emphasizing the importance of PG&E's financial health to California's future. She also clarified that while the overall data center pipeline saw modest attrition, projects in final engineering grew, offering significant benefits for customer affordability and potential capital growth, with EVP and CFO Carolyn Burke adding that additional capital would likely make the plan better or longer, rather than just bigger.

Julien Dumoulin-Smith of Jefferies asked about the potential for ratable or delayed contributions to the wildfire fund and whether inverse condemnation reform is part of the current legislative discussion.

Answer

CEO Patti Poppe explained that long-term, spread-out payments align better with the fund's liquidity needs. Regarding liability, she advocated for a holistic, long-term solution for California's wildfire risk that goes beyond utilities to include insurance markets, building codes, and forest management, similar to the state's comprehensive approach to earthquake risk, adding that claims limitations should be considered.

Julien Dumoulin-Smith of Jefferies asked about the potential for ratable or delayed contributions to the wildfire fund and whether inverse condemnation reform is part of the current legislative discussion.

Answer

CEO Patti Poppe explained that long-term payments match the fund's liquidity needs and serve to smooth rates for customers. Regarding liability, she advocated for a broader, holistic societal approach to wildfire risk, similar to how California handles earthquake risk, which would include insurance markets, building codes, and potential claims limitations.

Julien Dumoulin-Smith asked for more detail on idled and abandoned power line activity and sought a more direct link between data center growth and the company's 2-4% customer bill increase target.

Answer

CEO Patti Poppe detailed a robust program for removing or securing de-energized lines and noted continuous learning from every incident. She then directly linked data centers to affordability, stating that for every gigawatt of new demand, PG&E can spend up to $1.6 billion and still reduce every customer's rates by about 1%, a benefit not yet factored into the 2-4% bill target.

Julien Dumoulin-Smith of Jefferies asked about the prospects for a new wildfire fund or re-contributions to the existing one, and what other avenues might exist. He also inquired about PG&E's wildfire undergrounding efforts and strategies for derisking more urbanized areas.

Answer

CEO Patti Poppe stated the company will advocate strongly against shareholder contributions to the fund, as it's contrary to the principles of inverse condemnation and attracting capital. She mentioned options range from extending customer payments to more complex solutions. Poppe reiterated that PG&E's focus is on reducing ignition risk through its industry-leading mitigation plan, which is a prudency, not perfection, standard, and involves deploying advanced technologies like down conductor devices.

Julien Dumoulin-Smith asked for PG&E's reaction to a recent proposed decision for SDG&E that approved minimal undergrounding miles and requested an update on the 3.5-gigawatt data center pipeline discussed in the previous quarter.

Answer

CEO Patti Poppe distinguished PG&E's situation by noting their upcoming filing is a dedicated 10-year plan under new legislation, not part of a GRC, and reiterated the long-term cost-effectiveness of undergrounding. Regarding data centers, she clarified the 3.5 GW was from an initial cluster study with multiple customers and that demand continues to grow, placing PG&E in a 'Goldilocks' position to serve this new load.

Julien Dumoulin-Smith of Jefferies inquired about AEP's contracted generation business, specifically the Bloom Energy deal, and how it fits with the core rate base strategy. He asked about the potential for contracted generation to support the 56 GW load growth, whether through scaling Bloom or traditional gas, and sought comments on AEP's approach to PJM's reevaluation of its construct to serve customers.

Answer

Bill Fehrman, Chairman, President, and CEO, explained that contracted generation, like the Bloom Energy deal, serves as a customer service to bring data centers online faster, especially when grid connections are delayed. He views it as complementary to the core business. Trevor Mihalik, EVP and CFO, highlighted the long-term agreement with a creditworthy counterparty as providing stable, regulated-like returns without frequent rate cases. Bill Fehrman also affirmed deep engagement with PJM and other RTOs to accelerate generation-to-load connections.

Julien Dumoulin-Smith inquired about AEP's strategy for its contracted generation business, specifically the Bloom Energy deal, and its potential to backstop the 56 GW load growth, considering it's a step away from core rate base opportunities. He also asked about AEP's approach to tackling generation needs in PJM.

Answer

Bill Fehrman (Chairman, President, and CEO) explained that contracted generation, like the Bloom Energy deal, is a customer service to bring data centers online faster, especially where grid connections might be delayed. He views it as complementary to the core business due to its proven, quickly deployable technology. Trevor Mihalik (EVP and CFO) added that the Bloom deal offers long-term contracted cash flows with a creditworthy counterparty, similar to a regulated return without frequent rate cases. Regarding PJM, Bill Fehrman stated AEP is deeply engaged with stakeholders and the administration to accelerate generation connection to load, emphasizing AEP's preparedness with equipment and contractors once RTO processes are cleared.

Julien Dumoulin-Smith inquired about the potential for positive revisions to the current five-year outlook, asking if AEP could accommodate more load growth within this period by converting additional customer interest into LOA/ESA term sheets.

Answer

Trevor Mihalik, EVP and CFO, highlighted the 190 GW of customer interest backing the 28 GW of contracted load, noting that this substantial pipeline provides a conservative foundation for the current forecast. He implied that even a fraction of this additional interest converting could lead to a compelling growth story and potential for future revisions.

Julien Dumoulin-Smith questioned the long-term growth cadence beyond the current five-year plan (2031, 2032), asking about potential commitments for further ramp-up and the ability to process load in the longer term. He also inquired if positive revisions to the current five-year outlook are conceivable, given the 190 GW of customer interest, or if the system has a rigid capacity limit for additional accommodation.

Answer

Trevor Mihalik, EVP and CFO, reiterated confidence in the 9% CAGR for the five-year plan, with growth at or above the high end for 2028-2030, and stated that the plan will be revised annually. He acknowledged additional opportunities for load growth as LOAs are converted to ESAs, but emphasized a commitment to delivering on current commitments before projecting beyond the five-year horizon. Mihalik highlighted that the 28 GW of contracted load is backed by 190 GW of customer interest in various stages of discussion, suggesting that even a fraction of this larger interest could lead to a compelling growth story.

Julien Dumoulin-Smith from Jefferies requested a more detailed breakdown of the 24 GW of newly contracted load and asked how this significant growth could impact AEP's earned ROE potential going forward.

Answer

President & CEO William J. Fehrman detailed the 24 GW breakdown by RTO, noting 13 GW in ERCOT (heavy on crypto), 9 GW in PJM (mostly data centers), and 2.5 GW in SPP. EVP & CFO Trevor Mihalik added that legislative wins in Texas and Oklahoma are expected to close the gap between authorized and earned ROEs, which will help improve the consolidated ROE from its current levels.

Julien Dumoulin-Smith asked for details on the $10 billion of potential capital expenditure upside, including what is already approved and what triggers are needed to formally integrate it into the plan. He also inquired about the composition of the $5 billion generation bucket within that upside.

Answer

Trevor Mihalik, EVP and CFO, explained that AEP will provide a formal update on its growth plan annually around the third quarter. He noted the recently awarded 765 kV lines in Texas, worth $1-2 billion, are not yet in the base plan. He broke down the $10 billion upside as roughly half transmission and half generation. William Fehrman, President and CEO, added that the generation bucket is tied to RFPs, potential wind and renewable projects, and some combined cycle plants to meet capacity needs. He also confirmed that two previously announced natural gas plant acquisitions are included in the current base plan.

Julien Dumoulin-Smith asked about the Generation & Marketing segment's earnings outlook beyond 2025, what portion of 765 kV transmission opportunities are in the new CapEx plan, and why the utility ROE is moderating to 9.1% despite load growth.

Answer

EVP and CFO Chuck Zebula stated the G&M business is expected to support the 2025 earnings level going forward. President and CEO William Fehrman highlighted significant 765 kV opportunities as upside to the plan and explained the 9.1% ROE reflects the need to improve regulatory relationships and customer service to earn higher returns.

Julien Dumoulin-Smith asked about the sustainability of G&M earnings post-2025, the inclusion of 765kV transmission projects in the CapEx plan, and the rationale for a moderating utility ROE despite high load growth.

Answer

CFO Charles Zebula indicated the 2025 G&M earnings level is sustainable. CEO William Fehrman highlighted significant 765kV opportunities as upside and explained that ROEs must be earned through improved customer service and regulatory relationships, referencing past issues in West Virginia.

Julien Dumoulin-Smith with Jefferies inquired about the expanded 500 MW Microsoft data center demand, its associated $1 billion incremental capital expenditure, and the potential for further growth beyond the current five-year plan. He also asked for an update on Point Beach PPA negotiations.

Answer

Scott Lauber, CEO of WEC Energy Group, explained that the 500 MW addition relates to Microsoft's Project North expansion, with potential for more growth beyond 2031 as Microsoft continues land acquisition. Regarding Point Beach, Mr. Lauber stated that contracts end in 2030 and 2033, and negotiations with NextEra are ongoing, with potential upside to the capital plan to be factored into the fall update.

Julien Dumoulin-Smith asked for more details on the 500 MW Microsoft expansion, its potential beyond the current forecast, and how the additional $1 billion in CapEx might stretch beyond the five-year plan. He also inquired about the multi-stage development of Microsoft's parcels and the progress of Point Beach PPA negotiations, specifically regarding the 500 MW replacement power decision for 2030.

Answer

CEO Scott Lauber explained that the 500 MW addition is for Microsoft's 'Project North' expansion, noting Microsoft's 'multi-year delivery' plan suggests further opportunities beyond 2031, with more land yet to be developed. Regarding Point Beach, Mr. Lauber stated that contracts end in 2030 and 2033, providing time for negotiations with NextEra, and the replacement power decision will be factored into the fall update, potentially representing an upside to the plan.

Julien Dumoulin-Smith asked for details on the Peoples Gas (PGL) spending plan in Illinois, specifically the staff-recommended 'Option 3,' and its potential upside compared to the company's current forecast.

Answer

Executive Scott Lauber confirmed that their 5-year plan for Peoples Gas is conservative, including only about $90 million a year for emergency and relocation work. He noted that if 'Option 3' is approved, it could represent an annual upside of $100 million to $200 million, though it would take time to ramp spending back up.

Julien Dumoulin-Smith from Jefferies asked about the potential for the Infrastructure segment to capitalize on data center growth and sought clarification on the implications of the Wisconsin PSC's denial of AFUDC for pre-construction costs.

Answer

President and CEO Scott Lauber stated that the company sees significant opportunities in generation, distribution, and transmission to support regional growth, including data centers, with related projects being factored into the new 5-year plan. Regarding the AFUDC denial, Lauber indicated no major strategic read-through, explaining the company will likely seek reconsideration by providing the commission with additional information on the customer value of early project planning.

Julien Dumoulin-Smith asked about the data center opportunity in Michigan, its timeline, and how it integrates with CMS Energy's 10.5% rate-based CAGR and broader financial plan. He also inquired about the components bridging the 10.5% rate-based CAGR to the 6%-8% EPS growth guidance, including the impact of FCM, energy efficiency incentives, and Northstar DIG recontracting.

Answer

Garrick Rochow, President and CEO, expressed satisfaction with the growing data center pipeline, noting two new data centers and two large manufacturing customers recently joined the funnel. He highlighted progress on the Q2 announced data center, including the Large Load Tariff approval, near-final Extraordinary Facilities Agreement, and rate contract, with an expected online date as early as 2028. He clarified that data center investments are not yet included in the current 5-year plan. Rejji Hayes, CFO and Executive Vice President, explained that the low double-digit CAGR from rate-based growth, Northstar, and FCM is bridged down to the 6%-8% EPS guidance by approximately 3.5% in equity funding costs and negative arbitrage from $1.7 billion in parent refinancings over the 5-year plan. Mr. Rochow added that 2025's strong performance allowed for reinvestment, de-risking future years, and a $0.03 increase to the 2026 guidance.

Julien Dumoulin-Smith asked about the data center opportunity in Michigan, including the timeline for new data centers, their financial impact, and how they integrate with CMS Energy's updated 10.5% rate-based CAGR plan. He also inquired about the components bridging the 10.5% rate-based CAGR to the 6%-8% EPS growth guidance, specifically mentioning the Financial Compensation Mechanism (FCM), energy efficiency incentives, and Northstar DIG recontracting.

Answer

Garrick Rochow (CEO, CMS Energy) expressed satisfaction with the growing data center pipeline, noting recent additions and progress on the Q2 announced data center, including the approved Large Load Tariff, Extraordinary Facilities Agreement, and near-final rate contract. He clarified that data center investments are incremental to the current plan. Rejji Hayes (CFO and Executive Vice President, CMS Energy) detailed the bridge from the low double-digit CAGR (10.5% rate-based growth plus Northstar/FCM) to the 6%-8% EPS guidance, attributing the difference to funding costs from increased equity issuance (approximately 3.5% impact) and parent refinancings at higher rates, along with a contingency for weather risk. Mr. Rochow emphasized the company's consistent compounding growth strategy.

Julien Dumoulin-Smith of Jefferies Financial Group Inc. inquired about the specific timing for the large load tariff order, its implications as a gating item for data center contracts, and the broader strategic opportunities for CMS Energy to leverage this growth, potentially impacting future capital plans and earnings growth beyond the current 6-8% range.

Answer

President and CEO Garrick Rochow confirmed an expected November 7th order for the large load tariff, which is crucial for finalizing up to 2 GW of data center opportunities, with one project near final terms. He emphasized the robust and diverse pipeline, including semiconductors and manufacturing, and highlighted the potential for these incremental investments to expand the existing $20 billion capital plan and contribute to CMS Energy's consistent industry-leading financial performance.

Julien Dumoulin-Smith asked about the timing and opportunities associated with the large load tariff, specifically regarding data centers, and how potential growth could impact CMS Energy's capital plan and financial guidance.

Answer

Garrick Rochow, President and CEO, explained that the large load tariff is expected by November 7th, which is a gating item for three large data centers (up to 2 GW total) in final stages, with one (1 GW) near final terms for early 2030 ramp-up. He noted the robust pipeline includes semiconductors and manufacturing, and that the $25 billion+ additional investment opportunities are incremental to the current $20 billion plan, bolstering confidence in the 6-8% growth target, with more details expected in the Q4 call.

Julien Dumoulin-Smith inquired about the specifics of the new 1-gigawatt data center agreement, including the ramp-up timeline and how it will be supported by the company's resource mix. He also asked for an update on the evolution of the broader 9-gigawatt customer pipeline.

Answer

Garrick Rochow, President & CEO, explained that the data center load is expected to begin ramping up in the 2029-2030 timeframe, which provides flexibility for resource planning. He noted this new load will be served by a mix of existing capacity, new renewables, storage, and planned gas capacity. Rochow added that the 9-gigawatt pipeline figure is conservative and continues to fill, with further conversions expected after a new data center tariff is finalized.

Julien Dumoulin-Smith asked about the economic development outlook, specifically how the 900 MW demand plan balances project accelerations and slowdowns. He also inquired if a data center tariff settlement could catalyze formal commercial announcements.

Answer

President and CEO Garrick Rochow characterized the 900 MW load growth plan as conservative, with project accelerations offsetting any pauses. He confirmed the data center pipeline grew to 9 gigawatts post-legislation. Rochow emphasized that finalizing the data center tariff with the commission is the 'next logical step' for these projects to move forward, as the company avoids special contracts in favor of a standardized tariff.

Julien Dumoulin-Smith questioned the significant negative cost variance of $0.15 per share expected in Q4, asking for specifics on the drivers like insurance and IT, and whether it represented a pull-forward of expenses from 2025.

Answer

EVP and CFO Rejji Hayes clarified that the variance is not a pull-forward of 2025 costs. Instead, the company is using contingency built up from countermeasures and favorable Q3 weather to fund certain 2024 cost categories that have been trending above budget. He specified these include insurance premiums, IT-related expenses, and amortization of certain regulatory assets. This is an update to the full-year forecast to reflect the actual economic reality of these costs incurred in 2024.

Julien Dumoulin-Smith asked about the $35 million benefit from Texas House Bill 4384 in the quarter and how it should be considered for annualization relative to guidance, and also inquired about the preliminary financial impacts of Winter Storm Fern on the balance sheet and earnings.

Answer

Chris Forsythe (CFO) explained that the $35 million benefit from HB 4384 is difficult to annualize due to the timing of spending, project closings, and operational activities, especially with recent winter storm impacts on construction, but reaffirmed the fiscal 2026 EPS guidance. Kevin Akers (CEO) clarified that Winter Storm Fern was less severe than Uri, with upstream supply performing well and minimal financial impact expected from gas supply costs.

Julien Dumoulin-Smith asked about the annualized benefit of the $35 million impact from Texas House Bill 4384 recognized in the quarter, and the preliminary financial impacts of Winter Storm Fern.

Answer

Chris Forsythe, Senior Vice President and Chief Financial Officer, stated that the $35 million impact is dependent on spending flow and project closings, cautioning against simple annualization. Kevin Akers, President and Chief Executive Officer, clarified that Winter Storm Fern was less severe than Uri, with minimal supply issues and no significant financial impact expected from gas supply costs.

An associate for Julien Dumoulin-Smith of Jefferies asked about key legislative bills Atmos Energy is monitoring and their potential business implications, specifically mentioning a bill for a standalone depreciation tracker. He also sought confirmation on whether the new fiscal 2025 EPS guidance midpoint should serve as the new base for calculating the long-term CAGR.

Answer

CEO John Akers stated that while the company monitors all legislation, he would not comment on specific bills until they complete the legislative and regulatory processes. CFO Christopher Forsythe confirmed that using the new, higher fiscal 2025 EPS guidance midpoint as a base for the 5-year CAGR is a 'pretty fair assumption.'

Julian Dumoulin-Smith asked about the timeline for battery gross margins to reach the corporate average, considering the evolution of products. He also inquired about the cadence of prepaid lease adoption and its effectiveness in offsetting the impacts of the Section 25D tax credit expiration, both for Enphase's program and market-wide.

Answer

Badri Kothandaraman (President and CEO, Enphase Energy) explained that current battery gross margins are slightly below the corporate average due to tariffs (45% on China cell packs and raw materials). He stated that innovation, particularly the 5th-generation battery with its radically different cost structure, is designed to achieve above corporate gross margins, with new battery generations expected every 18 months. Regarding prepaid leases, Kothandaraman reiterated that the program is in early pilot stages, aiming to replace the pre-25D loan TAM. He expects to have more clarity in the next three to six months and is confident in expanding to more states and gaining market share.

Julian Dumoulin-Smith asked about the timeline for battery gross margins to reach the corporate average and how they are expected to evolve. He also inquired about the cadence of prepaid lease adoption and its role in offsetting the impacts of the Section 25D tax credit expiration.

Answer

Badri Kothandaraman, President and CEO, explained that current battery gross margins are slightly below the corporate average due to tariffs, particularly the 45% tariff on China cell packs. He emphasized that innovation, especially the 5th-generation battery with its radically different cost structure, is key to achieving above-corporate gross margins for batteries. Regarding prepaid leases, Mr. Kothandaraman reiterated that the program is in early pilot stages, aiming to replace the pre-25D loan market, with positive installer feedback. He expressed confidence in expanding to more states within 3-6 months and expects to gain market share.

Julien Dumoulin-Smith asked for a framework for 2026 revenues, specifically how the Q1 2026 outlook of $250 million annualizes, what offsets might mitigate a persistent decline, and what suggests a recovery in the second half of 2026. He also inquired about quantifying the total battery retrofit opportunity in the Netherlands and the expected rate of adoption for 2026-2027.

Answer

President and CEO Badri Kothandaraman expressed a constructive view for the second half of 2026, citing external drivers like rising power prices, declining interest rates, and new financing solutions like PPL with a loan. He also highlighted Enphase-specific drivers including the 4th-generation battery, entry into the 480-V commercial market with IQ9 GaN, Netherlands battery retrofit opportunities, IQ EV chargers, and the 5th-generation battery for significant cost reduction. Mr. Kothandaraman declined to quantify the Netherlands adoption rate but described the substantial opportunity with 475,000 homes and the impact of VPP partnerships like Essent.

Julien Dumoulin-Smith asked about annualizing the $250 million Q1 2026 outlook, the expected offsets from initiatives like prepaid leases (PPL), and the anticipated cadence of recovery in 2026, specifically if mitigation is expected in the back half of the year. He also requested quantification of the Netherlands battery retrofit opportunity, considering 475,000 households, for 2026-2027 adoption rates.

Answer

Badri Kothandaraman, President and CEO, stated it's impossible to quantify but expressed a constructive view on the balance of 2026 due to external drivers like rising power prices, declining interest rates, and new financing solutions like PPL with a loan. He also listed several Enphase-specific drivers, including 4th-gen battery progress, entry into the 480V commercial market with IQ9 GAN microinverters, the Netherlands battery retrofit opportunity (Essent partnership), IQ EV chargers and bidirectional EV chargers, and the 5th-gen battery and IQ9 residential microinverters for cost reduction. For the Netherlands, Mr. Kothandaraman declined to quantify but suggested a potential of 3 GWh if 475,000 homes adopted 7.5 kWh batteries, emphasizing VPP partnerships like Essent's compensation program as key drivers for adoption.

Julien Dumoulin-Smith asked about underlying end-market demand trends and volumetric growth. He also sought clarity on safe harbor revenue expectations for the second half of 2025.

Answer

President and CEO Badri Kothandaraman acknowledged a weak Q1 but expects a recovery driven by normal seasonality and installers adapting to new financing options. He anticipates growth through the year fueled by new products like the 4th-gen battery and IQ9. Regarding safe harbor, he confirmed the $40M for Q2 and stated there are no current plans for H2, but this could change based on customer requests.

Julien Dumoulin-Smith inquired about the gross margin trajectory for 2025, asking if new products like the IQ9 and fourth-generation battery could drive a margin uptick in the second half of the year. He also asked about the reasons for the slight margin dip in Q1 guidance and potential impacts from pricing dynamics related to updated IRS rules and competition.

Answer

President and CEO Badrinarayanan Kothandaraman explained that Enphase's pricing is based on value-add, supported by a strong cost-reduction program. He attributed the Q1 margin guidance fluctuation to normal product mix. He anticipates long-term margin improvement driven by intrinsic cost reductions in new products, such as GaN technology in the IQ9 and high integration in the fourth-gen battery. He also revealed a fifth-generation battery is planned for Q1 2026 with a 'drastic' cost reduction, ensuring a steady cadence of innovation and cost efficiency.

Julien Dumoulin-Smith asked for the specific sales mix of domestic content SKUs in Q3 and Q4 2024, as well as the expectation for Q1 2025.

Answer

President and CEO Badri Kothandaraman reported that the domestic content mix was near zero in Q3, is estimated to be around 10-15% in Q4, and is expected to continue a steady ramp from that point into the new year.

Julian Dumoulin-Smith first asked about the texture of the 2027 CapEx guidance, inquiring how much of the $2 billion-$2.5 billion range is already committed and if new project announcements would be incremental. He then sought clarification on the double-digit EBITDA growth expected for 2027 over 2026. Finally, he asked about future opportunities related to the ExxonMobil UJI expansion, particularly regarding volumes to Mont Belvieu and potential incremental CapEx beyond 2027.

Answer

Co-CEO Randy Fowler stated that the 2026 CapEx range up to $2.9 billion includes unannounced projects, with expectations to be at the higher end, and the 2027 range remains $2 billion-$2.5 billion. He confirmed the expectation of approximately 10% EBITDA growth for 2027 over 2026, noting that Q4 and Q1 are seasonally stronger. Company Representative Justin Kleiderer explained that the ExxonMobil UJI expansion for Bahia is underway, with Exxon having connection rights and 12 downstream agreements already executed, strengthening the overall relationship.

Julien Dumoulin-Smith inquired about the timing and margin cadence for the Saudi JV's 2.25 GW project. He also asked how customer conversations are evolving regarding power conversion solutions and the competitive landscape in that area.

Answer

Dan Shugar, CEO and Founder, confirmed the JV is launched, operational, and already delivering on the 2.25 GW project, with existing and new factories. Chuck Boynton, CFO, explained the JV's capital-light, 50/50 structure and its revenue generation model. Dan Shugar then discussed power conversion, emphasizing opportunities for higher efficiency, reliability, and safety, with customer pilots planned for 2026.

Julien Dumoulin-Smith from Jefferies inquired about the expected cadence of the solar industry, considering safe harbor dynamics and order timing. He also asked for more clarity on the components of Nextracker's product diversification strategy.

Answer

President Howard Wenger highlighted Nextracker's robust U.S. supply chain with over 25 facilities, providing flex capacity to meet potential changes in safe harbor rules. CEO Dan Shugar added that long-term demand is strong and detailed the diversification strategy, which includes software (TrueCapture), foundations, EVOS, and the newly acquired robotics platforms, which will be rolled out over time.

Julien Dumoulin-Smith inquired about the strategy to grow non-tracker revenues to one-third of the business, asking about the cadence of the build-out and the potential for further M&A.

Answer

CEO Dan Shugar confirmed they have made other unannounced acquisitions and will detail the non-tracker growth strategy at a future Analyst Day. CFO Chuck Boynton highlighted the company's strong financial position, expecting over $1 billion in cash by year-end after funding current deals. He stated that while organic investment is the priority, they will continue to evaluate M&A opportunities.

Julien Dumoulin-Smith asked about the strategy for expanding Master Supply Agreements (MSAs) into international markets and the potential impact on margin sustainability.

Answer

Howard Wenger, President, stated that framework agreements have been primarily focused on the U.S. but there is interest from multinational customers for a global approach. He noted that the international business currently operates more on a project-by-project basis, but since repeat business is also high internationally (~80%), a strong partnering approach already exists. He deferred more detailed commentary to the next call.

Julien Dumoulin-Smith of UBS asked for clarification on how many domestic content points the 100% U.S. product qualifies for. He also revisited the margin discussion, asking if the lower margin profile expected in the second half of the year represents the new run rate for the existing backlog.

Answer

President Howard Wenger stated the 100% U.S. tracker can enable a customer to qualify for 24.7 points, which is more than half the points needed to reach the 40-45% threshold for the 10% bonus ITC. CFO Chuck Boynton reiterated that it's too early to provide an outlook for next year's margins, but the structural high-20s to low-30s gross margin would translate to a ~20% EBITDA margin, deferring a detailed outlook to a future date.

Julien Dumoulin-Smith asked about the expected cadence of announcements to achieve NextEra Energy's 15 GW or 30 GW data center targets, defining success for 2026, and the anticipated resource mix (gas vs. renewables) within these targets. He also sought specific milestones and an update on the data center starting timeline for FPL.

Answer

Chairman, President, and CEO John Ketchum clarified that the 15x35 target is an origination channel for existing development expectations, with a composition of roughly 6 GW of gas-fired generation by 2032 and the balance in renewables and storage. He noted 20 GW of interest in Florida, with advanced discussions on 9 GW, emphasizing FPL's low bills and large load tariff. CEO of Florida Power & Light Armando Pimentel stated his expectation for large load announcements in FPL's service territory in 2026. President and CEO of NextEra Energy Resources Brian Bolster reiterated tracking against the 13 GW development expectations. John Ketchum added that chunkier deals would be announced as they happen, not just on quarterly calls.

Julien Dumoulin-Smith inquired about the expected cadence of announcements to achieve NextEra Energy's 15 GW or 30 GW data center targets, defining success metrics for 2026, and the anticipated resource mix (gas vs. renewables). He also asked for specific FPL milestones regarding data center timelines and the disclosure strategy for large project announcements.

Answer

Chairman, President, and Chief Executive Officer of NextEra Energy John Ketchum clarified that the 15x35 target is an origination channel for existing development expectations, with a composition of roughly 6 GW of gas-fired generation by 2032 and the balance in renewables and storage. He noted 20 GW of interest in Florida with 9 GW in advanced discussions, expecting announcements in 2026. Chief Executive Officer of Florida Power & Light Company Armando Pimentel confirmed 2026 as an execution year for large load announcements in FPL's service territory. President and Chief Executive Officer of NextEra Energy Resources Brian Bolster reiterated tracking against the 13 GW development expectations. John Ketchum added that significant deals would be announced as they happen, not just during quarterly calls.

Julien Dumoulin-Smith inquired about the progress and expected cadence of NextEra Energy's contracted gas strategy, particularly in relation to hyperscaler partnerships, and sought clarification on recent net originations, including projects like Esmeralda and Jackalope.

Answer

John Ketchum, Chairman, President and CEO of NextEra Energy, indicated significant activity in the data center hub strategy, leveraging existing renewables for early load interconnects and combining solutions with gas, SMR, transmission, and pipeline capabilities. He stated more details on cadence would be shared in December. Regarding specific projects, Mr. Ketchum clarified Esmeralda was a development project not in the backlog with no capital spent, and Jackalope was a small project with a slight extension, neither impacting the robust overall backlog.

Julian Dumoulin-Smith asked for an update on NextEra Energy's contracted gas strategy, particularly regarding hyperscaler announcements and the expected cadence of such deals. He also sought clarification on the net originations discussion, specifically how projects like Esmeralda and Jackalope fit into the backlog.

Answer

John Ketchum, Chairman, President, and CEO of NextEra Energy Inc., described 'a lot in the hopper' regarding the data center hub strategy, which includes combined cycle units. He reiterated NextEra Energy's competitive advantage in securing early-stage load interconnects with existing renewables and storage, followed by gas or SMR technology. Mr. Ketchum stated that Esmeralda was a development project, not in the backlog, and no money was spent on it, with the BLM open to individual project applications. Jackalope is a small project that will extend out, and the company has 1.5 times coverage on its inventory, allowing flexibility.

Julien Dumoulin-Smith from Jefferies asked about the impact of the OBBBA on long-term EPS growth and sought an update on progress with nuclear assets, specifically the Duane Arnold restart and other opportunities.

Answer

John Ketchum, President, CEO & Chairman, deferred specific long-term EPS guidance to a future Analyst Day but emphasized that market complexity favors large, prepared developers like NextEra. He confirmed that the potential restart of the Duane Arnold nuclear facility is advancing well, with positive on-site reviews and customer discussions. He framed this and the potential for SMRs as key parts of their 'all of the above' strategy to meet surging power demand.

Julien Dumoulin-Smith inquired about the specific factors contributing to the company's confidence in reaching the higher end of its guidance range for 2025 and sought clarity on the timing and process for mitigating the $150 million tariff exposure with customers.

Answer

John Ketchum, Chairman, President and CEO, cited the strong start to the year, with nearly 9% adjusted EPS growth in Q1, as a primary reason for confidence in achieving the higher end of the guidance range. Regarding tariffs, he explained that the $150 million exposure is a net figure after accounting for protections in supplier contracts. He further stated that NextEra has trade measure provisions in its customer contracts that it expects to use to reduce this exposure significantly, potentially to zero, based on past experience.

Julien Dumoulin-Smith of Jefferies questioned NextEra's strategy for entering the gas generation business, asking about potential acquisitions versus organic development. He also inquired about capital recycling plans and the role of sell-down vehicles in light of the XPLR situation.

Answer

CEO John Ketchum stated that NextEra does not need to make acquisitions to grow its gas business, as the company already possesses all the necessary development capabilities in-house, including land, permitting, and infrastructure teams. Regarding capital recycling, both Ketchum and CFO Brian Bolster confirmed that plans are unchanged and that the company has multiple avenues for monetization, highlighting that several billion dollars had been recycled in the past 18-24 months through other means.

Asked if the company would consider acquisitions to accelerate its entry into the gas generation business and questioned the strategy for monetizing renewable assets and recycling capital following changes at its affiliate, XPLR.

Answer

The company sees no need for acquisitions to enter the gas business, as it has all the necessary development capabilities in-house. While deferring specific XPLR questions to a future call, they affirmed that their overall capital recycling plans remain unchanged and they have multiple avenues for monetization beyond XPLR.

Julian Dumoulin-Smith inquired about Kinder Morgan's active engagement with data center opportunities, regional growth prospects, and the specific timing and scope of the South System 4 (SS5) project, including its initial development approach and requirements for a formal filing.

Answer

CEO Kimberly Dang clarified that approximately 60% of the $10 billion backlog is tied to power projects, including data centers, citing significant demand growth projections from utilities like Georgia Power across various states. Sital K. Mody, President of Natural Gas Pipelines, stated that SS5 timing depends on customer subscription, anticipating brownfield looping in addition to compression, with final scope driven by demand dynamics.

Julien Dumoulin-Smith asked for more details on the shadow backlog opportunities, specifically their regional distribution and relevance to power generation in Texas and the Southwest, including the El Paso system. He also questioned if Southeast opportunities align with current generation resource planning and sought clarification on the Western Gateway project's ultimate economics.

Answer

Kim Dang, CEO, and Sital Mody, President of Natural Gas Pipelines, discussed continued power development driven by data centers, coal retirements, and peakers across various regions like New Mexico, Arizona, Colorado, Arkansas, and Florida. They also noted needs for egress from basins like Haynesville and Marcellus/Utica, and storage expansion. Mr. Mody confirmed that the $10 billion backlog incorporates some of the IRPs for the Southeast. Ms. Dang declined to disclose Western Gateway's specific costs due to competitive reasons.

Julien Dumoulin-Smith asked for more detail on the shadow backlog opportunities, specifically regionally, focusing on power opportunities in Texas and the Southwest (El Paso system), and the ultimate economics of the Western Gateway project.

Answer

Kim Dang (CEO) and Sital Mody (President of Natural Gas Pipelines) discussed power development driven by data centers, coal retirements, and peakers for renewables across New Mexico, Arizona, Colorado, Arkansas, and Florida. Mr. Mody highlighted strong connectivity to Mexico and debottlenecking on the Gulf Coast. He confirmed the $10 billion backlog includes Southeast IRPs. Ms. Dang declined to disclose Western Gateway costs due to competitive reasons.

Julien Dumoulin-Smith asked about the relationship between margins and domestic supply, particularly with AESC, and sought an update on AESC's OBBBA compliance and the evolving supply arrangement.

Answer

President and CEO Julian Nebreda stated that any potential deal with AESC would be 'aggregative' to current margins, implying improvement. He reported significant progress on IP and material assistance for OBBBA compliance with AESC, though ownership is still under debate. He emphasized Fluence's strategy of diversified suppliers and its ability to integrate any battery into a high-quality solution, making the specific supplier less relevant to product delivery and capabilities.

Julien Dumoulin-Smith asked about the relationship between margin commentary and the situation with AESC, specifically whether potential margin improvements are tied to domestic supply arrangements. He requested a detailed update on AESC, including the evolution of the relationship and how volumes might be split between AESC and the new backup supplier.

Answer

President and CEO Julian Nebreda stated that any potential deal with AESC would be 'aggregative' (positive) to current margins, and the company is committed to a general trend of margin improvement. He detailed progress on AESC's OBBA compliance across IP (solution done), material assistance (plan in place), and ownership (still under debate, but progressing). He reiterated that the new supplier is part of a strategy for diversification and meeting growing demand, viewing it as a competitive advantage. He clarified that current margin expectations do not assume a specific deal with AESC, but any such deal would be accretive.

Julien Dumoulin-Smith of Jefferies asked for clarity on how the $2.5 billion backlog for 2026 and the new 80-90% coverage policy set expectations for the upcoming year. He also inquired about the timing of FEOC-compliant equipment orders.

Answer

President and CEO Julian Nebreda and CFO Ahmed Pasha reiterated that the 80-90% coverage target is a more conservative approach to guidance but declined to provide a specific 2026 forecast. On FEOC, Nebreda stated that Fluence's goal is to meet the actual deadlines in the act, regardless of safe harbor flexibility, to maintain its first-mover advantage by ensuring its supply chain is compliant as soon as possible.

Julien Dumoulin-Smith sought confirmation on the full-year cash balance outlook and asked about the U.S. competitive landscape evolving by 2027 as international peers establish domestic operations.

Answer

CFO Ahmed Pasha confirmed the year-end cash balance should be in a similar ballpark, as most of the year's working capital use occurred in Q1. President and CEO Julian Nebreda agreed the U.S. market will see more domestic competition by 2027, emphasizing that Fluence's strategy is to win through continued technology leadership.

On behalf of Julien Dumoulin-Smith, an analyst asked what factors would drive results to the high versus low end of the fiscal 2025 revenue guidance, and whether the low end bakes in assumptions for project delays or policy risks.

Answer

President and CEO Julian Nebreda responded that the primary driver between the low and high end of the range is the speed of converting pipeline opportunities into firm backlog between now and March. He noted that once projects are in the backlog, the risk of significant delays is minor, so the focus is on securing new orders.

Julian Dumoulin-Smith inquired about the allocation of capital expenditure, specifically if the $200 million increase in shareholder return implied a reduction in utility CapEx, an increase in dividends, or a pivot towards midstream CapEx.

Answer

Sean O'Brien, CFO, clarified that utility CapEx is expected to be consistent or slightly up, with the cast iron program nearing completion. He indicated an increase in midstream capital and reaffirmed the company's commitment to the dividend in future years.

Julien Dumoulin-Smith inquired about AmeriGas's target to achieve sub-4x leverage, asking if it's driven by deleveraging or EBITDA improvement and the timeline. He also sought clarification on the consistency of earnings going forward, specifically confirming the absence of one-time tax credit items like the $0.40 ITC impact from 2025, and asked about the shift in CapEx relative to shareholder return, particularly regarding utility vs. midstream CapEx and dividends.

Answer

CEO Robert Flexon highlighted AmeriGas's intrinsic value growth opportunities, driven by efficiency projects like routing and delivery. President of AmeriGas Michael Sharp detailed the six PMO projects, noting 17% EBIT growth and stabilized volumes, expecting continued growth. CFO Sean O'Brien explained AmeriGas's leverage reduction from 6x to 4.9x in 2025 through $24 million EBIT growth and $200 million debt reduction, projecting sub-4.5x leverage in 2026 from continued deleveraging and low double-digit EBIT growth. Sean O'Brien confirmed that the OB3 interest deductibility benefit and the large 2025 ITCs are not ongoing, indicating a normalized run rate for 2026-2029, with only about $0.9 of PTCs in the forecast. He also clarified that utility CapEx is consistent or slightly up compared to prior plans, with more midstream capital and a commitment to dividends.

Julien Dumoulin-Smith asked about UGI's strategy for its upcoming debt maturities beyond 2025, the company's positioning within its full-year guidance after strong Q1 results, and the strategic direction for the UGI International business.

Answer

President and CEO Robert Flexon explained that the intercompany loan from UGI International to AmeriGas was an 'elegant' solution for the 2025 maturity, allowing the company to focus on the 2026 maturities. He highlighted strong operational execution in the natural gas business and early positive signs from AmeriGas's new 'pod' structure. CFO Sean O’Brien added that this move aids in deleveraging AmeriGas towards its 5.0x debt-to-EBITDA target and provides timing optionality for refinancing the 2026 notes. Regarding UGI International, Flexon stated the focus is on optimizing its storage capabilities and evaluating the portfolio for potential asset sales to support deleveraging.

Julien Dumoulin-Smith (represented by Paul Zimbardo) inquired about Spire's long-term growth rate, specifically focusing on expected improvements in earned ROEs and the growth trajectory of the gas marketing and midstream segments. He also asked about the evolution and trend of the FFO to debt target (15%-16%) from a Fiscal Year 2027 perspective.

Answer

Scott Doyle, President and CEO of Spire, explained that the two-year guidance reflects current business dynamics, with Fiscal Year 2027 serving as a cleaner base. He noted a step-up in earned returns in Missouri due to the recent rate case, bringing them closer to allowed returns, though slightly less in FY2027 than FY2026. For Alabama, earned returns are near allowed due to the annual forward-looking mechanism. He clarified that gas marketing is rebased annually and midstream storage is excluded from FY2027 guidance. Regarding FFO to debt, Mr. Doyle indicated an expected steady movement into the middle of the threshold bands for Moody's and S&P, driven by Missouri recoveries and a credit-positive financing approach for the Tennessee acquisition.

Julien Dumoulin-Smith asked about the working capital tailwind, specifically regarding customer willingness to accept higher down payments and Legence's negotiating power to protect project economics. He also followed up on the company's M&A life cycle, seeking clarity on the expected cadence and setting expectations for future transactions.

Answer

CFO Stephen Butts explained that improved working capital management in Q3 resulted from faster collections, better payables timing, and successful negotiation of contract terms, particularly for custom fabrication projects which often secure higher upfront payments. Regarding M&A, Stephen Butts noted an active and robust pipeline, with smaller E&C tuck-ins expected to continue. He emphasized that while I&M acquisitions are larger and less predictable, the company will focus on integrating Bowers in the near term, thus not anticipating another acquisition of that magnitude soon.

Julien Dumoulin-Smith asked about the working capital tailwind, customer willingness to accept higher down payments, and Legence's negotiating power for project economics. He also questioned the life cycle of M&A, the expected cadence, and the company's expectations for future acquisitions.

Answer

Stephen Butts, CFO, explained that working capital improvements stemmed from faster collections, better payables timing, and improved contract terms, especially for custom fabrication. Regarding M&A, Stephen Butts noted an active and robust pipeline, with easier velocity for E&C tuck-ins and I&M being more opportunistic. He indicated that a Bowers-level acquisition is not anticipated in the near term due to focus on integration.

Julien Dumoulin-Smith asked about the conversion probability and geographic dispersion of the 2 GW-4 GW pipeline, rate case timing in Iowa post-2027, and how regulatory uncertainty might impact future growth rates, specifically if an 8%+ EPS guide is possible post-2027.

Answer

Lisa Barton (President and CEO) expressed high confidence in the pipeline, citing Alliant Energy's advantages in rural Iowa and Wisconsin, and a constructive regulatory environment. She aims to avoid future Iowa rate reviews through economic development. Robert Durian (EVP and CFO) clarified the plan extends to 2029 as standard. Lisa Barton reiterated that an 8%+ EPS guide post-2027 depends on data center online timing and transmission investments.

Julien Dumoulin-Smith with Jefferies followed up on the 2-4 gigawatts pipeline, asking about the probability of conversion for these opportunities, their fragmentation across Iowa and Wisconsin, and the company's strategy for rate case timing in the outer years, particularly given the Iowa regulatory construct. He also probed for potential upside to the 8% plus EPS guidance post-2027.

Answer

Lisa Barton, President and CEO, expressed high confidence in the 2-4 gigawatts pipeline, highlighting Alliant Energy's "plug-and-ready" advantage in rural Iowa and Wisconsin with existing infrastructure and supportive regulatory environments. She noted a potential gravitation of data centers towards Iowa due to available sites. Regarding rate cases, she explained that Wisconsin's forward-looking test years minimize lag, and Iowa's individual customer rate construct aims to avoid future rate reviews, similar to Mid-American Energy's historical success. Robert Durian, Executive Vice President and CFO, added confidence in the plan extending beyond 2029. Lisa Barton reiterated that further EPS upside depends on the timing of data center online dates and load ramp acceleration, like the recent Google agreement.

Julien Dumoulin-Smith from Jefferies asked for more details on the QTS data center announcement, including the timeline for formalizing the agreement, whether it was previously part of the 'mature opportunities' pipeline, and what other projects are at the top of the funnel. He also inquired about the timeline for updating the company's capital plan and sought clarification on the safe harbor contingency for 450 megawatts of wind projects.

Answer

President and CEO Lisa Barton clarified that the QTS Madison project was in the 'mature opportunities' bucket, while the announced Cedar Rapids project was already in the existing plan. She provided a load ramp-up schedule for Cedar Rapids and stated a full capital expenditure plan update would occur in Q3. Executive VP and CFO Robert Durian added that the company has a flexible resource plan and is confident in its ability to safe harbor the remaining wind projects, with the option to pivot to other resources if necessary.

Julien Dumoulin-Smith asked about Alliant's confidence in safe-harboring tax credits for its renewables and storage plan, including wind repowering projects. He also sought clarity on the timeline to firm up the full data center opportunity pipeline, which the slides indicated could be up to 2.9 GW.

Answer

EVP and CFO Robert Durian expressed high confidence, stating the company took significant action in late 2024 and early 2025 to safe harbor a 'substantial majority' of its planned renewable and storage projects. President and CEO Lisa Barton added that the company is very experienced with the safe-harboring process. Regarding the data center pipeline, Barton described the upside portion as representing active discussions and emphasized an 'all of the above' resource strategy to remain competitive, promising that 'all will be revealed in Q1'.

Julien Dumoulin-Smith from Jefferies asked about the potential for tailwinds beyond 2028 from the second phase of data center development and other CapEx. He also sought clarification on how the Individual Customer Rates (ICR) tariff and earnings sharing mechanisms might impact earned returns, particularly in the latter part of the forecast period.

Answer

President and CEO Lisa Barton stated that the company is focused on economic development and will provide updates on post-2028 growth once there is a clearer line of sight on the timing and certainty of new load. CFO Robert Durian explained that significant load growth, especially from future phases, would likely push the company into earnings sharing mechanisms towards the back half of the plan, around 2028-2029, but noted it could occur sooner if other data center contracts are secured.

Julien Smith asked about the cadence of the incremental capital plan, specifically if the $10 billion increase is ratable or weighted towards 2030, and what components comprise this increase beyond data center-related transmission and generation. He also inquired about Duke Energy's commitment to its FFO to debt target.

Answer

Brian Savoy, EVP and CFO, and Harry Sideris, President and CEO, explained that capital is being added in every year of the plan to support the ramp-up of large customers and energy modernization. The incremental capital includes transmission and generation for new ESAs, potential LDC investments, and T&D projects. They reaffirmed commitment to achieving 15% FFO to debt over time, targeting over 14% this year.

Julien Smith inquired about the cadence of Duke Energy's incremental capital plan, specifically whether the $10 billion increase is ratable across the 2025-2030 period or heavily weighted towards 2030. He also asked about the composition of this incremental capital, including transmission, generation for data centers, LDC investments, and T&D, and Duke Energy's commitment to maintaining its FFO to debt target.

Answer

Brian Savoy, Executive Vice President and CFO, clarified that capital is being added in every year of the plan to support the ramp-up of large customers and energy modernization, with 2030 expected to be higher than 2025. Harry Sideris, President and CEO, emphasized the dynamic environment driving capital expansion due to data center growth and modernization. Savoy added that the incremental capital encompasses more than just data centers, including LDC investments and T&D, with further details on the finalized plan expected in February. Sideris reaffirmed Duke Energy's commitment to achieving 15% FFO to debt over time, targeting over 14% this year.

Julien Dumoulin-Smith of Jefferies asked how recent strategic transactions and legislative wins position Duke Energy within its EPS growth range and inquired about the specific impacts of the new Carolinas legislation on the company's plans and returns.

Answer

President & CEO Harry Sideris stated that the recent actions increase confidence in achieving the 5-7% EPS growth rate, particularly positioning Duke for the top half of the range in 2028-2029. He explained that the new North Carolina law enhances the state's growth attractiveness and supports the company's 'all of the above' strategy by providing credit support and helping manage customer affordability.

Julien Dumoulin-Smith asked if the recent 1 GW of data center deals represents an acceleration in load growth, questioned the strategic fit of the GE turbine agreement, and probed the outlook for the full year given the strong Q1 results.

Answer

CEO Harry Sideris confirmed the 1 GW in deals was contemplated in their plans and that the GE agreement provides supply chain flexibility to meet growing demand. CFO Brian Savoy stated that the strong start to 2025 supports the company's 5-7% long-term growth outlook and positions them well for future years.

Julien Dumoulin-Smith asked about the company's ability to drive cost savings and efficiencies, and the impact of large-load customer deposits on the rate base and the CapEx-to-rate base conversion.

Answer

CFO Brian Savoy stated that Duke Energy targets a low ~1% O&M growth CAGR by leveraging technology and scale. President Harry Sideris highlighted their continuous improvement culture and supply chain advantages. CEO Lynn Good explained that creative tariff structures for large customers are 'a little bit of noise' and not a major factor in the rate base calculation, emphasizing the strength of the overall capital plan.

Jamieson Ward, on behalf of Julien Dumoulin-Smith from Jefferies, asked for details on the tax credit monetization program, including its potential size, market discount rates, its specific impact on FFO to debt, and the status of formalizing the credit amortization plan in the Carolinas.

Answer

CFO Brian Savoy stated that the tax credit market is deepening, with attractive discounts in the "mid-90s or slightly above." He confirmed Duke is trending toward the upper end of its $300-$500 million monetization target for 2024, which equates to a 40-60 basis point improvement in FFO to debt. CEO Lynn Good added that the amortization plan is memorialized in North Carolina and that this method is a good planning assumption for the Carolinas overall.

Julien Dumoulin-Smith asked about the Massachusetts regulatory backdrop, specifically how the NSTAR Gas PBR outcome might inform expectations for electric PBRs or EGMA, given the specific metrics involved. He also inquired about any early indications for the Q4 roll-forward, particularly regarding transmission and long lead-time investments, and ISO New England's planning process.

Answer

CFO John Moreira explained that NSTAR Gas's PBR was its first touchpoint, with the DPU denying a $45 million rate base roll-in due to three subjective performance metrics (opinion surveys) not being met, despite strong performance on 15 others. He noted that NSTAR Electric's PBR is a 10-year deal, with its fifth-year assessment in 2028, not annual. Regarding the capital plan, Mr. Moreira expects the outer periods of the next five-year plan to show increasing investments, rather than a dip, due to clearer project visibility.

Julien Dumoulin-Smith sought clarification on the Massachusetts regulatory backdrop, specifically how the NSTAR Gas PBR outcome might inform expectations for the electric PBR or EGMA, given the DPU's scrutiny. He also asked for early indications regarding transmission and long lead time investments, particularly concerning ISO New England's planning process for the upcoming Q4 roll forward.

Answer

Executive Vice President, Chief Financial Officer, and Treasurer John Moreira explained that NSTAR Gas met 15 of 18 performance metrics, missing three subjective opinion surveys, leading to the denial of the rate base roll-in. He noted that the electric PBR is a 10-year deal with the fifth-year assessment in 2028, where performance has been strong. Mr. Moreira anticipates that the trend of increasing capital investments in the outer periods of the five-year plan will continue due to clear project visibility.

Represented by Paul, Julian Dumoulin-Smith sought clarification on the 2025 equity issuance plan and asked about the expected earnings cadence for the second half of the year, particularly concerning the corporate segment.

Answer

John Moreira, CFO, clarified that while a large equity issuance is not expected in 2026 post-Aquarion sale, some issuance in 2025 remains possible depending on debt balances and deal timing. For the second half, he noted interest cost headwinds at the parent level would be less significant than in H1, and utility earnings would be steady with known gas rate adjustments effective November 1.

Julien Dumoulin-Smith of Jefferies sought more detail on the drivers of the FFO to debt improvement and clarification on the corporate cost drag for the full year.

Answer

EVP and CFO John Moreira explained that improved cash flows are the primary driver for the FFO to debt enhancement, which is expected to be 'well over' 100 basis points above thresholds. Regarding corporate drag, he noted Q1 was higher due to the cessation of capitalized interest for offshore wind and new debt, but the year-over-year impact will lessen. He guided to a full-year effective tax rate of 22.5% to 23.5%.

Julien Dumoulin-Smith asked for an update on the year-to-date progress towards the FFO to debt target, the current run-rate of parent-level interest expense, and the cost recovery mechanism for the new Cambridge substation.

Answer

EVP, CFO and Treasurer John Moreira stated that FFO to debt has improved significantly from 2023 but declined to give a specific figure. Chairman, President and CEO Joseph Nolan explained the Cambridge substation is a predominantly FERC-regulated transmission asset with a clear line of sight for timely cost recovery.

Julien Dumoulin-Smith from Jefferies Financial Group Inc. asked about the removal of the 5-7% long-term growth outlook from the presentation, seeking interpretation of this change and its implications for future growth. He also questioned the significance of the 20%+ ROIC target and how Williams views returns and build multiples beyond the power innovation sector. Furthermore, Mr. Dumoulin-Smith inquired about the future direction of power innovation, specifically whether the strategy involves upsizing existing sites like Socrates, Apollo, and Aquila, or primarily pursuing new greenfield opportunities in different geographies.

Answer

President and CEO Chad Zamarin indicated that more clarity on the growth runway for the next couple of years and directional guidance for the longer term would be provided at the upcoming Analyst Day in February 2026. He highlighted the company's strong balance sheet and project opportunities, suggesting an "incredible opportunity to grow" with industry-leading results. Regarding power innovation, Mr. Zamarin explained that the strategy is a combination of both scaling existing facilities, as demonstrated with Socrates, and expanding into new geographies, aiming to manage the pace of investment with high-quality counterparties and strategic advantages.

Julian Dumoulin-Smith asked about the removal of the 5-7% long-term growth outlook from the presentation, its interpretation, and how the company's target of 20%+ ROIC relates to the long-term growth outlook and build multiples beyond the power innovation sector. He also sought clarification on the future direction of power innovation, specifically whether it involves upsizing existing projects like Socrates, Apollo, and Aquila, or pursuing new greenfield opportunities and geographies.

Answer

President and CEO Chad Zamarin indicated that while the company has achieved phenomenal growth (9% CAGR over five years), the balance sheet is in even better shape, and the opportunity set is stronger. He teased that more clarity on the runway for the next couple of years and directional guidance would be provided at the upcoming Analyst Day in February. Regarding power innovation, Mr. Zamarin stated it would be a combination of both scaling existing facilities (like Socrates, which expanded from $1.6 billion to $2 billion) and expanding into new geographies, as customers intend these to be multi-decade investments.

Julien Dumoulin-Smith from Jefferies sought clarification on what was reflected in the $0.25 to $0.45 EPS range, the total CapEx required, and the earnings profile and sensitivity of the 1-3 gigawatts of upside. He also inquired about the relationship with the state of Indiana.

Answer

Shawn Anderson, EVP and CFO, clarified that the $6-7 billion CapEx supports the announced customer and positions NiSource for other opportunities, with the $0.25-$0.45 range reflecting the announced customer and potentially additional strategic negotiations. Michael Luhrs, EVP of Technology and Customer and Chief Commercial Officer, highlighted the speed-to-market advantages. Lloyd Yates, CEO and President, affirmed Indiana's openness to economic development, emphasizing affordability and the positive relationship with the governor's office.

Julien Dumoulin-Smith from Jefferies sought further details on the $0.25 to $0.45 earnings per share (EPS) range, asking what capital expenditures (CapEx) are reflected and the total CapEx required. He also inquired about the earnings profile sensitivity of the 1-3 GW upside pipeline and NiSource's confidence in pursuing the full $3 billion. Additionally, he asked about the company's relationship with the state of Indiana.

Answer

CFO Shawn Anderson stated that the $6 billion-$7 billion CapEx supports Genco development, including the announced customer, with the higher end of the EPS range reflecting additional strategic negotiations. EVP Michael Luhrs highlighted speed to market, regulatory model, and EPC partnerships as drivers of confidence for the 3 GW pipeline. CEO Lloyd Yates affirmed Indiana's pro-business stance, focus on affordability, and positive relationship with the governor's office.

Julien Dumoulin-Smith inquired about the evolving data center opportunity in the NIPSCO territory, asking if the current load forecast could be outdated and about the potential scale of the opportunity. He also asked about the timing for the Genco order and the possibility of providing a tangible transaction example for stakeholders.

Answer

President & CEO Lloyd Yates stated that NiSource is taking a thoughtful and disciplined approach to the data center opportunity, guided by four key principles, and reiterated that it is a 2025 event for which the company is on track. EVP & CFO Shawn Anderson added that demand for on-site generation for data centers is also present in Ohio and Virginia. Lloyd Yates clarified that the Genco declination process and counterparty negotiations are separate and distinct processes.

Julien Dumoulin-Smith inquired about the evolving data center opportunity in NiSource's NIPSCO territory, questioning if the current load forecast is outdated and seeking clarity on the timeline for a tangible Genco-related transaction.

Answer

President & CEO Lloyd Yates emphasized a thoughtful and disciplined approach to the data center opportunity, guided by four principles, and reiterated that it remains a 2025 event. He clarified that the Genco declination process and counterparty negotiations are separate and distinct processes. EVP & CFO Shawn Anderson added that NiSource is seeing demand for on-site generation for data centers across its gas footprint in Ohio and Virginia.

Julien Dumoulin-Smith from Jefferies asked about the evolving data center opportunity in the NIPSCO territory, questioning if current load forecasts are outdated and inquiring about the potential scale of the opportunity. He also asked about the timing for the Genco order and the possibility of providing a tangible transaction example for stakeholders.

Answer

President & CEO Lloyd Yates emphasized that the company is taking a thoughtful and disciplined approach to the data center opportunity, which he reiterated is a 2025 event and remains on track. He clarified that the Genco declination process and counterparty negotiations are separate and distinct. EVP & CFO Shawn Anderson added that NiSource is seeing demand for pipeline expansions to serve on-site data center generation in Ohio and Virginia.

Julien Dumoulin-Smith of Jefferies asked about the potential impact of extending coal plant lives on capital expenditures and whether new state legislation (Senate Bill 1007) offers an alternative, expedited path for data center projects.

Answer

CEO Lloyd Yates stated that NiSource is assessing the impact of extending coal plant lives but the current plan still assumes retirements in 2025 and 2028. Regarding legislation, Yates and Executive Melody Birmingham explained that Senate Bill 1007 provides an additional path for serving large load customers but does not change their current strategy, with the Genco declination filing remaining the preferred approach.

Julien Dumoulin-Smith inquired about the new GENCO filing, specifically asking about the risk-sharing mechanisms, how traditional rate base concepts might be replicated, and the potential timing for commercial arrangements and updated data center load forecasts.

Answer

CEO Lloyd Yates reiterated that data centers are a 2025 event and emphasized the company's four guiding principles: protecting existing customers, serving new customers with speed, maintaining NIPSCO's financial integrity, and preserving business flexibility. EVP Michael Luhrs explained the GENCO declination filing creates a regulated entity to encapsulate large load customer costs, protecting existing ratepayers while allowing for flexible negotiations. EVP and CFO Shawn Anderson added that this structure allows for ratemaking at the speed necessary to serve these customers, better aligning cash flows with project deployment and positioning NiSource to afford the construction. Regarding load, Luhrs noted the IRP includes a 2,600 MW reference case and an 8,000 MW upside case, stating that discussions remain very positive and accretive.

Julien Dumoulin-Smith asked for clarity on the timing of data points related to the updated CapEx plan and the IRP, and sought more detail on the 2.6-gigawatt data center proposal, including potential ownership percentages.

Answer

EVP and CFO Shawn Anderson stated that upside CapEx would begin to materialize in 2026-2027 and that the IRP and data center strategies would be discussed on the Q4 call. EVP Michael Luhrs directed investors to the IRP filing for details on implied generation assets but confirmed, along with CEO Lloyd Yates, that no decisions on ownership percentages have been made.

Julien Dumoulin-Smith inquired about the timeline and cadence for the AMI rollout, the improving economics and market opportunities for mobile generation assets, and the extent to which HB 4384 legislation is included in the current plan and its potential for further enhancement.

Answer

Jason Wells, CEO, explained that next-generation AMI investments would begin with a pilot in 2026, with full deployment from 2027, offering benefits like targeted load shedding. He detailed two types of mobile generation units: smaller units actively marketed with a strong market, and larger units supporting the San Antonio grid until late 2026/early 2027, after which they will be remarketed in an improving market, both serving as potential cash flow tailwinds. Wells confirmed that HB 4384 benefits are incorporated into the current plan, with opportunities for further enhancement as more gas-related capital is folded in.

Julian Dumoulin-Smith asked about the timeline and expected contributions of the Advanced Metering Infrastructure (AMI) rollout. He also sought an update on the economics and opportunities related to CenterPoint Energy's mobile generation assets, and the extent to which HB 4384's benefits are included in the current gas investment plan.

Answer

CEO Jason Wells indicated AMI investments would begin in 2026 with a pilot, with full deployment from 2027, offering benefits like targeted load shedding. He described two types of mobile generation units: smaller ones actively marketed as a cash flow tailwind, and larger units supporting the San Antonio grid until late 2026/early 2027 before remarketing. He confirmed HB 4384 benefits are incorporated into the current plan, with potential for further enhancement as more gas capital is integrated.

Julien Dumoulin-Smith of Jefferies inquired about the timeline for finalizing Hurricane Beryl cost recovery, the composition and timing of the new 6 GW load growth, and the expected duration of the earnings drag from mobile generation assets.

Answer

EVP & CFO Christopher Foster stated that mediated sessions for Hurricane Beryl cost recovery were underway, with hearings scheduled for the following week. CEO Jason Wells detailed that the 6 GW load growth is approximately two-thirds data centers and one-third advanced manufacturing and energy exports, with interconnections expected in late 2026 through 2028. Wells also clarified the mobile generation asset drag will persist until at least fall 2026, after which they will become a tailwind.

Julien Dumoulin-Smith of Jefferies inquired about the timeline for resolving Hurricane Beryl costs, the composition and timing of the new 6 GW load growth, and the duration of the earnings drag from the mobile generation assets.

Answer

CFO Chris Foster stated that mediated sessions for Beryl cost recovery are underway, with hearings scheduled for late July. CEO Jason Wells detailed that the 6 GW load growth is two-thirds data centers and one-third advanced manufacturing, with interconnections sought for 2026-2028. Wells also clarified the mobile gen earnings drag will persist until at least fall 2026 but no later than spring 2027, after which the assets will be remarketed and become a tailwind.

Julien Dumoulin-Smith of Jefferies asked for a detailed breakdown of the $3 billion in additional capital opportunities and clarification on the timing of these projects within the 5-year versus 10-year plans, noting they appear back-end weighted.

Answer

CEO Jason Wells clarified that at least $2 billion in electric transmission upside remains through 2030, plus a ~$1 billion gas network project. He also identified other drivers, including system resiliency spending in 2029-30 and MISO projects in Indiana. He confirmed many of these opportunities are back-end weighted and extend into the next decade, with full quantification to come in the new 10-year plan.

Julien Dumoulin-Smith sought clarity on the cash flow assumptions for the mobile generation deal, including backup plans if the ERCOT arrangement fails, and asked if the recovery outcome for Hurricane Beryl costs would differ from the prior storm.

Answer

CEO Jason Wells stated the mobile generation deal should be a net cash flow tailwind over its life due to the equipment's doubled market value. If the ERCOT deal fails, the units will be marketed to third parties. CFO Chris Foster said he does not expect a meaningfully different outcome for the Hurricane Beryl cost recovery, as the cost drivers are similar to the previous storm.

Julien Dumoulin-Smith asked about potential strategic options for the mobile generation fleet if the state pushes for divestment and how the 8 GW data center queue reconciles with ERCOT's latest load forecast.

Answer

CEO Jason Wells addressed the mobile generation question by suggesting options like subleasing the equipment to keep it available within Texas, emphasizing the state's need for dispatchable power. On data centers, he confirmed the 8 GW queue reflects a fundamental shift driven by AI that is not yet fully captured in ERCOT's current forecast. He expects ERCOT's early 2025 update to incorporate this significant new demand, likely driving the need for more transmission.

Speaking on behalf of Julien Dumoulin-Smith, Hannah Velasquez asked about the new financing models Sun Nation is contemplating for 2026 after the ITC sunset and for the macro growth outlook for residential solar in 2026-2027.

Answer

CEO Scott Masken explained that while specific names couldn't be shared, major players are developing new financing models blending TPO and loan structures. He noted strong continued demand into 2026 and believes the market will outperform negative predictions. CFO James Brennan added that the company's diversification into commercial, roofing, and service provides a buffer against any potential residential slowdown.

Julian Smith from Jefferies asked about the primary gating factor for serving its large load customer pipeline and whether the new earnings sharing mechanism in Kansas should be considered a precedent for future proceedings.

Answer

CEO David Campbell explained that serving the large load pipeline is a balance of both customer development timelines and Evergy's ability to advance infrastructure, emphasizing that the top 4-6 GW are the most advanced. Regarding the Kansas earnings review, Campbell noted that while it formally applies until the next rate case, it does set a precedent. He framed it as a positive development for a jurisdiction that has historically under-earned its authorized returns.

Speaking on behalf of Julien Dumoulin-Smith of Bank of America, an analyst asked about the rationale for extending coal plant retirement dates and the flexibility of these new dates, as well as the O&M levers available to meet 2025 guidance.

Answer

Chairman and CEO David Campbell explained that extending coal plant life is a flexible approach to meet rising demand but carries risks due to plant age, parts availability, and potential retrofits. On O&M, he stated the company has a range of discretionary spending levers to mitigate the $0.05 earnings variance without impacting system reliability or long-term growth plans.

Julien Dumoulin-Smith from Bank of America asked about the development timeline for generation to serve new large loads, the potential for co-located generation or PPAs, and the process for amending the Integrated Resource Plan (IRP) for new procurement.

Answer

Chairman and CEO David Campbell explained that Evergy has a plan to serve announced customers and is developing plans for prospective ones, noting that about 1,000 MW of gas generation from the 2024 IRP is not yet in the capital plan. He added that the IRP is a dynamic process, with updates scheduled for March and April that will reflect the latest expectations.

Julien Smith from Jefferies asked what factors, such as remaining IRP investments or SPP's ITP, could push growth beyond the high end of the 4-6% range. He also questioned the decision to exclude a future CCGT from the current capital plan.

Answer

Chairman and CEO David Campbell acknowledged that the capital plan does not yet include all elements from the IRP, such as a CCGT and a CT planned for 2031-2032, which represent future capital opportunities. He characterized this exclusion as a level of conservatism, emphasizing the company's focus on a plan they have high confidence in executing, while noting these future projects represent "real tailwinds and upside."

Julien Dumoulin-Smith from Jefferies LLC questioned the importance of the September 1 deadline related to SB6 for data center deals, asking if Vistra would develop backup generation as part of a package. He also requested any initial commentary on the 2027 financial outlook.

Answer

President & CEO Jim Burke responded that the deal's timing is not driven by the September 1 deadline and that he is confident their project structure would work pre- or post-SB6 implementation. On backup generation, he noted that whether Vistra develops it depends on the customer. Regarding 2027, Burke and EVP & CFO Kris Moldovan stated that while forward curves are down slightly, their view that 2027 will be in line with or trend better than 2026 still holds.

Julien Dumoulin-Smith asked for commentary on the 2027 earnings outlook, following the company's remarks about 2026 EBITDA potentially approaching $7 billion, and sought to confirm if the mark-to-market on the open position for 2027 looks similar to 2026.

Answer

President and CEO James Burke confirmed that Vistra sees the earnings strength from 2026 holding into 2027 and even 2028. He noted that despite some anticipated coal retirements, the value of the existing asset base is increasing, and the forward earnings profile looks very consistent and strong from the company's current viewpoint.

Representing Julien Dumoulin-Smith, Antoine asked how pricing discussions for data center contracts have evolved, especially post-PJM auction, and how Vistra weighs buying existing assets versus building new ones in the current M&A environment.

Answer

James Burke, President and CEO, explained that data center customers understand and are willing to pay for the value of reliable, carbon-free power, a value reinforced by the recent PJM auction results. On M&A, he noted Vistra's history of acquisitive growth and acknowledged that existing assets typically trade at a discount to newbuild costs. While Vistra is always evaluating opportunities, he stated a significant value gap still exists between M&A targets and new construction.

Julien Dumoulin-Smith of Jefferies asked about PSEG's willingness to participate in New Jersey's energy storage bidding process and its view on storage as a solution for resource adequacy. He also inquired about the future of PSEG's relationship with PJM amid calls for governance reform.

Answer

Chair, President & CEO Ralph LaRossa positioned energy storage as part of an 'all of the above' solution, contingent on affordability, and noted PSEG had proposed a utility battery solution years ago. Regarding PJM, he identified its governance structure as the core problem, stating that the member voting process is a significant hurdle to reform and that there is no 'overnight silver bullet' solution.

An analyst, likely Julien Dumoulin-Smith, inquired about PSEG's data center opportunities, including the economic benefits of co-location, quantifiable demand in New Jersey, and the potential impact of Exelon's FERC protest on PSEG's strategy.

Answer

Ralph LaRossa, Chairman, President and CEO, detailed that co-located hyperscale data centers signal strong infrastructure for AI companies, creating local construction jobs and trickle-down opportunities. He noted that PSEG is seeing several hundred megawatts of data center demand moving past the engineering phase, with varied infrastructure needs. LaRossa affirmed PSEG's commitment to supporting New Jersey's economic development goals, stating the FERC protest does not shift their strategy, though he expressed broader concern about the implications for all co-located load, not just data centers.

Julien Dumoulin-Smith pressed for details on recent M&A rumors, asking what specific actions the board has taken, and inquired about potential asset sales from its "unicorns" like Uplight. He also asked for expectations on the executive order's impact and the development cadence for the latter half of the decade.

Answer

CEO Andrés Gluski declined to comment on market rumors or potential transactions, per company policy. He noted that technologies like their Maximo robotics could become more valuable under tighter construction deadlines. Gluski stated that AES expects strong growth to continue post-2027, with the U.S. business potentially resembling its higher-margin international business, which operates without tax credits and includes gas generation.

Julien Dumoulin-Smith inquired about the financial impact of the recent global insurance (AGIC) business transaction, the company's exposure to potential tariffs, and the expected cadence for new PPA signings.

Answer

CFO Steve Coughlin stated the AGIC transaction has a $25-30 million EBITDA impact and is highly accretive, calling it a low-cost equity financing. COO Ricardo Falu explained that tariff exposure is minimal due to a proactive supply chain strategy of accelerating imports and supporting U.S. manufacturing, with the risk largely mitigated. CEO Andres Ricardo Gluski Weilert clarified that the quarter's PPA signings are not indicative of a future run-rate, as the company focuses on fewer, larger, and more financially attractive projects, which are inherently 'lumpy'.

Julien Dumoulin-Smith followed up on credit metrics, asking about communications with Moody's regarding the new plan. He also sought clarity on whether the reduced renewables investment meant more asset sell-downs or a slower pace of installations, and asked for the expected EBITDA contribution from retained coal assets in 2026-2027.

Answer

CFO Stephen Coughlin noted the plan was discussed with Moody's and is on track to improve metrics, driven by higher cash flow and accelerated cost savings. CEO Andrés Gluski and COO Ricardo Manuel Falu clarified that post-2027, there will be less growth in megawatts, and the retained coal assets, representing less than half of the current fleet, will continue to provide critical capacity and financial benefits.

Julien Dumoulin-Smith of Jefferies followed up on the credit discussion, asking about the trajectory of credit metrics and whether AES might need to accelerate or upsize its asset sale program. He also inquired about the potential for a significant increase in the U.S. utilities' rate base growth, driven by data center demand.

Answer

CFO Stephen Coughlin stated that parent-level credit metrics remain strong and that recent transactions are credit accretive. He confirmed the rate base growth at the U.S. utilities will be 'much higher' than the previously guided double-digit rate, driven by data center demand, and that an updated long-term plan will be provided in February. CEO Andres Gluski added that AES has a strong record of exceeding asset sale targets at good value.

Julien Dumoulin-Smith of Jefferies asked about the quarterly earnings cadence, noting it implies full-year GAAP EPS could exceed the guidance range. He also inquired about FFO trends and the timing of cash inflows from PFAS settlements.

Answer

EVP & CFO Daniel Schuller confirmed that GAAP EPS is expected to finish above the $2.07-$2.11 guidance range, citing strong gas revenue, tax benefits, and insurance proceeds, which offset headwinds like wet weather. Schuller added that the company targets an FFO to debt ratio above 12.2% and anticipates receiving $45-46 million in PFAS settlement proceeds in 2025, with $7.1 million already collected.

Julien Dumoulin-Smith inquired about the company's equity financing plans, specifically the $350 million target for 2024-2025, its alignment with rating agency expectations, and how it compares to the previously mentioned $1 billion multi-year ATM program. He also asked about the impact of M&A, particularly DELCORA, on equity needs and whether the revised rate base growth guidance was primarily a result of excluding the DELCORA transaction.

Answer

CFO Daniel Schuller and CEO Christopher Franklin responded. Schuller confirmed the $350 million equity plan for 2024-2025, stating they are in sync with rating agencies and that the plan supports their credit profile. He clarified the $1 billion ATM was a multi-year program providing optionality for future acquisitions and not a change in strategy. Franklin added that while the DELCORA closing is delayed, the larger ATM gives them flexibility for when it does proceed. Schuller affirmed that the updated rate base growth guidance reflects the exclusion of DELCORA and its associated capital from the current plan.

Julien Dumoulin-Smith of Jefferies asked about the timeline for margin inflection given the company's investments for future growth. He also inquired about MasTec's positioning for potential mega-projects in the pipeline segment and sought clarification on whether renewable projects might be pulled forward into 2026-2027.

Answer

CEO José R. Mas explained that the company is trying to get ahead of demand with its investments and that much of the cost will be absorbed in 2025, allowing for better execution on future work. He affirmed MasTec's position as the largest and best pipeline builder, expecting to win a significant share of upcoming projects. Regarding renewables, he stated that a pull-forward is speculative and depends on executive orders, but is not currently factored into their plans.

Julien Dumoulin-Smith of Jefferies asked about the construction timeline for Micron's second fab, how the 2028 and 2029 RFPs align with the updated 2025 IRP, and whether the company could pivot to gas generation if the Jackalope Wind project encounters issues.

Answer

CEO Lisa Grow confirmed that Micron's second fab represents an upside to the current IRP but could not yet provide a specific timeline. SVP & COO Adam Richins clarified that resource selection from RFPs is a dynamic process based on evolving needs and not a simple calculation against the IRP. He also affirmed that gas generation is a primary alternative if the Jackalope Wind project does not proceed, noting its potential permitting hurdles.

Julien Dumoulin-Smith from Jefferies asked for details on the potential timeline for Micron's second fab, how the 2028 and 2029 RFPs align with the new 2025 IRP, and whether the company could pivot to natural gas if the Jackalope Wind project encounters significant hurdles.

Answer

CEO Lisa Grow stated that the company is actively working with Micron on the second fab's timing and details are forthcoming. SVP & COO Adam Richins clarified that the RFP process is dynamic and that based on the 2025 IRP, the company needs over 200 MW of "perfect capacity" annually. He also confirmed that shifting to gas-fired resources is an option if the Jackalope Wind project does not move forward due to permitting or other issues.

Julien Dumoulin-Smith of Jefferies asked for the expected timeline for Micron's second fab project and how it relates to the IRP's upside scenarios. He also sought clarification on how the 2028 and 2029 RFPs, based on the 2023 IRP, relate to the incremental needs identified in the new 2025 IRP. Finally, he questioned if the company could pivot to gas resources if the Jackalope Wind Farm project faces economic or permitting issues.

Answer

CEO Lisa Grow confirmed the Micron expansion represents an upside to the current plan but could not yet share a specific timeline. SVP & COO Adam Richins explained that the RFP process is dynamic, with project selection based on current needs at the time of decision, not a simple subtraction from the IRP. He also confirmed that shifting to gas-fired generation is 'absolutely one option' if the Jackalope Wind project does not move forward due to permitting or other issues.

An associate for Julian Smith asked if the 2028 and 2029 RFPs would accommodate new large load customers, sought an update on negotiations with a previously mentioned data center, inquired about the recovery strategy for major transmission projects, and asked for the capacity of the 2028 RFP shortlist.

Answer

CEO Lisa Grow explained that new load needs could potentially be met by existing RFP projects or might require new RFPs, and confirmed data center negotiations are ongoing. VP Tim Tatum and CFO Brian Buckham stated that all options, including general rate cases or one-off filings, are on the table for timely recovery of transmission investments. Executive Adam Richins noted the 2028 RFP shortlist includes several hundred megawatts of capacity and an Idaho Power-owned project.

Julien Dumoulin-Smith from Jefferies asked for an update on the load growth pipeline ahead of the formal update later in the year and inquired about other factors, such as Southern Power's repowering contracts and pipeline, that could impact the translation of rate base growth into earnings.

Answer

CEO Chris Womack confirmed the 50 GW large load pipeline continues to grow with advanced discussions underway with major hyperscalers, emphasizing disciplined pricing. David Poroch, SVP & incoming CFO, added that while Southern Power presents opportunities, projects must meet stringent risk-return parameters and are not included as placeholders in the capital plan. He also highlighted the potential to reprice several Southern Power contracts in the early 2030s.

Julien Dumoulin-Smith asked about potential churn in the composition of data center customers and sought clarification on the timeline for reaching the 17% FFO to debt target in relation to a potential EPS growth rebase in 2027.

Answer

Chairman, President and CEO Chris Womack emphasized the diversity of data center interest, including hyperscalers and developers, stating the momentum is broad-based. Chief Financial Officer Dan Tucker explained that achieving the 17% FFO to debt target is about having a clear 'line of sight,' not necessarily reaching the number by 2027. He noted that while debt reduction from recovering costs will help, incremental capital could adjust the timeline, but confidence in the trajectory is the key factor for any potential rebase.

Julien Dumoulin-Smith asked for metrics on Southern Power's earnings trajectory and repowering potential, and how the company plans to leverage its assets to serve new data center load.

Answer

CFO Dan Tucker stated that Southern Power adds "durability" to the long-term growth profile, with recontracting and new build opportunities primarily benefiting the next decade. He clarified that while direct co-location isn't their model, Southern Power has significant opportunities to build new brownfield gas plants and upgrade its existing fleet to serve load-serving entities that supply data centers. An executive added that these complementary businesses enhance the company's overall durability.

Julien Dumoulin-Smith followed up on the nuclear topic, seeking to clarify if Southern Company's discussions are more preliminary than peers' and how far along they are in considering options like SMRs, given their extensive experience.

Answer

CEO Chris Womack confirmed that their direct experience with the Vogtle project makes them acutely aware of the inherent risks. He stated unequivocally that before the company moves down the path of new nuclear, solutions must be found to mitigate risks for both shareholders and customers, making the current stance cautious despite ongoing analysis and discussions.

Julien Dumoulin-Smith from Jefferies sought confirmation that the Q3 update would include a full refresh of all guidance metrics, including the long-term EPS growth rate. He also asked about the prospects for improving earned ROEs in Colorado (PSCo) and sought to verify if the updated CapEx outlook implies a low-teens rate base CAGR.

Answer

Chairman, President, & CEO Robert Frenzel confirmed the Q3 call will feature a comprehensive roll-forward of all financial guidance. EVP & CFO Brian Van Abel addressed the Colorado ROE, expecting improvement driven by a distribution rider that becomes fully effective next year. Mr. Frenzel added that future capital is largely electric, which should help ROEs. Mr. Van Abel also confirmed the math on a low-teens rate base CAGR was correct, highlighting the company's strong growth prospects.

Julien Dumoulin-Smith from Jefferies sought clarification on the 30-year tax credit flowback alternative and its potential to offset equity risk. He also requested more details on the Colorado wildfire mitigation plan settlement.

Answer

CFO Brian Van Abel reiterated that while they don't expect transferability to be eliminated, the alternative flowback mechanism would significantly reduce equity impact and is a viable solution they would discuss with regulators. He also explained that the constructive Colorado wildfire settlement includes a $1.9 billion plan, an extension of the insurance deferral, and a plan to securitize $1.2 billion of spending by 2029 to manage customer bill impacts.

Julien Dumoulin-Smith questioned the drivers behind the 2024 results coming in at the low end of guidance and sought reassurance on the company's ability to return to its historical performance track record in 2025. He also asked about the confidence in the long-term sales growth outlook.

Answer

CFO Brian Van Abel explained that while there were some negative drivers, offsetting factors give them comfort in their 2025 guidance and they expect to target the midpoint, viewing 2024 as an anomaly. He reiterated confidence in the 5% long-term sales growth forecast, stating its omission from a slide was not significant and that data center demand remains robust.

Julien Dumoulin-Smith questioned whether the upgraded 6-8% EPS growth guidance implies increased confidence in wildfire litigation outcomes. He also asked how quickly mitigation measures like EPSS and PSPS could be implemented to meaningfully de-risk the system.

Answer

Chairman, President and CEO Robert Frenzel stated that confidence stems from their mitigation actions and legal position, not a change in litigation outlook. He clarified the 6-8% target is for ongoing earnings and that accruals remain within insurance limits. He explained that while the company can implement EPSS and PSPS today, future investment is focused on improving granularity to be more targeted, moving from a 'sledgehammer' to a 'scalpel' approach.

Julien Dumoulin-Smith requested more detail on the timing and scale of opportunities tied to the 15 secured combined-cycle turbines, particularly the 7 GW not in the current plan, and asked how nuclear PTCs integrate into the financing strategy.

Answer

Chair and CEO Drew Marsh confirmed the additional 7 GW of turbines are slated for commercial operation between 2029-2031, hinting at future capital plan upside. CFO Kimberly Fontan added that the company manages its equity needs through diverse sources, including incremental operating cash flow and customer support, to maintain its target 10-15% equity financing run rate for new capital.

Julien Dumoulin-Smith questioned the outlook for earned ROEs amid the significant spending ramp and asked if a potential Texas state nuclear fund was influencing Entergy's accelerated consideration of new nuclear projects.

Answer

CFO Kimberly Fontan reiterated the expectation for ROEs to improve to a 9% to 9.5% range over the forecast period, consistent with prior guidance. CEO Andrew Marsh commented that a Texas nuclear fund would be an interesting risk management tool but is just one of many options being considered to de-risk potential new nuclear investments, alongside partnerships and customer agreements.

Julien Dumoulin-Smith inquired about the potential ownership structure for new nuclear projects, such as SMRs, and asked if more transformational large customer announcements could be expected given recent successes.

Answer

Executive Andrew Marsh indicated that direct ownership of new nuclear assets is the likely structure due to the scale and credit implications, though it presents challenges. He confirmed that more large customer deals are possible, noting that the multi-gigawatt opportunities discussed at Analyst Day were based on actual, ongoing customer conversations.

Julien Dumoulin-Smith from Jefferies asked if the large Indonesia order was a meaningful contributor to Q2 order intake, sought an update on the full-year outlook for China at the group level, and questioned if the 'Other' business segment could become structurally profitable.

Answer

CEO Roy Jakobs explained the multi-year Indonesia deal had a limited impact on Q2 order intake, with growth being broad-based and led by North America. He confirmed the China outlook remains consistent, with a negative first half turning positive in the second. CFO Charlotte Hanneman stated that the 'Other' segment's Q2 result was due to royalty income phasing and she does not foresee a meaningful shift toward structural profitability in the coming years.

Julien Dumoulin-Smith from Jefferies Financial Group Inc. asked if the large Indonesia order was fully included in Q2 order intake, inquired about the group-level sales momentum in China for H2, and questioned if the 'Other' business segment's adjusted EBITA could become structurally positive.

Answer

CEO Roy Jakobs explained that only a limited portion of the multi-year Indonesia deal was included in Q2 order intake, as per their stringent policy, and that order growth was broad-based. He reiterated that China was negative in H1 but will turn positive in H2, though the full-year plan still depends mainly on other regions. CFO Charlotte Hanneman stated that the 'Other' segment's Q2 benefit was due to royalty income phasing and that she does not see meaningful shifts in its overall performance in the years beyond 2025.

Julien Dumoulin-Smith of Jefferies inquired about the potential range for the liability cap in SB 897, the financing strategy for the remaining three settlement payments, and any outstanding obstacles to finalizing the settlement agreement.

Answer

President and CEO Scott W. Seu explained that SB 897 directs the PUC to establish a cap via a rulemaking process. Hawaiian Electric President and CEO Shelee Kimura added that past legislative discussions included figures from $500 million to $1 billion. Scott Seu reiterated that financing for future payments will be a combination of debt and equity, with specifics determined closer to the payment dates. CFO Scott DeGhetto outlined the remaining court approval steps, projecting a final hearing in Q1 2026. Scott Seu also clarified that securitization is for utility CapEx, not settlement funding.

Julien Dumoulin-Smith from Jefferies asked about the strategy for building stakeholder support for wildfire legislation, the prospects of achieving a securitization mechanism that satisfies rating agencies, and whether an equity raise is contemplated to fund the settlement.

Answer

President and CEO Scott W. Seu highlighted positive momentum in legislative discussions compared to the prior year, citing increased clarity from the settlement agreement. He noted a good understanding among lawmakers of securitization's benefits for customers. CFO Scott DeGhetto added that a legislative backstop fund would be credit positive but that it was too early to speculate on the outcome. DeGhetto also expressed strong confidence in capital markets access and explicitly stated that the company has no anticipated equity raises or use of its ATM facility planned.

Inquired about valuation expectations for the SIP transaction, specifically if the prior transaction's multiple is a fair baseline, and asked about the company's FFO-to-debt metric and its standing with Moody's.

Answer

The company believes SIP is more valuable today than in the past due to EBITDA growth and an expanded project pipeline, which should support the valuation. Management feels they are in 'good shape' with credit agencies, who understand the 12-18 month transaction plan, and that proceeds will improve the credit profile. The FFO-to-debt metric is consistent with year-end levels.

Representing Jefferies, Tanner asked about TransAlta's hedging strategy for future years given the current forward curve and requested an explanation of the quarterly free cash flow dynamics expected for the remainder of the year to meet guidance.

Answer

CEO John Kousinioris and EVP Blain van Melle detailed a proactive hedging strategy focused on locking in prices well above the forward curve, particularly through their C&I business, noting they are already significantly hedged for 2026 at approximately $68/MWh. Kousinioris affirmed confidence in meeting the full-year free cash flow guidance, citing the strong hedge book, cost controls, and expectations for more normal weather after a mild Q1.

Julien Dumoulin-Smith asked about the sustainability of ONE Gas's low O&M expense growth and inquired about the potential impact of Texas legislation HB4384 on the company's capital spending.

Answer

CFO Christopher Sighinolfi explained that while Q1 O&M performance was strong due to front-loaded in-sourcing benefits, the company maintains its 4% CAGR guidance, noting that 60% of O&M is labor-related. COO Curtis Dinan added that while the proposed Texas legislation would be a positive for cost recovery, it would not be significant enough to alter their disciplined capital allocation strategy.

Julien Dumoulin-Smith of Jefferies followed up on the data center opportunity, questioning the timing and its independence from the ongoing FERC 206 process, given the high probabilities cited. He also sought clarity on Exelon's role in 'assisting the industry' toward a resolution in the FERC proceeding and the potential timeline for a settlement.

Answer

CFO Jeanne Jones clarified that the entire data center pipeline is 'front of the meter' and not dependent on the FERC 206 co-location outcome, noting no slowdown in customer interest. She broke down the initial 16 GW opportunity into phases with high confidence. Colette Honorable, EVP and Chief External Affairs Officer, added that there is significant consensus in the FERC docket and that Exelon desires a quick decision for clarity, but remains open to participating constructively in any settlement discussions if directed by the commission.

Julien Dumoulin-Smith of Jefferies questioned the potential for settling outstanding FERC dockets related to PJM policy and asked how significant customer deposits from data centers are affecting the company's rate base.

Answer

CEO Calvin Butler and CFO Jeanne Jones responded that while they actively partner with stakeholders, the FERC 205 filings are primarily about seeking clarity and certainty on cost allocation for network load. Regarding data centers, Jones explained that customer deposits do reduce the near-term rate base (by about $400 million in 2024) but serve as a crucial signal of committed future load growth and investment needs, which are then incorporated into the long-range plan.

Julien Dumoulin-Smith from Jefferies LLC questioned how Exelon's plans would change if Maryland does not approve another multi-year rate plan. He also asked about the potential for the $9.7 billion transmission investment plan to increase, given drivers from PJM, MISO, and new load growth.

Answer

CEO Calvin Butler explained that while Exelon prefers the transparency of multi-year plans, the company is prepared to operate under traditional ratemaking in Maryland and would reallocate capital accordingly. CFO Jeanne Jones elaborated on the significant and growing need for transmission investment, driven by core reliability work, the changing generation mix including offshore wind, and substantial new load from data centers. She noted that potential opportunities from PJM and MISO are not yet included in the current plan.

Julien Dumoulin-Smith of Jefferies followed up on the data center timeline, asking about short-term power solutions, and sought clarification on the company's credit metric strategy with Moody's. He also asked if the strong Q1 performance was ahead of plan.

Answer

Chairman, President and CEO R. Trauschke explained that options for serving new data centers include short-term bridge solutions or utilizing the robust list of bids from the RFP, noting that data centers have a natural ramp-up period. CFO and Treasurer Charles Walworth clarified that their position with Moody's is that qualitative factors, like new legislation, should be considered in setting credit thresholds. He characterized the quarter as being 'on plan' but with a 'positive tone.'

Julien Dumoulin-Smith from Jefferies asked about the total potential procurement size of the current RFP, given the unanticipated data center load growth. He also questioned if a subsequent RFP would be needed and inquired about legislative progress on formula rates.

Answer

Chairman, President and CEO R. Trauschke avoided specifying a maximum RFP size to protect ongoing negotiations but noted they are managing capacity through efficiency programs, crypto load control, and existing facility upgrades. He acknowledged a new IRP and subsequent RFP is a 'very real situation' if load growth changes significantly. On legislation, he stated the educational objective for formula rates was met and the company will now pursue a filing directly with the commission.

Julien Dumoulin-Smith asked about the free cash flow guidance in light of the tariff impact and inquired about the cautious tone on onshore wind, seeking clarity on long-term trends given permitting delays.

Answer

CEO Scott Strazik addressed wind, stating that while the long-term potential is clear from the large project queue, near-term progress depends on permitting reform and tax incentive clarity. CFO Ken Parks explained that FCF and profitability are typically back-half weighted due to the timing of Power service outages, Wind turbine deliveries, and G&A savings.

Julien Dumoulin-Smith from Jefferies asked if the diversification of turbine sales beyond H-Class to F-Class and aeroderivatives could create volumetric upside beyond the stated '26-'27 capacity constraints.

Answer

CEO Scott Strazik confirmed the premise, noting that mature turbines like the F-Class are easier to manufacture and the supply base can ramp them faster. While this diversification provides more flexibility, he reiterated that the overall capacity outlook remains around 20 gigawatts annually by 2027, as the company must balance production with supply base capabilities.

Julien Dumoulin-Smith pivoted to the nuclear business, asking how GE Vernova frames the Small Modular Reactor (SMR) opportunity within its growth strategy and what initial expectations are for contract awards.

Answer

CEO Scott Strazik prioritized the near-term opportunity of upgrading the existing nuclear fleet. For SMRs, he noted accelerating commercial activity, particularly around adding them to existing nuclear sites. However, he clarified that SMRs will not become a financially meaningful part of the income statement until the first unit is commissioned in 2029, with significant revenue growth expected in the early 2030s.

Inquired about current origination trends, the dealer community's response to payment issues, potential for further cost-cutting, and the strategy for tapping into uncommitted cash flows (the 'piggy bank') to address upcoming debt maturities, including potential structures.

Answer

Management stated that dealers have been supportive and they expect originations to increase significantly once payments are caught up. They continue to seek cost savings. Regarding cash flows, they are working with JPMorgan to evaluate all options for addressing debt, noting that borrowing against their well-performing cash flows via the new loan facility was the most economic option to secure working capital.

Inquired about the progress towards the full-year cash generation target, the expected size of future private placements, the advantages of private versus public deals, and clarification on the term 'regular way refinancing' for upcoming debt maturities.

Answer

The company is off to a good start in Q4 with a $35M tax equity fund closing and is working on more securitizations, remaining nimble between private and public markets to get the best terms. The last private deal offered better pricing. For 2026 debt, the strategy is to demonstrate strong cash generation to support an 'ordinary course' refinancing, potentially combined with opportunistic debt paydowns, leveraging their growing $18.8B base of contracted cash flows.

Hannah Velasquez, on behalf of Julien Dumoulin-Smith of Jefferies, asked about the key drivers for reaching the high end of the 2025 EBITDA guidance and whether Ormat is seeing opportunities for higher PPA prices on repowering projects.

Answer

CFO Assaf Ginzburg explained that reaching the high end of the 2025 EBITDA range depends on lower-than-anticipated curtailments in the U.S. and Kenya and favorable weather, rather than contributions from new projects which are slated for late in the year. CEO Doron Blachar confirmed significant recontracting upside, citing the Mammoth G2 PPA repricing from below $70 to over $100/MWh and noting a willingness from hyperscalers to discuss price indexation.

On behalf of Julian Dumoulin-Smith, Brian Russo asked about Primoris's competitive position in the Texas gas-fired generation market, which end markets could drive performance beyond 2026 targets, and if shifting resources to solar is margin-accretive.

Answer

CEO Tom McCormick expressed high confidence in their Texas position due to deep internal expertise and a strong local craft labor presence, ensuring they will win a 'fair share' of the work. CFO Ken Dodgen identified Communications and Power Delivery as the segments with the most potential upside to exceed 2026 goals. CEO McCormick clarified that resources are shifted for specific, high-margin substation and interconnect scopes on solar projects, which is accretive.

Julien Dumoulin-Smith asked about the potential for regulatory lag during the current investment cycle, expectations for earned ROE, and how potential legislative outcomes in Missouri could impact the financial plan.

Answer

EVP & CFO Michael Moehn addressed regulatory lag by highlighting prudent project timing and strong O&M cost management, noting O&M was down $12 million year-over-year in Missouri. CEO Martin Lyons added that pending legislation, such as the PISA extension and Missouri First Transmission Act, is constructively supportive of investment and would help the company earn closer to its allowed return, creating a 'win-win' for customers and shareholders.

Julien Dumoulin-Smith asked if HASI will adopt a consistent annual cadence for rolling forward its multi-year guidance. He also sought clarity on whether Marc Pangburn's new strategic role focuses more on corporate strategy or investment strategy, and what the gross origination number could scale to by 2026-2027.

Answer

President and CEO Jeffrey Lipson noted the company has consistently provided multi-year guidance and that the new extension reflects confidence, but did not commit to a specific future cadence. He clarified the new strategy role is primarily focused on investment strategy. Chief Revenue & Strategy Officer Marc Pangburn added that the goal is to always increase investment activity, supported by a strong capital platform and team.

Represented by Hannah, Julien Dumoulin-Smith of Jefferies asked how HASI mitigates exposure to volatile RIN credit prices in its RNG projects. A second question sought an update on the KKR partnership, including any new projects funded and how they are reflected in financial statements.

Answer

President and CEO Jeffrey Lipson explained that HASI minimizes RIN risk by structuring its investments as senior debt with strong cash flow coverage. He also confirmed that additional investments were added to the KKR vehicle (CCH1) in Q3 and early Q4, stating the partnership is operating as planned and that more detailed disclosures will be provided as the vehicle scales.

Brian Russo, on behalf of Julien Dumoulin-Smith, asked about Black Hills' involvement and priorities in Colorado's wildfire mitigation legislation and requested the specific state locations for the 1 gigawatt of planned data center load.

Answer

SVP, Utilities Marne Jones detailed that while no bill has been introduced in Colorado, the company is actively working with peers on mitigating risk and establishing a standard of care, noting more aggressive legislative progress in South Dakota and Wyoming. President & CEO Linn Evans confirmed that the 1 gigawatt forecast is primarily for Wyoming, with other opportunities being explored in South Dakota and Colorado.

The analyst asked about the growth of run rate EBITDA from CapEx, the net impact of asset sales, future interest expenses and financing structures, and how portfolio reconstruction is reflected in the guidance.

Answer

Executives shifted focus from 'run rate' metrics to the 2026 free cash flow before growth figure ($600M-$700M) as the key metric for capital allocation. They clarified that repowering adds long-term NPV rather than immediate EBITDA, and that future refinancing will use straight debt to avoid equity dilution.

Asked about the company's strategy for safe-harboring assets to de-risk its development plans through 2027 and beyond, especially considering the upcoming election. Also inquired about potential data center or offtake opportunities at the Seabrook nuclear plant.

Answer

The company has fully de-risked its development program through 2029 via its safe harbor program and has secured critical supply chain components. The entire nuclear fleet, including Seabrook, is considered part of its data center strategy, allowing them to offer comprehensive and technology-agnostic energy solutions to customers.

Julien Dumoulin-Smith from Jefferies sought to understand the potential timing and scale of new data center load, contingent on legislative success, and the company's near-term capacity. He also inquired about the strategy for the electric Infrastructure Recovery Mechanism (IRM) and its impact on the frequency of future rate cases.

Answer

Chairman and CEO Gerardo Norcia clarified that DTE has hundreds of megawatts of available capacity it aims to secure in the near term, with longer-term opportunities requiring new generation builds. President and COO Joi Harris explained that while the IRM may not see significant expansion in this case, the supportive audit results will help make the case for growing it over time to reduce rate case frequency. Norcia added it will likely take several more rate cases to achieve this goal.

Asked for details on 2024 guidance drivers, including Vineyard Wind ITCs, the impact of the higher 2023 rate base, and O&M savings. Also inquired about the time horizon for the upcoming long-term outlook and the potential for a dividend increase.

Answer

The focus for Vineyard Wind is on project completion rather than a specific date, with 30% ITCs secured and more being pursued. The company is pleased with recent rate case outcomes in NY and Maine, which support organic growth. The 2024 focus is on achieving authorized ROEs and executing on major projects. The dividend policy remains focused on the current strong payout complemented by earnings growth, subject to board approval.

Asked about the rationale for the new compliance committee structure, its relation to the CFO's departure, the drivers of strong Q3 renewables results, and re-confirmed the timing of the expected asset sale gain.

Answer

The CEO explained the compliance change is a proactive enhancement to strengthen governance and is unrelated to the CFO's departure, which was for personal reasons. Strong renewables results were driven by favorable performance in the West, effective trading, and benefits from joining the CAISO EIM. The CEO reiterated that the asset sale gain is a 2023 guidance item and not needed for 2024.

Julien Dumoulin-Smith of Bank of America Corporation asked for quantification on how the higher interest rate environment is affecting prospective returns in counterparty conversations and sought clarity on the expected cadence of prefilings for new liquefaction projects.

Answer

EVP and CFO Zach Davis stated that Cheniere is insulated from these pressures for Stage 3 due to its lump-sum turnkey contract, which ensures double-digit unlevered returns. President and CEO Jack Fusco clarified that they expect overlap in permitting processes between the Corpus and Sabine sites, but not for multiple projects at a single site simultaneously.

Julien Dumoulin-Smith asked about the company's ability to reduce OpEx and SG&A in the current market, including deferring development spending. He also questioned if they would consider idling specific trains to optimize costs.

Answer

EVP & CFO Michael Wortley explained that while some discretionary spending has been deferred, O&M is relatively fixed, though variable cost savings from non-lifted cargoes largely offset lost revenue. President & CEO Jack Fusco added that SG&A is a small cost item that will naturally decrease with less travel. He confirmed they are conducting scenario planning but prefer to maintain operational flexibility for CMI.