Paul Fremont

Paul Fremont questioned the significant projected increase in adjusted gross margin from Full Circle Dairy and Noble projects between 2025 and 2026, asking if it would offset the absence of the RSAM benefit. He also sought quantification of the Production Tax Credit (PTC) benefit for 2026 and clarification on Florida's interim rate-setting process and the nature of new RNG projects.

Answer

Beth Cooper, Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Corporate Secretary, clarified that the gross margin growth is primarily from Marlin Gas Services, not just Full Circle Dairy and Noble, and that variable operating expenses would partially offset the gross margin uplift. She stated that PTC estimates are still being refined. Jeff Householder, Chair of the Board, President, and Chief Executive Officer, explained that Florida's interim rates are typically set 60 days post-filing based on existing rate base and ROE, and clarified that the new RNG projects are primarily transport services from landfills, not production facilities.

Paul Fremont inquired about the nature of three additional RNG projects that came online in 2025, specifically whether they are dairy-related or otherwise.

Answer

Jeff Householder, Chair of the Board, President, and Chief Executive Officer, clarified that these are essentially RNG transport projects from landfills, involving pipeline or Marlin Gas Services, rather than production facility investments.

Paul Fremont of Ladenburg Thalmann sought clarification on the procedural schedule for the Florida City Gas depreciation case, asking if a third-party consultant report from the commission staff was due the following week and what the company's expectations were for it.

Answer

EVP and General Counsel James Moriarty clarified that there was nothing scheduled with the commission for the following week. He reiterated that the commission staff has been supportive of the company's position, even opposing a motion to dismiss the case. He stated that the company expects the staff to make a recommendation in September and remains confident in a successful final outcome.

Paul Fremont questioned the potential timing for a settlement in the Florida City Gas depreciation case and inquired about Fitch's FFO-to-debt downgrade threshold and the company's internal credit metric targets.

Answer

President and CEO Jeffrey Householder suggested a settlement in the FGC depreciation case would likely occur in the late third or early fourth quarter. EVP and CFO Beth Cooper confirmed Fitch's downgrade consideration threshold is around a 4.8x FFO leverage ratio and that the company has established an internal credit metric dashboard, but is still evaluating whether to share those specific targets with investors.

Paul Fremont inquired about the company's regulatory actions preceding a potential Florida Supreme Court decision on the RSAM mechanism, the potential impact of federal political changes on pipeline and LNG investment opportunities, and whether the Phase 2 Maryland proceeding will address franchise unification.

Answer

Beth Cooper, EVP & CFO, and James Moriarty, EVP & General Counsel, explained they are closely monitoring the RSAM proceeding and have alternative strategies, such as a traditional depreciation study. Moriarty added that a Republican-controlled federal government could provide a 'wind at our backs' for the energy industry and confirmed the plan is for the Phase 2 Maryland proceeding to address the unification of the three franchises.

Paul Fremont asked for clarification on the 2029 earnings projection, specifically if a 15%-17% growth rate from the 2025 base would lead to an EPS range of $6.40-$6.80, and sought an update on the RUCO challenge to the Arizona Corporation Commission's policy statement on formula rates, including the Superior Court's decision to schedule a hearing.

Answer

Jay Foer, Senior Vice President and Chief Financial Officer and Treasurer, stated that while he couldn't provide precise guidance that far out, the 2029 projection would be the first full year of Great Basin in-service, and the 15%-17% growth rate depends on modeling construction spending and AFUDC. Justin Brown, President of Southwest Gas Corporation, reiterated that the company is not overly concerned about the RUCO challenge, viewing it as a normal procedural process, and believes there is strong precedent for the commission's exclusive jurisdiction over ratemaking. He clarified that the Superior Court initially denied the challenge on a technicality, but then allowed an appeal to be heard.

Paul Fremont asked for confirmation on his calculation of 2029 EPS, based on the 15%-17% growth rate through Great Basin's first full year of service. He also inquired about the update on the RUCO challenge to the Arizona Corporation Commission's policy statement, specifically regarding a scheduled hearing at a higher court level, and sought clarification on the Superior Court's decision to open up the case despite an initial technical denial.

Answer

Jay Foer, Senior Vice President and Chief Financial Officer and Treasurer, Southwest Gas Holdings, stated that while precise 2029 guidance cannot be given, the analyst's understanding of the run rate and 2029 as the first full in-service year is correct, with construction spending and AFUDC impacting the ramp-up. Justin Brown, President of Southwest Gas Corporation, expressed confidence in the commission's exclusive jurisdiction over ratemaking, viewing the RUCO challenge as part of the normal process and not overly concerning. Jay Foer clarified that the initial court ruling was a technical denial, which led to an appeal and the Superior Court granting an opportunity to be heard.

Paul Fremont asked about the company's timeline for finding a new CFO and who would perform the function after December 1st. He also inquired about the cash position, when it would be used for Great Basin construction, and whether the company would provide EPS guidance on the Q4 call now that Centuri is gone.

Answer

Karen Haller, CEO of Southwest Gas Holdings, stated that the board is conducting an internal and external search for a CFO without a specific timeline, emphasizing finding the right person, and assured that the CFO function would be covered by an interim or strong internal team. Rob Stefani, CFO of Southwest Gas Holdings, confirmed the cash is currently in short-term investments, earning short-term rates, and will be used for long-lead time deposits and construction as the Great Basin project refines. He also indicated an expectation to provide longer-term EPS guidance, incorporating potential opportunities, on the Q4 call.

Paul Fremont asked about the timeline for finding a new CFO and who would perform the function after December 1st, the company's cash position and when it would be used for Great Basin construction, and whether EPS guidance would be provided on the fourth quarter call now that Centuri is gone.

Answer

Karen Haller, CEO of Southwest Gas Holdings, stated there is no specific timeline for the CFO search, emphasizing finding the right person, and confirmed strong internal capabilities for interim duties. Rob Stefani, CFO of Southwest Gas Holdings, confirmed that the cash is currently in short-term investments earning interest and will be deployed as Great Basin construction ramps up, potentially for long-lead time deposits. Rob also confirmed the expectation to provide longer-term EPS guidance, incorporating potential opportunities, on the fourth quarter call.

Paul Fremont asked if the shift in CapEx from gas generation to renewables was driven by the expected supply for QTS or other factors. He also inquired why Alliant Energy's EPS growth rates were lower compared to peers with similar high rate-based growth of 12%.

Answer

Robert Durian (EVP and CFO, Alliant Energy) explained that the overall four-year capital plan remains consistent at $13.4 billion, with the shift being a repositioning between gas generation and renewables, and between Wisconsin and Iowa utilities, coinciding with the QTS relocation. He noted an opportunity to add cost-effective renewables through an RPU filing in Iowa and a shift from combined cycle gas to quicker simple cycle facilities for capacity needs. Lisa Barton (CEO, Alliant Energy) added that the absence of a litigated IRP process allows for flexible resource planning and speed to market. Robert Durian attributed the potentially lower EPS growth compared to peers to the level of dilution from equity needed to finance growth and the need to refinance current debt at potentially higher interest rates, which has been conservatively assumed in the plan.

Paul Fremont asked if the shift in capital expenditures from gas generation to renewables was driven by the expected supply for QTS or other factors. He also questioned why Alliant Energy's EPS growth rates might be lower compared to peers with similar high rate-based growth.

Answer

Robert Durian, Executive Vice President and CFO, explained that the capital plan remains consistent overall, with the shift primarily being a reallocation between gas and renewables, and between Wisconsin and Iowa utilities, coinciding with the QTS relocation. He noted an opportunity to add cost-effective renewables and a strategic shift to quicker simple cycle gas facilities. Lisa Barton, President and CEO, highlighted Alliant's flexible resource planning, which allows for speed to market. Mr. Durian attributed potential differences in EPS growth to dilution from equity financing for rate-based growth and conservative assumptions for refinancing existing low-interest debt.

Paul Fremont from Ladenburg Thalmann sought to confirm if the QTS opportunity is 750 megawatts or greater and asked if gas turbines are the most likely resource to supply this incremental load. He also inquired about the optimal timeframe for a potential settlement in the ongoing Wisconsin rate case.

Answer

President and CEO Lisa Barton confirmed that assessing the QTS opportunity as greater than 750 MW is a fair assessment. She stated that new supply would be a 'blend of resources' and an update would be provided in Q3. Executive VP and CFO Robert Durian addressed the rate case, agreeing that the optimal time for settlement discussions would be in the next month, between the filing of intervener testimony and the scheduled hearing.

Paul Fremont of Ladenburg Thalmann inquired if the Individual Customer Rate (ICR) structure in Wisconsin could enable a long-term rate stay-out similar to Iowa's. He also asked about the potential use of junior subordinated debt, the megawatt scale of future generation filings, and details on the Riverside enhancement project.

Answer

Executive Robert Durian explained that while Wisconsin's regulatory structure requires biennial rate cases, the company aims to achieve a similar outcome of flat base rates by growing its load and managing costs. He confirmed that junior subordinated debt is among the flexible financing options being considered. Regarding generation, he directed investors to supplemental slides for volume indications. He described the Riverside project as a "Black Start" facility with diesel/gas generators to enhance system reliability.

Paul Fremont asked if Alliant would consider implementing an Iowa-like regulatory structure in Wisconsin for large data centers. He also requested a description of the 'flexible rate tool' in proposed Iowa legislation and asked about the generation mix for the new capacity needed to serve growth.

Answer

President and CEO Lisa Barton stated there are no plans to change the Wisconsin structure, as its biennial forward-looking construct is already effective for managing growth. She clarified the 'flexible rate tool' refers to the Individual Customer Rate (ICR) construct from their recent settlement. EVP and CFO Robert Durian added that the new legislation would expand the ICR's applicability even further. Barton confirmed new generation will be an 'all of the above' mix, including natural gas.

Paul Fremont from Ladenburg Thalmann sought clarification on the company's load growth scenarios, the status of discussions for additional data center deals, and whether a regulatory plan similar to Iowa's could be filed in Wisconsin. He also asked about the potential use of junior subordinated debt to meet equity contribution needs.

Answer

President and CEO Lisa Barton confirmed the announced 1.1 GW data center project aligns with their 'mid-growth' scenario and reiterated a conservative stance on announcing new deals until all agreements are executed. She noted the Iowa regulatory solution was unique and a different approach would be evaluated for Wisconsin. CFO Robert Durian stated that junior subordinated debt is an option that will be evaluated in the latter half of 2025 for future financing needs.

Paul Fremont sought clarification on whether the gas plants on slide 21 are solely for regulated utilities, the timing and incremental nature of Southern Power's 700 MW upgrades/construction, the likely counterparties for Southern Power's contracts, and the regulatory approval process for additional generation.

Answer

CFO David P. Poroch confirmed that the gas plants on slide 21 are for regulated utilities. For Southern Power's 700 MW, he stated opportunities could arise as early as 2029, would be incremental to the current plan, and fully contracted consistent with their business model. Chairman, President, and CEO Christopher C. Womack confirmed contracts would be with creditworthy counterparties, likely co-ops or other power companies. Mr. Poroch added that additional generation would be subject to regulatory review, with proceedings for Alabama and Georgia expected to conclude in 2027.

Paul Fremont sought clarification on whether the gas plants on slide 21 are solely for regulated utilities, the timing and incremental nature of Southern Power's 700 MW upgrades, and the likely counterparties for these contracts. He also asked about regulatory approval for additional generation and the upcoming commission seat election.

Answer

Christopher C. Womack, Chairman, President and CEO, and David P. Poroch, CFO, confirmed that the gas plants on slide 21 are for regulated utilities. They stated that Southern Power's 700 MW upgrades could come as early as 2029, would be incremental to the plan, and fully contracted, most likely with co-ops and other power companies. Poroch noted that additional generation would be subject to review, with proceedings expected to conclude in 2027. Womack declined to comment on political prognostications.

Paul Fremont asked about the practicality of restarting the V.C. Summer nuclear project, the geographic strategy for new gas plants, and the possibility of a Southern Power spin-off.

Answer

CEO Chris Womack definitively ruled out any involvement in the V.C. Summer project, stating, 'Not Southern Power.' CFO Dan Tucker explained that new gas plant construction would target markets with favorable designs for bilateral contracts, not necessarily near its gas LDCs. Regarding a spin-off, Tucker said it's not in the current plans, emphasizing, 'we're gratified to have held on to this business' and 'we love it as a complement to our portfolio.'

Paul Fremont inquired if Southern Company would consider adding new fossil generation at Southern Power, how the costs for new committed load would be allocated to customers, and whether the SONAT pipeline expansion would face significant legal challenges.

Answer

CEO Chris Womack and CFO Dan Tucker reiterated that any new fossil generation at Southern Power must fit their disciplined, de-risked model. Tucker confirmed that substantially all of the new load costs would be paid by the specific customers, benefiting the existing customer base. He also noted the SONAT expansion is greatly de-risked as it is 90% brownfield work, reducing susceptibility to legal fights.

Paul Fremont asked about Evergy's typical industrial rate per megawatt-hour, the sufficiency of cancellation fees to recoup costs in case of early termination, the nature of the late-stage negotiation contract (new vs. expansion), and the relative size of the four signed ESAs.

Answer

David Campbell, Chairman, President, and CEO, Evergy, stated that the typical industrial rate is around 6-7 cents per kilowatt-hour ($60-$70 per megawatt-hour), with LLPS rates being a 15%-20% premium on the demand charge. He confirmed that LLPS provisions ensure counterparties are responsible for minimum bills through the contract term, providing strong protection. The late-stage negotiation could be either a new customer or an expansion. David Campbell noted that the total steady-state peak demand for the four ESAs is 1.9 GW but declined to disclose individual customer sizes.

Paul Fremont asked about Evergy's typical industrial rate in dollars per megawatt-hour, the sufficiency of cancellation fees under LLPS tariffs to recoup costs, whether the late-stage negotiation contract is for a new or existing customer, and if the four signed ESAs are roughly equivalent in megawatt size.

Answer

David Campbell and Chuck Caisley stated the typical industrial rate is 6-7 cents per kilowatt-hour ($60-$70 per megawatt-hour), with LLPS rates being a 15%-20% premium on demand charges. David Campbell confirmed that cancellation fees cover remaining minimum bills, providing strong protection, and that the late-stage contract could be for either a new or existing customer. He declined to disclose individual ESA sizes but noted the total steady-state demand is 1.9 GW.

Paul Fremont asked about the typical size of data center developments in Evergy's service territory, at what point new generation would be required given the various customer categories, and an estimate for future regulatory lag considering recent legislative and regulatory changes.

Answer

David Campbell, Chairman and CEO, Evergy, indicated that three large customers in the 'finalizing agreements' category represent 1.5-2 gigawatts, suggesting an average size of 600-700 MW per customer, which is still very large, and noted a preference for diversification. He stated that new generation needs would be a key driver for the upcoming plan update, with the 2025 IRP already identifying significant incremental generation for 'finalizing agreements' customers. Bryan Buckler, EVP and CFO, Evergy, explained that while no exact number for regulatory lag was provided, PISA and CWIP legislation, combined with unprecedented load growth, should help bridge the gap to authorized ROEs.

Paul Fremont asked about the typical demand size of Evergy's largest data center developments, the point at which new generation would be required based on the various load growth categories, and an estimate for future regulatory lag considering recent legislative and regulatory changes.

Answer

David Campbell, Chairman and CEO, Evergy, indicated that three customers in the 'finalizing agreements' category represent 1.5-2 GW, suggesting an average size of 600-700 MW, which is still very large. He explained that the 2025 IRP already factored in significant incremental generation for customers in the 'finalizing agreements' category, with the upcoming capital plan update to detail the generation mix. Bryan Buckler, EVP and CFO, Evergy, noted that PISA, CWIP, and unprecedented load growth are expected to help bridge the gap between earned and authorized ROEs, with more details on regulatory lag to follow in February.

Paul Fremont of Ladenburg Thalmann asked if successfully securing the 500 to 1,000 MW of load currently under advanced negotiation would be sufficient to push Evergy's EPS growth rate above the 6% long-term target.

Answer

Chairman and CEO David Campbell reiterated the company's high confidence in its existing plan, which is based on the three already announced customers. He described any additional loads as "incremental tailwinds" but declined to quantify the precise impact on the growth rate, stating it would depend on the specifics of the deals.

Paul Fremont asked if diversification of state regulatory risk played a role in the acquisition decision, whether the establishment of a holding company could lead to less equity issuance, if consolidated or equity accounting would be used for the Washington utility, the most recent PacifiCorp Washington rate base, and the percentage of high wildfire risk properties in the Washington territory compared to Oregon.

Answer

Maria Pope (President and CEO) confirmed that regulatory diversification is a beneficial factor. Joseph Trpik (SVP of Finance and CFO) stated that the holding company would provide flexibility for a differing capital structure, potentially influencing the mix of debt and equity. He also indicated that consolidated accounting is the current expectation for the Washington utility. Maria Pope stated the most recent PacifiCorp Washington rate base was $1.4 billion as of the end of 2025. She added that the percentage of high wildfire risk properties in Washington is similar to Oregon, around 2% or 20 distribution miles, with much of the higher risk areas being uninhabited.

Paul Fremont asked if diversification of state regulatory risk played a role in the acquisition decision, whether the establishment of a holding company could lead to less equity issuance for financing, if consolidated or equity accounting would be used for the Washington utility, the most recent PacifiCorp Washington rate base, and the percentage of high wildfire risk properties in the Washington territory compared to Oregon.

Answer

Maria Pope (President and CEO, Portland General Electric) confirmed that operating in two different jurisdictions provides beneficial diversification and economies of scale. Joseph Trpik (SVP of Finance and CFO, Portland General Electric) agreed that the holding company offers flexibility for a differing capital structure, potentially leading to less equity. He expects consolidated accounting for the Washington utility. Maria Pope stated the most recent PacifiCorp Washington rate base was $1.4 billion as of the end of 2025. She also noted that the percentage of high wildfire risk properties in Washington is similar to Oregon, around 2% or 20 distribution miles, with much of the high-risk area being uninhabited.

Paul Fremont sought details on the proposed wildfire legislation, asking if it would mirror California's AB 1054, what the potential size of a backstop fund might be, and how the limits on liability would be structured.

Answer

President and CEO Maria Pope explained they are looking at a combination of best practices from Utah, California, and other western states, rather than replicating a single model. She stated that no number has been determined for the fund, as it depends on first establishing standards of care and limitations on liability. She noted that Oregon already has a negligence standard in state law that they are working with.

Paul Fremont asked about shifts in the 2024 capital plan, the timeline for executing RFP contracts, alternative methods for reducing equity needs, the possibility of a minority stake sale under a holding company structure, the viability of partial rate case settlements, and a potential update to the EPS growth base year.

Answer

SVP & CFO Joe Trpik explained CapEx shifts were due to timing with no substantive change to the plan and that build-transfer RFP contracts would likely be executed in H2 2025. He noted that while other financing options are being evaluated, the immediate focus is on wildfire risk. President & CEO Maria Pope confirmed partial settlements are possible but may not be achievable in this case. Trpik added that an EPS base year update would be considered after a period of demonstrated execution.

Paul Fremont from Ladenburg Thalmann asked about the South Dakota plant's commercial operation date and turbine procurement, potential changes in environmental upgrade investments at Colstrip if EPA's endangerment finding is reversed, and updates on the remaining Colstrip ownership interests.

Answer

Brian Bird (President and CEO, NorthWestern Energy) stated that the 131 MW South Dakota plant is expected to be completed in 2030, with approximately one-third of the investment in turbines made in 2026. Regarding Colstrip, he indicated the company would do what is necessary to keep it economic, potentially investing in a gas plant if forced to make environmental upgrades sooner than planned, aiming for operation into the 2040s. Crystal Lail (CFO, NorthWestern Energy) clarified that the current five-year capital plan includes only maintenance CapEx for Colstrip, not material environmental upgrades. Brian Bird also mentioned awaiting EPA rules on environmental regulations and expressed satisfaction with the current 55% ownership of Colstrip, noting that other partners facing divestment would be in a 'tough spot' regarding operating costs.

Paul Fremont from Ladenburg Thalmann & Co. Inc. inquired about the South Dakota plant's turbine queue and commercial operation date. He also asked how a potential EPA endangerment finding reversal might impact environmental upgrade investments at Colstrip, for an update on environmental rules, and about the status of remaining Colstrip ownership interests and how operating costs would be handled if other owners were forced to exit.

Answer

President and CEO Brian Bird stated that turbines for the 131 MW South Dakota plant are being purchased, with a third of the investment in 2026, and the plant is expected to be completed in 2030. Regarding Colstrip, he noted that the company would adapt to EPA rules to keep the plant economic, potentially investing in environmental controls or a gas plant if forced to act sooner. CFO Crystal Lail clarified that the current five-year capital plan includes only maintenance CapEx for Colstrip, not material environmental upgrades. Brian Bird added that the company is happy with its 55% Colstrip ownership and that other partners forced to exit would be in a "tough spot" regarding their share of operating costs.

Paul Fremont inquired about NiSource's plans for financial reporting of the GenCo segment, specifically whether it would be presented as a new, separate segment alongside Columbia Gas, NIPSCO, and corporate/other, and the anticipated timing and detail level of such disclosure.

Answer

EVP and CFO Shawn Anderson confirmed that NiSource anticipates bringing GenCo out as its own segment as it becomes more material, expecting to provide incremental disclosure around it in the 2026 fiscal results. He indicated that the exact timing and the level of detail (e.g., full income statement) are still being finalized but will be communicated.

Paul Fremont asked about the financial reporting structure for GenCo, specifically if it will be presented as a fourth segment and when this change might occur. He also inquired if the disclosure would include a full or partial income statement.

Answer

EVP and CFO Shawn Anderson stated that as GenCo becomes more material, NiSource anticipates bringing it out as its own segment, expecting to provide incremental disclosure in 2026 fiscal results. He did not disclose the exact timing within 2026 or whether it would be a full or partial income statement, but committed to providing updates.

Paul Fremont from Ladenburg Thalmann & Co. Inc. asked about the allocation of the $7 billion CapEx between GenCo and NIPSCO, the breakdown of pure generation versus transmission/distribution spend, the cost per kW for CCGT and battery, the relationship between the 6-8% and 8-9% EPS growth rates, the load associated with GenCo EPS, and whether a return sharing mechanism was contemplated.

Answer

Shawn Anderson, EVP and CFO, stated that for guidance, all related spending is segmented into GenCo, with the majority being pure generation, but specific breakdowns and cost per kW are competitive information. He clarified that the 6-8% CAGR is for the base utility plan, while 8-9% is for the consolidated business including GenCo. Lloyd Yates, CEO and President, confirmed there is no sharing of returns, but a flowback mechanism of over $1 billion to retail customers is included.

Paul Fremont from Ladenburg Thalmann & Co. Inc. asked if the $7 billion capital expenditure (CapEx) includes transmission/distribution spending at both Genco and NIPSCO, and how much of it is pure generation spend. He also sought clarification on the relationship between the 8%-9% consolidated adjusted EPS CAGR and the 6%-8% base plan growth, and inquired about load data for the new customer's EPS points. Finally, he asked if the Genco approval included a return-sharing mechanism with interveners.

Answer

CFO Shawn Anderson clarified that while segmented to Genco for guidance, some spending occurs at NIPSCO, with generation being the majority of the $7 billion CapEx (though specific breakdown wasn't provided). He confirmed the 6%-8% is for the base plan, and 8%-9% is the consolidated CAGR including Genco. He stated that load data for EPS points could not be provided. CEO Lloyd Yates confirmed that the contract includes a flowback mechanism of over $1 billion to retail customers but no sharing of returns.

Paul Fremont from Ladenburg asked if the Microsoft announcement replaces the canceled Caledonia project, about the economics of new build versus recontracting for the Point Beach PPA, and the potential use of retired coal plant sites for new generation builds.

Answer

Scott Lauber, CEO of WEC Energy Group, clarified that Microsoft's current land purchases predate the Caledonia cancellation, and they are still seeking additional land. He suggested that new build generation for Point Beach might be more economical than recontracting due to high PPA prices, but analysis is pending. Mr. Lauber noted that retired coal plant sites are currently used for economic development, and new generation sites would consider natural gas line access.

Paul Fremont asked if the latest Microsoft announcement replaces the canceled Caledonia project or if additional land is still being sought for that. He also questioned why the company wouldn't opt for new generation build over recontracting for Point Beach PPA given the high current pricing, and if retired coal plant sites could be used for new builds.

Answer

CEO Scott Lauber clarified that the current Microsoft land was acquired before the Caledonia cancellation, and they are still seeking additional land to replace the Caledonia project. He agreed that new build might be more economical than recontracting for Point Beach PPA if prices remain high, but analysis is needed. Mr. Lauber noted that previously retired coal plant sites are already repurposed for economic development, and new build locations would prioritize natural gas line access and capacity.

Paul Fremont followed up on the Microsoft project, asking if construction had begun on its other land parcels beyond the main site and if Microsoft had provided any updates on the development 'pause' mentioned earlier in the year.

Answer

President and CEO Scott Lauber responded that he has not seen construction on Microsoft's other sites, as activity is concentrated on the main 1,300-acre parcel. He added that Microsoft has not mentioned a 'pause' in their discussions and that based on the ongoing site work and forecasts provided, he has confidence in the project's progression.

Paul Fremont asked about the company's continued optimism regarding completing the storage asset sale by the end of the quarter and how recent financing rates and preferred stock redemption compare to initial guidance assumptions.

Answer

President and CEO Scott Doyle reiterated strong interest in the storage assets and the focus on achieving good value, which extended the process, but expressed confidence in the current stage. Executive Vice President and CFO Adam Woodard clarified that the preferred stock redemption was already factored into the guidance, and acquisition financing rates are largely in line with expectations.

Paul Fremont questioned if the 2028 future test year rate adjustment in Missouri could lead to earnings growth outside the 5-7% range due to improved ROE. He also sought an update on the confidence level for the storage asset sale, its potential impact on the equity and debt balance, and clarification on alternative equity-like financing options beyond common shares.

Answer

President and CEO Scott Doyle addressed the 2028 future test year rate adjustment, indicating potential ROE improvement but cautioning against specific predictions given the early stage of the process. He confirmed strong interest in the storage asset sale, with an announcement targeted by calendar year-end, and stated that the sale's impact on the equity and debt balance would be detailed upon conclusion. He also clarified that equity needs could be met through various equity-linked securities, hybrids, or junior subordinated debt.

Paul Fremont questioned whether Fiscal Year 2028 could exceed the 5-7% growth range due to the future test year rate adjustment in Missouri and the potential for narrowing under-earning. He also sought clarification on Spire's confidence in selling its storage assets, the impact of a potential sale on the equity and debt balance, and specific types of securities that would fulfill equity needs if not straight equity.

Answer

Scott Doyle, President and CEO of Spire, explained that while pivoting to a future test year in Missouri would bring forward capital, it's premature to quantify the exact impact on FY2028, though a more fully earned ROE is generally implied. He confirmed the storage asset sale evaluation is ongoing with strong interest, targeting an announcement by calendar year-end, but deferred comment on its impact on the financing mix until conclusion. Mr. Doyle indicated that equity needs could be met through equity-linked securities, hybrids, or junior subordinated debt.

Paul Fremont asked if fiscal year 2026 would be the first year for collecting 45Z credits and if a negative credit score was used in calculating future 45Z credits.

Answer

CEO Robert Flexon confirmed that 2026 would be the first year for 45Z credits. He stated they would need to follow up on the question regarding the negative credit score calculation.

Paul Fremont inquired if UGI was using a negative credit score in its calculation of 45Z credits for future periods.

Answer

Robert Flexon, President and CEO, stated that the company would need to follow up with the analyst on that specific detail.

Paul Fremont asked about the expected timing for the company to provide its 2026 earnings guidance, considering the ongoing rate case.

Answer

CFO Andrew Cooper explained that with the procedural schedule now established for the rate case, the company expects to be in a position to provide 2026 earnings guidance. He stated this would likely occur on the third quarter 2025 earnings call, in line with their typical cadence.

Paul Fremont from Ladenburg Thalmann asked whether a potential relationship with the data center developer CoreWeave would be with the utility or PSEG Power. He also inquired about the size of an existing cogeneration facility at a site CoreWeave purchased.

Answer

Chair, President & CEO Ralph LaRossa clarified that the only publicly discussed relationship with CoreWeave is with the utility for service connections. He stated that questions about the cogeneration facility's size and future use were best directed to CoreWeave's site management, though he recalled its nameplate capacity was under 100 MW.

Paul Fremont of Ladenburg Thalmann asked for clarification on a reported $18 billion wildfire fund replenishment plan from the governor's office and how the portion allocated to utilities would be determined.

Answer

CEO Patti Poppe cautioned against relying on press reports, emphasizing that the details of any plan are what matter. She reiterated that PG&E is focused on a holistic package that ensures fund durability, customer affordability, and investor attractiveness. She declined to speculate on behalf of the legislature regarding how any potential costs would be allocated among the utilities.

Paul Fremont of Ladenburg Thalmann asked about a reported $18 billion wildfire fund replenishment plan from the governor's office, inquiring if this represents the entire plan and how the IOU portion might be allocated.

Answer

CEO Patti Poppe advised against relying on press reports, stating the 'devil's in the details' and the legislative process must unfold. She declined to speculate on allocation specifics but reiterated that any solution must be a holistic package that ensures fund durability, customer affordability, and investor attractiveness.

Paul Fremont of Ladenburg Thalmann confirmed that the upcoming plan refresh would include updated EPS guidance, asked about the rate base of the Ohio subsidiary, and questioned if the previously mentioned $1 billion in potential Texas gas spend is in the current plan.

Answer

CEO Jason Wells confirmed the plan refresh later in Q3 will be a comprehensive financial update including CapEx, financing, and earnings. EVP & CFO Christopher Foster stated the Ohio subsidiary's rate base was $1.5 billion as of year-end 2024. Foster also clarified that the opportunity for a large, high-pressure gas distribution line in Houston is mostly outside the existing plan, representing future incremental potential.

Paul Fremont of Ladenburg Thalmann & Co. asked if the upcoming plan refresh will include new EPS guidance, the rate base of the Ohio LDC, and whether the potential $1 billion in Texas gas spend is part of the recent CapEx increases.

Answer

CEO Jason Wells confirmed the upcoming refresh will be a comprehensive update including CapEx, financing, and the company's earnings power. CFO Chris Foster stated the Ohio LDC rate base was $1.5 billion at the end of last year. Foster clarified that the large, high-pressure Texas gas distribution project is an opportunity mostly outside the current plan, with only a small amount included at this stage.

Paul Fremont sought clarification on whether ONE Gas expects full-year O&M expense growth to be closer to the low Q1 rate of 2% or the guided 4% CAGR.

Answer

CEO Robert McAnnally affirmed the company is maintaining its 4% O&M CAGR guidance for the full year. He stated this figure appropriately accounts for known employee cost increases and planned investments in further efficiencies, and while the company always strives to do better, the 4% guidance remains the confident projection.

Paul Fremont of Ladenburg Thalmann inquired where the company expects to finish within its 2025 EPS guidance range and asked if potential Texas transmission system decisions by ERCOT would impact its opportunities for data center development.

Answer

SVP and CFO Christopher Sighinolfi responded that while not providing a specific point estimate, the company has a history of meeting or exceeding the midpoint of its year-ahead guidance for 11 consecutive years. SVP and COO Curtis Dinan clarified that the gas generation opportunities ONE Gas is pursuing are independent of and not contingent on the upcoming ERCOT transmission decisions.

Paul Fremont of Ladenburg Thalmann inquired about the timing for ONE Gas's 2025 guidance, the future trajectory of O&M expenses, and the rate case filing cadence for Oklahoma and Kansas.

Answer

President and CEO Robert McAnally confirmed that 2025 guidance will be issued before the December utility meetings, consistent with prior years. SVP and CFO Christopher Sighinolfi affirmed the expectation for a moderating O&M expense growth rate. SVP and COO Curtis Dinan detailed the regulatory schedule, noting an Oklahoma rate case is due by mid-2027 with interim filings, while Kansas will see annual GSRS filings following its recent rate case.

Paul Fremont asked for the current cost estimate for the 800-megawatt Castle Bluff gas plant and inquired about the potential cost and procurement timeline for any additional gas-fired generation.

Answer

Michael Moehn, Senior Executive VP and CFO, confirmed the cost estimate for the Castle Bluff plant remains approximately $900 million. For future generation, he noted that turbines for the next 800-megawatt plant have also been secured. For the subsequent combined-cycle plant planned for the 2032 timeframe, the company is in an active RFP process and expects to have contracts locked down by the end of the year to manage costs and timelines in a tight market.

Paul Fremont requested the specific load associated with the three newly announced industrial customers, details on the proposed Texas transmission line, and its projected completion date.

Answer

CEO Drew Marsh explained that he could not disclose specific customer load information due to confidentiality. He described the Texas transmission project as a 500 kV line, 130-160 miles long, which will enhance resilience. He projected its completion date to be in 2029, just outside the current outlook period.

Paul Fremont asked about the ROE assumption in the California cost of capital proceeding, potential legislative alternatives to replenishing the state's wildfire fund, and the reason for higher parent-level costs appearing to offset gains at Sempra Texas in 2026.

Answer

CEO Jeffery Martin replied that the plan assumes a similar ROE but sees potential for upside. On the wildfire fund, he mentioned ideas like extending it or including other utilities but did not forecast an outcome. He clarified that parent-level costs are driven by the overall corporate financing strategy for the entire capital plan and are not directly tied to offsetting earnings from any single business unit, as the goal is to fund growth in the most efficient manner possible.

Paul Fremont sought specifics on the Stillwater data center project, including its required generation capacity, and asked for the expected timing of the Oklahoma Corporation Commission's decision on the rate case settlement. He also inquired about the potential equity financing mix for any future incremental CapEx.

Answer

R. Trauschke, Chairman, President and CEO, declined to provide details on the data center project due to confidentiality. He reiterated his expectation for a regulatory decision on the rate case settlement by year-end. Regarding financing, he stated it's premature to discuss specifics but emphasized that maintaining a strong balance sheet and a ~17% FFO-to-debt ratio is a key priority.

Paul Fremont asked about the specific procedural steps for withdrawing the ESP V filing at the PUCO, whether the process would involve hearings, and if the cited precedent case was contested by interveners.

Answer

Executive Jon Taylor outlined the procedural precedent from a 2019 Dayton Power & Light case, which involved filing an application and receiving comments, with a commission order issued within a month without hearings. Executive Brian Tierney added that the ability to withdraw is codified in Ohio law, providing a clear path for approval.

Paul Fremont from Ladenburg Thalmann questioned whether the anticipated 45Z tax credits for the RNG business would cause the non-regulated earnings contribution to exceed its target range. He also asked if the company is tracking toward the high end of its 2024 guidance, given its strong performance.

Answer

EVP and CFO David Ruud deferred detailed guidance on the 45Z impact and earnings mix to the Q4 call, but noted the credits provide favorable flexibility for hitting EPS growth targets from 2025-2027. Regarding 2024 guidance, he reiterated that the company expects to land within its stated range, citing the reversal of tax timing and a focus on positioning for 2025 as key factors.