Paul Zimbardo

Paul Zimbardo inquired about Spire's long-term growth rate, expectations for improved earned ROEs, and the growth profile of the gas marketing and midstream segments.

Answer

President and CEO Scott Doyle clarified the long-term growth rate, noting a step-up in Missouri's earned ROEs due to capital integration, with Alabama's ROEs near allowed levels. He explained that midstream is included in the next year's guidance but storage is excluded for FY2027, and gas marketing is rebased annually. He also addressed the FFO to debt target, stating expectations for a steady movement into the middle of the threshold bands, driven by Missouri recoveries and credit-positive financing for the Tennessee acquisition.

Paul Zimbardo inquired about the generic opportunity for uprates, specifically referencing the 340 megawatts at Limerick and asking if more 'Limericks' exist. He also sought an update on the transmission interconnection process for Limerick, given public disclosures about a potential data center there. Additionally, he asked if future efforts would prioritize uprate sites due to their economic merits compared to new nuclear construction.

Answer

President and CEO Joe Dominguez clarified that Constellation has identified about 900-1,000 megawatts of uprates, with LaSalle and Limerick being large chunky ones, and Calvert Cliffs contributing 190 megawatts, all with completed engineering work. He noted strong demand in the Limerick area, making new megawatts there likely welcomed and easy to interconnect, but declined to comment on specific data center interconnections. Mr. Dominguez agreed on the economic merits of uprates, highlighting that they are great investments, additional, within Constellation's expertise, and do not add O&M or fuel costs, making their capital numbers very attractive compared to new plants. He emphasized that uprates are not binary to other initiatives and are a strong focus.

Paul Zimbardo (referred to as Julian by management) inquired about the generic opportunity for uprates, specifically their cost relative to the 340 MW at Limerick, and whether more SMR-sized uprates exist. He also asked about the transmission interconnection process at Limerick and potential data center developments there. Additionally, he questioned if Constellation's next efforts would prioritize leveraging uprate sites for additionality and contracting, given their materially cheaper cost compared to new nuclear.

Answer

President and CEO Joe Dominguez confirmed that Constellation has identified approximately 900-1,000 MW of additional uprate potential, including significant projects at LaSalle, Limerick, and Calvert Cliffs, with engineering work completed. He noted strong demand in the Limerick area, suggesting new megawatts would be welcomed and easily interconnected, but declined to comment on specific data center interconnections. Mr. Dominguez agreed that uprates are excellent investments due to their additionality, alignment with Constellation's expertise, and community acceptance. He highlighted their attractive economics, as they increase output without adding O&M costs for people or fuel, making direct capital cost comparisons to new plants challenging due to the significant O&M component of new nuclear.

Paul Zimbardo asked if management's comment about possessing material nonpublic information (MNPI) implies a data center deal could be announced soon, possibly within the next quarter. He also inquired about the current timeline for interconnection studies with PJM utilities.

Answer

President and CEO Joe Dominguez declined to provide a specific timeline for a deal announcement, stating only that discussions are at a 'very good stage.' Regarding interconnections, he noted that timelines have improved significantly, with some studies being completed in about seven months, which is no longer seen as a primary constraint.

Paul Zimbardo asked about Constellation's state-level legislative priorities to support its colocation strategy and requested an estimate of the potential ratepayer savings from a hypothetical 1-gigawatt colocation project.

Answer

CEO Joseph Dominguez explained that the company's legislative approach is largely reactive, focused on ensuring all economic growth options remain available rather than proactively launching new legislation. Regarding ratepayer benefits, he did not provide a specific dollar estimate but highlighted that colocation avoids potentially billions in socialized grid upgrade costs that would be required to connect a large data center to the grid, as the data center customer pays for the direct connection.

Paul Zimbardo asked about Evergy's priorities for the 2026 Missouri legislative session and how potential efforts might influence the rate case cadence, as well as the expected cadence (linear vs. accelerating) for the upcoming comprehensive financial outlook refresh.

Answer

David Campbell, Chairman and CEO, Evergy, indicated that after a busy and consequential 2025 session focused on SB4 implementation, the 2026 legislative calendar might be lighter, with efforts centered on advancing constructive mechanisms. Regarding the financial outlook, David Campbell and Bryan Buckler, EVP and CFO, Evergy, declined to provide specific profile details before the year-end update but highlighted strong tailwinds for growth and reaffirmed confidence in the top half of 2026 EPS growth.

Paul Zimbardo inquired about Evergy's legislative priorities for the 2026 Missouri session, potential impacts on rate case cadence, and the expected profile of the upcoming capital plan refresh, specifically if growth would be linear or accelerating towards the end of the decade.

Answer

David Campbell, Chairman and CEO, Evergy, indicated a potentially lighter legislative calendar in Missouri for 2026, focusing on implementing SB4. Regarding the capital plan, he highlighted significant tailwinds for growth and reaffirmed confidence in achieving the top half of 2026 EPS growth, deferring detailed profile specifics to the year-end update.

Paul Zimbardo asked about the linearity of the growth rate in PPL's plan following the Kentucky rate case stipulation and Pennsylvania rate case filing, questioning if growth might be more front-end loaded. He also inquired about the amount of megawatts to be included in the new capital plan roll forward for Kentucky load, specifically referencing the 2.8 GW versus the 1.8 GW from the CPCN.

Answer

EVP and CFO Joe Bergstein stated he did not necessarily see the growth as front-end loaded, citing significant capital investment throughout the plan and rider recovery mechanisms. Regarding Kentucky load, Mr. Bergstein explained that PPL continues to assess the additional load and its probability, which would drive further generation investment. President and CEO Vince Sorgi added that the team is closely monitoring the 2.8 GW probability-weighted forecast, noting that if additional generation is needed, the delayed battery project might be the first to be reactivated for quick peaking support.

Paul Zimbardo asked about the linearity of PPL's growth rate, considering the timing of rate case outcomes in Kentucky (2026) and Pennsylvania (2027). He also inquired about the amount of additional megawatts from Kentucky's economic development pipeline that might be included in future capital plans, specifically the 1 GW beyond the 1.8 GW in the CPCN.

Answer

EVP and CFO Joe Bergstein stated that the growth is not necessarily front-end loaded, citing significant ongoing capital investment and rider recovery mechanisms. President and CEO Vince Sorgi added that the team is closely monitoring the 2.8 GW probability-weighted forecast in Kentucky, assessing when projects materialize to address additional generation needs. He suggested the delayed battery project might be the first to be reactivated if additional generation is required, given its quick build potential.

Paul Zimbardo questioned the expected timing for tangible progress on the Blackstone JV, such as signed ESAs or turbine orders, and requested an update on Kentucky's incremental generation needs following the recent CPCN stipulation and increased load forecasts.

Answer

President & CEO Vincent Sorgi stated that PPL is taking a disciplined approach and will not make significant financial commitments for the JV, like turbine deposits, until ESAs are further along. He avoided setting a specific timeline, noting it depends on negotiations with hyperscalers. Regarding Kentucky, Sorgi confirmed that if the newly forecasted 700 MW of additional load materializes, PPL would likely need to refile for at least the 400 MW battery project and potentially more generation in the future.

Paul Zimbardo questioned the expected timing for tangible progress on the Blackstone JV, such as signed ESAs or turbine orders, and asked for an update on Kentucky's incremental generation needs following the recent CPCN stipulation and higher load forecasts.

Answer

President & CEO Vincent Sorgi responded that PPL is taking a disciplined approach and will not make significant financial commitments on turbines without being further along on Energy Services Agreements (ESAs). He avoided setting a specific timeline, noting it depends on negotiations with hyperscalers. Regarding Kentucky, Sorgi explained that with the Mill Creek II life extension and an updated forecast showing 700 MW of additional load, PPL would likely need to refile for the previously deferred 400 MW battery project or more if the load materializes.

Paul Zimbardo asked for perspective on a recent coal-related executive order in Kentucky and whether it could alter the timing for PPL's planned retirement of its Mill Creek 2 unit. He also sought confirmation that the company remains comfortable with its overall capital plan and financial outlook.

Answer

CEO Vincent Sorgi stated he does not expect the executive order to have an immediate impact. He explained that the retirement of Mill Creek 2 is currently tied to the air permit for a new combined cycle unit. However, given the significant demand growth from data centers, PPL is analyzing the possibility of delaying the retirement to ensure resource adequacy, a decision that will be discussed during the CPCN process. He affirmed that PPL feels good about its overall capital plan and outlook.

Paul Zimbardo from Jefferies sought clarification on what constitutes "equity-like financing structures" and questioned Kentucky's capacity to serve a hypothetical 1-gigawatt data center given the newly announced generation plans.

Answer

CFO Joe Bergstein explained that "equity-like" structures could include hybrid securities that receive partial equity credit from rating agencies, offering opportunistic financing flexibility. President and CEO Vince Sorgi stated that while the 2027 Mill Creek CCGT can accommodate the announced 400 MW data center, significant additional load would require the subsequent generation projects planned for 2030-2031, with battery storage bridging the interim period.

Paul Zimbardo asked about the potential scope of capital investment from the PJM RTEP process, the customer bill impact from the new Kentucky IRP, and the company's ability to execute on a large construction plan.

Answer

President and CEO Vincent Sorgi stated that PJM project selections are expected by January and are considered incremental to the base plan. He explained that customer bill impacts in Kentucky will be mitigated by retiring coal plants and using the Retired Asset Recovery rider. Regarding execution, he noted that labor and supply chain constraints are the primary reason new gas plants have a 2030-2031 in-service timeline.

Paul Zimbardo asked for details on the new Illinois Clean and Reliable Grid Affordability Act, specifically regarding investment opportunities in energy efficiency and transmission for distributed resources. He also sought a sneak peek into 2029 growth, considering the significant transmission rate base step-up projected for 2028.

Answer

Calvin Butler, President and CEO of Exelon, outlined the Illinois act's focus on enhanced energy efficiency, a 3 GW storage target by 2030, expanded distributed generation rebates, and integrated resource planning. Jeanne Jones, CFO of Exelon, confirmed the analyst's view on 2029 growth, citing transmission opportunities and competitive projects, positioning Exelon for the upper portion of its 7-8% rate base growth target.

Paul Zimbardo asked for details on the new Illinois Clean and Reliable Grid Affordability Act, specifically regarding investment opportunities in energy efficiency and transmission for distributed resources. He also sought a sneak peek into the 2029 growth outlook, particularly concerning the transmission rate base step-up.

Answer

Calvin Butler, President and CEO of Exelon, highlighted the Illinois legislation's focus on enhanced energy efficiency, a 3 GW storage target by 2030, expanded distributed generation rebates, and integrated resource plans. Jeanne Jones, CFO of Exelon, noted significant transmission opportunities, including competitive proposals to PJM, which position Exelon for continued strong rate base growth beyond the current planning period.

Paul Zimbardo from Jefferies asked which of Exelon's jurisdictions is most ripe for advancing utility-owned generation or other energy initiatives like efficiency and storage, and inquired about the potential timing for these opportunities to be included in the company's financial plan.

Answer

CEO Calvin Butler responded that most of Exelon's jurisdictions are actively engaged in legislative processes, highlighting Pennsylvania Governor Shapiro's efforts which saved customers approximately $3 billion. He emphasized the need for certainty, state control, and customer benefits. COO Michael Innocenzo identified Maryland as a key near-term opportunity, noting a decision on a 3,000 MW power procurement is expected by October, which could trigger further action. CFO Jeanne Jones added that more clarity would be available next year and the company would not speculate on timing for plan updates until then.

Paul Zimbardo from Jefferies asked which of Exelon's jurisdictions is most prepared for new initiatives like utility-owned generation or enhanced energy efficiency, given increased governor engagement with PJM, and inquired about the timing for these opportunities to be included in the company's financial plan.

Answer

CEO Calvin Butler stated that while most jurisdictions are active, Pennsylvania's governor has already helped save customers approximately $3 billion. He emphasized that any state action must provide certainty, control, and customer benefits. COO Michael Innocenzo identified Maryland as having the most immediate timeline, with a potential trigger for action by October based on a 3,000 MW power procurement outcome. CEO Calvin Butler and CFO Jeanne Jones confirmed that any new opportunities would be deliberately incorporated into the financial plan next year to avoid speculation.

Paul Zimbardo sought clarification on the 8 GW allocated for additional growth from power commitments, specifically how it relates to the 7 GW mentioned in the second quarter call and the recently added 4.5 GW. He also inquired about potential MW/GW commitments on the renewable side (solar and storage) as upside opportunities to the plan, particularly for serving hyperscalers.

Answer

Kimberly Fontan, CFO, clarified that the previous quarter reported 15 GW total (8 GW forecast, 7 GW growth), now updated to 19.5 GW total with 8 GW for growth. The difference accounts for projects in the forecast or those where capital closes outside the period due to alternate financing. Drew Marsh, Chair and CEO, confirmed expectations for additional renewables associated with large hyperscale deployments, citing examples like AWS (600 MW solar), Google (600 MW solar), and Meta (1,500 MW solar), noting potential for both PPAs and Entergy's own capital deployment.

Paul Zimbardo asked about the linearity of Edison International's EPS trajectory beyond 2025, considering past lumpiness and the absence of rate cases. He also inquired if the company's credit profile, specifically the FFO to debt ratio, is trending towards the upper half of the 15-17% range due to enhanced legacy fire recovery.

Answer

Maria Rigatti (EVP and CFO, Edison International) stated that 2026 guidance would be provided on the Q4 call, explaining that the GRC provides a framework for the four-year period, with annual planning influencing guidance. She reiterated strong confidence in the 5-7% EPS CAGR. Regarding credit, she confirmed comfort within the 15-17% FFO to debt range and stated the company would remain comfortably within it while evaluating financing options.

Paul Zimbardo asked about the linearity of Edison International's EPS trajectory beyond 2025, considering past lumpiness and the absence of intervening rate cases. He also inquired if the company's credit profile is trending towards the upper half of its 15%-17% FFO to debt range, given enhanced recovery on legacy fires.

Answer

EVP and CFO Maria Rigatti stated that 2026 guidance will be provided on the Q4 call, emphasizing the General Rate Case (GRC) as the framework for the four-year plan and reiterating confidence in the 5%-7% EPS CAGR. Regarding the credit profile, she confirmed comfort within the 15%-17% FFO to debt range and mentioned evaluating financing options, assuring the company would remain comfortably within the target.

Paul Zimbardo sought confirmation on whether the GRC Proposed Decision aligns with the company's EPS growth rate, not just its rate base forecast, and asked about the base year for the upcoming guidance refresh.

Answer

EVP & CFO Maria Riccardi confirmed that because rate base is the primary driver of earnings, the GRC PD does align with the company's EPS growth forecast. She also clarified that the post-GRC financial update will maintain the current structure, using 2025 as the base for the 2025-2028 EPS growth guidance.

Paul Zimbardo asked if the GRC Proposed Decision aligns with the company's EPS growth rate in addition to its rate base forecast. He also sought clarity on the base year that will be used for the long-term EPS growth guidance refresh following the final GRC decision.

Answer

Executive VP & CFO Maria Riccardi confirmed that because rate base is the primary driver of earnings, the GRC PD does align with the company's EPS growth outlook. She also clarified that the post-decision financial update will replicate the current 2025 through 2028 analysis period for its long-term guidance.

Paul Zimbardo of Jefferies sought clarification on whether the 'material loss' disclosure for the Eaton fire signals a potential need to reimburse the wildfire fund and asked about the potential timeline for settlement discussions.

Answer

CFO Maria Rigatti clarified that accounting rules require separate disclosure of a loss and its recovery, and the disclosure is not a signal regarding prudency or the need to refund the fund. President and CEO Pedro Pizarro reiterated the company's belief that SCE acted as a reasonable operator, which would allow access to the fund. He also stated it is too early to estimate a timeline for any potential settlements.

Paul Zimbardo questioned how the company would finance incremental capital opportunities, such as the next-gen ERP, given changes in its cost of capital, and how it would finance potential liabilities from recent fires.

Answer

CFO Maria Rigatti explained that incremental capital at SCE would be financed in line with its authorized capital structure, and the company is comfortable with its credit metrics moving into the 15-17% FFO to debt range. Crucially, she clarified that unlike pre-AB 1054 fires, any new claims payments would draw from the wildfire fund after using self-insurance, meaning the company would not have to issue debt from its balance sheet to cover them. CEO Pedro Pizarro reinforced this as a core feature of AB 1054.

Paul Zimbardo from Jefferies inquired about the financial benefits of the 'One Big Beautiful Bill Act,' the investment opportunities in the Pennsylvania Midstream business, and the valuation multiples of recent asset divestitures.

Answer

CFO Sean O’Brien detailed that the new bill primarily restores interest deductibility for AmeriGas, enables greater use of bonus depreciation, and provides R&D credits. President and CEO Bob Flexon highlighted robust midstream opportunities from Pennsylvania's energy investment push, noting numerous NDAs are in place. Regarding divestitures, Flexon stated that assets are only sold if the deal is non-dilutive and value-accretive on a risk-adjusted basis.

Paul Zimbardo, on behalf of Jefferies, asked for quantification of potential incremental margin or EBITDA from AmeriGas in fiscal 2026 and whether it could return to historical levels. He also questioned the drivers behind the implied loss in the second half of the fiscal year, which appears high relative to history.

Answer

President and CEO Robert Flexon stated it was too early to quantify 2026 EBITDA for AmeriGas, emphasizing the current focus is on operational improvements in areas like customer service and delivery efficiency. CFO Sean O'Brien explained that the second-half outlook reflects the typical seasonality of the business, where most earnings occur in the first half, plus a timing shift of some operational expenses from Q2 into the second half due to prioritizing service during the cold winter.

Paul Zimbardo of Jefferies asked for details on the drivers behind the year-to-date decline in capital expenditures across the Utilities and LPG segments, and questioned the future trajectory of leverage metrics for both UGI Corp and AmeriGas.

Answer

CFO Sean O’Brien explained that the lower CapEx in the LPG businesses is a strategic shift to focus on maintenance over growth, which will continue. For the natural gas businesses, the decline is due to the completion of renewable projects and a temporary focus on the balance sheet, though he reaffirmed a strong commitment to rate base investment. O'Brien also stated the goal is to continue decreasing leverage at both UGI Corp and AmeriGas, noting significant absolute debt reduction has already been achieved.

Paul Zimbardo of Jefferies asked if the higher PJM capacity auction price makes Talen comfortable levering up to its 3.5x net debt to EBITDA target, and what this implies about its view on the sustainability of these prices.

Answer

CFO Terry Nutt affirmed the company's comfort with its 3.5x leverage target but stressed that they maintain discipline by not underwriting the recent high auction prices in their long-term projections. CEO Mac McFarland added that Talen's growing cash flow profile, even with conservative assumptions, supports their deleveraging and capital return plans.

Paul Zimbardo of Jefferies, on behalf of Julien Dumoulin-Smith, asked about Talen's leverage profile following the strong PJM auction. He questioned if the company is comfortable levering up to its 3.5x net debt-to-EBITDA target based on the higher capacity prices and their view on the sustainability of those prices.

Answer

CFO Terry Nutt reiterated that the 3.5x leverage target remains appropriate and that they will not underwrite recent high capacity prices in their long-term projections to maintain discipline. CEO Mac McFarland added that Talen's growing cash flow profile, even with conservative capacity price assumptions, supports their capital return strategy after reaching their leverage goal, which they target for the end of next year.

Paul Zimbardo asked if the increased 2025 guidance would serve as the new base for the long-term growth rate and whether the favorable Texas legislation would alter the company's capital allocation plans.

Answer

SVP & CFO Christopher Sighinolfi confirmed the updated 2025 guidance midpoint will be the new base for the five-year outlook. President, CEO & Director Robert McAnally stated that while capital plans won't fundamentally change, they will continue to respond to system integrity needs and growth opportunities, particularly in Texas. SVP & COO Curtis Dinan added that strong in-migration and job creation are key drivers of this growth.

Paul Zimbardo from Jefferies asked if the newly raised 2025 guidance would serve as the base for the long-term growth rate and whether the favorable Texas legislation would alter the company's capital plans.

Answer

SVP & CFO Christopher Sighinolfi confirmed the company's process is to use the updated 2025 guidance midpoint as the new base. President & CEO Robert McAnally stated that capital plans remain consistent, driven by system integrity needs and organic growth, not legislative changes. SVP & COO Curtis Dinan added that population in-migration is a primary driver for capital spending.

Paul Zimbardo of Jefferies LLC inquired about the drivers behind the decision to narrow the 2025 EPS guidance to the top half of the range, asking for specifics on the outperformance and whether those drivers are expected to persist into 2026 and beyond.

Answer

EVP & CFO David Bowler identified strong customer usage, continuing a trend from the previous year, as the primary driver. President & CEO John Griffith supplemented this by highlighting the company's consistent regulatory execution and the strength of its geographically and regulatorily diversified platform.

Paul Zimbardo of Bank of America asked for more detail on the specific drivers behind the strengthened 2025 guidance and whether those positive factors are expected to contribute into 2026 and beyond.

Answer

EVP & CFO David Bowler identified strong customer usage, continuing a trend from the previous year, as the primary driver for the guidance increase. President & CEO John Griffith supplemented this by highlighting the positive impact of consistent regulatory execution and the strength of the company's diversified geographic and regulatory platform.

Paul Zimbardo from Jefferies asked for a quantification of the opportunities presented by recent legislative progress in Missouri, Indiana, and Virginia, particularly regarding stronger earned returns and incremental capital.

Answer

Executive Vice President and CFO David Bowler acknowledged that the new legislation, such as the future test year in Missouri, will incrementally improve earned returns in those states. However, he stated that the company has not yet framed or quantified the specific financial impact of these opportunities.

Paul Zimbardo requested elaboration on the company's addition of 'significant business development capabilities' for acquisitions and inquired about language changes in the 10-K, specifically the removal of references to ESG and diversity, and whether this signals a fundamental strategy shift.

Answer

EVP and COO Cheryl Norton explained that the company has added business development staff for more 'boots on the ground' and enhanced its corporate support team to drive consistency in due diligence and integration. President John Griffith stated that the language change in the 10-K is not a change in strategy, emphasizing that their approach to ESG is a business-driven proposition to achieve results.

An analyst for Paul Zimbardo asked about the potential tariff structure for data centers and sought clarification on the utility's ability to use a tax equity structure if IRA transferability is no longer available.

Answer

President and COO Joi Harris explained that a specific data center tariff is not immediately needed due to excess capacity, but a tariff with long-term commitments would be appropriate for future baseload generation. EVP and CFO David Ruud and CEO Gerardo Norcia clarified that DTE already has a commission order supporting a tax equity structure, which would streamline its use if needed.

Paul Zimbardo of Jefferies asked about a large potential natural gas customer in Northern Louisiana and its potential impact on the capital plan. He also sought clarification on why the 2025 interest expense guidance is projected to decrease slightly despite higher debt balances.

Answer

President and CEO John Akers declined to comment on specific potential customers until contractual agreements are certain, noting such projects are not currently factored into the capital plan. SVP and CFO Christopher Forsythe explained that the lower net interest expense guidance for 2025 is a result of higher capitalized interest (AFUDC) due to increased capital spending, which more than offsets the slight increase in the weighted average cost of debt.