Ross Fowler

Ross Fowler sought to confirm the composition of the 600 MW data center demand in Black Hills Corporation's plan, specifically if it includes 200 MW from Microsoft and 400 MW from Meta, and how the 1,150 MW of generation in Laramie County's interconnection queue relates to the 600 MW given Meta's presence there. He also clarified if the 10% EPS contribution from data centers is included within the 4-6% EPS CAGR target.

Answer

Linn Evans, President and CEO, clarified that Black Hills Corporation has not disclosed specific megawatts for Microsoft but confirmed a combined 600 MW from Microsoft and Meta by 2030. Marne Jones, Senior Vice President and Chief Utility Officer, stated that resource mix is still under negotiation, and Linn Evans added that Meta and Microsoft utilize market energy, meaning interconnection queue megawatts do not directly correlate. Ms. Jones confirmed that the 10% EPS contribution from data centers is indeed included within the 4-6% EPS CAGR target through 2028.

Ross Fowler sought clarification on the breakdown of the 600 MW data center demand, specifically if the 400 MW beyond Microsoft's 200 MW was entirely from Meta. He also inquired about the location and source of the remaining 600 MW demand, considering Meta's presence in Laramie County and interconnection queue filings. Finally, he asked if the 10% EPS contribution from data centers was included within the 4-6% EPS CAGR target through 2028.

Answer

President and CEO Linn Evans clarified that the company does not disclose specific megawatts for Microsoft but confirmed a combined 600 MW from Microsoft and Meta by 2030. Senior Vice President and Chief Utility Officer Marne Jones stated that resource mix and negotiations are ongoing, and Linn Evans added that Meta and Microsoft primarily use market energy, meaning interconnection megawatts don't directly correlate. Marne Jones confirmed that the 10% EPS contribution from data centers is indeed included within the 4-6% EPS CAGR target.

Ross Fowler from Bank of America asked about the prospects for achieving wildfire mitigation legislation in Colorado and South Dakota similar to Wyoming's, and whether incremental data center demand would drive transmission or generation investment.

Answer

Linn Evans, President and CEO, expressed confidence in eventually achieving similar wildfire legislation in Colorado and South Dakota, citing timing as the current consideration. Marne Jones, SVP and Chief Utility Officer, stated that while the current data center model is capital-light, future growth presents opportunities for investment in both transmission and generation to meet customer needs.

Ross Fowler inquired about Spire's strategic vision for its scale post-Tennessee acquisition and storage asset sale, and potential future portfolio adjustments. He also asked about the timeline and complexities of integrating the Tennessee business.

Answer

President and CEO Scott Doyle emphasized that the immediate priority is closing and seamlessly integrating the Tennessee transaction, noting the significant effort involved. He highlighted the scale benefits for customers by spreading shared services costs over a larger base. Scott Doyle also detailed the 18-month transition services agreement with Duke and Spire's extensive experience in successful integrations.

Ross Fowler inquired about the composition of the $5.9 billion equity plan outlined on slide 18, specifically asking if there is potential for more minority stake sell-downs to address the equity need over time.

Answer

Trevor Mihalik, EVP and CFO, clarified that the $5.9 billion equity represents approximately 33% of the increased capital plan, with most growth equity projected for the back half of the five-year plan. He mentioned an ATM in 2026 and potential block equity later. Bill Fehrman, Chair, President and CEO, stated that AEP is not currently planning any asset sales to fund the plan but will continue to assess opportunities.

Ross Fowler inquired about the drivers behind the significant earnings step-up projected for 2028, as depicted on slide 14, and sought clarification on the schedule and timing of the Ohio rate case filing under the new regulatory framework. Additionally, he asked about the composition of the $5.9 billion equity plan on slide 18, specifically if there's potential for further minority stake sell-downs.

Answer

Trevor Mihalik, EVP and CFO, explained that the earnings increase is primarily driven by the capital plan, with CapEx peaking at approximately $17 billion in the mid-plan period (2027-2028), alongside positive legislative and regulatory outcomes like Ohio's forward-looking test year, Texas HB 5247, and Oklahoma SB 998, which help narrow the ROE gap. He confirmed confidence in a 9% CAGR, with growth in the lower half for the first two years and at or above the high end for the back three years. Regarding equity, Mihalik noted the $5.9 billion represents roughly 33% of the capital plan increase, with most equity needs in the back half of the plan, including a projected $1 billion ATM in 2026. Bill Fehrman, Chair, President and CEO, added that AEP is not currently planning any asset sales to fund the plan but will continue to assess opportunities.

Ross Fowler of Bank of America inquired about the financing strategy for the incremental $16 billion in capital expenditures and the potential impact of accelerated cost recovery mechanisms on AEP's long-term earnings growth rate and ROE trajectory.

Answer

EVP & CFO Trevor Mihalik explained that AEP has pre-funded its equity needs for the existing $54 billion plan, providing flexibility for the increase to $70 billion. He noted that while the new capital supports the 6-8% growth rate, the company will remain disciplined before revising it. Mihalik confirmed that new mechanisms, like the Texas UTM, are expected to increase earned ROEs by 50-100 basis points in that jurisdiction, boosting the consolidated ROE.

Ross Bowler of Bank of America asked for specifics on the proposed data center tariffs, including the rate structure and contract terms. He also questioned the potential scale of securitization relative to the $2 billion equity need and the structural considerations for small modular reactor (SMR) projects.

Answer

President and CEO William Fehrman explained that data center tariffs are driven by incremental project costs to protect existing customers, rather than a single fixed price. EVP and CFO Trevor Mihalik stated that securitization could potentially cover a 'big chunk' of the remaining $2 billion equity need. Regarding SMRs, Fehrman emphasized that while AEP is exploring partnerships, any future agreement will be structured to protect shareholders and customers from the risks of first-of-a-kind technology.

Ross Fowler asked about the supply chain considerations for the potential 1.2 gigawatts of natural gas generation in West Virginia, including turbine queue positions, lead times, and pricing, assuming a self-build scenario. He also inquired about affordability pressures in New Jersey, specifically whether it's well understood that generation costs are driving most of the bill increases.

Answer

Brian Tierney, Chair, President, and CEO, stated that the $2.5 billion forecast for the West Virginia generation project factors in supply chain aspects, noting that lead times for major equipment are currently 3-4 years, not 4-5. He confirmed that an RFP is out for build-own-transfer, and no final decision has been made on self-build. Jon Taylor, Senior Vice President and Chief Financial Officer, affirmed that it's well understood that generation drives bill increases, but politically, rising bills remain a concern. He outlined FirstEnergy's efforts to mitigate costs, including advocating against PJM capacity auctions and exploring alternative mechanisms.

Ross Fowler asked for an update on FirstEnergy's West Virginia generation plans, specifically if it would be a self-build project, how CWIP would be filed, and details on the supply chain for the 1.2 GW project, including turbine queue, pricing, and lead times. He also inquired about the New Jersey rate case cadence, affordability pressures in the state, and whether the understanding that generation costs drive bill increases is well-understood by policymakers.

Answer

Brian Tierney, Chair, President, and CEO, stated that no final determination has been made between build-own-transfer and self-build, with an RFP currently out for BOT. He noted that the $2.5 billion forecast for the project factors in supply chain considerations, with lead times for major equipment currently seen at 3-4 years. Jon Taylor, Senior Vice President and Chief Financial Officer, affirmed that the impact of generation on New Jersey bills is well understood, but politically, any bill increase is a concern. FirstEnergy is actively mitigating controllable costs and advocating against PJM capacity auctions to address these pressures.

Ross Fowler asked about the primary concerns from interveners in the ongoing Ohio rate case, the potential impact on earning its allowed ROE, and the timeline for resolving the final HB6-related regulatory processes.

Answer

President, CEO & Chairman Brian Tierney stated that the current rate case involves standard intervener topics like capital structure and ROE, and he anticipates the new forward-looking framework will be constructive. On HB6, he confirmed no new issues were raised in hearings and expects a final resolution by the end of the year, closing that chapter for the company.

Ross Fowler from Bank of America inquired about the Sempra Infrastructure (SI) stake sale, specifically the potential size of the sale to KKR, and the timing for updating the capital plan to include significant incremental spending at Oncor.

Answer

Chairman, President & CEO Jeffrey Martin explained that while the LOI with KKR contemplates a 15-30% stake sale, the final size depends on valuation and other factors to maximize value and strengthen the balance sheet. He confirmed the incremental $12 billion in Oncor CapEx is not yet in the base plan but expressed high confidence in it, with an official update likely in 2026 post-rate case. Oncor CEO Allen Nye detailed the robust growth drivers in Texas, including a 186 GW queue for data centers and a 38 GW high-confidence load forecast for 2031, underscoring the need for expanded capital investment.

Ross Fowler sought to understand the timing of the negative revisions to the 2025 guidance, asking which factors were new since the Q3 update. He also asked for clarity on how to apply the new long-term growth rate, questioning if the 9%+ growth should be based off the 2025 or the higher 2026 EPS midpoint, given the significant year-over-year increase.

Answer

CFO Karen Sedgwick clarified that while some issues were known, the final California GRC decision was worse than the proposed version, the FERC CAISO adder removal was unexpected, and the decision for Oncor to file an early rate case was new. CEO Jeffery Martin explained that the growth rate is not linear and that the 2025-2026 jump reflects the lumpiness of large projects like ECA LNG coming online. He reiterated the long-term view has improved, framing 2025 as a strategic inflection point.

Ross Fowler from Bank of America asked about the timing for deploying new generation capital to serve data center load and how this would drive growth toward or above the 6% target. He also inquired about the associated transmission component and sought confirmation on the financial backing of the new LOI partner, Quantica.

Answer

CEO Brian Bird clarified that capital for transmission and interconnection would be deployed relatively quickly. He noted the generation build-out would follow a 2027 timetable with a gradual ramp-up, with Quantica's project extending to 2030. Bird confirmed that NorthWestern Energy has been engaged with Quantica and its private equity backer, EnCap Investments, for approximately six months and expressed confidence in the partnership.

Ross Fowler from Bank of America asked for clarification on the timing for deploying new generation capital to support data center load and drive growth above the 6% target, and whether there is a significant transmission investment component associated with this.

Answer

CEO Brian Bird clarified that necessary transmission and interconnection capital would be deployed relatively quickly to support the new data centers. He noted the load growth will ramp up over time, with one project reaching its full 500 MW capacity by 2030. He also confirmed that NorthWestern has been in discussions with data center developer Quantica and its private equity backer, EnCap Investments, for at least six months.

Ross Fowler asked about the timing for deploying new generation capital to support data center load and achieve growth above the 4-6% target, whether there was a transmission component, and sought confirmation on the financial backing of the new LOI partner, Quantica.

Answer

CEO Brian Bird stated that transmission and interconnection investments would occur relatively quickly. He clarified the generation build-out is a longer-term ramp, with Quantica's project targeting 2030 for full capacity. Bird confirmed Quantica is backed by EnCap Investments and that NorthWestern has been in discussions with them for over six months, expressing confidence in the partnership.

Ross Fowler asked for an update on the MISO MTEP process and potential transmission CapEx upside, and also inquired about the primary concerns raised by interveners during the Meta regulatory approval process in Louisiana.

Answer

Chair and CEO Drew Marsh stated the next MISO filing is this fall. He explained that intervener concerns focused on traditional issues like customer bill impacts and reliability. Marsh countered that the projects provide significant benefits, including cost-sharing and major grid resilience enhancements from new 500 kV lines. He stressed that the debate is more about 'how and where' to build, not 'if' the assets are needed.

Ross Fowler asked if regulatory support for nuclear, seen in Mississippi, is mirrored in Entergy's other jurisdictions and requested specifics about the new Northern Louisiana industrial project, including whether it is a data center.

Answer

Executive Andrew Marsh confirmed strong interest and formal working groups for new nuclear in Texas, Mississippi, and Louisiana. Executive Roderick West declined to identify the new customer's industry or specific site, citing the need to respect customer confidentiality until a public announcement is made by them.

Asked about the possibility of settling the New Mexico Gas sale before the hearing, the timing of the planned U.S. listing, and any changes to the FX hedging strategy.

Answer

A settlement in the New Mexico case is possible at any time, but the team remains focused on the upcoming hearing. The U.S. listing is still expected in the spring of 2025. The company has no plans to change its approach to hedging U.S. dollar earnings despite recent volatility.

Ross Fowler sought clarification on whether the 300 MW Arizona load growth starts at or ramps up to that level, requested an update on credit metrics, and asked about the decision to not update the foreign exchange rate assumption.

Answer

President and CEO David Hutchens clarified the load will begin to ramp in 2027 to a 300 MW first phase. EVP and CFO Jocelyn Perry confirmed that credit metric forecasts remain unchanged, with FFO to debt still projected to average over 12%. She explained the FX assumption was held steady due to high volatility, with an update planned for the fall alongside the new 5-year plan.

Ross Fowler of Bank of America asked for a high-level explanation of the Genco structure's advantages over a standard tariff filing and whether the model could be replicated in other states. He also inquired about the different risk, return, and leverage profile associated with Genco.

Answer

CEO Lloyd Yates outlined four key advantages of Genco: protecting existing customers by separating costs, providing faster speed-to-market, offering flexibility in negotiating risk and return, and preserving the core business model's integrity. Executive Shawn Anderson added that the structure provides flexibility for the lowest cost of financing.

Ross Fowler asked about MISO capacity market dynamics, including whether NiSource's vertically integrated model helps manage potential price spikes and how the company is addressing the timing risk between data center demand and generation build-out.

Answer

President and CEO Lloyd Yates described the vertically integrated model as a 'competitive advantage' for speed to market and stated that matching the build pace to demand is a key focus for 2025. EVP Michael Luhrs added that the model helps mitigate capacity price risk by keeping supply and demand in balance and that stakeholder discussions on these topics are already underway through the IRP process.

Ross Fowler asked about the potential impact of a Massachusetts DPU proposal to end gas line extensions on the capital plan. He also inquired about legislative risks in Connecticut concerning the Aquarion sale and sought to confirm if rate increase assumptions could be derived from the cash flow slide.

Answer

Chairman, President and CEO Joseph Nolan deemed it premature to comment on the Massachusetts gas proposal. On the Connecticut legislation, he expressed confidence in the sale's approval, noting the same body recently passed the enabling law. Executive VP and CFO John Moreira confirmed that backing into rate increase assumptions from the provided cash flow data was a 'fair assumption.'

Ross Fowler inquired about how a shift to a PBR framework for Yankee Gas would impact customer rates over time and asked for context on Massachusetts's full electrification push, balancing bill pressure against capital opportunities.

Answer

EVP, CFO and Treasurer John Moreira explained that Performance-Based Ratemaking (PBR) provides rate stability through annual adjustments, mitigating the volatility of general rate cases. He praised the collaborative ESMP model in Massachusetts for balancing investment needs with stakeholder input, calling it a great model for enabling electrification.

Ross Fowler asked about the legislative schedule in South Carolina regarding regulatory lag and new generation, the timeline for Hurricane Helene cost recovery, and clarification on rate structures that could facilitate the SMR partnership with Amazon.

Answer

CEO Robert Blue stated they are not pursuing a restart of V.C. Summer but are focused on legislative efforts in South Carolina to address regulatory lag and authorize new generation. CFO Steven Ridge explained that storm costs, biased toward capital, will be deferred, and they will pursue securitization for costs exceeding $100 million. Regarding the Amazon MOU, Blue noted that while special contract rates are a possibility, he could not provide specifics beyond the guiding principles of mitigating risk for customers and the company.

Ross Fowler asked about the historical precedent in Georgia for the cash recovery lag on storm costs, the potential for securitization, and how the company finances the gap between incurring expenses and receiving cash recovery.

Answer

CFO Dan Tucker explained that the Georgia Public Service Commission has flexible tools at its disposal. He noted that historically, recovery periods have varied from a couple of years to as many as six years, depending on the magnitude of the storm and other rate considerations at the time.

Ross Fowler requested an update on the Marshall Fire litigation following a recent judge's order, asking about the trial structure and next steps. He also asked for context on how the increased capital spending plan would impact customer bills.

Answer

Chairman, President and CEO Robert Frenzel explained the 'constructive' trial structure, which separates the determination of liability from potential damages, with the first trial set for September 2025. On customer impact, he stated that bill increases are expected to be benign, referencing a Colorado filing that showed a 2.2% long-term annual increase. EVP and CFO Brian Van Abel added that over the next five years, the bill impact is projected to be a manageable 1-3% annually, aided by the company's low starting point on customer energy costs.

Ross Fowler from Bank of America asked if PJM capacity market discussions could lead to legislative action in 2025, questioned the mechanics of cost allocation versus reliability for co-located load, and inquired about the reliability oversight interplay between FERC and PJM.

Answer

CEO Calvin Butler indicated it's too early to predict 2025 legislative action but noted a growing sense of urgency. COO Michael Innocenzo and CFO Jeanne Jones explained their position on co-location covers three areas: reliability studies, fair rate design for grid costs, and resource adequacy. EVP Colette Honorable clarified the regulatory framework, where FERC has the federal mandate for reliability, PJM implements it regionally, and states handle retail rate design, creating a multi-layered process.