Total Operating Revenue

+8% " " "

Higher retail rates from the 2022 rate case, increased customer demand driven by a hot summer, and underlying customer growth boosted revenue; partially offset by milder weather in earlier months and other seasonal factors. " " "

Operating Income (EBIT)

+6% " " "

Primarily supported by increased operating revenues from new rates and weather-driven usage, though partially constrained by rising fuel and purchased power costs and higher O&M expenses; ongoing efficiency initiatives helped contain further cost pressures. " " "

SG&A

+23% " " "

Led by increased administrative overhead such as IT upgrades and labor costs, as well as expanded marketing and customer service initiatives; the company continues to monitor and optimize these expenditures for future periods. " " "

Capital Expenditures (CapEx)

-$666 million vs. +$2.678 billion (>100% change) " " "

Driven by completion of large-scale projects in the prior year’s period and strategic reallocation of capital to existing infrastructure rather than new major projects; this may indicate a temporary pullback ahead of the next investment cycle in grid modernization and clean energy. " " "

EPS

FY 2024

$4.60–$4.80 "

$5.00–$5.20 "

raised

Sales Growth

FY 2024

“Lower range than 4%–6%” "

4%–6% "

raised

O&M

FY 2024

“2% overall increase” "

$1.01B–$1.03B "

no prior numeric guidance

CapEx

FY 2024

no prior guidance

$2.05B "

no prior guidance

EPS

FY 2025

no prior guidance

$4.40–$4.60 "

no prior guidance

Customer Growth

FY 2025

no prior guidance

1.5%–2.5% "

no prior guidance

Weather-Normalized Sales Growth

FY 2025

no prior guidance

4%–6% (with 3%–5% from large C&I) "

no prior guidance

Long-Term EPS Growth

Long-Term

no prior guidance

5%–7% CAGR "

no prior guidance

Regulatory lag and delayed rate case timelines

Q2/Q1/Q4 2024 repeatedly discussed regulatory lag docket, rate case timing delays, formula rates, and forward test years. " " " " " " " " " "

Earliest practical rate case filing is mid-2025; new rates likely in late 2026. Focus on reducing lag through the regulatory lag docket and potential formula rates. " " " " " " " "

Continues as a top priority; more clarity on mid-2025 filing and exploring formula rates.

Equity issuance and shareholder dilution

Q2/Q1/Q4 calls frequently mention equity plans (big block forward sale, ATM, hybrid securities) to sustain capital structure and limit dilution. " " " " " " "

Updated $700M–$900M equity need for 2025–2027. Emphasis on minimizing dilution using ATM and forward equity overlays. " " "

Remains a key strategy; slightly expanded equity need but still focusing on minimizing dilution.

Expansion of high-load-factor customers (data centers, TSMC, manufacturing)

Q2/Q1/Q4 calls emphasize significant growth from data centers, TSMC expansions, and manufacturing, supporting 4%–6% sales growth. " " " " " "

Over 4,000 MW of committed extra high-load-factor C&I demand; up to 10,000 MW in planning, notably data centers. TSMC ramping multiple fabs. " " " " "

Continues growing; large backlogs and sustained demand, critical to future earnings and development.

Weather-normalized sales growth forecasts

Q2: 5.5% growth, aligned with 4%–6% range. Q1: 5.9% but guided 2%–3% for the year. Q4: expected 2%–4% near term, 4%–6% longer term. " " " " "

Maintains 4%–6% long-term forecast, buoyed by robust demand from large C&I and residential growth. "

Stable at 4%–6%; continues to track higher end with strong C&I pull.

5% to 7% EPS growth guidance

Q2/Q1: No explicit mention of 5%–7%. Q4: Reaffirmed off 2024 midpoint, supported by SRB and regulatory improvements. " "

Reaffirmed at 5%–7% from the midpoint of $4.60–$4.80 EPS for 2024. " " "

Remaining a core target; consistent guidance reiterated in Q3.

System Reliability Benefit (SRB) surcharge for cost recovery

Q2/Q1/Q4 highlight SRB as key to reducing lag for utility-owned generation. Q4 expected cost recovery 180 days post in-service. " " "

Cited as crucial for 40% of future CapEx to recover costs more promptly. Enabling about 800 MW of company-owned projects. " "

Ongoing importance; actively used to mitigate lag and boost owned generation.

FERC formula rates for improved cost recovery

Q2/Q1/Q4 reference interest in formula rates under the regulatory lag docket; increasing FERC transmission spend for timely recovery. " " " "

Mentioned as part of broader plan, with 40% of capital also qualifying for formula rates. "

Still evolving; integral to reducing lag, consistent focus in regulatory docket.

Credit metrics and FFO to debt targets

Q2: No clear mention. Q1: aimed for 14%–16% FFO/debt. Q4: discussed 14%–16% target and stable ratings. " " " "

Emphasis on maintaining balanced metrics via sales growth and careful equity issuance. No specific ratio target cited. " "

Still a priority; details less explicit in Q3, but company remains focused on stable credit ratings.

Significant capital investments and large-scale load growth (4,000 to 10,000 MW)

Q2/Q1/Q4 note rising CapEx to meet data center/manufacturing growth, referencing thousands of MW in backlog. " " "

Capital plan $9.65B through 2027, +24%, driven by data centers & TSMC. Over 4,000 MW committed, up to 10,000 MW pending. " " "

Accelerating with major expansions and multi-year commitments.

O&M expense management

Q2/Q1/Q4 emphasize lean culture, major outages, and pulling forward costs. Shift in timing and structural changes (e.g., health insurer switch). " " " "

2024 O&M guidance up to $1.01B–$1.03B; pulling projects forward. Expect meaningful decline in 2025. " " " "

Actively managed; near-term increase, followed by projected decline.

Changes in the regulatory environment and new commissioners

Q2 described ACC elections but no major changes yet. Q1 had no explicit mention. Q4 recognized improved ACC collaboration and new docket for lag. " " "

Could see 3 Republicans on ACC, maintaining current alignment on the regulatory lag docket. Potential policy statement or rule change on rate-making approach. " " " "

Stable or constructive environment remains likely with new commissioners.

Large planned outages

Q2 cited large outages in second half of 2024 at Four Corners. Q1 had Palo Verde refueling. Q4 included major outages at Four Corners, Red Hawk, Palo Verde. " " "

Mentioned final Four Corners Unit 5 outage in spring 2025; minimal Q3 focus. "

Slowing after 2024–2025; fewer large outages ahead.

Potential cost-of-service issues for C&I customers

Q2: No direct mention. Q1: Acknowledged cost allocation concerns with high-load-factor customers. " Q4: Not explicitly addressed. "

Company ensuring take-or-pay or similar strategies so large builds don’t shift costs to other customers. "

Ongoing caution; focusing on fairness to prevent cost shifting from big C&I loads.