2026 Earnings Guidance
Q: Would you have been at $6 billion before auction results?
A: When we first announced the $6 billion plus in May, curves were strong in Texas and PJM. Curves have since come off, and we're now about 55% hedged. Despite some erosion in unhedged margins, we believe we're still strongly above the $6 billion plus figure for 2026, especially with the recent capacity auction clear. We'll refresh our guidance next quarter.

PJM Auction Upside
Q: Why is the $200 million PJM auction upside less than expected?
A: Our previous 2025 numbers already included a revenue assumption for the auction, at about half of the actual clear. Also, in our retail business, particularly residential, we have some forward capacity sales which are fixed price commitments, so not all the capacity revenue flows through fully. The $200 million reflects these factors and is for six months of the planning period. We expect more flow-through in future auctions.

Nuclear PTC Impact
Q: Does the nuclear PTC provide downside support in '25?
A: We're right around the PTC floor; as of August 5, we're just below it. We wanted to show that the capacity revenue isn't needed to cover softness in our business. The PTC provides downside protection—if curves stay as they are, we might get more PTC upside; if they fall, the PTC provides valuable support. We're giving a $400 million number for '24, over and above our upper range.

ERCOT Newbuild Economics
Q: Are prices high enough to justify newbuild in ERCOT?
A: The curves have come off recently, and projects are challenged based on curves alone. The Texas legislature passed the TEF and other measures to provide low-cost financing and incentives for new gas plants, capped at 10,000 MW. While helpful, low-cost financing alone isn't enough; we need adequate revenue, and market reforms are important. It's too early to tell how this will unfold.

TEF Decision Timeline
Q: When do you need to make a decision on TEF projects?
A: By the end of August, we'll know who moves forward in the TEF process. Due diligence will follow, and loans need to be dispersed by late 2025. We're working on engineering, site work, and interconnect processes. We anticipate a go/no-go decision on the peakers around early next summer, with more information by then.

Data Center Deal Timing
Q: When will you sign a data center colocation deal?
A: These are large, complicated deals that depend on customer readiness. We're making progress, with strong engagement and due diligence, but customers are also talking to others. It's a dynamic market, and while we're moving as fast as we can, it's not solely under our control. Our fundamentals don't depend on these deals, but we're working hard to get one done.

Data Center Pricing Discussions
Q: How have pricing discussions with data centers evolved?
A: Customers recognize the value of reliable baseload capacity, especially carbon-free nuclear units, and are willing to pay for it. We're in a competitive process, and other companies offer similar resources. Gas assets also provide reliability and other benefits. Pricing is sensitive, but we're making progress in these customer-specific discussions.

PJM Load Growth Concerns
Q: How do you manage concerns about PJM load growth interventions?
A: The competitive market allows anyone, including regulated utilities, to build generation. Significant investment has been made by competitive companies in PJM and ERCOT. The recent capacity auction clear brings only 40–50% of what's needed to build a new gas plant. There's plenty of opportunity for all to work together to meet customer needs. We need to keep the dialogue open and work through these issues over time. ,

Recession Implications
Q: What does a potential recession mean for your business?
A: In the near term (next 2–3 years), we feel strong about generating consistent returns. Our baseload and residential businesses are quite recession-proof. Our commercial and industrial contracts are typically take-or-pay. We've proven resilience even when things soften, adjusting operations and hedges effectively. Long term, we'd consider capital allocation if there were a prolonged downturn, but it's not a near-term worry.

Acquiring Existing Assets
Q: How do you view buying existing assets?
A: We've grown through acquisitions and have shown the ability to integrate assets and capture synergies. New assets often trade at a discount later. The value of gas assets has improved but hasn't yet matched new-build costs. We'll continue to look for opportunities as the gap narrows, but currently, there's still a delta.