PPL Q1 FY26 earnings call PPL

PPL Electric Utilities reached a constructive settlement in its distribution base rate case, filed after more than 10 years. The settlement, recommended for approval by administrative law judges, would result in bill increases of less than 4% across all customer classes, maintaining delivery rates among the lowest in the state. It includes a 2-year stay out and enhances support for vulnerable customers. A new large load customer rate class and electric service tariff were also created, providing approximately $11 million annually for residential low-income programs and ensuring financial commitments from developers.

In Kentucky, LG&E & KU were granted reconsideration of certain decisions by the KPSC regarding its base rate case, with a decision expected in Q3. The company announced partnerships to explore innovative generation technologies: with Rye Development for a 266 MW pump storage hydro project (estimated $1.3 billion, COD 2031) and with X-Energy for deploying Xe-100 small modular reactors. These initiatives aim to support increasing electricity demand from large load customers, backed by state legislation for nuclear development, and are approached with a disciplined, phased strategy.

Rhode Island Energy received approval for over $330 million in critical infrastructure investments, with recovery beginning April 1. These investments have contributed to top-quartile reliability metrics and strong execution during severe winter storms. The company's base rate case, filed in Q4 2025, requests a revenue requirement increase of $181 million in year 1 and $49 million in year 2, with new rates expected September 1. A new hold harmless commitment proposal will provide bill credits starting Q1 2027, offsetting the base rate increase and accelerating deferred tax benefits from the acquisition.

PPL Electric Utilities continues to see significant data center development, with projects in advanced stages totaling 28.3 GW (up 12% from 25.2 GW). Of this, 10 GW have signed Electric Service Agreements (ESAs) and 5 GW are under construction. The company emphasizes strong customer protections in ESAs, including prepayments and minimum load obligations, ensuring developers bear financial risk. Incremental load growth is expected to improve system utilization and lower transmission costs for existing customers, reflecting a balanced approach to data center integration.

Kentucky is experiencing strong economic development, with the current development pipeline reflecting 12.9 GW of potential new load through 2032, an increase of nearly 4 GW from the year-end update. Data center requests account for almost 12 GW of this demand, with 650 MW already under construction or agreement. Based on updated planning, PPL now projects approximately 3.5 GW of expected new load by 2032, compared to 1.8 GW in its most recent CPCN forecast, making another CPCN filing possible as early as this year to address resource needs.

Momentum is building for the joint venture with Blackstone, driven by rapid data center growth and the increasing need for dedicated generation solutions. The JV is actively engaged in strategic discussions with hyperscalers and gas pipeline companies, has executed multiple gas turbine reservation agreements, and submitted requests for multiple generation projects into PJM's interconnection queue for land sites under its control. The JV maintains a disciplined approach, committing to build only with signed Energy Supply Services Agreements (SSAs) and aiming for a utility-like risk profile through long-term contracts.