PPL Q2 FY25 earnings call PPL

PPL reported Q2 FY25 GAAP earnings of $0.25 per share and ongoing earnings of $0.32 per share, marking a $0.06 per share decrease compared to Q2 FY24. This decline was primarily attributed to the timing of^📎 certain operating costs, favorable weather in the prior year, and higher interest expense. Despite these factors, management reaffirmed its full-year 2025 ongoing EPS forecast at least at the midpoint of $1.81 per share, anticipating stronger growth in the second half of the year driven by higher returns on capital investments and lower O&M. The company expects to deliver $150 million in cumulative annual O&M savings in 2025 compared to its 2021 baseline.

A constructive stipulation agreement was filed with the KPSC related to the CPCN proceeding for new generation in Kentucky. This agreement supports the approval of two 645-megawatt natural gas combined cycle units (Brown 12 and Mill Creek 6) and an SCR for the Ghent unit. It also includes mechanisms to reduce investment lag, such as AFUDC treatment and cost recovery via existing environmental cost recovery mechanisms. The stipulation supports extending the life of the Mill Creek 2 coal unit from 2027 to 2031 and a new mechanism to recover associated O&M and capital costs. LG&E and KU also filed a request with the KPSC for a combined $391 million increase in annual electric and gas revenues, with a decision expected by year-end and new rates effective January 1, 2026.

In Rhode Island, PPL reached a settlement with the advocacy section of the Division of Public Utilities and Carriers regarding a hold harmless commitment from the acquisition of Rhode Island Energy. The settlement entails a $155 million bill credit to customers, to be distributed in January, February, and March of 2026 and 2027, improving affordability during winter months. In Pennsylvania, PPL Electric Utilities expects to file its first base rate case in a decade by the end of 2025. This filing will support continued efforts to strengthen the grid against storms and incorporate advanced technology for improved efficiency and customer experience.

PPL has made serving data centers a strategic priority, with 14.5 gigawatts of data center projects in advanced stages of development in Pennsylvania, including 5 gigawatts publicly announced. This demand has led to an increased projection for transmission capital investment, now ranging from $750 million to $1.25 billion, with only $400 million currently in the capital plan. To meet this unprecedented^🌐 growth, PPL announced a new joint venture with Blackstone Infrastructure to build new generation. This JV aims to address an estimated 7.5 gigawatts of new generation need over the next 5 to 7 years in PPL Electric Utilities' service territory, representing a $17 billion to $19 billion investment.

The joint venture, with PPL owning 51% and Blackstone Infrastructure 49%, aims to build new generation under long-term energy services agreements (ESAs) with hyperscalers, ensuring regulated-like risk profiles and avoiding merchant energy price volatility. Blackstone Infrastructure, with its open-ended investment horizon and expertise in data centers and generation, is seen as an ideal partner. PPL contributes its strong presence in Pennsylvania, relationships with state officials, PJM market insights, and proven experience in developing and operating generation assets, including managing over $3.5 billion in construction projects. The JV is positioned to build generation now, without cannibalizing existing assets.

Kentucky continues to experience robust economic growth, with approximately $36 billion in new investments announced from 2020 to 2024, nearly half of which are within LG&E and KU service territories. The economic development pipeline remains strong, fueled by access to reliable and affordable electricity. PPL's latest forecast for Kentucky estimates 8.5 gigawatts of economic development load potential, comprising 5.7 gigawatts of data center load and 2.8 gigawatts of manufacturing and other non-data center load. The previously announced PowerHouse Data Center has been upsized from 400 megawatts to 525 megawatts, indicating continued materialization of demand growth.