PPL (PPL) Q4 FY25 earnings call: guidance and Q&A

Inquired about the progress of settlement discussions, potential sticky points, and the significance of the one-day hearing, as well as the broader implications of Governor Shapiro's consumer-focused remarks.

Management stated that settlement discussions are active and normal, with the main focus of the hearing being data center impact on affordability. They feel confident in their filing regardless of settlement. They acknowledged the state's constructive stance on utilities and economic growth, emphasizing that the core issue of affordability stems from generation supply not keeping pace with demand in PJM, driving up energy supply costs.

“I think the state overall continues to be constructive despite some of the comments that we may have heard that might suggest otherwise.”

asked by Shahriar Pourreza · answered by Vincent Sorgi

Asked if a Blackstone JV contract announcement would wait for an earnings call or be communicated sooner.

Management confirmed that a significant event like a JV contract would be announced off-cycle, not necessarily waiting for an earnings call.

“Yes, I don't think we would necessarily need to wait for an earnings call now. I think that would be a significant event that we would do that off cycle for sure.”

asked by Jeremy Tonet · answered by Vincent Sorgi

Inquired if the JV would bid into the base residual auction or other PJM auctions.

Management stated they are evaluating participation in special auctions for new generation but not the normal auction. They emphasized that any JV participation would need to fit within the company's established risk profile, which seeks regulated-like structures.

“But we really need to see the final structure if that even comes to fruition, what that's going to look like. We have to see if it fits within the risk profile that we've set up here.”

asked by Jeremy Tonet · answered by Vincent Sorgi

Asked what data center customers were expecting for generation supply and if there's a risk they would leave the region if generation issues aren't resolved.

Management explained that hyperscalers initially expected to procure power from the PJM market but are now highly focused on securing new generation due to increased pressure. They are not seeing customers pulling out; instead, engagement is constructive, and Pennsylvania's grid reliability during recent cold spells has impressed hyperscalers, making them more comfortable staying.

“Pennsylvania was the one that was generating and exporting the vast majority of the energy, including down to Virginia, which is where, obviously, current data center alley is. So what we've heard directly from some of the hyperscalers is they're actually very impressed with the reliability both on a gen and transmission side in PA.”

asked by Steven Fleishman · answered by Vincent Sorgi

Asked about the potential size of investment opportunities from competitive transmission, additional T&D, Kentucky generation, and the Blackstone JV, and their impact on EPS CAGR and equity funding.

Management did not quantify the exact size or EPS impact but highlighted these as confidence drivers for their plan and potential upside. They noted that many of these upsides would not necessarily drive customer bills higher, and some could even lower them. For funding, they suggested that if $3 billion of capital were added, $1 billion of equity might be a decent rule of thumb, but it depends on recovery mechanisms.

“I mean, we think we have -- we believe that all of these areas can certainly come through for us, to some extent, ultimately, the size and timing of that will depend on a number of factors, but they're all areas that we're active and successful in to date.”

asked by Michael Lonegan · answered by Joe Bergstein

Asked about the materiality of the Blackstone JV by the end of the decade, the total opportunity, and the stage of contracting efforts.

Management stated they are 'many innings in' with the JV, having worked on it for about a year, securing land and gas capacity. They expect some earnings contribution by the back end of the current plan (2029) and more materially into the next decade (early 2030s) when combined cycles come online. They emphasized not changing the company's overall risk profile.

“More materially though, I think we'll see it when those combined cycles start to come online, which is in the early 2030s. But I do think you'll continue -- you'll see from us ultimately some earnings contribution in the back end of this decade, more meaningful into next.”

asked by Julien Dumoulin-Lambert · answered by Vincent Sorgi

Inquired about the near-term vs. longer-term dynamics of the Pennsylvania load forecast and whether the 2.8 GW Kentucky load forecast is fully in the plan.

For PA, near-term load is slightly down due to data center project delays, but the projects are still committed. For KY, the 2.8 GW pipeline is not fully in the plan; the current plan supports 1.8 GW. The 2.8 GW pipeline now includes more projects than previously, with some large projects at 50% probability. A new CPCN filing for additional generation (potentially smaller, quicker-to-deploy units) could happen as early as 2026 to meet this potential growth.

“So if the 2.8 gigawatts were to happen and there are some large projects in the 2.8 gigawatts that might only be in there at 50% probability. If some of those hit, we could blow through that 1.8 gigawatts very quickly.”

asked by Julien Dumoulin-Lambert · answered by Vincent Sorgi

Asked if proposed legislation for contracting with IPPs in Pennsylvania refers to existing or new build assets and the potential earnings benefit for the utility.

Management clarified that the legislation is for new generation only, aimed at promoting new plant construction for resource adequacy. It also includes provisions for utilities to own generation. The intention is for both the new load and generation to participate in PJM auctions, with new generation increasing supply to meet demand.

“So this is all in the context of resource adequacy, Angie, and trying to get new generation built in Pennsylvania. So within the legislation that's been proposed, there's really 2 main components.”

asked by Agnieszka Storozynski · answered by Vincent Sorgi