Release Date: May 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PPL Corp reported a 12.5% increase in ongoing earnings per share from the previous year, driven by returns on capital investments and higher sales volumes.
- The company is on track to complete approximately $3.1 billion in infrastructure improvements in 2024, enhancing grid reliability and advancing a cleaner energy mix.
- PPL Corp is well-positioned to achieve a projected 6% to 8% annual earnings per share and dividend growth through at least 2027.
- The Rhode Island PUC approved $326 million in planned spending for infrastructure, safety, and reliability, which includes significant capital investments.
- PPL Corp has secured positive regulatory outcomes, such as the approval of their infrastructure plans in Rhode Island and the filing of a petition in Pennsylvania to raise the distribution system improvement charge cap.
Negative Points
- The company faces challenges from new EPA regulations which could impact resource adequacy and require significant capital investments or generation replacement in the future.
- Higher interest expenses partially offset the gains from higher sales volumes and returns on capital investments.
- The outcome of the petition to raise the distribution system improvement charge cap in Pennsylvania is still pending, which could affect future financial planning.
- There are ongoing legal and regulatory processes that could affect the implementation and impact of the EPA's new rules on the company's operations.
- The integration and related expenses from the acquisition of Rhode Island Energy impacted earnings, with special items of $0.12 per share recorded in the first quarter.
Q & A Highlights
Q: Can you provide more details on the timing of the spend for the 3 gigawatts in Pennsylvania as it relates to the current plan through 2027?
A: (Vincent Sorgi - PPL Corporation - President, CEO & Director) Yes, we have signed agreements for that 3 gigawatts. These would be for in-service dates beginning in 2026, and we would be making the bulk of our investments right in time for those initial service dates.
Q: If the DSIC waiver process were unsuccessful, how would that impact the rate case cycle plan and any impact to the distribution spend plan as it's laid out today?
A: (Joseph P. Bergstein - PPL Corporation - Executive VP & CFO) It wouldn't impact our distribution capital plans as those are necessary investments that we'll continue to make. It could potentially impact the timing of our next rate case, likely timing could be as early as 2026.
Q: Is there new generation or additional generation attached to these data center contracts?
A: (Vincent Sorgi - PPL Corporation - President, CEO & Director) In Pennsylvania, the investment opportunity is really just the transmission investment. In Kentucky, the investment opportunities are a little bit smaller, but the biggest opportunity from an investment perspective is really on the need for additional generation in Kentucky.
Q: How are you thinking about the construction timeline and any sort of risks on approvals for the data center projects?
A: (Vincent Sorgi - PPL Corporation - President, CEO & Director) We are currently spending money on the development for the ones that we have the signed agreements, we're starting those now to be ready for a 2026 initial service fee. We feel good about our ability to get these projects approved through the regulatory process.
Q: Is the transmission agreement tied to a new generation source?
A: (Vincent Sorgi - PPL Corporation - President, CEO & Director) It is not tied to any specific generation. Ultimately the market through PJM and/or other means needs to continue to build new generation to keep up with this demand.
Q: Is there a procedural schedule on the DSIC application, the raising cap or specific timelines for us to watch?
A: (Vincent Sorgi - PPL Corporation - President, CEO & Director) There isn't a specific procedural schedule, although we do expect to basically have a decision on both the DSIC waiver and the LTIP filing by the end of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
