PPL Q1 Earnings Call Highlights

PPL (NYSE:PPL) reported higher first-quarter earnings and reaffirmed its 2026 and long-term financial targets, while executives highlighted regulatory developments, data center-driven load growth and potential generation investments across the company’s service territories.

President and CEO Vince Sorgi said PPL delivered “strong financial and operational results” in the first quarter, reporting GAAP earnings of $0.60 per share. Adjusting for special items, ongoing earnings were $0.63 per share. PPL reaffirmed its 2026 ongoing earnings guidance of $1.90 to $1.98 per share, with a midpoint of $1.94.

The company also remains on track to complete about $5.1 billion of planned investments in 2026. Longer term, PPL continues to project approximately $23 billion of capital investment through 2029, supporting average annual rate base growth of 10.3%. That forecast excludes any investments that could come from the company’s joint venture with Blackstone.

Sorgi said PPL is maintaining its long-term financial targets, including 6% to 8% annual earnings-per-share growth through at least 2029, with compound annual growth expected near the top end of that range. The company also continues to target 4% to 6% annual dividend growth.

Quarterly Earnings Improve on Kentucky Rates, Transmission Revenue

Chief Financial Officer Joe Bergstein said first-quarter GAAP earnings rose to $0.60 per share from $0.56 per share in the prior-year quarter. Special items totaled $0.03 per share, primarily tied to an ISO New England transmission return-on-equity reduction and customer and meter system integration impacts, partially offset by regulatory asset treatment of costs related to PPL’s IT transformation in Kentucky.

Ongoing earnings increased by $0.03 per share from the first quarter of 2025. Bergstein said the improvement was driven mainly by higher base rate recovery in Kentucky and higher transmission revenues from additional capital investments, partly offset by higher depreciation and financing costs.

Kentucky segment results increased by $0.03 per share, mainly due to new retail rates that took effect Jan. 1. Pennsylvania regulated results reflected higher transmission revenue from additional capital investments, offset by higher operating, depreciation and interest expenses. Rhode Island results benefited from higher rider revenue returns, including recovery through the infrastructure, safety and reliability mechanism and FERC formula rates, but were offset by higher depreciation expense.

Bergstein also noted that PPL completed a $1.15 billion equity units offering in February, with a purchase contract for PPL common shares settling in February 2029. He said the transaction has de-risked about two-thirds of the total equity needed to support the company’s current capital expenditure plan.

Pennsylvania Rate Settlement Advances

Sorgi said PPL Electric Utilities reached a settlement with the majority of interveners in its Pennsylvania distribution base rate case. The case was filed in the third quarter of last year after more than 10 years since the utility’s prior base rate case filing.

According to Sorgi, the settlement would result in bill increases of less than 4% across all customer classes, while keeping PPL Electric’s delivery rates among the lowest in Pennsylvania. The company also agreed to a two-year stay-out period after new base rates are implemented.

The settlement includes measures aimed at vulnerable customers, including increased hardship fund bill credits, improved access to assistance programs, elimination of reconnection fees, streamlined return of security deposits and a higher annual low-income weatherization budget.

PPL also created a proposed large load customer rate class and electric service tariff, which Sorgi said includes protections for other customers, including a 10-year load requirement and financial commitments. He said the proposed tariff and rate class would provide about $11 million annually to support residential low-income programs.

Administrative law judges recommended approval of the settlement without modification on April 17. PPL expects a final decision from the Pennsylvania Public Utility Commission by the end of June, with new rates effective July 1.

Data Center Demand Continues to Grow

PPL executives said data center development continues to expand in Pennsylvania. Sorgi said projects in advanced stages of planning now total 28.3 gigawatts, up 12% from 25.2 gigawatts discussed during the company’s year-end update call. These projects have executed letters of agreement or electric service agreements with financial commitments from developers.

Of that total, about 10 gigawatts now have signed electric service agreements, including contracts with QTS, AWS, PowerHouse, CoreWeave and others, Sorgi said. About 5 gigawatts of advanced-stage projects are already under construction.

In response to an analyst question, Sorgi said PPL’s current plan includes about $1.3 billion of incremental transmission capital expenditures. He said the 28-gigawatt pipeline could represent “at least another half a billion” of upside beyond the current plan, though some of that spending would likely occur beyond 2029.

Sorgi said PPL’s electric service agreements include prepayments, credit support and minimum load obligations designed to ensure developers, rather than existing customers, bear financial risk if projects do not proceed as planned.

Kentucky is also seeing increased load growth. Sorgi said LG and KU’s development pipeline now reflects 12.9 gigawatts of potential new load through 2032, up nearly 4 gigawatts from the year-end update. Nearly 12 gigawatts of active requests are tied to data center demand, with roughly one-third considered highly active. About 650 megawatts are under construction or agreement.

Based on updated planning assumptions, PPL now projects approximately 3.5 gigawatts of expected new load by 2032, compared with about 1.8 gigawatts assumed in its most recent Kentucky Certificate of Public Convenience and Necessity forecast.

Blackstone Joint Venture and Generation Options

Sorgi said momentum is building around PPL’s joint venture with Blackstone Infrastructure, which is focused on generation solutions tied to data center growth in Pennsylvania. He said interest from hyperscalers and developers remains high, and the joint venture is doing upfront development work so it can move quickly once commercial agreements are finalized.

The joint venture is engaged in discussions with gas pipeline companies to ensure access to low-cost Marcellus Shale gas for future generation projects. Sorgi said PPL is executing multiple gas turbine reservation agreements and has submitted requests for multiple generation projects into PJM’s interconnection queue for land sites currently under the company’s control.

However, Sorgi emphasized that PPL will not build projects without signed energy supply services agreements. He said the company expects any commercial structures to support a “utility-like risk profile” through long-term contracts.

During the question-and-answer session, Sorgi said it is “probably likely” that PPL would have something meaningful to announce this year regarding such agreements, though he cautioned that the contracts are complex and require review by hyperscaler customers.

In Kentucky, PPL announced partnerships with Rye Development and X-energy. The Rye partnership will evaluate a 266-megawatt pumped storage hydro project in Bell County, converting former coal mine land into an energy storage facility with up to eight hours of storage. Sorgi said the project’s commercial operation date is currently projected for 2031, with initial cost estimates of about $1.3 billion, excluding potential eligibility for a 50% investment tax credit. The project is not in PPL’s current capital plan or earnings projections.

PPL’s collaboration with X-energy will explore deployment of X-energy’s Xe-100 small modular reactor in Kentucky to support large load customers, including data centers, with long-term carbon-free electricity. Sorgi said any nuclear development would proceed through a disciplined, phased approach and would be gated by economics, regulatory certainty and capital discipline.

Rhode Island Investments and Affordability Measures

In Rhode Island, Sorgi said Rhode Island Energy received approval for more than $330 million of infrastructure investments through its latest annual electric and gas infrastructure, safety and reliability plans. Recovery began April 1.

The company’s Rhode Island base rate case remains on track, with evidentiary hearings planned for June and July and new rates expected to take effect Sept. 1. Rhode Island Energy is requesting a revenue requirement increase over two years, consisting of $181 million in year one and an additional $49 million in year two.

Sorgi said Rhode Island Energy also filed a new hold harmless commitment proposal expected to provide bill credits that would significantly offset the impact of the proposed base rate increase. The credits are expected to begin in the first quarter of 2027.

Throughout the call, executives emphasized affordability as a central focus. Sorgi said PPL does not view growth and affordability as competing objectives, adding that incremental load, disciplined investment and generation development can improve system utilization and help lower overall customer costs if executed properly.

About PPL (NYSE:PPL)

PPL Corporation is an energy company that owns and operates electric transmission and distribution infrastructure and provides related customer services. The company's core business centers on delivering electricity to residential, commercial and industrial customers through regulated utility operations, maintaining grid reliability, responding to outages and managing customer billing and account services.

PPL's activities include construction and maintenance of distribution and transmission lines, meter and grid management, and programs to support energy efficiency and the interconnection of distributed resources.

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