We'll also refer to non-GAAP measures, including earnings from ongoing operations or ongoing earnings on this call. Adjusting for special items, second quarter earnings from ongoing operations were $0.32 per share. We also continue to project $20 billion in infrastructure improvements from 2025 to 2028, resulting in average annual Rate Base Growth of 9.8%. This does not include any capital expenditures that may be required under the new Joint Venture agreement with Blackstone Infrastructure to build new generation in Pennsylvania to directly serve data centers.

Lastly, we're well positioned to achieve our projected 6% to 8% annual earnings per share and dividend growth through at least 2028, with EPS growth expected in the top half of that range. It has been nearly five years since we saw the base rate increase in Kentucky. During the period from 2021 through 2024, the cumulative amount of inflation was 19.7%, which is significantly higher than the overall percentage increase of 10.7% that the companies are seeking in these cases. Earlier this month, we agreed with the Advocacy Section of the Division of Public Utilities and Carriers to settle the Hold Harmless Commitment related to our acquisition of Rhode Island Energy.

In summary, the acquisition accounting resulted in the elimination of certain accumulated deferred income taxes, which resulted in an increase in Rate Base. This is a very constructive solution that significantly improves affordability for Rhode Island customers when bills are at their highest in the winter, while at the same time satisfying a significant acquisition commitment. Now let's turn to Slide Seven and the exciting economic growth in Pennsylvania that is currently being powered by data centers. Our Pennsylvania subsidiary, PPL Electric Utilities, is particularly well suited to meet this demand.

What went well
  • PPL reported second quarter GAAP earnings of $0.25 per share and ongoing earnings from operations of $0.32 per share, and remained confident in achieving at least the midpoint of its 2025 ongoing earnings forecast of $1.81 per share.
  • The company filed a constructive stipulation agreement with many intervening parties in the Kentucky CPCN proceeding, supporting two 645 MW natural gas combined cycle units (Brown 12 and Mill Creek 6), an SCR for Ghent Unit 2, AFUDC treatment during construction, and the life extension of Mill Creek 2.
  • PPL announced a new joint venture with Blackstone Infrastructure to build new generation in Pennsylvania to serve data centers, structured in a regulated-like manner with long-term contracted generation and creditworthy counterparties.
  • The company's Pennsylvania data center pipeline in advanced stages of development grew to about 14.5 GW, up from 11 GW on the prior call, with nearly 5 GW publicly announced including projects tied to Amazon and CoreWeave.
  • PPL settled the Rhode Island Energy Hold Harmless Commitment for a net present value of $155 million, agreeing to credit customers in the winter months of 2026 and 2027 when bills are highest.
  • The company expects to deliver cumulative annual O&M savings of $150 million in 2025 versus its 2021 baseline and continues to project $20 billion in infrastructure improvements from 2025 to 2028, driving average annual rate base growth of 9.8%.
What went wrong
  • Second quarter ongoing earnings of $0.32 per share were down $0.06 from Q2 2024, driven by the timing of certain operating costs and true-ups (about $0.03), favorable weather in Q2 2024, and higher interest expense (about $0.01 each).
  • Industrial sales contracted in both Pennsylvania and Kentucky, with the Pennsylvania decline driven by lower sales from one steel-industry customer and the Kentucky softness driven by smaller industrial customers and cooler May weather.
  • The Rhode Island segment results decreased by $0.03 per share and the Pennsylvania regulated segment decreased by $0.02 per share versus the prior-year period, primarily due to the timing of certain operating costs and a transmission revenue true-up.

Guidance Changes

MetricPeriodCurrent guidance
2025 ongoing earnings per shareFY2025at least midpoint of $1.81 (reaffirmed at least midpoint)
Annual EPS and dividend growththrough at least 20286% to 8%, with EPS growth in top half of range (maintained)
ATM equity issuanceFY2025about $350 million issued in first half, approaching full-year need (on track)

Performance Breakdown

MetricYoYNote
GAAP EPS $0.25 vs $0.26 in Q2 2024 Special items of $0.07 per share primarily from IT transformation costs and Rhode Island integration costs.
Ongoing EPS $0.32 vs $0.38 in Q2 2024 (down $0.06) Timing of operating costs and true-ups, favorable prior-year weather, and higher interest expense.
Kentucky segment flat vs Q2 2024 Lower sales volumes from favorable prior-year weather offset by several insignificant factors.
Pennsylvania regulated segment down $0.02 per share Higher operating costs and timing of a transmission revenue true-up, partially offset by returns from capital investments.
Rhode Island segment down $0.03 per share Higher distribution revenues offset by timing of certain operating costs and other items.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Data center load pipeline (PA)11 GW in advanced stages (prior call)about 14.5 GW in advanced stages, nearly 5 GW publicly announcedGrowing
Blackstone JV for new generationnot previously in plannewly announced 50/50 JV to build regulated-like contracted generation in PANew initiative
Regulatory cadencelong stay-outs across jurisdictionsfiling rate cases in Kentucky, Pennsylvania (first in a decade), and settling in Rhode IslandReturning to normal cadence
Transmission capital for data centers (PA)$400 million in current $20 billion planprojected need of $750 million to $1.25 billionIncreasing

Q&A Summary

Can you elaborate on the $17-$19 billion of CapEx needs and whether there's a preference for the JV or regulated generation?
Sorgi said the $17-$19 billion estimate reflects PPL's service territory alone if all 14.5 GW of advanced-stage data center load materializes, taking the territory from net long to net short by 7.5 GW. He expects the JV, existing IPPs, and potentially PPL Electric Utilities (if permitted) to each take a piece, while keeping the activity in proper proportion so as not to significantly change the company's risk profile.
How would power risk be allocated within the JV if PPL wants to keep a similar risk profile?
Sorgi said Blackstone is supportive of a regulated-like approach: long-term contracted generation with creditworthy counterparties such as trillion-dollar hyperscalers or in-state utilities, with ESA terms providing a regulated-like risk profile that preserves PPL's credit metrics. Contracts would be reviewed with rating agencies before sizing the venture.
Any thoughts on future equity needs and using forwards to de-risk the plan?
Bergstein said the ATM program remains a cost-effective means to issue equity, with $350 million issued in the first half of the year against an indicated $400-$500 million for the year, so PPL is approaching its full-year need and will continue to evaluate options for efficient cost of capital.
What is your preferred solution to the PJM capacity auction and lack of new generation?
Sorgi said he can't predict PJM's future auctions but explained the JV was created to address the lack of new generation, noting recent auctions will raise customer bills about $20 a month with no new generation to show for it. He said IPPs are reluctant to build because new generation cannibalizes their existing fleets, so PPL is pursuing both supportive PA legislation and the Blackstone JV.
On the Kentucky stipulation, how much incremental generation capacity do you have and how much more could you need?
Sorgi said adding Mill Creek 2 back (a 300 MW plant) roughly offsets the deferred 400 MW battery against the ~1.8 GW in the CPCN. If the additional ~700 MW of load materializes, PPL would likely need to refile the CPCN for at least the 400 MW battery, and with 8.5 GW of total demand being tracked could be back for more generation in the not-too-distant future.
Why are you filing rate cases sooner than expected, and are the lower earnings weather-related?
Bergstein said it has been many years since PPL has been out of rate cases in all jurisdictions (Pennsylvania last increased in 2016, Rhode Island in 2018 under National Grid), so given the duration of stay-outs the company needs to go back in. Sorgi added PPL expects a more normal cadence going forward, with O&M efficiencies returned to customers to help fund incremental capital.

More on PPL Corp

Reported 2025-07-31 · figures from the PPL Corp Q2 2025 earnings call.

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