PPL Corporation (PPL) 2024 Q2 Earnings Call Summary
August 2, 2024 
PPL Corporation (PPL)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
- Strong Financial Performance: PPL Corporation reported second quarter GAAP earnings of $0.26 per share and adjusted earnings from ongoing operations of $0.38 per share, reaffirming its 2024 ongoing earnings forecast of $1.63 to $1.75 per share.
- Infrastructure Improvements: On track to complete approximately $3.1 billion in infrastructure improvements in 2024, enhancing reliability, resilience, and advancing a cleaner energy future.
- Seamless Integration and O&M Savings: Progressing well with the integration of Rhode Island Energy and on pace to achieve annual O&M savings target of $120 million to $130 million.
- Earnings and Dividend Growth: Well positioned to achieve projected 6% to 8% annual earnings per share and dividend growth through at least 2027.
- Utility of the Future Strategy: Focused on delivering a net zero energy system by 2050, with significant investments in grid reliability, resiliency, and clean energy transition.
Pessimistic Highlights
- Higher Interest Expense: The increase in earnings was partially offset by higher interest expense, primarily due to higher debt balances.
- Regulatory Denial: The Pennsylvania PUC denied PPL's request to classify $84 million of planned investments in predictive failure technology as being eligible for recovery through the DSIC.
Company Outlook
- Positive Outlook: PPL is on track to achieve at least the midpoint of its 2024 earnings forecast, with strong financial performance and strategic investments in infrastructure and clean energy. The company is well-positioned for sustained growth and efficiency improvements through its Utility of the Future strategy.
Q & A Highlights
Q: Can you discuss the impact of the PJM auction results on transmission investments and customer bills? (Shar Pourreza, Guggenheim Partners)
A: The PJM auction results indicate a need for generation and transmission investments. PPL is exploring additional transmission solutions and advocating for legislative changes to support resource adequacy and reduce customer bill volatility. The higher capacity prices could impact customer bills by $10 to $15 per month, but data center development could offset this increase over time. (Vince Sorgi)
Q: What are the implications of the PJM auction results for new gas plant construction timelines? (David Arcaro, Morgan Stanley)
A: The timeline for building a new gas plant in PJM depends on various factors, including the type of plant and existing infrastructure. Peakers could be built in 18 to 24 months if turbines are owned, while starting from scratch for a combined cycle could take four to five years. (Vince Sorgi)
Q: How does the 5 gigawatt data center opportunity impact customer bills, and what's the timeline for these benefits? (Ryan Levine, Citi)
A: The 5 gigawatts of data center demand could reduce residential customer bills by about $15 a month once fully online, with the first gigawatt expected in 2027 and an additional gigawatt each year thereafter. Formal announcements are expected by the end of the year or early next year. (Vince Sorgi)
Q: Can you provide details on the Kentucky IRP filing and potential for new generation? (Julien Dumoulin-Smith, Jefferies)
A: The Kentucky IRP filing in October will include a comprehensive load forecast and analysis of generation needs. If additional generation is necessary, it would likely not come online until around 2030. Transmission upgrades in Kentucky related to data center demand are also planned. (Vince Sorgi)