PPL's Q2 2025 Earnings Call: Key Contradictions on Generation Capacity, Capital Needs, and Joint Ventures

Generation build and market conditions, capital structure and equity needs, generation capacity needs and resource adequacy, timing and progress of the Blackstone JV, CapEx needs and solutions for generation are the key contradictions discussed in PPL's latest 2025Q2 earnings call.



Financial Performance and Earnings Outlook:
- PPL reported second quarter GAAP earnings of $0.25 per share, with second quarter earnings from ongoing operations of $0.32 per share.
- Despite the timing of certain expenses impacting results, PPL remains confident in achieving at least the midpoint of its 2025 ongoing earnings forecast of $1.81 per share.
- The company attributed this confidence to assumptions of higher returns on capital investments and lower O&M costs in the second half of 2025.

Infrastructure Improvements and Capital Investments:
- PPL is solidly on track to complete over $4 billion in infrastructure improvements in 2025 to enhance grid reliability and resiliency.
- The company projects $20 billion in infrastructure improvements from 2025 to 2028, resulting in average annual rate base growth of 9.8%.
- These investments are supported by new technology and AI applications, aiming to improve efficiency and reduce operational costs by $150 million annually.

Regulatory Updates and Generation Capacity:
- PPL reached a stipulation agreement for new generation construction in Kentucky, supporting approval of 2 natural gas combined cycle units with a total capacity of 645 megawatts.
- The agreement included mechanisms to recover costs of new plants, maintaining affordability for customers and ensuring regulatory approval for additional investments.
- The company expects to build on its prior year success and deliver cumulative annual O&M savings of $150 million in 2025 compared to 2021.

Data Center Strategy and Economic Growth:
- PPL's Pennsylvania subsidiary is well-positioned to meet the demand from data centers, with approximately 14.5 gigawatts in advanced stages of development.
- The company will support these developments through its new joint venture with Blackstone Infrastructure to build new generation sources for data centers.
- PPL expects this strategy to support economic growth, lower customer utility bills, and is optimistic about achieving its long-term earnings and dividend growth targets.