PPL (NYSE:PPL) used its fourth-quarter and full-year 2025 earnings call to highlight execution against its 2025 financial targets, outline a larger multi-year capital plan, and provide updates on rate cases and rising demand tied to data centers in Pennsylvania and Kentucky. Management also discussed steps it is taking to address what it described as growing generation supply constraints in PJM, including a joint venture with Blackstone aimed at “bring your own generation” solutions for hyperscalers.
2025 results and operational performance
President and CEO Vince Sorgi said the company finished 2025 “exactly where we said we would,” citing safe and reliable electric and natural gas service to more than 3.5 million customers and achievement of its stated financial targets. He pointed to “first quartile or near first quartile” transmission and distribution reliability performance in all jurisdictions and “top decile” generation performance in Kentucky.
On the financial side, CFO Joe Bergstein said full-year 2025 GAAP earnings were $1.59 per share, compared with $1.20 per share in 2024. Excluding special items, ongoing earnings were $1.81 per share, up $0.12 year over year and in line with expectations. Sorgi said ongoing EPS increased 7.1% versus the prior year and was in line with the midpoint of the company’s forecast.
Bergstein attributed year-over-year improvement primarily to incremental returns from regulated capital investment, higher transmission revenues, rider recovery, and lower operations and maintenance (O&M) expense, partially offset by higher interest expense. Segment results cited on the call included:
- Kentucky: +$0.09 per share year over year, driven by higher sales volumes largely due to weather, higher earnings from additional capex, and lower O&M, partially offset by higher interest expense.
- Pennsylvania: +$0.04 per share, led by higher transmission revenue and distribution rider recovery, plus higher sales volumes and lower operating costs, partially offset by higher depreciation and interest expense.
- Rhode Island: -$0.02 per share versus 2024; and -$0.06 per share versus the company’s 2025 forecast due to “true ups” and higher operating costs including system costs and non-recoverable storm costs. Bergstein said these items are not expected to recur.
Updated outlook: 2026 guidance, extended EPS growth target, and larger capex plan
PPL issued 2026 ongoing EPS guidance of $1.90 to $1.98, with a midpoint of $1.94 per share, which Sorgi said represents 7.2% growth from 2025. The company extended its 6% to 8% annual EPS growth target through at least 2029 and said it expects the EPS compound annual growth rate through 2029 to be near the top end of that range, based on 2025 ongoing earnings.
Management said growth is expected to strengthen beginning in 2027 as the “full year impacts” of current rate cases take effect. In response to an analyst question, Bergstein added that the growth between 2027 and 2029 is “generally speaking, pretty linear.”
The updated capital plan calls for $23 billion of investment from 2026 through 2029, up from $20 billion previously. Bergstein said the increase is largely driven by electric transmission and distribution investments, including nearly $2 billion higher transmission spending (with nearly $1.3 billion tied to Pennsylvania data center development and reliability projects and about $700 million supporting Kentucky hardening and smart grid deployment) and an $800 million increase in electric distribution investments focused on Pennsylvania and Kentucky. The company estimates rate base CAGR of about 10.3% from 2025 to 2029.
PPL said the plan supports targeted credit metrics, including 16% to 18% funds from operations (FFO) to debt throughout the period and a holding company to total debt ratio below 25%. The company expects total equity needs of about $3 billion from 2026 to 2029, including about $1 billion already executed through forward equity transactions in 2025, leaving about $2 billion to be issued through 2029. As it issues equity to fund the plan, PPL adjusted its dividend growth target to 4% to 6% annually.
Regulatory updates: Kentucky orders, Pennsylvania and Rhode Island rate cases
Management discussed final Kentucky rate case orders issued earlier in the week. Sorgi said the Kentucky Public Service Commission approved an aggregate increase of about $233 million in annual electric and gas revenues, within $2 million of a stipulation reached with most interveners. The commission also approved allowed returns on equity of 9.775% for both utilities and 9.675% for capital-related mechanisms, which Sorgi said were 35 and 32.5 basis points higher than previously approved levels.
The company highlighted approval of a pilot generation recovery mechanism supporting recovery of and return on new generation and energy storage investments previously authorized by the commission, as well as certain costs tied to keeping Mill Creek Unit 2 online beyond its previously scheduled 2027 retirement date. The commission also approved an “extremely high load factor tariff” intended to protect existing customers from impacts of large data center loads.
However, Sorgi said the commission did not approve a proposed earnings sharing mechanism that had been tied to an agreement to stay out of Kentucky rate cases through mid-2028. As a result, PPL said it is reassessing the timing of its next Kentucky rate case and plans to file a motion for reconsideration on several items.
In Pennsylvania, Sorgi said evidentiary hearings in the ongoing rate case concluded in one day and were largely focused on data centers’ impact on customer affordability, along with proposed changes to net metering rules for non-load generators such as solar projects connecting to the distribution grid. He said PPL is actively working toward a settlement, but emphasized that a constructive outcome “does not hinge on a settlement” and that the company is prepared to litigate if necessary. A decision is expected in June, with new rates effective July 1, 2026.
In Rhode Island, management said Rhode Island Energy filed its first base rate request since 2017, seeking a two-year phased increase and a redesigned low-income rate “without raising costs for our other customers.” A decision is expected in summer 2026, with new rates effective September 1, 2026. The company also filed annual electric and gas infrastructure, safety and reliability (ISR) plans totaling about $350 million and expects a decision by the end of March. PPL said it remains committed to reaching a new “hold harmless” settlement, noting that a prior settlement provided about $70 per month credits for combined electric and gas customers during winter months of 2026 and 2027.
Data centers, economic development, and the push for new generation
PPL provided updated figures on large load interest, particularly data centers. In Pennsylvania, the company said projects in advanced stages of its data center interconnection pipeline total about 25.2 GW, up 23% since the prior quarterly update. Management said it expects at least 10 GW to be under electric service agreements (ESAs) by the end of the first quarter, and noted that ESAs include prepayments, credit support, minimum load requirements, and provisions that require customers to pay about 80% of forecasted load until extension costs are recovered.
In Kentucky, management said its pipeline reflects more than 9 GW of potential new load through the early 2030s, including more than 8 GW tied to data centers, with about 4 GW considered highly active and 500 MW under construction. Sorgi said probability-weighted demand growth projections remain about 2.8 GW, about 1 GW more than the load forecast reflected in its 2025 CPCN. He said if this growth materializes, “additional generation resources will absolutely be required,” and later added that PPL could potentially pursue a CPCN filing as early as 2026 to keep pace with ramp rates.
Affordability efforts and Blackstone joint venture positioning
Sorgi emphasized affordability as a core strategic commitment, stating that since 2022 the company has reduced O&M by nearly 3% annually and reached $170 million in run rate savings by the end of 2025—about $20 million ahead of its target pace. He said around $100 million of savings benefited Kentucky customers and reduced the increases needed in recent Kentucky rate cases, with residential bill increases in the 5% to 11% range after about five years without base rate increases. Looking forward, PPL projects O&M growth of about 1% annually in its updated plan, which management said is well below inflation.
Management also focused on supply-driven bill pressures in PJM, noting that since December 2020, energy supply costs have increased by about 200%. Sorgi said PPL Electric’s average monthly residential bill increased roughly $68 over that period, with about $50 of the increase tied to energy supply costs. He argued that increasing generation supply is the “single biggest driver” of long-term affordability in PJM and said more reliable, dispatchable generation is needed to meet rising demand.
To address those needs, PPL highlighted its strategic partnership with Blackstone to build, own, and operate new generating stations to power data centers. Sorgi said the joint venture has secured contracts for several strategic land parcels and is securing natural gas capacity. He also said PPL has broadened its generation solutions beyond combined-cycle gas units, which can take about five years to come online, to include other technologies that could come online in the 2028 to 2029 time frame. Management did not specify the technologies, but in Q&A said they could include “fuel cells or storage” among other options.
PPL said it has not embedded any joint venture earnings, capex, or contributions in its updated business plan, but management said earnings contributions could begin as early as the back end of the planning horizon depending on contract timing and technology selection. In Q&A, Sorgi said PPL would not necessarily wait for an earnings call to announce a significant agreement and could communicate off-cycle. The company also said it is evaluating whether the joint venture would participate in any special PJM auction designed to incentivize new generation, contingent on final structure and consistency with the risk profile PPL has set for the venture.
Separately, management discussed support for proposed Pennsylvania legislation that would allow regulated utilities to enter into long-term resource adequacy agreements with independent power producers to support construction of new generation, and potentially allow utilities to build and own generation in certain circumstances. Sorgi said these concepts are aimed at “new build,” not existing generation.
For shareholders, PPL’s board declared a quarterly dividend of $0.285 per share payable April 1 to holders of record March 10, an increase of nearly 5% and an annualized dividend of $1.14 per share. Management said it expects the payout ratio to remain in a 50% to 60% range over the plan period.
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.
