PPL - Earnings call transcript Q1 2022

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Operator

Good morning, everyone, and welcome to the PPL Corporation's First Quarter Earnings Conference Call. [Operator Instructions]. At this time, I would like to turn the conference call over to Andy Ludwig, Vice President of Investor Relations. Sir, please go ahead.

Andrew Ludwig

Thank you, and good morning, everyone. Corporation on PPL Financial Quarter the Results. to Conference First Call XXXX Welcome for our website. presentation this provided this We slides in the section morning Investors earnings of our on issued release

attention Before started, brief statement. we X I'll your cautionary get and to draw a Slide

presentation statements. about operating could Please SEC the and other forward-looking refer results differ materially filings statements results to differ statements. results forward-looking PPL's discussion actual that events. to cause Actual may contains of for from today or Our the future future these factors a forward-looking appendix from

We from will on adjusted also this refer operations margins to non-GAAP measures, including gross ongoing earnings call. and

For call Joe Financial the Officer; reconciliations to our this refer morning Operating please and Greg are Vince. Bergstein, Chief Dudkin, PPL GAAP With turn to CEO; now the Chief that, Vince I'll measures, and call on the appendix. Officer. to Participating Sorgi, over comparable President

Vincent Sorgi

everyone. our update. you and Andy, appreciate joining We you, for us good Thank investor quarter morning, first

and first today's the status for Moving our of and And your detailed will on update Slide then with Island. call. an time Rhode always, first our ample results. of quarter provide agenda planned of leave in morning this X review Narragansett of acquisition highlights to quarter Joe begin financial performance I'll the Electric as a for we'll questions.

remain repositioning for success. with start the provide strong and year ongoing $X.XX Turning per share to on our to from in Slide $X.XX compared Adjusting results were share. PPL per of special we expectations as quarter ago. we for first announced a earnings and X. with earnings operations growth Today, line These per reported items, quarter first $X.XX were long-term share year a focused

the Carriers we reverse On are meantime, engaged with we Attorney received decision, acquire from in the this office In to division extensive timely Public to and did demonstrate asked Narragansett and Utilities the the Rhode Rhode with hearing, raised its February National judge from or superior particular, We detailed anticipate Electric Island Grid. division in and General's is of the office Attorney April National correctly General's statutory stated Attorney XX in Judge the actively Attorney this Moving close Grid. appeal. late General's with Stern office to the and April quick Island's Island, on the resolution the the believe the division interest record all properly could approval publicly the prepared General's contends that until XX, and order appealed case heard. division requirement. approved for the The the Rhode its to misapplied found address evidence parties. heard on to Attorney relatively approval. on to because settlement of statutory division oral the state's and the transaction. of in to Attorney matter the decision analysis issues interest the climate approval failed stay and also General's promptly a that instructions In best arguments applied consider discussions statutory he the a appeal standard obtained Judge remain the remand will issue the vacate that met for the a Superior Island matter and soon decision. the court the office of standard back be that Attorney the General Stern General. that to The state's division ask not the by the At adequately PPL The The General in Court contends division's to Attorney appeal standard approval act disagree decision. public the Rhode in We the

Electric Narragansett significant work to eager all efforts. about we team decarbonization As and with state's along, and excited opportunity at Rhode the Island value drive shared the to the support for customers are we've talented

We believe we an an will excellent proceeding. positive PPL outcome excellent reach is a of fit and that is for for We that in PPL Narragansett Rhode Electric Island. the confident continue remain to the state

provide are Given I we the I the get time. the not all today's in can about pending a litigation, when position at details to appreciate additional you matter on session. respecting Q&A say process to this said have I we this And call.

X Turning highlights. few a operational to and Slide

KU's the support continued other carbon COX and Meanwhile, banner Low-Carbon includes on oxygen novel year Kentucky to LG&E also support development. Hydrogen Andy a Utilities University new the joined seeks stakeholders the energy and administration as We're which the the Initiative, new late a Kentucky coming is sponsorship continue very opportunities with to the Research. KU's Environment Resources EPRI's drive enable announced capture KU's supports partnership Beshear and commitment solution a energy clean economic Low-Carbon producing to future. clean In by focused new off development in Cabinet. Governor, the air attracting which initiative Energy low-carbon and and excited as energy from LG&E streams. value-added also a strategy LG&E join the hydrogen to Kentucky's directly and excited focuses promote with carriers evolves. and initiative business new and for cycle plants R&D from capturing will with continue last energy EPRI's of Our advance Kentucky on Hub Energy well and to hydrogen. economic We're February, making of and our Kentucky pillar PPL's we commitment consistent LG&E Kentucky, The state's Hydrogen this technology is Initiative gas energy is with advance innovation is and such in as energy Resources Kentucky University carbon strategy state. to a for to low project manufacturing state's KU Applied hydrogen technologies. fall as clean initiative, key and Kentucky, to partnership engage and for digital clean of the The natural which seek options and growing hydrogen as of of and Hub part Center strategy, new to combined

As service that LG&E we XXXX announcement transformation it Kentucky's schedule XXX the call, battery and will $X In effort X its at kv to estimated has Utilities support within a Public the territories. plans of our LG&E has it in to procedural set Kentucky in regulation KU the a and the power industry's economic our X Service project. economic Kentucky billion meet construct state highlighted gas The will build capital and support the auto state The quarter project line. of ability to X Kentucky development of our The new help Glendale put forefront lines complex complex project will serve lines XXX facility cost build million. to in time success to history. and half in third be included Ford's the approval this Commission $XXX and support called electric gas kv regulatory $XXX is mile to that development requested on manufacturing interconnection Glendale, Ford's the Glendale, million to vehicles, single-largest substations. recently Glendale to an nearly construction built

identified LG&E just and as we reduce high-impact continue the through by expands also our to expanding focused advancing tool, improving than the grid while and in PPL the awards these of opportunities our remain and digital the space Slide efficiency increases our our by customers' study award Across electric experience and sustainability interact another in This Improving develop is to tool Electric for to future. customer continued nation most research grid. and goals. X an lead use were score XXth this efforts costs. million-megawatt safety, adaptive of grids In use for final and application scores. technology further KU the our and one very to another of experience progressing research are tool to emissions reliability towards for on on our are water we online which, the example largest of the recognized for natural in development related the in automation, the hours majority PPL businesses, in Experience Study. overall safer, Digital industrial LG&E to In of This February, and electrification on focused In electrification received Utilities well be significantly smarter, EPRI, our Each assesses technology mobile XXXX, Electric's improved with also more advanced Electric assessment and customers. received electric, value EPRI's utilities declining on to recently recognized through Pennsylvania, self-healing lower our options, identify technology awards. continue of initiatives, while innovation. gas annual and by winning reduce were study Power's in Utilities apps and we These a way of surveyed PPL In customers we X. continues addition Utility progress portfolio J.D. the technologies technology to yet commercial project The this efforts customers. to Kentucky, transfer the area ranked these to self-service for use how electrification companies emissions. first Shifting the KU gas drive of customers natural of U.S. utilities update the experienced in

issues addresses to wide progress sustainability key governance in a our approach progress. and our highlights April annual ESG XX, range to and continue we advancing make On initiatives. We XXXX social environmental, across and performance which of published PPL report, our

the and position expect in circumstances filled our believe capacity unabated other energy clean As any this emissions the our enterprise-wide our unabated sustainability to megawatts DEI schedule, associated in Officer approximately In that energy economic commitment will today current commitment in or facility from around of life. to our to efficient highlighted XXXX. report, XXXX. and developments, reflects new coal-fired to are X,XXX regulatory on retirement the XXXX. There and coal this in on achieve Trimble economics company's made commitment by plant's and innovation, technological We transition. was lead advances discussion XXXX. This other highly our County are to Chief development at over strategy XXXX. coal not from The net-zero key support of to the we of we fleet relative burn report, with by is research carbon our mandates coal coal build X impact and by expanded highlights committing reduced XXX the our and progress have the not sources timing facility, the XXX end its and to technology Based of be Diversity our of burn new just future expectations we cleaner which megawatts fully we completed could future expect number created a on megawatts our that continued that

to leading of will contributions benchmarks practices Joe transparent have Board's and oversight strategic political political Finally, added CPA Zicklin and disclosures and Sustainability this area. Nominating U.S. the by public for operational function That policies further Joe? in of Nominating update. in the trendsetter Committee. to our I'll ranking turn by companies. the Committee I a my disclosures which that accountability and us governance strengthen Index, PPL's would call our note overview. we financial have Governance, the Sustainability now area over the Oversight concludes this and the earned Governance,

Joseph Bergstein

Thank first quarter you, on and our I'll morning, Slide good segment cover everyone. Vince, X. results

first acquisition noted, share, Adjusting share. Electric. primarily items $X.XX integration share. from quarter items, with were expenses planned first first operations $X.XX earnings due per of quarter these to associated ongoing were of Vince per the $X.XX for we per Special quarter XXXX the GAAP Narragansett reported in As earnings

Turning ongoing drivers. to segment the

higher-than-expected segment Regulated higher on additional by partially transmission Pennsylvania volumes. Pennsylvania capital earned higher results peak in earnings primarily The Our $X.XX were share, demand, increases The costs. transmission offset expense, investments and increase. including maintenance in a year-over-year and were $X.XX driven returns per operation by higher improved sales storm

segment, were Kentucky the earned Other effective was higher Other and prior the offsetting increase increase following $X.XX year we primarily WPD. in Partially due from primarily base driving additions ago. at rates PP&E. X, Corporate compared the of was our X year. per recapitalization expense, primarily to results resulting July The at the sheet lower earnings results $X.XX first over Results share interest higher to due and quarter, to Turning of higher sale depreciation this XXXX. to increase included retail $X.XX the comparable Corporate Factors to balance

to due billion concludes results, as $X first the a from and slide, this XXXX increase of $X.XX completed in That remarks, EPS in I'll segment included comments. accretion over is buybacks reflected closing resulting some my our the Finally, back share Vince for prepared on turn in quarter to call XXXX. the

Vincent Sorgi

Joe. you, Thank

earlier noted my remarks, state diligently I appeals we in in work Island. through As the process continue Rhode to

lead built delayed sheets sharing to look to we long-term and keeping reliable update, are in acquisition, Island introducing our while this the With one has competitive to operator a of of and following closing employees to PPL, positioned the dividend we by energy Day Investor is growth, strategic customers. a service let's appeal Q&A. and And transition, open a the we call look for Rhode including future, the transaction, we confident at new forward our the utility to complete best-in-class innovative, deliver for PPL for clean sector, the will strongest closing. While forward energy affordable the growth an the that operator, that, balance an projections earnings backed continue

Operator

comes today Pourreza question [Operator Guggenheim from Shar Instructions]. our Partners. from And first

Shahriar Pourreza

an Rhode underway, -- were right? occur? wait the the with Superior I could would the not appeal Is if Any close while Court. favor, Supreme court stay? your you state deny Island, the your filing? would timing is guess, I that on for you to then guess, still it And in assume Vince, I So process in this rules to if general immediate thoughts to favor Court AG starting,

Vincent Sorgi

Yes, Shar.

litigation Let Rhode settling AG's in said, And I in with just engaged discussions that reiterate the active me we are Island Rhode in Island. we're as office.

timely at some process. really I out Day my Investor have this the in you the I and that can't shortly but than to where any new what prepared to we're that close reiterate following we we'll I'll look really rolling remarks. just again, more that look, appreciate already you questions said forward So I about But close. in the the may matter, a are confident an transaction say respect in PPL I've need fashion

Shahriar Pourreza

then just the buybacks, you the for and buybacks just appreciate And you I between CapEx Island? this on Rhode about a in housekeeping. highlighted following the toggle more unallocated as just remind question you Joe CapEx the had? at on point, line in that that's are thinking how you increase us approach finish No, fair. cash is XQ that. guess I Can what approximate maybe balance we here the which

Joseph Bergstein

Yes.

acquisition conclude we'll that, out the lay anything have Day NECO of we all for process. at when details But we So the Shar, Day. we'll the have clearly, I it. we Investor mean when Investor that cash at available beyond the discuss

Shahriar Pourreza

about last Got Kentucky And for of state there's one and in a topic an to the But filed? And Analyst me it. It's jump Day, prior take just Okay. up you're just that's back you one a more coal does IRP queue. is within just as the thinking slightly I'll then there. aggressive about here the the as filed. we're pop that's there and the thinking opportunity out with outlook what maybe there that versus trajectory approach recently obviously,

Vincent Sorgi

the PPL -- and company's Shar. reason, we're comprehensive the it I'll on new update calling Well, for we'll say our at a outlook, again, Investor Day, that a the provide just strategy

our a So there, earnings of while how detailed investment will we been the going of translates really and really, financial but jurisdictions, out growth the out some long-term opportunities for where the each see we've laying that know growth I had forward provide in and since dividend into It looking this market. it's projections. all we're the near-term to projections and

at we'll the all Day cover Investor that sure. So of for

Shahriar Pourreza

helpful. there's that. off No, could base of trepidations think what you mean be I earnings and would what that's some the around I grow

welcome. So it would be very

Vincent Sorgi

very deliver. growing say, out our we're on lay just all competitive, We're having we'll Investor to that confident I'll look, growth and going Day. we're -- at Yes. focused earnings

Operator

from from comes question Campanella Credit next Suisse. Our Nicholas

Nicholas Campanella

it's Kentucky since wanted now helpful. for and today. there out And I -- amount be that of any you or to retirements undepreciated to be base you on even through up just the recent discuss still can framework thinking came if kind case but portfolio through just I the the that's you place actually value and not, acceleration, follow the quantify that's believe that again just Can there? of rate just of the most don't thinking or able changed of would know I because potential book long-term in then you would options kind rate in

Vincent Sorgi

Yes.

XXXX the then So and kind retirements XXXX as on in retirement the outlined the and have round retirements, additional we in are IRP. in the the mid-XXXXs then next of

in, We IRP. the about retirements the are to we next potentially that IRP, that we're as now. that think think look part actively to the the near commission generation really Ultimately, that's CPCN IRP. the of the CPCN will working will request in responding actively anything But you in we'll Nick, again, a together be around those pull those there's a the and dates opportunity that on engaged those working around and become generation plan, that want culminate the the but questions at the his of look other we retirement XXXX your in various from Joe, year question? in going putting replacement probably theoretical was kind the rest the term. we here point, part like. to of to analysis, all parties with with within replacement interaction have will of actually be point will add stakeholders But time That to around what on that on

Joseph Bergstein

base today. Nick, question. part other -- other $X was of was your think, of billion that's part the the question and your current rate I the that about That's

Nicholas Campanella

on thinking base labor about just we just should billion. today? are business of And what in pressures, affects impacts? that just seeing be the business of financing you how then kind feeling that. appreciate terms I how and today, Okay, costs are $X you core How inflation

Vincent Sorgi

an we're certainly In Kentucky, due both on. it's inflation. area keeping eye we've that increase Well an in prices seen some PA and to Yes.

be largest seeing expect manage on inflation able we of However, impact is to the to Really, you're cost where energy. that. the of

purchases. So customers key pass-through that our for in our the the are even costs, purchases, affordability continues And on those impact for be they remains though our that the ensuring customers. focused fuel they energy and because necessarily energy to area we're P&L a impact don't certainly that affordable

business. efficiency So to plan, a key detail aspects more business Day, at one the get across of entire lot into our Investor drive the and on this of the we'll is

further Some our of optimization services as the overall function talked work -- cost. use parts functions. our We're technology shared chain continuing and and supply we of are leveraging our strategy centralizing that about, to to reduce

On very pandemic. the are them on to programs about all the affordability side, cost available utility to just paying addition in efficiency enterprise during aware focused that and we our the that maintaining like as across on the need to ensuring driving plans and just are we provide their did customers side, of are we'll payment our likely flexible they customers to bills the think

all are continue inflationary customers. as, of activities, these environment our in to So serve we to Nick, again, to this us for affordability maintain going think look we well

Operator

question Research. comes Steve Wolfe Fleishman from from next Our

Steven Fleishman

brief one. One

of of when you sector Just talk right average kind in X% the to generally. rate, as is earnings the Is growth see I that to you sector? the a average a fair dividend X% in the reflection say what competitive and now would

Vincent Sorgi

it Steve, again. number. cut you your when or stated Say range Sorry, out you

Steven Fleishman

looking that to? average, X% now. right viewed of you would I'd be the kind say as to bogey the X% Is that generally

Vincent Sorgi

we with consistent as that's see what yes. well, Well, Yes.

Operator

our question next Mizuho. from Anthony comes And Crowdell from

Anthony Crowdell

Vince, tough outcome on Tuesday.

better get tonight. luck hopefully, So

the if but if you on, don't please could vacating can't, of is General with guess this, trying Slide me, that answer bullets know you one just and remand I approval you're what versus bullet? tell to quickly there And that I Attorney you guess, is guess, on guess, distinction I requesting X. the decision. on I the make highlighted Just, just, I instruction the

Vincent Sorgi

Yes.

that had. Anthony, division that looking that the down requested that is basically the that to to Attorney was approve back remand decision the the address the just What Island division strike to transaction totality not issues the So judge instruction General's made was start means we Rhode the in Attorney and then scratch. to with the decision office from they office General's the for

to So a General's the it's reference office. what just redo. not making being complete It's Attorney was requested by

Anthony Crowdell

challenge I guess, the challenge DPUC to right So am pending no they're now, -- -- the from that approved matter approval there's DPUC to actually that bullet, there's that the to actually no I no legal, that and -- but so transaction, that's there's DPUC fair challenging say approval, gave?

Vincent Sorgi

in climate whether that interest said analyzed on was X my within really No. approval the was met. adequately General's challenging in the or the Attorney is No, and the as is decision not reviewed the office requirement whether then act public remarks, I prepared providing the and issues

the were So Attorney those the that around X primary had challenges decision. General the

Anthony Crowdell

customers had into at can I I very just pancake when or Pennsylvania new be what the commodity slides June, then Great. higher maybe to in and increase. I customers attractive guess one of could a pivot, any a of level impact in load face customer ago? maybe believe go think it look versus on And an I and then maybe due impacted. growth then postpones looks will And Pennsylvania, It's you And like think CapEx, lastly, I'll rates are to if of you load year think maybe get a of on bill kind kind prices. a If you June effect leave sizable increase in so forecasting guess, may increase in I either December do maybe that it I growth that. impact customer Pennsylvania. if I is, in

Vincent Sorgi

talk at significant -- I'll I to want to you Yes. a that? you're increases mean, the do high level, describing. as are Greg,

be last year -- around this much versus for could upwards year as know, XX%. this that's us, we again, XX%, year. are a versus commodity cost up it's prices but as pass-through And As way last

significant. is it very So

full look sure the When about them, cetera, We it's talked at that flexible plans, at suite the of total a disposal. our to help whether payment are generation really to increase, have actively customers reaching it's side, Anthony. you earlier I making shopping their so options et they out as or

actually think I T&D is down. going

it's a that area our generation customers with. it's you details but Greg, further on certainly deal on any But So have an helping or that? really insights issue, we're focused

Gregory Dudkin

Yes.

Vince's to the for driven by go the to year, up And point, XX%. residential a overall costs. basically of last So of generation will doubling it's compared bill about June again,

So the see, on sales a have it's impact we'll going forward, but impact. big to that's --

pushing We for because a may state, be are we're providers competitive that. a that really lower than -- there rate have generation

really So there's in for should sign out they customers, communication lower there, our for a to pushing we're them to generation up go if it. shop. And or deal charge

Operator

question comes Our Zimbardo Paul Bank America. of next from from

Paul Zimbardo

you First, I out plans in the just want the questions. no to moderating capital or that with clarify affordability before? plans quick Pennsylvania Kentucky There's in put

Vincent Sorgi

we'll related old not that. specifically out new plans, But the on Day, our to impacted Investor by lay plan capital the they're Well, Paul. being

Paul Zimbardo

more Kentucky, Okay. Great. Pennsylvania? just then you're change that. Pennsylvania just just targets as and to long-term the in I plans for seeing the the on rate And what wanted O&M is check inflation since case pressures all questions,

Vincent Sorgi

is really around Well, leverage we'll more Day, into able we're T&D become across strategy get IT Rhode after again, in operations. overall, of we the to especially on Investor as close have I but Island and the part entire we the systems efficient enterprise, our Pennsylvania the that the mentioned, here to details

just to need we not they're with talked, we've to Rhode Island on integrated coming National those bring Grid. They're systems systems. As with because

employees. costs fixed more the all spreading and of advantage take more customers those to over of able systems be we'll So

organizations functions like even In supply in to and looking entire further. we're centralizing to optimize with I enable again, our do Rhode opportunity services even efforts or our that will that, said, the Island chain addition us bringing across the And, further portfolio. to

the opportunity again, want it's all Day, significant planning O&M fairly anything that? out a there we'll see lay And to Greg, over Investor we So that add but to the horizon. on reduce significant. you

Gregory Dudkin

Yes.

so plans case Just today. Utilities, that PPL immediate for no mentioned the there for a had you in future there's Electric rate

Operator

Lapides next Sachs. our question Goldman And from comes Michael from

Michael Lapides

easy question for Guys, you.

a years. -- you in a for Kentucky Just thought stay curious if had of out number I

are ramp And interim you before would up case that next capital can wait if you rate you increases there, do case until do it? there? utilize of remind So cash case? you there spend file that to you next enable can to have Or mechanisms that recovery get that me when next

Vincent Sorgi

Yes.

year's stay-out rate mechanism case, X-year provision. recovery do the a So We Kentucky. in had environmental last we have

basis. the So if does any have there Michael, just DSIC recovered, more real-time a get Pennsylvania. spend, But that mechanism in we are more broadly, on environmental-related capital

So don't even have Rhode a Island, the there. we rate case, does have do mentioned, in capital just rate while well cases. not And then base mechanism DSIC that we Greg their base require have as mechanism recovery they

the differentiate plan lay out which will the portfolio, So plan rate entire that we'll on peers. in our Investor cases of Day against we not will rely the across near-term any some think our

Michael Lapides

years, coal, or you it. term, Got X can you X you near ash do of way call it, spend do Kentucky? ELT-related how next And remind me, to in have like have -- to much in the

Vincent Sorgi

not off or so, prior be million there's years a it's as couple to I over think but what that we probably we'd Investor that bit that still showing go Day. of But hundred probably X still responding better a were to period, the the as little at Michael, much there. time

Operator

we be concluding team any remarks. and will management ladies session. turn over the for with to gentlemen, today's And floor question-and-answer I'd closing that, to like back the

Vincent Sorgi

I new everybody laying remain shortly Yes, confident after quarter, to the forward for call. PPL and thank to think start Again, in year. closing. for the first the a really Narragansett everybody joining We ability good I out close to looking our just want to

So appreciate everybody's time.

Operator

gentlemen, And joining. conference with today's that, ladies for you conclude call and we'll and presentation. thank We

lines. your now may You disconnect

PPL (PPL) 5 May 222022 Q1 Earnings call transcript