Q2 2025 FirstEnergy Corp Earnings Call

Accounts ago, Vice President of Investor Relations. Please go ahead Karen.

Thank you good morning, everyone and welcome to Firstenergy second quarter 2025 earnings reveal our earnings release presentation slides and related financial information are available on our website at Firstenergy Corp. Dot Com Slash IR. Today's discussion will include the use of non-GAAP financial measures and forward looking statements which are.

Subject to risks and uncertainties.

Factors discussed in our earnings news release during today's conference call and in our SEC filings could cause.

Our actual results to differ materially from these forward looking statements.

The appendix of today's presentation includes supplemental information along with the reconciliation of non-GAAP financial measures. Please read our cautionary statements and discussion of non-GAAP financial measures on slides two and three of the presentation.

Our chair President and Chief Executive Officer, Brian Tierney will lead our call today.

We'll be joined by John Taylor, Our senior Vice President and Chief Financial Officer.

They will discuss our strong performance on each of our key financial metrics.

Our progress delivering on our target of 2025 core earnings in the upper half of our guidance range.

<unk> excellent positioned to enable the economic growth and investment highlighted the recent Pennsylvania energy and innovation summit.

Significant long term investment opportunities within our well situated transmission operations and our progress on strategic regulatory and legislative activities.

Now, it's my pleasure to turn the call over to Brian.

Thank you Kevin before we get started I would like to express my condolences to those who are impacted by the tragic events earlier this week in New York City.

On behalf of the Firstenergy family, please accept our thoughts prayers and love.

Brief the loss and celebrate their lives of your loved ones.

This morning, I'll provide an update on our second quarter and year to date performance and key developments that we believe are transforming firstenergy into a premier electric company.

GAAP earnings for the second quarter were <unk> 46 per share compared to eight in the second quarter of 2024.

Core earnings were <unk> 52 per share for the quarter compared to 51 in the second quarter of last year.

We are on track to deliver results in the upper half of our full year 2025 guidance range of $2 40 to.

To $2 60 per share.

Second quarter core earnings benefited from the strong execution of our investment strategy, reflecting new base rates in Pennsylvania that went into effect in January.

The results also reflect increased investments in our transmission system, which benefit from formula based rates.

Our team continues to demonstrate strong financial discipline on operating expenses.

John will speak more about this in a moment.

Through the first six months of 2025, we invested $2 5 billion and our infrastructure through energized $3 65, we.

We are on pace to deploy $5 billion in capital this year and we have confidence in our $28 billion capital investment plan through 2029 to improve system resiliency and reliability and to support the level of service customers expect.

Providing reliable service is at the heart of our mission.

This summer severe weather strained the system and several of our locations. We are committed to resolving these issues quickly and to making the long term investments to prevent outages before they happen.

Our investment plan supports the customers and communities, we are privileged to serve and drives long term value for our shareholders.

Turning to slide six.

At the recent energy and innovation summit in Pittsburgh hosted by Senator Mccormick I had the opportunity to address a distinguished group of government and business leaders about our significant investments in and commitment to Pennsylvania.

A larger resilient and reliable electric grid is essential to all of the energy and technology investments announced at the summit.

We are proud to be the largest electric utility in the state, which has a constructive regulatory environment to support investment and economic growth.

Between our distribution operations and the Pennsylvania portion of our Standalone transmission business. The Commonwealth represents approximately 35% of our total rate base and earnings.

And Firstenergy, Pennsylvania is our largest utility subsidiary.

Through our 2029 planning period, we expect to invest $15 billion in the Commonwealth consisting of <unk>.

$4 $3 billion in distribution capital investments to deliver safe and reliable power.

$5 5 billion in transmission capital investments for a modern energy system that can support the growing demand.

And over $5 billion and operating expenses that support good paying electric industry jobs.

Our Pennsylvania capital investment plans are designed to improve reliability and resiliency and drive economic development.

These investments are recovered through constructive rate mechanisms such as forward looking base rates distribution investment surcharges and forward looking transmission formula rates.

Governor Shapiro's economic development strategy is fueling innovation and growth in sectors like AI and energy.

Pennsylvania is economic development strategy materializes, it will require incremental electric infrastructure investments well beyond our current plan.

Slide seven illustrates the remarkable growth we are experiencing in our data center pipeline and contracted datacenter looked since.

Since February of this year, our long term pipeline for datacenter load has increased over 80% to 11, one gigawatts from six one gigawatts.

Our contracted data center load through 2029 has increased approximately 25% since February of this year to two seven gigawatts from two two gigawatts.

So far this year, we have received requests for 40, new large load studies greater than 500 megawatts each and.

And since the beginning of 2024, we have received requests for over 95 gigawatts of large load studies.

For reference the Firstenergy system coincident peak load for this summer was approximately 33475 megawatts.

Much of the increase in large load studies. This year are coming from the states of Pennsylvania and Ohio.

Datacenter growth both in our system and from those adjacent to our footprint is likely to require additional transmission investments.

Turning to slide eight our transmission system represents a significant growth opportunity for firstenergy.

Brian Tierney: Is being recorded. It is now my pleasure to turn the call over to Karen Sagot, Vice President of Investor Relations. Please go ahead, Karen.

500 megawatts each.

The combination of our Standalone transmission and integrated transmission systems spans six states and about 24000 line miles.

Karen Sagot: Thank you. Good morning, everyone, and welcome to FirstEnergy's second quarter 2025 earnings review. Our earnings release, presentation slides, and related financial information are available on our website at firstenergycorp.com/ir. Today's discussion will include the use of non-GAAP financial measures and forward-looking statements, which are subject to risks and uncertainties. Factors discussed in our earnings news release, during today's conference call, and in our SEC filings could cause our actual results to defer materially from these forward-looking statements. The appendix of today's presentation includes supplemental information along with the reconciliation of non-GAAP financial measures. Please read our cautionary statement and discussion of non-GAAP financial measures on slides two and three of the presentation. Our Chair, President, and Chief Executive Officer, Brian Tierney, will lead our call today. He will be joined by John Taylor, our Senior Vice President and Chief Financial Officer.

And since the beginning of 2024, we have received requests for over 95, gigawatts of large load studies.

Firstenergy is one of the largest transmission asset owners in PJM.

Organic investments in our transmission system are expected to drive rate base growth at a 15% compound annual growth rate between now and 2029.

For reference the First Energy System. Coincident Peak load for this summer was approximately 33,475 megawatts.

Much of the increase in large load studies. This year are coming from the states of Pennsylvania and Ohio.

During this period, our annual transmission Capex is expected to grow to grow from $2 4 billion.

Data center growth, both in our system. And from those adjacent to our footprint, is likely to require additional transmission Investments.

$3 4 billion.

In addition, our transmission system is ideally located geographically in the middle of PJM to garner incremental investment associated with data center load growth, both on our own wires and on systems adjacent to ours.

Turning to slide 8, our transmission system represents a significant growth opportunity for First Energy.

The combination of our Standalone transmission and integrated transmission systems.

Spans 6 States, and about 24,000 line miles.

Over the last three years Firstenergy has secured approximately $3 $1 billion of investments through competitive open windows through valley link and in our Standalone transmission and integrated segments.

First Energy is 1 of the largest transmission asset owners in pjm.

Karen Sagot: They will discuss our strong performance on each of our key financial metrics, our progress delivering on our target of 2025 core earnings in the upper half of our guidance range, FirstEnergy's excellent position to enable the economic growth and investment highlighted at the recent Pennsylvania Energy and Innovation Summit, the significant long-term investment opportunities within our well-situated transmission operations, and our progress on strategic regulatory and legislative activities. Now it's my pleasure to turn the call over to Brian.

Organic investments in our transmission system, are expected to drive, rate-based growth, at a, 15% compound, annual growth rate between now and 2029.

We see the incremental transmission expansion associated with load growth as a recurring opportunity for our company.

PJM recently initiated the 2025 open window for reliability investment opportunities that we believe are comparable to those in the 2020 for our tech.

During this period, our annual transmission capex. Is expected to go to grow from 2.4 billion to 3.4 billion dollars.

Our proposals will seek to build on our record of success in the <unk> process.

With the need for a more resilient and reliable electric grid to support economic development and datacenter growth, we expect transmission investment to increase up to 20% and our next five year plan.

In addition, our transmission system is ideally located, geographically in the middle of pjm, to Garner incremental investment associated with data center, load group both on our own wires and on systems adjacent to ours.

Brian Tierney: Thank you, Karen. Before we get started, I would like to express my condolences to those who were impacted by the tragic events earlier this week in New York City. On behalf of the FirstEnergy family, please accept our thoughts, prayers, and love as you grieve the loss and celebrate the lives of your loved ones. This morning, I'll provide an update on our second quarter and year-to-date performance and key developments that we believe are transforming FirstEnergy into a premier electric company. GAAP earnings for the second quarter were 46 cents per share compared to 8 cents in the second quarter of 2024. Core earnings were 52 cents per share for the quarter compared to 51 cents in the second quarter of last year. We are on track to deliver results in the upper half of our full-year 2025 guidance range of $2.40 to $2.60 per share.

Moving on to slide nine on regulatory and legislative updates.

Over the last 3 years, First Energy has secured approximately 3.1 billion dollars of Investments through competitive open Windows through Valley link and in our Standalone transmission and integrated segments

In Ohio, our state President torn symptom and his team have done an excellent job moving our base rate case forward.

We see the incremental transmission expansion associated with load growth as a recurring opportunity for our company.

We believe a decision from the pooka was likely by the end of the year.

We are also preparing for the upcoming transition to Ohio, New regulatory framework, which includes multi year rate cases and forward test years.

pjm recently initiated the 2025 open window for reliability investment opportunities, that we believe are comparable to those in the 2024 RTE

The new framework supports important capital investments to benefit customers and greater transparency and predictability for our business and investors.

Our proposals will seek to build on our record of success in the rttp process.

In West Virginia, we are preparing to file our 10 year integrated resource plan by October one.

With the need for a more resilient and reliable electric grid to support Economic Development and data center growth. We expect transmission investment to increase up to 20% in our next 5-year plan.

In that plan, we will provide an updated load forecast and our recommendations to address generation requirements.

Moving on to slide 9 on Regulatory and legislative updates.

Brian Tierney: Second quarter core earnings benefited from the strong execution of our investment strategy, reflecting new base rates in Pennsylvania that went into effect in January. Quarterly results also reflect increased investments in our transmission system, which benefit from formula-based rates. Our team continues to demonstrate strong financial discipline on operating expenses. John will speak more about this in a moment. Through the first six months of 2025, we invested $2.5 billion in our infrastructure through Energize 365. We are on pace to deploy $5 billion in capital this year, and we have confidence in our $28 billion capital investment plan through 2029 to improve system resiliency and reliability and to support the level of service customers expect. Providing reliable service is at the heart of our mission. This summer, severe weather strained the system in several of our locations.

We expect the IOP will highlight the need for new dispatch of generation in the state.

Last week PJM announced the results from its capacity auction for the 2026 to 2027 delivery year.

In Ohio, our state president Torrance Hinton and his team have done an excellent job moving our base rate case forward. We believe a decision from the puukko is likely by the end of the year.

Prices cleared at the administratively set cap, which is 22% higher than the 2025 to 2026 delivery year with no new dispatch of the coal gas or nuclear generation.

We are also preparing for the upcoming transition to Ohio's, new regulatory framework, which includes multi-year rate cases and forward, test years.

The new framework supports important capital investments to benefit customers, as well as greater transparency and predictability for our business and investors.

It is clear that the capacity auction construct does not provide the incentives necessary to finance and build the much needed dispatch of generation and deregulated states.

In West Virginia, we are preparing to file our 10-year Integrated Resource Plan by October 1st.

We will continue to advocate on our customers' behalf for cost effective solutions that actually add needed generating capacity to meet growing demand and drive economic development in our states.

In that plan, we will provide an updated load forecast and our recommendations to address generation requirements.

We expect the IRP will highlight the need for New dispatchable Generation in the state.

Moving to slide 10, our progress so far this year reflects our work to optimize firstenergy for performance growth and financial strength are.

Last week, pjm announced the results from its capacity auction for the 2026 to 2027 delivery year.

Brian Tierney: We are committed to resolving these issues quickly and to making the long-term investments to prevent outages before they happen. Our investment plan supports the customers and communities we are privileged to serve and drives long-term value for our shareholders. Turning to slide six, at the recent Energy and Innovation Summit in Pittsburgh, hosted by Senator McCormick, I had the opportunity to address a distinguished group of government and business leaders about our significant investments in and commitment to Pennsylvania. A larger, resilient, and reliable electric grid is essential to all of the energy and technology investments announced at the summit. We are proud to be the largest electric utility in the state, which has a constructive regulatory environment to support investment and economic growth.

Our leadership team is charged with energizing our culture delivering improved service to the 6 million customers, who depend on us and creating significant value for our investors.

Prices, cleared at the administratively set cap, which is 22% higher than the 2025 to 2026 delivery year with no new dispatchable coal, gas or nuclear generation.

Greater accountability means faster results. We are seeing this in the financial discipline that is helping us drive more efficiencies in our cost structure and in the workforce that is more agile and responsive to customers' needs.

It is clear that the capacity auction construct, does not provide the incentives necessary to finance and build the much-needed, dispatchable, generation and deregulated States.

We are on track for a successful year.

We are reaffirming our 2025 core earnings guidance range of $2 40 to $2 60 per share and are on track to deliver results in the upper half of the range.

We will continue to Advocate on our customers behalf for cost-effective solutions that actually add needed generating capacity to meet growing demand and drive economic development in our states.

Moving to slide 10, our progress so far. This year reflects our work to optimize FirstEnergy for performance growth and financial strength.

We are also reiterating our five year $28 billion base capital investment program with no incremental equity needs in the plan.

Brian Tierney: Between our distribution operations and the Pennsylvania portion of our standalone transmission business, the Commonwealth represents approximately 35% of our total rate base and earnings, and FirstEnergy Pennsylvania is our largest utility subsidiary. Through our 2029 planning period, we expect to invest $15 billion in the Commonwealth, consisting of $4.3 billion in distribution capital investments to deliver safe and reliable power, $5.5 billion in transmission capital investments for a modern energy system that can support the growing demand, and over $5 billion in operating expenses that support good-paying electric industry jobs. Our Pennsylvania capital investment plans are designed to improve reliability and resiliency and drive economic development. These investments are recovered through constructive rate mechanisms such as forward-looking base rates, distribution investment surcharges, and forward-looking transmission formula rates. Governor Shapiro's economic development strategy is fueling innovation and growth in sectors like AI and energy.

These customer focused investments.

Our leadership team is charged with energizing our culture, delivering improved service to the 6 million customers, who depend on us and creating significant value for our investors.

Drive our targeted compound annual growth rate of 6% to 8% through 2029.

It is our goal to be recognized as a premier electric company that operates at a high level and consistently delivers growth at or above the midpoint of our guidance range.

Greater accountability means faster results. We are seeing this in the financial discipline that is helping us drive more efficiencies in our cost structure and in the workforce that is more agile and responsive to customers needs.

We are on track for a successful year.

We offer shareholders, a compelling value proposition with a strong growth outlook demonstrated financial discipline, the attractive risk profile and a targeted shareholder return opportunity of 10% to 12% with upside potential.

Of $2.40 to $2.60 per share and are on track to deliver results in the upper half of the range.

We are committed to operating at a high level delivering stable growth and realizing our bright future for our customers communities and investors.

We are also reiterating our 5-year 28 billion base capital investment program with no incremental Equity needs in the plan.

These customer focused Investments.

With that I will turn the call over to John.

Drive our targeted compound annual growth rate of 6 to 8% through 2029.

Thanks, Brian and good morning, everyone. We are very pleased with our progress so far this year.

Through the first half we've delivered on each of our key financial metrics, including core earnings capital investments based on O&M, which reflects disciplined with our operating expenses and cash from operations, our low cost funding source for capital allocation.

It is our goal to be recognized as a Premier Electric company that operates at a high level and consistently delivers growth at or above the midpoint of our guidance range.

Brian Tierney: As Pennsylvania's economic development strategy materializes, it will require incremental electric infrastructure investments well beyond our current plan. Slide seven illustrates the remarkable growth we are experiencing in our data center pipeline and contracted data center load. Since February of this year, our long-term pipeline for data center load has increased over 80% to 11.1 gigawatts from 6.1 gigawatts. Our contracted data center load through 2029 has increased approximately 25% since February of this year to 2.7 gigawatts from 2.2 gigawatts. So far this year, we have received requests for 40 new large load studies greater than 500 megawatts each. And since the beginning of 2024, we have received requests for over 95 gigawatts of large load studies. For reference, the FirstEnergy system coincident peak load for this summer was approximately 33,475 megawatts.

You can view more details about our results, including reconciliations for core earnings and drivers for individual business segments, and the strategic and financial highlights document posted to our IR website yesterday afternoon.

We offer shareholders a compelling value proposition with a strong growth Outlook. Demonstrated Financial discipline, attractive risk profile and a targeted shareholder, return opportunity of 10 to 12% with upside potential.

Looking at our second quarter core earnings were <unk> 52 per share versus <unk> 51 per share in the second quarter of 2024.

We are committed to operating at a high level, delivering stable growth, and realizing our bright future for our customers communities, and investors.

With that, I will turn the call over to John.

Our results, which are ahead of plan and reflect the new base rates in Pennsylvania that went into effect at the start of the year.

Thanks Brian, and good morning everyone. We are very pleased with our progress so far this year.

Formula rate transmission rate base growth of 10% when combining our transmission investments and our standalone transmission and integrated businesses.

Through the first half, we have delivered on each of our key financial metrics including core earnings, Capital Investments, based on M, which reflects discipline with our operating expenses.

As well as financial discipline, with operating expenses, and our distribution and integrated segments.

And cash from operations, our low-cost funding source for Capital allocation.

Full details for each of our business segments are available in our highlights document.

Through the first half of the year core earnings of $1 19 per share reflects strong growth of 19% versus the first half of 2024 with meaningful increases in our distribution and integrated businesses that reflect execution of our regulated strategies strong financial discipline and higher customer demand, reflecting more normal weather.

You can view more details about our results, including reconciliations for core earnings and drivers for individual business. Segments in the Strategic and financial highlights, document posted to our our website yesterday afternoon.

looking at our second quarter core earnings were 52 cents per share versus 51 cents per share in the second quarter of 2024,

Brian Tierney: Much of the increase in large load studies this year is coming from the states of Pennsylvania and Ohio. Data center growth, both in our system and from those adjacent to our footprint, is likely to require additional transmission investments. Turning to slide eight, our transmission system represents a significant growth opportunity for FirstEnergy. The combination of our standalone transmission and integrated transmission systems spans six states and about 24,000 line miles. FirstEnergy is one of the largest transmission asset owners in PJM. Organic investments in our transmission system are expected to drive rate-based growth at a 15% compound annual growth rate between now and 2029. During this period, our annual transmission CAPEX is expected to grow from $2.4 billion to $3.4 billion.

Versus the same period of last year.

Our results which are ahead of plan, reflect the new base rates in Pennsylvania that went into effect at the start of the year.

Our financial performance resulted in a consolidated return on equity of nine 7% on a trailing 12 month basis.

Formula rate transmission rate based growth of 10% when combining our transmission Investments at our Standalone transmission and integrated businesses.

It is in line with our targeted Roe.

Of nine 5% to 10% and a 30 basis point improvement since the end of last year.

As well as Financial discipline with operating expenses and our distribution and integrated segments.

We are very pleased with our results through the first six months.

Full details for each of our business segments are available in our highlights document.

And remained focus on execution to achieve core earnings per share at the upper half of our guidance range.

As Brian mentioned, we continue to focus on financial discipline and continuous improvement.

<unk>, reducing maintenance cost through more strategic capital investments focusing on efficiency in our maintenance plans and enhancing customer processes that will drive better service and a reduced cost.

Our year to date O&M expenses are lower than planned by nearly 4%.

And we expect to continue this trend through the balance of the year.

The team is fully committed to identifying sustainable solutions and our cost structure that offset inflation as well as building in flexibility.

Brian Tierney: In addition, our transmission system is ideally located geographically in the middle of PJM to garner incremental investment associated with data center load growth, both on our own wires and on systems adjacent to ours. Over the last three years, FirstEnergy has secured approximately $3.1 billion of investments through competitive open windows, through Valley Link, and in our standalone transmission and integrated segments. We see the incremental transmission expansion associated with load growth as a recurring opportunity for our company. PJM recently initiated the 2025 open window for reliability investment opportunities that we believe are comparable to those in the 2024 RTAP. Our proposals will seek to build on our record of success in the RTAP process. With the need for a more resilient and reliable electric grid to support economic development and data center growth, we expect transmission investment to increase up to 20% in our next five-year plan.

through the first half of the Year core earnings of 119 per share reflects, strong growth of 19% versus the first half of 2024 with meaningful increases in our distribution integrated businesses, that reflect execution of our regulated strategies strong financial discipline and higher customer demand, reflecting more normal weather, versus the same period of last year, our financial performance resulted in, in Consolidated return on Equity of 9.7%, on a trailing 12-month basis, which is in line with our targeted Roe of 9 and a half to 10% and is a 30 basis, point Improvement since the end of last year,

We are very pleased with our results through the first 6 months.

So our financial plans as needed.

Our $5 billion investment plan for 2025 is on track with capital deployment of more than $1 4 billion in the quarter.

And remain focused on execution to achieve core earnings per share at the upper half of our guidance range.

And slightly more than $2 5 billion through the first half of the year. This is 29% ahead of the first six months of 2024 with more than two thirds of the increase in transmission investments and our standalone transmission and integrated segments.

As Brian mentioned, we continue to focus on financial discipline and continuous Improvement, including maintenance costs through more strategic Capital Investments.

Focusing on efficiency in our maintenance plans.

As Brian mentioned, we continue to see significant needs to invest in our system to improve reliability and resiliency.

And enhancing customer processes that will drive better service at a reduced cost. Our year-to-date onm expenses are lower than planned by nearly 4%.

And we expect to continue this trend through the balance of the year.

And to support expected increases in customer demand and economic development.

Our investment program is funded with internally generated cash flow and utility debt issuances to.

The team is fully committed to identifying Sustainable Solutions and our cost structure that offset inflation as well as building in flexibility.

To our financial plans as needed.

Through June 30, our cash from operations was $1 7 billion, an increase of 60% as compared to 2024.

Our 5 billion dollar investment plan for 2025 is on track with capital deployment of more than 1.4 billion dollars in the quarter.

This reflects a recovery of our capital investments and financial discipline, not only with our operating expenses.

But also with discipline around working capital, including managing customer collections vendor payables and inventory levels.

Brian Tierney: Moving on to slide nine on regulatory and legislative updates. In Ohio, our State President Torrence Hinton and his team have done an excellent job moving our base rate case forward. We believe a decision from the PUCO is likely by the end of the year. We are also preparing for the upcoming transition to Ohio's new regulatory framework, which includes multi-year rate cases and forward test years. The new framework supports important capital investments to benefit customers and greater transparency and predictability for our business and investors. In West Virginia, we are preparing to file our 10-year Integrated Resource Plan by October 1st. In that plan, we will provide an updated load forecast and our recommendations to address generation requirements. We expect the IRP will highlight the need for new dispatchable generation in the state.

And slightly more than 2.5 billion dollars to the first half of the Year. This is 29% ahead of the first 6 months of 2024 with more than 2/3 of the increase in transmission investments in our Standalone transmission and integrated segments.

Through the first six months of the year, we completed six subsidiary debt transactions totaling $1 6 billion with an average coupon of 5%.

As Brian mentioned, we continue to see significant needs to invest in our system to improve reliability and resiliency.

This includes $1 billion of new money to fund our capital programs.

And to support expected increases in customer demand and economic development.

We expect to complete the remaining two transactions and our 2025 financing plan later this year.

Our investment program is funded with internally generated cash flow and utility debt issuances.

In addition in June at the Corp, Opportunistically executed a $2 5 billion convertible debt offering in two tranches at a three and five year tenor at an average coupon of 375% with a 20% conversion premium.

Through June 30th, our cash from operations was 1.7 billion dollars and increase of 60% as compared to 2024.

this reflects recovery of our Capital Investments and financial discipline, not only with our operating expenses,

This transaction priced 125 basis points, lower as compared to the unsecured debt and at the core.

Payables and inventory levels.

Proceeds from this transaction will refinance FTE corp's $1 5 billion convertible bonds expiring in May 2026, three.

Brian Tierney: Last week, PJM announced the results from its capacity auction for the 2026 to 2027 delivery year. Prices cleared at the administratively set cap, which is 22% higher than the 2025 to 2026 delivery year, with no new dispatchable coal, gas, or nuclear generation. It is clear that the capacity auction construct does not provide the incentives necessary to finance and build the much-needed dispatchable generation in deregulated states. We will continue to advocate on our customers' behalf for cost-effective solutions that actually add needed generating capacity to meet growing demand and drive economic development in our states. Moving to slide 10, our progress so far this year reflects our work to optimize FirstEnergy for performance, growth, and financial strength. Our leadership team is charged with energizing our culture, delivering improved service to the 6 million customers who depend on us, and creating significant value for our investors.

Through the first 6 months of the year, we completed 6 subsidiaries debt transactions. Totaling 1.6 billion dollars with an average coupon of 5%.

$300 million in short term borrowings that fully redeemed Etsy Corp's March 2025 bond maturity.

This includes 1 billion dollars in new money to fund our Capital programs.

And a $300 million January 2026 bond maturity.

We expect to complete the remaining 2 transactions, in our 2025, financing plan later this year.

The remaining $400 million will be used to support our capital investment programs or for general corporate purposes.

This transaction provides a natural hedge to our overall financing plan as it reduces the company's 2026 financing risk by more than 40%.

And has removed all holding company financing requirements for the next two years.

Investor demand for our debt remains strong highlighting the appeal of our core regulated businesses and a solid balance sheet.

In addition in June Fe Corp, opportunistically executed, a 2 and a half billion dollar. Convertible debt offering in 2 toes at a 3 and 5 year tignor at an average coupon of 3.75% with a 20% conversion premium, this transaction priced 125 basis points lower as compared to the unsecured debt at Fe Court. Proceeds from this transaction will refinance fee Corps, 1 and a half billion dollar convertible bonds expiring May 2026

And our last three utility bond issuances, we received significant interest with transactions oversubscribed by an average of over nine times.

300 million in short-term, borrowings that fully redeemed, Fe Corps, March 2025 Bond maturity.

We remain committed to a strong balance sheet and investment grade metrics targeting <unk> to debt of 14% plus through 2029.

And a $300 million, January 2026 Bond maturity.

Finally, consistent with our commitment and focus on our core regulated businesses.

The remaining 400 million will be used to support our capital investment programs or for General Corporate purposes.

I am pleased to report that we successfully sold our minority ownership position in the signal peak coal mine earlier this month for $47 5 million.

Brian Tierney: Greater accountability means faster results. We are seeing this in the financial discipline that is helping us drive more efficiencies in our cost structure and in a workforce that is more agile and responsive to customers' needs. We are on track for a successful year. We are reaffirming our 2025 core earnings guidance range of $2.40 to $2.60 per share and are on track to deliver results in the upper half of the range. We are also reiterating our five-year, $28 billion base capital investment program with no incremental equity needs in the plan. These customer-focused investments drive our targeted compound annual growth rate of 6% to 8% through 2029. It is our goal to be recognized as a premier electric company that operates at a high level and consistently delivers growth at or above the midpoint of our guidance range.

This transaction provides a natural hedge to our overall financing plan. As it reduces the company's 2026 financing Risk, by more than 40%.

This is a full exit and we have no remaining financial or operational viability.

And has removed all holding company financing requirements for the next 2 years.

Through the first half of the year, we're executing well on our regulated strategies and investment plan and I am pleased with the financial discipline demonstrated across the organization.

Investor, demand for our debt, remains strong highlighting the appeal of our core regulated, businesses and a solid balance sheet.

Our key metrics for our financial performance through the first six months are better than plan and last year, reflecting our commitment to delivering shareholder value.

And our last 3, utility Bond issuances. We received significant interest with transactions over subscribed by an average of over 9 times.

We look forward to continuing this momentum through the balance of the year and as we execute against our long term plan.

We remain committed to a strong balance sheet and investment grade metrics, targeting ffo to debt of 14% plus through 2029.

We are focused on fulfilling our commitments to all of our stakeholders and delivering on our shareholder value proposition.

For your time now, let's open the call to Q&A.

Finally consistent with our commitment and focus on our core regulated businesses. I am pleased to report that we successfully sold our minority ownership position in The Signal Peak Coal. Mine earlier this month, for 47 and a half million dollars.

Thank you.

This is a full exit and we have no remaining Financial or operational liability.

Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad on a confirmation tone will indicate your line is in the question queue.

Brian Tierney: We offer shareholders a compelling value proposition with a strong growth outlook, demonstrated financial discipline, attractive risk profile, and a targeted shareholder return opportunity of 10% to 12% with upside potential. We are committed to operating at a high level, delivering stable growth, and realizing our bright future for our customers, communities, and investors. With that, I will turn the call over to John.

Through the first half of the Year we're executing well on our regulated strategies and investment plan and I am pleased with the financial discipline demonstrated across the organization.

You May press Star two if you would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Our key metrics for financial performance through the first six months are better than plan and last year, reflecting our commitment to delivering shareholder value.

And due to the interest of time, we ask that each analyst limit themselves to one question and one follow up. Thank you. Please hold while we poll for questions.

We look forward to continuing this momentum through the balance of the year and as we execute against our long-term plan,

And the first question comes from the line of Nicholas Campanella with Barclays. Please proceed.

We are focused on fulfilling, our commitments, to all of our stakeholders and delivering on our shareholder value proposition.

Thank you for your time. Now, let's open the call to Q&A.

John Taylor: Thanks, Brian, and good morning, everyone. We are very pleased with our progress so far this year. Through the first half, we have delivered on each of our key financial metrics, including core earnings, capital investments, base O&M, which reflects discipline with our operating expenses, and cash from operations, our low-cost funding source for capital allocation. You can view more details about our results, including reconciliations for core earnings and drivers for individual business segments in the strategic and financial highlights document posted to our IR website yesterday afternoon. Looking at our second quarter, core earnings were 52 cents per share versus 51 cents per share in the second quarter of 2024.

Thank you.

Hey, good morning, everyone. Thanks for all the updates.

Good morning, Nick.

Good morning, So I just wanted to kind of clarify on the transmission Capex upside certainly a lot coming here just the 20% increase that you have visibility to and the plan is.

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Is that net or gross of the minority interest ownership and maybe you could just clarify just from a from an FTE shareholder perspective, just how much capex has been identified that's kind of upside to your five year plan today is at roughly $2 billion or is it more than that and I'll leave it there. Thanks.

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And, due to the interest of time, we ask that each analyst limit themselves to one question at a time, followed by a follow-up. Thank you, please hold while we pull the questions.

Hey, Nick this is John so to answer your first question, we show our Capex gross so in the $28 billion that $14 billion is our consolidated capex. So.

And the first question comes from the line of Nicholas Campanella with Parkways. Please proceed.

John Taylor: Our results, which are ahead of plan, reflect the new base rates in Pennsylvania that went into effect at the start of the year, formula rate transmission rate-based growth of 10% when combining our transmission investments at our standalone transmission and integrated businesses, as well as financial discipline with operating expenses in our distribution and integrated segments. Full details for each of our business segments are available in our highlights document. Through the first half of the year, core earnings of $1.19 per share reflect strong growth of 19% versus the first half of 2024, with meaningful increases in our distribution and integrated businesses that reflect execution of our regulated strategies, strong financial discipline, and higher customer demand, reflecting more normal weather versus the same period of last year.

Hey, good morning everyone. Thanks for all the updates.

Is that 20% would be on that same basis.

Good morning, Nick.

And then what was your second question I didn't catch that.

Just if you were to kind of add up all the visibility that you have across the portfolio across our top processes.

And various other things.

On a dollar figure how much capex has not been identified.

A few shareholders in this five year plan.

Yes, so that could be.

Mentally it could be two point.

Morning. So um hey I just wanted to kind of clarify on the uh, the transmission cap back upside certainly a lot coming here. Um, just the 20% increase, um, that you have visibility to in the plan, uh, is that net or gross of the uh, minority interest ownership? And, you know, maybe you could just clarify just from a from an FB shareholder perspective. Just how much capex has been identified. That's kind of upside to your your 5 year plan today. Is it roughly 2 billion or is it more than that? And um I'll leave it there. Thanks.

Three to almost $4 billion.

And then.

And then just you've done a good job derisking the balance sheet.

With that with the various asset sales just how are you kind of thinking about balance sheet capacity at this point and when you'd have to starting to lean on equity.

Hey Nick, this is John. So to answer your first question, you know, we show our capex gross so in the 28 billion dollars that 14 billion dollars is our Consolidated capex. So we that 20% would be on that same basis.

John Taylor: Our financial performance resulted in a consolidated return on equity of 9.7% on a trailing 12-month basis, which is in line with our targeted ROE of 9.5% to 10% and at a 30 basis point improvement since the end of last year. We are very pleased with our results through the first six months and remain focused on execution to achieve core earnings per share at the upper half of our guidance range. As Brian mentioned, we continue to focus on financial discipline and continuous improvement, including reducing maintenance costs through more strategic capital investments, focusing on efficiency in our maintenance plans, and enhancing customer processes that will drive better service at a reduced cost. Our year-to-date O&M expenses are lower than planned by nearly 4%, and we expect to continue this trend through the balance of the year.

And then what was your second question that I didn't? I didn't catch that.

We look at that all the time, Nick and when we think about it.

We'd like to keep all the options on the table. So we look at investments that would support growth in the balance sheet and we could include equity and equity like instruments as we think about it a lot of the increase that we have in the Capex is associated with formula looking rates with no regulatory lag.

Jason, if you were to kind of add up all the visibility that you have across the portfolio, you know, across our Tech processes, um, and various other things, just on a, on a, on a dollar figure, how much capex has now been identified? Uh, to FC shareholders in this coming 5 year plan.

Yeah. So that could be incrementally. It could be 2.

When we look at the overall portfolio, we'll make decisions based on the reality at that time, but.

Not very concerned about that at all.

And then um and then just you've done a good job de-risking the balance sheet. Um,

That's great that's great and then maybe just a lot of focus on Pennsylvania here.

Especially with the data points this past quarter.

With the, with the various asset sales, just how are you kind of thinking about balance sheet capacity at this point? And when you would have to start to, to lean on equity,

What are your views on.

Pursuing a genco similar to some of what your peers in PJM announced and how are you kind of viewing.

John Taylor: The team is fully committed to identifying sustainable solutions in our cost structure that offset inflation, as well as building in flexibility to our financial plans as needed. Our $5 billion investment plan for 2025 is on track with capital deployment of more than $1.4 billion in the quarter and slightly more than $2.5 billion through the first half of the year. This is 29% ahead of the first six months of 2024, with more than two-thirds of the increase in transmission investments in our standalone transmission and integrated segments. As Brian mentioned, we continue to see significant needs to invest in our system to improve reliability and resiliency and to support expected increases in customer demand and economic development. Our investment program is funded with internally generated cash flow and utility debt issuances.

The auction clearing up the cap now in PJM informing.

Legislation in Pennsylvania for rate base generation. Thanks, Yes.

So let me start by saying God bless Governor Shapiro for saving the customers in PJM billions of dollars by negotiating the collar that he did.

you know, we we look at that all the time, Nick. And when we think about it, we'd like to keep all the options on the table. So, we look at Investments, that would support growth in the balance sheet and we could include equity and Equity like instruments as we think about it. You know, a lot of the increase that we have in the capex is associated with formula looking rates with no regulatory lag, but when we look at the overall portfolio, we'll make decisions. You know, based on the reality at that time but

Again, the $16 billion that customers are going to spend during that capacity delivery year add no new dispatch able generation to the system.

Not very concerned about it at all.

Could build an awful lot of one gigawatt power plants for $16 billion.

We're going to be constructive in terms of how we engage with the states that are fully deregulated.

We would be willing to build on our regulated like basis or a fully contracted basis.

John Taylor: Through June 30, our cash from operations was $1.7 billion, an increase of 60% as compared to 2024. This reflects recovery of our capital investments and financial discipline, not only with our operating expenses, but also with discipline around working capital, including managing customer collections, vendor payables, and inventory levels. Through the first six months of the year, we completed six subsidiary debt transactions totaling $1.6 billion with an average coupon of 5%. This includes $1 billion in new money to fund our capital programs. We expect to complete the remaining two transactions in our 2025 financing plan later this year. In addition, in June, FE Corp opportunistically executed a $2.5 billion convertible debt offering in two tranches at a three and five-year tenor at an average coupon of 3.75% with a 20% conversion premium.

With credit worthy Counterparties.

In the meantime, we're going to focus on West, Virginia, where we do have the opportunity to invest on an integrated basis, we're anticipating our IOP will.

That's great. That's great. And then, um, maybe just a lot of focus on Pennsylvania here. Um, especially, uh, with the data points, this past quarter. Um, you know, what are your views on? Um, pursuing a Genco similar to some of what your your peers and pjm announced um, and you know, how are you kind of viewing? Uh, the auction clearing at the cap now and and pjm informing, um, legislation in Pennsylvania for rate based generation. Thanks, yeah. So let me start by saying, God bless Governor Shapiro for saving. Uh the customers and pjm billions of dollars, by negotiating the caller that he did. Um,

Call for new dispatch of generation, and we are ready willing and able to make those investments for the benefits of our customers in west, Virginia and for incremental economic development in that state.

Again, the $16 billion that customers are going to spend during that capacity delivery year adds no new dispatchable generation to the system.

You could build an awful lot of 1, gigawatt power plants for 16 billion dollars.

The next question comes from the line of Jeremy Tonet.

With J P. Morgan. Please proceed.

Hi, good morning.

Good morning, Jeremy.

Just wanted to dig in on the data center pipeline, a little bit more if he could just wanted to kind of understand what drives the pace of negotiations. There then blocking items to getting capacity online sooner or anything left to do.

We're going to be constructive in terms of how we engage with the states that are fully deregulated. Uh, we would be willing to build on a regulated like basis or a fully contracted basis, um, with creditworthy counterparties.

For the contracts to get more of those here just wondering what drives the pace of.

John Taylor: This transaction priced 125 basis points lower as compared to the unsecured debt at FE Corp. Proceeds from this transaction will refinance FE Corp's $1.5 billion convertible bonds expiring May 2026, $300 million in short-term borrowings that fully redeemed FE Corp's March 2025 bond maturity, and a $300 million January 2026 bond maturity. The remaining $400 million will be used to support our capital investment programs or for general corporate purposes. This transaction provides a natural hedge to our overall financing plan as it reduces the company's 2026 financing risk by more than 40% and has removed all holding company financing requirements for the next two years. Investor demand for our debt remains strong, highlighting the appeal of our core regulated businesses and a solid balance sheet. In our last three utility bond issuances, we received significant interest with transactions oversubscribed by an average of over nine times.

Conversions.

It's really it's really customer demand.

In the meantime, we're going to focus on West Virginia, where we do have the opportunity to invest on an integrated basis. We're anticipating our IRP will, uh, call for New dispatchable, Generation. And we are ready, willing, and able to make those Investments for the benefits of our customers, in West, Virginia, and for incremental, economic development in that state,

And how quickly people are willing to put their dollars to work is the thing thats.

Allowing us to move as fast as we are we're seeing there are legitimate.

The next question comes from the line of Jeremy Thomas with JP Morgan please proceed.

Hi, good morning.

Large scale data center developers, who have control of land, who have access to equipment, who are willing to sign contracts with us to keep there.

good morning, Jeremy

Data centers moving forward. We're also seeing a lot of others, who are out there running these studies trying to see if they can put something together and.

We're talking to any and all of them trying to make as much of that happen in reality as we can as quickly as possible for the demand that we're seeing but it's it's really customer demand that sets the pace for how quickly we were able to move.

Just wanted to dig in on the data center pipeline, a little bit more if it could just want to kind of understand what drives the pace of negotiations. There are any, you know, blocking items to getting, uh, capacity online sooner or anything left to do, uh, um, you know, for the contracts to get more of those to go out. Just wondering, you know what, what drives the pace of uh, um, you know, conversions,

Got it that makes sense there.

Maybe pivoting to West Virginia, how does the IOP filing could.

John Taylor: We remain committed to a strong balance sheet and investment-grade metrics targeting FFO to debt of 14% plus through 2029. Finally, consistent with our commitment and focus on our core regulated businesses, I am pleased to report that we successfully sold our minority ownership position in the Signal Peak Coal Mine earlier this month for $47.5 million. This is a full exit, and we have no remaining financial or operational liability. Through the first half of the year, we're executing well on our regulated strategies and investment plan, and I am pleased with the financial discipline demonstrated across the organization. Our key metrics for financial performance through the first six months are better than planned and last year, reflecting our commitment to delivering shareholder value. We look forward to continuing this momentum through the balance of the year and as we execute against our long-term plan.

Could you speak to the scope for incremental generation needs there.

What level of low growth.

You see in the state just wondering any color you might be able to provide there, particularly as it relates to coal plant retirements and how you think about that at this point.

Yes, so we will be updating those load.

It's really, it's really customer demand. Um, and how quickly people are willing to put their dollars to work. Is the thing that's, um, allowing us to move as fast as, as we are, we're seeing, there are legitimate, uh, large-scale data center developers who have control of land, who have access to equipment, who are willing to sign contracts with us to keep their uh, data centers moving forward. We're also seeing a lot of others who are out there, you know, running these studies trying to see if they can put something together.

<unk> in the IOP that we're going to follow I don't I don't want to front run that filing today, but we have about 3500 megawatts of generation 3000 of it is.

And, um, and we're talking to any and all of them trying to make uh, as much of that.

Coal fired generation in the state of West Virginia.

Happen in reality, as we can as quickly as possible for the demand that we're seeing. But it's it's really customer demand, that sets the pace for how quickly we're able to move.

That currently according to our current forecast would have those retiring in the 2035 and the 2040 timeframe again, we'll update that as we get into the IOP, but I could see us incrementally, adding over a period of time.

Got it, that makes sense there. Um maybe pivoting to West Virginia ahead of the P filing.

<unk> megawatts of dispatch of <unk> gas combined cycle.

John Taylor: We are focused on fulfilling our commitments to all of our stakeholders and delivering on our shareholder value proposition. Thank you for your time. Now let's open the call to Q&A.

Uh, could you speak to the scope for incremental generation needs there? And what level of load growth do you see in the state? Just wondering if you have any color you might be able to provide there, particularly as it relates to coal plant retirements. And how do you think about that at this point?

Over the next 10 years and that would support both giving flexibility to those plans that we have with the coal fired power plants, and attracting new data center load and other load.

Speaker 4: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. And due to the interest of time, we ask that each analyst limit themselves to one question and one follow-up. Thank you. Please hold while we pull the questions. And the first question comes from the line of Nicholas Campanella with Barclays. Please proceed.

Looking to relocate and West Virginia, West, Virginia has a real competitive advantage given that it's an integrated resource plan state.

We've talked to the governor about that we've talked to the chair of the commission about that and we think there would be support for adding generation in the state.

Okay.

Got it that's helpful. Thank you.

Thank you Jeremy.

The next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed.

Hey, good morning, Thanks for taking the questions.

Maybe just to start on results are tracking ahead of plan on a number of key items here. Just curious if you can flush out what is driving that upside versus the plan and I am curious if you'd revisit the guidance range as we get through <unk> or shift that target within the range given the strong results thus far.

Nick Campanella: Hey, good morning, everyone. Thanks for all the updates.

John Taylor: Morning, Nick.

Nick Campanella: Morning. So, hey, I just wanted to kind of clarify on the, the transmission CAPEX upside. Certainly a lot coming here. just the 20% increase, that you have visibility to in the plan, is that net or gross of the, minority interest ownership? And, you know, maybe you can just clarify just from an FE shareholder perspective, just how much CAPEX has been identified that's kind of upside to your five-year plan today? Is it roughly $2 billion or is it more than that? And I'll leave it there. Thanks.

Yeah, Hey, Carly this is John so most of.

The favorability to plan year to date is just discipline around operating expenses.

But I could see us incrementally adding over a period of time. A thousand megawatts of dispatchable, gas combined cycle, um, over the next 10 years. And, and that would support both giving flexibility to those, uh, plans that we have with the coal fired power plants and attracting new data center, load, and other load. Uh, that's looking to relocate in West. Virginia West Virginia has a real competitive Advantage given that it's an integrated resource plan state. And, uh, we've talked to the governor about that. We've talked to the chair of the commission about that and we think there would be support for adding generation in the state.

As I said in my prepared remarks on our operating expenses or about 4% below plan and we see that continuing for the balance of the year. So it's really just around financial discipline and continuing to deploy capital on time and on plan. So thats whats really driving that I think as we get out to.

Got it. That's helpful. Thank you.

Thank you, Jeremy.

The next question comes from the line of Carly Davenport with Goldman Sachs, please proceed.

John Taylor: Hey, Nick, this is John. So to answer your first question, you know, we show our CAPEX gross. So in the $28 billion, that $14 billion is our consolidated CAPEX. So we, that 20% would be on that same basis. And then what was your second question? I didn't catch that.

The third quarter call. Obviously, we will look at where we are for the year and then if it makes sense, we'll adjust the guidance range at that time.

Great. Thank you for that and then just wanted to follow up on next question earlier on the transmission upside could you just talk a little bit about what's embedded in that 20% opportunity that you've highlighted is that just the PJM open window or are there any other drivers that we should be thinking about.

Hey, good morning, thanks for taking the questions. Um, maybe just to start on results. You're tracking ahead of the plan. You know on a number of key items here. Just curious. If you can flush out, what is driving that upside versus the plan? And then curious, if you'd revisit the guidance range as we get through 3Q or or shift that Target within the range, given the strong results thus far

Nick Campanella: Just if you were to kind of add up all the visibility that you have across the portfolio, you know, across RTAP processes, and various other things, just on a on a dollar figure, how much CAPEX has now been identified, to FE shareholders in this coming five-year plan?

Yeah, hey Carla. This is John. So most of uh the the favorability to plan year to date is just discipline around operating expenses.

Um, you know, as I said in my prepared remarks, our operating expenses are about 4% below plan.

It's both the open windows that we have and then it's incremental too.

John Taylor: Yeah. So that could be incrementally, it could be 2.3 to almost $4 billion.

Actually add the data centers that are on our system are a component of that and then there is some additional incremental that we found that's not related to either one of those going forward. So it's all three of those parts that add up to the upside that we're seeing.

Nick Campanella: And then, and then just you've done a good job de-risking the balance sheet, with the with the various asset sales. Just how are you kind of thinking about balance sheet capacity at this point and when you would have to start to to lean on equity?

And we see that continuing, uh, for the balance of the year. So it's really just around Financial discipline and continuing to deploy capital on time and on plan. So that's what's really driving that I think, as we get out to the third quarter call, obviously, we'll look at where we are for the year and then if it makes sense, we'll adjust the guidance range at that time.

Great. Thank you so much for the time.

Great. Thank you.

Thanks, Karen.

John Taylor: You know, we we look at that all the time, Nick. And when we think about it, we like to keep all the options on the table. So we look at investments that would support growth in the balance sheet, and we could include equity and equity-like instruments as we think about it. You know, a lot of the increase that we have in the CAPEX is associated with formula-looking rates with no regulatory lag. But when we look at the overall portfolio, we'll make decisions, you know, based on the reality at that time, but not very concerned about it at all.

The next question comes from the line of David Arcaro with Morgan Stanley. Please proceed.

Alright, thanks, so much good morning.

Good morning, David.

For that. And then just wanted to follow up uh on next question. Earlier on the transmission upside could you just talk a little bit about what's embedded in that 20% opportunity that you've highlighted? Is that just the pjm open window or or are there any other drivers that we should be thinking about?

Just on that same transmission capex topic signaling the up to 20% increase.

We're only halfway through the year and it seems like the.

Data center.

Load conversations are progressing fairly rapidly anyway I'm just wondering.

Could it could it be further opportunities for upside as you get closer to your roll forward period, Quebec Capex outlook rise further.

Nick Campanella: That's great. That's great. And then, maybe just a lot of focus on Pennsylvania here, especially, with the data points this past quarter. you know, what are your views on, pursuing a GenCo similar to some of what your your peers in PJM announced? and you know, how are you kind of viewing, the auction clearing at the cap now in PJM informing, legislation in Pennsylvania for rate-based generation? Thanks.

It it it, it's both the open windows that we have, and then it's incremental to, um, actually add the data centers that are on our system, our component of that, and then there's some additional incremental that we found. Uh, that's not related to either 1 of those going forward, so it's all 3 of those parts that add up to the upside that we, we're seeing

Great, thank you so much for the time.

Thanks Carly.

In the coming months essentially.

So David.

We're not.

Putting in our plan things that we don't feel fairly certain about so for it to be in the plan it has to be contracted.

The next question comes from the line of David araro with Morgan Stanley. Please proceed

Oh hey uh, thanks so much. Good morning.

Good morning, David. Um,

With the customer or we have to have had the award or feel fairly certain of the award from a competitive process or we have to have line of sight that the investment is that.

John Taylor: Yeah. So let me start by saying God bless Governor Shapiro for saving, the customers in PJM billions of dollars by negotiating the collar that he did. again, the $16 billion that customers are going to spend during that capacity delivery year add no new dispatchable generation to the system. You could build an awful lot of one-gigawatt power plants for $16 billion. We're going to be constructive in terms of how we engage with the states that are fully deregulated. we would be willing to build on a regulated-like basis or a fully contracted basis, with creditworthy counterparties. In the meantime, we're going to focus on West Virginia, where we do have the opportunity to invest on an integrated basis.

Period that we're talking about but against that backdrop.

There will be additional customers will come forward and signed contracts with us I do think there will be awards coming out of the current open window I think there will be additional open windows that happened so.

I see upside to the plan, but we're not going to be frivolous and pudding.

Upside that we don't see line of sight too in our plan, but yes.

I do think there will be upside as we go forward.

In time.

Great Yeah that makes sense, thanks, and then.

As we as we think about just how PJM states are going to be procuring new capacity I was just wondering if there is any progression with the discussions around with the framework might be whether it's contracted generation regulated generation in any sense of when we might get clarity.

No, you, uh, just on that same transmission, CapEx topic. Uh, you know, signaling um the up to 20% increase. Um, you know, we're only halfway through the year and it seems like the, you know, data center um load conversations are progressing fairly rapidly anyway. I'm just wondering, you know, could there be further opportunities for upside as you get closer to your, you know, roll forward period? Um, could that CapEx outlook rise further? Um, you know, in the coming months essentially? Yeah, I think so, David. You know, we're not um putting in our plan things that we don't feel fairly certain about. So for it to be in the plan, it has to be contracted with the customer, or we have to have had the award or feel fairly certain of the award from a competitive process, or we have to have line of sight that the investment is actually.

John Taylor: We're anticipating our IRP will, call for new dispatchable generation, and we are ready, willing, and able to make those investments for the benefits of our customers in West Virginia and for incremental economic development in that state.

As to the direction certain states are growing.

Uh huh.

Not a ton of clarity on that David and Deregulated States I am encouraged by the.

Speaker 4: The next question comes from the line of Jeremy Tomat with JP Morgan. Please proceed.

PJM State led technical conference Thats going to happen on September 23rd we're all five of our states governors are going to be participating in that.

Speaker 7: Hi, good morning.

Period that we're talking about but against that backdrop. Uh, I think there will be additional customers will come forward and sign contracts with us. I do think there will be Awards. Coming out of the current open window. I think there will be additional open windows that happen. So, um, I I see upside to the plan but we're not going to be frivolous in putting, uh, you know, upside that we don't see line of sight to in our plan. But, um, yeah, I do think there will be upside as we go forward. Um, uh, in time.

John Taylor: Good morning, Jeremy.

Speaker 7: Just wanted to dig in on the data center pipeline a little bit more, if you could. Just wanted to kind of understand what drives the pace of negotiations there. Are there any, you know, blocking items to getting, capacity online sooner or anything left to do, you know, for the contracts to get more of those going to go out? Just wondering, you know, what what drives the pace of, you know, conversions?

I think.

The capacity auction situation is one that can only be solved by the states themselves.

Clearly the capacity auction construct can't solve it.

And hasn't solved the states can solvent, whether they decide to do so individually or through something like the outcome on the September 23rd Technical conference I'm not sure but.

John Taylor: It's really, it's really customer demand, and how quickly people are willing to put their dollars to work is the thing that's, allowing us to move as fast as as we are. We're seeing there are legitimate, large-scale data center developers who have control of land, who have access to equipment, who are willing to sign contracts with us to keep their, data centers moving forward. We're also seeing a lot of others who are out there, you know, running these studies trying to see if they can put something together. And, and we're talking to any and all of them trying to make, as much of that happen in reality as we can as quickly as possible for the demand that we're seeing. But it's it's really customer demand that sets the pace for, how quickly we're able to move.

Great. Yeah, it makes sense. Uh thanks and then um as we as we think about just how pjm states are going to be procuring, new capacity. I was just wondering if there's been any progression with the discussions around, what the framework might be, whether it's contracted generation regulated generation and any sense of when we might get clarity um as to as the as to the direction certain states are going.

You know.

Very pleased to see the Governor's engaged taking a leadership role in this and I think that's how we're going to get to the right solution.

Okay understood. Thank you.

Thank you.

The next question comes from the line of Ross <unk> with Bank of America. Please proceed.

Good morning, Brian John how are you.

Good morning.

Lot of my questions have been asked but maybe you could just cycle back to our circle back to Ohio regulation for a minute so.

Youre in this process with the Coco for a forward test year.

We're thinking about affordability pressures with PJM also coming through the system.

Speaker 7: Got it. That makes sense there. maybe pivoting to West Virginia ahead of the IRP filing. could you speak to the scope for incremental generation needs there and what level of load growth, do you see in the state? Just wondering any, you know, color you might be able to provide there, particularly, as it relates to, you know, coal plant retirements and how you think about that at this point.

As you move from the ESP and as you go into the forward test year, maybe one pieces what would intervene you're seeing most concerned about rehab process.

Encouraged by the um pjm state-led technical conference. That's going to happen on September 23rd where all 5 of our state's Governors are going to be participating in that. I, I think the capacity auction situation is 1 that can only be solved by the states themselves. Uh, clearly the capacity auction construct can't solve it. Um, and hasn't solved it. The states can solve it whether they decide to do so individually or through something like the outcome of the September, uh, 23rd technical conference. I'm not sure but I'm very pleased to see the governor's engaged, taking a leadership role in this, and I think that's how we're going to get to the right solution here.

Okay, understood. Thank you.

Now with that.

Thank you.

Shift your ability to.

We have an opportunity to earn your allowed ROE and think about regulatory lag.

The next question comes from the line of Ross, Fowler with Bank of America, please proceed.

John Taylor: Yeah. So we'll be updating those load, projections in the IRP that we're going to follow. I don't I don't want to front-run, that filing, today. But we have about 3,500 megawatts of generation. 3,000 of it is, coal-fired generation in the state of West Virginia, that currently, according to our current forecast, would have those retiring in the 2035 and the 2040 timeframe. Again, we'll update that as we get into the IRP. But I could see us incrementally adding, over a period of time, 1,000 megawatts of dispatchable gas combined cycle, over the next 10 years. And that would support both giving flexibility to those, plans that we have with the coal-fired power plants and attracting new data center load and other load, that's looking to relocate in West Virginia. West Virginia has a real competitive advantage given that it's an integrated resource plan state.

We're we're in the midst of our current base rate case, which.

Good morning. Brian. My morning John. How are you? Good morning. Good morning.

<unk>.

We've had the testimony briefs have been filed.

Reply briefs and we're waiting for an answer in the current rate case and all the things that you would anticipate.

1 of my questions has been asked, but maybe we could just cycle back to or circle back to Ohio regulation for a minute. So,

Being covered by intervenors are being covered there.

Cap structure Roe.

You're you're in this process with the puukko for a forward test year. Um, you know, we're thinking about affordability, pressures with pjm. Also coming through the system

The rates themselves.

Themselves like all of the normal things are being.

Considered in our base rate case, I anticipate Ross that's going to be the case in these forward looking test years that we have.

As you move from the ESP and as you go to the forward test, you're maybe 1 piece is what what intervener see most concerned about through that process. And how would that

When we go in for the next rate case under the new regime whenever that is we're going to have a fairly limited period that needs to be reviewed historically and since we have true ups on the forward looking portion of the test year, I don't anticipate those being particularly contentious so.

Shift your ability to have an opportunity to earn your allowed, are we and and think about regulatory lag.

I think we'll be able to move through.

The next rate case relatively easily.

John Taylor: And, we've talked to the governor about that. We've talked to the chair of the commission about that. And we think there would be support for adding generation in the state.

Fairly short period of time without many issues that Havent recently been discussed being raised so I think the new regime will be constructive.

You know, we're we're in the midst of our current base rate case which, uh, brief. We've had the testimony briefs have been filed, um, um, reply briefs. And we're waiting for an answer in the current rate case and all the things that you would anticipate uh, being covered by interveners are being covered there. Um, cap structure Roe. Uh,

the rates themselves, like all of the normal things are being uh, considered in our base rate case,

Speaker 7: Got it. That's helpful. Thank you.

John Taylor: Thank you, Jeremy.

Look forward to transitioning to that as quickly as possible.

I anticipate Ross that's going to be the case in these forward-looking test years that we have.

Speaker 4: The next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed.

And then.

One follow up to that just in Ohio, we still have sort of the <unk>.

Carly Davenport: Hey, good morning. Thanks for taking the questions. maybe just to start on results, you're tracking ahead of the plan, you know, on a number of key items here. Just curious if you can flesh out what is driving that upside versus the plan. And then curious if you'd revisit the guidance range as we get through 3Q or or shift that target within the range given the strong results thus far.

The remaining or the last hopefully remaining HP snips related processes, how do you see those progressing from here and when can we finally think about wrapping in closing that so it will have to ask the questions anymore.

So similar.

Answer.

We've been through.

Most of the rate case and that there have been no new issues raised during that period, we anticipate getting an outcome later this year and finally be able to put that chapter behind us, but nothing new was raised in the hearings that wasn't disclosed or unaccounted for previously and we look for.

John Taylor: Yeah. Hey, Carly. This is John. So most of, the the favorability to plan year to date is just discipline around operating expenses. you know, as I said in my prepared remarks, our operating expenses are about 4% below plan. And we see that continuing, for the balance of the year. So it's really just around financial discipline and continuing to deploy capital on time and on plan. So that's what's really driving that. I think as we get out to the third quarter call, obviously, we'll look at where we are for the year. And then if it makes sense, we'll adjust the guidance range at that time.

Um, you know, when we go in for the next rate case under the new regime whenever that is, we're going to have a fairly limited period, uh, that needs to be reviewed historically. And, and since we have true UPS on the forward-looking portion of the test year, I don't anticipate those being particularly contentious. So I think we'll be able to move through, uh, the next rate case, relatively easily in a fairly short period of time without many issues that haven't recently been discussed being raised. So I think the new regime will be constructive and um, and look forward to transitioning to that as quickly as possible.

We're getting through.

That proceeding and putting a final <unk>.

Period on that by the end of this year as well.

Okay perfect. Thank you guys. Thanks.

Thanks Ross.

The next question comes from the line of Michael Sullivan with local research. Please proceed.

And then, uh, I want to follow up to that. I just, in Ohio, we still have sort of the remaining, or the last, hopefully remaining, HP-situated processes. How do you see those progressing from here? And when can we finally think about wrapping and closing that, so I don't have to ask the question anymore?

Carly Davenport: Great. Thank you for that. And then just wanted to follow up, on the next question earlier on the transmission upside. Could you just talk a little bit about what's embedded in that 20% opportunity that you've highlighted? Is that just the PJM open window, or are there any other drivers there that we should be thinking about?

Yeah.

Hey, good morning.

I had another one.

Brian I had another one on the West Virginia.

Generation plans or are you mainly looking at building new dispatch of generation, you're yourself or would you consider buying.

Buying something that someone else may be developing I think one of your peers.

John Taylor: It's both the open windows that we have, and then it's incremental to, actually add the data centers that are on our system are a component of that. And then there's some additional incremental that we found, that's not related to either one of those going forward. So it's all three of those parts that add up to the upside that we're seeing.

Yeah, so similar, uh, answer, we we've been through, um, most of the rate case in that, there have been no new issues raised, uh, during that period, we anticipate getting an outcome later this year and and finally be able to put that chapter uh behind us. But nothing new was raised in the hearings that uh wasn't disclosed or unaccounted for previously. And we look forward to getting through

Is doing that.

We're going to look at everything of course, I think whats needed in PJM as new dispatch will generation.

Um, that proceeding and and putting a final.

Period on that by the end of this year as well.

Okay, perfect. Thank you guys.

Thanks Ross.

And my hope is that we'll be able to make investments in that in the state of West Virginia, but of course, we're going to look at everything and select.

Carly Davenport: Great. Thank you so much for the time.

For the next question, comes from the line of Michael Sullivan, with local research, please proceed.

John Taylor: Thanks, Carly.

The outcome that makes the most sense for west Virginia for the long term.

Speaker 4: The next question comes from the line of David Alcaro with Morgan Stanley. Please proceed.

Okay, and then as a follow up I think you mentioned.

Nick Campanella: Oh, hey, thanks so much. Good morning.

Regulated generation, but also considering contracted.

John Taylor: Good morning, David.

Nick Campanella: you know, you, just on that same transmission CAPEX topic, you know, signaling, the up to 20% increase. you know, we're only halfway through the year, and it seems like the, you know, data center, load conversations are progressing fairly rapidly anyway. I'm just wondering, you know, could could there be further opportunities for upside as you get closer to your, you know, roll forward period? could that CAPEX outlook rise further, you know, in the coming months, essentially?

Unregulated generation is that an evolution in your thought process and.

Hey, good morning, good morning. I had another 1. Hey hey, Brian had another 1 on, on the West Virginia, um, generation plans are, are you mainly looking at building new dispatchable, generation yourself? Or would you consider, you know, buying something that someone else may be developing? I think 1 of your peers. Um,

Would that be something like similar to what PPL Blackstone announced a couple of weeks ago would you be looking for a partner similar to that too.

Is doing that.

Work on that.

If the risk profile, where to look like regulated I'd be comfortable with it meaning I wouldn't want us to be taking.

Our position.

John Taylor: Yeah, I think so, David. You know, we're we're not, putting in our plan things that we don't feel fairly certain about. So for it to be in the plan, it has to be contracted, with the customer, or we have to have had the award or feel fairly certain of the award from a competitive process, or we have to have line of sight that the investment is at the period that we're talking about. But against that backdrop, I think there will be additional customers who will come forward and sign contracts with us. I do think there will be awards coming out of the current open window. I think there will be additional open windows that happen.

In the capacity or energy markets for the benefit of a customer I wouldn't want us to be long generation that we're looking for a home for but if we were able to make an investment in generation that had a regulated type risk profile, that's something we consider.

And select the outcome that makes the most sense for West Virginia for the long term.

Okay. And and as a follow-up, I think you mentioned.

Regulated generation. But also considering contracted uh maybe unregulated generation is, is that an evolution in your thought process and, um,

Say thats an evolution for us we talked about that type of situation in our deregulated states as being something that we could consider if it could help solve the problem, but we're certainly not looking to be a merchant generator with new generation to.

Would that be something like similar to what PPL Blackstone announced a couple of weeks ago? Would, would you be looking for a partner similar to that to to work on that?

To sell into today's marketplace.

Okay.

Okay, great. Thank you.

John Taylor: So, I I I see upside to the plan, but we're not going to be frivolous in putting, you know, upside that we don't see line of sight to in our plan. But, yeah, I I do think there will be upside as we go forward, in time.

Q.

The next question comes from the line of Andrew Weisel with Scotiabank. Please proceed.

Hi, Thank you first question on data centers, a lot of new disclosures. Appreciate all the details on slide seven can you tell us what's the current level of data center demand Youre seeing today, and then it looks like a pretty substantial step up in the blue bar from 2025% to 2026 is that a specific customer ramping up.

Nick Campanella: Great. Yeah, it makes sense. thanks. And then, as we as we think about just how PJM states are going to be procuring new capacity, I was just wondering if there's been any progression with the discussions around what the framework might be, whether it's contracted generation, regulated generation, and any sense of when we might get clarity, as to as to the as to the direction certain states are going.

And can you give us a little more detail leave it around to the customer is or where in terms of which service territory.

Yeah, if if the risk profile were to look like regulated, I'd be comfortable with it. Meaning I wouldn't want us to be taking, um, a position, um, in the capacity or energy markets for the benefit of a customer. I wouldn't want us to be long generation that we're looking for a home for, but if we were able to make an investment in generation, that had a regulated type risk profile. That's something we consider. I wouldn't say that's an evolution for us, you know, we talked about that type of situation in our deregulated States as being something that we could consider if it could help solve the problem. But we're certainly not looking to be a merchant generator uh with new generation uh to sell into today's Marketplace.

Yeah. So Andrew this is John so so active customers debate today are probably 400 megawatts, but then you see the pipeline.

Okay, great. Thank you.

You.

John Taylor: You know, not a ton of clarity on that, David, in deregulated states. I am encouraged by the, PJM state-led technical conference that's going to happen on September 23rd, where all five of our state's governors are going to be participating in that. I I think the capacity auction situation is one that can only be solved by the states themselves. clearly, the capacity auction construct can't solve it, and hasn't solved it. The states can solve it, whether they decide to do so individually or through something like the outcome of the September, 23rd technical conference. I'm not sure, but I'm very pleased to see the governors engaged, taking a leadership role in this. And I think that's how we're going to get to the right solution here.

Continue.

To increase I mean, most of this is happening in Ohio.

The next question comes from the line of Andrew Wessel with skillshare bank, please proceed.

Maryland, and West Virginia.

We are starting to see a lot more interest in Pennsylvania and in fact, if you look at our large load studies that are greater than 500 megawatts.

I would say that probably a third of it.

What we're seeing just this year alone is in Pennsylvania.

Which is consistent with what some of the announcements have been over the course of the last.

Few months.

Hi. Thank you. Uh, first question on data centers, a lot of new disclosures appreciate all the details on slide 7, can you tell us what's the current level of data center demand? You're seeing today? And then it looks like a pretty substantial step up in the blue bar from 2025 to 2026. Is that a specific customer ramping up? And can you give us a little more detail either on who the customer is or where in terms of which service territory?

Okay great.

And then when would the next Capex refresh, becoming I think youre alluding to it would that be something we'd be seeing with the third quarter and <unk> more like year end update in February.

Well I think we wanted to get clarity on some of the transmission Capex with respect to this open window.

Yeah. So so Andrew, this is John. So, so active customers today today are probably 400 megawatts. Um, but then you see the pipeline uh continue to to to increase. I mean most of this is happening in Ohio um Maryland and West Virginia.

So we will likely provide the longer term capex plan on the fourth quarter call.

Um, we are starting to see a lot more interest in Pennsylvania. In fact, if you look at our large load studies that are greater than 500 megawatts,

Nick Campanella: Okay. Understood. Thank you.

Okay. Thank you very much.

John Taylor: Thank you.

Thank you Andrew.

Speaker 4: The next question comes from the line of Ross Ballard with Bank of America. Please proceed.

The next question comes from the line of Sophie Karp with Keybanc capital markets. Please proceed.

um, I would say that probably a third of what we're seeing just this year alone is in Pennsylvania, um, which is consistent with what some of the announcements have been over the course of the last, uh, you know, few months.

Speaker 7: Morning, Brian. Morning, John. How are you?

Hi, Good morning, Thank you for taking my question.

John Taylor: Morning, Lars. Morning.

Speaker 7: A lot of my questions have been asked, but maybe we could just cycle back to or circle back to Ohio regulation for a minute. So you're in this process with the PUCO for a forward test year. you know, we're thinking about affordability pressures with PJM also coming through the system. As you move from the ESP and as you go into the forward test year, maybe one piece is what what interveners seem most concerned about through that process. And then how would that shift your ability to have an opportunity to earn your allowed ROE and and think about regulatory lag?

I have a follow up on Ohio.

Could you talk a little bit about how travel.

<unk> in Indiana, Ohio regulatory strategy and.

Okay, great. Um, then when would the next capex refresh be coming? I think you're alluding to it. Would that be something we'd be seeing with the third quarter? In EI, or more like year end update in February?

Following the conclusion of the current trade key kind of like when do you plan to file.

The new framework will that depend on the southern outcomes of an existing rate case and et cetera.

Yes, so it will depend on outcomes in the existing rate case so.

Well, I think we want to get clarity on some of the transmission, uh, capex with respect to this open window. Uh, so we'll likely provide the longer term capex plan on the fourth quarter call.

If we are allowed to recover on investments that we've made since may of last year. When we filed the rate case that might allow us to push.

John Taylor: You know, we're we're in the midst of our current base rate case, which, we've had the testimony briefs that have been filed, reply briefs, and we're waiting for an answer in the current rate case. And all the things that you would anticipate, being covered by interveners are being covered there. cap structure, ROE, the rates themselves, like all of the normal things are being, considered in our base rate case. I I anticipate, Ross, that's going to be the case in these forward-looking test years that we have. you know, when we go in for the next rate case under the new regime, whenever that is, we're going to have a fairly limited period, that needs to be reviewed historically. And and since we have true ups on the forward-looking portion of the test year, I don't anticipate those being particularly contentious.

The rate case out a little bit.

If were not allowed to recover on investments. We've made since may of 2024 will be right back in for a multi year rate case.

As soon as practicable.

After we get the outcome of that rate case, so it really depends on the outcome of the current case.

In the side of Mr. Outstanding. So you wont have clarity until you actually have the final decision on it.

Yes, I think we will look to have a final decision on the existing base rate case before we filed a new rate case, if thats what youre asking.

I anticipate that we will get an outcome sometime in the fourth quarter based on where we are today with reply briefs filed early in July. So my sense is we will have an outcome.

In the fourth quarter and then we'll take some time to understand that and then we'll make some decisions.

As to what the next steps are.

John Taylor: So I think we'll be able to move through, the next rate case relatively easily in a fairly short period of time without many issues that haven't recently been discussed being raised. So, I I think, the new regime will be constructive and, and look forward to transitioning to that as quickly as possible.

Got it thank you very much it sounds corny.

Thank you.

Okay.

The next question comes from the line of Anthony <unk> with Mizuho Securities. Please proceed.

Hey, good morning, Brian Good morning, John.

Good morning, Anthony.

I wanted to follow up on David <unk> questions.

Speaker 7: And then, one follow-up to that, just in Ohio, we still have sort of the the remaining or the last, hopefully, remaining HB6-related processes. How do you see those progressing from here and and when can we finally think about wrapping and closing that so I don't have to ask the question anymore?

And I think Youre very clear you had said and I hope I heard it correctly that if you think the solution for the PJM capacity issues or the higher prices.

Are likely to be solved.

At the state level.

If that's correct in my understanding correct.

Which state that's NFC footprint do you think is maybe in the leader we're going to be one of the first to solve that problem.

John Taylor: Yeah. So similar, answer. We've we've been through, most of the rate case in that there have been no new issues raised, during that period. We anticipate getting an outcome later this year and and finally be able to put that chapter, behind us. But nothing new was raised in the hearings that, wasn't disclosed or unaccounted for previously. And we look forward to getting through, that proceeding and and putting a final period on that by the end of this year as well.

Sure.

I don't want to pick one Anthony.

I would say that Pennsylvania has been very active in demonstrating leadership on that.

Ohio clearly.

Just double down on the markets solving that problem for them. So I think they're going to rely on the PJM capacity construct and then I think the other states are somewhere in between what I'd call. Those extremes West Virginia is an ERP and I think Maryland.

Speaker 7: Okay. Perfect. Thank you, guys.

John Taylor: Thanks, Ross.

In New Jersey are very concerned about the issue and their governors are engaged so we're encouraging that engagement, we're participating in that engagement and encouraging states to take the leadership role that we think is the only solution to this issue.

Speaker 4: The next question comes from the line of Michael Sullivan with Loc Research. Please proceed.

Speaker 9: Hey, good morning.

John Taylor: Good morning.

Speaker 9: Had another one. Hey, hey, Brian. Had another one on on the West Virginia, generation plans. Are you mainly looking at building new dispatchable generation yourself, or would you consider, you know, buying something that someone else may be developing? I think one of your peers, is doing that.

Okay.

And I'm just throwing out do you think the states are that PJM looks to change maybe compensation different for.

New generation versus the existing generation gives you highlighted in your opening remarks.

I think it was $19 billion, but no new megawatts with no new dispatch four megawatts.

John Taylor: We're we're going to look at everything, of course. I I think what's needed in PJM is new dispatchable generation. And and my hope is that we'll be able to make investments in that in the state of West Virginia. But of course, we're going to look at everything and select the outcome that makes the most sense for West Virginia for the long term.

What we're seeing in the current construct is a massive wealth transfer from customers in PJM retail customers in PJM two large independent power producers, mostly located in Houston, Texas, I don't think Thats, a good public policy answer.

You know, I, I, I don't want to pick 1, uh, Anthony. Um, I I'd say that, you know, Pennsylvania has been very active in in demonstrating leadership on that. Um, Ohio. Clearly, uh, just doubled down on the markets, solving that problem for them. So, I think they're going to rely on the pjm capacity construct. And, and then I think the other states are, are somewhere in between what I call those extremes, West Virginia, you know, has an IRP and I think, uh, Maryland.

God bless those companies further.

Um um in New Jersey are very concerned about the issue and their Governors are engaged, so we're encouraging that engagement, we're participating in that engagement and encouraging states. To take the leadership role that we think is the only solution to this issue.

Their recent windfall that's great for them, it's not solving the problem that we need solved in PJM and that is new dispatch and will generation. So if the states finally decide that they've had enough of their customers paying for something that theyre not getting I think we'll get to solutions that help address the problem.

Speaker 9: Okay. And as a follow-up, I think you mentioned regulated generation, but also considering contracted, maybe unregulated generation. Is that an evolution in your thought process? And, would that be something like similar to what DPL Blackstone announced a couple of weeks ago? Would you be looking for a partner similar to that to to work on that?

Got it and then just lastly.

You guys talk about the potential I think of I.

John Taylor: Yeah. If if the risk profile were to look like regulated, I'd be comfortable with it. Meaning, I I wouldn't want us to be taking, a a position, in the capacity or energy markets for the benefit of a customer. I wouldn't want us to be long generation that we're looking for a home for. But if we were able to make an investment in generation that had a regulated type risk profile, that's something we consider. I I wouldn't say that's an evolution for us. You know, we talked about that type of situation in our deregulated states as being something that we could consider if it could help solve the problem. But we're certainly not looking to be a merchant generator, with new generation, to sell into today's marketplace.

I think it's 14 billion of more transmission spending just a cigar.

Do you? And I'm just throwing out. Do you think the states or the PGM looks to change? Maybe compensation different for New Generation versus existing generation. Because you highlighted in your opening remarks that, you know, I think it was 19 billion for no new megawatts or no new, uh, dispatchable. Megalodons. You know what, what we're seeing on the current construct is a massive wealth transfer from customers and pjm, Retail customers and pjm

Significant raising capex yesterday, we had other utilities announcing again significant raises I think another company today, along with you guys Big race deal. When you see all these numbers do you do you worry that maybe you don't have the equipment to deliver that to you quickly call. Your supply team to make sure. We haven't done any concerns when youre seeing the whole industry really.

To large independent power. Producers mostly located in Houston Texas. I don't think that's a good public policy answer.

<unk> raised capex to a level, we haven't seen an could you procure the equipment or the.

Could you build that much in this short of a time, yes. Thank you for the question Anthony we're confident that we have the relationships with vendors and suppliers and that they are included in our short medium and long term planning that we will be able to deliver against our commitments.

Um, God bless those companies for the, you know, their their recent windfalls that's great for them. It's not solving the problem that we need solved in pjm and that is new dispatchable generation. So if the states finally decide that they've had enough of their customers paying for something that they're not getting, I think we'll get the solutions that help address the problem.

Great. Thanks for taking my question guys congrats on the quarter.

Anthony.

Thank you.

Speaker 9: Okay. Great. Thank you.

And gentlemen, this concludes the question and answer session and this will conclude today's conference as well you may disconnect. Your lines at this time and thank you for your participation.

John Taylor: Thank you.

Speaker 4: The next question comes from the line of Andrew Wessel with Scotiabank. Please proceed.

Speaker 7: Hi. Thank you. first question on data centers. A lot of new disclosures. Appreciate all the details. On slide seven, can you tell us what's the current level of data center demand you're seeing today? And then it looks like a pretty substantial step up in the blue bar from 2025 to 2026. Is that a specific customer ramping up? And can you give us a little more detail either on who the customer is or where in terms of which service territory?

Okay. And and then just lastly um you you guys talk about the potential I think of uh I think it's 14 billion of more transmission spending just the significant raising capex. Yesterday we had other utilities announcing again significant raises. I think another company today along with you guys big Rays. I mean do you when you see all these numbers do you do you worry that maybe you don't have the equipment to deliver that. Do you quickly call your supply team to make sure we have another any concerns? When you're seeing the whole industry, really raise capex to level. We haven't seen and could, could you procure the equipment or the, could you build that much in this short of a time? Yeah. Thank you for the question Anthony. We're confident that we have the relationships with vendors and suppliers and that they're included in our short medium and long-term planning that we will be able to deliver against our commitments.

Great. Thanks for taking my question, guys. Congrats on the quarter. Thank you Anthony.

John Taylor: Yeah. So, so Andrew, this is John. So, so active customers today today are probably 400 megawatts. but then you see the pipeline, continue to to to increase. I mean, most of this is happening in Ohio, Maryland, and West Virginia. we are starting to see a lot more interest in Pennsylvania. In fact, if you look at our large load studies that are greater than 500 megawatts, I would say that probably a third of what we're seeing just this year alone is in Pennsylvania, which is consistent with what some of the announcements have been over the course of the last, you know, a few months.

Thank you, ladies and gentlemen, this concludes the question and answer session and this will conclude today's conference as well. You may disconnect your lines at this time and thank you for your participation.

Speaker 7: Okay. Great. and then when would the next CAPEX refresh be coming? I think you're alluding to it. Would that be something we'd be seeing with the third quarter in EEI or more like a year-end update in February?

John Taylor: Well, I think we want to get clarity on some of the transmission, CAPEX with respect to this open window. so we'll likely provide the longer-term CAPEX plan on the fourth quarter call.

Speaker 7: Okay. Thank you very much.

John Taylor: Thank you, Andrew.

Speaker 4: The next question comes from the line of Sophia Karp with KeyBank Capital Markets. Please proceed.

Speaker 10: Hi. Good morning. Thank you for taking my question. I have a follow-up on Ohio. could you talk a little bit about how, what your strategy is going to be in Ohio regulatory strategy, following the conclusion of the current rate case? Like, kind of like when do you plan to file under the new framework? Will that depend on certain outcomes in the existing rate case and, etc.?

John Taylor: Yeah. So it it will depend on outcomes in the existing rate case. So if if we are allowed to recover on investments that we've made since May of last year, when we filed the rate case, that might allow us to push, the rate case out a little bit. If we're not allowed to recover on investments we've made since May of 2024, we'll be right back in for a multi-year rate case, as as soon as practicable, after we get the outcome of that rate case. So it really depends on on the outcome of the current case.

Speaker 10: And the item is still outstanding, so you won't have clarity until you actually have the final decision on it?

John Taylor: Yeah. I think we'll look to have a final decision on the existing base rate case before we file the new rate case, if that's what you're asking. you know, and I I anticipate that we'll get an outcome sometime in the fourth quarter based on where we are today with, reply briefs filed early in July. So my sense is we'll have an outcome, you know, in the fourth quarter, and then we'll we'll take some time to understand that, and then we'll make some decisions as to what the next steps are.

Speaker 10: Got it. Thank you very much, Sophanie.

John Taylor: Thank you.

Speaker 4: The next question comes from the line of Anthony Claudo with Mizuho Securities. Please proceed.

Speaker 7: Hey, good morning, Brian. Good morning, John.

John Taylor: Morning. Morning, Anthony.

Speaker 7: Hey, I had a want to follow up on one of David Ocaro's questions. Brian, I think you're very clear, and you you had said, and I hope I heard it correctly, that if you think the solution for the PJM capacity issues or the higher prices are are likely to be solved, at the state level. If that's correct and my understanding is correct, which state that's in the FE footprint do you think is maybe in the lead or going to be one of the first to solve that problem? You know.

John Taylor: I don't want to pick one, Anthony. I'd say that, you know, Pennsylvania's been very active in in demonstrating leadership on that. Ohio clearly, just doubled down on the markets solving that problem for them. So I think they're going to rely on the PJM capacity construct. And then I think the other states are are somewhere in between what I'd call those extremes. West Virginia, you know, has an IRP. And I think, Maryland, and New Jersey are very concerned about the issue, and their governors are engaged. So we're encouraging that engagement. We're participating in that engagement and encouraging states to take the leadership role that we think is the only solution to this issue.

Speaker 7: And I'm just throwing out, do you think the states or that PJM looks to change maybe compensation different for new generation versus existing generation? Because you highlighted in your open remarks that, you know, I think it was 19 billion brought no new megawatts or no new dispatchable megawatts.

John Taylor: Yeah. What we're seeing on the current construct is a massive wealth transfer from customers in PJM, retail customers in PJM, to large independent power producers, mostly located in Houston, Texas. I don't think that's a good public policy answer. God bless those companies for the, you know, their their recent windfalls. That's great for them. It's not solving the problem that we need solved in PJM. And that is new dispatchable generation. So if the states finally decide that they've had enough of their customers paying for something that they're not getting, I think we'll get the solutions that help address the problem.

Speaker 7: Got it. And then just lastly, you guys talk about the potential, I think, of, I think it's 14 billion of more transmission spending. Just a significant raise in CAPEX. Yesterday, we had other utilities announcing, again, significant raises. I think another company today, along with you guys, big raise. I mean, do you, when you see all these numbers, do you do you worry that maybe you don't have the equipment to deliver that? Do you quickly call your supply team to make sure we have it? Are there any concerns when you're seeing the whole industry really raise CAPEX to a level we haven't seen? And could could you procure the equipment or the could you build that much in this short of a time?

John Taylor: Yeah. Thank you for the question, Anthony. We're confident that we have the relationships with vendors and suppliers and that they're included in our short, medium, and long-term planning that we will be able to deliver against our commitments.

Speaker 7: Great. Thanks for taking my question, guys. Congrats on the quarter.

John Taylor: Thank you, Anthony.

Speaker 4: Thank you. Ladies and gentlemen, this concludes the question and answer session, and this will conclude today's conference as well. You may disconnect your lines at this time, and thank you for your participation.