Q3 2025 Centerpoint Energy Inc Earnings Call

October 23, 2025

Good.

There will be a question and answer session. After managements remarks to ask a question press star one one or you touched on key pad.

I will now turn the call over to Ben Vallejo Director of Investor Relations and corporate planning Mr. Vallejo.

Good morning, and welcome to Centerpoint Q3, 2025 earnings Conference call, Jason Wells, our CEO and Chris Foster our CFO will discuss the company's third quarter results.

Management will discuss certain topics that will contain projections and other forward looking information and statements that are currently based on management's beliefs assumptions and information currently available to management.

These forward looking statements are subject to risks and uncertainties actual results could differ materially based on various factors as noted in our Form 10-Q, and other SEC filings as well as our earnings materials we.

We undertake no obligation to revise or update publicly any forward looking statements other than as required under applicable securities laws.

We reported diluted earnings per share of <unk> 45 for the third quarter of 2025 on a GAAP basis.

Management will be discussing certain non-GAAP measures on today's call when providing guidance we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS.

For information on our guidance methodology and reconciliation of the non-GAAP measures used in providing guidance. Please refer to our earnings news release and presentation on our website.

We use our website to announce material information. This call is being recorded information on how to access the replay can be found on our website now I'd like to turn the call over to Jason.

Thank you Ben and good morning, everyone.

On today's call I'd like to address three key focus areas for the quarter.

First I will briefly touch on the 10 year financial plan update we introduced just weeks ago.

Second I will walk through our strong third quarter financial results and lastly, I'll discuss our announcement from earlier this week regarding the sale of our Ohio gas LDC.

Last month, we introduced an ambitious 10 year plan focused on supporting economic development, delivering strong customer outcomes, reducing O&M through operational efficiency and driving value for our investors.

Our capital investment plan of at least $65 billion is supported by some of the fastest growing demand for energy anywhere in the country.

Specifically in our Houston Electric service territory, we forecast peak load demand to increase by 10 Gigawatts in 2031.

This forecasted growth would representing nearly 50% increase in peak demand over the next six years.

Additionally, through the middle of the next decade, we estimate the electric load demand on our system will double to approximately 42 gigawatts.

This level of demand will continue to support a strong investment profile.

Our capital investment plan through 2030 drives a projected rate base CAGR of over 11% through the end of the decade and the potential for double digit rate base growth through the middle of the next decade.

The greater Houston area is thriving powered by what we believe is the most diverse set of growth drivers in this sector. It is not relying on any single industry and the results speak for themselves.

This growth is an aspirational, it's already here, notably throughput in our Houston electric business were up 9% year to date.

This strong growth is anchored by our surge in industrial customer class throughput, which are up over 17% quarter over quarter and up over 11% year to date.

This incredible growth provides a solid foundation for our earnings guidance specifically.

Specifically, we have strong conviction in our ability to achieve non-GAAP EPS at the mid to high end of our 7% to 9% annual growth guidance from 2026 through 2028, and 7% to 9% annually thereafter through 2035.

I continue to believe we have one of the most differentiated plans in the industry because of our unique combination of the diversity and pace of electric demand growth, a derisked regulatory and financing profile.

And our ability to continue investing affordably for the benefit of our customers.

These attributes set us apart from our peers and enable us to continue to deliver value for all our stakeholders over the next decade and beyond.

Now moving to our strong third quarter financial results.

This morning, we reported non-GAAP EPS of <unk> 50 for the third quarter, representing a 60% increase over the same period last year.

As we signaled last quarter 2025 earnings reflect a more backend weighted profile for the year consistent with our return to traditional capital recovery mechanisms now that the bulk of our rate case activity is behind us.

Ben Vallejo: Prepared remarks. All participants will be in listen-only mode. There will be a question-and-answer session after management's remarks. To ask a question, press star 11 on your touch-tone keypad. I will now turn the call over to Ben Vallejo, Director of Investor Relations and Corporate Planning. Mr. Vallejo?

Benjamin Vallejo: Prepared remarks. All participants will be in listen-only mode. There will be a question-and-answer session after management's remarks. To ask a question, press star 11 on your touch-tone keypad. I will now turn the call over to Ben Vallejo, Director of Investor Relations and Corporate Planning. Mr. Vallejo?

I'll, let Chris cover the details in his section, but we remain well positioned to execute on our recently increased 2025, non-GAAP EPS guidance.

Chris Foster: Good morning, and welcome to CenterPoint's Q3 2025 earnings conference call. Jason Wells, our CEO, and Chris Foster, our CFO, will discuss the company's third-quarter results. Management will discuss certain topics that will contain projections and other forward-looking information and statements that are currently based on management's beliefs, assumptions, and information currently available to management. These forward-looking statements are subject to risks and uncertainties. Actual results could differ materially based on various factors, as noted in our Form 10-Q and other SEC filings, as well as our earnings materials. We undertake no obligation to revise or update publicly any forward-looking statement other than as required under applicable securities laws. We reported diluted earnings per share of $0.45 for the third quarter of 2025 on a GAAP basis. Management will be discussing certain non-GAAP measures on today's call.

As such we are reiterating our full year 2025, non-GAAP EPS guidance range of $1 75 to $1 77, which would represent 9% growth over 2024 delivered results of $1 62 per share.

Additionally, we are also reiterating our 2026 non-GAAP earnings guidance, we initiated a few weeks ago. As a reminder, we are targeting at least the midpoint of $1 89 to $1 91 per share.

At the midpoint this range would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range.

Further we continue to expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% long term annual guidance range from 2026 through 2028 and.

79% annually through 2035.

As a reminder, our guidance is based on actual delivered results as we continue to execute and deliver value for our shareholders each and every year.

Chris Foster: When providing guidance, we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS. For information on our guidance methodology and reconciliation of the non-GAAP measures used in providing guidance, please refer to our earnings news release and presentation on our website. We use our website to announce material information. This call is being recorded. Information on how to access the replay can be found on our website. Now, I'd like to turn the call over to Jason.

When providing guidance, we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS. For information on our guidance methodology and reconciliation of the non-GAAP measures used in providing guidance, please refer to our earnings news release and presentation on our website. We use our website to announce material information. This call is being recorded. Information on how to access the replay can be found on our website. Now, I'd like to turn the call over to Jason.

I would now like to discuss our recent announcement regarding the sale of our Ohio gas LDC.

Earlier this week, we announced the signing of our higher gas LDC transaction, which is expected to generate approximately $2 $6 billion in gross proceeds representing a significant milestone and executing our 10 year financial plan the.

as such we are reiterating our full year 2025 non-gaap EPS guidance range of 1.75 to 1.77 which would represent 9% growth over 2024 delivered results of 1.62 per share

The strong valuation of approximately one nine times 2020 for rate base underscores the exceptional demand for U S natural gas ldcs.

Jason Wells: Thank you, Ben, and good morning, everyone. On today's call, I'd like to address three key focus areas for the quarter. First, I will briefly touch on the 10-year financial plan update we introduced just weeks ago. Second, I will walk through our strong third-quarter financial results. And lastly, I'll discuss our announcement from earlier this week regarding the sale of our Ohio Gas LDC. Last month, we introduced an ambitious 10-year plan focused on supporting economic development, delivering strong customer outcomes, reducing O&M through operational efficiency, and driving value for our investors. Our capital investment plan of at least $65 billion is supported by some of the fastest-growing demand for energy anywhere in the country.

Additionally, we are also reiterating our 2026 non-GAAP earnings guidance that we initiated a few weeks ago. As a reminder, we are targeting at least the midpoint of $1.89 to $1.91 per share.

This outcome once again demonstrates our ability to efficiently finance our growth investments. This time by recycling the transaction proceeds of a high quality business at nearly two times book value and reallocating capital into our remaining portfolio at one times book value.

At the midpoint, this range would represent an 8% increase over the midpoint of our 2025 non-gaap EPS, guidance range.

The after tax net cash proceeds of approximately $2 4 billion will be redeployed into higher growth jurisdictions to efficiently fund our capital investment plan.

Further. We continue to expect to grow non-gaap EPS at the mid to high-end of our 700 and 9,000 long-term annual guidance range from 2026 through 2028.

And 79% annually through 2035.

<unk>. The proceeds should also provide additional flexibility and funding for future incremental capital investments.

As a reminder, our guidance is based on actual delivered results as we continue to execute and deliver value for our shareholders each and every year.

The transaction is expected to close in the fourth quarter of 2026, Chris will go into the details of the transaction, including the structure, which will allow us to more smoothly to redeploy capital while maintaining a strong earnings profile.

I'd now like to discuss the recent announcement regarding the sale of our Ohio. Gas LDC.

Jason Wells: Importantly, we also have visibility to at least $10 billion of incremental capital investment opportunities over the course of the plan, particularly in Texas, given the dramatic growth the communities we serve continue to experience. Specifically, in our Houston Electric service territory, we forecast peak load demand to increase by 10 gigawatts in 2031. This forecasted growth would represent a nearly 50% increase in peak demand over the next six years. Additionally, through the middle of the next decade, we estimate the electric load demand on our system will double to approximately 42 gigawatts. This level of demand will continue to support a strong investment profile. Our capital investment plan through 2030 drives a projected rate-based CAGR of over 11% through the end of the decade and the potential for double-digit rate-based growth through the middle of the next decade.

Importantly, we also have visibility to at least $10 billion of incremental capital investment opportunities over the course of the plan, particularly in Texas, given the dramatic growth the communities we serve continue to experience. Specifically, in our Houston Electric service territory, we forecast peak load demand to increase by 10 gigawatts in 2031. This forecasted growth would represent a nearly 50% increase in peak demand over the next six years. Additionally, through the middle of the next decade, we estimate the electric load demand on our system will double to approximately 42 gigawatts. This level of demand will continue to support a strong investment profile. Our capital investment plan through 2030 drives a projected rate-based CAGR of over 11% through the end of the decade and the potential for double-digit rate-based growth through the middle of the next decade.

It has been a privilege to serve the customers and communities and our Ohio gas business and we are committed to a smooth transition for our customers. This is a tremendous business with fantastic employees and we know they will continue to provide great service to 335000 metered customers in Ohio.

Earlier this week, we announced the signing of our Ohio, gas, LDC transaction, which is expected to generate approximately 2.6 billion dollars in Gross proceeds. Representing a significant milestone in executing our 10year financial plan.

The strong valuation of approximately 1.9 times 2024 rate based underscores, the exceptional demand for us Natural Gas ldcs.

This transaction reflects our continued commitment to disciplined capital allocation as we seek to further enable growth, especially in Texas and long term value creation for all stakeholders.

This outcome. Once again demonstrates our ability to finance our growth Investments. This Time by recycling. The transaction, proceeds of a high-quality business at nearly 2 times Book value in reallocating capital into our remaining portfolio at 1 type of value.

Our growing capital investment opportunities are supported by accelerating and diverse set of load growth drivers. This coupled with our ability to efficiently finance. Our plan continues to support our conviction that we have one of the most tangible long term growth plans in the industry and with that I'll hand, it over to Chris.

the after tax net cash proceeds of approximately 2.4 billion dollars will be redeployed into higher growth jurisdictions to efficiently fund, our capital investment plan,

Importantly, the proceeds should also provide additional flexibility and funding for future incremental capital investments.

Thanks, Jason.

Jason Wells: The greater Houston area is thriving, powered by what we believe is the most diverse set of growth drivers in the sector. It is not relying on any single industry, and the results speak for themselves. This growth isn't aspirational. It's already here. Notably, throughput in our Houston Electric business is up 9% year to date. This strong growth is anchored by our surging industrial customer class throughput, which is up over 17% quarter over quarter and up over 11% year to date. This incredible growth provides a solid foundation for our earnings guidance. Specifically, we have strong conviction in our ability to achieve non-GAAP EPS at the mid to high end of our 7% to 9% annual growth guidance from 2026 through 2028 and 7% to 9% annually thereafter through 2035.

The greater Houston area is thriving, powered by what we believe is the most diverse set of growth drivers in the sector. It is not relying on any single industry, and the results speak for themselves. This growth isn't aspirational. It's already here. Notably, throughput in our Houston Electric business is up 9% year to date. This strong growth is anchored by our surging industrial customer class throughput, which is up over 17% quarter over quarter and up over 11% year to date. This incredible growth provides a solid foundation for our earnings guidance. Specifically, we have strong conviction in our ability to achieve non-GAAP EPS at the mid to high end of our 7% to 9% annual growth guidance from 2026 through 2028 and 7% to 9% annually thereafter through 2035.

This morning, I will address four key areas of focus.

First I will review the details of our third quarter results.

Second I will discuss the transaction structure of the recently announced sale of our Ohio gas LDC.

The transaction is expected to close a fourth quarter of 2026. Chris will go into the details of the transaction, including its structure, which will allow us to more smoothly, get redeployed cattle while maintaining a strong earnings profile.

Third I will highlight our progress on the execution of our 2025 capital investment plan.

It has been a privilege to serve the customers and communities in our Ohio gas business. And we are committed to a smooth transition for our customers.

And lastly, I'll provide an update on where we ended the third quarter with respect to the balance sheet.

Let's now move to the financial results shown on slide five.

This is a tremendous business with fantastic employees and we know they will continue to provide great service to the 335,000 meter customers in Ohio.

On a GAAP EPS basis, we reported <unk> 45 for the third quarter of 2025.

On a non-GAAP EPS basis, we reported <unk> 50 for the third quarter of 2025 compared to 31 in the third quarter of 2024.

This transaction reflects our continued commitment to discipline and capital allocation as we seek to further enable growth, especially in Texas, and long-term recreation for all stakeholders.

Jason Wells: I continue to believe we have one of the most differentiated plans in the industry because of our unique combination of the diversity and pace of electric demand growth, a de-risked regulatory and financing profile, and our ability to continue investing affordably for the benefit of our customers. These attributes set us apart from our peers and enable us to continue to deliver value for all our stakeholders over the next decade and beyond. Now, moving to our strong third-quarter financial results. This morning, we reported non-GAAP EPS of $0.50 for the third quarter, representing a 60% increase over the same period last year. As we signaled last quarter, 2025 earnings reflect a more back-end-weighted profile for the year, consistent with our return to traditional capital recovery mechanisms now that the bulk of our rate case activity is behind us.

I continue to believe we have one of the most differentiated plans in the industry because of our unique combination of the diversity and pace of electric demand growth, a de-risked regulatory and financing profile, and our ability to continue investing affordably for the benefit of our customers. These attributes set us apart from our peers and enable us to continue to deliver value for all our stakeholders over the next decade and beyond. Now, moving to our strong third-quarter financial results. This morning, we reported non-GAAP EPS of $0.50 for the third quarter, representing a 60% increase over the same period last year. As we signaled last quarter, 2025 earnings reflect a more back-end-weighted profile for the year, consistent with our return to traditional capital recovery mechanisms now that the bulk of our rate case activity is behind us.

Our non-GAAP results remove <unk> <unk> of charges, primarily consisting of tax true ups related to the sale of our Louisiana, and Mississippi businesses and transaction costs in connection with our announced Ohio gas LDC sale.

Our growing capital investment opportunities are supported by accelerating and diverse set of load growth drivers. This coupled with our ability to finance, our plan continues to support our conviction that we have 1 of the most tangible long-term growth plans in the industry. And with that, I'll hand it over to Chris.

Thanks Jason.

In addition, it removes <unk> related to our temporary generation units as these units are no longer part of our rate regulated business.

This morning, I will address 4 key areas of focus.

First, I will review the details of our third-quarter results.

These strong results give us confidence in meeting our positively revised 2025, non-GAAP EPS guidance of $1 75 to $1 77.

Second, I'll discuss the transaction structure of the recently announced sale of our Ohio gas LDC.

Third, I'll highlight our progress on the execution of our 2025 capital investment plan.

Now taking a closer look at the drivers of our third quarter earnings.

Quarter with respect to the balance sheet.

Growth and rate recovery, when netted with depreciation and other taxes were a favorable variance of seven when.

Let's now move to the financial results shown on slide 5.

When compared to the same quarter of last year.

This positive variance underscores the strength of our interim capital tracker mechanisms, which continue to support the efficient recovery of our investments.

On a gaap EPS basis. We reported 45 cents for the third quarter of 2025

Jason Wells: I'll let Chris cover the details in his section, but we remain well-positioned to execute on our recently increased 2025 non-GAAP EPS guidance. As such, we are reiterating our full-year 2025 non-GAAP EPS guidance range of $1.75 to $1.77, which would represent 9% growth over 2024 delivered results of $1.62 per share. Additionally, we are also reiterating our 2026 non-GAAP earnings guidance we initiated a few weeks ago. As a reminder, we are targeting at least the midpoint of $1.89 to $1.91 per share. At the midpoint, this range would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range. Further, we continue to expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% long-term annual guidance range from 2026 through 2028 and 7% to 9% annually through 2035.

I'll let Chris cover the details in his section, but we remain well-positioned to execute on our recently increased 2025 non-GAAP EPS guidance. As such, we are reiterating our full-year 2025 non-GAAP EPS guidance range of $1.75 to $1.77, which would represent 9% growth over 2024 delivered results of $1.62 per share. Additionally, we are also reiterating our 2026 non-GAAP earnings guidance we initiated a few weeks ago. As a reminder, we are targeting at least the midpoint of $1.89 to $1.91 per share. At the midpoint, this range would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range. Further, we continue to expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% long-term annual guidance range from 2026 through 2028 and 7% to 9% annually through 2035.

We expect these tailwind to continue driving earnings through the remainder of the year.

On a non-GAAP EPS basis, we reported 50 cents for the third quarter of 2025 compared to 31 cents in the third quarter of 2024.

During the quarter, we filed for our second set of interim capital recovery trackers at Houston Electric.

The T cost and DCF mechanisms, which support the timely recovery of transmission and distribution investments respectively.

Our non-GAAP results removed 3 cents of charges, primarily consisting of tax-related expenses, RUBs associated with the sale of our Louisiana and Mississippi businesses, and transaction costs in connection with our announced Ohio gas LDC sale.

Our T cost filings, which included a $15 million annual revenue requirement increase was approved and reflected in customer rates on October 10th.

In addition, it removes 2 cents related to our temporary generation units. As these units are no longer part of our rate regulated business,

Our <unk> filing which includes a $55 million annual revenue increase is on the PUC T. Open meeting agenda for later today.

These strong results. Give us confidence in meeting our positively revised, 2025 non-gaap EPS, guidance of a $1.75 to $1.77

With updated rates expected to take effect in December.

Now, taking a closer look at the drivers of our third quarter earnings.

Weather and usage were once unfavorable when compared to the comparable quarter last year, driven by fewer outages across our Houston Electric service territory related to storm activity.

growth and rate recovery when netted with depreciation and other taxes.

Where a favorable variance of 7 cents when compared to the same quarter of last year.

Jason Wells: As a reminder, our guidance is based on actual delivered results as we continue to execute and deliver value for our shareholders each and every year. I'd now like to discuss the recent announcement regarding the sale of our Ohio Gas LDC. Earlier this week, we announced the signing of our Ohio Gas LDC transaction, which is expected to generate approximately $2.6 billion in gross proceeds, representing a significant milestone in executing our 10-year financial plan. The strong valuation of approximately 1.9x 2024 rate base underscores the exceptional demand for US natural gas LDCs. This outcome once again demonstrates our ability to efficiently finance our growth investments, this time by recycling the transaction proceeds of a high-quality business at nearly 2x book value and reallocating capital into our remaining portfolio at 1x book value.

As a reminder, our guidance is based on actual delivered results as we continue to execute and deliver value for our shareholders each and every year. I'd now like to discuss the recent announcement regarding the sale of our Ohio Gas LDC. Earlier this week, we announced the signing of our Ohio Gas LDC transaction, which is expected to generate approximately $2.6 billion in gross proceeds, representing a significant milestone in executing our 10-year financial plan. The strong valuation of approximately 1.9x 2024 rate base underscores the exceptional demand for US natural gas LDCs. This outcome once again demonstrates our ability to efficiently finance our growth investments, this time by recycling the transaction proceeds of a high-quality business at nearly 2x book value and reallocating capital into our remaining portfolio at 1x book value.

O&M was 12 favorable compared to the third quarter of 2024.

This positive variance underscores the strength of our interim capital tracker mechanisms, which continue to support the efficient recovery of arms.

This significant improvement in O&M is primarily driven by last August vegetation management, and other storm related costs, where.

We expect these Tailwinds to continue driving earnings through the remainder of the year.

Where we spent approximately $100 million to accelerate work and improve customer outcomes.

During the quarter, we filed for our second set of interim, Capital recovery trackers at Houston Electric.

Additionally, we had <unk> <unk> of favorability and other which is primarily driven by an income tax remeasurement.

The tcos and dcrf mechanisms, which support the timely recovery of transmission and distribution Investments respectively.

This reflects our continued efforts to optimize our tax structure to align with the evolving composition of our portfolio, which after the closing of our Ohio transaction.

Our T cost filing which included a 15 million annual revenue, requirement increase was approved and reflected in customer rates on October 10th.

Will skew more heavily towards Texas.

These favorable drivers were partially offset by a <unk> of higher interest expense and financing costs.

Our dcrf filing which includes the 55 million annual revenue increase is on the PCT open meeting agenda for later today.

Merrily due to incremental debt issuances since the third quarter of 2024.

With updated rates expected to take effect in December.

Next I'll go through the details of our recently announced Ohio gas LDC sale.

Jason Wells: The after-tax net cash proceeds of approximately $2.4 billion will be redeployed into higher growth jurisdictions to efficiently fund our capital investment plan. Importantly, the proceeds should also provide additional flexibility in funding for future incremental capital investments. The transaction is expected to close in Q4 of 2026. Chris will go into the details of the transaction, including its structure, which will allow us to more smoothly redeploy capital while maintaining a strong earnings profile. It has been a privilege to serve the customers and communities in our Ohio Gas business, and we are committed to a smooth transition for our customers. This is a tremendous business with fantastic employees, and we know they will continue to provide great service to 335,000 metered customers in Ohio.

The after-tax net cash proceeds of approximately $2.4 billion will be redeployed into higher growth jurisdictions to efficiently fund our capital investment plan. Importantly, the proceeds should also provide additional flexibility in funding for future incremental capital investments. The transaction is expected to close in Q4 of 2026. Chris will go into the details of the transaction, including its structure, which will allow us to more smoothly redeploy capital while maintaining a strong earnings profile. It has been a privilege to serve the customers and communities in our Ohio Gas business, and we are committed to a smooth transition for our customers. This is a tremendous business with fantastic employees, and we know they will continue to provide great service to 335,000 metered customers in Ohio.

As many of you may have seen earlier this week, we announced the sale of our hydro gas LDC, which.

Whether in usage or 1 cent favorable when compared to the comparable quarter last year, driven by fewer outages across our Houston Electric Service territory related to storm activity.

Which is expected to generate gross sale proceeds of approximately $2 six 2 billion.

Onm was 12 cents favorable compared to the third quarter of 2024.

Garnering a multiple of nearly one nine times 2024 year end rate base.

Significant Improvement in onm is primarily driven by last August vegetation management and other storm related costs.

We anticipate total net proceeds of roughly $2 4 billion after taxes and transaction costs.

Where we spent approximately a hundred million dollars to accelerate work and improve customer outcomes.

This is an outstanding outcome.

This result exceeds what was contemplated in our financing plans underscore.

Additionally, we had 3 cents of favorability in other, which is primarily driven by an income tax for measurement.

Underscoring the conservative approach, we take to our planning process.

As such the transaction will be accretive to both our plan and alternative financing sources.

This reflects our continued efforts to optimize our tax structure to align with the evolving composition of our portfolio, which, after the closing of our Ohio transaction, will skew more heavily towards Texas.

In the near term these proceeds will serve to further strengthen our balance sheet.

And over the long term as Jason alluded to this transaction will allow for greater financing flexibility.

Jason Wells: This transaction reflects our continued commitment to disciplined capital allocation as we seek to further enable growth, especially in Texas, and long-term value creation for all stakeholders. Our growing capital investment opportunities are supported by an accelerating and diverse set of load growth drivers. This, coupled with our ability to efficiently finance our plan, continues to support our conviction that we have one of the most tangible long-term growth plans in the industry. With that, I'll hand it over to Chris.

This transaction reflects our continued commitment to disciplined capital allocation as we seek to further enable growth, especially in Texas, and long-term value creation for all stakeholders. Our growing capital investment opportunities are supported by an accelerating and diverse set of load growth drivers. This, coupled with our ability to efficiently finance our plan, continues to support our conviction that we have one of the most tangible long-term growth plans in the industry. With that, I'll hand it over to Chris.

These favorable drivers were partially offset by 4 cents of higher, interest expense and financing costs.

primarily due to incremental debt issuances since the third quarter of 2024.

And may enable us to fund incremental capital investments with less equity and a 47% rule of thumb, we provided at our September investor update.

Next, I'll go through the details of our recently announced Ohio Gas LDC sale.

Transaction proceeds will be redeployed into higher growth jurisdictions to support near term capital investments in our Texas electric and gas businesses.

As many of you may have seen earlier this week, we announced the sale of our Ohio, gas LDC.

Which is expected to generate gross. Sale proceeds of approximately 2.62 billion.

Notably after the close of this transaction, Texas will represent 70% of our investment portfolio.

Chris Foster: Thanks, Jason. This morning, I will address four key areas of focus. First, I will review the details of our third quarter results. Second, I'll discuss the transaction structure of the recently announced sale of our Ohio Gas LDC. Third, I'll highlight our progress on the execution of our 2025 capital investment plan. And lastly, I'll provide an update on where we ended the third quarter with respect to the balance sheet. Let's now move to the financial results shown on slide five. On a GAAP EPS basis, we reported $0.45 for the third quarter of 2025. On a non-GAAP EPS basis, we reported $0.50 for the third quarter of 2025, compared to $0.31 in the third quarter of 2024.

Garnering a multiple of nearly 1.9 times the 2024 year-end rate base.

In connection with the transaction, we will enter into a one year sellers note with a six 5% annual coupon, which will help support earnings in 2027.

We anticipate total net proceeds of roughly $2.4 billion after taxes and transaction costs.

This is an outstanding outcome.

This result exceeds what was contemplated in our financing plans.

As a reminder.

Last quarter, we announced an increase to our 2025 investment plan as we continue to make targeted system enhancements.

Underscoring the conservative approach we take to our planning process.

These incremental investments will help partially offset the loss of Ohio investment upon the close of the sale.

As such the transaction will be accretive to both our plan and alternative financing sources.

The transaction is expected to close in the fourth quarter of 2026, aligning with our financing plans and long term value creation goals.

In the near term, these proceeds will serve to further strengthen our balance sheet.

Next I'll touch on our capital investment plan execution through the third quarter as shown here on slide seven.

And over the long term as Jason alluded to this transaction will allow for greater financing flexibility and may enable us to fund incremental, Capital Investments with less Equity than the 47% rule of thumb. We provided at our September investor update.

For the quarter were right on track to meet our positively revised 2025 capital investment target of $5 3 billion.

Chris Foster: Our non-GAAP results removed $0.03 of charges, primarily consisting of tax true-ups related to the sale of our Louisiana and Mississippi businesses, and transaction costs in connection with our announced Ohio Gas LDC sale. In addition, it removes $0.02 related to our temporary generation units, as these units are no longer part of our rate-regulated business. These strong results give us confidence in meeting our positively revised 2025 non-GAAP EPS guidance of $1.75 to $1.77. Now, taking a closer look at the drivers of our Q3 earnings, growth and rate recovery, when netted with depreciation and other taxes, were a favorable variance of $0.07 when compared to the same quarter of last year. This positive variance underscores the strength of our interim capital tracker mechanisms, which continue to support the efficient recovery of our investments.

Our non-GAAP results removed $0.03 of charges, primarily consisting of tax true-ups related to the sale of our Louisiana and Mississippi businesses, and transaction costs in connection with our announced Ohio Gas LDC sale. In addition, it removes $0.02 related to our temporary generation units, as these units are no longer part of our rate-regulated business. These strong results give us confidence in meeting our positively revised 2025 non-GAAP EPS guidance of $1.75 to $1.77. Now, taking a closer look at the drivers of our Q3 earnings, growth and rate recovery, when netted with depreciation and other taxes, were a favorable variance of $0.07 when compared to the same quarter of last year. This positive variance underscores the strength of our interim capital tracker mechanisms, which continue to support the efficient recovery of our investments.

In the third quarter, we invested $1 $3 billion of base work for the benefit of our customers and communities.

Transaction proceeds will be redeployed into higher growth, jurisdictions to support near-term Capital investments in our Texas, electric and gas businesses.

Which combined with a $2 $4 billion, we invested in the first half of the year.

Notably, after the close of this transaction, Texas will represent 70% of our Investment Portfolio.

Represents approximately 70% of our total year target.

In short, we remain well positioned to achieve our investment targets for 2025.

In connection with the transaction. We will enter into a 1-year. Sellers note with a 6.5% annual coupon, which will help support earnings in 2027.

As a reminder.

Now moving to an update on our balance sheet and credit metrics.

As of the end of the quarter, our trailing 12 months adjusted <unk> to debt ratio based on the Moody's rating methodology with 14%.

Targeted system enhancements.

These incremental investments will help partially offset the loss of Ohio Investments upon the close of the sale.

When removing transitory storm related impacts.

We anticipate these credit metrics can be further improved by early next year as we expect to issue securitization bonds in connection with hurricane barrel in the first quarter of 2026.

The transaction is expected to close in the fourth quarter of 2026 aligning with our financing plans, and long-term value creation goals.

Chris Foster: We expect these tailwinds to continue driving earnings through the remainder of the year. During the quarter, we filed for our second set of interim capital recovery trackers at Houston Electric, the TCOS and DCRF mechanisms, which support the timely recovery of transmission and distribution investments, respectively. Our TCOS filing, which included a $15 million annual revenue requirement increase, was approved and reflected in customer rates on 10 October. Our DCRF filing, which includes a $55 million annual revenue increase, is on the PUCT open meeting agenda for later today, with updated rates expected to take effect in December. Weather and usage were $0.01 favorable when compared to the comparable quarter last year, driven by fewer outages across our Houston Electric service territory related to storm activity. O&M was $0.12 favorable compared to Q3 2024.

We expect these tailwinds to continue driving earnings through the remainder of the year. During the quarter, we filed for our second set of interim capital recovery trackers at Houston Electric, the TCOS and DCRF mechanisms, which support the timely recovery of transmission and distribution investments, respectively. Our TCOS filing, which included a $15 million annual revenue requirement increase, was approved and reflected in customer rates on 10 October. Our DCRF filing, which includes a $55 million annual revenue increase, is on the PUCT open meeting agenda for later today, with updated rates expected to take effect in December. Weather and usage were $0.01 favorable when compared to the comparable quarter last year, driven by fewer outages across our Houston Electric service territory related to storm activity. O&M was $0.12 favorable compared to Q3 2024.

Next, I'll touch on our capital investment plan execution through the third quarter, as shown here on slide 7.

We continue to target 100 to 150 basis points above our Moody's downgrade threshold of 13% as we remain laser focused on efficiently financing our robust capital investment plan.

For the quarter, we are right on track to meet our positively revised 2025 capital investment target of $5.3 billion.

Earlier this month, we once again illustrated our commitment to a strong balance sheet through our $700 million junior subordinated note issuance, which provides 50% equity credit.

In the third quarter, we invested 1 for the benefit of our customers and communities.

Which combined with the $2.4 billion we invested in the first half of the year.

Represents approximately 70% of our total year Target.

Our common equity guide through 2030 remains unchanged at $2 $75 billion.

In short, we remain well, positioned to achieve our investment targets for 2025.

As a reminder, we have derisked over $1 billion of these equity needs through the forward sales, we executed earlier this year and.

now, moving to an update on our balance sheet and credit metrics,

And we do not anticipate common equity needs beyond those forward sales from now through 2027.

As of the end of the quarter, our trailing 12 months, adjusted ffo to debt ratio based on the Moody's, rating methodology with 14%.

We believe we are well positioned to execute the remainder of the year and beyond.

when removing transitory storm related impacts

And we are reaffirming our 2025 non-GAAP EPS guidance range of $1 75 to $1 77.

Chris Foster: This significant improvement in O&M is primarily driven by last August's vegetation management and other storm-related costs, where we spent approximately $100 million to accelerate work and improve customer outcomes. Additionally, we had three cents of favorability in Other, which is primarily driven by an income tax remeasurement. This reflects our continued efforts to optimize our tax structure to align with the evolving composition of our portfolio, which, after the closing of our Ohio transaction, will skew more heavily towards Texas. These favorable drivers were partially offset by four cents of higher interest expense and financing costs, primarily due to incremental debt issuances since Q3 2024. Next, I'll go through the details of our recently announced Ohio Gas LDC sale.

This significant improvement in O&M is primarily driven by last August's vegetation management and other storm-related costs, where we spent approximately $100 million to accelerate work and improve customer outcomes. Additionally, we had three cents of favorability in Other, which is primarily driven by an income tax remeasurement. This reflects our continued efforts to optimize our tax structure to align with the evolving composition of our portfolio, which, after the closing of our Ohio transaction, will skew more heavily towards Texas. These favorable drivers were partially offset by four cents of higher interest expense and financing costs, primarily due to incremental debt issuances since Q3 2024. Next, I'll go through the details of our recently announced Ohio Gas LDC sale.

We anticipate these credit metrics could be further improved by early next year as we expect to issue securitization bonds and connection with hurricane Barrel in the first quarter of 2026.

Which equates to 9% growth at the midpoint from our delivered 2024, non-GAAP EPS of $1 62.

Additionally, we are also reiterating our 2026 non-GAAP earnings guidance, we initiated a few weeks ago at our investor update from the midpoint of our new and higher 2025 range.

We continue to Target 100 to 150 basis points above our Moody's. Downgrade threshold of 13%. As we remain laser focused on efficiently, financing our robust capital investment plan.

For 2026, we are targeting at least the midpoint of $1 89 to $1 91.

Earlier this month we once again Illustrated our commitment to a strong balance sheet through our 700 million. Junior subordinated. Note issuance which provides 50% Equity Credit

At the midpoint this would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range.

Our common Equity guide through 2030 remains unchanged at 2.75 billion.

Looking ahead, we expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% range from 2026 through 2028.

As a reminder, we have drift over a billion dollars of these Equity needs through the forward sales. We executed earlier this year,

After 2028, we will target growing earnings annually at 7% to 9% through 2035.

and we do not anticipate, common Equity needs Beyond those forward sales from now, through 2027.

Chris Foster: As many of you may have seen, earlier this week, we announced the sale of our Ohio Gas LDC, which is expected to generate gross sale proceeds of approximately $2.62 billion, garnering a multiple of nearly 1.9x 2024 year-end rate base. We anticipate total net proceeds of roughly $2.4 billion after taxes and transaction costs. This is an outstanding outcome. This result exceeds what was contemplated in our financing plans, underscoring the conservative approach we take to our planning process. As such, the transaction will be accretive to both our plan and alternative financing sources. In the near term, these proceeds will serve to further strengthen our balance sheet.

As many of you may have seen, earlier this week, we announced the sale of our Ohio Gas LDC, which is expected to generate gross sale proceeds of approximately $2.62 billion, garnering a multiple of nearly 1.9x 2024 year-end rate base. We anticipate total net proceeds of roughly $2.4 billion after taxes and transaction costs. This is an outstanding outcome. This result exceeds what was contemplated in our financing plans, underscoring the conservative approach we take to our planning process. As such, the transaction will be accretive to both our plan and alternative financing sources. In the near term, these proceeds will serve to further strengthen our balance sheet.

we believe we are well positioned to execute the remainder of the year and Beyond

We look forward to executing our plan that delivers on the most diverse growth drivers in the country fueling economic development for years to come.

And we are reaffirming our 2025, non-gaap EPS guidance range of a $1.75 to $1.77.

And with that I'll now turn the call back over to Jason.

Thank you Chris I'm proud of the team's continued execution over the past quarter and our results have firmly put us on track to deliver our guidance this year.

Which equates to 9% growth at the midpoint from our delivered 2024 non-gaap EPS of 1.62.

Additionally.

This management team will work to not only execute the ambitious targets, we set forth in our new industry, leading 10 year plan, but we will also work to enhance the plan for the benefit of all of our stakeholders.

We are also reiterating our 2026 non-gaap earnings guidance. We initiated a few weeks ago at our investor update from the midpoint of our new and higher 2025 range.

For 2026. We are targeting at least the midpoint of 189 to 1.91.

Thanks, Jason operator, I'd now like to turn it over to Q&A.

At this time, we will begin taking questions. If you wish to ask a question. Please press star. One one are you touched on key pad the company requests that when asking a question colors pick up their telephone handsets. Thank you.

At the midpoint, this would represent an 8% increase over the midpoint of our 2025 non-gaap EPS, guidance range.

Chris Foster: Over the long term, as Jason alluded to, this transaction will allow for greater financing flexibility and may enable us to fund incremental capital investments with less equity than the 47% Rule of Thumb we provided at our September investor update. Transaction proceeds will be redeployed into higher growth jurisdictions to support near-term capital investments in our Texas Electric and Gas businesses. Notably, after the close of this transaction, Texas will represent 70% of our investment portfolio. In connection with the transaction, we will enter into a one-year Seller's Note with a 6.5% annual coupon, which will help support earnings in 2027. As a reminder, last quarter, we announced an increase to our 2025 investment plan as we continue to make targeted system enhancements. These incremental investments will help partially offset the loss of Ohio investments upon the close of the sale.

Over the long term, as Jason alluded to, this transaction will allow for greater financing flexibility and may enable us to fund incremental capital investments with less equity than the 47% Rule of Thumb we provided at our September investor update. Transaction proceeds will be redeployed into higher growth jurisdictions to support near-term capital investments in our Texas Electric and Gas businesses. Notably, after the close of this transaction, Texas will represent 70% of our investment portfolio. In connection with the transaction, we will enter into a one-year Seller's Note with a 6.5% annual coupon, which will help support earnings in 2027. As a reminder, last quarter, we announced an increase to our 2025 investment plan as we continue to make targeted system enhancements. These incremental investments will help partially offset the loss of Ohio investments upon the close of the sale.

Looking ahead. We expect to grow non-gaap EPS at the mid to high end of our 7 to 9% range from 2026 through 2028.

Our first question is from Nick Campanella of Barclays. Your line is now open.

After 2028, we will Target growing earnings annually at 7 to 9% through 2035.

Hey, good morning, Thanks for all the disclosures.

Good morning, Ed.

We look forward to executing our plan that delivers on the most diverse growth drivers in the country. Fueling economic development for years to come

Hey, good morning, I, just wanted to ask Chris you talked a little bit about it in your prepared remarks on our balance sheet capacity here from the Ohio transaction.

And with that, I'll now turn the call back over to Jason.

How are you kind of viewing it on like an <unk> to debt improvement basis versus the plan you mentioned.

Thank you, Chris. I'm proud of the team's continued execution, over the past quarter and the results that firmly put us on track to deliver our guidance this year.

Financing may be less than the 45, 47% equity assumption.

Is that is that now 30 or 15 is there any kind of way to further quantify that thanks.

This management team will work to not only execute the ambitious parts we set forth in our new industry but we will also work to enhance for the benefit of all of our stakeholders.

Sure Hi, Nick.

If I could just maybe take a step back.

And as you look at the transaction, there's really a couple of things going on one is over time, you've seen us continue down this path of <unk>.

Thanks, Jason. Operator, I'd now like to turn it over to Q&A.

Chris Foster: The transaction is expected to close in Q4 2026, aligning with our financing plans and long-term value creation goals. Next, I'll touch on our capital investment plan execution through Q3, as shown here on slide seven. For the quarter, we are right on track to meet our positively revised 2025 capital investment target of $5.3 billion. In Q3, we invested $1.3 billion of base work for the benefit of our customers and communities, which, combined with the $2.4 billion we invested in H1 of the year, represents approximately 70% of our total year target. In short, we remain well-positioned to achieve our investment targets for 2025. Now, moving to an update on our balance sheet and credit metrics.

The transaction is expected to close in Q4 2026, aligning with our financing plans and long-term value creation goals. Next, I'll touch on our capital investment plan execution through Q3, as shown here on slide seven. For the quarter, we are right on track to meet our positively revised 2025 capital investment target of $5.3 billion. In Q3, we invested $1.3 billion of base work for the benefit of our customers and communities, which, combined with the $2.4 billion we invested in H1 of the year, represents approximately 70% of our total year target. In short, we remain well-positioned to achieve our investment targets for 2025. Now, moving to an update on our balance sheet and credit metrics.

<unk> really that far.

Focus on the portfolio, we are reducing also earnings in cash lag, where we can so maybe that kind of goes to that point.

At this time, we will begin taking questions. If you wish to ask a question. Please press star 1 1 on your touchtone keypad the company request that when asking a question callers pick up their telephone handsets. Thank you.

As you look at the total outcome as we do sources and uses Youll, probably see us initially step into reducing the opco debt. That's there so thats roughly $800 million. If you base. It on our year end 'twenty six rate base of $1 six.

Our first question is from Nick Campanella of Barclays. Your line is now open.

Hey, good morning. Uh thanks for all the disclosures.

And then as we looked at our plan overall youre, probably looking at on the order of $400 million in benefit.

Net to plan.

So ultimately what that puts us in a position to do as you can imagine as we will evaluate both the improvement to the balance sheet here in the near term and then as we go forward it could allow us to deploy additional capex to the plan in an accretive way.

Okay, Great I appreciate it and then just maybe on the deal just any update on how local feedback has been on the ground and reception to the deal from state leadership since it was announced.

Is that now? 30 or 15? Is there any kind of way to further quantify that? Thanks.

Chris Foster: As of the end of the quarter, our trailing 12 months adjusted FFO to debt ratio based on the Moody's rating methodology was 14% when removing transitory storm-related impacts. We anticipate these credit metrics could be further improved by early next year, as we expect to issue securitization bonds in connection with Hurricane Beryl in Q1 2026. We continue to target 100 to 150 basis points above our Moody's downgrade threshold of 13%, as we remain laser-focused on efficiently financing our robust capital investment plan. Earlier this month, we once again illustrated our commitment to a strong balance sheet through our $700 million junior subordinated note issuance, which provides 50% equity credit. Our common equity guide through 2030 remains unchanged at $2.75 billion.

As of the end of the quarter, our trailing 12 months adjusted FFO to debt ratio based on the Moody's rating methodology was 14% when removing transitory storm-related impacts. We anticipate these credit metrics could be further improved by early next year, as we expect to issue securitization bonds in connection with Hurricane Beryl in Q1 2026. We continue to target 100 to 150 basis points above our Moody's downgrade threshold of 13%, as we remain laser-focused on efficiently financing our robust capital investment plan. Earlier this month, we once again illustrated our commitment to a strong balance sheet through our $700 million junior subordinated note issuance, which provides 50% equity credit. Our common equity guide through 2030 remains unchanged at $2.75 billion.

Sure. Hi, Nick. Um, if I could just maybe take a step back and, as you look at the transaction, there's really...

Yes, good morning, Nick It's Jason Richey.

<unk> has been.

Great. So far very supportive Joe anticipate any challenges and obviously going to work with <unk>.

Our counterparty to successfully transition this business continued its track record of Great service in Ohio.

A couple things going on 1 is is over time. You've seen us continue down this path of increasing, really? The focus on the portfolio where we're reducing also earnings and cash lag where we can. So maybe that kind of goes to your have a photo to that point as you look at the the total outcome as we do sources and uses, you'll probably see us

Alright, Thanks, a lot.

Thank you. Our next question is from Steve Fleishman with Wolfe Research. Your line is now open.

Initially step into reducing uh the op code debt, that's there. So that's roughly 800 million. If you if you base it on a year end 26 rate base of a billion 6.

Yes.

Hi, good morning.

And then as we looked at our, our plan overall, you're probably looking on the order of 400 million and a benefit.

Just.

Net to plan.

Maybe.

Jason Chris more color on the sales growth in Texas, which obviously thats very strong.

Just what.

What sectors are driving the industrial sales.

So ultimately what this puts us in a position to do is you can imagine is, we'll evaluate both, you know, the Improvement to the balance sheet here in the near term. And then, as we go forward, it could allow us to deploy additional capex to the plan and in a creative way.

Chris Foster: As a reminder, we have de-risked over a billion dollars of these equity needs through the forward sales we executed earlier this year, and we do not anticipate common equity needs beyond those forward sales from now through 2027. We believe we are well-positioned to execute the remainder of the year and beyond, and we are reaffirming our 2025 non-GAAP EPS guidance range of $1.75 to 1.77, which equates to 9% growth at the midpoint from our delivered 2024 non-GAAP EPS of $1.62. Additionally, we are also reiterating our 2026 non-GAAP earnings guidance we initiated a few weeks ago at our investor update from the midpoint of our new and higher 2025 range. For 2026, we are targeting at least the midpoint of $1.89 to 1.91. At the midpoint, this would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range.

As a reminder, we have de-risked over a billion dollars of these equity needs through the forward sales we executed earlier this year, and we do not anticipate common equity needs beyond those forward sales from now through 2027. We believe we are well-positioned to execute the remainder of the year and beyond, and we are reaffirming our 2025 non-GAAP EPS guidance range of $1.75 to 1.77, which equates to 9% growth at the midpoint from our delivered 2024 non-GAAP EPS of $1.62. Additionally, we are also reiterating our 2026 non-GAAP earnings guidance we initiated a few weeks ago at our investor update from the midpoint of our new and higher 2025 range. For 2026, we are targeting at least the midpoint of $1.89 to 1.91. At the midpoint, this would represent an 8% increase over the midpoint of our 2025 non-GAAP EPS guidance range.

So much higher this year.

Good morning, Steve Thanks for the question I think.

Throughput growth quarter over quarter year over year really reflects the diversity of drivers that we have here in the greater Houston area.

Okay, great. Uh, appreciate it. And then just maybe on the deal, just uh, any update on how, you know, local feedback has been on the ground and you know reception to the deal from State leadership since it was announced

Already connected this year.

Loan over half a gig of data center activity.

Much of that is on the transmission sort of industrial rail side, we continue to see.

Very strong demand from energy refining and processing and exports.

Yeah good morning Nick. It's uh it's Jason uh reception has been uh great so far very supportive don't anticipate. You know any challenges and obviously going to work with our counterparty to successfully transition this business and you know continue to track record of uh great service in Ohio.

And I think what we really saw that as a differentiator of this this quarter was the increase in activity at the port of Houston, which is the largest port by waterborne tonnage in the world and we saw about an 18% increase quarter over quarter.

Great. Thanks a lot.

Thank you. Our next question is from Steve fleshman, with wolf research, your let us know, open

Hi, good morning. Um

Exports.

So it's really just a diversity of drivers this isn't growth that we're anticipating coming down. The line. This is growth across a number of different industries that we're experiencing today.

Just, uh, maybe, uh, Jason or Chris, more on the, uh, the sales growth in Texas, which obviously, that's very strong.

You know, just what?

What sectors are driving industrial sales? They are so high—much higher this year.

Chris Foster: Looking ahead, we expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% range from 2026 through 2028. After 2028, we will target growing earnings annually at 7% to 9% through 2035. We look forward to executing our plan that delivers on the most diverse growth drivers in the country, fueling economic development for years to come. With that, I'll now turn the call back over to Jason.

Looking ahead, we expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% range from 2026 through 2028. After 2028, we will target growing earnings annually at 7% to 9% through 2035. We look forward to executing our plan that delivers on the most diverse growth drivers in the country, fueling economic development for years to come. With that, I'll now turn the call back over to Jason.

Okay, Great. That's helpful. And then just any update on prospects of.

Yeah, good morning, Steve. Uh, thanks for the question, you know. I think the...

Data center activity in Indiana.

I don't know if you want to share any thoughts on how you're feeling about the regulatory.

Throughput uh growth quarter over quarter a year over year really reflects the diversity of uh drivers that we have here in the Greater Houston area. You know we've already connected this year

The environment in Indiana, I know you don't have any cases, there right now, but just thoughts there.

Yes, we continue to actively work.

Data center opportunities in Indiana.

Alone over a half a gig of data center activity. Um, much of that is on the transmission, sort of industrial REITs side. You know, we we continue to see

Well positioned to deliver on that as we've talked about in capacity.

Jason Wells: Thank you, Chris. I'm proud of the team's continued execution over the past quarter and the results that firmly put us on track to deliver our guidance this year. This management team will work to not only execute the ambitious targets we set forth in our new industry-leading 10-year plan, but we will also work to enhance the plan for the benefit of all of our stakeholders.

Very strong demand from energy refining processing, and exports.

Pretty uniquely positioned in the fact that we've got excess capacity today on the system that allows us to move quickly. It's an area that is very constructive both from.

Cost of an availability of land water et cetera, and we've just brought online our simple cycle plant that was built to be.

And I think what we really saw as a differentiator, this uh, this quarter was the increase in activity at the Port of Houston, you know? It's the largest port uh, by waterborne tonnage in the world.

Easily converted to combined cycle.

Ben Vallejo: Thanks, Jason. Operator, I'd now like to turn it over to Q&A.

Benjamin Vallejo: Thanks, Jason. Operator, I'd now like to turn it over to Q&A.

Allow us to efficiently increase the level of capacity available. So we continue to feel good about.

And we saw about an 18% increase quarter over quarter in exports. So it's really just a diversity of drivers. You know, this isn't growth that we're anticipating coming out.

Operator: At this time, we will begin taking questions. If you wish to ask a question, please press star 11 on your touch-tone keypad. The company requests that when asking a question, callers pick up their telephone handsets. Thank you. Our first question is from Nick Campanella of Barclays. Your line is now open.

Growth across a number of different industries that we're experiencing today.

The prospects of bringing.

Data center activity to southwest, Indiana stepping back on kind of a broader base. Yes. We are all focused on affordability of our service out there.

Okay, great, that's helpful. And then just any update on prospects of uh data center activity in in Indiana and

We like many of the other Indiana utilities.

A fairly significant step up in rates last year as a result of.

Nicholas Campanella: Hey, good morning. Thanks for all the disclosures.

I don't know if you want to share any thoughts on how you're feeling about the regulatory environment in Indiana. I know you don't have any case there right now but thoughts there. Yeah, we continue to actively work.

Ben Vallejo: Good morning, Nick.

Benjamin Vallejo: Good morning, Nick.

Long term trend.

Nicholas Campanella: Hey, morning. I just wanted to ask, you know, Chris, you talked a little bit about it in your prepared remarks on balance sheet capacity here from the Ohio transaction. You know, how are you kind of viewing it on, you know, like an FFO to debt improvement basis versus the plan? You mentioned financing maybe less than the 47% equity assumption. Is that now 30 or 15? Is there any kind of way to further quantify that? Thanks.

data center opportunities in Indiana, feel

Closing some very old.

Generating facilities as we project forward, though.

uh well positioned uh to deliver on that as we talked about in the past, I think.

We see our rates growing in line with inflation.

Over the remainder of this decade.

Taken some steps to help mitigate the impact we cancelled about $1 billion of.

It's pretty uniquely positioned in the fact that we've got excess capacity today in the system that allows us to move quickly. Uh, it's an area that is very constructive. Both from a

Renewable projects.

We will push out the retirement of our third and final call facility a few more years and so I think at the end of the day, we like other utilities are taking proactive steps to to make sure that we moderate the pace.

Ben Vallejo: Sure. Hi, Nick. If I could just maybe take a step back, and as you look at the transaction, there's really a couple of things going on. One is, over time, you've seen us continue down this path of increasing really the focus on the portfolio where we're reducing also earnings and cash lag where we can. So maybe that kind of goes to your FFO to debt point. As you look at the total outcome, as we do sources and uses, you'll probably see us initially step into reducing the opco debt that's there. So that's roughly $800 million if you base it on a year-end 2026 rate base of $1.6 billion. And then as we looked at our plan overall, you're probably looking on the order of $400 million of benefit net to plan.

Benjamin Vallejo: Sure. Hi, Nick. If I could just maybe take a step back, and as you look at the transaction, there's really a couple of things going on. One is, over time, you've seen us continue down this path of increasing really the focus on the portfolio where we're reducing also earnings and cash lag where we can. So maybe that kind of goes to your FFO to debt point. As you look at the total outcome, as we do sources and uses, you'll probably see us initially step into reducing the opco debt that's there. So that's roughly $800 million if you base it on a year-end 2026 rate base of $1.6 billion. And then as we looked at our plan overall, you're probably looking on the order of $400 million of benefit net to plan.

Cost of an availability of land, water, Etc. And, you know, we've just brought online or simple cycle plant that, uh, was built to be easily converted to combined cycle. Uh, that would allow us to efficiently, uh, increase the level of of capacity available. So, you know, we continue to feel good about, uh,

Rate increases, but working constructively to bring economic development activity to the state and I think that's very much aligned with.

the prospects of

Bringing. Um,

The.

State leadership.

<unk>.

TSR activity to to Southwest Indiana you know stepping back on kind of a broader basis. You know we are all focused on

Okay, great. Thank you.

affordability of our service up there.

Thank you. Our next question is from Jeremy Tonet with Jpmorgan Securities. Your line is now open.

Hi, good morning.

Good morning, Jamie.

Hi, Chris Thanks for the comments there on the asset sale I was just wondering if it might be able to expand a little bit more sounds like a nice credit accretive properties to the final deal terms versus expectations I'm. Just wondering if you could expand a bit more I guess on whether you see this being accretive to the earnings over time or any thoughts on that.

Ben Vallejo: So ultimately, what this puts us in a position to do, as you can imagine, is we'll evaluate both, you know, the improvement to the balance sheet here in the near term, and then as we go forward, it could allow us to deploy additional CapEx to the plan in an accretive way.

So ultimately, what this puts us in a position to do, as you can imagine, is we'll evaluate both, you know, the improvement to the balance sheet here in the near term, and then as we go forward, it could allow us to deploy additional CapEx to the plan in an accretive way.

We like many of the other Indiana utilities had a fairly significant Step Up in race last year as a result of uh long-term trend of of of closing. Some very old uh generating facilities. As we project forward though. We uh we don't we see our rates growing in line with inflation. Uh

Of renewable projects. Uh,

Nicholas Campanella: Okay, great. Appreciate it. And then just maybe on the deal, just any update on how, you know, local feedback has been on the ground and, you know, reception to the deal from state leadership since it was announced?

Sure I think Jeremy that a couple of ways to look at this we do see it as directly beneficial to the financing plan as I mentioned in an helpful from an earnings standpoint to a thing to keep in mind is.

As we looked at the sale here of Ohio, specifically from as we reallocate spend we're going to be in a situation where were experiencing 25% to 30% less.

Ben Vallejo: Yeah, good morning, Nick. It's Jason. Reception has been great so far, very supportive. Don't anticipate, you know, any challenges, and obviously going to work with our counterparty to successfully transition this business and, you know, continue to track record of great service in Ohio.

Jason Wells: Yeah, good morning, Nick. It's Jason. Reception has been great so far, very supportive. Don't anticipate, you know, any challenges, and obviously going to work with our counterparty to successfully transition this business and, you know, continue to track record of great service in Ohio.

And we'll push out the uh, retirement of our third and final coal facility, a few more years. And so, I think at the end of the day, uh, we like other utilities are taking, you know, proactive steps to, uh, to make sure that we moderate the pace of uh, rate increases. But working constructively to bring Economic Development activity to the state. And I think that's very much aligned with uh,

Less cash lag.

The uh, State leadership, uh, goals.

Just on a historical basis, so I think thats certainly helpful as well going forward, we'll be putting those dollars to work as Jason mentioned.

Great. Thank you.

Nicholas Campanella: Great. Thanks a lot.

Operator: Thank you. Our next question is from Steve Fleischman with Wolfe Research. Your line is now open.

Currently heavily in our Texas gas electric business, including in a set of Texas gas projects that we're excited about really for years to come where it really is a great business as you know coming out of the rate case last year. There. So I think well positioned both financing wise and from an earnings standpoint keep in mind.

Thank you. Our next question is from Jeremy tonette with JP Morgan. Securities. Your line is now open.

Hi, good morning.

good morning, Jeremy

Steven Fleishman: Hi, good morning. Just maybe, Jason or Chris, more color on the sales growth in Texas, which obviously that's very strong. You know, just what sectors are driving the industrial sales so much higher this year?

Steve Fleishman: Hi, good morning. Just maybe, Jason or Chris, more color on the sales growth in Texas, which obviously that's very strong. You know, just what sectors are driving the industrial sales so much higher this year?

Uh, Chris, thanks for the uh, comments there on, on the asset sale. I was just wondering if you might be able to expand a little bit more, sounds like a nice.

I alluded to this in my prepared remarks, but were just emphasize here too as we're stepping into making sure that.

Credit accretive uh properties uh to the uh final field terms versus expectations. I'm just wondering if you could expand a bit more, I guess on uh whether you see this being a creative to the earnings over time, or any thoughts on that, but

We were managing any otherwise earnings impact.

Ben Vallejo: Yeah, good morning, Steve. Thanks for the question. You know, I think the throughput growth quarter over quarter, year over year really reflects the diversity of drivers that we have here in the greater Houston area. You know, we've already connected this year alone over half a gig of data center activity. Much of that is on the transmission sort of industrial rate side. You know, we continue to see very strong demand from energy refining, processing, and exports. And I think what we really saw as a differentiator this quarter was the increase in activity at the Port of Houston. You know, it's the largest port by waterborne tonnage in the world, and we saw about an 18% increase quarter over quarter in exports. So it's really just a diversity of drivers. You know, this isn't growth that we're anticipating coming down the line.

Benjamin Vallejo: Yeah, good morning, Steve. Thanks for the question. You know, I think the throughput growth quarter over quarter, year over year really reflects the diversity of drivers that we have here in the greater Houston area. You know, we've already connected this year alone over half a gig of data center activity. Much of that is on the transmission sort of industrial rate side. You know, we continue to see very strong demand from energy refining, processing, and exports. And I think what we really saw as a differentiator this quarter was the increase in activity at the Port of Houston. You know, it's the largest port by waterborne tonnage in the world, and we saw about an 18% increase quarter over quarter in exports. So it's really just a diversity of drivers. You know, this isn't growth that we're anticipating coming down the line.

We've already deployed about $500 million this year that we expressed in our plan.

Keep in mind as I mentioned earlier this is about $1 six year end 'twenty six rate base. So you should assume that we're also going to accelerate another roughly $1 billion in 2026 that means net here, we're going to fully replace that rate base, but at the beginning of 2027, so overall positions us well going forward.

Sure. I think uh, Jeremy the couple ways to look at this. We do see it as directly beneficial to the financing plan. As I mentioned in, in helpful, from an earnings standpoint too, a thing to keep in mind is

As we looked at um, the sale here of Ohio specifically from a as we real reallocate spend, we're going to be in a situation where we're experiencing 25 to 30%.

That's very helpful. Thanks, and just one more I guess on the.

Sellers note.

Trout.

As you guys are receiving in the deal as far as how you think about.

How that helps facilitate the plan and what value that brings to centerpoint here being able to layer that in and how that allows you to I guess too.

Less cash lag, um, just on a historical basis. So I think that that's really helpful as well. Going forward will be, you know, putting those dollars to work as Jason mentioned. Uh, certainly heavily in our Tech gas electric business including in a a set of Texas Gas projects that we're excited about really for for years to come uh where it's really is a great business as, you know, coming out of the ray case last year there. So I think wealth position both financing wise and from an earnings standpoint,

Manage earnings.

Going forward, but it sounds like the capital.

Plan is he said really is that as a big offset there.

Ben Vallejo: This is growth across a number of different industries that we're experiencing today.

This is growth across a number of different industries that we're experiencing today.

Yes, certainly from a capital allocation plan, we've been pre funding thoughtfully, what I would say on the seller note is it's a pretty straightforward instrument, there, where we will have that opportunity for the second year for 2027, having that six 5% coupon associated with it on just over $1 billion and so.

Steven Fleishman: Okay, great. That's helpful. And then just any update on prospects of data center activity in Indiana? And I don't know if you want to share any thoughts on how you're feeling about the regulatory environment in Indiana. I know you don't have any cases there right now, but just thoughts there.

Steve Fleishman: Okay, great. That's helpful. And then just any update on prospects of data center activity in Indiana? And I don't know if you want to share any thoughts on how you're feeling about the regulatory environment in Indiana. I know you don't have any cases there right now, but just thoughts there.

keep in mind. Um, I alluded to this in my, my prepared remarks, but would just emphasize here too. Um, as we're stepping into making sure that um we've we were managing any otherwise earnings impact. Uh, we've already deployed about $500 million this year that we expressed um in our plan.

And keep in mind, as I mentioned earlier, this is about a billion 6, uh, year end 2026, Ray base.

Allows us again to have good clarity would also settled on a quarterly basis, I think which is nice too. So there's no real lag there so straightforward instrument one that.

Ben Vallejo: Yeah, we continue to actively work. Data center opportunities in Indiana feel well-positioned to deliver on that. As we've talked about in the past, I think we're pretty uniquely positioned due to the fact that we've got excess capacity today in the system that allows us to move quickly. It's an area that is very constructive, both from a cost and availability of land, water, et cetera. And, you know, we've just brought online our simple cycle plant that was built to be easily converted to a combined cycle that would allow us to efficiently increase the level of capacity available. So, you know, we continue to feel good about the prospects of bringing data center activity to Southwest Indiana. You know, stepping back on kind of a broader basis, you know, we are all focused on affordability of our service up there.

Benjamin Vallejo: Yeah, we continue to actively work. Data center opportunities in Indiana feel well-positioned to deliver on that. As we've talked about in the past, I think we're pretty uniquely positioned due to the fact that we've got excess capacity today in the system that allows us to move quickly. It's an area that is very constructive, both from a cost and availability of land, water, et cetera. And, you know, we've just brought online our simple cycle plant that was built to be easily converted to a combined cycle that would allow us to efficiently increase the level of capacity available. So, you know, we continue to feel good about the prospects of bringing data center activity to Southwest Indiana. You know, stepping back on kind of a broader basis, you know, we are all focused on affordability of our service up there.

Helpful component of the plan as well.

So you should assume that we're also going to accelerate another roughly billion dollars in in 2026, that means net here. We're going to have fully replaced that Ray base, uh, by the beginning of 2027. So, overall positions as well going forward.

Got it I'll leave it there thank you.

Thanks, Jeremy.

Thank you.

Last question comes from the line of Julien Dumoulin Smith with Jefferies. Your line is now open.

Hey, good morning team. Thank you guys very much I appreciate it.

Good morning Julien.

Hey, Good morning, Hey, Jason quickly a couple of things to follow up on first off I know you alluded to it a few weeks ago here, but.

How do you think about the Armani and rollout and the timeline on that front I mean, certainly it seems like this is a multi year project here, but certainly within the scope of the five year plan. How do you think about the cadence of that rolling in when do we start to get some visibility around that and contributions.

That's very helpful. Thanks and just 1 moment on the uh seller's note as uh as you guys are receiving in the deal as far as you know, how you think about how that helps facilitate the plan and and what value I guess that brings to to Center Point here, being able to layer that in and you know, how that allows you I guess to manage earnings, uh, going forward, but it sounds like the capital, uh, you know, plan as you said really is a, is a big offset, their

Yes, Julian Thanks for the question.

This next generation.

Ally.

Investments.

Ben Vallejo: We, like many of the other Indiana utilities, had a fairly significant step up in rates last year as a result of a long-term trend of closing some very old generating facilities. As we project forward, though, we don't see our rates growing in line with inflation over the remainder of this decade. You know, we've taken some steps to help kind of mitigate the impact. We've canceled about $1 billion of renewable projects, and we'll push out the retirement of our third and final coal facility a few more years. And so I think at the end of the day, we, like other utilities, are taking, you know, proactive steps to make sure that we moderate the pace of rate increases, but working constructively to bring economic development activity to the state. And I think that's very much aligned with the state leadership's goals.

We, like many of the other Indiana utilities, had a fairly significant step up in rates last year as a result of a long-term trend of closing some very old generating facilities. As we project forward, though, we don't see our rates growing in line with inflation over the remainder of this decade. You know, we've taken some steps to help kind of mitigate the impact. We've canceled about $1 billion of renewable projects, and we'll push out the retirement of our third and final coal facility a few more years. And so I think at the end of the day, we, like other utilities, are taking, you know, proactive steps to make sure that we moderate the pace of rate increases, but working constructively to bring economic development activity to the state. And I think that's very much aligned with the state leadership's goals.

Really we'll start.

And in our plan in 2006, maybe taking a step back for a second as we released the new $65 billion.

Yeah, certainly from a capital allocation plan, we've been pre-funding thoughtfully. What I would say in the seller note is it's a pretty straightforward instrument uh, there where we'll have that opportunity for the second year so 2027 having that 6.5% coupon associated with it on on just over a billion dollars. And so uh, allows us again to have good Clarity. It also settles on a quarterly basis, I think, which is nice too, so there's no real lag there. So straightforward instrument, uh, 1 that um, is a helpful component of the plan as well.

10 year Capex plan, we identified.

Got it. I'll leave it there. Thank you.

More than $10 billion of upside I would consider one of these projects.

Thanks, Jeremy.

Thank you.

One of the one of the upside opportunities to that plan.

Coming back to the timing of the most important thing that we can do.

Our last question comes from the line of Julian. Dulmen Smith with Jeffrey's your line is now open.

Run a pilot in 2006 to prove the use case and benefits for our customers.

Hey, good morning team. Thank you guys very much. I appreciate it.

Good morning, Julian.

And then I would really look at that once we have that pilot in and making a filing with the.

PSEG and really starting to kind of work this project.

And our earnings beginning in 2027 and beyond and again, there are very real benefits for our customers as we've talked about in the past.

Hey good morning. Hey Jason quickly, a couple things to follow up on first off. I I know you alluded to it a few weeks ago here but um how do you think about the Ami and and roll out and the timeline on that front? I mean, certainly it seems like this is a multi-year project here but certainly in within the scope of the 5-year plan, how do you think about the Cadence of that rolling in um when do we start to get some visibility around that and contributions?

When we experienced winter storm yuriy because of the generation of meters. We had at the time, we could not use those meters for load shed related activities instead, we add too.

Yeah, Julian. Thanks for the question. You know, the

This next generation of, uh, Ami.

Steven Fleishman: Okay, great. Thank you.

Steve Fleishman: Okay, great. Thank you.

Investments.

Operator: Thank you. Our next question is from Jeremy Tonet with J.P. Morgan Securities. Your line is now open.

Load at the circuit level.

Next generation.

Smart meters would allow us to do that at home and I think would allow us to be much more targeted.

Jeremy Tonet: Hi, good morning.

Ben Vallejo: Good morning, Jeremy.

Benjamin Vallejo: Good morning, Jeremy.

Jeremy Tonet: Chris, thanks for the comments there on the asset sale. I was just wondering if you might be able to expand a little bit more. Sounds like a nice, credit-accretive properties to the final field terms versus expectations. And just wondering if you could expand a bit more, I guess, on whether you see this being accretive to the earnings over time or any thoughts on that side.

And allow for even more rolling of power.

Winter storm area was to occur against a number of benefits.

Our customers, we need to prove those out with a pilot in 2006.

Look towards more fulsome deployments beginning in 2007.

Excellent. Thank you for that and then if I could pivot in a slightly different direction, obviously kudos on the transaction here is the other item if I were to think about like what's not in terms of included in the formal guidance on cash flows as mobile Jan I perceive at the economics and price points, there continue to improve as.

Something that we can do is run a pilot in 2026 to prove the use case and benefits for our customers.

Ben Vallejo: Sure. I think, Jeremy, that a couple of ways to look at this. We do see it as directly beneficial to the financing plan, as I mentioned, and helpful from an earnings standpoint too. A thing to keep in mind is, as we looked at the sale here of Ohio specifically, from a, as we reallocate spend, we're going to be in a situation where we're experiencing 25% to 30% less cash lag just on a historical basis. So I think that's certainly helpful as well. Going forward, we'll be now putting those dollars to work, as Jason mentioned, certainly heavily in our Texas gas and electric business, including in a set of Texas gas projects that we're excited about really for years to come, where it really is a great business, as you know, coming out of the rate case last year there.

Benjamin Vallejo: Sure. I think, Jeremy, that a couple of ways to look at this. We do see it as directly beneficial to the financing plan, as I mentioned, and helpful from an earnings standpoint too. A thing to keep in mind is, as we looked at the sale here of Ohio specifically, from a, as we reallocate spend, we're going to be in a situation where we're experiencing 25% to 30% less cash lag just on a historical basis. So I think that's certainly helpful as well. Going forward, we'll be now putting those dollars to work, as Jason mentioned, certainly heavily in our Texas gas and electric business, including in a set of Texas gas projects that we're excited about really for years to come, where it really is a great business, as you know, coming out of the rate case last year there.

And then I would really look at that. Once we have that pilot in hand uh making a file in with uh with the PCT and and and really starting to kind of work this project.

Evidenced by.

Uh, in Earnest, beginning, in 2027 and Beyond. I think there are very real benefits for our customers as we've talked about in the past.

Some of the folks out there like for me talking about this but how would you characterize.

Today.

Where you are around that and the opportunities that exist.

More of the longer term, obviously is that it's less committed.

In terms of the existing units and your exposure to some of that improved market pricing.

Yes, there's really two aspects to that Julien Theres first we've got what we call medium sized units just a little bit larger than five megawatts of PS five units five megawatts a piece of that.

You know, when we experience winter storm Yuri because of the generation in meters, we had at the time, we could not use those meters for load shed related activities. Instead we had to um shed load at the circuit level, you know this next Generation uh, of of smart meters would allow us to do that at the home. And I think would allow us to be much more targeted.

Ben Vallejo: So I think well-positioned both financing-wise and from an earnings standpoint. Keep in mind, I alluded to this in my prepared remarks, but would just emphasize here too. As we're stepping into making sure that we were managing any otherwise earnings impact, we've already deployed about $500 million this year that we expressed in our plan. And keep in mind, as I mentioned earlier, this is about $1.6 billion of year-end 2026 rate base. So you should assume that we're also going to accelerate another roughly $1 billion in 2026. That means net here, we're going to fully replace that rate base by the beginning of 2027. So overall, position is just well going forward.

So I think well-positioned both financing-wise and from an earnings standpoint. Keep in mind, I alluded to this in my prepared remarks, but would just emphasize here too. As we're stepping into making sure that we were managing any otherwise earnings impact, we've already deployed about $500 million this year that we expressed in our plan. And keep in mind, as I mentioned earlier, this is about $1.6 billion of year-end 2026 rate base. So you should assume that we're also going to accelerate another roughly $1 billion in 2026. That means net here, we're going to fully replace that rate base by the beginning of 2027. So overall, position is just well going forward.

And, uh, allow for even more rolling of power. If an event like winter storm, Yuri was to occur again. So a number of benefits. Uh,

Sure.

Currently.

To our customers, we need to prove those out with a pilot in '26 and then.

We have the ability to market and are actively doing that.

look towards more wholesome deployment.

Market for those units remains.

<unk> strong and would be a potential cash flow tailwind in the plan.

On a larger basis, we have 15 units that are roughly kind of call them 30 megawatts of piece.

Better now actively supporting the grant outside of San Antonio until either kind of late 2006.

Excellent, thank you for that. And then if I could give it slight and slightly different direction, obviously, Kudos on the transaction here. The other item if I were to think about like what's not in, in terms of included, in the formal guidance on cash. Flows is is mo. I i perceive that the economics, um, and price points, they're continue to improve as evidenced by. Um, some of the

Early 27 at the latest at which time, then we will be able to remarket those units as.

As you said the market remains strong if anything is improving modestly that will become a.

Jeremy Tonet: That's very helpful. Thanks. Just one more, I guess, on the seller's note, as you guys are receiving in the deal, as far as, you know, how you think about how that helps facilitate the plan and what value, I guess, that brings to CenterPoint here, being able to layer that in and, you know, how that allows you, I guess, to manage earnings going forward. But it sounds like the capital, you know, plan, as you said, really is a big offset there.

Our cash flow tailwind when we can release those units from the support of the aircraft grade in San Antonio in every market that was again.

Folks out there, like, for me talking about this. But, um, how would you characterize, um, today, where you are around that, the opportunities that exist, um, more in the longer term? Obviously, it's less committed, um, in terms of the existing units and your exposure to some of that, uh, improved market pricing.

Probably likely around spring of 2007.

We continue to work with brokers.

Third parties to keep a pulse on the market and think about how we can kind of derisked can take advantage of.

Uh, larger than 5 megawatts a piece. 5 units, 5 megawatts a piece that, um,

you know currently uh,

This growth, but obviously more to come here.

<unk>.

Ben Vallejo: Yeah, certainly from a capital allocation plan, we've been prefunding thoughtfully. What I would say in the seller note is it's a pretty straightforward instrument there where we'll have that opportunity for the second year for 2027, having that 6.5% coupon associated with it on just over $1 billion. And so allows us, again, to have good clarity. It also settles on a quarterly basis, I think, which is nice too. So there's no real lag there. So straightforward instrument, one that is a helpful component of the plan as well.

Benjamin Vallejo: Yeah, certainly from a capital allocation plan, we've been prefunding thoughtfully. What I would say in the seller note is it's a pretty straightforward instrument there where we'll have that opportunity for the second year for 2027, having that 6.5% coupon associated with it on just over $1 billion. And so allows us, again, to have good clarity. It also settles on a quarterly basis, I think, which is nice too. So there's no real lag there. So straightforward instrument, one that is a helpful component of the plan as well.

Quarters unfold as we get closer to those.

We have the ability to market, and we are actively doing that. The market for those units remains strong.

Really service units.

A very strong and would be a potential. No cash flow to deal with the plan.

Excellent sorry, and Thats, a nitpick what final detail here HB for three or four right. So thats your peers in the state your gas utilities has kind of been talking a good bit about this.

On a larger basis, we have uh 15 units that are roughly going to call them 30, megawatts a piece.

I know that you all in the in the interim of talk up even more gas investments in your plan a few weeks ago.

That are now actively supporting the grid outside of, uh, San Antonio until either kind of late 26.

Is the scope of the contribution from that legislation.

Fully included in the plan and to what extent is there is there anything else that we should be considering here given your expanded investment in gas in recent weeks.

Early 27th at the latest at which time and we'll be able to remarket those uh, those units.

Jeremy Tonet: Got it. I'll leave it there. Thank you.

Ben Vallejo: Thanks, Jeremy.

Benjamin Vallejo: Thanks, Jeremy.

Operator: Thank you. Our last question comes from the line of Julien Dumoulin-Smith with Jefferies. Your line is now open.

Yes, we think that that was a very constructive.

Pisa legislation to help sort of reduce regulatory lag.

As you said, the the market remains strong, if anything, um, is improving modestly, that will become a, um, a cash flow Tailwind. When we can release those units from the support of the aircraft and San Antonio and, and

Julien Dumoulin-Smith: Hey, good morning, team. Thank you guys very much. I appreciate it.

Market that was again.

What I would say is the benefit of that legislation is incorporated in the plan that we released with respect to.

Ben Vallejo: Good morning, Julien.

Benjamin Vallejo: Good morning, Julien.

Julien Dumoulin-Smith: Hey, good morning. Hey, Jason, quickly, a couple of things to follow up on. First off, I know you alluded to it a few weeks ago here, but how do you think about the AMI and rollout and the timeline on that front? I mean, certainly it seems like this is a multi-year project here, but certainly within the scope of the five-year plan, how do you think about the cadence of that rolling in? When do we start to get some visibility around that and contributions?

You know, probably like around spring of of, of 27. So, you know, we continue to work with brokers.

The investments that we have identified.

Third parties to keep a pulse on the market and think about how we can kind of de-risk and take advantage.

As we continue to look at enhancing their plan.

And we've alluded to the.

10 billion plus outside there is opportunity as we fall gas related capital in that.

Of this growth. But obviously more to come here, uh, as, uh, as the quarters unfold as we get closer to those uh, release those units.

Yes.

Ben Vallejo: Yeah, Julien, thanks for the question. You know, this next generation of AMI investments really will start to fold into the plan in 2026, maybe taking a step back for a second, you know, as we release the new $65 billion 10-year CapEx plan we identified, you know, more than $10 billion of upside. I would consider one of these projects as, you know, one of the upside opportunities to that plan. I think coming back to the timing, the most important thing that we can do is run a pilot in 2026 to prove the use case and benefits for our customers. And then I would really look at that once we have that pilot in hand, making a filing with the PUCT and really starting to kind of work this project in earnest, beginning in 2027 and beyond.

Jason Wells: Yeah, Julien, thanks for the question. You know, this next generation of AMI investments really will start to fold into the plan in 2026, maybe taking a step back for a second, you know, as we release the new $65 billion 10-year CapEx plan we identified, you know, more than $10 billion of upside. I would consider one of these projects as, you know, one of the upside opportunities to that plan. I think coming back to the timing, the most important thing that we can do is run a pilot in 2026 to prove the use case and benefits for our customers. And then I would really look at that once we have that pilot in hand, making a filing with the PUCT and really starting to kind of work this project in earnest, beginning in 2027 and beyond.

Plant should be enhanced further with with the benefit of that legislation. So partially in the plan has the opportunity to be improved as we as we put more capital in.

Excellent. No, nothing to think but what a vital detail here, HB 4384, right? So that's you your peers in the state, your peer Gas Utilities in the state of talking, a good bit about this. Um, I

Got it alright, well, we'll stay tuned there alright ill leave it there. Thank you guys very much have a great day.

I know that you all in the, in the interim of talk up even more guests investments in your plan a few weeks ago,

Thanks Julien.

Thanks, Jason Operator. This concludes our call. Thank you all for joining.

Is the scope of the contribution from that legislation fully included in the plan? To what extent is there anything else that we should be considering here, given your expanded investment in gas in recent weeks?

This concludes Centerpoint Energy's third quarter 2025 earnings conference call. Thank you for your participation.

Yeah, we think that that was a very constructive um piece of legislation to help sort of reduce regulatory lag.

What I would say is the benefit of that legislation is incorporated into the plan that we released with respect to.

um, you know the Investments that we have identified, you know as we continue to look at enhancing the plan

Ben Vallejo: I think there are very real benefits for our customers, as we've talked about in the past. You know, when we experienced Winter Storm Uri, because of the generation of meters we had at the time, we could not use those meters for load shed-related activities. Instead, we had to shed load at the circuit level. You know, this next generation of Smart Meters would allow us to do that at the home, and I think would allow us to be much more targeted and allow for even more rolling of power if an event like Winter Storm Uri was to occur again. So a number of benefits to our customers. We need to prove those out with a pilot in 2026 and then look towards more fulsome deployment beginning in 2027.

I think there are very real benefits for our customers, as we've talked about in the past. You know, when we experienced Winter Storm Uri, because of the generation of meters we had at the time, we could not use those meters for load shed-related activities. Instead, we had to shed load at the circuit level. You know, this next generation of Smart Meters would allow us to do that at the home, and I think would allow us to be much more targeted and allow for even more rolling of power if an event like Winter Storm Uri was to occur again. So a number of benefits to our customers. We need to prove those out with a pilot in 2026 and then look towards more fulsome deployment beginning in 2027.

And we've alluded to the, you know, 10 billion plus outside there is opportunity as we fall as related capital in that. Uh, the, you know,

The plan could be enhanced further with uh, with the benefit of that legislation. So you know, partially in the plan has the opportunity to to be improved as we uh as we fold more capital.

Got it. All right. We'll we'll stay tuned there. All right. I'll leave it there. Thank you guys very much. Have a great day, guys. You too. Thank you.

Thanks Jason.

Operator. This is

Third quarter 2025 earnings conference Hall. Thank you for your participation.

Julien Dumoulin-Smith: Excellent. Thank you for that. Then if I could pivot in a slightly different direction, obviously, kudos on the transaction here. The other item, if I were to think about like what's not in terms of included in the formal guidance on cash flows is mobile gen. I perceive that the economics and price points there continue to improve, as evidenced maybe by some of the folks out there like Fermi talking about this. But how would you characterize today where you are around that and the opportunities that exist, more in the longer term, obviously, as it's less committed in terms of the existing units and your exposure to some of that improved market pricing?

Ben Vallejo: Yeah, there's really two aspects to that, Julien. You know, there's first, we've got what we call medium-sized units, just a little bit larger than five MW apiece, five units, five MW apiece that, you know, currently we have the ability to market and are actively doing that. The market for those units remains very strong and would be a potential, you know, cash flow tailwind to the plan. On a larger basis, we have 15 units that are roughly, kind of call them 30 MW apiece, that are now actively supporting the grid outside of San Antonio until either kind of late 2026, early 2027 at the latest, at which time then we'll be able to remarket those units. As you said, the market remains strong. If anything, it's improving modestly.

Jason Wells: Yeah, there's really two aspects to that, Julien. You know, there's first, we've got what we call medium-sized units, just a little bit larger than five MW apiece, five units, five MW apiece that, you know, currently we have the ability to market and are actively doing that. The market for those units remains very strong and would be a potential, you know, cash flow tailwind to the plan. On a larger basis, we have 15 units that are roughly, kind of call them 30 MW apiece, that are now actively supporting the grid outside of San Antonio until either kind of late 2026, early 2027 at the latest, at which time then we'll be able to remarket those units. As you said, the market remains strong. If anything, it's improving modestly.

Ben Vallejo: That will become a cash flow tailwind when we can release those units from the support of the ERCOT grid in San Antonio and remarket those again, you know, probably likely around spring of 2027. So, you know, we continue to work with brokers, third parties to keep a pulse on the market and think about how we can kind of de-risk and take advantage of this growth. But obviously, more to come here as the quarters unfold and as we get closer to the release of those units.

That will become a cash flow tailwind when we can release those units from the support of the ERCOT grid in San Antonio and remarket those again, you know, probably likely around spring of 2027. So, you know, we continue to work with brokers, third parties to keep a pulse on the market and think about how we can kind of de-risk and take advantage of this growth. But obviously, more to come here as the quarters unfold and as we get closer to the release of those units.

Julien Dumoulin-Smith: Excellent. Sorry, nothing to think, but one final detail here. HB 4384, right? So that's your peers in the state, your peer gas utilities in the state. I've been talking a good bit about this. I know that you all, in the interim, have talked up even more gas investments in your plan a few weeks ago. Is the scope of the contributions in that legislation fully included in the plan? And to what extent is there anything else that we should be considering here, given your expanded investment in gas in recent weeks?

Ben Vallejo: Yeah, we think that that was a very constructive piece of legislation to help sort of reduce regulatory lag. What I would say is the benefit of that legislation is incorporated in the plan that we released with respect to, you know, the investments that we have identified, you know, as we continue to look at enhancing the plan. We've alluded to the, you know, $10 billion plus outside. There is opportunity, as we fold gas-related capital in, that the, you know, plan could be enhanced further with the benefit of that legislation. So, you know, partially in the plan has the opportunity to be improved as we fold more capital in.

Jason Wells: Yeah, we think that that was a very constructive piece of legislation to help sort of reduce regulatory lag. What I would say is the benefit of that legislation is incorporated in the plan that we released with respect to, you know, the investments that we have identified, you know, as we continue to look at enhancing the plan. We've alluded to the, you know, $10 billion plus outside. There is opportunity, as we fold gas-related capital in, that the, you know, plan could be enhanced further with the benefit of that legislation. So, you know, partially in the plan has the opportunity to be improved as we fold more capital in.

Julien Dumoulin-Smith: Got it. All right. We'll stay tuned there. All right. I'll leave it there. Thank you guys very much. Have a great day, guys.

Ben Vallejo: You too. Thanks, Julien. Thanks, Jason. Operator, this concludes our call. Thank you all for joining.

Benjamin Vallejo: You too. Thanks, Julien. Thanks, Jason. Operator, this concludes our call. Thank you all for joining.

Operator: This concludes CenterPoint Energy's Q3 2025 earnings conference call. Thank you for your participation.

Q3 2025 Centerpoint Energy Inc Earnings Call

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