Q1 2026 Talen Energy Corp Earnings Call

May 5, 2026

Operator: I would now like to turn the conference over to Sergio Castro, Vice President and Treasurer. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone.

Speaker #1: You'll then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to turn the conference over to Sergio Castro, Vice President and Treasurer. Please go ahead.

Operator: I would now like to turn the conference over to Sergio Castro, Vice President and Treasurer. Please go ahead.

Speaker #2: Thank you, Kathy. And welcome to Talen Energy's First Quarter 2026 Conference Call. Speaking today, our Chief Executive Officer, Matt McFarland, President Terry Nutt, and Chief Financial Officer, Cole Muller.

Sergio Castro: Thank you, Kathy. Welcome to Talen Energy's First Quarter of 2026 Conference Call. Speaking today are Chief Executive Officer Mac McFarland, President Terry Nutt, and Chief Financial Officer Cole Muller. They are joined by other Talen senior executives to address questions during the second part of today's call as necessary. We issued our earnings release this afternoon, along with a presentation, all of which can be found in the investor relations section on Talen's website, talenenergy.com. Today, we are making some forward-looking statements based on current expectations and assumptions. Actual results could differ due to risk factors and other considerations described in our financial disclosures and other SEC filings. Today's discussion also includes references to certain non-GAAP financial measures. We have provided information reconciling our non-GAAP measures to the most directly comparable GAAP measures in our earnings release and the appendix of our presentation.

Speaker #2: They are joined by other Talen senior executives to address questions during the second part of today's call as necessary. We issued our earnings release this afternoon, along with a presentation, all of which can be found in the Investor Relations section of Talen's website, talenenergy.com.

Speaker #2: Today, we are making some forward-looking statements based on current expectations and assumptions. Actual results could differ due to risk factors and other considerations described in our financial disclosures and other SEC filings.

Speaker #2: Today's discussion also includes references to certain non-GAAP financial measures. We have provided information reconciling our non-GAAP measures to the most directly comparable GAAP measures in our earnings release and the appendix of our presentation.

Speaker #2: With that, I will now turn the call over to Matt.

Sergio Castro: With that, I will now turn the call over to Matt.

Sergio Castro: With that, I will now turn the call over to Mac.

Speaker #3: Great. Thank you, Sergio, and good afternoon, everyone. We appreciate your interest in Talen, and we look forward to the discussion during our Q&A. But I'll start with our first quarter results.

Mac McFarland: Great. Thank you, Sergio, and good afternoon, everyone. We appreciate your interest in Talen, and we look forward to the discussion during our Q&A. I'll start with our Q1 results. In the Q1, we delivered strong operational and financial results, including strong plant performance during the winter cold events, and we are off to a good start to the outage season. In fact, we are in startup at Susquehanna, slightly exceeding our planned outage duration. Terry and Cole will discuss all of this more in more detail later. Also in the Q1, we signed a Cornerstone transaction, advancing our Talen flywheel strategy and adding meaningful free cash flow per share growth through acquisitions. Today, we are reaffirming our 2026 guidance and providing a preliminary view of our 2027 and 2028 outlooks. Our 2026 guidance does not include the Cornerstone assets.

Speaker #3: In the first quarter, we delivered strong operational and financial results, including strong plant performance during the winter cold events, and we are also off to a good start to the outage season.

Speaker #3: In fact, we are in startup at Susquehanna, slightly exceeding our planned outage duration. Terry and Cole will discuss all of this in more detail later.

Speaker #3: Also, in the first quarter, we signed a cornerstone transaction, advancing our Talen flywheel strategy. And adding meaningful free cash flow per share growth through acquisitions.

Speaker #3: Today, we are reaffirming our 2026 guidance and providing a preliminary view of our 2027 and 2028 outlooks. Our 2026 guidance does not include the cornerstone assets.

Speaker #3: However, we expect to close as soon as this summer, and we will update 2026 guidance once we close. We recently closed on the financing for the cornerstone acquisition, which positions us to close as quickly as possible once we receive all regulatory approvals.

Mac McFarland: However, we expect to close as soon as this summer, and we will update 2026 guidance once we close. We recently closed on the financing for the Cornerstone acquisition, which positions us to close as quickly as possible once we receive all regulatory approvals. Cole will explain why we acted now in more detail, but in short, the carry cost of funding now should be more than offset by closing as soon as possible. We have also reduced market volatility risk and replaced some higher cost debt. Our preliminary 2027 and 2028 outlooks do include the Cornerstone assets as well as other updates, including higher current forward mark-to-market values from 31 March of this year, improved financing costs, and several other changes. These outlooks show significant year-over-year growth in free cash flow per share and meaningful upside versus the outlook we shared recently this past January.

Speaker #3: Cole will explain why we acted now in more detail, but in short, the carry cost of funding now should be more than offset by closing as soon as possible.

Speaker #3: We have also reduced market volatility risk and replaced some higher-cost debt. Our preliminary 2027 and 2028 outlooks do include the cornerstone assets, as well as other updates, including higher current forward mark-to-market values from 331 of this year, improved financing costs, and several other changes.

Speaker #3: These outlooks show significant year-over-year growth in free cash flow per share and meaningful upside versus the outlook we shared recently this past January. This demonstrates the strength of our business and our continued ability to return cash to shareholders through meaningful share repurchases.

Mac McFarland: This demonstrates the strength of our business and our continued ability to return cash to shareholders through meaningful share repurchases. These outlooks also imply we are trading at double-digit free cash flow yields, which we do not believe reflect our increasingly contracted portfolio. That does not include the other levers that we have for further upside. Cole will walk you through those later. Looking ahead, nothing has changed in our Talen flywheel strategy. Our direction of travel remains the same. We continue to believe in data center contracting for megawatts, and we are building a pipeline of both powered land and new build options. Terry will walk you through these development activities and how we see the market evolving towards what we call a hybrid model, which uses existing generation for speed to market and is supplemented by new build in later years.

Speaker #3: These outlooks also imply we are trading at double-digit free cash flow yields, which we do not believe reflect our increasingly contracted portfolio. And that does not include the other levers that we have for further upside.

Speaker #3: And Cole will walk you through those later. Looking ahead, nothing has changed in our Talen flywheel strategy. Our direction of travel remains the same.

Speaker #3: We continue to believe in data-centered contracting for megawatts, and we are building a pipeline of both powered land and new-build options. Terry will walk you through these development activities and how we see the market evolving towards what we call a hybrid model, which uses existing generation for speed to market, and is supplemented by new-build in later years.

Speaker #3: Some of you may remember me saying that 2025 was a year of options, and 2026 will be a year of market rationalization, and that we would not discuss development activities.

Mac McFarland: Some of you may remember me saying that 2025 was a year of options and 2026 will be a year of market rationalization, and that we would not discuss development activities. While we're not going into specific project details, we will provide a high-level view of our development portfolio today, we still do expect rationalization across projects in 2026. All that said, we are building a pipeline of real opportunities that can win. With that, I'll turn the call over to Terry.

Speaker #3: While we're not going into specific project details, we will provide a high-level view of our development portfolio today, and we still do expect rationalization across projects in 2026.

Speaker #3: All that said, we are building a pipeline of real opportunities that can win. With that, I'll turn the call over to Terry.

Speaker #2: Thank you, Matt. And good afternoon, everyone. Let's look at our first quarter financial and operating results. For the first three months of 2026, we are reporting $473 million of adjusted EBITDA, and $350 million of adjusted free cash flow.

Terry Nutt: Thank you, Mac, good afternoon, everyone. Let's look at our Q1 financial and operating results. For Q1 2026, we are reporting $473 million of adjusted EBITDA and $350 million of adjusted free cash flow. A comparison of these amounts to the same quarter last year provides clear evidence of the accretion Talen Energy has achieved through acquisitions and fundamental growth in the business. Our fleet achieved strong levels of safety and reliability during the quarter, which is even more noteworthy given the frigid temperatures and icy conditions that were present in late January and early February. We are currently in the middle of our spring outage season across the fleet. Our refueling outage at Susquehanna Unit One has progressed well, including executing work similar to what we had on Unit Two last spring.

Speaker #2: A comparison of these amounts to the same quarter last year provides clear evidence of the accretion Talen has achieved through acquisitions and fundamental growth in the business.

Speaker #2: Our fleet achieved strong levels of safety and reliability during the quarter. Which is even more noteworthy given the frigid temperatures and icy conditions that were present in late January and early February.

Speaker #2: We are currently in the middle of our spring outage season across the fleet. Our refueling outage at Susquehanna Unit 1 has progressed well. Including executing work similar to what we had on Unit 2 last spring.

Speaker #2: The current outage has been more efficient due to the learnings that we had from last year, which has resulted in the unit being synced back to the grid yesterday.

Terry Nutt: The current outage has been more efficient due to the learnings that we had from last year, which has resulted in the unit being synced back to the grid yesterday. I would like to thank the men and women of Talen who continue to demonstrate strong operational and safety performance. Without their efforts, none of this is possible. I'd also like to welcome the employees from Freedom and Guernsey who were onboarded to Talen in April, and congratulate them on their strong safety records since startup. Safety remains our top priority across the fleet, and our team worked safely during a busy quarter. Our recordable incident rate was 0.37, which continues to be below industry average.

Speaker #2: I would like to thank the men and women of Talen who continued to demonstrate strong operational and safety performance. Without their efforts, none of this is possible.

Speaker #2: I'd also like to welcome the employees from Freedom and Guernsey who were onboarded to Talen in April. And congratulate them on their strong safety records since startup.

Speaker #2: Safety remains our top priority across the fleet, and our team works safely during a busy quarter. Our recordable incident rate was 0.37, which continues to be below industry average.

Speaker #2: Our fleet ran well, and we generated approximately 16 terawatt-hours of electricity. Achieving a 55% fleet-wide capacity factor as our intermediate and peaking assets continue the trend of higher runtimes to support the grid.

Terry Nutt: Our fleet ran well. We generated approximately 16 TWh of electricity, achieving a 55% fleet-wide capacity factor as our intermediate and peaking assets continue the trend of higher runtimes to support the grid. Moving to slide 4, we continue to see tightening markets driven by increased demand. In Q1, we saw approximately 3% of incremental deliveries on a weather-adjusted basis in PJM when compared to the same period in 2025. This is a clear sign of demand growth and supports our view that energy demand will increase the dispatch of our flexible fleet. To further illustrate the demand growth trend, on the lower left of this slide, you can see our Q1 generation from 2023 through 2026, which increases every year.

Speaker #2: Moving to slide four, we continue to see tightening markets driven by increased demand. In Q1, we saw approximately 3% of incremental deliveries on a weather-adjusted basis in PJM when compared to the same period in 2025.

Speaker #2: This is a clear sign of demand growth and supports our view that energy demand will increase the dispatch of our flexible fleet. To further illustrate the demand growth trend, on the lower left of this slide, you can see our first quarter generation, from 2023 through 2026.

Speaker #2: Which increases every year. During this time, our intermediate and peaking assets, in particular Montour and Martin's Creek, had significantly higher runtimes than the same quarter in the prior year.

Terry Nutt: During this time, our intermediate and peaking assets, in particular Montour and Martins Creek, had significantly higher runtimes than the same Q in the prior year, continuing the trend that we have seen the past several years. In relation to spark spreads, we have seen a continued appreciation in the forward curves for the remainder of 2026 through 2028, with the growth in spark spreads across PJM inclusive of the zones where our generation is located. PPL zone spark spreads have seen appreciation since July of last year, but not as pronounced as the moves in PJM West Hub. We believe that some of this price action that is resulting in widening term basis between West Hub and PPL zone is based on recency bias due to transmission work impacting the zone and not fundamental factors.

Speaker #2: Continuing the trend that we have seen the past several years. In relation to spark spreads, we have continued we have seen a continued appreciation in the forward curves for the remainder of 2026 through 2028.

Speaker #2: With the growth in spark spreads across PJM, inclusive of the zones where our generation is located. PPL zone spark spreads have seen appreciation since July of last year, but not as pronounced as the moves in PJM West Hub.

Speaker #2: We believe that some of this price action that is resulting in widening term basis between West Hub and PPL zone is based on recency bias, due to transmission work impacting the zone and not fundamental factors.

Speaker #2: Our expectation is that this basis will tighten as the transmission network and load evolve. Turning to slide five, as you can see from the graph on the left, summer spark spreads continue to move higher, driven by fundamentally tight market conditions in PJM.

Terry Nutt: Our expectation is that this basis will tighten as the transmission network and load evolve. Turning to slide 5. As you can see from the graph on the left, summer spark spreads continue to move higher, driven by fundamentally tight market conditions in PJM. This is even more evident as we have seen increased instances of demand-driven volatility, widening cash market spark spreads, which in turn is helping to drive the term sparks higher. This is beginning to validate our earlier views that the market response would come as fundamental drivers are seen in the cash market. As I mentioned earlier, demand continues to increase with no meaningful increase in supply. This demonstrates the value of steel in the ground. Turning to slide 6.

Speaker #2: This is even more evident as we have seen increased instances of demand-driven volatility widening cash market spark spreads, which in turn is helping to drive the term sparks higher.

Speaker #2: This is beginning to validate our earlier views that the market response would come as fundamental drivers are seen in the cash market. As I mentioned earlier, demand continues to increase with no meaningful increase in supply.

Speaker #2: This demonstrates the value of still on the ground. Turning to slide six, we are working diligently to close the cornerstone acquisition that we announced earlier this year.

Terry Nutt: We are working diligently to close the Cornerstone acquisition that we announced earlier this year, which will further diversify Talen's generation portfolio and enhance our large load contracting opportunities. As an update on the regulatory approvals, we filed our 203 application with FERC in January and anticipate approval by this summer. The HSR waiting period expired in March, meaning that we have completed the DOJ approval process. Lastly, there was a hearing with the Indiana Utility Regulatory Commission in April, and the unopposed final order was submitted. We anticipate approval in Indiana by this summer. Moving to slide 7. I'd like to give you some color on the land development and contracting growth options Mac McFarland mentioned earlier.

Speaker #2: This will further diversify Talen's generation portfolio and enhance our large-load contracting opportunities. As an update on the regulatory approvals, we filed our 203 application with FERC in January and anticipate approval by this summer.

Speaker #2: The HSR waiting period expired in March, meaning that we have completed the DOJ approval process. And lastly, there was a hearing with the Indiana Utility Regulatory Commission in April, and the unopposed final order was submitted.

Speaker #2: We anticipate approval in Indiana by this summer. Moving to slide seven, I'd like to give you some color on the land development and contracting growth options Matt mentioned earlier.

Speaker #2: In the near term, we have several one-plus gigawatt opportunities for long-term PPAs at our existing sites as well as other sites in Pennsylvania. And our advancing potential opportunities across the remainder of our footprint.

Terry Nutt: In the near term, we have several 1-plus gigawatt opportunities for long-term PPAs at our existing sites, as well as other sites in Pennsylvania, and are advancing potential opportunities across the remainder of our footprint. In relation to specific site development opportunities for land that we are currently working on, we're progressing on several different fronts. Those opportunities include land of up to 3,000 acres in total that can support 3 to 4 gigawatts of data center capacity using current compute density. The zoning of the property ranges from fully zoned acreage to zoning activity that is still in process, such as our Montour site. Additionally, we have the ability at several of these sites to install new generation of 500 megawatts to 1 gigawatt.

Terry Nutt: In the near term, we have several 1+ GW opportunities for long-term PPAs at our existing sites, as well as other sites in Pennsylvania, and are advancing potential opportunities across the remainder of our footprint. In relation to specific site development opportunities for land that we are currently working on, we're progressing on several different fronts. Those opportunities include land of up to 3,000 acres in total that can support 3 to 4 GW of data center capacity using current compute density. The zoning of the property ranges from fully zoned acreage to zoning activity that is still in process, such as our Montour site. Additionally, we have the ability at several of these sites to install new generation of 500 MW to 1 GW.

Speaker #2: In relation to specific site development opportunities for land that we are currently working on, we're progressing on several different fronts. Those opportunities include land of up to 3,000 acres in total, that can support three to four gigawatts of data center capacity using current compute density.

Speaker #2: The zoning of the property ranges from fully zoned acreage to zoning activity that is still in process, such as our Montour site. Additionally, we have the ability at several of these sites to install new generation of 500 megawatts to 1 gigawatt.

Speaker #2: As part of our strategy, we are advancing a mix of gas and storage generation projects totaling over two gigawatts at our sites to support data center contracting and reliability needs.

Terry Nutt: As part of our strategy, we are advancing a mix of gas and storage generation projects totaling over 2 GW at our sites to support data center contracting and reliability needs. Last week, we submitted several new projects into PJM's Cycle One Interconnection Study Cluster. These projects are a mix of generation solutions, including CTs, batteries, and CCGTs. These new generation sources, in combination with our existing assets, provide us the ability to offer a solution to customers that is a hybrid approach of receiving power from existing generation now and new generation down the road. As we have stated before and will reiterate today, development of new generation will need to be done either through long-term off-take agreements or through the PJM RBP, with a focus on financial discipline related to investment returns. This initial generation development is capital-light with no material capital required during the initial stages.

Speaker #2: Last week, we submitted several new projects into PJM's cycle one interconnection study cluster. These projects are a mix of generation solutions, including CTs, batteries, and CCGTs.

Speaker #2: These new generation sources in combination with our existing assets provide us the ability to offer a solution to customers that is a hybrid approach, of receiving power from existing generation now and new generation down the road.

Speaker #2: As we have stated before and will reiterate today, development of new generation will need to be done either through long-term offtake agreements or through the PJM RBP.

Speaker #2: With the focus on financial discipline related to investment returns, this initial generation development is capitalized with no material capital required during the initial stages.

Speaker #2: As development advances, spending will be tied to customer contracts and underwriting, and we will likely utilize project financing structures related to these projects. With that, let me turn it over to Cole to cover our financial results.

Terry Nutt: As development advances, spending will be tied to customer contracts and underwriting, and we will likely utilize project financing structures related to these projects. With that, let me turn it over to Cole to cover our financial results.

Speaker #1: Thanks, Terry. Good afternoon, everyone. On slide eight, looking at our financial results for the first quarter, we reported $473 million of adjusted EBITDA and $350 million of adjusted free cash flow.

Cole Muller: Thanks, Terry Nutt, and good afternoon, everyone. On slide eight, looking at our financial results for Q1, we reported $473 million of adjusted EBITDA and $350 million of adjusted free cash flow. Adjusted EBITDA more than doubled and adjusted free cash flow quadrupled year over year, showing the impact of the Freedom and Guernsey acquisitions that we closed in Q4 last year. These results were also driven by higher prices and spark spreads, higher capacity and ROR revenues that started in June 2025, and the ongoing AWS PPA ramp. Our adjusted free cash flow also benefited from reduced cash tax payments, largely related to the impacts from our Freedom and Guernsey acquisitions. Moving to slide nine, we are reaffirming the previously announced 2026 guidance ranges.

Cole Muller: Thanks, Terry Nutt, and good afternoon, everyone. On slide eight, looking at our financial results for Q1, we reported $473 million of Adjusted EBITDA and $350 million of adjusted free cash flow. Adjusted EBITDA more than doubled and adjusted free cash flow quadrupled year-over-year, showing the impact of the Freedom and Guernsey acquisitions that we closed in Q4 last year. These results were also driven by higher prices and spark spreads, higher capacity and ROR revenues that started in June 2025, and the ongoing AWS PPA ramp. Our adjusted free cash flow also benefited from reduced cash tax payments, largely related to the impacts from our Freedom and Guernsey acquisitions. Moving to slide nine, we are reaffirming the previously announced 2026 guidance ranges.

Speaker #1: Adjusted EBITDA more than doubled, and adjusted free cash flow quadrupled year over year, showing the impact of the Freedom and Guernsey acquisitions that we closed in Q4 last year.

Speaker #1: These results were also driven by higher prices in spark spreads, higher capacity in RMR revenues that started in June 2025, and the ongoing AWS PPA ramp.

Speaker #1: Our adjusted free cash flow also benefited from reduced cash tax payments largely related to the impacts from our freedom and Guernsey acquisitions. Moving to slide nine, we are reaffirming the previously announced 2026 guidance ranges.

Speaker #1: We had a strong first quarter, but it is not our practice to make adjustments this early in the year. Our adjusted EBITDA range is $1.75 to $2.05 billion, and our adjusted free cash flow range is $980 million to $1.18 billion.

Cole Muller: We had a strong Q1, though it's not our practice to make adjustments this early in the year. Our adjusted EBITDA range is $1.75 to 2.05 billion, and our adjusted free cash flow range is $980 million to 1.18 billion. These ranges do not include any contribution from the pending Cornerstone acquisition, and we expect to provide an update to 2026 guidance after closing the transaction. We remain committed to maintaining sufficient liquidity and keeping our long-term net leverage ratio below our stated target of 3.5 times. As of 31 March, our forecasted 2026 net leverage ratio was 3.1 times. I will note this excludes any impacts from the Cornerstone acquisition and the associated debt that we raised back in April.

Cole Muller: We had a strong Q1, though it's not our practice to make adjustments this early in the year. Our Adjusted EBITDA range is $1.75 to 2.05 billion, and our adjusted free cash flow range is $980 million to 1.18 billion. These ranges do not include any contribution from the pending Cornerstone acquisition, and we expect to provide an update to 2026 guidance after closing the transaction. We remain committed to maintaining sufficient liquidity and keeping our long-term net leverage ratio below our stated target of 3.5x. As of 31 March, our forecasted 2026 net leverage ratio was 3.1x. I will note this excludes any impacts from the Cornerstone acquisition and the associated debt that we raised back in April.

Speaker #1: These ranges do not include any contribution from the pending cornerstone acquisition, and we expect to provide an update to 2026 guidance after closing the transaction.

Speaker #1: We remain committed to maintaining sufficient liquidity and keeping our long-term net leverage ratio below our stated target of 3.5 times. As of March 31, our forecasted 2026 net leverage ratio was 3.1 times.

Speaker #1: I will note this excludes any impacts from the cornerstone acquisition and the associated debt that we raised back in April. Upon closing the cornerstone transaction, we expect to maintain the ability to achieve below three and a half times net leverage by year-end 2026.

Cole Muller: Upon closing the Cornerstone transaction, we expect to maintain the ability to achieve below 3.5x net leverage by year-end 2026. On to slide 11. We recently secured attractive acquisition financing for the Cornerstone assets, which also provided us an opportunity to optimize the balance sheet. We raised $4 billion of senior unsecured notes in a private placement across 5 and 7-year tranches at a blended rate just above 6.25%, de-risking the Cornerstone acquisition financing at attractive pricing and allowing us to be ready to close upon regulatory approvals. We also took out our $1.2 billion senior secured notes that had an 8.625% coupon, delivering more than $40 million per year in interest expense reduction, which adds nearly $1 to our free cash flow per share.

Speaker #1: On to slide 11. We recently secured an attractive acquisition financing for the cornerstone assets, which also provided us an opportunity to optimize the balance sheet.

Speaker #1: We raised $4 billion of senior unsecured notes in a private placement across five and seven-year tranches at a blended rate just above six and a quarter percent, de-risking the cornerstone acquisition financing at attractive pricing and allowing us to be ready to close upon regulatory approvals.

Speaker #1: We also took out our $1.2 billion senior secured notes that had an eight and five-eighths percent coupon delivering more than $40 million per year in interest expense reduction, which adds nearly $1 to our free cash flow per share.

Speaker #1: I'll spend a moment to give more color on why we made the decision to raise the financing ahead of regulatory approvals. First, doing this now, we avoided potential risks to market availability, such as impacts from geopolitical events and upcoming midterm elections, as well as lock-in attractive long-term rates in the process.

Cole Muller: I'll spend a moment to give more color on why we made the decision to raise the financing ahead of regulatory approvals. First, doing this now, we avoided potential risks to market availability, such as impacts from geopolitical events and upcoming midterm elections, as well as lock in attractive long-term rates in the process. We also removed any complications if we needed to raise funds while potentially in possession of MNPI in future months. Second, having the financing already in place ahead of regulatory approvals speeds up time to close, meaning we can own the asset sooner and benefit more from the peak summer period. We estimate the value of one additional month at approximately $30 million in additional cash flow, which far outweighs the net negative carry of only a few million dollars a month.

Speaker #1: We also removed any complications if we needed to raise funds while potentially in possession of MMPI in future months. And second, having the financing already in place ahead of regulatory approvals speeds up time to close, meaning we can own the assets sooner and benefit more from the peak summer period.

Speaker #1: We estimate the value of one additional month at approximately $30 million in additional cash flow which far outweighs the net negative carry of only a few million dollars a month.

Speaker #1: Note that a portion of the proceeds allowed us to take out the more expensive senior secured notes last week and immediately realize interest savings.

Cole Muller: Note that a portion of the proceeds allowed us to take out the more expensive senior secured notes last week and immediately realize interest savings. Considering where things stand with the regulatory approval processes, we feel that this was the right time to lock down the financing. In eliminating the senior secured notes, we have materially reduced our secured debt composition from approximately 60% of total debt down to 30%, leading to improved credit ratings across multiple agencies. Concurrent with this financing, we are enhancing our liquidity through commitments to upsize our existing revolving credit facility to $1.35 billion and our standalone letter of credit facility to $1.5 billion. We are also extending the LCF maturity through December 2029. These credit facility changes go into effect upon closing the Cornerstone transaction.

Speaker #1: Considering where things stand with the regulatory approval processes, we feel that this was the right time to lock down the financing. In eliminating the senior secured notes, we have materially reduced our secured debt composition from approximately 60% of total debt down to 30%, leading to improved credit ratings across multiple agencies.

Speaker #1: Concurrent with this financing, we are enhancing our liquidity through commitments to upsize our existing revolving credit facility to 1.35 billion dollars and our standalone letter of credit facility to 1.5 billion dollars.

Speaker #1: We are also extending the LCF maturity through December 2029. These credit facility changes go into effect upon closing the cornerstone transaction. On slide 12, we show a preliminary update to our 2027 and '28 outlook that includes the cornerstone assets, along with impacts across the business since last September's investor day, including spark spread expansion through March 31st and impacts from the recent financing that I walked through a moment ago.

Cole Muller: On slide 12, we show a preliminary update to our 2027 and 2028 outlook that includes the Cornerstone assets along with impacts across the business since last September's Investor Day, including spark spread expansion through 31 March and impacts from the recent financing that I walked through a moment ago. We also separately include the expected impacts of executing on our share repurchase program, assuming we utilize 70% of available free cash flow. In our base case, we hold share count flat, projecting free cash flow at approximately $34 per share in 2027 and approximately $36 per share in 2028, a 15% improvement from our January estimates, which included the Cornerstone acquisition. When factoring in our share repurchase program, we project approximately $41 per share in 2028, a 30% increase to what we showed back in January.

Speaker #1: We also separately include the expected impacts of executing on our share repurchase program, assuming we utilize 70% of available free cash flow. In our base case, we hold share count flat, projecting free cash flow at approximately $34 per share in 2027 and approximately $36 per share in 2028, a 15% improvement from our January estimates which included the cornerstone acquisition.

Speaker #1: When factoring in our share repurchase program, we project approximately $41 per share in 2028, a 30% increase to what we showed back in January.

Speaker #1: At these projected levels, our free cash flow yield is about 11%. Note that this assumes we use 70% of free cash flow, leaving approximately $1 billion of additional cash available across 2027 and '28 as more upside for shareholders.

Cole Muller: At these projected levels, our free cash flow yield is about 11%. Note that this assumes we use 70% of free cash flow, leaving approximately $1 billion of additional cash available across 2027 and 2028 as more upside for shareholders. In addition, we continue to see upside through the flywheel with accretive M&A, which we demonstrated with the Freedom and Guernsey and now Cornerstone acquisitions, and also through acceleration of the Amazon ramp established in our existing PPA, new data center contracting opportunities, and further spark spread expansion as markets continue to tighten. In fact, as you can see in our appendix, we have already seen significant improvements in spark spreads since the 3/31 pricing date of approximately $5 a megawatt hour beyond what is shown in these numbers, which translates to several more dollars per share if marked today.

Cole Muller: At these projected levels, our free cash flow yield is about 11%. Note that this assumes we use 70% of free cash flow, leaving approximately $1 billion of additional cash available across 2027 and 2028 as more upside for shareholders. In addition, we continue to see upside through the flywheel with accretive M&A, which we demonstrated with the Freedom and Guernsey and now Cornerstone acquisitions, and also through acceleration of the Amazon ramp established in our existing PPA, new data center contracting opportunities, and further spark spread expansion as markets continue to tighten. In fact, as you can see in our appendix, we have already seen significant improvements in spark spreads since the 3/31 pricing date of approximately $5 a MWh beyond what is shown in these numbers, which translates to several more dollars per share if marked today.

Speaker #1: In addition, we continue to see upside through the flywheel with accretive M&A, which we demonstrated with the freedom and Guernsey and now cornerstone acquisitions, and also through acceleration of the Amazon ramp established in our existing PPA, new data center contracting opportunities, and further spark spread expansion as markets continue to tighten.

Speaker #1: In fact, as you can see in our appendix, we have already seen significant improvements in spark spreads since the 331 pricing date of approximately $5 a megawatt-hour beyond what is shown in these numbers, which translates to several more dollars per share if marked today.

Speaker #1: We also expect the recent widening of the West Hub to PPL zonal basis to revert to more recent average levels. Note that in our outlook here, we include the most visible mark that reflects this elevated zonal basis.

Cole Muller: We also expect the recent widening of the West Hub to PPL zonal basis to revert to more recent average levels. Note in our outlook here, we include the most visible mark that reflects this elevated zonal basis. As Terry mentioned earlier, we don't see this recent shift being fundamentally driven. A $5 a MWh impact across 30+ TWh in PPL zone presents a compelling upside opportunity, particularly as load growth occurs within the zone. Each of these opportunities could provide 10%+ in additional free cash flow per share growth beyond what's shown here, offering a compelling set of further growth opportunities.

Speaker #1: That was Terry mentioned earlier, we don't see this recent shift being fundamentally driven. A $5-per-megawatt-hour impact across 30-plus terawatt-hours in the PPL zone presents a compelling upside opportunity, particularly as low growth occurs within the zone.

Speaker #1: Each of these opportunities could provide 10-plus percent in additional free cash flow per share growth beyond what's shown here, offering a compelling set of further growth opportunities.

Speaker #1: I should note that there may also be additional upside in 2026 that is not reflected here based on closing the cornerstone acquisition this summer and/or executing on our share repurchase program throughout the remainder of the year.

Cole Muller: I should note that there may also be additional upside in 2026 that is not reflected here based on closing the Cornerstone acquisition this summer and/or executing on our share repurchase program throughout the remainder of the year. I want to emphasize that we will continue to maintain capital discipline with a clear focus on accretive levers that meaningfully increase free cash flow per share available to investors through the Talen flywheel. Turning to slide 13, we show the overall contracted profile of our business when our existing nearly 2GW PPA reaches full ramp, inclusive of the megawatts and cash flows from the Cornerstone assets. With 35% of our gross margin contracted in the long term, contracted cash flows with a double A credit counterparty will be our largest revenue stream, de-risking long-term exposure to PJM capacity and energy markets.

Cole Muller: I should note that there may also be additional upside in 2026 that is not reflected here based on closing the Cornerstone acquisition this summer and/or executing on our share repurchase program throughout the remainder of the year. I want to emphasize that we will continue to maintain capital discipline with a clear focus on accretive levers that meaningfully increase free cash flow per share available to investors through the Talen flywheel. Turning to slide 13, we show the overall contracted profile of our business when our existing nearly 2 GW PPA reaches full ramp, inclusive of the megawatts and cash flows from the Cornerstone assets. With 35% of our gross margin contracted in the long term, contracted cash flows with a double A credit counterparty will be our largest revenue stream, de-risking long-term exposure to PJM capacity and energy markets.

Speaker #1: I want to emphasize that we will continue to maintain capital discipline, with a clear focus on accretive levers that meaningfully increase free cash flow per share available to investors through the Talon flywheel.

Speaker #1: Turning to slide 13, we show the overall contracted profile of our business when our existing nearly two gigawatt PPA reaches full ramp, inclusive of the megawatts in cash flows from the cornerstone assets.

Speaker #1: With 35% of our gross margin contracted in the long term, contracted cash flows with a double-A credit counterparty will be our largest revenue stream, de-risking long-term exposure to PJM capacity and energy markets.

Speaker #1: In addition, for every incremental one gigawatt PPA that we secure, our long-term contracted gross margin increases by 15%. Meaning that our next one gigawatt PPA may increase our long-term contracted gross margin to 50%.

Cole Muller: In addition, for every incremental 1 GW PPA that we secure, our long-term contracted gross margin increases by 15%, meaning that our next 1 GW PPA may increase our long-term contracted gross margin to 50%. We believe this is a differentiated position with growing cash flows that are becoming more durable. I'll now turn it back to Mac.

Speaker #1: We believe this is a differentiated position with growing cash flows that are becoming more durable. I'll now turn it back to Mack.

Speaker #2: All right. Thanks for joining us at our prepared remarks. I'll now turn it back to the operator and open the line for questions.

Mac McFarland: All right. Thanks for joining us. That's our prepared remarks. I'll now turn it back to the operator and open the line for questions.

Speaker #3: Thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question and one follow-up. Please stand by while we compile our Q&A roster. Your first question comes on the line of Shar Pourreza with Wells Fargo. Your line is now open.

Speaker #3: To withdraw your question, please press star 11 again. Please limit yourself to one question and one follow-up. Please stand by while we compile our Q&A roster.

Speaker #3: Your first question comes from Shar Pereza with Wells Fargo. Your line is now open.

Speaker #4: Hi. Good afternoon, team. It's actually Constantine here for Shar. Congrats on a great quarter and the development updates.

[Analyst] (Wells Fargo): Hi, good afternoon, team. It's actually Constantine here for Shar. Congrats on a great quarter and the development updates.

Speaker #2: Thanks, Constantine. Constantine.

Cole Muller: Thanks for hosting, Constantine.

[Analyst] (Wells Fargo): Maybe just starting off on the PJM backdrop with the site development for data centers, is there a tentative framework on things like new capacity versus existing capacity matching, like a 1-to-1 ratio? How flexible would you anticipate that to be going forward, especially as the reserve auction is trying to kind of max all this capacity issue?

Speaker #4: Maybe just starting off on the PJM backdrop with the site development for data centers. Is there a tentative framework on things like new capacity versus existing capacity matching, like a one-to-one ratio?

Speaker #4: Or how flexible would you anticipate that to be going forward, especially as the reserve auction is trying to kind of back-solve this capacity issue?

Speaker #2: Yeah. Thanks, Constantine. This is Cole. Look, I mean, as we have talked about previously, and we continue to believe there's opportunity here to contract off of our existing generation.

Cole Muller: Yeah. Thanks, Constantine. This is Cole. Look, I mean, as we have talked about previously, and we continue to believe there's opportunity here to contract off of our existing generation. Obviously, new generation is an important component, and how to incentivize, you know, a lot of, you know, is a topic for a lot of discussion right now. As Terry mentioned in the remarks, we do see bringing new generation on the back of a PPA with existing generation that this hybrid model that we've been talking about and working on, will help incentivize both contracting near term as load grows over the next 3 to 5 years, but also bring new generation in the 2030 and beyond timeframe.

Speaker #2: Obviously, new generation is an important component in how to incentivize a lot of it's a topic for a lot of discussion right now. And as Terry mentioned in the remarks, we do see bringing new generation on the back of a PPA with existing generation that this hybrid model that we've been talking about and working on will help incentivize both the contracting near-term as load grows over the next three to five years, but also bring new generation in the 2030 and beyond timeframe certainly not in a one-for-one manner.

Cole Muller: Certainly not in a one-for-one manner, but we do think a percentage, as you've seen some other deals over the last number of months, a percentage of new build, be part of the solution.

Speaker #2: But we do think a percentage, as you've seen in some other deals over the last number of months, a percentage of new build will be part of the solution.

Speaker #5: Hey, Constantine. It's Mack. Just a follow-up on what Cole said. I think when you look at things, we have a reserve problem issue that's been identified in terms of a resource adequacy problem.

Mac McFarland: Hey, Constantine. It's Mac. Just to follow up on what Cole said. I think when you look at things, we have a reserve problem issue that's been identified in terms of a resource adequacy problem. As we've said, Cole, Terry, and I, and the rest of the team here for a number of years now, is that that's really a 50-hour problem. We're looking at opportunities to solve that. As Cole said, it doesn't necessarily need to be a one-to-one for the base load generation because there's plenty of hours where there's tons of energy available. What solves those 50 hours?

Speaker #5: And as we've said, Cole, Terry, and I and the rest of the team here for a number of years now, is that that's really a 50-hour problem.

Speaker #5: And so we're looking at opportunities to solve that. And as Cole said, it doesn't necessarily need to be a one-to-one for the base load generation because there's plenty of hours where there's tons of energy available.

Speaker #5: So what solves those 50 hours? And that's why, and we can get into this and Terry mentioned it, we have a mix of both batteries, which is the next quickest to market, CTs, most cost-effective thereafter, and CCGTs for the long run.

Mac McFarland: That's why, you know, we can get into this, and Terry mentioned it, like we have a mix of both batteries, which is the next quickest to market, CTs, most cost effective thereafter, and CCGTs for the long run. We're looking at it all in the construct, but I don't think it starts, as Cole said, on a 1-to-1 to where if you had a 1,000 megawatt PPA, you'd necessarily need a 1,000 megawatts of additionality to solve the problem, because you can do that with a number of things to increase the reserve margin for that load.

Mac McFarland: That's why, you know, we can get into this, and Terry mentioned it, like we have a mix of both batteries, which is the next quickest to market, CTs, most cost effective thereafter, and CCGTs for the long run. We're looking at it all in the construct, but I don't think it starts, as Cole said, on a 1-to-1 to where if you had a 1,000 MW PPA, you'd necessarily need a 1,000 MW of additionality to solve the problem, because you can do that with a number of things to increase the reserve margin for that load.

Speaker #5: So we're looking at it all in the construct, but I don't think it starts as Cole said on a one-to-one to where if you had 1,000 megawatt PPA, you'd necessarily need 1,000 megawatts of additionality to solve the problem because you can do that with a number of things to increase the reserve margin for that load.

Speaker #4: Okay. So just maybe to ask a little bit differently, it does not have to be a CCGT-based solution for kind of some of the site development that you're looking for, right?

[Analyst] (Wells Fargo): Okay. Just maybe to ask a little bit differently, it does not have to be a CCGT-based solution for kind of some of the site development that you're looking for, right?

Mac McFarland: No. I mean, just to go and jump in here, guys. We actually think that, you know, if you look at what is likely to happen in the RBP, you're going to see upgrades, you're going to see CTs converted to CCGTs, which is effectively an upgrade of an existing machine. I think you're going to see batteries and peakers be the least cost solution. As you know, in our coalition, broad-based coalition that we put forth for the RBP and have been supporting the RBP, it is a pay as bid in order to drive home the fact of the affordability issue that's out there. We think that that's the least cost way to do that.

Speaker #5: No. I mean, just to go and jump in here, guys. But we actually think that if you look at what is likely to happen in the RBP, you're going to see up rates.

Speaker #5: You're going to see CTs converted to CCGTs, which is effectively an uprate of an existing machine. I think you're going to see batteries and peakers be the least-cost solution.

Speaker #5: And as you know, in our coalition, broad-based coalition that we put forth for the RBP and event support of the RBP, it is a pay-as-bid in order to drive home the fact of the affordability issue that's out there.

Speaker #5: So, we think that that's the least-cost way to do that. And CCGTs happen to be at the steeper end of that curve and up on the cost curve.

Mac McFarland: CCGTs happen to be at the steeper end of that curve and up on the cost curve, and we think that there's more effective ways of solving the reserve margin.

Speaker #5: And we think that there's more effective ways of solving the reserve margin.

Speaker #2: Yeah. And Constantine, to add to Mack's comments, when you take a look at our existing fleet-wide capacity factor, outside of those 50 hours a year where you have real constraint and real capacity needs, you can see that there's excess generation on the grid that can support more megawatts outside of those peak periods, right?

Cole Muller: Yeah. Constantine, to add to Mac's comments, when you take a look at our existing fleet-wide capacity factor, outside of the 50 hours a year where you have, you know, real constraint and real capacity needs, you can see that there's excess generation on the grid that can support more megawatts outside of those peak periods, right? You know, if you go back to the slide that we presented and you know, you see this slow, steady creep up in demand, there's still excess capacity. We think that's a reason why you don't need to have this 1-for-1 type, you know, construct in the grand scheme of things. We're really solving for the peak hours of the day in very tight periods of time, which as Mac said, it's a capacity issue, not an overall energy issue.

Cole Muller: Yeah. Constantine, to add to Mac's comments, when you take a look at our existing fleet-wide capacity factor, outside of the 50 hours a year where you have, you know, real constraint and real capacity needs, you can see that there's excess generation on the grid that can support more megawatts outside of those peak periods, right? If you go back to the slide that we presented and you know, you see this slow, steady creep up in demand, there's still excess capacity. We think that's a reason why you don't need to have this 1-for-1 type, you know, construct in the grand scheme of things. We're really solving for the peak hours of the day in very tight periods of time, which as Mac said, it's a capacity issue, not an overall energy issue.

Speaker #2: And so if you go back to the slide that we presented and you see this slow, steady creep-up in demand, there's still excess capacity.

Speaker #2: So we think that's a reason why you don't need to have this one-for-one type construct at the grand scheme of things. We're really solving for the peak hours of the day in very tight periods of time, which, as Mack said.

Speaker #2: It's a capacity issue, not an overall energy issue.

Speaker #4: Excellent. And maybe just quickly, following up on kind of a regulatory issue here, with the PJM co-location rules kind of progressing at FERC, how comfortable are your customers in terms of progressing with some of the data center development and the site development while rules are still being finalized?

[Analyst] (Wells Fargo): Excellent. Maybe just quickly following up on kind of the regulatory issue here. With the PJM co-location rules kind of progressing at FERC, how comfortable are your customers in terms of progressing with some of the data center development and the site development while rules are still being finalized? Is there any thresholds kind of to look out for that maybe you're looking out for?

Speaker #4: Is there any thresholds kind of to look out for that maybe you're looking out for?

Speaker #2: Yeah. Look, I wouldn't say there's any thresholds. I mean, obviously, there's a lot of dialogue of where things are going. You mentioned the co-location docket.

Cole Muller: Look, I wouldn't say there's any thresholds. I mean, obviously there's a lot of dialogue of where things are going. You mentioned the co-location docket. There's, you know, obviously the RBP. There's some other kind of related things that are out there that PJM and others are talking through. Certainly no threshold. We still see, you know, significant interest in connecting to the grid and taking power as soon as possible, and that's gonna be done off of existing generation. We think that, you know, hyperscalers and others will, you know, certainly understand that they need to incentivize and bring new generation in 5+ years. We don't see any threshold that they're working towards.

Speaker #2: There's obviously the RBP. There's some other kind of related things that are out there that PJM and others are talking through. So certainly no threshold.

Speaker #2: We still see significant interest in connecting to the grid and taking power as soon as possible. And that's going to be done off of existing generation.

Speaker #2: And we think that hyperscalers and others will certainly understand that they need to incentivize and bring new generation in five-plus years. But we don't see any threshold that they're working towards.

Speaker #5: Yeah. And Constantine, maybe to add just one more a little bit more color to Cole's comments. The existing development and construction that we see at data center sites all across PA and obviously using the site near our Susquehanna facility is a great example.

Terry Nutt: Constantine, maybe to add just one more, a little bit more color to Cole's comments. You know, the existing development and construction that we see at data center sites all across PA, and obviously using the site near our Susquehanna facility is a great example. You know, that activity is continuing at a steady pace. They're moving forward, getting, you know, data halls filled, getting things electrified. We don't see a slowdown in that at all. Obviously the hyperscalers had their earnings call, various earnings calls last week. You see the continued trend from all of them, with respect to what they're doing, whether it be in their hosting business or in other parts of their business. The revenue streams are there. They're moving forward fast.

Speaker #5: That activity is continued at a steady pace. They're moving forward, getting data halls filled, getting things electrified. So we don't see a slowdown in that at all.

Speaker #5: Obviously, the hyperscalers have their earnings call, various earnings calls last week. And you see the continued trend from all of them. With respect to what they're doing, whether it be in their hosting business or in other parts of their business, the revenue streams are there.

Speaker #5: They're moving forward fast. And the capital is still hitting the ground in tangible infrastructure.

Terry Nutt: The capital still is hitting the ground in tangible infrastructure.

Speaker #4: Excellent. Sounds good. Thank you. Thanks for taking the time.

[Analyst] (Wells Fargo): Excellent. Sounds good. Thank you for taking the time.

Speaker #2: Thanks, Constantine.

Cole Muller: Thanks, Constantine.

Speaker #5: Thank you.

Speaker #6: Thank you. Your next question comes from the line of Renee Singh with Bank of America. Your line is.

Operator: Thank you. Your next question comes from the line of Rene Singh with Bank of America. Your line is now open.

Speaker #7: Hi, guys. I just had a question first on the power prices. I know you said that PPL is trading a little bit different than PJM West just because of the recency buys.

Rene Singh: Hi, guys. I just had a question first on, you know, the power prices. I know you said that PPL is trading a little bit different than PJM West just because the recency bias. When do you think, you know, we might see a correction in that, and is there, like, a specific catalyst to watch for?

Rinny Singh: Hi, guys. I just had a question first on, you know, the power prices. I know you said that PPL is trading a little bit different than PJM West just because the recency bias. When do you think, you know, we might see a correction in that, and is there, like, a specific catalyst to watch for?

Speaker #7: When do you think we might see a correction in that? And is there a specific catalyst to watch for?

Speaker #2: Yeah. Renee, let me start on this one, and then I'll hand it over to Chris, who's with us here today. There's been a lot of transmission work in and around PPL Zone and other parts of PJM that's been worked on over the last several months.

Terry Nutt: Yeah, Rene, let me start on this one, and then I'll hand it over to Chris, who's with us here today. There's been a lot of transmission work in and around PPL Zone and other parts of PJM that's been worked on over the last several months. There is a lot of sort of temporal short-term congestion that we're seeing across the board. I think our biggest view, and we mentioned this in the prepared remarks, is as load evolves and load pops up in PPL Zone and these other load pockets that you're seeing form, we think that that obviously would trend and come back in line. Chris, you want to add anything?

Speaker #2: And so, there is a lot of sort of temporal, short-term congestion that we're seeing across the board. I think our biggest view—and we mentioned this in the prepared remarks—is as load evolves and load pops up in PPL Zone and these other load pockets that you're starting to see form, we think that that obviously would trend and come back in line.

Speaker #2: Chris, do you want to add anything?

Chris Morice: Yeah. You know, given the auction process itself had some illiquidity and timing issues, reflective in those marks is those auction clears and those disconnect from the projections that we're making. Near-term acuteness and basis as a result of this ongoing transmission work is bleeding into that term price. Picking a time in which that reverts or comes back to something more normal will, again, happen through time as that load appears, but not as a binary instantaneous moment in time.

Chris Morice: Yeah. Given the auction process itself had some illiquidity and timing issues, reflective in those marks is those auction clears and those disconnect from the projections that we're making. Near-term acuteness and basis as a result of this ongoing transmission work is bleeding into that term price. Picking a time in which that reverts or comes back to something more normal will, again, happen through time as that load appears, but not as a binary instantaneous moment in time.

Speaker #5: Yeah. Given the sort of the auction process itself has some illiquidity and timing issues and so reflective in those marks is those auction clears.

Speaker #5: And those disconnect from sort of the projections that we're making. And so near-term acuteness in basis as a result of this ongoing transmission work is bleeding into that term price.

Speaker #5: And so, picking a time in which that reverts or comes back to something more normal will, again, happen through time as that load appears.

Speaker #5: But not as a binary, instantaneous moment in time.

Speaker #2: Yeah. And Renee, look, I mean, as I said in the prepared remarks, we use the most visible marks out there and so we use the PPL Zone mark.

Cole Muller: Yeah. Rene, look, I mean, as I said in the prepared remarks, we use the most visible marks out there. We use the PPL Zone mark. You can look in the appendix. We have a slide that shows the basis, West Hub PPL basis over time. For multiple years, it was trading very, very narrowly in a range, and that's broken out over the last couple of months as, you know, Terry and Chris have noted that there's, you know, reasons why. You know, from a just a mark perspective, we stay true to what's visible. That's why we're calling it an upside opportunity.

Cole Muller: Rene, as I said in the prepared remarks, we use the most visible marks out there. We use the PPL Zone mark. You can look in the appendix. We have a slide that shows the basis, West Hub PPL basis over time. For multiple years, it was trading very, very narrowly in a range, and that's broken out over the last couple of months as, you know, Terry and Chris have noted that there's, you know, reasons why. You know, from a just a mark perspective, we stay true to what's visible. That's why we're calling it an upside opportunity.

Speaker #2: Though you can look in the appendix, we have a slide that shows the basis west of PPL basis over time. And for multiple years, it was trading very, very narrowly in a range.

Speaker #2: And that's broken out over the last couple of months, as Terry and Chris have noted that there are reasons why, but from just a Mark perspective, we stayed true to what's visible.

Speaker #2: And that's why we're calling it an upside opportunity.

Speaker #5: Hey, Renee. It's Mack. And just one further follow-on is let's not lose sight while the basis has widened, the entire market is up. And Chris is now being proven correct that the market was going to tighten.

Mac McFarland: Hey, Rene, it's Mac. Just one further follow-on is let's not lose sight. While the basis has widened, the entire market is up, and Chris is now being proven correct that, you know, the market was gonna tighten or the term market is starting to agree with Chris. While the basis has widened, the market was up versus the 3/31 marks. As Cole mentioned in his prepared piece there, they're up even further if you went to yesterday. The markets are finally rationalizing, in our view, supply demand. And this basis, we think, is a temporal issue.

Speaker #5: There's a term market starting to agree with Chris. And so while the basis is widened, the market was up versus the 331 marks. And as Cole mentioned in his prepared piece there, they're up even further if you went to yesterday.

Speaker #5: And so the markets are finally rationalizing in our view supply-demand. And this basis we think is a temporal issue.

Speaker #7: Okay. Yeah. I think that makes sense. And then on this load growth, this capacity that you've highlighted, how are you guys thinking of what are you guys seeing for new prices, essentially, for whether it be CT or CCGT?

Rene Singh: Okay. Yeah, I think that makes sense. Then, you know, on this, you know, this load growth, this capacity that you've highlighted, what are you guys seeing for new prices essentially for whether it be CT or CCGT? How are you guys thinking about managing the risk, obviously, of the RBP to kind of, you know, fill in that capacity price, but more so the energy risk? Is that just focus on long-term data center contracts and higher prices? Yeah.

Rinny Singh: Okay. Yeah, I think that makes sense. Then, you know, on this, you know, this load growth, this capacity that you've highlighted, what are you guys seeing for new prices essentially for whether it be CT or CCGT? How are you guys thinking about managing the risk, obviously, of the RBP to kind of, you know, fill in that capacity price, but more so the energy risk? Is that just focus on long-term data center contracts and higher prices? Yeah.

Speaker #7: And how are you guys thinking about managing the risk? Obviously, of the RBP to kind of fill in that capacity price. But more of so the energy risk.

Speaker #7: Is that just focused on long-term data center contracts and higher prices? Yeah.

Speaker #5: Yeah, thanks, Renee. Good question. Obviously, you've seen a significant amount of appreciation in the turnkey cost for a CCGT, and then, quite frankly, even a similar move for combustion turbines across the board.

Terry Nutt: Thanks, Rene. Good question. Obviously, you've seen a significant amount of appreciation in sort of the turnkey cost for a CCGT and then quite frankly, even, you know, a similar move for combustion turbines across the board. In our proposal for the RBP, and I think this is pretty consistent with what PJM talked about, we really think that should be a capacity product, right? That's where you should focus, assuming that, you know, you're gonna build a CT on the back of a reliability backstop award, if you will. The capacity component of that or the capacity revenue stream is really what should underwrite or incentivize that. The energy and, you know, any ancillaries off of that is sort of second tier.

Speaker #5: In our proposal for the RBP, and I think this is pretty consistent with what PJM's talked about, you really we really think that that should be a capacity product, right?

Speaker #5: And that's where you should focus. Assuming that you're going to build a CT on the back of a reliability backstop award, if you will.

Speaker #5: And so the capacity component of that or the capacity revenue stream is really what should underwrite or incentivize that. The energy and any ancillaries off of that is sort of second-tier but also the ability of getting that award for multiple years and obviously our proposal has up to 15 years PJM's current proposal even talks about procurement up to 15 years.

Terry Nutt: Also the ability of getting that award for multiple years, obviously our proposal has up to 15 years. PJM's current proposal even talks about procurement up to 15 years. Obviously some similarities there. We think that ultimately is what helps underwrite that. I think we've talked about this before. I think the biggest challenge is not can you get additional resources on? It's really financing those resources and what is the underpinnings for somebody to underwrite and to get the financing associated with this. We think the proposal that PJM has hits the marks on that. We think there's some, you know, some modifications that we'd like to see, we think it gets there.

Speaker #5: So obviously, some similarities there. We think that ultimately is what helps underwrite that. And I think we've talked about this before. I think the biggest challenge is not.

Speaker #5: It's not, "Can you get additional resources on?" It's really financing those resources and what is the underpinnings for somebody to underwrite and to get the financing associated with it.

Speaker #5: So we think the proposal that PJM has hits the marks on that. We think there's some modifications that we'd like to see. But we think it gets there.

Speaker #7: Okay. Perfect. Thanks so much, guys.

Rene Singh: Okay. Perfect. Thanks so much, guys.

Rinny Singh: Okay. Perfect. Thanks so much, guys.

Speaker #6: Thank you.

Operator: Thank you.

Speaker #2: Thanks, Renee.

Terry Nutt: Thanks, Rene.

Speaker #6: Your next question comes from the line of Moses Sutton with BNP Paribas. Your line is now open.

Operator: Your next question comes from the line of Moses Sutton with BNP Paribas. Your line is now open.

Speaker #8: Thanks for taking my question. It's really ranking this change for Living Out to 28. So last quarter, 31.40, including Cornerstone, now moves to 41-plus.

Moses Sutton: Thanks for taking my question.

Moses Sutton: Thanks for taking my question. It's really rough asking if chain people prepare for looking at 22A. So last quarter at 3,140, including cornerstone, now moves to 41+, and you're not leaning on the upside drivers like M&A and PTA in there. How much of that roughly $10 increase is specifically driven by the spark spread expansion versus the balancing other factors? And I note you said the basis aspect is not in there. And then finally, any assumption embedded in there of higher capacity factors on the fleet?

Terry Nutt: Yeah. Thanks, Moses. Look, at the end of the day, you know, we're not gonna get too specific on all the different drivers, you know, we put it, you know, the all in there. I mean, you can kind of dissect a little bit, and we obviously show the impact of just the share repurchase program separately. You know, the other levers here, which is around just the Cornerstone numbers and the spark spreads and so forth, you know, you can kind of get to a directional answer there. We're not gonna break down the kind of line by line on that.

Speaker #8: And you're now leaning on the upside drivers like M&A and PPA in there. So how much of that roughly $10 increase is specifically driven by the spark spread expansion versus a balance sheet and other factors?

Speaker #8: And I note you've said the basis aspect is not in there. And then finally, any assumption embedded in there of higher capacity factors on the fleet?

Speaker #2: Yeah. Thanks, Moses. Look, at the end of the day, we're not going to get too specific on all the different drivers. But we put it the all-in there.

Speaker #2: I mean, you can kind of dissect a little bit and we obviously showed the impact of just the share repurchase program separately. But the other levers here which is around just the Cornerstone numbers and the spark spreads and so forth, you can kind of get to a directional answer there.

Speaker #2: But we're not going to break down kind of line by line on that.

Speaker #8: Got it. Got it. And on the backstop auction, so not specifically to you guys, but just broadly, is there a view that you have of if they'll even clear 15 gigawatts, whether that means battery, CT, some CCGTs in there?

Moses Sutton: Got it. Got it. On the backstop option, not specifically to you guys, but like just broadly, is there a view that you have of if they'll even clear 15 GW, whether that means battery CT, some CCGTs in there? Can they build that much by 2031 with Q reform? Do you think that some of it's gonna go into that second stage of the clearing process? Would you expect, you know, the bilateral process does most of the heavy lifting? I know it's hard to tell from here, but just curious your market views.

Speaker #8: Can they build that much by 2031 with Q reform? And do you think that it's going to some of it's going to go into that second stage of the clearing process?

Speaker #8: Or would you expect the bilateral process does most of the heavy lifting? I know it's hard to tell from here, but just curious your market views.

Speaker #2: Yeah. Moses, lots in there to unpack. Let me maybe hit a couple of those. I think when you take a look at the cost and you take a look at affordability at the end of the day, I think there's some obvious choices when it comes to technology.

Terry Nutt: Yeah, Moses, lots in there to unpack. Let me maybe hit a couple of those. I think when you take a look at the cost and you take a look at, you know, affordability at the end of the day, I think there's some obvious choices when it comes to technology. You know, PJM uses the Cost of New Entry. That Cost of New Entry is based off of a benchmark of a CT, which is the most affordable at the end of the day. We also think that you can get certain types of CTs and batteries built in a more timely manner. That's also something that, quite frankly, the, you know, reliability backstop needs to take into consideration.

Speaker #2: PJM uses the cost of new entrants. That cost of new entrant is based off of a benchmark of a CT. Which is the most affordable at the end of the day.

Speaker #2: And so, we also think that you can get certain types of CTs and batteries built in a more timely manner. And that's also something that, quite frankly, the reliability backstop needs to take into consideration.

Speaker #2: You sort of alluded to it in your comment. CCGTs and getting in the Q for a turbine or for a CCGT is a little bit of a longer wait time.

Terry Nutt: You sort of alluded to it in your comment, CCGTs and getting in the queue for a turbine or for a CCGT is a little bit of a longer wait time. You need to factor that in at the end of the day. Yeah, I mean, we think that there's some good things in the proposal. I will say the one thing that we think could be helpful, though, is the interconnection queue needs some clearing and needs some prioritization. That's one area where we're actively engaged in the stakeholder process and will continue to be engaged in the stakeholder process because ultimately that interconnection queue matters quite a bit on getting these new resources online.

Speaker #2: And so you need to factor that in at the end of the day. But yeah, I mean, we think that there's some—we think that there's some good things in the proposal.

Speaker #2: I will say the one thing that we think could be helpful, though, is the interconnection queue needs some clearing. It needs some prioritization. That's one area where we're actively engaged.

Speaker #2: And the stakeholder process, and we'll continue to be engaged in the stakeholder process because ultimately, that interconnection queue matters quite a bit on getting these new resources online.

Speaker #2: So hopefully that gives you a little bit of color, and we think it's good progress. It's good progress, and we'll see it push forward here.

Terry Nutt: Hopefully that gives you a little bit of color and, you know, we think it's a good progress. It's a good progress, and we'll see it push forward here.

Speaker #8: Very helpful things. Congrats on the outlook here.

Moses Sutton: Very helpful. Thanks. Congrats on the outlook here.

Speaker #2: Thanks, Moses.

Terry Nutt: Thanks, Moses.

Speaker #6: Thank you. Your next question comes in the line of Michael Sullivan with Wolf. Your line is now open.

Operator: Thank you. Your next question comes in the line of Michael Sullivan with Wolfe. Your line is now open.

Michael Sullivan: Hey. Hey, guys. How's it going?

Speaker #9: Hey. Hey, guys. How's it going?

Speaker #2: Hey, Michael. Hey, Michael.

Terry Nutt: Hey, Michael.

Michael Sullivan: Hey, hey. Maybe this is a silly one, but I know you don't want to get into specific opportunities, but when you laid out kinda your development capabilities there, why not just lean into the ones that are already fully zoned versus the ones that aren't, that we're kinda hearing about more publicly that are getting pushback? On the ones that are fully zoned, what is the hang-up there?

Speaker #9: Hey. Maybe this is a silly one, but just and I know you don't want to get into specific opportunities. But when you laid out kind of your development capabilities there, why not just lean into the ones that are already fully zoned versus the ones that aren't that were kind of hearing about more publicly that are getting pushback?

Speaker #9: And on the ones that are fully zoned, what is the hang-up up there?

Speaker #2: Yeah, Michael. So what we really wanted to try to do on that slide is to give a flavor of the work that the team's been doing for well over a year.

Terry Nutt: Michael, what we really wanted to try to do on that slide is to give a flavor of the work that the team's been doing for, you know, well over a year, across the board. As you take a look at the different opportunities that we've developed, you know, the ones that you hear about are fine. Obviously, Montour's been in the press. I mean, we continue to progress that one. But we do have others that are not in the press, and quite frankly, we want to push those forward as well. As we talked about on the last call, back in February, there was a lot of focus on just one or two of these.

Speaker #2: Across the board, as you take a look at the different opportunities that we've developed, the ones that you hear about are fine. Obviously, Montour's been in the press.

Speaker #2: I mean, we continue to progress that one. But we do have others that are not in the press. And quite frankly, we want to push those forward as well.

Speaker #2: As we talked about on the last call, back in February, there was a lot of focus on just one or two of these. And we wanted to make sure that investors understood that there was a broader sort of context.

Terry Nutt: We wanted to make sure that investors understood that there was a broader sort of context. I think the biggest thing that we think is helpful as well is as we think about this hybrid approach that we're moving forward with and trying to find some new generation to add into the mix, we think that that solution is something that really sort of checks a lot of boxes for some of the hyperscalers. That actually is gonna be a big aspect of how you'll see these things progress forward. It's not just zoning at the end of the day, whether it's industrial or sort of ag use. It's also the other implications around, okay, do you have some new gen to go with it?

Speaker #2: I think the biggest thing that we think is helpful as well is as we think about this hybrid approach that we're moving forward with and trying to find some new generation to add into the mix, we think that that solution is something that really sort of checks a lot of boxes for some of the hyperscalers.

Speaker #2: And that actually is going to be a big aspect of how you'll see these things progress forward. So it's not just zoning at the end of the day whether it's industrial or sort of ag use.

Speaker #2: It's also the other implications around, okay, do you have some new gen to go with it? What's the existing gen that you can have on the back of it?

Terry Nutt: What's the existing gen that you can have on the back of it? Hopefully that gives you some color.

Speaker #2: But hopefully, that gives you some color.

Speaker #9: And Michael, it's Mike. Maybe real quick, I think when you asked the question, and you say, "What's the hang-up?" I don't think that there's necessarily a hang-up.

Mac McFarland: Michael, it's Mac. Maybe real quick, I think when you ask the question and you say, "What's the hang up?" I don't think that there's necessarily a hang up. What we're doing is what we've been talking about, which is developing a set of options, and they all have different statuses as they move through the process. Sometimes one site that hasn't potentially reached zoning, AKA Montour, might have been advancing faster because it was liked by a counterparty more at that first piece, right? Now you have other ones that are more zoned. They come in, we've got others that aren't fully zoned that we're working on as well. It's bringing along all of these different things, it's not just working on one.

Speaker #9: What we're doing is what we've been talking about, which is developing a set of options. And they all have different statuses as they move through the process.

Speaker #9: And sometimes, one site that hasn't potentially reached zoning—aka Montour—might have been advancing faster because it was liked by a counterparty. More. At that first piece, right?

Speaker #9: Now you have other ones that are more zoned. They come in. And then we've got others that aren't fully zoned that we're working on as well.

Speaker #9: So it's bringing along all of these different things. And it's not just working on one. And that's what we were trying to what we were mentioning when we said Montour is not our only we're not that's not the only thing we have in our development pipeline.

Mac McFarland: That's what we were mentioning when we said, you know, Montour is not our only, that's not the only thing we have in our development pipeline, so.

Speaker #9: So.

Speaker #8: Okay. That's very helpful. Appreciate the color there. And then just back to some of the pricing action. I think you gave some pretty good points as to what happened in Q1.

Michael Sullivan: Okay. That's very helpful. Appreciate the color there. Just back to some of the pricing action, I think you gave some pretty good points as to what happened in Q1. Things have obviously really started to move in the last couple of weeks here. Just curious, you know, as we're in, like, a shoulder season, what's driving that? Even on the basis side, like, it seems like that's actually still going in the wrong direction. How you think about that in the last, yeah, kind of the last couple of weeks' developments.

Speaker #8: But things have obviously really started to move in the last couple of weeks here. And so just curious, as we're in a shoulder season, what's driving that?

Speaker #8: And then even on the basis side, it seems like that's actually still going in the wrong direction. And so how do you think about that in the last, yeah, kind of the last couple of weeks' developments?

Speaker #2: Yeah. So Michael, let me start this. And then I'll let Chris chime in. And this sort of refers back to the prepared remarks. One of the things that you're seeing is as you see cash market activity in the real-time market get really constrained and really tight, the term market is really responding to that.

Terry Nutt: Michael, let me start this, and then I'll let Chris chime in. This sort of refers back to the prepared remarks. One of the things that you're seeing is as you see cash market activity in the real-time market get really constrained and really tight, the term market is really responding to that. You know, a couple of examples obviously more recent, late January and early February, we had a really significant, you know, pricing event for 8 or 9 days throughout the entire market. Obviously the market reacted to that. Even recently is this set of spring outages that we've had, right? You know, we normally have a traditional large set of spring outages across the system.

Speaker #2: A couple of examples, obviously, more recent. Late January, and early February, we had a really significant pricing event for 8 or 9 days throughout the entire market.

Speaker #2: So obviously, the market reacted to that. But even recently, as this set of spring outages that we've had, right, we normally have a traditional large set of spring outages across the system.

Speaker #2: You get some generation that's off. But even a modest amount of weather that comes in, we've seen price volatility in cash pick up. And so the term market feeds off of that.

Terry Nutt: You get some generation that's off, but even a modest amount of weather that comes in, we've seen price volatility and cash pick up. The term market feeds off of that. Chris, you want to add some details to that?

Speaker #2: Chris, you want to add some details to that?

Speaker #9: Yeah. Hey, so yeah. I think, again, the price appreciation is something that we've been tracking, and certainly sort of identifying for several quarters now, and would be remiss to not sort of highlight our current hedge percentages in those outer years.

Chris Morice: Yeah. Hey, yeah, I think, again, the price appreciation is something that we've been tracking and certainly, sort of identifying for several quarters now and would be remiss to not sort of highlight our current hedge percentages in those outer years. Again, below our historical ranges that we've typically been at. More or less of, you know, our conviction in those periods, our conviction on that price appreciation is being expressed through those historically low hedge percentages. As Terry alluded to, a lot of the fundamental drivers taking place in the cash market manifesting themselves now through the curve, you know. Happening through time, but through different segments of cash and term.

Speaker #9: Again, below our historical ranges that we've typically been at. And so more or less of our conviction in those periods, our conviction on that price appreciation is being expressed through those historically low hedge percentages.

Speaker #9: And so as Terry alluded to, a lot of the fundamental drivers taking place in the cash market, manifesting themselves now through the curve so happening through time.

Speaker #9: But through different segments of cash and term.

Speaker #8: Very helpful. Much appreciated.

Michael Sullivan: Very helpful. Much appreciated.

Speaker #2: Thanks, Mike. Thanks, Michael.

Terry Nutt: Thanks, Michael.

Mac McFarland: Thanks, Michael.

Speaker #1: Thank you. Your next question comes from the line of Angie Storozinski with Seaport. Your line is now open.

Operator: Thank you. Your next question comes from the line of Angie Storozynski with Seaport. Your line is now open.

Speaker #10: Thank you. I wanted to talk about Ohio. I know that we're waiting for the cornerstone acquisition to close. But you've owned the Garden Z for quite some time.

Angie Storozynski: Thank you. I wanted to talk about Ohio. I know that we're waiting for the Cornerstone acquisition to close, but you've owned Guernsey for quite some time. There's been a lot of chatter around data centers from Ohio, especially from the region where you own a plant already. We heard some comments from AEP this morning about, you know, how dissatisfied they're with the pace of load interconnection in PJM. It did sound like it was about Ohio. We saw some, you know, like behind the meter deals from Williams. You showed us, you know, opportunities for contracting assets in Pennsylvania. Could you comment about Ohio, especially vis-a-vis Guernsey, please?

Speaker #10: And there's been a lot of chatter around data centers from Ohio, especially from the region where you own a plant already. We heard some comments from AP this morning about how dissatisfied they're with the pace of load interconnection in PJM.

Speaker #10: So it did sound like it was about Ohio. And also, we saw some deals behind the meter deals from Williams and so you showed us opportunities for contracting assets in Pennsylvania.

Speaker #10: Could you comment about Ohio especially vis-à-vis Garden Z? Please.

Speaker #2: Yeah. So Angie, maybe I'll touch on that real quick and Mack may follow up on that. So obviously, on the slide, we talk about specific activity in Pennsylvania.

Terry Nutt: Yeah. Angie Storozynski, maybe I'll touch on that real quick and Mac McFarland may follow up on that. Obviously on the slide we talk about specific activity in Pennsylvania. I will say in the prepared remarks, and also we do have one small sort of call-out box. We have been active in Ohio. Obviously we've had Guernsey in the portfolio for a few months now. It performed really well in Q1. Obviously a big help to our overall financial performance. We've been engaged in Ohio. We've talked to customers in and around, in and around that site, as well as just the broader state in general. We're active there. You know, once again, I think we've been working on a number of different options.

Speaker #2: I will say in the prepared remarks and also we do have one small sort of call-out box, we have been active in Ohio. Obviously, we've had Gardens in the portfolio for a few months now.

Speaker #2: It performed really well in Q1. Obviously, a big help to our overall financial performance. But we've been engaged in Ohio. We've talked to customers in and around that site, as well as just the broader state in general.

Speaker #2: So we're active there. Once again, I think we've been working on a number of different options. And as we restructured the leadership team at the end of last year, we put a lot more focus on different parts of the market in Ohio is definitely one of them.

Terry Nutt: As we restructured the leadership team at the end of last year, we put a lot more focus on different parts of the market, and Ohio is definitely one of them. It's a focus for us. We think it's a really good market, and we think, you know, the customers like to be there. There's a lot of customers that are already there today. It's a very established market in and around Columbus. There's several hubs in the area where you've got a lot of data centers. We really wanna continue to push that forward just like we're pushing forward in Pennsylvania.

Speaker #2: So it's a focus for us. And we think it's a really good market. And we think the customers like to be there. And there's a lot of customers that are already there today.

Speaker #2: It's a very established market in and around Columbus. There's several hubs in the area where you've got a lot of data centers and so we've really want to continue to push that forward just like we're pushing forward in Pennsylvania.

Mac McFarland: Angie, just to piggyback there. Obviously, we liked Ohio. We've amassed over 4 gigawatt gas fleet across there, including the plant that's in Indiana that serves basically Ohio. First, if you look at these fundamentals, the price appreciation, the price action that we just talked about is affecting those, and it doesn't have the negative West Hub, but basis. That it's been a good position for us to take. The second thing I'll say about developing options in Ohio is we're developing options in Ohio. It's just like we've been doing in Pennsylvania over time. We're just not gonna get into the specifics.

Speaker #9: to piggyback there, obviously, we like the Ohio. We've amassed over 4 gigawatt gas fleet across there, including the plant that's in Indiana that serves basically Ohio.

Speaker #9: And we did that for a reason. And so first, if you look at these fundamentals, the price appreciation, the price action that we just talked about is affecting those.

Speaker #9: And it doesn't have the negative West Hub butt basis. So it's been a good position for us to take. And the second thing I'll say about developing options in Ohio is we're developing options in Ohio.

Speaker #9: So it's just like we've been doing in Pennsylvania over time. We're just not going to get into the specifics.

Speaker #10: Okay. And then one more question about site 12 and the talent flywheel. So I mean, it was always my understanding that you go through M&A.

Angie Storozynski: Okay. One more question about slide 12 and the Talen flywheel. I mean, it was always my understanding that you go through M&A and the next step is monetization of assets. In that box where you show upside to your free cash flow per share, you show M&A as the first driver. Is it fair to assume that we would first see some monetization of assets before we see another M&A transaction?

Speaker #10: And the next step is monetization of assets. Now, in that box where you show upside to your free cash flow per share, you show M&A as the first driver.

Speaker #10: Is it fair to assume that we would first see some monetization of assets before we see another M&A transaction?

Speaker #2: Yeah. Hey, Angie. It's Mack. Maybe I'll address that. So first of all, there's nothing to the order of what's on the right-hand side other than it was to maintain consistency with what we've shown before.

Mac McFarland: Yeah. Hey, Angie, it's Mac. Maybe I'll address that. First of all, there's nothing to the order of what's on the right-hand side other than it was to maintain consistency with what we've shown before, 'cause this is the order that we showed it in before. Obviously, and I think we've all said this, in a perfect world, what you would do is you would add assets, contract them up, recycle capital, then add assets and do that. Unfortunately, we're left with, you know, deciding to make strategic actions which are consistent with the Talen flywheel that happen to be lumpy at periods of time. Yes, we are diligently working. I think Cole mentioned it. You know, we're thinking about how do we get to that 50% contracted energy margin.

Speaker #2: Because this is the order that we showed it in before. So obviously, and I think we've all said this in a perfect world, what you would do is you would add assets, contract them up, recycle capital, then add assets and do that.

Speaker #2: But unfortunately, we're left with deciding to make strategic actions which are consistent with the talent flywheel that happen to be lumpy at periods of time.

Speaker #2: And yes, we are diligently working. I think Cole mentioned it. We're thinking about how do we get to that 50% contracted energy margin. We're looking at different opportunities across the way.

Mac McFarland: We're looking at different opportunities across the way, and those are developing. You know, we like what we've been doing. Yes, would we satisfy investors if we had a deal announced by now? Sure. These things take their time. We've said that, and we're working our way through, and we feel like we've got a good pipeline of opportunities to get things done.

Speaker #2: And those are developing. But we like what we've been doing. Yes, would we satisfy investors if we had a head of deal announced by now?

Speaker #2: Sure. But these things, take their time. We've said that. And we're working our way through. And we feel like we've got a good pipeline of opportunities to get things done.

Speaker #10: Okay. Understood. Thank you.

Angie Storozynski: Okay. Understood. Thank you.

Speaker #2: Thanks, Angie. Thanks, Angie.

Mac McFarland: Thanks, Angie.

Speaker #1: Thank you. Your next question comes from the line of Bill Appicelli with UBS, your line is now open.

Operator: Thank you. Your next question comes to the line of Bill Appicelli with UBS. Your line is now open.

Speaker #8: Hi, good afternoon. Just a question going back to a few of the comments earlier. When you guys look at the levelized cost of energy that's going to be needed for a lot of this new build, I mean, how wide is that spread?

Bill Appicelli: Hi, good afternoon. Just a question going back to a few of the comments earlier. When you guys look at the, you know, the levelized cost of energy that's gonna be needed for a lot of this new build, I mean, how wide is that spread, even if you're looking at a CT relative to, you know, where market conditions are currently?

Speaker #8: Even if you're looking at a CT relative to where market conditions are currently?

Speaker #2: Hey, Bill. It's Cole. I'll start and others can chime in here. Look, I mean, the gap's wide, right? Just on a merchant basis, to support new build of any kind.

Cole Muller: Hey, Bill, it's Cole. I'll start, others can chime in here. Look, I mean, the GAAP's wide, right? Just on a merchant basis, to support new build of any kind. That's why we, I think a lot of others, it's not rocket science, you know, we'll do new build supported by some kind of commitment, whether that's a bilateral contract directly with a hyperscaler or through the RBP and through, therefore, PJM. That gap's gotta get, you know, bridged for us to make that, you know, large commitment, you know, do so at, you know, in a creative manner for our shareholders here.

Speaker #2: And that's why we and I think a lot of others, and it's not rocket science. We'll do new build, supported by some kind of commitment, whether that's a bilateral contract directly with a hyperscaler or through the RBP and through, therefore, PJM.

Speaker #2: But that gap's got to get bridged for us to make that large commitment and do so in an accretive manner for our shareholders here.

Speaker #2: But I mean, the current capacity clears, as everyone knows, is not sufficient to stimulate new build. And obviously, different technologies have different LCOE. Combined cycles are the most expensive.

Cole Muller: I mean, the current capacity clears, as everyone knows, is not sufficient to stimulate new build. Obviously, different technologies have different LCOE. Combined cycle is the most expensive. They obviously have more energy margin. Always a trade-off, but the gap's not like a couple of bucks. It's a pretty large spread right now.

Speaker #2: They obviously have more energy margin. So always a trade-off. But the gap's not like a couple of bucks. It's a pretty large spread right now.

Speaker #8: Right. Okay. And I mean, do you have any concern about sort of a bifurcated market, where the new incremental megawatts are getting the sufficient payment, but existing generation is not?

Bill Appicelli: Right. Okay. I mean, do you have any concerns about sort of a bifurcated market where, you know, the new incremental megawatts are getting the sufficient payment, but, you know, existing generation is not? I mean, I think that seems to be a concern, you know, in the market more broadly. Just curious your thoughts.

Speaker #8: I mean, I think that seems to be a concern in the market more broadly. So just curious your thoughts.

Speaker #2: Look, Bill, it's Mack. I would say that, yes, it's concerns that people have broadly in the market. I don't know that we share the same level of concern.

Mac McFarland: Look, I, Bill, it's Mac. I would say that, yes, it's concerns that people have broadly in the market. I don't know that we share the same level of concern because as we've always stated, and we supported the RBP, it was a one-time action. I do think as, you know, last week the cap was extended, we were, you know, of the capacity clears 2930 and 4. For two more years. We, you know, we supported that. That gives time to create and to exercise the RBP. That's always a concern that's going to be raised, but we don't share the same level of concern.

Speaker #2: Because, as we've always stated—and we supported the RBP—it was a one-time action. I do think, as last week, the cap was extended; we were of the capacity clears, 2,930 and 4.

Speaker #2: So for two more years. We supported that. That gives time to create and to exercise the RBP. That's always a concern that's going to be raised, but we don't share the same level of concern.

Speaker #8: Okay. And then I guess maybe just lastly, on the new gen options, would that include any repowerings or of your existing assets in terms of uprates or other things?

Bill Appicelli: Okay. Then I guess maybe just lastly, you know, on the new gen options, would that include any repowerings or of your existing assets in terms of upgrades or other things?

Speaker #2: It does not.

Cole Muller: It does not.

Speaker #8: Okay. All right. Thank you.

Bill Appicelli: Okay. All right. Thank you.

Speaker #2: Thanks, Bill. Thanks, Bill.

Cole Muller: Thanks, Bill.

Mac McFarland: Thanks, Bill.

Speaker #1: Thank you. Your next question comes from the line of Julian Dumulin-Smith with Jefferies, your line is now.

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

Speaker #8: Hey, good afternoon, team. Nice to chat. Thanks for the time. I appreciate it. Maybe just to rehash on a couple of things. Hey, afternoon, guys.

Julien Dumoulin-Smith: Hey, good afternoon, team. Nice to chat. Thanks for the time. I appreciate it.

Mac McFarland: Hey.

Julien Dumoulin-Smith: A reaction, a couple things. Hey, afternoon, guys. Just coming back to the rate payer pledge here, that came out after your last call here. Can we talk a little bit about just Did that change the name at all, right, away from the RBP and to come back to the protection pledge they made in March? Just can you talk to that, if at all, if that changed your strategy? I know you don't want to talk too much about it, but is there anything there? Does that evolve in any way? Just want to, like, tackle that directly and explicitly here. Then I got a quick follow-up.

Speaker #8: Just coming back to the rate payer pledge here that came out after your last call here. Can we talk a little bit about just did that change the name at all, right, away from the RBP and to come back to the protection pledge they made in March?

Speaker #8: Just can you talk to that if at all, if that changed your strategy? I know you don't want to talk too much about it.

Speaker #8: But is there anything there? Does that evolve in any way? Just want to tackle that directly and explicitly here. And then I’ve got a quick follow-up.

Speaker #2: Look, you're talking about the in Pennsylvania, or are you talking about the what came out of the White House?

Mac McFarland: Are you talking about the what came out of the White House industry?

Speaker #8: The White House. Yeah. The White House piece in March. Yeah.

Julien Dumoulin-Smith: The White House. Yeah, the White House piece in March. Yeah.

Speaker #2: Yeah. So look, I think that there's the pledge that you heard the hyperscalers make that obviously they committed to paying their fair share effectively.

Mac McFarland: Yeah. Look, I think that there's the pledge that, you know, you heard the hyperscalers make that obviously, you know, they committed to paying their fair share effectively. I think there's still a open debate as to what that fair share is and how that fair share is determined and how that all gets, you know, pushed through the system as you know, right? Because we operate in a reorganized market in PJM, and there's a certain construct and set of rules associated with that, and ability and jurisdictions and authority, whether it be a PJM, the states, or at FERC, that have to set these rules. There's the implementation that this is working its way through. I think in general, where do we see the puck going?

Speaker #2: I think there's still an open debate as to what that fair share is. And how that fair share is determined. And how that all gets pushed through the system, as you know, right?

Speaker #2: Because we operate in a reorganized market in PJM, and there's a certain construct instead of rules associated with that. And ability and jurisdictions and authority, whether it be at PJM, the states, or at FERC, that have to set these rules.

Speaker #2: And so there's the implementation that this is working its way through. But I think in general, where do we see the puck going? We generally think that there's still the ability, because of speed to market, to contract through existing assets.

Mac McFarland: We generally think that there's still the ability because of speed to market to contract through existing assets. We are starting to see the hybrid model that's been discussed during the remarks today as being the development aspect of it to solve these so-called additionality or, you know, bringing its incremental generation to ratepayer protection. I think it's going to take time to evolve on that front, and I don't know that it's necessarily as clear as some people would say that, you know, the hyperscalers have signed up to pay for all of this because that's not exactly how the, you know, reform markets work.

Speaker #2: We are starting to see the hybrid model that's been discussed during the remarks today as being the development aspect of it to solve these so-called additionality or bringing incremental generation to rate payer protection.

Speaker #2: So I think it's going to take time to evolve on that front. And I don't know that it's necessarily as clear as some people would say that the hyperscalers have signed up to pay for all of this.

Speaker #2: Because that's not exactly how the reformed markets work.

Speaker #8: Got it. And then just to tie this back, I mean, as you guys talk about this 500 to a gig of new gen here potentially, I mean, would you think about that satiating one half of that equation when it comes to additionality such that you talk about these one-plus gigawatts sites or what have you?

Julien Dumoulin-Smith: Got it. Then just to tie this back, I mean, as you guys talk about this 500 to a gig of new gen here potentially, I mean, would you think about that satiating like one half of that equation when it comes to additionality such that, you know, you're talking about these 1-plus gigawatts, sites, what have you? Are you thinking about tethering the new gen back to it? Go for it.

Speaker #8: Are you thinking about tethering the new gen back to it? Go for it.

Speaker #2: Yeah. No. I think Terry actually said, "I'm looking at it." It was actually it's a half gig to a gig at a site. And multiple sites that we see several gigs of opportunity.

Mac McFarland: Yeah. No, I think Terry actually said, I'm looking at it was that.

Terry Nutt: Yeah.

Mac McFarland: It was actually, it's a half gig to a gig at a site and multiple sites that we see several gigs of opportunity. Dale, who's been working the development aspect of this, the asset development aspect of this, you know, he was the one that submitted through the queue, the 2.3 gigs or just over 2 gigs that we put in. When you say tethered, I think that's. Tethered is the same as what we're saying is what we call the hybrid model, which is, you put it with an existing PPA, then you're solving that 50 hours a year if it's batteries or peakers. Then when you need to solve the energy, then it becomes CCGTs. New, right?

Speaker #2: And then Dale who's been working the development aspect of this, the asset development aspect of this, he was the one that submitted through the queue, the 2.3 gigs or just over two gigs that we put in.

Speaker #2: And so, when you say 'tethered,' I think that's what we're tethered—it's the same as what we're saying is what we call the hybrid model, which is, you put it with an existing PPA.

Speaker #2: And then you're solving that 50 hours a year if it's batteries or peakers. And then when you need to solve the energy, then it becomes CCGTs.

Speaker #2: New. Right? But you can put those on the back of existing. And solve a lot of the resource adequacy problem. At a lower cost and bringing CCGTs.

Mac McFarland: You can put those on the back of existing and solve a lot of the resource adequacy problem at a lower cost than bringing CCGT. 'Cause I know, you know, a lot of this stuff, as you know, Julien, that's being talked about out there is now $3,000 to $4,000 for a new CCGT. That's a lot more than $500 a megawatt day.

Speaker #2: Because I know a lot of the stuff, as you know, Julian, that's been talked about out there is now $3,000 to $4,000 for new CCGT.

Speaker #2: That's a lot more than 500 bucks a megawatt day.

Julien Dumoulin-Smith: Absolutely. Right. Look, I hear you on the storage piece for sure. Right. Right. CTs and storage for now, right? For sure. It's just the bring to full conclusion that thought, right? You'll aim to bring this stuff up online. Basically leveraging this RBP, that's when, that's the moment that we could see something materialize. If you think about, like, timelines, everyone's always peppering you on this question of when. To come to fruition on it, if to the extent to which you all clear something from an RBP perspective, what have you, that is that tethering event that should unlock this opportunity. Conceptually, it'll be explicitly at that point in time tied to some of these contracting things you've been pursuing.

Speaker #8: Absolutely. Right. No. Look, I hear you on the storage piece for sure. Right. Right. And CTs and storage for now, right, for sure. But it's just the bring to full conclusion that thought, right?

Speaker #8: You'll aim to bring this stuff up online. But basically, leveraging this RBP, that's when—that's the moment that we could see something materialize if you think about timelines.

Speaker #8: Everyone's always peppering you on this question of when. But to come to fruition on it, to the extent to which you all clear something from an RBP perspective, what have you, that is that tethering event that should unlock this opportunity.

Speaker #8: Conceptually, it'll be explicitly at that point in time tied to some of these contracting things you've been pursuing.

Speaker #2: Julian, back to the earlier conversation and questions. I think we've got very specific path on that. There's one of two ways that those new megawatts will come to the grid.

Terry Nutt: Julien, back to the earlier conversation and questions. I think we've got very specific path on that. There's one of two ways that those new megawatts will come to the grid. It'll be either through a direct offtake agreement with a hyperscaler or through an RBP award. Those are the two paths that you'll get there. You know, obviously, it'll depend on, you know, which path comes first at the end of the day.

Speaker #2: It'll be either through a direct offtake agreement with a hyperscaler or through an RBP award. So those are the two paths that you'll get there.

Speaker #2: And obviously, it'll depend on which path comes first at the end of the day.

Speaker #8: Right. All right. Yeah. Fair. Touché. Indeed. All right, guys, I'll leave it there. Thank you guys very much. Appreciate it.

Julien Dumoulin-Smith: Right. All right. Yeah, fair. Touché. Indeed. All right, guys, I'll leave it there. Thank you, guys, very much. Appreciate it.

Speaker #2: Thanks, Julian.

Terry Nutt: Thanks, Julien.

Julien Dumoulin-Smith: Andrew.

Speaker #1: Thank you. Your next question comes in line of Nick Amatucci with Evercore, your line is now open.

Operator: Thank you. Your next question comes on the line of Nicholas Amicucci with Evercore. Your line is now open.

Operator: Thank you. Your next question comes on the line of Nick Amicucci with Evercore. Your line is now open.

Speaker #9: Hey, guys. Happy Cinco de Mayo. A couple of quick ones. For me, I'm actually piggybacking on Julian's question there too. So is it fair to say so the new generation could be a long-term DC offtake agreement or the RBP?

Nicholas Amicucci: Hey, guys. Happy Cinco de Mayo. Couple quick ones from me. I'm actually piggybacking on Julien's question there too. Is it fair to say, the new generation, you know, could be, it could be a long-term DC offtake agreement or the RBP. I guess, how would you guys frame the capital deployment? Is it fair to say that the RBP is kind of more of a fallback? Or are you seeing economics that would compete with a hyperscaler PPA?

Nick Amicucci: Hey, guys. Happy Cinco de Mayo. Couple quick ones from me. I'm actually piggybacking on Julien's question there too. Is it fair to say, the new generation, you know, could be, it could be a long-term DC offtake agreement or the RBP. I guess, how would you guys frame the capital deployment? Is it fair to say that the RBP is kind of more of a fallback? Or are you seeing economics that would compete with a hyperscaler PPA?

Speaker #9: I guess, how would you guys frame that capital deployment? Is it fair to say that the RBP is kind of more of a fallback?

Speaker #9: Or are you seeing economics that would compete with a hyperscaler PPA?

Mac McFarland: I think it's not a discrete choice between the two. It's Mac, by the way. I don't think there's a discrete choice between the two. I think we're gonna participate in the RBP, and we'll participate in the bilateral markets as well with these through the hybrid model, as we've been saying. I think that one is more of a centralized function that we think is provides a one-time backstop, hence the name, to the market for the resource adequacy. All the while, there's a bilateral market that's out there too that can bring the additionality through the hybrid model that we're discussing. I don't think it's as discrete as that.

Speaker #2: I think it's not a discrete choice between the two. It's MAC, by the way. I don't think there's a discrete choice between the two.

Speaker #2: I think we're going to participate in the RBP. And we'll participate in the bilateral markets as well with these through the hybrid model as we've been saying.

Speaker #2: So I think that one is more of a centralized function that we think is provides a one-time backstop, hence the name, to the market for the resource adequacy.

Speaker #2: And all the while, there's a bilateral market that's out there too that can bring the additionality through the hybrid model that we're discussing. So I don't think it's as discrete as that.

Speaker #2: I think that what people are saying in terms of cost, it'll be interesting because people will have to bid. We have a construct in there where as it originally stood, it was 1.25 times, I think, the approved cost with it.

Mac McFarland: I think that, you know, what people are seeing in terms of cost, it'll be interesting because people will have to bid. You know, we have a construct in there, where as it originally stood, it was 1.25 times, I think, the approved cost with it, Net CONE with it, so that you didn't have to get approval of your capacity bids. The RBP, there are those that argue that that should probably go up, and I could see some logic behind that. You know, people have to decide what are they willing to bid, what are they willing to put into that demand or capacity payment, and what are they willing to do on the energy side.

Mac McFarland: I think that, you know, what people are seeing in terms of cost, it'll be interesting because people will have to bid. We have a construct in there, where as it originally stood, it was 1.25x, I think, the approved cost with it, Net CONE with it, so that you didn't have to get approval of your capacity bids. The RBP, there are those that argue that that should probably go up, and I could see some logic behind that. People have to decide what are they willing to bid, what are they willing to put into that demand or capacity payment, and what are they willing to do on the energy side.

Speaker #2: So that you didn't have to get approval of your capacity bids. And the RBP, there's those that argue that that should probably go up.

Speaker #2: And I could see some logic behind that. And but then people have to decide what are they willing to bid, what are they willing to put into that demand or capacity payment.

Speaker #2: And then, what are they willing to do on the energy side? And obviously, the CCGTs both require a bigger capacity component and a bigger energy margin expectation.

Mac McFarland: Obviously, the CCGTs both require a bigger capacity component and a bigger energy margin expectation.

Nicholas Amicucci: Right.

Speaker #2: But we actually think that there are some least-cost solutions to bring things in under those costs, so.

Mac McFarland: We actually think that there's some least cost solutions to bring things in under those costs.

Speaker #8: Great, that makes sense. And then if we think about it too—I mean, you guys had alluded to it earlier in the call—just kind of a double-digit free cash flow yield.

Nicholas Amicucci: Great. That makes sense. If we think about it too, I mean, you guys had alluded to it earlier in the call, just kind of a double-digit free cash flow yield. You know, $100 million of share buybacks is nothing to, you know, shake a stick at. Still have $1.9 billion remaining through 2028. Do we expect any type of acceleration to the Q1 pace, particularly, as we think about, you know, Cornerstone closing and then leveraging the leverage getting back down below the target?

Nick Amicucci: Great. That makes sense. If we think about it too, I mean, you guys had alluded to it earlier in the call, just kind of a double-digit free cash flow yield. You know, $100 million of share buybacks is nothing to, you know, shake a stick at. Still have $1.9 billion remaining through 2028. Do we expect any type of acceleration to the Q1 pace, particularly, as we think about, you know, Cornerstone closing and then leveraging the leverage getting back down below the target?

Speaker #8: But 100 million of share buybacks is nothing to shake a stick at. But still have 1.9 billion remaining through 2028. So we expect any type of acceleration to the Q1 pace, particularly as we think about Cornerstone closing and then leveraging the leverage getting back down below the target.

Mac McFarland: You can say shake a stick at it 'cause it's $100 million out of a $2 billion dollar allocation. Like, when we have the opportunity, you know, and can exercise, we always like to get in and buy the shares back when we can.

Speaker #2: You can say shake a stick at it because it's $100 million out of the $2 billion allocation. And so when we have the opportunity and can exercise, we always like to get in and buy the shares back when we can.

Speaker #9: Yeah. And Nick, if you look at slide 12, we broke out the share repurchase program impacts. And to get there, it's going to be doing stuff at scale over time here.

Terry Nutt: Yeah. Nick, you look at slide 12, we broke out the share repurchase program impacts. To get there, that it's gonna be doing stuff at scale, over time here. You know, we're committed to doing that.

Terry Nutt: Nick, you look at slide 12, we broke out the share repurchase program impacts. To get there, that it's gonna be doing stuff at scale, over time here. You know, we're committed to doing that.

Speaker #9: So we're committed to doing that.

Speaker #8: Fair. All right. Thanks. I was just trying to be polite, Matt.

Nicholas Amicucci: Fair. All right. Thanks. I was just trying to be polite, Mac.

Nick Amicucci: Fair. All right. Thanks. I was just trying to be polite, Mac.

Speaker #2: Thanks, Nick.

Terry Nutt: Thanks, Nick.

Speaker #9: Thanks, Nick.

Mac McFarland: Thanks, Nick.

Speaker #2: I appreciate you pushing Cole and Terry.

Nicholas Amicucci: I appreciate you pushing coal and Terry.

Nick Amicucci: I appreciate you pushing coal and Terry.

Speaker #9: And enjoy the tacos.

Terry Nutt: Enjoy the tacos.

Speaker #1: Thank you. Our final question comes in line of David Arcaro with Morgan Stanley, your line is now open.

Operator: Thank you. Our final question comes to the line of David Arcaro with Morgan Stanley. Your line is now open.

Speaker #10: Hey. Thanks so much for taking my questions. I wonder if you could just maybe give any color that you're hearing from potential counterparties here.

David Arcaro: Hey, thanks so much for taking my questions. Wondering if you could just maybe give any color that you're hearing from potential counterparties here. Are they waiting for more clarity on the backstop procurement? Like, are there milestones in that process that you think would maybe accelerate things, unlock some contracting activity? You know, is it the finalization of the rules from PJM, or do we have to wait, you know, potentially for the actual procurement to be run, before we?

Speaker #10: Are they waiting for more clarity on the backstop procurement? And are there milestones in that process that you think would maybe accelerate things, unlock some contracting activity?

Speaker #10: Is it the finalization of the rules from PJM? Or do we have to wait potentially for the actual procurement to be run before you see more activity?

Terry Nutt: Yeah

David Arcaro: See more activity?

Speaker #2: Hey, David. That's a good question. I think generally, it's sort of a balance of things there. There's a pretty good consensus now on the reliability backstop.

Terry Nutt: He-hey, Dave, that's a good question. I think generally, it's sort of a balance of things there. There's a pretty good consensus now on the reliability backstop. Now we're really talking about the details of what it looks like. I said I think a lot of stakeholders, including customers, have gotten comfortable with that. As we, you know, obviously, as we've alluded to on this call, some of our discussions have moved to more this hybrid approach, where we're talking about bringing new generation and adding that to the solution mix. We don't think that it's necessarily anything that's sort of hindering or keeping folks from transacting. Would they want like, you know, 100 percent clarity? Yes.

Terry Nutt: Dave, that's a good question. I think generally, it's sort of a balance of things there. There's a pretty good consensus now on the reliability backstop. Now we're really talking about the details of what it looks like. I said I think a lot of stakeholders, including customers, have gotten comfortable with that. As we, you know, obviously, as we've alluded to on this call, some of our discussions have moved to more this hybrid approach, where we're talking about bringing new generation and adding that to the solution mix. We don't think that it's necessarily anything that's sort of hindering or keeping folks from transacting. Would they want like, you know, 100% clarity? Yes.

Speaker #2: Now we're really talking about the details of what it looks like. And I think a lot of stakeholders including customers have gotten comfortable with that.

Speaker #2: As we obviously, as we've alluded to on this call, some of our discussions have moved to more this hybrid approach where we're talking about bringing new generation and adding that to the solution mix.

Speaker #2: So we don't think that it's necessarily anything that's sort of hindering or keeping folks from transacting. Now, would they want 100% clarity? Yes. But I think at the end of the day, they've also got some demand that they've got to make sure that they meet for their customer base.

Terry Nutt: I think at the end of the day, they've also got some demand that they've got to make sure that they meet for their customer base. It's a little bit of yes and no at the end of the day on that question.

Speaker #2: So it's a little bit of yes and no at the end of the day on that question.

Speaker #11: I will say, David, it's also we think that it's helpful that we've been providing comments on the RBP and one of them was, "Don't make it such an extended program into next year and bringing it into the during the opens sessions." Stakeholder sessions to the last couple days they've started to change PJM started to reformulate when they think the timing is and for it to be this fall.

Mac McFarland: I will say, David, it's also, you know, we think that it's helpful that, you know, we've been providing comments on the RBP, one of them was, don't make it such an extended program into next year, bringing it into the, you know, during the open sessions, stakeholder sessions through the last couple days, they've started to change. PJM started to reformulate when they think the timing is and for it to be this fall. We think that's a good thing. Like anything like that that brings a little more clarity, yeah, that of course helps. Are people still putting down as, you know, these capital plans that are, you know, just continue to, you know, reach escape velocity at the hyperscalers? I mean, it's not slowing down.

Mac McFarland: I will say, David, it's also we think that it's helpful that, you know, we've been providing comments on the RBP, one of them was, don't make it such an extended program into next year, bringing it into the, you know, during the open sessions, stakeholder sessions through the last couple days, they've started to change. PJM started to reformulate when they think the timing is and for it to be this fall. We think that's a good thing. Like anything like that that brings a little more clarity, yeah, that of course helps. Are people still putting down as these capital plans that are, you know, just continue to reach escape velocity at the hyperscalers? I mean, it's not slowing down.

Speaker #11: So we think that's a good thing. So anything like that that brings a little more clarity, yeah, that of course helps. But are people still putting down as these capital plans that are just continue to reach escape velocity at the hyperscalers?

Speaker #11: I mean, it's not slowing down. So yes, clarity helps. But is it necessary? No. Unfortunately, we're going to have to end it there. And I do see that there are a couple more questions in the queue.

Mac McFarland: Yes, clarity helps, but is it a necessary? No. Unfortunately, we're gonna have to end it there. I do see that there are a couple more questions in the queue. Apologize to everybody that we didn't get to. We just run out of time here, and we're running up against our time. We do appreciate you for joining us today and your continued support of Talen. I think in summary, what I'd like to say is that we have a strong 2027, 2028 outlook with multiple levers that we can pull and further upside from spark expansion.

Speaker #11: I apologize to everybody that we didn't get to. We just run out of time here. And we're running up against our time. But we do appreciate you for joining us today.

Speaker #11: And your continued support of Talen. I think in summary, what I'd like to say is that we have a strong 27-28 outlook with multiple levers that we can pull and further upside from Spark expansion.

Speaker #11: I think we’re also, hopefully, providing some peeling back—pulling back the curtain a little bit to show you that we are set up to execute on some of these growths through our development pipeline.

Mac McFarland: I think we're also hopefully providing some, you know, pulling back the curtain a little bit to show you that we are set up to execute on some of these growths through our development pipeline and the opportunities that we've been working on for some time. We're excited about that. We look forward to powering the future. Have a great day.

Speaker #11: And the opportunities that we've been working on from some time. We're excited about that. And we look forward to powering the future. Have a great day.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.