Q2 2026 Constellation Energy Corp Earnings Call

August 6, 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Q2 earnings conference call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Tim Flottemesch, Vice President, Investor Relations. You may begin.

Operator: Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Q2 Earnings conference call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Tim Flottemesch, Vice President, Investor Relations. You may begin.

Speaker #2: Investor Relations. You may begin.

Speaker #3: Thank you, Kevin. Good morning, everyone, and thank you for joining Constellation Energy Corporation's second quarter earnings conference call. Leading the call today are Joe Dominguez, Constellation's Chairman, President, and Chief Executive Officer, and Shane Smith, Constellation's Chief Financial Officer.

Tim Flottemesch: Thank you, Kevin. Good morning, everyone, and thank you for joining Constellation Energy Corporation's Q2 earnings conference call. Leading the call today are Joe Dominguez, Constellation's Chairman, President, and Chief Executive Officer, and Shane Smith, Constellation's Chief Financial Officer. They are joined by other members of Constellation's senior management team who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning along with the presentation, all of which can be found on the Investor Relations section of Constellation's website. The earnings release and other matters which were discussed during today's call contain forward-looking statements and estimates regarding Constellation, its subsidiaries that are subject to various risks and uncertainties. Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made on the call.

Speaker #3: They are joined by other members of Constellation's Senior Management Team, who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning, along with the presentation.

Speaker #3: All of which can be found on the Investor Relations section of Constellation's website. The earnings release and other matters which were discussed during today's call contain forward-looking statements and estimates regarding Constellation, its subsidiaries, that are subject to various risks and uncertainties.

Speaker #3: Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made on the call. Please refer to today's AK and Constellation's other SEC filings for discussions of risk factors and other circumstances and conditions that may cause results to differ from management's projections forecasts and expectations.

Tim Flottemesch: Please refer to today's 8-K and Constellation's other SEC filings for discussions of risk factors and other circumstances and conditions that may cause results to differ from management's projections, forecasts, and expectations. Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Joe.

Speaker #3: Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures.

Speaker #3: I'll now turn the call over to Joe.

Speaker #4: Thanks, Tim. Good morning, everyone. Thanks for joining our call and for your continued interest in Constellation. We've got a terrific update for you today: strong results, an increase in guidance, positive regulatory developments, and good progress on strategic transactions.

Joe Dominguez: Thanks, Tim. Morning, everyone. Thanks for joining our call and for your continued interest in Constellation. We have got a terrific update for you today. Strong results, an increase in guidance, positive regulatory developments, and good progress on strategic transactions. As always, we want to start off with the most important part of our business, our people. First, let me begin by recognizing Bob Lawless, who this week retired from Constellation’s board after more than 25 years of spectacular service to Constellation and its predecessors as a board member. From Constellation’s early years as a standalone company, through our time as part of Exelon, and in the years since our separation, Bob has played a critical role in helping to position the company for the long-term success we enjoy today. He is one of a kind.

Speaker #4: But as always, we want to start off with the most important part of our business, our people. First, let me begin by recognizing Bob Lawless, who this week retired from Constellation's board after more than 25 years of spectacular service to Constellation and its predecessors as a board member.

Speaker #4: From Constellation's early years as a standalone company, through our time as part of Exelon, and in the years since our separation, Bob has played a critical role in helping to position the company for the long-term success we enjoy today.

Speaker #4: He is one of a kind. On behalf of all of us at Constellation, I want to thank Bob for his leadership, his guidance, his friendship, and his dedicated service.

Joe Dominguez: On behalf of all of us at Constellation, I want to thank Bob for his leadership, his guidance, his friendship, and his dedicated service. We wish him all the best in retirement. Godspeed, Bob. Next, I want to thank the women and men of Constellation for delivering another strong quarter, operationally, and financially. During the Mid-Atlantic heat wave ahead of the Fourth of July holiday, our employees delivered, achieving a nuclear capacity factor above 99%, while safely managing our dispatchable generation fleet through challenging operating conditions as the new organization came together effectively. Their dedication and execution helped sustain grid reliability when our customers and communities needed it most. Constellation is a special company, and we pride ourselves in making our company a place where people want to spend a career doing important work for America.

Speaker #4: We wish him all the best in retirement. Godspeed, Bob. Next, I want to thank the women and men of Constellation for delivering another strong quarter operationally and financially.

Speaker #4: During the Mid-Atlantic heat wave ahead of the 4th of July holiday, our employees delivered. Achieving a nuclear capacity factor above 99% while safely managing our dispatchable generation fleet through challenging operating conditions as the new organization came together effectively.

Speaker #4: Their dedication and execution helped sustain grid reliability when our customers and communities needed it most. Constellation is a special company. And we pride ourselves in making our company a place where people want to spend a career doing important work for America.

Speaker #4: So we're especially gratified that Constellation has been named a great place to work for the fourth year in a row. As you know, this certification is meaningful because the recognition can only be earned through the direct input of our people.

Joe Dominguez: We are especially gratified that Constellation has been named a Great Place to Work for the fourth year in a row. As you know, this certification is meaningful because the recognition can only be earned through the direct input of our people. I am also pleased to report to you that for the first time, Constellation has been recognized as a world’s top business for people with disabilities. Finally, we were extraordinarily pleased to receive the Points of Light honor as one of the nation’s 50 most community-minded companies based upon the positive impact we make every day through volunteerism and investment in our communities. I know that some may think that these awards and recognitions are nice, maybe not quite as important as the financial and operational results that we will talk about in just a moment. We do not see it that way.

Speaker #4: I'm also pleased to report to you that for the first time, Constellation has been recognized as a world's top business for people with disabilities.

Speaker #4: And finally, we were extraordinarily pleased to receive the points of light honor as one of the nation's 50 most community-minded companies based upon the positive impact we make every day through volunteerism and investment in our communities.

Speaker #4: Now, I know that some may think that these awards and recognitions are nice, but maybe not quite as important as the financial and operational results that we'll talk about in just a moment.

Speaker #4: We don't see it that way. We think our values are the most important things. And when I talk in a few minutes about what it takes to restart Crane and get the overwhelming public support, which we have, and do it in a place known for the worst moment in U.S.

Joe Dominguez: We think our values are the most important things. When I talk in a few minutes about what it takes to restart Crane and get the overwhelming public support, which we have, and do in a place known for the worst moment in US nuclear history, then I think you will come to understand why we believe our durable community values matter so much to our business. Turning to the quarter and our financial results, we delivered Q2 GAAP earnings of $1.42 per share and adjusted operating earnings of $2.55 per share. Given our team’s strong commercial and operational performance year to date, we are increasing our operational earnings guidance range by $0.50 to $11.50 to $12.50 per share. Our midpoint is now what used to be the top end of the guide, we still have many opportunities to deliver more value this year.

Speaker #4: nuclear history, then I think you will come to understand why we believe our durable community values matter so much to our business. Now, turning to the quarter and our financial results, we delivered second quarter GAAP earnings of $1.42 per share, an adjusted operating earnings of $2.55 per share.

Speaker #4: Given our team's strong commercial and operational performance year to date, we are increasing our operational earnings guidance range by 50 cents to $11.50 to $12.50 per share.

Speaker #4: Our midpoint is now what used to be the top end of the guide, and we still have many opportunities to deliver more value this year.

Speaker #4: Shane will talk through the details in his remarks. Since our business and earnings outlook in March we have made meaningful progress across several key focus areas.

Joe Dominguez: Shane will talk through the details in his remarks. Since our business and earnings outlook in March, we have made meaningful progress across several key focus areas, reinforcing our confidence in delivering long-term value for our owners. In March, I candidly shared that we were behind our targeted timeline for completing long-term agreements due to new uncertainty in the regulatory environment. I told you that we were hopeful that PJM, under FERC's oversight, would move quickly to provide needed clarity so that work critical to our nation's future might proceed forward. I know that many were skeptical that reforms could be accomplished quickly and feared that the PJM process would drag on for years, something we have unfortunately seen in the past. Those concerns have not materialized. Instead, we are seeing PJM, prompted by FERC, move at the necessary speed.

Speaker #4: Reinforcing our confidence in delivering long-term value for our owners. In March, I candidly shared that we were behind our targeted timeline for completing long-term agreements due to new uncertainty in the I told you that we were hopeful that PJM, under FERC's oversight, would move quickly to provide needed clarity so that work critical to our nation's future might proceed forward.

Speaker #4: I know that many were skeptical that reforms could be accomplished quickly and feared that the PJM process would drag on for years. Something we have, unfortunately, seen in the past.

Speaker #4: But those concerns have not materialized. Instead, we are seeing PJM, prompted by FERC, move at the— And while additional work remains for PJM to get the details right, I am pleased to report that the progress is giving customers greater confidence to evaluate long-term solutions and move forward with planning and contracting activities.

Joe Dominguez: While additional work remains for PJM to get the details right, I am pleased to report that the progress is giving customers greater confidence to evaluate long-term solutions and move forward with planning and contracting activities. Since the last call, we have signed approximately 920 MW of long-term nuclear deals that are consistent with our view of long-term value. These contracts have an average duration of 18 and a half years and are with investment-grade customers. Now, as we talked about, and as I explained to you last quarter, we will continue to follow our customer's lead on how and when their agreements are disclosed so that they may protect their procurement strategies. Turning to Crane, important progress has also been made on the restart.

Speaker #4: Since the last call, we have signed approximately 920 megawatts of long-term nuclear deals that are consistent with our view of long-term value. These contracts have an average duration of 18 and a half years and are with investment-grade customers.

Speaker #4: Now, as we talked about, and as I explained to you last quarter, we will continue to follow our customers' lead on how and when their agreements are disclosed, so that they may protect their procurement strategies.

Speaker #4: Turning to Crane, important progress has also been made on the restart. During the quarter, the NRC approved the Crane New Fuel Licensing Amendment request, clearing the path for the receipt of new fuel and representing another significant milestone towards returning the facility to service in the second half of 2027.

Joe Dominguez: During the quarter, the NRC approved the Crane new fuel licensing amendment request, clearing the path for the receipt of new fuel and representing another significant milestone towards returning the facility to service in H2 2027. In addition, FERC granted the waiver request to transfer the capacity injection rights from our Eddystone facility, which is slated to close, to Crane. We expect that this transfer will help clear many of the transmission contingencies identified in PJM's initial deliverability review and will pave the way for Crane to deliver full value to the grid. Further strengthening the value and unique long-term durability of our nuclear fleet, we continue to extend the lives of our clean energy centers. During the quarter, we filed subsequent license renewal applications for both the Ginna and Nine Mile Point 1 clean energy centers.

Speaker #4: In addition, FERC granted the waiver request to transfer the capacity injection rights from our Eddystone facility, which is stated slated to close to Crane.

Speaker #4: We expect that this transfer will help clear many of the transmission contingencies identified in PJM's initial deliverability review and will pave the way for Crane to deliver full value to the grid.

Speaker #4: Further strengthening the value and unique long-term durability of our nuclear fleet we continue to extend the lives of our clean energy centers. During the quarter, we filed subsequent license renewal applications for both the Guinea and Nine Mile One Point Nine Mile Point One Clean Energy Centers.

Speaker #4: These extensions were made possible by Governor Hochul and the New York Service Commission recognizing the value of clean, reliable nuclear energy and extending the ZEC program.

Joe Dominguez: These extensions were made possible by Governor Hochul and the New York Public Service Commission, recognizing the value of clean, reliable nuclear energy and extending the ZEC program, advancing our strategy to preserve these critical assets for New York and for America. As a reminder, these programs and license extensions mean that Constellation is truly in a unique space, with the vast majority of our power generation secured through 2050 and beyond. Integration with Calpine is progressing well, and we are seeing strong collaboration across the combined organization as teams identify opportunities to create additional value for you. In addition, we're pleased to have reached an agreement with LS Power to sell the Brazos Valley Energy Center. Following regulatory approvals and closing, the sale will satisfy the final DOJ requirement tied to the Calpine acquisition.

Speaker #4: Advancing our strategy to preserve these critical assets for New York and for America. As a reminder, these programs and license extensions mean that Constellation is truly in a unique space.

Speaker #4: With the vast majority of our power generation secured through 2050 and beyond. Integration with Calpine is progressing well. And we are seeing strong collaboration across the combined organization as teams identify opportunities to create additional value for you.

Speaker #4: In addition, we're pleased to have reached an agreement with LS Power to sell the Brazos Valley Energy Center. Following regulatory approvals and closing, the sale will satisfy the final DOJ requirement tied to the Calpine acquisition.

Speaker #4: The fact that smart private equity buyers with long track records in competitive power markets are willing to pay over $1,400 a kW for Texas assets in a soft ERCOT market should tell you everything you need to know about the value of the efficient gas fleet that we now own.

Joe Dominguez: The fact that smart private equity buyers with long track records in competitive power markets are willing to pay over $1,400 a kW for Texas assets in a soft ERCOT market should tell you everything you need to know about the value of the efficient gas fleet that we now own. Finally, we continue to execute on our capital allocation strategy. Year to date, we have deployed approximately USD 2.2 billion toward opportunistic and accretive share repurchases. Shane will talk about it, but we already are seeing upside to our earnings from these buybacks. Turning to slide six. As I mentioned at the outset, we executed this quarter on 920 MW of long-term contracts for nuclear power. While I can't disclose pricing, what I can say is that the deals recognize the value of existing clean and reliable nuclear energy as a premium product.

Speaker #4: Finally, we continue to execute on our capital allocation strategy. Year to date, we have deployed approximately $2.2 billion toward opportunistic and accretive share repurchases.

Speaker #4: Shane will talk about it, but we already are seeing upside to our earnings from these buybacks. Turning to slide 6, as I mentioned at the outset, we executed this quarter on 920 megawatts of long-term contracts for nuclear power.

Speaker #4: While I can't disclose pricing, what I can say is that the deals recognize the value of existing clean and reliable nuclear energy as a premium product.

Speaker #4: After a successful quarter in signing deals, we have now contracted roughly 30% of our clean base load output under long-term agreements and our transactional pipeline for future deals is both robust and active.

Joe Dominguez: After a successful quarter in signing deals, we have now contracted roughly 30% of our clean base load output under long-term agreements, and our transactional pipeline for future deals is both robust and active. Taking an additional moment on the deal that was announced this quarter with our partner, Walmart, I wanted to mention that Walmart has a long history of supporting clean energy development. This agreement represents their first nuclear power purchase agreement and the first transaction of its kind for a major retailer. Walmart is helping to define how corporate customers think about nuclear energy, reflecting a growing recognition that achieving ambitious decarbonization goals requires access to around-the-clock carbon-free generation. This transaction is only the beginning of a wonderful partnership with this iconic American company.

Speaker #4: Taking an additional moment on the deal that was announced this quarter with our partner Walmart, I wanted to mention that Walmart has a long history of supporting clean energy development.

Speaker #4: But this agreement represents their first nuclear power purchase agreement and the first transaction of its kind for a major retailer. Walmart is helping to define how corporate customers think about nuclear energy reflecting a growing recognition that achieving ambitious decarbonization goals requires access to around-the-clock carbon-free generation.

Speaker #4: This transaction is only the beginning of a wonderful partnership with this iconic American company. A Walmart deal taken together with the others this quarter reinforces the broad appeal of our products and capabilities to customers of all kinds.

Joe Dominguez: The Walmart deal, taken together with the others this quarter, reinforces the broad appeal of our products and capabilities to customers of all kinds. Moving to slide seven, I want to provide some additional context on regulatory developments that are improving the backdrop for customer contracting. In June, we received strong validation from FERC, which made clear its desire to move more quickly in establishing new pathways for serving large loads. FERC ordered every RTO to justify how their existing tariffs provide for the just and reasonable interconnection of large loads to the grid or propose revisions to their tariffs. FERC also called balls and strikes on the rules for new transmission services for co-located loads and directed PJM to explain why it cannot make those services available more quickly.

Speaker #4: Moving to slide 7, I want to provide some additional context on regulatory developments that are improving the backdrop for customer contracting. In June, we received strong validation from FERC, which made clear its desire to move more quickly in establishing new pathways for serving large loads.

Speaker #4: FERC ordered every RTO to justify how their existing tariffs provide for the just and reasonable interconnection of large loads to the grid or proposed revisions to their tariffs.

Speaker #4: FERC also called balls and strikes on the rules for new transmission services for co-located loads and directed PJM to explain why it cannot make those services available more quickly.

Speaker #4: Beyond its support for exploring co-located solutions and pushing for speed in resolution, FERC has also demonstrated a willingness to consider innovative approaches that remove barriers to economic growth, including studying generation and load together at a common point of interconnection.

Joe Dominguez: Beyond its support for exploring co-located solutions and pushing for speed in resolution, FERC has also demonstrated a willingness to consider innovative approaches that remove barriers to economic growth, including studying generation and load together at a common point of interconnection, something that Constellation has advocated. Initiatives like these could create a meaningful pathway for customers to access affordable solutions more quickly while maintaining reliability and supporting broader economic development objectives. As these frameworks develop, the value of existing generation and infrastructure will become increasingly apparent. Our fleet is uniquely positioned to help meet these objectives by leveraging assets that are already operating, connected to the grid, and capable of supporting growing customer demand more efficiently than many other alternatives, even as we bring on new capacity to meet the growing demand.

Speaker #4: Something that Constellation has advocated. Initiatives like these could create a meaningful pathway for customers to access affordable solutions more quickly, while maintaining reliability and supporting broader economic development objectives.

Speaker #4: As these frameworks develop, the value of existing generation and infrastructure will become increasingly apparent. Our fleet is uniquely positioned to help meet these objectives by leveraging assets that are already operating connected to the grid and capable of supporting growing customer demand more efficiently than many other alternatives, even as we bring on new capacity to meet the growing demand.

Speaker #4: Last week, PJM released proposals for the reliability backstop procurement, or RBP. And the interim resource adequacy service, or IRAS, while aspects excuse me, while aspects of PJM's proposals need clarification and further consideration, we are now on a path for resolution and certainty.

Joe Dominguez: Last week, PJM released proposals for the Reliability Backstop Procurement, or RBP, and the Interim Resource Adequacy Service, or IRAS. While aspects of PJM's proposals need clarification and further consideration, we are now on a path for resolution and certainty, which will allow customers and suppliers to make investment decisions with greater visibility and confidence in the market rules. PJM has also established a clear target of 6.8 gigawatts for the RBP, and we are currently in the bilateral matchmaking process, which is intended to pair customers with new supply and reduce the amount of capacity ultimately required through certain central procurement. PJM has proposed conducting the procurement auction this fall, with results expected by year-end. Overall, we are pleased by the pace of progress.

Speaker #4: Which will allow customers and suppliers to make investment decisions with greater visibility and confidence in the market rules. PJM has also established a clear target of $6.8 gigawatts for the RBP and we are currently in the bilateral matchmaking process, which is intended to pair customers with new supply and reduce the amount of capacity ultimately required through certain central procurement.

Speaker #4: PJM has proposed conducting the procurement auction this fall, with results expected by year-end. Overall, we are pleased by the pace of progress. As those who have followed PJM for years understand, the speed at which FERC is requiring PJM to move is unprecedented, and many of the concerns we raised earlier this year on that front are being addressed.

Joe Dominguez: As those who have followed PJM for years understand, the speed at which FERC is requiring PJM to move is unprecedented, and many of the concerns we raised earlier this year on that front are being addressed. On a parallel path with the PJM and FERC processes, Constellation and other stakeholders are urging EPA to make clear that any curtailments ultimately directed by FERC tariffs should be excluded from the 50-hour annual limit for the use of backup generators at data centers. This could unlock meaningful optionality for our data economy customers while preserving reliability and reducing energy costs for all customers. Remember what we've discussed before. We have plenty of unused capacity in generation and in the wires grid over 99% of the hours of the year. We have a peak capacity concern, not an energy concern.

Speaker #4: On a parallel path with the PJM and FERC processes, Constellation and other stakeholders are urging EPA to make clear that any curtailments ultimately directed by FERC tariffs should be excluded from the 50-hour annual limit for the use of backup generators at data centers.

Speaker #4: This could unlock meaningful optionality for our data economy customers while preserving reliability and reducing energy costs for all customers. Remember what we've discussed before.

Speaker #4: We have plenty of unused capacity in generation and in the wires grid over 99% of the hours of the year. We have a peak capacity concern, not an energy concern.

Speaker #4: The secret sauce here is to deal with the handful of peak hours that present reliability concerns and at the same time to harvest the stranded capacity that exists every other hour of the year.

Joe Dominguez: The secret sauce here is to deal with the handful of peak hours that present reliability concerns, and at the same time, to harvest the stranded capacity that exists every other hour of the year. If we do this right, then we can actually bring on these critical technologies and lower energy costs for everyday families and businesses. In conclusion, we still have some wood to chop here, but the direction and the speed are very promising. We urge PJM to keep it up. Turning to slide eight. I'm going to conclude my remarks on this slide and return back to the point that I made at the top about business values and our focus on communities. This slide talks about the fantastic progress we've made at Crane by creating a win-win-win for Pennsylvanians, the local communities, and our customer. I'm not going to drain the slide.

Speaker #4: If we do this right, then we can actually bring on these critical technologies and lower energy costs for everyday families and businesses. In conclusion, we still have some wood to chop here.

Speaker #4: But the direction and the speed are very promising. We urge PJM to keep it up. Turning to slide 8, I'm going to conclude my remarks on this slide and return back to the point that I made at the top about business values and our focus on communities.

Speaker #4: This slide talks about the fantastic progress we've made at CRAIN by creating a win-win-win for Pennsylvanians, the local communities, and our customer. I'm not going to drain the slide.

Speaker #4: You could read the words yourself. Instead, I want to draw a parallel between what it takes to build, operate, and start nuclear plants with what it takes to build, operate, and start data centers.

Joe Dominguez: You could read the words yourself. Instead, I want to draw a parallel between what it takes to build, operate, and start nuclear plants with what it takes to build, operate, and start data centers. The basic point that I want you to consider is this: like in the case of nuclear, the public reaction we are seeing to data centers in terms of moratoriums or opposition in places can be strong at times. No one can deny that. As the Crane example shows, the concerns underlying the opposition to data centers are far from unsolvable. Indeed, I would suggest to you that if we can restart Crane at Three Mile Island and earn overwhelming political and public support, then we can certainly earn the public support to build a 21st century data economy in our communities.

Speaker #4: And the basic point that I want you to consider is this. Like in the case of nuclear, the public reaction we are seeing to data centers in terms of moratoriums or opposition in places can be strong at times.

Speaker #4: No one can deny that. But as the CRAIN example shows, the concerns underlying the opposition to data centers are far from unsolvable. Indeed, I would suggest to you that if we can restart CRAIN, at Three Mile Island, and earn overwhelming political and public support, then we can certainly earn the public support to build a 21st-century data economy in our communities.

Speaker #4: It comes down to the trust we earn with the right business values focused on making our communities better and stronger. It's all about the things on this slide.

Joe Dominguez: It comes down to the trust we earn with the right business values focused on making our communities better and stronger. It's all about the things on this slide, jobs, tax base, and community contribution. When it's done right, it works. With that, I'll turn it over to Shane.

Speaker #4: Jobs, tax base, and community contribution. When it's done right, it works. With that, I'll turn it over to Shane.

Speaker #2: Thanks, Joe. And good morning, everyone. Turning to slide 9, we earned $1.42 in gap earnings per share and $2.55 in adjusted operating earnings per share in the second quarter.

Shane Smith: Thanks, Joe, and good morning, everyone. Turning to slide nine. We earned $1.42 in GAAP earnings per share and $2.55 in adjusted operating earnings per share in Q2, which is $0.64 higher than Q2 last year. The higher year-over-year quarterly results are primarily attributable to accretion from Calpine, higher capacity prices in PJM, and strong performance from our commercial business that has once again delivered value through higher realized customer margins and from portfolio optimization during periods of volatility. This strong performance has contributed to our improved full-year outlook, which I will cover shortly. Our favorable quarterly drivers were partially offset by higher planned nuclear refueling outage days and the timing of revenue recognition from the Illinois ZEC program. As we've discussed on prior Q2 calls, Illinois ZEC revenue timing can vary year to year.

Speaker #2: Which is 64 cents higher than the second quarter last year. The higher year-over-year quarterly results are primarily attributable to accretion from Calpine higher capacity prices in PJM and strong performance from our commercial business that has once again delivered value through higher realized customer margins and from portfolio optimization during periods of volatility.

Speaker #2: This strong performance has contributed to our improved full-year outlook, which I will cover shortly. Our favorable quarterly drivers were partially offset by higher planned nuclear refueling outage days and the timing of revenue recognition from the Illinois ZEC program.

Speaker #2: As we've discussed on prior second quarter calls, Illinois ZEC revenue timing can vary year to year. This quarter, we recognized 85 million dollars of banked credits compared with 200 million dollars last year.

Shane Smith: This Q2, we recognized $85 million of banked credits, compared with $200 million last year. This timing item was already reflected in our 2026 guidance and has no impact to full-year results. This true-up also reflects the final planning year adjustment before the Illinois ZEC program ends in May 2027. Slide 19 of the appendix provides additional details on the program. Moving to slide 10. Our nuclear fleet delivered a 93% capacity factor and generated 40 TWh of reliable low-carbon electricity while completing six planned refueling outages. As expected, the quarter included additional planned outage days, which reduced our capacity factor by 1.8% compared to Q2 2025. Our 23-day average refueling outage duration in the quarter included the successful implementation of our turbine upgrade at Byron Unit 1, and even with that longer outage, the team still outperformed the industry average duration by 40%.

Speaker #2: This timing item was already reflected in our 2026 guidance and has no impact to full-year results. This true-up also reflects the final planning year adjustment before the Illinois ZEC program ends in May of 2027.

Speaker #2: Slide 19 of the appendix provides additional details on the program. Moving to slide 10, our nuclear fleet delivered a 93% capacity factor and generated 40 terawatt-hours of reliable, low-carbon electricity while completing six planned refueling outages.

Speaker #2: As expected, the quarter included additional planned outage days, which reduced our capacity factor by 1.8% compared to the second quarter of 2025. Our 23-day average refueling outage duration in the quarter included the successful implementation of our turbine upgrade at Byron Unit 1, and even with that longer outage, the team still outperformed the industry average duration by 40%.

Speaker #2: This outstanding result, in a quarter with elevated planned refueling activity, speaks to the consistency discipline and expertise of our nuclear operations team that performs this work efficiently and, most importantly, safely.

Shane Smith: This outstanding result in a quarter with elevated planned refueling activity speaks to the consistency, discipline, and expertise of our nuclear operations team that performs this work efficiently and, most importantly, safely. Turning to slide 11. We are raising our full-year adjusted operating earnings guidance range to $11.50 to $12.50 per share, up from our prior range of $11 to $12 per share. Strong commercial execution, combined with the benefits of our disciplined capital allocation, gives us the confidence to raise the midpoint of our full-year guidance by $0.50 per share just halfway through the year. We will revisit our full-year outlook in the Q3 call as we put the summer behind us. We have reflected these updates in the modeling appendix on slide 25. Turning to slide 12.

Speaker #2: Turning to slide 11, we are raising our full-year adjusted operating earnings guidance range to $11.50 per share, to $12.50 per share, up from our prior range of $11 to $12 per share.

Speaker #2: Strong commercial execution, combined with the benefits of our discipline capital allocation, gives us the confidence to raise the midpoint of our full-year guidance by 50 cents per share just halfway through the year.

Speaker #2: We will revisit our full-year outlook in the Q3 call as we put the summer behind us. We have reflected these updates in the modeling appendix on slide 25.

Speaker #2: Turning to slide 12, we continue to operate from a position of financial strength, supported by our strong investment-grade credit ratings. That financial strength gives us flexibility to best serve our customers invest in our business and also return capital to shareholders in a disciplined way.

Shane Smith: We continue to operate from a position of financial strength, supported by our strong investment-grade credit ratings. Financial strength gives us flexibility to best serve our customers, invest in our business, and also return capital to shareholders in a disciplined way. Since the Q1 call, we returned just under $2 billion of capital to our owners through share repurchases. Together, with the $335 million we shared on the Q1 call, we have allocated about $2.2 billion to accretive share repurchase in the four months since our business and earnings outlook at the end of March. We will continue to be opportunistic as we deploy the remaining $2.8 billion of available authorization. Today, after a very competitive process, we announced an agreement with LS Power to sell the Brazos Valley Energy Center for $860 million or about $1,420 per kilowatt.

Speaker #2: Since the first quarter call, we returned just under $2 billion of capital to our owners through share repurchases. Together, with the 335 million dollars we shared on the Q1 call, we have allocated about 2.2 billion dollars to a creative share repurchase in the four months since our business and earnings outlook at the end of March.

Speaker #2: We will continue to be opportunistic as we deploy the remaining 2.8 billion dollars of available authorization. Today, after a very competitive process, we announced an agreement with LS Power to sell the Brazos Valley Energy Center for $860 million.

Speaker #2: We're about 1420 per kilowatt. It was great to see such a high level of interest for the asset and in spite of recent ERCOT weakness.

Shane Smith: It was great to see such a high level of interest for the asset in spite of recent ERCOT weakness. It was clear from a very competitive process that buyers recognized the long-term value of gas-fired assets with the potential for even higher utilization rates. Once approved, this divestiture will satisfy the remaining DOJ settlement obligations for the Calpine acquisition. In total, the assets that were required to be divested by the DOJ are expected to generate approximately $5.9 billion in gross proceeds, which at a nearly $1,200 per kW basis, reflects a healthy premium to the implied $960 per kilowatt purchase price of the Calpine assets. Moving to slide 13. As discussed in March, we see meaningful opportunities to grow our earnings and free cash flow over time. We have already started translating a few of those growth levers into tangible contributions.

Speaker #2: It was clear from a very competitive process that buyers recognized the long-term value of gas-fired assets with the potential for even higher utilization rates.

Speaker #2: Once approved, this divestiture will satisfy the remaining DOJ settlement obligations for the Calpine acquisition. In total, the assets that were required to be divested by the DOJ are expected to generate approximately $5.9 billion in gross proceeds, which at a nearly $1,200 per KW basis reflects a healthy premium to the implied $960 per kilowatt purchase price of the Calpine assets.

Speaker #2: Moving to slide 13, as discussed in March, we see meaningful opportunities to grow our earnings and free cash flow over time. We have already started translating a few of those growth levers into tangible contributions.

Speaker #2: The sensitivities provided in March were informed by active discussions across a diverse set of customers. Now that we have executed nearly one gigawatt of nuclear PPAs, within the range contemplated by this view, we thought it was worth revisiting this table.

Shane Smith: The sensitivities provided in March were informed by active discussions across a diverse set of customers. Now that we have executed nearly 1 GW of nuclear PPAs within the range contemplated by this view, we thought it was worth revisiting this table. While the agreements announced today have later start dates and are not expected to materially impact 2029 earnings, they provide additional visibility into sustained growth in our base earnings over time. Separately, we are also updating our 2029 capital allocation sensitivity range to reflect the share repurchases we have completed to date. The updated range now includes a floor of $0.20 per share with potential of upside of greater than $0.75 per share.

Speaker #2: While the agreements announced today have later start dates and are not expected to materially impact 2029 earnings, they provide additional visibility into sustained growth in our base earnings over time.

Speaker #2: Separately, we are also updating our 2029 capital allocation sensitivity range to reflect the share repurchases we have completed to date. The updated range now includes a floor of 20 cents per share, with potential of upside of greater than 75 cents per share.

Speaker #2: The low end reflects the benefit of the repurchases already completed, while the high end reflects the meaningful optionality we still have under our buyback authorization and our ability to continue deploying capital when we see attractive growth opportunities.

Shane Smith: Last, I would also like to highlight an update to the nuclear production tax credit as shown on slide 17 in the appendix. Following the IRS publication of the 2025 inflation adjustment, we updated our forward PTC strike price assumptions. Incorporating the 2.8% adjustment for 2025 and continuing to assume 2% inflation annually in 2026 and beyond, the projected 2030 PTC strike price will increase from $49.88 to $50.88 per MWh. This change will increase our view of 2030 base earnings by approximately $0.30 per share.

Speaker #2: Last, I would also like to highlight an update to the nuclear production tax credit as shown on slide 17 in the appendix. Following the IRS publication, of the 2025 inflation adjustment, we updated our forward PTC strike price assumptions.

Speaker #2: Incorporating the 2.8% adjustment for 2025 and continuing to assume 2% inflation annually in 2026 and beyond, the projected 2030 PTC strike price will increase from $49.88 to $50.88 per megawatt hour.

Speaker #2: This change will increase our view of 2030 base earnings by approximately 30 cents per share. More broadly, the PTC's inflation linkage continues to provide upside to our base earnings outlook should inflation exceed our 2% long-term assumption, and is another factor supporting our goal of sustaining double-digit base earnings growth into the 2030s.

Shane Smith: More broadly, the PTC's inflation linkage continues to provide upside to our base earnings outlook should inflation exceed our 2% long-term assumption and is another factor supporting our goal of sustaining double-digit base earnings growth into the 2030s. With that, I'll turn the call back to Joe.

Speaker #2: With that, I'll turn the call back to Joe.

Speaker #1: Thanks, Shane. To close out today in practical terms, we're seeing the benefits of speed, in the regulatory process. Our customers are gaining more certainty every day, and we're hopeful that PJM and FERC could remain on track and deliver regulatory clarity by year-end.

Joe Dominguez: Thanks, Shane. To close out today, in practical terms, we're seeing the benefits of speed in the regulatory process. Our customers are gaining more certainty every day. We're hopeful that PJM and FERC can remain on track and deliver regulatory clarity by year-end. Our team also is actively engaged with customers and policymakers to explore different options for connecting new large load to the grid. Our conversations are strong. We're focused on what we do best: operating our assets at world-class levels, helping our customers achieve their energy and sustainability objectives, and creating long-term value for our owners, customers, and the communities where we live and work. Thanks for your time today. The team is now ready for your questions.

Speaker #1: Our team also is actively engaged with customers and policymakers to explore different options for connecting new large load to the grid, and our conversations are strong.

Speaker #1: We're focused on what we do best: operating our assets at world-class levels, helping our customers achieve their energy and sustainability objectives, and creating long-term value for our owners, customers, and the communities where we live and work.

Speaker #1: Thanks for your time today, and the team is now ready for your questions.

Speaker #3: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star 11 again.

Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Nicholas Campanella with Barclays. Your line is open.

Speaker #3: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Nick Campanella with Barclays. Your line is open.

Speaker #1: Good morning, Nick.

Joe Dominguez: Morning, Nick.

Shane Smith: Hey.

Speaker #4: Hey, good morning. Thanks for taking my questions. So, it's great to see the new long-term nuclear deal. I guess, can you talk about whether it's acceptable in your terms of long-term value, just price and term?

Shane Smith: Good morning. Thanks for taking my questions. It's great to see the new long-term nuclear deal. Can you kind of talk about if it's acceptable in your terms of long-term value, just price and term? How do we think about the customer? It sounds like it's a hyperscaler, but is this just more of a traditional C&I and is it one deal that's incremental to Walmart? Just how to think about that. Thanks.

Nick Campanella: Good morning. Thanks for taking my questions. It's great to see the new long-term nuclear deal. Can you kind of talk about if it's acceptable in your terms of long-term value, just price and term? How do we think about the customer? It sounds like it's a hyperscaler, but is this just more of a traditional C&I and is it one deal that's incremental to Walmart? Just how to think about that. Thanks.

Speaker #4: I guess how do we think about the customer? It sounds like it's a hyperscaler, but is this just more of a traditional CNI? And is it one deal that's incremental to Walmart?

Speaker #4: Just how to think about that. Thanks.

Speaker #1: Yeah, look, I'm not going to as I said, I'm going to adhere to the rule that we're going to let the customers explain their deals and announce them.

Joe Dominguez: As I said, I'm going to adhere to the rule that we're going to let the customers explain their deals and announce them to the extent that they choose to. Nick, it is consistent with our view of long-term value for the nuclear fleet. I think this is one of many opportunities we're continuing to see in the market.

Speaker #1: To the extent that they choose to. But Nick, it is consistent with our view of long-term value. For the nuclear fleet, and I think this is one of many opportunities we're continuing to see in the market.

Speaker #4: Okay, great. And then you mentioned being engaged in the bilateral process and PJM. Can you just give detail? Obviously, that'd be new capacity that would net against the six gigawatt figure, but could hybrid deals be in play if you could work to address the non-peak issues?

Nicholas Campanella: Okay, great. You mentioned being engaged in the bilateral process in PJM. Can you just give detail? Obviously, that'd be new capacity that would net against the 6 gigawatt figure, but could hybrid deals be in play if you could work to address the non-peak issues? Maybe talk about the 5 gigawatts of new capacity that could be eligible that you highlighted on the last call. Thank you.

Nick Campanella: Okay, great. You mentioned being engaged in the bilateral process in PJM. Can you just give detail? Obviously, that'd be new capacity that would net against the 6 gigawatt figure, but could hybrid deals be in play if you could work to address the non-peak issues? Maybe talk about the 5 gigawatts of new capacity that could be eligible that you highlighted on the last call. Thank you.

Speaker #4: And maybe talk about the five gigawatts of new capacity that could be eligible that you highlighted on the last call. Thank you.

Speaker #1: Yeah, I'm going to Dan Eggers is kind of overseeing a bit of that, so I'm going to ask him to chime in here but look, the process, the bilateral process is confidential and we'll keep it that way.

Joe Dominguez: Dan Eggers is kind of overseeing a bit of that, so I'm going to ask him to chime in here. The bilateral process is confidential, and we'll keep it that way. You should assume that all of the opportunities we have to add megawatts are being talked to with customers, in combination with our existing capabilities. Think about it, I mentioned this on the call. The best outcome for America is to take advantage of the stranded capacity that exists in the US grid. That's wires and generation capacity. That's fastest, and it also reduces costs. How does it reduce costs? We know on the wire side, all the fixed cost elements of the system get spread out over more hours of usage. That brings the per hour usage rate down. That's how it works on the wire side.

Speaker #1: But you should assume that all of the opportunities we have to add megawatts are being talked to with customers in combination with our existing capabilities.

Speaker #1: Think about it. I mentioned this on the call. The best outcome for America is to take advantage of the stranded capacity that exists in the US grid.

Speaker #1: That's wires and generation capacity. That's fastest and it also reduces costs. How does it reduce costs? We know on the wire side, all the fixed cost elements of the system get spread out over more hours of usage.

Speaker #1: That brings the per-hour usage rate down. So that's how it works on the wire side. On the energy side, in competitive markets, what it means is it puts downward pressure on capacity prices over time.

Joe Dominguez: On the energy side, in competitive markets, what it means is it puts downward pressure on capacity prices over time. Remember, the capacity price that generators seek in the PJM market, or the so-called missing money, is the difference between what it costs them to build and operate and what they're receiving in energy markets. The more the existing generators are fully utilized by customers, the less dependent they are on a big capacity payment. We've seen that over the years. As energy and ancillary services go up, capacity prices go down. All of the incentives here for everyday families and businesses are aligned with tapping into this stranded capacity. Our customers know that. At the same time, we do have to manage the peaks. That could be managed with batteries, with demand response, with peaking resources. Other forms of generation could be a part of that.

Speaker #1: Remember, the capacity price that generators seek in the PJM market or the so-called missing money is the difference between what it costs them to build and operate and what they're receiving in energy markets.

Speaker #1: So the more the existing generators fully utilize efficiently the are fully utilized by customers, the less dependent they are on a big capacity payment.

Speaker #1: We've seen that over the years. As energy and ancillary services go up, capacity prices go down. So all of the incentives here for everyday families and businesses are aligned with tapping into this stranded capacity.

Speaker #1: Our customers know that. At the same time, we do have to manage the peaks. That could be managed with batteries, with the man response, with peaking resources, other forms of generation could be a part of that, but they still have to figure out not just the peak, but what they're doing every other hour of the year.

Joe Dominguez: They still have to figure out not just the peak, but what they're doing every other hour of the year. That's where our fleet becomes extraordinarily valuable, because it's a fixed price, clean energy resource that they could count on for decades, and that's what they want. This kind of idea or this notion that existing and new are completely bifurcated and don't come together is just not the reality of the way customers look at their procurement strategies. The backstop auction is a part of that, but it's also part of what we're doing every single day in our conversations with customers.

Speaker #1: That's where our fleet becomes extraordinarily valuable because it's a fixed price clean energy resource that they could count on for decades. And that's what they want.

Speaker #1: So this kind of idea where we're trying to or this notion that existing and new or completely bifurcated and don't come together is just not the reality of the way customers look at their procurement strategies.

Speaker #1: The backstop auction is a part of that, but it's also part of what we're doing every single day in our conversations with customers.

Speaker #4: Thanks for your thoughts.

Nicholas Campanella: Thanks for your thoughts.

Nick Campanella: Thanks for your thoughts.

Joe Dominguez: Dan, I said I was going to hand it over to you, then I went on and talked about it for two minutes.

Speaker #1: Dan, I said I was going to hand it over to you, and then I went on and talked about it for two minutes.

Dan L. Eggers: It was great. Nick, what I'll add to what Joe said is that when we put forward the MW in the interconnect queue, it was a full range, anywhere from upgrades on the baseload side, to batteries, to peakers. Our motivation here is consistently to provide our customers with what they need, right? Solutions are important. The bilateral market is clearly a place where we can get those things done. We'll see how that works out and what's left to address in the RBP when we get there.

Dan Eggers: It was great. Nick, what I'll add to what Joe said is that when we put forward the MW in the interconnect queue, it was a full range, anywhere from upgrades on the baseload side, to batteries, to peakers. Our motivation here is consistently to provide our customers with what they need, right? Solutions are important. The bilateral market is clearly a place where we can get those things done. We'll see how that works out and what's left to address in the RBP when we get there.

Speaker #5: It was great. I just, Nick, what I'll add to what Joe said, right, is that when we put forward the megawatts and the interconnect queue, it was a full range, and anywhere from up rates on the baseload side to batteries to peakers.

Speaker #5: Our motivation here is consistently to provide our customers with what they need, right? So solutions are important. The bilateral market is clearly a place where we can get those things done.

Speaker #5: We'll see how that works out and what's left to address in the RBP when we get there.

Speaker #1: Yeah, Nick, I'll just come back. Dan, thank you for that. And I'll just come back, Nick, to another big piece of this. I think what EPA ends up doing here and it's clarification process of its rules for the backup generation at sites is really going to matter.

Joe Dominguez: Nick, I'll just come back. Dan, thank you for that. I'll just come back, Nick, to another big piece of this. I think what EPA ends up doing here in its clarification process of its rules for the backup generation at sites is really going to matter. As resources have to be curtailed to address these few peak hours, the utilization of those backup generators may be the most effective way for us to kind of address the peak demand and do the things we're talking about in terms of really taking advantage of the stranded capacity in the system and lowering prices for customers.

Speaker #1: Because as resources have to be curtailed to address these few peak hours, the utilization of those backup generators may be the most effective way for us to kind of address the peak demand and do the things we're talking about in terms of really taking advantage of the stranded capacity in the system and lowering prices for customers.

Speaker #4: Thanks for all your thoughts.

Nicholas Campanella: Thanks for all your thoughts.

Nick Campanella: Thanks for all your thoughts.

Speaker #3: One moment for our next question. Our next question comes from Steve Fleischman with Wolf Research. Your line is open.

Operator: One moment for our next question. The next question comes from Steve Fleischmann with Wolfe Research. Your line is open.

Joe Dominguez: Hey, Steve. Good morning.

Speaker #1: Hey, Steve, good morning.

Speaker #6: Hey, good morning. So, a couple of questions on the new contracts. So, it's from nuclear. Most of your nuclear is in PJM, so should we assume these are in PJM?

Steve Fleishman: Hey, good morning. A couple questions on the new contracts. It's from nuclear, most of your nuclear is in PJM, so should we assume these are in PJM?

Joe Dominguez: Steve, we're not really going to pinpoint the origin, but yeah, you're right. Most of our stuff is in PJM.

Speaker #1: Steve, we're not really going to pinpoint the origin, but yeah, you're right. Most of our stuff is in PJM.

Steve Fleishman: Okay. Just, I think there have been some concern that, with the Connect & Manage or IRAS, whether customers can contract for existing. Whatever contracts you have they kind of incorporated whatever outcomes could come out of that?

Speaker #6: Okay. And just I think there have been some concern that with the connected manager IRS, whether customers can contract for existing. Whatever contracts you have, have they kind of incorporated kind of whatever outcomes could come out of that?

Speaker #1: Yeah, Steve, I think I probably droned on about it a bit too long just a moment ago, but let me give you a specific example.

Joe Dominguez: Yeah. Steve, I think I probably droned on about it a bit long just a moment ago, but let me give you a specific example. Let's suppose that in the context of Connect & Manage, a customer is deciding to use batteries or further rely on backup generation. They could do that and comply with what we see as the proposed rules going forward. They'll still need to buy power. They'll still need to buy energy, really, for all of the other hours they're not managing. The other 99%. That's where the existing resources are going to be able to provide quick solution sets. Otherwise, we'd be waiting for every data center to wait for every megawatt to be interconnected and built. If that's the case, we might as well hand over the keys to China.

Speaker #1: Let's suppose that in the context of connect and manage, a customer is deciding to use batteries. Or further rely on backup generation. They could do that and comply with what we see as the proposed rules going forward.

Speaker #1: But they'll still need the buy power. They'll still need to buy energy really for all of the other hours they're not managing. The other 99%.

Speaker #1: And so that's where the existing resources are going to be able to provide quick solution sets. Otherwise, we'd be waiting for every data center to wait for every megawatt to be interconnected and built.

Speaker #1: And if that's the case, we might as well hand over the keys to China. We're never going to build this economy if the outcome is going to be that we have to wait for new power plants to be built before we can connect any data centers.

Joe Dominguez: We're never going to build this economy if the outcome is going to be we got to wait for new power plants to be built before we can connect any data center. It's clearly not what FERC is thinking about. It's clearly not what Secretary Wright is thinking about. We're trying to do is manage the peaks. There's a lot of devices to do that. The bedrock of building out, at least this early phase of the data economy, is going to rely heavily, in my view, on existing generation as it has.

Speaker #1: It's clearly not what FERC is thinking about. It's clearly not what Secretary Reid is thinking about. What we're trying to do is manage the peaks.

Speaker #1: A lot of devices to do that. But the bedrock of building out at least this early phase of the data economy is going to rely heavily, in my view, on existing generation as it has.

Speaker #6: Okay. And then one more question. Just your range of the potential value of contracts—I mean, I think it's $20 to $50 a megawatt-hour.

Steve Fleishman: Okay, one more question. Just your range of the potential value of contracts, I think it's $20 to $50 a megawatt hour. It's pretty wide. Can you give us any sense of how things are trending within that range?

Speaker #6: It's pretty wide. Can you give us any sense of how things are trending within that range?

Shane Smith: Hey, Steve, it's Shane. Again, to the point of trying to protect customer sensitivity around the exact pricing, we're going to keep that range as it is. I think it is important to note that when we provided that disclosure in March, we were obviously talking with a number of different counterparties and the transactions all fit that profile. I think we're comfortable with keeping that sensitivity as it is.

Speaker #1: Hey, Steve, it's Shane. I mean, again, to the point of trying to protect customer sensitivity around the exact pricing, we're going to keep that range as it is.

Speaker #1: I mean, I think it is important to note that when we provided that disclosure in March, we were obviously talking with a number of different counterparties and the transactions all fit that profile.

Speaker #1: So I think we're comfortable with keeping that sensitivity as it is.

Speaker #6: Okay, great. Thank you.

Steve Fleishman: Okay, great. Thank you.

Speaker #1: Thanks, Steve.

Shane Smith: Thanks, Steve.

Speaker #3: One moment for our next question. Our next question comes from David Akara with Morgan Stanley. Your line is open.

Operator: One moment for our next question. Our next question comes from David Arcaro with Morgan Stanley. Your line is open.

Joe Dominguez: Morning, David.

Speaker #1: Morning, David.

David Arcaro: David, thanks so much. Morning. Was wondering if you could, maybe shifting over to the ERCOT market, wondering if you could give your view on the Batch Zero process. Do you have projects that you're partnering with in that program? Curious how you see that evolving from here.

Speaker #7: Thanks so much. Good morning. I was wondering if you could maybe shift over to the ERCOT market. I was wondering if you could give your view on the batch zero process.

Speaker #7: Do you have projects that you're partnering with in that program? And curious how you see that evolving from here?

Speaker #1: Yeah, let me turn it over to Dave Dardis for comments on that. The answer is yes. We also have by virtue of the acquisition of Calpine some projects that we're really early first movers, I think, in Texas where we've gotten through necessary approvals and we're proceeding with clients on it.

Joe Dominguez: Yeah, let me turn it over to Dave Dardis for comments on that. The answer is yes. We also have, by virtue of the acquisition of Calpine, some projects that we're really early first movers, I think, in Texas, where we've gotten through three necessary approvals and we're proceeding with clients on it. Some of our sites are in the Batch Zero process, we're evaluating what it means to answer the questions presented by the governor's letter. We're hoping to see activity here from ERCOT and the Texas PUCT to clarify those things soon. David, anything to add?

Speaker #1: But some of our sites are in the batch zero process. And so we're evaluating what it means to answer the questions presented by the governor's letter and we're hoping to see activity here from ERCOT and the Texas PUCT to clarify those things soon.

Speaker #1: David, anything to add?

Speaker #7: I guess all I would add is, I mean, Governor Abbott has been very clear that he's a champion for responsible data center development in the state of Texas.

Shane Smith: I guess all I'd add is, Governor Abbott has been very clear that he's a champion for responsible data center development in the state of Texas. He understands its importance for Texas competitiveness and ultimately American competitiveness. I don't think anything has changed there where he has said Texas should be the epicenter of AI. I don't think his view has changed on that. Like all these folks, particularly coming into the midterm elections, they want to be responsive to their constituents. Governor Abbott has asked for some pretty reasonable information to be included as part of Batch Zero. We think all that information can be provided quickly, and we don't think it should be a meaningful delay in ultimately moving through that process and getting answers quickly.

David Dardis: I guess all I'd add is, Governor Abbott has been very clear that he's a champion for responsible data center development in the state of Texas. He understands its importance for Texas competitiveness and ultimately American competitiveness. I don't think anything has changed there where he has said Texas should be the epicenter of AI. I don't think his view has changed on that. Like all these folks, particularly coming into the midterm elections, they want to be responsive to their constituents. Governor Abbott has asked for some pretty reasonable information to be included as part of Batch Zero. We think all that information can be provided quickly, and we don't think it should be a meaningful delay in ultimately moving through that process and getting answers quickly.

Speaker #7: He understands its importance for Texas competitiveness and ultimately American competitiveness. So I don't think anything has changed there where he has said, "Texas should be the epicenter of AI." I don't think his view has changed on that.

Speaker #7: But like all these folks, particularly coming into the midterm elections, they want to be responsive to their constituents. And Governor Abbott has asked for some pretty reasonable information to be included as part of batch zero.

Speaker #7: We think all that information can be provided quickly and we don't think it should be a meaningful delay. And ultimately, moving through that process and getting answers quickly.

Speaker #7: So we see this as a temporary measure here that we think is manageable by the industry and we look forward to working with the governor and the PUCT.

Shane Smith: We see this as a temporary measure here that we think is manageable by the industry, and we look forward to working with the governor and the PUCT.

David Dardis: We see this as a temporary measure here that we think is manageable by the industry, and we look forward to working with the governor and the PUCT.

Joe Dominguez: David, I think some of the answers here are going to be pretty darn good. There's some fanciful kind of numbers out there about the use of, for example, water and things. Some of the solutions that we're seeing for water usage from some of our clients put water consumption on the level of a restaurant or a large store for data centers. I think it's going to be an eye-opener to people. I think they're the right questions to be asked. Not all data centers are the same, so maybe this is intended to ferret out those that have been less efficient with water resources. I think there's a lot of good answers out there.

Speaker #1: And David, I think some of the answers here are going to be pretty darn good. There's some fanciful kind of numbers about out there about the use of, for example, water and things.

Speaker #1: Some of the solutions that we're seeing for water usage from some of our clients are to put water consumption on the level of a restaurant or a large store.

Speaker #1: For data centers. So, I think it's going to be an eye-opener to people. I think they're the right questions to be asked. Not all data centers are the same.

Speaker #1: So maybe this will is intended to ferret out those that have been less efficient. With water resources. But I think there's a lot of good answers out there.

Speaker #7: Absolutely. Yeah, it's really helpful. Thanks. And curious if you could also maybe give your view on the outlook for just on the power market side of things for ERCOT, outlook for power prices and spark spreads from here.

David Arcaro: Absolutely. Yeah, that's really helpful. Thanks. Curious if you could also maybe give your view on the outlook for just on the power market side of things for ERCOT outlook for power prices and spark spreads from here. The market's been under pressure, and curious your view on that and maybe also just the battery storage, how that's impacted the market from here too.

Speaker #7: The market's been under pressure. And curious your view on that and maybe also just the battery storage how that's impacting the market from here too.

Speaker #1: Yeah, thanks for the question, David. This was one that came up last quarter, I think, Jim. And Andrew talked a bit about it. What we're seeing in Texas is what we fully anticipated.

Joe Dominguez: Yeah. Thanks for the question, David. This was one that came up last quarter, and I think Jim and Andrew talked a bit about it. What we're seeing in Texas is what we fully anticipated. The battery storage and other things you're talking about started earlier, and they're arriving on the grid earlier than the load is. We talk a lot about data centers in Texas, but if you really take a look at where the construction of that build-out lies, you'd find that the vast majority of the data centers that are anticipated are still at some stage of construction and not on the grid. Andrew, I think, was the one that mentioned we would expect to see, dependent on weather, and if you don't have the right weather, you're not going to see a lot of price action in Texas.

Speaker #1: The battery storage and other things you're talking about started earlier and they're arriving on the grid earlier than the load is. And so we talk a lot about data centers in Texas.

Speaker #1: But if you really take a look at where the construction of that build-out lies, you'd find that the vast majority of the data centers that are anticipated are still at some stage of construction and not on the grid.

Speaker #1: So Andrew, I think, was the one that mentioned we would expect to see, dependent on weather, and if you don't have the right weather, you're not going to see a lot of price action in Texas.

Speaker #1: And that's what we've seen this year. It was completely, completely expected by us at Constellation. Completely expected by Calpine. And we positioned ourselves in the market accordingly.

Joe Dominguez: That's what we've seen this year. It was completely expected by us at Constellation, completely expected by Calpine, and we positioned ourselves in the market accordingly. I think the market will start to tighten up as the data centers get built and you start to see the market come into more or less equilibrium.

Speaker #1: I think the market will start to tighten up as the data centers get built. And you start to see the market come into more or less equilibrium.

Speaker #7: Excellent. Thanks so much.

David Arcaro: Excellent. Thanks so much.

Speaker #3: One moment for our next question. Our next question comes from Jeremy Tonnet with JP Morgan Securities. Your line is open.

Operator: One moment for our next question. Our next question comes from Jeremy Tonet with JPMorgan Securities LLC. Your line is open.

Speaker #8: Hi, good morning. Hi, thanks.

Jeremy Tonet: Hi, good morning.

Joe Dominguez: Hi, Jeremy. Good morning.

Shane Smith: Hi, thanks.

Speaker #1: Good morning to you.

Shane Smith: Good morning to you.

Speaker #8: Just want to turn to slide 13 if I could. And looking at the earnings and pre-cash flow before growth opportunities in '29. And I see the capital allocation is bolded on the table.

Jeremy Tonet: Just want to turn to slide 13, if I could. Looking at the earnings in free cash flow before growth opportunities in 2029, I see the capital allocation is bolded on the table. I think that might be new this quarter. I saw the share repurchases there, just wondering on the growth investment side, is there anything kind of new to think about with regards to this table here?

Speaker #8: I think that might be new this quarter. I saw the share repurchases there, but just wondering on the growth investment side, is there anything kind of new to think about with regards to this table here?

Joe Dominguez: Hey, Jeremy, it's Shane. In the initial disclosure back in March, we didn't give a floor, we kind of gave a $0.50 plus as an upside. What the $0.20 as a floor is meant to represent is the progress we've made in the last four months from those accretive, $2.2 billion of buybacks. Wanted to establish that floor. Naturally, that raises kind of our view of the higher end, and we'll see what's beyond. From a growth angle, obviously we continue to explore, there's nothing that we've disclosed that would directly inform that range at this time.

Speaker #1: Hey, Jeremy. It's Shane. So in the initial disclosure back in March, we gave we didn't give a floor. We kind of gave a 50 cent plus as an upside.

Speaker #1: And so what the 20 cent as a floor is meant to represent is the progress we've made in the last four months from those accretive 2.2 billion dollars of buyback.

Speaker #1: So, wanted to establish that floor. Naturally, that raises kind of our view of the higher end, and we'll see what's beyond. From a growth angle, obviously, we continue to explore, but there's nothing that we've disclosed that would directly inform that range at this time.

Jeremy Tonet: Got it. That's helpful. Thank you for that. Then, just wondering about customer conversations in general, how the tone might have changed over time here. PJM, you're seeing some kind of improvements in energy prices, capacity prices, later dated here, and wondering how that's influenced conversations even with existing large load and the interest in de-risking their power exposure, price exposure over time. Just curious how conversations might have changed over time.

Speaker #8: Got it. That's helpful. Thank you for that. And then just wondering about customer conversations in general, how the tone might have changed over time here.

Speaker #8: PJM, are you seeing some kind of improvements in energy prices, capacity prices later dated here? And wondering how that's influenced conversations, even with existing large load and the interest in de-risking their power exposure, price exposure over time.

Speaker #8: Just curious how conversations might have changed over time.

Speaker #1: Yeah. Jeremy, I feel like I've been talking about it for 20 years, but it's probably more like two years. The worst thing for deal execution is ambiguity and uncertainty.

Joe Dominguez: Yeah. Jeremy, I feel like I've been talking about it for 20 years, but it's probably more like two years. The worst thing for deal execution is ambiguity and uncertainty. I think I've said, for those of you who've been on our calls for a while, remember we were talking about, oh, which components of the transmission service should large load pay or, and be excused from? I think I offered, you got to just tell these people what it is, and then they could plan around it. I think what we'll see is very shortly, the entirety of the data economy investing what could be upwards of $1 trillion in infrastructure annually when you put all the pieces together. People want to get this stuff going. You read the Morgan Stanley report the other day.

Speaker #1: I think I've said, and for those of you who've been on our calls for a while, remember we were talking about, oh, which components of the transmission service should large load pay and be excused from.

Speaker #1: And I think I offered just you got to just tell these people what it is and then they could plan around it. I think what we'll see is very shortly the entirety of the data economy investing what could be upwards of a trillion dollars in infrastructure annually when you put all the pieces together.

Speaker #1: People want to get this stuff going. The you've read the Morgan Stanley report the other day. The returns for the investments, they're making in data economy and these AI models are proving out.

Joe Dominguez: The returns for the investments they're making in data economy and these AI models are proving out. What our customers want is to understand the rules of the road, then they'll manage around them. Some things need to be done better. PJM's Connect & Manage program needs a lot of improvement. The reality is, at the end of the day, the rules and rule clarity are going to be the thing that are going to encourage deal flow for us and completion of these nation-critical projects for these large customers. Just over the course of this year, when we started the year, we really started from a position where the executive order that the president signed with the hyperscalers and the pledges they signed, people were trying to figure out what that would look like in actual practice.

Speaker #1: What our customers want is to understand the rules of the road. And then they'll manage around that. Some things they're need to be done better.

Speaker #1: PJM's Connect and Management program needs a lot of improvement. But the reality is, at the end of the day, the rules and rule clarity are going to be the things that encourage deal flow for us and the completion of these nation-critical projects for these large customers.

Speaker #1: So just over the course of this year, as we've been—when we started the year, we really started from a position where the executive order that the President signed with the hyperscalers and the pledges they signed, people were trying to figure out what that would look like in actual practice.

Speaker #1: A lot of really good work has been done. And although we don't agree with everything that PJM has proposed, we applaud them for providing clarity that is needed here.

Joe Dominguez: A lot of really good work has been done, although we don't agree with everything that PJM has proposed, we applaud them for providing clarity that is needed here. Quite naturally, that is fueling kind of a resumption of contracting activity. I believe that once we do get clarity, we're going to see here in PJM what we've seen in many places where deal flow will kick off with a bit of a bang.

Speaker #1: And quite naturally, that is fueling kind of a resumption of contracting activity. And I believe that once we do get clarity, we're going to see here in PJM what we've seen in many places, where deal flow will kick off with a bit of a bang.

Speaker #8: Got it. That's helpful. I'll leave it there. Thank you.

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

Operator: One moment for our next question. Our next question comes from Sophie Karp with KeyBanc Capital Markets. Your line is open.

Speaker #3: One moment for our next question. Our next question comes from Sophie Karp with KBCM. Your line is open.

Sophie Karp: Hi. Good morning. Congratulations on a good quarter and announcements here, and thank you for taking my question. I was wondering, what do you guys see as the next step in the co-location process in the PJM? Will there be a definitive document coming out of the PJM that will be the final and authoritative, I guess, document in this process that will establish the final clarity for everyone, and when will that be?

Speaker #9: Hi. Good morning. Congratulations on the good quarter and announcements here. And thank you for taking my question. I was wondering, what do you guys see as the next step on the co-location process in the PGM?

Speaker #9: Will there be a definitive document coming out of the PGM that will be the final and authoritative, I guess, document in this process that will establish the final clarity for everyone?

Speaker #9: And when will that be?

Speaker #1: Yeah, Sophie, and as you know, Constellation's been turning up the heat to get that moving more quickly. We've seen some extensions of time to answer that.

Joe Dominguez: Yeah, Sophie. As you know, Constellation's been turning up the heat to get that moving more quickly. We've seen some extensions of time to answer that. In short, we think that we're going to see rule clarity in the Q1 to Q2 of 2027 in terms of co-location, far ahead of where PJM might have been before, where they were targeting 2029. This is an area where FERC has put some good pressure on PJM and the RTOs to provide some clarity. We have some ideas. One of those things I mentioned in my prepared remarks was this notion of modeling load and generation at the same point of interconnection. There, really what I'm talking about is adding batteries, adding other generation resources at existing operating generating facilities, and then co-locating a load there.

Speaker #1: In short, we think that we're going to see rule clarity in the first to second quarter of '27 in terms of co-location. Far ahead of where PJM might have been before, where they were targeting 2029.

Speaker #1: So this is an area where FERC has put some good pressure on PJM and the RTOs to provide some clarity. We have some ideas one of those things I mentioned in my prepared remarks was this notion of modeling load and generation at the same point of interconnection.

Speaker #1: So they're really what I'm talking about is adding batteries. Adding other generation resources. Add existing operating generating facilities. And then co-locating a load there.

Speaker #1: So, you might have a data center next to an existing power plant, but that power plant has supplemental capacity capability through the incorporation of batteries and other devices.

Joe Dominguez: You might have a data center next to an existing power plant, but that power plant has supplemental capacity capability through the incorporation of batteries and other devices. We think those hybrid solutions of mixing new

Speaker #1: We think those hybrid solutions of mixing new capacity resources, existing generation, and co-locating that with load—that's the promise we see going forward. We still think that's moving a little bit slower than we wanted, but a lot faster than was anticipated at the beginning of the year.

Joe Dominguez: Capacity resources, existing generation, and co-locating that with load. That's the promise we see going forward. That's moving a little bit slower still than we wanted, but a lot faster than was anticipated at the beginning of the year. In answer to your question, I think with the 90-day extensions, we're expecting response from PJM here in about the November timeframe. I'm looking at David. Does that sound right, David?

Speaker #1: But in answer to your question, I think with the 90-day extensions we're expecting, response from PJM here in about the November timeframe—I'm looking at David. Does that sound right, David?

David Dardis: That's right.

Speaker #2: That's right.

Speaker #1: And then an order from FERC in the first to second quarter of next year.

Joe Dominguez: An order from FERC in the Q1 to Q2 of next year.

Sophie Karp: Thank you. Great. Just a higher-level question. You've been allocating capital to share buybacks quite a bit, and that makes sense given the valuation and opportunistic nature of that. How do you think about jump-starting the cycle of investing organically into maybe new builds, in addition to the nuclear restart you're working on? Is there a place in the US that you think where the economics work for that right now?

Speaker #9: Thank you. Great. And then just to high-level question, you've been allocating capital to share buybacks quite a bit and that makes sense given the valuation and opportunistic nature of that.

Speaker #9: How do you think about jump-starting the cycle of investing organically into maybe new builds in addition to the nuclear restart you're working on? Is there a place in the US that you think is where the economics work for that right now?

Speaker #1: We're having some good conversations in New York about the future of nuclear, but there's nothing right now that I would describe as imminently on the horizon for investment in new nuclear.

Joe Dominguez: We're having some good conversations in New York about the future of nuclear, there's nothing right now that I would describe as imminently on the horizon for investment in new nuclear. What you're seeing us do, and what you'll see us continue to do here, is to prepare our sites for new nuclear development, because that work's got to get done anyway. The permitting, the early site permits that are needed. We want to, when we've been able to figure out the construction schedule and pricing and the customers on the other side of that, we want to have a bunch of different locations where customers could come. New York is a very exciting opportunity for us, and that's something we're pursuing with Governor Hochul and her administration. It's not yet going to show up on financial disclosures for capital. It's not that imminent.

Speaker #1: What you're seeing us do and what you'll see us continue to do here is to prepare our sites for new nuclear development. Because that work's got to get done anyway.

Speaker #1: The permitting, the early site permits, that are needed—so we want to, when we've been able to figure out the construction schedule and pricing and the customers on the other side of that, we want to have a bunch of different locations where customers could come.

Speaker #1: New York is a very exciting opportunity for us in that that's something we're pursuing with Governor Hochul and her administration. But it's not yet going to show up on financial disclosures for capital.

Speaker #1: It's not that imminent.

Sophie Karp: Got it. Thank you. That's all for me.

Speaker #9: Got it. Thank you. That's all from me.

Speaker #1: You bet.

Joe Dominguez: You bet.

Speaker #3: One moment for our next question. Our next question comes from James West with Mills Research.

Operator: One moment for our next question. Our next question comes from James West with Melius Research.

Speaker #10: Hey, good morning, Jeff.

James West: Hey, good morning, Joe.

Joe Dominguez: Hi, James.

Speaker #1: Hi, James.

James West: Joe, you've been somewhat of a lone, but kind of clarion voice here in the market about some of the stranded generation assets or underutilized assets, while a lot of people have been beating the drum on new generation. I think you've laid out your reasons why already. I'm curious from the customer standpoint, as you're talking to them about this latent capacity, what's their view on that? Are they willing to say, "Hey, that's here. It's ready to go. We'll build infrastructure next to it or near it"? Are they also talking about, "Hey, are you willing to build a little more capacity, but we'll start with the existing capacity?" How's that conversation evolving with the customers?

Speaker #10: So you've been kind of a somewhat of a lone but kind of clarion voice here in the market about some of the stranded generation assets or underutilized assets while a lot of people have been being the drama on new generation.

Speaker #10: And I think you've laid out your reasons why already, but I'm curious from the customer standpoint, as you're talking to them about this latent capacity, are they what's their view on that?

Speaker #10: Are they willing to say, "Hey, that's here—it's ready to go. We'll build infrastructure next to it or near it"? And then, are they also talking about, "Hey, are you willing to build a little more capacity, but we'll start with the existing capacity"?

Speaker #10: How is that conversation evolving with the customers?

Speaker #1: Hey, definitely all of the above. One of the things that really has just been remarkable is the level of sophistication that our clients now possess about the grid is as good as the energy companies themselves.

Joe Dominguez: Hey, definitely all of the above. One of the things that it really has just been remarkable is the level of sophistication that our clients now possess about the grid is as good as the energy companies themselves. Quite honestly, not to insult anybody, it wasn't true two years ago.

Speaker #1: That, quite honestly—not to insult anybody—wasn't true two years ago. And so, this kind of combination of resources and what batteries could do, what demand response could do, all of our sophisticated customers understand that.

James West: Sure.

Joe Dominguez: This kind of combination of resources and what batteries could do, what demand response could do, all of our sophisticated customers understand that. I appreciate you give me a bit of a shout-out for being a clear voice, but I think the most powerful voice on this subject has actually been Department of Energy Secretary Chris Wright, who's been saying exactly what I've said on these calls now for three years. That's been now backed up by study after study from Duke and Brattle and many others who have talked about the same thing. Sometimes when we talk about capacity, it is for the layperson easy to confuse that with energy, and it gets really complicated pretty quickly in our business. Our clients understand it, and what they seek from us is all of the above, really.

Speaker #1: And I appreciate you giving me a bit of a shout-out for being a clear voice. But I think the most powerful voice on this subject has actually been Department of Energy Secretary Chris Wright.

Speaker #1: Who's been saying exactly what I've said on these calls now for three years. And that's been now backed up by study after study from Duke and Brattle and many others who have talked about the same thing.

Speaker #1: So sometimes when we talk about capacity, it is for the layperson easy to confuse that with energy. And it gets really complicated pretty quickly in our business.

Speaker #1: But our clients understand it. And what they seek from us is all of the above, really. I think you're seeing that in basically in our contracting where we're relicensing facilities that are adding life.

Joe Dominguez: I think you're seeing that in basically in our contracting, where we're re-licensing facilities that are adding life. We're talking about operates with clients. That's exciting. You saw that in the Walmart deal. It doesn't operate to the exclusion of recognizing that the existing megawatts have an important role to play in this ecosystem.

Speaker #1: We're talking about uprates with clients—that's exciting. You saw that in the Walmart deal. But it doesn't operate to the exclusion of recognizing that the existing megawatts have an important role to play in this ecosystem.

Speaker #10: Right. Gotcha. And then you mentioned batteries as well. Are we is the battery technology evolved to the point now where real significant long-duration storage is available to help backstop the grid?

James West: Right. Got you. Then you mentioned batteries as well. Has the battery technology evolved to the point now where real significant long-duration storage is available to help backstop the grid?

Joe Dominguez: I think batteries are already doing that. We're talking a bit of that about the effect we're seeing in Texas of batteries. Now, when we talk long duration, you got to get pretty into the weeds here, but I'm talking about it just to be clear about four-hour batteries.

Speaker #1: I think that I think batteries are already doing that. We're talking a bit of that about the effect we're seeing in Texas, of batteries.

Speaker #1: Now, that's when we talk long-duration, you got to get pretty into the weeds here. But I'm talking about it just to be clear about four-hour batteries.

Speaker #1: And we continue to think that four-hour batteries have a very big role. And as you know, Calpine has been one of the US leaders in terms of the development and integration of those batteries and now a constellation.

James West: Okay.

Joe Dominguez: We continue to think that four-hour batteries have a very big role. As you know, Calpine has been one of the US leaders in terms of the development and integration of those batteries. Now at Constellation, we're drawing on that substantial expertise.

Speaker #1: We're drawing on that substantial expertise.

James West: Got it. Thanks, Joe.

Speaker #10: Got it. Thanks, Jeff.

Speaker #1: Thank you.

Joe Dominguez: Thank you.

Speaker #3: One moment for our next question. Our next question comes from Julian Dillon-Smith with Jefferies. Your line is open.

Operator: One moment for our next question. Our next question comes from Julien Dumoulin-Smith with Jefferies. Your line is open.

Speaker #1: Good morning, Julian.

Joe Dominguez: Morning, Julien.

Speaker #11: Hey, good morning, team. Hey, thanks for taking the time. Joe, team, hey. Look, a couple of clarifications here. Starting with bilaterals—if you can, I know you said it was confidential, but can you speak a little bit to the timing, right?

Julien Dumoulin-Smith: Good morning, team. Thanks for taking the time. Joe, team. Look, a couple clarifications here. Starting with bilaterals, if you can. I know you said it was confidential, but can you speak a little bit to the timing, right? In as much as obviously the RBP is somewhat specific on when it goes down. How do you think about the timeline here, in as much as where are you in those negotiations vis-a-vis this potential RBP coming up in the next couple of months? Is it lagged by a couple months here thereafter, or is it even prior? How do you think about that and the considerations that may be playing out there?

Speaker #11: Inasmuch as obviously the RBP is somewhat specific on when it goes down, how do you think about the timeline here? Inasmuch as where are you in those negotiations vis-à-vis this potential RBP coming up in the next couple of months?

Speaker #11: Is it lagged by a couple of months here? Thereafter, or is it even prior? How do you think about that and the considerations that may be playing out therein?

Speaker #1: Yeah, Julian. And I'm sorry. I had intended to be clear earlier, but I think the RBP is one avenue. But it is not the exclusive avenue for customer conversations.

Joe Dominguez: Julien, I'm sorry, I had intended to be clear earlier. I think the RBP is one avenue, but it is not the exclusive avenue for customer conversations. Indeed, I think customers will consider whether they want to participate in that or do something completely separate, bilaterally separate, as they've done now for a couple of years before this PJM process was even dreamed up. I think all of that is playing out. What customers want to understand is what I'm doing in contracting space going to meet the requirements in a future PJM rule such that I could be assured that I'm compliant, right? I understand what my backup and curtailment responsibilities might be. As we get to some clarity here in terms of what PJM is proposing, they're able to do that.

Speaker #1: And indeed, I think customers will consider whether they want to participate in that or do something completely separate bilaterally separate. As they've done now for a couple of years before this PJM process was even dreamed up.

Speaker #1: So I think kind of all of that is playing out. What customers want to understand is what I'm doing in contracting space, going to meet the requirements in a future PJM rule, such that I could be assured that I'm compliant, right?

Speaker #1: And I understand what my backup and curtailment responsibilities might be. So as we get to some clarity here in terms of what PJM is proposing, they're able to do that.

Speaker #1: They're able to say, "Yeah, I don't know exactly yet. It's not been rubber-stamped by FERC—not that 'rubber stamp' is a bad phrase here—but it hasn't been approved by FERC."

Joe Dominguez: They're able to say, "Yeah, I don't know exactly yet. It's not been rubber-stamped by FERC." Rubber stamp is a bad phrase here. It hasn't been approved by FERC. I understand what PJM's proposing, and now I could start crafting a strategy to meet any requirements that come out of that. The backstop is a piece of that, but it may not be that each client is going to depend on the backstop. It's just one other avenue for meeting the requirements.

Speaker #1: But I understand what PJM's proposing, and now I could start crafting a strategy to meet any requirements that come out of that. The backstop is a piece of that.

Speaker #1: But it may not be that each client is going to depend on the backstop. It's just one other avenue for meeting the requirements.

Dan L. Eggers: Hey, Julien, if I would add to those contracts right now.

Dan Eggers: Hey, Julien, if I would add to those contracts right now.

Speaker #12: Hey, Julian, if I would add.

Julien Dumoulin-Smith: Totally understood. Yeah.

Speaker #10: Totally understand.

Dan L. Eggers: Hey, Julien. Contracts today, those are signed contracts. If the question was, are we dependent upon something on the FERC decisions or PJM decisions, these deals are not dependent upon those outcomes.

Dan Eggers: Hey, Julien. Contracts today, those are signed contracts. If the question was, are we dependent upon something on the FERC decisions or PJM decisions, these deals are not dependent upon those outcomes.

Speaker #12: Hey, Julian, contracts today. Those are signed contracts. So if the question was, are we dependent upon something on the FERC decisions or PJM decisions, these deals are not dependent upon those outcomes.

Speaker #1: Yeah, sorry, I didn't know if that was.

Joe Dominguez: Yeah. Sorry, I didn't know if that was-

Julien Dumoulin-Smith: No, that part was clear. No, that wasn't. I appreciate you confirming it regardless, and I appreciate it. Actually, if I can pivot real quickly to the other side of the equation. Obviously, Illinois has a lot of interest. They've kicked off a process on nuclear procurement here this year. You all are an obvious counterparty here, and I suspect you don't want to negotiate this on the call per se, but can you speak to the timeline around what the state's looking to do on procurement here, in as much as, from what I understand, that includes operators as well as new nuclear? How would that timeline play out in tandem with anything else you have going on? And obviously, you have a CMC expiration here next year. Any considerations therein you'd care to share given where we stand today, alongside the state's wider new nuclear ambitions?

Speaker #10: No, no, that part was clear. No, no, no, no. That wasn't. But I I appreciate it. Actually, if I can pivot real quickly to the other side of the equation, obviously, Illinois is a lot of interest.

Speaker #10: They've kicked off a process on nuclear procurement here this year. You all are an obvious counterparty here, and I suspect you don't want to negotiate this on the call per se. But can you speak to the timeline around what the state's looking to do on procurement here, in as much as, from what I understand, that includes uprates as well as new nuclear?

Speaker #10: How would that timeline play out in tandem with anything else you have going on? And, obviously, you have a CMC expiration here next year.

Speaker #10: Are there any considerations therein you'd care to share, given where we stand today, alongside the state's wider new nuclear emissions?

Speaker #1: Well, I think the state has a process here where they're going to do an IRP and then ultimately a procurement plan, and we'll have a voice in those things.

Joe Dominguez: Well, I think the state has a process here where they're going to do an IRP and then ultimately a procurement plan, and we'll have a voice in those things. We don't have anything separately, that we're negotiating with the state of Illinois, to be absolutely clear. We'll see what they come up with the IRP. We think New York is a wonderful template for what Illinois should be looking to do.

Speaker #1: We don't have anything separately that we're negotiating with the state of Illinois to be absolutely clear. We'll see what they come up with with the IRP.

Speaker #1: We think New York is a wonderful template for what Illinois should be looking to do.

Speaker #10: Yeah, no, that makes a ton of sense. Looking forward to it. All right, guys, thanks for the time. Good luck.

Julien Dumoulin-Smith: Yeah. No, that makes tons of sense. Looking forward to it. All right, guys. Thanks for the time. Good luck.

Speaker #1: Thank you, Julian. Thanks, Julian.

Joe Dominguez: Thank you, Julien.

Dan L. Eggers: Thanks, Julien.

Dan Eggers: Thanks, Julien.

Operator: Ladies and gentlemen, this concludes the Q&A portion of today's conference. I'd like to turn the call back to Joe for any further remarks.

Speaker #3: Well, ladies and gentlemen, that concludes the Q&A portion of today's conference. I'd like to turn the call back to Joe for any further remarks.

Joe Dominguez: Well, again, thanks for your continued interest in Constellation. Our people had really a spectacular quarter. We look to finish off and have a spectacular year the rest of the way. I want to wish you all a safe rest of the summer and look forward to getting together at the end of Q3. Thanks again.

Speaker #1: your continued interest and constellation. Our people had really a spectacular quarter. We looked at finish off and have a spectacular year the rest of the way.

Speaker #1: I want to wish you all a safe rest of the summer and look forward to getting together at the end of the third quarter.

Speaker #1: Thanks again.

Operator: Ladies and gentlemen, thank you for your participating in today's call. This concludes the program. You may now disconnect. Everyone, have a great day.

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