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. 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 $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 megawatts 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. 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. 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. 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. 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. Beyond its support for exploring co-located solutions and pushing for speed in resolution, FERC has 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. 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. 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. 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. 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. 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. No one can deny that. But 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. 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.

Thanks, Joe. 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 the second quarter, 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. 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 second quarter calls, Illinois ZEC revenue timing can vary year to year. This quarter, 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 of 2027. Slide 19 of the appendix provides additional details on the program. Moving to slide 10. Our nuclear fleet delivered a 93 percent capacity factor and generated 40 terawatt-hours 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 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%. This outstanding result, in accord 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 per share to $12.50 per share, up from our prior range of $11 to $12 per 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, 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. Since the first quarter 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 a creative 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 kWatt. 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. 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. 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. 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. 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 megawatt hour. This change will increase our view of 2030 base earnings by approximately $0.30 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. With that, I'll turn the call back to Joe.

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. 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. 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, and the team is now ready for your questions.

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered or you wish to move yourself from the queue, please press star 1-1 again. 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.

Morning, Nick.

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

Yeah, look, I'm not going to, as I said, I'm going to adhere to the rule that, you know, we're going to let the customers explain their deals and announce them 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, you know, this is one of many opportunities we're continuing to see in the market.

Okay, great. And then, you know, 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 six gigawatt figure, but could hybrid deals be in play if you could, you know, work to address, you know, the non-peak issues and maybe talk about the five gigawatts of new capacity that could be eligible that you highlighted on the last call? Thank you.

Yeah, 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. 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. 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 U.S. 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. 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. 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. So the more the existing generators fully utilize efficiently, 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. So 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, but 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. So this kind of idea where we're trying to, you know, 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.

Thanks for your thought.

Dan, I said I was going to hand it over to you, and then I went out and talked about it for two minutes. 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, 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? So 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.

Yeah, 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 and its clarification process of its rules for the backup generation at sites is really going to matter because, you know, 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, you know, taking advantage of the stranded capacity in the system and lowering prices for customers.

Thanks for all your thoughts.

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

Hey, Steve. Good morning.

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

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

Okay. And just, you know, I think there have been some concern that, you know, with a connected manager, IRS, like whether customers can contract for existing, like whatever contracts you have, have they kind of incorporated, you know, kind of whatever outcomes could come out of that?

Yeah, Steve, I think I probably droned on about it a bit long just a moment ago, but just let me give you a specific example. 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 but they'll still need to buy you know power they'll still need to buy energy really for all of the other hours they're not managing you know the other 99 and so that's where the existing resources are going to be able to provide quick solution sets otherwise Otherwise, we'd be waiting for every data center to wait for every megawatt to be in there connected and built. 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 we've 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. What we're trying to do is manage the peaks, 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. Okay.

Then 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?

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. 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. So I think we're comfortable with keeping that sensitivity as it is.

Okay, great.

Thanks, Steve. One moment for our next question. Our next question comes from David Arcaro with Morgan Stanley. Your line is open.

Morning, David. Good morning. I 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? I'm curious how you see that evolving from here.

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 were really early first movers, I think, in Texas, where we've gotten through, you know, three necessary approvals and we're proceeding with clients on it. But some of our sites are in the batch zero process. And so we're evaluating, you know, 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 P-U-C-T to clarify those things soon. David, anything to add?

I guess all I'd 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. He understands its importance for Texas competitiveness and ultimately American competitiveness. So I don't think anything has changed there where he has said, you know, Texas should be the epicenter of AI. I don't think his view has changed on that. 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. 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. 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.

And, David, I think some of the answers here are going to be pretty darn good. You know, 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 are, you know, put water consumption on the level of, you know, a restaurant or a large store 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. So maybe this 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.

It's really helpful. 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. 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.

Yeah, thanks for the question, David. This was one that came up last quarter. I think Jim and Andrew talked a bit about it. You know, 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 and so 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 you know the vast majority of the data centers that are anticipated are still at some stage of construction and not on the grid so you know 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, 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. 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.

Thanks so much.

One moment for our next question. Our next question comes from Jeremy Totenet with JPMorgan Securities.

Your line is open. hi good morning good morning hi thanks morning you just want to turn to slide 13 if I could and looking at the earnings in pre cash flow before growth opportunities in 29 and I see the capital allocation is bolded on the table I think that might be new this quarter I saw you know the share repurchases there but just wondering on the growth investment side is there anything kind of new to think about uh you know with regards to uh this table here hey jeremy it's shane so in the initial disclosure back in march we gave we didn't give a four we kind of gave a 50 cent

plus as an upside 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 uh 2.2 billion dollars of buyback 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.

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

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, and for those of you who've been on our calls for a while, I remember we were talking about, oh, which components of the transmission service should large load pay and be excused from. And I think I offered, you know, just, you got to just tell these people what it is, and then they can 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. People want to get this stuff going. 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. Now, what our customers want is to understand the rules of the road, and then they'll manage around that.

Some things need to be done better.

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 thing that are going to encourage deal flow for us and, you know, completion of these nation-critical projects for these large customers. So just over the course of this year, as we've been, you know, 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. 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. 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.

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

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

Hi. Good morning. Congratulations on a good quarter and announcement 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 PGM? Will there be, like, 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, and when will that be?

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. In short, we think that we're going to see rural 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. 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. So there 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. 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. 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, you know, that's moving a little bit slower still than we wanted, but a lot faster than was anticipated at the beginning of the year. 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?

And then an order from FERC in the first to second quarter of next year thank you great and then um just a higher level question uh you've been um allocating capital to share buybacks quite a bit and that makes sense given you know the valuation and opportunistic nature of that um how do you uh think about um jump starting the cycle of you know investing organically um into maybe new builds um in addition to the nuclear start you're working on, is there a place in the U.S. that you think is where the economics work for that right now?

You know, 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. 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 so we want to when the 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 And 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. It's not that imminent.

Got it. That's all for me.

One moment for our next question. Our next question comes from James West with Mills Research.

Hey, good morning, Joe. Joe, you've been kind of somewhat of a lone but kind of clarient 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. and i think you've laid out your reasons why or already but i'm curious from the customer standpoint as you're talking to them about this uh latent capacity um are they 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 um 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. How has that conversation evolving with the customers?

Hey, definitely all of the above. You know, one of the things that really has just been remarkable is the level of sophistication that our clients now possess about the grid is, you know, as good as, you know, the energy companies themselves. That, quite honestly, not to insult anybody, it 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. And, you know, 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. 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. 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. But our clients understand it, and what they seek from us is all of the above, really. I think, you know, you're seeing that basically in our contracting where we're relicensing facilities that are adding life. We're talking about up rates 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.

Gotcha. And then you mentioned batteries as well. Is the battery technology evolved to the point now where real significant long-duration storage is available to help backstop the grid?

I think batteries are already doing that. We're talking a bit of that about the effect we're seeing in Texas of batteries. When we talk long-duration, you've got to get pretty into the weeds here. but I'm talking about it just to be clear about four-hour batteries. And we continue to think that four-hour batteries have a very big role. And as you know, CalPine has been one of the U.S. leaders in terms of the development and integration of those batteries. And now at Constellation, we're drawing on that substantial expertise.

Got it. Thanks, Jeff.

Thank you.

One moment for our next question. Our next question comes from Julian Dillman-Smith with Jeffries. Your line is open.

Morning, Julian.

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, 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-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 therein?

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. 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, you know, now for a couple of years before this PJM process was even dreamed up. So, I think kind of all of that is playing out. What customers want to understand is, 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? 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. They're able to say, yeah, I don't know exactly yet. It's not been rubber stamped by FERC. Rubber stamped is a bad phrase here, but it hasn't been approved by FERC. But I understand what PJM is 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. Hey, Julian, if I would add this.

Totally understand. 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. Yeah, sorry, I didn't know if that was right.

No, no, no, that part was clear. No, no, no, no, that wasn't. But 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, inasmuch as, from what I understand, that includes up rates 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 emissions?

Well, you know, 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, you know, that we're negotiating with the state of Illinois, to be absolutely clear. We'll see what they come up with with the IRP. We think New York is a wonderful template for what Illinois should be looking to do.

Yeah, no, that makes tons of sense. Looking forward to it. Thanks for the time.

Good luck.

Thank you, Julian.

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

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 the third quarter. Thanks again.

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.