Good day, and welcome to the PPL Corporation Fourth Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Andy Ludwig, Vice President of Investor Relations. Please go ahead.

Good morning everyone and thank you for joining the PPL Corporation conference call on fourth quarter and full year 2023 financial results. We have provided slides for this presentation on the Investors section of our website. We begin today’s call with updates from Vince Sorgi, PPL President and CEO; and Joe Bergstein, Chief Financial Officer and conclude with a Q&A session following our prepared remarks. Before we get started, I’ll draw your attention to Slide 2 and a brief cautionary statement. Our presentation today contains forward-looking statements about future operating results or other future events. Actual results may differ materially from these forward-looking statements. Please refer to the appendix of this presentation and PPL’s SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward-looking statements. We will also refer to non-GAAP measures including earnings from ongoing operations or ongoing earnings on this call. For reconciliations to the comparable GAAP measures, please refer to the appendix. I’ll now turn the call over to Vince.

Thank you, Andy and good morning everyone. Welcome to our fourth quarter and year-end investor update. I'm excited for today's call as we closed out 2023 in strong fashion and our future continues to look very bright. And I look forward to highlighting why that is on today's call. Turning to Slide 4. I'm very proud of what our PPL team was able to accomplish in 2023. In short, it was a year of challenges met and promises kept. Most importantly, we delivered electricity and natural gas safely and reliably to our more than 3.5 million customers. This included top quartile T&D reliability at each of our utilities, including record reliability for our companies in Kentucky and Rhode Island and top decile performance in Pennsylvania. Our generation reliability in Kentucky was among the very best in the nation. We achieved all this despite heightened storm activity in each of our service territories. At the same time and despite over $0.10 per share impact from mild weather and storms, we delivered on every one of our financial commitments to our shareowners. Namely, we achieved ongoing earnings of $1.60 per share, exceeding the midpoint of our ongoing earnings forecast by $0.02 and delivering over 8% growth from pro forma 2022. We achieved this through our strong focus on operational efficiency and outperformance in key areas that Joe will cover in his financial review. We also executed $2.4 billion in planned capital spend on time and on budget to advance a reliable, resilient, affordable, and cleaner energy future. We exceeded our annual O&M savings target for 2023 through our strong enterprise-wide focus on technology and business transformation, achieving $75 million in savings from our 2021 baseline, reinforcing our continuous improvement mindset and putting us solidly on track to deliver our targeted $175 million in O&M savings by 2026. These operational and financial achievements were matched by strong results elsewhere in the business that position us for future success. Underpinned by sound planning and effective management of regulatory proceedings, we secured constructive regulatory outcomes in Kentucky and Rhode Island. In Kentucky, we secured approval for about $2 billion in generation replacement investments as part of our CPCN process that concluded in November of last year. The KPSC's decision ensures that we can continue to meet our customers' future energy needs safely, reliably, and affordably, while advancing a cleaner energy mix in the state. And in Rhode Island, we secured approval of our first infrastructure, safety, and reliability plans since acquiring Rhode Island Energy. In addition, we received the green light to deploy advanced metering functionality across Rhode Island, as we lay a foundation for a smarter, more resilient, more reliable, and more dynamic electric grid capable of supporting the state's leading climate goals. Finally, we continue to provide a smooth and seamless transition to PPL ownership for our Rhode Island Energy stakeholders, completing all planned 2023 integration milestones and keeping us on track to exit our remaining transition service agreements with National Grid in mid-2024. These achievements are a direct result of our focus on execution, our disciplined investment strategy, our ability to adjust when challenges arise, our experienced leadership team, and clarity of purpose across PPL as we pursue our Utilities of the Future Strategy. Looking ahead, we recognize we still have room to improve as we pursue our vision to be the best utility company in the US. And in 2024, we're determined to make continued progress as we seek to maximize long-term value for both our customers and shareowners. Turning to Slide 5. Today, we announced the results of our updated business plan, which extends our projected growth outlook through at least 2027. In connection with this update, today, we announced our 2024 ongoing earnings forecast range of $1.63 to $1.75 per share. The midpoint of this range, $1.69 per share, represents 7% growth from our 2023 ongoing earnings per share target, consistent with our long-term growth targets. In addition, today, we announced a quarterly common stock dividend of $0.2575 per share. This represents a 7.3% increase from the current quarterly dividend of $0.24 per share and aligns with our commitment to dividend growth in line with our EPS growth targets. We've extended our 6% to 8% annual EPS and dividend growth targets through at least 2027 based off the midpoint of our 2024 earnings forecast range. In addition to today's updated growth forecast, our updated capital plan includes $14.3 billion from 2024 to 2027 to strengthen grid reliability and resiliency and advance a cleaner energy mix without compromising on affordability. The new plan is expected to drive average annual rate base growth of 6.3% through 2027, up from the prior growth rate of 5.6%. We plan to fund these additional investments supported by our exceptional balance sheet as our credit metrics remain well within our targets throughout the planned period without the need for equity issuances through at least 2027. As I highlighted in my recap of 2023, we've made outstanding progress towards our multiyear target of at least $175 million in annual O&M savings by 2026. Based on the progress we made last year, we remain solidly on track to deliver our 2024 targeted savings of $120 million to $130 million. In terms of rate case timing in the plan, we do not anticipate any base rate case filings in 2024 in Pennsylvania, Kentucky, or Rhode Island. Looking beyond 2024, our current projections would have us filing a base rate case a bit sooner in Kentucky than previously anticipated due to several factors, including the CPCN decision and additional capital investment needs on the T&D side of the business. Currently, we believe the earliest we would file a rate case in Kentucky will be in the first half of 2025. For Rhode Island, the earliest we would file is late 2025, which is consistent with the prior plan. Finally, in Pennsylvania, recall that we have not been in for a base rate case since 2015 and we have no plans to go in again before 2026 at the earliest. The DSIC mechanism in Pennsylvania has operated as designed to support long-term infrastructure investment between rate cases. We do see an increased need to invest more to improve reliability on the distribution system and filed with the Pennsylvania PUC a request to modify our long-term infrastructure improvement plan, or LTIP, which includes an increase in planned DSIC eligible investment over a five-year period. We are considering filing a waiver request with the Pennsylvania PUC in the near future, requesting modifications to the DSIC mechanism to support accelerated replacement of aging infrastructure. As always, our focus is on maintaining affordability for our customers. And we will continue to evaluate the need for future rate cases based on a variety of factors, including capital plans, interest rates, market conditions, and regulatory lag. Turning to Slide 6. Our updated plan and business outlook supports our Utilities of the Future Strategy, which is core to everything we do. What does that mean to us? It means updating our design criteria and continuing to harden our transmission and distribution systems to protect against climate change and keep our systems and data secure against cyber threats. It means expanding our industry-leading use of technology, including smart grids, automation, data analytics, AI, and technologies that haven't even been invented yet to build a self-healing grid. It means investing in R&D to drive innovation to advance technologies that can be scaled safely, reliably, and affordably to meet our customers' evolving energy needs and to actually achieve net zero. Like the carbon capture project that was awarded a $72 million DOE grant at our Cane Run combined cycle plant in Kentucky. At the same time, it means expanding transmission and incorporating grid-enhancing technologies to connect more renewables and improve reliability for our customers; advancing a cleaner generation mix, while keeping energy safe, reliable, and affordable; expanding our ability to reliably manage two-way power flows on the distribution network as we connect significantly more distributed energy; driving operational efficiencies to support an affordable clean energy transition; partnering with our customers and state and local officials to enable growth and economic development in our communities; and lastly, expanding self-service options for our customers using digital tools to enhance the customer experience. Turning to Slide 7. As you can hear, creating the Utilities of the Future requires change across our entire business, and it requires significant investments to support a net zero economy. The industry and others are projecting a 200% to 300% increase in electricity demand, which will require additions of reliable generation unless we see unprecedented amounts of energy conservation. At the same time, aging fossil fuel plants in this country are being retired very rapidly without replacements of reliable, dispatchable generation capacity. And considering that fossil fuel generation represents more than 50% of our total capacity in the US, that presents a potentially major problem if this transition is not managed appropriately. The math simply doesn't add up when we don't have proven, scalable technology currently available to actually achieve net zero carbon emissions that customers can afford. Most technologies used in our industry took 40 years to commercialize from the demonstration phase. We need to cut that timeframe in half, at least, to meet net zero by 2050 targets, especially as we think about the big four new potential technologies: nuclear SMRs, carbon capture and sequestration, long-duration energy storage, and hydrogen. In the meantime, we need to leverage commercially viable resources that exist today to reduce our carbon footprint, while maintaining reliability. Those that are dispatchable, can ramp up and down quickly and are vital to balancing the gaps left on the system by intermittent renewables. That is why natural gas generation is the key to achieving deep decarbonization in this country and it actually allows us to deploy more renewables than we would otherwise be able to do because of the reliability benefits of natural gas. In a nutshell, this is what makes the energy transition such a challenge to be able to deliver the clean energy future in a way that maintains reliability and affordability for our customers. However, with every challenge comes opportunity. And that's why we know our Utilities of the Future strategy is the right approach for this dynamic energy landscape. It's why our generation transition plan in Kentucky is reasoned and delivered and ensures we can maintain the reliability and resiliency that our customers and public officials demand. We actually need to figure out a way to do the same in deregulated markets like PJM and ISO New England. And it's why becoming more efficient is such a critical component of our strategy because for every dollar of O&M we can take out of the business, we can spend $8 on capital without impacting the customer bill. The energy transition simply won't happen if customers cannot afford it. This is how we will achieve our long-term vision and how we intend to enhance the value we deliver for all stakeholders. It requires us to lead from the front and that is exactly what we've been doing and what we will continue to do in 2024 and beyond. Turning to Slide 8 and our priorities for 2024. In addition to advancing our Utilities of the Future Strategy, our 2024 priorities also include achieving at least the midpoint of our earnings per share forecast, executing $3.1 billion in infrastructure investments to maintain safe, reliable, and affordable energy for our customers and modernize the grid. Delivering on our 2024 O&M savings targets as we deploy scalable technologies across our portfolio, take advantage of economies of scale created by our centralization efforts, and continue to leverage data analytics to reduce costs and optimize asset planning and maintenance. Finally, we need to complete our integration of Rhode Island Energy and exit all remaining tranches of service agreements with National Grid. Bottom line, we're eager to showcase PPL's strengths once again in 2024, and we are poised to lead on these very significant issues facing our industry. We have tremendous conviction in our strategy and business plan and in our ability to execute them both, and we look forward to once again delivering on our commitments to customers and shareowners. That concludes my business and strategic update. I'll now turn the call over to Joe for the financial update.

Thank you, Vince and good morning everyone. Let's turn to Slide 10. PPL's fourth quarter GAAP earnings were $0.15 per share compared to $0.26 per share in Q4 2022. We recorded special items of $0.25 per share during the fourth quarter, primarily due to a settlement agreement with Talen Energy Corporation, as well as integration and related expenses associated with the acquisition of Rhode Island Energy. Adjusting for these special items, fourth quarter earnings from ongoing operations were $0.40 per share, an improvement of $0.12 per share compared to Q4 2022. The primary drivers of this increase were returns on capital investments and lower O&M expenses, partially offset by lower sales volumes, primarily due to the continued mild weather experienced in the fourth quarter of 2023. In total, weather was a $0.02 per share drag on our Q4 results compared to our plan. On an annual basis, our 2023 GAAP earnings were $1 per share. Adjusting for $0.60 per share of special items recorded throughout the year, our 2023 ongoing earnings were $1.60 per share. This compares to $1.41 per share of ongoing earnings for 2022 or a 13% increase from those prior year results. As Vince noted, we delivered our earnings target for 2023, exceeding the $1.58 per share midpoint of our earnings forecast. Our teams did a fantastic job of executing our plan, while remaining steadfast in achieving our financial goals, which enabled us to offset the adverse impacts of significant unfavorable weather and storm activity, while maintaining reliability for our customers. 2023 demonstrated our ability to deal with adversity and still achieve our commitments to both customers and shareowners, adding to our confidence in our ability to achieve our earnings targets. Turning to the ongoing segment drivers for the fourth quarter on Slide 11. Our Pennsylvania Regulated segment results increased by $0.04 per share compared to the same period a year ago. The increase was primarily driven by lower O&M and higher transmission revenue, partially offset by lower sales volumes and higher interest expense. Our Kentucky segment results increased by $0.06 per share compared to the fourth quarter of 2022. The improvement in Kentucky's results was primarily driven by lower O&M expense, partially offset by lower sales volumes due to the mild weather. Our Rhode Island segment results increased by $0.02 per share. This increase was primarily driven by higher rider revenue from capital investments, partially offset by higher interest expense. Finally, results at corporate and other were flat compared to the prior period, primarily due to lower income taxes, offset by higher O&M expense. Moving to Slide 12, 2023 was a pivotal year for PPL following our strategic repositioning, which we completed in 2022. Heading into the year, we set our 2023 earnings forecast range with a midpoint of $1.58 per share, representing 7% growth from the 2022 pro forma midpoint of $1.48 per share, which reflected a full year of earnings from Rhode Island Energy. And for the second consecutive year, we outperformed our own targets, beating our earnings forecast by $0.02 and achieving over 8% growth for the 2022 pro forma forecast midpoint. This was a significant achievement given the abnormally mild weather and storms we experienced, which impacted results by more than $0.10 per share. As I said numerous times over the past year, we were confident that our team would overcome those challenges and deliver on our commitments to both our customers and shareowners. This included several areas of excellent execution and constructive regulatory mechanisms, including prudent management of costs without sacrificing reliability, recovery of critical infrastructure investments in PA through the DSIC mechanism, outperformance and integration of Rhode Island Energy, and optimization of our financing plan. Looking at 2024, the midpoint of our earnings forecast range is $1.69 per share, which again represents 7% earnings growth from the midpoint of our 2023 forecast. Since we initially communicated our earnings growth targets to investors, we remain on that consistent trajectory while extending that growth further into the future. We've done that again today with our extension of the 6% to 8% growth targets to 2027, supported by an updated capital investment plan, which I'll discuss in more detail in a couple of slides. Moving to Slide 13. On this slide, we've provided a walk from our 2023 actual results of $1.60 per share to the midpoint of our 2024 forecast, highlighting the projected drivers of the year-over-year increase by segment. Our Pennsylvania segment results are expected to increase by $0.05 per share in 2024, primarily due to returns on additional capital investments in transmission, higher sales volumes and lower O&M, partially offset by less distribution rider recovery and higher interest expense. We project our Kentucky segment results to increase by $0.07 per share in 2024, primarily driven by higher sales volumes due to the expected return to normal weather. Our Rhode Island segment results are expected to increase by $0.02 per share in 2024 compared to our 2023 results. This is primarily due to higher capital investment rider revenue and lower O&M, partially offset by higher depreciation expense. Finally, we project our corporate and other results to decrease by $0.05 per share in 2024, primarily due to higher interest expense and other factors that are not individually significant. Turning to Slide 14. Over the next four years, we have planned capital investments of $14.3 billion, focused on delivering superior service and enhancing the overall customer experience, while maintaining an affordable price. This includes advancing industry-leading grid modernization, expanding and hardening our transmission networks, improving the safety of our natural gas networks, and implementing our approved generation replacement plan in Kentucky. This plan represents a $2.4 billion increase in capital investments compared to the prior four-year plan. Approximately $1 billion of that increase is expected to occur in the 2024 to 2026 period. Most of that increase is projected to be in Pennsylvania and Kentucky as we continue to modernize our electric transmission and distribution systems and enhance reliability and resiliency. We continue to expect significant investment needs until the end of this decade as reflected in our 2027 forecast. This includes nearly $1.2 billion in Pennsylvania, of which approximately 65% is transmission investment under FERC formula rates; $1.8 billion of investment in Kentucky, primarily related to further enhancements on the electric and gas T&D systems and to execute our generation replacement plan; and it includes over $700 million of investment in Rhode Island as we continue to prepare the grid for significant levels of clean energy resources and enhance resiliency against increasingly severe storms while continuing our focus to maintain a safe and reliable gas network by replacing leak-prone pipe. Turning to Slide 15. These additional capital investments are projected to lead to annual rate base growth of 6.3% from 2023 to 2027. This compares to annual rate base growth of 5.6% in our prior plan period from 2022 to 2026. As you can see on the chart, two-thirds of our rate base relates to investments in our electric T&D networks, given the significant needs as we strengthen and modernize the grid. Importantly, while we project our total rate base to grow, rate base related to coal generation continues to decline from 2023 to 2027. In fact, the percentage of our total rate base related to coal generation is expected to be less than 12% by the end of 2027, down from about 18% today. Based on this trajectory, we expect this to continue to decline and be under 10% by the end of the decade. In summary, the result of our updated plan narrows the gap between our projected rate base growth and earnings growth targets as investment needs continue to increase with the evolving energy landscape. As such, we continue to be very focused on affordability and maximizing every dollar we spend. Our earnings growth in the near term continues to be driven by the combination of rate base growth and operating efficiencies that we believe maximizes value for both customers and shareowners. Moving to Slide 16. Today, we announced an increase in our quarterly cash dividend to $0.2575 per share. This results in an annualized dividend of $1.03 per share compared to our prior annualized dividend of $0.96 per share. The 7.3% increase aligns with our projected 2024 forecasted earnings growth and long-term EPS growth targets. We continue to expect future dividend growth to align with our earnings growth targets. The updated dividend remains within our targeted dividend payout range of 60% to 65% based on the midpoint of our 2024 earnings forecast. The combination of PPL's EPS growth and dividend yields provides investors with an attractive total return proposition in the range of 9% to 12%. Moving to an update on PPL's credit and our financing plan for 2024 on Slide 17. We continue to believe that having one of the sector's strongest balance sheets is a clear strategic advantage that provides the company with significant financial flexibility. Our updated business plan maintains strong credit metrics throughout. This includes maintaining a 16% to 18% FFO-to-debt ratio and a holding company to total debt ratio below 25%. We have limited near-term refinancing risk with zero maturities in 2024 and only $550 million of total maturities in 2025. Additionally, we continue to maintain limited floating rate debt exposure, mitigating volatility in our plan. We also continue to be uniquely positioned to continue to fund our growth without the need for equity throughout our updated planning period, which is now extended through 2027. As investors think about our financing plan for 2024, they should expect our activity to be primarily focused on funding our utility capital plans with operating company debt. We've already executed a portion of this plan with our $650 million PPL Electric Utilities deal in January, which was executed at attractive pricing. We're also planning to be in the market for Rhode Island with our first debt offering since the acquisition. We have no current plans for debt issuances in Kentucky or a PPO capital funding this year, but that is an area we'll continue to evaluate opportunistically in connection with market conditions and our strong financial position. In closing, I'm extremely pleased with our financial position and outlook to execute our updated plan. This concludes my prepared remarks. I'll now turn the call back over to Vince.

Thank you, Joe. As I mentioned earlier, this is a pivotal time for our industry, a time that requires us to lead with strength. There is no shortage of challenges facing our industry and the need to deliver the clean energy transition safely, reliably, and affordably for our customers. This is what gets me out of bed every morning and why I'm so excited to be a part of this industry at this moment in time. I'm convinced we have the right strategy for the right time, a strategy that prioritizes efficiency and affordability built on our core strength and will maximize long-term value for customers and shareowners alike. We are well-positioned to continue our competitive and predictable long-term earnings growth of 6% to 8% per year. We've established a derisked and disciplined business plan that advances a safe, reliable, affordable, and sustainable energy future while providing investors with an attractive return proposition. And finally, we have an experienced leadership team that is 100% committed to delivering on these objectives and backed by a dedicated team of 6,500 strong across PPL. With that, operator, let's open it up for questions.

We will now begin the question-and-answer session. The first question today comes from Shar Pourreza with Guggenheim Partners. Please go ahead.

Hey guys.

Morning Shar.

Good morning Vince. So, just on the transmission side, I see you've added a couple of hundred million to the Pennsylvania plan. How much of that is tied to the recent RTEP Window 3 awards? The reason why I'm asking is we've seen some significant increases in transmission needs and transfer capability across utilities in Eastern PJM and EMAC. So, just trying to get a sense for what has started to trickle into your plan versus incremental? Thanks.

Hey Shar, it's Joe. About half of that increase is driven by what you're describing and what we were awarded in that recent PJM window.

Got it. Perfect. And then just coming back to the Kentucky spend, the CPCN process obviously had deferred, but not quite closed the door to the second CCGT. Is that something like you could revisit and could the spend start to land in the outer years of the latest plan? Just kind of trying to get a sense for the next incremental focus. Thanks.

Yes. To your point, Shar, the order suggested that we should come back with another CPCN filing with an in-service date for that second CCGT in 2030. And so we would plan on doing that in a couple of years' time to start preparing for that and obviously, we'll be updating that as we go through the IRP process this year looking at load and generation economics and all that. So, the first point is really the updated IRP that we'll file this year and then ultimately, that will feed into a CPCN filing to have a plant in service in 2030.

Perfect. That’s all the questions I had. Congrats on the execution, it's pretty notable. Appreciate it.

Thanks Shar. Appreciate it.

The next question comes from Durgesh Chopra with Evercore ISI. Please go ahead.

Good morning, Vince. I have a question about Pennsylvania. Could you provide more details on your plans or any insights regarding the district? I'm asking because a peer water utility in the state is receiving significant attention for their rate case and there are new commissioners at the commission. Additionally, could you discuss the regulatory environment in the state and share any information on potential amendments to the DSIC mechanism? Thank you.

Sure. So, maybe a precursor to the DSIC waiver is really the LTIP process that we have in the state, Durgesh. In mid-January, we filed a petition with the commission to modify our LTIP, which covers the period from January 1, 2023, to December 31, 2027. So, we're already a year into this current LTIP plan. We did file for some significant adjustments to that plan, which the LTIP is really the precursor for the types of projects that would then be eligible to flow through the DSIC mechanism. We're proposing to increase that LTIP plan from about $500 million to about $800 million. We're including a new project or a new program for predictive failure technology. We've been doing a lot of testing on some new devices that we can put on the grid that actually enable us to identify failing equipment before it actually fails and causes an outage. So, we have some money in there that we want to include. We're also looking at just other distribution reliability projects. Our reliability is very strong in Pennsylvania being led by our transmission results there. We need to continue to improve our distribution reliability, so additional money in there for that. And then, of course, we have the approved projects through the IIJA process that we also updated the LTIP with. So, the parties have 30 days to file comments on our LTIP filing. And those comments are actually due today. So, we'll want to review those comments before we file for the DSIC waiver request. We have notified the PUC of our intention to file that waiver request. And we'd expect to file that relatively soon, Durgesh. At this point, the request what we're still working on, will likely be in the form of a higher cap on the DSIC.

Perfect. I appreciate that color and congrats on the quarter guys. Thank you.

Great. Thanks Durgesh.

The next question comes from Angie Storozynski with Seaport. Please go ahead.

Morning Angie. Good morning. I realize this might be an unfair question. We're looking to see a large data center potentially develop next to the Susquehanna nuclear plant, which is in your service area and was previously your asset. If this almost 1,000 megawatt data center were to happen, what kinds of investments would that necessitate from your team in terms of transmission and distribution? Is this already part of your plans?

Yes. So, let me talk about maybe data centers more broadly. You're referring to one that's specifically related or will be tied to the Susquehanna nuclear plant. So, most of that activity is really between Talen and the data center entity, although we are working with Talen to ensure that the reliability of power supply is there for that center. So, some incremental work there, Angie. What I would say, though, more broadly, beyond that specific instance, we've really started to see some data center activity, both in Pennsylvania and Kentucky, with some very large load requirements, again, 1-gig size projects, some smaller than that, but we are seeing some 1-gig projects as well. And in our territories, we have several positive attributes that these data centers are looking for. Not only is our reliability very strong in the top quartile, top decile range, especially in our transmission side of the business, which is where these generally are pulling their power from, our reliability there is extremely high. We also have relatively inexpensive land and an abundance of that land in both of our jurisdictions in PA and Kentucky. Then in Pennsylvania, in particular, we have a decent amount of capacity on the transmission network that we could add this load without a lot of investment that still is incredibly beneficial for our customers because that will still lower the overall cost and bill for our retail customers, the more and more load that we can connect to the transmission network. Of course, we're close to New England and the Mid-Atlantic region, especially as you think about Pennsylvania. So, there are many things in our territories that make this attractive. And, of course, in Kentucky, we have relatively cheap power prices. So, we're very active in working with the data center companies. We haven't included these in our load forecast at this point. We will do that at the appropriate time if and when we close these deals with these folks. But I would just say at this point, a lot of activity going on with the data centers as you're hearing with some of our peers as well.

And can I ask about Kentucky? So, you mentioned that the grid is getting tighter from the power supply perspective. I mean, one, does it make you sort of reassess your plans about retirements of coal plants and/or additions of new gas plants in the state? And also, how do those data center providers actually look at thermal power from gas and coal versus, I don't know, nuclear or renewables? Does that matter? Do they really care about the carbon footprint or emissions? Or is it mostly the total cost and how cheap the power is?

Yes, for the most part, what we're seeing, Angie, is reliability and reliability of power. I think you're right; there are some data center companies that also want to ensure that that power is coming from green energy sources like what we're seeing up in Susquehanna, as you mentioned earlier. But, for the most part, it's about reliability and the cost of that power because, obviously, these are huge costs for these data centers is the cost of the electricity itself. So, to your point, we don't have as much capacity in Kentucky as we do up here in Pennsylvania. And so we would expect there to be incremental investment needed to support data centers in Kentucky perhaps more so than we would need at least in the near-term in Pennsylvania. Certainly, this will feed into, as I was mentioning before, into our IRP process as we look at our load growth and think about our generation replacement strategy, a little too early I would say, to say we need to modify our current thinking on that. But clearly, if some of these large centers hit, we're going to have to factor that into the IRP and then ultimately into that CPCN request a couple of years from now.

Awesome. Thank you. Congrats.

Thank you.

The next question comes from Paul Zimbardo with Bank of America. Please go ahead.

Hi good morning team.

Good morning.

You reaffirmed all the O&M targets, but it seems like you exceeded the 2023 target by about $20 million. What would you need to see in order to raise those targets, and what factors contributed to that initial outperformance compared to the target?

Yes, certainly. Hey Paul, it's Joe. To begin with, the key factor behind our outperformance in 2023 was our realization of $75 million in savings, exceeding our initial target of $50 million to $60 million. This success was largely due to the acceleration of several initiatives planned for 2024. During the TMO process, we appointed initiative owners for each project aimed at delivering these savings, and we established milestones and KPIs for them. Implementing this level of rigor has enabled us to speed things up in certain areas, boosting our confidence in reaching our goal of $120 million to $130 million next year and $175 million in total. As Vince mentioned in his remarks, prioritizing the Utility of the Future while ensuring customer affordability is crucial. Moving forward, we will strive for greater efficiency as we progress through the plan, but I want to emphasize that we are firmly maintaining our projection of at least $175 million. Additionally, the growth we are discussing, extending to 2027, does not depend on achieving further efficiencies. Thus, any success in identifying additional efficiencies would represent extra value beyond our current plan.

Okay, great. Very clear. Regarding the timing strategy for rate cases, I understand Vince mentioned several factors, but one was missing—it’s about how rate cases are handled by competitors. I’m interested in knowing how significant that factor is when assessing your own plans, especially in Pennsylvania, considering the various rate cases that Durgesh referenced.

Yes. Since we have no rate cases in 2024, we can evaluate the regulatory environment and the results our peers are achieving. It's important to note that not every company has the same outcomes even within the same jurisdiction, so it will not entirely dictate our decision. However, we will monitor it and incorporate it into our decision-making. Additionally, with nothing on the horizon for the remainder of this year and likely our first case in Kentucky in 2025, I feel confident about our current timeline.

Okay, great. Thanks and nicely done last year.

Thank you.

Great. Thanks.

The next question comes from Anthony Crowdell with Mizuho. Please go ahead.

Hey good morning guys. Congrats on a good quarter. Just a couple of quick ones. One up to follow up from Angie's question. What's this load growth forecast you're assuming for 2024?

Hey Anthony, it's Joe. We're assuming 50 basis points load growth throughout our planning horizon.

Great. Following up on Durgesh's question regarding Pennsylvania, you're filing the DSIC and considering raising the cap you mentioned. I'm curious about the scenario if you don't receive approval. Would that lead to more frequent rate filings, or do you believe you have other methods to extend your timeframe in Pennsylvania?

Yes, it's the latter, Anthony. We have some modest value in the plan coming from the DSIC filing. I think the real benefit is it would enable us to stay out longer in Pennsylvania and make the investments that we had talked about. But yes, to your point, if for some reason that request does not get approved, we're comfortable we can manage that and still maintain the growth targets that we've talked about.

Great. Lastly, on Slide 17, I appreciate the detail regarding the lack of near-term financing. In 2026, there's capital funding as well as Electric Utility funding. Considering those maturities, do you plan to retire those financing vehicles or will you just roll them over? I'm curious about your strategy for those financing vehicles.

Yes, Anthony, we'll have to assess that as we get closer. Obviously, where interest rates are will play a big role in what we do there. So, I think it's a little early to tell how we'll treat those. Our assumption is that we will refinance them.

Great. Thanks so much, Vince. Talk to you guys soon.

Take care, Anthony. Go Rangers.

The next question comes from David Paz with Wolfe. Please go ahead.

Hey David. Good morning.

Good morning. Can you hear me?

Yes.

Thank you for your time. I would like to follow up on the previous question regarding the FFO-to-debt ratio. Specifically, where do you currently stand within the 16% to 18% range, and how do you see that evolving over the duration of your plan?

Yes, I would just say we're comfortably in that 16% to 18% range. We continue to have integration costs for Rhode Island that obviously impact the credit metric and those roll away. You will see the CapEx increase later in the plan. So, we feel really good about where we are within that range and kind of operate comfortably around the midpoint.

Thank you. I wanted to ask about the potential opportunities from the upcoming offshore wind solicitations. Do you see opportunities for more transmission? What do you have planned in that regard? Any additional information would be appreciated.

Sure. So, a couple of opportunities there. Obviously, we have the RFP that we've issued in Rhode Island. We are not the owners of that, but we would be the offtaker of that generation. So, to your point, we have in the plan the enhancements to the transmission grid to handle that offshore wind load. We've talked in the past about our joint venture with Wind Grid to potentially provide wet transmission solutions more broadly up in Rhode Island or New England that we would partner with them on where we would not own the wind turbine generation, but we would build out a mesh network of sorts to lower the overall cost of the transmission build-out as we think about upwards of 30 gigs of offshore wind over the next, say, decade being built out there. That opportunity will highly depend on where the US Treasury ultimately comes out on their implementation provisions for the IRA. So, we are monitoring those regulations very closely. The initial regs that came out from the treasury, we think were in error in proposing that the regulations would limit the eligibility of the ITC credit for that wet transmission only if that transmission is owned by the same taxpayer that owns the wind turbines themselves. That limitation, if the final rules come out that way, would unnecessarily raise the cost of the offshore wind industry, which we know is quite challenged. We continue to engage with the administration and other policymakers to try to improve that final regulation and expand it to all taxpayers, not just ones that own the turbines and to try to bring the overall cost of offshore wind down so that we can get this very important clean energy source up and running in the US. But I can't give you any assurance in terms of what that final rule is going to say. I can say we don't have any of that upside potential in our business plan. It's not in our growth projections at all at this point. I would say, kind of hinges on this. And then the states really coming together up there and partnering on this broader solution, which we believe will certainly bring the cost of offshore wind down.

Great. Thank you so much for all the color.

Sure.

This concludes our question-and-answer session. I would like to turn the conference back over to Vince Sorgi for any closing remarks.

Just want to say thanks for joining us. Again, strong end to 2023, really looking forward to 2024 and beyond. I've spent quite a bit of time talking about the Utility of the Future strategy. We do think that's an area that differentiates us from our peers, as well as the strength of our balance sheet and our overall dividend policy where we're growing the dividend in line with earnings. So, just appreciate everybody for calling us and for joining us and look forward to providing updates as we go through the year. Thanks so much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.