Q4 2025 FirstEnergy Corp Earnings Call

February 18, 2026

Is that my pleasure to turn the call over to Karen Saget vice president of investor relations?

Speaker #1: We're proud of the value we provide, and affordability is top of mind. We're committed to doing what we can to manage customer bill impacts.

Please go ahead. Karen.

Thank you. Good morning everyone and welcome to First energies year. End 2000.

Speaker #1: This includes continued discipline, and controllable costs, which is reflected in our baseline O&M savings of 15% or over $200 million since 2022. We're also working with state regulators and leaders to identify opportunities to mitigate bill increases.

Earnings review, our earnings release presentation slides and related financial information are available on our website at firstenergycorp.com.

Today's discussion will include the use of non-gaap financial measures and forward-looking statements which are subject to risks and uncertainties.

Speaker #1: We're advocating for initiatives to ensure generation supply better aligns with customer demand, and we're reviewing all programs that can provide relief to customers. In Ohio, a recent legislative change reduces property tax assessments for our utilities by about $100 million in 2027, which will have a positive impact on customer bills and our upcoming three-year rate plan.

Factors discussed in our earnings news, release. During today's conference call, and in our SEC filings could cause our actual results to defer materially from these forward-looking statements.

the appendix of today's presentation includes supplemental information along with the reconciliation of non-gaap financial measures

Please read our cautionary, statement and discussion of non-gaap financial measures on sides 2 and 3 of the presentation.

Speaker #1: As we make critical investments to provide reliable and resilient service, we are committed to ensuring our rates remain affordable. I am confident in our plan, our management team, and our ability to deliver on our commitments.

Our chairman president and chief executive officer. Brian Tierney will lead our call today, he is joined by John Taylor, our senior vice, president and Chief Financial Officer. Now it's my pleasure to turn the call over to Brian.

Thank you, Karen. Good morning everyone. Thank you for joining us today and for your interest in First Energy,

Speaker #1: Our execution in 2025 was strong, and we are focused on continuing that momentum. Now, I'll turn the call over to John.

Speaker #2: Thanks, Brian, and good morning, everyone. Today, I will review our financial accomplishments and results for 2025, and plan regulatory proceedings for 2026, but spend most of my time reviewing the expectations and key assumptions in our five-year plan.

2025 was a transformative year for our company. We executed on our plan achieved several important milestones and position First Energy for long-term, success and 1 of the most dynamic periods in our industry's history.

We delivered strong financial results. Across all of our key metrics, we Advanced key regulatory strategies in Ohio.

Speaker #2: As Brian mentioned, 2025 was a very important and successful year for FirstEnergy. Where we delivered on key financial metrics, including core EPS, base O&M, capital investments, and cash from operations.

and we reinforced our foundation for sustainable Financial growth, resulting in a positive rating Factor at S&P

In addition we are announcing a 36 billion 5-year capital investment program focused on improving customer, reliability, and grid, resiliency.

Speaker #2: You can review more details about our results, including reconciliations for core earnings and business segment drivers, and the strategic and financial highlights presentation, that was posted to our IR website yesterday afternoon.

this positions, the company to deliver a core earnings per share compounded, annual growth rate, near the top end of 6 to 8% from 2026 to 2030,

Speaker #2: Core earnings for the year came in at $2.55 per share, which is close to 8% above our 2024 results, and 2% above our original guidance midpoint of $2.50 per share.

We are also pursuing significant incremental investment opportunities, Over the pling Horizon.

Speaker #2: This was largely driven by new base rates, and formula rate investments, residential customer demand that was 3% above 2024 levels, and strong financial discipline in our operating expenses that allowed us to execute on significant additional maintenance work that was originally scheduled for future years.

These include New Generation Investments that will provide meaningful benefits to customers in West Virginia and additional Regional transmission Investments that are critical to maintaining grid stability.

Today we are reporting 2025 Gap, earnings of $1.77 per share compared to $1.70 per share in 2024.

Speaker #2: On a consolidated basis, our return on equity in 2025 was 9.8% on a rate base of $27.8 billion, versus 9.4% on $25.6 billion in 2024.

core earnings were $255 per share at the top end of our revised and increased guidance range for the year and an increase of 7.6% compared to 2024

Speaker #2: Investments were 5.6 billion dollars for the year, which are 25% above 2024 levels, and 12% above plan. These include nearly 75% in formula rate investments, with 50% in FERC-regulated transmission investments, where total FEO-owned transmission rate base increased 11% year over year.

We deployed 5.6 billion in customer focused Capital investments in 2025, an increase of nearly 25% versus last year and approximately 12% higher than our original plan for the year.

Our distribution reliability metrics, improved 10% across the system compared to 2024.

Speaker #2: Our financing plan included cash from operations of 3.7 billion dollars, which was more than $800 million above 2024 levels, subsidiary debt issuances of 3.4 billion dollars, and a 2.5 billion dollar convertible debt transaction in the second quarter.

Notably this includes significant year-over-year improvements and our New Jersey and Pennsylvania, service territories where we have commission approved investment programs.

finally, we declared quarterly dividends totaling $1.78 per share a 5% increase from 2024

This growth is consistent with our plan of providing a solid dividend yield and an attractive total shareholder return.

Speaker #2: In November, we received constructive regulatory outcomes in Ohio, including in our 2024 base rate case, which paved the way for an upgrade from S&P to BBB flat at FE Corp on a senior unsecured basis.

We are pleased with our performance in 2025 and we are committed to building on the success as we deliver on our long-term Financial plans.

Speaker #2: 2025 was a pivotal year for FirstEnergy, in terms of delivering on our plan, and we remain focused on meeting our commitments to investors going forward.

Our 36 billion Capital program represents a nearly 30% increase from our previous 5-year plan. It requires only modest amounts of equity to fund growth, which John will talk about later.

Speaker #2: Turning to our regulatory strategy, we plan to file traditional base rate cases later this year in both Maryland and West Virginia. In West Virginia, we plan to file in the second quarter to reflect a $1 billion increase in rate base since 2022.

This Capital program was designed through a coordinated approach. That aligns. Enterprise strategy with insights from our 5 Business units.

Speaker #2: Our current rates are based on a rate base of 3.2 billion dollars, with an equity layer of 50% and an allowed ROE of 9.8%.

IT addresses State mandated policies and local needs and it reflects our commitment to affordability while meeting customer expectations for Reliable service.

Speaker #2: In Maryland, we plan to file in the second half of the year to reflect investments we've made since 2022. Our current rates include rate base of nearly 700 million dollars, with an equity layer of 53% and an allowed return of 9.5%.

The updated plan includes 19 billion dollars of total transmission Investments. Across our Standalone transmission and integrated segments of 35% increase from our previous plan.

Companywide. We expect our updated investment plan to translate into 10% rate based growth over the planning period.

Speaker #2: In Ohio, we expect to file our three-year rate plan early in the second quarter, while we appreciate getting to a conclusion in our 2024 base rate case we are looking forward to filing under the three-year rate plan with forward test years to ensure timely recovery of critical investments we need to make on behalf of our customers.

Our strategy focused on prioritizing Investments for our customers and supported by constructive regulatory, jurisdictions posi positions us. Well to deliver a core earnings kegger near the top end of 6 to 8% through 2030.

We see opportunities for incremental Investments that will further support our customers in the region.

Speaker #2: In all three of these cases, we anticipate requested rate increases at or below annual inflation as compared to the current residential bill, where on average our monthly bills are approximately 20% below the in-state peer average.

This includes our plan generation investment in West Virginia.

last week we filed our request for the 1.2 gigawatt combined cycle, natural, gas generating facility, which will be located in maidsville West, Virginia,

Speaker #2: Lastly, in West Virginia, our proposed cost recovery for the generation investment consists of two phases. First, during the construction phase, we're proposing a generation surcharge based on precedent in the state, designed to recover our total financing cost with a requested equity return at our current authorized return of 9.8%.

We ran the build on transfer RFP and considered that option against our self-build engineering procurement and construction plan.

From that analysis we determined using an EPC approach, is the most prudent and cost-effective solution for our West Virginia customers.

Speaker #2: Then, after the power plant is placed in service, we would look to transition the recovery from a surcharge to base rates at a future base rate case.

We anticipate receiving approval in the second half of the year and we expect the new facility to be operational in 2031.

Speaker #2: As part of the financing plan for this investment, we filed an application with the U.S. Department of Energy seeking a low-interest loan under the Energy Dominance Financing Program.

Once approved by the West Virginia, Public Service Commission. We will include this 2.5 billion dollar investment in our financial plan.

This will increase our Consolidated. Rate-based, kagar, from 10 to 11 percent.

Speaker #2: We expect approval before the end of the year, which would save customers more than $200 million over the 30-year life of the loan, versus traditional financing.

When we announced this investment last November Governor, morsy challenged us to do more.

Speaker #2: Based on our forecast, once in service, this investment is expected to have minimal impact to customer bills. Moving to our five-year plan, our $36 billion capital investment plan is an increase of $8 billion or nearly 30% from our prior five-year plan.

I accept that challenge and with approval of this project, we will seek to add additional generation in the state to support growing data center activity.

Moving to slide 8. We also see incremental opportunities in our transmission business,

Speaker #2: As Brian discussed, this program results in expected rate base growth of 10% through 2030, led by transmission investments totaling $19 billion, and customer-focused distribution investments to strengthen and modernize the grid.

our transmission operations are among the largest in pjm and Encompass Critical interconnections with strategic high voltage corridors and will require ongoing Investments to support load growth.

Speaker #2: 100% of our capital plan is focused on improving customer reliability and resiliency of the system, and only consists of awarded, approved, and contracted projects.

We began our transmission investment program and in 2014 over the last 12 years, we've deployed 17 billion dollars to replace aging equipment and upgrade the health of the system.

Speaker #2: We increased transmission investments by $5 billion or 35% from our includes transmission investments in both our standalone transmission and integrated segments. The plan also includes regional transmission projects from the 2025 and prior PGM open windows totaling $4 billion.

This work has addressed about 1/3 of our transmission lines and major substation assets.

Substantial investment will be required as approximately 70% of the lines and 30% of substation assets are expected to reach end of life, over the next decade.

Speaker #2: Total distribution investments in our Distribution and Integrated segments are increasing 25%, or $3 billion, from the prior plan. This largely reflects increases for reliability investments in core infrastructure upgrades, with the largest increase in Pennsylvania, where we are accelerating investments under the LTIP program and a recovery through the existing Distribution System Improvement Surcharge.

Additionally, we have an ongoing opportunity for growth associated with the regulatory required projects, such as Investments, awarded to First Energy, as part of the most recent pjm open window process.

since 2022, our Standalone transmission and integrated segments have been awarded approximately 5 billion dollars in competitive transmission projects,

Speaker #2: This investment plan includes targeted customer benefits both on the transmission and distribution systems, and excludes the significant incremental investments we're planning in West Virginia and additional upside in transmission.

Our ideally situated transmission system and our transmission planning expertise position us to continue our success with the competitive open window process.

We expect the upcoming 2026 open window solicitation will be similar in scope and scale to what we have seen in the past years.

Speaker #2: Moving to core earnings, we are well positioned to deliver compounded annual earnings growth near the top end of our 6 to 8 percent growth rate from 26 to 2030.

We expect the pjm board to vote and approve. The next round of projects in the first quarter of 2027.

At that time, we will update our investment plan to include any awards.

Speaker #2: This sustainable long-term growth starts with our $36 billion capital investment plan, with 75% in formula rate programs, and 10% rate base growth, targeting a consolidated ROE of 9.5% to 10% through the planning period.

Turning to slide 9.

As we make the necessary investments in the reliable and resilient grid that drives economic growth for our communities, we are actively addressing affordability.

Speaker #2: Our load forecast includes active and contracted customers, resulting in 2% customer demand growth, which is largely driven by a 5% increase from industrials that typically are on a demand-based, not volume-based charge.

On average, we control just 32% of the total customer electric bill in our deregulated States.

The generation component represents about 60% of the total bill.

Speaker #2: As our data center pipeline becomes contracted, this will be incremental to this forecast both from a customer demand and capital investment perspective. As we've demonstrated in the past, our plan includes financial discipline with our base O&M expenses, with modest increases of 1% to 1.5% per year.

Across these states. Our customer bills are approximately 20% below the in-state per average and remain at or below 2.5% of our customers share of wallet.

Brian Tierney: Economic growth for our communities. We are actively addressing affordability. On average, we control just 32% of the total customer electric bill in our deregulated states. The generation component represents about 60% of the total bill. Across these states, our customer bills are approximately 20% below the in-state peer average and remain at or below 2.5% of our customers' share of wallet. In fact, with our capital plan, by the time we get to 2030, our bills are expected to remain below the current rates of our in-state peers. We're proud of the value we provide, and affordability is top of mind. We're committed to doing what we can to manage customer bill impacts.

In fact, with our Capital plan, by the time we get to 2030, our bills are expected to remain below the current rates of our in-state peers.

Speaker #2: Operating expenses will continue to be a focus of the management team, as we look to deploy technology, artificial intelligence, and continuous improvement initiatives to further help offset planned increases.

We're proud of the value. We provide an affordability is top of mind. We're committed to doing what we can to manage customer bill impacts.

Speaker #2: Finally, our financing plan targets strong investment-grade credit metrics through cash from operations, long-term debt issuances, and modest levels of equity or equity-like securities that we have discussed previously.

This includes continued discipline and controllable costs which is reflected in our Baseline onm Savings of 15% or over million dollars since 2022.

Brian Tierney: In fact, with our capital plan, by the time we get to 2030, our bills are expected to remain below the current rates of our in-state peers. We're proud of the value we provide, and affordability is top of mind. We're committed to doing what we can to manage customer bill impacts.

Speaker #2: Our cash from operations funds 65% of our total investment plan and includes a modest impact from expected deductions from tax repairs on the corporate alternative minimum tax.

We're also working with State regulators and leaders, to identify opportunities. To mitigate Bill increases we are advocating for initiatives to ensure generation Supply, better aligns with customer demand, and we're reviewing all programs that can provide relief to customers.

Speaker #2: Because of our tax position, including existing AMT deductions, the expected impact of tax repairs on cash flow is less than 2% and does not change our overall plan.

Brian Tierney: This includes continued discipline and controllable costs, which is reflected in our baseline O&M savings of 15% or over $200 million since 2022. We're also working with state regulators and leaders to identify opportunities to mitigate bill increases. We are advocating for initiatives to ensure generation supply better aligns with customer demand, and we're reviewing all programs that can provide relief to customers. In Ohio, a recent legislative change reduces property tax assessments for our utilities by about $100 million in 2027, which will have a positive impact on customer bills in our upcoming three-year rate plan. As we make critical investments to provide reliable and resilient service, we are committed to ensuring our rates remain affordable. I am confident in our plan, our management team, and our ability to deliver on our commitments.

Speaker #2: Our debt financing plan includes $16 billion in new long-term debt issuances, with FE Corp debt as a percentage of total debt at 20%, versus 25% at the end of last year.

in Ohio, a recent legislative change reduces property, tax assessments for our utilities by about a hundred million dollars in 2027, which will have a positive impact on customer bills in our upcoming 3 year rate plan

as we make critical Investments to provide reliable and resilient service, we are committed to ensuring our rates, remain affordable,

Speaker #2: And our equity needs are up to $2 billion, which includes our $100 million annual DRIP program, which has historically been in place. We will explore all options to fund our equity needs, including hybrid instruments and anticipate any annual common equity issuances, including further DRIP, to be approximately 1% of current market cap on average through the forecast period.

I am confident in our plan.

Brian Tierney: In Ohio, a recent legislative change reduces property tax assessments for our utilities by about $100 million in 2027, which will have a positive impact on customer bills in our upcoming three-year rate plan. As we make critical investments to provide reliable and resilient service, we are committed to ensuring our rates remain affordable. I am confident in our plan, our management team, and our ability to deliver on our commitments.

Strong and we are focused on continuing that momentum.

Now, I'll turn the call over to John.

Speaker #2: In closing, we believe we have a compelling story and value proposition. Our plan is strong, focused on critical investments with significant incremental opportunities. We have a proven track record of executing on regulatory strategies that are focused on the customer and provide solid returns to our investors.

Thanks, Brian, and good morning everyone. Today, I will review our financial accomplishments and results for 2025 and plan regulatory proceedings for 2026. That's been most of my time reviewing, the expectations in key assumptions in our 5-year plan.

Brian Tierney: Our execution in 2025 was strong, and we are focused on continuing that momentum. Now, I'll turn the call over to Jon.

Speaker #2: And we have demonstrated our ability to be disciplined with our cost structure, not only to minimize regulatory lag, but to provide benefits to customers.

As Brian mentioned, 2025 was a very important and successful year for First Energy, where we delivered on key financial metrics including core EPS based on and M capital Investments and cash from operations.

Speaker #2: We believe we provide a compelling low-risk value proposition to investors with a total shareholder return opportunity of approximately 12%, with upside potential. We are committed to meeting our commitments for our customers, our communities, and our investors, and are excited about the future.

Jon Taylor: Thanks, Brian, and good morning, everyone. Today, I will review our financial accomplishments and results for 2025 and plan regulatory proceedings for 2026, but spend most of my time reviewing the expectations and key assumptions in our five-year plan. As Brian mentioned, 2025 was a very important and successful year for FirstEnergy, where we delivered on key financial metrics, including core EPS, base O&M, capital investments, and cash from operations. You can review more details about our results, including reconciliations for core earnings and business segment drivers, in the strategic and financial highlights presentation that was posted to our IR website yesterday afternoon.

You can review more details about our results, including reconciliations for core earnings and business, segments, drivers. And the Strategic and financial highlights presentation, that was posted to our IR website yesterday afternoon.

Speaker #2: Thank you for your time. Now let's open the call to Q&A.

Speaker #1: Thank you. We'll now be conducting a question-and-answer session. May I ask you to please limit yourself to one question and one follow-up, to allow as many as possible to ask questions.

core earnings for the year came in at 2.555% of our 2024 results and 2% above our original guidance midpoint of 250 per share,

Speaker #1: If you'd like to ask a question at this time, you may press star one on your telephone keypad. And a confirmation tone indicate your line is in the question queue.

Speaker #1: You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

This was largely driven by new base rates and formula rate Investments residential customer demand. That was 3%, above 2024 levels and strong financial discipline in our operating expenses that allowed us to execute on significant additional maintenance work, that was originally scheduled for future years.

Jon Taylor: Core earnings for the year came in at $2.55 per share, which is close to 8% above our 2024 results and 2% above our original guidance midpoint of $2.50 per share. This was largely driven by new base rates and formula rate investments, residential customer demand that was 3% above 2024 levels, and strong financial discipline in our operating expenses that allowed us to execute on significant additional maintenance work that was originally scheduled for future years. On a consolidated basis, our return on equity in 2025 was 9.8% on rate base of $27.8 billion, versus 9.4% on $25.6 billion in 2024.

Speaker #1: Thank you. And our first question comes from the line of Nick Campanella with Barclays. Please proceed with your questions.

Speaker #3: Hey, good morning. Thanks for all the updates.

Speaker #4: Good morning, Nick.

Speaker #3: Hey, morning. So appreciate the disclosure, 6 to 8 at the high end now. You mentioned West Virginia could be another $1.2 billion incremental to the plan, and that would bring your RAB CAGR to 11%.

On a Consolidated basis. Our return on equity in 2025, was 9.8% on rate base of 27.8 billion versus 9.4% on 25.6 billion in 2024.

Investments were 5.6 billion for the year which are 25% above 2024 levels, and 12% above plan.

Speaker #3: Just what's the incremental financing that would be associated with that, given my understanding is there is kind of a proposal for cash CWIP? And would this kind of put you comfortably above the 6 to 8 range?

these include nearly 75% in Formula rate Investments with 50% in FK regulated transmission Investments were total fee on transmission rate, base increased 11% year-over-year,

Speaker #3: Say by 29, or how should we kind of think about that? Thanks.

Speaker #4: Yeah, Nick, this is John. I'll take the financing piece of that. So obviously, the cash recovery will help pretty significantly. So I expect that to be 15% of the total investment.

Jon Taylor: Investments were $5.6 billion for the year, which are 25% above 2024 levels and 12% above plan. These include nearly 75% in formula rate investments, with 50% in FERC-regulated transmission investments, where total FE-owned transmission rate base increased 11% year-over-year. Our financing plan included cash from operations of $3.7 billion, which was more than $800 million above 2024 levels, subsidiary debt issuances of $3.4 billion, and a $2.5 billion convertible debt transaction in Q2. In November, we received constructive regulatory outcomes in Ohio, including in our 2024 base rate case, which paved the way for an upgrade from S&P to BBB flat at FE Corp. on a senior unsecured basis.

in plan included, cash from operations of 3.7 billion dollars, which was more than $800 million above, 2024 levels, subsidiary debt, issuances of 3.4 billion dollars and a 2.5 billion convertible debt transaction in the second quarter,

Speaker #4: We'll target 50% of the total investment with the Department of Energy loan. With the rest, likely being new equity to fund the investment.

Speaker #3: And then, on the growth, Nick, as we get these incremental investment opportunities coming in—whether it's generation or transmission—we'll be updating what growth looks like as we put those in the plan.

In November, we received constructive regulatory outcomes in Ohio, including in our 2024 base rate case, which paved the way for an upgrade, from S&P to Triple B flat at FEC Corp on a senior unsecured basis.

2025 was a pivotal year for First Energy in terms of delivering on our plan.

And we remain focused on meeting our commitments to investors going forward.

Speaker #1: Okay. Okay. So I'll take 15% of that capex. Thank you for that. And then maybe just, I guess there's just been a bigger focus on Pennsylvania from investors given the various comments out of Governor Shapiro and I know the distribution plan across the company is up.

Jon Taylor: In November, we received constructive regulatory outcomes in Ohio, including in our 2024 base rate case, which paved the way for an upgrade from S&P to BBB flat at FE Corp. on a senior unsecured basis.

turning to our regulatory strategy, we plan to file traditional base rate cases later this year in both Maryland and West Virginia

in West Virginia, we plan to file in the second quarter to reflect a 1 billion dollar increase in rate base since 2022.

Speaker #1: Pennsylvania, I think you're doing 6.7 billion. I also understand your rates are below average there, but just how is the increase capex impacting your earned returns in the state?

Jon Taylor: 2025 was a pivotal year for FirstEnergy in terms of delivering on our plan, and we remain focused on meeting our commitments to investors going forward. Turning to our regulatory strategy, we plan to file traditional base rate cases later this year in both Maryland and West Virginia. In West Virginia, we plan to file in Q2 to reflect a $1 billion increase in rate base since 2022. Our current rates are based on a rate base of $3.2 billion, with an equity layer of 50% and an allowed ROE of 9.8%. In Maryland, we plan to file in the second half of the year to reflect investments we've made since 2022.

Our current rates are based on a rate base of 3.2 billion dollars with an equity layer of 50%, and an allowed Roe of 9.8%.

Speaker #1: Just relative to that 10 that you show on the slides, when do you think you're going to be going back in for a case there?

Speaker #1: Thanks.

Speaker #4: Yes. So Nick, it's not that long that we've come out of a rate case there. And the big part of that rate case was investment in the distribution system.

And Maryland, we plan to file in the second half of the year to reflect Investments. We've made since 2022. Our current rates include rate base of nearly 700 million with an equity layer of 53% and allowed return of 9.5%.

Speaker #4: And so the increases that we got were to fund that investment, and we're actively doing that. We have a very targeted long-term investment program there.

Speaker #4: That's been approved as well. So the focus for us in Pennsylvania has been incremental investment in the distribution system to drive improvements in reliability.

In Ohio we expect to file our 3 year rate plan early in the second quarter. While we appreciate getting to a conclusion in our 2024 base rate case, we are looking forward to filing under the 3 year rate plan with Ford test years to ensure timely recovery of critical Investments. We need to make on behalf of our customers.

Jon Taylor: Our current rates include rate base of nearly $700 million, with an equity layer of 53% and an allowed return of 9.5%. In Ohio, we expect to file our three-year rate plan early in Q2. While we appreciate getting to a conclusion in our 2024 base rate case, we are looking forward to filing under the three-year rate plan with 4 test years to ensure timely recovery of critical investments we need to make on behalf of our customers. In all three of these cases, we anticipate requested rate increases at or below annual inflation as compared to the current residential bill, where on average, our monthly bills are approximately 20% below the in-state peer average. Lastly, in West Virginia, our proposed cost recovery for the generation investment consists of 2 phases.

And all 3 of these cases, we anticipate requested rate increases at or below annual inflation as compared to the current residential bill.

Speaker #4: And that's what we're seeing in the plan. So that's what our focus has been. We're going to go in when we need to again to reflect that increased rate base that we've been adding to since the last rate case.

We're on average, our monthly bills are approximately 20% below the in-state per average.

Lastly, in West Virginia, our Pro proposed cost recovery for the generation investment consists of 2 phases.

Speaker #4: But the focus in both Pennsylvania and New Jersey has always been we want to see the investment coming from the company in those states to drive reliability.

Speaker #4: And that's what we're doing. And that does leave us in a position where we have to keep going in for rate cases to update the rate base and our cost structure as well.

Jon Taylor: In all three of these cases, we anticipate requested rate increases at or below annual inflation as compared to the current residential bill, where on average, our monthly bills are approximately 20% below the in-state peer average. Lastly, in West Virginia, our proposed cost recovery for the generation investment consists of 2 phases.

First, during the construction phase, we're proposing a generation surcharge based on precedent in the state. Designed to recover our total financing cost with a requested Equity return, at our current authorized return of 9.8%.

Speaker #4: But whether it's in Pennsylvania, New Jersey, all of our states, we're keenly focused on affordability. And that has us focusing on things like our own O&M and then other bills, charges.

Then after the power plan is placed in service. We would look to transition the recovery from a search charge to base rates at a future base rate case.

Speaker #4: We mentioned taxes in Ohio coming down that are flowing through the rates. But investment and affordability are the things that are top of mind for us in Pennsylvania and our other states.

Jon Taylor: First, during the construction phase, we're proposing a generation surcharge based on precedent in the state, designed to recover our total financing cost with a requested equity return at our current authorized return of 9.8%. Then, after the power plant is placed in service, we would look to transition the recovery from a surcharge to base rates at a future base rate case. As part of the financing plan for this investment, we filed an application with the U.S. Department of Energy, seeking a low-interest loan under the Energy Dominance Financing Program. We expect approval before the end of the year, which would save customers more than $200 million over the 30-year life of the loan versus traditional financing. Based on our forecast, once in service, this investment is expected to have minimal impact to customer bills.

As part of the financing plan for this investment, we filed an application. With the US Department of energy, seeking a low interest loan under the energy dominance financing program. We expect approval before the end of the year which would save customers more than dollars over the 30-year life of the loan versus traditional financing.

Speaker #3: Yeah, Nick, and I would just add on that roughly 45% of the investment that we're making in Pennsylvania is under the LTIP program, which is recovered through the DISC surcharge.

Speaker #3: So that provides for interim recovery of our investments and really helps us kind of with base rate case planning and that type of thing.

Jon Taylor: As part of the financing plan for this investment, we filed an application with the U.S. Department of Energy, seeking a low-interest loan under the Energy Dominance Financing Program. We expect approval before the end of the year, which would save customers more than $200 million over the 30-year life of the loan versus traditional financing. Based on our forecast, once in service, this investment is expected to have minimal impact to customer bills.

Moving to our 5-year plan, our 36 billion. Capital investment plan is an increase of 8 billion dollars or nearly 30% from our prior 5 year plan.

Speaker #1: Thanks for all the thoughts.

Speaker #4: Thanks, Nick.

Speaker #1: The next question comes from the line of Sharparusa with Wells Fargo. Please proceed with your question.

As Brian discussed this program results in expected. Rate-based, growth of 10% through 2030, led by transmission Investments, totaling 19 billion dollars and customer-focused distribution Investments to strengthen, and modernize the grid,

Speaker #5: Hey, guys. Good morning.

Speaker #4: Good morning, Shar.

Speaker #5: Good morning. Brian, I just want to make sure we have the numbers correct here. So the capex numbers were obviously healthy. The rate base growth is likely a little bit closer to 10.4%, right?

Jon Taylor: Moving to our five-year plan, our $36 billion capital investment plan is an increase of $8 billion or nearly 30% from our prior five-year plan. As Brian discussed, this program results in expected rate base growth of 10% through 2030, led by transmission investments totaling $19 billion and customer-focused distribution investments to strengthen and modernize the grid. 100% of our capital plan is focused on improving customer reliability and resiliency of the system and only consists of awarded, approved, and contracted projects. We increased transmission investments by $5 billion or 35% from our previous five-year plan. This includes transmission investments in both our standalone transmission and integrated segments. The plan also includes regional transmission projects from the 2025 and prior PJM open windows, totaling $4 billion.

100% of our Capital plan is focused on improving customer reliability and resiliency of the system and only consists of awarded approved and contracted projects.

We increase transmission Investments by 5 billion dollars or 35% from our previous 5-year plan.

Speaker #5: Just as you're adding West Virginia, remind us, does that sort of get you closer to 11.4%? Because I know we're getting quoted on 11%.

This includes transmission investments in both our Standalone transmission and integrated segments.

Speaker #5: But I think West Virginia is probably 100 basis points creative to that. And then how do we sort of think about the delta between 11.4% when you add West Virginia in it and your EPS growth where you're already at the higher end?

The plan also includes Regional transmission projects from the 2025 and prior PGM open Windows toting, 4 billion dollars,

Total distribution investments in our distribution and integrated. Segments are increasing 25% or 3 billion dollars from the prior plan.

Speaker #5: So I guess another way to ask it is, what is the amount of lag between rate-based growth and the newly guided let's just say 11.4% rate-based growth when you add West Virginia in there?

Jon Taylor: We increased transmission investments by $5 billion or 35% from our previous five-year plan. This includes transmission investments in both our standalone transmission and integrated segments. The plan also includes regional transmission projects from the 2025 and prior PJM open windows, totaling $4 billion.

This largely reflects increases for reliability Investments, the core infrastructure upgrades with the largest increase in Pennsylvania where we are accelerating Investments under the ltip program and are recovered through the existing distribution system. Improvements surcharge,

Speaker #4: Yeah. So Nick, as we're looking at this, we're trying to give transparency and insight into what's in the plan today and then what are the things that could be added to the plan and what those additions would look like.

Jon Taylor: Total distribution investments in our distribution and integrated segments are increasing 25% or $3 billion from the prior plan. This largely reflects increases for reliability investments and core infrastructure upgrades, with the largest increase in Pennsylvania, where we are accelerating investments under the LTIP program and are recovered through the existing distribution system improvement surcharge. This investment plan includes targeted customer benefits, both on the transmission and distribution systems, and excludes the significant incremental investments we're planning in West Virginia and additional upside in transmission. Moving to core earnings, we are well-positioned to deliver compounded annual earnings growth near the top end of our 6% to 8% growth rate from 2026 to 2030.

This investment plan includes targeted customer benefits, both on the transmission and Distribution Systems and excludes the significant incremental, Investments, we're planning in West, Virginia, and additional upside in transmission.

Speaker #4: Your math is about right on the 10.4 to 11.4. And we've always said, we'll update the capex plan. We'll update earnings as things like and incremental transmission comes in.

Moving to core earnings. We are well, positioned to deliver compounded annual earnings growth near the top end of our 6 to 8% growth rate from 26 to 2030.

Speaker #4: But what we're not going to do is put things in there that are speculative and not approved yet. And then have to take them out of the plan.

Speaker #4: So our idea is, here's what the plan is today. Here's what the incremental could be. And if we need to change, what the earnings growth rate is as we add things to the plan, we'll do that at that time.

This sustainable long-term growth starts with our 36 billion, capital investment plan with 75% in Formula rate, programs, and 10% rate, based growth targeting a Consolidated, Roe of 9.5% to 10% through the planning period.

Speaker #5: Got it. Okay, thanks for clarifying that, because I know, Brian, there's a lot of confusion out there with 10% versus 10.4%. And there's a big difference between 10% and 10.4%.

Our load forecast, includes active, and contracted customers. Resulting in 2% customer demand growth, which is largely driven by a 5% increase from Industrials that typically are on a demand-based. Not volume-based charge.

Jon Taylor: This sustainable long-term growth starts with our $36 billion capital investment plan, with 75% in formula rate programs and 10% rate base growth, targeting a consolidated ROE of 9.5% to 10% through the planning period. Our load forecast includes active and contracted customers, resulting in 2% customer demand growth, which is largely driven by a 5% increase from industrials that typically are on a demand-based, not volume-based charge. As our data center pipeline becomes contracted, this will be incremental to this forecast, both from a customer demand and capital investment perspective. As we've demonstrated in the past, our plan includes financial discipline with our base O&M expenses, with modest increases of 1% to 1.5% per year.

Speaker #5: And then just lastly on West Virginia, can you just expand on the incremental opportunities post the current project? So what's the potential timing there, the turbine supplies?

As our data center pipeline becomes contracted, this will be incremental to this forecast, both from a customer demand and capital investment perspective.

As we've demonstrated in the past, our plan includes Financial discipline with our base onm expenses, with modest increases of 1 to 1 and a half percent per year.

Speaker #5: Where are the DC conversations? Etc. Thanks.

Speaker #4: Yeah, thanks for that, Shar. So, as we look at our states and we look at states that are wanting us to invest in regulated generation, West Virginia stands at the top of that.

Operating expenses will continue to be a focus of the management team as we look to deploy technology, artificial intelligence and continuous Improvement initiatives to further help. Offset planned increases.

Speaker #4: I mentioned the governor's challenge to us to do more. He has a 50-gigawatt by 2050 goal that he is searching for. And if we get constructive regulatory approval here, we're going to be going back into West Virginia and looking at ways that we can add another 1,200 megawatts—hopefully dedicate that to data center load—talking with hyperscalers, with developers, about doing that.

Finally, our financing plan targets, strong investment grade credit metrics through cash from operations, long-term debt, issuances and modest levels of equity or Equity like Securities that we have discussed previously.

Jon Taylor: Operating expenses will continue to be a focus of the management team as we look to deploy technology, artificial intelligence, and continuous improvement initiatives to further help offset planned increases. Finally, our financing plan targets strong investment-grade credit metrics through cash from operations, long-term debt issuances, and modest levels of equity or equity-like securities that we have discussed previously. Our cash from operations funds 65% of our total investment plan and includes a modest impact from expected deductions from tax repairs on the corporate alternative minimum tax. Because of our tax position, including existing AMT deductions, the expected impact of tax repairs on cash flow is less than 2% and does not change our overall plan.

Our cash from operations fund, 65% of our total investment plan and includes a modest impact from expected. Deductions from tax repairs on the corporate Alternative, Minimum Tax

Speaker #4: And the relationships that we're beginning now with suppliers like Siemens on the turbine side, in terms of what we're doing with the first EPC that we're going forward with, will leverage those relationships going forward for the incremental build.

Because of our tax position, including existing AMT, deductions the expected impact of tax repairs on cash. Flow is less than 2% and does not change our overall plan. Our debt financing plan, includes 16 billion dollars in new long-term debt issuances with Fe Corp debt as a percentage of total debt at 20% versus 25% at the end of last year.

Speaker #4: But when we look at our universe of opportunity to invest in generation, West Virginia's said to us, we're open for business, want you to invest here.

And our Equity needs are up to 2 billion dollars, which includes our hundred million dollar annual drip program which has historically been in place.

Speaker #4: And as a regulated, fully integrated utility there, looking to drive economic development, we want to be a key part of that for our customers and the state of West Virginia.

Jon Taylor: Our debt financing plan includes $16 billion in new long-term debt issuances, with FE Corp debt as a percentage of total debt at 20% versus 25% at the end of last year. Our equity needs are up to $2 billion, which includes our $100 million annual DRIP program, which has historically been in place. We will explore all options to fund our equity needs, including hybrid instruments, and anticipate any annual common equity issuances, including for the DRIP, to be approximately 1% of current market cap on average through the forecast period. In closing, we believe we have a compelling story and value proposition. Our plan is strong, focused on critical investments with significant incremental opportunities. We have a proven track record of executing on regulatory strategies that are focused on the customer and provide solid returns to our investors.

We will explore all options to fund our Equity needs including hybrid instruments and anticipate any annual common Equity issuances, including for the drip, to be 1% of current market cap on average through the forecast. Period.

Speaker #5: Got it. Appreciate it. Thank you, guys.

Speaker #4: Thanks, Shar.

Speaker #1: Our next question comes from the line of David Ricardo with Morgan Stanley. Please proceed with your question.

In closing, we believe we have a compelling story and value proposition. Our plan is strong focused on critical Investments with significant incremental opportunities,

Speaker #6: Hey, thanks so much. Good morning.

Speaker #4: Good morning, David.

We have a proven track record of executing on regulatory strategies that are focused on the customer and provide solid returns to our investors.

Speaker #6: I'm wondering if you could touch on New Jersey and the backdrop there, kind of expectations for timing of your next rate case and just overall your perspective following the executive orders and some of the changes we could see ahead in the regulatory backdrop.

Jon Taylor: In closing, we believe we have a compelling story and value proposition. Our plan is strong, focused on critical investments with significant incremental opportunities. We have a proven track record of executing on regulatory strategies that are focused on the customer and provide solid returns to our investors.

Speaker #4: Yeah. So obviously, affordability is front and center for Governor Sherrill. We've been working with her and her staff to look at ways that we can address affordability in the states.

And we have demonstrated our ability to be disciplined with our cost structure, not only to minimise regulatory lag, but to provide benefits to customers, we believe we provide a compelling low-risk value, proposition to investors with a total shareholder, return opportunity of approximately 12% with upside potential. We are committed to meeting our commitments for our customers, our communities, and our investors, and are excited about the future.

Thank you for your time. Now, let's open the call to Q&A.

Speaker #4: What are items on the bill that we can either reduce or eliminate? But again, when we were in our last rate case there, the real focus of that was the worst-performing circuits that we had, and the big point of that rate case was, are we going to make the incremental investment to drive increased reliability in those circuits?

Jon Taylor: We have demonstrated our ability to be disciplined with our cost structure, not only to minimize regulatory lag, but to provide benefits to customers. We believe we provide a compelling, low-risk value proposition to investors with a total shareholder return opportunity of approximately 12% with upside potential. We are committed to meeting our commitments for our customers, our communities, and our investors and are excited about the future. Thank you for your time. Now, let's open the call to Q&A.

Thank you. We'll now be conducting a question and answer session.

We ask you, please. Submit yourself to 1 question and 1 follow-up to allow as many as possible to ask questions.

Indicate your lines and the question queue?

You may press star 2. If you'd like to remove your question from the queue.

Speaker #4: We've been doing that since the last rate case, and we're seeing related improvement in reliability there, which is what New Jersey wanted from that case.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Thank you. We'll now be conducting a question and answer session. We ask you to please limit yourself to one question and one follow-up to allow as many as possible to ask questions. If you'd like to ask a question at this time, you may press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you, and our first question comes from the line of Nick Campanella with Barclays. Please proceed with your questions.

Thank you. And our first question comes from the line of Nick Campanella with Mark Lace pleased to see what your questions.

Speaker #4: So, we're going to continue with that activity. We're going to work constructively with the Governor and her staff, with the BPU, and others to address affordability.

Hey, good morning, thanks for all the updates.

Speaker #4: But ultimately, we'll have to go back in for another rate case to keep that investment coming. Our rates in New Jersey are significantly below our in-state peers.

Speaker #4: And even with the investment that we have planned there, we anticipate to still be below our in-state peers. But we have to improve reliability.

Speaker #4: We're singularly focused on that, and affordability at the same time. So we're going to work constructively with everyone to time a next rate case and try to maintain that affordability as well.

Andrew Weisel: Hey, good morning. Thanks for all the updates.

Nick Campanella: Hey, good morning. Thanks for all the updates.

Good morning, Nick. Hey, good morning. Um, so appreciate uh, the disclosure 6 to 8 at the high end. Now, you mentioned West Virginia could be another 1.2 billion incremental to the plan and that would bring your wrap kager to 11%. Um, just what's the incremental financing? That would be associated with that. Uh, given my understanding is there is kind of a proposal for um, cache c Whip and um, with this kind of put, you comfortably above the 6, to 8 range, you know, Say by 29 or how should we kind of think about that? Thanks.

Jon Taylor: Good morning, Nick.

Nick Campanella: Hey, morning. So appreciate the disclosure, 6 to 8 at the high end now. You mentioned West Virginia could be another $1.2 billion incremental to the plan, and that would bring your RAB CAGR to 11%. Just what's the incremental financing that would be associated with that, given my understanding is there is kind of a proposal for cash CWIP. Would this kind of put you comfortably above the 6 to 8 range, you know, say by 2029, or how should we kind of think about that? Thanks.

Speaker #6: Got it. Okay. Thanks. That's helpful. And then, could you touch on the outlook that's embedded in your plan for ROEs? I guess it looks like you're assuming basically flat-ish, kind of holding ROEs steady throughout the plan.

Yeah, Nick. This is John I'll take the financing, uh, piece of that. So, you know, obviously the cash recovery will help uh, pretty significantly. So I expect that to be, 15% of the total investment will Target. 50% of the total investment with the Department of energy loan with the rest, likely being new Equity to fund the investment.

Speaker #6: I wanted to confirm that if you're around a 9.8 now, and you're planning on just holding that essentially between 9.5 and 10 going forward, I guess.

and and then on the growth neck, as, as we get these incremental,

Brian Tierney: Yeah, Nick, this is Jon. I'll take the financing piece of that. So you know, obviously, the cash recovery will help pretty significantly, so I expect that to be 15% of the total investment. We'll target 50% of the total investment with the Department of Energy loan, with the rest likely being new equity to fund the investment. And then on the growth, Nick, as we get these incremental investment opportunities coming in, whether it's generation or transmission, we'll be updating what growth looks like as we put those in the plan.

Jon Taylor: Yeah, Nick, this is Jon. I'll take the financing piece of that. So you know, obviously, the cash recovery will help pretty significantly, so I expect that to be 15% of the total investment. We'll target 50% of the total investment with the Department of Energy loan, with the rest likely being new equity to fund the investment. And then on the growth, Nick, as we get these incremental investment opportunities coming in, whether it's generation or transmission, we'll be updating what growth looks like as we put those in the plan.

Investment opportunities coming in whether it's generation or transmission, will be updating uh what growth looks like uh as we put those in the plan.

Speaker #6: Could you touch on kind of the key levers there, key moving pieces as you're sketching out the outlook for earned ROEs?

Speaker #4: Yeah. So thank you for that, David. We're continuing to be in that target, in that 9.5 to 10% range. Our goal is to be as close to our authorized returns as possible.

Speaker #4: Given the amount that we're investing, we're going to be going in regularly for rate cases. Because of the magnitude of the investment that we're making to drive reliability, but we're confident that we'll be able to stay in that 9.5% to 10% range with the flight of rate cases that we have and the investment that we're making today.

Nick Campanella: Okay. Okay, so I'll take 15, 15% of that CapEx. Thank you for that. And then maybe just I guess there's just been a bigger focus on Pennsylvania from investors, given the various comments out of Governor Shapiro, and I know the distribution plan across the company is up. Pennsylvania, I think you're doing $6.7 billion. I also understand your rates are below average there, but just how is the increased CapEx impacting your earned returns in the state, just relative to that 10 that you show on the slides? And when do you think you're going to be going back in for a case there? Thanks.

Speaker #6: Okay. Great. Thanks so much.

Speaker #4: Thank you, David.

Speaker #1: Our next question is from the line of Ryan Levine with Citi. Please proceed with your questions.

Okay, okay, so I'll take 15 15% of that uh, that capex. Um, thank you for that. And then maybe just, I guess there's just been a bigger focus on Pennsylvania from investors. Given the various comments out of Governor Shapiro. And I know the distribution plan across the company is up Pennsylvania. I think you're doing 6.7 billion. Um, I also understand your rates are below average there but just how is the increase capex, impacting your earned returns in the state just relative to that 10 that you show on the slides and when do you think you're going to be going back in for a case there? Thanks. Yes. So Nick, it's not that long that we've come out of a rate case there. And, um, and the big part of that rate case was investment in the distribution system.

Speaker #7: Good morning. Is that something you'd be able to give some color around—the execution ability of your $36 billion CapEx plan? Do you have sufficient internal engineering and project management capability to deliver on the step-up with CapEx, especially in transmission, given labor tightness?

Brian Tierney: Yeah. So Nick, it's not that long that we've come out of a rate case there. And the big part of that rate case was investment in the distribution system. And so the increases that we got were to fund that investment, and we're actively doing that. We have a very targeted long-term investment program there that's been approved as well. So the focus for us in Pennsylvania has been incremental investment in the distribution system to drive improvements and reliability, and that's what we're seeing in the plan. So that's what our focus has been. We're going to go in when we need to again, to reflect that increased rate base that we've been adding to since the last rate case.

Speaker #7: And how are you seeing in-house versus contractor labor relations to be able to deliver on this?

And so, the increase that we got were to fund that investment and we're actively doing that. We have a very targeted long-term investment program there. That's been approved as well. So the focus for us in Pennsylvania has been incremental investment in the distribution system to drive improvements in reliability and that's what we're seeing in the plan. So um,

Speaker #4: Yeah. So thank you for the question, Ryan. We're very confident in our ability to deliver against the plan, especially the transmission side of it.

Speaker #4: We're having considerable growth. We've been investing in that side of the business significantly since 2014. We have the relationships with contractors, labor, suppliers, to allow us to do that.

Speaker #4: And we're ramping up those relationships as our investment is ramping up. But project management, discipline, supplier relationships, all those things are key to us executing against our plan.

That that's the what our Focus has been. We're going to go in when we need to again, to to reflect that increased rate base that we've been adding to since the last rate case, but the focus in both Pennsylvania, New Jersey has always been. We want to see the investment coming from the company in those states to drive, reliability, and that's what we're doing. And that does leave us in a position where we have to keep going in for rate cases, uh, to update the rate base and and our cost structure as well. But

Speaker #4: And Mark Merzinski and his team on the transmission side are laser-like focused on our ability to deliver, and things are going according to plan there.

Brian Tierney: But the focus in both Pennsylvania and New Jersey has always been: we want to see the investment coming from the company in those states to drive reliability, and that's what we're doing. And that does leave us in a position where we have to keep going in for rate cases, to update the rate base and our cost structure as well. But, you know, and whether it's in Pennsylvania, New Jersey, all of our states, we're keenly focused on affordability, and that has us focusing on things like our own O&M and then other bills charges. We mentioned taxes in Ohio coming down that are flowing through the rates, but, you know, investment and affordability are the things that are top of mind for us in Pennsylvania and our other states.

Speaker #4: So it's a heavy lift, no doubt. But we have the expertise and relationships to deliver, so we're very confident in our ability to make it happen.

Brian Tierney: But, you know, and whether it's in Pennsylvania, New Jersey, all of our states, we're keenly focused on affordability, and that has us focusing on things like our own O&M and then other bills charges. We mentioned taxes in Ohio coming down that are flowing through the rates, but, you know, investment and affordability are the things that are top of mind for us in Pennsylvania and our other states.

Speaker #7: On that front, are there certain aspects that you're most constrained on? And are there any external markers that we could track to monitor progress around the execution?

You know, in whether it's in Pennsylvania, New Jersey, all of our states were keenly focused on affordability, and that has us focusing on things like our own on and M, and then other bills charges. We mentioned taxes in Ohio, coming down that are flowing through the rates, but, you know, investment and affordability are the things that are top of mind for us in Pennsylvania and our other states. Yeah, Nick and I would just add on to roughly, 45% of the investment that we're making in. Pennsylvania is under the ltip program, which is recovered through the discharge. So that provides for, you know, interim recovery of our investments. And really helps us kind of with base rate, case planning and that type of thing.

Thanks for all the thoughts.

Thanks mate.

Speaker #4: I don't think so. I mean, we're starting to see on the distribution side, we're starting to see the tightness in the supplier market is starting to ease.

The next question comes from the line of sharp perusa with Wells, Fargo. Let's just see with your questions.

Hey guys. Uh, good morning.

K. Jon Taylor: Yeah, Nick, and I would just add on to roughly 45% of the investment that we're making in Pennsylvania is under the LTIP program, which is recovered through the DIS surcharge. So that provides for, you know, interim recovery of our investments and really helps us kind of with base rate case planning and that type of thing.

Jon Taylor: Yeah, Nick, and I would just add on to roughly 45% of the investment that we're making in Pennsylvania is under the LTIP program, which is recovered through the DIS surcharge. So that provides for, you know, interim recovery of our investments and really helps us kind of with base rate case planning and that type of thing.

Good morning, shark.

Speaker #4: Suppliers are looking for people that they'll view as strategic partners, that they can look to be delivering significant volumes of demand to them going forward.

Morning, Brian. I just want to make sure we, we have the numbers correct here. Uh, so so the capex number is

Speaker #4: And we're obviously going to be one of those players. We've done things like made orders out in time, things that are no regrets on the transmission and distribution side.

Nick Campanella: Thanks for all the thoughts.

Brian Tierney: Thanks, Nick.

Operator: The next question comes in the line of Shar Perusa with Wells Fargo. Please proceed with your question.

Speaker #4: And then we have Chris Beam, who's working very hard on the generation side, fostering relationships with Siemens as our OEM on the key components of the generation that we have.

Neil Kalton: Hey, guys, good morning.

Shar Pourreza: Hey, guys, good morning.

Brian Tierney: Morning, Char.

Neil Kalton: Morning. Brian, I just want to make sure we, we have the numbers correct here. So, so the CapEx numbers were obviously healthy. The rate base growth is likely a little bit closer to 10.4%, right? Just as you're adding West Virginia, remind us, does that sort of get you to closer to 11.4%? Because I know we're getting quoted on 11%, but I think West Virginia is probably a hundred basis points accretive to that. And then how do we sort of think about the delta between 11.4% when you add West Virginia in it and your EPS growth, where you're already at the higher end?

Shar Pourreza: Morning. Brian, I just want to make sure we, we have the numbers correct here. So, so the CapEx numbers were obviously healthy. The rate base growth is likely a little bit closer to 10.4%, right? Just as you're adding West Virginia, remind us, does that sort of get you to closer to 11.4%? Because I know we're getting quoted on 11%, but I think West Virginia is probably a hundred basis points accretive to that. And then how do we sort of think about the delta between 11.4% when you add West Virginia in it and your EPS growth, where you're already at the higher end?

Speaker #4: So it's tight out there. It's not as tight as it was during COVID, but we believe we have the relationships to get us through what we need to do to drive the growth that we have planned.

growth, when you add West Virginia in there,

Speaker #7: Okay. And then one last unrelated question. How are you assessing the potential impacts from the Maryland Lower Bills Act and/or similar affordability-driven legislation in that state?

Speaker #4: Yeah, so we're seeing this across our system, where people are very, very focused on affordability. And we are engaging all of our jurisdictions and legislatures in that discussion.

Neil Kalton: So I guess another way to ask it is: What is the amount of lag between Rate Base growth and the newly guided, let's just say, 11.4% Rate Base growth when you add West Virginia in there?

Shar Pourreza: So I guess another way to ask it is: What is the amount of lag between Rate Base growth and the newly guided, let's just say, 11.4% Rate Base growth when you add West Virginia in there?

Yeah, so Nick, as we're looking at this, you know, we're trying to give transparency and insight into what's in the plan today. And then what are the things that could be added to the plan? And what that those additions would look like your math is about right on the 10.4 to 11.4. Um, a and we've always said, well update, the capex plan, we'll update earnings as things like,

Brian Tierney: Yeah. So Nick, as we're looking at this, you know, we're trying to give transparency and insight into what's in the plan today, and then what are the things that could be added to the plan and what that—those additions would look like. Your math is about right on the 10.4 to 11.4. And we've always said we'll update the CapEx plan, we'll update earnings as things like an incremental transmission comes in. But what, what we're not going to do is put things in there that are speculative and not approved yet, and then have to take them out of the plan.

Speaker #4: We're well positioned relative to our peers on that. We talked about on the call that our part of the bill in our deregulated states is only about 32% of the bill, with generation being about 60%.

Speaker #4: So there are some obvious places to focus on where the increases in the bill have come on, which is why we're supportive of extending the capacity auction caps. I think it would be beneficial to our customers to even lower those caps for existing generation.

And incremental transmission comes in. But what what we're not going to do, is put things in there that are speculative and not approved yet and then have to take them out of the plan. So, our idea is, here's what the plan is today. Here's what the incremental could be, and if we need to change, what the earnings growth rate is, uh, as we add things to the plan, we'll do that at that time.

Speaker #4: And we've been supportive of things like a second auction that would bring new generation to the fore, which is what's needed. So we've been focused on affordability, on our cost structure, and looking for ways to engage with all stakeholders to make sure that electricity is affordable to our customers going forward.

Brian Tierney: So our idea is, here's what the plan is today, here's what the incremental could be, and if we need to change what the earnings growth rate is, as we add things to the plan, we'll do that at that time.

Got it, okay. Thanks for clarifying that because I know Brian does a lot of confusion out there with 10% versus 10.4 and there's a big difference between 10% and 10.4. Uh and then just lastly, on on West, Virginia. Can you just expand on the incremental opportunities? Post the current project. So what's the potential timing there? The turbine supplies where the DC conversations Etc. Thanks.

Neil Kalton: Got it. Okay, thanks for clarifying that, because I know, Brian, there's a lot of confusion out there with 10% versus 10.4, and there's a big difference between 10% and 10.4. And then just lastly on West Virginia, can you just expand on the incremental opportunities post the current project? So what's the potential timing there, the turbine supplies, where are the DC conversations, etc.? Thanks.

Shar Pourreza: Got it. Okay, thanks for clarifying that, because I know, Brian, there's a lot of confusion out there with 10% versus 10.4, and there's a big difference between 10% and 10.4. And then just lastly on West Virginia, can you just expand on the incremental opportunities post the current project? So what's the potential timing there, the turbine supplies, where are the DC conversations, etc.? Thanks.

Speaker #4: Thank you, Ryan.

Speaker #1: The next question is from the line of Steve Fleischman with Wolf Research. Please proceed with your questions.

Speaker #8: Hey, good morning. Thanks for the update.

Speaker #4: Good morning, Steve.

Speaker #8: So just a follow-up on the West Virginia—maybe just a little more specifics on what do they actually need to approve in this order?

Brian Tierney: Yeah, thanks for that, Shar. So as we look at our states, and we look at states that are wanting us to invest in regulated generation. West Virginia stands at the top of that. I mentioned the governor's challenge to us to do more. He has a 50 gigawatts by 2050 goal that he is searching for. And if we get, you know, constructive regulatory approval here, we're going to be going back into West Virginia and looking at ways that we can add another 1,200 megawatts, hopefully dedicate that to data center load, talking with hyperscalers, with developers about doing that.

Speaker #8: Just that the plan is needed and the cost levels and, I guess, the quit rate making. Are those the key items that need approval?

Speaker #8: And then the exact timing too. Any rough sense of when in the second half?

Yeah, thanks for that, sure. So, as we look at our states and we look at states that are wanting us to invest in regulated, generation West, Virginia stands at the top of that, I mentioned the governor's challenge to us to do more. He has a 50 gigawatts by 2050, uh, gold that he is, uh, searching for. And if we get, uh, you know, constructive regulatory approval here. We're going to be going back into West Virginia and looking at ways that we can add another 1200 megawatts, uh, hopefully dedicate that to Data Center load, talking with hyperscalers with developers about doing that and the relationships that we're beginning now with suppliers like Siemens on the turbine side. Um, in terms of what we're doing with the first EPC that we're going forward, will leverage those relationships, uh, going forward for the incremental build. But when we look at our uni,

Speaker #4: Yeah. So what they're going to approve is a certificate of need and public necessity. We're asking for the interim financing in the plan where we get AFUDC, CWIP.

Brian Tierney: And the relationships that we're beginning now with suppliers like Siemens on the turbine side, in terms of what we're doing with the first EPC that we're going forward, we'll leverage those relationships, going forward for the incremental build. But when we look at our universe of opportunity to invest in generation, West Virginia said to us, "We're open for business, want you to invest here." And as a regulated, fully integrated utility there, looking to drive economic development, we want to be a key part of that for our customers and the state of West Virginia.

Speaker #4: We've asked for. So what that will be during the plan. And we've also proposed what our financing plan will be for the plan, both on an interim basis and the long-term basis.

First of opportunity to invest in generation. West Virginia's said to us. We're open for business. Uh want you to invest here and as a regulated fully integrated utility there, looking to drive Economic Development, we want to be a key part of that for our customers and and the state of West Virginia,

Got it. Appreciate it. Thank you guys.

Thank you.

Speaker #4: And so that's why we're moving forward with the DOE approval there. I think the commission has up to a year to act on this.

Our next question comes from.

David Aro with Morgan Stanley.

To see if their questions.

Hey uh, thanks so much. Good morning.

Speaker #4: We've heard that they are interested in acting much quicker than that to get the plant online, even sooner. And so we do anticipate that it will be again, I can't be more specific than the second half, and we're expecting a procedural schedule on the filing within the next month.

Good morning, David. Um wondering if you could touch on New Jersey in the backdrop, their kind of expectations, you know, for uh timing of your next raid case and just overall your perspective. Um, you know, uh following the executive orders and some of the changes, we could see ahead in the regulatory backdrop,

Andrew Weisel: Got it. Appreciate it. Thank you, guys.

Shar Pourreza: Got it. Appreciate it. Thank you, guys.

Speaker #4: So they are—I'd say West Virginia is fast-tracking the investment because they know how important it is to the economic development in the state.

Brian Tierney: Thanks, John.

Operator: Our next question comes from the line of David Arcaro with Morgan Stanley. Please proceed with your question.

Yeah, so I I obviously affordability is front and center for uh Governor Cheryl. We've been working with her and our staff to look at ways that we can address.

David Arcaro: Hey, thanks so much. Good morning.

Speaker #4: And I think you're seeing that everywhere, from the governor's interest in making sure that the investment's made right down to the commission. I think they're going to do things right.

Brian Tierney: Good morning, David.

David Arcaro: Wondering if you could touch on New Jersey and the backdrop there, kind of expectations, you know, for timing of your next rate case and just overall, your perspective, you know, following the executive orders and some of the changes we could see ahead in the regulatory backdrop?

Speaker #4: I think they're going to make sure it's needed and dot their I's and cross their T's. But I think they're going to be moving with dispatch.

Brian Tierney: Yes. So obviously, affordability is front and center for Governor Sherrill. We've been working with her and her staff to look at ways that we can address affordability in the states. What are items on the bill that we can either reduce or eliminate? But again, when we were in our last rate case there, the real focus of that was the worst-performing circuits that we had, and the big point of that rate case was: Are we going to make the incremental investment to drive increased reliability in those circuits? We've been doing that since the last rate case, and we're seeing related improvement in reliability there, which is what New Jersey wanted from that case. So we're going to continue with that activity.

Speaker #8: Okay, great, that's helpful. Then one other question just on the equity plans: any color on the up to $2 billion—kind of the timing of that?

Speaker #8: Is it kind of ratable over the period, roughly? Any color on that?

Speaker #4: Yeah, Steve. It's pretty much ratable over the five-year period. Beginning in '26 with about 1% of our total market cap. And that includes the DRIP program that has been in place historically.

Affordability in the states. What are items on the bill that we can either reduce or eliminate. Um but again when we were in our last rate case there, the the real focus of that was the worst performing circuits that we had. And the big point of that rate case was, are we going to make the incremental investment to drive increased reliability in those circuits? We've been doing that since the last rate case and we're seeing uh, related Improvement in reliability there which is what New Jersey wanted from that case. So we're going to continue with that activity. We're going to work constructively with the governor and and her staff with the BPU and others to address affordability. But ultimately

Speaker #4: But I would plan on pretty ratable issuances over the five-year planning period. And again, that $2 billion includes potential equity-like securities. So we'll look at hybrids to kind of reduce the common equity issuance need.

Brian Tierney: We're going to work constructively with the governor and her staff, with the BPU and others, to address affordability. But ultimately, we'll have to go back in for another rate case to keep that investment coming. Our rates in New Jersey are significantly below our in-state peers, and even with the investment that we have planned there, we anticipate to still be below our in-state peers. But we have to improve reliability. We're singularly focused on that and affordability at the same time. So we're going to work constructively with everyone to time a next rate case, and try and maintain that affordability as well.

Speaker #4: And we'll look at that over this year.

We will have to go back in for another 8 case to keep that investment. Uh, um uh coming, our rates in New Jersey are significantly below our in-state peers. And even with the investment that we have planned there, we anticipate to still be below our in-state peers, but we have to improve reliability. We're singularly focused on that and affordability at the same time. So we're going to work constructively with everyone to time uh an x-ray case uh and try and maintain that affordability as well.

Speaker #8: Okay. Great. Thank you.

Speaker #4: Thanks, Steve.

Speaker #1: Our next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed with your questions.

Speaker #9: Hey, good morning. Thanks for taking the questions. Maybe.

Got it. Okay thanks that's helpful. Um and then uh could you touch on the Outlook? Um that's embedded in your plan for Roe's. Um I guess

Speaker #4: Good morning, Carly.

Speaker #9: Good morning. Maybe just on the transmission CapEx piece of the plan, can you just talk a little bit about what portion of the near-term spend, so say 26 to 28, is tied to projects with right-of-way or siting and permitting that are in advanced stages versus still in earlier stages?

Brian Tierney: We're singularly focused on that and affordability at the same time. So we're going to work constructively with everyone to time a next rate case, and try and maintain that affordability as well.

Just kind of holding, are we steady throughout the plan? I wanted to confirm that if you're around a 98 now and you're and you're planning on, just holding that essentially between 95 and 10, uh, going forward, I guess. Um, could you touch on kind of the key levers there? Keep moving pieces. Um, as you're, uh, sketching out the outlook for earned Aries,

David Arcaro: Got it. Okay, thanks. That's helpful. And then, could you touch on the outlook, that's embedded in your plan for ROEs? I guess, it looks like you're assuming, you know, basically flattish, kind of holding ROEs steady throughout the plan. I wanted to confirm that if you're around a 9.8 now and you're planning on just holding that essentially between 9.5 and 10, going forward. I guess, could you touch on the kind of key levers there or key moving pieces, as you're sketching out the outlook for earned ROEs?

Speaker #4: Yeah. So everything that we have that's in the plan, Carly, is either approved by a commission, doesn't need approval, or we have clear line of sight to permitting to getting it done.

Speaker #4: So if it's in the plan, there's very high confidence that all of the approvals necessary are either received or are in flight, and we anticipate getting them in the near term.

Yes, so thank you for that David. We're, we're continuing to be in that the Target in that 9 and a half to 10% range. Our goal is to be as close to our authorized returns as possible. Given the amount that we're investing. Um, we're going to be going in regularly for rate cases, um, because of uh, the magnitude of the investment that we're making to drive, reliability.

Speaker #4: So if there's a long putt on something, or we don't have line of sight to that being in service in the dates that we're talking about, it's not in the plan.

Brian Tierney: Yes. So thank you for that, David. We're continuing to be in that the target in that 9.5 to 10% range. Our goal is to be as close to our authorized returns as possible. Given the amount that we're investing, we're going to be going in regularly for rate cases because of the magnitude of the investment that we're making to drive reliability. But we're confident that we'll be able to stay in that 9.5 to 10% range with the filed rate cases that we have and the investment that we're making today.

But um we're confident that we'll be able to stay in that 9 and a half to 10% range uh with the flight of rate cases that we have in the investment that we're making today.

Okay, great. Thanks so much.

Thank you, David.

Speaker #4: And we have a big enough portfolio of projects, so if something happens on one project in particular, we can advance another and do the like, and have that flexibility over the planning period.

Our next question is from the line of Ryan LaVine with City, please just see you with your questions.

Speaker #4: But we're extremely confident in what's in the near-term part of that plan. And if we are still awaiting approvals or the like—what we talk about with the PJM open windows—then it's not in the plan yet.

David Arcaro: Okay, great. Thanks so much.

Brian Tierney: Thank you, David.

Um, good morning. I was hoping you'll be able to get some caller around the execution, ability of your 36 billion dollar capex plan, do you have sufficient, internal engineering and project management capability to deliver on the step up the capex? Especially in transmission, give her given labor tightness and and how are you seeing in house versus contractor? Labor relations, to be able to deliver on this?

Speaker #9: Great, okay, that's clear. Thank you. And then just a follow-up on the affordability questions. I know in the slides you had mentioned that you expect bills to remain below in-state peers throughout the planning period.

Operator: Our next question is from the line of Ryan Martine with Citi. Please proceed with your question.

Ryan Levine: Good morning. I was hoping you'd be able to give some color around the execution abilities of your $36 billion CapEx plan. Do you have sufficient internal engineering and project management capability to deliver on the step-up of CapEx, especially in transmission, given labor tightness? And how are you seeing in-house versus contractor labor relations to be able to deliver on this?

Speaker #9: Is there anything specific that you can provide on a sort of percent bill inflation target that you'd expect over the plan period?

Speaker #4: Yeah, we anticipate it to be below inflation, so we anticipate that the share of wallet and the like will stay the same. But our affordability position is really one of our strengths.

Brian Tierney: Yeah. So thank you for the question, Ryan. We're very confident in our ability to deliver against the plan, especially the transmission side of it, where we're having considerable growth. We've been investing in that side of the business significantly since 2014. We have the relationships with contractors, labor, suppliers to allow us to do that, and we're ramping up those relationships as our investment is ramping up. But project management, discipline, supplier relationships, all those things are key to us executing against our plan. And Mark Mroczynski and his team on the transmission side are laser-like focused on our ability to deliver, and things are going according to plan there.

Yeah. So thank you for the question Ryan. Um, we're very confident in our ability to deliver against the plan, especially the transmission, uh, side of it. We're, we're having considerable growth. Um, we've been investing in that side of the business significantly. Since 2014, we have the relationships with contractors labor suppliers, uh, to allow us to do that. And we're ramping up those relationships as our uh investment is ramping up but project management discipline, uh, supplier relationships. All those things are key to us executing against our plan.

Speaker #4: And it's something we're going to focus on. People are always concerned about, "Oh, my bill's going up X percent." We're focused on making that as small as possible and keeping a very modest share of our customers' wallet as we go forward. And that range is significant—from places where we have wealthier customers to places where we have customers closer to, or at, the mean average income—but we're very sensitive to that affordability and doing everything we can on our cost structure side and on the bill components that we're working with the various commissions on to make sure that the impact to customers is as low as possible.

And Mark Minsky and his team on the transmission side are laser-like focused on our ability to deliver and, uh, and things are going, uh, according to plan there. So, um, it's a heavy lift, no doubt, but, uh, we have the expertise in relationships, uh, to deliver. So, we're very confident in our ability to make it happen.

On that front, another certain aspects that you're most constrained on and are there any external external markers that we could track the progress around the execution?

I don't think so. I mean, we're starting to see on the distribution side, we're starting to see the tightness in the supplier Market is starting to ease.

Brian Tierney: It's a heavy lift, no doubt, but we have the expertise and relationships to deliver, so we're very confident in our ability to make it happen.

Speaker #4: And certainly trying to keep that below inflation.

Ryan Levine: On that front, are there certain aspects that you're most constrained on, and are there any external markers that we could track the progress around the execution?

Speaker #9: Got it. Okay. Thank you so much for the color.

Speaker #4: Thanks, Carly.

Speaker #1: The next questions are from the line of Jeremy Tierney with JPMorgan. Please proceed with your questions.

Brian Tierney: ... I don't think so. I mean, we're starting to see, on the distribution side, we're starting to see the tightness in the supplier market is starting to ease. Suppliers are looking for people that they'll view as strategic partners, that they can look to be, you know, delivering significant volumes of demand to them going forward. And we're obviously going to be one of those players. We've done things like made orders out in time, things that are no regrets on the transmission and distribution side. And then we have Chris Beam, who's working very hard on the generation side, fostering relationships with Siemens as our OEM on the key components of the generation that we have. So it's tight out there.

Speaker #4: Hi. Good morning. Good morning, Jeremy. I just wanted to, sorry, clarify real quick on the CCGT financing as far as the components there. There's 50% DOE loan.

Speaker #4: And then the remaining 50%, what are the components there?

Speaker #10: Yeah. So you're right. The loan we would target 50% of the total investment value. And then if we get the approval of cash recovery during the construction phase, that would fund about 15% of the overall investment.

Brian Tierney: We've done things like made orders out in time, things that are no regrets on the transmission and distribution side. And then we have Chris Beam, who's working very hard on the generation side, fostering relationships with Siemens as our OEM on the key components of the generation that we have. So it's tight out there.

Suppliers are looking for people that they'll view as strategic partners that they can, uh, look to be, you know, delivering significant volumes of demand to them, going forward. And, and we're obviously going to be 1 of those players. We've, we've done things like, um, made orders out in time things that are no regrets on the transmission and distribution side. And then we have Chris beam who's working very hard on the uh generation side. Fostering relationships with uh Siemens as our OEM on the key components of the generation that we have. So it's tight out there. It's not as tight as it was during Co, but, um, but we believe we have the, the relationships, um, uh, uh, to get us through. Um, what we need to do to drive the growth that we have plant.

Speaker #10: And then the rest which would be about 35% would be new equity needs that we would have to put into the plan.

Speaker #1: Got it. Thank you for that. And then just wanted to pivot towards earned ROEs at this point. Just wondering, I guess, where you see the biggest gap versus allowed in, I guess, key focus going forward, which jurisdictions have the earned recurrence below authorized?

Okay and then 1 last unrelated question, how are you assessing the potential impacts from the Maryland. Lower bills act and and of course similar affordability driven legislation in that state.

Yeah. So

Brian Tierney: It's not as tight as it was during COVID, but we believe we have the relationships to get us through what we need to do to drive the growth that we have planned.

Speaker #4: So it's all things you'd expect, Jeremy. The places where you see us going in for rate cases are the places where our investment has driven down the earned ROE.

Carly Davenport: Okay, and then one last unrelated question: How are you assessing the potential impacts from the Maryland Lower Bills Act and the more similar affordability-driven legislation in that state?

You know, we're seeing this across our system where um people are very very focused on affordability. And we are engaging all of our jurisdictions and legislators in that discussion. We're well, positioned relative to our peers on that. We talked about on the call that

Speaker #4: And that's why clearly why we're going in. John talked about that in his remarks. And then we've also talked about the timing for when we might go in ultimately for New Jersey.

Brian Tierney: Yeah. So, you know, we're seeing this across our system, where people are very, very focused on affordability, and we are engaging all of our jurisdictions and legislatures in that discussion. We're well positioned relative to our peers on that. We talked about on the call that, you know, our part of the bill in our deregulated states, it's only about 32% of the bill, with generation being about 60%. So there are some obvious places to focus on where the increases in the bill have come on, which is why we're supportive of extending the capacity auction caps. I think it would be beneficial to our customers to even lower those caps for existing generation, and we've been supportive of things like a second auction that would bring new generation to the fore, which is what's needed.

Speaker #4: But it's the places where we're making the incremental investments, where we lag a little bit due to the incremental investment that we're making, and we just have to refresh that by going in for new rate cases.

Speaker #10: Yeah. The other thing I would say, Jeremy, if you look at our overall plan, I mean, we're in jurisdictions that have formula rate recovery mechanisms.

Speaker #10: So, 75% of our total investments are in formula rate programs. So, if you think about the impact on growth with respect to those programs, it drives a healthy amount of the growth in the plan, with base rate cases being less of a contributor in the overall scheme of things.

Brian Tierney: So there are some obvious places to focus on where the increases in the bill have come on, which is why we're supportive of extending the capacity auction caps. I think it would be beneficial to our customers to even lower those caps for existing generation, and we've been supportive of things like a second auction that would bring new generation to the fore, which is what's needed.

Generation uh to the 4, which is what's needed. So uh we've been focused on affordability on our cost structure and looking for ways to engage with all stakeholders to make sure that um electricity is Affordable uh to our customers going forward.

Thank you.

Thank you, Ryan.

The next question is from the line of Steve fleshman. With wolf research, please just use your questions.

Speaker #10: So really, most of the growth in the plan is driven by the formula rate investment programs, with a lesser extent from base rate cases.

Hey, good morning. Thanks for the update.

Morning. Um,

Brian Tierney: So, we've been focused on affordability, on our cost structure, and looking for ways to engage with all stakeholders to make sure that electricity is affordable to our customers going forward.

Speaker #1: Got it. Thank you for that. And just a last quick one, if I could. There’s obviously continuing to be a lot of focus on the PJM auction and how this might evolve in the future.

So just uh follow up on the West Virginia. Uh, maybe just a little more specifics on. What? What are they actually need to approve?

uh, in this order, uh, just just that the plan is needed and

Speaker #1: Just wondering, any thoughts you might share there on FE's potential role, if regular generation or otherwise, might become something that FE would look at more in the future?

Carly Davenport: Thank you.

Brian Tierney: Thank you, Ryan.

the cost levels. And and I guess the quip rate making is are those the key items that need approval

Operator: The next question is from the line of Steve Fleishman with Wolfe Research. Please proceed with your questions.

Steve Fleishman: Hey, good morning. Thanks for the update.

Yeah so it's a certificate and I made the exact timing the exact timing to like any rough sense of when in the second half.

Speaker #4: So, Jeremy, it's still early days in the stakeholder process. I think it just began yesterday or the day before, continuing today. The stakeholder process in PJM is a really, really difficult one.

Brian Tierney: Good morning, Steve.

Steve Fleishman: So just to follow up on the West Virginia, maybe just a little more specifics on what they actually need to approve in this order? Just that the plan is needed, the cost levels, and I guess the CWIP rate making are those the key items that need approval?

Speaker #4: But the key things that we're going to be focusing on is affordability for our customers. And so, as you look at the key things that are going to play out in the stakeholder process, it's going to be how much generation are they looking for?

Brian Tierney: Yeah. So it's a certificate-

Steve Fleishman: And then the exact timing, the exact timing to, like, any rough sense of when in the second half?

Yes. So uh, yeah, what they're going to approve is is a certificate of need and public necessity. We're asking for the interim financing, uh, in the plan. Uh, where we get afdc C whip. We've asked for, uh, so what that will be during the plan and we've also proposed what our financing plan will be for the plan, both on an interim basis and, and the long term basis. And so that's why we're moving forward with

Speaker #4: What the timing's going to be? How it's going to be paid for? And who's going to bear the cost? All the basic things that you would look for.

Brian Tierney: Yeah. So, yeah, what they're going to approve is a certificate of need and public necessity. We're asking for the interim financing in the plan, where we get AFUDC, CWIP; we've asked for, so what that will be during the plan. And we've also proposed what our financing plan will be for the plan, both on an interim basis and a long-term basis, and so that's why we're moving forward with the DOE approval there. I think the commission has up to a year to act on this. We've heard that they are interested in acting much quicker than that, to get the plant online even sooner, and so we do anticipate that it will be...

Speaker #4: So we are involved in the stakeholder process. We're going to continue to be involved and first and foremost, we're going to be looking out for affordability for our customers as we work our way through that.

Speaker #4: In terms of FirstEnergy and our interest in regulated generation, look at our states, and you have states where Ohio just passed legislation saying that the utility can't own regulated generation.

Speaker #4: And then I think it would be difficult for us, too, in places like New Jersey and Maryland. So that really leaves us, then, with West Virginia, where we've told you what our plans are.

Brian Tierney: Again, I can't be more specific than the second half, and we're expecting a procedural schedule on the filing within the next month. So, they'd say West Virginia is fast-tracking the investment because they know how important it is to the economic development in the state, and I think you're seeing that everywhere from the governor's interest in making sure that the investment's made, right down to the commission. I think they're going to do things right. I think they're going to make sure it's needed and dot their i's and cross their t's, but I think they're going to be moving with dispatch.

Speaker #4: We want to get this one approved. And then if West Virginia would like, we're interested in investing incrementally more in that state and that leaves you with Pennsylvania and again, we don't have a path to seeing regulated generation in that state yet.

The doe, um, approval there. I think the commission has up to, um, um, a year to act on this. We've heard that they are interested in acting much quicker than that, uh, to get the plant online even sooner. And so, we do anticipate that it will be again, I can't be more specific than the second half. Um, and we're expecting a procedural schedule on the, uh, filing within the next month. So, um, they are, I, I, I'd say West Virginia is, uh, fast-tracking the investment because they know how important it is to the economic development in the state. And I think you're seeing that everywhere from uh, the governor's, uh, interest in making sure that the Investments made, uh, right down to the commission. I think they're going to do things, right. I think they're going to make sure it's it's it's needed and that their eyes and cross their teeth, but I think they're going to be moving with dispatch.

Okay, great. That's helpful. Then 1 other question, just on, uh, the equity plans

Speaker #4: But if they'd like us to consider it, we'd be willing to look at it. But our clearest path to helping with that issue is, one, what we're doing in West Virginia and then, two, what we're doing in the stakeholder process at PJM.

Could any caller on the 2 billion up to 2 billion? Kind of the, the timing.

Of that. Uh, is it kind of rateable?

Over the period roughly uh, yeah, any color on that.

Speaker #1: Got it. That's helpful. I'll leave it there. Thanks.

Speaker #4: Thanks, Jeremy.

Speaker #1: The next question's from the line of Paul Patterson with Glenrock Associates. Please proceed with your questions.

Steve Fleishman: Okay, great. That's helpful. Then one other question, just on the equity plans. Could any color on the $2 billion-up to $2 billion, kind of the timing of that? Is it kind of ratable over the period, roughly? Yeah, any color on that?

Speaker #11: Hey. Good morning.

Speaker #10: Good morning, Paul.

Yes, Steve. It's it's it's pretty much rateable over the over the 5-year period. You know, beginning in 26 with about 1% of our total market cap with with and that includes the the drip program that you know, has been in place historically. But I, I would plan on pretty rateable. Um, issuances over the 5-year planning period.

Speaker #11: Just on the transmission, when I look at slide seven, how much of this, I guess, is demand-driven? I mean, is that part of the 20% or is this really pretty much just replacing the aging issue to serve the reliability issue?

K. Jon Taylor: Yeah, Steve, it's pretty much ratable over the five-year period, you know, beginning in 2026, with about 1% of our total market cap. With, and that includes the DRIP program that, you know, has been in place historically. But I would plan on pretty ratable issuances over the five-year planning period. And again, you know, that $2 billion includes potential equity-like securities, you know, so we'll look at hybrids to kind of, you know, reduce the common equity issuance need, and we'll look at that over this year.

Jon Taylor: Yeah, Steve, it's pretty much ratable over the five-year period, you know, beginning in 2026, with about 1% of our total market cap. With, and that includes the DRIP program that, you know, has been in place historically. But I would plan on pretty ratable issuances over the five-year planning period. And again, you know, that $2 billion includes potential equity-like securities, you know, so we'll look at hybrids to kind of, you know, reduce the common equity issuance need, and we'll look at that over this year.

And again, you know, that 2 billion dollars includes potential Equity like Securities, you know? So we'll look at hybrids to kind of, you know, reduce the common Equity issuance need. Um, and we'll look at that over this year.

Okay, great. Thank you.

Thanks Steve.

Speaker #11: And also, just in respect to New Jersey, is the offshore wind thing still going on there? Is that still part of the plan, that tri-collector project and stuff?

Good. Next question comes in the line of Carly Davenport. With Goldman Sachs, please receive your questions.

Speaker #11: Or how should we think of that?

Speaker #4: Let me start with that last part. We're working with New Jersey and PJM to modify what portions of that plan are no regrets. And we'll be beneficial to New Jersey and PJM even without the offshore wind component of that.

Steve Fleishman: Okay, great. Thank you.

Hey, good morning, thanks for taking the questions. Um, maybe you can call morning, uh, maybe just on the, uh, transmission. Capex piece of the plan. Can you just talk a little bit about what portion of the near-term spend? So say 26 to 28 is is tied to projects with right away or siting and permitting that are in advanced stages versus still in earlier stages.

Brian Tierney: Thanks, Steve.

Operator: Our next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed with your questions.

Speaker #4: So we are working to make those modifications that are agreeable to both New Jersey and PJM to make sure that we're investing in what they want us to invest in and it's no regrets regardless of the offshore wind.

Carly Davenport: Hey, good morning. Thanks for taking the questions. Maybe-

Brian Tierney: Good morning, Carly.

Yeah, so everything that we have that's in the plan Carly is either approved. Um by a commission doesn't need approval or we have, um,

Carly Davenport: Morning. Maybe just on the transmission CapEx piece of the plan, can you just talk a little bit about what portion of the near-term spend, so say 2026 to 2028, is tied to projects with right of way or siting and permitting that are in advanced stages versus still in earlier stages?

Speaker #4: So that's in process as we speak. If you look at the rest of the transmission, a lot of it is demand-driven, but a lot of it's aging infrastructure as well.

Clear, line of sight to permitting to getting it done. So,

Speaker #4: So if you look at the $5 billion that we've gotten from the open window process since 2022, I'd say that's all demand-driven. And so that's what our data center's doing.

Brian Tierney: ... Yeah, so everything that we have that's in the plan, Carly, is either approved by a commission, doesn't need approval, or we have clear line of sight to permitting to getting it done. So, if it's in the plan, there's very high confidence that all of the approvals necessary are either received or are in flight, and we anticipate getting them in the near term. So if there's a long putt on something, or we don't have line of sight to that being in service and the dates that we're talking about it, it's not in the plan. And we have a big enough portfolio of projects, so if something happens on one project in particular, we can advance another and do the like, and have that flexibility over the planning period.

If it's in the plan, there's very high confidence that all of the approvals necessary are either received or in-flight, and we anticipate getting them in the near term. So if there's a, a long putt on something or or we don't have line of sight to that being,

Speaker #4: What's happening with just demand across the PJM system and their responding to that. And that's clearly $5 billion of what's in the plan that we've been awarded.

Speaker #4: And then if you look at the rest of what we're doing, we've made significant investments since 2014, but have only addressed about 30% of the system.

Brian Tierney: So if there's a long putt on something, or we don't have line of sight to that being in service and the dates that we're talking about it, it's not in the plan. And we have a big enough portfolio of projects, so if something happens on one project in particular, we can advance another and do the like, and have that flexibility over the planning period.

Speaker #4: And about 60 to 70 percent of the system is going to have the end of its useful life in the next 10 years. And so that's a huge amount of what we're spending on the transmission investment.

Period, but we're extremely confident in what's in the near-term part of that plan. And um and if we are still awaiting approvals or the like we talked about with the pjm open Windows, uh then it's not in the plan yet.

Speaker #4: And those are things that we have to do for reliability. We have to do for economic development. And don't require a lot of incremental improvements for us to make those investments.

Speaker #10: Yeah, Paul, the other thing I would add is, if you look at our data center pipeline, if you look at the 13 gigawatts that we have in the pipeline through 2035, obviously that's not in our plan today.

Brian Tierney: But we're extremely confident in what's in the near-term part of that plan. And if we are still awaiting approvals or the like, what we talk about with the PJM open windows, then it's not in the plan yet.

Great. Okay. That's clear. Thank you. And then just a follow-up on on the affordability, questions. I know in the slides, you had mentioned that you expect bills to remain Below in state peers throughout the planning period. Is there anything specific that you can provide on uh, a sort of percent Bill inflation? Target that you'd expect over the plan period.

Speaker #10: But each gigawatt that's added to the contracted or active demand would probably drive $250 million or so of incremental capital investments on the transmission system.

Carly Davenport: Great. Okay, that's clear. Thank you. And then just to follow up on the affordability questions. I know in the slides you had mentioned that you expect bills to remain below in-state peers throughout the planning period. Is there anything specific that you can provide on a sort of percent bill inflation target that you'd expect over the plan period?

Yeah, we we anticipated to be below uh inflation. Um so we anticipate that the share of wallet and the like will stay the same um but you know our our affordability position is really 1 of our strengths.

Speaker #11: Okay. And just in terms of the cost allocation, I guess that's determined basically by retail jurisdictions. Should we think of a lot of this CapEx being absorbed by the new demand, by the new data center demand growth, or how should we think about the breakdown, roughly speaking?

Brian Tierney: Yeah, we anticipate it to be below inflation. So we anticipate that the share of wallet and the like will stay the same. But, you know, our affordability position is really one of our strengths, and it's something we're going to focus on. People are always concerned about, "Oh, my bill's going up X percent." We're focused on making that as small as possible and keeping a very modest share of our customers' wallet as we go forward, and that ranges significantly from places where we have, you know, wealthier customers to places where we have customers closer to, or the mean average income.

And um, and it's something we're going to focus on people are always concerned about. Oh my bill's going up X percent. We're focused on making that as small as possible and keeping a very modest share of our customers wallet as we go forward. And that, that range is significantly from places where we have, um, you know,

Speaker #11: Obviously, it's kind of early, but do you follow what I'm saying in terms of how people should sort of think about that?

Speaker #10: I do, Paul. So anything that is directly for that specific customer is being borne by the customer. The regional upgrades are being handled the way PJM handled those with generally the region that's benefiting from the investment is paying for the investment.

Wealthier customers to places where we have uh, customers closer to or the mean average income. Um, but we're very sensitive to that affordability and doing everything we can on our cost structure side and on the bill uh components that we're working with the various uh commissions on to make sure that um the impact the customers uh is is as low as possible and certainly trying to keep that below inflation.

Speaker #10: So it's a traditional PJM user pays the benefit owner pays most of the cost of what's happening on a regional basis.

Got it. Okay, thank you so much for the color.

Thanks Carly.

The next question is from the line of Jeremy tan with JP Morgan you with your questions.

Speaker #11: Okay. And then just in terms of the generation proposals that you guys have been making for a couple of years now, how would you characterize the overall reception?

Brian Tierney: But we're very sensitive to that affordability and doing everything we can on our cost structure side and on the bill components that we're working with the various commissions on to make sure that the impact to customers is as low as possible and certainly trying to keep that below inflation.

Hi, good morning.

good morning, Jeremy

Speaker #11: Because it's changing how things are currently. This auction and what have you. I mean, have you got a feeling that there's some momentum here in terms of your discussions with regulators in the service territories about just opening this thing up and just not relying completely on the capacity auction and when do you think we might see some action some tangible action in terms of maybe making some moves on this which would lower rates?

Uh, I just wanted to um, sorry clarify real quick on the ccgt financing, as far as uh, the components there. There's 50% doe, uh, loan and then the remaining 50%. What? What are the components there?

Carly Davenport: Got it. Okay. Thank you so much for the color.

Brian Tierney: Thanks, Carly.

Operator: The next question is from the line of Jeremy Tonet with JP Morgan. Please proceed with your question.

Yeah, so so you're right. The the loan we would Target 50% of the total investment value. Um and then if we get the approval of cash recovery during the construction phase, that would fund about 15%.

Jeremy Tonet: Hi, good morning.

Brian Tierney: Good morning, Jeremy.

Jeremy Tonet: Just wanted to, sorry, clarify real quick on the CCGT financing. As far as the components there, there's 50% DOE loan, and then the remaining 50%, what are the components there?

Um of the overall investment and then the rest which would be about 35% would be new Equity needs that we would have to put into the plan.

Speaker #11: Potentially not your rate, not what you technically control, but it would lower the wholesale price of power potentially.

K. Jon Taylor: Yeah. So you're right. The loan, we would target 50% of the total investment value. And then if we get the approval of cash recovery during the construction phase, that would fund about 15% of the overall investment, and then the rest, which would be about 35%, would be new equity needs that we would have to put into the plan.

Jon Taylor: Yeah. So you're right. The loan, we would target 50% of the total investment value. And then if we get the approval of cash recovery during the construction phase, that would fund about 15% of the overall investment, and then the rest, which would be about 35%, would be new equity needs that we would have to put into the plan.

Speaker #10: Yeah, so Paul, let me talk about that in regards to West Virginia in particular. I've been doing this a long time, and I've never had in my career a meeting or an announcement like what we had in November in West Virginia.

Got it. Thank you for that. Um and then just wanted to uh pivot towards earned Roes at this point just wondering I guess where you see the biggest Gap versus uh allowed in. I guess you know key Focus going forward which which jurisdictions have uh you know the earner toes earn returns below authorized.

Speaker #10: The overall reception was overwhelmingly positive. From the governor to legislators, to employees, to unions, to executive members of the executive branch in West Virginia—just overwhelmingly positive.

Jeremy Tonet: Got it. Thank you for that. And then just wanted to pivot towards earned ROEs at this point. Just wondering, I guess, where you see the biggest gap versus allowed and I guess, you know, key focus going forward, which jurisdictions have, you know, the earned returns below authorized?

So it's all all things. You'd expect Jeremy the places where you see us going in for rate, cases are the places where our investment, uh, has driven down, uh, the earned Roi, and that's why, you know, clearly why we're going in, uh, John talked about that in his remarks. And then we've also talked about the timing for when we might go in, ultimately, for New Jersey. But it it's the places where we're making the incremental Investments where

Speaker #10: And so I would just say that in the five states that we're in, in terms of addressing resource adequacy and the generation issues, West Virginia, given their integrated nature, is very, very well positioned to address it from an economic standpoint and very welcoming to the investment.

Brian Tierney: So it's all things you'd expect, Jeremy. The places where you see us going in for rate cases are the places where our investment has driven down the earned ROE, and that's why, you know, clearly why we're going in. John talked about that in his remarks, and then we've also talked about the timing for when we might go in, ultimately for New Jersey. But it's the places where we're making the incremental investments, where we lag a little bit due to the incremental investment that we're making, and we just have to refresh that by going in for new rate cases.

Speaker #10: And that's why when we look at how we can help with economic development and resource adequacy, West Virginia is the place where first and foremost we have an opportunity to do that.

We lag a little bit due to the incremental investment that we're making, and we just have to refresh that by going in for, for, uh, new rate cases. Yes. The other thing, I would say, Jeremy, if you look at our overall plan, I mean, we we're in jurisdictions that have formula rate recovery mechanisms. So, 75% of our total Investments are in Formula rate programs. So if you think about the impact on um, growth with respect to that those programs, it it drives a healthy amount of

K. Jon Taylor: Yeah. The other thing I would say, Jeremy, if you look at our overall plan, I mean, we're in jurisdictions that have formula rate recovery mechanisms, so 75% of our total investments are in formula rate programs. So if you think about the impact on growth with respect to that, those programs, it drives a healthy amount of the growth in the plan, with base rate cases being, you know, less of a contributor in the overall scheme of things. So really, most of the growth in the plan is driven by the formula rate investment programs, with a lesser extent from base rate cases.

Jon Taylor: Yeah. The other thing I would say, Jeremy, if you look at our overall plan, I mean, we're in jurisdictions that have formula rate recovery mechanisms, so 75% of our total investments are in formula rate programs. So if you think about the impact on growth with respect to that, those programs, it drives a healthy amount of the growth in the plan, with base rate cases being, you know, less of a contributor in the overall scheme of things. So really, most of the growth in the plan is driven by the formula rate investment programs, with a lesser extent from base rate cases.

Speaker #10: And that's why we've filed for the first unit that we're talking about putting in there. And that's why we would strongly consider and look forward to applying for a second unit and maybe a third and maybe a fourth if things continue the way they are in West Virginia.

Of the growth in the plan with base rate cases, being, you know, less of a contributor in the overall scheme of things. So really, most of the growth in the plan is driven by the formula rate investment programs. Um, with a lesser extent from from base rate cases,

Speaker #11: Okay. But the other areas, it's still open here?

Speaker #10: I mean, you know the issues, Paul. I mean, states are deregulated. They thought the market would provide for it. The market isn't providing for it.

Got it. Thank you for that. And just a last Quick 1, if I could, um, you know, the obviously continues to be a lot of focus on the pjm auction and how this might evolve in the future just wondering any thoughts, you might share their in, um, you know, fees, uh, potential roles if uh, uh, regularly generation or otherwise. Uh, you know, might, um, you know, become a, uh, something that if you would look at more in the future,

Speaker #10: It's really it's tough. And that's why we find ourselves in this difficult PJM stakeholder process. But the issues are going to come down to how much do you want?

Jeremy Tonet: Got it. Thank you for that. And just a last quick one, if I could. You know, there obviously continues to be a lot of focus on the PJM auction and how this might evolve in the future. Just wondering, any thoughts you might share there in, you know, EPI's potential role if, regular generation or otherwise, you know, might become something that EPI would look at more in the future?

Speaker #10: When do you want it? And who's going to pay for it? And our main interest there is making sure there's enough generation so the lights stay on and making sure it's affordable to our customers.

Speaker #11: Okay. Great. Thanks so much.

Um, but the key things that we're going to be focusing on is affordability for our customers. And so as you look at the key things that are going to play out in the stakeholder process, it's going to be how much generation are they looking for? What the timing is going to be?

Speaker #10: Thanks, Paul.

Brian Tierney: So, Jeremy, it's still early days in the stakeholder process. I think it just began yesterday or the day before, continuing today. You know, the stakeholder process in PJM is a really, really difficult one. But the key things that we're going to be focusing on is affordability for our customers. And so as you look at the key things that are going to play out in the stakeholder process, it's going to be how much generation are they looking for, what the timing's going to be, how it's going to be paid for, and who's going to bear the cost? Like, all the basic things that you would look for. So we are involved in the stakeholder process.

Speaker #12: Our next question is from the line of Anthony Crowdell with Mizuho Securities. Pleased to see you with your questions.

Speaker #13: Hey, just two quick housecleaning items. One is to Shar's question earlier on the spread or the difference between rate-based growth and earnings growth, your CAGRs.

Speaker #13: Just what would cause that to maybe contract or expand as we move out to the forecast period, where it's very unlikely, whether it's 240 bps or more?

How it's going to be paid for and who's going to bear the cost? Like all the basic things that you would look for. So we are involved in the stakeholder process, we're going to continue to be uh involved and and first and foremost, we're going to be looking out for affordability uh for our customers, as we work our way through that, in terms of First Energy and our interest in in uh,

Speaker #13: What would cause that to change throughout the forecast period?

Speaker #10: I think the things that we've talked about—and it's kind of the basic things that you would think of—how much incremental investment can we have?

Brian Tierney: We're going to continue to be involved, and first and foremost, we're going to be looking out for affordability for our customers as we work our way through that. In terms of FirstEnergy and our interest in regulated generation, you know, look at our states, and you have states where Ohio just passed legislation saying that the utility can't own regulated generation. And then I think it would be difficult for us, too, in places like New Jersey and Maryland. So that really leaves us then with West Virginia, where we've told you what our plans are. We want to get this one approved, and then, if West Virginia would like, we're interested in investing incrementally more in that state, and that leaves you with Pennsylvania.

Speaker #10: And then how quickly can we get that recovered in rates? And it's just that it's just that simple, Anthony. And so that's why we're showing you what's in the plan.

Speaker #10: We're showing you what we think could be incremental, how big it is, when we think we might get approvals for that. And on the recovery side, you're seeing us regularly go in for rate recovery when it's not already in the 75% that's covered in the formula rates the way John talked about.

In in regulated generation, you, you know, look at our states, and you have states where um Ohio just passed legislation saying that the utility can't uh, own regulated generation. And then I think it would be difficult for us to in places like New Jersey and Maryland. So that really leaves us then with West Virginia, where we've told you, what our plans are. We want to get this 1 approved and then uh if West Virginia would like we're interested in investing incrementally, more in that state, and that leaves you with Pennsylvania. And, um, and again, we don't have a path to seeing regulated generation in that state yet, um, but if if they'd like us to consider it, we we'd be willing to look at it, but our clearest path to helping with

Speaker #13: Great. And then just a follow-up to David's question. I just missed it—did you guys state when you plan on filing your next New Jersey case?

Brian Tierney: So that really leaves us then with West Virginia, where we've told you what our plans are. We want to get this one approved, and then, if West Virginia would like, we're interested in investing incrementally more in that state, and that leaves you with Pennsylvania.

what that issue is 1 what we're doing in West Virginia and then to what we're doing in the stakeholder process uh at pjm

Speaker #10: We've not said. And we are we're not being cagey about that. We just haven't decided. And obviously, we'll be in discussions with the governor's office and the BPU about when is the right time for us to go in.

Got it. That's helpful. I'll leave it there. Thanks.

Thanks, Jeremy.

Brian Tierney: And again, we don't have a path to seeing regulated generation in that state yet, but if they'd like us to consider it, we'd be willing to look at it. But our clearest path to helping with that issue is, one, what we're doing in West Virginia, and then, two, what we're doing in the stakeholder process at PJM.

The next question is from the line of Paul Patterson with Glenrock Associates, please. Just see with your questions.

Hey, good morning.

Morning, Paul.

Speaker #13: Great. That's all I had. Thanks for taking my questions.

Speaker #10: Thanks, Anthony.

Um just on the uh on the transmission when I look at slide 7. Um,

Speaker #12: Thank you. Our last question comes from the line of Andrew Weisel with Scotiabank. Please proceed with your question.

Speaker #14: Hey, good morning, everyone. I can't believe this is the last—can't believe it's the last question, but I want to ask about two topics that received very little airtime today.

Is how much of this I guess is, is demand driven? I mean, is that part of the 20% or is this really pretty much just? Um,

Andrew Weisel: Got it. That's helpful. I'll leave it there. Thanks.

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

Brian Tierney: Thanks, Jeremy.

Speaker #14: Data centers in Ohio regulations. First, on the data centers, I see more additions to the contracted demand and pipeline disclosure. Appreciate the table with the detail by state.

Operator: The next question is from the line of Paul Patterson with Glenrock Associates. Please just give us your questions.

Paul Patterson: Hey, good morning.

Brian Tierney: Morning, Paul.

Just uh, you know, replacing the Aging issue, um, the the the sort of the reliability issue and also just in the expected, New Jersey is is the offshore wind thing still going on there. Um, is that still part of the plan that that try collector?

Paul Patterson: Just on the transmission, when I look at slide 7, how much of this, I guess, is demand driven? I mean, is that part of the 20%, or is this really pretty much just you know, replacing the aging issue, the sort of the reliability issue? And also just in respect to New Jersey, is the offshore wind thing still going on there? Is that still part of the plan, that tri-collector project and stuff, or how should we think of that?

Speaker #14: I could be wrong. I think that's in the disclosure. Very helpful. My question is relative to the latest updates and the recent trends. Where are you seeing the most activity?

Um, project and stuff, or how should we think of that?

Speaker #14: In which state? And are the latest additions going to be within this five-year plan, or are those mostly going to be more like the early 2030s by the time they ramp up?

Speaker #10: Yeah. So we're seeing a lot of activity currently in our Maryland service territory, associated with the data center outside of out Frederick and outside of Frederick, Maryland.

Speaker #10: And then after that, we're seeing significant activity in both Pennsylvania and Ohio. And you're seeing that sort of significant amount of activity between now and 2030, 2031.

Let me, let me start with that. Last part. We're we're working with, uh, New Jersey and pjm to modify. What portions of that plan are no regrets. And we'll be beneficial to New Jersey and pjm even without the offshore wind component of that. Um, so we are working to make those modifications that are agreeable to both New Jersey and pjm to make sure that uh, we're investing in what they want us to invest in and it's no regrets regardless of the offshore wind. So that's

Brian Tierney: Let me, let me start with that last part. We're, we're working with New Jersey and PJM to modify what portions of that plan are no regrets and will be beneficial to New Jersey and PJM, even without the offshore wind component of that. So we are working to make those modifications that are agreeable to both New Jersey and PJM to make sure that we're investing in what they want us to invest in, and it's no regrets, regardless of the offshore wind. So that's, that's in process, as we speak. If you look at the rest of the transmission, a lot of it is demand driven, but a lot of it's aging infrastructure as well. So if you look at the $5 billion that we've gotten from the open window process, since 2022, I'd say that's all demand driven.

Speaker #10: But then, a huge amount of activity in terms of load and contracted load by that 2035 timeframe—so, between 2031 and 2035. So those are the locations.

Speaker #10: Those are the places where we're seeing most of that data center activity.

Brian Tierney: So that's, that's in process, as we speak. If you look at the rest of the transmission, a lot of it is demand driven, but a lot of it's aging infrastructure as well. So if you look at the $5 billion that we've gotten from the open window process, since 2022, I'd say that's all demand driven.

Speaker #14: Great, thank you. In Ohio, obviously, 2025 was a super busy year for you, and the company got through a lot of important proceedings and dockets.

Speaker #14: Looking forward, what are the priorities for 2026 in the next few years, whether that's on the regulatory side or execution? And should we expect conference calls to go almost nearly the whole time with barely any talk about Ohio for a while?

Brian Tierney: And so that's what the data centers are doing, what's happening with just demand across the PJM system, and they're responding to that, and that's, you know, clearly $5 billion of what's in the plan that we've been awarded. And then if you look at the rest of what we're doing, you know, we've made significant investments since 2014, but have only addressed about 30% of the system. And about, you know, 60% to 70% of the system is going to have the end of its useful life in the next 10 years. And so that's a huge amount of what we're spending on the transmission investment.

Speaker #14: Should it be quiet in that state?

That's in process. Uh, as we speak, if you look at the rest of the transmission, a lot of it is demand driven but a lot of its aging infrastructure as well. So if you look at the 5 billion that we've gotten from the open window process, uh, since 2022, I, I'd say that's all demand driven. And so, that's what our data centers doing, uh, what's happening with um, um, just demand across the pjm system and their responding to that. And that's, you know, clearly 5 billion of of what's in the plan that we've been awarded. And then, if you look at the, the rest of what we're doing, you know, we've made significant Investments since, uh, 2014 but have only addressed about 30% of the system and about, you know, 60 to 70% of the system is going to have the end of its useful life in the next 10 years. And so that's a huge amount of what we're spending on the uh, on the transmission investment and those are things that

Speaker #10: Thank you for that question. The one thing that we were monitoring in Ohio was, the commission told us since I started here, that the business-as-usual cases were going to go business-as-usual.

We have to do for reliability. We have to do for economic development and don't require a lot of incremental improvements uh for us to make those Investments.

Speaker #10: And the legacy issues cases would be separate and not mingled with the business-as-usual case. The Commission held very much true to that.

Paul. The other thing I would add is if you if you look at our data center pipeline, if you look at the 13th through 2035, obviously that's not in our plan today but each gigawatt that's added to

Speaker #10: And so we were thrilled to be able to get what we think was a constructive order in the base rate case. In the punishment phases, there was a significant penalty that was paid there.

Brian Tierney: Those are things that we have to do for reliability, we have to do for economic development, and don't require a lot of incremental approvals for us to make those investments.

You know, the the contract that are are are active demand would probably drive, you know, 250 million dollars or so of incremental Capital Investments on the transmission system.

Speaker #10: And we're happy to settle that and get all forms of appeal of that behind us and just move on from that. So, what we see is business as usual going forward.

K. Jon Taylor: Yeah, Paul, the other thing I would add is if you, if you look at our data center pipeline, if you look at the 13 gigawatts that we have in the pipeline through 2035, obviously, that's not in our plan today, but each gigawatt that's added to, you know, the, the contracted or, or, or active demand would probably drive, you know, $250 million or so of incremental capital investments on the transmission system.

Jon Taylor: Yeah, Paul, the other thing I would add is if you, if you look at our data center pipeline, if you look at the 13 gigawatts that we have in the pipeline through 2035, obviously, that's not in our plan today, but each gigawatt that's added to, you know, the, the contracted or, or, or active demand would probably drive, you know, $250 million or so of incremental capital investments on the transmission system.

Speaker #10: In Ohio, with the legacy issues behind us, we'll be going in, in the near term, for a three-year rate case to get that moving forward and get us firmly footed in that new regulatory regime that the new legislation has.

Should we think about the breakdown of roughly speaking? Obviously, it's kind of early, but if you follow what I'm saying in terms of how how people should sort of, think about that.

That.

Paul Patterson: Okay. And just in terms of the cost allocation, and I guess that's determined basically by retail jurisdictions, should we think of a lot of this CapEx being absorbed by the new data center demand growth? Or how should we think about the breakdown of, roughly speaking, obviously, it's kind of early, but you follow what I'm saying in terms of how people should sort of think about that, that, that-

I, I do Paul. So anything that is directly for that specific customers being born by the customer,

Speaker #10: And Ohio's always been very supportive of wires investment in the state. That drives economic development and improves reliability. And we anticipate that that will continue going forward.

Speaker #10: So, it was a pivotal year for us—2025. And we'll be right back in for the three-year rate case, and anticipate constructive dialogue with the Commission and intervenors, and hope to be able to settle some issues going forward.

Uh the regional upgrades are being handled the way pjm uh handles those with generally the region that's benefiting from the investment is paying for the investment. So it's a traditional pjm uh user pays the benefit owner pays most of the uh cost of what's happening on a regional basis.

Brian Tierney: I do, Paul. So anything that is directly for that specific customer is being borne by the customer. The regional upgrades are being handled the way PJM handles those with generally the region that's benefiting from the investment is paying for the investment. So it's a traditional PJM user pays... The benefit owner pays most of the cost of what's happening on a regional basis.

Okay. Um and then just in terms of the the generation proposals that you guys have been making

Um, for a couple of years now.

Speaker #10: But it's nice to have Ohio firmly focused on the future and the new regulatory regime, and being a constructive standpoint that's been demonstrated with the company.

How would you characterize the the overall reception?

Speaker #10: And we hope Torrance and his team will keep that moving forward with the Commission staff and all intervenors. Thank you for the question, Andrew.

Um because you know it's it's changing how things are currently this auction and what have you? I mean have you do you get a feeling that there's some momentum here um in terms of your discussions with with Regulators uh in the in the service territories about

Paul Patterson: Okay. And then just in terms of the generation proposals that you guys have been making for a couple of years now, how would you characterize the overall reception? Because, you know, it's changing how things are currently, this auction and what have you. I mean, do you get a feeling that there's some momentum here in terms of your discussions with regulators in the service territories about, you know, just opening this whole thing up and just not relying completely on the capacity auction? And when do you think we might see some action, some tangible action in terms of maybe making some moves on this, which would lower rates? ... potentially not your rate, you know, not what you technically control, but would lower the wholesale price of power potentially?

Speaker #14: Okay. Good stuff. Thank you for the commentary.

Speaker #10: Thank you. Okay, that was the last question. I'd like to thank everyone for joining us today. We strengthen FirstEnergy in 2025 operationally, financially, and strategically.

Speaker #10: We enter 2026 with momentum, a clear business model, and a disciplined plan to work safely, improve reliability, maintain affordability, and deliver sustainable growth. We look forward to updating you on our progress as we go forward throughout the year.

About, you know, just opening the second thing up and just not relying completely on the capacity auction. And, and when do you think we might see some, some action? Uh, some tangible action in terms of maybe making some moves on this, which would lower rates, um, potentially not your rate, you know, not not what you could technically control, but would lower the wholesale, price of power potentially,

Yeah, so let me talk about that in regards to West Virginia in particular, right?

Speaker #10: Thank you, everyone, and have a good day.

Paul Patterson: And when do you think we might see some action, some tangible action in terms of maybe making some moves on this, which would lower rates? ... potentially not your rate, you know, not what you technically control, but would lower the wholesale price of power potentially?

Speaker #12: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines at this time, and have a wonderful day.

I've been doing this a long time, and I've never had a, my career, a a meeting or an announcement. Like what we had in November in West Virginia, the overall reception was overwhelmingly positive.

Brian Tierney: Yeah. So let me talk about that in regards to West Virginia, in particular. I've been doing this a long time, and I've never had in my career a meeting or an announcement like what we had in November in West Virginia. The overall reception was overwhelmingly positive, from the governor to legislators, to employees, to unions, to executive members of the executive branch in West Virginia, just overwhelmingly positive. And so I would just say that in the five states that we're in, in terms of addressing resource adequacy and the generation issues, West Virginia is, given their integrated nature, very, very well positioned to address it from an economic standpoint and very welcoming to the investment.

From the governor to legislators to employees, to unions to um uh executive members, uh, of the executive branch in in West, Virginia. Just overwhelmingly positive. And so, I, I would just say that in the 5 states that we're in, in terms of addressing resource adequacy and the generation issues. Um, West Virginia is given their integrated nature is uh, very, very well, positioned to address it from an economic standpoint, and very welcoming to the investment. And that's why when we look at how

Brian Tierney: And so I would just say that in the five states that we're in, in terms of addressing resource adequacy and the generation issues, West Virginia is, given their integrated nature, very, very well positioned to address it from an economic standpoint and very welcoming to the investment.

Brian Tierney: That's why when we look at how we can help with economic development and resource adequacy, West Virginia is the place where first and foremost, we have an opportunity to do that, and that's why we've filed for the first unit that we're talking about putting in there. That's why we would strongly consider and look forward to applying for a second unit, maybe a third, and maybe a fourth, if things continue the way they are in West Virginia.

We can help with economic development and resource adequacy. Uh, West Virginia is the place where first and foremost, we have an opportunity to do that and that's why we've filed for the first unit that we're talking about putting in there. And that's why we would strongly uh, consider and look forward to uh, applying for a second unit and maybe a third, and maybe a fourth, if if uh, things continue the way they are in West Virginia.

Okay, but the other areas you it's still up in here. I I mean we

You know, the issues Paul? I, I mean, uh, states are deregulated. Uh, they thought the market would provide for it. Um, the market isn't providing for it. It's really, it's tough and that's why we find ourselves in this difficult pjm stakeholder process, but the issues are going to come down to

Paul Patterson: Okay, but the other areas, you, it's still up in the air?

Brian Tierney: I mean, we—you know the issues, Paul. I mean, states are deregulated. They thought the market would provide for it. The market isn't providing for it. It's really. It's tough, and that's why we find ourselves in this difficult PJM stakeholder process. But the issues are going to come down to: how much do you want, when do you want it, and who's going to pay for it? And our main interest there is making sure there's enough generation so the lights stay on and making sure it's affordable to our customers.

How much do you want? When do you want it? And who's going to pay for it and, and our main interest, there is, uh, making sure there's enough generation. So, the lights stay on and uh, making sure it's affordable, uh, to our customers.

Okay, great. Thanks so much.

Thanks Paul.

Our next question is from the line of Anthony Crowell with muo security. Please just see you with your questions.

Hey just 2 quick house. Cleaning items. 1 is to chars question earlier on the the spread or the difference between rate based growth and earnings growth, your kurz. Just what would cause that to maybe

Paul Patterson: Okay, great. Thanks so much.

contract or expand as we move out to the forecast, period, or it's very unlikely, whether it's 240, bits or more, what would cause that to change throughout the forecast, period?

Brian Tierney: Thanks, Paul.

Operator: Our next question is from the line of Anthony Crowder with Mizuho Securities. Please just give your three questions.

I, I think the things that that we talked about, and it's, you know, kind of the basic things that you would think of

Anthony Crowdell: Hey, just two quick housecleaning items. One is to Shar's question earlier on the spread or the difference between rate-based growth and earnings growth, your CAGRs. Just what would cause that to maybe contract or expand as we move out to the forecast period, or it's very unlikely, whether it's 240 basis points or more, what would cause that to change throughout the forecast period?

How much incremental investment can we have? And then, um, how quickly can we get that recovered in rates? And it's just that

Brian Tierney: I think the things that we talked about, and it's, you know, kind of the basic things that you would think of. How much incremental investment can we have? And then, how quickly can we get that recovered in rates? And it's just that. It's just that simple, Anthony. And so that's why, we're showing you what's in the plan. We're showing you what we think could be incremental, how big it is, when we think we might get approvals for that. And on the recovery side, you're seeing us regularly go in for, rate recovery when it's not already in the 75% that's covered in the formula rates, the way John talked about.

Get approvals for that. And on the recovery side you're seeing us regularly go in for uh, rate recovery when it's not already in the 75%. That's covered in the formula rates. The way, John talked about

Great. And then just a follow up to David's question. I just missed it. Did you guys State when you plan on filing? Your next New Jersey case?

We we've not said, and we are, we're not being cagey about that. We just haven't decided and um, obviously we'll be in discussions with, uh, the governor's office and the BPU about when is the right time for us to go in.

Great. That's all I had. Thanks for taking my questions.

Thanks Anthony.

Anthony Crowdell: Great. And then just a follow-up to David's question. I just missed it. Did you guys state when you plan on filing your next New Jersey case?

Thank you. Our last question comes from the line of Andrew weisel with Scotia Bank, please just use your questions.

Hey, good morning everyone. Um morning, Andrew please. This is the

Brian Tierney: We've not said, and we're not being cagey about that. We just haven't decided, and obviously we'll be in discussions with the governor's office and the BPU about when is the right time for us to go in.

Anthony Crowdell: Great. That's all I had. Thanks for taking my questions.

Brian Tierney: Thanks, Anthony.

Operator: Thank you. Our last question comes from the line of Andrew Weisel with Scotiabank. Please just give us your questions.

Andrew Weisel: Hey, good morning, everyone.

Brian Tierney: Morning, Andrew.

Andrew Weisel: I can't believe this is the last. Can't believe it's the last question, but I want to ask about two topics that received very little airtime today, data centers and Ohio regulations. First, on the data centers, I see more additions to the contracted demand and pipeline disclosure. Appreciate the table with the detail by state. I could be wrong. I think that's in the disclosure. Very helpful. My question is, relative to the latest updates and the recent trends, where are you seeing the most activity, in which state? And are the latest additions going to be within this five-year plan, or are those mostly going to be more like the early 2030s by the time they ramp up?

I can't believe it's the last question, but I want to ask about 2 topics that received very little air time today. Uh, data centers in Ohio regulations. First, on the data centers, I see more additions to the contracted demand and pipeline disclosure uh appreciate the table with the detail by state. I could be wrong. I think that to be a disclosure, a very helpful, my question is relative to the latest updates and and the recent Trends, where are you? Seeing the most activity in which state and are the latest additions going to be within this 5 year plan, or are those mostly going to be more like the early 2030s by the time they ramp up?

Yes. So we're seeing a lot of activity currently in um in our Maryland service territory associated with the data center outside of uh out Frederick and outside of Frederick Maryland. And then after that we're seeing significant activity in both uh Pennsylvania and Ohio um and you're seeing that

Brian Tierney: Yeah, so we're seeing a lot of activity currently in our Maryland service territory associated with the data center outside of out Frederick and outside of Frederick, Maryland. And then after that, we're seeing significant activity in both Pennsylvania and Ohio. And you're seeing that sort of, you know, significant amount of activity between now and 2030, 2031, but then a huge amount of activity in terms of load and contracted load by that 2035 timeframe, so between 2031 and 2035. So, that's those are the locations, those are the places where we're seeing most of that data center activity.

sort of, you know, significant amount of activity between now and uh and 2030 2031, but then a huge amount of activity in terms of load and contracted load uh by that 2035 time frame so between 2031 and 2035. So um that's those are the locations. Those are the places where we're seeing uh, most of that data center activity.

Great. Thank you.

In Ohio. Obviously, 2025 was a super busy year for you, and the company got to a lot of important proceedings. In dockets, looking forward. What are the priorities for 2026 in the next few years? Whether that's on the regulatory side or execution and should we expect confidence calls to go? Almost nearly the whole time? With barely any talk about Ohio for a while. Should it be quiet in that in that state?

Andrew Weisel: Great. Thank you. In Ohio, obviously, 2025 was a super busy year for you, and the company got through a lot of important proceedings and dockets. Looking forward, what are the priorities for 2026 in the next few years, whether that's on the regulatory side or execution? And should we expect conference calls to go almost nearly the whole time with barely any talk about Ohio for a while? Should it be quiet in that state?

You know, thank you for that question. The 1 thing that we were monitoring in Ohio was the, the the commission told us, uh, since I started here that the business as usual cases, we're going to go business as usual and the, uh, Legacy issues cases would be separate and and not mingled with the business as usual case.

Brian Tierney: You know, so thank you for that question. The one thing that we were monitoring in Ohio was the commission told us, since I started here, that the business as usual cases were going to go business as usual, and the legacy issues cases would be separate and not mingled with the business as usual cases. The commission held very much true to that. And so we were thrilled to be able to get what we think was a constructive order in the base rate case. In the punishment phases, there was a significant penalty that was paid there, and we're happy to settle that and get all forms of appeal of that behind us and just move on from that.

Cases the commission held, very much true to that. Um, and so, we were thrilled to be able to get what we think, was a constructive order in the base rate case. Um, in the punishment phases, there was a significant, uh, penalty that was paid there. And, and we're happy to settle that and get all forms of, uh, uh, appeal of that behind us and just move on from that. So what we see is, um, business as usual going forward,

Brian Tierney: So what we see is business as usual going forward in Ohio with the legacy issues behind us. We'll be going in in the near term for a three-year rate case to get that moving forward and get us firmly footed in that new regulatory regime that the new legislation has. And, you know, Ohio's always been very supportive of wires investment in the state that drive economic development and improved reliability, and we anticipate that that will continue going forward. So it was a pivotal year for us, 2025, and we'll be right back in for the three-year rate case and anticipate constructive dialogue with the commission and interveners and hope to be able to settle some issues going forward.

In Ohio, with the Legacy issues behind us, we'll be going in in the near term for a 3-year rate case, uh, to get that moving forward and get us firmly footed in that um uh new regulatory regime uh, that the new legislation has and, you know, Ohio's, always been uh, very supportive of wires investment in the state that drive Economic Development and improved reliability. And we anticipate

Okay, good stuff. Thank you for the commentary.

Thank you.

Brian Tierney: But it's nice to have Ohio firmly focused on the future and the new regulatory regime and being a constructive standpoint that's been demonstrated with the company, and we hope Torrence and his team will keep that moving forward with the commission staff and all interveners. Thank you for the question, Andrew.

Okay, that was the last question. I'd like to thank everyone for joining us. Today we strengthen First Energy in 2025, operationally financially and strategically, we enter 2026 with momentum a clear business model and a discipline plan to work safely improve reliability, maintain affordability and deliver sustainable growth.

We look forward to updating you on our progress as we go forward throughout the year.

Thank you, everyone and have a good day.

Andrew Weisel: Okay, good stuff. Thank you for the commentary.

Brian Tierney: Thank you. Okay, that was the last question. I'd like to thank everyone for joining us today. We strengthened FirstEnergy in 2025 operationally, financially, and strategically. We enter 2026 with momentum, a clear business model, and a disciplined plan to work safely, improve reliability, maintain affordability, and deliver sustainable growth. We look forward to updating you on our progress as we go forward throughout the year. Thank you, everyone, and have a good day.

Ladies and gentlemen, thank you for your participation. This includes today's teleconference, you may now disconnect your lines at this time and have a wonderful day.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines at this time, and have a wonderful day.

Q4 2025 FirstEnergy Corp Earnings Call

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