Duke Energy Corporation (Holding Company)

Hello, everyone, and thank you for joining us today for the Duke Energy Third Quarter 2025 Earnings Call. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad to remove yourself from the question queue. I would now like to hand over to our host, Abby Motzinger, the Vice President of Investor Relations to begin. Please go ahead, Abby.

Thank you, Sammy, and good morning, everyone. Welcome to Duke Energy's Third Quarter 2025 Earnings Review and Business Update. Leading our call today is Harry Sedaris, President and CEO, along with Brian Savoy, Executive Vice President and CFO. Today's discussion will include the use of non-GAAP financial measures and forward-looking information. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with the reconciliation of non-GAAP financial measures. With that, let me turn the call over to Harry.

Thank you, Abby, and good morning, everyone. Today, we announced strong results for the third quarter with adjusted earnings per share of $1.81 compared to $1.62 last year, driven by continued growth in our electric utilities. We are well positioned for a solid finish to the year and are narrowing our full year guidance range to $6.25 to $6.35. I'm proud of how our teammates are executing our strategy, delivering value for our customers, communities, and shareholders every day while preparing our system to serve the growing energy needs of tomorrow. We approach 2026 with momentum as our company converts large load economic development prospects into tangible projects with signed electric service agreements. And we are already turning dirt on projects to meet this loaded growth. We're carrying out an ambitious generation build that will add more than 13 gigawatts of capacity to our system in the next five years. With a maturing pipeline and concrete investment plans in place, we're reaffirming our long-term EPS growth rate of 5% to 7% through 2029 and have confidence we will earn the top half of the range beginning in 2028. Moving to slide five, as load growth materializes and we invest in modernizing our system, we expect our new five-year capital plan to be between $95 and $105 billion, increasing the largest investment plan in the industry. The step-up is primarily related to investments in new generation that will drive earnings-based growth of more than 8.5% through 2030. We will provide additional details on the updated capital and financing plan on our fourth quarter call in February. As the investment needs of our utilities accelerate, I want to underscore that customer value and affordability remain front and center. Our job is to address the needs of all customers from large industrial customers that are competing against the global market to residential customers that are managing their household budgets. This focus starts with cost management, which is a core competency for Duke Energy. We continue to leverage AI and pursue a technology enabled industry leading cost structure as we invest in our system. Other tools we are utilizing to keep rates as low as possible include the combination of Duke Energy Carolinas and Duke Energy Progress Utilities, which if approved, would save retail customers more than $1 billion through 2038. Storm cost securitization, which is expected to save customers in the Carolinas up to 18% on their bills compared to traditional recovery mechanisms. energy tax credits, which collectively result in hundreds of millions of dollars in annual savings. And we're protecting existing customers through tariff structures and contract provisions for new large load projects. These are just a few of the many solutions we employ to ensure our 10 million customers receive the service they count on at a fair price. We recognize that our work to provide affordable energy for customers is never done. but we are proud that average rate changes have paced below the rate of inflation over the last decade and that our rates are well below the national average. Turning to slide six, the majority of our capital plan increase relates to our record generation build, which is hitting a new gear. Last month we filed our updated Carolinas Resource Plan in North Carolina, which expands upon the previous filing approved by regulators in 2024 and presents an updated path to continue to meet the needs of our customers reliably and affordably. The plan maintains an all-of-the-above strategy and supports the work already underway to meet near-term growth. Importantly, the updated IRP results in annual customer bill impacts of approximately 2% over the coming decade, below the rate of inflation and significantly lower than the previously approved plan. The roadmap we laid out isn't just a long-term view. We're actively executing on generation bill today. We're on track to add more than 8.5 gigawatts of new dispatchable generation across our service territories over the next five years. This includes over one gigawatt of upgrades to maximize the value of our existing fleet and seven and a half gigawatts of new natural gas. In the Carolinas, we have secured all major permit approvals, gas supply, long lead equipment, and workforce contracts for our Person County combined cycle units, and construction has commenced at the site. We also recently filed CPCNs for the Anderson County Combined Cycle and Smith Combustion Turbine projects. We expect approvals on both these sites in mid-2026. In Indiana, we appreciate the Commission's recent approval of our CPCN for the Cayuga Combined Cycle gas units, a critical project to meet the state's growing power needs. The order approved two settlements reached in the case, as well as semiannual CWIP recovery through a rider. This recovery mechanism will support the balance sheet through the construction cycle and reduce overall costs to the customers. All of the work underway today will enable us to continue to serve our customers reliably and affordably into the future. Beyond supplying power, these grid and generation investments deliver significant value to our communities. In September, we partnered with E&Y to estimate the economic impact of our investment plan. The 10-year capital plan we laid out in February will equate to over $370 billion in economic output, including approximately $130 billion in labor income, and will contribute more than $200 billion to the GDP for the communities we serve. The investment will also support nearly 170,000 jobs annually. We are privileged to be a critical economic driver of the communities we serve, and we look forward to growing together in the decades to come. In closing, the fundamentals of our business are the strongest they've ever been. We're powering tremendous growth across the Southeast and Midwest with solid plans based on concrete projects that provide a durable runway of investment well into the future. We're meeting our financial and strategic objectives while continuing our focus on operational excellence. And I am confident the tailwinds we see will continue to strengthen.