Vincent Sorgi
President and Chief Executive Officer at PPL
Thank you, Andy, and good morning, everyone. Welcome to our third quarter investor update. Let's start with an overview of our financial results on Slide 4. Today, we announced third quarter reported earnings of $0.31 per share. Adjusting for special items, third quarter earnings from ongoing operations were $0.43 per share compared with $0.41 per share a year ago. These results position us well to deliver our 2023 earnings guidance, despite the significant impact of mild weather and storms in the first half of the year.
As Joe will cover in his financial review, we've been successful in overcoming these headwinds through effective regulatory mechanisms, our continued focus on operating efficiently and outperformance in several other areas. The team has done an outstanding job in keeping us on track to deliver our 2023 financial objectives, while providing energy safely and reliably to our customers.
As a result of our progress through Q3, we have narrowed our 2023 ongoing earnings forecast range to $1.55 to $1.60 per share, with the midpoint of $1.58 per share unchanged. As we look to close out the year in strong fashion, we also remain on track to invest nearly $2.5 billion to modernize the grid, strengthen grid resiliency, and advance a cleaner energy mix. In addition, we are on pace to achieve our targeted $50 million to $60 million in O&M efficiencies this year.
Looking forward, we've reaffirmed our projected earnings per share and dividend growth rates of 6% to 8% through at least 2026 as we remain confident in our low-risk business plan. This growth is supported by our $12 billion capital investment plan and targeted O&M savings of at least $175 million by 2026 to advance a reliable, resilient, affordable and cleaner energy future. We expect to fund this growth without the need for equity issuances through at least 2026, while maintaining superior credit metrics and one of the strongest balance sheets in our sector.
Turning to Slide 5 and some operational highlights. We continue to deliver top quartile reliability and advance industry-leading grid innovation that drives efficiency and improves service to our customers as we execute our utility of the future strategy. In support of this work, the Department of Energy has selected PPL Electric Utilities and Rhode Island Energy to receive a combined $100 million in federal funding for planned smart grid projects in our service territories. The projects that were selected by the DoE were generally included in our current capital plan. However, these grants will certainly help to support affordability for our customers, which we remain keenly focused on.
Our Pennsylvania project will extend PPL Electric's self-healing smart grid, already one of the most sophisticated energy networks in the nation, to further enhance grid reliability and resiliency. Meanwhile, our Rhode Island project will accelerate Rhode Island Energy's investment in grid resilience and smart grid capabilities to support the state's leading clean energy goals.
The process to receive this funding through the IIJA was highly competitive. PPL was one of only a few companies to be selected for multiple awards in this initial round of funding. As we focus on creating the utilities of the future that are agile, innovative, and technology enabled, we continue to be recognized for our leadership in the smart grid space. During the third quarter, PPL Electric Utilities received two additional awards for innovative industry-leading work that has helped improve the safety, reliability and affordability of electricity delivered to our more than 1.5 million customers in Pennsylvania.
Moving to Rhode Island, we remain focused on supporting Rhode Island's clean energy goals and bringing more affordable offshore wind opportunities to the state. On October 13, we issued an RFP to procure 1,200 megawatts of offshore wind to help power the state's energy needs. The RFP was the state's largest ever renewable energy solicitation and was issued just a week after Connecticut, Massachusetts and Rhode Island signed a memorandum of understanding, paving the way for a potential multi-state selection of offshore wind opportunities.
Each state is conducting procurements in a similar timeframe, and we are hopeful that our larger procurement, a streamlined application process, flexibility on contract durations, and the potential for multi-state coordination will provide better economies of scale for developers and reasonable pricing options for our customers. Bids are due by January 31, with any resulting selection expected next summer. Any PPAs agreed to by Rhode Island Energy would be subject to review and approval by the Rhode Island Public Utilities Commission.
Lastly on this slide, LG&E began contract negotiations a few weeks ago for a labor contract that expires on November 10. The contract covers more than 600 of our employees in Kentucky. For decades, we have successfully worked together with our unions in Kentucky to reach agreement, and we are optimistic we can continue that success. We look forward to continued progress over the coming days and weeks to achieve an outcome that balances the needs of our employees and our customers. And importantly, the company has completed its preparedness plan to ensure we can continue to deliver safe and reliable service to our customers, should negotiations break down.
Moving to Slide 6 for a couple of key regulatory updates. We remain focused on advancing our generation investment plan as we seek to replace up to 1,500 megawatts of aging coal generation with an affordable, reliable and cleaner energy mix by 2028. We continue to believe that our plan represents the best path forward for our Kentucky customers. As proposed, it would replace several 1970s era coal units with over 1,200 megawatts of new combined cycle natural gas generation, nearly 1,000 megawatts of solar generation, and 125 megawatts of battery storage.
In addition, it would establish more than a dozen new energy efficiency programs. The Kentucky Public Service Commission conducted public hearings in August, followed by post-hearing briefs in September. The hearings as well as the intervener briefs have largely been as expected. And looking forward, we continue to expect a decision from the Commission by November 6.
Shifting to Rhode Island, in late September, we received regulatory approval to deploy advanced metering functionality state-wide as we lay the foundation for a smarter, more resilient, reliable and dynamic grid that supports the state's leading climate goals. As part of its unanimous decision, the Rhode Island Public Utilities Commission authorized capital investments of up to $153 million for this initiative. We are pleased with the outcome of the Commission's decision for this important project.
Advanced metering functionality, which we've deployed in Pennsylvania and are currently deploying in Kentucky, is a key step in modernizing our energy networks. And as we've seen in our other service territories, it delivers significant benefits for our customers. We expect to begin installing the digital meters in late 2024 and to complete the deployment over the next three years, capitalizing on our experience in both Pennsylvania and Kentucky. These investments will also be largely recoverable through the annual ISR process in Rhode Island.
That concludes my operational update. I'll now turn the call over to Joe for the financial update.
