Vincent Sorgi
President and Chief Executive Officer at PPL
Thank you, Andy, and good morning, everyone. Welcome to our 4th-quarter investor update. Turning to Slide 4, I'm very proud of our PPL team and all we accomplished in 2024 in executing our utility of the Future strategy. Most importantly, we continue to deliver electricity and natural gas safely, reliably and affordably to our 3.5 million customers in Pennsylvania, Kentucky, Rhode Island and Virginia. This included top-quartile transmission and distribution reliability in Kentucky, Pennsylvania and Rhode Island and generation reliability in Kentucky that remains among the nation's best.
This was a fantastic result considering we saw some of the worst storms in our company's history as our crews were called upon time-and-time again to restore power for our customers. To combat the more frequent and severe storms, we increased our vegetation management spending compared to plan to enhance reliability and reduce storm-related outages. And we'll continue to review our vegetation management programs going-forward to effectively balance reliability versus cost for our customers.
Moving to our financial performance. We delivered ongoing earnings of $1.69 per share, the midpoint of our original 2024 guidance. While we are disappointed that we fell 01 short of the increased ongoing earnings midpoint guidance of $1.70 per share due to some very mild weather in the second-half of December. We're confident that the increase to vegetation spend was in the best interest of all of our stakeholders in closing out the year.
Turning to other 2024 highlights. We executed $3.1 billion of planned infrastructure investments on-time and on-budget to strengthen grid reliability and resilience and advance a safe, reliable, affordable and cleaner energy mix. We also continued our focus in becoming more efficient and keeping energy affordable, achieving the top-end of our cumulative annual O&M savings target of $130 million from a 2021 baseline through continued deployment of smart grid technology, automation and data science.
As shared on our 3rd-quarter call, we completed the integration of Rhode Island Energy into PPL. Exiting the transition services agreement we entered with National Grid when we acquired Rhode Island Energy in May 2022. The integration involved exiting more than 130 transition services and phases over the past two years with careful attention paid to minimizing any impacts on our customers and employees along the way. Overall, I'm immensely proud of the strong collaboration and teamwork that took place across PPL and with National Grid to achieve this success.
Moving to Slide 5, today, we announced an updated business plan that strengthens and extends our runway for annual earnings and dividend growth, while supporting the delivery of safe, reliable and affordable energy for our customers. In connection with this update, we announced our 2025 ongoing earnings forecast range of $1.75 to $1.87 per share. The midpoint of this range, $1.81 per share represents 7% growth from our original 2024 forecast midpoint and year-end result of $1.69 per share. Looking beyond 2025, we are extending our 6% to 8% annual earnings and dividend growth through at least 2028, which is based off the 2025 forecast midpoint. Given the strength of our updated plan, we are confident that we can achieve the top half of our targeted growth rate range over this period.
Underpinning these updated targets is a refreshed capital plan that includes $20 billion in expected infrastructure investments from 2025 through 2028. This compares to $14.3 billion in our prior plan period. Our updated plan includes a mix of investments aimed at strengthening the grid against current and future weather impacts, speeding up our ability to restore power when storms strike and advancing a cleaner energy mix without compromising on reliability and affordability. These critical investments are expected to drive average annual rate base growth of between 9.5% and 10% through 2028, up from 6.3% over the prior plan period, which strengthens the predictability of our growth targets. In support of customer affordability and a critical component of our strategy, we remain hyper-focused on improving operational efficiency across the enterprise.
As for every dollar of O&M we can take-out of the business, we can fund an average $8 of capital without impacting the customer bill. I'm very proud of how our teams across PPL have embraced the drive-to innovate and work smarter and more efficiently for our customers. We continue to expect cumulative annual O&M savings of at least $175 million through 2026 based off the 2021 baseline. Given the significant increase in capital needs in our updated plan, we expect to need $2.5 billion of equity through 2028. This supports our strong credit metrics, which we expect to maintain throughout the planned period. Finally, today, we also announced a quarterly common stock dividend of per share. This represents approximately a 6% increase from the current quarterly dividend, which is at the lower-end of our target range given the significant capital investment needs in our updated plan.
Turning to Slide 6. Over the past year, we've made substantial progress in our Utility of the Future strategy, which sets us up well heading into 2025. We've restructured our business and realigned departments and teams across PPL to better execute the strategy, implement best practices across the enterprise, increase operational efficiencies and drive continuous improvement. These changes have already begun to yield significant benefits. We also kicked-off an IT transformation initiative that will bring alignment of our systems across PPL. This included engaging with some of the world's leading technology companies, exploring new opportunities to apply cutting-edge technology to the utility industry to deliver a better experience for our customers and employees.
As we continue to make decisions and plan for the future, we will increasingly use AI and other advanced technologies to inform our decisions, optimize our asset planning and maintenance, better manage supply-and-demand on the grid and empower our customers through digital solutions and better service. I'm convinced our investments in technology will deliver better results at lower-cost for our customers. Over the past year, we've also begun to execute our planned generation replacement strategy in Kentucky that will advance a reliable, affordable and cleaner energy mix. Last fall, for instance, we broke ground on construction of a new 640 megawatt combined-cycle natural gas plant at our Mill Creek facility. And throughout 2024, we continue to advance our plans for development of 240 megawatts of new company-owned solar and 125 megawatts of battery storage.
We continue to drive innovation and invest in research and development, partnering with more than 30 different organizations on over 175 R&D initiatives, including one of the industry's leading carbon capture projects at our Cane Run Combined cycle natural gas plant in Kentucky. In addition, we've developed common design and operation standards across our utilities that will continue to bring advanced technologies, best practices and more robust engineering and construction specifications for future grid designs.
And while wildfire risks are low throughout most of the areas we serve, we take nothing for granted when it comes to public safety and in 2024, we implemented wildfire mitigation plans at all of our utilities. We remain committed to help drive economic development in our service territories, including supporting significant data center build-out as we recognize that data center growth and expansion is key to America's future economic competitiveness and national security.
Finally, we continue to engage with key stakeholders to strengthen resource adequacy in PJM. In Pennsylvania specifically, we continue to advocate for a state-focused no-regret strategy that addresses impending energy shortfalls and provides the state with additional tools to help protect customers from price volatility and reliability concerns. We believe one-way to do this is to allow regulated electric utilities to invest in generation resources up to and including owning and operating generation again. This would complement the competitive market by addressing resource adequacy gaps rather than relying solely on-market forces to deliver a solution.
Turning to Slide 7 and a brief regulatory update. We continue to advance on several key regulatory proceedings across our jurisdictions and expect to file a few more this year. Starting in Kentucky, LG and NKU continue to advance their latest integrated resource plan through the Kentucky Public Service Commission's review process. Since it was filed last October, the process has proceeded as expected with a public hearing scheduled for May 13. Our analysis continues to support the need for additional generation capacity by the end-of-the decade, and we've updated our capital plans to reflect our recommended path forward. Informed by this IRP, we expect to file a CPCN request later this quarter to address near-term generation needs.
Finally, we anticipate filing a base rate case in Kentucky later this summer with our current stayout period ending on July 1. As a reminder, LG&E NKU's last base rate increase was about four years ago in July 2021. Turning to Pennsylvania, PPL Electric Utilities continues to await a PUC decision on our petition to increase the distribution system improvement charge cap to 9% of revenue from the current cap of 5%. In late November, a PUC administrative law judge recommended the denial of our petition. Despite that recommendation, we continue to believe in the merits of our request. We've since filed exceptions to the recommended decision and await a final order from the commission.
Also in Pennsylvania, we continue to evaluate the timing of our next rate case, where we've not had a base rate increase since January 1, 2016. The team has done an outstanding job of making critical investments while becoming more efficient, resulting in solid financial performance over that time period. We are evaluating the timing of a Pennsylvania rate case given increased capital investment needs, continued frequency and intensification of storms and overall inflationary impacts.
Turning to Rhode Island. In late December, Rhode Island Energy filed its annual electric and gas infrastructure safety and reliability plans for fiscal year 2026, which covers investments from April of this year through March of 2026. Our electric ISR filing seeks a total budget of about $260 million for infrastructure investments, including nearly $90 million for advanced metering functionality, which has already been approved by the Rhode Island Public Utility Commission, as well as certain costs for vegetation management and other costs relating to maintaining safety and reliability.
Our gas ISR filing, meanwhile seeks a total budget of about $225 million to sustain and enhance the safety and reliability of our gas distribution system. Hearings on both plans will be conducted in March with a decision expected by April 1. Meanwhile, we continue to expect to file a base rate case in Rhode Island in the 4th-quarter of 2025, following conclusion of our stayout period on October 1. Remember that as part of our transition plans for Rhode Island Energy, we had agreed not to file for a base rate increase until we had been off the transition service agreement with National Grid for a full 12 months. We completed the transition services in September of 2024.
Moving to Slide 8 and an update on data center development in our service territories. We continue to see substantial interconnection requests in Pennsylvania and now have over 56 gigawatts in our queue. While we continue to recognize that there's likely duplication in that figure, we have nearly nine gigawatts in advanced stages of development. We estimate potential transmission capital investment of between $600 million and $700 million for these projects. We've included about $400 million in our updated capital plan, which was prioritized based on the requested interconnection dates. As we've shared previously, we expect that each new data center connection in Pennsylvania will lower transmission costs for customers with savings expected to ramp-up over the next several years as data centers begin to pay more significant transmission costs.
In Kentucky, we were pleased to announce our first hyperscale data center customer in Jefferson County, the latest example of the state's success and our support in attracting economic development. The joint-venture between powerhouse data centers and PO companies will involve development of a 400 megawatt data center campus located in Louisville. The first 130 megawatts are expected to come online in October 2026 with demand growing to the full 400 megawatts by 2028. Meanwhile, active data center requests in Kentucky continue to meaningfully increase and have doubled since our Q3 call with nearly six gigawatts of potential demand in our queue. In summary, we continue to see robust demand in both states and look-forward to continuing to support these important customers.
I'll now turn the call over to Joe for the financial update.
