UTILITY SECTOR Q2 2025 EARNINGS THREAD Data centers are reshaping the entire utility industry. Here's what Q2 earnings revealed: KEY HIGHLIGHTS: • Most utilities met/beat earnings expectations • Data center pipelines expanding rapidly across sector • Capital investment plans increasing significantly • Regulatory environment shows mixed but generally positive signals TOP PERFORMERS: $AEP: Operating earnings $1.43/share (+14% YoY), strongest Q2 in company history • Raised capital plan from $54B to $70B • Projects 24 GW incremental load by 2030 • Upper half of $5.75-$5.95 guidance range $XEL: Earnings $0.75/share vs $0.54 prior year (massive beat) • Reaffirmed 2025 guidance $3.75-$3.85 • $45B capital plan + $15B additional for growth • Strong Texas/New Mexico demand $FE: Core earnings $0.52/share, up from $0.51 • $28B capital investment plan through 2029 • 6-8% annual growth target • Strong data center pipeline momentum DATA CENTER BOOM: $EXC: 17+ GW large load pipeline $PCG: 10 GW data center pipeline (each GW reduces bills 1-2%) $DUK: $10B Amazon Web Services data center in NC $NEE: 8+ GW solar/battery through 2029 REGULATORY WINS: • $OGE: CWIP recovery saves customers $190M • $WEC: Strong I-94 corridor development • $DUK: Legislative backing in top-ranked NC business environment CHALLENGES: $EIX: Core EPS down to $0.97 from $1.23 (wildfire issues) $PNW: Earnings $1.58 vs $1.76 prior year (weather/costs) SECTOR THEMES: Data centers driving unprecedented demand growth Capital plans expanding rapidly (some 20%+ increases) Rate base growth 6-9% annually across sector Electrification trend accelerating beyond expectations INVESTMENT THESIS: Utilities transforming from defensive dividend plays to growth stories. Key factors: • Hyperscaler demand creating multi-decade growth runway • Grid modernization requiring massive capex • Energy transition driving transmission investment RISKS TO WATCH: • Regulatory lag on cost recovery • Weather volatility on quarterly results • Construction cost inflation • Wildfire liability (West Coast utilities) BOTTOM LINE: Q2 2025 = inflection point for utilities. Data center demand fundamentally changing sector growth trajectory. Focus on companies with strong hyperscaler exposure and constructive regulatory environments. Best positioned: $AEP, $XEL, $FE, $DUK Watch list: $EXC, $PCG, $NEE Caution: $EIX (wildfire exposure) The defensive utility sector is dead. Welcome to the electrification growth story.