NextEra Energy (NEE) Q3 2026 Earnings Call: EPS-Wachstum, 36,7-GW-Auftragsbestand und Prognose

Wichtigste Punkte

• Das bereinigte Ergebnis je Aktie von NextEra Energy stieg im dritten Quartal 2026 im Jahresvergleich um 9,7 % und in den ersten neun Monaten 2026 um 9,5 %.
• Das Management bestätigte seine Prognose für das bereinigte Ergebnis je Aktie für 2026 von 3,92 bis 4,02 US-Dollar und strebt das obere Ende der Spanne an, obwohl für das vierte Quartal aufgrund von El-Niño-Bedingungen mit einer Windstromerzeugung von 90 % bis 95 % des langfristigen Durchschnitts gerechnet wird.
• Energy Resources fügte im Quartal Erneuerbare-Energien- und Speicherprojekte mit einer Leistung von 3,7 GW hinzu, darunter 2,4 GW an Batteriespeichern. Der Auftragsbestand erreichte fast 36,7 GW, nachdem mehr als 1,8 GW in Betrieb genommen wurden.
• Das Unternehmen hat Projekte für Großverbraucher mit mehr als 20 GW vorangetrieben, darunter über 18 GW an gaskraftbasierter Erzeugung. Drei gebührenbasierte Bundes-Hub-Projekte belaufen sich auf insgesamt rund 16,5 GW und haben im bisherigen Jahresverlauf Erstmittel in Höhe von 5,7 Milliarden US-Dollar gesichert.
• Das regulierte gebundene Kapital von FPL stieg im Jahresvergleich um etwa 9,2 %. Der Energieversorger rechnet für das Gesamtjahr 2026 mit Investitionen von rund 12 Milliarden US-Dollar.
• NextEra Energy geht weiterhin davon aus, dass der geplante Zusammenschluss mit Dominion Energy in der zweiten Jahreshälfte 2027 abgeschlossen wird, vorbehaltlich der behördlichen Genehmigungen auf Bundes- und Bundesstaatsebene.

Wichtigste Finanzdaten

Geschäftliche und operative Entwicklung

Florida Power & Light

Die Entwicklung von FPL im dritten Quartal wurde von einem Wachstum des regulierten gebundenen Kapitals von rund 9,2 % getragen. Der Stromabsatz an Endkunden stieg im Jahresvergleich um 2,8 % bzw. wetterbereinigt um 1,4 %, was das Kundenwachstum widerspiegelt.

Der Energieversorger löste im Laufe des Quartals etwa 172 Millionen US-Dollar aus seinem Tarifstabilisierungsmechanismus auf, womit verbleibende Mittel von rund 1,5 Milliarden US-Dollar nach Steuern verbleiben.

Das Management gab an, dass die typische Stromrechnung für Haushaltskunden bei FPL weiterhin rund 37 % unter dem US-weiten Durchschnitt liegt und bis zum Ende des Jahrzehnts voraussichtlich um durchschnittlich 2 % pro Jahr steigen wird. Der Betriebs- und Instandhaltungsaufwand ohne Brennstoffe liegt nach Angaben des Unternehmens auf Megawattstunden-Basis mehr als 70 % unter dem Branchendurchschnitt.

Nach Hurrikan Isaias stellte FPL die Stromversorgung für mehr als 97 % der betroffenen Kunden bis Dienstag wieder her, nachdem der Sturm das Versorgungsgebiet am frühen Samstag verlassen hatte. Das Unternehmen gab an, dass unterirdische Quartiersleitungen etwa 14-mal besser abschnitten als Freileitungen, während durch SmartGrid-Technologie rund 140.000 Stromausfälle vermieden wurden.

FPL erhöhte seine Leistungserwartung für Großverbraucher bis 2032 von 6 GW auf 8 GW. Das Management zeigte sich zuversichtlich, dass der Energieversorger bis Jahresende eine Großverbraucher-Transaktion bekannt geben kann. FPL verfügt derzeit über Kundeninteresse von mehr als 20 GW in der Pipeline, wobei die potenzielle Transaktionsgröße nicht bekannt gegeben wurde.

Energy Resources

Der bereinigte Gewinn von Energy Resources stieg im Jahresvergleich um etwa 13 %. Neue Investitionen trugen zusätzlich 0,09 US-Dollar je Aktie bei, getrieben vom Wachstum des Stromerzeugungsportfolios und ersten Gebühren aus Bundes-Hubs. Bestehende Energieanlagen trugen 0,05 US-Dollar je Aktie bei, was teilweise darauf zurückzuführen ist, dass sich die Windstromerzeugung von 90 % im dritten Quartal 2025 auf 101 % des langfristigen Durchschnitts verbesserte.

Die Belieferung von Endkunden verringerte den Beitrag im Jahresvergleich um 0,04 US-Dollar je Aktie aufgrund des zeitlichen Ablaufs der Vertriebsaktivitäten, während andere Effekte das Ergebnis je Aktie um weitere 0,04 US-Dollar schmälerten, was hauptsächlich auf Zinsaufwendungen und den zeitlichen Ablauf von Kapital-Recycling zurückzuführen ist.

Energy Resources erweiterte seinen Auftragsbestand um 3,7 GW, was das vierte Quartal in Folge mit Neuzugängen von mehr als 3,5 GW markiert. Auf Batteriespeicher entfielen 2,4 GW der Quartalssumme. Das Unternehmen erklärte, dass noch 17,6 GW hinzugefügt werden müssen, um den Mittelwert der Entwicklungserwartungen für die Jahre 2026 bis 2029 zu erreichen.

Das regulierte und investierte Kapital plus gesicherte Investitionen in der Strom- und Gastransportinfrastruktur stiegen seit Dezember 2025 um rund 25 % auf etwa 12,7 Milliarden US-Dollar. Das Management strebt weiterhin ein Wachstum der Regulierungsbasis (Rate Base) von etwa 20 % bis 25 % jährlich von 2025 bis 2032 an und sieht im Gastransport eine potenzielle Quelle für zusätzliche Chancen.

Großverbraucher und Bundes-Hubs

NextEra Energy hat Projekte für Großverbraucher mit mehr als 20 GW vorangetrieben, darunter über 18 GW an gaskraftbasierter Erzeugung. Das Unternehmen hat verbindliche Vereinbarungen für drei Bundes-Hub-Projekte in Texas und Pennsylvania über insgesamt rund 16,5 GW unterzeichnet, unterstützt durch Erstmittel von 5,7 Milliarden US-Dollar im bisherigen Jahresverlauf.

Energy Resources geht davon aus, diese Projekte gegen Gebühr zu entwickeln, zu bauen und zu betreiben, ohne eigenes Kapital zu investieren. Das Unternehmen rechnet damit, dass bereits 2028 und 2029 eine bedeutende Stromversorgung über Behind-the-Meter-Erzeugung beginnt, wobei die Standorte ihre Kapazitäten von 2030 bis 2032 auf den vollen Bedarf hochfahren.

Das Management schätzt, dass die Bundes-Hubs etwa 50 % des Beitrags zum bereinigten Ergebnis je Aktie generieren könnten, den Energy Resources erzielt hätte, wenn sich die Anlagen in den ersten 20 Betriebsjahren im Eigenbesitz befunden hätten. Die Entwicklungsgebühren dürften 2026 und 2027 noch relativ moderat ausfallen und dann bis 2032 steigen, sobald die Betriebsgebühren einsetzen.

Das Unternehmen könnte zudem bis zu 11 GW an Batteriespeichern zur Unterstützung dieser Hubs bauen und besitzen, was ein potenzielles Zusatzpotenzial von etwa 15 % bis 30 % gegenüber seinen Entwicklungserwartungen im Speicherbereich darstellt.

Kernkraft und Vertragserneuerungen

Das Kernkraftwerk Duane Arnold befindet sich weiterhin auf Kurs, spätestens im ersten Quartal 2029 wieder in Betrieb zu gehen. NextEra Energy hat ein Darlehen des US-Energieministeriums in Höhe von bis zu 1,9 Milliarden US-Dollar zur Unterstützung der Wiederinbetriebnahme abgeschlossen.

Das Unternehmen prüft Technologien für kleine modulare Reaktoren (SMR) und hat Möglichkeiten zur Co-Location von SMR mit einer Leistung von 6 GW an bestehenden Kernkraftwerksstandorten identifiziert. Das Management betonte, dass jeder Neubau von Kernkraftwerken angemessene kommerzielle Bedingungen und Risikoteilungsmechanismen erfordern würde.

Energy Resources unterzeichnete zudem einen 20-jährigen Stromabnahmevertrag (PPA) über rund 1 GW aus dem Kernkraftwerk Point Beach, vorbehaltlich der Genehmigung durch die Public Service Commission of Wisconsin. Die gesamte Produktion der Anlage ist damit bis in die 2050er Jahre vertraglich gesichert.

Im bisherigen Jahresverlauf erreichten die Vertragserneuerungen im Bereich der erneuerbaren Energien fast 1.400 MW, wobei die durchschnittlichen Preise rund 20 US-Dollar pro MWh über den zuletzt erzielten Preisen für diese Projekte lagen. Die Gesamtzahl der Vertragserneuerungen im gesamten Portfolio belief sich im Laufe des Jahres auf nahezu 2.400 MW.

Zusammenschluss mit Dominion Energy

Die Aktionäre von NextEra Energy und Dominion Energy haben dem geplanten Zusammenschluss am 3. September zugestimmt. Das Management rechnet weiterhin mit einem Abschluss in der zweiten Jahreshälfte 2027, vorbehaltlich der behördlichen Prüfung.

Anhörungen in Virginia und South Carolina sind für November und Dezember geplant; finale Beschlüsse werden für Januar 2027 erwartet. Anhörungen von Sachverständigen in North Carolina sollen im Februar 2027 beginnen.

Das erweiterte Maßnahmenpaket von NextEra Energy für Virginia umfasst Tarifgutschriften für Haushaltskunden in Höhe von fast 2 Milliarden US-Dollar über vier Jahre, weitere 100 Millionen US-Dollar für Hilfen bei Stromrechnungen bis 2038, 100 Millionen US-Dollar für die Fachkräfteentwicklung sowie ein Lieferantenprogramm von bis zu 5 Milliarden US-Dollar über fünf Jahre. Das Unternehmen sagte zudem 600 Arbeitsplätze bei NextEra Energy in Virginia zu und erklärte, dass Absichtserklärungen von Lieferanten mindestens 400 weitere schaffen könnten.

Prognose des Managements

NextEra Energy bestätigte seine Prognose für das bereinigte Ergebnis je Aktie für 2026 von 3,92 bis 4,02 US-Dollar und strebt das obere Ende der Spanne an. Dieser Ausblick beinhaltet die Erwartung des Managements, dass die Windstromerzeugung im vierten Quartal aufgrund von El-Niño-Bedingungen zwischen 90 % und 95 % des langfristigen Durchschnitts liegen wird.

Das Unternehmen strebt weiterhin ein jährliches Wachstum des bereinigten Ergebnisses je Aktie von mindestens 8 % bis 2032 an, ausgehend von einem bereinigten Ergebnis je Aktie von 3,71 US-Dollar im Jahr 2025. Das Management visiert für den Zeitraum von 2032 bis 2035 dieselbe Wachstumsrate an. In Kombination mit Dominion Energy würde die langfristige Wachstumserwartung des Unternehmens nach eigenen Angaben bei mindestens 9 % liegen.

Das durchschnittliche jährliche Wachstum des operativen Cashflows von 2025 bis 2032 soll die Wachstumsrate des bereinigten Ergebnisses je Aktie erreichen oder übertreffen. Das Dividendenwachstum wird bis 2026 weiterhin auf rund 10 % jährlich angestrebt, ausgehend von der Basis des Jahres 2024, gefolgt von rund 6 % jährlich von Ende 2026 bis 2028.

FPL rechnet für das Gesamtjahr 2026 mit Investitionen von rund 12 Milliarden US-Dollar. NextEra Energy bestätigte zudem seinen geschätzten Eigenkapitalbedarf von etwa 12 bis 17 Milliarden US-Dollar bis 2032.

Risiken und wichtige Beobachtungspunkte

• Für das vierte Quartal wird die Windstromerzeugung aufgrund von El Niño bei 90 % bis 95 % des langfristigen Durchschnitts erwartet, obwohl das Management weiterhin das obere Ende der EPS-Prognose für 2026 anstrebt.
• Die Transaktion mit Dominion Energy steht weiterhin unter dem Vorbehalt der Genehmigungen auf Bundes- und Bundesstaatsebene. Das Management räumte ein, dass im Rahmen von Erwiderungs-, Anhörungs- und Vergleichsverfahren Kompromisse möglich sein könnten.
• Großverbraucher- und Rechenzentrumsprojekte sind komplexe, mehr Milliarden US-Dollar schwere Transaktionen, die die Unterstützung der Kommunen, Genehmigungen und weitere Zustimmungen erfordern. Die von FPL bis zum Jahresende angestrebte Transaktion war zum Zeitpunkt der Telefonkonferenz noch nicht unterzeichnet.
• Neue Kernkraftprojekte würden nur bei entsprechender Kundennachfrage, definiertem Kapitalrisiko und Risikoteilungsmechanismen zum Schutz der Aktionäre umgesetzt.
• Höhere Zinsen wirken sich auf Projekt- und Refinanzierungskosten aus. NextEra Energy erklärte, dass sein Absicherungsprogramm die geschätzte Auswirkung einer Zinsänderung um 50 Basispunkte auf das Ergebnis je Aktie für 2028 auf 0,01 bis 0,03 US-Dollar je Aktie begrenzt.
• Das Management bezeichnete eine Reform des Genehmigungsrechts als wichtig für den Ausbau der Strom- und Gastransportinfrastruktur, merkte jedoch an, dass die Gesetzesentwürfe sowohl Vorteile als auch Kompromisse enthalten.

Höhepunkte der Fragerunde mit den Analysten

Das Management gab an, dass die ersten Gebühren aus den Bundes-Hubs in den Jahren 2026 und 2027 noch bescheiden bleiben werden, bevor sie bis 2032 steigen und von 2032 bis 2052 in Betriebsgebühren übergehen.

Zu den Rechenzentren in Florida erklärte FPL, dass die ersten Gigawatt an Großverbrauchernachfrage aufgrund des bestehenden Gas- und Kernkraft-Grundlastparks zunächst hauptsächlich durch Batteriespeicher gedeckt werden könnten. Das Unternehmen lehnte es ab, die erwartete Größe seiner ersten Transaktion bekannt zu geben.

NextEra Energy behielt seine Spanne für den Eigenkapitalbedarf von 12 bis 17 Milliarden US-Dollar bis 2032 bei. Das Unternehmen hob den Zugang zu den Fremdkapitalmärkten in den USA, Europa, Australien und Kanada sowie Tax-Equity und potenzielle Kapitalpartnerschaften mit großen Vermögensverwaltern hervor.

Das Management stellte klar, dass Kapital-Recycling nicht erforderlich ist, um den Basis-Eigenkapitalplan zu erfüllen. Verkäufe von Vermögenswerten blieben opportunistisch und würden dann in Betracht gezogen, wenn Dritte einem Vermögenswert einen höheren Wert beimessen als NextEra Energy für seine Aktionäre.

Zur Preisgestaltung im Bereich der erneuerbaren Energien erklärte das Management, dass die Zinssätze bei Unterzeichnung der PPAs fixiert werden. Das Unternehmen ist überzeugt, dass die starke Stromnachfrage, Steuergutschriften und seine Umsetzungsstärke es ermöglichen, höhere Finanzierungskosten in den Preisen für Kunden weiterzugeben. Zudem erwartet es, dass der Kostendruck in der Branche seine Wettbewerbsposition gegenüber Entwicklern mit geringeren Margen verbessern wird.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good morning, and welcome to the NextEra Energy, Inc. Third Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Michael Dowling, Director of Investor Relations. Please go ahead.

Michael Dowling

Good morning, everyone, and thank you for joining our third quarter 2026 financial results conference call for NextEra Energy. With me this morning are John Ketchum, Chairman, President and Chief Executive Officer of NextEra Energy; Mike Dunne, Executive Vice President and Chief Financial Officer of NextEra Energy; Armando Pimentel, Vice Chairman of NextEra Energy; Scott Bores, President and Chief Executive Officer of Florida Power & Light Company; Brian Bolster, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy. John will start with opening remarks and then Mike will provide an overview of our results. Our executive team will then be available to answer your questions.

We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements. If any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release and the comments made during this conference call in the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission. Each of which can be found on our website, www.nexteraenergy.com. We do not undertake any duty to update any forward-looking statements.

Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure.

With that, I will turn the call over to John.

John Ketchum

Thanks, Michael, and good morning, everyone. NextEra Energy delivered strong third quarter results with adjusted earnings per share increasing 9.7% year-over-year. In addition, through the first 9 months of the year, our adjusted earnings per share has increased 9.5% year-over-year. The continued strong financial and operational performance at both FPL and Energy Resources positions our company well to meet its overall objectives for the year.

Before I turn to the progress we have made executing against our broader strategy, I want to spend a moment on Hurricane Isaias. FPL continues to stand shoulder to shoulder with our communities throughout Northwest Florida devastated by this high-end category 2 storm. While we have restored power to all customers able to safely accept service, it will undoubtedly take months for life to truly recover from the destructive wind, torrential rain and topple trees that ravaged many homes and businesses. In preparation for the storm, FPL assembled a restoration workforce of approximately 17,000 men and women from 29 states, prepositioning crews, equipment and supplies ahead of the storm so that restoration could begin as soon as conditions were safe.

I want to recognize our employees in the thousands of contractors, mutual assistance crews first responders and community partners who worked around the clock for our customers. Their preparation, dedication, commitment and selflessness allowed us to restore power safely and quickly. The hurricane exited our service area early Saturday morning and by Tuesday, we restored power to more than 97% of customers affected.

Early forensic analysis shows investing in a stronger, smarter and more storm-resilient grid benefited our customers. Not a single hardened transmission or distribution pull failed during Isaias. Underground neighborhood power lines performed approximately 14x better than overhead lines. And SmartGrid technology avoided approximately 140,000 outages. To be clear, these investments do not make the grid hurricane proof, but together with our preparation and coordinated response, they have reduced both the number and duration of outages and enable us to get our customers' lives back to normal faster. But it is our people who make the biggest difference. And I again, want to say thank you to our teams and the thousands of mutual systems crews who worked tirelessly to support our communities when they needed us most.

A year ago, we laid out a clear plan for NextEra Energy with more than 12 ways to deliver value for our customers across our regulated and long-term contracted businesses. The backdrop then is the same as it is today. American needs more electrons on the grid. Affordability, reliability, scale and speed to market are more important than ever. But here's what's materially different between then and now. Today, we're not just talking about a plan. We have executed and continue to execute against that plan. And in many areas, we have exceeded our own expectations. In a complex environment where power demand continues to accelerate customers cannot afford to wait. They need a partner who can deliver now and do it affordably.

That is exactly what we continue to do all across America. It's why we believe NextEra Energy remains 1 of the best positioned companies in the sector. No company does more to build generation and energy infrastructure necessary to keep pace with the demand for power across this country. We have the scale, the balance sheet, the supply chain, the technology, the customer relationships and the development and operating expertise to build what our customers need when and where they need it.

We are executing across the full set of growth opportunities we laid out 12 months ago by staying focused on affordability, reliability and delivering every day for our customers. I could not be prouder of the team's execution this year, and I could not be more excited about what we have left to accomplish in 2026 and beyond.

At FPL, we continue to support Florida's strong and growing economy. Florida remains 1 of the fastest-growing states in the nation, supported by continued net in migration, job creation and business investment. Florida's $1.9 trillion annual economy is the 14th largest in the world. Florida's growth continues to drive the need for new energy infrastructure across the state. And we are making smart capital investments to meet those customer needs.

We also continue to demonstrate that serving growth can be done affordably and reliably. FPL's typical residential bill is approximately 37% below the national average and is only projected to increase 2% annually on average through the end of the decade. We drive consistently low bills through exceptional operating efficiency. FPL's nonfuel O&M is more than 70% lower than the industry average on a $1 per megawatt hour basis.

Customers also continue to benefit from top decile reliability that's more than 60% better than the national average. This performance is a direct result of a proven long-term strategy centered on sustained disciplined capital investment, scale, a strong balance sheet and credit rating, a highly efficient operating model and a diverse generation fleet. FPL's customer service is also ranked top decile nationally for residential customer satisfaction while maintaining the lowest billing cost per customer.

We've worked hard to extend this customer value proposition in Northwest Florida over the last 8 years. In addition to reliability investments, we focused on customer affordability. When adjusting for inflation, FPL's typical residential bill in that part of the state is now approximately 25% lower than it was in 2018 before we acquired Gulf Power.

We have also put into place a large load framework that allows us to serve new demand while ensuring existing customers are protected from the incremental costs required to serve that growth. FPL's large load tariff is not only 1 of the most customer protective in America, its protections and provisions have also been largely codified into Florida law.

Needless to say, hyperscalers know exactly how we plan to serve them in Florida. As we discussed throughout the year, the interest is high. It's why we raised our large load expectations from 6 gigawatts to 8 gigawatts by 2032, and we remain confident in our ability to announce a large load transaction by the end of the year.

At Energy Resources, we have turned an extraordinary opportunity set into real execution across the board in both our regulated and long-term contracted businesses. Our regulated and invested capital, along with our secured capital expenditures across electric and gas transmission have increased roughly 25% to approximately $12.7 billion since December 2025.

In the first quarter, Lone Star Transmission received ERCOT approval to build portions of 2 new transmission lines in North Central Texas to improve reliability in the region. And in the second quarter, MISO selected NextEra Energy Transmission to build 2 large-scale 765 kV transmission projects and Illinois to help deliver safe, reliable and cost-competitive energy for decades. In addition, our gas transmission business formed a joint venture during the quarter with [ Chesapeake Utilities Corporation ] to build a $1.2 billion 97-mile intrastate gas pipeline in South Florida. We continue to add renewables and storage to our backlog at a pace that underscores the strength of our customer demand and the value of our speed to power development platform.

For the quarter, Energy Resources added 3.7 gigawatts of renewables and storage projects to its backlog. This includes another strong quarter of battery storage origination at 2.4 gigawatts. Importantly, we have multiple growth avenues for battery storage. We built stand-alone battery storage, co-locate storage at existing sites develop storage as a grid solution and expand batteries from 4 hours to 8 hours at existing projects and a market driven by a significant need for quick capacity solutions Energy Resources remains well positioned to serve customers with battery storage.

Here's what's important. With these new additions to our backlog and projects that reach commercial operation, we've now achieved greater than 2/3 of the midpoint of our 2026 through 2029 development expectations, and we added approximately 15 gigawatts of backlog in the last 12 months. We also continue to make significant progress across our large load opportunity set. Today, we've advanced more than 20 gigawatts of large load projects over 18 gigawatts of which are gas-fired generation. We expect these opportunities to drive value in 2 different ways.

The first is our federal hubs where Energy Resources expects to develop, build and operate projects for fees without investing capital. The second includes projects that we expect to develop, own and operate ourselves. Starting with the federal hubs, we have signed definitive agreements to develop construct and operate 3 projects across Texas and Pennsylvania totaling approximately 16.5 gigawatts that have secured $5.7 billion in initial funding year-to-date. Energy Resources earns fees based on a predetermined schedule for development and construction of the projects and for the first 20 years of operations.

Across all 3 federal hubs we are advancing construction and PPA solicitation in parallel to maximize speed to market while working to secure require permits and other approvals. We expect to serve significant load as early as 2028 and 2029 using behind-the-meter generation and then ramp to the full requirements of these campuses from 2030 through 2032. Importantly, each of these projects are perfect examples of matching new electric load with new power generation, ensuring data centers pay for their own generation and infrastructure not existing utility customers.

While we do not put any capital into the projects, we expect Federal hubs to generate approximately 50% of the expected adjusted earnings per share that Energy Resources would receive if we own the projects ourselves over the first 20 years of operation. The 3 federal hubs on an equivalent adjusted EPS basis are approximately equal to the top end of our natural gas development expectations of 4 to 8 gigawatts by 2032. We also have the opportunity to build and own battery storage to support data center load at these federal hub opportunities, which could be an incremental to 11 gigawatts or an approximate 15% to 30% potential upside to our storage development expectations.

We also continue to advance a significant pipeline of large load projects that we expect to own and operate ourselves. In July, we were part of a coalition of energy, infrastructure and utility companies that announced a strategic partnership to develop a data center campus at the U.S. Department of Energy's Paducah site in Western Kentucky. NextEra Energy expects to build and own dedicated generation resources to power the campus, including up to 2 gigawatts of natural gas and up to 2.6 gigawatts of battery storage systems. We also have a development pipeline of 30 potential hubs we are discussing with the market and we continue to expect that number to rise to 40 by year-end.

Duane Arnold, our nuclear plant in Iowa remains on track to be recommissioned and reenter service no later than Q1 2029. During the quarter, we closed a loan with the Department of Energy for up to $1.9 billion to support the restart. This milestone moves us closer to restarting Iowa's only nuclear plant and adding reliable around-the-clock energy to the regional grid. We continue to evaluate advanced nuclear closely assessing the commercial and technical capabilities of various SMR OEMs. We have 6 gigawatts of SMR colocation opportunities at our nuclear sites, and we are working to develop new greenfield sites. Of course, any new nuclear build would have to include the right commercial terms conditions with appropriate risk-sharing mechanisms that limit our ultimate exposure.

We also continue to successfully recontract across our existing portfolio. During the quarter, we executed a 20-year power purchase agreement for approximately 1 gigawatt of our Point Beach nuclear asset in Wisconsin at a competitive price, which remains subject to approval by the Public Service Commission of Wisconsin. The full output of the plant is now contracted into the 2050s. Since the last earnings call, we also recontracted over 250 megawatts of existing renewable projects. This brings our year-to-date recontracting total to nearly 1,400 megawatts of renewables and which have been priced on average at a roughly $20 per megawatt hour premium above recent realized pricing for these projects. In total, we've recontracted nearly 2,400 megawatts to date this year.

Bottom line, we believe it's important to do what we say. Last year, we laid out our plan across 12 key growth areas. And 1 year later, we're delivering. Our growth plan is not dependent on any single technology, customer market or policy outcome. We have multiple ways to deliver affordable and reliable power for our customers. As proud as we are of what we've accomplished, we are not satisfied. That has always been part of the culture at NextEra Energy, never settling and constantly looking for ways to get better every day for our customers. And when it comes to the opportunity set in front of us, the runway for growth is significant.

We also continue to advance our pending combination with Dominion Energy. As I've said before, this is a merger of addition, not subtraction. We are bringing together 2 industry leaders with a shared commitment to safety, reliability, affordability and customer service and execution at a time when the power industry is tasked with meeting rapidly growing electricity demand. American needs new generation and transmission, and customers expect us to meet that growth while continuing to keep their bills affordable. That is what makes this combination so compelling. Dominion Energy brings deep local knowledge and experienced workforce critical generation assets, a significant transmission and distribution system and long-standing relationships with its customers and communities. NextEra Energy brings additional scale, balance sheet strength, a strong credit rating, supply chain reach and 1 of the largest energy infrastructure development and construction platforms in the country.

In addition, the combination adds global leadership and renewables and battery storage, driving the ability to accelerate clean energy and battery storage. Bringing all of these capabilities together would give the combined company an even stronger platform to buy, build, finance and operate the infrastructure our customers need more efficiently over time. Importantly, this combination is about preserving Dominion Energy strengths while putting NextEra Energy's scale and capability behind them. Dominion Energy would remain locally led and separately regulated while gaining access to NextEra Energy's experience across the full energy value chain, including renewables, battery storage, nuclear, natural gas generation, transmission and grid infrastructure.

We believe that the combination of local expertise and national scale will uniquely position the combined company to help meet unprecedented energy demand while maintaining an intense focus on reliability, affordability and customer service that both companies share. And we are backing that strategic rationale with tangible commitments to Dominion Energy's customers, employees and communities.

In September, we announced an enhanced benefits package that demonstrates our commitment to Virginia. We provided additional commitments that further demonstrate our dedication to protecting and delivering value for customers. We organized the package around affordability, jobs and building more clean energy and battery storage faster to decrease reliance on expensive imports. We have doubled the residential build credits from 2 to 4 years, provided an additional $100 million of shareholder funded support for Dominion Energy's customer bill assistance program through 2038, and provided $100 million to directly support workforce development, created up to a $5 billion Virginia supplier program through spending commitments over 5 years that support cost competitive contractors, suppliers and service providers doing business in Virginia, committed to creating new energy NextEra Energy jobs in Virginia who will work out of a new shareholder-funded co-headed quarters tower in downtown Richmond and committed to maintaining Virginia employee head count for the next 5 years.

And we intend to bring others with us to Virginia. Through our extensive supplier relationships, we have already secured letters of intent for at least 400 new jobs if the combination is approved, bringing the total to 1,000 new Virginia jobs as we work to create an ecosystem of economic growth centered on energy. We believe these additional commitments deliver on those priorities and further demonstrate the tangible benefits this combination can deliver for customers and communities.

We also will continue to engage in constructive dialogue with stakeholders in South Carolina and North Carolina, and we expect to share specifics as those conversations move forward. I am confident this combination will deliver benefits that matter most to each state. We have reached several important milestones since our last call. On September 3, shareholders of both NextEra Energy and Dominion Energy approved the pending combination, satisfying an important closing condition. The state regulatory reviews are also moving forward. In Virginia and South Carolina, procedural schedules have been set with hearings in November and December, and we expect final orders in January 2027. In North Carolina, the commission has established a procedural schedule with expert witness hearings beginning in February 2027. The federal review processes are also underway and continuing. We continue to expect the combination will close in the second half of 2027.

With that, I'll turn the call over to Mike.

Michael Dunne

Thank you, John, and good morning, everyone. For the third quarter of 2026, FPL's earnings per share increased by $0.06 year-over-year. The principal driver of this performance was FPL's regulatory capital employed growth of approximately 9.2% year-over-year. FPL's capital expenditures were approximately $2.4 billion for the quarter, and we expect FPL's full year capital investments to be approximately $12 billion. For the 12 months ending September 2026, FPL's reported return on equity for regulatory purposes will be approximately 11.8%. During the third quarter, we reversed approximately $172 million of the rate stabilization mechanism, leaving FPL with an after-tax balance of roughly $1.5 billion. FPL's third quarter retail sales increased 2.8% from the prior year comparable period due to customer growth and weather. On a weather-normalized basis, from the prior year comparable period, retail sales increased by 1.4% due to an increase in customer growth.

Now let's turn to Energy Resources, which reported adjusted earnings growth of approximately 13% year-over-year. At Energy Resources, adjusted earnings per share increased by $0.06 year-over-year. To align with our 12 ways to grow, we have made select changes to certain categories that I will walk through. Contributions from new investments which now include federal hubs, increased $0.09 per share, primarily driven by continued growth in our power generation portfolio and initial contributions from federal hubs. Existing energy assets now include contributions from natural gas and peaking generation, which were in other prior to this quarter.

Federal hubs will move from new investments to existing energy assets after 12 months of fees earned. Contributions from our existing energy portfolio increased $0.05 year-over-year. Primarily reflecting more normalized wind resource compared with the prior year period. Wind resource for the third quarter of 2026 was approximately 101% of the long-term average, versus only 90% in the third quarter of 2025. The comparative contribution from our customer supply business decreased by $0.04 per share, primarily driven by timing of origination activity last year.

Regulated operations is a new category and will include contributions from NextEra Energy Transmission and regulated gas transmission assets. All other impacts decreased by $0.04 per share, primarily driven by interest expense and timing of capital recycling in the prior year comparable quarter. Energy Resources had a strong quarter of new renewables and storage origination, adding 3.7 gigawatts to the backlog. With these additions, our backlog now totals nearly 36.7 gigawatts after taking into account more than 1.8 gigawatts of new projects placed into service since our last earnings call. This highlights the continued strong demand for renewables and storage and marks the fourth consecutive quarter that Energy Resources has added over 3.5 gigawatts to its backlog. We only have 17.6 gigawatts left to add to our 2026 through 2029 backlog, before we hit the midpoint of our development expectations over that period.

Turning now to our third quarter 2026 consolidated results. Adjusted earnings per share from Corporate and Other decreased by $0.01 per share year-over-year. We remain well positioned to navigate the current interest rate environment through our more than $48 billion forward-starting interest rate hedging program, which has an average rate of approximately 4% and an average tenor of approximately 9 years. This program allows us to lock in project economics at PPA execution and avoid window risk.

Additionally, this program helps support our refinancings as large portions of our near-term maturities are hedged. Our debt has a weighted average maturity of approximately 15 years with a well-staggered maturity profile. As a result of our financial discipline, a 50 basis point move in rates only has a $0.01 to $0.03 per share impact in 2028, which is less than 1% of expected 2028 adjusted earnings per share. Our 2026 adjusted earnings per share expectations range of $3.92 to $4.02 remains unchanged, and we are targeting the high end of that range. We expect to grow adjusted earnings per share at a compound annual growth rate of 8% plus through 2032 and are targeting the same from 2032 through 2035. And all off the 2025 base of $3.71 of adjusted earnings per share.

From 2025 to 2032, we expect that our average annual growth in operating cash will be at or above our adjusted earnings per share compound annual growth rate range. And we also continue to expect to grow our dividends per share at roughly 10% per year through 2026 off a 2024 base and 6% per year from year-end 2026 through 2028. As always, our expectations assume our caveats.

That concludes our prepared remarks. And with that, we will open the line for questions.

Operator

[Operator Instructions] The first question comes from Steve Fleishman with Wolfe Research.

Fragen und Antworten

Steven Fleishman

So just, I guess, first question on the -- it looks like you're tracking already through 3 quarters to the high end of the range. And it looks like you're also starting to already get fee income from the federal hub process that probably if it was done through normal contracting would have come when the plants start running down the road. So just -- how should we think about the potential for kind of rebasing in the near term of the outlook just given that new addition and how you're tracking so far?

Unknown Executive

Thanks, Steve. As you noted, we expect to have adjusted earnings per share of $3.92 to $4.02 this year and are targeting the high end of that range. The high end of that range also includes the El Nino impacts that we expect to occur on our wind facilities in Q4 of this year. And as we look at what those wind impacts could be, we expect that generation to be anywhere between 90% to 95% of the long-term average. So we expect to be at the high end of our range despite those impacts.

As we look at our long-term forecast, I would point you to the S-4, where we have provided to our Board -- to Dominion's Board and I publicly to what our expectations are for our growth of our business. And so while we have maintained our existing earnings per share growth of 8% plus on a long-term basis, in a combination with Dominion, we expect that to be 9% plus.

Steven Fleishman

Okay. Great. And then just separately, yesterday or 2 days ago, we got the proposed views of the Governor's office in Virginia and the Virginia staff and the governor's office proposal seems to have a lot of pretty onerous editions, staff, maybe not as much, but potentially on ring-fenced. So maybe John, you could give some perspective on those proposals and how do you find a path, particularly with the governor's office to some kind of resolution there?

John Ketchum

Yes, Steve, thanks for the question. First of all, I mean, here's how I look at it. We have the intervener testimony in, right? We're going through all of that. And -- as I look at it, I really look forward to prosecuting this case as we move forward or bottle and then hearings in mid-November/as we have reached out across the stakeholder group, we've talked quite a bit about the -- I think this case breaks down to really 3 things. One is affordability. The second is jobs and the third is as clean energy. And I think we have really put forward a very, very strong case in each of those areas. Of course, there'll be some nuances that we'll have to deal with as we go along.

But I look at affordability, moving the residential rate credits from 2 to 4 years. I mean we have almost $2 billion in rate credits in front of the Virginia SEC in our current proposal. And that is by far the most of any transaction of this nature. We increased that commitment to the energy share program by $100 million to help those in need. We have a long-term scale benefits, which I think speak for themselves. When you look at the need to add new generation and transmission to Virginia to decrease reliance on expensive imports.

And then I'd just point to the track record of FPL, which I went through -- 37% lower than national average, a bill that's 20% lower today than it was 20 years ago, while investing in generation, we invest in transmission to keep up with growth from 1 of the fastest-growing states in the country on jobs, I think we just have an incredible story.

First of all, this Dominion will stay locally led, locally run. We're not making any changes there. We're actually bringing the 1,000 jobs up to Virginia into Richmond, 600 of our own, 400 from the letters of intent from suppliers that I talked about, the new office tower, really trying to create an ecosystem around Virginia with the $5 billion supplier program, the $100 million workforce development program. I don't know if folks saw Virginia Chamber put a study out here recently, not only talking about the direct economic benefits of what we put forward with the indirect.

And this is just billions of dollars of potential investment opportunity for Virginia and just thousands of direct and indirect jobs and they'll crystallize that report here in the middle of November. So affordability jobs. And the last 1 is clean energy. And when I look at clean energy, we're the world leader, right, in renewables. We're the world's leader and storage. If we can't get it done, I don't know who else can in terms of meeting the requirements of the Clean Economy Act in Virginia.

The combined company will become the second largest in the United States in nuclear. And I think when you look at the pieces and you put them together, there's just no company better positioned to deliver on Virginia's goals and the governor's recently released energy plan in this combined company. I think that is just undeniable. So we look forward to prosecuting that case as we move forward. And again, it's going to be really, really important that we're also able to bring speed to power to the table, right, which is what we do every single day. Look at the results of this quarter. And I'll be super disappointed if we can't accelerate the storage built in Virginia, for example, to help alleviate some of the high import charges they're facing both on the energy and the capacity side.

Because it's very important when you have a supply demand imbalance like we see in Virginia that we get new generation transmission up and running as quickly as we can, but do it in an affordable way for customers, which I think our package does and really look forward to bringing this case forward in front of the commission in mid-November and really looking forward to responding to the intervenor testimony that we saw come in Monday, which we're still digesting and in a very stronger bottle that we'll file here in a couple of weeks.

Operator

The next question comes from [ Paul Zimbardo ] with Jefferies.

Unknown Analyst

The first one I was going to ask if you could -- obviously, there's this permitting reform bill out there, if you could kind of discuss your thoughts on it and specifically what it could mean for NextEra, whether it's the wind platform competitive transmission. Just if you have any thoughts on that?

John Ketchum

Yes, absolutely. I'll take that. This is John. I mean, look, first of all, we've been trying to get permit reform legislation moving forward for the industry for quite some time now. And I think it's great to see both sides of the aisle come together and really trying to make a conscientious effort to move a package forward that makes sense like -- and there are puts and takes in the build. There's some good things. There's always going to be some things that may perhaps you don't like as much, but that's the spirit of compromise.

And I think when I look at the overall features of the bill, it does a lot of great things. And we need more linear infrastructure in this country which requires permanent reform, whether that is new transmission to enable more generation across the United States or its new gas transmission across the U.S. We are in a period where power demand is expected to increase sixfold across this country, and it's imperative that we do right by our customers, which means getting power to where it needs to go and having linear infrastructure available to meet those needs as we look to the future. So I think there are a lot of promising things in the bill applaud the efforts of Congress to really try to move this forward and looking forward to potential outcomes as we approach the end of the year.

Unknown Analyst

Okay. Great. And then one other last one for me, quick. Just could you frame the benefit of the federal hubs in the third quarter? And just any way you'd recommend we think about it for calendar 2026 or 2027 in the interim early years?

Michael Dunne

In the interim early years, it's going to be a relatively modest payment that is based on the development activities that we are pursuing. As you look at that as I grow, you can imagine a relatively modest payment in '26 and '27. And then that will grow over time through 2032 when we receive the operating fees and you look at those operating fees from 2032 to 2052, you'd expect those to be roughly half the earnings per share as if we owned the facilities.

Operator

The next question comes from [ Konstantin Lednev ] with Wells Fargo.

Unknown Analyst

Maybe just shifting to Florida in terms of the data center targets, the targets are up, but the deals aren't signed yet, how much visibility do you have into the advanced development stages? What does that ramp timing look like? And the availability of turbines to serve that ramp?

Scott Bores

Konstantin, it's Scott. I'll take that. I think as John said on the call this morning, we remain confident. We have a large pipeline of over 20 gigawatts of interest, as we've indicated in prior quarters. That remains. These are complicated deals, multibillion-dollar deals that take some time. And given the outside environment, we're working with the local communities to build the consensus and support so we can move forward before we announce these deals. I think as we said previously, as you look at our system to serve the first couple of gigawatts of large load, we really just need to build battery storage given that we've got a strong baseload gas fleet in the nuclear fleet behind that. So we're well positioned and again, remain confident with announcing the deal before the end of the year.

Unknown Analyst

Okay. Perfect. And then maybe a broader question in terms of equity needs and capital markets tightening, do you see any incremental funding means versus the equity plan announced earlier? And any thoughts around alternative instruments, alternative funding sources, especially as projects start increasing in size over time?

Scott Bores

Thanks. So to take that in terms of our expected equity issuances, as we look through 2032, we remain consistent in the range that we have provided of roughly $12 billion to $17 billion of total equity needs is through 2032. And as we do look at the various funding plans that we have, you have seen us diversify our corporate funding across the globe. This year, we've been in markets such as Europe, in Australia, in Canada and the U.S. So we are providing access to multiple markets to raise our financing. And then as you look at our project level financing, we remain the tax equity providers partner of choice. Many times, they are selecting us because of the stability and the confidence they have in our projects.

In addition to that, you will see that with the rise of many of our partners in the financial spectrum. Those partners such as the larger asset managers are also looking to deploy capital with us. And so we are working with those partners to -- in a new path of raising funds. So when you look across the broad transom, we have multiple different ways to raise our financing and feel very confident about where we sit.

Unknown Analyst

Okay. So no major changes to the plan. Maybe just a quick follow-up to Steve's question on the Virginia merger process. Is there a path to find any concessions through the rebuttal process or any partial settlement options anything of this sort?

John Ketchum

Yes. Konstantin, this is John. I'll speak to that. Again, first of all, I think we've put a very, very strong case forward. As I said before, I'm not going to go back through the details again. But absolutely, I mean in the rebuttal process and through the hearings themselves, I mean, there's always opportunities for compromise on certain specific issues. But again, I stand behind the strength of the filing that we have put forward.

Operator

The next question comes from Nick Campanella with Barclays.

Nicholas Campanella

Thanks for all the information today. I just wanted to ask on follow-up on the funding and financing. Just given the 4 to 6 gigawatts of gas development was going to be substantial CapEx and now that's kind of capital-light and you're getting the associated earnings for your plan. Can you do less asset sales? And can there be downward pressure kind of overall there from the balance sheet room that, that creates? And is keeping that net income and EBITDA now upside to the plan? And is that included in the S-1 earnings power. Can you kind of talk through the asset sales? I think you had recycling of 7% to 12% in the last plan. And -- just wondering if there's downward pressure there.

Unknown Executive

Yes. I think when we look at our assets that we invest into, we intend to hold those assets through their life because we believe these are very attractive investments for us. Now when we put together the asset recycling, we had based that on history where parties come to us and say that they value that more than the value that we see for our shareholders. And when that happens, we will execute capital recycling. But our base plan for how we run our business is to not rely on capital recycling to meet equity needs because we believe these projects our best suited for our investors. We believe these are very attractive projects. And so as we move over time, I would expect us to look to see that $7 billion to $12 billion of capital recycling and for us to look to hold on to more of that. And last is an opportunistic opportunity where a party comes in and dies it far more than we value it.

Nicholas Campanella

Okay. I appreciate that. And then, I mean, just 1 follow-up on getting a data center deal done in Florida this year. Is there anything that you can kind of offer on the sizing of this getting a couple of hundred megawatts done? Or could it be something more sizable near gigawatt?

Unknown Executive

Nick, we're not going to comment on that. Obviously, we'll announce that at the time a deal is announced.

Operator

The next question comes from Carly Davenport with Goldman Sachs.

Carly Davenport

Just one for me, more on the industry side. I guess on the solar front, seemed like the backlog got revised a little bit lower in certain years, and it seems like costs across the industry have been rising due to interest rates, Section 232 and some equipment constraints. I guess could you just talk a little bit about any sort of cost pressures you might be seeing on the solar side and confidence in your ability to pass those costs through and higher PPA prices.

Unknown Executive

Yes, sure. Carly, let me go ahead and take it, and then Brian could fill in with anything that I might have missed. But first of all, we continue to see in our discussions as we look to the future with customers, strong demand. And when I think about solar and where solar prices out against alternative technology is a very compelling product offering. And -- when I think about how we are positioned around our supply chain, I think we've got a real competitive advantage there. And so I like the outlook for our ability to continue to develop and offer solar as a competitive offering to customers. And then also, when you think about combining that with storage, with 4, potentially going to 8 hours on expansion opportunity over time. It just further adds to the appeal. So we have not changed really our views and continue to feel very good about the market moving forward.

Brian Bolster

The only thing I'd add is that in the -- as we're out with customers right now, we've seen a focus on capacity. And so that's why we've seen a big pickup in storage. We are starting to see our customers look for more energy products. And so I do think you're going to see a shift in the coming quarters back towards more energy than capacity as you think about those products. And it's very consistent with what's going on in the market. There's a need to fill in capacity. And when people get that sort of out, they're going to look at their energy needs and that's what we're seeing amongst our customers. So it's -- these things ebb and flow, but we feel like the mix is going to be consistent with our expectations over time.

Operator

The next question comes from Nick Amicucci with Evercore ISI.

Nicholas Amicucci

Just wanted to ask too, just as we kind of think about the Virginia process, and obviously, we don't want the truth to get into good political headlines. But just kind of thinking through that, and obviously, the statute says it's done harm. So could we just kind of walk through like the baseline of that when you're talking about a duo harm clause and kind of just how to think about any type of go forward on that?

John Ketchum

Yes, Nick, this is John. I'll go ahead and take that. I mean the standard is adequate service adjusting reasonable rates, right? Like you said, it's a do no harm statute. And the proposal that we have put forward around affordability with the 4 years of credits almost $2 billion, $100 million energy share program step-up through 2038, the long-term scale benefits that we bring the track record of running 1 of the best run utilities in the United States, I'd say the best run in Florida Power & Light. I like our chances under that standard, reflecting the affordability benefits there. That's not for me to decide. That's for the SEC to decide.

On the job side, look, I mean, I think we are making a real commitment to Virginia. It's going to stay locally run, locally led, but we're also moving more roles from NextEra also to Virginia. So I think from a job standpoint and a capability of running generation transmission and all the planning that goes into running an affordable and reliable system for customers. I think I feel very good about where we stand there. And on the clean energy point of being able to build more generation transmission affordably and reliably in Virginia to make sure that we are able to comply with that do no harm standard, I feel good about what we're putting forward there as well.

But again, all that is not for media side. It's for the SEC to decide. They will apply the law, and I have no doubt that they will look at all the facts and circumstances, the filing and do their job at the end of the day. And that's all you can ask for.

Nicholas Amicucci

Great. And then as we kind of think about just the Point Beach operation and when that's approved, how can we come to think about the earnings uplift? And what kind of start dates should we be to be kind of pointing to?

John Ketchum

On Point Beach, you said? Point Beach has a current contract with Wisconsin Energy. And as those contracts roll off in 2021 to 2023, the new contract will be put in place. And I think as we mentioned in December is that we believe the overall contribution will be roughly $0.21 and on average from Point Beach under this new contract.

Unknown Executive

Nick, just to be clear, you used the word uprate. I mean this is recontracting of the existing facility. This is not an upgrade. It's just taking the existing capacity and extending out the contract for 20 years when the contract rolls off.

Operator

The next question comes from Jeremy Tonet with JPMorgan.

Jeremy Tonet

Just want to kind of come back to the nuclear side, if I will. I think you talked a bit about the SMRs earlier. And I was just wondering within NextEra's strategy, if you see room for large scale in any scenario? Or is it just SMR, if you could just walk us through the gives and takes there, that would be helpful.

Brian Bolster

Jeremy, it's Brian. I mean, I'm going to start with something that we repeat often, which is we build for customers, right? And so that's -- we're going to take that input first and foremost. And then John has said this several times, -- as we look at the opportunity set, we're also going to look to make sure that we've got those 4 wallets in place. So as we look at any nuclear opportunity that involves new build we're going to want to be able to look at our investors and say, we know where we're going to be able to draw the line from a capital perspective.

And so I'd say those are going to be our first 2 guiding lights as we look at opportunities, which is what does the customer need? And two, what is the structure that's going to protect our shareholders. I do think we have a bias and John talk towards SMRs because I do think there's a benefit to the scale of capital you're putting to work, especially as we start out in this industry, again, rebuilding. But again, if the protections are right and the customer has a very strong preference for something of large scale, then we're obviously going to look at that. But we have a preference. But at the end of the day, we're building these for the customers, and we need to have the right protections in place.

Operator

The next question comes from David Arcaro with Morgan Stanley.

David Arcaro

I wanted to ask on the electric and gas transmission side of things. You're already tracking at 25% growth rate ahead of the original plan. I was wondering what's the potential for further extension and upside in that side of the business?

Unknown Executive

As we look at our transmission broadly and we looked at roughly 20% to 25% CAGR and rate base growth from 2025 through 2032. We believe that what we are doing today positions us well to hit that overall metric. And so obviously, as we look at where could we see additional opportunities. I think as we look there, it's really on the gas transmission side. One of the key things that we had seen in December of 2025, was a very robust process on electric transmission. But as we look now at the opportunity set, particularly with bring your own generation and the needs that we are seeing across the gas value chain that we think that, that can be an opportunity for us to expand beyond our expectations. But I would caution that our overall growth expectations for this segment are already quite high. In the 20% plus range.

Brian Bolster

Yes. I mean, David, I appreciate the comment, and we're very excited about the growth that we've achieved. But I would remind everyone just so we can put these things in perspective because compound growth rates get skewing we're growing effectively a small utility into like a $50 billion utility if we hit our numbers from the standpoint if you just think a rate base type multiple against these. So we're -- we've had good success. We're very happy with the targets that we put out there. But just to give people a sense of the order of magnitude that we're talking about from the size of what we'll have when we're done. I mean that would be on the order of a $50 billion type of utility just sitting within energy resources. So we're staying quite busy.

David Arcaro

Yes, absolutely. No, that makes a lot of sense. And then just other question I had, in the broader backdrop of rising rates, on the renewable side of the business, the question that we usually come to, are you able to pass through higher cost of capital in new PPA rates with new renewable contracts? And are you able to potentially see higher equity returns going forward to reflect that as well?

Michael Dunne

So as we look at today's environment, number one, when we sign our PPAs, we lock in the interest rates to lock in the economics. And then the second question is, as we look how exposed are we to interest rate movements for origination activities. And there are 2 key things that we see driving today that allow us to pass that through. Number 1 is that people need power. And so when you need power, people are looking for the lowest cost power and the people who can execute and deliver that. And in both cases, that's us. And so when we look at their comparative alternatives, they're going to be higher and they are going to be less reliable from an execution perspective for what we're providing.

And then the second piece is obviously that as you look at tax credits, particularly for wind and solar, those help reduce the cost of wind and solar relative to other choices. So those 2 things create us in a place where we are competing against the other projects, and we're able to pass through the interest rates of those to our customers.

Unknown Executive

Mike, the only thing I'd add is we were never the low-cost bidder in the market. And so actually, this is helping us because I think others are feeling a lot more pressure because their margins were skinnier and so they're having to get -- so I actually think it's going to help us on a market share perspective as well as a return perspective because it's flushing out some of the low-cost bidders that were in the market. So we're quite comfortable with our competitive position in this rate environment or anything consistent with what we've been seeing recently.

Operator

Thank you. This concludes our question-and-answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may all now disconnect.