콘스텔레이션 에너지(CEG) 2026년 3분기 실적 발표 콘퍼런스콜: 원전 계약 확대로 가이던스 상향

핵심 요약

• 콘스텔레이션 에너지는 2026년 3분기 GAAP 기준 주당순이익(EPS) 5.19달러, 조정 영업 EPS 5.06달러를 기록했다고 발표했다. 조정 영업 EPS는 2025년 3분기 대비 2.02달러 증가했다.
• 경영진은 연간 조정 영업 EPS 가이던스를 12.50~12.80달러로 상향 및 압축 조정했다. 새로 제시된 하단은 종전 가이던스 범위의 상단과 일치한다.
• 칼파인 인수 효과와 견조한 상업적 실적, PJM 용량 가격 상승이 분기 실적을 뒷받침했다. 반면 원자력 발전 생산세액공제(PTC) 수익 감소는 실적 개선폭을 일부 상쇄했다.
• 원자력 발전소 가동률은 6~8월 동안 계획 외 정지 일수 없이 99.2%를 기록했다. 3분기 가동률은 20일간의 계획된 연료 재장전 정지 일수를 포함해 97.2%를 나타냈다.
• 콘스텔레이션은 올해 들어 2040년대까지 이어지는 8,500MW 이상의 계약을 체결했다. 이에 따라 현재 9,000만 MWh 이상이 우량 고객과의 장기 계약을 통해 뒷받침되고 있다.
• 회사는 총 약 43억 달러의 예상 프로젝트 비용을 투입해 주로 2029~2032년 사이에 원전 출력 증강(uprate)을 통해 약 1,200MW를 확보할 것으로 예상하고 있다.

주요 재무 데이터

사업 및 운영 실적

칼파인은 3분기 실적이 전년 동기 대비 개선된 주요 동인이었다. 경영진은 또한 지속적인 상업적 성과와 PJM 용량 가격 상승을 언급했다. 다만 전년 동기에는 더 많은 원전이 생산세액공제(PTC) 적용 범위에 포함되어 있었기 때문에, 이번 분기 PTC 수익이 감소하면서 이러한 이익 증가분을 일부 상쇄했다.

장기 계약 체결은 콘스텔레이션의 핵심 전략으로 유지되고 있다. 회사는 지난 분기 이후 총 약 4,560MW 규모의 계약 3건을 체결했다. 약 3,500MW는 기존 원자력 발전 설비를 뒷받침하며, 약 1,100MW는 출력 증강을 통한 신규 발전량을 지원한다. 올해 발표된 계약에는 구글 및 아마존과의 거래가 포함되어 있다.

콘스텔레이션은 또한 PJM NI 허브 지역에서 익명의 투자등급 데이터 경제 부문 고객과 20년 계약을 체결했다. '콘스텔레이션 피크스(Constellation Peaks)' 계약은 기존 원전에서 나오는 270MW의 발전기 연계형 에너지, 용량 및 청정에너지 특성을 신규 발전 공급 및 수요 반응과 결합한 것이다.

경영진은 프리미엄 장기 계약 체결이 가능한 기존 청정에너지 발전량이 1억 MWh 이상 남아있다고 밝혔다. 회사는 궁극적으로 전체 발전 설비를 장기 계약 체제로 전환하는 것을 목표로 하고 있으나, 구체적인 일정표는 제시하지 않았다.

원전 출력 증강 프로그램을 통해 약 1,200MW가 추가될 것으로 예상되며, 대부분의 프로젝트는 2029~2032년으로 예정되어 있다. 총 예상 비용은 약 43억 달러로, 여기에는 2028년부터 2032년까지의 추가 성장 자본 30억 달러와 지난 3월 성장 자본 전망치에 이미 포함된 13억 달러가 포함된다.

콘스텔레이션은 2026년 초 바이런 1호기 업그레이드를 완료한 데 이어, 10월 말 바이런 2호기의 저압 터빈 업그레이드를 마쳤다. 경영진은 이번 정지 작업이 협력업체의 종전 세계 기록보다 일주일 이상 빠르게, 그리고 예산 범위 내에서 완료되었다고 밝혔다. 초기 발전량 또한 예상치를 크게 웃도는 수준으로 설명되었으나, 회사 측이 증가 수치를 구체적으로 밝히지는 않았다.

경영진에 따르면 크레인 원전 재가동은 당초 일정보다 1년 앞당겨진 2027년 하반기를 목표로 예산 범위 내에서 순조롭게 추진되고 있다. 핵연료 집합체와 변압기가 현장에 입고되었으며, 미 원자력규제위원회(NRC)는 긍정적인 최종 환경영향평가를 발표했다.

회사는 또한 609MW 규모의 로드아일랜드주 에너지 센터 인수에 합의했다. 경영진은 이번 거래가 즉각적인 주당순이익 증대 효과와 신용도 중립적 영향을 미칠 것이며, 두 자릿수 무차입 수익률 기준을 상회하는 수익을 낼 것으로 기대하고 있다.

경영진 가이던스

콘스텔레이션은 2026 회계연도 조정 영업 EPS 가이던스를 12.50~12.80달러로 상향 및 압축했다. 경영진은 이러한 상향 조정이 견조한 상업적 실적과 발전 성과에 일부 기인했다고 설명하는 한편, 보수 관련 비용 증가가 운영 및 유지보수(O&M) 부문에 다소 부담 요인으로 작용하고 있다고 덧붙였다.

회사는 연말 실적 발표 컨퍼런스 콜에서 2030년까지의 새로운 성장 전망과 함께 2027년 및 2028년 가이던스를 업데이트할 계획이다. 수정된 모델링 공시에는 최근 체결된 대규모 장기 청정에너지 계약이 반영될 예정이다.

경영진은 신규 계약들이 대체로 2028년 이후 본격화되기 시작할 것이라고 밝혔다. 또한 청정에너지 특성을 포함한 기존 포트폴리오 계약에 대해 원자력 발전 PTC 하한선 대비 MWh당 20~50달러의 프리미엄 민감도를 계속 적용하고 있다.

콘스텔레이션은 미 에너지부(DOE)로부터 최대 50억 달러 규모의 조건부 대출 약정을 확보했다. 이 대출 프로그램은 적격 프로젝트 비용의 최대 80%를 지원할 수 있으며, 2035년까지 확인된 적격 투자 중 최대 60억 달러를 뒷받침할 수 있다. 만기는 30년이며 금리는 미국 국채 금리에 37.5bp를 가산한 수준이다. 전액 활용될 경우 연간 약 4,000만 달러의 세전 이자 절감 효과가 발생할 것으로 경영진은 추산하고 있다.

리스크 및 주요 관전 포인트

대규모 부하 연계, 용량 의무, 동일 부지 입지(co-location)를 규율하는 PJM 및 연방에너지규제위원회(FERC) 규정은 여전히 수립 중이다. 경영진은 2027년 상반기 중 FERC가 동일 부지 입지 신청에 대해 조치를 취할 것으로 예상하면서도, 규제 불확실성이 여전히 부담 요인으로 남아있음을 인정했다.

회사는 또한 데이터 센터 프로젝트의 건수와 착공 시점에 대한 불확실성을 강조했다. 경영진은 유틸리티 기업들과 전력망 운영업체들이 과거 데이터 센터 수요를 과대평가했으며, 이에 따라 타당한 정책적 우려와 잠재적인 새로운 안전장치 도입 가능성이 제기되고 있다고 설명했다.

콘스텔레이션 피크스는 고객 맞춤형 솔루션에 따라 서로 다른 수준의 자본이 필요할 수 있다. 수요 반응은 자본이 거의 또는 전혀 들지 않을 수 있는 반면, 배터리 저장 장치나 피크 발전 설비는 투자가 필요하다.

경영진은 2026년 실적을 뒷받침한 견조한 상업 마진과 발전 성과를 미래 연도로 자동 연계해 추정해서는 안 된다고 경고했다. 더 많은 발전량이 장기 계약으로 전환됨에 따라, 향상된 상업 수익이 전체 수익 구성에서 차지하는 기여도는 작아질 수 있다.

애널리스트 Q&A 주요 내용

• 콘스텔레이션 피크스 수익성: 경영진은 이 상품이 기존 원자력 발전량과 수요 반응, 저장 장치 또는 피크 발전 자원을 결합할 수 있으며, MWh당 110~130달러로 추정되는 신규 복합화력 가스 발전소의 비용 대비 경쟁력을 유지할 수 있다고 밝혔다. 회사는 각 구성 요소가 독립적으로 허들 레이트(최소요구수익률)를 충족하도록 요구하기보다 계약 전체에 걸쳐 수익성을 평가한다.
• 자본 수익률 기준: 콘스텔레이션은 투자 결정을 위해 10%의 무차입 수익률 기준을 계속 적용하고 있다. 경영진은 4분기 실적 발표 컨퍼런스 콜 또는 그 이전에 자본 배분 및 자사주 매입 계획을 업데이트할 것이라고 밝혔다.
• 이용 가능한 전력망 용량: 경영진은 데이터 센터 건설 속도에 따라 미활용 상태인 기존 발전 설비가 잠재적으로 2035년경까지 향후 6~7년간의 부하 증가를 뒷받침할 수 있을 것으로 추산했다. 수요 반응은 이러한 기회를 더욱 연장할 수 있다.
• 동일 부지 입지(Co-location): 회사는 송전 수요를 줄이기 위해 발전 자산 인근에 대규모 부하를 배치하는 방안을 계속 지지하고 있다. 경영진은 지역 전력망 운영업체들이 FERC의 지침에 부응해 요금 규정(tariffs)에 동일 부지 입지 옵션을 포함할 것으로 기대하고 있다.
• 추가 출력 증강: 엔지니어링 및 설계 작업이 계속되고 있으나, 경영진은 다음 단계의 규모를 수치화하지는 않았다. 현재 계통 연계 사이클의 일부 프로젝트가 중도 탈락할 수 있어, 콘스텔레이션 발전 용량에 더 이른 기회가 생길 가능성도 있다.
• 계약 가능 발전량: 경영진은 언급된 1억 1,300만 MWh의 거의 대부분이 궁극적으로 판매될 수 있다고 밝혔다. 기존 일반용 및 산업용(C&I) 계약 의무 기간은 대체로 약 3년이며, 이 기간이 지나면 장기 계약용으로 전환 가능한 발전량이 더 늘어나게 된다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Third Quarter Earnings Conference Call. [Operator Instructions]. As a reminder, this call may be recorded. I'd now like to introduce your host for today's call, Tim Flottemesch, Vice President, Investor Relations. You may begin.

Tim Flottemesch

Thank you. Good morning, everyone, and thank you for joining Constellation Energy Corporation's Third Quarter Earnings Conference Call. Leading the call today are Joe Dominguez, Constellation's Chairman, President and Chief Executive Officer; and Shane Smith, Constellation's Chief Financial Officer. They are joined by other members of Constellation's senior management team, who will be available to answer your questions following our prepared remarks.

We issued our earnings release this morning along with the presentation, all of which can be found in the Investor Relations section of Constellation's website. The earnings release and other matters we discuss during today's call contain forward-looking statements and estimates regarding Constellation and its subsidiaries that are subject to various risks and uncertainties. Actual results could differ from our forward-looking statements based on risk factors and assumptions discussed in today's material and comments made during this call.

Please refer to today's 8-K and Constellation's other SEC filings for discussions of risk factors and other circumstances and considerations that may cause results to differ from management's projections, forecasts and expectations. Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between the non-GAAP measures and the nearest equivalent GAAP measures.

I'll now turn the call over to Joe.

Joseph Dominguez

Thanks, Tim. Good morning, everyone. Thanks for joining us. I know it's a busy morning, and we appreciate your continued interest in Constellation. Before getting into the quarter, we want to extend our congratulations to all of the newly elected officials and to those who are returning for another term. We thank them for their public service. As a company, we've enjoyed strong working relationships with Democrats and Republicans and like, and we look forward to continuing to work with policymakers at every level of government on practical solutions that support economic growth protect reliability and keep energy affordable for families and businesses.

Constellation's policy work on the nuclear PTC is a perfect example of great energy policy that was supported by both President Trump and Biden and overwhelmingly by members of Congress on both sides of the aisle. The PTC has helped to save plants that would have otherwise closed led to multi-decade extensions of operating lives, triggered investments in thousands of new megawatts through nuclear uprates and even helped to propel three plant restarts. This policy support for nuclear energy has created and preserve tens of thousands of jobs and save customers many billions of dollars. It's a bipartisan success story and we are confident that bipartisan solutions to the issues presented by data centers also will be implemented.

In that regard, I do think we have seen a bit of an overreaction in the market to the election results based upon fear that Democrats won't let data centers get built. Obviously, there already has been a great deal of data center development in jurisdictions like Illinois and Virginia, where Democrats had control before this election. The bottom line is that Democrats care deeply about economic growth, and they care very deeply about the many labor jobs that go with data center construction. Indeed, with labor such a key constituent for Democrats, it's hard to imagine that we are going to halt work. With that said, the reality is that utilities and grid operators did not do a good job estimating the real number of data centers. And that resulted in a massive overestimation that caused legitimate fears by all policy makers but reasonable safeguards in places like PJM and Texas already were being implemented before this election and the agreements we've announced this year and the exciting new deal we'll talk about today shows that we could help our clients navigate any new guardrails.

Now turning to the quarter. I want to start where I usually do with our people. They delivered another very strong quarter operationally, commercially and financially, this summer, when PJM was setting peak load records and customers needed every megawatt they could get. Our nuclear fleet delivered an astonishing capacity factor of over 99% across the summer months. That's what great looks like, and it's what our operations team delivers quarter after quarter and year after year. But I also want to recognize our commercial team this morning. The agreements we are discussing today are complicated transactions. They take perseverance, creativity and a deep understanding of what our customers actually need. I'm truly grateful for their hard work, and it's nice to see it pay off.

As you can see, Constellation's execution across all fronts of the business show up big in the numbers. We earned $5.19 per share on a GAAP basis and $5.06 per share in adjusted operating earnings in the third quarter. We are raising and narrowing full year adjusted operating earnings guidance to $12.50 to $12.80 per share. The low end of our newly revised range is equal to the top of our prior guidance, which we had significantly revised upward in the second quarter. This will mark the fifth consecutive year, every year since we've been a public company that we've exceeded the midpoint of our original guidance and often, we've exceeded the top end. Shane will cover the details later, but that consistent performance matters.

Customers making 15- and 20-year commitments on a partner that operates plants well, manages commodities and risk well and flat out does what it says it will do. And that's exactly the company we've built. Importantly, for you, our owners, we are vastly increasing the duration and visibility of our earnings. Last quarter, we announced 920 megawatts of long-term nuclear agreements. Since then, we have signed three additional long-term agreements totaling about 4,560 megawatts and nearly 3,500 megawatts support our existing fleet and roughly 1,100 megawatts support new nuclear capacity through our uprate program. Year-to-date, we have contracted more than 8,500 megawatts well into the 2040s at compelling economics. Two of those agreements are landmark transactions with Google and Amazon. They do two things that matter for the country.

They help us support our existing plants for the long term and they help add new clean firm megawatts in PJM at a time when the grid needs these megawatts. Keeping today's plants running longer and timely adding output from those plants is one of the fastest and most economic ways to improve reliability and affordability. In the past few weeks, we also signed a 20-year agreement with a customer that we're not identifying today to allow them to announce a deal at a time and place of their choosing. But what I can tell you is that it is yet another PJM NI Hub deal with an investment-grade customer in the data economy market. The contract is part of our exciting and new Constellation Peaks product offering, and it combines 270 megawatts of unit contingent energy capacity and clean energy attributes from our existing nuclear fleet with new generation supply and demand response designed to satisfy expected regulatory requirements.

I know that there's been some chatter that once we sold the uprates, our ability to contract the existing fleet would somehow be exhausting. It is not. First, as a factual matter, we have not finished exploring upgrades at plants. Design and engineering work continues. And second, while uprates are valuable and certainly in very high demand, they were never the only pathway for contracting. Through Constellation's Peaks program, our commercial team compare existing energy solutions with new capacity resources, whether those resources are developed by us or by somebody else. That gives customers another path to get new demand online efficiently and gives us another path to capture premium value that supports the existing fleet. This initial contract that we are announcing today is one of a number of opportunities we are actively working with our clients on. And I'll walk through the economics later in the deck that will explain why we think this offering is so compelling to all of our clients, large and small.

Operationally, we continue to turn investments into megawatts. We completed the Byron unit to low-pressure turbine upgrade in late October after completing Unit 1 earlier this year. The fall outage finished more than a week faster than the vendor's prior world record time and came in under budget. How about that, under budget and ahead of schedule. New words for the nuclear industry. the words that we expect to repeat consistently. Early production results also well exceed our expectations. It's too soon to put a number on that. But to the point I made a moment ago about uprates not being exhausted, we are looking to add new upgrades and the upgrade projects we are completing already are producing materially more megawatts than expected. Our commercial team can now begin to package those new megawatts in our offerings.

Crane is likewise a compelling and great story for us. The restart continues to advance very well. The first fuel assemblies and transformers are on site. The NRC issued a favorable final environmental assessment, and we remain on track to restart the plant in the second half of 2027, a full year ahead of schedule and under budget. We also received a conditional DOE loan commitment of up to $5 billion for identified fleet upgrades and other potential nuclear investments, including Crane, we now have secured $6 billion of DOE support tied to projects that could help bring more than 2,000 megawatts of additional nuclear capacity to the grid. These are the kinds of projects American needs proven technology, existing sites, existing operational expertise and new megawatts that can arrive much faster than greenfield build.

Finally, we continue to exert capital discipline. We have repurchased about $3 billion of our stock in roughly the 7 months since our March business update, including $800 million in the third quarter alone. And we agreed to acquire the 609-megawatt Rhode Island State Energy Center, RISEC. We expect that transaction to be immediately accretive and credit neutral, which returns our above our double-digit unlevered return threshold, while adding reliable generation that supports our customer-facing retail business. With the success we've enjoyed in the visible free cash flow now on the horizon, Constellation strongly believes in the compelling value of buybacks to Constellation and to its owners, and you should expect us to update our buyback plan on or before the fourth quarter call as is our usual practice.

Now turning to Slide 6. Let me spend a few minutes on what these agreements we've been talking about mean for the durability of our business. A central objective we laid out in March was to increase earnings visibility and duration by extending the portfolio through long-term contracts, and we've done exactly that. We've moved from strategy to execution and now have more than 90 million-megawatt hour supported by long-term agreements with high-quality customers extending into the 2040s. You can see on the left, that contracted clean base load volume builds over time, reaching 91 million-megawatt hours in 2032 and roughly $94 million in into the 2040s. By 2032, about 45% of our clean baseload fleet is supported by long-term agreements beyond the nuclear PTC price war.

Let me pause on that for a moment to let it sink in. This is an industry, as all of us know, that's been characterized by volatility, where we're constantly focused on the forwards Fords that aren't all that liquid. And so hedge percentage is 2 or 3 years out, become real important. But what we've created here in the span of a year is a whole different animal where nearly half of our clean output is hedged not for a couple of years, but for a couple of decades, and we expect to do more. This is a platform heretofore unseen where so much EPS growth and cash flow is divorced from the day-to-day movement in forward through long-term contracts and the PTC price floor. And incredibly, we have a lot more opportunity ahead. The agreements we have struck have been hugely transformational. And just as is important is who is on the other side of the agreements.

While some debt market concerns have rattled the AI and power thematic recently, including our own Constellation equity, the fact is that our business reality is an opposite to this concern. As you can see, the counterparty supporting our nuclear agreements have strong investment-grade credit profiles and deep access to capital markets. Now moving to Slide 7. I want to be clear that even with our success so far this year, we're not close to being done. We still have a huge opportunity ahead of us with more than 100 million-megawatt hours of existing clean generation available for premium long-term agreements. Data economy customers are an important part of that opportunity, but this demand is significantly broader than AI.

Customers throughout the industrial and commercial space continue to want clean, firm, reliable energy and long-term price visibility, which we have shared with you a number of times states and utilities are another pathway for contract execution. Of course, we see that in New York through the ZEC program. And when you compare existing nuclear with building new generation, the economics and the risk profile are incredibly compelling. On this slide, we use a $3,000 per KW cost for a new CCGT and show an illustration indicating that the levelized cost to justify that investment is roughly $110 to $130 per megawatt hour. Some estimates and regions of the country are even higher than that. Our assets are available today for utilities in PJM that want price certainty for their customers at an enormous discount to this new build price. But that's not the sole advantage.

First, this energy comes without risk of construction cost overruns or construction delays. Second, for utilities, the assets already are interconnected, meaning customers don't have to bear the cost of new transmission at a time when affordability is the key word in everybody's mind. Third, there's no fuel price volatility to manage. The prices are fixed for years without fear of rising natural gas fuel costs carbon taxes and other risks that would exist with a CCGT strategy. Fourth, there's no increased air pollution. These assets produce 0 emissions and they create emissions-free energy credits and qualify as clean energy in most all jurisdictions. Fifth, no proposed regulatory requirement imposes a bring your own generation or be curtailed kind of obligation on utilities, meaning they could buy existing generation under the current regulatory scheme at a great discount to new build and with all the advantages that I talked about.

As in New York, these megawatts are available by Constellation to sell to any utility and any customer in PJM. And we're urging policymakers to take advantage of that opportunity, follow the lead of New York. For our industrial and data economy customers, we also continue to have colocation and powered land opportunities that make use of our existing sites, generation and grid infrastructure. with FERC action on colocation expected in the first half of next year, we remain of the belief that co-locating large loads with large plants is the most cost-effective solution to bring on large load and keep social and customer costs low.

And finally, Constellation Peaks gives us a new way to pair the existing fleet with incremental capacity. So the customer gets the complete solution. We could add batteries and generation supply at our plants, given the vast amount of land that we own around the plants. The point is simple. While we've had a monster year in contracting, we still see a great deal of opportunity in the market and a great deal of interest from existing and new customers. Now turning to Slide 8. Although the regulatory framework continues to take shape, enough regulatory progress has been made already to understand clearly the objective needs of our customers and communities. Our customers want to connect large loads quickly enough to support economic growth and jobs. And everyone wants to preserve reliability and protect everyday customers and businesses from costs that they do not cause.

Our recent deal activity should put the rest concerns that people have to wait for absolute PJM regulatory certainty to move forward. Indeed, while we all want the regulatory process to conclude, the delay in the PJM backstop auction actually has provided us a valuable opportunity to use this additional time to complete bilateral agreements with customers and bring new capacity solutions to bear. At the end of the day, we know what the issue is here. America has a peak capacity problem, not an energy problem. We can use demand response and storage to help manage a relatively small number of hours of peak demand. And if we do it right, some grid experts believe that we could possibly reduce system costs to everyday customers while unleashing the stranded capacity in our system for job producing growth. Constellation's Peaks product is designed to capture this opportunity. Providing customers with solutions that combine new capacity for the small number of peak hours that they need to manage during the year with energy products that are tailored to beat the customers' energy and sustainability needs and that will ensure that the grid is better utilized.

By targeting new capacity for the limited number of hours when the grid is constrained, Constellation Peaks can deliver a complete energy solution that provides a competitive alternative to a new combined cycle gas plant at the estimated cost of $110 to $130 per megawatt hour that I showed to you a moment ago. And remember, what we talked about when we talked about construction delay risks, project cost overruns, interconnection delays, long-term fuel price uncertainty, more emissions and carbon risks well Constellation Peaks minimizes or completely eliminates these risks. So with that said, I have to say that it's been a bit of a head scratcher for us when people say that customers are not interested in existing nuclear energy. As the deals we've announced demonstrate that's just not accurate.

Now to be clear, I'm not denying that some customers will build new large power plants or even pursue some off-grid solutions. What I'm saying is simple, and it's this. Constellation's unparalleled ability to pair simpler and less risky capacity solutions with our large volume of clean energy is a compelling solution for all of our customers. and where you are going to get a share of this market. This dog hunts, and we expect to have continued success going forward. With that, I'll turn it over to Shane.

Shane Smith

Thanks, Joe, and good morning, everyone. As Joe mentioned at the start of the call, we are excited to share another raise to our adjusted operating earnings guidance, but first, I'll start with our third quarter results. Beginning on the left-hand side of Slide 9, in the third quarter, we earned $5.19 in GAAP earnings per share and $5.06 in adjusted operating earnings per share, which is $2.02 higher than the third quarter of last year. Accretion from Calpine is the key driver of higher year-over-year Q3 results. As expected, the summer months are some of the strongest for the Calpine portfolio, and this year was no exception. We also benefited from continued strong commercial performance and higher capacity prices in PJM. These benefits were partially offset by lower PTC revenue compared to last year when more of our plants were in the PTC zone.

Turning to the right-hand side of the slide, we are raising the midpoint and narrowing our full year adjusted operating earnings guidance range to $12.50 per share to $12.80 per share. With this latest increase, the low end of our revised range is now at the top end of the guidance we provided at Q2 and $0.50 higher than the top end of our original guidance provided in March. Our commercial team continues to outperform expectations, managing volatility across the combined portfolio. This overperformance does result in a modest O&M headwind as we recognize additional compensation-related expense. We have reflected these upgrades -- these updates in the modeling appendix on Slide 24.

Looking ahead and consistent with prior years, we will update our 2027 and 2028 guidance on our year-end call including a refreshed growth outlook through 2030. We will also update our modeling disclosures to reflect a significant volume of long-term agreements that underpin our disclosures of contracted clean megawatts. Moving to Slide 10. During the critical summer months of June, July and August, our nuclear fleet ran at a 99.2% capacity factor with no unplanned outage days as PJM set peak load records this summer. When the grid needed constellation most, we delivered. For the third quarter, our nuclear fleet delivered a 97.2% capacity factor while completing 20 planned refueling outage days, marking the second highest quarterly capacity factor in Constellation's history. That kind of reliability reflects the preparation and skill our women and men bring to the job every day to fulfill our commitment to provide clean, firm and reliable power. That consistency is something our customers and communities appreciate most.

Turning to Slide 11. I want to provide some additional context on the quantum of investment and timing associated with our nuclear upgrade projects. We have consistently said that these new megawatts were in high demand because they represent one of the fastest and most cost-effective ways to bring new firm carbon-free power to the grid. The depth of that demand gave us the confidence to begin planning and securing critical equipment early, so we would be ready to execute when prospects converted to firm customer commitments. That time has arrived. In total, these projects will deliver nearly 1,200 megawatts of additional nuclear power, most of which is scheduled for completion between 2029 and 2032.

This capacity will come online a decade or more ahead of some early estimates for bringing an equivalent amount of nuclear generation to the grid through new construction. We also expect to deliver these mega lots at a fraction of the cost of new build cost Total project costs are expected to be approximately $4.3 billion, $3 billion of which is incremental growth capital from 2028 through 2032. And $1.3 billion was already included in growth capital we shared in our March outlook. As Joe covered in his remarks, estimates for new combined cycle gas plants continue to rise. In fact, the capital cost of our nuclear uprates is not materially outside the range of current CCGT estimates. And unlike new gas generation, the uprates come with little to no incremental fuel or operating and maintenance costs. These are great projects for our customers, our owners and frankly, for America.

The conditional loan commitment from the U.S. Department of Energy's Office of Energy dominance financing provides additional support for bringing these valuable megawatt hours to the grid. The $5 billion would cover up to 80% of eligible project costs, supporting as much as $6 billion of potential qualified investment that can be identified from 2023 through 2035. The financing has a 30-year tenure at a rate of U.S. treasuries plus 37.5 basis points. Compared with our current 30-year bond spreads, that could generate approximately $40 million of annual pretax interest savings if fully utilized. Importantly, the commitment also provides significant flexibility. We can draw on the financing at our discretion through 2035 and or as new potential projects are identified, allowing us to optimize our financing plan over time.

Turning to Slide 12. Constellation's balance sheet is differentiated within our sector and remains a meaningful competitive advantage both for the customers we serve and for our owners. Our financial strength and ample liquidity are particularly important when customers are evaluating agreements that make sense for 15 or 20 years. Just as we carefully evaluate a customer's ability to honor its long-term commitments, our customers expect the same financial strength and certainty from us. They want confidence that we will be there to operate our assets, serve our contracts and deliver reliable energy throughout the life of the agreement. The increasing contribution from contracted cash flows further strengthens that foundation. These agreements provide greater visibility into the long-term economics of our assets and help ensure that they can continue operating and creating value for our customers, communities and owners for decades to come.

The value of this progress, coupled with our balance sheet strength is evidenced by our 30-year new issuance spreads which have compressed roughly 140 basis points since we became a public company. Our capital structure also gives us the financial flexibility to pursue multiple capital allocation priorities simultaneously. We demonstrated that flexibility by maintaining our credit rating through the Calpine acquisition. In 2026, we have a $5 billion board-authorized share repurchase program and continued growth via M&A via the agreement to purchase the Rhode Island State Energy Center, all while maintaining a clear and disciplined deleveraging plan. The combination of financial strength increased contracted cash flows and capital allocation flexibility is a competitive advantage. It gives customers confidence in our ability to fulfill our long-term commitments and gives us the capacity to continue investing in growth while creating value for our owners.

Turning to Slide 13. We have continued to translate the growth levers highlighted at our March business update into tangible value for our owners. As a reminder, the base EPS growth rate and free cash flow outlook we provided at the time did not include any assumption for additional premium deals or the impact of executing on the aforementioned $5 billion share repurchase authorization that we expect to complete by year-end 2027. Since March, we have signed approximately 5,500 megawatts of long-term agreements that support our existing nuclear fleet while bringing new clean firm capacity to the grid.

For those looking to calibrate your models before the call, I would draw you back to our March disclosures that included our 2027 outlook, which is still a good starting point and remind you that the tremendous deals we have struck this year ramp starting in 2028 and beyond. In addition to our contracting success, we have also continued to find accretive ways to deploy capital. Given our actions to date, we have already locked in an incremental $0.25 of base earnings since our March business update, while continuing to expand the opportunity ahead of us. That includes opportunistic M&A as well as our aggressive pace of share repurchases. In the roughly 7 months since our March business update, we have repurchased approximately 11 million shares. We will provide a capital allocation update by our year-end call.

Obviously, we are not resting on our laurels. We continue to see meaningful opportunities to capture additional value, including long-term contracting, further expansion of our commercial margins, higher inflation that boost our base EPS with PTC certainty and increased capacity factors across the natural gas fleet as growing demand drives greater utilization of our existing assets. With that, I'll turn the call back to Joe.

Joseph Dominguez

Yes. Thanks, Shane. Thanks for covering all that. Look, I'm going to kind of close by just hitting a few of the key points that we want you to kind of take away from this call on the material. So it's been a phenomenal year from a performance standpoint. We've come to expect that from the Constellation team, but we should never stop praising the team here. They just have done a great job it positions us really well. But what this year has meant, I think in many respects, it's been the most important year for Constellation because I think this contracting that we've done has as I said earlier, created a really new platform.

It's been a metamorphosis for Constellation from a company that when it started was highly focused on forwards and what was going on moment to moment in energy prices is something that is incredibly long duration with predictable growth and a predictable free cash flow profile for decades, all underpinned by a production tax credit and support from the federal government. I just don't see anywhere else, not only in this industry but anywhere else where you have a company that has those sorts of characteristics. The second point we wanted to make is that we're not done. We're -- we think we have a very, very viable and attractive product offering in Constellation Peaks, our co-location opportunities. And we think utilities as well as data economy customers, will and should take advantage of that opportunity.

And then the third point, I think we're telegraphing very clearly to you here is we don't think the market with all the churn and all the noise in the market around different things. has adequately valued the business. And we intend to address that in our capital allocation plans on or before the fourth quarter. So those are really the four points. The slide kind of covers the major themes of the business. But this has been a remarkable year, and I think a transformational year to create something never seen before. So we're very proud of that. And Shane and I will now answer your questions along with the rest of the management team.

Operator

[Operator Instructions]. Our first question comes from Michael Sullivan with Wolfe

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Unknown Analyst

Wanted to ask a little more on the peaks that you announced today and just how we should be thinking about the economics of that opportunity? And then how much of that is going to be a template for going forward, maybe ex the upgrade opportunities.

Joseph Dominguez

Well, I think I talked a little bit about the economics in terms of the comparison to other options for customers, right? So if you think about a completely new generation build, whether that be renewables with sufficient storage to make it 24/7 reliable or even combined cycle machines. There are -- in our view, there's a way that we could bring these peak product capabilities and price the existing nuclear clean megawatts well within the $110 to $130 range that we outlined on the slide and still deliver great value to us relative to the PTC price floor, which we obviously use as the sensitivity in our slide here. So that's the idea of it.

And I think, likewise, it's -- it's a great opportunity as New York has demonstrated for everyday customers to have this kind of price certainty going forward. And then on top of that, Michael, it's -- I think these are points we haven't really talked about a whole lot, but interconnection is a challenge these days. It takes time to get large power plants built and interconnected Who knows what's going to happen with CO2 and emissions regulation. And obviously, the political tilt in this last election brings that back into play, I think, in the long term. So from the viability of the product and its attractiveness, what we're seeing and the first deal we've done and we talked about today indicates that it's very viable and very attractive to our customers.

In terms of how much of it will sell and what the uptake is on that, I probably -- I did that last year, and I'm not going to do that again. I think we have some productive conversations, and we'll continue to announce deals as they come. The one thing I said to all of you, though, in March, and I think it bears reminding is at the time, you'll remember, we had a call that wasn't so great is the one we're having today because there was new regulatory uncertainty and deals we thought were going to get concluded -- didn't get concluded. And I said to you, this is a team that knows how to get across the finish line. And I assure you we would work very hard to do that.

And I think in the intervening months, you've seen Constellation's capability to do just exactly that. And so while I'm not going to give you projections, I think you know by now that we have a team that gets out there and gets it done in terms of meeting customers where they are and fulfilling their needs while meeting new regulatory requirements that are intended to protect everyday customers from cost, they don't cost. So that's been our track record, and I'll stand on that.

Shane Smith

Michael, it's Shane. Just to kind of add to Joe's point, I think we highlighted the economics and why it's beneficial to the customers. For our existing portfolio, it's safe to assume that the sensitivities we gave you and we've highlighted on Page 13 of the $20 to $50 a megawatt hour, those still exist, right? So this is essentially our next lever to ensure that we're able to contract within that sensitivity range we've already provided. And so this product will show up similar to other clean contracted megawatts when we update the disclosures in the year-end call.

Unknown Analyst

Okay. Perfect. That's actually exactly what I was getting at, but I appreciate all the color all around. And then on the ad opportunities, maybe if you could just share more color on, I think, think these came in a lot less expensive than we and probably others were thinking. I think even relative to -- I think you had a limit number out there a little over a year ago. So maybe just some more color on how you were able to come in so low on the cost and then what that was able to do for your returns?

Joseph Dominguez

Yes. Look, I don't think we're coming in lower than we expected, but some of what was cited in some earlier reports we've seen in the analyst community is really combined spend for a license extension as well as for the upgrade. So what we're doing today is kind of taking that apart for all of you so that you see what's related to the upgrade program. And so obviously, that has a beneficial impact on the returns we expect.

Operator

Our next question comes from David Arcaro with Morgan Stanley.

David Arcaro

Just -- I was wondering if you could elaborate maybe just a little bit more on the Peak plus product. Is this something that you would expect to customize for individual end customer contracts? Or is there a predefined maybe combination of the different solutions you mentioned? And is there an upfront cost or a CapEx level that you would have to invest, for example, if there's battery storage included in there?

Joseph Dominguez

Well, let me ask you -- answer your first question. Plus is going to be broadly defined as bringing capacity solutions plus existing clean and reliable generation. How -- as I mentioned in my prepared remarks, how we do that could be that we're out there partnering with a storage provider if that's going to be the solution set or working with our existing customers to curtail to provide demand response in exchange for value on a long-term basis. That's where our large retail platform really works for us because we have relationships with such a broad category of industrial and commercial customers that could curtail so we could offer that as new demand response. And then there'll be things that will be potentially peaking solutions at the sites that will also come into play. So it's broad, and it could go from 0 capital all the way to the capital one would need to deploy for storage solutions.

David Arcaro

Understood. Yes, that's helpful to get a better sense there. And I was wondering if you could also maybe give us an update on how you're thinking about the bilateral contracting opportunity in PJM. I guess we've seen the time line shift here in a couple of the rules and regulations are still kind of in flux. But where do you stand there? And has the IBP process shifted that opportunity at all for you?

Joseph Dominguez

I just -- as I said, I think kind of the delay in the process has kind of opened up the window. We had this exciting product, but we were facing a deadline of the backstop auction where people had to absorb all the information. So I actually I shouldn't say this, but I actually like a little bit of the regulatory delay because it's allowed us to have better conversations with customers and share with them what we're able to do in this space. And so that's been good. I think the other thing, David, that we -- again, we've been talking about this for a couple of calls, so I don't want to be repetitive, but we've been saying now for a while that we think that kind of the direction of travel on the regulatory outcomes here is pretty predictable.

And it's not like we got gagged out of the FERC and got no information -- we've got some pretty good information from them even though at the end of the day, they told PJM to back to the details on some of it. But that gave, I think, our customers enough certainty to do what they've done, which are these very large transactions. And by the way, that's not just happening for these big mega clients, but for others that are developing data centers. I think at this point, they understand where this is going, where the bring your own capacity issues are going to land. And we're trying to craft solutions that help them address that and allow them to move forward because it was getting to a point for them that they just -- they needed to move forward and they have certainty on the energy supply piece, even though there wasn't perfect certainty on the regulations.

So look, I think regulatory uncertainty is always a bit of an overhang, but I think it's been a little bit overbaked in the market's reaction. I think, quite frankly, we probably surprised a lot of people with the amount of contracting we've been able to do in spite of the fact that we don't have final rules yet.

Operator

Our next question comes from Shar Pourreza with Wells Fargo.

Constantine Lednev

It's actually Constantine here for Shar. And congrats on the great quarter. Maybe just following up on some of the commercial dynamics. As we look at the upgrade costs, you highlighted increasing scarcity of nuclear electrons, the $20 to $50 premium to PTC levels still applicable on incremental deals. Do you see that range getting wider, I guess, depending on the attributes that would be embedded in the deal?

Joseph Dominguez

I think that's -- for us, that's the right sensitivity at this point in time. Remember, we're using the PTC floor as the launching point for this. And that is also going up over time, especially as interest has continued to clock or inflation has continued to clock at a higher rate than expected before. So we're seeing that in the underlying PTC escalation as well.

Constantine Lednev

Okay. And do you find any interest of market of clean attributes independently of the generation megawatts, especially if it remains available under a deal framework, is that an additional upside? Or is that kind of embedded within that range?

Joseph Dominguez

Good question. I -- the way we've crafted it here, it's embedded in that range. some clients will lean more or less into buying those attributes. And if they don't buy the attributes, we'll sell them into the market through our other clients. But what we're providing here in the sensitivity chart is intended to be all in. I would just add that the contracted clean megawatts are all of long-term duration. We are selling to Joe's point, some shorter-term attributes that really come through the commercial margin sensitivity. So that's where you see additional green shoot, if you will, pun intended the attribute sale.

Constantine Lednev

Okay. Got it. And just maybe quickly touching on the strong financial outcomes this year. maybe how much of the conditions driving that second guidance raise do you see becoming structural? And what would the cadence be for longer-term outlook updates, just including that long-term ramp on the agreements just seems like there's a lot of upward pressure versus when outlook was set.

Shane Smith

Yes. I mean I want to be mindful here. The long-term agreements are going to come through the base earnings profile, right? So you're also -- in the long run, as you're moving those into more on a contracted area, you're probably going to get a smaller contribution out of the enhanced. So at the year-end call, we'll update both 2027 and 2028 for the base projection as well as what we expect from the enhanced profile. In terms of what I spoke to you today, I was trying to communicate that the enhanced bucket really performed well this year, commercial team did a great job through the volatility. And also, we had the benefit of higher generation performance, like I highlighted in the summer months. And so those two both contributed to this year, but I wouldn't say that is transferable to all years.

Operator

Our next question comes from James West with Melius Research.

James West

You've been a big proponent of suggesting that there's a lot of latent capacity on the grid and we could utilize that before a lot of new builds. Now you obviously have announced up rates, et cetera. But how much of that capacity do you think still exists today, even if we factor in kind of curtailments, things like that, that we could better utilize our current grid besides building a bunch of new generation.

Joseph Dominguez

Yes. I mean it depends where you are. But look, I mean, look at the availability factors on combined cycle machines and ERCOT, as an example, are vastly underutilized vastly, vastly underutilized relative to their potential or even 90% utilization rates, you're seeing utilization at certain instances, half of that, right? And so all of that is capacity that is available to support this economic load if we can move those megawatts around a little bit. But you have a lot of plants just sitting idle on the grid. It's tightened up a little bit in PJM. But even relative to historical usage, it's relatively light.

So in terms of where we are, I think for -- we've done a great deal of work in this. And our view is depending on how fast the data centers get built, we could have probably another 6 or 7 years worth of stranded capacity or what it is presently stranded capacity that could be brought to bear and allowed data centers to come online. And now that's not even touching demand response, right? Because what we need to see, what we're still testing, I think, is to what extent moving away from a 1-year price signal is going to make a difference for Demand Response customers who might be willing to do physical things at their site that will allow them to curtail but they need a payment stream that is going to be 5, 10 years or longer. And that's what Jim McCue and the commercial team are exploring with our clients. And so Look, I think there remains a ton of available energy supply out there. And I think we're going to be able to manage through this next period. Now at some point, that will run out. But it could be closer to 2035.

James West

Right. Okay. That's very helpful. And then as you think about the recent elections, one of the biggest impacts, I think, is bringing labor to the table and making sure labor is appropriately compensated when we think about data centers and the AI build-out. How does that factor into your thinking? And presumably your -- I mean your labors, presumably, you're very supportive of that.

Joseph Dominguez

Well, look, I mean, we -- it's no secret. We have had really good, strong relationships with organized labor. And I think the Democrats will focus organized labor. That's -- as I am seeing, these new policymakers who have been elected and they're bringing on transition teams. I'm comforted by the fact that labor is very present at those tables. And I would expect it to continue to be. So I mean, that's really the point I was making earlier. I think the market scare that people got last week was not lost on Democrats.

They do not want to be the reason that the economy takes a nosedive by halting data center development nor do they want to halt the jobs that come with data center development, which, to your point, feeds an important constituency of the party. But they want to make sure these -- that there are adequate guardrails in place. And interestingly, in many respects, the election had the Republican saying a lot of the same things that the Democrats we're saying. And I believe that the policy solutions are going to be somewhat similar. There might be some differences.

And certainly, there are going to be some local areas, I think, that are not going to want data centers. But what we've been able to do here this year, I think the kind of the exciting thing for us is we show all of you that it doesn't matter if the data center is right next to our plant or in a particular jurisdiction. We have reach across all of PJM to get megawatts everywhere. And so that's what we've been able to exploit a big platform like ours with the geographic diversity that we have allows us to go where our clients want us to go. And if that's on grid solutions and so be it. Yes. On grid remote solutions, I should say.

Operator

Our next question comes from Carly Davenport with Goldman Sachs.

Carly Davenport

I appreciate the color on the incremental CapEx related to the PPAs. Is there any -- any color that you can share on the volume ramp schedule and just how we should think about the split between the existing volumes that are contracted versus the up rates as those start to contribute to earnings?

Shane Smith

Yes. So we've got the ramp schedule there of how the new uprates are coming online. I mean, I think it's safe to assume on a pro rata basis, so that's going to be tied with our contracting of the existing.

Carly Davenport

Got it. Okay. Great. And then just maybe as you think about the incremental potential upgrade opportunities, I guess most of what you announced so far was in PJM cycle one? Any sense today on what the magnitude of that incremental opportunity could look like for subsequent cycles?

Joseph Dominguez

I think we're still working our way through that. as you pointed out, it's going to be in a different cycle. And so we're going to have a little bit of time to sort that out. It will be things that we will flow to our commercial team for opportunities that will come a little bit later. We will see, however, I think whether everything that is in this early batch really works. And I do expect some of that to drop out and maybe present opportunities for us to bring megawatts soon.

Operator

Our next question comes from Rinny Singh with Bank of America.

Rinny Singh

First, I guess, just on the co-location proceeding and the show calls orders. Can you just talk about the process there and the direction that you guys are expecting? Obviously, you said that we should expect the first quarter or the mandatory time line first orders early '27, but then with the show fall order and everything and what you're just expecting to reject proposed?

Shane Smith

Yes. As you said, we're expecting the compliance filings come in from the RTOs in the next couple of weeks and then FERC action on those filings sometime in the next year, probably in the first quarter, we'd expect. In terms of what we think we're going to see out of that is FERC has been very clear in its support for co-location and for giving direction to the RTOs to accommodate colocation, including some of the new transmission services like the interim knits product. So I expect that the RTOs will follow FERC's guidance there and include those opportunities in their tariffs, and we'll be participating and making sure that, that happens.

Joseph Dominguez

And David's team has pushed PJM pretty hard on this. Initially, the I think they proposed to make a filing in '29 and the FERC really told them that was way, way too late and forced it to go forward. So that -- I think based on that, we have some sense, right, that the commission believes colocation is a real viable alternative and something that should be studied and implemented sooner rather than later. So we're hopeful that the commission is predisposed in that direction, and it should be. Colocation should be an important strategy for bringing on this load simply for the reason that it doesn't require these massive transmission lines to be built.

We have land, we have industrial sites have places where communities want this construction be built. It just makes sense, right? And even if we have to add batteries or peakers even this is the right place to do and it's the right way to think about things. So we're encouraged by for pushing PJM on this. We'll obviously have to see what the compliance filing looks like. and there's things to be worked through, but I'm cautiously optimistic we'll have all of our answers through the first half of this year.

Rinny Singh

Perfect. And then just on -- as I look at incremental generation opportunities. should how do you guys think about the hurdle rate and the kind of additionality need when contracting for long-term customers?

Joseph Dominguez

So when we think about the hurdle rate, we have -- we've said from the beginning of the business, 10% unlevered returns. When I think about what that incremental capacity needs to come in, priced at, it's all part of the broader deal, right? We think about it as part of the bigger deal including the sale of our existing megawatts. And that has to be attractive and meet our hurdle rates. But not every individual component is going to need to be. And that allows us to kind of lean into storage solutions, perhaps that others may not be interested in because for us, it unlocks this contracting opportunity. for our large portfolio of existing clean and reliable energy.

Operator

Our last question today comes from Nick Amicucci with Evercore ISI.

Nicholas Amicucci

Shane, just one quick one for me. Just because a lot has been covered today. And so thanks for all the details. Just of that 113 million-megawatt hours that you guys kind of cited as available, I guess, what how much of that is realistically marketable today after we kind of think about existing obligations, average reserves and potential delivery campaigns?

Joseph Dominguez

Well, largely, all of it. I mean, the -- we have existing obligations to commercial industrial customers, but the duration of those contracts is normally something like a 3-year look, right? So after 3 years, which is practically when people will want to buy that for a new data center, all of that becomes available with some of it available almost immediately. So our -- look, I think we've been clear today and through -- from the beginning in this business. We are trying to create a business that is very, very different than what we started with. That has a duration and a certainty to it that no one in this industry has ever been able to come close to putting together.

We think we have already done that with what we've done this year. But we aim to continue to do more of that. The counterparties could be anyone. It could be utility customers like in New York and some other things that we've been talking about. It could be data economy customers, it could be every day commercial and industrial customers. But the objective is to take the entirety of the fleet and move it to long-term contracting. How long that will take? We'll see. But that's what we're aiming for.

Operator

That concludes today's question-and-answer session. I'd like to turn the call back to Joe Dominguez for closing remarks.

Joseph Dominguez

Well, thank you. Thanks again for your time on a busy Monday. We very much appreciate your interest in Constellation. I wish you a good rest of the day and a healthy and prosperous rest of the week, and we'll close the call.

Operator

Ladies and gentlemen, thank you for participating in today's call. This concludes today's program. You may all disconnect. Everyone, have a great day.