Utility PPL forecasts 2026 profit below estimates, lifts spending plan

By Dharna Bafna

Feb 20 (Reuters) - PPL Corp PPL.N on Friday forecast annual profit below expectations, but raised its four-year capital spending plan by 15% as the utility prepares to meet surging power demand from data centers.

U.S. utilities have been adding billions of dollars to their capital expenditure budgets as they face extreme weather, while also fielding massive requests for new power capacity driven by data centers dedicated to artificial intelligence and cryptocurrency.

PPL said it expects to spend $23 billion from 2026 through 2029 in capital investments to build new generation capacity and expand transmission networks. This compares with its prior four-year capital budget of $20 billion through 2028.

The utility expects 10 gigawatts of data center projects under energy service agreements by the end of the first quarter, it said in a post-earnings call.

In January, the White House had urged PJM Interconnection, the largest U.S. electric grid operator, to conduct an emergency power auction to protect against rolling blackouts as energy demand surges. PPL estimates the auction could yield 6 to 7 gigawatts of new power generation, it said.

PPL's shares rose nearly 2% in afternoon trading.

However, as utilities beef up spending on power plants, cables and other electrical infrastructure to meet demand, concerns are growing about rising customer power bills.

CEO Vincent Sorgi on Friday said he expects the company's joint venture with Blackstone Infrastructure to lower wholesale electricity costs for its customers and build new generation resources in the PJM market.

Sorgi said the utility would focus on ensuring utility bills are affordable.

The Allentown, Pennsylvania-based company said it expects adjusted profit per share in the range of $1.90 to $1.98 in 2026, the midpoint of which missed analysts' estimates of $1.95, according to data compiled by LSEG.