The AES Corporation (AES) 2 Aug 242024 Q2 Earnings call transcript

Hello, everyone, and a warm welcome to The AES Corporation Q2 2024 Financial Review Call. My name is Emily, and I'll be coordinating your call today. [Operator Instructions] I will now hand over to our host, Vice President of Investor Relations, Susan Harcourt to begin. Susan, please go ahead.

Thank you, operator. to quarter welcome call. financial and morning, our XXXX second review Good

XX-K forward-looking many press financial results aes.com. Today, website making related with found presentation, between statements, to we There non-GAAP GAAP these are recent be Our financial are the on with filed measures in and disclosed XX-Q our which differ information be our materially and release, along website cause the presentation. most can that factors our may available and SEC. Reconciliations from on will statements. future are at

Joining to President With our team. me Officer; Andrés. members this Chief morning Chief Coughlin, management over are our that, Andrés I senior Gluski, Steve other of and our will Financial turn and Officer; call Executive the

everyone, second you call. morning, and review financial our XXXX joining for quarter thank Good

top since with made Slide Today, year. significant We to portfolio results. We in our new in adjusted our with financial $XXX are on I advancements competitive we large to expect track on metrics Coughlin, was detail and new last XXX of results, work second signed data in XXXX develop CFO, with our and generative with very of call reaffirming AI May, We're are objective, with we a have the technology our a X.X quarter our will businesses. attributes tax AES through had will pleased our far second financial across half performance give includes that center across With pleased Ohio. XXXX. the in of Ohio agreements and adjusted and to in performance we renewables the advantages. Beginning utilities our Texas, our of so X.X load gigawatts AES of Steve this quarter our X have of to and our expectations. and This megawatts EBITDA with million, now gigawatts incorporate of our strong provide tax attributes rates X.X EBITDA new discuss total, ranges agreement doing remaining $XXX financial also renewable and $X.XX, report we're and supply guidance gigawatts customers, that EBITDA XXXX growth growth adjusted be EPS. to we also new including our Indiana, million, and outlook. I'm on line EPS in a more with adjusted to retail adjusted hyperscalers for XXX-megawatt in meet PPA

our center with With areas providers of data new we work these the expanding major are to business. arrangements,

center to our data in Ohio and utilities X.X to XXXX. phases in now Slide have Since on AES Turning to growth support signed we call, come agreements load new across U.S. of beginning at expected gigawatts our online AES Indiana last X.

support sites Additionally, both XX%. by for utilities, of advanced we're potential to at gigawatts negotiations Ohio Indiana with load in load. are transformative several more new another X to both across the These AES than peak increase and AES the agreements

recovery timely consist Ohio's base transmission receiving rate. of AES result, a will a through FERC-regulated As assets, rate formula predominantly

growth For AES increase further as will transmission industry-leading significant potential creates build-out utility Indiana, additional our in for U.S. new opportunities even assets. this the rate investment growth These generation as of base well plans.

resources large and to to Our other land and interconnection, loads incentives. water local prices, with are access data and rates, service territories well positioned particularly available centers serve lower

the and AES generation X Slide Indiana. to Turning at build-out

approved by deal completion generation supporting Indiana development have convert approximately that AES $XXX will we gas with XXX-megawatt build make expected of acquire Utility XXXX. million We our recent units that progress signed project Commission, to our our announce down pleased to a fleet. fleet Indiana require and to date continue coal generation or an will transforming solar-plus-storage project project growth. renewables shut and the to I upgrading CapEx Once Regulatory Indiana's we in AES sixth own. The and a be in will as this construct the late am

power our XXXX These partnership its and turning online Since to growth. our a we are XX-year have and to X. further megawatts includes in renewables in for solar signing on projects data XXXX. come energy call Google's carbon-free business Google, further expanded with last May, XXX The combination to in to PPA center Slide agreement Now of a wind XX/X expected Texas our goals.

We collaboration the with data demonstrates centers. a also our Google's for Ohio XXXX renewable in opportunities trust power to their which renewables in retail with data Virginia. supply our We agreement signed growth XX/X companies, to partnership see recently support original and center to between strong support agreement to This further Google add XXX began megawatts Ohio. provide

Turning to Slide X.

clearly hyperscalers, announcements signed companies, major directly a position. these market on of With a gigawatts now have we today is with technology collaborations our leading with X.X which total

our Slide contracts XX.X As signed of X, projects at backlog on long-term you stands can under now gigawatts. see

high-quality means on returns Our maximizing quantity, projects over of megawatts focus remains and PPAs. the long-duration higher delivering with the quality which

We relationships the have growth our that never supporting in and and value felt market better dynamics are portfolio. about our long-term creation key customer

better we rise power in election X. of signing sustained demand than growth and IRRs. renewable change structural confident one centers sector, from significant continue AI mid-teen with is the PPAs and represents in our Slide is to are for outcomes, in ability no AES from this for Turning positioned generative power The opportunity. policy or a coming that to data Regardless the

and with over the over offerings of and to demand years. solutions innovative shape most ability meet co-create includes as see next clean renewables This our such to customers. time the Our XX/X decade. a corporate queues, structure at of hybrid long-standing power new has PPAs, the hyperscaler and price looking can of that value AES deep bringing interconnection the relationship energy products new and certainty, customers renewables. unique we X power, on as record source the only our Furthermore, online, projects past time

that to XX, that third bring of Slide this I quarter. almost gigawatts on for and projects major should the year, we XXXX. note online to this online remainder X.X the towards have all the coming construction gigawatts see and we the already site X.X can weighted the for have of expect year, expect completed of you be on equipment all already we As the

Additionally, we domestically in solar expect be a portion of panels our XXXX. to significant produced beginning

above, exposure combined of our panels XXXX the new for projects, mitigates All with any on site having to tariffs. potential greatly

has will chain supply resilient best-in-class. and be diversified and continue to been Our

and also give advantages. us Slide providing customer AI shaping only how that new we generative the it landscape Finally, Not new innovation internally, turning will to competitive but XX. for efficiencies, is service, transforming work is customer opportunities

Ng, Fund may you in works to is that energy a announced venture entrepreneurs studio Fund As AI rapidly June, a AI accelerate seen, AI-driven by have to build we AI partnership Founded with leader Andrew companies. solutions. with

efficiencies companies areas continue Fund culture and developing our and leverage co-building same asset address time, management. At leverage across improve renewables AI transition, We are in AI to collaborating AI the such to as we innovation the continuous improvement. of that with bottlenecks our in energy on portfolio and operating and with

our and wide across smarter. proprietary business using range enabling operations, tools our increasingly to faster people of a work are We

that utilize simultaneous development will the which our example, sophisticated more at generative through AI projects predict efficiently queues, move processes. built the has various interconnection us For speed renewables tools to accurately helping team coordinate

worst and We to Maximo largest the week, Maximo, our solar Slide you overall in we serve is already launched on to the contracted can XX, Steve ramp time in robot, can to project it up modules. the robotics project customers, construct to which will installation which first would a solar-plus-storage installation to X uses and costs. reduce and construction utilizing I state-of-the-art is this over project U.S. returns. Maximo portion is it weather California, Coughlin. call conditions workforce. in the valued times XXXX plan CFO, inclusive earlier of power, project turn As like complement does our in it that, highly more our to It by now world's the and of crews construction AI-powered to are boost of solar shifts work Not Amazon. With but enables which faster our even our the reduces with in a overall see AI use Bellefield X-gigawatt only

will allocation. Today, Andrés, XXXX our you, guidance good capital everyone. Thank and second our and results parent discuss quarter I morning, and

Turning $XXX million in EBITDA versus second XX. with SBU, year a infrastructure new Adjusted investments million energy in our Slide higher tax quarter driven This margins to the attributes by rates growth utilities, SBU. was in was our and ago. $XXX renewables our U.S. and in growth

higher Turning the at by SBU to plant to Slide outage those attributes higher brought in caused Chivor higher Adjusted depreciation year. hydro last tax a we've base plant $X.X the utilities mid-July. Higher a Drivers driven our of adjusted with next by our interest quickly event revenues versus forced performance with slides. Beginning on the operations from were by higher into was the Slide the $X.XX the which on PTC partially units X Colombia. mostly and sediment as business EBITDA $X.XX quarter EBITDA from significant was by units. year. but XX, contributions our and from early inflows invested primarily past damaged EPS offset to resumed our by was rate our Repairs adjusted of outage with water completed but for expense or in X-gigawatt driven offset record the result growth. The similar cover was partially availability were of plant attributes lower at units I'll was projects by XX. in renewables new SBUs all in the SBU strategic tax and billion our June,

in of higher New of as accelerated in Dominican the Higher of our and recognized from energy May, well Dominican Chile, SBU EBITDA Republic. higher the at plant margins rates LNG weather. and Warrior implemented infrastructure by low primarily and in in our gas and the partially at the Republic monetization our PPA lower growth Indiana Run Panama the reflects as year-over-year favorable in businesses revenues X.X% margins offset sell-down

our offset Technologies technology Fluence. at development of our at EBITDA early-stage by margin continued partially SBU Energy reflects New increases continued flat relatively Finally, businesses,

to XX. turning our on Now Slide expectations

with EBITDA higher expected to renewable $X.X our second half be of utilities, share half year new U.S. a As in asset in I'm a by load to the from XXXX Drivers program. expect growth include very half, adjusted attributes top and expected investments, the and adjusted EBITDA at billion. our strong commissionings, in to of high go performance billion from tax contributions to tax with our strong result we partially higher of range in first of offset $X that now contributions our closings confidence attributes sale happy expected

$X.XX. that be the of by with as of XXXX. We increased am adjusted to upper XXXX our attributes, very XX, expect of now capital. year in to our first I Turning to to similar to XX% the half half of adjusted Slide nearly guidance EPS range XXXX also the go tax we higher the partially share will EBITDA offset from to year half in in drivers our glad $X.XX earnings in expense interest from share growth in Growth have

Now XX. to allocation our XXXX parent Slide capital on

Sources from million asset sales, of million cash $X.X cash, earnings discretionary that May. $XXX our since reflect parent billion debt in total $X to and including call of $XXX hybrid free proceeds flow, approximately $X.X of we billion issued last billion of

planned right-hand can our the of On use you capital. see side,

shareholders million this the dividend announced We $XXX previously reflecting approximately X% will to increase. return year,

go billion to to new will We $X.X to toward billion also $X.X utilities. XX% invest of growth, renewables and plan which

XX. Slide to Turning

on financial sale last through nearly X/X our XXXX. the come excellent well X-year not now $X.X our exit, this since New towards could Technologies even the targets. we've the beginning progress way $X.X We've announce toward asset sell-downs of more projects, renewables strategic X.X quarter of we're from our summary, only year, monetization and sales other but businesses, specific noncore target from asset in XXXX billion of period. billion of our made asset of are than or our guidance are advance, we of assets. In Energy years way sell-downs our of closed into do intended and and We sales sales reaching signed coal our of though to achieving all We proceeds target remaining long-term or

simplifying key scale beyond financial on We we significant long-term year. year-to-go drivers headway are funding toward our have earnings delivering goals leading made portfolio on allows clear and our achieving businesses. us growth, and positioned continue and utilities the line plan, continue of well of We've this which our focusing to renewables our also our we to sight while

and renewables Andrés. that, data across Our AES continue turn and will shareholders. the utilities our highly success corporate growing back strategy for and call customers, a I'll providers businesses to is over With serve to our including resilient rapidly base financial to high-value of center yield

Steve. you, Thank

X At last Q&A, far I deliver call, this agreements to including the so this the opening segment. continue of today's on time, time up gigawatts With like our projects from already call. directly gigawatts highlights call X.X the we to on to technology summarize Before customers, our with for signed would with since same than leader large gigawatts X.X more in the we be continue year. completed and industry signed budget

existing our to are projects in XX-gigawatt utilities. on backlog end centers signed customers very XX% up of confident line U.S., development gigawatts these add could questions. positioned objectives. power we track open serve our for our from from a We of to to long-term X.X or year, the to demand our PPAs, continue data long-term like and fully and with Operator, in in renewable ability the XXXX. We our total I not meet please of see that growing a to to would better pipeline we the the by strong our are be demand exceed business XX.X-gigawatt for around reiterate for

question Evercore with from first ISI. Chopra today Durgesh Our Instructions] [Operator comes

bad off, have question. I Maybe the quarter the one just today. and on question congrats -- macro one numbers and is have on high-level off Too risk a First solid half. first I then just market

XXXX at then you you FFO just end did be to of update up do credit First, QX? of as you debt? on Steve, end on could the to Where metrics? us expect And where

Sure. Durgesh, hear good voice. your to

on year-end. parent So credit's year's At be strong path the so of we'll a improving very, expect very continue to be even we I credit. than looking level, last higher

the continues There's cash it interim think -- have even in obviously it lumpiness looks I and we last we'll very up, better some good. but coming flow be strong And year. year-end quarters see cash so movement very than as flow

still I XX%, a So just those FFO target the numbers that to be basis, was think of methodology. last kind year an right, S&P have Steve, goalpost? I on clear debt though, to Is if good

Yes.

a even had we we think XX% above at that. I more than threshold end likely so of this of where that think, to, have cushion year. plenty ourselves you're the So ended, I of And higher referring which we'll see

Okay, sheet. perfect. A of lot questions balance on the

commentary prepared I'm here. in election remarks. obviously Andrés, one I a Okay, wondering, then maybe appreciate question. just quarter the But your just great

You ability But repeal policy I'm just you Is tax us that negotiation? that. added sort your come side. hurt chatter, if does in through all the contract sign noise that wondering renewables added on utilities, risk? to the help just the a your new contracts? of around to Maybe Does other credits and up that

there's our many markets. years situation Sure, Durgesh. down to for really centers had, a What in -- No, is signing slowing not foreseen of it's some contracts. data really couple we that power of where it's extent, of we a renewable a have shortage ago,

clients to main our of And actually centers? get Can concern you on power biggest power is their power. that's data me the time constraint. the what's So time to

holding quite we for frankly, So no, them. hasn't or, I investment credits, have look, around and been tax say, step us issue do they've a back anything of major conversation that ITC, to down tax years. XX think production credits, been with

has investment Act, working gotten districts. people been Reduction the related investment Second, XX% that in and X renewables a million U.S. Today, of amount indirectly there's in to are there or the of Inflation tremendous Republican directly into

in subsidies. sure. around where are unlikely about those the more some quite So is in sector, We no actually changes any operate there dismantling make we thinking a scenario, in the money whether there subsidies. margin, total markets But frankly, highly are

So But this it somewhat the the of we revision of change see contracts. very, very wholesale unlikely. structure would

improved happened and Something more it likely it some actually USMCA what was, to where and quite NAFTA, the became areas. updated frankly, in

we where the that's now. So right see market

Sunderland question next Richard from The JPMorgan. comes with

to of of today? into advanced of that the in how fall plan you and capital the can and Plus what's terms much the in in could negotiations outline transmission breakdown Ohio? buckets between that generation on Starting utility the the opportunity utility relative load Indiana X gigawatt announcements,

multiple Okay. with to a and as how these we multiple assets are a on between But will it Look, great more because We're that's clients, that certain between shakes this like really of out. clients. give you be utilities question. time agreements lot there's see passes X a to that we transmission color But added. multiple load is of added, going lot

us to too bit So too business. much growth little terms exact in for right early now, of a load give by color it's

that, And Rich. Yes. to to just add

within There's This guided discussions, previously the that so combined. have a plans is so long-term see past. year. utilities start we'll to even do we've guidance But XX%, acceleration saw than for up beyond though, we the here, matters upside upside. see period definitely in to the the some we more significant of growth definitely that. this lot our given some and at We around Timing of

quantity, your but And quality return certainly consistent I'm the raised is your that message Understood. with clear, this in maximizing language slides over if on assumptions. has then been megawatt curious

that dynamics was dynamic in given supply supply back XQ. Or demand to returns, think see upside the do I you potential currently? -- and further

things. when interconnection the pipeline, have some we several queue, something and Basically, land talk means have I we Okay. we of degree in that control. about think One,

people all signed not actually that's So were when have to contracts buy to energy. I created have would pipelines that we we and And are that talk say that and equal. backlog, about deliver

even out anything taken during material backlog never of our we've So COVID.

So message we projects. our the one, about now what on these we're increased average is, returns of We're rate yes, was here basic mid-teens. saying talking

client, like various one clients opportunities. value sign than optimizing one thing among the particular of agreement and this other among that umbrella rather The we're resource is with

pipeline, want market we very good value pipeline create we But we invest average good talked about. then we Well, to that something So the the optimize the for it we market go also of And think we returns shareholders. best real now, see making we're and as to feel create the right that about this about further? very this depend opportunities. feel our returns that and I from it. Will we mid-teen use in, where by would the up value

comes Aurimond The question from next with Jefferies. Antoine

we'd be to what follow you the prospects the Durgesh towards rating? on how time the contemplating? on line guess frame do mid-BBB would up credit of going I a side, And be

Yes.

as definitely continuing metrics I are credit to So improve. said,

possibility see will a year have of matter -- this I that a years, as metrics. so in not those And that be

grow don't So at we year with I it but this we expect and base, to higher in. I this do the to than target yet relative of you as continues and share the have not yielding. a expect that specific increasing But continue growth base are that's to cash. add is year improve Today, to base our debt construction significantly the every last installed to in to we moment point, carry be

but So yes, point. I think you a with to specific share that's very this at don't I have date possible

thing like to One I'd add.

we continues renewables with in towards contracted countries of long-term transmission flow our or investment-grade the this As moving more with to transformation, a improve. offtakers base, and cash exit which are we are in rate our investing primarily as quality U.S. also utilities,

as credit improving a rating only seen by question the well. are the So metrics, said, it's quality as of agencies that Steve is how cash but it's not or flow of improving which

we very So on feel about good it. sides, both

nearly just investment-grade I is debt. Yes. to And Keep that reminds parent. that of another mind all is nonrecourse of of -- me XX% really have keep the here. we'll amortizing debt here rated topic because that actually, our And going in subsidiary I guess

the structure, So seeing it's are high-quality and a that. agencies very

as the and structure. healthy Andrés So the a structures, quantified said what it's very think investment at quality I in amortizing both -- as mentioned as grade, looking debt I've metrics, the very, well this robust,

the geographical the Got the you businesses, trending it. towards CapEx I mix towards of U.S.-based sense. Yes, of that guess that end on makes period? time where see with note, XX% do the going

you're End speaking? like XXXX, of the period, time

yes. Yes,

dollar-based say I'd transformation more moving can in there's -- we're a Look, Okay. towards think U.S. investment-grade I of offtakers. we terms

U.S. yes, the there's the type serve be heavier dollar going clients same the which opportunities client. and have same the We to investment-grade with times do weighting are So many outside to U.S., of towards contracts

in serve advantage we And in as, and if say, the or have. we Chile U.S. the So service. same that hyperscalers service Mexico, then in competitive can want is we they a

then of more you okay. mentioned guess, quality megawatts versus volume. it, Got And I sort makes sense. That so of

that to number You're going fast do, quality, of and going this it's right? of year. like more How guess forward So more you what's sort number evolving? gigs what, should I'm assuming that but to about X.X I increase, we still mentioned a couple years? think

it that I'd deliver. of within a by Yes. majority will Look, backlog of put had be have more XX than way. gigawatts PPAs this We XXXX. to we the well, period of signed The

you over -- a to that that next gives guaranteed build-out have the we So do years. that's X

signing we're you X.X convert. But gives X.X, the coming grow we'll run that the assuming past that have period we from that to given Yes, time, little be number time, to somewhere gigawatts just over XXXX. they'll time of in in numbers expect the bit that grow backlog and of have today about years a then signing take time So of -- over we unless those of and X-plus rate. sort converge more we're to PPAs, megawatt new PPAs

comes The Stanley. David from Arcaro Morgan question next with

things, opportunity CapEx utilities you think When to the opportunity the outlook? financing it's great have high load back at think at level, Maybe the And coming. how in see to do all trajectory? upsides on do relook side you utility growth an a then that of CapEx about you'd

in process of the year. next into are beginning that this we'll second we the guidance in bake timing our year the we've details So recently and that our update looking through of of what half of the flesh out of signed, planning as for

the this expect at in we out So I through all. definitely, that capital into plan, plan. But there our to start horizon play long-term funding in to 'XX, don't would see the I change have will come

done our well on really plan. sale have asset We

flexibility after of X-year of on a a are XX way only months got plan. We've lot through the We there. X/X

partnership have We capital.

there It's a invest attractive no So shortage is growth utility very capital of here. the in to profile.

see see material And it so the through 'XX. released I already within it that but plan funding I we've becoming

it. for on like feeling that chain sight the we as I if comments navigating Got you storage, just then was renewables now tariffs of have And XXXX? panels of and I outlook get the right in you could much That's helpful. on the both in sense, terms how how line domestic supply think of -- curious your on sight now really are supply Just side. appreciate just do some about battery the solar of chains? of supply for the those line right

we very feeling as this in we've for is, and -- signed most everything XXXX. need with what we And We're we I -- XXXX. want we would then agreement domestic have suppliers for good. year for majority of have vast what And say XXXX of for mentioned, starting

to or U.S. And on So say in backlog the date, ability any I over not in to pipeline last very postpone to again, deliver we we our years. about would X good that, abandon had execute, feel project our our the have material

much chains to happened COVID, this what to compared is So predictable. with supply more

very So switch it. going to in we're, good that supply starting make XXXX. again, domestic And we feel about to basically,

next with The comes Fei from question She Barclays.

PPA EBITDA cadence, I signing update deeper wanted attribute the it terms just think year-to-date? ability quickly maybe just in to how see trend, guess the I on given attributes. see of online, a I Really excluding you EBITDA, light into guess, renewable first great it backlog, could to tax the is now guidance So talk we Seems execution. given about, with how the the to should but would does going about where projects year. bring guess, your just little tax

Yes.

significant credits. upside tax So do our have a we in

is my tax mentioned in, particularly also these communities profile. not in as of of It's cash but I've which driven a for remarks, As a early important, transfers is have return seen significant valued And valuation that's amount is cash. level. to it's a primarily energy through just at earnings more What's XX% always very attributes, capital, coming we're This a qualifying the emphasized, -- of higher very that up are originally our attractive I anticipated. by than we XX%.

with really, this really a other pleased are So upside. There well. upsides in EBITDA we're as few

So Dominican growing focused in where higher on renewables and higher actually we less than in We've gas anticipated. growth. businesses And those and is very dispatch continued Republic. productivity costing and our fact, margins drive the utilities efficiency businesses in to have in had we're we business also our

So we EBITDA favorability see in this through cost going year.

first was you as what record of has Columbia in the units that though, and on, out June remarks, -- what outage. primarily been is my it's and which for to of the So took there that, all the caught the mentioned I offset an a and of amount It part flooding of July. inflow month

we wind did the had our a so think we but quarter, first I this, Brazil very impacted low that resource EBITDA have in that So unfortunately year. then other, did the a year. And this offset and is mentioned negative driver also to more and in this EBITDA

cash-driven but and So utilities we our pleased overall, with machines. have really the some in even renewables offsets to be continue growth we efficient and growth, that more growth the

front, new this expect projects and you out talk of on this cadence coming could through online helpful. I that's of kind we should a of majority the Got No, the online of second, year I on backlog year noticed projects comment to just guess X.X what lumpiness online, bring we it. guess XXXX the gigawatts on very targeted able with it? by being bringing from XXXX. about XXXX, this new

I ramping fast. smoothed we've bringing up cadence very of Yes. online much very projects Well, out at we were think the the when beginning,

the we XXX% online. grew last we're fact, year, of number projects In bringing

it's better much quite in to able it manage almost about and third is year, as the being be well. quarter sense to done we're first So this in is going the that half, the heavy half

is as, XXX% to next year. And be increase the again, year deliver the over because, even rate cadence in XX.X X growth will much going we the is not years. to have throughout the So again, more X obviously, it

of gets most is to so -- X. your And that closer numbers

The cadence. did the biggest time. challenge all about that on get we we up of to and done projects actually did good XXX% year very And ramp feel our we So we needed to last that. was

The next from Research. Wolfe question with Michael comes Sullivan

of look been questions. A the supply eye-popping. just planned you there's mean, about obviously the a you renewables Ohio, you're Indiana. to and know week. handful I'm load for you don't supply I data those conversion couple pretty earlier feeling there's I if ability the feeling And growth, and we how some utility that in then X -- are on example, in just about how then of Like know. got serve have AES ability side on states? like XX%-plus a guess, and generation have And less load I lot the curious a I a explosive growth, growth that to how and just this serve for coming. growth control that. but of I seems load point at like over

X Yes. to going years the Look, all not a timed in that's once so to is we at next question. be years. have This like this great over deliver the it's

renewables. part is been So remarks, to definitely generation. it my in for going opportunities of represents come additional that saying from as I've And a good

increased of in may from Some gas some that demand locations. come

be them involve between feel we solution in is generation this differences of will different utilities will itself. of they will MISO or PJM, all done. And the securing get terms different direct it will one more be definitely, So there in X and the be the of will

said very but this good a It it yes, growth. opportunity, great we it's is high know question how have because, quite number if we didn't but of be out pan will a could represents it this a So served. wouldn't

In part multiple would keep the we have Indiana, existing generation I solution, add be mind, just Yes. And where will in gas sites. point. Andrés's of to

So have Harding at for Valley, site. but Petersburg, we gas space and additional conversion the Eagle the at Georgetown we at have also Street, at

So are whole that's being we support center Ohio, you distribution transmission. course, package growth. In mentioned a the of seeing to data able

data a have attractive centers. very We area for

a networks water. located lot fiber territory Our quite and data of service cheap is land, available to accessible very centrally load, large,

appealing a So it is very area.

territory our capacity But one if in was attractive You PJM not is how I quite western most. PJM, of think -- you're to auction has increased. can I the significant the the high, within Ohio see areas, from think demand demonstrating the most referring

color. that Yes. all I appreciate

Just came that peers' like if calls. from last done regulated own that any what turns your to be a markets? this that standpoint your This follow-up generation competitive can't appetite it through Ohio could on up some in on out of look But point. and

have Look, renewables team. Ohio our generation now, in Yes. we right no But represents again, appetite for this for opportunities directly.

his So say over to we met. these realize that again, would feel said in comments. be But time going Steve I we as -- targets this can happen But tuned. have is stay had certainly,

And more just Okay, then one the over side. to renewables great.

of there additions think just kind to Brazil the announcement. since expected is we the going are sale about more growth? embedded asset last the call, Or as guidance? fully had like I your terms think longer-term in backfill longer-term that that that Should in we than of

already that's our No, embedded in guidance.

Brazil Yes, is both our the in included obviously, this long-term numbers. and year exit

The next question Mizuho. from comes with Willard Grainger

Just maybe one.

higher for directionally just out just helpful. about this pipeline? coming queue your you results development coming out of With year, and capacity that any auction of cadence color week And the be would the how on and thinking super power are projects prices next the of PJM the

Look, ramp developing, that looking were we just have shortages ability for demand. again, to demand, for seeing and several especially that we renewables of the suppliers at years up been corporate the saying, meet to

in we in what sites. We've to not cetera. market what financing, we is expected. to going extent, have This is happening locked some contracts, to the is have difference our plans. any make we et already So Again,

so the prices, plans. What to are is does, go equipment existing it doesn't our So think, assets to those it value as up any going shortages signal materialize. our change I of make

-- in term, it in but to the And longer So shorter that valuable. the in are more assets some our been effect generally the what planning means term, for. it's no extent, we've

So clairvoyant, intend direction the We be general don't that's it's course, we market action. not, of is unfolding a what but of expected. specific to the

comes The Storozynski with from next question Angie Seaport.

So questions. I have of lots

be et first, so debt, maybe that of rate the does embedded like you of cetera. construction yet -- wondering, help cost further I'm financing profitability actually so rates the again, have I certain mean, or the actually built? projects about boost first, are that in interest So for assumptions Meaning to interest environment,

benefit actually we're seemingly So do rate environment? lower in now that incremental a an get I interest

Steve. So this is Angie,

it ways. have can't we look, So both

all about, costs which So in financing. we have, hedging often almost means of way we the lock as we including PPAs, I've talked our a executing, of low-risk long-term sign when very our

we're -- the are to look, reduce infrastructure rates lower of new good we've that basis, much the They of that anything financing. so thing. the the cost for a pretty reduce and signed, So price we've baked customer. in cost on interest go-forward But a

further demand way So help execute. But will structure a we maintain the low-risk the in to a think overall, whole sector. catalyst we I it's and

flows, on being means Obviously, contracted for of cash will are But those interest the we a rate. the future are not means backlog. cash new for be for benefits flows signed a worth sort basis contracts It highly contract lower lower so discount more. new but rates

Okay.

topics. changing then So

for emission hyperscalers. renewable So those targets or reduction targets

other of centers points mean and obviously I Kentucky and are are side I I dealing grids for early carbon that just hyperscalers like emission transactions or being but those the Mississippi. -- So power they're and making, eventual of those have see that number basically data these with on with utilities that hear very then goals. But happy also they're carbon absorbing footprint coal-heavy then a that saying later. on targets on the reductions carbon-heavy developed in

when largely large procure power have does for that carbon again, they So how regardless just a that, power, have the going in instances, of and tie we just of quantities they're this pitch sense, where renewable into these available to footprint?

situations is renewable alternative. right? talking it about that's power, a preference is they I other basically, The So have no their would you're Angie, question. where put way great

power up from in have with future. renewables the basically So online or in coal and, will happy REX suck VPP frankly, the quite will that grid. a they're either by They not require offset to most cases, come

it this is alternative. have put last You like the this, to

important power. data so most if center, a you to And obviously, have have thing is the

for you you alternative, have carbon want do But power will other not low renewables. they have if possible. do to be as go they that So no the And as renewable goals.

terms of So that's demand. the in

Now let's at look supply. the

renewables look if is batteries. queue, what's you you almost the it include in If of all interconnection at

X is the sure can over weighted is get next heavily fact renewables. years for very the what to going say, let's So be built, towards

all if that combine to on that possible. be is one you SMR means of the clear nuclear? And nuclear, We of How that we As adding will because done. But PPA said and me Steve can remember and it's these mentioned, have some gas laughed plants lowest I the carbon the that tell what a embedding I direction both of call an regulatory price to hurdles. going sign is. you all, way I think said, Second kind laughed. be with the

certainty bringing nuclear it. still And really price on don't significant. we on You very is have

to deals going short they preferred Again, of that want. only renewables for the So not it's yes, but run are bulk That's what will be add-on. alternative, if that's the route. they their make the

is I'm again, again, of No, It's sure offset of I obviously actually But again, I Because again... yes. a I'm power or the thermal power understand. it I energy, renewables, center credits carbon just hear the data point, that your wondering or source footprint. when if debating is the more source like supply myself one the sometimes of for argue like and good. basically that's not But renewable I'm just basically question. just it using could the bad that energy? is if traditional ask then carbon-free

it the depends on quite think I Yes, frankly. client,

more much are clients stringent. Some

want actually clients matched hourly renewables. Some

additionality. require of require clients Most them additionality. Some

just one size So all. not fits it's

renewable the clear. differ will the think direction is among But I them. very standards

So their is taking as footprint they're something under I this and some up, their to had centers carbon that they renewable, at ramp a quite to very anybody up of goes from walking see that's sort not lot they've address. point. And don't the they're which and total pressure because contrary, away it data significantly power,

say pragmatic. And So their of But in terms fits not across unchanged. one remain desires, them. of I goals all that, uniform those and all. would not being size yes, they're It's it's

this of of same set page lastly, when as say, so this of then sort in is you is of you've this with into PJM? least mentioned that all the assets And these hyperscalers, additional here, zone, Again sort located at transactions again, it like colocations? entered have Is in a you carbon where or wondering, -- be this attribute it like energy? trying but and other power just is to I'm it's, the these being is this directly I'm power into sort hyperscalers? of commingled just Or really not opposed feeding facetious with so to a

Yes.

what add on Andrés just I'll So said. to

the more we including doing these away. where for a also where colocation the talking to renewables, yes, almost recently what or regionally perhaps same grid signed even others grid, of you're say, further we going would is, in but data Most in focused Angie, about, energy, I they're same in cases, nearby center. are are the to you So renewable what close time in we're call some would and relatively resulting the on PPAs, most of of supplying in in contracting location cases, power all these then locations, to

and of additionality priority, large, whether for direct all thing cases, is, a they're that time power top of in is it's But for. by course, these customers. through great is, the alternatives. that REX when we've So a or from what seen demand looking to most looking the But is renewables,

Okay. And like that mean, impact AES then example, for this concerned now Ohio investment? follow. affordability prices is how electric I a bills any have pickup energy lastly, business. happens, T&D sort so with this of only about what capacity wires you will in prices? that on Are might we and and likely, suppress the Most

the the I had lowest in we would state. say, first, rates look,

best from anybody. starting So the of position we're up

is again, our that power to location the new services these and that important they people realize -- good most the find thing other are to have additional Second, and the a who growth, need.

expecting up. And will this said had went saying, not particular to growth that this not I've this this. does terms of extent happen the been let's So well, concern in capacity the jump. auction, But as onetime not of, prices not we because extent, say, before, me some

So something field not this of have is like and to we left that's scramble. out

are and time. all talking be going look, We and and shortage our you hear we've over there's returns to going calls a to improve have about been been earnings can saying, from

this And is very what we expected. so much directionally,

The next SIG. Biju question comes Perincheril from with

for about when projects, that be your returns? question your targeting solar then and follow-up. you're storage -- could Can when content great. I bonus. eligible talk And implications your for separately on and be have A a if will projects projects that the talk domestic maybe to you And you might to the

Okay.

components. a So in already our the of the total first, criteria based content, different of those terms it's meet the in project, terms remember, of on wind the And project, criteria. domestic cost

solar panels, In again, terms we of beating that be XXXX. expect to by

frankly, batteries, is should be main quite our that, supplier they XXXX. Fluence, of in and terms starting meeting In

inverters, good working about other we there like on trackers, that been feel meeting requirements. Then very domestic are content as we've et altogether, cetera, things So well.

team a meet So done I various such criteria. do think they the that good job assets domestic the has very combine to the content

you meets put It's it's it fits are greater the like to all. wind, have going if lesser, you total available. you together not panels one maybe So solar what's And have, but size be say, it. and

meeting domestic good about feel the So criteria. we content very that,

certain be meet And sourced. to adders domestically you that project, cost I have threshold would just the once for capital across components the that add. in entire the of the the Keep mind

So those components not thing, whole really the which attractive. is just it's but XX% across

trouble Yes. And things prevailing wage, like have et we no meeting cetera.

that working we're the again, So well hard team very and feel we very has this been positioned. on

I'm that returns. your is along to of to trying be in the terms you your PPA most or just have -- retain you that would pricing? in to that understand able expectation And pass to would impact

Again, it's on a depends market. It particular on I in basis. demand-supply think the case-by-case the

division of So the depend the will answer shared. And then the think particular circumstances. be I on best would spoils

time we power. was My of talked and follow-up it. sort to a of lot about our Got

batteries or there are talked could solutions project, concern from customers? what think advantages your in about end specifically other talk terms last quarter, or sort to I technology and of and perspective? you the table table, So that to of that the a addressing for sort you the that can about bring renewables for DLR you you bring of

This bring what do we we technologies should this comment, the And neat then and we'll say, don't look look, is co-create this to at Yes. We tend client, holistically what look, of say, have with really the you buy. you We sort to really want? widget. bear.

new the we've technologies, leader do in that given really this. been feel Now a I

lines. We in invent years innovative to -- lithium-ion get XX lithium rating transmission in of everything started out Fluence that use grid batteries biggest very line have ago. We the existing of for number use the the stability. we of batteries country. things from -- to do project more did a So be is use dynamic doing to able

We the were contracts also first do to matched hourly for XX/X long-term clients. hyperscaler

number is continue with as do of finally, great we Maximo think there's a of a that. Uplight, And And thinking VPP So future. well, about the to facilities how example I we're energy management.

constraints, takes the heavy restrictions. lift strong panels. work And there solar only and Crews individual of have I'm do a to example. it very fact this is all. heard for And projects. at be can to One sure like the hours, to are you able today, X building you've it, heat, In for was task XX-pound, solar labor force

Maximo, more this with much really allows quickly. do us, to So first, it

to shifts have work it. be weather even can you and in to hot that, don't physically strong to terrible addition And particularly You X conditions. in weather do

to You robot. able supervise be have to the

well. Maximo faster as we cost would with So is online how an example bring advantages of and projects also

this is a starting first it. We're So step. to use

bring wouldn't Maximo see it work In conditions. words, X hire which all shifts And we out in weather a could we'll But that shortages ramping give a would frankly, there, we a can could we individuals. it Next quite because competitive at We we better. up. and do be universe that, -- faster advantage. year, face can, of after fleet us much labor can other broader of

So that's another example.

think our views really again, have So on our industry-leading. I technology Next AES been and

today, and to questions the we remarks. the back so all were for call These have any Susan time for turn closing I'll

us call. today's joining for everybody thank We on

a you As the and nice follow-up to available have answer questions you, any Thank IR will day. have. may team always, be

may today. your This and call, us for our you, concludes disconnect lines. Thank everyone, joining now you