Yahoo Finance PPL's Arm Receives Approval for $326M in Infrastructure Upgrade
PPL Corporation PPL announced that its subsidiary Rhode Island Energy received unanimous approval from the Rhode Island Public Utilities Commission (“RIPUC”) for nearly $326 million. The planned spending between Apr 1, 2024, and Mar 31, 2025, is aimed at improving the safety and reliability of Rhode Island's electric and gas networks.
The proposed spending is related to Rhode Island Energy’s annual infrastructure, safety and reliability plans for gas and electricity. It covers approximately $300 million in capital investments ($132 million for electric and $168 million for gas) and $26 million in operating costs for vegetation management, restoration paving on gas main replacement projects, system inspections and other work.
Focus on Infrastructure
A rise in temperature not only increases the demand for electricity but also poses a threat to electric infrastructure. These upgrades and maintenance tasks are crucial to maintaining service reliability and ensuring customer satisfaction.
PPL’s capital investment plan primarily focuses on infrastructure construction projects. Customers have been experiencing fewer outages, courtesy of the ongoing investments in strengthening the company’s infrastructure. PPL expects a regulated capital investment plan of $14.3 billion during 2024-2027.
The company further aims to cut outages with its ongoing investments. PPL continues to make investments to strengthen grid, electricity and gas distribution, electricity transmission and expand renewable generation capacity. It also focuses on new technology to serve customers more efficiently.
Peer Moves
In order to provide undisrupted electricity and associated services, utilities continue to make systematic investments to upgrade transmission and distribution lines and develop new substations. The objective is to warrant a proper supply of electricity to millions of customers across their service territories.
Apart from PPL, other electric power companies like FirstEnergy FE, Xcel Energy XEL and Exelon Corporation EXC are also adopting measures to strengthen their existing infrastructure.
FirstEnergy’s Energize365 is a multi-year grid evolution platform focused on enhancing customer experience by upgrading its infrastructure. With planned investments of $26 billion between 2024 and 2028, the company will install advanced equipment and technologies that will strengthen and modernize its transmission and distribution infrastructure.
The Zacks Consensus Estimate for 2024 earnings per share (EPS) implies a year-over-year improvement of 4.7%. FE delivered an average earnings surprise of 1.9% in the last four quarters.
Xcel Energy aims to spend $39 billion during 2024-2028, out of which it plans to invest nearly $22 billion in strengthening its electric distribution and transmission operations.
XEL’s long-term (three to five years) earnings growth rate is 6%. The Zacks Consensus Estimate for 2024 EPS implies a year-over-year improvement of 6.3%.
Exelon invests substantially in infrastructure projects. It plans to spend nearly $34.5 billion during 2024-2027 in regulated utility operations. The company is set to invest $21 billion in electric distribution and $9.7 billion in electric transmission.
EXC’s long-term earnings growth rate is 5.69%. The Zacks Consensus Estimate for 2024 EPS implies a year-over-year improvement of 2.1%.
Price Performance
In the past six months, shares of PPL have risen 19.9% compared with the industry’s 9.9% growth.
Image Source: Zacks Investment Research
Zacks Rank
PPL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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