Oct 27, 2026 earnings call — Houston-driven capital plan increase
Company raised 2026 non-GAAP EPS guidance to $1.90 to $1.92 and reported Q3 non-GAAP EPS $0.53.
Revenue $2.2B (est $2.2B) · EPS $0.53 (est $0.50)
Key quotes
"Greater Houston's growth continues to accelerate, demonstrated by approximately 14 gigawatts of customer demand we submitted as eligible load for ERCOT's Batch Zero process."
"First, $4 billion for newly identified projects not previously included in our 10-year plan, and $1.5 billion of projects accelerated from the back half of the plan into the first 5 years through 2030."
"We are increasing our remaining 10-year equity financing guide by $1.6 billion to $4.5 billion, well below our previously communicated 47% funding guide for incremental capital investment."
Analyst Q&A 8
Why EPS lags rate base growth
Q (Shahriar Pourreza · Wells Fargo): He asked why EPS growth trails rate base growth by about 300 basis points and whether that gap could reverse. He also asked about funding and whether any OpCos outside Texas present sellable dyssynergies.
A: They said the 14% rate base growth through the end of the decade supports extending their EPS guide and there will be modest equity dilution. Historically they convert rate base growth into earnings with about a 200 basis point delta, and they plan to raise equity efficiently and may use portfolio optimization to address any dyssynergies.
"I think the 14% rate base growth through the end of the decade provides, as you're pointing out, incredibly strong support for the extension of our guide to the mid- to high end of our range through 2030." — Jason Wells (CEO·CHAIR)
Indiana large load size and capacity
Q (Nicholas Campanella · Barclays): He asked the expected size of the Indiana large-load customer, whether existing system capacity can absorb it or if new build is needed, and the regulatory approach. He also asked how much of the $4.5 billion in the 5-year plan uses tracker mechanisms versus formal rate cases.
A: They said the team freed up about 700 megawatts of existing capacity and, with modest transmission upgrades and conversion of a simple-cycle plant, can scale to about 1.4 gigawatts. If demand stays at or below 1.4 gigawatts they would not need a separate generation company, but if it exceeds that they would build incremental generation; nearly all the CapEx additions are recoverable through capital tracker mechanisms twice a year.
"the team has done great work to free up about 700 megawatts of existing capacity in our system." — Jason Wells (CEO·CHAIR)
Transmission voltage and 765 kV plans
Q (Steven Fleishman · Wolfe): He asked whether the added transmission is lower voltage or includes new 765 kV, what their plans are for 765 kV filings, and why some studied Batch Zero load fell out.
A: They said the announced transmission is lower voltage, 345 kV and 138 kV, and about 85% is brownfield which speeds build and reduces disruption. They plan to file for 765 kV in the first half of next year and will work proactively with landowners; about 2 gigawatts of studied load withdrew during the audit, but they remain confident in the 10 gigawatt baseload and expect Batch One to grow.
"The transmission that we announced today is lower voltage, 345 kV, 138 kV." — Jason Wells (CEO·CHAIR)
Equity alternatives and excluded levers
Q (Julien Dumoulin-Smith · Jefferies): He asked how they plan to address the $1.6 billion equity need, which levers are included or excluded, and whether items like temporary generation or other asset sales could help.
A: They said some items are not reflected in the updated plan, including temporary generation units that return by the end of calendar Q1 next year which could be subleased or sold. They also noted demand charges of roughly $6 million per gigawatt per year, continued portfolio optimization, and efforts to reduce cash lag as additional potential sources.
"Recall that those would return to the company by the end of calendar Q1 next year." — Christopher Foster (CFO)
Higher interest rates and affordability
Q (Jeremy Tonet · JPMorgan): He asked how higher interest rates affect the business, refinancing, and the holdco, and then how they are discussing affordability with state stakeholders given rising CapEx.
A: They said higher rates are a sector headwind but they are well positioned; they only have about $300 million of maturities in 2027 and recent ratings actions should reduce borrowing costs. They added ongoing rate recovery through capital trackers and cost-reduction plans will help, and that affordable rates come from growth which broadens the customer base—Houston has kept rates effectively flat since 2014 because of growth.
"If you think about it, first, we've only got about $300 million of maturities in 2027." — Christopher Foster (CFO)
Scale of transmission CapEx brownfield vs greenfield
Q (Richard Sunderland · Truist): He asked whether the transmission CapEx for Batch One will scale ratably or differ between brownfield and greenfield work, and whether they have actions to reduce regulatory lag on cash and earnings.
A: They said it does not scale ratably—brownfield work is much more efficient but there will be a need for new greenfield import lines as load grows. They also said they are exploring non-wires alternatives, expect an upward bias to future transmission CapEx as brownfield opportunities are exhausted, plan a 3-year Minnesota rate case to use forward test years, and are discussing interim recovery of transmission investments with stakeholders to reduce lag.
"It's clearly much more efficient to construct brownfield and there is going to be a need for new greenfield import lines." — Jason Wells (CEO·CHAIR)
Ohio sale and CapEx allocation
Q (Anthony Crowdell · Mizuho): He asked whether the 14% rate base CAGR removes the Ohio LDC sale and how they decide where to allocate CapEx across electric, distribution, transmission, and gas.
A: They confirmed the Ohio sale has been removed from the rate base CAGR. They said they don't pick winners but facilitate economic growth, advancing investments on both distribution and transmission to move quickly for customers, with an upward bias to electric CapEx while continuing pipeline modernization on the gas side.
"Anthony, simple answer there is we have removed the Ohio sale." — Christopher Foster (CFO)
Temporary generation timing and Batch Zero confidence
Q (Ross Fowler · BofA): He asked whether temporary generation would be leased or sold and the timing of that decision, and why management is confident in the 10 gigawatts in Batch Zero ahead of the audit resolution.
A: They said they are keeping options open: there is an existing sublease opportunity through 2029 for ongoing cash flow or an outright sale for upfront cash, and the units will return by the end of March 2027. They said their confidence in the 10 gigawatts comes from long customer engagement—many customers had been working on projects for 1 to 1.5 years and were already pursuing the audit elements, so they could provide the evidence needed.
"Timing wise, again, these units are currently serving the San Antonio area and would be coming back to us by the end of March of 2027, is the way to think about that timing." — Christopher Foster (CFO)