PPL reported Q2 2025 ongoing earnings of $0.32 per share, down $0.06 year over year on cost timing, milder weather, and higher interest expense, but reaffirmed confidence in at least the midpoint of its $1.81 full-year forecast given stronger expected second-half growth. The quarter's headline developments were a constructive Kentucky CPCN stipulation supporting new gas generation and the newly announced Blackstone Infrastructure joint venture to build regulated-like generation for a Pennsylvania data center pipeline that grew to about 14.5 GW. PPL also settled the Rhode Island hold-harmless commitment and signaled rate-case filings across its jurisdictions.
Good morning, everyone, and thank you for joining the PPL Corporation Conference Call on Second Quarter 2025 Financial Results. We have provided slides for this presentation on the investor section of our website. We'll begin today's call with updates from Vince Sorgi, PPL President and CEO, and Joe Bergstein, Chief Financial Officer. We'll conclude with a Q&A session following our prepared remarks. Before we get started, I'll draw your attention to Slide Two and a brief cautionary statement. Our presentation today contains forward-looking statements about future operating results or other future events. Actual results may differ materially from these forward-looking statements. Please refer to the Appendix of this presentation and PPL's SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward-looking statements. We'll also refer to non-GAAP measures, including earnings from ongoing operations or ongoing earnings on this call. For reconciliations to the comparable GAAP measures, please refer to the appendix. I'll now turn the call over to Vince.
Thank you, Andy, and good morning, everyone. Welcome to our second quarter investor update. Let's start with our financial results and a few highlights from our second quarter performance on Slide Four. Today, we reported second quarter GAAP earnings of $0.25 per share. Adjusting for special items, second quarter earnings from ongoing operations were $0.32 per share. While the timing of certain expenses and milder weather than last year contributed to lower period-over-period results, as Joe will discuss in his remarks, we remain confident that we will achieve at least the midpoint of our 2025 Ongoing Earnings Forecast of $1.81 per share, as our plan assumed stronger earnings growth in the second half of 2025, resulting from higher returns on capital investments and lower O&M year over year.
We're solidly on track to complete over $4 billion in infrastructure improvements in 2025 to strengthen grid reliability and resiliency and advance a cleaner energy mix without compromising on affordability for our customers. We continue to incorporate new technology and explore the use of Artificial Intelligence in all aspects of our business, from the field to the back office, to drive better results and greater efficiency. As a result of our investments, we expect to build on our prior year's success and deliver cumulative annual O&M savings of $150 million this year compared to our 2021 baseline. We also continue to project $20 billion in infrastructure improvements from 2025 to 2028, resulting in average annual Rate Base Growth of 9.8%.
This does not include any capital expenditures that may be required under the new Joint Venture agreement with Blackstone Infrastructure to build new generation in Pennsylvania to directly serve data centers. Lastly, we're well positioned to achieve our projected 6% to 8% annual earnings per share and dividend growth through at least 2028, with EPS growth expected in the top half of that range. Throughout our plan, we expect to maintain our excellent credit profile with an FFO-to-Debt Ratio of 16% to 18% and a Holding Company-to-Total Debt Ratio below 25%. Turning to Slide Five, we have a number of positive business and regulatory updates this quarter. Let me begin with some key regulatory updates, starting with the stipulation agreement that we just filed with the KPSC earlier this week related to the CPCN proceeding to construct much-needed generation in Kentucky.
We were pleased to have announced a very constructive stipulation with many of the intervening parties to the case. The stipulation strikes the right balance between building new generation needed to support economic development in the state, including supporting anticipated data center load, and ensuring we maintain affordability for our customers. The stipulation supports approval of two 645 megawatt natural gas combined cycle units, Brown 12 and Mill Creek 6, as well as an SER for our Ghent Unit 2 coal plant, as we requested. It also supports mechanisms that reduce lag on these investments, including recommending approval of AFUDC treatment on both NGCCs during construction, as well as cost recovery of the Ghent 2 SER via our existing environmental cost recovery mechanism or the ECR.
The agreement also supports a new Tracker to recover costs of the Mill Creek 6 NGCC over the life of the plant, allowing for recovery of operating costs and returns of and on capital investments. The stipulation also supports the life extension of the Mill Creek 2 coal unit from the current retirement date of 2027 to 2031 when Mill Creek 6 is placed into service. Related to this plant life extension, the stipulation supports a new ECR-like mechanism to recover incremental O&M and capital costs required to keep Mill Creek 2 open, including any costs we incur in the remainder of this year. We also agreed to provide an analysis of operating Mill Creek 2 beyond 2031 as part of our next Integrated Resource Plan in 2027.
With the life extension of the Mill Creek 2 coal unit, the stipulation also requires the companies to withdraw the request for the Cane Run Battery Storage Project without prejudice. This means we can file another CPCN for the battery storage project at any time if needed. Should the commission approve the stipulation, we do not expect a significant change to our overall CapEx plan or Rate Base Growth projections, as we see additional investment needs across our networks that are not currently in our plan. We will provide a full CapEx and rate base refresh per normal course on our year-end call. The stipulation is subject to approval of the KPSC, and a hearing is scheduled for next Monday, August 4. We continue to anticipate a final decision by November 1 of this year. Turning to Slide Six and a few additional regulatory updates.
On May 30th, LG&E and KU filed a request with the Kentucky Public Service Commission (KPSC) for a combined $391 million increase in annual Electric and Gas Revenues to support continued safety, reliability, and resiliency investments in our systems and improve service to our customers. Our applications are supported by a fully forecasted test period ending December 31, 2026. It has been nearly five years since we saw the base rate increase in Kentucky. During the period from 2021 through 2024, the cumulative amount of inflation was 19.7%, which is significantly higher than the overall percentage increase of 10.7% that the companies are seeking in these cases. We expect a decision from the Commission by the end of the year and new rates to be effective on January 1. Turning to Rhode Island.
Earlier this month, we agreed with the Advocacy Section of the Division of Public Utilities and Carriers to settle the Hold Harmless Commitment related to our acquisition of Rhode Island Energy. In summary, the acquisition accounting resulted in the elimination of certain accumulated deferred income taxes, which resulted in an increase in Rate Base. At that time, we made a commitment that we would make bill credits that could extend nearly 40 years to hold our customers harmless from this accounting change. The settlement computed the net present value of those future Bill Credits to be $155 million. We agreed to credit our customers that $155 million in January, February, and March of 2026 and 2027. This is a very constructive solution that significantly improves affordability for Rhode Island customers when bills are at their highest in the winter, while at the same time satisfying a significant acquisition commitment.
We expect a final decision on the settlement in the coming weeks. Shifting to Pennsylvania. We now expect to file a Base Rate Case by the end of this year, our first PA Rate Case in a decade. The fact that we've been able to go so long without a base rate increase in Pennsylvania is a testament not only to the constructive regulatory framework in the Commonwealth, but also, and importantly, our strong focus on efficiency and affordability. We've created one of the most sophisticated grids in the nation in PPL Electric Utility Service Territory, and that, in turn, has driven not only substantial reliability improvements but also significant value for our customers, including the ability to quickly connect large load customers like data centers and manufacturing facilities.
Our expected rate request in Pennsylvania will support our continued efforts to strengthen the grid against future storms and incorporate advanced technology that allows us to work smarter and more efficiently while delivering a better experience for our customers. Now let's turn to Slide Seven and the exciting economic growth in Pennsylvania that is currently being powered by data centers. As we've said before, we have made it a strategic priority at PPL to serve data centers across our service territories as AI will be critical to America's continued competitiveness and national security, as well as the execution of our Utility of the Future Strategy. There are two main components to our data center strategy. First, we are enabling speed to market for the data centers by being able to connect them to the grid faster than they can get the data centers built.
Second, we are supporting several initiatives to develop new generation to serve this massive new load coming onto the grid. This includes our new Joint Venture with Blackstone Infrastructure that was announced at the inaugural Pennsylvania Energy and Innovation Summit held in Pittsburgh by Senator McCormick earlier this month. At the summit, state and federal officials, as well as technology leaders, highlighted Pennsylvania's unique position to lead the next wave of data center expansion. In total, over $90 billion of Project Commitments were announced. Our Pennsylvania subsidiary, PPL Electric Utilities, is particularly well suited to meet this demand. We've already invested $13 billion in our Pennsylvania grid since 2013, and our current Capital Plan includes another $7 billion through 2028. That means we can connect data centers as quickly as developers can build them.
It also means that we are not holding up Data Center Development in Pennsylvania, which is a clear strategic advantage. We now have about 14.5 GW of data center projects in the advanced stages of development, with nearly 5 GW being publicly announced. This includes Amazon's planned data center expansion in Pennsylvania, a data center project announced in the Carlisle area by PA Data Center Partners and Powerhouse Data Centers, and a data center announced by CoreWeave. With these advancements, we've increased the projected Transmission Capital Investment needed to meet these demands to a range of $750 million to $1.25 billion, with only $400 million included in our current $20 billion Capital Plan. Meeting this unprecedented demand growth will require an unprecedented response and will require all market participants to be part of the solution.
Thank you, Vince, and good morning, everyone. Let's turn to slide 12. PPL's second quarter GAAP earnings were $0.25 per share compared to $0.26 per share in Q2 2024. We recorded special items of $0.07 per share during the second quarter of 2025, primarily due to IT transformation costs and certain costs related to the Rhode Island integration.
Adjusting for these special items, second quarter earnings from ongoing operations were $0.32 per share, a $0.06 per share decrease compared to Q2 2024. The decline was primarily due to several anticipated factors, including the timing of certain operating costs and true-ups of about $0.03, as well as favorable weather in Q2 2024 and higher interest expense, which were about $0.01 each. As Vince mentioned in his remarks, our business plan assumes stronger growth in the second half of the year, stemming from higher returns on capital investments via formula rates, Rider mechanisms, and AFUDC, as well as lower O&M. On the O&M front, this is due to the execution of our cost-saving initiatives and the timing of certain expenses like tree trimming costs. You may recall that we invested in additional tree trimming in the fourth quarter last year in preparation for the winter.
We also incurred the bulk of our planned tree trimming budget during the spring of this year to better prepare for the summer thunderstorm season. The timing of our tree trimming costs alone is a notable driver of the timing of our earnings growth for 2025 versus 2024. Accordingly, we remain confident in achieving at least the midpoint of our 2025 earnings forecast of $1.81 per share. Moving to our credit profile, PPL's balance sheet remains among the best in our sector, and we continue to support our credit position since our last update while we fund our substantial growth. Over that period, we issued an additional $180 million of equity through the ATM, bringing the total amount issued this year to about $350 million, which includes forward contract features enabling settlement at the end of the year.
Turning to the ongoing segment drivers for the second quarter on slide 13, our Kentucky segment results were flat compared to the second quarter of 2024. Lower sales volumes, primarily due to favorable weather experienced during the second quarter of last year, were offset by several insignificant factors. Our Pennsylvania regulated segment results decreased by $0.02 per share compared to the same period a year ago. The decrease was primarily driven by higher operating costs and the timing of a transmission revenue true-up, partially offset by returns from ongoing capital investments. Our Rhode Island segment results decreased by $0.03 per share compared to the same period a year ago. Higher distribution revenues from capital investments were more than offset by the timing of certain operating costs and a number of items that were not individually significant.
Finally, results to Corporate and Other decreased by $0.01 per share compared to the prior period, primarily due to higher interest expense. In summary, we're pleased with our progress to date and are well-positioned to deliver on our commitments to shareowners. We're executing a robust business plan that supports our long-term financial targets, a plan that is underpinned by critical investments that deliver real value to our customers. At the same time, we continue to explore additional opportunities like the JV with Blackstone Infrastructure that we believe can support our growth profile over the long-term and create value for share owners. This concludes my prepared remarks. I'll now turn the call back over to Vince.
Thank you, Joe. Over this past quarter, we continued to execute our utility of the future strategy, which I believe is a real differentiator for PPL.
We're making investments to improve the reliability and resiliency of our electric and gas networks and to better protect against severe weather. With our generation investments well underway in Kentucky and the progress on our latest CPCN request, we're advancing a cleaner energy mix without compromising on safety, affordability, and reliability. Importantly, we're leading the way in innovation, incorporating new technologies in all aspects of our business, including AI, to deliver better outcomes for both our customers and shareowners. Finally, we're laser-focused on engaging with key stakeholders to strengthen resource adequacy and power economic development that benefits the regions we serve and enhances America's competitiveness and national security. Bottom line, we continue to make excellent progress on all fronts.
As our recent announcement with Blackstone Infrastructure highlights, we've positioned ourselves as a forward-looking organization committed to solving some of the most pressing challenges in today's energy landscape without losing sight of what's truly important to our customers and our shareowners. I continue to be very excited about the opportunities ahead to showcase PPL's many strengths. With that, operator, let's open it up for questions.