PPL opened 2026 with ongoing earnings of $0.63 per share, up $0.03 year over year on higher Kentucky base rate recovery and transmission revenues, and reaffirmed its full-year guidance of $1.90-$1.98 along with its long-term growth and dividend targets. The quarter featured a constructive Pennsylvania distribution rate case settlement holding bill increases under 4% across all classes, new Kentucky generation collaborations with Rye Development (pumped storage hydro) and X-energy (small modular nuclear), and over $330 million of approved Rhode Island ISR investments. PPL also executed a $1.15 billion equity units offering to de-risk about two-thirds of its equity needs and signaled growing momentum on its Blackstone joint venture, with a meaningful announcement expected this year.
Good morning, and thank you for joining PPL Corporation's conference call on first quarter 2026 financial results. We provided presentation materials on the investor section of our website. This morning, you'll hear 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, please turn to slide two for our cautionary statement. Today's presentation contains forward-looking statements subject to risks and uncertainties. Actual results may differ materially. Please refer to our SEC filings in the appendix for additional information. We'll also refer to non-GAAP measures, including earnings from ongoing operations. Reconciliations to the corresponding GAAP measures are provided in the appendix. I'll now turn the call over to Vince.
Thank you, Andy, and good morning, everyone. Let's begin on slide four with an overview of our first quarter performance. Overall, we delivered strong financial and operational results in the first quarter, reflecting disciplined execution across the enterprise. Today, we reported first quarter GAAP earnings of $0.60 per share. Adjusting for special items, ongoing earnings were $0.63 per share. Based on these results and our outlook for the remainder of the year, we are reaffirming our 2026 ongoing earnings guidance of $1.90-$1.98 per share, with a midpoint of $1.94 per share. We also remain on track to complete approximately $5.1 billion of planned investments in 2026, supporting the delivery of safe, reliable, and affordable energy for our customers.
Longer term, we continue to project approximately $23 billion of capital investment through 2029, resulting in average annual rate base growth of 10.3%. This capital projection excludes any investments that may stem from our joint venture with Blackstone, which I'll provide an update on shortly. We're also reaffirming our long-term financial targets, including 6%-8% annual EPS growth through at least 2029, with compound annual growth expected near the top end of that range. We also continue to target annual dividend growth of 4%-6%, along with strong credit metrics throughout our plan period, which support a very compelling risk-adjusted total return for our share owners. Overall, our quarterly results position us well to deliver on our 2026 targets and beyond. Moving to slide five and some notable regulatory and business updates.
During the quarter, PPL Electric Utilities reached a constructive settlement with the majority of the interveners in the distribution base rate case. We filed this rate case in the third quarter of last year, following more than 10 years since our last base rate case filing. Our filing reflected the results of effective cost efficiency and prudent investments over that period that have delivered significant value for our customers while keeping O&M increases 25% below inflation. The settlement achieves a balance between our strong commitment to affordability and maintaining safe and reliable service for our customers while supporting the significant demand growth in our service territory with large load customers. Importantly, the settlement would result in bill increases that are less than 4% across all customer classes despite staying out for those 10 years, and it keeps our delivery rates among the lowest in the state.
We've also agreed to a two-year stay out following implementation of the new base rates. The settlement also enhances support for vulnerable customers by increasing hardship fund bill credits, improving access to assistance programs, eliminating reconnection fees, streamlining return of security deposits, and boosting the annual low-income weatherization budget. We also created a new large load customer rate class and electric service tariff that includes key protections for our other customers, such as a 10-year load requirement and various financial commitments. The proposed tariff and rate class would also provide approximately $11 million annually in support of our residential low-income programs. Put together, the elements of this settlement would provide tremendous value for our customers by ensuring they receive safe, reliable, and affordable electric service. On April 17th, we were pleased that the administrative law judges recommended approval of the settlement without modification.
We expect the final decision from the Pennsylvania PUC by the end of June, with new rates effective July 1st. In Kentucky, LG&E and KU were granted reconsideration of decisions made by the Kentucky Public Service Commission regarding its base rate case earlier in Q1. As discussed in February, we expect the current decision by the KPSC will allow us to deliver on our overall plan objectives. However, as outlined in the reconsideration request, we continue to believe, along with many of the interveners, that our negotiated settlement was a better outcome for all parties, including our customers, and it should not have been modified. The reconsideration focuses on a limited number of substantive issues, including such modifications the KPSC made to the settlement and certain cost recovery and return determinations. Importantly, while LG&E and KU's petitions were granted rehearing by the KPSC, all intervener requests were denied.
A procedural schedule has been set by the KPSC, with the additional discovery projected to conclude by May 22nd. Parties have until May 26 to request a hearing or to ask for a decision based on the record in the case. We hope to get a decision by the KPSC in the third quarter. In Kentucky, we're excited to announce a couple of new partnerships to explore innovative generation technologies in support of the increasing electricity demand in our service territory. Last month, we announced our partnership with Rye Development to evaluate a new 266 MW pumped storage hydro project that Rye has been working on in Bell County. The project converts former coal mine land in Eastern Kentucky into a reliable energy storage facility, providing up to eight hours of storage upon COD, currently projected for 2031.
Rye has secured preliminary federal permits at this stage, with final licensing projected for the second quarter of 2027. The project's initial cost estimates are approximately $1.3 billion, which excludes potential eligibility for a 50% investment tax credit. This project is not in our current capital plan or earnings projections. If constructed, this would be the first project of its kind in Kentucky and one of the first newly built pump storage projects in the United States in more than 30 years. I'm also excited to highlight our collaboration with X-energy, a leading designer of advanced nuclear reactor technology and manufacturer of advanced nuclear fuels, which we announced just last week. This collaboration will explore deploying X-energy's Xe-100 small modular reactor in Kentucky to support large load customers, including data centers with long-term, reliable, and carbon-free electricity.
Through this collaboration, we aim to support the significant activity and interest in Kentucky to explore nuclear generation, bolstered by some recently enacted legislation supporting nuclear development. This legislation supports early site development through a $75 million grant program that helps fund development costs for up to three sites across the state at $25 million per site. It also enables utilities to apply for recovery of other early site work that is not covered by the grant program. We currently expect early site permitting will cost less than $75 million to complete, most of which is anticipated to be funded through the grant process as well as our project partners. As you would expect, we're approaching potential new nuclear development in Kentucky with a disciplined, phased approach.
That means starting with early-stage evaluation and site readiness work closely aligned with state policy support, clear customer demand and financial support, particularly from large load customers and cost recovery frameworks that protect customers and share owners. Any decision to move forward would be gated by economics, regulatory certainty, and our long-standing commitment to capital discipline. Both the Rye Development and X-energy partnerships reflect innovative approaches to bring large carbon-free electricity generation to Kentucky in a manner that supports customer affordability and long-term system reliability as electricity demand continues to grow. Turning to Rhode Island updates on slide 6. Rhode Island Energy received approval for over $330 million of critical infrastructure investments through its latest annual electric and gas ISR plans. The approval represents the vast majority of what the company requested in its original filings.
Recovery of and on these investments began on April 1st of this year, with rider recovery helping to limit regulatory lag. The latest plans fund core investment and vegetation management work to strengthen day-to-day reliability and system resilience. It's clear these investments are providing tangible benefits to customers as reflected in our excellent operational performance, including Rhode Island Energy's ongoing top quartile reliability metrics and its strong execution during this winter's major storms. During the region's most severe storm of the season in late February, which brought nearly 40 in of snow and hurricane-force winds, the Rhode Island Energy team excelled, performing better than any other utility in New England. Electric crews restored power to 99% of customers within 48 hours, while our gas crews responded to hundreds of emergency calls to ensure customers had gas service for heat during record-setting winter demand.
These efforts did not go unnoticed, as our teams were honored by the Rhode Island House of Representatives in March for their response to this historic blizzard. These results reinforce the strong connection between sustained investments and outcomes that matter most to our customers, and that's precisely what our Rhode Island base rate case is about. The rate case was filed in the fourth quarter of 2025, requesting a revenue requirement increase over two years, $181 million in year one and an additional $49 million in year two. The proceeding remains on track, with intervener testimony filed in April and evidentiary hearings planned for June and July.
New rates are expected to become effective September 1st. In addition, Rhode Island Energy recently filed a new hold harmless commitment proposal that is expected to provide bill credits that would significantly offset the impact of the proposed base rate increase for our customers. As a reminder, this proposal addresses PPL's deferred tax hold harmless commitment arising from the acquisition of Rhode Island Energy, accelerating the payment of related bill credits to support affordability in the near term. We expect new bill credits to be provided to customers starting in the first quarter of 2027. This approach is representative of how we engage across our jurisdictions, using the tools available to us to support affordability today while continuing to attract the investment needed to maintain a safe, reliable energy system for our customers. Turning to slide seven and a data center update in Pennsylvania.
Thank you, Vince. Good morning, everyone. Let's turn to slide 11. PPL's first quarter GAAP earnings were $0.60 per share, compared to $0.56 per share in Q1 2025. We recorded special items of $0.03 per share during the first quarter, primarily due to an ISO New England transmission ROE reduction, as well as customer system and meter system integration impacts, partially offset by regulatory asset treatment of costs associated with PPL's IT transformation in Kentucky. Adjusting for these special items, first quarter earnings from ongoing operations were $0.63 per share, an improvement of $0.03 per share compared to Q1 2025. The increase was primarily due to higher base rate recovery in Kentucky and higher transmission revenues from additional capital investments, partially offset by higher depreciation and higher financing costs.
Our solid first quarter results keep us on track to achieve at least the midpoint of our 2026 earnings forecast of $1.94 per share. We also continue to maintain one of the strongest credit ratings in our sector, with a balance sheet that provides the company with significant financial flexibility that benefits both customers and stakeholders. In February, we successfully executed a $1.15 billion equity units offering with a purchase contract for PPL common shares settling in February 2029. This offering provides a clear path to permanent equity while allowing participation in share price upside. Following this transaction, we have now de-risked about two-thirds of the total equity needed to support our current capital expenditure plan. For the remaining equity needs, our base plan is to utilize the ATM, which remains an efficient financing tool.
We'll also continue to be opportunistic with other equity-like financing structures to the extent that they provide a lower cost of capital. Turning to the ongoing segment drivers for the first quarter on slide 12. Our Kentucky segment results increased by $0.03 per share compared to the first quarter of 2025. The improvement in Kentucky's results was primarily due to higher base rate recovery from new retail rates that were effective on January 1. This was partially offset by lower sales volumes due to less favorable weather than experienced in Q1 2025, higher operating costs, higher depreciation, and higher interest expense. The remainder of our segments were flat compared to the first quarter of 2025. Our Pennsylvania regulated segment results were driven by higher transmission revenue from additional capital investments, offset by higher operating costs, higher depreciation expense, and higher interest expense.
Our Rhode Island segment results were driven by higher rider revenue returns, including investment recovery through the ISR mechanism and FERC formula rates. These favorable items were offset by higher depreciation expense. Lastly, results at Corporate and Other were driven by higher interest expense, offset by several factors that were not individually significant. Overall, we're off to a strong start in 2026, with solid performance across our business segments and a clear line of sight to achieve our financial objectives. Our capital investment plan remains firmly on track, positioning us to continue to strengthen system reliability, modernize the grid, and provide an improved experience for our customers. At the same time, our strong balance sheet and business plan position PPL to confidently achieve our growth targets and deliver strong, stable returns for our shareowners with meaningful upside opportunities beyond the plan. This concludes my prepared remarks.
I'll now turn the call back over to Vince.
Thank you, Joe. Before we open it up for questions, I'll leave you with a few closing thoughts. Here at PPL, we're executing with discipline, delivering strong first quarter results, reaffirming our guidance and long-term financial targets, and continuing to invest responsibly in the systems our customers and communities rely on. Across our jurisdictions, we're advancing constructive regulatory outcomes that balance affordability today with the investments needed for long-term reliability and growth. Affordability is a top priority for us, including here in Pennsylvania. We've been talking about this for over five years now and made it a cornerstone of our Utility of the Future strategy.
We are not surprised at all by what we are seeing in various states where elected officials are very focused on affordability for their constituents. That is why we have consistently taken actions to drive efficiency across the business, maintain cost discipline, employ technology to optimize our assets, and limit base rate increases, all while continuing to improve service. A perfect example is our rate case settlement in Pennsylvania, where we hadn't filed a rate case in over 10 years, and the bill impact of our settlement will be less than a 4% increase for all rate classes, which again puts our delivery rates among the lowest in the state. We don't just talk about focusing on affordability.
Our actions support our words, and we have been very effective at delivering excellent service for our customers at a reasonable price and at the same time, competitive returns for our shareowners. We fully expect to continue to deliver on both of those areas going forward. At the same time, and related to improving affordability, our economic development pipeline continues to progress, with projects moving from planning into agreements, construction and execution. That demand is supporting new investment opportunities and partnerships like those we announced with Rye Development and X-energy, focused on delivering reliable, cost-effective generation solutions that done right will lower energy costs for our customers. We're also excited by the continued momentum with our Joint Venture with Blackstone Infrastructure.
We believe it positions us very well to meet growing generation needs in PJM in a way that will lower customer bills, improve system reliability, and deliver long-term value creation for our shareowners. As you can hear, we don't view growth and affordability as competing objectives. Done right, incremental load, disciplined investment, and thoughtful generation development can improve system utilization and help lower overall customer costs. That's the approach we're taking, grounded in regulatory credibility, capital discipline, and a clear focus on delivering safe, reliable, and affordable energy while creating long-term value for our communities and our shareowners. With that, operator, let's open it up for questions.