Diversified Utilities / IPPs: 1Q26 Earnings Takeaways

Research evidence excerpt

Diversified Utilities / IPPs: 1Q26 Earnings Takeaways

IdeaMsignificant upward pressure on the ERCOT power market, while the current

ERCOT forward curve prices only 10-15 GW of load growth (and the data

center pipeline is in the hundreds of GW). The fleet is well-hedged in the

near-term

• Freestone Energy Center project progress: PUCT has approved the gas

plant's net metering agreement with a data center. CEG views this agreement

as an important signal for future collocation projects, and it appears more

broadly that the ERCOT process for approving collocated loads under SB6 is

progressing successfully. Remains on track for CyrusOne facility to be

energized in 4Q 2026.

• Data center contracting: There is a wide range of opportunities being

actively explored, and clarity in the PJM market construct is a key milestone

for further progress. Once regulatory clarity is achieved in PJM, management

was constructive on the potential pace in contracting activities, as evidenced

by the heightened level of data center activity in ERCOT following passage

of SB6 which brought significant clarity to the market

• Crane Clean Energy Center: Watch for FERC decision on proposed transfer

of gas plant Capacity Interconnection Rights (CIRs) to Crane nuclear center in

June/July.

NRG (EW) – EBITDA miss on weak ERCOT prices; Focus on long-term contracts,

with expectations to announce something quickly

• Financial results: Adj. EBITDA was $1,080m, -12% below cons. of $1,230m

(MS: $1,130m), negatively impacted by weak ERCOT power prices in the

quarter. The company reiterated all of its financial targets for 2026.

• Data center deals & new builds: Highly focused on long-term contracted

cash flows through data center deals and/or new builds. Deal conversations