North America Power & Utilities "AGA Conference Takeaways" Appicelli

Research evidence excerpt

North America Power & Utilities "AGA Conference Takeaways" Appicelli

financial update to address capex, long-term growth rate,

financing and will reflect IRP generation needs.

Atmos Energy Corp. (ATO)

APT tailwind is real but transitory: Current APT economics are constrained to this

fiscal year with pricing supported by temporary takeaway bottlenecks; as new

capacity comes online, spreads normalize, creating a ~$0.15–$0.20 headwind into

next year though mgmt is confident in overcoming.

Growth durability improving despite APT roll-off: Recent guidance benefits from a

one-time uplift, but increased confidence in Texas legislative support (HB 434)

helps offset APT normalization and supports rebasing off a higher earnings base.

Capex growth supported by structural demand and system rebuild: Investment is

driven by strong customer additions and rising load (50k+ annual adds, heavily

Texas-weighted) alongside a long-cycle modernization program (~1,000 miles

replaced annually across ~80,000-mile system) and continued system expansion

(pipeline builds, interconnects, capacity upgrades), supporting sustained rate base

growth.

Affordability manageable, funding disciplined: Bills are growing ~7.5–8%

annually but remain a modest share of customer spend (below electric), while

continued use of forward equity issuance supports balance sheet flexibility and de-

risks the capital plan.

CMS Energy Corp. (CMS)

Regulatory backdrop constructive, cadence unchanged: Strong relationships and a

solid track record limit noise created from ALJ/staff, but absent a broader IRM

(including O&M, likely legislative), expect the annual GRC cycle to persist.

Data center upside real but not yet embedded: Opportunity is viewed as when not