PowerPoints: Retail; Moody's Credit Chat, ES, PJM Backstop Auction, FERC

Research evidence excerpt

PowerPoints: Retail; Moody's Credit Chat, ES, PJM Backstop Auction, FERC

USA | Power & Utilities EquityMayResearch20, 2026

Exhibit 1 - US Utilities Dividend Yields vs 10YrPowerPoints: Retail; Moody's Credit Chat, ES,

PJM Backstop Auction, FERC US Treasury Bond Yields

Moody's fireside chat focused on recent downgrades/outlook changes. ES

consumer advocate complaints and Aquarion sale improbable. PJM pulls back

backstop procurement to Sept. 2026, procurement target likely much lower

than original 15GWs. .

Source: Bloomberg

Cautious read for utilities valuation: but likely

PJM Board Update: Reliability backstop procurement timeline goes back to Sept. 2026; expect more of a statement on where the wider

lower procurement target; positive data point for IPPs. The PJM Board sent a letter to its equity market is relative to credit.

stakeholder indicating it plans to accelerate the centralized procurement to September 2026, rather

than waiting until March 2027 as proposed under the current PJM draft plan, citing heightened

reliability risk. A positive data point as resolving the backstop procurement auction in Sept. vs. waiting

until 2027 will remove some overhang on IPPs. In addition, procuring only the short fall from the upcoming

auction (2028/29) should result in lower GWs vs. procuring estimated shortfall through summer 2029.

Positive IPPs.

PJM kicked off the backstop procurement process with an initial 14.9GW (UCAP) target last month,

which was calculated as a difference between the Total Adjustments to Summer Peak Load (MW) for

summer 2029 minus summer 2026. Using the upcoming 2028/29 auction shortfall as the procurement

target would be solving for the capacity shortfall for summer 2028. Based on PJM's Total Adjustment