North American Utilities Weekly: 2Q26 Previews; Affordability Concerns Percolate Amidst IURC & NJ Reports, PJM Capacity Auction; WMB BTM Funding; Sentiment Check; News Flow; Comps; Utilities Lead

Research evidence excerpt

North American Utilities Weekly: 2Q26 Previews; Affordability Concerns Percolate Amidst IURC & NJ Reports, PJM Capacity Auction; WMB BTM Funding; Sentiment Check; News Flow; Comps; Utilities Lead

ning dynamics and reinforcing the need for continued

constructive regulatory progress, consistent with our positive outlook on power

fundamentals. Overall, we continue to see IPPs in prime position to deliver flexible

commercial solutions to meet both near- and long-term demands.

• NiSource Inc.: IURC affordability report launches ROE and tracker investigations.

Today’s IURC session and affordability report launched formal ROE and tracker

investigations under the HEA 1002 multi-year rate plan framework. The report,

following 10 statewide listening sessions and ~2,200 public comments, directs utilities

to double shareholder-funded customer assistance commitments and improve

transparency around large load customer investment benefits flowing to existing

ratepayers, while flagging tracker and ROE structures as ripe for recalibration under the

new multi-year rate plan cadence. Investor feedback screens mixed, with bulls arguing

lower ROEs and tracker scrutiny already priced in over recent weeks, with incremental

GenCo contracting wins more than offsetting any manageable rate adjustment. Bears

argue that the report’s specificity and actionable directives signal genuine regulatory

intent rather than political cover, with near-term uncertainty likely to weigh on sentiment

until investigation outcomes clarify the magnitude of any ROE or tracker reset. Overall,

while we appreciate possible downside risk to NI associated with ROE and tracker

investigations, we see the recent sell-off as overdone. Further, GenCo’s contracted