North America Power & Utilities: UBS Evidence Lab inside: 2Q Utility Preview

Research evidence excerpt

North America Power & Utilities: UBS Evidence Lab inside: 2Q Utility Preview

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North America Power & Utilities Equities

AmericasUBS Evidence Lab inside: 2Q Utility Preview

Electric Utilities

William Appicelli, CFA

Growth and Affordability Remain at Center, Keeping Eye on Changes in Analyst

Regulation william.appicelli@ubs.com

For the 2Q reporting season we remain focused on management's guidance on meeting +1-212-713 1414

demand growth while limiting changes to affordability for customers. We expect many Gregg Orrill

discussions on new regulatory constructs to align costs with demand and to manage Analyst

rate shock. Most companies will defer changes to growth and cap-ex guidance until Q3/ gregg.orrill@ubs.com

Q4 updates, but we do expect many project specific updates notably AEP, WEC, D, and +1-212-713 1064

CNP. Quarterly EPS growth appears to track light in part driven by weather and Steve Ludwick

regulatory lag. So far utility regulation has not collided with election year politics to the Analyst

detriment of the regulatory compact but we continue to watch NJ, PA, WI, IL, CT, CA, steve.ludwick@ubs.com

and MD for signs of change. Against this backdrop, we recommend staying the course +1-212-713 5073

and prefer Buy rated ETR, CNP, XEL, DTE and AEE. Key calls include: Allison Paik

Associate Analyst

FE (+) West Virginia could accept the company's alternative inflation and allison.paik@ubs.com

investment adjustment in place of a full rate case. To address further large load +1-212-713 1078

demand FE may require and discuss alternatives including a genco.

Maxwell Grinacoff, CFA

AEP (=) A potentially light quarter and no formal increase to the cap-ex plan but Strategist