Constellation Energy Corp Q1 FY2025 earnings call

• Joe Dominguez thanked the team for a strong operational and financial start. - Highlighted the favorable market environment for data center demand and Constellation's strategic advantage. - Discussed progress on the Calpine acquisition, with teams working towards closing and integration. - Nuclear plants had strong performance, with 94.1% capacity factor and three refueling outages averaging 24 days. - PJM recognized Constellation's nuclear projects for accelerated interconnection. - Crane Clean Energy Center progress, with over half of permanent employees hired and operator classes underway.

Nuclear performance was strong, producing over 41 million megawatt hours of reliable, available, and emissions-free generation from nuclear plants with a capacity factor of 94.1%. Renewables and natural gas fleet performed well with 96.2% renewable energy capture and 99.2% power dispatch match. The commercial team was off to a strong start, creating value by optimizing the portfolio and locking in higher than average margins. Nuclear contributed significantly, with GAAP earnings of $0.38 per share and adjusted operating earnings of $2.14 per share for the first quarter.

• Reaffirmed full-year operating EPS guidance range of $8.90 to $9.60 per share. - Calpine will add at least $2 in EPS and $2 billion of free cash flow before growth starting next year. - The nuclear PTC provides inflationary protections, with estimated inflation adjustment for 2025 between 2.3% and 2.6%, leading to earlier step-up in prices and incremental revenues.

• Macro-economic factors affecting stock price. - Potential recession impacts on power prices, though nuclear PTC provides downside protection. - Tariff environment impacts on O&M (negligible) and CapEx (1%-2% impact for 2025-2026). - Regulatory uncertainties related to behind-the-meter configurations and FERC proceedings affecting interconnection speed and clarity.

Q: Jeremy Tonet asked about progress towards long-term customer agreements and need for policy clarity.

A: Joseph Dominguez said policy clarity would be welcome, but customers are pivoting to front-of-the-meter with utilities as interconnection process speeds up.

Q: Steve Fleishman inquired about new power agreements, pricing, and IRA impact on nuclear credits.

A: Joseph Dominguez said pricing is consistent with cost of new entry, wires charges not borne by Constellation, and IRA has strong support for nuclear with 38 congressmen supporting tax credits.

Q: David Arcaro asked about behind-the-meter opportunity and power prices.

A: Joseph Dominguez said discussions are in front-of-the-meter due to clarity, but behind-the-meter will still be needed for large data centers, and power prices are manageable using demand response and other tools.

Q: Paul Zimbardo asked about deal timelines and utility interconnection studies.

A: Joseph Dominguez said deals are at good stages, and utility interconnection studies are taking months instead of years.

Q: Angie Storozynski asked about data center demand shift and Illinois power prices.

A: Joseph Dominguez said data center demand is evolving, with geographies broadening, and no specific opposition in Illinois, but data centers are going where they can connect easiest.