Utilities Sector

• Public Service Enterprise Group (PSEG) delivered a solid financial performance in the third quarter of 2025, showcasing both resilience and strategic progression.
• The company reported net income of $1.24 per share, an increase from $1.04 in the same period last year, and non-GAAP operating earnings of $1.13 per share, compared with $0.90 per share in 2024.
• The improved performance was notably driven by the impact of the October 2024 electric and gas base distribution rate increase, which enabled PSE&G to recover returns on prior capital investments exceeding $3 billion.

Rubis announced that it has been issued a total fine of €65m by the French Competition Authority for anticompetitive practices in the supply, storage and distribution of petroleum products in Corsica during 2016 to 2022. The company denies violating the competition law and plans to appeal the decision.

• Equatorial Energia is a key player in the Brazilian electricity sector, distinguished by its proven expertise in acquiring and turning around underperforming distribution assets, driving operational efficiency and growth.
• The company is pursuing a multi-utility strategy, diversifying from its core electricity distribution business into renewable generation, transmission, and sanitation, creating new avenues for growth and value creation.
• Key challenges include navigating Brazil’s complex regulatory environment, managing high leverage from its acquisitive strategy, and addressing execution risks associated with integrating new assets and ventures in different sectors.

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• SG Mart is rapidly expanding its B2B marketplace for building materials, primarily focusing on steel, with an aggressive growth strategy aiming to capture a significant share of the large and fragmented Indian market.
• The company benefits from the strong backing of the APL Apollo Group, providing it with industry relationships, funding, and brand leverage for its B2C distribution.
• Key risks include the highly competitive nature of the steel trading industry, which operates on thin margins, and the volatility of steel prices, which can impact profitability.

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• Existential Threat from Wildfire Litigation: The company faces monumental challenges following the August 2023 Maui wildfires. A global settlement has been reached in principle, with HEI’s portion being approximately $1.99 billion to resolve tort claims. While this provides a path forward, the financial overhang is severe and will require significant financing, pressuring the balance sheet for years.
• Operational and Financial Restructuring: In response to the crisis, HEI has suspended its dividend, sold non-core assets, and is intensely focused on wildfire mitigation and grid hardening, with a planned investment of $400 million from 2025-2027. Credit rating agencies have downgraded the company to below investment grade, reflecting the heightened risk profile, although recent positive legal developments have led to some upgrades and a more stable outlook.
• Regulated Monopoly with a Cloudy Future: As the provider of electricity to 95% of Hawaii’s population, HEI operates as an essential monopoly. However, its future is contingent on navigating the settlement financing, maintaining regulatory support from the Hawaii Public Utilities Commission for cost recovery and investments, and successfully executing its wildfire safety strategy to prevent future catastrophes.

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• IDACORP, Inc.’s latest earnings call presented a mixed bag of developments as it navigates growth and energy transition challenges.
• The company reported a positive quarter, with a noticeable increase in its EPS, rising to $2.26 from last year’s $2.12 for the same period, supported by higher retail revenues resulting from a rate change and customer growth, despite experiencing lower usage per customer.
• The year’s first three quarters delivered a cumulative EPS of $5.13 compared to $4.82 in the previous year, driven by a significant increase in additional tax credit amortization.

• CMS Energy has showcased a strong operational, regulatory, and financial performance in its third quarter for 2025, marking it as a period of noteworthy achievements and strategic progress.
• From a regulatory perspective, the company secured favorable outcomes that augment its long-term plans, such as the approval of a Renewable Energy Plan which includes 8 gigawatts of solar and 2.8 gigawatts of wind projects through 2035.
• This aligns well with Michigan’s clean energy regulations and positions CMS Energy favorably within a progressive regulatory environment.

• The Southern Company recently reported strong financial results for the third quarter of 2025, indicating a robust performance from its state-regulated electric and gas utilities.
• The company achieved an adjusted earnings per share (EPS) of $1.60, which surpassed prior estimates by $0.10 and reflected a year-over-year increase of $0.17.
• This positive performance was driven by strategic investments in regulated utilities, vigorous customer growth, and increased usage, despite being partially offset by milder weather, higher depreciation and amortization, and elevated interest costs.

• DTE Energy’s third-quarter 2025 earnings call highlighted both progress and challenges for the company as it navigates its path toward meeting its long-term financial and operational goals.
• The company emphasized its strategic shift towards higher-quality utility earnings and laid out a comprehensive plan for the next five years.
• Here is a neutral summary of DTE Energy’s earnings results and strategic plans: DTE Energy reported strong financial results for the third quarter of 2025, with operating earnings of $468 million or $2.25 per share.

• APA Group is a dominant player in Australia’s energy infrastructure sector, owning and operating a vast network of gas pipelines that deliver approximately half of the nation’s gas.
• The company’s business model is largely underpinned by regulated returns and long-term, capacity-based contracts, which provide relatively stable and predictable cash flows, supporting a consistent history of dividend distributions.
• APA is navigating the long-term energy transition by investing in electricity transmission and renewable energy projects, including solar and wind, while facing key risks such as a heavy debt load, regulatory uncertainty, and the long-term decline of natural gas.

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• WEC Energy Group recently reported its financial results for the third quarter of 2025, showcasing progress and challenges within the company.
• The company announced earnings per share of $0.83 for this quarter, signaling a year-over-year improvement when compared to adjusted earnings from the same period last year.
• For the full year, WEC Energy Group reaffirmed its earnings guidance, predicting a range between $5.17 and $5.27 per share, assuming normal weather patterns continue for the remainder of the year.

• Altus Power is a leading independent developer, owner, and operator of commercial-scale solar generation and energy storage assets in the U.S., capitalizing on the accelerating corporate and public sector demand for clean energy.
• The company exhibits a strong growth trajectory, evidenced by a 3-year revenue CAGR of nearly 40%. However, this growth is capital-intensive, resulting in consistently negative free cash flow and volatile net income.
• Strategic partnerships with Blackstone and CBRE provide significant competitive advantages, offering access to capital and a vast portfolio of potential customer sites. The company is currently undergoing a strategic review to maximize shareholder value, which could result in a change of ownership.

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• Calpine Corporation is the largest generator of electricity from natural gas and geothermal resources in the United States, with a fleet of 79 energy facilities representing over 27,000 megawatts of generation capacity.
• The company is positioned for a strategic combination with Constellation Energy, which entered into a definitive agreement to acquire Calpine in January 2025. This transaction will create the nation’s largest producer of clean and reliable energy.
• Calpine is strategically focused on capitalizing on the growing demand for reliable power, driven by the expansion of data centers and broader electrification, while also investing in decarbonization technologies.

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• CMS Energy represents a classic regulated utility investment, offering stable, predictable cash flows from its electric and natural gas operations in Michigan, which serve as the foundation for consistent dividend growth.
• Significant long-term growth is driven by a dual-engine strategy: substantial capital investment in grid modernization and a leading role in Michigan’s clean energy transition, targeting 100% clean energy by 2040.
• Emerging opportunities in serving large-scale, energy-intensive data centers provide a potential upside to load growth forecasts, complementing the company’s established strategic initiatives.

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• DTE Energy is well-positioned to deliver stable, regulated earnings growth, driven by a substantial multi-year capital investment plan focused on grid modernization and clean energy transition.
• The company’s constructive relationship with regulators and its large, stable customer base in Michigan provide a predictable operating environment, underpinning its long-term 6-8% EPS growth target.
• While the company carries a significant debt load and faces risks associated with the phase-out of certain tax credits, its consistent dividend history and strategic investments in growth areas like data center power supply offer a balanced risk-reward profile for investors.

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• EDP is a major European utility aggressively expanding its renewable energy portfolio, positioning itself to capitalize on the global energy transition. Its strategic plan focuses on significant investments in wind and solar, particularly in North America and Europe.
• The company’s financial strategy relies on a combination of operating cash flow, significant asset rotation, and manageable debt to fund its ambitious growth. While this supports expansion, it also exposes the company to execution and market risks.
• A balanced risk profile is supported by a large base of regulated and long-term contracted assets, providing a degree of earnings stability. However, the company faces headwinds from volatile wholesale power prices, rising interest rates, and regulatory risks in its key markets.

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• OGE Energy Corp. reported a strong third-quarter performance with consolidated earnings of $1.14 per share.
• The electric company, part of OGE Energy, contributed $1.20 per share, while the holding company incurred a loss of $0.06 per share.
• The company’s results were driven by operational excellence, customer focus, and positive regulatory outcomes.

• Privatization by CPPIB: Pattern Energy Group (PEGI) was an independent power producer that was taken private in a transaction that closed in March 2020. The Canada Pension Plan Investment Board (CPPIB) acquired the company for $26.75 per share in an all-cash deal, valuing the enterprise at approximately $6.1 billion, including debt. Consequently, PEGI shares are no longer traded on public exchanges.
• Integrated Renewable Energy Platform: Concurrent with the acquisition, CPPIB and Riverstone Holdings combined Pattern Energy’s operating assets with Pattern Development’s project pipeline. This created a vertically integrated renewable energy company, positioning the new private entity to capture growth from both developing and operating wind, solar, and transmission projects across North America and Japan.
• Strong Growth Trajectory Under Private Ownership: Since the 2020 privatization, Pattern Energy has continued to expand its portfolio, developing 5.6 GW of new projects. The company is advancing a significant development pipeline of over 25 GW, including the landmark SunZia Wind and Transmission project in the U.S. New institutional investors, APG and Australian Retirement Trust, have recently joined CPPIB, signaling strong backing for its future growth.

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• Xcel Energy’s third quarter 2025 earnings results and accompanying strategic outlook offer a mixed picture with both positive developments and challenges.
• On the financial front, Xcel Energy reported a GAAP earnings per share of $0.88, with ongoing earnings of $1.24 per share after excluding a nonrecurring charge of $0.36 per share related to a settlement for the Marshall wildfire.
• This nuanced adjustment in financial reporting is crucial for investors to comprehend the real operational performance of the company.

Rubis has provided an encouraging Q325 trading update that once again underscores the benefits of the company’s diversified business model and the defensive nature of its stock. Against the backdrop of volatile commodity prices and adverse forex moves the company reported a 3% y-o-y reduction in total revenues to €1,581m, supported by a 6% increase in volumes in its key Retail and Marketing division, which in turn saw broadly flat revenues and a 9% rebound in gross margin. Rubis reaffirmed its FY25 guidance, noting strong operational momentum. We have tweaked our estimates slightly, maintaining our valuation at €37.0/share.

• NiSource Inc.’s recent earnings call highlighted several significant developments and strategic initiatives that may influence investment perspectives on the company.
• From a financial performance standpoint, NiSource reported a third-quarter adjusted EPS of $0.19, resulting in a year-to-date total of $1.38.
• In terms of guidance, the company reaffirmed its upper half of 2025 adjusted EPS guidance of $1.85 to $1.89 and announced 2026 consolidated EPS guidance of $2.02 to $2.07.