Utilities Sector

• 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.

• Entergy Corporation, an integrated energy company engaged in electric power production and distribution, released a largely positive third-quarter earnings report, showcasing strong financial performance and strategic progress in regulatory and business matters.
• The company reported an adjusted earnings per share of $1.53, prompting it to narrow the 2025 guidance range upwards by $0.10 at the lower boundary due to solid results and strategic flex spending.
• This financial robustness underpins the company’s sustained confidence in its long-term growth outlook which projects an annual EPS growth rate of greater than 8% through 2029.

• American Electric Power’s (AEP) third-quarter 2025 performance and future outlook reveal a complex picture of opportunity and strategic evolution within the electric utility sector.
• The company’s emphasis on infrastructure investment and ambitious growth projections reflects both its current successes and anticipated challenges.
• On the positive side, AEP reported third-quarter operating earnings of $1.80 per share ($963 million), setting a potential trajectory towards the upper half of its 2025 guidance range of $5.75 to $5.95 per share.

• On the 10th December 2024, ReNew Energy Global (RNW US), an Indian renewable energy play, announced US$7.07/share NBIO. The bidding consortium subsequently bumped terms to US$8/share on the 3rd July.
• After shares traded through terms for a week, the Consortium increased (best & final) non-binding terms to US$8.15/share, a 29% premium to undisturbed. The Offer is via a UK Scheme.
• That last bump was on the 10th October. JERA, with 11.7% of shares out, and 25.7% of minorities, is supportive, IF terms are firmed. The Special Committee is still mulling.

• Maynilad Water Services (MWS) raised around US$520m in its Philippines IPO.
• MWS is a leading global water utility player operating the largest concession by population served within a single concession area in the Philippines and Southeast Asia (SEA), as per GlobalData.
• We have looked at the past performance in our previous note. In this note, we talk about the trading dynamics.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Energy Solutions, Adani Ports, Bharti Airtel
• UST yields declined c. 3 bps across the curve yesterday as treasuries advanced amid a slump in risk assets, with the yield on the 2Y and 10Y UST falling to 3.58% and 4.09%, respectively.
• Equities retreated, after several Wall Street chief executives expressed caution about stretched valuations.

• We now expect the privatisation of ENN Energy (2688 HK) to be completed by mid-2026, given that the pre-conditions are yet to be satisfied.
• For 3Q25, the gas sales volume of ENN Energy has picked up. Meanwhile, net profit for ENN Natural Gas has also recovered. Both results are positive.
• Incorporating our latest timetable estimate, EPS forecasts, and adjusted undisturbed PERs, ENN Energy is valued at HK$67.40-72.16, meaning the share price is at 0.4% to 7% discount.