President and Chief Executive officer at PPL
Thank you, Andy, and good morning everyone. Welcome to our fourth quarter and year-end investor update. We'll keep our remarks brief this morning given the comprehensive update we shared with you on January 11th. We continue to be extremely excited for PPL's bright future and the value we intend to deliver for our customers and shareowners.
Turning to Slide 4, 2022 was a remarkable year in PPL's history, one that has completely redefined our company. It marks the beginning of a new era as we are now positioned as a premier pure-play U.S.-regulated utility holding company.
Our strategic repositioning began with the sale of our U.K. business in 2021 and concluded in May of 2022 with the addition of Rhode Island Energy and its almost 800,000 customers. I'm very proud of the execution from our team to close this transaction and complete the transition activities to date with National Grid.
We are on schedule to complete all of the TSAs in 2024 as originally planned. The acquisition of Rhode Island Energy also enhances our scale and enables PPL to be a leader in our sector for years to come. This includes positioning our company to deliver top-tier 6% to 8% earnings and dividend growth through at least 2026, with one of the best credit profiles in our sector, our balance sheet can support our growth without equity issuances throughout the planning horizon.
And while we executed on our strategic repositioning, we remain steadfast in our pursuit of delivering excellent financial and operational results in 2022. First and foremost, we achieved ongoing earnings of $1.41 per share, beating the midpoint of our forecast, which we had increased in November.
This is a fantastic accomplishment considering all the extra work our teams completed this past year in connection with our strategic repositioning. In addition to delivering solid financial results, we also laid the groundwork for capital investments we need to make for years to come, in our pursuit of delivering an exceptional customer experience at an affordable price.
Specifically, we presented a balanced investment plan in Kentucky to replace nearly 1,500 megawatts of retiring coal generation. This plan best positions our utilities in Kentucky to serve our customers with safe, reliable, affordable and sustainable energy while the state fosters significant economic development and growth.
We also designed a series of plans for our newly acquired Rhode Island Energy, strategies to deliver the energy grids necessary to achieve the state's impressive clean energy goal of 100% renewable energy by 2033. These plans include advanced metering, grid modernization and our first infrastructure safety and reliability plans under our ownership. These plans emphasize just some of the robust investment opportunities at our utilities.
We're also looking at potential regulated investment opportunities beyond our four utilities, leveraging our expertise in transmission development to open new doors for potential growth. This includes our strategic partnership with WindGrid, an Elia subsidiary, where we are exploring offshore transmission solutions in New England. Any investment opportunity stemming from this partnership, are not included in our capital forecast and represent potential upside to our long-term growth plan.
On the operational front, during 2022, we maintained our top quartile reliability in Pennsylvania and Kentucky, despite the increased frequency and severity of storms in our service territories. And in just a few months of ownership, Rhode Island Energy has experienced a marked improvement in reliability and exceeded 2022 expectations by more than 10%.
One example of this excellent performance was during Winter Storm Elliott. Rhode Island Energy was the first major New England utility to achieve full customer restoration in the early morning of Christmas Day.
We also maintained our top-quartile customer satisfaction at PPL Electric Utilities and Kentucky Utilities. And while we're proud of these achievements, we are sympathetic to the concerns of our Pennsylvania customers who experienced increases in their December bills as a result of higher energy prices.
While we don't control the price of electricity supply, we know that it can have a meaningful impact on our customers. And while the default rate for PPL Electric's non-shopping customers increased in December, many of our customers who have chosen third-party suppliers saw even higher price increases and are paying significantly more than our default rate of approximately [Indecipherable].
Our most recent review of shopping results found that in November, over 40% of our residential shopping customers paid a higher rate than our default rate. Over 100,000 customers paid a rate between 25% and 100% more than the default rate and nearly 20,000 customers paid more than double our default rate.
For the last two years, PPL Electric has been a vocal advocate, on behalf of our customers, for greater safeguards and other actions to protect them from overpaying for their electricity supply. We proposed various consumer protection reforms with our Pennsylvania legislators and regulators and are again having discussions with them for the benefit of our customers.
In addition to higher bills from these increased energy prices, a large number of our PPL Electric Utilities customers received estimated bills in December due to a technical issue. The timing of higher electricity bills and the increased number of estimated bills created some confusion and concern for customers.
We have since fixed the technical issue and have temporarily doubled the resources at our call centers to address customer questions and significantly reduce call wait times. And in further support of our customers, we've waived late fees and expanded our no-shutoff practice over the winter to include all residential and small business customers.
We're also focused on communicating even more with our customers about high energy prices and what customers can do to minimize their energy bills. While this is an important topic for us and our customers that I wanted to address today, I want to be clear that we do not expect this matter to have a significant impact on our financial results.
As we've discussed at length, one of the key aspects of our strategy is to drive operating efficiencies across the entire business. In developing our strategy, we anticipated affordability being a key area of focus for customers and regulators, even before we saw the effects of inflation and high commodity costs. We all know the energy grids need significant investment to ensure reliability and resiliency while preparing for renewables, DERs and more electrification. This is why our plan best positions PPL to achieve our goals while focusing on affordability for our customers.
Turning to Slide 5, PPL's outlook for 2023 is one that is simply focused on executing our utility of the future strategy. In my 2022 recap, I discussed that we are on track with our integration activities with Rhode Island Energy. An obvious top priority for 2023 is to remain on track with our Rhode Island integration, setting us up for completion in 2024. We have a $2.4 billion capital plan that improves the safety, reliability and resiliency of our networks while addressing our customers' evolving needs. We're on track to deliver the first leg of our $175 million O&M savings target by 2026 with $50 million to $60 million of savings in 2023 as we deploy our playbook and continue to optimize our operations.
These savings will provide a strong basis for us to deliver the midpoint of our 2023 earnings forecast of $1.58 per share. Recall, this forecast represents a 7% increase from our pro forma 2022 forecast of $1.48 per share. We will also focus on the regulatory filings in Kentucky and Rhode Island to deliver lease cost and reliable energy for our customers and help to advance the clean energy transition.
Turning to Slide 6, as we executed our strategic repositioning over the past few years, we took a hard look at how we wanted to be defined as a company and management team. Simply put, we want to be the best utility company in the U.S., the best at delivering safe, reliable, affordable and sustainable energy to our customers and competitive long-term returns to our shareowners. We've included on the right side of the slide, the categories that we'll use to measure our success against our peers.
In short, we will be targeting top decile or top quartile performance and safety, reliability, customer satisfaction and cost efficiency, while at the same time, targeting a premium stock valuation. While we're not there yet in all categories, I firmly believe we are on the right path to get there. And I'm excited to see us advance down this path.
With that, I'll now turn the call over to Joe for the financial update. Joe?