Persistent Negative Free Cash FlowNegative free cash flow across multiple years signals that capex is outpacing operating cash generation. Over time this increases reliance on debt/equity financing, raising financing costs and execution risk if markets tighten, and could constrain flexibility for dividends or incremental investments.
Material Regulatory Refund ExposureA potential $2.5bn ROE refund represents a large, structural regulatory cash liability. Even if coordinated with rate filings, such refunds can erode capital available for investment, increase regulatory scrutiny, and create ongoing uncertainty about recoverability and allowed returns across jurisdictions.
Rising Depreciation And Financing CostsSustained increases in depreciation and interest expense compress regulated margins because higher non‑fuel costs reduce net income earned on the rate base unless fully recognized in rates. Combined with regulatory uncertainty (e.g., Kentucky, PJM) this can delay or dilute the earnings benefits of capex over multiple years.