XPLR Infrastructure (NYSE:XIFR) said it continued to simplify its capital structure and advance its repowering and energy-storage development plans during the second quarter of 2026, while reaffirming its full-year financial outlook.
President and Chief Executive Officer Alan Liu said the company completed the first minimum buyout of CEPF 5 for $150 million and used available cash to fully repay $500 million of convertible notes. The actions increased XPLR’s equity ownership in assets already in its portfolio while maintaining balance-sheet strength, he said.
Operating costs and repowering progress
Chief Financial Officer Jessica Geoffroy said results from existing projects were affected by roughly $42 million of higher net operating expenses compared with the prior-year period. The comparison was primarily driven by approximately $45 million of vendor credits recognized in 2025 for unplanned operations and maintenance expenses.
XPLR expects total operations and maintenance expense of about $500 million for the full year, a level Geoffroy said is consistent with the company’s historical average in recent years.
Improved wind conditions partly offset the expense impact. Wind resources were about 102% of the long-term average during the quarter, compared with 97% in the prior-year period, according to the company. Results also reflected asset dispositions completed in 2025.
Liu said XPLR had completed 50% of its planned 2026 repowering program as of the second quarter. The remaining work is progressing as planned, he said, and is intended to improve the portfolio’s long-term value.
Geoffroy told analysts that repowered assets are producing economics consistent with previous company disclosures. She said there are more repowered assets in the portfolio this year than last year, with tax credits from newer repowered facilities being monetized through transferability.
She also noted that adjusted EBITDA comparisons reflect the absence of higher tax-credit amounts recorded in the prior-year period through tax-equity structures that have since matured or been bought out.
Storage joint ventures move toward construction
In July, XPLR formed the Mammoth Plains Energy Storage and Carousel Energy Storage joint ventures with NextEra Energy Resources and completed associated sales of interconnection assets and rights.
Liu said the battery-storage investments are being enabled by the company’s existing surplus interconnection capacity and NextEra Energy Resources’ development capabilities. XPLR expects the projects to provide attractive returns and additional long-term contracted cash flow.
Construction on the first two storage projects could begin as early as the fourth quarter of 2026, Liu said, though the bulk of construction activity is expected in 2027.
Asked about anticipated returns, Liu said the projects are expected to produce “very attractive” double-digit equity returns, though he did not provide specific targets. He said the value of surplus interconnection rights depends on whether they are located in markets with demand for development, the viability of potential projects and the economics of those projects.
The company has an agreement with NextEra Energy Resources to identify additional interconnections that could be sold to help fund equity contributions to the storage ventures, Liu said.
Contracting and capital allocation
XPLR sees improving power-market fundamentals as a potential source of value through recontracting and contract optimization. However, Liu said most of the company’s projects remain covered by long-term agreements that generally do not expire until the early-to-mid 2030s or later.
The company expects most recontracting discussions to occur one or two years before contracts expire, meaning the larger opportunity is likely to emerge in the early 2030s. XPLR is also evaluating a limited number of earlier contract extensions or renegotiations where market conditions could support value-enhancing outcomes.
Liu declined to quantify the number of megawatts involved, citing commercial sensitivity. He said battery-storage contracts are generally expected to have long tenors, and that there is typically an interest in extending wind contracts to align them with storage arrangements.
On capital structure, Liu said a portion of the company’s roughly $500 million cash balance is held at the project level for working-capital purposes, while committed and future capital expenditures will also use cash during the second half of the year.
XPLR expects to pursue the next CEPF 5 buyout window sometime in 2027 and plans to refinance corporate notes maturing next year in the early part of 2027, according to Liu. He said the company would consider accelerating a refinancing if market conditions create an opportunity.
The company’s incentive distribution rights are currently suspended because XPLR is not making distributions, Liu said. It also has no current plans to use its renewed $300 million at-the-market equity program or issue equity, though Liu said renewing the program preserves financing flexibility.
Management said it intends to maintain leverage levels broadly consistent with current levels. Geoffroy pointed to the company’s previously issued outlook through 2030, which showed leverage remaining consistent even as XPLR adds repowering and storage investments.
About XPLR Infrastructure (NYSE:XIFR)
XPLR Infrastructure LP engages in the acquisition, management, and ownership of contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America and natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.
