Q2 2020 Southern Co Earnings Call
[music].
Good afternoon. My name is read out and I will be a conference operator today.
At this time I would like to welcome everyone to the Southern company second quarter 2020, <unk> earnings call.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question answer session.
At that time, if you have a question. Please press the one followed by the floor on your telephone.
As a reminder, this conference is being recorded Thursday July Thirtyth 2020.
I would now like to turn the conference over to Mr., Scott Gammel Investor Relations Director. Please go ahead Sir.
Thank you read up good afternoon, and welcome to Southern Company second quarter 2020 earnings call.
Do you need today, or Tom Fanning, Chairman, President and Chief Executive Officer Southern Company.
Through Adams, Chief Financial Officer.
Let me remind you will be making forward looking statements. Today. In addition to providing historical information various important factors could cause actual results to differ materially from those indicated in the forward looking statements, including those discussed in our form 10-K for 10-Q's in subsequent filings.
In addition, we'll present non-GAAP financial information on this call reconciliations to the a quick well GAAP measure are included in the financial information. They released this morning as well as the slots for this conference call, which are both available on our Investor Relations website that investor not Southern company Dotcom.
At this time I'll turn the call over to Tom.
Good afternoon, and thank you all for joining us.
As you can see for materials. We released this morning, we reported strong adjusted results for the second quarter meaningfully ahead of the estimate we provided last quarter.
While we remain within our expected annual range of Kobe related revenue impacts the second quarter impact we're not as severe as we originally estimated.
Oh boy throughout the company have worked hard to maintain excellent levels of customer service and implemented thoughtful cost containment measures of course, our peak electric load occurs in the third quarter and consistent with our longstanding practice, we will wait to address our annual guidance in October.
Before turning to the business update I want to recognize these are unusual times on multiple fronts. Our role the communities. We're privileged to serve has never been more a portal and apparent whether it's our response to the cobot pandemic or working within our community to promote racial Jeff that we continue to deliver.
Our results.
Got to extend a huge thank you to our employees customers business partners and public officials.
Southern company in our operating companies remain committed to supporting our communities today and throughout what is expected to be a prolonged recovery period.
Let's turn now to an update on plant Bogo units three and four [laughter] from a schedule perspective, we continue to remain focused on meeting in November 2021 in November 2022 regulatory approved in service date, we are maintaining an aggressive site work plan that targets.
May 2021 in service date for unit three and seeks to provide margin to the regulatory approved in service date.
From a cost perspective.
Georgia Power's proportional share of the total project capital cost forecast increased in the second quarter by approximately $150 million to $8.5 billion, largely reflecting estimated cobot 19 impacts and other costs and a replenishment of contingency.
Based on our projections for the remainder of the project.
As a result of these collective actions, Georgia power recorded an after tax charge of approximately $110 billion during the second quarter.
Looking more closely at schedule in the second quarter, we experienced significant impacts from cobot 19, among other factors while the recent workforce reduction was affected <unk> in decreasing density at that site and increasing efficiency, we were unable to achieve the anticipated.
The level of production.
Recognizing these challenges.
In June we announced the re sequencing of certain milestones we shifted the expected startup cold hydro testing to the follow up to 2020.
With the timing of the structural integrity testing integrated leak rate test to proceed cold hydro.
Both of these tests were successfully completed in mid July in fact, the integrated leak rate test approached only 30% I'll be allowable margin an indication of the quality of the work being performed at the site.
We accomplished several other interim milestones for unit three during the second quarter, including the completion of closed vessel testing and the Turban Assembly.
The aggressive site work plan currently targets the September October timeframe for the start of Cold Hydro testing.
We now expect unit three hot functional testing to commence during the fourth quarter and we continue to see a path to unit three fueled by year end.
However, recognizing that the aggressive site plan is now even more difficult to achieve then before the pandemic. It is important to remember that under the November benchmark fuel load is not required until mid 2021.
And as a reference point.
Even if unit three fuel load occurred in March it would support and in service date of next summer.
We also reevaluated our estimates for cough and time to complete the final phases of construction, which resulted in hours being added to the direct construction projections for both units.
Reflecting leaves addition, today unit three direct construction remains approximately 90% complete.
We still expect construction completion of about 2% per month to be consistent with the aggressive site work plan and completion of approximately one per cent per month to be consistent with the November benchmarks schedule.
Importantly.
Even amid the outbreak of the pandemic and our need to significantly modify work practices.
Our average monthly construction completion rate was approximately 1.5%.
Over the last four weeks earned hours have surpassed our expectations relative to the November benchmark for each of the major work fronts, including electrical mechanical and civil.
As we move ahead critical areas of focus remain electrical and subcontract performance.
Now turning to call.
We have always maintain that we expected to utilize our contingency account.
But that was before the co bid pandemic occurred as a result, we have increased Georgia power share of the total capital cost forecast by approximately $150 million.
$8.5 billion this represents.
An increase of a little less than 2% certainly not all but largely due to the co that impacts.
The second biggest factor was the re estimate of the amount of effort and therefore hours required to complete the final phases of construction.
Georgia power allocated its remaining contingency and added new contingency of approximately $115 million further reducing reducing future costs risk through the completion of unit for.
Embedded in the project cost to complete our estimated cobot 19 related costs of between 70 million in a $115 million for Georgia power.
Also recall the estimated cost of the time between the aggressive site work plan target dates and the regulatory approved November in service date.
Or a schedule cost margin of approximately $250 million is also included in Georgia powers base capital forecast.
Yep.
The replenished cost contingency and this schedule cost margin continue to represent approximately 20% of the remaining estimated cost to complete.
As we have said, we expect to utilize the entirety of contingency funds as we progress towards completion of the project.
The team at Vogel units, three and four continues to work incredibly hard and drive meaningful progress at the site, even while managing through the pandemic.
As we near the final phases of construction for unit three and move closer to fuel load I can assure you that the construction team.
Management team and our partners are more focused than ever on bringing the first unit of this is Stuart project to completion next year as we approach. The final key milestones we recognize that the aggressive site work plan is increasingly difficult as most of our optionality relative to a may 2021 in service date.
Has been utilized.
But both management at the site workforce remain motivated to pursue the aggressive schedule to provide margin to the November regulatory in service date.
Drew I'll turn it over to you now for an update on their financials and our outlook.
Thanks, Tom and good afternoon, everyone I hope that you all are well.
As Tom mentioned, we had a very strong quarter second quarter adjusted earnings per share was 78 cents, which is two cents lower than last year and 13 cents above our estimate for the quarter.
The primary driver compared to last year was a decline in sales led by cobot 19 related demand reduction largely offset by diligent cost control and constructive state regulatory actions completed in 2019 at our utilities.
The estimated impact during the quarter from Cobot 19 was negative 10 cents and the weather impact relative to normal with negative three cents. A detailed reconciliation of our reported adjusted results is included in today's releases and earnings package.
Year to date through June the dynamics are similar though cobot 19 impacts were largely absent in the first quarter.
For the first six months of the year adjusted EPS was $1.56 cents, which which is six cents higher than last year.
Year to date Cobot 19 impacts are estimated at negative 11 cents and weather impacts were negative 13 cents compared to normal.
We continue to assess the financial impact of Cobot 19 on our business with key focus areas being sales declines customer were beers and bad debt expectations.
In the second quarter total kilowatt hour sales impacts from Cobot 19 were inline with the expectations, we provided last quarter.
Weather normalized retail sales were down approximately 8% with residential sales up 5% commercial sales down, 12% and industrial sales down 14%.
Kobin 19 related sales impacts on our commercial classes were a bit better than we anticipated with industrial impacts a bit worst than expectation for the quarter.
Factoring in all customer classes are nonfuel revenue came in slightly above our forecast.
Looking ahead, we continue to base, our cobot 19 forecasts for 2020 on a U shaped recession with modest economic recovery of across our service territories over the balance of the year.
Our retail sales projection for the full year is unchanged with an expected overall decline in the range of 2% to 5% on a weather normal basis. Let me also reiterate our expectation that retail sales in these ranges with lower total non fuel electric revenues by approximately $250 million to 400.
<unk> million dollars on a consolidated basis.
Based on what we have achieved through the second quarter. We also continue to believe that pandemic related sales impacts in 2020 can be mitigated through interim cost containment measures.
As we undertake cost containment initiatives, we're maintaining our focus on safety customer service reliability and affordability.
With our solid results through the first half of the year, we're well positioned as we head into the peak electric load season, our estimate for the third quarter of 2020 is $1.15 cents per share on an adjusted basis and consistent with historical practice, we will address earnings for the year relative to our EPS guidance after the third quarter.
Okay.
In addition to sales we've also been monitoring customer arrears and the potential for an increase in bad debt expense customer arrears have trended better than anticipated across our operating companies and our liquidity position remains robust.
Constructive mechanisms have been put in place by the commissions in many of our states, allowing us to address kobin related costs and bad debt expense in future regulatory proceedings.
Additionally, through the first half of 2020, we're on target to meet our annual capital plan.
At this point, we do not anticipate that future impacts of cobot 19, or the Vogel impacts Tom discussed will materially impact credit metrics across the company.
And as we said last quarter, we do expect these factors we do not expect these factors to affect our long term outlook.
Before I turn it over back to Tom I'd like to highlight some statistics in our energy mix trends so far this year.
Through June generation from coal represents just 13% of our energy mix and over one third of our generation mix was from zero carbon resources.
For the full year, our projections indicate that generation from coal could be below 20% for the first time in modern history.
We acknowledge that this near term outcome is partially driven by extremely low natural gas prices and electricity demand reductions from both a pandemic as well as mild weather, but the long term trend is also driven by less temporal factors, including a combination of coal plant retirements and a concerted effort to increase our renewable portfolio.
Yes.
In the coming weeks, we expect to is.
To publish of supplement to our 2018 carbon report the supplemental report provides additional detail on potential pathways to achieve southern company's goal of net zero emissions by 2050.
This is an important transition for our company and we look forward to discussing this report to you in the months ahead.
That Tom I'll turn it back over to you. Thanks drew.
Before we take your questions, let me take knowledge Congressman John Lewis.
His funerals being held in Atlanta today, He was a wonderful man.
We're thankful for his service and his work combating racial and justice and his commitment to non violent.
I also want to address the topic of racial and justice.
Recent events have resulted in demonstrations around the world that are leading to necessary and important discussions about racial injustice in our society.
One way to think about racial injustice issue is to imagine a series of sine waves overtime.
Every so often the peak of the sine wave rises to the point that this issue impacts our national consciousness, and frankly, we all see.
But with the passage of time these events fade from the headlines of our nation.
However, we all know the underlying systemic and problems still exist one of our objectives at southern is to keep these important issues at the forefront by focusing on sustained improvement in my opinion, that's where we should place our efforts today, if we want to make lasting improvement to racial justice.
In America.
We are having meaningful discussions in our company and are committed to long term action.
In closing.
These are unusual times for our world and nation as we contend with the covert pandemic.
Economic uncertainty and racial and justice while it is not unusual is the way our company is responding we're delivering clean safe reliable and affordable energy to our customers.
We are consistently working to understand to meet the needs of our employees.
Customers and communities.
And we remain focused on our key business objectives, including operate operating our utilities at best in class levels.
Demonstrating cost discipline and working diligently to bring Vogel units three and four online by the November regulatory approved in service dates.
We believe southern company is well positioned to successfully execute on these fronts and uphold our goal of achieving an attractive risk adjusted return for our shareholders.
We so appreciate you joining us this afternoon.
Operator, we're now ready to take question.
Thank you.
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One moment please for the first question.
Our first question comes from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question.
Hey.
Yes.
Yeah, good afternoon very much.
You bet congrats on the on the progress here.
Thank you yes.
You are quite welcome.
Turning to Vogel.
If I can ask coke, making something or wait a second wave here. How do you think about factoring that into your contingencies, and then separately I want to come back to the comments you made.
It sounds like worker productivity and absenteeism is not being impacted by the SEC well.
It certainly is less than the first time look.
If you remember when the United States went through this first wave.
There was even a lot of conversation about stopping mega projects, we had lots of Southern company Board meetings management time site time really thinking through what is the best course of action to play here and as you remember and I think we've talked about this in the past we took extraordinary measures.
To make sure that the workforce at Vogel units three and four were better protected at the site than they would be kind of in the surrounding area or when they return home. We did things like we created a medical village at the site that provided testing NPP and all sorts of thing and we received.
National a claim for those steps.
By folks like the United States building trades.
So we did all whole lot.
Even so as we thought about what do we do about the workforce. There we saw a great deal of absenteeism.
And so one of the byproduct of the workforce reduction that we did at the site roughly 2000 people.
We basically gave people the option to leave.
And and those people that were most concerned about working in a co bid environment left.
The people that have agreed to stay get the idea that we've got to continue work that the coded protocols. We put in place makes sense and that their health is being looked after an excellent way and the data would show that in fact, we finished the first wave with.
We measure the cases of of co bid positive tests, we had several periods of time, where we went to zero.
And so everything we were doing was working.
And.
And certainly the productivity started doing pretty well.
We are we think now in a second period of co bid ways.
And we have seen and I would probably measure this thing probably from memorial day is where it kind of started a lot of people left.
Our coming back to the site and they've gotten exposed to potentially other sources of impact from the coded virus and so we're seeing that now.
So the question we have to ourselves is.
Are we reaching a plateau are we starting to recover from this thing we have our own medical staff that we've hired to oversee there are some believes that this thing will have a shape similar to the first wave and then it will start to erode, but time will tell.
Okay.
I mean, the other thing we don't know Julian is whether it will be a third way then a fourth way we just don't know.
But certainly the folks that are working right now.
Get the idea of working in a co that environment.
And I don't know whether you guys saw my time on Squawk box. This morning.
We have a chart.
In your package I forget what page. It is that also suggests I guess, it's on page 12 that also to suggest that America may be adapting.
To this new reality and we're seeing in in our numbers.
Absolutely I don't know whether that will sustain.
But it's a very interesting chart.
Excellent.
Well I hope you are doing well.
Separately back then.
Absolutely.
If I can on the contingencies just to wrap this up what contingencies remain how do you frame that you made a lot of comments the outset on contingency I just wanted to try to summarize that a little bit more precisely and talk about what what latitude remains here.
Yes, so so think about it in two pieces right. So one piece is just a straight cost estimate okay and so we've done things like added an additional hours. This effort we've talked about and this really we made estimate on the completion of the Kunst.
Trucks and activities about two years ago, and so we made estimate on the final civil work you know hanging concrete panels, what it would take to do the roof Shield building. These are not increases in scope rather they are re estimates.
What we believe how much effort how much hours will be required.
In order to accomplish that scope another thing that we talk about is.
In C and this is how difficult. It is how much effort is required to run cable from.
Say the source of electricity to the cabinet.
To the terminal points in the plant.
Mechanical how much piping, how much effort will be to finish the pipe work.
Electrical.
Cable tray installation cable polls, we've talked about the size of the cables and and the amount of effort to terminate those cables.
Could go on but that is where we have kind of.
Taking into account.
Tom.
Other costs that ultimately go into an increase in.
In the contingency account. It also we've added in an allowance for incurring per DM costs through 2021 really the finish of the construction of unit for that wasn't in there before we've added a lot in here and let's think about in two pieces one.
These costs.
One is scheduled contingency.
Let's make sure we all understand that 100% dollars at $540 million, Georgia power share 250 million euros.
You could make your own judgment about when we're going to finish the project, but that amount of money is derived from the cost of completing in may.
To November.
So just to pick just to give you a point of reference everything else being equal. If you finished in August you would have roughly half of that schedule contingency available.
So that's another way to think about scheduled contingency certainly there could be other coffin emerge over time.
I'll tell you one other thing Julie and there was a great bidded debate about this whole issue, we we really wrestled with this thing.
When you think about it and we tried to have these concepts in the script as we have allocated the remaining consistency and then added back to this 20% number.
It is pretty clear to us that we have reduced risk because we've identified risk items, we've allocated current contingency and added new.
So.
There was some argument as we don't need 20% right now maybe we should go with a lower number.
At the end of the day, we think we took prudent action by this.
Let's keep contingency at 20%.
Lets not hit any of the contingency available and schedule.
And let's move forward on that basis.
We think there's is a disciplined approach we think it is conservative.
And I think we're in a good spot.
Hi, good there thank you.
You bet. Thank you.
Thank you.
Our next question comes from the line of Steve Fleishman with Wolfe Research. Please proceed with your question.
Hello, Steve Hey, good afternoon, good afternoon, and hope you in your family are doing well.
Thank you know we're doing.
That's great there.
So look the.
I think since your last call in between we got to staff report on Vogel.
And the staff did seem to disagree on some things and I think they say that.
The November date is highly unlikely.
Yes, and also can talk to a billion dollar potential cost increase and.
And other kind of factor.
They mentioned could you just.
Address in your I guess few ahead like where are the differences in view here.
You bet, yes, I think it's going to be pretty clear stuff and I think I think will we were going to give testimony here pretty soon about how we see it versus what they see and certainly theres no new data that they're working on we use the same data. It's really how you view. The data is what gives rise to it to a different.
Hello.
We really start with data that was established some two years ago.
And the staff Doesnt give us credit for the work done over the past year in which we have earned a CP by multiple of 1.3.
In order to derive their numbers they use somewhere between one for and one for five will in fact, they are ignoring our performance over the last two years.
And we would argue that and we've talked about this on prior calls that all this this electrical work, particularly has been.
Especially difficult to do.
We call that scheduled versus unscheduled electrical and as we move into the the scheduled electrical work has been really hard and it has given us high PPI numbers, but as we get to the unscheduled cpis numbers, we're getting numbers less than one.
So as we move forward and get the hard work behind US there was some at least reasonable expectation will be able to at least maintain the one three CPR.
So we don't believe in their one for one four or five.
Assumption.
The other thing they would say.
Is that they go back to our assumptions if you recall on the schedule.
That was put in place two years ago in which we had lots lots at the qualitative term, but a good bit of.
Schedule float time, Okay and in fact, we consumed a lot of that here recently with the re estimate and the re sequencing and all that and that's where we said we've taken a lot of that margin out.
But the schedule today with use would say things like this.
That hot functional tests, a fuel load is five to six month long well, we really think it's more like three months. They would say few loads in services six month long well, we really think its four month.
What they're doing is counting all that.
Management margin time.
That we now account for.
So.
We.
Look we have a planned margin we think that all adds up to about four to five months difference from their own estimate and I want to say I hope somebody's will correct here that their own estimates at something like February of 23 for unit for if you take four to five months away from that that puts us in the summer well.
In advance of November at a lower cost.
Those would be the big items.
Great Great. The other thing that was mentioned, which I think you've addressed before and just even today was just on the testing and they highlight if like 80% of test.
Failed initially, but then I think you guys said a lot of them then pass soon after and then you just test.
These other key tests that you mentioned could you just give more color on that issue and.
Yes, sure just clarify why that was an important.
At a point I guess.
Well, it's almost like you extrapolate from the worst data point and you projected result.
Our actual results have been better than that yeah look I made the data is the same we did have some failure rates on our early testing we maintain the early testing is so illuminating to the future challenges of the project and we have said forever.
If you think about value is a function of risk and return yet we spend a little more money to do early testing, but we think is well worth it in risk reduction.
In thinking about problems that may lay ahead, if we learn quickly fail quickly and then corrected in the future I think that really helps reduce risk in the project and I think we've done a great job there.
From that 80% number we have put tiger teams in place we have seen improvement and if you look at these two major tests that were just done that were put ahead of.
The the cold hydro testing the structural integrity test integrated leak rate test.
With the allowable margin on the.
Our T., we were only at 30% of the allowable margin I think.
Even oversight people.
We're surprised at how well that with I think that really speaks to the future quality of work there will always be problem. That's part of what testing is all about you find that problems and you fix them. So I'm not saying that won't be problems, but I think the rate that they used to extrapolate into the future is way too high.
Okay, great. Thanks for clarifying those things I appreciate it.
You bet. Thank you.
Thank you.
Next question comes from the line of Michael Weinstein from Credit Suisse. Please proceed with your question.
Hey, Mike O'hara.
All right Im good.
Glad to hear that do you sound like you're doing well.
Some headlines that you had tested positive at one point.
Yes.
It was.
I was completely asymptomatic my wife's Sarah actually was the one it started feeling ill and when she did she tested positive and then I went in and Thats. It and I was positive, but I think no dermal has me I'm.
I never had a bad and now on negative.
I'm glad to hear that I, just wanted to give my wishes.
Thank you Sir.
Do you have any.
Can you tell us anything you know about what's going on with the Chinese plants.
And then.
Is there any are there any lessons.
That you already starting to apply now as you enter thus the testing phase and sort of entering the final final stages of construction.
Yes.
But any lessons learned from China.
Turning to apply to lower risk.
Oh sure.
[music].
I think the good news is that they are all running well.
And that any less than we've had we've taken into account and we've actually gone back and improve some processes that that even our newer sense.
You remember everybody was kind of freaked out probably rightfully so on the reactor coolant pumps, but we've gotten through that no issues that we've seen on our site Didnt expect any.
The only other thing I would say, especially as we're approaching kind of completion of our unit is that we have much more automation in terms of finishing construction in terms of testing in a variety of anything.
The Chinese plant tended to throw personnel at any issue.
So so.
I think we're going to be a little bit different it won't be as many lessons learned just from the work process.
So anyway.
Got you.
Hey, maybe we could.
Just get kind of a regulatory update I know theres not much to update on this area.
I think there were some filings your plenty of making this fall.
Gas utility side.
Maybe you could update on where do you think the ERP processes going in.
Future opportunities for construction plants and on the same token.
What are your plans going forward.
Or southern power.
Wondering why don't you the regulatory stuff all these other I'll take a crack on regulatory weve largely resolved the resource planning that was done in Alabama, and I think that.
You can take a look at what we filed in the in the queue, but specifically we will construct of gas facility, we will purchase a gas facility and we will enter into some contracts for additional capacity.
We have two other jurisdictions that are involved in rate, making VMG filed with the expectation that rates will be in effect subject to refund at the beginning of next year and will be resolved sometime in the first or second quarter of next and then HDL resources I'm, sorry, Atlanta Gaslight.
Filed its annual Graham filing with the expectation that will be finalized by year end. So those are sort of.
Two outstanding, but three major rate filings for the year.
And remember, Georgia as kind of just completed its triennial deals im not much there you have a VCM filing in February that.
The important they always are otherwise we're carrying out the ERP, we've not received the final order and Alabama, yes.
So waste reduction if asset.
Southern power, we are where we were.
No we're out in those markets, particularly wind and solar some storage and we just find those that market be extraordinarily challenging.
And you know we were big into it for awhile, but thats when that market with high.
The contract periods are shorter.
The.
Project mean that contract terms are tougher.
We found that to be a tougher place to allocate capital and so what you see is.
More than 90% of our net income it's coming from these wonderful franchise businesses that are the electric them again.
We've allocated.
Onetime I forget how much it was like 6 billion one year, but now our allocation of capital to southern power Powersecure is now about 500 million a year and I don't know, whether we'll spend that or not we'll just see but it doesn't have much of a near term impact we add close the couple of when deals both they were called.
Setting and Beach Ridge.
But again.
Not that big a deal in terms of their operating performance Theyre doing great, they're producing what we thought they would.
We're just not allocating a lot of future capital that way.
Completed construction at reading in the process of construction to Scoop from Chuck I'd say, it's our opportunities are largely.
When related although there are two projects that were working on within the California jurisdiction for battery, which I think it's an interesting place for us to explore and understand these be battery additions to existing solar facilities I think give us good intelligence on how to produce the asset what the economics of the asset.
The operational characteristics are some pretty excited about that what's fascinating about kind of where weve.
Cast our die at this point, it's with the franchise businesses, we used to talk a whole lot about southern power of the market for right now we think regular predictable sustainable earnings on a good risk adjusted basis are coming out of our franchise. That's how we're making on money going forward. The vast majority of our total cap capital plan.
Over the next five years, yes.
One last question on these lines.
Big nuclear plant about to come online.
Are you guys thinking about maybe some experiments in terms of the hydrogen economy, producing hydrogen often nuclear plant to create green green gas.
So I thought I had.
As a matter of fact, we are now.
At the risk of talent on story out fell short story.
Three year I kind of term here, we did something called.
So price kind of built along the X price concept one of the six winners was hydrogen so we've been working on right now for seven years roughly.
Very fascinating kind of idea about hydrogen is that if a great storage medium and you can pay or hydrogen or hydrogen technology with kind of electrolysis and solar in a variety of of thing.
Things were looking at his future gas generation that may be able to use hydrogen as a mix with natural gas or even at the extreme.
Lucidly in place up natural gas.
Remember, we toyed around a little bit of this with.
Plant Ratcliffe.
We think there are applications going forward and we are hard at work.
It's one of these things Thats R&D for sure I think right now it's kind of out of the money, but remember the job of R&D. It to take things that are out of the money and make them in the money.
That does occupy a certain segment of our R&D budget right now, but you should ask that.
Okay, well, thank you very much.
You bet. Thank you.
Thank you.
Our next question comes from the line of Angie Storozynski from Seaport Global. Please proceed with your clarity.
And you welcome back glad to have yet.
Thank you Tom Thank you so.
The question about the contingency. So I think we all expected that you guys are going to tap into this contingency at some point hopefully getting close to the end of construction cycle for unit three I think what is somewhat surprising is one that you have.
So that the contingency and that.
By writing down the this and this additional cost estimates.
I assume that you will not be seeking recovery of the additional spending even though it seems like thats.
Driven by core which is not something that you could have controlled.
And then secondly, so.
We are getting.
Assuming we close as I said to the MBS construction additional units silly and so.
Some of those assertions that you've been making about.
The project progressing faster than what the staff.
The believe are about the BNS and validated so.
So how can you.
Make us more comfortable that line.
No additional additional.
Basically the realignment.
The construction plan for unit three coming within the next phase three months.
And there.
Well, that's probably the main initiatives one why did you increase the contingency and brought it down as to how comfortable should we feel about this new schedule.
We have still little time left until the end of the here.
That's right and thank you for all the questions that you are at the heart I think I mentioned before that we really had enormous debates internally about all this but.
Just kind of put it this way.
In the script I referred to the fact that when we established the original content as it was before we had coated.
And co bid was arguably the biggest factor in thinking about you know reestablishing.
Higher contingency level course, there were other factors.
But that was one of them and you know with respect to recovery.
I think thats an issue for the future, we're not saying no and never and I know there have been some writings in the analyst community about likelihood there, but I don't think it's appropriate for us to go through those issues right now and therefore.
We would not seek to offset an accounting charge with a belief a probable outcome in that regard.
The other one that came into that argument was scheduled.
I'll, let you all make your own belief about what schedule is.
We think may this is consistent with every time, we've ever said this the may aggressive schedule is aggressive less than 50% et cetera, and recently, we said, it's even gotten tougher because we've removed margins.
At the same time, we say we expect to achieve November.
So.
We tried to suggest that there's a range between may and November.
And all other things being equal forget other new challenges, we may face some of that scheduled contingency may be available, but we weren't willing and that I should say that's scheduled contingency is also referred to in the in the chance here as owners contingency, which requires all of our co.
Owners Oglethorpe me Dalton, who agreed to.
So we have left it in place.
I think the approach we've taken Angie with respect to the accounting charge associated with the increase in cost and part of that increasing costs was a replenishment contingency is just conservative and prudent and we think it's the right thing to do.
Okay, and and the second part which is.
If you will be able to to lower fuel.
End of this year, even early next year I mean, how soon in the sense will you know list thats achievable come that YY.
Well we know.
Yes, good question.
So if I if I got you to page seven or chart seven whatever it is the Bogo unit three direct construction and major milestones. We suggested that we could start cold hydro kind of in the September October timeframe.
And that it would take I don't know 10 days.
And then shortly thereafter, we will start hot functional testing.
It's certainly interesting listening to the investors and thank you for hanging whether through all this.
A lot of the.
That if you will on southern.
Our taken by the accomplishment of these milestones.
You know we've suggested in the past jeez, if you get to fuel load that certainly is a whole lot of information that means you pass out functional test that you basically have an operating plant.
And it just doesn't operate off nuclear fuel yet and we passed the I attacks and now we load nuclear fuel when we go off of their other people have suggested the next big lever is the hot functional testing in other words with a third party. If you will heat source not nuclear fuel does the plant work.
Every milestone that we've been passing so far has given us comfort that we have a quality plant.
And that will we'll be able to hit.
A schedule expectation.
This chart I think lays out our best guess.
But those things may be.
Yes, and the other thing we added to the script. This time was just to give you some comfort on variance Angie and it and it really goes through the idea we've said that.
Hello by the end of the year is our objective and the site is working like dogs to get there, but even if we were three months later.
Then that suggests perhaps summer in service date.
I think all this is meant to give you some sensitivity and an indication of our ability to hit November.
I hope that's helpful.
Yes. Thank you.
Thank you.
Thank you.
Our next question comes from the line of Sophie Karp with Keybanc. Please proceed with your question.
Hello, Sophie how are you.
Hi, good afternoon, guys well.
Fantastic, Thanks for being with us.
Alright, Thank you for taking my question.
The non won't go question.
We are doing that right now but.
Yes.
All right all questioner welcome.
Yes, so I'm looking at slide.
Great.
Mike.
Half year.
Five.
And from.
All right is that net 10 cents negative with coal.
That's right.
All right way of greater than that.
No so Sophie Cove, it impacts our renewal rates pricing usage and other.
And so that would be the impact of cobot, which we denominated for you for each of the two periods and then you would add back to it any changes in rates or usage at the utilities related to the rate activity from last year and so these really represent owning them relative to last year's performance.
Okay, So basically that.
As a clean.
Number and should we expect that similar kind of run rate for the second half.
It's it's a good question and we're spending an awful lot of time thinking about cost in general Southern has always been very strong.
Had a strong ability to compensate for changes in whether demand in particular this year, we've been faced with weather demand and with impacts related to the Corona virus.
We've been very pleased with the with the discipline that each of our employees has exhibited we're looking at the components of those costs and in general you could imagine with the cessation of hiring will have a reduction in.
Head count.
Relative to our expectation no reduction in our actual workforce, which leaves two reduction of benefits and incentives and.
Travel and entertainment in a number of cascading factors. We've also had a series of expenses related to operations of facilities, which are not safety related but because generation has been lighter due to cope and whether we actually have been able to.
Through normal cycle defer this is not a deferral of maintenance but.
Maintenance that will pass until the unit has operated a certain number of hours is maybe the right way to think about it.
We also have other factors like.
Vegetation management that works against the seven year cycle, but suffices to say there are a number of items that are one in period and to that might create headwind for future and we're just monitoring those buckets and we want to make sure. We're responsive to current period, but also future period, and so I wouldn't say that these wouldnt necessarily hold in that will.
Examine what our needs our after we get through the next three months, which is the lion's share. The summer cooling season, I think you said exceedingly well and we've talked about if in years past, where we have some optionality in terms of spending right. Some stuff we have to do and we do it some stuff we have the ability to do it today tomorrow.
The next month in the next month or perhaps the next year and if we had the ability through better than expected weather et cetera, we'll do them this year.
So we can move with load that with kind of interesting about what drew said earlier about kind of where we are in our revenue expectation for this cove, it where we set it up this year.
Right.
I'm just going to gas right now were mid point or below.
Certainly not trending adversely.
And if you look at that July thing I don't know, whether that's going to sustain or not but our revenue picture is coming in a little better than what we thought therefore that may open up some opportunities then tomorrow.
Yes.
Terrific. Thank you for the color and then.
I'm just wondering on the cover the impact as it relates to Volvo right. So clearly that's causing some of the impact here.
Yes, thats not something that contemplated.
Force foreseen the at the time of 17 settlement.
Is there.
Merits.
Is it that settlement or.
Significant Grand scheme of things right now to be thinking about that.
No I think it's a fair question, but I think it's a question for kind of right now everything you're dealing with is an estimate it real it it really isn't a cash impact right now not a material. One this is really what we're estimating going forward, let some time path and let's see what we're doing and we certainly have the.
The history.
The ongoing constructive conversations with regulators about unforeseen circumstances, and that's probably not going to happen. This year, let's see in the future.
Got it.
And just so much appreciate you taking my question.
Thank you always glad to have you with us.
Thank you.
Our next question comes from the line of Durgesh Chopra with Evercore. Please proceed with your question.
Very good natured.
Hey.
Hey, Thanks, Tom and glad to see you're doing well. Thank you for taking my question. So.
Maybe drew first to you just.
You should this very good slide on slide 11 that is that shows sort of the projection.
And the actual results what is embedded into the Q3 hundred 50 bps guidance on that front, what kind of to retail load projection or are you embedding specifically in that Q3 number can you share that with us.
I.
What I can tell you is that we think that Q3 well might have impacted is very similar in aggregate to Q2, and it's so which would make it a smaller percentage of the total maybe 10 or 11 cents in aggregate and Thats simply because the summer period is.
Much higher sustain output of.
Kill kilowatt hour sales given that its cooling load.
Understood. Thank you for that and just one quick one you didn't put out any materials reaffirming your long term guidance and capital plan and I think that is consistent with how you've done it previously, but the Q1 Quint actually had you informing the long term growth guidance I guess, but no change to your I think you said this in your commentary, but I wanted to clarify no change your.
Your long term capital plan as when is your long term Dps growth Kiecker correct.
And capital requirements all three of those factors are.
Through in fact, and once again historically, we deal with that in our first quarter or no our year end fall, which would be early February.
We will update all that but yes, theres and if there was something materially would say, though.
So you should just traveled with what you have.
Understood. Thank you guys music unhealthy thanks.
Thank you so much.
Thank you. Our next question comes from the line of Paul Fremont with Mizuho Securities. Please proceed with your question.
Hello, Paul Good afternoon.
Good afternoon.
I guess my first question is.
How many remaining ipi tax or are there on on units Trey.
261.
Those those are open that's out of 399. So we've completed 138 just to say here from the math.
Okay.
And then Hey, Hey, Paul one other thing on the 261 a lot of those are what we call you I and that means we've we've essentially had the high cash fruit at the commission except for the result of the to.
So I mean, I think if I recall on on the first quarter call. It looks like you reduce that number by roughly 10 from the first.
From the and from the first quarter call.
Yes.
Okay.
And then.
Do you have construction work hours scheduled after the revised startup hot functional testing I think one of the things that staff mentioned in the in their report was it was unusual.
Normally that construction is complete when you start hot hot functional testing.
Yes, but I wouldn't get excited about that we made that change in February.
If you have construction work hours after hot functional test it would be things that aren't critical to the operation of the plant in other words not critical to the nuclear operation. So it may be civil work.
Painting in coatings HP, yes.
Okay.
And then.
I guess this cold hydro testing need to be completed.
Before hot functional testing begins or.
Yes can you be doing both at the Oh, It does have to be complete.
Yes, Sir.
Okay, because if I go to your slide seven than.
Yeah, that's good.
So, let's say we start.
Kind of early September on Cold Hydro I think thats, what that blue is meant to.
We think there's probably a month different between the start of cold hydro and the start of hot function.
I mentioned cold hydro.
So it takes so.
I'm sorry.
So you can come yes.
Cold hydro in a month.
Oh gosh, we can completed in 10 days.
Okay.
I just wanted to understand sort of.
The timeline, a little bit better and then yes or.
And then last thing is I mean, you talked about sort of.
Looking at the at what staff is looking for in terms of scheduling versus what Southerns.
Plan is and the differences there, but I think what staff had said was typically for other nuclear plants. Both in this country and in other countries. It's roughly six months from the end of hot functional testing till fuel alone and then another six months to commercial operation.
So they're sort of looking at the body.
Nuclear plants that have come before vocal trend for what.
Gives you confidence I guess in your planning process that you think you can do that more quickly.
Yeah, I mean, the simple volley on that.
Logic fail.
Is that.
They are using data that is more than 30 years old.
You know that's kind of the way they think about it in that regard the more relevant way to think about it is what China was able to do we originally a loud.
Last month, China was able to do it in four and a half on round numbers and we have our own opinion.
The other thing that I might you have mentioned before but I should I'll say now.
Westinghouse's consistent between the work in China, and the work here in the United States that Vogel and we get the benefit of their experience and remember we've always had people in China looking at all that experience we've had our own people there.
So I just.
I think thats an obvious in my opinion I hope it will make anybody mad, but I just think thats a logic law that if you're going to make your estimate based on Heaven forbid 19, Seventys Eightys data world is different now and we have a much better marker for experience in China than we do those projects.
And Paul I'd like to five maybe one thing because it may be helpful to other folks on the call slide seven is an important slide for us. So let me help you maybe.
Deciphered, a little bit the Blue circle represents the aggressive site work plan and when those milestones would need to start stay on that plan.
It is not meant to be the duration between the orange and the blue Orange circles represents the point at which we think that need to start those activities to maintain the November Scott.
Yes, no I guess.
Thanks.
And even the orange could be move you could start hot functional test later than most but we show here that that's a.
A good schedule shot of what November would look like if you chose to do November you could actually start high functional test much later than what we indicate here and still hit November.
And I am and hot functional test is roughly three months based on what you guys had talked about in earlier calls.
It's two month.
Two months, we used to have we used to having there Paul and what you may be remembering is 30 days of kind of management tongue, but it's a two month schedule.
Thank you that's it for me.
Thank you Sir.
Thank you.
Our next question comes on the line of Andrew Weisel with Scotia Bank. Please proceed with your question.
Hello, Andrew welcome.
Hi, Good afternoon, Tom I want to Echo I'm glad to hear that you and your way for feeling better.
Thank you I appreciate heard a question.
My first question is if I understand your answers to soak. These question. It sounds like most of the only them savings in 2020, you're going to be related to timing flexibility or short term adjustments in reaction to covert 19, but now that we're a few months into the pandemic and modified utility operations. What's your latest thinking on how much is cost saving.
Should as might be sustainable as opposed to one time.
Oh listen.
You're hitting some.
Going to tack a question, David you're hitting a very interesting question, okay, how much of the Olin and savings drew and I, arguing about this the other day is is deferrals and others are going to show up later, 15% up 15%. So 85% are captured and permanent is what we believe okay. It's only 15% is.
Temporal.
And that may be made up with what happened to kind of at the summer we get.
Prolonged period of warm weather or less than expected Cove. It impacts or then we'll turn that money on this year. It probably would be more vegetation management related than it would say deferral of outages because drew explained beautifully if the plants not running you take an outage based on essentially the time on term.
Urban and things like that and if they're not running you defer the outage.
With that helpful. I think part of the question that you were asking too is that will some of these things be made permanent and I don't know that thats necessarily a fair assumption to make we built our budgets around what we thought was a complement of people that we thought we needed to operate our business or grow our business and we've.
Had to take a pause in hiring this year, because we have to be responsive to customers and responsive to shareholders and so we've we've waited a bit when were outside of code that we might certainly make the determination that these are things that we still need to do now there are absolutely things that we've examined there our work groups that are working remote.
We now that are incredibly efficient that we might ultimately determine can work in that mode for a while I'm not sure we're ready to two oppressed taking the ground around 2021 or a non cobot environment and so we've had a little bit more time to operate the way we're operating but he is exactly right. I mean, we are debating things around the management Council table that's.
The Ceos evolve our opcos and the major functional had.
It's a fascinating question what is this tell us about a way to operate more efficiently in the future I think we have gained on all of them I think we do lose by the collegiality of walking down the hall and working with each other we're trying to make that up with tax and phone calls and email, but it's not the thing, but theres something in between what we need to capture.
[music].
Okay, Great that's definitely helpful.
Lastly, switching to midstream not a huge focus of years, obviously, but in light of Dominion to asset sale on HCP being canceled.
A few questions.
Obviously, you've exited HCP, but I guess, how committed are you to this business.
Would you consider selling your assets or Conversely, how would you describe your appetite for new midstream projects and then lastly would you consider taking capacity on MVP to diversify your supply sources.
Yes, so, let's let's dial the clock back to when we were just getting buffeted by all sorts of.
Offers if you will expressions unintended us.
No [laughter].
Right, but.
There were I think I've mentioned this with whatever something like five different big deals that we were looking at and then one came in at the end it was almost five and a half I don't know.
We've never been committed in a in a kind of deep way to pipeline growth. So what did we do go back and look it was we bought 50% of the southern natural gas system owned by Kendra Morgan at the time and recall that the reason.
And we did that deal was we felt that natural gas generation, particularly in the northern half of our system was inextricably tied to Sony Southern natural gas pipes.
And if you remember.
That day I think most everybody would say we bought that well we got a good price.
It was really important I think to Kinder Morgan for us to stay a customer and so.
We were able to do that.
We're I forget what our share is of that pipe is it 50% or better of the throughput of some of that comes to us. So there was this kind of notion of.
Synergy and integration.
The other thing we said that day was we viewed this as an annuity it's a good annuity because we bought it at a good price.
We did not include any expansion of that pipe in any of our financial plans. We've done a few things around the edges, but nothing material.
So here's my view.
There was so much symbiosis.
Between so Nat and our plans for generation at Southern we felt like that with a smart bet and because we were able to buy it well it fit in very well in our portfolio, but it fits in as an annuity.
Not as a growth engine.
In terms of our appetite going forward look I, just think thats, an extraordinarily difficult business right now.
And you know I'm, sorry from my friends, Tom Farrell and Lynn good on HCP I know they worked very hard to make that a reality.
It was just the right thing for us not to be part of that.
To the character of our midstream businesses. It's also very different you touched on it so.
So now but.
We've never really been involved in gathering and processing, we have very modest storage representation, although we own a fair amount of sport within our ldcs and the transportation leg that is the dominant piece of our investment is a primary supply source for the so our southeast.
Utilities and so it has that has a character that looks a little bit more like transmission.
In transportation than mid stream in aggregate data.
And the other thing is what's the future of gas pipelines look.
I said when we did the AG l. deal that I thought gas was a bridge to 2050 I kind of lengthen that now to say boy it beyond 2015, but in order to hit net zero, we're gonna have to do and that's what southern does uniquely compared to any other company in our industry is invest in technologies are going to be able to deal with.
The carbon Adam coming off gas generation.
We're doing that Theres no national leader that compares to US we run the nation's carbon capture research center, we run the international carbon capture Research Center, we're doing all sorts of other money, where our mouth is activities to deal with carbon that's why we're confident as we think about the portfolio going forward that we're in.
I think in Optionality, that's going to be able to keep gas part of the solution, but we will have to deal with the carbon that.
Okay, great and MVP appetite.
I'm, sorry, what was that mountain valley pipeline have.
I don't think so thats something we'd up that you'd have to hear from our utilities directly from not something it's gone up front burner issue.
Alright, thank you so much.
Thank you Sir.
Thank you.
Our next question comes from the line of Paul Patterson with Glenrock Associates. Please proceed with your question.
Hello, how are you.
Alright, How're you doing.
Fantastic.
Yes.
Sounds like you might have been a superstar silence better.
[laughter].
Effort.
Im glad the and congrats on the on the Companys ability to sort of navigate cope with 19 with the big project and everything.
What I wanted to ask you about I guess.
Footnote three.
In the release discusses.
Last sentence discuss is that there might be some potential future write offs.
And I was.
Wondering whether or not associate with Vogel and that's one is that just basically you sort of.
Boiler pretty standard.
You know safe Harbor stuff or is this something that we should be is there anything more you would elaborate on that in terms of what we should be expecting with respect to that.
Yes, I've looked through all this stuff I don't that one doesn't jump off a page. It sounds like you know we believe in conservative disclosures, we don't know of any exposure to future write offs.
In the future I mean, we've given you everything we know is it possible there could be further yes sure. Okay. I got you know I just.
I just noticed at night it looks a little I just want to make sure.
The other thing was on the leverage leases.
It looks to me like you guys have written off the entire value of those.
Theres some language about how there might be I'm, not clear whether or not through some additional obligations you might have.
I like to closing it is there any is there any exposure here. That's that you think is material that we should be thinking about.
No what I don't think so I mean.
In just a replay of this when this was this is a legacy business unit was very important to with you guys remember southern energy. It started out southern electric International in fact, I was effectively the CFO of that for a while.
And then it became southern energy and then we spun it out became mirror in the spin out we took over the leasing business those guys liked financial.
Engineering.
I don't like financial Engineering never have.
But the leasing business was kind of hot at one time in the world because you could kind of structured net income that was the idea.
Choctaw was one of those projects the reassessment really dealt with.
The terminal value of that plant and I think it has a power sales contract with TV that expires in 32, we reevaluated the terminal value based on what it cost we think to operate the plant in 33 and beyond relative to the market for this flat compared to say natural gas.
Natural gas prices are 35% cheaper this year than they were last year and therefore, the assessment of terminal value went to zero and therefore, you failed the impairment test and therefore, we wrote the whole thing off okay.
Just just one of its one that then.
With respect to the.
The 150 million and cobot 19.
It could be thinking and other calls.
Is there any significant other cost that you'd call out on this.
Just sort of what's the sense of how much it sort of cobot 19.
It is something else I guess, if there is something significant.
Yep.
Some of you pick up on that we kind of drafted around that went a little bit. The the 75 to 115 refers to cove it.
Okay Karma and then there are other potential cost.
Okay.
So what you're reading there 75 to 115 is coded and then there may be other things and other things may go to the performance of subcontractors that May go to I don't know this per GM extension in 21 beyond where we are now things like that.
Also so thanks, so much for the presentation very helpful and Glenn Thank you well, okay Super Thank you my friend.
Thank you.
Next question comes from the line of Michael Webber from Weber Research. Please proceed with your question.
Hello, Mike Good afternoon, guys and good afternoon, guys how are you.
Super.
Hi, Thanks for squeezing a sand I just wanted to circle back.
Thanks, a couple Vogel.
Two questions.
We specifically to kind of get our arms around onsite head count and craft labor productivity.
Pre kind of at a pre co bid and that kind of a post covert oral or mid Gobi to world.
And forgive me I know you touched on this a bit already so forgive me if I if I missed it but to be clear is the head count is currently on site inline or enough to hit that May 21 in service date, and then maybe more specifically have there been any changes to the underlying.
Craft labor productivity assumptions used to kind of get to that timeframe.
Yes terrific.
We are adding were a little below so if you do the just the big numbers. We went from 9000 7000 actually below 7000.
We are adding back now about 100, the 200, new electricians and effect. This is a summary of what we've said before but recall, we move people off of units for two units three and we're adding back electricians to kind of catch up on unit for now that's kind of the way you should think about it.
So that's about where we are.
The other thing it's kind of good is we think there's.
Personnel available, particularly along the Gulf coast and some other areas. The labor you feel is building trades and others had been terrific to work with here.
And then just the second part of that in terms of the underlying craft labor productivity assumptions that are that are.
Underpinning that May 21 date has there been any changes or those kind of the postcode environment.
Well it doesn't assume so remember the aggressive schedule is aggressive okay Doug.
Improvement in productivity for sure.
So I mean, the other data point I guess I could give you. If you just kind of extend where we have been with no improvement.
We're kind of hit between the two per cent per month in the 1% per month, 2% associated with the aggressive schedule, 1% associated with November were kind of hitting right down the middle of airway with no improvement let me assure we are trying to reach improvement.
And the other thing I mentioned earlier on this call that I hope people remember, we're finishing up this tough.
Part of electrical that's the cable trades and pulling these gigantic cables and terminating them in very close basis and remember we referred to this and the language in the script.
When we talked about losing the production as we went to a co vid protocol. We for example, instead of having an army of people in a closed space. We would have like no more than three people in a work space.
So we could the amount of action Don just because we had fewer people there that pushed out outcomes struck and that gave rise to the change in the estimate all of those are targeted impact.
Hey, going to work hard to get it done we'll see.
No that's very helpful.
Just specifically related to.
Productivity related costs does backfill or any other major contractors have any risk or cost share exposure, there specifically as it pertains to productivity related costs.
Yeah, there fee is at risk.
The that's the Big thing let me just let me just bag on those guys.
And in backfill Jack future Brian.
Anyway, they're terrific.
Brian Riley they reflect folks to work with we meet with them all the time I'm in the meetings, where we meet with them now the the our onsite team that would be Steve Kaczynski, Glenn CIC and others meets with them daily right, but there are monthly meat or Brendan Bechtol himself, Jack Foodstar himself come to the meeting with Paul.
Our CEO of Georgia Power Me drew evans's there.
Our co owners are there.
Dr. Jacobs is there the PSC stat deal we is there forever.
NRC is there everybody sees a completely transparent picture of where we are and we think this has served us so well.
Got you did just dig into that in terms of there how exactly their feet risks what what Megan.
Yeah, I think that's a question rather ask backfill or even boiler room kind of stuff gotcha, but it's just a success.
Incentive fee is the white.
Fair enough well first of all that sounds like a very big room with all those who are there but.
I appreciate the.
Appreciate the color and thanks again for squeeze incident.
Oh sure. Thank you.
Thank you and that will conclude today's question and answer session. So are there any closing remarks.
Thanks to everybody.
For these are unique times aren't they I think we're going to look back at 2020 that maybe the way we look back at 1968 or some other big years in history in the United States.
You know.
When I think about the work being done at Vogtle, three and four and the adjustments those people have made to continue to progress the Vogel three and four site. It is nothing short of her ROIC and they deserve our gratitude and I think they continue to make great progress under a lot of duress. So thanks for that.
Team there thanks to our co workers at back Dolan and all the subcontractors.
I know what's important to you guys. We see ourselves now in the short rows of that process at least for unit three in at such an exciting time to look at the end of the tunnel in in fact city daylight. So we look forward to making progress in October when we meet back with you at the end of the third quarter, we'll have a lot more transparency on what the summer did.
For revenues.
And we'll have.
I think a new estimate on what we're going to do this year.
And on in terms of guidance and we'll have a lot more I think visibility on where we are on three and four such exciting times.
If we can just get our social unrest under order and pay attention to making sure that not only the watts of our business are done well, but the house of our business are done wellness systemic way.
Not in a periodic way.
I think we'll all be better as a company and as a nation.
Thank you all so much for following US we appreciate your time today.
Operator that concludes the call.
Thank you, Sir ladies and gentlemen, this concludes the southern company second quarter 2020 earnings call you may now disconnect.
[music].