Q2 2020 Ameren Corp Earnings Call
Other than 20 earnings conference call.
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It is now my pleasure to introduce your host Andrew Kirk Director of Investor Relations for Amarin Corporation.
Thank you Mr. Kurt you may begin.
Thank you and good morning on the call with me today are Warner Baxter, Our chairman, President and Chief Executive Officer, and Michael Main our executive Vice President and Chief Financial Officer, as well as the other members of the Amarin management team joining remotely.
Warner and Michael will discuss our earnings results and guidance as well as provide a business update then we will open the call for questions. Before we begin let me cover a few administrative details. This call contains time sensitive data that's accurate only as of the date of today's live broadcast redistribution of this broadcast is prohibited to assist with our call. This morning, we have.
Posted a presentation on the amarin investors Dot com home page that we referenced by our speakers as noted on page two of the presentation comments made during this conference call may contain statements that are commonly referred to as forward looking statements. Such statements include those about future expectations beliefs plans strategies objectives.
Events conditions and financial performance, we caution you that various factors could cause actual results to differ materially from those anticipated for additional information concerning these factors. Please read the forward looking statements section in the news release, we issued yesterday and the forward looking since with the SEC.
Lastly, all per share earnings amounts discussed during today's presentation, including earnings guidance are presented on a diluted basis, unless otherwise noted that here as Warner who will start on page four of the presentation.
Thanks, Andrew Good morning, everyone and thank you for joining us.
Before I jump into our presentation I'll start by saying that I Hope you your families and colleagues are safe and healthy during this challenging time.
This morning, and we'll begin our presentation by providing a cover 19 update and in particular highlight the actions we've taken to support our customers communities in coworkers.
I will then touch on our second quarter results in 2020 earnings guidance and finished with the discussion of several key elements of our strategy that we continue to execute very well, which will position us to continue delivering strong long term value for our customers and shareholders.
Turning now to slide four uncovered 19.
Strong commitment to the safety of our coworkers customers and communities remains constant.
So two is our strong focus on delivering safe reliable and affordable electric and natural gas service. During this unprecedented time.
We recognize that means are coming on us.
I can express enough appreciation to my coworkers, who have shown great agility in a keen focus on safety and delivering on our mission to power the quality of life.
Well, we are focused on delivering safe reliable and affordable service. We also recognize that our mission goes beyond this during this challenging time.
We recognize that our customers can communities have significant needs.
It is why we are working directly with our customers are special payment plans for the utility bills.
We're also working closely with many dedicated community partners and have contributed approximately $15 million for energy assistance and covered 19 support to our customers in Missouri and Illinois.
And I'm very pleased to tell you that our coal.
Correctly engaged in this effort through our amarin cares power of giving program.
Yes, there these programs are helping our residential small business and not for profit customers meet their needs.
In addition, we are tirelessly working with our customers to help and gain access to host of federal support programs, including low income energy assistance funds.
Our customers are at the center of our strategy and we will continue to take steps to help them. During this unprecedented time.
Throughout this challenging period I'm also pleased to say that we have been effectively executing our strategy across all of our businesses.
The key element of our strategy is to invest in energy infrastructure.
Extra to benefit our customers and in so doing provide important jobs to support the local economy as well as local suppliers at a time when they are needed most.
Looking ahead, we recognize that we will need to be managing impacts of coated 19 for some time.
For safety and delivering on our mission and strategy at the top of our minds, we plan to continue managing our business under our current cobot 19 protocols.
Which includes having a significant portion of our workforce working remotely through at least the ended this year.
We also continue to carefully monitor the impact of covered 19 on our electric sales liquidity and supply chain.
To date, these impacts have been manageable and inline with our expectations.
At the same time, we will remain focused on exercising financial discipline to mitigate the potential impacts of coated 19.
Capitalizing on some key opportunities that we have identified during this crisis.
Included benefits, we are realizing from our digital transformation investments and streamline operating practices.
Turning now to page five for an update on second quarter results and 2020 earnings guidance.
Yesterday, we announced second quarter 2020 earnings of 98 cents per share compared to 72 cents per share earned in 2019.
So many of the key drivers of the year over year increase of 26 cents per share is provided on this page, which Mike will discuss in more detail in a moment.
The strong execution of our strategic plan drove strong quarterly earnings results and enabled us to affirm our 2020 earnings guidance range of $3.40 per share to $3, a 60 cents per share.
Moving to page six here, we reiterate our strategic plan, which is I just mentioned, we've been executing very well throughout the year.
We expect our plan to continue delivering significant value for our customers and strong long term earnings growth for our shareholders.
The first pillar of our strategy stresses investing in and operating our utilities in a manner consistent with existing regulatory frameworks.
This is driven our multiyear focus on investing in energy infrastructure for the long term benefit of customers and all of our jurisdictions.
As you can see on the right side of this page during the first half of this year, we invested significant capital and each of our business segments to better serve our customers, most notably AMD ameren transmission, where we effectively managed the nearly 25% increase and infrastructure investment compared to the first half of 2019.
These investments are delivering value to our customers and community.
Our energy grid is becoming more reliable resilient and secure and our digital investments by enhancing our customers experience.
Of course, we're not done.
Looking ahead, we continued to see the need for robust energy infrastructure investments to meet our customers energy needs and exceed their expectations, while keeping rates affordable.
Our electric rates in both Missouri, and Illinois continued to be well below the Midwest and national averages.
As we discussed on our first quarter earnings call.
[music] electric rates went into effect on April 1st of this year as a result of a constructive settlement and Amarin, Missouri Electric rate review.
The settlement included a 32 million dollar annual revenue decrease which marks the second consecutive decrease since 2018.
Since the Ameren Missouri's last electric rate review in 2017, its customer rates have decreased by 7% while at the same time, we've continued to make significant investments in energy infrastructure to benefit our customers.
As Mike will cover in more detail later, we have also been very busy managing our electric and natural gas regulatory proceedings in Illinois.
We expect a final decision in the electric proceeding by December of this year and a final decision in the gas proceeding by January of next year.
Finally, another important element of the first pillar of our strategy has been and remains our relentless focus on continuous improvement and disciplined cost management to keep rates affordable.
Moving to the second pillar of our strategy, which includes enhancing regulatory frameworks for the benefit of all stakeholders.
As you know we continue to support the proposed downstate clean energy Affordability Act in Illinois.
This important legislation would allow ameren, Illinois to make significant investments in solar energy and battery storage to improve reliability as well as to make investments and transportation electrification in order to benefit customers and the economy across central and southern Illinois.
In addition would help address depressing energy policy challenges facing the state.
Including the need for additional renewable sources and better electric vehicle charging infrastructure.
This bill will help address these challenges and move the state of Illinois closer to reaching this goal of 100% clean energy by 2050.
In addition, this legislation would modify the allowed return on equity formula to increase the basis point adder to the averaged 30 year Treasury rate from 582 680, and when also extend the electric performance base rate, making framework through 2032.
Importantly, this legislation builds on Ameren, Illinois efforts to modernize the energy grid under a transparent and stable regulatory framework that is supported significant investment to modernize the energy grid.
Improving reliability and creating approximately 1400 jobs, all while keeping rates well below the Midwest and national averages.
In fact, all in residential rates in 2020 are down 1% compared to 2012, the first year of performance base rates.
Simply put the performance space grid modernization legislation that was passed in 2011 and extended twice by the Illinois legislature under different administrations has been an overwhelming success for Illinois.
With all these benefits in mind, we remain focused on working with key stakeholders to get this important legislation passed.
Turning now to page seven I'll provide an update on FERC regulatory matters.
In may the FERC issued an order on the rehearing request related to his number pressing to complaint cases that reduced micelles based return on equity.
The order established a new.
Three models, the risk premium model capital asset pricing model and the discounted cash flow model.
The revised order sensor based return on equity of 10.02% for transmission projects for the first complaint case period and effective as of September 28 2016.
This results in return on equity of 10.52% for Ameren transmission, including the 50 basis point after being part of MISO.
The FERC also dismissed the second complaint case.
We're pleased with the order and believes to be constructive as a new three model methodology expands the range of reasonableness.
As an equity or just and reasonable.
The FERC also issued a notice of proposed rule, making them.
March.
Overall proposed rulemaking are constructive.
As a result.
And submission owners filed comments in.
Just to the RTL adder reliability and benefit based incentives and there are we cap.
We are unable to predict the ultimate timing or impact of these matters as the FERC is under no timeline to issue a decision.
Moving now to page eight for an update on the third pillar of our strategy, creating and capitalizing on opportunities for investment for the benefit of our customers shareholder version and the environment.
Our 1.2 billion dollar wind generation investment plan to achieve.
You standard through the acquisition of 700 megawatts of new wind generation at two sites in Missouri.
No significant change to the project schedules from we discussed on our first quarter call in May.
Please.
We're working closely with.
I'm sure the timing of manufacturing.
Components.
We can.
You have to be in service by the end of 2000.
And then 20.
Regarding the 300 megawatt facility we asked.
Elected to be substantially in service by however, as a result of certain delays we just.
We expect a portion of the product.
Million dollars investment to replace.
In service in the first quarter of 2021.
We expect no reduction production tax credits because of the recent rule changes made by the US Department of the Treasury area by one year to December 30, Onest 2021.
Aim to explore additional renewable energy.
Long term value for our customers and shareholders.
Right now and when Missouri is in the process.
Finalizing its next integrated resource plan.
For several months, we've been working closely with key stakeholders and developing our plan.
We're carefully looking at several approaches to best meet our customers future energy needs and effectively transition our generation to a cleaner responsible fashion.
We will be finalizing our plan or the next 45 days implant file.
Our IP, but the Missouri PSC fee by September Thirtyth.
We are excited about the benefits that our current wind generation projects.
Deliver to all stakeholders as well as the prospects for additional renewable just energy needs in the future.
Moving to page nine we have a robust pipeline of invest.
Spin opportunities over 36 significant value to all of our stakeholders.
And making our energy grid stronger.
These investment opportunity.
The news exclude any potential new renewable generation from Missouri integrated resource plan as well any potential new multi value transmission projects given increased the reliability resiliency of the energy grid as well as enable.
Of course.
Stronger and cleaner energy grid.
To meet our customers' needs and exceeded our expectations, but they were also Chris.
Maintaining control.
Correct of energy policies that support robust and investment and energy infrastructure will be critical to meeting our country's future energy needs Angela bearing on our customers' expectations.
Moving to page 10 sum up our value proposition the consistent execution, our strategy over many years and on many fronts as position us well for future success.
We remain firmly convinced that the execution of this strategy in 2020 and beyond will deliver superior value to our customers shareholders and the environment.
In May we affirmed our five year growth plan, which included our expectation of 6% to 8% compound annual earnings per share growth for the 2020 through 2024 period, using the 2020 EPS guidance range midpoint as the base.
This earnings growth is primarily driven by our profit rate base growth in 2000.
19 through 2024 and compares very favorably.
With our regulated utility peers.
I am confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an expense.
Further our shares continue to offer investors a solid dividends.
Our strong.
Earnings growth expectations position us well of course future dividend.
Decisions will be driven by earnings growth. In addition to cash flows and other business conditions.
Together, we believe our strong earnings growth outlook combined with our solid dividend results in a very attractive total return opportunity for shareholders again. Thank you all for joining US today now turn the call and Michael Michael.
Thanks, Warner and good morning, everyone. Turning now to page 12 of our presentation yesterday, we were.
Ported second quarter 2020 earnings of 98 cents per share compared to earnings of 72 cents per share for the year ago quarter.
The key factors by segment that drove the overall 26 cents per share increase are highlighted on this page.
And in Missouri, Arlene cents per share.
Needs and means expenses, including.
The absence of scheduled Callaway energy center, as well as disciplined cost management and.
Favorable market favorable market returns and coming on life insurance investments, which together increased earnings by 15 cents per share.
The year over year improvement also Rick.
Reflect the new electric service rates effective April onest, driven impart by increased infrastructure investments.
The year over year NPAC from electric sales was flat as the five cent per share benefit from near normal temperatures in the second quarter compared to milder than normal temperatures in the previous year were offset by a five cents per share reduction from weather lower weather normalized sales, primarily due to the impacts of Kogan 19.
Moving now to Amazon sense.
This increase reflected the impact of the FERC order on the MISO base allowed return equity, which increased earnings four cents per share as well as increased infrastructure investments.
Earnings for Amarin, Illinois, natural gas were up three cents per share due to increased infrastructure investments and lower operations and maintenance expenses.
Ameren, Illinois electric distribution earnings were down one cents per share, reflecting a lower expected allowed return on equity underperformance base rate, making partially offset by increased infrastructure investments.
And finally amarin parent and other results. All does also decreased one cent per share primarily due to increase interest expense reserve early April.
Moving now to page 13 of our presentation.
I'd like to briefly touch on key drivers impacting our 2020 earnings guidance.
As Warner stated, we continue to expect 2020 diluted earnings.
Earnings to be in a range of $3.40 to $3 in 60 cents per share.
This guidance range assumes normal weather and the remaining six months the year as well as reflects sales updates from our first quarter earnings call on May primarily related to covert 19.
On our call in May we estimated co. The 19 related sales impacted areas area would reduce our 2020 earnings per share expectations by approximately 10 cents per share and we believe this continues to be a solid estimate.
For the year, we still expect total weather normalized sales to be down approximately 2.5%.
Broken down by customer class, we expect 2020 commercial sales to decline approximately 7.5% industrial sales declined approximately 4.5% and residential sales to increase approximately 4%.
While we seen a slight change in the relative mix of sales overall, our update today is largely consistent with our expectations that line or call in may in terms of both total sales and EPS impact for 2020 due to covert 19, I wouldn't know that amortization customer sales for.
June excluding the impact of warmer than normal weather were down approximately <unk>, 0.2% compared to the prior year, reflecting the impact of co. The 19.
Broken down by customer class and compare to the prior year Ameren, Missouri June weather normalized commercial and industrial sales decline, approximately 9.5% and 3% respectively.
Which were largely offset by an increase weather normalized sales to residential customers of approximately 11%.
These statistics are notable given they represent the first full month of sales after the stay at home Warner for lift.
Before moving on let me briefly cover electric sales trends for Ameren, Illinois electric distribution for the first six months of this year compared to the first six months of last year.
Weather normalized kilowatt hour sales to Illinois residential customers customers increased about 4%.
And weather normalized kilowatt hour sales to Illinois, commercial and industrial customers decreased approximately 7% and 8% respectively.
Recall that changes in electric sales in Illinois, no matter the cause do not affect earnings since we have full revenue decoupling.
Moving on to other guidance considerations.
Select earnings considerations by quarter for the balance of the year are listed on this page.
Our 2020 earnings guidance range also incorporated incorporates an estimated 2020 allowed ROE for Amarin, Illinois electric distribution of 7.2%.
Which reflects a 30 year treasury yield of approximately 1.4%.
Finally, we also remain very focused on meeting disciplined cost management for the remainder of the year.
Moving now to page 14 further regulatory matters in April we made our required annual electric distribution rate update filing.
Under Illinois performance base rate, making our utilities are required to file an annual updates to systematically adjust cash flows over time for changes in cost of service and a true up any prior period over or under recoveries of such cost.
In late June the ITC staff recommended a 53 million dollar base rate decrease compared to our request over 45 million dollar base rate decrease.
A decision decisions as we expect into December with new rates expected to be effective in January 2021.
Earlier this year, we also filed with the ITC for an annual increase in Emory, Illinois natural gas distribution rates using a 2021 future test year and have since update our request in our July rebuttal testimony.
In June the ITC staff, and other intervenors, including the citizens utility Board and Illinois industrial energy consumers.
While the rebuttal testimony in the rate review.
Our original request as well as our July rebuttal testimony incorporated at 10.5% return on equity while staff and other interveners have recommended a 9.32% and 9.2%.
We continue.
Here to the ITC staffs and other intervene.
There's recommendation of 50.43% and 50% respectively.
At this point with new rates expected to be effective and stuff.
February of 2021.
Finally, turning to page 15, I will summarize we have a strong team on.
Well position to continue executing our plan, we continue to expect to deliver strong earnings growth in 2020 and wish that the impacts of Cowen 19.
As we look to the longer term, we continue expect strong earnings per share growth driven by robust rate base growth and disciplined cost management.
Further we believe this growth compares very favorably to the growth of our utility peers.
And Amarins shares continue to offer investors an attractive dividend in total we have an attractive total shareholder return story that compares very favorably to our peers.
And now I'll turn it back over to Warner Great. Thanks, Michael.
While we spent a great deal time this morning talking about how we're effectively addressing issues associated with cobot 19 and voters.
I think it's important to note than another matter is a top of our mine.
So.
That matter is that level profound mutual prejudice and justice and intolerance that we still have in this country and our own community.
Especially against Black people.
We've recently seen Tunis, and so thats of African Americans and to be clear Theres, absolutely no place for racism, and justice or hatred of any Kay and amarin, and our community and our country or anywhere around the world.
So much challenge has behavior when we witness it take steps to drive positive changes to eliminated.
And that is exactly what we're doing and amarin.
And amarin diversity equity and inclusion is a core value.
While we have been recognized by diversity. The ink is one of the top utilities in the country for our diversity equity and inclusion practices, we are not standing still.
In fact, we recently conducted a virtual diversity equity and inclusion summit in Saint Louis.
The theme the summit was the courage deliver your values.
Cameron leaders community leaders in nationally as came together to begin listening to each other more thoughtfully and to begin taking even more steps to address this critical issue.
We had to be made entire program available on our website I encourage you to take time and listen to the amazing stories of courage and passion for diversity equity and inclusion.
We're now ready to take your questions.
Thank you we will now be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
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Yes. Thank you. Please limit your time to one question and one follow up as necessary.
The participants today speaker equipment, you may be necessary pick up your hands at before presidents donkeys, one moment, please while we pull for questions.
Thank you. Our first question comes from the line of Jeremy Tonet with Jpmorgan. Please proceed with your question.
Good morning, Jerry hike.
Good morning, Thanks Fab me.
Just wanted to start off with the ERP here and just wanted to see.
How the outreach is progressing and any early thoughts taken share with us at this point of feedback with the filing coming soon here.
Yeah, Great question, Jeremy I appreciate the question on the ERP as well as you know this is a an extensive process with stakeholders has been going on for several months Marty Lyons and his team have been caught us a terrific job of I've just outlined some of our our perspectives and getting insights, which is really important so I would say.
As you know are we're getting to the tail end of that process and it would be really at appropriate to say just exactly what the feedback as end because we're putting together all that and and will ultimately issue. Our integrated resource plan here at the end of September, but I can say they know the conversations have been constructive the insights grades.
And now you have we look forward to this submitting that that integrated resource plan. Since you know we've we look at a lot of things in this integrated resource plan. We we certainly look at the technology, which is out there and we've certainly seen renewable energy technology and their related costs continue to come down ticket careful look at our coal fired energy center.
As in there and then be useful lives are those plants and we really think about what's really going to deliver value to our customers and the state of Missouri, and so we look forward to submitting that plan at the end of September.
Number.
That's very helpful. Thanks.
I'm, just pivoting to the Oh nm savings side with what you've guys realized so far year to date this quarter.
What portion do you think you might be able to retain on an ongoing basis and you have any kind of kind of updated thoughts on cost savings into 2021 at this point.
Sure you know maybe Michael wants you to hit a little bit on the quarter and then I can maybe address some of it the ongoing so we'll let you take the first shot at it you are absolutely Jeremy we said on that first quarter call and I think you may be thinking back to sort of the the beginning the year. You know, we said that all anomaly was going to be up we didn't say how much for the overall year.
And then we came forward to the the first quarter call and we said I want them was going to be down and you can see that obviously, we are doing a good job managing the teams working hard on.
[music].
Managing costs now, we can being very careful about head count.
Finally, where we have opportunities on because it reduce load there is to reduce maintenance cost obviously from a travel entertainment perspective, being very being very thoughtful there and so I think the teams done a nice job continue to help offset some of these things going into ahead to 2020.
In terms of sort of what we retain and what is recurring Ahmed Warner can certainly touch on 2021, but I mean is at the moment, we're just going to offset some of these sales headwinds that we have and it's across the board to I know, we focus a lot on in Missouri side, because that that's where it has the bottom line, but it is.
Across Ameren, Illinois distribution, Ameren, Illinois, natural gas as well, so well said Michael.
Jeremy the reality is that you know we obviously, we're very focused on 2020, but now we're looking ahead to.
We do see several these savings that we are realizing today that we can really carryover in into next year things like well, it's different perspective of how we think about travel well the different perspective in terms of the consultants that we have to bring in to work with us and how that can work remote may maybe I'm digital investments have real.
We've been a step change not just for our current workforce, but how we engage and work with others.
You think about.
Real estate too and facilities costs, Weve and we've had to explore because of our digital team and the investments that we're making you know we're exploring other facilities to lease in the future because we are simply outgrowing. What we currently have we we see opportunities there and that's just not going to be mess.
Sorry, prospectively, because reality as we can work very effectively remotely and so now that coupled with some really a set of Mike talking points. How the team has really done some.
Innovative things and been agile out in the field in terms of our work practices.
Finally, as a safer and they are I mean, they're going to give us the ability to work more effectively and productively and that coupled with our digital investments I think these are the types of things that we're already.
I'm, putting in our playbook not just for this year for for many years ahead, so stay tune more to come when we talk more about the future in our auto.
Great. That's very helpful. Thank you.
Thanks, Jeremy Steri safe to stay well.
Our next question comes from the line of Julien Dumoulin Smith with Bank of America Merrill Lynch. Please proceed with your question.
Good morning, Julian how are you today.
Hey, quite well. Thank you very much I hope you all are doing well.
We are thank you and I can follow good.
On the last question here on the Iraqi and I understand that with this thing fairly imminent you can't comment too much but can you give us a little bit of perspective on how that might eventually flow into your formal capex projections, especially due to the extent, which we're talking about incremental renewables and have them as your future recovery.
Sure.
Julian it with it would be just premature to really say how that would play out I mean number one no we have to roll out the ARPU plan, we'll talk about what additional investment opportunities might be there of course associated with renewable energy energy.
And then you know we will take a look at them in terms of our five year point impact. So you know as opposed to doing a piece meal will be better served for everybody. When we brought the plan to be able to do really talk about it and a comprehensive fashion and so we'll be in a good position to do that certainly during our third quarter conference call and as we move into E that'll be.
The great topic of conversation just as it was in 2017, when we announced our 700 megawatts sub of wind generation and 100 megawatts of solar we anticipate having a very comprehensive discussion, okay, alright, great and then.
Cost management and NCR.
So the the.
Savings that you talk about you've identified.
Five you anticipate holding onto.
When you think about the pressures III is this potentially an offset if you think about it.
Okay.
Could take that anyway, you want but I'm curious on how you would frame the five year view.
Given those long delayed.
Julien it's Michael.
Of not necessarily a number but absolutely I mean.
Oh nm customer affordability has always been a lever that we have used I mean, it's not.
Something that's sort of we've discovered here is all to this pandemic, but.
Obviously, there's been more accelerated focus on it but absolutely I mean, it is something that helps us worked through these sip Ajay as you note that 30 year Trust.
Can you too to offset that with it as well said, Michael and Julian as we were mindful of the.
And certainly I want to them is one of them.
Those levers for for all the reasons that Michael levers in terms of robust capital plan is.
We talked about on the call than we have infrastructure that we can move forward a little might make sense for customers. So for us do that and so we'll look at that.
And of course, we always take a look at capital Alex That's just how we operate the business in terms of looking not just at one lever but mall.
Multiple levers to make sure we're delivering up okay I'll turn it over thank you very much guys take care. Thanks Julien.
Our next question comes from the line.
Sharper resuming Guggenheim. Please proceed with your question.
Hey shot.
Alright, thanks for taking hilarious good morning, good morning.
So first just on the timing of the next rate case in Missouri updated thoughts here in the past few.
For new rates at the beginning of next year.
He has.
The potential to move into the force first quarter of next year.
Okay. How are you thinking about this now giving all.
And then Illinois, just wondering what have you.
Then hearing from the legislature and as a still but on the mines lawmaker.
Backseat as other precedent.
The forefront.
And then screen as long as a consideration. So sorry go ahead no no no. Please finished your question I apologize and our open yet just just wondering is.
In November or is it more likely to.
It gets pushed into next year.
Sure.
Let me try and take that in several pieces and richer mark and his team.
Continuing to work very hard to do have conversations.
With the key stakeholders and that just legislation for stakeholders. So couple of things said the.
In terms of energy policy I think energy policy broadly in the state of Illinois is still the top of a lot of folks mines and.
Brinci policies. So important that's why is we've said is part of our.
Talking points, and as well as which you've heard us say before as why we support so strongly the downstate clean energy Affordability Act because it really addresses many of the key issues that the state of Illinois focused on more renewable energy resources more investments and electrification as well as grid modernization.
These are things that have been really important for the state of Illinois, and we'll continue to be and so we continue to have conversations with key stakeholders around that particular piece of legislation in that we still support.
Having said that as you know there there's been a lot of dialogue and some concerns raised.
As a result of the Commonwealth Edison Federal investigation, So we understand that.
Yes.
They have what we're going to do is continue to double down on our efforts to work with stakeholders collaboratively listen to the concerns but make sure that we point.
Now the value of the current regulatory framework and our proposal and at the end of the day. Our focus is going to continue to be to try and find a solution that gives us the ability collectively in the state of Illinois to invest in critical infrastructure and give us the ability to earn a fair return.
Deliver values to our customers and the state of Illinois.
Now in terms of timing and I've learned a long time ago that I don't predict when things will be addressed by Amy legislature, when things will ultimately get that.
And obviously things are a little bit more complicated as we approach this upcoming veto session Allied of a lot of they activities going on.
Hi, guys perspective, and merchant I've talked a lot about this whether something gets done in the veto session around the downstate clean energy Affordability Act I would tell you. It's from my perspective, a challenger ours I'd like to use sports analogy is that Calder along but.
To get done and the veto session. So thats, our best perspective on that.
In terms of what we things may still happen this year, but importantly.
Where we're going to continue to focus our efforts on.
Great. That's all ahead. Thanks for its services Bank are you doing the same.
Our next question comes from the line of Paul Patterson with Glenrock Associates. Please proceed with your question.
So Paul earlier this morning.
Managing but but.
So this is sort of follow up on the Illinois thing there does seem to be this at least with.
Local group sort of the.
With the.
With the Formula rate plan.
Rich.
You outlined the benefits of that in fact at the low cost.
Capital associated with or what have you and I'm just wondering if you could elaborate a little bit more as to.
Yes.
The same people seem to be sort of interested in any issues. You also discussed.
And.
Versus the economic just is that sort of thing and so.
I'm just wondering is there some room here to.
Just sort of address.
Your concerns or is there something more fundamentally that's happening here that.
This is not clear to me with respect to this.
This concern about formula rate plans and I realize you're you guys are just one part of it there is as big Northern part of the state that has its own issues I'm just wondering if you could.
Okay.
Sure Fair Fair for question. So I guess, a couple of comments, yes, clearly we've seen.
The governor and other groups come out and say.
Yes, they are they oppose the existing framework that's out there and unlocking of the thing that we think is important recognizing that allow that maybe in some speculate in a bit.
Simply surrounding the issues with Commonwealth Edison and the investigations and how it was linked to.
When performance base rate, making it was put in place you know many years ago.
Our job and rich and his team you know they do a terrific job at this now what is going to sit down and just make sure we meet with stakeholders and a collaborative way unjust and just sit there and explain what this framework has really done and Thats really what we should do is Vincent open and transparent framework that.
Essentially every year, the Illinois Commerce Commission takes a haircut and what we're doing and you've heard me say in espoused the benefits of this this particular framework and the real Warner has been the state of Illinois, and our customers. It's been an overwhelming success and so many ways.
So it's important that we that we make sure that we level set everybody at the same time, we're going to be at the table listening to their concerns and if they have legitimate concerns you'll see what ways. We can we can try to bridge whatever gaps there may be.
And so that's just how we will continue to do business.
And as I said, a moment ago really the key from our perspective is sitting at the table and really to put in place constructive energy policies.
As an a support investment in infrastructure energy infrastructure in particular.
Gives us the ability to earn a fair return on those investments, but also to deliver significant value.
Our customers in the state of Illinois, and create thousands of jobs.
So we think there's a there's opportunities to and there will be opportunity just sit down and talk with the stakeholders.
And make sure we have a good understanding of what's been done and what we think can be done prospectively and so.
There is lot of noise look we recognized that creates challenges I get it.
But at the same time.
Because there's noise does it mean that we're not going to sit down and have a collaborative approach with these key stakeholders.
Awesome.
Thanks, so much and heavily we could thanks Binder said.
As a reminder, Andy you would like to ask your question Press Star one on your telephone keypad.
Our next question comes from the line of Insoo Kim with Goldman Sachs. Please proceed with your question.
Good morning into how are you doing today.
Hey, good morning, and are happy Friday.
Only remaining question is I guess, partially relate to the RFP, but could you just give us the latest on the.
Yes District judge as order from last fall to install scrubbers on couple of your core, including Rush Island, and the higher incorporating our thinking about this when you're developing your RFP process.
So and so and so I want to make sure you're talking about the new source reviews have because that is that what you're referring to.
Or something different.
Just the I think the violation of the clean there, yes, yes, yes, yes, yes, thats right. So.
Just a quick update on that one so as you know this is this has been a matter.
Litigation related to our Rochelle and energy center back to 2011, and we've been through the courts and so at the state of play right. Now is that we have appealed the decision to the court of Appeals and made all the appropriate briefings and filings with the courts and my sense is that there is no specific timeframe, but it'll be this.
Fall before you pricey any kind of activity associated with this.
But again there is no specific timeframe, but all the briefs have been filed here in may the first half in may and so and so I would just say stay tune no no real developments other than.
Going through the standard process.
Got it and I guess in terms of the thoughts on the generation.
Fleet transformation in the upcoming RP. Your your assumption will be value that you have violated the.
The actual you'll you'll plan accordingly based on on that assumption.
Yes, yes rest assured we clearly believe we have not violate the act and so yes that would be a fair statement in assumption that we'll have going into the integrated resource plan.
Got it. Thank you so much you bet. Thanks.
Thank you we have no further questions at this time, Mr. Kirk I would now like to turn the floor back over to you for closing comments.
Thank you for participating in this call a replay of this call will be available for one year on our website. If you have questions. You may call. The contacts listed on our earnings release financial analysts inquiry should be directed me Andrew Kirk Media should call. Aaron Davis again, Thank you for your interest and Amarin and have a great day.
Ladies and gentlemen, this does conclude todays teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.