Q3 2020 ALLETE Inc Earnings Call
The third quarter 2020 financial results call today's call is being recorded.
Certain statements contained in this conference call that are not descriptions of historical facts are forward looking statements such as terms to find in the private Securities Litigation Reform Act of 1995, because such statements can include risks and uncertainties actual results may differ materially from those expressed or implied by such forward looking statements.
Factors that could cause results to differ materially from those expressed or implied by such forward. Looking statements include but are not limited to those discussed in filings made by the company with the Securities and Exchange Commission.
Many of the factors that will determine the company's future results are beyond the ability of management to control or predict.
Listeners should not place undue reliance on forward looking statements, which reflect management's views only as of today heroes.
The company undertakes no obligation to revise or update any forward looking statements or to make any other forward looking statements, whether as a result of new information future events or otherwise.
At this time I'd like to turn the call over to Bethany Owen President and CEO.
Good morning, everyone and thanks for joining US today with me are elite senior Vice President and Chief Financial Officer, Bob Adam and Vice President Controller, and Chief Accounting Officer, Steve Moore. It also with US. This morning is Frank Fredrickson, Minnesota powers, Vice president of customer experience.
Corresponding slides for this morning's call can be found on our website at ALLETE dot com in the Investor section.
To follow along we'll call out each slide number as we go through today's presentation.
This morning's ALLETE reported third quarter 2020 earnings of 78 cents per share on net income of $40.7 billion.
Last year's results were 60 cents per share on net income of $31.2 million. These results for the quarter support our previous earnings guidance range of $3.25 to $3.45 per share. Excluding the 16 cents per share charge related to the Minnesota power rate case resolution.
Yeah.
Before we get into the details of the third quarter financial results and our positioning as we near the end of 2020 I'd like to share some thoughts on the macro business environment on the horizon, along with a brief update on our clean energy progress.
If you please refer to slide two.
After almost a full year of managing all aspects of the COVID-19 pandemic within the ALLETE family of businesses, we remain steadfast in our commitment to health and safety to date, our operations have been largely unaffected as the actions. We took early on have helped support the health of our employees and.
On the safety and reliability of our operations I am so grateful to all of my Amazing co workers, who have continued to serve our customers with excellent in this challenging time, all while living our shared values of integrity and safety in everything we do.
And our second quarter conference call, we contemplated the potential of a second wave of the COVID-19 pandemic. This risk appears now to be a reality as koby cases have spiked dramatically both at home and abroad.
We celebrate this morning very positive news regarding a promising vaccine however, the depth and duration of this pandemic remain unpredictable. So we will continue to prioritize all that we're doing throughout our organization in order to mitigate these ongoing challenges as we've done successfully thus far we will be bought.
Well measured and balanced as we continue to execute our clean energy strategy and position the lead for the future.
We are acting decisively while balancing the interests of our many stakeholders in this time of ongoing kobin related disruption and we will continue to be forthright and to tell it like it is.
What companies do during trying times like these will either build trust or a road trip and we at ALLETE intend to build on our strong foundation of integrity. Our extensive track record of success and our long standing reputation as a company trusted by our many stakeholders.
As you know we have a long term five year objective of achieving consolidated average annual earnings per share growth of 5% to 7%. This.
This includes a regulated operations growth objective of 4% to 5% and then ALLETE clean energy and corporate and other businesses growth objective of at least 15% over the long term. We at ALLETE are committed to these growth objectives.
While the company's long term growth objectives remain unchanged. Our October 2025 year projections indicate achieving these objectives is expected to be challenging our October 2020 projections of elite long term consolidated average annual EPS growth rate using 2000.
19, as a base year is approximately 4% with a regulated operations growth projection of approximately 3% and an ALLETE clean energy in corporate and other businesses object projection of approximately 30%.
Our earnings through September Thirtyth, 2020 have been negatively affected by COVID-19, and we expect our earnings to continue to be impacted for at least the remainder of 2020.
The pandemic is materially affected Minnesota, Power's industrial customers and as a result, our sales to these customers.
Earlier this year U.S. Steel Corporation idled, its keewatin taconite facility and Verso Corporation idled at the paper mill in Duluth, Minnesota, We were so pleased when late last week U.S. deal announced the Keetac would resume production in mid December, but we expect verso to remain idled through the rest of 2020 and potentially.
The part if not all of 2021. In addition, many of our commercial municipal another smaller industrial customers had been operating at reduced levels or were temporarily closed or idled during 2020, and we expect at least.
Customers to be similarly affected into 2021.
We will continue to support and work closely with all of our customers as we navigate the challenges ahead together.
I'd like to turn for a moment to R.E.S.G. and sustainability reporting strategy.
Sustainability is the foundation of a lead strategy and we have made great progress in furthering sustainability in all of its dimensions and leading the transformation to cleaner energy in our region.
We've also made great progress identifying the best framework and guidelines for sharing our sustainability journey with all of our stakeholders.
Elite sustainability team recently developed a path for our company to begin aligning our future sustainability reports with Sabby and P.C.F.D. guidelines and standard weeks.
We expect this alignment and according to begin in the first half of 2021 and continue into the future as expectations guidelines and frameworks for this reporting mature and evolve.
We are confident in alletes future and in our continuing leadership role in the clean energy economy, and we will continue to work closely with all of our customers as they navigate the ongoing pandemic, an economic recession and.
In the meantime, we will also continue to be as transparent as possible regarding our action plan communicating and engaging with our employees our customers our regulators our investors and all other stakeholders.
Now I'll turn it over to Steve and Bob for further details on financial result, 2020 guidance and our growth outlook Steve.
Thanks, Bethany and good morning, everyone I would like to remind you that we filed our 10-Q. This morning and encourage you to refer to it for more details.
Please refer to slides three and four for details regarding earnings per share on a quarterly and year over year basis for items impacting results.
Today ALLETE reported third quarter 2020 earnings of 78 cents per share on Anikas net income of $40.7 million last year's results were 60 cents per share on net income of $31.2 million.
Results for the third quarter of 2020 include items that affect quarter over quarter comparisons such as a change in fuel adjustment clause recovery methodology implemented in 2020.
And timing of income tax expense, which varies quarter to quarter based on an estimated annual effective tax rate.
These timing differences had a positive impact of approximately 10 cents per share for the third quarter of this year as compared to last years third quarter.
With a regulated operations results positively affected by 15 cents per share in corporate and other results negatively affected by five cents per share.
Our year to date earnings have been negatively affected by the ongoing COVID-19 pandemic and related disruptions.
We expect earnings to continue to be impacted for at least the remainder.
2020.
Overall, we estimate that the COVID-19 pandemic negatively affected earnings by approximately five cents per share year to date.
We anticipate our full year results in 2020 to be negatively affected by approximately 15 cents per share.
As our fourth quarter results expect the Keetac facility to restart in December 2020, and Verso Corporation's paper mill in Duluth, Minnesota to be idled. The rest of the year. We also expect lower sales to our commercial other industrial and municipal customers for the remainder of the year. Please.
Please keep in mind that these expectations are reflected in our 2020 earnings guidance, which Bob will discuss in a moment.
A few details on Minnesota, Power's deferred accounting filing and rate case timing.
In response to lower sales in 2022 to the COVID-19 pandemic.
And in anticipation of potentially lower sales in 2021, Minnesota Power's submitted a petition last week to the Minnesota Public Utilities Commission.
Requesting authority to track record as a regulatory asset last large industrial customer revenue, resulting from the idling of the Keetac facility and versatile corporations paper mill in Duluth, Minnesota.
Keetac facility and versus paper mill represents revenue of approximately $30 million annually.
Net of associated expenses, such as fuel costs.
Sort of power proposed in this petition to defer any lost revenue is relating to the idling of the Keetac facility and the Versal paper mill to its next general rate case or other proceeding with the commission for review for recovery.
Minnesota power anticipates filing a general rate case in November 2021, with a 2000 2022 test year.
A few details from our business segments.
Alletes regulated operation segment, which includes Minnesota power superior water light and power and the company's investment in the American transmission company recorded net income of $42.4 million in the third quarter of 2020 compared.
Compared to $32.4 million in the third quarter of 2019.
Earnings reflect higher net income at Minnesota power, primarily due to higher rates implemented as part of our recent rate case.
In quarter over quarter timing impacts related to income tax expense and fuel adjustment clause recoveries.
The quarter reflected lower kilowatt hour sales to commercial and industrial customers through the COVID-19 pandemic.
Which was partially offset by increased residential sales.
The quarter also reflected lower revenue from other power suppliers due to the expiration every contract in the second quarter of 2020.
Timing differences previously mentioned benefited our regulated operation segment by approximately $8 million in the current quarter as compared to last year.
ALLETE clean energy recorded third quarter 2020, net income of $1.1 million compared to a net loss of $1.2 million in 2019.
Net income in 2020 reflects additional production tax credits higher kilowatt hour sales due to higher wind resources compared to 2019.
And earnings from the new Glenn Olin and South peak wind energy facilities.
Corporate and other which includes being <unk> energy and ALLETE properties recorded lower earnings of $2.8 million as compared to 2019 Prime.
Primarily due to lower earnings on cash and short term investments and quarter over quarter timing impacts related to the recording of income tax expense.
Which varies quarter to quarter based on an estimated annual effective tax rate as previously mentioned.
I'll now turn it over to Bob to discuss details on our 2020 guidance and outlook Bob.
Thanks, Steve and good morning, everyone.
What a journey indeed, as we move towards the end of 2020, a multitude of business disruptors to navigate through.
It has been decisively planning and executing and repositioning through.
Throughout the year, both operationally and financially.
Despite these macro challenges I am pleased to provide an update of our large 2020 renewable energy projects Noble's too and diamond spray.
Over $600 million of investment representing approximately 550 megawatts of carbon free wind generation.
The novels to project, which supports Minnesota Power's Energyforward initiative.
He is on track for completion by end of this year with almost all of the 74 turbines and all completed and commissioned.
Tax equity is on track for closing by year end.
As you know and ALLETE subsidiary is partnering with to NASCAR and we'll have an investment in this 250 megawatt wind facility located in southwestern Minnesota disappear.
This facility will provide carbon free wind generation to Minnesota power under a long term power sales agreement and will contribute to a lease earnings.
At the start of 2021.
The construction of ALLETE clean Energys largest project to date the Diamond Spring Wind farm located in Oklahoma was just completed last week.
All 101 Turbans Commission.
The 300 megawatt wind generation project with a total cost of approximately $450 million.
Is expected to be operational before the end of this year.
And we expect incremental earnings from this project to commence at the beginning of Twentytwenty one.
ALLETE clean energy continues to advance on the newest when project 300 megawatt cattle facility.
Which is also located in Oklahoma.
The full development of this wind project would be similar in size and skill to diamond spring.
Despite the challenges COVID-19 has created for the broader economy corporate customers are focusing on their sustainability commitments and ALLETE clean energy will continue to optimize its PTC safe Harbor turbines as we move forward.
While exploring other ways to meet this growing demand.
As you know our nonregulated growth through ALLETE clean energy has increased at a much faster pace than originally expected as a result of the successful execution of the PTC qualified wind turbine strategy and our hard earned reputation.
As a profit mirror developer.
And operator in the U.S.
In fact, as many of you know elite now ranks near the top as one of the largest investors and renewables as a relative percentage of its total market capitalization.
Related to the elevated pace of investment capital flowing broadly into the wind projects across the country. Our ALLETE clean energy business is beginning to experience return pressures from increased competition.
More forward price curves as a growing amount of investment capital is being directed into wind generation opportunities.
In addition, current and potential new project developments are negatively affected.
My are currently lower ALLETE stock price.
May result, in such projects, not being as accretive or otherwise unable to satisfy our financial objectives criteria to proceed.
We believe that the renewable in industry continues to have tremendous potential driven by societal demands to address climate change and we are actively evaluating additional growth opportunities with better risk adjusted returns on capital than currently available on when projects for ALLETE clean energy.
Such as solar storage solutions and grid resiliency.
We believe that the renewable energy industry is entering a new phase of growth and ALLETE clean energy will serve as a strong platform for future growth in Italy. It alone.
ALLETE clean energy will continue to optimize its existing wind facility portfolio seek development of its remaining safe Harbor production tax credit qualified turbans.
And explore other renewable energy opportunities through expanded service offerings to further enhance its growth and profitability.
We're already deep in the process of evaluating these opportunities, which would extend and diversify our growth in the renewable energy space beyond will wind development projects.
We anticipate sharing more with you on 2021 as it remains a lot to play out with likely changes and renewable policy, including new investment incentives and related tax implications that will influence our strategic migration in this dynamic energy space.
Onto our earnings guidance for Twentytwenty because of our actions early on in the COVID-19 pandemic and large power nominations. We received for the first eight months our businesses generally performed as expected in the third quarter and year to date, reflecting COVID-19 impacts already discussed I will.
I'll provide an update on 2020 guidance and outlook in a moment.
But first I would like to share some details of the leads finances and liquidity position.
Please refer to slide five.
Our finances remain well positioned with a strong balance sheet and sufficient liquidity bolstered by decisive financing actions taken already this year.
As of September 30, we had significant liquidity with cash credit facilities and other outstanding lending available.
Regarding the tax equity financing for our renewable projects. We are currently finalizing approximately $350 million and tax equity arrangements for investments in novels, too and ALLETE clean energy is diagnosed spring wind project, which we will receive in used to retire construction financing.
Before the end of the year.
I would now refer you to slide six regarding our 2020 guidance update.
We continue to expect the leads 2020 annual adjusted earnings guidance.
Got to be in the range of 325 to 345 per share excluding 16 cents per share charge related to Minnesota Power's rate case resolution net of tax.
This guidance reflects lower kilowatt hour sales to Keetac and burst of corporation operations that remain idle as well as other lower demand from other customers.
Partially offset by lower operating and maintenance expense.
As Bethany mentioned US Corporation has indicated a restart the keytech.
And while this is great news any impact on 2020 is expected to be immaterial at this time.
From a capital expenditure standpoint, we will continue to monitor the economic trends impacted by coal that 19.
And are evaluating possible deferrals, but expect any actions on this front to be immaterial at this time.
Ill hand, it back to Bethany Bethany.
Thank you, Steve and Bob Bob I updated you on plans for ALLETE clean energy as part of our evolving sustainability strategy and I'd like to share some additional insights regarding Minnesota Power's continuing transformation to cleaner energy.
Minnesota power will achieve a remarkable milestone at the end of this year, when we begin delivering 50% renewable energy to customers and we have no intention of stopping there we are committed to a sustainable future of reliable cost competitive and increasingly lower carbon energy.
Minnesota Power's integrated resource plan is scheduled to be submitted to the Minnesota Public Utilities Commission in February in that filing. We will include plans for transmission and distribution resiliency and additional renewable energy and infrastructure opportunities. We will also provide scenarios for the thoughtful transition of Boswell unit three.
And for as well as the securitization plan.
This I RP is the next step in the evolution of Minnesota, Power's Energyforward strategy that will significantly reduce carbon benefiting customers communities and the environment, while keeping rates competitive and generating potential earnings growth over the long term.
Throughout 2020, we have engaged a broad range of stakeholders regarding the development of this resource plan from customers to communities to regulators to employees and many others. We anticipate a robust engagement in this process, which will most likely occur throughout 2021, and we'll update you on this and.
Other SG related initiatives throughout the year.
As we look to the future we believe energy companies can and must play a leadership role in the recovery of our economy, we at ALLETE intend to build on our reputation as a trusted business partner and regional leader to support the recovery of our customers and our communities are.
Our commitment to all of our stakeholders and to sustainability in all its forms has never been stronger or more important than it is today.
Thank you for your interest and your investment in a week at this time I will ask the operator to open the line for your questions.
Thank you as a reminder to ask a question you will need to press Star then one on your Touchtone telephone to withdraw your question from the queue. Please press the pound key please stand by while we compile the queue in a roster.
Our first question comes from Chris Ellinghaus with Siebert Williams. Your line is now open.
Hey, Rick how are you.
Hi, Chris.
Bob can you describe for us what changes.
You see in the growth profile and you know I understand that.
Oh, it's having some near term impacts, but does that really affect the longer term growth profile.
Yes, Thanks, Chris.
You know, it's it's several things, which I'll call I'll summarize here you know.
First it first and foremost recognize that as we calculate the five year growth rates were again using 2019 as a base.
So clearly 2000 22021 in terms of Corbett, who is having a having a dampening impact on our revenue on sound and it does impact our growth now thats, a short term thing, but but.
In all transparency as we talk about our growth and we look at it over the five years that is that is having an impact.
On the regulated side of our business.
If you go back to what we would have had in our IR deck in terms of Capex, we had about $2.4 billion for the Capex. That's now at about 2.11 billion and Capex 2.2, 0.1 to 2.2.
And so what we've done there as we've moved dying for the DC line.
Expansion out.
A couple of years and then we were contemplating the possibility of going picking up from 550 megawatts to 900 megawatts, we backed that up a bit to 750 megawatts as we know it today there is still the potential for that higher level of.
Of capacity addition, but we want to see how the the MISO process and evaluation of the transmission systems.
Evolve here before.
Committing and keeping that 900 megawatts in the plan.
So we have we have that going on.
We have.
You know the when we do these PTC projects overall.
You know the larger ones in particular, we there's there's a certain amount of equity that we issue common equity to do those projects.
And with the stock price our current stock price.
And mind those projects are slightly less accretive.
Over the five year period of time and that is having a drag effect as well.
In terms of the growth on the on.
On the non res side now we're very pleased with the fact that we're still looking at about 30% growth and to be clear, we haven't given up on the wind segment, either we will be doing wind farms is just that.
As we look at what we had guided tour before two to three projects a year, we think that might be a little heavy as we reallocate our capital into other higher returning segments on the when space.
So part of that Bob the equity price is obviously much lower than it had been or is your analysis that comes up with that lower growth rate, just assuming sort of status quo on the stock price and might that mean later, if there is a significant market recovery.
Your your growth calculation will be adjusted again.
Yeah. That's a good that's a good point I mean, we are as you know we are conservative team here.
And so as we look at coal, but in the short run here if coal that kind of continues to remain a hangover either on our customers and that will have an impact on our price. So we're relatively conservative there I.
I would say as we go into 2021.
In the first and second quarter and as we look at our guidance, we're going to be Relooking at these growth rates again.
And clearly to the extent that the coven covert wayne's now or at least with with the.
I'll spend here by Pfizer. This morning with regard to what vaccine I think thats going to have a market impact.
On industrial production in the country the economy.
And then by extension us as well, so we're optimistic but wanted to be forthcoming about.
The current challenges in our stock price.
Okay.
The the election.
Provide some hope that there could be some stimulative infrastructure legislation have you got any thoughts on how that might influence ace and and the prospective returns if there's.
A big surge in renewables demand at that point.
Yeah, well, we definitely believe that.
Renewables is going to count as a segment is going to continue to be very attractive and continued to gain steam.
So were a lot of what we're doing when you step back from from what I said about wind a lot of what we're doing is just another traditional or classic.
Capital allocation.
Within the East business model to say look we we like when does you know where we are.
100% when focused right now.
We see with infrastructure demand for renewables, so theres other ways to play in renewables that are higher return and so we're going to allocate some other capital.
From the wind area into other higher growth segments as we go forward.
Okay, one last thing.
Obviously, we've got some good news on vaccine.
Got a new president.
Have you got any thoughts on.
We've been hitting new records on on the infections.
Have you got any thoughts about what he might do come January if we still have these rather horrible numbers and and how that might influence the December and April nominations with the vaccine is aside.
Hey, Chris This is Bethany. Thanks for your question, where we're heartened by news even this morning that add the incoming president elect is assembling a coalition to scientists to work on kind of how we turn this second wave around that paired with.
As you mentioned the positive news I'm coming out regarding a vaccine we believe and there's there's hope and really really strong progress. So we're excited about the collaborative nature and with the Senate income.
In connection with the stimulus package and all of that that the that the incoming administration is demonstrating I'm going to turn it to Frank to talk a little bit about kind of what we might see from a.
Biden administration in terms of prospects for our large Minnesota Power's large industrial customers. Thank.
Thank you Bethany good morning, Chris So as we look ahead.
I think one of the key positive signals that.
Thank you Bob shared with you. This morning is us steel decision to restart that are Keetac facility in mid December and Thats one of those positive signals, we're seeing in the steel industry as we're seeing overall recovery and operating rates up north of 70%.
And that.
Sector of our economy as we look at you know the election and the impacts going forward I think there's lots to advise on what will come out in infrastructure package to help further bolster overall steel demand crossamerica steel demand has picked up even.
Amidst the pandemic just as consumer behavior shifted and we've seen a lot of automotive purchases, resulting in a strong automotive sector and the other signal that's out there just this morning with the vaccine is.
Some upward died signals pricing in the oil and gas sector on the overall steel demand in the energy sector has been fairly low as we've been in this pandemic. So I think those are some of those signals. We're seeing obviously, we'll be waiting on guidance for next year and when we get our December nominees.
And from our customers and continue to update from there.
Okay. Thank you very much for the details I appreciate it thanks.
Thanks, Chris.
Thank you and as a reminder to ask a question you will need to press Star then one on your touched on telephone to withdraw your question from the queue. Please press the pound key our next question comes from Brian Russo with Sidoti. Your line is now.
Hi, good morning to.
Good morning, Brian.
Hey, I think you had previously targeted for 200 megawatts.
Of owned and operated generation at Ace I think by 2022.
Is that still the target or is it.
Is it shifted kind of with the.
Diversification touch strategy to other types of renewables.
Yes, Brian This is Bob I think that's that's probably still fair.
With with with cattle being completed we are going to be at 1300. So we're going to be you know.
15, Hunter is going to be right in our windshield, if you will.
Talk about it but I appreciate the question again I just want to I just want to reemphasize, we're not saying we're exiting when entirely.
We are very strict as you know as it relates to our underwriting criteria.
And with margins and returns.
Declining.
We're just going to continue to be selective.
In that regard, but but yes.
Yes, So I think I think thats still a fair a fair way to look at it.
Okay, Great and then just to clarify the $30 million.
Net revenues associated with GTECH and for so.
You filed for deferral.
What time period is that for you meant you said annualized for digital.
Well look back or forward looking just trying to get it.
A better feel for where that 30 million so right yeah.
Yes, Hi, Hi, Brian next to succeed more so 30 million is just the annual number based on their north.
Normal full load.
Which is obviously margins if you will note a net of fuel, but so its just their typical annual revenue that we would expect to get from them.
And is that.
50, 50, verso and key tankers keetac more heavily weighted there.
Yeah, I'd call it pretty much even they are both.
Give or take 50 to 70 megawatts or so.
Okay, great. Thank you very much.
[music].
Thank you and our next question comes from Kevin Fallon with Citadel. Your line is now open.
Good morning.
Could you just clarify what what is the base in 2019 that that you are expecting to grow off of now.
Yes, 335, Kevin.
So so the 335, you should be able to grow at roughly 4% for.
For the next couple of years, and then beyond that you're hoping to get back up to the five to seven is that the right way to interpret what you guys are saying.
Yeah. So the the the 4% as a CAGR right. So it's to 2024. So you will see swings up and down in between that period of time, but it's so it's a five year period from 19 to 2024 and as they think Bethany mentioned, our objective is still 5% to 7% growth rate long term.
Okay, but but within this the through 2024, the 4% is an average number so there could be above and below is that the way to the DUC count you're making fits.
Thats, a case, where it isn't a year to year. It's a it's a five year CAGR rate from 19 to 2024.
Okay got it and and with the the the the outlook for 21 is that.
Because it's a rate case year I assume if you get your deferrals.
The 30 million, obviously is a big help or what have you but is it like the absence of getting the deferral that type of thing that pushes you below 4% and the the success in getting it is what pushes you above 4%.
Yeah, what were we havent disclose or 2020 earnings yet so we're still obviously working on that.
December Onest demand nominations will be key to that so I wouldn't say.
4%, either way and you'll hear more about that in February.
But you did hear US talk about a November 2021 rate case filing that's with a 2022 test year interim rates beginning in January Onest 2022. So if we file in November of course, no relief from a rate case in.
In 2021, the look you can look at that deferred accounting filing is essentially a little over our rate case that we could file in March.
Okay. That's helpful and just I don't know if you've given more granularity, but what is the amount of equity that you guys are issuing annually that that that that's causing a little bit of a drag.
I don't know if you've been granular on an annual basis.
Yes, well Weve Kevin.
Kevin This is Bob so we we have our drip program and we have been issuing pretty consistently about $20 million per year. So that's that's don't you know that the run rate of equity issuance.
Got it got it and then in terms of the potential for asset sales is there is there any other potential sources of financing beyond just the issuing the equity are there you have the coal business or whatnot I don't know if there's something along the lines of there that may offer some opportunities.
Well I would say.
We look at everything.
Nothing nothing specific on a company level, but we are we are continuing to look at it.
As I said before optimizing the portfolio at ALLETE clean energy some of the assets. They have there of course.
Ill might represent an opportunity so so we.
You know the we're not actually you know outside of outside of the drip program.
The equity issuances that we see going forward a relatively modest we.
We do have some equity equity issuances as you'll see on our financing decks.
About 50 million associated with Kauto, when the 2021 timeframe.
But thats relatively modest if you think about our total market cap and to your point to the extent that there are other ways that we can look at other assets that are either underperforming or what have you would certainly look there first.
And the Caddo related equity in 21 is that expected to be internal programs are like ATM or should we expect block there. Yes, that's an ATM that's an internal internal at the market program got.
Got it and just the last thing for me the way things stand with the update on key tech assuming the other other taconite customers keep their existing non.
Nations coming into 21, you would be fully nominated correct with the incremental news on key tech.
Hey, Kevin Frank Fredrickson here, yes in our in our mining sector, we'd be fully not fully nominated as Bethany mentioned earlier were still not certain where the verso paper facility is going to be.
Fair Fair that part was clear listen thank you very much appreciate it.
Thank you.
Thank you and I'm showing no further questions in the queue at this time I'd like to turn the call back the best known for any closing remarks.
Steve Bob Franken I, Thank you for being with US This morning and for your investment and interest in ALLETE, We look forward to our E meetings with many of you. This afternoon and tomorrow take care and we wish you all the best.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude your program you may now disconnect.
[music].