Q4 2020 Avangrid Inc Earnings Call
After the Speakers' presentation there'll be a question and answer session to ask the question. During the session you will meet the press star one on the telephone.
If you require any further assistance please press star zero and.
I would now like to hand, the conference and for participating today, Patricia <unk> Vice President Investor Relations. Thank you. Please go ahead.
Thank you Julianne and good morning to everyone. Thank you for joining us today to discuss the <unk> fourth quarter 2020 earnings results presenting on the call today are Dennis Arriola, our Chief Executive Officer, and Doug Stuver, Our senior Vice President and Chief Financial Officer also joining us today for the question and answer part of the call will be Bob Kump Deputy.
The executive officer, and president of on grid for one.
100, the host President and Chief Executive Officer of oven grid, renewables, and Tony Marone, President and Chief Executive Officer of Op and grid network note that Thomas will be together for the call today, and keeping our social distancing, while others will be joining us remotely.
If you do not have a copy of our press release for a presentation for today's call. They are available on our website at www Dot oven Green Dot com during today's call. We will make various forward looking statements within the meaning of the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 995 based on current expectations and assumptions, which are subject to risks and <unk>.
Uncertainties actual results could differ materially from our forward looking statements of any of our key assumptions are incorrect or because of other factors discussed and novel group's earnings news release and the comments made during this conference call and the risk factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission each of which can be found on our website, Bob and good day.
And do not undertake any duty to update any forward looking statements.
Today's presentation also includes references to non-GAAP financial measures you should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of non-GAAP financial measures to the closest GAAP financial measures I will now turn the call over to debt.
Well, thanks for Tricia and good morning, everyone. We appreciate you joining us for the call. There is no doubt the 2020 was a challenging year for everyone as we work to address Covid.
And Thats, our personal lives to the sort of strange new reality I want to start this year and call by thanking our employees across the country nearly 7000 strong for your unwavering commitment to safely serving our customers and for months. After each other thank you for making a difference every day.
And since I joined <unk> and grid and July we've been focused on driving alignment accountability and execution to create long term value at.
At our Investor Day in November we shared our new plans and strategy for the future, we discussed the need of reasonable and achievable goals and the importance of delivering on our commitments and over the last several months to refocus on the details the fundamental blocking and tackling that helps make a good company, great and while we still have.
Long way to go I'm really pleased with our direction.
We recognized one quarter doesn't make a trend, but our results and Q4 2020 and for the full year relative to the guidance. We provided at our Investor day is encouraging and needless to say I am excited about our current position and about our prospects going forward. We truly believe we're in the right place of the right time and.
This energy transition, where and the sweet spot claim and connected our networks business representing over 80% of offering reserving is focused on serving our customers and getting better every day will be larger and more diversified and once we complete our merger with PNM resources.
Our renewables platform is strong and we're leading the new offshore wind industry, we're seeing strong tailwind from a clear focus on clean energy and all directions from consumers and governments and corporations and from the investment community.
Over the next five years, we will invest over $20 billion more than $12 billion and networks and the over 8 billion and renewables.
Networks, we will continue to be the predominant earnings driver and our business model.
And the PNM merger and our organic investment opportunities will provide op and grid with significant opportunities for predictable growth, resulting in the 6% to 8% EPS CAGR from 2020 to 2025 that we provided on Investor Day last November 5th.
We will get all of this done while maintaining a strong balance sheet and of reliable dividend.
And with the unwavering support of the <unk> and group of and grid is uniquely positioned to become the leading sustainable energy company in the U S.
Now 2020 was a year of transition and an inflection point for the future it off and grid.
For 2020, net income was $581 million of $1 88 per share and our adjusted net income was $625 million or $2 and <unk> per share, which exceeds the guidance we affirmed on November five and.
In addition, we invested $3 billion to drive future growth in networks and renewables.
And networks, we successfully settled our New York rate cases, and our new England and clean energy connect project completed all of the major permitting and started construction of last late last month.
And renewables, we signed new Ppas for approximately 750 megawatts and installed approximately 620 megawatts of new wind and 370 megawatts of Repower projects, bringing our total generation capacity to eight five gigawatts.
We also made significant progress on our three offshore wind projects and where and the final approval stages for our vineyard wind one project across the board we've demonstrated leadership as a company driven by our purpose to serve our customers and society and just yesterday op and grid was recognized by Ethisphere as one of the world.
And most ethical companies in 2021 for the third year in a row. We were also named one of America's most just companies on the annual Forbes just 100 list. These accolades are a tribute to all of our employees at <unk> and grid.
Reinforcing our commitment to ESG and depth, we have set several bold targets for our company, including carbon neutrality by 2035.
And in regards to our PNM resources merger key filings have been completed with federal and several federal approvals are received.
In 2021, and we're focused on several key objectives that will build on our accomplishments in 2020.
First and foremost safety and reliability are at the heart of Bob and groups core values will continue the safely and reliably serve our customers while managing the ongoing impacts of the pandemic, making the health and safety of our employees, our customers and our communities our utmost focus.
We plan to successfully close the PNM merger and the second half of this year further strengthening our regulated profile and our geographic diversity.
And networks, we're laser focused on delivering more predictable earnings going forward and earning our authorized ROE at all of our utilities we.
We expect to invest about $2 billion this year growing our rate base to approximately $11 4 billion.
In addition, we will continue to advance our major clean energy projects like and CEC and vineyard wind one.
And renewables, we continue to improve our operating performance and target the delivery of about 690 megawatts of new wind and solar projects in 2021 with a total investment of close to $1 billion in renewables this year.
Lastly, we are affirming our guidance for 2021, EPS and adjusted EPS of $2 15 to $2 35.
And I'll remind you that this guidance assumes that we close the PNM resources merger, along with the required financing at the yearend.
Now with the buying the administration and place we see strong prioritization of clean energy policy going forward.
Our strategy positions operating grid to fully leverage the this momentum for the long term benefit of our customers employees communities shareholders and the environment.
The administration has outlined the targets to Decarbonize the power sector by 2035 and reach net zero economy wide by 2050 back initially by several climate focus executive orders and the proposed two trillion dollar of investment and clean energy over the next five years.
For us this translates into an acceleration of renewables deployment grid enhancements and transmission projects to support growing demand for clean energy.
It also provides for additional evs and charging infrastructure as well as investments and energy efficiency and battery storage will also see advancements and green hydrogen to enable cost parity with great hydrogen and by 2030.
And this is an area. We're looking at seriously as we think about future growth opportunities. The EBIT drove of the group has already taken a leading position in Europe, which of the significant investments and exciting projects and green hydrogen and we plan to leverage on their learning curve do identify opportunities for the on and grid here and the United States.
And we're also aligned on the state level, we expect the state policy will continue to drive strong demand for renewables and incentives as states work to reach their individual climate and environmental goals.
And networks and we're executing on our strategy, which is designed around three growth drivers for.
And our roads are authorized ROE, which means earning at least the approved regulatory ROE at each of our utilities. We will do this through the implementation of our rate plans, improving reliability, and resiliency and enhancing operational efficiency and customer satisfaction.
And secondly by investing transmission, such as <unk> and other opportunities to enable the clean energy transition.
And thirdly by the addition of PNM resources. This merger increases op and groups share of regulated earnings to over 85% with opportunities to add new clean energy at PNM phases out its existing coal generation we.
We expect the rate base, including PNM to grow roughly 14% annually from 2020% of 2025 to almost $21 billion.
Now as we've discussed previously our roads the authorized ROE is at the data driven plan focused on accountability efficiency continuous improvement and alignment to our rate case by the end of 2021, we will be positioned to earn our allowed ROE at all of our regulated utility.
Yes.
And New York, we secured a three year rate plan with the make whole provision back to April 2020.
With the approval in November we had time to ensure our plan more fully consider the impacts of COVID-19, and allowed us to provide needed relief for customers the.
And the plan, which covers nearly half of auto and grids rate base works with and eight 8% ROE with a 48% equity layer.
It provides for critical investments and infrastructure and reliability enhanced vegetation management increased allowances for staging and storm cost recovery and incremental workforce and key areas to support our crews and the field.
The investments amount to about $1 billion per year, driving economic recovery and job creation and our service territory.
And main we continue to meet or exceed our service quality metrics on a 12 month rolling basis, we expect to file to remove the 100 basis points downward adjustment by September which if approved would increase CMP has allowed Roe to 925%.
Lastly, we're taking steps to improve operations efficiency and customer satisfaction at all of our utilities.
Transmission is another exciting growth area for Rob and grid the.
Estimates of <unk> over $44 billion of year as needed and North America through 2000 and for it.
And I've been grids experience of successfully executing large and complex projects positions us to help address this challenge and turn it into an opportunity.
Now once complete and 2023 or $1 billion, new England, the clean energy connect or CEC will be the largest onshore clean energy project in new England.
So any CEC, we're removing the equivalent of 700000 cars from the road and bringing clean energy jobs and economic benefits to the new England region.
With all major prove it and complete the first pools have been raised and construction work is underway hundreds of miners are already employed by any CEC and its subcontractors and recent polling shows support for display and Super Highway is growing.
Now, we're confident and our ability to deliver this product as we previously did for our $1 $4 billion main power reliability project with which helped upgrade cmt's transmission system and 2015.
And while we recognize there is of vocal minority of the state that is basically against any infrastructure development anywhere we remain confident that any CEC will be completed and will provide affordable clean energy and substantial economic benefits, including jobs to the people of Mei.
Now we're also looking at potential new transmission opportunities.
Recently, we announced the new proposal for New York.
And the Excelsior connect.
<unk> hundred 10 megawatt of underground high voltage DC line that would link upstate New York with New York City.
We've opened a solicitation for renewable developers the bid for transmission service with the aim of participating and New York Tier for RSP, which speaks at least 500 megawatts. Now. This is a new York solution for a New York opportunity and this early stage of opportunity is not currently and our long term plan. So.
It's another example of potential future value creation, and so far we're seeing.
And the strong interest for renewable developers that want access to the transmission.
Now, let's turn to our merger with PNM resources.
We're very pleased of the PNM resources' shareholders overwhelmingly approved the transaction earlier this year.
We have submitted all necessary filings at the federal level as well as with new Mexico, and Texas regulators and so far our key approvals are progressing according to our plan. We have received the Hart Scott Rodino clearance as well as clearance from the committee on foreign investment or <unk>.
We expect to receive FERC and the FCC approval by March and the nuclear regulatory Commission approval is expected by June.
At the state level, we expect the approval of the public utility Commission of Texas, and May or June and from New Mexico, and the second half of the year.
Now before we continue I want to recognize and thank our network's CEO, Tony Marone, who is retiring this month after and outstanding 33 years with the company.
Tony has played a key role on our leadership team over the years and he will be missed but we know his contributions will continue to have an impact for years to come. Thank you Tony.
We also look forward and welcoming and Catherine stent, the into the op and grid family when she joins us and mid March as the new CEO of networks.
Now turning to of renewables are 21 gigawatt pipeline of projects and leadership and offshore wind will drive significant growth opportunities and supported by favorable energy policy and strong demand.
Our pipeline is more diversified than ever with roughly 60% solar approximately 20% of offshore wind and the other 20% onshore wind.
Overall, we're going to grow our capacity nearly 70% by 2025 with significant growth driven by onshore wind.
And 2020, we installed approximately 620 megawatts of new wind and completed 370 megawatts of Repowering projects.
Additionally, we executed about 180 megawatts of Ppas and long term hedges, which will help improve the contracted percentage of our overall portfolio.
And this year, we're positioned for increased profitability with a strong lineup of new assets and our continued execution of PPA.
We've got close to 700 megawatts of expected to come online in 2021 weighted for the first time for solar.
And we continue to secure of Ppas to support our future growth and total we've signed Ppas for nearly 560 megawatts with Ceos and 2022, including the new PPA for 187 megawatts for based on the solar system.
Now I'd also like to address the extraordinary events that have taken place and Texas. This past week.
Op and grid has approximately 250 megawatts of wind located in Texas, and 100 megawatts of firm delivery obligations.
And the early days of the weather event, our operations like most others of the area were impacted for a short period of time.
Through this event, we have been focused on safety operational excellence and proactive risk management in order to meet our limited fixed obligations are.
And our clean generation and met all firm delivery obligations, and we were able to deliver our excess energy to the grid to help get Texas back on its feet.
Our thoughts remain with the many Texans, who have been affected as well as with our employees, who have continued to work hard under the difficult conditions.
With offshore wind we are at the forefront of an industry that is on the rise our superior offshore wind investments are positioned to deliver growth and financial results beginning in 2024 and 2025.
In addition to our strong offshore teams our affiliation with Uber drill and provides us a deep bench of offshore wind expertise for leverage.
After the day, we have one six gigawatts of fully contracted projects made up of our 800 megawatt vineyard wind.
One and are 804 megawatts of Park City wind both shared 50 50 with our partner CIP.
And our wholly owned Kitty Hawk site, we expect the first phase to deliver up to one gigawatt of power beginning in 2026.
The recent changes to the ITC are also a positive for op and grid and our customers.
For vineyard wind the flow of 30% ITC will generate additional value for the project and with bombs focus on completing the final approval process. We're one step closer to placing turbines and the water at the nation's first utility scale offshore wind farm.
We expect to make our final investment decision on the second half of the sheer begin generation and 23 and reached full commercial operation and 24.
For Park City, we submitted our commercial operations plan of our car for bone and the second half of 2020.
We also executed long term ppas with the Connecticut utilities, and we'll negotiate and how to share of the benefits of the enhanced ITC. We expect park city will come online in 2025 for.
For Kitty Hawk, which the we've submitted our top the volume for the first phase of the project, which we expect to come online in 2026.
Including phase one of Kitty Hawk, we of approximately six gigawatts available to bid and the future solicitations of which op and grid owns outright for one two gigawatt.
As the point of comparison and enter to help understand the value of these lease areas and based on the pricing of the latest offshore auction and Scotland are four gigawatts share could be value of somewhere between $1 5 billion and $2 billion.
And this year, we expect to auctions and Rhode Island, and Massachusetts, followed by New York, and 2022, and Connecticut and 2023.
And we expect to participate and most if not all of these auctions, but we're going to continue to be disciplined and our bidding approach.
As I think about op and grids offshore business and I really believe its and undervalued growth opportunity offshore wind is coming to the U S and a big way and other grid is extremely well positioned to lead this attractive market.
Now I want to talk about our approach to sustainability something that has been part of our DNA for a long long time isn't.
It is important to highlight the sustainability and <unk> and grid is not just about the E and the ESG, it's leadership and each of these areas that will drive our success and help us become the leading sustainable energy company in the U S.
And the third largest renewables developer in the U S. Our dedication to the environment is clear and 2020, our emissions intensity fell by 30%, making the hub and grid seven times less incentives and the utility average.
Social investment is a key part of our purpose as well to create healthier more sustainable communities every day.
And through the op and grid Foundation, our primary charitable entity, we've provided over $4 million and grant funding in 2020 to address COVID-19, the combat racial and justice and much much more <unk>.
We've signed both the paradigm for parity and the CEO action for diversity and inclusion pledges.
And the commitment to strong ethical governance drives how we operate our business at every level.
With this balance of the of three areas of the ESG complement and complemented by a sharp focus on financial results, we will drive performance and execution to create sustainable long term value for all our stakeholders.
Our goals over the next five and 10 years include further reductions to our emissions intensity, including carbon neutrality by 2035, enhancing our supplier sustainability and diversity programs and implementing a robust employee volunteer program and minimizing the environmental impact of our fleet and facilities.
Now and Robin grid, we believe leaders set bold goals and then deliver on them, but it's also important to measure and compare yourself to your peers and as you can see on this slide 18, we don't just talked about being of clean energy company and op and grid we delivered.
<unk> currently make up 90% of our own generation portfolio compared with just under 40% for comparable peers and only a quarter industry wide where alere.
Peter and renewables and the commitments. We've made we will continue to expand that leadership position.
Now before I turn it over to Doug I want to bring things back full circle to the big picture on.
Im excited about the future here at <unk> and grid, our current platform of businesses and our merger with PNM position of and grid for strong and predictable predictable growth over the next five years.
Over 85% of our business mix is expected to be regulated and we will invest approximately $20 billion and total through 2025.
And we're committed to clean generation and have identified long term profitable offshore wind and transmission opportunities as well as a large pipeline of onshore renewable opportunities that will support the 6% to 8% adjusted EPS CAGR through 2025, we discussed at our Investor Day in November.
And while we have plenty of organic growth opportunities. We also have the successful track record and M&A first with the acquisition of <unk> and now with PNM resources underway.
These transactions create scale the AD regulus for regulated revenue and geographic diversity and provide stability that enables future renewables growth.
We'll also continue to focus on maintaining on attractive reliable.
Dividend yield and solid investment grade credit ratings and all of these ingredients are vital to becoming the leading sustainable energy company and in the U S.
Is this a bold aspiration, yes. It is is it achievable absolutely and I look forward to sharing our progress with you on future calls now I'll hand, it over to Doug to discuss the financial results.
Thank you Dennis good morning, everyone and thank you for joining us today.
Let's turn to the financial highlights for 2020.
Carbon grid reported fourth quarter 2020, GAAP EPS of <unk> 54 per share and adjusted EPS of <unk> 62 per share.
And for the full year 2020 oven grid reported GAAP EPS of $1 88 for share and adjusted EPS of $2 and <unk> per share, which is above the $1 90 to $2 per share guidance range, we affirmed at our November Investor day.
Overall, our 2020 results and comparison to 2019 reflect the strong growth and contributions of our core networks business.
And the fourth quarter, we received regulatory approval for our New York companies multiyear rate plan, representing a very important step on the roads, the earning our authorized returns and networks for.
For 2020 networks for an agreement provided 30 for sense of higher earnings per share with New York delivering 22 of this and the <unk>.
Fourth quarter through our May call back to April 17, and.
28% overall for the year.
And 2020, we received regulatory approval for retransmission revenue decoupling and Maine, it reduces our risk and fluctuations in customer volumes.
It's produced the positive six net benefit for the quarter and year.
And the renewables business you will recall that we had a large asset sales in the fourth quarter of 2019, the delivered approximately 32 cents of adjusted EPS.
And the fourth quarter of this year, we completed the sale of the majority interest and the time for wind farm, allowing us to recycle of approximately $240 million of capital and produce the <unk> positive EPS impact ex.
Excluding the effects of asset sales renewables full year 2020, adjusted EPS results are up approximately 14% made possible through the benefits of adding almost 1000 megawatts of new capacity and 2019 and the first part of 2020.
And when production and pricing net of operating cost of the depreciation contributed <unk> <unk> of higher earnings per share and the fourth quarter and nine for the full year.
And our corporate segment and higher interest costs and income taxes negatively impacted the quarter and the annual results by approximately negative for <unk> and.
The negative 12, respectively.
Higher interest costs, resulting from the issuance of $1 $5 billion and green bonds over 2019 and 2020.
And income taxes increased primarily due to the prior year favorable discrete items.
Looking forward to 2021, we are affirming our EPS and adjusted EPS outlook of $2 50 to $2 35 per share, reflecting net income and adjusted net income of 665 million to $727 million.
And networks, we expect rate base growth of approximately $500 million of 5% along with the full year of new rates for our New York companies and CMP and the new rate year for CMG.
We also benefit from <unk> income related to any CEC, starting construction and January of 2021.
These advancements physician networks to earn its authorized returns in 2022 and significantly close the gap and 2021.
And our renewables business, we expect the benefit from nearly one gigawatt of new projects and the Repowering that occurred in 2020 and.
And we will be bringing another 690 megawatts of wind and solar projects online in 2021.
We also expect to reach an important milestone in 2021 for our offshore business with the start of the construction of vineyard wind one of the first large scale offshore wind farm and the us.
During 2021, we expect to fund approximately $70 million for our 50% share of investments and this project and.
With our offshore wind business I'd also like to emphasize some additional points first.
We're confident that our projects will earn solid double digit levered returns.
We have strong partners and CIP and the boudreaux with track records of constructive offshore projects on time and on budget and with the practice of establishing and maintaining conservative assumptions.
Our projects are and attractive lease areas with relatively short transmission lines through our landing point and we benefit from existing port infrastructure.
We also benefit from the new 30% offshore wind investment tax credit, which is applicable to each of our projects if.
You'll recall that with vineyard wind, we originally assumed the mix of 24% and 18% ITC for the project.
And the case of Park City, we did not assume ITC and our original pricing and with the extended tax benefit we expect the sharing between the projects and our customers and.
And then finally, we have the opportunity for meaningful economies of scale and procurement and operations due to the timing of our two projects and the contiguous lease areas.
Now moving on to financing plans and liquidity.
Our strong balance sheet predominantly regulated business mix and solid investment grade credit ratings provide us with excellent flexibility to finance, our organic growth and the PNM resources merger.
And late 2020, we entered into a very attractive $3 billion of intercompany financing arrangement with the bridge rollout, which significantly enhanced our liquidity position and provided of low cost source of funds.
We use these funds to pay down commercial paper borrowings and fund Capex. This loan along with the funding commitment letters for the PNM resources merger and <unk> announced the intent to participate at 81, 5% share and the 2021 equity offering demonstrated deeper drove strong commitment to the oven group.
And support for the merger transaction.
And 2021, we continue to be focused on maintaining a strong balance sheet and solid investment grade credit ratings.
And support of this we plan to issue of approximately $4 billion of equity in 2021, which will strengthen our balance sheet and improve our share of liquidity of this amount of $3 6 billion. That's attributed to our merger with PNM resources, and 400 million will finance the attractive investments and our plan the contribute.
For the 6% to 8% EPS growth, we outlined on our Investor day last fall.
We do not expect the issue any additional equity through 2022.
We also expect to entering the long term debt financing and the form of green bonds for sustainability linked bonds for our holdco financing needs and tax equity financing for our renewables projects.
While not included in our plan, we will opportunistically consider value added capital recycling as another funding lever.
We have ample additional liquidity available through our $2 billion of commercial paper program supported by a $2 5 billion sustainability linked revolving credit facility and an additional $500 million bank credit facility plus of $500 million credit facility available for deeper drill.
We have an ambitious and achievable plan to become the leading sustainable energy company in the U S.
Our focus now is on executing those plans to drive value.
This includes investing nearly $3 billion and our networks and renewables businesses.
Closing on a $4 $3 billion merger and the second half of this year and continuing to deliver solid and reliable dividend.
Slide 24 provides an overview of our investment grade credit ratings and our dividend policy.
We recognize that our robust growth of program and the important commitments, we've made to provide relief to our customers. During this pandemic through moratoriums and waivers of late payments and other fees will temporarily affect us power.
However, with the strong support of Veeva rollout and our financing plans, we remain committed to maintaining solid investment grade credit rating.
We have a strong networks footprint and with the addition of PNM, we will increase and diversify our regulated businesses further strengthening our credit profile.
Over the next five years with over 12 billion of our $20 billion of investments and our networks companies, we will further improve safety reliability and predictability.
We are communicating with our rating agencies about these plans. In addition, we remind you the S&P ties our ratings of <unk> and S&P of just reaffirm debt rating of Triple B, plus and widened the FF load of debt threshold from 18% to 20% to 17% to 20% this was done and rec.
Ignition of the resiliency shown during COVID-19 and with accelerated growth considering them as the energy transition and champion.
Our dividend policy remains unchanged targeting a payout of 65% to 75% that we will grow into other earnings increase over time.
Our board recently declared a quarterly dividend of <unk> 44 per share payable on April 1st.
With that thank you for joining us for today's fourth quarter 2020 earnings call I'd like to close by saying that we're looking forward to adding PNM to our family later, this year and continuing to deliver sustainable growth and value creation by investing and a smarter and cleaner energy future.
I will now hand, the call back to our operator, Julian and for questions followed by brief closing remarks from Dennis.
Thank you as a reminder to ask the question. Please press star followed by the number one on the telephone keypad, yes.
The first question will come from David <unk> from Morgan Stanley. Please go ahead. Your line is open.
Hi, good morning, Thanks for taking my questions.
Good morning, David.
Good morning.
And I was wondering if you could talk to.
Alex thoughts on equity needs post 2022 through the rest of the plan.
Let me, let me touch on that David.
And of those Youll remember, we provided some information on our investors day that laid out our expected sources and uses of funds.
From 2020 to 2025 and this did include the the funding of the merger with PNM and as Doug just touched on and this formal remarks, we will be planning to issue up to $4 billion of equity this year and.
Association with the PNM merger and the expected Capex and that will happen by the end of the year. So with this capital raise I wanted to just be really clear, we do not anticipate any additional equity needs through the end of 2022 and that capital raise is consistent with the 2022 financial outlook, we provided to you and <unk>.
And now.
And now when you think about beyond 2022 and that through 2025, we've got a lot of different levers available to us to raise the necessary non debt capital to fund our growth program and to maintain our strong balance sheet, including asset recycling hybrid securities we can raise equity assets.
Securitization and actually potentially monetizing some of our larger projects and if it makes sense. So the 6% to 8% EPS CAGR growth through 2025 that we provided in November took into account the different levers available to us and we looked at it under different market conditions, and we estimate that we would most.
Likely raise of approximately $2 billion and additional capital.
And through those levers for a combination of them to help fund our growth from 2023 through 2025, now needless to say with the 30% of ITC applicable of the vineyard wind one of our confidence level on the 6% to 8% EPS growth through 2025 is even stronger so hopefully that answers your question.
And.
Yes, great that's super helpful color.
I appreciate that and.
And just a question on Texas sounds wondering if there was any quantification you might be able to provide in terms of it sounds like you and.
And you have kind of gain.
Net.
With your very strong operational performance and the state and the and the weather event.
And I was wondering if there was any quantification you might be able to provide and is that.
Embedded in the 2021 guidance at this point.
I think what I would tell you is first of all we're really proud of the.
And our folks down in Texas, They had to not just the work hard to get the.
Our turbines running again, but they were living there and their families were impacted by it as well so they did a great job to get the the generating.
On our generation operating as quickly as possible and and I think as we said and our state, but we were able to meet our limited fixed obligations and then provide the excess energy back into the market to help the people of Texas.
At this point, we're not going to be providing more details on the financial impact, but what I will tell you is.
It was positive because we did have excess energy and although it's still early in the year I guess, what I would tell you is that really adds to the confidence we have and are in the guidance that we just affirmed of $2 15 of $2 35 for 2021.
Great. Thanks that makes sense, thanks very much.
Okay.
Your next question comes from and Kim from Goldman Sachs. Please go ahead. Your line is open.
Thank you.
First question is on and Maine with the SEC.
Definitely appreciate.
I appreciate the they started the construction of that you guys had.
It seems like more recently, there's been a second round of the citizens initial.
Initiative against the project and more recently the secretary of the state approved because.
And Thats just the proceed cell and and now.
Talking about round two of what we experienced.
And last year and how that ended up how do you see this one.
And how it's laid out the fair to or the same as of the pack and whether the.
For that the real threat for a project.
Yeah and to listen.
Let me start and then I'll pass it over to Bob and he can provide for more color. Yes, I don't think that there is any energy infrastructure project underway and the United States that doesn't have some opposition.
It's very clear that with this the buys and administration.
There is the realization and we need more transmission in this country to be able to get the clean energy to the load centers. So that people can use it.
And as we think about any CEC that type of project that truly is going to provide clean energy into the new England area, it's going to provide jobs. It's a net economic stimulus and it's something that as we've been pulling more people more and more people. They are understanding the benefits to main into the region. So.
No.
Are we surprised by the referendum I'd say no.
Is it just going to be additional work that we've got to continue to educate people and including the legislators on the importance of this transmission line, but we remain confident the Bob you may want to share some more on the yes sure good morning and sort of.
So a couple of things, particularly to the referendum.
We believe that that referendum and bad public policy, because it could have unintended consequences for other clean energy projects and the thing that.
And that will need transmission.
And as Denis had secondly, I wouldn't draw conclusions from the number of signatures that the opponents collected.
For that this is the second one they learned from the first of all and they knew who their supporters were.
And we're able to be really more efficient in terms of collecting signatures I'd also point out that the fossil fuel interest that are really behind this effort to impair.
The impact and paid $1 5 million to 350 individuals at 35 Bucks an hour and against the signatures. So the benefit is not a surprise for us.
I got the signatures, what's more and more and I think is whereas consumer sentiment and if you look at recent polling that had been done of the opposition is and the minority and we have continued to see improvements and support for the project over the past year.
And we think that that debt settlement and net debt.
The view of any CEC will continue as we begin to construct the line and demonstrate the jobs that are being created for maintenance and the economic benefits of the project will bring to Maine.
You guys mentioned, we have right now of about 275 maintenance and employee and Thats really just the start.
So again and Dennis and I don't expect the acquisition to and it's going to be there probably sales of project goes commercial operation.
But the reality is we've been successful and defeating every challenge of the acquisitions put in front of us and.
The indicative of all of the work that's been done by the agencies, both state and federal and issuing permits and the quality of those permits that were issued so the bottom line.
<unk> aligned with the by the administration's goals. The Governor continues to strongly support the project.
And just yesterday and her state of the budget.
You've referenced the benefits of <unk> twice.
As we saw for projects fully permitted and people are clearly aware of two things and realizing two things one the need for transmission.
To bring renewables to market and two is really behind the opposition to this project. So again, we're really excited about having started the construction and being able to show mainers and for that matter all of new England. The benefits of the project will bring whether it's.
The monies for low income consumers jobs, EV infrastructure, and we've committed to heat pumps broadband property taxes, you name. It and this is the largest events mentioned and clean energy project in New England and were looking forward of bringing this online and in the second quarter can be true.
The other thing and so this is data set that was interesting about the governor's comments yesterday.
This is also going to provide access to additional internet and telecommunications.
Systems for people throughout the states there are a lot of really different benefits to us and and.
Again.
Part of our job is to make sure that we're clearly articulating what those benefits are and.
And to move forward.
Got it that's really good color. My second question is on offshore wind just more broadly.
And I think increasing concerns just on on a global scale with the engine.
By the oil majors.
And the investors worried that for the.
And the golfers that you guys and of the rollout of that.
The increased competition could drive returns lower so understanding that you guys will be Barry.
Disciplined on the return profile.
And if youre willing to share what type of returns of willing to accept going forward for future projects or just more broadly how do you think from a competitive standpoint, what type of ads you may have virtually of some of the other parties on that.
That could help you guys.
Sure Let me, let me start and I'll ask Alejandro the jump in and provide some color as well and look I think there's no doubt that with the entrance of some of the the larger energy companies that have not traditionally been.
The involved and the clean energy space I think if anything and what it does is it just the clarifies the.
On the offshore wind industry is for real and it's the place where companies.
And put a lot of capital to work.
And a lot of competition is good it's good for consumers of goods for us and makes us sharpen our pencils, but we're going to continue to be very disciplined in the.
And the bids that we make we actually think that given our experience and the neighbor drove his experience.
And where the type of company that some of these other major energy companies would want to partner with so we don't see it really as a negative as long as we continue the focus on making sure that we maintain our financial discipline.
And the other thing I would say is it's really going to the important going forward that we are not just a power provider here, but that we provide energy and economic solutions and I think with the lease areas that we have and the work that we've been doing especially and the new England, and New York area as well as down and the south.
Sure.
That's how we're going to differentiate ourselves it's not just the other day about providing the cheap energy, it's got to be competitive energy, but it also has to do with what can we do to build jobs. What can we do to bring more manufacturing to that area. I think that's one of the things that differentiate op and grid and our experience and I think it will help differentiate.
And so as we go forward, but on the 100 on day one.
And to add to that.
Thank you, Dave and not much to add to everything you said I would just say debt well in the U S. The demand youre seeing that eats and we high and for the next years.
And the number of competitors, it's a huge item and there are not many many companies that can be engaged and to these kind of infrastructure projects and then we have and we have a track record of standard.
The DCT and that's outstanding.
Continue to have the menu opportunities to grow.
And and so given that we can see who's on the call and we may have.
And some competition and we're not going to get into returns.
Yes.
Understood. Thank you so much.
Yes, I think the assumption.
The next question comes from Neil Neil Carlson.
And as far as of the Securities. Please go ahead. Your line is open hi.
Hi, everyone and thanks for taking the call.
Good morning, Neil.
Yes.
Kitty Hawk wanted to start there. So did I hear you right that the thought is that this could be.
Yeah.
The buy as early of 2026 and if so.
What do we need the kind of get there right I think its still there is no off takers, yet or not.
The crystal clear, how that's going to proceed.
That's on that side sure.
Sure. Let me start and then on one hand, OCA jump and I think one of the things that we've learned is with vineyard wind one we've been the Guinea pig. If you will with volume. So our expectation is that as we continue to go forward with park city and with Kitty Hawk the experience that we have and the comfort hopefully the bone.
Has with our process is going to help us as we go forward with our other projects, including Kitty Hawk, but on the 100 could you jump in.
Yes sure.
It is.
It is clear that we need and route to market for that project and cost.
Talk to them and they keep operation on pace, we have seen some of those are and it seems that kind of the voice of very very.
Quickly and you have seen how much has happened in the region and.
In 2020.
And we are developing the project as of <unk>, we tend to be ready and so that <unk> gotten on to become the.
And the critical path once we find the route to market and then in terms of route to market will you know the objectives of <unk>.
Genia and like North Carolina, each showing and a high interest in the offshore wind as well. So we want to be weighted very very quickly on 2026 is the.
Timing of and off take and it works as we expect you to not unrealistic.
Got it Thanks, and then my second question I apologize.
I missed this but.
And on the Excelsior.
Project.
Is there anything sort of is that of pretty clear from our right of way standpoint are there any consideration of just having lived through the England. The mainline other project and is there anything that we need to be concerned about in terms of the siding.
Look let me start and I'll ask Tony to jump and I think whenever you're working on the transmission project. There are challenges there not easy the team's been working on this one for a while and looking at the most efficient and effective way.
From where we think we can we can receive energy from renewable developers to get it all the way down to New York and I would say that this project is beyond just the concept that <unk> got a lot of details behind it the Tony if you want to jump and yes sure Dennis Thank you Ed.
On the right way is certainly one of many challenges that we've got to overcome here, but we.
And we feel really good about the project and the pathway that we've chosen and our competitiveness of this and.
And as benefit earlier, it's not just about price. It's also about the flexibility of the assets of the providing of economic development benefits as well. So we feel really motivated about the package that we're putting together and bids are due on may 12 of this year and we plan to be.
Presenting very competitive proposal and look I think it's been very public the governor would like to get more renewable power from the northern part of the state down to the city and we're really excited about the response, we've gotten so far based upon the the announcement that we've made on the solicitation developers.
We see this as a as a high priority project for them to be able to get their power down so.
It's early it's not and our plan. So again, it's it's.
Upside, but it's something that we're really excited about we also think of it.
What differentiates US here is this is the New York solutions and all New York.
Yes.
Okay and one last quick question on the follow up.
Do you have any wind sites in northern.
And New York that could be on the slide.
Yes, there's a number of.
Of wind farms, and the Adirondacks and southern Adirondacks Hardscrabble comes to mind is just north of the Utica Maple Ridge and couple of those couple of more close to the GAAP for the quarter North of the Adirondack Park.
Presumptive I along with many many other wind farms and would have access to.
To this point.
Okay got it.
And would be existing wind farms or would it be new projects debt that you guys could do and it could.
The combination of all of Thats currently on the RFP that we just put out.
And I think I saw someone asked this question.
And our research note when we announced it.
This is something we've been working on for a long time, we call and Thats something different back for five years ago connect New York.
And over the years that puts us in the.
That kind of a more advanced stage than debt.
And I think relative to the having just announced.
Yes, remember that well, yes. Thank you.
Thanks Neil.
Your next question comes from Julien Dumoulin.
Net.
Good morning, James Good morning.
And several things here.
So.
If I can.
I'll start with I'll start with a couple of small points here.
Causes I missed.
The ITC benefit you guys flagged them earlier here, obviously, a positive can you talk a little bit about how much of the itc's flowing and adding to your confidence on earnings and I know you don't traditionally and necessarily talk about the offshore economics and the earnings terms per se, but if you can elaborate however, you can and then remainder of the attitude.
The mine Covid.
Covid impacts going into 'twenty one there.
Is there an ongoing and backyard.
During the quarter.
Let me, let me start with the easy one on the Covid impacts we did provide some information in our appendix that gives some sensitivities of our assumptions on what we think I mean, obviously, we do.
And have the Crystal ball, there, but we do know what's going on right now.
So <unk> got some information there that I think will help you on.
<unk> and how we think about it on the on the second question, Yes, Julian This is Doug Hi.
Related to the ITC as you know we have the vineyard pardon for.
City projects.
With vineyard, we had originally assumed 24% ITC for the first half of that project and <unk>.
18% for the second half now when we're in a 30% ITC environment, that's obvious upside relative to our original economics and the case with park city and when we bid that project, we didn't really have.
And anticipation of qualifying for ITC, given the timeframe that it was scheduled to go and service. So now with the expansion of ITC at 30% out through the date of this project.
That would be ITC benefits that were not planned we do expect though with that project to have the share of ITC benefits with the customers. So there will be some allocation between the project and.
Customers on that particular items the.
Other thing I would say Julian given the debt.
We expect park city and and.
And it shows the vineyard and park city to come online and 24% and 25 that is right at the tail end of or the five year plan that we have I guess it gives us additional confidence on and the 6% to 8%.
CAGR growth that we provided in November so at this point and time, we're not going to we're not going to quantify exactly what that is but it is a positive in both projects more so in vineyard and we will see the benefits of those in 'twenty and 'twenty five and.
And beyond.
Right got it okay, sorry, the <unk>.
And the Covid you haven't provided the ICD the appendix here, even if I did a total estimated impact in 'twenty, one the new and that's because it's unclear.
<unk>.
Yes, that's just for at this point and time, we have and I think look every every state is moving quicker on certain things. If you look at here in Connecticut the.
And the Governor just announced the vaccines are going to be available by age group, including starting on March one and people that are 55 and older which I belong to that group can now start baking appointments to to get their vaccines.
The new York's of a slightly different situation all of those things seem to be and moving a little bit more of there. So we have not included a specific number.
And but as we as we have more information as of year on year goes by we'll provide updates.
Right.
One final clarification on the balance sheet I think I heard you clearly, but I want to make sure I heard this right. So.
The financing plan through 2000, <unk> Hasnt changed.
And just providing clarity on 'twenty one what's the total amount to come to market here I know that there is a piece that isn't necessarily marketed per se. What's the total amount that you have.
This is a coming forward with here.
And clarify that and also just the firm.
And this does not impact the total I think it was like the the 47% of financing.
The $2 25, I think that for you guys to care for.
Let's break it up into two pieces first of all again.
In 2021, we're assuming the related to the merger and additional capex needs that we will be issuing up to $4 billion and equity.
By the end of the year and that was part of our I think we have the $3 6 billion originally and our plan, but the $4 billion worth still within the range that we've given with the.
The outlook that we gave in 2022 and November and then as you look at the next piece.
What do we need beyond 2023 through 2025, what I said and my outside of what I answered and one of the questions here.
And that.
It is still 253 years away, but based upon the plan and the sensitivities that we've done.
<unk>.
By debt and by tax equity, however, will probably need somewhere close to a $2 billion and additional capital or proceeds and we're looking to through recycling of existing assets hybrid it could include assets.
Securitizations or and some of the major projects, we're talking about we could decide to monetize the piece of that to the minority.
And if it makes sense.
So theres a lot of different options that we have but.
I know that you've been interested in this and others had we wanted to be very clear of that.
Those sources are those levers that we have would probably add up to about $2 billion and that is included in the the sensitivity around that $2 billion is included in that 6% to 8% CAGR growth for EPS and adjusted EPS for 2025.
Got it okay I'll leave it there you guys in the guidance.
Thanks Julien.
Our next question comes from Michael Sullivan from Wolfe Research. Please go ahead. Your line is open.
And Ross and good morning, Good morning, Michael.
Hey, I just wanted to follow up on.
And what's going on and Connecticut, I think one of your old cases.
<unk> was reopened and related to Covid and just.
On your expectations are there and it.
This turns into a more.
Traditional rate case, or if there were plans for that at all just the thinking on the Connecticut regulatory.
Sure, let me start and I'll ask Tony to jump in and I think one of the things that we've we've continued to work closely with the regulators and the other intervenors to make sure that we understand what their sensitivities are related to COVID-19 and the impact of its had on customer bills and everything so we.
One of the part of the solution here and I think that we have been the Tony if you want to add to the yes. So there's a few dockets.
Our other way and certainly with respect of Covid and uncollectible and when we start collections and so forth. We've been fully engaged with all of the parties there share of deep and others to make sure that whatever solution. We put for it makes sense for ratepayers and so we've been following that.
Nothing right now with respect to any significant change associated with that but we maintain the <unk>.
Follow up of whatever the guidance on pure is as far as that goes Connecticut was one of the first states debt allowed for spending up regulatory assets related to COVID-19 related cost and so we're happy about that and they continue to monitor that and so we provide data on a regular basis and we look forward to getting beyond this.
And so that we can get back the business this normal or for our customers and all of our voice.
Okay, and just to clarify though outside of of this once they're on plan to file a.
And <unk> rate case, and the near future.
So uis outside of its rate plan right now last time rates were increased for UI was January of 19, So we're evaluating that.
<unk> has done reasonably well on it.
And of earning its lot of return and so we're happy about that but as we look forward. There certainly will be a point and time, where you I will need to go and for new rates, but at this point, we're still considering and evaluating net.
Okay, great Thanks and.
And then shifting over to the vineyard wind process and where you all said you were expecting.
Resolution for volume in the first half of the year have day put out a <unk>.
Specific schedule or any dates for for milestones since you presume that on.
And in process there.
They have not put out of specific schedule of our calendar.
Our team is continuing to work very closely with their staff to get them the information that they need and debt.
But they have not but we're optimistic based upon all of the work that had been done prior to us.
Temporarily pausing or our application that the.
They're moving forward and I think debt with the new bone director of being very familiar with wind.
And this being I think the trophy marquee projects for the buyer and administration to say that they are totally supportive of the wind. We are optimistic that this is going to happen sooner than later.
Great that was it thank you thank.
Thank you.
Your next question comes from Richard Sunderland from JP Morgan. Please go ahead. Your line is open.
Hi, Good morning, Thanks, just maybe a quick clarification of upfront the ups.
<unk> 4 billion and equity and 2021.
The virtual intends to participate and the entirety of debt.
The pro rata ownership is that correct yes.
And yes, they have communicated to us that they would like to maintain their current.
Ownership interest and 81, 5% so it's our expectation based upon what the.
Participate on a pro rata basis.
Okay got it and.
And then.
Starting off at a higher level here's the history.
Yeah.
Sort of earned ROE improvement, you're contemplating I am curious if you have any insight into the main process. Following the expected I think September filing.
And I guess for 2000 and key specifically if you expect to earn your authorized.
On the on the networks wide basis or.
And each individual utility.
Look I think there's a couple of things there, let's start with the second half.
The question our plan is to be in a position, including with Maine.
To be able to earn our authorized at all utilities in 2022.
Just got the the New York rate case here in November.
The the outcome I think it was a really a strong one for us and for our customers and allows us to do a lot of things of that.
We can do more of now debt like vegetation management that increase the reliability and the resiliency the helps us to avoid penalties. So we think this day in New York for example, as the year goes through.
We have the opportunity to at least on our authorized ROE and the case of of main as you mentioned.
We're doing very well with the for metrics that we have to in order to be able to file.
File an application to get the the 100 basis points.
Adjusted downward adjustment lifted we haven't made the decision yet how early we may file that.
But it's something that obviously, we want to do as soon as it makes sense and we're continuing to do.
So worked closely with the commission, they're following our results as well as the as they should.
But I think the overall, we want to be in a position in 2022.
To be able to at least earn our authorized ROE is at all of our utilities.
Great I appreciate the color there and then just one final one for me if I could you saw the earnings restatement and just curious if you have any color there sort of the work to improve internal controls.
Sure. Let me let me just clarify it was not and earnings restatement. These were items from 2019.
The.
The management and our outside auditors.
<unk> or 2019 items that should be reflected and the 2019 financial statements and so we both agreed to make that adjustment, but there is a as you know there is a difference between the restatements and an adjustment to a prior period and.
And in the case of the controls that we've had some challenges and the past I think that we're continuing to make progress to improve the overall system of controls of the company.
And that can always be stronger, but there is something that we're focused on and we are dedicating the resources to continue to have stronger controls going forward I mean, Doug I don't know if you have anything else no I think that's right Dennis.
Just to clarify this is technically called the revision not of restatement and so it's simply means we're revising the numbers in our filings for 2019 to reflect the changes that the benefit of items. These are mainly tax items and we have made tremendous progress on tax with improving our processes and controls.
And I would say this is really more a function of those enhanced processes and controls identifying the.
Despite the vitamins and.
Positioning us well going forward.
Great and I appreciate the clarification, there and take some time.
Thank you Richard.
Your next question comes from Sophie Karp from Keybanc. Please go ahead. Your line is open.
Alright, Thanks for taking my question and yes, I can't think of hope that the purple.
Hello there.
Sorry.
Couple of things one and thank you.
We'll be packing of bill.
Thank you thank you Eric.
Dealing with COVID-19 disconnect and.
And then on so on my thank you and one.
Wondering if for coal and elaborate a little bit on what the Inc.
And extended flow and in.
Thank you. Thank you want and what that will for Biogen.
And.
And then out of asking a follow up on the net.
And the account for Michael.
Sure I think and New York were watching.
And monitoring it very closely I think for that.
There are new bills that are that are being considered.
And their legislature there are discussions about continuing to extend the moratorium on turn offs and and what might happen with with the past due bills and everything so at this point and time.
It would be truly speculation from us to say, what's going to happen. There I think cash from from an earnings perspective, we don't expect it to have any major impact there if anything it's more of a cash flow impact, but I think one of the things that.
We're continuing to do is look at the.
Different vehicles that we might be able to employ to be able to collect some of that cash.
And then later and yet not have and overall impact and the short term on customers.
Okay, and if theres any color you can provide on.
Barbara and Paul.
And the service disconnect on.
For allowing the PSC for will get special for panel.
Again.
It's a new build and that's been introduced.
And think it's been fully debated I think that there is recognition that you want to make sure that there is a level playing field and net.
Reasonable judgment is included and any decisions that the utilities make so again, we're continuing to follow this and we have <unk>.
<unk> opinions as I think other utilities do not just in New York, but throughout the country. The reasonable standard is one that this is very common.
And allows companies like ours, and other and utilities to make long term investments and day using sound business practices, given the situations they're dealing with.
And that's very helpful. Thank you and if I can move on for Texas.
I understand that your turbines for France.
Better than some of the other but I just wanted to find out if IR turbine for that and then where the rise.
And Thats why they performed better or do you have plans for February.
The less.
I'll ask on the 100, the jump in but I think part of the reason why as most of our turbines are actually in the southern part of Texas. So I think just geographically where they were located.
Of the cold weather lifted sooner than it did and other parts of Texas, but on the 100 of if you want to add anything there.
Yes sure of any set so and yes, when you say ACC totally true I mean, we have and as you know most of our assets and takes us.
And in the southeast.
On obesity day wear and maintenance of <unk> by Poland Who's on the assets in front of the day notice.
In terms of the weighted <unk> and <unk> the answer to that each day.
And the winter ice patch for the Texas.
Whether we achieve and.
And more of it towards the heightened pictures on the notes and pictures.
And just to make it clear and at least.
DC and ease of choice you have to either decide whether you want them to the of.
The <unk> store and.
The warm weather or cold weather and so April of <unk>, we optimize those two things for warmer weather and therefore, that's the way we have suffered on.
And the whole industry. These difficulties those dates.
Okay.
Helpful. Thank you thank.
Thank you.
Your next question comes from Andrew <unk> from <unk>. Please go ahead. Your line is open.
Thank you, okay. So and just they have to talk about <unk>, because I feel like I've been writing about it. So much I mean, you guys have pretty much told us how much money you made like you said the <unk>.
And 7% of wind.
And then power output during the other cold snap and and we know what the wind power output.
And just making sure that debt, it's not as simple as that.
And while I don't know that we've said the how much money. We've made what were trying to illustrate is that when you look at the of the wind capacity that we have.
As it operates ordinarily we were able to do better.
And then than we ordinarily would at least given what we represent as far as the capacity of the overall market and Thats what enabled us to provide additional energy to the grid and to the customers of Texas, but I.
And I'm not sure.
And I think it would be very difficult to take that excess above our traditional capacity and try to ascertain what the financial implications are because as you know the price.
And the cost of for.
The price of the of the power changes on an hourly basis, so without knowing what was going on on an hour to hour basis.
I don't know how anybody would would come up with that.
Yeah, Doug I'll just add.
Add to this.
<unk> of debt generation are under power purchase agreements and they would not have been selling into that high price market. We would of been collecting the price that was.
Negotiated under the power purchase agreement, but Andy I think.
And part for US is we got the we got our wind farms up and running as quickly as we could.
And we served our fixed.
Limited fixed obligations and we've provided excess power and it gives us additional confidence that our $2 15 to $2 35 and stuff.
Very achievable.
Yeah actually speaking of that guidance I mean, you are not providing us with the breakdown segmental breakdown.
And <unk>.
And again.
He then.
Many of our cutting.
Performance of the assets and accounting for the Ppas and the firm contract and Texas.
The year over year comp for renewable because I mean, the easy then you have a number of.
The assets that came on line for the year for the year in 2020.
And you have some benefit and Texas I mean.
For once I struggle with the.
And how.
Conservative guidance at the and I understand that you are trying to set it at that.
But.
Again, and what are some of the help if you show that the segmental breakdown.
Well Angie first of all nothing's easy in this business you know that but look we did provide in our appendix a breakdown of <unk>.
What do we expect from <unk>.
And on a quarterly basis from both networks and from renewables and.
And I think <unk> got a pretty good sense as we talk about the.
Before we add on.
PNM at the end of the year the networks represents roughly 80% of the overall earnings conference.
The contribution for Avon grids, so even though we haven't provided the specific.
Range by by Business Group, Inc. I think you've got a pretty good sense there.
Okay and the last question is on the <unk> and ECC referendum, I understand that you're optimistic that the perfect the supported but.
The restaurant and then we will take place on November EUR.
Building the project Thats the speak for what happens if the referendum goes the gain on November.
Yes, I mean, what happens with the spending.
Yes, Angie spot how items.
We're not going to get into hypotheticals on what happens, but at this point.
As I mentioned earlier.
Seeing consumer.
Consumer sentiment and strengthen around this project people are understanding.
Who is really behind this and the motives behind that in terms of the fossil fuel interest and they're concerned about losing.
Losing money on their P&L as percentage of comes out and so we are 100% focused on.
Delivering the projects on the schedule and we have right now and ensuring that the Maine, and new England and get the benefits from this project and we expect the.
And the other thing as far as of the way that the referendum the structured it's not specifically against and CEC, but it looks at the transmission as a whole and what it does is it brings into the.
And the judgment of the legislature on what they think should happen going forward. So it's not an automatic if the referendum does past that stops the project. The legislature has to get involved there and as Bob said with the polling that we've been seeing for people and get on the support of the Governor we remain optimistic that people.
And <unk> are going to continue to understand the benefits of the springs, not just from a clean energy standpoint, but from an economic standpoint and job standpoint as well.
No that's great and then lastly, this app, two 4 billion and equity flow.
Is it please.
And so is it 4 billion.
The way the shape of some of that that equity, especially associated with PNM I mean, you have and baby.
And I think by my count fully committed for the financing structure of that acquisition. So is there still some local room.
We set of originally was debt.
And we were aiming for roughly $3 6 billion and equity and roughly 700 million and.
And debt and I don't think we've we deviated from that so the $4 billion and equity.
Again, it takes care of the merger, but also provides some additional funding to support the Capex and also on quite honestly given some of the cash delays, we've had from Covid and some of the states.
Supports our balance sheet from that perspective.
Colin Thank you.
Yes Angie.
Our last question today and will come from Michael progress on Janney Montgomery. Please go ahead. Your line is open.
Good morning, everyone.
Good morning.
Hum.
And off with so many wind projects coming online over the next several years I'm wondering if you've got any concerns about equipment or labor availability when you need it.
Michael it's of Great question.
With the growth and renewables, especially onshore.
It's important to connect yourself with the with reputable and and serious construction companies and contractors.
And.
We're fortunate that given the scale of business that we do.
And the third largest renewables, operator and developer and the country. We've got those relationships, but it is it is it is tight and on the other you may want to touch on that.
Thank you Dan EPS.
And we say and what you mentioned it is true that 2000 Twenty's of Qunar has seen a huge increasing in the capacity construction, both the wind and solar so and <unk> type market that is industrial and Thats, where our our experience and our track record on our relation with the supply chain and replacing the two.
Nine two on PC page and for these kind of nears, our closing of our contracts with suppliers and we need to.
And be able to.
B and B in this market were up to say each time because of the level of development that we're seeing.
Okay, and then last one.
And granted look it's certainly early days, but.
Just wondering if you see any opportunities in ERCOT for.
The new investment post the storm impacts.
Look I think for that.
And we licensed state of Texas, I think that.
When we complete the merger with PNM will have on the utility there TNMP.
We think it's a very constructive regulatory and business friendly environment, you've seen a lot of companies moving to Texas because of the governor and the legislature and the regulatory bodies.
Our very welcoming of there and if the.
The opportunity presents itself and we'd like to continue to expand the vessels. We think it's a good market obviously what happened here.
This recent weather events and nobody would have voiced on anyone.
The people and Texas are smart they will figure out the best way to go forward and we one of the major part of that solution going forward.
Alright, thank you.
Okay.
This will conclude todays question and answer session and I'd like to turn the call back over to Dennis <unk> for closing remarks.
One of the thank everybody for listening to our call. We know that it's a busy time of year Theres a lot of other calls going on but I really hope that our excitement about the future is coming across all of them and grid is truly and the sweet spot of the energy transition and now it's time for our team to execute and to deliver by driving growth and our regulated and renewable businesses.
And investing in a cleaner energy future and being a thought and innovation leader supported by a strong financial profile.
<unk> framework is what will drive our strategy and asset allocation decisions over the coming years. This is the new op and credit we aspire to be the leading sustainable energy company and the U S and we're up to the challenge and we appreciate your support if you have any other questions. Please follow up with Patricia Michelle and Steve.
Safe and have a great day.
Yes.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
And.
James.
And.
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