Q4 2020 PPL Corp Earnings Call
Good day and welcome to the PPL Corp, fourth quarter earnings Conference call.
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Please note today's event is being reported.
I'd now like to turn the conference over to Andy Ludwig Vice President Investor Relations. Please go ahead Sir.
Thank you good morning, everyone and thank you for joining the P. P. L conference call on fourth quarter and full year 2020 financial results.
We've provided slides for this presentation and our earnings release issued this morning on the investors section of our website.
Our presentation and earnings release.
Which we will discuss during today's call contain forward looking statements about future operating results or other future events.
Actual results may differ materially from these forward looking statements.
Please refer to the appendix of this presentation P. P O S. T SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward looking statements.
We will also refer to non-GAAP measures, including earnings from ongoing operations and adjusted gross margins on this call.
For reconciliations to the comparable GAAP measures you should refer to the appendix of this presentation.
I'll now turn the call over to Vince Sorgi, PPL, President and CEO.
Yeah.
Thank you Andy and good morning, everyone. We appreciate you joining us for our 2020 year end earnings call today.
With me as usual are Joe Bergstein, our Chief Financial Officer, Greg.
Craig that came in ahead of our Pennsylvania utility business Paul.
Thompson, the head of our Kentucky utility business, and Phil Swift, who heads up our UK utility business.
Moving to slide three.
I'll begin this morning with a brief overview of our 2020 performance as we overcame the difficult challenges of COVID-19.
I'll also share a few updates on regulatory in ESG matters.
Joe will provide a more detailed overview of year end and fourth quarter financial results.
I'll then share some closing thoughts on our key focus areas for 2021.
As always we'll leave ample time to answer your questions.
Turning to slide four.
I'm incredibly proud of how PPL performed in 2020, a year. Unlike any we've seen in our lifetimes.
It was a year that tested our resolve our resilience and our ability to adapt very quickly to dynamic conditions.
Importantly, we provided electricity and natural gas safely and reliably to more than 10, and a half million customers when it mattered the most.
This included the hospital workers and first responders, who are on the front line and.
And it included customers, whose homes became offices, whose kitchens and bedrooms became classrooms, and who are counting on us to deliver without fail.
We're extremely honored that our continued operational excellence resulted in further recognition from these very same customers in 2020.
In the U S. We earned three new J D power awards for customer satisfaction.
Bringing our total to 54 since J D power surveys began.
This include a topping all large utilities in the east for the ninth straight year for residential customer satisfaction.
And all mid sized utilities in the Midwest for both residential and business customer satisfaction.
In the U K at the end of 2020, we again finished with scores of over nine out of 10 in all four of our D. N O S.
And are on track to receive the maximum incentive reward under off Jim's broad measure of customer satisfaction.
We also received the U K customer service Excellence award for the 28 times since 1992.
As we focused on our commitment to provide a superior customer experience. We also recognize the need to support our local communities and assist customers struggling with COVID-19.
With that in mind, we continue to offer payment assistance programs flexible payment options and referral services to help customers manage their energy bills.
Shifting to our financial performance.
We achieved financial results that are within our original earnings guidance range. Despite the challenges of COVID-19.
This achievement included overcoming a 12 cent per share unfavorable impact from Covid due primarily to low sales volumes in the U K and lower commercial and industrial demand in Kentucky as.
As well as a five cent per share unfavorable impact due to mild weather compared to normal conditions.
We were able to offset some of the impact through effective cost management and several other factors without negatively impacting the long term strength of the business.
And as we've discussed previously the U K regulatory construct provides recovery for any under collected revenues from lower sales volumes, which was a significant portion of the 2020 impact.
We also maintained a strong financial position and delivered on our commitment to return capital to shareowners.
PPL has done each quarter for 75 consecutive years.
Turning to slide five.
As we dealt with the challenges of COVID-19 during the year. We also remained very focused on the future.
Building on the $27 billion, we have invested over the prior decade to improve service to our customers.
During 2020, we completed more than $3 billion in infrastructure improvements in line with the original expectations. We outlined for you at the beginning of the year.
The vast majority of this investment nearly 90% was focused on transmission and distribution infrastructure to strengthen grid resilience incorporate new technology and advance our clean energy strategy.
Shifting to a few sustainability highlights we continued to advance our clean energy strategy in 2020.
At the outset of the year, we set a more aggressive carbon reduction goal and throughout the remainder of the year, we invested in our networks to enable increased electrification of large scale additions of distributed energy resources in the future.
In Kentucky, we.
We secured regulatory approval for 100 megawatt solar power purchase agreement to meet increasing customer demand for clean energy solutions.
We also continued to expand customer participation in our solar share program.
The carrying full subscription for two additional phases of solar share construction that will begin this spring.
In addition, our Safari energy business also added more than 90 megawatts of solar capacity to its portfolio, increasing its own capacity to 110 megawatts.
This new capacity is all contracted to be a long term power purchase agreements.
And in August we joined a five year industry initiative to accelerate the development of low carbon energy technology and advance affordable pathways to economy wide decarbonization.
We recognized that going even further and faster than the goals that we've set to address climate change requires new ideas technology and systems that can be delivered safely reliably and affordably.
That's why we're partnering with <unk> and G T I on their new low carbon resources initiative.
As part of our sustainability efforts. We also remain focused on advancing a culture of diversity equity and inclusion across PPL and supporting meaningful change and progress on the communities we serve.
To build on PPL prior momentum in this area the company adopted a new enterprise wide dei strategy with five supporting dei commitments.
In the wake of the killings of George Floyd Briana, Taylor and others in 2020 P. P. L led focused discussions with our employees and in our communities on race and social Justice that will continue to guide our efforts moving forward.
In addition, we provided initial contributions to support local organizations focused on dei initiatives and launched a new scholarship program that aims to award a million dollars over the next decade to support minorities in females pursuing careers in engineering I T technical and trade rules.
As a reflection of PPL continuous focus on embracing diversity inclusion and advancing equity for all we were named a best place to work for LGBTQ equality by the human Rights campaign Foundation, once again, earning a perfect score.
Lastly on this slide I would note that we continue to enhance our ESG disclosures in 2020.
Demonstrating our ongoing commitment to transparency and to keeping stakeholders informed.
This included our disclosures around political spending an area in which the center for political accountability and the <unk> Center for business Ethics Research gave P. P. L. There trendsetter ranking on the CPA Sakmann index.
Turning to slide six for some regulatory updates.
In November we took steps at our Louisville gas and electric and Kentucky utilities businesses.
To support continued infrastructure investments that benefit our customers.
LGD and Ku filed rate request with the Kentucky Public Service Commission on November 20th that.
Seeking approval for a combined revenue increase of about $331 million in electricity and gas base rates.
The requested increases will support continued modernization of the grid to strengthen grid resilience as well as upgrades to LG <unk> natural gas system to enhance safety and reliability.
In addition, we are seeking approval for full deployment of advanced metering infrastructure faster electric vehicle charging stations and an updated net metering tariff.
If approved by the Commission L G and Ian Ku's requested revenue increases would take effect July one 2021.
Given the Covid pandemic and in an effort to reduce the near term impact of the rate adjustment for our customers.
We sought to minimize the size of the requested increase and have included on our request for approval of $53 million economic released their credit to help mitigate the impact of the rate adjustment until mid 2022.
In addition, we have proposed to implement am I in a manner, which based on current projections will not require an increase in the combined revenue of LG <unk> and Ku in this rate case or in the future as operating cost savings are projected to more than offset the incremental capital cost of the project.
Additionally, pending the outcome of the proceeding it's our goal not to request another base rate adjustment for several years.
A detailed procedural schedule for the rate case is available in the appendix of today's presentation.
In other notable Kentucky updates LGD and Ku on January 7th.
Issued a request for proposal for generation capacity to meet our potential energy shortfall that may be created by the anticipated retirement of 1000 megawatts of coal fired generation during this decade.
LG any NK use Mill Creek unit, one is expected to retire in 2024.
Paul Mill Creek unit to an E. W. Brown unit three are expected to be retired by 2028 as they reached the end of their economic useful lives.
We've also included in the appendix a slide that details the projected economic lives of our Baseload generation plants.
Utilities are seeking 300 to 900 megawatts of capacity beginning in 2025 to 2028.
Additionally, we're asking for proposals for at least 100 megawatts of battery storage.
Proposals are due March 31st and we anticipate making a decision by mid 2021 and potentially filing for regulatory approvals in early 2022.
Lastly in the U K on.
If GM issued its Rio two sector specific methodology decision in mid December the.
The decision was largely in line with our expectations and underscores the vital role Dno's will play in supporting de Carbonization and the U K to achieve a net zero economy.
In January W. P. D became the first DNO to issue a draft business plan for really detail.
That draft plan proposes 6 billion pounds, and new investments to support de carbonization, digitalization and enhanced network utilization.
Turning to slide seven and the 'twenty 'twenty, one to 2025 capital plan.
We've outlined more than $14 billion from 2021% to 2025 to support continued monetization of our transmission and distribution networks and to advance a cleaner energy future.
This forecast spending represents a $1 billion of incremental capex from 2021% to 2024 compared to our prior plan.
Those increases include $400 million in Kentucky to support full deployment of advanced metering infrastructure.
$300 million in Pennsylvania for additional transmission investments as well as incremental funding for it initiatives focused on digital transformation investments in work optimization smart grid technology and the customer experience.
And $200 million in the U K due to a shift of certain investments from 'twenty to 'twenty to 'twenty 'twenty, one as a result of COVID-19 additional.
Additional funding for telecommunications projects and updates to our Rio two capital plan.
At this point I'll now turn the call over to Joe for a more detailed review of our fourth quarter and year end financial results Jeff.
Okay.
Thank you Vince and good morning, everyone.
I'll begin with a brief overview of our fourth quarter results on slide nine.
PPL delivered fourth quarter 2020 earnings from ongoing operations of 59 per share compared to 57 per share from the fourth quarter of 2019.
Weather in the quarter was about one set unfavorable compared to 2019 as our Kentucky segment experienced slightly milder temperatures.
The estimated impact of Covid on our fourth quarter results was about <unk> <unk> per share <unk> due to lower U K sales volumes in one sense driven by lower demand in Kentucky.
We continue to experience improvement in this area is C&I demand steadily improves across our service territories.
These headwinds were more than offset by positive impacts from returns on additional capital investments lower O&M expenses at our domestic utilities.
On a higher realized foreign currency exchange rate in the U K.
Overall these results were in line with our expectations.
Moving to our full year 'twenty 'twenty earnings results on slide 10.
We achieved 2020 earnings from ongoing operations of $2 40 per share compared to $2 45 per share a year ago.
As Vince mentioned earlier, our 'twenty 'twenty financial results reflect an estimated 12% unfavorable variance due to COVID-19.
During 2020, we also experienced a <unk> <unk> unfavorable variance due to weather compared to 2019, primarily in Kentucky.
In terms of dilution for the year, we experienced <unk> 11 per share of dilution year over year, primarily reflecting the impact of the equity forward settlement in late 2019.
Moving to the segment drivers excluding impacts from weather and dilution.
Our UK regulated segment earned $1 33 per share a one cent year over year decrease.
The decrease in UK earnings was primarily due to lower adjusted gross margins driven by lower sales volumes, primarily due to the impacts of COVID-19.
Lower other income due to lower pension income.
Higher operation and maintenance expense and higher depreciation expense.
These decreases were partially offset by higher foreign currency exchange rates compared to the prior period with Twenty-twenty average rates of $1 47 per pound compared to $1 32 per pound in 2019.
In Pennsylvania, we earned <unk> 65 per share, which was seven cents higher than our results in 2019.
Pennsylvania results were primarily driven by higher adjusted gross margins, primarily resulting from returns on additional capital investments in transmission.
And lower operation and maintenance expense.
These increases were partially offset by higher depreciation expense and other factors that were not individually significant.
Yeah.
Turning to our Kentucky segment, we're in 55 per share in 2023 recent increase over comparable results one year ago.
The increase was primarily due to higher adjusted gross margins, primarily resulting from higher retail rates effective may one 2019.
And lower operation and maintenance expense.
Partially offsetting these items were lower commercial and industrial demand revenue.
Primarily due to the impact of COVID-19.
Higher depreciation expense.
Results at corporate and other were <unk> higher compared to the prior year.
Factors driving earnings results of corporate and other primarily included lower overall corporate expenses and other factors not individually significant.
Turning to slide 11, we outlined the trends we observed in weather normalized sales for each segment by customer class and since the beginning of the pandemic.
Overall lower demand in the C&I sectors continued to be partially offset by higher residential load and each of our service territories.
We also experienced a steady recovery in the C&I space, a certain restrictions were eased during the year.
In Pennsylvania residential usage steadily declined following the sharp spike we experienced at the onset of Covid.
<unk> is up about three five per cent compared to last year signaling strong demand from customers still working from home.
Yeah.
As for the C&I sector, we saw incremental recovery from the lows experienced in the second quarter and by year end were tracking less than 3% from behind prior year levels.
The largest declines remain primarily in the retail trade and services industry, which we expect will remain depressed until restrictions are lifted.
And Kentucky residential usage was up about 7% in Q4 compared to last year consistent with what we experienced in Q3.
We continued to experience a moderate recovery in the C&I sectors in Kentucky up substantially from the second quarter.
C&I volumes were down three 5% from last year's usage in Q4, which was an improvement from the 7% decline observed during Q3 <unk>.
Similar to Pennsylvania, the largest declines on the C&I sector continue to be seen in the services industry.
However, sales to menu to the manufacturing sector returned closer to the 2019 levels in Q4.
Finally in the U K residential usage also remained higher with volumes being up about 6% compared to last year.
Recovery in the U K CNI sectors has lagged our domestic jurisdictions overall, but it's continued to make a strong comeback down about 9% versus the prior year, a substantial improvement from the second quarter lows of over 20%.
While additional incremental Lockdowns were put in place during the fourth quarter. These impacts did not restrict the construction and housing industries and we have not seen a slowdown in operational activity in these sectors.
As a reminder, any revenue shortfall in the 'twenty 'twenty 'twenty 'twenty, one regulatory year.
Be recovered by W. P D in the 'twenty to 'twenty, two 2023 regulatory year adjusted for inflation.
That concludes my prepared remarks, and I'll turn the call back over to Vince.
Thank you Joe before I briefly highlight our 2021 strategic priorities.
Just want to reiterate how proud I am of what we were able to achieve in 2020 under truly remarkable circumstances.
Operationally, we didn't Miss a beat delivering very strong results financially, we overcame stiff headwinds to achieve our earnings guidance and returned capital to share owners.
Internally I saw our businesses collaborate like never before as we work to keep each other safe and tackle COVID-19.
And at the end of the day I truly believe we made a positive impact on society and that's the kind of purpose that really unites employees at all levels across PPL.
In 2020, we demonstrated PPL tremendous resilience and agility.
And as I've shared with our employees I truly believe we will emerge from this pandemic stronger and more united than ever before.
With that in mind, our clear focus moving forward is on delivering long term value for our customers and our shareowners.
In 2021 that includes completing the process to sell our U K utility business and repositioning PPL as a purely U S focused utility company.
I'm pleased to report that the process to sell WPB remains on track and we continue to expect to announce the transaction in the first half of this year.
As we shared previously we believe the sale of the UK business will simplify our business mix and strengthen our balance sheet and enhance the company's long term earnings growth rate in.
In addition, we believe it will give the company greater financial flexibility to invest in sustainable energy solutions.
Another top priority of ours. This year is as always delivering electricity and natural gas safely reliably and affordably.
No job, we do is more important than that.
And this year, we will remain focused on continuous improvement innovation benchmarking and best practice sharing.
As we seek to once again deliver industry, leading operational performance and provide a superior customer experience.
Other notable priorities for 2021 include advancing our clean energy strategy and reducing ppl's carbon footprint.
Further enhancing the day I culture I spoke about earlier.
On building strong communities through philanthropy volunteerism and customer assistance.
In conclusion, as we look to 2021 and beyond I am excited about the opportunity we have to reposition PPL for future success and I'm confident we will continue to deliver long term value for our customers our shareowners and the communities we serve with that operator, let's open the call for questions.
Thank you we will now begin the question and answer session.
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Today's first question comes from Julien Dumoulin Smith with Bank of America. Please go ahead.
Hey, good morning team. Thanks, so much from the time.
Hey, the only thing.
Hey, good morning.
First question.
Listen, let me pick up where you just left that conversation on how do you think about strategic opportunities in terms of the size range realistically, we've seen some developments today and otherwise so how do you think about the scale of the transformation that you guys were thinking about it and we're using those proceeds could they exceed the size of those.
Proceeds just to kind of puts on some.
Perhaps parameters or additional parameters around that and then I got a more detailed follow up.
Yeah, Julian on on that point I really don't.
Want to speculate on.
Potential M&A scenarios are.
On a hypothetical.
M&A type scenarios so.
Just don't think it's appropriate to get into that.
Right, but it maybe.
Net simplify the it doesn't need to be limited by the use of probe use of cash proceeds here right. There. There's a lot of things you'll look at et cetera.
Yeah.
I mean again I don't want to talk about any specific guidance.
I would.
Yeah.
Alright.
It felt evidenced the ask here.
Hi can you guys describe the number of potential opportunities here tied to developments in Kentucky I just wanted to clarify how do you think about ownership of those investments range as the process assumptions et cetera can you can you walk through that a little bit I know that you know the process is underway, but can you speak to your sense of confidence.
Yeah, Julian just just clarify, which which assets are you referring to.
Just the opportunities that emerge out of the coal retirements in Kentucky.
Oh, Yeah, and I'll ask Paul to maybe comment on on kind of what were thinking there certainly the.
As we're looking at what's happening at the federal level and the buys and administration right. It's it's still early yet in terms of.
You know anything specific coming out of the Bakken administration, but I think it's clear that.
They intend to make policy addressing climate change rate of priority and so we will.
We will certainly continue to.
Remain engaged with the.
On the administration.
Their goals two to advance some of those policies.
Obviously rejoining.
The Paris agreement will will certainly lead to more aggressive U S carbon reduction commitments.
Either 2000 32035.
It remains to be seen there.
The targets that are being discussed there certainly would require advancements in technology.
To be able to achieve those is its really not feasible today.
From our industry to to really be net zero by 2035, which is what they are talking about so well you know we'll continue to discuss these challenges with the administration.
As were engaging with E and F and other industry groups.
We will continue to do that to support what we think is the most efficient way to accomplish those goals as you know the industry has been supportive of the overall goals, we don't we don't quite.
Quite have agreement on.
Uh huh.
On how to get there and the ability of the industry to meet those aggressive targets, but but Paul do you want to talk about maybe how we're kind of thinking about things.
In Kentucky, recognizing that it's pretty early in the game.
Sure.
I would point out as you may know, but point out that what we will need to be doing as we have in the past is whatever actions, we would be proposing that we would need to demonstrate to demonstrate that it's the lowest most reasonable cost initiative and so in that to your question, we will certainly be.
Looking at the build versus the buy.
The opportunities that we have.
It will be incumbent upon us then to be able to put forward a good case to the public service Commission on actions moving forward. So I think in that construct of demonstrating the lowest most reasonable cost. That's the way we'll have to operate and we've done that well on the past and I expect that to happen again here on the.
Future.
Got it so in summary, my interest.
A little early on this RFP.
Absolutely as Vince indicated its the first quarter ended the first quarter will get responses back as you may have seen our <unk>.
Information put out on.
Coal retirements was the latter part of the decade. So yes, we're still early on for sure.
Okay.
Got it Okay, Alright fair enough I'll leave it there. Thank you guys.
Yeah.
And our next question today comes from Burgers Chopra Evercore ISI. Please go ahead.
Your line is maybe true.
I apologize good morning, guys. Thanks for taking my question.
Just oh guess what.
One quick clarification did the Pennsylvania rate base growth.
Is that lower versus your previous disclosure and if so why.
Yeah.
Yeah.
Yes.
Yeah.
Yeah.
Yeah, Theyre cash in terms of the.
Overall.
Investment in the business as we've indicated.
We are we have added on a like for like basis additional capital in the plan.
I think what you're what you might be seeing is the effect of.
2020 ones.
Capital plan versus 2020, Fives capital plan and so.
We were we were at $3.2 billion of spend this year.
And the parent plan has about $2 7 billion in 2025, so you'll see a little bit of an impact on the on the growth rate.
As a result of that but plan over plan.
As we've talked about we only include known projects in our capital budgets.
As we've said historically as we execute the plan we tend to find additional capital in.
Overall, including the U K, we added about $1 billion of incremental capital plan over plan. So.
But specific to your growth question it could be just the larger number of dropping off versus the 2025 number coming in.
Got it okay. So so I.
I guess, essentially it's allocating more capital towards.
Kentucky, and Pennsylvania is a larger base right is that is that sort of what I heard.
You started your starting point in Pennsylvania is a larger base and then.
Going forward there is higher.
Sure sure of capital towards Kentucky.
Yeah, I think that's right.
Okay perfect. Thank you and then you did say that there are additional opportunities that you may identify as you sort of from up the plans. So that's clear.
Just any color Vince on the the UK sales process. I mean are you still in discussion phases is that is that fair to assume here or just any sort of updates since the since the last call we had.
Yeah, no real updates to guess I would just say that.
As you can appreciate this is a very competitive and confidential process. So.
Not really in a position to provide additional details.
Regarding the specific process as I indicated in my.
Opening remarks the process.
Is continuing to progress.
As we would've expected and and again, we continue to expect to announce.
Something in the first half of this year.
Understood. That's all I had thank you guys.
And our next question today comes from Steve Fleishman with Wolfe Research. Please go ahead.
Yeah.
Hey, good morning.
So.
Hey, Vince couple questions, maybe at least one number from you can answer.
Just on the new first talked about selling the U K business you did talk about the idea of.
I was just selling it per cash the potential maybe like asset swaps being part of it is that still on the table potentially or is that less likely now.
Yeah.
Well I would just.
Unfortunately, I don't think Thats, why don't get be able to get into a lot of detail on okay. Just given given where we are in.
In the process I, just don't think that's appropriate at this stage to get into any details certainly.
On what.
Potential buyers are bidding yet.
Second question that I think you might be able to answer so at some point you are going to announce an outcome of this can you just remind us.
Expected timing for like how long from announcement to closing.
You know how to actually get the money if youre getting money.
My recollection is you've talked about it being pretty fast in the U K, but can you just maybe give us a little sense of that process. After you. Once you have announced whatever you are announcing.
Yeah, it's certainly quicker in the U K than it is in the U S.
We do have a few.
Required approvals that we need to get.
As part of this process that we didn't need to get when we acquired central network. So I.
I think I had indicated in the past that we have closed that transaction from announcement to signing in about 30 days.
Wouldn't expect us to be able to close.
This transaction that quickly.
But it'll still be within just a few months, it's not going to be significantly beyond that.
Okay, we wouldn't expect it to be anyway.
Yeah.
Okay.
And then.
I guess just in thinking about.
Yeah.
In terms of use of proceeds I guess the.
Youre going to suddenly have in theory, if it's cash a lot of cash.
To you is just is there are you willing to just sit on cash for a while if you need to.
Or just how are you thinking about timing of.
Putting money to work.
Yeah. So let me just reiterate kind of the four main areas that we've talked about.
In terms of deploying that the use of proceeds and then I'll ask Joe.
Maybe to talk about timing.
Timing, but.
Yes, the first of those which we've been pretty clear about is strengthening the balance sheet and again that would be geared towards targeting mid teens <unk> to debt.
Metric out of the gate and then having our holdco debt.
<unk> 30 per cent of our total debt position.
The second is.
Really directly supporting.
Future rate base growth, whether that's via organic with our current utilities or through other investment opportunities and rate regulated assets here in the U S.
The third is potentially investing in renewables as our tax position could change post sale, we've talked about that as well.
Sales of renewable position could be in a.
Better competitive spot wholesale.
And then the fourth is really potentially returning capital to our shareholders, but in terms of sitting on the cash Joe why don't you talk about kind of how we think about.
Timing of executing on those.
And again those are Steve those are all levers that we can pull we really won't know.
Which of those and how much of any of those we would actually execute on until we know what the what the quantum of proceeds are and then ultimately what the use of proceeds will be but Joe anything you want to add on that.
Yeah, I think that's right. The only thing I would add Steve is that we'll have to look at from a timing perspective.
On the opportunities in each of those areas that that Vince highlighted and then certainly we'll want to be disciplined.
Fishing and whichever which went on every one of those we're pursuing so.
I don't have a perfect answer for you on on the time required, but certainly efficiency on our part and as always our disciplined approach to these things will be drivers of that timing.
Okay, Great that's helpful. Thanks.
Sure.
Sure.
And our next question today comes from Anthony Crudo with Mizuho. Please go ahead.
Hey, good morning, Vince Good morning, Joe if I could just follow up on.
Steve's question.
If I think about a year from now the <unk> 2021 earnings call slide deck.
You think PPL has fully completed the transition by day, where do you think.
Net 20.
The 2022 was a transition year for PPL.
Yeah.
Boy I really don't want to speculate on that at this point Anthony certainly we will be looking to maximize the use of proceeds.
Too to really maximize the shareholder value there right and.
Whether that entails something on the buy side here in the U S or renewables or.
Efficiently deploying it to the balance sheet.
That that all remains to be seen so I think it's really hard for us to indicate today, what that what that 12 31 21 deck is going to look like but.
We will probably have a better sense of that when we get when we get closer to execution of the deal but.
At this point I think.
No visibility into that not quite clear.
Great and then I guess, just one last follow up on I apologize if you hit this before just a day.
I believe you mentioned close to is it $400 million of.
<unk> investment in Kentucky.
I guess is that included in your Capex and I think previously maybe maybe I have my jurisdiction drawing was very challenging in Kentucky.
Has that been resolved.
Yes, so of the $400 million increase in the capital plan that we have for Kentucky $325 million of that is for the a M. On investments. So so yes. The IMI is in on our updated capital plan.
We are taking a slightly different approach to the.
The CPC on for this project Paul do you want on maybe just touch upon.
On how we're thinking about deploying a M I.
Sure first of all I would say that yes.
A few years ago.
We were denied the a M on the application for CPC them that we've put forward with the commission, allowing us to and asking us to do some more piloting and then suggesting that we can come back in.
We have done on all that we have built what we believe to be a pretty solid business case will providing opportunities in and cost benefits to customers to vince's point the approach that we're taking on this.
Is as part of the rate case, and the C. P. C M not having that capital go into the the rate base, but rather have a a few D. C treatments so that overtime.
O&M savings that we're projecting to the customers are effectively paying for that capital.
So.
The basics, though on the case that we think that we are putting forward. We think it's really strong and so we're very hopeful that the commission will rule in the positive on that case.
Great. Thanks for taking my questions guys I appreciate it.
Sure. Thanks Anthony.
Ladies and gentlemen. This concludes the question and answer session I'd like to turn the conference back over to the management team in place on all of ours.
Great just want to.
Thank everybody for joining the call today and stay.
Stay safe out there with with this winter weather it depending on where you are.
Thanks, Thanks, everyone for joining.
Thank you Sir This concludes today's conference call. We thank you all for attending today's presentation.
Connect your lines and have a wonderful day.
Yes.
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