Q4 2020 Alliant Energy Corp Earnings Call
Good afternoon, and welcome to Alliant energy.
Conference call from fourth quarter and year end 2020 results. This call is being recalled being recorded for rebroadcast at this time all lines are in listen only mode. I would now like to turn the call over to your host Susan <unk> Investor Relations manager at Alliant Energy. Please go ahead.
Good afternoon.
I'd like to thank all of you on the call.
And on the webcast, especially on mix today, we appreciate your participation joining.
Joining me on this call are John Larsen, Chairman, President and Chief Executive Officer.
Robert Julian Executive Vice President and CFO.
Following prepared remarks by John and Robert We will take time for questions from the investment community.
We issued a news release last night announcing Alliant Energy's fourth quarter and year end 2020 financial results and affirmed our 2021 earnings guidance. This release as well as supplemental slides that will be referenced during today's call are available on the investor page of our website.
Energy Dotcom.
Before we begin I need to remind you the remarks, we make on this call and our answers to your questions include forward looking statements. These forward looking statements are subject to risks that could cause actual results to be materially different. Those risks include among others matters discussed in Alliant Energy's press release.
<unk> issued last night and in our filings with the Securities and Exchange Commission.
We disclaim any obligation to update these forward looking statements.
In addition, this presentation contains references to non-GAAP financial measures. The reconciliation between non-GAAP and GAAP measures are provided in the earnings release and.
And our 10-K, which are available on our website.
At this point I'll turn the call over to John.
Thank you Susan Hello, everyone and thank you for joining us.
2020 was a year, we will all remember.
It was also another successful year of growth and solid operations for Alliant energy.
Continued.
To consistently deliver on our purpose to serve customers and build stronger communities.
I'm proud of what our team accomplished and how we delivered on our purpose in a year with many challenges from the ongoing global pandemic ratio on justice and a destructive Rachel windstorm.
In the face of these challenges we finished.
Finished near the top of our original earnings guidance range from the 'twenty 'twenty.
On a consolidated earnings per share of $2.47 or.
Our non-GAAP temperature normalized earnings grew more than 7% over 2019.
This is the 10th year in a row of achieving our 5% to 7% growth objective. This.
Adjusted growth solid execution and operational results showcasing the resiliency and flexibility of our company.
I'll highlight a few of our many strategic and operational achievements from the year.
I'll turn it over to Robert who will provide more details on our solid financial and regulatory outcomes.
I'd like to start.
By mentioning a few of our recognitions from 2020.
I mentioned earlier the August to Rachel Windstorm, I'm proud that our efforts to restore electricity to our customers was recognized by receiving the Edison Electric Institute Emergency response Award.
Alliant Energy was also included in Bloomberg's gender equality.
Quality index highlighting.
Highlighting just 380 companies from around the World, we're committed to supporting gender equality in the workplace.
And we were recently named to Newsweek's, most responsible companies list.
We ranked 12th overall for our social responsibility efforts.
And to top it off for the fourth year in a row.
<unk> light energy has earned a perfect score in the corporate equality index issued by the human Rights campaign Foundation.
As I reflect on these achievements each showcase how we live our values as we care for others do the right thing and act for Tomorrow.
I'm proud of our Alliant energy team and thankful for all they.
Yes Chi perspective.
Made incredible progress on our goals and objectives. We ended 2020 with 42 per cent less carbon emissions than our 2005 levels well on our way to our goal of a 50% reduction by 2030.
This result is largely driven by the completion of our major wind expansion.
Making us the third largest owner operator of regulated wind in the U S. It was also achieved by building our highly efficient west Riverside generating station.
To further support our efforts to advance a cleaner energy future, we joined the low carbon resource initiative through the electric power Research Institute.
This.
This initiative is designed to identify test and develop technologies to enable a low carbon future.
The results of this important work will help guide our company and our industry as we look towards our aspirational goal of net zero carbon dioxide emissions from the electricity, we generate by 2050.
2000.
'twenty was another great year in advancing our clean energy blueprint, which serve as our guide to create a cleaner energy future for our customers and communities.
Last fall, we advanced our Iowa clean energy blueprint with our announcement to add approximately 400 megawatts of new solar energy by 2023.
This follows.
Follows our very successful one gigawatt wind energy expansion in Iowa, all delivered on time and on budget.
When the 400 megawatts of planned new solar is combined with our 1300 megawatts of owned wind.
Our existing solar farms and purchase renewable resources.
We're on a path to have.
More than 50% of Alliant Energy's, Iowa generation to come from renewables by 2030.
We also continue to advance battery storage and state plans to add 100 megawatts of distributed energy resources in the next several years.
The additional distributed energy resources all of the successful completion.
On a battery storage systems near Marshalltown enrolment, Iowa.
And the storage facility and decor, Iowa that includes a partnership with the United States Department of energy and the Iowa Economic Development Authority.
Turning to Wisconsin clean energy Blueprint helps advance the Badger state to a clean energy future.
Our plans to add at least 1000 megawatts of new solar power is on schedule.
Last spring, we announced our first phase of this effort identifying six future solar sites totaling 675 megawatts.
That's enough to power 175000 homes.
Later this spring we plan to announce the second phase.
Our solar expansion, which will include three projects, we purchased in the last five months as well as our self developed sites.
As we carefully planned closure of our remaining coal powered units in Wisconsin. Our plans will include ways to support our employees and our communities.
Energy blueprints are comprehensive and transparent.
Aaron's and designed to follow our proven track record of a thoughtful energy transition.
And our solar story in Wisconsin doesn't stop there.
We recently announced a community solar project in fond of lack county, where a portion of the energy generated from the one megawatt site will be donated to habitat for humanity to reduce.
Eric bills of residents.
We're also partnering with Dane County on 17 megawatt solar development, which will help bring the county to 100% renewable offset to the electricity consumed at their own facilities.
And we're partnering with the city of Sheboygan to install a one megawatt solar facility in the Sheboygan business Center.
As we advance our clean energy blueprint will continue to seek solutions that serve our customers' growing demand for sustainable solutions to help build stronger communities.
We also remain focused on our continued investments in our connected energy network across Iowa, and Wisconsin by advancing the deployment of advanced.
Dance distribution management system, a fiber optic network and expanding the use of smart energy systems and automated metering and.
In addition, our customer focused investments in the energy grid will result in more of our electric lines placed underground.
Major part of our efforts to improve grid resiliency energy efficiency.
And reliability.
Speaking of reliability I'm proud of the efforts by our team during the extended polar vortex that gripped much of the country. These past two weeks our customer focused investments are designed to ensure that we will continue to provide our customers with safe.
Reliable and affordable energy for decades to come.
We remain committed to advancing our clean energy vision through this balanced approach.
In summary, 2020 was an excellent year for our company and we look forward to building on that momentum in 'twenty and 'twenty, one as we focus on continuing our role as a leader in advancing renewable energy.
Bleeding customer focused investments.
<unk> on time and on budget delivering solid returns for our investors.
And living our values. Thank.
Thank you for your interest in Alliant energy I'll now turn the call over to Robyn.
Thanks, John Good afternoon, everyone.
Yesterday, we announced 2020 GAAP earnings of $2.47 per share.
Compared to $2.33 per share in 2019.
Excluding non-GAAP adjustments on temperature impacts earnings per share were up more than seven per cent year over year, driven by higher revenue requirements due to increasing rate base.
Partially offset by the higher depreciation and financing expenses from these rate base additions.
As John noted earlier, our dedicated employees rose to the challenge in 2020 by reducing O&M expenses to offset the impact of lower sales caused by the pandemic and day Rachael storm.
These efforts allowed us to finish the year in the upper half of our earnings guidance range.
We provided additional details on the earnings variance drivers on slides.
Four and five.
Our temperature normalized retail electric sales declined 2% in 2020, when compared to 2019.
Primarily driven by the impacts of the COVID-19, pandemic and loves the August to Rachel Storm in our Iowa Service territory.
While the pandemic related sales impact.
I have used in the second quarter.
Sales recovered quickly.
We're roughly flat to 2019 levels on the second half of the year.
The sales recovery experience as a direct result of the strength and resiliency of the economies in the states we serve.
Wisconsin's unemployment rate is 4% less than the U S unemployment rate.
And the state are experiencing population growth is neighboring states residents are moving to Wisconsin.
And in Iowa, the economy has been recovering even faster with an unemployment rate that is second lowest in the country.
As well as strengthening grain prices due to increasing demand from foreign countries.
Turning to.
Two our future Years' earnings you see on.
A solid path to delivering our earnings guidance for 2021.
And as we look further into the future.
We believe our strong capital investment plan will allow us to continue to deliver solid returns for our shareowners, including an expected 5% to 7% annual EPS growth rate through at least 2000.
24.
The key drivers of the 6% growth in on 'twenty and 'twenty, one EPS guidance over 2020 are related to investments on our core utility business.
Including our recently completed wind projects for Iowa, and Wisconsin customers.
These investments were reflected in W. Pills approved electric rates for 2020.
'twenty one and.
And I feel as renewable energy rider approved with its test year 2020, right with you.
Currently.
Moving to make up approximately 20% of our total rate base, which is one of the highest percentage of renewable rate base among all U S utilities.
We expect renewables will make up an even larger portion.
Of our rate base.
Invest in solar projects for Iowa, and Wisconsin customers over the next three years.
A walk from our 2020 non-GAAP temperature normalized earnings to the midpoint of our 2021 earnings guidance range as provided on slide six.
For 'twenty and 'twenty, one earnings guidance assumed a one percentage.
Growth in retail electric sales over 2020 levels.
This forecast assumes continued economic improvement and recovery from the COVID-19 pandemic.
Additionally, our employees have been working to add new customers and load to our system.
One recent example of success is our new wholesale customer.
We are in Wisconsin.
Validated water power company.
New customer came on line at the beginning of this year and brings up to 60 megawatts of new load to our system.
Well on energy strategy focuses on providing affordable energy to our customers, while continuing our decade long track record of growing earnings five to seven per cent.
As a reminder, we reached settlements in our Wisconsin jurisdiction to hold rates flat in 2021 are usually in excess deferred taxes and fuel savings offset a higher revenue requirements due to growth in rate base.
This settlement enables us to earn a return on our investments we've made on behalf of our Wisconsin customers without increase.
Increasing their base rates in 2021.
Yeah.
And on island jurisdiction, we expect to manage our business to allow us to stay out of rate cases for the next couple of years.
This has been made possible through collaboration with our regulators and stakeholders in Iowa on key items, such as deferring costs associated with the August retail store.
Storm.
And then the addition of the renewable energy rider.
Renewable energy rider will allow IPO to recover cost of the incremental rate base from our recently completed one gigawatt of wind while also passing on significant incremental production tax credits and fuel cost savings to our customers.
Additionally.
Our Iowa customers began seeing savings in the fall of 2020 as a result of our decision to terminate the purchase power agreement related to the Duane Arnold Energy Center five years early.
I feel is forecasting to get recovery of and a return on the buyout payment associated with this termination through a rider over the next five years.
While customers benefit from tens of millions of dollars on energy savings each year.
Slide seven has been provided to assist you in modeling the effective tax rates for our two utilities on a consolidated group.
The estimate a consolidated effective tax rate of negative 20 per cent for 'twenty and 'twenty one.
The primary drivers.
So the lower tax rate or the additional production tax credits from our new wind projects that were placed in service throughout 2020.
And the return of excess deferred taxes from federal tax reform from our customers.
The production tax credits and excess deferred tax benefits will flow back to customers, resulting in lower electric margins.
Thus the decreases in the effective tax rate is largely earnings neutral.
Turning to our financing plans.
In November 2020, we accelerated a $200 million debt offering at or Alliant energy finance subsidiary.
Originally planned for 2021 to capture a historically low interest rates.
As a result, our 2021 financing plan is currently limited to one long term debt issuance of up to $300 million that are Wisconsin utility.
And the only common equity activity, we were expecting in 'twenty and 'twenty. One is approximately $25 million to be issued ratably during the year through our shareowner direct plan.
And lastly on some key regulatory developments on our Tri state.
In Iowa current share Jersey user was recently appointed for additional six year term.
Cash Burns was recently appointed as a new member to the Iowa Utilities Board.
Welcome Board member Burns and congratulate share his or her additional term.
And in Wisconsin.
CW recently issued its final written order a proven dovetails rate stabilization plan in December.
The P. S. W. Also issued a procedural schedule for our first solar certificate on 40 filing in late 2020 as shown on slide eight.
The docket for solar.
So we see a filing is proceeding as expected, including the constructive public hearing held yesterday.
We anticipate a decision on this first 675 megawatts of solar from a P. S. W. In April.
Yeah.
Our 2021 key regulatory initiatives are listed on slide nine.
In the first half of this year.
We expect to make an advanced remaking principles filing in Iowa for a planned 400 megawatts of solar generation for IPO.
As a reminder, the key benefit to the advanced remaking principles process in Iowa is a certainty. It provides for the authorized returns are on on these assets.
And our three most recent advanced rate making filings.
Filings, we were authorized from 11% ROE from new generation assets.
You are always decided with each filing are fixed from a life of the assets.
In Wisconsin, we expect to file our second certificate of authority request in the first half of this year for the remainder of our announced solar generation at WP, though.
In addition, we expect to file a retail electric and gas rate review in Wisconsin in the second quarter for either one two or three years beginning in 2022.
We are thankful for the privilege to work in two states that are well known for constructive regulatory outcomes.
To continue our long standing practice of working collaboratively.
Average day stakeholders towards constructive regulatory outcomes on these key regulatory initiatives in 2021.
Okay.
As we conclude another successful year I'm excited about our flexible and thoughtful strategy at Alliant energy.
As John described earlier, we are a leading utility on renewable energy and environmental stewardship.
And we look forward to maintaining that leadership status into the future.
We will continue to deliver on our clean energy vision that will best serve our customers and shareholders as well as our environment.
We very much appreciate your continued support of our company and look forward to meeting with many of you virtually in the coming months.
As.
As always we will make our investor relation materials available on our website.
At this time I'll turn the call back over to the operator to facilitate the question and answer session.
Thank you that's it.
The company will open the call to questions from members of the investment community if you'd like to ask a question. Please signal by pressing star.
One on your telephone keypad.
Let's take up on it they've made sure. Your mute function is turned off to allow your signal to reach our equipment again that is going to be star one to ask a question I'll pause there just somebody might come on everyone that opportunity.
And it does look like we have some questions on the phone line, we will take our first question from Andrew Weisel with Scotia Bank.
Please go ahead.
Thank you good afternoon, everyone.
Yeah.
Hey, good afternoon Andrew.
My first question is can you repeat that stat I think I heard you say that Iowa, we'll be at 50% of generation from a new renewables by 2030, I know you have the overall target of 50.
<unk> three per cent from renewables. So does that include both Iowa, and Wisconsin and does that include owned M. P. P. Eight.
I think you've got all that right on there Andrew So the first one to 50 was Iowa I think you've got all the rest so spot on.
Okay great.
How much of that is owned or said differently what percent of your own capacity will be renewables.
You know I'll.
I'll give you I think rough numbers of around 70% is owned and 30% purchase state of course, that's going to change a bit.
We're bringing units online and we renew but that's that's a high level split for you Andrew.
Okay, great. Thank you.
Next on O&M as a impressive year after several other from my previous impressive years on my right. What's your outlook for 2021 and beyond and how much.
To break things you identified in 2020 would you consider to be sustainable versus one time.
Yeah, Great question. This is Robert.
First off it's a key component to providing affordable energy for our customers. So we're very focused on that.
Currently targeting sustainable O&M.
Reductions.
Of the C zone, three to five per cent on an annual basis off of our 2019 baseline.
I support that goes from affordability.
Our employees did an excellent job in 2020 are capturing.
Capturing some additional savings largely to offset the Covid encourage Olympics and I'd say, it's a pretty even mix between sustainable.
Savings and temporary savings that we saw in 2020.
Some of the temporary items with things like travel health care and insurance I believe.
Awesome, great progress with sustainable savings.
Well I tried to put it probably in the three main areas.
One is technology, we continue to advance technology, including things like the.
Ami that we put into service in early 2020 that really helped reduce some of them do the reading costs and so.
So a great improvements with automation and self service that helped us reduce some of our call center costs.
And then we also obviously have some enhanced connectivity through the pandemic here that we think will be able to leverage into the future on so that's.
On one category second it's probably on the generation side.
Although we're seeing some pretty strong efficiency gains on its own.
Our existing coal plants that allows us to operate with your employees.
And then lastly on the distribution side as we've talked about with our strategy. We continue to focus on trying to move from overhead underground and that's really going to position us well to have fewer O&M costs.
In the future so so back to your.
Specific question I'd say, it's probably in a pretty even mix between the two but think of on a longer term basis I really tried to achieve maybe a 3% to five per cent reduction and sustainable savings over the long term.
Great that's very helpful and a very impressive target last question.
Is you've had a very good track record in Wisconsin, and keeping rates stable and you mentioned you're planning to file a game in the second quarter is there any potential to further delay that are finding creative ways to keep our rates stable.
And then you mentioned that the kids could cover one two or three years what would determine.
And when would that depend on.
Yeah, Hey, Andrew.
Great question.
We entered last year as you recall are well positioned for a rate filing which we had some.
Low capex and other things that we have to put forward and found a path for stabilization and executed.
You did quite well under that we're well positioned again, but we have a very clear opportunity to put a filing in front of the commission that the I.
I guess I'd say that really cover one two or three years that's still.
An area that we're continuing to evaluate and we'll share more as we get closer to the second.
Quarter call. So appreciate that Robert anything you'd like to add.
And maybe one thing to note and Andrew one of the components of this case will be the expiration of some of the larger amounts of excess deferred taxes that were getting back to customers currently on.
Those are pretty well set in stone. So we don't have a lot of flexibility with those.
And fairly straightforward. So I don't think it'll be anything that would be controversial what the case itself and then as John indicated on the other key component is the solar projects that will be advancing so low.
More insights on when we get to a decision back from the PC there'll be in that April time frame for inclusion of debt most likely like we've talked about our second quarter filings.
And so the third on probably the last piece of debt rate filing is really to address the anticipated recovery from the Edgewater closest retired on the end of 'twenty 'twenty two so what we do.
This is the appropriate time for us to come in for a rate filing and the low level give you some more indication of the one two.
Two or three years, most likely when we get to the next earnings call on them.
Okay, certainly a lot of issues to discuss per thank you very much appreciate it.
Thanks, Andrew.
Okay, and we'll take our next question from Julien.
Hey, Lauren.
I'm, sorry, Smith with Bank of America.
Okay. Thank you.
[laughter].
Okay.
Yeah.
[laughter].
That's all good.
Thank you for you Mike I appreciate it.
Yeah.
If I can jump in here.
On the Colombia announcement, obviously it's.
Fairly large unit here can you talk about recovery of underappreciated planned securitization prospects in and whether or not you'd see legislation as being part of that conversation.
From your peers.
Necessarily I'm parsing that out route but I'm curious on how you think about that revenue specifically and then also the timing and resource planning.
Claiming as part of the replacement you know whatever they may eventually be around it.
Sure Great great.
Good to hear from.
Julian good afternoon.
So you know that's a.
Clearly with the.
Announced retirement, you know we look at the flexibility that we have on our Capex plans. So we do have some opportunity as we think about between distribution and generation, but there's no question there'll be some additional need we don't have the.
The details of the of the size and timing of that quite yet that's probably an area for later in the year, but we.
We do have an opportunity for additional renewables are likely to be coupled with storage.
We've been working on our development plans anticipating that we'll need additional renewables so as you.
No. We've got a lot of development efforts in place for what we did on wind in Iowa, and then our solar efforts plus storage in Wisconsin. So we're going on we're going to lean heavily on a lot of the great work. We've done over the last few years on that as it relates to securitization you know there is a.
Provision that currently exists.
And I'm sure there's going to be discussion about.
You know the securitization and the potential for that to be you know another tool. If you will on the process, but you know as we think about it Julian it's it's really about having the right balance between you know investor outcomes and customer cost and affordability are our path forward.
Forward with our tax equity, we see our solar projects to be perhaps the lowest if not among the very lowest cost projects that youre going to see on a on solar and renewables. So we feel very good about having that right balance with our tax equity on.
Certainly the process going forward.
I'm sure all of that will be in discussion relative to what's the best path for for that balance between customers and shareowners. So we expect reasonable outcomes. We have for many many years, we're very confident in the filings we put forward, but certainly more work to come on on that.
Robert anything you'd like to.
The add on to those two items.
Maybe just one one brief item to help with the clarification on the timing on so we've obviously announced the timing for the Edgewater facility retirement by the end of 2022 and now the Columbia by the end of 2024 of the other piece of the puzzle the west Riverside options.
And we're still working through the exact.
So on timing on those so once we have that like John said, we expect to have better clarity by the end of the year and so I don't think I'd like to get some more updates on the capex implications Taiwanese arisen resources, sometimes on the second half of 'twenty point on here.
Got it okay, so maybe to clarify that.
One.
Starting on line effectively to get that for the next for Q 'twenty. So.
<unk> 14, 21 call you.
If you have only the vacuum through the course of the back half of this year and then secondly, if you can clarify and sort of related to the long term outlook for five to seven is off from what base here just once a day pointed out again, sorry for the nuance.
Yeah Yeah.
First one.
Got it spot on with the timing and the second question was on the.
Yeah, I'll take that one Julien for the other day share it's off the 2020, Oh right right, if I normalize that for $2.42 over five to seven percentage off that day.
Awesome.
Thank you guys from the time really do appreciate a basketball I speak to you yeah.
Thanks.
Yeah.
Okay, and we'll take our next question from Michael Sullivan with Wolfe Research.
Hey, everyone I hope, you're all doing well.
Just first question just following on on on the Mascara.
Johnson Refiling there I think you alluded to one of the.
Potential rate offsets that you may have in taxes, which which has been consistent with the past is there anything else in the form of regulatory liabilities and maybe help quantify those at all in terms of write offs.
Yeah, Michael good to hear from you. So yeah, we do still have some regulatory liabilities remaining for the excess deferred taxes, they're just not at the same level that we're experiencing here refunds from 2021, and we do on some other Oh go on.
On regulatory liabilities that were actually approved as part of the rate stabilization plan.
To get approval from the WTO.
Our section in December on one more notable one was some liquidated damages that we received as part of the West Riverside.
<unk> I'm thinking about it as roughly $35 million to $40 million, so and theres. Some various other benefits that we've been accumulating over time.
So from a.
Excess earnings above our authorized returns or they have a sharing mechanism for them to think of it as probably in the neighborhood of a somewhere between probably $60 million to $80 million in total.
Latoya liabilities that are available to us to be able to use over the next several years to help offset some of the beta on the rate implications.
Got it okay. That's helpful.
And then switching over to Iowa, I, just wanted to check in I thought in your last deck you had on the calendar. There are filing are related to the 2020.
Test period that that was going to be made in Q2 of this year and I didn't see that on the updated deck. So just wondering where that.
On our stance.
Yeah, I think what you're referring to is there is a subsequent proceeding process. So as part of their 2020 rate filing.
There are rules that are still being drafted or not completely final yet, but the other day recently decided that we would be coming in for what they call a subsequent proceeding.
And really what that's intended to do is to make sure that the rates that we put into effect into 2020, a reasonable interest and we believe they were on we don't expect any refunds or any potential changes in the future and that's largely going to be based on where our earned ROE is came out from the end of 2020.
I actually.
Under earned.
In 2020 below the 10 per cent authorized level. So we don't expect any impacts of that book.
We'll still be working through the process with the other utilities board over the next several months.
And then there's also would be some processes to finalize those rules on exactly what needs to be filed.
Next several months.
Okay great.
And on my last one was just you gave that data point on.
I think 20%.
<unk> in rate base right now any parameter.
Parameters, you can help give on where that could potentially go over the next.
Four to five years thing on the planet that you've laid out.
Well I'll give you a directional area of north Michael but it.
Probably no.
No additional specifics for right now, but it's certainly growing.
Okay, great. Thanks, a lot.
You bet. Thanks, Michael.
Okay and I have one last question on.
On the phone lines on what they get from Andy Levi with Hite hedge.
Go ahead.
Hey, guys how are you doing out there.
Great.
Everything is running right now.
On my taxes, but.
Just a couple of questions. So.
First just on both Iowa, and Wisconsin as you go through E T regulatory process.
What's the opportunity.
Yeah.
And timing of the answer on.
Attempts on settlements, but.
Yeah.
Maybe think of Iowa is where we're probably a couple of years away from.
Our rate filing a form of re filing if you will in Iowa. So that's that's a little bit out there.
You know in Wisconsin, we've had a good track record of working very collaboratively and and we'll put a very solid case together.
So there's always that potential I don't I don't want to handicap it beyond that but.
We've had some very recent success in in achieving that type of a settlement outcome, but.
Other than that I'd say it's.
As we have been in the past years, I think that opportunity exists.
Okay, and then and then just focusing on the clean energy blueprint.
You know the focus on you know.
On Investor calls or just.
No.
And so outside of the ports to themselves.
And a few transmission on the childhood.
Good day.
But then you know.
Talk to you know some of my peers.
And what happens after that.
And I guess given on conversations I've had with you guys from the past.
There seems to be a lot of runway beyond that from transition.
Right.
That needs to be done to help them from.
Transmission, but somehow keeps moving.
Okay.
Iowa.
From birth to a.
On the clean energy growth.
Could you kind of talk about the runway.
Opportunities there, but what it is.
From the Capex from revenue and what not.
The longer term opportunity there.
Sure happy to I'll, probably have if Robert wants to add any of the numbers there, but if you think about the clean energy future. It's it's really got to make sure that we think about how.
It's a transition generation and it really doesn't happen unless the distribution grid is also on <unk>.
Moving that way so we've got as I noted opportunities for resiliency to put on our systems for more overhead underground, we're starting that out and there's opportunity to grow that.
As well as having a stronger distribution grid at a voltage that allows for more distributed energy resources to connect so that's also an opportunity for us it's in our current but theres certainly an opportunity as we get more efficient for that those two areas to grow.
So we do.
Area of distribution areas, having plenty.
Plenty of growth potential for us, but as we do and in many cases, we start.
Kind of walk before we run and make sure that we get very efficient as we deploy capital maybe if there's anything on categories and growth numbers, Robert I'll ask you to weigh in.
Sure.
You see the good to hear from you.
Characterize our rate base growth is much in line with our earnings growth, we're not expecting any new common equity for the foreseeable future. So we think we can manage the business appropriately to achieve our 5% to 7% EPS targets without.
Having much of an impact on customer bills over the long.
Randy.
Maybe just to add a couple more categories to the information judge heard of we still have repowering opportunities on urban sites, but I'd say, it's probably more on the second half of this decade.
But no we really don't have much of any storage built into our capex phones at this point on we'll do it from smaller I would say.
Running pilot programs that we're using but theres also some further opportunities there and then lastly, as we have got a series of coal plants still on Iowa.
The timing of any potential retirement, so if we think of that over the next 10 or 15 years, although likely to create some capacity means for us.
Could prevent provide some additional growth for.
Now on two more questions actually the storage taking on glad you actually brought on.
When I was discussing but.
A few weeks ago actually debating it on time.
Moving.
Well I guess what is your thinking on starts because obviously you don't pay from what you're installing.
For us.
As far as you know some of them on storage would be a good incremental addition on.
To those that might be kind of look at what next downhill.
No it's already doing storage.
It's a great opportunity in the months that software for storage.
Evolved has evolved its really a benefit.
To your customers zone.
Why not why have you guys not.
Hold on a storage place.
Plan yet.
Alright.
Yeah, Hey, great question.
On that Andy and certainly as I had shared we do have storage facilities I'll call them small again, we are we kind of prove those technologies out and then scale them up we've done some grid deferral storage work up to this point on it.
Tied it in with some of our community efforts and community.
<unk> solar side, so think of that as a little bit smaller size. We do have a development work going on right now to size that up and so that's think of that as grid deferral, but as we're putting a larger scale wind and solar out. There. We also have development plans to look at adding larger scale storage.
Each to help you with the front and back end of of how those units introducing to the market. So completely agree we're making sure that it's you know, it's always got to make sense to our customers so where.
We're eager to add those when it makes sense for our customers and we're in heavy development work right now.
So what I guess moving.
Third quarter on when you rollout.
Capex timing.
Hmm.
The numbers again.
You know as well Andy.
Okay, and then and then the other thing.
<unk> done on the.
Hum.
We go on the line.
Right.
On a large opportunity there maybe you can talk about it doesn't it doesn't adult each on their lives.
To begin to increase.
To J D to a much higher cash.
We just didn't talk about that.
And kind of where you are talking to them.
On the process on that on maybe some numbers around.
I mean, I don't know if you want to do miles but.
How much of your system.
Committed.
With things moving type of measurement that you can give us.
Our net capex or.
Per our conversion, whether it's mileage or whatever.
Yeah, certainly as we think about that Andy I think you're referring to our efforts to put it.
Right J D.
Backbone system out there and that's what I had referred to earlier and that allows us to put more <unk>.
Distributed energy resources or customer connected resources to our grid.
We're in the beginning stages of that I think we're roughly out I'll use numbers around 5% of our system, but think of it as.
25, you know that's something you want to have condensed to certain areas, where you convert smartly and in certain areas as youre doing other work.
It makes sense and as we look for areas that have higher growth for some of those DVR penetration.
You know the cost per per unit and in.
As X I don't have those are readily available, but that would refer back to our opportunities for additional distribution red spend.
Think about getting more and more efficient in that space. So think about it as the tail end of our current Capex and I think you'll see more of that as we free refresh our capex going.
And cap.
Well, let me ask it this way maybe Robert with net sales. So you said you are going on right. Now. It's just you know five per cent of your system that you kind of do the work on.
The upgrade Robert revenue, how much you're spending on that.
Just that one.
Got.
Forward your debt.
Project I don't know if it's one big project debt.
5%.
Any type of kind of numbers around that.
I mean, right now were probably replacing our system at the normal replacement rate of.
Two per cent of the total system on an annual basis.
Itself.
Roughly about 43000 miles away.
But a fourth of it is underground and about three fourths of its overhead at this point.
And like John said only about five per cent of it is at the 25 kv level at this point in time. So when you think about cost of funding.
Stuff.
Simple underground you probably talked on a couple of hundred thousand dollars a mile at least depending on whether it's in town or in the country. So that's a lot of opportunity for us we don't have.
A specific quantification of the exact dollars, but you'll see in the future, but that's really part of a flexible plan, though we have the cause.
For this generation of opportunities in the near term.
Pushed some of that out a bit.
We see a great opportunity maybe in the second half of this decade into the following decade for those types of expenditures and a good long runway to the growth that we're targeting.
Great. Thank you guys very much.
I'll stop.
We have open questions.
Right.
When it goes.
Okay. Thanks, and it's good to hear from you.
And it does look like we have an additional question on the phone lines from.
Andrew Weisel with Scotiabank. Please go ahead.
Thanks for the follow up after Andy.
Stop I tried to send everyone a happy on where it's all kind of guilty grabbing one more question here.
But if I may so you've got in the slide that your carbon emissions were down 42% in 2020 versus 2005.
Any way to quantify how much of that was due to the impacts of the pandemic you know volumes obviously.
Andy just I was a bit abnormal last year to say the least are you expecting that number to go up a little bit before it resumed a downward trend.
Yeah, you know.
Andrew when you think of that it's it's one of those numbers that will cycle up and down a bit you know we look at the overall trajectory.
This pattern of that getting to our state of goal when.
When we when we reach 2030, so we.
We like the path that we're on and I'm sure. There's a there's a contributor from a number of those factors, but we also look at the transitions, we're making with some of our planned retirements of coal facilities, the highly efficient west Riverside. So.
<unk> it.
Don't have the specifics that number will bounce around a bit but we look at kind of the overall trend line and it's a it's really on track with what our stated objectives are.
Okay. So on the on target for the 50 per cent reduction by 2030, and net zero by 2050 right on target not necessarily.
Better.
Yeah, I'd say on target for right now but.
I appreciate the question.
Okay, great. Thank you.
Thanks, Andrew.
And it does appear that there are no further questions at this time well scale I'd like to turn the conference back to you for any additional or closing remarks.
That concludes Alliant Energy's fourth quarter and year on earnings.
A replay will be available through February 26, 2021 at 888, 203, 1112 per U S and Canada, or 790, 457 day or a two year old four international callers should reference conference I.
It's all on 70, 5543, and 10 of $95 78. In addition, an archived on the conference call in a script of the prepared remarks made on the call will be available on the investors section of the company's website later today.
We thank you for your continued support of Alliant energy and ill free to contact.
<unk> with any follow up questions.
Yeah.
[noise].
Yeah.
Yeah.