Q2 2021 Ameren Corp Earnings Call
Hum.
[music].
Greetings and welcome to Ameren Corporation's second quarter 2021 earnings call. At this time, all participants are in a listen only mode.
Question and answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note this conference is being recorded.
It is now my pleasure to introduce your host Andrew Kirk Director of Investor Relations for Ameren Corporation. Thank you Mr. Kirk you may begin.
Thank you and good morning on the call with me today are Warner Baxter, Our chairman, President and Chief Executive Officer, and Michael May and our executive Vice President and Chief Financial Officer, as well as other members of the Ameren management team joining us remotely.
And Michael will discuss our earnings results and guidance as well as provide a business update and we will open the call for questions.
And we begin and let me cover a few administrative details.
This call contains time sensitive data that is accurate only as of the date of today's live broadcast and redistribution of this broadcast is prohibited to assist with our call. This morning, we have posted a presentation on the Ameren investor Scott Dot Com homepage that will be referenced by our speakers as noted on page 2 of the presentation comments made during this conference.
Call may contain statements that are commonly referred to as forward looking statements.
Such statements include those about future expectations.
<unk> plans and projections strategies targets estimates objectives events conditions and financial performance. We caution you that various factors could cause actual results to differ materially from those anticipated.
For additional information concerning these factors. Please read the forward looking statements section and the news release, we issued yesterday and the forward looking statements and risk factors sections in our filings with the SEC.
Lastly, all per share earnings amounts discussed during today's presentation, including earnings guidance are presented on a diluted basis, unless otherwise noted and here's Warner who will start on page 4 of our presentation.
Andrew Good morning, everyone and thank you for joining us.
This morning, I'll begin with the statement that I've been making for quite some time now.
Simply put our team continues to effectively execute our strategic plan across all of our businesses, which includes making significant investments and our energy infrastructure to enhance the reliability and resiliency and the energy grid as well as transition to a cleaner energy future and a responsible fashion.
These investments coupled with our continued focus on disciplined cost management and delivering significant value to our customers.
And you use and shareholders.
Moving now to our second quarter earnings results.
Yesterday, we announced second quarter 2021 earnings per babies per share.
Our earnings were down <unk> 18 per share from the same time period, and 2020, primarily due to a change and the seasonal electric link design and Ameren, Missouri and reduced earnings <unk> 19 per share.
The impact of this change and May design will reverse in the third quarter 2021, and is not expected to impact full year results.
I will discuss the other key drivers of our second quarter earnings results a bit later.
Due to the continued strong execution of our strategy and I'm pleased to report that we remain on track to deliver within our 2021 earnings guidance range of $3 and 65 per share.
And $3.85 per share.
Speaking of the execution of our strategy, let's move to page 5 where we reiterate our strategic plan.
The first pillar of our strategy stresses investing in and operating and our utilities and a manner consistent with existing regulatory frameworks. This.
It has driven our multiyear focus on investing and energy infrastructure with a long term benefit of our customers.
As a result, and as you can see on the right side of this page during the first 6 months of this year, we invested significant capital and each of our business segments, including wind generation and Ameren, Missouri, which I will discuss later.
These investments are delivering value to our customers.
As I said before our energy grid stronger more resilient and more secure because of the investments, we're making and all 4 business segments.
Consistent with the Missouri Smart energy plan, we've made significant investments to heart and energy grid, which has reduced outages and installed nearly 300000 electric smart meters for customers.
These smart meters per help customers better manage their usage and control their overall energy costs.
And Illinois, we continue to execute on our electric distribution and gas monetization action plans.
And the plans include investments to strengthen electric power Poles replaced gas transmission pipelines and compression coupled steel mains.
We're also implementing efficiency measures, including mobile enhanced communications and assessment capabilities for our crews.
These improvements along with our investments and outage detection technology, resulting in improvements and system reliability and millions of dollars and savings for customers.
Moving now to regulatory matters and late March Ameren, Missouri filed a request for a $299 million increase and annual electric service revenues and a $9 million increase and annual natural gas revenues with the Missouri Public Service Commission.
And our Illinois electric business, we've requested a 60 million base rate increase required annual electric distribution rate filing.
These proceedings are all moving along on schedule.
We will be able to provide information on these proceedings as they develop later this summer and into the fall.
Finally, we remain relentlessly focused on continuous improvement and disciplined cost management.
<unk> and retain many of the cost savings that we realized in 2020 due to the actions we took to mitigate the impacts of COVID-19.
Moving to page 6 and the second pillar of our strategy enhancing regulatory frameworks and advocating for responsible energy and economic policies.
Starting in Missouri, and Mei and Missouri Legislature passed a bill, allowing for securitization and the state.
And this constructive legislation, which was trained by governor parsing and July <unk>.
Another important regulatory tool to facilitate a transition to a cleaner energy future and a cost effective manner for our customers.
However, as we have stated in the past a robust integrated resource plan does not rely on securitization to be successful.
Our flexible and responsible plan, which includes approximately $8 billion of investments and renewable energy through 2040, the retirement of all of our coal fired energy centers and extending the life of our carbon free Callaway nuclear energy center focus on getting the energy, we provide to our customers as clean as we can and <unk>.
As we can without compromising and reliability customer affordability and the evolution and new clean energy technologies.
And as I will touch on later I am pleased to say that we are already taking steps to implement that's important plan for our customers.
<unk>, Missouri and our country.
Moving out of Illinois.
Last month, the Illinois, Commerce Commission approved Ameren, Illinois electric vehicle charging program.
Under this program workshop, and central and Southern Illinois as.
And as well as implement special time based delivery service rates and other incentives.
To help encourage the use of electric vehicles.
We are excited about this new program because it will drive greater electrification of the transportation sector as well as help the state of Illinois and move towards is clean and.
Business.
The performance based regulatory framework in place today has delivered strong value for customers and shareholders.
Orders over the years.
The framework is scheduled to sunset in 2022.
As a result, we long term regulatory policies that support the important investments and energy.
And infrastructure, while enabling us to earn fair returns on those investments.
As you know throughout the regular letters.
The slate of session, which ended in late May we advocated for the downstate clean energy Affordability Act, which would largely extended.
Existing framework and until 2032.
And putting in place provisions and set the Ameren, Illinois electric distribution and ROE at the National.
Average.
At the same time, many other energy related legislative proposals from other stakeholders for proposed during and legislative session.
And then proposal from Governor Pritzker labor and environmental groups to address the potential closure of nuclear plants and the states.
Illinois, clean energy transition and the electric distribution framework going forward.
For months stakeholders have been and discussions and are seeking to find and appropriate compromised all of these proposals.
And our progress made and these issues regular legislative session ended on May 31, with no energy legislation being put before the Senate and house of Representatives for a vote.
A special session lets call. It in mid June to further discuss kraft's energy legislation and mobile is filed and our action taken.
So say, we will continue to work with key stakeholders to find a constructive solution to this important matter.
Turning to page 7 and for an update on FERC regulatory matters and.
And April PRC issued a separation and and regional transmission organization Archie M.
And as you may recall under the <unk>, the <unk> incentive and would be removed for utilities that had been members from and Ardshiel for 3 years or more like Ameren, Illinois and <unk>.
We have been very clear and therefore, a number of reasons and recently filed comments strongly posing.
The removal of theater.
Of course, we are unable to predict the ultimate outcome.
Some were timing of this matter is the FERC is under no timeline to issue a decision.
In addition, and June the FERC issued an order establishing and Joel.
This order establishes a first of its kind task force to explore with state commissions transmission related issues, including how to plan and pay per transmission facilities.
Recognizing that federal and state regulators share authority over different aspects of these transmission related issues.
The task force will be comprised of the FERC Commissioners and representatives nominated by the National Association of regulatory utility Commissioners from 10 state commissions.
The first public meeting is expected to be held this rule, making related to regional transmission planning and cost allocation processes.
We continue to assess the management.
Thank you filed comments with the FERC this fall.
Again, we are and.
Being able to predict the ultimate timing or outcome of this matter as <unk> presented no timeline to issue a decision.
Speaking of planning for future transmission needs.
Please turn to page 8.
As I discussed on the call and May MISO completed a study outlining a potential roadmap of transmission projects through 2039.
Taking into consideration the rapidly evolving generation mix that includes significant additions of renewable generation based on announced utility integrated resource plans state mandates and goals for clean imaging, our carbon emission reductions among other things.
And our MISO future, 1 scenario, which is the scenario that resulted in an approximate 60% carbon emission reduction, while 2000 and signed levels by 2039.
And so estimates approximately $30 billion per future transmission investment and the MISO footprint.
Further meisels creature 3 scenario resulted in an 80% reduction and carbon emissions below 2005 levels.
And 2039.
Under this scenario.
Estimates of approximately $100 billion of transmission investment and the MISO footprint would be needed.
It is clear that investment and transmission is going to play a critical role and the clean energy transition and we are well positioned to plan and execute potential projects and the future for the benefit of our customers and country.
We continue to work with MISO and other key stakeholders and believe certain fleet and this year's MISO transmission planning process.
Which is currently scheduled to be completed and the fourth quarter of 2021, however, and as possible the process could go into the first quarter of 2022.
Moving now to page 9.4 and update on our $1.1 billion dollar wind generation investment related to the acquisition of 700 megawatts of new wind generation and 2 sites in Missouri.
Ameren, Missouri closed on the acquisition of its first wind Energy Center a 401.
Megawatt project and northeast, Missouri and December.
And January Ameren, Missouri acquired a second wind generation project, the 300 megawatt atrophy and renewable energy center located in northwest, Missouri.
Im pleased to report that as of the end of the second quarter to etch and renewable Energy Center is now and service.
With both facilities now operating and marks a key milestone.
Turning now to page 10, and an update on Amazon and Callaway energy.
G Center.
As we previously discussed trends returned to full power as part of his 24th refueling and maintenance outage in late December 2020.
And when we experience and non nuclear operating issue related to its generator.
Phil Ross may to be Ryan, but generate a standard and rotor and order to safely and sustainably returned to energy center to service.
I am pleased to report that they generated project was executed very well and that the energy Center returned to service and August 4th.
Okay.
The completion of this project positions Callaway for a sustainable long term future.
The cost of the capital project was approximately $60 million.
As we have said previously the insurance claims for the capital project and replacement power have been accepted by our insurance carrier, which will mitigate the impacts of this outage for our customers.
In addition, we do not expect this managed to have a significant impact on Ameren financial results.
Turning to page 11, we remained focused on delivering a sustained and sustainable energy future for our customers communities and our country.
This page summarizes our strong sustainability value proposition, our environmental social and governance matters and is consistent with our vision and the way to a sustainable energy future.
Beginning with environmental stewardship last September Ameren announced this transformation and plan to achieve net zero carbon emissions by 2050 across all of our operations and Missouri and Illinois.
This plan includes interim carbon emission reduction targets of 50% and 85% low 2005 levels and 2030 and 2040, respectively and is consistent with the objectives of the Paris agreement and limiting global temperature rise to 1.5 degrees Celsius.
We also have a strong long term commitment to our customers and communities to be socially responsible and economically impactful.
Finally, our strong corporate governance is led by a diverse board of directors focused on strong oversight, that's aligned with ESG matters and our executive compensation practices include performance metrics that are tight that are tied to sustainable long term performance.
Diversity equity and inclusion and progress towards a cleaner sustainable energy future.
And I encourage you to take some time to read more about our strong sustainability value proposition.
You can find all of our ESG related reports and Ameren investors Dot com.
Turning now to page 12.
Looking ahead, we have a strong sustainable growth proposition, which will be driven by our robust pipeline of investment opportunities and over $40 billion over the next decade that will deliver significant value to all of our stakeholders and making our energy grid stronger smarter and cleaner.
Importantly, these investment opportunities exclude any new recently been at a special transmission projects.
Moving the potential roadmap and MISO transmission projects I discussed earlier.
Which will increase the reliability and resiliency of the energy grid as well and enable our country's transition the electrification of the transportation sector.
And our outlook through 2013 does not include significant infrastructure investments for electrification and opportunities for not only create stronger.
And cleaner energy grid.
And our customers' needs and exceed their expectations, but they would also create thousands a day.
Jobs for our local economies.
Maintaining constructive energy policies that support robust investment and energy infrastructure, and and transition to a cleaner energy future and a safe reliable and affordable fashion will be critical to meeting our country's future energy needs and delivering on our customers' expectations.
Moving to page 13 to sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2021 and beyond will deliver superior value to our customers shareholders and the environment.
In February we issued our 5 year growth outlook, which included a 6% to 8% compound annual earnings growth rate from 2021 through 2025.
This earnings growth was primarily driven by strong rate base growth.
Do not include 1200 Meg.
Lots of incremental renewable and.
Investment opportunities outlined and Ameren Missouri's integrated resource plan.
Our team continues to assess several renewable generation proposals from developers and we expect to file this year and Missouri PSC for certificates of convenience and necessity for a portion of these planned renewal book investments.
I am confident and our ability to execute our investment plans and strategies across all 4 of our business team to get it done.
And past execution and our strategy.
On many fronts.
And us well for future success.
Further our shares.
We continue to offer investors, a solid dividend, which we expect to grow in line with our long term earnings per share growth guidance.
Simply put we believe our strong earnings and dividend growth outlook.
And a very attractive total return opportunity for shareholders.
Again, thank you all for joining us today I'll now turn the call over to Michael.
Thanks, Warner and good morning, everyone.
Turning now to page 15 of our presentation.
Yesterday.
And we reported second quarter 2021 earnings of <unk> 80 per share compared to 98 per share for the year ago quarter.
Earnings and Ameren, Missouri, our largest segment and decreased 18 per share driven primarily by a change and seasonal electric a great design, resulting from the March 2020 rate order, which provided for winter rates and ne and summary, and September rather than the blended rates used in both months and 2020.
The rate design changes decreased earnings <unk> 19 per share and is not expected to impact full year results.
Earnings were also impacted by the timing of income tax expense, which decreased earnings <unk> <unk> per share and is not expected to impact full year results.
As Warner mentioned during the quarter, we remain relentlessly and and been able to largely maintain the level of operations and maintenance savings this quarter that we experienced during the year ago period, which was significant.
Certainly affected by COVID-19.
The increase and other operations and maintenance expenses, which decreased earnings <unk> <unk> per share was primarily due to more favorable market returns and the cash surrender value of company owned life insurance and the year ago period.
And you can see and we have worked hard this year to control costs, where we can.
The amortization and deferred expenses related to the fall 2020, Callaway Energy center scheduled refueling and maintenance outage and higher interest expense.
Increased investments and infrastructure and weak.
And generation eligible for planned service accounting and <unk>.
And you have the AMG standard rate adjustment mechanism or <unk>.
Higher electric retail sales also increased earnings by approximately <unk> <unk> per share largely due to continued economic recovery and this years second quarter compared to the unfavorable impacts of COVID-19, and the year ago period.
We've included on this page the year over year weather normalized sales variances for the quarter.
Overall weather normalized sales are largely consistent with our expectation and outlined in our call in February.
As we still expect total sales and we have approximately 2% and 2021 compared to 2020.
Moving gather segments Ameren transmission earnings declined <unk> <unk> per share over and over a year, which reflected the absence of the prior year benefit from the May 2020, FERC order addressing the allowed base return on equity, which more than offset earnings and increased infrastructure investment.
Earnings for Ameren, Illinois, natural gas decreased <unk> <unk> per share.
Increased delivery service rates that became effective in late January 2021 were offset by a change and rate design, which is not expected to impact full year results.
Ameren, Illinois electric distribution earnings increased <unk> <unk> per share, which reflected increased infrastructure investment and a higher allowed ROE under performance based ratemaking.
Ameren parent and other results were also up <unk> <unk> per share compared to the second quarter of 2020, primarily due to the timing of income tax expense, which is not expected to impact full year results.
And finally 2021 and earnings per share reflected higher weighted average shares outstanding.
Before moving on I'll touch on year to day sales trends for Ameren, Illinois electric distribution.
Weather normalized kilowatt hour sales to Illinois residential and customers decreased 1%.
And weather normalized kilowatt kilowatt hour sales to Illinois, commercial and industrial customers increased 2.5 and 2% respectively.
Recall that changes and electric sales in Illinois, no matter the cause do not affect our earnings since we have full revenue decoupling.
Turning to page 16, now I'd like to briefly touch on key drivers impacting our 2021 earnings guidance.
And we're off to a strong first half and 2021 and as Warner stated, we continue to expect 2020, 1 diluted earnings to be and a range of $3.65 to $3.85 per share.
Select earnings considerations for the balance of the year are listed on this page and are supplemental to the key drivers and assumptions discussed on our earnings call in February.
I will note that our third quarter earnings comparison will be positively impacted by approximately <unk> 19 per share due to the seasonal and electric rate design change effective in 2021, and Ameren, Missouri that we discussed earlier.
Moving now to page 17 for an update and a regulatory matters.
Starting with Ameren, Missouri as you recall on March 31, we filed for a $299 million electric revenue and increase with the Missouri Public Service Commission.
The request includes a 9.9% return on equity a 51, 9% equity ratio.
And September 32021 estimated rate base of $10 billion.
Intervenor testimony, we filed in early September with robotic test and why you October 15th.
Sure.
Evidentiary hearings are scheduled to begin in late November and in addition on March 31, we filed for and $9 million natural gas revenue and increase with the Missouri PSC.
The request includes a 9.8% return on equity a 51, 9% equity ratio and a September 32021 estimated rate base of $310 million.
And Missouri, PSC decision and both rate reviews is expected by early February with new rates expected to be effective by late February.
Moving to Ameren, Illinois regulatory matters and April we made our required annual electric distribution rate update filing.
And our Illinois performance based rate, making these annual rate update systematically adjusted cash flows over time for changes in cost and service and true up any prior period over or under recovery of such costs.
And late June and the ICC staff recommended a $54 million base rate increase compared to our requested a $60 million base rate increase.
And ICC decision is expected in December with new rates expected to be effective in January 2022.
Moving to page 18, and early June Erin published the sustainability financing framework, becoming 1 of the first utilities and the nation to do so.
Under this framework Ameren and its issuing subsidiaries may elect and finance or refinance and new and existing projects that have environmental or social benefit from green bonds, social bonds sustainability bonds green loans or other financial instruments.
Given the amount of investment activity and Ameren and its utility subsidiaries are pursuing that have environmental or social benefits, we expect to be and relatively frequent issuer and our sustainability financing framework.
And June both Ameren, Missouri, and Ameren, Illinois issue Green bonds consistent with this new financing framework.
More information about this framework is available and Ameren investors Dot com.
Turning to page 19 for our financing and liquidity update.
And we continue to feel very good about our liquidity and financial position.
And I, just mentioned and G&A, and Missouri, and Ameren, Illinois issue Green bonds with the net proceeds and reallocated to sustainable projects meeting certain eligibility requirements under the sustainability financing framework.
Additional debt issuance are outlined on this page.
Further earlier this year, we physically settled the remaining shares under our forward equity sale agreements for proceeds of approximately $115 million.
And in order for us to maintain our credit ratings and our strong balance sheet, while we fund our robust and special plan, we expected to issue a total of approximately $150 million of common equity in 2021.
Under the aftermarket or ATM program established and name. This is consistent with prior guidance provided in February and May and to date approximately $122 million of equity has been issued through this program.
Our $750 million ATM equity program is expected to support our equity needs through 2023.
And finally ameren available liquidity as of July 30, <unk> was approximately $1.8 billion.
Lastly, turning to page 20, we are well positioned to continue to execute on our plan. We continue to expect to deliver strong earnings growth and 2001 and 2021 as we successfully execute our strategy and as we look to the longer term, we expect strong earnings per share growth driven by robust rate base growth and disciplined cost management.
Further we believe this growth will compare favorably with the growth of our regulated peers.
And Ameren shares continue to offer investors an attractive dividend.
In total we have a strong total shareholder return story that compares very favorable favorably to our peers that concludes our prepared remarks, we now invite your questions.
At this time and will be conducting a question and answer session.
I'd like to ask a question. Please press star 1 on your telephone keypad.
A confirmation tone will indicate your line is and the question queue.
You may price start to if you like to remove your question and may be necessary to pick up your handset before pressing the star keys.
1 moment, please while we poll for questions.
Our first question is from Jeremy Tonet with J P. Morgan. Please proceed with your question.
Good morning, Good morning, how are you doing sir.
Got it got it thank you.
Just wanted to see how you think about that.
And Missouri securitization legislation as a tool for transitioning and the fleet just wondering if any thoughts you have there or are there any particular reasons it could be more or less attractive for you to use versus kind of other considerations, we should be thinking about.
And so.
Thanks, Jeremy look is as we've said before we.
And we've said securitization is a great regulatory tool.
<unk> and <unk>.
1 that we don't see as necessary to execute our integrated resource plan, but.
Certainly a great regulatory tools, so and.
The Big picture.
As we go down the path, if we see changes and.
Policies change and.
And economic conditions are really the overall economics for renewables.
Perhaps perhaps will look at securitization as a tool to use but right now we're very comfortable and like our integrated resource plan and now complement Marty Lyons and his team really did a nice job working with stakeholders and get that across the finish line and so Marty I want to come on in and see if you have any additional comments on the securitization.
Tool that we have available to us.
Yeah, It wildly described and very well and Jeremy Thanks for the question.
Outlined on slide 25, our transition.
Over time it's.
Weighted resource plan that we filed last fall and as Warner mentioned that plan and the execution of that plan, we're not dependent upon.
Realization of securitization and really what you see there is our plan and as it stands today is to use our low cost reliable coal fleet as a foundation to bring in more renewables over time and provide real to the extent situations change and require adjustments at this plant it could be that securitization will be very good tool to have and our toolbox.
To perhaps make this transition more swiftly and do it and the way that provides affordable rates to our customers. So thank you very good tool to have and the toolbox, but again not needed today as we look at the integrated resource plan.
Great.
Helpful color there.
Just kind of shifting gears here and.
Have you seen any developments and MISO as work progresses towards year end project updates. There just wondering if you might be able to expand a bit more I guess your thoughts there and what that could mean for ameren.
Sure, Thanks, Jeremy and I will.
Look.
As we discussed is really on our last quarter call and as we as we talked about and our prepared remarks.
And really see transmission investment as being critical for our country's transition to a cleaner energy future and and certainly MISO being right in the middle of the country is going to play an integral role and obviously, we have a and.
And big footprint and MISO.
And so as we've looked at it MISO is really identify and job from our perspective and <unk>.
Really looking out to see what some of those long range transmission projects might be not definitive yet but.
They've laid out a real nice plan for us to really think about and and the work with key stakeholders and that's exactly what we've been doing working with our key stakeholders and say okay. What are these projects that we need to move forward with.
I would say MISO zone, the middle of that process with us and so many others.
And as you know they'll take that long range plan that we outlined in our and our slides and theyre going to put out and include aspects of that and that thinking and MISO transmission expansion plan, which which is a process.
And hopefully see move followed by the end of this year.
So beyond that I would say the conversations and the analysis continues and the only thing I will say is that we believe we are well positioned to execute many of those projects and we believe if you look at the future 1 that maybe in the early next year.
Those are some no regrets projects hit better and there that we needed to move forward.
On and.
And not just in the Midwest before our country. So we can move forward on this clean energy transition so nothing specific yet.
But needless to say there was a lot of work on around with the teams to try and move forward on this important aspect of the clean energy transition so stay tuned more to come.
Got it that's very helpful. Thanks for that and I'll leave it there. Thanks.
Thanks, Jeremy and good weekend you too.
And our next question is from Paul Patterson <unk> Associates. Please proceed with your question.
Hey, good morning, Paul Good morning, how are you.
Well good here good to hear so.
And just as a follow up on Germany.
Question, there on the <unk> process, and the transmission opportunities, which sounds pretty exciting.
What are the questions I guess it sort of comes up here.
As you are aware and Missouri, there is whether it is the 1 that's been held up.
By challenges to it.
Seems like forever.
It's not your line.
It's more of like a merchant volume but.
In general.
Should we think about.
<unk> sort of identified et cetera.
The.
And assuming that you guys get a good.
Good line of sight on opportunities for yourselves.
Should we think about.
Citing.
<unk>.
Permitting et cetera, with respect to some of these projects.
Yeah.
And the context of that.
The example that I.
You mentioned versus some of that so the add ons and stuff that that don't seem to have as much and a way of hurdles do you follow what I'm, saying.
And Paul.
And that complicates. So let me say, it's green belt is the name of the line that you're referring to and.
And with liver.
Yes, yes, and so and so I'll make a couple of comments and then Marty you can talk about how the Green Dot project is has been and.
Incorporated in some respects or at least comment upon and our integrated resource plan, but just big picture.
Whether it's the grain belt or any transmission ominously permitting and siting is an important aspect of transmission and then this is why.
You are seeing for RC and others state commissions and others and legislators tick.
And take a very careful look at this because we recognize that that's an important aspect can and any of these major transmission projects done and some significant transmission projects are going to have to be done to price to affect the clean energy transition.
And so 1 of the things I will tell you we worked very hard as a company at this and that is being very thoughtful and reaching out with stakeholders and the communities early and often to talk about the needs for the transmission line, but also how we can work with those stakeholders and those communities. So we can get the permitting and signing done in a timely fashion.
And on sugar and his team have done that for years and years now and this is why you've seen the success that we had and the last multi value projects that MISO did almost a decade ago. Now are those projects were so successful is because a lot of work was done on the front and so we could execute on the back and as we look forward to.
Any future transmission project, that's exactly what we will continue to do so.
Grain belt, obviously as you rightfully said that is not our project.
But certainly it's something that has received a lot of attention and Missouri and otherwise and so Marty.
And your comment a little bit about some and things that we've been looking at in terms of greenbelt as part of our integrated resource planning process.
Yes, sure wire and layout.
Third plan.
And from the integrated resource plan as we move forward, but.
As we develop that plan and we looked at a number of scenarios in terms of the path forward to get to what we believe to be the most reliable and affordable path forward.
And in the scenarios and certainly we evaluated.
Utilization of Green belt, as well as many other types of scenarios.
And where we stand right now in terms of our integrated resource plan as you all know we did put out.
And request for proposals last year on various resources that might be available to fulfill our needs and obviously our ambition is to acquire 1200 megawatts of renewables wind and solar through 2025, and we do still expect to file later this year with the PSC for certificates.
And b the necessity for a portion of those planned projects.
As we go through broadly looking at just the next 5 years, but even beyond certainly will continue to consider all options, including utilization of grain balls as we think about fulfilling those needs.
In terms of your question Paul I think you were asking about large scale transmission smaller scale transmission as we go about looking at the various resources that might fulfill our needs certainly we work closely with Sean and his team and.
Facilitate.
Investment and any of those projects, where the wind or solar and important part of our consideration as we think about.
And the resources that would be most before great.
And then.
And just finally on.
All right.
Illinois.
You mentioned it and your remark.
And I was just.
Whether or not something happens.
And the next I guess couple of months here or.
I mean, you guys are obviously a lot closer to it.
And then.
And I and I'm, just sort of wondering if.
If you had.
And the odds on.
On something and Illinois with those thoughts might be.
Predictions about legislation and especially and this particular case, it's a complex piece of legislation.
The only thing I can say is what I've said before and I'll say again, and our major Mark and his team named and work on style with key stakeholders to.
To try and forge a path forward that is a constructive solution.
And to enable us to make the investments we need to make and the energy grid and earn fair returns and the state of Illinois, and and so doing.
Enhanced reliability and create jobs and help really the state of Illinois, and our country moving towards a cleaner energy future. So all of those things are all true.
Remain true today, and we continue to be at the table with key stakeholders, but now I'm not going to make any prediction in terms of time weather.
Sure we're working hard at it and we're at the table with the key stakeholders to try and get the constructive solution and then.
Okay, great. Thanks, a lot thanks, Rob and good weekend.
And.
And just as a reminder, if anyone has any questions you May press star 1 on your telephone keypad in order to join the queue.
Our next question is from Julien Dumoulin Smith from Bank of America. Please proceed with your question.
Good morning Julien.
Appreciate it.
Absolutely.
So new.
Yeah.
So.
And perhaps let's kick it off with our favorite subject here.
And I'd love to hear your thoughts and perspectives around the June Task Force right and you mentioned FERC and neighborhood joining forces here that seems like a fairly potent combination to drive real change right. So I'd be curious what are you what is the focus here and specifically.
What key issues are you asking them to address right. When it comes to utilities, not <unk> lines with their own challenges and prospect book from your perspective tangibly, how can they step in and help you all.
Thanks Joanne.
We are encouraged that the federal regulators and state regulators are not only talking but trying to find a path forward.
Because as you know as I've said now several times on this call and transmission is going to be a critical component of getting these major transmission projects and for our country.
And so as we all know that.
Federal regulators FERC and state regulators.
The jurisdictions or at least the issues can sometimes overlap.
And so things that are really important all the time is how we can sort through permitting and siting and clearly another issue around transmission projects, especially these regional projects, which we're talking about and large part with these national projects.
Allocate the costs fairly and appropriately.
And so what I think Julien.
What will happen once some of these these conversations and what we hope to have happen.
Is that there's a better understanding of the issues, perhaps a bit of a meeting and the mines and so we can we can start moving forward and a more timely fashion than we might've otherwise and.
And of course, when we're making the types of investments that we're making and we want to have let's say greater low levels of regulatory certainty.
And so these things I think will be helpful. I'm not suggesting that this task force will solve it all but I think what it will do will provide a great form for stakeholders, not just regulators and companies like ours and others to come to the table and and say, okay here and things that really matter and here's how we can lean further forward and the transmission space, which needless.
Say strongly support the need to lean forward further and faster and the transmission space Alright fair enough.
And then back to your own portfolio or how do you think.
And about.
Transmission.
Cost et cetera, just as you think about your own.
Non efforts and then what are you observing regionally again kudos.
And the need for transmission is principally evidenced by the elevated costs and interconnection costs and.
But that translating to a relatively stagnant.
Jack Korea.
Our processing. This Q are you seeing issues with your own projects and then more broadly.
These elevated costs with other developers and in and around your service territories. If you will elaborate on that.
Yes.
Lots to unpack in there and so I mean, let me make a few comments so number 1 and ammonia a moment ago was talking about how we proceed through the integrated resource planning process and and he also said you know a key element of the projects that we look at and select.
Really look very hard at transmission interconnections rare.
Developers may be in the queue and.
To try and move things forward.
And that's frankly, how we were successful and moving and a very thoughtful and timely fashion with our 700 megawatts of wind generation.
So what we're seeing there. This is all part of our due diligence are you seeing and sort of a backup.
Are you seeing now net.
Organizations like MISO are looking beyond just today, but looking to the future with this long term why we supported it will we believe.
Alleviate and the future if you look sort of a decade out which is good.
Really when you think about transmission projects and look just for tomorrow and you look say a decade out what are the things that we need to be doing.
Moving today to position ourselves for success and the future. So we're encouraged by that are you seeing.
Increases in prices or challenges, while it's premature to say that we're still going through the process still talking to developers working with MISO and others.
But the only thing I do know.
Is that we have I would say unique expertise to provide and the analysis, but also unique expertise to execute these important transmission projects not just for our projects per frankly.
The projects that I have regional and frankly.
Countrywide.
Positive implications to move forward the clean energy transition so.
And.
Julian answer to your specific question.
This is certainly an important aspect of what we're seeing but this is not new to us and <unk>.
Finished with this to gather.
The other encouraging thing that we are seeing regional transmission organizations and this particularly.
For instance, SPP too.
To try and coordinate even better.
Some of these these these transmission projects and needs. So you don't have surprises right.
When and when it comes time to try and move forward with a particular renewable energy project that too is encouraging and we look forward to the results of that collaborative effort.
From those 2 organizations and I am sure PJM and MISO will be having similar conversations sometime down the road.
Alrighty excellent.
Sorry to squeeze and 1 more but just obviously share identified.
There's certain renewable opportunities that are excluded from your 5 year outlook and I know historically.
5 year outlook and also gonna be rolled forward here the next U.
And 6 months.
Can you talk about the next data point that we should be watching in terms of more formally included and smooth.
And those projects and to your plan.
<unk> NAV on that.
Net.
You stated it correctly Julien.
None of these large for your plan, but as you know we look out 10 years at 40 billion dollar, we save $40 billion plus well.
Big pluses to that item is the potential for these large regional transmission projects.
So we're excited about that opportunity to build and execute some of those so let's say the next thing and look at it look I think that <unk> chapter the MISO transmission expansion planning process.
That'll be really sort of your next visible sign.
Pricy there.
And maybe some information out there towards the end and third quarter into the fourth.
But the process itself, which ultimately goes before the border.
The directors of MISO will be really and the fourth quarter at the earliest as I've said in my prepared remarks that could go into the first quarter of next year, but but that would be probably that I would say part of the next data point, if you will but and thats.
To be clear as I said before a lot of work is going on today to try and make sure that that is kind of as smoothly as possible, but that's what I would be looking for a little bit later and microbial Julian I think the only other thing with respect to the renewable projects. The data point, there I think more and maybe even said that these opening remarks really net net regulatory process and look for those.
And filings and the back half of this year, that's really going and get those kickstart and from an approval standpoint that again those are really speaking to the RFP process itself Warner was really talking about the transmission GAAP well said. Thank you Michael Thats exactly right. We said, we expect to be filing for some <unk> and still hereby.
By the end of this year, so that would be another important data point to be looking for incremental capital expenditure opportunities.
Got Worldwatch broke it accurately.
And very much okay, thanks, John and have a good weekend.
Yeah.
Yes.
And we have reached the end of the question and answer session and I will now turn the call over to Andrew Kirk for closing remarks.
Thank you for participating in this call a replay of this call will be available for 1 year on our website. If you have questions. You may call. The contacts listed on our earnings release financial analyst inquiries should be directed to me Andrew Kirk Media should call Tony per annum against today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
[music].