Q2 2021 Xcel Energy Inc Earnings Call
Good day, everyone welcome to Excel energy second quarter, 2021 earnings conference call.
Today's conference is being recorded.
Jens will only be taken from institutional investors reporters can contact media relations with inquiries and the individual investors and others can reach out to Investor relations.
At this time I would like to turn the conference over to Paul Johnson, Vice President Treasurer, and Investor Relations. Please go ahead Sir.
Thanks, Nicole good morning, and welcome to Excel Energy 2021 second quarter earnings Conference call.
Joining me today are Ben fault, Chairman, Chief Executive Officer, Bob Frenzel, President and Chief operating Officer.
Brian Van Abel Executive Vice President and Chief Financial Officer, and Amanda room Executive Vice President.
The real Council. This morning, we will review our 2021 result.
Share of recent business and regulatory developments slides that accompany today's call are available on our website.
As a reminder, some comments made during today's call may contain forward looking information.
Significant factors that could cause results to differ from those anticipated are described in the.
The earnings release, and our SEC filings.
Today, we will discuss certain non-GAAP measures, including the ongoing earnings of electric and natural gas margins information.
The information on compatible.
Yep measures and reconciliations are included in our earnings release. In addition, please note. This is Ben folks last earnings call. He will retire as CEO.
Oh in August, but will continue as executive chair of the board.
Ben it's been in the outstanding CEO and will be missed I'll now turn the call over to Bob.
Thank you Paul and good morning, everybody.
Before we dive into quarterly results I, just want to take a few minutes to recognize Ben.
I thank him for his leadership.
He's been a leader at ex sell energy for 2 decades as treasurer CFO.
President and Chief operating officer.
<unk> CEO and chairman of the board.
The since he assumed the CEO role in 2011, we've been a national leader in reliability customer.
The risks and safety all hallmarks of excellent utility operations.
And our operational performance has improved over that period. For example, we transformed our nuclear plants and 1 of the top ranked fleets in the nation, while lowering our cost structure by 20%.
And under <unk> leadership, we delivered for the environment.
Serve national leader in wind energy and highlighted by our steel for fuel strategy.
We've tripled our total wind capacity from 35.3400 megawatts to over 10000 megawatts and our owned wind growing from 300 megawatts to more than 4000 megawatts.
We've significantly reduced the level of coal.
In our fuel mix from 50% to 21% and we reduced our carbon emissions by 51 per cent compared to our 2005 baseline.
We were the first major U S utility to establish a 100% carbon free goal.
While the remaining a stalwart champion for reliability and affordability.
We've delivered excellent for our <unk>.
Kim take holders as well we've.
We've tripled the XL energy market cap from 12 billion of 37 billion and our stock price has increased from $24 per share to almost $70 per share reflecting of T. S. Our of 300 per cent and outpacing our peer group.
We've met or exceeded our earnings guidance every year and increased our dividends in line with our.
Earnings growth.
And beyond the Excel energy of Ben's recently served as chairman of EI.
Bleeding through pandemic uncertainties driving focus on the need for increased levels of of research and development for new technologies.
Inspiring as peers to define diversity and inclusion priorities for their organizations.
He's had a tremendous run as CEO and will leave a lasting legacy of XL energy.
For the utility industry and I would go so far as to say for the country.
So thank you Ben and congratulations on your upcoming retirement in August.
I look forward to your continued leadership of the board level and partnering with you an important federal policy efforts related to infrastructure.
Infrastructure and clean energy.
Looking ahead and I'm honored with the opportunity to lead this great company and I recognize the Lebron James' size shoes and I'm feeling.
Since joining XL energy 5 years ago, and I have worked closely on the development and the execution of our strategy.
And that will not change.
We'll continue to lead the clean energy transition enhance our customer's experience and we constantly work to keep our customers Bill Lowe and deliver an affordable product we've.
We've had a fantastic leadership team and significant bench strength.
And I'm confident in our ability to capitalize on the growth opportunities in front of us.
While maintaining our commitment to reliability and affordability.
I'm excited about our growth opportunities over the next decade, driven by our generation resource plans transmission expansion distribution investments in our electric vehicle vision.
As we move forward innovation is more critical than.
As we prepare to move from 80% carbon reduction by 20, the 30% to 100% carbon free electricity.
I'll be focused on clean technologies in both of our electric and natural gas businesses as well as how we engage with customers in new ways through a more flexible grid.
Also expect.
Ever work practices will continue to drive efficiency and produced strong operational results.
The safety is another area, where I plan to help drive innovation.
It's 1 of our core values safety is already of priority, but we can do even better.
I want us to move beyond traditional metrics embrace of heightened focus on prevention.
The innovative culture change eliminating the most serious events by encouraging trust true.
The inspector at Sea and learning.
In the coming months I look forward to continued engagement with our customers.
Our communities our regulators our investors and of course, our work force.
We have the best employees in the business and I'm proud.
Proud of what we've accomplished and I'm excited for the future successes that will achieve together.
To our investors. We appreciate the trust that you place in us and will continue to be good stewards of your investments.
Now turning to the quarter today, we reported solid quarterly earnings of 58 per share compared to 54.
<unk> per share last year.
We're off to a good start and we are reaffirming our 2021guidance.
We've made significant progress on various regulatory initiatives, including 3.
Constructive rate case settlements, the Brian will discuss in more detail.
In addition, we've advanced our plans for adding incremental renewables.
In Wisconsin. The Commission approved our proposal for the 74 megawatt Mustang solar project for $100 million, which will be the largest solar facility in western Wisconsin.
In June the Minnesota Commission approved our proposal the buyout of Repower at 120 megawatt wind farm PPA for $210 million from elite This repower.
Our project will save our customers money, while extending the life of of renewable energy resource.
And the Minnesota Commission continues to evaluate our $575 million proposal to build of 460 megawatt solar facility.
It takes advantage of existing transmission as we phase out of coal.
We are confident the commission will see.
So for an economic benefits and expect the decision.
Later this year or early in Q1 of next year.
Additionally, as part of our continued commitment to foster of skilled and diverse workforce. We propose the training program in Minnesota to help those in underrepresented communities develop the skills to succeed in energy related construction career.
The program graduates, while the opportunity to be considered for participation in our serco solar proposal and other future projects.
In June we filed an alternative of Minnesota resource plan, which achieved an 85% carbon reduction by 2030.
This proposal addresses the concerns of various parties by removing the serco combined.
Careers from consideration and replacing it with 2 combustion turbines.
The key components of the revised plan include an early retirement of both the king of the circa 3 coal units in 2028 and 2030, respectively.
Life extension for our Monticello nuclear plant.
Construction of new transmission lines in order to.
Cycle vantage of the interconnection rights from the retiring coal units.
And the addition of 3150 megawatts of Universal Solar 2000, and 650 megawatts of wind.
800 megawatts of new hydrogen ready Cts and 300 megawatts of re powered black start Cts.
19th.
800 megawatts of flexible, peaking resources and 250 megawatts of of new storage.
We provided the commission with an outstanding resource plan that will reduce carbon while maintaining reliability and customer affordability.
We expect the decision of the Minnesota Resource plan later this year or early next.
In addition, we continue to make good progress and are in the discovery phase of the Colorado resource plan and associated transmission tower pathway project.
We expect the commission decision on both proposals in early 2022.
And between Minnesota, and Colorado Resource plans, we anticipate adding nearly 10000 megawatts of new renewables to our system.
To meet our 80% carbon reduction goal by 2030.
With that I'll turn it over to Brian.
Thanks, Bob and good morning, everyone.
We had a good second quarter recording 58 per share compared with 54 cents per share last year.
The most.
<unk> earnings drivers for the quarter include the following.
Higher electric and natural gas margins increased earnings by <unk> 19 per share, primarily driven by riders and regulatory outcomes to recover our capital investments.
In addition of lower effective tax rate increased earnings by 6 cents per share as a reminder, production tax credit.
This lowered the E T R over P. T 6 of our flow back to customers through lower electric margin are largely earnings neutral.
Offsetting these positive drivers were increased depreciation and interest expense, which reduced earnings by 9 cents per share, reflecting our capital investment programs.
Increased O&M expenses, which.
The reduced earnings by 7 cents per share and lower if you do see decreased earnings by 5 cents per share largely due to placing several large wind farms in the service last year.
Yeah.
Turning to sales weather normalized electric sales increased by 5.3% in the second quarter. This reflects the cause of a comparison to last.
Year, when the pandemic restrictions in our states where at the highest levels in our sales were most depressed due to COVID-19 impacts.
Our year to date weather and leap year adjusted electric sales increased 1.6% we continue to anticipate modest annual weather adjusted sales growth of approximately 1%.
Shifting to expenses O&M.
Is $50 million for the quarter, which largely reflects the timing of expenses between the 2 periods last year, we had significant O&M reductions in the second and third quarter to offset the impact of lower sales from call of it while the fourth quarter was at higher levels. So the quarterly O&M comparisons will be chunky this year.
Turning to the sort of regulatory <unk>.
Filings, we reached constructive settlements in 3 rate cases.
In Wisconsin, we agreed to a rate increase of $66 million over 'twenty 'twenty 2 to 2020.3 based on the ROE of 9.8% in 2022.
10.0% in 2023, and an equity ratio of 52.5 per cent.
In new Mexico, we agreed to a rate increase of $62 million, reflecting the ROE of 935% and an equity ratio of 54, 7%.
We also accelerated the depreciation life of our total coal plant to 2032 as we plan for its early retirement.
In North Dakota, we agreed to a rate increase of.
Based on the ROE of 9.5% in the equity ratio of 52.5 per cent.
We anticipate commission decisions in these cases later this year.
In July we fall of the Colorado Electric rate case seeking of net rate increase of $343 million based on an Roe.
<unk> of 10% and an equity ratio of 55, 6% and the 'twenty 'twenty 2 forecast test year.
The rate cases, largely driven by capital investment and we anticipate a commission decision in the spring of 2022.
We also of a pending Texas electric rate case, we're seeking the seeking a net rate increase of 74.
$4 million after reflecting fuel savings in ptc's from the Sagamore wind farm.
The request was driven by capital investment and is based on the ROE of 10, 35% and the equity ratio of 54, 6%.
A commission decision is expected in the first quarter of 2022 of the surcharges back to March 2021.
As far as future filings ago, we anticipate filing of Minnesota electric rate case in November with interim rates going into effect in January of 2022, We also plan to file of Minnesota Natural gas case later this year.
With that I'll wrap up with the quick summary.
We received commission approval for the Mustang Solar project in the <unk>.
ALLETE wind PPA of Repowering buyout we.
We provided an alternative to our Minnesota resource plan, which will deliver 85% carbon reduction by 2030 provide transparency into our long term opportunities. We reached constructive rate case settlements of Wisconsin, New Mexico, and North Dakota.
We filed our Colorado electric rate case.
We reaffirmed our 2020, 1 guidance range and finally, we remain confident we can deliver long term earnings and dividend growth of over 5% to 7% objective range.
Now before we open up for questions I'll turn it over the baton for some closing comments.
Well, thanks, Brian and good morning, everyone.
It's really been an amazing decade of CEO and before that.
So.
Really proud of the tremendous accomplishments, we made as a company I'm extremely proud of the incredible efforts and contributions our employees make in serving our customers and our local communities of all.
So really enjoy the interactions I've had with our investors and the financial community and appreciate your interest in the company your feedback.
The up suggestions I'm going to Miss that.
It's really hard to retire from the role that I've truly enjoyed but I'm reading the company in great hands, and I know that Bob Brian and the rest of the management team will continue to do an outstanding job, leading the excel energy well into the future I also plan on attending this fall and I look forward to seeing you.
A lot of you there.
Thank you all and with that operator, let's open it up for questions.
Thank you, ladies and gentlemen, if you'd like to ask a question today. Please press star and then 1 on your Touchtone phone. If you are using a speaker phone you might have to pick up the handset or day press the mute function. So the signal.
And your share of equipment.
Thank you.
Star and then the 1 if she would like to ask a question today.
Yeah.
And we will take our first question from Jeremy Tonet from Jpmorgan.
Hi, Good morning, Ben Congratulations and best of luck moving.
Kind of weak.
Thank you very much I appreciate it.
Just wanted to start off I guess with the renewables and if you could expand I guess on how the pipeline looks for incremental renewables after their share of co and the wind Repowering and also I guess, how local stimulus efforts might influence this.
Going forward.
Hey, Jeremy Good morning, it's Bob and thanks for the note this morning.
We filed resource plans in both Colorado, and Minnesota, and as we worked through those proceedings I'd say by the first quarter next year, we will have real visibility into the outcomes of.
Of both of those.
And we'll move forward with what we would call resource acquisition plans.
Where we propose.
The projects and we solicit input from others for projects that are coming.
I think if your question is around where we are in the.
R&R recovery plan in Minnesota in particular the <unk>.
For.
Going for empowering for approved in December of the elite.
Repowering project was just approved in June and we still have the Serco solar project that is proposed that we hope for approval by end of this year or maybe early next.
Got it.
For wind helpful. Thank you.
Maybe just pivoting over to Yuri if we couldnt if we could just wanted to see the early stages of your winter storm recovery of proceedings, how they are progressing and what changes if any do you expect to operationally going forward.
Sure.
So we.
We have approvals and I think for of our states at this point and we're still working through proceedings and 3 others I think the largest of those as both the Minnesota and Colorado are still working through the proceedings on as well as Texas.
Our expectation is we acted in accordance with all of our regulatory regulations prior policy.
Policies and procedures and so we do expect a full recovery of our incurred costs on winter storm here.
I think looking forward, Colorado has opened a docket to explore alternate mechanisms for us and others in the state to look at and they've proposed an alternative we've commented it's of no first.
We're looking for inputs and we've commented to the <unk> and we expect some some resolution and some hearings in that process in the <unk>.
Third or fourth quarter of this year.
Got it that's helpful I'll leave it there thank you.
Thank you.
And we will take our next question from Julien Dumoulin Smith from.
Bank of America Securities.
Hey, Julien good morning, Hey, good morning.
Good morning, and congrats.
It's been a pleasure I will see you soon.
I'm sure, but if.
If I can.
Absolutely.
I look forward to see near the.
If I can pivot to the transmission side in brief here.
You all talked previously about the Colorado being potentially expanded over time, obviously you are looking for the first phase here to be approved.
Talked about in the prepared remarks, but can you talk about subsequent a cornerstone partner.
And just ultimately expansion of what you guys have underway here.
If theres been any progress.
It certainly happened to.
But before I get started actually I think the congratulations are in order for you and be in and look forward to your pending nuptials next year. So congrats.
Thank.
But I really appreciate that.
Hey on transmission in particular and in Colorado, you know we put forward. What we think is a pretty progressive plan. Julien you know historically, we'd have generation be put forward first in and then you can follow up with the transmission is necessary I think you know where we are.
And certainly in Colorado, where I think of lot of the country is actually is as we need to build the substantial amount of transmission to relieve congestion to enable the renewables that we see are necessary to complete this clean energy transition. So in Colorado, we've put forth, what we call the power pathway.
That's largely a I'll call it a superhighway.
Its mission line through the eastern Plains of Colorado to connect the goods solar and wind resources of the eastern half of Colorado with the load centers predominantly in and in Denver and in the I 25 corridor.
So that path of along with the Colorado resource plan of progressing in parallel.
[noise] of dockets, but in parallel we expect resolution on both of them by you know late this year or probably early next year and you know your comment on we've got a base plan and I call that sort of we're going to build the free way, but we also have to build the on and off ramps and and and things like that so while the base.
<unk> plan for the free way itself I think is about and Brian correct me, if I'm wrong somewhere in the $1.7 billion range, but.
But we need to build voltage invar stability, we need to build once we find out exactly where the generation resources are gonna exists then we need to build support along that free way for how those.
Transmissions will integrate with the broader bulk electric system, and that's sort of where that incremental and variation in sort of the base plan versus the other things that we'll need to do once we identify exactly where the resources are like.
So like I, just mentioned of Jeremy will conclude the phase 1 of the resource plan you know in Q1 of.
The next year and that point will go into resource acquisition and that's why we've picked the resourcing. The exact locations and then we kind of a better more granular answer to your question on what's the total pathway costs above and beyond sort of the base system is that makes sense.
Yeah totally I got it excellent.
And if I could pivot slightly related question. If you don't mind, what are you seeing in terms of the impact across your portfolio here vis vis the inflation cost structure of logistics just as you guys look at the renewable build here and perhaps to some of the timing on the for instance, sugarcoat here, perhaps not.
Necessarily related but just do you think about some of the.
Interest.
Yeah, Hey, Julien, it's Brian good to hear from you.
Yeah, you know, it's certainly we're seeing inflation you know if you're just looking at the headlines right. We're not we're not immune to some of the headlines of <unk>.
Everyone is seeing you know for US. It's you know inflationary pressures of commodities such as steel copper in.
The labor.
But really we think it's transitory in nature and I think really.
It's I think we've found the does is pretty easy to shut down the economy and it's a lot more challenging to restart the economy from from the supply chain and the demand that has followed the shutdown of the economy.
Something that we are focused on the and practically manage.
Isn't required gene prospectus of won't see any significant impacts as we sit here today no specifically if I wanted to touch on a couple of the the major projects we have in flight.
All of the for wind Repowering. So we have you know we feel really good about those of Minnesota and all of those are partial repowering sort of think blades in the inside of the cells are not replacing the steel towers.
So we're not facing steel price risk of there and so we don't really face any significant inflationary pressures on those so feel good about that the the large scale solar farm that we have in front of the Minnesota Commission No I'm sure everyone's aware of of the solar panel pricing that has been increasing this year.
The we look at that we have a lot.
From a sort of ability in terms of construction and when we place that in services in term in terms of what year. So we feel really good about that project too. So overall no something were certainly focused on and watching but don't see any real impacts as we sit here today.
And just to clarify from your guide here.
The flagship O&M is offset by the gas sale.
Super Nuance there.
For 'twenty 1 of them I was the shift to know as the gas sales you know certainly good to see you know an uptick in gas sales from zero to 1%, but if you remember gas is a pretty small piece of our business all of 1% change in gas margins about.
The $4 million.
So I wouldn't say it necessarily fully offsets it.
Okay, Alright fair enough. Okay. Thanks, again, guys see you soon.
Thank you for the devices.
And well take our final question from Ryan Levine from Citi.
Thank you.
Couple of questions 1 on transmission to to follow up on some of those points. It looked like in your presentation. You highlight 3 hundreds of millions of dollars of C. P. C. N for that project previously there was of 200 of $50 million a number that was out there for the May Valley Longhorn.
Current and long haul.
For an expansion or are we seeing are you seeing cost inflation on that particular project or is there another dynamic debt that may cause the.
The change the number.
No I look I think we're still in very early innings on sort of exact routing and pathways I wouldn't read.
Read too much into that Ryan.
Okay. I mean are there a lot of different pathways that you're right no pun intended around the the way that that project can get built out or is it fairly.
Visit both from your mind in terms of how the project will be constructed.
Well look I think we haven't gone through local permitting we've got a lot of of just local land processes will have to go through so and we're early stages in engineering of that project I think we felt we felt it was really important to make sure that the transmission in the in the generation proceeded in parallel and so I think that.
Flow through time, as we get better engineering, as we get better insight into the land processes. You know those routes will be very specific there is still a pretty big range of of capital our capital expenditures for that a lot of it's based on final routing and in final land approval costs. So like I said I wouldn't read too much into that particular.
As we get extension.
Okay.
And then lastly in terms of some of the recent legislation in Colorado.
Turning to gas.
Are you anticipating any material impact for your business around the the.
Some of the reason.
The leg S. B 21 to 246 in the 12.38, and 12 for 86 and so many others that everything [laughter] can you repeat those again Ryan.
That's quite a litany of of of Bill numbers.
Let me just I'll talk a little bit about the clean heap plan in Colorado.
The thing, but I would maybe even to a parallel path of the innovative gas Act that was also approved here in Minnesota.
You know look I think both of those bills recognize that we're in early innings of of lowering our customers' emissions from the gas LDC businesses and not.
The similar to what we went through in the mid nineties with with renewables I mean, the technology is nascent and.
And the solutions are relatively expensive, but we also recognize we need to start somewhere and so I think that the legislation in both places recognize those facts.
And look we are.
Caller islets will introduce technology, we'll look at beneficial electrification in the energy efficiency programs, all tools that maybe aren't readily available under the current regulation schemes today, but these pieces of legislation allow for some of that innovation to happen on the gas LDC side.
The population also recognizes its really important to respect the reliability and affordability and I think each state addressed it slightly differently, but theres a cap in Colorado and regulatory approval for plans.
And in Minnesota, Similarly, their regulatory approval for the pilots that make sure that there.
The legislation justified and beneficial for our customers as well as we think about lowering the their emissions profile from the gas LDC business. So we're we were very active in both of those pieces of legislation and we are.
Working with the regulatory agencies to look at.
Great the regulations for those pieces of legislation and there will be active as we put proposals forward to help our customers reduce their footprint emissions profile in each for each state. So I think there is opportunity here and we're going to continue to work with our our commissions and our stakeholders.
How we really appreciate it.
You bet.
And it looks like we have a question from David Peters from Wolfe Research.
Yeah, Hey, good morning, and I'd Echo the congrats to Ben I'm just.
Question for me is you guys.
Make progress working through your eye or Pes in Colorado, and Minnesota and then the.
The transmission opportunities as well it just seems like there's a lot of.
The incremental capex opportunities of both some of the more basic blocking and tackling.
How would you kind of characterize that within the context of the.
The kind of 5% to 7% growth targets, you've you've targeted here recently.
Yeah, Hey, David Thanks for the question this is Bob.
I guess similar to Julian I might have to start with congratulations to you for your recent nachos yourself. So we have 2 of those on the call today.
In terms of.
Incremental capital.
Yeah, I think theres some some projects still out there that we're working through regulatory processes on the largest of which is the short go solar.
We've talked about I think longer term you know.
We.
Got based proposals on our resource plans and for our transmission.
<unk> planning.
Stuff that's not included in the near term is obviously.
So in an SPP transmission expansion plans and those are generally outside of our 5 year forecast, but definitely in sort of a 10 year vision forecast.
And then we expect our base.
Base growth plan to be right around 7% and.
And so any incremental and I think there's a couple of incremental projects that could take us above that.
<unk>.
We'd expect to keep our 5 to 7 per cent earnings growth rates are.
And you know we can reevaluate that regularly.
And we do.
But I think right now, we're just comfortable with with being at the high end of our guidance range, Yeah, and Dave I'd, just add that I think of what you hear from most of what we're really focused on doing is providing our investors with that long term transparency as we work through our resource plans in Minnesota and Colorado This year.
Now looking at.
Almost 10 Gigawatts of renewables by 2030 between those 2 plus the associated transmission Thats comes in Colorado, and what we could expect to see how the MISO here is giving investors that transparency into extending.
And really feeling good about the long term growth rate after this 5 but through and talk about.
Decades, so something we're focused on.
Great. Thank you for the color.
And we have a question from Paul Patterson from Glen Rockers from steel.
Hey, Good morning, Paul Hey, good morning, Congratulations Ben.
Through the <unk>.
Thanks.
Okay.
Absolutely so.
There have been some comments out of Colorado from some of the commissioners regarding.
Regarding rates and sort of the cumulative impact et cetera, and you mentioned on the call I think that you don't see any significant you think that the inflation.
Dishes that we have currently of sort of.
The transitory.
But I'm wondering in terms of your goals I think there was pretty much to be.
Some of it below the rate of inflation or are we still on track with that with respect to them.
The outlook in the various jurisdictions has there been any.
The change in that because of all of.
Of the transitory impact or anything else that we should think about.
Hey, Paul it's Bob and I'll, let Brian chime in if I Miss anything, but you know in particular with respect to Colorado, you know I think that you know the.
The.
Our customers bills in Colorado are about.
Third 35% less than the national average and have been basically flat for the past 5 years and although we filed the <unk>.
The rate case out there you know we expect even after the rate case, there's still going to be 25% below the national average if we get everything we ask for everything you've got everything in the case that we asked for it there'll be 25% below the national average.
Average what's your longer term question is do we think we continue this transition.
Transition to a cleaner energy economy cost affordably and the answer to that is yes.
The impacts that we're seeing for for inflation. We would say are still relatively transitory I think some of the macro economists would sort of agree.
With that comment we think that we can transition our states that are less of the rate of inflation over the next 10 years to an 80% carbon reduction, Colorado in particular will be 85% carbon reduction of less than the cost of inflation. So I think our strategic thesis holds and we don't see.
See this current spat of restarting the economy is as derailing our longer term plans, yeah, and I would say you know you see that in our resource plans right, where we kind of show the bill impacts over the next decade in both Colorado, and Minnesota, and we do the rerun those resource plans of in the cases, we put forward of the commission with current tax policy and you know Theres a.
A lot of discussion in D. C. About you know a long term extension of federal tax credits are around clean energy and we certainly support fully support center widens the clean energy of for America Act in the you know when we run that analysis, that's really good for our customers in terms of those extension of credit is only brings down the cost as we make.
This transition.
Okay and just your long term just for.
Obviously that could change, but your long term inflation.
Inflation expectations of around 2% still is that about right.
Longer term yeah, okay.
Awesome. Thanks, so much guys.
You bet.
And we have a question from a sarcoma alright.
Oh, Ben I, just wanted to dial in to congratulate you on you for a long time and the company did wonderfully well and book and continue in that spirit. So congrats again and if I can ask 1 and just a quick question I know you've.
Heading the eye and trying to get the nuclear PTC is across the board in the Legislative front could you give us any update where we stand on debt on that endeavor.
Well it'll likely be part of the $3.5 trillion.
The reconciliation process and you know.
I mean, there's a lot of moving parts with that.
The first part of that'll be just.
Getting the the budget resolutions to the various committees and not all of establish how much funding those committees have the pursue broad topics, which we believe will ultimately include the nuclear the PTC.
We like to see that in August and then of course of the actual legislation would take place in the fall.
Again, theres a lot of moving parts.
It's a 50.50 Senate and the very narrow margin in the house. So it's a balancing act, but we are.
We're definitely advocating for that or advocate.
Vacating.
Brian mentioned.
Senator Wyden Bill.
We think direct pay PTC for solar.
These are things that are going to.
Really help the clean energy transition of the affordable for our customers and the industry in general.
And I look.
The senior perhaps of the yard.
Certainly the search.
Yeah.
Thank you so much.
Got it.
Yeah.
And it appears we have no further questions at this time I will turn the conference back over to Brian Van Abel CFO.
The forward is yep. Thanks, all for participating in our earnings call. This morning, Please contact our Investor relations team with any follow up questions. Thanks, everyone.
Yeah.
And once again, ladies and gentlemen that does conclude today's conference. We appreciate your participation today.
Okay.
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