Q3 2021 NiSource Inc Earnings Call
Additionally, some of the statements made on this call relate to non-GAAP measures for additional information on the most directly comparable GAAP measure and a reconciliation of these measures. Please refer to the supplemental slides and segment information, including our full financial schedules available on Nisource Dot com.
With all of that other way I'd like to turn the call over to Joe.
Thanks, Chris Good morning, everyone and thank you for joining us hopefully you've all had a chance to read our third quarter earnings release, which we issued earlier today.
Strong execution of nice sources significant renewable energy investments continues to be the highlight of our foundation for future growth.
And we continue to expect that our core infrastructure programs and renewable generation investments will drive industry, leading compound annual growth of 7% to 9% and diluted net operating earnings per share through 2024.
<unk> driven by our commitments to safety reliability customer affordability and sustainability.
As we begin to refine our outlook for longer term growth the preferred path from NIPSCO as 2021 integrated resource plan identifies additional investment opportunities while advancing the retirement of remaining coal fired generation between 2026 and 2028.
And it supports our plan to reduce greenhouse gas emissions, 90% by 2030.
Let's turn now to slide three and take a closer look at our key takeaways.
We are updating our guidance for 2021 to target the top end of the range of $1 32 to $1 36 per share and non-GAAP diluted net operating earnings or EPS.
We are also initiating guidance for 2022 of $1 42 to $1 48, and that is consistent with our 5% to 7% near term growth commitment.
Our long term diluted EPS guidance of 7% to 9% through 2024 is now based on the expected top end of our 2021 guidance range.
And we reaffirm 5% to 7% growth in 2023.
As I mentioned, a moment ago. The preferred plan from <unk> 2021, IOP advances our plans to retire remaining coal fired generation between 2026, and 2028, as we shift to lower cost clean and reliable generation.
Investments of up to $750 million will be required to replace retiring coal fired generation.
<unk> portion of this investment will be better understood. Following further evaluation of the proposals we solicited associated with ERP.
Our regulatory execution progresses with a proposed order approving a settlement in Pennsylvania.
<unk> filed in Kentucky, and a proposed order in Maryland.
In addition, we filed our gas rate case in Indiana in September.
We achieved non-GAAP diluted EPS of <unk> 11 in the third quarter of 2021 versus <unk> <unk> in 2020.
Now, let's look at some nice source utilities highlights for the third quarter, starting with our gas operations on slide nine.
Columbia gas of Ohio rate case continues to progress net of the trackers being rolled into base rates the filing requesting an annual revenue increase of approximately $221 million.
Pending a decision next year from the public Utilities Commission of Ohio, New rates would be effective in mid 2022.
NIPSCO filed a gas rate case on September 29th requesting a revenue increase of $115 million annually the.
The cases focused on infrastructure modernization and providing safe reliable service, while remaining in compliance with state and federal safety requirements.
In Pennsylvania, an administrative law judge issued a proposed order recommending that the Pennsylvania public utility Commission approved the settlement in our rate case for.
The settlement would increase revenue by $58 $5 million with new rates effective December 2019 of this year.
The adjusted rates will help to continue investments in infrastructure upgrades system reliability and maintenance enhancements.
We expect the Commission's final order by mid December.
In Kentucky, we have filed a proposed settlement of our rate case.
<unk> includes an overall increase in revenues of $18 6 million.
To support continued investments in safety and replacing aging infrastructure.
Columbia gas of Maryland received a proposed order from an administrative law judge on Friday, recommending an increase of approximately $2 $5 6 million in revenues as compared to our request of approximately $4 8 million.
We expect a final order from the Maryland Public Service Commission in December.
Before we move on I'd like to note that Columbia gas of Ohio, Our largest LDC is ranked number one in the Midwest region in J D. Power's 2021 gas utility business customer satisfaction study.
Also congratulations to our customer experience team for the successful launch of the Columbia gas and NIPSCO mobile apps. They are an important step forward in building our connected digital customer experience.
Let's now turn to our electric operations on slide 10.
NIPSCO electric tedious plan is pending before the Indiana utility regulatory commission or <unk>.
This is a five year $1 6 billion proposal that would replace the previous plan, which NIPSCO filed in April to terminate.
The pending plan includes newly identified projects aimed at enhancing service and reliability for customers as well as some previously identified projects.
The other items on this slide relate to our renewable generation strategy and I'll turn it over to Shawn Anderson to give more detail.
Thank you Joe the selection of the preferred path from NIPSCO as 2021, ERP is a significant milestone in our transition from coal fired generation toward cleaner and reliable forms of generation all of which are expected to save NIPSCO customers approximately $4 billion over the long term.
The preferred path from the 2021, ERP refines the timelines to retire coal fired generation at the Michigan City generating station.
We in 2026 and 2028.
It also calls for retirement of two vintage gas, peaking units <unk> and <unk>, which are both located at the Shaffer generating station site.
The most viable replacement option cause for a portfolio of resources, including incremental solar Standalone battery storage and natural gas, peaking resources.
We estimate that investments of up to $750 million will be required to support the retirement of these units.
We expect to be able to quantify the NIPSCO portion of this investment opportunity in the first half of next year. After further evaluating bids and the request for proposals and completing due diligence on projects, which align with the preferred path.
Meanwhile, we continued to execute on the plan for retirement of remaining coal fired generation at Schaefer.
Units 14, and 15 retired as of October one and units 17, and 18 are on track to retire by 2023.
We are making steady progress on the renewables project build out informed by the preferred path for <unk> 2018 IOP.
Our partners on these projects are some of the strongest developers in the renewable energy space and we remain in close contact regarding the progress of these projects.
We continue to expect to invest approximately $2 billion and renewable generation by 2023 to replace the retiring capacity at Schaefer.
As part of the execution of this plan construction continues on the Indiana Crossroads, One wind project, which is on track to become operational in the fourth quarter of this year.
Construction has also started on a pair of solar projects.
Don This bridge solar one is being constructed by a subsidiary of Nextera energy resources under a build transfer agreement.
Edp Renewables North America is building, the Indiana Crossroads Solar project, which.
Which will be operated as a joint venture.
Both are expected to enter service next year.
The AUR see provided regulatory approval of the Indiana Crossroads, two wind project on September one.
And with that action, all 14 renewables projects needed to replace the retiring capacity Schafer generating station have now received approval.
In addition to the slate of renewables projects, we have announced <unk> plans to evaluate hydrogen and emerging storage technologies.
It's important for us to gain a risk informed understanding of the options and technologies that may emerge as pathways toward further de carbonization.
Now I'd like to turn the call over to Donald who will discuss our third quarter financial performance in more detail.
Thanks, Sean and good morning, everyone before getting into the specific results I'd just like to highlight the solid execution and progress that now has us guiding to the top end of our 2021 guidance range of $1 32 to $1 36.
This new 2021 expectation also serves as the starting point for both our near term and long term growth commitments.
We have also initiated 2022 guidance of $1 42 to $1 48.
Which at its midpoint represents a growth rate of over six 6% from the 2021 top end.
Turning to our third quarter 2021 results on slide four we had non-GAAP net operating earnings of about $47 million or <unk> 11 per diluted share compared to non-GAAP net operating earnings of about $36 million or <unk> <unk> per diluted share in the third quarter of two.
20.
For 2021 results reflect our ongoing execution of infrastructure investments offset somewhat by the sale of Columbia gas of Massachusetts, which closed in October of 2020.
Looking more closely at our segment three months non-GAAP results on slide five.
Distribution operating earnings were about $18 million for the quarter, representing an increase of approximately $8 million versus last year.
Operating revenues net of the cost of energy and tracked expenses were down nearly $18 million due to the sale of CMA.
Operating expenses also net of the cost of energy and track expenses were lower by about $26 million.
Mostly due to the CMA Phil.
Slightly by higher employee related costs and outside services spending.
In our electric segment three months non-GAAP operating earnings were about $130 million, which was nearly $3 million lower than the third quarter of 2020.
Net of the cost of energy and tracked expenses operating revenue decreased slightly by about $2 million due.
Due to slightly lower residential usage offset by increased <unk> revenues.
Operating expenses net of the cost of energy and track expenses were nearly flat compared to 2020.
Now turning to slide six I'd like to briefly touch on our debt and credit profile.
Our debt level as of June 30 was about $9 6 billion.
Of which about $9 2 billion with long term debt.
The weighted average maturity on our long term debt was approximately 14 years and the weighted average interest rate was approximately three 7%.
At the end of the third quarter, we maintained net available liquidity of about $1 7 billion.
<unk> has cash and available capacity under our credit facility and other accounts receivable securitization programs.
As we noted last quarter all three major rating agencies have reaffirmed our investment grade credit ratings with stable outlooks in 2021.
Taken together this represents a solid financial foundation to continue the support for our long term safety and infrastructure investments.
As you can see on slide seven we've narrowed our 2021 capital investment estimate to approximately $2 billion.
And reiterated our 2022 capital forecast of two four to $2 7 billion.
Taking a quick look at slide eight which highlights our financing plan. There are no changes to our plan since April equity unit issuance I would highlight that this balanced financing plan continues to be consistent with all of our earnings growth and credit commitments.
As I mentioned earlier, we have updated our 2021 earnings guidance issued guidance for 2022 and reaffirmed our long term growth commitments.
I would also remind everyone that we're planning to provide an extension to our growth plan at an investor day. During the first half of next year. So please stay tuned.
Thank you all for participating today and for your ongoing interest in and support of nice source, we're ready now to take your questions.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Yes. Your next question comes from Richard Sunderland from Jpmorgan. Please go ahead.
Okay.
Hi, good morning, Thanks for taking my questions.
Maybe just starting with the IOP here.
Typically the outlines of tog rails on the potential investment in any gating items here as you progress to the updated in the first half of next year and gives us because of the high low and where that can realistically fall into 700 accumulate.
Yeah. Thanks for that question. Good morning. This is Sean so so ultimately as you can imagine that the range will be informed by the actual project selected so what we know now are the tranches of technology that we believe will provide the capacity we need to step through the due diligence now to better understand those projects and that will inform.
<unk> them in some way shape or form the specifics of the range. So certainly the selection of technology.
The actual projects themselves how efficient they can be constructed.
Those types of things will have a bearing on.
Ultimate Capex for it.
I would also note that the MISO MISO resource adequacy rules, certainly as those finalize could come into play a bit as well that we think that we've modeled those out and incorporated that in the indicative pathway.
Yes, Thanks, Shaun Richard Let me just add all else being comparable through that analysis, we have a bias to own.
Assets as we step through this this next progression and we believe will have a strong case and a value proposition for doing that as Sean noted the factors regard reels. As you said do include the MISO seasonal capacity factor.
Summit requirements and the evaluation of the proposals still underway, but also the federal policy landscape that is a bit unpredictable right now, but that could that could shape timing and mix of investments as well and we look forward to being able to work through that in the next quarter or two.
Essentially capello daily and maybe just following up on the shuttle aspects could you.
<unk> set a little bit more in terms of what it specifically impact to 2021, AARP consideration or maybe even more broadly whether it's your financing plan, how could something like direct K change those plans now.
I can take the direct pay question certainly think that that provides some additional flexibility in how we finance our renewable investments.
Certainly positive if it allows us to reduce any equity needs for those future investments or external financing needs in terms of tax equity, but certainly need to understand how.
<unk> pay would be treated by our <unk>.
Fixture addictions from our base rate base and deferred tax standpoint.
And then I would just add on as it relates to how federal policy you can shape that the technology cost that we certainly can't speculate to that 750 is a derivative of what we saw come through the RFP in may related to the capacity and the technology required to meet that capacity to the extent that the marketplace changes that efficiency.
And again it could get you back into a different selection of technology to comprise the capacity necessary, but you'd have to see how that federal policy landscape would impact that marketplace versus the due diligence, which we're performing on actionable projects that came through the RFP.
We expect to be able to execute against.
Understood. Thank you for the time here. Thanks.
Thanks Rich.
Your next question comes from <unk> <unk>.
Kim from Goldman Sachs. Please go ahead.
Yes. Thank you.
First question is just going back to the RFP that $750 million potential is that the total opportunity set whether its PPA or owned or does it contemplate some percentage of ownership there and then a follow up to that is.
If we're taking the more accelerated retirement options.
The 2026 retirements.
How much of that potential investment could come in at 22, five time period.
Thank you for that the 750 is the total inclusive amount of investments expected to be able to functionally deliver the capacity once the capacity gap is created through the retirement of Michigan City and Schaefers units A&P soybean everything included also inclusive of the transmission that.
We anticipate necessary to construct to enable that to occur.
And then in terms of timing there is there is some flexibility because these projects in some ways could be a little bit modular in nature. It provides us a fair amount of flexibility to optimize that.
Transmission work for example is going to begin immediately and it could take up to three years to complete the transmission work necessary to take those units offline. So the other resources could be feathered in likely starting in that 2024 month time horizon, but we will know a lot more through the first half of 2022. After we've gone through the due diligence process and started to see.
The exact projects that we think can deliver that capacity.
Got it that's good color my second question.
Is on the dividend policy I think.
Over the past or at this time around and then the past couple of years I think.
And the dividend has been a little bit more modest versus.
History, and as we get back into this more robust EPS growth cycle.
And I think you had a 60% to 70% payout ratio target as of the last disclosure.
How should we think about the.
The future.
Rent growth trends that we could see over the next few years.
Hi, good morning for the 60, 70% payout ratio that is still our guidance at this point, we will revisit.
Our dividend on our.
In January as we normally do with the board, but when you look at our long term plan and 7% to 9% EPS CAGR.
We've indicated.
We would expect to see growth in that range staying growth along.
Annually, because the earnings growth in that range of 60% to 70%, but again, we'll provide an update in January.
Got it thank you so much.
Your next question comes from Julien Dumoulin Smith with Bank of America. Please go ahead.
Hey, Good morning. This is actually Tony Clark on for Julian Thanks for taking my questions.
Morning Cody.
So first kind of a housekeeping item and just to clarify if I'm thinking about 2023, EPS what base should I be using for the $5 to 7% growth is at the top end of 'twenty, one near the midpoint of the new 'twenty two guidance.
I would use the top end of 'twenty, one as the guidance going forward for 'twenty, two and for our long term, 7%, 9% EPS CAGR.
Okay got it.
Then one of the main variables on NIPSCO share of the Capex. The RFP would be the breakdown of ownership versus PPA uncertainty understanding bias to own here, but wondering if you can talk about how you other stakeholders and the regulators are thinking about ownership percentage of the resources have you had any conversations.
<unk> here, how do you think thats going to shakeout.
Thanks for that question, we have not had any discussions regarding ownership percentage as we've just focused on that tranche of technology delivered to deliver the capacity.
And certainly that's been the main focus to understand what the solutions and the pathway, we expect to transpire.
And then we would need to complete their full due diligence necessary on the projects themselves to better understand that ownership percentage, although I'd note that certain of these asset classes track towards a higher ownership percentage for example of Sugar Creek up rate would make a lot of sense for us to own at our at our own plants. So there is a bias down in some of these asset classes could turn.
Rack toward that however, we'd need to complete the full due diligence to have a final point of view, which we expect in the midpoint of next year.
Yes.
I'd only add to that I'd note that key drivers ultimately.
Cost to customers over the life of the projects and Thats, probably the first variable we look at for comparability across different ownership structures.
Okay.
Looking forward to the to the first half update and you've seen some of your peers introduced longer term capex and growth plan to highlight kind of the runway for spending do you see yourself in a position to be able to provide that level of disclosure when some of these.
Yeah.
Pending items around generation become a little bit more clear in the first half of next year.
Yeah, absolutely we are intending to have an analyst day.
Somewhere in that first half of next year. The goal of that analyst day would be to provide more clarity around that.
Next generation investments to replace the Michigan City as.
As well as to extend our long range plan for both our gas and electric businesses.
Got it that's very helpful. Thanks, so much for the time and looking forward to seeing you all next week.
Thank you.
And your next question comes from James Nevin from Morningstar. Please go ahead.
Good morning, everyone and thank you.
Hey, good morning Travis.
Question on the electric side and NIPSCO vectors. The IRB, how do you think about the timing.
And the relationship between the ERP and as you go through the process of Rfps et cetera, and the.
T desk, our regulators thinking about these in terms of the need for new transmission and distribution.
To supply and support.
The IRB.
Does that work.
Yeah. That's a good question Travis the Tedesque really operates on kind of the existing transmission assets on maintenance.
Reliability improvement not so much new capacity related to new generation or we're retiring generation. So theres not a direct relationship between T disc with pending tedious.
Note.
Doesn't really depend in a meaningful way on the ERP.
Typically the projects, we're looking at from the RFP within the integrated resource plan are tied to specific transmission investments that are inside the bids that we solicited.
Really don't crossover in a meaningful way.
Okay. So we could see more transmission investment as you roll out some of the IRB steps that's right.
In the current cycle, we are in the $2 billion includes pretty pretty healthy transmission investment as well.
Okay.
And then on the gas side, what are your latest thoughts on all the discussion about nothing.
Where does that fit into your Capex plan is obviously we've heard.
Domestically and internationally.
Yes, yes.
Methane rule.
Now.
We see <unk>.
Nearly opportunities to improve the emissions profile, particularly thats focused on the upstream assets.
<unk> production transmission storage, a little bit of a light touch on our asset portfolio.
Overall, we believe the right way to drive a cleaner profile for the gas business and the gas supply chain I would go to the other side and say one of the provisions inside the pending legislation or the proposed legislation is the methane tax, which we think is a bad.
Is it basically just drives cost a customer without having the same or the same effectiveness as the EPA methane will those two certainly work together, but the methane rule is a better mechanism and that.
That helps to drive sustainability of natural gas and to do that in an affordable way, which we think is the right recipe.
Okay is there any upside to capex cash capex of.
Okay.
The government in the U S or even internationally were to come down really hard on methane.
FEMSA will handle the methane rule for the distribution entities. So it remains to be seen we have to see how that rule played out.
Okay, great. Thanks, so much.
Thank you.
And your next question comes from David Peters from equity Wolfe Research. Please go ahead.
Hey, good morning, guys good.
Good morning, David.
Just just on the higher earnings outlook.
The new base.
The 2021.
Could you maybe talk about some of the factors that are underlying that better outlook in the interim and then through 'twenty four.
And then I know you have a couple of bigger rate cases, pending just wondering how sensitive to the plan. The plan is to some of the outcomes there.
And then just related to that maybe you could comment on where you are where you guys are at in those in those cases, I guess specifically, Ohio.
Yes. Thank you for the question certainly as we look at our plan.
It's really built on the modernization investments that we're making.
So think about 75% of those investments being tracked that gives us lots of confidence.
Our year to year earnings guidance.
Sure. It's a heavy year from a rate case standpoint did fall five.
Base rate cases in our LDC Scott too.
<unk> settlements, there and one other in Maryland, we expect and get an order in December and then the Ohio and NIPSCO case that we filed.
We will have impact significant impacts.
<unk> by the Middle of next year, and then the fourth quarter for NIPSCO. So that gives us confidence in our earnings guidance and the strength of our overall growth plan.
But thats what continues and really gives us confidence as we think about that 7% to 9% EPS growth.
Which includes the $2 billion of generation investments that are already approved through the.
Indiana Commission this year so.
The strength of our plan and that's really what gives us the confidence.
Of being able to execute on that otherwise it comes down to O&M and managing that we kicked off our ninth first next transformation program a little over a year ago that is going.
That is going well within our plan and our guidance.
Really is intended to reduce costs to help offset inflation aspects for thinking long term around customer affordability, but also improve the rigor of our processes.
And allow us to improve our safety and customer service to our customers.
Yes, let me pick it up there on the related question around Ohio, Ohio rate case, Donald touched on it's our mid year expectation in terms of the.
The filing itself with a $221 million ask net of riders. So there is a rider interplay there as well, but but as we all know not a lot to report at this time as we all know that <unk> been very busy.
So as we see.
The current workload that the commission play out we would expect momentum to pick up no concerns with that we're early in the booking in the schedule overall, but that.
That said given that we're early and not a lot to report as you would expect and as we expected discovery activities have been having so far this being the first base case since 2008 for Columbia gas of Ohio, So no surprise, there and we believe that parties to the case recognize the long duration between the cases.
And our strong investment history and commitment to the state across a range of different activities, including economic development. So we remain confident in the mid 22 resolutions and Thats all baked into our outlook for next year.
Okay, great. Thank you I appreciate all the detail I just had one follow up just on the financing plan and around kind of some.
Being proposed in Washington.
Several of your peers have talked about how meaningful direct pay could be in and helping fund future renewable investments in lowering equity needs.
So assuming that options included I'm guessing it doesn't impact the approved projects at all since you've done the funding for that.
But just in the RSP to $750 million, you've outlined I think historically, you have said something like 60% equity content for new generation investments, we effectively expect that to be materially reduced with the direct pay option.
Yes, let me address the equity content first so we think for the future investments through the $750 million potential investment that we've got.
We would not need the same level of equity content.
Balance sheet is going to be much stronger position by the end of 2023.
And so certainly.
Deep and more typical rates.
Mature cap structure of 50 50.
But having said that direct pay does.
Provide some flexibility and potentially.
Reducing the need for external financing or reducing equity needs. So.
So we do see it as a positive but.
We've got to get more detail on really to understand how that would impact rate basis and deferred taxes to see what the.
Pure impact would be to our financing plan.
Okay, great. Thank you guys.
Thanks, David.
And your next question comes from Gary Ransom.
Miranda from Guggenheim. Please go ahead.
Hey, guys its James <unk> on for Shar, how are you doing.
Good morning, James Jane.
Hey.
Curious with the ERP.
It's taking into account cost inflation for renewables when determining what the actual project cost will be in it.
Be submitting parties are going to be held with fixed cost or if theres any allowance for cost inflation and I have a second.
Question on the gas.
Yes.
Thanks, James I'll take that so the.
The estimate that we sure derives from the RFP process, which was for actionable projects towards the mid part of this decade, which align with the contemplated retirement of 16, a b and <unk>.
Michigan City, we have asked for a period of time for us to evaluate those projects and when we go to the RFP marketplace, we ask for.
The opportunity to evaluate those for a period of time as you can imagine we are still within that window. So we would be able to execute against those bids for those proposals still into 2022, and then continue through the refinement and due diligence process thereafter.
So once you once the winners have been decided.
Just wanted to clarify if there is any potential for pass through for higher commodity costs higher other input costs anything that could.
Delays on components et cetera, or if it's just like a.
Fixed price, regardless of who the winners ended up being.
Gerry if you foresee Thats decided it's.
It's not decided yet generally speaking you'd think about it as a fixed cost that would then relate to that project and that project is still executed both through a window of time that it's been bid that's really through 2020 for $2025 82026, depending upon the project and you'd have that fixed cost related to that project associated with that <unk>.
Apologies to the extent that that data is executed within this window that we're describing.
And to the extent that.
To the extent that you continue to do that through the due diligence process, you might understand more or less about what it would take on the total investment side, most notably transmission to action those projects.
Got it thank you for the clarification there.
Second question's on the LDC you'd mentioned number of times youre seeing an excess of 10% rate base growth.
First how long should we think of that level of growth as being sustainable.
And then I have a follow up.
Yes, I'll take the sort of the long view side of that question and if you look at the $40 billion of identified investments that we rolled out on.
Investor Day, just a little over a year ago.
That's really predominantly on the kinds of investments that are already in flight in the gas business in particular electric little different with the transition from coal to.
To renewables and clean energy.
So those are typically long dated programs. If you look look at the underlying regulatory mechanisms like the <unk> gas plant and NIPSCO theres almost $1 billion of identified investments.
Proved in the gas tedious plan, that's a multiyear beyond our 24 guidance horizon.
Similarly, the Ohio <unk> operates that way in Virginia, the gas save program. Similarly, so a lot of these are annualized programs with trackers that support them.
Run beyond our current 2020 for long term guidance horizon, So I'm not going to guide to a specific point in time, where 10% rate base growth is predictable. That's the kind of update we'll give on analyst day next year, but.
The core point here is the underlying fundamental investment thesis is very long dated across all of the LDC.
Perfect.
And you're saying you're expecting there so that leads into the second part of the question given the recent attractive valuation data points that we've been seeing for where the gas assets had been transacting at how do you think strategically.
About your 10% plus rate base growers with this long term horizon, the potential for asset optimization to limit other need for other types of financing.
Our forecast horizon. Thank you I'll take the front end and ask Donald to touch on the financing side. So very much the same long term strategic orientation. When we look at our portfolio of companies that have that kind of fundamental growth opportunity.
We see as long dated in constructive jurisdictions, it's well supported.
Any rotation will have to be accretive to a plan that reflects that kind of growth engine built in across really literally each and every company that we operate has that same profile right. Now. So it's a strategic question about long term growth first and foremost that said, we're very open minded very analytical about that very objective.
Work very closely with our board to continuously assess.
Is that opportunity as it comes to capital rotation and alternative forms of financing, let me ask Donald to touch on that side of the question yes.
Yes, it's a good <unk>.
And certainly one we've gotten in the past we.
We will continue to evaluate all forms of financing.
Finance our growth programs and our growth plan. It is a strategic question and certainly when I think about how we enhance that plan long term.
Certainly as we think about that next level of.
Generation investments.
Here, we will evaluate that as well to see what makes the best sense for us long term.
Perfect.
Thank you very much for the color and for taking my question.
Thanks James.
And there are no further question at this time I will turn the call back over to the presenters for closing remarks.
Julian Thank you all for your questions. Let me just close by reiterating a few of the key takeaways from our release today, we are targeting the top end of our guidance range for 2021, and we initiated guidance for $2022 40 to $2 48 diluted net operating earnings per share.
Our long term growth commitments have been reaffirmed we I talked about it here on the call. The preferred plan for Nips goes IOP now advances our plans to retire all coal fired generation to between 2026 and 2028 and.
NIPSCO portion of those investments needed to replace this capacity will be evaluated in the coming months with an expectation to rollout more clarity and precision on that at an investor day to be held in the latter part of the first half of next year our progress on the gas rate cases continues we've got settlements on the table orders away.
In three states and filing of the new case in Indiana, and along with the Ohio cases pending and finally again, we do look forward to the steps between now and an Investor day at the end of the first half of 2022 key opportunity for us to extend this long term growth trajectory and we do approach.
Kate you for joining us. This morning, we know it's a busy day for all of you. So please stay safe and make it a good day. Thank you.
This concludes today's conference call you may now disconnect.
Okay.
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