Q1 2022 Duke Energy Corp Earnings Call
Okay.
Good morning, Thank you for attending today, Duke energy quarter, One 2022 conference call. My name is Amber and I will be your moderator for today's call all lines will be muted during the presentation.
On the call with an opportunity for questions and answers at the end if you would like to ask a question. Please press star one on your telephone keypad at anytime I now have the pleasure pending the conference over to our host Jack Sullivan, Vice President of Investor Relations with Duke Energy Mr. Sullivan. Please proceed.
Thank you Amber.
Everyone and welcome to Duke Energy's first quarter 2022 earnings review and business update.
Leading our call today is Lynn good chair, President and Chief Executive Officer, along with Steve Young Executive Vice President and CFO .
Today's discussion will include the use of non-GAAP financial measures and forward looking information within the meaning of securities laws.
Actual results may be different than forward looking statements and those factors are outlined herein and disclosed at Duke Energy's SEC filings the.
The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures. So with that let's turn the call over to Linda Chang. Thank you and good morning, everyone. Today, we announced adjusted earnings per share of $1 30 for the quarter delivering strong results.
The year driven by continued growth in electric volumes that growth was partially offset by <unk> <unk> of higher expense from severe winter storms I'd like to take a moment to thank approximately 19000 restoration workers, who have worked tirelessly to restore power to over 1 million customers across a series of winter storms.
As we've seen in eight years.
Despite the Q1 storms, we remain on track to deliver within our original guidance range and are reaffirming our full year earnings guidance range of $5 30 to $5 6 billion with a midpoint of $5 45.
Reaffirming our long term EPS growth rate of 5% to 7% through 2026 at the midpoint of our original 2021 guidance range, while monitoring economic trends and we'll take action if necessary as we continue to execute the important strategic work, we have underway in the Carolinas, Indiana, and Florida I will.
Touch on this more in just a moment.
Turning to slide five we published our first ESG report in late April that expands our historic sustainability themes and adds more inside on social and governance topics. We included some highlights and key accomplishments on this slide.
We've got a strong track record in each of these areas and have established ambitious targets for the future.
Work has been recognized across the ESG community, including by MSCI, which upgraded our ESG rating to <unk> in February .
We're also laying the groundwork for even more progress with our proposed carbon plant in North Carolina, our IRB in Indiana, and our ongoing solar and grid investments in Florida.
We look forward to sharing additional updates throughout the year and during our ESG day on October 4th.
Moving to slide six let me spend a few minutes on North Carolina.
There is a meaningful progress in the state implementing the framework set forth and house Bill 951, as a reminder, this landmark bipartisan legislation provides for our clean energy transition as well as the modernized performance based ratemaking provisions, including multi year rate plans performance incentive measures and residential decoupling.
We've been working closely with stakeholders on the development of our proposed carbon plan, which we will file with the commission on May 16th.
The plan will outline multiple portfolios to achieve the 70% carbon reduction target <unk>.
Including proposals around timing of coal plant retirements and resource additions.
We expect substantial solar and battery additions demand side management and energy efficiency opportunities in every pathway.
Onshore and offshore wind will be presented for consideration as well as small modular nuclear reactors.
<unk> portfolio has been rigorously tested for reliability and affordability for our customers.
Following following the May 16 filing of our proposed carbon plate and the commissioner will gather additional stakeholder input make adjustments and approve the final planned by the end of the year. The plan will be updated every two years thereafter.
In February the North Carolina Utilities Commission issued its order on rulemaking for performance based regulation and in April The Commission issued its order on rulemaking for coal plant securitization.
This allows our north Carolina utilities to securitize half of the remaining carrying value of certain coal plants. Upon their early retirement, Doug orders were constructive establishing processes that are fair balanced and consistent with our policy objectives of HB 951.
Another strategic priority for 2022 is to file a rate case, introducing a modernized rate, making tools approved in <unk> 951.
<unk> has established a process for these filings that include technical conferences on the multi year rate plans prior to filing. We currently expect to file a DDP North Carolina rate case in the fourth quarter and likely a DTC North Carolina rate case early next year.
<unk>.
Turning to slide seven I'd like to touch on the key initiatives across our service territories and South Carolina Storm cost securitization legislation continues to move forward. The proposed legislation has passed in the Senate and is now being heard in the house if enacted legislation would provide an additional tool to recover prior and future <unk>.
<unk> restoration cost, creating significant savings for our customers as compared to traditional recovery mechanisms.
Moving to Florida, we're making investments to harden the grid under our storm protection plan.
We recently filed our updated plans, which include $7 billion of capital investments over the next 10 years.
In Indiana, we filed a request for proposals for up to 2400 megawatts of new generation through 2027, which includes both intermittent and dispatch of our resources to support our transition from coal. We're pleased with the response to our in the remittance RFP, having received bids from 13 developers on more than <unk>.
30 different projects totaling over 7000 megawatts.
And then second we received bids for the dispatch will portion of the RFP and are reviewing of them now we expect to file <unk> with the Indiana utility regulatory regulatory Commission later this year.
In November we filed our second Teeter plan in Indiana, the six year $2 billion plan includes investments to improve customer reliability harden the grid and prepare for distributed generation. A hearing was held in March and we expect to receive a decision from the commission in July .
Approve the program we began in 2023.
Shifting to the LDC as we continue to make investments to build needed infrastructure improve reliability and to comply with federal regulations in South Carolina, We filed a general rate case in April if approved we anticipate revised customer rates will be effective by October and incentive fee legislation was recently passed.
That will allow natural gas utilities to invest in low to zero emission capital projects.
Legislation will help enable our de carbonization vision for our natural gas business unit and could serve as a blueprint for legislation and other states across the country.
In closing, we're making progress on all fronts across our jurisdictions meeting our commitments and executing our clean energy strategy. We have a clear path forward for 2022 and believe our investment plan will deliver sustainable value to shareholders and 5% to 7% earnings growth over the next five years.
With that let me turn the call over to Steve.
Thanks, Lynn and good morning, everyone I'll start with a brief discussion over quarterly results highlighting a few of the key variances to the prior year.
As shown on slide eight our first quarter reported earnings per share was $1 eight and our adjusted earnings per share was $1 30, this compared to reported and adjusted earnings per share of $1 25, and $1 26 last year. Please.
Please see our non-GAAP reconciliation included in the earnings release for more details.
Within the segments electric utilities, and infrastructure was up 10% compared to the prior year results were favorable due to higher volumes and base rate increases partially offsetting these items were higher O&M, primarily attributed to severe winter storms and weaker weather than last year.
In our gas LDC business, we were flat year over year with contributions from rate cases, and riders offset by higher O&M due to timing and costs associated with new investments results.
Results from commercial were <unk> <unk> lower due to fewer growth investments compared to 2021, partially offset by favorability from fewer winter storms impacting our commercial fleet.
And in the other segment, we were <unk> <unk> lower primarily due to lower market returns on benefit trusts.
Turning to slide nine let me touch on electric volumes and economic trends, we started off the year with continued low growth.
Proving our rolling 12 months retail growth rate to three 8%.
This figure has continued to steadily improve over the past four quarters as we've been replacing weaker quarters experienced in the first year of the pandemic with stronger quarters during the second year.
We believe Q1 'twenty two represents the high watermark for this rolling 12 month figure.
We expect the growth rate will moderate as we move further into 2022 ultimately landing around one 5% for the full year. This is consistent with the 2022 low forecast we shared on our fourth quarter earnings call in February .
The favorable first quarter results for the electric utilities are mainly driven by sustained residential customer growth of one 8% and the loosening of COVID-19 restrictions for commercial and industrial customers.
<unk> also benefited from residential customers, who continue to work from home and from incremental load in the Carolinas and Midwest as customers rolled out several winter storms.
For commercial and industrial classes, we saw continued rebuild of our existing customers and looking ahead, we will start to see incremental growth from new customers due to the outstanding accomplishments of our economic development team in 2021, we hope to attract nearly 12500, new jobs and $6 2 billion.
And capital investment to our service territories, creating vibrant economies and accelerating growth in our communities. We have seen this momentum continue into 2022.
While these results were a great start to the year, we were watching key economic indicators, such as moderating GDP growth rising inflation and supply chain constraints. We will actively we will activate agility measures and leverage our size and scale to counteract rising costs and secure necessary materials through vendor relationships.
Ordering at other measures.
This work will continue for all aspects of our business to control O&M costs and secure the materials and services, we need to execute our growth plan.
With ongoing constraints impacting global supply of solar panels, let me take a moment to address this matter on our fourth quarter earnings call in February we reduced our 2022 net income projections for the commercial renewables segment to approximately $150 million down from our original range.
The $250 million.
This related to a strategic decision to prioritize our regulated solar projects within our existing panel supply.
Having taken those steps in February we are well positioned.
Solar projects slated for 2022 across our regulated and commercial operations.
Looking to 2023 and beyond we're closely monitoring the department of Commerce investigation, as we assess the timing of our solar projects.
On the regulated side, we expect no delays in 2023 for our commercial renewables business.
We are targeting approximately 800 megawatts of solar in 2023 and have line of sight on roughly half of this total panels have been secured and the PPA negotiations are underway.
The remaining solar projects are in various stages of development and largely dependent upon panel price clarity.
If delays persist we may see a few projects shift from 2023 to 2024, resulting in the commercial business delivering more in line with 2022, we are planning for a range of outcomes and have a pipeline of capital and agility levers to maintain our 5% to 7% annual earnings growth trajectory.
As a reminder, our commercial solar capital for 2023 represents approximately 1% of our total capex for the five year plan.
Turning to our nuclear operations due to energy owns and operates the largest regulated nuclear fleet in North America.
We have a significant inventory of enriched uranium product and have agreements with a diverse set of suppliers across several continents.
There are lots of any potential sanctions related to the Russia, Ukraine, or our existing uranium inventories contracts and supply flexibility are sufficient to fuel our nuclear fleets.
Let me close with slide 11, we are off to a good start in 2022 and feel confident of our earnings guidance range of $5 30 to $5 60.
With a midpoint of $5.45 let.
Let me discuss the earnings profile for the remainder of the year.
Compared to 2021 second quarter, we will see higher O&M simply due to the different swapping of planned outages in a given calendar year.
Additionally, the Florida rate settlement timing in wholesale contract recognition will pick up in the second half of 2022.
The growth in the natural gas business unit, resulting from rate cases riders and customer growth will largely impact the fourth quarter.
Turning to commercial renewables the majority of the negative variance compared to 2021 occurs in the first half of the year.
Again, we are on target for earnings in 2022, but these factors will impact the quarterly shaping of those earnings.
Inclusion, we continue to make meaningful strides in 2022 towards the advancement of our clean energy strategy with a keen focus on affordability and reliability for our customers our attractive dividend yield coupled with our long term earnings growth from investments in our regulated utilities and robust service territories provides a compelling.
<unk> risk adjusted return for our shareholders with that we'll open the line for your questions.
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We will pause briefly ask questions are registered.
Our first question comes from.
Julien Dumoulin Smith of.
Bank of America Julien Your line is now open.
Hey, good morning team. Thanks for the time and the opportunity to come back there I appreciate it and thanks for the detail.
Paul.
Good morning, just going back.
Indeed.
If I can go back Super quick to be solar Capex here in the conversation there very quickly I think the key point.
In line from 'twenty, two to 'twenty, three so kind of at that 150 ish level for 'twenty three.
You said, it's delays persist can you elaborate a little bit more about what that would look like if delays persist and also if you can.
And can you recap for us a little bit.
The earnings recognition, just how should we think about that that the weighted sort of average.
Across the portfolio how much of that ITT is being captured in that first year. If we think about sort of the mechanics behind that impact if you will.
Sure Julian I'll take a shot and I'm sure Steve will have.
Some things to add I think the headline that I would like to leave with you is we are on track in 2022 for both commercial and regulated renewables.
So the earnings that we have been talking about the adjustment that we made to 2022, we are tracking exactly to both of those from 2023, we continue to prioritize our regulated renewables and they are on track as.
As we look at 'twenty three for commercial.
There is some uncertainty that's been created by this investigation really around price and how that price is going to ultimately impact project economics. So we are planning for a range of outcomes.
And what Steve shared with you is that range.
Could include something comparable to 2022, if the delays persist or we have the potential to do better than that of clarity occur soon.
So that we can keep projects on track.
I think it's important to recognize that this is a minor amount of capital in the construct of Duke energy and so as we think about 2023, we are confident in our 5% to 7% growth rate.
So on income recognition I'll turn to Steve to talk a little bit about that Julien and then we can circle back and see if we resolve these questions right Julian on the ITC recognition. The past couple of years. The projects. We've been looking at are three to five years in that range, depending on the tax equity arrangement, but we've been.
In that range.
Accelerated depreciation benefits have been overall, perhaps five to seven type year spread that's what we've been looking at but again as.
As projects move we look at what the needs are and what makes sense to the tax equity partner as well, but that's that's kind of where we've been.
Got it Okay fair enough.
Could you clarify how much of that would be shifting shifted I don't know half of your portfolio. How much did that impact 2023, just to maybe clarify that and then.
Second question, if I can go forward with.
Yes.
We're trying to share.
Julian is if we do end up shifting.
Our expectation is the 23 would be in the range of 22.
Yes.
Yes got it yes forget the Permian focus on the plant.
Yes.
And then as we look out to 2024.
We believe that give sufficient time, hopefully with any supply chain issues to resolve themselves more clarity on price and we also see a ramp up in regulated renewables by the time 2024 rolls around so we're talking about moving a few projects in the commercial from 'twenty two to 'twenty three.
This uncertainty persists and we'll of course be monitoring and updating the cyber related this I very much appreciate that.
Just a super quick second question just treasuries you guys have the sensitivity in the slides et cetera could you comment about the impact to your business today from the move in rates that we've seen again lots of different ways to take that Lynn where would you go with it I know you that this 12 firms. So we are not really out there.
Yes and <unk>.
<unk>.
On the high end children as you would expect because we're experiencing that interest rate really on short term at this point and our dollar averaging into long term rates, but Steve can take you.
Sensitivity based on.
Variable rate securities in the portfolio, but we.
Some things that we've done to mitigate that very soon.
Significantly.
Increased hedging over the past year and a half.
On some of the securities that we.
Knew we were going to be issuing in 'twenty two.
Got about 30% of the securities hedged for 'twenty, two and we've hedged even some in 'twenty three that we know are going to occur.
So.
Utilization of that we've been opportunistically going into the market working with tenor and timing, which given our scope and scale, we can do pretty well.
So we have significantly knockdown of the 12 cents.
Impact to the plan that you might see through those techniques.
Got it okay guys. Thank you all very much really appreciate it thank you Julien.
Thank you Julien.
Our next question comes from <unk>.
Jonathan Arnold with vertical research partners.
Jonathan Your line is now open.
Hey, good morning, guys.
Thanks, Jonathan good morning.
Quick one on omni carbon plan, obviously appreciate your comments.
Tell us more about that kind of a more about that in a bit.
Then you mentioned there will be several different options.
Yes.
Different technologies.
Would you expect to make.
Definitive preferred portfolio recommendation, we view filing or is it more a range of options and then the commission.
That decision on which ones too.
Hey, Jonathan it's the latter we're going to present a range of options.
On the 70% reduction.
And then that will be the subject of public hearings and review by the commission and ultimately it would be the commission's decision on pace technologies price implications et cetera.
Those portfolios reflect the input from stakeholders. So we've had three.
Robust stakeholder meetings has also had a series of technical conferences to dig more deeply into topics that are relevant to the carbon plant.
So when we file this on Monday, Jonathan we will come.
<unk> information to all of you on what's in there and then of course this will be a centerpiece of our discussion over the balance of the year.
Okay, but no theres not going to be we think this is the best one or anything like that from the sound of it.
No.
Great.
Thank you for that and then just on this in terms of what Youll see on load.
Comments about.
Second quarter, probably being the peak and how is the what you've see sorry first quarter, how has what you've seen.
In terms of.
The last few weeks relevant to the trajectory you expected when you gave that year end.
One 5%.
Glide path I guess.
<unk> has attracted a little ahead or is it roughly on the line you would have thought and any more color you can give us there.
Yes, Jonathan.
I would say.
We continue to experience very strong.
In the Carolinas and in Florida, and that shows up with customers that shows up with economic development.
And our results reflect that strength.
But we're also monitoring what's going on in the broader economy with inflation and GDP growth expectations, and so that has kept us.
At our planned level of <unk>.
One 5% for the full year and I don't know, Steve If you would add to that yes, I think we've got our aggregate strongly here.
As Lynn said.
We're not going to move up 8% in the half at this time because there are other factors, we need to think about where early in the year, but it's nice to continue to see.
Migration and.
People move in the commercial is going to follow that hotels restaurants et cetera, and we're seeing.
Robust industrial growth just in our service areas.
Due to the economic development efforts and just the general good business climate, So hopefully that will carry through and continue on but.
We're off to a good start, but we got to keep an eye on it not the time to change the forecast.
Great.
It's been good but.
Enabling you to be a little more.
If you think about the rest of the year.
That's right.
Thanks, so much.
Thank you Jonathan.
Thank you Jonathan.
Our next question comes from <unk>.
Jeremy Tonet with J P. Morgan Jeremy Your line is now open.
Hi, good morning, its actually Brian <unk> on for Jeremy Thanks for taking my questions.
And just one follow up on the carbon plan filing and you just remind us how that ultimately will show up in your multiyear plan filing I think you talked about <unk> in D C <unk> and just remind.
Remind us what the big milestones to watch ahead of those filings.
Sure.
A couple of things I would note there.
Well over 50% of the multi year rate planning capital will being transmission and distribution investment.
We will include some level of renewables and battery storage consistent with the carbon plan really targeted for the end of the three year periods to think about projects that would come in service $25 26.
And the way the rate cases work here in the Carolinas as we do have an opportunity to continue to update capital beyond filing through the date of the hearing.
That will give us an opportunity to fully understand.
The approved carbon plan and to the extent any adjustment needs to be made in capital when they do so at that time.
So I would think about these things running in bid in parallel Ryan, but given that the majority of the capitalist T&D, we don't expect a material impact on the multi year rate plan from the carbon plant in this three year cycle a lot of impact in the next one.
Got it no that makes sense very helpful. And then just one on inflation, maybe or supply chain impacts even outside of the solar just curious I know you hit on a little bit in the script, but just kind of general trends youre seeing across your cost structure, how you kind of see that intertwining with your ability to kind of continue picking on O&M.
We continue to see what you are hearing throughout the industry, whether it's raw materials labor of course fuel costs have been front and center.
But as Steve indicated we are addressing those risks with improved planning with our long term contracts our scale inventory substitution and additional suppliers just a variety of considerations and as we look at O&M in particular, we're confident in our trajectory that we had planned for.
2022, and maybe a little background there Ryan we had originally been planning for a negative 1%, we raised that to flat, giving us some headroom and so the combination of all the things I mentioned give us confident that we're on track for O&M.
And 2022, and we have yet to see any.
Impact to our overall capital plan.
As a result of these changes we've been able to address even delays and supply chain makes us institutions in our projects and keep executing for our customers.
Got it now that's very helpful. Thank you I'll leave it there.
Thank you.
Thank you.
Thank you Ryan.
As a reminder to submit a question Thats star one on your telephone keypad.
Our next question comes from Michael Lapidus with Goldman Sachs Michael.
Michael Your line is now open.
Hey, guys. Thank you for taking my crime, Michael Congrats on a good.
Lynn.
And congrats on a good start of the year I actually I have a couple first of all O&M.
O&M X storms was up year over year.
And if I understood Steve's comments correctly youll have some O&M pressure in the second quarter.
Without it schedules I would assume.
How should we think about what that means for the cadence and trajectory of O&M in 2022 X storms flat up down and if its down is it more backend loaded.
We had targeted flat Michael.
We'll certainly be at least flat our agility efforts frankly that we are putting in place I think could drive it downward it will be back half. That's just the timing of when things are aligning but absent storms.
I feel good certainly about being flat to potentially declining.
Got it.
Yes.
And I know you've got the Rfps coming in Indiana, and I'm just curious.
Two four Gigawatts can you remind me how much of that is renewable versus conventional and how do you think about.
What is potentially utility or cell phones versus kind of just under traditional BPA.
Yes, so Michael it breaks down almost 50, 50 somewhere 100 megawatts of renewable resources <unk> thousand 500 megawatts of electric generation and.
And we continue to believe that utility ownership is valuable to our customers and we will be putting that forward and our expectation of Av.
Building renewables buying renewables.
But there would be some degree of utility ownership.
And then we will.
No more about the dispatch more resources. The results came in May 2nd we're still digesting. The third party administrator has not shared a lot of specifics on that but.
The renewables and the indication will get robust.
Our responses to those.
Those resources as well.
Got it and then last one you mentioned quickly in the remarks today that you.
You updated the storm protection plan filing in Florida can you remind me how much of a material how material.
Change relative to the original filing does that make to your capital spend plan and the revenue requirement for this year in the next couple of years in Florida.
Overall, the impact was about a $1 billion increase is a result of updating the SPP.
Filling in Florida Michael.
But 1 billion over 10 years 1 billion over two year, just can you put some cadence and timing around that for me. Please.
I would expect it to be back half of the decade, Michael you May remember, we're under a multiyear rate plan through early 2024 will be updating capital in connection with that filing.
So it's not going to be in the next couple of years. It would be later that's right. It was a 10 year final so literally.
It would probably be in the back part of the year, we'll catch some of that in.
The latter part of our five year plan, but the bulk of it is going to be after that.
Right and I thought that was covered via trackers for Ryder separate from from core Trc or forward looking test years, you haven't Florida.
That's correct. It is a rider it started in late 'twenty, one and that's kicking in this year.
That's correct, but most of that increase in spend linear with the updated filing will be in the latter part of the decade.
And Michael I would.
I would suggest that we look at all of these things it's a multiyear rate plan. The storm protection plan as a part of an integrated approach to serving customers in Florida, and really thinking about how the impact of price and schedule and our construction activities in our capital. So we plan them in a coordinated way.
Yes.
Got it thanks Lynn Thanks, Steve.
Thank you sure.
Thank you Michael.
Our next question comes from.
Anthony Caldwell with Mizuho.
Anthony Your line is now open.
Good morning, Lynn Good morning, Steve Congrats on a good quarter.
Thank you.
Hopefully just an easy one.
A lot of our focus on North Carolina, if I could pivot to South Carolina.
Just wondering.
I don't believe the state has a de carbonization target yet Im wondering when do you think we get more clarity from the state on the decarbonization target and I guess, how would that impact due to capex plans.
Anthony I would maybe pull out just a little bit to talk about the alignment between the two states that has existed over decades.
Whether you think about nuclear or even.
Work around economic development to make sure that we've got investment going in both states.
South Carolina has a strong interest in renewable generation you may remember at 60 to set out some parameters around renewable construction and we will continue.
To work with the state on how the.
The clean energy transition should occur.
Both states are able to meet their objectives.
And I would think about energy policy as being important to both states. The language may be slightly different the approach.
We believe will be aligned and coordinated in a way that makes sense for our customers and for our investors.
So I'll leave it at that at this point.
Anthony a lot of work going on to make sure South Carolina is completely up to date on all of that is occurring and I should indicate that they have been very active stakeholders in the carbon plan in the stakeholder meetings here in North Carolina.
Great and if I could just sneak in one more.
I think you guys have great clarity on the pressure on renewables.
Again, it's probably I think 3% overall learning so a pretty small portion, but just I don't know if its you or Steve or <unk>.
What kind of toggle that what kind of leverage would you poll to navigate maybe the pressure on renewables. If I think 'twenty three is flat to 'twenty two that we look for maybe lower O&M and utilities may be overcome that just wanted to clarify where the leverage would be to offset the pressure on renewables and I'll leave it there.
Yes, Anthony I would think about that I would also think about acceleration of capital in other places in the business. So the types of agility levers, we have pulled time and time again.
To maintain our trajectory and Steve over to you to see if you'd add anything.
I think thats right.
Look at the rider mechanisms that we've got and the investments that we can make there.
Our O&M agility is a core muscle that we exercise in these times and given our scope and scale. We can look across the footprint. We can look at supply chain.
And various mechanisms within there as well so number of tools across the footprint in that vein Anthony.
Great. Thanks for taking my questions.
Thank you.
Thank you Anthony.
Our next question comes from Dave.
David Paz with Wolfe research.
David Your line is now open David.
Good morning, Good morning Lynn.
How are you doing can you hear me okay.
Yes, we can thank you.
Great.
So I appreciate the comments you made on the solar Capex relatively modest your current plan just curious how should we think about solar post your current plans. So I think you've given us a range in the back half of the decade.
Would you would you.
Let's say, it's going to be in the similar percentage points or.
And when you talk to materially higher.
David The thing I would point to as I look at $2425 26, we will be ramping renewable construction in the regulated business and a much more significant way than the short term. The 'twenty two 'twenty three that you are accustomed to seeing so think about the Carolinas.
We have not had renewable build in our capital plan in the Carolinas, but that will begin to show up in 'twenty four 'twenty five 'twenty six.
We've talked about the fact that we will see an increasing amount of regulated renewables and that will impact the way, we think about capital allocation between regulated and commercial you'll begin to see that in 'twenty four 'twenty five.
Okay.
Yes.
Is it fair to say that whatever projection you have for solar in the Carolinas or at least North Carolina.
Your your plan reflects.
Ownership level under the law, but I think it's 45% of its absolutely 50, 545, 55% utility ownership yes.
Great and if I can ask a general question, maybe specifically do but just can you talk about the efforts that you do and maybe the industry generally are conducting.
Really to inform the administration about the VLCC and mitigation and you can just clean energy incentives generally.
Yes.
David I would say, there's been ongoing discussion around clean energy policy around renewable tax credits around supply chain issues really dating back to the end of last year continuing into this one.
We share the goal with the administration of reaching a net zero future and so these elements that we're talking about are relevant to that conversation.
So we believe a timely and efficient resolution of the department of Commerce inquiry is important. We also believe that the renewable tax credits are important for our customers. As you think about the level of investment that is planned to reach these goals. So we're very actively engaged in policies that impact our goals for net.
Zero and I don't see that changing.
Okay. Thank you.
Thank you.
Thank you David.
This concludes the Q&A portion of today's call I will now pass the conference back over to Lynn good for any closing remarks.
Well. Thank you for participation today for questions for your investment in Duke energy and as always we're available if there are questions or further follow up on anything that we've covered today and look forward to talking to you soon thanks again.
That concludes today's Duke energy quarter, One 2022 conference call. Thank you for your participation you may now disconnect your line.
Okay.
No.