Q2 2022 Xcel Energy Inc Earnings Call
Which does not include distribution investment needed to upgrade the grid.
<unk> clean energy leadership, including our long standing track record of carbon reduction.
This is a direct result of the passion that our dedicated employees bring to serve our customers and our communities.
Earlier. This month, we received another exemplary rating from the Institute of nuclear power operators for our Prairie Island nuclear power plant.
We've continued to improve performance and cost efficiencies demonstrating sustainable excellence in operations.
I want to congratulate and thank all of our nuclear employees support teams contractors and suppliers for their commitment and impact.
Nuclear remains a very important source of reliable carbon free energy, we're proud to be one of the top operators in the nation.
Yesterday was announced that Senator Schumer and Manson had a group at reached agreement on the inflation reduction Act of 2022.
While we still need to analyze the details to understand all of the nuances of the act. It appears to include nearly all of the broader clean energy tax credits, including new and extended track tax credits for wind solar hydrogen storage and nuclear.
Well it doesn't include direct pay for all taxpayers for all tax credits. It does include tax credit transferability as an option when direct pay is unavailable.
As we've previously discussed our capital investment plan is not dependent on changes in federal policy. However, the energy provisions included in the act will provide substantial customer benefits and help enable our clean energy transition, while keeping our customer bills affordable.
There's still a lot of twists and turns that can happen in Washington, but we're optimistic that the bill could become law.
This past quarter, we were honored to be among the first companies inducted into the climate leadership Hall of Fame, which recognizes different organizations across the country for exemplary leadership and response to climate change.
We were also recognized with a Hubert H Humphrey Public leadership award for our groundbreaking sustainability goals in Minnesota.
And finally, we received the EI National Key accounts award for outstanding customer engagement, which recognizes companies in their account executives for providing excellent support and offerings to corporate customers.
Our customers are at the heart of everything we do.
And it's great to be recognized for our work in helping them achieve their goals.
I want to thank these organizations for the recognition.
Along with our employees partners and stakeholders, who make it possible and with that I'll turn it over to Brian .
Thanks, Bob and good morning, everyone.
We had another solid quarter recording earnings of <unk> 60 per share for the second quarter of 2022, compared with 58 cents per share in 2021.
The most significant earnings drivers for the quarter included the following.
Higher electric and natural gas margins increased earnings by <unk> 25 per share, primarily driven by riders and regulatory outcomes to recover our capital investments.
In addition, our lower effective tax rate increased earnings by <unk> <unk> per share.
Keep in mind production tax credits lower the ETR ETR. However, ptc's are flowed back to customers through lower electric margins are largely earnings neutral.
Offsetting these positive drivers were.
Increased depreciation expense, which reduced earnings by <unk> 15 per share, reflecting our capital investment program and the recognition of previously deferred costs related to the Texas electric rate case.
Higher O&M expense, which decreased earnings by <unk> <unk> per share higher.
Higher interest expense and other taxes, primarily property taxes decreased earnings by <unk> <unk> per share.
And other items combined to reduce earnings by <unk> <unk> per share.
Okay.
Turning to sales.
Weather adjusted electric sales increased by three 1% for the first six months of 2022, largely due to higher C&I sales driven by strong economic activity in our service territories.
In addition, our unemployment rate is 80 basis points below the national average.
As a result, we have revised our assumption for 2022 sales growth to 2%.
O&M expenses increased $14 million for the second quarter, primarily driven by the recognition of previously deferred expenses related to the Texas electric rate case.
Additional investments in technology, and customer programs and increased cost for storms and vegetation management.
Like other businesses, we are facing inflationary pressures and now expect an annual O&M increase of approximately 2%.
In addition to the Colorado Resource plan approval. We also made strong progress on a number of other regulatory proceedings.
The Colorado Commission approved our euro firm settlement, including full recovery of all costs with the exception of $8 million just loans primarily related to conservation messaging.
In Minnesota, an ALJ recommended full recovery of all Yuri related fuel costs, we anticipate a commission decision later this summer.
In Texas the.
The Commission approved our electric rate case settlement, which provides a rate increase of $89 million.
Rates were effective back to March 2021, which is why you see some year to date true ups in revenue and various expense lines of the income statement.
The agreement also accelerates the depreciation life of the top coal plant to 2034.
We have a pending natural gas case in Colorado seeking a rate increase of approximately $175 million over three years.
Based on an ROE of 10, 5% and an equity ratio of 55, 7%.
In June Intervenor testimony was filed.
The staff recommended an ROE of 9% an equity ratio of 55% and the historic test year.
While the UCA recommended a 9% ROE and equity ratio of 51, 5% and the historic test year.
In July we filed rebuttal testimony, providing additional support for our file position.
Hearings are scheduled for late August we anticipate a commission decision later this year with final rates implemented in November of this year.
We recently filed our first electric rate case in South Dakota. Since 2014, we are seeking a $44 million revenue increase based on an ROE of 10, 75% an equity ratio of 53% in the historic test year.
We expect a decision and final rates implemented in the first quarter of 2023.
We also have pending electric and natural gas rate cases in Minnesota.
We are in the discovery phase and expect intervenor testimony to this fall followed by commission decisions in 2023.
Sales on these cases and schedules are included in our earnings release.
Shifting to earnings we've updated our 2022 guidance assumptions to reflect the latest information details are included in our earnings release, we are reaffirming our 2022 earnings guidance range of $3 10 to $3 20 per share.
Which is consistent with our long term five years terms on EPS growth objective.
With that I'll wrap up with a quick summary, the Colorado Commission approved our resource plan and storm urea cost recovery settlement.
We received an ALJ recommendation in Minnesota for full recovery of fuel costs related to winter storm Yuri.
We will be filing our Midwest EV plans shortly.
The Texas Commission approved our rate case settlement.
We are reaffirming our 2022 earnings guidance and.
And we remain confident we can continue to deliver long term earnings and dividend growth within the upper half of our 5% to 7% objective range.
As we lead the clean energy transition and keep bills low for our customers.
This concludes our prepared remarks, operator, we will now take questions.
Thank you and if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speakerphone make sure. Your mute function is turned off to allow your signal to reach our equipment. Once again, everyone to ask a question simply press star one on your telephone keypad will pause for a moment to assemble the queue.
Okay.
Alright, and our first question will come from Nicholas Campanella with Credit Suisse. Please go ahead.
Hey, good morning, Thanks for taking my questions.
Good morning, So I guess, hey, yes, good morning.
I guess just thanks for the upfront color on the inflation reduction Act.
Helpful.
If there is an alternative minimum tax.
Can you just remind us how your business is positioned there.
Hey, Nick Good morning, this is Brian .
Yes, good question.
Think about that book and as we look at added a couple of different ways.
First as we have credits available where you can offset 75% of that book <unk> impact and then also when we look at the Transferability. That's included in the legislation that ultimately when we put those two together that we see this as cash flow accretive.
For US now I'll caveat that just came out yesterday and that 700 pages of legislative tax. So we're still working through it but thats our view on the book empty.
Okay, Great that's helpful.
And then I guess on sales. This is like the second time I think this year that you're in.
Electric sales forecast for the for the near year has changed to the positive.
So just.
Maybe kind of talk about what type of trends you're seeing for this year, how that kind of compares to your long term forecast and you're kind of starting to see structurally higher demand going forward and is that a long term tailwind for you. Thanks.
So that's a good question and we've seen both in Q1 and Q2, we've increased our sales guidance for the year and I would say theres, probably some more opportunity there as we look into the balance of the year now certainly the dependence on the macro.
Impacts that could occur with what the fed is doing but we see strong C&I sales and is even better if you look at.
Or Colorado as the C&I sales in Colorado.
As an adjustment there when you normalize for this large solar farm that we helped with the major customer behind the meter C&I sales in Colorado are strong too. So we're seeing that across our service territories with at C&I strength, good economic rebound.
Seeing it.
On the residential side, we expected that call reduction and.
And when we look at our budget, we're actually a higher on residential.
Then than we expected so structurally I think we've seen a strong economy in the first half of the year and is certainly in the energy sector and the manufacturing sector across the board so as I think about longer term.
Obviously could have some potential headwinds if there's a recession or what happens and how big of an impact interest rates have but I think we're bullish longer term when we start to think about the electrification opportunities when we start to see EV penetration when you start to see electrification electrification of industrial processes. So I think there's a law.
Longer term tailwind.
As I look at our service territories.
And just another example, and offered down in the Permian Basin, we've seen extremely strong growth, but longer term, we're talking with our customers about electrification they have their own ESG goals and net zero goals in the Permian and so we're in discussions with how your electrified pumps and rigs in compressors and ensuring that we have the capacity and the.
Investments in our distribution and transmission system down there to serve them. So I think there are a tailwind longer term and it's great to see the rebounds that we have in the C&I sector.
That's great I appreciate it I'll get back in the queue.
Alright.
Next question will come from.
Jeremy Tonet with JP Morgan. Please go ahead.
Hi, Good morning, Jeremy Hey, how are you good.
Good good. Thanks, I just wanted to dive into MISO little bit here now that we have some more developments in.
Touching on.
$1 2 billion, just wondering if you could characterize a bit more in terms of greenfield versus brownfield and I guess this is just a preliminary estimate but whats the scope I guess what.
What could possibly following incremental to this is this some competitive processes that still could make the way Im just trying to feel our way through what this could mean.
Yes. Good morning, this is Bob.
Look I first of all let me just comment on transmission broadly we feel very.
Very confident and excited about the transmission build out opportunities, we have and as you think about where we've been this past quarter between the Colorado power pathway the transition needs.
From the Minnesota resource plan and now the MISO and tap tranche, one that's about $3 $5 billion of large scale transmission projects that we.
We've identified and in some cases have approved.
To the classes as important to us, it's certainly going to enable our ability to add the 10000 megawatts of renewables that we need from the Minnesota, and Colorado resource plans and to continue to execute on our 2030, 80% carbon reduction vision.
Particularly with regard to the MISO <unk> process.
We've put our best estimate out in terms of the investment opportunity around $1 billion in the quarter.
For about six different portions of six different projects we've got.
ROE for legislation in Minnesota, North Dakota, South Dakota, and feel pretty confident about what we've put forward in terms of the opportunity in <unk> and.
And Jeremy I'd, just add to that like Bob said, we feel good about our point estimate and Wisconsin projects were deemed upgrades. So they are not expected to be competitively bid. So what you see is we put in our earnings presentation on our what we expect to be ours and owned and Thats. Our good estimate right now.
And the estimate does not include any competitive bid. So if we just if we choose to be competitively bid and we're successful that would be incremental to the one two.
Got it. So this one two replaces the one to two range, but theres still potentially competitive processes that could add to this is fair way to think about it yes.
Yes.
Got it thanks.
Thanks for all the comments on the climate policy, so far and noting that this is hot off the press.
But just wondering.
If theres any particular items in there if we peel back the onion more what do you see as the largest potential impact and points of opportunity tier plan near and long term I mean, ccs be something that's thought about more now.
Great question again, as Brian said, you kind of have to absorb without a page of minutes. Since it came out last night to get through all of the text but.
We've been talking about a lot of these broad strokes since the third quarter call in.
<unk> financial conference last fall.
Some really interesting things in here as we've seen production increases in solar the PTC for solar is really interesting relative to an ITC and you might see some regional differentiations on people using ptc's versus Itc's I think the transferability piece is really interesting as we think about that.
For our account, but for everybody, who builds renewable assets and the friction costs that are embedded with financing some of those things, particularly with tax equity. This could overall, bringing the cost of both owned and PPA.
Assets down again real benefits for our customers as we continue to make this transition.
Standalone storage credit interesting theres, some really challenges with the pairing of solar and storage. We've made them work, but this makes standalone storage pretty interesting and then obviously, our North Dakota company is the.
The governor there has put a very aggressive.
Carbon neutral goal on the table in Ccs is really important to North Dakota. So I think as we look across the country and across our portfolio youre going to find bits and pieces of all of this to be interesting and notwithstanding all of that there is great stuff around energy security electric vehicles and resiliency all built into this that we really haven't even Doug.
Into but I think it's a terrific piece of legislation for us as a company and we're excited to dig in and hopefully see this passed the house and the Senate before the.
For the end of the fiscal year, Yeah, and I would just add to that Bob I mean, as we as we're in the middle of developing or clean heat plans for our gas ldcs in Colorado, and Minnesota and have a hydrogen PTC. So you couple that with the long term PTC for wind or solar or is it really gives should give green hydrogen a jumpstart.
And so we're excited about that and so I think there's a number of great things in this bill and ultimately we look at it.
It's really looks and feels similar to what I talked about on Q3 of last year in terms of the impacts to us, but ultimately no we look at cash flow accretive.
And slightly there is some slight rate based reductions from we'd become more tax efficient, but slightly EPS beneficial now again with the caveat, we're digging into and make sure we understand everything particularly around transferability.
But when we look at this whole package as we talked about our current plan is not built on this but our current five year plan and long term plan. Our resource plans were approved with current tax law. This just makes our plans even better for our customers and that's the important point long run great for our customers as we can make this clean air clean energy transition even more more.
So we're excited about this and optimistic that it gets passed.
Got it that's super helpful. If I could just circle back to MISO real quick real quick last one here of the $10 3 billion of capital. There do you would you be willing to share any thoughts on how much of that you think could go through a competitive process.
I think the estimates I've seen are about $1 billion.
Got it thanks, so much I'll leave it there.
Okay.
Alright, our next question will come from Julien Dumoulin Smith with Bank of America. Please go ahead.
Hey, good morning team thanks for the time.
We haven't seen it come back here really appreciate it.
Good morning Julien.
Hey.
On the same front.
Let's talk a little bit more on the legislated.
Does your prior estimates that improvement target under Triple B with direct K compare to your first taking the provision under the irate factoring in the transfer or transferability elements right.
Specifically called that out a moment ago in your prepared remarks.
Hey, Julien good morning.
No like I said it was involved so it is hot off the press and 700 pages of legislative textbook, making sure we understand it and there are nuances. So theres absolutely caveat as we think about it but I think the best way to think about it if remember what we'd call talked about on Q3 as you know.
Maybe a 175 to 100 basis points or higher improvement in <unk> CFO to debt as we look at it which gives us financing.
The potential capital headroom, but again, there's a lot to unpack around transferability and how that would ultimately work, but ultimately.
Our initial take is a little bit in line with what we talked about Q3 so.
Really good for us, but ultimately great for our customers as we think about how we can make this clean energy transition even more affordable for our customers.
It should also be noted that Brian didn't go to bed last night. So he's doing all the math on this so I think that with a grain of salt yes.
Italy.
In his delirium, though nonetheless.
Broadly affirming your expectation that the math is not too different from what you described the third quarter.
Correct with the caveat that we're still understanding this.
Totally a completely with that abstract.
So what does that do for your equity needs right, let's just take that a step further if we can start to unpack that.
Look so.
Talked about it gives us more flexibility I think how we're going to unpack all of this is we're rolling forward our capital plans and we will release those in Q3.
October earnings release.
Now whether or not this passes by then will should know a lot sooner.
As this passes or not and we can provide you a full update because that will and that will include updated capital plans and how we're going to finance that sell but it certainly does give us more financing flexibility.
Got it excellent Alright, and then Super quick last one here.
I know I'm transmission, we talked a bit already what about these broker challenges.
Again, I know that's more recent here, but.
Any thoughts or perspective on the FERC angle here again, I guess this is states versus FERC and then also timeframe.
Yeah, Hey, Julien, it's Bob I think I think these have been challenged in both state and federal Court and the ROE for <unk> have held up and we expect them to.
Got it alright plain and simple.
Excellent guys. Thank you.
Our next question comes from into Kim with Goldman Sachs. Please go ahead.
Hey, guys. Thanks for the question.
Hey, Thanks for taking my question.
First one just regarding the inflation impact on the O&M and higher financing costs. There as we look beyond 'twenty two into 'twenty three and you just try to get ahead of it what are some options you have that you could do now and any levers I guess too to get ahead and position for 'twenty three.
Hey, good morning into certainly were.
Continually looking to offset inflationary pressures and this is no different than any other year like we've had O&M flat since 2014 and were very proud of that because it has a direct impact on customer bills now.
Like everyone else, we're feeling the inflationary pressures this year and adjusted our O&M up by 1%, but as we go through the year and see how the year unfolds you certainly take actions to see if you can set up next year.
How it is looking and we have a continuous improvement team that is regularly working with our business areas. We're investing in technology. This year, what we have something called the digital operations factory that helps drive technology into the business areas to reduce O&M costs and make us more efficient. So that's just part of our DNA and part of our culture.
That we've stood up and you can see in how we manage O&M over over the long term. So that's really our focus in terms of what we see now we do expect some inflationary pressures to continue through the balance of the year and that's a bit why we increased our guidance but.
I think you should expect more of the same all right, we're going to deliver for our customers. We can deliver operationally and will deliver financially this year and in the future.
Got it my second one I think I know the answer to this one but just given what could be on the table here on the legislative front for nuclear.
Does that change your thoughts on I guess over the next five to 10 year plan on building more maybe its the small modular nuclear or others.
Hey, Ed too.
It's Bob look I think the legislation as it start is really beneficial for the existing nuclear owners in the in our case the customers who would receive any any benefits from production tax credits associated with the existing nuclear embedded.
Within the new legislation I think longer term, we have been pretty stalwarts in saying that.
We as a country need to identify new clean energy resources that can be dispatched bowling carbon free to enable the transition to a carbon light economy or a carbon neutral economy, and I think new nuclear has to play a role in that I don't think its a this decade role certainly not for XL energy, but.
We're active at NII, we are active in the development process.
We've been working diligently with new scale as they've been trying to stand up there and get permission to build their first new nuclear reactor. So.
We watch very closely we are engaged in the dialogue I think it's a <unk>.
Next decade or beyond.
Issue and opportunity for us as a company.
Got it.
What I expect that thank you. Thank you both.
Alright, moving on we'll take our next question from David Arcaro with Morgan Stanley . Please go ahead.
Hey, good morning, Thanks, so much for taking my question.
Hey, David.
Hey.
Let's see and a quick question on the Colorado, <unk> pathway and the potential upside opportunity. There is that something that could crystallize basically after you get the rfps done you get a sense of where the projects are coming into place there that we get a sense of whether that could be added to the plan at some point in time.
'twenty three.
Yes.
David Yes, Youre exactly right once we kind of see where these projects are located in call. It the mix of projects will be able to come out at the same time with what we expect to call. The network upgrades voltage support that we need.
And also the commission did conditionally approve that call it that lag that $250 million leg.
Basically a radio.
We fully expect projects to show up there too. So we will give be able to give a color both on the call. It a renewable opportunity at that point in time, plus the trend and the incremental transmission investments we expect to make.
Which which will be probably if we play this solid probably middle of next year once we see the final portfolio.
Yes that makes sense okay. Thanks.
And then on the Minnesota rate case, I was wondering when does the window kind of open for potential settlement and any any thoughts on prospects of settlement given.
The focus areas and what you've proposed here.
Yes, Thanks, David It's Bob.
Those are the cases are progressing through the regulatory process.
I think when I look at the cases, they reflect a lot of the investment categories and alignment with our policy and stakeholders. So we don't expect any contentious issues. There typically we don't start talking settlement with Counterparties until after their testimonies then receive so on the gas case that's expected it.
The end of August and in the.
And the electric case, that's early October so probably more ripe for discussions in late Q3 or into Q4.
Okay, great sounds good thanks, so much.
Yes.
Our next question will come from Sophie Karp with Keybanc. Please go ahead.
Hi, Good morning, and thank you for taking my question.
Thanks, Doug for your questions.
Finally, following up on the.
Yeah on the lifestyle alright.
Ron.
The 1.2 is sort of.
Little hanging fruit here, where you have right away.
Basically shovel ready if you will and then the same question for.
Your competitive opportunities in that.
And that could potentially come behind it.
Yes so.
Look I think we're in early innings in terms of the developments of those lines I think some of them are conclude into existing substations, but most of the lines themselves are going to be greenfield.
And require local siting and permitting processes.
I think that this is an area of strength and execution for the company as we do this we did the Capex 2020 plans up in the upper Midwest, We did the MVP plans and so we've got a really strong team and a good partnership with the grid North partners group that we think that from an execution perspective. This is something that's right in our <unk>.
Wheelhouse.
Just add Sophie is but we'll go through the regulatory processes statistics certificate of need processes with our commissions and so that will take a year year and a half to get through those processes, where we will determine the final work on final routing and permanent everything.
Right right.
How much of that is already baked into your long term capital plan.
Can you remind us.
So we had some a little bit in our five year plan, but when we look at it right. These in service dates are expected to be called by 2030. So we will start youll start to see as we roll forward. Our five year plan is that spend will kind of be baked in that new five year plan that we roll forward is how youll see it in October and we will include it in.
In our 10 year plan as we bring roll forward, our 10 year plan too.
We did have some of it captured in the second five years of our forecast so not the first not materially for the first five years, but in the second.
Got it thank you.
Another question I had is on that.
Alright, so kind of keen nine them low nines right across the board in your territory.
Let's keep going up.
Is that kind of thing.
At this level and I can appreciate the fact that they were thinking on the way down right.
Hey.
Being higher in.
Being made that think that structurally be higher in the next decade.
Do you see this trend.
We've written a little bit and maybe picking up ways that trade it much.
From transmission to Macquarie.
So hopefully thats a good question I think the way we look at it we kind of look at some recent data points and Theres a couple of data points in Minnesota one was.
ROE decision late last year for Otter tail at a nine four rate and then there is a and we have a $9 600, Minnesota electric business right now and then in the gas side Centerpoint is a settlement pending in Minnesota with a 93, 9% and our Minnesota gas ROE is 904 so.
I think as we see inflationary pressures interest rates go up that they were sticking to go down but I think we do have below the national average authorized ROE across most of our jurisdictions and we'd like to work to get those closer to the National average. We do think we are very good operator, where policy aligned with our commitment.
<unk> policy aligned with our states in terms of helping them achieve their de carbonization goals and hopefully that can be reflective in some of the outcomes we've seen in the future.
Great. Thank you that's helpful.
And next we'll take a question from Paul Patterson with Glenn <unk> Associates. Please go ahead.
Yes.
Hey, good morning.
Hey, Paul.
So just.
I know I can completely relate to the 700 pages.
Late night experience.
But you mentioned affordability could be.
Potentially beneficial.
From the Bill.
Do you have any sense as to.
What the potential rate impact might be from Google.
So.
<unk>.
Longer term when we look at it and this is some of the analysis, we havent done a very long term model we model it.
A while ago and we were looking at the earlier provisions we saw about a 1% benefit to our customers over the long term on a CAGR basis.
As we thought about and that was a lot of caveat there in terms of what type of renewable deployment, we have but we are looking at an inflationary radar target is long term customer bill impacts of inflation and this helped us drive below that.
So I think that's kind of the magnitude now certainly will depend on the nuclear PTC and some of the nuances in terms of hydrogen, but I think longer term we see.
Significant benefit to that in.
I would just add that.
We're really well positioned for this type of long term credit extension because I don't believe there is an IOU that has a better combination of wind and solar in our backyard than we do and so our commissions approved our plans without any extension of tax credits now to have this on top of it.
It's us in a really good position to deliver on this clean energy transition for our customers, even more affordably and now our view is long term customer bills matter.
And for us to make this transition more affordably for our customers is great and we look forward to working through with our commissions.
I'll just add on to what Brian said.
Agree with him completely I think the opportunity here is really interesting because if we can make the energy transition more cost effective that becomes a economic driver engine businesses are attracted to places that have clean energy and low cost clean energy and reliable clean energy when I think about.
<unk>.
Transition to clean fuels and green hydrogen with the production capability that we have in the wind and the solar resources, we've got in and adjacent to our footprint.
It should make the production of clean fuels more cost effective in the middle of the country in the Midwest and in the southwest than other parts and you've seen that as we've located wind and solar across the country they've been concentrated in those areas and we would expect those continued economic development drivers to drive our business long term.
Yeah, and then just to clarify.
About 1% and Thats on a CAGR basis. So as you accumulate that over time it becomes very significant for our customers. So like I said optimistic. This this gets passed what our plans are built on it but if it does we look forward to.
Driving forward our plans at Investor.
Awesome.
And then there was a local article.
About curtailments of wind production in southern Minnesota.
I know you guys are pretty well positioned to what happened but.
You guys are also very large footprint in Europe .
Very familiar with with the situation around you do you see any.
Are there any issues potentially that you're seeing but also more significantly perhaps are there any.
Situations that youre seeing with specific wind farms.
And curtailment occurring with other parties.
Senior jurisdiction I mean, the story sounds pretty significant in terms of how some counties were being impacted from tax revenue perspective.
In the southern part of Minnesota. So I just was wondering if you had any.
Any insight on that.
Yes look I think that we have seen curtailment in southwestern Minnesota was the source of a significant amount of wind build out over the last decade for us and for the region and so one of the great things about the <unk> program is that it is identifying the need and locating trans.
Mission resources to move.
Zero cost resource to the load in the short term, it's led to curtailment and.
And congestion in the longer term, we think that frees up and is able to get to the load and deliver.
I don't think that its concentrated in any one entity.
In terms of the owners of the farms.
But I think it's out there and as we think about.
The impact for our customers some of that is driven by.
The desire and the need for clean energy curtailments built into a lot of our plans and we recognize that sometimes.
Sometimes that has implications for local communities on property taxes, our wind production payments.
But I think it's certainly manageable and something we are in conversations with our stakeholders well.
Awesome. Thanks, so much guys.
Okay.
Yes.
We have no additional questions. So I'll turn the call back to CFO , Brian Van Abel for closing remarks.
Thank you all for participating in our earnings call. This morning, please contact our Investor relations team with any follow up questions.
Okay.
And this does conclude today's call. We thank you again for your participation you may now disconnect.
Yeah.