Q2 2022 NRG Energy Inc Earnings Call
Yeah.
Okay.
Okay.
Good day, and thank you for standing by welcome.
Welcome to the NRG, Inc, second quarter 2022 earnings call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising your hand is right.
Please be advised that today's conference is being recorded.
Now I'd like to hand, the call over to today's speaker Ken.
Kevin Cole head of Investor Relations. Please go ahead.
Thank you Felicia and good morning.
And welcome to NRG Energy's second quarter 2022 earnings call. This morning's call will be 45 minutes in length and is being broadcast live over the phone or via webcast, which can be located in the investors section of our website at www Dot NRG dot com under presentations and webcast.
Please note that today's discussion may contain forward looking statements, which are based on assumptions that we believe to be reasonable as of this stage actual results may differ materially.
Everyone to review the Safe Harbor in today's presentation as well as the risk factors in our SEC filings.
It takes no obligation to update these statements as a result of future events, except as required by law. In addition, we will refer to both GAAP and non-GAAP financial measures for information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. Please refer to today's presentation.
I'll now turn the call over to Mauricio Gutierrez, Nrg's, President and CEO .
Thank you, Kevin and good morning, everyone and thank you for your interest in NRG.
I'm joined this morning by Albert before now our Chief Financial Officer also on the call and available for questions. We have at least have a feeling that our federal home.
<unk> had a business and market operations and create small sir ahead of competitive markets and policy.
I'd like to start with three key takeaways of today's presentation on slide four.
We are maintaining our financial guidance ranges as we continue to navigate through volatile market conditions and are increasing our capital available for allocation by $140 million.
We continue to make good progress in achieving our strategic growth priorities, particularly on direct energy integration.
And finally, our share repurchase program continuous.
With approximately $600 million.
And remaining capacity to be executed this year.
Moving to the second quarter financial and operational results on slide five.
We deliver $358 million of adjusted EBITDA for the second quarter, 70% of the difference compared to last year are items that we've previously identified including asset sales and transitory items.
The remaining variance is primarily driven by the forced outage of our 610 megawatts coal unit at the <unk> facility.
This outage began on May nine and is expected to be back for summer operation next year.
Unit is cover by both business interruption and property damage insurance.
I am pleased to report that we once again achieved top decile safety performance for the quarter and that we publish our 12 sustainability report.
Testament to our commitment to transparency and accountability.
We also continued to realize strong customer retention, which I will discuss in more detail shortly.
We continue to make progress on our five key strategic priorities.
Integrate direct energy.
Perfect our integrated platform by better matching retail with supply.
Grow our core electricity and natural gas businesses.
Integrate adjacent products or services that will allow us to expand margins and terms from our customers.
And returned capital to our shareholders.
I'd like to give you a quick update on those priorities.
The direct energy integration is going well and we are on track to achieve our run rate synergies of $300 million by the end of 2023.
In late June .
We received <unk> securitization proceeds related to winter storm jewelry in line with our expectations.
We have continued to make progress on our mitigation efforts.
And now expect an additional $80 million in recovery, bringing our total mitigation efforts to 70% of the original impact.
We continue to optimize our supply portfolio through monetization of their Watson generation facility in California.
And retirements of wholesale assets in PJM.
We have also expanded our capital light PPA strategy.
To focus on energy storage and quick start and natural gas generation.
I expect PPA market conditions to improve into year end, especially if the proposed inflation reduction act is passed.
Our retail brands continued to perform well with strong customer account retention metrics, and then unmatched ability to generate insights on price elasticity.
We remained focus on expanding our product offerings and improving our digital customer experience.
I am proud that one of our flagship brands rely on energy was also recognized as the best electricity company in Houston, our hometown.
Last quarter I spoke about <unk>.
Our resilience and battery storage business.
And the significant opportunity it represents given growing grid stability and extreme weather events.
During the quarter, we launched a marketing campaign in one of its core markets.
California.
To increase awareness for the product and brand with very strong results.
As a result of these target that campaign web traffic increased 400%.
And the average order increased by almost a third.
We continue to make progress in other areas, but remain keenly focused on pacing our investments as we navigate the ongoing supply chain constraints and recessionary environment.
Finally.
We are maintaining our financial guidance range, but due to the impact of the W. A parish unit outage. We're currently trade me trending towards the bottom end.
We have been focused on taking steps like one time cost savings and incremental direct energy synergies to improve our results.
Although the Alberto will provide details on these and the additional capital available for allocation.
Turning to slide six for our market reviewing Texas.
<unk> experienced record heat during the quarter.
32% above the 10 year average.
Resulting in record peak demand.
However, real time power prices work mix versus what the forward indicated driven primarily by the performance of renewable energy on any given day.
As we look into the summer we.
We expect prices to remain volatile and highly dependent on renewable performance.
Turning to the right hand side of the slide <unk>.
Beginning with retail.
We saw strong performance through the quarter with retention, 5% ahead of expectations and customer count increasing one 2%.
We also extended the term length of customer offers which enables Neil management and improves margin predictability.
This occurred while consumers grapple with inflation.
Only further demonstrating the resilience of our retail brands and pricing strategy.
On supply.
Unplanned outage at <unk> parish unit eight impacted performance.
While there is a an earnings recognition delayed even the timeline to receive business interruption insurance proceeds in.
Insurance is an effective tool to mitigate these risks.
Beyond that.
We have seen strong operational performance from our fleet due to our expanded spring outage maintenance plan and opportunistic maintenance outages.
The best positions our fleet to perform through this extreme and extended summer conditions.
Finally.
Our balanced hedging strategy that uses both.
All generation and third party contracts.
Further de risked our portfolio through optimizing operational versus counterparty risk, which are important attributes through current market conditions.
Now moving to slide seven.
Just like we did last quarter on <unk>.
Today I want to focus on one area of growth that is complementary to our core offerings and presents an exciting opportunity.
Heating and cooling or HVAC maintenance and installation.
<unk> is our home services HVAC company, which was acquired as part of direct energy.
It represents a complementary offering to our existing core products as HVAC systems used the most energy of any single home appliance.
Responsible for up to 50% of a home energy consumption.
The HVAC industry with a total U S addressable market of $100 billion.
Is highly fragmented and traditionally served by local providers with limited scope and reach.
In contrast.
<unk> operates in nine states, which represent a $10 billion serviceable market, including Texas.
They hold leadership positions in both Houston and Dallas.
With a single recognizable brand and scale that is unmatched.
Combined with our existing consumer services platform.
Can grow both within our existing customer base.
And through expansion into new territories, creating a significant and compelling opportunity.
In the last three years.
<unk> has grown revenues, 11% per year to $450 million with gross margins of 30% or more.
The revenues come from residential new construction services and maintenance as well as direct to consumer home replacement.
Our early insights suggest that there is significant growth potential in direct to consumer home replacement.
Given energy efficiency initiatives.
And extreme weather that shortens the lifetime of HVAC systems.
The ability to leverage our existing consumer base and sales channels to augment the direct to consumers growth, while cross selling with our electricity and gas customers.
Precisely the type of value opportunity that increases margin and retention that we highlighted during our investor day.
I look forward to providing you updates on their progress as we integrate the solutions closer with our core energy offerings.
So with that I will pass it over to Alberto for the financial review.
Thank you Mauricio.
Now turn to slide nine for a review of the second quarter results.
<unk> delivered $358 million and adjusted EBITDA.
<unk> hundred $98 million decrease versus prior year to year, excluding the impact of winter Storm Europe .
As you can see in the waterfall chart. This decrease is primarily due to the previously guided impact of the four eight gigawatt quasi of asset sales completed in December .
PJM asset retirement in the second quarter.
New York capacity revenue and narrowly settlement of demand response revenue in the second quarter of 2021.
In addition, not included in our expectation, where the extended unplanned outage at banish UNITAID and the modest amount of growth of expenses.
From a regional perspective, adjusted EBITDA in Texas declined to $61 million compared to the second quarter of last year.
Mauricio said in his scripted remarks semi claim Hurley, we record checking temperatures beginning in may.
In both market prices and build volume.
On may 9th a fire at the parish facility caused an extended outage at unity and a 10 day outage at unit.
We are therefore forced to replace the power with the combination of our of our more.
Pensive out of the manager nourishment hedges and some opportunistic market purchase.
Which together impacted EBITDA by an estimated $70 million.
In addition, the benefit normally associated to higher billed volumes with our home and business customers.
Effect impact of additional outages on our remaining Texas.
And higher maintenance maintenance expenses recorded in the quarter.
Finally, we were able to fully offset the previously disclosed the transitory items, which includes the limestone outage and the ancillary costs for a total negative $61 million.
With some non recurring items of $39 million.
Which include an earlier than anticipated partial insurance reimbursement of the business interruption expenses and limestone unit, one and be at least estimate of normalized <unk>.
Turning on the West East West and other segment the year over year decline was primarily driven by the $63 million EBITDA reduction from asset divestiture every time.
As well as by the declining demand response revenue associated with the Natalie settlement in the second quarter of 2021.
Next compared to Texas, where the impact of core constraints was minimal generation. Indeed continues to be impacted by call availability for the $23 million impact during the quarter.
After accounting for these previously guided items, the remaining 63 million negative variance versus 2021.
Was driven by a combination of lower power volumes reduced profitability at.
Watson facility, which was monetized during the quarter.
And in prior year timing related to C&I customer edge monetization, which will be recovered through the second half of this year as the associated to retain hedges settled and the balance by by higher supply costs.
Next I will provide you a brief update regarding our progress in achieving direct energy savings and mitigating Wintuk score beauty in fact.
Direct energy incremental synergies from the beginning of the year reached $39 million.
We remain on track to achieve our full year target of $50 million in 2022.
And $225 million since the acquisition of direct language.
We also expect to improve the recovery of our 2021 losses from weaker stability.
You may recall that at the end of the last year, we estimated that the final impact net of the quality was going to be $380 million. During Q2, we were able to make progress in several areas, where we have remaining gross losses and therefore, we have improved our estimates by $80 million.
Bringing the next impact to 300.
Now, let's move to the full year guidance.
As Mary mentioned, we are maintaining our guidance range, but based on the recent events, we are trending to the bottom of the guidance ranges.
The full year impact from the parish unit outage based on current prices is estimated to is estimated to be a little over $200 million.
The fleet carrying both business interruption insurance for lost earnings in.
Property damage insurance to cover the cost of returning the unit to full operation.
Given that the outage started started at the beginning of the second quarter impact to reflect the deductible period.
As of today, we are assuming that business interruption insurance proceeds will not be collected until 2023.
Over the property damages proceeds will more closely match the expenses and the maintenance capex deployed through throughout the time needed to restore the unit.
Additionally for free cash flow before growth, we continue to closely manage the impact to working capital from higher commodity prices, primarily in our natural gas business.
To be clear as for the transitory items disclosed at the end of last year, we have taken and we will continue continue to take steps aimed to improve our position.
In particular, we have identified a series of opportunities in managing our cost and operating expenses, including early realization of synergies and one time reduction of expense.
And as you know we manage our business for cash. So we have also incorporated action to improve cash generation and mitigate our networking capital increases including crude through the.
Recall that your property damage proceeds and noncore asset sales.
We look forward to providing you additional equity throughout the year.
I will turn now to slide 10 for a brief update of our 2022 capital allocation.
Moving left to right the midpoint of our free cash flow before growth guidance remains unchanged at <unk> $290 million.
Next we received $689 million of securitization proceeds from aircraft related to weakness.
In late June .
Net of the Bill credits issued for C&I customer brings the total net inflow for 2022 to 599 million.
I've mentioned before we expect to receive an incremental $80 million of cash proceeds from some additional recovery.
Focusing next unchanged from last quarter since may of this year, we have repurchased.
An additional $143 million of shares.
Our $1 billion repurchase program, leaving their above robust $595 million to be completed by year end.
Next we have reduced the amount of expected either investment by the net cash proceeds of the sale of our interest in the Watson Husky.
$459 million.
Lastly, given the additional annuity recovery and asset sales net cash proceeds we have increased capital available for our location by 141.
As you see in the far right column. The total remaining remaining capital available for allocation in these 456 million of which we have earmarked approximately 100 million to fund initial project in our $2 billion growth plan.
Including the initiatives that are being loans to accelerate the growth of our goal zero.
The remaining <unk> that increased <unk> 6 million will be allocated later in the year as we earn the cash.
Victor Youll notice.
Thank you Alberto.
I wanted to provide some closing thoughts on slide 13.
During the quarter, we continued to make progress on all our strategic priorities.
As we have done in the past over the remainder of 2022.
Our team will work tirelessly to improve our results.
I am confident we have the right platform and have the right strategy to deliver strong and predictable earnings and create significant shareholder value.
So with that I want to thank you for your time and interest in NRG Felicia, We're now ready to open the line for questions.
Thank you at this time, we will conduct a question and answer session.
As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced please standby, while we compile the Q&A roster.
Okay.
Okay.
Okay.
The first question comes from Julien Dumoulin Smith.
Of Bank of America.
Scott.
Hey, good morning, Jami, Thanks for the time.
Hey, guys.
Good morning Julien.
Okay.
Excellent.
I'd love to hear.
A strategy question for you today as you think about this year, how do you think about the desire to continue with the generation portfolio have the latest events.
Q towards saying, maybe we should reevaluate the integrated strategy and the pivot towards retail or actually are you even more convinced in this strategy and could we see you engaging in more contracting and maybe to that and could you also maybe does that with some of the kind of thing.
Around PPA strategy, you guys have been undertaking in prior period are you thinking about doubling down on that considering the higher energy price environment today.
Sure well, Jamie let me start with that.
The retail engine I mean, as you can see on the numbers idiosyncratically incredibly strong.
Customers are in this environment I described them as a flight to safety.
Obviously, Alicia can talk a little bit more about that.
But when I think about the supply strategy, you really need to think about okay. What is the retail load that I need for <unk> and what is the supply that better serves that retail at all always spots revamp now we have been in a path, where we don't want to rely completely on our own.
<unk> to supply our retail we want to make sure that we have a supply strategy that is diversified and that was the big lesson learned from winter Storm Europe , we don't want to have a single point of failure. So what you should expect in the future is a combination of our own generation.
Obviously, the direct energy synergies, we feel very comfortable with the number but we are now looking at optimizing that and working on it.
Obviously, we need to make.
Issuance proceeds and whether we can accelerate some of these insurance proceeds and Alberto already mentioned some of that and look I mean, that's not completely dependent on malls, but that doesn't mean that we're going to work hard to accelerate that.
And then.
So I would say that Soma Soma some of them are some of our <unk> I also want to mention that we run this business for cash.
And.
I think the sell of Watson. It is an example of ores being completely focused in monetizing the value of our portfolio and if we can accelerate some of the divestitures of noncore assets, we're going to continue to move out to bring cash.
In this year to make up for.
The cost of the unit eight insurance so outage. So there is a number of things that we're doing shar.
To make up for a for the.
Lost earnings of the year to date outage.
Perfect that helps there and then just lastly, you guys mentioned.
Retention is exceeding your internal targets just is this split fairly evenly between east, Texas or is it skewed and then just curious how east has held up with a heavier C&I book. Thanks.
Sure I'll turn it over to Lisa for kind of East, Texas split, but I will tell you that the I mean, the retail engine is really really strong and as I said.
In the previous answer.
We're seeing a flight to safety and our brands are that flight to safety. So we're seeing really really strong numbers, but at least sort of can you provide additional detail. Yes. Thanks for the question Shar, we are seeing really strong retention rates, 5% above expectation.
Driven by our unmatched analytics and care capabilities.
We also have.
Significant amount of customer and community and loyalty and of course, the compelling products.
Our questions versus east pretty consistent maybe a slight advantage in Texas.
Not dramatic.
And we're also seeing retention better than expected from the <unk> acquisition, So really the strength of our platform right now, especially with the volatility.
The Cogs.
I'm, so pleased with how resilient our platform is Joseph and frankly the strength.
Our channel or both.
And marketing channels to pivot.
Within regions and between regions.
Yes, it really is a strong platform.
Perfect.
Super helpful. Very good color. This morning, guys. Thanks.
Thank you Sir.
Yeah.
Our next question.
Michael <unk> of Goldman Sachs.
Hey, guys. Thank you for taking my question and congrats for being able to keep the guidance range during a tough operational time, given the parish outage.
Terry.
Good morning.
Good morning, guys.
The history of taxes.
Shows that there are power price in heat rate blowouts that happened in an unusual time.
Go back in time, you own the reliant business because of what I thought was in April .
Heat rate blowout that happen 12, 14 years ago or so.
Just curious with parish, winning a baseload units out through the second quarter next year.
Just talk about how much gas fire generation you have under contract for next year, meaning whether it's a hedge from a gas fired unit or whether it's a PPA or a toll from a gas fired unit. We've seen some periods recently where were some of the renewable units were running fine and then all of a sudden due to cloud cover.
Shut down and that caused the price blowout happened a couple of Sundays ago in Texas. So just trying to think about how much how much backup you've got from third party false hope for the period wind parishes al.
Yes, Michael So I think in the last.
Last earnings I provided.
An indication of our hedged for 2023, and if you recall that one again.
The expected low that we that we have for 2023 half comes from third party megawatts about half comps from our economic generation and then we have an economic generation that is maintained as insurance our own on economic generation. So.
There is a it's just a lot of combination in that third party megawatts.
We have some tolling agreements with with our combined cycle plants, we have some heat rate auctions with peak areas, we actually have some heat rate options with.
Or are actually out of the money call options from the financial market. So there is a combination of tools that we have to be able to manage weather variability.
In any given year now.
As you mentioned I mean, the second quarter was pretty extreme we always plan for some weather variability, but what we actually saw in the spring in July is record breaking.
Our heat in Texas, and while we manage for some variability is incredibly expensive to manage for all weather variability now now perhaps one of the lessons learned here is as we think about 2023 and given that we have.
A lot of time to plan for how to set up the portfolio for that year I expect that we're going to buy a little bit more insurance.
For extreme weather than than in the past and.
And I think that.
I mean, that's that's going to be the prudent thing to do given given what we're seeing in Texas I mean.
The peak the record peak was broken by I think 5000 megawatts I mean, they all peak was 75000 Avenue peak is close to 80000 megawatts I mean European seven 8% increase I mean, that's pretty significant and I think we need to recognize that perhaps we're going to see greater.
Weather extreme weather events, and we need to plan for it.
Well in Texas is showing massive robust demand growth.
Way above the National average part of that is just residential new connect people move in there.
That is.
Pet Chem industrial demand part of it is probably crypto mining.
There are all kinds of buckets at our cotton with the PUC to discussing the impact of that.
If we enter a sustained period, where Texas load peak load growth is in the 3% to 5% range for a number of years would that alter your power procurement strategy and your asset ownership strategy at all meaning if demand comes in for a multiyear period way above what we saw in the last three to five years.
Yes, absolutely so things on that if demand is growing at 3% to 4%, but yes, that's really good for us because if we maintain our market share that means we are growing our retail business and that's that's really really good and that's what we want to see now obviously, we need to make sure that we keep up our supply strategy with with not incremental.
Demand in the way, we're going to do it it is one.
Sure.
I mentioned I think there is an opportunity for us to bring new megawatts in in some of our current sites and those would be primarily gas, peaking and in energy storage and we are as I mentioned, we already have at least one project that is have been fully permitted and shovel ready.
And now it's just a matter of what's the right partner to bring into the table. We have another one that is why behind it and is in the process of getting permitted.
And I'm sure that.
And I will tell you the team is already looking at other opportunities where we can bring.
Storage there so.
So I think youre going to see us participate on that.
New Dispatcher Bowl quick start.
Generation opportunity.
In our sites, but not necessarily with our capital and we will be the off taker. In addition to that we're going to continue bringing new wind and solar and energy storage as we have done already.
With our current PPA. So so we're looking at these in kind of these two these two ways bring new megawatts that are cero variable cost in the form of wind solar and perhaps storage.
And bringing contract also with new gas speaking responsible generation in <unk>.
So I'm not sure if I can give you that level of specificity in peso at what price you sketch because we look at it on a portfolio basis.
But I mean this is something that will start to you know.
Sure.
Outline as as these build progresses and if passed then we will need to have that.
That level of clarity to ensure that we can.
To support and justify the incremental PTC, but that's something to be worked on.
Okay, and then going back to the hedging of your retail book So.
So one thing that sort of surprised me is that I mean.
You when you hedge your retail book, you always have all kinds of Delta hedges and options in order to protect you against.
No no unplanned outages also spikes in usage, so I would have thought.
Paresh.
It was not a big component of the supplies back to start with given call supply constrained and then you should have had those additional hedges so I'm actually.
Surprised that the impact is vague.
And then.
Lastly, when.
When you show your drivers for the year I don't see any comments about any uptick and bad debt expense and we see it at thank.
Our regulated utilities, just I was just wondering how you manage that.
Yes, Angie so as you mentioned, we always plan for some forced outages and some weather variability I think the impact of the areas that the outage was in a pretty large coal units close to 600 megawatts with prices where they are.
They were in the foreign market for starting in May that unit is pretty deep in the money. So as you mentioned I mean, the coal conservation that we had was really in the shoulder months and perhaps in.
Some of the shoulder hours, but in the peak hours. This unit was suspected to be there to help manage.
On supply our LOE.
The unique situation here is.
Bulk happened at the same time, we had a we had a forced outage on our large called unit exactly at the time, when we had record breaking.
Heath and.
That really goes outside of kind of planning.
Planning.
Area that we that we looked at so this was the combination of these two very extreme.
Conditions in its not like we don't plan for it but we don't plan.
The intersection of bulk of them exactly as we're leading into the summer now.
Some of our on economic generation and it was very effective but visa on economic generation that we have some of the hospital.
Our speakers they come at a really high cost given where the natural gas price is today, so if you're at $89 gas and Youre deploying 12 13 feet right.
Vikas.
The cost of that is pretty high although it caps off from buying of the cap for example, but it's still a pretty high compared to where the.
The cost of generation needs for our coal plant.
Yes, Andrew regarding your question regarding related to bad debt.
Expenses, we are not seeing any pickup in the bad debt expenses and considered now the level of receivables is much higher.
Given the level of gas prices and power. So when we see percentages percentages absolutely in line and even we look at the late payment increase in slot and it's pretty pretty normal, particularly Texas. So for the time being we are not seeing any sign of it.
In relation with the quality of our receivables portfolio.
Great. Thank you.
Thank you Andy.
Our next question comes from Steve Fleishman of Wolfe Research.
Yes, hi, good morning, everyone.
Good morning, Steve.
Hey, Mauricio.
You mentioned.
Increasing the maintenance capex on the fleet and the $200 million how much higher.
No.
Well I mean, we're a value yes, Steve I mean, we're going to evaluate this but obviously easier plants are a lot more profitable than they were let's say the last five.
Five six years on there are low gas environment.
They can support incremental maintenance capex and not only they can support is advisable right because right now every megawatt counts before we've got a lot more megawatts that were marginal and we don't necessarily needed to call that.
<unk>.
Maximize the output of the plant now, we really need to maximize the output of the plant and look the capacity factors. The amount of time that these plants are going to run are going to be more than they have been in the past and we need to take that into consideration. So I would say that there will be an increase I don't think you'd see.
A step up change from the maintenance Capex bodies, you know, we need to right size it to the amount.
Of run hours that the unit is going to have number one or number two for the profitability of the plant right. So you know every megawatt counts and I want to make sure that we have it available when we need them.
Okay great.
On the parish outage and the insurance.
So.
I assume youre not youre, not assuming youre going to book any business interruption.
Proceeds this year it'll.
It will be next year.
Thanks Alberto.
Yes, it is correct.
Never base.
Based also on the experience with limestone, we're trying to accelerate that.
Property damage.
Insurance proceeds.
The linked it basically through the expenses and the Capex that we're going to deploy.
This year. So that's that's what data will we see more opportunity.
Okay. So just high level do you have the 200 million plus cost issue.
The next year, there will be some cost that continues in the first half.
But then you'll have them.
<unk>.
For business interruption.
Should offset.
It should be more meaningful than the cost in 2018.
Correct.
Yeah Okay.
And then.
Just a high level.
I know somebody asked about the impact of irony for for the nuclear plant, but just maybe more broadly could you.
There's a lot of provisions in this bill in different ways. It could impact the business. So just could you just talk to anything else that particularly you are particularly focused on.
Sure.
I mean, the two big ones for US what is the impact on wind and solar renewable energy and what's the impact of nuclear right. So.
On wind and solar.
We can see.
A reengagement and an acceleration of renewable development, which we have benefited from and our team is ready to start the conversation with developers again.
And then on the nuclear side, we're going to be looking at.
What is the benefit that we can have with our SPP facility.
Like every other nuclear generated within the country I am sure that there is starting to do the math to figure it out.
How do we benefit from these production tax credits. So I would say those are the two the two big areas, where we are focused on and that can impact our business.
Okay. Thank you.
Thank you Steve.
Ladies and gentlemen, thank you for your participation in today's conference. This concludes today's program I will now turn the call back over to him.
Yes.
Thank you Felicia and think with you shortly thank you and I look forward to speaking with you shortly thank you.
Okay.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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