Q1 2023 Entergy Corporation Earnings Call
Good morning, My name is Regina and I will be your conference operator today at this time I would like to welcome everyone to Entergy first quarter 'twenty twenty-three earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to.
Ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the call over to Bill Abler, Vice President of Investor Relations for Entergy Corporation.
Good morning, and thank you for joining US we will begin today with comments from <unk>, Chairman and CEO drew Marsh and then Kimberly <unk>. Our CFO will review results in an effort to accommodate everyone who has questions. We request that each person ask no more than two questions in today's call management will make certain forward looking statement.
Actual results could differ materially from these forward looking statements due to a number of factors, which are set forth in our earnings release, our slide presentation, and our SEC filings.
<unk> does not assume any obligation to update these forward looking statements.
Management will also discuss non-GAAP financial information reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the Investor Relations section of our website and now I will turn the call over to drew.
Thank you Bill and good morning, everyone.
We had a very productive start to the year with meaningful progress on activities that support our near and long term objectives today.
Today, we are reporting first quarter adjusted earnings per share of $1 14.
Mild weather affected these results, but we are prepared for this variability.
As we've shown over the last several years, our flex program helps us achieve steady predictable results.
We are on track for 2023 results in line with our guidance and we remain well positioned to achieve our long term, 6% to 8% growth outlooks.
Our focus on creating sustainable value for our four key stakeholders customers employees communities and owners is the foundation of our strategy.
It's at the center of everything we do.
Recently, just capital and CNBC named Entergy to the just 100 list.
Which highlights companies that are doing the right thing for all their stakeholders, we're honored because our inclusion on this list is an acknowledgment that we are living up to our commitments.
Serving all our stakeholders starts with understanding what our customers need from us to meet those needs, we are investing to improve reliability and resilience and significantly expand our clean energy footprint.
Will not only help our current customers become more successful, but will also attract new customers.
So far this year, we've installed or replaced over 400 transmission structures with new resilient designs, including critical river crossing lines.
We also completed transmission interconnections for two new entergy owned renewable resources.
One example of a transmission project that will improve resilience and reliability is a recently completed projects in southwest, Louisiana, where we upgraded transmission lines rated to withstand 150 mile per hour winds replace older pools with resilient steel structures.
Stalled new higher capacity power lines and added automated switching capability to improve reliability.
In South East, Louisiana, and in Texas, We were building, new substation and distribution power lines that will support residential and business growth in those areas and reduced stress on existing substations.
In addition, we installed the replaced more than 5000 would distribution poles with newer more resilient designs collectively.
Collectively our team continues to focus on operational excellence to deliver stakeholder outcomes across all facets of our business.
Okay.
We also continue to be a critical local partner supporting strong economic development working to bring new businesses, new jobs and new tax base to the communities we serve.
As you know, we expect significant industrial sales growth over the next several years.
While the broader market is contemplating recession concerns.
Our region's growth story remains intact.
Key strategic value drivers continue to be supported.
The LNG ammonia and refining sectors are generally short on supply and the deficit will likely not be meaningfully affected by a recession.
Other sectors, such as ethylene PVC methanol and steel may see some market pullback, but the Gulf coast has the lowest cost producers. So plant in our service area should be the last to be curtailed.
Meanwhile, the passage of the IRA is accelerating development in the clean energy transition space.
We're seeing very strong interest in our service area, which has the potential to increase and extend our 6% long term industrial sales growth rate as incentive rules are finalized and turn into enhanced projects.
One example of a potential project fueled by the IRA is.
Is the St Charles Clean fuels project.
Which is exploring whether to build a $4 6 billion dollar blue ammonia production plant in Saint Rose, Louisiana.
The new facility would produce up to 8000 metric tons per day in blue of ammonia and <unk>.
You can rely on carbon capture technology to sequestered more than 90% of its carbon dioxide emissions.
Our underlying 6% industrial growth rate does not rely on these IRA tailwind.
And we continue to see a lot of activity in the traditional industrial segments, we serve.
There are some noteworthy developments in recent months.
Including Golden Triangle polymers, which held its ground breaking for a state of the art polyethylene plant in Orange County, Texas.
In addition, Sempra announced that the company reached its financial investment decision and issued the final notice to proceed on phase one of its port Arthur LNG project.
A big part of meeting our customer sustainability needs is growing or clean energy footprint and we continue to make progress on that objective.
On Monday, we held our official groundbreaking for the Orange County Advanced power station in Texas hosting Governor Abbott, four or five PUC commissioners and other state and local officials.
That facility will ensure that we have modern and reliable infrastructure to support existing customers and our rapidly growing customer base and our southeast Texas region.
We will utilize turbine technology and our plant layout that can support dual fuel capability with hydrogen in the future.
The Optionality helps ensure the plant long term viability and creates improved energy security and operational flexibility for our customers.
We also continue to make progress on our objective to expand our renewables capacity to meet customer needs.
Since our last call Entergy, Arkansas, and Louisiana concluded evaluations of their 2022 renewable rfps.
Participation was robust and we are in negotiations for approximately 2300 megawatts.
Turning to affordability it remains a core tenet in our pursuit of greater sustainability and reliability for customers.
To help manage bill effects are customer centric investments, we continue to aggressively pursue customer sales growth.
Disciplined cost management and federal support to offset costs.
Natural gas prices have come down significantly.
And coupled with a mild winter that's further good news for customer bills.
Our latest estimates for residential build trajectories, including updated gas curves have improved for.
For the system, we are now seeing a three year annual growth rate of less than 1% from 2022 through 2025.
That's roughly half the level, we are expecting a few months ago.
In the quarter.
We've made regulatory meaningful regulatory progress against our objectives.
Entergy, Texas has reached settlement on all material issues with parties in its base rate case, and we expect to file the settlement with the PUC to you in the next few weeks.
Entergy, Mississippi filed its annual Formula rate plan in March.
Mississippis efficient mechanism supports continued customer centric investment and supports our financial outlooks.
Interim rates became effective on April one.
Yeah.
Entergy, Louisiana its formula rate plan will expire after this year's filing.
We are evaluating options to renew the current FRP.
We're also preparing for a potential rate case filing which will be submitted this summer.
As we've laid out entergy, Louisiana is investing significant capital to support our customers' growth and their demands for greater resilience and clean energy.
This growth is critical for Louisiana and its local communities.
We need to ensure that our rate construct provide the opportunity for fair and timely recovery, which will allow us to effectively source of capital while maintaining utility credits.
Either an FRP renewal or rate case patent should allow enough time for rates to be effective in September 2024, which should keep us on our normal cadence.
We file a rate case, we will request a new FRP, starting the 2025 filing here.
Yeah.
Entergy, Louisiana also filed a request to streamline the procurement and approval processes for up to three gigawatts of solar resources.
This is in addition to the nearly two and a half gigawatts from previous or ongoing rfps.
If the new processes are approved we can bring additional renewables to construction faster and at a lower cost and risk materially improving our ability to meet our customers' accelerating demands for clean energy.
For our accelerated resilience and grid hardening filings.
Entergy, Louisiana received a procedural schedule in its docket.
Next up is the Commission's engineering reporting testimony to be filed in August .
Hearings are scheduled in January of next year. However, there is the potential to receive a decision this year through a settlement with parties and that remains a possibility with broad stakeholder alignment on the need for more resilience investments.
And a separate but important docket, the <unk> staff outlined a process and an evaluation procedure for utilities in Louisiana to follow.
Which creates a solid roadmap for entergy Louisiana's resilience investments.
Entergy, New Orleans filed its updated resilience plan with the city Council.
The $1 billion 10 year plan reflects significant stakeholder input.
Like Louisiana, New Orleans is requesting approval for the first five years of the program and.
And we are targeting a decision from the Kansas The council by year end.
In Texas, the electric infrastructure Resiliency Act has been proposed in both the state House and Senate.
The Bill if passed would require the commission to act within 180 days of utilities filing our resiliency plan.
Certain prudently incurred costs would be recovered through a variety of mechanisms.
We will continue to work with our regulators across all aspects of our business to create value for our customers and other key stakeholders.
And you can find additional details on our regulatory proceedings in the appendix of our webcast presentation.
In March our service area experienced tornadoes in Arkansas and Mississippi.
The damage to our system included distribution Poles wires spans transformers and one substation.
We replace damaged equipment with newer more resilient assets rated two our latest standards.
The restoration was completed quickly and safely with zero injuries and for that I am extremely grateful to our teams.
In addition to restoration, we responded quickly to provide community support.
Entergy shareholders committed $150000 to the American Red Cross to provide shelter food water mental health counseling and other services to households impacted by the tornadoes.
In addition.
More than 150, Entergy employees came into the affected region and volunteered their time by assisting with cleanup, providing meals organizing supply dries and staffing information booth to once again prove our employees unfaltering commitment to our customers and communities when they need it most.
Okay.
Before concluding I would like to note that entergy, Mississippi is celebrating its 100th anniversary.
That's a century of serving its customers and communities.
To commemorate this milestone entergy, Mississippi donated $100000 to extra table, Mississippi based food bank to combat food insecurity and Mississippi.
$1000 for every year of operations.
In addition, entergy volunteers pack to 2500 meal kits.
This is the first event of a multi phased program that will ultimately provide 100000 meals.
Giving back to communities through philanthropy, and volunteerism and advocacy is integral to entergy lending.
<unk> statement of we power life.
We've had a productive start to 2023, we're focused on successfully delivering value for our key stakeholders and we will continue to successfully achieve the milestones that keep us on track to deliver steady predictable earnings and dividend growth.
To do this we are working to improve operational and regulatory outcomes support our customers industrial growth and economic development in our region.
Invest in renewable clean energy and resilience acceleration to support our customers' demands.
And execute with financial discipline to strengthen our balance sheet and become more competitive.
I'll now turn the call over to Kimberley, who will review our financial results for the quarter.
Thank you Gary good morning, everyone our.
Our first quarter adjusted earnings per share was $1 14.
Results included very mild weather, which reduced earnings by an estimated 23.
We incorporate conservative assumptions into our planning process and have a portfolio of flex levers to mitigate the impacts.
Fundamentals of our utility growth remains strong and despite the first quarter weather, we remain squarely on track to achieve our financial objectives for 2023.
Before I review quarterly results I'd like to highlight a couple of items.
This quarter's results included the effects of storm securitization at Entergy, Louisiana.
<unk> hundred $76 million of benefits for customers.
These items were considered adjustments and are excluded from adjusted earnings.
No details are provided in our earnings release.
Second beginning in 2023 as a result of the successful exit from the merchant nuclear business.
<unk> is no longer a reporting segment and any remaining financial activity from that business is now included impairment and other.
Youll see the first quarter variance is laid out on slide four.
The quarter results reflected the effects of investments that are benefiting our customers.
This includes regulatory actions as well as depreciation expense other taxes and interest expense.
Excluding weather retail sales were higher driven by industrial sales growth of 2%.
That growth came largely from new and expansion customers, particularly in the primary metals and petrochemicals industry.
This was partially offset by lower sales to cogent customers as co. Gen sales were particularly strong in 2020.
Slides five and six show key metrics for our largest industrial segments as Jay mentioned these metrics remain very supportive and are consistent with the growth that we're seeing.
They also give us confidence in our industrial sales growth outlook.
Moving to slide seven operating cash flow for the quarter was $960 million $422 million higher than last year.
Higher utility customer receipts, lower non capital storm spending and lower pension contributions were the largest drivers.
The effects of the EWC wind down provided a partial offset.
Credit and liquidity are summarized on slide eight.
During the quarter Entergy, Louisiana received one 5 billion from storm securitization.
This completes our securitizations and.
Entergy, Louisiana plans to reduce long term debt issuances mature.
We have made significant progress on collecting deferred fuel balances, which came down more than $400 million in the quarter.
This continues to improve our credit metrics.
Our net liquidity remained strong at $5 7 billion, including $406 million of storm ex growth.
Looking at slide nine our equity needs are unchanged.
130 million remains through 2024, and we plan to use the ATM program to meet this need.
As shown on slide 10, we are affirming our guidance and longer term adjusted EPS outlooks.
Weather has been a headwind to start the year, but we've also had a few tailwind to our plan.
Our first quarter sales mix resulted in slightly higher margins and we see some favorability in several items that in aggregate are providing meaningful relief.
After taking all of this into consideration we are.
Our flexing O&M by Ken, which keeps us comfortably in our guidance range.
The bottom line is that we have a solid plan with good visibility and we will continue to execute on the deliverables to achieve steady predictable growth.
And now the Entergy team is available to answer questions.
Yeah.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad. Our first question comes from the line of Sharp Raza with Guggenheim Partners. Please go ahead.
Hey, good morning, guys.
Good morning Shar.
Good morning.
So just real quick on financing you guys, obviously have a capex plan through 'twenty five.
Financing is still based on a 24 plan.
When do you sort of anticipate rolling that forward and what can we anticipate in terms of capital allocation, especially in light of the current capital market conditions.
Asset optimization is still an option you guys are kind of looking at.
Thanks, John for that question as it relates to our capital plan as you know we have $16 billion through 23 through 25, and we provided financing for that within which includes that little bit. That's left in 'twenty. Four we have talked about the last time, we talked about 25 with an analyst day, where we gave a number for 2005 and two.
<unk> and I would expect.
As we turn the corner on 24, we would be looking at that financing more specifically as it relates to your asset optimization question. Certainly we don't have anything new here, but as you know Lee would kristine that if it meant that our three basic grading criteria around is it executable doesn't distract and does it.
How are you.
Certainly to the extent that something that that criteria, we would look at it.
Got it and then just on some of your recent solar Rfps and kind of announcement, how has that I guess kind of tracking versus your plan.
We're up to 13 gigs and what portion of the new solar as being sort of deploy to support retirement versus new load and just that initial ownership share versus tpa has always been kind of skewed to contracts do you anticipate that's going to change overtime.
Yes, Shar this is drew.
Has been skewed and.
And and that's not where we want to be frankly. So we are we are working hard to improve our self build capabilities.
And leverage our economies of scale find more financial discipline in the packages that we're putting together.
Those RFP processes, so that we can improve and we do believe that that will happen, but you are right, we havent been hitting the mark.
That's important because it is creating some yeah, it's taking up some of the room on our balance sheet and limiting our operational strategic flexibility in the long term. So we want to make sure that we get up to that number.
And we're still working towards it.
Perfect. That's all I had guys. Thank you so much you soon.
Thanks, John .
Your next question comes from the line of <unk> Chopra with Evercore ISI. Please go ahead.
Hey, good morning team, Thanks for giving me the time.
Two questions both on sort of the resiliency filings.
Maybe first part of that question can you just give us any initial stakeholder feedback that you may have gotten in the Louisiana and New Orleans, the two filings that you've made and second drew in your prepared remarks, you mentioned about this separate docket in Louisiana, and maybe a little bit more color. There do you have to kind of.
Use that docket for securing the approval and Louisiana or just maybe any other color there. Thank you.
Okay.
Good morning, Thanks for the question.
Louisiana.
In terms of stakeholder feedback I think part of the answer is is in the.
The question that you asked the the fact that the staff.
Submitted proposed rulemaking around resiliency filings for all utilities in Louisiana, We view as reflective of a constructive stakeholder engagement strat.
Our strategy for the company over the course of the last six months in Louisiana, because the proposed rulemaking actually puts us in a position.
To be very much aligned given the strategy that we laid out for the commission.
Both in Louisiana, Louisiana, and New Orleans, and so the feedback has been constructive so our expectation is as you think about the procedural schedule that Louisiana laid out their back casting from a January .
2024, a hearing date there.
Their procedural schedule back up from that date to give us an opportunity to perhaps settled with stakeholders to to accelerate.
Agreement around.
Louisiana decision, making on resiliency, so we view that as a net positive New Orleans tracks.
Louisiana in that we have clarity from the city Council on our initial proposal, which was $1 5 billion due that stakeholder engagement process, we've narrowed down the grouping of projects to about $1 billion.
The one five and that.
That 500 billion that didn't make the cut wasn't about.
Wasn't about a lack of agreement on the need for the projects.
Just track on.
On a different path outside of the accelerated resilience. So in both Louisiana and New Orleans, we view the stakeholder engagement feedback.
Being positive and constructive.
That's a procedural schedules in both the PSC and the New Orleans City Council is consistent with our with a financial planner.
Well somebody I appreciate that.
I appreciate it.
This is drew I'd add rod is saying just to just to make sure you caught at the beginning of his comments he actually answered the second part of your question.
Beginning on the second dockets in that second dock it does actually create an ability for us to do the math on how the benefits and the cost should work and specifically allows.
The economics of customer outages to be part of the conversation and so theres a few mechanisms that they create for that but that's an important piece of that framework that the staff establish I'll also thanks drew and ill also add that in.
In New Orleans, as we think about that.
One 5 billion that we initially filed.
And the 1 billion.
Clients filing after the feedback process.
It's roughly two thirds of the proposed Capex and 80% of the customer benefits just going with the 1 billion versus the one five in the accelerated Dr process. So again.
We view the feedback is constructive in both Louisiana and the.
The city of New Orleans today.
I appreciate it guys sounds like solid progress I'll get back in the queue. Thank you.
Your next question comes from the line of Julien Dumoulin Smith with Bank of America. Please go ahead.
Hey, good morning team. Thank you guys very much appreciate it.
Kevin.
Pivoting the theory here.
And the pending complaint is it completely path dependent on FERC or are you able to facilitate progress at FERC in any specific way I just want to come back to that.
Back and forth in the just the procedural elements a little bit more specifically here. If you will and then and then if I can as a follow up are you still having settlement conversations with perhaps any of the parties considering maybe some of the ambiguity is here.
I think the short answer to.
Both of the framing of your question is.
Settlement.
Discussions will be aided by clarity from the FERC.
That we are awaiting with regard to the sale leaseback and the uncertain tax position.
A ruling as you recall from the December December ruling in the procedural.
Order this past February so yes, they are.
Ongoing conversations and settlement on all of the ancillary cases, but clarity around where the FERC sits on those two issues.
We'll go a long way towards setting the path for our.
Our path forward and settlement.
Alright.
Yes go ahead I'm sorry.
No I'm, sorry, and it seems like its path dependent on them right. There is no ability to facilitate progress at FERC.
Or otherwise enable it and in a separate parallel docket as you alluded to a second ago on source.
A fair assessment, just given the positions that certain of the stakeholders have taken.
Around their reaction to the December order clarity from the FERC will will clear the lanes.
For ongoing discussions is also a timing element, where we expect the FERC to act sooner rather than later in order to maintain jurisdiction.
Vis vis the fifth circuit. Another so we're expecting we don't have a date.
We are expecting FERC to act sooner.
To get ahead of what might be the appeals process is left.
Unresolved.
Yes.
Got it excellent and then if you can get right I'm 23, just super quickly on the guidance I know I can't I think you said a second ago about the 'twenty two cents in.
The 10 cents here of O&M, how much further flex is there in the plan to the extent to which obviously other.
Items materialize.
Or if you can elaborate a little bit more on just the components there.
Thanks Julien.
It's early in the year. So we certainly have good line of sight on our ability to manage that through the rest of the year there.
There is some additional puts and takes that we would manage through depending on what happens obviously, if the weather is milder in the summer we would have to work through that as it comes in more normal or hotter then there may be opportunities to flex up for some specifics.
Certainly we talked about last year that in 2022, the higher O&M was tied to higher volumes and we flexed up which helps us to Derisk 'twenty three and we're able to take advantage of some of that here and then we've seen some favorability as you probably common materials around volumes in residential.
Commercial and that May give us continued opportunity throughout the year if that continues to persist.
The other area I would point out as interest expense and we've been able to manage Stratus Tom Patel.
Potential upside there as it relates to timing.
Debt issuances for example.
Excellent. Thank you I appreciate it good luck to the team.
Next question comes from the line of David Arcaro with Morgan Stanley . Please go ahead.
Hi, good morning, Thanks, so much for taking my question.
A little bit of a follow up on on the last question I was curious for the utility O&M.
Targets for the year, you nudge that up to 70 cents in terms of the in terms of the savings, but I was curious it was only about three cents of kind of a help in the first quarter.
Are there any.
Underlying challenges.
You've hit or inflationary pressures or anything like that that make it more.
More difficult to achieve the O&M savings for the year or is it more just kind of a timing issue versus on a year over year comparison.
Thanks, David Youre right for the first quarter, we were down about <unk> <unk>, but our O&M doesn't occur ratably over the year. It is really tied as I said, particularly last year, we ramped up with the higher volumes in second and third quarter.
I would expect to see assuming normal weather and much more.
Spread versus last year in O&M in that second third and fourth quarter.
Okay got you. Thanks, that's helpful.
And then I was just wondering are there any legislative bills in Texas that might be meaningful for your business as we get closer to the end of the session in the state for next month.
Yes, there are a number.
Of items in consideration the one that.
We certainly.
Paying attention to has to do with the resiliency filings.
Not just energy, but other utilities, there's five weeks left so they are the good thing is that it's been progressing it's been progressing nicely.
Significant attribute.
We're looking for.
Coming out of those resiliency filings would be.
The types of precedent that was set in Texas, where when we were making.
Filings in Texas, we were able to take.
Assets that still had useful life out of service and replace them with the newer more modern and in this case more resilient assets and still be able to account.
For those on depreciated asset. So so we are tracking the progress of those various.
Those various pieces of legislation to to ensure that we have the appropriate flexibility with the commission.
Similar to our.
Our resiliency and reliability investments in Texas.
It's moving along stakeholder engagement has been strong and quite active.
Five weeks or so left.
In the session. So we will continue to go at.
Okay, great. Thank you very much.
Again to ask a question press Star one our next question comes from the line of Ross Sandler with UBS. Please go ahead.
Good morning, Good morning, Tim how are you.
Okay.
Just just one one from me around <unk>.
Two from me first one is on on slide 38 sort of following up with Julians question.
So if I kind of just look through what youre showing here I see sort of 10 cents of the O&M and then sort of corporate being down five kind of offsets the <unk>, it's a better sales mix versus.
Versus the 22 cents of weather at 10 cents that sort of offsets and Kim to sort of get into your answer I think what you were saying there is theres more offsets that come to offset the balance of that 12 or maybe some of that's in that slightly favorable impact around other income and lower interest expense.
Just sort of get back to the midpoint or absent further mitigation or you're kind of pointing to the low end of the range for 23 years.
Yeah, Ross I think youre right in that they are small pennies and a number of categories beyond what you went through there. So you are right you have <unk> and O&M.
<unk> got an <unk> parent and other than the weather volume there is about 5% and we saw that mix in the first quarter and then you will see probably not specifically in the side, but just on a throughout.
The balance of the income statement pennies here and there that the balanced the rest out.
Yes.
Ross This is drew so.
While we would certainly can see that 'twenty two brings us lower than the midpoint. It's early in the year and we wouldn't say that that's where we are at this point.
We're just targeting the midpoint and we expect to do better than that by the end of the year.
Got you.
Alright, thank you.
Then.
Just maybe contextualize for me too.
2% industrial growth in the quarter year over year.
Yes.
And some of the prepared remarks, but maybe maybe give us a little bit more contextual adhesion of youre, saying, 6% long term aspiration versus what you're currently seeing.
Yes.
That so we've seen what we talk about the.
The drivers and you have a couple of slides in there about the drivers and as.
As we've said for a number of years now there's a lot of advantages to the Gulf coast.
And that's yes.
Access to global and National markets.
Available energy.
Low energy prices supportive communities available workforce.
All of that has been driving investment domestically towards the Gulf Coast and frankly, our service territory, all the way up the Mississippi River.
Now you've got broken global supply chain as geopolitical uncertainty you've got the tailwind for the IRA before you even get to the IRA we seen a lot of <unk>.
Onshoring.
That's that's basically what our 6% is based on an.
And we see a lot of investment we have the 6% is the probability weighted assessment of where we think it will come out that takes into consideration some projects don't always make the finish line some.
Some projects are a little delayed all that kind of stuff if all of it land that it could be significantly larger than 6%, but thats not our planning assumption at this point.
Then throw in the tailwind of the iron array and it could get bigger.
The rules are still a bit uncertain associated with that particularly around hydrogen and green hydrogen in particular.
But we are seeing an awful lot of interest in.
In the Gulf Coast area to try and take advantage of frankly, the existing infrastructure that's already there.
<unk> infrastructure for example, we have production we have consumption, we have transportation we have storage.
You need to move hydrogen.
And we have a lot of people that are coming to the Gulf coast to try and take advantage of that existing infrastructure. I mean, it is effectively a hydrogen hub already and similarly, we all have we also have C O two pipelines and consumption.
Two production.
And so a carbon capture is going to be the game there is existing infrastructure for that as well.
And so folks are looking at all of that stuff and thinking about how to expand on that opportunity in the long term and so we see a lot of exciting investment opportunities in fact, when we were in Texas on Monday for the groundbreaking for Orange County.
There was a lot of discussion about hydrogen about carbon capture.
With state officials in Texas.
They are excited about it theyre excited about the growth opportunities that they see they're seeing all of it as well and they are very supportive of us having dispatch of coal generation to.
To make sure that we can support.
That potential investment that we believe is on its way so that that's frankly, what we're looking at.
It's very exciting.
And a lot of opportunity ahead of us.
That's great. Thank you and of course, we will watch it.
Thanks.
Plant rules around carbon capture team, but for now ill jump back into queue. Thank you.
Yes.
And our final question will come from the line of Steven Fleishman with Wolfe Research. Please go ahead.
Hi, Thanks, good morning, everyone.
Just wanted to follow up on the question related to CRE, where.
I think Rod you mentioned a timing element.
The FERC needs to act, where they lose jurisdiction could you give us a sense of what that <unk>.
Mine is our limit.
Yes, I don't have the actual procedural schedule in front of me sleep, but its my appreciation.
The fifth circuit process that includes.
Our.
Actually all of our utility jurisdictions.
There is an appeals process.
At the fifth circuit.
That would impact.
FERC ability to provide clarity around that December 23rd decision.
So.
It's our appreciation from from the lawyers that that the FERC has an interest in resolving any lack of clarity.
And avoiding having to create a conflict jurisdictional between the fifth circuit's.
Or to the appeal.
From from the parties and their ability to drive.
Their respective quarter and so that's why you hear the hedge of sooner rather than later, because we don't we don't know exactly what the timeframe is but we recognize that that objectively it as an issue.
Okay.
And then I guess a question for drew just.
Things have quieted down a lot once the securitization was approved in.
Fuel prices have come down and the like could you just give a latest sense of relationships with the Louisiana Commission.
And do they kind of.
Have appreciation of the.
The volatility that was created around stop early in the year.
Yes, any color there would be helpful.
Sure Steve I'll start, but then I'll kick it to Rod who has the subject matter expertise in that particular area, but it is youre right. It is.
A little bit more constructive right now compared to where it was last fall.
I know you have to.
Thinking back last fall, it's easy to forget that we had an election going on they were contested elections. There was a lot of outside money in those elections, which were putting additional energy into the political process and it was coming on the heels of a hot summer with escalating gas prices and that was all just coming to a point and.
Our securitization was with showing up there.
We believe that we still continue to have strong relationships and in Louisiana and.
All levels of the government and including in the Commission and so we endeavor to work closely with them on an ongoing basis.
But that's still we're not taking that for granted that is something that we are very much focused on we know that our commissioners are very focused on customer outcomes.
And so we are as well and so I'll turn it over to rod to talk a little bit.
Steve Your preface was on point.
The fact that gas prices have come down.
And we have aided in providing relief to customers and there has been some some time since the election, that's given us an opportunity to re engage with commissioners around our customer centric strategy.
It's proven very helpful.
You'll note that our most recent engagement with the commission.
It was around five O vote.
On the gas business.
The rate case.
It was a big deal.
Let's see.
Our Lake Charles.
I'll, let Charles power station.
Along with the gas rate case was all five five Boe.
It is not.
Again that the proposed rulemaking.
From the App with regard to our resiliency.
That too was the result of the intentional work in part that we have.
We've done engaging with.
With the commission and our other stakeholders, especially the customer so.
In response to the noise coming out of the elections and the end of the year, we've certainly ramped up.
Our engagement processes to make sure that our commission staff from labor stakeholders are informed.
But also I wanted to be explicit in saying that the the fact that we have a new commissioner in Louisiana for US represents a new commission anytime there is a new addition to the commission it as an opportunity for us to.
Sure.
<unk> reset and Reengage and we've been quite deliberate.
About doing that for the purpose of.
Keeping our alignment.
With the with the commission because we have a.
Note as we have a really aggressive regulatory agenda given all.
The.
The emirate of customer centric opportunities and investments, we have in Louisiana and the growth in Louisiana.
He's going to put a lot of pressure on the commission.
Our engagement process is geared to help make their lives easier as we tried to solve our customers' problems, but we get it.
And it will be ongoing it is not a thing we check the box and say Oh, we have finished the work the stakeholder engagement process is $24 seven 365.
Okay.
Great. Thank you.
We have no further questions at this time, Mr. Abler, I will turn the call back over to you.
Thank you Regina and thanks to everyone for participating this morning, our quarterly report on Form 10-Q is due to the SEC on may 10th and provides more details and disclosures about our financial statements events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected.
In our financial statements in accordance with generally accepted accounting principles.
Also as a reminder, we maintain a web page as part of <unk> Investor Relations website called regulatory and other information, which provides key updates of regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information you should not rely exclusively on this page for all relevant company information.
And this concludes our call. Thank you very much.
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