Q2 2023 Entergy Corporation Earnings Call

Hello. Good morning, My name is Jeremy and I will be your conference operator today at this time I would like to welcome everyone to introduce second quarter 'twenty to 'twenty three earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session if you'd like to ask a question.

During this time simply press star followed by the number one on your telephone keypad, if you'd like to withdraw your question again press star and the number one thank you.

Now I'd like to turn the call over to Bill either Vice President of Investor Relations for Entergy Corporation.

Yeah.

Good morning, and thank you for joining US we will begin today with comments from <unk>, Chairman and CEO drew marsh in the Kimberley <unk>, our CFO will review results.

In an effort to accommodate everyone who asked questions. We request that each person ask no more than two questions in today's call management will make certain forward looking statements actual results could differ materially from those forward looking statements due to a number of factors, which are set forth in our earnings release, our slide presentation and our SEC.

Please.

Entergy 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 Jerry.

Thank you Bill.

Thank you Bill and good morning, everyone.

Today, we're reporting second quarter adjusted earnings per share of $1 84, our progress through the first half of the year keeps us firmly on track to achieve 2023 results in line with our guidance and we remain well positioned to achieve our long term, 6% to 8% growth outlooks.

Creating sustainable value for our customers employees communities and owners is that the center of everything we do.

I'll start today with our work to meet our customers' demands.

We're investing in resiliency and reliability and working to expand our clean energy footprint.

This work helps our current customers meet their goals, while also attracting new customers to entergy surface area.

To that in our power delivery team continues to upgrade legacy assets to new more robust wind and flooding standards through new construction projects storm restoration and asset renewal.

For example in the second quarter, our new deployments included roughly 600 transmission structures.

<unk> 8000 distribution Poles.

More than 200 miles of new distribution conductor and seven new substation.

In addition, these improvements will support more than 120 megawatts of gross.

Safe and effective nuclear operations are also important for our stakeholders. Our nuclear units continue to provide clean reliable baseload power to our customers.

Two of our plants Riverbend and Ano unit two recently completed successful refueling outages, which included major projects to support long term operational excellence.

Overall, our nuclear plants are running very well outside of refueling outages, our fleet achieved a 99% capability factor for the first half of 2023.

Yeah.

While our customers demand more reliability and clean energy from us are unique and sizable long term industrial sales growth opportunity continues to improve.

Growing businesses support our communities provide employment opportunities and help with affordability being.

Heron advantages of our geographic footprint remains solidly intact.

We continue to see evidence of these bands is through recent project announcements in our service area for example, Exxon.

Exxonmobil announced a transformative seats U S project that will capture transport and store up to 800000 metric tons of Cotwo per year from Nucor iron plant and convent, Louisiana.

The project is expected to start up in 2026.

With the recently announced acquisition of Danbury.

Exxon Mobil's actions clearly highlight the opportunities around C. C U S.

Our region.

Also shell catalysts and technologies announced its final investment decision on the $120 million expansion project in Port Allen, Louisiana.

The facility is already the largest refining catalyst plant in the world.

Spansion will create even more manufacturing capacity.

These are just a couple of projects that have the potential to increase and extend our long term growth rate.

We're currently updating our annual industrial sales forecast and we are counting for recent trends.

Many of you have noted there has been some weakness in national industrial output indicators like the highest in the manufacturing index.

Despite this we are seeing strength in our Gulf region.

In the quarter, our total industrial sales declined which had been expected due to higher cogeneration sales last year.

Adjusting for Cogent, our industrial sales were up about 1%.

First some highlights.

Sales to small industrial customers, which are typically more exposed to broader U S. Economic factors grew nearly 90 gigawatt hours over last year.

Sales to large new and expanding industrial customers grew nearly 100 gigawatt hours over last year.

As we look forward a few large industrial projects have adjusted their in service dates from 2024 to 2025, which could lower our 2020 for industrial growth expectation, but not to a degree that affects our outlooks.

Overall, our pipeline for projects continues to grow.

Supported by favorable commodity spreads and the Iowa legislation.

Early indications show demand at 2025, and beyond shaping up even stronger than our last forecast.

As we typically do we'll provide an update to our industrial growth expectations and E.

Hi.

To support this growth and to help our customers meet their sustainability needs, we are expanding our clean energy portfolio.

Through 2026, we plan to add nearly 6000 megawatts of renewable capacity.

2400 of those megawatts are currently in construction permitting regulatory review or negotiations.

Approximately 30% of the 2400 megawatts will be owned by Entergy.

Last quarter I mentioned that we are continuing to work on herself build capabilities.

Our recent self build submissions have been extremely competitive in the RFP process.

However, we have been limited by a smaller development pipeline.

I am pleased to report that we are making progress on that front and going forward I would expect to introduce to achieve at least 50% ownership through our competitive rfps.

Moving to regulatory items.

We continue to make meaningful progress on important regulatory matters, which support the credit required to meet customers' growing needs and drive improved customer outcomes.

Beginning with Mississippi, The public Service Commission approved Entergy Mississippi's Formula rate plan settlement, providing for recovery substantially all costs.

Meanwhile, Entergy, Louisiana, Entergy, New Orleans, and Entergy, Arkansas, each filed their annual Formula Formula rate plans.

New rates for Louisiana, and New Orleans are expected to be effective in September .

In Arkansas are expected to be effective at the first of next year.

As we've discussed Entergy, Louisiana plans to file a base rate case, this month, including a request for a new three year formula rate plan.

We liked the clarity and certainty than FRP provides which helps us make investments to benefit our customers. However in recent years Entergy Louisiana's earned returns has materially lagged its allowed returns.

We are making significant investments to support customer growth and demand for greater resilience and cleaner energy in Louisiana.

This investment is critical for the state as well as our local communities.

It is important to have an opportunity for fair and timely recovery, which allows us to maintain entergy louisiana's credit and cost effectively source capital to meet customers' expectations.

Yeah.

Turning to Texas.

Entergy, Texas has.

Codes settlement before the commission and.

And we expect a decision at Tomorrow's open meeting.

Interim rates were implemented in June and once the commission makes its decision any change in revenue and depreciation expense will be retroactive to December of last year.

In addition, the Texas Legislative session wrapped up at the end of May and the Governor signed it newbuild into law that are important to Texas customers and communities as well as to Entergy I'll highlight a few.

The Texas Resiliency Act allows utilities to submit a storm resiliency plan to improve customer outcomes.

We expect the commission to complete their initial rulemaking I'm, a 180 days, which sets a deadline to establish a regulatory framework in mid December .

Entergy, Texas will then file its resilience plan shortly after the rulemaking is complete.

And the commission will have 180 days to review and act on the filing.

Based on this entergy, Texas currently expect to have clarity on its resilience plan near the middle of next year.

The distribution cost recovery factor legislation allows for two annual filings, which provide more timely recovery of the significant distribution investment that we plan to make in Texas to support customer growth and reliability.

And the expedited transmission CCM will reduce the time for commission approval by half to approximately six months.

This will enable entergy, Texas to complete projects to support customer growth and resilience sooner and with lower risk.

Turning to federal matters in May we received an initial decision on the unit power sales agreement complaint against CRE.

The ALJ ruled against the complainants on several issues, but recommended approximately $250 million in refunds.

Which is mostly interest primarily associated with the accumulated deferred tax issues going as far back as $19 96.

We disagree with the ALJ its conclusions on Adi tea, and we continue to believe that series positions on the law and the facts are correct and then its actions were prudent and taken for the benefit of customers.

Siri filed its brief an exception in July and the next step is a ruling from FERC.

There is not a statutory deadline for FERC to issue an order.

More broadly on theory I would note that we are still awaiting FERC responds to our compliance filing related to the December 23rd order on the sale leaseback and uncertain tax position case.

There is not a procedural deadline, we expect to see this clarification soon and we expect FERC to affirm that no additional refunds or do <unk>.

<unk> response will provide clarity and will be an important step towards resolving the broader set of series litigation.

Okay.

Our communities are one of our key stakeholders and actively supporting them as an important part of our strategy.

The civic 50, an initiative of points of light named Entergy, a top 50, most community minded company and this year's leader for the utility sector.

Another example of our community commitment is our beat the heat campaign.

In May we launched a series of measures to help low income and senior customers save on their utility bills during hot summer months.

$4 million in contributions will support thousands of vulnerable customers through bill payment assistance Weatherization events band distribution and energy efficiency kits.

I'm also proud that Forbes magazine named Entergy as one of America's best employers for diversity.

They recognize our commitment to fostering a diverse and inclusive workplace where employees feel valued and respected.

Such confirmation is critical as we compete for talent from all corners of our community to best serve the diverse interest of our 3 million customers.

Together, our employees are doing a great job of living our vision statement of we power life by meeting today's challenges and ensuring that we will create value for our stakeholders well into the future.

As you can see continue to make progress on our strategy to deliver for all our key stakeholders.

We are laser focused on meeting our customer demands through operational excellence resilience and clean energy investment.

Meanwhile, we continue to maintain our financial discipline and work closely with our stakeholders to ensure we have the financial strength to drive economic development in our communities.

Successful executing across these dimensions will keep us on track to deliver steady predictable earnings and dividend growth and move us toward our goal to be the premier utility.

I'll now turn the call over to Kimberly.

Review, our financial results for the quarter.

Thank you Gary good morning, everyone.

As Jay mentioned our results this quarter keep us firmly on track and we are affirming our guidance and our longer term outlook and remain focus on delivering steady predictable results.

Slide three shows a high level view of the quarter.

Our adjusted earnings per share was $1 84, 6% higher than last year.

We continue to see benefits from our customer centric investments, including regulatory actions, along with higher depreciation and taxes other than income taxes and interest expense.

We also saw a significant reduction in other O&M.

A portion of which was for items that do not have a bottom line impact.

Slide four details variances by line item.

Regulatory actions support our investment program to benefit customers.

There were a few updates in the quarter.

Entergy, Mississippi put its latest FRP rates into effect in April .

In June Entergy, Texas implemented interim rates from its rate case settlement.

The settlement is credit positive and largely neutral to earnings as the rate case included now higher depreciation rates.

Rather weather was 17 cents lower than last year.

While weather was warmer than normal this year, you may recall that temperatures last year were significantly above average.

Excluding the effects of weather retail sales growth for the quarter was down 9% the.

The residential segment had a slightly positive contribution from customer growth.

Partially offset by lower usage per customer.

Commercial and industrial sales were lower.

For industrial lower sales to cogent customers was the primary driver as cogent sales return to more normal levels. This year.

This decline was partially offset by growth from small industrials and new and expansion large industrial customers.

O&M was also a driver.

We had lower spending for nuclear and non nuclear generation, primarily due to reduced scope of work.

Other drivers included higher rebates associated with our prescription drug program.

Our Mysore cost and lower pension expense, which were each about five cents.

MISO costs were lower as a result of myself changing the ancillary services market structure.

Because entergy as a load serving entity that owns generation. This change is largely neutral to earnings.

Operating cash flows summarized on slide five was 511 million higher than last year.

The increase was primarily due to lower payments for fuel and purchase power as natural gas prices were much higher than last year.

Moving to credit and liquidity on slide six our net liquidity remained strong at four 7 billion, which includes $411 million of storm.

We expect to utilize a portion of the storm, that's granted that Louisiana and Mississippi for the storms earlier this year.

We remain on track for our credit outlooks, including achieving Moody's 14% at the strategy that metric by year end.

During the quarter, both S&P and Moody's downgraded theory.

The ratings change our style from series pending litigation.

Left unchecked. This could ultimately result in higher costs for customers.

These actions also highlight the cost of Syria uncertainty and show that resolution would benefit multiple stakeholders.

It is our goal to resolve all series litigation in an expeditious manner.

Slide seven summarizes our progress against our equity needs through 2024.

We utilized the ATM program this quarter when market conditions were supportive.

Selling forward approximately 468000 shares.

Around 80 million remains in our equity plan through 2024.

As shown on slide eight we are affirming our guidance range and our longer term adjusted EPS outlook.

We've updated a few of our key assumptions that I'd like to highlight.

We saw warmer than normal temperatures in the quarter, which contributed seven to EPS.

Our plan included conservative assumptions in revenue and we've now updated our estimates to account for several small favorable items across our operating companies.

We've updated our weather adjusted sales growth estimates and now expect volume impacts on earnings per share to be neutral for the year.

This is largely due to lower than expected residential sales in the back half of the year.

We can tell you you can see overall health in the residential space with increasing customer counts and declining usage per customer both of which help affordability.

We expect other O&M to be 85 cents lower than 2022 and for the full year.

This includes approximately 15 cents for the reduction in <unk> cost that is offset by lower revenues.

Excluding that the full year O&M change would be closer to 70.

Your line with our previous estimate.

Our spending plans may adjust based on weather or other factors between now and the end of the year as we continue to use our flex spending to deliver steady predictable results.

You may recall that the remaining EWC ownership interest in two non nuclear generation facilities is included in parent and other.

Power prices have been lower than planned due to low natural gas prices, which is driving the expected margin in those operations lower.

Okay.

Taking all of this into consideration we are tracking to the midpoint of 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.

Okay.

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 I'll pause for just a moment to compile the Q&A roster.

Our first question comes from the line of Shar Perez. Please go ahead.

Hi, Good morning, it's actually Constantine here for sure thanks for taking the questions.

Good morning.

So starting at the <unk>, the <unk> turnover or are there any actionable changes in relationship or alignment that you have implemented and do you feel that <unk>.

In general comfortable with the current regulatory construct or would you look to add anything beyond new resiliency framework kind of going forward.

Hey, good morning, it's rod.

I think Mike the best thing the best answer to your question is.

It was really the proof of concept the decisions that <unk> made to date, we've gotten support as you recall after the after the election at the end of 2022, we.

We got the support for our.

Securitization, we got the support for.

R R.

Yes.

Lake Charles.

Transmission system, we got support for our our gas business.

Right decisions all from the New Commission and so I don't believe that that we have a relationship issue. In fact, we continue to work collaboratively with this new Commission, we acknowledge that the addition of the newest commissioner.

Lewis has created an opportunity for us to to engage differently again educating.

A new commissioner on.

Historic relationships between the company.

And its stakeholders not just the relationship between the commissioner.

And the company, but also other commissioner and the customer impacts I know that you are reacting your question a reaction in some respects from some of the comments that have come out of.

Individual commissioners and our our reaction has been consistent as long as we maintain our focus on ensuring positive customer outcomes, whether its resiliency.

Whether it's renewables.

Clean energy and certainly affordability, we expect to be a lot continue to be aligned with.

With the PSC and so we're moving forward.

As drew alluded to with our regulatory calendars and to file a rate case.

And FRP as well as a strong renewables portfolio. In addition to continuing to fuel the growth for the state and we expect the commission to be.

Supported by the company's positions, we will have a lot of debate along the way, but we will continue to work constructively with them.

And constantly as part of your question.

Whether there is we think theres some continued support for formula rate plans within L. PSC.

Yeah.

Right.

Just anything that you feel like you need incremental to narrow some of those are kind of earned ROE gaps.

Well from that vantage point, that's that's let's say a.

Okay.

Less of a change it's entergy interest in ensuring that the both whatever the regulatory mechanism is we're using both the filing of the rate cases as well as the.

The planned the planned FRP renewal to align.

To align those recovery mechanisms with our capital plan.

We're not necessarily.

Disclosing any specific.

Tweak at this point to the FRP.

Because we haven't even made the filing yet, but we expect the commission to be receptive to the case were making for why an FRP is in the best interest of customers long term, we're filing the rate case, because it was a condition of the settlement during our last FRP renewal, but we expect.

We continue to make the case to the commission for why the <unk> and.

And certain adjustments to it would be beneficial to our stakeholders long term.

Excellent that's great color and maybe shifting to the other kind of regulatory item CRE would be operational prudence complain kind of reaching a point of settlement and passenger lie and rehearing is still pending are you embedding any range of outcomes in the current financial plans just in terms of cash or financing drag and maybe any.

Guidance on kind of capping the potential liability in any form from.

From the last complaint.

Sure. Thanks for the question as it relates to CRE and our financial plan as you know we recorded the reserve last year equal to the Mississippi settlement.

Hum applied broadly across and that is reflected in our financial plan and then we.

Being that we are able to continue to work with the parties.

To resolve the litigation.

Grand Golf is an important asset to our fleet and continues to operate and contributing to our results.

And I'll add that in.

In terms of capping the exposure.

ALJ order from May.

Regarding the ups.

It is.

While it had as I mentioned that had been about $250 million of requested refunds. It did crude off quite a bit of additional liability and so you do see that the.

Mount a liability continues to come in.

As we move forward in the process.

But we're still working through all of that and certainly that's the.

The amount that we believe we are at right now is what we have reflected on our books.

Perfect. Thank you and I'll jump back in queue.

Thank you.

Alright, perfect and our next question comes from the line of Jeremy Tonet Jeremy. Please go ahead.

Hi, good morning.

Hey.

Just wanted to stick with Louisiana here, a bit and I think you touched on it a little bit but wanted to see if you might be able expand more.

And how do you think that Louisiana resiliency process could unfold wants us the staff engineered.

Report is filed this month any sense from the commission on how the commission would like to handle it and if this could be kind of roll together the resiliency the RFP.

Rate case to all get tied together.

I totally understand your question and I am my.

Hesitation is only that I don't want to get ahead of the regulatory process, but I think your instincts are aligned once we get.

Initial feedback from the staff on the filing.

I think it puts us in a position to evaluate.

And the timing.

Round.

Around how we might pursue potential settlement discussions our objective obviously is to is to.

Remove as much uncertainty as we can and whenever we have the opportunity to avoid going through.

<unk> expense of litigating issues, where theres an opportunity to find common ground.

Part of our expectation going in is to first make the compliance filings.

As expected by the commission, but the moment, we do we're trying to find a path to do so.

Settlement that isn't different than I think your instincts about how we think about between now and the end of the year assessing the likelihood of aligning around both the resiliency filing.

<unk> filing.

Concert with discussions around.

The rate case, FRP or spinal that's our ultimate objective, but we have to make the filing and get the feedback we have to make the filing of the rate case, but to your point get the feedback from.

The PSC staff.

On the resiliency filing and take it from there, but great great point.

Okay.

Got it got it that makes sense that's helpful.

And sticking with Louisiana here, our stakeholder communications.

So what does the Hereabout windows.

Outages, there were some system glitches and communication to consumers.

With maybe not where it could be just wondering efforts on this side to I guess improve.

Customer response, and kind of address some of those local stakeholder concerns there.

Yes, Jeremy this drew we have folks all over that issue.

Over 100 people Squirrelled away in a large conference room in Texas working on this but.

We feel like we have a good plan going forward from where we are certainly.

The sum of the.

Performance of some of our systems. After some upgrades that were intended to improve things last.

Earlier or late in the spring that didn't work out as intended and so we worked through all that we have a good plan going forward and we expect to be back on track.

For any future storms.

Got it that's helpful. There and then just a last one if I could I was wondering if you might be able to unpack a little bit more.

<unk> to debt and kind of that trajectory over the balance of the year and hitting the goals that you want to hit there just any incremental color would be appreciated.

Sure Jeremy really two key factors there one is closing the Louisiana securitization, which we did in the first quarter and as we go through the year, you'll see the debt associated with previously carrying that roll off and the second is around the recovery of the higher deferred fuel balances that occurred last year with them.

Higher gas prices and higher volumes. We saw you can see that the deferred fuel balances are down back to what I would consider more normal levels until.

Those debt levels roll off those two items will significantly help us and then Jos managing through normal operations as.

As we go through the end of the year puts us on target to be at or about that 14%.

That's helpful I'll leave it there thanks.

Alright, Thanks, Darren Thanks, Jeremy.

Our next question comes from the line of David Arcaro, David. Please go ahead.

Hey, good morning, Thanks for taking my questions.

Morning.

Let's see I think drew you alluded to some initiatives that you're pursuing on the renewable development side of things to make the organization more competitive in some of these rfps into.

Give yourself a better a fighting chance to do some more self build I was just wondering if you could elaborate on what types of initiatives that you've pursued there to lower costs and and build the pipeline it sounded like.

Yeah. Thanks, David Thats a good question, we have been working on building the capability in the development.

Space as I mentioned.

And we have been actually successful for the projects that we have been able to put forward and competing in our rfps.

I think we're making good progress in terms of what does it take to be competitive on the solar RFP front. The challenge. We've had is we just haven't had a large pipeline of projects to support so.

Many of the projects that are even in the 30% that I mentioned earlier arch build own transfer projects, where a developer is constructing it in and moving it over to us at.

Just before the completion of a cfd.

What I'm, referring to when I say, we're making progress as we are finding some success in building up our portfolio. So.

We have somewhere in the neighborhood of about four gigawatts of development pipeline.

We have put forward at this point.

I wouldn't say that it's all ready to go in R&D, we're still building out some of those projects but.

It is a much larger portfolio and we are expecting to add maybe another half gigawatt to that by the end of the year.

And then beyond that point, we would expect it to continue to grow and that should be very strong given where we have been competitively that should be very strong in the rfps going forward. So that's what we've been seeing.

And.

That's that's what we're focused on.

And the only thing that I'll add to <unk> comment is that part of the.

Sort of.

B.

Declogging, if you will that pipeline.

<unk> been securing additional sites for renewables development, including our generation sites as well as the transmission Interconnects that are all part of the development process and that's adding.

Two our improved competitive Mr truths corner.

Got it thanks, that's helpful color.

And then let's see curious similar topic, but in Texas.

One of your peer utilities in the state has had challenges just getting a few renewables.

<unk> over the finish line there I was just wondering how that's affecting your strategy in the state of Texas has that maybe impacting the outstanding Rfps.

That you've got.

Yeah, and the short answer is that it's not impacting one it's not a surprise to us because our point of view.

It's consistent with and has been consistent with the PUC T.

We understand the significance of reliability first.

We do believe because of the interest of our customers that the renewable resources.

Should be an important part.

Our supply portfolio, but we recognize that.

The commission's position has been rather consistent in Texas.

It's notable.

That our position outside of ERCOT, and our service territory and the success we've had in our Ccs has given.

Our view given us.

A better vantage point to discuss the attributes of renewables with the commission, perhaps in a different light because we're not having the same ah reliability issues in.

In our service territory as Dave expressed concerns about inside of.

Inside of ERCOT, we are paying close attention, though too, particularly in Texas.

The.

The commission were to have a change in policy.

Around renewables, we see a tremendous opportunity.

With hydrogen.

At Ccs.

Four four other other capital investment opportunities, but.

We think our position is strong our customers, particularly given all the growth we have in Texas.

Requesting.

The attributes of renewables <unk> clean energy and we're well positioned regardless of what direction. The commission I might take a policy perspective in Texas to help them meet those needs.

Okay, great. Thank you I appreciate it.

Thank you.

Alright, and our next question comes from the line of Paul from BARDA. Paul. Please go ahead.

Hi, Good morning, Thank you Tim.

Paul.

Sure I think you mentioned that although some projects might be shifting around the timing a little bit your net seeing stronger industrial growth in that 2025 <unk>.

25, plus just could you could give a little more color on that and kind of what that means for the plan and this is something you could roll into the plan, but the EI refresh.

Yes, so it would be expected to be part of the EI refreshes and we can give you some more details for sure then.

Characterize the movement from 24 to 25 is the.

Normal.

Roll around.

These large industrial projects that are billions of dollars and they're hard to get done.

That's nothing that we haven't seen before.

And so that is why I wouldn't say that was expected I would say, we're not surprised and that is.

So that part is not really new news as we look forward beyond 2024.

We are continuing to see a very robust.

Industrial sales pipeline lots of interest from a lot of different parties.

Particularly around the clean energy I mentioned.

A particular Ccs projects from Exxonmobil.

In my remarks, but there are other projects like that out there there are projects like that related to.

Two hydrogen.

So we are.

I think well positioned to take advantage of all of that and we'll give you more details whenever we get to.

<unk>.

Yeah.

Okay, Great understood understood and then just pivoting to Texas following up on a couple of questions that were asked is there a good way to think about what the earnings improvement opportunity is after the legislation whether it's.

Bernd <unk> basis points additional capital spending opportunities if there's some way to think.

Thank you.

Sure Paul.

Are you referencing out of the Texas legislation, specifically was that your question.

Correct, yes, the legislation plural.

Yes, there were a couple of a number of favorable things out of the legislation obviously the resilience filing gives us the pack.

To file our resilience plan and seek recovery of that in a way that helps.

Provide our system higher resilience.

Support our customers the D C R R.

Change from an annual filing to a biannual filing that certainly gives us an opportunity to.

Improve the or decrease the lag associated with an investment.

But from an overall perspective, we are still we havent changed our outlooks with really with regards to that but certainly.

A better way to recover investments and then the third item is around compensation and that one really for us on executive compensation is around.

Recovery in our rate case, it's not really effective to us, but it but it certainly is helpful from a residential perspective.

Okay and is there a way to.

You kind of quantify like an ROE improvement or something from all of that.

Yes, I think it's too early to do that at this point.

Certainly they are a positive tailwind from our perspective, when we think about our overall outlook, but nothing changes on that regard.

Okay, great. Thanks.

Okay.

Okay.

Brian It looks like right now that is all of our questions. If there are no more questions. I will go ahead and turn it back over to Mr. Andrew.

Thank you Jeremy and thanks to everyone for participating this morning, our quarterly report on Form 10-Q is due to the SEC on August nine and provides more details and disclosures about our financial statements.

That occurred 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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