Q3 2023 FirstEnergy Corp Earnings Call

Greetings and welcome to the first one is G Corp, third quarter 2023 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Speaker 1: Greetings and welcome to the first Sen. C. C. C. C. 2023 earnings conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference...

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Speaker 1: It is now my pleasure to introduce your host, Irene Prasal, Vice President, Invest Relations, and Communications for First-Senor Deports. Thank you. Miss-

It is now my pleasure to introduce your host Irene for Zelle, Vice President Investor Relations and communications for Firstenergy Corp. Thank you Ms. <unk> you may begin.

Speaker 2: Thank you. Good morning, everyone, and welcome to first energy third quarter 2023 earnings review. Our president and chief executive officer Brian Tierney will lead our call today and he'll be joined by John Taylor, our senior vice president and chief financial officer.

Thank you good morning, everyone and welcome to the Firstenergy third quarter 2023 earnings review, our President and Chief Executive Officer, Brian Tierney will lead our call today and he'll be joined by John Taylor, Our senior Vice President and Chief Financial Officer.

Speaker 2: Our earnings release, presentation slides, and related financial information are available on our website at FirstCentersCorp.com.

Our earnings release presentation slides and related financial information are available on our website at Firstenergy Corp Dotcom.

Speaker 2: Today's discussion will include the use of non-GAAP financial measures and forward-looking states.

Today's discussion will include the use of non-GAAP financial measures and forward looking statements.

Speaker 2: factors that could cause a result to differ materially from these statements can be found in our SEC file.

<unk> that could cause our results to differ materially from these statements can be found in our SEC filings.

Speaker 2: The appendix of today's presentation includes supplemental information along with the reconciliation of non-depth financial measures. Now it's my pleasure to turn.

The appendix of today's presentation includes supplemental information along with the reconciliation of non-GAAP financial measures now, it's my pleasure to turn the call over to Brian.

Speaker 3: Thank you Irene and good morning everyone. Today I'll discuss third quarter and year-to-date results, some key developments over the last few months, and our outlook for the future.

Thank you Irene and good morning, everyone.

Today, I'll discuss third quarter and year to date results. Some key developments over the last few months and our outlook for the future.

Speaker 3: For the third quarter, we delivered gap earnings of 74 cents per share versus 58 cents last.

For the third quarter, we delivered GAAP earnings of 74 per share versus 58 cents last year.

Speaker 3: Operating earnings for the third quarter were strong at $0.88 per share at the upper end of our guidance range and compared favorably to $0.79 per share last.

Operating earnings for the third quarter were strong at 88 per share at the upper end of our guidance range and compared favorably to 79 cents per share last year.

Speaker 3: Our financial performance was a result of discipline and operating expenses, as well as execution of a regulated capital investment plan to improve system resiliency and reliability.

Our financial performance was a result of discipline on operating expenses as well as the execution of our regulated capital investment plan to improve system resiliency and reliability.

Speaker 3: Also, as previewed on the second quarter call, we realized a tax benefit in the quarter related to a state tax adjustment which reduced our effective tax rate to 17% for the year-to-date periods.

Also as previewed on our second quarter call, we realized a tax benefit in the quarter related to a state tax adjustment, which reduced our effective tax rate to 17% for the year to date period.

Our service territory continue to experience very mild temperatures impacting earnings by <unk> <unk> per share compared to last year.

Speaker 3: Our service territory continued to experience very mild temperatures impacting earnings by 6 cents per share compared to last

Speaker 3: In addition, quarterly results were impacted by lower pension credit and higher financing costs. Primarily as a result of higher debt balances used to fund our capital investment progress.

In addition, quarterly results were impacted by a lower pension credit and higher financing costs, primarily as a result of higher debt balances used to fund our capital investment program.

Speaker 3: Through strong execution by a Treasury group, our consolidated long-term borrowing rate remained essentially flat.

Through strong execution by our Treasury group, our consolidated long term borrowing rate remained essentially flat.

Speaker 3: For the year-to-date period, we reported gap earnings of $1.66 per share versus $1.42 per share last year.

For the year to date period, we reported GAAP earnings of $1 66 per share versus $1 42 per share last year.

Speaker 3: Operating earnings for the 9-1 period were $1.94 per share compared to $1.91 in 2022.

Operating earnings for the nine month period were $1 94 per share compared to $1 91 in 2022.

As you know we have faced some headwinds in 2023 for both the impact of market conditions to our pension plan and the impact of the extremely mild temperatures on distribution sales.

Speaker 3: As you know, we have faced some headwinds in 2023, from both the impact of market conditions to our pension plan and the impact of the extremely mild temperatures on distribution sales.

Operator: Greetings and welcome to the FirstEnergy Corp. 3rd quarter, 2023 earnings conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker 3: Our employees have risen to these challenges by focusing on the things within our control, allowing us to meet our financial commitments despite these headwinds. Examples include

Our employees have risen to these challenges by focusing on the things within our control, allowing us to meet our financial commitments. Despite these headwinds.

Irene Prezelj: It is now my pleasure to introduce your host, Irene Prezel, Vice President, Investrelations and Communications for FirstEnergy Corp. Thank you, Ms. Prezelj, you may begin. Thank you.

Examples include demonstrating financial discipline.

Speaker 3: Our employees were able to reduce base ONM by over $130 million or 13% year over year by executing on various continuous improvement initiatives.

Our employees were able to reduce base O&M by over $130 million or 13% year over year by executing on various continuous improvement initiatives.

Irene Prezelj: Good morning, everyone, and welcome to FirstEnergy's third quarter, 2023 earnings review. Our President and Chief Executive Officer, Brian Tierney, will lead our call today, and he'll be joined by John Taylor, our Senior Vice President and Chief Financial Officer. Our earnings release, presentation slides, and related financial information are available on our website at FirstEnergyCorp.com. Today's discussion will include the use of non-gaft financial measures and forward-looking statements, factors that could cause our results to differ materially from these statements can be found in our SEC filing. The appendix of today's presentation includes supplemental information along with the reconciliation of non-gaft financial measures.

Speaker 3: Employees executed on our capital plan with CAPEX increasing $410 million a year to date, mostly in transmission, which is 50% ahead of 2022 level.

Employees executed on our capital plan with Capex, increasing $410 million year to date, mostly in transmission, which is 50% ahead of 2022 levels.

Speaker 3: Our Treasury organization executed on a strategic low cost of capital, convertible debt issuance that was used to retire high cost debt and fund our pension.

Our treasury organization executed on our strategic low cost of capital convertible debt issuance that was used to retire high cost debt and fund our pension.

Speaker 3: John will discuss these drivers and others in more detail in just a few minutes.

John will discuss these drivers and others in more detail in just a few minutes.

Speaker 3: The key takeaway is that we've had tremendous operational and financial execution to allow us to meet our target.

The key takeaway is that we've had tremendous operational and financial execution to allow us to meet our targets.

Speaker 3: We intend to build on this performance, continue to change our culture, and improve resiliency and reliability for our customers.

We intend to build on this performance continue to change our culture and improve resiliency and reliability for our customers.

Speaker 3: We are providing a fourth quarter guidance range of 55 to 65 cents per share, which assumes normal weather.

We are providing our fourth quarter guidance range of 55 to 65 per share which assumes normal weather.

Brian Tierney: Now it's my pleasure to turn the call over to Brian. Thank you, Irene, and good morning, everyone. Today, I'll discuss third quarter and year-to-date results, some key developments over the last few months, and our outlook for the future. For the third quarter, we delivered gap earnings of 74 cents per share versus 58 cents last year. Operating earnings for the third quarter were strong at 88 cents per share at the upper end of our guidance range and compared favorably to 79 cents per share last year.

Speaker 3: We are also narrowing our 2023 operating earnings guidance range to $2.49 per share to $2.59 per share from our original range of $2.44 per share to $2.64.

We are also narrowing our 2023 operating earnings guidance range to $2 49 per share to $2 59 per share from our original range of $2 44 per share to $2.64.

Speaker 3: In addition, we are reaffirming our 68% targeted long-term growth rate off of the original midpoint of prior years guidance.

In addition, we are reaffirming our 6% to 8% targeted long term growth rate off of the original midpoint of prior year's guidance.

Brian Tierney: Our financial performance was a result of discipline in operating expenses as well as execution of our regulated capital investment plan to improve system resiliency and reliability. Also, as previewed on the second quarter call, we realized a tax benefit in the quarter related to a state tax adjustment which reduced our effective tax rate to 17% for the territory continued to experience very mild temperatures impacting earnings by six cents per share compared to last year.

Speaker 3: Before I move to key developments in the quarter, I want to address a couple of other topics.

Before I move to key developments in the quarter I wanted to address a couple of other topics.

Speaker 3: First, I want to briefly address the Ohio Organized Crime Investigations Commission, SEPINA.

First I want to briefly address the Ohio organized crime investigations Commission subpoena.

Speaker 3: We have no new material update at this time, and we continue to cooperate with the commission and address their questions.

We have no new material update at this time and we continue to cooperate with the commission and address their questions. Their focus continues to be on activities that were detailed in the deferred prosecution agreement with nothing new.

Speaker 3: Their focus continues to be on activities that were detailed in the Deferred Prosecution Agreement with nothing new.

Speaker 3: First Energy has taken full responsibility for those activities and implemented corrective actions to ensure that those type of activities never happen again.

Firstenergy is taken full responsibility for those activities and implemented correction corrective actions to ensure that those type of activities never happen again.

Brian Tierney: In addition, quarterly results were impacted by a lower pension credit and higher financing costs, primarily as a result of higher debt balances used to fund our capital investment program. Through strong execution by a treasury group, our consolidated long-term borrowing rate remained essentially flat. For the year-to-date period, we reported gap earnings of $1.66 per share versus $1.42 per share last year. Operating earnings for the nine-month period were $1.94 per share compared to $1.91 in 2022.

Speaker 3: We will continue to cooperate with the OOCIC as we focus on executing our strategy and fulfilling our vision to transform first energy into a top performing utility.

We will continue to cooperate with the OCI C. As we focus on executing our strategy and fulfilling our vision to transform firstenergy into a top performing utility.

Speaker 3: The last subject before we move on is that I believe we are uniquely well positioned for the current interest rate environment.

The last subject before we move on is that I believe we are uniquely well positioned for the current interest rate environment.

Speaker 3: We expect to close on the FET transaction early next year and to receive the full proceeds of $3.5 billion in 2024 with the majority funded at close.

We expect to close on the S. E. T transaction early next year and received the full proceeds of $3 $5 billion in 2024 with the majority funded at close.

Speaker 3: In addition, our debt maturities are light over the next couple of years, on average approximating 6% of our total debt outstanding. This positioning supports our role as a financial advisor.

In addition, our debt maturities are light over the next couple of years on average approximating 6% of our total debt outstanding.

Brian Tierney: As you know, we have faced some headwinds in 2023, from both the impact of market conditions to our pension plan and the impact of the extremely mild temperatures on distribution sales. Our employees have risen to these challenges by focusing on the things within our control, allowing us to meet our financial commitments despite these headwinds.

This positioning supports our robust capital plan.

Speaker 3: This year, we're on track for $3.7 billion in capital investments, up from our original plan of $3.4 billion.

This year, we're on track for $3 $7 billion in capital investments up from our original plan of $3 4 billion.

Speaker 3: In 2024 and 2025, our planned capital investments are $3.9 and $4.1 billion respectively.

In 2024, and 2025, our planned capital investments are $3, nine and $4 $1 billion respectively.

Brian Tierney: James. Examples include demonstrating financial discipline. Our employees were able to reduce base ONM by over $130 million or 13% year over year by executing on various continuous improvement initiatives. Employees executed on our capital plan with CAPX increasing $410 million year-to-date, mostly in transmission, which is 50% ahead of 2022 levels. Our Treasury organization executed on a strategic low cost of capital, convertible debt issuance that was used to retire high-cost debt and fund our pension.

Speaker 3: This brings our total capital investments over the three-year period to approximately $12 billion.

This brings our total capital investments over the three year period to approximately $12 billion.

Speaker 3: This capital investment plan is comprised of 47 percent transmission and 51 percent distribution, supporting 7 percent rate-based growth over the period, and we're reviewing additional investments to serve our customers.

This capital investment plan is comprised of 47% transmission and 51% distribution supporting 7% rate base growth over the period.

And we're reviewing additional investments to serve our customers.

Speaker 3: Turning to slide 6, let's review some recent key developments.

Turning to slide six let's review some recent key developments.

Speaker 3: In September , our board declared a quarterly dividend of $0.41 per share, payable December 1st.

In September our board declared a quarterly dividend of 41 cents per share payable December 1st.

Brian Tierney: John will discuss these drivers and others in more detail in just a few minutes. The key takeaway is that we've had tremendous operational and financial execution to allow us to meet our targets. We intend to build on this performance, continue to change our culture, and improve resiliency and reliability for our customers.

Speaker 3: This represents a 5% increase compared to the quarterly payments of $0.39 per share paid since March of 2020.

This represents a 5% increase compared to the quarterly payments of 39 per share paid since March of 2020.

Speaker 3: The increase corresponds with our targeted payout ratio of 60 to 70 percent that was approved by the board earlier this year. It sets the stage for future dividend growth that is aligned with our long term operating earnings growth as we continue to working as we continue working to enhance value for investors.

The increase corresponds with our targeted payout ratio of 60% to 70% that was approved by the board earlier. This year. It sets the stage for future dividend growth that is aligned with our long term operating earnings growth as we continue to working.

Brian Tierney: We are providing a fourth quarter guidance range of 55-65 cents per share, which assumes normal weather. We are also narrowing our 2023 operating earnings guidance range to $2.49 per share to $2.59 per share from our original range of $2.44 per share to $2.64. In addition, we are reaffirming our 68% targeted long-term growth rate off of the original midpoint of prior year's guidance.

We continue working to enhance value for investors.

During the quarter. We also achieved some important regulatory milestones that support our strategy of investing to improve reliability resiliency and the customer experience.

Speaker 3: During the quarter, we also achieved some important regulatory milestones that support our strategy of investing to improve reliability, resiliency, and the customer experience.

Speaker 3: On October 18th, the Maryland Public Service Commission approved our distribution base rate case, including a $28 million revenue increase that supports equity returns of 9.5% and an equity ratio of 53%. We are pleased with this outcome, which support continued investments in the state and help us and helps us deliver on our commitment to providing dependable and affordable electricity to our customers in Potomac Edison's Maryland Service Territory.

On October 18th the Maryland Public Service Commission approved our distribution base rate case, including a $28 million revenue increase that supports equity returns of nine 5% and an equity ratio of 53%.

Brian Tierney: Before I move to key developments in the quarter, I want to address a couple of other topics.

We are pleased with this outcome, which support continued investments in the state and help us and helps us deliver on our commitment to providing dependable and affordable electricity to our customers and Potomac Edison's, Maryland service territory.

Brian Tierney: First, I want to briefly address the Ohio Organized Crime Investigations Commission, Sabina. We have no new material update at this time, and we continue to cooperate with the Commission and address their questions. Their focus continues to be on activities that were detailed in the deferred prosecution agreement with nothing new.

Speaker 3: We're also excited to move forward with the first of our three utility scale solar generation sites in West Virginia, totaling 30 megawatts of capacity.

We're also excited to move forward with the first of our three utility scale solar generation sites in West, Virginia, totaling 30 megawatts of capacity.

Brian Tierney: First, energy has taken full responsibility for those activities and implemented corrective actions to ensure that those type of activities never happen again. We will continue to cooperate with the OOCIC as we focus on executing our strategy and fulfilling our vision to transform first energy into a top-performing utility.

Speaker 3: Our proposal, along with the small construction surcharge, was approved by the West Virginia Public Service Commission in August .

Our proposal along with the small construction surcharge was approved by the West Virginia Public Service Commission in August we plan to seek approval from the PSC to build an additional two solar sites, representing another 20 megawatts once customer subscriptions reached the 85% threshold.

Speaker 3: We plan to seek approval from the PSC to build an additional two solar sites representing another 20 megawatts once customer subscriptions reach the 85% threshold.

Speaker 3: John will address the regulatory items and discuss the progress we're making with other filings including the Pennsylvania consolidation case and our rape proceedings in New Jersey, Ohio and West Virginia.

John will address the regulatory items in that.

Brian Tierney: The last subject before we move on is that I believe we are uniquely well positioned for the current interest rate environment. We expect to close on the FET transaction early next year and receive the full proceeds of $3.5 billion in 2024 with the majority funded at close. In addition, our debt maturities are light over the next couple of years, on average approximating 6% of our total debt outstanding. This positioning supports our robust capital plan.

And discuss the progress, we're making with other filings, including the Pennsylvania consolidation case, and our rate proceedings in New Jersey, Ohio, and West Virginia.

We are focused on making the necessary investments in our regulated businesses, our employees and in systems and our systems to enhance the customer experience and create new opportunities from the energy transition.

Speaker 3: We are focused on making the necessary investments in our regulated businesses, our employees, and our systems to enhance the customer experience and create new opportunities from the energy transition.

Speaker 3: To execute that vision, we are shifting decision making and accountability closer to where the work is being done to serve customers.

To execute that vision, we are shifting decision, making and accountability closer to where the work is being done to serve customers.

Brian Tierney: This year, we are on track for $3.7 billion in capital investments, up from our original plan of $3.4 billion. In 2024 and 2025, our planned capital investments are $3.9 billion and $4.1 billion respectively. This brings our total capital investments over the three-year period to approximately $12 billion. This capital investment plan is comprised of 47% transmission and 51% distribution supporting 7% rate-based growth over the period and we are reviewing additional investments to serve our costs, of Customers.

Speaker 3: We are making progress to fill several key executive positions in an organization that will be structured to allow greater execution at the business unit level.

We are making progress to fill several key executive positions in an organization that will be structured to allow greater execution at the business unit level.

Speaker 3: In the near future, we expect to announce a President First Energy Utilities, as well as a Chief Operating Officer.

In the near future, we expect to announce a president firstenergy utilities as well as a chief operating officer.

Speaker 3: President, First Energy Utilities, will oversee five business unit executives who will lead our state operations and our standalone transmission company.

The President Firstenergy utilities will oversee five business unit executives, who will lead our state operations and our Standalone transmission companies.

Speaker 3: In our new organization, the business unit executives will have P&L responsibility and will be accountable for regulatory direction and outcomes, as well as operational performance.

And our new organization the business unit executives will have P&L responsibility and will be accountable for regulatory direction and outcomes as well as operational performance.

Brian Tierney: Turning to slide six, let's review some recent key developments. In September, our board declared a quarterly dividend of 41 cents per share, payable December 1st. This represents a 5% increase compared to the quarterly payments of 39 cents per share, paid since March of 2020. The increased correspondence with our target-of-payout ratio of 60-70% that was approved by the board earlier this year. It sets the stage for future dividend growth that is aligned with our long-term operating earnings growth as we continue to working as we continue working to enhance value for investors.

The Chief operating officer will lead the customer experience group and a range of T. M D functions, including planning construction system operations safety and compliance.

Speaker 3: Chief Operating Officer will lead the Customer Experience Group and a range of T&D functions including planning, construction, system operations, safety, and compliance.

Speaker 3: Five months into my role, I'm more excited than ever about the future at First Energy.

Five months into my role I'm more excited than ever about the future of Firstenergy.

Speaker 3: We are building a strong foundation of operational and financial.

We are building a strong foundation of operational and financial excellence.

Speaker 3: We are using our strength and balance sheet to invest in our people and our system for reliability, resiliency, and in support of the energy transition.

We are using our strengthened balance sheet to invest in our people and our system for reliability resiliency and in support of the energy transition.

Speaker 3: We are poised to capitalize on these opportunities to continue to grow the company and create a strong investment opportunity for invest.

We are poised to capitalize on these opportunities to continue to grow the company and create a strong investment opportunity for investors.

Brian Tierney: During the quarter, we also achieved some important regulatory milestones that support our strategy of investing to improve reliability resiliency in the customer experience. On October 18th, the Maryland Public Service Commission approved our distribution base rate case, including a $28 million revenue increase that supports equity returns of 9.5% and an equity ratio of 53%. We are pleased with this outcome, which support continued investments in the state and helps us deliver on our commitment to providing dependable and affordable electricity to our customers in Potomac Edison's Maryland Service Territory.

Speaker 3: Thank you for joining us today. I look forward to seeing many of you at the EI conference next month and talking more about the progress we're making at first.

Thank you for joining us today I look forward to seeing many of you at the EI Conference next month and talking more about the progress we're making at Firstenergy.

Speaker 3: Now, I will turn the call over to John for more financial details.

Now I will turn the call over to John for more financial detail.

Speaker 4: Thank you, Brian . And good morning, everyone. We had a strong quarter which showcased our commitment to operational excellence and financial

Thank you, Brian and good morning, everyone, we had a strong quarter, which showcased our commitment to operational excellence and financial discipline.

Speaker 4: This work enabled us to offset the impact of continued, unseasonably mild temperatures across our service territory and deliver operating results near the top end of our guidance.

This work enabled us to offset the impact of continued unseasonably mild temperatures.

Across our service territory and deliver operating results near the top end of our guidance.

Speaker 4: In addition, we're also making good progress on our regulatory initiatives, which I'll review in more detail in a few minutes. Let's start with a review.

In addition, we're also making good progress on our regulatory initiatives, which I'll review in more detail in a few minutes let's.

Brian Tierney: We're also excited to move forward with the first of our three utility scale solar generation sites in West Virginia, totaling 30 megawatts of capacity. Our proposal, along with the small construction surcharge, was approved by the West Virginia Public Service Commission in August. We plan to seek approval from the PSC to build an additional two solar sites, representing another 20 megawatts, once customer subscriptions reach the 85% threshold.

Let's start with a review of our financial performance.

Speaker 4: As Brian mentioned earlier, third quarter gap earnings were $0.74 a share, and operating earnings were $0.88 a share.

As Brian mentioned earlier third quarter GAAP earnings were <unk> 74, a share and operating earnings were <unk> 88 this year.

Speaker 4: This compares to 2022, third quarter gap earnings, a 58 cents a share, and operating earnings of 79 cents a share.

This compares to 2022 third quarter GAAP earnings of 58, a share and operating earnings of <unk> 79, this year and on a year to date basis operating earnings are $1 94, a share compared to $1 91, a share in 2022, despite significant headwinds from our pension plan and lower weather.

Speaker 4: Operating earnings are $1.94 a share compared to $1.91 a share in 2022, despite significant headwinds from our pension plan and lower weather-related distribution.

Brian Tierney: John will address the regulatory items and discuss the progress we're making with other filings, including the Pennsylvania consolidation case and our rate proceedings in New Jersey, Ohio and West Virginia. We are focused on making the necessary investments in our regulated businesses, our employees and systems and our systems to enhance the customer experience and create new opportunities from the energy transition.

<unk> distribution sales.

Our performance in large part is due to intense focus on our operating expenses.

Speaker 4: Our performance in large part is due to intense focus on our operating.

Speaker 4: Lower company-wide O&M improved operating results by 8 fence a share in the third quarter and 21 fence a share on a year-to-date basis, representing a 13 percent reduction when compared to the first nine months of 2020.

Lower companywide O&M improved operating results by <unk> <unk> a share in the third quarter and 21, a share on a year to date basis, representing a 13% reduction when compared to the first nine months of 2022.

Brian Tierney: To execute that vision, we are shifting decision-making and accountability closer to where the work is being done to serve customers. We are making progress to fill several executive positions in an organization that will be structured to allow greater execution at the business unit level.

Speaker 4: And our expectation for the full year is an Owen M. reduction of roughly 15% versus 2022.

And our expectation for the full year as an O&M reduction of roughly 15% versus 2022 levels.

Speaker 4: About 50% of that is unique in nature, including spending we accelerated in 2022, with the other 50% being sustainable cost reductions that we will build upon in 2024 and beyond, primarily related to improved productivity across the entire organization, reduced use of contractors, and lower spending on branding and advertising, just to name a few.

About 50% of that is unique in nature, including spending we accelerated in 2022 with the other 50% being sustainable cost reductions that we will build upon in 2024 and beyond primarily related to improved productivity across the entire organization.

Brian Tierney: In the near future, we expect to announce a president first energy utilities as well as a chief operating officer. The president first energy utilities will oversee five business unit executives who will lead our state operations and our standalone transmission companies. In our new organization, the business unit executives will have P&L responsibility and will be accountable for regulatory direction and outcomes as well as operational performance. The chief operating officer will lead the customer experience group and a range of TND functions, including planning, construction, system operations, safety and compliance. Five months into my role, I'm more excited than ever about the future of first energy.

Reduced use of contractors and lower spending on branding and advertising just to name a few.

Speaker 4: We're also running ahead of plan with capital spending in both our transmission and distribution visits.

We're also running ahead of plan with capital spending in both our transmission and distribution businesses strong planning and execution across our operations and supply chain teams as well as the need to respond to more severe and capital intensive storm events resulted in an increase to our 2023 forecasted capital investment.

Speaker 4: Strong planning and execution across our operations and supply chain teams, as well as the need to respond to more severe and capital-intensive storm events resulted in an increase to our 2023 forecasted capital investment of nearly $300 million to $3.7 billion from our original plan of $3.4 billion.

Of nearly $300 million to $3 7 billion.

From our original plan of $3 $4 billion.

Looking now at the drivers for each of our business units for the third quarter.

Speaker 4: Looking now at the drivers for each of our business units for the third quarter, results in our distribution business benefited from the diligent focus on operating expenses, as well as our formula rate capital investment programs and rate structure.

Results in our distribution business benefited from the diligent focus on operating expenses as well as our formula rate capital investment programs and rate structures. Together. These helped to offset the impact of a lower pension credit higher financing costs, mostly associated with new debt issuances and the impact of mild weather on distribution sales.

Brian Tierney: Technology. We are building a strong foundation of operational and financial excellence. We are using our strength and balance sheet to invest in our people and our system for reliability, resiliency, and in support of the energy transition. We are poised to capitalize on these opportunities to continue to grow the company and create a strong investment opportunity for investors.

Speaker 4: Together, these help to offset the impact of a lower pension credit, higher financing costs mostly associated with new debt issuances, and the impact of mild weather.

Speaker 4: mild summer temperatures with cooling degree days 17% lower than the third quarter of 2022 and 6% below normal drove a 3% decrease in total customer demand and impacted earnings by last year chat subjects contained e- sf Jed?

Mild summer temperatures with cooling degree days, 17% lower than the third quarter of 2022, and 6% below normal drove a 3% decrease in total customer demand and impacted earnings by six cents a share compared to last year.

Brian Tierney: Thank you for joining us today. I look forward to seeing many of you at the EEI conference next month and talking more about the progress we are making at First Energy.

John Taylor: Now, I will turn the call over to John for more financial detail. Thank you, Brian, and good morning, everyone. We had a strong quarter which showcased our commitment to operational excellence and financial discipline. This work enabled us to offset the impact of continued unseasonably mild temperatures across our service territory and deliver operating results near the top end of our guidance. In addition, we are also making good progress on our regulatory initiatives, which I will review in more detail in a few minutes.

Speaker 4: Sales to residential customers decrease nearly 4% compared to the third quarter of 2022 Resulting from a 6% decrease due to the mild summer weather partially all set by a 2% increase on a weather adjustment

<unk> to residential customers decreased nearly 4% compared to the third quarter of 2022, resulting from a 6% decrease due to the mild summer weather, partially offset by a 2% increase on a weather adjusted basis.

Speaker 4: Your to date, whether adjusted usage in this customer class is about 2% higher than our forecast and last year and about 5% higher than 2019 pre-pandemic levels.

Year to date weather adjusted usage in this customer classes about 2% higher than our forecast and last year and about 5% higher than 2019 pre pandemic levels.

Speaker 4: In the commercial sector, demand decrease just over 1%, resulting from a 2% decline in the mild temperatures, but increased over 1% quarter over quarter on a weather adjustment.

In the commercial sector demand decreased just over 1%, resulting from a 2% decline in the mild temperatures, but increased over 1% quarter over quarter on a weather adjusted basis.

John Taylor: Let's start with the review of our financial performance. As Brian mentioned earlier, third quarter gap earnings were 74 cents a share and operating earnings were 88 cents a share. This compares to 2022, third quarter gap earnings, a 58 cents a share and operating earnings of 79 cents a share. On a year-to-date basis, operating earnings are $1.94 a share compared to $1.91 a share in 2022 despite significant headwinds from our pension plan and lower weather-related distribution sales.

Speaker 4: Your to date weather adjusted usage is flat till last year and continues to lag pre pandemic levels by about five.

Year to date weather adjusted usage is flat to last year and continues to lag pre pandemic levels by about 5%.

Finally sales to industrial customers were flat compared to the third quarter and year to date periods of 2022 and remained slightly lower than pre pandemic levels.

Speaker 4: Finally, sales to industrial customers were flat compared to the third quarter and year to date periods of 2022 and remain slightly lower than pre-pandemic levels.

Speaker 4: Looking at our transmission business, third quarter results increased as a result of rate-based growth of 8% associated with our energizing the future investment program. So far this year we deployed $1.2 billion of capital in our transmission business and increase of $400 million or 50% versus last year. And nearly $200 million or approximately 20% above our.

Looking at our transmission business third quarter results increased as a result of rate base growth of 8% associated with our energizing the future investment program. So far this year, we deployed $1 $2 billion of capital in our transmission business, an increase of $400 million are 50% versus last year and nearly $200 million.

John Taylor: Our performance in large part is due to intense focus on our operating expenses. Lower company-wide O&M improved operating results by 8 cents a share in the third quarter and 21 cents a share on a year-to-date basis, representing a 13 percent reduction when compared to the first nine months of 2022. And our expectation for the full year is an O&M reduction of roughly 15 percent versus 2022 levels. About 50 percent of that is unique in nature, including spending week accelerated in 2022, with the other 50 percent being sustainable cost reductions that we will build upon in 2024 and beyond.

Approximately 20% above our plan.

Speaker 4: highlighting just a few of the many projects currently underway in Northeast Pennsylvania. We're rebuilding a 20 mile, 115 KV transmission line to enhance service reliability and improve system resilience.

Highlighting just a few of the many projects currently underway in northeast, Pennsylvania, We're rebuilding a 2020 mile 115 kv transmission line to enhance service reliability and improved system resiliency.

Speaker 4: In Ohio, we're rebuilding a 20 mile section of a 138 KV power line in Belmont and Harrison counties.

In Ohio, we're rebuilding a 20 mile section of a 138 kv powerline in Belmont and Harrison counties.

Speaker 4: which is in the third phase of a larger 64 mile project to enhance service reliability, improve system resiliency, and accommodate increasing customer demand.

Which is in the third phase of a larger 64 mile project to enhance service reliability improved system resiliency and accommodate increasing customer demand.

John Taylor: Primarily related to improve productivity across the entire organization, reduced use of contractors, and lower spending on branding and advertising just to name a few. We're also running ahead of plan with capital spending in both our transmission and distribution businesses. Strong planning and execution across our operations and supply chain teams as well as the need to respond to more severe and capital intensive storm events resulted in an increase to our 2023 forecasted capital investment of nearly $300 million to $3.7 billion from our original plan of $3.4 billion.

Speaker 4: And in West Virginia, we're upgrading four miles of a high-voltage transmission power line in Preston County to reinforce local transmission system against the fear weather, meet future energy demands of the region and enhance service reliability for 5,000 customers in the Kingwood area.

And in West, Virginia, we're upgrading four miles of a high voltage transmission parallel impressed and counting to reinforce local transmission system against severe weather meet future energy demands of the region and enhance service reliability for 5000 customers and the Kingwood area.

Speaker 4: For the full year, we now anticipate transmission formula rate investments of over $1.8 billion versus our original plan of just under 1.7 billion.

For the full year, we now anticipate transmission formula rate investments of over $1 8 billion versa versus our original plan of just under $1 7 billion.

In our corporate segment, our results for the third quarter largely reflect the tax benefit from the expected use of state net operating loss carryforwards, which we discussed on our second quarter call that reduced our consolidated effective tax rate for the year.

Speaker 4: And our corporate segment, our results for the third quarter largely reflected tax benefit from the expected use of state net operating loss carry forwards, which we discussed on the second quarter call, that reduced our consolidated affected tax rate for the year.

John Taylor: Looking now at the drivers for each of our business units for the third quarter, results in our distribution business benefited from the diligent focus on operating expenses as well as our formula rate capital investment programs and rate structures. Together, these help to offset the impact of a lower pension credit, higher financing costs, mostly associated with new debt issuances, and the impact of mild weather on distributions. Sales. Mile summer temperatures with cooling degree days, 17 percent lower than the third quarter of 2022, and 6 percent below normal drove a 3 percent decrease in total customer demand and impacted earnings by 6 cents a share compared to last year.

As Brian mentioned throughout 2023, our consistent operational and financial execution include.

Speaker 4: As Brian mentioned throughout 2023 are consistent operational and financial execution, including growth from our investment plan, significant cost control, and other financing and tax.

Including growth from our investment plan significant cost control and other financing and tax benefits is more than offset the headwinds from pension and the impact of lower weather related distribution sales, which for the first nine months of this year impacted results by <unk> <unk> per share versus normal.

Speaker 4: has more than offset the headwinds from pension and the impact of lower weather-related distribution cells, which for the first nine months of this year impacted results by 18 cents per share versus normal.

Speaker 4: I'm proud of how all of our employees have addressed these challenges and supported our

I'm proud of how all of our employees have addressed these challenges and supported our commitments.

Speaker 4: While 2023 is not over, our 2023 debt financing plan is now complete.

While 2023 is not over our 2023 debt financing plan is now complete with.

John Taylor: Sales to residential customers decreased nearly 4 percent compared to the third quarter of 2022, resulting from a 6 percent decrease due to the mile summer weather, partially all set by 2 percent increase on a weather adjusted basis. Year-to-date weather adjusted usage in this customer class is about 2 percent higher than our forecast and last year, and about 5 percent higher than 2019 pre-pandemic levels. In the commercial sector demand decreased just over 1 percent, resulting from a 2 percent decline in the mile temperatures, but increased over 1 percent quarter over quarter on a weather adjusted basis.

Speaker 4: With six long-term debt transactions that are regulated operating companies tolling $1.6 billion with an average coupon of 5.41%. Slightly below our plan of 5.5.

With six long term debt transactions at our regulated operating companies totaling $1 6 billion.

With an average coupon of 541% slightly below our plan of five 5%.

Speaker 4: Also earlier this year, at the court issued $1.5 billion of convertible debt, with a coupon of 4% that allowed the company to refinance revolver barrings costing more than 7% and to make a voluntary pension contribution to eliminate minimum funding requirements in 2020.

Also earlier this year at the Corp issued $1 5 billion of convertible debt with a coupon of 4% that allowed the company to refinance revolver borrowings costing more than 7% and to make a voluntary pension contribution to eliminate minimum funding requirements in 2025.

Speaker 4: Additionally, earlier this month, we extended the maturity date on our $4.5 billion revolving credit facilities to October 2020.

John Taylor: Year-to-date weather adjusted usage is flat to last year and continues to lag pre-pandemic levels by about 5 percent. Finally sales to industrial customers were flat compared to the third quarter and year-to-date periods of 2022 and remain slightly lower than pre-pandemic levels.

Additionally earlier this month, we extended the maturity date on our $4 5 billion revolving credit facilities to October 2027, and added two new revolving credit facilities, including a $1 billion facility at RPT, LLC and a $150 million facility at <unk>.

Speaker 4: and added two new revolving credit facilities, including a $1 billion facility at FET LLC, and a $150 million facility at CAT.

Speaker 4: Moving forward, we will have $5.65 billion of credit facilities to support our increasing capital

Moving forward, we will have 565 billion of credit facilities to support our increasing capital programs.

John Taylor: Looking at our transmission business, third quarter results increased as a result of rate-based growth of 8 percent associated with our energizing the future investment program. So far this year we deployed $1.2 billion of capital in our transmission business and increase of $400 million or 50 percent versus last year and nearly $200 million or approximately 20 percent above our plan. Highlighting just a few of the many projects currently underway in northeast Pennsylvania were rebuilding a 20 mile 115 KV transmission line to enhance service reliability and improve system resiliency.

Speaker 4: As we look to 2024 and 2025, our debt financing plan is minimal since the majority of the FET asset sale process.

As we look to 2024 and 2025, our debt financing plan is minimal since the majority of the asset sale proceeds will.

Speaker 4: will be received a closing with the remainder anticipated before the end of 2020.

It will be received at closing with the remainder anticipated before the end of 2024.

Speaker 4: We plan to use these proceeds to repaid costly revolver borrowings and depending on the interest rate environment will be used to redeem high-key upon whole codec, such as the 7 and 3 eighth notes of which $460 million remain outstanding.

We plan to use these proceeds to repay costly revolver borrowings and depending on the interest rate environment will be used to redeem high coupon holdco debt such as the 730 eights notes of which $460 million remain outstanding.

Speaker 4: Retire maturing utility debt and or defer other utility debt issues.

John Taylor: In Ohio we're rebuilding a 20 mile section of a 138 KV power line in Belmont and Harrison counties, which is in the third phase of a larger 64 mile project to enhance service reliability, improved system resiliency and accommodate increasing customer demand. And in West Virginia we're upgrading four miles of a high voltage transmission power line and Preston County to reinforce local transmission system against the fear weather, meet future energy demands of the region and enhance service reliability for 5,000 customers in the Kingwood area.

Retire maturing utility debt <unk> defer other utility debt issuances.

The funding from the <unk> transaction, our light debt maturity schedule plus the decision we made to issued a low cost convertible debt provides significant flexibility with our utility debt financing plan, which other than refinancings and new money requirements at our Standalone transmission companies could be as low as $2 $1 billion over the next two years.

Speaker 4: The funding from the FET transaction, our light debt maturity schedule, plus the decision we made to issue the low-cost convertible debt provides significant flexibility with our utility debt financing.

Speaker 4: which other than refinancing in new money requirements that are standalone transmission companies, could be as low as 2.1 billion dollars.

And as for Etsy Corp's Holdco debt, we only have $300 million that matures in 2025.

All of that said, we're uniquely well positioned for the current interest rate environment with minimal earnings sensitivity to interest rate increases over the next couple of years.

Speaker 4: All that said were uniquely well positioned for the current interest rate environment with minimal earning sensitivity to interest rate increases over the next couple.

John Taylor: For the full year we now anticipate transmission formula rate investments of over $1.8 billion versus our original plan of just under $1.7 billion. And our corporate segment, our results for the third quarter largely reflected tax benefit from the expected use of state net operating loss carry forwards, which we discussed on the second quarter call that reduced our consolidated affected tax rate for the year. As Brian mentioned throughout 2023 are consistent operational and financial execution and including growth from our investment plan, significant cost control and other financing and tax benefits has more than offset the headwinds from pension and the impact of lower weather related distribution sales, which for the first nine months of this year impacted results by 18 cents per share versus normal.

Now, let's turn to an update on our rate proceedings in other regulatory activity.

Speaker 4: Now let's turn to an update on our rate proceedings and other regulatory activities.

Speaker 4: As we've discussed, we filed three base rate cases earlier this year representing more than $7 billion a rate base.

As we've discussed we filed three base rate cases earlier, this year, representing more than $7 billion of rate base.

Speaker 4: As Ryan said last week, we received an order in the Maryland base rate case that aligns with our goals to continue meeting the energy demands of Potomac Edicins rapidly growing population.

As Brian said last week, we received an order in the Maryland base rate case that aligns with our goals to continue meeting the energy demands of Potomac Edison's rapidly growing population.

Speaker 4: The order authorized an equity capitalization ratio of 53% with an equity return of 9.5%.

The order authorized an equity capitalization ratio of 53% with an equity return of nine 5%.

Speaker 4: recovery of regulatory assets associated with both COVID and electric vehicle infrastructure.

Recovery of regulatory assets associated with both Covid and electric vehicle infrastructure, while also providing support to help our strategy of strong reliability and resiliency and support of the energy transition.

John Taylor: I'm proud of how all of our employees have addressed these challenges and supported our commitments. While 2023 is not over, our 2023 debt financing plan is now complete, with six long term debt transactions that are regulated operating companies, totaling $1.6 billion with an average coupon of 5.41%, slightly below our plan of 5.5%. Also earlier this year, Ethie Corp issued $1.5 billion of convertible debt with a coupon of 4% that allowed the company to refinance, revolver borrowings, costing more than 7% and to make a voluntary pension contribution to eliminate minimum funding requirements in 2025.

The new rates went into effect October 19th.

Speaker 4: We're also happy with the progress on the New Jersey and West Virginia base race.

We're also happy with the progress on the New Jersey, and West Virginia base rate cases.

Speaker 4: In New Jersey, we've entered into settlement discussions on our proposed revenue increase of $192 million.

In New Jersey, we've entered into settlement discussions on our proposed revenue increase of $192 million.

Speaker 4: And in West Virginia, a hearing is set for late January and our $207 million base rate case, but new rates expected to be effective.

And in West Virginia hearing is set for late January and our $207 million base rate case.

With new rates expected to be effective in March of next year.

Other recent regulatory updates include in Pennsylvania, FERC approved our application to consolidate our four Pennsylvania distribution utilities in August.

Speaker 4: Other recent regulatory updates include in Pennsylvania. Farca proved our application to consolidate our four Pennsylvania distribution utilities in August .

Speaker 4: And the parties to the case filed a settlement agreement with the Pennsylvania Public Utility Commission on August 30th.

And the parties to the case filed a settlement agreement with the Pennsylvania Public Utility Commission on August 30th.

Speaker 4: The settlement includes $650,000 in bill assistance for income eligible customers over five years.

Settlement includes $650000 and Bill assistance for income eligible customers over five years supports unification of rates overtime and includes a tracking mechanism to share certain cost savings associated with the legal entity consolidation with customers.

John Taylor: Additionally, earlier this month, we extended a maturity date on our $4.5 billion revolving credit facilities to October 2027 and added two new revolving credit facilities, including a $1 billion facility at FET LLC and $150 million facility at CATCO. Moving forward, we will have $5.65 billion of credit facilities to support our increasing capital programs. As we look to 2024 and 2025, our debt financing plan is minimal since the majority of the FET asset sale proceeds will be received at closing with the remainder anticipated before the end of 2024.

Speaker 4: It supports unification of rates over time and includes a tracking mechanism to share certain cost savings associated with the legal entity consolidation with customers.

Speaker 4: With the ALJ's recommended approval of the settlement, which is pending final regulatory approval, we expect the consolidation to close by early 2020.

With the Alj's recommended approval of the settlement, which is pending final regulatory approval, we expect the consolidation to close by early 2024.

Speaker 4: This consolidation lines with our state operating model is an important step to simplify our legal entity structure and increase the flexibility and efficiency of our finance.

This consolidation aligns with our state operating model and is an important step to simplify our legal entity structure and increase the flexibility and efficiency of our financing strategy.

And Ohio hearings for our grid Mod to filing are scheduled to begin in December this four year $626 million capital investment plan will support our continued work delivering safe reliable power offering modern customer experiences and supporting emerging technologies.

Speaker 4: In Ohio, hearings for our Grid Mod 2 filing are scheduled to begin in December . This four-year, $626 million capital investment plan will support our continued work delivering safe, reliable power, offering modern customer experiences, and support.

John Taylor: We plan to use these proceeds to repay costly revolver borrowings and depending on the interest rate environment will be used to redeem high-keep on whole-code debt such as the $7.38 notes of which $460 million remain outstanding, retire maturing utility debt, and or defer other utility debt issuances. The funding from the FET transaction, our light debt maturity schedule, plus the decision we made to issue the low-cost convertible debt, provides significant flexibility with our utility debt financing plan, which other than refinancing and new money requirements that are standalone transmission companies, could be as low as $2.1 billion over the next two years.

And in November hearings are scheduled to begin on our fifth Ohio Electric security plan.

Speaker 4: And in November hearings are scheduled to begin on our 5th Ohio Electric Security Plan.

Speaker 4: which supports our generation procurement process for non-shopping cuts.

Which supports our generation procurement process for non shopping customers as well as investments in the distribution system storm and vegetation management riders and energy efficiency programs.

Speaker 4: as well as investments in the distribution system, storm and vegetation management writers, and energy efficiency probe.

Speaker 4: Our proposal also supports low-income customers and electric vehicles.

Our proposal also supports low income customers and electric vehicle incentives, we have requested approval for the new ESP effective June one of next year.

Speaker 4: We have requested approval for the new ESP effective June 1st of next.

In West Virginia, we reached a unanimous settlement in our depreciation case with an agreed upon $33 million increase in depreciation rates those rates will be effective upon conclusion of the west Virginia base rate case.

Speaker 4: In West Virginia, we reached the unanimous settlement our depreciation case with an agreed upon $33 million increase in depreciation.

John Taylor: And as for FET Corp's whole-code debt, we only have $300 million that mature in 2025. All that said were uniquely well positioned for the current interest rate environment with minimal earning sensitivity to interest rate increases over the next couple of years.

Speaker 4: Those rates will be effective upon conclusion of the West Virginia base.

Speaker 4: And as Brian discussed, we received approval from the West Virginia Public Service Commission August to move forward with construction of the first three utility-scale solar generation sites in the state.

And as Brian discussed we received approval from the West Virginia Public Service Commission in August to move forward with construction of the first three utility scale solar generation sites in the state.

John Taylor: Now let's turn to an update on our rate proceedings and other regulatory activity. As we've discussed, we filed three base rate cases earlier this year representing more than $7 billion of rate base. As Brian said last week, we received an order in the Maryland base rate case that aligns with our goals to continue meeting the energy demands of Potomac Edison's rapidly growing population. The order authorized an equity capitalization ratio of 53% with an equity return of 9.5%.

Speaker 4: We expect the first fight to be in service by the end of this year and all five fights to be completed before the end of 2025 at a total investment cost of a-

We expect the first site to be in service by the end of this year and all five sites to be completed before the end of 2025.

At a total investment cost of approximately $110 million.

Speaker 4: Just as a reminder, summaries of our key filings together with news releases and links to dockets are all available on the regulatory corner section of our Investor Relations web.

Just as a reminder, summaries of our key filings together with news releases and links to dockets are all available on the regulatory regulatory corner section of our Investor Relations website.

John Taylor: Recovery of regulatory assets associated with both COVID and electric vehicle infrastructure, while also providing support to help our strategy of strong reliability and resiliency and support of the energy transition. The new rates went into effect October 19th. We're also happy with the progress on the New Jersey and West Virginia base rate cases. In New Jersey, we've entered into settlement discussions on our proposed revenue increase of $192 million, and in West Virginia, our hearing is set for late January in our $207 million base rate case, with new rates expected to be effective in March of next year.

Speaker 4: Looking ahead, we plan to file our New Jersey Infrastructure Investment Program in the next few weeks, and as you know, we are preparing for an active regulatory calendar.

Looking ahead, we plan to file our New Jersey infrastructure investment program in the next few weeks and as you know we are preparing for an active regulatory calendar in 2024.

The performance of our team has been second to none by focusing on what we can control and a commitment to continuous improvement we have delivered outstanding operational and financial performance.

Speaker 4: The performance of our team has been second to none by focusing on what we can control and a commitment to continuous improvement. We've delivered outstanding operational and financial.

Speaker 4: We've overcome the impact of historic, unseasonable weather and other challenges to deliver solid results through the first nine months of this.

Overcome the impact of historic Unseasonable weather and other challenges to deliver solid results through the first nine months of this year.

Speaker 4: We're on track to meet our financial commitments, and we're building a strong foundation for continued.

We're on track to meet our financial commitments and we are building a strong foundation for continued growth. Thank.

John Taylor: Other recent regulatory updates include in Pennsylvania, Farca proved our application to consolidate our four Pennsylvania distribution utilities in August, and the parties to the case filed a settlement agreement with the Pennsylvania Public Utility Commission on August 30th. The settlement includes $650,000 in bill assistance for income eligible customers, over five years, supports unification of rates over time, and includes the tracking mechanism to share certain cost savings associated with the legal entity consolidation with customers.

Speaker 4: Thank you for your time today. Now let's open the call to your question.

Thank you for your time today now, let's open the call to your questions.

Hey, John Real quick before we go to Q&A I'd like to share some late breaking news from last night yesterday evening PJM released the results of its open window process to address reliability concerns with data center load growth and the Dominion and Aps service territories based on our preliminary review of these results we are on track to gain.

Speaker 3: Hey John , real quick before we go to Q&A, I'd like to share some late breaking news from last night.

Speaker 3: Yesterday evening, PGM released the results of its open window process to address reliability concerns with data center load growth in the Dominion and APS service territory.

Speaker 3: Based on our preliminary review of these results, we are on track to gain a substantial portion of the project.

A substantial portion of the projects the recommendation is still need to move through <unk> and the PJM board, but we anticipate that happening by year end, while these projects won't come to fruition until the latter half of the decade, we're really excited about this opportunity it builds on our successful bid for the onshore transmission construction that supports new jerseys.

Speaker 3: The recommendations still need to move through TAC and the PJM board, but we anticipate that happening by year end. While these projects won't come to fruition until the latter half of the decade, we're really excited about this opportunity.

John Taylor: With the ALJ's recommended approval of the settlement, which is pending final regulatory approval, we expect the consolidation to close by early 2024. This consolidation aligns with our state operating model and is an important step to simplify our legal entity structure and increase the flexibility and efficiency of our financing strategy. In Ohio, hearings for our grid mod two filing are scheduled to begin in December. This four year, $626 million capital investment plan will support our continued work, delivering safe reliable power, offering modern customer experiences and supporting emerging technologies.

Speaker 3: It builds on our successful bid for the onshore transmission construction that supports New Jersey's offshore wind project. And it further highlights the significant transmission build out we anticipate in our footprint to support the energy transition.

Offshore wind project and it further highlights the significant transmission build out we anticipate in our footprint to support the energy transition, we look forward to talking more about this opportunity.

Speaker 3: We look forward to talking more about this opportunity at EEI once we've had a chance to fully understand the details. Now...

Once we've had a chance to fully understand the details.

Now, let's move to your questions.

Speaker 1: Thank you. We'll now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your <unk>.

John Taylor: And in November hearings are scheduled to begin on our 5th Ohio Electric Security Plan, which supports our generation procurement process for non-shopping customers, as well as investments in the distribution system, storm and vegetation management riders, and energy efficiency programs. Our proposal also supports low-income customers and electric vehicle incentives. We have requested approval for the new ESP effective June 1st of next year. In West Virginia, we reach the unanimous settlement in our depreciation case with an agreed upon $33 million increase in depreciation rates.

Handset before pressing the star keys.

Speaker 1: Our first question comes from the line of Shar Prada with Guggenheim partners. Please proceed with your question.

Our first question comes from the line of Shar product with Guggenheim Partners. Please proceed with your question.

Hey, good morning, guys.

Good morning Shar.

Good morning, Brian.

Speaker 5: Let me just, on the regulatory side, obviously we're gonna be approaching the Ohio case next May. I just, I guess, I wanna get a little bit of a sense on how you're thinking about the bill impact given this environment. Could this case still end up being sort of bill neutral and just remind us on what's sort of the key driver of that case is on the invested capital side, rate based, deferred costs on M-Trub's, and I guess any sort of experiences.

And then just on the regulatory side, obviously, we're going to be approaching the Ohio case next may I, just I guess I wanted to get a little bit of a sense on how youre thinking about the bill impact given this environment could this case still end up being sort of bill neutral and just remind us on what sort of the key driver of that cases on the investment.

John Taylor: Those rates will be effective upon conclusion of the West Virginia base rate case. And as Brian discussed, we received approval from the West Virginia Public Service Commission August to move forward with construction of the first three utility scale solar generation sites in the state. We expect the first site to be in service by the end of this year and all five sites to be completed before the end of 2025 at a total investment cost of approximately $110 million.

Capital side rate base deferred cost on them true ups, I guess any sort of experiences from the ESP proceeding that could dictate how you manage the <unk> yes.

Speaker 5: From the ESP proceeding, I can dictate how you manage the GRC.

Speaker 3: Yeah, thank you for the question, Char. You're really forward looking. So we're still in the midst of ESP five discussions and the grid mod two. So we're in the throes of that engaging with...

Thank you for the question Chuck.

You are really forward looking so we're still in the midst of.

John Taylor: Just as a reminder, summaries of our key filings together with news releases and links to dockets are all available on the regulatory corner section of our investor relations website. Looking ahead, we plan to file our New Jersey Infrastructure Investment Program in the next few weeks, and as you know, we are preparing for an active regulatory calendar in 2024. The performance of our team has been second to none by focusing on what we can control and a commitment to continuous improvement.

DSP five discussions and the grid mod to so we're in the throes of that engaging with staff and intervenors in trying to come to successful conclusions there.

Speaker 3: staff and interveners and trying to come to successful conclusions there. But as you all the things you mentioned are what we're going to be doing in the base rate case next year. It's going to be taking things out of the trackers and riders that we have, getting them put in the base rates, updating fully our rate base or prudently incurred costs.

But as you all the things you mentioned are what we're going to be doing in the base rate case next year, it's going to be taking things out of the trackers and riders that we have we're getting them put into base rates updating fully our rate base are prudently incurred costs storm tree trimming regular O&M.

Speaker 3: storm, tree trimming, regular ONM, financing costs, all that, getting that in base rates, and then moving forward with some healthy trackers that we'll have at that point. There's nothing that's gonna be controversial in that case. It's a traditional rate case.

John Taylor: We've delivered outstanding operational and financial performance. We've overcome the impact of historic unseasonable weather and other challenges to deliver solid results through the first nine months of this year. We're on track to meet our financial commitments and we're building a strong foundation for continued growth.

Financing costs all of that getting that in base rates.

And then and then moving forward with some healthy trackers that will have at that point. There is nothing thats going to be controversial in that case.

It's a traditional rate case, nothing special about it but all the things that you would expect a regulated utility to be doing.

Speaker 3: nothing special about it, but all the things that you'd expect a regulated utility to be doing. We've found over time that the Ohio Commission has been very supportive of wires investment.

John Taylor: Thank you for your time today.

Operator: Now let's open the call to your questions.

We've found over time that the Ohio Commission has been very supportive of wires investments.

Unknown Executive: John, real quick, before we go to Q&A, I'd like to share some late breaking news from last night. Yesterday evening, PGM released the results of its open window process to address reliability concerns with data center load growth in the Dominion and APS service territories. Based on our preliminary review of these results, we are on track to gain a substantial portion of the projects. The recommendations still need to move through TAC and the PGM board, but we anticipate that happening by year end.

Speaker 3: and we're poised to continue making those and look forward to investing in the state of Ohio. A couple of things that we're gonna be cognizant of in that case, one is where we're earning right now relative to what we think a normal authorized return should be. We're well below a nine and a half to 10 and a half percent return on equity and we need to get that increase.

We're poised to continue making those and look forward to investing.

In the state of Ohio, a couple of things that that we're going to be cognizant of in that case, one is where were earning right now relative to what we think a normal authorized return should be well below.

Nine five to 10, 5% return on equity and we need to get that increased.

Unknown Executive: While these projects won't come to fruition until the latter half of the decade, we're really excited about this opportunity. It builds on our successful bid for the onshore transmission construction that supports New Jersey's offshore wind project. And it further highlights the significant transmission build out we anticipate in our footprint to support the energy transition. We look forward to talking more about this opportunity at EEI once we've had a chance to fully understand the details.

Speaker 3: And our rates today are about 14% below our in-state peers. So to be honest with you, it's too early for us to know what the bill impact is going to be, but we're always looking for ways to minimize the bill impact of customers.

And our rates today are about 14% below our instate peers, so to be honest with you. It's too early for us to to know what the bill impact is going to be but we're always looking for ways to minimize the bill impact to customers.

Speaker 5: Got it, perfect. And then lastly for me, just on the ONM side and just pension, 31 cents of benefit is sort of very material year over year. I guess how much should we assume with this benefit is tactical, so really short-term in nature versus how much of it is maybe more perpetual, so we can put a multiple on it and assume that benefit carries into, you know, 25 and beyond. And then any sense on the pension performance year today, thanks guys, I appreciate it.

Got it perfect and then lastly for me just on the O&M side, and then just pension 31 cents of benefit is sort of very material year over year I guess, how much should we assume with this benefit as tactical so really short term in nature versus how much of it is maybe more perpetual. So if you can put a multiple on it.

Operator: Charles, now let's move to your questions. Thank you.

Operator: We'll now be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation to him will indicate your line is in the question cue. You may press star two if you'd like to remove your question from the cue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Jim that benefit carries into.

25, and beyond and then any sense on the pension performance year to date. Thanks, guys I appreciate it.

Speaker 4: Hey, Shar, this is John . Thanks for the question. So yeah, if you look at our O&M performance year over year, about a 15%

Hey, Shar. This is John Thanks for the question. So yes, if you look at our O&M performance year over year about 15%.

Shahriar Pourreza: Our first question comes from the line of Shahri Pourreza. With Guggenheim partners, please proceed with your question. Hey, good morning, guys. Good morning, sir. Good morning, Brian. Let me just on the regulatory side, obviously we're going to be approaching the Ohio case next May. I guess I want to get a little bit of a sense on how you're thinking about the bill impact given this environment. Could this case still end up being sort of bill neutral and just remind us on what sort of the key driver of that case is on the investment capital.

Speaker 4: reduction from what we incurred in 2022, which is about $200 million, a little bit more than that. I would tell you about 50 percent of that is associated with timing of work that we accelerated from 23 into 22.

Reduction from what we incurred in 2022, which is about $200 million a little bit more than that I would tell you about 50% of that is associated with timing of work that we accelerated from 23 into 'twenty two.

Speaker 4: and some unique items, but the other 50%.

And some unique items, but the other 50% is sustainable savings associated with just productivity improvements getting contractors off the property doing the work ourselves we had some benefits associated with.

Speaker 4: is sustainable savings associated with just...

Speaker 4: Productivity improvements, getting contractors off the property, doing the work ourselves. We had some benefits associated with...

Shahriar Pourreza: All side rate based deferred costs on them, true ups and I guess any sort of experiences from the ESP proceeding that could dictate how you manage the GRC. Thanks. Yeah, thank you for the question, chart. You're really forward looking. So we're still in the midst of the ESP five discussions and the grid mod two. So we're in the throws of that engaging with staff and interveners and trying to come to successful conclusions there.

Speaker 4: contract terminations associated with sponsorships and branding relationships that we had. And just a real intense focus on just general business items that we spend. So I would say about half of it is kind of unique. I would say the other half of it is sustainable savings that we'll build upon as we go into next year.

Contract terminations associated with sponsorships and branding relationships that we had and just a real intense focus on just general business items that we spend so I would say about half of it is kind of unique.

I'd say the other half of it is sustainable savings that will build upon as we go into next year.

Shahriar Pourreza: But as you all the things you mentioned are what we're going to be doing in the base rate case next year. It's going to be taking things out of the trackers and riders that we have. We're getting them put in the base rates updating fully our rate base are prudently incurred costs, storm tree trimming, regular O&M financing costs, all that. Getting that in base rates. And then and then moving forward with some healthy trackers that will have at that point, there's nothing that's going to be controversial in that case.

With respect to the pension.

Speaker 4: With respect to the pension, the pension performance year to date is about flat. So that is something that we have our eye on. A lot of that is associated with the interest rate environment, but we're taking that into account as we think about the long term.

The pension performance year to date is about flat.

So that is something that we have our eye on a lot of that is associated with the interest rate environment, but we're taking that into account as we think about the long term.

Speaker 5: Perfect. I appreciate it guys. That's all I had in Brian Deluc with the search for the CEO and president. Appreciate it. Thank you, Sean.

Perfect I appreciate it guys. That's all I had and Brian Good luck with the.

For the COO and President I appreciate it.

Thank you Chuck.

Speaker 1: Thank you. Our next question comes from mine, Adjero Mi Tonay with JP Morgan. Please proceed with your question. Hi, come.

Shahriar Pourreza: It's a traditional rate case. Nothing special about it but all the things that you'd expect a regulated utility to be doing. We found over time that the Ohio Commission has been very supportive of wires investments and we're poised to continue making those and look forward to investing in the state of Ohio. A couple of things that we're going to be cognizant of in that case. One is where we're earning right now relative to what we think a normal authorized return should be.

Thank you. Our next question comes from the line of Jeremy Tonet with Jpmorgan. Please proceed with your question.

Hi, good morning.

Good morning, Jeremy.

Speaker 6: um... just want to uh... uh... touch base i guess the nancy plan to be here given given you tap back repressed uh... could you clarify that what's in the financing needs at this point looks like uh... there is prior language last word about no equity needs except for a hundred million s i p e drift and and didn't see that messaging in this deck and just wondering uh... if anything's changed their what we should expect on that front

Just wanted to touch base I guess in the financing plans a bit here given given your capex refresh.

Could you clarify I guess, what's in the financing needs at this point it looks like.

There was prior language last quarter about no equity needs, except for 100 million S&P drip.

Didn't see that messaging in this deck and just wondering.

Shahriar Pourreza: We're well below a nine and a half to ten and a half percent return on equity and we need to get that increased. And our rates today are about 14% below our in state peers. So to be honest with you chart, it's too early for us to to know what the bill impact is going to be but we're always looking for ways to minimize the bill impact customers. Got it perfect. And then lastly for me, just on the ONM side and dispensions, 31 cents of benefit is sort of very material year over year.

If anything's changed there what we should expect on that front.

Speaker 4: Yeah, that's still the case. I mean, Jeremy, if you think about where we are relative to our cash flow metrics and our projections, if you think about 14 to 15% FFO to debt, you think about $3.5 billion of proceeds coming in next year from the FET sale, that has significant impact on our financing plan in a meaningful way. And so we have a lot of financial flexibility.

That's still the case.

Jeremy if you think about where we are relative to our cash flow metrics in our projections. If you think about 14% to 15%.

<unk> to debt, Yeah think about $3 5 billion of proceeds coming in next year.

From the SEC T cell.

That has significant impact on our financing plan in a meaningful way and so we have a lot of financial flexibility.

Speaker 4: in the plan and so no new equity requirements fully supports the CAPX plans that we have in place plus.

In the plan and so.

Shahriar Pourreza: I guess how much should we assume with this benefit is tactical so really short term in nature versus how much of it is maybe more perpetual so we can put a multiple on it and assume that benefit carries into you know 25 and beyond. And then any sense on the pension performance year today. Thanks guys, I appreciate it. David. Hey, Char, this is John. Thanks for the question. So, yeah, if you look at our O&M performance year over year, about a 15% reduction from what we incurred in 2022, which is about $200 million, a little bit more than that, I would tell you about 50% of that is associated with timing of work that we accelerated from 23 into 22 and some unique items.

New equity requirements fully supports the Capex plans that we have in place plus <unk>.

Speaker 4: Plus the ability to do some balance sheet improvement initiatives to take out additional holding company debt. So no issues there.

Plus the ability to do some balance sheet improvement initiatives.

Initiatives to take out additional holding company debt so no issues there.

Speaker 6: Got it, that's the top of there. And then continuing along on the cat-back front, just wanted to kind of run through some of the numbers by had it straight here, but looking at that 23 through 25 plan, the 12 billion, how that compares to the 18 billion in the 21 through 25 plan.

Got it that's helpful. There and then continuing along on the Capex front, just wanted to kind of run through some of the numbers.

Shahriar Pourreza: But the other 50% is sustainable savings associated with just productivity improvements, you know, getting contractors off the property, doing the work ourselves. You know, we had some benefits associated with contract terminations, associated with sponsorships and branding relationships that we had. And just a real intense focus on just general business items that we spend. So, I would say about half of it is kind of unique. I would say the other half of it is sustainable savings that we'll build upon as we go into next year.

Had it straight here, but looking at that 23 to 25 plan.

The 12 billion, how that compares to the $18 billion in the 'twenty one to 'twenty five plan.

Speaker 6: I think it might have spent 2.4 and 21, 2.75 and 22.

I think you might've spent $2 $4, 21% to 75% and 22.

Speaker 6: and it looks like a pro-prime plan might employ, it might imply 12.8 cat-backs for 23 to 25, and so the current plan 800 million less, I just wanted to know if I had those numbers right or if the rubber moving piece is here, I should be thinking about, where cat-backs was decreased.

And it looks like your prior plan might employ it might imply 12, eight capex for 'twenty three 'twenty five and so.

The current plan $800 million less just wanted to know if I had those numbers right or if there were other moving pieces here should we be thinking about.

Capex was decreased to any of the different subs.

Speaker 4: CAPEX hasn't been decreased. I mean, if you look at what we're going to spend this year, it's $3.7 billion, and then in 24 and 25, it's going to be $3.9 and $4.1, respectively. So no change in the 24 and 25 capital plans from what we introduced back in February of this year. And in fact, we increased the capital plan in 23 by $300 million.

Capex Hasnt been decreased I mean, if you look at what we're going to spend this year is $3 7 billion and then in 'twenty four 'twenty five is going to be $3 nine and $4 one respectively. So no change in in the 24 and 'twenty five capital plans from what we introduced back in <unk>.

February of this year and in fact, we increase the capital plan and 23 by $300 million.

Shahriar Pourreza: With respect to the pension, the pension performance year to date is about flat. So, you know, that is something that we have our eye on. A lot of that is associated with the interest rate environment, but we're taking that into account as we think about the long term. Perfect. Appreciate it guys. That's all I had in mind to look with the search for the COO and President. Appreciate it. Thank you, Sean. Thank you.

Okay.

Speaker 6: Got it. That's that's helpful. Thanks just last one if I could. I think you talked about incremental, you know, business disclosures that could be, you know, coming forward here. Just wondering if you might be able to offer, you know, any incremental thoughts with regards to, you know, what type of information.

Got it.

That's helpful. Thanks, and just last one if I could I think you talked about incremental business disclosures that could be.

Coming forward here I'm, just wondering if you might be able to offer.

Any incremental thoughts with regards to what type of information we could see there.

Speaker 3: Yeah, so I think what we're going to plan on doing is looking at our segment reporting.

Yes, so I think what we're going to plan on doing is looking at our segment reporting for 2024, and going forward and making it a little simpler and more transparent for the street and quite frankly for us It will reflect how we're going to manage the business going forward. So.

Speaker 3: for 2024 and going forward and making it a little simpler and more transparent for the street and quite frankly for us.

Jeremy Tonet: Our next question comes from Jeremy Tonee with JP Morgan. Please proceed with your question. Hi, good morning. Good morning, Jeremy. Just wanted to touch base, I guess, in the financing plans a bit here, giving you tap acts, refresh. Could you clarify, I guess, what's in the financing needs at this point? It looks like there is prior language last quarter about no equity needs, except for 100 million SIP drip and didn't see that messaging in this deck and just wondering, if anything's changed there, what should we expect on that front?

Speaker 3: It'll reflect how we're going to manage the business going forward.

Speaker 3: So we're probably going to move the segments that is distribution, one transmission, another, and integrated another. And that will allow us to not have to split companies between the segments.

We're probably going to move to segments that is <unk>.

Distribution, one transmission another and integrated another.

That will allow us to not have to split companies between the segments and it will require us to not have to do reconciliations for analysts that cover us investors that are interested in so it just makes the presentation of our results simpler and more in line with how we manage the business.

Speaker 3: And it will require us to not have to do reconciliations for analysts that cover us, investors that are interested in us.

Speaker 3: presentation of our results simpler and more in line with how we manage the business.

Jeremy Tonet: Yeah, that's still the case. I mean, Jeremy, if you think about where we are relative to our cash flow metrics and our projections, if you think about 14 to 15 percent, you know, FFO to debt, you think about $3.5 billion of proceeds coming in next year from the FET sale, you know, that has significant impact on our financing plan in a meaningful way. And so we have a lot of financial flexibility in the plan.

Got it that's very helpful I'll leave it there thanks.

Speaker 6: Got it. That's a that's very helpful. I'll leave it there. Thanks. Perfect. Thank you.

Perfect. Thank you.

Speaker 1: Thank you. Our next question comes in line of Nick Campanella with Barclad is please pursue your question.

Thank you. Our next question comes from the line of Nick Campanella with Barclays. Please proceed with your question.

Okay.

Speaker 7: Hey, good morning everyone, happy Friday. Thanks for taking my question. So I guess thanks for previewing the PGM transmission opportunity. As we kind of think about rolling that into our models, is this opportunity in the hundreds of millions of dollars? And I think you said back half of the plan or any idea that had a size at this point?

Hey, good morning, everyone Happy Friday, and thanks for taking my question. So I guess, thanks, Thanks for previewing the PJM transmission opportunity.

As we kind of think about rolling that into our models and this is this opportunity in the hundreds of millions of dollars and I think you said back half of the plan or any idea how to how to size. It at this point.

Jeremy Tonet: And so no new equity requirements fully supports the CAPX plans that we have in place, plus the ability to do some balance sheet improvement initiatives to take out additional holding company debt. So no issues there. Got it. That's helpful there. And then continuing along on the CAPX front, just wanted to kind of run through some of the numbers if I had it straight here. But looking at the 23 through 25 plan, the 12 billion, how that compares to the 18 billion in the 21 through 25 plan, I think it might have spent 2.4 and 21, 2.75 and 22.

Speaker 3: We're still working through that, Nick. We just got the news last night. We do believe it will be in the hundreds of millions of dollars range. Which side of...

We're still working through that Nick we just got the news last night.

We do believe it will be in the hundreds of millions of dollars range.

Which side of <unk>.

Speaker 3: of 500 million, we're still trying to figure out today. But really it's weight-breaking news for us. We have our engineers working on it today. We hope to be able to provide more detail on that at EEI.

$500 million, we're still trying to figure out today.

But really it's late breaking news for US we have our engineers working on it today, we hope to be able to provide more detail on that.

At EI.

Speaker 7: Great. And then I guess just the cadence of updates from here because I know that there's a lot of moving pieces with, you know, the COO search to your point, some of the resegmenting and everything. Should we still expect fiscal 24 guidance on the fourth quarter and then how do you think about financing, capex, et cetera?

Great and then I guess, just the cadence of updates from here, because I know that theres a lot of moving pieces with.

The.

COO search to your point some of the re segmenting and everything should we still expect fiscal 'twenty for guidance on the fourth quarter and then how do you think about financing capex et cetera.

Jeremy Tonet: And it looks like prior plan might employ, might imply 12.8 CAPX for 23 to 25. And so the current plan 800 million less, I just want to know if I had those numbers right or if the rather moving pieces here, I should be thinking about, where CAPX was decreased to any of the different. No, capex hasn't been decreased. I mean, if you look at what we're going to spend this year's $3.7 billion and then in $24 and $25 is going to be $3.9 and $4.1 respectively.

Speaker 3: Yeah, we will provide that guidance on the fourth quarter call. And look, there's going to be some late breaking news. I'm trying to forecast what it is that we're going to be what the news is going to be. So nobody's surprised.

Yes, we will provide that guidance on the fourth quarter call and look there's going to be some late breaking news I'm trying to forecast what it is that we're going to be.

What the news is going to be so nobody's surprise and of course, we're going to be updating you as that news.

Speaker 3: And of course, we're going to be updating you as that news comes in and becomes available. But I don't want people to be surprised by the positions that we're looking for, how we're going to manage the company going forward, how we're going to report going forward. And that's really why we're forecasting all that. And then we'll update it as the news becomes reality. But we anticipate doing all that here over the next several months.

Comes in it becomes available, but I don't want people to be surprised by the positions that we're looking for how we're going to manage the company going forward. How we're going to report going forward and Thats really why were forecasting all of that and then we'll update it as the news becomes reality, but.

Jeremy Tonet: So no change in the $24 and $25 capital plans from what we introduced back in February of this year. And in fact, we increased the capital plan in $23 by $300 million. Got it. That's that's helpful. Thanks.

We anticipate doing all of that here over the next.

Several months.

Okay, Thanks, and if I could just squeeze one more and just I know that we will get.

Speaker 7: Okay, thanks. And I'd like you to squeeze one more in just I know that we'll get

Unknown Executive: Just the last one if I could. I think you talked about incremental, you know, business disclosures that could be, you know, coming forward here. Just wondering if you might be able to offer, you know, any incremental thoughts with regards to, you know, what type of information we could see there.

Speaker 7: You know 2024 guidance and fourth quarter, but there were just some some more one time items in the fiscal 23 walk. I acknowledge you kind of brought up the pension headwinds and prepared remarks. How do you kind of think about the offset to those those future headwinds like like pension, the tax item, etc. I know we get a better comp on weather next year, but any guidance, you could give would be helpful.

2024 guidance in fourth quarter, but there were just some some more one time items in the fiscal 'twenty three walk I acknowledged you kind of brought up the pension headwinds prepared remarks.

How do you kind of think about the offsets to those those future headwinds like like pension the tax item et cetera, I know, we get a better comp on whether next year, but any guidance you could give would be helpful.

Unknown Executive: Yeah, so I think what we're going to plan on doing is looking at our segment reporting for 2024 and going forward and making it a little simpler and more transparent for the street and, and quite frankly for us, it'll reflect how we're going to manage the business going forward. So we're probably going to move the segments that is distribution one transmission another and integrated another and that will allow us to not have to split companies between the segments.

Speaker 4: So Nick, this is John . So I guess the way I'm thinking about, you know, this year.

So Nick this is John so so I guess the way I am thinking about this year.

Speaker 4: Um, you know, I, if you think about where we are with the pension, if you just look at the year over year weather impact.

No.

If you think about where we are with the pension if you just look at the year over year weather impacts and.

Speaker 4: and you look at what the company has done to offset that in terms of rates and investments, you know, taking advantage of opportunities in the capital markets with low-cost convertible debt and how we deployed that proceeds. If you just look at the tight cost controls that we've put in place year over year, I think that overshadows, you know, the benefits associated with the income tax.

And you look at what the company has done to offset that in terms of rates.

Rates and investments.

Unknown Executive: And it will require us to not have to do reconciliations for analysts that cover us investors that are interested in just makes the presentation of our results simpler and more in line with how we manage the business. Got it. That's, that's very helpful.

Taking advantage of opportunities in the capital markets with low cost convertible debt and how we deployed that.

Proceeds if you just look at the tight cost controls that we've put in place.

Year over year.

Unknown Executive: I'll leave it there. Thanks. Perfect. Thank you.

I think that overshadows the benefits associated with.

Nick Campanella: Our next question comes in line of Nick Campanella with Barclays. Please proceed with your question. Hey, good morning, everyone. Happy Friday. Thanks for taking my question. So I guess thanks, thanks for previewing the the PJM transmission opportunity.

Income taxes.

Speaker 4: And so as you think about next year and beyond, it's right, you're right. We're going to get a benefit from going back to normal weather. We have the rate cases that we have in flight. We have the capital programs.

And so as you think about next year and beyond its right you're right, we're going to get a benefit from going back to to normal weather.

We have the rate cases that we have in flight we have the capital programs associated with our distribution companies that are in our formula rate as well as our transmission point.

Speaker 4: associated with our distribution companies that aren't a formula rate as well as our transmission formula rate cap X and so if you think about where the returns are for the three rate cases that we filed This year and if you look at where the returns are for the cases that will file next year I think you can do the math in terms of what's going to carry the day for the earnings of the company

Unknown Executive: As we kind of think about rolling that into our models, is this is this opportunity in the hundreds of millions of dollars and I think you said back half of the plan or any idea to how to how to size it at this point? We're still working through that, Nick. We just got the news last night. We do believe it will be in the hundreds of millions of dollars range. You know, which side of 500 million, we're still trying to figure out today. But, but really it's late breaking news for us. We have our engineers working on it today.

Formula rate Capex and so if you think about where the returns are for the three rate cases that we filed this year and if you look at where the returns are for the cases that we will file next year I think you can do the math in terms of what's going to carry the day for the earnings of the company.

Great.

Thank you.

Thanks, Nick.

Thank you. Our next question comes from the line of David Arcaro with Morgan Stanley. Please proceed with your question.

Speaker 1: Thank you. Our next question comes in line of David Akara with Morgan Stanley . Please proceed with your question.

Unknown Executive: We hope to be able to provide more detail on that at EEI. Great. And then I guess just the cadence of updates from here because I know that there's a lot of moving pieces with, you know, the COO search to your point, some of the resegmenting and everything. Should we still expect fiscal 24 guidance on the fourth quarter? And then how do you think about financing capex, et cetera? Yeah, we will provide that guidance on the fourth quarter call and look, there's going to be some late breaking news.

Hi, good morning, Thanks, so much for taking my question.

David.

I was wondering if you could maybe give us the latest on the status of the New Jersey rate case, and current thoughts on the settlement potential and maybe specifically on the pension normalization.

Speaker 8: latest on the status of the New Jersey rape case, current thoughts on the settlement potential, and maybe specifically on the pension normalization mechanism, how optimistic you are.

And how optimistic you are in.

And that coming through.

So as you know.

Speaker 3: So as you know, they've stayed the schedule for now to allow settlement discussions to continue and we're working all of those things that you just mentioned are still in play and we're still working engaging with staff, interveners, others to try and bring a successful conclusion to that case without having to take it through at FJudication.

Stayed the scheduled for now to allow settlement discussions to continue and we're working all of those things that you just mentioned there is still.

Unknown Executive: I'm trying to forecast what it is that we're going to be what the news is going to be. So nobody's surprised. And of course, we're going to be updating you as that news comes in and becomes available. But I don't want people to be surprised by the positions that we're looking for, how we're going to manage the company going forward, how we're going to report going forward. And that's really why we're forecasting all that and then we'll update it as the news becomes reality.

In play and we're still working engaging with.

<unk> staff and intervenors, others to try and bring a successful conclusion to that case without having to take it through its adjudication.

Speaker 8: Okay, sounds good. And then also curious if you could give the latest feedback from rating agencies on prospects going forward to achieve investment grade ratings at the parent and how the FFO to debt outlook is sitting right now as you're as you're heading into 2024.

Okay sounds good and then also curious if you could give your latest feedback from rating agencies on.

Unknown Executive: But we anticipate doing all that here over the next several months. Okay, thanks, and I'd like to just squeeze one more in. I know that we'll get, you know, 2024 guidance and fourth quarter, but there were just some more one-time items in the fiscal 23 walk. I acknowledge you kind of brought up the pension headwinds and prepare remarks. How do you kind of think about the offset to those future headwinds like pension, the tax item, et cetera? I know the guidance you could give would be helpful.

Prospects going forward to achieve investment grade ratings at the parent and how the <unk> to debt.

Outlook.

Sure.

Sitting right now is here as youre heading into 'twenty 'twenty four as well.

Speaker 4: Yeah, I think we continue to have dialogue with the rating agencies. Those have been constructive conversations.

Yes, I think we continue to have dialogue with the rating agencies.

Those have been constructive conversations.

Speaker 4: They have our projections. It clearly shows that we're gonna be in that 14 to 15% in 24 and 25.

They have our projections.

It clearly shows that we're going to be in that 14% to 15% in 'twenty four and 'twenty five.

Speaker 4: I will say that we've kind of taken a little bit of a step back this year in terms of our performance in the metrics, and a lot of that is because of the unseasonable weather, the fact that we made a voluntary pension contribution.

I will say that we've kind of taken a little bit of a step back this year in terms of our performance in the metrics and a lot of that is because of the unseasonable weather. The fact that we made a voluntary pension contribution.

Unknown Executive: So Nick, this is John. So I guess the way I'm thinking about, you know, this year, you know, if you think about where we are with the pension, if you just look at the year over year weather impacts and you look at what the company has done to offset that in terms of rates and investments, you know, taking advantage of opportunities in the capital markets with low cost, convertible debt and how we deployed that proceeds.

We've.

Speaker 4: We had some one-off items associated with severance associated with the voluntary retirement program. So if you kind of take those out of the mix, I mean we're back closer to that 11% range.

We had some one off items associated with severance associated with the voluntary retirement program. So if you kind of take those out of the mix I mean, we're back closer to that 11% range.

Speaker 4: But clearly, you know, with the rate cases that we have in flight, which we, you know, risk adjusted in terms of what we're going to get, the fact that we're going to get now 100% of the FET proceeds in 2024, whereas before it was going to be about 50% next year, 50% in 2025, so we'll have an opportunity to deploy all that.

But clearly with the rate cases that we have in flight, which we risk adjusted in terms of what we're going to get the fact that we are going to get now 100% of the proceeds in 2024, whereas before it was going to be about 50% next year, 50% in 2025.

Unknown Executive: If you just look at the tight cost controls that we've put in place year over year, I think that overshadows, you know, the benefits associated with the income taxes. And so as you think about next year and beyond, it's right, you're right. We're going to get a benefit from going back to normal weather. We have the rate cases that we have in flight. We have the capital programs associated with our distribution companies that earn a formula rate as well as our transmission formula rate capex.

We'll have an opportunity to deploy all of that.

Speaker 4: it clearly shows that we'll be in the 14 to 15 percent range next year.

It clearly shows that will be in the 14% to 15% range next year.

Okay excellent I appreciate that color. Thanks, so much.

David.

Speaker 1: Thank you. Our next question comes from the line of Angie Storansky with Seaport Global. Please proceed.

Thank you. Our next question comes from the line of Andy Stern Ski with Seaport Global. Please proceed with your question.

Unknown Executive: And so if you think about where the returns are for the three rate cases that we filed this year, and if you look at where the returns are for the cases that we'll file next year, I think you can do the math in terms of what's going to carry the day for the earnings of the company. Thank you. Thanks, thanks, thanks.

Speaker 9: Thank you. Just following up on that question. I'm looking at your financials. I mean, the FFO looks particularly weak for the first nine months, and I hear the explanation of why that is.

Thank you just following up on that after FERC that question I'm looking at your financials.

On the asset side looks particularly weak for the first nine months.

Unknown Executive: Thank you.

The explanation of why that is.

Speaker 9: But I thought that we are waiting for some improvement, not even to hit that 14 to 15%, but just some improvement in the FFO to that, to warrant any upgrades. And it doesn't seem like it will happen this year. Is that fair to say, that the trailing 12 months doesn't seem to have any upward momentum for now?

But.

I thought that we are waiting for some improvement not even to hit that 14% to 15%, but you saw an improvement in the <unk> to that too.

David Arcaro: Our next question comes in line of David Orcaro with Morgan Stanley. Please proceed with your question.

David Arcaro: Good morning. Thanks for taking my question. Good morning, David. You know, I was wondering if you could maybe give it the latest on the status of the New Jersey rate case, current thoughts on the settlement potential and maybe specifically on the pension normalization mechanism, how optimistic you are in that coming through. So we're, as you know, they've stayed the schedule for now to allow settlement discussions to continue. And we're working all of those things that you just mentioned are still in play. And we're still working engaging with staff, interveners, others to try and bring a successful conclusion to that case without having to take it the right for due to occasion. Okay, sounds good.

Lauren any upgrades and it doesn't seem like it will happen. This year is that fair to say that the trailing 12 months does it seem to have any.

Momentum for now.

Yes, like I said I think the trailing 12 months and where we are this year, we have taken a little bit of.

Speaker 4: Yeah, like I said, I think the trailing 12 months and where we are this year, we have taken a little bit of a step back. Some of that was planned because we wanted to make the voluntary pension contribution.

Of a step back some of that was planned because we wanted to make the voluntary pension contribution.

Speaker 4: Some of it was associated with non-recurring items such as the severance that I mentioned. That's really going to have about a one-year payback if you think about it. So that'll improve the metrics next year. And you can't discount the impact of weather and what that's done to cash flow, right, in terms of the lower weather-related sales. So I understand your question, but we're very confident in the plan.

Some of it was associated with nonrecurring items, such as the severance that I mentioned is really going to have about a one year payback. If you think about it.

So that will improve the metrics next year and you can't discount the impact of of.

Of weather and what's that done to cash flow right in terms of the lower weather related sales. So I understand your question, but we're very confident in the plan.

David Arcaro: And then also curious if you could give the latest feedback from rating agencies on prospects going forward to achieving investment ratings at the parent and how the FFO did that outlook is sitting right now as you're heading into 2024 as well. Yeah, I think we continue to have dialogue with the rating agencies. Those have been constructive conversations. They have our projections. It clearly shows that we're going to be in that 14 to 15% in 24 and 25.

Speaker 4: We're very confident in the metrics that we've provided to the rating agencies.

We're very confident in the metrics that we provided to the rating agencies.

Speaker 4: And, you know, we'll see where we get to.

And.

And we will see where we get to.

Speaker 9: Okay. And my bigger question here, and I know that this is what we're all sort of debating, is that, you know, you obviously have this bullish EPS and now dividend growth plan. It's pretty much contingent on the outcome of the distribution case in Ohio, and we won't know that what happened there until probably very late 2025.

Okay, and then my bigger question here.

No doubt.

We're all dealing with that.

You obviously have this.

I'm bullish.

And now the dividend growth plan.

Sure.

Pretty much contingent on the outcome of the distribution case in Ohio, and we wont know that.

David Arcaro: I will say that we've kind of taken a little bit of a step back this year in terms of our performance in the metrics. And a lot of that is because of the unseasonable weather, the fact that we made a voluntary pension contribution. You know, we've, we had some one off items associated with severance associated with the voluntary retirement program. So if you kind of take those out of the mix, I mean, we're back closer to that 11% range.

There until.

How does that relate to 2025 so.

Speaker 9: um how how do we get comfortable you know with that validation of your growth profile between now and

How how do we get comfortable with that validation of your growth profile between now and then I'll.

Speaker 3: I'll just, so, I don't think we're all debating that at all. I just disagree with that. The things that you look for and how we hit our growth rate are how we perform in the rate cases that are before us. And you're going to have signpost to that long before the end of 25.

So I don't think were all debating that at all.

Just disagree with that.

The things that you look for and how we hit our growth rate.

How we perform in the rate cases that are before us and youre going to have sign post to that long before the end of 'twenty five we have.

David Arcaro: But clearly, you know, with the rate cases that we have in flight, which we, you know, risk adjusted in terms of what we're going to get, the fact that we're going to get now 100% of the FET proceeds in 2024. Whereas before it was going to be about 50% next year, 50% in 2025. So we'll have an opportunity to deploy all that. It clearly shows that we'll be in the 14 to 15% range next year. Okay, actually, and I appreciate that color. Thanks so much. Thank you, David.

Speaker 3: We have the Ohio ESP grid mod two. We have the New Jersey case, the West Virginia case. And if we're performing well on those, I think you'll be able to see, you'll be able to get an indication that we're being successful in, in prosecuting rate cases, engaging with staffs and intervenors and come to positive outcomes. So no need to wait until the end of 2025.

The Ohio, ESP grid Mod to we have the New Jersey case, the West Virginia case, and if we're performing well on those I think youll be able to see youll be able to get an indication that we're being successful in prosecuting rate cases, engaging with staff and intervenors and come to positive outcome. So.

No need to wait until the end of 2025.

And then just lastly on the tax benefit.

Speaker 9: And then just last day on that tax benefit, very big tax benefits, and I understand that, you know, you're trying to to address the, the weather impact. I mean, lots of headlines actually this year, but but you're also flexing the, the, the, the, the, I mean, did you expect to have this tax benefits this year again? It's and is it cash related?

Tax benefits.

And I understand that.

Trying to to address.

Andy Storozynski: Thank you. Our next question comes from line of Andy Storozynski with the Seaport Global. Please proceed with the question.

Their impact I mean lots of headwinds actually does CX.

But youre also flexing the Mds beyond the O&M levers I mean did you expect to have this tax benefits this year.

Andy Storozynski: Thank you just following up on that effortful to that question. Well, I'm looking at the financial, I mean, as a photo for 60 weeks, right? For the first nine months, and I hear the explanation of why that is. But I thought that we are waiting for some improvement, and not even to hit the 14 to 15% but just some improvement in the FFO to that. So to warrant any upgrades, and it doesn't seem like it will happen this year, is that first to say that the trailing 12 months doesn't seem to have any upward momentum for now.

And those are cash related.

Speaker 4: So so at the beginning of the year, we did not anticipate the effective tax rate being at that 17 18%. We anticipated it being probably in that 19 to 19 and a half percent range. So so some of the benefit that we achieved this year was not planned, but something that came up mid year, and that the team executed on.

So so at the beginning of the year, we did not anticipate the effective tax rate being at that 17%, 18%, we anticipated it being probably in that <unk> 19 to <unk>.

19, 5% range. So so some of the benefit that we achieved this year was.

Not plan, but something that came up mid year and that the team executed on.

Speaker 4: I would tell you a long term, long term though Angie, if you think about our blended effective tax rate, it's probably gonna be 17, 18% this year. But longer term, it'll be a more normal tax rate in that 20 to 21% range. And that's the review of...

Andy Storozynski: Yeah, like I said, I think the trailing 12 months and where we are this year, we have taken a little bit of a step back. Some of that was planned because we wanted to make the voluntary pension contribution. Some of it was associated with non-recurring items, such as the severance that I mentioned. It's really going to have about a one year payback if you think about it. So that'll improve the metrics next year.

I would tell you the long term long term, though Angie if you think about our blended effective tax rate is probably going to be.

17%, 18% this year, but longer term it will be a more normal tax rate in that 20% to 21% range.

And that is already reflected on your cost plan.

Correct.

Speaker 10: along with those additional costs that will come with those additional managers that you're hiring for the utilities and the COO, right? All of this is reflected in your EPS growth plan. It's all in there, Angie. Awesome.

Along with those additional costs that will come with that.

Andy Storozynski: And you can't discount the impact of weather in it, what's that done to cash flow, right? In terms of the lower weather-related sales. So I understand your question, but we're very confident in the plan. We're very confident in the metrics that we've provided to the rating agencies, and we'll see where we get to.

To keep those dose at the show.

I noticed that youre hiring for the utilities.

The CLO right all of this is reflected in your life.

And the EPS growth.

It's all in there Angie.

Thank you thank.

Thank you.

Yes.

Speaker 1: Thank you. Our next question comes from line of Jeremy Toney with JP Morgan. Please proceed with your question.

Thank you. Our next question comes from the line of Jeremy Tonet with Jpmorgan. Please proceed with your question.

Unknown Executive: Okay, and my bigger question here, and I know that this is what we're all sort of debating, is that you obviously have this bullish EPS, and now dividend growth plan. It's pretty much contingent on the outcome of the distribution case in Ohio, and we won't know that, what happened there until probably very late 2025. So how do we get comfortable with that validation of your growth profile between now and then? I don't think we're all debating that at all.

Speaker 6: Hi, good morning. Thanks for squeezing me back in here. Just wanted to kind of clarify, I guess, the cadence of updates of what we should be expecting for updates on 4Q or for EI. Just wondering, you know, when, you know, 24, I guess future colors, as far as long-term plan revisions might be, if that's a 4Q event, just wanted to kind of clarify some of the prior comments.

Hi, Good morning, Thanks for squeezing me back in here just wanted to kind of clarify I guess, the cadence of updates of what we should be expecting.

For ups.

Updates on <unk> for EI, just wondering when 24.

I guess future color as far as long term plan revisions might be if that's a <unk> event just wanted to clarify some of the prior comments there.

Speaker 3: You know, we're going to we're going to provide an update on the fourth quarter earnings call. So we'll do we'll do specific guidance for 24 and we'll also update the capital plan at that.

We're going to we're going to provide an update on the fourth quarter earnings call. So we will do we will do specific guidance for 'twenty four and we'll also update the capital plan at that time.

Unknown Executive: I just disagree with that. The things that you look for in how we hit our growth rate are how we perform in the rate cases that are before us, and you're going to have signpost to that long before the end of 25. We have the Ohio ESP, Gridmont 2, we have the New Jersey case, the West Virginia case, and if we're performing well on those, I think you'll be able to see, you'll be able to get an indication that we're being successful in prosecuting rate cases, engaging with staffs and interveners, and come to positive outcomes. So no need to wait until the end of 2025.

Speaker 6: got it in this can include everything EPS long term EPS Kager as well or just those two items rose.

Got it.

This could include everything EPS long term EPS CAGR as well or just those two items really the focus.

Speaker 3: Yeah, we're there's going to be no change in the long term EPS Kager.

Yes, we're there's going to be no change in the long term EPS CAGR.

Got it great very helpful. I'll leave it there. Thank you.

Speaker 6: Got it. Great. Very helpful. I'll leave it there. Thank you. Thanks, Jeremy.

Thanks, Jeremy.

Thank you. Our next question comes from the line of Anthony <unk> with Mizuho Securities. Please proceed with your question.

Speaker 1: Thank you. Our next question comes from the line of Anthony Crowder with Missouri Health Securities. Please proceed with your question.

Speaker 11: Hey, good morning, just hopefully two quick questions on one on slide 25, and I'm not trying to run your rate case decisions in the jurisdictions, but when do you kind of think that we could see like normalized earnings coming from the utilities or maybe worded a different way? Do you guys have a target of what you think you could earn across the opcode?

Hey, good morning, just hopefully two quick questions on one on slide 25.

I'm not trying to run your rate case decisions in new jurisdictions, but.

Unknown Executive: And then just last day on that tax benefit, the very big tax benefits, and I understand that you're trying to address the weather impact. I mean, lots of headlines actually this year, but you're also flexing the on the ONM lever. I mean, did you expect to have this tax benefit this year? Again, and is it cash related? So, at the beginning of the year, we did not anticipate the effective tax rate being at that 17, 18%, we anticipated it being probably in that 19 to 19 and a half percent range.

When you kind of things that we could see like normalized earnings coming from the utilities or maybe we're in a different way do you guys have a target of what you think you could earn across the op codes.

Speaker 12: Yeah, I think we can be earning in that.

Yes.

I think we can be earning in that.

Speaker 12: nine and a half to low tens range in terms of ROEs. And so if you look at this, that's a significant component of earnings growth is going back and having these rate cases, updating our rate base, getting ROEs higher, getting current costs reflected in rates, and adjusting what you can see is, you know, lower than normal earned ROEs on that slide.

$9 five to low teens range in terms of ROE and so if you look at this.

Significant component of our earnings growth is going back and having these rate cases updating our rate base getting.

ROE higher getting.

Current costs reflected in.

Unknown Executive: So, some of the benefit that we achieved this year was not planned, but something that came up mid-year and that the team executed on. I would tell you a long term, long term though Angie, if you think about our blended effective tax rate, it's probably going to be 17, 18% this year, but longer term, it'll be a more normal tax rate in that 20 to 21% range. And that's where you reflected in the growth plans.

In rates and adjusting what you can see as well.

Lower than normal earned ROE on that slide.

Speaker 13: I guess you've answered my, my, sorry.

I guess, you've answered my alright.

Alright.

Speaker 12: No, it's the normal stuff that utilities do, Anthony. It's, it's just the normal work pale that you expect us to do. We, we invest for the benefit of our customers. We then operate, we then recover and finance. And that's what we'll be doing. This part of the presentation is the recover, where we go back in to get our hard work reflected in, in current rates.

No its the normal stuff that utilities do Anthony.

It's just the normal.

Work Pail that you expect us to do we invest for the benefit of our customers. We then.

Operate we then recover and finance and that's what we'll be doing this part of the presentation is the recover where we go back in to get our hard work reflected in current rates.

Unknown Executive: Correct. Along with those additional costs that will come with those additional managers that you're hiring for the utilities and the COL, right? All of this is reflected in your EPS growth plan. It's all in there Angie.

Okay, and I think that actually answered my second question I think earlier in one of the slides I apologize I forgot the number.

Speaker 11: Okay, I think that actually answers my second question of, I think earlier in one of the slides, I apologize, I forgot the number. You guys give us our, you know, appreciate the detailed rate-based growth of about 7%. And to Jeremy's question earlier about the long-term growth rate of earnings growth sort of six to eight, I guess how, I was curious if you think there's gonna be any lag or spread between the rate-based growth and the earnings growth, but it seemed that they are aligned because of this improvement in ROE. Am I thinking of that correctly?

Unknown Executive: Thank you.

You guys gave us.

Appreciate the detailed rate base growth of about 7% and to Jeremy's question earlier about.

The long term growth rate of earnings growth rate of six to eight I guess.

Jeremy Tonet: Our next question comes from line of Jeremy Tone with JP Morgan. Please proceed with your question.

I was curious if you think there's going to be any lag or spread between the rate base growth and the earnings growth, but it seems that they are aligned because of this improvement in our ROE.

Unknown Executive: Hi, good morning. Thanks for squeezing me back in here. Just wanted to kind of clarify, I guess, the cadence of updates of what we should be expecting for updates on 4Q or for EI. I just wondering, you know, when, you know, 24, I guess future colors bars long term plan revisions might be if that's a 4Q event. Just want to kind of clarify some of the prior comments there. Yeah, we're going to, we're going to provide an update on the fourth quarter earnings call.

Am I thinking of that correctly, yes. So we're getting ahead of US now right. We have very active rate cases to get what you reflected on slide 25 up to more normal levels.

Speaker 12: Yeah, so we're getting ahead of this now, right? We have very active rate cases to get what you reflected on slide 25 up to more normal levels.

Speaker 12: And as we do that, we'll have some growth associated with that. And then going forward, we said rate base growth for 24, 25 was going to be about 7%. And we're looking to add to that as we go forward. So a combination of continued investment, growth and rate base.

And as we do that we will have some growth associated with that and then going forward. We said rate base growth for 'twenty four 'twenty five was going to be about 7% and we're looking to add to that as we go forward. So a combination of continued investment growth in rate base.

Unknown Executive: So we'll do, we'll do specific guidance for 24 and we'll also update the capital plan at that time. Got it in this can include everything EPS long term EPS Kager as well or just those two items really the focus. Yeah, we're, we're there's going to be no change in the long term EPS Kager. Got it. Great. Very helpful. I'll leave it there. Thank you. Thanks Jeremy. Thank you.

Speaker 3: active rate cases for the foreseeable future and continuing to invest for the benefit of our customers. All of that will put us in that six to eight percent long-term growth rate.

Active rate cases for the foreseeable future and continuing to invest for the benefit of our customers all of that.

We will put us in that 6% to 8% long term growth rate.

Speaker 11: Great. Thanks so much for taking my question and looking forward to seeing you DEI. Thanks.

Great. Thanks, so much for taking my question and looking forward to seeing it.

Thanks, Anthony we are too.

Speaker 1: Thank you. Our next question comes from the line of Greg Auro with UBS. Please distribute your question. Hi, Brian .

Thank you. Our next question comes from the line of Gregg <unk> with UBS. Please proceed with your question.

Hi, Brian Hi, John.

Anthony Crowdell: Our next question comes from line of Anthony Crowdell with Mr. Who's security. Please proceed with your question. Okay, good morning.

Hi, Graham.

Just.

Speaker 14: Brian , where do you stand in terms of the key management hires that you're looking to do? I know you announced two of them already. Are there more to come there? And then just secondly, how are you thinking about?

Brian.

Do you.

Stan in terms of.

Anthony Crowdell: Just, just hopefully two quick questions on on one onsite 25 and I'm not trying to run your, your rate case decisions and the jurisdictions. But when, when you kind of think that we could see like normalized earnings coming from the utilities or maybe where the different way is you guys have a target of what you think you could earn across the up goes. Yeah, I think we can be earning in that nine and a half to low tens range in terms of our ways.

The key management hires that Youre looking to do I know you announced.

Two of them already or are there more.

To come there and then just secondly.

How are you thinking about.

Speaker 14: moving beyond the sort of legacy investigations that remain in DUC.

Moving beyond the.

Sort of legacy investigations that remain in.

Do you see.

Speaker 14: You know, do you see concerns with that at this point? Thank you.

Do you see concerns with that at this point. Thank you.

Speaker 12: Thank you, Greg. Appreciate that. In terms of the key hires, I'm spending and our senior executive team here is spending a significant amount of our time recruiting. I feel some of this we need to do sequentially. I need to get a COO in place, President of FE Utilities in place.

Thank you Greg I appreciate that in terms of the key hires I'm spending.

Anthony Crowdell: And so if you look at this, that's a significant component of earnings growth is going back in having these rate cases, updating our rate base, getting. R O E's higher getting current costs reflected in in rates and adjusting what you can see is, you know, lower than normal earned R O E's on that slide. No, it's the normal stuff that utilities do, Anthony. It's just the normal workpale that you expect us to do.

Senior executive team here is spending a significant amount of our time recruiting.

I feel some of this we need to do sequentially I.

I need to get a COO in place President <unk> utilities in place and I'd like those people to help us recruit than the people who are going to be reporting to the president of utilities and there'll be the five people running our major businesses, so sort of and by the way we're not waiting to interview a candidate pool for those five people.

Speaker 12: And I'd like those people to help us recruit them, the people who are going to be reporting to the president of FE Utilities, and they'll be the five people running our major businesses. So.

Speaker 12: And by the way, we're not waiting to interview a candidate pool for those five people. We're proceeding ahead on that as well. So sequentially trying to get the COO, president of FE Utilities, then next the people to run our five businesses.

We're proceeding ahead on that as well so.

Sequentially trying to get the co president of Utilities, then next the people to run our five businesses.

Anthony Crowdell: We invest for the benefit of our customers. We then operate, we then recover and finance. And that's what we'll be doing. This part of the presentation is the recover where we go back in to get our hard work reflected in current rates. Okay, I think that actually answers my second question of, I think earlier in one of the slides, I apologize, I forgot the number. You guys give us, you know, appreciate the detailed rate base growth of about seven percent.

Speaker 12: and get those people seated as quickly as possible. But moving very much forward on that, it's active. We're trying to get this done as quickly as possible. But at the same time, making sure that we're getting the right people in the place.

And get those people ceded as quickly as possible, but moving very much forward on that it's active we're trying to.

Get this done as quickly as possible, but at the same time, making sure that we're getting the right people in place who will.

Speaker 3: who will bring the right skills to bear for the things that we're trying to do. And we have a very strong candidate pool for all of those positions that we're recruiting for. So I'm confident we'll get success. The timing of it is gonna be here in the, I'd say in the near term, and hope to be able to make those announcements, you know, shortly.

Bring the right skills to bear for the things that we're trying to do and we have a very strong candidate pool for all of those positions that were recruiting for so I am confident we will get success. The timing of it is going to be here and I would say in the near term and hope to be able to make those announcements shortly in terms of <unk>.

Anthony Crowdell: And the Jeremy's question earlier about the long term growth rate of earnings was sort of six to eight. I guess how I was curious if you think there's going to be any lag or spread between the rate base growth and the earnings growth. But it seemed that they are aligned because of this improvement. And I think you're that correctly. Yeah, so we're getting ahead of this now, right? We have very active rate cases to get what you reflected on slide 25 up to more normal levels.

Speaker 12: In terms of putting the past behind us, a lot of that heavy lifting had been done by the board and the management team before I got here. There's active engagement with the OOCIC. We're providing our updates per the DPA with the...

The past behind US a lot of that heavy lifting had been done by.

Board and the management team before I got here.

His active engagement with.

The OS CIC, we're providing our updates for the DPA with.

Anthony Crowdell: And as we do that, we'll have some growth associated with that. And then going forward, we, you know, we said, rate base growth for 2425 was going to be about seven percent. And we're looking to add to that as we go forward. So a combination of continued investment growth and rate base active rate cases for the foreseeable future and continuing to invest for the benefit of our customers. All of that will put us in that six to eight percent long term growth rate.

Speaker 3: with the Department of Justice and then for the remaining litigation that's out there, we're you know moving forward with that, trying to settle what we can, but you know put that past behind us and strongly focused on the future and I don't anticipate any unexpected hiccups there.

With Department of Justice and then for the remaining litigation that's out there.

Moving forward with that trying to settle what we can.

But.

Put that past behind us and strongly focused on the future and I don't anticipate any unexpected hiccups there.

Okay. Good luck thanks.

Thanks, Greg.

Speaker 1: Our next question comes from the line of Steve Fleischman with Wolf Research. Please proceed with your question.

Thank you. Our next question comes from the line of Steve Fleishman with Wolfe Research. Please proceed with your question.

Unknown Executive: Great. Thanks so much for taking my question and looking forward to seeing the DEI. Thanks, Anthony. We are too.

Gregg Orrill: Thank you.

Yes, hi, good morning.

Speaker 4: Yeah, hi, good morning. Morning, Steve. Just the good morning. The

Good morning, Steve.

Gregg Orrill: Our next question comes in line of Greg Auro with UBS. Please proceed with your question. Hi, Brian. Hi, John. Just Brian, where do you stand in terms of, you know, the key management hires that you're looking to do. I know you announced two of them already are, are there more to come there. And then just secondly, how are you thinking about moving beyond the sort of legacy investigations that remain and do you see, you know, do you see concerns with that at this point. Thank you. Thank you, Greg. Appreciate that.

Good morning.

<unk>.

Speaker 15: Cases in Ohio, the grid mod, and the ESP filing, can you just talk to the schedule there coming up? And I know.

Cases in Ohio, the grid Mod and the ESP filing can you just talk to the schedule there.

Coming up and I know.

Some of the other utilities have actually been able have been able to settle ESP and alike is that.

Speaker 15: Some of the other utilities I've actually been able, have been able to settle ESP's in the like, is that possible?

Possible for Ya.

Speaker 3: Yeah, so we're we're in the midst of ESP five right now. That case is in flight. We've seen interveners testimony. I think staff testimony comes out on Monday.

Yes, so we're in the midst of ESP.

Five right now that case is in flight we've seen intervenor testimony. Thank staff testimony comes out on Monday.

Speaker 14: But as you would expect us to do, we are actively engaged in settlement discussions in those cases, trying to positively engage people like the staff and the other interveners and hopeful that we'll be able to come to a settlement similar to what the other companies have settled at. I don't see any reason to think that we won't be able to do that. And then on the grid mod, we'd have.

But as you would expect us to do we are actively engaged.

In settlement discussions in those cases trying to positively engage people like the staff and other intervenors and hopeful that we'll be able to come to a settlement similar to what the other companies have settled at I don't I don't see any reason to think that we won't be able to do that.

Gregg Orrill: In terms of the key hires, I'm spending and our senior executive team here is spending a significant amount of our time recruiting. I feel some of this we need to do sequentially. I need to get a COO in place, president of FU utilities in place. And I'd like those people to help us recruit then the people who are going to be reporting to the president of FU utilities. And there'll be the five people running our major businesses.

And then on the grid Mod would that be.

Part of the same thing or separate.

Speaker 12: Same thing, slightly behind where we are in ESP-5, but as soon as we get through the ESP, we'll get to grid mod and hope to be able to settle that as well. There's nothing, Steve, that's controversial in these. It's normal course of business, trying to update the rate base and costs that are reflected in those riders, and then hopefully leave those in place until we get to the...

Same thing slight slightly behind where we are on ESP five but as soon as we get through the ESP will get the grid mod and hope to be able to settle that as well.

Gregg Orrill: So sort of, and by the way, we're not waiting to interview a candidate pool for those five people. We're proceeding ahead on that as well. So sequentially trying to get the COO president of FU utilities. Then next, the people to run our five businesses and get those people seated as quickly as possible. But moving very much forward on that. It's active. We're trying to get this done as quickly as possible. But at the same time, making sure that we're getting the right people in the place who will bring the right skills to bear for the things that we're trying to do. And we have a very strong candidate pool for all of those positions that we're recruiting for. So I'm confident we'll get success.

There is nothing Steve that's controversial in these.

It's it's normal course of business trying to update.

The rate base and costs that are reflected in those riders and then hopefully leave those in place until we get to the.

Speaker 3: May 24 rate case and then try to get those cleared out and get them reflected in base rates.

May 24 rate case, and then try to get those cleared out and get them reflected in base rates.

Got it okay. Thank you.

Thanks, Steve.

Thank you ladies and gentlemen, this concludes our question and answer session and concludes our call today, a replay of the call will be available on first <unk> Investor Relations website. Thank you for your participation you may now disconnect your lines.

Speaker 1: Thank you. Lanes and gentlemen, this concludes our question and answer session and concludes our call today. A reply of the call will be available on first-enterities investor relations website. Thank you for your participation. You may now disconnect your lines.

Gregg Orrill: The timing of it is going to be here in the, I'd say in the near term and hope to be able to make those announcements, you know, shortly in terms of putting the past behind us a lot of that heavy lifting had been done by the board and the management team before I got here. There's active engagement with the OOCIC. We're providing our updates for the DPA with the Department of Justice.

Okay.

Gregg Orrill: And then for the remaining litigation that's out there, we're, you know, moving forward with that, trying to settle what we can. But, you know, put that past behind us and strongly focused on the future. And I don't anticipate any unexpected hiccups there. Good luck, thanks. Thanks, Great. Thank you.

Steven Fleishman: Our next question comes from Ryan, Steve Fleishman, with Wolf Research. Please proceed with your question. Yeah, hi, good morning. Good morning, Steve. Just the good morning. The cases in Ohio, the grade mod and the ESP filing. Can you just talk to the schedule there? Coming up and I know some of the other utilities have actually been able, have been able to settle ESP in the light. Is that possible for you? Yeah, so we're in the midst of ESP five right now.

Steven Fleishman: That case is in flight. We've seen interveners testimony. I think staff testimony comes out on Monday. But as you would expect us to do, we are actively engaged in settlement discussions in those cases, trying to positively engage people like the staff and the other interveners. And hopeful that we'll be able to come to a settlement similar to what the other companies have settled at. I don't, I don't see any reason to think that we won't be able to do that.

Steven Fleishman: And then on the grid mod, would that be kind of part of the same thing or separate? Same thing, slightly behind where we are in ESP five, but as soon as we get through the ESP, we'll get the grid mod and hope to be able to settle that as well. There's nothing Steve that's controversial in these. It's, it's normal course of business, trying to update the rate base and costs that are reflected in those riders.

Steven Fleishman: And then hopefully leave those in place until we get to the May 24 rate case and then try to get those cleared out and get them reflected in in base rates. Got it. Okay. Thank you. Thanks, Steve. Thank you.

Operator: Ladies and gentlemen, this concludes our question and answer session and concludes our call today. A replay of the call will be available on first entities in the best relations website. Thank you for your participation.

Operator: You may now disconnect your lines.