Q4 2023 PPL Corp Earnings Call

Speaker Change: [music].

Operator: Good day, and welcome to the PPL Corporation fourth quarter 2023 earnings conference call. All participants will be in a listen-only mode.

Good day and welcome to the PPL Corporation fourth quarter 2023 earnings Conference call.

All participants will be in a listen only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone.

So do you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on a touchtone phone.

Operator: To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Andy Ludwig, Vice President, Investor Relations. Please go ahead.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Andy Ludwig Vice President Investor Relations. Please go ahead.

Andy Ludwig: Good morning, everyone, and thank you for joining the PPL Corporation conference call on the fourth quarter and full year 2023 financial results. We provided slides for this presentation in the investor section of our website. We'll begin today's call with updates from Vince Sorgi, PPL President and CEO, and Joe Bergstein, Chief Financial Officer, and conclude with a Q&A session following our prepared remarks. Before we get started, I'll draw your attention to slide two and a brief cautionary statement. Our presentation today contains four forward-looking statements about future operating results or other future events, but actual results may differ materially from these forward-looking statements. Please refer to the appendix of this presentation and PPL's SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward-looking statement. We will also refer to non-GAAP measures, including earnings from ongoing operations or ongoing earnings, on this call.

Andy Ludwig: Good morning, everyone and thank you for joining the PPL Corporation conference call on fourth quarter and full year 2023 financial results.

Andy Ludwig: We have provided slides for this presentation on the investors section of our website.

Andy Ludwig: We'll begin today's call with updates from Vince Sorgi, PPL, President and CEO, and Joe Bergstein, Chief Financial Officer.

Andy Ludwig: And conclude with a Q&A session following our prepared remarks.

Speaker Change: Before we get started.

Speaker Change: Or are your attention to slide two in our brief cautionary statement.

Speaker Change: Our presentation today contains forward looking statements about future operating results or other future events.

Speaker Change: Actual results may differ materially from these forward looking statements.

Speaker Change: Please refer to the appendix of this presentation and Ppl's SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward looking statements.

Speaker Change: We will also refer to non-GAAP measures, including earnings from ongoing operations or ongoing earnings on this call.

Vincent Sorgi: Reconciliations to the Comparable Gap Measures, please refer to the, I'll now turn the call over to, Thank you, Andy, and good morning, everyone. Welcome to our fourth quarter and year-end investor call. I'm excited for today's call as we closed out 2023 in strong fashion, and our future continues to look very bright, and I look forward to highlighting why that is on today's call. Turn to slide four.

Speaker Change: A reconciliation to the comparable GAAP measures.

Speaker Change: Please refer to the appendix.

Speaker Change: I'll now turn the call over to Vince.

Vincent Sorgi: Thank you Andy and good morning, everyone.

Vincent Sorgi: Welcome to our fourth quarter and year end investor update.

Vincent Sorgi: I'm excited for today's call as we closed out 2023, and strong fashion and our future continues to look very bright.

Vincent Sorgi: And I look forward to highlighting why that is on todays call.

Vincent Sorgi: Turning to slide four.

Vincent Sorgi: I'm very proud of what our PPL team was able to accomplish in 2020. In short, it was a year of challenges met and promises kept. Most importantly, we delivered electricity and natural gas safely and reliably to our more than 3.5 million customers. This included top quartile T&D reliability at each of our utilities, including record reliability for our companies in Kentucky and Rhode Island and Top Decile Performance in Pennsylvania. Our generation reliability in Kentucky was among the very best in the nation.

Vincent Sorgi: I'm very proud of what our P. P. L team was able to accomplish in 2023.

Vincent Sorgi: In short it was a year of challenges met and promises kept.

Vincent Sorgi: Most importantly, we delivered electricity and natural gas safely and reliably to our more than $3 5 million customers.

Vincent Sorgi: This include a top quartile T&D reliability at each of our utilities, including record reliability for our companies in Kentucky in Rhode Island and.

Vincent Sorgi: And top decile performance in Pennsylvania.

Vincent Sorgi: Our generation reliability in Kentucky was among the very best in the nation.

Vincent Sorgi: We achieved all this despite heightened storm activity in each of our services. At the same time, and despite over $0.10 per share impact from mild weather and storms, we delivered on every one of our financial commitments to our shareholders. Namely, we achieved ongoing earnings of $1.60 per share, exceeding the midpoint of our ongoing earnings forecast by 2 cents and delivering over 8% growth from Proforma 2022. We achieved this through our strong focus on operational efficiency and outperformance in key areas that Joe will cover in his financials. We also executed $2.4 billion in planned capital expenditures on time and on budget to advance a reliable, resilient, affordable, and cleaner energy future. We exceeded our annual O&M savings target for 2023 through our strong enterprise-wide focus on technology and business transformation.

Vincent Sorgi: We achieved all of this despite heightened storm activity in each of our service territories.

Vincent Sorgi: At the same time and despite over 10 cents per share impact from mild weather and storms.

Vincent Sorgi: We delivered on every one of our financial commitments to our shareowners.

Namely we achieved ongoing earnings of $1 60 per share.

Vincent Sorgi: Exceeding the mid point of our ongoing earnings forecast by two cents.

Vincent Sorgi: And delivering over 8% growth from pro forma 2022.

Vincent Sorgi: We achieved this through our strong focus on operational efficiency and outperformance in key areas that Joe will cover in his financial review.

Vincent Sorgi: We also executed $2.4 billion in planned capital spend on time and on budget.

Vincent Sorgi: To advance our reliable resilient affordable and cleaner energy future.

Vincent Sorgi: We exceeded our annual O&M savings target for 2023 through our strong enterprise wide focus on technology and business transformation achieve.

Vincent Sorgi: Achieving $75 million in savings from our 2021 base, reinforcing our Continuous Improvement Mindset and putting us solidly on track to deliver our targeted $175 million in O&M savings by 2026. These operational and financial achievements were matched by strong results elsewhere in the business that position us for the future. Underpinned by sound planning and effective management of regulatory proceedings, we secured constructive regulatory outcomes in Kentucky and Rhode Island.

Vincent Sorgi: Achieving $75 million in savings from our 2021 baseline.

Vincent Sorgi: Reinforcing our continuous improvement mindset and.

Vincent Sorgi: And putting us solidly on track to deliver our targeted $175 million in O&M savings by 2026.

Vincent Sorgi: These operational and financial achievements were matched by strong results elsewhere in the business that position us for future success.

Underpinned by sound planning and effective management of regulatory proceedings, we secured constructive regulatory outcomes in Kentucky in Rhode Island.

Vincent Sorgi: In Kentucky, we secured approval for about $2 billion in generation replacement investment. This is part of our CPCN process that concluded in November of last year. The KPSC's decision ensures that we can continue to meet our customers' future energy needs safely, reliably, and affordably while advancing a cleaner energy mix in the future and in Rhode Island. Thank you all for joining us today for the secured approval of our first infrastructure safety and reliability plans since acquiring Rhode Island Energy. In addition, we received the green light to deploy advanced metering functionality across Rhode Island as we lay a foundation for a smarter, more resilient, more reliable, and more dynamic electric grid capable of supporting the state's leading climate goals. Finally, we continue to provide a smooth and seamless transition to PPL ownership for our Rhode Island energy stakeholders.

Vincent Sorgi: In Kentucky, we secured approval for about $2 billion in generation replacement investments as part of our CPC and process that concluded in November of last year.

Vincent Sorgi: K P. C's decision ensures that we can continue to meet our customer's future energy needs safely reliably and affordably, while advancing a cleaner energy mix in the state.

Vincent Sorgi: And in Rhode Island.

Vincent Sorgi: We secured approval of our first infrastructure safety and reliability plans since acquiring Rhode Island energy.

Vincent Sorgi: In addition, we received the green light to deploy advanced metering functionality across Rhode Island, as we lay a foundation for a smarter more resilient more reliable and more dynamic electric grid capable of supporting the state's leading climate goals.

Finally, we continue to provide a smooth and seamless transition to P. P. L ownership for our Rhode Island energy stakeholders.

Vincent Sorgi: Completing all planned 2023 integration milestones and keeping us on track to exit our remaining transition service agreements with National Grid in mid-2024. These achievements are a direct result of our focus on execution and our disciplined investment strategy. Our ability to adjust when challenges arise, our experienced leadership team, and clarity of purpose across PPL as we pursue our Utility of the Future strategy. Looking ahead. We recognize we still have room to improve as we pursue our vision to be the best utility company in the U.S. And in 2024, we're determined to make continued progress as we seek to maximize long-term value for both our customers and sharers. Turning to slide five.

Vincent Sorgi: Pleading all planned 2023 integration milestones.

Vincent Sorgi: And keeping us on track to exit our remaining transition service agreements with national grid in mid 2024.

Vincent Sorgi: These achievements are a direct result of our focus on execution, our disciplined investment strategy, our ability to adjust when challenges arise or.

Vincent Sorgi: Our experienced leadership team and clarity of purpose across PPL as we pursue our utility of the future strategy.

Vincent Sorgi: Looking ahead.

Vincent Sorgi: We recognize we still have room to improve as we pursue our vision to be the best utility company in the U S.

Vincent Sorgi: And in 2024, we're determined to make continued progress as we seek to maximize long term value for both our customers and shareowners.

Vincent Sorgi: Turning to slide five.

Today, we.

Vincent Sorgi: Today, we announce the results of our updated..., which extends our projected growth outlook through at least 2020. In connection with this update, today, we announced our 2024 ongoing earnings forecast range of $1.63 to $1.75. The midpoint of this range, $1.69 per share, represents 7% growth from our 2023 ongoing earnings per share target, consistent with our long-term growth target. In addition, today, we announced a quarterly common stock dividend of 25.75 cents per share.

Vincent Sorgi: The results of our updated business plan, which extends our projected growth outlook through at least 2027.

Vincent Sorgi: In connection with this update today, we announced our 2020 for ongoing earnings forecast range of $1 63 to $1 75 per share.

Vincent Sorgi: Midpoint of this range of $1 69 per share represent 7% growth from our 2023 ongoing earnings per share target consistent with our long term growth targets.

Vincent Sorgi: In addition, today, we announced a quarterly common stock dividend of $25 75 per share.

Vincent Sorgi: This represents a 7.3% increase from the current quarterly dividend of $0.24 per share and aligns with our commitment to dividend growth in line with our EPS growth. We've extended our 6 to 8% annual EPS and dividend growth targets through at least 2027, based on the midpoint of our 2024 earnings forecast. In addition to today's updated growth forecast, our updated capital plan includes $14.3 billion from 2024 to 2027 to strengthen grid reliability and resiliency and advance a cleaner energy mix without compromising on affordability. The new plan is expected to drive average annual rate-based growth of 6.3% through 2027, up from the prior growth rate of 5.6%. We plan to fund these additional investments supported by our exceptional balance, as our credit metrics remain well within our targets throughout the plan period without the need for equity issuances through at least 2027, as I highlighted in my recap of 2023.

Vincent Sorgi: This represents a 7.3% increase from the current quarterly dividend of <unk> 24 per share and aligns with our commitment to dividend growth in line with our EPS growth targets.

Vincent Sorgi: We've extended our 6% to 8% annual EPS and dividend growth targets through at least 2027 based off the midpoint of our 2024 earnings forecast range.

Vincent Sorgi: In addition to today's updated growth forecast.

Vincent Sorgi: Our updated capital plan includes $14 $3 billion from 2024 to 2027.

Vincent Sorgi: To strengthen grid reliability, and resiliency and advance a cleaner energy mix without compromising on affordability.

Vincent Sorgi: The new plan is expected to drive average annual rate base growth of six 3% through 2027.

Vincent Sorgi: Up from the prior growth rate of five 6%.

Vincent Sorgi: We plan to fund these additional investments supported by our exceptional balance sheet.

Vincent Sorgi: As our credit metrics remain well within our targets throughout the planned period without the need for equity issuances through at least 2027.

Vincent Sorgi: As I highlighted in my recap of 2023.

Vincent Sorgi: We've made outstanding progress toward our multi-year target of at least $175 million in annual O&M savings by 2026. Based on the progress we made last year, we remain solidly on track to deliver our 2024 targeted savings of $120 to $130 million, in terms of rate case timing in the plan. We do not anticipate any base rate case filings in 2024 in Pennsylvania, Kentucky, or Rhode Island.

Vincent Sorgi: We've made outstanding progress towards our multiyear target of at least $175 million in annual O&M savings by 2026.

Vincent Sorgi: Based on the progress we made last year, we remain solidly on track to deliver our 2024 targeted savings of $120 million to $130 million.

In terms of rate case timing in the plan.

Vincent Sorgi: We do not anticipate any base rate case filings in 2024 in Pennsylvania, Kentucky, or Rhode Island.

Vincent Sorgi: Looking beyond 2024, our current projections would have us filing a base rate case a bit sooner in Kentucky than previously anticipated due to several factors, including the CPCN decision and additional capital investment needs on the T&D side of the business. Currently, we believe the earliest we would file a rate case in Kentucky will be in the first half of 2025. For Rhode Island, the earliest we would file is late 2025, which is consistent with the prior plan. Finally, in Pennsylvania... Recall that we have not been in for a base rate case since 2015, and we have no plans to go in again before 2026 at the earliest. The DISC mechanism in Pennsylvania has operated as designed to support long-term infrastructure investment between ratepayers.

Looking beyond 2024, our current projections would have us filing a base rate case, a bit sooner in Kentucky than previously anticipated due to several factors, including the CPC and decision and additional capital investment needs on the T&D side of the business.

Vincent Sorgi: Currently we believe the earliest we would file a rate case in Kentucky will be in the first half of 2025.

Vincent Sorgi: For Rhode Island. The earliest we would file is late 2025, which is consistent with the prior plan.

Vincent Sorgi: Finally in Pennsylvania.

Vincent Sorgi: Recall that we have not been in for a base rate case since 2015.

Vincent Sorgi: And we have no plans to go in again before 2026 at the earliest.

The disc mechanism in Pennsylvania has operated as designed to support long term infrastructure investment between rate cases.

Vincent Sorgi: We do see an increased need to invest more to improve reliability on the distribution system and filed with the Pennsylvania PUC a request to modify our Long-Term Infrastructure Improvement Plan, or LTIP, which includes an increase in planned DISC-eligible investment over a five-year period. We are considering filing a waiver request with the Pennsylvania PUC in the near future, requesting modifications to the disk mechanism to support accelerated replacement of aging infrastructure. As always, our focus is on maintaining affordability for our customers, and we will continue to evaluate the need for future rate cases based on a variety of factors, including capital plans, interest rates, market conditions, and regulatory. Turning to slide six. Our updated plan and business outlook support our utility of this future strategy, which is core to everything we do. What does that mean?

Vincent Sorgi: We do see an increased need to invest more to improve reliability on the distribution system.

Vincent Sorgi: And filed with the Pennsylvania, PUC, a request to modify our long term infrastructure improvement plan or L tip.

Vincent Sorgi: Which includes an increase in planned disc eligible investment over a five year period.

Vincent Sorgi: We are considering filing a waiver request with the Pennsylvania PUC in the near future <unk>.

Vincent Sorgi: Requesting modifications to the disc mechanism to support accelerated replacement of aging infrastructure.

Vincent Sorgi: As always our focus is on maintaining affordability for our customers.

Vincent Sorgi: And we will continue to evaluate the need for future rate cases based on a variety of factors, including capital plans interest rates market conditions and regulatory lag.

Vincent Sorgi: Turning to slide six.

Vincent Sorgi: Our updated plan and business outlook supports our utility of the future strategy, which is core to everything we do.

Vincent Sorgi: What does that mean to us.

Vincent Sorgi: It means updating our design criteria and continuing to harden our transmission and distribution systems to protect against climate change and keep our systems and data secure against cyber attacks. It means expanding our industry-leading use of technology, including smart grids, automation, Data Analytics, AI, and technologies that haven't even been invented yet to build a self-healing system.

Vincent Sorgi: It means updating our design criteria and continuing to harden, our transmission and distribution systems to protect against climate change and keep our systems and data secure against cyber threats.

Means expanding our industry, leading use of technology, including smart grids automation data analytics.

Vincent Sorgi: AI and technologies that haven't even been invented yet to.

Vincent Sorgi: To build a self healing grid.

Vincent Sorgi: It means investing in R&D to drive innovation to advance technologies that can be scaled safely, reliably, and affordably to meet our customers' evolving energy needs and to actually achieve net zero. For example, the Carbon Capture Project that was awarded a $72 million DOE grant at the Arcane Run Combined Cycle Plant in Kentucky. At the same time, it means expanding transmission and incorporating grid-enhancing technologies to connect more renewables and improve reliability for our customers, advancing a cleaner generation mix while keeping energy safe, reliable, and affordable, expanding our ability to reliably manage two-way power flows on the distribution system as we connect significantly more distributed energy. Driving Operational Efficiencies to Support an Affordable Clean Energy Transition, partnering with our customers and state and local officials to enable growth and economic Thank you. Turning to slide seven.

Vincent Sorgi: It means investing in R&D to drive innovation to advanced technologies that can be scaled safely reliably and affordably to meet our customers' evolving energy needs and to actually achieve net zero like.

Vincent Sorgi: Like the carbon capture project that was awarded a $72 million Doa grant at our cane run combined cycle plant in Kentucky.

Vincent Sorgi: At the same time, it means expanding transmission and incorporating grid enhancing technologies to connect more renewables and improve reliability for our customers.

Vincent Sorgi: Advancing our cleaner generation mix, while keeping energy safe reliable and affordable.

Vincent Sorgi: Expanding our ability to reliably manage two way power flows on the distribution network as we connect significantly more distributed energy.

Vincent Sorgi: Driving operational efficiencies to support an affordable clean energy transition.

Vincent Sorgi: Partnering with our customers and state and local officials to enable growth and economic development in our communities.

Vincent Sorgi: And lastly, expanding self service options for our customers using digital tools to enhance the customer experience.

Vincent Sorgi: Turning to slide seven.

Vincent Sorgi: As you can hear, creating the utilities of the future requires change across our entire system, and it requires significant investments to support a net zero approach. The industry and others are projecting a 200 to 3000% increase in electricity, which will require additions of reliable generation unless we see unprecedented amounts of energy conservation. At the same time, aging fossil fuel plants in this country are being retired very rapidly without replacements of reliable, dispatchable generation.

Vincent Sorgi: As you can hear creating utilities to the future requires change across our entire business and it requires significant investments to support a net zero economy.

Vincent Sorgi: The industry and others are projecting a 200% to 300% increase in electricity demand.

Vincent Sorgi: Which will require additions of reliable generation, unless we see unprecedented amounts of energy conservation.

Vincent Sorgi: At the same time aging fossil fuel plants in this country are being retired very rapidly without replacements of reliable dispatch of generation capacity.

Vincent Sorgi: And considering that fossil fuel generation represents more than 50% of our total capacity in the U.S., that presents a potentially major problem if this transition is not managed. The math simply doesn't add up when we don't have proven scalable technology currently available to actually achieve net zero carbon emissions that customers can afford. Most technologies used in our industry took 40 years to commercialize from demonstration.

Vincent Sorgi: And considering that fossil fuel generation represents more than 50% of our total capacity in the U S.

Vincent Sorgi: That presents a potentially major problem. If this transition is not managed appropriately.

Vincent Sorgi: The math simply doesn't add up when we don't have proven scalable technology currently available to actually achieve net zero carbon emissions that customers can afford.

Vincent Sorgi: Most technologies used in our industry took 40 years to commercialize from the demonstration phase.

Vincent Sorgi: We need to cut that time frame in half, at least, to meet the net zero by 2050 target, especially as we think about the big four new potential technologies, such as nuclear SMRs. Carbon Capture and Sequestration, Long-Duration Energy Storage, and Hygiene. In the meantime, we need to leverage commercially viable resources that exist today to reduce our carbon footprint while maintaining reliability. Those that are dispatchable can ramp up and down quickly and are vital to balancing the gaps left on the system by intermittent renewables. That is why natural gas generation is the key to achieving deep decarbonization in this, and it actually allows us to deploy more renewables than we would otherwise be able to do because of the reliability benefits of natural gas. In a nutshell, this is what makes the energy transition such a challenge, being able to deliver a clean energy future in a way that maintains reliability and affordability for our customers. However, with every challenge comes opportunity.

Vincent Sorgi: We need to cut that timeframe and have at least to meet net zero by 2050 targets, especially as we think about the big four new potential technologies nuclear S. M ours.

Vincent Sorgi: Carbon capture and sequestration long duration energy storage and hydrogen.

Vincent Sorgi: In the meantime, we need to leverage commercially viable resources that exist today to reduce our carbon footprint, while maintaining reliability.

Vincent Sorgi: Those that are dispatched bull can ramp up and down quickly and are vital to balancing the gaps left on the system by intermittent renewables.

Vincent Sorgi: That is why natural gas generation is the key to achieving deep decarbonization in this country.

Vincent Sorgi: And it actually allows us to deploy more renewables than we would otherwise be able to do because of the reliability benefits of natural gas.

Vincent Sorgi: In a nutshell. This is what makes the energy transition is such a challenge.

Vincent Sorgi: Being able to deliver the clean energy future in a way that maintains reliability and affordability for our customers.

Vincent Sorgi: However, with every challenge brings opportunity.

Vincent Sorgi: And that's why we know our strategy of the future is the right approach for this dynamic energy landscape. It's why our Generation Transition Plan in Kentucky is reasoned and deliberate. It ensures we can maintain the reliability and resiliency our customers and public officials demand. We actually need to figure out a way to do the same in deregulated markets like PJM and ISO New England. And it's why becoming more efficient is such a critical component of our strategy, because for every dollar of O&M we can take out of the business, we can spend $8 on capital without impacting the customer. The energy transition simply won't happen if customers cannot afford it.

Vincent Sorgi: And that's why we know our utility of the future strategy is the right approach for this dynamic energy landscape.

It's why our generation transition plan in Kentucky, as recent and deliberate and.

Vincent Sorgi: And ensures we can maintain the reliability and resiliency are customers and public officials demand.

Vincent Sorgi: We actually need to figure out a way to do the same in deregulated markets like PJM and ISO New England.

Vincent Sorgi: And it's why becoming more efficient is such a critical component of our strategy because for every dollar of O&M. We can take out of the business, we can spend $8 on capital without impacting the customer bill.

Vincent Sorgi: The energy transition simply won't happen if customers cannot afford it.

Vincent Sorgi: This is how we will achieve our long-term vision and how we intend to enhance the value we deliver for all. It requires us to lead from the front, and that is exactly what we've been doing, and what we will continue to do in 2024 and beyond. Turning to slide eight of our priorities for 2024, in addition to advancing our Utilities of the Future strategy, our 2024 priorities also include achieving at least the midpoint of our earnings per share forecast. Executing $3.1 billion in infrastructure investments to maintain safe, reliable, and affordable energy for our customers and modernize the grid. Delivering on our 2024 O&M savings targets as we deploy scalable technologies across our portfolio, take advantage of economies of scale created by our centralization efforts, and continue to leverage data analytics to reduce costs and optimize asset planning and maintenance. Finally, we need to complete our integration of Rhode Island and and exit all remaining trenches and service agreements with National. Bottom line.

Vincent Sorgi: This is how we will achieve our long term vision and.

Vincent Sorgi: And how we intend to enhance the value we deliver for all stakeholders. It.

Vincent Sorgi: It requires us to lead from the front.

Vincent Sorgi: And that is exactly what we've been doing.

Vincent Sorgi: While we will continue to do in 2024 and beyond.

Vincent Sorgi: Turning to slide eight and our priorities for 2024.

Vincent Sorgi: In addition to advancing our utility the future strategy. Our 2024 priorities also include achieving at least the midpoint of our earnings per share forecast.

Vincent Sorgi: Executing $3 $1 billion in infrastructure investments to maintain safe reliable and affordable energy for our customers and modernize the grid.

Delivering on our 2020 for O&M savings targets as we deploy scalable technologies across our portfolio take advantage of economies of scale created by our centralization efforts and continue to leverage data analytics to reduce costs and optimize asset planning and maintenance.

Vincent Sorgi: Finally, we need to complete our integration of Rhode Island energy and exited all remaining transition service agreements with national grid.

Vincent Sorgi: Bottom line.

Vincent Sorgi: We're eager to showcase PPL's strengths once again in 2024, and we are poised to lead on these very significant issues facing our industry. We have tremendous conviction in our strategy and business plan and in our ability to execute them. And we look forward to, once again, delivering on our commitments to customers and shareholders. That concludes my business and strategic update. I'll now turn the call over to Joe for the financials. Thank you, Vince, and good morning, everyone. Let's turn to slide 10.

Vincent Sorgi: We're eager to showcase PPL strengths once again in 2024, and we are poised to lead on these very significant issues facing our industry.

Vincent Sorgi: We have tremendous conviction in our strategy and business plan and in our ability to execute them, both and we look forward to once again delivering on our commitments to customers and shareowners.

Speaker Change: That concludes my business and strategic update.

Speaker Change: I'll now turn the call over to Joe for the financial update.

Thank you Vince and good morning, everyone, let's turn to slide 10.

Joseph P. Bergstein: PPL's fourth-quarter gap earnings were $0.15 per share, compared to $0.26 per share in Q4 2022. We recorded special items of 25 cents per share during the fourth quarter, primarily due to a settlement agreement with Talon Energy Corporation, as well as integration and related expenses associated with the acquisition of Rhode Island Energy. Adjusting for these special items, fourth-quarter earnings from ongoing operations were $0.40 per share, an improvement of $0.12 per share compared to Q4 2022. The primary drivers of this increase were returns on capital investments and lower O&M expenses, partially offset by lower sales volume, primarily due to the continued mild weather experienced in the fourth quarter of 2023. In total, weather was a two cents per share drag on our Q4 results compared to our plan. On an annual basis, our 2023 GAAP earnings were $1.

<unk> fourth quarter GAAP earnings were <unk> 15 per share compared to 26 cents per share in Q4 2022.

We recorded special items of 25 per share during the fourth quarter, primarily due to a settlement agreement with Talon Energy Corporation as well as integration related expenses associated with the acquisition of Rhode Island Energy.

Speaker Change: Adjusting for these special items fourth quarter earnings from ongoing operations were <unk> 40 per share an improvement of <unk> 12 per share compared to Q4 2022.

Speaker Change: The primary drivers of this increase for returns on capital investments and lower O&M expenses, partially offset by lower sales volumes, primarily due to the continued mild weather experienced in the fourth quarter of 2023.

Speaker Change: In total weather was <unk> <unk> per share drag on our Q4 results compared to our plan.

Speaker Change: On an annual basis, our 2023 GAAP earnings were one dollar per share.

Joseph P. Bergstein: Adjusting for $0.60 per share of special items recorded throughout the year, our 2023 ongoing earnings were $1.60. This compares to $1.41 per share of ongoing earnings for 2022, or a 13% increase from those prior year results. And, as Vince noted, we delivered our earnings target for 2023, exceeding the $1.58 per share midpoint of our earnings forecast. Our teams did a fantastic job of executing our plan, while remaining steadfast on achieving our financial goals, which enabled us to offset the adverse impacts of significant unfavorable weather and storm activity while maintaining reliability for our customers. 2023 demonstrated our ability to deal with adversity and still meet our commitments to both customers and shareholders, adding to our confidence and our ability to achieve our earnings target.

Speaker Change: Adjusting for <unk> 60 per share of special items recorded throughout the year. Our 2023 ongoing earnings were $1 60 per share.

Speaker Change: This compares to $1 41 per share of ongoing earnings for 2022, or a 13% increase from those prior year results.

Speaker Change: And as Vince noted, we delivered our earnings target for 2023.

Speaker Change: Exceeding the $1 58 per share midpoint of our earnings forecast.

Our teams did a fantastic job of executing our plan, while remaining steadfast in achieving our financial goals, which enabled us to offset the adverse impacts of significant unfavorable weather and storm activity, while maintaining reliability for our customers.

Speaker Change: 2023 demonstrated our ability to deal with adversity, and still achieve our commitments to both customers and shareowners.

Speaker Change: Adding to our confidence in our ability to achieve our earnings targets.

Joseph P. Bergstein: Turning to the ongoing segment drivers for the fourth quarter, on slide 11, our Pennsylvania regulated segment results increased by 4 cents per share compared to the same period a year ago. The increase was primarily driven by lower O&M and higher transmission revenue, partially offset by lower sales volumes and higher interest expectations. Our Kentucky segment results increased by six cents per share compared to the fourth quarter of 2022. The improvement in Kentucky's results was primarily driven by lower O&M expense, partially offset by lower sales volumes due to the mild weather.

Speaker Change: Turning to the ongoing segment drivers for the fourth quarter on slide 11.

Speaker Change: Our Pennsylvania regulated segment results increased by four cents per share compared to the same period a year ago.

Speaker Change: The increase was primarily driven by lower O&M and higher transmission revenue, partially offset by lower sales volumes and higher interest expense.

Speaker Change: Our Kentucky segment results increased by six cents per share compared to the fourth quarter of 2022.

Speaker Change: The improvement in Kentucky's results were primarily driven by lower O&M expense, partially offset by lower sales volumes due to the mild weather.

Speaker Change: Our Rhode Island segment results increased by <unk> <unk> per share.

Joseph P. Bergstein: Rhode Island segment results increased by two cents per share. This increase was primarily driven by higher rider revenue from capital investments, partially offset by higher interest expenses. Finally, results at corporate and other were flat compared to the prior period, primarily due to lower income taxes offset by higher O&M expenses.

Speaker Change: This increase was primarily driven by higher rider revenue from capital investments, partially offset by higher interest expense.

Speaker Change: Finally results of corporate and other were flat compared to the prior period, primarily due to lower income taxes offset by higher O&M expense.

Moving to slide 12.

Speaker Change: 2023 was a pivotal year for PPL, following our strategic repositioning, which we completed in 2022.

Joseph P. Bergstein: Moving to slide 12, 2023 was a pivotal year for PPL following our strategic repositioning, which we completed in 2022. Heading into the year, we set our 2023 earnings forecast range with a midpoint of $1.58 per share, representing 7% growth from the 2022 pro forma midpoint of $1.48 per share, which reflected a full year of earnings from Rhode Island energy. And for the second consecutive year, we outperformed our own targets, beating our earnings forecast by two cents and achieving over 8% growth for the 2022 pro forma forecast midpoint. This As I said numerous times over the past year, we were confident that our team would overcome those challenges and deliver on our commitments to both our customers and shareholders. This included several areas of excellent execution and constructive regulatory mechanisms, including prudent management of costs without sacrificing reliability.

Speaker Change: Heading into the year, we set our 2023 earnings forecast range with a midpoint of $1 58 per share representing 7% growth from the 2022 pro forma midpoint of $1 48 per share, which reflected a full year of earnings from Rhode Island energy.

Speaker Change: And for the second consecutive year, we outperformed our own targets, beating our earnings forecast by two cents and achieving over 8% growth for the 2022 pro forma forecast midpoint.

Speaker Change: This was a significant achievement given the abnormally mild weather and storms, we experience, which impacted results by more than 10 cents per share.

Speaker Change: And as I said numerous times over the past year, we were confident that our team would overcome those challenges and deliver on our commitments to both our customers and shareowners.

Speaker Change: This included several areas of excellent execution, and constructive regulatory mechanisms, including prudent management of cost without sacrificing reliability.

Speaker Change: Coverage of critical infrastructure investments in P. A through the disc mechanism outperformance and the integration of Rhode Island Energy and.

Speaker Change: And optimization of our financing plan.

Speaker Change: Looking at 2024, the midpoint of our earnings forecast range is $1 69 per share, which again represent 7% earnings growth from the midpoint of our 2023 forecast.

Joseph P. Bergstein: Recovery of Critical Infrastructure Investments in PA through the DIS mechanism. Outperformance and Integration of Rhode Island Energy, and Optimization of our Finance. Looking at 2024, the midpoint of our earnings forecast range is $1.69 per share, which again represents 7% earnings growth from the midpoint of our 2023 forecast. Since we initially communicated our earnings growth targets to investors, we've remained on that consistent trajectory while extending that growth further into the future, and we did that again today, with our extension of the 6% to 8% growth targets to 2027, supported by an updated capital investment plan, which Moving to slide 13.

Speaker Change: Since we initially communicated our earnings growth targets to investors, we remain on that consistent trajectory, while extending that growth further into the future.

Speaker Change: And we've done that again today.

With our extension of the 6% to 8% growth targets to 2027.

Speaker Change: Supported by an updated capital investment plan, which I'll discuss in more detail in a couple of slides.

Speaker Change: Moving to slide 13.

Speaker Change: On this slide we've provided a walk from our 2023 actual results of $1 60 per share to the midpoint of our 2024 forecast highlighting the projected drivers of the year over year increase by segment.

Speaker Change: Our Pennsylvania segment results are expected to increase by five per share in 2024, primarily due to returns on additional capital investments in transmission higher.

Joseph P. Bergstein: On this slide, we've provided a walk from our 2023 actual results of $1.60 per share to the midpoint of our 2024 forecast, highlighting the projected drivers of the year-over-year increase by segment. Our Pennsylvania segment results are expected to increase by $0.05 per share in 2024, primarily due to returns on additional capital investments in transmission, higher sales volume, and lower O&M, partially offset by less distribution rider recovery and higher interest. We project our Kentucky segment results to increase by 7 cents per share in 2020, primarily driven by higher sales volumes due to the expected return to normal weather. Our Rhode Island segment results are expected to increase by two cents per share in 2024 compared to our 2023 results. This is primarily due to higher capital investment rider revenue and lower O&M, partially offset by higher depreciation. Finally, we project our corporate and other results to decrease by 5 cents per share in 2024, primarily due to higher interest expense and other factors that are not individually significant. Turning to slide 14.

Higher sales volume and lower O&M, partially offset by less distribution rider recovery at higher interest expense.

Speaker Change: We project, our Kentucky segment results to increase by seven cents per share in 2024.

Primarily driven by higher sales volumes due to the expected return to normal weather.

Speaker Change: Our Rhode Island segment results are expected to increase by <unk> <unk> per share in 2024 compared to our 2023 results.

Speaker Change: This was primarily due to higher capital investment rider revenue at <unk>.

Speaker Change: Lower O&M.

Speaker Change: Partially offset by higher depreciation expense.

Speaker Change: Finally, we project, our corporate and other results to decrease by five cents per share in 2024, primarily due to higher interest expense and other factors that are not individually significant.

Speaker Change: Turning to slide 14.

Speaker Change: Over the next four years, we have planned capital investments of $14 $3 billion focused on delivering superior service at enhancing the overall customer experience, while maintaining an affordable price.

Speaker Change: This includes advancing industry, leading grid modernization, expanding and hardening our transmission networks, improving the safety of our natural gas networks in.

Speaker Change: In implementing our approved generation replacement plan in Kentucky.

Speaker Change: This plan represents a $2.4 billion increase in capital investments compared to the prior four year plan.

Speaker Change: Approximately $1 billion of that increase is expected to occur in the 2024 to 2026 period.

Speaker Change: Most of that increase is projected to be in Pennsylvania, and Kentucky as we continue to modernize our electric transmission and distribution systems and enhanced reliability and resiliency.

Joseph P. Bergstein: Over the next four years, we have planned capital investments of $14.3 billion focused on delivering superior service and enhancing the overall customer experience while maintaining an affordable price. This includes advancing industry-leading grid modernization, expanding and hardening our transmission network, improving the safety of our natural gas networks, and implementing our approved generation replacement plan in Kentucky. This plan represents a $2.4 billion increase in capital investments compared to the prior four years.

Speaker Change: We continue to expect significant investment needs into the end of this decade as reflected on our 2027 and forecast.

Speaker Change: This includes nearly $1.2 billion in Pennsylvania.

Speaker Change: Of which approximately 65% is transmission investment under FERC formula rates.

Speaker Change: One $8 billion of investment in Kentucky, primarily related to further enhancements on the electric and gas T systems and to execute our generation replacement plan.

Joseph P. Bergstein: Approximately $1 billion of that increase is expected to occur in the 2024 to 2026 period, and most of that increase is projected to be in Pennsylvania and Kentucky as we continue to modernize our electric transmission and distribution systems and enhance reliability and resiliency. We continue to expect significant investment needs into the end of this decade, as reflected in our 2027 forecast. This includes nearly $1.2 billion in Pennsylvania, of which approximately 65% is transmission investment under FERC formula rates.

Speaker Change: And it includes over $700 million of investment in Rhode Island, as we continued to prepare the grid for significant levels of clean energy resources, and we enhanced resiliency against increasingly severe storms, while continuing our focus to maintain a safe and reliable gas network by replacing leak prone pipe.

Turning to slide 15.

Speaker Change: These additional capital investments are projected to lead to annual rate base growth of six 3% from 2023 to 2027.

Speaker Change: This compares to annual rate base growth of five 6% of our prior plan period from 2022 to 2026.

Joseph P. Bergstein: $1.8 billion of investment in Kentucky, primarily related to further enhancements of the electric and gas T&D systems and to execute our generation replacement plan. And it includes over $700 million of investment in Rhode Island, as we continue to prepare the grid for significant levels of clean energy resources and enhance resiliency against increasingly severe storms, while continuing our focus to maintain a safe and reliable gas network by replacing leak-prone pipes. Turning to slide 15.

Speaker Change: As you can see in the chart.

Speaker Change: Two thirds of our rate base relates to investments in our electric T&D networks, given the significant needs as we strengthen and modernize the grid.

Speaker Change: Importantly, while we project our total rate base to grow rate base related to coal generation continues to decline from 2023 to 2027.

Speaker Change: In fact, the percentage of our total rate base related to coal generation is expected to be less than 12% by the end of 2027 down from about 18% today.

Joseph P. Bergstein: These additional capital investments are projected to lead to annual rate-based growth of 6.3% from 2023 to 2027. This compares to annual rate-based growth of 5.6% in our prior plan period from 2022 to 2026. As you can see in the chart, two-thirds of our rate base relates to investments in our electric T&D networks, given the significant needs as we strengthen and modernize the grid. Importantly, while we project our total rate base to grow, rate base related to coal generation continues to decline from 2023 to 2027. In fact, the percentage of our total rate base related to coal generation is expected to be less than 12% by the end of 2027, down from about 18% today. And based on this trajectory, we expect this to continue to decline and be under 10% by the end of the decade.

Speaker Change: And based on this trajectory we expect this to continue to decline and be under 10% by the end of the decade.

Speaker Change: In summary, the result of our updated plan narrows the gap between our projected rate base growth and earnings growth targets as investment needs continued to increase with the evolving energy landscape.

Speaker Change: As such we continue to be very focused on affordability and maximizing every dollar we spend.

Speaker Change: Our earnings growth in the near term continues to be driven by the combination of rate base growth and operating efficiencies that we believe maximizes value for both customers and shareowners.

Speaker Change: Moving to slide 16.

Speaker Change: Today, we announced an increase in our quarterly cash dividend to <unk> 25, and three quarter cents per share.

Speaker Change: This results in an annualized dividend of $1 three per share compared to our prior annualized dividend of 96 per share.

Speaker Change: The seven 3% increase aligns with our projected 2024 forecasted earnings growth.

Joseph P. Bergstein: In summary, the result of our updated plan narrows the gap between our projected rate-based growth and earnings growth targets as investment needs continue to increase with the evolving energy landscape. As such, we continue to be very focused on affordability and maximizing every dollar we spend. Moving to slide 16, our earnings growth in the near term will continue to be driven by the combination of rate-based growth and operating efficiencies that we believe maximizes value for both customers and shareholders. Today, we announced an increase in our quarterly cash dividend to $0.2575 per share. This results in an annualized dividend of $1.03 per share compared to our prior annualized dividend of $0.96 per share.

Speaker Change: Long term EPS growth targets.

Speaker Change: We continue to expect future dividend growth to align with our earnings growth targets.

Speaker Change: The updated dividend remains within our targeted dividend payout range of 60% to 65% based on the midpoint of our 'twenty 'twenty four earnings forecast.

Speaker Change: Combination of Ppl's EPS growth and dividend yield provides investors with an attractive total return proposition in the range of 9% to 12%.

Speaker Change: Moving to an update on Ppl's credit and our financing plan for 2024 on slide 17.

Speaker Change: We continue to believe that having one of the sector's strongest balance sheets is a clear strategic advantage that provides the company with significant financial flexibility.

Speaker Change: Our updated business plan maintain strong credit metrics throughout.

Joseph P. Bergstein: The 7.3% increase aligns with our projected 2024 forecasted earnings growth and our long-term EPS growth target. We continue to expect future dividend growth to align with our earnings growth target. The updated dividend remains within our targeted dividend payout range of 60 to 65% based on the midpoint of our 2024 earnings forecast. The combination of PPL's EPS growth and dividend yields provides investors with an attractive total return proposition in the range of 9 to 12 percent.

Speaker Change: This includes maintaining a 16% to 18% <unk> to debt ratio and holding company to total debt ratio below 25%.

Speaker Change: We have limited near term refinancing risk with zero maturities in 'twenty, 'twenty, four and only $550 million of total maturities in 2025.

Speaker Change: And we continued to maintain limited floating rate debt exposure mitigating volatility in our plan.

Speaker Change: We also continue to be uniquely positioned to continue to fund our growth without the need for equity throughout our updated planning period, which is now extended through 2027.

Joseph P. Bergstein: Moving to an update on PPL's credit and our financing plan for 2024, on slide 17, we continue to believe that having one of the sector's strongest balance sheets is a clear strategic advantage that provides a company with significant financial flexibility. Our updated business plan maintains strong credit metrics throughout, including maintaining a 16 to 18% FFO to debt ratio and a holding company to total debt ratio below 25%.

Speaker Change: As investors think about our financing plan for 2024 they.

Speaker Change: You should expect our activity to be primarily focused on funding our utility capital plans with operating company debt.

Speaker Change: We've already executed a portion of this plan with our $650 million PPL electric utilities deal in January which was executed at attractive pricing.

Speaker Change: We're also planning to be in the market for Rhode Island.

Speaker Change: Our first debt offering since the acquisition.

Speaker Change: We have no current plans for debt issuances in Kentucky, or a P. P O capital funding this year, but that is an area. We'll continue to evaluate opportunistically in connection with market conditions, and our strong financial position.

Joseph P. Bergstein: We have limited near-term refinancing risk with zero maturities in 2024 and only $550 million of total maturities in 2025. And we continue to maintain limited floating rate debt exposure, mitigating volatility in our plan. We also continue to be uniquely positioned to continue to fund our growth without the need for equity throughout our updated planning period, which is now extended through 2027. As investors think about our financing plan for 2024, They should expect our activity to be primarily focused on funding our utility capital plans with operating company debt.

Speaker Change: In closing I'm extremely pleased with our financial position and outlook to execute our updated plan. This concludes.

Speaker Change: My prepared remarks, I'll now turn the call back over to Vince.

Vincent Sorgi: Thank you Joe.

Vincent Sorgi: As I mentioned earlier this is a pivotal time for our industry at a time that requires us to lead with strength.

Vincent Sorgi: There is no shortage of challenges facing our industry and being able to deliver the clean energy transition safely reliably and affordably for our customers.

Joseph P. Bergstein: We've already executed a portion of this plan with our $650 million PPL electric utilities deal in January, which was executed at an attractive price. We are also planning to be in the market for Rhode Island with our first debt offering since the acquisition of Rhode Island Power. We have no current plans for debt issuances in Kentucky or at PPL Capital Funding this year, but that is an area we'll continue to evaluate opportunistically in connection with market conditions and our strong financial position.

Vincent Sorgi: This is what gets me out of bed every morning, and why I'm. So excited to be a part of this industry at this moment in time.

Vincent Sorgi: I am convinced we have the right strategy for the right time.

Vincent Sorgi: Strategy that prioritizes efficiency and affordability.

Vincent Sorgi: Built on our core strengths and will maximize long term value for customers and shareowners alike.

Vincent Sorgi: We are well positioned to continue our competitive and predictable long term earnings growth of 6% to 8% a year lead.

Vincent Sorgi: We've established a derisked and disciplined business plan that advances a safe reliable affordable and sustainable energy future, while providing investors with an attractive return proposition.

Joseph P. Bergstein: In closing, I'm extremely pleased with our financial position and outlook to execute our updated plan. This concludes my prepared remarks; I'll now turn the call back over to Joe. Thank you, Joe.

Vincent Sorgi: And finally, we have an experienced leadership team that is 100% committed to delivering on these objectives and backed by a dedicated team of 6500 strong across PPL.

Operator: As I mentioned earlier, this is a pivotal time for our industry, a time that requires us to lead with strength. There is no shortage of challenges facing our industry in being able to deliver the clean energy transition safely, reliably, and affordably for our customers. This is what gets me out of bed every morning and why I'm so excited to be a part of this industry at this moment in time. I'm convinced we have the right strategy for the right reasons, a strategy that prioritizes efficiency and affordability, builds on our core strengths, and will maximize long-term value for customers and share owners alike. We are well positioned to continue our competitive and predictable long-term earnings growth of 68% a year. We've established a de-risked and disciplined business plan that advances a safe, reliable, affordable, and sustainable energy future while providing investors with an attractive return on their investment.

Speaker Change: With that operator, let's open it up for questions.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If you are using a speakerphone please pick up your handset before pressing the key.

Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Unless.

Speaker Change: The first question today comes from.

Shar: Shar <unk> with Guggenheim Partners. Please go ahead.

Shar: Hey, guys.

Shar: Good morning Shar.

Good morning, Vince So just on the transmission side I see you've added a couple hundred million to the Pennsylvania plan, how much of that is tied to the recent or tap window three awards and the reason why I'm asking is we've seen some significant increases in transmission needs and transfer capability across utilities in eastern PJM.

Operator: And finally, we have an experienced leadership team that is 100% committed to delivering on these objectives and backed by a dedicated team of 6,500 strong across. With that operator, let's open it up. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Shar: And E. Mac, so just trying to get a sense for what has started to trickle into your plan versus incremental thanks.

Vincent Sorgi: Yeah, Hey, Joe about half of that increase is driven by what youre, describing and what we were awarded.

Vincent Sorgi: Recent PJM window.

Speaker Change: Got it perfect and then just coming back to the Kentucky spend the CPC and process, obviously had had deferred but not quite closed the door to the second <unk> is that something that could you could revisit and could dispense start to land in the outer years of the latest plan just kind of trying to get a sense.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Thank you. The first question today comes from Shahriar Pourreza with Guggenheim Partners. Please go ahead. Hey guys. Morning, Sharp. Good morning, Vince.

Speaker Change: For the next incremental focus thanks.

Speaker Change: Yeah to your point Shar the.

Speaker Change: The order suggested that we should come back with another CPC and filing with an in service date for that second CGT and 2030.

Shahriar Pourreza: So just on the transmission side, I see you've added a couple hundred million to the Pennsylvania plan. How much of that is tied to the recent RTEP window three awards? And the reason why I'm asking is we've seen some significant increases in transmission needs and transfer capability across utilities in Eastern PJM and EMAC. So just trying to get a sense for what has started to trickle into your plan versus what hasn't. Yeah, hey Sharks Joe, about half of that increase is driven by what you're describing and what we were awarded in that recent PJM window. Got it.

Speaker Change: And so we would plan on doing that in a couple of years' time to start prepare for that and obviously, we'll be updating that.

Speaker Change: As we go through the IRB process this year looking at load.

Speaker Change: Generation economics, and all of that so the first the first point is really the updated IRB that we'll file this year and then ultimately that'll feed into.

Speaker Change: Our CPC on filing.

Speaker Change: To be just to have a plant in service in 2030.

Vincent Sorgi: And then just coming back to the Kentucky spend, the CPCN process obviously deferred but not quite closed the door to the second CCGT. Is that something that you could revisit?

Speaker Change: Perfect Thats all the questions I had congrats Vince on the execution, it's pretty notable I appreciate it.

Vincent Sorgi: Thanks, John I appreciate it.

Vincent Sorgi: The next question comes from <unk> Chopra with Evercore ISI. Please go ahead.

Vincent Sorgi: And could the spend start to land in the later years of the latest plan? Just kind of trying to get a sense for the next incremental focus. Yeah, to your point, Shahriar, the order suggested that we should come back with another CPCN filing with an in-service date for that second CCGT in 2030. And so we, you know, we would plan on doing that in a couple years' time, start preparing for that.

Chopra: Good morning, Jerry.

Jerry: Hey, good morning, good morning, I just.

Jerry: And.

Chopra: A question on Pennsylvania.

Durgesh Chopra: Maybe just can you elaborate on what you plan to do or any color you can share on the on the <unk> itself the <unk>.

Durgesh Chopra: Reason why I ask is the your ear water utility in the state their rate case is drawing a lot of attention to new commissioners.

Durgesh Chopra: The commission so just maybe just talk to the regulatory environment in the state.

Vincent Sorgi: And obviously, we'll be updating that as we go through the IRP process this year, looking at load and, you know, generation economics and all that. So the first point is really the updated IRP that we'll file this year, and then ultimately, that'll feed into a CPCN filing to have a plant in service in 2030. Perfect. That's all the questions I had. Congratulations, Vincent, on the execution.

Durgesh Chopra: And then what if you could share any color on what you might do with amending the disc mechanism that would be great. Thank you.

Speaker Change: Sure So maybe a precursor to the.

Speaker Change: To the disk waiver is really the L tip process that we have in the state.

Speaker Change: In.

Speaker Change: In mid January we filed a petition.

Speaker Change: With the commission to modify our L. Pic, which covers the period. That's a long term infrastructure improvement plan that covers the period from January one of 2023 to <unk> 31, 27, So we're already a year into this current LTI plan.

Shahriar Pourreza: It's pretty notable. Appreciate it. Thanks Shahriar. The next question comes from Durgesh Chopra with Evercore ISI. Please go ahead. Hey, good morning, Vince.

Durgesh Chopra: Good morning. I just had a question about Pennsylvania. Maybe you can elaborate on what you plan to do or give any color you can share on the DSIC itself?

Speaker Change: We did file for some significant adjustments to that plan, which the L. Tip is really the precursor for the types of projects that would then be eligible to flow to the disc mechanism, we're proposing to increase that.

Vincent Sorgi: The reason why I ask is your peer water utility in the state, their rate case is drawing a lot of attention, their new commissioners at the Commission. So maybe just talk to the regulatory environment in the state and then, you know, if you could share any color on what you might try to do with amending the DISAC mechanism, that would be great. Thank you. You are, so maybe a precursor to the DISC waiver is really the LTIP process that we have in the state. In mid-January, we filed a petition with the commission to modify our LTIP, which covers the period from January 1 of 2023 to 12-31-27.

Speaker Change: Did that L tip plan from about 500 million to about $800 million.

Speaker Change: We're including a new project or a new program for predictive failure technology, we've been doing a lot of testing some new devices that we can put on the grid that actually enable us to identify failing equipment before it actually fails and call causes an outage. So we have some money in there that we wanted to include were off.

Speaker Change: So looking at just other distribution reliability projects, our reliability very strong in Pennsylvania being led by by our transmission results. There we need to continue to improve our distribution reliability. So additional money in there for that and then of course, we have the approved projects through the IHA a process that we also.

Vincent Sorgi: So we're already a year into this current LTIP plan, and we did request some significant adjustments to that plan, which LTIP is really the precursor to the types of projects that would then be eligible to flow through the DISC mechanism. We're proposing to increase that LTIT plan from about $500 million to about $800 million, and we're including a new project or a new program for predictive failure technology. We've been doing a lot of testing on some new devices that we can put on the grid that actually enable us to identify failing equipment before it actually fails and causes an outage. So we have some money in there that we want to include. We're also looking at just other distribution reliability projects. Our reliability is very strong in Pennsylvania, led by our transmission results there.

Speaker Change: Update a DLT at four so the parties have 30 days to file comments on our <unk> filing.

Speaker Change: Those comments are actually do today.

Speaker Change: So we'll want to review those comments.

Speaker Change: Before we file for the disk waiver request, we have notified the PUC of our intention to file that waiver request and we'd expect to file that relatively soon.

Vincent Sorgi: We need to continue to improve our distribution reliability, so additional money is in there for that. And then, of course, we have the approved projects through the IIJA process that we also updated the LTIT for. So the parties have 30 days to file comments on our LTIT filing, and those comments are actually due today.

Speaker Change: At this point.

Speaker Change: The request, but we're still working on it will likely be in the form of the.

Speaker Change: A higher cap on the desk.

Speaker Change: Perfect.

Speaker Change: I appreciate that color and congrats on the quarter guys. Thank you.

Speaker Change: Great. Thanks.

Speaker Change: The next question comes from Angie <unk> with Seaport. Please go ahead.

Angie: Good morning, good morning.

Angie: Morning, So.

Angie: It's a bit of an unfair question I I mean, I will admit so so we're waiting to see.

Vincent Sorgi: So we'll want to review those comments before we file the DISC waiver request. We have notified the PUC of our intention to file that waiver request, and we'd expect to file that relatively soon, Durgesh. At this point...

Angie: This potential large data center to be developed.

Angie: Next to our directly next to the Susquehanna nuclear plant, which is obviously your service territory and Neil former asset. So I'm just wondering so.

Vincent Sorgi: The request, what we're still working on, will likely be in the form of a higher cap on the debt. Perfect. I appreciate that color.

Angie: If that were to happen.

Angie: To have this almost 1000 megawatt data center what type of investments.

Durgesh Chopra: And congratulations on the quarter, guys. Thank you. Great. Thanks, Durgesh. The next question comes from Angie Storoszymski with Seaport. Please go ahead. Good morning. Good morning.

Angie: That require from you guys from like a T&D perspective and is it already embedded in your plan.

Angie Storoszymski: So, it's a bit of an unfair question, I will admit. So, we're waiting to see this potential large data center to be developed next to or directly next to the Susquehanna nuclear plant, which is obviously your service territory and your former asset. So, I'm just wondering, so, you know, if that were to happen, if we were to have this almost a thousand megawatt data center, what type of investments would that require from you guys, from like a T&D perspective, and is that already embedded in your plan? Yeah, so let me talk about data centers more broadly. You're referring to one that's specifically related to or will be tied to the Susquehanna nuclear plant. So most of that activity is really between TALEN and the data center entity, although we are working with TALEN to ensure that the reliability of power supply is there for that center.

Angie: Yes, So let me talk about maybe data centers more more broadly youre, referring to one that specifically related or are will be tied to the susquehanna nuclear plant. So most of that activity is really between talent and the data center entity.

Angie: Although we are working with talent to ensure that the reliability of power supply is there for that center. So some.

Angie: Some incremental work there Angie what I would say, though more broadly.

Angie: Beyond that specific instances, where we've really started to see some data center activity, both in Pennsylvania, and Kentucky with some very large load requirements.

Angie: Again gate, one Cape size projects.

Angie: Some smaller than that but we are seeing some some one gig projects as well.

Angie: And in our territory.

Angie: <unk>, we have some some a number of positive attributes that these data centers are looking for not only is our reliability very strong.

Angie Storoszymski: So some incremental work there, Angie. But what I would say, more broadly beyond that specific instance, is where we really started to see some data center activity, both in Pennsylvania and Kentucky, with some very large load requirements. Again, one gigabit-sized projects, some smaller than that, but we are seeing some one gigabit projects as well. And in our territories, we have a number of positive attributes that these data centers are looking for. Not only is our reliability very strong in the top quartile, top decile range, especially on the transmission side of the business, which is where these are generally pulling their power from, but our reliability there is extremely high.

Angie: In the top quartile top decile range, especially in our transmission side of the business, which is where are these generally are pulling their power from a reliability. There is extremely high. We also have relatively inexpensive land in an abundance of that land in both of our jurisdictions NPA in Kentucky.

Angie: And then in Pennsylvania in particular, we have a decent amount of capacity on the transmission network that we can add this load without a lot of investment that still is incredibly beneficial for our customers because that will still lower the overall cost and bill for our retail customers the more and more.

Vincent Sorgi: We also have relatively inexpensive land and an abundance of that land in both of our jurisdictions in PA and Kentucky. And then in Pennsylvania, in particular, we have a decent amount of capacity on the transmission network where we could add this load without a lot of investment that is still incredibly beneficial for our customers because that will still lower the overall cost and bill for our retail customers, the more and more load that we can connect to the transmission network. And then, of course, we are close to New England and the Mid-Atlantic region, especially as you think about Pennsylvania.

Angie: Hello that we can connect to the transmission network and then of course, we're close to new England, and the mid Atlantic region, especially as.

Angie: As you think about Pennsylvania, So theres a number of things in our in our territory that make this attractive and of course in Kentucky, we have relatively cheap power prices. So very active in working with the datacenter companies. We haven't included.

Angie: <unk> in our load forecast at this point.

Vincent Sorgi: So there are a number of things in our territories that make this attractive. And, of course, in Kentucky, we have relatively cheap power prices. So they are very active in working with the data center companies. We haven't included these in our load forecast at this point. We will do that at the appropriate time if and when we close these deals with these folks. But I would just say at this point there is a lot of activity going on with the data centers, as you're hearing with some of our peers as well. And can I ask you about Kentucky?

Angie: We will do that at the appropriate time, if and when we close these deals with these folks but.

Angie: I would just say at this point a lot of activity going on with the data centers as you're hearing with some of our peers as well.

Speaker Change: And can I ask about Kentucky so.

Speaker Change: You mentioned that the greatest getting tighter from the power supply perspective.

Speaker Change: I mean, one does it make you sort of reassess your plans, but at the time of coal plants and or additions of new gas plants in the state and also how do those.

Angie Storoszymski: So, you mentioned that the grid is getting tighter from the power supply perspective. One, does that make you sort of reassess your plans about retirements of coal plants and or additions of new gas plants in the state? And also, how do those data center providers actually look at thermal power from gas and coal versus, I don't know, nuclear or renewables? Does that matter? Do they really care about the carbon footprint or emissions? Or is it mostly the total cost and how cheap the power is?

Speaker Change: Those data center providers.

Speaker Change: <unk> looked at.

Speaker Change: Thermal power from natural gas and coal versus I don't know nuclear or renewables does that matter or do they really care about the the.

Speaker Change: Our carbon footprint and emissions or is it is it mostly the total cost and how cheap the power is.

Speaker Change: Yeah for the most part what we're seeing Angie is reliability and reliability of power I think youre right. There are some data center companies that also want to ensure that that power is coming from.

Vincent Sorgi: Yeah, for the most part, what we're seeing, Angie, is reliability and reliability of power. I think you're right. There are some data center companies that also want to ensure that that power is coming from green energy sources, like what we're seeing up in Susquehanna, as you mentioned earlier. But for the most part, it's about reliability and the cost of that power, because obviously these are huge costs for these data centers; it's the cost of the electricity itself.

Speaker Change: Green energy sources like what we're seeing up in Susquehanna as you mentioned earlier, but for the most part it's about reliability and the cost of that power because obviously these are.

Speaker Change: These are huge cost for these data centers is the cost of the electricity itself. So.

Speaker Change: To your point, we don't have as much capacity.

Speaker Change: In Kentucky, as we do up here in Pennsylvania, and so.

Angie Storoszymski: To your point, we don't have as much capacity in Kentucky as we do up here in Pennsylvania, and so we would expect there to be incremental investment needed to support data centers in Kentucky, perhaps more so than we would need, at least in the near term, in Pennsylvania. Certainly, this will feed into, as I was mentioning before, our IRP process as we look at our load growth and as we think about our generation replacement strategy. It's a little too early, I would say, to say we need to modify our current thinking on that, but clearly, if some of these large centers hit, we're going to have to factor that into the IRP and then ultimately into that CPC and request a couple of years from now. Thank you. The next question comes from Paul Zimbardo with the Bank of America. Please go ahead. Hi, good morning team. Good morning. Hey Paul.

Speaker Change: We would expect there to be incremental investment needed to support data centers and Kentucky, perhaps more so than we would need at least in the near term in Pennsylvania.

Speaker Change: Certainly this will feed into as I was mentioning before into our IRB process as we look at our load growth as we think about our generation replacement strategy little too early I would say to say, we need to modify our current thinking on that but clearly.

Speaker Change: If some of these large centers hit we're going to have to factor that into the ERP and then ultimately into that CPC and request a couple of years from now.

Speaker Change: Awesome. Thank you congrats.

Speaker Change: Thank you.

Speaker Change: The next question comes from Paul Zimbardo with Bank of America. Please go ahead.

Paul Andrew Zimbardo: Hi, good morning team.

Paul Andrew Zimbardo: Good morning, Paul Hey, Paul.

Paul Andrew Zimbardo: First one on the O&M targets.

Paul Andrew Zimbardo: First one, on the O&M targets, and please correct me if I'm wrong, it looks like you reaffirmed them all but exceeded the 2023 target by around 20 million dollars. I'm just, what would, and I know the targets are at least, what would you need to see to kind of increase those targets and what kind of drove that initial outperformance for his target? Yeah, sure. Hey, Paul, it's Joe.

Paul Andrew Zimbardo: Please correct me if I'm wrong it looks like you reaffirmed the mall, but exceeded the 2023 target.

Paul Andrew Zimbardo: Around like $20 million, just what would I know the targets or at least what would you need to see to kind of increase those targets and what kind of drove that initial outperformance versus target.

Paul Andrew Zimbardo: Yeah, sure Hey, Paul It's Joe So first focusing on what drove the outperformance in 2023 as we noted we achieved $75 million in savings compared to the $50 million to $60 million target that we had coming into the year. It was really driven by acceleration of some of the initiatives from 2024.

Joseph P. Bergstein: So first, focusing on what drove the outperformance in 2023, as we noted, we achieved $75 million in savings compared to the $50 to $60 million target that we had coming into the year. It was really driven by the acceleration of some of the initiatives in 2024. When we started the TMO process, we had initiative owners for all these projects that would deliver these savings, and we've set milestones and KPIs for all of them. And so what we saw, bringing that rigor to the process has actually allowed us to accelerate in some areas, which gives us confidence in achieving the $120 to $130 million next year and the $175 million overall. As Spence talked about in his remarks, focusing on the utility of the future and ensuring affordability for customers is key.

Speaker Change: When we started the TMO process.

Have initiative owners for all of these projects that will deliver the savings and we've set milestones and kpis for all of them and so what we saw bringing that rigor to the process has actually allowed us to accelerate in some areas, which gives us confidence in achieving the 120 to 130 million.

Next year and the 175 overall as we've talked about this talk.

Speaker Change: What about in his remarks focused on the utility of the future.

Speaker Change: During affordability for customers is key and so from from that perspective, we will continue to look to get more efficient as we go through the plan but.

Speaker Change: Where we are today is we're still holding that 175 at least once every five years, we said what I can say is the growth of.

Joseph P. Bergstein: And so from that perspective, we'll continue to look to get more efficient as we go through the plan. But where we are today is that we're still holding that $175, at least $175, as we said. What I can say is that the growth that we're talking about here and extending that into 2027 doesn't rely on further efficiencies.

Speaker Change: We're talking about here and extending that into 2027 doesn't rely on further.

Speaker Change: Efficiencies so to the extent that we're successful in identifying more of that would be upside to the current plan.

Speaker Change: Okay.

Speaker Change: Okay, Great very clear and then on the rate case timing strategy and have been listed a bunch of factors.

Paul Andrew Zimbardo: So to the extent that we're successful in identifying more, that would be upside to the current plan. Okay, great. Very clear. And then on the rate case timing strategy, I've been listed a bunch of factors, but one of them wasn't about how rate cases go for peers. Just curious, how important is that?

Speaker Change: One of them wasn't about how rape cases go for peers, just curious how important is that.

Speaker Change: As you think through the process, how that especially in Pennsylvania, just given a lot of the rate cases that extra cash is mentioning how important is that to kind of assess your own plan.

Vincent Sorgi: As you think through the process, how, especially in Pennsylvania, just given a lot of the rate cases, as Durgesh is mentioning, how important is that to kind of assess your own plan? Yeah, well, clearly, because we have no rate cases in 2024 across the board, we're able to assess the regulatory environment and the outcomes that our peers are getting. As we know, not every company gets the same outcome, even under the same jurisdiction.

Speaker Change: Yeah, well clearly because.

Speaker Change: Because we have no rate cases in 2024 across the board we're able to.

Assess the regulatory environment and the outcomes that our peers are getting.

Speaker Change: As we know not not every company gets the same outcome even under the same jurisdiction. So it wasn't totally impact our decision, but clearly it's something that we will keep an eye on and feed into our decision, making and again. The fact that we don't have anything for for the certainly the rest of this year.

Paul Andrew Zimbardo: So it wouldn't totally impact our decision. But clearly, it's something that we will keep an eye on and feed into our decision making. And again, the fact that we don't have anything for certainly the rest of this year. You know, likely the first one will be down in Kentucky sometime in 2025.

Speaker Change:

Speaker Change: Likely the first one will be down in Kentucky sometime in 2025.

Speaker Change: Feeling pretty good about that our timing that we have in the plan right now.

Speaker Change: Okay, great. Thanks, so nicely done last year.

Vincent Sorgi: I am feeling pretty good about the timing that we have in the plan right now. Okay, great. Thanks. Nicely done, Nostra.

Speaker Change: Thanks, great. Thanks.

Speaker Change: As a reminder, if you have a question. Please press Star then one to enter the question queue.

Paul Andrew Zimbardo: Thank you. Great. As a reminder, if you have a question, please press star then 1 to enter the question queue. The next question comes from Anthony Crowdell with Mizzou. Please go ahead. Hey, good morning, guys. Congratulations on a good quarter. Just a couple of quick ones.

Speaker Change: The next question comes from Anthony <unk> with Mizuho. Please go ahead.

Anthony: Hey, good morning, guys. Congrats on a good quarter just couple quick ones one follow up from Andrew's question.

Anthony Crowdell: One up to follow up on Angie's question. What's this low growth forecast you're assuming for twenty four? Hey, it's Joe.

Anthony: What's this load growth forecast youre assuming for 2004.

Anthony: Hey, Anthony it's Joe we're assuming a 50 basis point load growth throughout our planning horizon.

Joseph P. Bergstein: We're assuming 50 basis points of load growth throughout our planning horizon. Oh, great, and then if I could jump on a Durgesh question... In Pennsylvania, you're filing the disk, and I think you're looking to raise the cap. Again, I'm not saying that it's not, I'm here to say it doesn't get approved, but if you don't get approval, does that increase the frequency of the rate filing, or do you believe you have other offsets that you could still stay out in Pennsylvania a little longer? Yeah, it's the latter, Anthony.

Speaker Change: Great and then if I could jump on <unk> question.

In Pennsylvania, you're filing the disc and I think you're looking to raise the cap you talked about it just curious.

Speaker Change: Again, I'm not saying that.

Speaker Change: Year to say it doesn't get approved but you don't get approval does that increase the frequency of the rate filing where you believe you have other offsets that you could still stay out in Pennsylvania, a little longer.

Speaker Change: Yes, it's the latter Anthony.

Anthony Crowdell: We have some modest value in the plan coming from the disk filing, but I think the real benefit is that it would enable us to stay out longer in Pennsylvania and make the investments that we had talked about. But yeah, to your point, if for some reason that that request does not get approved, we're comfortable we can manage that and still maintain the growth targets that we've talked about. And then just lastly, on slide 17, I appreciate the detail on you don't have any near-term financing. Just in 2026, you see the capital funding; you also have the electric utility funding there. On those maturities, do you think you'll retire those vehicles, those financing vehicles? Do you think you'll just roll over that?

Speaker Change: We have some modest value in the plan coming from the disk filing I think the real benefit as it would enable us to stay out longer in Pennsylvania.

Speaker Change: And make the investments that we had talked about but yes to your point if for some reason that that request does not get approved.

Speaker Change: We're comfortable we can manage that and still maintain the growth targets that we've talked about.

Speaker Change: Great and then just lastly on.

Speaker Change: Slide 17, I appreciate the detail on that.

Speaker Change: Have any near term financing.

Speaker Change: In 2026, you see the capital funding you also have the electric utility funding there on those maturity do you think you'll retire those vehicles those financing vehicles do you think.

Joseph P. Bergstein: I'm just curious about your plans for those financing vehicles. Yeah, Anthony, we'll, we'll have to discuss that as we get closer. Obviously, where interest rates are will play a big role in what we do there. So I think it's a little early to tell on how we'll treat those. Our assumption is that we reify them.

Speaker Change: You just roll over that I'm, just curious of what Youre plans is on those financing vehicles.

Speaker Change: Yeah, Anthony will have to assess that as we get closer obviously, where interest rates are will play a.

A big role in what we do there. So I think it's a little early to tell on how we'll treat those our assumption is that we refi them roll in.

Anthony Crowdell: Great. Thanks so much, Vin. First place.

Speaker Change: Great. Thanks, so much Ben first probably talk to you guys. So yeah.

Anthony Crowdell: Talk to you guys soon. Yeah. Take care, Anthony. Go Rangers.

Speaker Change: Thank you Anthony go ranges.

David Paz: The next question comes from David Paz with Wolf. Please go ahead. Hey, David. Good morning. Good morning, can you hear me?

Speaker Change: The next question comes from David Paz with Wolfe. Please go ahead.

David Paz: Hey, David Good morning.

David Paz: Good morning can you hear me.

David Paz: Yes. Oh, great. Great. Thank you. Just actually following up on the previous question, with your FFO to debt in particular, where are you in that 16 to 18% currently and, kind of, how does that, what's the profile of that over the course of your plan? Yeah, I would say we're comfortably in that 16 to 18% range. In the early part of the plan, we continue to have integration costs for Rhode Island that obviously impact the credit metric, and those roll away. And then you see the capex increase later in the plan.

David Paz: Yes.

David Paz: Okay, great. Thank you just actually following up on previous question that.

David Paz: With your flow to that particular.

David Paz: Where are you in that 16% to 18% currently and where.

David Paz: How does that what's the profile of that over the course of your plant.

Speaker Change: Yes, I would say, we're comfortably in that 16% to 18% range.

Speaker Change: And the early part of the plan we continue to have.

Speaker Change: Integration costs for Rhode Island that obviously are impacted credit metric and those roll away.

Speaker Change: And then you see the Capex increase later in the plan. So we feel really good about where we are within that range.

Joseph P. Bergstein: So we feel really good about where we are within that range and, you know, kind of operate comfortably around the midpoint. Perfect. Thank you.

Speaker Change: <unk>.

Speaker Change: Kind of operate comfortably around the midpoint.

Speaker Change: Perfect. Thank you.

David Paz: And then just, I don't know if you've touched on this, but what are your opportunities? What opportunities do you see from the pending offshore wind solicitations? More transmission?

Speaker Change: And then just.

Speaker Change: I don't know if you touched on this but what are your opportunities what opportunities you see from the pending offshore wind solicitations.

Speaker Change: More transmission.

Vincent Sorgi: You know, what do you have in your plan, if anything, just any color you can provide? That'd be great. Sure. So there are a couple opportunities there. Obviously, we have the RFP that we've issued in Rhode Island.

Speaker Change: Do you have in your plan if anything just any color you can provide that'd be great.

Sure. So a couple of opportunities there obviously, we have the RFP that we've issued in Rhode Island.

Vincent Sorgi: We are not the owners of that, but we would be the offtaker of that generation. And so to your point, you know, we have, we do have in the plan the transmission required to, the enhancements to the transmission grid to handle that offshore wind load. We have talked in the past about our joint venture with Wind Grid to potentially provide wet transmission solutions more broadly up in Rhode Island or New England that we would partner with them on where we would not own the turbine, the wind turbine generation, but we would build out a mesh network of sorts to lower the overall cost of the transmission build out. As we think about, you know, upwards of 30 gigawatts.

Speaker Change: We're not the owners of that but we would be the off taker of that generation.

Speaker Change: And so to your point, we have we do have in the plan the transmission required to.

The enhancements to the transmission grid to handle that.

Offshore wind load.

Speaker Change: We have talked in the past about.

Speaker Change: Our joint venture.

Speaker Change: With wind grid.

Speaker Change: To potentially provide wet transmission solutions more broadly up in Rhode Island or new.

Speaker Change: New England.

Speaker Change: That we would partner with them on where we would not own the.

Speaker Change: The turbine the wind turbine generation, but we would build out a a mesh network of sorts to lower the overall cost of.

Speaker Change: The transmission build out.

Speaker Change:

Speaker Change: As we think about upwards of 30 takes us.

Vincent Sorgi: Offshore Wind over the next say decade being built out there. That opportunity will highly depend on where the U.S. Treasury ultimately comes out on their implementation provisions for the IRA. So we are monitoring those regulations very closely. The initial regulations that came out from the Treasury, we think were in error in proposing that the regulations would limit the eligibility of the ITC credit for that wet transmission only if that transmission is owned by the same taxpayer that owns the wind turbines themselves. That limitation, if the final rules come out that way, would unnecessarily raise the cost of the offshore wind industry, which we know is quite challenged. And so we continue to engage with the administration and other policymakers to try to improve that final regulation and expand it to all taxpayers, not just ones that own the turbines, and to try to bring the overall cost of offshore wind down so that we can get this very important clean energy source kind of up But I can't give you any assurance in terms of what that final rule is going to say. I can't say we don't have any of that.

Speaker Change: Offshore wind over the next say decade being built out up there.

Speaker Change: That opportunity will will highly depend on where the U S. Treasury ultimately comes out on their implementation provisions for the IRR. So.

Speaker Change: We are monitoring those regulations very closely.

Speaker Change: The initial regs that came out from the Treasury, we think were in error in proposing that that the regulations would.

Speaker Change: Limit the eligibility of the ITC credit for that wet transmission only yes.

Yes that transmission is owned by the same taxpayer that owns the wind turbines themselves.

Speaker Change: That limitation, if the final rules come out that way would unnecessarily range the cost of the offshore.

Speaker Change: Wind industry, which we know is quite challenged and so we continue to engage with the administration and other policymakers to try to improve that final regulation and expand it to two all taxpayers not just ones that all the turbines and to try to bring the overall cost of offshore wind.

Speaker Change: So that we can get this very important clean energy source kind of up and running in the U S.

Speaker Change: But I can't give you any assurance in terms of what that final rule was going to say I can't say, we don't have any of that.

Vincent Sorgi: Upside potential in our business plans, not in our growth projections at all at this point. I would say it kind of hinges on this and then the states really coming together up there and partnering on this broader solution, which we believe will certainly bring the cost of offshore wind down. Great, thank you so much for the call.

Speaker Change: Upside potential in our business plan is not in our growth projections at all at this point.

I would say kind of hinges on this and then the states really coming together out there and partnering on this.

Broader solution, which which we believe will certainly bring the cost of offshore wind down.

Speaker Change: Great. Thank you so much for all the coal.

Speaker Change: Sure.

Vincent Sorgi: This concludes our question and answer session. I would like to turn the conference back over to Vince Sorgi for any closing remarks. I just want to say thanks for joining us. Again, a strong end to 2023. I'm really looking forward to 2024 and beyond. I've spent quite a bit of time talking about the utility as a future strategy. We do think that's an area that differentiates us from our peers, as well as the strength of our balance sheet and our overall dividend policy, where we're growing the dividend in line with earnings.

Speaker Change: This concludes our question answer session I would like to turn the conference back over to Vince <unk> for any closing remarks.

Vincent Sorgi: Just wanted to say thanks for joining US again strong end to 2023 really looking forward to 2024 and beyond spent quite a bit of time talking about the utility of the future strategy. We do think that's an area that differentiates us from our peers as well as.

Vincent Sorgi: The strength of our balance sheet and our overall dividend policy, where we're growing the dividend in line with with earnings.

Vincent Sorgi: So, just appreciate everybody calling us and for joining us and look forward to providing updates as we go through the year. Thanks so much. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. BF-WATCH TV 2021

Speaker Change: So just appreciate everybody for calling us and Eric for joining us and look forward to providing updates as we go through the year. Thanks, so much.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].