Q1 2024 OGE Energy Corp Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the OGE Energy Corp 2024 First Quarter Earnings and Business Update Call.
Good day and thank you for standing by welcome to the O G Energy Corp, 'twenty 'twenty four first quarter earnings and business update call. At this time all participants are in listen only mode. After the speaker's presentation there will.
Operator: At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jason Bailey, Director of Investor Relations. For opening comments, Jason, please go ahead.
A question and answer session to ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Jason Bailey director of Investor Relations for opening comments, Jason. Please go ahead.
Jason Bailey: Thank you, Liz, and good morning, everyone, and welcome to our call. With me today, I have Son Trauschke, our chairman, president, and CEO, and Brian Buckler, our CFO.
Jason Bailey: Thank you Liz and good morning, everyone and welcome to our call with me today I have Sean Trotsky, our chairman, President and CEO and Brian Butler, our CFO and.
Jason Bailey: In terms of the call today, we will first hear from Sean, followed by an explanation from Brian of the financial results. And finally, as always, we will answer your questions. I would like to remind you that this conference is being webcast, and you may follow along at oge.com. In addition, the conference call and accompanying slides will be archived following the call on that same website. Before we begin the presentation, I'd like to direct your attention to the Safe Harbor statement regarding forward-looking statements.
In terms of the call today, we will first hear from Sean followed by an explanation from Brian Our financial results and finally as always we will answer your questions.
I would like to remind you that this conference is being webcast and you may follow along at <unk> Dot Com. In addition, the conference call and accompanying slides will be archived following the call.
Jason Bailey: On that same website.
Speaker Change: Before we begin the presentation I'd like to direct your attention to the Safe Harbor statement regarding forward looking statements.
Speaker Change: This is an SEC requirement for financial statements and simply states that we cannot guarantee forward looking financial results, but this is our best estimate to date.
Jason Bailey: This is an SDC requirement for financial statements and simply states that we cannot guarantee forward-looking financial results, but this is our best estimate to date. I will now turn the call over to Sean for his opening remarks.
Speaker Change: I will now turn the call over to Sean first opening remarks, John Okay. Thank.
Robert Sean Trauschke: Hey, thank you, Jason. Good morning, everyone.
Sean Trotsky: Thank you Jason Good morning, everyone. Thank you for joining us today.
Robert Sean Trauschke: Thank you for joining us today. It's certainly great to be with you. The first quarter of the year delivered solid results, and we are firmly on plan for the year. This morning, we reported consolidated earnings of $0.09 per share, including $0.12 per share for OG&E and a holding company loss of $0.03 per share. The first quarter represents less than 5% of our company's expected earnings per share for the year, and we are on plan, even with the milder weather.
Sean: Great to be with you.
Sean Trotsky: First quarter of the year delivered solid results and we are firmly on plan for the year.
Sean: Morning, We reported consolidated earnings of nine cents per share, including 12 per share for Jamie and our holding company loss of <unk> <unk> per share.
Sean: The first quarter represents less than 5% of our company's expected earnings per share for the year. We are on plan, even with the milder weather I'm excited for this year and beyond given the strong fundamentals of our business.
Robert Sean Trauschke: I'm excited for this year and beyond, given the strong fundamentals of our business, our outstanding team, and our commitment to reach our North Star, delivering safe, reliable, and affordable electric service to our 900,000 customers. Last quarter, I updated you on recognition the company and our team received for our culture, and today I can add another award to that list. In addition to being named a Top Workplace in Oklahoma, we were recently named a National Top Workplace by USA Today. We operate in a highly competitive labor market, and it is fulfilling to see our people and culture drive results, innovation, and a sense of belonging. I couldn't be more proud to work alongside my 2,300 colleagues.
Sean: Standing team and our commitment to reach our Northstar delivering safe reliable and affordable electric service to a 900000 customers.
Sean: Last quarter I updated you on recognition the company and our team received for our culture and today I can add another one to that list and.
Sean: In addition to being named a top workplace in Oklahoma. We were recently named a national top workplace by USA today.
Sean: We operate in a highly competitive labor market and it is fulfilling to see our people and culture drive results innovation and a sense of belonging I couldnt be more proud to work alongside my 'twenty 300 colleagues their commitment to our purpose runs deep and together we are driven to achieve excellence.
Robert Sean Trauschke: Their commitment to our purpose runs deep, and together we are driven to achieve excellence. Our people's dedication to the communities we support is unwavering. Last Saturday night, at least 25 tornadoes were spotted in Oklahoma, accompanied by high winds, lightning, and hail.
Sean: Our people's dedication to the communities we support is unwavering.
Sean: Last Saturday night at least 25 tornadoes were spotted in Oklahoma.
Sean: Company by high winds lightning and hail.
Robert Sean Trauschke: You've likely seen the news footage of the devastation and heard about the tragic loss of life in a number of towns in southern Oklahoma. Since Saturday night, our team has worked around the clock to restore power to every customer who could get it. It will take months, and perhaps years, for those communities to recover, and we'll be right alongside our neighbors throughout the rebuilding process. As we keep these communities front and center, let's transition to our business this morning. Today, I want to touch on three topics.
Sean: You've likely seen the news footage of the devastation and heard about the tragic loss of life and a number of towns in southern Oklahoma.
Sean: Saturday night, our team has worked around the clock to restore power to every customer who could take power.
Sean: It will take months and perhaps years for those communities to recover and we will be right alongside our neighbors throughout the rebuilding process.
Sean: As we keep these communities front of mind, let's transition to our business. This morning today I want to touch on three topics operational excellence for our customers activity on the regulatory front and a preview for the rest of the year.
Robert Sean Trauschke: Operational Excellence for Customers, Activity on the Regulatory Front, and a preview for the rest of the year. Looking at operations, our grid and weather hardening investments continue to deliver great reliability results. Customers are experiencing fewer and shorter outages as a result of technology platforms and applications that improve communication between devices and automatically reroute power in the event of an outage. We continue to harden the grid by strengthening and replacing poles and restoring structures. And when we look at the circuits we've hardened through our grid enhancement program, safety for those circuits has improved 28% since 2020. On the generation front, our power plant operations continue to hum.
Sean: Looking at operations, our grid and whether hardening investments continue to deliver great reliability results.
Sean: Customers are experiencing fewer and shorter outages as a result of technology platforms and applications that improve communication between devices and automatically reroute power in the event of an outage, we continue to harden the grid by strengthening and replacing Poles and restoring structures and when we look at the circuits we.
Sean: Arden through our grid enhancement program safety for those circuits has improved 28% since 2020.
Sean: On the generation front, our power plant operations continue to home supply in the grid with electricity to serve our customers. We completed our latest RFP at the end of March identifying a five year plan to address generation capacity needs through 2028.
Robert Sean Trauschke: Supplying the grid with electricity to serve our customers. We completed our latest IRP at the end of March, identifying a five-year plan to address generation capacity needs through 2028. The IRP determined that a combination of solar and CTs was the best choice to meet the identified needs.
Sean: ERP determined that a combination of solar and <unk> are the best choice to meet the identified needs.
Robert Sean Trauschke: Shortly, we will issue draft RFPs per the commission rules, and then 30 days after that, we'll issue the final RFPs. And we'll keep you posted as we move along this process. We are reviewing the final EPA rules released last Thursday to better understand how they may impact our current and future generation plans. Timing for full implementation is uncertain, as the rules will likely be challenged in court.
Sean: Shortly we will issue draft Rfps per the Commission rules and then 30 days after that Wolf issued a final rfps and we'll keep you posted as we move along this process.
Sean: We are reviewing the final EPA rules released last Thursday to better understand how they may impact our current and future generation plans timing for full implementation is uncertain as the rules will likely be challenged in the courts.
Robert Sean Trauschke: Together, the investments we make in Generation & Wires support the growing communities in our service area. Last month, the Wall Street Journal ranked our hometown of Oklahoma City as the fifth hottest job market in the country, due in large part to our low cost of living, of which OG&E is a significant part. And just this week, Forbes ranked Oklahoma City the second best place for small business in the country. We see growth across a broad set of industries, including health care, tribal enterprises, military, housing, and data. Speaking of days,
Sean: Together the investments, we make in generation and wires support the growing communities in our service area.
Sean: Last month, the Wall Street Journal ranked our hometown of Oklahoma City as the fifth hottest job market in the country due in large part to our low cost of living of which <unk> is a significant part and just this week Forbes ranked Oklahoma City. The second best place for small business in the country.
Sean: We see growth across a broad set of industries, including healthcare tribal enterprises military housing and data centers speaking of data centers. We're excited about the high interest our service area garners for data center locations, given that our competitive rates make us an attractive option we have.
Robert Sean Trauschke: We're excited about the high interest our service area garners for data center locations, given that our competitive rates make us an attractive option. We are in discussions with a half-dozen or so projects in various stages of development, and we will continue to update you as we make progress on that front. For the first quarter, both load growth and customer growth were exceptional and set a strong pace for the remainder of the year, and Brian will share more of those details shortly.
Sean: In discussion with a half dozen or so projects in various stages of development and we will continue to update you as we make progress on that front.
Sean: For the first quarter, both load growth and customer growth were exceptional and set a strong pace for the remainder of the year and Brian will share more of those details shortly.
Robert Sean Trauschke: Yesterday, the U.S. Department of Energy's Office of Clean Energy Demonstrations awarded the Choctaw Nation of Oklahoma an ERA grant to improve resilience in Poto, Oklahoma. OGE will support the grant by creating a microgrid to serve seven buildings on their campus, including a health clinic, child development center, and food distribution.
Sean: Yesterday U S Department of Energy's office of clean energy demonstrations awarded the Choctaw nation of Oklahoma.
Sean: Grant to improve resilience and Poe to Oklahoma.
Sean: G&A will support the grant by creating and micro grid to serve seven buildings on their campus.
Sean: <unk>, a health clinic to our development Center and food distribution Center, we congratulate our partner the chalk termination of Oklahoma for securing one of 19 grants in the U S that will benefit their members and the community at large we are active in pursuing additional grants to further support affordability and we were encouraged to apply for the two.
Robert Sean Trauschke: We congratulate our partner, the Choctaw Nation of Oklahoma, for securing one of 19 grants in the U.S. that will benefit their members and the community at large. We are active in pursuing additional grants to further support affordability, and we were encouraged to apply for the two grant proposals currently under review. You will recall that we've already won a grant for our Smart Grid project. Pursuing these grants means cost-effective grid reliability and resilience improvements for our customers.
Sean: Hi, Grant proposals currently under review.
Sean: Call that we've already won and grant for our smart grid project.
Sean: Pursuing these grants means cost effective grid reliability and resiliency improvements for our customers.
Robert Sean Trauschke: The investments we make to improve the grid and deliver reliable electricity to our customers must be made with an eye on affordability. To that end, today, we are reducing the fuel factor again in Oklahoma. This reduction will result in lower customer bills this summer of approximately $25 per month for the average residential customer when compared to last summer.
Sean: The investments, we make to improve the grid and deliver reliable electricity to our customers.
Sean: Must be made with an eye on affordability.
Sean: To that end today, we are reducing the fuel factor again in Oklahoma. This reduction will result in lower customer bills. This summer of approximately $25 per month for the average residential customer when compared to last summer.
Robert Sean Trauschke: In Oklahoma, our rate review is well underway. This review is straightforward and is driven by our request to recover investments we've made over the last two years in the grid, new customer connections, and storm restoration. These investments, like the grid enhancement, are delivering improved reliability and resiliency for our customers. Earlier this year, as much of the country called for conservation and experienced outages during winter storms Jerry and Heather, our systems ran, and our Generation Fleet performed extremely well, with no need to call for conservation.
Sean: In Oklahoma our rate review is well underway. This review is straightforward and is driven by our request to recover investments. We've made over the last two years and the grid new customer connections and storm restorations. These.
Sean: These investments like the grid enhancements are delivering improved reliability and resiliency for our customers.
Sean: Earlier this year as much of the country called for conservation experienced outages during winter storms, Jerry and Heather our systems ran in our generation fleet performed extremely well with no need to call for conservation.
Robert Sean Trauschke: Late last week, we received responsive testimony in the Oklahoma Rate Review. As you know, this is one part of the overall rate review, and we appreciate the transparent and public process the Oklahoma Corporation Commission provides. We will file our rebuttal testimony later this month, and the public hearing is scheduled for June, and we expect new rates to be effective July 1st.
Sean: Late last week, we received responsive testimony in the Oklahoma rate review as you know this is one part of the overall rate review and we appreciate the transparent public process. The Oklahoma Corporation Commission provides.
Sean: We will file our rebuttal testimony later this month and the <unk>.
Sean: Public hearing is scheduled for June and we expect new rates to be effective July one.
Robert Sean Trauschke: All of this is to say that the net impact of this rate review, including our back-to-back fuel increases and decreases, is that customer rates will be lower this year than they were last summer. And in Arkansas, the 1.4% increase we implemented on April 1st, associated with our final formula rate plan update, was more than offset by the reduction we made to our fuel factor on the same day, which resulted in a $23.51 reduction for the average Arkansas residential customer's monthly bill when compared to last year.
Sean: All of this is to say the net impact of this rate review, including our back to back fill increases decreases is that customer rates will be lower this year than they were last summer.
Sean: And in Arkansas, the one 4% increase we implemented on April one associated with our final formula rate plan update was more than offset by the reduction we made to our fuel factor on the same day, which resulted in a $23.51 reduction for the average Arkansas residential customers monthly bill when compared.
Robert Sean Trauschke: Constructive regulatory outcomes enable us to support community growth, serve customers, and achieve results for our shareholders. In closing, I hope you hear how bullish we are on our company and our future. The case for investment in OGE Energy is strong thanks to our sustainable business model, beginning with fantastic fundamentals, with already low rates and now even lower rates, a thriving service area, a high-quality balance sheet and credit metrics, an economic development engine that drives customer and load growth, and Operational Excellence, delivered by an incredible team dedicated to reaching our North Star. With that, I'll turn the call over to Brian. Brian?
Sean: To last year.
Sean: Constructive regulatory outcomes enable us to support community growth serve customers and key results for our shareholders.
Speaker Change: In closing.
Sean: I Hope you hear how bullish we are on our company and our future. The case for investment know GE energy is strong thanks to our sustainable business model.
Sean: Gaining with fantastic fundamentals with already low rates and now even lower rates, a thriving service area, a high quality balance sheet and credit metrics and economic development engine that drives customer and load growth in.
Sean: In operational excellence delivered by an incredible team dedicated to reach our North star So with that I'll turn the call over to Bryan Bryan.
Brian Buckler: Thank you, Sean. Thank you, Jason, and good morning, everyone. Let's start on slide seven and discuss first quarter 2024 results. On a consolidated basis, first quarter net income was 19 million or nine cents per diluted share compared to 38 million or 19 cents per share in the same period in 2023. In our core business, the electric company achieved net income of $25 million or 12 cents per diluted share compared to 40 million or 20 cents per share in the same period, 2023. As expected, electric company net income decreased primarily due to higher depreciation and interest expense related to our customer-centric capital investments made over the last two years.
Bryan: Thank you Sean Thank you, Jason and good morning, everyone, let's start on slide seven and discuss first quarter 2024 results.
Bryan: On a consolidated basis first quarter net income was $19 million or <unk> <unk> per diluted share compared to $38 million or <unk> 19 per share in the same period 2023, and our core business. The electric company achieved net income of $25 million or <unk> <unk> per diluted share compared to $40 million or <unk> 20 per share in the same period.
Bryan: 2023.
Bryan: As expected electric company net income decreased primarily due to higher depreciation and interest expense related to our customer centric capital investments made over the last two years.
Brian Buckler: This significant regulatory lag is the primary area being addressed in our current rate relief filing in Oklahoma. The decrease in net income was partially offset by higher operating revenues from strong load growth. Stepping back a moment, the benefits to our customers from the investments we make to serve our growing service area are immense, ranging from reliability and resiliency improvements to increased capacity for economic development. In fact, the low growth we have seen since our last rate case allowed us to reduce the revenue request in our Oklahoma rate case by approximately $70 million.
Bryan: This significant regulatory lag as a primary primary area are being addressed and our current rate really filing in Oklahoma the.
Sean: The decrease in net income was partially offset by higher operating revenues from strong load growth.
Sean: Stepping back a moment the benefits the benefits to our customers from the investments we make to serve our growing service area are immense.
Sean: <unk> from a reliability and resiliency improvements to increase capacity for economic development. In fact, the load growth we have seen since our last rate case allowed us to reduce the revenue request in our Oklahoma rate case by approximately $70 million.
Brian Buckler: To round off our discussion of Q1 consolidated results, other operations, including our holding company, reported a loss of $7 million or $0.03 per diluted share in the first quarter, compared to a loss of $2 million or a penny loss per share in the same period last year. The increase in net loss was primarily due to higher interest expense on increased short-term debt.
Sean: To round off our discussion of Q1 consolidated results other operations, including our holding company reported a loss of $7 million or <unk> <unk> per diluted share in the first quarter compared to a loss of $2 million or a penny loss per share in the same period 2023.
Sean: The increase in net loss was primarily due to higher interest expense on increased short term debt.
Brian Buckler: Regarding full-year EPS expectations, our exceptional low trends have made up for the mild weather in Q1 that impacted results by approximately 3.6%. Therefore, overall, our year-to-date results are right on line with our expectations, and we are firmly on plan to deliver our Consolidated Earnings Commitment for 2024 of $2.12 within a range of $2.06 to $2.18 per share. Let's move to slide 8 for a deeper look at the load results.
Sean: Regarding full year EPS expectations are exceptional load trends have made up for the mild weather in Q1 that impacted results by approximately <unk> <unk>.
Sean: Therefore overall our year to date results are right on line with our expectations and we are firmly on plan to deliver our consolidated earnings commitment for 2024 of $2 12.
Sean: Within a range of 206 to $2 18 per share.
Sean: Let's move to slide eight for a deeper look at load results our customer count grew at a rate of one 1% and that coupled with strong economic expansion in Oklahoma and Arkansas.
Brian Buckler: Our customer count grew at a rate of 1.1 percent, and that, coupled with strong economic expansion in Oklahoma and Arkansas, resulted in weather-normalized load growth of 4.8 percent compared to first quarter 2020. Residential load growth for the quarter of 3.9% is the strongest quarterly expansion we have seen since the pandemic, and Commercial Sector Growth at 12% continues the trends we've seen in this customer class over the last couple of years. Certainly, the residential and commercial sectors have benefited the most from the vibrant nature of the economies in Oklahoma and Arkansas, but it does not stop there.
Sean: Bolted on weather normalized load growth of four 8% compared to first quarter of 2023.
Sean: Residential load growth for the quarter of three 9% as the strongest quarterly expansion, we have seen since depend demick.
Sean: And commercial sector growth of 12% continues continues to trends we've seen in this customer class over the last couple of years.
Sean: Certainly the residential and commercial sectors benefited the most from the vibrant nature of the economies in Oklahoma and Arkansas, but it does not stop there are other three customer sectors of industrial oilfield and public authority all achieved weather normal load results better than what was budgeted for the first quarter.
Brian Buckler: Our other three customer sectors of industrial, oil field, and public authority all achieved weather-normal load results better than what was budgeted for the first quarter. Sean mentioned Oklahoma City, our hometown, as having one of the hottest job markets in the country.
Sean: Sean mentioned, Oklahoma City, our hometown as having one of the hottest job markets in the country.
Brian Buckler: Economic and business development efforts enhanced by our low rates are facilitating new businesses locating in our service area and existing customers expanding their business. The potential for continued outstanding load growth for many more years, including from data centers, is compelling, underscoring the dynamic economic landscapes in which we operate. All of this is our sustainable business model in action, attracting new customers with low rates and spreading costs across the larger customer and load base, with an aim to maintain some of the lowest rates in the country.
Sean: Economic and business development efforts enhance viral low rates are facilitating new businesses locating to our service area and existing customers expanding their businesses.
Sean: The potential for continued outstanding load growth for many more years, including from data centers is compelling underscoring the dynamic economic landscapes in which we operate.
Sean: All of this is our sustainable business model in action, attracting new customers with low rates and spreading costs across a larger customer base with an aim to maintain some of the lowest rates in the country.
Brian Buckler: Let's wrap up on slide nine with an update on our financing plan for the remainder of the year. As discussed during our last call, in the second quarter, we plan to issue up to $350 million at Holt Co. to term out short-term debt, and at the utility, we plan to issue $300 to $350 million in the latter half of the year. Our current capital plan requires no external equity to maintain our estimated credit metric of 17% FFO to debt each year of the five-year plan.
Sean: Let's let's wrap up on slide nine with an update on our financing plan for the remainder of the year <unk>.
Sean: As discussed during our last call in the second quarter, we plan to issue up to $350 million at the Holdco to term out short term debt and at the utility we plan to issue $300 million to $350 million in Nevada or half of the year.
Sean: Our current capital plan requires no external equity to maintain our estimated credit metric of 17% <unk> to debt each year of the five year plan. It is worth noting that Moody's recently reaffirmed our credit ratings and stable outlook as shown on slide 14.
Brian Buckler: It is worth noting that Moody's recently reaffirmed our credit ratings and stable outlook, as shown on slide 14. On a procedural note, it's hard to believe I've already been at OG&E for over three years now, and I recall telling you during my first year that we would be following a routine S3 update. Well, it's that time again, and this month we will update our standard S3 shelf registration with the SEC, which allows our continued access to the public capital market.
Speaker Change: On a procedural note it's hard to believe I have already been at <unk> for over three years now and our recall telling you here in my first year that we would be filing a routine as three update well set time again in this month, we will update our standard S. Three shelf registration with the SEC, which allows our continued access to the public capital markets.
Brian Buckler: Before we turn the call over to Q&A, let me recap today's message. Our first quarter financial results are right on plan and set us up well to deliver on our earnings guidance for the full year. We remain confident in our ability to achieve our long-term earnings per share growth guidance of 5 to 7 percent. And business fundamentals are strong, with a solid balance sheet, constructive regulatory environments, robust load growth, and the steadfast dedication of our team members. That concludes our prepared remarks, and we will now open the line for your questions. Thank you. At this time, we will conduct a question and answer session.
Speaker Change: Before we turn the call over for Q&A, Let me recap today's message.
Speaker Change: First quarter financial results are right on plan and set us up well to deliver on our earnings guidance for the full year.
Speaker Change: We remain confident in our ability to achieve our long term earnings per share growth guidance of 5% to 7%.
Speaker Change: And business fundamentals are strong with a solid balance sheet constructive regulatory environments robust load growth and a steadfast dedication of our team members that.
Speaker Change: That concludes our prepared remarks, and we will now open the line for your questions.
Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A list. Our first question comes from Constantine Lednev with Guggenheim Partners. You are live.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from Constantine <unk> with Guggenheim Partners.
Constantine Lednev: Hi, good morning, Sean Bryan. Thanks for taking the questions today.
Speaker Change: Life.
Constantine: Hi, Good morning, Sean Brian Thanks for taking the questions today.
Speaker Change: Yes, good morning constant team good morning Constantine.
Constantine Lednev: Great quarter, great quarter. Can you elaborate on the cadence of updates related to the RFPs, kind of just the timeframe that you're maybe looking at, and how those updates would be layered into the CapEx plan over time? Are we waiting for next year?
Speaker Change: Great quarter, great quarter.
Constantine: Can you elaborate on the cadence of updates related to the Rfps.
Speaker Change: Hi frame that you're maybe looking at.
Speaker Change: Kind of how those updates would be layered into the capex line overtime or waiting kind of for next year and to do that.
Speaker Change: Ctrip pre fund those and your financing plan once you get clarity.
Robert Sean Trauschke: Yeah, great question, Constantine, and it's going to mirror very closely what happened the last time, the last IRP. You know, we're intentionally making sure that we dot the I's and cross the T's and follow all the commission processes. So we'll issue this draft RFP 30 days after that, and we'll have some stakeholder discussions. Thirty days after that, we'll issue the final one. Probably later in the year, we'll have all the bids back and have arrived at a decision, probably in the fourth quarter.
Speaker Change: Outcome.
Speaker Change: Yes, great Great question, Constantine and it's going to mirror.
Speaker Change: Very similar to what happened the last time the last IRB.
Speaker Change: Intentionally making sure that we.
Speaker Change: <unk> dot the I's and cross the Ts and following all the commission processes. So we will issue. This draft RFP 30 days after and we will have some stakeholder discussions 30 days after that will issue a final one probably later in the year, we will have all the bids back and arrived at a decision probably in the fourth quarter.
Robert Sean Trauschke: We will file that with the commission for approval, just like we did last time. Once we get approval for our recommendations, then we'll layer that into our tables and discuss the kind of timing and and how we'll fund that. Okay. Okay, perfect. This is it. Look, we're anxious to get started, but this is a process, and we're going to follow the process.
Speaker Change: We will file that with the commission for approval just like we did last time once we get approval for our recommendations then we'll layer that into our tables and <unk> and.
Speaker Change: And discuss kind of timing and how we will fund that okay.
Speaker Change: Okay perfect.
Speaker Change: Look we're anxious to get we're anxious to get started but this is a process and we're going to follow the process.
Robert Sean Trauschke: No, absolutely. That's abundantly clear. And maybe quickly touching on your low growth and expectations, you know that it's trailing toward the high end, and do you have enough visibility to extend that strength into 25? And how do you think that impacts your planning assumptions beyond 24?
Speaker Change: Yes, absolutely.
Speaker Change: I will be clear.
Speaker Change: And maybe quickly touching on Europe load growth expectations, you noted it trailing toward high end and do you have enough visibility to extend that strengthened the 'twenty five and how do you think that impacts your planning assumptions beyond.
Speaker Change: Sure.
Brian Buckler: You want to cover that, Brian? Sure, sure.
Speaker Change: General.
Speaker Change: Do you want to cover that Brian sure sure.
Brian Buckler: You can probably tell from our comments, Constantine, that we're really bullish on load growth prospects. So, certainly, I think there's some upside to our load projections here in 2024 and also in each year of our five-year plan. You know, for OGE and, really, for Oklahoma, we bring several competitive advantages. First, we have low rates, and we have pockets of ample transmission capacity. In our state, there is abundant and affordable land, and tremendous access to renewables and natural gas.
Brian Butler: You can probably tell from our comments Constantine that were really bullish on <unk> growth prospects.
Brian Butler: So certainly I think there's some upside to our load projections here in 2024.
Brian Butler: But also in each year of our five year plan.
Speaker Change: For <unk> and really for Oklahoma, we bring several competitive advantages.
Speaker Change: First is our low rates and and we have pockets of ample of transmission capacity.
Speaker Change: Our state there is abundant and affordable and tremendous access to renewables and natural gas and those are all really to drivers that of.
Brian Buckler: And those are all really the drivers that have kicked-started load growth over the last three years. So we've got a great track record on that, and we think there's quite a bit of upside to the load numbers in 2025 and beyond. I think I mentioned in the last call that we expect it to be at least 2% in 2025 and in some of those out years, and there's certainly some upside to those as well.
Speaker Change: Kickstarted load growth over the last three years. So we've got a great track record on that and we think there's quite a bit of upside.
Speaker Change: Two of our numbers.
Speaker Change: <unk> 2025, and beyond I think I mentioned in our last call, we expect it to be at least 2%.
Speaker Change: In 2025 and out in some of those out years and Theres, certainly some upside to those as well.
Constantine Lednev: Okay, and does that low growth potentially help you defer some of the future rate cases as you're thinking about them, or not? The, I guess, new capital plan just requires more serial. Yeah, I think the benefit of that load
Speaker Change: Okay.
Speaker Change: Low growth potentially help you.
Speaker Change: Defer some of the future rate cases.
Speaker Change: They are thinking about them or.
Speaker Change: Yes.
Speaker Change: New capital plan.
Speaker Change: Require more.
Robert Sean Trauschke: Yeah, I think the benefit of that load growth and that customer growth Brian was talking about is that it's certainly going to create headroom and create a tailwind for us to make additional investments and maintain that competitive advantage we have with rates.
Speaker Change: <unk> filings.
Speaker Change: Yes, I think the benefit of that load growth in that customer growth Brian was talking about is.
Speaker Change: Certainly going to create.
Speaker Change: Headroom and create a tailwind for us to make additional investments and maintain that competitive competitive advantage, we have with rates.
Constantine Lednev: Thanks. I'll jump back in the queue. I appreciate the questions today.
Speaker Change: Okay.
Speaker Change: Thanks.
Operator: Thanks, Constantine. Thank you.
Speaker Change: Back in the queue I.
Speaker Change: Appreciate the questions today. Thanks.
Speaker Change: Thanks, guys. Thank you.
Operator: Please stand by for our next question. The next question comes from Durgesh Chopra with Evercore ISI. Your line is now open.
Speaker Change: Please standby for our next question.
Speaker Change: The next question.
Durgesh Chopra: <unk> comes from <unk> Chopra with Evercore ISI. Your line is now open.
Durgesh Chopra: Hey team, good morning. Thank you for giving me time. Hey, good morning.
Chopra: Hey, good morning, Thank you for giving me time.
Durgesh Chopra: Hey, good morning.
Durgesh Chopra: Alright.
Durgesh Chopra: Hey, good morning, just.
Durgesh Chopra: Just maybe, can you help us out with figuring out how to think about the ETF sensitivity to low growth? So obviously, this is a very strong trend, right? You're at the high end of the two to five this year, but how should we think about, you know, earnings implications for maybe a percentage change in load growth, something along those lines.
Durgesh Chopra: Maybe can you help us out with if theres a way to think about the EPS sensitivity.
Durgesh Chopra: From load growth.
Durgesh Chopra: Obviously this is a very strong trend toward the high end of the two to five this year, but how should we think about.
Durgesh Chopra: Earnings implications.
Durgesh Chopra: For maybe a percentage change in load growth something along those lines.
Brian Buckler: Hey, Durgesh, this is Brian. You know, it gets nuanced, I guess, between customer classes when you talk about these rules of thumb, but I'll tell you this year, we were expecting low growth benefit earnings by around 12 cents of EPS. That was around the midpoint of around 4% load growth. So you can maybe back into some high-level math with that.
Durgesh Chopra: Hey, <unk> this is Brian.
Brian Butler: It gets.
Brian Butler: It gets a nuance I guess between customer classes when you talk about.
Brian Butler: These rules of thumb.
Brian Butler: But I will tell you.
Brian Butler: For this year, we were expecting load growth to benefit earnings by around 12 cents of EPS.
Brian Butler: That was around the midpoint of around 4%.
Brian Butler: Load growth. So you can maybe back into some high level math with that.
Brian Buckler: You know, with our trends here in the 1st quarter, we think that's going to benefit us. What I mentioned in my comments is weather was negative 3 cents in the 1st quarter, and we think our load growth trends we're already seeing this year are going to make up for that. So I'll just tell you, we think we're going to be 3 cents to the good for that incremental load growth here in 2024.
Brian Butler: With art trends here in the first quarter.
Brian Butler: We think thats going to benefit us.
Brian Butler: What I mentioned in my comments as weather was negative <unk> <unk> in the first quarter and we think our load growth trends were already seen this year are going to make up for that so.
Brian Butler: I'll just tell you we pay for EMEA <unk>.
Brian Butler: That incremental load growth here in 2024.
Durgesh Chopra: That's excellent, Brian. That's exactly what I was looking for. And then maybe just your strategy around, if you can, to some extent, talk about the formulaic rate plan in Arkansas. You know, obviously, you have a settlement there, but as I understand it, it's going to expire here soon. So maybe just what's the plan there? Is it a rate case, or is it an extension, or a combination of both?
Speaker Change: That's excellent Brian Thats exactly what I was looking for thank you and then maybe just your strategy around if you can to the extent and talk about the formulary.
Speaker Change: Formulaic rate plan in Arkansas.
Speaker Change: Obviously, you have a settlement there, but as I understand it's going to expire here. Soon so maybe just what's the plan there is that a rate case or as an extension or a combination of both.
Robert Sean Trauschke: Yeah, Durgesh, that's exactly what we're required to do. We'll go back in for a rate filing, a rate case in Arkansas, and reinstitute the five-year formula rate plan. And so we're putting that plan together right now, and we'll let you know when we get ready to roll it out.
Brian Butler: Yes, Doug.
Brian Butler: Yes.
Speaker Change: That's exactly what.
Doug: We're required to do is we'll go back in for a rate filing a rate case in Arkansas.
Doug: Sure.
Doug: Reinstitute, the five year formula rate plan, and so we're putting that plan together right now.
Doug: <unk>.
Doug: And we will let you know when we get ready to filing.
Durgesh Chopra: Got it. So is it, Sean. Thank you.
Speaker Change: Got it so is it Sean. Thank you is it is it that you will have to file a rate case.
Sean: Or can you seek extension under a separate process.
Robert Sean Trauschke: Is it, is it that you have to file a rape case? Or can you seek an extension under a separate process? No, you need to file the rape case. You need to file the rape case. There needs to be a rape review.
Speaker Change: So you need to file the rate case, you need to file a rate case, there needs to be a rate review.
Durgesh Chopra: Perfect. Thank you so much. I appreciate the time. Have a great day.
Speaker Change: Perfect. Thank you so much I appreciate the time.
Speaker Change: Have a great day.
Operator: Please stand by for the next question. And the next question comes from Paul Fremont at Lattinburg Salmon & Co, Inc. Your line is now live.
Speaker Change: Please standby for the next question.
Speaker Change: And the next question comes from Paul Fremont at Ladenburg Thalmann and co incorporated your line is now live.
Operator: Thank you. Congratulations on a strong start. I was wondering, since testimony, initial testimony has come in already, what your thoughts are on the possibility of a settlement? And in Oklahoma, do you need to have a unanimous settlement, or do you think you can do partial settlements?
Paul Basch Michael Fremont: Thank you.
Paul Basch Michael Fremont: Congratulations on a strong start.
Paul Basch Michael Fremont: I was wondering since testimony initial testimony is comment already what your thoughts are on the possibility of a settlement.
Paul Basch Michael Fremont: And in Oklahoma.
Paul Basch Michael Fremont: Do you need to have a unanimous settlement or do you think you can do it.
Paul Basch Michael Fremont: Do you think you can do partial settlements.
Robert Sean Trauschke: Yeah, you know, so Paul, this is Sean. Good to hear from you this morning. You know, in Oklahoma, we've had non-unanimous settlements before. We've had some parties that just have agreed not to contest the settlement. You know, you're asking me how I feel. You know, I never like reading intervener testimony.
Paul Basch Michael Fremont: Yes.
Paul Basch Michael Fremont: Paul This is John good to hear from you this morning.
Paul Basch Michael Fremont: Oklahoma, we've had non unanimous settlement previously.
John: And we've had some parties that just have agreed not to contest the settlement.
Speaker Change: Youre asking me, how I feel I never like reading intervenor testimony, but nevertheless, we have a very solid case out there and we feel good about it we will begin having discussions once we file our rebuttal testimony and.
Robert Sean Trauschke: But nevertheless, we have a very solid case out there, and we feel good about it. We'll begin having discussions once we file our rebuttal testimony. And we'll go from there. I think there are a number of parties that would like to or are engaged in a settlement process. I think the Commission would prefer to see a settlement, but, you know, if you can't get there and you need to go another way, we're prepared to do that as well.
Speaker Change: And we'll go from there.
John: I think there are a number of parties that would like or be engaged in a settlement process.
John: I think the commission would prefer to stay a settlement but.
John: If you can get there and you need to go another way, we're prepared to do that as well.
Paul Basch Michael Fremont: And then I guess my other question has to do with sort of the commercial load growth that you guys experienced. How much of that is data center or AI driven?
Speaker Change: Great and then.
John: I guess my other question has to do with sort of the commercial load growth that you guys experienced how.
John: How much of that is.
John: Data center or AI driven.
Brian Buckler: Brian, you want to do that one? Sure, sure. Good morning, Paul.
John: Yeah.
John: Brian you want to do that one for sure sure good morning, Paul.
Brian Buckler: And, you know, on the commercial front, what we've seen in the last couple of years is the majority of load growth has come from kind of cryptocurrency data mining companies. We're seeing that shift a bit, Paul, so even those companies that have been doing cryptocurrency mining historically are now pivoting their business models prospectively. They're still going to do some of the data mining, but they're shifting their business models more to traditional, I guess you would call it traditional data center work around generative AI, for example, hosting those types of servers.
Brian Butler: On the commercial front, what we've seen in the last couple of years.
Brian Butler: The majority of the load growth has come from kind of crypto currency data mining companies, we're seeing that.
Brian Butler: Shift a bit Paul too.
Brian Butler: Even those companies that have been doing crypto currency mining historically are now.
Brian Buckler: Pivoting their business models, prospectively, and Theyre still going to do some of the data mining that they're shifting their business models more to traditional I guess, you would call it traditional data.
Brian Buckler: Center work around generative AI for example, hosting those types of servers.
Brian Buckler: A lot of our interest, a lot of the interest in our service territory currently for future years is data centers. But as we've spoken about before, we're seeing broad industries interested in our service area, whether it's the defense industry, or food and beverage distribution. Western Arkansas is really more of your traditional manufacturing. Some of the big names that you've been seeing your whole life. So it's an exciting time. But to answer your question directly, we have seen quite a bit of cryptocurrency load growth. That's about one and a half percent of our margins as we sit here today.
Brian Buckler: A lot of our interest.
John: Out of the interest in our service territory currently for future years as data centers, but as we've spoken to before we're seeing broad.
Brian Buckler: Industries being interested in our service area, whether it's the defense industry food and beverage distribution.
Brian Buckler: Western Arkansas is really more of your traditional manufacturing some of the big names that you've been seeing your whole life.
Speaker Change: So it's exciting time.
Speaker Change: But to answer your question directly we have seen quite a bit of crypto currency load growth. That's about one 5% of our margins as we sit here today.
Paul Basch Michael Fremont: And then that was sort of the second part of my question was going to be on margins. I mean, should we think of margins on data centers as being more like industrial or sort of traditional commercial type?
Speaker Change: And then that was sort of the second part of my question was going to be on margins I mean should we think of margins on the data centers as being.
Speaker Change: More like industrial or sort of traditional commercial type margins.
Brian Buckler: I would think of them as being some of your very largest loads tariffs, which feel more like some of your industrial groups you're thinking of, Paul. Typically, some of the lowest margin customers, and in fact, with some of these, they do improve over time as incentives roll off, but it's definitely a lot of load for, at least initially, some pretty low margins.
Brian Buckler: I would think of them as being very some of your very largest loads tariffs, which.
Speaker Change: <unk> more like some of your industrial groups Youre thinking I have Paul.
Brian Buckler: So typically some of the lowest margin customers.
Brian Buckler: In fact with some of these.
Brian Buckler: They do improve over time as incentives roll off but it's it's definitely a lot of <unk> for at least initially some pretty low margins.
Paul Basch Michael Fremont: And then sort of last question, you talked about sort of two categories. Can you give us like a percentage, maybe, idea? I mean, is it like 80% data centers and 20% of the more sort of traditional or just within the commercial category? You know, how much is being driven by data centers and crypto miners?
Brian Buckler: And then sort of last question you talked about sort of two categories.
Paul Basch Michael Fremont: Can you give us like a percentage maybe idea I mean is it like 80% data centers and 20% of them more sort of traditional or.
Paul Basch Michael Fremont: Just within the commercial category.
Paul Basch Michael Fremont: How much is being driven by sort of data centers and crypto miners.
Brian Buckler: Yeah, so I don't know if we've given that percentage, but it is the majority. Think of it maybe more like two-thirds, maybe a bit more than that, being your cryptocurrency. Again, it's shifting. It will be shifting more and more to data centers as we move.
Paul Basch Michael Fremont: Yes, so I don't know that we've given that percentage, but it is the majority I think of it maybe more like two thirds, maybe a bit more than that.
Brian Buckler: Youre crypto currency again, it's shifting it will be shifting more and more to data centers.
Paul Basch Michael Fremont: That's it for me. Thank you so much.
Brian Buckler: As we move.
Operator: All right. Thank you, Paul. One moment for the next question.
Speaker Change: That's it for me. Thank you so much.
Speaker Change: Alright, Thank you Paul.
Operator: One moment for the next question.
Operator: And the next question comes from Nicholas Campanella with Barclays. Nicholas, your line is now open.
Operator: And the next question comes from Nicholas Campanella with Barclays. Nicholas Your line is now open.
Nicholas Joseph Campanella: Hey, good morning, everyone. Thanks for taking my question and for all the information today. Yeah, good morning, Nick. Good morning.
Nicholas Joseph Campanella: Hey, good morning, everyone. Thanks for taking my question and for all the information of that.
Nicholas Joseph Campanella: So, I just wanted to follow up on one of Constantine's questions. And, you know, Brian, I know you brought this up in your prepared remarks. You just got your updated outlook from the agency. It's just, as you kind of layer in these RFPs to your capital plan, you know, if they do result in you, you know, winning some generation or some type of ownership opportunity, just how do we kind of think about the balance sheet capacity at this point relative to your FFO minimums and, you know, the incremental financing needs? Or is this just really, you know, is this capital going to replace, you know, other capital in the five-year plan to the extent that it materializes?
Nicholas Joseph Campanella: Yes, good morning.
Nicholas Joseph Campanella: So I just wanted to follow up on <unk> questions. Brian I know you brought up in your prepared remarks, you just got your updated outlook from the agencies just as you kind of layer in these rfps tiered to your capital plan. If they result in you winning some generation or some type of ownership opportunity just how.
Nicholas Joseph Campanella: Are we kind of think about the balance sheet capacity.
Nicholas Joseph Campanella: At this point relative to your ethanol minimums.
Nicholas Joseph Campanella: The incremental financing needs or is this just really.
Nicholas Joseph Campanella: And this capital going to replace.
Nicholas Joseph Campanella: Other capital in the five year plan to the extent that materializes.
Robert Sean Trauschke: Yeah, Nick, this is Sean. You know, like I mentioned, we're probably going to have a decision sometime next year from the commission in terms of approval for those generation items that we would own. And then we'll layer that in there. And I think we'll see where things stand when we get there, right? I think it's the best way.
Nicholas Joseph Campanella: Yes.
Sean: Nick This is Sean.
Robert Sean Trauschke: Like I mentioned, we're probably going to have a decision sometime next year from the commission in terms of approval for those generation and items that we would own.
Robert Sean Trauschke: And then we'll layer that in there.
Robert Sean Trauschke: And I think.
Robert Sean Trauschke: Well, we'll see where our where things stand when we get there right I think it's the best way and maintenance load continues to grow like it is obviously, you've got a little more room.
Robert Sean Trauschke: I mean, if load continues to grow like it is, obviously, you've got a little more room in your coverage ratios. We're protective of the balance sheet. That's very important to us. But how we fund it and what regulatory compact we arrive at to recover it, those all play into that. So I think it's a bit premature not knowing exactly what's gonna come out of the RFPs and what that regulatory compact will look like.
Robert Sean Trauschke: And your coverage ratios were protective of the balance sheet, that's very important to us.
Robert Sean Trauschke: But how we fund it and what regulatory compact we arrive at two.
Robert Sean Trauschke: To recover that those all play into that so I think it's a bit premature not knowing exactly what's going to come out of the rfps and what that regulatory compact would look like.
Nicholas Joseph Campanella: Okay, I appreciate it. And then I guess, you know, just on the storm that you brought up, also just Can you just remind us? I believe you have kind of deferrals for storms in place in your territories, but can you remind us there?
Speaker Change: Okay I appreciate it alright.
Nicholas Joseph Campanella: Alright, and then I guess just on the on the storm.
Nicholas Joseph Campanella: You brought up also.
Nicholas Joseph Campanella: Can you just remind us I believe you have to kind of deferrals for storms in place in your territory.
Brian Buckler: Hey Nick, we sure do. There's a tracking mechanism for storm costs in Oklahoma. So the first three million dollars of costs for an annual period go to expenses, and then the remainder on O&M goes into that tracker.
Nicholas Joseph Campanella: Can you remind us there.
Speaker Change: Hey, Nick.
Nick: Do theres, a theres a tracking mechanism for storm costs.
Speaker Change: In Oklahoma, So the first $3 million of cost on an annual period.
Nick: Go to expense in.
Brian Buckler: The remainder on O&M goes into that tracker.
Nicholas Joseph Campanella: Okay, thank you. Have a great day!
Operator: See you Nick. Take care Nick. As a reminder, to ask a question, you will
Speaker Change: Okay. Thank you have a great day.
Speaker Change: Take care.
Operator: As a reminder, to ask a question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by for the next question. The next question comes from Anthony Cloudwell at the Mizuho Group. Your line is:
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby for the next question.
Operator: Okay.
Anthony Christopher Crowdell: The next question comes from Anthony crowd, well at the Mizuho Group. Your line is now open.
Anthony Christopher Crowdell: Hey, good morning, guys. Brian, congrats on a wonderful three years. Good morning, Anthony. Good morning. I can't believe they kept me around so long.
Anthony Christopher Crowdell: Hey, good morning, guys, Brian Congrats on a wonderful three years.
Speaker Change: Good morning, Anthony.
Anthony Christopher Crowdell: Alright.
Anthony Christopher Crowdell: I know, I know. Well, hey, you never know. Don't be, don't be so negative. The day's not over yet.
Anthony Christopher Crowdell: Please go ahead.
Speaker Change: No well, Hey, you never know there'll be there'll be some negative data on over yet.
Anthony Christopher Crowdell: Yeah.
Brian Buckler: Just two housekeeping items. On the financing side, you talk about an issuance at the Holdco and an issuance at the Opco. Has the company, will the company, provide any clarity on what the interest rate you're assuming on those offerings?
Anthony Christopher Crowdell: Okay.
Brian Buckler: Housekeeping items on the financing slide you talk about an issuance at the Holdco issuance at the <unk>.
Brian Buckler: <unk> just.
Brian Buckler: Is it has the company well.
Brian Buckler: Can provide any clarity on what the interest rate youre, assuming on those on those offerings.
Brian Buckler: Yeah, Anthony, that's a good question. You know, we had assumed kind of in the mid-fives area for debt issuances. So at the Holdco, it's, you know, as you've seen the recent bond deals, it's probably a tick higher than that. But, you know, markets are dynamic. We'll see how they end up.
Speaker Change: Yes, Anthony that's a good question.
Brian Buckler: We had assumed kind of in that mid fives area for that.
Brian Buckler: Debt issuances, so so at the Holdco.
Brian Buckler: It's.
Brian Buckler: <unk> seen a recent bond deals is probably a tick higher than that.
Anthony Christopher Crowdell: But we're in a general area with our expectations sitting here today compared to where they were before. It may be a tick higher under current market conditions. But I'd say our CP and our short-term debt rates have been kind of spot on. We built some conservatism into the plan, and thank goodness we did. We feel like we're in great shape. And let me just add that while interest expense may be a tick higher, we're seeing, as I mentioned before, some really exceptional load growth. And so we're right on plan and feel really good about the full-year projections.
Anthony Christopher Crowdell: But the markets are.
Anthony Christopher Crowdell: Dynamic we will see how they they.
Anthony Christopher Crowdell: They end up but we're we're in a we're in a general area.
Anthony Christopher Crowdell: Our expectation sitting here today compared to where they were before maybe a tick higher under current market conditions.
Anthony Christopher Crowdell: But I would say, our CP and our short short term debt rates have been kind of spot on.
Anthony Christopher Crowdell: We built some conservatism into the plan and thank goodness, we did we.
Anthony Christopher Crowdell: We feel like we're in great shape.
Speaker Change: Let me just add to that.
Anthony Christopher Crowdell: While interest expense, maybe a tick higher.
Anthony Christopher Crowdell: We were seeing as I mentioned before some really exceptional load growth and so we're right on plan and feel really good about the full year projection.
Brian Buckler: Great. And then just on low growth, just a quick question, more on the residential customer growth, 1.1% residential low growth, much higher at 3.9%. Just, I'm curious what the drivers are for that residential growth number.
Speaker Change: Great and then just on loan growth just a quick question.
Speaker Change: More on the residential.
Brian Buckler: Customer growth of one 1% residential load growth much higher at three nine just I'm curious what the drivers are for that residential growth number.
Brian Buckler: Yeah, you know, it kind of ebbs and flows a bit. As you know, Anthony, last year we had flattish, maybe just ever so slightly negative on residential growth despite having good customer growth numbers. And certainly, we had a very large rate reduction in November in our fuel filing. I expect to have maybe a slight reduction again to the fuel tracker again here in May.
Brian Buckler: Yes.
Brian Buckler: It kind of ebbs and flows a bit as you know Anthony.
Brian Buckler: Last year, we had flattish maybe just ever so slightly negative on the residential growth.
Brian Buckler: Spite, having good customer growth numbers in.
Brian Buckler: And certainly we've.
Brian Buckler: Had a very large rate reduction in November.
Brian Buckler: And our fuel filing and expect to have.
Brian Buckler: Maybe a slightly a slight reduction again to the fuel tracker again here in May and I think that just helps.
Anthony Christopher Crowdell: And I think that just helps, you know, when you have low rates and the economy is good locally. We have low unemployment. The job market is really good here in Oklahoma. I think that really helps the residential class do well. But, you know, this is just one quarter. We'll see how the second quarter looks, and hopefully that trend continues for a bit. Great. Thanks.
Anthony Christopher Crowdell: When you have low rates and the economy is good locally we have low unemployment.
Anthony Christopher Crowdell: The job market is really good here in Oklahoma, I think that really helps the residential class do well, but this is one quarter, we will see how second quarter books.
Anthony Christopher Crowdell: Hopefully that trend continues for a bit.
Anthony Christopher Crowdell: Great. Thanks so much for taking the questions.
Speaker Change: Great. Thanks, so much for taking the questions.
Speaker Change: Thanks Anthony.
Anthony Christopher Crowdell: <unk>.
Robert Sean Trauschke: I'm showing no further questions at this time. I would now like to turn the call over to Sean Trauschke, Chairman, President, and CEO, for closing remarks.
Anthony Christopher Crowdell: I am showing no further questions at this time I would now like to turn the call over to Sean <unk>, Chairman, President and CEO for closing remarks.
Robert Sean Trauschke: Thank you, Liz, and thank you all for joining us today. Thank you for your interest in our company and for being on the call today. Please have a wonderful day. Take care.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Robert Sean Trauschke: Thank you Liz and thank you all for joining US today. Thank you for your interest in our company and for being on the call. Today. Please have a wonderful day take care.
Operator: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
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